Fourth quarter loss shrinks at Williams Cos.

TULSA, Okla. (AP) _ Williams Cos. reported a $201 million fourth quarter loss Thursday, down significantly from a year earlier when a massive one-time charge hurt profits. <br><br>The Tulsa-based energy

Thursday, February 20th 2003, 12:00 am

By: News On 6

TULSA, Okla. (AP) _ Williams Cos. reported a $201 million fourth quarter loss Thursday, down significantly from a year earlier when a massive one-time charge hurt profits.

The Tulsa-based energy company also announced more planned asset sales, including its 55 percent stake and general partnership in Williams Energy Partners and about 30 percent of its pipeline system.

Williams said it agreed to sell its interest in its ethanol division, which operates ethanol plants in Pekin, Ill., and Aurora, Neb., to Morgan Stanley Capital Partners for about $75 million.

Williams said it expects to take a one-time charge of between $750 million and $800 million in the first quarter of 2003 to reflect a required accounting change for its long-term energy trading contracts.

Excluding that charge, Williams said it expects to earn between $250 million and $400 million, or 40 cents to 75 cents per share, in 2003 as its struggling energy trading unit returns to profitability.

Williams lost 40 cents per share in the period ending Dec. 31, compared with $2.39 cents, on a net loss of $1.24 billion, in the fourth quarter 2001. The company took a $1.3 billion charge in the 2001 period for debt it guaranteed at its former telecommunications subsidiary.

Minus one-time charges, which included impairments on assets sold during the fourth quarter, Williams lost $98.5 million, or 19 cents per share. Analysts surveyed by Thomson First Call had expected a loss of 17 cents per share.

Shares of Williams rose 30 cents, or 10 percent, to $3.20 Thursday morning on the New York Stock Exchange.

Williams had revenues of $1.7 billion in the fourth quarter, up 6 percent from 2001 revenues of $1.6 billion.

Williams lost $736.5 million on revenues of $5.6 billion in 2002, which chairman, chief executive and president Steve Malcolm called ``one of the most difficult years this 95-year-old company has ever faced.''

Williams said its core asset-based businesses _ its pipelines, exploration and production and midstream gas and liquids divisions _ continued to perform well.

Pipelines and exploration and production combined for $250.3 million in segment profits in the fourth quarter, but the midstream business lost $20.7 million due to $115 million one-time impairments of its Canadian assets.

Meanwhile, losses at its energy trading division were just $22.8 million in the fourth quarter, after losses of $885.1 million in the second and third quarters combined.

The collapse of Enron Corp., which led to credit downgrades and a drought of new business at Williams, continued to hurt the company's trading unit, for which it continues to seek a partner or buyers.

The first quarter charge will stem from a new rule by the Federal Accounting Standards Board requiring Williams to book revenue from its long-term energy trading contracts as it comes in. Williams had accounted the contracts' revenue upfront under mark-to-market rules.

Williams announced another $2.5 billion in planned asset sales Thursday, including its interest in Williams Energy Partners, the 6,000-mile Texas Gas pipeline, which represents about one-third of Williams 20,400 miles of natural gas pipelines, and less than 20 percent of its exploration and production and midstream assets.

After recent and planned asset sales, Williams said its workforce will be reduced to about 6,000 workers, down from about 12,000 a year ago.

Williams Energy, which stores, transports and distributes refined petroleum products and ammonia, earned $99.2 million in 2002 on revenues of $434.5 million.

Williams said it expects the following segment profits in 2003: between $500 million and $600 million in pipelines; between $300 million to $400 million in exploration and production; between $200 million to $300 million in midstream gas and liquids; and between $200 million to $350 million in energy trading.