TULSA, Okla. — Williams Energy Partners L.P. (NYSE:WEG) today announced an operating profit of $36.7 million for the quarter ended June 30, 2002, compared with $33.5 million in 2001. This represents a 9.6 percent increase.

Although Williams Pipe Line was acquired April 11, 2002, the acquisition is treated similar to a pooling of interest under accounting rules requiring that historical financial statements be restated to include the results from Williams Pipe Line for all periods.

Comparing the latest quarter operating profit to the restated 2001 quarter, operating profit growth was primarily attributable to increased transportation revenues on Williams Pipe Line; the acquisition of the Gibson, La., marine terminal facility in October 2001 and two inland terminals in Little Rock, Ark., in June 2001; higher utilization at our Gulf Coast marine terminal facilities; and reduced general and administrative expenses.

Net income for the second-quarter 2002 was $24.6 million compared with $22.9 million for 2001. This increase was attributable to reduced income taxes due to the partnership structure, offset by transaction fees and increased interest expense associated with the Williams Pipe Line acquisition.

Net income reflecting only the partnership's actual ownership period for Williams Pipe Line grew to $23.8 million in 2002 from $7.4 million in 2001, a 221.6 percent increase.

Don Wellendorf, chief executive officer of the general partner, said, "The Williams Pipe Line acquisition has added substantial growth to our per unit earnings, resulting in $1.05 earnings per limited partner unit for this quarter compared with 64 cents per limited partner unit for 2001.

"Our cash flows continue to be strong and the distribution increase announced last week emphasizes our confidence in the strength of Williams Energy Partners," Wellendorf added. "This increase represents our fifth consecutive distribution increase, and we remain committed to providing cash flow growth for our unitholders."

For the six months ended June 30, 2002, operating profit was $65.4 million compared with $56.4 million in 2001, an increase of 16 percent. Net income for the 2002 period was $45.8 million compared with $35.9 million in 2001. Earnings per limited partner unit for 2002 were $1.87 compared with 95 cents in 2001. Per unit numbers are not restated to reflect Williams Pipe Line results prior to the partnership's ownership.

Earnings for the year increased primarily due to the acquisition of the Gibson and Little Rock terminals, as well as increased utilization of terminals on Williams Pipe Line and the Gulf Coast marine facilities. Results further benefited from the elimination of income taxes associated with Williams Pipe Line operations, partially offset by transaction fees and increased interest expense associated with the Williams Pipe Line acquisition.

The average number of common, subordinated and class B units outstanding on a fully-diluted basis was 21.7 million units for second-quarter 2002 and 16.6 million units for the year, compared with 11.4 million units for both periods during 2001.

An investor conference call with management regarding second-quarter earnings is scheduled today at 2 p.m. Eastern. To participate in the conference call, dial (800) 289-0468 and provide code 553688. International callers should dial (913) 981-5517 and provide the same code. A webcast will also be available at www.williams.com/investors/weg/calendar.jsp.

Audio replays of the conference call will be available from 6 p.m. Eastern on July 29 through midnight on August 5. To access the replay, dial (888) 203-1112. International callers should dial (719) 457-0820. The access replay code is 553688.

About Williams Energy Partners L.P.

Williams Energy Partners L.P. was formed to own, operate and acquire a diversified portfolio of energy assets. The partnership is engaged principally in the transportation, storage and distribution of refined petroleum products and ammonia. The general partner of WEG is a unit of Williams (NYSE:WMB), which specializes in a broad array of energy-related services, including energy marketing and risk management and natural gas pipeline transportation.

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Portions of this document may constitute "forward-looking statements" as defined by federal law. Such statements are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Examples of such uncertainties and risk factors include, but are not limited to, changes in the price for crude oil, changes in demand for refined petroleum products, adverse developments affecting our ammonia pipeline customers, changes in federal government policies affecting farm subsidies, changes to cost estimates relating to specific acquisitions, changes in economic and industry conditions and changes in regulatory requirements (including changes in environmental requirements). These and other factors are set forth in the Partnership's Form 10-K for the year 2001 filed with the Securities and Exchange Commission.  

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