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<SEC-DOCUMENT>0000950134-03-006238.txt : 20030422
<SEC-HEADER>0000950134-03-006238.hdr.sgml : 20030422
<ACCEPTANCE-DATETIME>20030422172855
ACCESSION NUMBER:		0000950134-03-006238
CONFORMED SUBMISSION TYPE:	S-4/A
PUBLIC DOCUMENT COUNT:		10
FILED AS OF DATE:		20030422

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			WILLIAMS COMPANIES INC
		CENTRAL INDEX KEY:			0000107263
		STANDARD INDUSTRIAL CLASSIFICATION:	NATURAL GAS TRANSMISSION [4922]
		IRS NUMBER:				730569878
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-4/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-85568
		FILM NUMBER:		03658865

	BUSINESS ADDRESS:	
		STREET 1:		ONE WILLIAMS CTR
		CITY:			TULSA
		STATE:			OK
		ZIP:			74172
		BUSINESS PHONE:		9185732000

	MAIL ADDRESS:	
		STREET 1:		ONE WILLIAM CENTER
		CITY:			TULSA
		STATE:			OK
		ZIP:			74172

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	WILLIAMS BROTHERS COMPANIES
		DATE OF NAME CHANGE:	19710817
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-4/A
<SEQUENCE>1
<FILENAME>d04378a2sv4za.txt
<DESCRIPTION>AMENDMENT NO. 2 TO FORM S-4
<TEXT>
<PAGE>


     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 22, 2003


                                                      REGISTRATION NO. 333-85568
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ---------------------

                                AMENDMENT NO. 2

                                       TO

                                    FORM S-4
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                             ---------------------
                          THE WILLIAMS COMPANIES, INC.
             (Exact Name of Registrant as Specified in Its Charter)

<Table>
<S>                             <C>                             <C>
           DELAWARE                          4922                         73-0569878
(State or Other Jurisdiction of  (Primary Standard Industrial          (I.R.S. Employer
Incorporation or Organization)    Classification Code Number)       Identification Number)
</Table>


<Table>
<S>                                            <C>
             ONE WILLIAMS CENTER                           JAMES J. BENDER, ESQ.
            TULSA, OKLAHOMA 74172                           ONE WILLIAMS CENTER
                (918) 573-2000                             TULSA, OKLAHOMA 74172
      (Address, Including Zip Code, and                        (918) 573-2000
       Telephone Number, Including Area           (Name, Address, Including Zip Code, and
       Code, of Registrant's Principal             Telephone Number, Including Area Code,
              Executive Offices)                           of Agent for Service)
                                         COPIES TO:
              KEVIN KEOGH, ESQ.                              MARLENE ALVA, ESQ.
               WHITE & CASE LLP                            DAVIS POLK & WARDWELL
         1155 AVENUE OF THE AMERICAS                        450 LEXINGTON AVENUE
           NEW YORK, NEW YORK 10036                       NEW YORK, NEW YORK 10017
                (212) 819-8200                                 (212) 450-4000
             (212) 354-8113 (FAX)                           (212) 450-3800 (FAX)
</Table>


                             ---------------------
     APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:  As soon
as practicable following the effectiveness of this registration statement.

     If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box.  [ ]

     If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering.  [ ] ________

     If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.  [ ]
                             ---------------------
                        CALCULATION OF REGISTRATION FEE

<Table>
<Caption>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
                                                        PROPOSED MAXIMUM     PROPOSED MAXIMUM
     TITLE OF EACH CLASS OF          AMOUNT TO BE      OFFERING PRICE PER   AGGREGATE OFFERING       AMOUNT OF
  SECURITIES TO BE REGISTERED         REGISTERED            NOTE(1)              PRICE(1)       REGISTRATION FEE(2)
- --------------------------------------------------------------------------------------------------------------------
<S>                              <C>                  <C>                  <C>                  <C>
8.125% Notes due March 15,
  2012..........................     $650,000,000             100%             $650,000,000           $59,800
- --------------------------------------------------------------------------------------------------------------------
8.750% Notes due March 15,
  2032..........................     $850,000,000             100%             $850,000,000           $78,200
- --------------------------------------------------------------------------------------------------------------------
Total...........................    $1,500,000,000                            $1,500,000,000          $138,000
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</Table>

(1) Estimated solely for the purpose of calculating the registration fee in
    accordance with Rule 457(f) promulgated under the Securities Act of 1933, as
    amended.
(2) Fee previously paid.
                             ---------------------
     THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT EXCHANGE THE OUTSTANDING SECURITIES UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS
IS NOT AN OFFER TO SELL THE NEW SECURITIES AND IT IS NOT SOLICITING AN OFFER TO
BUY THE NEW SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.


                  SUBJECT TO COMPLETION, DATED APRIL 22, 2003.


                          THE WILLIAMS COMPANIES, INC.
                               OFFER TO EXCHANGE
                               UP TO $650,000,000
                                       OF
                        8.125% NOTES DUE MARCH 15, 2012,
           THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933

                          FOR ANY AND ALL OUTSTANDING
                        8.125% NOTES DUE MARCH 15, 2012
                                      AND
                               UP TO $850,000,000
                                       OF
                        8.750% NOTES DUE MARCH 15, 2032,
           THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933

                          FOR ANY AND ALL OUTSTANDING
                        8.750% NOTES DUE MARCH 15, 2032
                             ---------------------

THE NEW SECURITIES ISSUED BY WILLIAMS:

- - The terms of the new 8.125% notes and the new 8.750% notes are substantially
  the same in all material respects as the terms of the outstanding 8.125% notes
  and the outstanding 8.750% notes, respectively, except that the transfer
  restrictions, registration rights and additional interest provisions relating
  to the outstanding 8.125% notes and the outstanding 8.750% notes do not apply
  to the new 8.125% notes and the new 8.750% notes. We will issue up to $650.0
  million aggregate principal amount of new 8.125% notes and up to $850.0
  million aggregate principal amount of new 8.750% notes.

THE EXCHANGE OFFER:


- - Expiration:  5:00 p.m., New York City time, on May --, 2003, unless we extend
  the expiration date.


- - Conditions:  The exchange offer is not conditioned upon any aggregate
  principal amount of outstanding 8.125% notes or outstanding 8.750% notes being
  tendered.


- - Tendered Securities:  All outstanding 8.125% notes and outstanding 8.750%
  notes that are validly tendered and not validly withdrawn will be exchanged
  for an equal principal amount of new 8.125% notes or new 8.750% notes that are
  registered under the Securities Act of 1933. If you fail to tender your
  outstanding 8.125% notes and outstanding 8.750% notes, you will continue to
  hold unregistered securities, and your ability to transfer them could be
  adversely affected. The outstanding 8.125% notes and the outstanding 8.750%
  notes currently bear interest at a rate equal to 8.625% and 9.250%,
  respectively, pursuant to the terms of the Registration Rights Agreement,
  which provides for such increase in the interest rate payable on the
  outstanding notes until the completion of the exchange offer. Upon the
  completion of the exchange offer, outstanding notes eligible for tender in the
  exchange offer and not validly tendered for exchange and the new 8.125% notes
  and the new 8.750% notes to be issued in the exchange offer will bear interest
  at a rate equal to 8.125% and 8.750%, respectively.


- - Withdrawal:  Tenders of outstanding 8.125% notes and outstanding 8.750% notes
  may be withdrawn at any time prior to the expiration of the exchange offer.

- - Tax Consequences:  The exchange of outstanding 8.125% notes or outstanding
  8.750% notes for new 8.125% notes or new 8.750% notes, respectively, will not
  be a taxable event for U.S. federal income tax purposes.

- - Trading:  Neither the new 8.125% notes nor the new 8.750% notes will be listed
  on any securities exchange.


SEE THE SECTION ENTITLED "RISK FACTORS" THAT BEGINS ON PAGE 14 FOR A DISCUSSION
OF THE RISKS THAT YOU SHOULD CONSIDER PRIOR TO TENDERING YOUR OUTSTANDING 8.125%
NOTES OR 8.750% NOTES FOR EXCHANGE.


NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.


                 The date of this prospectus is April --, 2003

<PAGE>


     The information contained in this prospectus was obtained from us and other
sources believed by us to be reliable. This prospectus also incorporates
important business and financial information about us that is not included in or
delivered with this prospectus. The documents containing this information are
listed under the section entitled "Where You Can Find More Information." We will
provide a copy of any and all of these documents to you by first-class mail,
without charge, upon written or oral request. ANY REQUEST FOR DOCUMENTS SHOULD
BE MADE BY MAY --, 2003 TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS PRIOR TO THE
EXPIRATION DATE OF THE EXCHANGE OFFER. Requests for documents should be directed
to:


                          The Williams Companies, Inc.
                              One Williams Center
                             Tulsa, Oklahoma 74172
                         Attention: Corporate Secretary
                           Telephone: (918) 573-2000

     You should rely only on the information contained in this prospectus or any
supplement and any information incorporated by reference in this prospectus or
any supplement. We have not authorized anyone to provide you with any
information that is different. If you receive any unauthorized information, you
must not rely on it. You should disregard anything we said in an earlier
document that is inconsistent with what is in or incorporated by reference in
this prospectus.

     You should not assume that the information in this prospectus or any
supplement is current as of any date other than the date on the front page of
this prospectus. This prospectus is not an offer to sell nor is it seeking an
offer to buy these securities in any state or jurisdiction where the offer or
sale is not permitted.

     None of Williams, the trustee under the indenture or the exchange agent is
making any recommendation to you as to whether or not you should tender your
outstanding 8.125% notes or your outstanding 8.750% notes in connection with
this exchange offer, and no one has been authorized by any of them to make any
such recommendation. You must make your own decision as to whether to tender
your outstanding 8.125% notes or your outstanding 8.750% notes and, if so, the
principal amount of securities to tender.

     You should read this document and the letter of transmittal carefully
before making a decision to tender your outstanding 8.125% notes or your
outstanding 8.750% notes.

     We include cross references in the prospectus to captions in these
materials where you can find further related discussions. The following table of
contents tells you where to find these captions.

                               TABLE OF CONTENTS


<Table>
<Caption>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Prospectus Summary..........................................    1
Risk Factors................................................   14
Use of Proceeds.............................................   24
The Exchange Offer..........................................   25
Description of the New Securities...........................   34
Material United States Federal Income Tax Considerations....   42
Plan of Distribution........................................   45
Forward-Looking Statements..................................   46
Legal Matters...............................................   47
Experts.....................................................   47
Where You Can Find More Information.........................   47
Incorporation of Documents by Reference.....................   47
</Table>

<PAGE>

                               PROSPECTUS SUMMARY

     This summary highlights selected information from this prospectus to help
you understand our business, the new 8.125% notes and the new 8.750% notes. It
likely does not contain all the information that is important to you or that you
should consider in making an investment decision. To understand all of the terms
of the exchange offer and to attain a more complete understanding of our
business and financial situation, you should read carefully this entire
prospectus and should consider consulting with your own legal and tax advisors.
References in this prospectus to "Williams," "we," "us" or "our" refer to The
Williams Companies, Inc.


GENERAL



     We are an energy company originally incorporated under the laws of the
state of Nevada in 1949 and reincorporated under the laws of the state of
Delaware in 1987. We were founded in 1908 when two Williams brothers began a
construction company in Fort Smith, Arkansas. Today, we primarily find, produce,
gather, process and transport natural gas. Our operations serve the Northwest,
California, Rocky Mountains, Gulf Coast and Eastern Seaboard markets.



     In 2002, we faced many challenges including credit issues following the
deterioration of our energy industry sector in the wake of the Enron bankruptcy
and the assumption of payment obligations and performance on guarantees
associated with our former telecommunications subsidiary, Williams
Communications Group, Inc. (WCG). With the deterioration of the energy industry,
the credit rating agencies' requirements for investment grade companies became
more stringent. In response to those requirements, we announced plans on
December 19, 2001, to strengthen our balance sheet in an effort to maintain our
investment grade ratings. Those plans, including revisions throughout the year
due to changing market conditions, included reducing capital expenditures,
eliminating certain credit ratings triggers from our loan agreements, cost
reductions including a reduction of quarterly dividends paid on our common
stock, and asset sales to generate proceeds to be used to reduce outstanding
debt. Despite our balance sheet strengthening efforts, we lost our investment
grade ratings in July 2002. With the loss of our investment grade ratings our
business changed significantly, especially our Energy Marketing & Trading
business. Some counterparties were unwilling to extend credit and required cash,
letters of credit, or other collateral. By mid-year we faced a liquidity crisis.
Concurrently, our credit facility banks were unwilling to extend our $2.2
billion 364 day unsecured credit facility. We quickly worked with our banks and
other parties to obtain secured credit facilities. In 2002, we also sold a
significant amount of assets to meet our liquidity gap. Following this liquidity
crisis, we continued to pursue cost reducing measures including a downsizing of
our work force. We also settled substantially all issues between us and WCG
through WCG's chapter 11 reorganization.



     To meet future debt obligations and liquidity needs and focus on creating
future shareholder value, on February 20, 2003, we reiterated our strategy to
become a smaller integrated natural gas company focusing on key growth markets
within our Gas Pipeline, Exploration & Production, and Midstream Gas & Liquids
segments. In conjunction with the strategy announcement and to help meet future
debt obligations and future liquidity needs, we also announced plans to sell
more assets including Texas Gas Transmission Corporation, our general and
limited partner interest in Williams Energy Partners L.P., and certain assets
within our Midstream Gas & Liquids and Exploration & Production business
segments, and explained that we are attempting to further limit our exposure to
losses in the Energy Marketing & Trading segment. We also expect further work
force reductions in 2003.



     We will need to complete further cost reductions and asset sales and the
realization of our strategy in order to meet our liquidity needs and to satisfy
our loan covenants regarding minimum levels of liquidity. See the Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Financial Condition and Liquidity section of our annual report on Form 10-K for
the fiscal year ending December 31, 2002 filed on March 19, 2003 incorporated
herein by reference for further details regarding the liquidity issues we are
facing. See also the Risk Factors on page 14 of this prospectus for a discussion


                                        1
<PAGE>


of factors that could adversely affect our business, operating results, and
financial condition as well as adversely affect the value of an investment in
our securities.



     Our ongoing business segments include Gas Pipeline, Exploration &
Production, Midstream Gas & Liquids, and Energy Marketing & Trading. At year-end
2002, our business segments also included Williams Energy Partners L.P. and
Petroleum Services. Subject to completion of asset sales, those business
segments will likely be eliminated in the future. See Part I -- Item 1.
Business -- Business Segments of our annual report on Form 10-K for the fiscal
year ending December 31, 2002 for a more detailed description of assets owned
and services provided by each our business segments.


RECENT DEVELOPMENTS


  ASSET SALES AND COST REDUCTIONS



     Since December 2001, we have continued to work on strengthening our balance
sheet through a number of efforts including asset sales and cost reductions. We
have completed the sale of, or announced our intention to sell, the following:



  Gas Pipeline



     - March 27, 2002 -- We sold our Kern River interstate natural gas pipeline
       business to a unit of Mid-American Energy Holdings Company for $450
       million in cash and the assumption of $510 million in debt. In
       conjunction with the sale, MEHC Investment, Inc., a wholly-owned
       subsidiary of Mid-American Energy Holdings Company, and a member of the
       Berkshire Hathaway family of companies, agreed to acquire 1,466,667
       shares of our 9 7/8 percent cumulative convertible preferred stock at
       $187.50 per share for a total of $275 million. Each share of convertible
       preferred stock is convertible into ten shares of our common stock.



     - August 16, 2002 -- We completed the sale of our general partner interest
       in Northern Border Partners, L.P. for $12 million to a unit of
       Calgary-based TransCanada.



     - September 5, 2002 -- We sold our Cove Point liquefied natural gas
       facility and 87 mile pipeline for $217 million in cash before certain
       adjustments to a subsidiary of Dominion Resources.



     - October 29, 2002 -- We sold our ownership interest in the Canadian and
       United States segments of the Alliance pipeline to Enbridge Inc. and Fort
       Chicago Energy Partners L.P. for approximately $173 million cash.



     - November 15, 2002 -- We sold our Central interstate natural gas pipeline
       to Southern Star Central Corp for $380 million in cash and the assumption
       of $175 million in debt.



     - April 14, 2003 -- We announced the sale of Texas Gas Transmission
       Corporation to Loews Pipeline Holding Corp., a unit of Loews Corporation,
       for $1.045 billion, which includes $795 million in cash to be paid to us
       and $250 million in debt that will remain at Texas Gas.



  Exploration & Production



     - March 29, 2002 -- We completed a $73 million sale of selected exploration
       and production properties in the Wind River basin.



     - July 31, 2002 -- We sold our Jonah Field natural gas production
       properties in Wyoming for $350 million to EnCana Oil & Gas (USA) Inc. In
       addition, we completed the sale of the vast majority of our natural gas
       production properties in the Anadarko Basin to Chesapeake Exploration
       Limited Partnership for approximately $37.5 million. These sales of
       exploration and production properties generated $326 million in net cash
       proceeds.



     - April 9, 2003 -- We announced the sale of certain natural gas exploration
       and production properties in Kansas, Colorado and New Mexico for $400
       million to XTO Energy Inc. of Fort Worth Texas.


                                        2
<PAGE>


       The sale is expected to close in June 2003 and will result in an
       estimated pre-tax gain to us of between $80 million and $100 million.



  Midstream Gas & Liquids



     - July 22, 2002 -- We announced our intention to sell our natural gas
      processing and liquids extraction operations in western Canada.



     - July 29, 2002 -- We sold our Kansas Hugoton natural gas gathering system
      to FrontStreet Hugoton LLC, an affiliate of FrontStreet Partners, LLC and
      GE Structured Finance Group for $77 million in cash.



     - August 1, 2002 -- We announced a series of transactions including the
      sale for approximately $1.2 billion of 98 percent of Mapletree LLC and 98
      percent of E-Oaktree, LLC to Enterprise Products Partners, L.P. Mapletree
      owns the Mid-America Pipeline, a 7,226-mile natural gas liquids pipeline
      system. E-Oaktree owns 80 percent of the Seminole Pipeline, a 1,281-mile
      natural gas liquids pipeline system. The sale generated $1.15 billion in
      net cash proceeds.



     - August 20, 2002 -- We announced our intention to sell our ownership
      interest in an olefins plant in Geismar, Louisiana and an associated
      ethylene pipeline system in Louisiana.



     - February 20, 2003 -- We announced our intention to sell selected assets
      within the Midstream Gas & Liquids segment.



  Energy Marketing & Trading



     - February 4, 2003 -- We announced the sale of our 170-megawatt power
      facility in Worthington, Indiana, to Hoosier Energy and terminated our
      power load serving full-requirements contract with Hoosier Energy for cash
      totaling $67 million.



     - March 20, 2003 -- We announced the sale of a full-requirements power
      agreement with Jackson Electric Membership Corporation to Progress Energy
      for cash totaling $188 million. The sale is expected to close on May 30,
      2003.



  Petroleum Services



     - April 11, 2002 -- We transferred the Williams Pipe Line System to
      Williams Energy Partners in exchange for $674 million cash and 7,830,924
      Class B units of limited partnership interests in Williams Energy
      Partners.



     - June 18, 2002 -- We announced plans to sell our Memphis and Alaska
      refineries and related petroleum assets. On March 4, 2003, we sold our
      Memphis, Tennessee refinery and other related operations to Premcor Inc.
      for approximately $455 million in cash.



     - February 20, 2003 -- We announced a definitive agreement to sell our
      equity interest in Williams Bio-Energy L.L.C. for approximately $75
      million to a new company formed by Morgan Stanley Capital Partners.
      Williams Bio-Energy owns and operates an ethanol production plant in
      Pekin, Illinois, holds 78.4 percent interest in another ethanol plant in
      Aurora, Nebraska, and has various agreements to market ethanol from
      third-party plants.



     - February 27, 2003 -- We sold our retail travel center operations for
      approximately $190 million in cash before debt repayments to Pilot Travel
      Centers LLC.



  Williams Energy Partners



     - April 21, 2003 -- We announced the sale of our 54.6 percent ownership
      interest in Williams Energy Partners L.P. in a $1.1 billion transaction.
      The buyer, a newly formed entity owned equally by Madison Dearborn
      Partners, LLC and Carlyle/Riverstone Global Energy and Power Fund II,
      L.P., has agreed to pay approximately $512 million in cash to us. The sale
      also will have the effect of


                                        3
<PAGE>


      removing $570 million of the partnership's debt from our consolidated
      balance sheet. The sale is scheduled to close in May 2003, subject to
      standard closing conditions. We expect to recognize a pre-tax gain of at
      least $285 million to $300 million, which will be reported in discontinued
      operations.



        Other



     - March 22, 2002 -- We announced our intention to sell our interest in a
      soda ash and sodium bicarbonate mining operation.



     - September 19, 2002 -- We sold our 26.85 percent equity interest in AB
      Mazeikiu Nafta, the Lithuania oil refining and transportation complex, to
      YUKOS Oil Company for $85 million.



     - In an effort to further reduce costs, we have reduced the total number of
      employees from approximately 12,400 at the end of 2001 to approximately
      6,500 in April, 2003. The reduction in work force was carried out in part
      through an enhanced-benefit early retirement program that concluded during
      the second quarter of 2002 and reductions associated with asset sales.



     - Going forward, we intend to focus on our natural gas businesses including
      natural gas transportation through our interstate natural gas pipelines,
      natural gas exploration and production, and natural gas gathering and
      processing in key growth markets.



  IMPROVING OUR FINANCIAL POSITION



     In addition to asset sales, we have taken other steps to improve our
financial position. On January 14, 2002, we completed the sale of $1.1 billion
of publicly traded units, known as FELINE PACS initially consisting of Income
PACS, which include a senior debt security and an equity purchase contract.
These units trade on the New York Stock Exchange under the ticker symbol WMB
PrI. The net proceeds of the offering were used to fund our capital program,
repay commercial paper and other short-term debt and for general corporate
purposes.



     On March 19, 2002, we closed a two-part debt transaction totaling $1.5
billion that included $850 million of 30-year notes with an interest rate of
8.75 percent and $650 million of 10-year notes with an interest rate of 8.125
percent. Proceeds were used to repay outstanding short-term debt, provide
working capital and for general corporate purposes. These are the notes to which
the exchange offer made by this prospectus relates.



     On August 1, 2002, we announced a series of transactions that resolved
then-current liquidity issues and strengthened our finances. We entered into
agreements for $1.1 billion of credit through an amended $700 million secured
revolving credit facility and a new $400 million secured letter of credit
facility. We also entered into a $900 million senior secured credit agreement
with a group of investors led by Lehman Brothers Inc. and a Berkshire Hathaway
affiliate. The execution of these new credit facilities in conjunction with the
asset sales announced on August 1, 2002, addressed our mid-year liquidity
crisis. See Note 11 to our Notes to Consolidated Financial Statements in our
annual report on Form 10-K for the fiscal year ending December 31, 2002 for more
information on the credit facilities.



     On March 4, 2003, Northwest Pipeline Corporation completed a $175 million
debt offering of senior notes due 2010. Northwest Pipeline Corporation intends
to use the proceeds for general corporate purposes, including the funding of
capital expenditures.



  ADDRESSING ENERGY MARKETING AND TRADING ISSUES



     We have also spent considerable effort addressing concerns of the Federal
Energy Regulatory Commission (FERC), the Commodity Futures Trading Commission
(CFTC), the Securities and Exchange Commission (SEC), the Department of Justice
(DOJ), and state regulatory bodies and attorneys general regarding energy
trading practices. On July 26, 2002, we announced an agreement in principle with
the state of California and other parties, including the states of Washington
and Oregon, on


                                        4
<PAGE>


a settlement regarding certain outstanding litigation and claims against us,
including the state's claims for refunds at issue before the FERC. On November
11, 2002, we announced that we had agreed to restructure our long-term energy
contracts with the state of California as part of the settlement. All necessary
approvals were obtained, and the settlement was closed on December 31, 2002,
although court approvals are still pending with respect to certain private
plaintiffs. The settlement resolved most of the outstanding litigation and civil
claims filed against us related to our participation in the natural gas and
power markets in the western United States during 2000 and 2001. The FERC ruled
on March 26, 2003 that refunds are due to the State of California utilities, but
that such refunds will be offset by amounts that remain due to sellers. The
March 26, 2003 order also established the formula for deriving the refund, which
amended the formula from the FERC's previous pronouncements to account for a
change in the gas price determination. While the effect of the changes remains
uncertain, due to the settlement, it only relates to the refunds to the
utilities.



     Due to continuing market declines and the overall energy marketing and
trading environment in the post-Enron world, we announced on June 10, 2002, that
we were reducing our financial commitment to that part of our business as a
realistic response to industry upheavals. Consistent with the effort in 2002,
Energy Marketing & Trading reduced its number of employees from approximately
1,000 at December 31, 2001 to approximately 410 at December 31, 2002. As of
February 25, 2003, the number of Energy Marketing & Trading employees was
approximately 330.



  RESOLUTION OF WILLIAMS COMMUNICATIONS GROUP ISSUES



     In 2002, we settled substantially all claims and disputes between us and
our former telecommunications subsidiary, WCG as part of WCG's chapter 11
reorganization. Prior to the commencement of WCG's chapter 11 on April 22, 2002,
we held various claims against WCG and its subsidiaries in an aggregate amount
of approximately $2.3 billion as a consequence of certain guarantees, services
provided, and other financial accommodations, including the following:



     - Prior to the 2001 spinoff of WCG, we had provided various administrative
      services to WCG for which we were owed approximately $106 million.



     - Prior to the 2001 spinoff of WCG, we also provided indirect credit
      support for $1.4 billion of WCG's structured notes through a commitment to
      make available proceeds of an equity issuance in the event any one of the
      following were to occur: (1) a WCG default; (2) downgrading of our senior
      unsecured debt by any of our credit rating agencies to below investment
      grade if our common stock closing price remained below $30.22 for ten
      consecutive trading days while such downgrade is in effect; or (3)
      proceeds from WCG's refinancing or remarketing of the structured notes
      prior to March 2004 produced proceeds of less than $1.4 billion. On March
      5, 2002, we received the requisite approvals on our consent solicitation
      to amend the terms of the WCG structured notes. The amendment, among other
      things, eliminated acceleration of the notes due to a WCG bankruptcy or
      our credit rating downgrade. The amendment also affirmed our obligations
      for all payments related to the WCG structured notes, which are due March
      2004, and allows us to fund such payments from any available sources. In
      July 2002, we concluded an exchange offer pursuant to which we exchanged
      substantially all of the WCG structured notes for a series of our notes
      due March 2004. With the exception of the March and September 2002
      interest payments, totaling $115 million, WCG remained indirectly
      obligated to reimburse us for any payments we are required to make in
      connection with the WCG structured notes.



     - In September 2001, we provided additional financing to WCG through a
      sale/leaseback transaction pursuant to which WCG sold to us the Williams
      Technology Center (Technology Center), related real estate and certain
      ancillary assets including corporate aircraft for $276 million in cash and
      WCG leased the foregoing property back from us for periods ranging from
      three to ten years. The Technology Center is a 15-story office building
      located in Tulsa, Oklahoma that WCG utilizes as its headquarters.


                                        5
<PAGE>


     - On March 8, 2002, we received a lease obligation notice letter from WCG
       relating to the asset defeasance program (ADP) that was entered into
       while WCG was still one of our subsidiaries. Under the ADP, we were
       obligated to pay $754 million related to WCG's purchase of certain
       telecommunications facilities that WCG had been leasing. We paid the $754
       million on March 29, 2002, and in return received an unsecured claim
       against WCG for the amount paid.



     - On April 22, 2002, WCG filed for chapter 11 bankruptcy protection.
      Through a negotiated settlement, we sold our claims against WCG including
      the $754 million claim associated with the ADP, the $1.4 billion claim
      associated with the WCG structured notes and a $106 million administrative
      services claim to Leucadia National Corporation (Leucadia) for $180
      million in cash and received releases from WCG and its affiliates and
      insiders. In addition, the order confirming WCG's chapter 11 plan
      permanently enjoins all of WCG's creditors from asserting direct or
      derivative claims against us. As part of the settlement, we also sold the
      Technology Center to WCG in exchange for two promissory notes with face
      amounts totaling $174.4 million secured by a mortgage on the Technology
      Center. We no longer own any interest in WCG or its post-bankruptcy
      successor, WilTel Communications Group, Inc. (WilTel) and all prior WCG
      obligations to us have been extinguished as a result of the chapter 11
      bankruptcy. We remain committed on certain pre-spinoff parental guarantees
      with a carrying value at December 31, 2002 of $48 million. Further, the
      September 2001 sale leaseback transaction involving the Technology Center
      was terminated as part of the bankruptcy process. The sale leaseback
      transaction involving WilTel's two corporate aircraft continues in effect
      until WilTel refinances that transaction. At that time, the proceeds of
      the refinancing are to be paid to us in partial satisfaction of one of the
      notes mentioned above. The settlement was closed into escrow on October
      15, 2002, and finalized on December 2, 2002, and we received $180 million.
      See Note 2 of the Notes to Consolidated Financial Statements in our annual
      report on Form 10-K for the year ended December 31, 2002 for more
      information on our settlement with WCG.


                                        6
<PAGE>


                         SUMMARY OF THE EXCHANGE OFFER



     You are entitled to exchange in the exchange offer your outstanding 8.125%
notes for new 8.125% notes with substantially identical terms, and your
outstanding 8.750% notes for new 8.750% notes with substantially identical
terms. You should read the discussion under the heading "Description of the New
Securities" beginning on page 33 for further information regarding the new
8.125% notes and the new 8.750% notes.



     We summarize the terms of the exchange offer below. You should read the
discussion under the heading "The Exchange Offer" beginning on page 24 for
further information regarding the exchange offer and resale of the new 8.125%
notes and the new 8.750% notes.


Securities to be Exchanged....   On March 19, 2002, we issued $650.0 million
                                 aggregate principal amount of outstanding
                                 8.125% Notes due March 15, 2012 and $850.0
                                 million aggregate principal amount of
                                 outstanding 8.750% Notes due March 15, 2032 to
                                 initial purchasers in transactions exempt from
                                 the registration requirements of the Securities
                                 Act of 1933.


                                 The outstanding 8.125% notes and the
                                 outstanding 8.750% notes currently bear
                                 interest at a rate equal to 8.625% and 9.250%,
                                 respectively, pursuant to the terms of the
                                 Registration Rights Agreement, which provides
                                 for such increase in the interest rate payable
                                 on the outstanding notes until the completion
                                 of the exchange offer. Upon the completion of
                                 the exchange offer, outstanding notes eligible
                                 for tender in the exchange offer and not
                                 validly tendered for exchange and the new
                                 8.125% notes and the new 8.750% notes to be
                                 issued in the exchange offer will bear interest
                                 at a rate equal to 8.125% and 8.750%,
                                 respectively.



                                 The terms of the new 8.125% notes and the new
                                 8.750% notes are substantially the same in all
                                 material respects as the terms of the
                                 outstanding 8.125% notes and the outstanding
                                 8.750% notes, except that (1) the new 8.125%
                                 notes and the new 8.750% notes will be freely
                                 transferable by the holders except as otherwise
                                 provided in this prospectus; (2) holders of the
                                 new 8.125% notes and the new 8.750% notes will
                                 have no registration rights; and (3) neither
                                 the new 8.125% notes nor the new 8.750% notes
                                 will contain provisions for an increase in
                                 their stated interest rate.


The Exchange Offer............   We are offering to exchange up to $650.0
                                 million aggregate principal amount of new
                                 8.125% notes for up to $650.0 million aggregate
                                 principal amount of outstanding 8.125% notes.
                                 We are offering to exchange up to $850.0
                                 million aggregate principal amount of new
                                 8.750% notes for up to $850.0 million aggregate
                                 principal amount of outstanding 8.750% notes.
                                 Outstanding 8.125% notes and outstanding 8.750%
                                 notes may be exchanged only in integral
                                 multiples of $1,000. The new 8.125% notes and
                                 the new 8.750% notes will evidence the same
                                 debt as the outstanding 8.125% notes and the
                                 outstanding 8.750% notes, respectively, and the
                                 new 8.125% notes and the new 8.750% notes will
                                 be governed by the same indenture as the
                                 outstanding 8.125% notes and the outstanding
                                 8.750% notes, respectively.

Resale........................   We believe that the new 8.125% notes and the
                                 new 8.750% notes issued in the exchange offer
                                 may be offered for resale, resold and

                                        7
<PAGE>

                                 otherwise transferred by you without compliance
                                 with the registration and prospectus delivery
                                 provisions of the Securities Act, provided
                                 that:

                                 - the new 8.125% notes and the new 8.750% notes
                                   are being acquired in the ordinary course of
                                   your business;

                                 - you are not participating, do not intend to
                                   participate, and have no arrangement or
                                   understanding with any person to participate,
                                   in the distribution of the new 8.125% notes
                                   and the new 8.750% notes issued to you in the
                                   exchange offer; and

                                 - you are not an "affiliate" of ours.


                                 If any of these conditions is not satisfied and
                                 you transfer any new 8.125% notes or new 8.750%
                                 notes issued to you in the exchange offer
                                 without delivering a prospectus meeting the
                                 requirements of the Securities Act or without
                                 an exemption from registration for your new
                                 8.125% notes and new 8.750% notes, you may
                                 incur liability under the Securities Act. We do
                                 not assume or indemnify you against any of
                                 those liabilities.


                                 Each broker-dealer that is issued new 8.125%
                                 notes or new 8.750% notes in the exchange offer
                                 for its own account in exchange for outstanding
                                 8.125% notes or outstanding 8.750% notes which
                                 were acquired by that broker-dealer as a result
                                 of market-making or other trading activities
                                 must acknowledge that it will deliver a
                                 prospectus meeting the requirements of the
                                 Securities Act in connection with any resale of
                                 the new 8.125% notes or the new 8.750% notes. A
                                 broker-dealer may use this prospectus for an
                                 offer to resell, resale or other transfer of
                                 the new 8.125% notes or the new 8.750% notes
                                 issued to it in the exchange offer.


Record Date...................   The record date for the exchange offer is May
                                 --, 2003. Only registered holders of
                                 outstanding 8.125% notes and outstanding 8.750%
                                 notes on the record date will receive materials
                                 relating to the exchange offer.



Expiration Date...............   The exchange offer will expire at 5:00 p.m.,
                                 New York City time, on May --, 2003, or such
                                 later date and time to which we extend it.


Withdrawal of Tenders.........   You may withdraw your tender of outstanding
                                 8.125% notes or outstanding 8.750% notes at any
                                 time prior to 5:00 p.m., New York City time, on
                                 the expiration date. To withdraw, the exchange
                                 agent must receive a notice of withdrawal at
                                 its address indicated under "The Exchange
                                 Offer -- Exchange Agent" before 5:00 p.m., New
                                 York City time, on the expiration date. We will
                                 return to you, without charge, promptly after
                                 the expiration or termination of the exchange
                                 offer any outstanding 8.125% notes or
                                 outstanding 8.750% notes that you tendered but
                                 that were not accepted for exchange.

Conditions to the Exchange
Offer.........................   We will not be required to accept outstanding
                                 8.125% notes or outstanding 8.750% notes for
                                 exchange if various conditions are not
                                 satisfied or waived by us. The exchange offer
                                 is not

                                        8
<PAGE>


                                 conditioned upon any minimum aggregate
                                 principal amount of outstanding 8.125% notes or
                                 outstanding 8.750% notes being tendered. Please
                                 read the section "The Exchange
                                 Offer -- Conditions to the Exchange Offer" on
                                 page 31 for more information regarding the
                                 conditions to the exchange offer.



Procedures for Tendering
Outstanding Securities........   If your outstanding 8.125% notes or outstanding
                                 8.750% notes are held through The Depository
                                 Trust Company and you wish to participate in
                                 the exchange offer, you may do so through the
                                 automated tender offer program of DTC. By
                                 participating in the exchange offer, you will
                                 agree to be bound by the letter of transmittal
                                 that we are providing with this prospectus as
                                 though you had signed the letter of
                                 transmittal. By signing or agreeing to be bound
                                 by the letter of transmittal, you will
                                 represent to us that, among other things:


                                 - any new 8.125% notes or new 8.750% notes that
                                   you receive will be acquired in the ordinary
                                   course of your business;

                                 - you have no arrangement or understanding with
                                   any person or entity to participate in the
                                   distribution of the new 8.125% notes or the
                                   new 8.750% notes;

                                 - if you are not a broker-dealer, you are not
                                   engaged in and do not intend to engage in the
                                   distribution of the new 8.125% notes or the
                                   new 8.750% notes;

                                 - if you are a broker-dealer that will receive
                                   new 8.125% notes or new 8.750% notes for your
                                   own account in exchange for outstanding
                                   8.125% notes or outstanding 8.750% notes that
                                   were acquired as a result of market-making
                                   activities, you will deliver a prospectus, as
                                   required by law, in connection with any
                                   resale of the new 8.125% notes or new 8.750%
                                   notes; and

                                 - you are not our "affiliate," as defined in
                                   Rule 405 of the Securities Act, or, if you
                                   are our affiliate, you will comply with any
                                   applicable registration and prospectus
                                   delivery requirements of the Securities Act.

                                 We will accept for exchange any and all
                                 outstanding 8.125% notes or outstanding 8.750%
                                 notes which are properly tendered (and not
                                 withdrawn) in the exchange offer prior to the
                                 expiration date. The new 8.125% notes and the
                                 new 8.750% notes issued pursuant to the
                                 exchange offer will be delivered promptly
                                 following the expiration date. See "The
                                 Exchange Offer -- Acceptance of Outstanding
                                 Securities for Exchange."

Effect of Not Tendering.......   Outstanding 8.125% notes and outstanding 8.750%
                                 notes that are not tendered or that are
                                 tendered but not accepted will, following the
                                 completion of the exchange offer, remain
                                 outstanding and will continue to be subject to
                                 the currently applicable transfer restrictions.
                                 Following the completion of the exchange offer,
                                 we will have no obligation to exchange new
                                 8.125% notes and new 8.750% notes for
                                 outstanding 8.125% notes and outstanding 8.750%
                                 notes or to provide for the registration of
                                 those outstanding securities under the
                                 Securities Act.
                                        9
<PAGE>


                                 Upon the completion of the exchange offer,
                                 outstanding notes eligible for tender in the
                                 exchange offer and not validly tendered for
                                 exchange will bear interest at a rate equal to
                                 8.125% and 8.750%, respectively.


                                 The trading market for outstanding 8.125% notes
                                 and outstanding 8.750% notes not exchanged in
                                 the exchange offer may be significantly more
                                 limited than it is at present. Therefore, if
                                 your outstanding 8.125% notes or outstanding
                                 8.750% notes are not tendered and accepted in
                                 the exchange offer, it may become more
                                 difficult for you to sell or transfer your
                                 unexchanged securities.

Special Procedures for
Beneficial Owners.............   If you are the beneficial owner of book-entry
                                 interests and your name does not appear on a
                                 security position listing of DTC as the holder
                                 of those book-entry interests or you own a
                                 beneficial interest in outstanding 8.125% notes
                                 or outstanding 8.750% notes that are registered
                                 in the name of a broker, dealer, commercial
                                 bank, trust company or other nominee, and you
                                 wish to tender that book-entry interest of
                                 outstanding 8.125% notes or outstanding 8.750%
                                 notes in the exchange offer, you should contact
                                 the registered holder promptly and instruct the
                                 registered holder to tender on your behalf.


Guaranteed Delivery
Procedures....................   If you wish to tender your outstanding 8.125%
                                 notes or outstanding 8.750% notes and cannot
                                 comply, prior to the expiration date, with the
                                 applicable procedures under the automated
                                 tender offer program of DTC, you must tender
                                 your outstanding 8.125% notes or outstanding
                                 8.750% notes according to the guaranteed
                                 delivery procedures described in "The Exchange
                                 Offer -- Procedures for Tendering Outstanding
                                 Securities -- Guaranteed Delivery" beginning on
                                 page 29.


Registration Rights
Agreement.....................   We sold the outstanding 8.125% notes and the
                                 outstanding 8.750% notes on March 19, 2002 in
                                 transactions exempt from the registration
                                 requirements of the Securities Act. In
                                 connection with these sales, we entered into a
                                 registration rights agreement with the initial
                                 purchasers which grants the holders of the
                                 outstanding 8.125% notes and the outstanding
                                 8.750% notes exchange registration rights. This
                                 exchange offer satisfies those rights, which
                                 terminate upon consummation of this exchange
                                 offer. You will not be entitled to any exchange
                                 or registration rights with respect to the new
                                 8.125% notes or the new 8.750% notes.


U.S. Federal Income Tax
Considerations................   The exchange of outstanding 8.125% notes for
                                 new 8.125% notes or of outstanding 8.750% notes
                                 for new 8.750% notes in the exchange offer will
                                 not be a taxable event for U.S. federal income
                                 tax purposes. See "Material United States
                                 Federal Income Tax Considerations."


Use of Proceeds...............   We will not receive any cash proceeds from the
                                 issuance of the new 8.125% notes or the new
                                 8.750% notes.

                                        10
<PAGE>


Exchange Agent................   We have appointed JPMorgan Chase Bank as the
                                 exchange agent for the exchange offer. The
                                 mailing address and telephone number of the
                                 exchange agent are Corporate Trust Services,
                                 2001 Bryan Street, 9th floor, Dallas, Texas
                                 75201, Attention: Frank Ivins, phone: (214)
                                 468-6464. See "The Exchange Offer -- Exchange
                                 Agent."


                   SUMMARY OF THE TERMS OF THE NEW SECURITIES

NEW 8.125% NOTES:


New 8.125% Notes Offered......   Up to $650.0 million principal amount of our
                                 8.125% notes due March 15, 2012.


Interest Rate.................   8.125% per year.


Interest Payment Dates........   March 15 and September 15 of each year,
                                 beginning September 15, 2003. Holders of new
                                 8.125% notes will receive interest from March
                                 15, 2003.


Use of Proceeds...............   We will not receive any cash proceeds from the
                                 exchange offer.

Ranking.......................   The new 8.125% notes will be senior unsecured
                                 obligations of Williams that will rank equally
                                 with all of our other outstanding senior
                                 unsecured and unsubordinated indebtedness.

Optional Redemption...........   We may redeem some or all of the new 8.125%
                                 notes at any time at the redemption price
                                 described in this prospectus, plus accrued and
                                 unpaid interest, if any, to the redemption
                                 date, as described in "Description of the New
                                 Securities -- Terms and Conditions."

Optional Exchange.............   Holders of outstanding 8.125% notes may opt not
                                 to tender their outstanding 8.125% notes in the
                                 exchange offer. Therefore, it is possible that
                                 not all new 8.125% notes offered by this
                                 prospectus will be issued.


Covenants.....................   We will issue the new 8.125% notes under an
                                 indenture between us and JPMorgan Chase Bank
                                 (formerly Bank One Trust Company, N.A.), as
                                 trustee. The indenture contains covenants that,
                                 among other things, limit our ability to:


                                 - create liens; and

                                 - consolidate, merge or sell material assets.

                                 These covenants, which are identical to the
                                 covenants applicable to the outstanding 8.125%
                                 notes, are subject to a number of important
                                 limitations and exceptions. See "Description of
                                 the New Securities -- Covenants" for a more
                                 comprehensive description of the covenants
                                 contained in the indenture.


NEW 8.750% NOTES:



New 8.750% Notes Offered......   Up to $850.0 million principal amount of our
                                 8.750% notes due March 15, 2032.


Interest Rate.................   8.750% per year.

                                        11
<PAGE>


Interest Payment Dates........   March 15 and September 15 of each year,
                                 beginning September 15, 2003. Holders of new
                                 8.750% notes will receive interest from March
                                 15, 2003.


Use of Proceeds...............   We will not receive any cash proceeds from the
                                 exchange offer.

Ranking.......................   The new 8.750% notes will be senior unsecured
                                 obligations of Williams that will rank equally
                                 with all of our other outstanding senior
                                 unsecured and unsubordinated indebtedness.

Optional Redemption...........   We may redeem some or all of the new 8.750%
                                 notes at any time at the redemption price
                                 described in this prospectus, plus accrued and
                                 unpaid interest, if any, to the redemption
                                 date, as described in "Description of the New
                                 Securities -- Terms and Conditions."

Optional Exchange.............   Holders of outstanding 8.750% notes may opt not
                                 to tender their outstanding 8.750% notes in the
                                 exchange offer. Therefore, it is possible that
                                 not all new 8.750% notes offered by this
                                 prospectus will be issued.


Covenants.....................   We will issue the new 8.750% notes under an
                                 indenture between us and JPMorgan Chase Bank
                                 (formerly Bank One Trust Company, N.A.), as
                                 trustee. The indenture contains covenants that,
                                 among other things, limit our ability to:


                                 - create liens; and

                                 - consolidate, merge or sell material assets.

                                 These covenants, which are identical to the
                                 covenants applicable to the outstanding 8.750%
                                 notes, are subject to a number of important
                                 limitations and exceptions. See "Description of
                                 the New Securities -- Covenants" for a more
                                 comprehensive description of the covenants
                                 contained in the indenture.

RISK FACTORS


     See "Risk Factors" beginning on page 14 for a discussion of factors that
should be considered by holders of outstanding 8.125% notes and outstanding
8.750% notes before tendering their securities in the exchange offer.


RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDEND
REQUIREMENTS

     The following table presents our consolidated ratio of earnings to combined
fixed charges and preferred stock dividend requirements for the periods shown.


<Table>
<Caption>
      YEAR ENDED DECEMBER 31,
- ------------------------------------
2002   2001*   2000*   1999*   1998*
- ----   -----   -----   -----   -----
<S>    <C>     <C>     <C>     <C>
(a)    2.76    2.88    1.64    1.41
</Table>


- ---------------


  *Certain amounts within the calculation of the ratio of earnings to fixed
   charges and preferred dividend requirements have been restated or
   reclassified due to certain activities of Williams which are now reported as
   discontinued operations as described in Note 1 of Notes to Consolidated
   Financial Statements included in Item 8 of Williams' Annual Report on Form
   10-K incorporated herein by reference.



(a)Earnings were inadequate to cover combined fixed charges and preferred stock
   dividend requirements by $656.3 million for the year ended December 31, 2002.


                                        12
<PAGE>

     For purposes of computing these ratios, earnings means income (loss) from
continuing operations before:

     - income taxes;

     - extraordinary gain (loss);

     - minority interest in income (loss) and preferred returns of consolidated
       subsidiaries;

     - interest expense, net of interest capitalized;

     - interest expense of 50-percent-owned companies;

     - that portion of rental expense that we believe to represent an interest
       factor;

     - pretax effect of dividends on preferred stock of Williams;

     - adjustment to equity earnings to exclude equity investments with losses;
       and

     - adjustment to equity earnings to reflect actual distributions from equity
       investments.

     Fixed charges means the sum of the following:

     - interest expense;

     - that portion of rental expense that we believe to represent an interest
       factor;

     - pretax effect of dividends on preferred stock of Williams;

     - pretax effect of dividends on preferred stock and other preferred returns
       of consolidated subsidiaries; and

     - interest expense of 50-percent-owned companies.

                                        13
<PAGE>

                                  RISK FACTORS

     In addition to the other information contained in or incorporated by
reference into this prospectus, you should carefully consider the following risk
factors in deciding whether to exchange your outstanding 8.125% notes or
outstanding 8.750% notes in the exchange offer.


RISKS AFFECTING OUR STRATEGY AND FINANCING NEEDS



  OUR STRATEGY TO STRENGTHEN OUR BALANCE SHEET AND IMPROVE LIQUIDITY DEPENDS ON
  OUR ABILITY TO DIVEST SUCCESSFULLY CERTAIN ASSETS.



     On February 20, 2003, we announced our intention to sell an additional
$2.25 billion in assets, properties and investments. At December 31, 2002, we
had debt obligations of $3.8 billion (including certain contractual fees and
deferred interest related to underlying debt) that will mature between now and
March 2004. Because our cash flow from operations will be insufficient alone to
repay all such debt and our access to capital markets is limited, in part as a
result of the loss of our investment grade ratings, we will depend on our sales
of assets to generate sufficient net cash proceeds to enable the payment of our
maturing obligations.



     Our secured credit facilities limit our ability to sell certain assets and
require generally that one-half of all net proceeds from asset sales be applied
(a) to repayment of certain long-term debt, (b) to cash collateralization of
designated letters of credit, and (c) to reduction of the lender commitments
under the secured facilities. The timing of and the net cash proceeds realized
from such sales are dependent on locating and successfully negotiating sales
with prospective buyers, regulatory approvals, industry conditions, and lender
consents. If the realized cash proceeds are insufficient or are materially
delayed, we might not have sufficient funds on hand to pay maturing indebtedness
or to implement our strategy.



  RECENT DEVELOPMENTS AFFECTING THE WHOLESALE POWER AND ENERGY TRADING INDUSTRY
  SECTOR HAVE REDUCED MARKET ACTIVITY AND LIQUIDITY AND MIGHT CONTINUE TO
  ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.



     As a result of the 2000-2001 energy crisis in California, the resulting
collapse in energy merchant credit, the recent volatility in natural gas prices,
the Enron Corporation bankruptcy filing, and investigations by governmental
authorities into energy trading activities and increased litigation related to
such inquiries, companies generally in the regulated and so-called unregulated
utility businesses have been adversely affected.



     These market factors have led to industry-wide downturns that have resulted
in some companies being forced to exit from the energy trading markets, leading
to a reduction in the number of trading partners and in market liquidity and
announcements by us, other energy suppliers and gas pipeline companies of plans
to sell large numbers of assets in order to boost liquidity and strengthen their
balance sheets. Proposed and completed sales by other energy suppliers and gas
pipeline companies could increase the supply of the type of assets we are
attempting to sell and potentially lead either to our failing to execute such
asset sales or our obtaining lower prices on completed asset sales. If either of
these developments were to occur, our ability to realize our strategy of
improving our liquidity and reducing our indebtedness through asset sales could
be significantly hampered.



  BECAUSE WE NO LONGER MAINTAIN INVESTMENT GRADE CREDIT RATINGS, OUR
  COUNTERPARTIES MIGHT REQUIRE US TO PROVIDE INCREASING AMOUNTS OF CREDIT
  SUPPORT WHICH WOULD RAISE OUR COST OF DOING BUSINESS.



     Our transactions in each of our businesses, especially in our Energy
Marketing & Trading business, will require greater credit assurances, both to be
given from, and received by, us to satisfy credit support requirements.
Additionally, certain market disruptions or a further downgrade of our credit
rating might


                                        14
<PAGE>


further increase our cost of borrowing or further impair our ability to access
one or any of the capital markets. Such disruptions could include:



     - further economic downturns;



     - capital market conditions generally;



     - market prices for electricity and natural gas;



     - terrorist attacks or threatened attacks on our facilities or those of
      other energy companies; or



     - the overall health of the energy industry, including the bankruptcy of
      energy companies.



RISKS RELATED TO OUR BUSINESS



  ELECTRICITY, NATURAL GAS LIQUIDS AND GAS PRICES ARE VOLATILE AND THIS
  VOLATILITY COULD ADVERSELY AFFECT OUR FINANCIAL RESULTS, CASH FLOWS, ACCESS TO
  CAPITAL AND ABILITY TO MAINTAIN EXISTING BUSINESSES.



     Our revenues, operating results, profitability, future rate of growth and
the carrying value of our electricity and gas businesses depend primarily upon
the prices we receive for natural gas and other commodities. Prices also affect
the amount of cash flow available for capital expenditures and our ability to
borrow money or raise additional capital.



     Historically, the markets for these commodities have been volatile and they
are likely to continue to be volatile. Wide fluctuations in prices might result
from relatively minor changes in the supply of and demand for these commodities,
market uncertainty and other factors that are beyond our control, including:



     - worldwide and domestic supplies of electricity, natural gas, petroleum
      and related commodities;



     - weather conditions;



     - the level of consumer demand;



     - the price and availability of alternative fuels;



     - the availability of pipeline capacity;



     - the price and level of foreign imports;



     - domestic and foreign governmental regulations and taxes;



     - the overall economic environment; and



     - the credit in the markets where products are bought and sold.



     These factors and the volatility of the energy markets make it extremely
difficult to predict future electricity and gas price movements with any
certainty. Further, electricity and gas prices do not necessarily move in
tandem.



  WE MIGHT NOT BE ABLE TO SUCCESSFULLY MANAGE THE RISKS ASSOCIATED WITH SELLING
  AND MARKETING PRODUCTS IN THE WHOLESALE ENERGY MARKETS.



     Our trading portfolios consist of wholesale contracts to buy and sell
commodities, including contracts for electricity, natural gas, natural gas
liquids and other commodities that are settled by the delivery of the commodity
or cash throughout the United States. If the values of these contracts change in
a direction or manner that we do not anticipate or cannot manage, we could
realize material losses from our trading activities. In the past, certain
marketing and trading companies have experienced severe financial problems due
to price volatility in the energy commodity markets. In certain instances this
volatility has caused companies to be unable to deliver energy commodities that
they had guaranteed under contract. In such event, we might incur additional
losses to the extent of amounts, if any, already paid to, or received from,
counterparties. In addition, in our businesses, we often extend credit to our
counterparties. Despite


                                        15
<PAGE>


performing credit analysis prior to extending credit, we are exposed to the risk
that we might not be able to collect amounts owed to us. If the counterparty to
such a financing transaction fails to perform and any collateral we have secured
is inadequate, we will lose money.



     If we are unable to perform under our energy agreements, we could be
required to pay damages. These damages generally would be based on the
difference between the market price to acquire replacement energy or energy
services and the relevant contract price. Depending on price volatility in the
wholesale energy markets, such damages could be significant.



  OUR RISK MEASUREMENT AND HEDGING ACTIVITIES MIGHT NOT PREVENT LOSSES.



     Although we have risk management systems in place that use various
methodologies to quantify risk, these systems might not always be followed or
might not always work as planned. Further, such risk measurement systems do not
in themselves manage risk, and adverse changes in energy commodity market
prices, volatility, adverse correlation of commodity prices, the liquidity of
markets, and changes in interest rates might still adversely affect our earnings
and cash flows and our balance sheet under applicable accounting rules, even if
risks have been identified.



     To lower our financial exposure related to commodity price and market
fluctuations, we have entered into contracts to hedge certain risks associated
with our assets and operations, including our long-term tolling agreements. In
these hedging activities, we have used fixed-price, forward, physical purchase
and sales contracts, futures, financial swaps and option contracts traded in the
over-the-counter markets or on exchanges, as well as long-term structured
transactions when feasible. Substantial declines in market liquidity, however,
as well as deterioration of our credit and termination of existing positions
(due for example to credit concerns) have greatly limited our ability to hedge
identified risks and have caused previously hedged positions to become unhedged.
To the extent we have unhedged positions, fluctuating commodity prices could
cause our net revenues and net income to be volatile.



  OUR OPERATING RESULTS MIGHT FLUCTUATE ON A SEASONAL AND QUARTERLY BASIS.



     Revenues from our businesses, including gas transmission and the sale of
electric power, can have seasonal characteristics. In many parts of the country,
demand for power peaks during the hot summer months, with market prices also
peaking at that time. In other areas, demand for power peaks during the winter.
In addition, demand for gas and other fuels peaks during the winter. As a
result, our overall operating results in the future might fluctuate
substantially on a seasonal basis. The pattern of this fluctuation might change
depending on the nature and location of our facilities and pipeline systems and
the terms of our power sale agreements and gas transmission arrangements.



  OUR INVESTMENTS AND PROJECTS LOCATED OUTSIDE OF THE UNITED STATES EXPOSE US TO
  RISKS RELATED TO LAWS OF OTHER COUNTRIES, TAXES, ECONOMIC CONDITIONS,
  FLUCTUATIONS IN CURRENCY RATES, POLITICAL CONDITIONS AND POLICIES OF FOREIGN
  GOVERNMENTS. THESE RISKS MIGHT DELAY OR REDUCE OUR REALIZATION OF VALUE FROM
  OUR INTERNATIONAL PROJECTS.



     We currently own and might acquire and/or dispose of material
energy-related investments and projects outside the United States. The economic
and political conditions in certain countries where we have interests or in
which we might explore development, acquisition or investment opportunities
present risks of delays in construction and interruption of business, as well as
risks of war, expropriation, nationalization, renegotiation, trade sanctions or
nullification of existing contracts and changes in law or tax policy, that are
greater than in the United States. The uncertainty of the legal environment in
certain foreign countries in which we develop or acquire projects or make
investments could make it more difficult to obtain non-recourse project or other
financing on suitable terms, could adversely affect the ability of certain
customers to honor their obligations with respect to such projects or
investments and could impair our ability to enforce our rights under agreements
relating to such projects or investments.



     Operations in foreign countries also can present currency exchange rate and
convertibility, inflation and repatriation risk. In certain conditions under
which we develop or acquire projects, or make


                                        16
<PAGE>


investments, economic and monetary conditions and other factors could affect our
ability to convert our earnings denominated in foreign currencies. In addition,
risk from fluctuations in currency exchange rates can arise when our foreign
subsidiaries expend or borrow funds in one type of currency but receive revenue
in another. In such cases, an adverse change in exchange rates can reduce our
ability to meet expenses, including debt service obligations. Foreign currency
risk can also arise when the revenues received by our foreign subsidiaries are
not in U.S. dollars. In such cases, a strengthening of the U.S. dollar could
reduce the amount of cash and income we receive from these foreign subsidiaries.
While we believe we have hedges and contracts in place to mitigate our most
significant foreign currency exchange risks, our hedges might not be sufficient
or we might have some exposures that are not hedged which could result in losses
or volatility in our revenues.



RISKS RELATED TO LEGAL PROCEEDINGS AND GOVERNMENTAL INVESTIGATIONS



  WE MIGHT BE ADVERSELY AFFECTED BY GOVERNMENTAL INVESTIGATIONS RELATED TO
  PRICING INFORMATION THAT WE PROVIDED TO MARKET PUBLICATIONS.



     On October 25, 2002, we disclosed that inaccurate pricing information had
been provided to energy industry trade publications. This disclosure came as a
result of an internal review conducted in conjunction with requests for
information made by the FERC and the CFTC on energy trading practices. We had
separately commenced a review of our historical survey publication data after
another market participant announced in September 2002 that certain of its
employees had provided inaccurate pricing data to publications. Later we
received a subpoena from the San Francisco office of the U.S. Attorney relating
to a federal grand jury inquiry regarding the same matters. We cannot predict
the outcome of this investigation or whether this investigation will lead to
additional legal proceedings against us, civil or criminal fines or penalties,
or other regulatory action, including legislation, which might be materially
adverse to the operation of our trading business and our trading revenues and
net income or increase our operating costs in other ways.



  WE MIGHT BE ADVERSELY AFFECTED BY GOVERNMENTAL INVESTIGATIONS AND ANY RELATED
  LEGAL PROCEEDINGS RELATED TO THE ALLEGED CONDUCTING OF "ROUNDTRIP" TRADES BY
  OUR ENERGY TRADING BUSINESS.



     Public and regulatory scrutiny of the energy industry and of the capital
markets has resulted in increased regulation being either proposed or
implemented. In particular, the activities of Enron Corporation and other energy
traders in allegedly using "roundtrip" trades which involve the prearrangement
of simultaneously executed and offsetting buy and sell trades for the purpose of
increasing reported revenues or trading volumes, or influencing prices and which
lack a legitimate business purpose, have resulted in increased public and
regulatory scrutiny. To date, we have responded to requests for information from
the FERC and the SEC, related to an investigation of "roundtrip" energy
transactions from January 2000 through 2002. We also have received and are
responding to subpoenas and supplemental requests for information regarding gas
and power trading activities, which involve the same issues and time period
covered by the requests from the Commodity Futures Trading Commission (CFTC).



     Such inquiries are ongoing and continue to adversely affect the energy
trading business as a whole. We might see these adverse effects continue as a
result of the uncertainty of these ongoing inquiries or additional inquiries by
other federal or state regulatory agencies. In addition, we cannot predict the
outcome of any of these inquiries, including the grand jury inquiry, or whether
these inquiries will lead to additional legal proceedings against us, civil or
criminal fines or penalties, or other regulatory action, including legislation,
which might be materially adverse to the operation of our trading business and
our trading revenues and net income or increase our operating costs in other
ways.


                                        17
<PAGE>


  WE MIGHT BE ADVERSELY AFFECTED BY OTHER LEGAL PROCEEDINGS AND GOVERNMENTAL
  INVESTIGATIONS RELATED TO THE ENERGY MARKETING AND TRADING BUSINESS.



     Electricity and natural gas markets in California and elsewhere will
continue to be subject to numerous and far-reaching federal and state
proceedings and investigations because of allegations that wholesale price
increases resulted from the exercise of market power and collusion of the power
generators and sellers such as Energy Marketing & Trading. Discussions by
governmental authorities and representatives in California and other states have
ranged from threats of re-regulation to suspension of plans to move forward
towards deregulation. The outcomes of these proceedings and investigations might
create corporate liability for Williams, directly or indirectly affect our
creditworthiness and ability to perform our contractual obligations as well as
other market participants' creditworthiness and their ability to perform their
contractual obligations.



RISKS RELATED TO THE REGULATION OF OUR BUSINESSES



  OUR BUSINESSES ARE SUBJECT TO COMPLEX GOVERNMENT REGULATIONS. THE OPERATION OF
  OUR BUSINESSES MIGHT BE ADVERSELY AFFECTED BY CHANGES IN THESE REGULATIONS OR
  IN THEIR INTERPRETATION OR IMPLEMENTATION.



     Existing regulations might be revised or reinterpreted, new laws and
regulations might be adopted or become applicable to us or our facilities, and
future changes in laws and regulations might have a detrimental effect on our
business. Certain restructured markets have recently experienced supply problems
and price volatility. These supply problems and volatility have been the subject
of a significant amount of press coverage, much of which has been critical of
the restructuring initiatives. In some of these markets, including California,
proposals have been made by governmental agencies and other interested parties
to re-regulate areas of these markets which have previously been deregulated. We
cannot assure you that other proposals to re-regulate will not be made or that
legislative or other attention to the electric power restructuring process will
not cause the deregulation process to be delayed or reversed. If the current
trend towards competitive restructuring of the wholesale and retail power
markets is reversed, discontinued or delayed, our business models might be
inaccurate and we might face difficulty in accessing capital to refinance our
debt and funding for operating and generating revenues in accordance with our
current business plans.



     For example, in 2000, the FERC issued Order 637, which sets forth revisions
to its policies governing the regulation of interstate natural gas pipelines
that it finds necessary to adjust its current regulatory model to the needs of
evolving markets. The FERC, however, determined that any fundamental changes to
its regulatory policy will be considered after further study and evaluation of
the evolving marketplace. Order 637 revised the FERC's pricing policy to waive
through September 30, 2002 the maximum price ceilings for short-term releases of
capacity of less than one year and to permit pipelines to file proposals to
implement seasonal rates for short-term services and term-differentiated rates.
Certain parties requested rehearing of Order 637 and eventually appealed certain
issues to the District of Columbia Circuit Court of Appeals. The D.C. Circuit
remanded as to certain issues, and on October 31, 2002, the FERC issued its
order on remand. Rehearing requests for that order are now pending with the
FERC. Given the extent of the FERC's regulatory power, we cannot give any
assurance regarding the likely regulations under which we will operate our
natural gas transmission and storage business in the future or the effect of
regulation on our financial position and results of operations.



     The FERC has proposed to broaden its regulations that restrict relations
between our jurisdictional natural gas companies, or "jurisdictional companies,"
and our marketing affiliates. In addition, the proposed rules would limit
communications between each of our jurisdictional companies and all of our other
companies engaged in energy activities. The rulemaking is pending at the FERC
and the precise scope and effect of the rule is unclear. If adopted as proposed,
the rule could adversely affect our ability to coordinate and manage our energy
activities.


                                        18
<PAGE>


  OUR REVENUES MIGHT DECREASE IF WE ARE UNABLE TO GAIN ADEQUATE, RELIABLE AND
  AFFORDABLE ACCESS TO TRANSMISSION AND DISTRIBUTION ASSETS DUE TO THE FERC AND
  REGIONAL REGULATION OF WHOLESALE MARKET TRANSACTIONS FOR ELECTRICITY AND GAS.



     We depend on transmission and distribution facilities owned and operated by
utilities and other energy companies to deliver the electricity and natural gas
we buy and sell in the wholesale market. If transmission is disrupted, if
capacity is inadequate, or if credit requirements or rates of such utilities or
energy companies are increased, our ability to sell and deliver products might
be hindered. The FERC has issued power transmission regulations that require
wholesale electric transmission services to be offered on an open-access,
non-discriminatory basis. Although these regulations are designed to encourage
competition in wholesale market transactions for electricity, some companies
have failed to provide fair and equal access to their transmission systems or
have not provided sufficient transmission capacity to enable other companies to
transmit electric power. We cannot predict whether and to what extent the
industry will comply with these initiatives, or whether the regulations will
fully accomplish the FERC'S objectives.



     In addition, the independent system operators who oversee the transmission
systems in regional power markets, such as California, have in the past been
authorized to impose, and might continue to impose, price limitations and other
mechanisms to address volatility in the power markets. These types of price
limitations and other mechanisms might adversely impact the profitability of our
wholesale power marketing and trading. Given the extreme volatility and lack of
meaningful long-term price history in many of these markets and the imposition
of price limitations by regulators, independent system operators or other marker
operators, we can offer no assurance that we will be able to operate profitably
in all wholesale power markets.



  THE DIFFERENT REGIONAL POWER MARKETS IN WHICH WE COMPETE OR WILL COMPETE IN
  THE FUTURE HAVE CHANGING REGULATORY STRUCTURES, WHICH COULD AFFECT OUR GROWTH
  AND PERFORMANCE IN THESE REGIONS.



     Our results are likely to be affected by differences in the market and
transmission regulatory structures in various regional power markets. Problems
or delays that might arise in the formation and operation of new regional
transmission organizations (RTOs) might restrict our ability to sell power
produced by our generating capacity to certain markets if there is insufficient
transmission capacity otherwise available. The rules governing the various
regional power markets might also change from time to time which could affect
our costs or revenues. Because it remains unclear which companies will be
participating in the various regional power markets, or how RTOs will develop or
what regions they will cover, we are unable to assess fully the impact that
these power markets might have on our business.



     Problems that might arise in the formation and operation of new RTOs might
result in delayed or disputed collection of revenues. The rules governing the
various regional power markets might also change from time to time which could
affect our costs or revenues. Because it remains unclear which companies will be
participating in the various regional power markets, or how RTOs will develop or
what regions they will cover, we are unable to assess fully the impact that
these power markets might have on our business.



  OUR GAS SALES, TRANSMISSION, AND STORAGE OPERATIONS ARE SUBJECT TO GOVERNMENT
  REGULATIONS AND RATE PROCEEDINGS THAT COULD HAVE AN ADVERSE IMPACT ON OUR
  ABILITY TO RECOVER THE COSTS OF OPERATING OUR PIPELINE FACILITIES.



     Our interstate gas sales, transmission, and storage operations conducted
through our Gas Pipelines business are subject to the FERC's rules and
regulations in accordance with the Natural Gas Act of 1938 and the Natural Gas
Policy Act of 1978. The FERC's regulatory authority extends to:



     - transportation and sale for resale of natural gas in interstate commerce;



     - rates and charges;



     - construction;


                                        19
<PAGE>


     - acquisition, extension or abandonment of services or facilities;



     - accounts and records;



     - depreciation and amortization policies; and



     - operating terms and conditions of service.



     The FERC has taken certain actions to strengthen market forces in the
natural gas pipeline industry that has led to increased competition throughout
the industry. In a number of key markets, interstate pipelines are now facing
competitive pressure from other major pipeline systems, enabling local
distribution companies and end users to choose a transmission provider based on
economic and other considerations.



RISKS RELATED TO ENVIRONMENTAL MATTERS



  WE COULD INCUR MATERIAL LOSSES IF WE ARE HELD LIABLE FOR THE ENVIRONMENTAL
  CONDITION OF ANY OF OUR ASSETS.



     We are generally responsible for all on-site liabilities associated with
the environmental condition of our facilities and assets, which we have acquired
or developed, regardless of when the liabilities arose and whether they are
known or unknown. In addition, in connection with certain acquisitions and sales
of assets, we might obtain, or be required to provide, indemnification against
certain environmental liabilities. If we incur a material liability, or the
other party to a transaction fails to meet its indemnification obligations to
us, we could suffer material losses.



  ENVIRONMENTAL REGULATION AND LIABILITY RELATING TO OUR BUSINESS WILL BE
  SUBJECT TO ENVIRONMENTAL LEGISLATION IN ALL JURISDICTIONS IN WHICH IT
  OPERATES, AND ANY CHANGES IN SUCH LEGISLATION COULD NEGATIVELY AFFECT OUR
  RESULTS OF OPERATIONS.



     Our operations are subject to extensive environmental regulation pursuant
to a variety of federal, provincial, state and municipal laws and regulations.
Such environmental legislation imposes, among other things, restrictions,
liabilities and obligations in connection with the generation, handling, use,
storage, transportation, treatment and disposal of hazardous substances and
waste and in connection with spills, releases and emissions of various
substances into the environment. Environmental legislation also requires that
our facilities, sites and other properties associated with our operations be
operated, maintained, abandoned and reclaimed to the satisfaction of applicable
regulatory authorities. Existing environmental regulations could also be revised
or reinterpreted, new laws and regulations could be adopted or become applicable
to us or our facilities, and future changes in environmental laws and
regulations could occur. The federal government and several states recently have
proposed increased environmental regulation of many industrial activities,
including increased regulation of air quality, water quality and solid waste
management.



     Compliance with environmental legislation will require significant
expenditures, including expenditures for compliance with the Clean Air Act and
similar legislation, for clean up costs and damages arising out of contaminated
properties, and for failure to comply with environmental legislation and
regulations which might result in the imposition of fines and penalties. The
steps we take to bring certain of our facilities into compliance could be
prohibitively expensive, and we might be required to shut down or alter the
operation of those facilities, which might cause us to incur losses.



     Further, our regulatory rate structure and our contracts with clients might
not necessarily allow us to recover capital costs we incur to comply with new
environmental regulations. Also, we might not be able to obtain or maintain from
time to time all required environmental regulatory approvals for certain
development projects. If there is a delay in obtaining any required
environmental regulatory approvals or if we fail to obtain and comply with them,
the operation of our facilities could be prevented or become subject to
additional costs. Should we fail to comply with all applicable environmental
laws, we might be subject to penalties and fines imposed against us by
regulatory authorities. Although we do not expect that the costs of complying
with current environmental legislation will have a material adverse effect on
our


                                        20
<PAGE>


financial condition or results of operations, no assurance can be made that the
costs of complying with environmental legislation in the future will not have
such an effect.



     Our wholly-owned subsidiary, Williams Energy Services, LLC, also retained
some potential environmental exposure from its sale, in April of 2002, of
Williams Pipe Line Company, LLC to Williams Energy Partners L.P. Included in the
terms of this transaction were various indemnities given by Williams Energy
Services, LLC to Williams Energy Partners L.P. The indemnities serve to protect
Williams Energy Partners from "Damages" that it sustains or incurs from the
pre-closing matters (including environmental liabilities and obligations
pursuant to the standards established by applicable environmental laws in effect
on April 11, 2002) specified in the sales agreement (the Contribution Agreement)
and from breaches of Williams Energy Services, LLC's representations, warranties
or covenants. The term "Damages" includes losses, costs, expenses, fines,
penalties, fees, liabilities and obligations. The parties agreed that Williams
Energy Services, LLC's indemnity obligations under the Contribution Agreement
would be limited to a maximum aggregate amount of $125 million. The indemnities
would survive the sale of Williams Pipe Line Company, LLC to another entity.



RISKS RELATING TO ACCOUNTING POLICY



  POTENTIAL CHANGES IN ACCOUNTING STANDARDS MIGHT CAUSE US TO REVISE OUR
  FINANCIAL DISCLOSURE IN THE FUTURE, WHICH MIGHT CHANGE THE WAY ANALYSTS
  MEASURE OUR BUSINESS OR FINANCIAL PERFORMANCE.



     Recently discovered accounting irregularities in various industries have
forced regulators and legislators to take a renewed look at accounting
practices, financial disclosures, companies' relationships with their
independent auditors and retirement plan practices. Because it is still unclear
what laws or regulations will develop, we cannot predict the ultimate impact of
any future changes in accounting regulations or practices in general with
respect to public companies or the energy industry or in our operations
specifically.



     In addition, the Financial Accounting Standards Board (FASB) or the SEC
could enact new accounting standards that might impact how we are required to
record revenues, expenses, assets and liabilities. For instance, Statement of
Financial Accounting Standards (SFAS) No. 143, "Accounting for Asset Retirement
Obligations," implemented on January 1, 2003, requires that the fair value of a
liability for an asset retirement obligation be recognized in the period in
which it is incurred if a reasonable estimate can be made. See Note 1 to our
Consolidated Financial Statements in our annual report on Form 10-K for the
fiscal year ending December 31, 2002 for further details.



     In October 2002, the FASB's Emerging Issues Task Force (EITF) reached
consensus on Issue No. 02-03 deliberations and rescinded Issue No. 98-10. As a
result, all energy trading contracts that do not meet the definition of a
derivative under SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," will be reported on an accrual basis.



     We will initially apply the consensus effective January 1, 2003, and expect
to record a reduction to net income of approximately $750 million to $800
million on an after-tax basis which will be reported as a cumulative effect of a
change in accounting principle.



     The accounting for Energy Marketing & Trading's energy-related contracts,
which include contracts such as transportation, storage, load serving and
tolling agreements, requires us to assess whether certain of these contracts are
executory service arrangements or leases pursuant to SFAS No. 13, "Accounting
for Leases." On March 20, 2003, the EITF continued discussion on Issue No. 01-8,
"Determining Whether an Arrangement Contains a Lease," and directed the working
group considering this issue to further address certain matters, including
transition. The most current report of the working group indicates the working
group supports a prospective transition of this issue, where the consensus would
be applied to arrangements consummated or substantively modified after the date
of the final consensus.



     Our preliminary review indicates that certain of our tolling agreements
could be considered to be leases under the model currently being discussed by
the EITF. Accordingly, if the EITF did not adopt a


                                        21
<PAGE>


prospective transition and applied the consensus to existing arrangements there
would be a significant negative impact to Williams' financial position and
results of operations.



RISKS RELATING TO OUR INDUSTRY



  THE LONG-TERM FINANCIAL CONDITION OF OUR U.S. AND CANADIAN NATURAL GAS
  TRANSMISSION AND MIDSTREAM BUSINESSES ARE DEPENDENT ON THE CONTINUED
  AVAILABILITY OF NATURAL GAS RESERVES.



     The development of additional natural gas reserves requires significant
capital expenditures by others for exploration and development drilling and the
installation of production, gathering, storage, transportation and other
facilities that permit natural gas to be produced and delivered to our pipeline
systems. Low prices for natural gas, regulatory limitations, or the lack of
available capital for these projects could adversely affect the development of
additional reserves and production, gathering, storage and pipeline transmission
and import and export of natural gas supplies. Additional natural gas reserves
might not be developed in commercial quantities and in sufficient amounts to
fill the capacities of our gathering and processing pipeline facilities.



  OUR GATHERING, PROCESSING AND TRANSPORTING ACTIVITIES INVOLVE NUMEROUS RISKS
  THAT MIGHT RESULT IN ACCIDENTS AND OTHER OPERATING RISKS AND COSTS.



     There are inherent in our gas gathering, processing and transporting
properties a variety of hazards and operating risks, such as leaks, explosions
and mechanical problems that could cause substantial financial losses. In
addition, these risks could result in loss of human life, significant damage to
property, environmental pollution, impairment of our operations and substantial
losses to us. In accordance with customary industry practice, we maintain
insurance against some, but not all, of these risks and losses. The occurrence
of any of these events not fully covered by insurance could have a material
adverse effect on our financial position and results of operations. The location
of pipelines near populated areas, including residential areas, commercial
business centers and industrial sites, could increase the level of damages
resulting from these risks.


RISKS ARISING FROM THE EXCHANGE OFFER

  THE TRADING MARKET FOR OUTSTANDING 8.125% NOTES AND OUTSTANDING 8.750% NOTES
  NOT EXCHANGED IN THE EXCHANGE OFFER MAY BE SIGNIFICANTLY MORE LIMITED THAN IT
  IS AT PRESENT.

     To the extent that outstanding 8.125% notes and outstanding 8.750% notes
are tendered and accepted for exchange pursuant to the exchange offer, the
trading market for outstanding 8.125% notes and outstanding 8.750% notes that
remain outstanding may be significantly more limited than it is at present. The
outstanding 8.125% notes and the outstanding 8.750% notes have not been
registered under the Securities Act and are subject to customary transfer
restrictions. In addition, a debt security with a smaller outstanding principal
amount available for trading (a smaller "float") may command a lower price than
would a comparable debt security with a larger float. Therefore, the market
price for outstanding 8.125% notes and outstanding 8.750% notes that are not
tendered and accepted for exchange pursuant to the exchange offer may be
affected adversely to the extent that the principal amount of the outstanding
8.125% notes and outstanding 8.750% notes exchanged pursuant to the exchange
offer reduces the float. A reduced float may also make the trading prices of
outstanding 8.125% notes and outstanding 8.750% notes that are not exchanged in
the exchange offer more volatile.


RISK RELATING TO THE NEW SECURITIES AND THE OUTSTANDING SECURITIES


  WE DEPEND ON PAYMENTS FROM OUR SUBSIDIARIES, AND CLAIMS OF NOTE HOLDERS RANK
  JUNIOR TO THOSE OF CREDITORS OF OUR SUBSIDIARIES.


     We are a holding company and we conduct substantially all of our operations
through our subsidiaries. We perform management, legal, financial, tax,
consulting, administrative and other services for our subsidiaries. Our
principal sources of cash are from external financings by our subsidiaries,
dividends and


                                        22
<PAGE>

advances from our subsidiaries, investments, payments by our subsidiaries for
services rendered, and interest payments from our subsidiaries on cash advances.
The amount of dividends available to us from our subsidiaries largely depends
upon each subsidiary's earnings and operating capital requirements. The terms of
some of our subsidiaries' borrowing arrangements limit the transfer of funds to
us. In addition, the ability of our subsidiaries to make any payments to us will
depend on our subsidiaries' earnings, business and tax considerations and legal
restrictions.


     As a result of our holding company structure, the outstanding and the new
8.125% notes and the outstanding and the new 8.750% notes will effectively rank
junior to all existing and future debt, trade payables and other liabilities of
our subsidiaries. Any right of Williams and our creditors to participate in the
assets of any of our subsidiaries upon any liquidation or reorganization of any
such subsidiary will be subject to the prior claims of that subsidiary's
creditors, including trade creditors, except to the extent that we may ourselves
be a creditor of such a subsidiary.


  THE COVENANTS CONTAINED IN OUR INDENTURE GENERALLY DO NOT LIMIT OUR ABILITY TO
  ENGAGE IN TRANSACTIONS THAT COULD ADVERSELY AFFECT OUR OPERATIONS.


     Except for the covenant limiting liens contained in our indenture, neither
our indenture nor the outstanding or the new notes contains any covenants or
other provisions designed to afford holders of the outstanding or the new 8.125%
notes and the outstanding or the new 8.750% notes protection in the event of a
highly leveraged transaction involving us or any restrictions on the amount of
additional indebtedness that we may issue. If we were to engage in a highly
leveraged transaction or substantially increase our outstanding indebtedness, it
could negatively affect our operations in a number of ways, including:



     - require us to dedicate a substantial portion of our cash flow from
       operations to payments on our indebtedness, thereby reducing the
       availability of our cash flow for other general corporate purposes;



     - limit our ability to fund future working capital, capital expenditures,
       acquisitions, investments, restructurings and other general corporate
       requirements;



     - limit our ability to obtain additional financing; and



     - limit our flexibility in responding to changes in our business and the
       energy industry.


     In addition, we would be required to repay any additional indebtedness as
it matured. We might not have sufficient funds or might be unable to arrange for
additional financing to repay any additional debt as it became due.


OTHER RISKS



  RECENT TERRORIST ACTIVITIES AND THE POTENTIAL FOR MILITARY AND OTHER ACTIONS
  COULD ADVERSELY AFFECT OUR BUSINESS.



     The continued threat of terrorism and the impact of retaliatory military
and other action by the United States and its allies might lead to increased
political, economic and financial market instability and volatility in prices
for natural gas, which could affect the market for our gas operations. In
addition, future acts of terrorism could be directed against companies operating
in the United States, and it has been reported that terrorists might be
targeting domestic energy facilities. While we are taking steps that we believe
are appropriate to increase the security of our energy assets, there is no
assurance that we can completely secure our assets or to completely protect them
against a terrorist attack. These developments have subjected our operations to
increased risks and, depending on their ultimate magnitude, could have a
material adverse effect on our business. In particular, we might experience
increased capital or operating costs to implement increased security for our
energy assets.



     The insurance industry has also been disrupted by these events. As a
result, the availability of insurance covering risks that we and our competitors
typically insure against might decrease. In addition, the insurance that we are
able to obtain might have higher deductibles, higher premiums and more
restrictive policy terms.


                                        23
<PAGE>

                                USE OF PROCEEDS

     We will not receive any cash proceeds from the issuance of the new 8.125%
notes or the new 8.750% notes in exchange for the outstanding 8.125% notes or
the outstanding 8.750% notes, respectively. We are making this exchange solely
to satisfy our obligations under a registration rights agreement. In
consideration for issuing the new 8.125% notes and the new 8.750% notes, we will
receive outstanding 8.125% notes and outstanding 8.750% notes in aggregate
principal amounts equal to the aggregate principal amounts of the new 8.125%
notes and the new 8.750% notes, respectively.

                                        24
<PAGE>

                               THE EXCHANGE OFFER

EXCHANGE TERMS

     An aggregate of $650.0 million principal amount of outstanding 8.125% notes
and an aggregate of $850.0 million principal amount of outstanding 8.750% notes
are currently issued and outstanding. The maximum principal amount of new 8.125%
notes that will be issued in exchange for outstanding 8.125% notes is $650.0
million, and the maximum principal amount of new 8.750% notes that will be
issued in exchange for outstanding 8.750% notes is $850.0 million. The terms of
the new 8.125% notes and the new 8.750% notes and the outstanding 8.125% notes
and the outstanding 8.750% notes, respectively, are substantially the same in
all material respects, except that the transfer restrictions, registration
rights and additional interest provisions relating to the outstanding 8.125%
notes and the outstanding 8.750% notes do not apply to the new 8.125% notes and
the new 8.750% notes.


     The new 8.125% notes will bear interest at a rate of 8.125% per year,
payable semiannually on March 15 and September 15 of each year, beginning
September 15, 2003. The new 8.750% notes will bear interest at the rate of
8.750% per year, payable semiannually on March 15 and September 15 of each year,
beginning September 15, 2003. Holders of new 8.125% notes and new 8.750% notes
will receive interest accrued from March 15, 2003, the date of the last payment
of interest on the outstanding 8.125% notes and the outstanding 8.750% notes. In
order to exchange your outstanding 8.125% notes or outstanding 8.750% notes for
new 8.125% notes or new 8.750% notes in the exchange offer, you will be required
to make the following representations:


     - any new 8.125% notes or new 8.750% notes will be acquired in the ordinary
       course of your business;

     - you have no arrangement with any person to participate in the
       distribution of the new 8.125% notes or new 8.750% notes; and

     - you are not our "affiliate," as defined in Rule 405 of the Securities
       Act, or if you are our affiliate, you will comply with the applicable
       registration and prospectus delivery requirements of the Securities Act.

     Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal, we will accept for exchange any outstanding
8.125% notes and outstanding 8.750% notes properly tendered in the exchange
offer, and the exchange agent will deliver the new 8.125% notes and new 8.750%
notes promptly after the expiration date (as defined below) of the exchange
offer. We expressly reserve the right to delay acceptance of any of the tendered
outstanding 8.125% notes or outstanding 8.750% notes not already accepted if any
condition set forth below under "-- Conditions to the Exchange Offer" has not
been satisfied or waived by us.

     If you tender your outstanding 8.125% notes or outstanding 8.750% notes,
you will not be required to pay brokerage commissions or fees or, subject to the
instructions in the letter of transmittal, transfer taxes with respect to the
exchange of the outstanding 8.125% notes and outstanding 8.750% notes. We will
pay all charges, expenses and transfer taxes in connection with the exchange
offer, other than certain taxes described below under "-- Transfer Taxes."

     You may tender some or all of your outstanding 8.125% notes or outstanding
8.750% notes in connection with this exchange offer. However, outstanding 8.125%
notes and outstanding 8.750% notes may only be tendered in integral multiples of
$1,000.

EXPIRATION DATE; EXTENSIONS; TERMINATION; AMENDMENTS


     The exchange offer will expire at 5:00 p.m., New York City time, on May --,
2003, the "expiration date," unless extended by us. We expressly reserve the
right to extend the exchange offer on a daily basis or for such period or
periods as we may determine in our sole discretion from time to time by giving
oral, confirmed in writing, or written notice to the exchange agent and by
making a public announcement by press release to the Dow Jones News Service
prior to 9:00 a.m., New York City time, on the first business


                                        25
<PAGE>

day following the previously scheduled expiration date. During any extension of
the exchange offer, all outstanding 8.125% notes and outstanding 8.750% notes
previously tendered, not validly withdrawn and not accepted for exchange will
remain subject to the exchange offer and may be accepted for exchange by us.

     To the extent we are legally permitted to do so, we expressly reserve the
absolute right, in our sole discretion, to:

     - waive any condition to the exchange offer; and

     - amend any of the terms of the exchange offer.


     Any waiver or amendment to the exchange offer will apply to all outstanding
8.125% notes and outstanding 8.750% notes tendered, regardless of when or in
what order the outstanding 8.125% notes and outstanding 8.750% notes were
tendered. If we make a material change in the terms of the exchange offer or if
we waive a material condition of the exchange offer, we will disseminate
additional exchange offer materials. If the amendment or waiver is made less
than ten business days before the expiration of the exchange offer, we will
extend the exchange offer so that holders of outstanding 8.125% notes and
outstanding 8.750% notes have at least ten business days to tender or withdraw.


     We expressly reserve the right, in our sole discretion, to terminate the
exchange offer if any of the conditions set forth under "-- Conditions to the
Exchange Offer" exists. Any such termination will be followed promptly by a
public announcement. In the event we terminate the exchange offer, we will give
immediate notice to the exchange agent, and all outstanding 8.125% notes and
outstanding 8.750% notes previously tendered and not accepted for payment will
be returned promptly to the tendering holders.

     In the event that the exchange offer is withdrawn or otherwise not
completed, new 8.125% notes and new 8.750% notes will not be given to holders of
outstanding 8.125% notes and outstanding 8.750% notes who have tendered their
outstanding 8.125% notes and outstanding 8.750% notes.

RESALE OF NEW SECURITIES

     Based on interpretations of the SEC staff set forth in no action letters
issued to third parties, we believe that new 8.125% notes and new 8.750% notes
issued under the exchange offer in exchange for outstanding 8.125% notes and
outstanding 8.750% notes, respectively, may be offered for resale, resold and
otherwise transferred by you without compliance with the registration and
prospectus delivery provisions of the Securities Act, if:

     - you are not our "affiliate" within the meaning of Rule 405 under the
       Securities Act;

     - you are acquiring new 8.125% notes or new 8.750% notes in the ordinary
       course of your business; and

     - you do not intend to participate in the distribution of the new 8.125%
       notes or new 8.750% notes.

     If you tender outstanding 8.125% notes or outstanding 8.750% notes in the
exchange offer with the intention of participating in any manner in a
distribution of the new 8.125% notes or new 8.750% notes:

     - you cannot rely on those interpretations by the SEC staff; and

     - you must comply with the registration and prospectus delivery
       requirements of the Securities Act in connection with a secondary resale
       transaction and that secondary resale transaction must be covered by an
       effective registration statement containing the selling security holder
       information required by Item 507 or 508, as applicable, of Regulation
       S-K.

     Unless an exemption from registration is otherwise available, any security
holder intending to distribute new 8.125% notes and new 8.750% notes will need
to rely on an effective registration statement under the Securities Act
containing the selling security holder's information required by Item 507 of
Regulation S-K under the Securities Act. This prospectus may be used for an
offer to resell, a resale or other transfer of new 8.125% notes and new 8.750%
notes only as specifically set forth in this prospectus. Broker-dealers may
participate in the exchange offer only if they acquired their outstanding 8.125%
notes

                                        26
<PAGE>

or outstanding 8.750% notes as a result of market-making activities or other
trading activities. Each broker-dealer that receives new 8.125% notes or new
8.750% notes for its own account in exchange for outstanding 8.125% notes or
outstanding 8.750% notes, where such outstanding 8.125% notes or outstanding
8.750% notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of the new 8.125% notes or new 8.750%
notes. We have agreed to allow such broker-dealers and other persons, if any,
subject to similar prospectus delivery requirements, to use this prospectus in
connection with the resale of new 8.125% notes and new 8.750% notes. Please read
the section captioned "Plan of Distribution" for more details regarding the
transfer of new 8.125% notes and new 8.750% notes.

ACCEPTANCE OF OUTSTANDING SECURITIES FOR EXCHANGE

     If the conditions specified below under "-- Conditions to the Exchange
Offer" have been satisfied or waived on or prior to the expiration date of the
exchange offer, we will accept for exchange outstanding 8.125% notes and
outstanding 8.750% notes validly tendered pursuant to the exchange offer, or
defectively tendered, if such defect has been waived by us, and not withdrawn
prior to the expiration date of the exchange offer. We will not accept
outstanding 8.125% notes or outstanding 8.750% notes for exchange subsequent to
the expiration date of the exchange offer. Tenders of outstanding 8.125% notes
and outstanding 8.750% notes will be accepted only in principal amounts equal to
$1,000 or integral multiples thereof.

     We expressly reserve the right, in our sole discretion, to:

     - delay acceptance for exchange of outstanding 8.125% notes and outstanding
       8.750% notes tendered under the exchange offer, subject to Rule 14e-1
       under the Exchange Act, which requires that an offeror pay the
       consideration offered or return the securities deposited by or on behalf
       of the holders promptly after the termination or withdrawal of a tender
       offer; or


     - terminate the exchange offer and not accept for exchange any outstanding
       8.125% notes or outstanding 8.750% notes not theretofore accepted for
       exchange, in whole or in part, if any of the conditions set forth below
       under "-- Conditions to the Exchange Offer" has not been satisfied or
       waived by us or in order to comply with any applicable law. In all cases,
       new 8.125% notes and new 8.750% notes will be issued only after timely
       receipt by the exchange agent of certificates representing outstanding
       8.125% notes or outstanding 8.750% notes, or confirmation of book-entry
       transfer, a properly completed and duly executed letter of transmittal,
       or a manually signed facsimile thereof, or an agent's message in lieu
       thereof, and any other required documents. For purposes of the exchange
       offer, we will be deemed to have accepted for exchange validly tendered
       outstanding 8.125% notes and outstanding 8.750% notes, or defectively
       tendered outstanding 8.125% notes and outstanding 8.750% notes with
       respect to which we have waived such defect, if, as and when we give
       oral, confirmed in writing, or written notice to the exchange agent.
       Promptly after the expiration date, we will deposit the new 8.125% notes
       and the new 8.750% notes with the exchange agent, who will act as agent
       for the tendering holders for the purpose of receiving the new 8.125%
       notes and new 8.750% notes and transmitting them to the holders. The
       exchange agent will deliver the new 8.125% notes and new 8.750% notes to
       holders of outstanding 8.125% notes and outstanding 8.750% notes accepted
       for exchange after the exchange agent receives the new 8.125% notes and
       new 8.750% notes.


     If for any reason, we delay acceptance for exchange of validly tendered
outstanding 8.125% notes or outstanding 8.750% notes or we are unable to accept
for exchange validly tendered outstanding 8.125% notes or outstanding 8.750%
notes, then the exchange agent may, nevertheless, on our behalf, retain tendered
outstanding 8.125% notes and outstanding 8.750% notes, without prejudice to our
rights described under "-- Expiration Date; Extensions; Termination;
Amendments," "-- Withdrawal of Tenders" and "-- Conditions to the Exchange
Offer," subject to Rule 14e-1 under the Exchange Act, which requires that an
offeror pay the consideration offered or return the securities deposited by or
on behalf of the holders thereof promptly after the termination or withdrawal of
a tender offer.

                                        27
<PAGE>


     If any tendered outstanding 8.125% notes or outstanding 8.750% notes are
not accepted for exchange for any reason, including if certificates are
submitted evidencing more tendered outstanding 8.125% notes or outstanding
8.750% notes than those that are outstanding, certificates evidencing
outstanding 8.125% notes or outstanding 8.750% notes that are not accepted for
exchange will be returned, without expense, to the tendering holder, or, in the
case of outstanding 8.125% notes or outstanding 8.750% notes tendered by
book-entry transfer into the exchange agent's account at a book-entry transfer
facility under the procedure set forth under "-- Procedures for Tendering
Outstanding Securities -- Book-Entry Transfer," such outstanding 8.125% notes
and outstanding 8.750% notes will be credited to the account maintained at such
book-entry transfer facility from which such outstanding 8.125% notes or
outstanding 8.750% notes were delivered, unless otherwise required by such
holder under "Special Delivery Instructions" in the letter of transmittal,
promptly following the expiration date or the termination or withdrawal of the
exchange offer.


     Tendering holders of outstanding 8.125% notes and outstanding 8.750% notes
exchanged in the exchange offer will not be obligated to pay brokerage
commissions or transfer taxes with respect to the exchange of their outstanding
8.125% notes or outstanding 8.750% notes other than as described in "-- Transfer
Taxes" or in Instruction 9 to the letter of transmittal. We will pay all other
charges and expenses in connection with the exchange offer.

PROCEDURES FOR TENDERING OUTSTANDING SECURITIES

     Any beneficial owner whose outstanding 8.125% notes or outstanding 8.750%
notes are registered in the name of a broker, dealer, commercial bank, trust
company or other nominee or held through a book-entry transfer facility and who
wishes to tender outstanding 8.125% notes or outstanding 8.750% notes should
contact such registered holder promptly and instruct such registered holder to
tender outstanding 8.125% notes or outstanding 8.750% notes on such beneficial
owner's behalf.

     Tender of Outstanding Securities Held Through DTC.  The exchange agent and
DTC have confirmed that the exchange offer is eligible for the DTC automated
tender offer program. Accordingly, DTC participants may electronically transmit
their acceptance of the exchange offer by causing DTC to transfer outstanding
8.125% notes or outstanding 8.750% notes to the exchange agent in accordance
with DTC's automated tender offer program procedures for transfer. DTC will then
send an agent's message to the exchange agent.


     The term "agent's message" means a message transmitted by DTC, received by
the exchange agent and forming part of the book-entry confirmation, which states
that DTC has received an express acknowledgment from the participant in DTC
tendering outstanding 8.125% notes or outstanding 8.750% notes that are the
subject of that book-entry confirmation that the participant has received and
agrees to be bound by the terms of the letter of transmittal, and that we may
enforce such agreement against such participant. In the case of an agent's
message relating to guaranteed delivery, the term means a message transmitted by
DTC and received by the exchange agent, which states that DTC has received an
express acknowledgment from the participant in DTC tendering outstanding 8.125%
notes or outstanding 8.750% notes that they have received and agree to be bound
by the notice of guaranteed delivery.


     Tender of Outstanding Securities Held in Physical Form.  For a holder to
validly tender outstanding 8.125% notes or outstanding 8.750% notes held in
physical form:

     - the exchange agent must receive at its address set forth in this
       prospectus a properly completed and validly executed letter of
       transmittal, or a manually signed facsimile thereof, together with any
       signature guarantees and any other documents required by the instructions
       to the letter of transmittal; and


     - the exchange agent must receive certificates for tendered outstanding
       8.125% notes or outstanding 8.750% notes at such address.


     LETTERS OF TRANSMITTAL AND OUTSTANDING 8.125% NOTES AND OUTSTANDING 8.750%
NOTES SHOULD BE SENT ONLY TO THE EXCHANGE AGENT AND NOT TO US OR TO ANY
BOOK-ENTRY TRANSFER FACILITY.

                                        28
<PAGE>

     THE METHOD OF DELIVERY OF OUTSTANDING 8.125% NOTES, OUTSTANDING 8.750%
NOTES, LETTERS OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE
AGENT IS AT THE ELECTION AND RISK OF THE HOLDER TENDERING OUTSTANDING 8.125%
NOTES AND OUTSTANDING 8.750% NOTES. DELIVERY OF SUCH DOCUMENTS WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF SUCH DELIVERY IS BY
MAIL, WE SUGGEST THAT THE HOLDER USE PROPERLY INSURED, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, AND THAT THE MAILING BE MADE SUFFICIENTLY IN ADVANCE
OF THE EXPIRATION DATE OF THE EXCHANGE OFFER TO PERMIT DELIVERY TO THE EXCHANGE
AGENT PRIOR TO SUCH DATE. NO ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS OF
OUTSTANDING 8.125% NOTES OR OUTSTANDING 8.750% NOTES WILL BE ACCEPTED.

     Signature Guarantees.  Signatures on the letter of transmittal must be
guaranteed by an eligible institution unless:

     - the letter of transmittal is signed by the registered holder of the
       outstanding 8.125% notes or outstanding 8.750% notes tendered therewith,
       or by a participant in one of the book-entry transfer facilities whose
       name appears on a security position listing it as the owner of those
       outstanding 8.125% notes or outstanding 8.750% notes, or if any
       outstanding 8.125% notes or outstanding 8.750% notes for principal
       amounts not tendered are to be issued directly to the holder, or, if
       tendered by a participant in one of the book-entry transfer facilities,
       any outstanding 8.125% notes or outstanding 8.750% notes for principal
       amounts not tendered or not accepted for exchange are to be credited to
       the participant's account at the book-entry transfer facility, and
       neither the "Special Issuance Instructions" nor the "Special Delivery
       Instructions" box on the letter of transmittal has been completed, or

     - the outstanding 8.125% notes or outstanding 8.750% notes are tendered for
       the account of an eligible institution.

     An eligible institution is a firm that is a participant in the Security
Transfer Agents Medallion Program or the Stock Exchanges Medallion Program,
which is generally a member of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office in the United States.


     Book-Entry Transfer.  The exchange agent will seek to establish a new
account or utilize an outstanding account with respect to the outstanding 8.125%
notes and outstanding 8.750% notes at DTC promptly after the date of this
prospectus. Any financial institution that is a participant in the book-entry
transfer facility system and whose name appears on a security position listing
it as the owner of the outstanding 8.125% notes or outstanding 8.750% notes may
make book-entry delivery of outstanding 8.125% notes or outstanding 8.750% notes
by causing the book-entry transfer facility to transfer such outstanding 8.125%
notes or outstanding 8.750% notes into the exchange agent's account. HOWEVER,
ALTHOUGH DELIVERY OF OUTSTANDING 8.125% NOTES AND OUTSTANDING 8.750% NOTES MAY
BE EFFECTED THROUGH BOOK-ENTRY TRANSFER INTO THE EXCHANGE AGENT'S ACCOUNT AT A
BOOK-ENTRY TRANSFER FACILITY, A PROPERLY COMPLETED AND VALIDLY EXECUTED LETTER
OF TRANSMITTAL, OR A MANUALLY SIGNED FACSIMILE THEREOF, OR AN AGENT'S MESSAGE IN
LIEU THEREOF, MUST BE RECEIVED BY THE EXCHANGE AGENT AT ITS ADDRESS SET FORTH IN
THIS PROSPECTUS ON OR PRIOR TO THE EXPIRATION DATE OF THE EXCHANGE OFFER, OR
ELSE THE GUARANTEED DELIVERY PROCEDURES DESCRIBED BELOW MUST BE COMPLIED WITH.
The confirmation of a book-entry transfer of outstanding 8.125% notes or
outstanding 8.750% notes into the exchange agent's account at a book-entry
transfer facility is referred to in this prospectus as a "book-entry
confirmation." DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH THAT BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.


     Guaranteed Delivery.  If you wish to tender your outstanding 8.125% notes
or outstanding 8.750% notes and:

     - certificates representing your outstanding 8.125% notes or outstanding
       8.750% notes are not lost but are not immediately available;

                                        29
<PAGE>

     - time will not permit your letter of transmittal, certificates
       representing your outstanding 8.125% notes or outstanding 8.750% notes
       and all other required documents to reach the exchange agent on or prior
       to the expiration date of the exchange offer; or

     - the procedures for book-entry transfer cannot be completed on or prior to
       the expiration date of the exchange offer,

then, you may tender if both of the following are complied with:

     - your tender is made by or through an eligible institution; and


     - on or prior to the expiration date of the exchange offer, the exchange
       agent has received from the eligible institution a properly completed and
       validly executed notice of guaranteed delivery, by manually signed
       facsimile transmission, mail or hand delivery, in substantially the form
       provided with this prospectus or an agent's message relating thereto.


     The notice of guaranteed delivery must:

     - set forth your name and address, the registered number(s) of your
       outstanding 8.125% notes or outstanding 8.750% notes and the principal
       amount of outstanding 8.125% notes or outstanding 8.750% notes tendered;


     - state that the tender is being made thereby; and



     - guarantee that, within three New York Stock Exchange trading days after
       the expiration date of the exchange offer, the letter of transmittal or
       facsimile thereof properly completed and validly executed, together with
       certificates representing the outstanding 8.125% notes or outstanding
       8.750% notes, or a book-entry confirmation, and any other documents
       required by the letter of transmittal and the instructions thereto, will
       be deposited by the eligible institution with the exchange agent.



     The exchange agent must receive the properly completed and validly executed
letter of transmittal or facsimile thereof with any required signature
guarantees, together with certificates for all outstanding 8.125% notes or
outstanding 8.750% notes in proper form for transfer, or a book-entry
confirmation, and any other required documents, within three New York Stock
Exchange trading days after the date of the notice of guaranteed delivery.


     Other Matters.  New 8.125% notes and new 8.750% notes will be issued in
exchange for outstanding 8.125% notes and outstanding 8.750% notes accepted for
exchange only after timely receipt by the exchange agent of:

     - certificates for (or a timely book-entry confirmation with respect to)
       your outstanding 8.125% notes or outstanding 8.750% notes, a properly
       completed and duly executed letter of transmittal or facsimile thereof
       with any required signature guarantees, or, in the case of a book-entry
       transfer, an agent's message; and

     - any other documents required by the letter of transmittal.

     All questions as to the form of all documents and the validity, including
time of receipt, and acceptance of all tenders of outstanding 8.125% notes or
outstanding 8.750% notes will be determined by us, in our sole discretion, the
determination of which shall be final and binding. ALTERNATIVE, CONDITIONAL OR
CONTINGENT TENDERS OF OUTSTANDING 8.125% NOTES OR OUTSTANDING 8.750% NOTES WILL
NOT BE CONSIDERED VALID. We reserve the absolute right to reject any or all
tenders of outstanding 8.125% notes and outstanding 8.750% notes that are not in
proper form or the acceptance of which, in our opinion, would be unlawful. We
also reserve the right to waive any defects, irregularities or conditions of
tender as to particular outstanding 8.125% notes or outstanding 8.750% notes.

     Our interpretation of the terms and conditions of the exchange offer,
including the instructions in the letter of transmittal, will be final and
binding.

                                        30
<PAGE>

     Any defect or irregularity in connection with tenders of outstanding 8.125%
notes or outstanding 8.750% notes must be cured within the time we determine,
unless waived by us. Tenders of outstanding 8.125% notes and outstanding 8.750%
notes will not be deemed to have been made until all defects and irregularities
have been waived by us or cured. Neither we, the exchange agent nor any other
person will be under any duty to give notice of any defects or irregularities in
tenders of outstanding 8.125% notes or outstanding 8.750% notes, or will incur
any liability to holders for failure to give any such notice.

     By signing or agreeing to be bound by the letter of transmittal, you will
represent to us that, among other things:

     - any new 8.125% notes or new 8.750% notes that you receive will be
       acquired in the ordinary course of your business;

     - you have no arrangement or understanding with any person or entity to
       participate in the distribution of the new 8.125% notes or new 8.750%
       notes;

     - if you are not a broker-dealer, you are not engaged in and do not intend
       to engage in the distribution of the new 8.125% notes or new 8.750%
       notes;

     - if you are a broker-dealer that will receive new 8.125% notes or new
       8.750% notes for your own account in exchange for outstanding 8.125%
       notes or outstanding 8.750% notes that were acquired as a result of
       market-making activities, you will deliver a prospectus, as required by
       law, in connection with any resale of those new 8.125% notes or new
       8.750% notes; and

     - you are not our "affiliate," as defined in Rule 405 of the Securities
       Act, or, if you are an affiliate, you will comply with any applicable
       registration and prospectus delivery requirements of the Securities Act.

WITHDRAWAL OF TENDERS

     Except as otherwise provided in this prospectus, you may withdraw your
tender of outstanding 8.125% notes or outstanding 8.750% notes at any time prior
to 5:00 p.m., New York City time, on the expiration date.

     For a withdrawal to be effective:

     - the exchange agent must receive a written notice of withdrawal at its
       address set forth below under "-- Exchange Agent," or

     - you must comply with the appropriate procedures of DTC's automated tender
       offer program system.

     Any notice of withdrawal must:

     - specify the name of the person who tendered the outstanding 8.125% notes
       or outstanding 8.750% notes to be withdrawn; and

     - identify the outstanding 8.125% notes or outstanding 8.750% notes to be
       withdrawn, including the principal amount of the outstanding 8.125% notes
       or outstanding 8.750% notes.

     If outstanding 8.125% notes or outstanding 8.750% notes have been tendered
pursuant to the procedure for book-entry transfer described above, any notice of
withdrawal must specify the name and number of the account at DTC to be credited
with the withdrawn outstanding 8.125% notes or outstanding 8.750% notes and
otherwise comply with the procedures of DTC.

     We will determine all questions as to the validity, form, eligibility and
time of receipt of notice of withdrawal, and our determination shall be final
and binding on all parties. We will deem any outstanding 8.125% notes or
outstanding 8.750% notes so withdrawn not to have been validly tendered for
exchange for purposes of the exchange offer.

     Any outstanding 8.125% notes or outstanding 8.750% notes that have been
tendered for exchange but that are not exchanged for any reason will be returned
to their holder without cost to the holder or, in the
                                        31
<PAGE>

case of outstanding 8.125% notes or outstanding 8.750% notes tendered by
book-entry transfer into the exchange agent's account at DTC according to the
procedures described above, such outstanding 8.125% notes or outstanding 8.750%
notes will be credited to an account maintained with DTC for the outstanding
8.125% notes or outstanding 8.750% notes. This return or crediting will take
place as soon as practicable after withdrawal, rejection of tender or
termination of the exchange offer. You may retender properly withdrawn
outstanding 8.125% notes or outstanding 8.750% notes by following one of the
procedures described under "-- Procedures for Tendering Outstanding Securities"
at any time on or prior to the expiration date.

CONDITIONS TO THE EXCHANGE OFFER

     We will not be required to accept for exchange, or exchange any new 8.125%
notes for, any outstanding 8.125% notes tendered, nor will we be required to
accept for exchange, or exchange any new 8.750% notes for, any outstanding
8.750% notes tendered, and we may terminate, extend or amend the exchange offer
and may, subject to Rule 14e-1 under the Exchange Act, which requires that an
offeror pay the consideration offered or return the securities deposited by or
on behalf of the holders thereof promptly after the termination or withdrawal of
a tender offer, postpone the acceptance for exchange of outstanding 8.125% notes
and outstanding 8.750% notes so tendered if, on or prior to the expiration date
of the exchange offer, the following shall have occurred:

     - we have determined that the offering and sales under the registration
       statement, the filing of such registration statement or the maintenance
       of its effectiveness would require disclosure of or would interfere in
       any material respect with any material financing, merger, offering or
       other transaction involving us or would otherwise require disclosure of
       nonpublic information that could materially and adversely affect us;

     - we have determined that the exchange offer would violate any applicable
       law or interpretation of the staff of the SEC; or

     - any legal action has been instituted or threatened that would impair our
       ability to proceed with the exchange offer.


     The conditions to the exchange offer are for our sole benefit and may be
asserted by us in our sole discretion or may be waived by us, in whole or in
part, in our sole discretion, whether or not any other condition of the exchange
offer also is waived. We have not made a decision as to what circumstances would
lead us to waive any condition, and any waiver would depend on circumstances
prevailing at the time of that waiver. Any determination by us concerning the
events described in this section shall be final and binding upon all persons.


     ALTHOUGH WE HAVE NO PRESENT PLANS OR ARRANGEMENTS TO DO SO, WE RESERVE THE
RIGHT TO AMEND, AT ANY TIME, THE TERMS OF THE EXCHANGE OFFER. WE WILL GIVE
HOLDERS NOTICE OF ANY AMENDMENTS IF REQUIRED BY APPLICABLE LAW.

CONSEQUENCES OF FAILURE TO EXCHANGE

     If you do not exchange your outstanding 8.125% notes for new 8.125% notes
or exchange your outstanding 8.750% notes for new 8.750% notes in the exchange
offer, your outstanding 8.125% notes and outstanding 8.750% notes will remain
outstanding and will continue to be subject to the currently applicable
restrictions on transfer:

     - as set forth in the legend printed on the outstanding 8.125% notes and
       the outstanding 8.750% notes as a consequence of the issuance of the
       outstanding 8.125% notes or outstanding 8.750% notes pursuant to the
       exemptions from, or in transactions not subject to, the registration
       requirements of the Securities Act and applicable state securities laws;
       and

     - otherwise set forth in the offering memorandum distributed in connection
       with the private offerings of the outstanding 8.125% notes and
       outstanding 8.750% notes.

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<PAGE>

     In general, you may not offer or sell the outstanding 8.125% notes or
outstanding 8.750% notes unless they are registered under the Securities Act, or
unless the offer or sale is exempt from registration under the Securities Act
and applicable state securities laws. Except as required by the registration
rights agreement, we do not intend to register resales of the outstanding 8.125%
notes or outstanding 8.750% notes under the Securities Act. Based on
interpretations of the SEC staff, you may offer for resale, resell or otherwise
transfer new 8.125% notes and new 8.750% notes issued in the exchange offer
without compliance with the registration and prospectus delivery provisions of
the Securities Act, provided that (1) you are not our "affiliate" within the
meaning of Rule 405 under the Securities Act, (2) you acquired the new 8.125%
notes or new 8.750% notes in the ordinary course of your business and (3) you
have no arrangement or understanding with respect to the distribution of the new
8.125% notes or new 8.750% notes to be acquired in the exchange offer. If you
tender outstanding 8.125% notes or outstanding 8.750% notes in the exchange
offer for the purpose of participating in a distribution of the new 8.125% notes
or new 8.750% notes:

     - you cannot rely on the applicable interpretations of the SEC; and

     - you must comply with the registration and prospectus delivery
       requirements of the Securities Act in connection with a secondary resale
       transaction and that secondary resale transaction must be covered by an
       effective registration statement containing the selling security holder
       information required by Item 507 or 508, as applicable, of Regulation
       S-K.

     The trading market for outstanding 8.125% notes and outstanding 8.750%
notes not exchanged in the exchange offer may be significantly more limited than
it is at present. Therefore, if your outstanding 8.125% notes and outstanding
8.750% notes are not tendered and accepted in the exchange offer, it may become
more difficult for you to sell or transfer your unexchanged securities. See
"Risk Factors -- Risks Arising from the Exchange Offer."

EXCHANGE AGENT


     JPMorgan Chase Bank has been appointed as exchange agent for the exchange
offer. You should direct questions and requests for assistance, requests for
additional copies of this prospectus, the letter of transmittal or any other
documents to the exchange agent. You should send certificates for outstanding
8.125% notes, outstanding 8.750% notes, letters of transmittal and any other
required documents to the exchange agent addressed as follows:



                              JPMorgan Chase Bank


                            Corporate Trust Services


                               2001 Bryan Street


                                   9th floor


                              Dallas, Texas 75201


                             Attention: Frank Ivins


TRANSFER TAXES

     We will pay all transfer taxes applicable to the transfer and exchange of
outstanding 8.125% notes and outstanding 8.750% notes pursuant to the exchange
offer. If, however:

     - delivery of the new 8.125% notes or new 8.750% notes and/or certificates
       for outstanding 8.125% notes or outstanding 8.750% notes for principal
       amounts not exchanged, are to be made to any person other than the record
       holder of the outstanding 8.125% notes or outstanding 8.750% notes
       tendered;

     - tendered certificates for outstanding 8.125% notes or outstanding 8.750%
       notes are recorded in the name of any person other than the person
       signing any letter of transmittal; or

     - a transfer tax is imposed for any reason other than the transfer and
       exchange of outstanding 8.125% notes or outstanding 8.750% notes to us or
       our order,
                                        33
<PAGE>

then the amount of any such transfer taxes, whether imposed on the record holder
or any other person, will be payable by the tendering holder prior to the
issuance of the new 8.125% notes or new 8.750% notes.

                       DESCRIPTION OF THE NEW SECURITIES


     We will issue the new 8.125% notes and the new 8.750% notes under an
indenture dated as of November 10, 1997, as amended by a seventh supplemental
indenture between us and JPMorgan Chase Bank (formerly Bank One Trust Company,
N.A.), as trustee. The outstanding 8.125% notes and the outstanding 8.750% notes
were also issued under this indenture and supplemental indenture. The terms of
the outstanding 8.125% notes and the outstanding 8.750% notes are identical in
all material respects to the terms of the new 8.125% notes and the new 8.750%
notes, respectively, except that the outstanding 8.125% notes and the
outstanding 8.750% notes contain terms with respect to transfer restrictions
(and therefore are not freely tradeable).



     The terms of the new 8.125% notes and the new 8.750% notes include those
set forth in the indenture and those made a part of the indenture by reference
to the Trust Indenture Act of 1939. The following description is a summary of
the material provisions of the new 8.125% notes, the new 8.750% notes and the
indenture. It does not restate the indenture in its entirety. We urge you to
read the indenture and the seventh supplemental indenture because those
documents, and not this description, define your rights as holders of the new
8.125% notes and the new 8.750% notes. Copies of the indenture and the seventh
supplemental indenture are available at the offices of the trustee and have been
filed or incorporated by reference as exhibits to the registration statement of
which this prospectus is a part.


TERMS AND CONDITIONS

     The new 8.125% notes will mature on March 15, 2012.


     The new 8.750% notes will mature on March 15, 2032.



     Interest will be payable semi-annually on March 15 and September 15 of each
year, beginning September 15, 2003, to the person in whose names the new 8.125%
notes or the new 8.750% notes are registered at the close of business on the
preceding March 1 and September 1, respectively, subject to certain exceptions.
Holders of new 8.125% notes and new 8.750% notes will receive interest from
March 15, 2003, the date of the last payment of interest on the outstanding
8.125% notes and the outstanding 8.750% notes. Interest on the new 8.125% notes
and the new 8.750% notes will be computed on the basis of a 360-day year
consisting of twelve 30-day months.


     The new 8.125% notes and the new 8.750% notes will be our unsecured and
unsubordinated obligations ranking equally with our other outstanding unsecured
and unsubordinated indebtedness.

     The new 8.125% notes and the new 8.750% notes will be redeemable, in whole
or in part, at any time, at our option, at a redemption price equal to the
greater of:

     - 100% of the principal amount of the new 8.125% notes or the new 8.750%
       notes then outstanding to be redeemed, or

     - the sum of the present values of the remaining scheduled payments of
       principal and interest thereon discounted to the redemption date on a
       semiannual basis (assuming a 360-day year consisting of twelve 30-day
       months) at the Treasury Rate, as defined below, plus 37.5 basis points,
       plus accrued interest thereon to the date of redemption.

     We will mail notice of redemption at least 30 days but not more than 60
days before the applicable redemption date to each holder of the new 8.125%
notes or new 8.750% notes to be redeemed.

     Upon the payment of the redemption price, plus accrued and unpaid interest,
if any, to the date of redemption, interest will cease to accrue on and after
the applicable redemption date on the new 8.125% notes and the new 8.750% notes
or portions thereof called for redemption.

                                        34
<PAGE>

     There is no provision for a sinking fund applicable to the notes.

     We may, from time to time, without the consent of the existing holders of
the relevant series of notes, issue additional notes under the indenture having
the same ranking and the same interest rate, maturity and other terms as the
notes of such series in all respects except the issue date, the issue price and
the initial interest payment date. Any additional notes will, together with the
applicable notes, constitute a single series of notes under the indenture.

COVENANTS


     Liens.  The indenture refers to any of our instruments securing
indebtedness, such as a mortgage, pledge, lien, security interest or encumbrance
on any of our property, as a "mortgage." The indenture further provides that,
subject to certain exceptions, we will not, nor will we permit any subsidiary
to, issue, assume or guarantee any indebtedness secured by a mortgage unless we
provide equal and proportionate security for the senior debt securities,
including the new 8.125% notes and the new 8.750% notes, we issue under the
indenture. Among these exceptions are:


     - certain purchase money mortgages;

     - certain preexisting mortgages on any property acquired or constructed by
       us or a subsidiary;

     - certain mortgages created within one year after completion of such
       acquisition or construction;

     - certain mortgages created on any contract for the sale of products or
       services related to the operation or use of any property acquired or
       constructed within one year after completion of such acquisition or
       construction;

     - mortgages on property of a subsidiary existing at the time it became our
       subsidiary; and

     - mortgages, other than as specifically excepted, in an aggregate amount
       which, at the time of, and after giving effect to, the incurrence does
       not exceed five percent of Consolidated Net Tangible Assets, as defined
       below.

     Consolidation, Merger, Conveyance of Assets.  The indenture provides, in
general, that we will not consolidate with or merge into any other entity or
convey, transfer or lease our properties and assets substantially as an entirety
to any person, unless:

     - the corporation, limited liability company, limited partnership, joint
       stock company or trust formed by such consolidation or into which we are
       merged or the person which acquires such assets expressly assumes our
       obligations under the indenture and the debt securities issued under the
       indenture; and

     - immediately after giving effect to such transaction, no event of default,
       and no event which, after notice or lapse of time or both, would become
       an event of default, shall have happened and be continuing.

MODIFICATION OF THE INDENTURE

     The indenture provides that we and the trustee may enter into supplemental
indentures which conform to the provisions of the Trust Indenture Act of 1939
without the consent of the holders to, in general:

     - secure any debt securities;

     - evidence the assumption by a successor person of our obligations;

     - add further covenants for the protection of the holders;

     - cure any ambiguity or correct any inconsistency in the indenture, so long
       as such action will not adversely affect the interests of the holders;

                                        35
<PAGE>

     - establish the form or terms of debt securities of any series; and

     - evidence the acceptance of appointment by a successor trustee.

     The indenture also permits us and the trustee to:

     - add any provisions to the indenture;

     - change in any manner the indenture;

     - eliminate any of the provisions of the indenture; and

     - modify in any way the rights of the holders of debt securities of each
       series affected.

     The above actions require the consent of the holders of at least a majority
in principal amount of debt securities of each series issued under the indenture
then outstanding and affected. These holders will vote as one class to approve
such changes. The 8.125% notes and the 8.750% notes will constitute two
different series under the indenture.

     Such changes must, however, conform to the Trust Indenture Act of 1939 and
we and the trustee may not, without the consent of each holder of outstanding
debt securities affected thereby:

     - extend the final maturity of the principal of any debt securities;

     - reduce the principal amount of any debt securities;

     - reduce the rate or extend the time of payment of interest on any debt
       securities;

     - reduce any amount payable on redemption of any debt securities;

     - change the currency in which the principal, including any amount in
       respect of original issue discount, or interest on any debt securities is
       payable;

     - reduce the amount of any original issue discount security payable upon
       acceleration or provable in bankruptcy;

     - alter certain provisions of the indenture relating to debt securities not
       denominated in U.S. dollars or for which conversion to another currency
       is required to satisfy the judgment of any court;

     - impair the right to institute suit for the enforcement of any payment on
       any debt securities when due; or

     - reduce the percentage in principal amount of debt securities of any
       series issued under the indenture, the consent of the holders of which is
       required for any such modification.

EVENTS OF DEFAULT

     In general, the indenture defines an event of default with respect to debt
securities of any series issued under the indenture as being:

          (a) default in payment of any principal of the debt securities of such
     series, either at maturity, upon any redemption, by declaration or
     otherwise;

          (b) default for 30 days in payment of any interest on any debt
     securities of such series unless otherwise provided;

          (c) default for 90 days after written notice in the observance or
     performance of any covenant or warranty in the debt securities of such
     series or the indenture other than

        - default in or breach of a covenant which is dealt with otherwise
          below, or

        - if certain conditions are met, if the events of default described in
          this clause (c) are the result of changes in generally accepted
          accounting principles; or

          (d) certain events of bankruptcy, insolvency or reorganization of us.
                                        36
<PAGE>

     In general, the indenture provides that if an event of default described in
clauses (a), (b) or (c) above occurs and does not affect all series of debt
securities then outstanding, the trustee or the holders of debt securities may
then declare the following amounts to be due and payable immediately:

     - the entire principal of all debt securities of each series affected by
       the event of default; and

     - the interest accrued on such principal.

     Such a declaration by the holders requires the approval of at least 25
percent in principal amount of the debt securities of each series issued under
the indenture and then outstanding, treated as one class, which are affected by
the event of default.

     The indenture also generally provides that if a default described in clause
(c) above which is applicable to all series of debt securities then outstanding
or certain events of bankruptcy, insolvency and reorganization of us occur and
are continuing, the trustee or the holders of debt securities may declare the
entire principal of all such debt securities and interest accrued thereon to be
due and payable immediately. This declaration by the holders requires the
approval of at least 25 percent in principal amount of all debt securities
issued under the indenture and then outstanding, treated as one class. Upon
certain conditions, the holders of a majority in aggregate principal amount of
the debt securities of all such affected series then outstanding may annul such
declarations and waive the past defaults. However, the majority holders may not
annul or waive a continuing default in payment of principal of, premium, if any,
or interest on such debt securities.

     The indenture provides that the holders of debt securities issued under the
indenture, treated as one class, will indemnify the trustee before the trustee
exercises any of its rights or powers under the indenture. This indemnification
is subject to the trustee's duty to act with the required standard of care
during a default. The holders of a majority in aggregate principal amount of the
outstanding debt securities of each series affected, treated as one class,
issued under the indenture may direct the time, method and place of:

     - conducting any proceeding for any remedy available to the trustee, or

     - exercising any trust or power conferred on the trustee.

     This right of the holders of debt securities is, however, subject to the
provisions in the indenture providing for the indemnification of the trustee and
other specified limitations.

     In general, the indenture provides that holders of debt securities issued
under the indenture may only institute an action against us under the indenture
if the following four conditions are fulfilled:

     - the holder previously has given to the trustee written notice of default
       and the default continues;

     - the holders of at least 25 percent in principal amount of the debt
       securities of each affected series (treated as one class) issued under
       the indenture and then outstanding have both (1) requested the trustee to
       institute such action and (2) offered the trustee reasonable indemnity;

     - the trustee has not instituted such action within 60 days of receipt of
       such request; and

     - the trustee has not received direction inconsistent with such written
       request by the holders of a majority in principal amount of the debt
       securities of each affected series (treated as one class) issued under
       the indenture and then outstanding.

     The above four conditions do not apply to actions by holders of the debt
securities under the indenture against us for payment of principal or interest
on or after the due date provided. The indenture contains a covenant that we
will file annually with the trustee a certificate of no default or a certificate
specifying any default that exists.

                                        37
<PAGE>

DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE

     We can discharge or defease our obligations under the indenture as set
forth below.

     Under terms satisfactory to the trustee, we may discharge certain
obligations to holders of any series of debt securities issued under the
indenture which have not already been delivered to the trustee for cancellation.
Such debt securities must also:

     - have become due and payable;

     - be due and payable by their terms within one year; or

     - be scheduled for redemption by their terms within one year.

     We may discharge any series of debt securities by irrevocably depositing an
amount certified to be sufficient to pay at maturity or upon redemption the
principal of and interest on such debt securities. We may make such deposit in
cash or, in the case of debt securities payable only in U.S. dollars, U.S.
government obligations, as defined in the indenture.

     We may also, upon satisfaction of the conditions listed below, discharge
certain obligations to holders of any series of debt securities issued under the
indenture at any time ("Defeasance"). Under terms satisfactory to the trustee,
we may be released with respect to any outstanding series of debt securities
issued under the indenture from the obligations imposed by sections 3.6 and 9.1
of the indenture. These sections contain the covenants described above limiting
liens and consolidations, mergers and conveyances of assets. Also, under terms
satisfactory to the trustee, we may avoid compliance with these sections without
creating an event of default ("Covenant Defeasance"). Defeasance or Covenant
Defeasance may be effected only if, among other things:

     - we irrevocably deposit with the trustee cash or, in the case of debt
       securities payable only in U.S. dollars, U.S. government obligations as
       trust funds in an amount certified to be sufficient to pay at maturity or
       upon redemption the principal of and interest on all outstanding debt
       securities of such series issued under the indenture; and

     - we deliver to the trustee an opinion of counsel to the effect that the
       holders of this series of debt securities will not recognize income, gain
       or loss for United States federal income tax purposes as a result of such
       Defeasance or Covenant Defeasance. Such opinion must further state that
       these holders will be subject to United States federal income tax on the
       same amounts, in the same manner and at the same times as would have been
       the case if Defeasance or Covenant Defeasance had not occurred. In the
       case of a Defeasance, this opinion must be based on a ruling of the
       Internal Revenue Service or a change in United States federal income tax
       law occurring after the date of the indenture, since this result would
       not occur under current tax law.

CONCERNING THE TRUSTEE

     The trustee is one of a number of banks with which we and our subsidiaries
maintain ordinary banking relationships and with which we and our subsidiaries
maintain credit facilities.

GOVERNING LAW

     The indenture, the new 8.125% notes and the new 8.750% notes are governed
by, and construed in accordance with, the laws of the State of New York.

DEFINED TERMS

     Set forth below are some of the definitions of the defined terms used in
this prospectus in describing the new 8.125% notes and the new 8.750% notes.

     "Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the notes to be redeemed

                                        38
<PAGE>

that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of such notes.

     "Comparable Treasury Price" means, with respect to any redemption date, (1)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (2) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if we obtain fewer than four such Reference Treasury Dealer Quotations, the
average of all such Reference Treasury Dealer Quotations.

     "Consolidated Funded Indebtedness" means the aggregate of all outstanding
Funded Indebtedness of Williams and its consolidated subsidiaries, determined on
a consolidated basis in accordance with generally accepted accounting
principles.

     "Consolidated Net Tangible Assets" means the total assets appearing on a
consolidated balance sheet of Williams and its consolidated subsidiaries less,
in general:

     - intangible assets;

     - current and accrued liabilities (other than Consolidated Funded
       Indebtedness and capitalized rentals or leases), deferred credits,
       deferred gains and deferred income;

     - reserves;

     - advances to finance oil or natural gas exploration and development to the
       extent that the indebtedness related thereto is excluded from Funded
       Indebtedness;

     - an amount equal to the amount excluded from Funded Indebtedness
       representing the "production payment" financing of oil and gas
       exploration and development; and

     - minority stockholder interests.

     "Funded Indebtedness" means any indebtedness which matures more than one
year after the date the amount of Funded Indebtedness is being determined, less
any such indebtedness as will be retired by any deposit or payment required to
be made within one year from such date under any prepayment provision, sinking
fund, purchase fund or otherwise. Funded Indebtedness does not, however, include
indebtedness of Williams or any of its subsidiaries incurred to finance
outstanding advances to others to finance oil or natural gas exploration and
development, to the extent that the latter are not in default in their
obligations to Williams or such subsidiary. Funded Indebtedness also does not
include indebtedness of Williams or any of its subsidiaries incurred to finance
oil or natural gas exploration and development through what is commonly referred
to as a "production payment" to the extent that Williams or any of its
subsidiaries have not guaranteed the repayment of the production payment.

     "Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by us.

     "Reference Treasury Dealers" means Lehman Brothers Inc. and J.P. Morgan
Securities Inc. and their respective successors and, at our option, additional
primary U.S. Government securities dealers ("Primary Treasury Dealers");
provided, however, that if any of the foregoing shall cease to be a Primary
Treasury Dealer, we shall substitute another nationally recognized investment
banking firm that is a Primary Treasury Dealer.

     "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
us, of the bid and asked prices for the Comparable Treasury Issue (expressed in
each case as a percentage of its principal amount) quoted in writing to us by
such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third
business day preceding such redemption date.

                                        39
<PAGE>

     "Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to a maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount equal to the Comparable Treasury Price for
such redemption date).

     Investors should note that the term "subsidiary," as used in this section
describing the notes, refers only to a corporation of which Williams, or another
subsidiary or subsidiaries of Williams, own at least a majority of the
outstanding securities which have voting power.

BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY

     The new 8.125% notes and new 8.750% notes will be evidenced by one or more
certificates in registered global form, which will be deposited with, or on
behalf of, The Depository Trust Company (DTC) in New York, New York and
registered in the name of Cede & Co., DTC's nominee. Except as set forth below,
a global note may be transferred, in whole or in part, only to another nominee
of DTC or to a successor to DTC or its nominee.

DEPOSITARY PROCEDURES

     DTC has advised us that it is a:

     - limited-purpose trust company organized under the laws of the State of
       New York;

     - banking organization within the meaning of the laws of the State of New
       York;

     - member of the Federal Reserve System;

     - clearing corporation within the meaning of the New York Uniform
       Commercial Code; and

     - clearing agency registered pursuant to the provisions of Section 17A of
       the Exchange Act.

     DTC was created to hold securities of its participants and to facilitate
the clearance and settlement of securities transactions among its participants
through electronic book-entry changes in their accounts, thereby eliminating the
need for physical movement of securities certificates. DTC's participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and other organizations. Banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant also have access to DTC's book-entry system.

     Holders of new 8.125% notes and new 8.750% notes may hold their beneficial
interests in the securities directly as a participant in DTC or indirectly
through organizations that are participants in DTC.


     Upon deposit of the global notes with DTC, DTC will credit, on its
book-entry registration and transfer system, the accounts of those participants
designated by the Exchange Agent with the principal amounts of the global notes
held by or through the participants. The records of DTC will show ownership and
effect the transfer of ownership of the global notes by its participants. The
records of the participants will show ownership and effect the transfer of
ownership of the global notes by persons holding beneficial interests in the
global notes through them. In the case of beneficial interests held by or though
participants in Euroclear Bank S.A./N.V., as operator of the Euroclear System
and Clearstream Banking S.A., DTC will credit the accounts of their respective
depositaries with the principal amounts of the global notes beneficially owned
by or through Euroclear and Clearstream, respectively. These records of DTC will
show ownership and effect the transfer of ownership of the global notes by the
respective depositaries for Euroclear and Clearstream. The records of these
depositaries will show ownership and effect the transfer of ownership of the
global notes by Euroclear and Clearstream, respectively. The records of
Euroclear and Clearstream will show ownership and effect the transfer of
ownership of the global notes by their participants. The records of the
participants will show ownership or transfer of ownership of the global notes by
persons holding through them.


                                        40
<PAGE>

     So long as DTC or its nominee is the registered owner of the global notes,
it will be considered the sole owner and holder of the securities for all
purposes under the indenture. Except as set forth below, if you own a beneficial
interest in global notes, you will not:

     - be entitled to have the securities registered in your name;

     - receive or be entitled to receive physical delivery of a certificate in
       definitive form representing the securities; or

     - be considered the owner or holder of the securities under the indenture
       for any purpose, including with respect to the giving of any directions,
       approvals or instructions to the trustee.

     Therefore, if you are required by state law to take physical delivery of
the securities in definitive form, you may not be able to own, transfer or
pledge beneficial interests in the global notes. In addition, the lack of a
physical certificate evidencing your beneficial interests in the global notes
may limit your ability to pledge the interests to a person or entity that is not
a participant in DTC.

     If you own beneficial interests in a global note, you will have to rely on
the procedures of DTC and, if you are not a participant in DTC, the procedures
of the participant through which you hold your beneficial interests, to exercise
your rights as a holder under the indenture. DTC has advised us that it will
take any action permitted to be taken by a holder of beneficial interests in the
global notes only at the direction of one or more of the participants to whose
accounts the interests are credited. We understand that, under existing industry
practice, when a beneficial owner of a global note wants to give any notice or
take any action that a registered holder is entitled to take, at our request or
under the indenture, DTC will authorize the participant to give the notice or
take the action, and the participant will authorize its beneficial owners to
give the notice or take the action. Accordingly, we and the trustee will treat
as a holder anyone designated as such in writing by DTC for purposes of
obtaining any consents or directions required under the indenture.

     We will pay the principal of, and interest on, the global notes through the
trustee or paying agent to DTC or its nominee, as the registered holder of the
global notes, in immediately available funds. We expect DTC or its nominee, upon
receipt of any payments, to immediately credit each participant's account with
payments in amounts proportionate to that participant's beneficial interest as
shown on the records of DTC or its nominee. We also expect each participant to
pay each owner of beneficial interests in the global notes held through that
participant in accordance with standing customer instructions and customary
practices. These payments will be the sole responsibility of the participants.

     We will not, and the trustee and paying agent will not, assume any
responsibility or liability for any aspect of the records relating to payments
made on account of or actions taken with respect to the beneficial ownership
interests in global notes, or for any other aspect of the relationship between
DTC and its participants, Euroclear or Clearstream and their participants, or
between the participants and the owners of beneficial interests. We, the trustee
and the paying agent may conclusively rely on instructions from DTC for all
purposes. We obtained the above information about DTC, Euroclear and Clearstream
and their book-entry systems from sources we believe are reliable, but we take
no responsibility for the accuracy of the information.

SETTLEMENT PROCEDURES

     Secondary market trading between DTC participants will occur in the
ordinary way in accordance with DTC's rules and procedures and will be settled
in immediately available funds using DTC's Same-Day Funds Settlement System.

     Secondary market trading between participants of Euroclear and/or
Clearstream will occur in the ordinary way in accordance with each of its rules
and procedures and will be settled using the procedures applicable to
conventional Eurobonds in immediately available funds. The respective
depositaries for Euroclear and Clearstream will effect transfers in global notes
between DTC participants, on the one hand, and Euroclear or Clearstream
participants, on the other hand, in accordance with DTC's procedures and

                                        41
<PAGE>

will settle them in same-day funds. These depositaries must deliver instructions
to Euroclear or Clearstream in accordance with Euroclear's or Clearstream's
procedures. If the transfer meets its settlement requirements, Euroclear or
Clearstream will instruct its respective depositary to effect final settlement
on its behalf by delivering or receiving interests in the global notes in its
accounts with DTC and making or receiving payment in accordance with normal
procedures of same-day funds settlement applicable to DTC. Participants in
Euroclear and Clearstream may not deliver instructions directly to the
depositaries for Euroclear and Clearstream.

     Because of time zone differences, the accounts of Euroclear and Clearstream
participants purchasing beneficial interests in the global notes from DTC
participants will be credited with the securities purchased, and the crediting
will be reported to the Euroclear and Clearstream participants, on the
securities settlement processing day immediately following the DTC settlement
processing day. Likewise, the accounts of Euroclear and Clearstream participants
selling beneficial interests in the global notes to DTC participants will be
credited with the cash received on the DTC settlement processing day, but the
cash will not be available until the settlement processing day immediately
following the DTC settlement processing day.

     Although DTC, Euroclear and Clearstream have agreed to the procedures to
facilitate transfers of interests in the global notes among participants in DTC,
Euroclear and Clearstream, they are under no obligation to perform or to
continue to perform these procedures. These procedures may be changed or
discontinued at any time. We take no responsibility for the performance by DTC,
Euroclear or Clearstream or their respective participants of their respective
obligations under the rules and procedures governing their operations.

EXCHANGE OF GLOBAL NOTES FOR CERTIFICATED NOTES

     We will exchange beneficial interests in global notes for certificated
notes only if:

     - DTC notifies us that it is unwilling or unable to continue as depositary
       for the global notes;

     - DTC ceases to be a clearing agency registered under the Exchange Act; or

     - we decide at any time not to have the securities represented by global
       notes and so notify the trustee.

     If there is an exchange, we will issue certificated notes in authorized
denominations and registered in the names which DTC directs.

            MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS


     In the opinion of White & Case LLP, special tax counsel to Williams, the
following is a summary of the material U.S. federal income tax consequences
associated with the exchange of outstanding securities for the new securities in
the exchange offer. The summary is based upon the Internal Revenue Code of 1986,
as amended (the "Code"), Treasury Regulations, judicial authorities, published
positions of the Internal Revenue Service (the "IRS") and other applicable
authorities, all as in effect on the date hereof and all of which are subject to
change or differing interpretations (possibly with retroactive effect). The
discussion does not address all of the tax consequences that may be relevant to
a particular holder or to certain holders subject to special treatment under
U.S. federal income tax laws. This discussion is limited to persons that hold
their outstanding securities and new securities as "capital assets" within the
meaning of section 1221 of the Code. Williams has not sought, and does not
intend to seek, a ruling from the IRS regarding the matters discussed herein. No
assurance can be given that the IRS would not assert, or that a court would not
sustain, a position contrary to any of the tax aspects set forth below.
PROSPECTIVE INVESTORS MUST CONSULT THEIR OWN TAX ADVISORS AS TO THE FEDERAL
INCOME TAX CONSEQUENCES OF ACQUIRING, HOLDING AND DISPOSING OF NEW SECURITIES,
AS WELL AS THE EFFECTS OF STATE, LOCAL AND NON-U.S. TAX LAWS.


                                        42
<PAGE>


     For purposes of this discussion, the term "U.S. holder" means any one of
the following:


     - a citizen or resident of the United States;


     - a corporation (or other entity treated as a corporation for U.S. federal
       income tax purposes) created or organized in the United States or under
       the laws of the United States or of any political subdivision thereof;


     - an estate, the income of which is includible in gross income for U.S.
       federal income tax purposes regardless of its source;


     - a trust, the administration of which is subject to the primary
       supervision of the U.S. courts and that has one or more U.S. persons who
       have the authority to control all substantial decisions of the trust, or
       that was in existence on August 20, 1996 and properly elected to continue
       to be treated as a U.S. person; or



     - any individual or entity described above that is otherwise subject to
       U.S. federal income tax on a net income basis with respect to the new
       securities.



     The term "non-U.S. holder" means a holder that is not a U.S. holder.



     The term "new securities" means the new 8.125% notes and the new 8.750%
notes.



     The term "outstanding securities" means the outstanding 8.125% notes and
the outstanding 8.750% notes.


EXCHANGE OF OUTSTANDING SECURITIES FOR NEW SECURITIES

     The exchange of the outstanding securities for the new securities issued in
the exchange offer will not be treated as an "exchange" for U.S. federal income
tax purposes because the new securities issued in the exchange offer will not be
considered to differ materially in kind or extent from the outstanding
securities. Rather, the new securities issued in the exchange offer received by
a holder will be treated as a continuation of the outstanding securities in the
hands of such holder. As a result, no gain or loss will be recognized by a
holder who exchanges outstanding securities for new securities in the exchange
offer and any exchanging holder of outstanding securities will have the same tax
basis and holding period in, and income in respect of, the new securities as
such holder had in the outstanding securities immediately prior to the exchange.

U.S. HOLDERS

     Payments of Interest.  Payments of interest on new securities generally
will be taxable to a U.S. holder as ordinary interest income at the time such
payments are accrued or received (in accordance with the U.S. holder's method of
accounting for U.S. federal income tax purposes).


     Disposition of New Securities.  Upon the sale or other disposition of a new
security, a U.S. holder will generally recognize capital gain or loss equal to
the difference between the amount realized on the sale or other disposition and
the holder's adjusted tax basis in the new security. For these purposes, the
amount realized on the sale or other disposition of a new security does not
include any amount received attributable to accrued but unpaid interest, which
will be taxable as ordinary income unless previously taken into account. Capital
gain or loss on the sale or other disposition of a new security will be
long-term capital gain or loss if the holder's cumulative holding period with
respect to the new security and the outstanding securities exchanged therefor is
more than one year at the time of the sale or other disposition.


                                        43
<PAGE>

NON-U.S. HOLDERS

     Payments of Interest.  Subject to the discussion below concerning
information reporting and backup withholding, payments of interest on a new
security to any non-U.S. holder will generally not be subject to U.S. federal
income tax or withholding tax, provided that all of the following are true:

     - the interest on the new security is not effectively connected with the
       non-U.S. holder's conduct of a trade or business within the United
       States;


     - the non-U.S. holder does not actually or constructively own 10% or more
       of the total combined voting power of all classes of Williams stock;



     - the non-U.S. holder is not a "controlled foreign corporation" with
       respect to which Williams is a "related person" for U.S. federal income
       tax purposes; and



     - the non-U.S. holder either (A) certifies, on IRS Form W-8BEN (or a
       permissible substitute or successor form) under penalties of perjury,
       that it is a non-U.S. holder and provides its name and address, or (B) is
       a securities clearing organization, bank or other financial institution
       that holds customers' securities in the ordinary course of its trade or
       business (a "financial institution") and holds the new securities,
       certifies under penalties of perjury that it has received an IRS Form
       W-8BEN (or a permissible substitute or successor form) from the
       beneficial owner of the new securities or that another financial
       institution has received such Form from the beneficial owner, and
       furnishes the payor with a copy thereof.



     Interest paid to a non-U.S. holder that does not qualify for exemption from
withholding tax generally will be subject to withholding of U.S. federal income
tax unless the non-U.S. holder of the new securities provides to Williams a
properly executed:


          (i) IRS Form W-8BEN (or a permissible substitute or successor form)
     claiming an exemption from (or reduction in) withholding under the benefit
     of an applicable income tax treaty; or

          (ii) IRS Form W-8ECI (or a permissible substitute or successor form)
     stating that the interest paid on new securities is not subject to
     withholding tax because it is effectively connected with the non-U.S.
     holder's conduct of a trade or business in the United States.


     Non-U.S. holders should consult any applicable income tax treaties, which
may provide for exemption from (or reduction in) U.S. withholding for other
rules different from those described above.


     Disposition of New Securities.  Subject to the discussion below concerning
information reporting and backup withholding, any gain realized by a non-U.S.
holder on the sale or other disposition of new securities generally will not be
subject to U.S. federal income tax, unless (i) such gain is effectively
connected with the conduct by such non-U.S. holder of a trade or business within
the U.S. or (ii) the non-U.S. holder is an individual who is present in the
United States for 183 days or more in the taxable year of the disposition and
certain other conditions are satisfied.


INFORMATION REPORTING AND BACKUP WITHHOLDING



     Generally, Williams must report annually to the IRS and to each holder the
amounts of interest paid to that holder, and the amount of tax, if any, that was
withheld on the interest. This information may also be made available to the tax
authorities of a country in which a non-U.S. holder resides.



     Backup withholding will generally apply to interest payments made to
persons that fail to furnish certain required information. A U.S. holder may be
subject to backup withholding on interest payments with respect to new
securities unless such U.S. holder (i) is a corporation or comes within certain
other exempt categories and demonstrates this fact, or (ii) provides a correct
taxpayer identification number, certifies as to no loss of exemption from backup
withholding and otherwise complies with applicable requirements. Backup
withholding generally will not apply to interest payments made in respect of new
securities held by a non-U.S. holder, if the holder properly certifies as to its
non-U.S. status or otherwise establishes an exemption.

                                        44
<PAGE>

     Backup withholding is not an additional tax. Any amounts we withhold under
the backup withholding rules will be allowed as a refund or credit against such
non-U.S. holder's federal income tax liability, provided that the requisite
procedures are followed and certain information is provided to the IRS.


     In the case of the payment of proceeds from the disposition of new
securities to or through a non-U.S. office of a U.S. broker, or foreign brokers
with certain types of relationships to the United States, information reporting,
but not backup withholding, will be required on the payment, unless the broker
has documentary evidence in its files that the owner is a non-U.S. holder and
certain other conditions are met, or the holder otherwise establishes an
exemption.


                              PLAN OF DISTRIBUTION

     Based on interpretations by the staff of the SEC in no-action letters
issued to third parties, we believe that you may transfer new 8.125% notes and
new 8.750% notes issued under the exchange offer in exchange for the outstanding
8.125% notes and outstanding 8.750% notes if:

     - you acquire the new 8.125% notes or new 8.750% notes in the ordinary
       course of your business; and

     - you are not engaged in, and do not intend to engage in, and have no
       arrangement or understanding with any person to participate in, a
       distribution of the new 8.125% notes or new 8.750% notes.

     Broker-dealers receiving new 8.125% notes or new 8.750% notes in the
exchange offer will be subject to a prospectus delivery requirement with respect
to resales of the new 8.125% notes and new 8.750% notes.


     We believe that you may not transfer new 8.125% notes or new 8.750% notes
issued under the exchange offer in exchange for the outstanding 8.125% notes or
outstanding 8.750% notes without compliance with the registration and prospectus
delivery provisions of the Securities Act if you are:


     - our "affiliate" within the meaning of Rule 405 under the Securities Act;

     - a broker-dealer that acquired outstanding 8.125% notes or outstanding
       8.750% notes directly from us; or


     - a broker-dealer that acquired outstanding 8.125% notes or outstanding
       8.750% notes as a result of market-making or other trading activities.


     To date, the staff of the SEC has taken the position that participating
broker-dealers may fulfill their prospectus delivery requirements with respect
to transactions involving an exchange of securities such as this exchange offer,
other than a resale of an unsold allotment from the original sale of the
outstanding 8.125% notes or outstanding 8.750% notes, with the prospectus
contained in the exchange offer registration statement. We have agreed to permit
participating broker-dealers to use this prospectus in connection with the
resale of new 8.125% notes and new 8.750% notes.

     If you wish to exchange your outstanding 8.125% notes for new 8.125% notes
or your outstanding 8.750% notes for new 8.750% notes in the exchange offer, you
will be required to make representations to us as described in "The Exchange
Offer -- Exchange Terms" and "-- Procedures for Tendering Outstanding
Securities -- Other Matters" in this prospectus and in the letter of
transmittal. In addition, if you are a broker-dealer who receives new 8.125%
notes or new 8.750% notes for your own account in exchange for outstanding
8.125% notes or outstanding 8.750% notes that were acquired by you as a result
of market-making activities or other trading activities, you will be required to
acknowledge that you will deliver a prospectus in connection with any resale by
you of such new 8.125% notes or new 8.750% notes. See "The Exchange
Offer -- Resale of New Securities."

                                        45
<PAGE>

     We will not receive any proceeds from any sale of new 8.125% notes or new
8.750% notes by broker-dealers or from any other person. Broker-dealers who
receive new 8.125% notes or new 8.750% notes for their own account in the
exchange offer may sell them from time to time in one or more transactions:

     - in the over-the-counter market;

     - in negotiated transactions;

     - through the writing of options on the new 8.125% notes or new 8.750%
       notes or a combination of such methods of resale;

     - at market prices prevailing at the time of resale; and

     - at prices related to such prevailing market prices or negotiated prices.

     Any resale may be made directly to purchasers or to or through brokers or
dealers who may receive compensation in the form of commissions or concessions
from any broker-dealer or the purchasers of any new 8.125% notes or new 8.750%
notes. Any broker-dealer that resells new 8.125% notes or new 8.750% notes it
received for its own account in the exchange offer and any broker or dealer that
participates in a distribution of such new 8.125% notes or new 8.750% notes may
be deemed to be an "underwriter" within the meaning of the Securities Act. Any
profit on any resale of new 8.125% notes or new 8.750% notes and any commissions
or concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The letter of transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.

     We have agreed to pay all expenses incidental to the exchange offer other
than commissions and concessions of any brokers or dealers. We will indemnify
holders of the outstanding 8.125% notes and outstanding 8.750% notes, including
any broker-dealers, against certain liabilities, including liabilities under the
Securities Act, as provided in the registration rights agreement.

                           FORWARD-LOOKING STATEMENTS


     Certain matters discussed in this prospectus, excluding historical
information, include forward-looking statements -- statements that discuss our
expected future results based on current and pending business operations.
Forward-looking statements can be identified by words such as "anticipates,"
"believes," "could," "continues," "estimates," "expects," "forecasts," "might,"
"planned," "potential," "projects," "scheduled" or similar expressions. Although
we believe these forward-looking statements are based on reasonable assumptions,
statements made regarding future results are subject to a number of assumptions,
uncertainties and risks that could cause future results to be materially
different from the results stated or implied in this prospectus. Events in 2002
significantly impacted the risk environment all businesses face and raised a
level of uncertainty in the capital markets that has approached that which led
to the general market collapse of 1929. Beliefs and assumptions as to what
constitutes appropriate levels of capitalization and fundamental value have
changed abruptly. The deterioration of our energy industry sector in the wake of
the collapse of Enron combined with the meltdown of the telecommunications
industry are both new realities that have had and will likely continue to have
specific impacts on all companies, including us. Although we believe these
forward-looking statements are based on reasonable assumptions, statements made
regarding future results are subject to a number of assumptions, uncertainties
and risks that could cause future results to be materially different from the
results stated or implied in this prospectus.



     Additional information about issues that could lead to material changes in
performance is contained in our annual report on Form 10-K for the year ended
December 31, 2002 which is incorporated by reference in this prospectus.


                                        46
<PAGE>

                                 LEGAL MATTERS


     The validity of the new 8.125% notes and the new 8.750% notes has been
passed upon by William G. von Glahn, Esq., who, prior to his retirement from
Williams in December 2002, served as Senior Vice President and General Counsel
of Williams. As of December 31, 2002, Mr. von Glahn was the beneficial holder of
75,000 shares of Williams common stock (including shares subject to stock
options, deferred stock awards and Williams' 401(k) retirement plan). Mr. von
Glahn was a participant in Williams' stock option plan and various other
employee benefit plans offered to employees of Williams. White & Case LLP,
special tax counsel for Williams, will pass upon the discussion set forth under
the heading "Material United States Federal Income Tax Considerations" on page
42.


                                    EXPERTS


     The consolidated financial statements and schedule of Williams appearing in
Williams' Annual Report on Form 10-K for the year ended December 31, 2002, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements and schedule are incorporated herein by
reference in reliance upon such report given on the authority of such firm as
experts in accounting and auditing.


                      WHERE YOU CAN FIND MORE INFORMATION

     We file annual, quarterly and special reports, proxy statements and other
information with the SEC under the Exchange Act. The registration statement of
which this prospectus forms a part and these reports, proxy statements and other
information can be inspected and copied at the public reference room maintained
by the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the SEC's regional offices at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and at 233 Broadway, New York, New York 10005.
Copies of these materials may also be obtained from the SEC at prescribed rates
by writing to the public reference room maintained by the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain
information on the operation of the public reference room by calling the SEC at
1-800-SEC-0330.

     We have filed with the SEC a registration statement on Form S-4 under the
Securities Act with respect to this offering. This prospectus, which forms a
part of the registration statement, does not contain all the information
included in the registration statement and the attached exhibits.


     The SEC maintains a World Wide Web site on the internet at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding us. The reports, proxy and information statements
and other information about us can be downloaded from the SEC's website and can
also be inspected and copied at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.


                    INCORPORATION OF DOCUMENTS BY REFERENCE

     The SEC allows us to "incorporate by reference" into this prospectus the
information we file with it, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus, and later
information that we file with the SEC will automatically update and supersede
this information. We incorporate by reference the documents listed below and any
future filings made with the SEC under section 13(a), 13(c), 14 or 15(d) of the
Exchange Act until the exchange offer is completed:


     - our annual report on Form 10-K for the year ended December 31, 2002;



     - our current reports on Form 8-K filed January 2, 2003, January 9, 2003,
       January 17, 2003, January 24, 2003, February 19, 2003, February 21, 2003,
       March 6, 2003, March 12, 2003,


                                        47
<PAGE>


March 19, 2003, March 21, 2003, April 10, 2003, April 15, 2003, April 16, 2003,
April 21, 2003 and April 22, 2003; and



     - our definitive proxy statement on Schedule 14A filed April 7, 2003.


     You may request a copy of these filings, at no cost, by writing or calling
us at the following address:

                          The Williams Companies, Inc.
                              One Williams Center
                             Tulsa, Oklahoma 74172
                         Attention: Corporate Secretary
                           Telephone: (918) 573-2000


     ANY REQUEST FOR THESE FILINGS SHOULD BE MADE BY MAY --, 2003 TO ENSURE
TIMELY DELIVERY OF THE FILINGS PRIOR TO THE EXPIRATION DATE OF THE EXCHANGE
OFFER.


     You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone else to provide you
with any information. You should not assume that the information in this
document is current as of any date other than the date on the front page of this
prospectus.

                                        48
<PAGE>

                                    PART II

                   INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 20.  INDEMNIFICATION OF DIRECTORS AND OFFICERS

     Williams, a Delaware corporation, is empowered by Section 145 of the
General Corporation Law of the State of Delaware, subject to the procedures and
limitations stated therein, to indemnify any person against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred by them in connection with any threatened, pending, or
completed action, suit, or proceeding in which such person is made party by
reason of their being or having been a director, officer, employee, or agent of
Williams. The statute provides that indemnification pursuant to its provisions
is not exclusive of other rights of indemnification to which a person may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors, or otherwise. The By-laws of Williams provide for indemnification by
Williams of its directors and officers to the fullest extent permitted by the
General Corporation Law of the State of Delaware. In addition, Williams has
entered into indemnity agreements with its directors and certain officers
providing for, among other things, the indemnification of and the advancing of
expenses to such individuals to the fullest extent permitted by law, and to the
extent insurance is maintained, for the continued coverage of such individuals.

     Policies of insurance are maintained by Williams under which the directors
and officers of Williams are insured, within the limits and subject to the
limitations of the policies, against certain expenses in connection with the
defense of actions, suits, or proceedings, and certain liabilities which might
be imposed as a result of such actions, suits or proceedings, to which they are
parties by reason of being or having been such directors or officers.

ITEM 21.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

     (a) Exhibits

     The following instruments and documents are included as Exhibits to this
Registration Statement.


<Table>
<Caption>
EXHIBIT
NUMBER                              EXHIBIT
- -------                             -------
<C>       <S>
   3.1    Restated Certificate of Incorporation, as supplemented
          (filed as Exhibit 3.1 to the Registration Statement on Form
          S-3 filed April 4, 2002, file number 333-85540).*
   3.2    Restated Bylaws (filed as Exhibit 99.1 to Form 8-K filed
          January 19, 2000).*
   4.1    Form of Senior Debt Indenture between the registrant and
          Bank One Trust Company, N.A. (formerly The First National
          Bank of Chicago), as trustee (filed as Exhibit 4.1 to the
          Registration Statement on Form S-3 filed September 8, 1997,
          file number 333-35099).*
   4.2    Seventh Supplemental Indenture, dated March 19, 2002,
          between the registrant and Bank One Trust Company, N.A., as
          trustee.**
   4.3    Registration Rights Agreement, dated March 19, 2002, among
          the registrant and the initial purchasers named therein.**
   4.4    Instrument of Resignation, Appointment and Acceptance, dated
          January 16, 2003, by and among The Williams Companies, Inc.,
          Bank One Trust Company, N.A., as the resigning trustee, and
          JPMorgan Chase Bank, as successor trustee.
   5.1    Opinion of William G. von Glahn, Esq., as to the validity of
          the new 8.125% notes and the new 8.750% notes.**
   8.1    Opinion of White & Case LLP, as to certain tax matters.
  10.1    Purchase Agreement, dated March 14, 2002, among the
          registrant and the initial purchasers named therein.**
  12.1    Statement regarding Computation of Ratios of Earnings to
          Combined Fixed Charges and Preferred Stock Dividend
          Requirements (filed as Exhibit 12 to the Annual Report on
          Form 10-K for the year ending December 31, 2002 and filed
          March 19, 2003).
</Table>


                                       II-1
<PAGE>


<Table>
<Caption>
EXHIBIT
NUMBER                              EXHIBIT
- -------                             -------
<C>       <S>
  21      Subsidiaries of the registrant (filed as Exhibit 21 to the
          Annual Report on Form 10-K for the year ended December 31,
          2002).*
  23.1    Consent of Ernst & Young LLP.
  23.2    Consent of William G. von Glahn, Esq. (contained in Exhibit
          5.1).
  23.3    Consent of White & Case LLP (contained in Exhibit 8.1).
  24.1    Power of Attorney.**
  24.2    Certified copy of resolutions authorizing signatures
          pursuant to Power of Attorney.**
  25.1    Statement of Eligibility of Bank One Trust Company, N.A., as
          trustee, on Form T-1 with respect to the issuance of 8.125%
          Notes due March 15, 2012 and 8.750% Notes due March 15,
          2032, by the registrant pursuant to the Indenture between
          the registrant and Bank One Trust Company, N.A., as
          trustee.**
  25.2    Statement of Eligibility of JPMorgan Chase Bank, as trustee,
          on Form T-1 with respect to the issuance of 8.125% Notes due
          March 15, 2012 and 8.750% Notes due March 15, 2032, by the
          registrant pursuant to the Indenture between the registrant
          and JPMorgan Chase Bank, as trustee.
  99.1    Form of Letter of Transmittal.
  99.2    Form of Notice of Guaranteed Delivery.
  99.3    Form of Letter to Registered Holders and DTC Participants.
  99.4    Form of Letter to Clients.
  99.5    Guidelines for Certification of Taxpayer Identification
          Number on Substitute Form W-9.
</Table>


- ---------------

* Indicates exhibits incorporated by reference as indicated.

** Previously filed.

ITEM 22.  UNDERTAKINGS

     (a) The undersigned registrant hereby undertakes:

          1. To file, during any period in which offers or sales are being made,
     a post-effective amendment to this registration statement:

             (i) To include any prospectus required by Section 10(a)(3) of the
        Securities Act of 1933;

             (ii) To reflect in the prospectus any facts or events arising after
        the effective date of the registration statement (or the most recent
        post-effective amendment thereof) which, individually or in the
        aggregate, represent a fundamental change in the information set forth
        in the registration statement. Notwithstanding the foregoing, any
        increase or decrease in volume of securities offered (if the total
        dollar value of securities offered would not exceed that which was
        registered) and any deviation from the low or high end of the estimated
        maximum offering range may be reflected in the form of prospectus filed
        with the Commission pursuant to Rule 424(b) if, in the aggregate, the
        changes in volume and price represent no more than 20 percent change in
        the maximum aggregate offering price set forth in the "Calculation of
        Registration Fee" table in the effective registration statement; and

             (iii) To include any material information with respect to the plan
        of distribution not previously disclosed in the registration statement
        or any material change to such information in the registration
        statement.

          2. That, for the purpose of determining any liability under the
     Securities Act of 1933, each such post-effective amendment shall be deemed
     to be a new registration statement relating to the securities offered
     therein, and the offering of such securities at that time shall be deemed
     to be the initial bona fide offering thereof.

                                       II-2
<PAGE>

          3. To remove from registration by means of a post-effective amendment
     any of the securities being registered that remain unsold at the
     termination of the offering.

     (b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

     (c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

     (d) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.

     (e) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

                                       II-3
<PAGE>

                                   SIGNATURES


     Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Amendment No. 2 to the registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Tulsa and State of Oklahoma on the 22nd day of April, 2003.


                                          THE WILLIAMS COMPANIES, INC.


                                          BY:      /s/ BRIAN K. SHORE

                                            ------------------------------------

                                              Name: Brian K. Shore


                                              Title: Secretary



     Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to registration statement has been signed by the following persons in the
capacities and on the dates indicated.



<Table>
<Caption>
                    SIGNATURE                                       TITLE                       DATE
                    ---------                                       -----                       ----
<C>     <C>                                          <S>                                   <C>
              /s/ STEVEN J. MALCOLM*                 President, Chief Executive Officer    April 22, 2003
 ------------------------------------------------    and Chairman of the Board
                Steven J. Malcolm                    (Principal Executive Officer)


              /s/ DONALD R. CHAPPEL*                 Senior Vice President and Chief       April 22, 2003
 ------------------------------------------------    Financial Officer
                Donald R. Chappel                    (Principal Financial Officer)


               /s/ GARY R. BELITZ*                   Controller                            April 22, 2003
 ------------------------------------------------    (Principal Accounting Officer)
                  Gary R. Belitz


               /s/ HUGH M. CHAPMAN*                  Director                              April 22, 2003
 ------------------------------------------------
                 Hugh M. Chapman


            /s/ THOMAS H. CRUIKSHANK*                Director                              April 22, 2003
 ------------------------------------------------
               Thomas H. Cruikshank


              /s/ WILLIAM E. GREEN*                  Director                              April 22, 2003
 ------------------------------------------------
                 William E. Green


                /s/ W. R. HOWELL*                    Director                              April 22, 2003
 ------------------------------------------------
                   W. R. Howell


               /s/ JAMES C. LEWIS*                   Director                              April 22, 2003
 ------------------------------------------------
                  James C. Lewis


              /s/ CHARLES M. LILLIS*                 Director                              April 22, 2003
 ------------------------------------------------
                Charles M. Lillis


               /s/ GEORGE A. LORCH*                  Director                              April 22, 2003
 ------------------------------------------------
                 George A. Lorch
</Table>


                                       II-4
<PAGE>


<Table>
<Caption>
                    SIGNATURE                                       TITLE                       DATE
                    ---------                                       -----                       ----

<C>     <C>                                          <S>                                   <C>

              /s/ FRANK T. MACINNIS*                 Director                              April 22, 2003
 ------------------------------------------------
                Frank T. MacInnis


              /s/ GORDON R. PARKER*                  Director                              April 22, 2003
 ------------------------------------------------
                 Gordon R. Parker


              /s/ JANICE D. STONEY*                  Director                              April 22, 2003
 ------------------------------------------------
                 Janice D. Stoney


             /s/ JOSEPH H. WILLIAMS*                 Director                              April 22, 2003
 ------------------------------------------------
                Joseph H. Williams


 *By:               /s/ BRIAN K. SHORE
        ------------------------------------------
                      Brian K. Shore
                     Attorney-in-Fact
</Table>


                                       II-5
<PAGE>

                               INDEX TO EXHIBITS


<Table>
<Caption>
EXHIBIT
NUMBER                              EXHIBIT
- -------                             -------
<C>       <S>
  3.1     Restated Certificate of Incorporation, as supplemented
          (filed as Exhibit 3.1 to the Registration Statement on Form
          S-3 filed April 4, 2002, file number 333-85540).*
  3.2     Restated Bylaws (filed as Exhibit 99.1 to Form 8-K filed
          January 19, 2000).*
  4.1     Form of Senior Debt Indenture between the registrant and
          Bank One Trust Company, N.A. (formerly The First National
          Bank of Chicago), as trustee (filed as Exhibit 4.1 to the
          Registration Statement on Form S-3 filed September 8, 1997,
          file number 333-35099).*
  4.2     Seventh Supplemental Indenture, dated March 19, 2002,
          between the registrant and Bank One Trust Company, N.A., as
          trustee.**
  4.3     Registration Rights Agreement, dated March 19, 2002, among
          the registrant and the initial purchasers named therein.**
  4.4     Instrument of Resignation, Appointment and Acceptance, dated
          January 16, 2003, by and among The Williams Companies, Inc.,
          Bank One Trust Company, N.A., as the resigning trustee, and
          JPMorgan Chase Bank, as successor trustee.
  5.1     Opinion of William G. von Glahn, Esq., as to the validity of
          the new 8.125% notes and the new 8.750% notes.**
  8.1     Opinion of White & Case LLP, as to certain tax matters.
 10.1     Purchase Agreement, dated March 14, 2002, among the
          registrant and the initial purchasers named therein.**
 12.1     Statement regarding Computation of Ratios of Earnings to
          Combined Fixed Charges and Preferred Stock Dividend
          Requirements (filed as Exhibit 12 to the Annual Report on
          Form 10-K for the year ending December 31, 2002 and filed
          March 19, 2003).
   21     Subsidiaries of the registrant (filed as Exhibit 21 to the
          Annual Report on Form 10-K for the year ended December 31,
          2002).*
 23.1     Consent of Ernst & Young LLP.
 23.2     Consent of William G. von Glahn, Esq. (contained in Exhibit
          5.1).
 23.3     Consent of White & Case LLP (contained in Exhibit 8.1).
 24.1     Power of Attorney.**
 24.2     Certified copy of resolutions authorizing signatures
          pursuant to Power of Attorney.**
 25.1     Statement of Eligibility of Bank One Trust Company, N.A., as
          trustee, on Form T-1 with respect to the issuance of 8.125%
          Notes due March 15, 2012 and 8.750% Notes due March 15,
          2032, by the registrant pursuant to the Indenture between
          the registrant and Bank One Trust Company, N.A., as
          trustee.**
 25.2     Statement of Eligibility of JPMorgan Chase Bank, as trustee,
          on Form T-1 with respect to the issuance of 8.125% Notes due
          March 15, 2012 and 8.750% Notes due March 15, 2032, by the
          registrant pursuant to the Indenture between the registrant
          and JPMorgan Chase Bank, as trustee.
 99.1     Form of Letter of Transmittal.
 99.2     Form of Notice of Guaranteed Delivery.
 99.3     Form of Letter to Registered Holders and DTC Participants.
 99.4     Form of Letter to Clients.
 99.5     Guidelines for Certification of Taxpayer Identification
          Number on Substitute Form W-9.
</Table>


- ---------------

 * Indicates exhibits incorporated by reference as indicated.

** Previously filed.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.4
<SEQUENCE>3
<FILENAME>d04378a2exv4w4.txt
<DESCRIPTION>INSTRUMENT OF RESIGNATION AND APPOINTMENT
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.4

                                                                [EXECUTION COPY]





                  INSTRUMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE (the
"Agreement"), dated as of January 16, 2003, by and among THE WILLIAMS COMPANIES,
INC., a corporation duly organized and existing under the laws of the State of
Delaware, having its principal office at One Williams Center, Tulsa, Oklahoma
74172 (the "Issuer"), BANK ONE TRUST COMPANY, N.A., a national banking
association duly organized and existing under the laws of the United States of
America, having its principal corporate trust office at 1111 Polaris Parkway,
Suite 1K, Columbus, Ohio 43240 (the "Resigning Trustee"), and JPMORGAN CHASE
BANK, a New York banking corporation duly organized and existing under the laws
of the State of New York, having a corporate trust office at 4 New York Plaza,
New York, New York 10004 (the "Successor Trustee");

                                    RECITALS

                  There are presently issued and outstanding $8,194,925,000 in
aggregate principal amount of the Issuer's Registered Securities of various
series (the "Securities") under a Senior Indenture, dated as of November 10,
1997 (the "Original Indenture"), as supplemented by the First Supplemental
Indenture dated as of September 8, 2000, the Second Supplemental Indenture dated
as of December 7, 2000, the Third Supplemental Indenture dated as of December
20, 2000, the Fourth Supplemental Indenture dated as of January 17, 2001, the
Fifth Supplemental Indenture dated as of January 17, 2001, the Sixth
Supplemental Indenture dated as of January 14, 2002, the Seventh Supplemental
Indenture dated as of March 19, 2002 (the "Seventh Supplemental Indenture"), and
the Eighth Supplemental Indenture dated as of June 3, 2002 (collectively, the
"Supplemental Indentures", together with the Original Indenture, the
"Indenture"), between the Issuer and the Resigning Trustee (formerly known as
The First National Bank of Chicago).

                  The Resigning Trustee wishes to resign as Trustee, registrar
for the Securities (the "Registrar") and paying agent for the Securities (the
"Paying Agent") under the Indenture; the Issuer wishes to appoint the Successor
Trustee to succeed the Resigning Trustee as Trustee, Registrar and Paying Agent
under the Indenture; and the Successor Trustee wishes to accept appointment as
Trustee, Registrar and Paying Agent under the Indenture.

                  NOW, THEREFORE, in consideration of the mutual covenants and
promises herein, the receipt and sufficiency of which is hereby acknowledged,
the Issuer, the Resigning Trustee and the Successor Trustee agree as follows:

                                   ARTICLE ONE
                              THE RESIGNING TRUSTEE

                  Section 101. Pursuant to Section 6.10 of the Indenture, the
Resigning Trustee hereby notifies the Issuer that the Resigning Trustee is
hereby resigning as Trustee under the Indenture.


<PAGE>


                  Section 102. The Resigning Trustee hereby represents and
warrants to the Successor Trustee that:

                           (a) No covenant or condition contained in the
                  Indenture has been waived by the Resigning Trustee or, to the
                  best of the knowledge of the Responsible Officers of the
                  Resigning Trustee, by Holders of the percentage in aggregate
                  principal amount of the Securities or of series thereof
                  required by the Indenture to effect any such waiver and no
                  notice has been given or received by Resigning Trustee under
                  Section 5.1 of the Indenture that would result in the
                  occurrence of an Event of Default.

                           (b) There is no action, suit or proceeding pending
                  or, to the best of the knowledge of the Responsible Officers
                  of the Resigning Trustee assigned to its Corporate Trust
                  Department, threatened against the Resigning Trustee before
                  any court or governmental authority arising out of any action
                  or omission by the Resigning Trustee as Trustee under the
                  Indenture.

                           (c) As of the effective date of this Agreement,
                  Resigning Trustee will hold no property under the Indenture.

                           (d) Pursuant to Section 2.4 of the Indenture,
                  Resigning Trustee duly authenticated and delivered
                  $8,194,925,000 aggregate principal amount of Securities, all
                  of which are Outstanding as of the effective date hereof.

                           (e) Each person who so authenticated the Securities
                  was duly elected, qualified and acting as an officer of
                  Resigning Trustee and empowered to authenticate the Securities
                  at the respective times of such authentication and the
                  signature of such person or persons appearing on such
                  Securities is each such person's genuine signature.

                           (f) This Agreement has been duly authorized, executed
                  and delivered on behalf of Resigning Trustee and constitutes
                  its legal, valid and binding obligation.

                  Section 103. The Resigning Trustee hereby assigns, transfers,
delivers and confirms to the Successor Trustee and its successors and assigns
all right, title and interest of the Resigning Trustee in and to the trust under
the Indenture, and all the rights, powers, trusts, privileges, duties and
obligations of the Trustee under the Indenture. The Resigning Trustee shall
execute and deliver such further instruments and shall do such other things as
the Successor Trustee may reasonably require so as to more fully and certainly
vest and confirm in the Successor Trustee all the rights, powers, trusts,
privileges, duties and obligations hereby assigned, transferred, delivered and
confirmed to the Successor Trustee as Trustee, Registrar and Paying Agent.

                  Section 104. The Resigning Trustee hereby resigns as Paying
Agent for the Securities, as Registrar for the Securities and as the office or
agency maintained by the Issuer pursuant to Section 3.2 of the Indenture.

                  Section 105. The Resigning Trustee agrees to pay or indemnify
the Successor Trustee and save the Successor Trustee harmless from and against
any and all costs, claims,


2
<PAGE>


liabilities, losses or damages whatsoever (including the reasonable fees,
expenses and disbursements of the Successor Trustee's counsel and other
advisors), that the Successor Trustee suffers or incurs without gross negligence
or bad faith on its part arising out of actions or omissions of the Resigning
Trustee. The Successor Trustee will furnish to the Resigning Trustee, promptly
after receipt, all papers with respect to any action the outcome of which would
make operative the indemnity provided for in this Section. The Successor Trustee
shall notify the Resigning Trustee promptly in writing (and, in any event,
within no later than 10 days) of any claim for which it may seek indemnity. The
Resigning Trustee shall have the option to defend the claim and the Successor
Trustee shall cooperate fully in the defense. If the Resigning Trustee shall
assume the defense, then the Resigning Trustee shall not pay for separate
counsel of the Successor Trustee. The Resigning Trustee shall not be obligated
to pay for any settlement made without its consent. The Resigning Trustee shall
not settle any claim against the Successor Trustee without such Successor
Trustee's written consent, which shall not be unreasonably withheld.

                                  ARTICLE TWO
                                   THE ISSUER

                  Section 201. The Issuer hereby certifies that the Board of
Directors of the Issuer has duly adopted resolutions, which are in full force
and effect on the date hereof, authorizing certain officers of the Issuer to:
(a) accept the Resigning Trustee's resignation as Trustee, Registrar and Paying
Agent under the Indenture; (b) appoint the Successor Trustee as Trustee,
Registrar and Paying Agent under the Indenture; and (c) execute and deliver such
agreements and other instruments as may be necessary or desirable to effectuate
the succession of the Successor Trustee as Trustee, Registrar and Paying Agent
under the Indenture. The Issuer is delivering simultaneously herewith a
Certificate of the Secretary or an Assistant Secretary certifying as to such
resolutions.

                  Section 202. The Issuer hereby appoints the Successor Trustee
as Trustee under the Indenture with all the rights, powers, privileges, trusts,
duties and obligations of the Trustee under the Indenture. The Issuer shall
execute and deliver such further instruments and shall do such other things as
the Successor Trustee may reasonably require so as to more fully and certainly
vest and confirm in the Successor Trustee all the rights, powers, privileges,
duties and obligations hereby assigned, transferred, delivered and confirmed to
the Successor Trustee.

                  Section 203. The Issuer hereby represents and warrants to the
Successor Trustee that:

                           (a) No Event of Default and no default exists under
                  the Indenture.

                           (b) No covenant or condition contained in the
                  Indenture has been waived by the Holders of the percentage in
                  aggregate principal amount of the Securities or of series
                  thereof required by the Indenture to effect any such waiver.

                           (c) Except for the Supplemental Indentures, the
                  Indenture has not been amended or modified and is in full
                  force and effect.

                           (d) The Securities are validly issued securities of
                  the Issuer.


3
<PAGE>


                           (e) The Issuer is a corporation duly and validly
                  organized and existing pursuant to the laws of the State of
                  Delaware.

                           (f) This Agreement has been duly authorized, executed
                  and delivered on behalf of Issuer and constitutes its legal,
                  valid and binding obligation.

                           (g) All conditions precedent relating to the
                  appointment of Successor Trustee as successor Trustee,
                  Registrar and Paying Agent under the Indenture have been
                  complied with by the Issuer.

                  Section 204. The Issuer hereby appoints the Successor Trustee
as Paying Agent for the Securities, as Registrar for the Securities and as the
Issuer's office or agency maintained pursuant to Section 3.2 of the Indenture.

                  Section 205. Promptly after the effective date of this
Instrument, the Issuer shall cause a notice, the form of which is annexed hereto
marked Exhibit A, to be sent to each Holder of the Securities in accordance with
the provisions of the Indenture.

                                  ARTICLE THREE
                              THE SUCCESSOR TRUSTEE

                  Section 301. The Successor Trustee hereby represents and
warrants to the Resigning Trustee and to the Issuer that the Successor Trustee
is qualified and eligible under Article Six of the Indenture to act as Trustee
under the Indenture (assuming the correctness of the representations made in
Sections 102(a) and 203(a) hereof) and that this Agreement has been duly
authorized, executed and delivered on behalf of the Successor Trustee and
constitutes its legal, valid and binding obligation.

                  Section 302. The Successor Trustee hereby accepts its
appointment as Trustee under the Indenture and shall hereby be vested with all
the rights, powers, trusts, privileges, duties and obligations of the Trustee
under the Indenture. The Successor Trustee hereby accepts its appointment as
Paying Agent for the Securities, as Registrar for the Securities and as the
Issuer's office or agency maintained pursuant to Section 3.2 of the Indenture.

                  Section 303. References in the Indenture to "the Corporate
Trust Office" or other similar terms shall be deemed to refer to the Corporate
Trust Office of the Successor Trustee at, and all notices to the Trustee
delivered pursuant to Section 11.4 of the Indenture shall be addressed to the
Trustee at, 4 New York Plaza, New York, New York 10004, Attention Institutional
Trust Services, or any other office of Successor Trustee at which, at any
particular time, its corporate trust business shall be administered.

                  Section 304. This Agreement shall not constitute (i) a waiver
by any of the parties hereto of any obligation or liability which Resigning
Trustee may have incurred in connection with its services as Trustee, Registrar
or Paying Agent under the Indenture or (ii) an assumption by Successor Trustee
of any liability of Resigning Trustee arising out of a breach by Resigning
Trustee prior to its resignation of its duties under the Indenture (each a
"Prior Liability"). Notwithstanding anything herein to the contrary, Resigning
Trustee shall remain liable for any Prior Liabilities to the extent provided in,
and subject to, the Indenture. This instrument does not constitute a waiver or
assignment by Resigning Trustee of any


4
<PAGE>


compensation, reimbursement, expenses or indemnity to which it is or may be
entitled pursuant to the Indenture.

                                  ARTICLE FOUR
                                  MISCELLANEOUS

                  Section 401. Except as otherwise expressly provided or unless
the context otherwise requires, all terms used herein which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

                  Section 402. This Instrument and the resignation, appointment
and acceptance effected hereby shall be effective as of the close of business on
January 27, 2003.

                  Section 403. Notwithstanding the resignation of the Resigning
Trustee effected hereby, the Issuer shall remain obligated under Section 6.6 of
the Indenture to compensate, reimburse and indemnify the Resigning Trustee in
connection with its prior trusteeship under the Indenture.

                  Section 404. This Instrument shall be governed by and
construed in accordance with the law of the State of New York.

                  Section 405. This Instrument may be executed in any number of
counterparts each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.

                  Section 406. All notices, whether faxed or mailed, will be
deemed received when sent pursuant to the following instructions:

                  TO THE RESIGNING TRUSTEE:

                           Bank One Trust Company, N.A.
                           1111 Polaris Parkway, Suite 1K
                           Columbus, Ohio 43240
                           Attention: Jeffrey A. Ayres

                           Facsimile:  (614) 248-5195
                           Phone No.  (614) 248-2566

                  TO THE SUCCESSOR TRUSTEE:

                           JPMorgan Chase Bank
                                    4 New York Plaza
                           New York, New York 10004
                           Attention: Institutional Trust Services

                           Facsimile: (212) 623-6167
                           Phone No.  (212) 623-6782


5
<PAGE>


                  TO THE ISSUER:

                           The Williams Companies, Inc.
                           One Williams Center, 50-4
                           Tulsa, Oklahoma 74172

                           Facsimile: (918) 573-2065
                           Attention: Treasurer

                  Section 407. Resigning Trustee hereby acknowledges payment or
provision for payment in full by the Issuer of compensation for all services
rendered by Resigning Trustee under the Indenture on or prior to the date hereof
and reimbursement in full by the Issuer of the expenses, disbursements and
advances incurred or made by Resigning Trustee in accordance with the provisions
of the Indenture on or prior to the date hereof. Resigning Trustee acknowledges
that it relinquishes any claim it may have upon all property or funds held or
collected by it to secure any amounts due it pursuant to the provisions of
Section 6.6 of the Indenture. The Issuer acknowledges its obligation set forth
in Section 6.6 of the Indenture to indemnify Resigning Trustee for, and to hold
Resigning Trustee harmless against, any loss, liability and expense (including
without limitation, any cost or expense hereafter incurred pursuant to Section
103 hereof) incurred without negligence or bad faith on the part of the
Resigning Trustee and arising out of or in connection with the acceptance or
administration of the Indenture or the trusts and its duties thereunder (which
obligation shall survive the execution hereof).

                  IN WITNESS WHEREOF, the parties hereto have caused this
Instrument of Resignation, Appointment and Acceptance to be duly executed as of
the day and year first above written.

                                         THE WILLIAMS COMPANIES, INC.


                                         By:      /s/ James G. Ivey
                                            ------------------------------------
                                             Name:  James G. Ivey

                                         BANK ONE TRUST COMPANY, N.A.


                                         By:      /s/ Jeffery L. Eubanks
                                            ------------------------------------
                                             Name:  Jeffery L. Eubanks

                                         JPMORGAN CHASE BANK


                                         By:      /s/ J. Adamis
                                            ------------------------------------
                                             Name:  J. Adamis


6
<PAGE>


                                    EXHIBIT A


Notice to Holders of ______% ________________ due ____________ (the "Notes"):

                  We hereby notify you of the resignation of Bank One Trust
Company, N.A., as Trustee under the Indenture, dated as of November 10, 1997,
pursuant to which your Notes were issued and are outstanding.

                  The Williams Companies, Inc. has appointed JPMorgan Chase
Bank, whose Corporate Trust Office is located at 4 New York Plaza, New York, New
York 10004, as Successor Trustee under the Indenture, which appointment has been
accepted and has become effective.

                                            BANK ONE TRUST COMPANY, N.A.
                                               as ResigningTrustee

                                            THE WILLIAMS COMPANIES, INC.


Dated:





7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8.1
<SEQUENCE>4
<FILENAME>d04378a2exv8w1.txt
<DESCRIPTION>OPINION OF WHITE & CASE LLP
<TEXT>
<PAGE>
                                                                     EXHIBIT 8.1


                            (WHITE & CASE LETTERHEAD)



                                 April 21, 2003



The Williams Companies, Inc.
One Williams Center
Tulsa, OK  74172

         Re:     Form S-4 Registration Statement of the Williams Companies, Inc.



Dear Ladies and Gentlemen:


         Reference is made to The Williams Companies, Inc. Amendment No. 2 to
Form S-4 Registration Statement, dated April 21, 2003 (the "Registration
Statement"). We have functioned as special tax counsel to The Williams
Companies, Inc. with respect to the transactions described in the Registration
Statement.


         We hereby confirm that in our opinion, the summary set forth in the
Registration Statement under the heading "Material United States Federal Income
Tax Considerations" constitutes in all material respects a fair and accurate
summary of the material United States federal income tax consequences of the
acquisition, ownership and disposition of the new securities, based upon current
United States Federal income tax law.

         We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement. We also consent to the reference to
our firm under the heading "Legal Matters" in the Registration Statement. In
giving this consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act or 1933,
as amended, or the rules and regulations of the Commission.

                                       Very truly yours,


                                       /s/ White & Case LLP


                                       White & Case LLP

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>5
<FILENAME>d04378a2exv23w1.txt
<DESCRIPTION>CONSENT OF ERNST & YOUNG LLP
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.1



                         Consent of Independent Auditors


We consent to the reference to our firm under the caption "Experts" in Amendment
No. 2 to the Registration Statement (Form S-4 No. 333-85568) and the related
Prospectus of The Williams Companies, Inc. for the registration of $650 million
of 8.125% Notes and $850 million of 8.75% Notes, and to the incorporation by
reference therein of our report dated March 5, 2003, with respect to the
consolidated financial statements and schedule of The Williams Companies, Inc.
included in its Annual Report (Form 10-K) for the year ended December 31, 2002,
filed with the Securities and Exchange Commission.


                                                               ERNST & YOUNG LLP


Tulsa, Oklahoma
April 17, 2003


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25.2
<SEQUENCE>6
<FILENAME>d04378a2exv25w2.txt
<DESCRIPTION>STATEMENT OF ELIGIBILITY OF JPMORGAN CHASE BANK
<TEXT>
<PAGE>

                                                                    EXHIBIT 25.2
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                            -------------------------

                                    FORM T-1

                            STATEMENT OF ELIGIBILITY
                    UNDER THE TRUST INDENTURE ACT OF 1939 OF
                   A CORPORATION DESIGNATED TO ACT AS TRUSTEE

                   -------------------------------------------
               CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
                     A TRUSTEE PURSUANT TO SECTION 305(b)(2)

                    -----------------------------------------

                               JPMORGAN CHASE BANK
               (Exact name of trustee as specified in its charter)

NEW YORK                                                              13-4994650
(State of incorporation                                         (I.R.S. employer
if not a national bank)                                      identification No.)

270 PARK AVENUE
NEW YORK, NEW YORK                                                         10017
(Address of principal executive offices)                              (Zip Code)

                               William H. McDavid
                                 General Counsel
                                 270 Park Avenue
                            New York, New York 10017
                               Tel: (212) 270-2611
            (Name, address and telephone number of agent for service)
                  --------------------------------------------
                          THE WILLIAMS COMPANIES, INC.
               (Exact name of obligor as specified in its charter)

DELAWARE                                                              73-0569878
(State or other jurisdiction of                                 (I.R.S. employer
incorporation or organization)                               identification No.)


ONE WILLIAMS CENTER
TULSA, OKLAHOMA                                                            74172
(Address of principal executive offices)                              (Zip Code)

                    ----------------------------------------
                         8.125% NOTES DUE MARCH 15, 2012
                         8.750% NOTES DUE MARCH 15, 2032
                       (Title of the indenture securities)

- --------------------------------------------------------------------------------



<PAGE>


                                     GENERAL

Item 1.  General Information.

         Furnish the following information as to the trustee:

         (a)  Name and address of each examining or supervising authority to
              which it is subject.

              New York State Banking Department, State House, Albany, New York
              12110.

              Board of Governors of the Federal Reserve System, Washington,
              D.C., 20551

              Federal Reserve Bank of New York, District No. 2, 33 Liberty
              Street, New York, N.Y.

              Federal Deposit Insurance Corporation, Washington, D.C., 20429.


         (b)  Whether it is authorized to exercise corporate trust powers.

              Yes.


Item 2.  Affiliations with the Obligor and Guarantors.

         If the obligor or any Guarantor is an affiliate of the trustee,
describe each such affiliation.

         None.


<PAGE>
                                      -2-


Item 16. List of Exhibits

         List below all exhibits filed as a part of this Statement of
Eligibility.

         1. A copy of the Restated Organization Certificate of the Trustee dated
March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see
Exhibit 1 to Form T-1 filed in connection with Registration Statement No.
333-76894, which is incorporated by reference).

         2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference). On November 11,
2001 in connection with the merger of The Chase Manhattan Bank and Morgan
Guaranty Trust Company of New York, the surviving corporation was renamed
JPMorgan Chase Bank.

         3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.

         4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-76894, which is
incorporated by reference.).

         5. Not applicable.

         6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference). On November 11, 2001, in
connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust
Company of New York, the surviving corporation was renamed JPMorgan Chase Bank.

         7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.

         8. Not applicable.

         9. Not applicable.

                                    SIGNATURE

         Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, JPMorgan Chase Bank, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 22ND DAY OF APRIL, 2003.

                                       JPMORGAN CHASE BANK

                                       By /s/ JOANNE ADAMIS
                                         ---------------------------------------
                                           Joanne Adamis
                                           Vice President


<PAGE>


                                       -3-

Item 16. List of Exhibits

         List below all exhibits filed as a part of this Statement of
Eligibility.

         1. A copy of the Restated Organization Certificate of the Trustee dated
March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see
Exhibit 1 to Form T-1 filed in connection with Registration Statement No.
333-76894, which is incorporated by reference).

         2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference). On November 11,
2001 in connection with the merger of The Chase Manhattan Bank and Morgan
Guaranty Trust Company of New York, the surviving corporation was renamed
JPMorgan Chase Bank.

         3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.

         4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-76894, which is
incorporated by reference.).

         5. Not applicable.

         6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference). On November 11, 2001, in
connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust
Company of New York, the surviving corporation was renamed JPMorgan Chase Bank.

         7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.

         8. Not applicable.

         9. Not applicable.

                                    SIGNATURE

         Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, JPMorgan Chase Bank, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 22ND DAY OF APRIL, 2003.

                                             JPMORGAN CHASE BANK

                                             By  /s/ Joanne Adamis
                                                ---------------------------
                                                     Joanne Adamis
                                                     Vice President


<PAGE>

                              Exhibit 7 to Form T-1


                                Bank Call Notice

                             RESERVE DISTRICT NO. 2
                       CONSOLIDATED REPORT OF CONDITION OF

                               JPMorgan Chase Bank
                  of 270 Park Avenue, New York, New York 10017
                     and Foreign and Domestic Subsidiaries,
                     a member of the Federal Reserve System,

                 at the close of business December 31, 2002, in
         accordance with a call made by the Federal Reserve Bank of this
         District pursuant to the provisions of the Federal Reserve Act.


<Table>
<Caption>
                                                                 DOLLAR AMOUNTS
                       ASSETS                                     IN MILLIONS
<S>                                                              <C>
Cash and balances due from depository institutions:
     Noninterest-bearing balances and
     currency and coin ........................................     $ 18,102
     Interest-bearing balances ................................        8,392
Securities:
Held to maturity securities ...................................          396
Available for sale securities .................................       79,372
Federal funds sold and securities purchased under
     agreements to resell......................................
     Federal funds sold in domestic offices ...................       16,164
     Securities purchased under agreements to resell ..........       67,327
Loans and lease financing receivables:
     Loans and leases held for sale ...........................       24,545
     Loans and leases, net of unearned income .................     $159,647
     Less: Allowance for loan and lease losses ................        3,572
     Loans and leases, net of unearned income and
     allowance ................................................      156,075
Trading Assets.................................................      194,198
Premises and fixed assets (including capitalized leases) ......        6,280
Other real estate owned .......................................          104
Investments in unconsolidated subsidiaries and
     associated companies .....................................          678
Customers' liability to this bank on acceptances
     outstanding ..............................................          349
Intangible assets
        Goodwill ..............................................        2,159
        Other Intangible assets ...............................        3,315
Other assets ..................................................       44,932
TOTAL ASSETS ..................................................     $622,388
                                                                    ========
</Table>

                                       -4-



<PAGE>


<Table>
<S>                                                                                             <C>
                                             LIABILITIES

Deposits
     In domestic offices ..................................................................     $171,786
     Noninterest-bearing ..................................................................     $ 75,101
     Interest-bearing .....................................................................       96,685
     In foreign offices, Edge and Agreement
     subsidiaries and IBF's ...............................................................      128,780
     Noninterest-bearing ..................................................................     $  7,380
     Interest-bearing .....................................................................      121,400

Federal funds purchased and securities sold under agree- ments to repurchase:
     Federal funds purchased in domestic offices ..........................................        5,701
     Securities sold under agreements to repurchase .......................................      120,579
Trading liabilities .......................................................................      118,113
Other borrowed money (includes mortgage indebtedness
     and obligations under capitalized leases) ............................................        8,388
Bank's liability on acceptances executed and outstanding ..................................          356
Subordinated notes and debentures .........................................................        8,528
Other liabilities .........................................................................       24,520
TOTAL LIABILITIES .........................................................................      586,751
Minority Interest in consolidated subsidiaries ............................................           97

                                            EQUITY CAPITAL

Perpetual preferred stock and related surplus .............................................            0
Common stock ..............................................................................        1,785
Surplus  (exclude all surplus related to preferred stock)..................................       16,304
Retained earnings .........................................................................       16,347
Accumulated other comprehensive income ....................................................        1,104
Other equity capital components ...........................................................            0
TOTAL EQUITY CAPITAL ......................................................................       35,540
                                                                                                --------
TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL ..................................     $622,388
                                                                                                ========
</Table>

I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.

                                    JOSEPH L. SCLAFANI

We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the in- structions
issued by the appropriate Federal regulatory authority and is true and correct.



                        WILLIAM B. HARRISON, JR.    )
                        ELLEN V. FUTTER             ) DIRECTORS
                                                      FRANK A. BENNACK, JR.)






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>7
<FILENAME>d04378a2exv99w1.txt
<DESCRIPTION>FORM OF LETTER OF TRANSMITTAL
<TEXT>
<PAGE>

                                                                    EXHIBIT 99.1

                          THE WILLIAMS COMPANIES, INC.

                             LETTER OF TRANSMITTAL

                         FOR TENDER OF ALL OUTSTANDING
                        8.125% NOTES DUE MARCH 15, 2012
                                IN EXCHANGE FOR
                        8.125% NOTES DUE MARCH 15, 2012
           THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
                                      AND
                        8.750% NOTES DUE MARCH 15, 2032
                                IN EXCHANGE FOR
                        8.750% NOTES DUE MARCH 15, 2032
           THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933


               PURSUANT TO THE PROSPECTUS DATED APRIL  -- , 2003


       THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,

                     NEW YORK CITY TIME, ON MAY -- , 2003,

                     UNLESS THE EXCHANGE OFFER IS EXTENDED.

                                      To:

                   JPMORGAN CHASE BANK (THE "EXCHANGE AGENT")



<Table>
<S>                             <C>                             <C>
 By Mail or Overnight Courier:         By Hand Delivery:          By Facsimile Transmission:
   Corporate Trust Services          GIS Unit Trust Window              (214) 468-6494
2001 Bryan Street -- 9th floor   4 New York Plaza -- 1st floor
      Dallas, Texas 75201          New York, New York 10004
    Attention: Frank Ivins          Attention: Frank Ivins
</Table>


                               For Information or
                                  Confirmation
                                 by Telephone:
                                 (214) 468-6464

     DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OR TRANSMISSION THEREOF TO A
FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID
DELIVERY. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES, IS AT
THE RISK OF THE HOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. THE INSTRUCTIONS
ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.


     The undersigned acknowledges that he or she has received the Prospectus,
dated April  -- , 2003 (the "Prospectus") of The Williams Companies, Inc. (the
"Company") and this Letter of Transmittal and the instructions hereto (the
"Letter of Transmittal"), which together constitute the Company's offer (the
"Exchange Offer") to exchange $1,000 principal amount of its 8.125% Notes due
March 15, 2012, that have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), pursuant to a Registration Statement of which
the Prospectus is a part, for each $1,000 principal amount of its outstanding
8.125% Notes due March 15, 2012, of which $650,000,000 aggregate principal
amount is outstanding, and to exchange $1,000 principal amount of its 8.750%
Notes due March 15, 2032, that have been registered under the Securities Act,
pursuant to a Registration Statement of which the Prospectus is a part, for each
$1,000 principal amount of its outstanding 8.750% Notes due March 15, 2032, of
which

<PAGE>


$850,000,000 aggregate principal amount is outstanding, upon the terms and
subject to the conditions set forth in the Prospectus. The term "Expiration
Date" shall mean 5:00 p.m., New York City time, on May  -- , 2003, unless the
Company, in its sole discretion, extends the Exchange Offer, in which case the
term shall mean the latest date and time to which the Exchange Offer is extended
by the Company.



     For purposes of this Letter of Transmittal, the outstanding 8.125% Notes
due March 15, 2012 shall be defined as the "Outstanding 8.125% Notes" and the
outstanding 8.750% Notes due March 15, 2032 shall be defined as the "Outstanding
8.750% Notes," and the Outstanding 8.125% Notes and the Outstanding 8.750% Notes
shall be defined collectively as the "Outstanding Securities." The 8.125% Notes
due March 15, 2012, registered under the Securities Act shall be defined as the
"New 8.125% Notes "and the 8.750% Notes due March 15, 2032, registered under the
Securities Act shall be defined as the "New 8.750% Notes "and the New 8.125%
Notes and the New 8.750% Notes shall be defined collectively as the "New
Securities." All other capitalized terms used but not defined herein shall have
the same meanings given them in the Prospectus.



     This Letter of Transmittal is to be used either if (i) certificates
representing Outstanding Securities are to be physically delivered to the
Exchange Agent herewith by Holders, (ii) tender of Outstanding Securities is to
be made by book-entry transfer to an account maintained by the Exchange Agent at
The Depository Trust Company ("DTC"), pursuant to the procedures set forth in
"The Exchange Offer -- Procedures for Tendering Outstanding Securities" in the
Prospectus, by any financial institution that is a participant in DTC and whose
name appears on a security position listing as the owner of Outstanding
Securities, unless an Agent's Message (as defined below) is transmitted in lieu
hereof, or (iii) tender of Outstanding Securities is to be made according to the
guaranteed delivery procedures set forth in the Prospectus under "The Exchange
Offer -- Procedures for Tendering Outstanding Securities," unless an Agent's
Message is transmitted in lieu hereof. Delivery of this Letter of Transmittal
and any other required documents must be made to the Exchange Agent. DELIVERY OF
DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.


     The term "Holder" as used herein means any person in whose name Outstanding
Securities are registered on the books of the Company or any other person who
has obtained a properly completed bond power from the registered holder or any
person whose name appears on a security position listing provided by DTC as an
owner of Outstanding Securities.

     All Holders of Outstanding Securities who wish to tender their Outstanding
Securities must, prior to the Expiration Date: (1) complete, sign and deliver
this Letter of Transmittal, or a facsimile thereof, to the Exchange Agent, in
person or to the address set forth above, unless an Agent's Message is
transmitted in lieu hereof; and (2) tender (and not withdraw) his or her
Outstanding Securities or, if a tender of Outstanding Securities is to be made
by book-entry transfer to the account maintained by the Exchange Agent at DTC,
confirm such book-entry transfer (a "Book-Entry Confirmation"), in each case in
accordance with the procedures for tendering described in the instructions to
this Letter of Transmittal. Holders of Outstanding Securities whose certificates
are not immediately available, or who are unable to deliver their certificates
or Book-Entry Confirmation and all other documents required by this Letter of
Transmittal to be delivered to the Exchange Agent on or prior to the Expiration
Date, must tender their Outstanding Securities according to the guaranteed
delivery procedures set forth under the caption "The Exchange Offer - Procedures
for Tendering Outstanding Securities" in the Prospectus. (See Instruction 2.)

     Upon the terms and subject to the conditions of the Exchange Offer, the
acceptance for exchange of the Outstanding Securities validly tendered and not
withdrawn and the issuance of the New Securities will be made promptly following
the Expiration Date. For the purposes of the Exchange Offer, the Company shall
be deemed to have accepted for exchange validly tendered Outstanding Securities
when, as and if the Company has given oral (promptly confirmed in writing) or
written notice thereof to the Exchange Agent.

     The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer.

                                        2
<PAGE>

     PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY
BEFORE CHECKING ANY BOX BELOW. THE INSTRUCTIONS INCLUDED IN THIS LETTER OF
TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR
ADDITIONAL COPIES OF THE PROSPECTUS, THIS LETTER OF TRANSMITTAL AND THE NOTICE
OF GUARANTEED DELIVERY MAY BE DIRECTED TO THE EXCHANGE AGENT. (SEE INSTRUCTION
12 HEREIN.)

     HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR OUTSTANDING
SECURITIES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY AND COMPLY
WITH ALL OF ITS TERMS, UNLESS AN AGENT'S MESSAGE IS TRANSMITTED IN LIEU HEREOF.

     List below the Outstanding Securities to which this Letter of Transmittal
relates. If the space provided below is inadequate, the Certificate Numbers and
Principal Amounts should be listed on a separate signed schedule, attached
hereto. The minimum permitted tender is $1,000 in principal amount of 8.125%
Notes due March 15, 2012 or 8.750% Notes due March 15, 2032. All other tenders
must be in integral multiples of $1,000.

<Table>
<Caption>

                                   DESCRIPTION OF 8.125% NOTES DUE MARCH 15, 2012
                                                                      (A)
    NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)*              CERTIFICATE           AGGREGATE PRINCIPAL AMOUNT
               (PLEASE FILL IN, IF BLANK)                          NUMBER(S)*          TENDERED (IF LESS THAN ALL)**
<S>                                                       <C>                          <C>

                                                            TOTAL PRINCIPAL AMOUNT OF
                                                            OUTSTANDING 8.125% NOTES
                                                            TENDERED
</Table>

<Table>
<Caption>

                                   DESCRIPTION OF 8.750% NOTES DUE MARCH 15, 2032
                                                                      (A)
    NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)*              CERTIFICATE           AGGREGATE PRINCIPAL AMOUNT
               (PLEASE FILL IN, IF BLANK)                          NUMBER(S)*          TENDERED (IF LESS THAN ALL)**
<S>                                                       <C>                          <C>

                                                            TOTAL PRINCIPAL AMOUNT OF
                                                            OUTSTANDING 8.750% NOTES
                                                            TENDERED
</Table>

*  Need not be completed by book-entry holders.

** Need not be completed by Holders who wish to tender with respect to all
   Outstanding Securities listed. A Holder will be deemed to have tendered all
   of such Holders' Outstanding Securities if no lesser amount is indicated.
   Outstanding Securities tendered hereby must be in denominations of principal
   amount of $1,000 and integral multiples thereof.

                                        3
<PAGE>

              PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS

                       SPECIAL REGISTRATION INSTRUCTIONS
                        (SEE INSTRUCTIONS 4, 5, 6 AND 7)

     To be completed ONLY if certificates for Outstanding Securities in a
principal amount not tendered, or New Securities issued in exchange for
Outstanding Securities accepted for exchange, are to be issued in the name of
someone other than the undersigned, or if Outstanding Securities delivered by
book-entry transfer which are not accepted for exchange are to be returned by
credit to an account maintained at DTC other than the account indicated on the
following page.

Issue Outstanding Securities and/or New Securities certificate(s) to:

Name
     --------------------------------------------------------------------------
                                    (PLEASE PRINT)

- -------------------------------------------------------------------------------
                                 (PLEASE PRINT)

Address
        -----------------------------------------------------------------------

- -------------------------------------------------------------------------------
                              (INCLUDING ZIP CODE)

- -------------------------------------------------------------------------------
                 (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)

[ ] Credit unexchanged Outstanding Securities delivered by book-entry transfer
    to the DTC account set forth below:

- -------------------------------------------------------------------------------
                              (DTC ACCOUNT NUMBER)

                         SPECIAL DELIVERY INSTRUCTIONS
                        (SEE INSTRUCTIONS 4, 5, 6 AND 7)

     To be completed ONLY if certificates for Outstanding Securities in a
principal amount not tendered, or New Securities issued in exchange for
Outstanding Securities accepted for exchange, are to be delivered to someone
other than the undersigned.

Deliver Outstanding Securities and/or New Securities certificate(s) to:

Name
     --------------------------------------------------------------------------
                                    (PLEASE PRINT)

- -------------------------------------------------------------------------------
                                 (PLEASE PRINT)

Address
        -----------------------------------------------------------------------

- -------------------------------------------------------------------------------
                              (INCLUDING ZIP CODE)

- -------------------------------------------------------------------------------
                 (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)

                                        4
<PAGE>

     IMPORTANT:  THIS LETTER OF TRANSMITTAL OR A FACSIMILE HEREOF OR AN AGENT'S
MESSAGE IN LIEU HEREOF (TOGETHER WITH THE CERTIFICATE(S) FOR OUTSTANDING
SECURITIES OR A CONFIRMATION OF BOOK-ENTRY TRANSFER OF SUCH OUTSTANDING
SECURITIES AND ALL OTHER REQUIRED DOCUMENTS) OR, IF GUARANTEED DELIVERY
PROCEDURES ARE TO BE COMPLIED WITH, A NOTICE OF GUARANTEED DELIVERY, MUST BE
RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.

[ ]  CHECK HERE IF OUTSTANDING SECURITIES ARE BEING DELIVERED BY DTC TO AN
     ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE
     FOLLOWING:

     Name of Tendering Institution
     ---------------------------------------------------------------------------

     Account Number
                  --------------------------------------------------------------

     Transaction Code Number
                             ---------------------------------------------------

     Holders whose Outstanding Securities are not immediately available or who
cannot deliver their Outstanding Securities and all other documents required
hereby to the Exchange Agent on or prior to the Expiration Date may tender their
Outstanding Securities according to the guaranteed delivery procedures set forth
in the Prospectus under the caption "The Exchange Offer -- Procedures for
Tendering Outstanding Securities." (See Instruction 2.)

[ ]  CHECK HERE IF OUTSTANDING SECURITIES ARE BEING DELIVERED PURSUANT TO A
     NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
     COMPLETE THE FOLLOWING:

     Name(s) of Tendering
     Holder(s) -------------------------------------------------

     Date of Execution of Notice of Guaranteed
     Delivery --------------------------

     Name of Institution which Guaranteed
     Delivery -------------------------------

     Transaction Code Number
                           -----------------------------------------------------

[ ]  CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
     COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
     THERETO.

Name: --------------------------------------------------------------------------

Address: -----------------------------------------------------------------------

     If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of New
Securities. If the undersigned is a broker-dealer that will receive New
Securities for its own account in exchange for Outstanding Securities that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such New Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.

                                        5
<PAGE>

                    NOTE: SIGNATURES MUST BE PROVIDED BELOW
                PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

     Subject to the terms and conditions of the Exchange Offer, the undersigned
hereby tenders to The Williams Companies, Inc. (the "Company") the principal
amount of Outstanding Securities indicated above.

     Subject to and effective upon the acceptance for exchange of the principal
amount of Outstanding Securities tendered hereby in accordance with this Letter
of Transmittal, the undersigned sells, assigns and transfers to, or upon the
order of, the Company all right, title and interest in and to the Outstanding
Securities tendered hereby. The undersigned hereby irrevocably constitutes and
appoints the Exchange Agent as its true and lawful agent and attorney-in-fact
(with full knowledge that the Exchange Agent also acts as the agent of the
Company and as Trustee and Registrar under the indenture governing the New
Securities) with respect to the tendered Outstanding Securities with full power
of substitution (such power of attorney being deemed an irrevocable power
coupled with an interest), subject only to the right of withdrawal described in
the Prospectus, to (i) deliver certificates for such Outstanding Securities to
the Company or transfer ownership of such Outstanding Securities on the account
books maintained by DTC, together, in either such case, with all accompanying
evidences of transfer and authenticity to, or upon the order of, the Company and
(ii) present such Outstanding Securities for transfer on the books of the
Company and receive all benefits and otherwise exercise all rights of beneficial
ownership of such Outstanding Securities, all in accordance with the terms and
conditions of the Exchange Offer.

     The undersigned acknowledges that the Exchange Offer is being made in
reliance upon interpretive advice given by the staff of the Securities and
Exchange Commission to third parties in connection with transactions similar to
the Exchange Offer, so that the New Securities issued pursuant to the Exchange
Offer in exchange for the Outstanding Securities may be offered for resale,
resold and otherwise transferred by holders thereof (other than a broker-dealer
who purchased such Outstanding Securities directly from the Company for resale
pursuant to Rule 144A or any other available exemption under the Securities Act
or a person that is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Securities are acquired in the ordinary course of such holders' business and
such holders have no arrangement with any person to participate in the
distribution of such New Securities.

     The undersigned agrees that acceptance of any tendered Outstanding
Securities by the Company and the issuance of New Securities in exchange
therefor shall constitute performance in full by the Company of its obligations
under the registration rights agreement, (as referred to in the Prospectus) and
that, upon the issuance of the New Securities, the Company will have no further
obligations or liabilities thereunder (except in certain limited circumstances).

     The undersigned represents and warrants that (i) the New Securities
acquired pursuant to the Exchange Offer are being acquired in the ordinary
course of business of the person receiving New Securities (which shall be the
undersigned unless otherwise indicated in the box entitled "Special Delivery
Instructions" above) (the "Recipient"), (ii) neither the undersigned nor the
Recipient (if different) is engaged in, intends to engage in or has any
arrangement or understanding with any person to participate in the distribution
of such New Securities, and (iii) neither the undersigned nor the Recipient (if
different) is an "affiliate" of the Company as defined in Rule 405 under the
Securities Act. If the undersigned is not a broker-dealer, the undersigned
further represents that it is not engaged in, and does not intend to engage in,
a distribution of the New Securities. If the undersigned is a broker-dealer, the
undersigned further (x) represents that it acquired Outstanding Securities for
the undersigned's own account as a result of market-making activities or other
trading activities, (y) represents that it has not entered into any arrangement
or understanding with the Company or any "affiliate" of the Company (within the
meaning of Rule 405 under the Securities Act) to distribute the New Securities
to be received in the Exchange

                                        6
<PAGE>

Offer and (z) acknowledges that it will deliver a prospectus meeting the
requirements of the Securities Act (for which purposes delivery of the
Prospectus, as the same may be hereafter supplemented or amended, shall be
sufficient) in connection with any resale of New Securities received in the
Exchange Offer. Such a broker-dealer will not be deemed, solely by reason of
such acknowledgment and prospectus delivery, to admit that it is an
"underwriter" within the meaning of the Securities Act.

     The undersigned understands and agrees that the Company reserves the right
not to accept tendered Outstanding Securities from any tendering holder if the
Company determines, in its sole and absolute discretion, that certain conditions
precedent, as set forth in the Prospectus under the caption "The Exchange
Offer -- Conditions to the Exchange Offer," have not been satisfied.

     The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the
Outstanding Securities tendered hereby and to acquire New Securities issuable
upon the exchange of such tendered Outstanding Securities, and that, when the
same are accepted for exchange, the Company will acquire good and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim. The undersigned also warrants
that it will, upon request, execute and deliver any additional documents deemed
to be necessary or desirable by the Exchange Agent or the Company in order to
complete the exchange, assignment and transfer of tendered Outstanding
Securities or transfer of ownership of such Outstanding Securities on the
account books maintained by a book-entry transfer facility.

     The undersigned understands and acknowledges that the Company reserves the
right in its sole discretion to purchase or make offers for any Outstanding
Securities that remain outstanding subsequent to the Expiration Date or, as set
forth in the Prospectus under the caption "The Exchange Offer -- Procedures for
Tendering Outstanding Securities," to terminate the Exchange Offer and, to the
extent permitted by applicable law, purchase Outstanding Securities in the open
market, in privately negotiated transactions or otherwise. The terms of any such
purchases or offers could differ from the terms of the Exchange Offer.

     The undersigned understands that the Company may accept the undersigned's
tender by delivering oral (promptly confirmed in writing) or written notice of
acceptance to the Exchange Agent, at which time the undersigned's right to
withdraw such tender will terminate. For purposes of the Exchange Offer, the
Company shall be deemed to have accepted validly tendered Outstanding Securities
when, as and if the Company has given oral (which shall be promptly confirmed in
writing) or written notice thereof to the Exchange Agent.

     The undersigned understands that the first interest payment following the
Expiration Date will include unpaid interest on the Outstanding Securities
accrued through the date of issuance of the New Securities.

     The undersigned understands that tenders of Outstanding Securities pursuant
to the procedures described under the caption "The Exchange Offer -- Procedures
for Tendering Outstanding Securities" in the Prospectus and in the instructions
hereto will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Exchange Offer.

     The undersigned acknowledges that the Exchange Offer is subject to the more
detailed terms set forth in the Prospectus and, in case of any conflict between
the terms of the Prospectus and this Letter of Transmittal, the Prospectus shall
prevail.

     If any tendered Outstanding Securities are not accepted for exchange
pursuant to the Exchange Offer for any reason, certificates for any such
unaccepted Outstanding Securities will be returned (except as noted below with
respect to tenders through DTC), at the Company's cost and expense, to the
undersigned at the address shown below or at a different address as may be
indicated herein under "Special Delivery Instructions" as promptly as
practicable after the Expiration Date.

     All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the undersigned's heirs, personal
representatives, successors and assigns.

                                        7
<PAGE>

This tender may be withdrawn only in accordance with the procedures set forth in
this Letter of Transmittal.

     By acceptance of the Exchange Offer, each broker-dealer that receives New
Securities pursuant to the Exchange Offer hereby acknowledges and agrees that
upon the receipt of notice by the Company of the happening of any event which
makes any statement in the Prospectus untrue in any material respect or which
requires the making of any changes in the Prospectus in order to make the
statements therein not misleading (which notice the Company agrees to deliver
promptly to such broker-dealer), such broker-dealer will suspend use of the
Prospectus until the Company has amended or supplemented the Prospectus to
correct such misstatement or omission and has furnished copies of the amended or
supplemented prospectus to such broker-dealer.

     Unless otherwise indicated under "Special Registration Instructions,"
please issue the certificates representing the New Securities issued in exchange
for the Outstanding Securities accepted for exchange and return any certificates
for Outstanding Securities not tendered or not exchanged, in the name(s) of the
undersigned (or, in either such event in the case of Outstanding Securities
tendered by DTC, by credit to the account of the undersigned at DTC). Similarly,
unless otherwise indicated under "Special Delivery Instructions," please send
the certificates representing the New Securities issued in exchange for the
Outstanding Securities accepted for exchange and any certificates for
Outstanding Securities not tendered or not exchanged (and accompanying
documents, as appropriate) to the undersigned at the address shown below the
undersigned's signature(s), unless, in either event, tender is being made
through DTC. In the event that both "Special Registration Instructions" and
"Special Delivery Instructions" are completed, please issue the certificates
representing the New Securities issued in exchange for the Outstanding
Securities accepted for exchange in the name(s) of, and return any certificates
for Outstanding Securities not tendered or not exchanged to, the person(s) so
indicated. The undersigned understands that the Company has no obligations
pursuant to the "Special Registration Instructions" or "Special Delivery
Instructions" to transfer any Outstanding Securities from the name of the
registered Holder(s) thereof if the Company does not accept for exchange any of
the Outstanding Securities so tendered.

     Holders who wish to tender the Outstanding Securities and (i) whose
Outstanding Securities are not immediately available or (ii) who cannot deliver
their Outstanding Securities, this Letter of Transmittal or an Agent's Message
in lieu hereof or any other documents required hereby to the Exchange Agent
prior to the Expiration Date, may tender their Outstanding Securities according
to the guaranteed delivery procedures set forth in the Prospectus under the
caption "The Exchange Offer -- Procedures for Tendering Outstanding Securities."
(See Instruction 2.)

                                        8
<PAGE>

                        PLEASE SIGN HERE WHETHER OR NOT
          OUTSTANDING SECURITIES ARE BEING PHYSICALLY TENDERED HEREBY
                    AND WHETHER OR NOT TENDER IS TO BE MADE
                 PURSUANT TO THE GUARANTEED DELIVERY PROCEDURES

     This Letter of Transmittal must be signed by the registered holder(s) as
their name(s) appear on the Outstanding Securities or, if tendered by a
participant in DTC, exactly as such participant's name appears on a security
listing as the owner of Outstanding Securities, or by person(s) authorized to
become registered holder(s) by a properly completed bond power from the
registered holder(s), a copy of which must be transmitted with this Letter of
Transmittal. If Outstanding Securities to which this Letter of Transmittal
relate are held of record by two or more joint holders, then all such holders
must sign this Letter of Transmittal. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, then such person must
(i) set forth his or her full title below and (ii) unless waived by the Company,
submit evidence satisfactory to the Company of such person's authority so to
act. (See Instruction 4.)

<Table>
<S>                                              <C>
X
- ---------------------------------------------    ---------------------------------------------
                                                                     DATE
X
- ---------------------------------------------    ---------------------------------------------
  SIGNATURE(S) OF HOLDER(S) OR AUTHORIZED                            DATE
                SIGNATORY

Name(s):                                         Address:
        ------------------------------------             -------------------------------------

        ------------------------------------             -------------------------------------
                   (PLEASE PRINT)                                (INCLUDING ZIP CODE)

Capacity:                                        Area Code and Telephone Number:
          ----------------------------------                                    --------------
Social Security No.:
                    ------------------------
</Table>

                                        9
<PAGE>

                   PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN

                    SIGNATURE GUARANTEE (SEE INSTRUCTION 1)
        CERTAIN SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION

- --------------------------------------------------------------------------------
             (Name Of Eligible Institution Guaranteeing Signatures)

- --------------------------------------------------------------------------------
  (Address (Including Zip Code) And Telephone Number (Including Area Code) Of
                                     Firm)

- --------------------------------------------------------------------------------
                             (Authorized Signature)

- --------------------------------------------------------------------------------
                                 (Printed Name)

- --------------------------------------------------------------------------------
                                    (Title)

Date:
- ---------------------------

                                        10
<PAGE>

                                  INSTRUCTIONS

         FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

     1. Guarantee of Signatures.  Signatures on this Letter of Transmittal need
not be guaranteed if (a) this Letter of Transmittal is signed by the registered
holder(s) of the Outstanding Securities tendered herewith and such holder(s)
have not completed the box set forth herein entitled "Special Registration
Instructions" or the box entitled "Special Delivery Instructions" or (b) such
Outstanding Securities are tendered for the account of an Eligible Institution.
(See Instruction 6.) Otherwise, all signatures on this Letter of Transmittal or
a notice of withdrawal, as the case may be, must be guaranteed by a member firm
of a registered national securities exchange or of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an office
or correspondent in the United States (an "Eligible Institution"). All
signatures on bond powers and endorsements on certificates must also be
guaranteed by an Eligible Institution.

     2. Delivery of this Letter of Transmittal and Outstanding
Securities.  Certificates for all physically delivered Outstanding Securities or
confirmation of any book-entry transfer to the Exchange Agent at DTC of
Outstanding Securities tendered by book-entry transfer, as well as, in each case
(including cases where tender is affected by book-entry transfer), a properly
completed and duly executed copy of this Letter of Transmittal or facsimile
hereof or an Agent's Message in lieu thereof and any other documents required by
this Letter of Transmittal must be received by the Exchange Agent at its address
set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date.

     The method of delivery of the tendered Outstanding Securities, this Letter
of Transmittal and all other required documents to the Exchange Agent is at the
election and risk of the Holder and the delivery will be deemed made only when
actually received by the Exchange Agent. If Outstanding Securities are sent by
mail, registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery. No Letter of Transmittal or Outstanding Securities should be sent to
the Company.

     The Exchange Agent will make a request to establish an account with respect
to the Outstanding Securities at DTC for purposes of the Exchange Offer within
two business days after receipt of this Letter of Transmittal, and any financial
institution that is a participant in DTC may make book-entry delivery of
Outstanding Securities by causing DTC to transfer such Outstanding Securities
into the Exchange Agent's account at DTC in accordance with DTC's procedures for
transfer. However, although delivery of Outstanding Securities may be effected
through book-entry transfer at DTC, the Letter of Transmittal, with any required
signature guarantees or an Agent's Message (as defined below) in connection with
a book-entry transfer and any other required documents, must, in any case, be
transmitted to and received by the Exchange Agent at the address specified on
the cover page of the Letter of Transmittal on or prior to the Expiration Date
or the guaranteed delivery procedures described below must be complied with.

     A Holder may tender Outstanding Securities that are held through DTC by
transmitting its acceptance through DTC's Automatic Tender Offer Program, for
which the transaction will be eligible, and DTC will then edit and verify the
acceptance and send an Agent's Message to the Exchange Agent for its acceptance.
The term "Agent's Message" means a message transmitted by DTC to, and received
by, the Exchange Agent and forming part of the Book-Entry Confirmation, which
states that DTC has received an express acknowledgment from each participant in
DTC tendering the Outstanding Securities and that such participant has received
the Letter of Transmittal and agrees to be bound by the terms of the Letter of
Transmittal and the Company may enforce such agreement against such participant.

     Holders who wish to tender their Outstanding Securities and (i) whose
Outstanding Securities are not immediately available, or (ii) who cannot deliver
their Outstanding Securities, this Letter of Transmittal or any other documents
required hereby to the Exchange Agent prior to the Expiration Date or comply
with book-entry transfer procedures on a timely basis must tender their
Outstanding Securities according to the guaranteed delivery procedures set forth
in the Prospectus. See "Exchange Offer -- Procedures for Tendering Outstanding
Securities." Pursuant to such procedures: (i) such tender must be made by or

                                        11
<PAGE>


through an Eligible Institution; (ii) prior to the Expiration Date, the Exchange
Agent must have received from the Eligible Institution a properly completed and
duly executed Notice of Guaranteed Delivery (by facsimile transmission,
overnight courier, mail or hand delivery or an agent's message thereof) setting
forth the name and address of the Holder of the Outstanding Securities, the
certificate number or numbers of such Outstanding Securities and the principal
amount of Outstanding Securities tendered, stating that the tender is being made
thereby and guaranteeing that, within three New York Stock Exchange trading days
after the Expiration Date, this Letter of Transmittal (or facsimile hereof or an
Agent's Message in lieu hereof) together with the certificate(s) representing
the Outstanding Securities and any other required documents will be deposited by
the Eligible Institution with the Exchange Agent; and (iii) such properly
completed and executed Letter of Transmittal (or facsimile hereof or an Agent's
Message in lieu hereof), as well as all other documents required by this Letter
of Transmittal and the certificate(s) representing all tendered Outstanding
Securities in proper form for transfer (or a confirmation of book-entry transfer
of such Outstanding Securities into the Exchange Agent's account at DTC), must
be received by the Exchange Agent within three New York Stock Exchange trading
days after the Expiration Date, all in the manner provided in the Prospectus
under the caption "The Exchange Offer -- Procedures for Tendering Outstanding
Securities." Any Holder who wishes to tender his Outstanding Securities pursuant
to the guaranteed delivery procedures described above must ensure that the
Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00 p.m.,
New York City time, on the Expiration Date. Upon request to the Exchange Agent,
a Notice of Guaranteed Delivery will be sent to Holders who wish to tender their
Outstanding Securities according to the guaranteed delivery procedures set forth
above.


     All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Outstanding Securities, and withdrawal of
tendered Outstanding Securities will be determined by the Company in its sole
discretion, which determination will be final and binding. All tendering
holders, by execution of this Letter of Transmittal (or facsimile thereof or an
Agent's Message in lieu hereof), shall waive any right to receive notice of the
acceptance of the Outstanding Securities for exchange. The Company reserves the
absolute right to reject any and all Outstanding Securities not properly
tendered or any Outstanding Securities the Company's acceptance of which would,
in the opinion of counsel for the Company, be unlawful. The Company also
reserves the right to waive any irregularities or conditions of tender as to
particular Outstanding Securities. The Company's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in this Letter of
Transmittal) shall be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Outstanding Securities
must be cured within such time as the Company shall determine. Neither the
Company, the Exchange Agent nor any other person shall be under any duty to give
notification of defects or irregularities with respect to tenders of Outstanding
Securities, nor shall any of them incur any liability for failure to give such
notification. Tenders of Outstanding Securities will not be deemed to have been
made until such defects or irregularities have been cured to the Company's
satisfaction or waived. Any Outstanding Securities received by the Exchange
Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering Holders pursuant to the Company's determination, unless
otherwise provided in this Letter of Transmittal as soon as practicable
following the Expiration Date. The Exchange Agent has no fiduciary duties to the
Holders with respect to the Exchange Offer and is acting solely on the basis of
directions of the Company.

     3. Inadequate Space.  If the space provided is inadequate, the certificate
numbers and/or the number of Outstanding Securities should be listed on a
separate signed schedule attached hereto.

     4. Tender by Holder.  Only a Holder of Outstanding Securities may tender
such Outstanding Securities in the Exchange Offer. Any beneficial owner of
Outstanding Securities who is not the registered Holder and who wishes to tender
should arrange with such registered holder to execute and deliver this Letter of
Transmittal on such beneficial owner's behalf or must, prior to completing and
executing this Letter of Transmittal and delivering his Outstanding Securities,
either make appropriate arrangements to register ownership of the Outstanding
Securities in such beneficial owner's name or obtain a properly

                                        12
<PAGE>

completed bond power from the registered holder or properly endorsed
certificates representing such Outstanding Securities.

     5. Partial Tenders; Withdrawals.  Tenders of Outstanding Securities will be
accepted only in integral multiples of $1,000. If less than the entire principal
amount of any Outstanding Securities is tendered, the tendering Holder should
fill in the principal amount tendered in the third column of the box entitled
"Description of 8.125% Notes due March 15, 2012" and/or "Description of 8.750%
Notes due March 15, 2032" above. The entire principal amount of any Outstanding
Securities delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated. If the entire principal amount of all Outstanding
Securities is not tendered, then Outstanding Securities for the principal amount
of Outstanding Securities not tendered and a certificate or certificates
representing New Securities issued in exchange for any Outstanding Securities
accepted will be sent to the Holder at his or her registered address, unless a
different address is provided in the "Special Delivery Instructions" box above
on this Letter of Transmittal or unless tender is made through DTC, promptly
after the Outstanding Securities are accepted for exchange.

     Except as otherwise provided herein, tenders of Outstanding Securities may
be withdrawn at any time prior to 5:00 p.m., New York City time, on the
Expiration Date. To withdraw a tender of Outstanding Securities in the Exchange
Offer, a written or facsimile transmission notice of withdrawal must be received
by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New
York City time, on the Expiration Date. Any such notice of withdrawal must (i)
specify the name of the person having deposited the Outstanding Securities to be
withdrawn (the "Depositor"), (ii) identify the Outstanding Securities to be
withdrawn (including the certificate number or numbers and principal amount of
such Outstanding Securities, or, in the case of Outstanding Securities
transferred by book-entry transfer the name and number of the account at DTC to
be credited), (iii) be signed by the Depositor in the same manner as the
original signature on the Letter of Transmittal by which such Outstanding
Securities were tendered (including any required signature guarantees) or be
accompanied by documents of transfer sufficient to have the Registrar with
respect to the Outstanding Securities register the transfer of such Outstanding
Securities into the name of the person withdrawing the tender and (iv) specify
the name in which any such Outstanding Securities are to be registered, if
different from that of the Depositor. All questions as to the validity, form and
eligibility (including time of receipt) of such notices will be determined by
the Company, whose determination shall be final and binding on all parties. Any
Outstanding Securities so withdrawn will be deemed not to have been validly
tendered for purposes of the Exchange Offer and no New Securities will be issued
with respect thereto unless the Outstanding Securities so withdrawn are validly
retendered. Any Outstanding Securities which have been tendered but which are
not accepted for exchange by the Company will be returned to the Holder thereof
without cost to such Holder as soon as practicable after withdrawal, rejection
of tender or termination of the Exchange Offer. Properly withdrawn Outstanding
Securities may be retendered by following one of the procedures described in the
Prospectus under "The Exchange Offer -- Procedures for Tendering Outstanding
Securities" at any time prior to the Expiration Date.

     6. Signatures on the Letter of Transmittal; Bond Powers and
Endorsements.  If this Letter of Transmittal (or facsimile hereof) is signed by
the registered holder(s) of the Outstanding Securities tendered hereby, the
signature must correspond with the name(s) as written on the face of the
Outstanding Security without alteration, enlargement or any change whatsoever.

     If any of the Outstanding Securities tendered hereby are owned of record by
two or more joint owners, all such owners must sign this Letter of Transmittal.

     If a number of Outstanding Securities registered in different names are
tendered, it will be necessary to complete, sign and submit as many copies of
this Letter of Transmittal as there are different registrations of Outstanding
Securities.

     If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder or Holders (which term, for the purposes described herein,
shall include a person whose name appears on a DTC security listing as the owner
of the Outstanding Securities) of Outstanding Securities tendered and the
                                        13
<PAGE>

certificate or certificates for New Securities issued in exchange therefor is to
be issued (or any untendered principal amount of Outstanding Securities to be
reissued) to the registered Holder, then such Holder need not and should not
endorse any tendered Outstanding Securities, nor provide a separate bond power.
In any other case, such Holder must either properly endorse the Outstanding
Securities tendered or transmit a properly completed separate bond power with
this Letter of Transmittal with the signatures on the endorsement or bond power
guaranteed by an Eligible Institution.

     If this Letter of Transmittal (or facsimile hereof) is signed by a person
other than the registered Holder or Holders of any Outstanding Securities
listed, such Outstanding Securities must be endorsed or accompanied by
appropriate bond powers in each case signed as the name of the registered Holder
or Holders appears on the Outstanding Securities.

     If this Letter of Transmittal (or facsimile hereof) or any Outstanding
Securities or bond powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, or officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so indicate when
signing, and unless waived by the Company, evidence satisfactory to the Company
of their authority so to act must be submitted with this Letter of Transmittal.

     Endorsements on Outstanding Securities or signatures on bond powers
required by this Instruction 6 must be guaranteed by an Eligible Institution.

     7. Special Registration and Delivery Instructions.  Tendering Holders
should indicate, in the applicable box or boxes, the name and address to which
New Securities or substitute Outstanding Securities for principal amounts not
tendered or not accepted for exchange are to be issued or sent, if different
from the name and address of the person signing this Letter of Transmittal. In
the case of issuance in a different name, the taxpayer identification or social
security number of the person named must also be indicated.

     8. Backup Federal Income Tax Withholding and Substitute Form W-9.  Under
the federal income tax laws, payments that may be made by the Company on account
of New Securities issued pursuant to the Exchange Offer may be subject to backup
withholding. In order to avoid such backup withholding, each tendering holder
should complete and sign the Substitute Form W-9 included in this Letter of
Transmittal and either (a) provide the correct taxpayer identification number
("TIN") and certify, under penalties of perjury, that the TIN provided is
correct and that (i) the holder has not been notified by the Internal Revenue
Service (the "IRS") that the holder is subject to backup withholding as a result
of failure to report all interest or dividends or (ii) the IRS has notified the
holder that the holder is no longer subject to backup withholding; or (b)
provide an adequate basis for exemption. If the tendering holder has not been
issued a TIN and has applied for one, or intends to apply for one in the near
future, such holder should write "Applied For" in the space provided for the TIN
in Part I of the Substitute Form W-9, sign and date the Substitute Form W-9 and
sign the Certificate of Payee Awaiting Taxpayer Identification Number. If
"Applied For" is written in Part I, the Company (or the Paying Agent under the
indenture governing the New Securities) shall retain a portion of payments made
to the tendering holder during the sixty-day period following the date of the
Substitute Form W-9. If the Holder furnishes the Exchange Agent or the Company
with its TIN within sixty days after the date of the Substitute Form W-9, the
Company (or the Paying Agent) shall remit such amounts retained during the
sixty-day period to the Holder and no further amounts shall be retained or
withheld from payments made to the Holder thereafter. If, however, the Holder
has not provided the Exchange Agent or the Company with its TIN within such
sixty-day period, the Company (or the Paying Agent) shall remit such previously
retained amounts to the IRS as backup withholding. In general, if a Holder is an
individual, the TIN is the Social Security number of such individual. If the
Exchange Agent or the Company are not provided with the correct TIN, the Holder
may be subject to a $50 penalty imposed by the IRS. Certain Holders (including,
among others, certain corporations and certain foreign individuals) are not
subject to these backup withholding and reporting requirements. In order for a
foreign individual to qualify as an exempt recipient, such Holder must submit a
statement (generally, IRS Form W-8), signed under penalties of perjury,
attesting to that individual's exempt status. Such statements can be obtained
from the Exchange Agent.

                                        14
<PAGE>

For further information concerning backup withholding and instructions for
completing the Substitute Form W-9 (including how to obtain a taxpayer
identification number if you do not have one and how to complete the Substitute
Form W-9 if Outstanding Securities are registered in more than one name),
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.

     Failure to complete the Substitute Form W-9 will not, by itself, cause
Outstanding Securities to be deemed invalidly tendered, but may require the
Company (or the Paying Agent) to withhold a portion of the amount of any
payments made on account of the New Securities. Backup withholding is not an
additional federal income tax. Rather, the federal income tax liability of a
person subject to backup withholding will be reduced by the amount of tax
withheld. If backup withholding results in an overpayment of taxes, a refund may
be obtained from the IRS.

     9. Transfer Taxes.  The Company will pay all transfer taxes, if any,
applicable to the exchange of Outstanding Securities pursuant to the Exchange
Offer. If, however, certificates representing New Securities or Outstanding
Securities for principal amounts not tendered or accepted for exchange are to be
delivered to, or are to be registered in the name of, any person other than the
registered holder of the Outstanding Securities tendered hereby, or if tendered
Outstanding Securities are registered in the name of a person other than the
person signing this Letter of Transmittal, or if a transfer tax is imposed for
any reason other than the exchange of Outstanding Securities pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed on
the registered holder or on any other persons) will be payable by the tendering
Holder. If satisfactory evidence of payment of such taxes or exemption therefrom
is not submitted with this Letter of Transmittal, the amount of such transfer
taxes will be billed directly to such tendering Holder. See the Prospectus under
"The Exchange Offer -- Transfer Taxes."

     Except as provided in this Instruction 9, it will not be necessary for
transfer tax stamps to be affixed to the Outstanding Securities listed in this
Letter of Transmittal.

     10. Waiver of Conditions.  The Company reserves the right, in its sole
discretion, to amend, waive or modify specified conditions in the Exchange Offer
in the case of any Outstanding Securities tendered.

     11. Mutilated, Lost, Stolen or Destroyed Outstanding Securities.  Any
tendering Holder whose Outstanding Securities have been mutilated, lost, stolen
or destroyed should contact the Exchange Agent at the address indicated herein
for further instructions.

     12. Requests for Assistance or Additional Copies.  Requests for assistance
and requests for additional copies of the Prospectus or this Letter of
Transmittal may be directed to the Exchange Agent at the address specified in
the Prospectus. Holders may also contact their broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Exchange Offer.

                           IMPORTANT TAX INFORMATION

     Under federal income tax laws, a Holder whose tendered Outstanding
Securities are accepted for payment is required to provide the Exchange Agent
(as payer) with such Holder's correct TIN on Substitute Form W-9 below or
otherwise establish a basis for exemption from backup withholding. If such
Holder is an individual, the TIN is his social security number. If the Exchange
Agent is not provided with the correct TIN, a $50 penalty may be imposed by the
IRS, and payments made pursuant to the Exchange Offer may be subject to backup
withholding.

     Certain Holders (including, among others, certain corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt Holders should indicate their exempt status on Substitute
Form W-9. A foreign person may qualify as an exempt recipient by submitting to
the Exchange Agent a properly completed IRS Form W-8, signed under penalties of
perjury, attesting to that Holder's exempt status. A Form W-8 can be obtained
from the Exchange Agent. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional
instructions.

                                        15
<PAGE>

     If backup withholding applies, the Exchange Agent is required to withhold a
portion of any payments made to the Holder or other payee. Backup withholding is
not an additional federal income tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the IRS.

PURPOSE OF SUBSTITUTE FORM W-9

     To prevent backup withholding on payments made with respect to the Exchange
Offer, the Holder is required to provide the Exchange Agent with either: (i) the
Holder's correct TIN by completing the Substitute Form W-9 below, certifying
that the TIN provided on Substitute Form W-9 is correct (or that such Holder is
awaiting a TIN) and that (A) the Holder has not been notified by the IRS that
the Holder is subject to backup withholding as a result of failure to report all
interest or dividends or (B) the IRS has notified the Holder that the Holder is
no longer subject to backup withholding or (ii) an adequate basis for exemption.

WHAT NUMBER TO GIVE THE EXCHANGE AGENT

     The Holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the registered Holder of
the Outstanding Securities. If the Outstanding Securities are held in more than
one name or are held not in the name of the actual owner, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional guidance on which number to report.

                                        16
<PAGE>

                    TO BE COMPLETED BY ALL TENDERING HOLDERS
                              (SEE INSTRUCTION 8)

                                                      Department of the Treasury
                                                        INTERNAL REVENUE SERVICE

<Table>
<S>                      <C>                                                 <C>
- --------------------------------------------------------------------------------------------------------------------
                                     PAYER'S NAME: THE WILLIAMS COMPANIES, INC.
- --------------------------------------------------------------------------------------------------------------------
 SUBSTITUTE               PART I -- Taxpayer Identification Number (TIN)
                                                                                     Social Security Number
 FORM W-9                 Enter your TIN in the appropriate box. For          ------------------------------------
 DEPARTMENT OF            individuals, this is your social security number                     or
 THE TREASURY             (SSN). For sole proprietors, see the instructions      Employer Identification Number
 INTERNAL REVENUE         in the enclosed Guidelines. For other entities, it  ------------------------------------
 SERVICE                  is your employer identification number (EIN). If
                          you do not have a number, see How to Get a TIN in
 REQUEST FOR TAXPAYER     the enclosed Guidelines.
 IDENTIFICATION NUMBER
 AND CERTIFICATION        NOTE: If the account is in more than one name, see
                          the chart on page 2 of the enclosed Guidelines for
                          instructions on whose number to enter.
                         ------------------------------------------------------------------------------------------
                          PART II -- For Payees Exempt from Backup Withholding
                          (See Part II instructions in the enclosed Guidelines)
- --------------------------------------------------------------------------------------------------------------------
 PART III -- Certification -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
 (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be
     issued to me), and
 (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been
     notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure
     to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup
     withholding.
 Signature ------------------------------                                                  Date --------------------
- --------------------------------------------------------------------------------------------------------------------
</Table>

CERTIFICATION INSTRUCTIONS.--You must cross out item 2 above if you have been
notified by the IRS that you are currently subject to backup withholding because
you have failed to report all interest or dividends on your tax return. For real
estate transactions, item 2 does not apply. For mortgage interest paid, the
acquisition or abandonment of secured property, cancellation of debt,
contributions to an individual retirement arrangement (IRA), and generally
payments other than interest and dividends, you are not required to sign the
Certification, but you must provide your correct TIN.

         CERTIFICATION OF PAYEE AWAITING TAXPAYER IDENTIFICATION NUMBER

     I certify, under penalties of perjury, that a Taxpayer Identification
Number has not been issued to me, and that I mailed or delivered an application
to receive a Taxpayer Identification Number to the appropriate Internal Revenue
Service Center or Social Security Administration Office (or I intend to mail or
deliver an application in the near future). I understand that if I do not
provide a Taxpayer Identification Number to the payer, a portion of all payments
made to me on account of the New Notes shall be retained until I provide a
Taxpayer Identification Number to the payer and that, if I do not provide my
Taxpayer Identification Number within sixty days, such retained amounts shall be
remitted to the Internal Revenue Service as backup withholding and a portion of
all reportable payments made to me thereafter will be withheld and remitted to
the Internal Revenue Service until I provide a Taxpayer Identification Number.

<Table>
<S>                                             <C>
- -----------------------------------------       -----------------------------------------
                SIGNATURE                                         DATE
</Table>

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
      OF A PORTION OF ANY PAYMENTS MADE TO YOU ON ACCOUNT OF THE NEW NOTES.
      PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
      IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

                                        17

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>8
<FILENAME>d04378a2exv99w2.txt
<DESCRIPTION>FORM OF NOTICE OF GUARANTEED DELIVERY
<TEXT>
<PAGE>

                                                                    EXHIBIT 99.2

                         NOTICE OF GUARANTEED DELIVERY

                                      FOR
                        8.125% NOTES DUE MARCH 15, 2012
                                      AND
                        8.750% NOTES DUE MARCH 15, 2032
                                       OF
                          THE WILLIAMS COMPANIES, INC.


     As set forth in the Prospectus dated April --, 2003 (the "Prospectus") of
The Williams Companies, Inc. (the "Company") and in the Letter of Transmittal
(the "Letter of Transmittal"), this form or a form substantially equivalent to
this form must be used to accept the Exchange Offer (as defined below) if the
certificates for the outstanding 8.125% Notes due March 15, 2012 and 8.750%
Notes due March 15, 2032 (collectively, the "Outstanding Securities") of the
Company and all other documents required by the Letter of Transmittal cannot be
delivered to the Exchange Agent (as defined below) by the expiration of the
Exchange Offer or compliance with book-entry transfer procedures cannot be
effected on a timely basis. Such form may be delivered by hand or transmitted by
facsimile transmission, telex or mail to the Exchange Agent no later than the
Expiration Date (as defined below), and must include a guarantee by an Eligible
Institution (as defined in the Letter of Transmittal) as set forth below.


                                      To:

                   JPMORGAN CHASE BANK (THE "EXCHANGE AGENT")


                         By Mail or Overnight Courier:

                            Corporate Trust Services


                         2001 Bryan Street -- 9th floor


                              Dallas, Texas 75201


                             Attention: Frank Ivins


                               By Hand Delivery:

                             GIS Unit Trust Window


                         4 New York Plaza -- 1st floor


                            New York, New York 10004


                             Attention: Frank Ivins



                           By Facsimile Transmission:


                                 (214) 468-6494


                 For Information or Confirmation by Telephone:

                                 (214) 468-6464


       THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,

          NEW YORK CITY TIME, ON MAY --, 2003 (THE "EXPIRATION DATE")

        UNLESS THE OFFER IS EXTENDED. TENDERS MAY BE WITHDRAWN PRIOR TO
             5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

     DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY. THE METHOD OF DELIVERY OF ALL DOCUMENTS,
INCLUDING CERTIFICATES, IS AT THE RISK OF THE HOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
THE INSTRUCTIONS ACCOMPANYING THE LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY
BEFORE THIS NOTICE OF GUARANTEED DELIVERY IS COMPLETED.

     This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an Eligible Institution under the instructions thereto, such
signatures must appear in the applicable space provided on the Letter of
Transmittal for Guarantee of Signature(s).
<PAGE>

Ladies and Gentlemen:

     The undersigned acknowledges receipt of the Prospectus and the related
Letter of Transmittal which describes the Company's offer (the "Exchange Offer")
to exchange $1,000 in principal amount of 8.125% Notes due March 15, 2012 and
$1,000 in principal amount of 8.750% Notes due March 15, 2032 (collectively, the
"New Securities") for each $1,000 in principal amount of Outstanding Securities.

     The undersigned hereby tenders to the Company the aggregate principal
amount of Outstanding Securities set forth below on the terms and conditions set
forth in the Prospectus and the related Letter of Transmittal pursuant to the
guaranteed delivery procedure set forth in the "The Exchange Offer -- Procedures
for Tendering Outstanding Securities" section of the Prospectus and the
accompanying Letter of Transmittal.

     The undersigned understands that no withdrawal of a tender of Outstanding
Securities may be made on or after the Expiration Date of the Exchange Offer.
The undersigned understands that for a withdrawal of a tender of Outstanding
Securities to be effective, a written notice of withdrawal that complies with
the requirements of the Exchange Offer must be timely received by the Exchange
Agent at its address specified on the cover of this Notice of Guaranteed
Delivery prior to the Expiration Date.

     The undersigned understands that the exchange of Outstanding Securities for
New Securities pursuant to the Exchange Offer will be made only after timely
receipt by the Exchange Agent of (i) such Outstanding Securities (or Book-Entry
Confirmation of the transfer of such Outstanding Securities into the Exchange
Agent's account at The Depository Trust Company ("DTC")) and (ii) a Letter of
Transmittal (or facsimile thereof) with respect to such Outstanding Securities,
properly completed and duly executed, with any required signature guarantees,
this Notice of Guaranteed Delivery and any other documents required by the
Letter of Transmittal or a properly transmitted Agent's Message. The term
"Agent's Message" means a message transmitted by DTC to, and received by, the
Exchange Agent and forming part of the confirmation of a book-entry transfer,
which states that DTC has received an express acknowledgment from each
participant in DTC tendering Outstanding Securities and that such participant
has received the Letter of Transmittal and agrees to be bound by the terms of
the Letter of Transmittal and the Company may enforce such agreement against
such participant.

     All authority conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall not be affected by, and shall survive, the death or
incapacity of the undersigned, and every obligation of the undersigned under
this Notice of Guaranteed Delivery shall be binding upon the heirs, executors,
administrators, trustees in bankruptcy, personal and legal representatives,
successors and assigns of the undersigned.

                                        2
<PAGE>

                            PLEASE SIGN AND COMPLETE

Signature(s) of Registered Owner(s) or
Authorized Signatory: ----------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

Principal Amount of Outstanding Securities
Tendered: ----------------------------------------------------------------------

Certificate No(s) of Outstanding Securities (if
available): --------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Date: --------------------------------------------------------------------------
Name(s) of Registered Holder(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Address: -----------------------------------------------------------------------
- --------------------------------------------------------------------------------

Area Code and
Telephone No.: -----------------------------------------------------------------

If Outstanding Securities will be delivered by book-entry transfer at The
Depository Trust Company, insert:

Depository Account
No.: ------------------------------------------------------------------

     This Notice of Guaranteed Delivery must be signed by the registered
Holder(s) of Outstanding Securities exactly as its (their) name(s) appear on
certificates for Outstanding Securities or on a security position listing as the
owner of Outstanding Securities, or by person(s) authorized to become registered
Holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information.

                      PLEASE PRINT NAME(S) AND ADDRESS(ES)

<Table>
<S>               <C>
Name(s):
                  ------------------------------------------------------------

                  ------------------------------------------------------------

Capacity:
                  ------------------------------------------------------------

                  ------------------------------------------------------------

Address(es):
                  ------------------------------------------------------------

                  ------------------------------------------------------------

                  ------------------------------------------------------------
</Table>

     DO NOT SEND OUTSTANDING SECURITIES WITH THIS FORM. OUTSTANDING SECURITIES
SHOULD BE SENT TO THE EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY
EXECUTED LETTER OF TRANSMITTAL.

                                        3
<PAGE>

                                   GUARANTEE
                    (NOT TO BE USED FOR SIGNATURE GUARANTEE)

     The undersigned, a member firm of a registered national securities exchange
or of the National Association of Securities Dealers, Inc. or a commercial bank
or trust company having an office or a correspondent in the United States, or
otherwise an "eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended, hereby (a) represents
that each holder of Outstanding Securities on whose behalf this tender is being
made "own(s)" the Outstanding Securities covered hereby within the meaning of
Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), (b) represents that such tender of Outstanding Securities complies with
Rule 14e-4 of the Exchange Act and (c) guarantees that, within three New York
Stock Exchange trading days from the expiration date of the Exchange Offer, a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof or an Agent's Message in lieu thereof), together with certificates
representing the Outstanding Securities covered hereby in proper form for
transfer (or confirmation of the book-entry transfer of such Outstanding
Securities into the Exchange Agent's account at The Depository Trust Company,
pursuant to the procedure for book-entry transfer set forth in the Prospectus)
and required documents will be deposited by the undersigned with the Exchange
Agent.

     The undersigned acknowledges that it must deliver the Letter of Transmittal
or an Agent's Message (as defined in the Letter of Transmittal) in lieu thereof
and Outstanding Securities tendered hereby to the Exchange Agent within the time
period set forth above and that failure to do so could result in financial loss
to the undersigned.

<Table>
<S>                                                   <C>

Name of Firm:                                         -------------------------------------
             --------------------------                        AUTHORIZED SIGNATURE

Address:                                              Name:
        -------------------------------                     -------------------------------

- ---------------------------------------               Title:
                                                             ------------------------------
Area Code and Telephone No.:
                            -----------               Date:
                                                            -------------------------------
</Table>












                                        4

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>9
<FILENAME>d04378a2exv99w3.txt
<DESCRIPTION>FORM OF LETTER TO REGISTERED HOLDERS
<TEXT>
<PAGE>

                                                                    EXHIBIT 99.3

               LETTER TO REGISTERED HOLDERS AND DTC PARTICIPANTS
                                   REGARDING

                               OFFER TO EXCHANGE

                        8.125% NOTES DUE MARCH 15, 2012
                          FOR ANY AND ALL OUTSTANDING
                        8.125% NOTES DUE MARCH 15, 2012

                                      AND

                        8.750% NOTES DUE MARCH 15, 2032
                          FOR ANY AND ALL OUTSTANDING
                        8.750% NOTES DUE MARCH 15, 2032

                                       OF

                          THE WILLIAMS COMPANIES, INC.


THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
  TIME, ON MAY --, 2003 UNLESS THE OFFER IS EXTENDED. TENDERS MAY BE WITHDRAWN
        PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.


To Registered Holders and The Depository Trust Company Participants:


     The Williams Companies, Inc., a Delaware corporation (the "Company"), is
offering to exchange, upon the terms and subject to the conditions set forth in
the Prospectus dated April --, 2003 (the "Prospectus") and the accompanying
Letter of Transmittal (which together with any amendments or supplements thereto
collectively constitute the "Exchange Offer"), up to $650 million aggregate
principal amount of 8.125% Notes due March 15, 2012 (the "New 8.125% Notes"),
for up to a like aggregate principal amount of its 8.125% Notes due March 15,
2012 (the "Outstanding 8.125% Notes"), and up to $850 million aggregate
principal amount of 8.750% Notes due March 15, 2032 (the "New 8.750% Notes", and
together with the New 8.125% Notes, the "New Securities"), for up to a like
aggregate principal amount of its 8.750% Notes due March 15, 2032 (the
"Outstanding 8.750% Notes", and together with the Outstanding 8.125% Notes, the
"Outstanding Securities"). As set forth in the Prospectus, the terms of the New
Securities are identical in all material respects to the Outstanding Securities
except that the New Securities have been registered under the Securities Act of
1933, as amended and therefore, will not be subject to certain restrictions on
their transfer and will not contain certain provisions providing for an increase
in the interest rate paid thereon.


     Enclosed herewith are copies of the following documents:


          1. Prospectus dated April --, 2003


          2. Letter of Transmittal for your use and for the information of your
     clients;

          3. Notice of Guaranteed Delivery;

          4. Instruction to Registered Holder or DTC Participant from Beneficial
     Owner; and

          5. Letter which may be sent to your clients for whose account you hold
     registered Outstanding Securities or book-entry interests representing
     Outstanding Securities in your name or in the name of your nominee, to
     accompany the instruction form referred to above, for obtaining such
     client's instruction with regard to the Exchange Offer.


     YOUR PROMPT ACTION IS REQUESTED. PLEASE NOTE THAT THE EXCHANGE OFFER WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON MAY --, 2003, UNLESS EXTENDED.
PLEASE FURNISH COPIES OF THE ENCLOSED MATERIALS TO

<PAGE>

THOSE OF YOUR CLIENTS FOR WHOM YOU HOLD OUTSTANDING SECURITIES REGISTERED IN
YOUR NAME OR IN THE NAME OF YOUR NOMINEE AS QUICKLY AS POSSIBLE.


     To participate in the Exchange Offer, a beneficial holder must either (a)
complete, sign and date the Letter of Transmittal and deliver it to JPMorgan
Chase Bank (the "Exchange Agent"), at the address set forth in the Letter of
Transmittal, and either (i) deliver to the Exchange Agent certificates
representing the registered Outstanding Securities in proper form for transfer,
or (ii) cause a DTC Participant to make book-entry delivery of the Outstanding
Securities; or (b) cause a DTC Participant to tender such holder's Outstanding
Securities to the Exchange Agent's account maintained at The Depository Trust
Company ("DTC") for the benefit of the Exchange Agent through DTC's Automated
Tender Offer Program ("ATOP"), including transmission of a computer-generated
message that acknowledges and agrees to be bound by the terms of the Letter of
Transmittal (an "Agent's Message"). By complying with DTC's ATOP procedures with
respect to the Exchange Offer, the DTC Participant confirms on behalf of itself
and the beneficial owners of tendered Outstanding Securities all provisions of
the Letter of Transmittal applicable to it and such beneficial owners as fully
as if it completed, executed and returned the Letter of Transmittal to the
Exchange Agent.


     Holders who wish to tender their Outstanding Securities and (a) whose
Outstanding Securities are not immediately available or (b) who cannot deliver
their Outstanding Securities, the Letter of Transmittal or an Agent's Message
and any other documents required by the Letter of Transmittal to the Exchange
Agent prior to the Expiration Date must tender their Outstanding Securities
according to the guaranteed delivery procedures set forth under the caption "The
Exchange Offer -- Procedures for Tendering Outstanding Securities" in the
Prospectus.

     Pursuant to the Letter of Transmittal, each holder of Outstanding
Securities will make certain representations to the Company. The enclosed
"Instruction to Registered Holder or DTC Participant from Beneficial Owner" form
contains an authorization by the beneficial owners of Outstanding Securities for
you to make such representations.

     The Exchange Offer is not being made to, nor will tenders be accepted from
or on behalf of, holders of Outstanding Securities residing in any jurisdiction
in which the making of the Exchange Offer or acceptance thereof would not be in
compliance with the laws of such jurisdiction. The Exchange Offer is not
conditioned upon any minimum number of Outstanding Securities being tendered.

     The Company will not pay any fee or commission to any broker or dealer or
to any other persons (other than the Exchange Agent) in connection with the
solicitation of tenders of Outstanding Securities pursuant to the Exchange
Offer. The Company will pay or cause to be paid any transfer taxes payable on
the transfer of Outstanding Securities to it, except as otherwise provided in
Instruction 9 of the enclosed Letter of Transmittal.


     Additional copies of the enclosed material may be obtained from JPMorgan
Chase Bank, Corporate Trust Services, 2001 Bryan Street, 9th floor, Dallas,
Texas 75201, Attention: Frank Ivins.


                                          Very truly yours,

                                          THE WILLIAMS COMPANIES, INC.


     NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE WILLIAMS COMPANIES, INC. OR JPMORGAN CHASE
BANK, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENT OR REPRESENTATION ON THEIR BEHALF IN CONNECTION WITH THE EXCHANGE
OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED
THEREIN.


                                        2
<PAGE>

              INSTRUCTION TO REGISTERED HOLDER OR DTC PARTICIPANT
                             FROM BENEFICIAL OWNER

                                       OF

                        8.125% NOTES DUE MARCH 15, 2012

                                      AND

                        8.750% NOTES DUE MARCH 15, 2032

                                       OF

                          THE WILLIAMS COMPANIES, INC.


     The undersigned hereby acknowledges receipt of the Prospectus dated April
- --, 2003 (the "Prospectus"), of The Williams Companies, Inc., a company
incorporated under the laws of the State of Delaware (the "Company"), and the
accompanying Letter of Transmittal (the "Letter of Transmittal"), that together
with any amendments or supplements thereto collectively constitute the Company's
offer (the "Exchange Offer") to exchange up to $650 million aggregate principal
amount of 8.125% Notes due March 15, 2012, for up to a like aggregate principal
amount of its 8.125% Notes due March 15, 2012 (the "Outstanding 8.125% Notes"),
and up to $850 million aggregate principal amount of 8.750% Notes due March 15,
2032, for up to a like aggregate principal amount of its 8.750% Notes due March
15, 2032 (the "Outstanding 8.750% Notes", and together with the Outstanding
8.125% Notes, the "Outstanding Securities"), upon the terms and subject to the
conditions of the Exchange Offer.


     This will instruct you to tender for exchange pursuant to the terms of the
Exchange Offer the aggregate principal amount of Outstanding Securities
indicated below (or, if no aggregate principal amount is indicated below, all of
each applicable series of Outstanding Notes) held by you for the account or
benefit of the undersigned.

     Aggregate amount of Outstanding Securities to be tendered for exchange:

     $          * principal amount of Outstanding 8.125% Notes.

     $          * principal amount of Outstanding 8.750% Notes.
- ---------------

* I (we) understand that if I (we) sign this instruction form without indicating
  in the space provided an aggregate principal amount of any series of
  Outstanding Securities that are held by you for my (our) account or benefit,
  all of such series of Outstanding Securities will be tendered for exchange.
<PAGE>

     If the undersigned instructs you to tender any series of the Outstanding
Securities held by you for the account or benefit of the undersigned, it is
understood that you are authorized to make the representations of the holders of
the Outstanding Securities to the Company contained in the Letter of
Transmittal.

                                   SIGN HERE

- --------------------------------------------------------------------------------
                          Name of Beneficial Owner(s)

- --------------------------------------------------------------------------------
                                  Signature(s)

- --------------------------------------------------------------------------------
                             Name(s) (please print)

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                           Address(es) (please print)

- --------------------------------------------------------------------------------
                                Telephone Number

- --------------------------------------------------------------------------------
               Taxpayer Identification or Social Security Number

- --------------------------------------------------------------------------------
                                      Date

                                        2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.4
<SEQUENCE>10
<FILENAME>d04378a2exv99w4.txt
<DESCRIPTION>FORM OF LETTER TO CLIENTS
<TEXT>
<PAGE>

                                                                    EXHIBIT 99.4

                               LETTER TO CLIENTS
                                   REGARDING

                               OFFER TO EXCHANGE

                        8.125% NOTES DUE MARCH 15, 2012
                                      AND
                        8.750% NOTES DUE MARCH 15, 2032

                                       OF

                          THE WILLIAMS COMPANIES, INC.


THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
  TIME, ON MAY --, 2003 UNLESS THE OFFER IS EXTENDED. TENDERS MAY BE WITHDRAWN
        PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.


To Our Client:


     We are enclosing herewith a Prospectus, dated April --, 2003, of The
Williams Companies, Inc. (the "Company") and a related Letter of Transmittal
(which together with any amendments or supplements thereto collectively
constitute the "Exchange Offer") relating to the offer by the Company under the
Securities Exchange Act of 1933, as amended (the "Securities Act"), to exchange
up to $650 million aggregate principal amount of 8.125% Notes due March 15, 2012
(the "New 8.125% Notes"), for up to a like aggregate principal amount of its
8.125% Notes due March 15, 2012 (the "Outstanding 8.125% Notes"), and up to $850
million aggregate principal amount of 8.750% Notes due March 15, 2032 (the "New
8.750% Notes", and together with the New 8.125% Notes, the "New Securities"),
for up to a like aggregate principal amount of its 8.750% Notes due March 15,
2032 (the "Outstanding 8.750% Notes", and together with the Outstanding 8.125%
Notes, the "Outstanding Securities"), upon the terms and subject to the
conditions set forth in the Prospectus and the Letter of Transmittal. As set
forth in the Prospectus, the terms of the New Securities are identical in all
material respects to the Outstanding Securities, except that the New Securities
have been registered under the Securities Act, and therefore will not be subject
to certain restrictions on their transfer and will not contain certain
provisions providing for an increase in the interest rate paid thereon.


     The enclosed material is being forwarded to you as the beneficial owner of
Outstanding Securities held by us for your account or benefit but not registered
in your name. An exchange of any Outstanding Securities may only be made by us
as the registered Holder pursuant to your instructions. Therefore, the Company
urges beneficial owners of Outstanding Securities registered in the name of a
broker, dealer, commercial bank, trust company or other nominee to contact such
Holder promptly if they wish to exchange Outstanding Securities in the Exchange
Offer. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY
AND CANNOT BE USED BY YOU TO TENDER YOUR BENEFICIAL OWNERSHIP OF OUTSTANDING
SECURITIES HELD BY US FOR YOUR ACCOUNT.

     We request instructions as to whether you wish to tender any or all of your
Outstanding Securities held by us for your account or benefit pursuant to the
terms and subject to the conditions of the Exchange Offer. We also request that
you confirm that we may, on your behalf, make the representations contained in
the Letter of Transmittal that are to be made with respect to you as beneficial
owner. We urge you to read carefully the Prospectus and Letter of Transmittal
before instructing us to exchange your Outstanding Securities and confirming
that we may make the representations contained in the Letter of Transmittal.
<PAGE>

     Your attention is directed to the following:


          (1) THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
     ON MAY --, 2003, UNLESS EXTENDED (THE "EXPIRATION DATE").


          (2) Tenders of Outstanding Securities may be withdrawn at any time
     prior to 5:00 p.m., New York City time, on the Expiration Date. The
     Exchange offer is not conditioned upon any minimum principal amount of
     Outstanding Securities being tendered for exchange. However, the Exchange
     Offer is subject to certain conditions that may be waived by the Company
     and to the terms and provisions of the Registration Rights Agreement, as
     defined in the Prospectus.

          (3) Outstanding Securities may be tendered only in denominations of
     $1,000 and integral multiples thereof.

          (4) Holders of Outstanding Securities not tendered pursuant to the
     Exchange Offer will not have any further registration rights, except in
     certain limited circumstances requiring the filing of a Shelf Registration,
     as that term is defined in the Prospectus. Outstanding Securities not
     tendered pursuant to the Exchange Offer will continue to be subject to
     certain restrictions on transfer. Accordingly, the liquidity of the market
     for the Outstanding Securities could be adversely affected.

          (5) The Company has agreed to pay the expenses of the Exchange Offer.

     The Exchange Offer is not being made to, nor will tenders be accepted from
or on behalf of Holders of Outstanding Securities, residing in any jurisdiction
in which the making of the Exchange Offer or acceptance thereof would not be in
compliance with the laws of such jurisdiction.

     If you wish us to tender any or all of your Outstanding Securities held by
us for your account or benefit, please so instruct us by completing, executing
and returning to us the attached instruction form. AGAIN, PLEASE NOTE THAT THE
ACCOMPANYING LETTER OF TRANSMITTAL IS FURNISHED TO YOU ONLY FOR INFORMATIONAL
PURPOSES, AND MAY NOT BE USED BY YOU TO EXCHANGE OUTSTANDING SECURITIES HELD BY
US AND REGISTERED IN OUR NAME FOR YOUR ACCOUNT OR BENEFIT.

                                        2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.5
<SEQUENCE>11
<FILENAME>d04378a2exv99w5.txt
<DESCRIPTION>GUIDELINES FOR CERTIFICATION
<TEXT>
<PAGE>

                                                                    EXHIBIT 99.5

            GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
                         NUMBER ON SUBSTITUTE FORM W-9

GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table will help determine the number to give
the payer.

<Table>
<Caption>
- ------------------------------------------------------
                                   GIVE THE
        FOR THIS TYPE OF ACCOUNT:  SOCIAL SECURITY
                                   NUMBER OF--
- ------------------------------------------------------
<C>  <S>                           <C>
 1.  An individual's account       The individual
 2.  Two or more individuals       The actual owner of
     (joint account)               the account or, if
                                   combined funds, any
                                   one of the
                                   individuals(1)
 3.  Husband and wife (joint       The actual owner of
     account)                      the account or, if
                                   joint funds, either
                                   person(1)
 4.  Custodian account of a minor  The minor(2)
     (Uniform Gift to Minors Act)
 5.  Adult and minor (joint        The adult or, if
     account)                      the minor is the
                                   only contributor,
                                   the minor(1)
 6.  Account in the name of        The ward, minor, or
     guardian or committee for a   incompetent
     designated ward, minor, or    person(3)
     incompetent person
 7.  a. The usual revocable        The grantor-
        savings trust account      trustee(1)
        (grantor is also trustee)
     b. So-called trust account    The actual owner(1)
        that is not a legal or
        valid trust under State
        law

- ------------------------------------------------------
</Table>

<Table>
<Caption>

- ------------------------------------------------------
                                   GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT:          IDENTIFICATION
                                   NUMBER OF--
- ------------------------------------------------------
<C>  <S>                           <C>
 8.  Sole proprietorship account
 9.  A valid trust, estate, or     Legal entity (Do
     pension trust                 not furnish the
                                   identifying number
                                   of the personal
                                   representative or
                                   trustee unless the
                                   legal entity itself
                                   is not designated
                                   in the account
                                   title.)(4)
10.  Corporate account             The corporation
11.  Religious, charitable, or     The organization
     educational organization
     account
12.  Partnership account held in   The partnership
     the name of the business
13.  Association, club, or other   The organization
     tax-exempt organization
14.  A broker or registered        The broker or
     nominee                       nominee
15.  Account with the Department   The public entity
     of Agriculture in the name
     of a public entity (such as
     a State or local government,
     school district, or prison)
     that receives agricultural
     program payments
- ------------------------------------------------------
</Table>

(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
    person's social security number.
(4) List first and circle the name of the legal trust, estate, or pension trust.

NOTE: If no name is circled or if there is more than one name, the number will
      be considered to be that of the first name listed.
<PAGE>

            GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
                         NUMBER ON SUBSTITUTE FORM W-9

                                     PAGE 2

OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.

PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
  - A corporation.
  - A financial institution.
  - An organization exempt from tax under section 501(a), or an individual
    retirement plan.
  - The United States or any agency or instrumentality thereof.
  - A State, the District of Columbia, a possession of the United States, or any
    subdivision or instrumentality thereof.
  - A foreign government, a political subdivision of a foreign government, or
    any agency or instrumentality thereof.
  - An international organization or any agency, or instrumentality thereof.
  - A registered dealer in securities or commodities registered in the U.S. or a
    possession of the U.S.
  - A real estate investment trust.
  - A common trust fund operated by a bank under section 584(a).
  - An exempt charitable remainder trust, or a non-exempt trust described in
    section 4947(a)(1).
  - An entity registered at all times under the Investment Company Act of 1940.
  - A foreign central bank of issue.
  Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
  - Payments to nonresident aliens subject to withholding under section 1441.
  - Payments to partnerships not engaged in a trade or business in the U.S. and
    which have at least one nonresident partner.
  - Payments of patronage dividends where the amount received is not paid in
    money.
  - Payments made by certain foreign organizations.
  - Payments of interest not generally subject to backup withholding include the
    following:
  - Payments of interest on obligations issued by individuals. Note: You may be
    subject to backup withholding if this interest is $600 or more and is paid
    in the course of the payer's trade or business and you have not provided
    your correct taxpayer identification number to the payer.
  - Payments of tax-exempt interest (including exempt-interest dividends under
    section 852).
  - Payments described in section 6049(b)(5) to non-resident aliens.
  - Payments on tax-free covenant bonds under section 1451.
  - Payments made by certain foreign organizations.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
  Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.

PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividends,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold a portion of
taxable interest, dividend, and certain other payments to a payee who does not
furnish a taxpayer identification number to a payer. Certain penalties may also
apply.

PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CIVIL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.

         FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE
                            INTERNAL REVENUE SERVICE

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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