NEWSRELEASE (XXXXXXXX LOGO)
NYSE: WMB
EXHIBIT 99.3
--------------------------------------------------------------------------------
DATE: April 21, 2003
XXXXXXXX REACHES $1.1 BILLION AGREEMENT TO SELL INTEREST IN MASTER
LIMITED PARTNERSHIP
TULSA, Okla. - Xxxxxxxx (NYSE:WMB) announced today that it has signed a
definitive agreement to sell its 54.6 percent ownership interest in Xxxxxxxx
Energy Partners L.P. (NYSE:WEG) 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 Xxxxxxxx. The sale also will
have the effect of removing $570 million of the partnership's debt from
Xxxxxxxx' consolidated balance sheet.
The sale is scheduled to close in May, subject to standard closing
conditions. Xxxxxxxx expects to recognize a pre-tax gain of at least $285
million to $300 million, which will be reported in discontinued operations.
Including today's announcement, Xxxxxxxx this year has sold or agreed
to sell assets for more than $2.6 billion in cash and relief of nearly $900
million in debt. The cash figure includes proceeds from assets the company
identified for sale earlier this year as part of its liquidity-management plan,
as well as two transactions in the company's energy marketing and trading
portfolio.
"Xxxxxxxx has come a long way in a short time," said Xxxxx Xxxxxxx,
chairman, president and chief executive officer. "We are pleased with our
continued success in narrowing our focus to key natural gas businesses while at
the same time attending to the critical tasks of raising cash and reducing debt
to strengthen our balance sheet."
Xxxxxxxx' aggregate ownership interest in the master limited
partnership consists of 100 percent of the general partnership interest - which
equates to 2 percent of the total partnership interest and includes the
associated incentive-distribution rights - and 52.6 percent of the limited
partnership interests. The limited partnership interests include the Class B
units Xxxxxxxx received in the sale of Xxxxxxxx Pipe Line to Xxxxxxxx Energy
Partners in April 2002.
"This agreement moves us closer to wrapping up major asset sales and
rounding out what Xxxxxxxx will look like in the near future. We are reshaping
and resizing Xxxxxxxx to focus on natural gas production, natural gas processing
and natural gas transportation," Xxxxxxx said. "Parting with our interest in
Xxxxxxxx Energy Partners substantially ends our nearly four decades of
participation in the oil segment of the energy industry."
Under the terms of the agreement, Xxxxxxxx will receive approximately
$510 million at closing and up to $2 million in August, assuming closing occurs
on or after May 15.
In addition and subsequent to closing, the buyer's future sales of
equity at net prices exceeding $37.50 per unit could provide Xxxxxxxx with an
additional cash incentive of up to $20 million.
"To the extent that the market rewards the partnership for the
transition to a well-capitalized general partner with a stated desire to expand
the business, Xxxxxxxx will be in a position to capture up to $20 million in
cash incentive from the buyer's future resale of equity," Xxxxxxx said.
Xxxxxxxx Energy Partners' assets include a 6,700-mile refined products
pipeline system and 39 related storage terminals, an ammonia pipeline system,
five marine terminal facilities located along waterways such as the Houston Ship
Channel, and 23 inland terminal facilities connected to third-party pipelines.
The buyer expects to offer employment to more than 800 Xxxxxxxx
employees whose jobs are primarily dedicated to providing general,
administrative and operations support to the assets in the partnership. Xxxxxxxx
will continue to provide services to the partnership and buyer during a
transition period, though the existing services agreement between Xxxxxxxx and
the partnership will terminate - effectively relieving Xxxxxxxx from any
continuing obligation to bear a portion of the partnership's expenses.
Xxxxxx Brothers and Citigroup acted as financial advisers to Xxxxxxxx
in connection with the transaction.
ABOUT XXXXXXXX (NYSE: WMB)
Xxxxxxxx, through its subsidiaries, primarily finds, produces, gathers,
processes and transports natural gas. Xxxxxxxx' gas xxxxx, pipelines and
midstream facilities are concentrated in the Northwest, Rocky Mountains, Gulf
Coast and Eastern Seaboard. More information is available at xxx.xxxxxxxx.xxx.
CONTACT: Xxxxx Xxxx
Xxxxxxxx (media relations)
(000) 000-0000
Xxxxxx Xxxxxxxx
Xxxxxxxx (investor relations)
(000) 000-0000
Xxxxxxx Xxxxxx
Xxxxxxxx (investor relations)
(000) 000-0000
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Portions of this document may constitute "forward-looking statements" as defined
by federal law. Although the company believes any such statements are based on
reasonable assumptions, there is no assurance that actual outcomes will not be
materially different. Any such statements are made in reliance on the "safe
harbor" protections provided under the Private Securities Reform Act of 1995.
Additional information about issues that could lead to material changes in
performance is contained in the company's annual reports filed with the
Securities and Exchange Commission.
