[FORM 10-Q Information](index=1&type=section&id=FORM%2010-Q%20Information) Provides official registration details, securities information, and shares outstanding for The Williams Companies, Inc. [Registrant Information](index=1&type=section&id=Registrant%20Information) Details the company's state of incorporation, principal executive offices, and contact information - The Williams Companies, Inc. is a Delaware corporation with its principal executive offices in Tulsa, Oklahoma[3](index=3&type=chunk) - Registrant's telephone number is **800-945-5426 (800-WILLIAMS)**[4](index=4&type=chunk) [Securities and Filing Status](index=1&type=section&id=Securities%20and%20Filing%20Status) Outlines the company's registered securities and its SEC filing status as a large accelerated filer - Common Stock, $1.00 par value, trades on the New York Stock Exchange under the symbol **WMB**[4](index=4&type=chunk) - The registrant is a **Large accelerated filer** and has filed all required reports during the preceding 12 months and submitted all Interactive Data Files[4](index=4&type=chunk) [Shares Outstanding](index=1&type=section&id=Shares%20Outstanding) Reports the total number of common shares outstanding as of a recent practicable date Shares Outstanding at October 30, 2023 | Class | Shares Outstanding at October 30, 2023 | | :---------------------------- | :----------------------------- | | Common Stock, $1.00 par value | 1,216,498,672 | [Table of Contents & Forward-Looking Statements](index=3&type=section&id=Table%20of%20Contents%20%26%20Forward-Looking%20Statements) Presents the report's structure and cautions investors about the inherent uncertainties in forward-looking statements [Index](index=3&type=section&id=Index) Provides a comprehensive overview of the report's structure, facilitating navigation - The index lists Part I. Financial Information (Item 1-4) and Part II. Other Information (Item 1-6)[6](index=6&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) Explains that forward-looking statements are subject to risks and uncertainties, cautioning against undue reliance - Forward-looking statements relate to anticipated financial performance, future operations, business prospects, regulatory outcomes, and market conditions[6](index=6&type=chunk) - Key factors that could cause actual results to differ include availability of supplies, market demand, price volatility, regulatory impacts, credit risk, and economic conditions[9](index=9&type=chunk)[10](index=10&type=chunk) - Investors are cautioned not to unduly rely on forward-looking statements, and the company disclaims any obligation to update them[11](index=11&type=chunk) [Definitions](index=6&type=section&id=Definitions) Provides a glossary of abbreviations, acronyms, and industry-specific terminology used in the Form 10-Q [Definitions](index=6&type=section&id=Definitions) Defines key measurements, entities, and financial terms for clarity within the report - Measurements include Bbl (barrel), Bcf (billion cubic feet), Btu (British Thermal Unit), and Dth (dekatherms)[14](index=14&type=chunk) - Consolidated entities include Transco, Northwest Pipeline, and MountainWest, while nonconsolidated entities include Blue Racer and Brazos Permian II[14](index=14&type=chunk)[15](index=15&type=chunk) - Other key terms defined are EBITDA, Fractionation, GAAP, LNG, MVC, and NGLs, along with recent acquisitions like MountainWest Acquisition and Trace Acquisition[16](index=16&type=chunk)[17](index=17&type=chunk) [Part I. Financial Information](index=8&type=section&id=Part%20I.%20Financial%20Information) Contains the unaudited consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements and detailed notes on accounting policies and transactions [Consolidated Statement of Income](index=8&type=section&id=Consolidated%20Statement%20of%20Income) Reports the company's revenues, operating income, and net income for the specified periods Three Months Ended September 30 | Metric | 2023 (Millions) | 2022 (Millions) | Change ($M) | Change (%) | | :--------------------------------------------- | :-------------- | :-------------- | :---------- | :--------- | | Total Revenues | $2,559 | $3,021 | $(462) | -15.3% | | Operating Income (loss) | $994 | $820 | $174 | +21.2% | | Net Income (loss) attributable to The Williams Companies, Inc. | $654 | $600 | $54 | +9.0% | | Basic Earnings (loss) Per Common Share | $0.54 | $0.49 | $0.05 | +10.2% | Nine Months Ended September 30 | Metric | 2023 (Millions) | 2022 (Millions) | Change ($M) | Change (%) | | :--------------------------------------------- | :-------------- | :-------------- | :---------- | :--------- | | Total Revenues | $8,123 | $8,035 | $88 | +1.1% | | Operating Income (loss) | $3,224 | $1,946 | $1,278 | +65.7% | | Net Income (loss) attributable to The Williams Companies, Inc. | $2,041 | $1,380 | $661 | +48.0% | | Basic Earnings (loss) Per Common Share | $1.67 | $1.13 | $0.54 | +47.8% | - Net gain (loss) on commodity derivatives significantly improved from **$(491) million in 9M 2022 to $645 million in 9M 2023**[19](index=19&type=chunk) [Consolidated Statement of Comprehensive Income (Loss)](index=10&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income%20%28Loss%29) Details the comprehensive income, including net income and other comprehensive income components Comprehensive Income (Loss) Attributable to The Williams Companies, Inc. | Period | 2023 (Millions) | 2022 (Millions) | Change ($M) | Change (%) | | :----------- | :-------------- | :-------------- | :---------- | :--------- | | Three Months | $690 | $596 | $94 | +15.8% | | Nine Months | $2,113 | $1,386 | $727 | +52.5% | - Net unrealized gain from derivative instruments (net of taxes) for the nine months ended September 30, 2023, was **$72 million**, a significant improvement from a **$(3) million loss** in the prior year[21](index=21&type=chunk) [Consolidated Balance Sheet](index=11&type=section&id=Consolidated%20Balance%20Sheet) Presents the company's assets, liabilities, and equity at specific points in time Balance Sheet Highlights | Metric | Sep 30, 2023 (Millions) | Dec 31, 2022 (Millions) | Change ($M) | Change (%) | | :------------------------------------- | :---------------------- | :---------------------- | :---------- | :--------- | | Total Assets | $50,788 | $48,433 | $2,355 | +4.9% | | Cash and Cash Equivalents | $2,074 | $152 | $1,922 | +1264.5% | | Property, Plant, and Equipment – net | $32,628 | $30,889 | $1,739 | +5.6% | | Total Liabilities | $36,445 | $34,498 | $1,947 | +5.6% | | Long-term debt | $22,772 | $21,927 | $845 | +3.9% | | Total Equity | $14,343 | $14,045 | $298 | +2.1% | - Long-term debt due within one year increased significantly to **$2,879 million** at September 30, 2023, from **$627 million** at December 31, 2022[23](index=23&type=chunk) [Consolidated Statement of Changes in Equity](index=12&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) Outlines the changes in total equity, including net income, dividends, and share repurchases Changes in Equity (Nine Months Ended September 30, 2023) | Item | Amount (Millions) | | :------------------------------------------------------ | :---------------- | | Net income (loss) | $2,041 | | Other comprehensive income (loss) | $72 | | Cash dividends – common stock ($1.3425 per share) | $(1,635) | | Purchases of treasury stock | $(130) | | Net increase (decrease) in equity | $298 | - Total equity increased by **$298 million** for the nine months ended September 30, 2023, reaching **$14,343 million**[27](index=27&type=chunk) [Consolidated Statement of Cash Flows](index=14&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities Cash Flow Highlights (Nine Months Ended September 30) | Activity | 2023 (Millions) | 2022 (Millions) | Change ($M) | | :----------------------- | :-------------- | :-------------- | :---------- | | Operating Activities | $4,125 | $3,670 | $455 | | Investing Activities | $(2,631) | $(2,535) | $(96) | | Financing Activities | $428 | $(1,956) | $2,384 | | Increase (decrease) in cash | $1,922 | $(821) | $2,743 | - Net cash provided by operating activities increased by **$455 million**, while net cash provided by financing activities saw a significant positive swing of **$2,384 million**[29](index=29&type=chunk) - Key investing activities included **$1,845 million** in capital expenditures and **$1,024 million** for business purchases, partially offset by **$348 million** from the sale of a business[29](index=29&type=chunk) [Notes to Consolidated Financial Statements](index=16&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations of accounting policies, significant transactions, and financial disclosures [Note 1 – General, Description of Business, and Basis of Presentation](index=16&type=section&id=Note%201%20%E2%80%93%20General,%20Description%20of%20Business,%20and%20Basis%20of%20Presentation) Describes Williams' business segments, share repurchase program, and risks to asset carrying values - A **$1.5 billion** share repurchase program was authorized in September 2021, with **$130 million** repurchased during the nine months ended September 30, 2023[34](index=34&type=chunk) - The company's operations are presented within four reportable segments: Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services[35](index=35&type=chunk) - There is a reasonable possibility that future strategic decisions or unfavorable changes in producer activities could lead to impairments of certain property, plant, and equipment and intangible assets[40](index=40&type=chunk) [Note 2 – Variable Interest Entities](index=17&type=section&id=Note%202%20%E2%80%93%20Variable%20Interest%20Entities) Details Williams' involvement with consolidated and nonconsolidated Variable Interest Entities (VIEs) - Williams consolidates Northeast JV (**65% interest**), Gulfstar One (**51% interest**), and Cardinal (**66% interest**) as primary beneficiary VIEs[41](index=41&type=chunk)[42](index=42&type=chunk)[44](index=44&type=chunk) - Nonconsolidated VIEs include Targa Train 7 (**20% interest, $44 million carrying value**) and Brazos Permian II (**15% interest, $23 million carrying value**), with maximum exposure to loss limited to the investment's carrying value[46](index=46&type=chunk)[47](index=47&type=chunk) Consolidated VIE Assets (September 30, 2023) | Asset Category | Amount (Millions) | | :------------------------------------------ | :---------------- | | Property, plant, and equipment – net | $5,090 | | Intangible assets – net of accumulated amortization | $2,077 | [Note 3 – Acquisitions and Divestitures](index=18&type=section&id=Note%203%20%E2%80%93%20Acquisitions%20and%20Divestitures) Reports on recent sales of assets and significant acquisitions, including MountainWest, Trace, and NorTex - Completed the sale of Gulf Coast liquids pipelines on September 29, 2023, for **$348 million**, recording a **$130 million gain**[48](index=48&type=chunk) - Acquired MountainWest on February 14, 2023, for **$1.08 billion cash** (retaining **$430 million debt**), contributing **$156 million** in revenues and **$78 million** in Modified EBITDA from acquisition date to September 30, 2023[49](index=49&type=chunk)[50](index=50&type=chunk) - The Trace Acquisition (April 29, 2022) for **$972 million** expanded the Haynesville Shale footprint, and the NorTex Asset Purchase (August 31, 2022) for **$424 million** added natural gas storage and pipelines in north Texas[56](index=56&type=chunk)[65](index=65&type=chunk) [Note 4 – Revenue Recognition](index=23&type=section&id=Note%204%20%E2%80%93%20Revenue%20Recognition) Provides a detailed breakdown of revenue by service line and segment, and remaining performance obligations Total Revenues (Three Months Ended September 30) | Year | Amount (Millions) | | :--- | :---------------- | | 2023 | $2,559 | | 2022 | $3,021 | Total Revenues (Nine Months Ended September 30) | Year | Amount (Millions) | | :--- | :---------------- | | 2023 | $8,123 | | 2022 | $8,035 | Remaining Performance Obligations (September 30, 2023) | Period | Amount (Millions) | | :--------- | :---------------- | | 2023 (3M) | $950 | | 2024 (1Y) | $3,746 | | Thereafter | $15,300 | | Total | $29,093 | [Note 5 – Provision (Benefit) for Income Taxes](index=26&type=section&id=Note%205%20%E2%80%93%20Provision%20%28Benefit%29%20for%20Income%20Taxes) Details the income tax provision and effective tax rates, explaining key influencing factors Provision (Benefit) for Income Taxes (Continuing Operations) | Period | 2023 (Millions) | 2022 (Millions) | | :----------- | :-------------- | :-------------- | | Three Months | $176 | $96 | | Nine Months | $635 | $169 | - The effective income tax rate for the three months ended September 30, 2023, was less than the federal statutory rate primarily due to a decrease in the estimate of the deferred state income tax rate[86](index=86&type=chunk) - The effective income tax rate for the nine months ended September 30, 2023, was greater than the federal statutory rate primarily due to the effect of state income taxes[87](index=87&type=chunk) [Note 6 – Debt and Banking Arrangements](index=28&type=section&id=Note%206%20%E2%80%93%20Debt%20and%20Banking%20Arrangements) Outlines recent debt issuances, retained debt, commercial paper status, and credit facility maturity 2023 Senior Unsecured Public Debt Issuances | Issue Date | Maturity Date | Amount (Millions) | Rate | | :----------- | :------------ | :---------------- | :--- | | March 2, 2023 | March 2, 2026 | $750 | 5.40% | | March 2, 2023 | March 15, 2033 | $750 | 5.65% | | August 10, 2023 | March 2, 2026 | $350 | 5.40% | | August 10, 2023 | August 15, 2028 | $900 | 5.30% | - The company's Consolidated Balance Sheet includes **$430 million** outstanding principal amount of MountainWest long-term debt as a result of the acquisition[49](index=49&type=chunk)[93](index=93&type=chunk) - No commercial paper was outstanding under the **$3.5 billion** commercial paper program at September 30, 2023[94](index=94&type=chunk) - The maturity date of the credit agreement was extended one year to **October 8, 2027**, with a stated capacity of **$3,750 million**[95](index=95&type=chunk)[96](index=96&type=chunk) [Note 7 – Fair Value Measurements and Guarantees](index=29&type=section&id=Note%207%20%E2%80%93%20Fair%20Value%20Measurements%20and%20Guarantees) Presents fair value measurements for financial instruments and disclosures for long-term debt and guarantees Fair Value of Financial Instruments (September 30, 2023) | Instrument | Carrying Amount (Millions) | Fair Value (Millions) | | :------------------------------------ | :----------------------- | :-------------------- | | ARO Trust investments | $247 | $247 | | Commodity derivative assets | $170 | $170 | | Commodity derivative liabilities | $(373) | $(373) | | Interest rate derivatives | $66 | $66 | | Long-term debt, including current portion | $(25,651) | $(23,895) | | Guarantees | $(37) | $(29) | - The maximum potential undiscounted liquidity exposure for the WilTel guarantee is approximately **$23 million** at September 30, 2023[104](index=104&type=chunk) - Interest rate swap agreements totaling **$750 million** were entered into during 2023 and designated as cash flow hedges to reduce interest rate exposure on future debt issuances[101](index=101&type=chunk) [Note 8 – Commodity Derivatives](index=31&type=section&id=Note%208%20%E2%80%93%20Commodity%20Derivatives) Discusses commodity price risk management using derivative contracts and their financial statement impact Notional Volume of Net Long (Short) Positions for Commodity Derivative Contracts (September 30, 2023) | Commodity | Unit of Measure | Net Long (Short) Position | | :-------------------------- | :-------------- | :------------------------ | | Natural Gas (Index Risk) | MMBtu | 848,556,144 | | Natural Gas (Central Hub Risk - Henry Hub) | MMBtu | (68,125,793) | | Natural Gas Liquids (Central Hub Risk - Mont Belvieu) | Barrels | (669,952) | Fair Value of Commodity Derivatives (September 30, 2023) | Derivative Category | Assets (Millions) | Liabilities (Millions) | | :------------------ | :---------------- | :--------------------- | | Current | $457 | $(434) | | Noncurrent | $172 | $(398) | | Total Derivatives | $629 | $(832) | - At September 30, 2023, the contractually required collateral in the event of a credit rating downgrade to non-investment grade status was **$9 million**[113](index=113&type=chunk) [Note 9 – Contingencies](index=33&type=section&id=Note%209%20%E2%80%93%20Contingencies) Outlines significant legal and environmental contingencies, including litigation and remediation liabilities - A pre-tax charge of **$115 million** was recorded in Q2 2023, with an additional **$1 million** in Q3 2023, for the Alaska Refinery Contamination Litigation, following an unfavorable Alaska Supreme Court opinion[118](index=118&type=chunk)[202](index=202&type=chunk) - The Delaware Supreme Court affirmed a judgment awarding Williams **$602 million plus interest** in litigation against Energy Transfer[126](index=126&type=chunk)[158](index=158&type=chunk) Accrued Environmental Liabilities (September 30, 2023) | Category | Amount (Millions) | | :------------------------------------ | :---------------- | | Interstate gas pipelines | $13 | | Natural gas underground storage facilities | $10 | | Former operations | $28 | | **Total** | **$51** | [Note 10 – Segment Disclosures](index=36&type=section&id=Note%2010%20%E2%80%93%20Segment%20Disclosures) Provides financial information by reportable segment, evaluated based on Modified EBITDA Modified EBITDA by Segment (Nine Months Ended September 30) | Segment | 2023 (Millions) | 2022 (Millions) | Change ($M) | Change (%) | | :----------------------------- | :-------------- | :-------------- | :---------- | :--------- | | Transmission & Gulf of Mexico | $2,327 | $1,987 | $340 | +17.1% | | Northeast G&P | $1,439 | $1,332 | $107 | +8.0% | | West | $931 | $885 | $46 | +5.2% | | Gas & NGL Marketing Services | $678 | $(249) | $927 | NM | | Other | $196 | $284 | $(88) | -31.0% | | **Total Modified EBITDA** | **$5,571** | **$4,239** | **$1,332** | **+31.4%** | Total Revenues by Segment (Nine Months Ended September 30, 2023) | Segment | Amount (Millions) | | :----------------------------- | :---------------- | | Transmission & Gulf of Mexico | $3,102 | | Northeast G&P | $1,528 | | West | $1,536 | | Gas & NGL Marketing Services | $2,194 | | Other | $338 | | Eliminations | $(575) | | **Total Revenues** | **$8,123** | - Modified EBITDA is the primary performance measure used by the chief operating decision maker for evaluating segment performance and allocating resources[137](index=137&type=chunk) [Note 11 – Subsequent Events](index=40&type=section&id=Note%2011%20%E2%80%93%20Subsequent%20Events) Reports on subsequent events, including agreements to acquire Cureton Front Range and additional RMM interest - In October 2023, Williams agreed to acquire Cureton Front Range, LLC for **$560 million** and an additional **50% interest in RMM for $714 million**[147](index=147&type=chunk) - These DJ Basin acquisitions are expected to close in the fourth quarter of 2023 and will expand the company's gathering and processing footprint[147](index=147&type=chunk) - The Cureton Front Range acquisition will be funded with short-term liquidity, and the RMM purchase price is not due until Q4 2024[147](index=147&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's perspective on financial performance, condition, liquidity, and segment-specific results [General](index=41&type=section&id=General) Williams is an energy company focused on natural gas infrastructure, aiming to maximize pipeline capacity utilization and provide high-quality, low-cost transportation - The company's strategy is to maximize pipeline capacity utilization and provide high-quality, low-cost transportation of natural gas to growing markets[151](index=151&type=chunk) - Midstream operations focus on safely and reliably operating large-scale infrastructure, attracting new business with highly reliable service[152](index=152&type=chunk) - Reportable segments include Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) [Recent Developments](index=42&type=section&id=Recent%20Developments) Highlights recent significant events including a favorable Delaware Supreme Court ruling affirming a $602 million judgment against Energy Transfer, planned DJ Basin acquisitions totaling $1.274 billion, the $348 million sale of Gulf Coast liquids pipelines, and the $1.08 billion MountainWest Acquisition in February 2023 - The Delaware Supreme Court affirmed a **$602 million judgment plus interest** against Energy Transfer[158](index=158&type=chunk) - In October 2023, agreements were made to acquire Cureton Front Range, LLC for **$560 million** and an additional **50% interest in RMM for $714 million**, expanding the DJ Basin footprint[159](index=159&type=chunk) - The sale of Gulf Coast liquids pipelines was completed on September 29, 2023, for **$348 million**, resulting in a **$130 million gain**[160](index=160&type=chunk) - The MountainWest Acquisition closed on February 14, 2023, for **$1.08 billion cash**, expanding transmission and storage infrastructure[161](index=161&type=chunk) [Company Outlook](index=43&type=section&id=Company%20Outlook) Anticipates earnings and cash flow growth in 2023, driven by the MountainWest Acquisition, volume growth in Haynesville and Northeast G&P, rate increases, and contributions from Trace and NorTex assets, despite lower expected commodity prices. Growth capital and investment expenditures are projected between $1.6 billion and $1.9 billion, excluding acquisitions, focusing on Transco expansions and Haynesville basin growth - 2023 operating results are expected to benefit from the MountainWest Acquisition, volume growth in Haynesville and Northeast G&P, annual inflation-based rate increases, and contributions from Trace and NorTex assets[165](index=165&type=chunk) - Growth capital and investment expenditures in 2023 are projected to be **$1.6 billion to $1.9 billion**, excluding acquisitions, primarily for Transco expansions and projects in the Northeast G&P and Haynesville basins[166](index=166&type=chunk) - Potential risks include a global recession, opposition to infrastructure projects, counterparty credit risk, unexpected capital expenditure increases or delays, and lower demand for natural gas[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) [Expansion Projects](index=44&type=section&id=Expansion%20Projects) Details ongoing major expansion projects across its segments to increase natural gas and crude oil transportation capacity [Transmission & Gulf of Mexico Projects](index=44&type=section&id=Transmission%20%26%20Gulf%20of%20Mexico%20Projects) Outlines projects like Deepwater Shenandoah and Regional Energy Access to expand offshore and pipeline capacity - Deepwater Shenandoah Project and Deepwater Whale Project are expected to be in service in **Q4 2024**, expanding offshore infrastructure and transportation services[170](index=170&type=chunk)[171](index=171&type=chunk) - Regional Energy Access project (partial in-service Oct 2023, remainder Q4 2024) is expected to increase capacity by **829 Mdth/d**[172](index=172&type=chunk) - Southside Reliability Enhancement (Q4 2024, **423 Mdth/d capacity increase**) and Texas to Louisiana Energy Pathway (Q1 2025, **364 Mdth/d capacity**) are among several Transco expansions[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) [West Projects](index=45&type=section&id=West%20Projects) Describes projects such as Louisiana Energy Gateway and Haynesville Gathering Expansion to boost natural gas gathering - The Louisiana Energy Gateway project is expected to go into service in **Q4 2024**, gathering **1.8 Bcf/d** of natural gas in the Haynesville Shale basin[179](index=179&type=chunk) - A Haynesville Gathering Expansion, a greenfield gathering system, is expected to go into service in **H2 2025**[180](index=180&type=chunk) [Northeast G&P Projects](index=45&type=section&id=Northeast%20G%26P%20Projects) Details Susquehanna Supply Hub and Utica Shale Gathering Expansions to support natural gas production growth - Susquehanna Supply Hub Gathering Expansion is expected to go into service in **Q4 2023**, adding **320 MMcf/d** of capacity[181](index=181&type=chunk) - Utica Shale Gathering Expansion (Phase 1 in-service Q3 2023, Phase 2 in-service Q4 2023) will add **125 MMcf/d** of capacity on the Cardinal gathering system[182](index=182&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Analyzes financial performance, revenue, and expense drivers, and segment-specific operating results [Overall Financial Performance (Three and Nine Months Ended Sep 30, 2023 vs 2022)](index=47&type=section&id=Overall%20Financial%20Performance%20%28Three%20and%20Nine%20Months%20Ended%20Sep%2030,%202023%20vs%202022%29) Compares total revenues, net income, and key drivers for the three and nine months ended September 30 Key Financial Performance (Three Months Ended September 30) | Metric | 2023 (Millions) | 2022 (Millions) | Change ($M) | Change (%) | | :--------------------------------------------- | :-------------- | :-------------- | :---------- | :--------- | | Total Revenues | $2,559 | $3,021 | $(462) | -15.3% | | Net Income (loss) attributable to The Williams Companies, Inc. | $654 | $600 | $54 | +9.0% | | Gain on sale of business | $130 | $0 | $130 | NM | Key Financial Performance (Nine Months Ended September 30) | Metric | 2023 (Millions) | 2022 (Millions) | Change ($M) | Change (%) | | :--------------------------------------------- | :-------------- | :-------------- | :---------- | :--------- | | Total Revenues | $8,123 | $8,035 | $88 | +1.1% | | Net Income (loss) attributable to The Williams Companies, Inc. | $2,041 | $1,380 | $661 | +48.0% | | Net gain (loss) on commodity derivatives | $645 | $(491) | $1,136 | NM | | Income (loss) from discontinued operations | $(88) | $0 | $(88) | NM | - Service revenues increased by **8%** for the nine months ended September 30, 2023, primarily due to acquisitions (MountainWest, Trace, NorTex) and higher gathering, processing, and transportation volumes[194](index=194&type=chunk) [Period-Over-Period Operating Results - Segments](index=51&type=section&id=Period-Over-Period%20Operating%20Results%20-%20Segments) Analyzes segment operating performance using Modified EBITDA, detailing revenue and expense changes [Transmission & Gulf of Mexico Segment](index=51&type=section&id=Transmission%20%26%20Gulf%20of%20Mexico%20Segment) Discusses Modified EBITDA changes driven by asset sales, acquisitions, and service revenues Transmission & Gulf of Mexico Modified EBITDA (Nine Months Ended September 30) | Year | Amount (Millions) | | :--- | :---------------- | | 2023 | $2,327 | | 2022 | $1,987 | | Change | +$340 (+17.1%) | - Modified EBITDA increased primarily due to a **$130 million gain on sale of business** and higher service revenues, including a **$155 million increase** from the MountainWest Acquisition and a **$39 million increase** from the NorTex Asset Purchase[208](index=208&type=chunk)[210](index=210&type=chunk) - Other segment costs and expenses increased due to higher operating, acquisition, and transition costs related to the MountainWest Acquisition and NorTex Asset Purchase, and higher general maintenance activities[209](index=209&type=chunk) [Northeast G&P Segment](index=53&type=section&id=Northeast%20G%26P%20Segment) Examines Modified EBITDA changes influenced by service revenues, volumes, and equity-method investment performance Northeast G&P Modified EBITDA (Nine Months Ended September 30) | Year | Amount (Millions) | | :--- | :---------------- | | 2023 | $1,439 | | 2022 | $1,332 | | Change | +$107 (+8.0%) | - Service revenues increased by **$90 million** at the Northeast JV, **$84 million** in the Utica Shale region, and **$40 million** at Susquehanna Supply Hub, driven by higher volumes and rates[215](index=215&type=chunk) - Proportional Modified EBITDA of equity-method investments decreased due to a **$31 million share of a loss contingency accrual** related to Aux Sable Liquid Products LP and lower commodity-based rates, MVC, and volumes at Laurel Mountain[216](index=216&type=chunk) [West Segment](index=55&type=section&id=West%20Segment) Analyzes Modified EBITDA changes from service revenues, gathering rates, and commodity margins West Modified EBITDA (Nine Months Ended September 30) | Year | Amount (Millions) | | :--- | :---------------- | | 2023 | $931 | | 2022 | $885 | | Change | +$46 (+5.2%) | - Service revenues decreased by **$92 million** in the Barnett Shale region due to lower gathering rates, but increased by **$70 million** in the Haynesville Shale region due to higher gathering volumes, including from the Trace Acquisition[221](index=221&type=chunk) - Commodity margins decreased by **$44 million** from equity NGLs and **$16 million** from other sales activities, primarily due to lower net realized commodity pricing[222](index=222&type=chunk) [Gas & NGL Marketing Services Segment](index=57&type=section&id=Gas%20%26%20NGL%20Marketing%20Services%20Segment) Reports significant Modified EBITDA increase due to favorable derivative gains and commodity marketing margins Gas & NGL Marketing Services Modified EBITDA (Nine Months Ended September 30) | Year | Amount (Millions) | | :--- | :---------------- | | 2023 | $678 | | 2022 | $(249) | | Change | +$927 (NM) | - Modified EBITDA increased significantly due to a favorable change in net unrealized gain (loss) from derivative instruments within Segment revenues and Net processing commodity expenses[228](index=228&type=chunk) - Commodity margins increased by **$139 million**, driven by higher natural gas storage marketing margins and favorable NGL marketing margins[229](index=229&type=chunk) [Other Segment](index=58&type=section&id=Other%20Segment) Details Modified EBITDA decrease primarily from lower upstream operations and derivative changes Other Modified EBITDA (Nine Months Ended September 30) | Year | Amount (Millions) | | :--- | :---------------- | | 2023 | $196 | | 2022 | $284 | | Change | $(88) (-31.0%) | - Modified EBITDA decreased primarily due to lower results from upstream operations, including a **$74 million decrease** in Net realized product sales and a **$28 million unfavorable change** in Net unrealized gain (loss) from derivative instruments[233](index=233&type=chunk) - Other segment costs and expenses not associated with upstream operations decreased due to the absence of a **$11 million loss contingency charge** in 2022 and a **$15 million favorable change** related to regulatory assets[234](index=234&type=chunk) [Management's Discussion and Analysis of Financial Condition and Liquidity](index=60&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Liquidity) Discusses the company's financial condition, liquidity, capital expenditures, debt, and dividend policy [Outlook](index=60&type=section&id=Outlook) Provides projections for capital expenditures, details recent acquisitions, divestitures, and debt issuances - Growth capital and investment expenditures in 2023 are expected to be **$1.6 billion to $1.9 billion**, excluding acquisitions[237](index=237&type=chunk) - Recent acquisitions include Cureton Front Range, LLC (**$560 million**) and an additional 50% interest in RMM (**$714 million**), both expected to close in Q4 2023[238](index=238&type=chunk) - The company completed the sale of Gulf Coast petrochemical and feedstock pipelines for **$348 million** and the acquisition of MountainWest for **$1.08 billion cash** (retaining **$430 million debt**)[239](index=239&type=chunk) - Issued **$1.5 billion** of long-term debt in Q1 2023 and **$1.25 billion** in Q3 2023, with approximately **$2.88 billion** of long-term debt due within one year at September 30, 2023[240](index=240&type=chunk) [Liquidity](index=61&type=section&id=Liquidity) Assesses the company's ability to meet short-term and long-term obligations, including available cash and credit - Williams expects to have sufficient liquidity to manage its businesses in 2023, with potential sources including cash from operations, equity-method investee distributions, credit facilities, and asset monetizations[242](index=242&type=chunk) Available Liquidity (September 30, 2023) | Component | Amount (Millions) | | :------------------------------------------------------------------------------------------------------------------------------------ | :---------------- | | Cash and cash equivalents | $2,074 | | Capacity available under $3.75 billion credit facility (no commercial paper outstanding) | $3,750 | | **Total Available Liquidity** | **$5,824** | - As of September 30, 2023, the company had a working capital deficit of **$1.3 billion** and **$22.8 billion** of long-term debt due after one year[243](index=243&type=chunk)[244](index=244&type=chunk) [Dividends](index=62&type=section&id=Dividends) Reports on the company's regular quarterly cash dividend to common stockholders - The regular quarterly cash dividend to common stockholders was increased by approximately **5.3% to $0.4475 per share** in March, June, and September 2023[247](index=247&type=chunk) [Distributions from Equity-Method Investees](index=62&type=section&id=Distributions%20from%20Equity-Method%20Investees) Explains the general policy for periodic cash distributions from equity-method investments - Organizational documents of equity-method investments generally require periodic distributions of available cash, reduced by reserves for operating their respective businesses[248](index=248&type=chunk) [Credit Ratings](index=62&type=section&id=Credit%20Ratings) Presents the company's credit ratings and outlook from major agencies, noting potential impacts of downgrades Credit Ratings (Senior Unsecured Debt Rating & Outlook) | Rating Agency | Outlook | Rating | | :-------------------------- | :------ | :----- | | S&P Global Ratings | Stable | BBB | | Moody's Investors Service | Stable | Baa2 | | Fitch Ratings | Stable | BBB | - A downgrade of credit ratings could increase borrowing costs and potentially require additional collateral, negatively impacting available liquidity[250](index=250&type=chunk) [Sources (Uses) of Cash](index=63&type=section&id=Sources%20%28Uses%29%20of%20Cash) Summarizes the primary sources and uses of cash and cash equivalents for the nine-month period Sources (Uses) of Cash and Cash Equivalents (Nine Months Ended September 30) | Category | 2023 (Millions) | 2022 (Millions) | | :--------------------------------------------------- | :-------------- | :-------------- | | Net cash provided (used) by operating activities | $4,125 | $3,670 | | Proceeds from long-term debt | $2,754 | $1,752 | | Proceeds from sale of business | $348 | $0 | | Capital expenditures | $(1,845) | $(1,447) | | Common dividends paid | $(1,635) | $(1,553) | | Purchases of businesses, net of cash acquired | $(1,024) | $(933) | | Proceeds from (payments of) commercial paper - net | $(352) | $0 | | Purchases of treasury stock | $(130) | $(9) | | Increase (decrease) in cash and cash equivalents | $1,922 | $(821) | - Net cash provided by operating activities increased by **$455 million** for the nine months ended September 30, 2023, primarily due to higher operating income and favorable changes in operating working capital[254](index=254&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Describes exposure to interest rate and commodity price risks, and how these are managed using financial instruments [Interest Rate Risk](index=64&type=section&id=Interest%20Rate%20Risk) Discusses the company's exposure to interest rate fluctuations, primarily from its debt portfolio - The company's interest rate risk exposure is primarily related to its debt portfolio, which is largely comprised of fixed-rate debt[257](index=257&type=chunk) - Interest rate derivative instruments may be utilized to hedge interest rate risk associated with future debt issuances[257](index=257&type=chunk) [Commodity Price Risk](index=64&type=section&id=Commodity%20Price%20Risk) Explains exposure to commodity price volatility and the use of derivative contracts for risk management - Williams is exposed to commodity price risk through natural gas and NGL marketing activities, as well as upstream business and certain gathering and processing contracts[258](index=258&type=chunk) - This risk is managed using exchange-traded and over-the-counter energy contracts, including forward contracts, futures contracts, and basis swaps[258](index=258&type=chunk) Fair Value of Commodity Derivative Contracts (September 30, 2023) | Maturity | Fair Value (Millions) | | :--------- | :-------------------- | | 2023 | $30 | | 2024 | $(41) | | 2025 | $(41) | | 2026 | $(192) | | 2027+ | $(192) | | **Total** | **$(203)** | [Value at Risk (VaR)](index=64&type=section&id=Value%20at%20Risk%20%28VaR%29) Presents the Value at Risk (VaR) for integrated natural gas trading and non-trading derivatives - VaR is determined using parametric models with **95% confidence intervals** and one-day holding periods[262](index=262&type=chunk) - The VaR associated with integrated natural gas trading operations activity was **$4 million** at September 30, 2023[264](index=264&type=chunk) - The VaR associated with non-trading derivatives (hedging upstream business and certain gathering/processing contracts) was **$3 million** at September 30, 2023[265](index=265&type=chunk) [Item 4. Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Addresses the effectiveness of disclosure controls and internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=65&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Concludes on the effectiveness of disclosure controls, noting the exclusion of a recent acquisition - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2023[268](index=268&type=chunk) - Disclosure controls and procedures of MountainWest, acquired on February 14, 2023, were excluded from the scope of management's assessment[269](index=269&type=chunk) [Changes in Internal Control Over Financial Reporting](index=66&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) Reports no material changes to internal control, aside from the ongoing integration of MountainWest - No material changes to internal control over financial reporting occurred during the third quarter of 2023, other than the ongoing integration of MountainWest[271](index=271&type=chunk) - MountainWest's internal control over financial reporting will be excluded from the scope of the assessment as of December 31, 2023[271](index=271&type=chunk) [Part II. Other Information](index=66&type=section&id=Part%20II.%20Other%20Information) Contains disclosures on legal proceedings, risk factors, equity security sales, and other miscellaneous information [Item 1. Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) Discloses information about environmental matters and other litigation that could impact financial position [Environmental](index=66&type=section&id=Environmental) Details notices of noncompliance from the EPA and a consent decree for environmental claims - The company received notices of noncompliance and violation from the EPA regarding Leak Detection and Repair (LDAR) regulations at several facilities[273](index=273&type=chunk) - A consent decree has been executed, requiring a civil penalty of **$3.75 million** and injunctive relief to resolve these claims[273](index=273&type=chunk) [Other litigation](index=66&type=section&id=Other%20litigation) Refers to Note 9 – Contingencies for additional information on other litigation matters - Additional information regarding other litigation matters is provided in Note 9 – Contingencies of the Notes to Consolidated Financial Statements[275](index=275&type=chunk) [Item 1A. Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) Refers to the company's Annual Report on Form 10-K for a comprehensive discussion of risk factors - Risk factors are detailed in Part I, Item 1A. Risk Factors in the Annual Report on Form 10-K for the year ended December 31, 2022[276](index=276&type=chunk) - No material changes to these risk factors have occurred since the filing of the Annual Report[276](index=276&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Reports on equity security transactions, including no issuer purchases in Q3 2023 and remaining repurchase capacity - No shares were purchased by the issuer during July, August, or September 2023[278](index=278&type=chunk) - The company has a **$1.5 billion** share repurchase program authorized in September 2021, with **$1,360,938,325** remaining available for purchase[278](index=278&type=chunk) [Item 5. Other Information](index=67&type=section&id=Item%205.%20Other%20Information) Confirms no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers - No director or officer adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended September 30, 2023[279](index=279&type=chunk) [Item 6. Exhibits](index=68&type=section&id=Item%206.%20Exhibits) Provides a comprehensive list of all exhibits filed as part of the Form 10-Q, including various agreements, corporate governance documents, certifications, and XBRL data files - Exhibits include merger agreements, certificates of incorporation, by-laws, and certifications of the Chief Executive Officer and Chief Financial Officer[281](index=281&type=chunk) - XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, and Presentation Linkbase are filed herewith[281](index=281&type=chunk)[283](index=283&type=chunk) [SIGNATURE](index=70&type=section&id=SIGNATURE) Formally concludes the report, indicating it was duly signed by an authorized officer [Signature](index=70&type=section&id=Signature) Confirms the report's official signing by the Vice President, Chief Accounting Officer - The report was signed on November 1, 2023, by Mary A. Hausman, Vice President, Chief Accounting Officer and Principal Accounting Officer[285](index=285&type=chunk)[286](index=286&type=chunk)

Summary of The Williams Companies, Inc. Conference Call Company Overview - **Company**: The Williams Companies, Inc. (NYSE: WMB) - **Event**: Barclays CEO Energy-Power Conference - **Date**: September 6, 2023 - **Participants**: Alan Armstrong (CEO), Theresa Chen (Barclays) Key Financial Metrics - **Return on Invested Capital (ROIC)**: 17.5% over the last five years, indicating a healthy performance across the entire portfolio [3] - **Earnings Per Share (EPS) Growth**: 23% Compound Annual Growth Rate (CAGR) over the last five years [5] - **Dividend Growth**: 6% CAGR, with expanding coverage during the same period [5] - **Free Cash Flow Generation**: Expected to increase as credit metrics align, with higher returns anticipated [6] Business Predictability - **Earnings Consistency**: 30 consecutive quarters of meeting or exceeding consensus estimates, with guidance raised during this period [4] - **Base Business Stability**: 92% of the business is predictable and not significantly correlated with commodity prices [6][7] Market Dynamics - **Natural Gas Demand**: Projected to grow at a rate of 6% from 2022 to 2023, with peak demand reaching 53 Bcf per day [8][9] - **Electrification Impact**: Significant investments in electrification at ports and airports are expected to drive further demand for natural gas [11] - **Coal to Gas Transition**: 74 coal plants with a capacity of 79 gigawatts are transitioning to natural gas, representing a growth opportunity for the company [12] LNG and Infrastructure Growth - **LNG Projects**: Active projects totaling 12-13 Bcf per day, with an additional 26 Bcf per day in execution [13] - **Transco Pipeline**: The most valued pipeline in the U.S., with a 13% EBITDA CAGR over five years and expected to reach 21 Bcf per day by 2025 [15][16] Future Projects and Growth Opportunities - **Upcoming Projects**: Several projects expected to come online in 2023 and 2024, with significant growth anticipated in deepwater EBITDA [17][18] - **Pipeline Expansion**: Continued movement of projects into execution, with a focus on high-return expansions [19][20] Capital Allocation and Financial Strategy - **Capital Allocation**: Focus on maintaining a strong balance sheet with a BBB-plus credit rating, while also considering stock buybacks and dividend growth [24][28] - **Investment Opportunities**: Emphasis on high-return projects, particularly in emissions reduction and infrastructure improvements [26][30] Market Position and Competitive Advantage - **Competitive Edge**: Strong relationships and strategic acquisitions, such as the MountainWest deal, are expected to drive growth [21][23] - **Response to Market Needs**: Ability to adapt to market demands, particularly in the context of coal conversion and LNG supply [12][14] Conclusion - **Outlook**: The company is well-positioned to capitalize on the growing demand for natural gas and infrastructure needs, with a strong focus on sustainability and emissions reduction [30][31]

The Williams Companies, Inc. (NYSE:WMB) Q2 2023 Earnings Conference Call August 3, 2023 9:30 AM ET Company Participants Danilo Juvane – Vice President of Investor Relations, ESG, and Investment Analysis Alan Armstrong – President and Chief Executive Officer John Porter – Chief Financial Officer Michael Dunn – Chief Operating Officer Conference Call Participants Spiro Dounis – Citi Jeremy Tonet – JP Morgan Jean Ann Salisbury – Bernstein Brian Reynolds – UBS Praneeth Satish – Wells Fargo Colton Bean – TPH and ...

Williams 2nd Quarter 2023 Earnings Call WILLIAMS © 2023 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams 2nd Quarter 2023 Earnings Call I August 3, 2023 I www.williams.com 1 2Q at a glance Premier Midstream Operator Steadfast project execution to drive additional growth in 2023 and beyond ADJUST ED EBI T DA • Signed precedent agreement for Overthrust Westbound Expansion 8% • Fully integrated MountainWest into existing Western f ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ☑ ACT OF 1934 For the quarterly period ended June 30, 2023 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ☐ ACT OF 1934 For the transition period from _____________ to _____________ Commission file number 1-4174 THE WILLIAMS COMPANIES, INC. (Exact name of registrant as specified in its charter) Delaware 73-05 ...

Summary of The Williams Companies, Inc. Conference Call Company Overview - **Company**: The Williams Companies, Inc. (NYSE: WMB) - **Industry**: Natural Gas and Energy Sector Key Points and Arguments Natural Gas as a Solution - Natural gas is viewed as a critical and affordable solution to the intermittency of renewable energy sources as the energy landscape evolves [2][4] - The focus is on the capacity for natural gas rather than average annual use, emphasizing the importance of peak day capacity [2][3] Emission Reduction and Sustainability - Williams emphasizes the potential for natural gas to reduce emissions on an economically sustainable basis without requiring subsidies [3][4] - The company supports tighter regulations on methane emissions and is actively working on emission tracking technologies [8][9] Growth in Peak Day Demand - A study by McKinsey indicates that peak day power demand will increase significantly, even as average annual consumption of natural gas may decline [5][6] - From 2019 to 2022, there was an 85% increase in renewables, with corresponding increases in peak days of 9% and 14% in their systems [6] Investment and Financial Performance - Williams has a strong track record of year-over-year EBITDA growth, with a long-term growth target of 5% to 7% [14][33] - The company has been able to maintain growth despite fluctuations in gas prices, with guidance reflecting a softer gas market [12][36] Project Pipeline and Future Growth - Significant projects are expected to come online in 2025, which will contribute to a substantial increase in capacity and EBITDA [15][34] - The company has several ongoing projects, including the Mountain Valley Pipeline and Regional Energy Access project, which are expected to enhance their service capabilities [21][24] Capital Allocation Strategy - Williams is focused on balancing growth projects with shareholder returns, including stock buybacks when opportunities arise [29][32] - The company has a $1.5 billion authority for stock buybacks and is strategically investing in emission reduction projects [30][32] Market Position and Competitive Advantage - Williams is well-positioned to capitalize on the transition from coal to natural gas, particularly in regions with high renewable energy penetration [19][21] - The integration of their gas marketing arm, Sequent, has proven successful, enhancing their operational efficiency and cash flow generation [25][26] Conclusion - The Williams Companies is strategically positioned in the natural gas sector, focusing on emission reductions, capacity growth, and sustainable practices while maintaining a strong financial outlook and commitment to shareholder value [27][28]

Williams 1st Quarter 2023 Earnings Call May 4, 2023 WILLIAMS© ...

The Williams Companies, Inc. (NYSE:WMB) Q1 2023 Earnings Conference Call May 4, 2023 9:30 AM ET Company Participants Danilo Juvane - Vice President, Investor Relations Alan Armstrong - President and Chief Executive Officer John Porter - Chief Financial Officer Michael Dunn - Chief Operating Officer Lane Wilson - General Counsel Chad Zamarin - Executive Vice President, Corporate Strategic Development Conference Call Participants Brian Reynolds - UBS Jeremy Tonet - JP Morgan Marc Solecitto - Barclays Praneeth ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ☑ ACT OF 1934 For the quarterly period ended March 31, 2023 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ☐ ACT OF 1934 For the transition period from _____________ to _____________ Commission file number 1-4174 THE WILLIAMS COMPANIES, INC. (Exact name of registrant as specified in its charter) Delaware 73-0 ...

[PART I](index=6&type=section&id=PART%20I) [Business](index=6&type=section&id=Item%201.%20Business) The Williams Companies, Inc. is a major energy infrastructure company focused on safely delivering natural gas products [General Overview](index=6&type=section&id=General%20Overview) Williams is a major energy infrastructure company focused on natural gas gathering, processing, transmission, and NGL services across the US - The company owns and operates over **33,000 miles of pipelines**, **29 natural gas processing facilities**, and **7 NGL fractionation facilities**[9](index=9&type=chunk) - Key business variables include obstacles to expansion (permitting), producer drilling activity, customer retention, infrastructure growth, commodity prices, and disciplined growth[12](index=12&type=chunk) [Service Assets, Customers, and Contracts](index=7&type=section&id=Service%20Assets%2C%20Customers%2C%20and%20Contracts) Company assets include FERC-regulated interstate pipelines under long-term contracts and fee-based gathering/processing services - Most interstate natural gas transmission business is fully contracted under long-term firm reservation contracts. In 2022, the top three customers for Transco and Northwest Pipeline accounted for approximately **23% and 51% of their respective operating revenues**[14](index=14&type=chunk)[15](index=15&type=chunk) - Approximately **90% of NGL production volumes** were under fee-based processing contracts in 2022, with the remaining **10%** under noncash commodity-based contracts[17](index=17&type=chunk)[18](index=18&type=chunk) - The top ten gathering and processing customers accounted for approximately **70% of related fee revenues and NGL margins** in 2022[21](index=21&type=chunk) [Business Segments](index=10&type=section&id=Business%20Segments) Operations are managed through four segments: Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services - The company's operations are managed through four reportable segments: **Transmission & Gulf of Mexico**, **Northeast G&P**, **West**, and **Gas & NGL Marketing Services**[30](index=30&type=chunk) - The **Transmission & Gulf of Mexico** segment includes major interstate pipelines (Transco, Northwest Pipeline, MountainWest) and Gulf Coast assets[30](index=30&type=chunk) - The **Northeast G&P** segment focuses on midstream operations in the Marcellus and Utica Shale regions[31](index=31&type=chunk) - The **West** segment comprises gathering, processing, and treating operations in the Rocky Mountains and various Texas and Louisiana shale regions[32](index=32&type=chunk) [Regulatory Matters](index=19&type=section&id=Regulatory%20Matters) Interstate gas pipeline transmission and storage are heavily regulated by FERC, PHMSA, and TSA, with state regulations also applying - Interstate gas pipeline activities are subject to **FERC regulation** under the Natural Gas Act of 1938, governing rates, facility construction, and abandonment[82](index=82&type=chunk) - PHMSA's 'Mega Rule' has expanded federal pipeline safety oversight to previously unregulated gas gathering pipelines, affecting thousands of miles of the company's pipelines[89](index=89&type=chunk) - The company estimates incurring approximately **$126 million in 2023** for its Gas Integrity Management Plan and **$10 million** for its Liquid Integrity Management Plan to comply with PHMSA regulations[92](index=92&type=chunk)[93](index=93&type=chunk) - The TSA has issued security directives requiring critical pipeline operators to implement TSA-approved Cybersecurity Implementation Plans, develop Incident Response Plans, and establish assessment programs[95](index=95&type=chunk) [Environmental Matters](index=23&type=section&id=Environmental%20Matters) Operations are subject to extensive environmental laws, creating potential liabilities for pollutant discharges and cleanup costs - Operations are subject to numerous environmental laws, with potential liability for unlawful discharge of pollutants and cleanup costs, including for damages caused by former owners[101](index=101&type=chunk)[102](index=102&type=chunk) [Competition](index=23&type=section&id=Competition) Williams faces significant competition across all segments, based on reputation, fees, service reliability, and available capacity - Competition in gathering and processing is based on reputation, commercial terms, services provided, efficiency, and location[105](index=105&type=chunk) - The interstate natural gas pipeline business competes based on available capacity, rates, reliability, and proximity to customers, with significant barriers to entry for new pipeline construction[107](index=107&type=chunk)[109](index=109&type=chunk) [Human Capital Resources](index=24&type=section&id=Human%20Capital%20Resources) As of Feb 1, 2023, Williams had 5,043 employees, emphasizing safety, comprehensive rewards, and diversity and inclusion - As of February 1, 2023, the company had **5,043 full-time employees**, with a voluntary turnover rate of **7.7% in 2022**[113](index=113&type=chunk) - For 2022, safety and environmental goals comprised **15% of the employee annual incentive program**[116](index=116&type=chunk) - The company promotes diversity and inclusion through a council, **10 Employee Resource Groups (ERGs)**, and required training for leaders, with **25% of the Board of Directors being women** as of December 31, 2022[125](index=125&type=chunk)[126](index=126&type=chunk) [Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from natural gas supply/demand, commodity price volatility, project opposition, financial conditions, and extensive regulations [Risks Related to Our Business](index=29&type=section&id=Risks%20Related%20to%20Our%20Business) Business risks include reliance on third-party production, volatile commodity prices, customer credit, project opposition, and operational hazards - Financial condition depends on the continued availability of natural gas supplies from third-party producers and the demand for those supplies in served markets[136](index=136&type=chunk) - The company faces opposition to the operation and expansion of its pipelines from governmental officials, environmental groups, and local advocates, which can delay or deny necessary permits[139](index=139&type=chunk) - Operational risks include aging infrastructure, uncontrolled releases of products, fires, explosions, and cybersecurity threats, potentially resulting in significant damage, reputational harm, and financial losses[151](index=151&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) [Risks Related to Financing Our Business](index=37&type=section&id=Risks%20Related%20to%20Financing%20Our%20Business) Financial stability is subject to credit rating downgrades, significant indebtedness, difficult market conditions, and restricted fossil-fuel investment - A downgrade of the company's credit ratings could increase borrowing costs, require posting collateral, and limit access to capital markets[161](index=161&type=chunk) - Total outstanding long-term debt was **$22.6 billion** as of December 31, 2022, and debt agreements contain restrictive covenants affecting financial and operating flexibility[161](index=161&type=chunk) - Some financial institutions have restricted or eliminated investment in fossil-fuel related businesses, which could make it more difficult for the company and its customers to secure funding[165](index=165&type=chunk) [Risks Related to Regulations](index=39&type=section&id=Risks%20Related%20to%20Regulations) Operations are subject to extensive regulation by FERC and environmental laws, including climate change, impacting costs and profitability - Interstate pipeline transportation and storage are subject to comprehensive regulation by **FERC**, which affects rates, services, and facility construction, potentially impacting profitability[167](index=167&type=chunk) - Operations are subject to extensive environmental laws which may expose the company to significant costs, liabilities, and penalties for non-compliance[168](index=168&type=chunk) - Future climate change regulations or carbon taxes could result in increased costs to operate and maintain facilities, potentially making some activities uneconomic[168](index=168&type=chunk) [Legal Proceedings](index=42&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in legal proceedings, including an environmental matter with the DOJ and EPA for alleged Clean Air Act violations - The company has reached an agreement in principle with the DOJ to resolve alleged Clean Air Act violations at several facilities, which includes a proposed civil penalty of **$3.75 million** and injunctive relief[177](index=177&type=chunk) [Information About Our Executive Officers](index=43&type=section&id=Information%20About%20Our%20Executive%20Officers) This section details the company's executive officers as of February 27, 2023, including their names, ages, positions, and experience [PART II](index=45&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=45&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Common stock trades on NYSE under 'WMB', with a $1.5 billion stock repurchase program and a performance graph comparing returns - The company has a stock repurchase program authorized for up to **$1.5 billion**, with no expiration date, and no shares were purchased in Q4 2022[187](index=187&type=chunk) Cumulative Total Shareholder Return (2017-2022) | | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | The Williams Companies, Inc. | 100.0 | 74.5 | 85.1 | 78.7 | 108.9 | 144.8 | | S&P 500 Index | 100.0 | 94.8 | 124.7 | 147.6 | 189.9 | 155.5 | | Bloomberg Americas Pipelines Index | 100.0 | 83.8 | 113.4 | 89.7 | 120.3 | 139.0 | | Arca Natural Gas Index | 100.0 | 66.4 | 65.5 | 56.7 | 91.0 | 116.5 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses 2022 financial results, highlighting increased net income, recent acquisitions, and a positive 2023 outlook with planned capital expenditures [Recent Developments and Company Outlook](index=48&type=section&id=Recent%20Developments%20and%20Company%20Outlook) Recent strategic activities include MountainWest, NorTex, and Trace Midstream acquisitions, with a positive 2023 outlook and planned growth capital expenditures - Closed on the acquisition of MountainWest Pipelines Holding Company for **$1.08 billion in cash** and **$430 million in assumed debt** on February 14, 2023[203](index=203&type=chunk) - Acquired Haynesville Shale assets from Trace Midstream for **$972 million** in April 2022 and north Texas assets from NorTex for **$424 million** in August 2022[206](index=206&type=chunk)[205](index=205&type=chunk) - 2023 growth capital and investment expenditures are expected to be between **$1.40 billion and $1.70 billion**, excluding the MountainWest Acquisition[209](index=209&type=chunk) [Results of Operations](index=53&type=section&id=Results%20of%20Operations) Net income increased by $532 million to $2.049 billion in 2022, driven by higher service revenues and volume growth, partially offset by derivatives Consolidated Results of Operations (2022 vs. 2021) | Metric | 2022 (Millions) | 2021 (Millions) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $10,965 | $10,627 | +$338 | +3% | | Operating Income | $3,018 | $2,631 | +$387 | +15% | | Net Income Attributable to Williams | $2,049 | $1,517 | +$532 | +35% | - Service revenues increased by **$535 million in 2022**, primarily due to higher gathering and processing rates, higher volumes from the Trace and NorTex acquisitions, and the Leidy South expansion project[228](index=228&type=chunk) - Net loss on commodity derivatives increased by **$239 million**, reflecting higher net unrealized losses in the Gas & NGL Marketing Services segment[231](index=231&type=chunk) [Financial Condition and Liquidity](index=66&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Liquidity) The company maintains strong liquidity with $3.55 billion available as of Dec 31, 2022, funding capital spending primarily with cash flow after dividends Available Liquidity as of Dec 31, 2022 | Source | Amount (Millions) | | :--- | :--- | | Cash and cash equivalents | $152 | | Available Credit Facility Capacity | $3,400 | | **Total Available Liquidity** | **$3,552** | Cash Flow Summary | Cash Flow Category | 2022 (Millions) | 2021 (Millions) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $4,889 | $3,945 | | Net Cash from Financing Activities | $(3,042) | $(942) | | Net Cash from Investing Activities | $(3,375) | $(1,465) | - The company holds stable, investment-grade credit ratings: **BBB from S&P, Baa2 from Moody's, and BBB from Fitch**[293](index=293&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate and commodity price risks using derivatives, with VaR for trading and non-trading portfolios as of Dec 31, 2022 - The debt portfolio is primarily comprised of fixed-rate debt, which mitigates the impact of interest rate fluctuations[304](index=304&type=chunk) - Commodity price risk is managed with exchange-traded and OTC energy contracts, though these are generally not designated for hedge accounting treatment[306](index=306&type=chunk) - At December 31, 2022, the Value at Risk (VaR) for the integrated natural gas trading activity was **$10 million**, and the VaR for the non-trading hedging portfolio was **$8 million**[314](index=314&type=chunk)[315](index=315&type=chunk) [Financial Statements and Supplementary Data](index=73&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains audited consolidated financial statements for 2022, with an unqualified opinion from Ernst & Young LLP on financials and internal controls - The independent auditor, Ernst & Young LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2022[318](index=318&type=chunk)[320](index=320&type=chunk) Consolidated Statement of Income Highlights (Year Ended Dec 31) | (Millions, except per-share) | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total Revenues | $10,965 | $10,627 | $7,719 | | Operating Income | $3,018 | $2,631 | $2,202 | | Net Income Attributable to Williams | $2,049 | $1,517 | $211 | | Diluted EPS | $1.67 | $1.24 | $0.17 | Consolidated Balance Sheet Highlights (As of Dec 31) | (Millions) | 2022 | 2021 | | :--- | :--- | :--- | | Total Assets | $48,433 | $47,612 | | Total Liabilities | $34,388 | $33,511 | | Total Equity | $14,045 | $14,101 | [Controls and Procedures](index=141&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls and internal control over financial reporting were effective as of Dec 31, 2022, with no material changes - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[639](index=639&type=chunk) - Management assessed internal control over financial reporting as effective based on the COSO 2013 framework, and the independent auditor, Ernst & Young LLP, concurred[644](index=644&type=chunk)[647](index=647&type=chunk) [PART III](index=144&type=section&id=PART%20III) Part III incorporates by reference information from the company's definitive Proxy Statement for its 2023 Annual Meeting of Stockholders - Information regarding directors, executive compensation, security ownership, and related party transactions is incorporated by reference from the company's definitive Proxy Statement to be filed for the April 25, 2023, Annual Meeting of Stockholders[654](index=654&type=chunk)[657](index=657&type=chunk)[658](index=658&type=chunk)[660](index=660&type=chunk) [PART IV](index=146&type=section&id=PART%20IV) Part IV lists all financial statements, schedules, and exhibits filed as part of the Form 10-K report, including consolidated financials - This section lists all financial statements, schedules, and exhibits filed with the annual report, including consents of independent auditors and certifications by the CEO and CFO[663](index=663&type=chunk)[664](index=664&type=chunk)