0000107263-22-000004.txt : 20220222 0000107263-22-000004.hdr.sgml : 20220222 20220222060348 ACCESSION NUMBER: 0000107263-22-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 20220222 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20220222 DATE AS OF CHANGE: 20220222 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04174 FILM NUMBER: 22654755 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 COMPANIES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: WILLIAMS BROTHERS COMPANIES DATE OF NAME CHANGE: 19710817 8-K 1 wmb-20220222.htm 8-K wmb-20220222
0000107263false00001072632022-02-222022-02-22

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 22, 2022 (February 21, 2022)

The Williams Companies, Inc.
(Exact name of registrant as specified in its charter)
Delaware1-417473-0569878
(State or other jurisdiction of
incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
One Williams Center
Tulsa, Oklahoma
74172-0172
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (918) 573-2000

NOT APPLICABLE
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $1.00 par valueWMBNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02. Results of Operations and Financial Condition

On February 21, 2022, The Williams Companies, Inc. (the "Company") issued a press release announcing its financial results for the quarter and year ended December 31, 2021. A copy of the press release and accompanying financial highlights and operating statistics and reconciliation schedules are furnished herewith as Exhibit 99.1 and are incorporated herein in their entirety by reference.

The press release and accompanying financial highlights and operating statistics and reconciliation schedules are being furnished pursuant to Item 2.02, Results of Operations and Financial Condition. The information furnished is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.



Item 9.01. Financial Statements and Exhibits

(a)    None

(b)    None

(c)    None

(d)    Exhibits.
Exhibit No.                                                                       Description                                                                   
99.1
104
Cover Page Interactive Data File. The cover page XBRL tags are embedded within the inline XBRL document (contained in Exhibit 101).

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
THE WILLIAMS COMPANIES, INC.
(Registrant)
Dated:February 22, 2022By:
/s/ JOHN D. PORTER
John D. Porter
Senior Vice President and Chief Financial Officer (Principal Financial Officer)


EX-99.1 2 wmb_20211231xer.htm EX-99.1 Document
Exhibit 99.1
News Release
Williams (NYSE: WMB)
One Williams Center
Tulsa, OK 74172
800-Williams
www.williams.com
  wmb_image1a19a.jpg

DATE: Monday, Feb. 21, 2022
MEDIA CONTACT:INVESTOR CONTACT:
media@williams.com
(800) 945-8723
Danilo Juvane
(918) 573-5075
Grace Scott
(918) 573-1092

Williams Reports Record 4Q and Full-Year 2021 Results;
Analyst Day Set for Feb. 22

TULSA, Okla. – Williams (NYSE: WMB) today announced its unaudited financial results for the three and 12 months ended Dec. 31, 2021.

Full-year 2021 results driven by strength of natural gas focused strategy
GAAP net income of $1.514 billion, or $1.24 per diluted share (EPS)
Adjusted net income of $1.658 billion, or $1.36 per diluted share (Adjusted EPS) – up 24% from 2020
Adjusted EBITDA of $5.635 billion – up $530 million or 10% vs. 2020
Cash flow from operations (CFFO) of $3.945 billion – up 13% vs. 2020
Available funds from operations (AFFO) of $4.073 billion – up 12% vs. 2020
Debt-to-Adjusted EBITDA at year end of 3.9x; improved from 4.35x year-end 2020
Dividend coverage ratio of 2.04x (AFFO basis)
Achieved record gathering volumes of 13.9 Bcf/d and contracted transmission capacity of 23.8 Bcf/d – up 5% and 3%, respectively, from 2020
Expect 3% growth in 2022 with Adjusted EBITDA guidance midpoint of $5.8 billion, yielding 6% CAGR over the last five years

Strong 4Q results across key financial metrics
GAAP net income of $621 million, or $0.51 per diluted share
Adjusted net income of $476 million, or $0.39 per diluted share (Adjusted EPS) – up 25% and 26%, respectively, vs. 4Q 2020
Adjusted EBITDA of $1.483 billion – up $147 million or 11% vs. 4Q 2020
CFFO of $1.139 billion – up 2% vs. 4Q 2020
AFFO of $1.045 billion – up 6% vs. 4Q 2020
Dividend coverage ratio of 2.10x (AFFO basis)

Executed strategic transactions and expansion projects to drive optimization and growth across portfolio
Finalized upstream JVs with GeoSouthern in Haynesville and with Crowheart in Wamsutter
Closed Sequent Energy Management acquisition
Signed agreements for Whale and Shenandoah Deepwater Gulf of Mexico expansions
Placed Leidy South Transco expansion project in full service in 4Q 2021
Fully contracted three new demand-pull transmission projects
Completed multiple G&P customer expansion projects
Announced MOU with Ørsted to explore clean energy opportunities in the U.S.
Advanced 13 solar projects with current total of 350MW; expanded program to include battery storage


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CEO Perspective
Alan Armstrong, president and chief executive officer, made the following comments:

“Williams broke records in contracted transmission capacity, natural gas gathering volumes and financial results in 2021, including 10% higher Adjusted EBITDA for the year, reflecting growth across our three major business segments as well as strong contributions from our upstream JV operations. We surpassed our financial guidance, even after raising it twice during the year, and we continued to strengthen our balance sheet, adding to our track record of financial stability.
“In addition to record financial and operational success in 2021, we received top ESG rankings for the midstream sector and won a prestigious award for industry leadership. We also kicked off a multi-year modernization and emissions reduction program across our transmission network as part of our long-term commitment to safe, reliable and environmentally friendly operations. Furthermore, we expanded our efforts to invest in new energy ventures that will keep Williams at the forefront of technology changes within the midstream natural gas industry.

“This tremendous momentum has set the pace for Williams to execute against our vision to provide the best transport, storage and delivery solutions for reliable, low-cost, low-carbon energy. We expect strong natural gas market fundamentals and steadfast project execution to drive additional growth for our business in 2022, and we are extremely well positioned to continue serving the growing need for clean energy far into the future."

Williams Summary Financial Information4QFull Year
Amounts in millions, except ratios and per-share amounts. Per share amounts are reported on a diluted basis. Net income amounts are from continuing operations attributable to The Williams Companies, Inc. available to common stockholders.2021202020212020
GAAP Measures
Net Income$621 $115 $1,514 $208 
Net Income Per Share$0.51 $0.09 $1.24 $0.17 
Cash Flow From Operations$1,139 $1,114 $3,945 $3,496 
Non-GAAP Measures (1)
Adjusted EBITDA$1,483 $1,336 $5,635 $5,105 
Adjusted Net Income$476 $382 $1,658 $1,333 
Adjusted Earnings Per Share$0.39 $0.31 $1.36 $1.10 
Available Funds from Operations$1,045 $983 $4,073 $3,638 
Dividend Coverage Ratio2.10 x2.03 x2.04 x1.87 x
Other
Debt-to-Adjusted EBITDA at Quarter End (2)3.90 x4.35 x
Capital Investments (3)$371 $423 $1,577 $1,485 
(1) Schedules reconciling Adjusted Income, Adjusted EBITDA, Available Funds from Operations and Dividend Coverage Ratio (non-GAAP measures) to the most comparable GAAP measure are available at www.williams.com and as an attachment to this news release.
(2) Does not represent leverage ratios measured for WMB credit agreement compliance or leverage ratios as calculated by the major credit ratings agencies. Debt is net of cash on hand, and Adjusted EBITDA reflects the sum of the last four quarters.
(3) Capital Investments includes increases to property, plant, and equipment (growth & maintenance capital), purchases of businesses, net of cash acquired, purchases of and contributions to equity-method investments and purchases of other long-term investments.


GAAP Measures

Fourth-quarter 2021 net income increased by $506 million compared to the prior year reflecting $66 million of increased earnings from our new upstream operations, $58 million higher service revenues, and $45 million of higher joint venture earnings in the Northeast G&P segment. The higher service revenues include $30 million from Transco expansion projects and a $24 million increase at Northeast G&P. In addition, we had a $188 million net unrealized gain on commodity derivatives, primarily in our Sequent business, partially offset by $93 million of higher operating and administrative expense including
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the impact of higher incentive and equity compensation expense as well as the absence of a prior year benefit associated with a change in employee benefit policy. Beyond these business drivers, we also benefited from the absence of $326 million of impairment-related impacts, partially offset by a higher provision for income taxes.
The net unrealized gain on commodity derivatives includes $168 million related to derivative contracts within the Sequent segment that are not designated as hedges for accounting purposes. Sequent can experience significant earnings volatility from the fair value accounting required for the derivatives used to hedge a portion of the economic value of the underlying transportation and storage portfolio. However, the unrealized fair value measurement gains and losses are offset by valuation changes in the economic value of the underlying transportation and storage portfolio, which is not recognized until the underlying transportation and storage transaction occurs.
Full-year 2021 net income improved by $1.3 billion over the prior year, reflecting $223 million of higher commodity margins, $181 million of increased earnings from equity-method investments within Northeast G&P, $111 million of earnings from upstream operations acquired this year, and $77 million of higher service revenues, partially offset by a $109 million net unrealized losses on commodity derivatives, $74 million of higher depreciation and amortization expense and $206 million of higher operating and administrative costs, including the previously described impacts of incentive and equity compensation expense and the change in employee benefit policy. The higher service revenues reflect $106 million from Transco expansion projects and $63 million in Northeast G&P reduced by lower West service revenues. The improvement over last year also reflects the absence of $1.5 billion in pre-tax charges in 2020 related to impairments of certain assets, equity-method investments, goodwill and goodwill at an equity investee, of which $65 million was attributable to noncontrolling interests. The provision for income taxes changed unfavorably by $432 million primarily due to higher pre-tax income.
The severe winter weather impact in February 2021 and the associated effect on commodity prices is estimated to have had a net favorable impact on our pre-tax results of approximately $77 million, primarily within our commodity margins and results from upstream operations.
Cash flow from operations for both the fourth quarter and full-year periods of 2021 increased as compared to 2020 primarily due to higher operating results exclusive of non-cash charges. The full-year period also benefited from higher distributions from equity-method investments and favorable changes in net working capital, partially offset by higher margin deposits associated with increasing derivative liabilities. Working capital changes compared to the prior year benefited from the absence of $284 million of rate refunds paid in 2020 associated with Transco's completed rate case.

Non-GAAP Measures

Fourth-quarter 2021 Adjusted EBITDA increased by $147 million over the prior year, driven by the previously described benefits from upstream operations and service revenues, as well as $86 million higher proportional EBITDA from Northeast G&P equity-method investments, partially offset by higher operating and administrative costs.
Full-year Adjusted EBITDA increased by $530 million over the prior year, driven by the previously described benefits from commodity margins, upstream operations and service revenues, as well as $209 million higher proportional EBITDA from Northeast G&P equity-method investments, partially offset by higher operating and administrative costs.
Fourth-quarter 2021 Adjusted Income improved by $94 million over the prior year, while full-year Adjusted Income improved by $325 million. Increases for both comparative periods were driven by the previously described impacts to net income, adjusted to remove the effects of net unrealized gains and losses on commodity derivatives, the absence of 2020 impairments, amortization of certain assets from the Sequent acquisition, and accelerated depreciation on decommissioning assets.
Fourth-quarter and full-year 2021 Available Funds From Operations increased by $62 million and $435 million, respectively, compared to the prior periods primarily due to higher operating results exclusive of non-cash charges, while the full-year period also benefited from higher distributions from equity-method investments.


Business Segment Results & Form 10-K

Williams' operations are comprised of the following reportable segments: Transmission & Gulf of Mexico, Northeast G&P, West, Sequent and Other. For more information, see the company's 2021
Form 10-K.
3


Fourth QuarterFull Year
Amounts in millionsModified EBITDAAdjusted EBITDAModified EBITDAAdjusted EBITDA
4Q 20214Q 2020Change4Q 20214Q 2020Change20212020Change20212020Change
Transmission & Gulf of Mexico$685 $486 $199 $685 $644 $41 $2,621 $2,379 $242 $2,623 $2,552 $71 
Northeast G&P459 363 96 459 406 53 1,712 1,489 223 1,712 1,535 177 
West273 283 (10)253 277 (24)1,095 998 97 1,092 990 102 
Sequent169 — 169 17 — 17 (112)— (112)15 — 15 
Other87 (23)110 69 60 178 (15)193 193 28 165 
Total$1,673 $1,109 $564 $1,483 $1,336 $147 $5,494 $4,851 $643 $5,635 $5,105 $530 
Note: Williams uses Modified EBITDA for its segment reporting. Definitions of Modified EBITDA and Adjusted EBITDA and schedules reconciling to net income are included in this news release.


Transmission & Gulf of Mexico

Fourth-quarter and full-year Modified and Adjusted EBITDA improved compared to the prior year, as higher service revenues related to recent expansion projects were partially offset by higher operating and administrative costs. The full-year period also benefited from higher commodity margins and proportional EBITDA from the Discovery equity-method investment. Modified EBITDA for both periods also benefited from the absence of a $170 million 2020 impairment charge, which is excluded from Adjusted EBITDA.


Northeast G&P

Fourth-quarter and full-year 2021 Modified and Adjusted EBITDA increased over the prior year driven by higher gathering volumes from equity-method investments and the benefit of our increased ownership in Blue Racer Midstream, acquired in November 2020. Modified EBITDA for both periods also benefited from the absence of our share of 2020 impairments at equity-method investees, which are excluded from Adjusted EBITDA.
Gross gathering volumes for fourth-quarter 2021, including 100% of operated equity-method investments, increased by 5% over the same period in 2020.
West

Fourth-quarter 2021 Modified and Adjusted EBITDA decreased compared to the prior year as the benefits of higher gathering volumes and rates were more than offset by the absence of certain volume deficiency payments. Modified EBITDA also benefited from a $20 million net unrealized gain on commodity derivatives, which is excluded from Adjusted EBITDA.
Full-year 2021 Modified and Adjusted EBITDA increased over the prior year primarily due to an estimated $55 million net favorable impact from the February 2021 severe winter weather, $96 million of higher commodity margins, and lower operating and administrative costs. These favorable changes were partially offset by lower Barnett deferred revenue amortization and the absence of a deficiency fee, as well as lower proportional EBITDA from equity method investments driven by reduced transportation volumes on Overland Pass Pipeline.

Sequent

Fourth-quarter and full-year 2021 Modified and Adjusted EBITDA reflect the results of this business acquired in July 2021. The fourth-quarter Modified EBITDA was driven by a $168 million net unrealized gain on commodity derivatives, which is excluded from Adjusted EBITDA. The full-year Modified EBITDA loss includes a $109 million net unrealized loss on commodity derivatives, which is excluded from Adjusted EBITDA. The related derivative contracts are not designated as hedges for accounting purposes. Sequent can experience significant earnings volatility from the fair value accounting required for the derivatives used to hedge a portion of the economic value of the underlying transportation and storage portfolio. However, the unrealized fair value measurement gains and losses are offset by valuation changes in the economic value of the underlying transportation and storage portfolio, which is not recognized until the underlying transportation and storage transaction occurs.

4



Other

Fourth-quarter and full-year 2021 Modified and Adjusted EBITDA improved compared to the prior year primarily due to oil and gas producing properties acquired this year. The year-to-date increase reflects an estimated $22 million attributable to the February 2021 severe winter weather. Modified EBITDA for both periods also reflects the absence of a $24 million loss contingency accrual in 2020, which is excluded from Adjusted EBITDA.


2022 Financial Guidance

The company expects 2022 Adjusted EBITDA between $5.6 billion and $6 billion. The company also expects 2022 growth capex between $1.25 billion to $1.35 billion and maintenance capex between $650 million and $750 million, which includes capital for emissions reduction and modernization initiatives. Importantly, Williams anticipates achieving a leverage ratio midpoint of 3.8x, which along with expectations to generate positive free cash flow (after capex and dividends), will allow it to retain financial flexibility. Dividend guidance increased 3.7% on an annualized basis to $1.70 in 2022 from $1.64 in 2021.

Williams 2022 Analyst Day Scheduled for Tomorrow; Materials to be Posted Shortly

Williams is hosting its 2022 Analyst Day event on Tuesday, Feb. 22, 2022 beginning at 8:30 a.m. Eastern Time (7:30 a.m. Central Time). In addition to discussing 2021 results, Williams' management will give in-depth presentations covering the company's natural gas infrastructure strategy to meet growing clean energy demands. These presentations will highlight the company’s efficient operations, disciplined project execution, strong financial position and 2022 financial guidance. Presentation slides and earnings materials will be accessible on the Williams’ Investor Relations website shortly.

Participants who wish to view the live presentation can access the webcast here: https://event.on24.com/wcc/r/3631895/2D57BA768B960ACF8BA9532EE4911350

A replay of the 2022 Analyst Day webcast will also be available on the website for at least 90 days following the event.

About Williams

Williams (NYSE: WMB) is committed to being the leader in providing infrastructure that safely delivers natural gas products to reliably fuel the clean energy economy. Headquartered in Tulsa, Oklahoma, Williams is an industry-leading, investment grade C-Corp with operations across the natural gas value chain including gathering, processing, interstate transportation and storage of natural gas and natural gas liquids. With major positions in top U.S. supply basins, Williams connects the best supplies with the growing demand for clean energy. Williams owns and operates more than 30,000 miles of pipelines system wide – including Transco, the nation’s largest volume and fastest growing pipeline – and handles approximately 30 percent of the natural gas in the United States that is used every day for clean-power generation, heating and industrial use. www.williams.com
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The Williams Companies, Inc.
Consolidated Statement of Income
Year Ended December 31,
202120202019
(Millions, except per-share amounts)
Revenues:
Service revenues$6,001 $5,924 $5,933 
Service revenues – commodity consideration238 129 203 
Product sales4,536 1,671 2,063 
Net gain (loss) on commodity derivatives(148)(5)
Total revenues10,627 7,719 8,201 
Costs and expenses:
Product costs3,931 1,545 1,961 
Processing commodity expenses101 68 105 
Operating and maintenance expenses1,548 1,326 1,468 
Depreciation and amortization expenses1,842 1,721 1,714 
Selling, general, and administrative expenses558 466 558 
Impairment of certain assets182 464 
Impairment of goodwill— 187 — 
Other (income) expense – net14 22 10 
Total costs and expenses7,996 5,517 6,280 
Operating income (loss)2,631 2,202 1,921 
Equity earnings (losses)608 328 375 
Impairment of equity-method investments— (1,046)(186)
Other investing income (loss) – net107 
Interest incurred(1,190)(1,192)(1,218)
Interest capitalized11 20 32 
Other income (expense) – net(43)33 
Income (loss) from continuing operations before income taxes2,073 277 1,064 
Less: Provision (benefit) for income taxes511 79 335 
Income (loss) from continuing operations1,562 198 729 
Income (loss) from discontinued operations— — (15)
Net income (loss)1,562 198 714 
Less: Net income (loss) attributable to noncontrolling interests45 (13)(136)
Net income (loss) attributable to The Williams Companies, Inc.1,517 211 850 
Less: Preferred stock dividends
Net income (loss) available to common stockholders$1,514 $208 $847 
Amounts attributable to The Williams Companies, Inc. available to common stockholders:
Income (loss) from continuing operations$1,514 $208 $862 
Income (loss) from discontinued operations— — (15)
Net income (loss)$1,514 $208 $847 
Basic earnings (loss) per common share:
Income (loss) from continuing operations$1.25 $.17 $.71 
Income (loss) from discontinued operations— — (.01)
Net income (loss)$1.25 $.17 $.70 
Weighted-average shares (thousands)1,215,221 1,213,631 1,212,037 
Diluted earnings (loss) per common share:
Income (loss) from continuing operations$1.24 $.17 $.71 
Income (loss) from discontinued operations— — (.01)
Net income (loss)$1.24 $.17 $.70 
Weighted-average shares (thousands)1,218,215 1,215,165 1,214,011 


6


The Williams Companies, Inc.
Consolidated Balance Sheet

December 31,
20212020
(Millions, except per-share amounts)
ASSETS
Current assets:
Cash and cash equivalents$1,680 $142 
Trade accounts and other receivables1,986 1,000 
Allowance for doubtful accounts(8)(1)
Trade accounts and other receivables – net1,978 999 
Inventories379 136 
Derivative assets301 
Other current assets and deferred charges211 149 
Total current assets4,549 1,429 
Investments5,127 5,159 
Property, plant, and equipment – net29,258 28,929 
Intangible assets – net of accumulated amortization7,402 7,444 
Regulatory assets, deferred charges, and other1,276 1,204 
Total assets$47,612 $44,165 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$1,746 $482 
Accrued liabilities1,201 944 
Long-term debt due within one year2,025 893 
Total current liabilities4,972 2,319 
Long-term debt21,650 21,451 
Deferred income tax liabilities2,453 1,923 
Regulatory liabilities, deferred income, and other4,436 3,889 
Contingent liabilities and commitments
Equity:
Stockholders’ equity:
Preferred stock ($1 par value; 30 million shares authorized at December 31, 2021 and December 31, 2020; 35,000 shares issued at December 31, 2021 and December 31, 2020)
35 35 
Common stock ($1 par value; 1,470 million shares authorized at December 31, 2021 and December 31, 2020; 1,250 million shares issued at December 31, 2021 and 1,248 million shares issued at December 31, 2020)
1,250 1,248 
Capital in excess of par value24,449 24,371 
Retained deficit(13,237)(12,748)
Accumulated other comprehensive income (loss)(33)(96)
Treasury stock, at cost (35 million shares of common stock)
(1,041)(1,041)
Total stockholders’ equity11,423 11,769 
Noncontrolling interests in consolidated subsidiaries2,678 2,814 
Total equity14,101 14,583 
Total liabilities and equity$47,612 $44,165 
7


The Williams Companies, Inc.
Consolidated Statement of Cash Flows

Year Ended December 31,
202120202019
(Millions)
OPERATING ACTIVITIES:
Net income (loss)$1,562 $198 $714 
Adjustments to reconcile to net cash provided (used) by operating activities:
Depreciation and amortization1,842 1,721 1,714 
Provision (benefit) for deferred income taxes509 108 376 
Equity (earnings) losses(608)(328)(375)
Distributions from unconsolidated affiliates757 653 657 
Gain on disposition of equity-method investments— — (122)
(Gain) loss on deconsolidation of businesses— — 29 
Impairment of goodwill— 187 — 
Impairment of equity-method investments— 1,046 186 
Impairment of certain assets182 464 
Net unrealized (gain) loss from derivative instruments109 — (3)
Amortization of stock-based awards81 52 57 
Cash provided (used) by changes in current assets and liabilities:
Accounts receivable(545)(2)34 
Inventories(124)(11)
Other current assets and deferred charges(63)11 21 
Accounts payable643 (7)(46)
Accrued liabilities58 (309)153 
Changes in current and noncurrent derivative assets and liabilities(277)(4)
Other, including changes in noncurrent assets and liabilities(1)(1)(174)
Net cash provided (used) by operating activities3,945 3,496 3,693 
FINANCING ACTIVITIES:
Proceeds from long-term debt2,155 3,899 767 
Payments of long-term debt(894)(3,841)(909)
Proceeds from issuance of common stock10 
Proceeds from sale of partial interest in consolidated subsidiary— — 1,334 
Common dividends paid(1,992)(1,941)(1,842)
Dividends and distributions paid to noncontrolling interests(187)(185)(124)
Contributions from noncontrolling interests36 
Payments for debt issuance costs(26)(20)— 
Other – net(16)(13)(17)
Net cash provided (used) by financing activities(942)(2,085)(745)
INVESTING ACTIVITIES:
Property, plant, and equipment:
Capital expenditures (1)
(1,239)(1,239)(2,109)
Dispositions – net
(8)(36)(40)
Contributions in aid of construction52 37 52 
Purchases of businesses, net of cash acquired(151)— (728)
Proceeds from dispositions of equity-method investments— 485 
Purchases of and contributions to equity-method investments(115)(325)(453)
Other – net(5)(34)
Net cash provided (used) by investing activities(1,465)(1,558)(2,827)
Increase (decrease) in cash and cash equivalents1,538 (147)121 
Cash and cash equivalents at beginning of year142 289 168 
Cash and cash equivalents at end of year$1,680 $142 $289 
_________
(1) Increases to property, plant, and equipment$(1,305)$(1,160)$(2,023)
Changes in related accounts payable and accrued liabilities66 (79)(86)
Capital expenditures$(1,239)$(1,239)$(2,109)
8


Transmission & Gulf of Mexico
(UNAUDITED)
20202021
(Dollars in millions)1st Qtr2nd Qtr3rd Qtr4th QtrYear1st Qtr2nd Qtr3rd Qtr4th Qtr Year
Regulated interstate natural gas transportation, storage, and other revenues (1)
$692 $676 $686 $702 $2,756 $708 $693 $706 $739 $2,846 
Gathering, processing, and transportation revenues
99 78 85 86 348 86 90 74 94 344 
Other fee revenues (1)
18 18 
Commodity margins12 12 35 
Operating and administrative costs (1)
(184)(189)(192)(192)(757)(198)(197)(215)(226)(836)
Other segment income (expenses) - net (1)
(8)16 33 
Impairment of certain assets— — — (170)(170)— (2)— — (2)
Proportional Modified EBITDA of equity-method investments
44 42 38 42 166 47 46 45 45 183 
Modified EBITDA662 615 616 486 2,379 660 646 630 685 2,621 
Adjustments158 173 — — — 
Adjusted EBITDA$669 $617 $622 $644 $2,552 $660 $648 $630 $685 $2,623 
Statistics for Operated Assets
Natural Gas Transmission
Transcontinental Gas Pipe Line
Avg. daily transportation volumes (Tbtu)13.8 12.0 12.8 13.2 12.9 14.1 13.1 13.8 14.2 13.8 
Avg. daily firm reserved capacity (Tbtu)17.7 17.5 18.0 18.2 17.9 18.6 18.3 18.7 19.2 18.7 
Northwest Pipeline LLC
Avg. daily transportation volumes (Tbtu)2.6 1.9 1.8 2.5 2.2 2.8 2.2 2.0 2.6 2.4 
Avg. daily firm reserved capacity (Tbtu)3.9 3.9 3.9 3.8 3.8 3.8 3.8 3.8 3.8 3.8 
Gulfstream - Non-consolidated
Avg. daily transportation volumes (Tbtu)1.2 1.2 1.3 1.1 1.2 1.0 1.2 1.3 1.1 1.2 
Avg. daily firm reserved capacity (Tbtu)1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 
Gathering, Processing, and Crude Oil Transportation
Consolidated (2)
Gathering volumes (Bcf/d) 0.30 0.23 0.23 0.26 0.25 0.28 0.31 0.25 0.29 0.28 
Plant inlet natural gas volumes (Bcf/d) 0.58 0.50 0.40 0.46 0.48 0.46 0.41 0.44 0.48 0.45 
NGL production (Mbbls/d)32 25 27 30 29 29 26 28 33 29 
NGL equity sales (Mbbls/d)
Crude oil transportation volumes (Mbbls/d)138 92 121 132 121 130 151 120 135 134 
Non-consolidated (3)
Gathering volumes (Bcf/d) 0.35 0.31 0.26 0.30 0.30 0.36 0.40 0.29 0.36 0.35 
Plant inlet natural gas volumes (Bcf/d) 0.35 0.31 0.25 0.30 0.30 0.37 0.40 0.29 0.36 0.35 
NGL production (Mbbls/d)24 23 17 21 21 28 31 21 27 27 
NGL equity sales (Mbbls/d) (4)
11 
(1) Excludes certain amounts associated with revenues and operating costs for tracked or reimbursable charges. Also, Operating and administrative costs increased in 2021, particularly in third-quarter and fourth-quarter, due to higher incentive and equity compensation expense as well as the absence of prior year benefit associated with a change in employee benefit policy.
(2) Excludes volumes associated with equity-method investments that are not consolidated in our results.
(3) Includes 100% of the volumes associated with operated equity-method investments.
(4) Updated to reflect revised NGL equity sales (Mbbls/d) for second-quarter 2021.
9


Northeast G&P
(UNAUDITED)
20202021
(Dollars in millions)1st Qtr2nd Qtr3rd Qtr4th Qtr Year1st Qtr2nd Qtr3rd Qtr4th Qtr Year
Gathering, processing, transportation, and fractionation revenues$312 $308 $332 $327 $1,279 $311 $315 $340 $342 $1,308 
Other fee revenues (1)
25 25 22 24 96 25 25 26 27 103 
Commodity margins— (2)
Operating and administrative costs (1)
(87)(86)(85)(84)(342)(89)(86)(94)(103)(372)
Other segment income (expenses) - net(2)(4)(4)(9)(1)(7)(3)(3)(14)
Impairment of certain assets— — — (12)(12)— — — — — 
Proportional Modified EBITDA of equity-method investments120 126 121 106 473 153 162 175 192 682 
Modified EBITDA369 370 387 363 1,489 402 409 442 459 1,712 
Adjustments(7)43 46 — — — — — 
Adjusted EBITDA$370 $363 $396 $406 $1,535 $402 $409 $442 $459 $1,712 
Statistics for Operated Assets
Gathering and Processing
Consolidated (2)
Gathering volumes (Bcf/d) 4.27 4.14 4.47 4.36 4.31 4.19 4.10 4.26 4.38 4.24 
Plant inlet natural gas volumes (Bcf/d)1.23 1.22 1.36 1.45 1.32 1.41 1.62 1.64 1.62 1.57 
NGL production (Mbbls/d)93 93 114 111 103 102 115 121 120 115 
NGL equity sales (Mbbls/d)— 
Non-consolidated (3)
Gathering volumes (Bcf/d) 4.40 4.68 4.94 5.11 4.78 5.40 5.47 5.62 5.61 5.52 
(1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges. Also, Operating and administrative costs increased in 2021, particularly in third quarter and fourth quarter, due to higher incentive and equity compensation expense as well as the absence of a prior year benefit associated with a change in employee benefit policy.
(2) Includes volumes associated with Susquehanna Supply Hub, the Northeast JV, and Utica Supply Hub, all of which are consolidated.
(3) Includes 100% of the volumes associated with operated equity-method investments, including the Laurel Mountain Midstream partnership; and the Bradford Supply Hub and the Marcellus South Supply Hub within the Appalachia Midstream Services partnership.

10


West
(UNAUDITED)
20202021
(Dollars in millions)1st Qtr2nd Qtr3rd Qtr4th QtrYear 1st Qtr2nd Qtr3rd Qtr4th Qtr Year
Gathering, processing, transportation, storage, and fractionation revenues
$299 $297 $288 $320 $1,204 $262 $278 $294 $308 $1,142 
Other fee revenues (1)
13 16 15 50 21 
Commodity margins29 30 23 85 128 44 63 20 255 
Net unrealized gain (loss) from derivative instruments(1)(2)— — (3)(17)20 — 
Operating and administrative costs (1)
(115)(111)(108)(105)(439)(106)(114)(105)(110)(435)
Other segment income (expenses) - net(5)— (7)— (12)— (1)(1)
Proportional Modified EBITDA of equity-method investments
28 24 30 28 110 25 22 27 31 105 
Modified EBITDA215 253 247 283 998 315 231 276 273 1,095 
Adjustments(1)(2)(6)(8)— — 17 (20)(3)
Adjusted EBITDA$216 $252 $245 $277 $990 $315 $231 $293 $253 $1,092 
Statistics for Operated Assets
Gathering and Processing
Consolidated (2)
Gathering volumes (Bcf/d) 3.43 3.40 3.28 3.19 3.33 3.11 3.21 3.31 3.36 3.25 
Plant inlet natural gas volumes (Bcf/d)1.26 1.33 1.31 1.13 1.25 1.20 1.20 1.29 1.22 1.23 
NGL production (Mbbls/d)35 51 71 39 49 36 39 49 43 41 
NGL equity sales (Mbbls/d)12 25 34 18 22 13 16 19 15 16 
Non-consolidated (3)
Gathering volumes (Bcf/d)0.20 0.24 0.28 0.30 0.25 0.27 0.30 0.28 0.28 0.29 
Plant inlet natural gas volumes (Bcf/d) 0.20 0.23 0.28 0.29 0.25 0.27 0.30 0.28 0.28 0.28 
NGL production (Mbbls/d)17 23 26 26 23 24 32 32 32 29 
NGL and Crude Oil Transportation volumes (Mbbls/d) (4)
227 142 156 147 168 85 101 119 132 109 
(1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges. Also, Operating and administrative costs increased in 2021, particularly in third quarter and fourth quarter, due to higher incentive and equity compensation expense as well as the absence of a prior year benefit associated with a change in employee benefit policy.
(2) Excludes volumes associated with equity-method investments that are not consolidated in our results.
(3) Includes 100% of the volumes associated with operated equity-method investments, including Rocky Mountain Midstream.
(4) Includes 100% of the volumes associated with operated equity-method investments, including the Overland Pass Pipeline Company and Rocky Mountain Midstream.
11


Sequent
(UNAUDITED)
20202021
(Dollars in millions)1st Qtr2nd Qtr3rd Qtr4th QtrYear 1st Qtr2nd Qtr3rd Qtr4th Qtr Year
Commodity margins$— $— $— $— $— $— $— $$14 $23 
Net unrealized gain (loss) from derivative instruments— — — — — — — (277)168 (109)
Operating and administrative costs— — — — — — — (12)(14)(26)
Other segment income (expenses) - net— — — — — — — (1)— 
Modified EBITDA       (281)169 (112)
Adjustments— — — — — — — 279 (152)127 
Adjusted EBITDA$ $ $ $ $ $ $ $(2)$17 $15 
Statistics
Product Sales
Sales volumes (Bcf/day)— — — — — — — 6.62 6.51 6.56 
12


Capital Expenditures and Investments
(UNAUDITED)
20202021
(Dollars in millions)1st Qtr2nd Qtr3rd Qtr4th QtrYear1st Qtr2nd Qtr3rd Qtr4th Qtr Year
Capital expenditures:
Transmission & Gulf of Mexico$185 $181 $192 $190 $748 $109 $209 $172 $173 $663 
Northeast G&P46 41 32 38 157 40 46 41 22 149 
West72 80 93 65 310 33 76 49 45 203 
Other24 78 94 10 42 224 
Total (1)
$306 $307 $325 $301 $1,239 $260 $425 $272 $282 $1,239 
Purchases of and contributions to equity-method investments:
Transmission & Gulf of Mexico$$$34 $$37 $$$$12 $26 
Northeast G&P27 30 47 174 278 11 24 30 24 89 
West— 10 — — — — — 
Total$30 $36 $84 $175 $325 $14 $30 $35 $36 $115 
Summary:
Transmission & Gulf of Mexico$186 $182 $226 $191 $785 $112 $215 $177 $185 $689 
Northeast G&P73 71 79 212 435 51 70 71 46 238 
West74 85 96 65 320 33 76 49 45 203 
Other24 78 94 10 42 224 
Total$336 $343 $409 $476 $1,564 $274 $455 $307 $318 $1,354 
Capital investments:
Increases to property, plant, and equipment$254 $327 $331 $248 $1,160 $263 $430 $308 $304 $1,305 
Purchases of businesses, net of cash acquired— — — — — — — 126 25 151 
Purchases of and contributions to equity-method investments30 36 84 175 325 14 30 35 36 115 
Purchases of other long-term investments— — — — — — — — 
Total$284 $363 $415 $423 $1,485 $277 $460 $469 $371 $1,577 
(1) Increases to property, plant, and equipment
$254 $327 $331 $248 $1,160 $263 $430 $308 $304 $1,305 
Changes in related accounts payable and accrued liabilities52 (20)(6)53 79 (3)(5)(36)(22)(66)
Capital expenditures$306 $307 $325 $301 $1,239 $260 $425 $272 $282 $1,239 
Contributions from noncontrolling interests$$$$$$$$— $$
Contributions in aid of construction$14 $$$10 $37 $19 $17 $10 $$52 
Proceeds from disposition of equity-method investments$— $— $— $— $— $— $$— $— $

13


Non-GAAP Measures
This news release and accompanying materials may include certain financial measures – adjusted EBITDA, adjusted income (“earnings”), adjusted earnings per share, available funds from operations and dividend coverage ratio – that are non-GAAP financial measures as defined under the rules of the SEC.

Our segment performance measure, modified EBITDA, is defined as net income (loss) before income (loss) from discontinued operations, income tax expense, net interest expense, equity earnings from equity-method investments, other net investing income, impairments of equity investments and goodwill, depreciation and amortization expense, and accretion expense associated with asset retirement obligations for nonregulated operations. We also add our proportional ownership share (based on ownership interest) of modified EBITDA of equity-method investments.

Adjusted EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations. Such items are excluded from net income to determine adjusted income and adjusted earnings per share. Management believes this measure provides investors meaningful insight into results from ongoing operations.

Available funds from operations is defined as cash flow from operations excluding the effect of changes in working capital and certain other changes in noncurrent assets and liabilities, reduced by preferred dividends and net distributions to noncontrolling interests.

This news release is accompanied by a reconciliation of these non-GAAP financial measures to their nearest GAAP financial measures. Management uses these financial measures because they are accepted financial indicators used by investors to compare company performance. In addition, management believes that these measures provide investors an enhanced perspective of the operating performance of assets and the cash that the business is generating.

Neither adjusted EBITDA, adjusted income, nor available funds from operations are intended to represent cash flows for the period, nor are they presented as an alternative to net income or cash flow from operations. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles.
14


Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income
(UNAUDITED)
20202021
(Dollars in millions, except per-share amounts)1st Qtr2nd Qtr3rd Qtr4th QtrYear1st Qtr2nd Qtr
3rd Qtr (1)
4th Qtr Year
Income (loss) attributable to The Williams Companies, Inc. available to common stockholders$(518)$303 $308 $115 $208 $425 $304 $164 $621 $1,514 
Income (loss) - diluted earnings (loss) per common share (2)
$(.43)$.25 $.25 $.09 $.17 $.35 $.25 $.13 $.51 $1.24 
Adjustments:
Transmission & Gulf of Mexico
Northeast Supply Enhancement project development costs$— $$$— $$— $— $— $— $— 
Impairment of certain assets— — — 170 170 — — — 
Pension plan settlement charge— — — — — — — 
Adjustment of Transco’s regulatory asset for post-WPZ Merger state deferred income tax change consistent with filed rate case— — — — — — — — 
Benefit of change in employee benefit policy— (3)(6)(13)(22)— — — — — 
Reversal of costs capitalized in prior periods— — 10 11 — — — — — 
Severance and related costs(1)— — — — — — 
Total Transmission & Gulf of Mexico adjustments158 173 — — — 
Northeast G&P
Share of early debt retirement gain at equity-method investment
— (5)— — (5)— — — — — 
Share of impairment of certain assets at equity-method investments
— — 11 36 47 — — — — — 
Pension plan settlement charge— — — — — — — — 
Impairment of certain assets— — — 12 12 — — — — — 
Benefit of change in employee benefit policy— (2)(2)(5)(9)— — — — — 
Total Northeast G&P adjustments(7)43 46 — — — — — 
West
Pension plan settlement charge— — — — — — — — 
Benefit of change in employee benefit policy— (1)(2)(6)(9)— — — — — 
Net unrealized (gain) loss from derivative instruments
— — — — — — — 17 (20)(3)
Total West adjustments(1)(2)(6)(8)— — 17 (20)(3)
Sequent
Amortization of purchase accounting inventory fair value adjustment— — — — — — — 16 18 
Net unrealized (gain) loss from derivative instruments
— — — — — — — 277 (168)109 
Total Sequent adjustments— — — — — — — 279 (152)127 
Other
Regulatory asset reversals from impaired projects
— — 15 — — — — — 
Expenses associated with Sequent acquisition and transition— — — — — — — 
Net unrealized (gain) loss from derivative instruments
— — — — — — 16 (20)— 
Reversal of costs capitalized in prior periods— — — — — — — — 
Pension plan settlement charge— — — — — — — — 
Accrual for loss contingencies— — — 24 24 — — 10 
Total Other adjustments— — 11 32 43 19 (18)15 
Adjustments included in Modified EBITDA(6)24 227 254 11 315 (190)141 
Adjustments below Modified EBITDA
Accelerated depreciation for decommissioning assets— — — — — — 20 13 — 33 
Amortization of intangible assets from Sequent acquisition (1)
— — — — — — — 21 (3)18 
Impairment of equity-method investments
938 — — 108 1,046 — — — — —