Williams Companies (WMB) 10-K risk factor changes: FY2019 vs FY2018

[removed: FORWARD-LOOKING] [added: FORWARD-LOOKING] STATEMENTS AND CAUTIONARY [removed: STATEMENT][added: STATEMENT]

[removed: FOR] [added: FOR] PURPOSES OF THE “SAFE HARBOR” PROVISIONS [removed: OF][added: OF]

[removed: THE] [added: THE] PRIVATE SECURITIES LITIGATION REFORM ACT OF [removed: 1995][added: 1995]

Forward-looking statements are based on numerous assumptions, [removed: uncertainties] [added: uncertainties,] and risks that could cause future events or results to be materially different from those stated or implied in this report.

| • | Whether we are able to successfully identify, [removed: evaluate] [added: evaluate,] and timely execute our capital projects and investment opportunities; |

| • | The impact of existing and future laws and [removed: regulations (including but not limited to the Tax Cuts and Jobs Act of 2017),] [added: regulations,] the regulatory environment, environmental liabilities, and litigation, as well as our ability to obtain necessary permits and approvals, and achieve favorable rate proceeding outcomes; |

[removed: RISK FACTORS][added: RISK FACTORS]

[removed: Risks] [added: Risks] Related to Our [removed: Business][added: Business]

[removed: The] [added: The] financial condition of our natural gas transportation and midstream businesses is dependent on the continued availability of natural gas supplies in the supply basins that we access and demand for those supplies in the markets we [removed: serve.][added: serve.]

In addition, low prices for natural gas, regulatory limitations, or the lack of available capital [removed: could] [added: have, and may continue to,] adversely affect the development and production of [added: existing or] additional natural gas [removed: reserves,] [added: reserves and] the installation of gathering, storage, and pipeline transportation [removed: facilities and the import and export of natural gas supplies.][added: facilities.]

[removed: Localized low] [added: Low] natural gas prices in one or more of our existing supply basins, whether caused by a lack of infrastructure or otherwise, could also result in depressed natural gas production in such basins and limit the supply of natural gas made available to us.

[removed: Prices] [added: Prices] for natural gas, NGLs, oil, and other commodities, are volatile and this volatility has and could continue to adversely affect our financial results, cash flows, access to capital, and ability to maintain our existing [removed: businesses.][added: businesses.]

[added: Prices affect the amount of cash flow available] for capital expenditures and our ability to borrow money or raise additional capital.

[removed: We] [added: We] are exposed to the credit risk of our customers and counterparties, and our credit risk management will not be able to completely eliminate such [removed: risk.][added: risk.]

Generally, our customers are rated investment grade, are otherwise considered creditworthy, [removed: or] are required to make prepayments or provide security to satisfy credit [removed: concerns.][added: concerns or are dependent upon us, in some cases without a readily available alternative, to provide necessary services.]

In a low commodity price environment certain of our customers [added: have been or] could be negatively impacted, causing them significant economic stress [removed: including,] [added: resulting,] in some cases, [removed: to file for] [added: in a customer] bankruptcy [removed: protection] [added: filing] or [added: an effort] to renegotiate [added: our] contracts.

To the extent one or more of our key customers commences bankruptcy proceedings, our contracts with the customers may be subject to rejection under applicable provisions of the United States Bankruptcy [removed: Code, or] [added: Code or, if we so agree,] may be renegotiated.

Further, during any such bankruptcy proceeding, prior to assumption, rejection or renegotiation of such contracts, the bankruptcy court may temporarily authorize the payment of value for our services less than contractually required, which could have a material adverse effect on our business, financial condition, results [removed: of operations, and cash flows.]

[removed: We] [added: We] face opposition to operation and expansion of our pipelines and facilities from various individuals and [removed: groups.][added: groups.]

[removed: We] [added: We] may not be able to grow or effectively manage our [removed: growth.][added: growth.]

[removed: Holders] [added: Holders] of our common stock may not receive dividends in the amount expected or any [removed: dividends.][added: dividends.]

[removed: Our] [added: Our] industry is highly competitive and increased competitive pressure could adversely affect our business and operating [removed: results.][added: results.]

[removed: We] [added: We] do not own 100 percent of the equity interests of certain subsidiaries, including the Partially Owned Entities, which may limit our ability to operate and control these subsidiaries.

Certain operations, including the Partially Owned Entities, are conducted through arrangements that may limit our ability to operate and control these [removed: operations.][added: operations.]

[removed: We] [added: We] may not be able to replace, extend, or add additional customer contracts or contracted volumes on favorable terms, or at all, which could affect our financial condition, the amount of cash available to pay dividends, and our ability to [removed: grow.][added: grow.]

[removed: Certain] [added: Certain] of our gas pipeline services are subject to long-term, fixed-price contracts that are not subject to adjustment, even if our cost to perform such services exceeds the revenues received from such [removed: contracts.][added: contracts.]

[removed: Some] [added: Some] of our businesses are exposed to supplier concentration risks arising from dependence on a single or a limited number of [removed: suppliers.][added: suppliers.]

[removed: If our business is unable to adequately diversify or otherwise mitigate such supplier concentration] risks [removed: and such risks] were realized, such businesses could be subject to reduced revenues and increased expenses, which could have a material adverse effect on our financial condition, results of operation, and cash flows.

[removed: Failure] [added: Failure] of our service providers or disruptions to our outsourcing relationships might negatively impact our ability to conduct our [removed: business.][added: business.]

[removed: An] [added: An] impairment of our assets, including property, plant, and equipment, intangible assets, and/or equity-method investments, could reduce our [removed: earnings.][added: earnings.]

[removed: Our] [added: Our] operations are subject to operational hazards and unforeseen [removed: interruptions.][added: interruptions.]

[removed: We] [added: We] do not insure against all potential risks and losses and could be seriously harmed by unexpected liabilities or by the inability of our insurers to satisfy our [removed: claims.][added: claims.]

[removed: Our] [added: Our] assets and operations, as well as our customers’ assets and operations, can be adversely affected by weather and other natural [removed: phenomena.][added: phenomena.]

[removed: Our] [added: Our] business could be negatively impacted by acts of terrorism and related [removed: disruptions.][added: disruptions.]

[removed: A] [added: A] breach of our information technology infrastructure, including a breach caused by a cybersecurity attack on us or third parties with whom we are interconnected, may interfere with the safe operation of our assets, result in the disclosure of personal or proprietary information, and harm our [removed: reputation.][added: reputation.]

We face unlawful attempts to gain access to our information technology infrastructure, including coordinated [added: attacks from hackers, whether state-sponsored groups, “hacktivists”, or private individuals.]

[removed: We also face attempts to] gain access to information related to our assets through attempts to obtain unauthorized access by targeting acts of deception against individuals with legitimate access to physical locations or information.

[removed: If] [added: If] third-party pipelines and other facilities interconnected to our pipelines and facilities become unavailable to transport natural gas and NGLs or to treat natural gas, our revenues could be adversely [removed: affected.][added: affected.]

[removed: Our] [added: Our] operating results for certain components of our business might fluctuate on a seasonal [removed: basis.][added: basis.]

[removed: We] [added: We] do not own all of the land on which our pipelines and facilities are located, which could disrupt our [removed: operations.][added: operations.]

| • | Increasing scrutiny and changing expectations from stakeholders with respect to our environmental, social and governance practices; |

| • | The physical and financial risks associated with climate change; |

The import and export of natural gas supplies may also be affected by such conditions.

of operations, and cash flows.

If our business is unable to adequately diversify or otherwise mitigate such supplier concentration risks and such

Increasing scrutiny and changing expectations from stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.

Companies across all industries are facing increasing scrutiny from stakeholders related to their environmental, social and governance (“ESG”) practices.

Investor advocacy groups, certain institutional investors, investment funds and other influential investors are also increasingly focused on ESG practices and in recent years have placed increasing importance on the implications and social cost of their investments.

Regardless of the industry, investors’ increased focus and activism related to ESG and similar matters may hinder access to capital, as investors may decide to reallocate capital or to not commit capital as a result of their assessment of a company’s ESG practices.

Companies which do not adapt to or comply with investor or stakeholder expectations and standards, which are evolving, or which are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage and the business, financial condition, and/or stock price of such a company could be materially and adversely affected.

We face pressures from our stockholders, who are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability.

Our stockholders may require us to implement ESG procedures or standards in order to remain invested in us or before they may make further investments in us.

Additionally, we may face reputational challenges in the event our ESG procedures or standards do not meet the standards set by certain constituencies.

We have adopted certain practices as highlighted in our 2018 Sustainability Report, including with respect to air emissions, biodiversity and land use, climate change and environmental stewardship.

It is possible, however, that our stockholders might not be satisfied with our sustainability efforts or the speed of their adoption.

If we do not meet our stockholders’ expectations, our business, ability to access capital, and/or our stock price could be harmed.

Additionally, adverse effects upon the oil and gas industry related to the worldwide social and political environment, including uncertainty or instability resulting from climate change, changes in political leadership and environmental policies, changes in geopolitical-social views toward fossil fuels and renewable energy, concern about the environmental impact of climate change and investors’ expectations regarding ESG matters, may also adversely affect demand for our services.

Any long-term material adverse effect on the oil and gas industry could have a significant financial and operational adverse impact on our business.

The occurrence of any of the foregoing could have a material adverse effect on the price of our stock and our business and financial condition.

We may be subject to physical and financial risks associated with climate change.

The threat of global climate change may create physical and financial risks to our business.

Energy needs vary with weather conditions.

To the extent weather conditions may be affected by climate change, energy use could increase or decrease depending on the duration and magnitude of any changes.

Increased energy use due to weather changes may require us to invest in more pipelines and other infrastructure to serve increased demand.

A decrease in energy use due to weather changes may affect our financial condition through decreased revenues.

Extreme weather conditions in general require more system backup, adding to costs, and can contribute to increased system stresses, including service interruptions.

Weather conditions outside of our operating territory could also have an impact on our revenues.

To the extent the frequency of extreme weather events increases, this could increase our cost of providing service.

We may not be able to pass on the higher costs to our customers or recover all costs related to mitigating these physical risks.

Additionally, many climate models indicate that global warming is likely to result in rising sea levels and increased frequency and severity of weather events, which may lead to higher insurance costs, or a decrease in available coverage, for our assets in areas subject to severe weather.

These climate-related changes could damage our physical assets, especially operations located in low-lying areas near coasts and river banks, and facilities situated in hurricane-prone and rain-susceptible regions.

Our business could also be affected by the potential for lawsuits against GHG emitters, based on links drawn between GHG emissions and climate change.

We also face attempts to

In addition, actions

In addition, we received an opinion from our outside tax advisor to the effect

credit or performance risk.

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Prices affect the amount of cash flow available

attacks from hackers, whether state-sponsored groups, “hacktivists”, or private individuals.

which could have an adverse effect on our business or financial results.

stricter conditions on or revocation of permits, the issuance of injunctions limiting or preventing some or all of our operations, and delays or denials in granting permits.

We expect that certain aspects of the Tax Cuts and Jobs Act signed into law on December 22, 2017 (Tax Reform), including regulatory liabilities relating to reduced corporate federal income tax rates, could adversely impact our financial condition and our future financial results.

Tax Reform made significant changes to the U.S. federal income tax rules applicable to both individuals and entities, including among other things, a reduction in corporate federal income tax rates.

The rates we charge to our customers are subject to the rate-making policies of the FERC.

These policies permit us to include in our cost-of-service an income tax allowance that includes a deferred income tax component.

Although we expect the decreased federal income tax rates will require us to return amounts to certain customers through future rates and have recognized a regulatory liability, the details of any regulatory implementation guidance remain uncertain.

[removed: General][added: General]

These services include natural gas gathering, processing, treating, and compression, NGL fractionation and transportation, crude oil production handling and transportation, marketing services for NGL, [added: crude] oil and natural gas, as well as storage facilities.

[removed: Beginning in] [added: As of December 31, 2019, our operations are presented within] the [removed: third-quarter 2018,] [added: following reportable segments: Atlantic-Gulf, Northeast G&P, and West,] consistent with the manner in which our chief operating decision maker evaluates performance and allocates [removed: resources, our operations are now presented within the following reportable segments: Northeast G&P, Atlantic-Gulf, and West.][added: resources.]

| • | Northeast G&P is comprised of our midstream [removed: gathering] [added: gathering, processing,] and [removed: processing] [added: fractionation] businesses in the Marcellus Shale region primarily in Pennsylvania, New York, and [removed: West Virginia and] the Utica Shale region of eastern Ohio, as well as a [removed: 66] [added: 65] percent interest in [removed: Cardinal] [added: our Northeast JV] (a consolidated [removed: entity),] [added: variable interest entity) which operates in West Virginia, Ohio, and Pennsylvania,] a [removed: 62] [added: 66] percent [removed: equity-method investment] [added: interest] in [removed: UEOM,] [added: Cardinal (a consolidated variable interest entity) which operates in Ohio,] a 69 percent equity-method investment in Laurel Mountain, a 58 percent equity-method investment in Caiman II, and Appalachia Midstream Services, LLC, which owns equity-method investments with an approximate average 66 percent interest in multiple gas gathering systems in the Marcellus Shale (Appalachia Midstream Investments). |

| • | Atlantic-Gulf is comprised of our interstate natural gas pipeline, Transco, and [removed: significant] natural gas gathering and processing and crude oil production handling and transportation assets in the Gulf Coast region, including a 51 percent interest in Gulfstar One (a consolidated [added: variable interest] entity), which is a proprietary floating production system, [removed: and various petrochemical and feedstock pipelines in the Gulf Coast region,] as well as a 50 percent equity-method investment in Gulfstream, a 60 percent equity-method investment in Discovery, and a 41 percent [removed: interest] [added: equity-method investment] in Constitution [removed: (a consolidated entity), which is developing a pipeline project (see Note 4 – Variable Interest Entities] [added: as] of [removed: Notes to Consolidated Financial Statements).] [added: December 31, 2019.] |

| • | West is comprised of our interstate natural gas pipeline, Northwest Pipeline, and our [added: gas] gathering, processing, and treating operations in [removed: Colorado, Wyoming,] [added: the Rocky Mountain region of Colorado] and [added: Wyoming,] the Barnett Shale region of north-central Texas, the Eagle Ford Shale region of south Texas, the Haynesville Shale region of northwest Louisiana, and the Mid-Continent region which includes the Anadarko, Arkoma, Delaware, and Permian basins. This segment also includes our NGL and natural gas marketing business, storage facilities, an undivided 50 percent interest in an NGL fractionator near Conway, Kansas, [removed: and] a 50 percent equity-method investment in OPPL, a 50 percent [removed: interest in Jackalope (an] equity-method investment [removed: following deconsolidation as of June 30, 2018), a 50 percent equity-method investment] in RMM, [added: and] a 15 percent equity-method investment in Brazos Permian [removed: II,] [added: II. West also included our former natural gas gathering] and [added: processing assets in the Four Corners area of New Mexico and Colorado, which were sold during the fourth quarter of 2018 (see Note 3 – Acquisitions and Divestitures of Notes to Consolidated Financial Statements), and] our [removed: previously owned] [added: former] 50 percent [added: interest in Jackalope (an] equity-method investment [removed: in the Delaware basin gas gathering system (DBJV)] [added: following deconsolidation as of June 30, 2018), which was sold] in [removed: the Mid-] [added: April 2019,] |

[removed: Continent region (see] [added: See] Note 6 – Investing Activities of Notes to Consolidated Financial [removed: Statements).][added: Statements for our more significant equity-method investees.]

| • | Other includes [added: minor business activities that are not operating segments, as well as corporate operations. Other also includes] our previously owned operations, including an 88.5 percent undivided interest in an olefins production facility in Geismar, Louisiana, which was sold in July 2017 (see Note 3 – [added: Acquisitions and] Divestitures of Notes to Consolidated Financial Statements), and a refinery grade propylene splitter in the Gulf region, which was sold in June 2017. [removed: This segment also included our previously owned Canadian assets, which included an oil sands offgas processing plant near Fort McMurray, Alberta, and an NGL/olefin fractionation facility at Redwater, Alberta. In September 2016, these Canadian operations were sold. Other also includes minor business activities that are not operating segments, as well as corporate operations.] |

[removed: Dividends][added: Dividends]

In December [removed: 2018,] [added: 2019,] we paid a regular quarterly dividend of [removed: $0.34] [added: $0.38] per share.

On [removed: February 20, 2019,] [added: January 28, 2020,] our board of directors approved a regular quarterly dividend of [removed: $0.38] [added: $0.40] per share payable on March [removed: 25, 2019.][added: 30, 2020.]

[removed: Overview][added: Overview]

[removed: Net] [added: *Net] income (loss) attributable to The Williams Companies, [removed: Inc.,] [added: Inc.*,] for the year ended December 31, [removed: 2018, decreased by $2.329] [added: 2019, increased $1.005] billion compared to the year ended December 31, [removed: 2017, reflecting a $2.112 billion increase to the provision for income taxes driven by the absence of a 2017 benefit resulting from Tax Reform and a $159 million decrease in operating income.][added: 2018, reflecting:]

(See Note 1 – General, Description of Business, Basis of Presentation, and Summary of Significant Accounting [removed: Policies of Notes to Consolidated Financial Statements.)]

[removed: Service] [added: The net sum of *Service] revenues [removed: -] [added: –] commodity [removed: consideration plus Product sales, less Product costs] [added: consideration,* *Product sales,* *Product costs,*] and [removed: Processing] [added: *Processing] commodity [removed: expenses represents the margin that we have historically characterized as] [added: expenses* comprise our] commodity [removed: margin.][added: margins.]

[added: | • | The absence of $20 million in costs in 2018 associated with the WPZ Merger] (See Note 1 – General, Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies of Notes to Consolidated Financial [removed: Statements.)][added: Statements); |]

[removed: Filing] [added: Filing] of Rate [removed: Case][added: Case]

The specific rates that reflected a rate decrease were accepted, without suspension, to be effective October 1, 2018, as requested by Transco, and [removed: will] [added: were] not [removed: be] subject to refund.

[removed: RMM Equity-Method Investment][added: Equity-Method Investments]

[removed: As a result of this sale, we recorded a gain] [added: *Gain on sale] of [removed: approximately $591] [added: certain assets and businesses* reflects an $81] million [removed: within the West segment in] [added: gain from] the [removed: fourth quarter] [added: sale] of [added: our Gulf Coast pipeline system assets in fourth-quarter] 2018 (see Note 3 – [added: Acquisitions and] Divestitures of Notes to Consolidated Financial Statements).

[removed: In November 2018, we completed] [added: | • | A $20 million gain on] the sale of certain assets and operations located in the Gulf Coast [removed: area for $177 million in cash.][added: area, as previously mentioned. |]

[removed: As a result] [added: | • | The absence] of [removed: this sale, we recorded] a [removed: gain of approximately $101] [added: $20] million [removed: in] [added: gain on] the [removed: fourth quarter of 2018, consisting] [added: sale] of [removed: $81 million in our Atlantic-Gulf segment] [added: certain assets] and [removed: $20 million] [added: operations located] in [removed: Other] [added: the Gulf Coast area in 2018] (see Note 3 – [added: Acquisitions and] Divestitures of Notes to Consolidated Financial Statements). [added: |]

[removed: We recorded] [added: and] our [removed: interest in the partnership as an] [added: previously owned 50 percent] equity-method investment [removed: and recognized a gain on] [added: in] the [removed: deconsolidation of our contributed assets of $141 million] [added: Delaware basin gas gathering system (DBJV)] (see Note 6 – Investing Activities of Notes to Consolidated Financial Statements).

[removed: Expansion] [added: Expansion] Project [removed: Updates][added: Updates]

[removed: Northeast G&P][added: Northeast JV]

[removed: Atlantic-Gulf][added: *Atlantic-Gulf*]

[removed: We placed a portion of the mainline] [added: The] project [removed: facilities] [added: was placed] into service in [removed: September 2017, which] [added: December 2019 and] increased capacity by [removed: 400] [added: 65] Mdth/d.

[removed: In total, the] [added: The full] project increased [removed: Transco’s] capacity by [removed: 1,700] [added: 190] Mdth/d.

[removed: Commodity Prices][added: Commodity Prices]

NGL per-unit margins were approximately [removed: 19] [added: 44] percent [removed: higher] [added: lower] in [removed: 2018] [added: 2019] compared to [removed: 2017] [added: 2018] primarily due to a [removed: 22] [added: 31] percent [removed: increase] [added: and a 44 percent decrease] in [removed: realized] per-unit non-ethane [removed: prices] and [added: ethane sales prices, respectively, slightly offset by] an approximate [removed: 9] [added: 10] percent decrease in per-unit natural gas feedstock prices.

[removed: Company Outlook][added: Company Outlook]

Our growth capital and investment expenditures in [removed: 2019] [added: 2020] are expected to be in a range from [removed: $2.7] [added: $1.1] billion to [removed: $2.9] [added: $1.3] billion.

Growth capital spending in [removed: 2019] [added: 2020] includes Transco expansions, all of which are fully contracted with firm transportation agreements, and [removed: continuing to develop] our [removed: gathering and processing infrastructure] [added: Bluestem NGL pipeline project] in the [removed: Northeast G&P and West segments.][added: Mid-Continent region.]

| • | General economic, financial markets, or further industry [removed: downturn,] [added: downturns,] including increased interest rates; |

[removed: Expansion Projects][added: Expansion Projects]

[removed: Northeast G&P][added: *Northeast G&P*]

Associated with these agreements, we [removed: plan to further expand] [added: have expanded] the [added: inlet] processing capacity of our Oak Grove facility [removed: up] to 400 MMcf/d.

[removed: Additionally, we will be constructing] [added: We have also constructed] a new NGL pipeline from Moundsville to the Harrison Hub fractionation facility to provide [removed: a new] [added: an additional] outlet for NGLs.

These expansions [removed: will be] [added: are] supported by long-term, fee-based agreements and volumetric commitments.

[removed: Atlantic-Gulf][added: *Atlantic-Gulf*]

All remaining business activities as well as corporate activities are included in Other.

Effective January 1, 2020, the composition of our reportable segments changed (see Part I, Item I Business Segments for further discussion).

| • | A $1.451 billion decrease in *Impairment of certain assets;* |

| *•* | A $431 million increase in *Service revenues* primarily associated with Transco expansion projects, the consolidation of UEOM beginning March 2019, and growth in Northeast G&P volumes, partially offset by lower revenues from our Barnett Shale operations primarily associated with the reduced recognition of deferred revenue and the end of a contractual MVC period, as well as the absence of revenues from operations sold or deconsolidated during 2018; |

| *•* | A $484 million decrease to *Net income (loss) attributable to noncontrolling interests* primarily due to the WPZ Merger in the third quarter of 2018, as well as the noncontrolling interests’ share of the 2019 Constitution impairment. |

| *•* | A $694 million decrease in the *Gain on sale of certain assets and businesses* primarily related to the sale of the Four Corners area business in the fourth quarter of 2018; |

| *•* | A $266 million decrease in *Other investing income (loss) – net* primarily due to the absence of 2018 gains on deconsolidations and 2019 impairments of equity-method investments, partially offset by a 2019 gain on the sale of our interest in Jackalope; |

| *•* | $138 million of lower commodity margins; |

| *•* | $74 million of higher net interest expense; |

| *•* | $58 million lower allowance for equity funds used during construction (AFUDC); |

| *•* | A $197 million increase in provision for income taxes driven by higher pre-tax income, partially offset by the absence of a 2018 charge to establish a valuation allowance on deferred tax assets that may not be realized following the WPZ merger. |

Acquisition of UEOM

As of December 31, 2018, we owned a 62 percent interest in UEOM which we accounted for as an equity-method investment.

On March 18, 2019, we signed and closed the acquisition of the remaining 38 percent interest in UEOM.

Total consideration paid, including post-closing adjustments, was $741 million in cash funded through credit facility borrowings and cash on hand.

As a result of acquiring this additional interest, we obtained control of and now consolidate UEOM.

Concurrent with the UEOM acquisition, we executed an agreement whereby we contributed our consolidated interests in UEOM and our Ohio Valley midstream business to a newly formed partnership.

In June 2019, our partner invested approximately $1.33 billion for a 35 percent ownership interest, and we retained 65 percent ownership of, as well as operate and consolidate, the Northeast JV business.

Sale of Jackalope

In April 2019, we sold our 50 percent equity-method interest in Jackalope for $485 million in cash, resulting in a gain on the disposition of $122 million.

Although Constitution received a certificate of public convenience and necessity from the FERC to construct and operate the proposed pipeline and obtained, among other approvals, a waiver of the water quality certification under Section 401 of the Clean Water Act for the New York portion of the project, the members of Constitution, following extensive evaluation and discussion, recently determined that the underlying risk-adjusted return for this greenfield pipeline project has diminished in such a way that further development is no longer supported.

In November 2019, we completed a 500 MMcf/d expansion of the gathering systems in the Susquehanna Supply Hub to bring the capacity to approximately 4.3 Bcf/d.

Jersey.

The project was placed into partial service in July 2019.

The remaining portion of the project was placed into service in September 2019.

The project went in service early in July 2019, at which time we also purchased a 54-mile-long, 16-inch-diameter pipeline (the Norphlet Pipeline) for $200 million.

This pipeline transports gas from the Appomattox development to our Main Pass 261 Platform.

We have completed construction of new compressor stations and modifications to our processing facilities, which were placed into service throughout 2019.

The expansion added approximately 20 miles of gathering pipelines and approximately 15,000 horsepower of compression.

In March 2019, the FERC accepted our motion to place the rates that were suspended by the September 2018 order into effect on March 1, 2019, subject to refund.

In October 2019, we reached an agreement on the terms of a settlement with the participants that would resolve all issues in the rate case without the need for a hearing, and on December 31, 2019, we filed a formal stipulation and agreement with the FERC setting forth such terms of settlement.

We anticipate FERC approval of the stipulation and agreement in the second quarter of 2020.

As of December 31, 2019, we have provided a $189 million reserve for rate refunds related to increased rates collected since March 2019, which we believe is adequate for any refunds that may be required.

Our business plan for 2020 includes a continued focus on earnings and cash flow growth, while continuing to improve leverage metrics and control operating costs.

Many of our producer customers are being impacted by extremely low natural gas and NGL prices, which are driving decreased drilling.

We are responding by reducing the pace of our capital growth spending in our gathering and processing business and remaining committed to operating cost discipline.

In 2020, our operating results are expected to include increases from Transco’s recent expansion projects placed in-service and general rate settlement as previously discussed.

We also expect an increase from a full year contribution from the Norphlet project, partially offset by lower deferred revenue amortization from Gulfstar, both in the Eastern Gulf region.

Northeast results are expected to increase from higher gathering and processing volumes.We expect decreases in the West primarily due to lower deferred revenue amortization in the Barnett Shale and lower revenues from our Haynesville operations, partially offset by increased results from our DJ Basin and Eagle Ford operations.

Additionally, we expect our recently implemented organizational realignment will benefit our expenses.

Prior to our merger with Williams Partners L.P., our previously consolidated master limited partnership, in August 2018, we had one reportable segment, Williams Partners.

Prior period segment disclosures have been recast for the new segment presentation.

West also included our former natural gas gathering and processing assets in the Four Corners area of New Mexico and Colorado (see Note 3 – Divestitures of Notes to Consolidated Financial Statements).

The decrease in operating income reflects an increase of $667 million in Impairment of certain assets and $403 million in lower gains from the sale of certain assets.

These unfavorable changes were partially offset by the absence of $674 million in regulatory charges resulting from Tax Reform in 2017, and a $190 million increase in service revenues primarily resulting from expansion projects placed into service in 2017 and 2018.

WPZ Merger

On August 10, 2018, we completed our merger with Williams Partners L.P. (WPZ), pursuant to which we acquired all of the approximately 256 million publicly held outstanding common units of WPZ in exchange for 382 million shares of our common stock in a noncash equity transaction.

Williams continued as the surviving entity.

FERC Income Tax Policy Revision

On March 15, 2018, the FERC issued a revised policy statement (the revised policy statement) regarding the recovery of income tax costs in rates of natural gas pipelines.

The FERC found that an impermissible double recovery results from granting a Master Limited Partnership (MLP) pipeline both an income tax allowance and a return on equity pursuant to the discounted cash flow methodology.

As a result, the FERC will no longer permit an MLP pipeline to recover an income tax allowance in its cost of service.

The FERC further stated it will address the application of this policy to non-MLP partnership forms as those issues arise in subsequent proceedings.

One of the benefits of the recent WPZ Merger is to allow our FERC-regulated pipelines to continue to recover an income tax allowance in their cost of service rates.

On July 18, 2018, the FERC issued an order dismissing the requests for rehearing and clarification of the revised policy statement.

In addition, the FERC provided guidance that an MLP pipeline (or other pass-through entity) no longer recovering an income tax allowance pursuant to the revised policy may eliminate previously accumulated deferred income taxes (ADIT) from its cost of service instead of flowing these ADIT balances to ratepayers.

This guidance, if implemented, would significantly mitigate the impact of the revised policy statement.

However, the FERC stated that the revised policy statement and such guidance do not establish a binding rule but are instead expressions of general

policy intent designed to provide guidance by notifying entities of the course of action the FERC intends to follow in future adjudications.

To the extent the FERC addresses these issues in future proceedings, it will consider any arguments regarding not only the application of the revised policy to the facts of the case, but also any arguments regarding the underlying validity of the policy itself.

The FERC’s guidance on ADIT likely will be challenged by customers and state commissions, which would result in a long period of revenue uncertainty for pipelines eliminating ADIT from their cost of service.

The WPZ Merger has the additional benefit of eliminating this uncertainty.

On March 15, 2018, the FERC also issued a Notice of Proposed Rulemaking proposing a filing process that will allow it to determine which natural gas pipelines may be collecting unjust and unreasonable rates in light of the recent reduction in the corporate income tax rate in the Tax Cuts and Jobs Act (Tax Reform) and the revised policy statement.

On July 18, 2018, the FERC issued a Final Rule, retaining the filing requirement and reaffirming the options that pipelines have to either reflect the reduced tax rate or explain why no rate change is necessary.

The FERC also clarified that a natural gas company organized as a pass-through entity and all of whose income or losses are consolidated on the federal income tax return of its corporate parent is considered to be subject to the federal corporate income tax and is thus eligible for a tax allowance.

We believe this Final Rule and the previously discussed WPZ Merger allow for the continued recovery of income tax allowances in Transco’s and Northwest Pipeline’s rates.

Transco’s August 31, 2018, general rate case filing reflects a tax allowance based on this clarification, and the FERC’s September 28, 2018, order in that rate case proceeding finds that Transco is exempt from the Final Rule’s Form 501-G filing requirement.

In addition, on October 19, 2018, Northwest Pipeline filed a petition requesting that the FERC waive its Form 501-G filing requirement under this Final Rule because (i) the reduction in the corporate income tax is already addressed in Northwest Pipeline’s 2017 rate settlement, and (ii) as discussed above, the WPZ Merger allows for the continued recovery of income tax allowances in Northwest Pipeline’s rates.

The FERC agreed and granted Northwest Pipeline’s petition for waiver on November 19, 2018.

On October 11, 2018 and December 6, 2018, Discovery Gas Transmission, LLC and Pine Needle LNG Company, LLC, respectively, filed their Form 501-Gs, including explanations as to why no adjustments to rates are needed.

On March 15, 2018, the FERC also issued a Notice of Inquiry seeking comments on the additional impacts of Tax Reform on jurisdictional rates, particularly whether, and if so how, the FERC should address changes relating to ADIT amounts after the corporate income tax rate reduction and bonus depreciation rules, as well as whether other features of Tax Reform require FERC action.

We are evaluating the impact of these developments on our interstate natural gas pipelines and currently expect any associated impacts would be prospective and determined through subsequent rate proceedings.

We also continue to monitor developments that may impact our regulatory liabilities resulting from Tax Reform.

It is reasonably possible that future tariff-based rates collected by our interstate natural gas pipelines may be adversely impacted.

Revenue Recognition

As a result of the adoption of Accounting Standards Update 2014-09, Revenues from Contracts with Customers (ASC 606) in January 2018, we now record revenues for transactions where we receive noncash consideration, primarily in certain of our gas processing contracts that provide commodities as full or partial consideration for services provided.

These revenues are reflected as Service revenues - commodity consideration in the Consolidated Statement of Operations.

The costs associated with these revenues, primarily related to natural gas shrink replacement, are reported as Processing commodity expenses.

The revenues and costs associated with the subsequent sale of the commodity consideration received is reflected within Product sales and Product costs in the Consolidated Statement of Operations.

This presentation is being reflected prospectively in the Consolidated Statement of Operations.

[removed: Interest] [added: Interest] Rate [removed: Risk][added: Risk]

(See Note [removed: 14] [added: 15] – [removed: Debt, Banking Arrangements,] [added: Debt] and [removed: Leases] [added: Banking Arrangements] of Notes to Consolidated Financial Statements.)

The tables below provide information by maturity date about our interest rate risk-sensitive instruments as of December 31, [removed: 2018] [added: 2019] and [removed: 2017.][added: 2018.]

See Note [removed: 17] [added: 18] – Fair Value Measurements, Guarantees, and Concentration of Credit Risk of Notes to Consolidated Financial Statements for the methods used in determining the fair value of our long-term debt.

| | | [removed: 2019] [added: 2019] | | | | [removed: 2020] [added: 2020] | | | | [removed: 2021] [added: 2021] | | | | [removed: 2022] [added: 2022] | | | | [removed: 2023] [added: 2023] | | | | [removed: Thereafter (1)] [added: Thereafter (1)] | | | | [removed: Total] [added: Total] | | | | [removed: Fair] [added: Fair] Value December 31, [removed: 2018] [added: 2018] | | |

| | [removed: (Millions)] [added: (Millions)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | [removed: 2018] [added: 2020] | | | | [removed: 2019] [added: 2021] | | | | [removed: 2020] [added: 2022] | | | | [removed: 2021] [added: 2023] | | | | [removed: 2022] [added: 2024] | | | | [removed: Thereafter (1)] [added: Thereafter (1)] | | | | [removed: Total] [added: Total] | | | | [removed: Fair] [added: Fair] Value December 31, [removed: 2017] [added: 2019] | | |

| | [removed: (Millions)] [added: (Millions)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Weighted-average interest rate | | [removed: 5.1] [added: 5.2] | | % | | [removed: 5.1] [added: 5.2] | | % | | [removed: 5.1] [added: 5.3] | | % | | [removed: 5.1] [added: 5.4] | | % | | [removed: 5.2] [added: 5.6] | | % | | [removed: 5.7] [added: 5.6] | | % | | | | | | | | |

| Variable rate [removed: (3)] | | $ | — | | | $ | — | | | $ | — | | | $ | [removed: 270] [added: —] | | | $ | — | | | $ | — | | | $ | [removed: 270] [added: —] | | | $ | [removed: 270] [added: —] | |

| (2) | The weighted-average interest rate for our $160 million credit facility borrowing at December 31, [removed: 2018] [added: 2018,] was 3.77 percent. |

[removed: Commodity] [added: Commodity] Price [removed: Risk][added: Risk]

At December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] our derivative activity was not material.

(See Note [removed: 17] [added: 18] – Fair Value Measurements, Guarantees, and Concentration of Credit Risk of Notes to Consolidated Financial Statements.)

| Fixed rate | | $ | 2,141 | | | $ | 893 | | | $ | 2,025 | | | $ | 1,477 | | | $ | 2,279 | | | $ | 13,473 | | | $ | 22,288 | | | $ | 25,319 | |

| Fixed rate | | $ | 502 | | | $ | 33 | | | $ | 2,123 | | | $ | 873 | | | $ | 2,003 | | | $ | 15,131 | | | $ | 20,665 | | | $ | 22,735 | |

| | |

| --- | --- |

| (3) | The weighted-average interest rate for our $270 million credit facility borrowing at December 31, 2017 was 3.16 percent. |

[removed: WEBSITE] [added: WEBSITE] ACCESS TO REPORTS AND OTHER [removed: INFORMATION][added: INFORMATION]

We file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy [removed: statements] [added: statements,] and other documents electronically with the SEC under the Exchange Act.

[added: Our Internet website is www.williams.com*.*] We make available, free of charge, through the Investors tab of our Internet website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form [removed: 8-K,] [added: 8‑K,] and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Our Corporate Governance Guidelines, [removed: information regarding corporate social responsibility,] [added: Sustainability Report,] Code of Ethics for Senior Officers, Board committee charters, and the Williams Code of Business Conduct are also available on our Internet website.

[removed: GENERAL][added: GENERAL]

Our [added: common stock trades on the New York Stock Exchange under the symbol “WMB.” Our] operations are located in the United States.

[removed: BUSINESS SEGMENTS][added: BUSINESS SEGMENTS]

[removed: Beginning in the third-quarter 2018, consistent] [added: Consistent] with the manner in which our chief operating decision maker evaluates performance and allocates resources, our operations are [removed: now] [added: conducted, managed, and] presented [added: in Part I of this Annual Report] within the following reportable segments: [added: Transmission & Gulf of Mexico,] Northeast G&P, [removed: Atlantic-Gulf,] and West.

[removed: Our] [added: Pursuant to the organizational realignment, our] reportable segments are comprised of the following [removed: businesses:][added: business activities:]

| • | Northeast G&P is comprised of our midstream [removed: gathering] [added: gathering, processing,] and [removed: processing] [added: fractionation] businesses in the Marcellus Shale region primarily in Pennsylvania, New York, and [removed: West Virginia and] the Utica Shale region of eastern Ohio, as well as a [removed: 66] [added: 65] percent interest in [removed: Cardinal] [added: our Northeast JV] (a consolidated [removed: entity),] [added: variable interest entity) which operates in West Virginia, Ohio, and Pennsylvania,] a [removed: 62] [added: 66] percent [removed: equity-method investment] [added: interest] in [removed: UEOM,] [added: Cardinal (a consolidated variable interest entity) which operates in Ohio,] a 69 percent equity-method investment in Laurel Mountain, a 58 percent equity-method investment in Caiman II, and Appalachia Midstream Services, LLC, which owns equity-method investments with an approximate average 66 percent interest in multiple gas gathering systems in the Marcellus Shale (Appalachia Midstream Investments). |

| • | [removed: Atlantic-Gulf] [added: Transmission & Gulf of Mexico] is comprised of our interstate natural gas [removed: pipeline, Transco,] [added: pipelines, Transco] and [removed: significant] [added: Northwest Pipeline, as well as] natural gas [removed: gathering] [added: gathering, processing,] and [removed: processing] [added: treating assets] and crude oil production handling and transportation assets in the Gulf Coast region, including a 51 percent interest in Gulfstar One (a consolidated [added: variable interest] entity), which is a proprietary floating production system, and various petrochemical and feedstock pipelines in the Gulf Coast region, [removed: as well as] a 50 percent equity-method investment in Gulfstream, [added: and] a 60 percent equity-method investment in [removed: Discovery, and a 41 percent interest in Constitution (a consolidated entity), which is developing a pipeline project (see Note 4 – Variable Interest Entities of Notes to Consolidated Financial Statements).] [added: Discovery.] |

| • | West is comprised of our [removed: interstate natural] gas [removed: pipeline, Northwest Pipeline, and our] gathering, processing, and treating operations in [removed: Colorado, Wyoming,] [added: the Rocky Mountain region of Colorado] and [added: Wyoming,] the Barnett Shale region of north-central Texas, the Eagle Ford Shale region of south Texas, the Haynesville Shale region of northwest Louisiana, and the Mid-Continent region which includes the Anadarko, Arkoma, [removed: Delaware,] and Permian basins. This segment also includes our NGL and natural gas marketing business, storage facilities, an undivided 50 percent interest in an NGL fractionator near Conway, Kansas, [removed: and] a 50 percent equity-method investment in OPPL, a 50 percent [removed: interest in Jackalope (an] equity-method investment [removed: following deconsolidation as of June 30, 2018), a 50 percent equity-method investment] in RMM, [added: and] a 15 percent equity-method investment in Brazos Permian [removed: II, and our previously owned 50 percent equity-method investment in the Delaware basin gas gathering system (DBJV) in the Mid-Continent region (see Note 6 – Investing Activities of Notes to Consolidated Financial Statements). West also included our former natural gas gathering and processing assets in the Four Corners area of New Mexico and Colorado (see Note 3 – Divestitures of Notes to Consolidated Financial Statements).] [added: II.] |

Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations.][added: Operations (including the discussion of our ongoing expansion projects) and Item 8.]

[removed: Northeast G&P][added: Northeast G&P]

This segment includes our natural gas gathering, compression, processing, and NGL fractionation [removed: business] [added: businesses] in the Marcellus and Utica Shale regions in Pennsylvania, West Virginia, New York, and Ohio.

The following tables summarize the significant [removed: consolidated] [added: operated] assets of this segment:

| | | [removed: | | Natural] [added: Natural] Gas Gathering [removed: Assets] [added: Assets] | | | | | | | | |

| | | | | | | [removed: | | Inlet] [added: Inlet] | | | | |

| | | | | [removed: | | Pipeline] [added: Pipeline] | | [removed: Capacity] [added: Capacity] | | [removed: Ownership] [added: Ownership] | | |

| | | [removed: | | Location] [added: Location] | | [removed: Miles] [added: Miles] | | [removed: (Bcf/d)] [added: (Bcf/d)] | | [removed: Interest] [added: Interest] | | [removed: Supply Basins] [added: Supply Basins] |

| [removed: |] Ohio Valley Midstream [removed: |] [added: (1)] | | Ohio, West Virginia, & Pennsylvania | | 216 | | 0.8 | | [removed: 100%] [added: 65%] | | Appalachian |

| [removed: |] Susquehanna Supply Hub | | [removed: |] Pennsylvania & New York | | [removed: 454] [added: 451] | | [removed: 3.6] [added: 4.3] | | 100% | | Appalachian |

| [removed: |] Cardinal (1) | | [removed: |] Ohio | | [removed: 360] [added: 365] | | 0.9 | | 66% | | Appalachian |

| [removed: |] Flint | | [removed: |] Ohio | | [removed: 75] [added: 95] | | 0.5 | | 100% | | Appalachian |

| [removed: |] Beaver Creek | | [removed: |] Pennsylvania | | 41 | | 0.1 | | 100% | | Appalachian |

| (1) | Statistics reflect 100 percent of the assets from our [added: 65 percent ownership in our Northeast JV and] 66 percent ownership of Cardinal gathering system. |

| | | [removed: | | Natural] [added: Natural] Gas Processing [removed: Facilities] [added: Facilities] | | | | | | | | |

| | | | | | | [removed: | | NGL] [added: NGL] | | | | |

| | | | | [removed: | | Inlet] [added: Inlet] | | [removed: Production] [added: Production] | | | | |

| | | | | [removed: | | Capacity] [added: Capacity] | | [removed: Capacity] [added: Capacity] | | [removed: Ownership] [added: Ownership] | | |

| | | [removed: | | Location] [added: Location] | | [removed: (Bcf/d)] [added: (Bcf/d)] | | [removed: (Mbbls/d)] [added: (Mbbls/d)] | | [removed: Interest] [added: Interest] | | [removed: Supply Basins] [added: Supply Basins] |

| [removed: |] Fort Beeler | | [removed: |] Marshall County, WV | | 0.5 | | 62 | | [removed: 100%] [added: 65%] | | Appalachian |

| [removed: |] Oak Grove | | [removed: |] Marshall County, WV | | [removed: 0.2] [added: 0.4] | | [removed: 25] [added: 50] | | [removed: 100%] [added: 65%] | | Appalachian |

We also own and operate fractionation facilities at Moundsville, [added: West Virginia,] de-ethanization and condensate facilities at our Oak Grove plant, a condensate stabilization facility near our Moundsville fractionator, and an ethane transportation pipeline.

[removed: Northeast] [added: Northeast] G&P Operating [removed: Statistics][added: Statistics]

| | [added: 2019] | [removed: 2018] | | [added: 2018] | [removed: 2017] | | [added: 2017] | [removed: 2016] |

| [removed: Volumes: (1)] [added: Volumes:] | | | | | | | | |

| Gathering (Bcf/d) [added: - Consolidated (1)] | | [removed: 3.63] [added: 4.24] | | | [removed: 3.31] [added: 3.63] | | | [removed: 3.21] [added: 3.31] |

| Plant inlet natural gas [removed: volumes] (Bcf/d) [added: - Consolidated (1)] | | [removed: 0.52] [added: 1.04] | | | [removed: 0.43] [added: 0.52] | | | [removed: 0.33] [added: 0.43] |

| NGL production [removed: volumes] (Mbbls/d) [removed: (2)] [added: (3)] | | [removed: 46] [added: 76] | | | [removed: 38] [added: 46] | | | [removed: 32] [added: 38] |

We are an energy infrastructure company committed to be the leader in providing infrastructure that safely delivers natural gas products to reliably fuel the clean energy economy.

We have operations in 15 supply areas that provide natural gas gathering, processing, and transmission services and natural gas liquids fractionation, transportation, and storage services to more than 600 customers.

We own an interest in and operate over 30,000 miles of pipelines, 28 processing facilities, 7 fractionation facilities, and approximately 23 million barrels of NGL storage capacity, handling approximately 30 percent of the nation’s natural gas volumes.

| |

| --- |

| |

|  |

| |

| --- |

| |

|  |

Transco’s and Northwest Pipeline’s three largest customers in 2019 accounted for approximately 28 percent and 48 percent, respectively, of their total revenues.

Our gathering, processing, and treating operations are presented within our Transmission & Gulf of Mexico, Northeast G&P, and West reporting segments as described under the heading “Business Segments.”

We also have certain gas gathering and processing agreements with minimum volume commitments (MVC), whereby the customer is obligated to pay a contractually determined fee based on any shortfall between the actual gathered and processed volumes and the MVC for a stated period.

| • | Obstacles to our expansion efforts, including delays or denials of necessary permits and opposition to hydrocarbon-based energy development; |

Effective January 1, 2020, following an organizational realignment, our interstate natural gas pipeline Northwest Pipeline LLC, reported within the West reporting segment throughout 2019, is now managed within the Transmission & Gulf of Mexico reporting segment (previously identified as the Atlantic-Gulf reporting segment).

| • | Other includes minor business activities that are not operating segments, as well as corporate operations. |

Part II, Item 7.

Financial Statements and Supplementary Data continue to present our segments as they were historically defined before the organizational realignment on January 1, 2020.

Transmission & Gulf of Mexico

deepwater areas in and around the Gulf Coast states of Texas, Louisiana, Mississippi, and Alabama.

In March 2019, the FERC accepted our motion to place the rates that were suspended by the September 2018 order into effect on March 1, 2019, subject to refund.

In October 2019, we reached an agreement on the terms of a settlement with the participants that would resolve all issues in the rate case without the need for a hearing, and on December 31, 2019, we filed a formal stipulation and agreement with the FERC setting forth such terms of the settlement.

We anticipate FERC approval of the stipulation and agreement in the second quarter of 2020.

As of December 31, 2019, we have provided a $189 million reserve for rate refunds related to increased rates collected since March 2019, which we believe is adequate for any refunds that may be required.

party natural gas.

| | | Offshore Natural Gas Pipelines | | | | | | | | |

| Consolidated: | | | | | | | | | | |

| Norphlet | | Deepwater Gulf of Mexico | | 58 | | 0.3 | | 100% | | Eastern Gulf of Mexico |

| Non-consolidated: (1) | | | | | | | | | | |

| Discovery | | Central Gulf of Mexico | | 594 | | 0.6 | | 60% | | Western Gulf of Mexico |

| Consolidated: | | | | | | | | | | |

| Non-consolidated: (1) | | | | | | | | | | |

| Discovery | | Larose, LA | | 0.6 | | 32 | | 60% | | Western Gulf of Mexico |

| (1) | Includes 100 percent of the statistics associated with operated equity-method investments. |

| Consolidated: | | | | | | | | | | | |

| Consolidated: | | | | | | | | | | | |

| Non-consolidated: (2) | | | | | | | | | | | |

| Discovery | | | | | 75 | | 10 | | 60% | | Western Gulf of Mexico |

| (2) | Includes 100 percent of the statistics associated with operated equity-method investments. |

Our Internet website is http://investor.williams.com/.

We are an energy infrastructure company focused on connecting North America’s significant hydrocarbon resource plays to markets for natural gas and NGLs.

WPZ MERGER

On August 10, 2018, we completed our merger with Williams Partners L.P. (WPZ), our previously consolidated master limited partnership, pursuant to which we acquired all of the approximately 256 million publicly held outstanding common units of WPZ in exchange for 382 million shares of our common stock in a noncash equity transaction.

Prior to our merger with WPZ, we had one reportable segment, Williams Partners.

Prior period segment disclosures have been recast for the new segment presentation.

| • | Other includes our previously owned operations, including an 88.5 percent undivided interest in an olefins production facility in Geismar, Louisiana, which was sold in July 2017 (see Note 3 – Divestitures of Notes to Consolidated Financial Statements), and a refinery grade propylene splitter in the Gulf region, which was sold in June 2017. This segment also included our previously owned Canadian assets, which included an oil sands offgas processing plant near Fort McMurray, Alberta, and an NGL/olefin fractionation facility at Redwater, Alberta. In September 2016, these Canadian operations were sold. Other also includes minor business activities that are not operating segments, as well as corporate operations. |

For a discussion of our ongoing expansion projects, see Part II, Item 7.

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__________

We own a 62 percent interest in UEOM, which includes infrastructure for the gathering, processing, and fractionation of natural gas and NGLs in the Utica Shale play in eastern Ohio.

Our partner operates a natural gas gathering pipeline, inlet compression, two processing plants with a total capacity of 800 MMcf/d, 36 Mbbls/d of condensate stabilization

These assets earn a fixed fee that escalates annually within a specified range.

Aux Sable

We also own a 15 percent interest in Aux Sable and its Channahon, Illinois, gas processing and NGL fractionation facility near Chicago.

The facility is capable of processing up to 2.1 Bcf/d of natural gas from the Alliance Pipeline system and fractionating approximately 132 Mbbls/d of extracted liquids into NGL products.

Additionally, Aux Sable owns an 80 MMcf/d gas conditioning plant and a 12-inch, 83-mile gas pipeline infrastructure in North Dakota that provides additional NGLs to Channahon from the Bakken Shale in the Williston basin.

Atlantic-Gulf

In addition, wholly owned subsidiaries of Transco operate and hold a 35 percent equity-method investment in Pine Needle LNG Company, LLC, an LNG storage facility with 4 Bcf of storage capacity.

We own 283 miles of pipeline systems in Louisiana and Texas that provide feedstock transportation from fractionation and storage facilities to various third-party crackers.

These systems include the Bayou ethane pipeline, which provides ethane transportation from Mont Belvieu, Texas; certain ethane and propane systems in Louisiana; and a pipeline that has the capacity to transport 12 Mbbls/d of ethane from Discovery’s Paradis fractionator.

We previously owned pipelines in the Houston Ship Channel area which were used to transport a variety of products including ethane, propane, ammonia, tertiary butyl alcohol, and other industrial products.

These assets were sold in November 2018.

| (1) | Excludes volumes associated with equity-method investments. |

This segment includes the Northwest Pipeline interstate natural gas pipeline, as well as natural gas gathering, processing, and treating assets in Colorado, Wyoming, Louisiana, Texas, Arkansas, and Oklahoma.

This segment also includes an NGL and natural gas marketing business, storage facilities, and an undivided 50 percent interest in an NGL fractionator near Conway, Kansas.

In certain situations to facilitate our gas gathering and processing activities, we buy natural gas from our producer customers for resale.

| Interstate natural gas pipeline throughput (Tbtu) | | 820 | | | 750 | | | 727 | |

Jackalope gathering system

RMM consists of 60 MMcf/d of gas processing capacity, an approximate 105-mile natural gas gathering system, and an approximate 70-mile oil gathering system.

There are two additional processing plants currently under construction that are expected to increase natural gas processing capacity to 480 MMcf/d by the end of 2019.

[removed: Environmental][added: *Environmental*]

Pursuant to the Consent Order, we paid a fine of $168,750 and agreed to [removed: perform] a Corrective Action [removed: Plan, the completion of which is pending.][added: Plan.]

On March 19, 2018, we received a Notice of Violation [removed: from the EPA, Region 8, regarding certain alleged violations] of [removed: the Clean Air Act] [added: certain LDAR regulations] at our [added: former] Ignacio Gas Plant [removed: in Durango, Colorado,] [added: from the EPA, Region 8,] following [removed: a previous] [added: an] on-site inspection of the facility.

On March 20, 2018, we also received a Notice of Violation [removed: from the EPA, Region 8, regarding certain alleged violations] of [removed: the Clean Air Act] [added: certain LDAR regulations] at our Parachute Creek Gas Plant [removed: in Parachute, Colorado, following a previous on-site inspection of] [added: from] the [removed: facility.][added: EPA, Region 8.]

Other environmental matters called for by this Item are described under the caption [removed: “Environmental Matters”] [added: “*Environmental Matters*”] in Note [removed: 18] [added: 19] – Contingent Liabilities and Commitments of Notes to Consolidated Financial Statements included under Part II, Item 8 Financial Statements of this report, which information is incorporated by reference into this Item.

[removed: Other Litigation][added: *Other litigation*]

The additional information called for by this Item is provided in Note [removed: 18] [added: 19] – Contingent Liabilities and Commitments of Notes to Consolidated Financial Statements included under Part II, Item 8 Financial Statements of this report, which information is incorporated by reference into this Item.

We have worked with the agency to resolve these matters and in the second half of 2019, entered into a Stipulation of Settlement, which includes a penalty of $750,000 that will be due within thirty days of the Court’s entry of the settlement.

The Court set a fairness hearing on the settlement for December 11, 2019.

Prior to the scheduled hearing, the Court continued the hearing without setting a new date.

On January 19, 2016, we received a Notice of Noncompliance with certain Leak Detection and Repair (LDAR) regulations under the Clean Air Act at our Moundsville Fractionator Facility from the EPA, Region 3.

Subsequently, the EPA alleged similar violations of certain LDAR regulations at our Oak Grove Gas Plant.

All Notices were subsequently referred to a common attorney at the Department of Justice (DOJ).

We are exploring global resolution of the claims at these facilities, as well as alleged violations at certain other facilities, with the DOJ.

Global resolution would include both

payment of a civil penalty and an injunctive relief component.

We continue to work with the DOJ and the other agencies to resolve these claims, whether individually or globally, and negotiations are ongoing.

The EPA could issue penalties pertaining to final determinations.

On February 21, 2017, we received notice from the Environmental Enforcement Section of the United States Department of Justice (DOJ) regarding certain alleged violations of the Clean Air Act at our Moundsville facility as set forth in a Notice of Noncompliance issued by the EPA on January 14, 2016.

The notice includes an offer to avoid further legal action on the alleged violations by paying $2 million.

In discussion with the DOJ and the EPA, the EPA has indicated its belief that additional similar violations have occurred at our Oak Grove facility and has expressed interest in pursuing a global settlement.

On July 23, 2018, we received an offer from the DOJ to globally settle the government’s claim for civil penalties associated with the alleged violations at both the Moundsville and the Oak Grove facilities for $1.6 million.

We are continuing to work with the agencies to resolve this matter.

We were subsequently informed that this matter has been referred to the DOJ for handling.

The Notice of Violation does not contain an initial penalty assessment.

We have responded to the alleged violations and continue to work with the agencies to resolve this matter.

We were informed that this matter has been referred to the DOJ for handling.

The Notice of Violation does not contain an initial penalty assessment.

We have responded to the alleged violations and continue to work with the agencies to resolve this matter.

On August 27, 2018, Northwest Pipeline LLC received a Notice of Violation/Cease and Desist Order from the Colorado Department of Public Health & Environment regarding certain alleged violations of the Colorado Water Quality Control Act and its General Permit under the Colorado Discharge Permit System related to its stormwater management practices at two construction sites.

The Notice of Violation does not contain an initial penalty assessment.

We have responded to the alleged violations and continue to work with the agency to resolve this matter.

[removed: UNITED] [added: UNITED] STATES SECURITIES AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: Form 10-K][added: Form 10-K]

[removed: (Mark One)][added: (Mark One)]

| [removed: þ] [added: ☑] | [removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] | [added: |]

| | [removed: For] [added: For] the fiscal year [removed: ended December] [added: ended | December] 31, [removed: 2018] [added: 2019] |

| [removed: ¨] [added: ☐] | [removed: TRANSITION] [added: TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] | [added: |]

| | [removed: For] [added: For] the transition period from [removed: to] [added: to] | [added: |]

[removed: Commission] [added: Commission] file [removed: number 1-4174][added: number 1-4174]

[removed: The Williams] [added: The Williams] Companies, [removed: Inc.][added: Inc.]

| [removed: Delaware] [added: Delaware] | | [removed: 73-0569878] | [added: 73-0569878 |]

| (State or Other Jurisdiction of Incorporation or Organization) | | [added: |] (IRS Employer Identification No.) |

| [removed: One] [added: One] Williams [removed: Center, Tulsa, Oklahoma] [added: Center] | | [removed: 74172] | [added: |]

| (Address of Principal Executive Offices) | | [added: |] (Zip Code) |

[removed: 918-573-2000][added: 918\-573-2000]

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of Each [removed: Class] [added: Class] | [added: Trading Symbol(s)] | [removed: Name] [added: Name] of Each Exchange on Which [removed: Registered] [added: Registered] |

| Common Stock, $1.00 par value | [added: WMB] | New York Stock Exchange |

[removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the [removed: Act:][added: Act:]

[removed: None][added: None]

Yes [removed: þ] [added: ☑] No [removed: ¨][added: ☐]

Yes [removed: ¨] [added: ☐] No [removed: þ][added: ☑]

Yes [removed: þ] [added: ☑] No [removed: ¨][added: ☐]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

Yes [removed: þ] [added: ☑] No [removed: ¨][added: ☐]

| Large accelerated filer [removed: þ] | [added: ☑] | [added: |] Accelerated filer [removed: ¨] | [added: ☐] | [added: |] Non-accelerated filer [removed: ¨] | [added: ☐] | [added: |] Smaller reporting company [removed: ¨] | [added: ☐] | [added: |] Emerging growth company [removed: ¨] | [added: ☐ |]

Yes [removed: ¨] [added: ☐] No [removed: þ][added: ☑]

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the registrant’s most recently completed second quarter was approximately [removed: $21,489,112,717.][added: $32,986,794,536.]

The number of shares outstanding of the registrant’s common stock outstanding at February [removed: 15, 2019] [added: 19, 2020] was [removed: 1,210,981,263.][added: 1,212,494,859.]

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

Portions of the Registrant’s Definitive Proxy Statement for the Registrant’s Annual Meeting of Stockholders to be held on [removed: May 9, 2019,] [added: April 28, 2020,] are incorporated into Part III, as specifically set forth in Part III.

[removed: THE] [added: THE] WILLIAMS COMPANIES, [removed: INC.][added: INC.]

[removed: FORM 10-K][added: FORM 10-K]

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

| [removed: PART I] [added: PART I] | | |

| Item 1. | [removed: [Business](#s95E6E192A97BE26351F9EB16E19B6424)] [added: [Business](#sA61FE6A7DA46CB64E9D9682420C027B7)] | [removed: [4](#s95E6E192A97BE26351F9EB16E19B6424)] [added: [4](#sA61FE6A7DA46CB64E9D9682420C027B7)] |

| | [Website Access to Reports and Other [removed: Information](#s500F8CA67C702B2BAEE2EB16E1D943ED)] [added: Information](#sD9C0E98D0C69B91608D0682420F213EF)] | [removed: [4](#s500F8CA67C702B2BAEE2EB16E1D943ED)] [added: [20](#sD9C0E98D0C69B91608D0682420F213EF)] |

| | [Business [removed: Segments](#sB0D7F4D947F062258DAAEB16E2F27653)] [added: Segments](#sEE8557F74B59662FB3AC68242167541B)] | [removed: [4](#sB0D7F4D947F062258DAAEB16E2F27653)] [added: [7](#sEE8557F74B59662FB3AC68242167541B)] |

| | [Service Assets, Customers, and [removed: Contracts](#s76037D57C6BFF8AE8237EB16E3CC80E1)] [added: Contracts](#s29C5DACFAC37B7A016BE6824229366AF)] | [removed: [12](#s76037D57C6BFF8AE8237EB16E3CC80E1)] [added: [4](#s29C5DACFAC37B7A016BE6824229366AF)] |

| | [Additional Business Segment [removed: Information](#s77324D761144956B91E7EB16D52CF9EC)] [added: Information](#s2726111082FDE6115B1C682422B41559)] | [removed: [14](#s77324D761144956B91E7EB16D52CF9EC)] [added: [16](#s2726111082FDE6115B1C682422B41559)] |

| | OR | |

| | | | |

| --- | --- | --- | --- |

| | | | |

| | | | |

| Tulsa | Oklahoma | | 74172 |

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | |

| | [General](#s037B5311916C6C35462568242120DFCC) | [4](#s037B5311916C6C35462568242120DFCC) |

| | [Transmission & Gulf of Mexico](#sB5031480A89C76978C9A682421BAB484) | [7](#sB5031480A89C76978C9A682421BAB484) |

| | [Northeast G&P](#s5B4E63B2897C529CB74868242199956A) | [11](#s5B4E63B2897C529CB74868242199956A) |

| | [West](#s25708F62F76611913633682421EC4AB1) | [14](#s25708F62F76611913633682421EC4AB1) |

| | [Other](#s7D3B1064C5A4CAE0AAA36824220D7CF2) | [16](#s7D3B1064C5A4CAE0AAA36824220D7CF2) |

| | [Competition](#s323EDFA43DDBCE41C0B168242339F9F0) | [19](#s323EDFA43DDBCE41C0B168242339F9F0) |

| | [Employees](#sA907D94E141F4A48C8676824235B67B9) | [20](#sA907D94E141F4A48C8676824235B67B9) |

| | [Information About Our Executive Officers](#s7BBA9669CFB369D4D2F868242487EDAF) | [39](#s7BBA9669CFB369D4D2F868242487EDAF) |

*UEOM:* Utica East Ohio Midstream LLC, previously a Partially Owned Entity until acquiring remaining interest in March 2019

*Northeast JV:* Ohio Valley Midstream LLC, a partially owned venture that includes our Ohio Valley assets and UEOM

10-K 1 wmb_20181231x10k.htm 10-K

| | |

| --- | --- |

| | |

| | OR |

| | | |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| | [General](#sBFA6F20A7BD3A1F6EE15EB16E1F8CF5C) | [4](#sBFA6F20A7BD3A1F6EE15EB16E1F8CF5C) |

| | [Northeast G&P](#s14BDDC216F5B8A3A7ACFEB16E32167C9) | [5](#s14BDDC216F5B8A3A7ACFEB16E32167C9) |

| | [Atlantic-Gulf](#sF0E4B5AFD98C1D683C72EB16E3402007) | [7](#sF0E4B5AFD98C1D683C72EB16E3402007) |

| | [West](#s452AF91C35F4A31B8C15EB16E36F3391) | [10](#s452AF91C35F4A31B8C15EB16E36F3391) |

| | [Other](#s7F7266CA7B8DE1C2A48CEB16E41AD4E9) | [12](#s7F7266CA7B8DE1C2A48CEB16E41AD4E9) |

| | [Competition](#s01B6BDC1F1BFD8EDC8F2EB16E4C65C64) | [18](#s01B6BDC1F1BFD8EDC8F2EB16E4C65C64) |

| | [Employees](#s81C556BE9BB595B704F7EB16E4E5FC87) | [18](#s81C556BE9BB595B704F7EB16E4E5FC87) |

| | [Executive Officers of the Registrant](#s8295B477412DB76A96F0EB16E60EC999) | [36](#s8295B477412DB76A96F0EB16E60EC999) |

UEOM: Utica East Ohio Midstream LLC

ACMP: Access Midstream Partners, L.P. prior to its 2015 merger with Pre-Merger WPZ

Energy Transfer: Energy Transfer Equity, L.P.

ETC: Energy Transfer Corp LP

ETC Merger: Merger wherein Williams would have been merged into ETC

ETE Merger Agreement: Merger Agreement and Plan of Merger of Williams with Energy Transfer Equity, L.P. and certain of its affiliates

IDR: Incentive distribution right

Pre-merger WPZ: Williams Partners L.P. prior to its merger with ACMP

PDH facility: Propane dehydrogenation facility

RGP Splitter: Refinery grade propylene splitter

Throughput: The volume of product transported or passing through a pipeline, plant, terminal, or other facility

The name, title, age, period of service, and recent business experience of each of our executive officers as of February [removed: 21, 2019,] [added: 24, 2020,] are listed below.

| [removed: Name] [added: Name] and [removed: Title | | Age] [added: Position] | | [removed: Period of Service] [added: Age] | | [removed: Business] [added: Business] Experience in Past Five [removed: Years] [added: Years] | [added: | |]

| [removed: Alan] [added: Alan] S. [removed: Armstrong] [added: Armstrong] | | [removed: 56] [added: 57] | | 2011 to present | | Director, Chief Executive Officer, and President, The Williams Companies, Inc. |

| Director, Chief Executive Officer, and President | | | | 2015 to 2018 | | Chairman of the Board, [removed: ACMP/WPZ] [added: WPZ] |

| | | | | 2014 to 2018 | | Chief Executive Officer, [removed: ACMP/WPZ] [added: WPZ] |

| | | | | 2012 to 2018 | | Director of the general partner, [removed: ACMP/WPZ] [added: WPZ] |

| [added: Executive Vice President and Chief Operating Officer] | | | | [removed: 2011] [added: 2017] to [removed: 2015] [added: 2018] | | [removed: Chairman of the Board and Chief Executive Officer] [added: Director] of the general [removed: partner of Pre-merger] [added: partner,] WPZ |

| [removed: Walter] [added: Walter] J. [removed: Bennett] [added: Bennett] | | [removed: 49] [added: 50] | | [removed: 2015] [added: 2020] to present | | Senior Vice [removed: President- West,] [added: President Gathering & Processing,] The Williams Companies, Inc. |

| [removed: Senior Vice President - West] | | | | 2013 to 2018 | | Senior Vice President [removed: -] [added: –] West of the general partner, [removed: ACMP/WPZ] [added: WPZ] |

| | | | | 2017 | | Director of the general partner, [removed: ACMP/WPZ] [added: WPZ] |

| [added: Senior Vice President – Corporate Strategic Development] | | | | [removed: 2015] [added: 2017 to 2018] | | [removed: Senior Vice President - West] [added: Director] of the general partner, [removed: Pre-merger] WPZ |

| [removed: John] [added: John] D. [removed: Chandler] [added: Chandler] | | [removed: 49] [added: 50] | | 2017 to present | | Senior Vice President and Chief Financial Officer, The Williams Companies, Inc. |

| Senior Vice President and Chief Financial Officer | | | | 2017 to 2018 | | Director of the general partner, [removed: ACMP/WPZ] [added: WPZ] |

| [removed: Debbie Cowan] [added: Debbie Cowan] | | [removed: 41] [added: 42] | | 2018 to present | | Senior Vice President [removed: -] [added: –] Chief Human Resources Officer, The Williams Companies, Inc. |

| Senior Vice President [removed: -] [added: –] Chief Human Resources Officer | | | | 2013 to 2018 | | Global Vice President of Human Resources, Koch Chemical Technology Group, LLC |

| [removed: Micheal] [added: Micheal] G. [removed: Dunn] [added: Dunn] | | [removed: 53] [added: 54] | | 2017 to present | | Executive Vice President and Chief Operating Officer, The Williams Companies, Inc. |

| | | | | 2015 to [removed: 2017] [added: 2016] | | President / Executive Vice President, Questar Pipeline / Questar Corporation |

| [removed: Scott] [added: Scott] A. [removed: Hallam] [added: Hallam] | | [removed: 42] [added: 43] | | [removed: 2019] [added: 2020] to present | | Senior Vice President [removed: - Atlantic-Gulf,] [added: Transmission & Gulf of Mexico,] The Williams Companies, Inc. |

| [removed: Senior Vice President - Atlantic-Gulf] | | | | 2017 to 2019 | | Vice President GM Atlantic-Gulf, The Williams Companies, Inc. |

| | | | | 2013 to 2015 | | General Manager [removed: -] [added: –] Utica, ACMP |

| [removed: John] [added: John] E. [removed: Poarch] [added: Poarch] | | [removed: 53] [added: 54] | | [removed: 2017] [added: 2020] to present | | Senior Vice President [removed: - Engineering Services,] [added: Project Execution,] The Williams Companies, Inc. |

| [removed: Senior Vice President - Engineering Services] | | | | 2017 | | Vice President [removed: -] [added: –] Commercial - West, The Williams Companies, Inc. |

| | | | | 2015 to 2017 | | Vice President [removed: -] [added: –] Commercial & Business Development, The Williams Companies, Inc. |

| | | | | 2011 to 2015 | | General Manager [removed: -] [added: –] Eagle Ford, ACMP |

| [removed: Name] [added: Name] and [removed: Title | | Age] [added: Position] | | [removed: Period of Service] [added: Age] | | [removed: Business] [added: Business] Experience in Past Five [removed: Years] [added: Years] | [added: | |]

| [removed: James E. Scheel] [added: T. Lane Wilson] | | [removed: 54] [added: 53] | | [removed: 2014] [added: 2017] to present | | Senior Vice President [removed: - Northeast G&P,] [added: and General Counsel,] The Williams Companies, Inc. |

| [added: Chad J. Zamarin] | | [added: 43] | | [removed: 2012] [added: 2017] to [removed: 2014] [added: present] | | Senior Vice President [removed: -] [added: –] Corporate Strategic Development, The Williams Companies, Inc. |

| [removed: Ted T. Timmermans] [added: John D. Porter] | | [removed: 62] [added: 50] | | [removed: 2005] [added: 2020] to present | | Vice President, Controller, and Chief Accounting Officer, The Williams Companies, Inc. |

| Senior Vice President [removed: and General Counsel] [added: Project Execution] | | | | 2017 to [removed: 2018] [added: 2019] | | Senior Vice [removed: President, General Counsel, and Chief Compliance Officer,] [added: President – Engineering Services,] The Williams Companies, Inc. |

| [added: Senior Vice President, General Counsel] | | | | 2009 to 2017 | | United States Magistrate Judge for the Northern District of Oklahoma |

| | | | | 2014 to 2017 | | President [removed: -] [added: –] Pipeline and Midstream, Cheniere Energy |

[removed: PART II][added: PART II]

Information About Our Executive Officers

| Senior Vice President Gathering & Processing | | | | 2015 to 2019 | | Senior Vice President – West, The Williams Companies, Inc. |

| Senior Vice President Transmission & Gulf of Mexico | | | | 2019 | | Senior Vice President – Atlantic-Gulf, The Williams Companies, Inc. |

| | | | | | | |

| Vice President, Controller, and Chief Accounting Officer | | | | 2017 to 2019 | | Vice President Enterprise Financial Planning & Analysis and Investor Relations, The Williams Companies |

| | | | | 2013 to 2017 | | Director of Investor Relations & Enterprise Planning |

Executive Officers of the Registrant

Williams Partners L.P. merged with ACMP in February 2015 (the ACMP Merger).

ACMP was the surviving entity in the ACMP Merger and changed its name to Williams Partners L.P. References in the biographical information below to (a) “Pre-merger WPZ” will mean Williams Partners L.P. prior to the ACMP Merger and (b) “ACMP/WPZ” will refer to both ACMP prior to and after the ACMP Merger, when it changed its name to Williams Partners L.P.

| Executive Vice President and Chief Operating Officer | | | | 2017 to 2018 | | Director of the general partner, ACMP/WPZ |

| Senior Vice President - Northeast G&P | | | | 2015 to 2017 | | Director of the general partner, ACMP/WPZ |

| | | | | 2012 to 2015 | | Director of the general partner, Pre-merger WPZ |

| | | | | 2012 to 2014 | | Director of the general partner, Pre-merger ACMP |

| | | | | 2012 to 2014 | | Senior Vice President - Corporate Strategic Development of the general partner, Pre-merger WPZ |

| Vice President, Controller, and Chief Accounting Officer | | | | 2015 to 2018 | | Vice President, Controller, and Chief Accounting Officer of the general partner, ACMP/WPZ |

| T. Lane Wilson | | 52 | | 2018 to present | | Senior Vice President and General Counsel, The Williams Companies, Inc. |

| Chad J. Zamarin | | 42 | | 2017 to present | | Senior Vice President - Corporate Strategic Development, The Williams Companies, Inc. |

| Senior Vice President - Corporate Strategic Development | | | | 2017 to 2018 | | Director of the general partner, ACMP/WPZ |

| | | | | 2011 to 2014 | | Chief Operating Officer, NiSource Midstream, LLC and NiSource Energy Ventures, LLC |

Our common stock is listed on the New York Stock Exchange under the symbol “WMB.” At the close of business on February [removed: 15, 2019,] [added: 19, 2020,] we had [removed: 6,780] [added: 6,512] holders of record of our common stock.

[removed: Performance Graph][added: Performance Graph]

Set forth below is a line graph comparing our cumulative total stockholder return on our common stock (assuming reinvestment of dividends) with the cumulative total return of the S&P 500 Stock [removed: Index and] [added: Index,] the Bloomberg Americas Pipelines [added: Index, and the Arca Natural Gas] Index for the period of five fiscal years commencing January 1, [removed: 2014.][added: 2015.]

The Bloomberg Americas Pipelines Index is composed of Enbridge Inc., Kinder Morgan, Inc., [removed: TransCanada] [added: TC Energy] Corporation, ONEOK, Inc., Pembina Pipeline Corporation, Cheniere Energy, Inc., Targa Resources Corp., Inter Pipeline Ltd., [removed: Keyera Corp., Tallgrass Energy L.P.,] and Williams.

[removed: ][added: |  |]

| | [removed: 2013] [added: 2014] | | [removed: 2014] [added: 2015] | | [removed: 2015] [added: 2016] | | [removed: 2016] [added: 2017] | | [removed: 2017] [added: 2018] | | [removed: 2018] [added: 2019] |

The Arca Natural Gas Index is comprised of over 20 highly capitalized companies in the natural gas industry involved primarily in natural gas exploration and production and natural gas pipeline transportation and transmission.

| |

| --- |

| |

| The Williams Companies, Inc. | 100.0 | | 60.8 | | 79.8 | | 81.5 | | 62.0 | | 70.8 |

| S&P 500 Index | 100.0 | | 101.4 | | 113.5 | | 138.3 | | 132.2 | | 173.8 |

| Bloomberg Americas Pipelines Index | 100.0 | | 55.0 | | 80.7 | | 80.5 | | 69.0 | | 93.4 |

| Arca Natural Gas Index | 100.0 | | 61.0 | | 89.7 | | 76.3 | | 52.1 | | 51.5 |

| The Williams Companies, Inc. | 100.0 | | 121.4 | | 73.8 | | 97.0 | | 98.9 | | 75.3 |

| S&P 500 Index | 100.0 | | 113.7 | | 115.2 | | 129.0 | | 157.2 | | 150.3 |

| Bloomberg Americas Pipelines Index | 100.0 | | 117.1 | | 64.4 | | 94.5 | | 94.3 | | 80.8 |

The following financial data at December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and for each of the three preceding years in the period ended December 31, [removed: 2018,] [added: 2019,] should be read in conjunction with the other financial information included in Part II, Item 7, [removed: Management’s] [added: *Management’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations] [added: Operations*] and Part II, Item 8, [removed: Financial Statements] [added: *Financial* *Statements] and Supplementary [removed: Data] [added: Data*] of this Form 10-K.

| | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| | [removed: (Millions,] [added: (Millions,] except per-share [removed: amounts)] [added: amounts)] | | | | | | | | | | | | | | | | | | |

| Revenues | $ | [removed: 8,686] [added: 8,201] | | | $ | [removed: 8,031] [added: 8,686] | | | $ | [removed: 7,499] [added: 8,031] | | | $ | [removed: 7,360] [added: 7,499] | | | $ | [removed: 7,637] [added: 7,360] | |

| [removed: Net income] [added: Income] (loss) from continuing operations (1) | [added: 729 | | | |] 193 | | | | 2,509 | | | | (350 | | ) | | (1,314 | | ) | [removed: | 2,335 | | |]

| Amounts attributable to The Williams Companies, [removed: Inc.:] [added: Inc. available to common stockholders:] | | | | | | | | | | | | | | | | | | | |

| [removed: Net income] [added: Income] (loss) from continuing operations [removed: (1)] [added: (2)] | [removed: (155] [added: 862] | | [added: | | (156 | |] ) | | 2,174 | | | | (424 | | ) | | (571 | | ) | [removed: | 2,110 | | |]

| [removed: Net] [added: Diluted] income (loss) from continuing operations [removed: (1)] [added: per common share] | [added: .71 | | | |] (.16 | | ) | | 2.62 | | | | (.57 | | ) | | (.76 | | ) | [removed: | 2.91 | | |]

| Total assets at December 31 | [removed: 45,302] [added: 46,040] | | | | [removed: 46,352] [added: 45,302] | | | | [removed: 46,835] [added: 46,352] | | | | [removed: 49,020] [added: 46,835] | | | | [removed: 50,455] [added: 49,020] | | |

| Stockholders’ equity at December 31 [removed: (2)] [added: (3)] | [removed: 14,660] [added: 13,363] | | | | [removed: 9,656] [added: 14,660] | | | | [removed: 4,643] [added: 9,656] | | | | [removed: 6,148] [added: 4,643] | | | | [removed: 8,777] [added: 6,148] | | |

| (1) | [removed: Net income] [added: Income] (loss) from continuing operations: |

| • | For 2017 includes a $1.923 billion benefit for income taxes resulting from Tax Reform rate [removed: change,] [added: change and] a $1.095 billion pre-tax gain on the sale of our Geismar Interest, partially offset by $1.248 billion of pre-tax impairments of certain [removed: assets,] [added: assets] and $776 million of pre-tax regulatory charges resulting from Tax Reform; |

| • | For 2015 includes a $1.4 billion impairment of certain equity-method investments and a $1.1 billion impairment of [removed: goodwill;] [added: goodwill.] |

| [removed: (2)] [added: (3)] | Stockholders’ equity at December 31: |

[removed: - The increase in] [added: | • | For] 2017 includes [added: increases reflecting] our issuance of common stock as part of our Financial [removed: Repositioning.][added: Repositioning and a significant increase in our ownership of WPZ. |]

| | Year Ended December 31, | | | | | | | | | | | | | | | | | | |

| Commercial paper, lease liabilities, and long-term debt (including current portions) at December 31 | 22,497 | | | | 22,414 | | | | 20,935 | | | | 23,502 | | | | 24,487 | | |

| Cash dividends declared per common share | 1.52 | | | | 1.36 | | | | 1.20 | | | | 1.68 | | | | 2.45 | | |

| Diluted weighted-average shares outstanding (thousands) | 1,214,011 | | | | 973,626 | | | | 828,518 | | | | 750,673 | | | | 749,271 | | |

| • | For 2019 includes $464 million of impairments of certain assets, including a $354 million impairment of Constitution’s capitalized project costs, and $186 million impairments of certain equity-method investments, partially offset by a $122 million gain on the sale of our Jackalope equity-method investment; |

| (2) | Income (loss) from continuing operations attributable to the Williams Companies, Inc. available to common stockholders: |

| | |

| --- | --- |

| • | For 2019 includes benefit of $209 million reflecting the noncontrolling interests’ share of the impairment of Constitution’s capitalized project costs. |

| | |

| --- | --- |

| | |

| --- | --- |

| • | For 2019 includes a decrease related to a sale of a partial interest in our Northeast JV business; |

| | |

| --- | --- |

| • | For 2018 includes an increase reflecting our issuance of common stock associated with our merger with WPZ in August 2018; |

| | |

| --- | --- |

| Diluted earnings (loss) per common share: | | | | | | | | | | | | | | | | | | | |

| Commercial paper and long-term debt due within one year at December 31 | 47 | | | | 501 | | | | 878 | | | | 675 | | | | 802 | | |

| Long-term debt at December 31 | 22,367 | | | | 20,434 | | | | 22,624 | | | | 23,812 | | | | 20,780 | | |

| Cash dividends declared per common share | 1.360 | | | | 1.200 | | | | 1.680 | | | | 2.450 | | | | 1.958 | | |

| • | For 2014 includes $2.5 billion pre-tax gain recognized as a result of remeasuring to fair value the equity-method investment we held before we acquired a controlling interest in ACMP, $246 million of insurance recoveries related to the 2013 Geismar Incident, and $154 million of cash received related to a contingency settlement. 2014 also includes $78 million of pre-tax equity losses from Bluegrass Pipeline and Moss Lake related primarily to the underlying write-off of previously capitalized project development costs and $76 million of pre-tax acquisition, merger, and transition expenses related to our acquisition of ACMP. |

- The increase in 2018 reflects our merger with WPZ;

[removed: Report] [added: Report] of Independent Registered Public Accounting [removed: Firm][added: Firm]

[removed: The] [added: The] Williams Companies, [removed: Inc.][added: Inc.]

[removed: Opinion] [added: Opinion] on the Financial [removed: Statements][added: Statements]

We have audited the accompanying consolidated balance sheet of The Williams Companies, Inc. (the Company) as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, [removed: 2018,] [added: 2019,] and the related notes and the financial statement schedule listed in the index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, based on our audits and the [removed: reports] [added: report] of other auditors, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company at December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2018,] [added: 2019,] in conformity with U.S. generally accepted accounting principles.

In the consolidated financial statements, the Company’s investment in Gulfstream was [removed: $225] [added: $217] million and [removed: $244] [added: $225] million as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] respectively, and the Company’s equity earnings in the net income of Gulfstream were [removed: $75] [added: $74] million in [removed: 2018,] [added: 2019,] $75 million in [removed: 2017] [added: 2018] and [removed: $69] [added: $75] million in [removed: 2016.][added: 2017.]

Gulfstream’s financial statements were audited by other auditors whose [removed: reports have] [added: report has] been furnished to us, and our opinion, insofar as it relates to the amounts included for Gulfstream, is based solely on the [removed: reports] [added: report] of [removed: the] other auditors.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February [removed: 21, 2019] [added: 24, 2020] expressed an unqualified opinion thereon.

[added: |] Adoption of [removed: New Accounting Standards][added: new accounting standards | — | | | | — | | | | — | | | | (23 | | ) | | (61 | | ) | | — | | | | (84 | | ) | | (37 | | ) | | (121 | | ) |]

As discussed in Note 1 [removed: and Note 2] to the consolidated financial statements, the Company changed its method for accounting for revenue in 2018.

[removed: Basis] [added: Basis] for [removed: Opinion][added: Opinion]

We believe that our audits and the [removed: reports] [added: report] of other auditors provide a reasonable basis for our opinion.

[removed: February 21, 2019][added: | 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

[removed: Report] [added: Report] of Independent Registered Public Accounting [removed: Firm][added: Firm]

[removed: Opinion] [added: Opinion] on the Financial [removed: Statements][added: Statements]

We have audited the balance sheets of Gulfstream Natural Gas System, L.L.C. (the “Company”) as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the related statements of operations, comprehensive income, cash flows, and members’ equity for [added: each of] the [added: three] years [removed: then ended,] [added: in the period ended December 31, 2019,] including the related notes (collectively referred to as the “financial [removed: statements;” not] [added: statements”) (not] presented herein).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the results of its operations and its cash flows for [added: each of] the [added: three] years [removed: then] [added: in the period] ended [added: December 31, 2019] in conformity with accounting principles generally accepted in the United States of America.

[removed: Basis] [added: Basis] for [removed: Opinion][added: Opinion]

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) [removed: (“PCAOB”)] [added: (PCAOB)] and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

[removed: February 22, 2017][added: | | 2017 | | |]

[removed: The] [added: The] Williams Companies, [removed: Inc.][added: Inc.]

[removed: Consolidated] [added: Consolidated] Statement of [removed: Operations][added: Operations]

| | | [removed: Years] [added: Year] Ended December [removed: 31,] [added: 31,] | | | | | | | | | | |

| | [removed: | 2018 | | | | 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | |

| | [removed: (Millions,] [added: (Millions,] except per-share [removed: amounts)] [added: amounts)] | | | | | | | | | | | |

| Service revenues | | $ | [removed: 5,502] [added: 5,933] | | | $ | [removed: 5,312] [added: 5,502] | | | $ | [removed: 5,171] [added: 5,312] | |

| Service revenues [removed: -] [added: –] commodity consideration (Note 1) | | [removed: 400] [added: 203] | | | | [removed: —] [added: 400] | | | | — | | |

| Product sales | | [removed: 2,784] [added: 2,065] | | | | [removed: 2,719] [added: 2,784] | | | | [removed: 2,328] [added: 2,719] | | |

| Total revenues | | [removed: 8,686] [added: 8,201] | | | | [removed: 8,031] [added: 8,686] | | | | [removed: 7,499] [added: 8,031] | | |

| Product costs | | [removed: 2,707] [added: 1,961] | | | | [removed: 2,300] [added: 2,707] | | | | [removed: 1,725] [added: 2,300] | | |

| Processing commodity expenses [removed: (Note 1)] | | [removed: 137] [added: 105] | | | | [removed: —] [added: 137] | | | | — | | |

| Operating and maintenance expenses | | [removed: 1,507] [added: 1,468] | | | | [removed: 1,576] [added: 1,507] | | | | [removed: 1,592] [added: 1,576] | | |