Williams Companies (WMB) 10-K risk factor changes: FY2020 vs FY2019

These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, [removed: outcome] [added: outcomes] of regulatory proceedings, market conditions, and other [removed: matters as discussed below.][added: matters.]

All statements, other than statements of historical facts, included in this report that address activities, events, or developments that we expect, [removed: believe] [added: believe,] or anticipate will exist or may occur in the future, are forward-looking statements.

[removed: | • |] [added: -] Levels of dividends to Williams stockholders; [removed: |]

[removed: | • |] [added: -] Future credit ratings of Williams and its affiliates; [removed: |]

[removed: | • |] [added: -] Amounts and nature of future capital expenditures; [removed: |]

[removed: | • |] [added: -] Expansion and growth of our business and operations; [removed: |]

[removed: | • |] [added: -] Expected in-service dates for capital projects; [removed: |]

[removed: | • |] [added: -] Financial condition and liquidity; [removed: |]

[removed: | • |] [added: -] Business strategy; [removed: |]

[removed: | • |] [added: -] Cash flow from operations or results of operations; [removed: |]

[removed: | • |] [added: -] Seasonality of certain business components; [removed: |]

[removed: | • |] [added: -] Natural [removed: gas and] [added: gas,] natural gas [removed: liquids] [added: liquids, and crude oil] prices, supply, and demand; [removed: |]

[removed: | • |] [added: -] Demand for our [removed: services. |][added: services;]

[removed: | • |] [added: -] Availability of supplies, market demand, and volatility of prices; [removed: |]

[removed: | • |] [added: -] Development and rate of adoption of alternative energy sources; [removed: |]

[removed: | • |] [added: -] The impact of existing and future laws and 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: |]

[removed: | • |] [added: -] Our exposure to the credit risk of our customers and counterparties; [removed: |]

[removed: | • |] [added: -] Our ability to acquire new businesses and assets and successfully integrate those operations and assets into existing businesses as well as successfully expand our facilities, and to consummate asset sales on acceptable terms; [removed: |]

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

[removed: | • |] [added: -] The strength and financial resources of our competitors and the effects of competition; [removed: |]

[removed: | • |] [added: -] The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate; [removed: |]

[removed: | • |] [added: -] Whether we will be able to effectively execute our financing plan; [removed: |]

[removed: | • |] [added: -] Increasing scrutiny and changing expectations from stakeholders with respect to our environmental, [removed: social] [added: social,] and governance practices; [removed: |]

[removed: | • |] [added: -] The physical and financial risks associated with climate change; [removed: |]

[removed: | • |] [added: -] The [removed: impact] [added: impacts] of operational and developmental hazards and unforeseen interruptions; [removed: |]

[removed: | • |] [added: -] Risks associated with weather and natural phenomena, including climate conditions and physical damage to our facilities; [removed: |]

[removed: | • |] [added: -] Acts of terrorism, cybersecurity incidents, and related disruptions; [removed: |]

[removed: | • |] [added: -] Our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans; [removed: |]

[removed: | • |] [added: -] Changes in maintenance and construction costs, as well as our ability to obtain sufficient [removed: construction] [added: construction-] related [removed: inputs] [added: inputs,] including skilled labor; [removed: |]

[removed: | • |] [added: -] Inflation, interest rates, and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers); [removed: |]

[removed: | • |] [added: -] Risks related to financing, including restrictions stemming from debt agreements, future changes in credit ratings as determined by nationally recognized credit rating agencies, and the availability and cost of capital; [removed: |]

[removed: | • |] [added: -] Changes in the current geopolitical situation; [removed: |]

[removed: | • |] [added: -] Whether we are able to pay current and expected levels of dividends; [removed: |]

[removed: | • |] [added: -] Additional risks described in our filings with the Securities and Exchange Commission. [removed: |]

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

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

[removed: | • | Worldwide] [added: - Imbalances in supply] and [added: demand whether rising from worldwide or] domestic supplies of and demand for natural gas, NGLs, oil, and related commodities; [removed: |]

[removed: | • |] [added: -] Turmoil in the Middle East and other producing regions; [removed: |]

[removed: | • |] [added: -] The level of consumer demand; [removed: |]

[removed: | • |] [added: -] The price and availability of other types of fuels or feedstocks; [removed: |]

- The impact of the coronavirus (COVID-19) pandemic.

- The risks resulting from outbreaks or other public health crises, including COVID-19;

- The ability of the members of the Organization of Petroleum Exporting Countries (OPEC) and other oil exporting nations to agree to and maintain oil price and production controls and the impact on domestic production;

- Changes in U.S. governmental administration and policies;

- The activities of OPEC and other countries, whether acting independently of or informally aligned with OPEC, which have significant oil, natural gas or other commodity production capabilities, including Russia;

We may have limited

- Natural gas and NGL prices, demand, availability, and margins in our markets.

Higher prices for energy commodities related to our businesses could result in a decline in the demand for those commodities and, therefore, in customer contracts or throughput on our pipeline systems.

The results of these efforts will impact our reputation and positioning in the market.

Additionally, we may face reputational challenges in the event our

We face risks related to the COVID-19 pandemic and other health epidemics

The global outbreak of the coronavirus (COVID-19) is currently impacting countries, communities, supply chains, and markets.

We provide a critical service to our customers, which means that it is paramount that we keep our employees safe.

We cannot predict whether, and the extent to which, COVID-19 will have a material impact on our business, including our liquidity, financial condition, and results of operations.

COVID-19 poses a risk to our employees, our customers, our suppliers, and the communities in which we operate, which could negatively impact our business.

To the extent that our access to the capital markets is adversely affected by COVID-19, we may need to consider alternative sources of funding for our operations and for working capital, any of which could increase our cost of capital.

Measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, and shutdowns, may cause us to experience operational delays or to delay plans for growth.

The extent to which COVID-19 may impact our business will depend on future developments, which are highly uncertain and cannot be predicted, including new information concerning the severity of COVID-19 and the actions taken to contain it or treat its impact, among others.

To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other factors described in this report.

could affect our ability to resist cybersecurity threats.

If stockholder activists were to again take or threaten to take

Our and our customers’ access to capital could be affected by financial institutions’ policies concerning fossil- fuel related businesses.

Public concern regarding the potential effects of climate change have directed increased attention towards the funding sources of fossil-fuel energy companies.

As a result, certain financial institutions, funds, and other sources of capital have restricted or eliminated their investment in certain market segments of fossil-fuel related energy.

Ultimately, limiting fossil-fuel related companies’ access to capital could make it more difficult for our customers to secure funding for exploration and production activities or for us to secure funding for growth projects.

Such a lack of capital could also both indirectly affect demand for our services and directly affect our ability to fund construction or other capital projects.

The change in the U.S. governmental administration and its policies may increase the likelihood of such legal and regulatory developments.

New or amended environmental laws and regulations can also result in significant increases in capital costs we incur to comply with such laws and regulations.

We could also be subjected to a carbon tax assessed on the basis of carbon dioxide emissions or otherwise.

together with systems of permitted emissions allowances.

General Risk Factors

| | |

| --- | --- |

| • | The activities of the Organization of Petroleum Exporting Countries; |

of operations, and cash flows.

| • | We could be required to contribute additional capital to support acquired businesses or assets; |

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

We also face attempts to

In addition, actions

If there is a determination that the spin-off of WPX Energy, Inc. (WPX) stock to our stockholders is taxable for U.S. federal income tax purposes because the facts, representations or undertakings underlying a U.S. Internal Revenue Service private letter ruling or a tax opinion are incorrect or for any other reason, then we and our stockholders could incur significant income tax liabilities.

In connection with our original separation plan that called for an initial public offering (IPO) of stock of WPX and a subsequent spin-off of our remaining shares of WPX to our stockholders, we obtained a private letter ruling from the IRS and an opinion of our outside tax advisor, to the effect that the distribution by us of WPX shares to our stockholders, and any related restructuring transaction undertaken by us, would not result in recognition for U.S. federal income tax purposes, of income, gain or loss to us or our stockholders under section 355 and section 368(a)(1)(D) of the U.S. Internal Revenue Code of 1986, as amended (Code), except for cash payments made to our stockholders in lieu of fractional shares of WPX common stock.

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

that the spin-off pursuant to our revised separation plan which was ultimately consummated on December 31, 2011, which did not involve an IPO of WPX shares, would not result in the recognition, for federal income tax purposes, of income, gain, or loss to us or our stockholders under section 355 and section 368(a)(1)(D) of the Code, except for cash payments made to our stockholders in lieu of fractional shares of WPX.

The private letter ruling and opinion have relied on or will rely on certain facts, representations, and undertakings from us and WPX regarding the past and future conduct of the companies’ respective businesses and other matters.

If any of these facts, representations, or undertakings are, or become, incorrect or are not otherwise satisfied, including as a result of certain significant changes in the stock ownership of us or WPX after the spin-off, or if the IRS disagrees with any such facts and representations upon audit, we and our stockholders may not be able to rely on the private letter ruling or the opinion of our tax advisor and could be subject to significant income tax liabilities.

credit or performance risk.

[removed: The rates] [added: Rates] are established [removed: through] [added: in accordance with] the FERC’s ratemaking process.

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

[removed: | • | Atlantic-Gulf] [added: - Transmission & Gulf of Mexico] is comprised of our interstate natural gas [removed: pipeline, Transco,] [added: pipelines, Transco] and [added: Northwest Pipeline, as well as] 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 variable interest entity), which is a proprietary floating production system, [removed: as well as] a 50 percent equity-method investment in Gulfstream, [removed: a 60 percent equity-method investment in Discovery,] and a [removed: 41] [added: 60] percent equity-method investment in [removed: Constitution as of December 31, 2019. |][added: Discovery.]

[removed: | • |] [added: -] Northeast G&P is comprised of our midstream gathering, processing, and fractionation businesses in the Marcellus Shale region primarily in [removed: Pennsylvania,] [added: Pennsylvania and] New York, and the Utica Shale region of eastern Ohio, as well as a 65 percent interest in our Northeast JV (a consolidated variable interest entity) which operates in West Virginia, Ohio, and Pennsylvania, a 66 percent interest in Cardinal (a consolidated variable interest entity) which operates in Ohio, a 69 percent equity-method investment in Laurel Mountain, a [removed: 58] [added: 99] percent [added: interest in Caiman II (a former] equity-method investment [added: which is a consolidated entity following our November 2020 acquisition of an additional ownership interest) which owns a 50 percent equity-method investment] in [removed: Caiman II,] [added: Blue Racer,] and Appalachia Midstream [removed: Services, LLC, which] [added: Investments, a wholly owned subsidiary that] owns equity-method investments with an approximate average 66 percent interest in multiple gas gathering systems in the Marcellus Shale [removed: (Appalachia Midstream Investments). |][added: region.]

[removed: and our previously owned 50 percent equity-method investment in the Delaware basin gas gathering system (DBJV) (see] [added: See] Note [removed: 6] [added: 7] – Investing Activities of Notes to Consolidated Financial [removed: Statements).][added: Statements for our more significant equity-method investees.]

In December [removed: 2019,] [added: 2020,] we paid a regular quarterly dividend of [removed: $0.38] [added: $0.40] per share.

On January [removed: 28, 2020,] [added: 26, 2021,] our board of directors approved a regular quarterly dividend of [removed: $0.40] [added: $0.41] per share payable on March [removed: 30, 2020.][added: 29, 2021.]

*Net income (loss) attributable to The Williams Companies, Inc.*, for the year ended December 31, [removed: 2019, increased $1.005 billion] [added: 2020, decreased $639 million] compared to the year ended December 31, [removed: 2018,] [added: 2019,] reflecting:

[removed: | • | A $1.451 billion] [added: *•*A $282 million] decrease in *Impairment of certain [removed: assets;* |][added: assets*;]

These [removed: favorable] [added: unfavorable] changes were partially offset by:

[removed: | *•* | A $694 million] [added: The] decrease in [removed: the] *Gain on sale of certain assets and businesses* [removed: primarily related to] [added: reflects] the [removed: sale] [added: absence] of the [added: gain from the sale of our] Four Corners area [removed: business] [added: assets recorded] in the fourth quarter of [removed: 2018; |][added: 2018 (see Note 3 – Acquisitions and Divestitures of Notes to the Consolidated Financial Statements).]

[removed: | *•* | A $266 million decrease] [added: The unfavorable change] in *Other investing income (loss) – net* [added: is] primarily due to the absence of [removed: 2018 gains on deconsolidations and] [added: a] 2019 [removed: impairments] [added: gain on the sale] of [added: our] equity-method [removed: investments,] [added: investment in Jackalope,] partially offset by [added: the absence of] a 2019 [removed: gain] [added: loss] on the [removed: sale] [added: deconsolidation] of [removed: our interest in Jackalope; |][added: Constitution (see Note 7 – Investing Activities of Notes to Consolidated Financial Statements).]

| [removed: *•*] [added: Commodity margins] | [removed: $138 million of lower commodity margins;] | [added: | $ | 12 | | | | | $ | 25 | | | | | $ | 40 | |]

[removed: | *•* | A $197 million increase in provision] [added: *Provision (benefit)] for income [removed: taxes driven by] [added: taxes* changed unfavorably primarily due to] higher pre-tax [removed: income,] [added: income attributable to The Williams Companies, Inc,] partially offset by the absence of a [removed: 2018] charge to establish [removed: a] [added: $105 million] valuation [removed: allowance] [added: allowance, recorded in 2018,] on [added: certain] deferred tax assets that may not be realized following the WPZ merger. [removed: |]

[removed: The full] [added: In total, the] project increased capacity by [removed: 190] [added: 296] Mdth/d.

[removed: The project was] [added: We] placed [added: 230 Mdth/d of capacity under the project] into service in [removed: December 2019] [added: the fourth quarter of 2020,] and [removed: increased capacity by 65 Mdth/d.][added: the project was fully in service on January 1, 2021.]

[removed: The] [added: Together, the first two phases of the] project increased capacity by [removed: 475] [added: 1,025] Mdth/d.

[removed: NGL per-unit margins were approximately 44 percent] [added: - A $66 million decrease associated with] lower [removed: in 2019 compared to 2018] [added: sales prices] primarily due to [removed: a 31] [added: 29] percent and [removed: a 44] [added: 48] percent [removed: decrease in] [added: lower average net realized] per-unit non-ethane and ethane sales prices, [removed: respectively, slightly] [added: respectively; partially] offset by [removed: an approximate 10 percent decrease in per-unit natural gas feedstock prices.]

Our business plan for [removed: 2020] [added: 2021] includes a continued focus on earnings and cash flow growth, while continuing to improve leverage metrics and control operating costs.

Our growth capital and investment expenditures in [removed: 2020] [added: 2021] are expected to be in a range from [removed: $1.1] [added: $1.0] billion to [removed: $1.3] [added: $1.2] billion.

Growth capital spending in [removed: 2020] [added: 2021] primarily includes Transco expansions, all of which are fully contracted with firm transportation agreements, and [removed: our Bluestem NGL pipeline project] [added: projects supporting the Northeast G&P business and opportunities] in the [removed: Mid-Continent region.][added: Haynesville area.]

[removed: | • |] [added: -] Opposition to, and legal regulations affecting, our infrastructure projects, including the risk of delay or denial in permits and approvals needed for our projects; [removed: |]

[removed: | • |] [added: -] Counterparty credit and performance [removed: risk; |][added: risk, including unexpected developments in customer bankruptcy proceedings;]

[removed: | • |] [added: -] Unexpected significant increases in capital expenditures or delays in capital project execution; [removed: |]

[removed: | • |] [added: -] Unexpected changes in customer drilling and production activities, which could negatively impact gathering and processing volumes; [removed: |]

[removed: | • |] [added: -] Lower than anticipated demand for natural gas and natural gas products which could result in lower than expected volumes, energy commodity prices, and margins; [removed: |]

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

[removed: | • |] [added: -] Physical damages to facilities, including damage to offshore facilities by [removed: named windstorms; |][added: weather-related events;]

[removed: | • |] [added: -] Other risks set forth under Part I, Item 1A. [removed: Risk Factors in this report. |]

We seek to maintain a strong financial position and liquidity, as well as manage a diversified portfolio of energy infrastructure assets [removed: which] [added: that] continue to serve key growth markets and supply basins in the United States.

The project involves an expansion of Transco’s existing natural gas transmission system from Station 85 in west central Alabama to [removed: a new] [added: an] interconnection with the Sabal Trail pipeline in [added: east central] Alabama.

Phase I was completed in 2017 and it increased capacity by [removed: 818 Mdth/d.]

[removed: Approvals] [added: However, approvals] required for the project from the New York State Department of Environmental Conservation and the New Jersey Department of Environmental Protection [removed: remain pending, with each such agency having denied, without prejudice, Transco’s applications for such approvals.][added: were denied in May 2020.]

In July [removed: 2019,] [added: 2020,] we [removed: filed an application with] [added: received approval from] the FERC for [removed: approval of] the project to expand Transco’s existing natural gas transmission system and also extend its system through a capacity lease with National Fuel Gas Supply Corporation that will enable us to provide incremental firm transportation from Clermont, Pennsylvania and from the Zick interconnection on Transco’s Leidy Line to the River Road regulating station in Lancaster County, Pennsylvania.

We [added: placed 125 Mdth/d of capacity under the project into service in the fourth quarter of 2020, and we] plan to place the [added: remainder of the] project into service as early as the fourth quarter of 2021, assuming timely receipt of all necessary regulatory approvals.

We [removed: are expanding] [added: expanded] our presence in the Mid-Continent region through building a [removed: 188-mile] [added: 189-mile] NGL pipeline from our fractionator [added: and NGL storage facilities] near Conway, [removed: Kansas] [added: Kansas,] to an [removed: interconnect] [added: interconnection] with a third-party NGL pipeline system in Oklahoma, providing us with firm access to Mt.

As part of the project, the [removed: third-party intends to construct] [added: third party constructed] a 110-mile pipeline extension of [removed: their] [added: its] existing NGL pipeline system that will have an initial capacity of 120 Mbbls/d.

Further, during the first quarter of 2019, we exercised an option to purchase a 20 percent equity interest in [added: Targa Train 7,] a Mt.

The pipeline and extension projects [removed: are expected to be] [added: were] placed into service [removed: during the first quarter of 2021.][added: on December 1, 2020.]

| | [added: | |] Benefit Cost | | | | | | | | [added: | | | |] Benefit Obligation | | | | | | | [added: | |]

- West is comprised of our gas gathering, processing, and treating operations in the Rocky Mountain region of Colorado and 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, 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, a 50 percent equity-method investment in OPPL, a 50 percent equity-method investment in RMM, a 20 percent equity-method investment in Targa Train 7, and a 15 percent interest in Brazos Permian II, LLC (Brazos Permian II).

- Other includes certain previously owned operations, minor business activities that are not reportable segments, as well as corporate operations.

- An $860 million increase in *Impairment of equity-method investments*;

*•*A $187 million *Impairment of goodwill* in 2020;

- A $123 million unfavorable change in *Net income (loss) attributable to noncontrolling interests* primarily driven by a reduced share of certain impairment charges attributable to noncontrolling interests;

*•*The absence of a $122 million gain recognized on the sale of our interest in an equity-method investment in 2019;

*•*A $76 million unfavorable change in *Other income (expense) – net.*

- A $234 million favorable change in *Operating and maintenance expenses* and *Selling, general, and administrative expenses*, driven by lower employee-related expenses, including the absence of 2019 severance and related costs and the associated reduced costs in 2020 as well as the benefit of a change in an employee benefit policy;

- A $256 million favorable change in *Provision (benefit) for income taxes.*

Acquisition of Caiman II (Blue Racer)

As of December 31, 2019, we effectively owned a 29 percent indirect interest in Blue Racer through our 58 percent interest in Caiman II, whose primary asset is a 50 percent interest in Blue Racer.

On November 18, 2020, we paid $157 million, net of cash acquired, to acquire an additional 41 percent ownership interest in Caiman II.

We now control and consolidate Caiman II, reporting the 50 percent interest in Blue Racer as an equity-method investment.

*Transmission & Gulf of Mexico*

818 Mdth/d.

We placed Phase II into service on May 1, 2020.

Belvieu fractionation train developed by the third party, which was placed into service in the first quarter of 2020.

COVID-19

The outbreak of COVID-19 has severely impacted global economic activity and caused significant volatility and negative pressure in financial markets.

We are monitoring the COVID-19 pandemic and have taken steps intended to protect the safety of our customers, employees, and communities, and to support the continued delivery of safe and reliable service to our customers and the communities we serve.

We are continuing to monitor developments with respect to the outbreak and note the following:

- Our financial condition, results of operations, and liquidity have not been materially impacted by direct effects of COVID-19.

- We believe we have the ability to access the debt market, if necessary, as evidenced by the successful completion of debt offerings during second-quarter 2020, and continue to have significant levels of unused capacity on our revolving credit facility.

- We continue to monitor and adapt our remote working arrangements and limit business-related travel.

Implementation of these measures has not required material expenditures or significantly impacted our ability to operate our business.

- Our remote working arrangements have not significantly impacted our internal controls over financial reporting and disclosure controls and procedures.

Customer Bankruptcy

In June 2020, our customer, Chesapeake Energy Corporation (Chesapeake), announced that it had voluntarily filed for relief under Chapter 11 of the U.S. Bankruptcy Code.

We provide midstream services, including wellhead gathering, for the natural gas that Chesapeake and its joint interest owners produce, primarily in the Eagle Ford Shale, Haynesville Shale, and Marcellus Shale regions (through Appalachia Midstream Investments).

In November 2020, we reached a global resolution with Chesapeake as part of Chesapeake’s restructuring process.

The resolution was approved by the bankruptcy court in December 2020 and per the terms, Chesapeake paid all outstanding pre-petition amounts due to us.

Additional terms include reduced gathering fees in the Haynesville Shale region, continuation of the gathering agreements in the Eagle Ford Shale and Marcellus Shale

regions, a long-term gas supply commitment for Transco’s Regional Energy Access pipeline currently under development, and transferring certain natural gas properties in Louisiana to us.

The credit profiles of certain of our producer customers continue to be challenged, including some that have filed for bankruptcy protection.

However, we note that the physical nature of services we provide supports the success of these customers.

In many cases, we have long-term acreage dedications with strong historical contractual conveyances that create real estate interests in unproduced gas.

Our gathering lines in many cases are physically connected to the customers’ wellheads and pads, and there may not be alternative gathering lines nearby.

The construction of gathering systems is capital intensive and it would be costly for others to replicate, especially considering the depletion to date of the associated reserves.

As a result, we play a critical role in getting customers’ production from the wellhead to a marketable condition and location.

| | |

| --- | --- |

| • | West is comprised of our interstate natural gas pipeline, Northwest Pipeline, and our gas gathering, processing, and treating operations in the Rocky Mountain region of Colorado and 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, a 50 percent equity-method investment in OPPL, a 50 percent equity-method investment in RMM, and a 15 percent equity-method investment in Brazos Permian II. West also included our former natural gas gathering and 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 former 50 percent interest in Jackalope (an equity-method investment following deconsolidation as of June 30, 2018), which was sold in April 2019, |

| • | Other includes 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 – 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. |

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

| *•* | 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. |

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

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

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.

(See Note 3 – Acquisitions and Divestitures of Notes to Consolidated Financial Statements.)

Northeast JV

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.

(See Note 6 – Investing Activities of Notes to Consolidated Financial Statements.)

Constitution

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.

(See Note 4 – Variable Interest Entities of Notes to Consolidated Financial Statements for further discussion.)

*Northeast G&P*

Ohio River Supply Hub Expansion

We agreed to expand our services for certain customers to provide additional rich gas processing capacity in the Marcellus and Upper Devonian Shale in West Virginia and Pennsylvania.

Associated with these agreements, we have expanded the inlet processing capacity of our Oak Grove facility to 400 MMcf/d.

We have also constructed a new NGL pipeline from Moundsville to the Harrison Hub fractionation facility to provide an additional outlet for NGLs.

These expansions are supported by long-term, fee-based agreements and volumetric commitments.

Susquehanna Supply Hub Expansion

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.

*Atlantic-Gulf*

Rivervale South to Market

In August 2018, we received approval from the FERC to expand Transco’s existing natural gas transmission system to provide incremental firm transportation capacity from the existing Rivervale interconnection with Tennessee Gas Pipeline on Transco’s North New Jersey Extension to other existing Transco locations within New

Jersey.

The project was placed into partial service in July 2019.

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

Norphlet Project

In March 2016, we announced that we reached an agreement to provide deepwater gas gathering services to the Appomattox development in the Gulf of Mexico.

(See Note [removed: 15] [added: 14] – Debt and 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: 2019] [added: 2020] and [removed: 2018.][added: 2019.]

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

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

| Long-term debt, including current portion: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |]

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

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

| | | [removed: 2019] | | | | [removed: 2020] [added: 2021] | | | | [removed: 2021] | | [added: 2022] | | [removed: 2022] | | | | 2023 | | | | [added: | | 2024 | | | | | | 2025 | | | | | |] Thereafter (1) | | | | [added: | |] Total | | | | [added: | |] Fair Value December 31, [removed: 2018] [added: 2020] | | |

| Weighted-average interest rate | | [removed: 5.2] | | [added: | | 5.0 | |] % | | [removed: 5.2] | | [added: 5.1 | |] % | | [added: | |] 5.2 | | % | | [added: | |] 5.3 | | % | | [removed: 5.5] | | [added: 5.4 | |] % | | [removed: 5.7] | | [added: 5.4 | |] % | | | | | | | | | [added: | | | |]

[removed: |] (1) [removed: |] Includes unamortized discount / premium and debt issuance costs. [removed: |]

At December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] our derivative activity was not material.

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| Fixed rate | | | | | | $ | 894 | | | | | $ | 2,025 | | | | | $ | 1,477 | | | | | $ | 2,280 | | | | | $ | 1,617 | | | | | $ | 14,051 | | | | | $ | 22,344 | | | | | $ | 27,043 | |

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| | | | (Millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Long-term debt, including current portion: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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| Variable rate | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |

| Fixed rate | | $ | 47 | | | $ | 2,138 | | | $ | 890 | | | $ | 2,021 | | | $ | 1,473 | | | $ | 15,685 | | | $ | 22,254 | | | $ | 23,170 | |

| Variable rate (2) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 160 | | | $ | — | | | $ | 160 | | | $ | 160 | |

| | |

| --- | --- |

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

(See Note 18 – Fair Value Measurements, Guarantees, and Concentration of Credit Risk of Notes to Consolidated Financial Statements.)

In this report, Williams (which includes The Williams Companies, Inc. and, unless the context otherwise indicates, all of our subsidiaries) is at times referred to in the first person as “we,” [removed: “us”] [added: “us,”] or “our.” We also sometimes refer to Williams as the “Company.”

We own an interest in and operate over 30,000 miles of pipelines, [removed: 28] [added: 34] processing facilities, [removed: 7] [added: 9] fractionation facilities, and approximately 23 million barrels of NGL storage capacity, handling approximately 30 percent of the nation’s natural gas volumes.

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

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

[removed: We have firm transportation and storage contracts that are generally long-term] [added: These] contracts [removed: with] [added: have] various expiration dates and account for the major portion of our regulated [removed: businesses.][added: businesses, and are not exposed to crude oil prices.]

Transco’s and Northwest Pipeline’s three largest customers in [removed: 2019] [added: 2020] accounted for approximately 28 percent and [removed: 48] [added: 51] percent, respectively, of their total [added: operating] revenues.

[removed: Our treating facilities] remove water vapor, carbon dioxide, and other contaminants, and collect condensate.

[removed: | • | Fee-based: We are paid a fee based on the volume of natural gas processed, generally measured in the Btu heating value. A portion of our fee-based processing revenue includes a share of the margins on the NGLs produced.] For the year ended December 31, [removed: 2019,] [added: 2020, approximately] 80 percent of our NGL production volumes were under fee-based contracts. [removed: |]

[removed: | • |] [added: -] Noncash commodity-based: We also process gas under two types of commodity-based contracts, keep-whole and percent-of-liquids, where we receive consideration for our services in the form of NGLs. [removed: For a keep-whole arrangement we replace the Btu content of the retained NGLs with natural gas purchases, also known as shrink replacement gas. For a percent-of-liquids arrangement, we deliver an agreed-upon percentage of the extracted NGLs and retain the remainder. Retained NGLs are referred to as our equity NGL production. For the year ended December 31, 2019, 20 percent of our NGL production volumes were under noncash commodity-based contracts. |]

Certain contracts include [removed: fee redetermination or] cost of service mechanisms that are designed to support a return on invested capital and allow our gathering rates to be adjusted, subject to specified caps in certain cases, to account for variability in volume, capital expenditures, commodity price fluctuations, compression and other expenses.

We also have certain gas gathering and processing agreements with [removed: minimum volume commitments (MVC),] [added: 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.

Demand for gas gathering and processing services is dependent on producers’ drilling activities, which is impacted by the strength of the economy, [removed: natural gas] [added: commodity] prices, and the resulting demand for natural gas by manufacturing and industrial companies and consumers.

During [removed: 2019,] [added: 2020,] our facilities gathered and processed gas and crude oil for approximately 230 customers.

Our top ten customers accounted for approximately [removed: 75] [added: 73] percent of our gathering and processing fee revenues and NGL margins from our noncash commodity-based agreements.

Key variables for [removed: our] all of our businesses will continue to be:

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

[removed: | • |] [added: -] Producer drilling activities impacting natural gas supplies supporting our gathering and processing volumes; [removed: |]

[removed: | • |] [added: -] Retaining and attracting customers by continuing to provide reliable services; [removed: |]

[removed: | • |] [added: -] Revenue growth associated with additional infrastructure either completed or currently under construction; [removed: |]

[removed: | • |] [added: -] Prices impacting our commodity-based activities; [removed: |]

[removed: | • |] [added: -] Disciplined growth in our service areas. [removed: |]

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

[removed: | • |] [added: -] Transmission & Gulf of Mexico is comprised of our interstate natural gas pipelines, Transco and Northwest Pipeline, as well as natural gas [removed: gathering, processing,] [added: gathering] and [removed: treating assets] [added: processing] and crude oil production handling and transportation assets in the Gulf Coast region, including a 51 percent interest in Gulfstar One (a consolidated variable interest entity), which is a proprietary floating production system, [removed: and various petrochemical and feedstock pipelines in the Gulf Coast region,] a 50 percent equity-method investment in Gulfstream, and a 60 percent equity-method investment in Discovery. [removed: |]

[removed: | • |] [added: -] Northeast G&P is comprised of our midstream gathering, processing, and fractionation businesses in the Marcellus Shale region primarily in [removed: Pennsylvania,] [added: Pennsylvania and] New York, and the Utica Shale region of eastern Ohio, as well as a 65 percent interest in our Northeast JV (a consolidated variable interest entity) which operates in West Virginia, Ohio, and Pennsylvania, a 66 percent interest in Cardinal (a consolidated variable interest entity) which operates in Ohio, a 69 percent equity-method investment in Laurel Mountain, a [removed: 58] [added: 99] percent [added: interest in Caiman II (a former] equity-method investment [added: which is a consolidated entity following our November 2020 acquisition of an additional ownership interest) which owns a 50 percent equity-method investment] in [removed: Caiman II,] [added: Blue Racer,] and Appalachia Midstream [removed: Services, LLC, which] [added: Investments, a wholly owned subsidiary that] owns equity-method investments with an approximate average 66 percent interest in multiple gas gathering systems in the Marcellus Shale [removed: (Appalachia Midstream Investments). |][added: region.]

[removed: | • |] [added: -] West is comprised of our gas gathering, processing, and treating operations in the Rocky Mountain region of Colorado and 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, and Permian basins. [removed: 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, a 50 percent equity-method investment in OPPL, a 50 percent equity-method investment in RMM, and a 15 percent equity-method investment in Brazos Permian II. |]

[removed: | • |] [added: -] Other includes minor business activities that are not [removed: operating] [added: reportable] segments, as well as corporate operations. [removed: |]

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

This segment includes the Transco interstate natural gas pipeline that extends from the Gulf of Mexico to the eastern seaboard, the Northwest Pipeline interstate natural gas pipeline, as well as natural gas gathering, processing and treating, crude oil production handling, and NGL fractionation assets within the onshore, offshore shelf, and [added: deepwater areas in and around the Gulf Coast states of Texas, Louisiana, Mississippi, and Alabama.]

At December 31, [removed: 2019,] [added: 2020,] Transco’s [removed: system, which extends from Texas to New York,] [added: system] had a system-wide delivery capacity totaling approximately [removed: 17.4] [added: 17.9] MMdth/d.

During [removed: 2019,] [added: 2020,] Transco completed [removed: four] [added: one] fully-contracted [added: expansion and began partial early service on two additional fully-contracted] expansions, which added more than [removed: 0.6] [added: 0.5] MMdth of firm transportation capacity per day to our pipeline.

The total usable gas storage capacity available to Transco and its customers in such underground storage fields and LNG storage facility and through storage service contracts is approximately [removed: 198 Bcf] [added: 194 MMdth] of natural gas.

At December 31, [removed: 2019,] [added: 2020,] Transco’s customers had stored in its facilities approximately [removed: 140 Bcf] [added: 148 MMdth] of natural gas.

Northwest Pipeline is an interstate natural gas transmission company that owns and operates a [added: 3,900-mile] natural gas pipeline system, which is regulated by the FERC, extending from the San Juan basin in northwestern New Mexico and southwestern Colorado through Colorado, Utah, Wyoming, Idaho, Oregon, and Washington to a point on the Canadian border near Sumas, Washington.

At December 31, [removed: 2019,] [added: 2020,] Northwest Pipeline’s [removed: system, having] [added: system had] long-term firm transportation and storage redelivery agreements with aggregate capacity reservations of approximately [removed: 3.9 MMdth/d, was composed of approximately 3,900 miles of mainline and lateral transmission pipeline and 41 transmission compressor stations having a combined sea level-rated capacity of approximately 472,000 horsepower.][added: 3.8 MMdth/d.]

These storage facilities have an aggregate working natural gas storage capacity of 14.2 [removed: MMdth of natural gas,] [added: MMdth,] which is substantially utilized for [removed: third-][added: third-party natural gas.]

| | | [added: | | | |] Offshore Natural Gas Pipelines | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |]

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

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

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

| Consolidated: | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | |]

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

Our interstate natural gas transmission businesses are fully contracted under long-term firm reservation contracts with high credit quality customers.

Our treating facilities

- Fee-based: We are paid a fee based on the volume of natural gas processed, generally measured in the Btu heating value.

A portion of our fee-based processing revenue includes a share of the margins on the NGLs produced.

For a keep-whole arrangement we replace the Btu content of the retained NGLs with natural gas purchases, also known as shrink replacement gas.

For a percent-of-liquids arrangement, we deliver an agreed-upon percentage of the extracted NGLs and retain the remainder.

Retained NGLs are referred to as our equity NGL production.

Per-unit NGL margins are calculated based on sales of our own equity volumes at the processing plants.

For the year ended December 31, 2020, approximately 20 percent of our NGL production volumes were under noncash commodity-based contracts.

Our gathering, processing, and treating businesses do not have direct exposure to crude oil prices.

Our on-shore natural gas gathering and processing businesses are substantially focused on gas-directed drilling basins rather than crude oil, with a broad diversity of basins and customers served.

Declines in crude oil drilling would be expected to result in less associated natural gas production, which could drive more demand for natural gas produced from gas-directed basins we serve.

We believe counterparty credit concerns in our gathering and processing businesses are significantly mitigated by the physical nature of our services, where we gather at the wellhead and are therefore critical to a producer’s ability to move product to market.

Our crude oil transportation business is supported mostly by major oil producers with long-cycle perspectives.

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, a 50 percent equity-method investment in OPPL, a 50 percent equity-method investment in RMM, and a 20 percent equity-method investment in Targa Train 7.

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

Northwest Pipeline’s system includes 42 transmission compressor stations having a combined sea level-rated capacity of approximately 473,000 horsepower.

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Crude oil marketing activity is presented on a net basis within *Product costs* in the Consolidated Statement of Operations subsequent to the adoption of Accounting Standard Update 2014-09, Revenue from Contracts with Customers (Topic 606) as of January 1, 2018.

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).

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.

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

On August 31, 2018, Transco filed a general rate case with the FERC for an overall increase in rates.

In September 2018, with the exception of certain rates that reflected a rate decrease, the FERC accepted and suspended our general rate filing to be effective March 1, 2019, subject to refund and the outcome of a hearing.

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

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.

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__________

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| Volumes: | | | | | | | | |

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

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.

| Beaver Creek | | Pennsylvania | | 41 | | 0.1 | | 100% | | Appalachian |

We also have an NGL pipeline that transports product from our Oak Grove plant to Harrison County, Ohio.

| (1) | Includes volumes associated with Susquehanna Supply Hub, the Northeast JV, and Utica Supply Hub, all of which are consolidated. |

*Caiman II*

During the first quarter of 2017, we exchanged all of our 50 percent interest in the Delaware basin gas gathering system, previously reported within the West segment, for an increased interest in the Bradford Supply Hub natural gas gathering system that is part of the Appalachia Midstream Investments and $155 million in cash.

Following this exchange, we have an approximate average 66 percent interest in the Appalachia Midstream Investments.

We continue to account for this investment under the equity-method due to the significant participatory rights of our partners such that we do not exercise control.

(See Note 6 – Investing Activities of Notes to Consolidated Financial Statements.)

____________

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| Volumes: | | | | | | | | | |

*Brazos Permian II*

While it is not possible for us to predict the final outcome of the proceedings [removed: which] [added: that] are still pending, we do not anticipate a material effect on our consolidated financial position if we receive an unfavorable outcome in any one or more of such proceedings.

All [removed: Notices] [added: such notices] were subsequently referred to a common attorney at the Department of Justice (DOJ).

Global resolution would include both [added: payment of a civil penalty and an injunctive relief component.]

The additional information called for by this Item is provided in Note [added: 16 – Stockholders' Equity and Note] 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.

Our threshold for disclosing material environmental legal proceedings involving a governmental authority where potential monetary sanctions are involved is $1 million.

On June 13, 2013, an explosion and fire occurred at our formerly owned Geismar olefins plant and rendered the facility temporarily inoperable (Geismar Incident).

On October 21, 2013, the EPA, Region 6, issued an Inspection Report pursuant to the Clean Air Act’s Risk Management Program following its inspection of the facility on June 24 through June 28, 2013.

The report notes the EPA’s preliminary determinations about the facility’s documentation regarding process safety, process hazard analysis, as well as operating procedures, employee training, and other matters.

On June 16, 2014, we received a request for information related to the Geismar Incident from the EPA under Section 114 of the Clean Air Act to which we responded on August 13, 2014.

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 May 5, 2017, we entered into a Consent Order with the Georgia Department of Natural Resources, Environmental Protection Division (GADNR) pertaining to alleged violations of the Georgia Water Quality Control Act and associated rules arising from a permit issued by GADNR for construction of Transco’s Dalton expansion project.

Pursuant to the Consent Order, we paid a fine of $168,750 and agreed to a Corrective Action Plan.

payment of a civil penalty and an injunctive relief component.

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

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

| | [added: | |] For the fiscal year ended | [added: | |] December 31, [removed: 2019] [added: 2020] | [added: | |]

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

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

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

[removed: The Williams Companies, Inc.][added: THE WILLIAMS COMPANIES, INC.]

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

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

| One Williams Center | | | | [added: | | | | | | | |]

| Tulsa | [added: | |] Oklahoma | | [added: | | | |] 74172 | [added: | |]

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

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

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

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

| Large accelerated filer | [added: | |] ☑ | | [added: | | | |] Accelerated filer | [added: | |] ☐ | | [added: | | | |] Non-accelerated filer | [added: | |] ☐ | | [added: | | | |] Smaller reporting company | [added: | |] ☐ | | [added: | | | |] Emerging growth company | [added: | |] ☐ | [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: $32,986,794,536.][added: $23,078,419,375.]

The number of shares outstanding of the registrant’s common stock outstanding at February 19, [removed: 2020] [added: 2021] was [removed: 1,212,494,859.][added: 1,213,790,391.]

Portions of the Registrant’s Definitive Proxy Statement for the Registrant’s Annual Meeting of Stockholders to be held on April [removed: 28, 2020,] [added: 27, 2021,] are incorporated into Part III, as specifically set forth in Part III.

| | | [added: | | | |] Page | [added: | |]

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

| Item 1. | [removed: [Business](#sA61FE6A7DA46CB64E9D9682420C027B7)] | [removed: [4](#sA61FE6A7DA46CB64E9D9682420C027B7)] | [added: [Business](#i5a0a375c4d22485dacc55ceb1ffacaca_16) | | | [4](#i5a0a375c4d22485dacc55ceb1ffacaca_16) | | |]

| | [added: | |] [Service Assets, Customers, and [removed: Contracts](#s29C5DACFAC37B7A016BE6824229366AF)] [added: Contracts](#i5a0a375c4d22485dacc55ceb1ffacaca_25)] | [removed: [4](#s29C5DACFAC37B7A016BE6824229366AF)] | [added: | [5](#i5a0a375c4d22485dacc55ceb1ffacaca_25) | | |]

| | [added: | |] [Business [removed: Segments](#sEE8557F74B59662FB3AC68242167541B)] [added: Segments](#i5a0a375c4d22485dacc55ceb1ffacaca_28)] | [removed: [7](#sEE8557F74B59662FB3AC68242167541B)] | [added: | [7](#i5a0a375c4d22485dacc55ceb1ffacaca_28) | | |]

| | [added: | |] [Transmission & Gulf of [removed: Mexico](#sB5031480A89C76978C9A682421BAB484)] [added: Mexico](#i5a0a375c4d22485dacc55ceb1ffacaca_31)] | [removed: [7](#sB5031480A89C76978C9A682421BAB484)] | [added: | [8](#i5a0a375c4d22485dacc55ceb1ffacaca_31) | | |]

| | [added: | |] [Regulatory [removed: Matters](#s9CBB867AF9EF0B16AFF9682422E67993)] [added: Matters](#i5a0a375c4d22485dacc55ceb1ffacaca_46)] | [removed: [17](#s9CBB867AF9EF0B16AFF9682422E67993)] | [added: | [15](#i5a0a375c4d22485dacc55ceb1ffacaca_46) | | |]

| | [added: | |] [Environmental [removed: Matters](#s38EE56705790FBAFDBCE6824230782CB)] [added: Matters](#i5a0a375c4d22485dacc55ceb1ffacaca_49)] | [removed: [19](#s38EE56705790FBAFDBCE6824230782CB)] | [added: | [18](#i5a0a375c4d22485dacc55ceb1ffacaca_49) | | |]

| | [added: | |] [Website Access to Reports and Other [removed: Information](#sD9C0E98D0C69B91608D0682420F213EF)] [added: Information](#i5a0a375c4d22485dacc55ceb1ffacaca_58)] | [removed: [20](#sD9C0E98D0C69B91608D0682420F213EF)] | [added: | [21](#i5a0a375c4d22485dacc55ceb1ffacaca_58) | | |]

| Item 1A. | [added: | |] [Risk [removed: Factors](#s1242A2044F93ABA19D43682423AE7225)] [added: Factors](#i5a0a375c4d22485dacc55ceb1ffacaca_61)] | [removed: [21](#s1242A2044F93ABA19D43682423AE7225)] | [added: | [22](#i5a0a375c4d22485dacc55ceb1ffacaca_61) | | |]

| Item 1B. | [added: | |] [Unresolved Staff [removed: Comments](#s355212E81A2764BA7573682423E01F1A)] [added: Comments](#i5a0a375c4d22485dacc55ceb1ffacaca_64)] | [removed: [37](#s355212E81A2764BA7573682423E01F1A)] | [added: | [36](#i5a0a375c4d22485dacc55ceb1ffacaca_64) | | |]

| Item 2. | [removed: [Properties](#sC95AD49B718C58596CDE682424019FDA)] | [removed: [37](#sC95AD49B718C58596CDE682424019FDA)] | [added: [Properties](#i5a0a375c4d22485dacc55ceb1ffacaca_67) | | | [37](#i5a0a375c4d22485dacc55ceb1ffacaca_67) | | |]

| Item 3. | [added: | |] [Legal [removed: Proceedings](#s8FF215FC6872EEDBAC7168242440BBA3)] [added: Proceedings](#i5a0a375c4d22485dacc55ceb1ffacaca_70)] | [removed: [37](#s8FF215FC6872EEDBAC7168242440BBA3)] | [added: | [37](#i5a0a375c4d22485dacc55ceb1ffacaca_70) | | |]

| Item 4. | [added: | |] [Mine Safety [removed: Disclosures](#s0BFFD5D2A33420CB8DA668242455D52B)] [added: Disclosures](#i5a0a375c4d22485dacc55ceb1ffacaca_73)] | [removed: [38](#s0BFFD5D2A33420CB8DA668242455D52B)] | [added: | [37](#i5a0a375c4d22485dacc55ceb1ffacaca_73) | | |]

| | [added: | |] [Information About Our Executive [removed: Officers](#s7BBA9669CFB369D4D2F868242487EDAF)] [added: Officers](#i5a0a375c4d22485dacc55ceb1ffacaca_76)] | [removed: [39](#s7BBA9669CFB369D4D2F868242487EDAF)] | [added: | [38](#i5a0a375c4d22485dacc55ceb1ffacaca_76) | | |]

| [added: | | |] PART II | | | [added: | | |]

| Item 5. | [added: | |] [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s79B8B89E5FB56B97BE5E682406FE3F94)] [added: Securities](#i5a0a375c4d22485dacc55ceb1ffacaca_82)] | [removed: [41](#s79B8B89E5FB56B97BE5E682406FE3F94)] | [added: | [40](#i5a0a375c4d22485dacc55ceb1ffacaca_82) | | |]

| Item 7. | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sF49A069EB54FAA0D50A66824254F864F)] [added: Operations](#i5a0a375c4d22485dacc55ceb1ffacaca_88)] | [removed: [43](#sC1B7388D5DDA133E2BBB682425817BEE)] | [added: | [41](#i5a0a375c4d22485dacc55ceb1ffacaca_91) | | |]

| Item 7A. | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s402CFBBC8E2876385A1768240CE80C01)] [added: Risk](#i5a0a375c4d22485dacc55ceb1ffacaca_136)] | [removed: [71](#s402CFBBC8E2876385A1768240CE80C01)] | [added: | [65](#i5a0a375c4d22485dacc55ceb1ffacaca_136) | | |]

| Item 8. | [added: | |] [Financial Statements and Supplementary [removed: Data](#s36A2E0472F6722680BB6682428909C22)] [added: Data](#i5a0a375c4d22485dacc55ceb1ffacaca_139)] | [removed: [72](#s36A2E0472F6722680BB6682428909C22)] | [added: | [66](#i5a0a375c4d22485dacc55ceb1ffacaca_139) | | |]

| Item 9. | [added: | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#sC23529FAE283558D767168243427E744)] [added: Disclosure](#i5a0a375c4d22485dacc55ceb1ffacaca_319)] | [removed: [148](#sC23529FAE283558D767168243427E744)] | [added: | [138](#i5a0a375c4d22485dacc55ceb1ffacaca_319) | | |]

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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| | | | [General](#i5a0a375c4d22485dacc55ceb1ffacaca_19) | | | [4](#i5a0a375c4d22485dacc55ceb1ffacaca_19) | | |

| | | | [Northeast G&P](#i5a0a375c4d22485dacc55ceb1ffacaca_34) | | | [11](#i5a0a375c4d22485dacc55ceb1ffacaca_34) | | |

| | | | [West](#i5a0a375c4d22485dacc55ceb1ffacaca_37) | | | [13](#i5a0a375c4d22485dacc55ceb1ffacaca_37) | | |

| | | | [Other](#i5a0a375c4d22485dacc55ceb1ffacaca_40) | | | [15](#i5a0a375c4d22485dacc55ceb1ffacaca_40) | | |

| | | | [Competition](#i5a0a375c4d22485dacc55ceb1ffacaca_52) | | | [18](#i5a0a375c4d22485dacc55ceb1ffacaca_52) | | |

| | | | [Human Capital Resources](#i5a0a375c4d22485dacc55ceb1ffacaca_55) | | | [19](#i5a0a375c4d22485dacc55ceb1ffacaca_55) | | |

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*Caiman II:* Caiman Energy II, LLC, (renamed Blue Racer Midstream Holdings, LLC, effective February 2, 2021) a former equity-method investment which is a consolidated entity following our November 2020 acquisition of an additional ownership interest

*Blue Racer:* Blue Racer Midstream LLC

*Targa Train 7:* Targa Train 7 LLC

*EBITDA:* Earnings before interest, taxes, depreciation, and amortization

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

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

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

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

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

| | [Additional Business Segment Information](#s2726111082FDE6115B1C682422B41559) | [16](#s2726111082FDE6115B1C682422B41559) |

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

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

| Item 6. | [Selected Financial Data](#s7EE610A47A8463BC2C4F682424FB6D57) | [42](#s7EE610A47A8463BC2C4F682424FB6D57) |

Fahrenheit

*Brazos Permian II:* Brazos Permian II, LLC

*Caiman II:* Caiman Energy II, LLC

such as ethane, propane, and butane

*Geismar Incident:* An explosion and fire which occurred on June 13, 2013, at our formerly owned Geismar olefins plant and rendered the facility temporarily inoperable.

used as petrochemical feedstocks, heating fuels, and gasoline additives, among other applications

The name, title, age, period of service, and recent business experience of each of our executive officers as of February 24, [removed: 2020,] [added: 2021,] are listed below.

| Name and Position | | [added: | | | |] Age | | [added: | | | |] Business Experience in Past Five Years | | | [added: | | | | | |]

| Alan S. Armstrong | | [removed: 57] | | [added: | | 58 | | | | | |] 2011 to present | | [added: | | | |] Director, Chief Executive Officer, and President, The Williams Companies, Inc. | [added: | |]

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

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

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

| Walter J. Bennett | | [removed: 50] | | [added: | | 51 | | | | | |] 2020 to present | | [added: | | | |] Senior Vice President Gathering & Processing, The Williams Companies, Inc. | [added: | |]

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

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

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

| John D. Chandler | | [removed: 50] | | [added: | | 51 | | | | | |] 2017 to present | | [added: | | | |] Senior Vice President and Chief Financial Officer, The Williams Companies, Inc. | [added: | |]

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

| Debbie Cowan | | [removed: 42] | | [added: | | 43 | | | | | |] 2018 to present | | [added: | | | |] Senior Vice President [removed: –] [added: and] Chief Human Resources Officer, The Williams Companies, Inc. | [added: | |]

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

| Micheal G. Dunn | | [removed: 54] | | [added: | | 55 | | | | | |] 2017 to present | | [added: | | | |] Executive Vice President and Chief Operating Officer, The Williams Companies, Inc. | [added: | |]

| Executive Vice President and Chief Operating Officer | | | | [added: | | | | | | | |] 2017 to 2018 | | [added: | | | |] Director of the general partner, WPZ | [added: | |]

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

| Scott A. Hallam | | [removed: 43] | | [added: | | 44 | | | | | |] 2020 to present | | [added: | | | |] Senior Vice President Transmission & Gulf of Mexico, The Williams Companies, Inc. | [added: | |]

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

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

| | | | | [added: | | | | | | | |] 2015 to 2017 | | [added: | | | |] Vice President Northeast OA, The Williams Companies, Inc. | [added: | |]

| [removed: John E. Poarch] [added: Chad A. Teply] | | [removed: 54] | | [added: | | 49 | | | | | |] 2020 to present | | [added: | | | |] Senior Vice President [added: –] Project Execution, The Williams Companies, Inc. | [added: | |]

| [removed: Senior Vice President Project Execution] [added: T. Lane Wilson] | | | | [added: | | 54 | | | | | |] 2017 to [removed: 2019] [added: present] | | [added: | | | |] Senior Vice President [removed: – Engineering Services,] [added: and General Counsel,] The Williams Companies, Inc. | [added: | |]

| [added: Chad J. Zamarin] | | | | [added: | | 44 | | | | | |] 2017 [added: to present] | | [added: | | | | Senior] Vice President – [removed: Commercial - West,] [added: Corporate Strategic Development,] The Williams Companies, Inc. | [added: | |]

| John D. Porter | | [removed: 50] | | [added: | | 51 | | | | | |] 2020 to present | | [added: | | | |] Vice President, [removed: Controller, and] Chief Accounting Officer, [added: Controller and Financial Planning & Analysis,] The Williams Companies, Inc. | [added: | |]

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

| | | | | [added: | | | | | | | |] 2013 to 2017 | | [added: | | | |] Director of Investor Relations & Enterprise Planning | [added: | |]

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

| [removed: Chad J. Zamarin] [added: Senior Vice President – Corporate Strategic Development] | | [removed: 43] | | [added: | | | | | | | |] 2017 to [removed: present] [added: 2018] | | [removed: Senior Vice President – Corporate Strategic Development, The Williams Companies, Inc.] | [added: | | | Director of the general partner, WPZ | | |]

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

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| Name and Position | | | | | | Age | | | | | | Business Experience in Past Five Years | | | | | | | | |

| Senior Vice President – Project Execution | | | | | | | | | | | | 2017 to 2020 | | | | | | Senior Vice President – Business Policy and Development, PacifiCorp | | |

| | | | | | | | | | | | | 2009 to 2017 | | | | | | Vice President – Resource Development and Construction, PacifiCorp | | |

| | | | | | | |

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

| | | | | 2009 to 2014 | | Senior Vice President and Chief Financial Officer, Magellan GP, LLC |

| | | | | 2010 to 2015 | | President and Chief Executive Officer, PacifiCorp Energy |

| | | | | 2013 to 2015 | | General Manager – Utica, ACMP |

| | | | | 2015 to 2017 | | Vice President – Commercial & Business Development, The Williams Companies, Inc. |

| | | | | 2011 to 2015 | | General Manager – Eagle Ford, ACMP |

| T. Lane Wilson | | 53 | | 2017 to present | | Senior Vice President and General Counsel, The Williams Companies, Inc. |

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

Our common stock is listed on the New York Stock Exchange under the symbol “WMB.” At the close of business on February 19, [removed: 2020,] [added: 2021,] we had [removed: 6,512] [added: 6,353] holders of record of our common stock.

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 Index, the Bloomberg Americas Pipelines Index, and the Arca Natural Gas Index for the period of five fiscal years commencing January 1, [removed: 2015.][added: 2016.]

The Bloomberg Americas Pipelines Index is composed of Enbridge Inc., [removed: Kinder Morgan, Inc.,] TC Energy Corporation, [added: Kinder Morgan, Inc.,] ONEOK, Inc., [added: Cheniere Energy, Inc.,] Pembina Pipeline Corporation, [removed: Cheniere Energy,] [added: New Fortress Energy] Inc., [removed: Targa Resources Corp.,] Inter Pipeline Ltd., [added: Hess Midstream LP,] and Williams.

[removed: |  |][added: ]

| | [removed: 2014] | | 2015 | | [added: | | | |] 2016 | | [added: | | | |] 2017 | | [added: | | | |] 2018 | | [added: | | | |] 2019 | [added: | | | | | 2020 | | |]

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

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

| The Williams Companies, Inc. | | | 100.0 | | | | | | 131.4 | | | | | | 134.1 | | | | | | 102.0 | | | | | | 116.6 | | | | | | 107.7 | | |

| S&P 500 Index | | | 100.0 | | | | | | 112.0 | | | | | | 136.4 | | | | | | 130.4 | | | | | | 171.4 | | | | | | 203.0 | | |

| Bloomberg Americas Pipelines Index | | | 100.0 | | | | | | 146.8 | | | | | | 146.4 | | | | | | 125.6 | | | | | | 169.8 | | | | | | 134.4 | | |

| Arca Natural Gas Index | | | 100.0 | | | | | | 146.6 | | | | | | 125.1 | | | | | | 85.4 | | | | | | 84.4 | | | | | | 73.0 | | |

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| 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 |

We have audited the accompanying consolidated balance sheet of The Williams Companies, Inc. (the Company) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] 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: 2019,] [added: 2020,] 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 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: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] in conformity with U.S. generally accepted accounting principles.

In the consolidated financial statements, the Company’s investment in Gulfstream was [removed: $217] [added: $204] million and [removed: $225] [added: $217] million as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively, and the Company’s equity earnings in the net income of Gulfstream were [removed: $74] [added: $77] million in [removed: 2019, $75] [added: 2020, $74] million in [removed: 2018] [added: 2019] and $75 million in [removed: 2017.][added: 2018.]

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: 2019,] [added: 2020,] 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 24, [removed: 2020] [added: 2021] expressed an unqualified opinion thereon.

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

| Critical Audit Matters | | | | | [added: | | | | | | | | | |]

| The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and [removed: that:] [added: that] (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, [removed: subjective,] [added: subjective] or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. | | | | | [added: | | | | | | | | | |]

| [added: UEOM] | | | [removed: UEOM Acquisition] [added: —] | | [added: | | | | 13 | | | | | | 70 | | |]

| *How We Addressed the Matter in Our Audit* | | | [added: | | | | | |] We [added: obtained an understanding, evaluated the design, and] tested the [removed: Company's] [added: operating effectiveness of] controls over [removed: its accounting for] the [removed: acquisition,] [added: Company’s equity-method impairment review process,] including controls over the [removed: estimation process supporting the recognition and measurement] [added: determination] of [added: fair value. For] the [removed: acquired assets. We also tested controls over management’s review] [added: equity-method investments with evidence] of [removed: the significant assumptions used] [added: loss] in [removed: the valuation models. To test the estimated fair value of the acquired assets,] [added: value,] we performed audit procedures that included, among others, [removed: evaluating the Company's selection of] [added: assessing] the [removed: valuation methodologies,] [added: methodologies used by management to determine fair value,] evaluating the significant [removed: assumptions used in the valuation,] [added: assumptions,] and testing the [removed: completeness and accuracy of the] underlying data [removed: supporting] [added: used by] the [removed: significant assumptions and estimates.] [added: Company in its analyses.] For example, we compared the [removed: significant assumptions used to estimate future] [added: estimated] cash flows [added: used within the assessments] to [removed: historical] [added: current] operating [removed: results,] [added: results and future expected economic trends, and] obtained third-party support, where available, to evaluate [removed: operating data, performed a sensitivity analysis to evaluate the assumptions that were most] significant [removed: to the fair value estimate, and] [added: assumptions. We also] recalculated management’s estimate. We involved our valuation specialists to assist with our evaluation of the methodologies used by the Company and significant assumptions included in the fair value estimates. | | [added: | | | |]

| | | | [added: | | | | | |] Pension and Other Postretirement Benefit Obligations | | [added: | | | |]

| *Description of the Matter* | | | [added: | | | | | |] At December 31, [removed: 2019,] [added: 2020,] the Company’s aggregate pension and other postretirement benefit obligations were [removed: $1,452] [added: $1,403] million and were exceeded by the fair value of pension and other postretirement plan assets of [removed: $1,546] [added: $1,635] million, resulting in overfunded pension and other postretirement benefit obligations of [removed: $94] [added: $232] million. As explained in Note 10 to the consolidated financial statements, the Company utilized key assumptions to determine the pension and other postretirement benefit obligations. Auditing the pension and other postretirement benefit obligations is complex and required the involvement of specialists due to the [removed: highly] judgmental nature of the actuarial assumptions (e.g., discount [removed: rates, future compensation levels, mortality rates, expected returns on plan assets)] [added: rates and cash balance interest crediting rate)] used in the measurement process. These assumptions have a significant effect on the projected benefit obligations. | | [added: | | | |]

| *How We Addressed the Matter in Our Audit* | | | [added: | | | | | |] We [added: obtained an understanding, evaluated the design, and] tested [removed: controls that address] the [removed: risks] [added: operating effectiveness] of [removed: material misstatement] [added: controls] relating to the measurement and valuation of the pension and other postretirement benefit [removed: obligations. For example, we tested] [added: obligations, including] controls over management’s review of the pension and [added: other] postretirement [removed: benefit] obligations, the significant actuarial [removed: assumptions] [added: assumptions,] and the data [removed: inputs provided to the actuary.] [added: inputs.] To test the pension and other postretirement benefit obligations, our audit procedures included, among others, evaluating the methodologies used, the significant actuarial assumptions discussed [removed: above] [added: above,] and the underlying data used by the Company. We compared the actuarial assumptions used by management to historical trends and evaluated the changes in the funded status from prior year. In addition, we involved our actuarial specialists to assist with our procedures. For example, we evaluated management’s methodology for determining the discount rates that reflect the maturity and duration of the benefit payments and are used to measure the pension and other postretirement benefit obligations. As part of this assessment, we [added: independently developed a range of yield curves, we] compared the projected cash flows to prior [removed: year] [added: year,] and compared the current year benefits paid to the prior year projected cash flows. To [removed: evaluate the future compensation levels and the mortality rates, we assessed whether the information is consistent with publicly available information, and whether any market data adjusted for entity-specific adjustments were applied. Additionally, to evaluate] [added: test] the [removed: expected returns on plan assets,] [added: cash balance interest crediting rate,] we [removed: assessed whether management’s assumptions were consistent with] [added: independently calculated] a range of [removed: returns for portfolios of comparative investments.] [added: rates and compared them to the rate used by management.] We also tested the completeness and accuracy of the underlying data, including the participant data. | | [added: | | | |]

[removed: February 24, 2020][added: | 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

We have audited the [removed: balance sheets] [added: statements] of [added: financial position of] Gulfstream Natural Gas System, L.L.C. (the “Company”) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the related statements of [removed: operations,] [added: earnings,] comprehensive income, [removed: cash flows, and] [added: changes in] members’ equity [added: and cash flows] for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] including the related notes (collectively referred to as the “financial 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: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2019] [added: 2020] in conformity with accounting principles generally accepted in the United States of America.

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

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

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

| Revenues: | | | | | | | | | | | | | [added: | | | | | | | |]

| Service revenues | | [added: | | | |] $ | [removed: 5,933] [added: 5,924] | | | [added: | |] $ | [removed: 5,502] [added: 5,933] | | | [added: | |] $ | [removed: 5,312] [added: 5,502] | |

| Service revenues – commodity consideration [removed: (Note 1)] | | [removed: 203] | | | | [removed: 400] [added: 129] | | | | [removed: —] | | [added: 203] | [added: | | | | | 400 | | |]

| Product sales | | [removed: 2,065] | | | | [removed: 2,784] [added: 1,666] | | | | [removed: 2,719] | | [added: 2,065] | [added: | | | | | 2,784 | | |]

| Total revenues | | [removed: 8,201] | | | | [removed: 8,686] [added: 7,719] | | | | [removed: 8,031] | | [added: 8,201] | [added: | | | | | 8,686 | | |]

| Costs and expenses: | | | | | | | | | | | | | [added: | | | | | | | |]

| Product costs | | [removed: 1,961] | | | | [removed: 2,707] [added: 1,545] | | | | [removed: 2,300] | | [added: 1,961] | [added: | | | | | 2,707 | | |]

| Processing commodity expenses | | [removed: 105] | | | | [removed: 137] [added: 68] | | | | [removed: —] | | [added: 105] | [added: | | | | | 137 | | |]

| Operating and maintenance expenses | | [removed: 1,468] | | | | [removed: 1,507] [added: 1,326] | | | | [removed: 1,576] | | [added: 1,468] | [added: | | | | | 1,507 | | |]

| Depreciation and amortization expenses | | [removed: 1,714] | | | | [removed: 1,725] [added: 1,721] | | | | [removed: 1,736] | | [added: 1,714] | [added: | | | | | 1,725 | | |]

| Selling, general, and administrative expenses | | [removed: 558] | | | | [removed: 569] [added: 466] | | | | [removed: 594] | | [added: 558] | [added: | | | | | 569 | | |]

| Impairment of certain assets (Note 18) | | [removed: 464] | | | | [removed: 1,915] [added: 182] | | | | [removed: 1,248] | | [added: 464] | [added: | | | | | 1,915 | | |]

| Gain on sale of certain assets and businesses (Note 3) | | [removed: 2] | | | | [removed: (692] [added: —] | | [removed: )] | | [removed: (1,095] | | [removed: )] [added: 2] | [added: | | | | | (692) | | |]

| Other (income) expense – net | | [removed: 8] | | | | [removed: 67] [added: 22] | | | | [removed: 71] | | [added: 8] | [added: | | | | | 50 | | |]

| Total costs and expenses | | [removed: 6,280] | | | | [removed: 7,918] [added: 5,517] | | | | [removed: 7,104] | | [added: 6,280] | [added: | | | | | 7,918 | | |]

| Operating income (loss) | | [removed: 1,921] | | | | [removed: 768] [added: 2,202] | | | | [removed: 927] | | [added: 1,921] | [added: | | | | | 768 | | |]

| Equity [removed: earnings (losses)] [added: (earnings) losses] | | [removed: 375] | | | | [removed: 396] [added: (328)] | | | | [removed: 434] | | [added: (375)] | [added: | | | | | (396) | | |]

| Other investing income (loss) [removed: –] [added: *–*] net | | [removed: (79] | [added: $] | [removed: )] [added: 8] | | [removed: 187] | | | [added: $] | [removed: 282] [added: 107] | | | [added: | | $ | 219 | |]

| Interest incurred | | [removed: (1,218] | | [removed: )] | | [removed: (1,160] [added: (1,192)] | | [removed: )] | | [removed: (1,116] | | [removed: )] [added: (1,218)] | [added: | | | | | (1,160) | | |]

| Interest capitalized | | [removed: 32] | | | | [removed: 48] [added: 20] | | | | [removed: 33] | | [added: 32] | [added: | | | | | 48 | | |]

| Other income (expense) – net | | [removed: 33] | | | | [removed: 92] [added: (43)] | | | | [removed: (25] | | [removed: )] [added: 33] | [added: | | | | | 92 | | |]

| Income (loss) from continuing operations before income taxes | | [removed: 1,064] | | | | [removed: 331] [added: 277] | | | | [removed: 535] | | [added: 1,064] | [added: | | | | | 331 | | |]

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| | | | | | | | | | Impairment Review of Equity-Method Investments | | | | | |

| *Description of the Matter* | | | | | | | | | As discussed in Note 7 to the consolidated financial statements, the Company has investments in nonconsolidated entities accounted for using the equity-method, totaling $5,159 million as of December 31, 2020, and recorded impairments of equity-method investments of $1,046 million during 2020. The carrying value of each equity-method investment is evaluated for impairment when events or changes in circumstances indicate that the carrying value of the investment may have experienced an other-than-temporary decline in value. When there are indicators of impairment, the fair value of the equity-method investment is estimated. Fair value is estimated using various methods, including income and market approaches. When the estimated fair value is lower than the carrying value, the Company determines whether the impairment is other-than-temporary. Auditing the Company’s impairment assessments was complex and judgmental due to the estimation required in the determination of fair value of the investments for which evidence of loss in value has occurred. | | | | | |

February 24, 2021

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to those charged with governance and that (i) relate to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

We determined there are no critical audit matters.

February 24, 2021

| Impairment of goodwill (Note 18) | | | | | | 187 | | | | | | — | | | | | | — | | |

| Less: Provision (benefit) for income taxes | | | | | | 79 | | | | | | 335 | | | | | | 138 | | |

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| Trade accounts and other receivables | | | | | | 1,000 | | | | | | 1,002 | | |

| Allowance for doubtful accounts | | | | | | (1) | | | | | | (6) | | |

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| Net income (loss) | | | — | | | | | | — | | | | | | — | | | | | | 211 | | | | | | — | | | | | | — | | | | | | 211 | | | | | | (13) | | | | | | 198 | | |

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| Net increase (decrease) in equity | | | — | | | | | | 1 | | | | | | 48 | | | | | | (1,746) | | | | | | 103 | | | | | | — | | | | | | (1,594) | | | | | | (187) | | | | | | (1,781) | | |

| Balance at December 31, 2020 | | | $ | 35 | | | | | $ | 1,248 | | | | | $ | 24,371 | | | | | $ | (12,748) | | | | | $ | (96) | | | | | $ | (1,041) | | | | | $ | 11,769 | | | | | $ | 2,814 | | | | | $ | 14,583 | |

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As discussed in Note 1 to the consolidated financial statements, the Company changed its method for accounting for revenue in 2018.

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| *Description of the Matter* | | | During 2019, the Company completed an acquisition of the remaining 38 percent interest in Utica East Ohio Midstream LLC (UEOM) for consideration of $741 million, as disclosed in Note 3 to the consolidated financial statements. The acquisition was accounted for as a business combination. Auditing the Company's accounting for its acquisition of UEOM was complex due to the estimation required in the Company’s determination of the fair value of the assets acquired and required the involvement of specialists due to the highly judgmental nature of certain assumptions. Estimation uncertainty was present due to the assets’ fair values being sensitive to changes in the underlying significant assumptions. The significant assumptions included the weighted average cost of capital and forecasted volume growth. | |

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| Regulatory charges resulting from Tax Reform (Note 1) | | — | | | | (17 | | ) | | 674 | | |

| Foreign currency translation activities: | | | | | | | | | | | | |

| Foreign currency translation adjustments | | — | | | | — | | | | 1 | | |

| Balance – December 31, 2016 | $ | — | | | $ | 785 | | | $ | 14,887 | | | $ | (9,649 | ) | | $ | (339 | ) | | $ | (1,041 | ) | | $ | 4,643 | | | $ | 9,403 | | | $ | 14,046 | |

| Adoption of new accounting standard | — | | | | — | | | | 1 | | | | 36 | | | | — | | | | — | | | | 37 | | | | — | | | | 37 | | |

| Net income (loss) | — | | | | — | | | | — | | | | 2,174 | | | | — | | | | — | | | | 2,174 | | | | 335 | | | | 2,509 | | |

| Net increase (decrease) in equity | — | | | | 76 | | | | 3,621 | | | | 1,215 | | | | 101 | | | | — | | | | 5,013 | | | | (2,884 | | ) | | 2,129 | | |

| Adoption of new accounting standards | — | | | | — | | | | — | | | | (23 | | ) | | (61 | | ) | | — | | | | (84 | | ) | | (37 | | ) | | (121 | | ) |

| Sales of limited partner units of Williams Partners L.P. | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 46 | | | | 46 | | |

| Changes in ownership of consolidated subsidiaries, net (Note 3) | — | | | | — | | | | (426 | | ) | | — | | | | — | | | | — | | | | (426 | | ) | | 567 | | | | 141 | | |

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| Regulatory charges resulting from Tax Reform (Note 1) | | — | | | | (15 | | ) | | 776 | | |

| Proceeds from (payments of) commercial paper – net | | (4 | | ) | | (2 | | ) | | (93 | | ) |

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*Financial Repositioning*

In January 2017, we entered into agreements with WPZ, wherein we permanently waived the general partner’s incentive distribution rights and converted our 2 percent general partner interest in WPZ to a noneconomic interest in exchange for 289 million newly issued WPZ common units.

Pursuant to this agreement, we also purchased approximately 277 thousand WPZ common units for $10 million.

Additionally, we purchased approximately 59 million common units of WPZ at a price of $36.08586 per unit in a private placement transaction, funded with proceeds from our equity offering (see Note 16 – Stockholders’ Equity).

According to the terms of this agreement, concurrent with WPZ’s quarterly distributions in February 2017 and May 2017, we paid additional consideration totaling $56 million to WPZ for these units.

Northeast G&P includes a 65 percent interest in Ohio Valley Midstream LLC (Northeast JV) (a consolidated VIE) which operates in West Virginia, Ohio, and Pennsylvania.

The Northeast JV includes our Ohio Valley assets and Utica East Ohio Midstream LLC (UEOM), a former equity-method investment in which we acquired the remaining ownership interest in March 2019 (see Note 3 – Acquisitions and Divestitures).

West also included our former natural gas gathering and 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), our former 50 percent interest in Jackalope Gas Gathering Services, L.L.C. (Jackalope) (an equity-method investment following deconsolidation as of June 30, 2018), which was sold in April 2019, and our previously owned 50 percent equity-method investment in the Delaware basin gas gathering system (DBJV) (see Note 6 – Investing Activities).

Other includes 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 (Geismar Interest), which was sold in July 2017 (see Note 3 – Acquisitions and Divestitures), and a refinery grade propylene splitter in the Gulf region, which was sold in June 2017.

| • | Asset retirement obligations (AROs); |

Their rates, which are established by the FERC, are designed to recover the costs of providing the regulated services, and their competitive environment makes it probable that such rates can be charged and collected.

Therefore, we have determined that it is appropriate under Accounting Standards Codification (ASC) Topic 980, “Regulated Operations,” (ASC 980) to account for and report regulatory assets and liabilities related to these operations consistent with the economic effect of the way in which their rates are established.

In December 2017, the Tax Cuts and Jobs Act (Tax Reform) was enacted, which, among other things, reduced the federal corporate income tax rate from 35 percent to 21 percent (see Note 8 – Provision (Benefit) for Income Taxes).

In accordance with ASC 980-740-25-2, Transco and Northwest Pipeline have recognized regulatory liabilities to reflect the probable return to customers through future rates of the future decrease in income taxes payable associated with Tax Reform.

These liabilities represent an obligation to return amounts directly to our customers.

While a majority of our customers have entered into tariff rates based on our cost-of-service proceedings and related rate base therein, certain other contracts with customers reflect contractually-based rates that are designed to recover the cost of providing those services, including an allowance for income taxes, with no expected future rate adjustment for the term of those contracts.

There have been no changes during the fourth quarter of [removed: 2019] [added: 2020] that have materially affected, or are reasonably likely to materially affect, our Internal Control over Financial Reporting.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in *Internal Control — Integrated Framework* (2013).

Based on our assessment, we concluded that, as of December 31, [removed: 2019,] [added: 2020,] our internal control over financial reporting was effective.

We have audited The Williams Companies, Inc.’s internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, The Williams Companies, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, [removed: 2019 and 2018,] [added: 2020] and [added: 2019,] 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: 2019,] [added: 2020,] and the related notes and the financial statement schedule listed in the index at Item 15(a) and our report dated February 24, [removed: 2020,] [added: 2021,] expressed an unqualified opinion thereon.

February 24, 2021

February 24, 2020

The information regarding our directors and nominees for director required by Item 401 of Regulation S-K will be presented under the heading “Election of Directors” in our definitive proxy statement prepared for the solicitation of proxies in connection with our Annual Meeting of Stockholders to be held April [removed: 28, 2020,] [added: 27, 2021,] which shall be filed no later than March [removed: 19, 2020] [added: 18, 2021] (Proxy Statement), which information is incorporated by reference herein.

Information regarding our executive officers required by Item [removed: 401(b)] [added: 401] of Regulation S-K is presented at the end of Part I herein and captioned “Information About Our Executive Officers,” as permitted by General Instruction G(3) [removed: to] and [added: the] Instruction [removed: 3] to Item [removed: 401(b)] [added: 401] of Regulation S-K.

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| Covered by report of independent auditors: | | [added: | | | |]

| [Consolidated statement of operations for each year in the three-year period ended December 31, [removed: 2019](#s6189F79B48B414CE08DA6823E9C66003)] [added: 2020](#i5a0a375c4d22485dacc55ceb1ffacaca_142)] | [removed: [76](#s6189F79B48B414CE08DA6823E9C66003)] | [added: | [70](#i5a0a375c4d22485dacc55ceb1ffacaca_142) | | |]

| [Consolidated statement of comprehensive income (loss) for each year in the three-year period ended December 31, [removed: 2019](#sAC92E3E7418558D6C2036823EA0EFE22)] [added: 2020](#i5a0a375c4d22485dacc55ceb1ffacaca_145)] | [removed: [77](#sAC92E3E7418558D6C2036823EA0EFE22)] | [added: | [71](#i5a0a375c4d22485dacc55ceb1ffacaca_145) | | |]

| [Consolidated balance sheet at December 31, [removed: 2019] [added: 2020] and [removed: 2018](#s128C9771D1DAED8B7EFE6823EA42DF5D)] [added: 2019](#i5a0a375c4d22485dacc55ceb1ffacaca_151)] | [removed: [78](#s128C9771D1DAED8B7EFE6823EA42DF5D)] | [added: | [72](#i5a0a375c4d22485dacc55ceb1ffacaca_151) | | |]

| [Consolidated statement of changes in equity for each year in the three-year period ended December 31, [removed: 2019](#s441C87383C4FAFB5C6B56823EA74F97A)] [added: 2020](#i5a0a375c4d22485dacc55ceb1ffacaca_157)] | [removed: [79](#s441C87383C4FAFB5C6B56823EA74F97A)] | [added: | [73](#i5a0a375c4d22485dacc55ceb1ffacaca_157) | | |]