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Item 9A. Controls and Procedures

2023-02-27 compared with 2022-02-28 · 40 added, 68 removed, 329 unchanged (25% of the section changed)

1 unchanged sentence

Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures (as defined in Rules 13a - 15(e) and 15d - 15(e) of the Securities Exchange Act of 1934, as amended) (Disclosure Controls) or our internal control over financial reporting (Internal Controls) will prevent all errors and all fraud.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures (as defined in Rules 13a - 15(e) and 15d - 15(e) of the Exchange Act) (Disclosure Controls) or our internal control over financial reporting (Internal Controls) will prevent all errors and all fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

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Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

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Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these Disclosure Controls are effective at a reasonable assurance level.

As disclosed in Note 3 – Acquisitions of Notes to Consolidated Financial Statements, we acquired Sequent on July 1, 2021, and its total revenues constituted approximately (0.8) percent of total revenues as shown on our consolidated financial statements for the year ended December 31, 2021 (Sequent’s total revenues, excluding net gain (loss) on commodity derivatives, constituted approximately (0.4) percent of total revenues, excluding net gain (loss) on commodity derivatives during that period).

Sequent’s total assets constituted approximately 3.3 percent of total assets as shown on our consolidated financial statements as of December 31, 2021.

We excluded Sequent’s disclosure controls and procedures that are subsumed by its internal control over financial reporting from the scope of management’s assessment of the effectiveness of our disclosure controls and procedures.

This exclusion is in accordance with the guidance issued by the Staff of the Securities and Exchange Commission that an assessment of recent business combinations may be omitted from management’s assessment of internal control over financial reporting for one year following the acquisition.

Changes in Internal Control Over Financial Reporting

Other than as set forth above, there have been no changes during the fourth quarter of 2021 that have materially affected, or are reasonably likely to materially affect, our Internal Control over Financial Reporting.

There have been no changes during the fourth quarter of 2022 that have materially affected, or are reasonably likely to materially affect, our Internal Control over Financial Reporting.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a - 15(f) and 15d - 15(f) under the Securities Exchange Act of 1934).

Our internal control over financial reporting is designed to provide reasonable assurance to our management and board of directors

regarding the preparation and fair presentation of financial statements in accordance with accounting principles generally accepted in the United States.

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a - 15(f) and 15d - 15(f) under the Exchange Act).

Our internal control over financial reporting is designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of financial statements in accordance with accounting principles generally accepted in the United States.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

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Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

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, 2021, 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, which excluded Sequent’s internal control over financial reporting as previously discussed, we concluded that, as of December 31, 2021, our internal control over financial reporting was effective.

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 at December 31, 2022, 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, at December 31, 2022, our internal control over financial reporting was effective.

Ernst & Young LLP, our independent registered public accounting firm, has audited our internal control over financial reporting, as stated in their report which is included in this Annual Report on Form 10-K.

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

As indicated in the accompanying Management’s Annual Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Sequent Energy Management, L.P.

and Sequent Energy Canada, Corp., which are included in the 2021 consolidated financial statements of the Company and collectively constituted $1,592 million and $11 million of total and net assets, respectively, as of December 31, 2021 and $(86) million and $(131) million of revenues and net income, respectively, for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Sequent Energy Management, L.P.

and Sequent Energy Canada, Corp.

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, 2022 and 2021, the related consolidated statements of income, comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and the financial statement schedule listed in the index at Item 15(a) and our report dated February 27, 2023 expressed an unqualified opinion thereon.

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(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable

assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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Information required by paragraphs (c)(3), (d)(4) and (d)(5) of Item 407 of Regulation S-K will be included under the heading “Questions and Answers About the Annual Meeting and Voting” and “Corporate Governance and Board Matters” in our Proxy Statement, which information is incorporated by reference herein.

Our Code of Business Conduct, together with our Corporate Governance Guidelines, the charters for each of our board committees, and our Code of Business Conduct applicable to all employees, including our Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer, or persons performing similar functions, are available on our Internet website at www.williams.com.

Our Corporate Governance Guidelines, the charters for each of our board committees, and our Code of Business Conduct applicable to all employees, including our Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer, or persons performing similar functions, are available on our Internet website at www.williams.com.

We will provide, free of charge, a copy of our Code of Business Conduct or any of our other corporate documents listed above upon written request to our Corporate Secretary at Williams, One Williams Center, Suite 4700, Tulsa, Oklahoma 74172.

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Executive Compensation

The information required by Item 402 and paragraphs (e)(4) and (e)(5) of Item 407 of Regulation S-K regarding executive compensation will be presented under the headings “Compensation Discussion and Analysis,” “Executive Compensation and Other Information,” “Director Compensation,” “Compensation and Management Development Committee Report on Executive Compensation,” and “Compensation and Management Development Committee Interlocks and Insider Participation” in our Proxy Statement, which information is incorporated by reference herein.

Notwithstanding the foregoing, the information provided under the heading “Compensation and Management Development Committee Report on Executive Compensation” in our Proxy Statement is furnished and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

The information required by Item 402 and paragraphs (e)(4) and (e)(5) of Item 407 of Regulation S-K regarding executive compensation will be presented under the headings “Compensation Discussion and Analysis,” “Executive Compensation Tables and Other Information,” “Director Compensation,” “Compensation and Management Development Committee Report on Executive Compensation,” and “Compensation and Management Development Committee Interlocks and Insider Participation” in our Proxy Statement, which information is incorporated by reference herein.

Notwithstanding the foregoing, the information provided under the heading “Compensation and Management Development Committee Report on Executive Compensation” in our Proxy Statement is furnished and shall not be deemed to be filed for purposes of Section 18 of the Exchange Act, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 403 of Regulation S-K will be presented under the headings “Equity Compensation Stock Plans” and “Security Ownership of Certain Beneficial Owners and Management” in our Proxy Statement, which information is incorporated by reference herein.

The information regarding securities authorized for issuance under equity compensation plans required by Item 201(d) of Regulation S-K and the security ownership of certain beneficial owners and management required by Item 403 of Regulation S-K will be presented under the headings “Equity Compensation Stock Plans” and “Security

Ownership of Certain Beneficial Owners and Management” in our Proxy Statement, which information is incorporated by reference herein.

Certain Relationships and Related Transactions, and Director Independence

31 unchanged sentences

001-04174) and incorporated herein by reference).

3.4 — By-laws of The Williams Co mpanies, Inc., as last amended effective July 28, 2021 (filed on August 2, 2021 as Exhibit 3.4 to The Williams Companies Inc.’s quarterly report on Form 10 - Q (File No.

3.4 — By-laws of The Williams Companies, Inc., as last amended effective October 25, 2022 (filed on October 31, 2022, as Exhibit 3.4 to The Williams Companies Inc.’s quarterly report on Form 10-Q (File No.

001-04174) and incorporated herein by reference).

36 unchanged sentences

001-04174) and incorporated herein by reference).

4.10 — First Supplemental Indenture, dated December 18, 2012, between The Williams Companies, Inc.

and The Bank of New York Mellon Trust Company, N.A.

as trustee (filed on December 20, 2012, as Exhibit 4.2 to The Williams Companies, Inc.’s current report on Form 8-K (File No.

001-04174) and incorporated herein by reference).

4.10 — Second Supplemental Indenture, dated as of June 24, 2014, between The Williams Companies, Inc.

10 unchanged sentences

001-04174) and incorporated herein by reference) .

4.14 — Sixth Supplemental Indenture, dated as of August 8, 2022, between The Williams Companies, Inc.

and The Bank of New York Mellon Trust Company, N.A., as trustee (filed on August 8, 2022, as Exhibit 4.1) to The Williams Companies, Inc.’s current report on Form 8-K (File No.

001-04174) and incorporated herein by reference).

4.15 — Indenture, dated as of February 9, 2010, between Williams Partners L.P.

13 unchanged sentences

001-32599) and incorporated herein by reference).

4.19 — Third Supplemental Indenture (including Form of 3.35% Senior Notes due 2022), dated as of August 14, 2012, between Williams Partners L.P.

and The Bank of New York Mellon Trust Company, N.A., as trustee (filed on August 14, 2012 as Exhibit 4.1 to Williams Partners L.P.’s current report on Form 8-K (File No.

001-32599) and incorporated herein by reference).

4.19 — Fourth Supplemental Indenture, dated as of November 15, 2013, between Williams Partners L.P.

68 unchanged sentences

001-04174) and incorporated herein by reference).

10.12§ — Form of 2018 Time-Based Restricted Stock Unit Agreement among Williams and certain employees and officers (filed on May 3, 2018, as Exhibit 10.3 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

001-04174) and incorporated herein by reference).

10.13§ — Form of 2018 Performance-Based Restricted Stock Unit Agreement among Williams and certain employees and officers (filed on May 3, 2018, as Exhibit 10.4 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

001-04174) and incorporated herein by reference).

10.12§ — Form of 2018 Nonqualified Stock Option Agreement among Williams and certain employees and officers (filed on May 3, 2018, as Exhibit 10.5 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

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10.14§ — Form of Amended 2019 Executive Performance-Based Restricted Stock Unit Agreement between The Williams Companies, Inc.

and certain employees and officers (filed on November 1, 2021 , as Exhibit 10.

4 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

and certain employees and officers (filed on November 1, 2021, as Exhibit 10.4 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

001-04174) and incorporated herein by reference).

2 unchanged sentences

10.16§ — Form of Amended 2019 Performance-Based Restricted Stock Unit Agreement between The Williams Companies, Inc.

and certain employees and officers (filed on November 1, 2021, as Exhibit 10.

3 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

and certain employees and officers (filed on November 1, 2021, as Exhibit 10.3 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

001-04174) and incorporated herein by reference).

2 unchanged sentences

10.18§ — Form of Amended 2019 Time-Based Restricted Stock Unit Agreement between The Williams Companies, Inc.

and certain employees and officers (filed on November 1, 2021, as Exhibit 10.

2 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

and certain employees and officers (filed on November 1, 2021, as Exhibit 10.2 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

001-04174) and incorporated herein by reference).

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10.21§ — Form of Amended 2020 Performance-Based Restricted Stock Unit Agreement between The Williams Companies, Inc.

and certain employees and officers (filed on November 1, 2021, as Exhibit 10.

6 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

and certain employees and officers (filed on November 1, 2021, as Exhibit 10.6 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

001-04174) and incorporated herein by reference).

3 unchanged sentences

10.23§ — Form of Amended 2020 Time-Based Restricted Stock Unit Agreement between The Williams Companies, Inc.

and certain employees and officers (filed on November 1, 2021, as Exhibit 10.

5 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

and certain employees and officers (filed on November 1, 2021, as Exhibit 10.5 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

001-04174) and incorporated herein by reference).

3 unchanged sentences

10.25§ — Form of Amended 2021 Time-Based Restricted Stock Unit Agreement between The Williams Companies, Inc.

and certain employees and officers (filed on November 1, 2021, as Exhibit 10.

7 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

and certain employees and officers (filed on November 1, 2021, as Exhibit 10.7 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

001-04174) and incorporated herein by reference).

10.26§ — Form of 2021 Performance-Based Restricted Stock Unit Agreement between The Williams Companies, Inc.

and certain employees and officers (filed on May 3 , 2021, as Exhibit 10.

1 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

and certain employees and officers (filed on May 3, 2021, as Exhibit 10.1 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

001-04174) and incorporated herein by reference).

10.27§ — Form of Amended 2021 Performance-Based Restricted Stock Unit Agreement between The Williams Companies, Inc.

and certain employees and officers (filed on November 1, 2021, as Exhibit 10.

8 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

and certain employees and officers (filed on November 1, 2021, as Exhibit 10.8 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

001-04174) and incorporated herein by reference).

10.28§ — Form of 2021 Time-Based Restricted Stock Unit Agreement among The Williams Companies, Inc.

and certain employees and officers (filed on February 24 , 2021, as Exhibit 10.

28 to The Williams Companies, Inc.’s Form 10- K (File No.

and certain employees and officers (filed on February 24, 2021, as Exhibit 10.28 to The Williams Companies, Inc.’s Form 10-K (File No.

001-04174) and incorporated herein by reference).

10.29§ — Form of Time-Based Restricted Stock Unit Agreement among The Williams Companies, Inc.

and certain employees and officers.

and certain employees and officers (filed on February 28, 2022, as Exhibit 10.31 to The Williams Com panies, Inc.

’ s Form 10-K (File No.001-04174) and incorporated herein by reference).

10.30§ — Form of Time-Based Restricted Stock Unit Agreement among The Williams Companies, Inc.

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10.31§ — Form of Performance-Based Restricted Stock Unit Agreement among The Williams Companies, Inc.

and certain employees and officers.

and certain employees and officers (filed on February 28, 2022, as Exhibit 10.33 to The Williams Companies, Inc.

’ s Form 10-K (File No.001-04 1 74) and incorporated herein by reference.

10.32§ — Change in Control and Restrictive Covenant Agreement between certain executive officers (Tier One Executives) and The Williams Companies, Inc.

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10.34§ — The Williams Companies, Inc.

Executive Severance Pay Plan, dated November 14, 2012 (filed July 20, 2016, as Exhibit 10.2 to The Williams Companies, Inc.’s current report on Form 8-K (File No.

001-04174) and incorporated herein by reference).

10.37§ — First Amendment to The Williams Companies, Inc.

Executive Severance Pay Plan (filed July 20, 2016, as Exhibit 10.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No.

Executive Severance Pay Plan, as amended and restated, effective August 1, 2022 (filed October 31, 2022, as Exhibit 10.1 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

001-04174) and incorporated herein by reference).

10.35§ — The Williams Companies, Inc.

2007 Incentive Plan as amended and restated effective October 26 , 20 21 (filed on Nov ember 1, 2021 , as Exhibit 10.

9 to The Williams Companies, Inc.’s qua rterly report on Form 10- Q (File No.

2007 Incentive Plan as amended and restated effective October 26, 2021 (filed on November 1, 2021, as Exhibit 10.9 to The Williams Companies, Inc.’s quarterly report on Form 10-Q (File No.

001-04174) and incorporated herein by reference).

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BERGSTROM Chairman of the Board February 27, 2023

BUESE Director February 28, 2022

/s/ STEPHEN I.

CHAZEN Director February 28, 2022

/s/ CHARLES I.

COGUT Director February 28, 2022

/s/ MICHAEL A.

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Director February 27, 2023

RAGAUSS Director February 28, 2022

/s/ CARRI LOCKHART

Director February 27, 2023

Carri Lockhart

/s/ RICHARD E.

MUNCRIEF Director February 27, 2023

Director February 27, 2023

ROBESON Director February 27, 2023

Signature Title Date

SHEFFIELD Director February 27, 2023

Signature Title Date

/s/ MURRAY D.

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SPENCE Director February 27, 2023

TYSON Director February 27, 2023

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures