What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-25 compared with 2024-02-21 · 1791 added, 996 removed, 1061 unchanged (72% of the section changed)

1 unchanged sentence

Report of Independent Registered Public Accounting Firm

Consolidated Statements of Income for the Years Ended December 31, 2024, 2023, and 2022

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2024, 2023, and 2022

Consolidated Balance Sheets at December 31, 2024 and 2023

Consolidated Statements of Changes in Equity for the Years Ended December 31, 2024, 2023, and 2022

Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023, and 202 2

Report of Independent Registered Public Accounting Firm

Statements of Net Income for the Years Ended December 31, 2024, 2023, and 2022

Balance Sheets at December 31, 2024 and 2023

Statements of Changes in Member’s Equity for the Years Ended December 31, 2024, 2023, and 2022

Statements of Cash Flows for the Years Ended December 31, 2024, 2023, and 2022

Report of Independent Registered Public Accounting Firm

Statements of Net Income for the Years Ended December 31, 2024, 2023, and 2022

Balance Sheets at December 31, 2024 and 2023

Statements of Changes in Member’s Equity for the Years Ended December 31, 2024, 2023, and 2022

Statements of Cash Flows for the Years Ended December 31, 2024, 2023, and 2022

Combined Notes to Financial Statements

Schedule II — Valuation and Qualifying Accounts

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of

18 unchanged sentences

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter 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 matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Pension Benefit Obligation

Description of the Matter At December 31, 2023, the Company’s aggregate pension benefit obligation was $1,006 million and was exceeded by the fair value of pension plan assets of $1,167 million, resulting in an overfunded pension benefit obligation of $161 million.

As explained in Note 7 to the consolidated financial statements, the Company utilized key assumptions to determine the pension benefit obligation.

Auditing the pension benefit obligation is complex and required the involvement of specialists due to the judgmental nature of the actuarial assumptions (e.g., discount rates and cash balance interest crediting rate) used in the measurement process.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments.

Pension Benefits Obligation

Description of the Matter At December 31, 2024, the Company’s aggregate pension benefits obligation was $937 million and was exceeded by the fair value of pension plan assets of $1,183 million, resulting in an overfunded pension benefits obligation of $246 million.

As explained in Note 7 to the consolidated financial statements, the Company utilized key assumptions to determine the pension benefits obligation.

Auditing the pension benefits obligation is complex and required the involvement of specialists due to the nature of the actuarial assumptions (e.g., discount rates and cash balance interest crediting rate) used in the measurement process.

These assumptions have a significant effect on the projected benefit obligation.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls relating to the measurement and valuation of the pension benefit obligation, including controls over management’s review of the pension benefit obligation, the significant actuarial assumptions and the data inputs.

To test the pension benefit obligation, our audit procedures included, among others, evaluating the methodologies used, the significant actuarial assumptions discussed above, and the underlying data used by the Company.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls relating to the measurement and valuation of the pension benefits obligation, including controls over management’s review of the pension benefits obligation, the significant actuarial assumptions and the data inputs.

To test the pension benefits obligation, our audit procedures included, among others, evaluating the methodologies used, the significant actuarial assumptions discussed 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 benefit obligation.

As part of this assessment, we independently developed a range of yield curves, we compared the projected cash flows to prior year, and compared the current year benefits paid to the prior year projected cash flows.

14 unchanged sentences

Net gain (loss) from commodity derivatives ( 250 ) 956 ( 387 )

956 ( 387 ) ( 148 )

Total revenues

10,503 10,907 10,965

Costs and expenses:

7 unchanged sentences

Total costs and expenses

7,164 6,596 7,947

Operating income (loss) 3,339 4,311 3,018

2 unchanged sentences

Interest expense ( 1,364 ) ( 1,236 ) ( 1,147 )

( 1,236 ) ( 1,147 ) ( 1,179 )

Net gain from Energy Transfer litigation judgment (Note 1)

2 unchanged sentences

Provision (benefit) for income taxes

640 1,005 425

Income (loss) from continuing operations 2,346 3,400 2,117

14 unchanged sentences

Income (loss) from continuing operations

$ 1.82 $ 2.69 $ 1.68

Income (loss) from discontinued operations

Net income (loss) available to common stockholders

$ 1.82 $ 2.61 $ 1.68

Weighted-average shares (thousands)

1,219,184 1,217,784 1,218,362

Diluted earnings (loss) per common share:

Income (loss) from continuing operations

$ 1.82 $ 2.68 $ 1.67

Income (loss) from discontinued operations

Net income (loss) available to common stockholders

$ 1.82 $ 2.60 $ 1.67

Weighted-average shares (thousands)

See accompanying notes.

1,222,954 1,222,715 1,222,672

See the Combined Notes to Financial Statements.

The Williams Companies, Inc.

6 unchanged sentences

Net unrealized gain (loss) from derivative instruments, net of taxes of $( 2 ), $( 8 ), and $ 1 in 2024, 2023, and 2022, respectively

26 ( 3 ) ( 40 )

Reclassifications into earnings of net derivative instruments (gain) loss, net of taxes of $ 1 , $ 1 and $ — in 2024, 2023, and 2022, respectively

( 2 ) ( 2 ) —

Pension and other postretirement benefits:

6 unchanged sentences

$ 2,301 $ 3,204 $ 2,058

See accompanying notes.

See the Combined Notes to Financial Statements.

The Williams Companies, Inc.

17 unchanged sentences

Derivative liabilities 164 105

Accrued and other current liabilities 1,284 1,270

Other current liabilities

Commercial paper 455 725

8 unchanged sentences

30 million shares authorized at December 31, 2024 and December 31, 2023;

35,000 shares issued at December 31, 2023 and December 31, 2022)

35 thousand shares issued at December 31, 2024 and December 31, 2023)

Common stock ($ 1 par value;

4 unchanged sentences

Accumulated other comprehensive income (loss) 76 —

Treasury stock, at cost ( 39 million shares at December 31, 2023 and 35 million shares at December 31, 2022 of common stock)

Treasury stock, at cost ( 39 million shares at December 31, 2024 and December 31, 2023 of common stock)

( 1,180 ) ( 1,180 )

3 unchanged sentences

Total liabilities and equity $ 54,532 $ 52,627

See accompanying notes.

See the Combined Notes to Financial Statements.

The Williams Companies, Inc.

13 unchanged sentences

— — — ( 2,071 ) — — ( 2,071 ) — ( 2,071 )

Dividends and distributions to noncontrolling interests — — — — — — — ( 187 ) ( 187 )

Stock-based compensation and related common stock issuances, net of tax — 3 93 — — — 96 — 96

Dividends and distributions to noncontrolling interests — — — — — — — ( 204 ) ( 204 )

Contributions from noncontrolling interests — — — — — — — 18 18

Purchases of treasury stock — — — — — ( 9 ) ( 9 ) — ( 9 )

Other — — — ( 12 ) — — ( 12 ) — ( 12 )

5 unchanged sentences

— — — ( 2,179 ) — — ( 2,179 ) — ( 2,179 )

Dividends and distributions to noncontrolling interests — — — — — — — ( 204 ) ( 204 )

Stock-based compensation and related common stock issuances, net of tax — 3 35 — — — 38 — 38

Dividends and distributions to noncontrolling interests — — — — — — — ( 213 ) ( 213 )

Contributions from noncontrolling interests — — — — — — — 18 18

Purchases of treasury stock — — — — — ( 130 ) ( 130 ) — ( 130 )

— — — — — ( 9 ) ( 9 ) — ( 9 )

Other — — 1 ( 16 ) ( 1 ) — ( 16 ) — ( 16 )

5 unchanged sentences

— — — ( 2,316 ) — — ( 2,316 ) — ( 2,316 )

Dividends and distributions to noncontrolling interests — — — — — — — ( 213 ) ( 213 )

Stock-based compensation and related common stock issuances, net of tax — 2 65 — — — 67 — 67

Dividends and distributions to noncontrolling interests — — — — — — — ( 242 ) ( 242 )

Contributions from noncontrolling interests — — — — — — — 36 36

Purchases of treasury stock

— — — — — ( 130 ) ( 130 ) — ( 130 )

Other — — — ( 18 ) — — ( 18 ) — ( 18 )

2 unchanged sentences

* Accumulated Other Comprehensive Income (Loss)

See accompanying notes .

See the Combined Notes to Financial Statements.

The Williams Companies, Inc.

11 unchanged sentences

Gain on sale of business (Note 3) — ( 129 ) —

Gain on disposition of equity-method investments (Note 8) ( 149 ) — —

Gain on remeasurement of equity-method investments (Note 3) ( 127 ) ( 30 ) —

Inventory write-downs 10 30 161

5 unchanged sentences

Accounts payable 139 ( 1,009 ) 410

Accrued and other current liabilities ( 19 ) 209 58

Other current liabilities 35 ( 19 ) 209

Changes in current and noncurrent commodity derivative assets and liabilities ( 286 ) 200 94

5 unchanged sentences

Payments of long-term debt ( 2,946 ) ( 634 ) ( 2,876 )

Payments for debt issuance costs ( 32 ) ( 23 ) ( 17 )

Proceeds from issuance of common stock 10 6 54

3 unchanged sentences

Contributions from noncontrolling interests 36 18 18

Payments for debt issuance costs ( 23 ) ( 17 ) ( 26 )

Other – net ( 36 ) ( 21 ) ( 37 )

6 unchanged sentences

Purchases of businesses, net of cash acquired (Note 3) ( 2,244 ) ( 1,568 ) ( 933 )

Proceeds from dispositions of equity-method investments (Note 8) 161 — —

Purchases of and contributions to equity-method investments (Note 8) ( 114 ) ( 141 ) ( 166 )

7 unchanged sentences

Capital expenditures $ ( 2,573 ) $ ( 2,516 ) $ ( 2,253 )

See accompanying notes .

The Williams Companies, Inc.

Notes to Consolidated Financial Statements

See the Combined Notes to Financial Statements.

Report of Independent Registered Public Accounting Firm

To the Management Committee and Member of Transcontinental Gas Pipe Line Company, LLC

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Transcontinental Gas Pipe Line Company, LLC (the Company) as of December 31, 2024 and 2023, the related statements of net income, changes in member’s equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account s or disclosure s to which it relates.

Description of the Matter

Regulatory Assets and Liabilities

As discussed in Note 1 to the financial statements, the Company is an interstate natural gas transmission company that is regulated by the Federal Energy Regulatory Commission (“FERC”) and applies accounting principles in Topic 980 for regulated operations.

As such, certain incurred costs that would otherwise be charged to expense are deferred as regulatory assets, based on the expected recovery from customers in future rates.

Likewise, certain actual or anticipated credits that would otherwise reduce expense are deferred as regulatory liabilities, based on the expected return to customers in future rates.

The Company records items as regulatory assets or liabilities if, based on regulatory orders or other available evidence, it is probable that the costs or obligations will be included in amounts allowable for recovery or refunded in future rates.

Auditing regulatory assets and liabilities is complex as it requires specialized knowledge of rate-regulated activities and judgments about matters that could affect the recording of regulatory assets and liabilities.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over the Company’s accounting for regulatory assets and liabilities, including, among others, controls over the evaluation of filings with regulatory bodies and their effects on existing regulatory assets and liabilities, including factors that may affect the timing or nature of recoverability.

We performed audit procedures that included, among others, reviewing evidence of correspondence with regulatory bodies to test that the Company evaluated information obtained from regulatory rulings.

For example, we assessed the recoverability, considering information obtained from regulatory orders, of regulatory assets.

In addition, we tested calculations of regulatory assets and liabilities, including that the amortization for certain regulatory assets and liabilities corresponded to relevant regulatory filings and/or orders.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1995.

Houston, Texas

February 25, 2025

Transcontinental Gas Pipe Line Company, LLC

Statement of Net Income

Year Ended December 31,

2024 2023 2022

Natural gas transportation service revenues $ 2,619 $ 2,506 $ 2,503

Natural gas storage service revenues 200 186 193

Natural gas product sales 118 137 179

Other service revenues 27 37 34

Total revenues 2,964 2,866 2,909

Costs and expenses:

Natural gas product costs 118 137 179

Operating and maintenance expenses 510 517 531

Selling, general, and administrative expenses 216 215 225

Depreciation and amortization expenses 545 519 513

Taxes, other than income taxes 111 105 98

Other (income) expense – net ( 35 ) ( 38 ) ( 7 )

Total costs and expenses 1,465 1,455 1,539

Operating income (loss) 1,499 1,411 1,370

Interest expense ( 324 ) ( 324 ) ( 327 )

Interest income 58 87 36

Allowance for equity and borrowed funds used during construction (AFUDC) 88 77 28

Other income (expense) – net ( 8 ) ( 4 ) ( 7 )

Net income (loss) $ 1,313 $ 1,247 $ 1,100

See the Combined Notes to Financial Statements.

Transcontinental Gas Pipe Line Company, LLC

Balance Sheet

Current assets:

Cash and cash equivalents $ — $ —

Trade accounts and other receivables:

Advances to affiliate 638 1,353

Trade 250 251

Affiliates 24 10

Inventories 81 83

Regulatory assets 74 87

Other current assets and deferred charges 24 14

Total current assets 1,103 1,809

Property, plant, and equipment – net 14,103 13,330

Regulatory assets 320 299

Deferred charges and other 405 350

Total assets $ 15,931 $ 15,788

LIABILITIES AND MEMBER’S EQUITY

Current liabilities:

Trade $ 258 $ 278

Affiliates 55 55

Regulatory liabilities 58 49

Other current liabilities 181 190

Asset retirement obligations 22 96

Long-term debt due within one year 35 32

Total current liabilities 609 700

Long-term debt 5,200 5,229

Regulatory liabilities 976 956

Asset retirement obligations 593 524

Deferred income and other 248 242

Contingent liabilities and commitments (Note 18)

Member’s equity:

Member’s capital 5,088 5,088

Retained earnings 3,217 3,049

Total member’s equity $ 8,305 $ 8,137

Total liabilities and member’s equity $ 15,931 $ 15,788

See the Combined Notes to Financial Statements.

Transcontinental Gas Pipe Line Company, LLC

Statement of Changes in Member’s Equity

Year Ended December 31,

2024 2023 2022

Member’s Capital:

Balance at beginning of year $ 5,088 $ 5,088 $ 4,960

Cash contributions from parent — — 128

Balance at end of year 5,088 5,088 5,088

Retained Earnings:

Balance at beginning of year 3,049 3,022 2,760

Net income 1,313 1,247 1,100

Cash distributions to parent ( 1,145 ) ( 1,220 ) ( 838 )

Balance at end of year 3,217 3,049 3,022

Total Member’s Equity $ 8,305 $ 8,137 $ 8,110

See the Combined Notes to Financial Statements.

Transcontinental Gas Pipe Line Company, LLC

Statement of Cash Flows

Year Ended December 31,

2024 2023 2022

OPERATING ACTIVITIES:

Net income (loss) $ 1,313 $ 1,247 $ 1,100

Adjustments to reconcile net cash provided (used) by operating activities:

Depreciation and amortization 545 519 513

Allowance for equity funds used during construction (equity AFUDC) ( 71 ) ( 63 ) ( 23 )

Cash provided (used) by changes in current assets and liabilities:

Affiliate receivables ( 14 ) ( 1 ) ( 1 )

Trade and other accounts receivable — 6 ( 20 )

Inventories 2 10 ( 39 )

Regulatory assets 13 37 ( 10 )

Other current assets and deferred charges ( 10 ) 27 ( 17 )

Trade accounts payable ( 4 ) ( 18 ) 21

Affiliate payables — 1 ( 15 )

Other current liabilities ( 63 ) 72 ( 31 )

Other, including changes in noncurrent assets and liabilities ( 15 ) ( 122 ) 38

Net cash provided (used) by operating activities 1,696 1,715 1,516

FINANCING ACTIVITIES:

Proceeds from other financing obligations 2 7 9

Payments on other financing obligations ( 32 ) ( 29 ) ( 26 )

Cash distributions to parent ( 1,145 ) ( 1,220 ) ( 838 )

Cash contributions from parent — — 128

Net cash provided (used) by financing activities ( 1,175 ) ( 1,242 ) ( 727 )

INVESTING ACTIVITIES:

Property, plant, and equipment:

Capital expenditures (1) ( 1,140 ) ( 894 ) ( 603 )

Contributions and advances for construction costs 16 21 1

Dispositions - net ( 110 ) ( 51 ) ( 33 )

Advances to affiliate - net 715 460 ( 143 )

Purchase of asset retirement obligations trust investments ( 23 ) ( 22 ) ( 21 )

Proceeds from sale of asset retirement obligations trust investments 21 13 10

Net cash provided (used) by investing activities ( 521 ) ( 473 ) ( 789 )

Increase (decrease) in cash and cash equivalents — — —

Cash and cash equivalents at beginning of year — — —

Cash and cash equivalents at end of year $ — $ — $ —

____________________________

(1) Increase to property, plant and equipment, exclusive of equity AFUDC $ ( 1,112 ) $ ( 991 ) $ ( 587 )

Changes in related accounts payable and accrued liabilities ( 28 ) 97 ( 16 )

Capital expenditures $ ( 1,140 ) $ ( 894 ) $ ( 603 )

See the Combined Notes to Financial Statements.

Report of Independent Registered Public Accounting Firm

To the Management Committee and Member of Northwest Pipeline LLC

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Northwest Pipeline LLC (the Company) as of December 31, 2024 and 2023, the related statements of net income, changes in member’s equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

Accordingly, we express no such opinion.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

Description of the Matter

Regulatory Assets and Liabilities

As such, certain incurred costs that would otherwise be charged to expense are deferred as regulatory assets, based on the expected recovery from customers in future rates.

Likewise, certain actual or anticipated credits that would otherwise reduce expense are deferred as regulatory liabilities, based on the expected return to customers in future rates.

We performed audit procedures that included, among others, reviewing evidence of correspondence with regulatory bodies to test that the Company evaluated information obtained from regulatory rulings.

For example, we assessed the recoverability, considering information obtained from regulatory orders, of regulatory assets.

In addition, we tested calculations of regulatory assets and liabilities, including that amortization for certain regulatory assets and liabilities corresponded to relevant regulatory filings and/or orders.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1986.

Houston, Texas

February 25, 2025

Northwest Pipeline LLC

Statement of Net Income

Year Ended December 31,

2024 2023 2022

Natural gas transportation service revenues $ 416 $ 415 $ 430

Natural gas storage service revenues 15 15 13

Other service revenues 13 10 5

Total revenues 444 440 448

Costs and expenses:

Operating and maintenance expenses 95 88 84

Selling, general, and administrative expenses 51 51 52

Depreciation and amortization expenses 111 111 114

Taxes, other than income taxes 14 12 17

Other (income) expense - net ( 18 ) ( 16 ) 22

Total costs and expenses 253 246 289

Operating income (loss) 191 194 159

Interest expense ( 28 ) ( 28 ) ( 31 )

Allowance for equity and borrowed funds used during construction (AFUDC) 10 4 3

Other income (expense) – net 7 10 6

Net income (loss) 180 180 137

See the Combined Notes to Financial Statements.

Northwest Pipeline LLC

Balance Sheet

Current Assets:

Cash and cash equivalents $ — $ —

Trade accounts and other receivables:

Advances to affiliate — 158

Affiliates — 1

Inventories 9 8

Regulatory assets 6 2

Other current assets and deferred charges 6 5

Total current assets 62 214

Property, plant, and equipment – net 2,129 1,949

Regulatory assets 49 36

Deferred charges and other 29 28

Total assets $ 2,269 $ 2,227

LIABILITIES AND MEMBER’S EQUITY

Current Liabilities:

Advances from affiliate $ 26 $ —

Affiliates 12 13

Regulatory liabilities 20 21

Other current liabilities 34 34

Long-term debt due within one year 85 —

Total current liabilities 225 116

Long-term debt 497 581

Regulatory liabilities 233 252

Asset retirement obligations 144 136

Deferred income and other 7 9

Contingent liabilities and commitments (Note 18)

Member’s Equity:

Member’s capital 1,074 1,074

Retained earnings 89 59

Total member’s equity $ 1,163 $ 1,133

Total liabilities and member’s equity $ 2,269 $ 2,227

See the Combined Notes to Financial Statements.

Northwest Pipeline LLC

Statement of Changes in Member’s Equity

Year Ended December 31,

2024 2023 2022

Member’s Capital:

Balance at beginning and end of year

$ 1,074 $ 1,074 $ 1,074

Retained Earnings:

Balance at beginning of year 59 34 35

Net income 180 180 137

Cash distributions to parent ( 150 ) ( 155 ) ( 138 )

Balance at end of year 89 59 34

Total Member’s Equity $ 1,163 $ 1,133 $ 1,108

See the Combined Notes to Financial Statements.

Northwest Pipeline LLC

Statement of Cash Flows

Year Ended December 31,

2024 2023 2022

OPERATING ACTIVITIES:

Net income (loss) $ 180 $ 180 $ 137

Adjustments to reconcile net cash provided (used) by operating activities:

Depreciation and amortization 111 111 114

Allowance for equity funds used during construction (equity AFUDC) ( 8 ) ( 3 ) ( 2 )

Cash provided (used) by changes in current assets and liabilities:

Affiliate receivables 1 — ( 1 )

Trade and other accounts receivable ( 1 ) — ( 1 )

Inventories ( 1 ) 1 —

Other current assets and deferred charges ( 2 ) 1 —

Trade accounts payable ( 3 ) 4 ( 1 )

Affiliate payables ( 1 ) 1 ( 1 )

Regulatory liabilities 1 ( 126 ) 145

Other current liabilities ( 3 ) 3 1

Other, including changes in noncurrent assets and liabilities:

Regulatory assets ( 15 ) ( 29 ) —

Regulatory liabilities ( 27 ) ( 20 ) ( 120 )

Other, net 7 6 ( 3 )

Net cash provided (used) by operating activities 239 129 268

FINANCING ACTIVITIES:

Cash distributions to parent ( 150 ) ( 155 ) ( 138 )

Advances from affiliate, net 26 — —

Net cash provided (used) by financing activities ( 124 ) ( 155 ) ( 138 )

INVESTING ACTIVITIES:

Property, plant, and equipment:

Capital expenditures (1) ( 266 ) ( 125 ) ( 107 )

Contributions and advances for construction costs 5 6 11

Dispositions - net ( 12 ) ( 8 ) ( 5 )

Advances to affiliate - net 158 153 ( 29 )

Net cash provided (used) by investing activities ( 115 ) 26 ( 130 )

Increase (decrease) in cash and cash equivalents — — —

Cash and cash equivalents at beginning of year — — —

Cash and cash equivalents at end of year $ — $ — $ —

____________________________________

(1) Increases to property, plant and equipment, exclusive of equity AFUDC $ ( 266 ) $ ( 140 ) $ ( 109 )

Changes in related accounts payable and accrued liabilities — 15 2

Capital expenditures $ ( 266 ) $ ( 125 ) $ ( 107 )

See the Combined Notes to Financial Statements.

Index of Combined Notes to Financial Statements

The Combined Notes to Financial Statements include information for multiple registrants, specifically The Williams Companies, Inc.

(Williams), as well as Transcontinental Gas Pipe Line Company, LLC (Transco) and Northwest Pipeline LLC (NWP), both of which are wholly owned subsidiaries of Williams (collectively, the Registrants).

The following list indicates the Registrants to which each of the combined notes apply.

Specific disclosures within each combined note may apply to all Registrants unless indicated otherwise.

Note 1 – General, Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies

Unless the context clearly indicates otherwise, references in this report to “Williams,” “we,” “our,” “us,” or like terms refer to The Williams Companies, Inc.

and its subsidiaries.

Unless the context clearly indicates otherwise, references to “Williams,” “we,” “our,” and “us” include the operations in which we own interests accounted for as equity-method investments that are not consolidated in our financial statements.

When we refer to our equity investees by name, we are referring exclusively to their businesses and operations.

Williams, Transco, NWP

Note 2 – Variable Interest Entities

Note 3 – Acquisitions and Divestitures

Note 4 – Related Party Transactions

Williams, Transco, NWP 138

Note 5 – Revenue Recognition

Williams, Transco, NWP 142

Note 6 – Provision (Benefit) for Income Taxes

Note 7 – Employee Benefit Plans

Note 8 – Investing Activities

Note 9 – Property, Plant, and Equipment

Williams, Transco, NWP 157

N ote 10 – R egulatory Assets and Lia bilities

Williams, Transco, NWP 159

Note 1 1 – Goodwill and Other Intangible Assets

Note 12 – Other Current Liabilities

Williams, Transco, NWP 166

Note 1 3 – Debt and Banking Arrangements

Williams, Transco, NWP 167

Note 1 4 – Leases

Williams, Transco, NWP 172

Note 1 5 – Equity-Based Compensation

Note 1 6 – Fair Value Measurements, Guarantees, and Concentration of Credit Risk

Williams, Transco, NWP 176

Note 1 7 – Commodity Derivatives

Note 1 8 – Contingencies and Commitments

Williams, Transco, NWP 182

Note 1 9 – Segment Disclosures

Williams, Transco, NWP 185

Note 20 – Subsequent Events

Note 1 – General, Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies

This report includes information for multiple registrants, specifically The Williams Companies, Inc.

(Williams), as well as Transcontinental Gas Pipe Line Company, LLC (Transco) and Northwest Pipeline LLC (NWP) both of which are wholly owned subsidiaries of Williams (collectively, the Registrants).

References to subsidiaries by name, including equity-method investees, Transco, and NWP, refer exclusively to those businesses and operations.

Description of Business

We are a Delaware corporation whose common stock is listed and traded on the New York Stock Exchange.

Our operations are located in the United States and are presented within the following reportable segments:

Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services, consistent with the manner in which our chief operating decision maker evaluates performance and allocates resources.

All remaining business activities, including our upstream operations and corporate activities, are included in Other.

Transmission & Gulf of Mexico is comprised of our interstate natural gas pipelines, Transcontinental Gas Pipe Line Company, LLC (Transco), Northwest Pipeline LLC (Northwest Pipeline), and MountainWest Pipelines Holding Company (MountainWest) (see Note 3 – Acquisitions and Divestitures), and their related natural gas storage facilities, 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 LLC (Gulfstar One) (a consolidated variable interest entity, or VIE), a 50 percent equity-method investment in Gulfstream Natural Gas System, L.L.C.

(Gulfstream), and a 60 percent equity-method investment in Discovery Producer Services LLC (Discovery).

Transmission & Gulf of Mexico also includes natural gas storage facilities and pipelines providing services in north Texas.

Northeast G&P is comprised of our midstream gathering, processing, and fractionation businesses in the Marcellus Shale region primarily in Pennsylvania and New York, and the Utica Shale region of eastern Ohio, as well as a 65 percent interest in Ohio Valley Midstream LLC (Northeast JV) (a consolidated VIE) which operates in West Virginia, Ohio, and Pennsylvania, a 66 percent interest in Cardinal Gas Services, L.L.C.

Williams is a Delaware corporation whose common stock is listed and traded on the New York Stock Exchange.

Its operations are located in the United States and are presented within the following reportable segments:

Notes (Continued)

Transmission & Gulf of America, Northeast G&P, West, and Gas & NGL Marketing Services, consistent with the manner in which Williams’ Chief Executive Officer, the chief operating decision maker, evaluates performance and allocates resources.

All remaining business activities, including upstream operations, certain new energy ventures, and corporate activities, are included in Other.

Transmission & Gulf of America is comprised of the Transco, NWP, and MountainWest Pipelines Holding Company (MountainWest) interstate natural gas pipelines and their related natural gas storage facilities, as well as the natural gas gathering and processing and crude oil production handling and transportation assets in the Gulf Coast region, including Discovery Producer Services LLC (Discovery), a former 60 percent equity-method investment in which Williams acquired the remaining ownership interest in August 2024 (see Note 3 – Acquisitions and Divestitures), a 51 percent interest in Gulfstar One LLC (Gulfstar One) (a consolidated variable interest entity, or VIE), and a 50 percent equity-method investment in Gulfstream Natural Gas System, L.L.C.

(Gulfstream).

Transmission & Gulf of America also includes natural gas storage facilities and pipelines providing services in north Texas, and also in Louisiana and Mississippi related to the January 2024 Gulf Coast Storage Acquisition (see Note 3 – Acquisitions and Divestitures).

Northeast G&P is comprised of Williams’ midstream gathering, processing, and fractionation businesses in the Marcellus Shale region primarily in Pennsylvania and New York, and the Utica Shale region of eastern Ohio, as well as a 65 percent interest in Ohio Valley Midstream LLC (Northeast JV) (a consolidated VIE) which operates in West Virginia, Ohio, and Pennsylvania, a 66 percent interest in Cardinal Gas Services, L.L.C.

(Cardinal) (a consolidated VIE) which operates in Ohio, a 69 percent equity-method investment in Laurel Mountain Midstream, LLC (Laurel Mountain), a 50 percent equity-method investment in Blue Racer Midstream LLC (Blue Racer), and Appalachia Midstream Services, LLC, 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 region (Appalachia Midstream Investments).

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 east Texas and northwest Louisiana, the Mid-Continent region which includes the Anadarko and Permian basins, and the Denver-Julesberg Basin (DJ Basin) of Colorado which includes Rocky Mountain Midstream Holdings LLC (RMM), a former 50 percent equity-method investment in which we acquired the remaining ownership interest in November 2023 (see Note 3 – Acquisitions and Divestitures ) .

This segment also includes our NGL storage facilities, an undivided 50 percent interest in an NGL fractionator near Conway, Kansas, a 50 percent equity-method investment in Overland Pass Pipeline Company LLC (OPPL), a 20 percent equity-method investment in Targa Train 7 LLC (Targa Train 7) (a nonconsolidated VIE), and a 15 percent equity-method investment in Brazos Permian II, LLC (Brazos Permian II) (a nonconsolidated VIE).

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Notes to Consolidated Financial Statements – (Continued)

Gas & NGL Marketing Services is comprised of our natural gas liquid (NGL) and natural gas marketing and trading operations, which includes risk management and transactions related to the storage and transportation of natural gas and NGLs on strategically positioned assets.

West is comprised of Williams’ 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 east Texas and northwest Louisiana, the Mid-Continent region which includes the Anadarko and Permian basins, and the Denver-Julesberg Basin (DJ Basin) of Colorado which includes Rocky Mountain Midstream Holdings LLC (RMM), a former 50 percent equity-method investment that Williams acquired the remaining ownership interest in November 2023 (see Note 3 – Acquisitions and Divestitures ) .

This segment also includes Williams’ natural gas liquid (NGL) storage facilities, an undivided 50 percent interest in an NGL fractionator near Conway, Kansas, and a 50 percent equity-method investment in Overland Pass Pipeline Company LLC (OPPL).

Gas & NGL Marketing Services is comprised of Williams’ NGL and natural gas marketing and trading operations, which includes risk management and transactions related to the storage and transportation of natural gas and NGLs on strategically positioned assets.

Transco is an interstate natural gas transmission company that owns and operates a natural gas pipeline system extending from Texas, Louisiana, Mississippi and the Gulf of America through Alabama, Georgia, South Carolina, North Carolina, Virginia, Maryland, Delaware, Pennsylvania, and New Jersey to the New York City metropolitan area.

The system serves customers in Texas and the 12 southeast and Atlantic seaboard states mentioned above, including major metropolitan areas in Georgia, Washington D.C., Maryland, North Carolina, New York, New Jersey, and Pennsylvania.

Transco is a single-member limited liability company, and as such, single-member losses are limited to the amount of its investment.

Notes (Continued)

NWP owns and operates an interstate pipeline system for the mainline transmission of natural gas.

This system extends 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.

NWP is a single-member limited liability company, and as such, single-member losses are limited to the amount of its investment.

Basis of Presentation

Discontinued Operations

Unless indicated otherwise, the information in the Notes to Consolidated Financial Statements relates to our continuing operations.

During 2023, Williams recorded pre-tax charges of $ 125 million to Income (loss) from discontinued operations in the Consolidated Statement of Income related to litigation associated with its former Alaska refinery.

Payments were made in January 2024 and the claims against Williams are now resolved.

Except for this item and unless indicated otherwise, the information in the Combined Notes to Financial Statements relates to continuing operations.

Net gain from Energy Transfer Litigation Judgment

In November 2023, Williams received a $ 627 million payment from Energy Transfer Equity, L.P.

(Energy Transfer) for the final order and judgment in connection to a lawsuit for breach of the Agreement and Plan of Merger with Energy Transfer.

On the same day, Williams paid attorney fees which had been incurred on a contingent fee basis.

This resulted in a net gain of $ 534 million reported as Net gain from Energy Transfer litigation judgment in the Consolidated Statement of Income for the year ended December 31, 2023.

Reclassifications

Certain prior-year amounts for Transco and NWP have been reclassified to conform to the current year’s presentation.

These reclassifications had no impact on Transco’s or NWP’s net income (loss), working capital, cash flows or total member’s equity previously reported.

Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of all entities that we control and our proportionate interest in the accounts of certain ventures in which we own an undivided interest.

Our judgment is required to evaluate whether we control an entity.

Williams’ consolidated financial statements include the accounts of all entities that Williams controls and its proportionate interest in the accounts of certain ventures in which it owns an undivided interest.

Management’s judgment is required to evaluate whether it controls an entity.

Key areas of that evaluation include:

• Determining whether an entity is a VIE (see Note 2 – Variable Interest Entities);

• Determining whether we are the primary beneficiary of a VIE, including evaluating which activities of the VIE most significantly impact its economic performance and the degree of power that we and our related parties have over those activities through our variable interests;

• Identifying events that require reconsideration of whether an entity is a VIE and continuously evaluating whether we are a VIE’s primary beneficiary;

• Evaluating whether other owners in entities that are not VIEs are able to effectively participate in significant decisions that would be expected to be made in the ordinary course of business such that we do not have the power to control such entities.

We apply the equity method of accounting to investments over which we exercise significant influence but do not control.

Distributions received from equity-method investees are presented in our Consolidated Statement of Cash Flows according to the nature of the distributions approach, which classifies distributions received from equity-method investees as either returns on investment (cash inflows from operating activities) or returns of investment (cash inflows from investing activities) based on the nature of the activities of the equity-method investee that generated the distribution.

• Determining whether Williams is the primary beneficiary of a VIE, including evaluating which activities of a VIE most significantly impact its economic performance and the degree of power that Williams and its related parties have over those activities through its variable interests;

• Identifying events that require reconsideration of whether an entity is a VIE and continuously evaluating whether Williams is a VIE’s primary beneficiary;

Williams applies the equity method of accounting to investments over which it exercises significant influence but does not control.

Distributions received from equity-method investees are presented in the Consolidated Statement of Cash Flows according to the nature of the distributions approach, which classifies distributions

Notes (Continued)

received from equity-method investees as either returns on investment (cash inflows from operating activities) or returns of investment (cash inflows from investing activities) based on the nature of the activities of the equity-method investee that generated the distribution.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying combined notes.

Actual results could differ from those estimates.

Significant estimates and assumptions include:

Significant estimates and assumptions may include:

• Impairment assessments of investments, property, plant, and equipment, and intangible assets;

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• Environmental remediation obligations;

• Depreciation and/or amortization of long-lived assets, which are comprised of property, plant, and equipment, and intangible assets;

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Notes to Consolidated Financial Statements – (Continued)

• Depreciation and amortization of long-lived assets, which are comprised of property, plant, and equipment, and intangible assets;

• Depreciation and/or amortization of equity-method investment basis differences;

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• Pension and postretirement valuation variables;

• Measurement of regulatory liabilities;

• Measurement of regulatory assets and liabilities;

• Measurement of deferred income tax assets and liabilities, including assumptions related to the realization of deferred income tax assets;

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• Purchase price accounting.

These estimates are discussed further throughout these notes.

These estimates are discussed further throughout these combined notes.

Regulatory Accounting

Transco, Northwest Pipeline, and MountainWest are regulated by the Federal Energy Regulatory Commission (FERC), and their rates are established by the FERC.

Therefore, we have determined that it is appropriate under Accounting Standards Codification (ASC) Topic 980, “Regulated Operations,” (ASC 980) that certain costs that would otherwise be charged to expense should be deferred as regulatory assets, based on the expected recovery from customers in future rates.

Transco, NWP, and MountainWest are regulated by the Federal Energy Regulatory Commission (FERC), and these regulated entities’ rates may also be negotiated with customers pursuant to the terms of tariffs and FERC policy.

Therefore, management has determined that it is appropriate under Accounting Standards Codification (ASC) Topic 980, “Regulated Operations,” (ASC 980) that certain costs that would otherwise be charged to expense should be deferred as regulatory assets, based on the expected recovery from customers in future rates.

Likewise, certain actual or anticipated credits that would otherwise reduce expense should be deferred as regulatory liabilities, based on the expected return to customers in future rates.

Management’s expected recovery of deferred costs and return of deferred credits generally results from specific decisions by regulators granting such ratemaking treatment.

We record certain incurred costs and obligations as regulatory assets or liabilities if, based on regulatory orders or other available evidence, it is probable that the costs or obligations will be included in amounts allowable for recovery or refunded in future rates.

Certain incurred costs and obligations are recorded as regulatory assets or liabilities if, based on regulatory orders or other available evidence, it is probable that the costs or obligations will be included in amounts allowable for recovery or refunded in future rates.

Accounting for these operations that are regulated can differ from the accounting requirements for nonregulated operations.

For example, for regulated operations, allowance for funds used during construction (AFUDC) represents the estimated cost of debt and equity funds applicable to utility plant in the process of construction and is capitalized as a cost of property, plant, and equipment because it constitutes an actual cost of construction under established regulatory practices;

Notes (Continued)

actual cost of construction under established regulatory practices;

nonregulated operations are only allowed to capitalize the cost of debt funds related to construction activities, while a component for equity is prohibited.

The components of our regulatory assets and liabilities include the effects of deferred taxes on equity funds used during construction, AROs, shipper imbalance activity, fuel and power cost differentials, depreciation, negative salvage, pension and other postretirement benefits, trackers, customer tax refunds, and rate allowances for deferred income taxes at a historically higher federal income tax rate.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Our current and noncurrent regulatory asset and liability balances at December 31, 2023 and 2022 are as follows:

Current assets reported within Other current assets and deferred charges

Noncurrent assets reported within Regulatory assets, deferred charges, and other

Total regulated assets

Current liabilities reported within Accrued and other current liabilities

Noncurrent liabilities reported within Regulatory liabilities, deferred income, and other

Total regulated liabilities

Management has determined that for its regulated entities, it is appropriate to apply the accounting prescribed by ASC 980 and, accordingly, the accompanying financial statements include the effects of the types of transactions described above that result from regulatory accounting requirements (see Note 10 – Regulatory Assets and Liabilities).

The FERC has prescribed a formula to be used in computing separate allowances for borrowed and equity AFUDC.

These allowances are recorded as follows:

Year Ended December 31,

2024 2023 2022

Allowance for borrowed funds used during construction $ 17 $ 14 $ 5

Allowance for equity funds used during construction

Allowance for equity and borrowed funds used during construction (AFUDC)

$ 88 $ 77 $ 28

Year Ended December 31,

2024 2023 2022

Allowance for borrowed funds used during construction $ 2 $ 1 $ 1

Allowance for equity funds used during construction

Allowance for equity and borrowed funds used during construction (AFUDC)

Revenue Recognition

Customers in our gas pipeline businesses are comprised of public utilities, municipalities, gas marketers and producers, intrastate pipelines, direct industrial users, and electrical power generators.

Customers in our midstream businesses are comprised of oil and natural gas producer counterparties.

Customers for our product sales are comprised of public utilities, gas marketers, and direct industrial users.

Service revenue contracts from our gas pipeline and midstream businesses contain a series of distinct services, with the majority of our contracts having a single performance obligation that is satisfied over time as the customer simultaneously receives and consumes the benefits provided by our performance.

Most of our product sales contracts have a single performance obligation with revenue recognized at a point in time when the products have been sold and delivered to the customer.

Certain customers reimburse us for costs we incur associated with construction of property, plant, and equipment utilized in our operations.

For our rate-regulated gas pipeline businesses that apply ASC 980, we follow FERC guidelines with respect to reimbursement of construction costs.

Customers in Williams’ gas pipeline businesses, including Transco and NWP, are comprised of public utilities, municipalities, gas marketers and producers, intrastate pipelines, direct industrial users, and electrical power generators.

Customers in Williams’ midstream businesses are comprised of oil and natural gas producer counterparties.

Customers for Williams’ product sales are comprised of public utilities, gas marketers, and direct industrial users.

Service revenue contracts from Williams’ gas pipeline and midstream businesses, including Transco and NWP, contain a series of distinct services, with the majority of the contracts having a single performance obligation that is satisfied over time as the customer simultaneously receives and consumes the benefits provided.

Most of the product sales contracts have a single performance obligation with revenue recognized at a point in time when the products have been sold and delivered to the customer.

Certain customers reimburse Williams for costs it incurs associated with construction of property, plant, and equipment utilized in its operations.

For Williams’ rate-regulated gas pipeline businesses, including Transco and NWP, that apply ASC 980, Williams follows FERC guidelines with respect to reimbursement of construction costs.

FERC tariffs only allow for cost reimbursement and are non-negotiable in nature;

thus, in our judgment, the construction activities do not represent an ongoing major and central operation of our gas pipeline businesses and are not within the scope of ASC Topic 606, “Revenue from Contracts with Customers”.

thus, in management’s judgment, the construction activities do not represent an ongoing major and central operation of the gas pipeline businesses and are not within the scope of ASC Topic 606, “Revenue from Contracts with Customers”.

Accordingly, cost reimbursements are treated as a reduction to the cost of the constructed asset.

For our midstream businesses, reimbursement and service contracts with customers are viewed together as providing the same commercial objective, as we have the ability to negotiate the mix of consideration between reimbursements and amounts billed over time.

Accordingly, we generally recognize reimbursements of construction costs from customers on a gross basis as a contract liability separate from the associated costs included within property, plant, and equipment.

For the midstream businesses, reimbursement and service contracts with customers are viewed together as providing the same commercial objective, as Williams has the ability to negotiate the mix of consideration between reimbursements and amounts

Notes (Continued)

billed over time.

Accordingly, Williams generally recognizes reimbursements of construction costs from customers on a gross basis as a contract liability separate from the associated costs included within property, plant, and equipment.

The contract liability is recognized into service revenues as the underlying performance obligations are satisfied.

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Gas pipeline businesses

Revenues from our regulated interstate natural gas pipeline businesses, which are subject to regulation by certain state and federal authorities, including the FERC, include both firm and interruptible transportation and storage contracts.

Firm transportation and storage agreements provide for a daily or monthly reservation charge based on the pipeline or storage capacity reserved, and a commodity charge based on the volume of natural gas delivered/stored, each at rates specified in our FERC tariffs or based on negotiated contractual rates, with contract terms that are generally long-term in nature.

Most of our long-term contracts contain an evergreen provision, which allows the contracts to be extended for periods primarily up to one year in length an indefinite number of times following the specified contract term and until terminated generally by either us or the customer.

Interruptible transportation and storage agreements provide for a volumetric charge based on actual commodity transportation or storage utilized in the period in which those

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Notes to Consolidated Financial Statements – (Continued)

services are provided, and the contracts are generally limited to one-month periods or less.

Our performance obligations related to our interstate natural gas pipeline businesses include the following:

Revenues from the regulated interstate natural gas pipeline businesses, including Transco and NWP, which are subject to regulation by certain state and federal authorities, including the FERC, include both firm and interruptible transportation and storage contracts.

Firm transportation and storage agreements provide for a daily or monthly reservation charge based on the pipeline or storage capacity reserved, and a commodity charge based on the volume of natural gas delivered/stored, each at rates specified in the FERC tariffs or based on negotiated contractual rates, with contract terms that are generally long-term in nature.

Most of the long-term contracts contain an evergreen provision, which allows the contracts to be extended for periods primarily up to one year in length an indefinite number of times following the specified contract term and until terminated generally by either party.

Interruptible transportation and storage agreements provide for a volumetric charge based on actual commodity transportation or storage utilized in the period in which those services are provided, and the contracts are generally limited to one-month periods or less.

The related performance obligations include the following:

• Firm transportation or storage under firm transportation and storage contracts—an integrated package of services typically constituting a single performance obligation, which includes standing ready to provide such services and receiving, transporting or storing (as applicable), and redelivering commodities;

• Interruptible transportation or storage under interruptible transportation and storage contracts—an integrated package of services typically constituting a single performance obligation once scheduled, which includes receiving, transporting or storing (as applicable), and redelivering commodities.

In situations where, in our judgment, we consider the integrated package of services as a single performance obligation, which represents a majority of our interstate natural gas pipeline contracts with customers, we do not consider there to be multiple performance obligations because the nature of the overall promise in the contract is to stand ready (with regard to firm transportation and storage contracts), receive, transport or store, and redeliver natural gas to the customer;

therefore, revenue is recognized over time upon satisfaction of our daily stand ready performance obligation.

We recognize revenues for reservation charges over the performance obligation period, which is the contract term, regardless of the volume of natural gas that is transported or stored.

Revenues for commodity charges from both firm and interruptible transportation services and storage services are recognized when natural gas is delivered at the agreed upon delivery point or when natural gas is injected or withdrawn from the storage facility because they specifically relate to our efforts to provide these distinct services.

Generally, reservation charges and commodity charges in our interstate natural gas pipeline businesses are recognized as revenue in the same period they are invoiced to our customers.

As a result of the ratemaking process, certain amounts collected by us may be subject to refund upon the issuance of final orders by the FERC in pending rate proceedings.

We use judgment to record estimates of rate refund liabilities considering our and other third-party regulatory proceedings, advice of counsel, and other risks.

In situations where, in management’s judgment, it considers the integrated package of services as a single performance obligation, which represents a majority of its interstate natural gas pipeline contracts with customers, management does not consider there to be multiple performance obligations because the nature of the overall promise in the contract is to stand ready (with regard to firm transportation and storage contracts), receive, transport or store, and redeliver natural gas to the customer;

therefore, revenue is recognized over time upon satisfaction of the daily stand ready performance obligation.

Revenues are recognized for reservation charges over the performance obligation period, which is the contract term, regardless of the volume of natural gas that is transported or stored.

Generally, reservation charges and commodity charges in the interstate natural gas pipeline businesses are recognized as revenue in the same period they are invoiced to its customers.

As a result of the ratemaking process, certain amounts collected may be subject to refund upon the issuance of final orders by the FERC in pending rate proceedings.

Management uses judgment to record estimates of rate refund liabilities considering its and other third-party regulatory proceedings, advice of counsel, and other risks.

As of December 31, 2024 and 2023, there were no such rate refund liabilities for Transco and NWP.

Notes (Continued)

Midstream businesses

Revenues from our nonregulated gathering, processing, transportation, and storage midstream businesses include contracts for natural gas gathering, processing, treating, compression, transportation, and other related services with contract terms that are generally long-term in nature and may extend up to the production life of the associated reservoir.

Additionally, our midstream businesses generate revenues from fees charged for storing customers’ natural gas and NGLs, generally under prepaid contracted storage capacity contracts.

In situations where, in our judgment, we provide an integrated package of services combined into a single performance obligation, which represents a majority of this class of contracts with customers, we do not consider there to be multiple performance obligations because the nature of the overall promise in the contract is to provide gathering, processing, transportation, storage, and related services resulting in the delivery, or redelivery in the context of storage services, of pipeline-quality natural gas and NGLs to the customer.

Revenues from the nonregulated gathering, processing, transportation, and storage midstream businesses include contracts for natural gas gathering, processing, treating, compression, transportation, and other related services with contract terms that are generally long-term in nature and may extend up to the production life of the associated reservoir.

Additionally, the midstream businesses generate revenues from fees charged for storing customers’ natural gas and NGLs, generally under prepaid contracted storage capacity contracts.

In situations where, in management’s judgment, it provides an integrated package of services combined into a single performance obligation, which represents a majority of this class of contracts with customers, Williams does not consider there to be multiple performance obligations because the nature of the overall promise in the contract is to provide gathering, processing, transportation, storage, and related services resulting in the delivery, or redelivery in the context of storage services, of pipeline-quality natural gas and NGLs to the customer.

As such, revenue is recognized at the daily completion of the integrated package of services as the integrated package represents a single performance obligation.

Additionally, certain contracts in our midstream businesses contain fixed or upfront payment terms that result in the deferral of revenues until such services have been performed or such capacity has been made available.

We also earn revenues from offshore crude oil and natural gas gathering and transportation and offshore production handling.

These services represent an integrated package of services and are considered a single distinct performance obligation for which we recognize revenues as the services are provided to the customer.

We generally earn a contractually stated fee per unit for the volume of product transported, gathered, processed, or stored.

Additionally, certain contracts in the midstream businesses contain fixed or upfront payment terms that result in the deferral of revenues until such services have been performed or such capacity has been made available.

Williams also earns revenues from offshore crude oil and natural gas gathering and transportation and offshore production handling.

These services represent an integrated package of services and are considered a single distinct performance obligation for which Williams recognizes revenues as the services are provided to the customer.

Williams generally earns a contractually stated fee per unit for the volume of product transported, gathered, processed, or stored.

The rate is generally fixed;

however, certain contracts contain variable rates that are subject to change based on commodity prices, levels of throughput, or an annual adjustment based on a formulaic cost-of-service calculation.

In addition, we have contracts with contractually stated fees that decline over the contract term, such as declines based on the passage of time periods or achievement of cumulative

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Notes to Consolidated Financial Statements – (Continued)

throughput amounts.

For all of our contracts, we allocate the transaction price to each performance obligation based on the judgmentally determined relative standalone selling price.

In addition, Williams has contracts with contractually stated fees that decline over the contract term, such as declines based on the passage of time periods or achievement of cumulative throughput amounts.

The excess of consideration received over revenue recognized results in the deferral of those amounts until future periods based on a units of production or straight-line methodology as these methods appropriately match the consumption of services provided to the customer.

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Production estimates are monitored as circumstances and events warrant.

Certain of our gas gathering and processing agreements have minimum volume commitments (MVC).

Certain of Williams’ gas gathering and processing agreements have minimum volume commitments (MVC).

If a customer under such an agreement fails to meet its MVC for a specified period (thus not exercising all the contractual rights to gathering and processing services within the specified period, herein referred to as “breakage”), it is obligated to pay a contractually determined fee based upon the shortfall between the actual gathered or processed volumes and the MVC for the period contained in the contract.

When we conclude, based on management’s judgment, it is probable that the customer will not exercise all or a portion of its remaining rights, we recognize revenue associated with such breakage amount in proportion to the pattern of exercised rights within the respective MVC period.

Under keep-whole and percent-of-liquids processing contracts, we receive commodity consideration in the form of NGLs and take title to the NGLs at the tailgate of the plant.

We recognize such commodity consideration as service revenue based on the market value of the NGLs retained at the time the processing is provided.

The current market value, as opposed to the market value at the contract inception date, is used due to a combination of factors, including the fact that the volume, mix, and market price of NGL consideration to be received is unknown at the time of contract execution and is not specified in our contracts with customers.

When Williams concludes, based on management’s judgment, it is probable that the customer will not exercise all or a portion of its remaining rights, Williams recognizes revenue associated with such breakage amount in proportion to the pattern of exercised rights within the respective MVC period.

Under keep-whole and percent-of-liquids processing contracts, Williams receives commodity consideration in the form of NGLs and takes title to the NGLs at the tailgate of the plant.

Williams recognizes such commodity consideration as service revenue based on the market value of the NGLs retained at the time the processing is provided.

Additionally, product sales revenue (discussed below) is recognized upon the sale of the NGLs to a third party based on the sales price at the time of sale.

As a result, revenue is recognized in our Consolidated Statement of Income both at the time the processing service is provided in Service revenues – commodity consideration and at the time the NGLs retained as part of the processing service are sold in Product sales .

As a result, revenue is recognized in the Consolidated Statement of Income both at the time the processing service is provided in Service revenues – commodity consideration and at the time the NGLs retained as part of the processing service are sold in Product

Notes (Continued)

The recognition of revenue related to commodity consideration has the impact of increasing the book value of NGL inventory, resulting in higher cost of goods sold at the time of sale.

Product Sales

In the course of providing transportation services to customers of our gas pipeline businesses and gathering and processing services to customers of our midstream businesses, we may receive different quantities of natural gas from customers than the quantities delivered on behalf of those customers.

The resulting imbalances are primarily settled through the purchase or sale of natural gas with each customer under terms provided for in our FERC tariffs or gathering and processing agreements, respectively.

Revenue is recognized from the sale of natural gas upon settlement of imbalances.

In certain instances, we purchase NGLs, crude oil, and natural gas from our oil and natural gas producer customers which we remarket.

In addition, we retain NGLs as consideration in certain processing arrangements, as discussed above in the Service Revenues - Midstream businesses section.

We also market natural gas and NGLs from the production at our upstream properties.

We recognize revenue from the sale of these commodities when the products have been sold and delivered.

Our product sales contracts are primarily short-term contracts based on prevailing market rates at the time of the transaction.

We purchase natural gas for storage when the current market price paid to buy and transport natural gas plus the cost to store and finance the natural gas is less than an estimated, forward market price that can be received in the future, resulting in positive net product sales.

In the course of providing transportation services to customers of the gas pipeline businesses, including Transco, and gathering and processing services to customers of the midstream businesses, different quantities of natural gas may be received from customers than the quantities delivered on behalf of those customers.

The resulting imbalances are primarily settled monthly through the purchase or sale of natural gas with each customer under terms provided for in FERC tariffs or gathering and processing agreements, respectively.

Revenue is recognized for Transco from the sale of natural gas upon settlement of imbalances (see Gas Imbalances below).

In certain instances, Williams purchases NGLs, crude oil, and natural gas from its oil and natural gas producer customers which Williams remarkets.

In addition, Williams retains NGLs as consideration in certain processing arrangements, as discussed above in the Service Revenues - Midstream businesses section.

Williams also markets natural gas and NGLs from the production at its upstream properties.

Williams recognizes revenue from the sale of these commodities when the products have been sold and delivered.

Williams’ product sales contracts are primarily short-term contracts based on prevailing market rates at the time of the transaction.

Williams purchases natural gas for storage when the current market price paid to buy and transport natural gas plus the cost to store and finance the natural gas is less than an estimated, forward market price that can be received in the future, resulting in positive net product sales.

Commodity-based exchange-traded futures contracts and over-the-counter (OTC) contracts are used to sell natural gas at that future price to substantially protect the natural gas revenues that will ultimately be realized when the stored natural gas is sold.

Additionally, we enter into transactions to secure transportation capacity between delivery points in order to serve our customers and various markets.

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Notes to Consolidated Financial Statements – (Continued)

The physical purchase, transportation, storage, and sale of natural gas are accounted for on a weighted-average cost or accrual basis, as appropriate, unlike the fair value basis utilized for the commodity derivatives used to mitigate the natural gas price risk associated with the storage and transportation portfolio.

Monthly demand charges are incurred for the contracted storage and transportation capacity and payments associated with asset management agreements, and these demand charges and payments are recognized in our Consolidated Statement of Income in the period they are incurred.

As we are acting as an agent for our natural gas marketing customers and engage in energy trading activities, our natural gas marketing revenues are presented net of the related costs of those activities.

Prior to the 2022 integration of our legacy gas marketing operations with the acquired Sequent Acquisition operations (see Note 3 – Acquisitions and Divestitures), our legacy gas marketing operations were reported on a gross basis.

Additionally, Williams enters into transactions to secure transportation capacity between delivery points in order to serve its customers and various markets.

The physical purchase, transportation, storage, and sale of natural gas associated with these natural gas purchases are accounted for on a weighted-average cost or accrual basis, as appropriate, unlike the fair value basis utilized for the commodity derivatives used to mitigate the natural gas price risk associated with the storage and transportation portfolio.

Monthly demand charges are incurred for contracted storage and transportation capacity and payments associated with asset management agreements and these demand charges and payments are recognized in the Consolidated Statement of Income in the period they are incurred.

As Williams is acting as an agent for its natural gas marketing customers and engages in energy trading activities, its natural gas marketing revenues are presented net of the related costs of those activities.

Contract Assets

Our contract assets primarily consist of revenue recognized under contracts containing MVC features whereby management has concluded it is probable there will be a short-fall payment at the end of the current MVC period, which typically follows the calendar year, and that a significant reversal of revenue recognized currently for the future MVC payment will not occur.

As a result, our contract assets related to our future MVC payments are generally expected to be collected within the next 12 months and are included within Other current assets and deferred charges in our Consolidated Balance Sheet until such time as the MVC short-fall payments are invoiced to the customer.

Contract assets in the Consolidated Balance Sheet primarily consist of revenue recognized under contracts containing MVC features whereby management has concluded it is probable there will be a short-fall payment at the end of the current MVC period, which typically follows the calendar year, and that a significant reversal of revenue recognized currently for the future MVC payment will not occur.

As a result, Williams’ contract assets related to its future MVC payments are generally expected to be collected within the next 12 months and are included within Other current assets and deferred charges in the Consolidated Balance Sheet until such time as the MVC short-fall payments are invoiced to the customer.

Transco and NWP

Transco’s contract assets primarily result from the modification of an existing contract resulting in increased rates.

NWP’s contract assets consist of discounts provided to customers in the beginning of the contract term that are recognized on a straight-line basis over the entire contract term resulting in revenue

Notes (Continued)

recognition occurring prior to actual billings.

Current and noncurrent contract assets are included within Other current assets and deferred charges and Deferred charges and other, respectively, in the Balance Sheets.

Contract Liabilities

Our contract liabilities consist of advance payments primarily from midstream business customers which include construction reimbursements, prepayments, and other billings and transactions for which future services are to be provided under the contract.

Contract liabilities in the Consolidated Balance Sheet consist of advance payments primarily from midstream business customers which include construction reimbursements, prepayments, and other billings and transactions for which future services are to be provided under the contract.

These amounts are deferred until recognized in revenue when the associated performance obligation has been satisfied, which is primarily based on a units of production methodology over the remaining contractual service periods, and are classified as current or noncurrent according to when such amounts are expected to be recognized.

Current and noncurrent contract liabilities are included within Accrued and other current liabilities and Regulatory liabilities, deferred income, and other , respectively, in our Consolidated Balance Sheet.

Contracts requiring advance payments and the recognition of contract liabilities are evaluated to determine whether the advance payments provide us with a significant financing benefit.

This determination is based on the combined effect of the expected length of time between when we transfer the promised good or service to the customer, when the customer pays for those goods or services, and the prevailing interest rates.

We have assessed our contracts for significant financing components and determined, in our judgment, that one group of contracts entered into in contemplation of one another for certain capital reimbursements contains a significant financing component.

As a result, we recognize noncash interest expense based on the effective interest method and revenue (noncash) is recognized when the underlying asset is placed into service utilizing a units of production or straight-line methodology over the life of the corresponding customer contract.

Current and noncurrent contract liabilities are included within Other current liabilities and Regulatory liabilities, deferred income, and other , respectively, in the Consolidated Balance Sheet.

Contracts requiring advance payments and the recognition of contract liabilities are evaluated to determine whether the advance payments provide Williams with a significant financing benefit.

This determination is based on the combined effect of the expected length of time between when Williams transfers the promised good or service to the customer, when the customer pays for those goods or services, and the prevailing interest rates.

Williams has assessed its contracts for significant financing components and determined, in management’s judgment, that one group of contracts entered into in contemplation of one another for certain capital reimbursements contains a significant financing component.

As a result, Williams recognizes noncash interest expense based on the effective interest method and revenue (noncash) is recognized when the underlying asset is placed into service utilizing a units of production or straight-line methodology over the life of the corresponding customer contract.

Transco and NWP

Transco’s contract liabilities consist of advance payments from customers, which include prepayments, and other billings for which future services are to be provided under the contract, and NWP’s contract liabilities consist of a fixed rate facility charge billed to customers with a declining rate structure in its tariffs.

Transco assessed its contracts and determined none contain a significant financing component.

These liabilities are classified as current or noncurrent according to when such amounts are expected to be recognized.

Current and noncurrent contract liabilities are included within Other current liabilities and Deferred charges and other, respectively, in the Balance Sheets .

Commodity Derivative Instruments and Hedging Activities

We are exposed to commodity price risk.

We utilize derivatives to manage a portion of our commodity price risk.

Williams is exposed to commodity price risk and utilizes derivatives to manage a portion of its commodity price risk.

These instruments consist primarily of swaps, futures, and forward contracts involving short- and long-term purchases and sales of energy commodities.

Additionally, we enter into transactions to secure transportation capacity between delivery points in order to serve our customers and various markets.

Commodity-based exchange-traded futures contracts and OTC contracts are used to capture the price differential or spread between the locations

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

served by the capacity in order to substantially protect the natural gas revenues that will ultimately be realized when the physical flow of natural gas between receipt and delivery points occurs.

Additionally, Williams enters into transactions to secure transportation capacity between delivery points in order to serve its customers and various markets.

Commodity-based exchange-traded futures contracts and OTC contracts are used to capture the price differential or spread between the locations served by the capacity in order to substantially protect the natural gas revenues that will ultimately be realized when the physical flow of natural gas between receipt and delivery points occurs.

Some commodity derivative contracts require physical delivery as opposed to financial settlement, and this type of derivative is both common and prevalent within the natural gas marketing operations.

These contracts generally meet the definition of derivatives and are typically not designated as hedges for accounting purposes.

When a commodity derivative contract is settled physically, any cumulative unrealized gain or loss is reversed, and the contract price is recognized in the respective line item in our Consolidated Statement of Income representing the actual price of the underlying goods being delivered.

Unrealized gains and losses from physically settled commodity derivative contracts for commodity sales transactions are recognized in Net gain (loss) from commodity derivatives in our Consolidated Statement of Income.

Realized and unrealized gains and losses from non-designated commodity derivative contracts for commodity sales transactions that are financially settled are reported in Net gain (loss) from commodity derivatives in our Consolidated Statement of Income.

Net gains and losses from derivatives for shrink gas purchases for processing plants are reported in Net processing commodity expenses in our Consolidated Statement of Income.

We experience significant earnings volatility from the fair value accounting required for the derivatives used to hedge a portion of the economic value of the underlying transportation and storage portfolio as well as upstream related production.

When a commodity derivative contract is settled physically, any cumulative unrealized gain or loss is reversed, and the contract price is recognized in the respective line item in the Consolidated Statement of Income representing the

Notes (Continued)

actual price of the underlying goods being delivered.

As of December 31, 2024 and 2023, Williams is not applying hedge accounting to any commodity derivative instruments.

Net gains and losses from derivatives for shrink gas purchases for processing plants are reported in Net processing commodity expenses in the Consolidated Statement of Income.

Williams experiences significant earnings volatility from the fair value accounting required for the derivatives used to hedge a portion of the economic value of the underlying transportation and storage portfolio as well as upstream related production.

However, the unrealized fair value measurement gains and losses are generally offset by valuation changes in the economic value of the underlying production or transportation and storage contracts, which is not recognized until the underlying transaction occurs.

(See Note 17 – Commodity Derivatives.)

We report the fair value of derivatives, except those for which the normal purchases and normal sales exception has been elected, in Derivative assets;

Williams reports the fair value of derivatives, except those for which the normal purchases and normal sales exception has been elected, in Derivative assets;

Regulatory assets, deferred charges, and other;

Derivative liabilities ;

or Regulatory liabilities, deferred income, and other in our Consolidated Balance Sheet.

These amounts are presented on a net basis and reflect the netting of asset and liability positions permitted under the terms of master netting arrangements and cash held on deposit in margin accounts that we have received or remitted to collateralize certain derivative positions.

We determine the current and noncurrent classification based on the timing of expected future cash flows of individual trades.

or Regulatory liabilities, deferred income, and other in the Consolidated Balance Sheet.

These amounts are presented on a net basis and reflect the netting of asset and liability positions permitted under the terms of master netting arrangements and cash held on deposit in margin accounts that Williams has received or remitted to collateralize certain derivative positions.

Williams determines the current and noncurrent classification based on the timing of expected future cash flows of individual trades.

The accounting for the changes in fair value of a commodity derivative can be summarized as follows:

1 unchanged sentence

Normal purchases and normal sales exception Accrual accounting

Designated in a qualifying hedging relationship Hedge accounting

All other derivatives Mark-to-market accounting

We may elect the normal purchases and normal sales exception for certain short- and long-term purchases and sales of physical energy commodities.

Under accrual accounting, any change in the fair value of these derivatives is not reflected in our Consolidated Balance Sheet after the initial election of the exception.

We may also designate a hedging relationship for certain commodity derivatives.

For a derivative to qualify for designation in a hedging relationship, it must meet specific criteria and we must maintain appropriate documentation.

We establish hedging relationships pursuant to our risk management policies.

We evaluate the hedging relationships at the inception of the hedge and on an ongoing basis to determine whether the hedging relationship is, and is expected to remain, highly effective in achieving offsetting changes in fair value or cash flows attributable to the underlying risk being hedged.

We also regularly assess whether the hedged forecasted transaction is probable of occurring.

If a derivative ceases to be or is no longer expected to be highly effective, or if we believe the likelihood of occurrence of the hedged forecasted transaction is no longer probable, hedge accounting is discontinued prospectively, and future changes in the fair value of the derivative are recognized currently in Net gain (loss) from commodity derivatives in our Consolidated Statement of Income.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

For commodity derivatives designated as a cash flow hedge, the change in fair value of the derivative is reported in Accumulated other comprehensive income (loss) (AOCI) in our Consolidated Balance Sheet and reclassified into earnings in the period in which the hedged item affects earnings.

Gains or losses deferred in AOCI associated with terminated derivatives, derivatives that cease to be highly effective hedges, derivatives for which the forecasted transaction is reasonably possible but no longer probable of occurring, and cash flow hedges that have been otherwise discontinued remain in AOCI until the hedged item affects earnings.

If it becomes probable that the forecasted transaction designated as the hedged item in a cash flow hedge will not occur, any gain or loss deferred in AOCI is recognized in Net gain (loss) from commodity derivatives in our Consolidated Statement of Income at that time.

The change in likelihood of a forecasted transaction is a judgmental decision that includes qualitative assessments made by us.

As of December 31, 2023 and 2022, we are not applying hedge accounting to any commodity derivative instruments.

Williams may elect the normal purchases and normal sales exception for certain short- and long-term purchases and sales of physical energy commodities.

Under accrual accounting, any change in the fair value of these derivatives is not reflected in the Consolidated Balance Sheet after the initial election of the exception.

Interest Capitalized

We capitalize interest during construction on major projects with construction periods of at least 3 months and a total project cost in excess of $ 1 million.

Interest is capitalized on borrowed funds and, where regulation by the FERC exists, on internally generated funds (equity AFUDC).

The former is included in Interest expense and the latter is included in Other income (expense) – net below Operating income (loss) in our Consolidated Statement of Income.

The rates used by regulated companies are calculated in accordance with FERC rules.

Rates used by nonregulated companies are based on our average interest rate on debt.

We include the operations of our domestic corporate subsidiaries and income from our subsidiary partnerships in our consolidated fed e ral income tax return and also file tax return s in various foreign and state jurisdictions as required .

Deferred income taxes are computed using the liability method and are provided on all temporary differences between the financial basis and the tax basis of our assets and liabilities.

Our judgment and income tax assumptions are used to determine the levels, if any, of v aluation allowances associated with deferred tax assets.

For its non-regulated companies, Williams capitalizes interest on its debt using the weighted-average interest rate on debt excluding debt issued by Transco, NWP, and MountainWest.

This is included in Interest expense in Williams’ Consolidated Statement of Income.

For Williams’ regulated interstate natural gas pipelines, including Transco, NWP, and MountainWest, interest is capitalized from its borrowed funds and from internally generated funds (equity AFUDC) (see Regulatory Accounting).

The former is included in Interest expense and the latter is included in Other income (expense) – net below Operating income (loss) in Williams’ Consolidated Statement of Income and Allowance for equity and borrowed funds used during construction (AFUDC) in Transco and NWP’s Statement of Net Income (see Note 9 – Property, Plant, and Equipment).

Williams includes the operations of its domestic corporate subsidiaries and income from its subsidiary partnershi ps, as well as income from Transco and NWP which are treated as pass-through entities for state and local income tax purposes, in its consolidated fed e ral income tax return and also files tax return s in various foreign and state jurisdictions as required .

Deferred income taxes are computed using the liability method and are provided on

Notes (Continued)

all temporary differences between the financial basis and the tax basis of its assets and liabilities.

Management’s judgment and income tax assumptions are used to determine the levels, if any, of v aluation allowances associated with deferred tax assets.

Earnings (Loss) Per Common Share

Basic earnings (loss) per common share in our Consolidated Statement of Income is based on the sum of the weighted-average number of common shares outstanding and vested restricted stock units.

Diluted earnings (loss) per common share in our Consolidated Statement of Income primarily includes any dilutive effect of nonvested restricted stock units and stock options.

Diluted earnings (loss) per common share may also include any dilutive effect of our preferred stock.

Williams’ Basic earnings (loss) per common share in the Consolidated Statement of Income is based on the sum of the weighted-average number of common shares outstanding and vested restricted stock units.

Diluted earnings (loss) per common share in the Consolidated Statement of Income primarily includes any dilutive effect of nonvested restricted stock units and stock options.

Diluted earnings (loss) per common share may also include any dilutive effect of Williams’ preferred stock.

Diluted earnings (loss) per common share is calculated using the treasury-stock method.

Cash and Cash Equivalents

Cash and cash equivalents in our Consolidated Balance Sheet consist of highly liquid investments with original maturities of three months or less when acquired.

Cash and cash equivalents in the Consolidated Balance Sheet consist of highly liquid investments with original maturities of three months or less when acquired.

Accounts Receivable

Accounts receivable are carried on a gross basis, with no discounting, less an allowance for doubtful accounts.

We estimate the allowance for doubtful accounts, considering current expected credit losses using a forward-looking “expected loss” model, the financial condition of our customers, and the age of past due accounts.

The majority of our trade receivable balances are due within 30 days.

We monitor the credit quality of our counterparties through review of collection trends, credit ratings, and other analyses, such as bankruptcy monitoring.

Financial assets from our natural gas transmission business, natural gas storage business, gathering, processing and transportation business, marketing business, and upstream operations are segregated into separate pools for evaluation due to different counterparty risks inherent in each business.

Changes in counterparty risk factors could lead to reassessment of the composition of our financial assets as separate pools or the need for additional pools.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

calculate our allowance for credit losses incorporating an aging method.

In estimating our expected credit losses, we utilize historical loss rates over many years, which include periods of both high and low commodity prices.

Commodity prices could have a significant impact on a portion of our gathering and processing and upstream counterparties’ financial health and ability to satisfy current obligations.

Our expected credit loss estimate considers both internal and external forward-looking commodity price expectations, as well as counterparty credit ratings, and factors impacting their near-term liquidity.

In addition, our expected credit loss estimate considers potential contractual, physical, and commercial protections and outcomes in the case of a counterparty bankruptcy.

The physical location and nature of our services help to mitigate collectability concerns of our gathering and processing producer customers.

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

Management estimates the allowance for doubtful accounts, considering current expected credit losses using a forward-looking “expected loss” model, the financial condition of its customers, and the age of past due accounts.

The majority of trade receivable balances are due within 30 days.

Management monitors the credit quality of its counterparties through review of collection trends, credit ratings, and other analyses, such as bankruptcy monitoring.

Williams’ financial assets from its natural gas transmission business, natural gas storage business, gathering, processing and transportation business, marketing business, and upstream operations, as applicable, are segregated into separate pools for evaluation due to different counterparty risks inherent in each business, with Transco’s and NWP’s financial assets each evaluated as one pool.

Changes in counterparty risk factors could lead to reassessment of the composition of financial assets as one pool, separate pools, or the need for additional pools.

Management calculates its allowance for credit losses incorporating an aging method.

In estimating its expected credit losses, management utilizes historical loss rates over many years, which for Williams includes periods of both high and low commodity prices.

Transco’s and NWP’s expected credit loss estimates considered both internal and external forward-looking commodity price expectations, as well as counterparty credit ratings, and factors impacting near-term liquidity.

Commodity prices could have a significant impact on a portion of Williams’ gathering and processing and upstream counterparties’ financial health and ability to satisfy current obligations.

Williams’ expected credit loss estimate considers both internal and external forward-looking commodity price expectations, as well as counterparty credit ratings, and factors impacting near-term liquidity.

In addition, Williams’ expected credit loss estimate considers potential contractual, physical, and commercial protections and outcomes in the case of a counterparty bankruptcy.

The physical location and nature of Williams’ services help to mitigate collectability concerns of its gathering and processing producer customers.

Williams’ 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.

This tends to reduce collectability risk as our services enable producers to generate operating cash flows.

Commodity price movements generally do not impact the majority of our natural gas transmission businesses customers’ financial condition.

We also provide marketing and risk management services to retail and wholesale gas marketers, utility companies, upstream producers, and industrial customers.

These counterparties utilize netting agreements that enable us to net receivables and payables by counterparty upon settlement.

We also net across product lines and against cash collateral received to collateralize receivable positions, provided the netting and cash collateral agreements include such provisions.

While the amounts due from, or owed to, our counterparties are settled net, they are recorded on a gross basis in our Consolidated Balance Sheet as accounts receivable and accounts payable.

We do not offer extended payment terms and typically receive payment within one month.

We consider receivables past due if full payment is not received by the contractual due date.

Interest income related to past due accounts receivable is generally recognized at the time full payment is received or collectability is assured.

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

This tends to reduce collectability risk as Williams’ services enable producers to generate operating cash flows.

Commodity price movements generally do not impact the majority of Williams’ natural gas transmission businesses customers’ financial condition.

Williams also provides marketing and risk management services to retail and wholesale gas marketers, utility companies, upstream producers, and industrial customers.

These counterparties utilize netting agreements that enable Williams to net receivables and payables by counterparty upon settlement.

Williams also nets across product lines and against cash collateral received to collateralize receivable positions, provided the netting and cash

Notes (Continued)

collateral agreements include such provisions.

While the amounts due from, or owed to, Williams’ counterparties are settled net, these amounts are recorded on a gross basis in the Consolidated Balance Sheet as accounts receivable and accounts payable.

Extended payment terms are not offered and payments are typically received within one month.

Receivables are considered past due if full payment is not received by the contractual due date.

Past due accounts are generally written off against the allowance for doubtful accounts only after all collection attempts have been exhausted.

We do not have a material amount of significantly aged receivables at December 31, 2023 and 2022.

Inventories in our Consolidated Balance Sheet primarily consist of NGLs, materials and supplies, and natural gas in underground storage and primarily are stated at the lower of cost or net realizable value.

The cost of inventories is primarily determined using the average-cost method.

Any lower of cost or net realizable value adjustments are included in Product sales in our Consolidated Statement of Income (for natural gas marketing inventory as these sales are presented net of the related costs) or in Product costs in our Consolidated Statement of Income for NGL inventory.

Neither Williams, Transco, nor NWP have a material amount of significantly aged receivables at December 31, 2024 or 2023.

Gas Imbalances

Transco transports gas on various pipeline systems which may deliver different quantities of gas on behalf of Transco than the quantities of gas received from Transco.

These transactions result in gas transportation and exchange imbalance receivables and payables which are recovered or repaid in cash or through the receipt or delivery of gas in the future and are recorded in the accompanying Balance Sheet.

Revenues received from the cash-out of transportation imbalances in excess of costs incurred are deferred and offset by the deferral of costs incurred in excess of revenues received.

At the end of each annual August through July reporting period, if the cumulative revenues received exceed the costs incurred, the over recovered amounts are applied to any prior under recovery balance or refunded.

If the cumulative revenues received are less than the costs incurred, the net under recovered amounts are carried forward and offset against any future net over recoveries that may occur in a subsequent annual reporting period.

These deferred recoveries are recognized as Regulatory assets in Transco’s Balance Sheet (see Note 10 – Regulatory Assets and Liabilities).

The settlement of imbalances requires agreement between the pipelines and shippers as to allocations of volumes to specific transportation contracts and timing of delivery of gas based on operational conditions.

These imbalances are classified as Other current assets and deferred charges and Other current liabilities in Transco’s Balance Sheet (see Note 10 – Regulatory Assets and Liabilities).

Transco utilizes the average cost method of accounting for gas imbalances.

In the course of providing transportation services to customers, NWP may receive different quantities of natural gas from customers than the quantities delivered on behalf of those customers or consumed in fuel to operate NWP’s system.

The resulting customer imbalances are typically settled through the receipt or delivery of gas in the future based on the timelines outlined in NWP’s tariff, whereas the over/under recovery of fuel is cleared up through NWP’s semi-annual fuel tracker.

Customer imbalances to be repaid or recovered in-kind are recorded as Other current assets and deferred charges or Other current liabilities in NWP’s Balance Sheet.

The under recovery of fuel is recorded as Regulatory assets and the over recovery is recorded in Regulatory liabilities in NWP’s Balance Sheet (see Note 10 – Regulatory Assets and Liabilities).

These imbalances are valued at published spot rates.

Inventories in Williams’ Consolidated Balance Sheet primarily consist of NGLs, materials and supplies, and natural gas in underground storage and are primarily stated at the lower of cost or net realizable value.

The cost of inventories are primarily determined using the average cost method.

Inventories in Transco’s and NWP’s Balance Sheets primarily consist of materials and supplies and natural gas in underground storage.

Transco and NWP Environmental Matters

Transco and NWP are subject to federal, state, and local environmental laws and regulations.

Environmental expenditures are expensed or capitalized depending on the economic benefit and potential for rate recovery.

Notes (Continued)

entities believe that expenditures required to meet applicable environmental laws and regulations are prudently incurred in the ordinary course of business and such expenditures would be permitted to be recovered through rates with limited exceptions.

In accordance with the Climate Commitment Act of the state of Washington, which established a market-based cap-and-invest program, NWP is required to obtain emission allowances for the carbon emissions from nine of NWP’s thirteen compressor stations within the state of Washington whose annual carbon emissions exceed 25,000 metric tons of carbon dioxide equivalent at least once since 2015.

NWP records the purchased emission allowances at cost and the associated accumulated interest to a regulatory asset.

The difference between the allowances held and the allowances required based on actual emissions for the period are measured using an estimate based on NWP’s most recent cost of allowances and accrued to a current liability and to a regulatory asset.

NWP’s Petition for Approval of Pre-Filing Stipulation and Settlement Agreement (Settlement) in Docket No.

RP22-1155, which FERC approved in 2022, allows NWP to recover the costs of purchasing allowances under the program in its next rate case (see Note 18 – Contingencies and Commitments).

Property, Plant, and Equipment

Property, plant, and equipment is initially recorded at cost.

We base the carrying value of these assets on estimates, assumptions, and judgments relative to capitalized costs, useful lives, and salvage values.

As regulated entities, Transco, Northwest Pipeline, and MountainWest provide for depreciation using the straight-line method at FERC-prescribed rates.

Depreciation for nonregulated entities is provided primarily on the straight-line method over estimated useful lives, except for certain offshore facilities that apply an accelerated depreciation method.

We follow the successful efforts method of accounting for our undivided interest in upstream properties.

Our oil and gas producing property costs are depreciated using a units of production method.

Gains or losses from the ordinary sale or retirement of property, plant, and equipment for regulated pipelines are credited or charged to accumulated depreciation.

Gains or losses from the ordinary sale or retirement of property,

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

plant, and equipment for nonregulated assets are primarily recorded in Other (income) expense – net included in Operating income (loss) in our Consolidated Statement of Income.

The carrying value of these assets is based on estimates, assumptions, and judgments relative to capitalized costs, useful lives, and salvage values.

For the Transco, NWP, and MountainWest interstate natural gas pipelines, these estimates, assumptions and judgments reflect FERC regulations, as well as historical experience and expectations regarding future industry conditions and operations.

The FERC identifies installation, construction and replacement costs that are to be capitalized.

All other costs are expensed as incurred.

As regulated entities, Transco, NWP and MountainWest provide for depreciation primarily under the composite (group) method using straight-line FERC-prescribed rates.

Under this method, assets with similar lives and characteristics are grouped and depreciated as one asset.

These regulated entities’ depreciation rates are subject to change each time these regulated entities file a general rate case with the FERC.

Included in Transco’s and NWP’s depreciation rates is a negative salvage component (net cost of removal) that Transco and NWP currently collect in rates that is recorded as a regulatory liability in the Balance Sheets (see Note 10 – Regulatory Assets and Liabilities).

Depreciation for Williams’ nonregulated entities is provided primarily on the straight-line method over estimated useful lives.

Williams follows the successful efforts method of accounting for its upstream properties.

Its oil and gas producing property costs are depreciated using the units of production method.

Gains or losses from the ordinary sale or retirement of property, plant, and equipment for the Transco, NWP, and MountainWest interstate natural gas pipelines are credited or charged to accumulated depreciation;

certain other gains or losses are recorded in Other (income) expense – net included in Operating income (loss) in the statements of income.

Gains or losses from the ordinary sale or retirement of property, plant, and equipment for Williams’ nonregulated assets are primarily recorded in Other (income) expense – net included in Operating income (loss) in the Consolidated Statement of Income.

Ordinary maintenance and repair costs are generally expensed as incurred.

Costs of major renewals and replacements are capitalized as property, plant, and equipment.

We record a liability and increase the basis in the underlying asset for the present value of each expected future ARO at the time the liability is initially incurred, typically when the asset is acquired or constructed.

For our upstream properties, the ARO is recorded based on our working interest in the underlying properties.

As regulated entities, Transco, Northwest Pipeline, and MountainWest offset the depreciation of the underlying asset that is attributable to capitalized ARO cost to a regulatory asset as we expect to recover these amounts in future rates.

We measure changes in the liability due to passage of time by applying an interest rate to the liability balance.

This amount is recognized as an increase in the carrying amount of the liability and as a corresponding accretion expense included in Operating and maintenance expenses in our Consolidated Statement of Income, except for regulated entities, for which the increase in the liability results in a corresponding increase to a regulatory asset.

The regulatory asset is amortized commensurate with our collection of those costs in rates.

Williams records a liability and increases the basis in the underlying asset for the present value of each expected future ARO at the time the liability is initially incurred, typically when the asset is acquired or constructed.

For Williams’ upstream properties, the ARO is recorded based on Williams’ working interest in the underlying properties.

As regulated entities, Transco’s and NWP’s depreciation expense and accretion expense are offset and recorded as a regulatory asset as the regulated entities expect to recover these accretion expenses in future rates and measure changes in the liability due to passage of time by applying an interest rate to the liability balance.

Notes (Continued)

is recognized as an increase in the carrying amount of the liability included in Operating and maintenance expenses and as a corresponding accretion expense included in Other (income) expense - net in the Consolidated Statement of Income.

The regulatory asset is amortized commensurate with these regulated entities’ collection of those costs in rates.

Measurements of AROs include, as a component of future expected costs, an estimate of the price that a third party would demand, and could expect to receive, for bearing the uncertainties inherent in the obligations, sometimes referred to as a market-risk premium.

Goodwill included within Intangible assets – net of accumulated amortization in our Consolidated Balance Sheet, as of December 31, 2023, represents the excess of the consideration, plus the fair value of any noncontrolling interest or any previously held equity interest, over the fair value of the net assets acquired.

Goodwill included within Intangible assets – net of accumulated amortization in Williams’ Consolidated Balance Sheet, as of December 31, 2024, represents the excess of the consideration, plus the fair value of any noncontrolling interest or any previously held equity interest, over the fair value of the net assets acquired.

It is not subject to amortization but is evaluated annually as of October 1 for impairment or more frequently if impairment indicators are present that would indicate it is more likely than not that the fair value of the reporting unit is less than its carrying amount.

As part of the evaluation, we compare our estimate of the fair value of the reporting unit with its carrying value, including goodwill.

If the carrying value of the reporting unit exceeds its fair value, an impairment charge is recorded for the difference (not to exceed the carrying value of goodwill).

Judgments and assumptions are inherent in our management’s estimates of fair value.

Management first performs a qualitative assessment to test goodwill on a reporting unit by reporting unit basis to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management compares its estimate of fair value of the reporting unit to its carrying amount, including goodwill.

Judgments and assumptions are inherent in management’s estimates of fair value.

Other Identifiable Intangible Assets

Our other identifiable intangible assets included within Intangible assets – net of accumulated amortization in our Consolidated Balance Sheet are primarily related to gas gathering, processing, and fractionation customer relationships.

Our other identifiable intangible assets are generally amortized on a straight-line basis over the period in which these assets contribute to our cash flows.

We evaluate these assets for changes in the expected remaining useful lives and would reflect any changes prospectively through amortization over the revised remaining useful life.

Williams’ other identifiable intangible assets included within Intangible assets – net of accumulated amortization in the Consolidated Balance Sheet are primarily related to gas gathering, processing, and fractionation customer relationships.

Williams’ other identifiable intangible assets are generally amortized on a straight-line basis over the period in which these assets contribute to its cash flows.

Williams evaluates these assets for changes in the expected remaining useful lives and reflects any changes prospectively through amortization over the revised remaining useful life.

Impairment of Property, Plant, and Equipment, Intangible Assets, and Investments

We evaluate our property, plant, and equipment and intangible assets for impairment when, in our judgment, events or circumstances, including probable abandonment, indicate that the carrying value of such assets may not be recoverable.

When an indicator of impairment has occurred, we compare our estimate of undiscounted future cash flows attributable to the assets to the carrying value of the assets to determine whether an impairment has occurred and we may apply a probability-weighted approach to consider the likelihood of different cash flow assumptions and possible outcomes, including selling the assets in the near term or holding them for their remaining estimated useful life.

If an impairment of the carrying value has occurred, we determine the amount of the impairment to be recognized in our consolidated financial statements by estimating the fair value of the assets and recording a loss for the amount that the carrying value exceeds the estimated fair value.

Management evaluates property, plant, and equipment and intangible assets for impairment when, in its judgment, events or circumstances, including probable abandonment, indicate that the carrying value of such assets may not be recoverable.

When an indicator of impairment has occurred, management compares its estimate of undiscounted future cash flows attributable to the assets to the carrying value of the assets to determine whether an impairment has occurred and may apply a probability-weighted approach to consider the likelihood of different cash flow assumptions and possible outcomes, including selling the assets in the near term or holding them for the asset’s remaining estimated useful life.

If an impairment of the carrying value has occurred, management determines the amount of the impairment to be recognized in the financial statements by estimating the fair value of the assets and recording a loss for the amount that the carrying value exceeds the estimated fair value.

This evaluation is performed at the lowest level for which separately identifiable cash flows exist.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

For assets identified to be disposed of in the future and considered held for sale, we compare the carrying value to the estimated fair value less the cost to sell to determine if recognition of an impairment is required.

For assets identified to be disposed of in the future and considered held for sale, management compares the carrying value to the estimated fair value less the cost to sell to determine if recognition of an impairment is required.

Until the assets are disposed of, the estimated fair value, which includes estimated cash flows from operations until the assumed date of sale, is recalculated when related events or circumstances change.

We evaluate our investments for impairment when, in our judgment, events or circumstances indicate that the carrying value of such investments may have experienced an other-than-temporary decline in value.

When evidence of loss in value has occurred, we compare our estimate of fair value of the investment to the carrying value of the investment to determine whether an impairment has occurred.

If the estimated fair value is less than the carrying value and we consider the decline in value to be other-than-temporary, the excess of the carrying value over the fair value is recognized in our consolidated financial statements as an impairment charge.

Judgment and assumptions are inherent in our estimate of undiscounted future cash flows and an asset’s or investment’s fair value.

Williams’ investments are evaluated for impairment when, in management’s judgment, events or circumstances indicate that the carrying value of such investments may have experienced an other-than-temporary decline in value.

When evidence of loss in value has occurred, management compares its estimate of fair value of the investment to the carrying value of the investment to determine whether an impairment has occurred.

If the estimated fair value is

Notes (Continued)

less than the carrying value and management considers the decline in value to be other-than-temporary, the excess of the carrying value over the fair value is recognized in the financial statements as an impairment charge.

Judgment and assumptions are inherent in the estimate of undiscounted future cash flows and an asset’s or investment’s fair value.

Additionally, judgment is used to determine the probability of sale with respect to assets considered for disposal.

Equity-Method Investment Basis Differences

Differences between the carrying value of our equity-method investments and our underlying equity in the net assets of investees are accounted for as if the investees were consolidated subsidiaries.

Equity earnings (losses) in our Consolidated Statement of Income includes our allocable share of net income (loss) of investees adjusted for any depreciation and amortization, as applicable, associated with basis differences.

We recognize a lease liability with an offsetting right-of-use asset in our Consolidated Balance Sheet for operating leases based on the present value of the future lease payments.

We have elected to combine lease and nonlease components for all classes of leased assets in our calculation of the lease liability and the offsetting right-of-use asset.

Our lease agreements require both fixed and variable periodic payments, with initial terms typically ranging from one year to 20 years.

Payment provisions in certain of our lease agreements contain escalation factors which may be based on stated rates or a change in a published index at a future time.

Differences between the carrying value of Williams’ equity-method investments and the underlying equity in the net assets of investees are accounted for as if the investees were consolidated subsidiaries.

Equity earnings (losses) in the Consolidated Statement of Income includes Williams’ allocable share of net income (loss) of investees adjusted for any depreciation and amortization, as applicable, associated with basis differences.

Williams, Transco, and NWP recognize operating lease liabilities based on the present value of the future lease payments and have elected to combine lease and nonlease components for all classes of leased assets in the calculation of the lease liability and the offsetting right-of-use asset in the respective Balance Sheets.

Williams’, Transco’s, and NWP’s lease agreements require both fixed and variable periodic payments, with initial terms typically ranging from one year to 20 years for Williams and up to 30 years for Transco and NWP.

Payment provisions in certain lease agreements contain escalation factors which may be based on stated rates or a change in a published index at a future time.

The amount by which a lease escalates based on the change in a published index, which is not known at lease commencement, is considered a variable payment and is not included in the present value of the future lease payments, which only includes those that are stated or can be calculated based on the lease agreement at lease commencement.

In addition to the noncancellable periods, many of our lease agreements provide for one or more extensions of the lease agreement for periods ranging from one year in length to an indefinite number of times following the specified contract term.

Other lease agreements provide for extension terms that allow us to utilize the identified leased asset for an indefinite period of time so long as the asset continues to be utilized in our operations.

In consideration of these renewal features, we assess the term of the lease agreements, which includes using judgment in the determination of which renewal periods and termination provisions, when at our sole election, will be reasonably certain of being exercised.

In addition to the noncancellable periods, many of Williams’ lease agreements provide for one or more extensions of the lease agreement for periods ranging from one year in length to an indefinite number of times following the specified contract term.

Other lease agreements provide for extension terms that allow Williams, Transco, and NWP to utilize the identified leased asset for an indefinite period of time so long as the asset continues to be utilized in its operations.

In consideration of these renewal features, management assesses the term of the lease agreements, which includes using judgment in the determination of which renewal periods and termination provisions, when at its sole election, will be reasonably certain of being exercised.

Periods after the initial term or extension terms that allow for either party to the lease to cancel the lease are not considered in the assessment of the lease term.

Additionally, we have elected to exclude leases with an original term of one year or less, including renewal periods, from the calculation of the lease liability and the offsetting right-of-use asset.

We use judgment in determining the discount rate upon which the present value of the future lease payments is determined.

Additionally, management has elected to exclude leases with an original term of one year or less, including renewal periods, from the calculation of the lease liability and the offsetting right-of-use asset.

Judgment is used in determining the discount rate upon which the present value of the future lease payments is determined.

This rate is based on a collateralized interest rate corresponding to the term of the lease agreement using company, industry, and market information available.

When permitted under our lease agreements, we may sublease certain unused office space for fixed periods that could extend up to the length of the original lease agreement.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

When permitted under its lease agreements, Williams may sublease certain unused office space for fixed periods that could extend up to the length of the original lease agreement.

Pension and Other Postretirement Benefits

The funded status of each of the pension and other postretirement benefit plans is recognized separately in our Consolidated Balance Sheet as either an asset or liability.

The funded status of each of the pension and other postretirement benefit plans is recognized separately in Williams’ Consolidated Balance Sheet as either an asset or liability.

The plans’ benefit obligations and net periodic benefit costs (credits) are actuarially determined and impacted by various assumptions and estimates.

The discount rates are determined separately for each of our pension and other postretirement benefit plans based on an approach specific to our plans.

The year-end discount rates are determined considering a yield curve comprised of high-quality corporate bonds and the timing of the expected benefit cash flows of each plan.

The discount rates are determined separately for each of Williams’ pension and other postretirement benefit plans based on an approach specific to Williams’ plans.

The year-end discount rates are determined considering a

Notes (Continued)

yield curve comprised of high-quality corporate bonds and the timing of the expected benefit cash flows of each plan.

The expected long-term rates of return on plan assets are determined by combining a review of the historical returns within the portfolio, the investment strategy included in the plans’ investment policy statement, and capital market projections for the asset classes in which the portfolio is invested, as well as the weighting of each asset class.

Unrecognized actuarial gains and losses are deferred and recorded in AOCI or, for Transco and Northwest Pipeline, as a regulatory asset or liability, until amortized as a component of net periodic benefit cost (credit).

The unrecognized net actuarial losses deferred in AOCI at December 31, 2023 and 2022 were $ 17 million and $ 18 million, respectively.

Unrecognized actuarial gains and losses in excess of 10 percent of the greater of the benefit obligation or the market-related value of plan assets are amortized over the participants’ average remaining future years of service, which is approximately 9 years for our pension plans and approximately 5 years for our other postretirement benefit plan.

Unrecognized actuarial gains and losses are deferred and recorded in AOCI or, for Transco and NWP, as a regulatory asset or liability, until amortized as a component of net periodic benefit cost (credit).

The unrecognized net actuarial gains (losses) deferred in AOCI at December 31, 2024 and 2023 were $ 55 million and ($ 17 ) million, respectively.

Unrecognized actuarial gains and losses in excess of 10 percent of the greater of the benefit obligation or the market-related value of plan assets are amortized over the participants’ average remaining future years of service, which is approximately 9 years for Williams’ pension plans and approximately 4 years for Williams’ other postretirement benefit plan.

The expected return on plan assets component of net periodic benefit cost (credit) is calculated using the market-related value of plan assets.

For our pension plans, the market-related value of plan assets is equal to the fair value of plan assets adjusted to reflect the amortization of gains or losses associated with the difference between the expected and actual return on plan assets over a 5 -year period.

For Williams’ pension plans, the market-related value of plan assets is equal to the fair value of plan assets adjusted to reflect the amortization of gains or losses associated with the difference between the expected and actual return on plan assets over a 5 -year period.

Additionally, the market-related value of assets may be no more than 110 percent or less than 90 percent of the fair value of plan assets at the beginning of the year.

The market-related value of plan assets for our other postretirement benefit plan is equal to the unadjusted fair value of plan assets at the beginning of the year.

The market-related value of plan assets for Williams’ other postretirement benefit plan is equal to the unadjusted fair value of plan assets at the beginning of the year.

Contingent Liabilities

We record liabilities for estimated loss contingencies, including environmental matters, when we assess that a loss is probable, and the amount of the loss can be reasonably estimated.

These liabilities are calculated based upon our assumptions and estimates with respect to the likelihood or amount of loss and upon advice of legal counsel, engineers, or other third parties regarding the probable outcomes of the matters.

Liabilities for loss contingencies, including environmental matters, are recorded when management assesses that a loss is probable and the amount of the loss can be reasonably estimated.

These liabilities are calculated based upon management’s assumptions and estimates with respect to the likelihood or amount of loss and upon advice of legal counsel, engineers, or other third parties regarding the probable outcomes of the matters.

These calculations are made without consideration of any potential recovery from third parties.

We recognize insurance recoveries or reimbursements from others when realizable.

Insurance recoveries or reimbursements from others are recognized when realizable.

Revisions to these liabilities are generally reflected in income when new or different facts or information become known or circumstances change that affect the previous assumptions or estimates.

Treasury Stock

Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as Treasury stock, at cost in our Consolidated Balance Sheet.

Gains and losses on the subsequent reissuance of shares are credited or charged to Capital in excess of par value in our Consolidated Balance Sheet using the average-cost method.

Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as Treasury stock, at cost in Williams’ Consolidated Balance Sheet.

Gains and losses on the subsequent reissuance of shares are credited or charged to Capital in excess of par value in the Consolidated Balance Sheet using the average cost method.

Cash Flows from Operating Activities

Williams, Transco, and NWP use the indirect method to report cash flows from operating activities, which requires adjustments to net income to reconcile to net cash flows provided by operating activities.

Cash Flows from Revolving Credit Facility and Commercial Paper Program

Proceeds and payments related to borrowings under our revolving credit facility are reflected in the financing activities in our Consolidated Statement of Cash Flows on a gross basis.

Proceeds and payments related to borrowings under our commercial paper program are reflected in the financing activities in our Consolidated

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Statement of Cash Flows on a net basis, as the outstanding notes generally have maturity dates less than three months from the date of issuance.

Proceeds and payments related to borrowings under Williams’ revolving credit facility are reflected in the financing activities in the Consolidated Statement of Cash Flows on a gross basis.

Proceeds and payments related to borrowings under Williams’ commercial paper program are reflected in the financing activities in the Consolidated Statement of Cash Flows on a net basis, as the outstanding notes generally have maturity dates less than three months from the date of issuance.

(See Note 13 – Debt and Banking Arrangements.)

Notes (Continued)

Accounting Standards Issued But Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires disclosure of significant segment expenses and expanded interim disclosures.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted.

We do not expect adoption of ASU 2023-07 will have a material impact on our financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes:

Improvements to Income Tax Disclosures , which requires disclose of specific categories in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold.

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2023-09, Income Taxes:

Improvements to Income Tax Disclosures , which requires disclosure of specific categories in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold.

This ASU is effective for fiscal years beginning after December 15, 2024, and early adoption is permitted.

We do not expect adoption of ASU 2023-09 will have a material impact on our financial statements.

The adoption of ASU 2023-09 is not expected to have a material impact on the financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures , which requires public entities to disclose additional information in the notes to financial statements for certain types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, selling, general & administrative expenses, and research and development).

The amendments are effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 with early adoption permitted.

The impact of this standard is currently being evaluated.

Share Repurchase Program

In September 2021, our Board of Directors authorized a share repurchase program with a maximum dollar limit of $ 1.5 billion.

Repurchases may be made from time to time in the open market, by block purchases, in privately negotiated transactions, or in such other manner as determined by our management.

Our management will also determine the timing and amount of any repurchases based on market conditions and other factors.

The share repurchase program does not obligate us to acquire any particular amount of common stock, and it may be suspended or discontinued at any time.

In September 2021, Williams’ Board of Directors authorized a share repurchase program with a maximum dollar limit of $ 1.5 billion.

Repurchases may be made from time to time in the open market, by block purchases, in privately negotiated transactions, or in such other manner as determined by management.

Williams will also determine the timing and amount of any repurchases based on market conditions and other factors.

The share repurchase program does not obligate Williams to acquire any particular amount of common stock, and it may be suspended or discontinued at any time.

This share repurchase program does not have an expiration date.

There were $ 130 million, $ 9 million, and no repurchases under the program in 2023, 2022, and 2021, respectively, which are included in our Consolidated Statement of Changes in Equity.

Significant Risks and Uncertaintie s

We believe that the carrying value of certain of our property, plant, and equipment and intangible assets, notably certain acquired assets accounted for as business combinations between 2012 and 2014, may be in excess of current fair value.

However, the carrying value of these assets, in our judgment, continues to be recoverable.

It is reasonably possible that future strategic decisions, including transactions such as monetizing assets or contributing assets to new ventures with third parties, as well as unfavorable changes in expected producer activities, could impact our assumptions and ultimately result in impairments of these assets.

Such transactions or developments may also indicate that certain of our equity-method investments have experienced other-than-temporary declines in value, which could result in impairment.

There were $ 0 million , $ 130 million and $ 9 million of repurchases under the program in 2024, 2023, and 2022, respectively, which are included in the Consolidated Statement of Changes in Equity.

Cumulative repurchases to date under the program total $ 139 million.

Significant Risks and Uncertainties

Management believes that the carrying value of certain of Williams’ property, plant, and equipment and intangible assets, notably certain assets acquired by Williams accounted for as business combinations between 2012 and 2014, may be in excess of current fair value.

However, the carrying value of these assets, in management’s judgment, continues to be recoverable.

It is reasonably possible that future strategic decisions, including transactions such as monetizing assets or contributing assets to new ventures with third parties, as well as unfavorable changes in expected producer activities, could impact management’s assumptions and ultimately result in impairments of these assets.

Such transactions or developments may also indicate that certain Williams’ equity-method investments have experienced other-than-temporary declines in value, which could result in impairment.

Note 2 – Variable Interest Entities

Consolidated VIEs

As of December 31, 2023, we consolidate the following VIEs:

We own a 65 percent interest in the Northeast JV, a subsidiary that is a VIE due to certain of our voting rights being disproportionate to our obligation to absorb losses and substantially all of the Northeast JV’s activities being performed on our behalf.

We are the primary beneficiary because we have the power to direct the activities that most significantly impact the Northeast JV’s economic performance.

As of December 31, 2024, Williams consolidated the following VIEs:

Williams owns a 65 percent interest in the Northeast JV, a subsidiary that is a VIE due to certain voting rights being disproportionate to the obligation to absorb losses and substantially all of the Northeast JV’s activities being performed on Williams’ behalf.

Williams is the primary beneficiary because it has the power to direct the activities that most significantly impact the Northeast JV’s economic performance.

The Northeast JV provides midstream services for producers in the Marcellus Shale and Utica Shale regions.

Future expansion activity is expected to be funded with capital contributions from us and the other equity partner on a proportional basis.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

We own a 51 percent interest in Gulfstar One, a subsidiary that, due to certain risk-sharing provisions in its customer contracts, is a VIE.

Gulfstar One includes a proprietary floating-production system, Gulfstar FPS, and associated pipelines that provide production handling and gathering services in the eastern deepwater Gulf of Mexico.

We are the primary beneficiary because we have the power to direct the activities that most significantly impact Gulfstar One’s economic performance.

We own a 66 percent interest in Cardinal, a subsidiary that provides gathering services for the Utica Shale region and is a VIE due to certain risks shared with customers.

We are the primary beneficiary because we have the power to direct the activities that most significantly impact Cardinal’s economic performance.

In order to meet contractual gas gathering commitments, we may fund more than our proportional share of future expansion activity, which could ultimately impact relative ownership.

The following table presents amounts included in our Consolidated Balance Sheet that are only for the use or obligation of our consolidated VIEs:

Future expansion activity is expected to be funded with capital contributions from Williams and the other equity partner on a proportional basis.

Notes (Continued)

Williams owns a 51 percent interest in Gulfstar One, a subsidiary that, due to certain risk-sharing provisions in its customer contracts, is a VIE.

Gulfstar One includes a proprietary floating-production system, Gulfstar FPS, and associated pipelines that provide production handling and gathering services in the eastern deepwater Gulf of America.

Williams is the primary beneficiary because it has the power to direct the activities that most significantly impact Gulfstar One’s economic performance.

Williams owns a 66 percent interest in Cardinal, a subsidiary that provides gathering services for the Utica Shale region and is a VIE due to certain risks shared with customers.

Williams is the primary beneficiary because it has the power to direct the activities that most significantly impact Cardinal’s economic performance.

In order to meet contractual gas gathering commitments, Williams may fund more than its proportional share of future expansion activity, which could ultimately impact relative ownership.

The following table presents amounts included in the Consolidated Balance Sheet that are only for the use or obligation of the consolidated VIEs:

Assets (liabilities):

7 unchanged sentences

Accounts payable ( 57 ) ( 109 )

Accrued and other current liabilities ( 28 ) ( 34 )

Regulatory liabilities, deferred income, and other

Other current liabilities

( 29 ) ( 28 )

Regulatory liabilities, deferred income, and other ( 263 ) ( 268 )

Nonconsolidated VIEs

Targa Train 7

We own a 20 percent interest in Targa Train 7, which provides fractionation services at Mont Belvieu, Texas, and is a VIE due primarily to our limited participating rights as the minority equity holder.

At December 31, 2023, the carrying value of our investment in Targa Train 7 was $ 44 million.

Our maximum exposure to loss is limited to the carrying value of our investment.

Brazos Permian II

We own a 15 percent interest in Brazos Permian II, which provides gathering and processing services in the Delaware basin and is a VIE due primarily to our limited participating rights as the minority equity holder.

At December 31, 2023, the carrying value of our investment in Brazos Permian II was $ 27 million.

Our maximum exposure to loss is limited to the carrying value of our investment.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Williams owns certain equity-method investments that are VIEs due primarily to its limited participating rights as a minority equity holder.

Williams’ maximum exposure to loss is limited to the carrying value of these investments (included within Investments in the Consolidated Balance Sheet), which totaled $ 72 million at December 31, 2024.

Note 3 – Acquisitions and Divestitures

Gulf Coast Storage Acquisition

On January 3, 2024, we closed on the acquisition of 100 percent of a strategic portfolio of natural gas storage facilities and pipelines, located in Louisiana and Mississippi, from Hartree Partners LP (Gulf Coast Storage Acquisition) for $ 1.95 billion, subject to working capital and post-closing adjustments.

The purpose of this acquisition was to expand our natural gas storage footprint in the Gulf Coast region.

The Gulf Coast Storage Acquisition was funded with cash on hand and $ 100 million of deferred consideration that does not accrue interest and is payable one year from the acquisition date.

Acquisition-related costs for the Gulf Coast Storage Acquisition of $ 1 million are reported within our Transmission & Gulf of Mexico segment and included in Selling, general, and administrative expenses in our Consolidated Statement of Income during 2023.

We plan on accounting for the Gulf Coast Storage Acquisition as a business combination, which requires, among other things, that identifiable assets acquired and liabilities assumed be recognized at their acquisition date fair values.

The valuation techniques used consisted of the cost approach for property, plant, and equipment.

The following table presents the preliminary allocation of the acquisition date fair value of the major classes of the assets acquired, which will be included in our Transmission & Gulf of Mexico segment, and liabilities assumed at January 3, 2024.

Crowheart Acquisition

As of December 31, 2023, Williams had an agreement regarding certain crude oil and natural gas properties in the Wamsutter basin in Wyoming under which it owned a 75 percent undivided interest in each well’s working interest and proportionally consolidated its undivided interest.

On November 1, 2024, Williams closed on the acquisition of a third-party operator, Crowheart Energy, LLC, for $ 307 million cash, subject to working capital and post-closing adjustments (Crowheart Acquisition).

After closing on the acquisition, Williams owns more than a 90 percent working interest in each well.

The purpose of this acquisition was to consolidate Williams’ interests in the Wamsutter basin and further optimize development in the area to continue to supply its gathering and processing assets.

Assets acquired, acquisition-related costs incurred, and results of operations realized are included at Other.

Notes (Continued)

During the period from the acquisition date of November 1, 2024 to December 31, 2024, the additional interest acquired in the Crowheart Acquisition contributed Revenues of $ 20 million and Modified EBITDA (as defined in Note 19 – Segment Disclosures) of $ 7 million.

Williams accounted for the Crowheart Acquisition as a business combination, which requires, among other things, that identifiable assets acquired and liabilities assumed be recognized at their acquisition date fair values.

The following table presents the preliminary allocation of the acquisition date fair value of the major classes of the assets acquired and liabilities assumed at November 1, 2024.

The allocation is considered preliminary because the valuation work has not been completed due to the ongoing review of the valuation results and validation of significant inputs and assumptions.

Preliminary fair value measurements were made for certain acquired assets and liabilities, primarily property, plant, and equipment;

Preliminary fair value measurements were made for certain acquired assets and liabilities, primarily property, plant, and equipment, which utilized the income approach for proved developed producing reserves and the market approach for undeveloped reserves;

however, adjustments to those measurements may be made in subsequent periods, up to one year from the acquisition date, as new information related to facts and circumstances as of the acquisition date may be identified.

The fair value of accounts receivable acquired, included in Other current assets in the following table, equals contractual amounts receivable.

Cash and cash equivalents $ 94

7 unchanged sentences

Net assets acquired

Discovery Acquisition

As of December 31, 2023, Williams owned a 60 percent interest in Discovery, which it accounted for as an equity-method investment.

On August 1, 2024, Williams closed on the acquisition of the remaining 40 percent interest in Discovery, along with certain other assets, for $ 170 million cash, subject to working capital and post-closing adjustments (Discovery Acquisition).

As a result of acquiring this additional interest, Williams obtained control and subsequently consolidates Discovery.

The purpose of this acquisition was to expand Williams’ gathering, processing, and transportation presence in the Gulf of America region.

Assets acquired, acquisition-related costs incurred, and results of operations realized are included within Williams’ Transmission & Gulf of America segment.

During the period from the acquisition date of August 1, 2024 to December 31, 2024, the operations acquired in the Discovery Acquisition contributed Revenues of $ 144 million and Modified EBITDA of $ 42 million.

Acquisition-related costs for the Discovery Acquisition total $ 1 million and are included in Selling, general, and administrative expenses in the Williams Consolidated Statement of Income.

Williams accounted for the Discovery Acquisition as a business combination.

The book value of its existing equity-method investment prior to the acquisition date of August 1, 2024, was $ 381 million.

Williams recognized a $ 127 million gain on remeasuring its existing equity-method investment to fair value included in Other investing income (loss) – net in the Williams Consolidated Statement of Income during 2024, which is not included in the pro forma Discovery adjustments below.

Williams utilized the income approach to fair value its previous equity-method investment in Discovery.

Notes (Continued)

The following table presents the preliminary allocation of the acquisition date fair value of the major classes of the assets acquired and liabilities assumed at August 1, 2024.

The allocation is considered preliminary because the valuation work has not been completed due to the ongoing review of the valuation results and validation of significant inputs and assumptions.

Preliminary fair value measurements were made for certain acquired assets and liabilities, primarily property, plant, and equipment, which utilized the cost approach;

Cash and cash equivalents $ 22

Other current assets 19

Property, plant, and equipment – net 941

Other noncurrent assets 39

Total assets acquired

Current liabilities ( 40 )

Noncurrent liabilities

Total liabilities assumed ( 336 )

Net assets acquired $ 685

Gulf Coast Storage Acquisition

On January 3, 2024, Williams closed on the acquisition from Hartree Partners LP for $ 1.95 billion of 100 percent of a strategic portfolio of natural gas storage facilities and pipelines, located in Louisiana and Mississippi (Gulf Coast Storage Acquisition).

The purpose of this acquisition was to expand Williams’ natural gas storage footprint in the Gulf Coast region.

Assets acquired, acquisition-related costs incurred, and results of operations realized are included within Williams’ Transmission & Gulf of America segment.

The Gulf Coast Storage Acquisition was funded with cash on hand and $ 100 million of deferred consideration that did not accrue interest and was payable one year from the acquisition date.

The obligation is presented within Long-term debt due within one year in the Williams Consolidated Balance Sheet as of December 31, 2024, owed by Williams’ wholly owned subsidiary Williams Field Services Group, LLC.

On January 3, 2025, Williams paid the remaining $ 100 million of the Gulf Coast Storage Acquisition purchase price obligation.

During the period from the acquisition date of January 3, 2024 to December 31, 2024, the operations acquired in the Gulf Coast Storage Acquisition contributed Revenues of $ 228 million and Modified EBITDA of $ 160 million, which is impacted by acquisition-related costs.

Acquisition-related costs for the Gulf Coast Storage Acquisition total $ 15 million, including $ 14 million incurred in 2024, and are included in Selling, general, and administrative expenses in the Williams Consolidated Statement of Income.

Williams accounted for the Gulf Coast Storage Acquisition as a business combination.

The valuation technique used consisted of the cost approach for property, plant, and equipment.

Notes (Continued)

The following table presents the allocation of the acquisition date fair value of the major classes of the assets acquired and liabilities assumed at January 3, 2024.

Cash and cash equivalents $ 46

Other current assets 18

Property, plant, and equipment – net 2,035

Other noncurrent assets 2

Total assets acquired

Current liabilities ( 11 )

Noncurrent liabilities

Total liabilities assumed ( 118 )

Net assets acquired $ 1,983

DJ Basin Acquisitions

Cureton Acquisition

On November 30, 2023, we closed on the acquisition of 100 percent of Cureton Front Range, LLC (Cureton Acquisition), whose operations are located in the DJ Basin, for $ 546 million, subject to working capital and post-closing adjustments.

The purpose of this acquisition was to expand our gathering and processing footprint and create operational synergies for our operations in the DJ Basin.

On November 30, 2023, Williams closed on the acquisition of 100 percent of Cureton Front Range, LLC (Cureton Acquisition), whose operations are located in the DJ Basin, for $ 546 million.

The purpose of this acquisition was to expand Williams’ gathering and processing footprint and create operational synergies for its operations in the DJ Basin.

Assets acquired, acquisition-related costs incurred, and results of operations realized are included within Williams’ West segment.

The Cureton Acquisition was funded with cash on hand.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

During the period from the acquisition date of November 30, 2023 to December 31, 2023, the operations acquired in the Cureton Acquisition contributed Revenues of $ 35 million and Modified EBITDA (as defined in Note 18 – Segment Disclosures) of $ 7 million.

Acquisition-related costs for the Cureton Acquisition of $ 6 million are reported within our West segment and included in Selling, general, and administrative expenses in our Consolidated Statement of Income during 2023.

We accounted for the Cureton Acquisition as a business combination.

Acquisition-related costs for the Cureton Acquisition total $ 8 million, including $ 6 million incurred in 2023, and are included in Selling, general, and administrative expenses in the Williams Consolidated Statement of Income.

Williams accounted for the Cureton Acquisition as a business combination.

The valuation techniques used consisted of the cost approach for property, plant, and equipment and the income approach for valuation of other intangible assets.

The following table presents the preliminary allocation of the acquisition date fair value of the major classes of the assets acquired, which are presented in our West segment, and liabilities assumed at November 30, 2023.

The allocation is considered preliminary because the valuation work has not been completed due to the ongoing review of the valuation results and validation of significant inputs and assumptions.

Preliminary fair value measurements were made for certain acquired assets and liabilities, primarily property, plant, and equipment and other intangible assets;

The fair value of accounts receivable acquired, included in Other current assets in the following table, equals contractual amounts receivable.

Notes (Continued)

The following table presents the allocation of the acquisition date fair value of the major classes of the assets acquired and liabilities assumed at November 30, 2023.

Cash and cash equivalents $ 6

10 unchanged sentences

Net assets acquired $ 546

Other intangible assets recognized in the Cureton Acquisition are related to contractual customer relationships from gas gathering and processing agreements with our customers.

Other intangible assets recognized in the Cureton Acquisition are related to contractual customer relationships from gas gathering and processing agreements with customers.

The basis for determining the value of these intangible assets is estimated future net cash flows to be derived from acquired contractual customer relationships discounted using a risk-adjusted discount rate.

These intangible assets are being amortized on a straight-line basis over an initial period of 20 years which represents the term over which the contractual customer relationships are expected to contribute to our cash flows.

Approximately 24 percent of the expected future revenues from these contractual customer relationships are impacted by our ability and intent to renew or renegotiate existing customer contracts.

We expense costs incurred to renew or extend the terms of our gas gathering contracts with customers.

Approximately 24 percent of the expected future revenues from these contractual customer relationships are impacted by Williams’ ability and intent to renew or renegotiate existing customer contracts.

Williams expenses costs incurred to renew or extend the terms of its gas gathering contracts with customers.

Based on the estimated future revenues during the current contract periods (as estimated at the time of the acquisition), the weighted-average period prior to the next renewal or extension of the existing contractual customer relationships is approximately 10 years.

See Note 11 – Goodwill and Other Intangible Assets.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

RMM Acquisition

As of December 31, 2022, we owned a 50 percent interest in RMM which we accounted for as an equity-method investment.

On November 30, 2023, we closed on the acquisition of the remaining 50 percent interest in RMM (RMM Acquisition) for $ 704 million.

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

The purpose of this acquisition was to expand our gathering and processing footprint and create operational synergies for our operations in the DJ Basin.

Substantially all of the RMM purchase price is not due to the seller until the first quarter of 2025, does not accrue interest until the fourth quarter of 2024, and may be repaid early without penalty.

It was recorded as a deferred consideration obligation at fair value using an income approach, which resulted in a discount to the contractual amount due which will be imputed as interest expense over the term of the obligation.

The obligation is presented within long-term debt owed by our wholly owned subsidiary Williams Rocky Mountain Midstream Holdings LLC.

As of December 31, 2022, Williams owned a 50 percent interest in RMM which it accounted for as an equity-method investment.

On November 30, 2023, Williams closed on the acquisition of the remaining 50 percent interest in RMM (RMM Acquisition) for $ 704 million.

As a result of acquiring this additional interest, Williams obtained control and subsequently consolidates RMM.

The purpose of this acquisition was to expand Williams’ gathering and processing footprint and create operational synergies for its operations in the DJ Basin.

Assets acquired and results of operations realized are included within Williams’ West segment.

Substantially all of the RMM purchase price was not due to the seller until the first quarter of 2025, would not accrue interest until November 2, 2024, and could be repaid early without penalty.

It was recorded as a deferred consideration obligation at fair value using an income approach, which resulted in a discount to the contractual amount due which was imputed as interest expense over the term of the obligation.

On November 1, 2024, Williams paid the remaining $ 651 million of the RMM purchase price obligation.

During the period from the acquisition date of November 30, 2023 to December 31, 2023, RMM contributed Revenues of $ 53 million and Modified EBITDA of $ 12 million.

We accounted for the RMM Acquisition as a business combination.

The book value of our existing equity-method investment prior to the acquisition date of November 30, 2023 was $ 406 million.

We recognized a $ 30 million gain on remeasuring our existing equity-method investment to fair value included in Other investing income (loss) – net in our Consolidated Statement of Income during 2023.

The valuation techniques used consisted of the income approach for our previous equity-method investment in RMM and the valuation of other intangible assets, and the cost approach for property, plant, and equipment.

The net assets acquired primarily reflect the noncash consideration transferred, which includes the fair value of both our previous equity-method investment and the deferred consideration obligation.

The allocation is considered preliminary because the valuation work has not been completed due to the ongoing review of the valuation results and validation of significant inputs and assumptions.

Preliminary fair value measurements were made for certain acquired assets and liabilities, primarily property, plant, and equipment and other intangible assets;

The fair value of accounts receivable acquired, included in Other current assets in the following table, equals contractual amounts receivable.

Williams accounted for the RMM Acquisition as a business combination.

The book value of Williams’ existing equity-method investment prior to the acquisition date of November 30, 2023, was $ 406 million.

Williams recognized a $ 30 million gain on remeasuring its existing equity-method investment to fair value included in Other investing income (loss) – net in the Williams Consolidated Statement of Income during the fourth quarter of 2023,

Notes (Continued)

which is not included in the pro forma DJ Basin adjustments below.

The valuation techniques used consisted of the income approach for Williams’ previous equity-method investment in RMM and the valuation of other intangible assets, and the cost approach for property, plant, and equipment.

The following table presents the allocation of the acquisition date fair value of the major classes of the assets acquired and liabilities assumed at November 30, 2023.

The net assets acquired primarily reflect the noncash consideration transferred, which includes the fair value of both Williams’ previous equity-method investment and the deferred consideration obligation.

Cash and cash equivalents $ 28

11 unchanged sentences

Net assets acquired $ 1,076

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Goodwill recognized in the RMM Acquisition relates primarily to enhancing and diversifying our basin positions as well as delivering operational synergies, including increasing volumes on our existing processing facilities and increasing revenues on our NGL transportation, fractionation, and storage assets, and is reported within our West segment.

Goodwill recognized in the RMM Acquisition relates primarily to enhancing and diversifying Williams’ basin positions as well as delivering operational synergies, including increasing volumes on its existing processing facilities and increasing revenues on its NGL transportation, fractionation, and storage assets, and is reported within Williams’ West segment.

Substantially all of the goodwill is deductible for tax purposes.

Other intangible assets recognized in the RMM Acquisition are related to contractual customer relationships from gas gathering and processing agreements with our customers.

Other intangible assets recognized in the RMM Acquisition are related to contractual customer relationships from gas gathering and processing agreements with customers.

Approximately 18 percent of the expected future revenues from these contractual customer relationships are impacted by our ability and intent to renew or renegotiate existing customer contracts.

We expense costs incurred to renew or extend the terms of our gas gathering contracts with customers.

Approximately 18 percent of the expected future revenues from these contractual customer relationships are impacted by Williams’ ability and intent to renew or renegotiate existing customer contracts.

Williams expenses costs incurred to renew or extend the terms of its gas gathering contracts with customers.

1 unchanged sentence

MountainWest Acquisition

On February 14, 2023, we closed on the acquisition of 100 percent of MountainWest, which includes FERC-regulated interstate natural gas pipeline systems and natural gas storage capacity (MountainWest Acquisition), for $ 1.08 billion of cash, funded with available sources of short-term liquidity, and retaining $ 430 million outstanding principal amount of MountainWest long-term debt.

For 2023, $ 1.024 billion is presented in Purchases of businesses, net of cash acquired in our Consolidated Statement of Cash Flows reflecting the cash purchase price, reduced for post-closing adjustments and the cash acquired as presented in the purchase price allocation.

The purpose of the MountainWest Acquisition was to expand our existing transmission and storage infrastructure footprint into major markets in Utah, Wyoming, and Colorado.

On February 14, 2023, Williams closed on the acquisition of 100 percent of MountainWest, which includes FERC-regulated interstate natural gas pipeline systems and natural gas storage capacity (MountainWest Acquisition), for $ 1.08 billion of cash, funded with available sources of short-term liquidity, and retaining $ 430 million outstanding principal amount of MountainWest long-term debt.

For 2023, $ 1.024 billion is presented in Purchases of businesses, net of cash acquired in the Williams Consolidated Statement of Cash Flows reflecting the cash purchase price, reduced for post-closing adjustments and the cash acquired as presented in the purchase price

Notes (Continued)

The purpose of the MountainWest Acquisition was to expand Williams’ existing transmission and storage infrastructure footprint into major markets in Utah, Wyoming, and Colorado.

Assets acquired, acquisition-related costs incurred, and results of operations realized are included within Williams’ Transmission & Gulf of America segment.

During the period from the acquisition date of February 14, 2023 to December 31, 2023, the operations acquired in the MountainWest Acquisition contributed Revenues of $ 225 million and Modified EBITDA of $ 122 million, which includes $ 27 million of transition-related costs.

Acquisition-related costs for the MountainWest Acquisition of $ 16 million are reported within our Transmission & Gulf of Mexico segment and included in Selling, general, and administrative expenses in our Consolidated Statement of Income during 2023.

We accounted for the MountainWest Acquisition as a business combination.

Acquisition-related costs for the MountainWest Acquisition total $ 18 million, including $ 16 million incurred in 2023, and are included in Selling, general, and administrative expenses in the Williams Consolidated Statement of Income.

Williams accounted for the MountainWest Acquisition as a business combination.

The valuation techniques used consisted of the cost approach for nonregulated property, plant, and equipment, as well as the market approach for the assumed long-term debt consistent with the valuation technique discussed in Note 16 – Fair Value Measurements, Guarantees, and Concentration of Credit Risk.

2 unchanged sentences

MountainWest’s expected return on rate base is consistent with expected returns of similarly situated assets, resulting in carryover basis of these assets and liabilities equaling their fair value.

The following table presents the preliminary allocation of the acquisition date fair value of the major classes of the assets acquired, which are presented in our Transmission & Gulf of Mexico segment, and liabilities assumed at February 14, 2023.

The following table presents the allocation of the acquisition date fair value of the major classes of the assets acquired and liabilities assumed at February 14, 2023.

The fair value of accounts receivable acquired equals contractual amounts receivable.

After the March 31, 2023, financial statements were issued, we identified adjustments to the preliminary purchase price allocation, primarily resulting in an increase of $ 19 million in trade accounts and other receivables and decreases of $ 73 million in property, plant, and equipment and $ 60 million in other noncurrent liabilities.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Cash and cash equivalents $ 23

6 unchanged sentences

Current liabilities ( 47 )

Long-term debt (Note 12)

Long-term debt ( 365 )

Other noncurrent liabilities ( 95 )

3 unchanged sentences

Net assets acquired $ 1,047

Goodwill recognized in the MountainWest Acquisition relates primarily to enhancing and diversifying our basin positions and the long-term value associated with rate regulated businesses and is reported within our Transmission & Gulf of Mexico segment.

Goodwill recognized in the MountainWest Acquisition relates primarily to enhancing and diversifying Williams’ basin positions and the long-term value associated with rate regulated businesses and is reported within its Transmission & Gulf of America segment.

Substantially all of the goodwill is deductible for tax purposes.

Trace Acquisition

On April 29, 2022, we closed on the acquisition of 100 percent of Gemini Arklatex, LLC through which we acquired the Haynesville Shale region gas gathering and related assets of Trace Midstream for $ 972 million of cash funded with cash on hand and proceeds from issuance of commercial paper (Trace Acquisition).

The purpose of the Trace Acquisition was to expand our footprint into the east Texas area of the Haynesville Shale region, increasing in-basin scale in one of the largest growth basins in the country.

On April 29, 2022, Williams closed on the acquisition of 100 percent of Gemini Arklatex, LLC through which it acquired the Haynesville Shale region gas gathering and related assets of Trace Midstream for $ 972 million of cash

Notes (Continued)

funded with cash on hand and proceeds from issuance of commercial paper (Trace Acquisition).

The purpose of the Trace Acquisition was to expand Williams’ footprint into the east Texas area of the Haynesville Shale region, increasing in-basin scale in one of the largest growth basins in the country.

Assets acquired, acquisition-related costs incurred, and results of operations realized are included within Williams’ West segment.

During the period from the acquisition date of April 29, 2022 to December 31, 2022, the operations acquired in the Trace Acquisition contributed Revenues of $ 148 million and Modified EBITDA of $ 73 million.

Acquisition-related costs for the Trace Acquisition of $ 8 million are reported within our West segment and were included in Selling, general, and administrative expenses in our Consolidated Statement of Income during 2022.

We accounted for the Trace Acquisition as a business combination.

The following table presents the allocation of the acquisition date fair value of the major classes of the assets acquired, which are presented in our West segment, and liabilities assumed at April 29, 2022.

The fair value of accounts receivable acquired equals contractual amounts receivable.

Acquisition-related costs for the Trace Acquisition of $ 8 million were included in Selling, general, and administrative expenses in the Williams Consolidated Statement of Income during 2022.

Williams accounted for the Trace Acquisition as a business combination.

The following table presents the allocation of the acquisition date fair value of the major classes of the assets acquired and liabilities assumed at April 29, 2022.

The valuation techniques used consisted of the income approach for valuation of intangible assets and the cost approach for property, plant, and equipment.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Cash and cash equivalents $ 39

5 unchanged sentences

Accounts payable ( 12 )

Accrued and other current liabilities ( 5 )

Other current liabilities ( 5 )

Other noncurrent liabilities ( 8 )

1 unchanged sentence

Net assets acquired $ 972

Other intangible assets recognized in the Trace Acquisition are related to contractual customer relationships from gas gathering agreements with our customers.

Other intangible assets recognized in the Trace Acquisition are related to contractual customer relationships from gas gathering agreements with customers.

Approximately 2 percent of the expected future revenues from these contractual customer relationships are impacted by our ability and intent to renew or renegotiate existing customer contracts.

We expense costs incurred to renew or extend the terms of our gas gathering contracts with customers.

Approximately 2 percent of the expected future revenues from these contractual customer relationships are impacted by Williams’ ability and intent to renew or renegotiate existing customer contracts.

Williams expenses costs incurred to renew or extend the terms of its gas gathering contracts with customers.

See Note 11 – Goodwill and Other Intangible Assets.

Sequent Acquisition

On July 1, 2021, we closed on the acquisition of 100 percent of Sequent Energy Management, L.P.

and Sequent Energy Canada, Corp (Sequent Acquisition).

Total consideration for this acquisition was $ 159 million, which included $ 109 million related to working capital.

Operations acquired in the Sequent Acquisition focus on risk management and the marketing, trading, storage, and transportation of natural gas for a diverse set of natural gas and electric utilities, municipalities, power generators, and producers, as well as moving gas to markets through transportation and storage agreements on strategically positioned assets, including our Transco system.

The purpose of the Sequent Acquisition was to expand our natural gas marketing activities as well as optimize our pipeline and storage capabilities with expansions into new markets to reach incremental gas-fired power generation, liquified natural gas exports, and future renewable natural gas and other emerging opportunities.

During the period from the acquisition date of July 1, 2021 to December 31, 2021, results for the operations acquired in the Sequent Acquisition included net Product sales of $( 43 ) million (including $ 80 million of purchases from affiliates), Net gain (loss) from commodity derivatives of $( 43 ) million, and unfavorable Modified EBITDA of $ 112 million.

Both the Revenues and Modified EBITDA amounts reflect a net unrealized loss from commodity derivatives in Net gain (loss) from commodity derivatives of $( 109 ) million for the period.

Acquisition-related costs for the Sequent Acquisition for the period from the acquisition date of July 1, 2021 to December 31, 2021 of $ 5 million are reported within our Gas & NGL Marketing Services segment and were included in Selling, general, and administrative expenses in our Consolidated Statement of Income for the year ended December 31, 2021.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

We accounted for the Sequent Acquisition as a business combination.

The following table presents the allocation of the acquisition date fair value of the major classes of the assets acquired, which are presented in our Gas & NGL Marketing Services segment, and liabilities assumed at July 1, 2021.

The fair value of accounts receivable acquired equals contractual amounts receivable.

The fair value of the intangible assets was measured using an income approach.

The fair value of the inventory acquired was based on the market price of the natural gas in underground storage at the acquisition date.

See Note 15 – Fair Value Measurements, Guarantees, and Concentration of Credit Risk for the valuation techniques used to measure fair value of commodity derivative assets and liabilities.

Cash and cash equivalents $ 8

Trade accounts and other receivables 498

Inventories 121

Derivative assets 57

Other current assets and deferred charges 4

Property, plant, and equipment – net 5

Intangible assets – net of accumulated amortization 306

Other noncurrent assets 3

Commodity derivatives included in other noncurrent assets 49

Total assets acquired $ 1,051

Accounts payable $ ( 514 )

Derivative liabilities ( 116 )

Accrued and other current liabilities ( 46 )

Other noncurrent liabilities ( 1 )

Commodity derivatives included in other noncurrent liabilities ( 215 )

Total liabilities assumed $ ( 892 )

Net assets acquired $ 159

Accounts receivable and accounts payable

The operations acquired in the Sequent Acquisition provide services to retail and wholesale gas marketers, utility companies, upstream producers, and industrial customers.

See Note 1 – General, Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies for our policy regarding netting receivables and payables.

Other intangible assets

Other intangible assets are primarily related to transportation and storage capacity contracts.

The basis for determining the value of these intangible assets was estimated future net cash flows to be derived from acquired transportation and storage capacity contracts that provide future economic benefits due to their market location, discounted using an industry weighted-average cost of capital.

This intangible asset is being amortized based on the expected benefit period over which the underlying contracts are expected to contribute to our cash flows ranging from 1 year to 8 years.

As a result, a significant portion of the amortization will be recognized within the first few years of this range.

See Note 10 – Goodwill and Other Intangible Assets.

Commodity derivatives

We are exposed to commodity price risk.

To manage this volatility, we use various contracts in our marketing and trading activities that generally meet the definition of derivatives.

We enter into commodity derivatives to economically hedge exposures to natural gas and retain exposure to price changes that can, in a volatile energy market, be material and can adversely affect our results of operations;

see Note 1 – General, Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies for our accounting policy for commodity derivatives.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Supplemental Pro Forma

The following pro forma Revenues and Net income (loss) attributable to The Williams Companies, Inc.

for 2023, 2022, and 2021, are presented as if the Gulf Coast Storage Acquisition had been completed on January 1, 2023, the DJ Basin Acquisitions and MountainWest Acquisition had been completed on January 1, 2022, the Trace Acquisition had been completed on January 1, 2021, and the Sequent Acquisition had been completed on January 1, 2020.

for 2024, 2023, and 2022, are presented as if the Crowheart Acquisition, Discovery Acquisition, and Gulf Coast Storage Acquisition had been completed on January 1, 2023, the DJ Basin Acquisitions and MountainWest Acquisition had been completed on January 1, 2022, and the Trace Acquisition had been completed on January 1, 2021.

These pro forma amounts are not necessarily indicative of what the actual results would have been if the acquisitions had in fact occurred on the dates or for the periods indicated, nor do they purport to project Revenues or Net income (loss) attributable to The Williams Companies, Inc.

for any future periods or as of any date.

These amounts do not give effect to any potential cost savings, operating synergies, or revenue enhancements to result from the transactions or the potential costs to achieve these cost savings, operating synergies, and revenue enhancements.

These amounts do not give

Notes (Continued)

effect to any potential cost savings, operating synergies, or revenue enhancements to result from the transactions or the potential costs to achieve these cost savings, operating synergies, and revenue enhancements.

Year Ended December 31, 2024

As Reported Pro Forma Gulf Coast Storage

Pro Forma DJ Basin (1)

Pro Forma MountainWest (1)

As Reported Pro Forma Crowheart (1)

Pro Forma Discovery (1)

Pro Forma Combined

3 unchanged sentences

Year Ended December 31, 2023

As Reported Pro Forma DJ Basin

Pro Forma MountainWest Pro Forma Trace (1)

As Reported Pro Forma Crowheart

Pro Forma Discovery

Pro Forma Gulf Coast Storage

Pro Forma DJ Basin (1)

Pro Forma MountainWest (1)

Pro Forma Combined

3 unchanged sentences

Year Ended December 31, 2022

As Reported Pro Forma Trace Pro Forma Sequent (1)

As Reported Pro Forma DJ Basin

Pro Forma MountainWest

Pro Forma Trace (1)

Pro Forma Combined

4 unchanged sentences

NorTex Asset Purchase

On August 31, 2022, we purchased a group of assets in north Texas, primarily natural gas storage facilities and pipelines, from NorTex Midstream Holdings, LLC (NorTex Asset Purchase) for approximately $ 424 million.

These assets are included in our Transmission & Gulf of Mexico segment.

On August 31, 2022, Williams purchased a group of assets in north Texas, primarily natural gas storage facilities and pipelines, from NorTex Midstream Holdings, LLC (NorTex Asset Purchase) for approximately $ 424 million.

These assets are included in Williams’ Transmission & Gulf of America segment.

Sale of Certain Gulf Coast Liquids Pipelines

On September 29, 2023, we completed the sale of various petrochemical and feedstock pipelines and associated contracts in the Gulf Coast region for $ 348 million.

As a result of this sale, we recorded a gain of $ 129 million in 2023 in our Transmission & Gulf of Mexico segment.

The gain is reflected in Gain on sale of business in our

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Consolidated Statement of Income.

On September 29, 2023, Williams completed the sale of various petrochemical and feedstock pipelines and associated contracts in the Gulf Coast region for $ 348 million.

As a result of this sale, Williams recorded a gain of $ 129 million in 2023 in its Transmission & Gulf of America segment.

The gain is reflected in Gain on sale of business in the Williams Consolidated Statement of Income.

The results of operations for this disposal group, excluding the gain noted, were not significant for the reporting periods.

1 unchanged sentence

Transactions with Equity-Method Investees

We have costs and expenses associated with our equity-method investees of $ 776 million, $ 1.346 billion, and $ 948 million for 2023, 2022, and 2021, respectively in our Consolidated Statement of Income.

Substantially all of these expenses are included in Product costs .

We also have revenue from our equity-method investees of $ 5 million, $ 76 million, and $ 46 million for 2023, 2022, and 2021, respectively.

In addition, w e have $ 2 million and $ 17 million included in Trade accounts and other receivables and $ 33 million and $ 87 million included in Accounts payable in our Consolidated Balance Sheet with our equity-method investees at December 31, 2023 and 2022, respectively.

We have operating agreements with certain equity-method investees.

These operating agreements typically provide for reimbursement or payment to us for certain direct operational payroll and employee benefit costs, materials, supplies, and other charges and also for management services.

Williams has costs and expenses associated with its equity-method investees of $ 266 million, $ 776 million, and $ 1.3 billion for 2024, 2023, and 2022, respectively in its Consolidated Statement of Income.

Substantially all of

Notes (Continued)

these expenses are included in Product costs .

Williams also has revenue from its equity-method investees of $ 2 million, $ 5 million, and $ 76 million for 2024, 2023, and 2022, respectively.

In addition, Williams has $ 1 million and $ 2 million included in Trade accounts and other receivables and $ 19 million and $ 33 million included in Accounts payable in its Consolidated Balance Sheet with its equity-method investees at December 31, 2024 and 2023, respectively.

Williams has operating agreements with certain equity-method investees.

These operating agreements typically provide for reimbursement or payment to Williams for certain direct operational payroll and employee benefit costs, materials, supplies, and other charges and also for management services.

The total charges to equity-method investees for these fees are $ 52 million, $ 64 million, and $ 65 million for 2024, 2023, and 2022, respectively.

Board of Directors

Two members of our Board of Directors are also executive officers at certain of our counterparties.

We recorded $ 90 million and $ 180 million in Product sales and $ 25 million and $ 86 million in Product costs in our Consolidated Statement of Income from these companies for the purchase and sale of natural gas for 2023 and 2022, respectively.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Two members of Williams’ Board of Directors are also executive officers at certain of its counterparties.

Williams recorded $ 59 million, $ 90 million, and $ 180 million in Product sales and $ 40 million, $ 25 million, and $ 86 million in Product costs in its Consolidated Statement of Income from these companies for the purchase and sale of natural gas for 2024, 2023, and 2022, respectively.

Transco and NWP Affiliate Transactions

Benefit Plans

Transco and NWP do not have employees.

Certain of the costs charged to them by Williams associated with employees who directly support them are described below.

Additionally, allocated corporate expenses from Williams also include amounts related to these same employee benefits, which are not included in the amounts presented immediately below.

Pension and Other Postretirement Benefit Plans

Williams’ pension and other postretirement benefit plans are single-employer plans.

However, Transco and NWP follow multiemployer plan accounting whereby the amount charged to them and thus paid by them, is based on their share of net periodic benefit cost (see Note 7 – Employee Benefit Plans).

Pension costs charged to Transco by Williams were $ 1 million, $ 2 million, and $ 4 million for 2024, 2023, and 2022, respectively.

NWP received pension credits from Williams of $ 1 million in 2024, $ 0 million in 2023, and pension charges of $ 1 million in 2022.

Williams makes annual cash contributions to the pension plans, based on annual actuarial estimates, which Transco recovers through rates that are set through periodic general rate filings.

Effective with Transco’s Docket No.

RP18-1126 rate case settlement, any amounts of annual contributions that fall below a threshold are recorded as adjustments to income and refunded through future rate adjustments.

The amounts of deferred pension collections recorded as regulatory liabilities at December 31, 2024 and 2023 were $ 30 million and $ 26 million, respectively.

Also effective with Transco’s Docket No.

RP18-1126 rate case settlement, the pension regulatory liability as of March 1, 2019 was amortized over a five -year period, and the amortization was completed in February 2024.

Transco recognized other postretirement benefit income of $ 8 million, $ 6 million, and $ 5 million for 2024, 2023, and 2022, respectively, while NWP recognized other postretirement benefit income of $ 1 million, $ 0 million, and $ 1 million, respectively for the same periods.

These credits were recorded as regulatory liabilities.

Transco and NWP have been allowed by rate case settlements to collect or refund in future rates any differences between the actuarially determined costs and amounts currently being recovered in rates related to other postretirement benefits.

Any differences between the annual actuarially determined cost and amounts currently being recovered in rates are recorded as regulatory assets or liabilities and collected or refunded through future rate

Notes (Continued)

The amounts of other postretirement benefits costs deferred as regulatory liabilities at December 31, 2024 and 2023 are $ 31 million and $ 31 million, for Transco respectively, and $ 43 million and $ 42 million, for NWP respectively.

Effective with the Docket No.

RP18-1126 rate case settlement, Transco’s other postretirement benefits regulatory liability as of March 1, 2019 was amortized over a period of approximately five years, and the amortization was completed in July 2024.

Defined Contribution Plan

Williams maintains a defined contribution plan for substantially all of its employees.

Williams charged Transco compensation expense of $ 13 million, $ 12 million, and $ 11 million in 2024, 2023, and 2022, respectively, and charged NWP compensation expense of $ 3 million, $ 3 million, and $ 3 million in 2024, 2023, and 2022, respectively, for Williams’ company contributions to this plan.

Employee Stock-Based Compensation Plan Information (see Note 15 – Equity-Based Compensation)

Williams currently bills Transco and NWP directly for compensation expense related to stock-based compensation awards based on the fair value of the awards.

Transco and NWP are also billed for their proportionate share of Williams’ and other affiliates’ stock-based compensation expense through various allocation processes.

Total stock-based compensation expense for the years ended December 31, 2024, 2023, and 2022 was $ 6 million, $ 6 million, and $ 6 million, for Transco respectively, and $ 2 million, $ 2 million, and $ 1 million, for NWP respectively.

Cash Management Program

Transco and NWP are participants in Williams’ cash management program, and thus make advances to and receive advances from Williams.

At December 31, 2024 and 2023, Transco’s advances to Williams totaled approximately $ 638 million and $ 1.4 billion, respectively.

These advances are represented by demand notes and are classified as Trade accounts and other receivables - Advances to affiliate in the Balance Sheet.

NWP’s advances from Williams totaled approximately $ 26 million at December 31, 2024.

These advances from Williams are classified as Payables - Advances from affiliate .

Advances to Williams from NWP totaled approximately $ 158 million at December 31, 2023.

These advances are represented by demand notes and are classified as Trade accounts and other receivables - Advances to affiliate in the Balance Sheet.

Advances are stated at the historical carrying amounts.

Interest expense and income are recognized when earned and the collectability is reasonably assured.

The interest rate on these intercompany demand notes is based upon the daily overnight investment rate paid on Williams’ excess cash at the end of each month, which was approximately 4 percent at December 31, 2024.

The net interest income from these advances was $ 51 million, $ 81 million, and $ 31 million during years ended December 31, 2024, 2023, and 2022, for Transco respectively, and $ 5 million, $ 8 million, and $ 5 million for the years ended December 31, 2024, 2023, and 2022 for NWP respectively.

Such interest income is included in Interest income in the Statement of Net Income for Transco and Other income (expense) – net in the Statement of Net Income for NWP.

Other Affiliate Transactions

Included in Transco’s Total revenues in the Statement of Net Income for 2024, 2023, and 2022 are revenues received from affiliates of $ 76 million, $ 56 million, and $ 89 million, respectively.

Included in Transco’s Natural gas product costs in the Statement of Net Income for 2024, 2023, and 2022 are costs of gas purchased from affiliates of $ 5 million, $ 7 million, and $ 18 million, respectively.

All gas purchases are made at market or contract prices.

Notes (Continued)

Services necessary to operate Transco and NWP are provided by Williams and certain affiliates of Williams.

Transco and NWP reimburse Williams and its affiliates for all direct and indirect expenses incurred or payments made (including salary, bonus, incentive compensation, and benefits) in connection with these services.

Employees of Williams also provide general, administrative, and management services, and Transco and NWP are charged for certain administrative expenses incurred by Williams.

These charges are either directly assigned or allocated.

Allocated charges are specific or general.

Specific allocations are based on a relationship with the delivery of services and general allocations are based on a three-factor formula, which considers revenues;

property, plant, and equipment;

In management’s estimation, the allocation methodologies used are reasonable and result in a reasonable allocation of costs of doing business incurred by Williams.

For the years ended December 31, 2024, 2023, and 2022, Transco has recorded $ 344 million, $ 324 million, and $ 345 million, respectively, and NWP has recorded $ 91 million, $ 86 million, and $ 88 million, respectively, for these service expenses, which are primarily included in Operating and maintenance expenses and Selling, general, and administrative expenses in the Statement of Net Income.

Transco provides services to certain of its affiliates.

Transco recorded reductions in operating expenses for services provided to and reimbursed by affiliates of $ 6 million, $ 14 million, and $ 10 million for the years ended December 31, 2024, 2023, and 2022, respectively.

During January 2025, Transco and NWP declared and paid cash distributions of $ 246 million and $ 24 million, respectively, to Williams, and Williams made a cash contribution to NWP of $ 85 million.

Notes (Continued)

Note 5 – Revenue Recognition

Revenue by Category

The following table presents our revenue disaggregated by major service line:

Regulated Interstate Transportation

Gulf of Mexico Midstream

Midstream West Midstream Gas & NGL Marketing Services Other Eliminations Total

The following table presents Williams’ revenue disaggregated by major service line:

Transmission & Gulf of America Northeast G&P West Gas & NGL Marketing Services Other Eliminations Total

Revenues from contracts with customers:

25 unchanged sentences

Total revenues $ 4,150 $ 2,033 $ 2,135 $ 2,878 $ 506 $ ( 795 ) $ 10,907

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Regulated Interstate Transportation

Gulf of Mexico Midstream

Midstream West Midstream Gas & NGL Marketing Services Other Eliminations Total

Notes (Continued)

Transmission & Gulf of America Northeast G&P West Gas & NGL Marketing Services Other Eliminations Total

Revenues from contracts with customers:

13 unchanged sentences

______________________________

(1) Revenues not derived from contracts with customers primarily consist of physical product sales related to commodity derivative contracts, realized and unrealized gains and losses associated with our commodity derivative contracts, which are reported in Net gain (loss) from commodity derivatives in our Consolidated Statement of Income, management fees that we receive for certain services we provide to operated equity-method investments, and leasing revenues associated with our headquarters building.

(1) Revenues not derived from contracts with customers primarily consist of physical product sales related to commodity derivative contracts, realized and unrealized gains and losses associated with Williams’ commodity derivative contracts, which are reported in Net gain (loss) from commodity derivatives in the Consolidated Statement of Income, management fees received for certain services provided to operated equity-method investments, and leasing revenues associated with the Williams headquarters building.

(2) Other adjustments reflect certain costs of Gas & NGL Marketing Services’ risk management activities.

As we are acting as agent for natural gas marketing customers or engage in energy trading activities, the resulting revenues are presented net of the related costs of those activities in our Consolidated Statement of Income.

(3) Certain contractual reimbursements of operating and maintenance costs totaling $ 186 million and $ 171 million for 2022 and 2021, respectively, previously included in Other are now presented in Monetary consideration to conform to the current presentation.

As Williams is acting as agent for natural gas marketing customers or engages in energy trading activities, the resulting revenues are presented net of the related costs of those activities in the Consolidated Statement of Income.

For Transco and NWP, revenue disaggregation by major service line includes Natural gas transportation , Natural gas storage , Natural gas product sales , and Other , which are separately presented on their Statements of Net Income.

Contract Assets

The following table presents a reconciliation of our contract assets:

The following tables present a reconciliation of contract assets:

Year Ended December 31,

2 unchanged sentences

Minimum volume commitments invoiced ( 144 ) ( 176 )

Contract assets acquired 36 —

Balance at end of year $ 98 $ 36

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Notes (Continued)

Year Ended December 31,

Balance at beginning of year $ — $ —

Revenue recognized in excess of amounts invoiced 10 —

Balance at end of year $ 10 $ —

Year Ended December 31,

Balance at beginning of year $ 17 $ 13

Revenue recognized in excess of amounts invoiced 6 6

Amortization of contract assets ( 2 ) ( 2 )

Balance at end of year $ 21 $ 17

Contract Liabilities

The following table presents a reconciliation of our contract liabilities:

The following tables present a reconciliation of contract liabilities:

Year Ended December 31,

5 unchanged sentences

Balance at end of year $ 1,046 $ 1,081

Year Ended December 31,

Balance at beginning of year $ 184 $ 194

Recognized in revenue ( 11 ) ( 10 )

Balance at end of year $ 173 $ 184

Notes (Continued)

Year Ended December 31,

Balance at beginning of year $ 2 $ 3

Recognized in revenue ( 2 ) ( 1 )

Balance at end of year $ — $ 2

Remaining Performance Obligations

Remaining performance obligations primarily include reservation charges on contracted capacity for our gas pipeline firm transportation contracts with customers, storage capacity contracts, long-term contracts containing MVC associated with our midstream businesses, and fixed payments associated with offshore production handling.

For our interstate natural gas pipeline businesses, remaining performance obligations reflect the rates for such services in our current FERC tariffs for the life of the related contracts;

Remaining performance obligations primarily include reservation charges on contracted capacity for Williams’ gas pipeline firm transportation contracts with customers, storage capacity contracts, long-term contracts containing MVC associated with midstream businesses, and fixed payments associated with offshore production handling.

For Williams’ interstate natural gas pipeline businesses, including Transco and NWP, remaining performance obligations reflect the rates for such services in its current effective FERC tariffs for the life of the related contracts;

however, these rates may change based on future tariffs approved by the FERC and the amount and timing of these changes are not currently known.

Our remaining performance obligations exclude variable consideration, including contracts with variable consideration for which we have elected the practical expedient for consideration recognized in revenue as billed.

Certain of our contracts contain evergreen and other renewal provisions for periods beyond the initial term of the contract.

Remaining performance obligations exclude variable consideration, including contracts with variable consideration for which it has elected the practical expedient for consideration recognized in revenue as billed.

Certain of its contracts contain evergreen and other renewal provisions for periods beyond the initial term of the contract.

The remaining performance obligation amounts as of December 31, 2024, do not consider potential future performance obligations for which the renewal has not been exercised and exclude contracts with customers for which the underlying facilities have not received FERC authorization to be placed into service.

Consideration received prior to December 31, 2023, that will be recognized in future periods is also excluded from our remaining performance obligations and is instead reflected in contract liabilities.

The following table presents the amount of the contract liabilities balance expected to be recognized as revenue when performance obligations are satisfied and the transaction price allocated to the remaining performance obligations under certain contracts as of December 31, 2023.

Consideration received prior to December 31, 2024, that will be recognized in future periods is also excluded from its remaining performance obligations and is instead reflected in contract liabilities.

The following tables present the amount of the contract liabilities balance expected to be recognized as revenue when performance obligations are satisfied and the transaction price allocated to the remaining performance obligations under certain contracts as of December 31, 2024.

Contract Liabilities Remaining Performance Obligations

6 unchanged sentences

Total $ 1,046 $ 31,059

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Notes (Continued)

Contract Liabilities Remaining Performance Obligations

2025 ( one year )

2026 ( one year )

2027 ( one year )

2028 ( one year )

2029 ( one year )

Total $ 173 $ 21,598

Contract Liabilities Remaining Performance Obligations

2025 ( one year )

2026 ( one year )

2027 ( one year )

2028 ( one year )

2029 ( one year )

Total $ — $ 4,101

Notes (Continued)

Note 6 – Provision (Benefit) for Income Taxes

19 unchanged sentences

Provision (benefit) for income taxes $ 640 $ 1,005 $ 425

The State deferred income tax rate change benefit of $ 25 million and $ 92 million in 2023 and 2022, respectively, is related to a decrease in our estimate of the deferred state income tax rate (net of federal effect) driven primarily by the enacted decline in the Pennsylvania state income tax rate over the next several years.

During the course of audits of our business by domestic and foreign tax authorities, we frequently face challenges regarding the amount of taxes due.

The State deferred income tax rate change benefit of $ 44 million, $ 25 million and $ 92 million in 2024, 2023 and 2022, respectively, is related to a decrease in Williams’ estimate of the deferred state income tax rate (net of federal effect).

The 2024 benefit is driven primarily by a decrease in the Louisiana state income tax rate and the enacted decline in the Pennsylvania state income tax rate over the next several years.

During the course of audits of its business by domestic and foreign tax authorities, Williams frequently faces challenges regarding the amount of taxes due.

These challenges include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions.

In evaluating the liability associated with our various filing positions, we apply the two-step process of recognition and measurement.

In association with this liability, we record an estimate of related interest and tax exposure as a component of our tax provision.

The impact of this accrual is included within Other – net in our reconciliation of the Provision (benefit) at statutory rate to recorded Provision (benefit) for income taxes .

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

In evaluating the liability associated with its various filing positions, Williams applies the two-step process of recognition and measurement.

In association with this liability, Williams records an estimate of related interest and tax exposure as a component of its tax provision.

The impact of this accrual is included within Other – net in its reconciliation of the Provision (benefit) at statutory rate to recorded Provision (benefit) for income taxes .

Notes (Continued)

Significant components of Deferred income tax liabilities are as follows:

5 unchanged sentences

Accrued liabilities

Corporate alternative minimum tax credits

Foreign tax credits — 35

Federal loss carryovers

Disallowed business interest expense carryforward

State losses and credits

4 unchanged sentences

The valuation allowance at December 31, 2024 and 2023 serves to reduce the available deferred income tax assets to an amount that will, more likely than not, be realized.

We considered all available positive and negative evidence, which incorporates available tax planning strategies, and management’s estimate of future reversals of existing taxable temporary differences, and have determined that a portion of our deferred income tax assets related to the Foreign tax credits and State losses and credits may not be realized.

In 2022, we released $ 70 million of valuation allowance upon determining we expect to utilize additional foreign tax credits prior to expiration between 2024 and 2025.

Williams considered all available positive and negative evidence, which incorporates available tax planning strategies, and management’s estimate of future reversals of existing taxable temporary differences and has determined that a portion of its deferred income tax assets related to State losses and credits may not be realized.

The change from prior year for the Foreign tax credits reflects a decrease of $ 35 million due to its expiration in 2024.

The amounts presented in the table above are, with respect to state items, before any federal benefit.

The change from prior year for the State losses and credits reflects increases in losses and credits generated in the current and prior years less losses and/or credits utilized in the current year.

We have loss and credit carryovers in multiple state taxing jurisdictions.

Williams has loss and credit carryovers in multiple state taxing jurisdictions.

These attributes generally expire between 2025 and 2043 with some carryovers having indefinite carryforward periods.

Federal loss carryovers at December 31, 2024 reflect deferred tax assets on net operating loss carryovers with no expiration date.

Cash payments for income taxes (net of refunds) were $ 31 million and $ 13 million in 2023 and 2022, respectively.

Cash refunds for income taxes (net of payments) were $ 45 million in 2021.

During the second quarter of 2022, we finalized settlements for 2011 through 2014 on certain contested matters with the Internal Revenue Service (IRS) that resulted in a 2022 year-to-date tax benefit of approximately $ 45 million and we received cash refunds totaling $ 7 million.

During the fourth quarter of 2023, we closed the audit for 2018 and made a $ 5 million payment.

We recognize related interest and penalties as a component of Provision (benefit) for income taxes .

No significant interest and penalties were recognized for any period presented.

There are no interest or penalties relating to uncertain tax positions accrued as of December 31, 2023 and December 31, 2022.

Disallowed business interest expense carryforward reflects Williams’ federal interest expense carryforward which has no expiration date.

Cash payments for income taxes (net of refunds) were $ 68 million, $ 31 million and $ 13 million in 2024, 2023 and 2022 respectively.

During the second quarter of 2022, Williams finalized settlements for 2011 through 2014 on certain contested matters with the Internal Revenue Service (IRS) that resulted in a 2022 year-to-date tax benefit of approximately $ 45 million and Williams received cash refunds totaling $ 7 million.

During the fourth quarter of 2023, Williams closed the audit for 2018 and made a $ 5 million payment.

Williams recognizes related interest and penalties as a component of Provision (benefit) for income taxes .

There were no significant interest and penalties recognized for any period presented.

There were no interest or penalties relating to uncertain tax positions accrued as of December 31, 2024 and December 31, 2023.

Notes (Continued)

Consolidated U.S.

Federal income tax returns are open to IRS examination for years after 2019.

Federal income tax returns are open to IRS examination for tax years after 2020.

The statute of limitations for most states expires one year after expiration of the IRS statute.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Note 8 – Investing Activities

Ownership Interest at December 31, 2023

Equity method:

Appalachia Midstream Investments (1) $ 2,886 $ 2,975

Blue Racer 50 % 398 383

OPPL 50 % 387 386

Discovery 60 % 361 345

Gulfstream 50 % 210 220

Laurel Mountain 69 % 184 205

Other Various 188 139

$ 4,637 $ 5,065

(1) Includes equity-method investments in multiple gathering systems in the Marcellus Shale region with an approximate average 66 percent interest.

(2) RMM is a wholly owned subsidiary as of November 30, 2023.

See Note 3 – Acquisitions and Divestitures.

Basis differential

The carrying value of our Appalachia Midstream Investments exceeds our portion of the underlying net assets by approximately $ 1.1 billion at December 31, 2023 and 2022.

These differences were assigned at the acquisition date to property, plant, and equipment and customer relationship intangible assets.

Certain of our other equity-method investments have a carrying value less than our portion of the underlying equity in the net assets primarily due to other than temporary impairments that we have recognized but that were not required to be recognized in the investees’ financial statements.

These differences total approximately $ 773 million and $ 1.1 billion at December 31, 2023 and 2022, respectively, and were assigned to property, plant, and equipment and customer relationship intangible assets.

Differences in the carrying value of our equity-method investments and our portion of the equity in the underlying net assets are generally amortized over the remaining useful lives of the associated underlying assets and included in Equity earnings (losses) within our Consolidated Statement of Income.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Purchases of and contributions to equity-method investments

We generally fund our portion of significant expansion or development projects of these investees through additional capital contributions.

These transactions increased the carrying value of our investments and included:

Year Ended December 31,

2023 2022 2021

Appalachia Midstream Investments $ 59 $ 83 $ 84

Discovery 40 41 —

Aux Sable Liquid Products LP

Cardinal Pipeline Company, LLC — 16 —

Gulfstream — 14 26

$ 141 $ 166 $ 115

Other investing income (loss) – net

The following table presents certain items reflected in Other investing income (loss) – net in our Consolidated Statement of Income:

Year Ended December 31,

2023 2022 2021

Interest income

$ 79 $ 15 $ 7

Gain on remeasurement of RMM investment (Note 3)

Other investing income (loss) – net $ 108 $ 16 $ 7

Dividends and distributions

The organizational documents of entities in which we have an equity-method investment generally require distribution of available cash to members on at least a quarterly basis.

These transactions reduced the carrying value of our investments and included:

Year Ended December 31,

2023 2022 2021

Appalachia Midstream Investments $ 405 $ 415 $ 433

Gulfstream 98 89 90

Discovery 49 49 44

Laurel Mountain

Other 35 65 39

$ 796 $ 865 $ 757

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Summarized Financial Position and Results of Operations of All Equity-Method Investments

Assets (liabilities):

Current assets

Noncurrent assets

11,058 12,701

Current liabilities

( 358 ) ( 632 )

Noncurrent liabilities

( 3,619 ) ( 3,789 )

Year Ended December 31,

2023 2022 2021

Gross revenue $ 3,714 $ 5,520 $ 4,688

Operating income 966 1,268 1,191

Net income 748 1,102 1,006

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Note 7 – Employee Benefit Plans

Pension Plans

We have noncontributory defined benefit pension plans for eligible employees hired prior to January 1, 2019.

Williams has noncontributory defined benefit pension plans for eligible employees hired prior to January 1, 2019.

Eligible employees earn compensation credits based on a cash balance formula.

1 unchanged sentence

Other Postretirement Benefits

We provide subsidized retiree medical benefits to a closed group of participants as well as retiree life insurance benefits to eligible participants.

Williams provides subsidized retiree medical benefits to a closed group of participants as well as retiree life insurance benefits to eligible participants.

Medical benefits for Medicare eligible participants are paid through contributions to health reimbursement accounts.

1 unchanged sentence

Defined Contribution Plan

We have a defined contribution plan for the benefit of substantially all employees.

Williams has a defined contribution plan for the benefit of substantially all employees.

Plan participants may contribute a portion of their compensation on a pre-tax or after-tax basis.

Generally, we match employee contributions up to 6 percent of eligible compensation.

Additionally, eligible active employees that do not receive compensation credits under the defined benefit pension plan are eligible for an additional annual fixed-percentage contribution made by us to the defined contribution plan.

Our contributions charged to expense were $ 60 million in 2023, $ 53 million in 2022, and $ 45 million in 2021.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Generally, Williams matches employee contributions up to 6 percent of eligible compensation.

Williams’ contributions charged to expense were $ 69 million in 2024, $ 60 million in 2023, and $ 53 million in 2022.

Notes (Continued)

Funded Status

18 unchanged sentences

Actual return on plan assets

120 ( 132 ) 17 ( 27 )

Employer contributions

13 unchanged sentences

(1) 2024 amounts are due primarily to changes in the following factors:

Pension Benefits - interest crediting rate assumption and discount rate assumptions.

2022 amounts are due primarily to changes in the following factors:

Pension Benefits - discount rate assumptions, partially offset by interest crediting rate assumption;

Pension Benefits - discount rate assumptions and interest crediting rate assumption;

Other Postretirement Benefits - discount rate assumption.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

2023 amounts are due primarily to changes in the following factors:

Pension Benefits - interest crediting rate assumption and discount rate assumptions.

Notes (Continued)

The following table summarizes information for pension plans with obligations in excess of plan assets at December 31.

7 unchanged sentences

Net actuarial gain (loss) $ 49 $ ( 45 ) $ 20 $ 19

Additionally, as of December 31, 2023 and 2022, we have $ 123 million and $ 130 million, respectively, of pension and other postretirement plan amounts included in regulatory liabilities associated with our gas pipeline companies.

Additionally, as of December 31, 2024 and 2023, Williams has $ 139 million and $ 123 million, respectively, of pension and other postretirement plan amounts included in regulatory liabilities associated with its gas pipeline companies.

Net Periodic Benefit Cost (Credit)

14 unchanged sentences

Net periodic benefit cost (credit) (1) $ 13 $ 17 $ 30 $ ( 8 ) $ ( 5 ) $ ( 2 )

(1) Components other than Service cost are included in Other income (expense) – net below Operating income (loss) in our Consolidated Statement of Income .

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

(1) Components other than Service cost are included in Other income (expense) – net below Operating income (loss) in Williams’ Consolidated Statement of Income .

Notes (Continued)

Items Recognized in Other Comprehensive Income (Loss)

23 unchanged sentences

Cash balance interest crediting rate 4.50 3.50 3.00 N/A N/A N/A

We use mortality tables issued by the Society of Actuaries to measure the benefit obligations.

Williams uses mortality tables issued by the Society of Actuaries to measure the benefit obligations.

The assumed health care cost trend rate for 2025 is 9.2 percent.

2 unchanged sentences

The plans follow a policy of diversifying the investments across various asset classes, strategies, and investment managers.

The investment policy for the pension plans includes target asset allocation percentages as well as permitted and prohibited investments designed to mitigate risks associated with investing.

The December 31, 2023, target asset allocation was 25 percent equity securities and 75 percent fixed income securities, including investments in equity and fixed income mutual funds, commingled investment funds, and separate accounts.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

The fair values of our pension and other postretirement benefits plan assets by asset class at December 31 are as follows:

In order to mitigate risks associated with investing, the investment policy for the pension plans defines target asset allocation percentages and outlines types of investments that are authorized and not authorized under the policy.

The December 31, 2024, target asset allocation was 25 percent equity securities and 75 percent fixed income securities, including investments in equity and fixed income commingled investment funds and separate accounts.

Notes (Continued)

The fair values of Williams’ pension and other postretirement benefits plan assets by asset class at December 31 are as follows:

Pension Benefits Other Postretirement Benefits

27 unchanged sentences

(3) The commingled investment funds are measured at fair value using net asset value per share.

Certain standard withdrawal restrictions generally apply, which may include redemption notification period restrictions ranging from 1 day to 15 days.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Certain standard withdrawal restrictions generally apply, which may include redemption notification periods ranging from 1 day to 15 days.

Notes (Continued)

Plan Benefit Payments and Employer Contributions

2 unchanged sentences

Postretirement

In 2024, we expect to contribute approximately $ 2 million to our pension plans and approximately $ 3 million to our other postretirement benefit plan.

In 2025, Williams expects to contribute approximately $ 1 million to the pension plans and approximately $ 3 million to the other postretirement benefit plan.

Note 8 – Investing Activities

Equity-Method Investments

Ownership Interest at December 31, 2024

Appalachia Midstream Investments (1) $ 2,810 $ 2,886

OPPL 50 % 385 387

Blue Racer 50 % 366 398

Gulfstream 50 % 196 210

Laurel Mountain 69 % 171 184

Discovery (2)

Other Various 179 188

$ 4,107 $ 4,614

(1) Includes equity-method investments in multiple gathering systems in the Marcellus Shale region with an approximate average 66 percent interest.

(2) Discovery is a wholly owned subsidiary of Williams as of August 1, 2024.

See Note 3 – Acquisitions and Divestitures.

Basis differential

The carrying value of Appalachia Midstream Investments exceeds Williams’ portion of the underlying net assets by approximately $ 1 billion and $ 1.1 billion at December 31, 2024 and 2023, respectively.

These differences were assigned at the acquisition date to property, plant, and equipment and customer relationship intangible assets.

Certain other equity-method investments have a carrying value less than Williams’ portion of the underlying equity in the net assets primarily due to other than temporary impairments that Williams recognized but were not required to be recognized in the investees’ financial statements.

These differences total approximately $ 634 million and $ 773 million at December 31, 2024 and 2023, respectively, and were assigned to property, plant, and equipment and customer relationship intangible assets.

Differences in the carrying value of Williams’ equity-method investments and its portion of the equity in the underlying net assets are generally amortized over the remaining

Notes (Continued)

useful lives of the associated underlying assets and included in Equity earnings (losses) within Williams’ Consolidated Statement of Income.

Purchases of and contributions to equity-method investments

Williams generally funds its portion of significant expansion or development projects of these investees through additional capital contributions.

These transactions increased the carrying value of Williams’ investments and included:

Year Ended December 31,

2024 2023 2022

Appalachia Midstream Investments $ 74 $ 59 $ 83

Discovery 37 40 41

Aux Sable Liquid Products LP

Cardinal Pipeline Company, LLC — — 16

Gulfstream — — 14

$ 114 $ 141 $ 166

Dividends and distributions

The organizational documents of entities in which Williams has an equity-method investment generally require distribution of available cash to members on at least a quarterly basis.

These transactions reduced the carrying value of its investments and included:

Year Ended December 31,

2024 2023 2022

Appalachia Midstream Investments $ 407 $ 405 $ 415

Gulfstream 103 98 89

Laurel Mountain

Discovery 22 49 49

Other 43 35 65

$ 789 $ 796 $ 865

Notes (Continued)

Summarized Financial Position and Results of Operations of All Equity-Method Investments

Assets (liabilities):

Current assets

Noncurrent assets

Current liabilities

( 1,146 ) ( 358 )

Noncurrent liabilities

( 2,383 ) ( 3,619 )

Year Ended December 31,

2024 2023 2022

Gross revenue $ 2,880 $ 3,714 $ 5,520

Operating income 1,190 966 1,268

Net income 987 748 1,102

Sale of Aux Sable Interest

On August 1, 2024, Williams completed the sale of its equity-method investments in Aux Sable Liquid Products Inc., Aux Sable Liquid Products LP, and Aux Sable Midstream LLC (collectively, “Aux Sable”) in Williams’ Northeast G&P segment for total consideration of $ 161 million.

As a result of this sale, Williams recorded a gain of $ 149 million in the third quarter of 2024.

The gain is reflected in Other investing income (loss) – net in Williams’ Consolidated Statement of Income.

Other investing income (loss) – net

The following table presents certain items reflected in Other investing income (loss) – net in Williams’ Consolidated Statement of Income:

Year Ended December 31,

2024 2023 2022

Gain on sale of Aux Sable investments

$ 149 $ — $ —

Gain on remeasurement of Discovery investment (Note 3)

Interest income

Gain on remeasurement of RMM investment (Note 3)

$ 343 $ 108 $ 16

Notes (Continued)

Note 9 – Property, Plant, and Equipment

The following table presents nonregulated and regulated Property, plant, and equipment – net as presented in our Consolidated Balance Sheet for the years ended:

The following tables present Property, plant, and equipment – net for the years ended:

Useful Life (1)

12 unchanged sentences

Property, plant, and equipment — net $ 38,692 $ 34,311

(1) Estimated useful life and depreciation rates are presented as of December 31, 2023.

Depreciation rates and estimated useful lives for regulated assets are prescribed by the FERC.

Depreciation and amortization expense for Property, plant, and equipment – net was $ 1.8 billion, $ 1.7 billion, and $ 1.5 billion in 2024, 2023, and 2022, respectively.

Interest capitalized was $ 68 million, $ 54 million, and $ 20 million in 2024, 2023, and 2022, respectively.

Regulated Property, plant, and equipment – net includes approximately $ 389 million and $ 428 million at December 31, 2023 and 2022, respectively, related to amounts in excess of the original cost of the regulated facilities within our gas pipeline businesses as a result of our prior acquisitions.

Regulated Property, plant, and equipment – net includes approximately $ 354 million and $ 389 million at December 31, 2024 and 2023, respectively, related to the purchase price allocation of $ 1.5 billion to property, plant and equipment and adjustments to deferred taxes in excess of original cost from Williams’ purchase of Transco in 1995.

This amount is being amortized over 40 years using the straight-line amortization method.

Current FERC policy does not permit recovery through rates for amounts in excess of original cost of construction.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

(%) December 31,

Onshore transmission facilities

$ 17,242 $ 16,031

Offshore transmission facilities

Storage facilities

Gathering facilities

Construction in progress

Not applicable 420 1,008

Total property, plant, and equipment, at cost 20,044 19,293

Accumulated depreciation and amortization ( 5,941 ) ( 5,963 )

Property, plant, and equipment — net $ 14,103 $ 13,330

Notes (Continued)

(%) December 31,

Transmission facilities

$ 3,821 $ 3,570

Storage facilities

Construction in progress

Not applicable 66 85

Total property, plant, and equipment, at cost 4,218 3,975

Accumulated depreciation and amortization ( 2,089 ) ( 2,026 )

Property, plant, and equipment — net $ 2,129 $ 1,949

(1) Estimated useful life and depreciation rates are presented as of December 31, 2024.

Depreciation rates and estimated useful lives for regulated assets are prescribed by the FERC.

Asset Retirement Obligations

Our accrued obligations primarily relate to offshore platforms and pipelines, oil and gas properties, gas transmission pipelines and facilities, underground storage caverns, gas processing, fractionation, and compression facilities, and gas gathering well connections and pipelines.

At the end of the useful life of each respective asset, we are legally obligated to dismantle offshore platforms and appropriately abandon offshore pipelines, to remove certain components of gas transmission facilities from the ground, to restore land and remove surface equipment at gas processing, fractionation, and compression facilities, to cap certain gathering pipelines at the wellhead connection and remove any related surface equipment, to plug storage caverns and remove any related surface equipment, and to plug producing wells and remove any related surface equipment.

The following table presents the significant changes to our AROs, of which $ 1.978 billion and $ 1.827 billion are included in Regulatory liabilities, deferred income, and other with the remaining current portion in Accrued and other current liabilities at December 31, 2023 and 2022, respectively.

Williams’ accrued obligations primarily relate to offshore platforms and pipelines, oil and gas properties, gas transmission pipelines and facilities, underground storage caverns, gas processing, fractionation, and compression facilities, and gas gathering well connections and pipelines.

At the end of the useful life of each respective asset, Williams is legally obligated to dismantle offshore platforms and appropriately abandon offshore pipelines, to remove certain components of gas transmission facilities from the ground, to restore land and remove surface equipment at gas processing, fractionation, and compression facilities, to cap certain gathering pipelines at the wellhead connection and remove any related surface equipment, to plug storage caverns and remove any related surface equipment, and to plug producing wells and remove any related surface equipment.

The following tables present the significant changes to AROs, of which $ 2.548 billion and $ 1.978 billion are included in Regulatory liabilities, deferred income, and other with the remaining current portion in Other current liabilities at December 31, 2024 and 2023, respectively.

Year Ended December 31,

5 unchanged sentences

Balance at end of year $ 2,639 $ 2,084

(1) Includes $ 250 million, $ 106 million, and $ 114 million of ARO in 2024 related to the Discovery, Gulf Coast Storage, and Crowheart Acquisitions, respectively.

(2) Several factors are considered in the annual review process, including inflation rates, current estimates for removal cost, market risk premiums, discount rates, and the estimated remaining useful life of the assets.

The 2023 and 2022 revisions reflect changes in removal cost estimates and increases in inflation rates, partially offset by increases in discount rates.

Notes (Continued)

Year Ended December 31,

Balance at beginning of year $ 619 $ 563

Liabilities incurred

Liabilities settled

( 32 ) ( 23 )

Revisions (1)

Balance at end of year $ 615 $ 619

(1) Changes in estimates of existing obligations are primarily due to the annual review process, which considers various factors including inflation rate, current estimates for removal costs, discount rates, and the estimated remaining life of assets.

The funds Transco collects through a portion of its rates to fund its AROs are deposited into an external trust account dedicated to funding its AROs (ARO Trust).

(See Note 15 – Fair Value Measurements, Guarantees, and Concentration of Credit Risk.) Under its current rate settlement, Transco’s annual funding obligation is approximately $ 16 million, with installments to be deposited monthly.

(See Note 16 – Fair Value Measurements, Guarantees, and Concentration of Credit Risk.)

Year Ended December 31,

Balance at beginning of year $ 136 $ 129

Balance at end of year $ 144 $ 136

NWP’s gross regulatory asset balances associated with ARO as of December 31, 2024 and 2023 were $ 124 million and $ 116 million, respectively.

NWP’s regulatory asset is expected to be fully recovered through the negative salvage component of depreciation included in NWP’s rates;

as such, the negative salvage component of accumulated depreciation collected through rates and reflected as a regulatory liability has been netted with the ARO regulatory asset to result in a regulatory liability of $ 30 million and $ 31 million at December 31, 2024 and 2023, respectively (See Note 10 – Regulatory Assets and Liabilities).

Notes (Continued)

Note 10 – Regulatory Assets and Liabilities

The components of regulatory assets and liabilities include the effects of deferred taxes on equity funds used during construction, AROs, shipper imbalance activity, fuel and power cost differentials, depreciation, negative salvage, pension and other postretirement benefits, trackers, customer tax refunds, and rate allowances for deferred income taxes at a historically higher federal income tax rate.

Current assets reported within Other current assets and deferred charges

Noncurrent assets reported within Regulatory assets, deferred charges, and other

Total regulatory assets $ 666 $ 622

Current liabilities reported within Other current liabilities

Noncurrent liabilities reported within Regulatory liabilities, deferred income, and other

Total regulatory liabilities $ 1,385 $ 1,365

Notes (Continued)

Current regulatory assets:

Fuel recovery $ 47 $ 60

Deferred cash out 6 6

ARO - Eminence 5 5

Total current regulatory assets 74 87

Long-term regulatory assets:

Grossed-up deferred taxes on equity AFUDC 29 31

ARO - Eminence 15 20

Slug catcher 6 6

Deferred cash out — 11

Total long-term regulatory assets 320 299

Total regulatory assets $ 394 $ 386

Current regulatory liabilities:

Deferred taxes - liability $ 31 $ 31

Postretirement benefits other than pension — 8

Electric power cost 26 7

Total current regulatory liabilities 58 49

Long-term regulatory liabilities:

Negative salvage 632 605

Deferred taxes - liability 252 283

Postretirement benefits other than pension 31 23

Pension 30 24

Sentinel meter station depreciation 7 7

Total long-term regulatory liabilities 976 956

Total regulatory liabilities $ 1,034 $ 1,005

The significant regulatory assets and liabilities include:

Fuel recovery :

This amount represents the value of the cumulative volumetric difference between the gas retained from customers and the gas consumed in operations.

These amounts are not included in the rate base, but assets and liabilities are expected to be recovered or refunded, respectively, in subsequent annual fuel tracker filings.

Electric power cost :

This amount represents the value of the difference between the electric power costs recovered from our customers and the electric power costs incurred in operations.

These amounts are expected to be recovered by changing the electric power reimbursement rate in subsequent annual electric power tracker filings.

Notes (Continued)

This regulatory asset balance includes the uncollected ARO depreciation expense and accretion expense.

The regulatory asset is being recovered through rates, and is being amortized to expense consistent with the amounts collected in rates (see AROs in Note 9 – Property, Plant, and Equipment).

Deferred cash out :

This amount represents the deferral of gains or losses on the purchases and sales of gas imbalances with shippers.

These assets and liabilities amounts will be recovered or refunded, respectively, under terms provided for in Transco’s FERC tariff.

Asset retirement costs - Eminence :

This regulatory asset balance is associated with the Eminence Storage Field retirement costs.

The regulatory asset is being recovered through rates and is being amortized to expense consistent with the amounts collected in rates.

Grossed-up deferred taxes on equity AFUDC :

This regulatory asset balance is established to offset the deferred tax for the equity component of the allowance for funds used during the construction of long-lived assets.

All amounts were generated during the period that Transco was a taxable entity.

Taxes on capitalized funds used during construction and the offsetting deferred income taxes are included in the rate base and are recovered over the depreciable lives of the long-lived assets to which they relate.

Slug catcher:

This amount represents certain costs associated with the replacement of a component of a slug catcher which was included in the Docket No.

RP18-1126 rate case settlement.

A regulatory asset has been established to recognize the recovery of Transco’s investment in the slug catcher as it is collected through Transco’s depreciation rates and is being amortized at the prescribed depreciation rate for onshore transmission facilities (see Note 1 – General, Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies).

Negative salvage:

Transco’s rates include a component designed to recover certain future retirement costs for which it is not required to record an ARO.

Transco records a regulatory liability representing the cumulative residual amount of recoveries through rates, net of expenditures associated with these retirement costs.

Deferred taxes - liability :

This regulatory liability balance was established as a result of a decrease to rate base deferred taxes due to a decrease to the effective federal income tax rate.

The timing of the refund of the regulatory liability to rate payers is stated in the Docket No.

RP18-1126 rate case settlement.

Additionally, as of December 31, 2024, Transco has $ 13 million of rate base deferred taxes established as a result of a decrease to the effective state income tax rate.

This amount and timing of the refund is being addressed in Transco’s ongoing rate case.

Postretirement benefits other than pension:

Transco recovers the actuarially determined cost of postretirement benefits through rates that are set through periodic general rate filings.

Any differences between the annual actuarially determined cost and the amounts recovered in rates are recorded as regulatory assets or liabilities to be collected or refunded through future rate adjustments.

These amounts are not included in the rate base.

Effective with the Docket No.

RP18-1126 rate case settlement, the other postretirement benefits regulatory liability balance as of March 1, 2019, was fully amortized in 2024 (see Note 7 – Employee Benefit Plans).

Transco recovers the actuarially determined pension cash contributions through rates that are set through periodic general rate filings.

Effective with the Docket No.

RP18-1126 rate case settlement, any amounts of annual contributions that fall below the threshold are recorded as adjustments to income and refunded through future rate adjustments.

Also effective with the Docket No.

RP18-1126 rate case settlement, the pension regulatory liability balance as of March 1, 2019, was fully amortized in 2024 (see Note 7 – Employee Benefit Plans).

Sentinel meter station depreciation:

This amount reflects the incremental depreciation being recorded related to the meter station modifications made for three of the Sentinel shippers.

These modifications will be recovered through a surcharge over a defined period of time as stated in the Sentinel FERC order.

The incremental depreciation represents the difference between the FERC granted depreciation rate for such facilities in the last rate case as compared to the depreciation rates in the Sentinel order which are based on the contractual terms in the surcharge agreements.

The incremental depreciation will be recorded through the end of the contractual term and then will be amortized.

Notes (Continued)

Current regulatory assets:

Fuel recovery $ 4 $ —

Levelized depreciation 2 2

Total current regulatory assets 6 2

Long-term regulatory assets:

Levelized depreciation 7 10

Grossed-up deferred taxes on equity AFUDC 4 4

Washington State Carbon and Greenhouse Gas Tax 38 22

Total long-term regulatory assets

Total regulatory assets $ 55 $ 38

Current regulatory liabilities:

Deferred taxes - liability $ 20 $ 20

Fuel recovery — 1

Total current regulatory liabilities 20 21

Long-term regulatory liabilities:

Deferred taxes - liability 160 179

Postretirement benefits other than pension 43 42

Negative salvage - net 30 31

Total long-term regulatory liabilities 233 252

Total regulatory liabilities $ 253 $ 273

The significant regulatory assets and liabilities include:

Fuel recovery :

This amount represents the value of the cumulative volumetric difference between the gas retained from customers and the gas consumed in operations.

These amounts are not included in the rate base, but assets and liabilities are expected to be recovered or refunded, respectively, in subsequent annual fuel tracker filings.

Levelized depreciation :

Levelized depreciation allows contract revenue streams to remain constant over the primary contract terms by recognizing lower than book depreciation in the early years and higher than book depreciation in later years.

The depreciation component of the levelized incremental rates will equal the accumulated book depreciation by the end of the primary contract terms.

The difference between levelized depreciation and straight-line book depreciation is recorded as a FERC approved regulatory asset or liability and is eliminated over the levelization period.

Grossed-up deferred taxes on equity AFUDC :

This regulatory asset balance is established to offset the deferred tax for the equity component of the allowance for funds used during the construction of long-lived assets.

All amounts were generated during the period that NWP was a taxable entity.

Washington State Carbon and Greenhouse Tax :

This amount represents the cost of emission allowances and the associated accumulated interest as a result of the passage of the state of Washington Climate Commitment Act

Notes (Continued)

that took effect January 1, 2023.

NWP’s Settlement allows it to recover the costs of purchasing allowances under the program in NWP’s next rate case.

Deferred taxes - liability :

This regulatory liability balance was established as a result of a decrease to rate base deferred taxes due to a decrease to the effective federal and state income tax rates.

The timing of the refund of the regulatory liability to rate payers is stated in the Docket No.

RP22-1155 rate case settlement.

Postretirement benefits other than pension:

NWP seeks to recover the actuarially determined cost of postretirement benefits through rates that are set through periodic general rate filings.

These amounts are not included in the rate base, and NWP is not currently recovering postretirement benefit costs in its rates (see Note 7 – Employee Benefit Plans).

Negative salvage, net of ARO asset :

This regulatory liability balance reflects the amount that NWP has recovered in rates related to future retirement costs offset by depreciation of the ARO asset and accretion expense of the ARO liability due to the passage of time.

AROs are expected to be fully recovered through the net negative salvage component of depreciation included in rates (see AROs in Note 9 – Property, Plant, and Equipment).

Note 11 – Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill, included in Intangible assets – net of accumulated amortization in our Consolidated Balance Sheet, by reportable segment for the periods indicated are as follows:

Transmission & Gulf of Mexico West

December 31, 2021 $ — $ — $ —

Changes in the carrying amount of goodwill, included in Intangible assets – net of accumulated amortization in Williams’ Consolidated Balance Sheet, by reportable segment for the years indicated are as follows:

Transmission & Gulf of America West

December 31, 2022 $ — $ — $ —

3 unchanged sentences

December 31, 2023 400 63 463

Cureton Acquisition (Note 3)

RMM Acquisition (Note 3)

— ( 2 ) ( 2 )

December 31, 2024 $ 400 $ 66 $ 466

Goodwill is not subject to amortization, but is evaluated at least annually for impairment or more frequently if impairment indicators are present.

We did not identify or recognize any impairments to goodwill in connection with our evaluation of goodwill for impairment during the year ended December 31, 2023.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Williams did not identify or recognize any impairments to goodwill in connection with the evaluation of goodwill for impairment during the year ended December 31, 2024.

Notes (Continued)

Other Intangible Assets

The gross carrying amount and accumulated amortization of other intangible assets, included in Intangible assets – net of accumulated amortization in our Consolidated Balance Sheet, at December 31 are as follows:

The gross carrying amount and accumulated amortization of other intangible assets, included in Intangible assets – net of accumulated amortization in Williams’ Consolidated Balance Sheet, at December 31 are as follows:

Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization

6 unchanged sentences

Customer relationships primarily relate to gas gathering, processing, and fractionation contractual customer relationships recognized in acquisitions.

Contractual customer relationships are being amortized on a straight-line basis over periods of up to 30 years, which represents a portion of the term over which the contractual customer relationships are expected to contribute to our cash flows.

We expense costs incurred to renew or extend the terms of our gas gathering, processing, and fractionation contracts with customers.

Although a significant portion of the expected future cash flows associated with these contractual customer relationships are dependent on our ability to renew or extend the arrangements beyond the initial contract periods, these expected future cash flows are significantly influenced by the scope and pace of our producer customers’ drilling programs.

Once producer customers’ wells are connected to our gathering infrastructure, their likelihood of switching to another provider before the wells are abandoned is reduced due to the significant capital investment required.

Contractual customer relationships are being amortized on a straight-line basis over periods of up to 30 years, which represents the term over which the contractual customer relationships are expected to contribute to cash flows.

Williams expenses costs incurred to renew or extend the terms of its gas gathering, processing, and fractionation contracts with customers.

Although a significant portion of the expected future cash flows associated with these contractual customer relationships are dependent on the ability to renew or extend the arrangements beyond the initial contract periods, these expected future cash flows are significantly influenced by the scope and pace of Williams’ producer customers’ drilling programs.

Once producer customers’ wells are connected to Williams’ gathering infrastructure, their likelihood of switching to another provider before the wells are abandoned is reduced due to the significant capital investment required.

The amortization expense related to customer relationships was $ 368 million, $ 360 million, and $ 353 million in 2024, 2023, and 2022, respectively.

1 unchanged sentence

Transportation and Storage Capacity Contracts

Certain transportation and storage capacity contracts were recognized as intangible assets as part of the Sequent Acquisition.

(See Note 3 – Acquisitions and Divestitures.) The amortization expense related to transportation and storage capacity contracts was $ 51 million, $ 158 million, and $ 14 million in 2023, 2022, and 2021, respectively.

Certain transportation and storage capacity contracts were recognized as intangible assets as part of the acquisition of Sequent in 2021.

The amortization expense related to transportation and storage capacity contracts was $ 21 million, $ 51 million, and $ 158 million in 2024, 2023, and 2022, respectively.

The estimated amortization expense for each of the next five succeeding fiscal years is $ 10 million, $ 7 million, $ 4 million, $ 2 million, and $ 0 million .

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Note 11 – Accrued and Other Current Liabilities

Notes (Continued)

Note 12 – Other Current Liabilities

Interest on debt $ 350 $ 322

Employee costs 285 197

Contract liabilities 159 141

Contract liabilities (Note 5) 170 159

Alaska refinery contamination litigation (Note 1) — 134

4 unchanged sentences

$ 1,360 $ 1,284

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Interest on debt $ 76 $ 76

Contract liabilities 10 10

Customer deposits 38 35

Interest on debt $ 6 $ 6

Taxes, other than income taxes 8 7

Contract liabilities — 1

Transportation and gas exchange payables 10 5

Notes (Continued)

Note 13 – Debt and Banking Arrangements

Long-Term Debt

Long-Term Debt by Issuing Entity

7.08 % Debentures due 2026

10 unchanged sentences

Other financing obligation — Dalton 247 250

Unamortized debt issuance costs

( 23 ) ( 26 )

Net unamortized debt premium (discount)

( 11 ) ( 12 )

Total debt — Transco

$ 5,235 $ 5,261

MountainWest:

2 unchanged sentences

4.875 % Notes due 2041 (Note 3)

Northwest Pipeline:

Net unamortized debt premium (discount)

( 58 ) ( 61 )

Total debt — MountainWest

7.125 % Debentures due 2025

4 % Notes due 2027

Unamortized debt issuance costs

Net unamortized debt premium (discount)

Total debt — NWP

4.3 % Notes due 2024

8 unchanged sentences

4.8 % Notes due 2029

3.5 % Notes due 2030

2.6 % Notes due 2031

7.5 % Debentures due 2031

6 unchanged sentences

5.8 % Notes due 2043

Notes (Continued)

5.4 % Notes due 2044

5 unchanged sentences

5.3 % Notes due 2052

RMM deferred consideration obligation (Note 3) 665 —

5.8 % Notes due 2054

Unamortized debt issuance costs

( 130 ) ( 112 )

Net unamortized debt premium (discount)

Total long-term debt, including current portion 25,713 22,554

Long-term debt due within one year ( 2,337 ) ( 627 )

( 41 ) ( 39 )

Total debt — Williams

$ 20,167 $ 18,837

RMM deferred consideration obligation (Note 3) — 665

Gulf Coast Storage deferred consideration obligation (Note 3)

$ 26,456 $ 25,713

Long-term debt due within one year — Williams

( 1,600 ) ( 2,305 )

Long-term debt due within one year — Transco

( 35 ) ( 32 )

Long-term debt due within one year — NWP

Long-term debt $ 24,736 $ 23,376

Certain of our debt agreements contain covenants that restrict or limit, among other things, our ability to create liens supporting indebtedness, sell assets, and incur additional debt.

Default of these agreements could also restrict our ability to make certain distributions or repurchase equity.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

The following table presents aggregate minimum maturities of long-term debt, other financing obligations, and the RMM deferred consideration obligation, excluding net unamortized debt premium (discount) and debt issuance costs, for each of the next five years:

Certain of Williams’ debt agreements contain covenants that restrict or limit, among other things, its ability to create liens supporting indebtedness, sell assets, and incur additional debt.

Default of these agreements could also restrict Williams’ ability to make certain distributions or repurchase equity.

The following table presents aggregate minimum maturities of long-term debt, other financing obligations, and the Gulf Coast Storage deferred consideration obligation, excluding net unamortized debt premium (discount) and debt issuance costs, for each of the next five years:

December 31, 2024

Our senior unsecured public debt issuances for the past three years and subsequent to the balance sheet date are as follows:

Notes (Continued)

Williams senior unsecured public debt issuances for the past three years and subsequent to the balance sheet date are as follows:

Maturity Date

3 unchanged sentences

March 15, 2055 500 6.000 %

August 10, 2023 (1)

March 2, 2026 350 5.400 %

August 10, 2023

August 15, 2028 900 5.300 %

March 2, 2023

March 2, 2026 750 5.400 %

March 2, 2023

March 15, 2033 750 5.650 %

August 8, 2022

August 15, 2032 1,000 4.650 %

August 8, 2022

August 15, 2052 750 5.300 %

October 8, 2021 (2)

March 15, 2031 600 2.600 %

October 8, 2021

October 15, 2051 650 3.500 %

March 2, 2021

March 15, 2031 900 2.600 %

(1) Additional issuance of the 5.40 percent senior notes due 2026 issued on March 2, 2023, and trade interchangeably with such notes.

August 13, 2024 November 15, 2029 450 4.800 %

August 13, 2024 (1) March 15, 2034 300 5.150 %

August 13, 2024 November 15, 2054 750 5.800 %

January 5, 2024 March 15, 2029 1,100 4.900 %

January 5, 2024 March 15, 2034 1,000 5.150 %

August 10, 2023 (2) March 2, 2026 350 5.400 %

August 10, 2023 August 15, 2028 900 5.300 %

March 2, 2023 March 2, 2026 750 5.400 %

March 2, 2023 March 15, 2033 750 5.650 %

August 8, 2022 August 15, 2032 1,000 4.650 %

August 8, 2022 August 15, 2052 750 5.300 %

________________

(1) Additional issuance of the 5.15 percent senior notes due 2034 issued on January 5, 2024, and trade interchangeably with such notes.

(2) Additional issuance of the 5.40 percent senior notes due 2026 issued on March 2, 2023, and trade interchangeably with such notes.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Our senior unsecured public debt retirements for the past three years are as follows:

Williams’ senior unsecured public debt retirements for the past three years and subsequent to the balance sheet date are as follows:

Date of Retirement

Maturity Date

November 15, 2023

November 15, 2023 $ 600 4.500 %

October 17, 2022

January 15, 2023 850 3.700 %

August 15, 2022 750 3.350 %

January 18, 2022

March 15, 2022 1,250 3.600 %

September 1, 2021

September 1, 2021 371 7.875 %

August 16, 2021 November 15, 2021 500 4.000 %

January 15, 2025 January 15, 2025 $ 750 3.900 %

June 24, 2024 June 24, 2024 1,250 4.550 %

March 4, 2024 March 4, 2024 1,000 4.300 %

November 15, 2023 November 15, 2023 600 4.500 %

October 17, 2022 January 15, 2023 850 3.700 %

May 16, 2022 August 15, 2022 750 3.350 %

January 18, 2022 March 15, 2022 1,250 3.600 %

Other financing obligations

During the construction of the Atlantic Sunrise, Leidy South, and Dalton projects, Transco received funding from co-owners for their proportionate share of construction costs.

Amounts received were recorded within noncurrent liabilities and the costs associated with construction were capitalized in the Consolidated Balance Sheet.

Amounts received were recorded within

Notes (Continued)

noncurrent liabilities and the costs associated with construction were capitalized.

Upon placing these projects into service Transco began utilizing the co-owners’ undivided interest in the assets, including the associated pipeline capacity, and reclassified the funding previously received from its co-owners from noncurrent liabilities to debt.

6 unchanged sentences

________________

(1) In managing our available liquidity, we do not expect a maximum outstanding amount in excess of the capacity of our credit facility inclusive of any outstanding amounts under our commercial paper program.

(1) In managing its available liquidity, Williams does not expect a maximum outstanding amount in excess of the capacity of its credit facility inclusive of any outstanding amounts under the commercial paper program.

Revolving credit facility

In October 2021, we along with Transco and Northwest Pipeline, the lenders named therein, and an administrative agent entered into an amended and restated credit agreement (Credit Agreement) that reduced aggregate commitments available from $ 4.5 billion to $ 3.75 billion, with up to an additional $ 500 million increase in aggregate commitments available under certain circumstances.

In October 2021, Williams along with Transco and NWP, the lenders named therein, and an administrative agent entered into an amended and restated credit agreement (Credit Agreement) that reduced aggregate commitments available from $ 4.5 billion to $ 3.75 billion, with up to an additional $ 500 million increase in aggregate commitments available under certain circumstances.

The Credit Agreement was effective on October 8, 2021.

In the second quarter of 2023, the maturity date of our Credit Agreement was extended one year and now expires October 8, 2027.

In the second quarter of 2023, the maturity date of the Credit Agreement was extended one year and now expires October 8, 2027.

The amended Credit Agreement allows the co-borrowers to request up to two extensions of the maturity date each for an additional one-year period to allow a maturity date as late as October 8, 2029, under certain circumstances.

1 unchanged sentence

The Credit Agreement allows for swing line loans up to an aggregate of $ 200 million, subject to available capacity under the credit facility, and letters of credit commitments of $ 500 million.

Transco and Northwest Pipeline are each able to borrow up to $ 500 million under this credit facility to the extent not otherwise utilized by the other co-borrowers.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Transco and NWP are each able to borrow up to $ 500 million under this credit facility to the extent not otherwise utilized by the other co-borrowers.

The Credit Agreement contains the following terms and conditions:

3 unchanged sentences

a fluctuating base rate equal to an alternative base rate as defined in the Credit Agreement plus an applicable margin or a periodic fixed rate equal to the Term Secured Overnight Financing Rate plus an applicable margin.

We are required to pay a commitment fee based on the unused portion of the credit facility.

Williams is required to pay a commitment fee based on the unused portion of the credit facility.

The applicable margin is determined by reference to a pricing schedule based on the applicable borrower’s senior unsecured long-term debt ratings and the commitment fee is determined by reference to a pricing schedule based on Williams’ senior unsecured long-term debt ratings.

Significant financial covenants under the Credit Agreement require the ratio of debt to EBITDA (earnings before interest, taxes, depreciation, and amortization), each as defined in the Credit Agreement, to be no greater than 5.0 to 1.0, except that for any fiscal quarter in which the funding of the purchase price for an acquisition (whether effectuated as one or a series of related transactions) with an aggregate purchase price of $ 25 million or more has been effected, and the following two fiscal quarters (in each case subject to certain limitations), the ratio of debt to EBITDA is to be no greater than 5.5 to 1.

The ratio of debt to capitalization (defined as net worth plus debt), each as defined in the Credit Agreement, must be no greater than 65 percent for each of Transco and Northwest Pipeline.

At December 31, 2023, we are in compliance with these covenants.

Significant financial covenants under the Credit Agreement require Williams’ ratio of debt to EBITDA (earnings before interest, taxes, depreciation, and amortization), each as defined in the Credit Agreement, to be no

Notes (Continued)

greater than 5.0 to 1.0, except that for any fiscal quarter in which the funding of the purchase price for an acquisition (whether effectuated as one or a series of related transactions) with an aggregate purchase price of $ 25 million or more has been effected, and the following two fiscal quarters (in each case subject to certain limitations), the ratio of debt to EBITDA is to be no greater than 5.5 to 1.

The ratio of debt to capitalization (defined as net worth plus debt), each as defined in the Credit Agreement, must be no greater than 65 percent for each of Transco and NWP.

Williams expects to be in compliance with these covenants for the December 31, 2024 reporting period.

Commercial Paper Program

We have a $ 3.5 billion commercial paper program.

Williams has a $ 3.5 billion commercial paper program.

The maturities of the commercial paper notes vary but may not exceed 397 days from the date of issuance.

1 unchanged sentence

The net proceeds of issuances of the commercial paper notes are expected to be used to fund planned capital expenditures and for other general corporate purposes.

At December 31, 2024, $ 455 million commercial paper was outstanding at a weighted-average interest rate of 4.6 percent.

At December 31, 2023, $ 725 million of commercial paper was outstanding at a weighted-average interest rate of 5.6 percent.

We had $ 350 million of commercial paper outstanding at December 31, 2022 at a weighted-average interest rate of 4.8 percent.

Cash Payments for Interest (Net of Amounts Capitalized)

Cash payments for interest (net of amounts capitalized) were $ 1.152 billion in 2023, $ 1.117 billion in 2022, and $ 1.137 billion in 2021.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Restrictive Debt Covenants

At December 31, 2024, none of Transco’s nor NWP’s debt instruments restrict the amount of distributions to Williams, provided, however, that under the credit facility described above, Transco or NWP are restricted from making distributions to Williams during an event of default if Transco or NWP have directly incurred indebtedness under the credit facility.

The debt agreements of Transco and NWP contain restrictions on their ability to incur secured debt beyond certain levels and to guarantee certain indebtedness.

The indenture governing Transco’s $ 1 billion of 7.85 percent Senior Notes due 2026 further restricts its ability to guarantee certain indebtedness.

Transco and NWP expect to be in compliance with these covenants, for the December 31, 2024 reporting period.

Cash Payments for Interest by Registrant (Net of Amounts Capitalized)

Year Ended December 31,

2024 2023 2022

Williams $ 1,293 $ 1,152 $ 1,117

Transco 302 307 326

Notes (Continued)

Note 14 – Leases

We are a lessee through noncancellable lease agreements for property and equipment consisting primarily of buildings, land, vehicles, and equipment used in both our operations and administrative functions.

Williams, Transco, and NWP are lessees through noncancellable lease agreements for property and equipment consisting primarily of buildings, land, vehicles, and equipment used in both its operations and administrative functions.

Year Ended December 31,

5 unchanged sentences

Cash paid for operating lease liabilities $ 37 $ 37 $ 33

(Dollars in Millions)

Other Information:

Right-of-use asset (included in Regulatory assets, deferred charges, and other )

Right-of-use assets (included in Regulatory assets, deferred charges, and other )

Operating lease liabilities:

Current (included in Accrued and other current liabilities )

Current (included in Other current liabilities )

Noncurrent (included in Regulatory liabilities, deferred income, and other )

2 unchanged sentences

4.90 % 4.78 %

At December 31, 2023, the following table represents our operating lease maturities, including renewal provisions that we have assessed as being reasonably certain of exercise, for each of the years ended December 31:

At December 31, 2024, the following table represents operating lease maturities, including renewal provisions Williams has assessed as being reasonably certain of exercise, for each of the years ended December 31:

Thereafter 86

2 unchanged sentences

Total obligations under operating leases $ 168

We are the lessor to certain lease agreements for office space in our headquarters building, which are insignificant to our financial statements.

Williams is the lessor to certain lease agreements for office space in its headquarters building, which are insignificant to its financial statements.

Notes (Continued)

Year Ended December 31,

2024 2023 2022

Operating lease cost $ 9 $ 9 $ 9

Variable lease cost 7 7 7

Total lease cost $ 16 $ 16 $ 16

Cash paid for operating lease liabilities $ 9 $ 10 $ 10

(Dollars in Millions)

Other Information:

Right-of-use assets (included in Deferred charges and other in Transco’s Balance Sheet)

Operating lease liabilities:

Current (included in Other current liabilities in Transco’s Balance Sheet)

Noncurrent (included in Deferred income and other in Transco’s Balance Sheet)

Weighted-average remaining lease term – operating leases (years) 13 13

Weighted-average discount rate – operating leases 4.77 % 4.73 %

As of December 31, 2024, the following table represents operating lease maturities, including renewal provisions that Transco has assessed as being reasonably certain of exercise, for each of the years ended December 31:

Thereafter 32

Total future lease payments 80

Amount representing interest 23

Total obligations under operating leases $ 57

Notes (Continued)

Year Ended December 31,

2024 2023 2022

Operating lease cost $ 3 $ 1 $ 1

Variable lease cost 1 1 1

Total lease cost $ 4 $ 2 $ 2

Cash paid for operating lease liabilities $ 2 $ 1 $ 1

(Dollars in Millions)

Other Information:

Right-of-use assets (included in Deferred charges and other in NWP’s Balance Sheet)

Operating lease liabilities:

Current (included in Other current liabilities in NWP’s Balance Sheet)

Noncurrent (included in Deferred income and other in NWP’s Balance Sheet)

Weighted-average remaining lease term – operating leases (years) 19 15

Weighted-average discount rate – operating leases 4.90 % 4.18 %

As of December 31, 2024, the following table represents operating lease maturities, including renewal provisions that NWP has assessed as being reasonably certain of exercise, for each of the years ended December 31:

Total future lease payments 9

Amount representing interest 3

Total obligations under operating leases $ 6

Note 15 – Equity-Based Compensation

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To date, 50 million new shares have been authorized for making awards under the Plan.

The Plan permits the granting of various types of awards including, but not limited to, restricted

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

stock units and stock options.

At December 31, 2023, 21 million shares of our common stock were reserved for issuance pursuant to existing and future stock awards, of which 12 million shares were available for future grants.

Additionally, up to 5.2 million new shares of our common stock have been authorized to date to be available for sale under our Employee Stock Purchase Plan (ESPP).

The Plan permits the granting of various types of awards including, but not limited to, restricted stock units and stock options.

At December 31, 2024, 17 million shares of common stock were reserved for issuance pursuant to existing and future stock awards, of which 9 million shares were available for future grants.

Notes (Continued)

Additionally, up to 5.2 million new shares of Williams’ common stock have been authorized to date to be available for sale under Williams’ Employee Stock Purchase Plan (ESPP).

Employees purchased 240 thousand shares at a weighted-average price of $ 33.00 per share during 2024.

Approximately 0.7 million shares were available for purchase under the ESPP at December 31, 2024.

We recognize compensation expense on employee stock-based awards on a straight-line basis;

Williams recognizes compensation expense on employee stock-based awards on a straight-line basis;

forfeitures are recognized when they occur.

Operating and maintenance expenses and Selling, general, and administrative expenses in our Consolidated Statement of Income include equity-based compensation expense in 2023, 2022, and 2021 of $ 77 million, $ 73 million, and $ 81 million, respectively.

Operating and maintenance expenses and Selling, general, and administrative expenses in Williams’ Consolidated Statement of Income include equity-based compensation expense in 2024, 2023, and 2022 of $ 99 million, $ 77 million, and $ 73 million, respectively.

Income tax benefit recognized related to the stock-based compensation expense in 2024, 2023, and 2022 was $ 24 million, $ 19 million, and $ 18 million, respectively.

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Nonvested Restricted Stock Units

At December 31, 2023 and 2022, we had restricted stock units outstanding, including performance-based shares, of 6.6 million shares and 6.9 million shares, respectively, with a weighted-average fair value of $ 28.34 and $ 23.63 , respectively.

During 2023, we granted 3.8 million shares of restricted stock units with a weighted-average fair value of $ 27.43 .

At December 31, 2024 and 2023, Williams had restricted stock units outstanding, including performance-based shares, of 6.4 million shares and 6.6 million shares, respectively, with a weighted-average fair value of $ 32.48 and $ 28.34 , respectively.

During 2024 and 2023, Williams granted 3.1 million and 3.8 million shares of restricted stock units with a weighted-average fair value of $ 31.77 and $ 27.43 , respectively.

Restricted stock units generally vest after three years .

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There were no stock options granted in 2024, 2023, or 2022.

At December 31, 2023, we had 1.5 million stock options that were both outstanding and exercisable, with a weighted-average exercise price of $ 37.17 .

At December 31, 2024, Williams had 0.4 million stock options that were both outstanding and exercisable, with a weighted-average exercise price of $ 29.99 .

The weighted-average remaining contractual life for stock options that were both outstanding and exercisable at December 31, 2024, was 2.4 years.

Cash received for the exercise of stock options in 2024 and 2023 was $ 5 million and $ 2 million, respectively, and the related income tax benefit recognized in both 2024 and 2023 was $ 2 million.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Notes (Continued)

Note 16 – Fair Value Measurements, Guarantees, and Concentration of Credit Risk

The following table presents, by level within the fair value hierarchy, certain of our significant financial assets and liabilities.

The following table presents, by level within the fair value hierarchy, certain of Williams’, Transco’s, and NWP’s significant financial assets and liabilities.

The carrying values of cash and cash equivalents, accounts receivable, accounts payable, and commercial paper approximate fair value because of the short-term nature of these instruments.

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Measured on a recurring basis:

ARO Trust investments $ 269 $ 269 $ 269 $ — $ —

ARO Trust investments - Transco

$ 297 $ 297 $ 297 $ — $ —

Commodity derivative assets (1)

344 726 427 188 111

Commodity derivative liabilities (1)

Interest rate derivatives

( 400 ) ( 1,070 ) ( 532 ) ( 475 ) ( 63 )

Additional disclosures:

Long-term debt, including current portion ( 25,713 ) ( 25,553 ) — ( 25,553 ) —

Debt by issuer, including current portion:

( 20,167 ) ( 19,517 ) — ( 19,517 ) —

Transco ( 5,235 ) ( 5,276 ) — ( 5,276 ) —

NWP ( 582 ) ( 573 ) — ( 573 ) —

MountainWest ( 372 ) ( 364 ) — ( 364 ) —

Gulf Coast Storage deferred consideration obligation (Note 3)

( 100 ) ( 100 ) — ( 100 ) —

( 26,456 ) ( 25,830 ) — ( 25,830 ) —

Guarantees ( 36 ) ( 28 ) — ( 12 ) ( 16 )

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Measured on a recurring basis:

ARO Trust investments $ 230 $ 230 $ 230 $ — $ —

ARO Trust investments - Transco

$ 269 $ 269 $ 269 $ — $ —

Commodity derivative assets (1)(2)

314 866 514 196 156

Commodity derivative liabilities (1)(2)

Other financial assets (liabilities) - net ( 5 ) ( 5 ) — ( 5 ) —

( 287 ) ( 841 ) ( 376 ) ( 362 ) ( 103 )

Interest rate derivatives

Additional disclosures:

Long-term debt, including current portion ( 22,554 ) ( 21,569 ) — ( 21,569 ) —

Debt by issuer, including current portion:

( 18,837 ) ( 18,494 ) — ( 18,494 ) —

Transco ( 5,261 ) ( 5,438 ) — ( 5,438 ) —

NWP ( 581 ) ( 581 ) — ( 581 ) —

MountainWest ( 369 ) ( 375 ) — ( 375 ) —

RMM deferred consideration obligation (Note 3)

( 665 ) ( 665 ) — ( 665 ) —

( 25,713 ) ( 25,553 ) — ( 25,553 ) —

Guarantees ( 37 ) ( 28 ) — ( 12 ) ( 16 )

(1) Commodity derivative assets and liabilities exclude $ 2 million of net cash collateral in Level 1.

(2) Commodity derivative assets and liabilities exclude $ 202 million of net cash collateral in Level 1.

(1) The carrying amount is presented net of counterparty offsetting arrangements and collateral (see Note 17 – Commodity Derivatives).

Notes (Continued)

(2) Previously, the fair value of Williams’ commodity derivative assets and liabilities were disclosed by level within the fair value hierarchy net of counterparty offsetting arrangements.

The December 31, 2023, amounts have been corrected to disclose the fair values by level on a gross basis, as presented above.

Fair Value Methods

We use the following methods and assumptions in estimating the fair value of our financial instruments:

The following methods and assumptions are used in estimating the fair value of financial instruments:

Assets Measured at Fair Value on a Recurring Basis

ARO Trust investments

Transco deposits a portion of its collected rates, pursuant to its rate case settlement, into an external trust that is specifically designated to fund future AROs.

The ARO Trust invests in a portfolio of actively traded mutual funds that are measured at fair value on a recurring basis based on quoted prices in an active market and is reported in Regulatory assets, deferred charges, and other in our Consolidated Balance Sheet.

Both realized and unrealized gains and losses are ultimately recorded as regulatory assets or liabilities.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Transco is entitled to collect rates in the amounts necessary to fund its future AROs and deposits a portion of the collected rates, pursuant to the terms of its Docket Number RP18-1126 rate case settlement, into an ARO Trust.

The ARO Trust invests in a moderate risk portfolio of actively traded mutual funds that are measured at fair value on a recurring basis based on quoted prices in an active market and is reported in Regulatory assets, deferred charges, and other in Williams’ Consolidated Balance Sheet and in Deferred charges and other in the Transco Balance Sheet.

The Money Market Funds held in the ARO Trust are considered investments.

Both realized and unrealized gains and losses are ultimately recorded to the ARO regulatory asset.

Pursuant to the approved stipulation and agreement in Docket Number RP18-1126 the annual funding obligation effective March 1, 2020, is approximately $ 16 million, with deposits made monthly.

Transco investments within the ARO Trust were as follows:

December 31, 2024 December 31, 2023

Amortized Cost Basis

Money Market Funds

$ 27 $ 27 $ 26 $ 26

53 146 53 120

International Equity Funds

Municipal Bond Funds

$ 200 $ 297 $ 198 $ 269

Commodity derivatives

Commodity derivatives include exchange-traded contracts and OTC contracts, which consist of physical forwards, futures, and swaps that are measured at fair value on a recurring basis.

We also have other derivatives related to asset management agreements and other contracts that require physical delivery.

Williams’ commodity derivatives include exchange-traded contracts and OTC contracts, which consist of physical forwards, futures, and swaps that are measured at fair value on a recurring basis.

Williams also has other derivatives related to asset management agreements and other contracts that require physical delivery.

Derivatives classified as Level 1 are valued using New York Mercantile Exchange (NYMEX) futures prices.

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Derivatives classified as Level 3 are valued using a combination of observable and unobservable inputs.

The fair value amounts are presented on a net basis and reflect the netting of asset and liability positions permitted under the terms of our master netting arrangements and cash held on deposit in margin accounts that we have received or remitted to collateralize certain derivative positions.

Commodity derivative assets are reported in Derivative assets and Regulatory assets, deferred charges, and other in our Consolidated Balance Sheet.

Commodity derivative liabilities are reported in Derivative liabilities and Regulatory liabilities, deferred income, and other in our Consolidated Balance Sheet.

Changes in the fair value of our derivative assets and liabilities are recorded in Net gain (loss) from commodity derivatives and Net processing commodity expenses in our Consolidated Statement of Income.

See Note 16 – Commodity Derivatives for additional information on our derivatives.

The following table presents a reconciliation of changes in fair value of our net commodity derivatives classified as Level 3 in the fair value hierarchy.

See Note 17 – Commodity Derivatives for additional information.

Notes (Continued)

The following table presents a reconciliation of changes in fair value of the net commodity derivatives classified as Level 3 in the fair value hierarchy.

Year Ended December 31,

Balance at beginning of period $ 53 $ ( 56 )

Gains (losses) included in our Consolidated Statement of Income 91 ( 31 )

Gains (losses) included in Williams’ Consolidated Statement of Income

Purchases, issuances, and settlements ( 1 ) 20

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Balance at end of period $ 48 $ 53

A substantial portion of the carrying value of our Level 3 derivatives at December 31, 2023, relates to a long-term physical natural gas purchase contract associated with an ongoing pipeline expansion project.

A substantial portion of the December 31, 2024, and December 31, 2023, Level 3 derivatives relate to a long-term physical natural gas purchase contract associated with an ongoing pipeline expansion project.

The valuation of this contract reflects the extrapolation of forward natural gas prices for periods beyond observable price curves, which is considered a significant unobservable input.

Interest rate derivatives

At December 31, 2023, we held forward starting interest rate swap agreements with notional amounts totaling $ 1.15 billion.

During January 2024 we terminated certain of these agreements totaling $ 750 million of notional value coinciding with the issuance of long-term debt (see Note 12 – Debt and Banking Arrangements).

At December 31, 2023, Williams held interest rate derivative agreements with notional amounts totaling $ 1.15 billion.

During 2024, Williams entered into additional agreements totaling $ 950 million of notional value and terminated agreements totaling $ 1.75 billion of notional value coinciding with issuances of long-term debt (see Note 13 – Debt and Banking Arrangements).

At December 31, 2024, Williams holds interest rate derivative agreements with notional amounts totaling $ 350 million.

The fair value of these derivatives is determined using discounted cash flows considering forward interest rates and the terms of the agreements, corroborated by counterparty valuations, and is classified as a Level 2 measurement.

We designated these derivatives as cash flow hedges to reduce interest rate exposure on future debt issuances.

Gains and losses on these derivative instruments are reflected as a component of AOCI and will be amortized to earnings as a component of Interest expense in our Consolidated Statement of Income.

These forward starting interest rate swaps are reported in Derivative assets and Derivative liabilities in our Consolidated Balance Sheet.

These derivatives are designated as cash flow hedges to reduce interest rate exposure on future corporate debt issuances.

Gains and losses on these derivative agreements are reflected as a component of AOCI and, after the termination of the agreements, are amortized to earnings over the term of the related debt as a component of Interest expense .

These interest rate derivative agreements are reported in Derivative assets and Derivative liabilities .

Additional Fair Value Disclosures

Long-term debt, including current portion

The disclosed fair value of our long-term debt is determined primarily by a market approach using broker quoted indicative period-end bond prices.

The quoted prices are based on observable transactions in less active markets for our debt or similar instruments.

The fair values of the financing obligations associated with our Dalton, Leidy South, and Atlantic Sunrise projects, as well as the deferred

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

consideration obligation associated with the RMM Acquisition (see Note 3 – Acquisitions and Divestitures), all included within long-term debt, were determined using an income approach (see Note 12 – Debt and Banking Arrangements).

Guarantees primarily consist of a guarantee we have provided in the event of nonpayment by our previously owned communications subsidiary, Williams Communications Group, Inc., (WilTel), on a lease performance obligation that extends through 2042.

The disclosed fair value of long-term debt is determined primarily by a market approach using broker quoted indicative period-end bond prices.

The quoted prices are based on observable transactions in less active markets for the debt or similar instruments.

The fair values of the financing obligations associated with Transco’s Dalton, Leidy South, and Atlantic Sunrise projects, as well as the deferred consideration obligations associated with the RMM Acquisition and the Gulf Coast Storage Acquisition (see Note 3 – Acquisitions and Divestitures), all included within long-term debt including current portion, were determined using an income approach (see Note 13 – Debt and Banking Arrangements).

Guarantees primarily consist of a guarantee Williams has provided in the event of nonpayment by a previously owned communications subsidiary, Williams Communications Group, Inc., (WilTel), on a lease performance obligation that extends through 2042.

Guarantees also include an indemnification related to a disposed operation.

To estimate the fair value of the WilTel guarantee, an estimated default rate is applied to the sum of the future contractual lease payments using an income approach.

The estimated default rate is determined by obtaining the average cumulative issuer-weighted default rate based on the credit rating of WilTel’s current owner and the term of the underlying obligation.

The estimated default rate is determined by obtaining the

Notes (Continued)

average cumulative issuer-weighted default rate based on the credit rating of WilTel’s current owner and the term of the underlying obligation.

The default rate is published by Moody’s Investors Service.

The carrying value of the WilTel guarantee is reported in Accrued and other current liabilities in our Consolidated Balance Sheet.

The carrying value of the WilTel guarantee is reported in Other current liabilities .

The maximum potential undiscounted liquidity exposure is approximately $ 22 million at December 31, 2024.

Our exposure declines systematically through the remaining term of WilTel’s obligation.

The exposure declines systematically through the remaining term of WilTel’s obligation.

The fair value of the guarantee associated with the indemnification related to a disposed operation was estimated using an income approach that considered probability-weighted scenarios of potential levels of future performance.

The terms of the indemnification do not limit the maximum potential future payments associated with the guarantee.

The carrying value of this guarantee is reported in Regulatory liabilities, deferred income, and other in our Consolidated Balance Sheet.

We are required by our revolving credit agreement to indemnify lenders for certain taxes required to be withheld from payments due to the lenders and for certain tax payments made by the lenders.

The carrying value of this guarantee is reported in Regulatory liabilities, deferred income, and other .

Williams is required by its revolving credit agreement to indemnify lenders for certain taxes required to be withheld from payments due to the lenders and for certain tax payments made by the lenders.

The maximum potential amount of future payments under these indemnifications is based on the related borrowings and such future payments cannot currently be determined.

These indemnifications generally continue indefinitely unless limited by the underlying tax regulations and have no carrying value.

We have never been called upon to perform under these indemnifications and have no current expectation of a future claim.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Williams has never been called upon to perform under these indemnifications and there is no current expectation of a future claim.

Concentration of Credit Risk

Accounts receivable

The following table summarizes concentration of receivables, net of allowances:

The following table summarizes Williams’ concentration of receivables, net of allowances:

NGLs, natural gas, and related products and services $ 594 $ 589

6 unchanged sentences

Trade accounts and other receivables - net $ 1,863 $ 1,655

Customers include producers, distribution companies, industrial users, gas marketers, and pipelines primarily located in the continental United States.

Williams’ customers include producers, distribution companies, industrial users, gas marketers, and pipelines primarily located in the continental United States.

As a general policy, collateral is not required for receivables with the exception of the marketing receivables discussed below.

Customers’ financial condition and credit worthiness are evaluated regularly and, based upon this evaluation, we may obtain collateral to support receivables.

We use established credit policies to determine and monitor the creditworthiness of gas marketing and trading counterparties, including requirements to post collateral or other credit security, as well as the quality of pledged collateral.

Customers’ financial condition and credit worthiness are evaluated regularly and, based upon this evaluation, Williams may obtain collateral to support receivables.

Williams uses established credit policies to determine and monitor the creditworthiness of gas marketing and trading counterparties, including requirements to post collateral or other credit security, as well as the quality of pledged collateral.

Collateral or credit security is most often in the form of cash or letters of credit from an investment-grade financial institution, but may also include U.S.

government securities.

We also utilize netting agreements whenever possible to mitigate exposure to gas marketing and trading counterparty credit risk.

When more than one derivative transaction with the same counterparty is outstanding and a legally enforceable netting agreement exists with that counterparty, the “net” mark-to-market exposure represents a reasonable measure of our credit risk with that counterparty.

Williams also utilizes netting agreements whenever possible to mitigate exposure to gas marketing and trading counterparty credit risk.

Transco and NWP receivables from contracts with customers are included within Receivables - Trade and Receivables - Affiliates.

Receivables that are not related to contracts with customers are included within the balance of Receivables - Advances to affiliate and Receivables - Other .

Notes (Continued)

Customers representing 10 percent or more of Transco’s and NWP’s revenues include:

Year Ended December 31,

2024 2023 2022

Dominion Energy, Inc (1) $ 217 $ 287 $ 293

Puget Sound Energy, Inc.

$ 136 $ 126 $ 131

Cascade Natural Gas Corporation 46 47 49

Northwest Natural Gas Company 47 47 49

_______________

(1) The 2024 amount is less than 10 percent of Transco’s revenue .

Note 17 – Commodity Derivatives

We are exposed to commodity price risk.

To manage this volatility, we use various contracts in our marketing and trading activities that generally meet the definition of derivatives.

Derivative positions are monitored using techniques including, but not limited to, value at risk.

Derivative instruments are recognized at fair value in our Consolidated Balance Sheet as either assets or liabilities and are presented on a net basis by counterparty, net of margin deposits.

Williams is exposed to commodity price risk and utilizes derivatives to manage a portion of that risk.

Williams reports the fair value of commodity derivatives in Derivative assets ;

Regulatory assets, deferred charges, and other ;

Derivative liabilities ;

or Regulatory liabilities, deferred income, and other .

These amounts are presented on a net basis by counterparty and reflect the netting of asset and liability positions permitted under the terms of master netting arrangements and cash held on deposit in margin accounts that Williams has received or remitted to collateralize certain derivative positions.

See Note 16 – Fair Value Measurements, Guarantees, and Concentration of Credit Risk for additional fair value information.

In our Consolidated Statement of Cash Flows, any cash impacts of settled commodity derivatives are recorded as operating activities.

We enter into commodity derivatives to economically hedge exposures to natural gas, NGLs, and crude oil and retain exposure to price changes that can, in a volatile energy market, be material and can adversely affect our results of operations.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

At December 31, 2023, the notional volume of the net long (short) positions for our commodity derivative contracts were as follows:

In Williams’ Consolidated Statement of Cash Flows, any cash impacts of settled commodity derivatives are recorded as operating activities.

Williams enters into commodity derivatives to economically hedge exposures to natural gas, NGLs, and crude oil and retains exposure to price changes that can, in a volatile energy market, be material and can adversely affect its results of operations.

At December 31, 2024, the notional volume of the net long (short) positions for Williams’ commodity derivative contracts were as follows:

Commodity Unit of Measure Net Long (Short) Position

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Central Hub Risk - WTI Crude Oil Barrels ( 480,000 )

Commodity Derivatives Financial Statement Presentation

The fair value of commodity derivatives, which are not designated as hedging instruments for accounting purposes, was reflected as follows:

Notes (Continued)

Financial Statement Presentation

The fair value of commodity derivatives, which are not designated as hedging instruments for accounting purposes, is reflected as follows:

2024 December 31,

6 unchanged sentences

Counterparty and collateral netting offset ( 382 ) 670 ( 552 ) 554

Amounts recognized in our Consolidated Balance Sheet $ 314 $ ( 287 ) $ 334 $ ( 776 )

The pre-tax effects of commodity derivative instruments in our Consolidated Statement of Income were as follows:

Amounts recognized in Williams’ Consolidated Balance Sheet $ 344 $ ( 400 ) $ 314 $ ( 287 )

The pre-tax impacts of Williams’ commodity derivatives, which are not designated as hedging instruments for accounting purposes, are reflected as follows:

Year Ended December 31,

1 unchanged sentence

Net gain (loss) from commodity derivatives within Total revenues :

Realized commodity derivatives designated as hedging instruments $ — $ — $ ( 55 )

Realized commodity derivatives not designated as hedging instruments 253 ( 91 ) 16

Unrealized commodity derivatives not designated as hedging instruments 703 ( 296 ) ( 109 )

$ 111 $ 253 $ ( 91 )

( 361 ) 703 ( 296 )

$ ( 250 ) $ 956 $ ( 387 )

Net gain (loss) from commodity derivatives within Net processing commodity expenses :

Realized commodity derivatives not designated as hedging instruments $ ( 4 ) $ 16 $ 2

Unrealized commodity derivatives not designated as hedging instruments ( 43 ) 47 —

$ ( 8 ) $ ( 4 ) $ 16

( 6 ) ( 43 ) 47

$ ( 14 ) $ ( 47 ) $ 63

Total net gain (loss) from commodity derivatives

$ ( 264 ) $ 909 $ ( 324 )

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Contingent Features

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If collateral is required, fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral are offset against fair value amounts recognized for derivatives executed with the same counterparty.

We have specific trade and credit contracts that contain minimum credit rating requirements.

These credit rating requirements typically give counterparties the right to suspend or terminate credit if our credit ratings are downgraded to non-investment grade status.

Under such circumstances, we would need to post collateral to continue transacting business with these counterparties.

Williams has specific trade and credit contracts that contain minimum credit rating requirements.

These credit rating requirements typically give counterparties the right to suspend or terminate credit if Williams’ credit ratings are downgraded to non-investment grade status.

Under such circumstances, Williams would need to post collateral to continue transacting business with these counterparties.

At December 31, 2024, the contractually required collateral in the event of a credit rating downgrade to non-investment grade status was $ 6 million.

We maintain accounts with brokers or the clearing houses of certain exchanges to facilitate financial derivative transactions.

Based on the value of the positions in these accounts and the associated margin requirements, we may be required to deposit cash into these accounts.

Williams maintains accounts with brokers or the clearing houses of certain exchanges to facilitate financial derivative transactions.

Based on the value of the positions in these accounts and the associated margin requirements, Williams may be required to deposit cash into these accounts.

At December 31, 2024, and 2023, net cash collateral held on deposit in broker margin accounts was $ 288 million, and $ 2 million, respectively.

Notes (Continued)

Note 18 – Contingencies and Commitments

Alaska Refinery Contamination Litigation

We are involved in litigation arising from our ownership and operation of the North Pole Refinery in North Pole, Alaska, from 1980 until 2004, through our wholly owned subsidiaries Williams Alaska Petroleum Inc.

(WAPI) and MAPCO Inc.

We sold the refinery to Flint Hills Resources Alaska, LLC (FHRA), a subsidiary of Koch Industries, Inc., in 2004.

The litigation involves three cases, with filing dates ranging from 2010 to 2014.

The actions primarily arise from sulfolane contamination allegedly emanating from the refinery.

A putative class action lawsuit was filed by James West in 2010 naming us, WAPI, and FHRA as defendants.

We and FHRA filed claims against each other seeking, among other things, contractual indemnification alleging that the other party caused the sulfolane contamination.

In 2011, we and FHRA settled the claim with James West.

Certain claims by FHRA against us were resolved by the Alaska Supreme Court in our favor.

FHRA’s claims against us for contractual indemnification and statutory claims for damages related to off-site sulfolane were remanded to the Alaska Superior Court.

The State of Alaska filed its action in March 2014, seeking damages.

The City of North Pole (North Pole) filed its lawsuit in November 2014, seeking past and future damages, as well as punitive damages.

Both we and WAPI asserted counterclaims against the State of Alaska and North Pole, and cross-claims against FHRA.

FHRA has also filed cross-claims against us.

The underlying factual basis and claims in the cases are similar and may duplicate exposure.

As such, in February 2017, the three cases were consolidated into one action in state court containing the remaining claims from the James West case and those of the State of Alaska and North Pole.

The State of Alaska later announced the discovery of additional contaminants per- and polyfluoralkyl (PFOS and PFOA) offsite of the refinery, and the court permitted the State of Alaska to amend its complaint to add a claim for offsite PFOS/PFOA contamination.

The court subsequently remanded the offsite PFOS/PFOA claims to the Alaska Department of Environmental Conservation for investigation and stayed the claims pending their potential resolution at the administrative agency.

Several trial dates encompassing all three cases have been scheduled and stricken.

In the summer of 2019, the court deconsolidated the cases for purposes of trial.

A bench trial on all claims except North Pole’s claims began in October 2019.

In January 2020, the Alaska Superior Court issued its Memorandum of Decision finding in favor of the State of Alaska and FHRA, with the total incurred and potential future damages estimated to be $ 86 million, plus fees and interest.

The court found that FHRA is not entitled to contractual indemnification from us because FHRA contributed to the sulfolane contamination.

On March 23, 2020, the court entered final judgment in the case.

Filing deadlines were stayed until May 1, 2020.

However, on April 21, 2020, we filed a Notice of Appeal.

We also filed post-judgment motions including a Motion for New Trial and a Motion to Alter or Amend the Judgment.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

post-trial motions were resolved with the court’s denial of the last motion on June 11, 2020.

Our Statement of Points on Appeal was filed on July 13, 2020.

On June 22, 2020, the court stayed the North Pole’s case pending resolution of the appeal in the State of Alaska and FHRA case.

On December 23, 2020, we filed our opening brief on appeal.

Oral argument was held on December 15, 2021.

On May 26, 2023, the Alaska Supreme Court issued its Opinion substantially affirming the Superior Court’s decision.

On July 18, 2023, the Superior Court granted our stay of execution of the monetary judgment portions of the judgment while we seek review before the United States Supreme Court.

On September 25, 2023, we filed a Petition for a Writ of Certiorari with the United States Supreme Court, which was subsequently denied in January 2024.

The North Pole claims were also settled in January 2024.

During 2023, we recorded pre-tax charges of $ 125 million to Income (loss) from discontinued operations in our Consolidated Statement of Income related to these matters.

Payments were made in January 2024 and the claims against us are now resolved.

Royalty Matters

Certain of our customers, including Chesapeake Energy Corporation (Chesapeake), have been named in various lawsuits alleging underpayment of royalties and claiming, among other things, violations of anti-trust laws and the Racketeer Influenced and Corrupt Organizations Act.

We have also been named as a defendant in certain of these cases filed in Pennsylvania based on allegations that we improperly participated with Chesapeake in causing the alleged royalty underpayments.

We believe that the claims asserted are subject to indemnity obligations owed to us by Chesapeake, which obligations survived Chesapeake’s bankruptcy proceedings.

Certain customers, including Expand Energy Corporation (formerly Chesapeake Energy Corporation or Chesapeake), have been named in various lawsuits alleging underpayment of royalties and claiming, among other things, violations of anti-trust laws and the Racketeer Influenced and Corrupt Organizations Act.

Williams has also been named as a defendant in certain of these cases filed in Pennsylvania based on allegations that Williams improperly participated with Chesapeake in causing the alleged royalty underpayments.

Williams believes that the claims asserted are subject to indemnity obligations owed to Williams by Chesapeake, which obligations survived Chesapeake’s bankruptcy proceedings.

Prior to its bankruptcy, Chesapeake reached a settlement to resolve substantially all Pennsylvania royalty cases pending.

During the pendency of the bankruptcy, that settlement was renegotiated.

The settlement applies to both Chesapeake and us and does not require any contribution from us.

The settlement applies to both Chesapeake and Williams and does not require any contribution from Williams.

On August 23, 2021, after referral to the United States District Court for the Southern District of Texas by the bankruptcy court, the court approved the settlement.

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Certain plaintiffs have filed a notice of dismissal of their claims against Chesapeake that arose prior to February 8, 2021, in the United States District Court for the Middle District of Pennsylvania lawsuits.

The notice states that plaintiffs are not releasing their claims against the other defendants, including us, or claims against Chesapeake that arose after February 9, 2021.

We continue to believe the claims against us are subject to indemnity obligations owed to us by Chesapeake.

Litigation Against Energy Transfer and Related Parties

On April 6, 2016, we filed suit in Delaware Chancery Court against Energy Transfer Equity, L.P.

(Energy Transfer) and LE GP, LLC (the general partner for Energy Transfer) alleging willful and material breaches of the Agreement and Plan of Merger (ETE Merger Agreement) with Energy Transfer resulting from the private offering by Energy Transfer on March 8, 2016, of Series A Convertible Preferred Units (Special Offering) to certain Energy Transfer insiders and other accredited investors.

The suit seeks, among other things, an injunction ordering the defendants to unwind the Special Offering and to specifically perform their obligations under the ETE Merger Agreement.

On April 19, 2016, we filed an amended complaint seeking the same relief.

On May 3, 2016, Energy Transfer and LE GP, LLC filed an answer and counterclaims.

On May 13, 2016, we filed a separate complaint in Delaware Chancery Court against Energy Transfer, LE GP, LLC and the other Energy Transfer affiliates that are parties to the ETE Merger Agreement, alleging material breaches of the ETE Merger Agreement for failing to cooperate and use necessary efforts to obtain a tax opinion required under the ETE Merger Agreement (Tax Opinion) and for otherwise failing to use necessary efforts to consummate the merger under the ETE Merger Agreement wherein we would be merged with and into the newly formed Energy Transfer Corp LP (ETC) (ETC Merger).

The suit sought, among other things, a declaratory judgment and injunction preventing Energy Transfer from terminating or otherwise avoiding its obligations under the ETE Merger Agreement due to any failure to obtain the Tax Opinion.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

The Court of Chancery coordinated the Special Offering and Tax Opinion suits.

On May 20, 2016, the Energy Transfer defendants filed amended affirmative defenses and verified counterclaims in the Special Offering and Tax Opinion suits, alleging certain breaches of the ETE Merger Agreement by us and seeking, among other things, a declaration that we were not entitled to specific performance, that Energy Transfer could terminate the ETC Merger, and that Energy Transfer is entitled to a $ 1.48 billion termination fee.

On June 24, 2016, following a two-day trial, the court issued a Memorandum Opinion and Order denying our requested relief in the Tax Opinion suit.

The court did not rule on the substance of our claims related to the Special Offering or on the substance of Energy Transfer’s counterclaims.

On June 27, 2016, we filed an appeal of the court’s decision with the Supreme Court of Delaware, seeking reversal and remand to pursue damages.

On March 23, 2017, the Supreme Court of Delaware affirmed the Court of Chancery’s ruling.

On March 30, 2017, we filed a motion for reargument with the Supreme Court of Delaware, which was denied on April 5, 2017.

On September 16, 2016, we filed an amended complaint with the Court of Chancery seeking damages for breaches of the ETE Merger Agreement by defendants.

On September 23, 2016, Energy Transfer filed a second amended and supplemental affirmative defenses and verified counterclaim with the Court of Chancery seeking, among other things, payment of the $ 1.48 billion termination fee due to our alleged breaches of the ETE Merger Agreement.

On December 1, 2017, the court granted our motion to dismiss certain of Energy Transfer’s counterclaims, including its claim seeking payment of the $ 1.48 billion termination fee.

On December 8, 2017, Energy Transfer filed a motion for reargument, which the Court of Chancery denied on April 16, 2018.

Trial was held May 10 through May 17, 2021.

On December 29, 2021, the court entered judgment in our favor in the amount of $ 410 million, plus interest at the contractual rate, and our reasonable attorneys’ fees and expenses.

On September 21, 2022, the court entered a final order and judgment awarding us the termination fee, attorney’s fees, expenses, and interest in the amount of $ 602 million plus additional interest starting September 17, 2022.

Energy Transfer appealed to the Delaware Supreme Court.

The Delaware Supreme Court held oral argument en banc on July 12, 2023.

On October 10, 2023, the Delaware Supreme Court issued an opinion affirming the Court of Chancery’s ruling.

On October 25, 2023, Energy Transfer filed a motion for reargument with the Delaware Supreme Court.

On November 28, 2023, we received a $ 627 million payment from Energy Transfer for the final order and judgment.

On the same day, we paid attorney fees which had been incurred on a contingent fee basis.

This resulted in a net gain of $ 534 million reported as Net gain from Energy Transfer litigation judgment in our Consolidated Statement of Income and included as a component of Modified EBITDA within our Other segment for the year ended December 31, 2023.

The notice states that plaintiffs are not releasing their claims against the other defendants, including Williams, or claims against Chesapeake that arose after February 9, 2021.

Williams continues to believe the claims against Williams are subject to indemnity obligations owed to Williams by Chesapeake.

On August 30, 2024, Transco filed a general rate case (Docket No.

RP24-1035) with the FERC for an overall increase in rates and to comply with the terms of the settlement of its prior rate case to file a rate case no later than August 30, 2024.

On September 30, 2024, the FERC issued an order accepting and suspending Transco’s general rate filing to be effective March 1, 2025, subject to refund and the outcome of hearing procedures established by the FERC except that rates for certain services that were proposed as overall rate decreases were accepted, without suspension, to be effective October 1, 2024.

The decreased rates will not be subject to refund but may be subject to decrease prospectively under Section 5 of the Natural Gas Act of 1938 as amended.

Construction Litigation

In February 2025, Transco received an adverse judgment related to litigation in the United States Bankruptcy Court for the District of Delaware involving the contractor for the construction of Transco’s Atlantic Sunrise project completed in 2018.

The total award to the contractor, estimated at $ 110 million, included amounts for unpaid invoices, interest, and attorney fees.

Management estimates the probable loss from the judgment to be substantially less and Transco has filed a notice of appeal.

Transco has capitalized the amount considered probable within noncurrent assets and expects any additional probable loss would also be capitalized.

Transco also expects to recover approximately 29 percent of any amount paid from the counterparty on the project.

Environmental Matters

We are a participant in certain environmental activities in various stages including assessment studies, cleanup operations, and/or remedial processes at certain sites, some of which we currently do not own.

We are monitoring these sites in a coordinated effort with other potentially responsible parties, the U.S.

Williams is a participant in certain environmental activities in various stages including assessment studies, cleanup operations, and/or remedial processes at certain sites, some of which Williams currently does not own.

Williams is monitoring these sites in a coordinated effort with other potentially responsible parties, the U.S.

Environmental Protection Agency (EPA), or other governmental authorities.

We are jointly and severally liable along with unrelated third parties in some of these activities and solely responsible in others.

Certain of our subsidiaries have been identified as potentially responsible parties at various Superfund and state waste disposal sites.

Williams is jointly and severally liable along with unrelated third parties in some of these activities and solely responsible in others.

Certain of Williams’

Notes (Continued)

subsidiaries have been identified as potentially responsible parties at various Superfund and state waste disposal sites.

In addition, these subsidiaries have incurred, or are alleged to have incurred, various other hazardous materials removal or remediation obligations under environmental laws.

As of December 31, 2023, we have accrued liabilities totaling $ 48 million for these matters, as discussed below.

Estimates of the most likely costs of cleanup are generally based on completed assessment studies, preliminary results of studies, or our experience with other similar cleanup operations.

As of December 31, 2024, Williams has accrued liabilities totaling $ 42 million for these matters, as discussed below.

Estimates of the most likely costs of cleanup are generally based on completed assessment studies, preliminary results of studies, or Williams’ experience with other similar cleanup operations.

At December 31, 2024, certain assessment studies were still in process for which the ultimate outcome may yield different estimates of most likely costs.

Therefore, the actual costs incurred will depend on the final amount, type, and extent of contamination discovered at these sites, the final cleanup standards mandated by the EPA or other governmental authorities, and other factors.

The EPA and various state regulatory agencies routinely propose and promulgate new rules and issue updated guidance to existing rules.

These rulemakings include, but are not limited to, rules for reciprocating internal

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

combustion engine and combustion turbine maximum achievable control technology, reviews and updates to the National Ambient Air Quality Standards, and rules for new and existing source performance standards for volatile organic compound and methane.

We continuously monitor these regulatory changes and how they may impact our operations.

Implementation of new or modified regulations may result in impacts to our operations and increase the cost of additions to Property, plant, and equipment – net in our Consolidated Balance Sheet for both new and existing facilities in affected areas;

however, due to regulatory uncertainty on final rule content and applicability timeframes, we are unable to reasonably estimate the cost of these regulatory impacts at this time.

The EPA, other federal agencies, and various state regulatory agencies routinely propose and promulgate new rules, issue updated guidance to rules, or revise existing rules.

These rulemakings include, but are not limited to, reviews and updates to the National Ambient Air Quality Standards, and promulgation of rules for new and existing source performance standards for certain equipment emitting volatile organic compound and methane as well as limitations on emissions of greenhouse gas compounds.

Williams continuously monitors these regulatory changes and how they may impact its operations.

Implementation of new or revised regulations may result in impacts to Williams’ operations and increase the cost of additions to Property, plant, and equipment – net in the balance sheet for both new and existing facilities in affected areas;

however, due to regulatory uncertainty on final rule content or guidance and applicability timeframes, Williams is unable to reasonably estimate the cost of these regulatory impacts at this time.

Continuing operations

Our interstate gas pipelines are involved in remediation and monitoring activities related to certain facilities and locations for polychlorinated biphenyls, mercury, and other hazardous substances.

These activities have involved the EPA and various state environmental authorities, resulting in our identification as a potentially responsible party at various Superfund waste sites.

At December 31, 2023, we have accrued liabilities of $ 12 million for these costs and expect to recover approximately $ 4 million through rates.

We also accrue environmental remediation costs for natural gas underground storage facilities, primarily related to soil and groundwater contamination.

At December 31, 2023, we have accrued liabilities totaling $ 10 million for these costs.

Williams’ interstate gas pipelines are involved in remediation and monitoring activities related to certain facilities and locations for polychlorinated biphenyls, mercury, and other hazardous substances.

These activities have involved the EPA and various state environmental authorities, resulting in Williams’ identification as a potentially responsible party at various Superfund waste sites.

At December 31, 2024, Williams has accrued liabilities of $ 12 million (see Transco and NWP below) for these costs and expect to recover approximately $ 4 million through rates.

Williams also accrues environmental remediation costs for natural gas underground storage facilities, primarily related to soil and groundwater contamination.

At December 31, 2024, Williams has accrued liabilities totaling $ 7 million for these costs.

Former operations

We have potential obligations in connection with assets and businesses we no longer operate.

Williams has potential obligations in connection with assets and businesses it no longer operates.

These potential obligations include remediation activities at the direction of federal and state environmental authorities and the indemnification of the purchasers of certain of these assets and businesses for environmental and other liabilities existing at the time the sale was consummated.

Our responsibilities relate to the operations of the assets and businesses described below.

• Former agricultural fertilizer and chemical operations and former retail petroleum and refining operations;

• Former petroleum products and natural gas pipelines;

• Former petroleum refining facilities;

• Former exploration and production and mining operations;

• Former electricity and natural gas marketing and trading operations.

At December 31, 2023, we have accrued environmental liabilities of $ 26 million related to these matters.

At December 31, 2024, Williams has accrued environmental liabilities of $ 23 million related to these matters.

Transco has had studies underway for many years to test some of its facilities for the presence of toxic and hazardous substances such as polychlorinated biphenyls (PCBs) and mercury to determine to what extent, if any, remediation may be necessary.

Transco has also similarly evaluated past on-site disposal of hydrocarbons at a number of its facilities.

Transco has worked closely with and responded to data requests from the EPA and state agencies regarding such potential contamination of certain of their sites.

Transco is conducting environmental assessments and implementing a variety of remedial measures that may result in increases or decreases in the total estimated costs.

Transco also has a program for monitoring certain environmental activities at their Eminence storage facility.

At December 31, 2024, Transco has accrued liabilities of approximately $ 11 million for the expected ongoing remediation and monitoring costs.

Notes (Continued)

Transco has been identified as a potentially responsible party (PRP) at various Superfund and state waste disposal sites.

Based on present volumetric estimates and other factors, their estimated aggregate exposure for remediation of these sites is less than $ 1 million.

The estimated remediation costs for all of these sites are included in the environmental liabilities discussed above.

Liability under the Comprehensive Environmental Response, Compensation and Liability Act and applicable state law can be joint and several with other PRPs.

Although volumetric allocation is a factor in assessing liability, it is not necessarily determinative;

thus, the ultimate liability could be substantially greater than the amounts described above.

Transco considers prudently incurred environmental assessment and remediation costs and the costs associated with compliance with environmental standards to be recoverable through rates.

Historically, with limited exceptions, it has been permitted recovery of environmental costs, and it is Transco’s intent to continue seeking recovery of such costs through future rate filings.

Beginning in the mid-1980s, NWP evaluated many of its facilities for the presence of toxic and hazardous substances to determine to what extent, if any, remediation might be necessary.

NWP identified PCB contamination in air compressor systems, soils, and related properties at certain compressor station sites.

Similarly, it identified hydrocarbon impacts at these facilities due to the former use of earthen pits, lubricating oil leaks or spills, and excess pipe coating released to the environment.

In addition, heavy metals have been identified at these sites due to the former use of mercury containing meters and paint and welding rods containing lead, cadmium, and arsenic.

The PCBs were remediated pursuant to a Consent Decree with the EPA in the late 1980s, and NWP conducted a voluntary clean-up of the hydrocarbon and mercury impacts in the early 1990s.

In 2005, the Washington Department of Ecology required NWP to re-evaluate previous clean-ups in Washington.

During 2006 to 2015, 129 meter stations were evaluated, of which 82 required remediation.

As of December 31, 2024, two meter stations are still being remediated.

During 2006 to 2018, 14 compressor stations were evaluated, of which 11 required remediation.

As of December 31, 2024, four compressor stations are still being remediated.

NWP had accrued liabilities totaling approximately $ 1 million at December 31, 2024 for the ongoing remediation.

NWP is conducting environmental assessments and implementing a variety of remedial measures that may result in increases or decreases in the total estimated costs.

Environmental expenditures are expensed or capitalized depending on their future economic benefit and potential for rate recovery.

NWP believes that, with respect to any expenditures required to meet applicable standards and regulations, the FERC would grant the requisite rate relief so that substantially all of such expenditures would be permitted to be recovered through rates.

Washington State Climate Commitment Act

In 2021, the state of Washington passed its Climate Commitment Act establishing a market-based cap-and-invest program to reduce carbon emissions.

This program took effect on January 1, 2023, and sets a limit, or cap, on overall carbon emissions in the state and requires businesses like NWP to obtain allowances equal to their annual covered carbon emissions.

The state’s cap will be reduced over time to meet the state’s carbon emissions reduction targets, which means fewer carbon emissions allowances will be available to purchase each year.

These allowances can be purchased through quarterly auctions hosted by the state or bought and sold on a secondary market.

In 2023, NWP began purchasing allowances for the carbon emissions from nine of its thirteen compressor stations within the state whose annual carbon emissions have exceeded 25,000 metric tons of carbon dioxide equivalent at least once since 2015.

NWP also began purchasing allowances for NWP’s delivery of natural gas to certain of their customers and certain of their facilities in the state whose annual carbon emissions are insufficient to require their direct participation in the program.

NWP’s latest rate case settlement allows them to recover the costs of purchasing allowances under the program in their next rate case.

At December 31, 2024 and December 31, 2023, a total of $ 38 million and $ 22 million, respectively, were included in Regulatory assets in NWP’s Balance Sheet and was comprised of the cost of the purchased allowances

Notes (Continued)

held, the estimated difference between the allowances held and the allowances required, and the interest income component of the regulatory asset.

At December 31, 2024 and December 31, 2023, $ 3 million and $ 4 million, respectively, were recorded in Other current liabilities on NWP’s Balance Sheet as the estimated difference.

Interest income of $ 2 million for the year ended December 31, 2024 and $ 1 million for the year ended December 31, 2023 is reflected in Other income (expense) – net in NWP’s Statement of Net Income.

Other Divestiture Indemnifications

Pursuant to various purchase and sale agreements relating to divested businesses and assets, we have indemnified certain purchasers against liabilities that they may incur with respect to the businesses and assets acquired from us.

Pursuant to various purchase and sale agreements relating to divested businesses and assets, Williams has indemnified certain purchasers against liabilities that they may incur with respect to the businesses and assets acquired.

The indemnities provided to the purchasers are customary in sale transactions and are contingent upon the purchasers incurring liabilities that are not otherwise recoverable from third parties.

The indemnities generally relate to breach of warranties, tax, historic litigation, personal injury, property damage, environmental matters, right of way, and other representations that we have provided.

At December 31, 2023, other than as previously disclosed, we are not aware of any material claims against us involving the above-described indemnities;

thus, we do not expect any of the indemnities provided pursuant to the sales agreements to have a material impact on our future financial position.

Any claim for indemnity brought against us in the future may have a material adverse effect on our results of operations in the period in which the claim is made.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

In addition to the foregoing, various other proceedings are pending against us that are incidental to our operations, none of which are expected to be material to our expected future annual results of operations, liquidity, and financial position.

We have disclosed our estimated range of reasonably possible losses for certain matters above, as well as all significant matters for which we are unable to reasonably estimate a range of possible loss.

We estimate that for all other matters for which we are able to reasonably estimate a range of loss, our aggregate reasonably possible losses beyond amounts accrued are immaterial to our expected future annual results of operations, liquidity, and financial position.

At December 31, 2024, other than as previously disclosed, Williams is not aware of any material claims against it involving the above-described indemnities.

Any claim for indemnity brought against Williams in the future may have a material adverse effect on Williams’ results of operations in the period in which the claim is made.

In addition to the foregoing, various other proceedings are pending against Williams that are incidental to its operations, none of which are expected to be material to Williams’ expected future annual results of operations, liquidity, and financial position.

Williams, Transco and NWP have disclosed estimated ranges of reasonably possible losses for certain matters above, as well as all significant matters for which they are unable to reasonably estimate a range of possible loss.

Williams, Transco and NWP estimate that for all other matters for which they are able to reasonably estimate a range of loss, the aggregate reasonably possible losses beyond amounts accrued are immaterial to expected future annual results of operations, liquidity, and financial position.

These calculations have been made without consideration of any potential recovery from third parties.

Commitments for construction and acquisition of property, plant, and equipment are approximately $ 243 million at December 31, 2023.

Commitments for Gas & NGL Marketing Services pipeline transportation capacity and storage capacity are approximately $ 954 million at December 31, 2024.

Commitments for construction and acquisition of property, plant, and equipment for Williams, Transco, and NWP are approximately $ 155 million, $ 2 million, and less than $ 1 million, respectively at December 31, 2024.

Note 19 – Segment Disclosures

Our reportable segments are Transmission & Gulf of Mexico, Northeast G&P, West, and Gas & NGL Marketing Services.

Williams’ reportable segments are Transmission & Gulf of America, Northeast G&P, West, and Gas & NGL Marketing Services.

All remaining business activities are included in Other.

1 unchanged sentence

Performance Measurement

We evaluate segment operating performance based upon Modified EBITDA .

This measure represents the basis of our internal financial reporting and is the primary performance measure used by our chief operating decision maker in measuring performance and allocating resources among our reportable segments.

Intersegment Service revenues primarily represent transportation services provided to our marketing business and gathering services provided to our oil and gas properties.

Intersegment Product sales primarily represent the sale of natural gas and NGLs from our natural gas processing plants and our oil and gas properties to our marketing business.

We define Modified EBITDA as follows:

• Net income (loss) before:

◦ Income (loss) from discontinued operations;

◦ Provision (benefit) for income taxes;

◦ Interest expense;

◦ Equity earnings (losses);

◦ Other investing income (loss) – net;

◦ Depreciation and amortization expenses;

◦ Accretion expense associated with asset retirement obligations for nonregulated operations.

• This measure is further adjusted to include our proportionate share (based on ownership interest) of Modified EBITDA from our equity-method investments calculated consistently with the definition described above.

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Significant noncash items which are components of Modified EBITDA may include unrealized net gain (loss) from commodity derivatives within Total revenues, unrealized net gain (loss) from commodity derivatives within Net processing commodity expenses for our Gas & NGL Marketing segment, charges associated with lower of cost or net realizable value adjustments to our Gas & NGL Marketing segment inventory within Product sales and Product costs in our Consolidated Statement of Income, and impairments of certain assets within Other (income) expense – net within Operating income (loss) .

The following table reflects the reconciliation of Modified EBITDA to Net income (loss) as reported in our Consolidated Statement of Income:

Year Ended December 31,

2023 2022 2021

Modified EBITDA by segment:

Transmission & Gulf of Mexico $ 3,068 $ 2,674 $ 2,621

Northeast G&P 1,916 1,796 1,712

West 1,238 1,211 961

Gas & NGL Marketing Services

950 ( 40 ) 22

Total reportable segments

7,172 5,641 5,316

Modified EBITDA of other business activities

8,013 6,075 5,494

Accretion expense associated with asset retirement obligations for nonregulated operations ( 59 ) ( 51 ) ( 45 )

Williams’ chief operating decision maker is the Chief Executive Officer.

Williams' chief operating decision maker primarily utilizes Modified EBITDA, its measure of segment profit and loss, to evaluate performance and make decisions on capital allocation and human resources.

Such evaluation includes periodic comparisons of actual performance versus historical and budget, as well as projections of Modified EBITDA .

Notes (Continued)

Williams defines Modified EBITDA as follows:

• Income (loss) before income taxes from continuing operations before:

◦ Depreciation and amortization expenses;

1 unchanged sentence

◦ Other investing income (loss) – net;

Proportional Modified EBITDA of equity-method investments ( 939 ) ( 979 ) ( 970 )

◦ Interest expense;

(Provision) benefit for income taxes ( 1,005 ) ( 425 ) ( 511 )

Income (loss) from discontinued operations ( 97 ) — —

Net income (loss) $ 3,303 $ 2,117 $ 1,562

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

The following table reflects the reconciliation of Segment revenues to Total revenues as reported in our Consolidated Statement of Income and Other financial information :

Transmission & Gulf of Mexico Northeast G&P West Gas & NGL Marketing Services (1) Other Eliminations Total

◦ Accretion expense associated with AROs for nonregulated operations.

• This measure is further adjusted to include Williams’ proportionate share (based on ownership interest) of Modified EBITDA from its equity-method investments calculated consistently with the definition described above.

Significant noncash items which are components of Modified EBITDA may include net unrealized gain (loss) from commodity derivatives within Total revenues, net unrealized gain (loss) from commodity derivatives within Net processing commodity expenses for Williams’ Gas & NGL Marketing Services segment, charges associated with lower of cost or net realizable value adjustments to the Gas & NGL Marketing Services segment inventory within Product sales (for natural gas marketing inventory as these sales are presented net of the related costs) and Product costs (for NGL marketing inventory), and impairments of certain assets within Other (income) expense – net within Operating income (loss) .

Intersegment Service revenues primarily represent transportation services provided to Williams’ marketing business and gathering services provided to its oil and gas properties.

Intersegment Product sales primarily represent the sale of natural gas and NGLs from Williams’ natural gas processing plants and its oil and gas properties to its marketing business.

Segment assets include Investments , Property, plant, and equipment – net, and Intangible assets – net of accumulated amortization .

Notes (Continued)

The following tables present revenues, Modified EBITDA , significant expenses, and certain segment assets measures, as well as reconciliations to the consolidated totals:

Transmission & Gulf of America Northeast G&P West Gas & NGL Marketing Services (1) Total

Segment revenues:

Service revenues

$ 3,766 $ 1,868 $ 1,376 $ 1 $ 15 $ — $ 7,026

92 28 126 — 1 ( 247 ) —

External $ 4,157 $ 1,900 $ 1,558 $ — $ 7,615

Internal 89 13 160 — 262

Total service revenues 4,246 1,913 1,718 — 7,877

1 unchanged sentence

Product sales

146 34 80 2,382 137 — 2,779

106 98 361 ( 322 ) 305 ( 548 ) —

External 144 24 178 2,500 2,846

Internal 184 86 691 ( 448 ) 513

Total product sales 328 110 869 2,052 3,359

3 unchanged sentences

Total net gain (loss) from commodity derivatives (2) — — 4 ( 263 ) ( 259 )

Total revenues of reportable segments $ 4,628 $ 2,025 $ 2,669 $ 1,789 $ 11,111

Reconciliation of revenues:

Revenues from upstream operations, corporate, and other business activities 470

Net unrealized gain (loss) from commodity derivatives for upstream operations

Eliminations ( 1,052 )

Total consolidated revenues $ 10,503

Segment costs and expenses and Proportional Modified EBITDA of equity-method investments:

Product costs and net realized processing commodity expenses ( 329 ) ( 88 ) ( 844 ) ( 1,799 )

Net unrealized gain (loss) from commodity derivatives within Net processing commodity expenses — — — ( 6 )

Operating and administrative expenses (3)

( 1,104 ) ( 441 ) ( 591 ) ( 108 )

Total revenues $ 4,150 $ 2,033 $ 2,135 $ 2,878 $ 506 $ ( 795 ) $ 10,907

Other financial information:

Additions to long-lived assets

Recoverable power, transportation, and storage costs (4)

( 250 ) ( 143 ) ( 49 ) —

Other segment income (expenses) - net (5)

155 3 ( 5 ) —

Proportional Modified EBITDA of equity-method investments 173 602 132 —

Modified EBITDA of reportable segments $ 3,273 $ 1,958 $ 1,312 $ ( 124 ) $ 6,419

Modified EBITDA from upstream operations, corporate, and other business activities 237

Total consolidated Modified EBITDA $ 6,656

Reconciliation of Modified EBITDA:

Depreciation and amortization expenses $ ( 2,219 )

Equity earnings (losses) 560

Other investing income (loss) - net 343

Interest expense ( 1,364 )

Accretion expense associated with AROs for nonregulated operations

Proportional Modified EBITDA of equity-method investments ( 909 )

Income (loss) before income taxes from continuing operations $ 2,986

Equity-method investments by reportable segment $ 272 $ 3,346 $ 476 $ — $ 4,094

Other equity-method investments

Total equity-method investments $ 4,107

Segment assets $ 23,149 $ 12,918 $ 12,144 $ 46 $ 48,257

Total current assets 2,661

Regulatory assets, deferred charges, and noncurrent assets 1,830

Assets of upstream operations, corporate, and other business activities 1,784

Total assets $ 54,532

Additions to long-lived segment assets

$ 4,399 $ 210 $ 529 $ 2 $ 5,140

Additions to long-lived assets of upstream operations, corporate, and other business activities

Total additions to long-lived assets

Notes (Continued)

Transmission & Gulf of America Northeast G&P West Gas & NGL Marketing Services (1) Total

Segment revenues:

12 unchanged sentences

Total net gain (loss) from commodity derivatives (2) 2 — 89 817 908

Total revenues of reportable segments

$ 4,150 $ 2,033 $ 2,135 $ 2,878 $ 11,196

Total revenues $ 4,047 $ 1,802 $ 2,561 $ 3,233 $ 651 $ ( 1,329 ) $ 10,965

Other financial information:

Additions to long-lived assets

Reconciliation of revenues:

Revenues from upstream operations, corporate, and other business activities 505

Net unrealized gain (loss) from commodity derivatives for upstream operations

Eliminations ( 795 )

Total consolidated revenues $ 10,907

Segment costs and expenses and Proportional Modified EBITDA of equity-method investments:

Product costs and net realized processing commodity expenses ( 259 ) ( 125 ) ( 517 ) ( 1,786 )

Net unrealized gain (loss) from commodity derivatives within Net processing commodity expenses — — — ( 43 )

Operating and administrative expenses (3)

( 1,034 ) ( 424 ) ( 502 ) ( 98 )

Recoverable power, transportation, and storage costs (4)

( 241 ) ( 132 ) ( 37 ) —

Other segment income (expenses) - net (5)

118 ( 10 ) ( 3 ) ( 1 )

Gain on sale of business (6)

Proportional Modified EBITDA of equity-method investments 205 574 162 —

Modified EBITDA of reportable segments $ 3,068 $ 1,916 $ 1,238 $ 950 $ 7,172

Modified EBITDA from upstream operations, corporate, and other business activities 307

Unallocated Net gain from Energy Transfer litigation judgment (7)

Total consolidated Modified EBITDA $ 8,013

Reconciliation of Modified EBITDA:

Depreciation and amortization expenses $ ( 2,071 )

Equity earnings (losses) 589

Other investing income (loss) - net 108

Interest expense ( 1,236 )

Accretion expense associated with AROs for nonregulated operations

Proportional Modified EBITDA of equity-method investments ( 939 )

Income (loss) before income taxes from continuing operations $ 4,405

Equity-method investments by reportable segment $ 652 $ 3,477 $ 477 $ — $ 4,606

Other equity-method investments

Total equity-method investments $ 4,614

Segment assets $ 19,705 $ 13,319 $ 12,188 $ 77 $ 45,289

Total current assets 4,513

Regulatory assets, deferred charges, and noncurrent assets 1,573

Assets of upstream operations, corporate, and other business activities 1,252

Total assets $ 52,627

Additions to long-lived segment assets

$ 2,501 $ 340 $ 1,186 $ 7 $ 4,034

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Transmission & Gulf of Mexico Northeast G&P West Gas & NGL Marketing Services (1) Other Eliminations Total

Additions to long-lived assets of upstream operations, corporate, and other business activities

Total additions to long-lived assets

Notes (Continued)

Transmission & Gulf of America Northeast G&P West Gas & NGL Marketing Services (1) Total

Segment revenues:

12 unchanged sentences

Total net gain (loss) from commodity derivatives (2) — — ( 4 ) ( 304 ) ( 308 )

Total revenues of reportable segments

$ 4,047 $ 1,802 $ 2,561 $ 3,233 $ 11,643

Total revenues $ 3,786 $ 1,634 $ 2,026 $ 4,211 $ 345 $ ( 1,375 ) $ 10,627

Other financial information:

Additions to long-lived assets

Reconciliation of revenues:

Revenues from upstream operations, corporate, and other business activities 626

Net unrealized gain (loss) from commodity derivatives for upstream operations

Eliminations ( 1,329 )

Total consolidated revenues $ 10,965

Segment costs and expenses and Proportional Modified EBITDA of equity-method investments:

Product costs and net realized processing commodity expenses ( 425 ) ( 138 ) ( 918 ) ( 3,228 )

Net unrealized gain (loss) from commodity derivatives within Net processing commodity expenses — — — 47

Operating and administrative expenses (3)

( 906 ) ( 384 ) ( 507 ) ( 96 )

Proportional Modified EBITDA of equity-method investments

Recoverable power, transportation, and storage costs (4)

( 254 ) ( 132 ) ( 43 ) —

Other segment income (expenses) - net (5)

19 ( 6 ) ( 14 ) 4

(1) As we are acting as agent for natural gas marketing customers or engage in energy trading activities, the resulting revenues are presented net of the related costs of those activities.

(2) We record transactions that qualify as commodity derivatives at fair value with changes in fair value recognized in earnings in the period of change and characterized as unrealized gains or losses.

Gains and losses from commodity derivatives held for energy trading purposes are presented on a net basis in revenue.

Segment assets include Investments , Property, plant, and equipment – net, and Intangible assets – net of accumulated amortization .

The following table reflects segment assets and equity-method investments by reportable segments:

Segment Assets Equity-Method Investments

December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022

Transmission & Gulf of Mexico $ 19,705 $ 17,795 $ 652 $ 629

Northeast G&P 13,319 13,539 3,477 3,566

West 12,188 10,710 477 843

Gas & NGL Marketing Services 77 130 — —

Other 1,252 1,143 8 10

Total 46,541 43,317 $ 4,614 $ 5,048

Proportional Modified EBITDA of equity-method investments 193 654 132 —

Modified EBITDA of reportable segments $ 2,674 $ 1,796 $ 1,211 $ ( 40 ) $ 5,641

Modified EBITDA from upstream operations, corporate, and other business activities 434

Total consolidated Modified EBITDA $ 6,075

Reconciliation of Modified EBITDA:

Depreciation and amortization expenses $ ( 2,009 )

Equity earnings (losses) 637

Other investing income (loss) - net 16

Interest expense ( 1,147 )

Accretion expense associated with AROs for nonregulated operations

Proportional Modified EBITDA of equity-method investments ( 979 )

Income (loss) before income taxes from continuing operations $ 2,542

Equity-method investments by reportable segment $ 629 $ 3,566 $ 843 $ — $ 5,038

Other equity-method investments

Total equity-method investments $ 5,048

Segment assets $ 17,795 $ 13,539 $ 10,710 $ 130 $ 42,174

Total current assets 3,797

Regulatory assets, deferred charges, and other 1,573 1,319

Regulatory assets, deferred charges, and noncurrent assets 1,319

Assets of upstream operations, corporate, and other business activities 1,143

Total assets $ 48,433

The Williams Companies, Inc.

Notes to Consolidated Financial Statements – (Continued)

Additions to long-lived segment assets

$ 1,420 $ 261 $ 1,507 $ 4 $ 3,192

Additions to long-lived assets of upstream operations, corporate, and other business activities

Total additions to long-lived assets

_______________________

(1) As Williams is acting as agent for natural gas marketing customers or engages in energy trading activities, the resulting revenues are presented net of the related costs of those activities.

Notes (Continued)

(2) Williams records transactions that qualify as commodity derivatives at fair value with changes in fair value recognized in earnings in the period of change and characterized as unrealized gains or losses.

Gains and losses from commodity derivatives held for energy trading purposes are presented on a net basis in revenue.

(3) Segment operating and administrative expenses primarily include payroll, maintenance and operating costs and taxes, and general and administrative expenses, including acquisition and transition-related expenses.

It also includes project execution, information technology, finance and accounting, real estate and aviation, central engineering services, safety and operational discipline, supply chain and digital transformation, corporate strategic development, human resources, legal and government affairs, and executive and audit support services costs which are centrally managed and allocated to segments.

(4) Recoverable power, transportation and storage costs are charges incurred which are reimbursable pursuant to FERC stipulations or customer contracts.

(5) Other segment income (expenses) primarily includes equity AFUDC and regulatory credits and charges related to Williams’ regulated operations.

(6) Gain on sale of business reflects a gain recognized on the sale of certain liquids pipelines in the Gulf Coast region in September 2023 (see Note 3 – Acquisitions and Divestitures).

(7) Net gain from Energy Transfer litigation judgment resulted from a favorable ruling in November 2023 (see Note 1 – General, Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies).

Transco manages and evaluates its business as a single reportable segment.

Transco’s chief operating decision maker is the Senior Vice President, Transmission & Gulf of America.

Transco’s chief operating decision maker determines resource allocation, measures and evaluates segment operating performance based upon Net income (loss) as reported on the Statement of Net Income.

Significant expenses within net income, include Operating and maintenance expenses and Selling, general, and administrative expenses , which are each separately presented on Transco’s Statement of Net Income.

Other segment items within net income include natural gas product costs, depreciation and amortization expense, taxes, other than income taxes, interest expense, interest income, other income (expense) – net, and AFUDC.

Transco’s segment assets include Property, plant, and equipment – net as presented on the Balance Sheet.

NWP manages and evaluates its business as a single reportable segment.

NWP’s chief operating decision maker is the Senior Vice President, Transmission & Gulf of America.

NWP’s chief operating decision maker determines resource allocation, measures and evaluates segment operating performance based upon Net income (loss) as reported on the Statement of Net Income.

Other segment items within net income include depreciation and amortization expense, taxes, other than income taxes, interest expense, other income (expense) – net, and AFUDC.

NWP’s segment assets include Property, plant, and equipment – net as presented on the Balance Sheet.

Notes (Continued)

Note 20 – Subsequent Events

Quarterly Dividends to Common Stockholders

On January 30, 2024, our board of directors approved a regular quarterly dividend to common stockholders of $ 0.475 per share payable on March 25, 2024.

Gulf Coast Storage Acquisition

See Note 3 – Acquisitions and Divestitures for discussion.

Long-term Debt Issuance

In January 2024, we issued $ 1.1 billion of 4.9 percent senior unsecured notes due March 15, 2029, and $ 1 billion of 5.15 percent senior unsecured notes due March 15, 2034 (see Note 12 – Debt and Banking Arrangements).

We used a portion of the proceeds in January 2024 to pay down $ 725 million of commercial paper outstanding at December 31, 2023.

On January 28, 2025, Williams’ board of directors approved a regular quarterly dividend to common stockholders of $ 0.500 per share payable on March 31, 2025.

Long-term Debt Issuance and Retirement

In January 2025, Williams issued $ 1 billion of 5.6 percent senior unsecured notes due March 15, 2035 and $ 500 million of 6.0 percent senior unsecured notes due March 15, 2055 (see Note 13 – Debt and Banking Arrangements).

Also in January 2025, Williams retired $ 750 million of senior unsecured debt.

The Williams Companies, Inc.

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Item 8. Financial Statements and Supplementary Data