|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
THE WILLIAMS COMPANIES, INC.
|
(Exact name of registrant as specified in its charter)
|
DELAWARE
|
|
73-0569878
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
ONE WILLIAMS CENTER
|
|
|
TULSA, OKLAHOMA
|
|
74172-0172
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Large accelerated filer
þ
|
|
Accelerated filer
¨
|
|
Non-accelerated filer
¨
|
|
Smaller reporting company
¨
|
|
|
|
|
(Do not check if a smaller reporting company)
|
|
|
Class
|
|
Shares Outstanding at April 28, 2014
|
Common Stock, $1 par value
|
|
685,518,456
|
|
|
Page
|
|
|
Item 1. Financial Statements
|
|
•
|
Amounts and nature of future capital expenditures;
|
•
|
Expansion and growth of our business and operations;
|
•
|
Financial condition and liquidity;
|
•
|
Business strategy;
|
•
|
Cash flow from operations or results of operations;
|
•
|
The levels of dividends to stockholders;
|
•
|
Natural gas, natural gas liquids, and olefins prices, supply and demand;
|
•
|
Demand for our services.
|
•
|
Whether we have sufficient cash to enable us to pay current and expected levels of dividends;
|
•
|
Availability of supplies, market demand, and volatility of prices;
|
•
|
Inflation, interest rates, fluctuation in foreign exchange rates, and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on our customers and suppliers);
|
•
|
The strength and financial resources of our competitors and the effects of competition;
|
•
|
Whether we are able to successfully identify, evaluate and execute investment opportunities;
|
•
|
Ability to acquire new businesses and assets and successfully integrate those operations and assets into our existing businesses, as well as successfully expand our facilities;
|
•
|
Development of alternative energy sources;
|
•
|
The impact of operational and development hazards and unforeseen interruptions;
|
•
|
Costs of, changes in, or the results of laws, government regulations (including safety and environmental regulations), environmental liabilities, litigation, and rate proceedings;
|
•
|
Our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans;
|
•
|
Changes in maintenance and construction costs;
|
•
|
Changes in the current geopolitical situation;
|
•
|
Our exposure to the credit risk of our customers and counterparties;
|
•
|
Risks related to financing, including restrictions stemming from our debt agreements, future changes in our credit ratings and the availability and cost of capital;
|
•
|
The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate;
|
•
|
Risks associated with weather and natural phenomena, including climate conditions;
|
•
|
Acts of terrorism, including cybersecurity threats and related disruptions; and
|
•
|
Additional risks described in our filings with the Securities and Exchange Commission.
|
|
|
Three months ended
March 31, |
||||||
|
|
2014
|
|
2013
|
||||
|
|
(Millions, except per-share amounts)
|
||||||
Revenues:
|
|
|
|
|
||||
Service revenues
|
|
$
|
819
|
|
|
$
|
706
|
|
Product sales
|
|
930
|
|
|
1,104
|
|
||
Total revenues
|
|
1,749
|
|
|
1,810
|
|
||
Costs and expenses:
|
|
|
|
|
||||
Product costs
|
|
769
|
|
|
790
|
|
||
Operating and maintenance expenses
|
|
298
|
|
|
260
|
|
||
Depreciation and amortization expenses
|
|
214
|
|
|
201
|
|
||
Selling, general, and administrative expenses
|
|
150
|
|
|
132
|
|
||
Net insurance recoveries – Geismar Incident
|
|
(119
|
)
|
|
—
|
|
||
Other (income) expense – net
|
|
17
|
|
|
1
|
|
||
Total costs and expenses
|
|
1,329
|
|
|
1,384
|
|
||
Operating income (loss)
|
|
420
|
|
|
426
|
|
||
Equity earnings (losses)
|
|
(48
|
)
|
|
18
|
|
||
Interest incurred
|
|
(169
|
)
|
|
(152
|
)
|
||
Interest capitalized
|
|
29
|
|
|
24
|
|
||
Other investing income – net
|
|
14
|
|
|
13
|
|
||
Other income (expense) – net
|
|
1
|
|
|
(2
|
)
|
||
Income (loss) from continuing operations before income taxes
|
|
247
|
|
|
327
|
|
||
Provision (benefit) for income taxes
|
|
51
|
|
|
96
|
|
||
Income (loss) from continuing operations
|
|
196
|
|
|
231
|
|
||
Income (loss) from discontinued operations
|
|
—
|
|
|
(1
|
)
|
||
Net income (loss)
|
|
196
|
|
|
230
|
|
||
Less: Net income attributable to noncontrolling interests
|
|
56
|
|
|
69
|
|
||
Net income (loss) attributable to The Williams Companies, Inc.
|
|
$
|
140
|
|
|
$
|
161
|
|
Amounts attributable to The Williams Companies, Inc.:
|
|
|
|
|
||||
Income (loss) from continuing operations
|
|
$
|
140
|
|
|
$
|
162
|
|
Income (loss) from discontinued operations
|
|
—
|
|
|
(1
|
)
|
||
Net income (loss)
|
|
$
|
140
|
|
|
$
|
161
|
|
Basic earnings (loss) per common share:
|
|
|
|
|
||||
Income (loss) from continuing operations
|
|
$
|
.20
|
|
|
$
|
.24
|
|
Income (loss) from discontinued operations
|
|
—
|
|
|
—
|
|
||
Net income (loss)
|
|
$
|
.20
|
|
|
$
|
.24
|
|
Weighted-average shares (thousands)
|
|
684,773
|
|
|
682,052
|
|
||
Diluted earnings (loss) per common share:
|
|
|
|
|
||||
Income (loss) from continuing operations
|
|
$
|
.20
|
|
|
$
|
.23
|
|
Income (loss) from discontinued operations
|
|
—
|
|
|
—
|
|
||
Net income (loss)
|
|
$
|
.20
|
|
|
$
|
.23
|
|
Weighted-average shares (thousands)
|
|
688,904
|
|
|
687,143
|
|
||
Cash dividends declared per common share
|
|
$
|
.4025
|
|
|
$
|
.33875
|
|
|
|
Three months ended
March 31, |
||||||
|
|
2014
|
|
2013
|
||||
|
|
(Millions)
|
||||||
Net income (loss)
|
|
$
|
196
|
|
|
$
|
230
|
|
Other comprehensive income (loss):
|
|
|
|
|
||||
Foreign currency translation adjustments, net of taxes of $1 in 2014
|
|
(44
|
)
|
|
(21
|
)
|
||
Pension and other postretirement benefits:
|
|
|
|
|
||||
Amortization of prior service cost (credit) included in net periodic benefit cost, net of taxes of $1 in 2014
|
|
(1
|
)
|
|
(1
|
)
|
||
Amortization of actuarial (gain) loss included in net periodic benefit cost, net of taxes of ($3) and ($6) in 2014 and 2013, respectively
|
|
6
|
|
|
10
|
|
||
Other comprehensive income (loss)
|
|
(39
|
)
|
|
(12
|
)
|
||
Comprehensive income (loss)
|
|
157
|
|
|
218
|
|
||
Less: Comprehensive income (loss) attributable to noncontrolling interests
|
|
56
|
|
|
69
|
|
||
Comprehensive income (loss) attributable to The Williams Companies, Inc.
|
|
$
|
101
|
|
|
$
|
149
|
|
|
|
March 31,
2014 |
|
December 31,
2013 |
||||
|
|
(Millions, except per-share amounts)
|
||||||
ASSETS
|
|
|
||||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,064
|
|
|
$
|
681
|
|
Accounts and notes receivable, net:
|
|
|
|
|
||||
Trade and other
|
|
629
|
|
|
600
|
|
||
Income tax receivable
|
|
29
|
|
|
74
|
|
||
Deferred income tax asset
|
|
141
|
|
|
27
|
|
||
Inventories
|
|
222
|
|
|
194
|
|
||
Other current assets and deferred charges
|
|
93
|
|
|
107
|
|
||
Total current assets
|
|
2,178
|
|
|
1,683
|
|
||
Investments
|
|
4,520
|
|
|
4,360
|
|
||
Property, plant and equipment, at cost
|
|
26,484
|
|
|
25,823
|
|
||
Accumulated depreciation and amortization
|
|
(7,773
|
)
|
|
(7,613
|
)
|
||
Property, plant and equipment – net
|
|
18,711
|
|
|
18,210
|
|
||
Goodwill
|
|
646
|
|
|
646
|
|
||
Other intangible assets
|
|
1,632
|
|
|
1,644
|
|
||
Regulatory assets, deferred charges, and other
|
|
619
|
|
|
599
|
|
||
Total assets
|
|
$
|
28,306
|
|
|
$
|
27,142
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
1,094
|
|
|
$
|
960
|
|
Accrued liabilities
|
|
704
|
|
|
797
|
|
||
Commercial paper
|
|
—
|
|
|
225
|
|
||
Long-term debt due within one year
|
|
751
|
|
|
1
|
|
||
Total current liabilities
|
|
2,549
|
|
|
1,983
|
|
||
Long-term debt
|
|
12,099
|
|
|
11,353
|
|
||
Deferred income taxes
|
|
3,528
|
|
|
3,529
|
|
||
Other noncurrent liabilities
|
|
1,413
|
|
|
1,356
|
|
||
Contingent liabilities (Note 11)
|
|
|
|
|
||||
Equity:
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Common stock (960 million shares authorized at $1 par value;
720 million shares issued at March 31, 2014 and 718 million shares
issued at December 31, 2013)
|
|
720
|
|
|
718
|
|
||
Capital in excess of par value
|
|
11,545
|
|
|
11,599
|
|
||
Retained deficit
|
|
(6,385
|
)
|
|
(6,248
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
(223
|
)
|
|
(164
|
)
|
||
Treasury stock, at cost (35 million shares of common stock)
|
|
(1,041
|
)
|
|
(1,041
|
)
|
||
Total stockholders’ equity
|
|
4,616
|
|
|
4,864
|
|
||
Noncontrolling interests in consolidated subsidiaries
|
|
4,101
|
|
|
4,057
|
|
||
Total equity
|
|
8,717
|
|
|
8,921
|
|
||
Total liabilities and equity
|
|
$
|
28,306
|
|
|
$
|
27,142
|
|
|
The Williams Companies, Inc., Stockholders
|
|
|
|
|
||||||||||||||||||||||||||
|
Common
Stock
|
|
Capital in
Excess of
Par Value
|
|
Retained
Deficit
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Treasury
Stock
|
|
Total
Stockholders’
Equity
|
|
Noncontrolling
Interest
|
|
Total Equity
|
||||||||||||||||
|
(Millions)
|
||||||||||||||||||||||||||||||
Balance – December 31, 2013
|
$
|
718
|
|
|
$
|
11,599
|
|
|
$
|
(6,248
|
)
|
|
$
|
(164
|
)
|
|
$
|
(1,041
|
)
|
|
$
|
4,864
|
|
|
$
|
4,057
|
|
|
$
|
8,921
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|
56
|
|
|
196
|
|
||||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|
(39
|
)
|
||||||||
Cash dividends – common stock
|
—
|
|
|
—
|
|
|
(276
|
)
|
|
—
|
|
|
—
|
|
|
(276
|
)
|
|
—
|
|
|
(276
|
)
|
||||||||
Dividends and distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(147
|
)
|
|
(147
|
)
|
||||||||
Stock-based compensation and related common stock issuances, net of tax
|
2
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
||||||||
Changes in ownership of consolidated subsidiaries, net
|
—
|
|
|
(72
|
)
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
(92
|
)
|
|
135
|
|
|
43
|
|
||||||||
Contributions from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63
|
|
|
63
|
|
||||||||
Deconsolidation of Bluegrass Pipeline (Note 2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63
|
)
|
|
(63
|
)
|
||||||||
Other
|
—
|
|
|
(3
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
||||||||
Balance – March 31, 2014
|
$
|
720
|
|
|
$
|
11,545
|
|
|
$
|
(6,385
|
)
|
|
$
|
(223
|
)
|
|
$
|
(1,041
|
)
|
|
$
|
4,616
|
|
|
$
|
4,101
|
|
|
$
|
8,717
|
|
|
|
Three months ended
March 31, |
||||||
|
|
2014
|
|
2013
|
||||
|
|
(Millions)
|
||||||
OPERATING ACTIVITIES:
|
|
|
||||||
Net income (loss)
|
|
$
|
196
|
|
|
$
|
230
|
|
Adjustments to reconcile to net cash provided (used) by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
214
|
|
|
201
|
|
||
Provision (benefit) for deferred income taxes
|
|
(96
|
)
|
|
103
|
|
||
Amortization of stock-based awards
|
|
11
|
|
|
9
|
|
||
Cash provided (used) by changes in current assets and liabilities:
|
|
|
|
|
||||
Accounts and notes receivable
|
|
16
|
|
|
(72
|
)
|
||
Inventories
|
|
(27
|
)
|
|
(13
|
)
|
||
Other current assets and deferred charges
|
|
22
|
|
|
11
|
|
||
Accounts payable
|
|
(16
|
)
|
|
6
|
|
||
Accrued liabilities
|
|
67
|
|
|
(25
|
)
|
||
Other, including changes in noncurrent assets and liabilities
|
|
59
|
|
|
45
|
|
||
Net cash provided (used) by operating activities
|
|
446
|
|
|
495
|
|
||
FINANCING ACTIVITIES:
|
|
|
|
|
||||
Proceeds from (payments of) commercial paper – net
|
|
(225
|
)
|
|
—
|
|
||
Proceeds from long-term debt
|
|
1,496
|
|
|
770
|
|
||
Payments of long-term debt
|
|
—
|
|
|
(895
|
)
|
||
Proceeds from issuance of common stock
|
|
14
|
|
|
7
|
|
||
Proceeds from sale of limited partner units of consolidated partnership
|
|
—
|
|
|
617
|
|
||
Dividends paid
|
|
(276
|
)
|
|
(231
|
)
|
||
Dividends and distributions paid to noncontrolling interests
|
|
(147
|
)
|
|
(105
|
)
|
||
Contributions from noncontrolling interests
|
|
63
|
|
|
2
|
|
||
Other – net
|
|
4
|
|
|
11
|
|
||
Net cash provided (used) by financing activities
|
|
929
|
|
|
176
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
|
||||
Capital expenditures (1)
|
|
(793
|
)
|
|
(713
|
)
|
||
Purchases of and contributions to equity-method investments
|
|
(228
|
)
|
|
(93
|
)
|
||
Other – net
|
|
29
|
|
|
(2
|
)
|
||
Net cash provided (used) by investing activities
|
|
(992
|
)
|
|
(808
|
)
|
||
|
|
|
|
|
||||
Increase (decrease) in cash and cash equivalents
|
|
383
|
|
|
(137
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
681
|
|
|
839
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
1,064
|
|
|
$
|
702
|
|
_________
|
|
|
|
|
||||
(1) Increases to property, plant, and equipment
|
|
$
|
(840
|
)
|
|
$
|
(732
|
)
|
Changes in related accounts payable and accrued liabilities
|
|
47
|
|
|
19
|
|
||
Capital expenditures
|
|
$
|
(793
|
)
|
|
$
|
(713
|
)
|
|
March 31,
2014 |
|
December 31, 2013 (1)
|
|
Classification
|
||||
|
(Millions)
|
|
|
||||||
Assets (liabilities):
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
36
|
|
|
$
|
122
|
|
|
Cash and cash equivalents
|
Accounts receivable
|
10
|
|
|
—
|
|
|
Accounts and notes receivable, net
|
||
Property, plant and equipment
|
1,209
|
|
|
1,111
|
|
|
Property, plant and equipment, at cost
|
||
Accounts payable
|
(153
|
)
|
|
(145
|
)
|
|
Accounts payable
|
||
Construction retainage
|
(4
|
)
|
|
(3
|
)
|
|
Accrued liabilities
|
||
Current deferred revenue
|
—
|
|
|
(10
|
)
|
|
Accrued liabilities
|
||
Asset retirement obligation
|
(30
|
)
|
|
—
|
|
|
Other noncurrent liabilities
|
||
Noncurrent deferred revenue associated with customer advance payments
|
(130
|
)
|
|
(115
|
)
|
|
Other noncurrent liabilities
|
|
•
|
Property damage and business interruption coverage with a combined per-occurrence limit of
$500 million
and retentions (deductibles) of
$10 million
per occurrence for property damage and a waiting period of
60 days
per occurrence for business interruption;
|
•
|
General liability coverage with per-occurrence and aggregate annual limits of
$610 million
and retentions (deductibles) of
$2 million
per occurrence;
|
•
|
Workers’ compensation coverage with statutory limits and retentions (deductibles) of
$1 million
total per occurrence.
|
|
Three months ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
|
(Millions)
|
||||||
Current:
|
|
|
|
||||
Federal
|
$
|
137
|
|
|
$
|
(11
|
)
|
State
|
5
|
|
|
2
|
|
||
Foreign
|
2
|
|
|
2
|
|
||
|
144
|
|
|
(7
|
)
|
||
Deferred:
|
|
|
|
||||
Federal
|
(96
|
)
|
|
82
|
|
||
State
|
(1
|
)
|
|
13
|
|
||
Foreign
|
4
|
|
|
8
|
|
||
|
(93
|
)
|
|
103
|
|
||
Total provision (benefit)
|
$
|
51
|
|
|
$
|
96
|
|
|
Three months ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
|
(Dollars in millions, except per-share
amounts; shares in thousands)
|
||||||
Income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders for basic and diluted earnings (loss) per common share
|
$
|
140
|
|
|
$
|
162
|
|
Basic weighted-average shares
|
684,773
|
|
|
682,052
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Nonvested restricted stock units
|
2,096
|
|
|
2,720
|
|
||
Stock options
|
2,017
|
|
|
2,187
|
|
||
Convertible debentures
|
18
|
|
|
184
|
|
||
Diluted weighted-average shares
|
688,904
|
|
|
687,143
|
|
||
Earnings (loss) per common share from continuing operations:
|
|
|
|
||||
Basic
|
$
|
.20
|
|
|
$
|
.24
|
|
Diluted
|
$
|
.20
|
|
|
$
|
.23
|
|
|
Pension Benefits
|
||||||
|
Three months ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
|
(Millions)
|
||||||
Components of net periodic benefit cost:
|
|
|
|
||||
Service cost
|
$
|
10
|
|
|
$
|
11
|
|
Interest cost
|
16
|
|
|
13
|
|
||
Expected return on plan assets
|
(19
|
)
|
|
(15
|
)
|
||
Amortization of net actuarial loss
|
9
|
|
|
15
|
|
||
Net periodic benefit cost
|
$
|
16
|
|
|
$
|
24
|
|
|
Other Postretirement Benefits
|
||||||
|
Three months ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
|
(Millions)
|
||||||
Components of net periodic benefit cost (credit):
|
|
|
|
||||
Service cost
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
2
|
|
|
3
|
|
||
Expected return on plan assets
|
(3
|
)
|
|
(2
|
)
|
||
Amortization of prior service credit
|
(5
|
)
|
|
(2
|
)
|
||
Amortization of net actuarial loss
|
—
|
|
|
2
|
|
||
Reclassification to regulatory liability
|
1
|
|
|
—
|
|
||
Net periodic benefit cost (credit)
|
$
|
(4
|
)
|
|
$
|
2
|
|
|
Three months ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
|
(Millions)
|
||||||
Amortization of prior service credit
|
$
|
(3
|
)
|
|
$
|
(1
|
)
|
Amortization of net actuarial loss
|
—
|
|
|
1
|
|
|
March 31,
2014 |
|
December 31,
2013 |
||||
|
(Millions)
|
||||||
Natural gas liquids, olefins, and natural gas in underground storage
|
$
|
141
|
|
|
$
|
111
|
|
Materials, supplies, and other
|
81
|
|
|
83
|
|
||
|
$
|
222
|
|
|
$
|
194
|
|
|
Cash
Flow
Hedges
|
|
Foreign
Currency
Translation
|
|
Pension and
Other Post
Retirement
Benefits
|
|
Total
|
||||||||
|
(Millions)
|
||||||||||||||
Balance at December 31, 2013
|
$
|
(1
|
)
|
|
$
|
128
|
|
|
$
|
(291
|
)
|
|
$
|
(164
|
)
|
Other comprehensive income (loss)
before reclassifications
|
—
|
|
|
(44
|
)
|
|
—
|
|
|
(44
|
)
|
||||
Amounts reclassified from
accumulated
other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
||||
Other comprehensive income (loss)
|
—
|
|
|
(44
|
)
|
|
5
|
|
|
(39
|
)
|
||||
Changes in ownership of consolidated subsidiaries, net
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
||||
Balance at March 31, 2014
|
$
|
(1
|
)
|
|
$
|
64
|
|
|
$
|
(286
|
)
|
|
$
|
(223
|
)
|
Component
|
|
Reclassifications
|
|
Classification
|
||
|
|
(Millions)
|
|
|
||
Pension and other postretirement benefits:
|
|
|
|
|
||
Amortization of prior service cost (credit) included in net periodic benefit cost
|
|
$
|
(2
|
)
|
|
Note 6 – Employee Benefit Plans
|
Amortization of actuarial (gain) loss included in net periodic benefit cost
|
|
9
|
|
|
Note 6 – Employee Benefit Plans
|
|
Total pension and other postretirement benefits, before income taxes
|
|
7
|
|
|
|
|
Income tax benefit
|
|
(2
|
)
|
|
Provision (benefit) for income taxes
|
|
Reclassifications during the period
|
|
$
|
5
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using
|
||||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Quoted
Prices In
Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Assets (liabilities) at March 31, 2014:
|
|
|
|
|
|
|
|
|
|
||||||||||
Measured on a recurring basis:
|
|
|
|
|
|
|
|
|
|
||||||||||
ARO Trust investments
|
$
|
45
|
|
|
$
|
45
|
|
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Energy derivatives assets not designated as hedging instruments
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Energy derivatives liabilities not designated as hedging instruments
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Additional disclosures:
|
|
|
|
|
|
|
|
|
|
||||||||||
Notes receivable and other
|
75
|
|
|
130
|
|
|
2
|
|
|
6
|
|
|
122
|
|
|||||
Long-term debt, including current portion (1)
|
(12,849
|
)
|
|
(13,790
|
)
|
|
—
|
|
|
(13,790
|
)
|
|
—
|
|
|||||
Guarantee
|
(31
|
)
|
|
(28
|
)
|
|
—
|
|
|
(28
|
)
|
|
—
|
|
|||||
Assets (liabilities) at December 31, 2013:
|
|
|
|
|
|
|
|
|
|
||||||||||
Measured on a recurring basis:
|
|
|
|
|
|
|
|
|
|
||||||||||
ARO Trust investments
|
$
|
33
|
|
|
$
|
33
|
|
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Energy derivatives assets not designated as hedging instruments
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Energy derivatives liabilities not designated as hedging instruments
|
(3
|
)
|
|
(3
|
)
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|||||
Additional disclosures:
|
|
|
|
|
|
|
|
|
|
||||||||||
Notes receivable and other
|
77
|
|
|
140
|
|
|
1
|
|
|
6
|
|
|
133
|
|
|||||
Long-term debt (1)
|
(11,353
|
)
|
|
(11,971
|
)
|
|
—
|
|
|
(11,971
|
)
|
|
—
|
|
|||||
Guarantee
|
(32
|
)
|
|
(29
|
)
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
•
|
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.
|
|
Williams
Partners
|
|
Williams
NGL & Petchem
Services
|
|
Access
Midstream
Partners
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||||
|
(Millions)
|
||||||||||||||||||||||
Three months ended March 31, 2014
|
|||||||||||||||||||||||
Segment revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External
|
$
|
763
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
819
|
|
Internal
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
||||||
Total service revenues
|
763
|
|
|
—
|
|
|
—
|
|
|
59
|
|
|
(3
|
)
|
|
819
|
|
||||||
Product sales
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External
|
930
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
930
|
|
||||||
Internal
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total product sales
|
930
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
930
|
|
||||||
Total revenues
|
$
|
1,693
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
59
|
|
|
$
|
(3
|
)
|
|
$
|
1,749
|
|
Segment profit (loss)
|
$
|
503
|
|
|
$
|
(100
|
)
|
|
$
|
6
|
|
|
$
|
3
|
|
|
|
|
$
|
412
|
|
||
Less equity earnings (losses)
|
23
|
|
|
(77
|
)
|
|
6
|
|
|
—
|
|
|
|
|
(48
|
)
|
|||||||
Segment operating income (loss)
|
$
|
480
|
|
|
$
|
(23
|
)
|
|
$
|
—
|
|
|
$
|
3
|
|
|
|
|
460
|
|
|||
General corporate expenses
|
|
|
|
|
|
|
|
|
|
|
(40
|
)
|
|||||||||||
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|
$
|
420
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three months ended March 31, 2013
|
|||||||||||||||||||||||
Segment revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External
|
$
|
702
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
706
|
|
Internal
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
||||||
Total service revenues
|
702
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
(3
|
)
|
|
706
|
|
||||||
Product sales
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External
|
1,104
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,104
|
|
||||||
Internal
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total product sales
|
1,104
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,104
|
|
||||||
Total revenues
|
$
|
1,806
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
(3
|
)
|
|
$
|
1,810
|
|
Segment profit (loss)
|
$
|
494
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
|
|
$
|
487
|
|
||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity earnings (losses)
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
18
|
|
|||||||
Income (loss) from investments
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
(1
|
)
|
|||||||
Segment operating income (loss)
|
$
|
477
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
|
|
470
|
|
|||
General corporate expenses
|
|
|
|
|
|
|
|
|
|
|
(44
|
)
|
|||||||||||
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|
$
|
426
|
|
||||||||||
March 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total assets
|
$
|
24,791
|
|
|
$
|
378
|
|
|
$
|
2,136
|
|
|
$
|
1,459
|
|
|
$
|
(458
|
)
|
|
$
|
28,306
|
|
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total assets
|
$
|
23,571
|
|
|
$
|
486
|
|
|
$
|
2,161
|
|
|
$
|
1,359
|
|
|
$
|
(435
|
)
|
|
$
|
27,142
|
|
•
|
Property damage and business interruption coverage with a combined per-occurrence limit of $500 million and retentions (deductibles) of $10 million per occurrence for property damage and a 60-day waiting period per occurrence for business interruption;
|
•
|
General liability coverage with per-occurrence and aggregate annual limits of $610 million and retentions (deductibles) of $2 million per occurrence;
|
•
|
Workers’ compensation coverage with statutory limits and retentions (deductibles) of $1 million total per occurrence.
|
|
•
|
General economic, financial markets, or industry downturn;
|
•
|
Unexpected significant increases in capital expenditures or delays in capital project execution;
|
•
|
Lower than anticipated or delay in receiving insurance recoveries associated with the Geismar Incident;
|
•
|
Limited availability of capital due to a change in our financial condition, interest rates, market or industry conditions;
|
•
|
Lower than expected distributions, including IDRs, from WPZ. WPZ’s liquidity could also be impacted by a lack of adequate access to capital markets to fund its growth;
|
•
|
Counterparty credit and performance risk;
|
•
|
Decreased volumes from third parties served by our midstream business;
|
•
|
Lower than anticipated energy commodity prices and margins;
|
•
|
Changes in the political and regulatory environments;
|
•
|
Physical damages to facilities, including damage to offshore facilities by named windstorms;
|
•
|
Reduced availability of insurance coverage.
|
•
|
Natural gas prices are expected to be higher in part due to the additional demand to replace the gas volumes withdrawn during the colder than normal weather over the past winter season.
|
•
|
Ethane prices are expected to be somewhat higher due to a modest increase in demand as well as slightly higher natural gas prices.
|
•
|
Propane prices are expected to be higher from an increase in exports and higher natural gas prices.
|
•
|
Propylene prices are expected to be comparable to 2013 prices.
|
•
|
Ethylene prices are expected to be slightly lower as compared to 2013 prices. The overall ethylene crack spread is also expected to be slightly lower due to the anticipated lower sales price and a projected higher ethane price.
|
•
|
In Williams Partners’ northeast region, we anticipate significant growth compared to the prior year in our natural gas gathering and processing volumes as our infrastructure grows to support drilling activities in the region.
|
•
|
In Williams Partners’ Transco and Northwest Pipeline businesses, we anticipate higher natural gas transportation revenues compared to 2013, as a result of expansion projects placed into service in 2013 and anticipated to be placed in service in 2014.
|
•
|
In Williams Partners’ Gulf Coast region, we expect higher production handling volumes compared to 2013, following the scheduled completion of Gulfstar FPS™ in third quarter 2014.
|
•
|
In Williams Partners’ western region, we anticipate an unfavorable impact in equity NGL volumes in 2014 compared to 2013, primarily due to a customer contract that expired in September 2013.
|
•
|
In 2014, Williams Partners’ domestic businesses anticipate a continuation of periods when it will not be economical to recover ethane.
|
•
|
In Williams Partners’ Canadian midstream business, we anticipate new ethane volumes in 2014 associated with the fourth quarter 2013 completion of the Canadian ethane recovery project, which is expected to benefit from a contractual minimum ethane sales price.
|
•
|
Williams Partners’ Gulf olefins business anticipates higher ethylene volumes in 2014 compared to 2013 substantially due to the repair and expansion of the Geismar plant expected to begin start-up in the latter-half of June 2014.
|
•
|
Williams Partners’ Canadian olefins business expects higher propylene volumes in 2014 than 2013. Volumes in 2013 were negatively impacted by both a planned maintenance turnaround and downtime associated with the tie-in of the Canadian ethane recovery project.
|
•
|
Williams Partners’ Gulf olefins business received insurance recoveries of $50 million and $125 million in 2013 and the first quarter of 2014, respectively, related to the Geismar Incident and expects to receive additional insurance recoveries related to the Geismar Incident that will favorably impact our operating results in 2014.
|
•
|
Williams Partners’ expects higher operating expenses in 2014 compared to 2013, including depreciation expense related to its growing operations in its northeast region and expansion projects in its gas pipeline and Gulf olefins businesses.
|
•
|
Williams Partners’ expects higher equity earnings compared to 2013 following the scheduled completion of Discovery’s Keathley Canyon Connector™ lateral in the fourth quarter of 2014.
|
|
Low
|
|
High
|
||||
|
(Millions)
|
||||||
Segment:
|
|
|
|
||||
Williams Partners
|
$
|
3,000
|
|
|
$
|
3,500
|
|
Williams NGL & Petchem Services
|
400
|
|
|
500
|
|
•
|
Expansion of our gathering infrastructure including compression and gathering pipelines in the Susquehanna Supply Hub in northeastern Pennsylvania as production in the Marcellus increases. The Susquehanna Supply Hub is expected to reach a natural gas take away capacity of 3 Bcf/d by 2015.
|
•
|
In the first quarter of 2014, we completed a 30 Mbbls/d expansion of the Moundsville fractionator in the Marcellus Shale. In addition, we have several significant projects under construction with targeted construction completion in the first half of 2014. We are completing an installation of 40 Mbbls/d of deethanization capacity, a 50-mile ethane pipeline, condensate stabilization, and the first 200 MMcf/d of processing at Oak Grove.
|
•
|
Expansions to the Laurel Mountain gathering system infrastructure to increase the capacity to 667 MMcf/d by the end of 2015 through capital contributions to this equity investment.
|
•
|
Construction of the Blue Racer Midstream joint project, an expansion to gathering and processing and the associated liquids infrastructure serving oil and gas producers in the Utica shale, primarily in Ohio and Northwest Pennsylvania through capital to be invested within our Caiman II equity investment. Expansion plans included the addition of Natrium II, a second 200 MMcf/d processing plant at Natrium, which was completed in April 2014. Construction of an additional 200 MMcf/d processing plant is underway at the Berne complex in Monroe County, Ohio. Berne I is expected to come online in the fourth quarter of 2014.
|
|
Three months ended
March 31, |
|
|
|
|
||||||
|
2014
|
|
2013
|
|
$ Change*
|
|
% Change*
|
||||
|
(Millions)
|
|
|
|
|
||||||
Revenues:
|
|
|
|
|
|
|
|
||||
Service revenues
|
$
|
819
|
|
|
$
|
706
|
|
|
+113
|
|
+16%
|
Product sales
|
930
|
|
|
1,104
|
|
|
-174
|
|
-16%
|
||
Total revenues
|
1,749
|
|
|
1,810
|
|
|
|
|
|
||
Costs and expenses:
|
|
|
|
|
|
|
|
||||
Product costs
|
769
|
|
|
790
|
|
|
+21
|
|
+3%
|
||
Operating and maintenance expenses
|
298
|
|
|
260
|
|
|
-38
|
|
-15%
|
||
Depreciation and amortization expenses
|
214
|
|
|
201
|
|
|
-13
|
|
-6%
|
||
Selling, general, and administrative expenses
|
150
|
|
|
132
|
|
|
-18
|
|
-14%
|
||
Net insurance recoveries – Geismar Incident
|
(119
|
)
|
|
—
|
|
|
+119
|
|
NM
|
||
Other (income) expense – net
|
17
|
|
|
1
|
|
|
-16
|
|
NM
|
||
Total costs and expenses
|
1,329
|
|
|
1,384
|
|
|
|
|
|
||
Operating income (loss)
|
420
|
|
|
426
|
|
|
|
|
|
||
Equity earnings (losses)
|
(48
|
)
|
|
18
|
|
|
-66
|
|
NM
|
||
Interest expense
|
(140
|
)
|
|
(128
|
)
|
|
-12
|
|
-9%
|
||
Other investing income – net
|
14
|
|
|
13
|
|
|
+1
|
|
+8%
|
||
Other income (expense) – net
|
1
|
|
|
(2
|
)
|
|
+3
|
|
NM
|
||
Income (loss) from continuing operations before income taxes
|
247
|
|
|
327
|
|
|
|
|
|
||
Provision (benefit) for income taxes
|
51
|
|
|
96
|
|
|
+45
|
|
+47%
|
||
Income (loss) from continuing operations
|
196
|
|
|
231
|
|
|
|
|
|
||
Income (loss) from discontinued operations
|
—
|
|
|
(1
|
)
|
|
+1
|
|
NM
|
||
Net income (loss)
|
196
|
|
|
230
|
|
|
|
|
|
||
Less: Net income attributable to noncontrolling interests
|
56
|
|
|
69
|
|
|
+13
|
|
+19%
|
||
Net income (loss) attributable to The Williams Companies, Inc.
|
$
|
140
|
|
|
$
|
161
|
|
|
|
|
|
|
*
|
+ = Favorable change; - = Unfavorable change; NM = A percentage calculation is not meaningful due to a change in signs, a zero-value denominator, or a percentage change greater than 200.
|
|
Three months ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
|
(Millions)
|
||||||
Segment revenues
|
$
|
1,693
|
|
|
$
|
1,806
|
|
Segment costs and expenses
|
(1,213
|
)
|
|
(1,330
|
)
|
||
Equity earnings (losses)
|
23
|
|
|
18
|
|
||
Segment profit
|
$
|
503
|
|
|
$
|
494
|
|
•
|
A $190 million decrease in olefin sales primarily associated with a $161 million decrease in volumes due to the lack of production in 2014 as a result of the Geismar Incident and a $25 million decrease in volumes at our RGP splitter primarily due to an outage in a third-party storage facility which caused us to reduce production (substantially offset in
Product costs
).
|
•
|
A $29 million decrease in revenues from our equity NGLs primarily reflecting a decrease of $56 million due to lower volumes, partially offset by a $27 million increase associated with 16 percent higher average non-ethane per-unit sales prices. Equity non-ethane sales volumes are 31 percent lower primarily due to a customer contract that expired in September 2013 and higher inventory levels, partially offset by 44 percent higher equity ethane sales volumes primarily driven by new volumes from the Canadian ethane recovery project placed into service in the fourth quarter of 2013.
|
•
|
A $61 million increase in service revenues primarily due to $31 million higher natural gas transportation revenues from expansion projects placed into service in 2013, as well as new rates effective in March 2013 for Transco. In addition, fee revenues increased $27 million resulting from higher gathering volumes driven by new well connections and increased gathering rates associated with customer contract modifications in the Northeast region primarily in the Susquehanna Supply Hub. Fee revenues also increased $9 million due to contributions from our Ohio Valley Midstream business resulting from the processing and fractionation facilities placed in service in 2013. These increases are partially offset by $10 million lower production handling, lower gathering, and lower crude oil transportation fee revenues in the Gulf Coast region due to a decrease in production area volumes and producers' operational issues.
|
•
|
A $44 million increase in marketing revenues primarily associated with higher NGL prices and higher ethane volumes, partially offset by lower non-ethane volumes and other products. The changes in marketing revenues are substantially offset by similar changes in marketing purchases.
|
•
|
A $119 million favorable change in
Net insurance recoveries – Geismar Incident
attributable to the receipt of $125 million of insurance recoveries during the first quarter of 2014, partially offset by $6 million of related covered insurable expenses in excess of our retentions (deductibles).
|
•
|
A $68 million decrease in olefin feedstock purchases primarily associated with a $49 million decrease in volumes due to the lack of production in 2014 as a result of the Geismar Incident and a $23 million decrease in volumes at our RGP splitter primarily due to the third-party storage facility outage, as discussed above (more than offset in
Product sales
).
|
•
|
A $37 million increase in marketing purchases primarily due to higher NGL prices and higher ethane volumes, partially offset by lower non-ethane volumes and other products (more than offset in marketing revenues).
|
•
|
A $9 million increase in costs associated with the production of our equity NGLs reflecting a $30 million increase related to higher average natural gas prices, partially offset by a decrease of $21 million associated with lower volumes.
|
•
|
An $8 million increase in operating costs primarily due to a $12 million increase in
Depreciation and amortization expenses
associated with
the Ohio Valley Midstream and Susquehanna Supply Hub businesses due to growth in these operations and the ethane recovery project placed into service in fourth-quarter 2013 associated with our Canadian operations.
|
•
|
A $16 million unfavorable change in
Other (income) expense – net
primarily due to the absence of a $6 million favorable contingency settlement recognized in first-quarter 2013 and costs incurred in first-quarter 2014 associated with fire damage at a compressor station in the Susquehanna Supply Hub.
|
•
|
A $119 million favorable change in
Net insurance recoveries – Geismar Incident
as previously discussed.
|
•
|
A $61 million increase in service revenues as previously discussed.
|
•
|
A $7 million increase in marketing margins.
|
•
|
A $122 million decrease in olefin margins, including $111 million lower olefin margins at our Geismar plant and $10 million lower olefin margins associated with our Canadian operations driven by lower volumes and higher natural gas prices.
|
•
|
A $38 million decrease in NGL margins driven primarily by lower NGL volumes and higher natural gas prices, partially offset by higher average NGL prices and lower natural gas volumes.
|
•
|
A $16 million unfavorable change in
Other (income) expense – net
as previously discussed.
|
•
|
An $8 million increase in operating costs as previously discussed.
|
|
Three months ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
|
(Millions)
|
||||||
Segment costs and expenses
|
$
|
(23
|
)
|
|
$
|
(2
|
)
|
Equity earnings (losses)
|
(77
|
)
|
|
—
|
|
||
Segment profit (loss)
|
$
|
(100
|
)
|
|
$
|
(2
|
)
|
|
Three months ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
|
(Millions)
|
||||||
Segment profit
|
$
|
6
|
|
|
$
|
—
|
|
|
Three months ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
|
(Millions)
|
||||||
Segment revenues
|
$
|
59
|
|
|
$
|
7
|
|
Segment profit (loss)
|
3
|
|
|
(5
|
)
|
•
|
Firm demand and capacity reservation transportation revenues under long-term contracts;
|
•
|
Fee-based revenues from certain gathering and processing services.
|
•
|
We expect capital and investment expenditures to total between $3.76 billion and $4.44 billion in 2014. Of this total, maintenance capital expenditures, which are generally considered nondiscretionary and include expenditures to meet legal and regulatory requirements, to maintain and/or extend the operating capacity and useful lives of our assets, and to complete certain well connections, are expected to total between $360 million and $440 million. Expansion capital expenditures, which are generally more discretionary as compared to maintenance capital expenditures, are used to fund projects in order to grow our business and are expected to total between $3.4 billion and $4 billion. See Company Outlook – Expansion Projects for discussions describing the general nature of these expenditures. In addition, we retain the flexibility to adjust our planned levels of capital and investment expenditures in response to changes in economic conditions or business opportunities.
|
•
|
We expect to pay total cash dividends of approximately $1.75 per common share in 2014, an increase of 22 percent over 2013 levels.
|
•
|
We expect to fund working capital requirements, capital and investment expenditures, debt service payments, dividends and distributions and tax payments primarily through cash flow from operations, cash and cash equivalents on hand, issuances of WPZ debt and/or equity securities, and utilization of our credit facility and WPZ’s credit facility and/or commercial paper program.
|
•
|
Cash generated from our operations, including cash distributions from WPZ and our equity-method investments based on our level of ownership and incentive distribution rights;
|
•
|
Cash and cash equivalents on hand;
|
•
|
Cash proceeds from WPZ’s issuances of debt and/or equity securities;
|
•
|
Use of WPZ’s commercial paper program and/or credit facility.
|
|
March 31, 2014
|
||||||||||
Available Liquidity
|
WPZ
|
|
WMB
|
|
Total
|
||||||
|
(Millions)
|
||||||||||
Cash and cash equivalents
|
$
|
535
|
|
|
$
|
529
|
|
|
$
|
1,064
|
|
Capacity available under our $1.5 billion credit facility (expires July 31, 2018) (1)
|
|
|
1,500
|
|
|
1,500
|
|
||||
Capacity available to WPZ under its $2.5 billion five-year credit facility (expires July 31, 2018) less amounts outstanding under its $2 billion commercial paper program (2)
|
2,500
|
|
|
|
|
2,500
|
|
||||
|
$
|
3,035
|
|
|
$
|
2,029
|
|
|
$
|
5,064
|
|
|
(1)
|
We have not borrowed on our credit facility during 2014. At
March 31, 2014
, we are in compliance with the financial covenants associated with this credit facility. The credit facility capacity, under certain circumstances, may be increased up to an additional $500 million.
|
(2)
|
WPZ has not borrowed on its credit facility during 2014 and has no
Commercial paper
outstanding at March 31, 2014. The highest amount outstanding under the commercial paper program during 2014 was $900 million. At
March 31, 2014
, WPZ is in compliance with the financial covenants associated with the credit facility and commercial paper program. The WPZ credit facility is only available to WPZ, Transco, and Northwest Pipeline as co-borrowers and under certain circumstances, the capacity may be increased up to an additional $500 million. In managing our available liquidity, we do not expect a maximum outstanding amount in excess of the capacity of WPZ’s credit facility inclusive of any outstanding amounts under WPZ’s commercial paper program.
|
|
Rating Agency
|
|
Outlook
|
|
Senior
Unsecured
Debt
Rating
|
|
Corporate
Credit Rating
|
|
|
|
|||||
|
|
|
|||||
Williams:
|
|
|
|
|
|
|
|
|
Standard & Poor’s
|
|
Stable
|
|
BBB-
|
|
BBB
|
|
Moody’s Investors Service
|
|
Stable
|
|
Baa3
|
|
N/A
|
|
Fitch Ratings
|
|
Stable
|
|
BBB-
|
|
N/A
|
Williams Partners:
|
|
|
|
|
|
|
|
|
Standard & Poor’s
|
|
Stable
|
|
BBB
|
|
BBB
|
|
Moody’s Investors Service
|
|
Stable
|
|
Baa2
|
|
N/A
|
|
Fitch Ratings
|
|
Stable
|
|
BBB
|
|
N/A
|
|
Three months ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
|
(Millions)
|
||||||
Net cash provided (used) by:
|
|
|
|
||||
Operating activities
|
$
|
446
|
|
|
$
|
495
|
|
Financing activities
|
929
|
|
|
176
|
|
||
Investing activities
|
(992
|
)
|
|
(808
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
$
|
383
|
|
|
$
|
(137
|
)
|
•
|
$225 million net payments in 2014 on WPZ’s commercial paper;
|
•
|
$1.496 billion net received in 2014 from WPZ’s previously mentioned debt offering;
|
•
|
$770 million received in 2013 from WPZ’s credit facility borrowings;
|
•
|
$895 million paid in 2013 on WPZ’s credit facility borrowings;
|
•
|
$617 million received in 2013 from WPZ’s equity offerings;
|
•
|
$276 million in 2014 and $231 million in 2013 paid for quarterly dividends on common stock;
|
•
|
$147 million in 2014 and $105 million in 2013 paid for dividends and distributions to noncontrolling interests;
|
•
|
$63 million received in 2014 from contributions from noncontrolling interests.
|
•
|
Capital expenditures of $793 million in 2014 and $713 million in 2013;
|
•
|
Purchases of and contributions to our equity-method investments of $228 million in 2014 and $93 million in 2013.
|
Exhibit
No.
|
|
|
|
Description
|
|
|
|
|
|
Exhibit 3.1
|
|
—
|
|
Amended and Restated Certificate of Incorporation (filed on May 26, 2010, as Exhibit 3.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
|
Exhibit 3.2
|
|
—
|
|
By-Laws (filed on May 26, 2010, as Exhibit 3.2 to The Williams Companies Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
|
Exhibit 10.1
|
|
—
|
|
Settlement Agreement, dated as of February 25, 2014, by and among Corvex Management LP, Keith Meister, Soroban Master Fund LP, Soroban Capital Partners LLC, Eric W. Mandelblatt, and The Williams Companies, Inc. (filed on February 25, 2014, as Exhibit 99.1 to The Williams Companies Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
|
*Exhibit 10.2§
|
|
—
|
|
Letter Agreement, dated January 27, 2014, with James E. Scheel, Senior Vice President - Northeast G&P, regarding Relocation from Pennsylvania Benefits.
|
*Exhibit 12
|
|
—
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
*Exhibit 31.1
|
|
—
|
|
Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
*Exhibit 31.2
|
|
—
|
|
Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
**Exhibit 32
|
|
—
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
*Exhibit 101.INS
|
|
—
|
|
XBRL Instance Document.
|
*Exhibit 101.SCH
|
|
—
|
|
XBRL Taxonomy Extension Schema.
|
*Exhibit 101.CAL
|
|
—
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
*Exhibit 101.DEF
|
|
—
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
*Exhibit 101.LAB
|
|
—
|
|
XBRL Taxonomy Extension Label Linkbase.
|
*Exhibit 101.PRE
|
|
—
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
|
|
T
HE
W
ILLIAMS
C
OMPANIES
, I
NC
.
|
|
(Registrant)
|
|
|
|
/s/ T
ED
T. T
IMMERMANS
|
|
Ted T. Timmermans
|
|
Vice President, Controller and Chief Accounting
Officer (Duly Authorized Officer and Principal
Accounting Officer)
|
Exhibit
No.
|
|
|
|
Description
|
|
|
|
|
|
Exhibit 3.1
|
|
—
|
|
Amended and Restated Certificate of Incorporation (filed on May 26, 2010, as Exhibit 3.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
|
Exhibit 3.2
|
|
—
|
|
By-Laws (filed on May 26, 2010, as Exhibit 3.2 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
|
Exhibit 10.1
|
|
—
|
|
Settlement Agreement, dated as of February 25, 2014, by and among Corvex Management LP, Keith Meister, Soroban Master Fund LP, Soroban Capital Partners LLC, Eric W. Mandelblatt, and The Williams Companies, Inc. (filed on February 25, 2014, as Exhibit 99.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference.)
|
*Exhibit 10.2§
|
|
—
|
|
Letter Agreement, dated January 27, 2014, with James E. Scheel, Senior Vice President - Northeast G&P, regarding Relocation from Pennsylvania Benefits.
|
*Exhibit 12
|
|
—
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
*Exhibit 31.1
|
|
—
|
|
Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
*Exhibit 31.2
|
|
—
|
|
Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
**Exhibit 32
|
|
—
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
*Exhibit 101.INS
|
|
—
|
|
XBRL Instance Document.
|
*Exhibit 101.SCH
|
|
—
|
|
XBRL Taxonomy Extension Schema.
|
*Exhibit 101.CAL
|
|
—
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
*Exhibit 101.DEF
|
|
—
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
*Exhibit 101.LAB
|
|
—
|
|
XBRL Taxonomy Extension Label Linkbase.
|
*Exhibit 101.PRE
|
|
—
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
|
|
Three months ended
|
||
|
March 31, 2014
|
||
|
(Millions)
|
||
Earnings:
|
|
||
Income from continuing operations before income taxes
|
$
|
247
|
|
Add: Equity losses
|
48
|
|
|
Income from continuing operations before income taxes and equity losses
|
295
|
|
|
Add:
|
|
||
Fixed charges:
|
|
||
Interest incurred (1)
|
169
|
|
|
Rental expense representative of interest factor
|
3
|
|
|
Total fixed charges
|
172
|
|
|
Distributed income of equity-method investees
|
74
|
|
|
Less:
|
|
||
Interest capitalized
|
(29
|
)
|
|
Total earnings as adjusted
|
$
|
512
|
|
Fixed charges
|
$
|
172
|
|
Ratio of earnings to fixed charges
|
2.98
|
|
|
(1)
|
Does not include interest related to income taxes, including interest related to liabilities for uncertain tax positions, which is included in
Provision (benefit) for income taxes
in our Consolidated Statement of Income.
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Alan S. Armstrong
|
|
Alan S. Armstrong
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Donald R. Chappel
|
|
Donald R. Chappel
|
|
Senior Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|
/s/ Alan S. Armstrong
|
Alan S. Armstrong
|
President and Chief Executive Officer
|
May 1, 2014
|
|
/s/ Donald R. Chappel
|
Donald R. Chappel
|
Chief Financial Officer
|
May 1, 2014
|