WILLIAMS COMPANIES 2023
Annual Report
WilliamsVision,MissionandCoreValues
Vision
As the world demands reliable, low-cost,low-carbon energy, Williams will be there with
the best transport, storage and delivery solutions. We make clean energy happen by being the best-in-class operator of the critical infrastructure that supports a clean energy future.
Mission
Williams is committed to being the leader in providing infrastructure that safely delivers natural gas products to reliably fuel the clean energy economy.
At Williams, We Are
Forward-Looking Statements: Any statements included in this 2023 Annual Report that are | Table of Contents | |
not historical facts, including, without limitation, statements regarding future market trends | 1 | Stockholder Letter |
and anticipated operations are forward-looking statements within the meaning of applicable | ||
securities law. Such statements are subject to numerous risks and uncertainties beyond | 3 | Directors and Officers |
our control and our actual results may differ materially from our forward-looking statements. | 5 | Form 10-K |
Additional information concerning factors that may influence our results can be found in the | ||
Form 10-K under the heading "Part I, Item 1A. Risk Factors." | ||
ALAN S. ARMSTRONG
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Dear Fellow Shareholders:
Williams delivered excellent financial results in 2023, with contracted transmission capacity, gathering volumes and Adjusted EBITDA surpassing previous highs, once again demonstrating the strength of our natural gas-focused strategy and our ability to grow despite low natural gas prices. We once again exceeded the earnings guidance that we originally established for 2023 and have now met or exceeded analyst expectations for 32 quarters in a row.
We maintained a strong balance sheet and returned $2.179 billion in dividends to shareholders while also executing on $130 million of opportunistic share buybacks within our repurchase program. Our latest increase in the dividend delivers a
5-year compounded annual growth rate of 6% and places Williams at the top quartile within the S&P 500 - and it is worth noting that 2024
will mark the 50th consecutive year of dividend payments.
Our track record of delivering predictable, growing earnings in a wide variety of market cycles underscores the value of Williams as a resilient, long-term investment with a growing dividend. We've built a durable business positioned for the future, and we're leveraging our existing infrastructure to serve rising domestic and global energy security needs, while lowering emissions and creating sustainable value
for shareholders.
OUR INFRASTRUCTURE TODAY IS VITAL TO MEETING THE ENERGY NEEDS OF TOMORROW
Despite what has become a complex and challenging permitting environment for energy infrastructure of all types, Williams is successfully
executing expansion projects to meet rising natural gas demand.
In October, we placed the first phase of another Transco expansion project, Regional Energy Access, into service ahead of schedule, ensuring that Northeast natural gas could be delivered to nearby markets in time for the winter heating season. In addition, we advanced 10 FERC-regulated expansion projects through the permitting process and won contracts for the largest economic expansion ever on Transco. In total, we have
18 high-return projects in execution, including approximately 3.1 billion cubic feet per day (Bcf/d)
of expansions on Transco coming online over the next few years.
Additionally, we made strategic investments in 2023, including the integration of MountainWest Pipeline, adding approximately
2023 Annual Report | The Williams Companies, Inc. |
1
Austin W., Business Analyst II, volunteers at the annual United Way Day of Caring in Tulsa.
In 2023, employees logged more than 35,000 volunteer hours in communities where our employees live and work.
8 Bcf/d of transmission capacity, as well as storage, to our portfolio and enhancing access to the Rockies and West Coast markets. Williams also completed two strategic transactions that dramatically grew our position in the DJ Basin. And we acquired
a strategically located natural gas storage portfolio on the Gulf Coast.
Looking ahead, Williams is well positioned to provide additional natural gas solutions to support the reliability of the U.S. power sector as it faces growing regional demand driven in part by the emergence of new, large-scale data centers that are accelerating throughout our key markets. And as the largest natural gas storage operator on the Gulf Coast, we are extremely well positioned to capitalize on LNG exports, which are expected to double over the next decade.
COMMITMENT TO A CLEAN ENERGY FUTURE
Ramping up the production of natural gas has allowed the United States to meet our evolving domestic needs as well as provide energy security and support to our global allies.
It stands, unmatched, as the most affordable and reliable source of lower emissions energy.
At Williams, we are committed to a clean energy future that harnesses the power of natural gas. That means scaling up renewable sources to reduce carbon, while backing up those sources with the flexibility, scale and reliability of natural gas - both in home heating and producing electricity. We're executing on our multi-year asset modernization program across our footprint while holding ourselves accountable as well by tracking and reporting methane releases, joining the United Nations flagship methane performance initiative (OGMP 2.0) to strengthen transparency in emissions reporting, and offering responsibly sourced NextGen Gas whose cleanliness is independently verified all along the value chain.
We're proud of our focus on doing business the right way and this commitment is reflected in the recognition we received in 2023 by S&P Global, MSCI and Dow Jones Sustainability Index for our commitment to transparency, strong governance and environmental performance. Notably, Williams achieved an upgraded 'A-' score on the 2023 CDP Climate Change Questionnaire, exceeding the sector and regional averages of a 'C'.
WILLIAMS IS BUILT
FOR LONGEVITY
For more than a century, the Williams name has been associated with energy, innovation and trust. As one of the nation's leading energy infrastructure companies, we are committed to leveraging our natural gas network for the benefit of generations to come, while creating long-term value for our shareholders. We continually pressure ourselves to be better at delivering on our current strategy while constantly looking around the corner to see what new opportunities tomorrow will bring.
I'm excited to see how our employees and leadership are more motivated than ever to tackle challenges around energy security, affordability and climate concerns.
On behalf of all of Williams, I want to thank you, the shareholder, for your continued trust and investment in Williams.
Alan S. Armstrong
President and Chief Executive Officer March 20, 2024
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The Williams Companies, Inc. | 2023 Annual Report |
D I R E C T O R S A N D O F F I C E R S
DIRECTORS
ALAN S. ARMSTRONG
Tulsa, Oklahoma
President and Chief
Executive Officer, Williams.
Director since 2011.
STEPHEN W. BERGSTROM The Woodlands, Texas Retired Board Chair, President and Chief Executive Officer American Midstream Partners, GP, LLC. Chairman; Director since 2016.
MICHAEL A. CREEL
The Woodlands, Texas
Retired Director and
Chief Executive Officer,
Enterprise Products Partners L.P.
Director since 2016.
STACEY H. DORÉ Dallas, Texas Executive Vice President
of Public Affairs and Chief Strategy and Sustainability Officer, Vistra Corp. Director since 2021.
CARRI A. LOCKHART
Fulshear, Texas
Retired Executive Vice President, Technology, Digital & Innovation, Equinor. Director since 2023.
RICHARD E. MUNCRIEF Edmond, Oklahoma Director, President
and Chief Executive Officer, Devon Energy Corporation Director since 2022.
PETER A. RAGAUSS
Houston, Texas
Retired Senior Vice President and Chief Financial Officer, Baker Hughes Company. Director since 2016.
ROSE M. ROBESON
Centennial, Colorado Retired Group Vice President and Chief Financial Officer, DCP Midstream LLC. Director since 2020.
SCOTT D. SHEFFIELD
Irving, Texas
Director and Retired Chief
Executive Officer,
Pioneer Natural Resources Company.
Director since 2016.
MURRAY D. SMITH Calgary, Alberta, Canada President,
Murray D. Smith and Associates and Former Minister of Energy for Alberta, Canada.
Director since 2012.
WILLIAM H. SPENCE Bethlehem, Pennsylvania Retired Board Chair, President, and Chief Executive Officer, PPL Corporation.
Director since 2016.
JESSE J. TYSON
The Woodlands, Texas. Retired President
and Chief Executive Officer, ExxonMobil Inter-Americas. Director since 2022.
SENIOR OFFICERS
ALAN S. ARMSTRONG
President and Chief
Executive Officer
MICHEAL G. DUNN
Executive Vice President
and Chief Operating Officer
CHAD J. ZAMARIN
Executive Vice President of
Corporate Strategic Development
LARRY C. LARSEN
Senior Vice President -
Gathering & Processing
ERIC J. ORMOND
Senior Vice President -
Project Execution
DEBBIE L. PICKLE
Senior Vice President and
Chief Human Resources Officer
JOHN D. PORTER
Senior Vice President and
Chief Financial Officer
CHAD A. TEPLY
Senior Vice President -
Transmission and Gulf of Mexico
T. LANE WILSON
Senior Vice President
and General Counsel
BOARD COMMITTEES
Audit Committee
Michael A. Creel
Stacey H. Doré
Peter A. Ragauss
Rose M. Robeson (Chair)
Jesse J. Tyson
Compensation & Management Development Committee
Stephen W. Bergstrom
Carri A. Lockhart
Richard E. Muncrief
Scott D. Sheffield
Murray D. Smith
William H. Spence (Chair)
Governance & Sustainability Committee
Stephen W. Bergstrom
Stacey H. Doré (Chair)
Peter A. Ragauss
William H. Spence
Jesse J. Tyson
Environmental, Health & Safety Committee
Michael A. Creel (Chair)
Carri A. Lockhart
Richard E. Muncrief
Rose M. Robeson
Scott D. Sheffield
Murray D. Smith
2023 Annual Report | The Williams Companies, Inc. |
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
-
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
TRANSITION REPORT PURSUANT | OR | |
☐ | TO SECTION 13 OR 15(d) OF THE SECURITIES | |
EXCHANGE ACT OF 1934 | ||
For the transition period from | to |
Commission file number 1-4174
The Williams Companies, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware | 73-0569878 | |||
(State or Other Jurisdiction of | (IRS Employer | |||
Incorporation or Organization) | Identification No.) | |||
One Williams Center | ||||
Tulsa | Oklahoma | 74172 | ||
(Address of Principal Executive Offices) | (Zip Code) | |||
800-945-5426(800-WILLIAMS) | ||||
(Registrant's Telephone Number, Including Area Code) | ||||
Securities registered pursuant to Section 12(b) of the Act: | ||||
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
Common Stock, $1.00 par value | WMB | New York Stock Exchange | ||
Securities registered pursuant to Section 12(g) of the Act: | ||||
None | ||||
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. | Yes ☑ | No ☐ | ||
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. | Yes ☐ | No ☑ |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☑ | Accelerated filer | ☐ | Non-accelerated filer ☐ | Smaller reporting company | ☐ Emerging growth company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the registrant's most recently completed second quarter was approximately $38,305,701,487.
The number of shares outstanding of the registrant's common stock outstanding at February 16, 2024 was 1,216,750,172.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Definitive Proxy Statement for the Registrant's Annual Meeting of Stockholders to be held on April 30, 2024, are incorporated into Part III, as specifically set forth in Part III.
Item 1.
Item 1A.
Item 1B.
Item 1C.
Item 2.
Item 3.
Item 4.
Item 5.
Item 7.
Item 7A.
Item 8.
THE WILLIAMS COMPANIES, INC. | |
FORM 10-K | |
TABLE OF CONTENTS | |
Page | |
PART I | |
Business | 5 |
General | 5 |
Service Assets, Customers, and Contracts | 6 |
Business Segments | 9 |
Transmission & Gulf of Mexico | 10 |
Northeast G&P | 14 |
West | 17 |
Gas & NGL Marketing Services | 18 |
Other | 19 |
Regulatory Matters | 20 |
Environmental Matters | 23 |
Competition | 23 |
Human Capital Resources | 24 |
Website Access to Reports and Other Information | 26 |
Risk Factors | 27 |
Unresolved Staff Comments | 42 |
Cybersecurity | 42 |
Properties | 43 |
Legal Proceedings | 43 |
Mine Safety Disclosures | 44 |
Information About Our Executive Officers | 45 |
PART II | |
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of | |
Equity Securities | 47 |
Management's Discussion and Analysis of Financial Condition and Results of Operations | 49 |
Quantitative and Qualitative Disclosures About Market Risk | 74 |
Financial Statements and Supplementary Data | 77 |
Reports of Independent Registered Public Accounting Firms | 77 |
Consolidated Statement of Income | 79 |
Consolidated Statement of Comprehensive Income (Loss) | 80 |
Consolidated Balance Sheet | 81 |
Consolidated Statement of Changes in Equity | 82 |
Consolidated Statement of Cash Flows | 83 |
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Item 9.
Item 9A.
Item 9B.
Item 9C.
Item 10.
Item 11.
Item 12.
Item 13. Item 14.
Item 15. Item 16.
PART II (continued) | |
Notes to Consolidated Financial Statements | 84 |
Note 1 - General, Description of Business, Basis of Presentation, and Summary of Significant | |
Accounting Policies | 84 |
Note 2 - Variable Interest Entities | 97 |
Note 3 - Acquisitions and Divestitures | 98 |
Note 4 - Related Party Transactions | 107 |
Note 5 - Revenue Recognition | 108 |
Note 6 - Provision (Benefit) for Income Taxes | 111 |
Note 7 - Employee Benefit Plans | 115 |
Note 8 - Investing Activities | 113 |
Note 9 - Property, Plant, and Equipment | 121 |
Note 10 - Goodwill and Other Intangible Assets | 122 |
Note 11 - Accrued and Other Current Liabilities | 124 |
Note 12 - Debt and Banking Arrangements | 125 |
Note 13 - Leases | 129 |
Note 14 - Equity-BasedCompensation | 129 |
Note 15 - Fair Value Measurements, Guarantees, and Concentration of Credit Risk | 130 |
Note 16 - Commodity Derivatives | 134 |
Note 17 - Contingencies and Commitments | 136 |
Note 18 - Segment Disclosures | 140 |
Note 19 - Subsequent Events | 144 |
Schedule II - Valuation and Qualifying Accounts | 145 |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 146 |
Controls and Procedures | 146 |
Other Information | 150 |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 150 |
PART III | |
Directors, Executive Officers and Corporate Governance | 150 |
Executive Compensation | 150 |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder | |
Matters | 150 |
Certain Relationships and Related Transactions, and Director Independence | 151 |
Principal Accountant Fees and Services | 151 |
PART IV | |
Exhibits and Financial Statement Schedules | 152 |
Form 10-KSummary | 160 |
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DEFINITIONS
The following is a listing of certain abbreviations, acronyms, and other industry terminology that may be used throughout this Annual Report.
Measurements:
Barrel or Bbl: One barrel of petroleum products that equals 42 U.S. gallons
Mbbls/d: One thousand barrels per day
Bcf : One billion cubic feet of natural gas
Bcf/d: One billion cubic feet of natural gas per day
MMcf/d: One million cubic feet of natural gas per day
British Thermal Unit (Btu): A unit of energy needed to raise the temperature of one pound of water by one degree Fahrenheit
MMbtu: One million British thermal units
Dekatherms (Dth): A unit of energy equal to one million British thermal units
Mdth/d: One thousand dekatherms per day
MMdth: One million dekatherms or approximately one trillion British thermal units
MMdth/d: One million dekatherms per day
Government and Regulatory:
EPA: Environmental Protection Agency
Exchange Act, the: Securities and Exchange Act of 1934, as amended
FERC: Federal Energy Regulatory Commission
IRS: Internal Revenue Service
SEC: Securities and Exchange Commission
Securities Act, the: Securities Act of 1933, as amended
Other:
Note: References to numerical notes refer to our Notes to Consolidated Financial Statements.
EBITDA: Earnings before interest, taxes, depreciation, and amortization
Fractionation: The process by which a mixed stream of natural gas liquids is separated into constituent products, such as ethane, propane, and butane
GAAP: U.S. generally accepted accounting principles
LNG: Liquefied natural gas; natural gas which has been liquefied at cryogenic temperatures
MVC: Minimum volume commitments
NGLs: Natural gas liquids; natural gas liquids result from natural gas processing and crude oil refining and are used as petrochemical feedstocks, heating fuels, and gasoline additives, among other applications
NGL margins: NGL revenues less Btu replacement cost, plant fuel, transportation, and fractionation
Appalachia Midstream Investments: Our equity-method investments with an approximate average 66 percent interest in multiple gas gathering systems in the Marcellus Shale region.
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The Williams Companies Inc. published this content on 13 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 March 2024 15:43:03 UTC.
