Williams Companies WMB · USD

Note 19 – Segment Disclosures WilliamsWilliams’ reportable segments are Transmission, Power & Gulf; Northeast G&P; West; and Gas & NGL Marketing Services. All remaining business activities are included in Other. (See Note 1 – Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies.)Performance MeasurementWilliams’ CODM is the Chief Executive Officer. Williams’ CODM 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. Williams defines Modified EBITDA of reportable segments as follows:•Income (loss) before income taxes excluding:◦Contributions from upstream operations, corporate, and other business activities;◦Depreciation, depletion, and amortization expenses;◦Equity earnings (losses);◦Other investing income (loss) – net;◦Interest expense; and◦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, including its indirect share from interests owned by equity-method investees, 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 or write-offs 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 upstream 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 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.

Note 5 – Revenue RecognitionRevenue by CategoryThe following tables present Williams’ revenue disaggregated by major service line:Transmission, Power & GulfNortheast G&PWestGas & NGL Marketing ServicesOtherEliminationsTotal(Millions)2025Revenues from contracts with customers:Service revenues:Regulated interstate natural gas transportation and storage$3,804 $— $— $— $— $(83)$3,721 Gathering, processing, transportation, fractionation, and storage:Monetary consideration933 1,850 1,824 — — (235)4,372 Commodity consideration104 2 86 — — — 192 Other51 99 24 — 1 (20)155 Total service revenues4,892 1,951 1,934 — 1 (338)8,440 Product sales512 171 906 6,047 580 (1,757)6,459 Total revenues from contracts with customers5,404 2,122 2,840 6,047 581 (2,095)14,899 Other revenues (1)39 46 7 3,303 61 (2)3,454 Other adjustments (2)— — — (7,175)— 772 (6,403)Total revenues$5,443 $2,168 $2,847 $2,175 $642 $(1,325)$11,950 2024Revenues from contracts with customers:Service revenues:Regulated interstate natural gas transportation and storage$3,500 $— $— $— $— $(81)$3,419 Gathering, processing, transportation, fractionation, and storage:Monetary consideration661 1,778 1,693 — — (162)3,970 Commodity consideration54 2 78 — — — 134 Other46 92 21 — — (19)140 Total service revenues4,261 1,872 1,792 — — (262)7,663 Product sales328 110 869 4,530 420 (1,288)4,969 Total revenues from contracts with customers4,589 1,982 2,661 4,530 420 (1,550)12,632 Other revenues (1)39 43 8 2,236 24 (2)2,348 Other adjustments (2)— — — (4,977)— 500 (4,477)Total revenues$4,628 $2,025 $2,669 $1,789 $444 $(1,052)$10,503 Transmission, Power & GulfNortheast G&PWestGas & NGL Marketing ServicesOtherEliminationsTotal(Millions)2023Revenues from contracts with customers:Service revenues:Regulated interstate natural gas transportation and storage$3,334 $— $— $— $— $(60)$3,274 Gathering, processing, transportation, fractionation, and storage:Monetary consideration443 1,782 1,478 — — (170)3,533 Commodity consideration38 5 103 — — — 146 Other30 87 12 1 — (15)115 Total service revenues3,845 1,874 1,593 1 — (245)7,068 Product sales252 132 441 4,615 442 (954)4,928 Total revenues from contracts with customers4,097 2,006 2,034 4,616 442 (1,199)11,996 Other revenues (1)53 27 101 4,294 64 (2)4,537 Other adjustments (2)— — — (6,032)— 406 (5,626)Total revenues$4,150 $2,033 $2,135 $2,878 $506 $(795)$10,907 ______________(1)Revenues not derived from contracts with customers primarily consist of physical product sales related to comm

Note 18 – Contingencies and CommitmentsRoyalty MattersCertain 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 applied to both Chesapeake and Williams and did 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. Two objectors filed an appeal with the United States Court of Appeals for the Fifth Circuit. On June 8, 2023, the Court of Appeals vacated the settlement approval and remanded to the United States District Court for the Southern District of Texas with instructions to dismiss the settlement proceedings for lack of jurisdiction. On August 31, 2023, the bankruptcy court entered an order finding the settlement agreements to be null and void. Certain plaintiffs 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 stated that plaintiffs are not releasing their claims against the other defendants, including Williams, or claims against Chesapeake that arose after February 9, 2021. Chesapeake has been dismissed from the lawsuits. Williams continues to believe the claims against Williams are subject to indemnity obligations owed to Williams by Chesapeake. Rate Matters On August 30, 2024, Transco filed a general rate case with the FERC for an overall increase in rates and to comply with the terms of the settlement of its prior rate case.

Note 13 – Debt and Banking ArrangementsLong-Term Debt by Issuing EntityDecember 31, 20252024(Millions)Transco:7.080% Debentures due 2026$8 $8 7.250% Debentures due 2026200 200 7.850% Notes due 2026— 1,000 4.000% Notes due 2028400 400 3.250% Notes due 2030700 700 5.100% Notes due 20361,000 — 5.400% Notes due 2041375 375 4.450% Notes due 2042400 400 4.600% Notes due 2048600 600 3.950% Notes due 2050500 500 5.750% Notes due 2056700 — Other financing obligation — Atlantic Sunrise734 764 Other financing obligation — Leidy South74 75 Other financing obligation — Dalton247 247 Unamortized debt issuance costs(35)(23)Net unamortized debt premium (discount)(15)(11)Total debt — Transco$5,888 $5,235 MountainWest:3.530% Notes due 2028 (Note 3)$100 $100 3.910% Notes due 2038 (Note 3)150 150 4.875% Notes due 2041 (Note 3)180 180 Net unamortized debt premium (discount)(54)(58)Total debt — MountainWest$376 $372 NWP:7.125% Debentures due 2025$— $85 4.000% Notes due 2027500 500 Term loan due 2028 (see NWP Credit Agreement)250 — Unamortized debt issuance costs(1)(1)Net unamortized debt premium (discount)(1)(2)Total debt — NWP$748 $582 Williams:3.900% Notes due 2025$— $750 4.000% Notes due 2025— 750 5.400% Notes due 20261,100 1,100 7.700% Notes due 20272 2 3.750% Notes due 20271,450 1,450 5.300% Notes due 2028900 900 4.900% Notes due 20291,100 1,100 4.800% Notes due 2029450 450 4.625% Notes due 2030750 — 3.500% Notes due 20301,000 1,000 December 31, 20252024(Millions)2.600% Notes due 2031$1,500 $1,500 7.500% Debentures due 2031339 339 7.750% Notes due 2031252 252 8.750% Notes due 2032445 445 4.650% Notes due 20321,000 1,000 5.650% Notes due 2033750 750 5.150% Notes due 20341,300 1,300 5.300% Notes due 2035750 — 5.600% Notes due 20351,000 — 6.300% Notes due 20401,250 1,250 5.800% Notes due 2043400 400 5.400% Notes due 2044500 500 5.750% Notes due 2044650 650 4.900% Notes due 2045500 500 5.100% Notes due 20451,000 1,000 4.850% Notes due 2048800 800 3.500% Notes due 2051650 650 5.300% Notes due 2052750 750 5.800% Notes due 2054750 750 6.

As part of the private debt placement, Transco entered into a registration rights agreement with the initial purchasers of the unsecured notes. Under the terms of the agreement, Transco is obligated to file and consummate a registration statement for an offer to exchange the notes for a new issue of substantially identical notes registered under the Securities Act of 1933, as amended, within 365 days from closing and to use commercially reasonable efforts to complete the exchange offer.

Note 14 – LeasesWilliams, 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.WilliamsYear Ended December 31,202520242023(Millions)Lease Cost:Operating lease cost$39 $39 $38 Variable lease cost33 31 31 Sublease income— — (1)Total lease cost$72 $70 $68 Cash paid for operating lease liabilities$40 $37 $37 December 31,20252024(Dollars in Millions)Other Information:Right-of-use assets (included in Regulatory assets, deferred charges, and other)$170 $154 Operating lease liabilities:Current (included in Other current liabilities)$32 $26 Noncurrent (included in Regulatory liabilities, deferred income, and other)$151 $142 Weighted-average remaining lease term – operating leases (years)1011Weighted-average discount rate – operating leases4.99%4.90%At December 31, 2025, 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:(Millions)2026$40 202736 202828 202925 203021 Thereafter87 Total future lease payments237 Less: Amount representing interest54 Total obligations under operating leases$183 Williams is the lessor to certain lease agreements for office space in its headquarters building, which are insignificant to its financial statements.TranscoYear Ended December 31,202520242023(Millions)Lease Cost:Operating lease cost$11 $9 $9 Variable lease cost7 7 7 Total lease cost$18 $16 $16 Cash paid for operating lease liabilities$12 $9 $10 December 31,20252024(Dollars in Millions)Other Information:Right-of-use assets (included in Deferred charges and other in Transco’s Balance Sheet)$64 $48 Operating lease liabilities:Current (included in Other current liabilities in Transco’s Balance Sheet)$9 $6 Noncurrent (included in Deferred income and other in Transco’s Balance Sheet)$63 $51 Weighted-average remaining lease term – operating leases (years)1213Weighted-average discount rate – operating leases4.84%4.

Note 3 – Acquisitions and DivestituresCrowheart AcquisitionAs 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.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.Acquisition-related costs for the Crowheart Acquisition total $2 million and are included in General and administrative expenses.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 valuation techniques used for property, plant, and equipment consisted of the income approach for proved developed producing reserves and the market approach for undeveloped reserves.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 1, 2024. After the December 31, 2024, financial statements were issued, Williams identified adjustments to the preliminary purchase price allocation, resulting in decreases of $56 million in property, plant, and equipment and $56 million in noncurrent liabilities.