Williams Companies · Risk factors

The business, operating results, and financial condition of Williams’, Transco’s, and NWP’s natural gas transportation and midstream businesses are dependent on the continued availability of natural gas supplies in the supply basins and demand for those supplies in the markets that they serve.

•Prices for natural gas, NGLs, oil, and other commodities are volatile, and this volatility has and could continue to adversely affect Williams’ financial condition, results of operations, cash flows, access to capital, and ability to maintain or grow its business.

•Significant prolonged changes in natural gas prices could affect supply and demand for Transco and NWP and cause a reduction in or termination of their long-term transportation and storage contracts or throughput on their systems.

•Williams, Transco, and NWP are exposed to the credit risk of customers and counterparties, and credit risk management will not be able to completely eliminate such risk.

•Williams, Transco, and NWP face opposition to the operation and expansion of pipelines and facilities from various individuals and groups.

•Williams, Transco, and NWP may not be able to grow or effectively manage growth.

•The energy industry is highly competitive, and increased competitive pressure could adversely affect Williams’, Transco’s, and NWP’s businesses and operating results.

•Williams does not own 100 percent of the equity interests of certain subsidiaries, including the nonconsolidated entities, which may limit its ability to operate and control these subsidiaries. Certain operations, including the nonconsolidated entities, are conducted through arrangements that may limit Williams’ ability to operate and control these operations.

•Williams, Transco, and NWP may not be able to replace, extend, or add additional customer contracts or contracted volumes on favorable terms, or at all, as applicable, which could affect Williams’, Transco’s, and NWP’s financial condition and ability to grow, as well as the amount of cash available to Williams to pay dividends.

•Certain of Williams’, Transco’s, and NWP’s natural gas pipeline services are subject to long-term, fixed-price contracts that are not subject to adjustment, even if the cost to perform such services exceeds the revenues received from such contracts.

•Some of Williams’, Transco’s, and NWP’s businesses are exposed to supplier concentration risks arising from dependence on a single or a limited number of suppliers.

•Transco and NWP depend on certain key customers for a significant portion of their revenues. The loss of any of these key customers or the loss of any contracted volumes could result in a decline in Transco’s and NWP’s respective businesses.

•Failure of service providers or disruptions to outsourcing relationships might negatively impact Williams’, Transco’s, and NWP’s ability to conduct business.

•An impairment of Williams’ assets, including property, plant, and equipment, intangible assets, and/or equity-method investments, could reduce Williams’ earnings.

•Increasing scrutiny and changing expectations from stakeholders with respect to environmental, social and governance practices may impose additional costs or risks.

•Williams, Transco, and NWP may be subject to physical and financial risks associated with climate change.

•Williams’, Transco’s, and NWP’s operations are subject to operational hazards that might result in unforeseen interruptions.

•Williams’, Transco’s, and NWP’s assets and operations, as well as their customers’ assets and operations, can be adversely affected by weather and other natural phenomena.

•Williams’, Transco’s, and NWP’s businesses could be negatively impacted by acts of terrorism and related disruptions.

•A breach of information technology infrastructure, including a breach caused by a cybersecurity attack on Williams, Transco, or NWP, or the third parties with whom they are interconnected, may interfere with the safe operation of assets, result in the disclosure of personal or proprietary information, and cause reputational harm.

•If third-party pipelines and other facilities interconnected to Williams’, Transco’s, and NWP’s pipelines and facilities become unavailable to transport natural gas and NGLs or to treat natural gas, as applicable, Williams’, Transco’s, and NWP’s revenues could be adversely affected.

•Williams’ operating results for certain components of its business might fluctuate on a seasonal basis.

•Williams, Transco, and NWP do not own all of the land on which their pipelines and facilities are located, which could disrupt operations.

•Williams’ business could be negatively impacted as a result of stockholder activism.

•Williams’ costs and funding obligations for defined benefit pension plans and other postretirement benefit plans, and Transco’s and NWP’s allocations regarding the same, are affected by factors beyond Williams’ control.

•A downgrade of Williams’, Transco’s, and NWP’s credit ratings, which are determined outside of their control by independent third parties, could impact liquidity, access to capital, and costs of doing business, and the ability of Transco and NWP to obtain credit in the future could be affected by Williams’ credit ratings.

•Difficult conditions in the global financial markets and the economy in general could negatively affect Williams’, Transco’s, and NWP’s businesses and results of operations.

•Restrictions in Williams’, Transco’s, and NWP’s debt agreements and the amount of indebtedness may affect future financial and operating flexibility.

•Changes to interest rates or increases in interest rates could adversely impact Williams’, Transco’s, and NWP’s access to credit, share price and ability to issue securities or incur debt for acquisitions or other purposes, as applicable, and Williams’ ability to make cash dividends at intended levels.

•Williams’ hedging activities might not be effective and could increase the volatility of Williams’ results.

•Access to capital could be affected by financial institutions’ policies concerning fossil-fuel related businesses.

•Williams can exercise substantial control over Transco’s and NWP’s distribution policies, businesses and operations and may do so in a manner that is adverse to Transco’s and NWP’s interests.

•The operation of Williams’, Transco’s, and NWP’s businesses might be adversely affected by regulatory proceedings, changes in government regulations or in their interpretation or implementation, or the introduction of new laws or regulations applicable to Williams’, Transco’s, and NWP’s businesses or customers.

•The natural gas sales, transportation, and storage operations of Williams’, Transco’s, and NWP’s natural gas pipelines are subject to regulation by the FERC, which could have an adverse impact on their ability to establish transportation and storage rates that would allow them to recover the full cost of operating their respective pipelines and storage assets, including a reasonable rate of return.

•Williams’, Transco’s, and NWP’s operations are subject to environmental laws and regulations, including laws and regulations relating to climate change and greenhouse gas emissions, which may expose them to significant costs, liabilities, and expenditures that could exceed expectations.

General Risk Factors •Williams, Transco, and NWP do not insure against all potential risks and losses and could be seriously harmed by unexpected liabilities or by the inability of insurers to satisfy claims.

•Failure to attract and retain an appropriately qualified workforce could negatively impact Williams’, Transco’s, and NWP’s results of operations.

•Holders of Williams’ common stock may not receive dividends in the amount expected or any dividends.

The ability of Williams, Transco, and NWP to maintain and expand their natural gas transportation and midstream businesses depends on the level of drilling and production, predominantly by third parties, in the supply basins near Williams’, Transco’s, and NWP’s pipelines and gathering systems. Production from existing wells and natural gas supply basins with access to Williams’, Transco’s, and NWP’s pipeline and gathering systems will naturally decline over time. The amount of natural gas reserves underlying these existing wells may also be less than anticipated, and the rate at which production from these reserves declines may be greater than anticipated. Williams, Transco, and NWP do not obtain independent evaluations of natural gas reserves, and thus, do not have independent estimates of total reserves dedicated to, or the anticipated life of reserves connected to, Williams’, Transco’s, and NWP’s systems and processing facilities.

In addition, low prices for natural gas, regulatory limitations, including permitting and environmental regulations, or the lack of available capital have, and may continue to, adversely affect the development and production of existing or additional natural gas reserves, the installation of gathering, storage, and pipeline transportation facilities, and the import and export of natural gas suppliers. Localized low natural gas prices in one or more of the existing supply basins connected to Williams, Transco, or NWP, whether caused by a lack of infrastructure or otherwise, could also result in depressed natural gas production in such basins and limit the supply of natural gas available. The competition for natural gas supplies to serve other markets could also reduce the amount of natural gas supply for customers.

A failure to obtain access to sufficient natural gas supplies will adversely impact Williams’, Transco’s, and NWP’s ability to maximize the capacities of their gathering, transportation, and processing facilities, as applicable.

Demand for Williams’, Transco’s, and NWP’s services is dependent on the demand for gas in the markets served. Demand for natural gas can be affected by weather, future industrial and economic conditions, fuel conservation measures, alternative fuel sources such as electricity, coal, fuel oils, or nuclear energy, technological advances in fuel economy, energy generation, and renewable sources of energy, and governmentally imposed constraints, such as prohibitions on natural gas hookups in newly constructed buildings, all of which are matters beyond Williams’, Transco’s, and NWP’s control.

A failure to obtain access to sufficient natural gas supplies or a reduction in demand for services in the markets served by Williams, Transco, and NWP could result in impairments of Williams’ assets and have a material adverse effect on Williams’, Transco’s, and NWP’s businesses, financial condition, results of operations, and cash flows.

Williams’ revenues, operating results, future rate of growth, and the value of certain components of its business depend primarily upon the prices of natural gas, NGLs, oil, or other commodities, and the differences between prices of these commodities, and could be materially adversely affected by an extended period of low commodity prices or a decline in commodity prices. Price volatility has and could continue to impact both the amount Williams receives for products and services and the volume of products and services sold. Prices affect the amount of cash flow available for capital expenditures and Williams’ ability to borrow money or raise additional capital. Price volatility has had, and could continue to have, an adverse effect on Williams’ business, results of operations, financial condition, and cash flows.

The markets for natural gas, NGLs, oil, and other commodities are likely to continue to be volatile. Wide fluctuations in prices might result from one or more factors beyond Williams’ control, including:

•Imbalances in supply and demand whether rising from worldwide or domestic supplies of and demand for natural gas, NGLs, oil, and related commodities;

•Geopolitical turmoil in the Middle East, Eastern Europe, and other producing regions;

•The activities of OPEC and other countries, whether acting independently of or informally aligned with OPEC, which have significant oil, natural gas, or other commodity production capabilities, including Russia;

•The level of consumer demand;

•The price and availability of other types of fuels or feedstocks;

•The availability of pipeline capacity;

•Supply disruptions, including plant outages and transportation disruptions;

•The price and quantity of foreign imports and domestic exports of natural gas and oil;

•Domestic and foreign governmental regulations and taxes; and •The credit of participants in the markets where products are bought and sold.

Higher natural gas prices over the long term could result in a decline in the demand for natural gas and, therefore, in Transco’s and NWP’s long-term transportation and storage contracts or throughput on their systems. Also, lower natural gas prices over the long term could result in a decline in the production of natural gas, resulting in reduced contracts or throughput on their systems. As a result, significant prolonged changes in natural gas prices could have a material adverse effect on Transco’s and NWP’s businesses, financial condition, results of operations, and cash flows.

Williams, Transco, and NWP are subject to the risk of loss resulting from nonpayment and/or nonperformance by customers and counterparties in the ordinary course of business. Generally, Williams’, Transco’s, and NWP’s customers are rated investment grade, are otherwise considered creditworthy, are required to make prepayments or provide security to satisfy credit concerns, or are dependent upon Williams, Transco or NWP, in some cases without a readily available alternative, to provide necessary services. However, Williams’, Transco’s, and NWP’s credit procedures and policies cannot completely eliminate customer and counterparty credit risk. Williams’, Transco’s, and NWP’s customers and counterparties include industrial customers, local distribution companies, natural gas producers, and marketers whose creditworthiness may be suddenly and disparately impacted by, among other factors, commodity price volatility, deteriorating energy market conditions, and public and regulatory opposition to energy producing activities.

In a low commodity price environment, certain customers have been or could be negatively impacted, causing them significant economic stress resulting, in some cases, in a customer bankruptcy filing or an effort to renegotiate contracts. To the extent one or more of Williams’, Transco’s, or NWP’s key customers commences bankruptcy proceedings, the contracts with such customers may be subject to rejection under applicable provisions of the United States Bankruptcy Code or may be renegotiated. Further, during any such bankruptcy proceeding, prior to assumption, rejection, or renegotiation of such contracts, the bankruptcy court may temporarily authorize the payment of value for services less than contractually required, which could have a material adverse effect on Williams’, Transco’s, and NWP’s businesses, results of operations, cash flows, and financial condition.

If Williams, Transco, and NWP fail to adequately assess the creditworthiness of existing or future customers and counterparties or otherwise do not take sufficient mitigating actions, including obtaining sufficient collateral, deterioration in their creditworthiness and any resulting increase in nonpayment and/or nonperformance by them could cause Williams, Transco, or NWP to write down or write off accounts receivable. Such write-downs or write-offs could negatively affect Williams’, Transco’s, or NWP’s operating results for the period in which they occur, and, if significant, could have a material adverse effect on Williams’, Transco’s, or NWP’s businesses, financial condition, results of operations, and cash flows.

Williams, Transco, and NWP have experienced, and anticipate continuing to face, opposition to the operation and expansion of pipelines and facilities from governmental officials, environmental groups, landowners, tribal groups, local groups, and other advocates. In some instances, Williams, Transco, and NWP encounter opposition that disfavors hydrocarbon-based energy supplies regardless of practical implementation or financial considerations. Opposition to operation and expansion can take many forms, including the delay or denial of required governmental permits, organized protests, attempts to block or sabotage operations, intervention in regulatory or administrative proceedings involving assets, or lawsuits or other actions designed to prevent, disrupt, or delay the operation or expansion of assets and business. In addition, acts of sabotage or eco-terrorism could cause significant damage or injury to people, property, or the environment or lead to extended interruptions of operations.

Any such event that delays or prevents the expansion of Williams’, Transco’s, or NWP’s businesses, that interrupts the revenues generated by operations, or that causes significant expenditures not covered by insurance, could adversely affect Williams’, Transco’s, and NWP’s financial condition and results of operations.

As part of Williams’ growth strategy, Williams considers acquisition opportunities. Suitable acquisition candidates or assets may not be available on terms and conditions Williams finds acceptable or, where multiple parties are trying to acquire an acquisition candidate or assets, Williams may not be chosen as the acquirer. If Williams is able to acquire a targeted business, Williams may not be able to successfully integrate the acquired businesses and realize anticipated benefits in a timely manner.

Additionally, as part of Williams’, Transco’s, and NWP’s growth strategy, Williams, Transco, and NWP engage in significant capital projects and have both a project lifecycle process and an investment evaluation process. These are the processes used to identify, evaluate, and execute on capital projects, and the investment evaluation process is used by Williams’ to identify, evaluate, and execute on acquisitions. Williams, Transco, and NWP may not always have sufficient and accurate information to identify and value potential opportunities and risks or the investment evaluation process may be incomplete or flawed. Growth may also be dependent upon the construction of new natural gas gathering, transportation, compression, processing, or treating pipelines and facilities, NGL transportation, or fractionation or storage facilities as well as the expansion of existing facilities.

Additional risks associated with construction may include the inability to obtain rights-of-way, skilled labor, equipment, materials, permits, and other required inputs in a timely manner such that projects are completed, on time or at all, and the risk that construction cost overruns, including due to inflation or the imposition of tariffs on foreign-made materials and goods (including steel and steel pipes) necessary to conduct business, could cause total project costs to exceed budgeted costs. Additional risks associated with growing the business include, among others, that:

•Changing circumstances and deviations in variables could negatively impact the investment analysis, including projections of revenues, earnings, and cash flow relating to potential investment targets, resulting in outcomes that are materially different than anticipated;

•Williams, Transco, or NWP could be required to contribute additional capital to support acquired businesses or assets, and Williams, Transco, or NWP may assume liabilities that were not disclosed, exceed estimates and for which contractual protections are either unavailable or prove inadequate;

•Acquisitions could disrupt ongoing business, distract management, divert financial and operational resources from existing operations, and make it difficult to maintain current business standards, controls, and procedures;

•Acquisitions and capital projects may require substantial new capital, including the issuance of debt or equity, and Williams, Transco, or NWP may not be able to access credit or capital markets or obtain acceptable terms.

If realized, any of these risks could have an adverse impact on Williams’, Transco’s, and NWP’s financial condition, results of operations, including the possible impairment of assets, or cash flows.

Williams has numerous competitors in all aspects of its businesses, and additional competitors may enter its markets. Any current or future competitor that delivers natural gas, NGLs, or other commodities into the areas that Williams operates could offer transportation services that are more desirable to shippers than those Williams provides because of price, location, facilities, or other factors. In addition, current or potential competitors may make strategic acquisitions or have greater financial resources, which could affect Williams’ ability to make strategic investments or acquisitions. Competitors may be able to respond more quickly to new laws or regulations or emerging technologies or to devote greater resources to the construction, expansion, or refurbishment of their facilities.

Further, natural gas also competes with other forms of energy available to customers, including electricity, coal, fuel oils, and other alternative energy sources. Failure to successfully compete against current and future competitors could have a material adverse effect on Williams’ business, results of operations, financial condition, and cash flows.

Similarly, Transco and NWP compete primarily with other interstate pipelines and storage facilities in the transportation and storage of natural gas. The principal elements of competition among interstate natural gas transportation and storage assets are rates, terms of service, access to natural gas supplies, flexibility, and reliability. Although most of Transco’s and NWP’s current capacity is fully contracted, the FERC has taken certain actions to strengthen market forces in the interstate natural gas pipeline industry that have led to increased competition throughout the industry. Similarly, a highly liquid competitive commodity market in natural gas, and increasingly competitive markets for natural gas services, including competitive secondary markets in pipeline capacity, have developed.

As a result, pipeline capacity is being used more efficiently, and peaking and storage services are increasingly effective substitutes for annual pipeline capacity. As a result, Transco and NWP could experience some “turnback” of firm capacity as the primary terms of existing agreements expire. If Transco and NWP are unable to remarket this capacity or can remarket it only at substantially discounted rates compared to previous contracts, they or their remaining customers, may have to bear the costs associated with the turned back capacity. Moreover, Williams and its other affiliates may not be limited in their ability to compete with Transco and NWP.

Additionally, some of Transco’s and NWP’s competitors may have greater financial resources and access to greater supplies of natural gas than they do. Some of these competitors may expand or construct transportation and storage systems that would create additional competition for natural gas supplies or the services provided to customers. In a number of key markets, interstate pipelines are now facing competitive pressure from other major pipeline systems, enabling local distribution companies and end users to choose a transmission provider based on considerations other than location. Other entities could construct new pipelines or expand existing pipelines that could potentially serve the same markets as Transco’s and NWP’s pipeline systems.

Any such new pipelines could offer transportation services that are more desirable to shippers because of locations, facilities, or other factors. These new pipelines could charge rates or provide service to locations that would result in greater net profit for shippers and producers, and thereby force Transco and NWP to lower the rates charged for service on their pipelines to extend existing transportation service agreements or to attract new customers. Transco and NWP are aware of proposals by competitors to expand pipeline capacity in certain markets Transco and NWP also serve, which, if the proposed projects proceed, could increase the competitive pressure upon Transco and NWP. Transco and NWP may not be able to successfully compete against current and future competitors and any failure to do so could have a material adverse effect on Transco’s and NWP’s businesses, financial condition, results of operations, and cash flows.

The operations of Williams’ current non-wholly owned subsidiaries are conducted in accordance with their organizational documents. Williams anticipates that it will enter into more such arrangements, including through new joint venture structures. Williams may have limited operational flexibility in such current and future arrangements and may not be able to control the timing or amount of cash distributions received. In certain cases:

•Williams cannot control the amount of cash reserves determined to be necessary to operate the business, which reduces cash available for distributions;

•Williams cannot control the amount of capital expenditures that it is required to fund, and Williams is dependent on third parties to fund their required share of capital expenditures;

•Williams may be subject to restrictions or limitations on its ability to sell or transfer its interests in the jointly owned assets;

•Williams may be forced to offer rights of participation to other joint venture participants in the area of mutual interest;

•Williams has limited ability to influence or control certain day to day activities affecting the operations; and •Williams may have additional obligations, such as required capital contributions that are important to the success of the operations.

In addition, conflicts of interest may arise between Williams, on the one hand, and other interest owners, on the other hand. If such conflicts of interest arise, Williams may not have the ability to control the outcome with respect to the matter in question. Disputes between Williams and other interest owners may also result in delays, litigation, or operational impasses.

The risks described above or the failure to continue such arrangements could adversely affect Williams’ ability to conduct the operations that are the subject of such arrangements which could, in turn, negatively affect Williams’ business, growth strategy, financial condition, and results of operations.

Williams, Transco, and NWP rely on a limited number of customers and producers for a significant portion of revenues and supply of natural gas and NGLs, as applicable. Although many of Williams’, Transco’s, and NWP’s customers and suppliers are subject to long-term contracts, if Williams, Transco, and NWP are unable to replace or extend such contracts, add additional customers, or otherwise increase the contracted volumes of natural gas provided to it by current producers, in each case on favorable terms, if at all, Williams’, Transco’s, and NWP’s businesses, financial condition, results of operations, and cash flows, as well as Williams’ growth plans and the amount of cash available to pay dividends could be materially adversely affected.

Williams’, Transco’s, and NWP’s ability to replace, extend, or add additional customer or supplier contracts, or increase contracted volumes of natural gas from current producers, on favorable terms, or at all, is subject to a number of factors, some of which are beyond their control, including:

•The level of existing and new competition in Williams’, Transco’s, and NWP’s businesses or from alternative sources, such as electricity, renewable resources, coal, fuel oils, or nuclear energy;

•General economic, financial markets, and industry conditions;

•The effects of regulation on Williams, Transco, and NWP, their customers, and their contracting practices;

•Williams’, Transco’s, and NWP’s ability to understand their customers’ expectations, efficiently and reliably deliver high quality services, and effectively manage customer relationships. The results of these efforts will impact Williams’, Transco’s, and NWP’s reputation and positioning in the market.

In addition, Williams’ markets are affected by natural gas and NGL prices, demand, availability, and margins. Higher prices for energy commodities related to Williams’ businesses could result in a decline in the demand for those commodities and, therefore, in customer contracts or throughput on the pipeline systems. Lower energy commodity prices could negatively impact the ability to maintain or achieve favorable contractual terms, including pricing, and could also result in a decline in the production of energy commodities resulting in reduced customer contracts, supply contracts, and throughput on the pipeline systems.

Williams’, Transco’s, and NWP’s natural gas pipelines provide some services pursuant to long-term, fixed-price contracts. It is possible that costs to perform services under such contracts will exceed the revenues collected. Although other services are priced at cost-based rates that are subject to adjustment in rate cases, under FERC policy, a regulated service provider and a customer may mutually agree to sign a contract for service at a “negotiated rate” that may be above or below the FERC regulated cost-based rate for that service. These “negotiated rate” contracts are not generally subject to adjustment for increased costs that could be produced by inflation or other factors relating to the specific facilities being used to perform the services.

Further, the costs of testing, maintaining, or repairing regulated facilities for Williams, Transco, and NWP may exceed Williams’, Transco’s and NWP’s expectations, and the FERC may not allow, or competition in the markets may prevent, recovery of such costs in the rates charged for applicable services at Williams’, Transco’s, and NWP’s regulated pipelines and facilities. Williams, Transco and NWP have experienced and could experience in the future unexpected leaks or ruptures on their regulated natural gas pipeline systems or storage facilities. Either as a preventative measure or in response to a leak or another issue, Williams, Transco and NWP could be required by regulatory authorities to test or undertake modifications to their regulated systems.

If the cost of testing, maintaining, or repairing regulated facilities exceeds expectations, and the FERC does not allow recovery, or competition in the markets prevents recovering such costs in the rates charged for Williams’, Transco’s and NWP’s regulated services, such costs could have a material adverse impact on Williams’, Transco’s and NWP’s businesses, financial condition, results of operation, and cash flows.

Some of Williams’, Transco’s, and NWP’s businesses may be dependent on a small number of suppliers for the delivery of critical goods or services. If a supplier on which one of the businesses depends were to fail to timely supply required goods and services, such business may not be able to replace such goods and services in a timely manner or otherwise on favorable terms or at all. If Williams’, Transco’s, and NWP’s businesses are unable to adequately diversify or otherwise mitigate such supplier concentration risks, and such risks were realized, such businesses could be subject to reduced revenues and increased expenses, which could have a material adverse effect on Williams’, Transco’s, and NWP’s financial condition, results of operations, and cash flows.

Transco and NWP rely on a limited number of customers for a significant portion of their revenues. Although some of these customers are subject to long-term contracts, Transco and NWP may be unable to negotiate extensions or replacements of these contracts on favorable terms, or at all. For the year ended December 31, 2024, Transco’s largest customer was Dominion Energy, Inc., which accounted for approximately 7 percent of its operating revenue, and NWP’s largest customer was Puget Sound Energy, Inc., which accounted for approximately 31 percent of its operating revenue. The loss of all, or even a portion of, the revenues from contracted volumes supplied by Transco’s and NWP’s key customers, as a result of competition, creditworthiness, inability to negotiate extensions or replacements of contracts, or otherwise, could have a material adverse effect on their businesses, financial condition, results of operations, and cash flows. For more information regarding Transco’s and NWP’s customer revenues, please read Note 16 – Fair Value Measurements, Guarantees, and Concentration of Credit Risk.

Transco and NWP rely on Williams and other third parties for certain services necessary for Transco and NWP to be able to conduct business. Certain of Williams’ accounting and information technology services, which are relied upon by Transco and NWP, are currently provided by third-party vendors, and sometimes from service centers outside of the United States. Services provided pursuant to these arrangements could be disrupted. Similarly, the expiration of agreements associated with such arrangements or the transition of services between providers could lead to loss of institutional knowledge or service disruptions. Williams’ reliance on others as service providers, and Transco’s and NWP’s reliance on Williams’ reliance on others as service providers, could have a material adverse effect on Williams’, Transco’s, and NWP’s businesses, financial condition, results of operations, and cash flows.

GAAP requires Williams to test certain assets for impairment on either an annual basis or when events or circumstances occur which indicate that the carrying value of such assets might be impaired. The outcome of such testing could result in impairments of Williams’ assets including property, plant, and equipment, intangible assets, and/ or equity-method investments. Additionally, any asset monetizations could result in impairments if any assets are sold or otherwise exchanged for amounts less than their carrying value. If Williams determines that an impairment has occurred, Williams would be required to take an immediate noncash charge to earnings.

Companies across all industries are facing increasing scrutiny from stakeholders related to their environmental, social and governance (“ESG”) practices. Investor advocacy groups, institutional investors, investment funds and other influential investors are also increasingly focused on ESG practices and in recent years have placed increasing importance on the implications and social cost of their investments. Regardless of the industry, investors’ increased focus and activism related to ESG (as proponents or opponents) and similar matters may hinder access to capital, as investors may decide to reallocate capital or to not commit capital as a result of their assessment of a company’s ESG practices. Companies that do not adapt to or comply with investor or other stakeholder expectations and standards, which are evolving, or that are perceived to have not responded appropriately to the concern for ESG issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage, and the business, financial condition, and/or stock price of such a company could be materially and adversely affected.

Williams, Transco, and NWP face pressures from their stakeholders, who are increasingly focused on climate change, to prioritize sustainable energy practices, reduce carbon footprint, and promote sustainability. Williams’ stockholders may require Williams to implement ESG procedures or standards to continue engaging with Williams, to remain invested in Williams, or before they may make further investments in Williams. Additionally, Williams, Transco, and NWP may face reputational challenges in the event their ESG procedures or standards do not meet the standards set by certain constituencies. Williams, Transco, and NWP adopted certain practices as highlighted in Williams’ 2023 Sustainability Report, including with respect to air emissions, biodiversity and land use, climate change, and environmental stewardship.

It is possible, however, that Williams’, Transco’s, and NWP’s stakeholders might not be satisfied with these sustainability efforts or the speed of their adoption. If Williams, Transco and NWP do not meet stakeholders’ expectations, Williams’, Transco’s, and NWP’s businesses, ability to access capital, and/or Williams’ stock price could be harmed.

Additionally, adverse effects upon the oil and gas industry related to the worldwide social and political environments, including uncertainty or instability resulting from climate change, changes in political leadership and environmental policies, changes in geopolitical-social views toward fossil fuels and renewable energy, concern about the environmental impact of climate change, and investors’ expectations regarding ESG matters, may also adversely affect demand for Williams’, Transco’s, and NWP’s services. Any long-term material adverse effect on the oil and gas industry could have a significant financial and operational adverse impact on Williams’, Transco’s, and NWP’s businesses.

The occurrence of any of the foregoing could have a material adverse effect on the price of Williams’ stock and Williams’, Transco’s, and NWP’s businesses and financial condition.

The threat of global climate change may create physical and financial risks to Williams’, Transco’s, and NWP’s businesses. Energy needs vary with weather conditions. To the extent weather conditions may be affected by climate change, energy use could increase or decrease depending on the duration and magnitude of any changes. Increased energy use due to weather changes may require Williams, Transco, and NWP to invest in more pipelines and other infrastructure to serve increased demand. A decrease in energy use due to weather changes may affect Williams’, Transco’s, and NWP’s financial condition through decreased revenues. Extreme weather conditions in general require more system backup, adding to costs, and can contribute to increased system stresses, including service interruptions.

Weather conditions outside of Williams’, Transco’s, and NWP’s operating territory could also have an impact on their revenues. To the extent the frequency of extreme weather events increases, this could increase the cost of providing service. Williams, Transco, and NWP may not be able to pass on the higher costs to customers or recover all costs related to mitigating these physical risks.

Additionally, many climate models indicate that global warming is likely to result in rising sea levels and increased frequency and severity of weather events, which may lead to higher insurance costs, or a decrease in available coverage, for Williams’, Transco’s, and NWP’s assets in areas subject to severe weather. These climate-related changes could damage physical assets, especially operations located in low-lying areas near coasts and river banks, and facilities situated in hurricane-prone and rain-susceptible regions.

To the extent financial markets view climate change and greenhouse gas (“GHG”) emissions as a financial risk, this could negatively impact Williams’, Transco’s, and NWP’s cost of and access to capital. Climate change and GHG regulation could also reduce demand for Williams’, Transco’s, and NWP’s services. The business could also be affected by the potential for lawsuits against GHG emitters, based on links drawn between GHG emissions and climate change.

There are operational risks and hazards associated with the gathering, transporting, storage, processing, and treating of natural gas, the fractionation, transportation, and storage of NGLs, and crude oil transportation and production handling, including:

•Aging infrastructure and mechanical problems;

•Damages to pipelines and pipeline blockages or other pipeline interruptions;

•Uncontrolled releases of natural gas (including sour gas), NGLs, crude oil, or other products;

•Collapse or failure of storage facilities or caverns, as applicable;

•Operator error;

•Damage caused by third-party activity, such as operation of construction equipment;

•Pollution and other environmental risks;

•Fires, explosions, craterings, and blowouts;

•Security risks, including cybersecurity;

•Operating in a marine environment, as applicable.

Any of these risks could result in loss of human life, personal injuries, significant damage to property, environmental pollution, impairment of operations, loss of services to customers, reputational damage, and substantial losses to Williams, Transco, and NWP. The location of certain segments of Williams’, Transco’s, and NWP’s facilities in or near populated areas, including residential areas, commercial business centers, and industrial sites, could increase the level of damage resulting from these risks. An event such as those described above could have a material adverse effect on Williams’, Transco’s, and NWP’s financial condition and results of operations, particularly if the event is not fully covered by insurance.

Williams’, Transco’s, and NWP’s assets and operations, especially those located offshore, and their customers’ assets and operations can be adversely affected by hurricanes, floods, earthquakes, landslides, tornadoes, fires, and other natural phenomena and weather conditions, including extreme or unseasonable temperatures, making it more difficult for Williams, Transco, and NWP to realize the historic rates of return associated with their assets and operations. A significant disruption in Williams’, Transco’s, and NWP’s or their customers’ operations or the occurrence of a significant liability for which Williams, Transco, and NWP are not fully insured could have a material adverse effect on their businesses, financial condition, results of operations, and cash flows.

Given the volatile nature of the commodities Williams, Transco, and NWP transport, process, store, and sell, their assets and the assets of their customers and others in the industry may be targets of terrorist activities. Uncertainty surrounding the Russian invasion of Ukraine, conflicts in the Middle East, or other sustained military campaigns, may affect Williams’, Transco’s, and NWP’s operations in unpredictable ways, including the possibility that infrastructure facilities could be direct targets of, or indirect casualties of, an act of terrorism. A terrorist attack could create significant price volatility, disrupt business, limit access to capital markets, or cause significant harm to operations, such as full or partial disruption to Williams’, Transco’s, and NWP’s ability to produce, process, transport, or distribute natural gas, NGLs, or other commodities, as applicable.

Acts of terrorism, as well as events occurring in response to or in connection with acts of terrorism, could cause environmental repercussions that could result in a significant decrease in revenues or significant reconstruction or remediation costs, which could have a material adverse effect on Williams’, Transco’s, and NWP’s businesses, financial condition, results of operations, and cash flows.

Williams relies on its information technology infrastructure to process, transmit, and store electronic information, including information used to safely operate Williams’, Transco’s, and NWP’s assets. Transco and NWP rely on Williams for their information technology infrastructure. The Williams Board of Directors has oversight responsibility with regard to cybersecurity risks, and reviews management’s efforts to address and mitigate cybersecurity risks, including the establishment and implementation of policies to address cybersecurity threats. Williams has invested, and expects to continue to invest, significant time, manpower, and capital in its information technology infrastructure. However, the age, operating systems, or condition of the current information technology infrastructure and software assets and the ability to maintain and upgrade such assets could affect Williams’, and thus Transco’s and NWP’s, ability to resist cybersecurity threats.

While Williams believes that it maintains appropriate information security policies, practices, and protocols, Williams regularly faces cybersecurity and other security threats to its information technology infrastructure, including risks that may be enhanced through the use of artificial intelligence, which could include threats to operational industrial control systems and safety systems that operate its pipelines, plants, and assets. Williams faces unlawful attempts to gain access to its information technology infrastructure, including coordinated attacks from hackers, whether state-sponsored groups, “hacktivists”, or private individuals. Williams faces the threat of theft and misuse of sensitive data and information, including customer and employee information. Williams also faces attempts to gain access to information related to its assets through attempts to obtain unauthorized access by targeting acts of deception against individuals with legitimate access to physical locations or information.

Williams is also subject to cybersecurity risks arising from the fact that Williams’, Transco’s, and NWP’s business operations are interconnected with third parties, including third-party pipelines, other facilities and contractors and vendors. In addition, the breach of certain business systems could affect Williams’ ability to correctly record, process, and report financial information. Breaches in Williams’, Transco’s, and NWP’s information technology infrastructure or physical facilities, or other disruptions including those arising from theft, vandalism, fraud, or unethical conduct, which may increase as a result of the Russian invasion of Ukraine or other geopolitical tensions and conflicts, could result in damage to or destruction of assets, unnecessary waste, safety incidents, damage to the environment, reputational damage, potential liability, the loss of contracts, the imposition of significant costs associated with remediation and litigation, heightened regulatory scrutiny, increased insurance costs, and have a material adverse effect on Williams’, Transco’s, and NWP’s operations, financial condition, results of operations, and cash flows.

Williams, Transco, and NWP depend upon third-party pipelines and other facilities that provide delivery options to and from their pipelines and storage facilities for the benefit of their customers. Because Williams, Transco, and NWP do not own these third-party pipelines or other facilities, their continuing operation is not within Williams’, Transco’s or NWP’s control. If these pipelines or facilities were to become temporarily or permanently unavailable for any reason, or if throughput were reduced because of testing, line repair, damage to pipelines or facilities, reduced operating pressures, lack of capacity, increased credit requirements or rates charged by such pipelines or facilities or other causes, Williams, Transco, and NWP and their customers would have reduced capacity to transport, store, or deliver natural gas or NGL products to end use markets or to receive deliveries of mixed NGLs, as applicable, thereby reducing revenues.

Any temporary or permanent interruption at any key pipeline interconnection or in operations on third-party pipelines or facilities that would cause a material reduction in volumes transported on Williams’, Transco’s, or NWP’s pipelines or gathering systems, as applicable, or processed, fractionated, treated, or stored at Williams’, Transco’s, or NWP’s facilities, as applicable, could have a material adverse effect on Williams’, Transco’s, and NWP’s businesses, financial condition, results of operations, and cash flows.

Revenues from certain components of Williams’ business can have seasonal characteristics. In many parts of the country, demand for natural gas and other fuels peaks during the winter. As a result, Williams’ overall operating results in the future might fluctuate substantially on a seasonal basis. Demand for natural gas and other fuels could vary significantly from Williams’ expectations depending on the nature and location of its facilities and pipeline systems and the terms of the natural gas transportation arrangements relative to demand created by unusual weather patterns.

Williams, Transco, and NWP do not own all of the land on which their pipelines and facilities have been constructed. As such, Williams, Transco, and NWP are subject to the possibility of increased costs to retain necessary land use. In those instances in which Williams, Transco and NWP do not own the land on which their facilities are located, Williams, Transco, and NWP obtain the rights to construct and operate their facilities and gathering systems on land owned by third parties and governmental agencies for a specific period of time. In addition, some of Williams’ and NWP’s facilities cross Native American lands pursuant to rights-of-way of limited terms. Williams and NWP may not have the right of eminent domain over land owned by Native American tribes.

Williams’, Transco’s, and NWP’s loss of any of these rights, through their inability to renew right-of-way contracts or otherwise, could have a material adverse effect on their businesses, financial condition, results of operations, and cash flows.

In recent years, stockholder activism, including threatened or actual proxy contests, has been directed against numerous public companies, including Williams. Williams was the target of a proxy contest from a stockholder activist, which resulted in Williams incurring significant costs. If stockholder activists were to again take or threaten to take actions against Williams or seek to involve themselves in the governance, strategic direction, or operations of Williams, Williams could incur significant costs as well as the distraction of management, which could have an adverse effect on Williams’ business or financial results. In addition, actions of activist stockholders may cause significant fluctuations in Williams’ stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of Williams’ business.

Williams has defined benefit pension plans and other postretirement benefit plans. The timing and amount of the funding requirements under the defined benefit pension plans depend upon a number of factors that Williams’ controls, including changes to pension plan benefits, as well as factors outside of Williams’ control, such as asset returns, interest rates, and changes in pension laws. Changes to these and other factors can significantly increase Williams’ funding requirements and could have a significant adverse effect on Williams’ financial condition and results of operations.

Transco and NWP have no employees; employees of Williams and its affiliates provide services to Transco and NWP. As a result, Transco and NWP are allocated a portion of Williams’ cost for defined benefit pension plans and other postretirement benefit plans. The timing and amount of these allocations depends on factors that Williams controls, and any changes can significantly increase the allocations, which could have a significant adverse effect on Transco’s and NWP’s financial condition and results of operations.

Downgrades of Williams’, Transco’s, and NWP’s credit ratings increase cost of borrowing and could require Williams, Transco, and NWP to provide collateral to their counterparties, negatively impacting available liquidity. In addition, Williams’, Transco’s, and NWP’s ability to access capital markets could be limited by the downgrading of their credit ratings.

Credit rating agencies perform independent analysis when assigning credit ratings. The analysis includes a number of criteria such as business composition, market and operational risks, as well as various financial tests.

Credit rating agencies continue to review the criteria for industry sectors and various debt ratings and may make changes to those criteria from time to time. Credit ratings are subject to revision or withdrawal at any time by the ratings agencies. As of the date of the filing of this report, Williams, Transco, and NWP have been assigned an investment-grade credit rating by the credit ratings agencies.

In addition, substantially all of Williams’ operations are conducted through its subsidiaries. Williams’ cash flows are substantially derived from loans, dividends, and distributions paid to it by its subsidiaries. Due to the relationship of Transco and NWP as subsidiaries of Williams, Transco’s and NWP’s ability to obtain credit will be affected by Williams’ credit ratings. Any downgrading of a Williams credit rating could result in a downgrading of a Transco and NWP credit rating, which could adversely affect Transco’s and NWP’s access to capital and limit their ability to obtain financing in the future upon favorable terms, if at all.

Williams’, Transco’s, and NWP’s businesses may be negatively impacted by adverse economic conditions or future disruptions in the global financial markets. Included among these potential negative impacts are industrial or economic contraction leading to reduced energy demand and lower prices for Williams’, Transco’s, and NWP’s products and services and increased difficulty in collecting amounts owed to them by customers. Geopolitical tensions and conflicts, including those in the Middle East, as well as the ongoing Russian invasion of Ukraine and the actions undertaken by western nations in response to these conflicts, have had, and may continue to have, adverse impacts on global financial markets. If financing is not available when needed, or is available only on unfavorable terms, Williams, Transco, and NWP may be unable to implement their business plans or otherwise take advantage of business opportunities or respond to competitive pressures.

In addition, financial markets have periodically been affected by concerns over U.S. fiscal and monetary policies. These concerns, as well as actions taken by the U.S. federal government in response to these concerns, could significantly and adversely impact the global and U.S. economies and financial markets, which could negatively impact Williams, Transco, and NWP in the manner described above.

Williams, Transco and NWP are party to a credit agreement with aggregate commitments available of $3.75 billion, with up to an additional $500 million increase in aggregate commitments available under certain circumstances. Transco and NWP are each subject to a $500 million borrowing sublimit. The ability of Williams, Transco, and NWP to borrow under that facility could be impaired if one or more of the lenders fails to honor its contractual obligation to lend. For more information regarding financing, please read Note 13 – Debt and Banking Arrangements.

Williams’ total outstanding long-term debt (including current portion and commercial paper) as of December 31, 2024, was $26.9 billion, including the long-term debt of Transco and NWP. The total outstanding long-term debt (including current portion) as of December 31, 2024, for Transco and NWP was $5.2 billion and $582 million, respectively.

The agreements governing Williams’, Transco’s, and NWP’s indebtedness contain covenants that restrict Williams’, Transco’s, and NWP’s, as applicable, and their respective subsidiaries’, ability to incur certain liens to support indebtedness, and ability to merge or consolidate or sell all or substantially all of its respective assets in certain circumstances. In addition, certain of Williams’, Transco’s, and NWP’s debt agreements contain various covenants that restrict or limit, among other things, the ability to make certain distributions during the continuation of an event of default, and to enter into certain affiliate transactions and certain restrictive agreements. Additionally, Transco has a debt covenant in one series of its notes restricting its ability and that of its subsidiaries to guarantee certain indebtedness.

Certain of Williams’, Transco’s, and NWP’s debt agreements also contain, and those Williams, Transco, and NWP enter into in the future may contain, financial covenants, and other limitations with which they will need to comply.

Williams’, Transco’s, and NWP’s debt service obligations and the covenants described above could have important consequences. For example, they could:

•Make it more difficult for Williams, Transco, and NWP to satisfy their obligations with respect to their indebtedness, which could in turn result in an event of default on such indebtedness;

•Impair Williams’, Transco’s, and NWP’s ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate purposes or limited liability company purposes, as applicable, or other purposes;

•Diminish Williams’, Transco’s, and NWP’s ability to withstand a continued or future downturn in their business or the economy generally;

•Require Williams, Transco, and NWP to dedicate a substantial portion of their cash flow from operations to debt service payments, thereby reducing the availability of cash for working capital, capital expenditures, acquisitions, the payments of dividends, general corporate purposes or limited liability company purposes, as applicable, or other purposes;

•Limit Williams’, Transco’s, and NWP’s flexibility in planning for, or reacting to, changes in their business and the industry in which they operate, including limiting their ability to expand or pursue business activities and preventing Williams, Transco, and NWP from engaging in certain transactions that might otherwise be considered beneficial to Williams, Transco, and NWP.

Williams’, Transco’s, and NWP’s ability to comply with their debt covenants, to repay, extend, or refinance their existing debt obligations and to obtain future credit will depend primarily on their operating performance. Williams’, Transco’s, and NWP’s ability to refinance existing debt obligations or obtain future credit will also depend upon the current conditions in the credit markets and the availability of credit generally. If Williams, Transco, and NWP are unable to comply with these covenants, meet their debt service obligations, or obtain future credit on favorable terms, or at all, Williams, Transco, and NWP could be forced to restructure or refinance their indebtedness, seek additional equity capital or sell assets. Williams, Transco, and NWP may be unable to obtain financing or sell assets on satisfactory terms, or at all.

Williams’, Transco’s, and NWP’s failure to comply with the covenants in the documents governing their indebtedness could result in events of default, which could render such indebtedness due and payable. Williams, Transco, and NWP may not have sufficient liquidity to repay their indebtedness in such circumstances. In addition, cross-default or cross-acceleration provisions in each of Williams’, Transco’s, and NWP’s debt agreements could cause a default or acceleration to have a wider impact on their liquidity than might otherwise arise from a default or acceleration of a single debt instrument. For more information regarding debt agreements, please read Note 13 – Debt and Banking Arrangements.

Interest rates have fluctuated in recent years but could increase in the future. As a result, interest rates on future credit facilities and debt offerings could be higher than current levels, causing Williams’, Transco’s, and NWP’s financing costs to increase accordingly. As with other yield-oriented securities, Williams’ share price will be impacted by the level of Williams’ dividends and implied dividend yield. The dividend yield is often used by investors to compare and rank yield-oriented securities for investment decision-making purposes. Therefore, changes in interest rates, either positive or negative, may affect the yield requirements of investors who invest in Williams’ shares, and a rising interest rate environment could have an adverse impact on Williams’ share price and Williams’ ability to issue equity or pay cash dividends at intended levels or Williams’, Transco’s, and NWP’s ability to incur debt.

In an effort to manage Williams’ financial exposure related to commodity price and market fluctuations, Williams has entered, and may in the future enter into contracts to hedge certain risks associated with its assets and operations. In these hedging activities, Williams has used, and may in the future use, fixed-price, forward, physical purchase, and sales contracts, futures, financial swaps, and option contracts traded in the over-the-counter markets or on exchanges. Nevertheless, no single hedging arrangement can adequately address all risks present in a given contract. For example, a forward contract that would be effective in hedging commodity price volatility risks would not hedge the contract’s counterparty credit or performance risk.

Therefore, unhedged risks will always continue to exist. While Williams attempts to manage counterparty credit risk within guidelines established by its credit policy, Williams may not be able to successfully manage all credit risk and as such, future cash flows and results of operations could be impacted by counterparty default. The difference in accounting treatment for the underlying position and the financial instrument used to hedge the value of the contract can cause volatility in Williams’ reported net income while the positions are open due to mark-to-market accounting.

Public concern regarding the potential effects of climate change has directed increased attention towards the funding sources of fossil-fuel energy companies. As a result, certain financial institutions, funds, and other sources of capital have restricted or eliminated their investment in certain market segments of fossil-fuel related energy. Ultimately, limiting fossil-fuel related companies’ access to capital could make it more difficult for Williams’, Transco’s, and NWP’s customers to secure funding for exploration and production activities or for Williams, Transco, and NWP to secure funding for growth projects. Such a lack of capital could also both indirectly affect demand for Williams’, Transco’s, and NWP’s services and directly affect their ability to fund construction or other capital projects.

Because Transco and NWP are indirect wholly owned subsidiaries of Williams, Williams exercises substantial control over their businesses and operations and makes determinations with respect to, among other things, the following:

•Payment of distributions and repayment of advances;

•Decisions on financings and capital raising activities;

•Mergers or other business combinations;

•Acquisition or disposition of assets.

Williams could decide to increase distributions or advances to Transco’s and NWP’s member consistent with existing debt covenants. This could adversely affect Transco’s or NWP’s liquidity.

Public and regulatory scrutiny of the energy industry has resulted in the proposal and/or implementation of increased regulations. Such scrutiny has also resulted in various inquiries, investigations, and court proceedings, including litigation of energy industry matters. Both the shippers on Williams’, Transco’s, and NWP’s pipelines and regulators have rights to challenge the rates charged under certain circumstances. Any successful challenge could materially affect Williams’, Transco’s, and NWP’s results of operations.

Certain inquiries, investigations, and court proceedings are ongoing. Adverse effects may continue as a result of the uncertainty of ongoing inquiries, investigations, and court proceedings, or additional inquiries and proceedings by federal or state regulatory agencies or private plaintiffs. In addition, Williams, Transco, and NWP cannot predict the outcome of any of these inquiries or whether these inquiries will lead to additional legal proceedings against them, civil or criminal fines and/or penalties, or other regulatory action, including legislation, which might be materially adverse to the operation of Williams’, Transco’s, and NWP’s businesses and results of operations or increase their operating costs in other ways. Current legal proceedings or other matters, including environmental matters, suits, regulatory appeals, and similar matters might result in adverse decisions against Williams, Transco, and NWP which, among other outcomes, could result in the imposition of substantial penalties and fines and could damage their reputation. The result of such adverse decisions, either individually or in the aggregate, could be material and may not be covered fully or at all by insurance.

In addition, existing regulations, including those pertaining to financial assurances to be provided by Williams’, Transco’s, and NWP’s businesses in respect of potential asset decommissioning and abandonment activities, might be revised, reinterpreted, or otherwise enforced in a manner that differs from prior regulatory action. New laws and regulations, including those pertaining to oil and gas hedging and cash collateral requirements, might also be adopted or become applicable to Williams, Transco, and NWP, their customers, or their business activities. If new laws or regulations are imposed relating to oil and gas extraction, or if additional or revised levels of reporting, regulation, or permitting moratoria are required or imposed, including those related to hydraulic fracturing, the volumes of natural gas and other products that Williams, Transco, and NWP transport, gather, process, and treat could decline, compliance costs could increase, and results of operations could be adversely affected.

In addition to regulation by other federal, state, and local regulatory authorities, interstate pipeline transportation and storage services and related assets are subject to regulation by the FERC. Federal regulation extends to such matters as:

•Transportation and sale for resale of natural gas in interstate commerce;

•Rates, operating terms, types of services, and conditions of service;

•Certification and construction of new interstate pipelines and storage facilities;

•Acquisition, extension, disposition, or abandonment of existing interstate pipelines and storage facilities;

•Accounts and records;

•Depreciation and amortization policies;

•Relationships with affiliated companies that are involved in marketing functions of the natural gas business;

•Market manipulation in connection with interstate sales, purchases, or transportation of natural gas.

Regulatory or administrative actions in these areas, including successful complaints or protests against the rates of the gas pipelines, can affect Williams’, Transco’s, and NWP’s businesses in many ways, including decreasing tariff rates and revenues or setting future tariff rates to levels such that revenues are inadequate to recover increases in operating costs or to sustain an adequate return on capital investments, decreasing volumes in the pipelines, increasing costs, and otherwise altering the profitability of the pipeline business.

Furthermore, Transco charges its transportation customers a separate fee to access its offshore facilities in the Gulf of America, unlike other interstate pipelines that own facilities offshore. The separate charge is referred to as an “IT feeder” charge. The “IT feeder” rate is charged only when gas is actually transported on the applicable facilities and typically it is paid by producers or marketers. Because the “IT feeder” rate is typically paid by producers and marketers, it generally results in netback prices to producers that are slightly lower than the netbacks realized by producers transporting on other interstate pipelines. This rate design disparity can result in producers bypassing Transco’s offshore facilities in favor of alternative transportation facilities.

Williams’, Transco’s, and NWP’s operations are subject to extensive federal, state, tribal, and local laws and regulations governing environmental protection, endangered and threatened species, the discharge of materials into the environment, and the security of chemical and industrial facilities. Substantial costs, liabilities, delays, and other significant issues related to environmental laws and regulations are inherent in the gathering, transportation, storage, processing, and treating of natural gas, fractionation, transportation, and storage of NGLs, and crude oil transportation and production handling as well as waste disposal practices and construction activities, as applicable. New or amended environmental laws and regulations can also result in significant increases in capital costs incurred to comply with such laws and regulations.

Failure to comply with these laws, regulations, and permits may result in the assessment of administrative, civil and/or criminal penalties, the imposition of remedial obligations, the imposition of stricter conditions on or revocation of permits, the issuance of injunctions limiting or preventing some or all operations, and delays or denials in granting permits.

Joint and several strict liability may be incurred without regard to fault under certain environmental laws and regulations, for the remediation of contaminated areas and in connection with spills or releases of materials associated with natural gas, oil, and wastes on, under, or from Williams’, Transco’s, and NWP’s properties and facilities. Private parties, including the owners of properties through which Williams’, Transco’s, and NWP’s pipeline and gathering systems pass and facilities where their wastes are taken for reclamation or disposal, may have the right to pursue legal actions to enforce compliance as well as to seek damages for noncompliance with environmental laws and regulations or for personal injury or property damage arising from their operations.

Some sites at which Williams, Transco, and NWP operate are located near current or former third-party hydrocarbon storage and processing or oil and natural gas operations or facilities, and there is a risk that contamination has migrated from those sites.

Williams, Transco, and NWP are generally responsible for all liabilities associated with the environmental condition of their facilities and assets, whether acquired or developed, regardless of when the liabilities arose and whether they are known or unknown. In connection with certain acquisitions and divestitures, Williams, Transco, and NWP could acquire, or be required to provide indemnification against, environmental liabilities that could expose them to material losses, which may not be covered by insurance. In addition, the steps Williams, Transco and NWP could be required to take to bring certain facilities into compliance could be prohibitively expensive, and Williams, Transco, and NWP might be required to shut down, divest, or alter the operation of those facilities, which might cause them to incur losses.

In addition, climate change regulations and the costs that may be associated with such regulations and with the regulation of emissions of GHGs have the potential to affect the businesses of Williams, Transco, and NWP. Regulatory actions by the Environmental Protection Agency or the passage of new climate change laws or regulations could result in increased costs to operate and maintain facilities, install new emission controls on facilities, or administer and manage any GHG emissions program. Williams, Transco, and NWP believe it is possible that future governmental legislation and/or regulation may require them either to limit GHG emissions associated with operations or to purchase allowances for such emissions. Williams, Transco, and NWP could also be subjected to a carbon tax assessed on the basis of carbon dioxide emissions or otherwise.

However, Williams, Transco, and NWP cannot predict precisely what form these future regulations might take, the stringency of any such regulations or when they might become effective. Several legislative bills have been introduced in the United States Congress that would require carbon dioxide emission reductions. Previously considered proposals have included, among other things, limitations on the amount of GHGs that can be emitted (so called “caps”) together with systems of permitted emissions allowances. These proposals could require Williams, Transco, and NWP to reduce emissions or to purchase allowances for such emissions.

In addition to activities on the federal level, state and regional initiatives could also lead to the regulation of GHG emissions sooner than and/or independent of federal regulation. These regulations could be more stringent than any federal legislation that may be adopted. Future legislation and/or regulation designed to reduce GHG emissions could make some of Williams’, Transco’s, and NWP’s activities uneconomic to maintain or operate. Williams, Transco, and NWP continue to monitor legislative and regulatory developments in this area and otherwise take efforts to limit and reduce GHG emissions from their facilities. Although the regulation of GHG emissions may have a material impact on Williams’, Transco’s, and NWP’s operations and rates, Williams, Transco, and NWP believe it is premature to attempt to quantify the potential costs of the impacts.

If Williams, Transco, and NWP are unable to recover or pass through a significant level of costs related to complying with climate change regulatory requirements, it could have a material adverse effect on Williams’, Transco’s, and NWP’s results of operations and financial condition.

In accordance with customary industry practice, Williams, Transco, and NWP maintain insurance against some, but not all, risks and losses, and only at levels they believe to be appropriate. The occurrence of any risks not fully covered by Williams’, Transco’s, and NWP’s insurance could have a material adverse effect on their businesses, financial condition, results of operations, and cash flows and their ability to repay debt.

Events such as an aging workforce without appropriate replacements, mismatch of skill sets to future needs, the challenges of attracting new, qualified workers to the midstream energy industry, or unavailability of contract labor may lead to operating challenges such as lack of resources, loss of knowledge, and a lengthy time period associated with skill development, including with the workforce needs associated with projects and ongoing operations. Transco and NWP have no employees; employees of Williams and its affiliates provide services. Williams’ failure to hire and adequately obtain replacement employees, including the ability to transfer significant internal historical knowledge and expertise to the new employees, or the future availability and cost of contract labor may adversely affect Williams’, Transco’s, and NWP’s ability to manage and operate the businesses. If Williams is unable to successfully attract and retain an appropriately qualified workforce, including members of senior management, results of operations could be negatively impacted.

Williams may not have sufficient cash each quarter to pay dividends or maintain current or expected levels of dividends. The actual amount of cash Williams pays as a dividend may fluctuate from quarter to quarter and will depend on various factors, some of which are beyond Williams’ control, including:

•The amount of cash that Williams’ subsidiaries distribute to it;

•The amount of cash Williams generates from its operations, Williams’ working capital needs, Williams’ level of capital expenditures, and Williams’ ability to borrow;

•The restrictions contained in Williams’ indentures and credit facility and Williams’ debt service requirements;

•The cost of acquisitions, if any.

A failure either to pay dividends or to pay dividends at expected levels could result in a loss of investor confidence, reputational damage, and a decrease in the value of Williams’ stock price.