The Williams Companies, Inc. (WMB) 10-Q 29 Oct 09 2009 Q3 Quarterly report Financial data

Consolidated Statement of Incom

Consolidated Statement of Income (USD $)
In Millions, except Share data in Thousands, unless otherwise specified	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Revenues:
Total revenues	$2,098	$3,201	$5,929	$10,022
Segment costs and expenses:
Costs and operating expenses	1,537	2,344	4,373	7,374
Selling, general and administrative expenses	126	133	380	375
Other (income) expense - net	1	1	33	(145)
Total segment costs and expenses	1,664	2,478	4,786	7,604
General corporate expenses	40	34	118	118
Total operating income	394	689	1,025	2,300
Interest accrued	(168)	(162)	(497)	(483)
Interest capitalized	15	16	57	40
Investing income	39	65	2	174
Other income (expense) - net	(1)	2	(2)	6
Income from continuing operations before income taxes	279	610	585	2,037
Provision for income taxes	87	199	223	707
Income from continuing operations	192	411	362	1,330
Income (loss) from discontinued operations	2	10	(223)	130
Net income	194	421	139	1,460
Less: Net income attributable to noncontrolling interests	51	55	26	157
Net income attributable to The Williams Companies, Inc.	143	366	113	1,303
Amounts attributable to The Williams Companies, Inc.:
Income from continuing operations	141	360	266	1,183
Income (loss) from discontinued operations	2	6	(153)	120
Net income attributable to The Williams Companies, Inc.	143	366	113	1,303
Basic earnings per common share:
Income from continuing operations	0.24	0.62	0.45	2.03
Income (loss) from discontinued operations	$0	0.01	-0.26	0.21
Net income	0.24	0.63	0.19	2.24
Weighted-average shares (thousands)	583,103	577,448	581,121	582,105
Diluted earnings per common share:
Income from continuing operations	0.24	0.61	0.45	1.99
Income (loss) from discontinued operations	$0	0.01	-0.26	0.2
Net income	0.24	0.62	0.19	2.19
Weighted-average shares (thousands)	590,059	589,138	588,693	594,630
Cash dividends declared per common share	0.11	0.11	0.33	0.32
Exploration & Production
Revenues:
Total revenues	522	861	1,605	2,537
Segment costs and expenses:
Total operating income	102	356	291	1,273
Gas Pipeline
Revenues:
Total revenues	379	407	1,201	1,226
Segment costs and expenses:
Total operating income	138	152	449	486
Midstream Gas & Liquids
Revenues:
Total revenues	991	1,392	2,489	4,619
Segment costs and expenses:
Total operating income	201	201	414	670
Gas Marketing Services
Revenues:
Total revenues	697	1,716	2,162	5,376
Segment costs and expenses:
Total operating income	(6)	16	(14)	(9)
Other (Other_Member)
Revenues:
Total revenues	6	6	20	18
Segment costs and expenses:
Total operating income	(1)	(2)	3	(2)
Business Intersegment, Eliminations [Member]
Revenues:
Intercompany eliminations	(497)	(1,181)	(1,548)	(3,754)
General Corporate Expenses [Member]
Segment costs and expenses:
General corporate expenses	($40)	($34)	($118)	($118)

Consolidated Balance Sheet

Consolidated Balance Sheet (USD $)
In Millions	Sep. 30, 2009	Dec. 31, 2008
ASSETS
Cash and cash equivalents	$1,640	$1,438
Accounts and notes receivable (net of allowance of $32 at September 30, 2009 and $29 at December 31, 2008)	705	884
Inventories	232	260
Derivative assets	700	1,464
Assets of discontinued operations	1	142
Other current assets and deferred charges	212	223
Total current assets	3,490	4,411
Investments	894	971
Property, plant and equipment, at cost	27,095	25,360
Accumulated depreciation, depletion and amortization	8,631	7,619
Property, plant and equipment - net	18,464	17,741
Derivative assets	585	986
Goodwill	1,011	1,011
Assets of discontinued operations	0	387
Other assets and deferred charges	508	499
Total assets	24,952	26,006
LIABILITIES AND EQUITY
Accounts payable	799	1,052
Accrued liabilities	833	1,139
Derivative liabilities	566	1,093
Liabilities of discontinued operations	0	217
Long-term debt due within one year	19	18
Total current liabilities	2,217	3,519
Long-term debt	8,258	7,683
Deferred income taxes	3,466	3,315
Derivative liabilities	606	875
Liabilities of discontinued operations	0	82
Other liabilities and deferred income	1,550	1,478
Stockholders' equity:
Common stock (960 million shares authorized at $1 par value; 618 million shares issued at September 30, 2009 and 613 million shares issued at December 31, 2008)	618	613
Capital in excess of par value	8,129	8,074
Retained earnings	795	874
Accumulated other comprehensive loss	(194)	(80)
Treasury stock, at cost (35 million shares of common stock)	1,041	1,041
Total stockholders' equity	8,307	8,440
Noncontrolling interests in consolidated subsidiaries	548	614
Total equity	8,855	9,054
Total liabilities and equity	$24,952	$26,006

Consolidated Balance Sheet (Par

Consolidated Balance Sheet (Parenthetical) (USD $)
In Millions, unless otherwise specified	Sep. 30, 2009	Dec. 31, 2008
Consolidated Balance Sheet (Parenthetical) [Abstract]
Allowance for Doubtful Accounts Receivable, Current	$32	$29
Common Stock, Shares Authorized	960	960
Common Stock, Par or Stated Value Per Share	1	1
Common Stock, Shares, Issued	618	613
Treasury Stock, Shares	35	35

Consolidated Statement of Chang

Consolidated Statement of Changes in Equity (USD $)
In Millions	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Beginning balance	$8,853	$8,259	$9,054	$7,805
Comprehensive income (loss):
Net income	194	421	139	1,460
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on cash flow hedges, net of reclassification adjustments	(167)	711	(202)	248
Foreign currency translation adjustments	50	(10)	69	(27)
Pension and other postretirement benefits - net	7	3	19	7
Total other comprehensive income (loss)	(110)	704	(114)	228
Total comprehensive income (loss)	84	1,125	25	1,688
Cash dividends - common stock	(64)	(63)	(192)	(186)
Dividends and distributions to noncontrolling interests	(32)	(36)	(97)	(90)
Sale of limited partner units of consolidated partnerships			0	362
Conversion of Williams Partners L.P. subordinated units to common units			0	0
Purchase of treasury stock	0	(109)	0	(474)
Stock-based compensation, net of tax	14	11	32	75
Issuance of common stock from 5.5% debentures conversion	0	25	28	25
Other	0	1	5	8
Ending balance	8,855	9,213	8,855	9,213
The Williams Companies, Inc.
Beginning balance	8,324	7,652	8,440	6,375
Comprehensive income (loss):
Net income	143	366	113	1,303
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on cash flow hedges, net of reclassification adjustments	(167)	699	(202)	243
Foreign currency translation adjustments	50	(10)	69	(27)
Pension and other postretirement benefits - net	7	3	19	7
Total other comprehensive income (loss)	(110)	692	(114)	223
Total comprehensive income (loss)	33	1,058	(1)	1,526
Cash dividends - common stock	(64)	(63)	(192)	(186)
Dividends and distributions to noncontrolling interests	0	0	0	0
Sale of limited partner units of consolidated partnerships			0	0
Conversion of Williams Partners L.P. subordinated units to common units			0	1,225
Purchase of treasury stock	0	(109)	0	(474)
Stock-based compensation, net of tax	14	11	32	75
Issuance of common stock from 5.5% debentures conversion	0	25	28	25
Other	0	0	0	8
Ending balance	8,307	8,574	8,307	8,574
Noncontrolling Interests
Beginning balance	529	607	614	1,430
Comprehensive income (loss):
Net income	51	55	26	157
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on cash flow hedges, net of reclassification adjustments	0	12	0	5
Foreign currency translation adjustments	0	0	0	0
Pension and other postretirement benefits - net	0	0	0	0
Total other comprehensive income (loss)	0	12	0	5
Total comprehensive income (loss)	51	67	26	162
Cash dividends - common stock	0	0	0	0
Dividends and distributions to noncontrolling interests	(32)	(36)	(97)	(90)
Sale of limited partner units of consolidated partnerships			0	362
Conversion of Williams Partners L.P. subordinated units to common units			0	(1,225)
Purchase of treasury stock	0	0	0	0
Stock-based compensation, net of tax	0	0	0	0
Issuance of common stock from 5.5% debentures conversion	0	0	0	0
Other	0	1	5	0
Ending balance	$548	$639	$548	$639

Consolidated Statement of Cash

Consolidated Statement of Cash Flows (USD $)
In Millions	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
OPERATING ACTIVITIES:
Net income	$194	$421	$139	$1,460
Adjustments to reconcile to net cash provided by operating activities:
Depreciation, depletion and amortization			1,087	953
Provision for deferred income taxes			84	497
Provision for loss on investments, property and other assets			351	19
Net gain on disposition of assets			(4)	(37)
Gain on sale of contractual production rights			0	(148)
Provision for doubtful accounts and notes			51	11
Amortization of stock-based awards			36	33
Cash provided (used) by changes in currrent assets and liabilities:
Accounts and notes receivable			179	278
Inventories			23	(111)
Margin deposits and customer margin deposits payable			(29)	72
Other current assets and deferred charges			3	(78)
Accounts payable			(76)	(252)
Accrued liabilities			(199)	17
Changes in current and noncurrent derivative assets and liabilities			43	(103)
Other, including changes in noncurrent assets and liabilities			70	(5)
Net cash provided by operating activities			1,758	2,606
FINANCING ACTIVITIES:
Proceeds from long-term debt			595	674
Payments of long-term debt			(31)	(634)
Proceeds from sale of limited partner units of consolidated partnerships			0	362
Dividends paid			(192)	(186)
Purchase of treasury stock			0	(474)
Dividends and distributions paid to noncontrolling interests			(97)	(90)
Changes in restricted cash			34	(20)
Changes in cash overdrafts			(47)	4
Other - net			(1)	48
Net cash provided (used) by financing activities			261	(316)
INVESTING ACTIVITIES:
Capital expenditures			(1,829)	(2,591)
Purchases of investments/advances to affiliates			(132)	(105)
Proceeds from sale of contractual production rights			0	148
Distribution from Gulfstream Natural Gas System, L.L.C.			148	0
Other - net			(5)	83
Net cash used by investing activities			(1,818)	(2,465)
Increase (decrease) in cash and cash equivalents			201	(175)
Cash and cash equivalents at beginning of period			1,439	1,699
Cash and cash equivalents at end of period	1,640	1,524	1,640	1,524
Supplemental Information
Increases to property, plant and equipment			(1,713)	(2,593)
Changes in related accounts payable and accrued liabilities			(116)	2
Capital expenditures			($1,829)	($2,591)

General

General
	9 Months Ended Sep. 30, 2009 USD / shares
General [Abstract]
General [Text Block]	Note 1. General Our accompanying interim consolidated financial statements do not include all the notes in our annual financial statements and, therefore, should be read in conjunction with the consolidated financial statements and notes thereto in Exhibit99.1 of our Form 8-K dated August27, 2009. The accompanying unaudited financial statements include all normal recurring adjustments that, in the opinion of our management, are necessary to present fairly our financial position at September30, 2009, results of operations and changes in equity for the three and nine months ended September30, 2009 and 2008 and cash flows for the nine months ended September30, 2009 and 2008. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Goodwill We perform interim assessments of goodwill if indicators of potential impairment exist. We performed an interim evaluation as of March31, 2009, and determined that no impairment of our goodwill was necessary. At June30 and September30, 2009, no indicators of potential impairment were present. We will perform our annual impairment evaluation as of December31, 2009, which could result in a material impairment of goodwill. Subsequent Events We have evaluated our disclosure of subsequent events through the time of filing this Form 10-Q with the Securities and Exchange Commission on October29, 2009.

Basis of Presentation

Basis of Presentation
	9 Months Ended Sep. 30, 2009 USD / shares
Basis of Presentation [Abstract]
Basis of Presentation [Text Block]	Note 2. Basis of Presentation Discontinued Operations The accompanying consolidated financial statements and notes reflect the results of operations and financial position of certain former operations as discontinued operations, including certain of our Venezuela operations. (See Note 3.) Unless indicated otherwise, the information in the Notes to Consolidated Financial Statements relates to our continuing operations. Master Limited Partnerships We own approximately 23.6percent of Williams Partners L.P., including 100percent of the general partner, and incentive distribution rights. Considering the presumption of control of the general partner, Williams Partners L.P. is consolidated within our Midstream segment. For 2009 distribution periods, we have agreed to waive our general partner incentive distribution rights, which we estimated would have totaled $29million based on expected distribution levels. We have also agreed to provide a credit of up to $10million to Williams Partners L.P. if general and administrative expenses exceed specified levels. This will decrease our total allocation of income from Williams Partners L.P., resulting in decreased net income attributable to The Williams Companies, Inc. and increased net income attributable to noncontrolling interests. We own approximately 47.7percent of Williams Pipeline Partners L.P., including 100percent of the general partner, and incentive distribution rights. Considering the presumption of control of the general partner, Williams Pipeline Partners L.P. is consolidated within our Gas Pipeline segment.

Discontinued Operations

Discontinued Operations
	9 Months Ended Sep. 30, 2009 USD / shares
Discontinued Operations [Abstract]
Discontinued Operations [Text Block]	Note 3. Discontinued Operations Our Venezuela operations include majority ownership in entities that owned and operated the El Furrial and PIGAP II gas compression facilities prior to their expropriation by the Venezuelan government in May2009. We previously operated these assets under long-term agreements for the exclusive benefit of the state-owned oil company, Petrleos de Venezuela S.A. (PDVSA). Construction of these assets was funded through project financing that is collateralized by the stock, assets, and contract rights of the entities that operated the Venezuela assets and is nonrecourse to us. We and the secured lenders are pursuing rights available to us under our agreements, including contractual and international arbitration. These operations meet the accounting definition of a component of an entity. As a result of the expropriation of the assets and the termination of the associated contracts, we consider these assets to be disposed and thus qualified for reporting as discontinued operations. Considering the expropriation of the assets and the significant controlling rights of the secured lenders, we no longer control these entities and no longer meet the criteria to consolidate them. In conjunction with the deconsolidation of these entities in the second quarter of 2009, we recorded our retained investment in these entities at zero and recognized a pre-tax gain of $9 million. This carrying value was based on our estimates of probability-weighted discounted cash flows that considered (1)alternate arbitration venues, (2)estimated levels of arbitration awards, (3)the subsequent likelihood and timing of collection, (4)the duration of the arbitration process, (5)a discount rate of 20percent, and (6)the allocation of arbitration proceeds between parties, including the secured lenders. The use of alternate judgments and/or assumptions would have resulted in a different gain on deconsolidation. The carrying value of our retained investment in these entities was significantly impacted by our assumptions and is not representative of our underlying claims against PDVSA or the country of Venezuela. The expropriations in the second quarter of 2009 followed an extended period of nonpayment by PDVSA and default notices that we provided in accordance with our agreements. The collection of receivables from PDVSA was historically slower and required more effort than with other customers due to PDVSAs policies and the political environment in Venezuela. In our year-end 2008 analysis, we expected PDVSA to resume regular payments following a February15, 2009, referendum vote in Venezuela; however, that did not happen. PDVSAs continued nonperformance across the industry, their financial distress, and lack of communications with us caused us to revise our assessment in the first quarter of 2009. As a result of this and our first-quarter assessment of the low likelihood of PDVSA curing the defaults, we fully reserved $48million of accounts receivable from PDVSA in the first quarter of 2009. In addition, we ceased revenue recognition of these operations in the first quarter of 2009 as we no longer believed that the collectibility of reven

Asset Sales, Impairments and Ot

Asset Sales, Impairments and Other Accruals
	9 Months Ended Sep. 30, 2009 USD / shares
Asset Sales, Impairments and Other Accruals [Abstract]
Asset Sales, Impairments and Other Accruals [Text Block]	Note 4. Asset Sales, Impairments and Other Accruals The following table presents significant gains or losses reflected in other (income) expense net within segment costs and expenses: Three months ended Nine months ended September 30, September 30, 2009 2008 2009 2008 (Millions) (Millions) Exploration Production Gain on sale of contractual right to an international production payment $ $ $ $ (148 ) Impairment of certain natural gas producing properties 14 14 Penalties from early release of drilling rigs 32 Gas Pipeline Gain on sale of certain south Texas assets (10 ) (10 ) Additional Items In first-quarter 2009, Midstream recorded a $75million impairment charge related to an other-than-temporary loss in value associated with its Venezuelan investment in Accroven SRL (Accroven), which is reflected in loss from investments within investing income. Accroven owns and operates gas processing facilities and an NGL fractionation plant for the exclusive benefit of PDVSA. The deteriorating circumstances in the first quarter of 2009 for our Venezuelan operations (see Note 3) caused us to review our investment in Accroven. We utilized a probability-weighted discounted cash flow analysis, which included an after-tax discount rate of 20percent to reflect the risk associated with operating in Venezuela. (See Note 10.) Accroven was not part of the operations that were expropriated by the Venezuelan government in May2009. Subsequent to June30, 2009, we have been engaged in discussions regarding the eventual disposition of Accroven. In addition, Exploration Production recorded an $11million impairment related to a cost-based investment in first-quarter 2009, which is included within investing income. Exploration Production has a four percent interest in a Venezuelan corporation which owns and operates oil and gas activities. This investment resulted from our previous 10percent direct working interest in a concession that was converted to a reduced interest in a mixed company at the direction of the Venezuelan government in 2006. Considering our evaluation of the deteriorating financial condition of this corporation, we have recorded an other-than-temporary decline in value of our remaining investment balance. Investing income within our Other segment includes gains of $10million from sales of cost-based investments for the nine months ended September30, 2008. In second-quarter 2009, Exploration Production recognized $11million of income related to the recovery of certain royalty overpayments from prior periods, which is reflected within revenues.

Provision

Provision (Benefit) for Income Taxes
	9 Months Ended Sep. 30, 2009 USD / shares
Provision (Benefit) for Income Taxes [Abstract]
Provision (Benefit) for Income Taxes [Text Block]	Note 5. Provision for Income Taxes The provision for income taxes includes: Three months ended Nine months ended September 30, September 30, 2009 2008 2009 2008 (Millions) (Millions) Current: Federal $ (12 ) $ 32 $ 44 $ 299 State (2 ) (11 ) 5 34 Foreign 7 3 21 15 (7 ) 24 70 348 Deferred: Federal 83 149 140 312 State 11 23 18 41 Foreign 3 (5 ) 6 94 175 153 359 Total provision $ 87 $ 199 $ 223 $ 707 The effective income tax rate on the total provision for the three months ended September 30, 2009, is less than the federal statutory rate due primarily to taxes on foreign operations and the impact of nontaxable noncontrolling interests. The effective income tax rate on the total provision for the three months ended September30, 2008, is less than the federal statutory rate due primarily to the impact of nontaxable noncontrolling interests. The effective income tax rate on the total provision for the nine months ended September30, 2009, is greater than the federal statutory rate due primarily to the effect of state income taxes and the limitation of tax benefits associated with impairments of certain Venezuelan investments (see Note 4), partially offset by the impact of nontaxable noncontrolling interests. The effective income tax rate on the total provision for the nine months ended September30, 2008, is approximately equal to the federal statutory rate due primarily to offsetting impacts of state income taxes reduced by nontaxable noncontrolling interests. During the next twelve months, we do not expect ultimate resolution of any uncertain tax position associated with a domestic or international matter will result in a significant increase or decrease of our unrecognized tax benefit. However, certain matters we have contested to the Internal Revenue Service Appeals Division could be resolved and result in a reduction to our unrecognized tax benefit.

Earnings

Earnings (Loss) Per Common Share from Continuing Operations
	9 Months Ended Sep. 30, 2009 USD / shares
Earnings (Loss) Per Common Share from Continuing Operations [Abstract]
Earnings Per Common Share from Continuing Operations [Text Block]	Note 6. Earnings Per Common Share from Continuing Operations Basic and diluted earnings per common share are computed as follows: Three months ended Nine months ended September 30, September 30, 2009 2008 2009 2008 (Dollars in millions, except per share amounts; shares in thousands) Income from continuing operations attributable to The Williams Companies, Inc. available to common stockholders for basic and diluted earnings per common share (1) $ 141 $ 360 $ 266 $ 1,183 Basic weighted-average shares 583,103 577,448 581,121 582,105 Effect of dilutive securities: Nonvested restricted stock units 2,544 1,304 1,911 1,337 Stock options 2,148 3,468 1,834 4,003 Convertible debentures 2,264 6,918 3,827 7,185 Diluted weighted-average shares 590,059 589,138 588,693 594,630 Earnings per common share from continuing operations: Basic $ .24 $ .62 $ .45 $ 2.03 Diluted $ .24 $ .61 $ .45 $ 1.99 (1) The nine-month period ended September30, 2009 includes $1million and the three- and nine-month periods ended September30, 2008 include $1million and $2million, respectively, of interest expense, net of tax, associated with our convertible debentures. These amounts have been added back to income from continuing operations attributable to The Williams Companies, Inc. available to common stockholders to calculate diluted earnings per common share. The table below includes information related to stock options that were outstanding at September30 of each respective year but have been excluded from the computation of weighted-average stock options due to the option exercise price exceeding the third quarter weighted-average market price of our common shares. September 30, September 30, 2009 2008 Options excluded (millions) 6.1 1.9 Weighted-average exercise prices of options excluded $ 25.99 $ 37.04 Exercise price ranges of options excluded $ 17.10 - $42.29 $ 32.05 - $42.29 Third quarter weighted-average market price $ 16.73 $ 30.22

Employee Benefit Plans

Employee Benefit Plans
	9 Months Ended Sep. 30, 2009 USD / shares
Employee Benefit Plans [Abstract]
Employee Benefit Plans [Text Block]	Note 7. Employee Benefit Plans Net periodic benefit expense is as follows: Pension Benefits Three months Nine months ended September 30, ended September 30, 2009 2008 2009 2008 (Millions) Components of net periodic pension expense: Service cost $ 8 $ 6 $ 24 $ 17 Interest cost 16 15 47 45 Expected return on plan assets (16 ) (20 ) (46 ) (59 ) Amortization of prior service cost 1 Amortization of net actuarial loss 11 3 32 10 Amortization of regulatory asset 1 1 Net periodic pension expense $ 20 $ 4 $ 59 $ 13 Other Postretirement Benefits Three months Nine months ended September 30, ended September 30, 2009 2008 2009 2008 (Millions) Components of net periodic other postretirement benefit expense: Service cost $ $ 1 $ 1 $ 2 Interest cost 4 5 12 14 Expected return on plan assets (2 ) (4 ) (6 ) (10 ) Amortization of prior service credit (3 ) (8 ) Amortization of net actuarial loss 1 2 Amortization of regulatory asset 2 1 4 3 Net periodic other postretirement benefit expense $ 2 $ 3 $ 5 $ 9 During the nine months ended September30, 2009, we contributed $61million to our pension plans and $11million to our other postretirement benefit plans. We do not presently anticipate making any additional contributions to our pension plans in the remainder of 2009. We presently anticipate making additional contributions of approximately $4million to our other postretirement benefit plans in 2009 for a total of approximately $15million.

Inventories

Inventories
	9 Months Ended Sep. 30, 2009 USD / shares
Inventories [Abstract]
Inventories [Text Block]	Note 8. Inventories Inventories are as follows: September 30, December 31, 2009 2008 (Millions) Natural gas liquids and olefins $ 58 $ 57 Natural gas in underground storage 63 97 Materials, supplies and other 111 106 $ 232 $ 260

Debt and Banking Arrangements

Debt and Banking Arrangements
	9 Months Ended Sep. 30, 2009 USD / shares
Debt and Banking Arrangements [Abstract]
Debt and Banking Arrangements [Text Block]	Note 9. Debt and Banking Arrangements Revolving Credit and Letter of Credit Facilities (Credit Facilities) At September30, 2009, no loans are outstanding under our credit facilities. Letters of credit issued under our credit facilities are: Credit Facilities Letters of Credit at Expiration September 30, 2009 (Millions) $700million unsecured credit facilities October 2010 $ 222 $1.5billion unsecured credit facility May 2012 $200million Williams Partners L.P. unsecured credit facility December 2012 $ 222 Lehman Commercial Paper Inc., which is committed to fund up to $70million of our $1.5billion revolving credit facility, filed for bankruptcy in October2008. Lehman Brothers Commercial Bank, which has not filed for bankruptcy, is committed to fund up to $12million of Williams Partners L.P.s $200million revolving credit facility. We expect that our ability to borrow under these facilities is reduced by these committed amounts. The committed amounts of other participating banks under these agreements remain in effect and are not impacted by the above. In second-quarter 2009, two of our unsecured revolving credit facilities totaling $500million expired and were not renewed. These facilities were originated primarily in support of our former power business. Issuances On March5, 2009, we issued $600million aggregate principal amount of 8.75percent senior unsecured notes due 2020 to certain institutional investors in a private debt placement. In August 2009, we completed an exchange of these notes for substantially identical new notes that are registered under the Securities Act of 1933, as amended.

Fair Value Measurements

Fair Value Measurements
	9 Months Ended Sep. 30, 2009 USD / shares
Fair Value Measurements [Abstract]
Fair Value Measurements [Text Block]	Note 10. Fair Value Measurements Fair value is the amount received to sell an asset or the amount paid to transfer a liability in an orderly transaction between market participants (an exit price) at the measurement date. Fair value is a market-based measurement considered from the perspective of a market participant. We use market data or assumptions that we believe market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation. These inputs can be readily observable, market corroborated, or unobservable. We apply both market and income approaches for recurring fair value measurements using the best available information while utilizing valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy prioritizes the inputs used to measure fair value, giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). We classify fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows: Level 1 Quoted prices for identical assets or liabilities in active markets that we have the ability to access. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Our Level 1 primarily consists of financial instruments that are exchange traded. Level 2 Inputs are other than quoted prices in active markets included in Level 1, that are either directly or indirectly observable. These inputs are either directly observable in the marketplace or indirectly observable through corroboration with market data for substantially the full contractual term of the asset or liability being measured. Our Level 2 primarily consists of over-the-counter (OTC)instruments such as forwards, swaps, and options. These options, which hedge future sales of production from our Exploration Production segment, are structured as costless collars and are financially settled. They are valued using an industry standard Black-Scholes option pricing model. Prior to the third quarter of 2009, these options were included in Level 3 as a significant input to the model, implied volatility by location, was considered unobservable. However, due to increased transparency over the past several quarters, we now consider this input to be observable and have included these options in Level 2. Level 3 Inputs that are not observable for which there is little, if any, market activity for the asset or liability being measured. These inputs reflect managements best estimate of the assumptions market participants would use in determining fair value. Our Level 3 consists of instruments valued using industry standard pricing models and other valuation methods that utilize unobservable pricing inputs that are significant to the overall fair value. In valuing certain contracts, the inputs used to measure fai

Financial Instruments, Derivati

Financial Instruments, Derivatives, Guarantees and Concentration of Credit Risk
	9 Months Ended Sep. 30, 2009 USD / shares
Financial Instruments, Derivatives, Guarantees and Concentration of Credit Risk Abstract
Financial Instruments, Derivatives, Guarantees and Concentration of Credit Risk [Text Block]	Note 11. Financial Instruments, Derivatives, Guarantees and Concentration of Credit Risk Financial Instruments Fair-value methods We use the following methods and assumptions in estimating our fair-value disclosures for financial instruments: Cash and cash equivalents and restricted cash: The carrying amounts reported in the Consolidated Balance Sheet approximate fair value due to the short-term maturity of these instruments. Current and noncurrent restricted cash is included in other current assets and deferred charges and other assets and deferred charges, respectively, in the Consolidated Balance Sheet. ARO Trust Investments: Our Transcontinental Gas Pipeline Company, LLC (Transco) subsidiary deposits a portion of its collected rates, pursuant to its 2008 rate case settlement, into an external trust specifically designated to fund future asset retirement obligations (ARO Trust). The ARO Trust invests in a portfolio of mutual funds that are reported at fair value in other assets and deferred charges in the Consolidated Balance Sheet and are classified as available-for-sale. However, both realized and unrealized gains and losses are ultimately recorded as regulatory assets or liabilities. Long-term debt: The fair value of our publicly traded long-term debt is determined using indicative period-end traded bond market prices. Private debt is valued based on market rates and the prices of similar securities with similar terms and credit ratings. At September30, 2009 and December31, 2008, approximately 97percent of our long-term debt was publicly traded. Guarantees: The guarantees represented in the following table consist primarily of guarantees we have provided in the event of nonpayment by our previously owned communications subsidiary, Williams Communications Group (WilTel), on certain lease performance obligations. To estimate the fair value of the guarantees, the estimated default rate is determined by obtaining the average cumulative issuer-weighted corporate default rate for each guarantee based on the credit rating of WilTels current owner and the term of the underlying obligation. The default rates are published by Moodys Investors Service. Guarantees, if recognized, are included in accrued liabilities in the Consolidated Balance Sheet. Other: Includes notes and other noncurrent receivables, margin deposits, customer margin deposits payable, cost-based investments and auction rate securities. Energy derivatives: Energy derivatives include futures, forwards, swaps, and options. These are carried at fair value in the Consolidated Balance Sheet. See Note 10 for discussion of valuation of our energy derivatives. Carrying amounts and fair values of our financial instruments September 30, 2009 December 31, 2008 Carrying Carrying Asset (Liability) Amount Fair Value Amount Fair Value (Millions) Cash and cash equivalents $ 1,640 $ 1,640 $ 1,438 $ 1,438 Restricted cash (current and noncurrent) $ 34 $ 34 $ 37 $ 37 ARO Trust Investments $ 21 $ 21 $ 13 $ 13 Long-term debt, including

Contingent Liabilities

Contingent Liabilities
	9 Months Ended Sep. 30, 2009 USD / shares
Contingent Liabilities [Abstract]
Contigent Liabilities [Text Block]	Note 12. Contingent Liabilities Issues Resulting from California Energy Crisis Our former power business was engaged in power marketing in various geographic areas, including California. Prices charged for power by us and other traders and generators in California and other western states in 2000 and 2001 were challenged in various proceedings, including those before the U.S. Federal Energy Regulatory Commission (FERC). These challenges included refund proceedings, summer 2002 90-day contracts, investigations of alleged market manipulation including withholding, gas indices and other gaming of the market, new long-term power sales to the State of California that were subsequently challenged and civil litigation relating to certain of these issues. We have entered into settlements with the State of California (State Settlement), major California utilities (Utilities Settlement), and others that substantially resolved each of these issues with these parties. As a result of a June2008 U.S. Supreme Court decision, certain contracts that we entered into during 2000 and 2001 may be subject to partial refunds depending on the results of further proceedings at the FERC. These contracts, under which we sold electricity, totaled approximately $89million in revenue. While we are not a party to the cases involved in the U.S. Supreme Court decision, the buyer of electricity from us is a party to the cases and claims that we must refund to the buyer any loss it suffers due to the FERCs reconsideration of the contract terms at issue in the decision. The FERC has directed the parties to provide additional information on certain issues remanded by the U.S. Supreme Court, but delayed the submission of this information to permit the parties to explore possible settlements of the contractual disputes. The parties to the remanded proceeding have engaged the FERCs Dispute Resolution Service to assist with settlement discussions. Certain other issues also remain open at the FERC and for other nonsettling parties. Refund proceedings Although we entered into the State Settlement and Utilities Settlement, which resolved the refund issues among the settling parties, we continue to have potential refund exposure to nonsettling parties, such as the counterparty to the contracts described above and various California end users that did not participate in the Utilities Settlement. As a part of the Utilities Settlement, we funded escrow accounts that we anticipate will satisfy any ultimate refund determinations in favor of the nonsettling parties including interest on refund amounts that we might owe to settling and nonsettling parties. We are also owed interest from counterparties in the California market during the refund period for which we have recorded a receivable totaling $24 million at September30, 2009. Collection of the interest and the payment of interest on refund amounts from the escrow accounts is subject to the conclusion of this proceeding. Therefore, we continue to participate in the FERC refund case and related proceedings. Challenges to virtually every aspect of the refund proceedings, including the refund period, continue to be made. D

Segment Disclosures

Segment Disclosures
	9 Months Ended Sep. 30, 2009 USD / shares
Segment Disclosures [Abstract]
Segment Disclosures [Text Block]	Note 13. Segment Disclosures Our reportable segments are strategic business units that offer different products and services. The segments are managed separately because each segment requires different technology, marketing strategies and industry knowledge. Our master limited partnerships, Williams Partners L.P. and Williams Pipeline Partners L.P., are consolidated within our Midstream and Gas Pipeline segments, respectively. (See Note 2.) Other primarily consists of corporate operations. Performance Measurement We currently evaluate performance based upon segment profit (loss) from operations, which includes segment revenues from external and internal customers, segment costs and expenses, equity earnings (losses) and income (loss)from investments. Intersegment sales are generally accounted for at current market prices as if the sales were to unaffiliated third parties. External revenues of our Exploration Production segment are presented net of transportation expenses and royalties due third parties on intersegment sales. In some periods, transportation expenses and royalties due third parties on intersegment sales may exceed other external revenues. The following table reflects the reconciliation of segment revenues and segment profit (loss) to revenues and operating income (loss) as reported in the Consolidated Statement of Income. Exploration Gas Gas Marketing Production Pipeline Midstream Services Other Eliminations Total (Millions) Three months ended September30, 2009 Segment revenues: External $ 159 $ 374 $ 970 $ 593 $ 2 $ $ 2,098 Internal 363 5 21 104 4 (497 ) Total revenues $ 522 $ 379 $ 991 $ 697 $ 6 $ (497 ) $ 2,098 Segment profit (loss) $ 106 $ 157 $ 222 $ (6 ) $ (1 ) $ $ 478 Less equity earnings 4 19 21 44 Segment operating income (loss) $ 102 $ 138 $ 201 $ (6 ) $ (1 ) $ 434 General corporate expenses (40 ) Total operating income $ 394 Three months ended September30, 2008 Segment revenues: External $ (101 ) $ 403 $ 1,398 $ 1,499 $ 2 $ $ 3,201 Internal 962 4 (6 ) 217 4 (1,181 ) Total revenues $ 861 $ 407 $ 1,392 $ 1,716 $ 6 $ (1,181 ) $ 3,201

Recent Accounting Standards

Recent Accounting Standards
	9 Months Ended Sep. 30, 2009 USD / shares
Recent Accounting Standards [Abstract]
Recent Accounting Standards [Text Block]	Note 14. Accounting Standards Issued But Not Yet Adopted In September2009, The Financial Accounting Standards Board (FASB)issued Accounting Standards Update No.2009-12, Fair Value Measurements and Disclosures (Topic 820): Investments in Certain Entities That Calculate Net Asset Value Per Share (or Its Equivalent). This Update amends Topic 820 by providing additional guidance for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent). The amendments in this Update permit, as a practical expedient, a reporting entity to estimate the fair value of an investment that is within its scope using the net asset value per share of the investment (or its equivalent) if the net asset value of the investment is calculated in a manner consistent with the measurement principles of Topic 946 as of the reporting entitys measurement date, including measurement of all or substantially all of the underlying investments of the investee. The amendments also require disclosures, by major category of investment, about the attributes of investments within the scope of this Update, such as the nature of any restrictions on the investors ability to redeem its investments at the measurement date, any unfunded commitments, and the investment strategies of the investees. The amendments in this Update are effective for interim and annual periods ending after December15, 2009. We will assess the application of this Update on our Consolidated Financial Statements. In August2009, the FASB issued Accounting Standards Update No.2009-5, Fair Value Measurements and Disclosures (Topic 820) Measuring Liabilities at Fair Value. This Update provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more prescribed techniques. The amendments in this Update also clarify that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. Additionally, this Update clarifies that both a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The guidance provided in this Update is effective for us beginning with the fourth quarter of 2009. We are currently evaluating this Update to determine the impact to our Consolidated Financial Statements. In December2008, the FASB issued FASB Staff Position No.FAS 132 (R)-1, Employers Disclosures about Postretirement Benefit Plan Assets (FSP FAS 132 (R)-1). This FASB Staff Position (FSP)amends FASB Statement No.132 (revised 2003), Employers Disclosures about Pensions and Other Postretirement Benefits (SFAS No.132 (R)), to provide guidance on an employers disclosures about plan assets of a defined benefit pension or other postretirement plan. FSP FAS

Document Information

Document Information
	9 Months Ended Sep. 30, 2009 USD / shares
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-30

Entity Information

Entity Information (USD $)
	9 Months Ended Sep. 30, 2009	Oct. 26, 2009
Entity Information [Line Items]
Entity Registrant Name	WILLIAMS COMPANIES INC
Entity Central Index Key	0000107263
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float	$23,344,993,927
Entity Listings [Line Items]
Entity Common Stock, Shares Outstanding		583,130,240