The Williams Companies, Inc. (WMB) 10-Q 5 May 10 2010 Q1 Quarterly report Financial data

Consolidated Statement of Opera

Consolidated Statement of Operations (USD $)
In Millions, except Share data in Thousands, unless otherwise specified	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Revenues:
Total revenues	$2,596	$1,922
Segment costs and expenses:
Costs and operating expenses	1,922	1,444
Selling, general and administrative expenses	111	125
Other (income) expense - net	0	33
Total segment costs and expenses	2,033	1,602
General corporate expenses	85	40
Total operating income	478	280
Interest accrued	(164)	(162)
Interest capitalized	17	20
Investing income (loss)	39	(61)
Early debt retirement costs	(606)	0
Other expense - net	(7)	(2)
Income (loss) from continuing operations before income taxes	(243)	75
Provision (benefit) for income taxes	(95)	56
Income (loss) from continuing operations	(148)	19
Income (loss) from discontinued operations	2	(243)
Net income (loss)	(146)	(224)
Less: Net income (loss) attributable to noncontrolling interests	47	(52)
Net loss attributable to The Williams Companies, Inc.	(193)	(172)
Amounts attributable to The Williams Companies, Inc.:
Income (loss) from continuing operations	(195)	2
Income (loss) from discontinued operations	2	(174)
Net loss attributable to The Williams Companies, Inc.	(193)	(172)
Basic earnings (loss) per common share:
Income (loss) from continuing operations	-0.33	$0
Income (loss) from discontinued operations	$0	-0.3
Net loss	-0.33	-0.3
Weighted-average shares (thousands)	583,929	579,495
Diluted earnings (loss) per common share:
Income (loss) from continuing operations	-0.33	$0
Income (loss) from discontinued operations	$0	-0.29
Net loss	-0.33	-0.29
Weighted-average shares (thousands)	583,929	582,361
Cash dividends declared per common share	0.11	0.11
Williams Partners
Revenues:
Total revenues	1,458	957
Segment costs and expenses:
Total operating income	388	247
Exploration & Production
Revenues:
Total revenues	1,168	976
Segment costs and expenses:
Total operating income	157	72
Other (Other_Member)
Revenues:
Total revenues	278	158
Segment costs and expenses:
Total operating income	18	1
Business Intersegment, Eliminations [Member]
Revenues:
Intercompany eliminations	(308)	(169)
General Corporate Expenses [Member]
Segment costs and expenses:
General corporate expenses	($85)	($40)

Consolidated Balance Sheet

Consolidated Balance Sheet (USD $)
In Millions	3 Months Ended Mar. 31, 2010	12 Months Ended Dec. 31, 2009
Assets [Abstract]
Cash and cash equivalents	$1,644	$1,867
Accounts and notes receivable (net of allowance of $19 at March 31, 2010 and $22 at December 31, 2009)	831	829
Inventories	221	222
Derivative assets	703	650
Other current assets and deferred charges	190	225
Total current assets	3,589	3,793
Investments	888	886
Property, plant, and equipment, at cost	28,030	27,625
Accumulated depreciation, depletion and amortization	(9,316)	(8,981)
Property, plant, and equipment - net	18,714	18,644
Derivative assets	376	444
Goodwill	1,011	1,011
Other assets and deferred charges	551	502
Total assets	25,129	25,280
LIABILITIES AND EQUITY
Accounts payable	907	934
Accrued liabilities	760	948
Derivative liabilities	420	578
Long-term debt due within one year	10	17
Total current liabilities	2,097	2,477
Long-term debt	8,615	8,259
Deferred income taxes	3,708	3,656
Derivative liabilities	304	428
Other liabilities and deferred income	1,443	1,441
Contingent liabilities and commitments (Note 12)
Stockholders' equity
Common stock (960 million shares authorized at $1 par value; 619 million shares issued at March 31, 2010 and 618 million shares issued at December 31, 2009)	619	618
Capital in excess of par value	7,346	8,135
Retained earnings	646	903
Accumulated other comprehensive income (loss)	3	(168)
Treasury stock, at cost (35 million shares of common stock)	(1,041)	(1,041)
Total stockholders' equity	7,573	8,447
Noncontrolling interests in consolidated subsidiaries	1,389	572
Total equity	8,962	9,019
Total liabilities and equity	$25,129	$25,280

Consolidated Balance Sheet (Par

Consolidated Balance Sheet (Parenthetical) (USD $)
In Millions, unless otherwise specified	Mar. 31, 2010	Dec. 31, 2009
Allowance for Doubtful Accounts Receivable, Current	$19	$22
Common Stock, Shares Authorized	960	960
Common Stock, Par or Stated Value Per Share	1	1
Common Stock, Shares, Issued	619	618
Treasury Stock, Shares	35	35

Consolidated Statement of Chang

Consolidated Statement of Changes in Equity (USD $)
In Millions	The Williams Companies, Inc.	Noncontrolling Interests	Total
Beginning balance at Dec. 31, 2008	$8,440	$614	$9,054
Comprehensive income (loss):
Net income (loss)	(172)	(52)	(224)
Other comprehensive income, net of tax:
Net change in cash flow hedges	123	0	123
Foreign currency translation adjustments	(13)	0	(13)
Pension and other postretirement benefits - net	7	0	7
Total other comprehensive income	117	0	117
Total comprehensive income (loss)	(55)	(52)	(107)
Cash dividends - common stock	(64)	0	(64)
Dividends and distributions to noncontrolling interests	0	(33)	(33)
Stock-based compensation, net of tax	5	0	5
Change in Williams Partners L.P. ownership interest (Note 2)	0	0	0
Other	0	1	1
Ending balance at Mar. 31, 2009	8,326	530	8,856
Beginning balance at Dec. 31, 2009	8,447	572	9,019
Comprehensive income (loss):
Net income (loss)	(193)	47	(146)
Other comprehensive income, net of tax:
Net change in cash flow hedges	147	2	149
Foreign currency translation adjustments	19	0	19
Pension and other postretirement benefits - net	5	0	5
Total other comprehensive income	171	2	173
Total comprehensive income (loss)	(22)	49	27
Cash dividends - common stock	(64)	0	(64)
Dividends and distributions to noncontrolling interests	0	(32)	(32)
Stock-based compensation, net of tax	12	0	12
Change in Williams Partners L.P. ownership interest (Note 2)	(800)	800	0
Other	0	0	0
Ending balance at Mar. 31, 2010	$7,573	$1,389	$8,962

Consolidated Statement of Cash

Consolidated Statement of Cash Flows (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
OPERATING ACTIVITIES:
Net income (loss)	($146)	($224)
Adjustments to reconcile to net cash provided by operating activities:
Depreciation, depletion, and amortization	361	367
Provision (benefit) for deferred income taxes	29	(38)
Provision for loss on investments, property and other assets	4	339
Provision for doubtful accounts and notes	1	50
Early debt retirement costs	606	0
Cash provided (used) by changes in current assets and liabilities:
Accounts and notes receivable	(3)	245
Inventories	0	13
Margin deposits and customer margin deposits payable	11	(2)
Other current assets and deferred charges	26	(13)
Accounts payable	(13)	(60)
Accrued liabilities	(280)	(216)
Changes in current and noncurrent derivative assets and liabilities	(8)	37
Other, including changes in noncurrent assets and liabilities	29	14
Net cash provided by operating activities	617	512
FINANCING ACTIVITIES:
Proceeds from long-term debt	3,749	595
Payments of long-term debt	(3,407)	(31)
Dividends paid	(64)	(64)
Dividends and distributions paid to noncontrolling interests	(32)	(33)
Payments for debt issuance costs	(65)	0
Premiums paid on early debt retirements	(574)	0
Changes in restricted cash	0	36
Changes in cash overdrafts	(3)	(41)
Other - net	(9)	(6)
Net cash provided (used) by financing activities	(405)	456
INVESTING ACTIVITIES:
Capital expenditures	(428)	(612)
Other - net	(7)	(9)
Net cash used by investing activities	(435)	(621)
Increase (decrease) in cash and cash equivalents	(223)	347
Cash and cash equivalents at beginning of period	1,867	1,439
Cash and cash equivalents at end of period	1,644	1,786
Supplemental Information
Increases to property, plant, and equipment	(410)	(484)
Changes in related accounts payable and accrued liabilities	(18)	(128)
Capital expenditures	($428)	($612)

General

General
	3 Months Ended Mar. 31, 2010
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 our Annual Report on Form 10-K. 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 March31, 2010, and results of operations, changes in equity, and cash flows for the three months ended March31, 2010 and 2009. 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. On February17, 2010, we completed a strategic restructuring that involved contributing certain of our wholly and partially owned subsidiaries to Williams Partners L.P. (WPZ), our consolidated master limited partnership, and restructuring our debt (see Note 9). As discussed further in Note 2, we have revised our segment presentation as a result of this strategic restructuring. The restructure disclosures in this filing should be read in conjunction with our 2009 Form 10-K. Goodwill We perform interim assessments of goodwill if impairment triggering events or circumstances are present. One such triggering event is a significant decline in forward natural gas prices. While nearer-term forward natural gas prices as of March31, 2010, have declined compared to those used in our prior year-end analysis, we do not consider the impact across all future production periods to be significant enough to be indicative of a triggering event. It is reasonably possible that we may be required to conduct an interim goodwill impairment evaluation during 2010, which could result in a material impairment of goodwill.

Basis of Presentation

Basis of Presentation
	3 Months Ended Mar. 31, 2010
Basis of Presentation [Text Block]	Note 2. Basis of Presentation Strategic Restructuring Our strategic restructuring completed during the first quarter of 2010 resulted in contributing businesses that were in our previously reported Gas Pipeline and Midstream Gas Liquids (Midstream) segments into our consolidated master limited partnership, WPZ. The contributed Gas Pipeline businesses included 100percent of Transcontinental Gas Pipe Line Company, LLC (Transco), 65percent of Northwest Pipeline GP (Northwest Pipeline), and 24.5percent of Gulfstream Natural Gas System, L.L.C. (Gulfstream). We also contributed our general and limited partner interests in Williams Pipeline Partners L.P. (WMZ), which owns the remaining 35percent of Northwest Pipeline. The contributed Midstream businesses include significant, large-scale operations in the Rocky Mountain and Gulf Coast regions, as well as a business in Pennsylvanias Marcellus Shale region, and various equity investments in domestic processing and fractionation assets. Our remaining 25.5percent ownership interest in Gulfstream and our Canadian, Venezuelan, and olefins operations were excluded from the transaction. Additionally, our Exploration Production segment was not included in this transaction. As a result of the restructuring, we have changed our segment reporting structure to align with the new parent-level focus employed by our chief operating decision-maker considering the resource allocation and governance associated with managing WPZ as a distinctly separate entity. Beginning this quarter, our reportable segments are Williams Partners, Exploration Production, and Other. William Partners consists of our consolidated master limited partnership WPZ, including the gas pipeline and midstream businesses that were contributed as part of our previously described strategic restructuring. WPZ also includes other significant midstream operations and investments in the Four Corners and Gulf Coast regions, as well as an NGL fractionator and storage facilities near Conway, Kansas. Exploration Production includes natural gas development, production and gas management activities primarily in the Rocky Mountain and Mid-Continent regions of the United States, development activities in the Eastern portion of the United States and oil and natural gas interests in South America. The gas management activities include procuring fuel and shrink gas for our midstream businesses and providing marketing to third parties, such as producers. Additionally, gas management activities include the managing of various natural gas related contracts such as transportation, storage, related hedges and proprietary trading positions not utilized for our own production. Other includes our Canadian midstream and domestic olefins operations, a 25.5percent interest in Gulfstream, as well as corporate operations. Prior periods have been recast to reflect this revised segment presentation. Master Limited Partnerships Upon completing our strategic restructuring, we now own approximately 84percent of the interests in WPZ, including the interests of the general partner, which is wholly owned by us, and incentive distribution rights. Prior to the r

Discontinued Operations

Discontinued Operations
	3 Months Ended Mar. 31, 2010
Discontinued Operations [Text Block]	Note 3. Discontinued Operations Summarized Results of Discontinued Operations Three months ended March 31, 2010 2009 (Millions) Income (loss)from discontinued operations before impairments and income taxes $ 5 $ (102 ) Impairments (211 ) (Provision) benefit for income taxes (3 ) 70 Income (loss)from discontinued operations $ 2 $ (243 ) Income (loss)from discontinued operations: Attributable to noncontrolling interests $ $ (69 ) Attributable to The Williams Companies, Inc. $ 2 $ (174 ) Income (loss)from discontinued operations before impairments and income taxes for the three months ended March31, 2009, primarily includes losses related to our discontinued Venezuela operations, including $48million of bad debt expense and a $30million net charge related to the write-off of certain deferred charges and credits. Impairments for the three months ended March31, 2009, reflects a $211million impairment of our Venezuela property, plant, and equipment. (Provision) benefit for income taxes for the three months ended March31, 2009, includes a $76 million benefit from the reversal of deferred tax balances related to our discontinued Venezuela operations.

Asset Sales, Impairments and Ot

Asset Sales, Impairments and Other Accruals
	3 Months Ended Mar. 31, 2010
Asset Sales, Impairments and Other Accruals [Text Block]	Note 4. Asset Sales, Impairments and Other Accruals Other (income) expense net within segment costs and expenses in 2009 includes Exploration Productions $34 million of penalties from the early release of drilling rigs. Additional Items We completed a strategic restructuring transaction in the first quarter of 2010 that involved significant debt issuances, retirements and amendments (see Note 9). We incurred significant costs related to these transactions, as follows: $606million of early debt retirement costs consisting primarily of cash premiums of $574million; $39million of other transaction costs reflected in general corporate expenses, of which $4million is attributable to noncontrolling interests; $4million of accelerated amortization of debt costs related to the amendments of credit facilities, reflected in other expense net below operating income. In first-quarter 2009, we recorded a $75million impairment charge related to an other-than-temporary loss in value associated with our Venezuelan investment in Accroven SRL (Accroven), which is reflected in loss from investments within investing income (loss) at Other. (See Note 10.) In addition, Exploration Production recorded an $11million impairment related to a cost-based investment in first-quarter 2009, which is included within investing income (loss). (See Note 10.)

Provision

Provision (Benefit) for Income Taxes
	3 Months Ended Mar. 31, 2010
Provision (Benefit) for Income Taxes [Text Block]	Note 5. Provision (Benefit) for Income Taxes The provision (benefit)for income taxes from continuing operations includes: Three months ended March 31, 2010 2009 (Millions) Current: Federal $ (115 ) $ 12 State (14 ) 2 Foreign 5 4 (124 ) 18 Deferred: Federal 24 34 State 3 4 Foreign 2 29 38 Total provision (benefit) $ (95 ) $ 56 The effective income tax rate on the total benefit for the three months ended March31, 2010, is greater than the federal statutory rate primarily due to the effect of state income taxes and the impact of nontaxable noncontrolling interests partially offset by the reduction of tax benefits on the Medicare PartD federal subsidy due to enacted healthcare legislation. The effective income tax rate on the total provision for the three months ended March31, 2009, is greater than the federal statutory rate primarily due 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. During the next 12months, 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
	3 Months Ended Mar. 31, 2010
Earnings (Loss) Per Common Share from Continuing Operations [Text Block]	Note 6. Earnings (Loss) Per Common Share from Continuing Operations Three months ended March 31, 2010 2009 (Dollars in millions, except per-share amounts; shares in thousands) Income (loss)from continuing operations attributable to The Williams Companies, Inc. available to common stockholders for basic and diluted earnings (loss)per common share $ (195 ) $ 2 Basic weighted-average shares 583,929 579,495 Effect of dilutive securities: Nonvested restricted stock units 1,405 Stock options 1,461 Convertible debentures Diluted weighted-average shares 583,929 582,361 Earnings (loss)per common share from continuing operations: Basic $ (.33 ) $ Diluted $ (.33 ) $ For the three months ended March31, 2010, 3.3million weighted-average nonvested restricted stock units and 3.2million weighted-average stock options have been excluded from the computation of diluted earnings per common share as their inclusion would be antidilutive due to our loss from continuing operations attributable to The Williams Companies, Inc. Additionally, for the three months ended March31, 2010 and 2009, respectively, 2.3million and 4.8million weighted-average shares related to the assumed conversion of our convertible debentures, as well as the related interest, net of tax, have been excluded from the computation of diluted earnings per common share. Inclusion of these shares would have an antidilutive effect on the diluted earnings per common share. We estimate that if income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders was $54million of income for the three months ended March31, 2010 and 2009, then these shares would become dilutive. The table below includes information related to stock options that were outstanding at March 31 of each respective year but have been excluded from the computation of weighted-average stock options due to the option exercise price exceeding the first quarter weighted-average market price of our common shares. March 31, 2010 2009 Options excluded (millions) 2.4 6.7 Weighted-average exercise price of options excluded $ 32.40 $ 25.62 Exercise price ranges of options excluded $ 22.25 - $40.51 $ 15.71 - $42.29 First quarter weighted-average market price $ 22.18 $ 13.05

Employee Benefit Plans

Employee Benefit Plans
	3 Months Ended Mar. 31, 2010
Employee Benefit Plans [Text Block]	Note 7. Employee Benefit Plans Net periodic benefit expense is as follows: Other Postretirement Pension Benefits Benefits Three months Three months ended March 31, ended March 31, 2010 2009 2010 2009 (Millions) Components of net periodic benefit expense: Service cost $ 8 $ 7 $ 1 $ Interest cost 16 15 4 4 Expected return on plan assets (18 ) (14 ) (3 ) (2 ) Amortization of prior service credit (3 ) (2 ) Amortization of net actuarial loss 9 11 1 Amortization of regulatory asset 1 Net periodic benefit expense (income) $ 15 $ 19 $ (1 ) $ 2 During the three months ended March31, 2010, we contributed $15million to our pension plans and $4million to our other postretirement benefit plans. We presently anticipate making additional contributions of approximately $46million to our pension plans and approximately $12million to our other postretirement benefit plans in the remainder of 2010.

Inventories

Inventories
	3 Months Ended Mar. 31, 2010
Inventories [Text Block]	Note 8. Inventories March 31, December 31, 2010 2009 (Millions) Natural gas liquids and olefins $ 64 $ 70 Natural gas in underground storage 46 47 Materials, supplies, and other 111 105 $ 221 $ 222

Debt and Banking Arrangements

Debt and Banking Arrangements
	3 Months Ended Mar. 31, 2010
Debt and Banking Arrangements [Text Block]	Note 9. Debt and Banking Arrangements Revolving Credit and Letter of Credit Facilities (Credit Facilities) At March31, 2010, letters of credit issued and loans outstanding under our credit facilities are: March 31, 2010 Credit Facilities Letters of Credit Loans Expiration Issued Outstanding (Millions) $700million unsecured credit facilities October 2010 $ 186 $ $900million unsecured credit facility May 2012 $1.75billion Williams Partners L.P. unsecured credit facility February 2013 108 $ 186 $ 108 As part of our strategic restructuring (see Note 2), WPZ entered into a new $1.75billion three-year senior unsecured revolving credit facility with Transco and Northwest Pipeline as co-borrowers. This credit facility replaced an unsecured $450million credit facility, comprised of a $200million revolving credit facility and a $250million term loan which was terminated as part of the restructuring. At the closing, WPZ utilized $250million of the credit facility to repay the outstanding term loan. As of March31, 2010, loans outstanding under the credit facility were reduced to $108 million using available cash. The credit facility expires February15, 2013, and may, under certain conditions, be increased by up to an additional $250million. The full amount of the credit facility is available to WPZ to the extent not otherwise utilized by Transco and Northwest Pipeline. Transco and Northwest Pipeline each have access to borrow up to $400million under the credit facility to the extent not otherwise utilized by WPZ. Each time funds are borrowed, the borrower may choose from two methods of calculating interest: a fluctuating base rate equal to Citibank N.A.s adjusted base rate plus an applicable margin, or a periodic fixed rate equal to LIBOR plus an applicable margin. WPZ is required to pay a commitment fee (currently 0.5percent) based on the unused portion of the credit facility. The applicable margin and the commitment fee are based on the specific borrowers senior unsecured long-term debt ratings. The credit facility contains various covenants that limit, among other things, a borrowers and its respective subsidiaries ability to incur indebtedness, grant certain liens supporting indebtedness, merge or consolidate, sell all or substantially all of its assets, enter into certain affiliate transactions, make certain distributions during an event of default, and allow any material change in the nature of its business. Significant financial covenants under the credit facility include: WPZ ratio of debt to EBITDA (each as defined in the credit facility) must be no greater than 5 to 1. The ratio of debt to capitalization (defined as net worth plus debt) must be no greater than 55percent for Transco and Northwest Pipeline. Each of the above ratios will be tested, beginning June30, 2010, at the end of each fiscal quarter, and the debt to EBITDA ratio will be measured on a rolling four-quarter basis (with the first full year measured on an annualized basis). The credit facility inclu

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Mar. 31, 2010
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. 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 that are valued utilizing unobservable pricing inputs that are significant to the overall fair value. In valuing certain contracts, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. For disclosure purposes, assets and liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels. The following table presents, by level within the fair value hierarchy, our assets and liabilities that are measured at fair value on a recurring basis.

Financial Instruments, Derivati

Financial Instruments, Derivatives, Guarantees and Concentration of Credit Risk
	3 Months Ended Mar. 31, 2010
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 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 March31, 2010 and December31, 2009, approximately 58percent and 97percent, respectively, of our long-term debt was publicly traded. (See Note 9.) 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 current and noncurrent notes receivable, margin deposits, customer margin deposits payable, and cost-based investments. 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 March 31, 2010 December 31, 2009 Carrying Carrying Asset (Liability) Amount Fair Value Amount Fair Value (Millions) Cash and cash equivalents $ 1,644 $ 1,644 $ 1,867 $ 1,867 Restricted cash (current and noncurrent) 28 28 28 28 ARO Trust Investments 25 25 22 22 Long-term debt, including current portion (a) (8,622 ) (9,319 ) (

Contingent Liabilities

Contingent Liabilities
	3 Months Ended Mar. 31, 2010
Contingent 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 a significant portion of 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 will be used towards satisfying 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 $24million at March31, 2010. Collection of the interest and the payment of interest on refund amounts from the escrow accounts are 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

Segment Disclosures

Segment Disclosures
	3 Months Ended Mar. 31, 2010
Segment Disclosures [Text Block]	Note 13. Segment Disclosures In February2010, we completed our strategic restructuring that resulted in a revision to our segment reporting structure. Beginning with first-quarter 2010 reporting, our reportable segments are Williams Partners, Exploration Production, and Other. (See Note 2.) Our segment presentation of Williams Partners is reflective of the parent-level focus by our chief operating decision-maker, considering the resource allocation and governance provisions associated with this master limited partnership structure. Following our restructuring, this entity maintains a capital and cash management structure that is separate from ours. Williams Partners is expected to be self-funding and maintains its own lines of bank credit and cash management accounts. These factors, coupled with a different cost of capital from our other businesses, serve to differentiate the management of this entity as a whole. Performance Measurement We currently evaluate segment operating 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. The primary types of costs and operating expenses by segment can be generally summarized as follows: Williams Partners commodity purchases (primarily for NGL and crude marketing, shrink and fuel), depreciation and operation and maintenance expenses; Exploration Production commodity purchases (primarily in support of commodity marketing and risk management activities), depletion, depreciation and amortization, lease and facility operating expenses and operating taxes; Other commodity purchases (primarily for shrink, feedstock and NGL and olefin marketing activities), depreciation and operation and maintenance expenses. The following table reflects the reconciliation of segment revenues and segment profit (loss) to revenues and operating income as reported in the Consolidated Statement of Operations. Exploration Williams Partners Production Other Eliminations Total (Millions) Three months ended March31, 2010 Segment revenues: External $ 1,391 $ 936 $ 269 $ $ 2,596 Internal 67 232 9 (308 ) Total revenues $ 1,458 $ 1,168 $ 278 $ (308 ) $ 2,596 Segment profit $ 414 $ 162 $ 27 $ $ 603 Less equity earnings 26 5 9 40 Segment operating income $ 388 $ 157 $ 18 $ 563 General corporate expenses (85 ) Total operating income $ 478

Document Information

Document Information
	3 Months Ended Mar. 31, 2010
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-31
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1

Entity Information

Entity Information (USD $)
	3 Months Ended Mar. 31, 2010	Apr. 30, 2010	Jun. 30, 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			$9,096,736,726
Entity Common Stock, Shares Outstanding		584,272,911