WILLIAMS COMPANIES INC

Variances due to the changes in natural gas prices and transportation volumes have little impact on revenues because, under our rate design methodology, the majority of overall cost of service is recovered through firm capacity reservation charges in Transco’s transportation rates.

Transco has cash out sales, which settle gas imbalances with shippers. In the course of providing transportation services to customers, Transco may receive different quantities of gas from shippers than the quantities delivered on behalf of those shippers. Additionally, Transco transports gas on various pipeline systems, which may deliver different quantities of gas on Transco’s behalf than the quantities of gas received from Transco. These transactions result in gas transportation and exchange imbalance receivables and payables. Transco’s tariff includes a method whereby the majority of transportation imbalances are settled on a monthly basis through cash out sales or purchases. The cash out sales have no impact on Transco’s operating income.

Revenues increased primarily due to:

•A $113 million increase in Natural gas transportation service revenuesdue to additional capacity from placing the Regional Energy Access Expansion into service during the fourth quarter of 2023 and in August 2024, the impact of placing the Carolina Market Link Expansion into service during the first quarter of 2024, the impact of placing partially the Southside Reliable Enhancement into service in November 2024, and an additional billing day, partially offset by lower electric power costs in 2024. Electric power costs are recovered from our customers through transportation rates and are offset in Operating and maintenance expenses resulting in no net impact on our results of operations;

•A $14 million increase in Natural gas storage service revenues primarily due to an increase in rates and an additional billing day;

•A $19 million decrease in Natural gas product sales due to lower pricing offset by higher cash-out volumes, which directly offsets in Natural gas product costs resulting in no net impact on our results of operations;

•A $10 million decrease in Other service revenues primarily due to park and loan services.

Natural gas product costs decreased, directly offsetting Natural gas product salesand resulting in no net impact on our results of operations.

Operating and maintenance expenses decreased primarily due to lower electric power costs. Electric power costs are recovered from customers through transportation rates and are offset in Natural gas transportation service revenues resulting in no net impact on results of operations; additionally there were increases in Operating and maintenance expenses costs from employee-related costs, including the impact of a change in a practice related to payroll timing, offset by a decrease in contractor services costs.

Depreciation and amortization expenses increased as a result of additional assets placed in service and an increase in ARO-related depreciation (offset in Other income (expense) – net resulting in no net impact on our results of operations).

Taxes, other than income taxes increased primarily due to an increase in property tax as a result of valuation increases in 2024.

Other (income) expense – net incurred an unfavorable change primarily driven by an unfavorable change in the amortization of the regulatory pension liabilities, partially offset by a favorable change in the materials and supplies obsolete inventory reserve and a favorable change associated with the deferral of ARO related depreciation (offset in Depreciation and amortization expenses resulting in no net impact on our results of operations).

Interest income decreased due to a decrease in affiliated interest income on our advances to Williams due to a lower note receivable balance during 2024.

Allowance for equity and borrowed funds used during construction (AFUDC)increased as a result of increased capital expenditures.

Other income (expense) – netincreased resulting from various increased expenses incurred in 2024.