WILLIAMS COMPANIES INC

Williams’ Consolidated Overview

The following table and discussion is a summary of Williams’ consolidated results of operations for the three years ended December 31, 2024, and should be read in conjunction with the results of operations by segment, as discussed in further detail following this consolidated overview discussion.

•Higher volumes from the November 2023 DJ Basin Acquisitions at the West segment and the January 2024 Gulf Coast Storage, August 2024 Discovery, and February 2023 MountainWest Acquisitions at the Transmission & Gulf of America segment; partially offset by lower volumes from the September 2023 sale of certain liquids pipelines at the Transmission & Gulf of America segment (See Note 3 – Acquisitions and Divestitures),

•Higher revenues associated with expansion projects at the Transmission & Gulf of America segment, partially offset by

•Lower gathering volumes at the West and Northeast G&P segments.

The net sum of Product sales and service revenues – commodity consideration, Product costs and net processing commodity expenses, and net realized gains and losses on commodity derivatives related to sales of product and shrink gas purchases for processing plants for the reportable segments comprise Commodity Margins. Service revenues - commodity consideration represent payments received in the form of commodities for processing services provided. Most of these commodity volumes are sold during the month processed and are offset within Product costs and net processing commodity expenses. The sum of Product sales and net realized gains and losses on commodity derivatives related to the upstream operations comprise Net realized product sales.

The Product sales and service revenues – commodity consideration increase primarily consists of:

•Higher marketing sales activities primarily at the West segment primarily related to the DJ Basin Acquisitions and Transmission & Gulf of America segment primarily related to the Discovery Acquisition, as previously discussed; partially offset by lower marketing sales activities related to NGLs at the Gas & NGL Marketing Services segment, primarily related to activity associated with the sale certain liquids pipelines, as previously discussed. Net natural gas marketing sales were impacted by higher storage costs; partially offset by

•Lower system management gas sales primarily at the Transmission & Gulf of America segment;

•Lower product sales from upstream operations; partially offset by higher volumes from the November 2024 Crowheart Acquisition at Other (See Note 3 – Acquisitions and Divestitures);

•Lower equity NGL sales and commodity consideration revenues associated with NGL production activity primarily at the West segment; partially offset by higher activity in the Transmission & Gulf of America segment primarily due to the Discovery Acquisition, as previously discussed.

As Williams is acting as agent for natural gas marketing customers, its natural gas marketing product sales are presented net of the related costs of those activities within the Gas & NGL Marketing Services segment.

Net gain (loss) from commodity derivatives includes realized and unrealized gains and losses from derivative instruments reflected within Total revenues primarily in the Gas & NGL Marketing Services and West segments, and at Other (see Note 17 – Commodity Derivatives).

Williams experiences significant earnings volatility from the fair value accounting required for the derivatives used to hedge a portion of the economic value of the underlying transportation and storage capacity portfolios as well as upstream-related production. However, the unrealized fair value measurement gains and losses are generally offset by valuation changes in the economic value of the underlying production or transportation and storage capacity contracts, which are not recognized until the underlying transaction occurs.

The Product costs and net processing commodity expenses increase primarily consists of:

•Higher marketing activities primarily at the West segment primarily related to the DJ Basin Acquisitions and Transmission & Gulf of America segment primarily related to the Discovery Acquisition, as previously discussed; partially offset by lower marketing activities primarily related to NGLs at the Gas & NGL Marketing Services segment; partially offset by

•Lower shrink natural gas purchases and commodity consideration costs associated with Williams’ equity NGL production activities primarily at the West segment.

Operating and maintenance expenses increased primarily due to operating costs of the assets acquired at the West and Transmission & Gulf of America segments; as well as unfavorable changes in employee-related costs, including the impact of a change in a practice related to payroll timing; and the net imbalance liability due to changes in pricing.

Depreciation and amortization expenses increased primarily related to the assets acquired at the Transmission & Gulf of America and West segments and an increase at Transco related to additional assets placed in service. The increase is partially offset by lower amortization of intangibles related to the acquisition of Sequent Energy Management, L.P. and Sequent Energy Canada, Corp. (Sequent) in 2021.

Selling, general, and administrative expenses increased primarily due to employee-related costs, including the impact of a change in a practice related to payroll timing, partially offset by lower acquisition and transition-related costs associated with the MountainWest Acquisition (see Note 3 – Acquisitions and Divestitures).

Gain on sale of business reflects a gain from the sale of certain liquids pipelines in the Transmission & Gulf of America segment in 2023, as previously discussed.

Other (income) expense – net within Operating income (loss)includes lower project feasibility costs at our Transmission & Gulf of America segment; partially offset by the absence of a 2023 gain related to a contract settlement.

Equity earnings (losses) changed unfavorably primarily due to the impacts of the consolidation of RMM and Discovery, as previously discussed, and the sale of the interests in Aux Sable (see Note 8 – Investing Activities), partially offset by the absence of the share of a loss contingency accrual in 2023 at Aux Sable and favorable results at OPPL.

Other investing income (loss) – net includes gains on the sale of the interests in Aux Sable and the gain on remeasuring the existing equity-method investment in Discovery to fair value with the acquisition of the remaining 40 percent ownership, as previously discussed, partially offset by the absence the 2023 gain on remeasuring the existing equity-method investment in RMM to fair value with the acquisition of the remaining 50 percent ownership (see Note 8 – Investing Activities).

The increase in Interest expense was primarily due to Williams’ 2023 and 2024 debt issuances, and imputed interest on deferred consideration obligations related to the DJ Basin and Gulf Coast Storage Acquisitions, as previously discussed, partially offset by 2023 and 2024 debt retirements (see Note 13 – Debt and Banking Arrangements).

Net gain from Energy Transfer litigation judgment resulted from a favorable ruling on the final order and judgment of Williams’ complaint against Energy Transfer in 2023 (see Note 1 – General, Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies).

Provision (benefit) for income taxes changed favorably primarily due to lower pre-tax income and a higher benefit associated with decreases in Williams’ estimate of the state deferred income tax rate in both periods. See Note 6 – Provision (Benefit) for Income Taxes for a discussion of the effective tax rate compared to the federal statutory rate for both periods.

Income (loss) from discontinued operations in 2023 includes a pre-tax charge of $125 million to increase the accrued liability associated with the Alaska refinery contamination litigation, partially offset by the related income tax effect (see Note 1 – General, Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies).

•Higher volumes from acquisitions at the Transmission & Gulf of America segment;

•Higher volumes and rates at the Northeast G&P segment; partially offset by

•Lower rates, partially offset by higher volumes at the West segment.

The Product sales and service revenues – commodity consideration decrease primarily consists of:

•Lower marketing sales activities at the Gas & NGL Marketing Services segment;

•Lower sales from upstream operations at Other;

•Lower equity NGL sales prices primarily at the West and Transmission & Gulf of America segments;

•Lower system management gas sales primarily at the West and Transmission & Gulf of America segments.

Net gain (loss) from commodity derivatives includes realized and unrealized gains and losses from derivative instruments reflected within Total revenues primarily in the Gas & NGL Marketing Services and West segments, and at Other.

The Product costs and net processing commodity expenses decrease primarily consists of:

•Lower marketing activities at the Gas & NGL Marketing Services segment;

•Lower costs associated with NGLs acquired as commodity consideration related to Williams’ equity NGL production activities;

•Lower system management gas purchases primarily at the West and Transmission & Gulf of America segments.

•Unfavorable change in unrealized gains and losses from commodity derivatives related to processing plant shrink gas purchases;

•Partially offset by lower natural gas purchases due to lower prices associated with Williams’ equity NGL production activities primarily at the West and Transmission & Gulf of America segments.

Operating and maintenance expenses increased primarily due to higher operating costs, including increased costs associated with the February 2023 MountainWest Acquisition, the April 2022 Trace Acquisition, and the August 2022 NorTex Asset Purchase, and increased scope and timing of operating and maintenance activities.

Depreciation and amortization expenses increased primarily related to the upstream assets, and assets acquired in the February 2023 MountainWest Acquisition, the April 2022 Trace Acquisition, and the August 2022 NorTex Asset Purchase. The increase is partially offset by lower amortization of intangibles related to the acquisition of Sequent in 2021.

Selling, general, and administrative expenses increased primarily due to acquisition and transition-related costs associated with the MountainWest Acquisition.

Gain on sale of business resulted from the sale of certain liquids pipelines in the Gulf Coast region, as previously discussed.

Other (income) expense – net within Operating income (loss)changed favorably primarily due to:

•A favorable change associated with regulatory liabilities established for the impacts of deferred income taxes at NWP and the absence of 2022 regulatory charges associated with a decrease in Transco’s estimated deferred state income tax rate;

•The absence of a 2022 loss related to Eminence storage cavern abandonments;

•A 2023 gain related to a contract settlement.

Equity earnings (losses) changed unfavorably primarily due to a decrease at Laurel Mountain and the share of a loss contingency accrual related to the 14 percent ownership in Aux Sable, partially offset by increases at Blue Racer and OPPL.

The favorable change in Other investing income (loss) – net includes higher interest income earned on higher cash and cash equivalent balances, and a gain on remeasuring the existing equity-method investment in RMM, as previously discussed.

The increase in Interest expense was primarily due to Williams’ 2023 debt issuances and MountainWest’s long-term debt, partially offset by an increase in interest capitalized related to ongoing expansion projects.

Net gain from Energy Transfer litigation judgment resulted from a favorable ruling on the final order and judgment of Williams’ complaint against Energy Transfer, as previously discussed.

The favorable change in Other income (expense) – net below Operating income (loss) includes an increase in equity allowance for funds used during construction (equity AFUDC) at the Transmission & Gulf of America segment and the related effects of deferred taxes within Other.

Income (loss) from discontinued operations in 2023 includes a pre-tax charge of $125 million to increase the accrued liability associated with our Alaska refinery contamination litigation, partially offset by the related income tax effect.

Provision (benefit) for income taxes changed unfavorably primarily due to higher pre-tax income, the absence of a benefit related to the release of valuation allowances on deferred income tax assets in 2022, a lower benefit associated with decreases in the Williams’ estimate of the state deferred income tax rate in both periods, and the absence of 2022 federal income tax settlements.

The unfavorable change in Net income (loss) attributable to noncontrolling interests is primarily due to higher results at Cardinal and the Northeast JV.

Period-Over-Period Operating Results – Williams’ Segments

Williams’ chief operating decision maker evaluates segment operating performance based upon Modified EBITDA. Note 19 – Segment Disclosures includes a reconciliation of this non-GAAP measure to Income (loss) before income taxes from continuing operations. Management uses Modified EBITDA because it is an accepted financial indicator used by investors to compare company performance. In addition, management believes that this measure provides investors an enhanced perspective of the operating performance of Williams’ assets. Modified EBITDA should not be considered in isolation or as a substitute for a measure of performance prepared in accordance with GAAP.

(1)Included as a component of Commodity margins.

Transmission & Gulf of America Modified EBITDA increased primarily due to higher Service revenues, partially offset by the absence of a Gain on sale of business, higher Other segment costs and expenses, and lower Proportional Modified EBITDA of equity-method investments.

•A $220 million increase primarily in storage revenues due to the Gulf Coast Storage Acquisition in January 2024 (see Note 3 – Acquisitions and Divestitures);

•A $121 million increase in Transco’s revenues primarily associated with expansion projects and higher park and loan services;

•A $41 million increase primarily in gathering revenues due to the Discovery Acquisition in August 2024 (see Note 3 – Acquisitions and Divestitures);

•A $38 million increase in primarily transportation and storage revenues due to the MountainWest Acquisition in February 2023 (see Note 3 – Acquisitions and Divestitures);

•A $22 million increase in NorTex’s revenues primarily associated with higher storage rates; partially offset by

•A $39 million decrease primarily in transportation revenues due to the sale of certain liquids pipelines in the Gulf Coast region in September 2023 (see Note 3 – Acquisitions and Divestitures);

•A $34 million decrease in the Eastern Gulf region primarily due to shut-ins for producer operational issues at Gulfstar One in the Gunflint and Tubular Bells fields and weather-related events, partially offset by higher primarily production handling volumes from a new well at Gulfstar One in the Pickerel field.

Other segment costs and expenses increased primarily due to:

•Higher operating expenses and administrative costs including higher operating, acquisition and transition costs related to Williams’ Gulf Coast Storage and Discovery Acquisitions, as previously discussed; and employee-related costs, including the impact of a change in a practice related to payroll timing; partially offset by significantly lower acquisition and transition costs related to Williams’ MountainWest Acquisition, as previously discussed, contract services at Transco, and operating costs related to the sale of certain liquids pipelines in the Gulf Coast region, as previously discussed;

•Unfavorable change in the amortization of regulatory pension liabilities at Transco; partially offset by

•Lower project feasibility costs;

•A favorable change in equity AFUDC primarily as a result of increased capital expenditures at Williams’ regulated businesses.

Commodity margins increased primarily due to a $19 million increase from Williams’ equity NGLs primarily due to the Discovery Acquisition, as previously discussed.

Gain on sale of business reflects a gain recognized on the sale of certain liquids pipelines in the Gulf Coast region in September 2023, as previously discussed.

Proportional Modified EBITDA of equity-method investments decreased primarily due to lower proportional results as Discovery was consolidated, as previously discussed.

Transmission & Gulf of America Modified EBITDA increased primarily due to higher Service revenues and a Gain on sale of business.

•A $222 million increase due to the acquisition of MountainWest primarily in transportation and storage revenues;

•A $42 million increase due to the NorTex Asset Purchase primarily in storage and transportation revenues;

•A $30 million increase in the Eastern Gulf Coast region primarily due to higher production handling volumes from new wells at Devils Tower, partially offset by lower volumes from the Norphlet pipeline due to natural decline;

•A $15 million increase in Transco’s revenues associated with the Regional Energy Access expansion project placed partially in-service in the fourth quarter of 2023;

•A $12 million increase in Transco’s and Northwest Pipeline’s revenues associated with short-term firm transportation; partially offset by

•A $19 million decrease due to lower rates from the FERC rate case settlement effective January 1, 2023, at Northwest Pipeline;

•A $14 million decrease in reimbursable electric power costs and storage rates, offset by similar changes in electricity charges and storage costs, reflected in Other segment costs and expenses;

•A $10 million decrease due to the sale of certain liquids pipelines in the Gulf Coast region in September 2023 primarily in transportation revenues.

Commodity margins decreased primarily due to a $15 million decrease from Williams’ equity NGLs, driven by unfavorable net realized pricing for equity NGL sales, partially offset by lower prices for natural gas purchases associated with its equity NGL production activities.

Other segment costs and expenses increased primarily due to:

•Higher operating and administrative costs including higher operating, acquisition, and transition costs related to Williams’ MountainWest Acquisition and NorTex Asset Purchase; and higher costs related to timing and scope of general maintenance activities primarily at Transco, partially offset by lower reimbursable electric power costs and storage costs, which are offset by a similar change in electricity reimbursements and storage revenues reflected in Service revenues; and lower employee-related costs;

•Higher project feasibility costs; partially offset by

•Favorable changes associated with regulatory liabilities established for the impacts of deferred income taxes at Northwest Pipeline associated with the FERC rate case settlement mentioned above in Service revenues and the absence of 2022 regulatory charges associated with decreases in Transco’s estimated deferred state income tax rate;

•A favorable change in equity AFUDC as a result of increased capital expenditures at Transco;

•The absence of losses related to Eminence storage cavern abandonments in 2022.

Gain on sale of business reflects a gain recognized on the sale of certain liquids pipelines in the Gulf Coast region in September 2023, as previously discussed.

Northeast G&P

(1)Included as a component of Commodity margins.

Northeast G&P Modified EBITDA increased primarily due to higher Proportional Modified EBITDA of equity-method investments, higher Service revenues, and higher Commodity margins, partially offset by higher Other segment costs and expenses.

•A $20 million increase in revenues at the Northeast JV primarily related to higher gathering volumes as well as higher transportation & fractionation, gathering, and processing rates, partially offset by lower transportation & fractionation and processing volumes;

•A $16 million increase in joint venture operating fees primarily related to assuming operatorship of Blue Racer effective January 1, 2024, (which is significantly offset by higher Other segment costs and expenses discussed below);

•An $11 million increase in revenues associated with reimbursable expenses, which is offset by similar changes in the charges reflected in Other segment costs and expenses; partially offset by

•A $19 million decrease in gathering revenues at Susquehanna Supply Hub primarily related to lower volumes partially offset by escalated rates;

•A $16 million decrease in gathering revenues in the Utica Shale region primarily related to lower volumes at Flint and Cardinal partially offset by escalated rates.

Commodity margins increased due to a restructured gas purchase deal in 2024 which allowed for margin gain on residue pricing and liquids from fixed recoveries. In addition, Williams was not significantly impacted by system constraints which impacted margins in 2023.

Other segment costs and expenses increased primarily due to higher employee-related costs, including the impact of a change in a practice related to payroll timing, as well as higher operating expenses, including higher electricity and fuel, and increased support costs related to assuming operatorship of Blue Racer effective January 1, 2024 (substantially offset by higher Service revenues discussed above). The increase was partially offset by lower maintenance expenses and the absence of the 2023 loss contingency accrual.

Proportional Modified EBITDA of equity-method investments increased at Aux Sable Liquid Products LP primarily due to the absence of Williams’ $31 million share of a loss contingency accrual related to its former ownership in 2023, as well as the terms of the new product marketing agreement, partially offset by the sale of Williams’ investment in Aux Sable Liquid Products LP in the third quarter of 2024. Additionally, Appalachia Midstream Investments increased primarily driven by higher gathering rates partially offset by lower volumes and higher expenses.

Northeast G&P Modified EBITDA increased primarily due to higher Service revenues, partially offset by lower Proportional Modified EBITDA of equity-method investments and higher Other segment costs and expenses.

•A $92 million increase in revenues at the Northeast JV primarily related to higher transportation & fractionation, processing, and gathering volumes as well as higher processing rates;

•An $84 million increase in revenues in the Utica Shale region primarily related to higher gathering rates resulting from annual cost-of-service contract redeterminations and higher volumes, partially offset by the absence of proceeds from the release of an acreage dedication in 2022;

•A $61 million increase in gathering revenues at Susquehanna Supply Hub primarily related to escalated rates as well as higher volumes.

Other segment costs and expenses increased primarily due to increased scope of operations, a loss contingency accrual, and higher operating taxes.

Proportional Modified EBITDA of equity-method investments decreased at Laurel Mountain due to lower commodity-based gathering rates, MVC, and volumes, and at Aux Sable Liquid Products LP primarily due to Williams’ $31 million share of a loss contingency accrual related to its former ownership in 2023. The decrease was partially offset by an increase at Blue Racer primarily driven by higher gathering and processing volumes. Additionally, Appalachia Midstream Investments increased primarily driven by higher gathering volumes and annual rate escalations at Marcellus South, partially offset by lower gathering rates resulting from annual cost-of-service contract redeterminations and lower volumes at the Bradford Supply Hub.

West

(1) Included as a component of Commodity margins.

West Modified EBITDA increased primarily due higher Service revenuesand Commodity margins, partially offset by higher Other segment costs and expenses, an unfavorable change in Net realized gain (loss) from commodity derivatives relating to service revenues, and lower Proportional Modified EBITDA of equity-method investments.

•A $249 million increase in the DJ Basin region associated with the DJ Basin Acquisitions in November 2023 (see Note 3 – Acquisitions and Divestitures);

•A $35 million increase in other NGL operations associated with higher fractionation and transportation revenue due to higher volumes and higher storage fees primarily due to a new contract;

•A $14 million increase in the Wamsutter region primarily associated with higher gathering volumes from increased producer activity as well as higher volumes associated with the absence of weather-related events in first-quarter 2023;

•A $12 million increase associated with reimbursable compressor power and fuel purchases primarily due to the DJ Basin Acquisitions as previously discussed, which are offset by similar changes in Other segment costs and expenses; partially offset by

•A $45 million decrease in the Haynesville Shale region primarily due to lower gathering volumes from decreased producer activity, partially offset by higher gathering rates;

•A $31 million decrease in the Eagle Ford Shale region primarily due to lower MVC revenues;

•A $24 million decrease in the Barnett Shale region primarily due to lower gathering rates driven by unfavorable commodity pricing and lower gathering volumes.

Net realized gain (loss) from commodity derivatives relating to service revenues reflects an unfavorable change in settled commodity prices relative to Williams’ natural gas hedge positions.

Commodity margins increased $63 million primarily due to $39 million higher margins associated with the DJ Basin Acquisitions, as previously discussed. Margins also increased $21 million from Williams’ equity NGLs primarily due to lower net realized prices for natural gas purchases and lower volumes of natural gas purchased both associated with equity NGL production activities; partially offset by lower volumes of equity NGL sold and lower net realized NGL sales prices.

Other segment costs and expenses increased primarily due to higher operating and employee-related expenses including those resulting from the DJ Basin Acquisitions, as previously discussed, the absence of favorable contract settlements in first-quarter 2023, an unfavorable change in Williams’ net imbalance liability due to changes in pricing, higher reimbursable compressor power and fuel purchases which are offset in Service revenues, and the impact of a change in a practice related to payroll timing; partially offset by higher system gains and the absence of a fourth quarter 2023 write-down of assets held for sale.

Proportional Modified EBITDA of equity-method investments decreased primarily due to lower proportional results as RMM was consolidated related to the DJ Basin Acquisitions, as previously discussed, partially offset by higher volumes and higher commodity prices at OPPL.

West Modified EBITDA increased primarily due to a favorable change in Net realized gain (loss) from commodity derivatives relating to service revenues, higher Proportional Modified EBITDA of equity-method investments, and lower Other segment costs and expenses, partially offset by lower Commodity marginsand Service revenues.

Service revenues decreased primarily due to:

•A $120 million decrease in the Barnett Shale region primarily due to lower gathering rates driven by unfavorable commodity pricing;

•A $13 million decrease in the Eagle Ford Shale region primarily due to lower MVC revenues, partially offset by escalated gathering rates and higher gathering volumes;

•A $6 million decrease associated with reimbursable compressor power and fuel purchases primarily due to lower prices, which are offset by similar changes in Other segment costs and expenses; partially offset by

•A $69 million increase in the Haynesville Shale region primarily associated with higher gathering volumes including from increased producer activity and the Trace Acquisition in April 2022, partially offset by lower rates driven by unfavorable commodity pricing;

•A $25 million increase in the DJ Basin region primarily associated with the DJ Basin Acquisitions in November 2023 as previously discussed;

•A $15 million increase in our other NGL operations associated with higher storage fees primarily due to a new contract as well as higher fractionation fees primarily due to higher volumes partially offset by lower rates from lower natural gas prices.

Net realized gain (loss) from commodity derivatives relating to service revenues reflects a favorable change in settled commodity prices relative to Williams’ natural gas hedge positions.

Commodity margins decreased $68 million primarily due a $46 million decrease from Williams’ equity NGLs and a $14 million decrease from other sales activities, both primarily due to lower net realized commodity pricing.

Other segment costs and expenses decreased primarily due to a favorable change in Williams’ net imbalance liability due to changes in pricing, favorable contract settlements in first-quarter 2023, lower corporate allocations, and lower reimbursable compressor power and fuel purchases which are substantially offset in Service revenues. These items were partially offset by higher operating expenses related to operations including those acquired in the Trace Acquisition and the DJ Basin Acquisitions, lower system gains at Wamsutter, and a fourth quarter 2023 write-down of assets held for sale.

Proportional Modified EBITDA of equity-method investments increased primarily due to higher volumes at OPPL as well as higher volumes at RMM, partially offset by lower proportional results as RMM was consolidated related to the DJ Basin Acquisitions.

Gas & NGL Marketing Services

(1) Included as a component of Commodity margins.

Gas & NGL Marketing Services Modified EBITDA decreased primarily due to an unfavorable change in Net unrealized gain (loss) from commodity derivative instruments and lower Commodity margins.

Commodity margins decreased $64 million primarily due to:

•A $44 million decrease in Williams’ natural gas marketing margins including $35 million of lower natural gas transportation capacity marketing margins due to less favorable net realized pricing spreads. The decrease in its natural gas marketing margins also includes $9 million of lower natural gas storage marketing margins primarily driven by higher storage fees and less favorable realized derivative gains, partially offset by a favorable change of $14 million in lower cost or net realizable value inventory adjustment;

•A $20 million decrease in Williams’ NGL marketing margins including an unfavorable change in net realized gains and losses on sale of inventory in 2024 compared to 2023 driven by unfavorable changes in non-ethane prices.

The change in Net unrealized gain (loss) from commodity derivative instruments within Segment revenues and Net processing commodity expenses relates to derivative contracts that are not designated as hedges for accounting purposes. The change from 2023 is primarily due to a change in forward commodity prices relative to Williams’ hedge positions in 2024 compared to 2023.

Gas & NGL Marketing Services Modified EBITDA increased primarily due to a favorable change in Net unrealized gain (loss) from commodity derivative instruments within Segment revenuesand higher Commodity margins, partially offset by an unfavorable change in Net unrealized gain (loss) from commodity derivative instruments within Net processing commodity expenses.

Commodity margins increased $66 million primarily due to:

•A $65 million increase from Williams’ natural gas marketing operations including $129 million of higher natural gas storage marketing margins primarily driven by a favorable change of $111 million in lower of cost or net realizable value adjustment; and the absence of a $15 million charge related to the remaining recognition of a purchase accounting inventory fair value adjustment in 2022. The increase in its natural gas marketing margins was partially offset by $64 million of lower natural gas transportation capacity marketing margins due to less favorable net realized pricing spreads;

•A $1 million increase in Williams’ NGL marketing margins including a $20 million favorable change in lower of cost or net realizable value inventory adjustments, partially offset by higher transportation and fractionation fees and an unfavorable change in net realized gains and losses on sale of inventory in 2023 compared to 2022 driven by an unfavorable change in NGL prices.

Net unrealized gain (loss) from commodity derivative instruments within Segment revenues and Net processing commodity expenses. The change from 2022 is primarily due to a change in forward commodity prices relative to Williams’ hedge positions in 2023 compared to 2022.

Other

(1) Included as a component of Net realized product sales.

Modified EBITDA from upstream operations, corporate, and other business activities decreased primarily due to:

•A $34 million decrease in Net realized product sales from upstream operations primarily due to lower volumes and lower net realized commodity prices associated with Williams’ South Mansfield production in the Haynesville Shale region, and lower net realized commodity prices associated with Williams’ Wamsutter region. These decreases were partially offset by higher production volumes associated with Williams’ Wamsutter region production, including from the Crowheart Acquisition in the fourth quarter of 2024.

•A $27 million unfavorable change in Net unrealized gain (loss) from derivative instruments due to a change in forward commodity prices relative to hedge positions in 2024 compared to 2023;

•A $12 million unfavorable change in other costs and expenses primarily related to upstream operations; and

•The absence of a 2023 gain related to a favorable ruling on the final order and judgement of Williams’ complaint against Energy Transfer reflected in Net gain from Energy Transfer litigation judgment(see Note 1 – General, Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies).

Modified EBITDA from upstream operations, corporate, and other business activities increased primarily due to the Net gain from Energy Transfer litigation judgment, as previously discussed, partially offset by lower results from Williams’ upstream operations, which included the following:

•A $113 million decrease in Net realized product sales primarily due to lower net realized commodity prices, partially offset by higher sales associated with increased production volumes. Higher natural gas production volumes from new wells in the Haynesville Shale region and higher crude oil production volumes from new wells in the Wamsutter region were partially offset by lower natural gas and NGL production volumes in the Wamsutter region driven by the impact of severe winter weather in 2023;

•A $24 million unfavorable change in Net unrealized gain (loss) from derivative instruments due to a change in forward commodity prices relative to Williams’ hedge positions in 2023 compared to 2022; partially offset by

•An increase in Other costs and expenses associated with upstream operations primarily due to increased production volumes and expenses related to severe winter weather in 2023, partially offset by lower associated ad valorem and production taxes, which were impacted by lower commodity prices and lower natural gas and NGL production volumes in the Wamsutter region.

Other costs and expenses not associated with upstream operations decreased primarily due to the absence of an $11 million charge related to an accrual for loss contingency in the third quarter of 2022 and a $19 million favorable change associated with regulatory assets related to the effects of deferred taxes on equity funds used during construction.