WILLIAMS COMPANIES INC

Transco - Results of Operations

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 $38 million increase in Natural gas transportation service revenues primarily due to additional capacity from placing the Regional Energy Access Expansion fully into service in August 2024, the impact of placing the Southside Reliability Enhancement into service in November 2024, higher electric power costs in 2025, and transportation rate increases effective March 1, 2025 partially offset by one less billing day in 2025. 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 $7 million increase in Natural gas storage service revenues primarily due an increase in rates that became effective during the second quarter of 2024 and an increase in rates that became effective March 1, 2025;

•A $6 million decrease in Natural gas product sales due to lower cash-out volumes, partially offset by higher than average cash-out pricing, which directly offsets in Natural gas product costs resulting in no net impact on our results of operations;

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

Operating and maintenance expenses increased primarily due to higher employee-related costs and higher 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.

Depreciation and amortization expenses increased as a result of an increase in depreciation rates effective March 1, 2025, and due to assets and expansion projects placed into service, partially offset by a decrease in ARO related depreciation (offset in Other income (expense) – net resulting in no net impact on Transco’s results of operations).

Other (income) expense – net changed unfavorably primarily driven by an unfavorable change associated with the deferral of ARO related depreciation (offset in Depreciation and amortization expenses resulting in no net impact on Transco’s results of operations), an unfavorable change in the amortization of ARO regulatory assets, an unfavorable change in the amortization of the regulatory pension liabilities, and an unfavorable change associated with disposition of certain project materials.

Interest income decreased due to a decrease in affiliated interest income on our advances to Williams due to a lower note receivable balance during 2025.

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