What is the primary financial impact of this 8-K on Williams Companies, Inc. (WMB)?

The primary financial impact is the resolution of liabilities associated with its subsidiary, Williams Communications Group, Inc. (WCG), and the elimination of most pre-October 15, 2002 claims against WMB. The company also received $180 million from Leucadia for claims and is receiving notes for the sale of the Williams Technology Center, though these are subject to escrow conditions.

What are the terms of the notes WMB received for the Williams Technology Center?

WMB received a $100 million seven-and-a-half-year promissory note at 7% interest and a $74,360,295.30 four-year promissory note with capitalized interest at escalating rates from 10% to 16%. Both notes are secured by the Williams Technology Center and certain other collateral.

What is the role of Leucadia National Corporation in this filing?

Leucadia National Corporation purchased certain of Williams Companies' claims against WCG for $180 million. A letter of credit issued for Leucadia's benefit in relation to this purchase is held in escrow, pending FCC license approvals.

What are the conditions for the release of escrowed items?

The escrowed items, including a letter of credit and the notes for the Williams Technology Center sale, will be released upon the issuance of permanent licenses by the FCC to WilTel Communications Group, Inc. provided no third-party objections are filed or are resolved to Leucadia's satisfaction. If FCC licenses are not granted by February 28, 2003, or if unresolved objections exist, the escrow unwinds.

WMB 8-K SEC Disclosure — Oct 24, 2002

Summary

This 8-K filing from The Williams Companies, Inc. (WMB) reports on the consummation of Williams Communications Group, Inc. (WCG), a subsidiary, emerging from Chapter 11 bankruptcy on October 15, 2002. The key takeaway for investors is the resolution of significant liabilities and the restructuring of WCG's assets and debts. Williams Companies, Inc. itself is released from most pre-October 15, 2002 causes of action related to WCG, providing a degree of certainty and risk reduction for the parent company. The filing details a multi-faceted plan that includes the sale of certain Williams' claims against WCG to Leucadia National Corporation for $180 million. Furthermore, Williams is selling the Williams Technology Center and related assets to WCG via two promissory notes totaling approximately $174 million (a $100 million long-term note and a $74.4 million short-term note), which are secured by the property. Certain aspects of this plan, including a letter of credit and the notes, are held in escrow pending FCC license approvals for WilTel Communications Group, Inc. (formerly WCG).

Key Highlights

1Williams Communications Group, Inc. (WCG) successfully emerged from Chapter 11 bankruptcy on October 15, 2002.
2The Williams Companies, Inc. (WMB) received mutual releases from WCG and its creditors, barring most pre-October 15, 2002 claims against WMB.
3WMB sold certain of its claims against WCG to Leucadia National Corporation for $180 million.
4WMB sold the Williams Technology Center and related assets to WCG for a $100 million long-term note and a $74.4 million short-term note.
5The long-term note bears 7% interest and is secured by the technology center and other collateral.
6The short-term note has variable interest rates (10-16%) and is also secured by the technology center.
7Key components of the WCG reorganization plan, including a letter of credit and the promissory notes, are held in escrow pending FCC license issuance for WilTel Communications Group, Inc.

WILLIAMS COMPANIES, INC. 8-K Report (Oct 24, 2002)

Summary

Key Highlights

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