8-KRegulation FDExhibits & Filings

WILLIAMS COMPANIES, INC. 8-K Report, Regulation FD Disclosure (Feb 16, 2011)

Filed February 16, 2011For Securities:WMB

Summary

Williams Companies, Inc. (WMB) announced a significant strategic initiative via an 8-K filing on February 16, 2011. The company's board of directors has approved a plan to separate its businesses into two distinct, publicly traded entities. This separation is set to occur in stages, beginning with an initial public offering (IPO) of up to 20% of its exploration and production (E&P) business in the third quarter of 2011. This will be followed by a tax-free spin-off of the remaining E&P interest to Williams stockholders in 2012. Post-separation, Williams stockholders will hold shares in both the new E&P company and the remaining Williams entity, which will focus on North American natural gas pipeline and midstream infrastructure. In conjunction with this strategic shift, Williams also announced a substantial increase in its quarterly dividend, signaling confidence in its future financial performance and commitment to returning value to shareholders. This plan is subject to customary approvals and conditions.

Key Highlights

  • 1Williams is planning a separation of its business into two independent, publicly traded companies.
  • 2The separation will involve an IPO of up to 20% of the exploration and production (E&P) business in Q3 2011.
  • 3A tax-free spin-off of the remaining E&P interest to shareholders is planned for 2012.
  • 4Post-separation, one company will focus on E&P, while Williams will concentrate on natural gas pipeline and midstream infrastructure.
  • 5Williams announced a 60% increase in its quarterly dividend to $0.20 per share, effective Q1 2011.
  • 6An additional 10% to 15% dividend increase is targeted for the quarterly dividends beginning in June 2012.
  • 7The separation plan is contingent on regulatory approvals, tax rulings, and final board approval.

Frequently Asked Questions

Williams Companies announced its intention to separate its businesses into two distinct, publicly traded companies. This involves creating a separate exploration and production (E&P) company and leaving Williams focused on its natural gas pipeline and midstream infrastructure assets.

The separation will happen in two main phases. First, an initial public offering (IPO) of up to 20% of the E&P business is planned for the third quarter of 2011. Second, the remaining interest in the E&P business will be spun off tax-free to Williams stockholders in 2012.

Williams announced a significant increase in its quarterly dividend by 60%, raising it to $0.20 per share, effective with the first quarter of 2011. Furthermore, the company is targeting an additional 10% to 15% increase for dividends starting in June 2012.

The plan is subject to several conditions, including customary regulatory approvals, obtaining a favorable tax opinion from counsel and/or IRS rulings, the execution of intercompany agreements, finalization of the capital structure for both entities, and final approval from Williams' board of directors.