8-KAcquisitions & DispositionsMaterial AgreementsRegulation FD+1

WILLIAMS COMPANIES, INC. 8-K Report, Material Agreement (Jul 1, 2014)

Filed July 1, 2014For Securities:WMB

Summary

Williams Companies, Inc. (WMB) has filed an 8-K report detailing significant financial and operational updates as of June 27, 2014. The company entered into an amendment to its credit agreement, which includes adjustments to covenants related to debt-to-EBITDA ratios and the treatment of certain master limited partnerships (MLPs). Notably, the amendment allows for higher debt-to-EBITDA thresholds under specific acquisition scenarios and introduces provisions for merging Williams Partners L.P. and Access Midstream Partners, L.P. (ACMP). Furthermore, WMB announced the completion of a substantial acquisition on July 1, 2014, purchasing a significant ownership stake in ACMP from GIP for approximately $5.995 billion in cash. This acquisition involves common units, convertible Class B units of ACMP, and a 50% interest in its general partner, Access Midstream Ventures, L.L.C. These events signal a period of strategic growth and potential integration for Williams Companies.

Key Highlights

  • 1Williams Companies amended its First Amended & Restated Credit Agreement to modify financial covenants and MLP-related provisions.
  • 2The amendment raises the maximum permitted debt-to-EBITDA ratio to 5.50:1.00 following acquisitions exceeding $50 million and for two subsequent quarters.
  • 3A standard debt-to-EBITDA ratio of 4.75:1.00 remains in effect for other periods.
  • 4The credit agreement amendment allows for the potential merger or combination of Williams Partners L.P. and Access Midstream Partners, L.P. (ACMP).
  • 5Williams Companies completed the acquisition of a significant portion of ACMP's equity, including common and convertible Class B units, and a 50% interest in its general partner.
  • 6The total cash consideration for the ACMP acquisition was approximately $5.995 billion.
  • 7The company is required to file financial statements and pro forma information for the acquired business in a subsequent amendment.

Frequently Asked Questions

The Credit Agreement was amended to adjust the calculation of debt and EBITDA for 'Designated MLPs' (like Williams Partners L.P. and ACMP), increase the maximum allowable debt-to-EBITDA ratio to 5.50:1.00 after significant acquisitions, and permit the consolidation of Williams Partners L.P. and ACMP.

Williams Companies acquired 48,742,361 Common Units and 6,340,022 Convertible Class B Units of Access Midstream Partners, L.P. (ACMP), along with a 50% interest in its general partner, for approximately $5.995 billion in cash.

The acquisition represents a major strategic move, significantly increasing Williams Companies' stake and control in ACMP, a key player in the midstream energy sector. This move could pave the way for further integration and operational synergies, potentially enhancing the company's overall portfolio and cash flow generation.

The financial statements and pro forma financial information related to the acquired business will be filed in a subsequent amendment to this Form 8-K report, as they were not included in this initial filing.