SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: May 16, 2003
(Date of earliest event reported)
The Williams Companies, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-4174 73-0569878
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(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
One Williams Center Tulsa, Oklahoma 74172
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (918) 573-2000
Not Applicable
(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets
On May 16, 2003, The Williams Companies, Inc.("Williams") announced
that it completed the sale of its Texas Gas Transmission pipeline to a
subsidiary of Loews Corporation for approximately $1.045 billion, which includes
approximately $795 million in cash and $250 million in existing Texas Gas debt.
The disposition is reflected in the Company's unaudited pro forma financial
information filed as part of this report in Item 7.
Item 7. Financial Statements and Exhibits
(a) Not Applicable
(b) Pro forma financial information
The following unaudited pro forma consolidated balance sheet as of March
31, 2003 gives effect to the divestiture of Texas Gas as if it had occurred on
March 31, 2003. The following unaudited pro forma consolidated statements of
income for the year ended December 31, 2002 and the quarterly period ended March
31, 2003 give effect to the divestiture as if it had occurred on January 1,
2002.
The pro forma information below is provided for informational purposes only
and is not necessarily indicative of what the actual financial position or
results of operations of the Company would have been had the transaction
actually occurred on the dates indicated, nor does it purport to indicate the
future financial position or results of operations of the Company.
THE WILLIAMS COMPANIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2003 (UNAUDITED)
(Dollars in millions, except per-share amounts)
Adjustment to
remove Texas Gas
Historical Balances Other Adjustments Pro forma
---------- ---------------- ----------------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 1,501.1 $ (.2) $ 795.0(a) $ 2,295.9
Restricted cash 323.1 -- 323.1
Accounts and notes receivable less
allowance 2,589.4 (164.6) 109.3(b) 2,534.1
Inventories 383.4 (13.5) -- 369.9
Derivative assets 7,772.8 -- -- 7,772.8
Margin deposits 853.5 -- -- 853.5
Assets of discontinued operations 205.9 -- -- 205.9
Deferred income taxes 572.9 (15.2) 15.2(d) 572.9
Other current assets and deferred charges 410.3 (6.3) -- 404.0
---------- ---------------- ----------------- ---------
Total current assets 14,612.4 (199.8) 919.5 15,332.1
Restricted cash 216.5 -- -- 216.5
Investments 1,511.0 (.2) -- 1,510.8
Property plant and equipment at cost 19,036.6 (1,264.5) 109.0(c) 17,881.1
Less accumulated depreciation and depletion (4,359.5) 216.9 -- (4,142.6)
---------- ---------------- ----------------- ---------
14,677.1 (1,047.6) 109.0(c) 13,738.5
Derivative assets 2,415.2 -- -- 2,415.2
Goodwill 1,082.5 -- -- 1,082.5
Assets of discontinued operations -- -- -- --
Other assets and deferred charges 927.6 (155.9) -- 771.7
---------- ---------------- ----------------- ---------
Total assets $ 35,442.3 $ (1,403.5) $ 1,028.5 $35,067.3
========== ================ ================= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 967.6 $ -- $ -- $ 967.6
Accounts payable 1,927.3 (16.1) 15.0(b),(e) 1,926.2
Accrued liabilities 1,377.3 (83.9) 39.2(d),(e) 1,332.6
Liabilities of discontinued operations 124.4 -- -- 124.4
Derivative liabilities 7,807.5 -- -- 7,807.5
Long-term debt due within one year 2,304.5 -- -- 2,304.5
---------- ---------------- ----------------- ---------
Total current liabilities 14,508.6 (100.0) 54.2 14,462.8
Long-term debt 10,491.1 (249.7) 10,241.4
Deferred income taxes 2,799.5 (213.6) 213.6(d) 2,799.5
Derivative liabilities 2,023.0 -- -- 2,023.0
Other liabilities and deferred income 1,036.9 (79.5) -- 957.4
Contingent liabilities and commitments
Minority interests in consolidated subsidiaries 430.3 -- -- 430.3
Stockholders' equity:
Preferred stock 271.3 -- 271.3
Common stock 520.8 -- 520.8
Capital in excess of par value 5,186.6 -- 5,186.6
Accumulated deficit (1,710.8) -- (1,710.8)
Accumulated other comprehensive loss (48.3) -- (48.3)
Other (28.1) -- -- (28.1)
---------- ---------------- ----------------- ---------
4,191.5 -- 4,191.5
Less treasury stock (at cost) (38.6) -- -- (38.6)
---------- ---------------- ----------------- ---------
Total stockholders' equity 4,152.9 -- -- 4,152.9
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Total liabilities and stockholders' equity $ 35,442.3 $ (642.8) $ 267.8 $35,067.3
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(a) Represents net cash proceeds
(b) Represents the settlement of intercompany receivable/payable.
(c) Represents the impairment charge recorded in first quarter 2003.
(d) Adjustments for deferred income, ad valorem and other accrued taxes
retained by Williams.
(e) Adjustments for other liabilities that will remain with Williams.
THE WILLIAMS COMPANIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2002 (UNAUDITED)
(Dollars in millions, except per-share amounts)
Historical Adjustments (a) Other Adjustments Pro forma
---------- ------------------ ------------------ ----------
Revenues $ 5,608.4 $ (262.0) $ -- $ 5,346.4
Segment costs and expenses:
Costs and operating expenses 3,653.5 (105.0) 4.4(c) 3,552.9
Selling, general & administrative expenses 723.9 (45.7) -- 678.2
Other expense - net 297.4 .5 -- 297.9
---------- ------------------ ------------------ ----------
Total segment costs and expenses 4,674.8 (150.2) 4.4 4,529.0
General corporate expenses 142.8 (6.6) 6.6(d) 142.8
---------- ------------------ ------------------ ----------
Total operating income 790.8 (105.2) (11.0) 674.6
Interest accrued (1,229.5) 21.4 -- (1,208.1)
Interest capitalized 29.0 (.9) -- 28.1
Interest rate swap loss (124.2) -- -- (124.2)
Investing loss (109.7) (1.5)(e) -- (111.2)
Minority interest in income and preferred
returns of consolidated subsidiaries (79.3) -- -- (79.3)
Other income - net 26.4 (2.1) -- 24.3
---------- ------------------ ------------------ ----------
Loss from continuing operations before income
taxes and cumulative effect of change in
accounting principles (696.5) (88.3) (11.0) (795.8)
Benefit for income taxes (195.0) (34.8)(b) (4.3)(b) (234.1)
---------- ------------------ ------------------ ----------
Loss from continuing operations $ (501.5) $ (53.5) $ (6.7) $ (561.7)
========== ================== ================== ==========
Loss per share from continuing operations:
Basic $ (1.14) $ (1.26)
Diluted $ (1.14) $ (1.26)
Basic weighted-average shares (thousands) 516,793 516,793
Diluted weighted-average shares (thousands) 516,793 516,793
(a) Adjustments in this column represent Texas Gas' results to be removed
from Williams.
(b) Income taxes calculated using 39.4 percent rate.
(c) Adjustments relate to intercompany revenues of Texas Gas that were
previously eliminated.
(d) General corporate expenses allocated to Texas Gas will not necessarily
be directly impacted as a result of the sale of Texas Gas, therefore,
these expenses are assumed to remain with Williams.
(e) Adjustment represents intercompany interest income of Texas Gas.
THE WILLIAMS COMPANIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2003 (UNAUDITED)
(Dollars in millions, except per-share amounts)
Historical Adjustments (a) Other Adjustments Pro forma
---------- ------------------ ------------------ ----------
Revenues $ 5,360.2 $ (83.0) $ .2(c) $ 5,277.4
Segment costs and expenses:
Costs and operating expenses 4,847.7 (25.0) 1.3(c) 4,824.0
Selling, general & administrative expenses 149.4 (6.9) -- 142.5
Other expense - net 113.1 .2 (109.0)(d) 4.3
---------- ------------------ ------------------ ----------
Total segment costs and expenses 5,110.2 (31.7) (107.7) 4,970.8
General corporate expenses 22.9 (1.1) 1.1(e) 22.9
---------- ------------------ ------------------ ----------
Total operating income 227.1 (50.2) 106.8 283.7
Interest accrued (372.8) 5.0 -- (367.8)
Interest capitalized 12.1 (.2) -- 11.9
Interest rate swap loss (2.8) -- -- (2.8)
Investing income 48.0 (1.2)(f) -- 46.8
Minority interest in income of consolidated
subsidiaries (16.1) -- -- (16.1)
Other income - net 22.5 (.5) -- 22.0
---------- ------------------ ------------------ ----------
Loss from continuing operations before income
taxes and cumulative effect of change in
accounting principles (82.0) (47.1) 106.8 (22.3)
Benefit for income taxes (24.3) (18.6)(b) 42.1(b) (.8)
---------- ------------------ ------------------ ----------
Loss from continuing operations $ (57.7) $ (28.5) $ 64.7 $ (21.5)
========== ================== ================== ==========
Loss per share from continuing operations:
Basic $ (.13) $ (.05)
Diluted $ (.13) $ (.05)
Basic weighted-average shares (thousands) 517,652 517,652
Diluted weighted-average shares (thousands) 517,652 517,652
(a) Adjustments in this column represent Texas Gas' results to be removed
from Williams.
(b) Income taxes calculated using 39.4 percent rate.
(c) Adjustments relate to intercompany revenues of Texas Gas (other
companies' costs) that were previously eliminated.
(d) Represents the impairment charge recorded in the first quarter of 2003
related to Texas Gas.
(e) General corporate expenses allocated to Texas Gas will not necessarily
be directly impacted as a result of the sale of Texas Gas, therefore,
these expenses are assumed to remain with Williams.
(f) Adjustment represents intercompany interest income of Texas Gas.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
The Williams Companies, Inc.
Date: May 22, 2003 /s/ Brian K. Shore
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Name: Brian K. Shore
Title: Corporate Secretary