Williams Companies
Encyclopedia
The Williams Companies, Inc. is an energy company based in Tulsa, Oklahoma
. Its core business is natural gas
exploration, production, processing, and transportation, with additional petroleum and electricity generation
assets. A Fortune 200
company, its common stock is a component of the S&P 500
and the Dow Jones Utility Average
.
, and soon expanded to building nationwide pipelines for natural gas and petroleum. The company relocated to Tulsa in 1919.
The company went public in 1957 under the Williams Brothers name. As it diversified in the 1970s, it was renamed The Williams Companies, Inc. Since 1997, their brand identity has been simplified to "Williams".
In 1966, Williams bought the then-largest petroleum products pipeline in America, known as the Great Lakes Pipe Line Company, for about $287 million. In 1982, it expanded into natural gas transportation with the purchase of Northwest Energy Company, and extended their reach to the East Coast with the 1995 purchase of Transco Energy Company.
In 2001, Williams acquired Barrett Resources, which provided them with additional national gas reserves.
In 2002, the company found itself in financial distress
due to changed market conditions and the large debt of its subsidiary Williams Communications Group. The company obtained and paid off an emergency high interest loan from Warren Buffett
to stay out of bankruptcy
, and redirected its focus toward natural gas production, processing, and transportation as well as increasing its resource holdings. One of the moves it made around that time (2004) was the sale of 3 of Canada's largest natural gas treatment plants (extracts natural gas liquids from it) to Inter Pipeline Fund
for US$540 million.
In 2010, the company underwent a major restructuring that included a reorganization of its extensive pipeline holdings in Williams Partners LP. On October 2010, Williams and Williams Partners L.P. announced that Chairman and Chief Executive Officer Steve Malcolm will retire at the end of the year. The Board of Directors at Williams said it has elected Alan Armstrong to succeed Malcolm as CEO effective January 3, 2011. Armstrong has served as senior vice president of Williams since 2002.
On Feb. 16, 2011 Williams' board of directors has approved pursuing a plan to separate the company's businesses into two stand-alone, publicly traded corporations. The plan calls for Williams to separate its exploration and production business via an initial public offering (IPO) in third-quarter 2011 of up to 20 percent of its interest and, in 2012, a tax-free spinoff to Williams shareholders of its remaining interest.
) and the second was spun off in 2001 as Williams Communications (which would become WilTel Communications
and later consolidate into Level 3 Communications
).
Tulsa, Oklahoma
Tulsa is the second-largest city in the state of Oklahoma and 46th-largest city in the United States. With a population of 391,906 as of the 2010 census, it is the principal municipality of the Tulsa Metropolitan Area, a region with 937,478 residents in the MSA and 988,454 in the CSA. Tulsa's...
. Its core business is natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
exploration, production, processing, and transportation, with additional petroleum and electricity generation
Electricity generation
Electricity generation is the process of generating electric energy from other forms of energy.The fundamental principles of electricity generation were discovered during the 1820s and early 1830s by the British scientist Michael Faraday...
assets. A Fortune 200
Fortune 500
The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 U.S. closely held and public corporations as ranked by their gross revenue after adjustments made by Fortune to exclude the impact of excise taxes companies collect. The list includes publicly and...
company, its common stock is a component of the S&P 500
S&P 500
The S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock...
and the Dow Jones Utility Average
Dow Jones Utility Average
The Dow Jones Utility Average is a stock index from Dow Jones Indexes that keeps track of the performance of 15 prominent utility companies.-Components:...
.
History
It was founded as Williams Brothers in 1908 by Miller and David Williams in Fort Smith, ArkansasFort Smith, Arkansas
Fort Smith is the second-largest city in Arkansas and one of the two county seats of Sebastian County. With a population of 86,209 in 2010, it is the principal city of the Fort Smith, Arkansas-Oklahoma Metropolitan Statistical Area, a region of 298,592 residents which encompasses the Arkansas...
, and soon expanded to building nationwide pipelines for natural gas and petroleum. The company relocated to Tulsa in 1919.
The company went public in 1957 under the Williams Brothers name. As it diversified in the 1970s, it was renamed The Williams Companies, Inc. Since 1997, their brand identity has been simplified to "Williams".
In 1966, Williams bought the then-largest petroleum products pipeline in America, known as the Great Lakes Pipe Line Company, for about $287 million. In 1982, it expanded into natural gas transportation with the purchase of Northwest Energy Company, and extended their reach to the East Coast with the 1995 purchase of Transco Energy Company.
In 2001, Williams acquired Barrett Resources, which provided them with additional national gas reserves.
In 2002, the company found itself in financial distress
Financial distress
Financial distress is a term in Corporate Finance used to indicate a condition when promises to creditors of a company are broken or honored with difficulty. Sometimes financial distress can lead to bankruptcy...
due to changed market conditions and the large debt of its subsidiary Williams Communications Group. The company obtained and paid off an emergency high interest loan from Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
to stay out of bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
, and redirected its focus toward natural gas production, processing, and transportation as well as increasing its resource holdings. One of the moves it made around that time (2004) was the sale of 3 of Canada's largest natural gas treatment plants (extracts natural gas liquids from it) to Inter Pipeline Fund
Inter Pipeline Fund
Inter Pipeline Fund is a multinational petroleum transportation and infrastructure limited partnership that is among North America's leading natural gas and NGL's extraction businesses...
for US$540 million.
In 2010, the company underwent a major restructuring that included a reorganization of its extensive pipeline holdings in Williams Partners LP. On October 2010, Williams and Williams Partners L.P. announced that Chairman and Chief Executive Officer Steve Malcolm will retire at the end of the year. The Board of Directors at Williams said it has elected Alan Armstrong to succeed Malcolm as CEO effective January 3, 2011. Armstrong has served as senior vice president of Williams since 2002.
On Feb. 16, 2011 Williams' board of directors has approved pursuing a plan to separate the company's businesses into two stand-alone, publicly traded corporations. The plan calls for Williams to separate its exploration and production business via an initial public offering (IPO) in third-quarter 2011 of up to 20 percent of its interest and, in 2012, a tax-free spinoff to Williams shareholders of its remaining interest.
Telecommunications
The company helped to get the modern telecommunications industry off the ground by running fiber optic cable through its decommissioned pipelines. It built two nationwide networks, which have since become their own companies; the first was sold in 1995 to LDDS (which would become WorldCom & then MCIMCI Inc.
MCI, Inc. is an American telecommunications subsidiary of Verizon Communications that is headquartered in Ashburn, Virginia...
) and the second was spun off in 2001 as Williams Communications (which would become WilTel Communications
WilTel Communications
WilTel Communications is a telco and Tier 2 Internet Service Provider with its own MPLS-enabled OC-192 optical wave division multiplexing backbone network...
and later consolidate into Level 3 Communications
Level 3 Communications
Level 3 Communications is a telecommunications and Internet service provider headquartered in Broomfield, Colorado.It operates a Tier 1 network. The company provides core transport, IP, voice, video and content delivery for most of the medium to large Internet carriers in North America and Europe...
).