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WMB Stock FAQ

I've lost my Williams certificate. How do I replace it?

Call our transfer agent, Computershare Trust Company, N.A., at 800-884-4225; 781-575-4706 and request an affidavit of lost certificate. Computershare charges a $50.00 processing fee plus a fee of .03 (3%) of the market value of the missing securities.

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I'm a Williams shareholder and want to change the address or registration on my stock certificate. How do I accomplish that?

Call our transfer agent, Computershare Trust Company, N.A., at 800-884-4225; 781-575-4706.

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How will my taxes be reported?

Williams (NYSE:WMB) pays a quarterly dividend and reports taxes on a Form 1099.

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Does Williams offer a dividend reinvestment program or direct stock purchase?

Our transfer agent does offer these programs. For information, please contact:

Routine shareholder correspondence:
Computershare
PO BOX 505000
Louisville, KY 40233-5000
 
Overnight correspondence:
Computershare
462 South 4th Street Suite 1600
Louisville, KY 40202

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WMB Cost Basis Information

Calculating cost basis information during tax preparation time can be a difficult and time-consuming process. If you are a Williams shareholder and you need a cost-basis calculation, we encourage you to contact your broker if you hold your Williams shares in streetname or Computershare (800.884.4225) if you hold your shares incertificate or book-entry form.

Williams also provides a link to the NetBasis system via a hyperlink below. For a fee, NetBasis will automatically calculate the cost basis for your Williams stock, adjusted for any corporate actions or dividend reinvestments. All you need to use NetBasis are your purchase/acquisition and sale dates, number of shares or dollar amount acquired.

If you have any questions about using NetBasis, you can call their 24/7 customer care call center (1.888.802.2747) or use the Live Web Chat service located on the Help button once you have logged on to the system.

By selecting the NetBasis link below, you will leave the Williams website and will be redirected to the NetBasis system.

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WMB/WPZ Merger FAQ

What will WPZ Public Unitholders be entitled to receive in the Merger? Should holders of WPZ Units deliver their WPZ Units now? Will Williams’ personnel be able to help with my tax-related questions? What are the expected U.S. federal income tax consequences to a WPZ Public Unitholder as a result of the Merger? What are the expected state income tax consequences to the WPZ unitholders resulting from the transaction and how will the transaction affect their state taxes? What are the expected U.S. federal income tax consequences to the WMB stockholders resulting from the transactions and how will the transaction affect their taxes? What tax documents will I receive after the close of the transaction? When should I expect to receive a K-1? What is my tax basis in my new shares of WMB? What consideration did I receive for my WPZ units? Where will WPZ Units trade after the Merger? What happens to future distributions with respect to WPZ Public Units? What are the expected U.S. federal income tax consequences to a WPZ Public Unitholder as a result of the Merger? What are the expected U.S. federal income tax consequences for a WPZ Public Unitholder of the ownership of shares of Williams Common Stock after the Merger is completed? Where can I find more information about the merger? Who do I call if I have further questions about the Merger Agreement, the Merger, the Charter Amendment, or the Stock Issuance? Will Williams or Williams Partners file Form 8937, Report of Organizational Actions Affecting Basis of Securities, as a result of this transaction?

What will WPZ Public Unitholders be entitled to receive in the Merger?

Each WPZ Public Unitholder will be entitled to receive Williams Common Stock in exchange for such holder’s WPZ Public Units at the Exchange Ratio (1.494 shares of Williams Common Stock for each one WPZ Common Unit). If the Exchange Ratio would result in a WPZ Public Unitholder being entitled to receive a fractional share of Williams Common Stock, such holder will receive cash (payable in U.S. dollars, without interest) in lieu of such fractional share in an amount equal to the product obtained by multiplying (1) such fraction by (2) the average of the closing price of Williams Common Stock as reported on the NYSE Composite Transactions Tape (as reported by Bloomberg Financial Markets or such other source as the parties shall agree in writing) over the five-trading-day period ending on the third trading day immediately preceding the effective time of the Merger. For additional information regarding exchange procedures, please read “The Merger Agreement — Exchange of Units; Fractional Units.”

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Should holders of WPZ Units deliver their WPZ Units now?

No. After the Merger is completed, holders of WPZ Units who hold their WPZ Units in certificated or book entry form will receive written instructions for exchanging their WPZ Units. If you own WPZ Units in street name, the shares of Williams Common Stock you will receive in connection with the Merger should be credited to your account in accordance with the policies and procedures of your bank, broker, or other nominee within a few days following the closing date of the Merger.

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Will Williams’ personnel be able to help with my tax-related questions?

Williams’s investor relations department is not staffed by tax personnel and Williams’s personnel do not provide tax advice. If you have tax-related questions, please contact a tax advisor familiar with partnership taxation and specifically the taxation of Master Limited Partnership unitholders.

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What are the expected U.S. federal income tax consequences to a WPZ Public Unitholder as a result of the Merger?

The receipt of Williams Common Stock and any cash in lieu of fractional shares of Williams Common Stock in exchange for WPZ Public Units pursuant to the Merger should be a taxable transaction to U.S. holders (as defined in the section titled “Material U.S. Federal Income Tax Consequences”) for U.S. federal income tax purposes. In such case, a U.S. holder will generally recognize capital gain or loss on the receipt of Williams Common Stock and any cash received in lieu of fractional shares of Williams Common Stock in exchange for WPZ Public Units. However, a portion of this gain or loss, which portion could be substantial, will be separately computed and taxed as ordinary income or loss to the extent attributable to assets giving rise to depreciation recapture or other “unrealized receivables” or to “inventory items” owned by Williams Partners and its subsidiaries. Passive losses that were not deductible by a U.S. holder in prior taxable periods because they exceeded a U.S. holder’s share of Williams Partners’ income may become available to offset a portion of the gain recognized by such U.S. holder.

You can estimate your gain or loss from the transaction through the following process. This calculation is an estimate only. You will not be able to calculate your actual, final tax effect from this transaction until you receive your final Schedule K-1 and supporting materials (expected to be delivered in March, 2019).

  1. Calculate your estimated consideration received in the transaction by multiplying the number of WPZ units you own by 1.494 to estimate the number of whole shares and cash in lieu of fractional shares of WMB common stock you will receive. Multiply the number of whole shares by the closing price of WMB stock on the transaction close date, $31.79 per share, to determine the estimated “sales price.”
  2. If the exchange ratio from Step 1 results in a fractional share of WMB common stock, you will receive cash in lieu of the fractional share. No fractional shares of WMB common stock will be issued. Cash in lieu of fractional shares will be computed by multiplying the fractional interest by the average of the closing WMB share price over the five-trading-day period ending on the third trading day immediately preceding the transaction closing date (such average price calculated to be $31.02 per share). Add cash received in lieu of fractional shares to the “sales price.”
  3. Reduce the “sales price” by your estimated adjusted tax basis in WPZ units. Your ending capital account amount outlined on your December 31, 2017 Schedule K-1 may provide an approximation of your ending tax basis for all units owned at December 31st. The ending capital account amount includes your original cost of units, as reported to WPZ by your broker and other adjustments affecting tax basis. However, brokers do not always report original cost or the original cost reported may be incorrect. Any incomplete or incorrect reporting by the broker can cause the ending capital account to be incorrect.
  4. Further reduce this basis number at December 31, 2017, by any WPZ distributions you receive in 2018.
  5. Any 2018 WPZ taxable income or loss before the transaction will also be allocable to you. Taxable losses allocable to you will reduce your basis and increase your realized gain on the transaction, while any taxable income allocable to you will increase your basis and decrease your realized gain on the transaction.
  6. Any ordinary gain generated from the transaction may be reduced by any passive loss carryforwards, to the extent such passive loss carryforwards are available.

The tax consequences of the transaction to each WPZ unitholder will be unique and depend on the WPZ unitholder's particular facts and circumstances. You should consult your own tax advisor to determine the specific consequences to you of the transaction, including under the laws of any applicable state, local or foreign jurisdiction, and under any applicable U.S. federal laws other than those pertaining to income taxes.

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What are the expected state income tax consequences to the WPZ unitholders resulting from the transaction and how will the transaction affect their state taxes?

The taxable transaction should have state income tax consequences. Your most recent Schedule K-1 will report state apportionment factors to help estimate your state income tax impact. You should consult your own tax advisor to determine the specific consequences to you of the transaction.

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What are the expected U.S. federal income tax consequences to the WMB stockholders resulting from the transactions and how will the transaction affect their taxes?

The transaction will not have any tax consequences for WMB stockholders that do not own any WPZ units.

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What tax documents will I receive after the close of the transaction? When should I expect to receive a K-1?

WPZ unitholders: WPZ unitholders will receive a final Schedule K-1 and supporting materials (expected to be delivered in March, 2019). WPZ unitholders should also receive a Form 1099-B from their broker.

WMB stockholders: You will not receive any tax documents as a result of the transaction.

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What is my tax basis in my new shares of WMB?

A U.S. holder’s tax basis in any shares of WMB common stock received in the transaction should equal the closing WMB share price on the transaction close date, August 10, 2018. The WMB closing share price on August 10, 2018 was $31.79. A U.S. holder’s holding period for any shares of WMB common stock received in the transaction on August 10, 2018, begins August 10, 2018.

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What consideration did I receive for my WPZ units?

In general, holders of WPZ units received 1.494 shares of WMB common stock for each WPZ unit. However, no fractional shares of WMB common stock were issued. Instead, holders of WPZ units received cash in lieu of fractional shares.

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Where will WPZ Units trade after the Merger?

WPZ Units will no longer be publicly-traded following the Merger and will be delisted from the NYSE.

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What happens to future distributions with respect to WPZ Public Units?

If the Merger is successfully consummated, all outstanding WPZ Public Units will be converted into the right to receive Williams Common Stock at the Exchange Ratio and will no longer receive quarterly distributions from Williams Partners. For a description of the differences between the rights of holders of Williams Common Stock and holders of WPZ Units, please read “Comparison of Rights of Williams Stockholders and WPZ Unitholders.”

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What are the expected U.S. federal income tax consequences to a WPZ Public Unitholder as a result of the Merger?

The receipt of Williams Common Stock and any cash in lieu of fractional shares of Williams Common Stock in exchange for WPZ Public Units pursuant to the Merger should be a taxable transaction to U.S. holders (as defined in the Williams and Williams Partners joint consent statement/proxy statement/prospectus section titled “Material U.S. Federal Income Tax Consequences”) for U.S. federal income tax purposes. In such case, a U.S. holder will generally recognize capital gain or loss on the receipt of Williams Common Stock and any cash received in lieu of fractional shares of Williams Common Stock in exchange for WPZ Public Units. However, a portion of this gain or loss, which portion could be substantial, will be separately computed and taxed as ordinary income or loss to the extent attributable to assets giving rise to depreciation recapture or other “unrealized receivables” or to “inventory items” owned by Williams Partners and its subsidiaries. Passive losses that were not deductible by a U.S. holder in prior taxable periods because they exceeded a U.S. holder’s share of Williams Partners’ income may become available to offset a portion of the gain recognized by such U.S. holder. See the section titled “Material U.S. Federal Income Tax Consequences” for a more complete discussion of certain U.S. federal income tax consequences of the Merger.

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What are the expected U.S. federal income tax consequences for a WPZ Public Unitholder of the ownership of shares of Williams Common Stock after the Merger is completed?

Williams is classified as a corporation for U.S. federal income tax purposes, and thus, Williams (and not its stockholders) is subject to U.S. federal income tax on its taxable income. A distribution of cash by Williams to a stockholder who is a U.S. holder (as defined in the section titled “Material U.S. Federal Income Tax Consequences”) will generally be included in such U.S. holder’s income as ordinary dividend income to the extent of Williams’ current or accumulated “earnings and profits” as determined under U.S. federal income tax principles. Any portion of the cash distributed to Williams Stockholders by Williams after the Merger that exceeds Williams’ current and accumulated earnings and profits will be treated as a non-taxable return of capital reducing a U.S. holder’s adjusted tax basis in such U.S. holder’s shares of Williams Common Stock and, to the extent the distribution exceeds such stockholder’s adjusted tax basis, as capital gain from the sale or exchange of such shares of Williams Common Stock. See the section titled “Material U.S. Federal Income Tax Consequences” for a more complete discussion of certain U.S. federal income tax consequences of owning and disposing of shares of Williams Common Stock.

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Where can I find more information about the merger?

Williams and Williams Partners joint consent statement/proxy statement/prospectus providing detailed information about the proposed Merger may be accessed on the SEC website here.

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Who do I call if I have further questions about the Merger Agreement, the Merger, the Charter Amendment, or the Stock Issuance?

If WPZ Unitholders or Williams Stockholders have further questions or if they would like additional copies, without charge, of this document, they may call Williams Partners’ or Williams’ Investor Relations Departments at 800-600-3782, or may contact OKAPI Partners LLC (“Okapi”), which is acting as Williams’ proxy solicitation agent in connection with the Williams Special Meeting, by phone at (888) 785-6617 or email at williamsinfo@okapipartners.com.

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Will Williams or Williams Partners file Form 8937, Report of Organizational Actions Affecting Basis of Securities, as a result of this transaction?

No. Form 8937 is required when an organizational action affects the basis of holders of a security or holders of a class of the security. For this purpose, a security includes a share of stock in a corporation but not a unit in a partnership. The transaction is a taxable exchange of WPZ units for Williams Common Stock. WPZ unitholder’s basis in their Williams Common Stock received in the exchange will be the WMB closing share price on August 10, 2018. The basis of Williams Common Stock in the hands of previous WMB shareholders is unchanged, therefore no Form 8937 is required.

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