Stockholders' Equity

12 Months Ended

Dec. 31, 2020

Stockholders' Equity Note [Abstract]

Note 16 – Stockholders' Equity

On January 26, 2021, our board of directors approved a regular quarterly dividend to common stockholders of $0.41 per share payable on March 29, 2021.

Stockholder Rights Agreement

On March 19, 2020, our board of directors approved the adoption of a limited duration stockholder rights agreements (Rights Agreement) and declared a distribution of one preferred stock purchase right for each outstanding share of common stock. The Rights Agreement is intended to protect the interests of us and our stockholders by reducing the likelihood of another party gaining control of or significant influence over us without paying an appropriate premium considering recent volatile markets. Each preferred stock purchase right represents the right to purchase, upon certain terms and conditions, one one-thousandths (.001) of a share of Series C Participating Cumulative Preferred Stock, $1.00 par value per share. Each one-thousandth (.001) of a share of Series C Participating Cumulative Preferred Stock, if issued, would have rights similar to one share of our common stock. The distribution of preferred stock purchase rights occurred on March 30, 2020, to holders of record as of the close of business on that date. The Rights Agreement expires on March 20, 2021. Please see our Current Report on Form 8-K dated March 20, 2020, for additional details of the Rights Agreement.

On August 27, 2020, a purported shareholder filed a putative class action lawsuit in the Delaware Court of Chancery challenging the Rights Agreement. The plaintiff alleges that the individual members of our board of directors breached their fiduciary duties by adopting the Rights Agreement. On September 3, 2020, a purported shareholder filed a separate putative class action lawsuit in the Delaware Court of Chancery, asserting identical claims to the August 27, 2020, lawsuit. Both complaints seek declaratory relief, an injunction against the agreement, and an award of attorneys’ fees and costs, which are not expected to be material. The court consolidated the lawsuits. The trial occurred January 12 through January 14, 2021, and we are awaiting the court’s decision.

Issuance of Preferred Stock

In July 2018, through a wholly owned subsidiary, we contributed 35,000 shares of newly issued Series B Non-Voting Perpetual Preferred Stock (Preferred Stock) to The Williams Companies Foundation, Inc. (a not-for-profit corporation) for use in future charitable and nonprofit causes. The charitable contribution of Preferred Stock was recorded as an expense in the third quarter of 2018. The Preferred Stock was issued for an aggregate value of $35 million and pays non-cumulative quarterly cash dividends when, as and if declared, at a rate of 7.25 percent per year. Our certificate of incorporation authorizes 30 million shares of Preferred Stock, $1 par value per share.

AOCI

The following table presents the changes in AOCI by component, net of income taxes:


	Cash Flow Hedges		Foreign Currency Translation		Pension and Other Post Retirement Benefits		Total
	(Millions)
Balance at December 31, 2019	$	(2)	$	(1)	$	(196)	$	(199)

Other comprehensive income (loss) before reclassifications	(2)		—		81		79
Amounts reclassified from accumulated other comprehensive income (loss)	1		—		23		24
Other comprehensive income (loss)	(1)		—		104		103
Balance at December 31, 2020	$	(3)	$	(1)	$	(92)	$	(96)

Reclassifications out of AOCI are presented in the following table by component for the year ended December 31, 2020:

Component

Reclassifications

Classification

(Millions)

Cash flow hedges:

Energy commodity contracts

Product sales

Pension and other postretirement benefits:

Amortization of actuarial (gain) loss and net actuarial loss from settlements included in net periodic benefit cost (credit)

Other income (expense) – net below Operating income (loss)

Income tax benefit

(7)

Provision (benefit) for income taxes

Reclassifications during the period