SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
TEXAS GAS THRIFT PLAN
(Full Title of the Plan)
The Williams Companies, Inc.
One Williams Center
Tulsa, Oklahoma 74172
(Name of Issuer of the Securities Held Pursuant to the Plan)
<PAGE>
TEXAS GAS THRIFT PLAN
INDEX TO FINANCIAL STATEMENTS
Report of Independent Auditors
Audited Financial Statements
Statements of Net Assets Available for Plan Benefits at December 31, 1995
and 1994
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended December 31, 1995
Notes to Financial Statements
Supplemental Schedule
Schedule I - Item 27d -- Schedule of Reportable Transactions for the Year
Ended December 31, 1995
A schedule of party-in-interest
transactions has not been presented
because there were no party-in-interest
transactions which are prohibited by ERISA
Section 406 and for which there is no
statutory or administrative exemption.
<PAGE>
Report of Independent Auditors
The Administrative Committee
The Williams Companies, Inc.
We have audited the accompanying statement of net assets available for plan
benefits of the Texas Gas Thrift Plan as of December 31, 1995, and the related
statement of changes in net assets available for plan benefits for the year
then ended. These financial statements are the responsibility of the Plan's
Administrative Committee. Our responsibility is to express an opinion on
these financial statements based on our audit. The statement of net assets
available for plan benefits of the Texas Gas Thrift Plan as of December 31,
1994 was audited by other auditors whose report dated June 9, 1995, expressed
an unqualified opinion on the statement.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by the Administrative Committee, as well as evaluating the
overall financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion, the 1995 financial statements referred to above present
fairly, in all material respects, the net assets available for plan benefits
of the Plan at December 31, 1995, and the changes in its net assets available
for plan benefits for the year then ended, in conformity with generally
accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule
listed in the accompanying index to financial statements is presented for
purposes of complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974, and is not a required part of the basic financial statements. The fund
information in the statement of changes in net assets available for plan
benefits is presented for purposes of additional analysis rather than to
present the changes in net assets available for plan benefits of each fund.
The supplemental schedule and fund information have been subjected to the
auditing procedures applied in our audit of the 1995 basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
ERNST & YOUNG LLP
Tulsa, Oklahoma
June 14, 1996
<PAGE>
TEXAS GAS THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS (Notes 1 and 2)
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <S> <S>
Assets
Fixed Income Fund:
Fidelity Managed Income Portfolio II $ - $ 6,821,807
Guaranteed Investment Contracts:
John Hancock - 6,090,319
Metropolitan Life - 4,559,323
Prudential - 3,627,650
Other 4,500,557
Total Fixed Income Fund - 25,599,656
Fidelity Funds:
Magellan Equity Fund, 242,150
shares in 1994 (none in 1995) - 16,175,607
Puritan Stock and Bond Fund, 671,798
shares in 1994 (none in 1995) - 9,949,324
Retirement Government Money Market Fund,
268,363 shares in 1994 (none in 1995) - 268,363
Retirement Money Market Fund, 37,652
shares in 1994 (none in 1995) - 37,652
Contrafund, 82,512 shares in 1994
(none in 1995) - 2,498,478
OTC Fund, 34,837 shares in 1994
(none in 1995) - 810,664
Investment in Common Stock of
Transco Energy Company, 496,213
shares in 1994 (none in 1995) - 8,233,970
Total Investments - 63,573,714
Loans Receivable from Participants - 1,072,861
Net Assets Available for Plan Benefits $ - $64,646,575
</TABLE>
See accompanying notes.
<PAGE>
Page 1 of 3
TEXAS GAS THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (Notes 1 and 2)
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Note 3
---------------------------------------------------------------
Fidelity Transco Williams
Fidelity Puritan Common Company
Fixed Magellan Stock and Stock Stock
Income Fund Equity Fund Bond Fund Fund Fund
(1) (2) (3) (4) (5)
<S> <C> <C> <C> <C> <C>
Contributions
Employees $ 47,824 $ 50,931 $ 23,354 $ - $ 21,197
Salary deferral 587,347 829,645 526,587 - 236,079
Company 373,318 527,440 322,614 - 530,146
Total Contributions 1,008,489 1,408,016 872,555 - 787,422
Net Investment Income
(Loss) 1,847,947 43,057 373,806 - 142,962
Net Appreciation in
Market Value of
Investments - 5,388,250 1,720,768 1,228,384 1,845,881
Total Net Investment
Income 1,847,947 5,431,307 2,094,574 1,228,384 1,988,843
Participant Withdrawals (5,785,977) (2,270,202) (1,274,626) (13,657) (364,042)
Interfund Transfers, net 2,719,978 (2,062,605) (128,012) (9,448,697) 6,621,655
Net Increase (Decrease)
in Net Assets Available
for Plan Benefits
During the Year Before
Transfer to Investment
Plus Plan (209,563) 2,506,516 1,564,491 (8,233,970) 9,033,878
Transfer to Investment
Plus Plan (25,390,093) (18,682,123) (11,513,815) - (9,033,878)
Net Assets Available
for Plan Benefits at
Beginning of Year 25,599,656 16,175,607 9,949,324 8,233,970 -
Net Assets Available
for Plan Benefits at
End of Year $ - $ - $ - $ - $ -
Continued on following page
</TABLE>
<PAGE>
Page 2 of 3
TEXAS GAS THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (Notes 1 and 2)
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Note 3
---------------------------------------------------------------
Fidelity
Retirement Fidelity
Government Retirement Fidelity
Money Market Fidelity Fidelity Money Market Overseas
Fund Contrafund OTC Fund Fund Fund
(6) (7) (8) (9) (10)
<S> <C> <C> <C> <C> <C>
Contributions
Employees $ 1,589 $ 24,652 $ 6,992 $ 9,868 $ 1,383
Salary deferral 41,965 369,284 107,499 227,076 22,833
Company 27,293 218,113 66,576 390,262 12,578
Total Contributions 70,847 612,049 181,067 627,206 36,794
Net Investment Income
(Loss) 118,398 (21,572) 20,735 137,187 1,341
Net Appreciation in Market
Value of Investments - 688,926 300,689 - 14,745
Total Net Investment
Income 118,398 667,354 321,424 137,187 16,086
Participant Withdrawals (441,052) (226,246) (179,518) (285,623) (5,183)
Interfund Transfers, net 2,227,750 366,043 (167,173) (395,934) 70,961
Net Increase (Decrease)
in Net Assets Available
for Plan Benefits During
the Year Before Transfer
to Investment Plus Plan 1,975,943 1,419,200 155,800 82,836 118,658
Transfer to Investment
Plus Plan (2,244,306) (3,917,678) (966,464) (120,488) (118,658)
Net Assets Available
for Plan Benefits at
Beginning of Year 268,363 2,498,478 810,664 37,652 -
Net Assets Available
for Plan Benefits at
End of Year $ - $ - $ - $ - $ -
Continued on following page
</TABLE>
<PAGE>
Page 3 of 3
TEXAS GAS THRIFT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (Notes 1 and 2)
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Note 3
------------------------------------
Fidelity Fidelity Fidelity
Asset Asset Asset
Manager Manager: Manager: Participant
Fund Growth Fund Income Fund Loans Total
(11) (12) (13) (14) (15)
<S> <C> <C> <C> <C> <C>
Contributions
Employees $ 747 $ 747 $ - $ - $ 189,284
Salary deferral 17,300 26,107 2,627 - 2,994,349
Company 9,632 14,447 1,356 - 2,493,775
Total Contributions 27,679 41,301 3,983 - 5,677,408
Net Investment Income
(Loss) 2,634 (3) 1,067 86,197 2,753,756
Net Appreciation in
Market Value of
Investments 19,766 19,224 4,117 - 11,230,750
Total Net Investment
Income 22,400 19,221 5,184 86,197 13,984,506
Participant Withdrawals - (1,165) - (8,725) (10,856,016)
Interfund Transfers, net 71,312 90,460 49,683 (15,421) -
Net Increase (Decrease)
in Net Assets Available
for Plan Benefits During
the Year Before Transfer
to Investment Plus Plan 121,391 149,817 58,850 62,051 8,805,898
Transfer to Investment
Plus Plan (121,391) (149,817) (58,850) (1,134,912) (73,452,473)
Net Assets Available
for Plan Benefits at
Beginning of Year - - - 1,072,861 64,646,575
Net Assets Available
for Plan Benefits at
End of Year $ - $ - $ - $ - $ -
See accompanying notes.
</TABLE>
<PAGE>
TEXAS GAS THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
1. Acquisition of Transco
On December 12, 1994, Transco Energy Company (Transco) and The Williams
Companies, Inc. (Williams) announced that they had entered into a merger
agreement. Pursuant to the merger agreement, on January 18, 1995, Williams
accepted for payment approximately 24.6 million shares of Transco's common
stock for $17.50 per share as the first step in acquiring the entire equity
interest of Transco. Approximately 271,000 shares of Transco common stock
held by the Texas Gas Thrift Plan (the Plan) were sold to Williams pursuant to
the tender offer. The proceeds from the tendered Transco stock included in
the Plan were invested in the Retirement Money Market Fund and remained in
this fund until transferred by the participant to another investment option
(See Note 3 - Investment Funds). The approximately 193,000 remaining shares
of Transco's common stock held by the Plan were converted into 120,766 shares
of Williams common stock on May 1, 1995, the effective date of the merger.
Additionally, as a result of the merger, the Transco Common Stock Fund was
replaced by Williams Common Stock Fund.
2. Significant Accounting Policies and Description of Plan
The information included below regarding the Plan provides only a general
description of the Plan. Participants should refer to the Plan agreement for
a complete description of the Plan's provisions.
Plan Changes
As of December 31, 1995, the Plan was merged with The Williams Companies, Inc.
Investment Plus Plan (Investment Plus Plan). The net assets available for plan
benefits of the Plan as of the merger date are reported as a transfer to the
Investment Plus Plan in the Plan's Statement of Changes in Net Assets
Available for Plan Benefits. Effective May 1, 1995, Texas Gas Transmission
Corporation (the Company) became a wholly owned subsidiary of Williams. Prior
to May 1, 1995, the Company was a wholly owned subsidiary of Transco Gas
Company, which was wholly owned by Transco.
The Plan was amended and restated effective January 1, 1995. Various changes
in the Plan as a result of the amendment and restatement are described below.
<PAGE>
General
The Plan was adopted effective August 1, 1962. Participation in the Plan is
available to each employee of the Company who (a) is not a member of or
represented by a collective bargaining unit, unless eligibility is required by
the terms of any collective bargaining agreement, and (b) is not a nonresident
alien. At December 31, 1995 and 1994, there were 1,140 and 1,221 employees,
respectively, participating in the Plan.
Trustee and Recordkeeper
Effective September 1, 1995, First Interstate Bank (the Plan Trustee) became
the trustee for the Plan. Prior to September 1, 1995, Liberty National Bank
and Trust Company was the trustee for the Plan. Trustee fees for 1995 and
1994 payable to Liberty National Bank and Trust Company by the Company were
$3,750 and $5,000, respectively. The powers, duties and obligations of the
Plan Trustee are as set forth in the trust agreement between the Company and
the Plan Trustee dated January 1, 1984, as amended. Effective September 1,
1995, Howard Johnson and Company assumed recordkeeping responsibilities from
Fidelity Institutional Retirement Services Company (FIRSCO). FIRSCO was the
previous agent for the holding of investments. Recordkeeper fees for 1995 and
1994 payable to FIRSCO by the Company were $7,500 and $15,027, respectively.
Contributions and Vesting
During 1995 and 1994, each participant could contribute up to a maximum of 15
percent and 11 percent, respectively, of base monthly compensation on a pre-
tax or after-tax basis or in some combination thereof, with the option of
investing in any of the investment alternatives listed in Note 3 - Investment
Funds. If the participant elects to invest in two or more funds, the
contribution allocated to each fund must be designated in whole percentages.
Participants may, subject to certain limitations, change the percentage of
contributions invested in each fund or transfer any or all of their account
balances between funds.
During 1995 and 1994, the employer's contributions equaled 100 percent and 75
percent, respectively, of participant contributions up to a maximum of 6% of
base monthly compensation. The employer's contributions become fully vested
to participants immediately upon entry into the Plan.
Participant Loans
Active employee participants are eligible to obtain loans from their accounts
within specified limitations. The term of the loan may be for any number of
consecutive six-month periods up to a maximum of five years. All loans must
be repaid within 90 days of any termination of employment or will be
considered in default and taxable to the participant. Periodic principal and
interest payments are reinvested in various funds as directed by the
participant. The interest rate is equal to the prime rate of interest plus
one percentage point.
<PAGE>
Withdrawals and Terminations
Withdrawals from the Plan consist of four different types: partial
withdrawals, 401(K)-age 59 1/2 withdrawals, hardship withdrawals and
membership or Plan termination.
A partial withdrawal is a withdrawal of funds from the after-tax participant
contributions rollover account or the Company account as of June 30, 1992.
Partial withdrawals may not be made more often than two times in any Plan
year.
A 401(K)-age 59 1/2 withdrawal is available only to participants age 59 1/2 or
older and consists of a distribution of all or a portion of the pre-tax
participant contributions.
A hardship withdrawal consists of pre-tax participant contributions (excluding
earnings) and/or the Company account after July 1, 1992, including earnings,
and is available only to active employee participants who meet certain
requirements. Participants eligible for a loan or other distribution from the
Plan are not eligible to make a hardship withdrawal. Internal Revenue Service
(IRS) regulations prohibit Company contributions to the Plan for six months
from the date of the hardship withdrawal.
Membership in the Plan must be terminated in case of death. Retirement,
disability or other termination of employment are situations where membership
must be terminated if the participant's balance is $3,500 or less. Balances
exceeding $3,500 must be withdrawn no later than the valuation date coincident
or immediately following the earlier of the participant's death or upon
reaching the age of 65. However, a participant may defer distribution up to
April 1 of the year following the attainment of age 70 1/2. Should the
participant leave his balance in the Plan, contributions are no longer
permitted and withdrawal provisions are the same as for active employee
participants.
Net assets available for plan benefits as of December 31, 1995 and 1994
include no amounts pending distribution to participants.
Basis of Accounting
The financial statements of the Plan are presented on the accrual basis of
accounting. A separate account is maintained for each participant which
reflects the balance of investments and cash credited thereto, net of
withdrawals.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Administrative Committee to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
<PAGE>
Investment Valuation
Investments are stated at market value, except for guaranteed investment
contracts which are stated at contract value. Market values for all
investments except the Fidelity Managed Income Portfolio II Fund, the Fidelity
Retirement Money Market Fund, the Fidelity Retirement Government Money Market
Fund and participant loans are based on closing market quotes. The Fidelity
Managed Income Portfolio II Fund, the Fidelity Retirement Money Market Fund,
the Fidelity Retirement Government Money Market Fund and participant loans are
carried at cost which approximates market.
Expenses
All brokerage commissions, registration charges and certain other
administrative expenses incurred by the Plan are paid by the Company.
3. Investment Funds
The following descriptions relate to the investment options available to Plan
participants during 1995:
Fixed Income Fund - Funds are invested in bonds, debentures,
notes or other evidences of indebtedness
and any other property with a fixed rate
of return, including guaranteed investment
contracts. As of January 1, 1995, all
funds invested in guaranteed investment
contracts that matured on or after
December 31, 1995, and all subsequent
contributions to the Fixed Income Fund,
were transferred or invested into
Fidelity's Managed Income Portfolio II.
Fidelity Magellan Equity Fund - Funds are invested in growth-oriented
securities such as common stocks and
securities convertible into common stock
and mutual funds invested primarily in
common stock.
Fidelity Puritan Stock
and Bond Fund - Funds are invested in a diversified
portfolio, including common stocks,
preferred stocks, bonds, debentures,
mortgages or other evidences of
indebtedness or ownership, common trust
funds or mutual funds.
<PAGE>
Fidelity Retirement Government
Money Market Fund - Funds are invested in obligations issued
or guaranteed by the U.S. Government.
Fidelity Retirement
Money Market Fund - Funds are invested in obligations issued
or guaranteed by the U.S. Government.
Fidelity Contrafund - Funds are invested in common stocks and
securities convertible into common stock
of companies believed to be out of favor
or undervalued.
Fidelity OTC Fund - Funds are invested in common stocks,
preferred stocks, securities convertible
into common stocks and debt securities on
the over-the-counter securities market.
Fidelity Asset Manager Fund - The fund seeks high total return with
reduced risk over the long term by
allocating assets among domestic and
foreign stocks, bonds and short-term
instruments.
Fidelity Asset Manager:
Income Fund - The fund seeks high total return with
potential for capital appreciation through
investment in stocks, bonds (with
maturities greater than three years) and
short-term instruments (with maturities
less than three years).
Fidelity Asset Manager:
Growth Fund - The fund seeks to maximize total return
over the long term by allocating assets
among stocks, bonds (with maturities
greater than three years) and short-term
instruments (with maturities less than
three years).
Fidelity Overseas Fund - The fund seeks long-term growth of capital
primarily through investments in foreign
securities including common stock,
securities convertible to common stock and
debt instruments of foreign business and
governments. At least 65 percent of the
fund's total assets will normally be
invested in securities of companies from
at least three different countries outside
of North America.
<PAGE>
Transco Common Stock Fund - Funds were invested in Transco common
stock. As discussed in Note 1, Transco
common stock was converted to Williams
common stock during 1995.
Williams Common Stock Fund - Funds are invested in Williams common
stock.
4. Federal Income Taxes
The Plan obtained its latest determination letter on March 27, 1995, in which
the IRS stated that the Plan, as then designed, was in compliance with the
applicable requirements of the Internal Revenue Code. The Plan administrator
and the Plan's tax counsel believe that the Plan is currently designed and
being operated in compliance with the applicable requirements of the Internal
Revenue Code. As such, the Plan was qualified and the related trust was tax-
exempt as of December 31, 1995 and 1994.
<PAGE>
<TABLE>
<CAPTION>
Supplemental Schedule
TEXAS GAS THRIFT PLAN
EIN: 61-0405152 Plan: 002
Item 27dSchedule of Reportable Transactions
for the Year Ended December 31, 1995
(a) (c) (d) (g) (i)
Identity of (b) Purchase Selling Cost of Net Gain
Party Involved Description of Asset Price Price** Asset Sold (Loss)
<S> <C> <C> <C> <C>
Category (i)- individual transactions in excess of five percent of plan assets:
Transco Energy
Company Common Stock Fund* - sale
of 271,000 shares $ - $ 4,742,500 $ 5,578,496 $ (835,996)
Category (iii) - series of transactions in excess of five percent of plan assets:
Fidelity Management
Trust Company Fixed Income Fund $11,988,692 $12,322,766 $12,322,766 $ -
Fidelity Magellan Equity Fund* 3,985,599 1,652,136 604,565 1,047,571
Fidelity Puritan Stock and Bond Fund* 3,535,213 1,976,282 1,768,396 207,886
Fidelity Retirement Money Market Fund* 5,811,471 5,849,123 5,849,123 -
Fidelity Retirement Government Money
Market Fund* 5,773,274 3,816,447 3,816,447 -
Transco Energy
Company Common Stock Fund* - sales, - 9,462,354 10,318,488 (856,134)
including the category (i)
transactions above
The Williams
Companies, Inc. Common Stock Fund* 8,941,184 1,740,186 1,735,617 4,569
* Party-in-interest transaction.
** The selling price equals the current value of an asset on the applicable
transaction date.
Note: There were no category (ii) or (iv) transactions during 1995.
</TABLE>
<PAGE>
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant, through the Texas Gas Thrift Plan Committee, has duly
caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
TEXAS GAS THRIFT PLAN
Date: June 28, 1996 By: /S/ Beverly H. Griffith
-------------------------
Beverly H. Griffith
General Counsel
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-58969) pertaining to the Texas Gas Thrift Plan of The
Williams Companies, Inc. of our report dated June 14, 1996, with respect to
the financial statements and schedule of the Texas Gas Thrift Plan included in
this Annual Report (Form 11-K) for the year ended December 31, 1995.
ERNST & YOUNG LLP
Tulsa, Oklahoma
June 26, 1996
<PAGE>
