WILLIAMS COMPANIES, INC.

Where It Passes

Where It Falls Short

• Valuation models0% pass✗ 11▾

  WMB overvalued: all 11 models price fair value below $69.09 (median $22.47)

  Graham fair value$22.47

  ✗Graham-207.5% margin vs $69.09

  Buffett fair value$17.72

  ✗Buffett-289.9% margin vs $69.09

  Lynch fair value$53.50

  ✗Lynch-29.1% margin vs $69.09

  Greenblatt fair value$25.53

  ✗Greenblatt-170.6% margin vs $69.09

  Dreman fair value$32.80

  ✗Dreman-110.6% margin vs $69.09

  Munger fair value$9.48

  ✗Munger-628.8% margin vs $69.09

  Pabrai fair value$14.97

  ✗Pabrai-361.5% margin vs $69.09

  Akre fair value$31.05

  ✗Akre-122.5% margin vs $69.09

  Marks fair value$18.35

  ✗Marks-276.5% margin vs $69.09

  Ackman fair value$9.36

  ✗Ackman-638.1% margin vs $69.09

  Templeton fair value$28.41

  ✗Templeton-143.2% margin vs $69.09
• Debt & Leverage8% pass✓ 1✗ 14▾

  11 of 12 flag WMB's debt & leverage — Graham, Buffett, Lynch +8 more

  LT Debt vs Net Current Assets

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 2.16, IC: 3.1x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity2.16

  ✗Lynch< 0.33

  Cash - Long-term Debt

  ✗LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities0.75

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity2.16

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels2.16

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=3.1x, D/EBITDA=4.8x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity2.16

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-2.1569; #3817/4210 (top 90.7%)

  ✗AsnessTop 30% of eligible cross-section
• Valuation8% pass✓ 3✗ 25▾

  12 of 13 flag WMB's valuation — Graham, Greenblatt, Dreman +9 more

  Price / 3-yr avg EPS31.6x

  ✗Graham<= 15x

  Price-to-Book Ratio6.6x

  ✗Graham<= 1.5x

  P/E x P/B208.30

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)0.49

  ✓Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value3.6%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=3.6%, ROC=10.7%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS32.3x

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)14.3x

  ✗Dreman< 8x

  Price / Book Value per Share6.6x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=32.3x, OE Yield=0.1%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=32.3x, FCF Yield=1.2%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=32.3x, P/B=6.6x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-110.6% (IV=$32.80 vs Price=$69.09)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share84.0x

  ✗Ackman<= 25

  Price vs. Trailing Low125% of trailing low ($55.43)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+3.62%; #2175/6340 (top 34.3%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.1821; #4280/6449 (top 66.4%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS32.3x

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E2.13

  ✓Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share6.86x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change+8.1%

  ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.1448; #4085/5247 (top 77.9%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization-1.83%; #2743/4519 (top 60.7%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-5.02%; #3139/6202 (top 50.6%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Efficiency13% pass✓ 2✗ 9▾

  7 of 8 flag WMB's efficiency — Graham, Buffett, Greenblatt +4 more

  Current Ratio0.75

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)7.5%

  ✗Buffett> 10%

  ROIC - WACC-2.5%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)10.7%

  ✗Greenblatt> 25%

  Current Ratio Change YoY0.50 -> 0.53

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.19x -> 0.20x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities0.75

  ✗Dreman> 1.5

  Return on Invested Capital7.5%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=8.9%; FY2024: ROIC=6.8%; FY2025: ROIC=8.0%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC1.4% (RR=18% x ROIC=7.5%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest 8.0%)

  ✗SleepROIC > 12% in a majority of years
• Verdicts13% pass✓ 2✗ 13▾

  Split decision: 12 FAIL · 2 NEUTRAL · 2 PASS

  Overall verdict

  ✗GrahamFAIL (2/9)✗BuffettFAIL (3/9)✗LynchFAIL (4/7)✗GreenblattRank #1542•PiotroskiNEUTRAL (F-Score 7)✗DremanFAIL (3/11)✗MungerFAIL (1/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (2/5)✓AckmanPASS (5/9)✗TempletonFAIL (3/8)✓SleepPASS (3/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (3/6)✗SchlossFAIL (3/7)✗OshaughnessyFAIL (Rank #793/963 (Top 82.3%))
• Profitability31% pass✓ 19✗ 16▾

  11 of 16 flag WMB's profitability — Graham, Buffett, Greenblatt +8 more

  Positive EPS (10 years)19/27 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)20/27 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)19.0%

  ✓Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)35.1% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$2.6B

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)0.49

  ✓Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR66.0%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  ROE19.9%

  ✓Lynch> 15%

  EBIT / Enterprise Value3.6%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=3.6%, ROC=10.7%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets4.47%

  ✓PiotroskiROA > 0

  ROA Change YoY4.08% -> 4.47% (delta: +0.39%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=10.07%, ROA=4.47%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue34.4%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity19.9%

  ✓Dreman> 12%

  Margin of SafetyP/E=32.3x, P/B=6.6x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity21.3% (3-yr avg)

  ✓AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-110.6% (IV=$32.80 vs Price=$69.09)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency20/24 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue37.5%

  ✓Ackman>= 15%

  Net Income / Shareholders Equity19.9%

  ✓Ackman>= 15%

  5-Year EPS CAGR66.0% CAGR over 5 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend39.5% (2023) -> 35.1% (2025)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin 39.5% -> 35.1%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+3.62%; #2175/6340 (top 34.3%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+19.87%; #793/5226 (top 15.2%)

  ✓AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0093; #775/5884 (top 13.2%)

  ✓AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR66.0% over 5 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years8/10 years positive

  ✓Schloss>= 70% positive over 5-10 observed years (app rule)
• Growth38% pass✓ 7✗ 6▾

  5 of 8 flag WMB's growth — Graham, Dreman, Ackman +2 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)0.49

  ✓Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR66.0%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: -5.9% vs Rev: 8.8%

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency20/24 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth-0.5%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency4/5 years with positive EPS growth

  ✓AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR66.0% CAGR over 5 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin 39.5% -> 35.1%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR9.1%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR66.0% over 5 years

  ✗Neff7%-20% annualized
• Cash Flow40% pass✓ 5✗ 7▾

  6 of 10 flag WMB's cash flow — Lynch, Dreman, Pabrai +3 more

  Free Cash Flow Proxy$2.6B

  ✓BuffettPositive and growing

  FCF Positive and Growing$-1.6B

  ✗LynchPositive and growing

  Operating Cash Flow$5.9B

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=10.07%, ROA=4.47%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)14.3x

  ✗Dreman< 8x

  P/E or FCF YieldP/E=32.3x, FCF Yield=1.2%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive12/18 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap-1.9%

  ✗Ackman>= 4%

  Price / FCF per Share84.0x

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency25/25 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$-1.6B

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization-1.83%; #2743/4519 (top 60.7%)

  ✗OshaughnessyTop 10% of eligible cross-section