Williams Co.
1. Evaluate the terms of the proposed $900 million financing from the perspective of both
parties. How would you calculate the return to investors in this transaction? If you need more
information, what information do you need?
2. What is the purpose of each of the terms of the proposed financing?
3. Conduct an analysis of Williams’ sources and uses of funds during the first half of 2002. How
do you expect these numbers to evolve over the second half of 2002? What is the problem
facing Williams? How did it get into this situation? How has it tried to address the problem it
is facing?
4. Some might describe Williams as “financially distressed.” What evidence is there that
Williams’ business may be compromised as a result of its previous financial decisions?
5. “Tough times demand tough decisions.” As the CEO of Williams, would you recommend
accepting the proposed $900 million financing offer? If not, what alternatives would you
pursue?