The Williams Companies, Inc. 8K Williams Reports Second Quarter 2018 Financial Results | WMB 1 Aug 18

EXHIBIT 99.2






	Non-GAAP Reconciliations,
	Financial Highlights, and Operating Statistics

	(UNAUDITED)

	Final

	June 30, 2018



Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income
(UNAUDITED)
	2017															2018
(Dollars in millions, except per-share amounts)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			Year

Income (loss) attributable to The Williams Companies, Inc. available to common stockholders	$	373		$	81		$	33		$	1,687		$	2,174		$	152		$	135		$	287

Income (loss) - diluted earnings (loss) per common share	$	.45		$	.10		$	.04		$	2.03		$	2.62		$	.18		$	.16		$	.35
Adjustments:
Williams Partners
Estimated minimum volume commitments	$	15		$	15		$	18		$	(48	)	$	—		$	—		$	—		$	—
Impairment of certain assets	—			—			1,142			9			1,151			—			—			—
Ad valorem obligation timing adjustment	—			—			7			—			7			—			—			—
Organizational realignment-related costs	4			6			6			2			18			—			—			—
(Gain) loss related to Canada disposition	(3		)	(1		)	4			4			4			—			—			—
Severance and related costs	9			4			5			4			22			—			—			—
Constitution Pipeline project development costs	2			6			4			4			16			2			1			3
ACMP Merger and transition costs	—			4			3			4			11			—			—			—
Share of impairment at equity-method investments	—			—			1			—			1			—			—			—
(Gain) loss on asset retirement	—			—			(5		)	5			—			—			—			—
Geismar Incident adjustments	(9		)	2			8			(1		)	—			—			—			—
Gain on sale of Geismar Interest	—			—			(1,095		)	—			(1,095		)	—			—			—
Gains from contract settlements and terminations	(13		)	(2		)	—			—			(15		)	—			—			—
Accrual for loss contingency	9			—			—			—			9			—			—			—
(Gain) loss on early retirement of debt	(30		)	—			3			—			(27		)	7			—			7
Gain on sale of RGP Splitter	—			(12		)	—			—			(12		)	—			—			—
Settlement charge from pension early payout program	—			—			—			35			35			—			—			—
Regulatory adjustments resulting from Tax Reform	—			—			—			713			713			4			(20		)	(16		)
Share of regulatory charges resulting from Tax Reform for equity-method investments	—			—			—			11			11			2			—			2
Expenses associated with Financial Repositioning	—			2			—			—			2			—			—			—
Expenses associated with strategic asset monetizations	1			4			—			—			5			—			—			—
WPZ Merger costs	—			—			—			—			—			—			1			1
Total Williams Partners adjustments	(15		)	28			101			742			856			15			(18		)	(3		)
Other
Impairment of certain assets	—			23			68			—			91			—			66			66
Loss related to Canada disposition	1			—			—			1			2			—			—			—
Expenses associated with strategic alternatives	1			3			5			—			9			—			—			—
Settlement charge from pension early payout program	—			—			—			36			36			—			—			—
Regulatory adjustments resulting from Tax Reform	—			—			—			63			63			—			1			1
Expenses associated with Financial Repositioning	8			—			—			—			8			—			—			—
WPZ Merger costs	—			—			—			—			—			—			3			3
Total Other adjustments	10			26			73			100			209			—			70			70
Adjustments included in Modified EBITDA	(5		)	54			174			842			1,065			15			52			67

Adjustments below Modified EBITDA
Gain on disposition of equity-method investment - Williams Partners	(269		)	—			—			—			(269		)	—			—			—
Accelerated depreciation by equity-method investments	—			—			—			9			9			—			—			—
Change in depreciable life associated with organizational realignment - Williams Partners	(7		)	—			—			—			(7		)	—			—			—
Gain on deconsolidation of Jackalope interest	—			—			—			—			—			—			(62		)	(62		)
Allocation of adjustments to noncontrolling interests	77			(10		)	(28		)	(199		)	(160		)	(5		)	21			16
	(199		)	(10		)	(28		)	(190		)	(427		)	(5		)	(41		)	(46		)
Total adjustments	(204		)	44			146			652			638			10			11			21
Less tax effect for above items	77			(17		)	(55		)	(246		)	(241		)	(3		)	(3		)	(6		)
Adjustments for tax-related items ⁽¹⁾	(127		)	—			—			(1,923		)	(2,050		)	—			—			—

Adjusted income available to common stockholders	$	119		$	108		$	124		$	170		$	521		$	159		$	143		$	302
Adjusted diluted earnings per common share ⁽²⁾	$	.14		$	.13		$	.15		$	.20		$	.63		$	.19		$	.17		$	.36
Weighted-average shares - diluted (thousands)	826,476			828,575			829,368			829,607			828,518			830,197			830,107			830,151

(1) The first quarter of 2017 includes an unfavorable adjustment related to the release of a valuation allowance. The fourth quarter of 2017 includes an unfavorable adjustment to reverse the tax benefit associated with remeasuring our deferred tax balances at a lower corporate rate resulting from Tax Reform.
(2) The sum of earnings per share for the quarters may not equal the total earnings per share for the year due to changes in the weighted-average number of common shares outstanding.



Reconciliation of "Net Income (Loss)" to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA”
(UNAUDITED)
	2017															2018
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			Year

Net income (loss)	$	569		$	193		$	125		$	1,622		$	2,509		$	270		$	269		$	539
Provision (benefit) for income taxes	37			65			24			(2,100		)	(1,974		)	55			52			107
Interest expense	280			271			267			265			1,083			273			275			548
Equity (earnings) losses	(107		)	(125		)	(115		)	(87		)	(434		)	(82		)	(92		)	(174		)
Other investing (income) loss - net	(272		)	(2		)	(4		)	(4		)	(282		)	(4		)	(68		)	(72		)
Proportional Modified EBITDA of equity-method investments	194			215			202			184			795			169			178			347
Depreciation and amortization expenses	442			433			433			428			1,736			431			434			865
Accretion expense associated with asset retirement obligations for nonregulated operations	7			9			7			10			33			8			10			18
Modified EBITDA	$	1,150		$	1,059		$	939		$	318		$	3,466		$	1,120		$	1,058		$	2,178

Williams Partners	$	1,132		$	1,076		$	1,000		$	408		$	3,616		$	1,107		$	1,115		$	2,222
Other	18			(17		)	(61		)	(90		)	(150		)	13			(57		)	(44		)
Total Modified EBITDA	$	1,150		$	1,059		$	939		$	318		$	3,466		$	1,120		$	1,058		$	2,178

Adjustments included in Modified EBITDA ⁽¹⁾:

Williams Partners	$	(15	)	$	28		$	101		$	742		$	856		$	15		$	(18	)	$	(3	)
Other	10			26			73			100			209			—			70			70
Total Adjustments included in Modified EBITDA	$	(5	)	$	54		$	174		$	842		$	1,065		$	15		$	52		$	67

Adjusted EBITDA:

Williams Partners	$	1,117		$	1,104		$	1,101		$	1,150		$	4,472		$	1,122		$	1,097		$	2,219
Other	28			9			12			10			59			13			13			26
Total Adjusted EBITDA	$	1,145		$	1,113		$	1,113		$	1,160		$	4,531		$	1,135		$	1,110		$	2,245

(1) Adjustments by segment are detailed in the "Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income," which is also included in these materials.



Dividend Coverage Ratio
(UNAUDITED)
	2017															2018
(Dollars in millions, except per share amounts)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			Year

Distributions from WPZ (accrued / “as declared” basis)	$	421		$	421		$	421		$	421		$	1,684		$	431		$	442		$	873
Other Segment Adjusted EBITDA	28			9			12			10			59			13			13			26
Corporate interest	(66		)	(65		)	(66		)	(64		)	(261		)	(64		)	(64		)	(128		)
Subtotal	383			365			367			367			1,482			380			391			771
WMB cash tax rate	0		%	0		%	2		%	2		%	1		%	0		%	2		%	1		%
WMB cash taxes (excludes cash taxes paid by WPZ)	—			—			(7		)	(9		)	(16		)	—			(9		)	(9		)
Other Segment Maintenance Capital	(3		)	(5		)	(5		)	(9		)	(22		)	(9		)	(7		)	(16		)
WMB cash available for dividends and other uses ⁽¹⁾	$	380		$	360		$	355		$	349		$	1,444		$	371		$	375		$	746
WMB dividends paid	(248		)	(248		)	(248		)	(248		)	(992		)	(281		)	(282		)	(563		)
Excess cash available after dividends	$	132		$	112		$	107		$	101		$	452		$	90		$	93		$	183

Dividend per share	$	0.3000		$	0.3000		$	0.3000		$	0.3000		$	1.2000		$	0.3400		$	0.3400		$	0.6800

Coverage ratio ⁽²⁾	1.53			1.45			1.43			1.41			1.46			1.32			1.33			1.33

(1) Effective with the first quarter of 2018, Williams increased its regular dividend from $0.30 per share to $0.34 per share.
(2) WMB cash available for dividends and other uses / WMB dividends paid.



Consolidated Statement of Operations
(UNAUDITED)
	2017															2018
(Dollars in millions, except per-share amounts)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			Year

Revenues:
Service revenues	$	1,261		$	1,282		$	1,310		$	1,459		$	5,312		$	1,351		$	1,340		$	2,691
Service revenues - commodity consideration	—			—			—			—			—			101			94			195
Product sales	727			642			581			769			2,719			636			657			1,293
Total revenues	1,988			1,924			1,891			2,228			8,031			2,088			2,091			4,179
Costs and expenses:
Product costs	579			537			504			680			2,300			613			636			1,249
Processing commodity expenses	—			—			—			—			—			35			26			61
Operating and maintenance expenses	371			392			403			410			1,576			357			388			745
Depreciation and amortization expenses	442			433			433			428			1,736			431			434			865
Selling, general, and administrative expenses	161			153			138			142			594			132			130			262
Impairment of certain assets	1			25			1,210			12			1,248			—			66			66
Gain on sale of Geismar Interest	—			—			(1,095		)	—			(1,095		)	—			—			—
Regulatory charges resulting from Tax Reform	—			—			—			674			674			—			—			—
Other (income) expense - net	4			6			24			37			71			29			1			30
Total costs and expenses	1,558			1,546			1,617			2,383			7,104			1,597			1,681			3,278
Operating income (loss)	430			378			274			(155		)	927			491			410			901
Equity earnings (losses)	107			125			115			87			434			82			92			174
Other investing income (loss) - net	272			2			4			4			282			4			68			72
Interest incurred	(287		)	(280		)	(275		)	(274		)	(1,116		)	(282		)	(288		)	(570		)
Interest capitalized	7			9			8			9			33			9			13			22
Other income (expense) - net	77			24			23			(149		)	(25		)	21			26			47
Income (loss) before income taxes	606			258			149			(478		)	535			325			321			646
Provision (benefit) for income taxes	37			65			24			(2,100		)	(1,974		)	55			52			107
Net income (loss)	569			193			125			1,622			2,509			270			269			539
Less: Net income (loss) attributable to noncontrolling interests	196			112			92			(65		)	335			118			134			252
Net income (loss) attributable to The Williams Companies, Inc.	$	373		$	81		$	33		$	1,687		$	2,174		$	152		$	135		$	287

Diluted earnings (loss) per common share:
Net income (loss) ⁽¹⁾	$	.45		$	.10		$	.04		$	2.03		$	2.62		$	.18		$	.16		$	.35

Weighted-average number of shares (thousands)	826,476			828,575			829,368			829,607			828,518			830,197			830,107			830,151

Common shares outstanding at end of period (thousands)	826,239			826,398			826,723			826,836			826,836			827,607			827,733			827,733
Market price per common share (end of period)	$	29.59		$	30.28		$	30.01		$	30.49		$	30.49		$	24.86		$	27.11		$	27.11
Cash dividends declared per share	$	.30		$	.30		$	.30		$	.30		$	1.20		$	.34		$	.34		$	.68

(1) The sum of earnings (loss) per share for the quarters may not equal the total earnings (loss) per share for the year due to changes in the weighted-average number of common shares outstanding.



Williams Partners
(UNAUDITED)
	2017														2018
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr		Year			1st Qtr		2nd Qtr			Year

Revenues:
Service revenues	$	1,256		$	1,277		$	1,304		$	1,455	$	5,292		$	1,346	$	1,335		$	2,681
Service revenues - commodity consideration	—			—			—			—		—			101		94			195
Product sales	727			642			581			768		2,718			636		657			1,293
Total revenues	1,983			1,919			1,885			2,223		8,010			2,083		2,086			4,169

Segment costs and expenses:
Product costs	579			537			504			680		2,300			613		636			1,249
Processing commodity expenses	—			—			—			—		—			35		26			61
Operating and maintenance expenses	353			376			387			414		1,530			343		376			719
Selling, general, and administrative expenses	156			154			140			160		610			138		134			272
Impairment of certain assets	1			2			1,142			11		1,156			—		—			—
Gain on sale of Geismar Interest	—			—			(1,095		)	—		(1,095		)	—		—			—
Regulatory charges resulting from Tax Reform	—			—			—			713		713			4		(20		)	(16		)
Other segment costs and expenses	(44		)	(11		)	9			21		(25		)	12		(3		)	9
Total segment costs and expenses	1,045			1,058			1,087			1,999		5,189			1,145		1,149			2,294
Proportional Modified EBITDA of equity-method investments	194			215			202			184		795			169		178			347
Modified EBITDA	1,132			1,076			1,000			408		3,616			1,107		1,115			2,222
Adjustments	(15		)	28			101			742		856			$	15	(18		)	(3		)
Adjusted EBITDA	$	1,117		$	1,104		$	1,101		$	1,150	$	4,472		$	1,122	$	1,097		$	2,219

Statistics for Operated Assets
Interstate Transmission
Throughput (Tbtu)	1,158.1			1,053.0			1,094.9			1,226.6		4,532.6			1,326.0		1,153.6			2,479.6
Avg. daily transportation volumes (Tbtu)	12.8			11.6			11.9			13.4		12.5			14.7		12.7			13.7
Avg. daily firm reserved capacity (Tbtu)	15.8			16.2			17.1			17.9		16.8			18.4		18.0			18.2
Gathering and Processing
Gathering volumes (Bcf per day) - Consolidated ⁽¹⁾	7.86			7.98			8.20			8.54		8.15			8.26		8.29			8.28
Gathering volumes (Bcf per day) - Non-consolidated ⁽²⁾	4.10			4.12			3.87			3.89		3.99			4.06		3.84			3.95
Plant inlet natural gas volumes (Bcf per day) - Consolidated ⁽¹⁾	2.92			2.98			3.08			3.22		3.05			3.18		3.10			3.14
Plant inlet natural gas volumes (Bcf per day) - Non-consolidated ⁽²⁾	0.54			0.53			0.39			0.27		0.43			0.24		0.25			0.25
Consolidated ⁽¹⁾
Ethane margin ($/gallon)	$	.03		$	.01		$	.03		$	.03	$	.03		$	.01	$	.06		$	.03
Non-ethane margin ($/gallon)	$	.45		$	.41		$	.45		$	.63	$	.48		$	.68	$	.70		$	.69
NGL margin ($/gallon)	$	.33		$	.25		$	.29		$	.41	$	.32		$	.35	$	.44		$	.39
Ethane equity sales (Mbbls/d)	11			17			17			15		15			23		15			19
Non-ethane equity sales (Mbbls/d)	29			26			25			25		26			25		23			24
NGL equity sales (Mbbls/d)	40			43			42			40		41			48		38			43
Ethane production (Mbbls/d)	40			53			49			62		51			65		65			65
Non-ethane production (Mbbls/d)	90			93			99			104		97			102		99			101
NGL production (Mbbls/d)	130			146			148			166		148			167		164			166
Non-consolidated ⁽²⁾
NGL equity sales (Mbbls/d)	5			4			5			4		5			3		5			4
NGL production (Mbbls/d)	21			22			22			19		21			18		20			19
Overland Pipeline Company ⁽²⁾
NGL transportation volumes (Mbbls)	18,338			20,558			21,015			21,425		81,336			21,263		21,333			42,596


(1) Excludes volumes associated with equity-method investments that are not consolidated for financial reporting purposes.
(2) Includes 100% of the volumes associated with operated equity-method investments.



Capital Expenditures and Investments
(UNAUDITED)
	2017															2018
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr		2nd Qtr		Year

Capital expenditures:
Williams Partners	$	509		$	540		$	638		$	687		$	2,374		$	948	$	925	$	1,873
Other	2			5			6			12			25			9		8		17
Total ⁽¹⁾	$	511		$	545		$	644		$	699		$	2,399		$	957	$	933	$	1,890

Purchases of investments:
Williams Partners	$	52		$	27		$	24		$	29		$	132		$	21	$	70	$	91
Other	—			—			—			—			—			—		—		—
Total	$	52		$	27		$	24		$	29		$	132		$	21	$	70	$	91

Summary:
Williams Partners	$	561		$	567		$	662		$	716		$	2,506		$	969	$	995	$	1,964
Other	2			5			6			12			25			9		8		17
Total	$	563		$	572		$	668		$	728		$	2,531		$	978	$	1,003	$	1,981

Capital expenditures incurred and purchases of investments:
Increases to property, plant, and equipment	$	569		$	591		$	666		$	836		$	2,662		$	934	$	930	$	1,864
Purchases of investments	52			27			24			29			132			21		70		91
Total	$	621		$	618		$	690		$	865		$	2,794		$	955	$	1,000	$	1,955

⁽¹⁾ Increases to property, plant, and equipment	$	569		$	591		$	666		$	836		$	2,662		$	934	$	930	$	1,864
Changes in related accounts payable and accrued liabilities	(58		)	(46		)	(22		)	(137		)	(263		)	23		3		26
Capital expenditures	$	511		$	545		$	644		$	699		$	2,399		$	957	$	933	$	1,890



Depreciation and Amortization and Other Selected Financial Data
(UNAUDITED)
	2017														2018
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year		1st Qtr			2nd Qtr			Year

Depreciation and amortization:
Williams Partners	$	433		$	423		$	424		$	420		$	1,700	$	423		$	426		$	849
Other	9			10			9			8			36		8			8			16
Total	$	442		$	433		$	433		$	428		$	1,736	$	431		$	434		$	865

Other selected financial data:
Cash and cash equivalents	$	639		$	1,918		$	1,172		$	899				$	1,292		$	275

Total assets	$	47,512		$	48,770		$	46,120		$	46,352				$	47,052		$	46,374

Capital structure:
Debt
Current	$	—		$	1,951		$	502		$	501				$	501		$	2
Noncurrent	$	21,825		$	21,325		$	20,567		$	20,434				$	21,379		$	21,313
Stockholders’ equity	$	8,444		$	8,306		$	8,109		$	9,656				$	9,473		$	9,345
Debt to debt-plus-stockholders’ equity ratio	72.1		%	73.7		%	72.2		%	68.4		%			69.8		%	69.5		%

Cash distributions received from limited partner interest in Williams Partners L.P.	$	597		$	421		$	422		$	421		$	1,861	$	421		$	431		$	852



Reconciliation of "Net Income (Loss)" to "Modified EBITDA", Non-GAAP "Adjusted EBITDA" and "Distributable Cash Flow"

	2018 Guidance									2019 Guidance
(Dollars in billions, except coverage ratios)	Low			Mid			High			Low			Mid			High

Net income (loss)	$	0.975		$	1.075		$	1.175		$	1.050		$	1.200		$	1.350
Provision (benefit) for income taxes				0.260									0.400
Interest expense				1.100									1.225
Equity (earnings) losses				(0.375		)							(0.450		)
Proportional Modified EBITDA of equity-method investments				0.725									0.825
Depreciation and amortization expenses and accretion expense associated with asset retirement obligations for nonregulated operations				1.750									1.800
Modified EBITDA	$	4.435		$	4.535		$	4.635		$	4.850		$	5.000		$	5.150

Adjustments included in Modified EBITDA:
Constitution Pipeline project development costs				0.002									—
(Gain) loss on early retirement of debt				0.007									—
Regulatory charges resulting from Tax Reform				0.004									—
Share of regulatory charges resulting from Tax Reform for equity-method investments				0.002									—
Total Adjustments included in Modified EBITDA				0.015									—
Adjusted EBITDA	$	4.450		$	4.550		$	4.650		$	4.850		$	5.000		$	5.150

Interest expense - net ⁽¹⁾				(1.150		)							(1.235		)
Maintenance capital expenditures ⁽²⁾	(0.575		)	(0.525		)	(0.475		)	(0.675		)	(0.625		)	(0.575		)
Cash taxes - (Payment) Benefit				—									0.075
Income attributable to noncontrolling interests (NCI) and other				(0.125		)							(0.115		)

Distributable cash flow (DCF)	$	2.600		$	2.750		$	2.900		$	2.900		$	3.100		$	3.300

Dividends & Distributions paid ⁽³⁾				(1.705		)							(1.850		)
Excess cash available after dividends & distributions	$	0.895		$	1.045		$	1.195		$	1.050		$	1.250		$	1.450

Dividend per share				$	1.36								$	1.52

Coverage ratio ⁽⁴⁾	1.52x			1.61x			1.70x			1.57x			1.68x			1.78x

(1) Includes proportionate share of interest expense of equity investments.
(2) Includes proportionate share of maintenance capital expenditures of equity investments.
(3) Includes WPZ distributions to public unitholders for 1Q and 2Q of 2018.
(4) Distributable cash flow / Dividends & distributions paid.



Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income
	2019
	Guidance
(Dollars in billions, except per-share amounts)	Midpoint

Net income (loss)	$	1.200
Less: Net income (loss) attributable to noncontrolling interests	0.115
Net income (loss) attributable to The Williams Companies, Inc.	$	1.085

Adjustments:
Adjustments included in Modified EBITDA	—
Adjustments below Modified EBITDA	—
Total adjustments	—
Less tax effect for above items	—
Adjustments for tax related items	—
Adjusted income available to common stockholders	$	1.085
Adjusted diluted earnings per common share	$	0.89
Weighted-average shares - diluted (billions)	1.217

The Williams Companies, Inc. (WMB) 8-KWilliams Reports Second Quarter 2018 Financial Results