Exhibit 99.1
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| News Release | | | | Williams (NYSE: WMB) One Williams Center Tulsa, OK 74172 800-Williams www.williams.com | |  |
DATE: April 29, 2015
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| MEDIA CONTACT: | | INVESTOR CONTACTS: | | |
Tom Droege (918) 573-4034 | | John Porter (918) 573-0797 | | Brett Krieg (918) 573-4614 |
Williams Reports First Quarter 2015 Financial Results
| | • | | First Quarter 2015 Cash Distributions from Williams Partners Totaled $515 Million, Up $60 Million, or 13% |
| | • | | Adjusted EBITDA is $918 Million, up 12% |
| | • | | Reaffirming Williams Partners Adjusted EBITDA Guidance For 2015-2017 with 2015 Expected to be Near Low End of Range on Extended Geismar Ramp-Up and Effects of Low Commodity Prices |
| | • | | Reaffirming Williams Dividend Guidance of $2.38 Per Share in 2015 with 10% to 15% Annual Dividend Growth through 2017 with Growing Coverage |
| | • | | Williams Analyst Day Set for May 13 |
TULSA, Okla. – Williams (NYSE: WMB) today announced unaudited first quarter 2015 financial results, including the financial results of its master limited partnership (MLP), Williams Partners (NYSE: WPZ), which merged with Access Midstream Partners, L.P. in the first quarter.
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| Williams Summary Financial Information | | 1Q | |
Amounts in millions, except per-share amounts. Per share amounts are reported on a diluted basis. All
amounts are attributable to The Williams Companies, Inc. | | 2015 | | | 2014 | |
| (Unaudited) | | | | | | |
MLP Cash Distributions to Williams (1) | | $ | 515 | | | $ | 455 | |
Dividend Coverage Ratio (2) | | | 1.14 | x | | | 1.42 | x |
Quarterly Dividend Per Share | | $ | 0.58 | | | $ | 0.4025 | |
Adjusted EBITDA (2) | | $ | 918 | | | $ | 821 | |
Adjusted income from continuing operations (2) | | $ | 122 | | | $ | 190 | |
Adjusted income from continuing operations per share (2) | | $ | 0.16 | | | $ | 0.28 | |
Net income | | $ | 70 | | | $ | 140 | |
Net income per share | | $ | 0.09 | | | $ | 0.20 | |
| (1) | Quarterly cash distributions in this table are declared and received in the following quarter, as these distributions relate to the first quarter’s cash flow. |
| (2) | Schedules reconciling dividend coverage ratio, adjusted EBITDA and adjusted income from continuing operations (non-GAAP measures) are available at www.williams.com and as an attachment to this news release. |
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Williams reported first quarter 2015 cash distributions from Williams Partners of $515 million, a $60 million or 13 percent increase from total MLP cash distributions received in first quarter 2014. Quarterly cash distributions discussed in this news release are declared and received in the following quarter, as these distributions relate to the first quarter’s cash flow.
Williams reported adjusted EBITDA of $918 million for first quarter 2015, compared with $821 million in the first quarter 2014, an increase of $97 million, or 12 percent.
Williams reported adjusted income from continuing operations of $122 million, or $0.16 per share, for first quarter 2015, compared with $190 million, or $0.28 per share, for first quarter 2014. The variance in adjusted income was driven by the absence of $173 million of business interruption insurance proceeds included in adjusted results related to the Geismar plant and sharp declines in NGL margins driven by low prices, partially offset by new fee-based revenues from Gulfstar One and Transco expansion projects.
Williams reported unaudited first quarter 2015 net income attributable to Williams of $70 million, or $0.09 per share on a diluted basis, compared with first quarter 2014 net income of $140 million, or $0.20 per share on a diluted basis. The $70 million decrease in net income attributable to Williams was primarily the result of the absence of insurance proceeds received in first quarter 2014 and sharply lower NGL margins, partially offset by the absence of 2014 losses associated with the discontinued Bluegrass Pipeline project and new fee-based revenues from Gulfstar One and Transco expansion projects.
CEO Comment
Alan Armstrong, Williams’ president and chief executive officer, made the following comments:
“First quarter 2015 results showed strong fee-based revenue growth for Williams Partners and we expect the second quarter to be even higher with Gulfstar One and Keathley Canyon Connector nearing full production and additional projects being placed in service such as the Rockaway Lateral and the mainline portion of Leidy Southeast.”
“We’ve reaffirmed 2015-2017 guidance, but we do expect 2015 adjusted EBITDA to be near the low end of the range due to the extended Geismar ramp-up and the effects of low commodity prices on volumes and margins. Williams’ strong annual dividend growth rate of 10 to 15 percent through 2017 with growing coverage remains unchanged.”
“Our strategy remains sound and our backlog of projects to serve the demand side of the growing natural gas market continues to build.”
Business Segment Results
Williams’ business segments for financial reporting are Williams Partners, Williams NGL & Petchem Services and Other.
For periods prior to July 1, 2014, the Other segment includes Williams’ equity earnings from its 50-percent interest in privately held Access Midstream Partners GP, L.L.C. and an approximate 23-percent limited-partner interest in Access Midstream Partners, L.P. As a result of Williams’ acquisition of additional ownership interests, periods after July 1, 2014 include the consolidated results of Access Midstream Partners. Furthermore, following the closing of the merger between Williams Partners and Access Midstream Partners in February 2015, the consolidated results of Access Midstream for periods following July 1, 2014 are now reported as part of the Williams Partners segment.
Williams NGL & Petchem Services segment is comprised of projects in various stages of development, including offgas processing at the CNRL’s Horizon upgrader plant as well as petchem pipeline projects on the Gulf Coast.
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| Williams | | Adjusted EBITDA | |
| Amounts in millions | | 1Q 2015 | | | 1Q 2014 | |
Williams Partners | | $ | 917 | | | $ | 768 | |
Williams NGL & Petchem | | | (5 | ) | | | (5 | ) |
Other | | | 6 | | | | 58 | |
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Total | | $ | 918 | | | $ | 821 | |
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Schedules reconciling adjusted EBITDA to modified EBITDA and net income are attached to this news release.
The first quarter of 2014 includes Williams’ proportional share of the adjusted EBITDA from its equity-method investment in Access Midstream in its Other segment. Following the closing of the merger between Williams Partners and Access Midstream, the consolidated results of Access Midstream are reported as part of the Williams Partners segment. Williams NGL & Petchem Services segment is comprised of projects in various stages of development, including the CNRL Horizon offgas processing project in Canada as well as NGL and petrochemical pipeline projects on the Gulf Coast.
Williams Partners Segment
Williams Partners is focused on natural gas and natural gas liquids (NGL) transportation, gathering, treating, processing and storage; NGL fractionation; olefins production; and crude oil transportation.
Williams Partners reported adjusted EBITDA of $917 million for first quarter 2015, compared with $768 million for first quarter 2014. The increase is due primarily to the contribution of approximately $314 million of adjusted EBITDA from Access Midstream as a result of the merger and new fee-based revenues from Gulfstar One and Transco expansion projects, partially offset by the absence of $173 million of Geismar business interruption proceeds included in adjusted EBITDA in 2014, as well as sharply lower NGL margins.
Williams Partners’ complete financial results for first quarter 2015 are provided in the earnings news release issued today by Williams Partners.
Other Segment
The first quarter of 2014 includes $51 million for Williams’ proportional share of the adjusted EBITDA from Williams’ equity-method investment in Access Midstream, L.P. As a result of Williams’ acquisition of additional ownership interests, periods after July 1, 2014 include the consolidated results of Access Midstream Partners. Furthermore, following the closing of the merger between Williams Partners and Access Midstream Partners in February 2015, the consolidated results of Access Midstream for periods following July 1, 2014 are now reported as part of the Williams Partners segment.
Guidance
Williams is reaffirming its guidance for the years 2015 through 2017 provided on Feb. 18, 2015. We expect Williams Partners’ 2015 adjusted EBITDA and distributable cash flow to be near the low end of the range due to the extended Geismar ramp-up and the effects of low commodity prices on volumes and margins.
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Williams’ current guidance for its earnings and capital expenditures are displayed in the following table:
Williams - Financial outlook and commodity price assumptions
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| | | 2015 | | | 2016 | | | 2017 | |
| | | Low | | | Mid | | | High | | | Low | | | Mid | | | High | | | Low | | | Mid | | | High | |
Adjusted EBITDA (1) | | $ | 4,345 | | | $ | 4,510 | | | $ | 4,675 | | | $ | 5,170 | | | $ | 5,375 | | | $ | 5,580 | | | $ | 5,825 | | | $ | 6,050 | | | $ | 6,275 | |
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Total Capital & Investment Expenditures | | $ | 3,960 | | | $ | 4,275 | | | $ | 4,590 | | | $ | 3,300 | | | $ | 3,605 | | | $ | 3,910 | | | $ | 3,025 | | | $ | 3,325 | | | $ | 3,625 | |
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Williams | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash Available for Dividends (1) | | | | | | $ | 1,875 | | | | | | | | | | | $ | 2,135 | | | | | | | | | | | $ | 2,525 | | | | | |
Cash Dividends | | | | | | $ | 1,785 | | | | | | | | | | | $ | 2,020 | | | | | | | | | | | $ | 2,290 | | | | | |
Dividends per Share | | | | | | $ | 2.38 | | | | | | | | | | | $ | 2.68 | | | | | | | | | | | $ | 3.01 | | | | | |
Dividend Coverage Ratio (1) | | | | | | | 1.05 | x | | | | | | | | | | | 1.06 | x | | | | | | | | | | | 1.10 | x | | | | |
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Williams Partners | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributable Cash Flow (1) | | $ | 2,845 | | | $ | 3,010 | | | $ | 3,175 | | | $ | 3,475 | | | $ | 3,675 | | | $ | 3,875 | | | $ | 3,960 | | | $ | 4,185 | | | $ | 4,410 | |
Cash Distributions | | $ | 3,010 | | | $ | 3,005 | | | $ | 2,995 | | | $ | 3,380 | | | $ | 3,440 | | | $ | 3,515 | | | $ | 3,770 | | | $ | 3,925 | | | $ | 4,090 | |
Cash Distributions per LP Unit | | $ | 3.40 | | | $ | 3.40 | | | $ | 3.40 | | | $ | 3.64 | | | $ | 3.71 | | | $ | 3.78 | | | $ | 3.89 | | | $ | 4.04 | | | $ | 4.19 | |
Cash Distribution Coverage Ratio (1) | | | 0.95 | x | | | 1.00 | x | | | 1.06 | x | | | 1.03 | x | | | 1.07 | x | | | 1.10 | x | | | 1.05 | x | | | 1.07 | x | | | 1.08 | x |
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Commodity Price Assumptions | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Crude Oil - WTI ($ per barrel) | | $ | 45.00 | | | $ | 55.00 | | | $ | 65.00 | | | $ | 53.75 | | | $ | 65.00 | | | $ | 76.25 | | | $ | 57.50 | | | $ | 70.00 | | | $ | 82.50 | |
Natural Gas - Henry Hub ($/MMBtu) | | $ | 2.50 | | | $ | 3.00 | | | $ | 3.50 | | | $ | 2.75 | | | $ | 3.25 | | | $ | 3.75 | | | $ | 3.25 | | | $ | 3.75 | | | $ | 4.25 | |
Composite NGL Barrel ($ per gallon) | | $ | 0.360 | | | $ | 0.450 | | | $ | 0.520 | | | $ | 0.410 | | | $ | 0.490 | | | $ | 0.560 | | | $ | 0.460 | | | $ | 0.550 | | | $ | 0.620 | |
Crack Spread ($ per pound) (2) | | $ | 0.297 | | | $ | 0.350 | | | $ | 0.411 | | | $ | 0.323 | | | $ | 0.376 | | | $ | 0.443 | | | $ | 0.346 | | | $ | 0.395 | | | $ | 0.466 | |
Ethylene spot - ($ per pound) | | $ | 0.360 | | | $ | 0.430 | | | $ | 0.500 | | | $ | 0.395 | | | $ | 0.465 | | | $ | 0.540 | | | $ | 0.430 | | | $ | 0.500 | | | $ | 0.580 | |
Ethane - ($ per gallon) | | $ | 0.150 | | | $ | 0.190 | | | $ | 0.210 | | | $ | 0.170 | | | $ | 0.210 | | | $ | 0.230 | | | $ | 0.200 | | | $ | 0.250 | | | $ | 0.270 | |
Propane ($ per gallon) | | $ | 0.500 | | | $ | 0.600 | | | $ | 0.700 | | | $ | 0.550 | | | $ | 0.650 | | | $ | 0.750 | | | $ | 0.600 | | | $ | 0.700 | | | $ | 0.800 | |
Propylene Spot ($ per pound) | | $ | 0.405 | | | $ | 0.475 | | | $ | 0.545 | | | $ | 0.415 | | | $ | 0.485 | | | $ | 0.555 | | | $ | 0.430 | | | $ | 0.500 | | | $ | 0.570 | |
| (1) | Adjusted EBITDA, distributable cash flow, cash distribution coverage ratio, cash available for dividends and dividend coverage ratio are non-GAAP measures. Reconciliations to the most relevant measures included in GAAP are attached to this news release. |
| (2) | Crack spread is based on delivered U.S. Gulf Coast ethylene and Mont Belvieu ethane. |
Williams, Williams Partners Analyst Day Set for May 13
Williams is scheduled to host its annual Analyst Day event May 13. During the event, Williams’ management will give in-depth presentations covering all of Williams’ and Williams Partners L.P.’s energy infrastructure businesses. The event is scheduled from 8:30 a.m. to approximately 2:30 p.m. EDT.
On the day of the event, www.williams.com will feature presentation files for download along with a link to a live webcast. A replay of the Analyst Day webcast will be available for two weeks following the event.
First Quarter Materials to be Posted Shortly, Q&A Webcast Scheduled for Tomorrow
Williams’ first quarter 2015 financial results will be posted shortly at www.williams.com. The information will include the data book and analyst package.
The company and the partnership will jointly host a conference call and live webcast on Thursday, April 30, at 9:30 a.m. EDT. A limited number of phone lines will be available at (800) 475-3716. International callers should dial (719) 457-2660. A link to the webcast, as well as replays of the webcast in both streaming and downloadable podcast formats, will be available for two weeks following the event at www.williams.com.
Form 10-Q
The company plans to file its first quarter 2015 Form 10-Q with the Securities and Exchange Commission this week. Once filed, the document will be available on both the SEC and Williams websites.
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Definitions of Non-GAAP Financial Measures
This news release includes certain financial measures – adjusted EBITDA, adjusted income from continuing operations (“earnings”), adjusted earnings per share, cash available for dividends, dividend coverage ratio, distributable cash flow and cash distribution coverage ratio – that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission.
Our segment performance measure, modified EBITDA, is defined as net income (loss) before income tax expense, net interest expense, equity earnings from equity-method investments, other net investing income, depreciation and amortization expense, and accretion expense associated with asset retirement obligations for nonregulated operations. We also add our proportional ownership share (based on ownership interest) of modified EBITDA of equity investments.
Adjusted EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations and may include assumed business interruption insurance related to the Geismar plant. Management believes these measures provide investors meaningful insight into results from ongoing operations.
For Williams, cash available for dividends is defined as cash received from its ownership in MLPs, cash received (used) by its NGL & Petchem Services segment (other than cash for capital expenditures) less interest, taxes and maintenance capital expenditures associated with Williams and not the underlying MLPs. We also calculate the ratio of cash available for dividends to the total cash dividends paid (dividend coverage ratio). This measure reflects Williams’ cash available for dividends relative to its actual cash dividends paid.
For Williams Partners L.P., we define distributable cash flow as adjusted EBITDA less maintenance capital expenditures, cash portion of interest expense, income attributable to noncontrolling interests and cash income taxes, plus WPZ restricted stock unit non-cash compensation and certain other adjustments that management believes affects the comparability of results. Adjustments for maintenance capital expenditures and cash portion of interest expense include our proportionate share of these items of our equity-method investments.
For Williams Partners L.P., we also calculate the ratio of distributable cash flow to the total cash distributed (cash distribution coverage ratio). This measure reflects the amount of distributable cash flow relative to our cash distribution. We have also provided this ratio calculated using the most directly comparable GAAP measure, net income.
This news release is accompanied by a reconciliation of these non-GAAP financial measures to their nearest GAAP financial measures. Management uses these financial measures because they are accepted financial indicators used by investors to compare company performance. In addition, management believes that these measures provide investors an enhanced perspective of the operating performance of the Company’s assets and the cash that the business is generating.
Neither adjusted EBITDA, adjusted income from continuing operations, cash available for dividends, nor distributable cash flow are intended to represent cash flows for the period, nor are they presented as an alternative to net income or cash flow from operations. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles.
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About Williams
Williams (NYSE: WMB) is a premier provider of large-scale infrastructure to connect North American natural gas and natural gas products to growing demand for cleaner fuel and feedstocks. Headquartered in Tulsa, Okla., Williams owns approximately 60 percent of Williams Partners L.P. (NYSE: WPZ), including the general-partner interest. Williams Partners is an industry-leading, large-cap master limited partnership with operations across the natural gas value chain from gathering, processing and interstate transportation of natural gas and natural gas liquids to petchem production of ethylene, propylene and other olefins. With major positions in top U.S. supply basins and also in Canada, Williams Partners owns and operates more than 33,000 miles of pipelines system wide – including the nation’s largest volume and fastest growing pipeline – providing natural gas for clean-power generation, home heating and industrial use. Williams Partners’ operations touch approximately 30 percent of U.S. natural gas. www.williams.com
Forward Looking Statements
The reports, filings, and other public announcements of The Williams Companies, Inc. (Williams) and Williams Partners L.P. (WPZ) may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. You typically can identify forward-looking statements by various forms of words such as “anticipates,” “believes,” “seeks,” “could,” “may,” “should,” “continues,” “estimates,” “expects,” “forecasts,” “intends,” “might,” “goals,” “objectives,” “targets,” “planned,” “potential,” “projects,” “scheduled,” “will,” “assumes,” “guidance,” “outlook,” “in service date” or other similar expressions. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management and include, among others, statements regarding:
| | • | | Expected levels of cash distributions by WPZ with respect to general partner interests, incentive distribution rights, and limited partner interests; |
| | • | | The levels of dividends to Williams stockholders; |
| | • | | Future credit ratings of Williams and WPZ; |
| | • | | Amounts and nature of future capital expenditures; |
| | • | | Expansion and growth of our business and operations; |
| | • | | Financial condition and liquidity; |
| | • | | Cash flow from operations or results of operations; |
| | • | | Seasonality of certain business components; |
| | • | | Natural gas, natural gas liquids, and olefins prices, supply, and demand; and |
| | • | | Demand for our services. |
Forward-looking statements are based on numerous assumptions, uncertainties and risks that could cause future events or results to be materially different from those stated or implied in this presentation. Many of the factors that will determine these results are beyond our ability to control or predict. Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include, among others, the following:
| | • | | Whether WPZ will produce sufficient cash flows to provide the level of cash distributions we expect; |
| | • | | Whether Williams is able to pay current and expected levels of dividends; |
| | • | | Availability of supplies, market demand, and volatility of prices; |
| | • | | Inflation, interest rates, and fluctuation in foreign exchange rates and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers); |
| | • | | The strength and financial resources of our competitors and the effects of competition; |
| | • | | Whether we are able to successfully identify, evaluate and execute investment opportunities; |
| | • | | Our ability to acquire new businesses and assets and successfully integrate those operations and assets into our existing businesses as well as successfully expand our facilities; |
| | • | | Development of alternative energy sources; |
| | • | | The impact of operational and developmental hazards and unforeseen interruptions; |
| | • | | Costs of, changes in, or the results of laws, government regulations (including safety and environmental regulations), environmental liabilities, litigation, and rate proceedings; |
| | • | | Williams’ costs and funding obligations for defined benefit pension plans and other postretirement benefit plans; |
| | • | | WPZ’s allocated costs for defined benefit pension plans and other postretirement benefit plans sponsored by its affiliates; |
| | • | | Changes in maintenance and construction costs; |
| | • | | Changes in the current geopolitical situation; |
| | • | | Our exposure to the credit risk of our customers and counterparties; |
| | • | | Risks related to financing, including restrictions stemming from debt agreements, future changes in credit ratings as determined by nationally-recognized credit rating agencies and the availability and cost of capital; |
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| | • | | The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate; |
| | • | | Risks associated with weather and natural phenomena, including climate conditions; |
| | • | | Acts of terrorism, including cybersecurity threats and related disruptions; and |
| | • | | Additional risks described in our filings with the Securities and Exchange Commission (SEC). |
Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement, we caution investors not to unduly rely on our forward-looking statements. We disclaim any obligations to and do not intend to update the above list or announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments.
In addition to causing our actual results to differ, the factors listed above may cause our intentions to change from those statements of intention set forth in this presentation. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise.
Investors are urged to closely consider the disclosures and risk factors in Williams’ and WPZ’s annual reports on Form 10-K filed with the SEC on Feb. 25, 2015, and each of our quarterly reports on Form 10-Q available from our offices or from our website atwww.williams.com.
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Financial Highlights and Operating Statistics
(UNAUDITED)
Final
March 31, 2015
Reconciliation of Income (Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Adjusted Income
(UNAUDITED)
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| | | 2014* | | | 2015 | |
| (Dollars in millions, except per-share amounts) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | |
Income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders | | $ | 140 | | | $ | 99 | | | $ | 1,678 | | | $ | 193 | | | $ | 2,110 | | | $ | 70 | |
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Income (loss) from continuing operations—diluted earnings per common share | | $ | .20 | | | $ | .14 | | | $ | 2.22 | | | $ | .26 | | | $ | 2.91 | | | $ | .09 | |
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Adjustments: | | | | | | | | | | | | | | | | | | | | | | | | |
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Williams Partners | | | | | | | | | | | | | | | | | | | | | | | | |
Merger and transition related expenses | | $ | — | | | $ | — | | | $ | 11 | | | $ | 30 | | | $ | 41 | | | $ | 32 | |
Acquisition-related expenses | | | — | | | | 2 | | | | 13 | | | | 1 | | | | 16 | | | | — | |
Impairment of certain materials and equipment | | | — | | | | 17 | | | | — | | | | 35 | | | | 52 | | | | 3 | |
Share of impairment at equity-method investment | | | — | | | | — | | | | — | | | | — | | | | — | | | | 8 | |
Contingency loss (gain), net of legal costs | | | — | | | | — | | | | — | | | | (143 | ) | | | (143 | ) | | | — | |
Net gain related to partial acreage dedication release | | | — | | | | — | | | | (12 | ) | | | — | | | | (12 | ) | | | — | |
Loss related to compressor station fire | | | 6 | | | | — | | | | — | | | | — | | | | 6 | | | | — | |
Geismar Incident adjustment for insurance and timing | | | 54 | | | | 96 | | | | — | | | | (71 | ) | | | 79 | | | | — | |
Loss related to Geismar Incident | | | — | | | | — | | | | 5 | | | | 5 | | | | 10 | | | | 1 | |
Loss related to Opal incident | | | — | | | | 6 | | | | — | | | | 2 | | | | 8 | | | | 1 | |
Loss on sale of equipment | | | — | | | | — | | | | — | | | | 7 | | | | 7 | | | | — | |
Estimated minimum volume commitments [1] | | | — | | | | — | | | | 47 | | | | (114 | ) | | | (67 | ) | | | 55 | |
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Total Williams Partners adjustments | | | 60 | | | | 121 | | | | 64 | | | | (248 | ) | | | (3 | ) | | | 100 | |
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Williams NGL & Petchem Services | | | | | | | | | | | | | | | | | | | | | | | | |
Bluegrass Pipeline project development costs | | | 25 | | | | 1 | | | | — | | | | (1 | ) | | | 25 | | | | — | |
Bluegrass Pipeline and Moss Lake write-off of previously capitalized project development costs | | | 70 | | | | — | | | | — | | | | — | | | | 70 | | | | — | |
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Total Williams NGL & Petchem Services adjustments | | | 95 | | | | 1 | | | | — | | | | (1 | ) | | | 95 | | | | — | |
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Other | | | | | | | | | | | | | | | | | | | | | | | | |
WMB impact of ACMP transaction-related compensation expenses | | | — | | | | — | | | | 19 | | | | — | | | | 19 | | | | — | |
Transition-related costs | | | — | | | | — | | | | 3 | | | | 7 | | | | 10 | | | | 6 | |
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Total Other adjustments | | | — | | | | — | | | | 22 | | | | 7 | | | | 29 | | | | 6 | |
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Adjustments included in Modified EBITDA | | | 155 | | | | 122 | | | | 86 | | | | (242 | ) | | | 121 | | | | 106 | |
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Adjustments below Modified EBITDA | | | | | | | | | | | | | | | | | | | | | | | | |
Acquisition-related financing expenses—Williams Partners | | | — | | | | 9 | | | | — | | | | — | | | | 9 | | | | 2 | |
Gain on remeasurement of equity-method investment in ACMP—Other | | | — | | | | — | | | | (2,522 | ) | | | (22 | ) | | | (2,544 | ) | | | — | |
Gain associated with ACMP equity issuance—Other | | | — | | | | (4 | ) | | | 4 | | | | — | | | | — | | | | — | |
Interest income on receivable from sale of Venezuela assets—Other | | | (13 | ) | | | (14 | ) | | | (14 | ) | | | — | | | | (41 | ) | | | — | |
Allocation of adjustments to noncontrolling interests | | | (25 | ) | | | (36 | ) | | | 3 | | | | 38 | | | | (20 | ) | | | (33 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (38 | ) | | | (45 | ) | | | (2,529 | ) | | | 16 | | | | (2,596 | ) | | | (31 | ) |
| | | | | | |
Total adjustments | | | 117 | | | | 77 | | | | (2,443 | ) | | | (226 | ) | | | (2,475 | ) | | | 75 | |
Less tax effect for above items | | | (47 | ) | | | (32 | ) | | | 925 | | | | 41 | | | | 887 | | | | (28 | ) |
| | | | | | |
Adjustments for tax-related items [2] | | | (20 | ) | | | 14 | | | | (3 | ) | | | 2 | | | | (7 | ) | | | 5 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Adjusted income from continuing operations available to common stockholders [1] | | $ | 190 | | | $ | 158 | | | $ | 157 | | | $ | 10 | | | $ | 515 | | | $ | 122 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Adjusted diluted earnings per common share [1] | | $ | .28 | | | $ | .23 | | | $ | .21 | | | $ | .01 | | | $ | .71 | | | $ | .16 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Weighted-average shares—diluted (thousands) | | | 688,904 | | | | 700,696 | | | | 752,064 | | | | 751,898 | | | | 723,641 | | | | 752,028 | |
| (1) | The third and fourth quarter of 2014 have been recast to include adjustments to normalize the quarterly impact of approximately $167 million of annual minimum volume commitments related to ACMP that were recorded during the fourth quarter. The recast impacts adjusted diluted earnings per common share by an increase of $.06 in the third quarter 2014 and a decrease of $.15 in the fourth quarter 2014, for a total year decrease of $.09. |
| (2) | The first quarter of 2014 includes an unfavorable adjustment related to completing the dropdown of certain Canadian operations to Williams Partners. The second quarter of 2014 includes a favorable adjustment to reflect taxes on undistributed earnings of certain foreign operations that are no longer considered permanently reinvested. |
Note: 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.
| * | Recast due to the merger between Williams Partners L.P. and Access Midstream Partners, L.P. and the change to Modified EBITDA as our measure of segment performance in first quarter 2015. |
Consolidated Statement of Income
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2014 | | | 2015 | |
| (Dollars in millions, except per-share amounts) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
Service revenues | | $ | 819 | | | $ | 825 | | | $ | 1,127 | | | $ | 1,345 | | | $ | 4,116 | | | $ | 1,197 | |
Product sales | | | 930 | | | | 853 | | | | 942 | | | | 796 | | | | 3,521 | | | | 519 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | | 1,749 | | | | 1,678 | | | | 2,069 | | | | 2,141 | | | | 7,637 | | | | 1,716 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Product costs | | | 769 | | | | 724 | | | | 807 | | | | 716 | | | | 3,016 | | | | 462 | |
Operating and maintenance expenses | | | 298 | | | | 308 | | | | 412 | | | | 474 | | | | 1,492 | | | | 387 | |
Depreciation and amortization expenses | | | 214 | | | | 214 | | | | 369 | | | | 379 | | | | 1,176 | | | | 427 | |
Selling, general, and administrative expenses | | | 150 | | | | 136 | | | | 171 | | | | 204 | | | | 661 | | | | 196 | |
Net insurance recoveries—Geismar Incident | | | (119 | ) | | | (42 | ) | | | — | | | | (71 | ) | | | (232 | ) | | | — | |
Other (income) expense—net | | | 17 | | | | 27 | | | | 3 | | | �� | (92 | ) | | | (45 | ) | | | 17 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total costs and expenses | | | 1,329 | | | | 1,367 | | | | 1,762 | | | | 1,610 | | | | 6,068 | | | | 1,489 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating income (loss) | | | 420 | | | | 311 | | | | 307 | | | | 531 | | | | 1,569 | | | | 227 | |
Equity earnings (losses) | | | (48 | ) | | | 37 | | | | 66 | | | | 89 | | | | 144 | | | | 51 | |
Gain on remeasurement of equity-method investment | | | — | | | | — | | | | 2,522 | | | | 22 | | | | 2,544 | | | | — | |
Other investing income (loss)—net | | | 14 | | | | 18 | | | | 11 | | | | — | | | | 43 | | | | — | |
Interest incurred | | | (169 | ) | | | (192 | ) | | | (262 | ) | | | (265 | ) | | | (888 | ) | | | (273 | ) |
Interest capitalized | | | 29 | | | | 29 | | | | 52 | | | | 31 | | | | 141 | | | | 22 | |
Other income (expense)—net | | | 1 | | | | 4 | | | | 10 | | | | 16 | | | | 31 | | | | 16 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Income (loss) from continuing operations before income taxes | | | 247 | | | | 207 | | | | 2,706 | | | | 424 | | | | 3,584 | | | | 43 | |
Provision (benefit) for income taxes | | | 51 | | | | 84 | | | | 998 | | | | 116 | | | | 1,249 | | | | 30 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | 196 | | | | 123 | | | | 1,708 | | | | 308 | | | | 2,335 | | | | 13 | |
Income (loss) from discontinued operations | | | — | | | | 4 | | | | — | | | | — | | | | 4 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | | 196 | | | | 127 | | | | 1,708 | | | | 308 | | | | 2,339 | | | | 13 | |
Less: Net income attributable to noncontrolling interests | | | 56 | | | | 24 | | | | 30 | | | | 115 | | | | 225 | | | | (57 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) attributable to The Williams Companies, Inc. | | $ | 140 | | | $ | 103 | | | $ | 1,678 | | | $ | 193 | | | $ | 2,114 | | | $ | 70 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Amounts attributable to The Williams Companies, Inc.: | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | $ | 140 | | | $ | 99 | | | $ | 1,678 | | | $ | 193 | | | $ | 2,110 | | | $ | 70 | |
Income (loss) from discontinued operations | | | — | | | | 4 | | | | — | | | | — | | | | 4 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 140 | | | $ | 103 | | | $ | 1,678 | | | $ | 193 | | | $ | 2,114 | | | $ | 70 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Diluted earnings (loss) per common share: | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | $ | .20 | | | $ | .14 | | | $ | 2.22 | | | $ | .26 | | | $ | 2.91 | | | $ | .09 | |
Income (loss) from discontinued operations | | | — | | | | .01 | | | | — | | | | — | | | | .01 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net income (loss) | | $ | .20 | | | $ | .15 | | | $ | 2.22 | | | $ | .26 | | | $ | 2.92 | | | $ | .09 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Weighted-average number of shares used in computations (thousands) | | | 688,904 | | | | 700,696 | | | | 752,064 | | | | 751,898 | | | | 723,641 | | | | 752,028 | |
| | | | | | |
Common shares outstanding at end of period (thousands) | | | 685,419 | | | | 747,190 | | | | 747,453 | | | | 747,531 | | | | 747,531 | | | | 748,912 | |
Market price per common share (end of period) | | $ | 40.58 | | | $ | 58.21 | | | $ | 55.35 | | | $ | 44.94 | | | $ | 44.94 | | | $ | 50.59 | |
| | | | | | |
Common dividends per share | | $ | .4025 | | | $ | .4250 | | | $ | .56 | | | $ | .57 | | | $ | 1.9575 | | | $ | .58 | |
Note: 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.
Reconciliation of Non-GAAP “Modified EBITDA” to Non-GAAP “Adjusted EBITDA”
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2014* | | | 2015 | |
| (Dollars in millions) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | |
Net income (loss) | | $ | 196 | | | $ | 127 | | | $ | 1,708 | | | $ | 308 | | | $ | 2,339 | | | $ | 13 | |
(Income) loss from discontinued operations | | | — | | | | (4 | ) | | | — | | | | — | | | | (4 | ) | | | — | |
Provision (benefit) for income taxes | | | 51 | | | | 84 | | | | 998 | | | | 116 | | | | 1,249 | | | | 30 | |
Interest expense | | | 140 | | | | 163 | | | | 210 | | | | 234 | | | | 747 | | | | 251 | |
Equity (earnings) losses | | | 48 | | | | (37 | ) | | | (66 | ) | | | (89 | ) | | | (144 | ) | | | (51 | ) |
(Gain) on remeasurement of equity-method investments | | | — | | | | — | | | | (2,522 | ) | | | (22 | ) | | | (2,544 | ) | | | — | |
Other investing (income) loss | | | (14 | ) | | | (18 | ) | | | (11 | ) | | | — | | | | (43 | ) | | | — | |
Proportional Modified EBITDA of equity-method investments | | | 28 | | | | 113 | | | | 132 | | | | 165 | | | | 438 | | | | 136 | |
Depreciation and amortization expenses | | | 214 | | | | 214 | | | | 369 | | | | 379 | | | | 1,176 | | | | 427 | |
Accretion for asset retirement obligations associated with nonregulated operations | | | 3 | | | | 6 | | | | 4 | | | | 5 | | | | 18 | | | | 6 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Modified EBITDA | | $ | 666 | | | $ | 648 | | | $ | 822 | | | $ | 1,096 | | | $ | 3,232 | | | $ | 812 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Williams Partners | | $ | 708 | | | $ | 596 | | | $ | 843 | | | $ | 1,097 | | | $ | 3,244 | | | $ | 817 | |
Williams NGL & Petchem Services | | | (100 | ) | | | (8 | ) | | | (4 | ) | | | (3 | ) | | | (115 | ) | | | (5 | ) |
Other | | | 58 | | | | 60 | | | | (17 | ) | | | 2 | | | | 103 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Modified EBITDA | | $ | 666 | | | $ | 648 | | | $ | 822 | | | $ | 1,096 | | | $ | 3,232 | | | $ | 812 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Adjustments included in Modified EBITDA: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Williams Partners | | $ | 60 | | | $ | 121 | | | $ | 64 | | | $ | (248 | ) | | $ | (3 | ) | | $ | 100 | |
Williams NGL & Petchem Services | | | 95 | | | | 1 | | | | — | | | | (1 | ) | | | 95 | | | | — | |
Other | | | — | | | | — | | | | 22 | | | | 7 | | | | 29 | | | | 6 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Adjustments included in Modified EBITDA | | $ | 155 | | | $ | 122 | | | $ | 86 | | | $ | (242 | ) | | $ | 121 | | | $ | 106 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Adjusted EBITDA: | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Williams Partners | | $ | 768 | | | $ | 717 | | | $ | 907 | | | $ | 849 | | | $ | 3,241 | | | $ | 917 | |
Williams NGL & Petchem Services | | | (5 | ) | | | (7 | ) | | | (4 | ) | | | (4 | ) | | | (20 | ) | | | (5 | ) |
Other | | | 58 | | | | 60 | | | | 5 | | | | 9 | | | | 132 | | | | 6 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Adjusted EBITDA | | $ | 821 | | | $ | 770 | | | $ | 908 | | | $ | 854 | | | $ | 3,353 | | | $ | 918 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| * | Recast due to the merger between Williams Partners L.P. and Access Midstream Partners, L.P. and the change to Modified EBITDA as our measure of segment performance in first quarter 2015. |
Williams Partners
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2014* | | | 2015 | |
| (Dollars in millions) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | |
Service revenues | | $ | 763 | | | $ | 763 | | | $ | 1,066 | | | $ | 1,296 | | | $ | 3,888 | | | $ | 1,192 | |
Product sales | | | 930 | | | | 853 | | | | 942 | | | | 796 | | | | 3,521 | | | | 519 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | | 1,693 | | | | 1,616 | | | | 2,008 | | | | 2,092 | | | | 7,409 | | | | 1,711 | |
Segment Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Product costs | | | 769 | | | | 724 | | | | 807 | | | | 716 | | | | 3,016 | | | | 463 | |
Operating and maintenance expenses | | | 245 | | | | 245 | | | | 351 | | | | 419 | | | | 1,260 | | | | 373 | |
Selling, general, and administrative expenses | | | 130 | | | | 134 | | | | 168 | | | | 201 | | | | 633 | | | | 193 | |
Net insurance recoveries—Geismar Incident | | | (119 | ) | | | (42 | ) | | | — | | | | (71 | ) | | | (232 | ) | | | — | |
Other segment costs and expenses | | | 14 | | | | 21 | | | | (11 | ) | | | (105 | ) | | | (81 | ) | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total segment costs and expenses | | | 1,039 | | | | 1,082 | | | | 1,315 | | | | 1,160 | | | | 4,596 | | | | 1,030 | |
Proportional Modified EBITDA of equity-method investments | | | 54 | | | | 62 | | | | 150 | | | | 165 | | | | 431 | | | | 136 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Modified EBITDA | | | 708 | | | | 596 | | | | 843 | | | | 1,097 | | | | 3,244 | | | | 817 | |
Adjustments | | | 60 | | | | 121 | | | | 64 | | | | (248 | ) | | | (3 | ) | | | 100 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 768 | | | $ | 717 | | | $ | 907 | | | $ | 849 | | | $ | 3,241 | | | $ | 917 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating statistics | | | | | | | | | | | | | | | | | | | | | | | | |
Interstate Transmission | | | | | | | | | | | | | | | | | | | | | | | | |
Throughput (Tbtu) | | | 1,141.6 | | | | 938.1 | | | | 978.0 | | | | 1,083.9 | | | | 4,141.6 | | | | 1,207.8 | |
Avg. daily transportation volumes (Tbtu) | | | 12.6 | | | | 10.4 | | | | 10.6 | | | | 11.7 | | | | 11.4 | | | | 13.5 | |
Avg. daily firm reserved capacity (Tbtu) | | | 12.6 | | | | 12.4 | | | | 12.5 | | | | 12.9 | | | | 12.9 | | | | 13.5 | |
| | | | | | |
Former WPZ Operations Gathering and Processing(1) | | | | | | | | | | | | | | | | | | | | | | | | |
Gathering volumes (Tbtu) | | | 436 | | | | 450 | | | | 461 | | | | 487 | | | | 1,834 | | | | 493 | |
Plant inlet natural gas volumes (Tbtu) | | | 339 | | | | 344 | | | | 370 | | | | 366 | | | | 1,419 | | | | 360 | |
| | | | | | |
Former ACMP Gathering Operations Throughput, bcf per day (2) | | | | | | | | | | | | | | | | | | | | | | | | |
Barnett shale | | | — | | | | — | | | | 0.876 | | | | 0.853 | | | | 0.865 | | | | 0.812 | |
Eagle Ford shale | | | — | | | | — | | | | 0.348 | | | | 0.376 | | | | 0.362 | | | | 0.388 | |
Haynesville shale | | | — | | | | — | | | | 0.714 | | | | 0.802 | | | | 0.758 | | | | 0.971 | |
Marcellus shale | | | — | | | | — | | | | 1.193 | | | | 1.272 | | | | 1.233 | | | | 1.232 | |
Niobrara shale | | | — | | | | — | | | | 0.030 | | | | 0.034 | | | | 0.032 | | | | 0.039 | |
Utica shale | | | — | | | | — | | | | 0.418 | | | | 0.484 | | | | 0.451 | | | | 0.513 | |
Mid-Continent | | | — | | | | — | | | | 0.554 | | | | 0.537 | | | | 0.545 | | | | 0.506 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total throughput | | | — | | | | — | | | | 4.133 | | | | 4.358 | | | | 4.246 | | | | 4.461 | |
| | | | | | |
Ethane equity sales (million gallons) | | | 33 | | | | 39 | | | | 42 | | | | 43 | | | | 157 | | | | 54 | |
Non-ethane equity sales (million gallons) | | | 113 | | | | 108 | | | | 124 | | | | 131 | | | | 476 | | | | 131 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
NGL equity sales (million gallons) | | | 146 | | | | 147 | | | | 166 | | | | 174 | | | | 633 | | | | 185 | |
| | | | | | |
Ethane margin ($/gallon) | | $ | 0.20 | | | $ | 0.18 | | | $ | 0.16 | | | $ | 0.17 | | | $ | 0.17 | | | $ | 0.13 | |
Non-ethane margin ($/gallon) | | $ | 0.88 | | | $ | 0.80 | | | $ | 0.78 | | | $ | 0.58 | | | $ | 0.76 | | | $ | 0.28 | |
NGL margin ($/gallon) | | $ | 0.73 | | | $ | 0.64 | | | $ | 0.63 | | | $ | 0.48 | | | $ | 0.61 | | | $ | 0.24 | |
| | | | | | |
Ethane production (million gallons) | | | 135 | | | | 173 | | | | 154 | | | | 163 | | | | 625 | | | | 111 | |
Non-ethane production (million gallons) | | | 372 | | | | 384 | | | | 417 | | | | 408 | | | | 1,581 | | | | 405 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
NGL production (million gallons) | | | 507 | | | | 557 | | | | 571 | | | | 571 | | | | 2,206 | | | | 516 | |
| | | | | | |
Petrochemical Services | | | | | | | | | | | | | | | | | | | | | | | | |
Geismar ethylene sales volumes (million lbs) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2 | |
Geismar ethylene margin ($/lb) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | |
Equity investments—100% | | | | | | | | | | | | | | | | | | | | | | | | |
Discovery NGL equity sales (million gallons) | | | 10 | | | | 10 | | | | 18 | | | | 15 | | | | 53 | | | | 17 | |
Discovery NGL production (million gallons) | | | 47 | | | | 54 | | | | 65 | | | | 61 | | | | 227 | | | | 62 | |
Laurel Mountain gathering volumes (Tbtu) | | | 34 | | | | 36 | | | | 38 | | | | 40 | | | | 148 | | | | 40 | |
Overland Pass NGL transportation volumes (Mbbls) | | | 8,612 | | | | 8,926 | | | | 9,482 | | | | 10,118 | | | | 37,138 | | | | 10,845 | |
| * | Recast due to the merger between Williams Partners L.P. and Access Midstream Partners, L.P. and the change to Modified EBITDA as our measure of segment performance in the first quarter 2015. |
| (1) | Excludes volumes associated with partially owned assets that are not consolidated for financial reporting purposes. |
| (2) | Throughput in all regions represents the net throughput allocated to the Partnership’s interest. |
Williams NGL & Petchem Services
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2014* | | | 2015 | |
| (Dollars in millions) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | |
Segment costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Operating and maintenance expenses | | $ | 2 | | | $ | 1 | | | $ | 2 | | | $ | 2 | | | $ | 7 | | | $ | 4 | |
Selling, general, and administrative expenses | | | 22 | | | | 4 | | | | 4 | | | | 1 | | | | 31 | | | | 2 | |
Other (income) expense—net | | | (1 | ) | | | 1 | | | | (1 | ) | | $ | — | | | | (1 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total segment costs and expenses | | | 23 | | | | 6 | | | | 5 | | | | 3 | | | | 37 | | | | 5 | |
Proportional Modified EBITDA of equity-method investments | | | (77 | ) | | | (2 | ) | | | 1 | | | | — | | | | (78 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Modified EBITDA | | | (100 | ) | | | (8 | ) | | | (4 | ) | | | (3 | ) | | | (115 | ) | | | (5 | ) |
Adjustments | | | 95 | | | | 1 | | | | — | | | | (1 | ) | | | 95 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | (5 | ) | | $ | (7 | ) | | $ | (4 | ) | | $ | (4 | ) | | $ | (20 | ) | | $ | (5 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| * | Recast due to the change to Modified EBITDA as our measure of segment performance in first quarter 2015. |
Capital Expenditures and Investments
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2014** | | | 2015 | |
| (Dollars in millions) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | |
Capital expenditures: | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 724 | | | $ | 943 | | | $ | 1,029 | | | $ | 996 | | | $ | 3,692 | | | $ | 735 | |
Williams NGL & Petchem Services | | | 61 | | | | 85 | | | | 62 | | | | 78 | | | | 286 | | | | 91 | |
Other | | | 8 | | | | 18 | | | | 13 | | | | 14 | | | | 53 | | | | 6 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total* | | $ | 793 | | | $ | 1,046 | | | $ | 1,104 | | | $ | 1,088 | | | $ | 4,031 | | | $ | 832 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Purchase of business (net of cash acquired): | | | | | | | | | | | | | | | | | | | | | | | | |
Other | | $ | — | | | $ | — | | | $ | 5,958 | | | $ | — | | | $ | 5,958 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Purchase of investments: | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 215 | | | $ | 16 | | | $ | 99 | | | $ | 138 | | | $ | 468 | | | $ | 83 | |
Williams NGL & Petchem Services | | | 13 | | | | 2 | | | | — | | | | (1 | ) | | | 14 | | | | — | |
Other | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 228 | | | $ | 18 | | | $ | 99 | | | $ | 137 | | | $ | 482 | | | $ | 83 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Summary: | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 939 | | | $ | 959 | | | $ | 1,128 | | | $ | 1,134 | | | $ | 4,160 | | | $ | 818 | |
Williams NGL & Petchem Services | | | 74 | | | | 87 | | | | 62 | | | | 77 | | | | 300 | | | | 91 | |
Other | | | 8 | | | | 18 | | | | 5,971 | | | | 14 | | | | 6,011 | | | | 6 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,021 | | | $ | 1,064 | | | $ | 7,161 | | | $ | 1,225 | | | $ | 10,471 | | | $ | 915 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Capital expenditures incurred, purchase of business (net of cash acquired), and purchase of investments: | | | | | | | | | | | | | | | | | | | | | | | | |
Increases to property, plant, and equipment | | $ | 840 | | | $ | 949 | | | $ | 1,113 | | | $ | 1,014 | | | $ | 3,916 | | | $ | 738 | |
Purchase of businesses (net of cash acquired) | | | — | | | | — | | | | 5,958 | | | | — | | | | 5,958 | | | | — | |
Purchase of investments | | | 228 | | | | 18 | | | | 99 | | | | 137 | | | | 482 | | | | 83 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,068 | | | $ | 967 | | | $ | 7,170 | | | $ | 1,151 | | | $ | 10,356 | | | $ | 821 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
*Increases to property, plant, and equipment | | $ | 840 | | | $ | 949 | | | $ | 1,113 | | | $ | 1,014 | | | $ | 3,916 | | | $ | 738 | |
Changes in related accounts payable and accrued liabilities | | | (47 | ) | | | 97 | | | | (9 | ) | | | 74 | | | | 115 | | | | 94 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capital expenditures | | $ | 793 | | | $ | 1,046 | | | $ | 1,104 | | | $ | 1,088 | | | $ | 4,031 | | | $ | 832 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| ** | Recast due to the merger between Williams Partners L.P. and Access Midstream Partners, L.P. in first quarter 2015. |
Depreciation and Amortization and Other Selected Financial Data
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2014* | | | 2015 | |
| (Dollars in millions) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | |
Depreciation and amortization: | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 208 | | | $ | 207 | | | $ | 364 | | | $ | 372 | | | $ | 1,151 | | | $ | 419 | |
Other | | | 6 | | | | 7 | | | | 5 | | | | 7 | | | | 25 | | | | 8 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 214 | | | $ | 214 | | | $ | 369 | | | $ | 379 | | | $ | 1,176 | | | $ | 427 | |
| | | | | | |
Other selected financial data: | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 1,064 | | | $ | 860 | | | $ | 302 | | | $ | 240 | | | $ | 240 | | | $ | 341 | |
Total assets | | $ | 28,306 | | | $ | 34,949 | | | $ | 49,807 | | | $ | 50,563 | | | $ | 50,563 | | | $ | 50,457 | |
Capital structure: | | | | | | | | | | | | | | | | | | | | | | | | |
Debt | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial paper | | $ | — | | | $ | — | | | $ | 265 | | | $ | 798 | | | $ | 798 | | | $ | — | |
Current | | $ | 751 | | | $ | 751 | | | $ | 754 | | | $ | 4 | | | $ | 4 | | | $ | 801 | |
Noncurrent | | $ | 12,099 | | | $ | 15,539 | | | $ | 19,922 | | | $ | 20,888 | | | $ | 20,888 | | | $ | 21,690 | |
Stockholders’ equity | | $ | 4,616 | | | $ | 7,863 | | | $ | 9,129 | | | $ | 8,777 | | | $ | 8,777 | | | $ | 8,212 | |
Debt to debt-plus-stockholders’ equity ratio | | | 73.6 | % | | | 67.4 | % | | | 69.6 | % | | | 71.2 | % | | | 71.2 | % | | | 73.3 | % |
| | | | | | |
Cash distributions received from interests in: | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners L.P. | | | | | | | | | | | | | | | | | | | | | | | | |
General partner | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 226 | |
Limited partner | | | — | | | | — | | | | — | | | | — | | | | — | | | | 289 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 515 | |
Pre-merger Williams Partners L.P. | | | | | | | | | | | | | | | | | | | | | | | | |
General partner | | $ | 164 | | | $ | 170 | | | $ | 175 | | | $ | 178 | | | $ | 687 | | | $ | — | |
Limited partner | | | 250 | | | | 252 | | | | 256 | | | | 260 | | | | 1,018 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 414 | | | $ | 422 | | | $ | 431 | | | $ | 438 | | | $ | 1,705 | | | $ | — | |
Access Midstream Partners, L.P. | | | | | | | | | | | | | | | | | | | | | | | | |
General partner | | $ | 9 | | | $ | 10 | | | $ | 25 | | | $ | 29 | | | $ | 73 | | | $ | — | |
Limited partner | | | 22 | | | | 23 | | | | 53 | | | | 54 | | | | 152 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 31 | | | $ | 33 | | | $ | 78 | | | $ | 83 | | | $ | 225 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 445 | | | $ | 455 | | | $ | 509 | | | $ | 521 | | | $ | 1,930 | | | $ | 515 | |
| * | Recast due to the merger between Williams Partners L.P. and Access Midstream Partners, L.P. in first quarter 2015. |
Dividend Coverage Ratio
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2014 | | | 2015 | |
| (Dollars in millions, except per share amounts) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | |
Distributions from Pre-merger WPZ (accrued / “as declared” basis) | | $ | 422 | | | $ | 431 | | | $ | 438 | | | $ | — | | | $ | 1,291 | | | $ | — | |
Distributions from ACMP (accrued / “as declared” basis) | | | 33 | | | | 78 | | | | 83 | | | | — | | | | 194 | | | | — | |
Distributions from WPZ (accrued / “as declared” basis) | | | — | | | | — | | | | — | | | | 515 | | | | 515 | | | | 515 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total distributions from Pre-merger WPZ, ACMP, and WPZ | | | 455 | | | | 509 | | | | 521 | | | | 515 | | | | 2,000 | | | | 515 | |
Williams NGL & Petchem Services adjusted cash flow (see below)*(1) | | | (5 | ) | | | (9 | ) | | | (5 | ) | | | (5 | ) | | | (24 | ) | | | (5 | ) |
Corporate interest | | | (38 | ) | | | (50 | ) | | | (65 | ) | | | (54 | ) | | | (207 | ) | | | (64 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Subtotal | | | 412 | | | | 450 | | | | 451 | | | | 456 | | | | 1,769 | | | | 446 | |
WMB cash tax rate | | | 3 | % | | | 3 | % | | | — | % | | | — | % | | | 2 | % | | | -12 | % |
WMB cash taxes (excludes cash taxes paid by WPZ)(2) | | | (13 | ) | | | (14 | ) | | | — | | | | — | | | | (27 | ) | | | 55 | |
Corporate Capex | | | (8 | ) | | | (18 | ) | | | (13 | ) | | | (14 | ) | | | (53 | ) | | | (6 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
WMB cash flow available for dividends | | $ | 391 | | | $ | 418 | | | $ | 438 | | | $ | 442 | | | $ | 1,689 | | | $ | 495 | |
- per share | | $ | 0.57 | | | $ | 0.61 | | | $ | 0.59 | | | $ | 0.59 | | | $ | 2.36 | | | $ | 0.66 | |
WMB dividends paid | | | (276 | ) | | | (291 | ) | | | (419 | ) | | | (426 | ) | | | (1,412 | ) | | | (434 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Excess cash flow available after dividends | | $ | 115 | | | $ | 127 | | | $ | 19 | | | $ | 16 | | | $ | 277 | | | $ | 61 | |
Dividend per share | | $ | 0.4025 | | | $ | 0.4250 | | | $ | 0.5600 | | | $ | 0.5700 | | | $ | 1.9575 | | | $ | 0.5800 | |
Coverage ratio(3) | | | 1.42 | | | | 1.44 | | | | 1.05 | | | | 1.04 | | | | 1.20 | | | | 1.14 | |
| | | | | | |
Williams NGL & Petchem Services Adjusted Cash Flow:* | | | | | | | | | | | | | | | | | | | | | | | | |
Modified EBITDA | | | (100 | ) | | | (8 | ) | | | (4 | ) | | | (3 | ) | | | (115 | ) | | | (5 | ) |
Segment adjustments | | | 95 | | | | 1 | | | | — | | | | (1 | ) | | | 95 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | | (5 | ) | | | (7 | ) | | | (4 | ) | | | (4 | ) | | | (20 | ) | | | (5 | ) |
Less: Maintenance Capex | | | — | | | | (2 | ) | | | (1 | ) | | | (1 | ) | | | (4 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted cash flow | | | (5 | ) | | | (9 | ) | | | (5 | ) | | | (5 | ) | | | (24 | ) | | | (5 | ) |
| * | Recast due to the change to Modified EBITDA as our measure of segment performance in first quarter 2015. |
| Notes: | (1) Targeted for dropdown in the future. |
(2) A 2014 tax Net Operating Loss, due to bonus depreciation, yielded a carryback refund from 2012.
(3) WMB cash flow available for dividends / WMB dividends paid.
WMB Net Income to Adjusted EBITDA
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2015 | | | 2016 | | | 2017 | |
| ($ in millions) | | Low | | | Base | | | High | | | Low | | | Base | | | High | | | Low | | | Base | | | High | |
Net income from continuing operations | | | 925 | | | | 1,050 | | | | 1,175 | | | | 1,275 | | | | 1,435 | | | | 1,595 | | | | 1,650 | | | | 1,825 | | | | 2,000 | |
Add: Net interest expense | | | 1,095 | | | | 1,095 | | | | 1,095 | | | | 1,225 | | | | 1,220 | | | | 1,215 | | | | 1,335 | | | | 1,325 | | | | 1,315 | |
Add: Provision for income taxes | | | 380 | | | | 420 | | | | 460 | | | | 495 | | | | 545 | | | | 595 | | | | 585 | | | | 645 | | | | 705 | |
Add: Depreciation & amortization (DD&A) | | | 1,750 | | | | 1,750 | | | | 1,750 | | | | 1,870 | | | | 1,870 | | | | 1,870 | | | | 1,945 | | | | 1,945 | | | | 1,945 | |
Less: Equity earnings from investments | | | (380 | ) | | | (385 | ) | | | (390 | ) | | | (495 | ) | | | (505 | ) | | | (515 | ) | | | (645 | ) | | | (660 | ) | | | (675 | ) |
Add: Proportionate share of EBITDA from investments1 | | | 665 | | | | 670 | | | | 675 | | | | 800 | | | | 810 | | | | 820 | | | | 955 | | | | 970 | | | | 985 | |
Adjustments2 | | | (90 | ) | | | (90 | ) | | | (90 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 4,345 | | | $ | 4,510 | | | $ | 4,675 | | | $ | 5,170 | | | $ | 5,375 | | | $ | 5,580 | | | $ | 5,825 | | | $ | 6,050 | | | $ | 6,275 | |
| | | |
| | | 2015 | | | 2016 | | | 2017 | |
| 1) Proportionate Share of EBITDA from investments: | | Low | | | Base | | | High | | | Low | | | Base | | | High | | | Low | | | Base | | | High | |
| | | | | | | | | |
Net income from continuing operations | | $ | 380 | | | $ | 385 | | | $ | 390 | | | $ | 495 | | | $ | 505 | | | $ | 515 | | | $ | 645 | | | $ | 660 | | | $ | 675 | |
Add: Net interest expense | | | 53 | | | | 53 | | | | 53 | | | | 58 | | | | 58 | | | | 58 | | | | 61 | | | | 61 | | | | 61 | |
Add: Depreciation & amortization (DD&A) | | | 206 | | | | 206 | | | | 206 | | | | 226 | | | | 226 | | | | 226 | | | | 236 | | | | 236 | | | | 236 | |
Other | | | 26 | | | | 26 | | | | 26 | | | | 21 | | | | 21 | | | | 21 | | | | 13 | | | | 13 | | | | 13 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA from Equity Investments | | $ | 665 | | | $ | 670 | | | $ | 675 | | | $ | 800 | | | $ | 810 | | | $ | 820 | | | $ | 955 | | | $ | 970 | | | $ | 985 | |
| | | |
| | | 2015 | | | 2016 | | | 2017 | |
| 2) Adjustments: | | Low | | | Base | | | High | | | Low | | | Base | | | High | | | Low | | | Base | | | High | |
| | | | | | | | | |
Geismar incident adjustment for insurance and timing (WPZ) | | ($ | 150 | ) | | ($ | 150 | ) | | ($ | 150 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
ACMP retention expenses (WPZ) | | | 35 | | | | 35 | | | | 35 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
ACMP acquisition-related expenses | | | 25 | | | | 25 | | | | 25 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Adjustments | | ($ | 90 | ) | | ($ | 90 | ) | | ($ | 90 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
WPZ Distributable Cash Flow and Cash Distribution Coverage Ratio
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2015 | | | 2016 | | | 2017 | |
| Dollars in millions, except per L.P. unit | | Low | | | Base | | | High | | | Low | | | Base | | | High | | | Low | | | Base | | | High | |
| | | | | | | | | |
Adjusted EBITDA1 | | $ | 4,300 | | | $ | 4,465 | | | $ | 4,630 | | | $ | 5,120 | | | $ | 5,315 | | | $ | 5,510 | | | $ | 5,750 | | | $ | 5,965 | | | $ | 6,180 | |
Less: Maintenance Capex2 | | | (430 | ) | | | (430 | ) | | | (430 | ) | | | (440 | ) | | | (440 | ) | | | (440 | ) | | | (440 | ) | | | (440 | ) | | | (440 | ) |
Less: Interest Expense (cash portion)3 | | | (885 | ) | | | (885 | ) | | | (885 | ) | | | (1,000 | ) | | | (995 | ) | | | (990 | ) | | | (1,110 | ) | | | (1,100 | ) | | | (1,090 | ) |
Less: Cash Taxes | | | (5 | ) | | | (5 | ) | | | (5 | ) | | | (10 | ) | | | (10 | ) | | | (10 | ) | | | (10 | ) | | | (10 | ) | | | (10 | ) |
Less: Noncontrolling Interests | | | (135 | ) | | | (135 | ) | | | (135 | ) | | | (195 | ) | | | (195 | ) | | | (195 | ) | | | (230 | ) | | | (230 | ) | | | (230 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributable Cash Flow Attributable to Partnership Operations | | $ | 2,845 | | | $ | 3,010 | | | $ | 3,175 | | | $ | 3,475 | | | $ | 3,675 | | | $ | 3,875 | | | $ | 3,960 | | | $ | 4,185 | | | $ | 4,410 | |
| | | | | | | | | |
Cash Distributions (accrued) | | $ | 3,010 | | | $ | 3,005 | | | $ | 2,995 | | | $ | 3,380 | | | $ | 3,440 | | | $ | 3,515 | | | $ | 3,770 | | | $ | 3,925 | | | $ | 4,090 | |
- per L.P. Unit | | $ | 3.40 | | | $ | 3.40 | | | $ | 3.40 | | | $ | 3.64 | | | $ | 3.71 | | | $ | 3.78 | | | $ | 3.89 | | | $ | 4.04 | | | $ | 4.19 | |
- Annual growth rate | | | | | | | | | | | | | | | 7 | % | | | 9 | % | | | 11 | % | | | 7 | % | | | 9 | % | | | 11 | % |
| | | | | | | | | |
Cash Distribution Coverage Ratio | | | 0.95 | x | | | 1.00 | x | | | 1.06 | x | | | 1.03 | x | | | 1.07 | x | | | 1.10 | x | | | 1.05 | x | | | 1.07 | x | | | 1.08 | x |
Notes:1A more detailed schedule reconciling this non-GAAP measure is provided in this presentation. 2 Includes proportionate share of maintenance capex of equity investments 3 Includes proportionate share of interest expense of equity investments
WMB Dividend Illustration and Coverage Calculation
(Midpoint of guidance, dollars in millions except per share amounts)
| | | | | | | | | | | | |
| | | 2015 | | | 2016 | | | 2017 | |
Distributions from MLP | | $ | 2,140 | | | $ | 2,455 | | | $ | 2,805 | |
Williams NGL & Petchem Services Adjusted Cash Flow (see below) | | | (5 | ) | | | — | | | | 25 | |
Corporate Interest | | | (255 | ) | | | (260 | ) | | | (260 | ) |
| | | | | | | | | | | | |
Subtotal | | | 1,880 | | | | 2,195 | | | | 2,570 | |
WMB Cash Tax Rate1 | | | -2.9 | % | | | 0.0 | % | | | 0.2 | % |
WMB Cash Taxes (excludes cash taxes paid by MLP) | | | 55 | | | | — | | | | (5 | ) |
Corporate Capex and Other | | | (60 | ) | | | (60 | ) | | | (40 | ) |
| | | | | | | | | | | | |
WMB Cash Flow Available for Dividends | | $ | 1,875 | | | $ | 2,135 | | | $ | 2,525 | |
- per share | | $ | 2.50 | | | $ | 2.83 | | | $ | 3.32 | |
WMB Expected Dividends Paid | | | (1,785 | ) | | | (2,020 | ) | | | (2,290 | ) |
| | | | | | | | | | | | |
Excess Cash Flow Available After Dividends | | $ | 90 | | | $ | 115 | | | $ | 235 | |
Coverage Ratio2 | | | 1.05 | x | | | 1.06 | x | | | 1.10 | x |
Dividend Per Share | | $ | 2.38 | | | $ | 2.68 | | | $ | 3.01 | |
Annual Growth Rate | | | 22 | % | | | 12.5 | % | | | 12.5 | % |
| | | |
Williams NGL & Petchem Services Adjusted Cash Flow: | | | | | | | | | | | | |
Adjusted EBITDA (see reconciliation provided in this presentation) | | | (5 | ) | | | 5 | | | | 30 | |
Maintenance Capital | | | — | | | | (5 | ) | | | (5 | ) |
| | | | | | | | | | | | |
Adjusted Cash Flow | | | (5 | ) | | | — | | | | 25 | |
Notes:1Near-term tax rates are lower than longer-term rates due to accelerated depreciation and deductions related to our investment in ACMP. A 2014 tax Net Operating Loss, due to bonus depreciation, will yield a carryback refund from 2012 and a carryforward reducing taxes through 2017. The average tax rate for 2018–2019 is expected to be approximately 4%, which represents a blended rate on MLP distributions, WMB NGL Petchem earnings, and corporate interest expense as well other tax items impacting the WMB corporate entity. 2 WMB Cash Flow Available for Dividends / WMB Expected Dividends Paid.
