Exhibit 99.1
| | | | | | |
| News Release | | | | Williams (NYSE: WMB) One Williams Center Tulsa, OK 74172 800-Williams www.williams.com | |  |
DATE: July 29, 2015
| | | | |
| MEDIA CONTACT: | | INVESTOR CONTACTS: | | |
Tom Droege (918) 573-4034 | | John Porter (918) 573-0797 | | Brett Krieg (918) 573-4614 |
Williams Reports Second-Quarter 2015 Financial Results
| | • | | 2Q 2015 Adjusted EBITDA is $1.02 Billion, Up 32% vs. 2Q 2014 |
| | • | | Williams Partners Fee-Based Revenues Up $537 Million or 72% on Access Midstream Merger, Major Projects Ramping Up |
| | • | | Excluding Access Midstream Merger, Williams Partners 2Q 2015 Fee-Based Revenue Up $130 Million, or 17% |
| | • | | Reaffirming Williams Dividend Guidance of $0.64 per Share in 3Q 2015 or $2.56 Annualized; $2.85 in 2016 with 10% to 15% Annual Dividend Growth through 2020 |
TULSA, Okla. – Williams (NYSE: WMB) today announced second-quarter 2015 adjusted EBITDA of $1.02 billion, compared with $770 million in second quarter 2014, an increase of $247 million, or 32 percent.
The increase reflects higher adjusted EBITDA for Williams Partners resulting from the benefit of the Access Midstream acquisition and new projects placed in service. Partially offsetting these increases were lower Geismar results from the absence of assumed business interruption insurance proceeds and lower NGL margins.
Year-to-date 2015, Williams reported $1.94 billion in adjusted EBITDA, a $344 million, or 22 percent increase from the same period last year. The increase in the year-to-date period was also driven primarily by Williams Partners’ adjusted EBITDA, and the drivers were similar to those discussed for the quarterly period.
| | | | | | | | | | | | | | | | |
| Williams Summary Financial Information | | 2Q | | | YTD | |
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 | | | 2015 | | | 2014 | |
| (Unaudited) | | | | | | | | | | | | |
Adjusted EBITDA (1) | | $ | 1,017 | | | $ | 770 | | | $ | 1,935 | | | $ | 1,591 | |
Adjusted income from continuing operations (1) | | $ | 110 | | | $ | 158 | | | $ | 232 | | | $ | 348 | |
Adjusted income from continuing operations per share (1) | | $ | 0.15 | | | $ | 0.23 | | | $ | 0.31 | | | $ | 0.50 | |
Net income | | $ | 114 | | | $ | 103 | | | $ | 184 | | | $ | 243 | |
Net income per share | | $ | 0.15 | | | $ | 0.15 | | | $ | 0.24 | | | $ | 0.35 | |
| (1) | Schedules reconciling 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. |
Williams reported adjusted income from continuing operations of $110 million, or $0.15 per share, in second quarter 2015, compared with $158 million, or $0.23 per share, in second quarter 2014. The decrease in adjusted income for second quarter 2015 is due primarily to the absence in 2015 of assumed Geismar business interruption proceeds, increased interest expense associated with new debt issuances and higher depreciation expense due to significant projects that were placed into service in 2014 and 2015, as well as declines in NGL margins driven by lower prices. These decreases were partially offset by new fee revenues associated with certain growth projects that were placed in service in 2014 and 2015.
1
Year-to-date 2015, Williams reported $232 million in adjusted income from continuing operations, a $116 million decrease from the same period last year. The decrease in year-to-date adjusted income was driven by the same factors that drove the decrease in quarterly adjusted income.
Williams reported unaudited second quarter 2015 net income attributable to Williams of $114 million, or $0.15 per share on a diluted basis, compared with second quarter 2014 net income of $103 million, or $0.15 per share on a diluted basis. The $11 million increase in net income attributable to Williams in second quarter 2015 was driven primarily by new fee-based revenues from Gulfstar One and Transco expansion projects and increased insurance recoveries associated with the Geismar incident. These increases were partially offset by increased interest expense associated with new debt issuances, higher depreciation expense due to significant projects that were placed in service in 2014 and 2015, as well as declines in NGL margins driven by lower prices.
Year-to-date 2015, Williams reported net income of $184 million, or $0.24 per share on a diluted basis, compared with net income of $243 million, or $0.35 per share, for the same period last year. The year-to-date changes in net income were impacted by the same factors as the quarterly period with the exception of year-to-date Geismar insurance recoveries being lower in the current year and the absence of equity losses in 2014 associated with the discontinuance of the Bluegrass Pipeline project.
CEO Comment
Alan Armstrong, Williams’ president and chief executive officer, made the following comments:
“Second quarter results further demonstrate the benefits from our clearly defined strategy of capitalizing on the significant natural gas market growth by connecting the best supplies to the best markets. This strategy has and will continue to deliver significant growth in our fee-based revenues.
“The large-scale infrastructure projects we recently placed into service – including Transco expansions and Gulf of Mexico facilities – generated significant fee-based revenues in the second quarter and we expect those numbers to continue growing throughout 2015.
“As well, the Geismar plant ramped up in the second quarter and is now online and consistently operating at or near its full production capacity. We look forward to the significant contributions the plant will make in the second half of the year.”
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.
2
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.
| | | | | | | | | | | | | | | | |
| Williams | | Adjusted EBITDA | |
| | | 2Q | | | YTD | |
| Amounts in millions | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
Williams Partners | | $ | 1,008 | | | $ | 717 | | | $ | 1,925 | | | $ | 1,485 | |
Williams NGL & Petchem | | | (3 | ) | | | (7 | ) | | | (8 | ) | | | (12 | ) |
Other | | | 12 | | | | 60 | | | | 18 | | | | 118 | |
| | | | | | | | | | | | | | | | |
Total | | $ | 1,017 | | | $ | 770 | | | $ | 1,935 | | | $ | 1,591 | |
| | | | | | | | | | | | | | | | |
Schedules reconciling adjusted EBITDA to modified EBITDA and net income are attached to this news release.
The first quarter and second quarter of 2014 include 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 second quarter 2015 adjusted EBITDA of $1.01 billion, a $291 million, or 41 percent, increase from second quarter 2014. The increase in adjusted EBITDA in second quarter 2015 was driven by $537 million, or 72 percent, higher fee-based revenues including assumed minimum volume commitments compared with second quarter 2014. This increase reflects the benefit of the Access Midstream acquisition and new fee-based revenues from assets placed in service, including Gulfstar One and Transco expansion projects. Excluding the Access Midstream acquisition, Williams Partners second-quarter 2015 fee-based revenue was up $130 million, or 17 percent. Geismar contributed approximately $50 million of olefins margins in second quarter 2015. Additionally, the proportional EBITDA from non-consolidated joint ventures increased $121 million for second quarter 2015 versus second quarter 2014, including $92 million from the addition of Access Midstream’s joint ventures and $33 million driven by Discovery’s Keathley Canyon Connector project ramp up.
Partially offsetting these increases were $210 million higher operating and general and administrative expenses versus second quarter 2014 primarily as a result of the Access Midstream acquisition, the absence of $138 million of assumed business interruption insurance proceeds related to the Geismar plant and $56 million in lower NGL margins due primarily to NGL prices that are at a 10-year low.
Year-to-date 2015, Williams Partners reported adjusted EBITDA of $1.93 billion, a $440 million, or 30 percent, increase from the same period last year. The year-to-date increase in adjusted EBITDA was driven primarily by the same factors that drove the quarterly results for adjusted EBITDA.
Williams Partners’ complete financial results for second quarter 2015 are provided in the earnings news release issued today by Williams Partners.
Other Segment
The first and second quarters of 2014 include $51 million and $53 million, respectively, 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.
3
Williams Strategic Alternatives Review
On June 21, 2015, Williams announced that it had received and subsequently rejected an unsolicited proposal to be acquired in an all-equity transaction contingent on the termination of Williams’ proposed acquisition of Williams Partners. Williams also announced that its board of directors authorized a process to explore a range of strategic alternatives, which could include, among other things, a merger, a sale, or continuing to pursue its existing operating and growth plan. The process is well underway. Depending on the outcome of the board’s review, Williams anticipates that any shareholder vote seeking approval of the pending Williams Partners transaction would occur after the process is completed.
Guidance
Williams reaffirmed its previously announced plans to increase its third-quarter 2015 dividend to $0.64, or $2.56 on an annualized basis and $2.85 in 2016, with annual dividend growth thereafter of approximately 10 percent to 15 percent through 2020. Dividend guidance assumes completion of Williams’ acquisition of Williams Partners public units as previously announced on May 13, 2015.
Williams is reaffirming adjusted EBITDA guidance for 2016-2018. However, Williams is lowering full-year 2015 adjusted EBITDA guidance by approximately 6 percent to a midpoint of $4.23 billion, due primarily to the effects of lower commodity prices and an extended Geismar ramp-up to near-full production in the second quarter.
Williams’ current guidance is displayed in the following table:
Williams - Financial outlook
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2015 | | | 2016 | | | 2017 | | | 2018 | |
| | | Low | | | Mid | | | High | | | Low | | | Mid | | | High | | | Low | | | Mid | | | High | | | Low | | | Mid | | | High | |
Adjusted EBITDA (1) | | $ | 4,130 | | | $ | 4,230 | | | $ | 4,330 | | | $ | 5,170 | | | $ | 5,375 | | | $ | 5,580 | | | $ | 5,825 | | | $ | 6,050 | | | $ | 6,275 | | | $ | 6,500 | | | $ | 6,800 | | | $ | 7,100 | |
| | | | | | | | | | | | |
Total Capital & Investment Expenditures | | $ | 3,960 | | | $ | 4,275 | | | $ | 4,590 | | | $ | 3,300 | | | $ | 3,605 | | | $ | 3,910 | | | $ | 3,025 | | | $ | 3,325 | | | $ | 3,625 | | | $ | 1,300 | | | $ | 1,450 | | | $ | 1,600 | |
| | | | | | | | | | | | |
Dividends per Share | | | | | | $ | 2.47 | | | | | | | | | | | $ | 2.85 | | | | | | | | | | | $ | 3.21 | | | | | | | | | | | $ | 3.61 | | | | | |
| (1) | Adjusted EBITDA is a non-GAAP measure. Reconciliations to the most relevant measures included in GAAP are attached to this news release. |
Assumes completion of Williams’ transaction to acquire all the public outstanding units of Williams Partners.
Commodity price assumptions are contained in Williams’ second quarter data book available at www.williams.com
Second-Quarter 2015 Materials to be Posted Shortly; Q&A Webcast Scheduled for Tomorrow
Williams’ second-quarter 2015 financial results package will be posted shortly atwww.williams.com. The package will include the data book and analyst package.
The company and the partnership will host a conference call and live webcast on Thursday, July 30, at 9:30 a.m. EDT. A limited number of phone lines will be available at (888) 297-0360. International callers should dial (719) 457-2603. 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 atwww.williams.com.
Form 10-Q
The company plans to file its second 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.
4
Non-GAAP Measures
This news release may include 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 (loss) from discontinued operations, 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.
About Williams
Williams (NYSE: WMB) is a premier provider of large-scale infrastructure connecting 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 all of the 2 percent general-partner interest. Williams Partners is an industry-leading, large-cap master limited partnership with
5
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, 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. Forward-looking statements can be identified 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; |
| | • | | Levels of dividends to Williams stockholders; |
| | • | | The status, expected timing, and expected outcome of Williams’ proposed acquisition of all of the publicly held outstanding common units of WPZ in exchange for shares of Williams common stock (Acquisition of WPZ Public Units); |
| | • | | The status, expected timing, and expected outcome of the unsolicited proposal for Williams to be acquired in an all-equity transaction (Unsolicited Proposal) and Williams Board of Directors’ ongoing review of strategic alternatives; |
| | • | | 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; |
| | • | | 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 news release. 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:
| | • | | Satisfaction of the conditions to the completion of the Acquisition of WPZ Public Units, including receipt of the approval of Williams’ stockholders; |
| | • | | The results of Williams Board of Directors’ ongoing review of strategic alternatives; |
| | • | | 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; |
6
| | • | | 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; |
| | • | | 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 at www.williams.com.
# # #
7
Financial Highlights and Operating Statistics
(UNAUDITED)
Final
June 30, 2015
Reconciliation of Income (Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Adjusted Income
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2014 | | | 2015 | |
| (Dollars in millions, except per-share amounts) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | | | 2nd Qtr | | | Year | |
Income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders | | $ | 140 | | | $ | 99 | | | $ | 1,678 | | | $ | 193 | | | $ | 2,110 | | | $ | 70 | | | $ | 114 | | | $ | 184 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations—diluted earnings per common share | | $ | .20 | | | $ | .14 | | | $ | 2.22 | | | $ | .26 | | | $ | 2.91 | | | $ | .09 | | | $ | .15 | | | $ | .24 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Williams Partners | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Merger and transition related expenses | | $ | — | | | $ | — | | | $ | 11 | | | $ | 30 | | | $ | 41 | | | $ | 32 | | | | 14 | | | | 46 | |
Acquisition-related expenses | | | — | | | | 2 | | | | 13 | | | | 1 | | | | 16 | | | | — | | | | — | | | | — | |
Impairment of certain assets | | | — | | | | 17 | | | | — | | | | 35 | | | | 52 | | | | 3 | | | | 24 | | | | 27 | |
Share of impairment at equity-method investment | | | — | | | | — | | | | — | | | | — | | | | — | | | | 8 | | | | 1 | | | | 9 | |
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 | | | | — | | | | (126 | ) | | | (126 | ) |
Loss related to Geismar Incident | | | — | | | | — | | | | 5 | | | | 5 | | | | 10 | | | | 1 | | | | 1 | | | | 2 | |
Loss related to Opal incident | | | — | | | | 6 | | | | — | | | | 2 | | | | 8 | | | | 1 | | | | — | | | | 1 | |
Loss on sale of equipment | | | — | | | | — | | | | — | | | | 7 | | | | 7 | | | | — | | | | — | | | | — | |
Estimated minimum volume commitments | | | — | | | | — | | | | 47 | | | | (114 | ) | | | (67 | ) | | | 55 | | | | 55 | | | | 110 | |
Gain on extinguishment of debt | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (14 | ) | | | (14 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Williams Partners adjustments | | | 60 | | | | 121 | | | | 64 | | | | (248 | ) | | | (3 | ) | | | 100 | | | | (45 | ) | | | 55 | |
| | | | | | | | |
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 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Williams NGL & Petchem Services adjustments | | | 95 | | | | 1 | | | | — | | | | (1 | ) | | | 95 | | | | — | | | | — | | | | — | |
| | | | | | | | |
Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
WMB impact of ACMP transaction-related compensation expenses | | | — | | | | — | | | | 19 | | | | — | | | | 19 | | | | — | | | | — | | | | — | |
Other merger and transition-related expenses | | | — | | | | — | | | | 3 | | | | 7 | | | | 10 | | | | 6 | | | | 9 | | | | 15 | |
Expenses associated with strategic alternatives | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 7 | | | | 7 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Other adjustments | | | — | | | | — | | | | 22 | | | | 7 | | | | 29 | | | | 6 | | | | 16 | | | | 22 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustments included in Modified EBITDA | | | 155 | | | | 122 | | | | 86 | | | | (242 | ) | | | 121 | | | | 106 | | | | (29 | ) | | | 77 | |
| | | | | | | | |
Adjustments below Modified EBITDA | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Acquisition-related financing expenses—Williams Partners | | | — | | | | 9 | | | | — | | | | — | | | | 9 | | | | 2 | | | | — | | | | 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 | ) | | | — | | | | (9 | ) | | | (9 | ) |
Allocation of adjustments to noncontrolling interests | | | (25 | ) | | | (36 | ) | | | 3 | | | | 38 | | | | (20 | ) | | | (33 | ) | | | 21 | | | | (12 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (38 | ) | | | (45 | ) | | | (2,529 | ) | | | 16 | | | | (2,596 | ) | | | (31 | ) | | | 12 | | | | (19 | ) |
| | | | | | | | |
Total adjustments | | | 117 | | | | 77 | | | | (2,443 | ) | | | (226 | ) | | | (2,475 | ) | | | 75 | | | | (17 | ) | | | 58 | |
Less tax effect for above items | | | (47 | ) | | | (32 | ) | | | 925 | | | | 41 | | | | 887 | | | | (28 | ) | | | 4 | | | | (24 | ) |
| | | | | | | | |
Adjustments for tax-related items [1] | | | (20 | ) | | | 14 | | | | (3 | ) | | | 2 | | | | (7 | ) | | | 5 | | | | 9 | | | | 14 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Adjusted income from continuing operations available to common stockholders | | $ | 190 | | | $ | 158 | | | $ | 157 | | | $ | 10 | | | $ | 515 | | | $ | 122 | | | $ | 110 | | | $ | 232 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Adjusted diluted earnings per common share | | $ | .28 | | | $ | .23 | | | $ | .21 | | | $ | .01 | | | $ | .71 | | | $ | .16 | | | $ | .15 | | | $ | .31 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Weighted-average shares—diluted (thousands) | | | 688,904 | | | | 700,696 | | | | 752,064 | | | | 751,898 | | | | 723,641 | | | | 752,028 | | | | 752,775 | | | | 752,403 | |
| (1) | 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.
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 | | | 2nd Qtr | | | Year | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Service revenues | | $ | 819 | | | $ | 825 | | | $ | 1,127 | | | $ | 1,345 | | | $ | 4,116 | | | $ | 1,197 | | | $ | 1,241 | | | $ | 2,438 | |
Product sales | | | 930 | | | | 853 | | | | 942 | | | | 796 | | | | 3,521 | | | | 519 | | | | 598 | | | | 1,117 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | | 1,749 | | | | 1,678 | | | | 2,069 | | | | 2,141 | | | | 7,637 | | | | 1,716 | | | | 1,839 | | | | 3,555 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Product costs | | | 769 | | | | 724 | | | | 807 | | | | 716 | | | | 3,016 | | | | 462 | | | | 494 | | | | 956 | |
Operating and maintenance expenses | | | 298 | | | | 308 | | | | 412 | | | | 474 | | | | 1,492 | | | | 387 | | | | 437 | | | | 824 | |
Depreciation and amortization expenses | | | 214 | | | | 214 | | | | 369 | | | | 379 | | | | 1,176 | | | | 427 | | | | 428 | | | | 855 | |
Selling, general, and administrative expenses | | | 150 | | | | 136 | | | | 171 | | | | 204 | | | | 661 | | | | 196 | | | | 174 | | | | 370 | |
Net insurance recoveries—Geismar Incident | | | (119 | ) | | | (42 | ) | | | — | | | | (71 | ) | | | (232 | ) | | | — | | | | (126 | ) | | | (126 | ) |
Other (income) expense—net | | | 17 | | | | 27 | | | | 3 | | | | (92 | ) | | | (45 | ) | | | 17 | | | | 40 | | | | 57 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total costs and expenses | | | 1,329 | | | | 1,367 | | | | 1,762 | | | | 1,610 | | | | 6,068 | | | | 1,489 | | | | 1,447 | | | | 2,936 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | | 420 | | | | 311 | | | | 307 | | | | 531 | | | | 1,569 | | | | 227 | | | | 392 | | | | 619 | |
Equity earnings (losses) | | | (48 | ) | | | 37 | | | | 66 | | | | 89 | | | | 144 | | | | 51 | | | | 93 | | | | 144 | |
Gain on remeasurement of equity-method investment | | | — | | | | — | | | | 2,522 | | | | 22 | | | | 2,544 | | | | — | | | | — | | | | — | |
Other investing income (loss)—net | | | 14 | | | | 18 | | | | 11 | | | | — | | | | 43 | | | | — | | | | 9 | | | | 9 | |
Interest incurred | | | (169 | ) | | | (192 | ) | | | (262 | ) | | | (265 | ) | | | (888 | ) | | | (273 | ) | | | (278 | ) | | | (551 | ) |
Interest capitalized | | | 29 | | | | 29 | | | | 52 | | | | 31 | | | | 141 | | | | 22 | | | | 16 | | | | 38 | |
Other income (expense)—net | | | 1 | | | | 4 | | | | 10 | | | | 16 | | | | 31 | | | | 16 | | | | 34 | | | | 50 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations before income taxes | | | 247 | | | | 207 | | | | 2,706 | | | | 424 | | | | 3,584 | | | | 43 | | | | 266 | | | | 309 | |
Provision (benefit) for income taxes | | | 51 | | | | 84 | | | | 998 | | | | 116 | | | | 1,249 | | | | 30 | | | | 83 | | | | 113 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | 196 | | | | 123 | | | | 1,708 | | | | 308 | | | | 2,335 | | | | 13 | | | | 183 | | | | 196 | |
Income (loss) from discontinued operations | | | — | | | | 4 | | | | — | | | | — | | | | 4 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | | 196 | | | | 127 | | | | 1,708 | | | | 308 | | | | 2,339 | | | | 13 | | | | 183 | | | | 196 | |
Less: Net income attributable to noncontrolling interests | | | 56 | | | | 24 | | | | 30 | | | | 115 | | | | 225 | | | | (57 | ) | | | 69 | | | | 12 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) attributable to The Williams Companies, Inc. | | $ | 140 | | | $ | 103 | | | $ | 1,678 | | | $ | 193 | | | $ | 2,114 | | | $ | 70 | | | $ | 114 | | | $ | 184 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Amounts attributable to The Williams Companies, Inc.: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | $ | 140 | | | $ | 99 | | | $ | 1,678 | | | $ | 193 | | | $ | 2,110 | | | $ | 70 | | | $ | 114 | | | $ | 184 | |
Income (loss) from discontinued operations | | | — | | | | 4 | | | | — | | | | — | | | | 4 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 140 | | | $ | 103 | | | $ | 1,678 | | | $ | 193 | | | $ | 2,114 | | | $ | 70 | | | $ | 114 | | | $ | 184 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diluted earnings (loss) per common share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | $ | .20 | | | $ | .14 | | | $ | 2.22 | | | $ | .26 | | | $ | 2.91 | | | $ | .09 | | | $ | .15 | | | $ | .24 | |
Income (loss) from discontinued operations | | | — | | | | .01 | | | | — | | | | — | | | | .01 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | .20 | | | $ | .15 | | | $ | 2.22 | | | $ | .26 | | | $ | 2.92 | | | $ | .09 | | | $ | .15 | | | $ | .24 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted-average number of shares used in computations (thousands) | | | 688,904 | | | | 700,696 | | | | 752,064 | | | | 751,898 | | | | 723,641 | | | | 752,028 | | | | 752,775 | | | | 752,403 | |
Common shares outstanding at end of period (thousands) | | | 685,419 | | | | 747,190 | | | | 747,453 | | | | 747,531 | | | | 747,531 | | | | 748,912 | | | | 749,529 | | | | 749,529 | |
Market price per common share (end of period) | | $ | 40.58 | | | $ | 58.21 | | | $ | 55.35 | | | $ | 44.94 | | | $ | 44.94 | | | $ | 50.59 | | | $ | 57.39 | | | $ | 57.39 | |
Common dividends per share | | $ | .4025 | | | $ | .4250 | | | $ | .56 | | | $ | .57 | | | $ | 1.9575 | | | $ | .58 | | | $ | .59 | | | $ | 1.17 | |
| 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 | | | 2nd Qtr | | | Year | |
Net income (loss) | | $ | 196 | | | $ | 127 | | | $ | 1,708 | | | $ | 308 | | | $ | 2,339 | | | $ | 13 | | | $ | 183 | | | $ | 196 | |
(Income) loss from discontinued operations | | | — | | | | (4 | ) | | | — | | | | — | | | | (4 | ) | | | — | | | | — | | | | — | |
Provision (benefit) for income taxes | | | 51 | | | | 84 | | | | 998 | | | | 116 | | | | 1,249 | | | | 30 | | | | 83 | | | | 113 | |
Interest expense | | | 140 | | | | 163 | | | | 210 | | | | 234 | | | | 747 | | | | 251 | | | | 262 | | | | 513 | |
Equity (earnings) losses | | | 48 | | | | (37 | ) | | | (66 | ) | | | (89 | ) | | | (144 | ) | | | (51 | ) | | | (93 | ) | | | (144 | ) |
(Gain) on remeasurement of equity-method investments | | | — | | | | — | | | | (2,522 | ) | | | (22 | ) | | | (2,544 | ) | | | — | | | | — | | | | — | |
Other investing (income) loss | | | (14 | ) | | | (18 | ) | | | (11 | ) | | | — | | | | (43 | ) | | | — | | | | (9 | ) | | | (9 | ) |
Proportional Modified EBITDA of equity-method investments | | | 28 | | | | 113 | | | | 132 | | | | 165 | | | | 438 | | | | 136 | | | | 183 | | | | 319 | |
Depreciation and amortization expenses | | | 214 | | | | 214 | | | | 369 | | | | 379 | | | | 1,176 | | | | 427 | | | | 428 | | | | 855 | |
Accretion for asset retirement obligations associated with nonregulated operations | | | 3 | | | | 6 | | | | 4 | | | | 5 | | | | 18 | | | | 6 | | | | 9 | | | | 15 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Modified EBITDA | | $ | 666 | | | $ | 648 | | | $ | 822 | | | $ | 1,096 | | | $ | 3,232 | | | $ | 812 | | | $ | 1,046 | | | $ | 1,858 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Williams Partners | | $ | 708 | | | $ | 596 | | | $ | 843 | | | $ | 1,097 | | | $ | 3,244 | | | $ | 817 | | | $ | 1,053 | | | $ | 1,870 | |
Williams NGL & Petchem Services | | | (100 | ) | | | (8 | ) | | | (4 | ) | | | (3 | ) | | | (115 | ) | | | (5 | ) | | | (3 | ) | | | (8 | ) |
Other | | | 58 | | | | 60 | | | | (17 | ) | | | 2 | | | | 103 | | | | — | | | | (4 | ) | | | (4 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Modified EBITDA | | $ | 666 | | | $ | 648 | | | $ | 822 | | | $ | 1,096 | | | $ | 3,232 | | | $ | 812 | | | $ | 1,046 | | | $ | 1,858 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustments included in Modified EBITDA: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 60 | | | $ | 121 | | | $ | 64 | | | $ | (248 | ) | | $ | (3 | ) | | $ | 100 | | | $ | (45 | ) | | $ | 55 | |
Williams NGL & Petchem Services | | | 95 | | | | 1 | | | | — | | | | (1 | ) | | | 95 | | | | — | | | | — | | | | — | |
Other | | | — | | | | — | | | | 22 | | | | 7 | | | | 29 | | | | 6 | | | | 16 | | | | 22 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Adjustments included in Modified EBITDA | | $ | 155 | | | $ | 122 | | | $ | 86 | | | $ | (242 | ) | | $ | 121 | | | $ | 106 | | | $ | (29 | ) | | $ | 77 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 768 | | | $ | 717 | | | $ | 907 | | | $ | 849 | | | $ | 3,241 | | | $ | 917 | | | $ | 1,008 | | | $ | 1,925 | |
Williams NGL & Petchem Services | | | (5 | ) | | | (7 | ) | | | (4 | ) | | | (4 | ) | | | (20 | ) | | | (5 | ) | | | (3 | ) | | | (8 | ) |
Other | | | 58 | | | | 60 | | | | 5 | | | | 9 | | | | 132 | | | | 6 | | | | 12 | | | | 18 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Adjusted EBITDA | | $ | 821 | | | $ | 770 | | | $ | 908 | | | $ | 854 | | | $ | 3,353 | | | $ | 918 | | | $ | 1,017 | | | $ | 1,935 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2014 | | | 2015 | |
| (Dollars in millions) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | | | 2nd Qtr | | | Year | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Service revenues | | $ | 763 | | | $ | 763 | | | $ | 1,066 | | | $ | 1,296 | | | $ | 3,888 | | | $ | 1,192 | | | $ | 1,231 | | | $ | 2,423 | |
Product sales | | | 930 | | | | 853 | | | | 942 | | | | 796 | | | | 3,521 | | | | 519 | | | | 599 | | | | 1,118 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | | 1,693 | | | | 1,616 | | | | 2,008 | | | | 2,092 | | | | 7,409 | | | | 1,711 | | | | 1,830 | | | | 3,541 | |
Segment costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Product costs | | | 769 | | | | 724 | | | | 807 | | | | 716 | | | | 3,016 | | | | 463 | | | | 494 | | | | 957 | |
Operating and maintenance expenses | | | 245 | | | | 245 | | | | 351 | | | | 419 | | | | 1,260 | | | | 373 | | | | 424 | | | | 797 | |
Selling, general, and administrative expenses | | | 130 | | | | 134 | | | | 168 | | | | 201 | | | | 633 | | | | 193 | | | | 164 | | | | 357 | |
Net insurance recoveries—Geismar Incident | | | (119 | ) | | | (42 | ) | | | — | | | | (71 | ) | | | (232 | ) | | | — | | | | (126 | ) | | | (126 | ) |
Other segment costs and expenses | | | 14 | | | | 21 | | | | (11 | ) | | | (105 | ) | | | (81 | ) | | | 1 | | | | 4 | | | | 5 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total segment costs and expenses | | | 1,039 | | | | 1,082 | | | | 1,315 | | | | 1,160 | | | | 4,596 | | | | 1,030 | | | | 960 | | | | 1,990 | |
Proportional Modified EBITDA of equity-method investments | | | 54 | | | | 62 | | | | 150 | | | | 165 | | | | 431 | | | | 136 | | | | 183 | | | | 319 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Modified EBITDA | | | 708 | | | | 596 | | | | 843 | | | | 1,097 | | | | 3,244 | | | | 817 | | | | 1,053 | | | | 1,870 | |
Adjustments | | | 60 | | | | 121 | | | | 64 | | | | (248 | ) | | | (3 | ) | | | 100 | | | | (45 | ) | | | 55 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 768 | | | $ | 717 | | | $ | 907 | | | $ | 849 | | | $ | 3,241 | | | $ | 917 | | | $ | 1,008 | | | $ | 1,925 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating statistics | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interstate Transmission | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Throughput (Tbtu) | | | 1,141.6 | | | | 938.1 | | | | 978.0 | | | | 1,083.9 | | | | 4,141.6 | | | | 1,207.8 | | | | 967.9 | | | | 2,175.7 | |
Avg. daily transportation volumes (Tbtu) | | | 12.6 | | | | 10.4 | | | | 10.6 | | | | 11.7 | | | | 11.4 | | | | 13.5 | | | | 10.6 | | | | 12.0 | |
Avg. daily firm reserved capacity (Tbtu) | | | 12.6 | | | | 12.4 | | | | 12.5 | | | | 12.9 | | | | 12.9 | | | | 13.5 | | | | 14.0 | | | | 13.7 | |
| | | | | | | | |
Former WPZ Operations Gathering and Processing(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gathering volumes (Tbtu) | | | 436 | | | | 450 | | | | 461 | | | | 487 | | | | 1,834 | | | | 493 | | | | 466 | | | | 959 | |
Plant inlet natural gas volumes (Tbtu) | | | 339 | | | | 344 | | | | 370 | | | | 366 | | | | 1,419 | | | | 363 | | | | 364 | | | | 727 | |
| | | | | | | | |
Former ACMP Gathering Operations Throughput, bcf per day (2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Barnett shale | | | — | | | | — | | | | .876 | | | | .853 | | | | .865 | | | | .812 | | | | .804 | | | | .808 | |
Eagle Ford shale | | | — | | | | — | | | | .348 | | | | .376 | | | | .362 | | | | .388 | | | | .377 | | | | .383 | |
Haynesville shale | | | — | | | | — | | | | .714 | | | | .802 | | | | .758 | | | | .971 | | | | 1.085 | | | | 1.029 | |
Marcellus shale | | | — | | | | — | | | | 1.193 | | | | 1.272 | | | | 1.233 | | | | 1.232 | | | | 1.273 | | | | 1.253 | |
Niobrara shale | | | — | | | | — | | | | .030 | | | | .034 | | | | .032 | | | | .039 | | | | .040 | | | | .040 | |
Utica shale | | | — | | | | — | | | | .418 | | | | .484 | | | | .451 | | | | .513 | | | | .606 | | | | .560 | |
Mid-Continent | | | — | | | | — | | | | .554 | | | | .537 | | | | .545 | | | | .506 | | | | .515 | | | | .510 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total throughput | | | — | | | | — | | | | 4.133 | | | | 4.358 | | | | 4.246 | | | | 4.461 | | | | 4.700 | | | | 4.583 | |
Ethane equity sales (million gallons) | | | 33 | | | | 39 | | | | 42 | | | | 43 | | | | 157 | | | | 54 | | | | 49 | | | | 103 | |
Non-ethane equity sales (million gallons) | | | 113 | | | | 108 | | | | 124 | | | | 131 | | | | 476 | | | | 131 | | | | 122 | | | | 253 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NGL equity sales (million gallons) | | | 146 | | | | 147 | | | | 166 | | | | 174 | | | | 633 | | | | 185 | | | | 171 | | | | 356 | |
| | | | | | | | |
Ethane margin ($/gallon) | | $ | .20 | | | $ | .18 | | | $ | .16 | | | $ | .17 | | | $ | .17 | | | $ | .13 | | | $ | .13 | | | $ | .13 | |
Non-ethane margin ($/gallon) | | $ | .88 | | | $ | .80 | | | $ | .78 | | | $ | .58 | | | $ | .76 | | | $ | .28 | | | $ | .26 | | | $ | .27 | |
NGL margin ($/gallon) | | $ | .73 | | | $ | .64 | | | $ | .63 | | | $ | .48 | | | $ | .61 | | | $ | .24 | | | $ | .22 | | | $ | .23 | |
| | | | | | | | |
Ethane production (million gallons) | | | 135 | | | | 173 | | | | 154 | | | | 163 | | | | 625 | | | | 111 | | | | 149 | | | | 260 | |
Non-ethane production (million gallons) | | | 372 | | | | 384 | | | | 417 | | | | 408 | | | | 1,581 | | | | 408 | | | | 418 | | | | 826 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NGL production (million gallons) | | | 507 | | | | 557 | | | | 571 | | | | 571 | | | | 2,206 | | | | 519 | | | | 567 | | | | 1,086 | |
| | | | | | | | |
Petrochemical Services | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Geismar ethylene sales volumes (million lbs) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2 | | | | 213 | | | | 215 | |
Geismar ethylene margin ($/lb) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | |
Equity investments—100% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Discovery gathering volumes (Tbtu) | | | 21 | | | | 26 | | | | 32 | | | | 33 | | | | 112 | | | | 35 | | | | 61 | | | | 96 | |
Discovery NGL equity sales (million gallons) | | | 10 | | | | 10 | | | | 18 | | | | 15 | | | | 53 | | | | 17 | | | | 22 | | | | 39 | |
Discovery NGL production (million gallons) | | | 47 | | | | 54 | | | | 65 | | | | 61 | | | | 227 | | | | 62 | | | | 79 | | | | 141 | |
Laurel Mountain gathering volumes (Tbtu) | | | 34 | | | | 36 | | | | 38 | | | | 40 | | | | 148 | | | | 40 | | | | 40 | | | | 80 | |
Overland Pass NGL transportation volumes (Mbbls) | | | 8,612 | | | | 8,926 | | | | 9,482 | | | | 10,118 | | | | 37,138 | | | | 10,845 | | | | 13,860 | | | | 24,705 | |
| (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 | | | 2nd Qtr | | | Year | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Service revenues | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 1 | | | $ | 1 | |
Segment costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating and maintenance expenses | | | 2 | | | | 1 | | | | 2 | | | | 2 | | | | 7 | | | | 4 | | | | 2 | | | | 6 | |
Selling, general, and administrative expenses | | | 22 | | | | 4 | | | | 4 | | | | 1 | | | | 31 | | | | 2 | | | | 2 | | | | 4 | |
Other (income) expense—net | | | (1 | ) | | | 1 | | | | (1 | ) | | $ | — | | | | (1 | ) | | | (1 | ) | | | — | | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total segment costs and expenses | | | 23 | | | | 6 | | | | 5 | | | | 3 | | | | 37 | | | | 5 | | | | 4 | | | | 9 | |
Proportional Modified EBITDA of equity-method investments | | | (77 | ) | | | (2 | ) | | | 1 | | | | — | | | | (78 | ) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Modified EBITDA | | | (100 | ) | | | (8 | ) | | | (4 | ) | | | (3 | ) | | | (115 | ) | | | (5 | ) | | | (3 | ) | | | (8 | ) |
Adjustments | | | 95 | | | | 1 | | | | — | | | | (1 | ) | | | 95 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | (5 | ) | | $ | (7 | ) | | $ | (4 | ) | | $ | (4 | ) | | $ | (20 | ) | | $ | (5 | ) | | $ | (3 | ) | | $ | (8 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Capital Expenditures and Investments
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2014 | | | 2015 | |
| (Dollars in millions) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | | | 2nd Qtr | | | Year | |
Capital expenditures: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 724 | | | $ | 943 | | | $ | 1,029 | | | $ | 996 | | | $ | 3,692 | | | $ | 735 | | | $ | 715 | | | $ | 1,450 | |
Williams NGL & Petchem Services | | | 61 | | | | 85 | | | | 62 | | | | 78 | | | | 286 | | | | 91 | | | | 102 | | | | 193 | |
Other | | | 8 | | | | 18 | | | | 13 | | | | 14 | | | | 53 | | | | 6 | | | | 5 | | | | 11 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total* | | $ | 793 | | | $ | 1,046 | | | $ | 1,104 | | | $ | 1,088 | | | $ | 4,031 | | | $ | 832 | | | $ | 822 | | | $ | 1,654 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Purchase of businesses (net of cash acquired): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 112 | | | $ | 112 | |
Other | | | — | | | | — | | | | 5,958 | | | | — | | | | 5,958 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | — | | | $ | — | | | $ | 5,958 | | | $ | — | | | $ | 5,958 | | | $ | — | | | $ | 112 | | | $ | 112 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Purchase of investments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 215 | | | $ | 16 | | | $ | 99 | | | $ | 138 | | | $ | 468 | | | $ | 83 | | | $ | 400 | | | $ | 483 | |
Williams NGL & Petchem Services | | | 13 | | | | 2 | | | | — | | | | (1 | ) | | | 14 | | | | — | | | | — | | | | — | |
Other | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 228 | | | $ | 18 | | | $ | 99 | | | $ | 137 | | | $ | 482 | | | $ | 83 | | | $ | 400 | | | $ | 483 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Summary: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 939 | | | $ | 959 | | | $ | 1,128 | | | $ | 1,134 | | | $ | 4,160 | | | $ | 818 | | | $ | 1,227 | | | $ | 2,045 | |
Williams NGL & Petchem Services | | | 74 | | | | 87 | | | | 62 | | | | 77 | | | | 300 | | | | 91 | | | | 102 | | | | 193 | |
Other | | | 8 | | | | 18 | | | | 5,971 | | | | 14 | | | | 6,011 | | | | 6 | | | | 5 | | | | 11 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,021 | | | $ | 1,064 | | | $ | 7,161 | | | $ | 1,225 | | | $ | 10,471 | | | $ | 915 | | | $ | 1,334 | | | $ | 2,249 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Capital expenditures incurred, purchase of businesses (net of cash acquired), and purchase of investments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Increases to property, plant, and equipment | | $ | 840 | | | $ | 949 | | | $ | 1,113 | | | $ | 1,014 | | | $ | 3,916 | | | $ | 738 | | | $ | 816 | | | $ | 1,554 | |
Purchase of businesses (net of cash acquired) | | | — | | | | — | | | | 5,958 | | | | — | | | | 5,958 | | | | — | | | | 112 | | | | 112 | |
Purchase of investments | | | 228 | | | | 18 | | | | 99 | | | | 137 | | | | 482 | | | | 83 | | | | 400 | | | | 483 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,068 | | | $ | 967 | | | $ | 7,170 | | | $ | 1,151 | | | $ | 10,356 | | | $ | 821 | | | $ | 1,328 | | | $ | 2,149 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
*Increases to property, plant, and equipment | | $ | 840 | | | $ | 949 | | | $ | 1,113 | | | $ | 1,014 | | | $ | 3,916 | | | $ | 738 | | | $ | 816 | | | $ | 1,554 | |
Changes in related accounts payable and accrued liabilities | | | (47 | ) | | | 97 | | | | (9 | ) | | | 74 | | | | 115 | | | | 94 | | | | 6 | | | | 100 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Capital expenditures | | $ | 793 | | | $ | 1,046 | | | $ | 1,104 | | | $ | 1,088 | | | $ | 4,031 | | | $ | 832 | | | $ | 822 | | | $ | 1,654 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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 | | | 2nd Qtr | | | Year | |
Depreciation and amortization: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 208 | | | $ | 207 | | | $ | 364 | | | $ | 372 | | | $ | 1,151 | | | $ | 419 | | | $ | 419 | | | $ | 838 | |
Other | | | 6 | | | | 7 | | | | 5 | | | | 7 | | | | 25 | | | | 8 | | | | 9 | | | | 17 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 214 | | | $ | 214 | | | $ | 369 | | | $ | 379 | | | $ | 1,176 | | | $ | 427 | | | $ | 428 | | | $ | 855 | |
| | | | | | | | |
Other selected financial data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 1,064 | | | $ | 860 | | | $ | 302 | | | $ | 240 | | | $ | 240 | | | $ | 341 | | | $ | 204 | | | $ | 204 | |
Total assets | | $ | 28,306 | | | $ | 34,949 | | | $ | 49,807 | | | $ | 50,563 | | | $ | 50,563 | | | $ | 50,457 | | | $ | 51,163 | | | $ | 51,163 | |
Capital structure: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Debt | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial paper | | $ | — | | | $ | — | | | $ | 265 | | | $ | 798 | | | $ | 798 | | | $ | — | | | $ | 1,743 | | | $ | 1,743 | |
Current | | $ | 751 | | | $ | 751 | | | $ | 754 | | | $ | 4 | | | $ | 4 | | | $ | 801 | | | $ | 378 | | | $ | 378 | |
Noncurrent | | $ | 12,099 | | | $ | 15,539 | | | $ | 19,922 | | | $ | 20,888 | | | $ | 20,888 | | | $ | 21,690 | | | $ | 21,285 | | | $ | 21,285 | |
Stockholders’ equity | | $ | 4,616 | | | $ | 7,863 | | | $ | 9,129 | | | $ | 8,777 | | | $ | 8,777 | | | $ | 8,212 | | | $ | 7,928 | | | $ | 7,928 | |
Debt to debt-plus-stockholders’ equity ratio | | | 73.6 | % | | | 67.4 | % | | | 69.6 | % | | | 71.2 | % | | | 71.2 | % | | | 73.3 | % | | | 74.7 | % | | | 74.7 | % |
| | | | | | | | |
Cash distributions received from interests in: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners L.P. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
General partner | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 226 | | | $ | 227 | | | $ | 453 | |
Limited partner | | | — | | | | — | | | | — | | | | — | | | | — | | | | 289 | | | | 288 | | | | 577 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 515 | | | $ | 515 | | | $ | 1,030 | |
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 | | | $ | 515 | | | $ | 1,030 | |
Dividend Coverage Ratio
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2014 | | | 2015 | |
| (Dollars in millions, except per share amounts) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | | | 2nd Qtr | | | Year | |
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 | | | | 513 | | | | 1,028 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total distributions from Pre-merger WPZ, ACMP, and WPZ | | | 455 | | | | 509 | | | | 521 | | | | 515 | | | | 2,000 | | | | 515 | | | | 513 | | | | 1,028 | |
Williams NGL & Petchem Services adjusted cash flow (see below) | | | (5 | ) | | | (9 | ) | | | (5 | ) | | | (5 | ) | | | (24 | ) | | | (5 | ) | | | (3 | ) | | | (8 | ) |
Corporate interest | | | (38 | ) | | | (50 | ) | | | (65 | ) | | | (54 | ) | | | (207 | ) | | | (64 | ) | | | (64 | ) | | | (128 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Subtotal | | | 412 | | | | 450 | | | | 451 | | | | 456 | | | | 1,769 | | | | 446 | | | | 446 | | | | 892 | |
WMB cash tax rate | | | 3 | % | | | 3 | % | | | — | % | | | — | % | | | 2 | % | | | -12 | % | | | 0 | % | | | -6 | % |
WMB cash taxes (excludes cash taxes paid by WPZ) (1) | | | (13 | ) | | | (14 | ) | | | — | | | | — | | | | (27 | ) | | | 55 | | | | — | | | | 55 | |
Corporate Capex | | | (8 | ) | | | (18 | ) | | | (13 | ) | | | (14 | ) | | | (53 | ) | | | (6 | ) | | | (5 | ) | | | (11 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
WMB cash flow available for dividends | | $ | 391 | | | $ | 418 | | | $ | 438 | | | $ | 442 | | | $ | 1,689 | | | $ | 495 | | | $ | 441 | | | $ | 936 | |
- per share | | $ | 0.57 | | | $ | 0.61 | | | $ | 0.59 | | | $ | 0.59 | | | $ | 2.36 | | | $ | 0.66 | | | $ | 0.59 | | | $ | 1.25 | |
WMB dividends paid | | | (276 | ) | | | (291 | ) | | | (419 | ) | | | (426 | ) | | | (1,412 | ) | | | (434 | ) | | | (442 | ) | | | (876 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Excess cash flow available after dividends | | $ | 115 | | | $ | 127 | | | $ | 19 | | | $ | 16 | | | $ | 277 | | | $ | 61 | | | $ | (1 | ) | | $ | 60 | |
Dividend per share | | $ | 0.4025 | | | $ | 0.4250 | | | $ | 0.5600 | | | $ | 0.5700 | | | $ | 1.9575 | | | $ | 0.5800 | | | $ | 0.5900 | | | $ | 1.1700 | |
Coverage ratio (2) | | | 1.42 | | | | 1.44 | | | | 1.05 | | | | 1.04 | | | | 1.20 | | | | 1.14 | | | | 1.00 | | | | 1.07 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Williams NGL & Petchem Services Adjusted Cash Flow: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Modified EBITDA | | | (100 | ) | | | (8 | ) | | | (4 | ) | | | (3 | ) | | | (115 | ) | | | (5 | ) | | | (3 | ) | | | (8 | ) |
Segment adjustments | | | 95 | | | | 1 | | | | — | | | | (1 | ) | | | 95 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | | (5 | ) | | | (7 | ) | | | (4 | ) | | | (4 | ) | | | (20 | ) | | | (5 | ) | | | (3 | ) | | | (8 | ) |
Less: Maintenance Capex | | | — | | | | (2 | ) | | | (1 | ) | | | (1 | ) | | | (4 | ) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted cash flow | | | (5 | ) | | | (9 | ) | | | (5 | ) | | | (5 | ) | | | (24 | ) | | | (5 | ) | | | (3 | ) | | | (8 | ) |
| | | | |
| Notes: | | (1) | | A refund was received in the first quarter of 2015 related to a 2014 tax Net Operating Loss, due to bonus depreciation, that yielded a carryback refund from 2012. |
| | (2) | | WMB cash flow available for dividends / WMB dividends paid. |
WMB Net Income to Adjusted EBITDA
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2015 | | | 2016 | | | 2017 | | | 2018 | |
| ($ in millions) | | Low | | | Base | | | High | | | Low | | | Base | | | High | | | Low | | | Base | | | High | | | Low | | | Base | | | High | |
Net income from continuing operations | | | 634 | | | | 709 | | | | 784 | | | $ | 1,255 | | | $ | 1,385 | | | $ | 1,515 | | | $ | 1,570 | | | $ | 1,720 | | | $ | 1,870 | | | $ | 1,735 | | | $ | 1,925 | | | $ | 2,115 | |
Add: Net interest expense | | | 1,065 | | | | 1,060 | | | | 1,055 | | | | 1,120 | | | | 1,115 | | | | 1,110 | | | | 1,185 | | | | 1,175 | | | | 1,165 | | | | 1,325 | | | | 1,315 | | | | 1,305 | |
Add: Provision for income taxes | | | 330 | | | | 360 | | | | 390 | | | | 620 | | | | 700 | | | | 780 | | | | 815 | | | | 900 | | | | 985 | | | | 930 | | | | 1,050 | | | | 1,170 | |
Add: Depreciation & amortization (DD&A) | | | 1,775 | | | | 1,775 | | | | 1,775 | | | | 1,870 | | | | 1,870 | | | | 1,870 | | | | 1,945 | | | | 1,945 | | | | 1,945 | | | | 2,110 | | | | 2,110 | | | | 2,110 | |
Less: Equity (earnings) / losses from investments | | | (355 | ) | | | (360 | ) | | | (365 | ) | | | (495 | ) | | | (505 | ) | | | (515 | ) | | | (645 | ) | | | (660 | ) | | | (675 | ) | | | (755 | ) | | | (780 | ) | | | (805 | ) |
Add: Proportional EBITDA of equity-method investments1 | | | 710 | | | | 715 | | | | 720 | | | | 800 | | | | 810 | | | | 820 | | | | 955 | | | | 970 | | | | 985 | | | | 1,155 | | | | 1,180 | | | | 1,205 | |
Adjustments2 | | | (29 | ) | | | (29 | ) | | | (29 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 4,130 | | | $ | 4,230 | | | $ | 4,330 | | | $ | 5,170 | | | $ | 5,375 | | | $ | 5,580 | | | $ | 5,825 | | | $ | 6,050 | | | $ | 6,275 | | | $ | 6,500 | | | $ | 6,800 | | | $ | 7,100 | |
| | | | |
| | | 2015 | | | 2016 | | | 2017 | | | 2018 | |
| 1) Proportional EBITDA of equity-method investments: | | Low | | | Base | | | High | | | Low | | | Base | | | High | | | Low | | | Base | | | High | | | Low | | | Base | | | High | |
| | | | | | | | | | | | |
Net income from continuing operations | | $ | 355 | | | $ | 360 | | | $ | 365 | | | $ | 495 | | | $ | 505 | | | $ | 515 | | | $ | 645 | | | $ | 660 | | | $ | 675 | | | $ | 755 | | | $ | 780 | | | $ | 805 | |
Add: Net interest expense | | | 44 | | | | 44 | | | | 44 | | | | 58 | | | | 58 | | | | 58 | | | | 61 | | | | 61 | | | | 61 | | | | 56 | | | | 56 | | | | 56 | |
Add: Depreciation & amortization (DD&A) | | | 232 | | | | 232 | | | | 232 | | | | 226 | | | | 226 | | | | 226 | | | | 236 | | | | 236 | | | | 236 | | | | 287 | | | | 287 | | | | 287 | |
Other | | | 79 | | | | 79 | | | | 79 | | | | 21 | | | | 21 | | | | 21 | | | | 13 | | | | 13 | | | | 13 | | | | 57 | | | | 57 | | | | 57 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA from Equity Investments | | $ | 710 | | | $ | 715 | | | $ | 720 | | | $ | 800 | | | $ | 810 | | | $ | 820 | | | $ | 955 | | | $ | 970 | | | $ | 985 | | | $ | 1,155 | | | $ | 1,180 | | | $ | 1,205 | |
| | | | |
| | | 2015 | | | 2016 | | | 2017 | | | 2018 | |
| 2) Adjustments: | | Low | | | Base | | | High | | | Low | | | Base | | | High | | | Low | | | Base | | | High | | | Low | | | Base | | | High | |
Geismar incident adjustment for insurance and timing | | ($ | 124 | ) | | ($ | 124 | ) | | ($ | 124 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Merger and transition related expenses | | | 65 | | | | 65 | | | | 65 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Share of impairment at equity-method investment | | | 9 | | | | 9 | | | | 9 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Impairment of certain materials and equipment | | | 27 | | | | 27 | | | | 27 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Loss related to Opal incident | | | 1 | | | | 1 | | | | 1 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Gain on extinguishment of debt | | | (14 | ) | | | (14 | ) | | | (14 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Expenses associated with strategic alternatives | | | 7 | | | | 7 | | | | 7 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Adjustments | | ($ | 29 | ) | | ($ | 29 | ) | | ($ | 29 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Cash Available for Dividend Guidance assumes completion of Williams’ acquisition of Williams Partners’ public units (originally published May 13, 2015)
Cash Available for Dividend Guidance
($ and shares in millions except per share data)
| | | | | | | | | | | | |
| | | 2016 | | | 2017 | | | 2018 | |
Adjusted WMB EBITDA (1) | | $ | 5,375 | | | $ | 6,050 | | | $ | 6,800 | |
Less: Maintenance and Corporate Capex | | | (500 | ) | | | (480 | ) | | | (480 | ) |
Less: Distributions to Noncontrolling Interest | | | (195 | ) | | | (230 | ) | | | (215 | ) |
Less: Interest Expense | | | (1,155 | ) | | | (1,215 | ) | | | (1,330 | ) |
Less: Cash Taxes (2) | | | (10 | ) | | | (15 | ) | | | (15 | ) |
| | | | | | | | | | | | |
Total Cash Available for Dividend | | $ | 3,515 | | | $ | 4,110 | | | $ | 4,760 | |
| | | | | | | | | | | | |
Expected Coverage | | | >1.1x | | | | | | | | ~1.2x | |
| | | | | | | | | | | | |
Dividends per Share | | $ | 2.85 | | | $ | 3.21 | | | $ | 3.61 | |
| | | | | | | | | | | | |
Annual Growth Rate (3) | | | 15.6 | % | | | 12.5 | % | | | 12.5 | % |
| (1) | A more detailed schedule reconciling this non-GAAP measure is provided in this presentation. |
| (2) | Includes taxes paid in Canada. |
| (3) | Reflects third and fourth quarter 2015 dividends proforma for the WPZ acquisition. |
