Exhibit 99.1
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| News Release | | | | Williams (NYSE: WMB) One Williams Center Tulsa, OK 74172 800-Williams www.williams.com | |  |
DATE: Oct. 28, 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 Third-Quarter 2015 Financial Results
| | • | | 3Q 2015 Adjusted EBITDA is $1.1 Billion, Up 21% vs. 3Q 2014 |
| | • | | Williams Partners Fee-Based Revenues Up $204 Million or 18% on Contributions from Major New Projects, Access Midstream Growth |
TULSA, Okla. – Williams (NYSE: WMB) today announced third-quarter 2015 adjusted EBITDA of $1.1 billion, compared with $908 million in third quarter 2014, an increase of $195 million, or 21 percent.
Year-to-date 2015, Williams reported $3.04 billion in adjusted EBITDA, a $539 million, or 22 percent increase from the same period last year. The increases in both the quarterly and year-to-date periods were driven primarily by Williams Partners’ adjusted EBITDA, which increased $193 million in the quarter and $633 million year-to-date 2015.
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| Williams Summary Financial Information | | 3Q | | | 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) | | $ | 1,103 | | | $ | 908 | | | $ | 3,038 | | | $ | 2,499 | |
Adjusted income from continuing operations (1) | | $ | 167 | | | $ | 157 | | | $ | 399 | | | $ | 505 | |
Adjusted income from continuing operations per share (1) | | $ | 0.22 | | | $ | 0.21 | | | $ | 0.53 | | | $ | 0.71 | |
Net income (loss) (2) | | ($ | 40 | ) | | $ | 1,678 | | | $ | 144 | | | $ | 1,921 | |
Net income (loss) per share (2) | | ($ | 0.05 | ) | | $ | 2.22 | | | $ | 0.19 | | | $ | 2.68 | |
| (1) | Schedules reconciling adjusted EBITDA, adjusted income from continuing operations (non-GAAP measures) are available at www.williams.com and as an attachment to this news release. |
| (2) | Amounts reported for the 2015 periods reflect pre-tax impairment charges totaling $477 million associated with certain equity-method investments. The 2014 results include a $2.522 billion pre-tax non-cash re-measurement gain related to the consolidation of our previous equity-method investment in Access Midstream Partners as of July 1, 2014. |
Williams reported adjusted income from continuing operations of $167 million, or $0.22 per share, in third quarter 2015, compared with $157 million, or $0.21 per share, in third quarter 2014. The increase in adjusted income for third quarter 2015 is due primarily to new fee revenue associated with certain growth projects that were placed in service in 2014 and 2015 and olefins margins from the Geismar plant’s return to service. These increases were partially offset by declines in NGL margins driven by lower prices, as well as higher depreciation expense due to significant projects that were placed into service in 2014 and 2015 and increased net interest expense.
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Year-to-date 2015, Williams reported $399 million in adjusted income from continuing operations, a $106 million decrease from the same period last year. The decrease in year-to-date adjusted income was driven by the absence of assumed Geismar business interruption proceeds in 2015, as well as the same factors that drove the changes in quarterly adjusted income.
Williams reported unaudited third quarter 2015 net loss attributable to Williams of $40 million, or $0.05 per share on a diluted basis, compared with third quarter 2014 net income of $1.678 billion, or $2.22 per share on a diluted basis.
The unfavorable change was primarily the result of the absence of a $2.522 billion pre-tax non-cash re-measurement gain in 2014 related to the consolidation of our previous equity-method investment in Access Midstream Partners as of July 1, 2014, as well as $477 million of pre-tax impairment charges in 2015 associated with certain equity-method investments. These items have been adjusted out of the adjusted income from continuing operations measure previously discussed. The unfavorable change also reflects declines in NGL margins and higher operating, depreciation, general and administrative, and interest expenses partially offset by increased fee-based revenues and higher olefins margins.
Year-to-date 2015, Williams reported net income of $144 million, or $0.19 per share on a diluted basis, compared with net income of $1.921 billion, or $2.68 per share, for the same period last year. The year-to-date decrease in net income was driven primarily by the same factors described above.
CEO Comment
Alan Armstrong, Williams’ president and chief executive officer, made the following comments:
“Our strong third quarter results underscore the effectiveness of our strategy to connect the best natural gas supplies to the best markets with fee-based infrastructure, which accounted for more than 90 percent of our gross margin. Williams Partners achieved record distributable cash flow and delivered adjusted EBITDA growth across four of the partnership’s five operating areas.
“In September, we completed Transco’s Virginia Southside Expansion and we’re on track to place into full service the Leidy Southeast Expansion by the end of the year, helping relieve supply bottlenecks in the Northeast and creating more fee-based revenue. Supply development in the Northeast will continue to be hampered until constraints are addressed. Fortunately, Williams Partners and other industry participants are hard at work implementing projects that will solve this problem.
“We recognize the fundamental pressures impacting our direct commodity margins and volume growth on our gathering and processing systems. However, our unique position and backlog of fully contracted, demand-driven projects will drive our continued operating cash flow growth.”
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.
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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 | |
| | | 3Q | | | YTD | |
| Amounts in millions | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
Williams Partners | | $ | 1,100 | | | $ | 907 | | | $ | 3,025 | | | $ | 2,392 | |
Williams NGL & Petchem | | | (5 | ) | | | (4 | ) | | | (13 | ) | | | (16 | ) |
Other | | | 8 | | | | 5 | | | | 26 | | | | 123 | |
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Total | | $ | 1,103 | | | $ | 908 | | | $ | 3,038 | | | $ | 2,499 | |
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Schedules reconciling adjusted EBITDA to modified EBITDA and net income are attached to this news release.
The first and second quarters 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 for periods after July 1, 2014, 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 third quarter 2015 adjusted EBITDA of $1.1 billion, a $193 million, or 21 percent, increase from third quarter 2014. The increase in adjusted EBITDA in third quarter 2015 was driven by $204 million, or 18 percent, higher fee-based revenues. Olefins margins increased $58 million reflecting full production at the expanded Geismar plant in third quarter 2015 at multi-year low per unit ethylene margins, partially offset by lower margins from our Canadian operations. Additionally, the proportional EBITDA from non-consolidated equity investments increased $52 million for third quarter 2015 versus third quarter 2014, due primarily to Discovery’s Keathley Canyon Connector project.
Partially offsetting these increases were $68 million in lower NGL margins due primarily to NGL prices that remain at 10-year lows, as well as $51 million higher operating and general and administrative expenses versus third quarter 2014 primarily reflecting higher costs associated with our growing businesses.
Year-to-date 2015, Williams Partners reported adjusted EBITDA of $3.025 billion, a $633 million, or 26 percent, increase from the same period last year. The year-to-date increase in adjusted EBITDA was driven primarily by consolidation of Access Midstream for all of 2015 versus only the third quarter in 2014.
Williams Partners’ complete financial results for third quarter 2015 are provided in the earnings news release issued today by Williams Partners.
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Other Segment
Year-to-date 2014 includes $104 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 in the Williams Partners segment.
Other
As announced on Sept. 28 in connection with the proposed business combination transaction between Williams and Energy Transfer Equity, L.P., Williams and Williams Partners withdrew previous financial guidance and adopted a policy of no longer providing financial guidance.
Third-Quarter 2015 Materials to be Posted Shortly; Q&A Webcast Scheduled for Tomorrow
Williams’ third-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, Oct. 29, at 9 a.m. EDT. A limited number of phone lines will be available at (800) 505-9568. International callers should dial (416) 204-9271. A link to the webcast, as well as replays of the webcast in both streaming and downloadable podcast formats, will be available following the event atwww.williams.com.
Form 10-Q
The company plans to file its third 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.
Non-GAAP Measures
This news release may include certain financial measures – adjusted EBITDA, adjusted income from continuing operations (“earnings”), adjusted earnings per share – 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, gain on remeasurement of equity method investment, impairments of equity investments, 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.
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 nor adjusted income from continuing operations 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 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 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:
| | • | | The status, expected timing and expected outcome of the proposed merger between Williams and Energy Transfer Corp LP (ETC Merger); |
| | • | | Statements regarding the proposed ETC Merger; |
| | • | | Our beliefs relating to value creation as a result of the proposed ETC Merger; |
| | • | | Benefits and synergies of the proposed ETC Merger; |
| | • | | Future opportunities for the combined company; |
| | • | | Other statements regarding Williams’ and Energy Transfer Equity, L.P. and its affiliates’ (collectively, Energy Transfer) future beliefs, expectations, plans, intentions, financial condition or performance; |
| | • | | Events which may occur subsequent to the proposed ETC Merger including events which directly impact WPZ’s business; |
| | • | | 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; |
| | • | | Future credit ratings of Williams, WPZ and their affiliates; |
| | • | | 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 document. 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 proposed ETC Merger, including receipt of the approval of Williams’ stockholders; |
| | • | | The timing and likelihood of completion of the proposed ETC Merger, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals for the proposed ETC Merger that could reduce anticipated benefits or cause the parties to abandon the proposed transaction; |
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| | • | | Energy Transfer’s plans for WPZ, as well as the other master limited partnerships it currently controls, following the completion of the proposed ETC merger; |
| | • | | The possibility that the expected synergies and value creation from the proposed ETC Merger will not be realized or will not be realized within the expected time period; |
| | • | | The risk that the businesses of Williams and Energy Transfer will not be integrated successfully; |
| | • | | Disruption from the proposed ETC Merger making it more difficult to maintain business and operational relationships; |
| | • | | The risk that unexpected costs will be incurred in connection with the proposed ETC Merger; |
| | • | | The possibility that the proposed ETC Merger does not close, including due to the failure to satisfy the closing conditions; |
| | • | | 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, 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; |
| | • | | 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 document. 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.
Because forward-looking statements involve risks and uncertainties, we caution that there are important factors, in addition to those listed above, that may cause actual results to differ materially from those contained in the forward-looking statements. For a detailed discussion of those factors, see Part I, Item 1A. Risk Factors in Williams’ and WPZ’s Annual Reports on Form 10-K filed with the SEC on February 25, 2015 and in Part II, Item 1A. Risk Factors in our Quarterly Reports on Form 10-Q available from our offices or from our website atwww.williams.com.
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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 | | | 2nd Qtr | | | 3rd 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 | | | $ | (40 | ) | | $ | 144 | |
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Income (loss) from continuing operations—diluted earnings per common share | | $ | .20 | | | $ | .14 | | | $ | 2.22 | | | $ | .26 | | | $ | 2.91 | | | $ | .09 | | | $ | .15 | | | $ | (.05 | ) | | $ | .19 | |
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Adjustments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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Williams Partners | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ACMP Acquisition-related expenses | | $ | — | | | $ | 2 | | | $ | 13 | | | $ | 1 | | | $ | 16 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
ACMP Merger and transition-related expenses | | | — | | | | — | | | | 11 | | | | 30 | | | | 41 | | | | 32 | | | | 14 | | | | 2 | | | | 48 | |
Impairment of certain assets | | | — | | | | 17 | | | | — | | | | 35 | | | | 52 | | | | 3 | | | | 24 | | | | 2 | | | | 29 | |
Share of impairment at equity-method investments | | | — | | | | — | | | | — | | | | — | | | | — | | | | 8 | | | | 1 | | | | 17 | | | | 26 | |
Contingency 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 (recovery) related to Opal incident | | | — | | | | 6 | | | | — | | | | 2 | | | | 8 | | | | 1 | | | | — | | | | (8 | ) | | | (7 | ) |
Loss on sale of equipment | | | — | | | | — | | | | — | | | | 7 | | | | 7 | | | | — | | | | — | | | | | | | | — | |
Estimated minimum volume commitments | | | — | | | | — | | | | 47 | | | | (114 | ) | | | (67 | ) | | | 55 | | | | 55 | | | | 65 | | | | 175 | |
Gain on extinguishment of debt | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (14 | ) | | | — | | | | (14 | ) |
Proposed WMB/WPZ merger expenses | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1 | | | | 1 | |
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Total Williams Partners adjustments | | | 60 | | | | 121 | | | | 64 | | | | (248 | ) | | | (3 | ) | | | 100 | | | | (45 | ) | | | 79 | | | | 134 | |
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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 | | | | — | | | | — | | | | — | | | | — | |
Other ACMP Merger and transition-related expenses | | | — | | | | — | | | | 3 | | | | 7 | | | | 10 | | | | 6 | | | | 9 | | | | 7 | | | | 22 | |
Expenses associated with strategic alternatives | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 7 | | | | 18 | | | | 25 | |
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Total Other adjustments | | | — | | | | — | | | | 22 | | | | 7 | | | | 29 | | | | 6 | | �� | | 16 | | | | 25 | | | | 47 | |
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Adjustments included in Modified EBITDA | | | 155 | | | | 122 | | | | 86 | | | | (242 | ) | | | 121 | | | | 106 | | | | (29 | ) | | | 104 | | | | 181 | |
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Adjustments below Modified EBITDA | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impairment of equity-method investments | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 461 | | | | 461 | |
ACMP 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 | ) | | | (18 | ) | | | (27 | ) |
Allocation of adjustments to noncontrolling interests | | | (25 | ) | | | (36 | ) | | | 3 | | | | 38 | | | | (20 | ) | | | (33 | ) | | | 21 | | | | (212 | ) | | | (224 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (38 | ) | | | (45 | ) | | | (2,529 | ) | | | 16 | | | | (2,596 | ) | | | (31 | ) | | | 12 | | | | 231 | | | | 212 | |
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Total adjustments | | | 117 | | | | 77 | | | | (2,443 | ) | | | (226 | ) | | | (2,475 | ) | | | 75 | | | | (17 | ) | | | 335 | | | | 393 | |
Less tax effect for above items | | | (47 | ) | | | (32 | ) | | | 925 | | | | 41 | | | | 887 | | | | (28 | ) | | | 4 | | | | (129 | ) | | | (153 | ) |
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Adjustments for tax-related items (1) | | | (20 | ) | | | 14 | | | | (3 | ) | | | 2 | | | | (7 | ) | | | 5 | | | | 9 | | | | 1 | | | | 15 | |
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| | | | | | | | | |
Adjusted income from continuing operations available to common stockholders | | $ | 190 | | | $ | 158 | | | $ | 157 | | | $ | 10 | | | $ | 515 | | | $ | 122 | | | $ | 110 | | | $ | 167 | | | $ | 399 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Adjusted diluted earnings per common share | | $ | .28 | | | $ | .23 | | | $ | .21 | | | $ | .01 | | | $ | .71 | | | $ | .16 | | | $ | .15 | | | $ | .22 | | | $ | .53 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Weighted-average shares—diluted (thousands) | | | 688,904 | | | | 700,696 | | | | 752,064 | | | | 751,898 | | | | 723,641 | | | | 752,028 | | | | 752,775 | | | | 753,100 | | | | 752,638 | |
| (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.
7
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 | | | 3rd Qtr | | | Year | |
Net income (loss) | | $ | 196 | | | $ | 127 | | | $ | 1,708 | | | $ | 308 | | | $ | 2,339 | | | $ | 13 | | | $ | 183 | | | $ | (173 | ) | | $ | 23 | |
(Income) loss from discontinued operations | | | — | | | | (4 | ) | | | — | | | | — | | | | (4 | ) | | | — | | | | — | | | | — | | | | — | |
Provision (benefit) for income taxes | | | 51 | | | | 84 | | | | 998 | | | | 116 | | | | 1,249 | | | | 30 | | | | 83 | | | | (65 | ) | | | 48 | |
Interest expense | | | 140 | | | | 163 | | | | 210 | | | | 234 | | | | 747 | | | | 251 | | | | 262 | | | | 263 | | | | 776 | |
Equity (earnings) losses | | | 48 | | | | (37 | ) | | | (66 | ) | | | (89 | ) | | | (144 | ) | | | (51 | ) | | | (93 | ) | | | (92 | ) | | | (236 | ) |
Gain on remeasurement of equity-method investments | | | — | | | | — | | | | (2,522 | ) | | | (22 | ) | | | (2,544 | ) | | | — | | | | — | | | | — | | | | — | |
Impairment of equity-method investments | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 461 | | | | 461 | |
Other investing (income) loss | | | (14 | ) | | | (18 | ) | | | (11 | ) | | | — | | | | (43 | ) | | | — | | | | (9 | ) | | | (18 | ) | | | (27 | ) |
Proportional Modified EBITDA of equity-method investments | | | 28 | | | | 113 | | | | 132 | | | | 165 | | | | 438 | | | | 136 | | | | 183 | | | | 185 | | | | 504 | |
Depreciation and amortization expenses | | | 214 | | | | 214 | | | | 369 | | | | 379 | | | | 1,176 | | | | 427 | | | | 428 | | | | 432 | | | | 1,287 | |
Accretion for asset retirement obligations associated with nonregulated operations | | | 3 | | | | 6 | | | | 4 | | | | 5 | | | | 18 | | | | 6 | | | | 9 | | | | 6 | | | | 21 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Modified EBITDA | | $ | 666 | | | $ | 648 | | | $ | 822 | | | $ | 1,096 | | | $ | 3,232 | | | $ | 812 | | | $ | 1,046 | | | $ | 999 | | | $ | 2,857 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Williams Partners | | $ | 708 | | | $ | 596 | | | $ | 843 | | | $ | 1,097 | | | $ | 3,244 | | | $ | 817 | | | $ | 1,053 | | | $ | 1,021 | | | $ | 2,891 | |
Williams NGL & Petchem Services | | | (100 | ) | | | (8 | ) | | | (4 | ) | | | (3 | ) | | | (115 | ) | | | (5 | ) | | | (3 | ) | | | (5 | ) | | | (13 | ) |
Other | | | 58 | | | | 60 | | | | (17 | ) | | | 2 | | | | 103 | | | | — | | | | (4 | ) | | | (17 | ) | | | (21 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Modified EBITDA | | $ | 666 | | | $ | 648 | | | $ | 822 | | | $ | 1,096 | | | $ | 3,232 | | | $ | 812 | | | $ | 1,046 | | | $ | 999 | | | $ | 2,857 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustments included in Modified EBITDA: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 60 | | | $ | 121 | | | $ | 64 | | | $ | (248 | ) | | $ | (3 | ) | | $ | 100 | | | $ | (45 | ) | | $ | 79 | | | $ | 134 | |
Williams NGL & Petchem Services | | | 95 | | | | 1 | | | | — | | | | (1 | ) | | | 95 | | | | — | | | | — | | | | — | | | | — | |
Other | | | — | | | | — | | | | 22 | | | | 7 | | | | 29 | | | | 6 | | | | 16 | | | | 25 | | | | 47 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Adjustments included in Modified EBITDA | | $ | 155 | | | $ | 122 | | | $ | 86 | | | $ | (242 | ) | | $ | 121 | | | $ | 106 | | | $ | (29 | ) | | $ | 104 | | | $ | 181 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 768 | | | $ | 717 | | | $ | 907 | | | $ | 849 | | | $ | 3,241 | | | $ | 917 | | | $ | 1,008 | | | $ | 1,100 | | | $ | 3,025 | |
Williams NGL & Petchem Services | | | (5 | ) | | | (7 | ) | | | (4 | ) | | | (4 | ) | | | (20 | ) | | | (5 | ) | | | (3 | ) | | | (5 | ) | | | (13 | ) |
Other | | | 58 | | | | 60 | | | | 5 | | | | 9 | | | | 132 | | | | 6 | | | | 12 | | | | 8 | | | | 26 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Adjusted EBITDA | | $ | 821 | | | $ | 770 | | | $ | 908 | | | $ | 854 | | | $ | 3,353 | | | $ | 918 | | | $ | 1,017 | | | $ | 1,103 | | | $ | 3,038 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
8
Financial Highlights and Operating Statistics
(UNAUDITED)
Final
September 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 | | | 3rd 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 | | | $ | (40 | ) | | $ | 144 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations—diluted earnings per common share | | $ | .20 | | | $ | .14 | | | $ | 2.22 | | | $ | .26 | | | $ | 2.91 | | | $ | .09 | | | $ | .15 | | | $ | (.05 | ) | | $ | .19 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustments: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Williams Partners | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ACMP Acquisition-related expenses | | $ | — | | | $ | 2 | | | $ | 13 | | | $ | 1 | | | $ | 16 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
ACMP Merger and transition-related expenses | | | — | | | | — | | | | 11 | | | | 30 | | | | 41 | | | | 32 | | | | 14 | | | | 2 | | | | 48 | |
Impairment of certain assets | | | — | | | | 17 | | | | — | | | | 35 | | | | 52 | | | | 3 | | | | 24 | | | | 2 | | | | 29 | |
Share of impairment at equity-method investments | | | — | | | | — | | | | — | | | | — | | | | — | | | | 8 | | | | 1 | | | | 17 | | | | 26 | |
Contingency 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 (recovery) related to Opal incident | | | — | | | | 6 | | | | — | | | | 2 | | | | 8 | | | | 1 | | | | — | | | | (8 | ) | | | (7 | ) |
Loss on sale of equipment | | | — | | | | — | | | | — | | | | 7 | | | | 7 | | | | — | | | | — | | | | | | | | — | |
Estimated minimum volume commitments | | | — | | | | — | | | | 47 | | | | (114 | ) | | | (67 | ) | | | 55 | | | | 55 | | | | 65 | | | | 175 | |
Gain on extinguishment of debt | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (14 | ) | | | — | | | | (14 | ) |
Proposed WMB/WPZ merger expenses | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1 | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Williams Partners adjustments | | | 60 | | | | 121 | | | | 64 | | | | (248 | ) | | | (3 | ) | | | 100 | | | | (45 | ) | | | 79 | | | | 134 | |
| | | | | | | | | |
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 ACMP Merger and transition-related expenses | | | — | | | | — | | | | 3 | | | | 7 | | | | 10 | | | | 6 | | | | 9 | | | | 7 | | | | 22 | |
Expenses associated with strategic alternatives | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 7 | | | | 18 | | | | 25 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Other adjustments | | | — | | | | — | | | | 22 | | | | 7 | | | | 29 | | | | 6 | | | | 16 | | | | 25 | | | | 47 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustments included in Modified EBITDA | | | 155 | | | | 122 | | | | 86 | | | | (242 | ) | | | 121 | | | | 106 | | | | (29 | ) | | | 104 | | | | 181 | |
| | | | | | | | | |
Adjustments below Modified EBITDA | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Impairment of equity-method investments | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 461 | | | | 461 | |
ACMP 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 | ) | | | (18 | ) | | | (27 | ) |
Allocation of adjustments to noncontrolling interests | | | (25 | ) | | | (36 | ) | | | 3 | | | | 38 | | | | (20 | ) | | | (33 | ) | | | 21 | | | | (212 | ) | | | (224 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (38 | ) | | | (45 | ) | | | (2,529 | ) | | | 16 | | | | (2,596 | ) | | | (31 | ) | | | 12 | | | | 231 | | | | 212 | |
| | | | | | | | | |
Total adjustments | | | 117 | | | | 77 | | | | (2,443 | ) | | | (226 | ) | | | (2,475 | ) | | | 75 | | | | (17 | ) | | | 335 | | | | 393 | |
Less tax effect for above items | | | (47 | ) | | | (32 | ) | | | 925 | | | | 41 | | | | 887 | | | | (28 | ) | | | 4 | | | | (129 | ) | | | (153 | ) |
| | | | | | | | | |
Adjustments for tax-related items (1) | | | (20 | ) | | | 14 | | | | (3 | ) | | | 2 | | | | (7 | ) | | | 5 | | | | 9 | | | | 1 | | | | 15 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Adjusted income from continuing operations available to common stockholders | | $ | 190 | | | $ | 158 | | | $ | 157 | | | $ | 10 | | | $ | 515 | | | $ | 122 | | | $ | 110 | | | $ | 167 | | | $ | 399 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Adjusted diluted earnings per common share | | $ | .28 | | | $ | .23 | | | $ | .21 | | | $ | .01 | | | $ | .71 | | | $ | .16 | | | $ | .15 | | | $ | .22 | | | $ | .53 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Weighted-average shares—diluted (thousands) | | | 688,904 | | | | 700,696 | | | | 752,064 | | | | 751,898 | | | | 723,641 | | | | 752,028 | | | | 752,775 | | | | 753,100 | | | | 752,638 | |
| (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 Operations
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2014 | | | 2015 | |
| (Dollars in millions, except per-share amounts) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | Year | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Service revenues | | $ | 819 | | | $ | 825 | | | $ | 1,127 | | | $ | 1,345 | | | $ | 4,116 | | | $ | 1,197 | | | $ | 1,241 | | | $ | 1,239 | | | $ | 3,677 | |
Product sales | | | 930 | | | | 853 | | | | 942 | | | | 796 | | | | 3,521 | | | | 519 | | | | 598 | | | | 560 | | | | 1,677 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | | 1,749 | | | | 1,678 | | | | 2,069 | | | | 2,141 | | | | 7,637 | | | | 1,716 | | | | 1,839 | | | | 1,799 | | | | 5,354 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Product costs | | | 769 | | | | 724 | | | | 807 | | | | 716 | | | | 3,016 | | | | 462 | | | | 494 | | | | 426 | | | | 1,382 | |
Operating and maintenance expenses | | | 298 | | | | 308 | | | | 412 | | | | 474 | | | | 1,492 | | | | 387 | | | | 437 | | | | 403 | | | | 1,227 | |
Depreciation and amortization expenses | | | 214 | | | | 214 | | | | 369 | | | | 379 | | | | 1,176 | | | | 427 | | | | 428 | | | | 432 | | | | 1,287 | |
Selling, general, and administrative expenses | | | 150 | | | | 136 | | | | 171 | | | | 204 | | | | 661 | | | | 196 | | | | 174 | | | | 177 | | | | 547 | |
Net insurance recoveries—Geismar Incident | | | (119 | ) | | | (42 | ) | | | — | | | | (71 | ) | | | (232 | ) | | | — | | | | (126 | ) | | | — | | | | (126 | ) |
Other (income) expense—net | | | 17 | | | | 27 | | | | 3 | | | | (92 | ) | | | (45 | ) | | | 17 | | | | 40 | | | | 5 | | | | 62 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total costs and expenses | | | 1,329 | | | | 1,367 | | | | 1,762 | | | | 1,610 | | | | 6,068 | | | | 1,489 | | | | 1,447 | | | | 1,443 | | | | 4,379 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | | 420 | | | | 311 | | | | 307 | | | | 531 | | | | 1,569 | | | | 227 | | | | 392 | | | | 356 | | | | 975 | |
Equity earnings (losses) | | | (48 | ) | | | 37 | | | | 66 | | | | 89 | | | | 144 | | | | 51 | | | | 93 | | | | 92 | | | | 236 | |
Gain on remeasurement of equity-method investment | | | — | | | | — | | | | 2,522 | | | | 22 | | | | 2,544 | | | | — | | | | — | | | | — | | | | — | |
Impairment of equity-method investments | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (461 | ) | | | (461 | ) |
Other investing income (loss)—net | | | 14 | | | | 18 | | | | 11 | | | | — | | | | 43 | | | | — | | | | 9 | | | | 18 | | | | 27 | |
Interest incurred | | | (169 | ) | | | (192 | ) | | | (262 | ) | | | (265 | ) | | | (888 | ) | | | (273 | ) | | | (278 | ) | | | (280 | ) | | | (831 | ) |
Interest capitalized | | | 29 | | | | 29 | | | | 52 | | | | 31 | | | | 141 | | | | 22 | | | | 16 | | | | 17 | | | | 55 | |
Other income (expense)—net | | | 1 | | | | 4 | | | | 10 | | | | 16 | | | | 31 | | | | 16 | | | | 34 | | | | 20 | | | | 70 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations before income taxes | | | 247 | | | | 207 | | | | 2,706 | | | | 424 | | | | 3,584 | | | | 43 | | | | 266 | | | | (238 | ) | | | 71 | |
Provision (benefit) for income taxes | | | 51 | | | | 84 | | | | 998 | | | | 116 | | | | 1,249 | | | | 30 | | | | 83 | | | | (65 | ) | | | 48 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | 196 | | | | 123 | | | | 1,708 | | | | 308 | | | | 2,335 | | | | 13 | | | | 183 | | | | (173 | ) | | | 23 | |
Income (loss) from discontinued operations | | | — | | | | 4 | | | | — | | | | — | | | | 4 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | | 196 | | | | 127 | | | | 1,708 | | | | 308 | | | | 2,339 | | | | 13 | | | | 183 | | | | (173 | ) | | | 23 | |
Less: Net income (loss) attributable to noncontrolling interests | | | 56 | | | | 24 | | | | 30 | | | | 115 | | | | 225 | | | | (57 | ) | | | 69 | | | | (133 | ) | | | (121 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) attributable to The Williams Companies, Inc. | | $ | 140 | | | $ | 103 | | | $ | 1,678 | | | $ | 193 | | | $ | 2,114 | | | $ | 70 | | | $ | 114 | | | $ | (40 | ) | | $ | 144 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Amounts attributable to The Williams Companies, Inc.: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | $ | 140 | | | $ | 99 | | | $ | 1,678 | | | $ | 193 | | | $ | 2,110 | | | $ | 70 | | | $ | 114 | | | $ | (40 | ) | | $ | 144 | |
Income (loss) from discontinued operations | | | — | | | | 4 | | | | — | | | | — | | | | 4 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 140 | | | $ | 103 | | | $ | 1,678 | | | $ | 193 | | | $ | 2,114 | | | $ | 70 | | | $ | 114 | | | $ | (40 | ) | | $ | 144 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Diluted earnings (loss) per common share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | $ | .20 | | | $ | .14 | | | $ | 2.22 | | | $ | .26 | | | $ | 2.91 | | | $ | .09 | | | $ | .15 | | | $ | (.05 | ) | | $ | .19 | |
Income (loss) from discontinued operations | | | — | | | | .01 | | | | — | | | | — | | | | .01 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | .20 | | | $ | .15 | | | $ | 2.22 | | | $ | .26 | | | $ | 2.92 | | | $ | .09 | | | $ | .15 | | | $ | (.05 | ) | | $ | .19 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted-average number of shares used in computations (thousands) | | | 688,904 | | | | 700,696 | | | | 752,064 | | | | 751,898 | | | | 723,641 | | | | 752,028 | | | | 752,775 | | | | 749,824 | | | | 752,621 | |
Common shares outstanding at end of period (thousands) | | | 685,419 | | | | 747,190 | | | | 747,453 | | | | 747,531 | | | | 747,531 | | | | 748,912 | | | | 749,529 | | | | 749,740 | | | | 749,740 | |
Market price per common share (end of period) | | $ | 40.58 | | | $ | 58.21 | | | $ | 55.35 | | | $ | 44.94 | | | $ | 44.94 | | | $ | 50.59 | | | $ | 57.39 | | | $ | 36.85 | | | $ | 36.85 | |
Cash dividends declared per share | | $ | .4025 | | | $ | .4250 | | | $ | .56 | | | $ | .57 | | | $ | 1.9575 | | | $ | .58 | | | $ | .59 | | | $ | .64 | | | $ | 1.81 | |
| 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 | | | 3rd Qtr | | | Year | |
Net income (loss) | | $ | 196 | | | $ | 127 | | | $ | 1,708 | | | $ | 308 | | | $ | 2,339 | | | $ | 13 | | | $ | 183 | | | $ | (173 | ) | | $ | 23 | |
(Income) loss from discontinued operations | | | — | | | | (4 | ) | | | — | | | | — | | | | (4 | ) | | | — | | | | — | | | | — | | | | — | |
Provision (benefit) for income taxes | | | 51 | | | | 84 | | | | 998 | | | | 116 | | | | 1,249 | | | | 30 | | | | 83 | | | | (65 | ) | | | 48 | |
Interest expense | | | 140 | | | | 163 | | | | 210 | | | | 234 | | | | 747 | | | | 251 | | | | 262 | | | | 263 | | | | 776 | |
Equity (earnings) losses | | | 48 | | | | (37 | ) | | | (66 | ) | | | (89 | ) | | | (144 | ) | | | (51 | ) | | | (93 | ) | | | (92 | ) | | | (236 | ) |
Gain on remeasurement of equity-method investments | | | — | | | | — | | | | (2,522 | ) | | | (22 | ) | | | (2,544 | ) | | | — | | | | — | | | | — | | | | — | |
Impairment of equity-method investments | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 461 | | | | 461 | |
Other investing (income) loss | | | (14 | ) | | | (18 | ) | | | (11 | ) | | | — | | | | (43 | ) | | | — | | | | (9 | ) | | | (18 | ) | | | (27 | ) |
Proportional Modified EBITDA of equity-method investments | | | 28 | | | | 113 | | | | 132 | | | | 165 | | | | 438 | | | | 136 | | | | 183 | | | | 185 | | | | 504 | |
Depreciation and amortization expenses | | | 214 | | | | 214 | | | | 369 | | | | 379 | | | | 1,176 | | | | 427 | | | | 428 | | | | 432 | | | | 1,287 | |
Accretion for asset retirement obligations associated with nonregulated operations | | | 3 | | | | 6 | | | | 4 | | | | 5 | | | | 18 | | | | 6 | | | | 9 | | | | 6 | | | | 21 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Modified EBITDA | | $ | 666 | | | $ | 648 | | | $ | 822 | | | $ | 1,096 | | | $ | 3,232 | | | $ | 812 | | | $ | 1,046 | | | $ | 999 | | | $ | 2,857 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Williams Partners | | $ | 708 | | | $ | 596 | | | $ | 843 | | | $ | 1,097 | | | $ | 3,244 | | | $ | 817 | | | $ | 1,053 | | | $ | 1,021 | | | $ | 2,891 | |
Williams NGL & Petchem Services | | | (100 | ) | | | (8 | ) | | | (4 | ) | | | (3 | ) | | | (115 | ) | | | (5 | ) | | | (3 | ) | | | (5 | ) | | | (13 | ) |
Other | | | 58 | | | | 60 | | | | (17 | ) | | | 2 | | | | 103 | | | | — | | | | (4 | ) | | | (17 | ) | | | (21 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Modified EBITDA | | $ | 666 | | | $ | 648 | | | $ | 822 | | | $ | 1,096 | | | $ | 3,232 | | | $ | 812 | | | $ | 1,046 | | | $ | 999 | | | $ | 2,857 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjustments included in Modified EBITDA: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 60 | | | $ | 121 | | | $ | 64 | | | $ | (248 | ) | | $ | (3 | ) | | $ | 100 | | | $ | (45 | ) | | $ | 79 | | | $ | 134 | |
Williams NGL & Petchem Services | | | 95 | | | | 1 | | | | — | | | | (1 | ) | | | 95 | | | | — | | | | — | | | | — | | | | — | |
Other | | | — | | | | — | | | | 22 | | | | 7 | | | | 29 | | | | 6 | | | | 16 | | | | 25 | | | | 47 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Adjustments included in Modified EBITDA | | $ | 155 | | | $ | 122 | | | $ | 86 | | | $ | (242 | ) | | $ | 121 | | | $ | 106 | | | $ | (29 | ) | | $ | 104 | | | $ | 181 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 768 | | | $ | 717 | | | $ | 907 | | | $ | 849 | | | $ | 3,241 | | | $ | 917 | | | $ | 1,008 | | | $ | 1,100 | | | $ | 3,025 | |
Williams NGL & Petchem Services | | | (5 | ) | | | (7 | ) | | | (4 | ) | | | (4 | ) | | | (20 | ) | | | (5 | ) | | | (3 | ) | | | (5 | ) | | | (13 | ) |
Other | | | 58 | | | | 60 | | | | 5 | | | | 9 | | | | 132 | | | | 6 | | | | 12 | | | | 8 | | | | 26 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Adjusted EBITDA | | $ | 821 | | | $ | 770 | | | $ | 908 | | | $ | 854 | | | $ | 3,353 | | | $ | 918 | | | $ | 1,017 | | | $ | 1,103 | | | $ | 3,038 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2014 | | | 2015 | |
| (Dollars in millions) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | Year | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Service revenues | | $ | 763 | | | $ | 763 | | | $ | 1,066 | | | $ | 1,296 | | | $ | 3,888 | | | $ | 1,192 | | | $ | 1,231 | | | $ | 1,232 | | | $ | 3,655 | |
Product sales | | | 930 | | | | 853 | | | | 942 | | | | 796 | | | | 3,521 | | | | 519 | | | | 599 | | | | 560 | | | | 1,678 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | | 1,693 | | | | 1,616 | | | | 2,008 | | | | 2,092 | | | | 7,409 | | | | 1,711 | | | | 1,830 | | | | 1,792 | | | | 5,333 | |
Segment costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Product costs | | | 769 | | | | 724 | | | | 807 | | | | 716 | | | | 3,016 | | | | 463 | | | | 494 | | | | 426 | | | | 1,383 | |
Operating and maintenance expenses | | | 245 | | | | 245 | | | | 351 | | | | 419 | | | | 1,260 | | | | 373 | | | | 424 | | | | 387 | | | | 1,184 | |
Selling, general, and administrative expenses | | | 130 | | | | 134 | | | | 168 | | | | 201 | | | | 633 | | | | 193 | | | | 164 | | | | 156 | | | | 513 | |
Net insurance recoveries—Geismar Incident | | | (119 | ) | | | (42 | ) | | | — | | | | (71 | ) | | | (232 | ) | | | — | | | | (126 | ) | | | — | | | | (126 | ) |
Other segment costs and expenses | | | 14 | | | | 21 | | | | (11 | ) | | | (105 | ) | | | (81 | ) | | | 1 | | | | 4 | | | | (13 | ) | | | (8 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total segment costs and expenses | | | 1,039 | | | | 1,082 | | | | 1,315 | | | | 1,160 | | | | 4,596 | | | | 1,030 | | | | 960 | | | | 956 | | | | 2,946 | |
Proportional Modified EBITDA of equity-method investments | | | 54 | | | | 62 | | | | 150 | | | | 165 | | | | 431 | | | | 136 | | | | 183 | | | | 185 | | | | 504 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Modified EBITDA | | | 708 | | | | 596 | | | | 843 | | | | 1,097 | | | | 3,244 | | | | 817 | | | | 1,053 | | | | 1,021 | | | | 2,891 | |
Adjustments | | | 60 | | | | 121 | | | | 64 | | | | (248 | ) | | | (3 | ) | | | 100 | | | | (45 | ) | | | 79 | | | | 134 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 768 | | | $ | 717 | | | $ | 907 | | | $ | 849 | | | $ | 3,241 | | | $ | 917 | | | $ | 1,008 | | | $ | 1,100 | | | $ | 3,025 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating statistics | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interstate Transmission | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Throughput (Tbtu) | | | 1,141.6 | | | | 938.1 | | | | 978.0 | | | | 1,083.9 | | | | 4,141.6 | | | | 1,207.8 | | | | 967.9 | | | | 981.5 | | | | 3,157.2 | |
Avg. daily transportation volumes (Tbtu) | | | 12.6 | | | | 10.4 | | | | 10.6 | | | | 11.7 | | | | 11.4 | | | | 13.5 | | | | 10.6 | | | | 10.7 | | | | 11.6 | |
Avg. daily firm reserved capacity (Tbtu) | | | 12.6 | | | | 12.4 | | | | 12.5 | | | | 12.9 | | | | 12.9 | | | | 13.5 | | | | 14.0 | | | | 14.5 | | | | 14.0 | |
| | | | | | | | | |
Former WPZ Operations Gathering and Processing (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gathering volumes (Tbtu) | | | 436 | | | | 450 | | | | 461 | | | | 487 | | | | 1,834 | | | | 502 | | | | 475 | | | | 480 | | | | 1,457 | |
Plant inlet natural gas volumes (Tbtu) | | | 339 | | | | 344 | | | | 370 | | | | 366 | | | | 1,419 | | | | 363 | | | | 365 | | | | 367 | | | | 1,095 | |
| | | | | | | | | |
Former ACMP Gathering Operations Throughput, bcf per day (2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Barnett shale | | | — | | | | — | | | | .876 | | | | .853 | | | | .865 | | | | .812 | | | | .804 | | | | .788 | | | | .801 | |
Eagle Ford shale | | | — | | | | — | | | | .348 | | | | .376 | | | | .362 | | | | .388 | | | | .377 | | | | .418 | | | | .395 | |
Haynesville shale | | | — | | | | — | | | | .714 | | | | .802 | | | | .758 | | | | .971 | | | | 1.085 | | | | 1.000 | | | | 1.019 | |
Marcellus shale | | | — | | | | — | | | | 1.193 | | | | 1.272 | | | | 1.233 | | | | 1.232 | | | | 1.273 | | | | 1.239 | | | | 1.248 | |
Utica shale | | | — | | | | — | | | | .418 | | | | .484 | | | | .451 | | | | .513 | | | | .606 | | | | .459 | | | | .526 | |
Mid-Continent | | | — | | | | — | | | | .554 | | | | .537 | | | | .545 | | | | .506 | | | | .515 | | | | .519 | | | | .520 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total throughput | | | — | | | | — | | | | 4.103 | | | | 4.324 | | | | 4.214 | | | | 4.422 | | | | 4.660 | | | | 4.423 | | | | 4.509 | |
Ethane equity sales (million gallons) | | | 33 | | | | 39 | | | | 42 | | | | 43 | | | | 157 | | | | 54 | | | | 49 | | | | 66 | | | | 169 | |
Non-ethane equity sales (million gallons) | | | 113 | | | | 108 | | | | 124 | | | | 131 | | | | 476 | | | | 131 | | | | 122 | | | | 125 | | | | 378 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NGL equity sales (million gallons) | | | 146 | | | | 147 | | | | 166 | | | | 174 | | | | 633 | | | | 185 | | | | 171 | | | | 191 | | | | 547 | |
| | | | | | | | | |
Ethane margin ($/gallon) | | $ | .20 | | | $ | .18 | | | $ | .16 | | | $ | .17 | | | $ | .17 | | | $ | .13 | | | $ | .13 | | | $ | .13 | | | $ | .13 | |
Non-ethane margin ($/gallon) | | $ | .88 | | | $ | .80 | | | $ | .78 | | | $ | .58 | | | $ | .76 | | | $ | .28 | | | $ | .26 | | | $ | .23 | | | $ | .26 | |
NGL margin ($/gallon) | | $ | .73 | | | $ | .64 | | | $ | .63 | | | $ | .48 | | | $ | .61 | | | $ | .24 | | | $ | .22 | | | $ | .19 | | | $ | .22 | |
| | | | | | | | | |
Ethane production (million gallons) | | | 135 | | | | 173 | | | | 154 | | | | 163 | | | | 625 | | | | 111 | | | | 149 | | | | 165 | | | | 425 | |
Non-ethane production (million gallons) | | | 372 | | | | 384 | | | | 417 | | | | 408 | | | | 1,581 | | | | 408 | | | | 418 | | | | 444 | | | | 1,270 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NGL production (million gallons) | | | 507 | | | | 557 | | | | 571 | | | | 571 | | | | 2,206 | | | | 519 | | | | 567 | | | | 609 | | | | 1,695 | |
| | | | | | | | | |
Petrochemical Services | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Geismar ethylene sales volumes (million lbs) | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2 | | | | 213 | | | | 404 | | | | 619 | |
Geismar ethylene margin ($/lb)(3) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 0.21 | | | $ | 0.16 | | | $ | 0.18 | |
| | | | | | | | | |
Equity investments—100% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Discovery gathering volumes (Tbtu) | | | 21 | | | | 26 | | | | 32 | | | | 33 | | | | 112 | | | | 35 | | | | 61 | | | | 63 | | | | 159 | |
Discovery NGL equity sales (million gallons) | | | 10 | | | | 10 | | | | 18 | | | | 15 | | | | 53 | | | | 17 | | | | 22 | | | | 21 | | | | 60 | |
Discovery NGL production (million gallons) | | | 47 | | | | 54 | | | | 65 | | | | 61 | | | | 227 | | | | 62 | | | | 79 | | | | 81 | | | | 222 | |
Laurel Mountain gathering volumes (Tbtu) | | | 34 | | | | 36 | | | | 38 | | | | 40 | | | | 148 | | | | 40 | | | | 40 | | | | 51 | | | | 131 | |
Overland Pass NGL transportation volumes (Mbbls) | | | 8,612 | | | | 8,926 | | | | 9,482 | | | | 10,118 | | | | 37,138 | | | | 10,845 | | | | 13,860 | | | | 15,075 | | | | 39,780 | |
| (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. |
| (3) | Ethylene margin and ethylene margin per pound are calculated using financial results determined in accordance with GAAP, which include realized ethylene sales prices and ethylene COGS. Realized sales and COGS per unit metrics may vary from publicly quoted market indices or spot prices due to various factors, including, but not limited to, basis differentials, transportation costs, contract provisions, and inventory accounting methods. |
Williams NGL & Petchem Services
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2014 | | | 2015 | |
| (Dollars in millions) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | Year | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Service revenues | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 1 | | | $ | 1 | | | $ | 2 | |
Segment costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating and maintenance expenses | | | 2 | | | | 1 | | | | 2 | | | | 2 | | | | 7 | | | | 4 | | | | 2 | | | | 4 | | | | 10 | |
Selling, general, and administrative expenses | | | 22 | | | | 4 | | | | 4 | | | | 1 | | | | 31 | | | | 2 | | | | 2 | | | | 2 | | | | 6 | |
Other (income) expense—net | | | (1 | ) | | | 1 | | | | (1 | ) | | $ | — | | | | (1 | ) | | | (1 | ) | | | — | | | | — | | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total segment costs and expenses | | | 23 | | | | 6 | | | | 5 | | | | 3 | | | | 37 | | | | 5 | | | | 4 | | | | 6 | | | | 15 | |
Proportional Modified EBITDA of equity-method investments | | | (77 | ) | | | (2 | ) | | | 1 | | | | — | | | | (78 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Modified EBITDA | | | (100 | ) | | | (8 | ) | | | (4 | ) | | | (3 | ) | | | (115 | ) | | | (5 | ) | | | (3 | ) | | | (5 | ) | | | (13 | ) |
Adjustments | | | 95 | | | | 1 | | | | — | | | | (1 | ) | | | 95 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | (5 | ) | | $ | (7 | ) | | $ | (4 | ) | | $ | (4 | ) | | $ | (20 | ) | | $ | (5 | ) | | $ | (3 | ) | | $ | (5 | ) | | $ | (13 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Capital Expenditures and Investments
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2014 | | | 2015 | |
| (Dollars in millions) | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | 4th Qtr | | | Year | | | 1st Qtr | | | 2nd Qtr | | | 3rd Qtr | | | Year | |
Capital expenditures: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 724 | | | $ | 943 | | | $ | 1,029 | | | $ | 996 | | | $ | 3,692 | | | $ | 735 | | | $ | 715 | | | $ | 692 | | | $ | 2,142 | |
Williams NGL & Petchem Services | | | 61 | | | | 85 | | | | 62 | | | | 78 | | | | 286 | | | | 91 | | | | 102 | | | | 78 | | | | 271 | |
Other | | | 8 | | | | 18 | | | | 13 | | | | 14 | | | | 53 | | | | 6 | | | | 5 | | | | 1 | | | | 12 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total* | | $ | 793 | | | $ | 1,046 | | | $ | 1,104 | | | $ | 1,088 | | | $ | 4,031 | | | $ | 832 | | | $ | 822 | | | $ | 771 | | | $ | 2,425 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
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 | | | $ | 45 | | | $ | 528 | |
Williams NGL & Petchem Services | | | 13 | | | | 2 | | | | — | | | | (1 | ) | | | 14 | | | | — | | | | — | | | | — | | | | — | |
Other | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1 | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 228 | | | $ | 18 | | | $ | 99 | | | $ | 137 | | | $ | 482 | | | $ | 83 | | | $ | 400 | | | $ | 46 | | | $ | 529 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Summary: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 939 | | | $ | 959 | | | $ | 1,128 | | | $ | 1,134 | | | $ | 4,160 | | | $ | 818 | | | $ | 1,227 | | | $ | 737 | | | $ | 2,782 | |
Williams NGL & Petchem Services | | | 74 | | | | 87 | | | | 62 | | | | 77 | | | | 300 | | | | 91 | | | | 102 | | | | 78 | | | | 271 | |
Other | | | 8 | | | | 18 | | | | 5,971 | | | | 14 | | | | 6,011 | | | | 6 | | | | 5 | | | | 2 | | | | 13 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,021 | | | $ | 1,064 | | | $ | 7,161 | | | $ | 1,225 | | | $ | 10,471 | | | $ | 915 | | | $ | 1,334 | | | $ | 817 | | | $ | 3,066 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
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 | | | $ | 757 | | | $ | 2,311 | |
Purchase of businesses (net of cash acquired) | | | — | | | | — | | | | 5,958 | | | | — | | | | 5,958 | | | | — | | | | 112 | | | | — | | | | 112 | |
Purchase of investments | | | 228 | | | | 18 | | | | 99 | | | | 137 | | | | 482 | | | | 83 | | | | 400 | | | | 46 | | | | 529 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 1,068 | | | $ | 967 | | | $ | 7,170 | | | $ | 1,151 | | | $ | 10,356 | | | $ | 821 | | | $ | 1,328 | | | $ | 803 | | | $ | 2,952 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
*Increases to property, plant, and equipment | | $ | 840 | | | $ | 949 | | | $ | 1,113 | | | $ | 1,014 | | | $ | 3,916 | | | $ | 738 | | | $ | 816 | | | $ | 757 | | | $ | 2,311 | |
Changes in related accounts payable and accrued liabilities | | | (47 | ) | | | 97 | | | | (9 | ) | | | 74 | | | | 115 | | | | 94 | | | | 6 | | | | 14 | | | | 114 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Capital expenditures | | $ | 793 | | | $ | 1,046 | | | $ | 1,104 | | | $ | 1,088 | | | $ | 4,031 | | | $ | 832 | | | $ | 822 | | | $ | 771 | | | $ | 2,425 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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 | | | 3rd Qtr | | | Year | |
Depreciation and amortization: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners | | $ | 208 | | | $ | 207 | | | $ | 364 | | | $ | 372 | | | $ | 1,151 | | | $ | 419 | | | $ | 419 | | | $ | 423 | | | $ | 1,261 | |
Other | | | 6 | | | | 7 | | | | 5 | | | | 7 | | | | 25 | | | | 8 | | | | 9 | | | | 9 | | | | 26 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 214 | | | $ | 214 | | | $ | 369 | | | $ | 379 | | | $ | 1,176 | | | $ | 427 | | | $ | 428 | | | $ | 432 | | | $ | 1,287 | |
| | | | | | | | | |
Other selected financial data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 1,064 | | | $ | 860 | | | $ | 302 | | | $ | 240 | | | $ | 240 | | | $ | 341 | | | $ | 204 | | | $ | 125 | | | $ | 125 | |
Total assets | | $ | 28,306 | | | $ | 34,949 | | | $ | 49,807 | | | $ | 50,563 | | | $ | 50,563 | | | $ | 50,457 | | | $ | 51,163 | | | $ | 50,819 | | | $ | 50,819 | |
Capital structure: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Debt | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial paper | | $ | — | | | $ | — | | | $ | 265 | | | $ | 798 | | | $ | 798 | | | $ | — | | | $ | 1,743 | | | $ | 1,530 | | | $ | 1,530 | |
Current | | $ | 751 | | | $ | 751 | | | $ | 754 | | | $ | 4 | | | $ | 4 | | | $ | 801 | | | $ | 378 | | | $ | 377 | | | $ | 377 | |
Noncurrent | | $ | 12,099 | | | $ | 15,539 | | | $ | 19,922 | | | $ | 20,888 | | | $ | 20,888 | | | $ | 21,690 | | | $ | 21,285 | | | $ | 21,805 | | | $ | 21,805 | |
Stockholders’ equity | | $ | 4,616 | | | $ | 7,863 | | | $ | 9,129 | | | $ | 8,777 | | | $ | 8,777 | | | $ | 8,212 | | | $ | 7,928 | | | $ | 7,387 | | | $ | 7,387 | |
Debt to debt-plus-stockholders’ equity ratio | | | 73.6 | % | | | 67.4 | % | | | 69.6 | % | | | 71.2 | % | | | 71.2 | % | | | 73.3 | % | | | 74.7 | % | | | 76.2 | % | | | 76.2 | % |
| | | | | | | | | |
Cash distributions received from interests in: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Williams Partners L.P. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
General partner | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 226 | | | $ | 227 | | | $ | 224 | | | $ | 677 | |
Limited partner | | | — | | | | — | | | | — | | | | — | | | | — | | | | 289 | | | | 288 | | | | 289 | | | | 866 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 515 | | | $ | 515 | | | $ | 513 | | | $ | 1,543 | |
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 | | | $ | 513 | | | $ | 1,543 | |
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 | | | 3rd 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)(3) | | | — | | | | — | | | | — | | | | 515 | | | | 515 | | | | 515 | | | | 513 | | | | 513 | | | | 1,541 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total distributions from Pre-merger WPZ, ACMP, and WPZ | | | 455 | | | | 509 | | | | 521 | | | | 515 | | | | 2,000 | | | | 515 | | | | 513 | | | | 513 | | | | 1,541 | |
Williams NGL & Petchem Services adjusted cash flow (see below) | | | (5 | ) | | | (9 | ) | | | (5 | ) | | | (5 | ) | | | (24 | ) | | | (5 | ) | | | (3 | ) | | | (5 | ) | | | (13 | ) |
Corporate interest | | | (38 | ) | | | (50 | ) | | | (65 | ) | | | (54 | ) | | | (207 | ) | | | (64 | ) | | | (64 | ) | | | (63 | ) | | | (191 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Subtotal | | | 412 | | | | 450 | | | | 451 | | | | 456 | | | | 1,769 | | | | 446 | | | | 446 | | | | 445 | | | | 1,337 | |
WMB cash tax rate | | | 3 | % | | | 3 | % | | | — | % | | | — | % | | | 2 | % | | | -12 | % | | | 0 | % | | | 0 | % | | | -4 | % |
WMB cash taxes (excludes cash taxes paid by WPZ)(1) | | | (13 | ) | | | (14 | ) | | | — | | | | — | | | | (27 | ) | | | 55 | | | | — | | | | — | | | | 55 | |
Corporate Capex | | | (8 | ) | | | (18 | ) | | | (13 | ) | | | (14 | ) | | | (53 | ) | | | (6 | ) | | | (5 | ) | | | (6 | ) | | | (17 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
WMB cash flow available for dividends | | $ | 391 | | | $ | 418 | | | $ | 438 | | | $ | 442 | | | $ | 1,689 | | | $ | 495 | | | $ | 441 | | | $ | 439 | | | $ | 1,375 | |
- per share | | $ | 0.57 | | | $ | 0.61 | | | $ | 0.59 | | | $ | 0.59 | | | $ | 2.36 | | | $ | 0.66 | | | $ | 0.59 | | | $ | 0.59 | | | $ | 1.84 | |
WMB dividends paid | | | (276 | ) | | | (291 | ) | | | (419 | ) | | | (426 | ) | | | (1,412 | ) | | | (434 | ) | | | (442 | ) | | | (480 | ) | | | (1,356 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Excess cash flow available after dividends | | $ | 115 | | | $ | 127 | | | $ | 19 | | | $ | 16 | | | $ | 277 | | | $ | 61 | | | $ | (1 | ) | | $ | (41 | ) | | $ | 19 | |
Dividend per share | | $ | 0.4025 | | | $ | 0.4250 | | | $ | 0.5600 | | | $ | 0.5700 | | | $ | 1.9575 | | | $ | 0.5800 | | | $ | 0.5900 | | | $ | 0.6400 | | | $ | 1.8100 | |
Coverage ratio(2)(3) | | | 1.42 | | | | 1.44 | | | | 1.05 | | | | 1.04 | | | | 1.20 | | | | 1.14 | | | | 1.00 | | | | 0.91 | | | | 1.01 | |
| | | | | | | | | |
Williams NGL & Petchem Services Adjusted Cash Flow: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Modified EBITDA | | | (100 | ) | | | (8 | ) | | | (4 | ) | | | (3 | ) | | | (115 | ) | | | (5 | ) | | | (3 | ) | | | (5 | ) | | | (13 | ) |
Segment adjustments | | | 95 | | | | 1 | | | | — | | | | (1 | ) | | | 95 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | | (5 | ) | | | (7 | ) | | | (4 | ) | | | (4 | ) | | | (20 | ) | | | (5 | ) | | | (3 | ) | | | (5 | ) | | | (13 | ) |
Less: Maintenance Capex | | | — | | | | (2 | ) | | | (1 | ) | | | (1 | ) | | | (4 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Adjusted cash flow | | | (5 | ) | | | (9 | ) | | | (5 | ) | | | (5 | ) | | | (24 | ) | | | (5 | ) | | | (3 | ) | | | (5 | ) | | | (13 | ) |
| | | | |
| 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. |
| | (3) | | Cash distributions for the 2015 third quarter and year-to-date periods have been increased by $209 million in order to exclude the impact of the IDR waiver associated with the WPZ merger termination fee from the determination of coverage ratios. |
