Exhibit 99.2
Introduction to the Unaudited Pro Forma Condensed Financial Statements
On April 17, 2017, we announced that we agreed to sell Williams Olefins, L.L.C., a wholly owned subsidiary which owns an 88.46 percent undivided ownership interest in a Geismar, Louisiana, olefins plant and associated complex for $2.1 billion in cash. On July 6, 2017, the sale was completed and we received cash proceeds totaling $2.084 billion, reflecting adjustments for the estimated net working capital at closing and subject to final determination.
The following unaudited pro forma condensed financial statements have been developed by applying pro forma adjustments to the individual historical audited and unaudited financial statements of Williams Partners L.P. to reflect the disposition. The following unaudited pro forma condensed balance sheet as of March 31, 2017, has been prepared to give effect to the transaction as if the divestiture had occurred on March 31, 2017. The following unaudited pro forma condensed statements of income for the three months ended March 31, 2017, and year ended December 31, 2016, have been prepared to give effect to the transaction as if the divestiture had occurred at the beginning of 2016. Our historical condensed consolidated financial statements have been derived from and should be read together with the historical audited consolidated financial statements and related notes in Exhibit 99.1 of our Form 8-K dated May 25, 2017, and the historical unaudited consolidated financial statements and related notes in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.
The unaudited pro forma condensed financial statements are presented for illustrative purposes only to reflect the sale of Williams Olefins, L.L.C. and do not represent what our results of operations or financial position would actually have been had the sale occurred on the dates noted above, or project our results of operations or financial position for any future periods. The pro forma adjustments are based on available information and certain assumptions that management believes are factually supportable and are expected to have a continuing impact on our results of operations. All pro forma adjustments and their underlying assumptions are described more fully in the notes to the unaudited pro forma condensed financial information.
Williams Partners L.P.
Unaudited Pro Forma Condensed Balance Sheet
As of March 31, 2017
($ in millions)
Historical | ||||||||||||
Williams Partners L.P. | Pro Forma Adjustments | Pro Forma | ||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 625 | $ | 2,084 | $ | 2,709 | ||||||
Trade accounts and other receivables – net | 861 | — | 861 | |||||||||
Inventories | 148 | — | 148 | |||||||||
Assets held for sale | 1,023 | (999 | ) | 24 | ||||||||
Other current assets and deferred charges | 157 | — | 157 | |||||||||
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Total current assets | 2,814 | 1,085 | 3,899 | |||||||||
Investments | 6,738 | — | 6,738 | |||||||||
Property, plant, and equipment, at cost | 37,677 | — | 37,677 | |||||||||
Accumulated depreciation and amortization | (10,313 | ) | — | (10,313 | ) | |||||||
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Property, plant, and equipment – net | 27,364 | — | 27,364 | |||||||||
Intangible assets – net of accumulated amortization | 9,569 | — | 9,569 | |||||||||
Regulatory assets, deferred charges, and other | 453 | — | 453 | |||||||||
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Total assets | $ | 46,938 | $ | 1,085 | $ | 48,023 | ||||||
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LIABILITIES AND EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 732 | $ | — | $ | 732 | ||||||
Accrued interest | 170 | — | 170 | |||||||||
Asset retirement obligations | 48 | — | 48 | |||||||||
Liabilities held for sale | 43 | (43 | ) | — | ||||||||
Other accrued liabilities | 881 | 45 | 926 | |||||||||
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Total current liabilities | 1,874 | 2 | 1,876 | |||||||||
Long-term debt | 17,065 | — | 17,065 | |||||||||
Asset retirement obligations | 830 | — | 830 | |||||||||
Deferred income tax liabilities | 19 | — | 19 | |||||||||
Regulatory liabilities, deferred income, and other | 1,951 | — | 1,951 | |||||||||
Contingent liabilities | ||||||||||||
Equity: | ||||||||||||
Partners’ equity | 23,462 | 1,083 | 24,545 | |||||||||
Noncontrolling interests in consolidated subsidiaries | 1,737 | — | 1,737 | |||||||||
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Total equity | 25,199 | 1,083 | 26,282 | |||||||||
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Total liabilities and equity | $ | 46,938 | $ | 1,085 | $ | 48,023 | ||||||
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See accompanying notes.
Williams Partners L.P.
Unaudited Pro Forma Condensed Statement of Income
For the three months ended March 31, 2017
($ in millions, except per-unit amounts)
Historical | ||||||||||||
Williams Partners L.P. | Pro Forma Adjustments | Pro Forma | ||||||||||
Revenues | ||||||||||||
Service revenues | $ | 1,256 | $ | (4 | ) | $ | 1,252 | |||||
Product sales | 727 | (115 | ) | 612 | ||||||||
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Total revenues | 1,983 | (119 | ) | 1,864 | ||||||||
Costs and expenses: | ||||||||||||
Product costs | 579 | (55 | ) | 524 | ||||||||
Operating and maintenance expenses | 361 | (22 | ) | 339 | ||||||||
Depreciation and amortization expenses | 433 | (13 | ) | 420 | ||||||||
Selling, general, and administrative expenses | 156 | (5 | ) | 151 | ||||||||
Other (income) expense – net | 4 | — | 4 | |||||||||
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Total costs and expenses | 1,533 | (95 | ) | 1,438 | ||||||||
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Operating income (loss) | 450 | (24 | ) | 426 | ||||||||
Equity earnings (losses) | 107 | — | 107 | |||||||||
Other investing income (loss) – net | 271 | — | 271 | |||||||||
Interest expense | (214 | ) | 1 | (213 | ) | |||||||
Other income (expense) – net | 49 | — | 49 | |||||||||
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Income (loss) before income taxes | 663 | (23 | ) | 640 | ||||||||
Provision (benefit) for income taxes | 3 | — | 3 | |||||||||
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Net income (loss) | 660 | (23 | ) | 637 | ||||||||
Less: Income (loss) attributable to noncontrolling interests | 26 | — | 26 | |||||||||
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Net income (loss) attributable to controlling interests | $ | 634 | $ | (23 | ) | $ | 611 | |||||
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Allocation of net income (loss) for calculation of earnings per common unit: | ||||||||||||
Net income (loss) attributable to controlling interests | $ | 634 | $ | 611 | ||||||||
Allocation of net income (loss) to Class B units | 11 | 11 | ||||||||||
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Allocation of net income (loss) to common units | $ | 623 | $ | 600 | ||||||||
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Basic earnings (loss) per common unit: | ||||||||||||
Net income (loss) per common unit | $ | .68 | $ | .65 | ||||||||
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Weighted-average number of common units outstanding (thousands) | 919,944 | 919,944 | ||||||||||
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Diluted earnings (loss) per common share: | ||||||||||||
Net income (loss) per common unit | $ | .68 | $ | .65 | ||||||||
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Weighted-average number of common units outstanding (thousands) | 920,250 | 920,250 | ||||||||||
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See accompanying notes.
Williams Partners L.P.
Unaudited Pro Forma Condensed Statement of Income
For the year ended December 31, 2016
($ in millions, except per-unit amounts)
Historical | ||||||||||||
Williams Partners L.P. | Pro forma Adjustments | Pro Forma | ||||||||||
Revenues | ||||||||||||
Service revenues | $ | 5,173 | $ | (13 | ) | $ | 5,160 | |||||
Product sales | 2,318 | (427 | ) | 1,891 | ||||||||
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Total revenues | 7,491 | (440 | ) | 7,051 | ||||||||
Costs and expenses: | ||||||||||||
Product costs | 1,728 | (150 | ) | 1,578 | ||||||||
Operating and maintenance expenses | 1,548 | (86 | ) | 1,462 | ||||||||
Depreciation and amortization expenses | 1,720 | (52 | ) | 1,668 | ||||||||
Selling, general, and administrative expenses | 630 | (19 | ) | 611 | ||||||||
Impairment of certain assets | 457 | — | 457 | |||||||||
Other (income) expense – net | 111 | — | 111 | |||||||||
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Total costs and expenses | 6,194 | (307 | ) | 5,887 | ||||||||
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Operating income (loss) | 1,297 | (133 | ) | 1,164 | ||||||||
Equity earnings (losses) | 397 | — | 397 | |||||||||
Impairment of equity method investments | (430 | ) | — | (430 | ) | |||||||
Other investing income (loss) – net | 29 | — | 29 | |||||||||
Interest expense | (916 | ) | — | (916 | ) | |||||||
Other income (expense) – net | 62 | — | 62 | |||||||||
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Income (loss) before income taxes | 439 | (133 | ) | 306 | ||||||||
Provision (benefit) for income taxes | (80 | ) | — | (80 | ) | |||||||
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Net income (loss) | 519 | (133 | ) | 386 | ||||||||
Less: Income (loss) attributable to noncontrolling interests | 88 | — | 88 | |||||||||
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Net income (loss) attributable to controlling interests | $ | 431 | $ | (133 | ) | $ | 298 | |||||
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Allocation of net income (loss) for calculation of earnings per common unit: | ||||||||||||
Net income (loss) attributable to controlling interests | 431 | 298 | ||||||||||
Allocation of net income (loss) to general partner | 517 | 517 | ||||||||||
Allocation of net income (loss) to Class B units | 12 | 10 | ||||||||||
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Allocation of net income (loss) to common units | (98 | ) | (229 | ) | ||||||||
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Basic and diluted earnings (loss) per common unit: | ||||||||||||
Net income (loss) per common unit | $ | (.17 | ) | $ | (.39 | ) | ||||||
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Weighted-average number of common units outstanding (thousands) | 592,519 | 592,519 | ||||||||||
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See accompanying notes.
Note 1. Pro Forma Adjustments
Unaudited Pro Forma Condensed Balance Sheet Adjustments
The pro forma adjustments reflect $2.084 billion of cash received upon the sale of Williams Olefins, L.L.C., the removal of the related historical net assets of the disposal group, an accrual for certain estimated transaction-related items associated with the sale, and the impact resulting from the expected gain on disposal.
Unaudited Pro Forma Condensed Statements of Income Adjustments
The pro forma adjustments reflect the removal of the historical results of the disposal group. The pro forma adjustments do not reflect the expected gain on disposal, currently estimated to be approximately $1.083 billion.