Sign In  |  Register  |  About Burlingame  |  Contact Us

Burlingame, CA
September 01, 2020 10:18am
7-Day Forecast | Traffic
  • Search Hotels in Burlingame

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Williams Reports Strong Quarterly Financial Results Driven by Record Operational Performance; Announces Another 2021 Guidance Increase

Williams (NYSE: WMB) today announced its unaudited financial results for the three and nine months ended Sept. 30, 2021.

Continued financial strength and stability drove performance across key metrics

  • Net income of $164 million, or $0.13 per diluted share (EPS)
  • Adjusted EPS of $0.34 per diluted share – up 26% from 3Q 2020
  • Adjusted EBITDA of $1.420 billion – up $153 million or 12% from 3Q 2020
  • Achieved record quarterly gathering volumes of 14 Bcf/d
  • Achieved record quarterly contracted transmission capacity of 23.8 Bcf/d
  • Debt-to-Adjusted EBITDA at quarter end of 4.04x, exceeding previous goal of 4.2x
  • Increasing full-year 2021 Adjusted EBITDA guidance to $5.525 billion midpoint – up 8% over 2020
  • Dividend coverage ratio of 2.17x (AFFO basis) for 3Q 2021
  • Announced capital allocation strategy including opportunistic stock buyback program of up to $1.5 billion

Resilient natural gas business in position of growth; strategically aligned with lower-carbon energy future

  • Executing significant portfolio of gas transmission growth projects driven by demand-pull customers
  • Second phase of Leidy South project will be in full service in time for winter heating season
  • Advancing G&P customer expansion project in Northeast and across other key basins
  • Announced MOU with Ørsted to explore clean energy opportunities in the U.S.

CEO Perspective

Alan Armstrong, president and chief executive officer, made the following comments:

“We achieved exceptional results in the third quarter with Adjusted EBITDA up 12% compared to the same period last year, driven by growth across our three major business segments including another quarter of record gas gathering and transmission volumes, increased revenues from transmission projects and favorable NGL marketing margins. Given our robust performance to date and continued strong fundamentals, we are raising our 2021 financial guidance midpoint for the second time this year to a level that is now 8% above our 2020 performance.

"Our natural gas focused strategy and unmatched infrastructure continue to be called upon by customers to meet continued growing demand for clean energy. The second phase of our Leidy South expansion will be in full service ahead of schedule and in time for this winter’s heating season. In addition, we are executing on another 1.5 Bcf/d in high-return expansions along existing Transco and Gulfstream corridors, underscoring the long-term demand commitments of our customers.

"From an environmental perspective, our highly reliable natural gas transmission and storage networks are extremely well-positioned to continue displacing higher carbon fuels while supporting the growth of renewable energy and responsibly sourced natural gas for LNG export. In addition, we have further advanced 12 solar projects and we are pursuing emerging opportunities like a hydrogen hub near our assets in southwestern Wyoming. As we work to balance sustainability and climate goals with growing energy demand, Williams is playing a leading role in a clean energy future by leveraging our infrastructure, our expertise and our strategic relationships to develop pragmatic solutions to today’s energy challenges."

Williams Summary Financial Information

3Q

 

Year to Date

Amounts in millions, except ratios and per-share amounts. Per share amounts are reported on a diluted basis. Net income amounts are from continuing operations attributable to The Williams Companies, Inc. available to common stockholders.

2021

2020

 

2021

2020

 

 

 

 

 

 

GAAP Measures

 

 

 

 

 

Net Income

$

164

 

$

308

 

 

$

893

 

$

93

 

Net Income Per Share

$

0.13

 

$

0.25

 

 

$

0.73

 

$

0.08

 

Cash Flow From Operations

$

834

 

$

452

 

 

$

2,806

 

$

2,382

 

 

 

 

 

 

 

Non-GAAP Measures (1)

 

 

 

 

 

Adjusted EBITDA

$

1,420

 

$

1,267

 

 

$

4,152

 

$

3,769

 

Adjusted Net Income

$

410

 

$

333

 

 

$

1,166

 

$

951

 

Adjusted Earnings Per Share

$

0.34

 

$

0.27

 

 

$

0.96

 

$

0.78

 

Available Funds from Operations

$

1,080

 

$

863

 

 

$

3,028

 

$

2,655

 

Dividend Coverage Ratio

 

2.17

x

 

1.78

x

 

 

2.03

x

 

1.82

x

 

 

 

 

 

 

Other

 

 

 

 

 

Debt-to-Adjusted EBITDA at Quarter End (2)

 

4.04

x

 

4.42

x

 

 

 

Capital Investments (3)

$

469

 

$

415

 

 

$

1,206

 

$

1,062

 

 

(1) Schedules reconciling Adjusted Income, Adjusted EBITDA, Available Funds from Operations and Dividend Coverage Ratio (non-GAAP measures) to the most comparable GAAP measure are available at www.williams.com and as an attachment to this news release.

(2) Does not represent leverage ratios measured for WMB credit agreement compliance or leverage ratios as calculated by the major credit ratings agencies. Debt is net of cash on hand, and Adjusted EBITDA reflects the sum of the last four quarters.

(3) Capital Investments includes increases to property, plant, and equipment (growth & maintenance capital), purchases of businesses, net of cash acquired, and purchases of and contributions to equity-method investments.

GAAP Measures

  • Third-quarter 2021 net income decreased by $144 million compared to the prior year reflecting $46 million of higher joint venture earnings in the Northeast G&P segment, $37 million primarily from higher NGL prices in the West, $23 million of higher service revenues on Transco from expansion projects and $21 million of increased earnings from our new upstream operations, which was more than offset by a $277 million net unrealized loss in our Sequent business and higher operating and administrative expense. Beyond these business drivers there were also substantially offsetting increases in depreciation expense and decreases in the provision for income taxes.
  • The net unrealized losses on derivatives include $277 million related to derivative contracts within the Sequent segment that are not designated as hedges for accounting purposes. Sequent can experience significant earnings volatility from the fair value accounting required for the derivatives used to hedge a portion of the economic value of the underlying transportation and storage portfolio. However, the unrealized fair value measurement gains and losses are offset by valuation changes in the economic value of the underlying transportation and storage portfolio, which is not accounted for on a fair value basis.
  • Year-to-date 2021 net income improved by $800 million over the prior year, reflecting $190 million of higher commodity margins, $187 million of increased earnings from equity-method investments primarily within Northeast G&P, and $45 million of earnings from upstream operations acquired this year, partially offset by a $295 million change in net unrealized losses on derivatives, $69 million of higher depreciation and amortization expense and $79 million of higher operating and administrative costs. The improvement over last year also reflects the absence of $1.2 billion in pre-tax charges in 2020 related to impairments of equity-method investments, goodwill and goodwill at an equity investee, of which $65 million was attributable to noncontrolling interests. The provision for income taxes changed unfavorably by $289 million primarily due to higher pre-tax income.
  • The severe winter weather impact in February 2021 and the associated effect on commodity prices is estimated to have had a net favorable impact on our pre-tax results of approximately $77 million, primarily within our commodity margins and results from upstream operations.
  • Cash flow from operations for both the third quarter and year-to-date periods of 2021 increased as compared to 2020 primarily due to higher operating results exclusive of non-cash charges, higher distributions from equity-method investments and favorable changes in net working capital, partially offset by higher margin deposits associated with increasing derivative liabilities. Working capital changes compared to the prior year benefited from the absence of $284 million of rate refunds paid in 2020 associated with Transco's completed rate case.

Non-GAAP Measures

  • Third-quarter 2021 Adjusted EBITDA increased by $153 million over the prior year, driven by the previously described benefits from upstream operations, $43 million higher proportional EBITDA from Northeast G&P equity-method investments, and higher commodity margins. These improvements were partially offset by higher operating and administrative costs.
  • Year-to-date Adjusted EBITDA increased by $383 million over the prior year, driven by the previously described benefits from commodity margins and upstream operations, as well as $117 million higher proportional EBITDA from Northeast G&P equity-method investments. These improvements were partially offset by higher operating and administrative costs.
  • Third-quarter 2021 Adjusted Income improved by $77 million over the prior year, while year-to-date Adjusted Income improved by $215 million. Increases for both comparative periods were driven by the previously described impacts to net income, adjusted to remove the effects of unrealized losses on derivatives, the absence of 2020 impairments, and accelerated depreciation on decommissioning assets.
  • Third-quarter and year-to-date 2021 Available Funds From Operations increased by $217 million and $373 million, respectively, compared to the prior periods primarily due to higher operating results exclusive of non-cash charges and higher distributions from equity-method investments.

Business Segment Results & Form 10-Q

Williams' operations are comprised of the following reportable segments: Transmission & Gulf of Mexico, Northeast G&P, West, Sequent and Other. For more information, see the company's third-quarter 2021

Form 10-Q.

 

Third Quarter

 

Year to Date

Amounts in millions

Modified EBITDA

 

Adjusted EBITDA

 

Modified EBITDA

 

Adjusted EBITDA

3Q 2021

3Q 2020

Change

 

3Q 2021

3Q 2020

Change

 

2021

2020

Change

 

2021

2020

Change

Transmission & Gulf of Mexico

$

630

 

$

616

 

$

14

 

 

$

630

 

$

622

$

8

 

 

$

1,936

 

$

1,893

$

43

 

 

$

1,938

 

$

1,908

$

30

 

Northeast G&P

 

442

 

 

387

 

 

55

 

 

 

442

 

 

396

 

46

 

 

 

1,253

 

 

1,126

 

127

 

 

 

1,253

 

 

1,129

 

124

 

West

 

276

 

 

247

 

 

29

 

 

 

293

 

 

245

 

48

 

 

 

822

 

 

715

 

107

 

 

 

839

 

 

713

 

126

 

Sequent

 

(281

)

 

 

 

(281

)

 

 

(2

)

 

 

(2

)

 

 

(281

)

 

 

(281

)

 

 

(2

)

 

 

(2

)

Other

 

38

 

 

(7

)

 

45

 

 

 

57

 

 

4

 

53

 

 

 

91

 

 

8

 

83

 

 

 

124

 

 

19

 

105

 

Totals

$

1,105

 

$

1,243

 

($

138

)

 

$

1,420

 

$

1,267

$

153

 

 

$

3,821

 

$

3,742

$

79

 

 

$

4,152

 

$

3,769

$

383

 

 

Note: Williams uses Modified EBITDA for its segment reporting. Definitions of Modified EBITDA and Adjusted EBITDA and schedules reconciling to net income are included in this news release.

Transmission & Gulf of Mexico

  • Third-quarter and year-to-date Modified and Adjusted EBITDA improved compared to the prior year, as higher service revenues related to recent expansion projects, commodity margins, and proportional EBITDA from equity-method investments were partially offset by reduced revenues associated with lower Gulf of Mexico volumes and higher operating and administrative costs.

Northeast G&P

  • Third-quarter and year-to-date 2021 Modified and Adjusted EBITDA increased over the prior year driven by higher proportional EBITDA from equity-method investments associated with higher gathering volumes and the benefit of an increased ownership in Blue Racer Midstream, acquired in November 2020.
  • Gross gathering volumes for third-quarter 2021, including 100% of operated equity-method investments, increased by 5% over the same period in 2020.

West

  • Third-quarter 2021 Modified and Adjusted EBITDA improved compared to the prior year primarily due to higher commodity margins.
  • Year-to-date 2021 Modified and Adjusted EBITDA increased over the prior year primarily due to an estimated $55 million net favorable impact from the February 2021 severe winter weather, $98 million of higher commodity margins, and lower operating and administrative costs. These favorable changes were partially offset by lower service revenues, primarily lower Barnett deferred revenue amortization and the absence of a deficiency fee, as well as lower proportional EBITDA from equity method investments driven by reduced transportation volumes on Overland Pass Pipeline.

Sequent

  • Third-quarter and year-to-date 2021 Modified and Adjusted EBITDA reflect the results of this business acquired in July 2021. The Modified EBITDA loss was driven by $277 million of net unrealized losses on derivatives, which are excluded from Adjusted EBITDA. The related derivative contracts are not designated as hedges for accounting purposes. Sequent can experience significant earnings volatility from the fair value accounting required for the derivatives used to hedge a portion of the economic value of the underlying transportation and storage portfolio. However, the unrealized fair value measurement gains and losses are offset by valuation changes in the economic value of the underlying transportation and storage portfolio, which is not accounted for on a fair value basis.

Other

  • Third-quarter and year-to-date 2021 Modified and Adjusted EBITDA improved compared to the prior year primarily due to oil and gas producing properties acquired this year. The year-to-date increase reflects an estimated $22 million attributable to the February 2021 severe winter weather.

2021 Financial Guidance

The company now expects 2021 Adjusted EBITDA between $5.5 billion and $5.55 billion, a $325 million midpoint increase from guidance originally issued in February 2021. Also, we are increasing Available Funds from Operations guidance to a range of $4.025 billion to $4.075 billion. The leverage ratio midpoint has been updated to ~4.0x versus ~4.25x prior for year-end 2021 and growth capex is reaffirmed at between $1 billion to $1.2 billion. Importantly, Williams expects to generate excess cash flow (available funds from operations less capital expenditures and dividends), allowing it to retain financial flexibility.

Williams' Third-Quarter 2021 Materials to be Posted Shortly; Q&A Webcast Scheduled for Tomorrow

Williams' third-quarter 2021 earnings presentation will be posted at www.williams.com. The company’s third-quarter 2021 earnings conference call and webcast with analysts and investors is scheduled for Tuesday, Nov. 2, at 9:30 a.m. Eastern Time (8:30 a.m. Central Time). Participants who wish to join the call by phone must register using the following link: https://event.on24.com/wcc/r/3404526/DA261E0446A7A8C1CD98B936760CDEC3

A webcast link to the conference call is available at www.williams.com. A replay of the webcast will be available on the website for at least 90 days following the event.

About Williams

Williams (NYSE: WMB) is committed to being the leader in providing infrastructure that safely delivers natural gas products to reliably fuel the clean energy economy. Headquartered in Tulsa, Oklahoma, Williams is an industry-leading, investment grade C-Corp with operations across the natural gas value chain including gathering, processing, interstate transportation and storage of natural gas and natural gas liquids. With major positions in top U.S. supply basins, Williams connects the best supplies with the growing demand for clean energy. Williams owns and operates more than 30,000 miles of pipelines system wide – including Transco, the nation’s largest volume and fastest growing pipeline – and handles approximately 30 percent of the natural gas in the United States that is used every day for clean-power generation, heating and industrial use. www.williams.com

The Williams Companies, Inc.

Consolidated Statement of Income

(Unaudited)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

 

(Millions, except per-share amounts)

Revenues:

 

 

 

 

 

 

 

Service revenues

$

1,506

 

 

$

1,479

 

 

$

4,418

 

 

$

4,399

 

Service revenues – commodity consideration

64

 

 

40

 

 

164

 

 

93

 

Product sales

1,296

 

 

418

 

 

3,229

 

 

1,139

 

Net gain (loss) on commodity derivatives

(391

)

 

(4

)

 

(441

)

 

(4

)

Total revenues

2,475

 

 

1,933

 

 

7,370

 

 

5,627

 

Costs and expenses:

 

 

 

 

 

 

 

Product costs

1,043

 

 

380

 

 

2,672

 

 

1,047

 

Processing commodity expenses

28

 

 

21

 

 

67

 

 

49

 

Operating and maintenance expenses

409

 

 

336

 

 

1,148

 

 

993

 

Depreciation and amortization expenses

487

 

 

426

 

 

1,388

 

 

1,285

 

Selling, general, and administrative expenses

152

 

 

114

 

 

389

 

 

354

 

Impairment of goodwill

 

 

 

 

 

 

187

 

Other (income) expense – net

1

 

 

15

 

 

12

 

 

28

 

Total costs and expenses

2,120

 

 

1,292

 

 

5,676

 

 

3,943

 

Operating income (loss)

355

 

 

641

 

 

1,694

 

 

1,684

 

Equity earnings (losses)

157

 

 

106

 

 

423

 

 

236

 

Impairment of equity-method investments

 

 

 

 

 

 

(938

)

Other investing income (loss) – net

2

 

 

2

 

 

6

 

 

6

 

Interest incurred

(295

)

 

(298

)

 

(892

)

 

(898

)

Interest capitalized

3

 

 

6

 

 

8

 

 

16

 

Other income (expense) – net

4

 

 

(23

)

 

4

 

 

(14

)

Income (loss) before income taxes

226

 

 

434

 

 

1,243

 

 

92

 

Less: Provision (benefit) for income taxes

53

 

 

111

 

 

313

 

 

24

 

Net income (loss)

173

 

 

323

 

 

930

 

 

68

 

Less: Net income (loss) attributable to noncontrolling interests

8

 

 

14

 

 

35

 

 

(27

)

Net income (loss) attributable to The Williams Companies, Inc.

165

 

 

309

 

 

895

 

 

95

 

Less: Preferred stock dividends

1

 

 

1

 

 

2

 

 

2

 

Net income (loss) available to common stockholders

$

164

 

 

$

308

 

 

$

893

 

 

$

93

 

Basic earnings (loss) per common share:

 

 

 

 

 

 

 

Net income (loss)

$

.14

 

 

$

.25

 

 

$

.74

 

 

$

.08

 

Weighted-average shares (thousands)

1,215,434

 

 

1,213,912

 

 

1,215,113

 

 

1,213,512

 

Diluted earnings (loss) per common share:

 

 

 

 

 

 

 

Net income (loss)

$

.13

 

 

$

.25

 

 

$

.73

 

 

$

.08

 

Weighted-average shares (thousands)

1,217,979

 

 

1,215,335

 

 

1,217,558

 

 

1,214,757

 

The Williams Companies, Inc.

Consolidated Balance Sheet

(Unaudited)

 

 

 

September 30,

2021

 

December 31,

2020

 

 

(Millions, except per-share amounts)

ASSETS

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

214

 

 

$

142

 

Trade accounts and other receivables

 

1,987

 

 

1,000

 

Allowance for doubtful accounts

 

(1

)

 

(1

)

Trade accounts and other receivables – net

 

1,986

 

 

999

 

Inventories

 

368

 

 

136

 

Other current assets and deferred charges

 

317

 

 

152

 

Total current assets

 

2,885

 

 

1,429

 

Investments

 

5,085

 

 

5,159

 

Property, plant, and equipment

 

43,900

 

 

42,489

 

Accumulated depreciation and amortization

 

(14,586

)

 

(13,560

)

Property, plant, and equipment – net

 

29,314

 

 

28,929

 

Intangible assets – net of accumulated amortization

 

7,481

 

 

7,444

 

Regulatory assets, deferred charges, and other

 

1,220

 

 

1,204

 

Total assets

 

$

45,985

 

 

$

44,165

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

1,674

 

 

$

482

 

Accrued liabilities

 

1,242

 

 

944

 

Long-term debt due within one year

 

2,024

 

 

893

 

Total current liabilities

 

4,940

 

 

2,319

 

Long-term debt

 

20,338

 

 

21,451

 

Deferred income tax liabilities

 

2,233

 

 

1,923

 

Regulatory liabilities, deferred income, and other

 

4,555

 

 

3,889

 

Contingent liabilities and commitments

 

 

 

 

Equity:

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred stock

 

35

 

 

35

 

Common stock ($1 par value; 1,470 million shares authorized at September 30, 2021 and December 31, 2020; 1,249 million shares issued at September 30, 2021 and 1,248 million shares issued at December 31, 2020)

 

1,249

 

 

1,248

 

Capital in excess of par value

 

24,425

 

 

24,371

 

Retained deficit

 

(13,361

)

 

(12,748

)

Accumulated other comprehensive income (loss)

 

(109

)

 

(96

)

Treasury stock, at cost (35 million shares of common stock)

 

(1,041

)

 

(1,041

)

Total stockholders’ equity

 

11,198

 

 

11,769

 

Noncontrolling interests in consolidated subsidiaries

 

2,721

 

 

2,814

 

Total equity

 

13,919

 

 

14,583

 

Total liabilities and equity

 

$

45,985

 

 

$

44,165

The Williams Companies, Inc.

Consolidated Statement of Cash Flows

(Unaudited)

 

 

Nine Months Ended

September 30,

 

2021

 

2020

 

(Millions)

OPERATING ACTIVITIES:

 

Net income (loss)

$

930

 

 

$

68

 

Adjustments to reconcile to net cash provided (used) by operating activities:

 

 

 

Depreciation and amortization

1,388

 

 

1,285

 

Provision (benefit) for deferred income taxes

313

 

 

52

 

Equity (earnings) losses

(423

)

 

(236

)

Distributions from unconsolidated affiliates

574

 

 

466

 

Impairment of goodwill

 

 

187

 

Impairment of equity-method investments

 

 

938

 

Net unrealized gain (loss) from derivative instruments

317

 

 

 

Amortization of stock-based awards

60

 

 

39

 

Cash provided (used) by changes in current assets and liabilities:

 

 

 

Accounts receivable

(538

)

 

(18

)

Inventories

(112

)

 

(33

)

Other current assets and deferred charges

(67

)

 

(15

)

Accounts payable

570

 

 

(77

)

Accrued liabilities

67

 

 

(286

)

Changes in current and noncurrent derivative assets and liabilities

(267

)

 

(2

)

Other, including changes in noncurrent assets and liabilities

(6

)

 

14

 

Net cash provided (used) by operating activities

2,806

 

 

2,382

 

FINANCING ACTIVITIES:

 

 

 

Proceeds from (payments of) commercial paper – net

 

 

40

 

Proceeds from long-term debt

898

 

 

3,898

 

Payments of long-term debt

(887

)

 

(3,836

)

Proceeds from issuance of common stock

6

 

 

9

 

Common dividends paid

(1,494

)

 

(1,456

)

Dividends and distributions paid to noncontrolling interests

(135

)

 

(147

)

Contributions from noncontrolling interests

6

 

 

5

 

Payments for debt issuance costs

(7

)

 

(20

)

Other – net

(13

)

 

(12

)

Net cash provided (used) by financing activities

(1,626

)

 

(1,519

)

INVESTING ACTIVITIES:

 

 

 

Property, plant, and equipment:

 

 

 

Capital expenditures (1)

(957

)

 

(938

)

Dispositions – net

5

 

 

(30

)

Contributions in aid of construction

46

 

 

27

 

Purchases of businesses, net of cash acquired

(126

)

 

 

Proceeds from dispositions of equity-method investments

1

 

 

 

Purchases of and contributions to equity-method investments

(79

)

 

(150

)

Other – net

2

 

 

9

 

Net cash provided (used) by investing activities

(1,108

)

 

(1,082

)

Increase (decrease) in cash and cash equivalents

72

 

 

(219

)

Cash and cash equivalents at beginning of year

142

 

 

289

 

Cash and cash equivalents at end of period

$

214

 

 

$

70

 

_____________

 

 

 

(1) Increases to property, plant, and equipment

$

(1,001

)

 

$

(912

)

Changes in related accounts payable and accrued liabilities

44

 

 

(26

)

Capital expenditures

$

(957

)

 

$

(938

)

Transmission & Gulf of Mexico

 

(UNAUDITED)

 

 

2020

 

2021

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

3rd Qtr

Year

 

Regulated interstate natural gas transportation, storage, and other revenues (1)

$

692

 

$

676

 

$

686

 

$

702

 

$

2,756

 

 

$

708

 

$

693

 

$

706

 

$

2,107

 

 

Gathering, processing, and transportation revenues

99

 

78

 

85

 

86

 

348

 

 

86

 

90

 

74

 

250

 

 

Other fee revenues (1)

4

 

5

 

3

 

6

 

18

 

 

4

 

4

 

5

 

13

 

 

Commodity margins

3

 

1

 

4

 

4

 

12

 

 

8

 

7

 

8

 

23

 

 

Operating and administrative costs (1)

(184

)

(189

)

(192

)

(192

)

(757

)

 

(198

)

(197

)

(215

)

(610

)

 

Other segment income (expenses) - net (1)

4

 

2

 

(8

)

8

 

6

 

 

5

 

5

 

7

 

17

 

 

Impairment of certain assets

 

 

 

(170

)

(170

)

 

 

(2

)

 

(2

)

 

Proportional Modified EBITDA of equity-method investments

44

 

42

 

38

 

42

 

166

 

 

47

 

46

 

45

 

138

 

 

Modified EBITDA

662

 

615

 

616

 

486

 

2,379

 

 

660

 

646

 

630

 

1,936

 

 

Adjustments

7

 

2

 

6

 

158

 

173

 

 

 

2

 

 

2

 

 

Adjusted EBITDA

$

669

 

$

617

 

$

622

 

$

644

 

$

2,552

 

 

$

660

 

$

648

 

$

630

 

$

1,938

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statistics for Operated Assets

 

 

 

 

 

 

 

 

 

 

 

Natural Gas Transmission

 

 

 

 

 

 

 

 

 

 

 

Transcontinental Gas Pipe Line

 

 

 

 

 

 

 

 

 

 

 

Avg. daily transportation volumes (Tbtu)

13.8

 

12.0

 

12.8

 

13.2

 

12.9

 

 

14.1

 

13.1

 

13.8

 

13.7

 

 

Avg. daily firm reserved capacity (Tbtu)

17.7

 

17.5

 

18.0

 

18.2

 

17.9

 

 

18.6

 

18.3

 

18.7

 

18.5

 

 

Northwest Pipeline LLC

 

 

 

 

 

 

 

 

 

 

 

Avg. daily transportation volumes (Tbtu)

2.6

 

1.9

 

1.8

 

2.5

 

2.2

 

 

2.8

 

2.2

 

2.0

 

2.3

 

 

Avg. daily firm reserved capacity (Tbtu)

3.9

 

3.9

 

3.9

 

3.8

 

3.8

 

 

3.8

 

3.8

 

3.8

 

3.8

 

 

Gulfstream - Non-consolidated

 

 

 

 

 

 

 

 

 

 

 

Avg. daily transportation volumes (Tbtu)

1.2

 

1.2

 

1.3

 

1.1

 

1.2

 

 

1.0

 

1.2

 

1.3

 

1.2

 

 

Avg. daily firm reserved capacity (Tbtu)

1.3

 

1.3

 

1.3

 

1.3

 

1.3

 

 

1.3

 

1.3

 

1.3

 

1.3

 

 

Gathering, Processing, and Crude Oil Transportation

 

 

 

 

 

 

 

 

 

 

 

Consolidated (2)

 

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

0.30

 

0.23

 

0.23

 

0.26

 

0.25

 

 

0.28

 

0.31

 

0.25

 

0.28

 

 

Plant inlet natural gas volumes (Bcf/d)

0.58

 

0.50

 

0.40

 

0.46

 

0.48

 

 

0.46

 

0.41

 

0.44

 

0.44

 

 

NGL production (Mbbls/d)

32

 

25

 

27

 

30

 

29

 

 

29

 

26

 

28

 

28

 

 

NGL equity sales (Mbbls/d)

5

 

4

 

5

 

5

 

5

 

 

7

 

5

 

6

 

6

 

 

Crude oil transportation volumes (Mbbls/d)

138

 

92

 

121

 

132

 

121

 

 

130

 

151

 

120

 

134

 

 

Non-consolidated (3)

 

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

0.35

 

0.31

 

0.26

 

0.30

 

0.30

 

 

0.36

 

0.40

 

0.29

 

0.35

 

 

Plant inlet natural gas volumes (Bcf/d)

0.35

 

0.31

 

0.25

 

0.30

 

0.30

 

 

0.37

 

0.40

 

0.29

 

0.35

 

 

NGL production (Mbbls/d)

24

 

23

 

17

 

21

 

21

 

 

28

 

31

 

21

 

27

 

 

NGL equity sales (Mbbls/d)

5

 

8

 

4

 

6

 

6

 

 

9

 

7

 

6

 

8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes certain amounts associated with revenues and operating costs for tracked or reimbursable charges.

 

(2) Excludes volumes associated with equity-method investments that are not consolidated in our results.

 

(3) Includes 100% of the volumes associated with operated equity-method investments.

 

Northeast G&P

 

(UNAUDITED)

 

 

2020

 

2021

 

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

3rd Qtr

Year

 

Gathering, processing, transportation, and fractionation revenues

$

312

 

$

308

 

$

332

 

$

327

 

$

1,279

 

 

$

311

 

$

315

 

$

340

 

$

966

 

 

Other fee revenues (1)

25

 

25

 

22

 

24

 

96

 

 

25

 

25

 

26

 

76

 

 

Commodity margins

1

 

1

 

1

 

1

 

4

 

 

3

 

 

(2

)

1

 

 

Operating and administrative costs (1)

(87

)

(86

)

(85

)

(84

)

(342

)

 

(89

)

(86

)

(94

)

(269

)

 

Other segment income (expenses) - net

(2

)

(4

)

(4

)

1

 

(9

)

 

(1

)

(7

)

(3

)

(11

)

 

Impairment of certain assets

 

 

 

(12

)

(12

)

 

 

 

 

 

 

Proportional Modified EBITDA of equity-method investments

120

 

126

 

121

 

106

 

473

 

 

153

 

162

 

175

 

490

 

 

Modified EBITDA

369

 

370

 

387

 

363

 

1,489

 

 

402

 

409

 

442

 

1,253

 

 

Adjustments

1

 

(7

)

9

 

43

 

46

 

 

 

 

 

 

 

Adjusted EBITDA

$

370

 

$

363

 

$

396

 

$

406

 

$

1,535

 

 

$

402

 

$

409

 

$

442

 

$

1,253

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statistics for Operated Assets

 

 

 

 

 

 

 

 

 

 

 

Gathering and Processing

 

 

 

 

 

 

 

 

 

 

 

Consolidated (2)

 

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

4.27

 

4.14

 

4.47

 

4.36

 

4.31

 

 

4.19

 

4.10

 

4.26

 

4.19

 

 

Plant inlet natural gas volumes (Bcf/d)

1.23

 

1.22

 

1.36

 

1.45

 

1.32

 

 

1.41

 

1.62

 

1.64

 

1.56

 

 

NGL production (Mbbls/d)

93

 

93

 

114

 

111

 

103

 

 

102

 

115

 

121

 

113

 

 

NGL equity sales (Mbbls/d)

2

 

2

 

2

 

2

 

2

 

 

1

 

1

 

 

1

 

 

Non-consolidated (3)

 

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

4.40

 

4.68

 

4.94

 

5.11

 

4.78

 

 

5.40

 

5.47

 

5.62

 

5.50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges.

 

(2) Includes volumes associated with Susquehanna Supply Hub, the Northeast JV, and Utica Supply Hub, all of which are consolidated.

 

(3) Includes 100% of the volumes associated with operated equity-method investments, including the Laurel Mountain Midstream partnership; and the Bradford Supply Hub and a portion of the Marcellus South Supply Hub within the Appalachia Midstream Services partnership.

 

West

 

(UNAUDITED)

 

 

2020

 

2021

 

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

3rd Qtr

Year

 

Gathering, processing, transportation, storage, and fractionation revenues

$

299

 

$

297

 

$

288

 

$

320

 

$

1,204

 

 

$

262

 

$

278

 

$

294

 

$

834

 

 

Other fee revenues (1)

6

 

13

 

16

 

15

 

50

 

 

6

 

5

 

5

 

16

 

 

Commodity margins

3

 

29

 

30

 

23

 

85

 

 

128

 

44

 

63

 

235

 

 

Net unrealized gain (loss) from derivative instruments

(1

)

1

 

(2

)

2

 

 

 

 

(3

)

(17

)

(20

)

 

Operating and administrative costs (1)

(115

)

(111

)

(108

)

(105

)

(439

)

 

(106

)

(114

)

(105

)

(325

)

 

Other segment income (expenses) - net

(5

)

 

(7

)

 

(12

)

 

 

(1

)

9

 

8

 

 

Proportional Modified EBITDA of equity-method investments

28

 

24

 

30

 

28

 

110

 

 

25

 

22

 

27

 

74

 

 

Modified EBITDA

215

 

253

 

247

 

283

 

998

 

 

315

 

231

 

276

 

822

 

 

Adjustments

1

 

(1

)

(2

)

(6

)

(8

)

 

 

 

17

 

17

 

 

Adjusted EBITDA

$

216

 

$

252

 

$

245

 

$

277

 

$

990

 

 

$

315

 

$

231

 

$

293

 

$

839

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statistics for Operated Assets

 

 

 

 

 

 

 

 

 

 

 

Gathering and Processing

 

 

 

 

 

 

 

 

 

 

 

Consolidated (2)

 

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

3.43

 

3.40

 

3.28

 

3.19

 

3.33

 

 

3.11

 

3.21

 

3.31

 

3.21

 

 

Plant inlet natural gas volumes (Bcf/d)

1.26

 

1.33

 

1.31

 

1.13

 

1.25

 

 

1.20

 

1.20

 

1.29

 

1.23

 

 

NGL production (Mbbls/d)

35

 

51

 

71

 

39

 

49

 

 

36

 

39

 

49

 

41

 

 

NGL equity sales (Mbbls/d)

12

 

25

 

34

 

18

 

22

 

 

13

 

16

 

19

 

16

 

 

Non-consolidated (3)

 

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

0.20

 

0.24

 

0.28

 

0.30

 

0.25

 

 

0.27

 

0.30

 

0.28

 

0.29

 

 

Plant inlet natural gas volumes (Bcf/d)

0.20

 

0.23

 

0.28

 

0.29

 

0.25

 

 

0.27

 

0.30

 

0.28

 

0.28

 

 

NGL production (Mbbls/d)

17

 

23

 

26

 

26

 

23

 

 

24

 

32

 

32

 

29

 

 

NGL and Crude Oil Transportation volumes (Mbbls/d) (4)

227

 

142

 

156

 

147

 

168

 

 

85

 

101

 

119

 

102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges.

 

(2) Excludes volumes associated with equity-method investments that are not consolidated in our results.

 

(3) Includes 100% of the volumes associated with operated equity-method investments, including Rocky Mountain Midstream.

 

(4) Includes 100% of the volumes associated with operated equity-method investments, including the Overland Pass Pipeline Company and Rocky Mountain Midstream.

 

Sequent

 

(UNAUDITED)

 

 

2020

 

2021

 

 

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

3rd Qtr

Year

 

Commodity margins

$

 

$

 

$

 

$

 

$

 

 

$

 

$

 

$

9

 

$

9

 

 

Net unrealized gain (loss) from derivative instruments

 

 

 

 

 

 

 

 

(277

)

(277

)

 

Operating and administrative costs

 

 

 

 

 

 

 

 

(12

)

(12

)

 

Other segment income (expenses) - net

 

 

 

 

 

 

 

 

(1

)

(1

)

 

Modified EBITDA

 

 

 

 

 

 

 

 

(281

)

(281

)

 

Adjustments

 

 

 

 

 

 

 

 

279

 

279

 

 

Adjusted EBITDA

$

 

$

 

$

 

$

 

$

 

 

$

 

$

 

$

(2

)

$

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Statistics

 

 

 

 

 

 

 

 

 

 

 

Product Sales

 

 

 

 

 

 

 

 

 

 

 

Sales volumes (Bcf/day)

 

 

 

 

 

 

 

 

6.62

 

6.62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures and Investments

 

(UNAUDITED)

 

 

2020

 

2021

 

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

3rd Qtr

Year

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

185

 

$

181

 

$

192

 

$

190

 

$

748

 

 

$

109

 

$

209

 

$

172

 

$

490

 

 

Northeast G&P

46

 

41

 

32

 

38

 

157

 

 

40

 

46

 

41

 

127

 

 

West

72

 

80

 

93

 

65

 

310

 

 

33

 

76

 

49

 

158

 

 

Other

3

 

5

 

8

 

8

 

24

 

 

78

 

94

 

10

 

182

 

 

Total (1)

$

306

 

$

307

 

$

325

 

$

301

 

$

1,239

 

 

$

260

 

$

425

 

$

272

 

$

957

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of and contributions to equity-method investments:

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

1

 

$

1

 

$

34

 

$

1

 

$

37

 

 

$

3

 

$

6

 

$

5

 

$

14

 

 

Northeast G&P

27

 

30

 

47

 

174

 

278

 

 

11

 

24

 

30

 

65

 

 

West

2

 

5

 

3

 

 

10

 

 

 

 

 

 

 

Total

$

30

 

$

36

 

$

84

 

$

175

 

$

325

 

 

$

14

 

$

30

 

$

35

 

$

79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary:

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

186

 

$

182

 

$

226

 

$

191

 

$

785

 

 

$

112

 

$

215

 

$

177

 

$

504

 

 

Northeast G&P

73

 

71

 

79

 

212

 

435

 

 

51

 

70

 

71

 

192

 

 

West

74

 

85

 

96

 

65

 

320

 

 

33

 

76

 

49

 

158

 

 

Other

3

 

5

 

8

 

8

 

24

 

 

78

 

94

 

10

 

182

 

 

Total

$

336

 

$

343

 

$

409

 

$

476

 

$

1,564

 

 

$

274

 

$

455

 

$

307

 

$

1,036

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital investments:

 

 

 

 

 

 

 

 

 

 

 

Increases to property, plant, and equipment

$

254

 

$

327

 

$

331

 

$

248

 

$

1,160

 

 

$

263

 

$

430

 

$

308

 

$

1,001

 

 

Purchases of businesses, net of cash acquired

 

 

 

 

 

 

 

 

126

 

126

 

 

Purchases of and contributions to equity-method investments

30

 

36

 

84

 

175

 

325

 

 

14

 

30

 

35

 

79

 

 

Total

$

284

 

$

363

 

$

415

 

$

423

 

$

1,485

 

 

$

277

 

$

460

 

$

469

 

$

1,206

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Increases to property, plant, and equipment

$

254

 

$

327

 

$

331

 

$

248

 

$

1,160

 

 

$

263

 

$

430

 

$

308

 

$

1,001

 

 

Changes in related accounts payable and accrued liabilities

52

 

(20

)

(6

)

53

 

79

 

 

(3

)

(5

)

(36

)

(44

)

 

Capital expenditures

$

306

 

$

307

 

$

325

 

$

301

 

$

1,239

 

 

$

260

 

$

425

 

$

272

 

$

957

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contributions from noncontrolling interests

$

2

 

$

2

 

$

1

 

$

2

 

$

7

 

 

$

2

 

$

4

 

$

 

$

6

 

 

Contributions in aid of construction

$

14

 

$

5

 

$

8

 

$

10

 

$

37

 

 

$

19

 

$

17

 

$

10

 

$

46

 

 

Proceeds from disposition of equity-method investments

$

 

$

 

$

 

$

 

$

 

 

$

 

$

1

 

$

 

$

1

 

 

 

 

Non-GAAP Measures

This news release and accompanying materials may include certain financial measures – adjusted EBITDA, adjusted income (“earnings”), adjusted earnings per share, available funds from operations and dividend coverage ratio – that are non-GAAP financial measures as defined under the rules of the SEC.

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, impairments of equity investments and goodwill, 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-method investments.

Adjusted EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations. Such items are excluded from net income to determine adjusted income. Management believes this measure provides investors meaningful insight into results from ongoing operations.

Available funds from operations is defined as cash flow from operations excluding the effect of changes in working capital and certain other changes in noncurrent assets and liabilities, reduced by preferred dividends and net distributions to noncontrolling interests.

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 assets and the cash that the business is generating.

Neither adjusted EBITDA, adjusted income, nor available funds from 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.

Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income

 

(UNAUDITED)

 

 

2020

 

2021

(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) attributable to The Williams Companies, Inc. available to common stockholders

$

(518

)

$

303

 

$

308

 

$

115

 

$

208

 

 

$

425

 

$

304

 

$

164

 

$

893

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) - diluted earnings (loss) per common share (1)

$

(.43

)

$

.25

 

$

.25

 

$

.09

 

$

.17

 

 

$

.35

 

$

.25

 

$

.13

 

$

.73

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

 

 

 

 

 

 

 

 

 

 

 

Northeast Supply Enhancement project development costs

$

 

$

3

 

$

3

 

$

 

$

6

 

 

$

 

$

 

$

 

$

 

 

Impairment of certain assets

 

 

 

170

 

170

 

 

 

2

 

 

2

 

 

Pension plan settlement charge

4

 

1

 

 

 

5

 

 

 

 

 

 

 

Adjustment of Transco’s regulatory asset for post-WPZ Merger state deferred income tax change consistent with filed rate case

2

 

 

 

 

2

 

 

 

 

 

 

 

Benefit of change in employee benefit policy

 

(3

)

(6

)

(13

)

(22

)

 

 

 

 

 

 

Reversal of costs capitalized in prior periods

 

 

10

 

1

 

11

 

 

 

 

 

 

 

Severance and related costs

1

 

1

 

(1

)

 

1

 

 

 

 

 

 

 

Total Transmission & Gulf of Mexico adjustments

7

 

2

 

6

 

158

 

173

 

 

 

2

 

 

2

 

 

Northeast G&P

 

 

 

 

 

 

 

 

 

 

 

Share of early debt retirement gain at equity-method investment

 

(5

)

 

 

(5

)

 

 

 

 

 

 

Share of impairment of certain assets at equity-method investments

 

 

11

 

36

 

47

 

 

 

 

 

 

 

Pension plan settlement charge

1

 

 

 

 

1

 

 

 

 

 

 

 

Impairment of certain assets

 

 

 

12

 

12

 

 

 

 

 

 

 

Benefit of change in employee benefit policy

 

(2

)

(2

)

(5

)

(9

)

 

 

 

 

 

 

Total Northeast G&P adjustments

1

 

(7

)

9

 

43

 

46

 

 

 

 

 

 

 

West

 

 

 

 

 

 

 

 

 

 

 

Pension plan settlement charge

1

 

 

 

 

1

 

 

 

 

 

 

 

Benefit of change in employee benefit policy

 

(1

)

(2

)

(6

)

(9

)

 

 

 

 

 

 

Net unrealized gain (loss) from derivative instruments

 

 

 

 

 

 

 

 

17

 

17

 

 

Total West adjustments

1

 

(1

)

(2

)

(6

)

(8

)

 

 

 

17

 

17

 

 

Sequent

 

 

 

 

 

 

 

 

 

 

 

Amortization of purchase accounting inventory fair value adjustment

 

 

 

 

 

 

 

 

2

 

2

 

 

Net unrealized gain (loss) from derivative instruments

 

 

 

 

 

 

 

 

277

 

277

 

 

Total Sequent adjustments

 

 

 

 

 

 

 

 

279

 

279

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Regulatory asset reversals from impaired projects

 

 

8

 

7

 

15

 

 

 

 

 

 

 

Expenses associated with Sequent acquisition and transition

 

 

 

 

 

 

 

 

3

 

3

 

 

Net unrealized gain (loss) from derivative instruments

 

 

 

 

 

 

 

4

 

16

 

20

 

 

Reversal of costs capitalized in prior periods

 

 

3

 

 

3

 

 

 

 

 

 

 

Pension plan settlement charge

 

 

 

1

 

1

 

 

 

 

 

 

 

Accrual for loss contingencies

 

 

 

24

 

24

 

 

5

 

5

 

 

10

 

 

Total Other adjustments

 

 

11

 

32

 

43

 

 

5

 

9

 

19

 

33

 

 

Adjustments included in Modified EBITDA

9

 

(6

)

24

 

227

 

254

 

 

5

 

11

 

315

 

331

 

 

Adjustments below Modified EBITDA

 

 

 

 

 

 

 

 

 

 

 

Accelerated depreciation for decommissioning assets

 

 

 

 

 

 

 

20

 

13

 

33

 

 

Impairment of equity-method investments

938

 

 

 

108

 

1,046

 

 

 

 

 

 

 

Impairment of goodwill (2)

187

 

 

 

 

187

 

 

 

 

 

 

 

Share of impairment of goodwill at equity-method investment

78

 

 

 

 

78

 

 

 

 

 

 

 

Allocation of adjustments to noncontrolling interests

(65

)

 

 

 

(65

)

 

 

 

 

 

 

 

1,138

 

 

 

108

 

1,246

 

 

 

20

 

13

 

33

 

 

Total adjustments

1,147

 

(6

)

24

 

335

 

1,500

 

 

5

 

31

 

328

 

364

 

 

Less tax effect for above items

(316

)

8

 

1

 

(68

)

(375

)

 

(1

)

(8

)

(82

)

(91

)

 

Adjusted income available to common stockholders

$

313

 

$

305

 

$

333

 

$

382

 

$

1,333

 

 

$

429

 

$

327

 

$

410

 

$

1,166

 

 

Adjusted income - diluted earnings per common share (1)

$

.26

 

$

.25

 

$

.27

 

$

.31

 

$

1.10

 

 

$

.35

 

$

.27

 

$

.34

 

$

.96

 

 

Weighted-average shares - diluted (thousands)

1,214,348

 

1,214,581

 

1,215,335

 

1,216,381

 

1,215,165

 

 

1,217,211

 

1,217,476

 

1,217,979

 

1,217,558

 

 

(1) 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.

 

(2) Our partner's $65 million share of the first-quarter 2020 impairment of goodwill is reflected below in Allocation of adjustments to noncontrolling interests.

 

Reconciliation of Cash Flow from Operating Activities to Available Funds from Operations (AFFO)

 

(UNAUDITED)

 

 

2020

 

2021

 

(Dollars in millions, except coverage ratios)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

3rd Qtr

Year

 

 

 

 

 

 

 

 

 

 

 

 

 

The Williams Companies, Inc.

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP "Net cash provided (used) by operating activities" to Non-GAAP "Available funds from operations"

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided (used) by operating activities

$

787

 

$

1,143

 

$

452

 

$

1,114

 

$

3,496

 

 

$

915

 

$

1,057

 

$

834

 

$

2,806

 

 

Exclude: Cash (provided) used by changes in:

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

(67

)

(18

)

103

 

(16

)

2

 

 

59

 

(9

)

488

 

538

 

 

Inventories

(19

)

28

 

24

 

(22

)

11

 

 

8

 

50

 

54

 

112

 

 

Other current assets and deferred charges

(20

)

33

 

2

 

(26

)

(11

)

 

6

 

50

 

11

 

67

 

 

Accounts payable

155

 

(391

)

313

 

(70

)

7

 

 

(38

)

(56

)

(476

)

(570

)

 

Accrued liabilities

150

 

86

 

50

 

23

 

309

 

 

116

 

(130

)

(53

)

(67

)

 

Changes in current and noncurrent derivative assets and liabilities

 

4

 

(2

)

2

 

4

 

 

6

 

25

 

236

 

267

 

 

Other, including changes in noncurrent assets and liabilities

(23

)

39

 

(30

)

15

 

1

 

 

10

 

(31

)

27

 

6

 

 

Preferred dividends paid

(1

)

 

(1

)

(1

)

(3

)

 

(1

)

 

(1

)

(2

)

 

Dividends and distributions paid to noncontrolling interests

(44

)

(54

)

(49

)

(38

)

(185

)

 

(54

)

(41

)

(40

)

(135

)

 

Contributions from noncontrolling interests

2

 

2

 

1

 

2

 

7

 

 

2

 

4

 

 

6

 

 

Available funds from operations

$

920

 

$

872

 

$

863

 

$

983

 

$

3,638

 

 

$

1,029

 

$

919

 

$

1,080

 

$

3,028

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common dividends paid

$

485

 

$

486

 

$

485

 

$

485

 

$

1,941

 

 

$

498

 

$

498

 

$

498

 

$

1,494

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coverage ratio:

 

 

 

 

 

 

 

 

 

 

 

Available funds from operations divided by Common dividends paid

1.90

 

1.79

 

1.78

 

2.03

 

1.87

 

 

2.07

 

1.85

 

2.17

 

2.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of "Net Income (Loss)" to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA”

 

(UNAUDITED)

 

 

2020

 

2021

 

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

3rd Qtr

Year

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(570

)

$

315

 

$

323

 

$

130

 

$

198

 

 

$

435

 

$

322

 

$

173

 

$

930

 

 

Provision (benefit) for income taxes

(204

)

117

 

111

 

55

 

79

 

 

141

 

119

 

53

 

313

 

 

Interest expense

296

 

294

 

292

 

290

 

1,172

 

 

294

 

298

 

292

 

884

 

 

Equity (earnings) losses

(22

)

(108

)

(106

)

(92

)

(328

)

 

(131

)

(135

)

(157

)

(423

)

 

Impairment of goodwill

187

 

 

 

 

187

 

 

 

 

 

 

 

Impairment of equity-method investments

938

 

 

 

108

 

1,046

 

 

 

 

 

 

 

Other investing (income) loss - net

(3

)

(1

)

(2

)

(2

)

(8

)

 

(2

)

(2

)

(2

)

(6

)

 

Proportional Modified EBITDA of equity-method investments

192

 

192

 

189

 

176

 

749

 

 

225

 

230

 

247

 

702

 

 

Depreciation and amortization expenses

429

 

430

 

426

 

436

 

1,721

 

 

438

 

463

 

487

 

1,388

 

 

Accretion expense associated with asset retirement obligations for nonregulated operations

10

 

7

 

10

 

8

 

35

 

 

10

 

11

 

12

 

33

 

 

Modified EBITDA

$

1,253

 

$

1,246

 

$

1,243

 

$

1,109

 

$

4,851

 

 

$

1,410

 

$

1,306

 

$

1,105

 

$

3,821

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

662

 

$

615

 

$

616

 

$

486

 

$

2,379

 

 

$

660

 

$

646

 

$

630

 

$

1,936

 

 

Northeast G&P

369

 

370

 

387

 

363

 

1,489

 

 

402

 

409

 

442

 

1,253

 

 

West

215

 

253

 

247

 

283

 

998

 

 

315

 

231

 

276

 

822

 

 

Sequent

 

 

 

 

 

 

 

 

(281

)

(281

)

 

Other

7

 

8

 

(7

)

(23

)

(15

)

 

33

 

20

 

38

 

91

 

 

Total Modified EBITDA

$

1,253

 

$

1,246

 

$

1,243

 

$

1,109

 

$

4,851

 

 

$

1,410

 

$

1,306

 

$

1,105

 

$

3,821

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

7

 

$

2

 

$

6

 

$

158

 

$

173

 

 

$

 

$

2

 

$

 

$

2

 

 

Northeast G&P

1

 

(7

)

9

 

43

 

46

 

 

 

 

 

 

 

West

1

 

(1

)

(2

)

(6

)

(8

)

 

 

 

17

 

17

 

 

Sequent

 

 

 

 

 

 

 

 

279

 

279

 

 

Other

 

 

11

 

32

 

43

 

 

5

 

9

 

19

 

33

 

 

Total Adjustments

$

9

 

$

(6

)

$

24

 

$

227

 

$

254

 

 

$

5

 

$

11

 

$

315

 

$

331

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

669

 

$

617

 

$

622

 

$

644

 

$

2,552

 

 

$

660

 

$

648

 

$

630

 

$

1,938

 

 

Northeast G&P

370

 

363

 

396

 

406

 

1,535

 

 

402

 

409

 

442

 

1,253

 

 

West

216

 

252

 

245

 

277

 

990

 

 

315

 

231

 

293

 

839

 

 

Sequent

 

 

 

 

 

 

 

 

(2

)

(2

)

 

Other

7

 

8

 

4

 

9

 

28

 

 

38

 

29

 

57

 

124

 

 

Total Adjusted EBITDA

$

1,262

 

$

1,240

 

$

1,267

 

$

1,336

 

$

5,105

 

 

$

1,415

 

$

1,317

 

$

1,420

 

$

4,152

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Reconciliation of Net Income (Loss) to Modified EBITDA, Non-GAAP Adjusted EBITDA and Cash Flow from Operating Activities to Non-GAAP Available Funds from Operations (AFFO)

 

 

 

2021 Guidance

(Dollars in millions, except per-share amounts and coverage ratio)

 

Low

 

Mid

 

High

 

 

 

 

 

 

 

Net income (loss)

 

$

1,277

 

 

$

1,302

 

 

$

1,327

 

Provision (benefit) for income taxes

 

 

 

440

 

 

 

Interest expense

 

 

 

1,175

 

 

 

Equity (earnings) losses

 

 

 

(545

)

 

 

Proportional Modified EBITDA of equity-method investments

 

 

 

915

 

 

 

Depreciation and amortization expenses and accretion for asset retirement obligations associated with nonregulated operations

 

 

 

1,905

 

 

 

Other

 

 

 

(5

)

 

 

Modified EBITDA

 

$

5,162

 

 

$

5,187

 

 

$

5,212

 

EBITDA Adjustments

 

 

 

338

 

 

 

Adjusted EBITDA

 

$

5,500

 

 

$

5,525

 

 

$

5,550

 

 

 

 

 

 

 

 

Net income (loss)

 

$

1,277

 

 

$

1,302

 

 

$

1,327

 

Less: Net income (loss) attributable to noncontrolling interests & preferred dividends

 

 

 

50

 

 

 

Net income (loss) attributable to The Williams Companies, Inc. available to common stockholders

 

$

1,227

 

 

$

1,252

 

 

$

1,277

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

Adjustments included in Modified EBITDA (1) (2)

 

 

 

338

 

 

 

Adjustments below Modified EBITDA (1)

 

 

 

33

 

 

 

Allocation of adjustments to noncontrolling interests (1)

 

 

 

 

 

 

Total adjustments

 

 

 

371

 

 

 

Less tax effect for above items (1)

 

 

 

(93

)

 

 

Adjusted income available to common stockholders

 

$

1,505

 

 

$

1,530

 

 

$

1,555

 

Adjusted diluted earnings per common share

 

$

1.24

 

 

$

1.26

 

 

$

1.28

 

Weighted-average shares - diluted (millions)

 

 

 

1,218

 

 

 

 

 

 

 

 

 

 

Available Funds from Operations (AFFO):

 

 

 

 

 

 

Net cash provided by operating activities (net of changes in working capital, changes in current and noncurrent derivative assets and liabilities, and changes in other, including changes in noncurrent assets and liabilities)

 

$

4,200

 

 

$

4,225

 

 

$

4,250

 

Preferred dividends paid

 

 

 

(3

)

 

 

Dividends and distributions paid to noncontrolling interests

 

 

 

(185

)

 

 

Contributions from noncontrolling interests

 

 

 

13

 

 

 

Available funds from operations (AFFO)

 

$

4,025

 

 

$

4,050

 

 

$

4,075

 

AFFO per common share

 

$

3.30

 

 

$

3.33

 

 

$

3.35

 

Common dividends paid

 

 

 

$

1,995

 

 

 

Coverage Ratio (AFFO/Common dividends paid)

 

 

2.02

x

 

 

2.03

x

 

 

2.04

x

 

 

 

 

 

 

 

(1) See "Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income" for additional details.

(2) Includes fourth quarter amortization of Sequent purchase accounting inventory fair value adjustment of $7 million.

Forward-Looking Statements

The reports, filings, and other public announcements of The Williams Companies, Inc. (Williams) 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 (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions, and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995.

All statements, other than statements of historical facts, included in this report that address activities, events, or developments that we expect, believe, or anticipate will exist or may occur in the future, are forward-looking statements. 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:

  • Levels of dividends to Williams stockholders;
  • Future credit ratings of Williams and its affiliates;
  • Amounts and nature of future capital expenditures;
  • Expansion and growth of our business and operations;
  • Expected in-service dates for capital projects;
  • Financial condition and liquidity;
  • Business strategy;
  • Cash flow from operations or results of operations;
  • Seasonality of certain business components;
  • Natural gas, natural gas liquids and crude oil prices, supply, and demand;
  • Demand for our services;
  • The impact of the coronavirus (COVID-19) pandemic.

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 report. 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:

  • Availability of supplies, market demand, and volatility of prices;
  • Development and rate of adoption of alternative energy sources;
  • The impact of existing and future laws and regulations, the regulatory environment, environmental matters, and litigation, as well as our ability to obtain necessary permits and approvals, and achieve favorable rate proceeding outcomes;
  • Our exposure to the credit risk of our customers and counterparties;
  • Our ability to acquire new businesses and assets and successfully integrate those operations and assets into existing businesses as well as successfully expand our facilities, and to consummate asset sales on acceptable terms;
  • Whether we are able to successfully identify, evaluate, and timely execute our capital projects and investment opportunities;
  • The strength and financial resources of our competitors and the effects of competition;
  • The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate;
  • Whether we will be able to effectively execute our financing plan;
  • Increasing scrutiny and changing expectations from stakeholders with respect to our environmental, social, and governance practices;
  • The physical and financial risks associated with climate change;
  • The impacts of operational and developmental hazards and unforeseen interruptions;
  • The risks resulting from outbreaks or other public health crises, including COVID-19;
  • Risks associated with weather and natural phenomena, including climate conditions and physical damage to our facilities;
  • Acts of terrorism, cybersecurity incidents, and related disruptions;
  • Our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans;
  • Changes in maintenance and construction costs, as well as our ability to obtain sufficient construction-related inputs, including skilled labor;
  • Inflation, interest 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);
  • 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 ability of the members of the Organization of Petroleum Exporting Countries and other oil exporting nations to agree to and maintain oil price and production controls and the impact on domestic production;
  • Changes in the current geopolitical situation;
  • Changes in U.S. governmental administration and policies;
  • Whether we are able to pay current and expected levels of dividends;
  • 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 and referred to below may cause our intentions to change from those statements of intention set forth in this report. 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 our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 24, 2021, and our other periodic reports filed with the SEC.

Contacts

MEDIA CONTACT:

media@williams.com

(800) 945-8723

INVESTOR CONTACT:

Danilo Juvane

(918) 573-5075

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 Burlingame.com & California Media Partners, LLC. All rights reserved.