Williams (NYSE: WMB) today announced its unaudited financial
results for the three and nine months ended September 30, 2023.
Continued strength in base business delivers another quarter
of solid financial results
- GAAP net income of $654 million, or $0.54 per diluted share
(EPS) – up 10% vs. 3Q 2022
- Adjusted net income of $547 million, or $0.45 per diluted share
(Adjusted EPS)
- Adjusted EBITDA of $1.652 billion – up $15 million from 3Q
2022
- Cash flow from operations (CFFO) of $1.234 billion
- Available funds from operations (AFFO) of $1.230 billion
- Dividend coverage ratio of 2.26x (AFFO basis)
- Increased midpoint for full-year 2023 guidance to $6.7 billion
Adjusted EBITDA
- Continued improvement of balance sheet with leverage ratio of
3.45x
Steadfast project execution to drive additional business
growth in 2023 and beyond; sale of non-core assets and strategic
acquisitions fine-tune portfolio
- Placed in-service phase one of Transco's Regional Energy Access
expansion Oct. 21 ahead of schedule
- Signed precedent agreements on Transco's Southeast Supply
Enhancement
- Signed anchor shipper precedent agreement on MountainWest Uinta
Basin expansion project
- Completed NorTex Wolf Hollow, South Mansfield and phase one of
Northeast Cardinal Utica expansions
- Sold non-core Bayou Ethane system for an attractive multiple
greater than 14x
- Delaware Supreme Court affirms previous rulings in
long-standing suit; Energy Transfer ordered to pay $602 million
plus additional interest accrued during the appeal to Williams for
failed merger
- Optimizing position in DJ Basin through Rocky Mountain
Midstream and Cureton Front Range LLC acquisitions
- Assuming operatorship of non-consolidated Blue Racer joint
venture
- Supporting two clean hydrogen hubs announced by U.S. Department
of Energy
CEO Perspective Alan Armstrong, president and chief
executive officer, made the following comments:
“Williams delivered another quarter of impressive
accomplishments with Adjusted EBITDA up 9 percent year-to-date
2023, despite dramatically lower natural gas prices. We expect the
strong performance to continue, providing confidence to raise our
guidance midpoint by $100 million to $6.7 billion Adjusted EBITDA
for 2023.
"Our teams have done an excellent job executing our large-scale
expansion projects in a complex and challenging permitting
environment. We placed the first phase of our latest Transco
expansion project, Regional Energy Access, into service ahead of
schedule, progressed on an additional 2 Bcf/d of Transco expansions
for completion by year-end 2025, and executed precedent agreements
on the 1.4 Bcf/d Southeast Supply Enhancement project. Our teams
also successfully integrated MountainWest into our operations and
are executing on more profitable growth with this asset than we had
planned. Additionally, we have once again optimized our portfolio,
using proceeds from the sale of non-core assets, along with
expected proceeds from a recent legal judgement, to strengthen our
position and capture tangible synergies in the DJ Basin."
Armstrong added, “Williams has proven its ability to predictably
grow through a variety of commodity cycles, and our natural gas
strategy is more relevant than ever as demand for natural gas
continues to increase, especially to serve electric power
generation and LNG exports. Williams is well positioned to capture
significant future growth and return value to our shareholders,
while we reliably deliver the benefits of natural gas to the United
States and abroad."
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.
2023
2022
2023
2022
GAAP Measures
Net Income
$654
$599
$2,127
$1,378
Net Income Per Share
$0.54
$0.49
$1.74
$1.13
Cash Flow From Operations
$1,234
$1,490
$4,125
$3,670
Non-GAAP Measures (1)
Adjusted EBITDA
$1,652
$1,637
$5,058
$4,644
Adjusted Net Income
$547
$592
$1,746
$1,575
Adjusted Earnings Per Share
$0.45
$0.48
$1.43
$1.29
Available Funds from Operations
$1,230
$1,241
$3,890
$3,561
Dividend Coverage Ratio
2.26x
2.40x
2.38x
2.29x
Other
Debt-to-Adjusted EBITDA at Quarter End
(2)
3.45x
3.68x
Capital Investments (3) (4)
$805
$526
$2,045
$1,271
(1) Schedules reconciling Adjusted Net
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 and contributions to equity-method
investments and purchases of other long-term investments.
(4) Third-quarter and year-to-date 2023
capital excludes ($29 million) and $1.024 billion, respectively for
the acquisition of MountainWest Pipeline Holding company, which
closed February 14, 2023. Third-quarter and year-to-date 2022
capital excludes $424 million for the purchase of NorTex Midstream,
which closed August 31, 2022. Year-to-date 2022 capital also
excludes $933 million for purchase of the Trace Midstream
Haynesville gathering assets, which closed April 29, 2022.
GAAP Measures Third-quarter 2023 net income increased by
$55 million compared to the prior year reflecting a $130 million
gain on the sale of the Bayou Ethane system and the benefit of
higher service revenues driven by contributions from recent
acquisitions and increased volumes and rates in the Northeast
G&P segment. These improvements were partially offset by our
$31 million share of a loss contingency accrual on our Aux Sable
equity-method investment and lower results from our upstream
business reflecting lower prices partially offset by higher
production volumes, and higher operating expenses. The tax
provision increased $80 million primarily due to a lower benefit
associated with decreases in our estimate of the state deferred
income tax rate in both periods and higher pretax income, partially
offset by the absence of an unfavorable revision to a state net
operating loss carryforward in 2022.
For year-to-date 2023, net income increased $749 million
compared to the prior year reflecting a favorable change of $762
million in net unrealized gains/losses on commodity derivatives.
Other drivers of the year-to-date increase are similar to those
described for the quarterly comparison, except that improved
marketing margins more than offset lower natural gas liquids (NGL)
processing margins for the year-to-date period. The tax provision
increased primarily due to higher pretax income and the absence of
$134 million benefit associated with the release of valuation
allowances on deferred income tax assets and federal income tax
settlements recorded in the prior year, and a lower benefit
associated with decreases in our estimate of the state deferred
income tax rate in both periods. The year-to-date 2023 period also
reported a loss from discontinued operations associated with an
adverse legal ruling involving former refinery operations.
Cash flow from operations for the third-quarter decreased
compared to the prior year primarily due to unfavorable net changes
in working capital and lower distributions from certain equity
method investments, partially offset by higher operating results
exclusive of noncash items. Year-to-date cash flow from operations
increased compared to the prior year primarily due to higher
operating results exclusive of non-cash items and favorable changes
in derivative margin requirements, partially offset by lower
distributions from certain equity method investments.
Non-GAAP Measures Third-quarter 2023 Adjusted EBITDA
increased by $15 million over the prior year, driven by the
previously described higher service revenues, partially offset by
reduced upstream results, lower marketing margins, higher operating
costs and lower JV proportional EBITDA. Year-to-date 2023 Adjusted
EBITDA increased by $414 million over the prior year, driven by
similar factors, except that marketing margins were overall
improved.
Third-quarter 2023 Adjusted Net Income decreased by $45 million
compared to the prior year, driven by the previously described
impacts to net income, adjusted primarily to remove the effects of
net unrealized gains/losses on commodity derivatives, the gain on
the sale of certain Gulf coast liquids pipelines, amortization of
certain assets from the Sequent acquisition, our share of Aux
Sable’s loss contingency accrual, NGL linefill volatility, and
favorable income tax benefits. Year-to-date Adjusted Net Income
increased by $171 million over the prior year driven by the
previously described impacts to year-to-date income, adjusted
primarily for similar items.
Third-quarter 2023 Available Funds From Operations (AFFO)
decreased slightly by $11 million compared to the prior year
primarily due to lower distributions from certain equity method
investments partially offset by higher operating results exclusive
of noncash items. Year-to-date 2023 AFFO increased by $329 million
primarily reflecting higher results from continuing operations
exclusive of non-cash items partially offset by lower distributions
from certain equity method investments.
Third Quarter
Year to Date
Amounts in millions
Modified EBITDA
Adjusted EBITDA
Modified EBITDA
Adjusted EBITDA
3Q 2023
3Q 2022
Change
3Q 2023
3Q 2022
Change
2023
2022
Change
2023
2022
Change
Transmission & Gulf of Mexico
$881
$638
$243
$754
$671
$83
$2,327
$1,987
$340
$2,230
$2,020
$210
Northeast G&P
454
464
(10
)
485
464
21
1,439
1,332
107
1,470
1,332
138
West
315
337
(22
)
315
337
(22
)
931
885
46
913
893
20
Gas & NGL Marketing Services
43
20
23
16
38
(22
)
678
(249
)
927
231
109
122
Other
81
140
(59
)
82
127
(45
)
196
284
(88
)
214
290
(76
)
Total
$1,774
$1,599
$175
$1,652
$1,637
$15
$5,571
$4,239
$1,332
$5,058
$4,644
$414
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 2023 Modified and Adjusted EBITDA improved compared to
the prior year driven by the MountainWest and NorTex Midstream
acquisitions, higher service revenues, lower employee-related costs
and increased benefit of allowance for equity funds used during
construction. Modified EBITDA for 2023 was further impacted by the
gain on the sale the Bayou Ethane system and one-time MountainWest
acquisition and transition costs, while 2022 included a loss
related to Eminence storage cavern abandonments and a regulatory
charge associated with Transco’s deferred state income tax rate,
all of which are excluded from Adjusted EBITDA.
Northeast G&P Third-quarter and year-to-date 2023
Modified and Adjusted EBITDA reflect increased gathering rates and
volumes, partially offset by lower rates at Laurel Mountain
Midstream and Bradford joint ventures compared to the prior year.
Modified EBITDA for 2023 also reflects our share of a loss
contingency accrual at Aux Sable which is excluded from Adjusted
EBITDA.
West Third-quarter 2023 Modified and Adjusted EBITDA
decreased compared to the prior year primarily reflecting lower
NYMEX-based rates in the Barnett partially offset by favorable
changes in realized gains on natural gas hedges. Year-to-date
Modified and Adjusted EBITDA improved compared to the prior year
driven by higher service revenues reflecting realized gains on
natural gas hedges and higher Haynesville volumes, partially offset
by lower NYMEX-based rates in the Barnett, as well increased JV
EBITDA. The year-to-date period improvement also included
contributions from Trace Midstream acquired in April 2022 and lower
processing margins reflecting a short-term gas price spike at Opal
early in the year and severe weather impacts.
Gas & NGL Marketing Services Third-quarter 2023
Modified EBITDA improved from the prior year primarily reflecting a
net favorable change in unrealized gains/losses on commodity
derivatives. Year-to-date 2023 Modified EBITDA improved from the
prior year primarily reflecting higher commodity marketing margins
and a $791 million net favorable change in unrealized gains/losses
on commodity derivatives. The unrealized gains/losses on commodity
derivatives are excluded from Adjusted EBITDA.
Other Third-quarter and year-to-date 2023 Modified and
Adjusted EBITDA decreased compared to the prior year primarily
reflecting lower results from our upstream business driven by lower
prices, partially offset by higher production volumes. Modified
EBITDA also includes net unfavorable changes in unrealized
gains/losses on commodity derivatives for both the quarter and
year-to-date comparative periods, which is excluded from Adjusted
EBITDA.
Optimizing portfolio through non-core asset sale and
re-investing in assets strategic to footprint In the third
quarter, Williams sold its Bayou Ethane system for $348 million in
cash, representing a last-twelve-month multiple over 14x Adjusted
EBITDA. The transaction includes long-term ethane take away
agreements, locking in flow assurance for Discovery and Mobile Bay
producers. The proceeds from the sale will contribute to funding
Williams’ extensive portfolio of attractive growth capital
investments, including transactions in Colorado’s Denver-Julesburg
(“DJ”) Basin:
- Williams has agreed to acquire Cureton Front Range LLC, whose
assets include gas gathering pipelines and two processing plants to
serve producers across 225,000 dedicated acres.
- Williams has also agreed to purchase KKR’s 50 percent ownership
interest in Rocky Mountain Midstream, resulting in 100 percent
ownership of Rocky Mountain Midstream for Williams.
The acquisitions have a combined value of $1.27 billion,
representing a blended multiple of approximately 7x expected 2024
Adjusted EBITDA. The combination of these two assets will further
drive down purchase multiple via increased volumes on existing
processing facilities, as well as downstream NGL transportation,
fractionation and storage assets. The transactions are expected to
close by the end of 2023, making Williams the third largest
gatherer in the DJ Basin and progressing toward the company's
strategy of maintaining top positions in its areas of
operation.
Business Segment Results & Form 10-Q Williams'
operations are comprised of the following reportable segments:
Transmission & Gulf of Mexico, Northeast G&P, West and Gas
& NGL Marketing Services, as well as Other. For more
information, see the company's third-quarter 2023 Form 10-Q.
2023 Financial Guidance The company increased its
midpoint of guidance and now expects 2023 Adjusted EBITDA between
$6.6 billion and $6.8 billion. Growth capex guidance remains the
same; between $1.6 billion to $1.9 billion. Importantly, Williams
anticipates a leverage ratio midpoint of 3.65x, which will allow it
to retain financial flexibility. The dividend was increased by 5.3%
on an annualized basis to $1.79 in 2023 from $1.70 in 2022.
Williams' Third-Quarter 2023 Materials to be Posted Shortly;
Q&A Webcast Scheduled for Tomorrow Williams' third-quarter
2023 earnings presentation will be posted at www.williams.com. The
company’s third-quarter 2023 earnings conference call and webcast
with analysts and investors is scheduled for Thursday, November 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://conferencingportals.com/event/MTgNWtxQ.
A webcast link to the conference call will be provided on
Williams’ Investor Relations website. A replay of the webcast will
be available on the website for at least 90 days following the
event.
About Williams As the world demands reliable, low-cost,
low-carbon energy, Williams (NYSE: WMB) will be there with the best
transport, storage and delivery solutions 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, storage, wholesale marketing and trading
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 33,000 miles of pipelines system wide – including Transco, the
nation’s largest volume natural gas pipeline – and handles
approximately one third of the natural gas in the United States
that is used every day for clean-power generation, heating and
industrial use. Learn how the company is leveraging its nationwide
footprint to incorporate clean hydrogen, NextGen Gas and other
innovations at www.williams.com.
The Williams Companies, Inc.
Consolidated Statement of Income (Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
(Millions, except per-share
amounts)
Revenues:
Service revenues
$
1,770
$
1,685
$
5,212
$
4,828
Service revenues – commodity
consideration
45
60
108
223
Product sales
720
1,260
2,158
3,475
Net gain (loss) on commodity
derivatives
24
16
645
(491
)
Total revenues
2,559
3,021
8,123
8,035
Costs and expenses:
Product costs
484
990
1,458
2,650
Net processing commodity expenses
31
29
129
99
Operating and maintenance expenses
522
486
1,466
1,345
Depreciation and amortization expenses
521
500
1,542
1,504
Selling, general, and administrative
expenses
146
163
483
477
Gain on sale of business
(130
)
—
(130
)
—
Other (income) expense – net
(9
)
33
(49
)
14
Total costs and expenses
1,565
2,201
4,899
6,089
Operating income (loss)
994
820
3,224
1,946
Equity earnings (losses)
127
193
434
492
Other investing income (loss) – net
24
1
45
4
Interest incurred
(330
)
(296
)
(953
)
(871
)
Interest capitalized
16
5
39
13
Other income (expense) – net
30
(6
)
69
5
Income (loss) before income taxes
861
717
2,858
1,589
Less: Provision (benefit) for income
taxes
176
96
635
169
Income (loss) from continuing
operations
685
621
2,223
1,420
Income (loss) from discontinued
operations
(1
)
—
(88
)
—
Net income (loss)
684
621
2,135
1,420
Less: Net income (loss) attributable to
noncontrolling interests
30
21
94
40
Net income (loss) attributable to The
Williams Companies, Inc.
654
600
2,041
1,380
Less: Preferred stock dividends
1
1
2
2
Net income (loss) available to common
stockholders
$
653
$
599
$
2,039
$
1,378
Amounts attributable to The Williams
Companies, Inc. available to common stockholders:
Income (loss) from continuing
operations
$
654
$
599
$
2,127
$
1,378
Income (loss) from discontinued
operations
(1
)
—
(88
)
—
Net income (loss) available to common
stockholders
$
653
$
599
$
2,039
$
1,378
Basic earnings (loss) per common
share:
Income (loss) from continuing
operations
$
.54
$
.49
$
1.74
$
1.13
Income (loss) from discontinued
operations
—
—
(.07
)
—
Net income (loss) available to common
stockholders
$
.54
$
.49
$
1.67
$
1.13
Weighted-average shares (thousands)
1,216,951
1,218,964
1,218,021
1,218,202
Diluted earnings (loss) per common
share:
Income (loss) from continuing
operations
$
.54
$
.49
$
1.74
$
1.13
Income (loss) from discontinued
operations
—
—
(.07
)
—
Net income (loss) available to common
stockholders
$
.54
$
.49
$
1.67
$
1.13
Weighted-average shares (thousands)
1,220,073
1,222,472
1,222,650
1,222,153
The Williams Companies, Inc.
Consolidated Balance Sheet (Unaudited)
September 30,
2023
December 31,
2022
(Millions, except per-share
amounts)
ASSETS
Current assets:
Cash and cash equivalents
$
2,074
$
152
Trade accounts and other receivables (net
of allowance of $3 at September 30, 2023 and $6 at December 31,
2022)
1,419
2,723
Inventories
266
320
Derivative assets
243
323
Other current assets and deferred
charges
254
279
Total current assets
4,256
3,797
Investments
4,998
5,065
Property, plant, and equipment
50,805
47,057
Accumulated depreciation and
amortization
(18,177
)
(16,168
)
Property, plant, and equipment – net
32,628
30,889
Intangible assets – net of accumulated
amortization
7,459
7,363
Regulatory assets, deferred charges, and
other
1,447
1,319
Total assets
$
50,788
$
48,433
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
1,358
$
2,327
Derivative liabilities
123
316
Accrued and other current liabilities
1,166
1,270
Commercial paper
—
350
Long-term debt due within one year
2,879
627
Total current liabilities
5,526
4,890
Long-term debt
22,772
21,927
Deferred income tax liabilities
3,496
2,887
Regulatory liabilities, deferred income,
and other
4,651
4,684
Contingent liabilities and commitments
Equity:
Stockholders’ equity:
Preferred stock ($1 par value; 30 million
shares authorized at September 30, 2023 and December 31, 2022;
35,000 shares issued at September 30, 2023 and December 31,
2022)
35
35
Common stock ($1 par value; 1,470 million
shares authorized at September 30, 2023 and December 31, 2022;
1,256 million shares issued at September 30, 2023 and 1,253 million
shares issued at December 31, 2022)
1,256
1,253
Capital in excess of par value
24,562
24,542
Retained deficit
(12,876
)
(13,271
)
Accumulated other comprehensive income
(loss)
48
(24
)
Treasury stock, at cost (39 million shares
at September 30, 2023 and 35 million shares at December 31, 2022 of
common stock)
(1,180
)
(1,050
)
Total stockholders’ equity
11,845
11,485
Noncontrolling interests in consolidated
subsidiaries
2,498
2,560
Total equity
14,343
14,045
Total liabilities and equity
$
50,788
$
48,433
The Williams Companies, Inc.
Consolidated Statement of Cash Flows (Unaudited)
Nine Months Ended
September 30,
2023
2022
(Millions)
OPERATING ACTIVITIES:
Net income (loss)
$
2,135
$
1,420
Adjustments to reconcile to net cash
provided (used) by operating activities:
Depreciation and amortization
1,542
1,504
Provision (benefit) for deferred income
taxes
586
182
Equity (earnings) losses
(434
)
(492
)
Distributions from equity-method
investees
607
688
Net unrealized (gain) loss from derivative
instruments
(433
)
329
Gain on sale of business
(130
)
—
Inventory write-downs
28
76
Amortization of stock-based awards
59
58
Cash provided (used) by changes in current
assets and liabilities:
Accounts receivable
1,295
(672
)
Inventories
29
(152
)
Other current assets and deferred
charges
(5
)
(62
)
Accounts payable
(1,072
)
743
Accrued and other current liabilities
(114
)
167
Changes in current and noncurrent
derivative assets and liabilities
172
86
Other, including changes in noncurrent
assets and liabilities
(140
)
(205
)
Net cash provided (used) by operating
activities
4,125
3,670
FINANCING ACTIVITIES:
Proceeds from (payments of) commercial
paper – net
(352
)
—
Proceeds from long-term debt
2,754
1,752
Payments of long-term debt
(21
)
(2,019
)
Proceeds from issuance of common stock
8
53
Purchases of treasury stock
(130
)
(9
)
Common dividends paid
(1,635
)
(1,553
)
Dividends and distributions paid to
noncontrolling interests
(174
)
(141
)
Contributions from noncontrolling
interests
18
15
Payments for debt issuance costs
(21
)
(14
)
Other – net
(19
)
(40
)
Net cash provided (used) by financing
activities
428
(1,956
)
INVESTING ACTIVITIES:
Property, plant, and equipment:
Capital expenditures (1)
(1,845
)
(1,447
)
Dispositions – net
(33
)
(19
)
Contributions in aid of construction
20
8
Proceeds from sale of business
348
—
Purchases of businesses, net of cash
acquired
(1,024
)
(933
)
Purchases of and contributions to
equity-method investments
(80
)
(140
)
Other – net
(17
)
(4
)
Net cash provided (used) by investing
activities
(2,631
)
(2,535
)
Increase (decrease) in cash and cash
equivalents
1,922
(821
)
Cash and cash equivalents at beginning of
year
152
1,680
Cash and cash equivalents at end of
period
$
2,074
$
859
_____________
(1) Increases to property, plant, and
equipment
$
(1,960
)
$
(1,549
)
Changes in related accounts payable and
accrued liabilities
115
102
Capital expenditures
$
(1,845
)
$
(1,447
)
Transmission & Gulf of
Mexico
(UNAUDITED)
2022
2023
(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)
$
730
$
717
$
734
$
758
$
2,939
$
774
$
786
$
794
$
2,354
Gathering, processing, storage and
transportation revenues
82
84
99
100
365
100
104
114
318
Other fee revenues (1)
5
5
4
7
21
6
8
5
19
Commodity margins
15
11
10
7
43
10
8
7
25
Net unrealized gain (loss) from derivative
instruments
—
—
1
(1
)
—
—
—
—
—
Operating and administrative costs (1)
(202
)
(227
)
(238
)
(239
)
(906
)
(254
)
(254
)
(257
)
(765
)
Other segment income (expenses) - net
(1)
19
17
(22
)
5
19
26
31
36
93
Gain on sale of business
—
—
—
—
—
—
—
130
130
Proportional Modified EBITDA of
equity-method investments
48
45
50
50
193
53
48
52
153
Modified EBITDA
697
652
638
687
2,674
715
731
881
2,327
Adjustments
—
—
33
13
46
13
17
(127
)
(97
)
Adjusted EBITDA
$
697
$
652
$
671
$
700
$
2,720
$
728
$
748
$
754
$
2,230
Statistics for Operated Assets
Natural Gas Transmission (2)
Transcontinental Gas Pipe Line
Avg. daily transportation volumes
(MMdth)
15.0
13.5
14.7
14.2
14.4
14.3
13.2
14.0
13.8
Avg. daily firm reserved capacity
(MMdth)
19.3
19.1
19.2
19.3
19.2
19.5
19.4
19.4
19.4
Northwest Pipeline LLC
Avg. daily transportation volumes
(MMdth)
2.8
2.1
2.0
2.9
2.5
3.1
2.3
2.3
2.6
Avg. daily firm reserved capacity
(MMdth)
3.8
3.8
3.8
3.8
3.8
3.8
3.8
3.8
3.8
MountainWest (3)
Avg. daily transportation volumes
(MMdth)
—
—
—
—
—
4.2
3.2
3.8
3.7
Avg. daily firm reserved capacity
(MMdth)
—
—
—
—
—
7.8
7.5
7.5
7.6
Gulfstream - Non-consolidated
Avg. daily transportation volumes
(MMdth)
0.9
1.3
1.4
1.1
1.3
1.0
1.2
1.4
1.2
Avg. daily firm reserved capacity
(MMdth)
1.3
1.3
1.4
1.4
1.4
1.4
1.4
1.4
1.4
Gathering, Processing, and Crude Oil
Transportation
Consolidated (4)
Gathering volumes (Bcf/d)
0.30
0.28
0.29
0.28
0.29
0.28
0.23
0.27
0.26
Plant inlet natural gas volumes
(Bcf/d)
0.48
0.46
0.49
0.46
0.47
0.43
0.40
0.46
0.43
NGL production (Mbbls/d)
31
31
26
26
28
28
24
28
27
NGL equity sales (Mbbls/d)
7
7
4
5
6
7
5
6
6
Crude oil transportation volumes
(Mbbls/d)
110
124
125
118
119
119
111
134
121
Non-consolidated (5)
Gathering volumes (Bcf/d)
0.39
0.37
0.41
0.42
0.40
0.36
0.30
0.36
0.34
Plant inlet natural gas volumes
(Bcf/d)
0.38
0.37
0.41
0.42
0.40
0.36
0.30
0.36
0.34
NGL production (Mbbls/d)
28
26
29
29
28
28
21
30
26
NGL equity sales (Mbbls/d)
8
6
7
10
8
8
3
8
7
(1) Excludes certain amounts associated
with revenues and operating costs for tracked or reimbursable
charges.
(2) Tbtu converted to MMdth at one
trillion British thermal units = one million dekatherms.
(3) Includes 100% of the volumes
associated with the MountainWest Acquisition transmission assets
after the purchase on February 14, 2023, including 100% of the
volumes associated with the operated equity-method investment White
River Hub, LLC. Average volumes were calculated over the period
owned.
(4) Excludes volumes associated with
equity-method investments that are not consolidated in our
results.
(5) Includes 100% of the volumes
associated with operated equity-method investments, including
Discovery Producer Services.
Northeast G&P
(UNAUDITED)
2022
2023
(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
$
323
$
350
$
354
$
368
$
1,395
$
391
$
431
$
417
$
1,239
Other fee revenues (1)
27
27
27
46
127
32
27
27
86
Commodity margins
6
1
3
—
10
5
(1
)
7
11
Operating and administrative costs (1)
(85
)
(102
)
(101
)
(97
)
(385
)
(101
)
(101
)
(115
)
(317
)
Other segment income (expenses) - net
(3
)
—
(1
)
(1
)
(5
)
—
—
(1
)
(1
)
Proportional Modified EBITDA of
equity-method investments
150
174
182
148
654
143
159
119
421
Modified EBITDA
418
450
464
464
1,796
470
515
454
1,439
Our share of accrual for loss contingency
at Aux Sable Liquid Products LP
—
—
—
—
—
—
—
31
31
Adjusted EBITDA
$
418
$
450
$
464
$
464
$
1,796
$
470
$
515
$
485
$
1,470
Statistics for Operated Assets and
non-operated Blue Racer Midstream
Gathering and Processing
Consolidated (2)
Gathering volumes (Bcf/d) (3)
4.03
4.19
4.22
4.31
4.19
4.42
4.61
4.41
4.48
Plant inlet natural gas volumes
(Bcf/d)
1.46
1.70
1.74
1.70
1.65
1.92
1.79
1.93
1.88
NGL production (Mbbls/d)
110
118
125
127
120
144
135
144
141
NGL equity sales (Mbbls/d)
2
1
1
1
1
1
1
—
1
Non-consolidated (4)
Gathering volumes (Bcf/d)
6.62
6.76
6.58
6.48
6.61
6.97
7.03
6.83
6.94
Plant inlet natural gas volumes
(Bcf/d)
0.66
0.76
0.66
0.77
0.71
0.77
0.93
0.99
0.90
NGL production (Mbbls/d)
50
53
45
56
51
54
64
71
63
NGL equity sales (Mbbls/d)
4
3
2
2
3
4
5
4
4
(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) 1st Qtr 2023 and 2nd Qtr 2023 volumes
have been revised for a correction.
(4) Includes 100% of the volumes
associated with operated equity-method investments, including the
Laurel Mountain Midstream partnership; and the Bradford Supply Hub
and the Marcellus South Supply Hub within the Appalachia Midstream
Services partnership. Also, all periods include non-operated Blue
Racer Midstream.
West
(UNAUDITED)
2022
2023
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
2nd Qtr
3rd Qtr
Year
Net gathering, processing, transportation,
storage, and fractionation revenues
$
317
$
360
$
397
$
401
$
1,475
$
382
$
373
$
371
$
1,126
Other fee revenues (1)
6
6
6
5
23
5
7
4
16
Commodity margins
23
25
27
27
102
(24
)
18
21
15
Operating and administrative costs (1)
(112
)
(133
)
(128
)
(133
)
(506
)
(115
)
(122
)
(122
)
(359
)
Other segment income (expenses) - net
(1
)
(1
)
(6
)
(7
)
(15
)
23
(7
)
(4
)
12
Proportional Modified EBITDA of
equity-method investments
27
31
41
33
132
33
43
45
121
Modified EBITDA
260
288
337
326
1,211
304
312
315
931
Adjustments
—
8
—
—
8
(18
)
—
—
(18
)
Adjusted EBITDA
$
260
$
296
$
337
$
326
$
1,219
$
286
$
312
$
315
$
913
Statistics for Operated Assets
Gathering and Processing
Consolidated (2)
Gathering volumes (Bcf/d) (3)
3.47
5.14
5.20
5.50
5.19
5.47
5.51
5.60
5.52
Plant inlet natural gas volumes
(Bcf/d)
1.13
1.14
1.21
1.10
1.15
0.92
1.06
1.12
1.04
NGL production (Mbbls/d)
47
49
45
32
43
25
40
61
42
NGL equity sales (Mbbls/d)
17
18
13
7
14
6
16
22
15
Non-consolidated (4)
Gathering volumes (Bcf/d)
0.28
0.28
0.29
0.29
0.29
0.32
0.33
0.33
0.33
Plant inlet natural gas volumes
(Bcf/d)
0.27
0.28
0.29
0.29
0.28
0.32
0.32
0.32
0.32
NGL production (Mbbls/d)
31
32
34
32
33
37
38
38
38
NGL and Crude Oil Transportation volumes
(Mbbls/d) (5)
132
162
189
151
158
161
217
244
208
(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 the Trace Acquisition gathering assets after the
purchase on April 29, 2022. Average volumes were calculated over
the period owned.
(4) Includes 100% of the volumes
associated with operated equity-method investments, including Rocky
Mountain Midstream.
(5) Includes 100% of the volumes
associated with operated equity-method investments, including
Overland Pass Pipeline Company and Rocky Mountain Midstream as well
as volumes for our consolidated Bluestem pipeline.
Gas & NGL Marketing
Services
(UNAUDITED)
2022
2023
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
2nd Qtr
3rd Qtr
Year
Commodity margins
$
100
$
23
$
39
$
161
$
323
$
265
$
(2
)
$
38
$
301
Other fee revenues
1
—
1
1
3
1
—
—
1
Net unrealized gain (loss) from derivative
instruments
(57
)
(288
)
5
66
(274
)
333
94
24
451
Operating and administrative costs
(31
)
(23
)
(24
)
(18
)
(96
)
(32
)
(24
)
(19
)
(75
)
Other segment income (expenses) - net
—
6
(1
)
(1
)
4
—
—
—
—
Modified EBITDA
13
(282
)
20
209
(40
)
567
68
43
678
Adjustments
52
288
18
(60
)
298
(336
)
(84
)
(27
)
(447
)
Adjusted EBITDA
$
65
$
6
$
38
$
149
$
258
$
231
$
(16
)
$
16
$
231
Statistics
Product Sales Volumes
Natural Gas (Bcf/d)
7.96
6.66
7.11
7.05
7.20
7.24
6.56
7.31
7.04
NGLs (Mbbls/d)
246
234
267
254
250
234
239
245
239
Other
(UNAUDITED)
2022
2023
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
2nd Qtr
3rd Qtr
Year
Service revenues
$
9
$
7
$
6
$
2
$
24
$
3
$
5
$
4
$
12
Net realized product sales
96
142
180
184
602
120
97
127
344
Net unrealized gain (loss) from derivative
instruments
(66
)
47
29
15
25
(6
)
(11
)
(1
)
(18
)
Operating and administrative costs
(33
)
(57
)
(62
)
(59
)
(211
)
(48
)
(54
)
(58
)
(160
)
Other segment income (expenses) - net
(1
)
—
(13
)
8
(6
)
5
5
10
20
Proportional Modified EBITDA of
equity-method investments
—
—
—
—
—
—
(1
)
(1
)
(2
)
Modified EBITDA
5
139
140
150
434
74
41
81
196
Adjustments
66
(47
)
(13
)
(15
)
(9
)
6
11
1
18
Adjusted EBITDA
$
71
$
92
$
127
$
135
$
425
$
80
$
52
$
82
$
214
Statistics
Net Product Sales Volumes
Natural Gas (Bcf/d)
0.12
0.19
0.27
0.31
0.22
0.26
0.29
0.31
0.28
NGLs (Mbbls/d)
7
7
8
7
7
3
6
9
6
Crude Oil (Mbbls/d)
2
3
2
2
2
1
3
5
3
Capital Expenditures and
Investments
(UNAUDITED)
2022
2023
(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
$
125
$
129
$
637
$
358
$
1,249
$
205
$
263
$
382
$
850
Northeast G&P
40
30
52
92
214
99
74
115
288
West
61
82
94
226
463
169
197
141
507
Other
65
74
58
130
327
72
76
52
200
Total (1)
$
291
$
315
$
841
$
806
$
2,253
$
545
$
610
$
690
$
1,845
Purchases of and contributions to
equity-method investments:
Transmission & Gulf of Mexico
$
16
$
26
$
11
$
17
$
70
$
8
$
18
$
6
$
32
Northeast G&P
32
18
28
8
86
31
12
4
47
West
—
—
—
—
—
—
—
1
1
Other
8
—
1
1
10
—
—
—
—
Total
$
56
$
44
$
40
$
26
$
166
$
39
$
30
$
11
$
80
Summary:
Transmission & Gulf of Mexico
$
141
$
155
$
648
$
375
$
1,319
$
213
$
281
$
388
$
882
Northeast G&P
72
48
80
100
300
130
86
119
335
West
61
82
94
226
463
169
197
142
508
Other
73
74
59
131
337
72
76
52
200
Total
$
347
$
359
$
881
$
832
$
2,419
$
584
$
640
$
701
$
1,925
Capital investments:
Increases to property, plant, and
equipment
$
260
$
382
$
907
$
845
$
2,394
$
484
$
684
$
792
$
1,960
Purchases of businesses, net of cash
acquired
—
933
—
—
933
1,056
(3
)
(29
)
1,024
Purchases of and contributions to
equity-method investments
56
44
40
26
166
39
30
11
80
Purchases of other long-term
investments
—
3
3
5
11
2
1
2
5
Total
$
316
$
1,362
$
950
$
876
$
3,504
$
1,581
$
712
$
776
$
3,069
(1) Increases to property, plant, and
equipment
$
260
$
382
$
907
$
845
$
2,394
$
484
$
684
$
792
$
1,960
Changes in related accounts payable and
accrued liabilities
31
(67
)
(66
)
(39
)
(141
)
61
(74
)
(102
)
(115
)
Capital expenditures
$
291
$
315
$
841
$
806
$
2,253
$
545
$
610
$
690
$
1,845
Contributions from noncontrolling
interests
$
3
$
5
$
7
$
3
$
18
$
3
$
15
$
—
$
18
Contributions in aid of construction
$
(3
)
$
9
$
2
$
4
$
12
$
11
$
7
$
2
$
20
Proceeds from sale of business
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
348
$
348
Proceeds from disposition of equity-method
investments
$
—
$
—
$
7
$
—
$
7
$
—
$
—
$
—
$
—
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 and
adjusted earnings per share. Management believes this measure
provides investors meaningful insight into results from ongoing
operations.
Available funds from operations (AFFO) 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. AFFO may be adjusted to exclude certain
items that we characterize as unrepresentative of our 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 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) from
Continuing Operations Attributable to The Williams Companies, Inc.
to Non-GAAP Adjusted Income
(UNAUDITED)
2022
2023
(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
$
379
$
400
$
599
$
668
$
2,046
$
926
$
547
$
654
$
2,127
Income (loss) from continuing
operations - diluted earnings (loss) per common share (1)
$
.31
$
.33
$
.49
$
.55
$
1.67
$
.76
$
.45
$
.54
$
1.74
Adjustments:
Transmission &
Gulf of Mexico
Loss related to Eminence storage cavern
abandonments and monitoring
$
—
$
—
$
19
$
12
$
31
$
—
$
—
$
—
$
—
Regulatory liability charges associated
with decrease in Transco’s estimated deferred state income tax
rate
—
—
15
—
15
—
—
—
—
Net unrealized (gain) loss from derivative
instruments
—
—
(1
)
1
—
—
—
—
—
MountainWest acquisition and
transition-related costs
—
—
—
—
—
13
17
3
33
Gain on sale of business
—
—
—
—
—
—
—
(130
)
(130
)
Total Transmission & Gulf of Mexico
adjustments
—
—
33
13
46
13
17
(127
)
(97
)
Northeast
G&P
Our share of accrual for loss contingency
at Aux Sable Liquid
Products LP
—
—
—
—
—
—
—
31
31
Total Northeast G&P adjustments
—
—
—
—
—
—
—
31
31
West
Trace acquisition costs
—
8
—
—
8
—
—
—
—
Gain from contract settlement
—
—
—
—
—
(18
)
—
—
(18
)
Total West adjustments
—
8
—
—
8
(18
)
—
—
(18
)
Gas & NGL
Marketing Services
Amortization of purchase accounting
inventory fair value adjustment
15
—
—
—
15
—
—
—
—
Impact of volatility on NGL linefill
transactions
(20
)
—
23
6
9
(3
)
10
(3
)
4
Net unrealized (gain) loss from derivative
instruments
57
288
(5
)
(66
)
274
(333
)
(94
)
(24
)
(451
)
Total Gas & NGL Marketing Services
adjustments
52
288
18
(60
)
298
(336
)
(84
)
(27
)
(447
)
Other
Regulatory liability charge associated
with decrease in Transco’s estimated deferred state income tax
rate
—
—
5
—
5
—
—
—
—
Net unrealized (gain) loss from derivative
instruments
66
(47
)
(29
)
(15
)
(25
)
6
11
1
18
Accrual for loss contingencies
—
—
11
—
11
—
—
—
—
Total Other adjustments
66
(47
)
(13
)
(15
)
(9
)
6
11
1
18
Adjustments included in Modified
EBITDA
118
249
38
(62
)
343
(335
)
(56
)
(122
)
(513
)
Adjustments below
Modified EBITDA
Amortization of intangible assets from
Sequent acquisition
42
41
42
42
167
15
14
15
44
Depreciation adjustment related to
Eminence storage cavern abandonments
—
—
(1
)
—
(1
)
—
—
—
—
42
41
41
42
166
15
14
15
44
Total adjustments
160
290
79
(20
)
509
(320
)
(42
)
(107
)
(469
)
Less tax effect for above items
(40
)
(72
)
(17
)
5
(124
)
78
10
25
113
Adjustments for tax-related items (2)
—
(134
)
(69
)
—
(203
)
—
—
(25
)
(25
)
Adjusted income from continuing
operations available to common stockholders
$
499
$
484
$
592
$
653
$
2,228
$
684
$
515
$
547
$
1,746
Adjusted income from continuing
operations - diluted earnings per common share (1)
$
.41
$
.40
$
.48
$
.53
$
1.82
$
.56
$
.42
$
.45
$
1.43
Weighted-average shares - diluted
(thousands)
1,221,279
1,222,694
1,222,472
1,224,212
1,222,672
1,225,781
1,219,915
1,220,073
1,222,650
(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) The second quarter of 2022 includes
adjustments for the reversal of valuation allowance due to the
expected utilization of certain deferred income tax assets and
previously unrecognized tax benefits from the resolution of certain
federal income tax audits. The third quarter of 2022 includes an
unfavorable adjustment to reverse the net benefit primarily
associated with a significant decrease in our estimated deferred
state income tax rate, partially offset by an unfavorable revision
to a state net operating loss carryforward. The third quarter of
2023 includes an adjustment associated with a further decrease in
our estimated deferred state income tax rate.
Reconciliation of "Net Income (Loss)"
to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA”
(UNAUDITED)
2022
2023
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
2nd Qtr
3rd Qtr
Year
Net income (loss)
$
392
$
407
$
621
$
697
$
2,117
$
957
$
494
$
684
$
2,135
Provision (benefit) for income taxes
118
(45
)
96
256
425
284
175
176
635
Interest expense
286
281
291
289
1,147
294
306
314
914
Equity (earnings) losses
(136
)
(163
)
(193
)
(145
)
(637
)
(147
)
(160
)
(127
)
(434
)
Other investing (income) loss - net
(1
)
(2
)
(1
)
(12
)
(16
)
(8
)
(13
)
(24
)
(45
)
Proportional Modified EBITDA of
equity-method investments
225
250
273
231
979
229
249
215
693
Depreciation and amortization expenses
498
506
500
505
2,009
506
515
521
1,542
Accretion expense associated with asset
retirement obligations for nonregulated operations
11
13
12
15
51
15
14
14
43
(Income) loss from discontinued
operations, net of tax
—
—
—
—
—
—
87
1
88
Modified EBITDA
$
1,393
$
1,247
$
1,599
$
1,836
$
6,075
$
2,130
$
1,667
$
1,774
$
5,571
Transmission & Gulf of Mexico
$
697
$
652
$
638
$
687
$
2,674
$
715
$
731
$
881
$
2,327
Northeast G&P
418
450
464
464
1,796
470
515
454
1,439
West
260
288
337
326
1,211
304
312
315
931
Gas & NGL Marketing Services
13
(282
)
20
209
(40
)
567
68
43
678
Other
5
139
140
150
434
74
41
81
196
Total Modified EBITDA
$
1,393
$
1,247
$
1,599
$
1,836
$
6,075
$
2,130
$
1,667
$
1,774
$
5,571
Adjustments (1):
Transmission & Gulf of Mexico
$
—
$
—
$
33
$
13
$
46
$
13
$
17
$
(127
)
$
(97
)
Northeast G&P
—
—
—
—
—
—
—
31
31
West
—
8
—
—
8
(18
)
—
—
(18
)
Gas & NGL Marketing Services
52
288
18
(60
)
298
(336
)
(84
)
(27
)
(447
)
Other
66
(47
)
(13
)
(15
)
(9
)
6
11
1
18
Total Adjustments
$
118
$
249
$
38
$
(62
)
$
343
$
(335
)
$
(56
)
$
(122
)
$
(513
)
Adjusted EBITDA:
Transmission & Gulf of Mexico
$
697
$
652
$
671
$
700
$
2,720
$
728
$
748
$
754
$
2,230
Northeast G&P
418
450
464
464
1,796
470
515
485
1,470
West
260
296
337
326
1,219
286
312
315
913
Gas & NGL Marketing Services
65
6
38
149
258
231
(16
)
16
231
Other
71
92
127
135
425
80
52
82
214
Total Adjusted EBITDA
$
1,511
$
1,496
$
1,637
$
1,774
$
6,418
$
1,795
$
1,611
$
1,652
$
5,058
(1) Adjustments by segment are detailed in
the "Reconciliation of Income (Loss) from Continuing Operations
Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted
Income," which is also included in these materials.
Reconciliation of Cash Flow from
Operating Activities to Non-GAAP Available Funds from Operations
(AFFO)
(UNAUDITED)
2022
2023
(Dollars in millions, except coverage
ratios)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
2nd Qtr
3rd Qtr
Year
Net cash provided (used) by operating
activities
$
1,082
$
1,098
$
1,490
$
1,219
$
4,889
$
1,514
$
1,377
$
1,234
$
4,125
Exclude: Cash (provided) used by changes
in:
Accounts receivable
3
794
(125
)
61
733
(1,269
)
(154
)
128
(1,295
)
Inventories, including write-downs
(178
)
177
77
(127
)
(51
)
(45
)
(19
)
7
(57
)
Other current assets and deferred
charges
65
(50
)
47
(29
)
33
4
(28
)
29
5
Accounts payable
138
(828
)
(53
)
333
(410
)
1,017
203
(148
)
1,072
Accrued and other current liabilities
149
(125
)
(191
)
(42
)
(209
)
318
(246
)
42
114
Changes in current and noncurrent
derivative assets and liabilities
(101
)
52
(37
)
(8
)
(94
)
(82
)
(37
)
(53
)
(172
)
Other, including changes in noncurrent
assets and liabilities
67
65
73
11
216
40
47
53
140
Preferred dividends paid
(1
)
—
(1
)
(1
)
(3
)
(1
)
—
(1
)
(2
)
Dividends and distributions paid to
noncontrolling interests
(37
)
(58
)
(46
)
(63
)
(204
)
(54
)
(58
)
(62
)
(174
)
Contributions from noncontrolling
interests
3
5
7
3
18
3
15
—
18
Adjustment to exclude litigation-related
charges in discontinued operations
—
—
—
—
—
—
115
1
116
Available funds from operations
$
1,190
$
1,130
$
1,241
$
1,357
$
4,918
$
1,445
$
1,215
$
1,230
$
3,890
Common dividends paid
$
518
$
517
$
518
$
518
$
2,071
$
546
$
545
$
544
$
1,635
Coverage ratio:
Available funds from operations divided by
Common dividends paid
2.30
2.19
2.40
2.62
2.37
2.65
2.23
2.26
2.38
Reconciliation of Net Income (Loss)
from Continuing Operations to Modified EBITDA, Non-GAAP Adjusted
EBITDA and Cash Flow from Operating Activities to Non-GAAP
Available Funds from Operations (AFFO)
2023 Guidance
(Dollars in millions, except per-share
amounts and coverage ratio)
Low
Mid
High
Net income (loss) from continuing
operations
$
2,675
$
2,750
$
2,825
Provision (benefit) for income taxes
800
825
850
Interest expense
1,225
Equity (earnings) losses
(590
)
Proportional Modified EBITDA of
equity-method investments
945
Depreciation and amortization expenses and
accretion for asset retirement obligations associated with
nonregulated operations
2,110
Other
(52
)
Modified EBITDA
$
7,113
$
7,213
$
7,313
EBITDA Adjustments
(513
)
Adjusted EBITDA
$
6,600
$
6,700
$
6,800
Net income (loss) from continuing
operations
$
2,675
$
2,750
$
2,825
Less: Net income (loss) attributable to
noncontrolling interests & preferred dividends
130
Net income (loss) from continuing
operations attributable to The Williams Companies, Inc. available
to common stockholders
$
2,545
$
2,620
$
2,695
Adjustments:
Adjustments included in Modified EBITDA
(1)
(513
)
Adjustments below Modified EBITDA (2)
59
Allocation of adjustments to
noncontrolling interests
—
Total adjustments
(454
)
Less tax effect for above items (3)
84
Adjusted income from continuing operations
available to common stockholders
$
2,175
$
2,250
$
2,325
Adjusted income from continuing
operations - diluted earnings per common share
$
1.78
$
1.84
$
1.90
Weighted-average shares - diluted
(millions)
1,222
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)
$
5,075
$
5,175
$
5,275
Preferred dividends paid
(3
)
Dividends and distributions paid to
noncontrolling interests
(210
)
Contributions from noncontrolling
interests
22
Adjustment to exclude litigation-related
charges in discontinued operations
116
Available funds from operations
(AFFO)
$
5,000
$
5,100
$
5,200
AFFO per common share
$
4.09
$
4.17
$
4.26
Common dividends paid
$
2,180
Coverage Ratio (AFFO/Common dividends
paid)
2.29x
2.34x
2.39x
(1) 1Q, 2Q and 3Q adjustments of ($513)
million as shown in the "Reconciliation of Income/(Loss) from
Continuing Operations Attributable to The Williams Companies, Inc.
to Non-GAAP Adjusted Income"
(2) Includes 1Q, 2Q and 3Q amortization of
intangible assets from Sequent acquisition of $44 million and 4Q
amortization of $15 million
(3) Includes 1Q, 2Q and 3Q tax on
adjustments of $113 million, 3Q adjustment associated with a
further decrease in our estimated deferred state income tax rate of
($25) million, and 4Q tax on adjustments of ($4) 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;
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, including the
Russian invasion of Ukraine and the developing conflict between
Israel and Hamas;
- 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, 2022, as filed with the SEC on February 27,
2023, as may be supplemented by disclosures in Part II, Item 1A.
Risk Factors in subsequent Quarterly Reports on Form 10-Q.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101330521/en/
MEDIA CONTACT: media@williams.com (800) 945-8723
INVESTOR CONTACTS: Danilo Juvane (918) 573-5075
Caroline Sardella (918) 230-9992
Williams Companies (NYSE:WMB)
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