Delaware | 1-4174 | 73-0569878 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
One Williams Center Tulsa, Oklahoma | 74172-0172 |
(Address of principal executive offices) | (Zip Code) |
Emerging growth company ¨ |
(a) | None |
(b) | None |
(c) | None |
(d) | Exhibits. |
THE WILLIAMS COMPANIES, INC. | |||
Dated: | May 2, 2018 | By: | /s/ JOHN D. CHANDLER |
John D. Chandler | |||
Senior Vice President and Chief Financial Officer |
News Release | Williams (NYSE: WMB) One Williams Center Tulsa, OK 74172 800-Williams www.williams.com | |
MEDIA CONTACT: | INVESTOR CONTACT: | ||
Keith Isbell (918) 573-7308 | Brett Krieg (918) 573-4614 |
• | 1Q 2018 Net Income of $152 Million |
• | 1Q 2018 Adjusted EBITDA of $1.135 Billion |
• | All Three of Williams Partners' Current Business Segments Improved Year-Over-Year Adjusted EBITDA |
• | In 2018, Williams Partners Has Set One- and Three-Day Delivery Records on Transco and Established Three New Volume Records on Susquehanna Supply Hub |
• | Williams Analyst Day Set for May 17 |
Williams Summary Financial Information | 1Q | |||||
Amounts in millions, except per-share amounts. Per share amounts are reported on a diluted basis. All amounts are attributable to The Williams Companies, Inc. | 2018 | 2017 | ||||
GAAP Measures | ||||||
Cash Flow from Operations | $694 | $727 | ||||
Net income (loss) | $152 | $373 | ||||
Net income (loss) per share | $0.18 | $0.45 | ||||
Non-GAAP Measures (1) | ||||||
Adjusted income | $159 | $119 | ||||
Adjusted income per share | $0.19 | $0.14 | ||||
Adjusted EBITDA | $1,135 | $1,145 | ||||
Cash Flow available for Dividends and other uses | $371 | $380 | ||||
Dividend Coverage Ratio | 1.32 | x | 1.53 | x | ||
(1) Schedules reconciling adjusted income from continuing operations, adjusted EBITDA, Cash Available for Dividends and Dividend Coverage Ratio (non-GAAP measures) are available at www.williams.com and as an attachment to this news release. |
Williams | Modified and Adjusted EBITDA | ||||||||||||||||||
Amounts in millions | 1Q 2018 | 1Q 2017 | |||||||||||||||||
Modified EBITDA | Adjust. | Adjusted EBITDA | Modified EBITDA | Adjust. | Adjusted EBITDA | ||||||||||||||
Williams Partners | $1,107 | $15 | $1,122 | $1,132 | ($15 | ) | $1,117 | ||||||||||||
Other | 13 | — | 13 | 18 | 10 | 28 | |||||||||||||
Totals | $1,120 | $15 | $1,135 | $1,150 | ($5 | ) | $1,145 | ||||||||||||
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. |
• | Expected levels of cash distributions by Williams Partners L.P. (WPZ) with respect to limited partner interests; |
• | Levels of dividends to Williams stockholders; |
• | Future credit ratings of Williams, WPZ, and their affiliates; |
• | Amounts and nature of future capital expenditures; |
• | Expansion and growth of our business and operations; |
• | 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 and natural gas liquids prices, supply, and demand; |
• | Demand for our services. |
• | Whether WPZ will produce sufficient cash flows to provide expected levels of cash distributions; |
• | Whether we are able to pay current and expected levels of dividends; |
• | Whether WPZ elects to pay expected levels of cash distributions and we elect to pay expected levels of dividends; |
• | Whether we will be able to effectively execute our financing plan; |
• | Availability of supplies, including lower than anticipated volumes from third parties served by our business, and market demand; |
• | Volatility of pricing including the effect of lower than anticipated energy commodity prices and margins; |
• | 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); |
• | The strength and financial resources of our competitors and the effects of competition; |
• | Whether we are able to successfully identify, evaluate and timely execute our capital projects and other investment opportunities in accordance with our forecasted capital expenditures budget; |
• | Our ability to successfully expand our facilities and operations; |
• | Development and rate of adoption of alternative energy sources; |
• | The impact of operational and developmental hazards, unforeseen interruptions, and the availability of adequate insurance coverage; |
• | The impact of existing and future laws (including, but not limited to, the Tax Cuts and Jobs Act of 2017), regulations (including, but not limited to, the FERC's "Revised Policy Statement on Treatment of Income Taxes" in Docket No. PL17-1-000), the regulatory environment, environmental liabilities, and litigation, as well as our ability to obtain necessary permits and approvals, and achieve favorable rate proceeding outcomes; |
• | Our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans; |
• | Changes in maintenance and construction costs; |
• | Changes in the current geopolitical situation; |
• | Our exposure to the credit risk of our customers and counterparties; |
• | Risks related to financing, including restrictions stemming from debt agreements, future changes in credit ratings as determined by nationally-recognized credit rating agencies and the availability and cost of capital; |
• | The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate; |
• | Risks associated with weather and natural phenomena, including climate conditions and physical damage to our facilities; |
• | Acts of terrorism, including cybersecurity threats, and related disruptions; |
• | Additional risks described in our filings with the Securities and Exchange Commission (SEC). |
Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income | |||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||
2017 | 2018 | ||||||||||||||||||
(Dollars in millions, except per-share amounts) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | |||||||||||||
Income (loss) attributable to The Williams Companies, Inc. available to common stockholders | $ | 373 | $ | 81 | $ | 33 | $ | 1,687 | $ | 2,174 | $ | 152 | |||||||
Income (loss) - diluted earnings (loss) per common share | $ | .45 | $ | .10 | $ | .04 | $ | 2.03 | $ | 2.62 | $ | .18 | |||||||
Adjustments: | |||||||||||||||||||
Williams Partners | |||||||||||||||||||
Estimated minimum volume commitments | $ | 15 | $ | 15 | $ | 18 | $ | (48 | ) | $ | — | $ | — | ||||||
Impairment of certain assets | — | — | 1,142 | 9 | 1,151 | — | |||||||||||||
Ad valorem obligation timing adjustment | — | — | 7 | — | 7 | — | |||||||||||||
Organizational realignment-related costs | 4 | 6 | 6 | 2 | 18 | — | |||||||||||||
(Gain) loss related to Canada disposition | (3 | ) | (1 | ) | 4 | 4 | 4 | — | |||||||||||
Severance and related costs | 9 | 4 | 5 | 4 | 22 | — | |||||||||||||
Constitution Pipeline project development costs | 2 | 6 | 4 | 4 | 16 | 2 | |||||||||||||
ACMP Merger and transition costs | — | 4 | 3 | 4 | 11 | — | |||||||||||||
Share of impairment at equity-method investments | — | — | 1 | — | 1 | — | |||||||||||||
(Gain) loss on asset retirement | — | — | (5 | ) | 5 | — | — | ||||||||||||
Geismar Incident adjustments | (9 | ) | 2 | 8 | (1 | ) | — | — | |||||||||||
Gain on sale of Geismar Interest | — | — | (1,095 | ) | — | (1,095 | ) | — | |||||||||||
Gains from contract settlements and terminations | (13 | ) | (2 | ) | — | — | (15 | ) | — | ||||||||||
Accrual for loss contingency | 9 | — | — | — | 9 | — | |||||||||||||
(Gain) loss on early retirement of debt | (30 | ) | — | 3 | — | (27 | ) | 7 | |||||||||||
Gain on sale of RGP Splitter | — | (12 | ) | — | — | (12 | ) | — | |||||||||||
Settlement charge from pension early payout program | — | — | — | 35 | 35 | — | |||||||||||||
Regulatory charges resulting from Tax Reform | — | — | — | 713 | 713 | 4 | |||||||||||||
Share of regulatory charges resulting from Tax Reform for equity-method investments | — | — | — | 11 | 11 | 2 | |||||||||||||
Expenses associated with Financial Repositioning | — | 2 | — | — | 2 | — | |||||||||||||
Expenses associated with strategic asset monetizations | 1 | 4 | — | — | 5 | — | |||||||||||||
Total Williams Partners adjustments | (15 | ) | 28 | 101 | 742 | 856 | 15 | ||||||||||||
Other | |||||||||||||||||||
Impairment of certain assets | — | 23 | 68 | — | 91 | — | |||||||||||||
Loss related to Canada disposition | 1 | — | — | 1 | 2 | — | |||||||||||||
Expenses associated with strategic alternatives | 1 | 3 | 5 | — | 9 | — | |||||||||||||
Settlement charge from pension early payout program | — | — | — | 36 | 36 | — | |||||||||||||
Regulatory charges resulting from Tax Reform | — | — | — | 63 | 63 | — | |||||||||||||
Expenses associated with Financial Repositioning | 8 | — | — | — | 8 | — | |||||||||||||
Total Other adjustments | 10 | 26 | 73 | 100 | 209 | — | |||||||||||||
Adjustments included in Modified EBITDA | (5 | ) | 54 | 174 | 842 | 1,065 | 15 | ||||||||||||
Adjustments below Modified EBITDA | |||||||||||||||||||
Gain on disposition of equity-method investment - Williams Partners | (269 | ) | — | — | — | (269 | ) | — | |||||||||||
Accelerated depreciation by equity-method investments | — | — | — | 9 | 9 | — | |||||||||||||
Change in depreciable life associated with organizational realignment - Williams Partners | (7 | ) | — | — | — | (7 | ) | — | |||||||||||
Allocation of adjustments to noncontrolling interests | 77 | (10 | ) | (28 | ) | (199 | ) | (160 | ) | (5 | ) | ||||||||
(199 | ) | (10 | ) | (28 | ) | (190 | ) | (427 | ) | (5 | ) | ||||||||
Total adjustments | (204 | ) | 44 | 146 | 652 | 638 | 10 | ||||||||||||
Less tax effect for above items | 77 | (17 | ) | (55 | ) | (246 | ) | (241 | ) | (3 | ) | ||||||||
Adjustments for tax-related items (1) | (127 | ) | — | — | (1,923 | ) | (2,050 | ) | — | ||||||||||
Adjusted income available to common stockholders | $ | 119 | $ | 108 | $ | 124 | $ | 170 | $ | 521 | $ | 159 | |||||||
Adjusted diluted earnings per common share (2) | $ | .14 | $ | .13 | $ | .15 | $ | .20 | $ | .63 | $ | .19 | |||||||
Weighted-average shares - diluted (thousands) | 826,476 | 828,575 | 829,368 | 829,607 | 828,518 | 830,197 | |||||||||||||
(1) The first quarter of 2017 includes an unfavorable adjustment related to the release of a valuation allowance. The fourth quarter of 2017 includes an unfavorable adjustment to reverse the tax benefit associated with remeasuring our deferred tax balances at a lower corporate rate resulting from Tax Reform. | |||||||||||||||||||
(2) 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. |
Reconciliation of "Net Income (Loss)" to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA” | |||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||
2017 | 2018 | ||||||||||||||||||
(Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | |||||||||||||
Net income (loss) | $ | 569 | $ | 193 | $ | 125 | $ | 1,622 | $ | 2,509 | $ | 270 | |||||||
Provision (benefit) for income taxes | 37 | 65 | 24 | (2,100 | ) | (1,974 | ) | 55 | |||||||||||
Interest expense | 280 | 271 | 267 | 265 | 1,083 | 273 | |||||||||||||
Equity (earnings) losses | (107 | ) | (125 | ) | (115 | ) | (87 | ) | (434 | ) | (82 | ) | |||||||
Other investing (income) loss - net | (272 | ) | (2 | ) | (4 | ) | (4 | ) | (282 | ) | (4 | ) | |||||||
Proportional Modified EBITDA of equity-method investments | 194 | 215 | 202 | 184 | 795 | 169 | |||||||||||||
Depreciation and amortization expenses | 442 | 433 | 433 | 428 | 1,736 | 431 | |||||||||||||
Accretion expense associated with asset retirement obligations for nonregulated operations | 7 | 9 | 7 | 10 | 33 | 8 | |||||||||||||
Modified EBITDA | $ | 1,150 | $ | 1,059 | $ | 939 | $ | 318 | $ | 3,466 | $ | 1,120 | |||||||
Williams Partners | $ | 1,132 | $ | 1,076 | $ | 1,000 | $ | 408 | $ | 3,616 | $ | 1,107 | |||||||
Other | 18 | (17 | ) | (61 | ) | (90 | ) | (150 | ) | 13 | |||||||||
Total Modified EBITDA | $ | 1,150 | $ | 1,059 | $ | 939 | $ | 318 | $ | 3,466 | $ | 1,120 | |||||||
Adjustments included in Modified EBITDA (1): | |||||||||||||||||||
Williams Partners | $ | (15 | ) | $ | 28 | $ | 101 | $ | 742 | $ | 856 | $ | 15 | ||||||
Other | 10 | 26 | 73 | 100 | 209 | — | |||||||||||||
Total Adjustments included in Modified EBITDA | $ | (5 | ) | $ | 54 | $ | 174 | $ | 842 | $ | 1,065 | $ | 15 | ||||||
Adjusted EBITDA: | |||||||||||||||||||
Williams Partners | $ | 1,117 | $ | 1,104 | $ | 1,101 | $ | 1,150 | $ | 4,472 | $ | 1,122 | |||||||
Other | 28 | 9 | 12 | 10 | 59 | 13 | |||||||||||||
Total Adjusted EBITDA | $ | 1,145 | $ | 1,113 | $ | 1,113 | $ | 1,160 | $ | 4,531 | $ | 1,135 | |||||||
(1) Adjustments by segment are detailed in the "Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income," which is also included in these materials. |
Dividend Coverage Ratio | |||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||
2017 | 2018 | ||||||||||||||||||
(Dollars in millions, except per share amounts) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | |||||||||||||
Distributions from WPZ (accrued / “as declared” basis) | $ | 421 | $ | 421 | $ | 421 | $ | 421 | $ | 1,684 | $ | 431 | |||||||
Other Segment Adjusted EBITDA | 28 | 9 | 12 | 10 | 59 | 13 | |||||||||||||
Corporate interest | (66 | ) | (65 | ) | (66 | ) | (64 | ) | (261 | ) | (64 | ) | |||||||
Subtotal | 383 | 365 | 367 | 367 | 1,482 | 380 | |||||||||||||
WMB cash tax rate | 0 | % | 0 | % | 2 | % | 2 | % | 1 | % | 0 | % | |||||||
WMB cash taxes (excludes cash taxes paid by WPZ) | — | — | (7 | ) | (9 | ) | (16 | ) | — | ||||||||||
Other Segment Maintenance Capital | (3 | ) | (5 | ) | (5 | ) | (9 | ) | (22 | ) | (9 | ) | |||||||
WMB cash available for dividends and other uses (1) | $ | 380 | $ | 360 | $ | 355 | $ | 349 | $ | 1,444 | $ | 371 | |||||||
WMB dividends paid | (248 | ) | (248 | ) | (248 | ) | (248 | ) | (992 | ) | (281 | ) | |||||||
Excess cash available after dividends | $ | 132 | $ | 112 | $ | 107 | $ | 101 | $ | 452 | $ | 90 | |||||||
Dividend per share | $ | 0.3000 | $ | 0.3000 | $ | 0.3000 | $ | 0.3000 | $ | 1.2000 | $ | 0.3400 | |||||||
Coverage ratio (2) | 1.53 | 1.45 | 1.43 | 1.41 | 1.46 | 1.32 | |||||||||||||
(1) Effective with the first quarter of 2018, Williams increased its regular dividend from $0.30 per share to $0.34 per share. | |||||||||||||||||||
(2) WMB cash available for dividends and other uses / WMB dividends paid. |
Non-GAAP Reconciliations, | ||
Financial Highlights, and Operating Statistics | ||
(UNAUDITED) | ||
Final | ||
March 31, 2018 | ||
Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income | |||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||
2017 | 2018 | ||||||||||||||||||
(Dollars in millions, except per-share amounts) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | |||||||||||||
Income (loss) attributable to The Williams Companies, Inc. available to common stockholders | $ | 373 | $ | 81 | $ | 33 | $ | 1,687 | $ | 2,174 | $ | 152 | |||||||
Income (loss) - diluted earnings (loss) per common share | $ | .45 | $ | .10 | $ | .04 | $ | 2.03 | $ | 2.62 | $ | .18 | |||||||
Adjustments: | |||||||||||||||||||
Williams Partners | |||||||||||||||||||
Estimated minimum volume commitments | $ | 15 | $ | 15 | $ | 18 | $ | (48 | ) | $ | — | $ | — | ||||||
Impairment of certain assets | — | — | 1,142 | 9 | 1,151 | — | |||||||||||||
Ad valorem obligation timing adjustment | — | — | 7 | — | 7 | — | |||||||||||||
Organizational realignment-related costs | 4 | 6 | 6 | 2 | 18 | — | |||||||||||||
(Gain) loss related to Canada disposition | (3 | ) | (1 | ) | 4 | 4 | 4 | — | |||||||||||
Severance and related costs | 9 | 4 | 5 | 4 | 22 | — | |||||||||||||
Constitution Pipeline project development costs | 2 | 6 | 4 | 4 | 16 | 2 | |||||||||||||
ACMP Merger and transition costs | — | 4 | 3 | 4 | 11 | — | |||||||||||||
Share of impairment at equity-method investments | — | — | 1 | — | 1 | — | |||||||||||||
(Gain) loss on asset retirement | — | — | (5 | ) | 5 | — | — | ||||||||||||
Geismar Incident adjustments | (9 | ) | 2 | 8 | (1 | ) | — | — | |||||||||||
Gain on sale of Geismar Interest | — | — | (1,095 | ) | — | (1,095 | ) | — | |||||||||||
Gains from contract settlements and terminations | (13 | ) | (2 | ) | — | — | (15 | ) | — | ||||||||||
Accrual for loss contingency | 9 | — | — | — | 9 | — | |||||||||||||
(Gain) loss on early retirement of debt | (30 | ) | — | 3 | — | (27 | ) | 7 | |||||||||||
Gain on sale of RGP Splitter | — | (12 | ) | — | — | (12 | ) | — | |||||||||||
Settlement charge from pension early payout program | — | — | — | 35 | 35 | — | |||||||||||||
Regulatory charges resulting from Tax Reform | — | — | — | 713 | 713 | 4 | |||||||||||||
Share of regulatory charges resulting from Tax Reform for equity-method investments | — | — | — | 11 | 11 | 2 | |||||||||||||
Expenses associated with Financial Repositioning | — | 2 | — | — | 2 | — | |||||||||||||
Expenses associated with strategic asset monetizations | 1 | 4 | — | — | 5 | — | |||||||||||||
Total Williams Partners adjustments | (15 | ) | 28 | 101 | 742 | 856 | 15 | ||||||||||||
Other | |||||||||||||||||||
Impairment of certain assets | — | 23 | 68 | — | 91 | — | |||||||||||||
Loss related to Canada disposition | 1 | — | — | 1 | 2 | — | |||||||||||||
Expenses associated with strategic alternatives | 1 | 3 | 5 | — | 9 | — | |||||||||||||
Settlement charge from pension early payout program | — | — | — | 36 | 36 | — | |||||||||||||
Regulatory charges resulting from Tax Reform | — | — | — | 63 | 63 | — | |||||||||||||
Expenses associated with Financial Repositioning | 8 | — | — | — | 8 | — | |||||||||||||
Total Other adjustments | 10 | 26 | 73 | 100 | 209 | — | |||||||||||||
Adjustments included in Modified EBITDA | (5 | ) | 54 | 174 | 842 | 1,065 | 15 | ||||||||||||
Adjustments below Modified EBITDA | |||||||||||||||||||
Gain on disposition of equity-method investment - Williams Partners | (269 | ) | — | — | — | (269 | ) | — | |||||||||||
Accelerated depreciation by equity-method investments | — | — | — | 9 | 9 | — | |||||||||||||
Change in depreciable life associated with organizational realignment - Williams Partners | (7 | ) | — | — | — | (7 | ) | — | |||||||||||
Allocation of adjustments to noncontrolling interests | 77 | (10 | ) | (28 | ) | (199 | ) | (160 | ) | (5 | ) | ||||||||
(199 | ) | (10 | ) | (28 | ) | (190 | ) | (427 | ) | (5 | ) | ||||||||
Total adjustments | (204 | ) | 44 | 146 | 652 | 638 | 10 | ||||||||||||
Less tax effect for above items | 77 | (17 | ) | (55 | ) | (246 | ) | (241 | ) | (3 | ) | ||||||||
Adjustments for tax-related items (1) | (127 | ) | — | — | (1,923 | ) | (2,050 | ) | — | ||||||||||
Adjusted income available to common stockholders | $ | 119 | $ | 108 | $ | 124 | $ | 170 | $ | 521 | $ | 159 | |||||||
Adjusted diluted earnings per common share (2) | $ | .14 | $ | .13 | $ | .15 | $ | .20 | $ | .63 | $ | .19 | |||||||
Weighted-average shares - diluted (thousands) | 826,476 | 828,575 | 829,368 | 829,607 | 828,518 | 830,197 | |||||||||||||
(1) The first quarter of 2017 includes an unfavorable adjustment related to the release of a valuation allowance. The fourth quarter of 2017 includes an unfavorable adjustment to reverse the tax benefit associated with remeasuring our deferred tax balances at a lower corporate rate resulting from Tax Reform. | |||||||||||||||||||
(2) 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. |
Reconciliation of "Net Income (Loss)" to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA” | |||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||
2017 | 2018 | ||||||||||||||||||
(Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | |||||||||||||
Net income (loss) | $ | 569 | $ | 193 | $ | 125 | $ | 1,622 | $ | 2,509 | $ | 270 | |||||||
Provision (benefit) for income taxes | 37 | 65 | 24 | (2,100 | ) | (1,974 | ) | 55 | |||||||||||
Interest expense | 280 | 271 | 267 | 265 | 1,083 | 273 | |||||||||||||
Equity (earnings) losses | (107 | ) | (125 | ) | (115 | ) | (87 | ) | (434 | ) | (82 | ) | |||||||
Other investing (income) loss - net | (272 | ) | (2 | ) | (4 | ) | (4 | ) | (282 | ) | (4 | ) | |||||||
Proportional Modified EBITDA of equity-method investments | 194 | 215 | 202 | 184 | 795 | 169 | |||||||||||||
Depreciation and amortization expenses | 442 | 433 | 433 | 428 | 1,736 | 431 | |||||||||||||
Accretion expense associated with asset retirement obligations for nonregulated operations | 7 | 9 | 7 | 10 | 33 | 8 | |||||||||||||
Modified EBITDA | $ | 1,150 | $ | 1,059 | $ | 939 | $ | 318 | $ | 3,466 | $ | 1,120 | |||||||
Williams Partners | $ | 1,132 | $ | 1,076 | $ | 1,000 | $ | 408 | $ | 3,616 | $ | 1,107 | |||||||
Other | 18 | (17 | ) | (61 | ) | (90 | ) | (150 | ) | 13 | |||||||||
Total Modified EBITDA | $ | 1,150 | $ | 1,059 | $ | 939 | $ | 318 | $ | 3,466 | $ | 1,120 | |||||||
Adjustments included in Modified EBITDA (1): | |||||||||||||||||||
Williams Partners | $ | (15 | ) | $ | 28 | $ | 101 | $ | 742 | $ | 856 | $ | 15 | ||||||
Other | 10 | 26 | 73 | 100 | 209 | — | |||||||||||||
Total Adjustments included in Modified EBITDA | $ | (5 | ) | $ | 54 | $ | 174 | $ | 842 | $ | 1,065 | $ | 15 | ||||||
Adjusted EBITDA: | |||||||||||||||||||
Williams Partners | $ | 1,117 | $ | 1,104 | $ | 1,101 | $ | 1,150 | $ | 4,472 | $ | 1,122 | |||||||
Other | 28 | 9 | 12 | 10 | 59 | 13 | |||||||||||||
Total Adjusted EBITDA | $ | 1,145 | $ | 1,113 | $ | 1,113 | $ | 1,160 | $ | 4,531 | $ | 1,135 | |||||||
(1) Adjustments by segment are detailed in the "Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income," which is also included in these materials. |
Dividend Coverage Ratio | |||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||
2017 | 2018 | ||||||||||||||||||
(Dollars in millions, except per share amounts) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | |||||||||||||
Distributions from WPZ (accrued / “as declared” basis) | $ | 421 | $ | 421 | $ | 421 | $ | 421 | $ | 1,684 | $ | 431 | |||||||
Other Segment Adjusted EBITDA | 28 | 9 | 12 | 10 | 59 | 13 | |||||||||||||
Corporate interest | (66 | ) | (65 | ) | (66 | ) | (64 | ) | (261 | ) | (64 | ) | |||||||
Subtotal | 383 | 365 | 367 | 367 | 1,482 | 380 | |||||||||||||
WMB cash tax rate | 0 | % | 0 | % | 2 | % | 2 | % | 1 | % | 0 | % | |||||||
WMB cash taxes (excludes cash taxes paid by WPZ) | — | — | (7 | ) | (9 | ) | (16 | ) | — | ||||||||||
Other Segment Maintenance Capital | (3 | ) | (5 | ) | (5 | ) | (9 | ) | (22 | ) | (9 | ) | |||||||
WMB cash available for dividends and other uses (1) | $ | 380 | $ | 360 | $ | 355 | $ | 349 | $ | 1,444 | $ | 371 | |||||||
WMB dividends paid | (248 | ) | (248 | ) | (248 | ) | (248 | ) | (992 | ) | (281 | ) | |||||||
Excess cash available after dividends | $ | 132 | $ | 112 | $ | 107 | $ | 101 | $ | 452 | $ | 90 | |||||||
Dividend per share | $ | 0.3000 | $ | 0.3000 | $ | 0.3000 | $ | 0.3000 | $ | 1.2000 | $ | 0.3400 | |||||||
Coverage ratio (2) | 1.53 | 1.45 | 1.43 | 1.41 | 1.46 | 1.32 | |||||||||||||
(1) Effective with the first quarter of 2018, Williams increased its regular dividend from $0.30 per share to $0.34 per share. | |||||||||||||||||||
(2) WMB cash available for dividends and other uses / WMB dividends paid. |
Consolidated Statement of Operations | |||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||
2017 (2) | 2018 | ||||||||||||||||||
(Dollars in millions, except per-share amounts) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | |||||||||||||
Revenues: | |||||||||||||||||||
Service revenues | $ | 1,261 | $ | 1,282 | $ | 1,310 | $ | 1,459 | $ | 5,312 | $ | 1,351 | |||||||
Service revenues - commodity consideration (3) | — | — | — | — | — | 101 | |||||||||||||
Product sales | 727 | 642 | 581 | 769 | 2,719 | 636 | |||||||||||||
Total revenues | 1,988 | 1,924 | 1,891 | 2,228 | 8,031 | 2,088 | |||||||||||||
Costs and expenses: | |||||||||||||||||||
Product costs | 579 | 537 | 504 | 680 | 2,300 | 613 | |||||||||||||
Processing commodity expenses (3) | — | — | — | — | — | 35 | |||||||||||||
Operating and maintenance expenses | 371 | 392 | 403 | 410 | 1,576 | 357 | |||||||||||||
Depreciation and amortization expenses | 442 | 433 | 433 | 428 | 1,736 | 431 | |||||||||||||
Selling, general, and administrative expenses | 161 | 153 | 138 | 142 | 594 | 132 | |||||||||||||
Impairment of certain assets | 1 | 25 | 1,210 | 12 | 1,248 | — | |||||||||||||
Gain on sale of Geismar Interest | — | — | (1,095 | ) | — | (1,095 | ) | — | |||||||||||
Regulatory charges resulting from Tax Reform | — | — | — | 674 | 674 | — | |||||||||||||
Other (income) expense - net | 4 | 6 | 24 | 37 | 71 | 29 | |||||||||||||
Total costs and expenses | 1,558 | 1,546 | 1,617 | 2,383 | 7,104 | 1,597 | |||||||||||||
Operating income (loss) | 430 | 378 | 274 | (155 | ) | 927 | 491 | ||||||||||||
Equity earnings (losses) | 107 | 125 | 115 | 87 | 434 | 82 | |||||||||||||
Other investing income (loss) - net | 272 | 2 | 4 | 4 | 282 | 4 | |||||||||||||
Interest incurred | (287 | ) | (280 | ) | (275 | ) | (274 | ) | (1,116 | ) | (282 | ) | |||||||
Interest capitalized | 7 | 9 | 8 | 9 | 33 | 9 | |||||||||||||
Other income (expense) - net | 77 | 24 | 23 | (149 | ) | (25 | ) | 21 | |||||||||||
Income (loss) before income taxes | 606 | 258 | 149 | (478 | ) | 535 | 325 | ||||||||||||
Provision (benefit) for income taxes | 37 | 65 | 24 | (2,100 | ) | (1,974 | ) | 55 | |||||||||||
Net income (loss) | 569 | 193 | 125 | 1,622 | 2,509 | 270 | |||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | 196 | 112 | 92 | (65 | ) | 335 | 118 | ||||||||||||
Net income (loss) attributable to The Williams Companies, Inc. | $ | 373 | $ | 81 | $ | 33 | $ | 1,687 | $ | 2,174 | $ | 152 | |||||||
Diluted earnings (loss) per common share: | |||||||||||||||||||
Net income (loss) (1) | $ | .45 | $ | .10 | $ | .04 | $ | 2.03 | $ | 2.62 | $ | .18 | |||||||
Weighted-average number of shares (thousands) | 826,476 | 828,575 | 829,368 | 829,607 | 828,518 | 830,197 | |||||||||||||
Common shares outstanding at end of period (thousands) | 826,239 | 826,398 | 826,723 | 826,836 | 826,836 | 827,607 | |||||||||||||
Market price per common share (end of period) | $ | 29.59 | $ | 30.28 | $ | 30.01 | $ | 30.49 | $ | 30.49 | $ | 24.86 | |||||||
Cash dividends declared per share | $ | .30 | $ | .30 | $ | .30 | $ | .30 | $ | 1.20 | $ | .34 | |||||||
(1) The sum of earnings (loss) per share for the quarters may not equal the total earnings (loss) per share for the year due to changes in the weighted-average number of common shares outstanding. | |||||||||||||||||||
(2) Recast for ASU 2017-07 "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost", effective January 1, 2018. | |||||||||||||||||||
(3) Line items are new in conjunction with the implementation of Accounting Standard Codification Topic 606, "Revenue from Contracts with Customers" (ASC 606). |
Williams Partners | |||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||
2017 | 2018 | ||||||||||||||||||
(Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | |||||||||||||
Revenues: | |||||||||||||||||||
Service revenues | $ | 1,256 | $ | 1,277 | $ | 1,304 | $ | 1,455 | $ | 5,292 | $ | 1,346 | |||||||
Service revenues - commodity consideration (1) | — | — | — | — | — | $ | 101 | ||||||||||||
Product sales | 727 | 642 | 581 | 768 | 2,718 | 636 | |||||||||||||
Total revenues | 1,983 | 1,919 | 1,885 | 2,223 | 8,010 | 2,083 | |||||||||||||
Segment costs and expenses: | |||||||||||||||||||
Product costs | 579 | 537 | 504 | 680 | 2,300 | 613 | |||||||||||||
Processing commodity expenses (1) | — | — | — | — | — | 35 | |||||||||||||
Operating and maintenance expenses | 353 | 376 | 387 | 414 | 1,530 | 343 | |||||||||||||
Selling, general, and administrative expenses | 156 | 154 | 140 | 160 | 610 | 138 | |||||||||||||
Impairment of certain assets | 1 | 2 | 1,142 | 11 | 1,156 | — | |||||||||||||
Gain on sale of Geismar Interest | — | — | (1,095 | ) | — | (1,095 | ) | — | |||||||||||
Regulatory charges resulting from Tax Reform | — | — | — | 713 | 713 | 4 | |||||||||||||
Other segment costs and expenses | (44 | ) | (11 | ) | 9 | 21 | (25 | ) | 12 | ||||||||||
Total segment costs and expenses | 1,045 | 1,058 | 1,087 | 1,999 | 5,189 | 1,145 | |||||||||||||
Proportional Modified EBITDA of equity-method investments | 194 | 215 | 202 | 184 | 795 | 169 | |||||||||||||
Modified EBITDA | 1,132 | 1,076 | 1,000 | 408 | 3,616 | 1,107 | |||||||||||||
Adjustments | (15 | ) | 28 | 101 | 742 | 856 | $ | 15 | |||||||||||
Adjusted EBITDA | $ | 1,117 | $ | 1,104 | $ | 1,101 | $ | 1,150 | $ | 4,472 | $ | 1,122 | |||||||
Statistics for Operated Assets | |||||||||||||||||||
Interstate Transmission | |||||||||||||||||||
Throughput (Tbtu) | 1,158.1 | 1,053.0 | 1,094.9 | 1,226.6 | 4,532.6 | 1,326.0 | |||||||||||||
Avg. daily transportation volumes (Tbtu) | 12.8 | 11.6 | 11.9 | 13.4 | 12.5 | 14.7 | |||||||||||||
Avg. daily firm reserved capacity (Tbtu) | 15.8 | 16.2 | 17.1 | 17.9 | 16.8 | 18.4 | |||||||||||||
Gathering and Processing | |||||||||||||||||||
Gathering volumes (Bcf per day) - Consolidated (2) | 7.86 | 7.98 | 8.20 | 8.54 | 8.15 | 8.26 | |||||||||||||
Gathering volumes (Bcf per day) - Non-consolidated (3) | 4.10 | 4.12 | 3.87 | 3.89 | 3.99 | 4.06 | |||||||||||||
Plant inlet natural gas volumes (Bcf per day) - Consolidated (2) | 2.92 | 2.98 | 3.08 | 3.22 | 3.05 | 3.18 | |||||||||||||
Plant inlet natural gas volumes (Bcf per day) - Non-consolidated (3) | 0.54 | 0.53 | 0.39 | 0.27 | 0.43 | 0.24 | |||||||||||||
Consolidated (2) | |||||||||||||||||||
Ethane margin ($/gallon) | $ | .03 | $ | .01 | $ | .03 | $ | .03 | $ | .03 | $ | .01 | |||||||
Non-ethane margin ($/gallon) | $ | .45 | $ | .41 | $ | .45 | $ | .63 | $ | .48 | $ | .68 | |||||||
NGL margin ($/gallon) | $ | .33 | $ | .25 | $ | .29 | $ | .41 | $ | .32 | $ | .35 | |||||||
Ethane equity sales (Mbbls/d) | 11 | 17 | 17 | 15 | 15 | 23 | |||||||||||||
Non-ethane equity sales (Mbbls/d) | 29 | 26 | 25 | 25 | 26 | 25 | |||||||||||||
NGL equity sales (Mbbls/d) | 40 | 43 | 42 | 40 | 41 | 48 | |||||||||||||
Ethane production (Mbbls/d) | 40 | 53 | 49 | 62 | 51 | 65 | |||||||||||||
Non-ethane production (Mbbls/d) | 90 | 93 | 99 | 104 | 97 | 102 | |||||||||||||
NGL production (Mbbls/d) | 130 | 146 | 148 | 166 | 148 | 167 | |||||||||||||
Non-consolidated (3) | |||||||||||||||||||
NGL equity sales (Mbbls/d) | 5 | 4 | 5 | 4 | 5 | 3 | |||||||||||||
NGL production (Mbbls/d) | 21 | 22 | 22 | 19 | 21 | 18 | |||||||||||||
Petrochemical Services | |||||||||||||||||||
Geismar ethylene sales volumes (million lbs) | 266 | 300 | — | — | 566 | — | |||||||||||||
Geismar ethylene margin ($/lb) (4) | $ | .19 | $ | .13 | $ | — | $ | — | $ | .16 | $ | — | |||||||
Overland Pipeline Company (3) | |||||||||||||||||||
NGL transportation volumes (Mbbls) | 18,338 | 20,558 | 21,015 | 21,425 | 81,336 | 21,263 | |||||||||||||
(1) Line items are new in conjunction with the implementation of ASC 606. | |||||||||||||||||||
(2) Excludes volumes associated with equity-method investments that are not consolidated for financial reporting purposes. | |||||||||||||||||||
(3) Includes 100% of the volumes associated with operated equity-method investments. | |||||||||||||||||||
(4) Ethylene margin and ethylene margin per pound are calculated using financial results determined in accordance with GAAP, which include realized ethylene sales prices and ethylene COGS. Realized sales and COGS per unit metrics may vary from publicly quoted market indices or spot prices due to various factors, including, but not limited to, basis differentials, transportation costs, contract provisions, and inventory accounting methods. The Geismar operations were sold in July 2017. |
Capital Expenditures and Investments | |||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||
2017 | 2018 | ||||||||||||||||||
(Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | |||||||||||||
Capital expenditures: | |||||||||||||||||||
Williams Partners | $ | 509 | $ | 540 | $ | 638 | $ | 687 | $ | 2,374 | $ | 948 | |||||||
Other | 2 | 5 | 6 | 12 | 25 | 9 | |||||||||||||
Total (1) | $ | 511 | $ | 545 | $ | 644 | $ | 699 | $ | 2,399 | $ | 957 | |||||||
Purchases of investments: | |||||||||||||||||||
Williams Partners | $ | 52 | $ | 27 | $ | 24 | $ | 29 | $ | 132 | $ | 21 | |||||||
Other | — | — | — | — | — | — | |||||||||||||
Total | $ | 52 | $ | 27 | $ | 24 | $ | 29 | $ | 132 | $ | 21 | |||||||
Summary: | |||||||||||||||||||
Williams Partners | $ | 561 | $ | 567 | $ | 662 | $ | 716 | $ | 2,506 | $ | 969 | |||||||
Other | 2 | 5 | 6 | 12 | 25 | 9 | |||||||||||||
Total | $ | 563 | $ | 572 | $ | 668 | $ | 728 | $ | 2,531 | $ | 978 | |||||||
Capital expenditures incurred and purchases of investments: | |||||||||||||||||||
Increases to property, plant, and equipment | $ | 569 | $ | 591 | $ | 666 | $ | 836 | $ | 2,662 | $ | 934 | |||||||
Purchases of investments | 52 | 27 | 24 | 29 | 132 | 21 | |||||||||||||
Total | $ | 621 | $ | 618 | $ | 690 | $ | 865 | $ | 2,794 | $ | 955 | |||||||
(1) Increases to property, plant, and equipment | $ | 569 | $ | 591 | $ | 666 | $ | 836 | $ | 2,662 | $ | 934 | |||||||
Changes in related accounts payable and accrued liabilities | (58 | ) | (46 | ) | (22 | ) | (137 | ) | (263 | ) | 23 | ||||||||
Capital expenditures | $ | 511 | $ | 545 | $ | 644 | $ | 699 | $ | 2,399 | $ | 957 | |||||||
Depreciation and Amortization and Other Selected Financial Data | |||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||
2017 | 2018 | ||||||||||||||||||
(Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | |||||||||||||
Depreciation and amortization: | |||||||||||||||||||
Williams Partners | $ | 433 | $ | 423 | $ | 424 | $ | 420 | $ | 1,700 | $ | 423 | |||||||
Other | 9 | 10 | 9 | 8 | 36 | 8 | |||||||||||||
Total | $ | 442 | $ | 433 | $ | 433 | $ | 428 | $ | 1,736 | $ | 431 | |||||||
Other selected financial data: | |||||||||||||||||||
Cash and cash equivalents | $ | 639 | $ | 1,918 | $ | 1,172 | $ | 899 | $ | 1,292 | |||||||||
Total assets | $ | 47,512 | $ | 48,770 | $ | 46,120 | $ | 46,352 | $ | 47,052 | |||||||||
Capital structure: | |||||||||||||||||||
Debt | |||||||||||||||||||
Current | $ | — | $ | 1,951 | $ | 502 | $ | 501 | $ | 501 | |||||||||
Noncurrent | $ | 21,825 | $ | 21,325 | $ | 20,567 | $ | 20,434 | $ | 21,379 | |||||||||
Stockholders’ equity | $ | 8,444 | $ | 8,306 | $ | 8,109 | $ | 9,656 | $ | 9,473 | |||||||||
Debt to debt-plus-stockholders’ equity ratio | 72.1 | % | 73.7 | % | 72.2 | % | 68.4 | % | 69.8 | % | |||||||||
Cash distributions received from limited partner interest in Williams Partners L.P. | $ | 597 | $ | 421 | $ | 422 | $ | 421 | $ | 1,861 | $ | 421 | |||||||
WMB Dividend Coverage Ratio | |||
2018 | |||
(Dollars in billions, except per share amounts) | Guidance | ||
Distributions from WPZ (accrued / “as declared” basis) | $ | 1.800 | |
Other Segment Adjusted EBITDA | 0.025 | ||
Corporate interest | (0.250 | ) | |
Subtotal | $ | 1.575 | |
WMB cash tax rate | 0.0 | % | |
WMB cash taxes (excludes cash taxes paid by WPZ) | — | ||
Other Segment Maintenance Capital | (0.050 | ) | |
WMB cash available for dividends and other uses | $ | 1.525 | |
WMB dividends paid | (1.125 | ) | |
Excess cash available after dividends | $ | 0.400 | |
Dividend per share | $ | 1.36 | |
Coverage ratio (1) | 1.36 | x | |
Memo: | |||
WMB Economic Interest in WPZ Cash Coverage - Guidance Midpoint (2) | $ | 0.445 | |
WMB cash available for dividends and other uses | 1.525 | ||
WMB Economic Distributable Cash Flow (3) | $ | 1.970 | |
Economic coverage ratio (4) | 1.75 | x | |
Notes: | |||
WMB does not expect to be a U.S. federal income cash taxpayer through at least 2021, excluding taxes on any potential asset monetizations. | |||
(1) WMB cash available for dividends and other uses / WMB dividends paid | |||
(2) WMB pro rata share (~74%) of WPZ Distributable cash flow in excess of Total cash distributed | |||
(3) WMB Economic Interest in WPZ Cash Coverage + WMB cash available for dividends and other uses | |||
(4) WMB Economic Distributable Cash Flow / WMB dividends paid | |||