WMB
$30.46
Williams Companies
($.25)
(.81%)
Earnings Details
2nd Quarter June 2022
Monday, August 1, 2022 4:15:00 PM
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Summary

Williams Companies Misses

Williams Companies (WMB) reported 2nd Quarter June 2022 earnings of $0.40 per share on revenue of $2.5 billion. The consensus earnings estimate was $0.37 per share on revenue of $2.8 billion. The Earnings Whisper number was $0.41 per share. Revenue grew 9.1% on a year-over-year basis.

The company said it now expects 2022 Adjusted EBITDA of $6.10 billion to $6.40 billion. The company's previous guidance was EBITDA of $5.90 billion to $6.20 billion for the year ending December 31, 2022.

Williams Companies Inc is an energy infrastructure company focused on connecting North America’s hydrocarbon resource plays to growing markets for natural gas, NGLs, and olefins.

Results
Reported Earnings
$0.40
Earnings Whisper
$0.41
Consensus Estimate
$0.37
Reported Revenue
$2.49 Bil
Revenue Estimate
$2.79 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Williams Reports Strong Second-Quarter Results; Announces Another 2022 Guidance Increase

TULSA, Okla.--(BUSINESS WIRE)--Williams (NYSE: WMB) today announced its unaudited financial results for the three and six months ended June 30, 2022.

Natural gas market fundamentals drive growth across key financial metrics

  • GAAP net income of $400 million, or $0.33 per diluted share – up 32% vs. 2Q 2021
  • Adjusted net income of $484 million, or $0.40 per diluted share (Adjusted EPS) – up 48% vs. 2Q 2021
  • Adjusted EBITDA of $1.496 billion – up $179 million or 14% vs. 2Q 2021
  • Cash flow from operations (CFFO) of $1.098 billion – up $41 million or 4% vs. 2Q 2021
  • Available funds from operations (AFFO) of $1.130 billion – up $211 million or 23% vs. 2Q 2021
  • Dividend coverage ratio of 2.19x (AFFO basis)
  • Raising 2022 Adjusted EBITDA guidance again with midpoint of $6.25 billion; expect 11% Adjusted EBITDA year-over-year growth in 2022, yielding 7% CAGR over the last five years

Steadfast execution and focus on sustainable operations position company for future opportunities

  • Reached final investment decision on Louisiana Energy Gateway pipeline project to advance wellhead to water strategy
  • Completed Gulfstream Phase VI expansion; executing slate of projects on Transco, Northeast G&P and Deepwater Gulf of Mexico
  • Strong operational performance with gathering volumes of 17 Bcf/d and transmission volumes of 16.9 Bcf/d – up 13% and 2%, respectively from 2Q 2021
  • Closed on acquisition of Trace Midstream gathering assets in Haynesville
  • Reached rate case settlement in principle with Northwest Pipeline customers
  • Released Sustainability Report showing progress toward Williams' 2030 climate commitment; focus on social and governance issues

CEO Perspective

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

“Our natural gas focused strategy continues to outperform with second-quarter Adjusted EBITDA up 14 percent over the same period last year due to the strong earnings growth of our core business and also at our JV upstream operations in the Wamsutter and Haynesville supply areas. Record gathering volumes, continued execution of expansion projects, as well as favorable commodity prices drove the quarterly increase. As a result of our core business strength and better-than-planned market fundamentals, we are raising our 2022 EBITDA guidance midpoint to $6.25 billion, which is an 8% increase from our original guidance midpoint of $5.8 billion.

“As we enter the back half of the year, we are executing on a full slate of growth projects in and around our existing infrastructure to move additional natural gas from key supply basins to growing markets for clean-power generation, residential and commercial use. We recently closed on the strategic acquisition of gathering assets from Trace Midstream and reached a final investment decision on the Louisiana Energy Gateway, a 1.8 Bcf/d project to gather Haynesville natural gas into premium markets, including growing LNG export demand along the Gulf Coast. In addition, we continue to grow our network in the deepwater Gulf of Mexico while advancing multiple gas gathering projects in the Northeast and progressing on expansions along our Transco system.

Armstrong added, “With the strong outlook for global natural gas demand and the growing need for secure and reliable supplies amid geopolitical volatility and climate concerns, Williams is well positioned to create long-term shareholder value. Our latest Sustainability Report, published last week, details the progress we are making on critical ESG-related fronts, including our climate commitment and initiatives focused on building thriving communities, environmental stewardship and workforce diversity. I appreciate our employees for their commitment to sustainable operations and emissions reductions efforts as we leverage our leading infrastructure to deliver the natural gas that is driving the clean energy economy."

Williams Summary Financial Information

2Q

 

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.

2022

2021

 

2022

2021

 

 

 

 

 

 

GAAP Measures

 

 

 

 

 

Net Income

$400

 

$304

 

$779

 

$729

Net Income Per Share

$0.33

 

$0.25

 

$0.64

 

$0.60

Cash Flow From Operations

$1,098

 

$1,057

 

$2,180

 

$1,972

 

 

 

 

 

 

 

 

Non-GAAP Measures (1)

 

 

 

 

 

 

 

Adjusted EBITDA

$1,496

 

$1,317

 

$3,007

 

$2,732

Adjusted Net Income

$484

 

$327

 

$983

 

$756

Adjusted Earnings Per Share

$0.40

 

$0.27

 

$0.80

 

$0.62

Available Funds from Operations

$1,130

 

$919

 

$2,320

 

$1,948

Dividend Coverage Ratio

2.19x

 

1.85x

 

2.24x

 

1.96x

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

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

3.82x

 

4.13x

 

 

 

 

Capital Investments (3) (4)

$429

 

$460

 

$745

 

$737

 

 

 

 

 

 

(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 businesses, net of cash acquired, purchases of and contributions to equity-method investments and purchases of other long-term investments.

(4) Second quarter 2022 and year-to-date 2022 exclude $933 million for purchase of the Trace Midstream Haynesville gathering assets, which closed April 29, 2022.

 

GAAP Measures

  • Second-quarter 2022 net income increased by $96 million compared to the prior year reflecting the benefit of higher service revenues from commodity-based rates, the Trace Acquisition and Transco’s Leidy South project being in service, higher commodity margins, and higher results from our upstream operations associated with increased scale of operations, more than offset by a $241 million net unrealized loss on commodity derivatives in 2022, increased intangible asset amortization, and planned higher operating and administrative expenses driven by the increased scale of our upstream operations and higher employee-related costs, including those resulting from the Sequent acquisition. The tax provision benefited from $134 million associated with the release of valuation allowances on deferred income tax assets and federal income tax settlements.
  • Year-to-date 2022 net income increased by $50 million compared to the prior year reflecting similar drivers to those described for the quarter, further impacted by the absence of a $77 million favorable impact in 2021 from Winter Storm Uri.
  • Cash flow from operations for the second quarter of 2022 increased as compared to 2021 primarily due to higher operating results exclusive of non-cash items, and higher distributions from equity-method investments, partially offset by an unfavorable change in margin deposits associated with commodity derivatives. Year-to-date cash flow from operations also increased compared to 2021 driven by similar factors, except for a favorable change in margin deposits associated with commodity derivatives.

Non-GAAP Measures

  • Second-quarter 2022 Adjusted EBITDA increased by $179 million over the prior year, driven by the previously described benefits from service revenues, commodity margins, and upstream operations, partially offset by planned higher operating and administrative costs. Year-to-date 2022 Adjusted EBITDA increased by $275 million over the prior year due to similar drivers and also reflecting the absence of the favorable impact in 2021 from Winter Storm Uri.
  • Second-quarter 2022 Adjusted Income improved by $157 million over the prior year, driven by the previously described impacts to net income, adjusted primarily to remove the effects of net unrealized losses on commodity derivatives, amortization of certain assets from the Sequent acquisition, and favorable income tax benefits. Year-to-date 2022 Adjusted Income improved by $227 million over the prior year for similar reasons.
  • Second-quarter 2022 Available Funds From Operations (AFFO) increased by $211 million compared to the prior year primarily due to higher operating results exclusive of non-cash items and higher distributions from equity-method investments. Year-to-date 2022 AFFO increased by $372 million reflecting similar drivers.

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 second-quarter 2022 Form 10-Q.

 

Second Quarter

 

Year to Date

Amounts in millions

Modified EBITDA

 

Adjusted EBITDA

 

Modified EBITDA

 

Adjusted EBITDA

2Q 2022

 

2Q 2021

Change

 

2Q 2022

2Q 2021

Change

 

2022

 

2021

Change

 

2022

2021

Change

Transmission & Gulf of Mexico

$652

 

$646

$6

 

 

$652

$648

$4

 

 

$1,349

 

$1,306

$43

 

 

$1,349

$1,308

$41

 

Northeast G&P

450

 

409

41

 

 

450

409

41

 

 

868

 

811

57

 

 

868

811

57

 

West

288

 

223

65

 

 

296

223

73

 

 

548

 

445

103

 

 

556

445

111

 

Gas & NGL Marketing Services

(282

)

8

(290

)

 

6

8

(2

)

 

(269

)

101

(370

)

 

71

101

(30

)

Other

139

 

20

119

 

 

92

29

63

 

 

144

 

53

91

 

 

163

67

96

 

Total

$1,247

 

$1,306

($59

)

 

$1,496

$1,317

$179

 

 

$2,640

 

$2,716

($76

)

 

$3,007

$2,732

$275

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

  • Second-quarter and year-to-date 2022 Modified and Adjusted EBITDA improved compared to the prior year driven by higher service revenues from Transco’s Leidy South expansion project largely offset by higher operating and administrative costs.

Northeast G&P

  • Second-quarter 2022 Modified and Adjusted EBITDA increased over the prior year driven by higher service revenues, primarily related to higher volumes and gathering rate escalations.
  • Both Modified and Adjusted EBITDA also improved for the year-to-date 2022 period, similarly reflecting gathering rate escalations and net increased contributions from equity-investees, partially offset by higher operating and administrative costs.

West

  • Second-quarter and year-to-date 2022 Modified and Adjusted EBITDA increased compared to the prior year benefiting from higher commodity-based rates and higher Haynesville gathering volumes, as well as contributions from Trace Midstream acquired in April.

Gas & NGL Marketing Services

  • Second-quarter 2022 Modified EBITDA declined from the prior year primarily reflecting a $288 million net unrealized loss on commodity derivatives in 2022, which is excluded from Adjusted EBITDA. Both measures were also impacted by higher commodity margins and higher administrative costs associated with the Sequent business acquired in July 2021.
  • Year-to-date 2022 Modified EBITDA also declined from the prior year primarily reflecting a $345 million net unrealized loss on commodity derivatives in 2022, which is excluded from Adjusted EBITDA. Both measures were also impacted by higher commodity margins, more than offset by the absence of a $58 million favorable impact in 2021 from Winter Storm Uri and higher administrative costs associated with the Sequent business acquired in July 2021.

Other

  • Second-quarter 2022 Modified EBITDA improved compared to the prior year primarily reflecting the increased scale of our upstream operations and a second-quarter 2022 $47 million net unrealized gain on commodity derivatives related to our upstream operations, which is excluded from Adjusted EBITDA.
  • Year-to-date 2022 Modified EBITDA also improved compared to the prior year primarily reflecting the increased scale of our upstream operations, partially offset by a $19 million net unrealized loss in 2022 on commodity derivatives related to our upstream operations, which is excluded from Adjusted EBITDA. Both measures were also impacted by the absence of a $22 million favorable impact in 2021 from Winter Storm Uri.

2022 Financial Guidance

The company now expects 2022 Adjusted EBITDA between $6.1 billion and $6.4 billion, a $450 million midpoint increase from guidance originally issued February 2022. The company continues to expect 2022 growth capital expenditures between $2.25 billion to $2.35 billion, a $1 billion midpoint increase from guidance originally issued February 2022 driven by the strategic acquisition of Trace Midstream assets. The company also continues to expect maintenance capital expenditures between $650 million and $750 million, which includes capital for emissions reduction and modernization initiatives. Importantly, Williams anticipates achieving a leverage ratio (net debt-to-Adjusted EBITDA) midpoint of 3.6x, below the original guidance of 3.8x.

Williams' Second-Quarter 2022 Materials to be Posted Shortly; Q&A Webcast Scheduled for Tomorrow

Williams second-quarter 2022 earnings presentation will be posted at www.williams.com. The company’s second-quarter 2022 earnings conference call and webcast with analysts and investors is scheduled for Tuesday, Aug. 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 is available 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 30,000 miles of pipelines system wide – including Transco, the nation’s largest volume and fastest growing pipeline – and handles approximately 30 percent of the natural gas in the United States that is used every day for clean-power generation, heating and industrial use. Learn how the company is leveraging its nationwide footprint to incorporate clean hydrogen, next generation gas and other innovations at www.williams.com.

The Williams Companies, Inc.

Consolidated Statement of Income

(Unaudited)

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

2022

 

2021

 

2022

 

2021

 

(Millions, except per-share amounts)

Revenues:

 

 

 

 

 

 

 

Service revenues

$

1,606

 

 

$

1,460

 

 

$

3,143

 

 

$

2,912

 

Service revenues – commodity consideration

 

86

 

 

 

51

 

 

 

163

 

 

 

100

 

Product sales

 

1,111

 

 

 

786

 

 

 

2,215

 

 

 

1,933

 

Net gain (loss) on commodity derivatives

 

(313

)

 

 

(14

)

 

 

(507

)

 

 

(50

)

Total revenues

 

2,490

 

 

 

2,283

 

 

 

5,014

 

 

 

4,895

 

Costs and expenses:

 

 

 

 

 

 

 

Product costs

 

857

 

 

 

697

 

 

 

1,660

 

 

 

1,629

 

Net processing commodity expenses

 

40

 

 

 

18

 

 

 

70

 

 

 

39

 

Operating and maintenance expenses

 

465

 

 

 

379

 

 

 

859

 

 

 

739

 

Depreciation and amortization expenses

 

506

 

 

 

463

 

 

 

1,004

 

 

 

901

 

Selling, general, and administrative expenses

 

160

 

 

 

114

 

 

 

314

 

 

 

237

 

Other (income) expense – net

 

(10

)

 

 

12

 

 

 

(19

)

 

 

11

 

Total costs and expenses

 

2,018

 

 

 

1,683

 

 

 

3,888

 

 

 

3,556

 

Operating income (loss)

 

472

 

 

 

600

 

 

 

1,126

 

 

 

1,339

 

Equity earnings (losses)

 

163

 

 

 

135

 

 

 

299

 

 

 

266

 

Other investing income (loss) – net

 

2

 

 

 

2

 

 

 

3

 

 

 

4

 

Interest incurred

 

(286

)

 

 

(301

)

 

 

(575

)

 

 

(597

)

Interest capitalized

 

5

 

 

 

3

 

 

 

8

 

 

 

5

 

Other income (expense) – net

 

6

 

 

 

2

 

 

 

11

 

 

 

 

Income (loss) before income taxes

 

362

 

 

 

441

 

 

 

872

 

 

 

1,017

 

Less: Provision (benefit) for income taxes

 

(45

)

 

 

119

 

 

 

73

 

 

 

260

 

Net income (loss)

 

407

 

 

 

322

 

 

 

799

 

 

 

757

 

Less: Net income (loss) attributable to noncontrolling interests

 

7

 

 

 

18

 

 

 

19

 

 

 

27

 

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

 

400

 

 

 

304

 

 

 

780

 

 

 

730

 

Less: Preferred stock dividends

 

 

 

 

 

 

 

1

 

 

 

1

 

Net income (loss) available to common stockholders

$

400

 

 

$

304

 

 

$

779

 

 

$

729

 

Basic earnings (loss) per common share:

 

 

 

 

 

 

 

Net income (loss)

$

.33

 

 

$

.25

 

 

$

.64

 

 

$

.60

 

Weighted-average shares (thousands)

 

1,218,678

 

 

 

1,215,250

 

 

 

1,217,814

 

 

 

1,214,950

 

Diluted earnings (loss) per common share:

 

 

 

 

 

 

 

Net income (loss)

$

.33

 

 

$

.25

 

 

$

.64

 

 

$

.60

 

Weighted-average shares (thousands)

 

1,222,694

 

 

 

1,217,476

 

 

 

1,221,991

 

 

 

1,217,344

 

The Williams Companies, Inc.

Consolidated Balance Sheet

(Unaudited)

 

 

 

June 30,
2022

 

December 31,
2021

 

 

(Millions, except per-share amounts)

ASSETS

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

133

 

 

$

1,680

 

Trade accounts and other receivables

 

 

2,799

 

 

 

1,986

 

Allowance for doubtful accounts

 

 

(15

)

 

 

(8

)

Trade accounts and other receivables – net

 

 

2,784

 

 

 

1,978

 

Inventories

 

 

371

 

 

 

379

 

Derivative assets

 

 

280

 

 

 

301

 

Other current assets and deferred charges

 

 

219

 

 

 

211

 

Total current assets

 

 

3,787

 

 

 

4,549

 

Investments

 

 

5,116

 

 

 

5,127

 

Property, plant, and equipment

 

 

45,195

 

 

 

44,184

 

Accumulated depreciation and amortization

 

 

(15,535

)

 

 

(14,926

)

Property, plant, and equipment – net

 

 

29,660

 

 

 

29,258

 

Intangible assets – net of accumulated amortization

 

 

7,633

 

 

 

7,402

 

Regulatory assets, deferred charges, and other

 

 

1,359

 

 

 

1,276

 

Total assets

 

$

47,555

 

 

$

47,612

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

2,496

 

 

$

1,746

 

Accrued liabilities

 

 

1,427

 

 

 

1,201

 

Commercial paper

 

 

1,039

 

 

 

 

Long-term debt due within one year

 

 

876

 

 

 

2,025

 

Total current liabilities

 

 

5,838

 

 

 

4,972

 

Long-term debt

 

 

20,800

 

 

 

21,650

 

Deferred income tax liabilities

 

 

2,547

 

 

 

2,453

 

Regulatory liabilities, deferred income, and other

 

 

4,534

 

 

 

4,436

 

Contingent liabilities and commitments

 

 

 

 

Equity:

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred stock ($1 par value; 30 million shares authorized at June 30, 2022 and December 31, 2021; 35,000 shares issued at June 30, 2022 and December 31, 2021)

 

 

35

 

 

 

35

 

Common stock ($1 par value; 1,470 million shares authorized at June 30, 2022 and December 31, 2021; 1,253 million shares issued at June 30, 2022 and 1,250 million shares issued at December 31, 2021)

 

 

1,253

 

 

 

1,250

 

Capital in excess of par value

 

 

24,500

 

 

 

24,449

 

Retained deficit

 

 

(13,498

)

 

 

(13,237

)

Accumulated other comprehensive income (loss)

 

 

(23

)

 

 

(33

)

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

 

 

(1,041

)

 

 

(1,041

)

Total stockholders’ equity

 

 

11,226

 

 

 

11,423

 

Noncontrolling interests in consolidated subsidiaries

 

 

2,610

 

 

 

2,678

 

Total equity

 

 

13,836

 

 

 

14,101

 

Total liabilities and equity

 

$

47,555

 

 

$

47,612

 

The Williams Companies, Inc.

Consolidated Statement of Cash Flows

(Unaudited)

 

 

Six Months Ended
June 30,

 

2022

 

2021

 

(Millions)

OPERATING ACTIVITIES:

 

Net income (loss)

$

799

 

 

$

757

 

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

 

 

 

Depreciation and amortization

 

1,004

 

 

 

901

 

Provision (benefit) for deferred income taxes

 

90

 

 

 

262

 

Equity (earnings) losses

 

(299

)

 

 

(266

)

Distributions from unconsolidated affiliates

 

414

 

 

 

345

 

Net unrealized (gain) loss from derivative instruments

 

364

 

 

 

8

 

Amortization of stock-based awards

 

36

 

 

 

39

 

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

 

 

 

Accounts receivable

 

(797

)

 

 

(50

)

Inventories

 

1

 

 

 

(58

)

Other current assets and deferred charges

 

(15

)

 

 

(56

)

Accounts payable

 

690

 

 

 

94

 

Accrued liabilities

 

(24

)

 

 

14

 

Changes in current and noncurrent derivative assets and liabilities

 

49

 

 

 

(31

)

Other, including changes in noncurrent assets and liabilities

 

(132

)

 

 

13

 

Net cash provided (used) by operating activities

 

2,180

 

 

 

1,972

 

FINANCING ACTIVITIES:

 

 

 

Proceeds from (payments of) commercial paper – net

 

1,037

 

 

 

 

Proceeds from long-term debt

 

5

 

 

 

898

 

Payments of long-term debt

 

(2,012

)

 

 

(11

)

Proceeds from issuance of common stock

 

48

 

 

 

3

 

Common dividends paid

 

(1,035

)

 

 

(996

)

Dividends and distributions paid to noncontrolling interests

 

(95

)

 

 

(95

)

Contributions from noncontrolling interests

 

8

 

 

 

6

 

Payments for debt issuance costs

 

 

 

 

(6

)

Other – net

 

(31

)

 

 

(12

)

Net cash provided (used) by financing activities

 

(2,075

)

 

 

(213

)

INVESTING ACTIVITIES:

 

 

 

Property, plant, and equipment:

 

 

 

Capital expenditures (1)

 

(606

)

 

 

(685

)

Dispositions – net

 

(11

)

 

 

(5

)

Contributions in aid of construction

 

6

 

 

 

36

 

Purchases of businesses, net of cash acquired

 

(933

)

 

 

 

Purchases of and contributions to equity-method investments

 

(100

)

 

 

(44

)

Other – net

 

(8

)

 

 

(2

)

Net cash provided (used) by investing activities

 

(1,652

)

 

 

(700

)

Increase (decrease) in cash and cash equivalents

 

(1,547

)

 

 

1,059

 

Cash and cash equivalents at beginning of year

 

1,680

 

 

 

142

 

Cash and cash equivalents at end of period

$

133

 

 

$

1,201

 

_____________

 

 

 

(1) Increases to property, plant, and equipment

$

(642

)

 

$

(693

)

Changes in related accounts payable and accrued liabilities

 

36

 

 

 

8

 

Capital expenditures

$

(606

)

 

$

(685

)

Transmission & Gulf of Mexico

(UNAUDITED)

 

2021

 

2022

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

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

$

708

 

$

693

 

$

706

 

$

739

 

$

2,846

 

 

$

730

 

$

717

 

$

1,447

 

Gathering, processing, and transportation revenues

 

86

 

 

90

 

 

74

 

 

94

 

 

344

 

 

 

82

 

 

84

 

 

166

 

Other fee revenues (1)

 

4

 

 

4

 

 

5

 

 

5

 

 

18

 

 

 

5

 

 

5

 

 

10

 

Commodity margins

 

8

 

 

7

 

 

8

 

 

12

 

 

35

 

 

 

15

 

 

11

 

 

26

 

Operating and administrative costs (1)

 

(198

)

 

(197

)

 

(215

)

 

(226

)

 

(836

)

 

 

(202

)

 

(227

)

 

(429

)

Other segment income (expenses) - net (1)

 

5

 

 

5

 

 

7

 

 

16

 

 

33

 

 

 

19

 

 

17

 

 

36

 

Impairment of certain assets

 

 

 

(2

)

 

 

 

 

 

(2

)

 

 

 

 

 

 

 

Proportional Modified EBITDA of equity-method investments

 

47

 

 

46

 

 

45

 

 

45

 

 

183

 

 

 

48

 

 

45

 

 

93

 

Modified EBITDA

 

660

 

 

646

 

 

630

 

 

685

 

 

2,621

 

 

 

697

 

 

652

 

 

1,349

 

Adjustments

 

 

 

2

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

660

 

$

648

 

$

630

 

$

685

 

$

2,623

 

 

$

697

 

$

652

 

$

1,349

 

 

 

 

 

 

 

 

 

 

 

Statistics for Operated Assets

 

 

 

 

 

 

 

 

 

Natural Gas Transmission

 

 

 

 

 

 

 

 

 

Transcontinental Gas Pipe Line

 

 

 

 

 

 

 

 

 

Avg. daily transportation volumes (Tbtu)

 

14.1

 

 

13.1

 

 

13.8

 

 

14.2

 

 

13.8

 

 

 

15.0

 

 

13.5

 

 

14.3

 

Avg. daily firm reserved capacity (Tbtu)

 

18.6

 

 

18.3

 

 

18.7

 

 

19.2

 

 

18.7

 

 

 

19.3

 

 

19.1

 

 

19.2

 

Northwest Pipeline LLC

 

 

 

 

 

 

 

 

 

Avg. daily transportation volumes (Tbtu)

 

2.8

 

 

2.2

 

 

2.0

 

 

2.6

 

 

2.4

 

 

 

2.8

 

 

2.1

 

 

2.5

 

Avg. daily firm reserved capacity (Tbtu)

 

3.8

 

 

3.8

 

 

3.8

 

 

3.8

 

 

3.8

 

 

 

3.8

 

 

3.8

 

 

3.8

 

Gulfstream - Non-consolidated

 

 

 

 

 

 

 

 

 

Avg. daily transportation volumes (Tbtu)

 

1.0

 

 

1.2

 

 

1.3

 

 

1.1

 

 

1.2

 

 

 

0.9

 

 

1.3

 

 

1.1

 

Avg. daily firm reserved capacity (Tbtu)

 

1.3

 

 

1.3

 

 

1.3

 

 

1.3

 

 

1.3

 

 

 

1.3

 

 

1.3

 

 

1.3

 

Gathering, Processing, and Crude Oil Transportation

 

 

 

 

 

 

 

 

 

Consolidated (2)

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

 

0.28

 

 

0.31

 

 

0.25

 

 

0.29

 

 

0.28

 

 

 

0.30

 

 

0.28

 

 

0.29

 

Plant inlet natural gas volumes (Bcf/d)

 

0.46

 

 

0.41

 

 

0.44

 

 

0.48

 

 

0.45

 

 

 

0.48

 

 

0.46

 

 

0.47

 

NGL production (Mbbls/d)

 

29

 

 

26

 

 

28

 

 

33

 

 

29

 

 

 

31

 

 

31

 

 

31

 

NGL equity sales (Mbbls/d)

 

7

 

 

5

 

 

6

 

 

7

 

 

6

 

 

 

7

 

 

7

 

 

7

 

Crude oil transportation volumes (Mbbls/d)

 

130

 

 

151

 

 

120

 

 

135

 

 

134

 

 

 

110

 

 

124

 

 

117

 

Non-consolidated (3)

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

 

0.36

 

 

0.40

 

 

0.29

 

 

0.36

 

 

0.35

 

 

 

0.39

 

 

0.37

 

 

0.38

 

Plant inlet natural gas volumes (Bcf/d)

 

0.37

 

 

0.40

 

 

0.29

 

 

0.36

 

 

0.35

 

 

 

0.38

 

 

0.37

 

 

0.38

 

NGL production (Mbbls/d)

 

28

 

 

31

 

 

21

 

 

27

 

 

27

 

 

 

28

 

 

26

 

 

27

 

NGL equity sales (Mbbls/d)

 

9

 

 

11

 

 

6

 

 

7

 

 

8

 

 

 

8

 

 

6

 

 

7

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes certain amounts associated with revenues and operating costs for tracked or reimbursable charges. Also, Operating and administrative costs increased in 2021, particularly in third quarter and fourth quarter, due to higher incentive and equity compensation expense.

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

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

Northeast G&P

(UNAUDITED)

 

2021

 

2022

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

Gathering, processing, transportation, and fractionation revenues

$

311

 

$

315

 

$

340

 

$

342

 

$

1,308

 

 

$

323

 

$

350

 

$

673

 

Other fee revenues (1)

 

25

 

 

25

 

 

26

 

 

27

 

 

103

 

 

 

27

 

 

27

 

 

54

 

Commodity margins

 

3

 

 

 

 

(2

)

 

4

 

 

5

 

 

 

6

 

 

1

 

 

7

 

Operating and administrative costs (1)

 

(89

)

 

(86

)

 

(94

)

 

(103

)

 

(372

)

 

 

(85

)

 

(102

)

 

(187

)

Other segment income (expenses) - net

 

(1

)

 

(7

)

 

(3

)

 

(3

)

 

(14

)

 

 

(3

)

 

 

 

(3

)

Proportional Modified EBITDA of equity-method investments

 

153

 

 

162

 

 

175

 

 

192

 

 

682

 

 

 

150

 

 

174

 

 

324

 

Modified EBITDA

 

402

 

 

409

 

 

442

 

 

459

 

 

1,712

 

 

 

418

 

 

450

 

 

868

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

402

 

$

409

 

$

442

 

$

459

 

$

1,712

 

 

$

418

 

$

450

 

$

868

 

 

 

 

 

 

 

 

 

 

 

Statistics for Operated Assets and Blue Racer Midstream

 

 

 

 

 

 

 

 

 

Gathering and Processing

 

 

 

 

 

 

 

 

 

Consolidated (2)

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

 

4.19

 

 

4.10

 

 

4.26

 

 

4.38

 

 

4.24

 

 

 

4.03

 

 

4.19

 

 

4.11

 

Plant inlet natural gas volumes (Bcf/d)

 

1.41

 

 

1.62

 

 

1.64

 

 

1.62

 

 

1.57

 

 

 

1.46

 

 

1.70

 

 

1.58

 

NGL production (Mbbls/d)

 

102

 

 

115

 

 

121

 

 

120

 

 

115

 

 

 

110

 

 

118

 

 

114

 

NGL equity sales (Mbbls/d)

 

1

 

 

1

 

 

 

 

1

 

 

1

 

 

 

2

 

 

1

 

 

1

 

Non-consolidated (3)

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

 

6.62

 

 

6.76

 

 

6.92

 

 

6.84

 

 

6.79

 

 

 

6.62

 

 

6.76

 

 

6.69

 

Plant inlet natural gas volumes (Bcf/d)

 

0.87

 

 

0.87

 

 

0.79

 

 

0.73

 

 

0.82

 

 

 

0.66

 

 

0.76

 

 

0.71

 

NGL production (Mbbls/d)

 

60

 

 

58

 

 

56

 

 

51

 

 

56

 

 

 

50

 

 

53

 

 

52

 

NGL equity sales (Mbbls/d)

 

8

 

 

6

 

 

6

 

 

6

 

 

6

 

 

 

4

 

 

3

 

 

4

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges. Also, Operating and administrative costs increased in 2021, particularly in third quarter and fourth quarter, due to higher incentive and equity compensation expense.

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

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

West

(UNAUDITED)

 

2021

 

2022

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

Net gathering, processing, transportation, storage, and fractionation revenues

$

269

 

$

285

 

$

302

 

$

313

 

$

1,169

 

 

$

317

 

$

360

 

$

677

 

Other fee revenues (1)

 

6

 

 

4

 

 

4

 

 

7

 

 

21

 

 

 

6

 

 

6

 

 

12

 

Commodity margins

 

31

 

 

26

 

 

21

 

 

22

 

 

100

 

 

 

23

 

 

25

 

 

48

 

Operating and administrative costs (1)

 

(109

)

 

(113

)

 

(108

)

 

(112

)

 

(442

)

 

 

(112

)

 

(133

)

 

(245

)

Other segment income (expenses) - net

 

 

 

(1

)

 

11

 

 

(2

)

 

8

 

 

 

(1

)

 

(1

)

 

(2

)

Proportional Modified EBITDA of equity-method investments

 

25

 

 

22

 

 

27

 

 

31

 

 

105

 

 

 

27

 

 

31

 

 

58

 

Modified EBITDA

 

222

 

 

223

 

 

257

 

 

259

 

 

961

 

 

 

260

 

 

288

 

 

548

 

Adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

 

8

 

Adjusted EBITDA

$

222

 

$

223

 

$

257

 

$

259

 

$

961

 

 

$

260

 

$

296

 

$

556

 

 

 

 

 

 

 

 

 

 

 

Statistics for Operated Assets

 

 

 

 

 

 

 

 

 

Gathering and Processing

 

 

 

 

 

 

 

 

 

Consolidated (2)

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d) (3)

 

3.11

 

 

3.21

 

 

3.31

 

 

3.36

 

 

3.25

 

 

 

3.47

 

 

5.14

 

 

5.05

 

Plant inlet natural gas volumes (Bcf/d)

 

1.20

 

 

1.20

 

 

1.29

 

 

1.22

 

 

1.23

 

 

 

1.13

 

 

1.14

 

 

1.14

 

NGL production (Mbbls/d)

 

36

 

 

39

 

 

49

 

 

43

 

 

41

 

 

 

47

 

 

49

 

 

48

 

NGL equity sales (Mbbls/d)

 

13

 

 

16

 

 

19

 

 

15

 

 

16

 

 

 

17

 

 

18

 

 

18

 

Non-consolidated (4)

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

 

0.27

 

 

0.30

 

 

0.28

 

 

0.28

 

 

0.29

 

 

 

0.28

 

 

0.28

 

 

0.28

 

Plant inlet natural gas volumes (Bcf/d)

 

0.27

 

 

0.30

 

 

0.28

 

 

0.28

 

 

0.28

 

 

 

0.27

 

 

0.28

 

 

0.28

 

NGL production (Mbbls/d)

 

24

 

 

32

 

 

32

 

 

32

 

 

29

 

 

 

31

 

 

32

 

 

32

 

NGL and Crude Oil Transportation volumes (Mbbls/d) (5)

 

85

 

 

101

 

 

119

 

 

132

 

 

109

 

 

 

118

 

 

144

 

 

131

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges. Also, Operating and administrative costs increased in 2021, particularly in third quarter and fourth quarter, due to higher incentive and equity compensation expense.

(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 for these assets 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 the Overland Pass Pipeline Company and Rocky Mountain Midstream.

Gas & NGL Marketing Services

(UNAUDITED)

 

2021

 

2022

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

Commodity margins

$

95

 

$

13

 

$

46

 

$

11

 

$

165

 

 

$

100

 

$

23

 

$

123

 

Other fee revenues

 

1

 

 

1

 

 

 

 

1

 

 

3

 

 

 

1

 

 

 

 

1

 

Net unrealized gain (loss) from derivative instruments

 

 

 

(3

)

 

(294

)

 

188

 

 

(109

)

 

 

(57

)

 

(288

)

 

(345

)

Operating and administrative costs

 

(3

)

 

(3

)

 

(14

)

 

(17

)

 

(37

)

 

 

(31

)

 

(23

)

 

(54

)

Other segment income (expenses) - net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

6

 

Modified EBITDA

 

93

 

 

8

 

 

(262

)

 

183

 

 

22

 

 

 

13

 

 

(282

)

 

(269

)

Adjustments (1)

 

 

 

 

 

296

 

 

(172

)

 

124

 

 

 

52

 

 

288

 

 

340

 

Adjusted EBITDA

$

93

 

$

8

 

$

34

 

$

11

 

$

146

 

 

$

65

 

$

6

 

$

71

 

 

 

 

 

 

 

 

 

 

 

Statistics

 

 

 

 

 

 

 

 

 

Product Sales Volumes

 

 

 

 

 

 

 

 

 

Natural Gas (Bcf/d)(2)

 

1.05

 

 

0.94

 

 

7.98

 

 

7.71

 

 

7.70

 

 

 

7.96

 

 

6.66

 

 

7.44

 

NGLs (Mbbls/d)

 

233

 

 

216

 

 

229

 

 

229

 

 

227

 

 

 

246

 

 

234

 

 

240

 

 

 

 

 

 

 

 

 

 

 

(1) 2022 Adjustments for Gas & NGL Marketing Services includes the impact of volatility on NGL linefill transactions. Had this adjustment been made in 2021, Adjusted EBITDA would have been reduced by ($15), ($5), ($15), $1, and ($34) for the 1st, 2nd, 3rd, and 4th quarters, and full year period, respectively.

(2) Includes 100% of the volumes associated with the Sequent Acquisition after the purchase on July 1, 2021. Average volumes were calculated over the period owned.

Other

(UNAUDITED)

 

2021

 

2022

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

Service revenues

$

7

 

$

8

 

$

8

 

$

9

 

$

32

 

 

$

9

 

$

7

 

$

16

 

Net realized product sales

 

56

 

 

49

 

 

105

 

 

103

 

 

313

 

 

 

96

 

 

142

 

 

238

 

Net unrealized gain (loss) from derivative instruments

 

 

 

(5

)

 

(15

)

 

20

 

 

 

 

 

(66

)

 

47

 

 

(19

)

Operating and administrative costs

 

(25

)

 

(26

)

 

(58

)

 

(43

)

 

(152

)

 

 

(33

)

 

(57

)

 

(90

)

Other segment income (expenses) - net

 

(5

)

 

(6

)

 

(2

)

 

(2

)

 

(15

)

 

 

(1

)

 

 

 

(1

)

Modified EBITDA

 

33

 

 

20

 

 

38

 

 

87

 

 

178

 

 

 

5

 

 

139

 

 

144

 

Adjustments

 

5

 

 

9

 

 

19

 

 

(18

)

 

15

 

 

 

66

 

 

(47

)

 

19

 

Adjusted EBITDA

$

38

 

$

29

 

$

57

 

$

69

 

$

193

 

 

$

71

 

$

92

 

$

163

 

 

 

 

 

 

 

 

 

 

 

Statistics

 

 

 

 

 

 

 

 

 

Product Sales Volumes

 

 

 

 

 

 

 

 

 

Natural Gas (Bcf/d)

 

0.07

 

 

0.14

 

 

0.17

 

 

0.14

 

 

0.13

 

 

 

0.12

 

 

0.19

 

 

0.15

 

NGLs (Mbbls/d)

 

2

 

 

6

 

 

8

 

 

8

 

 

6

 

 

 

7

 

 

7

 

 

7

 

Oil (Mbbls/d)

 

1

 

 

2

 

 

3

 

 

3

 

 

2

 

 

 

2

 

 

3

 

 

2

 

 

Capital Expenditures and Investments

(UNAUDITED)

 

2021

 

2022

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

 

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

109

 

$

209

 

$

172

 

$

173

 

$

663

 

 

$

125

 

$

129

 

$

254

 

Northeast G&P

 

40

 

 

46

 

 

41

 

 

22

 

 

149

 

 

 

40

 

 

30

 

 

70

 

West

 

33

 

 

76

 

 

49

 

 

45

 

 

203

 

 

 

61

 

 

82

 

 

143

 

Other

 

78

 

 

94

 

 

10

 

 

42

 

 

224

 

 

 

65

 

 

74

 

 

139

 

Total (1)

$

260

 

$

425

 

$

272

 

$

282

 

$

1,239

 

 

$

291

 

$

315

 

$

606

 

 

 

 

 

 

 

 

 

 

 

Purchases of and contributions to equity-method investments:

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

3

 

$

6

 

$

5

 

$

12

 

$

26

 

 

$

16

 

$

26

 

$

42

 

Northeast G&P

 

11

 

 

24

 

 

30

 

 

24

 

 

89

 

 

 

32

 

 

18

 

 

50

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

8

 

 

 

 

8

 

Total

$

14

 

$

30

 

$

35

 

$

36

 

$

115

 

 

$

56

 

$

44

 

$

100

 

 

 

 

 

 

 

 

 

 

 

Summary:

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

112

 

$

215

 

$

177

 

$

185

 

$

689

 

 

$

141

 

$

155

 

$

296

 

Northeast G&P

 

51

 

 

70

 

 

71

 

 

46

 

 

238

 

 

 

72

 

 

48

 

 

120

 

West

 

33

 

 

76

 

 

49

 

 

45

 

 

203

 

 

 

61

 

 

82

 

 

143

 

Other

 

78

 

 

94

 

 

10

 

 

42

 

 

224

 

 

 

73

 

 

74

 

 

147

 

Total

$

274

 

$

455

 

$

307

 

$

318

 

$

1,354

 

 

$

347

 

$

359

 

$

706

 

 

 

 

 

 

 

 

 

 

 

Capital investments:

 

 

 

 

 

 

 

 

 

Increases to property, plant, and equipment

$

263

 

$

430

 

$

308

 

$

304

 

$

1,305

 

 

$

260

 

$

382

 

$

642

 

Purchases of businesses, net of cash acquired

 

 

 

 

 

126

 

 

25

 

 

151

 

 

 

 

 

933

 

 

933

 

Purchases of and contributions to equity-method investments

 

14

 

 

30

 

 

35

 

 

36

 

 

115

 

 

 

56

 

 

44

 

 

100

 

Purchases of other long-term investments

 

 

 

 

 

 

 

6

 

 

6

 

 

 

 

 

3

 

 

3

 

Total

$

277

 

$

460

 

$

469

 

$

371

 

$

1,577

 

 

$

316

 

$

1,362

 

$

1,678

 

 

 

 

 

 

 

 

 

 

 

(1) Increases to property, plant, and equipment

$

263

 

$

430

 

$

308

 

$

304

 

$

1,305

 

 

$

260

 

$

382

 

$

642

 

Changes in related accounts payable and accrued liabilities

 

(3

)

 

(5

)

 

(36

)

 

(22

)

 

(66

)

 

 

31

 

 

(67

)

 

(36

)

Capital expenditures

$

260

 

$

425

 

$

272

 

$

282

 

$

1,239

 

 

$

291

 

$

315

 

$

606

 

 

 

 

 

 

 

 

 

 

 

Contributions from noncontrolling interests

$

2

 

$

4

 

$

 

$

3

 

$

9

 

 

$

3

 

$

5

 

$

8

 

Contributions in aid of construction

$

19

 

$

17

 

$

10

 

$

6

 

$

52

 

 

$

(3

)

$

9

 

$

6

 

Proceeds from disposition of equity-method investments

$

 

$

1

 

$

 

$

 

$

1

 

 

$

 

$

 

$

 

Non-GAAP Measures

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

Our segment performance measure, modified EBITDA, is defined as net income (loss) before income (loss) from discontinued operations, income tax expense, net interest expense, equity earnings from equity-method investments, other net investing income, impairments of equity investments and goodwill, depreciation and amortization expense, and accretion expense associated with asset retirement obligations for nonregulated operations. We also add our proportional ownership share (based on ownership interest) of modified EBITDA of equity-method investments.

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

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

This news release is accompanied by a reconciliation of these non-GAAP financial measures to their nearest GAAP financial measures. Management uses these financial measures because they are accepted financial indicators used by investors to compare company performance. In addition, management believes that these measures provide investors an enhanced perspective of the operating performance of assets and the cash that the business is generating.

Neither adjusted EBITDA, adjusted income, nor available funds from operations are intended to represent cash flows for the period, nor are they presented as an alternative to net income or cash flow from operations. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles.

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

(UNAUDITED)

 

2021

 

2022

(Dollars in millions, except per-share amounts)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

 

 

 

 

 

 

 

 

 

 

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

$

425

 

$

304

 

$

164

 

$

621

 

$

1,514

 

 

$

379

 

$

400

 

$

779

 

 

 

 

 

 

 

 

 

 

 

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

$

.35

 

$

.25

 

$

.13

 

$

.51

 

$

1.24

 

 

$

.31

 

$

.33

 

$

.64

 

Adjustments:

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

 

 

 

 

 

 

 

 

 

Impairment of certain assets

$

 

$

2

 

$

 

$

 

$

2

 

 

$

 

$

 

$

 

Total Transmission & Gulf of Mexico adjustments

 

 

 

2

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

West

 

 

 

 

 

 

 

 

 

Trace acquisition costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

 

8

 

Total West adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

 

8

 

Gas & NGL Marketing Services

 

 

 

 

 

 

 

 

 

Amortization of purchase accounting inventory fair value adjustment

 

 

 

 

 

2

 

 

16

 

 

18

 

 

 

15

 

 

 

 

15

 

Impact of volatility on NGL linefill transactions (2)

 

 

 

 

 

 

 

 

 

 

 

 

(20

)

 

 

 

(20

)

Net unrealized (gain) loss from derivative instruments

 

 

 

 

 

294

 

 

(188

)

 

106

 

 

 

57

 

 

288

 

 

345

 

Total Gas & NGL Marketing Services adjustments

 

 

 

 

 

296

 

 

(172

)

 

124

 

 

 

52

 

 

288

 

 

340

 

Other

 

 

 

 

 

 

 

 

 

Expenses associated with Sequent acquisition and transition

 

 

 

 

 

3

 

 

2

 

 

5

 

 

 

 

 

 

 

 

Net unrealized (gain) loss from derivative instruments

 

 

 

4

 

 

16

 

 

(20

)

 

 

 

 

66

 

 

(47

)

 

19

 

Accrual for loss contingencies

 

5

 

 

5

 

 

 

 

 

 

10

 

 

 

 

 

 

 

 

Total Other adjustments

 

5

 

 

9

 

 

19

 

 

(18

)

 

15

 

 

 

66

 

 

(47

)

 

19

 

Adjustments included in Modified EBITDA

 

5

 

 

11

 

 

315

 

 

(190

)

 

141

 

 

 

118

 

 

249

 

 

367

 

Adjustments below Modified EBITDA

 

 

 

 

 

 

 

 

 

Accelerated depreciation for decommissioning assets

 

 

 

20

 

 

13

 

 

 

 

33

 

 

 

 

 

 

 

 

Amortization of intangible assets from Sequent acquisition

 

 

 

 

 

21

 

 

(3

)

 

18

 

 

 

42

 

 

41

 

 

83

 

 

 

 

 

20

 

 

34

 

 

(3

)

 

51

 

 

 

42

 

 

41

 

 

83

 

Total adjustments

 

5

 

 

31

 

 

349

 

 

(193

)

 

192

 

 

 

160

 

 

290

 

 

450

 

Less tax effect for above items

 

(1

)

 

(8

)

 

(87

)

 

48

 

 

(48

)

 

 

(40

)

 

(72

)

 

(112

)

Adjustments for tax-related items (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(134

)

 

(134

)

Adjusted income available to common stockholders

$

429

 

$

327

 

$

426

 

$

476

 

$

1,658

 

 

$

499

 

$

484

 

$

983

 

Adjusted income - diluted earnings per common share (1)

$

.35

 

$

.27

 

$

.35

 

$

.39

 

$

1.36

 

 

$

.41

 

$

.40

 

$

.80

 

Weighted-average shares - diluted (thousands)

 

1,217,211

 

 

1,217,476

 

 

1,217,979

 

 

1,221,454

 

 

1,218,215

 

 

 

1,221,279

 

 

1,222,694

 

 

1,221,991

 

(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) Had this adjustment been made in 2021, the Gas & NGL Marketing segment would have included adjustments of ($15), ($5), ($15), $1, and ($34) for the 1st, 2nd, 3rd, and 4th quarters, and full year period, respectively. This would have reduced Adjusted income – diluted earnings per common share by $0.01, $0.01, and $0.02 for the 1st and 3rd quarters, and full year period, respectively.

(3) Adjustments include 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.

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

(UNAUDITED)

 

2021

 

2022

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

435

 

$

322

 

$

173

 

$

632

 

$

1,562

 

 

$

392

 

$

407

 

$

799

 

Provision (benefit) for income taxes

 

141

 

 

119

 

 

53

 

 

198

 

 

511

 

 

 

118

 

 

(45

)

 

73

 

Interest expense

 

294

 

 

298

 

 

292

 

 

295

 

 

1,179

 

 

 

286

 

 

281

 

 

567

 

Equity (earnings) losses

 

(131

)

 

(135

)

 

(157

)

 

(185

)

 

(608

)

 

 

(136

)

 

(163

)

 

(299

)

Other investing (income) loss - net

 

(2

)

 

(2

)

 

(2

)

 

(1

)

 

(7

)

 

 

(1

)

 

(2

)

 

(3

)

Proportional Modified EBITDA of equity-method investments

 

225

 

 

230

 

 

247

 

 

268

 

 

970

 

 

 

225

 

 

250

 

 

475

 

Depreciation and amortization expenses

 

438

 

 

463

 

 

487

 

 

454

 

 

1,842

 

 

 

498

 

 

506

 

 

1,004

 

Accretion expense associated with asset retirement obligations for nonregulated operations

 

10

 

 

11

 

 

12

 

 

12

 

 

45

 

 

 

11

 

 

13

 

 

24

 

Modified EBITDA

$

1,410

 

$

1,306

 

$

1,105

 

$

1,673

 

$

5,494

 

 

$

1,393

 

$

1,247

 

$

2,640

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

660

 

$

646

 

$

630

 

$

685

 

$

2,621

 

 

$

697

 

$

652

 

$

1,349

 

Northeast G&P

 

402

 

 

409

 

 

442

 

 

459

 

 

1,712

 

 

 

418

 

 

450

 

 

868

 

West

 

222

 

 

223

 

 

257

 

 

259

 

 

961

 

 

 

260

 

 

288

 

 

548

 

Gas & NGL Marketing Services

 

93

 

 

8

 

 

(262

)

 

183

 

 

22

 

 

 

13

 

 

(282

)

 

(269

)

Other

 

33

 

 

20

 

 

38

 

 

87

 

 

178

 

 

 

5

 

 

139

 

 

144

 

Total Modified EBITDA

$

1,410

 

$

1,306

 

$

1,105

 

$

1,673

 

$

5,494

 

 

$

1,393

 

$

1,247

 

$

2,640

 

 

 

 

 

 

 

 

 

 

 

Adjustments (1):

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

 

$

2

 

$

 

$

 

$

2

 

 

$

 

$

 

$

 

West

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

 

8

 

Gas & NGL Marketing Services(2)

 

 

 

 

 

296

 

 

(172

)

 

124

 

 

 

52

 

 

288

 

 

340

 

Other

 

5

 

 

9

 

 

19

 

 

(18

)

 

15

 

 

 

66

 

 

(47

)

 

19

 

Total Adjustments

$

5

 

$

11

 

$

315

 

$

(190

)

$

141

 

 

$

118

 

$

249

 

$

367

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

660

 

$

648

 

$

630

 

$

685

 

$

2,623

 

 

$

697

 

$

652

 

$

1,349

 

Northeast G&P

 

402

 

 

409

 

 

442

 

 

459

 

 

1,712

 

 

 

418

 

 

450

 

 

868

 

West

 

222

 

 

223

 

 

257

 

 

259

 

 

961

 

 

 

260

 

 

296

 

 

556

 

Gas & NGL Marketing Services

 

93

 

 

8

 

 

34

 

 

11

 

 

146

 

 

 

65

 

 

6

 

 

71

 

Other

 

38

 

 

29

 

 

57

 

 

69

 

 

193

 

 

 

71

 

 

92

 

 

163

 

Total Adjusted EBITDA

$

1,415

 

$

1,317

 

$

1,420

 

$

1,483

 

$

5,635

 

 

$

1,511

 

$

1,496

 

$

3,007

 

 

 

 

 

 

 

 

 

 

 

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

(2) 2022 Adjustments for Gas & NGL Marketing Services includes the impact of volatility on NGL linefill transactions. Had this adjustment been made in 2021, Adjusted EBITDA would have been reduced by ($15), ($5), ($15), $1, and ($34) for the 1st, 2nd, 3rd, and 4th quarters, and full year period, respectively.

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

(UNAUDITED)

 

2021

 

2022

(Dollars in millions, except coverage ratios)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

 

 

 

 

 

 

 

 

 

 

The Williams Companies, Inc.

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

Net cash provided (used) by operating activities

$

915

 

$

1,057

 

$

834

 

$

1,139

 

$

3,945

 

 

$

1,082

 

$

1,098

 

$

2,180

 

Exclude: Cash (provided) used by changes in:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

59

 

 

(9

)

 

488

 

 

7

 

 

545

 

 

 

3

 

 

794

 

 

797

 

Inventories

 

8

 

 

50

 

 

54

 

 

12

 

 

124

 

 

 

(178

)

 

177

 

 

(1

)

Other current assets and deferred charges

 

6

 

 

50

 

 

11

 

 

(4

)

 

63

 

 

 

65

 

 

(50

)

 

15

 

Accounts payable

 

(38

)

 

(56

)

 

(476

)

 

(73

)

 

(643

)

 

 

138

 

 

(828

)

 

(690

)

Accrued liabilities

 

116

 

 

(130

)

 

(53

)

 

9

 

 

(58

)

 

 

149

 

 

(125

)

 

24

 

Changes in current and noncurrent derivative assets and liabilities

 

6

 

 

25

 

 

236

 

 

10

 

 

277

 

 

 

(101

)

 

52

 

 

(49

)

Other, including changes in noncurrent assets and liabilities

 

10

 

 

(31

)

 

27

 

 

(5

)

 

1

 

 

 

67

 

 

65

 

 

132

 

Preferred dividends paid

 

(1

)

 

 

 

(1

)

 

(1

)

 

(3

)

 

 

(1

)

 

 

 

(1

)

Dividends and distributions paid to noncontrolling interests

 

(54

)

 

(41

)

 

(40

)

 

(52

)

 

(187

)

 

 

(37

)

 

(58

)

 

(95

)

Contributions from noncontrolling interests

 

2

 

 

4

 

 

 

 

3

 

 

9

 

 

 

3

 

 

5

 

 

8

 

Available funds from operations

$

1,029

 

$

919

 

$

1,080

 

$

1,045

 

$

4,073

 

 

$

1,190

 

$

1,130

 

$

2,320

 

 

 

 

 

 

 

 

 

 

 

Common dividends paid

$

498

 

$

498

 

$

498

 

$

498

 

$

1,992

 

 

$

518

 

$

517

 

$

1,035

 

 

 

 

 

 

 

 

 

 

 

Coverage ratio:

 

 

 

 

 

 

 

 

 

Available funds from operations divided by Common dividends paid

 

2.07

 

 

1.85

 

 

2.17

 

 

2.10

 

 

2.04

 

 

 

2.30

 

 

2.19

 

 

2.24

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

2022 Guidance

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

 

Low

 

Mid

 

High

 

 

 

 

 

 

 

Net income (loss)

 

$

1,754

 

$

1,854

 

 

$

1,954

Provision (benefit) for income taxes

 

 

400

 

 

450

 

 

 

500

Interest expense

 

 

 

 

1,145

 

 

 

Equity (earnings) losses

 

 

 

 

(610

)

 

 

Proportional Modified EBITDA of equity-method investments

 

 

 

 

960

 

 

 

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

 

 

 

 

2,075

 

 

 

Other

 

 

 

 

9

 

 

 

Modified EBITDA

 

$

5,733

 

$

5,883

 

 

$

6,033

EBITDA Adjustments

 

 

 

 

367

 

 

 

Adjusted EBITDA

 

$

6,100

 

$

6,250

 

 

$

6,400

 

 

 

 

 

 

 

Net income (loss)

 

$

1,754

 

$

1,854

 

 

$

1,954

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

 

 

 

 

70

 

 

 

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

 

$

1,684

 

$

1,784

 

 

$

1,884

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

Adjustments included in Modified EBITDA (1)

 

 

 

 

367

 

 

 

Adjustments below Modified EBITDA (2)

 

 

 

 

167

 

 

 

Allocation of adjustments to noncontrolling interests

 

 

 

 

 

 

 

Total adjustments

 

 

 

 

534

 

 

 

Less tax effect for above items

 

 

 

 

(268

)

 

 

Adjusted income available to common stockholders

 

$

1,950

 

$

2,050

 

 

$

2,150

Adjusted diluted earnings per common share

 

$

1.59

 

$

1.67

 

 

$

1.76

Weighted-average shares - diluted (millions)

 

 

 

 

1,224

 

 

 

 

 

 

 

 

 

 

Available Funds from Operations (AFFO):

 

 

 

 

 

 

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

 

$

4,760

 

$

4,910

 

 

$

5,060

Preferred dividends paid

 

 

 

 

(3

)

 

 

Dividends and distributions paid to noncontrolling interests

 

 

 

 

(200

)

 

 

Contributions from noncontrolling interests

 

 

 

 

43

 

 

 

Available funds from operations (AFFO)

 

$

4,600

 

$

4,750

 

 

$

4,900

AFFO per common share

 

$

3.76

 

$

3.88

 

 

$

4.00

Common dividends paid

 

 

 

$

2,075

 

 

 

Coverage Ratio (AFFO/Common dividends paid)

 

2.22x

 

 

2.29

x

 

2.36x

 

 

 

 

 

 

 

(1) Includes 1Q & 2Q adjustments of $367 million included in Modified EBITDA.

(2) Includes amortization of Sequent intangible asset of $167 million.

Forward-Looking Statements

The reports, filings, and other public announcements of The Williams Companies, Inc. (Williams) may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions, and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995.

All statements, other than statements of historical facts, included in this report that address activities, events, or developments that we expect, believe, or anticipate will exist or may occur in the future, are forward-looking statements. Forward-looking statements can be identified by various forms of words such as “anticipates,” “believes,” “seeks,” “could,” “may,” “should,” “continues,” “estimates,” “expects,” “forecasts,” “intends,” “might,” “goals,” “objectives,” “targets,” “planned,” “potential,” “projects,” “scheduled,” “will,” “assumes,” “guidance,” “outlook,” “in-service date,” or other similar expressions. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management and include, among others, statements regarding:

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

Forward-looking statements are based on numerous assumptions, uncertainties, and risks that could cause future events or results to be materially different from those stated or implied in this report. Many of the factors that will determine these results are beyond our ability to control or predict. Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include, among others, the following:

  • Availability of supplies, market demand, and volatility of prices;
  • Development and rate of adoption of alternative energy sources;
  • The impact of existing and future laws and regulations, the regulatory environment, environmental matters, and litigation, as well as our ability to obtain necessary permits and approvals, and achieve favorable rate proceeding outcomes;
  • Our exposure to the credit risk of our customers and counterparties;
  • Our ability to acquire new businesses and assets and successfully integrate those operations and assets into existing businesses as well as successfully expand our facilities, and to consummate asset sales on acceptable terms;
  • Whether we are able to successfully identify, evaluate, and timely execute our capital projects and investment opportunities;
  • The strength and financial resources of our competitors and the effects of competition;
  • The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate;
  • Whether we will be able to effectively execute our financing plan;
  • Increasing scrutiny and changing expectations from stakeholders with respect to our environmental, social, and governance practices;
  • The physical and financial risks associated with climate change;
  • The impacts of operational and developmental hazards and unforeseen interruptions;
  • The risks resulting from outbreaks or other public health crises, including COVID-19;
  • Risks associated with weather and natural phenomena, including climate conditions and physical damage to our facilities;
  • Acts of terrorism, cybersecurity incidents, and related disruptions;
  • Our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans;
  • Changes in maintenance and construction costs, as well as our ability to obtain sufficient construction-related inputs, including skilled labor;
  • Inflation, interest rates, and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers);
  • Risks related to financing, including restrictions stemming from debt agreements, future changes in credit ratings as determined by nationally recognized credit rating agencies, and the availability and cost of capital;
  • The ability of the members of the Organization of Petroleum Exporting Countries and other oil exporting nations to agree to and maintain oil price and production controls and the impact on domestic production;
  • Changes in the current geopolitical situation, including the Russian invasion of Ukraine;
  • 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 (a) Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on February 28, 2022, and (b) Part II, Item 1A. Risk Factors in our Quarterly Report on Form 10-Q for the period ended March 31, 2022.

MEDIA CONTACT:
media@williams.com
(800) 945-8723

INVESTOR CONTACT:
Danilo Juvane
(918) 573-5075

Grace Scott
(918) 573-1092

Source: Williams