Williams Companies, Inc 10-Q for FY2022 Q1

Williams Companies, Inc. (WMB)

10-Q 2022-05-02 For: 2022-03-31

Added on April 08, 2026

About this 10-Q

Williams Companies, Inc filed this 10-Q on May 2, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.52B; down 3.4% from $2.61B a year earlier
Net income: $380M; down 10.8% from net income of $426M a year earlier
Diluted EPS: $0.31; down 11.4% from $0.35 a year earlier

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Delaware						73-0569878
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

One Williams Center
Tulsa, Oklahoma						74172-0172
(Address of principal executive offices)						(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 par value	WMB	New York Stock Exchange


Class						Shares Outstanding at April 28, 2022
Common Stock, $1.00 par value						1,218,011,601


						Page
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statement of Income – Three Months Ended March 31, 2022 and 2021						6
Consolidated Statement of Comprehensive Income (Loss) – Three Months Ended March 31, 2022 and 2021						7
Consolidated Balance Sheet – March 31, 2022 and December 31, 2021						8
Consolidated Statement of Changes in Equity – Three Months Ended March 31, 2022 and 2021						9
Consolidated Statement of Cash Flows – Three Months Ended March 31, 2022 and 2021						10
Notes to Consolidated Financial Statements						11
Note 1 - General, Description of Business, and Basis of Presentation						11
Note 2 - Variable Interest Entities						12
Note 3 - Acquisitions						13
Note 4 - Revenue Recognition						16
Note 5 - Provision (Benefit) for Income Taxes						18
Note 6 - Earnings (Loss) Per Common Share						19
Note 7 - Employee Benefit Plans						19

Note 8 - Debt and Banking Arrangements						20
Note 9 - Stockholders’ Equity						20
Note 1 0 - Fair Value Measurements and Guarantees						21
Note 1 1 - Derivatives						22
Note 1 2 - Contingent Liabilities						24
Note 1 3 - Segment Disclosures						28
Note 1 4 - Subsequent Event						31
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						32
Item 3. Quantitative and Qualitative Disclosures About Market Risk						44
Item 4. Controls and Procedures						45
Part II. Other Information						45
Item 1. Legal Proceedings						45
Item 1A. Risk Factors						46

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						48
Item 6. Exhibits						49


	Three Months Ended March 31,
		2022		2021
		(Millions, except per-share amounts)
Revenues:
Service revenues		$	1,537	$	1,452
Service revenues – commodity consideration		77		49
Product sales		1,104		1,147
Net gain (loss) on commodity derivatives		(194)		(36)
Total revenues		2,524		2,612
Costs and expenses:
Product costs		803		932
Processing commodity expenses		30		21
Operating and maintenance expenses		394		360
Depreciation and amortization expenses		498		438
Selling, general, and administrative expenses		154		123


Other (income) expense – net		(9)		(1)
Total costs and expenses		1,870		1,873
Operating income (loss)		654		739
Equity earnings (losses)		136		131

Other investing income (loss) – net		1		2
Interest incurred		(289)		(296)
Interest capitalized		3		2
Other income (expense) – net		5		(2)
Income (loss) before income taxes		510		576
Less: Provision (benefit) for income taxes		118		141


Net income (loss)		392		435
Less: Net income (loss) attributable to noncontrolling interests		12		9
Net income (loss) attributable to The Williams Companies, Inc.		380		426
Less: Preferred stock dividends		1		1
Net income (loss) available to common stockholders		$	379	$	425



Basic earnings (loss) per common share:


Net income (loss)		$	.31	$	.35
Weighted-average shares (thousands)		1,216,940		1,214,646
Diluted earnings (loss) per common share:


Net income (loss)		$	.31	$	.35
Weighted-average shares (thousands)		1,221,279		1,217,211


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	March 31, 2022		December 31, 2021
	(Millions, except per-share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	604	$	1,680
Trade accounts and other receivables	1,987		1,986
Allowance for doubtful accounts	(14)		(8)
Trade accounts and other receivables – net	1,973		1,978
Inventories	201		379

Derivative assets	104		301
Other current assets and deferred charges	272		211
Total current assets	3,154		4,549
Investments	5,107		5,127
Property, plant, and equipment	44,416		44,184
Accumulated depreciation and amortization	(15,230)		(14,926)
Property, plant, and equipment – net	29,186		29,258
Intangible assets – net of accumulated amortization	7,278		7,402
Regulatory assets, deferred charges, and other	1,324		1,276
Total assets	$	46,049	$	47,612
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,584	$	1,746

Accrued liabilities	1,099		1,201

Long-term debt due within one year	1,625		2,025
Total current liabilities	4,308		4,972
Long-term debt	20,801		21,650
Deferred income tax liabilities	2,570		2,453
Regulatory liabilities, deferred income, and other	4,399		4,436
Contingent liabilities and commitments (Note 12)
Equity:
Stockholders’ equity:
Preferred stock	35		35
Common stock ($1 par value; 1,470 million shares authorized at March 31, 2022 and December 31, 2021; 1,252 million shares issued at March 31, 2022 and 1,250 million shares issued at December 31, 2021)	1,252		1,250
Capital in excess of par value	24,476		24,449
Retained deficit	(13,378)		(13,237)
Accumulated other comprehensive income (loss)	(28)		(33)
Treasury stock, at cost (35 million shares of common stock)	(1,041)		(1,041)
Total stockholders’ equity	11,316		11,423
Noncontrolling interests in consolidated subsidiaries	2,655		2,678
Total equity	13,971		14,101
Total liabilities and equity	$	46,049	$	47,612


	The Williams Companies, Inc. Stockholders
	Preferred Stock		Common Stock		Capital in Excess of Par Value		Retained Deficit		AOCI*		Treasury Stock		Total Stockholders’ Equity		Noncontrolling Interests		Total Equity
	(Millions)
Balance – December 31, 2021	$	35	$	1,250	$	24,449	$	(13,237)	$	(33)	$	(1,041)	$	11,423	$	2,678	$	14,101
Net income (loss)	—		—		—		380		—		—		380		12		392
Other comprehensive income (loss)	—		—		—		—		5		—		5		—		5
Cash dividends – common stock ($0.425 per share)	—		—		—		(518)		—		—		(518)		—		(518)
Dividends and distributions to noncontrolling interests	—		—		—		—		—		—		—		(37)		(37)
Stock-based compensation and related common stock issuances, net of tax	—		2		27		—		—		—		29		—		29


Contributions from noncontrolling interests	—		—		—		—		—		—		—		3		3
Other	—		—		—		(3)		—		—		(3)		(1)		(4)
Net increase (decrease) in equity	—		2		27		(141)		5		—		(107)		(23)		(130)
Balance – March 31, 2022	$	35	$	1,252	$	24,476	$	(13,378)	$	(28)	$	(1,041)	$	11,316	$	2,655	$	13,971


Balance – December 31, 2020	$	35	$	1,248	$	24,371	$	(12,748)	$	(96)	$	(1,041)	$	11,769	$	2,814	$	14,583

Net income (loss)	—		—		—		426		—		—		426		9		435
Other comprehensive income (loss)	—		—		—		—		(4)		—		(4)		—		(4)


Cash dividends – common stock ($0.41 per share)	—		—		—		(498)		—		—		(498)		—		(498)
Dividends and distributions to noncontrolling interests	—		—		—		—		—		—		—		(54)		(54)
Stock-based compensation and related common stock issuances, net of tax	—		1		10		—		—		—		11		—		11


Contributions from noncontrolling interests	—		—		—		—		—		—		—		2		2

Other	—		—		3		(5)		—		—		(2)		—		(2)
Net increase (decrease) in equity	—		1		13		(77)		(4)		—		(67)		(43)		(110)
Balance – March 31, 2021	$	35	$	1,249	$	24,384	$	(12,825)	$	(100)	$	(1,041)	$	11,702	$	2,771	$	14,473


	Transco		Northwest Pipeline		Gulf of Mexico Midstream		Northeast Midstream		West Midstream		Gas & NGL Marketing Services		Other		Eliminations		Total
	(Millions)
Three Months Ended March 31, 2022
Revenues from contracts with customers:
Service revenues:
Regulated interstate natural gas transportation and storage	$	665	$	113	$	—	$	—	$	—	$	—	$	—	$	(18)	$	760
Gathering, processing, transportation, fractionation, and storage:
Monetary consideration	—		—		82		323		317		—		—		(30)		692
Commodity consideration	—		—		21		7		49		—		—		—		77
Other	2		—		6		51		12		1		—		(6)		66
Total service revenues	667		113		109		381		378		1		—		(54)		1,595
Product sales	16		—		87		36		187		2,470		104		(393)		2,507
Total revenues from contracts with customers	683		113		196		417		565		2,471		104		(447)		4,102
Other revenues (1)	3		1		2		6		(3)		1,615		(65)		(3)		1,556
Other adjustments (2)	—		—		—		—		—		(3,232)		—		98		(3,134)
Total revenues	$	686	$	114	$	198	$	423	$	562	$	854	$	39	$	(352)	$	2,524

Three Months Ended March 31, 2021
Revenues from contracts with customers:
Service revenues:
Regulated interstate natural gas transportation and storage	$	625	$	113	$	—	$	—	$	—	$	—	$	—	$	(3)	$	735
Gathering, processing, transportation, fractionation, and storage:
Monetary consideration	—		—		86		311		269		—		—		(28)		638
Commodity consideration	—		—		11		3		35		—		—		—		49
Other	3		—		3		41		19		1		—		(5)		62
Total service revenues	628		113		100		355		323		1		—		(36)		1,484
Product sales	14		—		53		32		150		1,088		56		(248)		1,145
Total revenues from contracts with customers	642		113		153		387		473		1,089		56		(284)		2,629
Other revenues (1)	2		—		2		6		3		(34)		7		(3)		(17)
Total revenues	$	644	$	113	$	155	$	393	$	476	$	1,055	$	63	$	(287)	$	2,612


	Contract Liabilities		Remaining Performance Obligations
	(Millions)
2022 (nine months)	$	98	$	2,683
2023 (one year)	120		3,386
2024 (one year)	119		3,152
2025 (one year)	114		2,623
2026 (one year)	110		2,395

Thereafter	532		17,027
Total	$	1,093	$	31,266


	March 31, 2022		December 31, 2021
	(Millions)
Accounts receivable related to revenues from contracts with customers	$	1,426	$	1,451
Receivables from derivatives	489		462
Other accounts receivable	58		65
Trade accounts and other receivables – net	$	1,973	$	1,978


		Pension Benefits
	Three Months Ended March 31,
		2022		2021
		(Millions)
Components of net periodic benefit cost (credit):
Service cost		$	7	$	8
Interest cost		7		7
Expected return on plan assets		(11)		(11)

Amortization of net actuarial loss		3		4

Net periodic benefit cost (credit)		$	6	$	8


		Other Postretirement Benefits
	Three Months Ended March 31,
		2022		2021
		(Millions)
Components of net periodic benefit cost (credit):

Interest cost		$	1	$	1
Expected return on plan assets		(2)		(2)


Reclassification to regulatory liability		—		1
Net periodic benefit cost (credit)		$	(1)	$	—


(Exact name of registrant as specified in its charter)


Notes (Continued)			Table of Contents


Notes (Continued)			Table of Contents


Notes (Continued)			Table of Contents


	March 31, 2022
	Stated Capacity		Outstanding
	(Millions)

Long-term credit facility (1)	$	3,750	$	—
Letters of credit under certain bilateral bank agreements			16


	Cash Flow Hedges		Foreign Currency Translation		Pension and Other Postretirement Benefits		Total
	(Millions)
Balance at December 31, 2021	$	(2)	$	(1)	$	(30)	$	(33)

Other comprehensive income (loss) before reclassifications	3		—		—		3
Amounts reclassified from accumulated other comprehensive income (loss)	—		—		2		2
Other comprehensive income (loss)	3		—		2		5

Balance at March 31, 2022	$	1	$	(1)	$	(28)	$	(28)


					Fair Value Measurements Using
	Carrying Amount		Fair Value		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Millions)
Assets (liabilities) at March 31, 2022:
Measured on a recurring basis:
ARO Trust investments	$	250	$	250	$	250	$	—	$	—
Commodity derivative assets (1)	81		81		33		47		1

Commodity derivative liabilities (1)	(600)		(600)		(127)		(461)		(12)

Additional disclosures:

Long-term debt, including current portion	(22,426)		(24,301)		—		(24,301)		—
Guarantees	(39)		(26)		—		(10)		(16)

Assets (liabilities) at December 31, 2021:
Measured on a recurring basis:
ARO Trust investments	$	260	$	260	$	260	$	—	$	—
Commodity derivative assets (2)	84		84		2		81		1

Commodity derivative liabilities (2)	(488)		(488)		(69)		(403)		(16)

Additional disclosures:
Long-term debt, including current portion	(23,675)		(27,768)		—		(27,768)		—
Guarantees	(39)		(26)		—		(10)		(16)


	March 31, 2022				December 31, 2021
Derivative Category	Assets		(Liabilities)		Assets		(Liabilities)
	(Millions)





Current	$	657	$	(954)	$	619	$	(760)
Noncurrent	204		(426)		166		(429)
Total derivatives	$	861	$	(1,380)	$	785	$	(1,189)

Gross amounts recognized	$	861	$	(1,380)	$	785	$	(1,189)
Counterparty and collateral netting offset	(716)		903		(476)		772
Amounts recognized in our Consolidated Balance Sheet	$	145	$	(477)	$	309	$	(417)


		Gain (Loss)
	Three Months Ended March 31,
		2022		2021
		(Millions)
Realized commodity-related derivatives designated as hedging instruments		$	—	$	(2)
Realized commodity-related derivatives not designated as hedging instruments		(69)		(34)
Unrealized commodity-related derivative instruments not designated as hedging instruments (1)		(125)		—
Net gain (loss) on commodity derivatives		$	(194)	$	(36)


	Transmission & Gulf of Mexico		Northeast G&P		West		Gas & NGL Marketing Services (1)		Other		Eliminations		Total
	(Millions)




























Three Months Ended March 31, 2022
Segment revenues:
Service revenues
External	$	845	$	370	$	316	$	1	$	5	$	—	$	1,537
Internal	29		10		15		—		4		(58)		—
Total service revenues	874		380		331		1		9		(58)		1,537
Total service revenues – commodity consideration	21		7		49		—		—		—		77
Product sales
External	51		5		11		1,015		22		—		1,104
Internal	49		31		176		(47)		82		(291)		—
Total product sales	100		36		187		968		104		(291)		1,104
Net gain (loss) on commodity derivatives (2)	—		—		(5)		(115)		(74)		—		(194)
Total revenues	$	995	$	423	$	562	$	854	$	39	$	(349)	$	2,524

Three Months Ended March 31, 2021
Segment revenues:
Service revenues
External	$	822	$	347	$	278	$	1	$	4	$	—	$	1,452
Internal	12		11		13		—		3		(39)		—
Total service revenues	834		358		291		1		7		(39)		1,452
Total service revenues – commodity consideration	11		3		35		—		—		—		49
Product sales
External	40		4		15		1,039		49		—		1,147
Internal	27		28		137		49		7		(248)		—
Total product sales	67		32		152		1,088		56		(248)		1,147
Net gain (loss) on commodity derivatives (2)	—		—		(2)		(34)		—		—		(36)
Total revenues	$	912	$	393	$	476	$	1,055	$	63	$	(287)	$	2,612

March 31, 2022
Total assets	$	20,698	$	15,145	$	10,479	$	2,258	$	2,009	$	(4,540)	$	46,049
December 31, 2021
Total assets	$	20,394	$	14,939	$	10,330	$	2,127	$	2,991	$	(3,169)	$	47,612


Management’s Discussion and Analysis (Continued)			Table of Contents


	Three Months Ended March 31,
		2022		2021
		(Millions)
Service revenues		$	1	$	1
Product sales		968		1,088

Net realized gain (loss) from derivative instruments		(56)		(34)
Net unrealized gain (loss) from derivative instruments		(59)		—
Net gain (loss) on commodity derivatives		(115)		(34)

Segment revenues		854		1,055

Product costs		(812)		(959)
Other segment costs and expenses		(29)		(3)
Gas & NGL Marketing Services Modified EBITDA		$	13	$	93

Commodity margins		$	100	$	95


Sources:
			Cash and cash equivalents on hand
			Cash generated from operations
			Distributions from our equity-method investees
			Utilization of our credit facility and/or commercial paper program
			Cash proceeds from issuance of debt and/or equity securities
			Proceeds from asset monetizations

Uses:
			Working capital requirements
			Capital and investment expenditures
			Product costs
			Other operating costs including human capital expenses
			Quarterly dividends to our shareholders
			Debt service payments, including payments of long-term debt
			Distributions to noncontrolling interests
			Share repurchase program


Available Liquidity	March 31, 2022
	(Millions)
Cash and cash equivalents	$	604
Capacity available under our $3.75 billion credit facility, less amounts outstanding under our $3.5 billion commercial paper program (1)	3,750
	$	4,354


	Cash Flow	Three Months Ended March 31,
	Category	2022		2021
		(Millions)
Sources of cash and cash equivalents:
Operating activities – net	Operating	$	1,082	$	915
Proceeds from long-term debt	Financing	3		897



Uses of cash and cash equivalents:
Payments of long-term debt	Financing	(1,256)		(5)
Common dividends paid	Financing	(518)		(498)
Capital expenditures	Investing	(291)		(260)


Dividends and distributions paid to noncontrolling interests	Financing	(37)		(54)
Purchases of and contributions to equity-method investments	Investing	(56)		(14)

Other sources / (uses) – net	Financing and Investing	(3)		3
Increase (decrease) in cash and cash equivalents		$	(1,076)	$	984


	Total Fair Value		Maturity
Fair Value Measurements Using (1)			2022		2023 - 2024		2025 - 2026+
	(Millions)
Level 1	$	(32)	$	15	$	(59)	$	12
Level 2	(408)		(52)		(195)		(161)
Level 3	(11)		4		(14)		(1)
Fair value of contracts outstanding at end of period (2)	$	(451)	$	(33)	$	(268)	$	(150)


	Three Months Ended March 31, 2022
	(Millions)

Average	$	6.2
High	$	10.4
Low	$	4.1


Exhibit No.		Description

2.1	—	Agreement and Plan of Merger dated as of May 16, 2018, by and among The Williams Companies, Inc., SCMS LLC, Williams Partners L.P., and WPZ GP LLC (filed on May 17, 2018 as Exhibit 2.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
2.2	—	Amendment No 1. to Agreement and Plan of Merger dated as of May 1, 2016, by and among The Williams Companies, Inc., Energy Transfer Corp LP, Energy Transfer Corp GP, LLC, Energy Transfer Equity, L.P., LE GP, LLC, and Energy Transfer Equity GP, LLC (filed on May 3, 2016 as Exhibit 2.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
2.3	—	Agreement and Plan of Merger dated as of September 28, 2015, by and among The Williams Companies, Inc., Energy Transfer Corp LP, Energy Transfer Corp GP, LLC, Energy Transfer Equity, L.P., LE GP, LLC, and Energy Transfer Equity GP, LLC (filed on October 1, 2015 as Exhibit 2.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
3.1	—	Amended and Restated Certificate of Incorporation as supplemented (filed on May 26, 2010, as Exhibit 3.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
3.2	—	Certificate of Designations of Series B Preferred Stock of The Williams Companies, Inc. (filed on July 17, 2018 as Exhibit 3.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
3.3	—	Certificate of Amendment dated August 10, 2018 (filed on August 10, 2018 as Exhibit 3.1 to The Williams Companies, Inc.’s current report on Form 8-K (File No. 001-04174) and incorporated herein by reference).
3.4	—	By-Laws of The Williams Companies, Inc., as last amended effective July 28, 2021 (filed on August 2, 2021 as Exhibit 3.4 to The Williams Companies, Inc.’s quarterly report on Form 10‑Q (File No. 00104174) and incorporated herein by reference).
31.1*	—	Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S‑K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	—	Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, and Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32**	—	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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			THE WILLIAMS COMPANIES, INC.
			(Registrant)

			/s/ Mary A. Hausman
			Mary A. Hausman
			Vice President, Chief Accounting Officer and Controller (Duly Authorized Officer and Principal Accounting Officer)


			/s/ Alan S. Armstrong
			Alan S. Armstrong
			President and Chief Executive Officer
			(Principal Executive Officer)


			/s/ John D. Porter
			John D. Porter
			Senior Vice President and Chief Financial Officer
			(Principal Financial Officer)