8-K
WILLIAMS COMPANIES, INC. (WMB)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 1, 2023
The Williams Companies, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 1-4174 | 73-0569878 | |||
|---|---|---|---|---|---|
| (State or other jurisdiction of<br>incorporation) | (Commission <br>File Number) | (IRS Employer <br>Identification No.) | One Williams Center | ||
| --- | --- | ||||
| Tulsa, Oklahoma | 74172-0172 | ||||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 800-945-5426 (800-WILLIAMS)
NOT APPLICABLE
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| 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 |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | ☐ |
|---|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On November 1, 2023, The Williams Companies, Inc. (the "Company") issued a press release announcing its financial results for the quarter ended September 30, 2023. A copy of the press release and accompanying financial highlights and operating statistics and reconciliation schedules are furnished herewith as Exhibit 99.1 and are incorporated herein in their entirety by reference.
The press release and accompanying financial highlights and operating statistics and reconciliation schedules are being furnished pursuant to Item 2.02, Results of Operations and Financial Condition. The information furnished is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits
(a) None
(b) None
(c) None
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release of the Company dated November 1, 2023, publicly announcing the Company's financial results, with Non-GAAP Reconciliations, Financial Highlights, and Operating Statistics, for the quarter ended September 30, 2023. |
| 104 | Cover Page Interactive Data File. The cover page XBRL tags are embedded within the inline XBRL document (contained in Exhibit 101). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE WILLIAMS COMPANIES, INC. | |||
|---|---|---|---|
| (Registrant) | |||
| Dated: | November 1, 2023 | By: | /s/ JOHN D. PORTER |
| John D. Porter | |||
| Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
Document
Exhibit 99.1
| News Release | Williams (NYSE: WMB)<br><br>One Williams Center<br><br>Tulsa, OK 74172<br><br>800-Williams<br><br>www.williams.com |
|---|
DATE: Wednesday, November 1, 2023
| MEDIA CONTACT: | INVESTOR CONTACTS: | |
|---|---|---|
| media@williams.com <br>(800) 945-8723 | Danilo Juvane<br>(918) 573-5075 | Caroline Sardella<br>(918) 230-9992 |
Williams Reports Strong Third-Quarter Results
TULSA, Okla. – Williams (NYSE: WMB) today announced its unaudited financial results for the three and nine months ended September 30, 2023.
Continued strength in base business delivers another quarter of solid financial results
•GAAP net income of $654 million, or $0.54 per diluted share (EPS) – up 10% vs. 3Q 2022
•Adjusted net income of $547 million, or $0.45 per diluted share (Adjusted EPS)
•Adjusted EBITDA of $1.652 billion – up $15 million from 3Q 2022
•Cash flow from operations (CFFO) of $1.234 billion
•Available funds from operations (AFFO) of $1.230 billion
•Dividend coverage ratio of 2.26x (AFFO basis)
•Increased midpoint for full-year 2023 guidance to $6.7 billion Adjusted EBITDA
•Continued improvement of balance sheet with leverage ratio of 3.45x
Steadfast project execution to drive additional business growth in 2023 and beyond; sale of non-core assets and strategic acquisitions fine-tune portfolio
•Placed in-service phase one of Transco's Regional Energy Access expansion Oct. 21 ahead of schedule
•Signed precedent agreements on Transco's Southeast Supply Enhancement
•Signed anchor shipper precedent agreement on MountainWest Uinta Basin expansion project
•Completed NorTex Wolf Hollow, South Mansfield and phase one of Northeast Cardinal Utica expansions
•Sold non-core Bayou Ethane system for an attractive multiple greater than 14x
•Delaware Supreme Court affirms previous rulings in long-standing suit; Energy Transfer ordered to pay $602 million plus additional interest accrued during the appeal to Williams for failed merger
•Optimizing position in DJ Basin through Rocky Mountain Midstream and Cureton Front Range LLC acquisitions
•Assuming operatorship of non-consolidated Blue Racer joint venture
•Supporting two clean hydrogen hubs announced by U.S. Department of Energy
CEO Perspective
Alan Armstrong, president and chief executive officer, made the following comments:
“Williams delivered another quarter of impressive accomplishments with Adjusted EBITDA up 9 percent year-to-date 2023, despite dramatically lower natural gas prices. We expect the strong performance to continue, providing confidence to raise our guidance midpoint by $100 million to $6.7 billion Adjusted EBITDA for 2023.
"Our teams have done an excellent job executing our large-scale expansion projects in a complex and challenging permitting environment. We placed the first phase of our latest Transco expansion project, Regional Energy Access, into service ahead of schedule, progressed on an additional 2 Bcf/d of Transco expansions for completion by year-end 2025, and executed precedent agreements on the 1.4 Bcf/d Southeast Supply
Enhancement project. Our teams also successfully integrated MountainWest into our operations and are executing on more profitable growth with this asset than we had planned. Additionally, we have once again optimized our portfolio, using proceeds from the sale of non-core assets, along with expected proceeds from a recent legal judgement, to strengthen our position and capture tangible synergies in the DJ Basin."
Armstrong added, “Williams has proven its ability to predictably grow through a variety of commodity cycles, and our natural gas strategy is more relevant than ever as demand for natural gas continues to increase, especially to serve electric power generation and LNG exports. Williams is well positioned to capture significant future growth and return value to our shareholders, while we reliably deliver the benefits of natural gas to the United States and abroad."
| Williams Summary Financial Information | 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 | 2023 | 2022 |
| GAAP Measures | |||
| Net Income | 599 | 2,127 | 1,378 |
| Net Income Per Share | 0.49 | 1.74 | 1.13 |
| Cash Flow From Operations | 1,490 | 4,125 | 3,670 |
| Non-GAAP Measures (1) | |||
| Adjusted EBITDA | 1,637 | 5,058 | 4,644 |
| Adjusted Net Income | 592 | 1,746 | 1,575 |
| Adjusted Earnings Per Share | 0.48 | 1.43 | 1.29 |
| Available Funds from Operations | 1,241 | 3,890 | 3,561 |
| Dividend Coverage Ratio | 2.40 | 2.38 | 2.29 |
| Other | |||
| Debt-to-Adjusted EBITDA at Quarter End (2) | 3.68 | ||
| Capital Investments (3) (4) | 526 | 2,045 | 1,271 |
| (1) Schedules reconciling Adjusted Net Income, Adjusted EBITDA, Available Funds from Operations and Dividend Coverage Ratio (non-GAAP measures) to the most comparable GAAP measure are available at www.williams.com and as an attachment to this news release. | |||
| (2) Does not represent leverage ratios measured for WMB credit agreement compliance or leverage ratios as calculated by the major credit ratings agencies. Debt is net of cash on hand, and Adjusted EBITDA reflects the sum of the last four quarters. | |||
| (3) Capital Investments includes increases to property, plant, and equipment (growth & maintenance capital),purchases of and contributions to equity-method investments and purchases of other long-term investments. | |||
| (4) Third-quarter and year-to-date 2023 capital excludes (29 million) and 1.024 billion, respectively for the acquisition of MountainWest Pipeline Holding company, which closed February 14, 2023. Third-quarter and year-to-date 2022 capital excludes 424 million for the purchase of NorTex Midstream, which closed August 31, 2022. Year-to-date 2022 capital also excludes 933 million for purchase of the Trace Midstream Haynesville gathering assets, which closed April 29, 2022. |
All values are in US Dollars.
GAAP Measures
Third-quarter 2023 net income increased by $55 million compared to the prior year reflecting a $130 million gain on the sale of the Bayou Ethane system and the benefit of higher service revenues driven by contributions from recent acquisitions and increased volumes and rates in the Northeast G&P segment. These improvements were partially offset by our $31 million share of a loss contingency accrual on our Aux Sable equity-method investment and lower results from our upstream business reflecting lower prices partially offset by higher production volumes, and higher operating expenses. The tax provision increased $80 million primarily due to a lower benefit associated with decreases in our estimate of the state deferred income tax rate in both periods and higher pretax income, partially offset by the absence of an unfavorable revision to a state net operating loss carryforward in 2022.
For year-to-date 2023, net income increased $749 million compared to the prior year reflecting a favorable change of $762 million in net unrealized gains/losses on commodity derivatives. Other drivers of the year-to-date increase are similar to those described for the quarterly comparison, except that improved marketing margins more than offset lower natural gas liquids (NGL) processing margins for the year-to-date period. The tax provision increased primarily due to higher pretax income and the absence of $134 million benefit associated with the release of valuation allowances on deferred income tax assets and federal income tax settlements recorded in the prior year, and a lower benefit associated with decreases in our estimate of the state deferred income tax rate in
both periods. The year-to-date 2023 period also reported a loss from discontinued operations associated with an adverse legal ruling involving former refinery operations.
Cash flow from operations for the third-quarter decreased compared to the prior year primarily due to unfavorable net changes in working capital and lower distributions from certain equity method investments, partially offset by higher operating results exclusive of noncash items. Year-to-date cash flow from operations increased compared to the prior year primarily due to higher operating results exclusive of non-cash items and favorable changes in derivative margin requirements, partially offset by lower distributions from certain equity method investments.
Non-GAAP Measures
Third-quarter 2023 Adjusted EBITDA increased by $15 million over the prior year, driven by the previously described higher service revenues, partially offset by reduced upstream results, lower marketing margins, higher operating costs and lower JV proportional EBITDA. Year-to-date 2023 Adjusted EBITDA increased by $414 million over the prior year, driven by similar factors, except that marketing margins were overall improved.
Third-quarter 2023 Adjusted Net Income decreased by $45 million compared to the prior year, driven by the previously described impacts to net income, adjusted primarily to remove the effects of net unrealized gains/losses on commodity derivatives, the gain on the sale of certain Gulf coast liquids pipelines, amortization of certain assets from the Sequent acquisition, our share of Aux Sable’s loss contingency accrual, NGL linefill volatility, and favorable income tax benefits. Year-to-date Adjusted Net Income increased by $171 million over the prior year driven by the previously described impacts to year-to-date income, adjusted primarily for similar items.
Third-quarter 2023 Available Funds From Operations (AFFO) decreased slightly by $11 million compared to the prior year primarily due to lower distributions from certain equity method investments partially offset by higher operating results exclusive of noncash items. Year-to-date 2023 AFFO increased by $329 million primarily reflecting higher results from continuing operations exclusive of non-cash items partially offset by lower distributions from certain equity method investments.
| Third Quarter | Year to Date | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Amounts in millions | Modified EBITDA | Adjusted EBITDA | Modified EBITDA | Adjusted EBITDA | |||||||||
| 3Q 2023 | |||||||||||||
| Transmission & Gulf of Mexico | 881 | 638 | 243 | 754 | 671 | 83 | 2,327 | 1,987 | 340 | 2,230 | 2,020 | $210 | |
| Northeast G&P | 454 | 464 | (10) | 485 | 464 | 21 | 1,439 | 1,332 | 107 | 1,470 | 1,332 | 138 | |
| West | 315 | 337 | (22) | 315 | 337 | (22) | 931 | 885 | 46 | 913 | 893 | 20 | |
| Gas & NGL Marketing Services | 43 | 20 | 23 | 16 | 38 | (22) | 678 | (249) | 927 | 231 | 109 | 122 | |
| Other | 81 | 140 | (59) | 82 | 127 | (45) | 196 | 284 | (88) | 214 | 290 | (76) | |
| Total | 1,774 | 1,599 | 175 | 1,652 | 1,637 | 15 | 5,571 | 4,239 | 1,332 | 5,058 | 4,644 | $414 | |
| Note: Williams uses Modified EBITDA for its segment reporting. Definitions of Modified EBITDA and Adjusted EBITDA and schedules reconciling to net income are included in this news release. |
All values are in US Dollars.
Transmission & Gulf of Mexico
Third-quarter and year-to-date 2023 Modified and Adjusted EBITDA improved compared to the prior year driven by the MountainWest and NorTex Midstream acquisitions, higher service revenues, lower employee-related costs and increased benefit of allowance for equity funds used during construction. Modified EBITDA for 2023 was further impacted by the gain on the sale the Bayou Ethane system and one-time MountainWest acquisition and transition costs, while 2022 included a loss related to Eminence storage cavern abandonments and a regulatory charge associated with Transco’s deferred state income tax rate, all of which are excluded from Adjusted EBITDA.
Northeast G&P
Third-quarter and year-to-date 2023 Modified and Adjusted EBITDA reflect increased gathering rates and volumes, partially offset by lower rates at Laurel Mountain Midstream and Bradford joint ventures compared to the prior year. Modified EBITDA for 2023 also reflects our share of a loss contingency accrual at Aux Sable which is excluded from Adjusted EBITDA.
West
Third-quarter 2023 Modified and Adjusted EBITDA decreased compared to the prior year primarily reflecting lower NYMEX-based rates in the Barnett partially offset by favorable changes in realized gains on natural gas hedges. Year-to-date Modified and Adjusted EBITDA improved compared to the prior year driven by higher service
revenues reflecting realized gains on natural gas hedges and higher Haynesville volumes, partially offset by lower NYMEX-based rates in the Barnett, as well increased JV EBITDA. The year-to-date period improvement also included contributions from Trace Midstream acquired in April 2022 and lower processing margins reflecting a short-term gas price spike at Opal early in the year and severe weather impacts.
Gas & NGL Marketing Services
Third-quarter 2023 Modified EBITDA improved from the prior year primarily reflecting a net favorable change in unrealized gains/losses on commodity derivatives. Year-to-date 2023 Modified EBITDA improved from the prior year primarily reflecting higher commodity marketing margins and a $791 million net favorable change in unrealized gains/losses on commodity derivatives. The unrealized gains/losses on commodity derivatives are excluded from Adjusted EBITDA.
Other
Third-quarter and year-to-date 2023 Modified and Adjusted EBITDA decreased compared to the prior year primarily reflecting lower results from our upstream business driven by lower prices, partially offset by higher production volumes. Modified EBITDA also includes net unfavorable changes in unrealized gains/losses on commodity derivatives for both the quarter and year-to-date comparative periods, which is excluded from Adjusted EBITDA.
Optimizing portfolio through non-core asset sale and re-investing in assets strategic to footprint
In the third quarter, Williams sold its Bayou Ethane system for $348 million in cash, representing a last-twelve-month multiple over 14x Adjusted EBITDA. The transaction includes long-term ethane take away agreements, locking in flow assurance for Discovery and Mobile Bay producers. The proceeds from the sale will contribute to funding Williams’ extensive portfolio of attractive growth capital investments, including transactions in Colorado’s Denver-Julesburg (“DJ”) Basin:
•Williams has agreed to acquire Cureton Front Range LLC, whose assets include gas gathering pipelines and two processing plants to serve producers across 225,000 dedicated acres.
•Williams has also agreed to purchase KKR’s 50 percent ownership interest in Rocky Mountain Midstream, resulting in 100 percent ownership of Rocky Mountain Midstream for Williams.
The acquisitions have a combined value of $1.27 billion, representing a blended multiple of approximately 7x expected 2024 Adjusted EBITDA. The combination of these two assets will further drive down purchase multiple via increased volumes on existing processing facilities, as well as downstream NGL transportation, fractionation and storage assets. The transactions are expected to close by the end of 2023, making Williams the third largest gatherer in the DJ Basin and progressing toward the company's strategy of maintaining top positions in its areas of operation.
Business Segment Results & Form 10-Q
Williams' operations are comprised of the following reportable segments: Transmission & Gulf of Mexico, Northeast G&P, West and Gas & NGL Marketing Services, as well as Other. For more information, see the company's third-quarter 2023 Form 10-Q.
2023 Financial Guidance
The company increased its midpoint of guidance and now expects 2023 Adjusted EBITDA between $6.6 billion and $6.8 billion. Growth capex guidance remains the same; between $1.6 billion to $1.9 billion. Importantly, Williams anticipates a leverage ratio midpoint of 3.65x, which will allow it to retain financial flexibility. The dividend was increased by 5.3% on an annualized basis to $1.79 in 2023 from $1.70 in 2022.
Williams' Third-Quarter 2023 Materials to be Posted Shortly; Q&A Webcast Scheduled for Tomorrow
Williams' third-quarter 2023 earnings presentation will be posted at www.williams.com. The company’s third-quarter 2023 earnings conference call and webcast with analysts and investors is scheduled for Thursday, November 2, at 9:30 a.m. Eastern Time (8:30 a.m. Central Time). Participants who wish to join the call by phone must register using the following link: https://conferencingportals.com/event/MTgNWtxQ
A webcast link to the conference call will be provided on Williams’ Investor Relations website. A replay of the webcast will be available on the website for at least 90 days following the event.
About Williams
As the world demands reliable, low-cost, low-carbon energy, Williams (NYSE: WMB) will be there with the best transport, storage and delivery solutions to reliably fuel the clean energy economy. Headquartered in Tulsa, Oklahoma, Williams is an industry-leading, investment grade C-Corp with operations across the natural gas value chain including gathering, processing, interstate transportation, storage, wholesale marketing and trading of natural gas and natural gas liquids. With major positions in top U.S. supply basins, Williams connects the best supplies with the growing demand for clean energy. Williams owns and operates more than 33,000 miles of pipelines system wide – including Transco, the nation’s largest volume natural gas pipeline – and handles approximately one third of the natural gas in the United States that is used every day for clean-power generation, heating and industrial use. Learn how the company is leveraging its nationwide footprint to incorporate clean hydrogen, NextGen Gas and other innovations at www.williams.com.
The Williams Companies, Inc.
Consolidated Statement of Income
(Unaudited)
| Three Months Ended <br>September 30, | Nine Months Ended <br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||
| (Millions, except per-share amounts) | ||||||||
| Revenues: | ||||||||
| Service revenues | $ | 1,770 | $ | 1,685 | $ | 5,212 | $ | 4,828 |
| Service revenues – commodity consideration | 45 | 60 | 108 | 223 | ||||
| Product sales | 720 | 1,260 | 2,158 | 3,475 | ||||
| Net gain (loss) on commodity derivatives | 24 | 16 | 645 | (491) | ||||
| Total revenues | 2,559 | 3,021 | 8,123 | 8,035 | ||||
| Costs and expenses: | ||||||||
| Product costs | 484 | 990 | 1,458 | 2,650 | ||||
| Net processing commodity expenses | 31 | 29 | 129 | 99 | ||||
| Operating and maintenance expenses | 522 | 486 | 1,466 | 1,345 | ||||
| Depreciation and amortization expenses | 521 | 500 | 1,542 | 1,504 | ||||
| Selling, general, and administrative expenses | 146 | 163 | 483 | 477 | ||||
| Gain on sale of business | (130) | — | (130) | — | ||||
| Other (income) expense – net | (9) | 33 | (49) | 14 | ||||
| Total costs and expenses | 1,565 | 2,201 | 4,899 | 6,089 | ||||
| Operating income (loss) | 994 | 820 | 3,224 | 1,946 | ||||
| Equity earnings (losses) | 127 | 193 | 434 | 492 | ||||
| Other investing income (loss) – net | 24 | 1 | 45 | 4 | ||||
| Interest incurred | (330) | (296) | (953) | (871) | ||||
| Interest capitalized | 16 | 5 | 39 | 13 | ||||
| Other income (expense) – net | 30 | (6) | 69 | 5 | ||||
| Income (loss) before income taxes | 861 | 717 | 2,858 | 1,589 | ||||
| Less: Provision (benefit) for income taxes | 176 | 96 | 635 | 169 | ||||
| Income (loss) from continuing operations | 685 | 621 | 2,223 | 1,420 | ||||
| Income (loss) from discontinued operations | (1) | — | (88) | — | ||||
| Net income (loss) | 684 | 621 | 2,135 | 1,420 | ||||
| Less: Net income (loss) attributable to noncontrolling interests | 30 | 21 | 94 | 40 | ||||
| Net income (loss) attributable to The Williams Companies, Inc. | 654 | 600 | 2,041 | 1,380 | ||||
| Less: Preferred stock dividends | 1 | 1 | 2 | 2 | ||||
| Net income (loss) available to common stockholders | $ | 653 | $ | 599 | $ | 2,039 | $ | 1,378 |
| Amounts attributable to The Williams Companies, Inc. available to common stockholders: | ||||||||
| Income (loss) from continuing operations | $ | 654 | $ | 599 | $ | 2,127 | $ | 1,378 |
| Income (loss) from discontinued operations | (1) | — | (88) | — | ||||
| Net income (loss) available to common stockholders | $ | 653 | $ | 599 | $ | 2,039 | $ | 1,378 |
| Basic earnings (loss) per common share: | ||||||||
| Income (loss) from continuing operations | $ | .54 | $ | .49 | $ | 1.74 | $ | 1.13 |
| Income (loss) from discontinued operations | — | — | (.07) | — | ||||
| Net income (loss) available to common stockholders | $ | .54 | $ | .49 | $ | 1.67 | $ | 1.13 |
| Weighted-average shares (thousands) | 1,216,951 | 1,218,964 | 1,218,021 | 1,218,202 | ||||
| Diluted earnings (loss) per common share: | ||||||||
| Income (loss) from continuing operations | $ | .54 | $ | .49 | $ | 1.74 | $ | 1.13 |
| Income (loss) from discontinued operations | — | — | (.07) | — | ||||
| Net income (loss) available to common stockholders | $ | .54 | $ | .49 | $ | 1.67 | $ | 1.13 |
| Weighted-average shares (thousands) | 1,220,073 | 1,222,472 | 1,222,650 | 1,222,153 |
The Williams Companies, Inc.
Consolidated Balance Sheet
(Unaudited)
| September 30,<br>2023 | December 31,<br>2022 | |||
|---|---|---|---|---|
| (Millions, except per-share amounts) | ||||
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 2,074 | $ | 152 |
| Trade accounts and other receivables (net of allowance of $3 at September 30, 2023 and $6 at December 31, 2022) | 1,419 | 2,723 | ||
| Inventories | 266 | 320 | ||
| Derivative assets | 243 | 323 | ||
| Other current assets and deferred charges | 254 | 279 | ||
| Total current assets | 4,256 | 3,797 | ||
| Investments | 4,998 | 5,065 | ||
| Property, plant, and equipment | 50,805 | 47,057 | ||
| Accumulated depreciation and amortization | (18,177) | (16,168) | ||
| Property, plant, and equipment – net | 32,628 | 30,889 | ||
| Intangible assets – net of accumulated amortization | 7,459 | 7,363 | ||
| Regulatory assets, deferred charges, and other | 1,447 | 1,319 | ||
| Total assets | $ | 50,788 | $ | 48,433 |
| LIABILITIES AND EQUITY | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 1,358 | $ | 2,327 |
| Derivative liabilities | 123 | 316 | ||
| Accrued and other current liabilities | 1,166 | 1,270 | ||
| Commercial paper | — | 350 | ||
| Long-term debt due within one year | 2,879 | 627 | ||
| Total current liabilities | 5,526 | 4,890 | ||
| Long-term debt | 22,772 | 21,927 | ||
| Deferred income tax liabilities | 3,496 | 2,887 | ||
| Regulatory liabilities, deferred income, and other | 4,651 | 4,684 | ||
| Contingent liabilities and commitments | ||||
| Equity: | ||||
| Stockholders’ equity: | ||||
| Preferred stock ($1 par value; 30 million shares authorized at September 30, 2023 and December 31, 2022; 35,000 shares issued at September 30, 2023 and December 31, 2022) | 35 | 35 | ||
| Common stock ($1 par value; 1,470 million shares authorized at September 30, 2023 and December 31, 2022; 1,256 million shares issued at September 30, 2023 and 1,253 million shares issued at December 31, 2022) | 1,256 | 1,253 | ||
| Capital in excess of par value | 24,562 | 24,542 | ||
| Retained deficit | (12,876) | (13,271) | ||
| Accumulated other comprehensive income (loss) | 48 | (24) | ||
| Treasury stock, at cost (39 million shares at September 30, 2023 and 35 million shares at December 31, 2022 of common stock) | (1,180) | (1,050) | ||
| Total stockholders’ equity | 11,845 | 11,485 | ||
| Noncontrolling interests in consolidated subsidiaries | 2,498 | 2,560 | ||
| Total equity | 14,343 | 14,045 | ||
| Total liabilities and equity | $ | 50,788 | $ | 48,433 |
The Williams Companies, Inc.
Consolidated Statement of Cash Flows
(Unaudited)
| Nine Months Ended <br>September 30, | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||||||||||||||
| (Millions) | ||||||||||||||||||
| OPERATING ACTIVITIES: | ||||||||||||||||||
| Net income (loss) | $ | 2,135 | $ | 1,420 | ||||||||||||||
| Adjustments to reconcile to net cash provided (used) by operating activities: | ||||||||||||||||||
| Depreciation and amortization | 1,542 | 1,504 | ||||||||||||||||
| Provision (benefit) for deferred income taxes | 586 | 182 | ||||||||||||||||
| Equity (earnings) losses | (434) | (492) | ||||||||||||||||
| Distributions from equity-method investees | 607 | 688 | ||||||||||||||||
| Net unrealized (gain) loss from derivative instruments | (433) | 329 | ||||||||||||||||
| Gain on sale of business | (130) | — | ||||||||||||||||
| Inventory write-downs | 28 | 76 | ||||||||||||||||
| Amortization of stock-based awards | 59 | 58 | ||||||||||||||||
| Cash provided (used) by changes in current assets and liabilities: | ||||||||||||||||||
| Accounts receivable | 1,295 | (672) | ||||||||||||||||
| Inventories | 29 | (152) | ||||||||||||||||
| Other current assets and deferred charges | (5) | (62) | ||||||||||||||||
| Accounts payable | (1,072) | 743 | ||||||||||||||||
| Accrued and other current liabilities | (114) | 167 | ||||||||||||||||
| Changes in current and noncurrent derivative assets and liabilities | 172 | 86 | ||||||||||||||||
| Other, including changes in noncurrent assets and liabilities | (140) | (205) | ||||||||||||||||
| Net cash provided (used) by operating activities | 4,125 | 3,670 | ||||||||||||||||
| FINANCING ACTIVITIES: | ||||||||||||||||||
| Proceeds from (payments of) commercial paper – net | (352) | — | ||||||||||||||||
| Proceeds from long-term debt | 2,754 | 1,752 | ||||||||||||||||
| Payments of long-term debt | (21) | (2,019) | ||||||||||||||||
| Proceeds from issuance of common stock | 8 | 53 | ||||||||||||||||
| Purchases of treasury stock | (130) | (9) | ||||||||||||||||
| Common dividends paid | (1,635) | (1,553) | ||||||||||||||||
| Dividends and distributions paid to noncontrolling interests | (174) | (141) | ||||||||||||||||
| Contributions from noncontrolling interests | 18 | 15 | ||||||||||||||||
| Payments for debt issuance costs | (21) | (14) | ||||||||||||||||
| Other – net | (19) | (40) | ||||||||||||||||
| Net cash provided (used) by financing activities | 428 | (1,956) | ||||||||||||||||
| INVESTING ACTIVITIES: | ||||||||||||||||||
| Property, plant, and equipment: | ||||||||||||||||||
| Capital expenditures (1) | (1,845) | (1,447) | ||||||||||||||||
| Dispositions – net | (33) | (19) | ||||||||||||||||
| Contributions in aid of construction | 20 | 8 | ||||||||||||||||
| Proceeds from sale of business | 348 | — | ||||||||||||||||
| Purchases of businesses, net of cash acquired | (1,024) | (933) | ||||||||||||||||
| Purchases of and contributions to equity-method investments | (80) | (140) | ||||||||||||||||
| Other – net | (17) | (4) | ||||||||||||||||
| Net cash provided (used) by investing activities | (2,631) | (2,535) | ||||||||||||||||
| Increase (decrease) in cash and cash equivalents | 1,922 | (821) | ||||||||||||||||
| Cash and cash equivalents at beginning of year | 152 | 1,680 | ||||||||||||||||
| Cash and cash equivalents at end of period | $ | 2,074 | $ | 859 | ||||||||||||||
| _____________ | ||||||||||||||||||
| (1) Increases to property, plant, and equipment | $ | (1,960) | $ | (1,549) | ||||||||||||||
| Changes in related accounts payable and accrued liabilities | 115 | 102 | ||||||||||||||||
| Capital expenditures | $ | (1,845) | $ | (1,447) | ||||||||||||||
| Transmission & Gulf of Mexico | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (UNAUDITED) | ||||||||||||||||||
| 2022 | 2023 | |||||||||||||||||
| (Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | Year | |||||||||
| Regulated interstate natural gas transportation, storage, and other revenues (1) | $ | 730 | $ | 717 | $ | 734 | $ | 758 | $ | 2,939 | $ | 774 | $ | 786 | $ | 794 | $ | 2,354 |
| Gathering, processing, storage and transportation revenues | 82 | 84 | 99 | 100 | 365 | 100 | 104 | 114 | 318 | |||||||||
| Other fee revenues (1) | 5 | 5 | 4 | 7 | 21 | 6 | 8 | 5 | 19 | |||||||||
| Commodity margins | 15 | 11 | 10 | 7 | 43 | 10 | 8 | 7 | 25 | |||||||||
| Net unrealized gain (loss) from derivative instruments | — | — | 1 | (1) | — | — | — | — | — | |||||||||
| Operating and administrative costs (1) | (202) | (227) | (238) | (239) | (906) | (254) | (254) | (257) | (765) | |||||||||
| Other segment income (expenses) - net (1) | 19 | 17 | (22) | 5 | 19 | 26 | 31 | 36 | 93 | |||||||||
| Gain on sale of business | — | — | — | — | — | — | — | 130 | 130 | |||||||||
| Proportional Modified EBITDA of equity-method investments | 48 | 45 | 50 | 50 | 193 | 53 | 48 | 52 | 153 | |||||||||
| Modified EBITDA | 697 | 652 | 638 | 687 | 2,674 | 715 | 731 | 881 | 2,327 | |||||||||
| Adjustments | — | — | 33 | 13 | 46 | 13 | 17 | (127) | (97) | |||||||||
| Adjusted EBITDA | $ | 697 | $ | 652 | $ | 671 | $ | 700 | $ | 2,720 | $ | 728 | $ | 748 | $ | 754 | $ | 2,230 |
| Statistics for Operated Assets | ||||||||||||||||||
| Natural Gas Transmission (2) | ||||||||||||||||||
| Transcontinental Gas Pipe Line | ||||||||||||||||||
| Avg. daily transportation volumes (MMdth) | 15.0 | 13.5 | 14.7 | 14.2 | 14.4 | 14.3 | 13.2 | 14.0 | 13.8 | |||||||||
| Avg. daily firm reserved capacity (MMdth) | 19.3 | 19.1 | 19.2 | 19.3 | 19.2 | 19.5 | 19.4 | 19.4 | 19.4 | |||||||||
| Northwest Pipeline LLC | ||||||||||||||||||
| Avg. daily transportation volumes (MMdth) | 2.8 | 2.1 | 2.0 | 2.9 | 2.5 | 3.1 | 2.3 | 2.3 | 2.6 | |||||||||
| Avg. daily firm reserved capacity (MMdth) | 3.8 | 3.8 | 3.8 | 3.8 | 3.8 | 3.8 | 3.8 | 3.8 | 3.8 | |||||||||
| MountainWest (3) | ||||||||||||||||||
| Avg. daily transportation volumes (MMdth) | — | — | — | — | — | 4.2 | 3.2 | 3.8 | 3.7 | |||||||||
| Avg. daily firm reserved capacity (MMdth) | — | — | — | — | — | 7.8 | 7.5 | 7.5 | 7.6 | |||||||||
| Gulfstream - Non-consolidated | ||||||||||||||||||
| Avg. daily transportation volumes (MMdth) | 0.9 | 1.3 | 1.4 | 1.1 | 1.3 | 1.0 | 1.2 | 1.4 | 1.2 | |||||||||
| Avg. daily firm reserved capacity (MMdth) | 1.3 | 1.3 | 1.4 | 1.4 | 1.4 | 1.4 | 1.4 | 1.4 | 1.4 | |||||||||
| Gathering, Processing, and Crude Oil Transportation | ||||||||||||||||||
| Consolidated (4) | ||||||||||||||||||
| Gathering volumes (Bcf/d) | 0.30 | 0.28 | 0.29 | 0.28 | 0.29 | 0.28 | 0.23 | 0.27 | 0.26 | |||||||||
| Plant inlet natural gas volumes (Bcf/d) | 0.48 | 0.46 | 0.49 | 0.46 | 0.47 | 0.43 | 0.40 | 0.46 | 0.43 | |||||||||
| NGL production (Mbbls/d) | 31 | 31 | 26 | 26 | 28 | 28 | 24 | 28 | 27 | |||||||||
| NGL equity sales (Mbbls/d) | 7 | 7 | 4 | 5 | 6 | 7 | 5 | 6 | 6 | |||||||||
| Crude oil transportation volumes (Mbbls/d) | 110 | 124 | 125 | 118 | 119 | 119 | 111 | 134 | 121 | |||||||||
| Non-consolidated (5) | ||||||||||||||||||
| Gathering volumes (Bcf/d) | 0.39 | 0.37 | 0.41 | 0.42 | 0.40 | 0.36 | 0.30 | 0.36 | 0.34 | |||||||||
| Plant inlet natural gas volumes (Bcf/d) | 0.38 | 0.37 | 0.41 | 0.42 | 0.40 | 0.36 | 0.30 | 0.36 | 0.34 | |||||||||
| NGL production (Mbbls/d) | 28 | 26 | 29 | 29 | 28 | 28 | 21 | 30 | 26 | |||||||||
| NGL equity sales (Mbbls/d) | 8 | 6 | 7 | 10 | 8 | 8 | 3 | 8 | 7 | |||||||||
| (1) Excludes certain amounts associated with revenues and operating costs for tracked or reimbursable charges. | ||||||||||||||||||
| (2) Tbtu converted to MMdth at one trillion British thermal units = one million dekatherms. | ||||||||||||||||||
| (3) Includes 100% of the volumes associated with the MountainWest Acquisition transmission assets after the purchase on February 14, 2023, including 100% of the volumes associated with the operated equity-method investment White River Hub, LLC. Average volumes were calculated over the period owned. | ||||||||||||||||||
| (4) Excludes volumes associated with equity-method investments that are not consolidated in our results. | ||||||||||||||||||
| (5) Includes 100% of the volumes associated with operated equity-method investments, including Discovery Producer Services. | ||||||||||||||||||
| Northeast G&P | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (UNAUDITED) | ||||||||||||||||||
| 2022 | 2023 | |||||||||||||||||
| (Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | Year | |||||||||
| Gathering, processing, transportation, and fractionation revenues | $ | 323 | $ | 350 | $ | 354 | $ | 368 | $ | 1,395 | $ | 391 | $ | 431 | $ | 417 | $ | 1,239 |
| Other fee revenues (1) | 27 | 27 | 27 | 46 | 127 | 32 | 27 | 27 | 86 | |||||||||
| Commodity margins | 6 | 1 | 3 | — | 10 | 5 | (1) | 7 | 11 | |||||||||
| Operating and administrative costs (1) | (85) | (102) | (101) | (97) | (385) | (101) | (101) | (115) | (317) | |||||||||
| Other segment income (expenses) - net | (3) | — | (1) | (1) | (5) | — | — | (1) | (1) | |||||||||
| Proportional Modified EBITDA of equity-method investments | 150 | 174 | 182 | 148 | 654 | 143 | 159 | 119 | 421 | |||||||||
| Modified EBITDA | 418 | 450 | 464 | 464 | 1,796 | 470 | 515 | 454 | 1,439 | |||||||||
| Our share of accrual for loss contingency at Aux Sable Liquid Products LP | — | — | — | — | — | — | — | 31 | 31 | |||||||||
| Adjusted EBITDA | $ | 418 | $ | 450 | $ | 464 | $ | 464 | $ | 1,796 | $ | 470 | $ | 515 | $ | 485 | $ | 1,470 |
| Statistics for Operated Assets and non-operated Blue Racer Midstream | ||||||||||||||||||
| Gathering and Processing | ||||||||||||||||||
| Consolidated (2) | ||||||||||||||||||
| Gathering volumes (Bcf/d) (3) | 4.03 | 4.19 | 4.22 | 4.31 | 4.19 | 4.42 | 4.61 | 4.41 | 4.48 | |||||||||
| Plant inlet natural gas volumes (Bcf/d) | 1.46 | 1.70 | 1.74 | 1.70 | 1.65 | 1.92 | 1.79 | 1.93 | 1.88 | |||||||||
| NGL production (Mbbls/d) | 110 | 118 | 125 | 127 | 120 | 144 | 135 | 144 | 141 | |||||||||
| NGL equity sales (Mbbls/d) | 2 | 1 | 1 | 1 | 1 | 1 | 1 | — | 1 | |||||||||
| Non-consolidated (4) | ||||||||||||||||||
| Gathering volumes (Bcf/d) | 6.62 | 6.76 | 6.58 | 6.48 | 6.61 | 6.97 | 7.03 | 6.83 | 6.94 | |||||||||
| Plant inlet natural gas volumes (Bcf/d) | 0.66 | 0.76 | 0.66 | 0.77 | 0.71 | 0.77 | 0.93 | 0.99 | 0.90 | |||||||||
| NGL production (Mbbls/d) | 50 | 53 | 45 | 56 | 51 | 54 | 64 | 71 | 63 | |||||||||
| NGL equity sales (Mbbls/d) | 4 | 3 | 2 | 2 | 3 | 4 | 5 | 4 | 4 | |||||||||
| (1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges. | ||||||||||||||||||
| (2) Includes volumes associated with Susquehanna Supply Hub, the Northeast JV, and Utica Supply Hub, all of which are consolidated. | ||||||||||||||||||
| (3) 1st Qtr 2023 and 2nd Qtr 2023 volumes have been revised for a correction. | ||||||||||||||||||
| (4) Includes 100% of the volumes associated with operated equity-method investments, including the Laurel Mountain Midstream partnership; and the Bradford Supply Hub and the Marcellus South Supply Hub within the Appalachia Midstream Services partnership. Also, all periods include non-operated Blue Racer Midstream. | ||||||||||||||||||
| West | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (UNAUDITED) | ||||||||||||||||||
| 2022 | 2023 | |||||||||||||||||
| (Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | Year | |||||||||
| Net gathering, processing, transportation, storage, and fractionation revenues | $ | 317 | $ | 360 | $ | 397 | $ | 401 | $ | 1,475 | $ | 382 | $ | 373 | $ | 371 | $ | 1,126 |
| Other fee revenues (1) | 6 | 6 | 6 | 5 | 23 | 5 | 7 | 4 | 16 | |||||||||
| Commodity margins | 23 | 25 | 27 | 27 | 102 | (24) | 18 | 21 | 15 | |||||||||
| Operating and administrative costs (1) | (112) | (133) | (128) | (133) | (506) | (115) | (122) | (122) | (359) | |||||||||
| Other segment income (expenses) - net | (1) | (1) | (6) | (7) | (15) | 23 | (7) | (4) | 12 | |||||||||
| Proportional Modified EBITDA of equity-method investments | 27 | 31 | 41 | 33 | 132 | 33 | 43 | 45 | 121 | |||||||||
| Modified EBITDA | 260 | 288 | 337 | 326 | 1,211 | 304 | 312 | 315 | 931 | |||||||||
| Adjustments | — | 8 | — | — | 8 | (18) | — | — | (18) | |||||||||
| Adjusted EBITDA | $ | 260 | $ | 296 | $ | 337 | $ | 326 | $ | 1,219 | $ | 286 | $ | 312 | $ | 315 | $ | 913 |
| Statistics for Operated Assets | ||||||||||||||||||
| Gathering and Processing | ||||||||||||||||||
| Consolidated (2) | ||||||||||||||||||
| Gathering volumes (Bcf/d) (3) | 3.47 | 5.14 | 5.20 | 5.50 | 5.19 | 5.47 | 5.51 | 5.60 | 5.52 | |||||||||
| Plant inlet natural gas volumes (Bcf/d) | 1.13 | 1.14 | 1.21 | 1.10 | 1.15 | 0.92 | 1.06 | 1.12 | 1.04 | |||||||||
| NGL production (Mbbls/d) | 47 | 49 | 45 | 32 | 43 | 25 | 40 | 61 | 42 | |||||||||
| NGL equity sales (Mbbls/d) | 17 | 18 | 13 | 7 | 14 | 6 | 16 | 22 | 15 | |||||||||
| Non-consolidated (4) | ||||||||||||||||||
| Gathering volumes (Bcf/d) | 0.28 | 0.28 | 0.29 | 0.29 | 0.29 | 0.32 | 0.33 | 0.33 | 0.33 | |||||||||
| Plant inlet natural gas volumes (Bcf/d) | 0.27 | 0.28 | 0.29 | 0.29 | 0.28 | 0.32 | 0.32 | 0.32 | 0.32 | |||||||||
| NGL production (Mbbls/d) | 31 | 32 | 34 | 32 | 33 | 37 | 38 | 38 | 38 | |||||||||
| NGL and Crude Oil Transportation volumes (Mbbls/d) (5) | 132 | 162 | 189 | 151 | 158 | 161 | 217 | 244 | 208 | |||||||||
| (1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges. | ||||||||||||||||||
| (2) Excludes volumes associated with equity-method investments that are not consolidated in our results. | ||||||||||||||||||
| (3) Includes 100% of the volumes associated with the Trace Acquisition gathering assets after the purchase on April 29, 2022. Average volumes were calculated over the period owned. | ||||||||||||||||||
| (4) Includes 100% of the volumes associated with operated equity-method investments, including Rocky Mountain Midstream. | ||||||||||||||||||
| (5) Includes 100% of the volumes associated with operated equity-method investments, including Overland Pass Pipeline Company and Rocky Mountain Midstream as well as volumes for our consolidated Bluestem pipeline. | ||||||||||||||||||
| Gas & NGL Marketing Services | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (UNAUDITED) | ||||||||||||||||||
| 2022 | 2023 | |||||||||||||||||
| (Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | Year | |||||||||
| Commodity margins | $ | 100 | $ | 23 | $ | 39 | $ | 161 | $ | 323 | $ | 265 | $ | (2) | $ | 38 | $ | 301 |
| Other fee revenues | 1 | — | 1 | 1 | 3 | 1 | — | — | 1 | |||||||||
| Net unrealized gain (loss) from derivative instruments | (57) | (288) | 5 | 66 | (274) | 333 | 94 | 24 | 451 | |||||||||
| Operating and administrative costs | (31) | (23) | (24) | (18) | (96) | (32) | (24) | (19) | (75) | |||||||||
| Other segment income (expenses) - net | — | 6 | (1) | (1) | 4 | — | — | — | — | |||||||||
| Modified EBITDA | 13 | (282) | 20 | 209 | (40) | 567 | 68 | 43 | 678 | |||||||||
| Adjustments | 52 | 288 | 18 | (60) | 298 | (336) | (84) | (27) | (447) | |||||||||
| Adjusted EBITDA | $ | 65 | $ | 6 | $ | 38 | $ | 149 | $ | 258 | $ | 231 | $ | (16) | $ | 16 | $ | 231 |
| Statistics | ||||||||||||||||||
| Product Sales Volumes | ||||||||||||||||||
| Natural Gas (Bcf/d) | 7.96 | 6.66 | 7.11 | 7.05 | 7.20 | 7.24 | 6.56 | 7.31 | 7.04 | |||||||||
| NGLs (Mbbls/d) | 246 | 234 | 267 | 254 | 250 | 234 | 239 | 245 | 239 | |||||||||
| Other | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (UNAUDITED) | ||||||||||||||||||
| 2022 | 2023 | |||||||||||||||||
| (Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | Year | |||||||||
| Service revenues | $ | 9 | $ | 7 | $ | 6 | $ | 2 | $ | 24 | $ | 3 | $ | 5 | $ | 4 | $ | 12 |
| Net realized product sales | 96 | 142 | 180 | 184 | 602 | 120 | 97 | 127 | 344 | |||||||||
| Net unrealized gain (loss) from derivative instruments | (66) | 47 | 29 | 15 | 25 | (6) | (11) | (1) | (18) | |||||||||
| Operating and administrative costs | (33) | (57) | (62) | (59) | (211) | (48) | (54) | (58) | (160) | |||||||||
| Other segment income (expenses) - net | (1) | — | (13) | 8 | (6) | 5 | 5 | 10 | 20 | |||||||||
| Proportional Modified EBITDA of equity-method investments | — | — | — | — | — | — | (1) | (1) | (2) | |||||||||
| Modified EBITDA | 5 | 139 | 140 | 150 | 434 | 74 | 41 | 81 | 196 | |||||||||
| Adjustments | 66 | (47) | (13) | (15) | (9) | 6 | 11 | 1 | 18 | |||||||||
| Adjusted EBITDA | $ | 71 | $ | 92 | $ | 127 | $ | 135 | $ | 425 | $ | 80 | $ | 52 | $ | 82 | $ | 214 |
| Statistics | ||||||||||||||||||
| Net Product Sales Volumes | ||||||||||||||||||
| Natural Gas (Bcf/d) | 0.12 | 0.19 | 0.27 | 0.31 | 0.22 | 0.26 | 0.29 | 0.31 | 0.28 | |||||||||
| NGLs (Mbbls/d) | 7 | 7 | 8 | 7 | 7 | 3 | 6 | 9 | 6 | |||||||||
| Crude Oil (Mbbls/d) | 2 | 3 | 2 | 2 | 2 | 1 | 3 | 5 | 3 | |||||||||
| Capital Expenditures and Investments | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (UNAUDITED) | ||||||||||||||||||
| 2022 | 2023 | |||||||||||||||||
| (Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | Year | |||||||||
| Capital expenditures: | ||||||||||||||||||
| Transmission & Gulf of Mexico | $ | 125 | $ | 129 | $ | 637 | $ | 358 | $ | 1,249 | $ | 205 | $ | 263 | $ | 382 | $ | 850 |
| Northeast G&P | 40 | 30 | 52 | 92 | 214 | 99 | 74 | 115 | 288 | |||||||||
| West | 61 | 82 | 94 | 226 | 463 | 169 | 197 | 141 | 507 | |||||||||
| Other | 65 | 74 | 58 | 130 | 327 | 72 | 76 | 52 | 200 | |||||||||
| Total (1) | $ | 291 | $ | 315 | $ | 841 | $ | 806 | $ | 2,253 | $ | 545 | $ | 610 | $ | 690 | $ | 1,845 |
| Purchases of and contributions to equity-method investments: | ||||||||||||||||||
| Transmission & Gulf of Mexico | $ | 16 | $ | 26 | $ | 11 | $ | 17 | $ | 70 | $ | 8 | $ | 18 | $ | 6 | $ | 32 |
| Northeast G&P | 32 | 18 | 28 | 8 | 86 | 31 | 12 | 4 | 47 | |||||||||
| West | — | — | — | — | — | — | — | 1 | 1 | |||||||||
| Other | 8 | — | 1 | 1 | 10 | — | — | — | — | |||||||||
| Total | $ | 56 | $ | 44 | $ | 40 | $ | 26 | $ | 166 | $ | 39 | $ | 30 | $ | 11 | $ | 80 |
| Summary: | ||||||||||||||||||
| Transmission & Gulf of Mexico | $ | 141 | $ | 155 | $ | 648 | $ | 375 | $ | 1,319 | $ | 213 | $ | 281 | $ | 388 | $ | 882 |
| Northeast G&P | 72 | 48 | 80 | 100 | 300 | 130 | 86 | 119 | 335 | |||||||||
| West | 61 | 82 | 94 | 226 | 463 | 169 | 197 | 142 | 508 | |||||||||
| Other | 73 | 74 | 59 | 131 | 337 | 72 | 76 | 52 | 200 | |||||||||
| Total | $ | 347 | $ | 359 | $ | 881 | $ | 832 | $ | 2,419 | $ | 584 | $ | 640 | $ | 701 | $ | 1,925 |
| Capital investments: | ||||||||||||||||||
| Increases to property, plant, and equipment | $ | 260 | $ | 382 | $ | 907 | $ | 845 | $ | 2,394 | $ | 484 | $ | 684 | $ | 792 | $ | 1,960 |
| Purchases of businesses, net of cash acquired | — | 933 | — | — | 933 | 1,056 | (3) | (29) | 1,024 | |||||||||
| Purchases of and contributions to equity-method investments | 56 | 44 | 40 | 26 | 166 | 39 | 30 | 11 | 80 | |||||||||
| Purchases of other long-term investments | — | 3 | 3 | 5 | 11 | 2 | 1 | 2 | 5 | |||||||||
| Total | $ | 316 | $ | 1,362 | $ | 950 | $ | 876 | $ | 3,504 | $ | 1,581 | $ | 712 | $ | 776 | $ | 3,069 |
| (1) Increases to property, plant, and equipment | $ | 260 | $ | 382 | $ | 907 | $ | 845 | $ | 2,394 | $ | 484 | $ | 684 | $ | 792 | $ | 1,960 |
| Changes in related accounts payable and accrued liabilities | 31 | (67) | (66) | (39) | (141) | 61 | (74) | (102) | (115) | |||||||||
| Capital expenditures | $ | 291 | $ | 315 | $ | 841 | $ | 806 | $ | 2,253 | $ | 545 | $ | 610 | $ | 690 | $ | 1,845 |
| Contributions from noncontrolling interests | $ | 3 | $ | 5 | $ | 7 | $ | 3 | $ | 18 | $ | 3 | $ | 15 | $ | — | $ | 18 |
| Contributions in aid of construction | $ | (3) | $ | 9 | $ | 2 | $ | 4 | $ | 12 | $ | 11 | $ | 7 | $ | 2 | $ | 20 |
| Proceeds from sale of business | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 348 | $ | 348 |
| Proceeds from disposition of equity-method investments | $ | — | $ | — | $ | 7 | $ | — | $ | 7 | $ | — | $ | — | $ | — | $ | — |
Non-GAAP Measures
This news release and accompanying materials may include certain financial measures – adjusted EBITDA, adjusted income (“earnings”), adjusted earnings per share, available funds from operations and dividend coverage ratio – that are non-GAAP financial measures as defined under the rules of the SEC.
Our segment performance measure, modified EBITDA, is defined as net income (loss) before income (loss) from discontinued operations, income tax expense, net interest expense, equity earnings from equity-method investments, other net investing income, impairments of equity investments and goodwill, depreciation and amortization expense, and accretion expense associated with asset retirement obligations for nonregulated operations. We also add our proportional ownership share (based on ownership interest) of modified EBITDA of equity-method investments.
Adjusted EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations. Such items are excluded from net income to determine adjusted income and adjusted earnings per share. Management believes this measure provides investors meaningful insight into results from ongoing operations.
Available funds from operations (AFFO) is defined as cash flow from operations excluding the effect of changes in working capital and certain other changes in noncurrent assets and liabilities, reduced by preferred dividends and net distributions to noncontrolling interests. AFFO may be adjusted to exclude certain items that we characterize as unrepresentative of our ongoing operations.
This news release is accompanied by a reconciliation of these non-GAAP financial measures to their nearest GAAP financial measures. Management uses these financial measures because they are accepted financial indicators used by investors to compare company performance. In addition, management believes that these measures provide investors an enhanced perspective of the operating performance of assets and the cash that the business is generating.
Neither adjusted EBITDA, adjusted income, nor available funds from operations are intended to represent cash flows for the period, nor are they presented as an alternative to net income or cash flow from operations. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles.
| Reconciliation of Income (Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (UNAUDITED) | ||||||||||||||||||
| 2022 | 2023 | |||||||||||||||||
| (Dollars in millions, except per-share amounts) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | Year | |||||||||
| Income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders | $ | 379 | $ | 400 | $ | 599 | $ | 668 | $ | 2,046 | $ | 926 | $ | 547 | $ | 654 | $ | 2,127 |
| Income (loss) from continuing operations - diluted earnings (loss) per common share (1) | $ | .31 | $ | .33 | $ | .49 | $ | .55 | $ | 1.67 | $ | .76 | $ | .45 | $ | .54 | $ | 1.74 |
| Adjustments: | ||||||||||||||||||
| Transmission & Gulf of Mexico | ||||||||||||||||||
| Loss related to Eminence storage cavern abandonments and monitoring | $ | — | $ | — | $ | 19 | $ | 12 | $ | 31 | $ | — | $ | — | $ | — | $ | — |
| Regulatory liability charges associated with decrease in Transco’s estimated deferred state income tax rate | — | — | 15 | — | 15 | — | — | — | — | |||||||||
| Net unrealized (gain) loss from derivative instruments | — | — | (1) | 1 | — | — | — | — | — | |||||||||
| MountainWest acquisition and transition-related costs | — | — | — | — | — | 13 | 17 | 3 | 33 | |||||||||
| Gain on sale of business | — | — | — | — | — | — | — | (130) | (130) | |||||||||
| Total Transmission & Gulf of Mexico adjustments | — | — | 33 | 13 | 46 | 13 | 17 | (127) | (97) | |||||||||
| Northeast G&P | ||||||||||||||||||
| Our share of accrual for loss contingency at Aux Sable Liquid<br>Products LP | — | — | — | — | — | — | — | 31 | 31 | |||||||||
| Total Northeast G&P adjustments | — | — | — | — | — | — | — | 31 | 31 | |||||||||
| West | ||||||||||||||||||
| Trace acquisition costs | — | 8 | — | — | 8 | — | — | — | — | |||||||||
| Gain from contract settlement | — | — | — | — | — | (18) | — | — | (18) | |||||||||
| Total West adjustments | — | 8 | — | — | 8 | (18) | — | — | (18) | |||||||||
| Gas & NGL Marketing Services | ||||||||||||||||||
| Amortization of purchase accounting inventory fair value adjustment | 15 | — | — | — | 15 | — | — | — | — | |||||||||
| Impact of volatility on NGL linefill transactions | (20) | — | 23 | 6 | 9 | (3) | 10 | (3) | 4 | |||||||||
| Net unrealized (gain) loss from derivative instruments | 57 | 288 | (5) | (66) | 274 | (333) | (94) | (24) | (451) | |||||||||
| Total Gas & NGL Marketing Services adjustments | 52 | 288 | 18 | (60) | 298 | (336) | (84) | (27) | (447) | |||||||||
| Other | ||||||||||||||||||
| Regulatory liability charge associated with decrease in Transco’s estimated deferred state income tax rate | — | — | 5 | — | 5 | — | — | — | — | |||||||||
| Net unrealized (gain) loss from derivative instruments | 66 | (47) | (29) | (15) | (25) | 6 | 11 | 1 | 18 | |||||||||
| Accrual for loss contingencies | — | — | 11 | — | 11 | — | — | — | — | |||||||||
| Total Other adjustments | 66 | (47) | (13) | (15) | (9) | 6 | 11 | 1 | 18 | |||||||||
| Adjustments included in Modified EBITDA | 118 | 249 | 38 | (62) | 343 | (335) | (56) | (122) | (513) | |||||||||
| Adjustments below Modified EBITDA | ||||||||||||||||||
| Amortization of intangible assets from Sequent acquisition | 42 | 41 | 42 | 42 | 167 | 15 | 14 | 15 | 44 | |||||||||
| Depreciation adjustment related to Eminence storage cavern abandonments | — | — | (1) | — | (1) | — | — | — | — | |||||||||
| 42 | 41 | 41 | 42 | 166 | 15 | 14 | 15 | 44 | ||||||||||
| Total adjustments | 160 | 290 | 79 | (20) | 509 | (320) | (42) | (107) | (469) | |||||||||
| Less tax effect for above items | (40) | (72) | (17) | 5 | (124) | 78 | 10 | 25 | 113 | |||||||||
| Adjustments for tax-related items (2) | — | (134) | (69) | — | (203) | — | — | (25) | (25) | |||||||||
| Adjusted income from continuing operations available to common stockholders | $ | 499 | $ | 484 | $ | 592 | $ | 653 | $ | 2,228 | $ | 684 | $ | 515 | $ | 547 | $ | 1,746 |
| Adjusted income from continuing operations - diluted earnings per common share (1) | $ | .41 | $ | .40 | $ | .48 | $ | .53 | $ | 1.82 | $ | .56 | $ | .42 | $ | .45 | $ | 1.43 |
| Weighted-average shares - diluted (thousands) | 1,221,279 | 1,222,694 | 1,222,472 | 1,224,212 | 1,222,672 | 1,225,781 | 1,219,915 | 1,220,073 | 1,222,650 | |||||||||
| (1) The sum of earnings per share for the quarters may not equal the total earnings per share for the year due to changes in the weighted-average number of common shares outstanding. | ||||||||||||||||||
| (2) The second quarter of 2022 includes adjustments for the reversal of valuation allowance due to the expected utilization of certain deferred income tax assets and previously unrecognized tax benefits from the resolution of certain federal income tax audits. The third quarter of 2022 includes an unfavorable adjustment to reverse the net benefit primarily associated with a significant decrease in our estimated deferred state income tax rate, partially offset by an unfavorable revision to a state net operating loss carryforward. The third quarter of 2023 includes an adjustment associated with a further decrease in our estimated deferred state income tax rate. | ||||||||||||||||||
| Reconciliation of "Net Income (Loss)" to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA” | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (UNAUDITED) | ||||||||||||||||||
| 2022 | 2023 | |||||||||||||||||
| (Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | Year | |||||||||
| Net income (loss) | $ | 392 | $ | 407 | $ | 621 | $ | 697 | $ | 2,117 | $ | 957 | $ | 494 | $ | 684 | $ | 2,135 |
| Provision (benefit) for income taxes | 118 | (45) | 96 | 256 | 425 | 284 | 175 | 176 | 635 | |||||||||
| Interest expense | 286 | 281 | 291 | 289 | 1,147 | 294 | 306 | 314 | 914 | |||||||||
| Equity (earnings) losses | (136) | (163) | (193) | (145) | (637) | (147) | (160) | (127) | (434) | |||||||||
| Other investing (income) loss - net | (1) | (2) | (1) | (12) | (16) | (8) | (13) | (24) | (45) | |||||||||
| Proportional Modified EBITDA of equity-method investments | 225 | 250 | 273 | 231 | 979 | 229 | 249 | 215 | 693 | |||||||||
| Depreciation and amortization expenses | 498 | 506 | 500 | 505 | 2,009 | 506 | 515 | 521 | 1,542 | |||||||||
| Accretion expense associated with asset retirement obligations for nonregulated operations | 11 | 13 | 12 | 15 | 51 | 15 | 14 | 14 | 43 | |||||||||
| (Income) loss from discontinued operations, net of tax | — | — | — | — | — | — | 87 | 1 | 88 | |||||||||
| Modified EBITDA | $ | 1,393 | $ | 1,247 | $ | 1,599 | $ | 1,836 | $ | 6,075 | $ | 2,130 | $ | 1,667 | $ | 1,774 | $ | 5,571 |
| Transmission & Gulf of Mexico | $ | 697 | $ | 652 | $ | 638 | $ | 687 | $ | 2,674 | $ | 715 | $ | 731 | $ | 881 | $ | 2,327 |
| Northeast G&P | 418 | 450 | 464 | 464 | 1,796 | 470 | 515 | 454 | 1,439 | |||||||||
| West | 260 | 288 | 337 | 326 | 1,211 | 304 | 312 | 315 | 931 | |||||||||
| Gas & NGL Marketing Services | 13 | (282) | 20 | 209 | (40) | 567 | 68 | 43 | 678 | |||||||||
| Other | 5 | 139 | 140 | 150 | 434 | 74 | 41 | 81 | 196 | |||||||||
| Total Modified EBITDA | $ | 1,393 | $ | 1,247 | $ | 1,599 | $ | 1,836 | $ | 6,075 | $ | 2,130 | $ | 1,667 | $ | 1,774 | $ | 5,571 |
| Adjustments (1): | ||||||||||||||||||
| Transmission & Gulf of Mexico | $ | — | $ | — | $ | 33 | $ | 13 | $ | 46 | $ | 13 | $ | 17 | $ | (127) | $ | (97) |
| Northeast G&P | — | — | — | — | — | — | — | 31 | 31 | |||||||||
| West | — | 8 | — | — | 8 | (18) | — | — | (18) | |||||||||
| Gas & NGL Marketing Services | 52 | 288 | 18 | (60) | 298 | (336) | (84) | (27) | (447) | |||||||||
| Other | 66 | (47) | (13) | (15) | (9) | 6 | 11 | 1 | 18 | |||||||||
| Total Adjustments | $ | 118 | $ | 249 | $ | 38 | $ | (62) | $ | 343 | $ | (335) | $ | (56) | $ | (122) | $ | (513) |
| Adjusted EBITDA: | ||||||||||||||||||
| Transmission & Gulf of Mexico | $ | 697 | $ | 652 | $ | 671 | $ | 700 | $ | 2,720 | $ | 728 | $ | 748 | $ | 754 | $ | 2,230 |
| Northeast G&P | 418 | 450 | 464 | 464 | 1,796 | 470 | 515 | 485 | 1,470 | |||||||||
| West | 260 | 296 | 337 | 326 | 1,219 | 286 | 312 | 315 | 913 | |||||||||
| Gas & NGL Marketing Services | 65 | 6 | 38 | 149 | 258 | 231 | (16) | 16 | 231 | |||||||||
| Other | 71 | 92 | 127 | 135 | 425 | 80 | 52 | 82 | 214 | |||||||||
| Total Adjusted EBITDA | $ | 1,511 | $ | 1,496 | $ | 1,637 | $ | 1,774 | $ | 6,418 | $ | 1,795 | $ | 1,611 | $ | 1,652 | $ | 5,058 |
| (1) Adjustments by segment are detailed in the "Reconciliation of Income (Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income," which is also included in these materials. | ||||||||||||||||||
| Reconciliation of Cash Flow from Operating Activities to Non-GAAP Available Funds from Operations (AFFO) | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (UNAUDITED) | ||||||||||||||||||
| 2022 | 2023 | |||||||||||||||||
| (Dollars in millions, except coverage ratios) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | Year | |||||||||
| Net cash provided (used) by operating activities | $ | 1,082 | $ | 1,098 | $ | 1,490 | $ | 1,219 | $ | 4,889 | $ | 1,514 | $ | 1,377 | $ | 1,234 | $ | 4,125 |
| Exclude: Cash (provided) used by changes in: | ||||||||||||||||||
| Accounts receivable | 3 | 794 | (125) | 61 | 733 | (1,269) | (154) | 128 | (1,295) | |||||||||
| Inventories, including write-downs | (178) | 177 | 77 | (127) | (51) | (45) | (19) | 7 | (57) | |||||||||
| Other current assets and deferred charges | 65 | (50) | 47 | (29) | 33 | 4 | (28) | 29 | 5 | |||||||||
| Accounts payable | 138 | (828) | (53) | 333 | (410) | 1,017 | 203 | (148) | 1,072 | |||||||||
| Accrued and other current liabilities | 149 | (125) | (191) | (42) | (209) | 318 | (246) | 42 | 114 | |||||||||
| Changes in current and noncurrent derivative assets and liabilities | (101) | 52 | (37) | (8) | (94) | (82) | (37) | (53) | (172) | |||||||||
| Other, including changes in noncurrent assets and liabilities | 67 | 65 | 73 | 11 | 216 | 40 | 47 | 53 | 140 | |||||||||
| Preferred dividends paid | (1) | — | (1) | (1) | (3) | (1) | — | (1) | (2) | |||||||||
| Dividends and distributions paid to noncontrolling interests | (37) | (58) | (46) | (63) | (204) | (54) | (58) | (62) | (174) | |||||||||
| Contributions from noncontrolling interests | 3 | 5 | 7 | 3 | 18 | 3 | 15 | — | 18 | |||||||||
| Adjustment to exclude litigation-related charges in discontinued operations | — | — | — | — | — | — | 115 | 1 | 116 | |||||||||
| Available funds from operations | $ | 1,190 | $ | 1,130 | $ | 1,241 | $ | 1,357 | $ | 4,918 | $ | 1,445 | $ | 1,215 | $ | 1,230 | $ | 3,890 |
| Common dividends paid | $ | 518 | $ | 517 | $ | 518 | $ | 518 | $ | 2,071 | $ | 546 | $ | 545 | $ | 544 | $ | 1,635 |
| Coverage ratio: | ||||||||||||||||||
| Available funds from operations divided by Common dividends paid | 2.30 | 2.19 | 2.40 | 2.62 | 2.37 | 2.65 | 2.23 | 2.26 | 2.38 | |||||||||
| Reconciliation of Net Income (Loss) from Continuing Operations to Modified EBITDA, Non-GAAP Adjusted EBITDA and Cash Flow from Operating Activities to Non-GAAP Available Funds from Operations (AFFO) | ||||||||||||||||||
| --- | --- | --- | --- | --- | --- | |||||||||||||
| (Dollars in millions, except per-share amounts and coverage ratio) | Mid | High | ||||||||||||||||
| Net income (loss) from continuing operations | 2,675 | $ | 2,750 | $ | 2,825 | |||||||||||||
| Provision (benefit) for income taxes | 825 | 850 | ||||||||||||||||
| Interest expense | 1,225 | |||||||||||||||||
| Equity (earnings) losses | (590) | |||||||||||||||||
| Proportional Modified EBITDA of equity-method investments | 945 | |||||||||||||||||
| Depreciation and amortization expenses and accretion for asset retirement obligations associated with nonregulated operations | 2,110 | |||||||||||||||||
| Other | (52) | |||||||||||||||||
| Modified EBITDA | 7,113 | $ | 7,213 | $ | 7,313 | |||||||||||||
| EBITDA Adjustments | (513) | |||||||||||||||||
| Adjusted EBITDA | 6,600 | $ | 6,700 | $ | 6,800 | |||||||||||||
| Net income (loss) from continuing operations | 2,675 | $ | 2,750 | $ | 2,825 | |||||||||||||
| Less: Net income (loss) attributable to noncontrolling interests & preferred dividends | 130 | |||||||||||||||||
| Net income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders | 2,545 | $ | 2,620 | $ | 2,695 | |||||||||||||
| Adjustments: | ||||||||||||||||||
| Adjustments included in Modified EBITDA (1) | (513) | |||||||||||||||||
| Adjustments below Modified EBITDA (2) | 59 | |||||||||||||||||
| Allocation of adjustments to noncontrolling interests | — | |||||||||||||||||
| Total adjustments | (454) | |||||||||||||||||
| Less tax effect for above items (3) | 84 | |||||||||||||||||
| Adjusted income from continuing operations available to common stockholders | 2,175 | $ | 2,250 | $ | 2,325 | |||||||||||||
| Adjusted income from continuing operations - diluted earnings per common share | 1.78 | $ | 1.84 | $ | 1.90 | |||||||||||||
| Weighted-average shares - diluted (millions) | 1,222 | |||||||||||||||||
| Available Funds from Operations (AFFO): | ||||||||||||||||||
| Net cash provided by operating activities (net of changes in working capital, changes in current and noncurrent derivative assets and liabilities, and changes in other, including changes in noncurrent assets and liabilities) | 5,075 | $ | 5,175 | $ | 5,275 | |||||||||||||
| Preferred dividends paid | (3) | |||||||||||||||||
| Dividends and distributions paid to noncontrolling interests | (210) | |||||||||||||||||
| Contributions from noncontrolling interests | 22 | |||||||||||||||||
| Adjustment to exclude litigation-related charges in discontinued operations | 116 | |||||||||||||||||
| Available funds from operations (AFFO) | 5,000 | $ | 5,100 | $ | 5,200 | |||||||||||||
| AFFO per common share | 4.09 | $ | 4.17 | $ | 4.26 | |||||||||||||
| Common dividends paid | $ | 2,180 | ||||||||||||||||
| Coverage Ratio (AFFO/Common dividends paid) | 2.34x | 2.39x | ||||||||||||||||
| (1) 1Q, 2Q and 3Q adjustments of (513) million as shown in the "Reconciliation of Income/(Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income" | ||||||||||||||||||
| (2) Includes 1Q, 2Q and 3Q amortization of intangible assets from Sequent acquisition of 44 million and 4Q amortization of 15 million | ||||||||||||||||||
| (3) Includes 1Q, 2Q and 3Q tax on adjustments of 113 million, 3Q adjustment associated with a further decrease in our estimated deferred state income tax rate of (25) million, and 4Q tax on adjustments of (4) million |
All values are in US Dollars.
Forward-Looking Statements
The reports, filings, and other public announcements of The Williams Companies, Inc. (Williams) may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions, and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical facts, included in this report that address activities, events, or developments that we expect, believe, or anticipate will exist or may occur in the future, are forward-looking statements. Forward-looking statements can be identified by various forms of words such as “anticipates,” “believes,” “seeks,” “could,” “may,” “should,” “continues,” “estimates,” “expects,” “forecasts,” “intends,” “might,” “goals,” “objectives,” “targets,” “planned,” “potential,” “projects,” “scheduled,” “will,” “assumes,” “guidance,” “outlook,” “in-service date,” or other similar expressions. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management and include, among others, statements regarding:
•Levels of dividends to Williams stockholders;
•Future credit ratings of Williams and its affiliates;
•Amounts and nature of future capital expenditures;
•Expansion and growth of our business and operations;
•Expected in-service dates for capital projects;
•Financial condition and liquidity;
•Business strategy;
•Cash flow from operations or results of operations;
•Seasonality of certain business components;
•Natural gas, natural gas liquids and crude oil prices, supply, and demand;
•Demand for our services;
Forward-looking statements are based on numerous assumptions, uncertainties, and risks that could cause future events or results to be materially different from those stated or implied in this report. Many of the factors that will determine these results are beyond our ability to control or predict. Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include, among others, the following:
•Availability of supplies, market demand, and volatility of prices;
•Development and rate of adoption of alternative energy sources;
•The impact of existing and future laws and regulations, the regulatory environment, environmental matters, and litigation, as well as our ability to obtain necessary permits and approvals, and achieve favorable rate proceeding outcomes;
•Our exposure to the credit risk of our customers and counterparties;
•Our ability to acquire new businesses and assets and successfully integrate those operations and assets into existing businesses as well as successfully expand our facilities, and to consummate asset sales on acceptable terms;
•Whether we are able to successfully identify, evaluate, and timely execute our capital projects and investment opportunities;
•The strength and financial resources of our competitors and the effects of competition;
•The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate;
•Whether we will be able to effectively execute our financing plan;
•Increasing scrutiny and changing expectations from stakeholders with respect to our environmental, social, and governance practices;
•The physical and financial risks associated with climate change;
•The impacts of operational and developmental hazards and unforeseen interruptions;
•The risks resulting from outbreaks or other public health crises, including COVID-19;
•Risks associated with weather and natural phenomena, including climate conditions and physical damage to our facilities;
•Acts of terrorism, cybersecurity incidents, and related disruptions;
•Our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans;
•Changes in maintenance and construction costs, as well as our ability to obtain sufficient construction-related inputs, including skilled labor;
•Inflation, interest rates, and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers);
•Risks related to financing, including restrictions stemming from debt agreements, future changes in credit ratings as determined by nationally recognized credit rating agencies, and the availability and cost of capital;
•The ability of the members of the Organization of Petroleum Exporting Countries and other oil exporting nations to agree to and maintain oil price and production controls and the impact on domestic production;
•Changes in the current geopolitical situation, including the Russian invasion of Ukraine and the developing conflict between Israel and Hamas;
•Changes in U.S. governmental administration and policies;
•Whether we are able to pay current and expected levels of dividends;
•Additional risks described in our filings with the Securities and Exchange Commission (SEC).
Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement, we caution investors not to unduly rely on our forward-looking statements. We disclaim any obligations to, and do not intend to, update the above list or announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments.
In addition to causing our actual results to differ, the factors listed above and referred to below may cause our intentions to change from those statements of intention set forth in this report. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise.
Because forward-looking statements involve risks and uncertainties, we caution that there are important factors, in addition to those listed above, that may cause actual results to differ materially from those contained in the forward-looking statements. For a detailed discussion of those factors, see Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 27, 2023, as may be supplemented by disclosures in Part II, Item 1A. Risk Factors in subsequent Quarterly Reports on Form 10-Q.
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