0001193125-16-577973.txt : 20160504 0001193125-16-577973.hdr.sgml : 20160504 20160504172633 ACCESSION NUMBER: 0001193125-16-577973 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20160504 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20160504 DATE AS OF CHANGE: 20160504 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WILLIAMS COMPANIES INC CENTRAL INDEX KEY: 0000107263 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION [4922] IRS NUMBER: 730569878 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04174 FILM NUMBER: 161620649 BUSINESS ADDRESS: STREET 1: ONE WILLIAMS CTR CITY: TULSA STATE: OK ZIP: 74172 BUSINESS PHONE: 9185732000 MAIL ADDRESS: STREET 1: ONE WILLIAM CENTER CITY: TULSA STATE: OK ZIP: 74172 FORMER COMPANY: FORMER CONFORMED NAME: WILLIAMS BROTHERS COMPANIES DATE OF NAME CHANGE: 19710817 8-K 1 d118573d8k.htm 8-K 8-K

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): May 4, 2016

The Williams Companies, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   1-4174   73-0569878

(State or other

jurisdiction of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

 

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

Registrant’s telephone number, including area code: 918-573-2000

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))


Item 2.02.     Results of Operations and Financial Condition.

On May 4, 2016, The Williams Companies, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2016. 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 99.1 Press release of the Company dated May 4, 2016, and accompanying schedules, publicly announcing the Company’s financial results for the quarter ended March 31, 2016.

 

2


Pursuant to the requirements of the Securities Exchange Act of 1934, Williams has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

        THE WILLIAMS COMPANIES, INC.
Date: May 4, 2016      

  /s/ Donald R. Chappel

        Name: Donald R. Chappel
        Title: Senior Vice President and Chief
                  Financial Officer

 

3


INDEX TO EXHIBITS

 

EXHIBIT
NUMBER

  

DESCRIPTION

Exhibit 99.1    Press release of the Company dated May 4, 2016, and accompanying schedules, publicly announcing the Company’s financial results for the quarter ended March 31, 2016.

 

4

EX-99.1 2 d118573dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

News Release     

Williams (NYSE: WMB)        

One Williams Center        

Tulsa, OK 74172        

800-Williams         www.williams.com        

   LOGO
       

 

LOGO

DATE: May 4, 2016

 

MEDIA CONTACT:    INVESTOR CONTACTS:   

Tom Droege

(918) 573-4034

  

John Porter

(918) 573-0797

  

Brett Krieg

(918) 573-4614

Williams Reports First Quarter 2016 Financial Results

 

    1Q 2016 Adjusted EBITDA is $1.056 Billion, up 15%

 

    WPZ Fee-Based Revenues up 5%; Represent 93% of Total Gross Margins

 

    1Q Startup of Williams’ Second Offgas Processing Plant Advances Unique Position in Canada

 

    Williams’ Board Unanimously Committed to Enforcing Its Rights Under the Merger Agreement Entered into with ETE on Sept. 28, 2015 and to Delivering Benefits of Merger Agreement to WMB Stockholders

TULSA, Okla. – Williams (NYSE: WMB) today announced first quarter 2016 adjusted EBITDA of $1.056 billion, a $138 million, or 15 percent, increase from first quarter 2015. The increase was driven primarily by Williams Partners’ adjusted EBITDA, which increased $143 million for the quarter.

 

Williams Summary Financial Information    1Q  

Amounts in millions, except per-share amounts. Per share amounts are reported on a diluted basis.

All amounts are attributable to The Williams Companies, Inc.

   2016      2015  
(Unaudited)              

Adjusted EBITDA (1)

   $ 1,056       $ 918   

Adjusted income (1)

   $ 26       $ 122   

Adjusted income per share (1)

   $ 0.03       $ 0.16   

Cash Available for Dividends (1)

   $ 429       $ 495   

Dividend Coverage Ratio (1)

     0.89         1.14   

Net income (loss)

   ($ 65    $ 70   

Net income per share (loss)

   ($ 0.09    $ 0.09   

 

(1) Schedules reconciling adjusted EBITDA, adjusted income, cash available for dividends and dividend coverage ratio (non-GAAP measures) are available at www.williams.com and as an attachment to this news release.

Williams reported first quarter 2016 adjusted income of $26 million, or $0.03 per share, compared with $122 million, or $0.16 per share, in first quarter 2015. The decrease is primarily due to higher interest expense and a lower allocation of net income to Williams associated with an IDR waiver from the termination of the Williams Partners merger agreement. Higher olefins margins from the Geismar plant and higher equity earnings from Discovery’s Keathley Canyon Connector partially offset the decrease.

Williams reported unaudited first quarter 2016 net loss attributable to Williams of $65 million, or $(0.09) per share, compared with net income of $70 million, or $0.09 per share on a diluted basis, for first quarter 2015. The


unfavorable change in net income was driven primarily by the items noted previously, as well as $112 million of pre-tax impairment charges associated with certain equity-method investments and $34 million in project development expenses in first quarter 2016 related to the propane dehydrogenation project in Canada.

CEO Comment

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

“Our strategy to connect North America’s abundant natural gas supply to the best markets continues to deliver results and gain momentum as we capture increasing opportunities on the demand side. This marks the fourth consecutive quarter of adjusted EBITDA in excess of $1 billion. Our focus on fee-based revenues has allowed us to produce strong cash flow growth despite a 16-year low in NGL prices.

“To help offset the effects of low commodity prices and slower near-term growth among producers, we continue to aggressively manage our costs and we made additional cost cutting decisions at the end of the first quarter, including reducing our workforce by 10 percent.

“Importantly this year, we won new business in the Gulf of Mexico, placed into service our second offgas plant in Canada and achieved significant milestones on a number of demand-driven natural gas projects. For the balance of 2016, we expect additional cash flow from recently completed expansions and new projects coming into service in the second and third quarters. Our fully contracted natural gas transmission business coming on in 2017 and 2018 will drive growth in the supply basins we serve.”

Business Segment Results

Williams’ business segments for financial reporting are Williams Partners, Williams NGL & Petchem Services and Other.

Williams NGL & Petchem Services segment includes an offgas processing plant in Canada at CNLR’s Horizon upgrader that went into service in first quarter 2016. The segment also includes a propane dehydrogenation facility growth project under development as well as petchem pipeline projects on the Gulf Coast.

 

Williams    Adjusted EBITDA  
     1Q  
Amounts in millions    2016      2015  

Williams Partners

   $ 1,060       $ 917   

Williams NGL & Petchem

     (14      (5

Other

     10         6   
  

 

 

    

 

 

 

Total

   $ 1,056       $ 918   
  

 

 

    

 

 

 

Schedules reconciling adjusted EBITDA to modified EBITDA and net income (loss) are attached to this news release.

Williams Partners Segment

Williams Partners is focused on natural gas and natural gas liquids (NGL) transportation, gathering, treating, processing and storage; NGL fractionation; olefins production; and crude oil transportation.

Williams Partners reported first quarter 2016 adjusted EBITDA of $1.06 billion, a $143 million, or 16 percent, increase from first quarter 2015. The increase was driven by $60 million in higher olefins margins from a full quarter of Geismar plant production and $63 million in fee-based revenue growth. Proportional adjusted EBITDA from equity investments increased $45 million due primarily to contributions from Discovery’s Keathley Canyon Connector project in the Atlantic-Gulf operating area. Lower NGL margins were mostly offset by lower operating costs.

 

2


Williams Partners’ complete financial results for first quarter 2016 are provided in the earnings news release issued today by Williams Partners.

Proposed Merger of Energy Transfer Equity and Williams

The Williams Board is unanimously committed to enforcing its rights under the merger agreement entered into with ETE on September 28, 2015 and to delivering the benefits of the merger agreement to Williams’ stockholders. Williams is committed to mailing the proxy statement, holding the stockholder vote and closing the transaction as soon as possible.

First Quarter Materials to be Posted Shortly, Conference Call Scheduled for Tomorrow

Williams’ and Williams Partners’ first quarter 2016 financial results will be posted shortly at www.williams.com. The information will include the data book and analyst package.

The company and the partnership plan to jointly host a conference call and live webcast on Thursday, May 5, at 10 a.m. EDT. A limited number of phone lines will be available at (800) 344-6698. International callers should dial (785) 830-7979. The conference ID is 9742588.

A link to the webcast, as well as replays of the webcast in both streaming and downloadable podcast formats, will be available following the event at www.williams.com.

Form 10-Q

The company plans to file its first quarter 2016 Form 10-Q with the Securities and Exchange Commission this week. Once filed, the document will be available on both the SEC and Williams websites.

Definitions of Non-GAAP Measures

This news release may include certain financial measures – adjusted EBITDA, adjusted income (“earnings”), adjusted earnings per share, cash available for dividends, and dividend coverage ratio – that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission.

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 and may include assumed business interruption insurance related to the Geismar plant. Management believes these measures provide investors meaningful insight into results from ongoing operations.

Cash available for dividends is defined as cash received from our ownership in MLPs, cash received (used) by the Williams NGL & Petchem Services segment (other than cash for capital expenditures) less interest, taxes and maintenance capital expenditures associated with Williams and not the underlying MLPs. We also calculate the ratio of cash available for dividends to the total cash dividends paid (dividend coverage ratio). This measure reflects our cash available for dividends relative to actual cash dividends paid.

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 the Company’s assets and the cash that the business is generating.

 

3


Neither adjusted EBITDA, adjusted income, or cash available for dividends 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.

About Williams

Williams (NYSE: WMB) is a premier provider of large-scale infrastructure connecting North American natural gas and natural gas products to growing demand for cleaner fuel and feedstocks. Headquartered in Tulsa, Okla., Williams owns approximately 60 percent of Williams Partners L.P. (NYSE: WPZ), including all of the 2 percent general-partner interest. Williams Partners is an industry-leading, large-cap master limited partnership with operations across the natural gas value chain from gathering, processing and interstate transportation of natural gas and natural gas liquids to petchem production of ethylene, propylene and other olefins. With major positions in top U.S. supply basins and also in Canada, Williams Partners owns and operates more than 33,000 miles of pipelines system wide – including the nation’s largest volume and fastest growing pipeline – providing natural gas for clean-power generation, heating and industrial use. Williams Partners’ operations touch approximately 30 percent of U.S. natural gas. www.williams.com

Forward-Looking Statements

The reports, filings, and other public announcements of The Williams Companies, Inc. (Williams) and Williams Partners L.P. (WPZ) 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, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 document 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:

 

    The status, expected timing and expected outcome of the proposed merger between Williams and Energy Transfer Corp LP (ETC Merger);

 

    Statements regarding the proposed ETC Merger;

 

    Our beliefs relating to value creation as a result of the proposed ETC Merger;

 

    Benefits and synergies of the proposed ETC Merger;

 

    Future opportunities for the combined company;

 

    Other statements regarding Williams’ and Energy Transfer Equity, L.P. and its affiliates’ (collectively, Energy Transfer) future beliefs, expectations, plans, intentions, financial condition or performance;

 

    Events which may occur subsequent to the proposed ETC Merger including events which directly impact WPZ’s business;

 

    Expected levels of cash distributions by WPZ with respect to general partner interests, incentive distribution rights and limited partner interests;

 

    Levels of dividends to Williams stockholders;

 

    Future credit ratings of Williams, WPZ and their affiliates;

 

    Amounts and nature of future capital expenditures;

 

    Expansion and growth of our business and operations;

 

    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 olefins prices, supply, and demand; and

 

    Demand for our services.

 

4


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 document. 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:

 

    Satisfaction of the conditions to the completion of the proposed ETC Merger, including receipt of the approval of Williams’ stockholders;

 

    The timing and likelihood of completion of the proposed ETC Merger, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals for the proposed merger that could reduce anticipated benefits or cause the parties to abandon the proposed transaction;

 

    Energy Transfer’s plans for WPZ, as well as the other master limited partnerships it currently controls, following the completion of the proposed ETC Merger;

 

    The possibility that the expected synergies and value creation from the proposed ETC Merger will not be realized or will not be realized within the expected time period;

 

    The risk that the businesses of Williams and Energy Transfer will not be integrated successfully;

 

    Disruption from the proposed ETC Merger making it more difficult to maintain business and operational relationships;

 

    The risk that unexpected costs will be incurred in connection with the proposed ETC Merger;

 

    The possibility that the proposed ETC Merger does not close, including due to the failure to satisfy the closing conditions;

 

    Whether WPZ will produce sufficient cash flows to provide the level of cash distributions we expect;

 

    Whether Williams is able to pay current and expected levels of dividends;

 

    Availability of supplies, market demand and volatility of prices;

 

    Inflation, interest rates, fluctuation in foreign exchange rates and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers);

 

    The strength and financial resources of our competitors and the effects of competition;

 

    Whether we are able to successfully identify, evaluate and execute investment opportunities;

 

    Our ability to acquire new businesses and assets and successfully integrate those operations and assets into our existing businesses as well as successfully expand our facilities;

 

    Development of alternative energy sources;

 

    The impact of operational and developmental hazards and unforeseen interruptions;

 

    Costs of, changes in, or the results of laws, government regulations (including safety and environmental regulations), environmental liabilities, litigation, and rate proceedings;

 

    Williams’ costs and funding obligations for defined benefit pension plans and other postretirement benefit plans;

 

    WPZ’s allocated costs for defined benefit pension plans and other postretirement benefit plans sponsored by its affiliates;

 

    Changes in maintenance and construction costs;

 

    Changes in the current geopolitical situation;

 

    Our exposure to the credit risk of our customers and counterparties;

 

    Risks related to financing, including restrictions stemming from debt agreements, future changes in credit ratings as determined by nationally-recognized credit rating agencies and the availability and cost of capital;

 

    The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate;

 

    Risks associated with weather and natural phenomena, including climate conditions;

 

    Acts of terrorism, including cybersecurity threats and related disruptions; and

 

    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 document. 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 Williams’ and WPZ’s Annual Reports on Form 10-K filed with the SEC on February 26, 2016 and in Part II, Item 1A. Risk Factors in our Quarterly Reports on Form 10-Q available from our offices or from our website at www.williams.com.

# # #

 

5


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

(UNAUDITED)

 

     2015     2016  
(Dollars in millions, except per-share amounts)    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year     1st Qtr  

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

   $ 70      $ 114      $ (40   $ (715   $ (571   $ (65 )
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss)—diluted earnings (loss) per common share

   $ .09      $ .15      $ (.05   $ (.95   $ (.76   $ (.09 )
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjustments:

            

Williams Partners

            

Estimated minimum volume commitments

   $ 55      $ 55      $ 65      $ (175   $      $ 60  

Severance and related costs

                                        25  

Potential rate refunds associated with rate case litigation

                                        15  

Impairment of certain assets

     3        24        2        116        145         

ACMP Merger and transition-related expenses

     32        14        2        2        50        5  

Share of impairment at equity-method investments

     8        1        17        7        33         

Geismar Incident adjustment for insurance and timing

            (126                   (126      

Loss related to Geismar Incident

     1        1                      2         

Loss (recovery) related to Opal incident

     1               (8     1        (6      

Gain on extinguishment of debt

            (14                   (14      

Expenses associated with strategic alternatives

                   1        1        2         
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Williams Partners adjustments

     100        (45     79        (48     86        105  

Williams NGL & Petchem Services

            

Canadian PDH facility project development costs

                                        34  

Gain on sale of certain assets

                                        (10 )

Impairment of certain assets

                          64        64         
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Williams NGL & Petchem Services adjustments

                          64        64        24  

Other

            

Expenses associated with strategic alternatives

            7        18        5        30        6  

Other ACMP Merger and transition-related expenses

     6        9        7        12        34        2  

Severance and related costs

                                        1  

Contingency gain

                          (9     (9      

Accrued long-term charitable commitment

                          8        8         
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Other adjustments

     6        16        25        16        63        9  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjustments included in Modified EBITDA

     106        (29     104        32        213        138  

Adjustments below Modified EBITDA

            

Impairment of equity-method investments—Williams Partners

                   461        898        1,359        112  

Impairment of goodwill—Williams Partners

                          1,098        1,098         

Interest expense related to potential rate refunds associated with rate case litigation—Williams Partners

                                        3  

Accelerated depreciation related to reduced salvage value of certain assets—Williams Partners

                          7        7         

ACMP Acquisition-related financing expenses—Williams Partners

     2                             2         

Interest income on receivable from sale of Venezuela assets—Other

            (9     (18            (27     (18 )

Allocation of adjustments to noncontrolling interests

     (33     21        (212     (767     (991     (83 )
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     (31     12        231        1,236        1,448        14  

Total adjustments

     75        (17     335        1,268        1,661        152  

Less tax effect for above items

     (28     4        (129     (473     (626     (61 )

Adjustments for tax-related items (1)

     5        9        1        (74     (59      
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted income available to common stockholders

   $ 122      $ 110      $ 167      $ 6      $ 405      $ 26  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted diluted earnings per common share

   $ .16      $ .15      $ .22      $ .01      $ .54      $ .03  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares—diluted (thousands)

     752,028        752,775        753,100        751,930        752,460        751,040  

 

(1) The fourth quarter of 2015 includes an unfavorable adjustment related to the translation of certain foreign-denominated unrecognized tax benefits.

Note: 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.

 

6


Reconciliation of Non-GAAP “Modified EBITDA” to Non-GAAP “Adjusted EBITDA”

(UNAUDITED)

 

     2015     2016  
(Dollars in millions)    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year     1st Qtr  

Net income (loss)

   $ 13      $ 183      $ (173   $ (1,337   $ (1,314   $ (13

Provision (benefit) for income taxes

     30        83        (65     (447     (399     2   

Interest expense

     251        262        263        268        1,044        291   

Equity (earnings) losses

     (51     (93     (92     (99     (335     (97

Impairment of equity-method investments

                   461        898        1,359        112   

Other investing (income) loss—net

            (9     (18            (27     (18

Proportional Modified EBITDA of equity-method investments

     136        183        185        195        699        189   

Impairment of goodwill

                          1,098        1,098          

Depreciation and amortization expenses

     427        428        432        451        1,738        445   

Accretion for asset retirement obligations associated with nonregulated operations

     6        9        6        7        28        7   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Modified EBITDA

   $ 812      $ 1,046      $ 999      $ 1,034      $ 3,891      $ 918   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Williams Partners

   $ 817      $ 1,053      $ 1,021      $ 1,112      $ 4,003      $ 955   

Williams NGL & Petchem Services

     (5     (3     (5     (70     (83     (38

Other

            (4     (17     (8     (29     1   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Modified EBITDA

   $ 812      $ 1,046      $ 999      $ 1,034      $ 3,891      $ 918   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjustments included in Modified EBITDA:

            

Williams Partners

   $ 100      $ (45   $ 79      $ (48   $ 86      $ 105   

Williams NGL & Petchem Services

                          64        64        24   

Other

     6        16        25        16        63        9   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Adjustments included in Modified EBITDA

   $ 106      $ (29   $ 104      $ 32      $ 213      $ 138   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA:

            

Williams Partners

   $ 917      $ 1,008      $ 1,100      $ 1,064      $ 4,089      $ 1,060   

Williams NGL & Petchem Services

     (5     (3     (5     (6     (19     (14

Other

     6        12        8        8        34        10   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Adjusted EBITDA

   $ 918      $ 1,017      $ 1,103      $ 1,066      $ 4,104      $ 1,056   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

7


Dividend Coverage Ratio

(UNAUDITED)

 

     2015     2016  
(Dollars in millions, except per share amounts)    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year     1st Qtr  

Distributions from WPZ (accrued / “as declared” basis) (3)

   $ 515      $ 513      $ 513      $ 513      $ 2,054      $ 513   

Williams NGL & Petchem Services adjusted cash flow (see below)

     (5     (3     (5     (6     (19     (14

Corporate interest

     (64     (64     (63     (64     (255     (66
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

     446        446        445        443        1,780        433   

WMB cash tax rate

     -12     0     0     0     -3     0

WMB cash taxes (excludes cash taxes paid by WPZ) (1)

     55                             55        2   

Corporate Capex

     (6     (5     (6     (7     (24     (6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

WMB cash flow available for dividends

   $ 495      $ 441      $ 439      $ 436      $ 1,811      $ 429   

- per share

   $ 0.66      $ 0.59      $ 0.59      $ 0.58      $ 2.42      $ 0.57   

WMB dividends paid

     (434     (442     (480     (480     (1,836     (480
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Excess cash flow available after dividends

   $ 61      $ (1   $ (41   $ (44   $ (25   $ (51

Dividend per share

   $ 0.5800      $ 0.5900      $ 0.6400      $ 0.6400      $ 2.4500      $ 0.6400   

Coverage ratio (2)(3)

     1.14        1.00        0.91        0.91        0.99        0.89   

Williams NGL & Petchem Services Adjusted Cash Flow:

            

Modified EBITDA

     (5     (3     (5     (70     (83     (38

Segment adjustments

                          64        64        24   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     (5     (3     (5     (6     (19     (14

Less: Maintenance Capex

                                          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted cash flow

     (5     (3     (5     (6     (19     (14

 

Notes:     (1)    A refund was received in the first quarter of 2015 related to a 2014 tax Net Operating Loss, due to bonus depreciation, that yielded a carryback refund from 2012.
  (2)    WMB cash flow available for dividends / WMB dividends paid.
  (3)    Cash distributions for the third and fourth quarters of 2015 and the first quarter of 2016 have been increased by $209 million, $209 million, and $10 million, respectively, in order to exclude the impact of the IDR waiver associated with the WPZ merger termination fee from the determination of coverage ratios.

 

8


LOGO

Financial Highlights and Operating Statistics

(UNAUDITED)

Final

March 31, 2016


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

(UNAUDITED)

 

     2015     2016  
(Dollars in millions, except per-share amounts)    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year     1st Qtr  

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

   $ 70      $ 114      $ (40 )$      (715   $ (571   $ (65
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss)—diluted earnings (loss) per common share

   $ .09      $ .15      $ (.05 )$      (.95   $ (.76   $ (.09
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjustments:

            

Williams Partners

            

Estimated minimum volume commitments

   $ 55      $ 55      $ 65      $ (175   $      $ 60   

Severance and related costs

                                        25   

Potential rate refunds associated with rate case litigation

                                        15   

Impairment of certain assets

     3        24        2        116        145          

ACMP Merger and transition-related expenses

     32        14        2        2        50        5   

Share of impairment at equity-method investments

     8        1        17        7        33          

Geismar Incident adjustment for insurance and timing

            (126                   (126       

Loss related to Geismar Incident

     1        1                      2          

Loss (recovery) related to Opal incident

     1               (8     1        (6       

Gain on extinguishment of debt

            (14                   (14       

Expenses associated with strategic alternatives

                   1        1        2          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Williams Partners adjustments

     100        (45     79        (48     86        105   

Williams NGL & Petchem Services

            

Canadian PDH facility project development costs

                                        34   

Gain on sale of certain assets

                                        (10

Impairment of certain assets

                          64        64          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Williams NGL & Petchem Services adjustments

                          64        64        24   

Other

            

Expenses associated with strategic alternatives

            7        18        5        30        6   

Other ACMP Merger and transition-related expenses

     6        9        7        12        34        2   

Severance and related costs

                                        1   

Contingency gain

                          (9     (9       

Accrued long-term charitable commitment

                          8        8          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Other adjustments

     6        16        25        16        63        9   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjustments included in Modified EBITDA

     106        (29     104        32        213        138   

Adjustments below Modified EBITDA

            

Impairment of equity-method investments—Williams Partners

                   461        898        1,359        112   

Impairment of goodwill—Williams Partners

                          1,098        1,098          

Interest expense related to potential rate refunds associated with rate case litigation—Williams Partners

                                        3   

Accelerated depreciation related to reduced salvage value of certain assets—Williams Partners

                          7        7          

ACMP Acquisition-related financing expenses—Williams Partners

     2                             2          

Interest income on receivable from sale of Venezuela assets—Other

            (9     (18            (27     (18

Allocation of adjustments to noncontrolling interests

     (33     21        (212     (767     (991     (83
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     (31     12        231        1,236        1,448        14   

Total adjustments

     75        (17     335        1,268        1,661        152   

Less tax effect for above items

     (28     4        (129     (473     (626     (61

Adjustments for tax-related items (1)

     5        9        1        (74     (59       
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted income available to common stockholders

   $ 122      $ 110      $ 167      $ 6      $ 405      $ 26   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted diluted earnings per common share

   $ .16      $ .15      $ .22      $ .01      $ .54      $ .03   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares—diluted (thousands)

     752,028        752,775        753,100        751,930        752,460        751,040   

 

(1) The fourth quarter of 2015 includes an unfavorable adjustment related to the translation of certain foreign-denominated unrecognized tax benefits.

Note: 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.


Consolidated Statement of Operations

(UNAUDITED)

 

     2015     2016  
(Dollars in millions, except per-share amounts)    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year     1st Qtr  

Revenues:

            

Service revenues

   $ 1,197      $ 1,241      $ 1,239      $ 1,487      $ 5,164      $ 1,229   

Product sales

     519        598        560        519        2,196        431   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     1,716        1,839        1,799        2,006        7,360        1,660   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs and expenses:

            

Product costs

     462        494        426        397        1,779        318   

Operating and maintenance expenses

     387        437        403        428        1,655        391   

Depreciation and amortization expenses

     427        428        432        451        1,738        445   

Selling, general, and administrative expenses

     196        174        177        194        741        221   

Impairment of goodwill

                          1,098        1,098          

Net insurance recoveries—Geismar Incident

            (126                   (126       

Other (income) expense—net

     17        40        5        187        249        23   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

     1,489        1,447        1,443        2,755        7,134        1,398   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     227        392        356        (749     226        262   

Equity earnings (losses)

     51        93        92        99        335        97   

Gain on remeasurement of equity-method investment

                                          

Impairment of equity-method investments

                   (461     (898     (1,359     (112

Other investing income (loss)—net

            9        18               27        18   

Interest incurred

     (273     (278     (280     (287     (1,118     (306

Interest capitalized

     22        16        17        19        74        15   

Other income (expense)—net

     16        34        20        32        102        15   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     43        266        (238     (1,784     (1,713     (11

Provision (benefit) for income taxes

     30        83        (65     (447     (399     2   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     13        183        (173     (1,337     (1,314     (13

Less: Net income (loss) attributable to noncontrolling interests

     (57     69        (133     (622     (743     52   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ 70      $ 114      $ (40   $ (715   $ (571   $ (65
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) per common share:

            

Net income (loss)

   $ .09      $ .15      $ (.05   $ (.95   $ (.76   $ (.09

Weighted-average number of shares used in computations (thousands)

     752,028        752,775        749,824        749,902        749,271        750,322   

Common shares outstanding at end of period (thousands)

     748,912        749,529        749,740        749,789        749,789        750,484   

Market price per common share (end of period)

   $ 50.59      $ 57.39      $ 36.85      $ 25.70      $ 25.70      $ 16.07   

Cash dividends declared per share

   $ .58      $ .59      $ .64      $ .64      $ 2.45      $ .64   

 

Note: The sum of earnings (loss) per share for the quarters may not equal the total earnings (loss) per share for the year due to changes in the weighted-average number of common shares outstanding.


Reconciliation of Non-GAAP “Modified EBITDA” to Non-GAAP “Adjusted EBITDA”

(UNAUDITED)

 

     2015     2016  
(Dollars in millions)    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year     1st Qtr  

Net income (loss)

   $ 13      $ 183      $ (173   $ (1,337   $ (1,314   $ (13

Provision (benefit) for income taxes

     30        83        (65     (447     (399     2   

Interest expense

     251        262        263        268        1,044        291   

Equity (earnings) losses

     (51     (93     (92     (99     (335     (97

Impairment of equity-method investments

                   461        898        1,359        112   

Other investing (income) loss—net

            (9     (18            (27     (18

Proportional Modified EBITDA of equity-method investments

     136        183        185        195        699        189   

Impairment of goodwill

                          1,098        1,098          

Depreciation and amortization expenses

     427        428        432        451        1,738        445   

Accretion for asset retirement obligations associated with nonregulated operations

     6        9        6        7        28        7   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Modified EBITDA

   $ 812      $ 1,046      $ 999      $ 1,034      $ 3,891      $ 918   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Williams Partners

   $ 817      $ 1,053      $ 1,021      $ 1,112      $ 4,003      $ 955   

Williams NGL & Petchem Services

     (5     (3     (5     (70     (83     (38

Other

            (4     (17     (8     (29     1   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Modified EBITDA

   $ 812      $ 1,046      $ 999      $ 1,034      $ 3,891      $ 918   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjustments included in Modified EBITDA:

            

Williams Partners

   $ 100      $ (45   $ 79      $ (48   $ 86      $ 105   

Williams NGL & Petchem Services

                          64        64        24   

Other

     6        16        25        16        63        9   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Adjustments included in Modified EBITDA

   $ 106      $ (29   $ 104      $ 32      $ 213      $ 138   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA:

            

Williams Partners

   $ 917      $ 1,008      $ 1,100      $ 1,064      $ 4,089      $ 1,060   

Williams NGL & Petchem Services

     (5     (3     (5     (6     (19     (14

Other

     6        12        8        8        34        10   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Adjusted EBITDA

   $ 918      $ 1,017      $ 1,103      $ 1,066      $ 4,104      $ 1,056   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


Williams Partners

(UNAUDITED)

 

     2015     2016  
(Dollars in millions)    1st Qtr      2nd Qtr     3rd Qtr     4th Qtr     Year     1st Qtr  

Revenues:

             

Service revenues

   $ 1,192       $ 1,231      $ 1,232      $ 1,480      $ 5,135      $ 1,226   

Product sales

     519         599        560        518        2,196        428   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     1,711         1,830        1,792        1,998        7,331        1,654   

Segment costs and expenses:

             

Product costs

     463         494        426        396        1,779        317   

Operating and maintenance expenses

     373         424        387        412        1,596        374   

Selling, general, and administrative expenses

     193         164        156        171        684        181   

Net insurance recoveries—Geismar Incident

             (126                   (126       

Other segment costs and expenses

     1         4        (13     102        94        16   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total segment costs and expenses

     1,030         960        956        1,081        4,027        888   

Proportional Modified EBITDA of equity-method investments

     136         183        185        195        699        189   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Modified EBITDA

     817         1,053        1,021        1,112        4,003        955   

Adjustments

     100         (45     79        (48     86        105   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 917       $ 1,008      $ 1,100      $ 1,064      $ 4,089      $ 1,060   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating statistics

             

Interstate Transmission

             

Throughput (Tbtu)

     1,207.8         967.9        981.5        978.5        4,135.7        1,132.8   

Avg. daily transportation volumes (Tbtu)

     13.5         10.6        10.7        10.7        11.3        12.5   

Avg. daily firm reserved capacity (Tbtu)

     13.5         14.0        14.5        14.8        14.2        12.0   

Gathering and Processing

             

Gathering volumes (Bcf per day)—Consolidated (1)

     8.57         8.44        8.16        8.20        8.34        8.25   

Gathering volumes (Bcf per day)—Non-consolidated (2)

     3.34         3.67        3.73        3.65        3.60        3.74   

Plant inlet natural gas volumes (Bcf per day)—Consolidated (1)

     3.58         3.53        3.55        3.43        3.52        3.46   

Plant inlet natural gas volumes (Bcf per day)—Non-consolidated (2)

     0.35         0.61        0.63        0.60        0.55        0.56   

Consolidated (1)

             

Ethane margin ($/gallon)

   $ .13       $ .13      $ .13      $ .11      $ .12      $ .08   

Non-ethane margin ($/gallon)

   $ .28       $ .26      $ .23      $ .25      $ .25      $ .20   

NGL margin ($/gallon)

   $ .24       $ .22      $ .19      $ .20      $ .21      $ .15   

Ethane equity sales (million gallons)

     54         49        66        70        239        85   

Non-ethane equity sales (million gallons)

     131         122        125        139        517        134   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NGL equity sales (million gallons)

     185         171        191        209        756        219   

Ethane production (million gallons)

     111         149        165        161        586        188   

Non-ethane production (million gallons)

     408         418        444        409        1,679        394   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NGL production (million gallons)

     519         567        609        570        2,265        582   

Non-consolidated (2)

             

NGL equity sales (million gallons)

     17         22        21        20        80        20   

NGL production (million gallons)

     62         79        81        72        294        65   

Petrochemical Services

             

Geismar ethylene sales volumes (million lbs)

     2         213        404        447        1,066        423   

Geismar ethylene margin ($/lb) (3)

   $       $ .21      $ .16      $ .11      $ .15      $ .13   

Canadian propylene sales volumes (million lbs)

     39         38        44        40        161        33   

Canadian alky feedstock sales volumes (million gallons)

     7         6        6        7        26        7   

Overland Pipeline Company (2)

             

NGL transportation volumes (Mbbls)

     10,845         13,860        15,075        15,527        55,307        16,814   

 

(1) Excludes volumes associated with equity-method investments that are not consolidated for financial reporting purposes.
(2) Includes 100% of the volumes associated with operated equity-method investments.
(3) Ethylene margin and ethylene margin per pound are calculated using financial results determined in accordance with GAAP, which include realized ethylene sales prices and ethylene COGS. Realized sales and COGS per unit metrics may vary from publicly quoted market indices or spot prices due to various factors, including, but not limited to, basis differentials, transportation costs, contract provisions, and inventory accounting methods.


Williams NGL & Petchem Services

(UNAUDITED)

 

     2015     2016  
(Dollars in millions)    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year     1st Qtr  

Revenues:

            

Service revenues

   $      $ 1      $ 1      $      $ 2      $   

Product sales

                                        3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

            1        1               2        3   

Segment costs and expenses:

            

Product costs

                                        2   

Operating and maintenance expenses

     4        2        4        3        13        9   

Selling, general, and administrative expenses

     2        2        2        2        8        38   

Other (income) expense—net

     (1                   65        64        (8
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total segment costs and expenses

     5        4        6        70        85        41   

Proportional Modified EBITDA of equity-method investments

                                          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Modified EBITDA

     (5     (3     (5     (70     (83     (38

Adjustments

                          64        64        24   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ (5   $ (3   $ (5   $ (6   $ (19   $ (14
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating statistics

            

Ethane equity sales (million gallons)

                                        3   

Non-ethane equity sales (million gallons)

                                        3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NGL equity sales (million gallons)

                                        6   

Ethane production (million gallons)

                                        3   

Non-ethane production (million gallons)

                                        3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NGL production (million gallons)

                                        6   

Petrochemical Services

            

Canadian propylene sales volumes (million lbs)

                                        1   

Canadian alky feedstock sales volumes (million gallons)

                                        1   


Capital Expenditures and Investments

(UNAUDITED)

 

     2015      2016  
(Dollars in millions)    1st Qtr      2nd Qtr      3rd Qtr      4th Qtr      Year      1st Qtr  

Capital expenditures:

                 

Williams Partners

   $ 735       $ 715       $ 692       $ 653       $ 2,795       $ 463   

Williams NGL & Petchem Services

     91         102         78         85         356         45   

Other

     6         5         1         4         16         5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total*

   $ 832       $ 822       $ 771       $ 742       $ 3,167       $ 513   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Purchase of businesses (net of cash acquired):

                 

Williams Partners

   $       $ 112       $       $       $ 112       $   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $       $ 112       $       $       $ 112       $   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Purchase of investments:

                 

Williams Partners

   $ 83       $ 400       $ 45       $ 66       $ 594       $ 63   

Other

                     1                 1           
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 83       $ 400       $ 46       $ 66       $ 595       $ 63   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Summary:

                 

Williams Partners

   $ 818       $ 1,227       $ 737       $ 719       $ 3,501       $ 526   

Williams NGL & Petchem Services

     91         102         78         85         356         45   

Other

     6         5         2         4         17         5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 915       $ 1,334       $ 817       $ 808       $ 3,874       $ 576   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Capital expenditures incurred, purchase of businesses (net of cash acquired), and purchase of investments:

                 

Increases to property, plant, and equipment

   $ 738       $ 816       $ 757       $ 713       $ 3,024       $ 525   

Purchase of businesses (net of cash acquired)

             112                         112           

Purchase of investments

     83         400         46         66         595         63   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 821       $ 1,328       $ 803       $ 779       $ 3,731       $ 588   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

*Increases to property, plant, and equipment

   $ 738       $ 816       $ 757       $ 713       $ 3,024       $ 525   

Changes in related accounts payable and accrued liabilities

     94         6         14         29         143         (12
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Capital expenditures

   $ 832       $ 822       $ 771       $ 742       $ 3,167       $ 513   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


Depreciation and Amortization and Other Selected Financial Data

(UNAUDITED)

 

     2015     2016  
(Dollars in millions)    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year     1st Qtr  

Depreciation and amortization:

            

Williams Partners

   $ 419      $ 419      $ 423      $ 441      $ 1,702      $ 435   

Williams NGL & Petchem

     1        1        1        1        4        1   

Other

     7        8        8        9        32        9   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 427      $ 428      $ 432      $ 451      $ 1,738      $ 445   

Other selected financial data:

            

Cash and cash equivalents

   $ 341      $ 204      $ 125      $ 100      $ 100      $ 164   

Total assets

   $ 50,325      $ 51,034      $ 50,694      $ 49,020      $ 49,020      $ 48,807   

Capital structure:

            

Debt

            

Commercial paper

   $      $ 1,743      $ 1,530      $ 499      $ 499      $ 135   

Current

   $ 801      $ 377      $ 377      $ 176      $ 176      $ 976   

Noncurrent

   $ 21,559      $ 21,158      $ 21,680      $ 23,812      $ 23,812      $ 23,701   

Stockholders’ equity

   $ 8,212      $ 7,928      $ 7,387      $ 6,148      $ 6,148      $ 5,691   

Debt to debt-plus-stockholders’ equity ratio

     73.1     74.6     76.2     79.9     79.9     81.3

Cash distributions received from interests in:

            

Williams Partners L.P.

            

General partner

   $ 226      $ 227      $ 224      $ 14      $ 691      $ 15   

Limited partner

     289        288        289        289        1,155        289   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   $ 515      $ 515      $ 513      $ 303      $ 1,846      $ 304   


Dividend Coverage Ratio

(UNAUDITED)

 

     2015     2016  
(Dollars in millions, except per share amounts)    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year     1st Qtr  

Distributions from WPZ (accrued / “as declared” basis) (3)

   $ 515      $ 513      $ 513      $ 513      $ 2,054      $ 513   

Williams NGL & Petchem Services adjusted cash flow (see below)

     (5     (3     (5     (6     (19     (14

Corporate interest

     (64     (64     (63     (64     (255     (66
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

     446        446        445        443        1,780        433   

WMB cash tax rate

     -12     0     0     0     -3     0

WMB cash taxes (excludes cash taxes paid by WPZ) (1)

     55                             55        2   

Corporate Capex

     (6     (5     (6     (7     (24     (6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

WMB cash flow available for dividends

   $ 495      $ 441      $ 439      $ 436      $ 1,811      $ 429   

- per share

   $ 0.66      $ 0.59      $ 0.59      $ 0.58      $ 2.42      $ 0.57   

WMB dividends paid

     (434     (442     (480     (480     (1,836     (480
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Excess cash flow available after dividends

   $ 61      $ (1   $ (41   $ (44   $ (25   $ (51

Dividend per share

   $ 0.5800      $ 0.5900      $ 0.6400      $ 0.6400      $ 2.4500      $ 0.6400   

Coverage ratio (2)(3)

     1.14        1.00        0.91        0.91        0.99        0.89   

Williams NGL & Petchem Services Adjusted Cash Flow:

            

Modified EBITDA

     (5     (3     (5     (70     (83     (38

Segment adjustments

                          64        64        24   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     (5     (3     (5     (6     (19     (14

Less: Maintenance Capex

                                          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted cash flow

     (5     (3     (5     (6     (19     (14

 

Notes:     (1)    A refund was received in the first quarter of 2015 related to a 2014 tax Net Operating Loss, due to bonus depreciation, that yielded a carryback refund from 2012.
  (2)    WMB cash flow available for dividends / WMB dividends paid.
  (3)    Cash distributions for the third and fourth quarters of 2015 and the first quarter of 2016 have been increased by $209 million, $209 million, and $10 million, respectively, in order to exclude the impact of the IDR waiver associated with the WPZ merger termination fee from the determination of coverage ratios.
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