EX-99.1 2 d917070dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

News Release   

Williams Partners L.P. (NYSE: WPZ)

One Williams Center

Tulsa, OK 74172

800-600-3782

www.williams.com

          LOGO

DATE: April 29, 2015

 

MEDIA CONTACT:    INVESTOR CONTACTS:   

Tom Droege

918) 573-4034

   

John Porter

(918) 573-0797

   

Brett Krieg

(918) 573-4614

Williams Partners Reports First Quarter 2015 Financial Results

 

  •  

First Quarter 2015 Adjusted EBITDA is $917 million, Up 19% on Access Midstream Merger

 

  •  

Distributable Cash Flow (DCF) of $646 Million, Up 11%

 

  •  

Fee-Based Revenue Up $490 Million or 66% Primarily on Access Merger, Major Projects Placed into Service

 

  •  

Excluding Merger, Williams Partners 1Q 2015 Fee-Based Revenue Up $121 Million, or 16%

 

  •  

Expect Geismar at Base Plant’s Production Rate in April and May, Full Expanded Production in June

 

  •  

Reaffirming Adjusted EBITDA Guidance for 2015-2017 with 2015 Expected to Be Near Low End of Range on Extended Geismar Ramp-Up and Effects of Low Commodity Prices

 

  •  

Reaffirming Williams Partners Per Unit Distribution Guidance of $3.40 in 2015 with 7% to 11% Annual LP Unit Distribution Growth Rate through 2017 with Growing Coverage

 

  •  

Williams Partners Analyst Day Set for May 13

TULSA, Okla. – Williams Partners L.P. (NYSE: WPZ) today announced unaudited financial results for first quarter 2015, during which time Williams Partners and Access Midstream Partners, L.P. (formerly NYSE: ACMP) merged to form one master limited partnership (MLP). Financial information for periods prior to July 2014 – when Williams (NYSE: WMB) acquired control of Access Midstream – represents pre-merger Williams Partners and excludes Access Midstream.

 

Summary Financial Information

    1Q  

Amounts in millions, except coverage ratio amounts. All

income amounts attributable to Williams Partners L.P.

    2015      2014  
(Unaudited)              

Williams Partners

      

Adjusted EBITDA (1)

    $ 917       $ 768   

DCF attributable to partnership operations (1)

    $ 646       $ 582   

Cash distribution coverage ratio (1)

      .89x         1.03x   

Net income

    $ 89       $ 352   

 

(1) Adjusted EBITDA, distributable cash flow (DCF) and cash distribution coverage ratio are non-GAAP measures. Financial information for first quarter 2014 represents Williams Partners L.P. on a basis that is prior to the merger with Access Midstream Partners, L.P. Reconciliations to the most relevant measures included in GAAP are attached to this news release.

 

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Williams Partners reported first quarter 2015 adjusted EBITDA of $917 million, a $149 million, or 19 percent, increase from first quarter 2014.

The increase in adjusted EBITDA for first quarter 2015 is due primarily to the contribution of approximately $314 million of adjusted EBITDA from Access Midstream as a result of the merger, $69 million higher adjusted EBITDA for the Atlantic-Gulf, and $46 million higher adjusted EBITDA from Northeast G&P. Partially offsetting these increases were a $229 million decrease at NGL & Petchem Services due primarily to $173 million of business interruption proceeds included in adjusted EBITDA in 2014 and a $50 million decrease in the West due to lower NGL margins.

The increase in adjusted EBITDA in first quarter 2015 was also driven by $490 million, or 66 percent, higher fee-based revenues compared with first quarter 2014. The merger with Access Midstream contributed $369 million and Atlantic-Gulf and Northeast G&P improved $79 million and $43 million, respectively. Excluding the Access Midstream merger, Williams Partners first-quarter 2015 fee-based revenue was up $121 million, or 16 percent. Additionally, the proportional EBITDA from non-consolidated joint ventures increased $90 million for first quarter 2015 versus first quarter 2014, primarily from the addition of Access Midstream’s joint ventures.

Partially offsetting the increases described above, were lower results from Williams Partners’ Geismar plant. The Geismar plant was off-line for first quarter 2014; however, this period included $173 million of business interruption insurance proceeds included in adjusted EBITDA in 2014. Additionally, first quarter 2015 included $162 million higher operating and general and administrative expenses versus first quarter 2014 primarily as a result of the Access Midstream merger. Commodity margins totaled $56 million, down $105 million due primarily to low NGL prices.

Williams Partners reported unaudited first quarter 2015 net income of $89 million compared with $352 million in first quarter 2014. The decrease is primarily due to the absence of $125 million of Geismar business interruption insurance proceeds received in first quarter 2014 and a sharp decline in NGL margins, partially offset by new fee-based revenues from Gulfstar One and Transco expansion projects.

Distributable Cash Flow & Distributions

For first quarter 2015, Williams Partners generated $646 million in distributable cash flow (DCF) attributable to partnership operations, compared with $582 million in DCF attributable to partnership operations in first quarter 2014.

The $64 million increase in DCF for the quarter was driven by the $149 million net increase in adjusted EBITDA, partially offset by higher interest expense and maintenance capital expenditures primarily from the Access Midstream merger.

Williams Partners recently announced a regular quarterly cash distribution of $0.85 per unit for its common unitholders. The cash distribution is consistent with the partnership’s annual 2015 distribution guidance of $3.40 per unit announced on Feb. 18.

CEO Perspective

Alan Armstrong, chief executive officer of Williams Partners’ general partner, made the following comments:

“First quarter 2015 results showed strong fee-based revenue growth from the Atlantic-Gulf and Northeast G&P operating areas as well as from the merger with Access. We expect the second quarter to be even higher with Gulfstar One and Keathley Canyon Connector nearing full production and additional projects being placed in service such as the Rockaway Lateral and the mainline portion of Leidy Southeast.”

 

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“We’ve reaffirmed 2015-2017 guidance for Williams Partners, but we do expect 2015 adjusted EBITDA and DCF to be near the low end of the range due to the extended Geismar ramp-up and the effects of low commodity prices on producers’ volumes and ethylene margins. Our outlook for 2016 and 2017 remains unchanged and we are excited about the rapid growth in DCF and coverage for the balance of the year.”

“Our strategy remains sound and our backlog of projects to serve the demand side of the growing natural gas market continues to build.”

Business Segment Performance

 

Williams Partners

    Adjusted EBITDA  
Amounts in millions    1Q 2015      1Q 2014  

Access Midstream (1)

    $ 314         N/A   

Atlantic-Gulf

      335         266   

NGL & Petchem Services (2)

      7         236   

Northeast G&P

      100         54   

West

      162         212   

Other

      -1         —     
  

 

 

     

 

 

  

Total

    $ 917       $ 768   
  

 

 

     

 

 

  

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

 

(1) First quarter 2014 represents pre-merger Williams Partners and excludes Access Midstream.
(2) First quarter 2014 includes $173 million in assumed business interruption insurance proceeds related to the 2013 incident at the Geismar plant.

Access Midstream

Access Midstream provides gathering, treating, and compression services to producers under long term, fee-based contracts in Pennsylvania, West Virginia, Ohio, Louisiana, Texas, Arkansas, Oklahoma, and Kansas. Access Midstream also includes a non-operated 50 percent interest in the Delaware Basin gas gathering system in the Mid-Continent region and a 49 percent interest in UEOM, a joint project to develop infrastructure for the gathering, processing and fractionation of natural gas and NGLs in the Utica Shale play in Eastern Ohio. Additionally, Access Midstream operates 100 percent of and owns an approximate average 45 percent interest in 11 natural gas gathering systems in the Marcellus Shale region.

Access Midstream reported adjusted EBITDA of $314 million for first quarter 2015. Williams Partners’ results for first quarter of 2014 are on a pre-merger basis and exclude Access Midstream. For first quarter 2014, Access Midstream reported $250 million of adjusted EBITDA. The increase in adjusted EBITDA between years was driven by higher fee-based volumes in the Utica, Eagle Ford and Haynesville areas.

Atlantic-Gulf

Atlantic-Gulf includes the Transco interstate gas pipeline and a 41-percent interest in the Constitution interstate gas pipeline development project, which we consolidate. The segment also includes the partnership’s significant natural gas gathering and processing and crude production handling and transportation in the Gulf Coast region. These operations include a 51-percent interest in Gulfstar One, a 50-percent interest in Gulfstream and a 60-percent interest in Discovery.

 

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Atlantic-Gulf reported adjusted EBITDA of $335 million for first quarter 2015, compared with $266 million for first quarter 2014.

Adjusted EBITDA for the quarter increased primarily due to $79 million higher fee-based revenues from both Gulfstar One and higher transportation fee-based revenues on Transco associated with expansion projects, partially offset by lower NGL margins.

NGL & Petchem Services

NGL & Petchem Services includes an 88.5 percent interest in an olefins production facility in Geismar, La., along with a refinery grade propylene splitter and pipelines in the Gulf Coast region. This segment also includes midstream operations in Alberta Canada, including an oil sands offgas processing plant near Fort McMurray, 260 miles of NGL and olefins pipelines and an NGL/olefins fractionation facility and butylene/butane splitter facility at Redwater. This segment also includes the partnership’s energy commodities marketing business, an NGL fractionator and storage facilities near Conway, Kan. and a 50-percent interest in Overland Pass Pipeline.

NGL & Petchem Services reported adjusted EBITDA of $7 million for first quarter 2015, compared with $236 million for first quarter 2014.

The decrease in first-quarter 2015 adjusted EBITDA was primarily due to lower Geismar results. The prior year period Geismar results included $173 million of business interruption insurance proceeds included in adjusted EBITDA in 2014. For first quarter of 2015, the Geismar plant was off-line for most of the quarter and resumed consistent operations in late March. Additionally, adjusted EBITDA included $54 million lower commodity-related margins primarily at the Canadian operations and higher operating expenses related to the Geismar plant ramp-up.

Northeast G&P

Northeast G&P includes the partnership’s midstream gathering and processing business in the Marcellus and Utica shale regions, including Susquehanna Supply Hub and Ohio Valley Midstream, as well as its 69-percent equity investment in Laurel Mountain Midstream, and its 58.4-percent equity investment in Caiman Energy II. Caiman Energy II owns a 50 percent interest in Blue Racer Midstream. This segment is in the early stages of developing large-scale energy infrastructure solutions for the Marcellus and Utica shale regions.

Northeast G&P reported adjusted EBITDA of $100 million for first quarter 2015, compared with adjusted EBITDA of $54 million for first quarter 2014.

The improved results are primarily due to a $43 million increase in fee-based revenues driven by 32 percent higher volumes primarily at Susquehanna Supply Hub and higher results from our investments in Blue Racer and Laurel Mountain Midstream. Additionally, Ohio Valley Midstream realized $7 million higher adjusted EBITDA driven by higher fee-based volumes and incremental new services.

West

West includes the partnership’s Northwest Pipeline interstate gas pipeline system, as well as gathering, processing and treating operations in Wyoming, the Piceance Basin and the Four Corners area.

West reported adjusted EBITDA of $162 million for first quarter 2015, compared with $212 million for first quarter 2014.

Lower adjusted EBITDA for the quarter was due primarily to $40 million lower NGL margins from low NGL prices.

 

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Guidance

Williams Partners is reaffirming its guidance for the years 2015 through 2017 provided on Feb. 18, 2015. We expect 2015 adjusted EBITDA and distributable cash flow to be near the low end of the range due to the extended Geismar ramp-up and the effects of low commodity prices on volumes and margins.

Williams Partners’ current guidance for its earnings and capital expenditures are displayed in the following table:

 

Williams Partners financial outlook and commodity price assumptions

  
      2015      2016      2017  
(amounts in millions)    Low      Mid      High      Low      Mid      High      Low      Mid      High  

Adjusted EBITDA

    $ 4,300       $ 4,465       $ 4,630       $ 5,120       $ 5,315       $ 5,510       $ 5,750       $ 5,965       $ 6,180   

Distributable Cash Flow (1)

    $ 2,845       $ 3,010       $ 3,175       $ 3,475       $ 3,675       $ 3,875       $ 3,960       $ 4,185       $ 4,410   

Total Cash Distributions

    $ 3,010       $ 3,005       $ 2,995       $ 3,380       $ 3,440       $ 3,515       $ 3,770       $ 3,925       $ 4,090   

Cash Distributions per LP Unit

    $ 3.40       $ 3.40       $ 3.40       $ 3.64       $ 3.71       $ 3.78       $ 3.89       $ 4.04       $ 4.19   

Cash Distribution Coverage Ratio (1)

      .95x         1.00x         1.06x         1.03x         1.07x         1.10x         1.05x         1.07x         1.08x   

Capital & Investment Expenditures

                           

Growth

    $ 3,250       $ 3,525       $ 3,800       $ 2,650       $ 2,925       $ 3,200       $ 2,550       $ 2,850       $ 3,150   

Maintenance

    $ 430       $ 430       $ 430       $ 430       $ 430       $ 430       $ 430       $ 430       $ 430   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total Capital & Investment Expenditures

    $ 3,680       $ 3,955       $ 4,230       $ 3,080       $ 3,355       $ 3,630       $ 2,980       $ 3,280       $ 3,580   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Commodity Price Assumptions

                           

Crude Oil - WTI ($ per barrel)

    $ 45.00       $ 55.00       $ 65.00       $ 53.75       $ 65.00       $ 76.25       $ 57.50       $ 70.00       $ 82.50   

Natural Gas - Henry Hub ($/MMBtu)

    $ 2.50       $ 3.00       $ 3.50       $ 2.75       $ 3.25       $ 3.75       $ 3.25       $ 3.75       $ 4.25   

Composite NGL Barrel ($ per gallon)

    $ 0.360       $ 0.450       $ 0.520       $ 0.410       $ 0.490       $ 0.560       $ 0.460       $ 0.550       $ 0.620   

Crack Spread ($ per pound) (2)

    $ 0.297       $ 0.350       $ 0.411       $ 0.323       $ 0.376       $ 0.443       $ 0.346       $ 0.395       $ 0.466   

Ethylene spot - ($ per pound)

    $ 0.360       $ 0.430       $ 0.500       $ 0.395       $ 0.465       $ 0.540       $ 0.430       $ 0.500       $ 0.580   

Ethane- ($ per gallon)

    $ 0.150       $ 0.190       $ 0.210       $ 0.170       $ 0.210       $ 0.230       $ 0.200       $ 0.250       $ 0.270   

Propane ($ per gallon)

    $ 0.500       $ 0.600       $ 0.700       $ 0.550       $ 0.650       $ 0.750       $ 0.600       $ 0.700       $ 0.800   

Propylene Spot ($ per pound)

    $ 0.405       $ 0.475       $ 0.545       $ 0.415       $ 0.485       $ 0.555       $ 0.430       $ 0.500       $ 0.570   

 

(1) Distributable cash flow and cash distribution coverage ratio are non-GAAP measures. Reconciliations to the most relevant measures included in GAAP are attached to this news release.
(2) Crack spread is based on delivered U.S. Gulf Coast ethylene and Mont Belvieu ethane.

Williams, Williams Partners Analyst Day Set for May 13

Williams and Williams Partners are scheduled to host their annual Analyst Day event May 13. During the event, Williams’ management will give in-depth presentations covering all of Williams’ and Williams Partners L.P.‘s energy infrastructure businesses. The event is scheduled from 8:30 a.m. to approximately 2:30 p.m. EDT.

On the day of the event, www.williams.com will feature presentation files for download along with a link to a live webcast. A replay of the Analyst Day webcast will be available for two weeks following the event.

First Quarter Materials to be Posted Shortly, Live Webcast Scheduled for Tomorrow

Williams Partners’ first quarter 2015 financial results will be posted shortly at www.williams.com. The information will include the data book and analyst package.

Williams and Williams Partners L.P. will jointly host a conference call and live webcast on Thursday, April 30, at 9:30 a.m. EDT. A limited number of phone lines will be available at (800) 475-3716. International callers should dial (719) 457-2660. A link to the live webcast, as well as replays of the webcast in both streaming and downloadable podcast formats, will be available for two weeks following the event at www.williams.com.

 

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Form 10-Q

The company plans to file its first quarter 2015 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 Financial Measures

This news release includes certain financial measures – adjusted EBITDA, distributable cash flow and cash distribution 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 tax expense, net interest expense, equity earnings from equity-method investments, other net investing income, 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 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.

We define distributable cash flow as adjusted EBITDA less maintenance capital expenditures, cash portion of interest expense, income attributable to noncontrolling interests and cash income taxes, plus WPZ restricted stock unit non-cash compensation and certain other adjustments that management believes affects the comparability of results. Adjustments for maintenance capital expenditures and cash portion of interest expense include our proportionate share of these items of our equity-method investments.

We also calculate the ratio of distributable cash flow to the total cash distributed (cash distribution coverage ratio). This measure reflects the amount of distributable cash flow relative to our cash distribution. We have also provided this ratio calculated using the most directly comparable GAAP measure, net income.

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

Neither adjusted EBITDA nor distributable cash flow 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 Partners

Williams Partners (NYSE: WPZ) is an industry-leading, large-cap natural gas infrastructure master limited partnership with a strong growth outlook and major positions in key U.S. supply basins and also in Canada. Williams Partners has 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. 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, home

 

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heating and industrial use. Williams Partners’ operations touch approximately 30 percent of U.S. natural gas. Tulsa, Okla.-based Williams (NYSE: WMB), a premier provider of large-scale North American natural gas infrastructure, owns 60 percent of Williams Partners, including the general-partner interest. 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. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. You typically can identify forward-looking statements 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:

 

  •  

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

 

  •  

The levels of dividends to Williams stockholders;

 

  •  

Future credit ratings of Williams and WPZ;

 

  •  

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.

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 presentation. 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:

 

  •  

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, and 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;

 

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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;

 

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Changes in the current geopolitical situation;

 

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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;

 

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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;

 

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

 

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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.

 

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In addition to causing our actual results to differ, the factors listed above may cause our intentions to change from those statements of intention set forth in this presentation. 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.

Investors are urged to closely consider the disclosures and risk factors in Williams’ and WPZ’s annual reports on Form 10-K filed with the SEC on Feb. 25, 2015, and each of our quarterly reports on Form 10-Q available from our offices or from our website at www.williams.com .

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LOGO

Financial Highlights and Operating Statistics

(UNAUDITED)

Final

March 31, 2015

Williams Partners L.P.

Reconciliation of Non-GAAP Measures

(UNAUDITED)

 

     2014*     2015  

(Dollars in millions, except coverage ratios)

    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year     1st Qtr  

Williams Partners L.P.

             

Reconciliation of GAAP “Net Income” to Non-GAAP “Modified EBITDA”, “Adjusted EBITDA”, and “Distributable cash flow”

             

Net income

    $ 352      $ 223      $ 247      $ 462      $ 1,284      $ 112   

Provision (benefit) for income taxes

      8        5        10        6        29        3   

Interest expense

      106        126        154        176        562        192   

Equity (earnings) losses

      (23 )      (32 )      (85 )      (88 )      (228 )      (51 ) 

Other investing (income) loss

      —          (1 )      —          (1 )      (2 )      (1 ) 

Proportional Modified EBITDA of equity-method investments

      54        62        150        165        431        136   

Depreciation and amortization expenses

      208        207        364        372        1,151        419   

Accretion for asset retirement obligations associated with nonregulated operations

      3        6        3        5        17        7   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Modified EBITDA

      708        596        843        1,097        3,244        817   

Adjustments

             

Estimated minimum volume commitments

      —          —          47        (114 )      (67 )      55   

Acquisition-related expenses

      —          2        13        1        16        —     

Merger and transition related expenses

      —          —          11        30        41        32   

Share of impairment at equity-method investment

      —          —          —          —          —          8   

Geismar Incident adjustment for insurance and timing

      54        96        —          (71 )      79        —     

Loss related to Geismar Incident

      —          —          5        5        10        1   

Impairment of certain materials and equipment

      —          17        —          35        52        3   

Contingency loss (gain), net of legal costs

      —          —          —          (143 )      (143 )      —     

Net gain related to partial acreage dedication release

      —          —          (12 )      —          (12 )      —     

Loss related to compressor station fire

      6        —          —          —          6        —     

Loss related to Opal incident

      —          6        —          2        8        1   

Loss on sale of equipment

      —          —          —          7        7        —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total EBITDA adjustments

      60        121        64        (248 )      (3 )      100   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

    $ 768      $ 717      $ 907      $ 849      $ 3,241      $ 917   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Maintenance capital expenditures(1)

                (54 ) 

Interest expense (cash portion)(2)

                (204 ) 

Cash taxes

                (1 ) 

Income attributable to noncontrolling interests

                (23 ) 

WPZ restricted stock unit non-cash compensation

                7   

Plymouth incident adjustment

                4   
            

 

 

  

Distributable cash flow attributable to Partnership Operations

                646   
            

 

 

  

Total cash distributed

              $ 725   

Coverage ratios:

             

Distributable cash flow attributable to partnership operations divided by Total cash distributed

                0.89   
            

 

 

  

Net income divided by Total cash distributed

                0.15   
            

 

 

  

 

* Recast due to the merger between Williams Partners L.P. and Access Midstream Partners, L.P. and the change to Modified EBITDA as our measure of segment performance in first quarter 2015.

 

Notes:    (1)    Includes proportionate share of maintenance capital expenditures of equity investments.
   (2)    Includes proportionate share of interest expense of equity investments.

Williams Partners L.P.

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

(UNAUDITED)

 

     2014*     2015  

(Dollars in millions)

    1st Qtr      2nd Qtr     3rd Qtr     4th Qtr     Year     1st Qtr  

Modified EBITDA:

              

Access Midstream

    $ —         $ (2 )    $ 254      $ 390      $ 642      $ 228   

Northeast G&P

      48         59        80        208        395        90   

Atlantic-Gulf

      266         270        271        258        1,065        335   

West

      212         199        224        188        823        161   

NGL & Petchem Services

      182         72        17        53        324        6   

Other

      —           (2 )      (3 )      —          (5 )      (3 ) 
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Modified EBITDA

    $ 708       $ 596      $ 843      $ 1,097      $ 3,244      $ 817   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjustments:

              

Access Midstream

              

Acquisition-related expenses

    $ —         $ 2      $ 13      $ 1      $ 16      $ —     

Merger and transition costs

      —           —          8        29        37        30   

Loss on sale of equipment

      —           —          —          7        7        —     

Impairment of certain materials and equipment

      —           —          —          12        12        1   

Estimated minimum volume commitments

      —           —          47        (114 )      (67 )      55   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Access Midstream adjustments

      —           2        68        (65 )      5        86   

Northeast G&P

              

Share of impairment at equity-method investment

      —           —          —          —          —          8   

Contingency (gain) loss, net of legal costs

      —           —          —          (143 )      (143 )      —     

Loss related to compressor station fire

      6         —          —          —          6        —     

Net gain related to partial acreage dedication release

      —           —          (12 )      —          (12 )      —     

Impairment of certain materials and equipment

      —           17        —          13        30        2   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Northeast G&P adjustments

      6         17        (12 )      (130 )      (119 )      10   

Atlantic-Gulf

              

Impairment of certain equipment

      —           —          —          10        10        —     

Total Atlantic-Gulf adjustments

      —           —          —          10        10        —     

West

              

Loss related to Opal incident

      —           6        —          2        8        1   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total West adjustments

      —           6        —          2        8        1   

NGL & Petchem Services

              

Loss related to Geismar Incident

      —           —          5        5        10        1   

Geismar Incident adjustment for insurance and timing

      54         96        —          (71 )      79        —     
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total NGL & Petchem Services adjustments

      54         96        5        (66 )      89        1   

Other

              

WPZ conflicts committee costs associated with merger

      —           —          3        1        4        2   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Other adjustments

      —           —          3        1        4        2   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Adjustments

    $ 60       $ 121      $ 64      $ (248 )    $ (3 )    $ 100   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA:

              

Access Midstream

    $ —         $ —        $ 322      $ 325      $ 647      $ 314   

Northeast G&P

      54         76        68        78        276        100   

Atlantic-Gulf

      266         270        271        268        1,075        335   

West

      212         205        224        190        831        162   

NGL & Petchem Services

      236         168        22        (13 )      413        7   

Other

      —           (2 )      —          1        (1 )      (1 ) 
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Adjusted EBITDA

    $ 768       $ 717      $ 907      $ 849      $ 3,241      $ 917   
  

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

* Recast due to the merger between Williams Partners L.P. and Access Midstream Partners, L.P. and for the change to Modified EBITDA as our measure of segment performance in first quarter 2015.

Williams Partners L.P.

Consolidated Statement of Income

(UNAUDITED)

 

    2014*     2015  

(Dollars in millions, except per-unit amounts)

   1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year     1st Qtr  

Revenues:

            

Service revenues

   $ 763      $ 763      $ 1,066      $ 1,296      $ 3,888      $ 1,192   

Product sales

     930        853        942        796        3,521        519   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

     1,693        1,616        2,008        2,092        7,409        1,711   

Costs and expenses:

            

Product costs

     769        724        807        716        3,016        463   

Operating and maintenance expenses

     248        251        354        424        1,277        380   

Depreciation and amortization expenses

     208        207        364        372        1,151        419   

Selling, general, and administrative expenses

     130        134        168        201        633        193   

Net insurance recoveries—Geismar Incident

     (119 )      (42 )      —          (71 )      (232 )      —     

Other (income) expense—net

     17        27        3        (92 )      (45 )      17   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total costs and expenses

     1,253        1,301        1,696        1,550        5,800        1,472   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating income

     440        315        312        542        1,609        239   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Equity earnings (losses)

     23        32        85        88        228        51   

Other investing income (loss)—net

     —          1        —          1        2        1   

Interest incurred

     (131 )      (151 )      (200 )      (201 )      (683 )      (209 ) 

Interest capitalized

     25        25        46        25        121        17   

Other income (expense)—net

     3        6        14        13        36        16   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes

     360        228        257        468        1,313        115   

Provision (benefit) for income taxes

     8        5        10        6        29        3   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income

     352        223        247        462        1,284        112   

Less: Net income attributable to noncontrolling interests

     —          2        14        80        96        23   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income attributable to controlling interests

   $ 352      $ 221      $ 233      $ 382      $ 1,188      $ 89   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Allocation of net income (loss) for calculation of earnings per common unit:

            

Net income attributable to controlling interests

   $ 352      $ 221      $ 233      $ 382      $ 1,188      $ 89   

Allocation of net income (loss) to general partner

     180        157        187        232        756        195   

Allocation of net income (loss) to Class B units

     —          —          —          —          —          (2 ) 

Allocation of net income (loss) to Class D units

     14        18        17        24        73        68   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Allocation of net income (loss) to common units

   $ 158      $ 46      $ 29      $ 126      $ 359      $ (172 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) per common unit

   $ .44      $ .13      $ .08      $ .35      $ .99      $ (0.34 ) 

Weighted-average number of common units outstanding (thousands)

     361,620        361,620        362,064        362,556        361,968        507,001   

Cash distributions per common unit

   $ .9045      $ .9165      $ .9285      $ .8500      $ 3.5995      $ .8500   

 

* Recast due to the merger between Williams Partners L.P. and Access Midstream Partners, L.P. in first quarter 2015.

 

Note: The sum of net income per common unit for the quarters may not equal the total income per common unit for the year due to changes in the weighted-average number of common units outstanding.

Williams Partners L.P.

Access Midstream

(UNAUDITED)

 

    2014*     2015  

(Dollars in millions)

   1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year     1st Qtr  

Service Revenues

   $ —        $ —        $ 292      $ 473      $ 765      $ 299   

Segment costs and expenses:

            

Operating and maintenance expense

     —          —          82        111        193        93   

Selling, general, and administrative

     —          2        37        46        85        57   

Other (income) expense—net

     —          —          3        20        23        1   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total segment costs and expenses

     —          2        122        177        301        151   

Proportional Modified EBITDA of equity-method investments

     —          —          84        94        178        80   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Modified EBITDA

     —          (2 )      254        390        642        228   

Adjustments

     —          2        68        (65 )      5        86   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

   $ —        $ —        $ 322      $ 325      $ 647      $ 314   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Distributions received

   $ 31      $ 33      $ 78      $ 83      $ 225      $ —     

Operating statistics

            

Throughput, bcf per day (1)

            

Barnett shale

         .876        .853        .865        .812   

Eagle Ford shale

         .348        .376        .362        .388   

Haynesville shale

         .714        .802        .758        .971   

Marcellus shale

         1.193        1.272        1.233        1.232   

Utica shale

         .418        .484        .451        .513   

Mid-Continent

         .554        .537        .545        .506   
     

 

 

    

 

 

    

 

 

    

 

 

  

Total throughput

         4.103        4.324        4.214        4.422   

 

* Recast due to the merger between Williams Partners L.P. and Access Midstream Partners, L.P. and the change to Modified EBITDA as our measure of segment performance in first quarter 2015.

 

(1) Throughput in all regions represents the net throughput allocated to the Partnership’s interest.

Williams Partners L.P.

Northeast G&P

(UNAUDITED)

 

     2014*     2015  

(Dollars in millions)

    1st Qtr      2nd Qtr      3rd Qtr     4th Qtr     Year     1st Qtr  

Revenues:

               

Fee-based revenues:

               

Gathering & processing

    $ 90       $ 93       $ 99      $ 112      $ 394      $ 127   

Production handling and transportation

      3         2         4        5        14        4   

Other fee revenues

      6         12         11        15        44        11   

Commodity-based revenues:

               

NGL sales from gas processing

      2         2         2        3        9        2   

Marketing sales

      58         35         66        62        221        36   

Other sales

      —           —           —          —          —          —     
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  
     159         144         182        197        682        180   

Intrasegment eliminations

      —           —           —          (1 )      (1 )      —     
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

      159         144         182        196        681        180   

Segment costs and expenses:

               

NGL cost of goods sold

      1         —           —          (1 )      —          1   

Marketing cost of goods sold

      57         37         65        62        221        36   

Other segment costs and expenses

      62         67         48        (59 )      118        60   

Intrasegment eliminations

      —           —           —          (1 )      (1 )      —     
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total segment costs and expenses

      120         104         113        1        338        97   

Proportional Modified EBITDA of equity-method investments

      9         19         11        13        52        7   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Modified EBITDA

      48         59         80        208        395        90   

Adjustments

      6         17         (12 )      (130 )      (119 )      10   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

    $ 54       $ 76       $ 68      $ 78      $ 276      $ 100   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Operating statistics

               

Gathering and Processing**

               

Gathering volumes (Tbtu)

      179         189         193        227        788        236   

Plant inlet natural gas volumes (Tbtu)

      29         27         30        32        118        34   

Ethane equity sales (million gallons)

      —           —           —          3        3        4   

Non-ethane equity sales (million gallons)

      2         1         3        2        8        2   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

NGL equity sales (million gallons)

      2         1         3        5        11        6   

Ethane production (million gallons)

      1         1         1        30        33        4   

Non-ethane production (million gallons)

      38         37         42        40        157        45   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

NGL production (million gallons)

      39         38         43        70        190        49   

Laurel Mountain Midstream LLC (equity investment) - 100%

               

Gathering volumes (Tbtu)

      34         36         38        40        148        40   

 

* Recast due to the change to Modified EBITDA as our measure of segment performance in first quarter of 2015.

 

** Excludes volumes associated with partially owned assets that are not consolidated for financial reporting purposes.

Williams Partners L.P.

Atlantic-Gulf

(UNAUDITED)

 

     2014*      2015  

(Dollars in millions)

    1st Qtr      2nd Qtr      3rd Qtr      4th Qtr     Year      1st Qtr  

Revenues:

                 

Fee-based revenues:

                 

Gathering & processing

    $ 16       $ 21       $ 21       $ 20      $ 78       $ 26   

Production handling and transportation

      307         293         296         328        1,224         377   

Other fee revenues

      30         29         28         27        114         29   

Commodity-based revenues:

                 

NGL sales from gas processing

      20         25         19         14        78         11   

Marketing sales

      171         162         171         139        643         87   

Other sales

      1         1         2         (1 )      3         —     

Tracked revenues:

      53         40         52         62        207         49   
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  
     598         571         589         589        2,347         579   

Intrasegment eliminations

      2         2         1         2        7         —     
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Total revenues

      600         573         590         591        2,354         579   

Segment costs and expenses:

                 

NGL cost of goods sold

      6         5         5         5        21         4   

Marketing cost of goods sold

      171         162         171         140        644         87   

Other segment costs and expenses

      137         128         133         164        562         142   

Tracked costs

      53         40         52         62        207         49   

Intrasegment eliminations

      2         2         1         1        6         —     
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Total segment costs and expenses

      369         337         362         372        1,440         282   

Proportional Modified EBITDA of equity-method investments

      35         34         43         39        151         38   
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Modifed EBITDA

      266         270         271         258        1,065         335   

Adjustments

      —           —           —           10        10         —     
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Adjusted EBITDA

    $ 266       $ 270       $ 271       $ 268      $ 1,075       $ 335   
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Operating statistics

                 

Gathering and Processing**

                 

Gathering volumes (Tbtu)

      28         31         30         27        116         34   

Plant inlet natural gas volumes (Tbtu)

      60         72         73         73        278         72   

Ethane equity sales (million gallons)

      2         6         8         2        18         11   

Non-ethane equity sales (million gallons)

      12         18         13         13        56         15   
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

NGL equity sales (million gallons)

      14         24         21         15        74         26   

Ethane margin ($/gallon)

    $ .46       $ .23       $ .14       $ (.03 )    $ .18       $ .04   

Non-ethane margin ($/gallon)

    $ 1.10       $ 1.04       $ 1.00       $ .69      $ .96       $ .43   

NGL margin ($/gallon)

    $ 1.02       $ .82       $ .68       $ .59      $ .77       $ .26   

Ethane production (million gallons)

      45         57         60         59        221         38   

Non-ethane production (million gallons)

      71         87         92         93        343         94   
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

NGL production (million gallons)

      116         144         152         152        564         132   

Discovery Producer Services LLC (equity investment) - 100%

                 

NGL equity sales (million gallons)

      10         10         18         15        53         17   

NGL production (million gallons)

      47         54         65         61        227         62   

Transcontinental Gas Pipe Line

                 

Throughput (Tbtu)

      949.2         796.8         821.3         887.3        3,454.6         1,005.1   

Avg. daily transportation volumes (Tbtu)

      10.5         8.8         8.9         9.6        9.5         11.2   

Avg. daily firm reserved capacity (Tbtu)

      9.6         9.4         9.5         9.9        9.6         10.5   

 

* Recast due to the change to Modified EBITDA as our measure of segment performance in first quarter 2015.

 

** Excludes volumes associated with partially owned assets that are not consolidated for financial reporting purposes.

Williams Partners L.P.

West

(UNAUDITED)

 

     2014*     2015  

(Dollars in millions)

    1st Qtr      2nd Qtr     3rd Qtr      4th Qtr      Year     1st Qtr  

Revenues:

                

Fee-based revenues:

                

Gathering & processing

    $ 132       $ 141      $ 144       $ 143       $ 560      $ 138   

Production handling and transportation

      116         112        113         117         458        116   

Other fee revenues

      8         8        8         8         32        8   

Commodity-based revenues:

                

NGL sales from gas processing

      103         95        116         88         402        48   

Marketing sales

      30         28        29         20         107        10   

Other sales

      12         9        10         6         37        6   

Tracked revenues

      —           1        —           —           1        —     
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  
     401         394        420         382         1,597        326   

Intrasegment eliminations

      —           (1 )      —           —           (1 )      —     
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Total revenues

      401         393        420         382         1,596        326   

Segment costs and expenses:

                

NGL cost of goods sold

      38         35        41         33         147        23   

Marketing cost of goods sold

      30         27        29         19         105        10   

Other cost of goods sold

      4         6        4         4         18        3   

Other segment costs and expenses

      117         126        122         138         503        129   

Tracked costs

      —           1        —           —           1        —     

Intrasegment eliminations

      —           (1 )      —           —           (1 )      —     
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Total segment costs and expenses

      189         194        196         194         773        165   

Proportional Modified EBITDA of equity-method investments

      —           —          —           —           —          —     
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Modifed EBITDA

      212         199        224         188         823        161   

Adjustments

      —           6        —           2         8        1   
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Adjusted EBITDA

    $ 212       $ 205      $ 224       $ 190       $ 831      $ 162   
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Operating statistics

                

Gathering and Processing

                

Gathering volumes (Tbtu)

      229         230        238         234         931        223   

Plant inlet natural gas volumes (Tbtu)

      249         246        267         261         1,023        254   

Ethane equity sales (million gallons)

      4         5        7         4         20        2   

Non-ethane equity sales (million gallons)

      69         71        90         80         310        74   
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

NGL equity sales (million gallons)

      73         76        97         84         330        76   

Ethane margin ($/gallon)

      .12         .22        .21         .17         .19        .39   

Non-ethane margin ($/gallon)

      .94         .84        .81         .66         .81        .34   

NGL margin ($/gallon)

      .89         .80        .77         .64         .77        .34   

Ethane production (million gallons)

      60         86        64         40         250        33   

Non-ethane production (million gallons)

      233         232        255         245         965        236   
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

NGL production (million gallons)

      293         318        319         285         1,215        269   

Northwest Pipeline LLC

                

Throughput (Tbtu)

      192.4         141.3        156.7         196.6         687.0        202.7   

Avg. daily transportation volumes (Tbtu)

      2.1         1.6        1.7         2.1         1.9        2.3   

Avg. daily firm reserved capacity (Tbtu)

      3.0         3.0        3.0         3.0         3.0        3.0   

Former ACMP Gathering Operations Throughput, bcf per day(1)

                

Niobrara

      —           —          .030         .034         .032        .039   

 

(1) Throughput represents the net throughput allocated to the Partnership’s interest.

 

* Recast due to the merger between Williams Partners L.P. and Access Midstream Partners, L.P. and the change to Modified EBITDA as our measure of segment performance in first quarter 2015.

Williams Partners L.P.

NGL & Petchem Services

(UNAUDITED)

 

     2014*     2015  

(Dollars in millions)

    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year     1st Qtr  

Revenues:

             

Fee-based revenues:

             

Production handling and transportation

    $ 7      $ 7      $ 7      $ 7      $ 28      $ 7   

Other fee-based revenues

      33        33        33        35        134        41   

Commodity-based revenues:

             

NGL sales from gas processing

      54        32        31        41        158        28   

Olefin sales

      79        96        73        93        341        71   

Marketing sales

      698        680        748        589        2,715        378   

Other sales

      11        11        8        5        35        4   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     882        859        900        770        3,411        529   

Intrasegment eliminations

      (77 )      (76 )      (72 )      (74 )      (299 )      (54 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

      805        783        828        696        3,112        475   

Segment costs and expenses:

             

NGL cost of goods sold

      28        20        19        23        90        19   

Olefins cost of goods sold

      51        69        46        65        231        62   

Marketing cost of goods sold

      684        681        752        629        2,746        381   

Other cost of goods sold

      12        10        8        7        37        6   

Net insurance recoveries—Geismar Incident

      (119 )      (42 )      —          (71 )      (232 )      —     

Other segment costs and expenses

      54        58        69        84        265        66   

Intrasegment eliminations

      (77 )      (76 )      (72 )      (74 )      (299 )      (54 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total segment costs and expenses

      633        720        822        663        2,838        480   

Proportional Modified EBITDA of equity-method investments

      10        9        11        20        50        11   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Modified EBITDA

      182        72        17        53        324        6   

Adjustments

      54        96        5        (66 )      89        1   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

    $ 236      $ 168      $ 22      $ (13 )    $ 413      $ 7   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Operating statistics

             

Ethane equity sales (million gallons)

      27        28        28        33        116        36   

Non-ethane equity sales (million gallons)

      30        18        19        35        102        39   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

NGL equity sales (million gallons)

      57        46        47        68        218        75   

Ethane production (million gallons)

      29        29        29        34        121        36   

Non-ethane production (million gallons)

      30        28        28        31        117        31   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

NGL production (million gallons)

      59        57        57        65        238        67   

Petrochemical Services

             

Geismar ethylene sales volumes (million lbs)

      —          —          —          —          —          2   

Geismar ethylene margin ($/lb)

    $ —        $ —        $ —        $ —        $ —        $ —     

Canadian propylene sales volumes (millions lbs)

      32        34        34        43        143        39   

Canadian alky feedstock sales volumes (million gallons)

      7        7        6        7        27        7   

Overland Pass Pipeline Company LLC (equity investment)—100%

             

NGL Transportation volumes (Mbbls)

      8,612        8,926        9,482        10,118        37,138        10,845   

 

* Recast due to the change to Modified EBITDA as our measure of segment performance in first quarter 2015.

Williams Partners L.P.

Capital Expenditures and Investments

(UNAUDITED)

 

     2014***      2015  

(Dollars in millions)

    1st Qtr     2nd Qtr      3rd Qtr      4th Qtr     Year      1st Qtr  

Capital expenditures:

                

Access Midstream

    $ —        $ —         $ 165       $ 133      $ 298       $ 133   

Northeast G&P

      359        291         288         253        1,191         115   

Atlantic-Gulf

      180        412         319         387        1,298         361   

West

      22        27         120         100        269         50   

NGL & Petchem Services

      161        211         136         120        628         75   

Other

      2        2         1         3        8         1   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Total*

    $ 724      $ 943       $ 1,029       $ 996      $ 3,692       $ 735   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Purchase of business:

                

NGL & Petchem Services**

    $ 25      $ 31       $ —         $ (56 )    $ —         $ —     
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Purchase of investments:

                

Access Midstream

    $ —        $ —         $ 65       $ 105      $ 170       $ 50   

Northeast G&P

      163        6         12         7        188         10   

Atlantic-Gulf

      51        9         21         25        106         20   

NGL & Petchem Services

      1        1         1         1        4         3   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Total

    $ 215      $ 16       $ 99       $ 138      $ 468       $ 83   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Summary:

                

Access Midstream

    $ —        $ —         $ 230       $ 238      $ 468       $ 183   

Northeast G&P

    $ 522      $ 297       $ 300       $ 260      $ 1,379       $ 125   

Atlantic-Gulf

      231        421         340         412        1,404         381   

West

      22        27         120         100        269         50   

NGL & Petchem Services

      187        243         137         65        632         78   

Other

      2        2         1         3        8         1   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Total

    $ 964      $ 990       $ 1,128       $ 1,078      $ 4,160       $ 818   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Capital expenditures incurred, purchase of business, and purchase of investments:

                

Increases to property, plant, and equipment

    $ 769      $ 867       $ 1,017       $ 918      $ 3,571       $ 645   

Purchase of business

      25        31         —           (56 )      —           —     

Purchase of investments

      215        16         99         138        468         83   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Total

    $ 1,009      $ 914       $ 1,116       $ 1,000      $ 4,039       $ 728   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

*Increases to property, plant, and equipment

    $ 769      $ 867       $ 1,017       $ 918      $ 3,571       $ 645   

Changes in related accounts payable and accrued liabilities

      (45 )      76         12         78        121         90   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Capital expenditures

    $ 724      $ 943       $ 1,029       $ 996      $ 3,692       $ 735   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

 

** These amounts relate to adjustments from the acquisition of certain Canadian operations from a subsidiary of Williams.

 

*** Recast due to the merger between Williams Partners L.P. and Access Midstream Partners, L.P. in first quarter 2015.

Pre-merger Williams Partners L.P.

Reconciliation of Non-GAAP Measures

(UNAUDITED)

 

     2014  

(Dollars in millions, except coverage ratios)

    1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year  

Williams Partners L.P.

           

Reconciliation of Non-GAAP “Distributable cash flow” to GAAP “Net income”

           

Net income

    $ 352      $ 234      $ 218      $ 300      $ 1,104   

Income attributable to noncontrolling interests

      —          (2 )      (1 )      (7 )      (10 ) 

Depreciation and amortization

      208        207        209        231        855   

Non-cash amortization of debt issuance costs included in interest expense

      4        3        4        4        15   

Equity earnings from investments

      (23 )      (32 )      (36 )      (41 )      (132 ) 

Allocated reorganization-related costs

      —          —          —          —          —     

Impairment of certain materials and equipment

      —          17        —          23        40   

Loss related to Geismar Incident

      —          —          5        5        10   

Geismar Incident adjustment for insurance and timing

      54        96        —          (71 )      79   

Contingency (gain) loss, net of legal costs

      —          —          —          (143 )      (143 ) 

Reimbursements from Williams under omnibus agreements

      3        4        1        3        11   

Loss related to Opal incident

      —          6        —          2        8   

Plymouth incident adjustment

      —          3        3        6        12   

Canadian income tax

      —          4        8        28        40   

Income related to partial acreage dedication release

      —          —          (12 )      —          (12 ) 

Maintenance capital expenditures

      (36 )      (90 )      (103 )      (126 )      (355 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Distributable cash flow excluding equity investments

      562        450        296        214        1,522   

Plus: Equity investments cash distributions to Williams Partners L.P.

      43        54        71        52        220   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Distributable cash flow

      605        504        367        266        1,742   

Less: Pre-partnership distributable cash flow

      23        —          —          —        23   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Distributable cash flow attributable to partnership operations

    $ 582      $ 504      $ 367      $ 266      $ 1,719   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total cash distributed

    $ 566      $ 577      $ 587      $ —        $ 1,730   

Coverage ratios:

           

Distributable cash flow attributable to partnership operations divided by Total cash distributed

      1.03        0.87        0.63        NA        NA   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income divided by Total cash distributed

      0.62        0.41        0.37        NA        NA   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

WPZ Net Income to Adjusted EBITDA

 

     2015     2016     2017  

(‘$ in millions)

    Low     Base     High     Low     Base     High     Low     Base     High  

Net income from continuing operations

    $ 1,555      $ 1,720      $ 1,885      $ 2,025      $ 2,225      $ 2,425      $ 2,465      $ 2,690      $ 2,915   

Add: Net interest expense

      855        855        855        965        960        955        1,075        1,065        1,055   

Add: Provision for income taxes

      15        15        15        25        25        25        25        25        25   

Add: Depreciation & amortization (DD&A)

      1,705        1,705        1,705        1,800        1,800        1,800        1,875        1,875        1,875   

Less: Equity earnings from investments

      (380 )      (385 )      (390 )      (495 )      (505 )      (515 )      (645 )      (660 )      (675 ) 

Add: Proportionate share of EBITDA from investments1

      665        670        675        800        810        820        955        970        985   

Adjustments2

      (115 )      (115 )      (115 )      —          —          —          —          —          —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA

    $ 4,300      $ 4,465      $ 4,630      $ 5,120      $ 5,315      $ 5,510      $ 5,750      $ 5,965      $ 6,180   
     2015     2016     2017  

1) Proportionate Share of EBITDA from investments:

    Low     Base     High     Low     Base     High     Low     Base     High  

Net income from continuing operations

    $ 380      $ 385      $ 390      $ 495      $ 505      $ 515      $ 645      $ 660      $ 675   

Add: Net interest expense

      53        53        53        58        58        58        61        61        61   

Add: Depreciation & amortization (DD&A)

      206        206        206        226        226        226        236        236        236   

Other

      26        26        26        21        21        21        13        13        13   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA from Equity Investments

    $ 665      $ 670      $ 675      $ 800      $ 810      $ 820      $ 955      $ 970      $ 985   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     2015     2016     2017  

2) Adjustments:

    Low     Base     High     Low     Base     High     Low     Base     High  

Geismar incident adjustment for insurance and timing

    ($ 150 )    ($ 150 )    ($ 150 )      —          —          —          —          —          —     

ACMP acquisition-related expenses

      35        35        35        —          —          —          —          —          —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total Adjustments

    ($ 115 )    ($ 115 )    ($ 115 )      —          —          —          —          —          —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

WPZ Distributable Cash Flow and Cash Distribution Coverage Ratio

 

     2015     2016     2017  

Dollars in millions, except per L.P. unit

    Low     Base     High     Low     Base     High     Low     Base     High  

Adjusted EBITDA1

    $ 4,300      $ 4,465      $ 4,630      $ 5,120      $ 5,315      $ 5,510      $ 5,750      $ 5,965      $ 6,180   

Less: Maintenance Capex2

      (430 )      (430 )      (430 )      (440 )      (440 )      (440 )      (440 )      (440 )      (440 ) 

Less: Interest Expense (cash portion)3

      (885 )      (885 )      (885 )      (1,000 )      (995 )      (990 )      (1,110 )      (1,100 )      (1,090 ) 

Less: Cash Taxes

      (5 )      (5 )      (5 )      (10 )      (10 )      (10 )      (10 )      (10 )      (10 ) 

Less: Noncontrolling Interests

      (135 )      (135 )      (135 )      (195 )      (195 )      (195 )      (230 )      (230 )      (230 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Distributable Cash Flow Attributable to Partnership Operations

    $ 2,845      $ 3,010      $ 3,175      $ 3,475      $ 3,675      $ 3,875      $ 3,960      $ 4,185      $ 4,410   

Cash Distributions (accrued)

    $ 3,010      $ 3,005      $ 2,995      $ 3,380      $ 3,440      $ 3,515      $ 3,770      $ 3,925      $ 4,090   

—per L.P. Unit

    $ 3.40      $ 3.40      $ 3.40      $ 3.64      $ 3.71      $ 3.78      $ 3.89      $ 4.04      $ 4.19   

—Annual growth rate

            7 %      9 %      11 %      7 %      9 %      11 % 

Cash Distribution Coverage Ratio

      0.95x        1.00x        1.06x        1.03x        1.07x        1.10x        1.05x        1.07x        1.08x   

Notes: 1 A more detailed schedule reconciling this non-GAAP measure is provided in this presentation.    2 Includes proportionate share of maintenance capex of equity investments    3 Includes proportionate share of interest expense of equity investments