- 4Q 2016 Cash Flow from Operations of
$1.582 billion, Up $990 million Including Barnett Contract
Restructure
- Full-Year 2016 Adjusted EBITDA of
$4.436 billion, Up 8%
- Increased WPZ Fee-Based Revenues and
Lowered Expenses for Full-Year 2016 as Additional Assets were
Placed Into Service
- Financial Repositioning Announced Jan.
9 Strengthens Williams Partners and Williams, Boosts Growth
Outlook
Williams (NYSE: WMB) today announced its financial results for
the three and 12 months ended Dec. 31, 2016.
Williams
Summary Financial Information 4Q Full Year
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 2016
2015 Unaudited GAAP Measures Cash Flow from
Operations $ 1,582 $ 592 $ 3,664 $ 2,678 Net income (loss) ($15 )
($715 ) ($424 ) ($571 ) Net income (loss) per share ($0.02 ) ($0.95
) ($0.57 ) ($0.76 ) Non-GAAP Measures (1) Adjusted income
from continuing operations $ 130 $ 6 $ 450 $ 405 Adjusted income
from continuing operations per share $ 0.17 $ 0.01 $ 0.60 $ 0.54
Adjusted EBITDA $ 1,123 $ 1,066 $ 4,436 $ 4,104 Cash Available for
Dividends and other uses $ 518 $ 436 $ 1,821 $ 1,811 Dividend
Coverage Ratio 3.45x 0.91x 1.44x 0.99x
(1) Schedules reconciling adjusted income
from continuing operations, adjusted EBITDA, 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.
Fourth-Quarter and Full-Year 2016 Financial Results
For fourth-quarter 2016, Williams reported an unaudited net loss
attributable to Williams of $15 million, a $700 million improvement
from fourth-quarter 2015 net loss. The favorable change was due
primarily to the absence of a $1.1 billion pre-tax impairment of
goodwill and $698 million of lower pre-tax impairments of
equity-method investments and other assets. The improvement also
reflected lower operating and maintenance (O&M) and selling,
general, and administrative (SG&A) expenses and higher
commodity margins.
For the year, Williams reported an unaudited net loss
attributable to Williams of $424 million, a $147 million
improvement when compared to results for full-year 2015. The change
was driven primarily by the absence of a $1.1 billion pre-tax
impairment of goodwill and $929 million of lower pre-tax
impairments of equity-method investments. The favorable change was
partially offset by an increase of $664 million in pre-tax
impairments of certain assets, primarily associated with our
disposed Canadian assets, $119 million of lower insurance
recoveries, and an unfavorable change in net income attributable to
non-controlling interests driven primarily by higher WPZ income and
reduced incentive distributions from WPZ associated with the
termination of the WPZ Merger Agreement.
Williams reported fourth-quarter 2016 Adjusted EBITDA of $1.123
billion, a $57 million increase over fourth-quarter 2015. The
favorable change was due primarily to a $49 million increase in
Adjusted EBITDA from the Williams Partners segment.
For the year, Williams reported Adjusted EBITDA of $4.436
billion, an increase of $332 million compared to full-year 2015
results. The increase was due primarily to a $338 million increase
in Adjusted EBITDA from the Williams Partners segment.
CEO Perspective
Alan Armstrong, Williams’ president and chief executive officer,
made the following comments:
“We realized strong cash flows from operations in 2016. The fact
that Williams delivered 8 percent year-over-year growth in Adjusted
EBITDA demonstrates the strength of our proven natural gas-focused
strategy. Our well-positioned natural gas infrastructure assets
enabled us to once again organically grow fee-based revenues while
our disciplined approach drove lower expenses even as we brought
new assets online.
“The demand for natural gas for clean-power generation, heating,
industrial use and LNG continues to increase as highlighted last
month when Transco established record high one-day and three-day
delivery volumes. We have construction underway on a number of
Transco-expansion projects. And just this month, we successfully
placed into service our Gulf Trace project, a 1.2 million dekatherm
per day expansion of the Transco pipeline system to serve Cheniere
Energy’s Sabine Pass Liquefaction export terminal in Louisiana.
Gulf Trace is just one of the five Transco projects that are
planned to be completed this year. This project was also brought in
under budget and nearly six months ahead of its original planned
in-service date.
“In January, we took steps to strengthen our financial position
and lower our cost of capital to match up with our peer-leading,
high-quality, low-risk growth portfolio. We continue to fortify our
focus on natural gas market fundamentals. Once the Geismar
monetization process is completed, we expect to be at approximately
97 percent fee-based revenues driven by natural gas volumes. As a
result, Williams and Williams Partners are positioned for
long-term, sustainable growth.”
Business Segment Results
For fourth-quarter and full-year 2016, Williams’ business
segments for financial reporting are Williams Partners, Williams
NGL & Petchem Services and Other.
Williams Modified and
Adjusted EBITDA 4Q 2016 4Q 2015 Full-Year
2016 Full-Year 2015 Amounts in millions
Modified
EBITDA Adjust. Adjusted EBITDA
Modified EBITDA Adjust. Adjusted
EBITDA Modified EBITDA Adjust.
Adjusted EBITDA Modified EBITDA Adjust.
Adjusted EBITDA Williams Partners $
1,235 ($122 ) $ 1,113 $ 1,112 ($48 ) $ 1,064 $ 3,864 $ 563 $ 4,427
$ 4,003 $ 86 $ 4,089 Williams NGL & Petchem (11 ) 7 (4 ) (70 )
64 (6 ) (540 ) 497 (43 ) (83 ) 64 (19 ) Other 3
11 14 (8 )
16 8 (2 ) 54
52 (29 ) 63
34 Total
$ 1,227
($104 ) $ 1,123
$ 1,034 $
32 $ 1,066
$ 3,322 $
1,114 $ 4,436
$ 3,891 $
213 $ 4,104
Definitions of modified EBITDA and adjusted EBITDA and schedules
reconciling to net income are included in 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 fourth-quarter 2016 Modified EBITDA
of $1.235 billion, an increase of $123 million from fourth-quarter
2015. Adjusted EBITDA increased $49 million to $1.113 billion. The
favorable change in Modified EBITDA was due primarily to $34
million lower O&M and SG&A expenses, $17 million higher
commodity margins, and a $62 million decrease in asset-impairment
charges. Adjusted EBITDA generally excludes the impairment charges,
and was also unfavorably impacted by approximately $23 million due
to a one-time, year-to-date true-up of amounts previously
recognized during 2016 related to Barnett Shale minimum volume
commitments caused by the Barnett re-contracting that occurred
during the fourth quarter.
For the year, Williams Partners reported Modified EBITDA of
$3.864 billion, a decrease of $139 million compared to results for
full-year 2015. Adjusted EBITDA increased $338 million to $4.427
billion. The decrease in Modified EBITDA was driven primarily by a
non-cash impairment charge of $341 million associated with the sale
of Williams Partners’ former Canadian operations, and $119 million
of lower business interruption proceeds. Partially offsetting these
unfavorable changes were $134 million lower O&M and SG&A
expenses, $111 million higher olefins margins, and $78 million
higher fee-based revenues. Adjusted EBITDA excludes the impairment
charges described above.
Williams Partners’ complete financial results for fourth-quarter
and full-year 2016 are provided in the earnings news release issued
today by Williams Partners.
Williams NGL & Petchem Services
In fourth-quarter and full-year 2016, this segment included
petchem pipeline projects on the Gulf Coast. Prior to the sale of
all of our Canadian-based assets effective Sept. 23, 2016, this
segment included an offgas processing plant in Canada at CNRL’s
Horizon upgrader that went into service in first-quarter 2016. The
segment also included a propane dehydrogenation facility growth
project under development in Canada.
Williams NGL & Petchem Services reported Modified EBITDA of
($11) million for fourth-quarter 2016, compared with ($70) million
for fourth-quarter 2015. Adjusted EBITDA improved $2 million to
($4) million. The improvement in Modified EBITDA was driven by the
absence of a $64 million write-off in 2015 of previously
capitalized project development costs for an olefins pipeline
project.
For the year, Williams NGL & Petchem Services reported
Modified EBITDA of ($540) million, a decrease of $457 million when
compared to results for full-year 2015. Adjusted EBITDA decreased
$24 million to ($43) million primarily related to our now former
Canadian operations. The decrease in Modified EBITDA was due
primarily to a $406 million impairment of our now former Canadian
operations, a $32 million additional loss associated with the
completion of the sale of our now former Canadian operations, $61
million of Canadian project development costs and the absence of a
$64 million write-off of previously capitalized project development
costs for an olefins pipeline project – all of which are excluded
from Adjusted EBITDA.
Financial Repositioning and Guidance
On Jan. 9, 2017, Williams and Williams Partners announced a
financial repositioning plan designed to enhance Williams’ and
Williams Partners’ credit profile, improve Williams Partners’ cost
of capital, eliminate Williams Partners’ need to access public
equity markets for the next several years and boost their growth
outlook. The plan included the permanent waiver of Incentive
Distribution Rights (IDRs) held by Williams in exchange for 289
million newly issued Williams Partners’ common units, which closed
on Jan. 9.
Additionally, Williams issued 74.75 million new shares to fund
the purchase of 58.7 million newly issued Williams Partners common
units for total consideration of $2.1 billion. Williams
Partners then used $600 million of these proceeds to repay 7.25
percent notes that matured on Feb. 1, 2017 and also announced that
on Feb. 23, 2017, it will redeem all of its $750 million 6.125
percent senior notes due 2022. We expect Williams Partners will use
the balance of the proceeds to fund capital and investment
expenditures. Also as previously announced, Williams expects
to raise more than $2 billion in after-tax proceeds from planned
asset monetizations of Geismar and other select assets that are not
core to our strategy. We expect Williams Partners will use the
proceeds from these monetizations for additional debt reduction and
to fund capital and investment expenditures.
As previously announced, Williams expects to have excess cash
available to reduce debt throughout 2017 after paying its dividend
and other cash requirements. As a result, we expect to reduce
Williams’ parent-company debt by approximately $500 million for
full-year 2017. Williams expects a dividend coverage ratio of 1.3x
in 2017 or approximately 1.7x when adjusted to include Williams’ 74
percent economic interest in Williams Partners’ excess
coverage.
Also as part of this plan, the company announced its intent to
increase its regular quarterly dividend to $0.30 per share
effective with the quarterly dividend to be paid in March 2017 – a
50 percent increase from $0.20 per share paid in December 2016.
Williams expects to pay $1.20 per share for 2017 and is targeting
10 to 15 percent annual growth for the next several years.
Williams’ and Williams Partners’ Guidance for 2017 (as
previously announced on Jan. 9) is unchanged.
Williams’ Year-End 2016 Materials to Be Posted Shortly;
Q&A Webcast Scheduled for Tomorrow
Williams’ fourth-quarter and full-year 2016 financial results
package will be posted shortly at www.williams.com. The materials
will include the data book and analyst package.
Williams and Williams Partners will host a joint Q&A live
webcast on Thursday, Feb. 16 at 9:30 a.m. EST. A limited number of
phone lines will be available at (800) 946-0709. International
callers should dial (719) 325-2376. The conference ID is 7387877. A
link to the webcast, as well as replays of the webcast, will be
available for two weeks following the event at
www.williams.com.
Form 10-K
The company plans to file its 2016 Form 10-K with the Securities
and Exchange Commission (SEC) next week. Once filed, the document
will be available on both the SEC and Williams websites.
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 other uses, WMB
economic DCF, dividend coverage ratio, and economic coverage ratio
– that are non-GAAP financial measures as defined under the rules
of the SEC.
Our segment performance measure, modified EBITDA, is defined as
net income (loss) before income (loss) from discontinued
operations, income tax expense, net interest expense, equity
earnings from equity-method investments, other net investing
income, impairments of equity investments and goodwill,
depreciation and amortization expense, and accretion expense
associated with asset retirement obligations for nonregulated
operations. We also add our proportional ownership share (based on
ownership interest) of modified EBITDA of equity-method
investments.
Adjusted EBITDA further excludes items of income or loss that we
characterize as unrepresentative of our ongoing operations 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 and other uses 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. We further adjust these metrics to include
Williams’ proportional share of WPZ’s distributable cash flow in
excess of distributions, resulting in WMB economic DCF and economic
coverage ratio.
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.
Neither adjusted EBITDA, adjusted income, or cash available for
dividends and other uses 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 U.S. natural gas and natural gas products
to growing demand for cleaner fuel and feedstocks. Headquartered in
Tulsa, Okla., Williams owns approximately 74 percent of Williams
Partners L.P. (NYSE: WPZ). 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, 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) may contain or incorporate by
reference statements that do not directly or exclusively relate to
historical facts. Such statements are “forward-looking statements”
within the meaning of Section 27A of the Securities Act of
1933, as amended (Securities Act), and Section 21E of the
Securities Exchange Act of 1934, as amended (Exchange Act). These
forward-looking statements relate to anticipated financial
performance, management’s plans and objectives for future
operations, business prospects, outcome of regulatory proceedings,
market conditions and other matters. We make these forward-looking
statements in reliance on the safe harbor protections provided
under the Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical facts,
included in this report that address activities, events or
developments that we expect, believe or anticipate will exist or
may occur in the future, are forward-looking statements.
Forward-looking statements can be identified by various forms of
words such as “anticipates,” “believes,” “seeks,” “could,” “may,”
“should,” “continues,” “estimates,” “expects,” “forecasts,”
“intends,” “might,” “goals,” “objectives,” “targets,” “planned,”
“potential,” “projects,” “scheduled,” “will,” “assumes,”
“guidance,” “outlook,” “in service date” or other similar
expressions. These forward-looking statements are based on
management’s beliefs and assumptions and on information currently
available to management and include, among others, statements
regarding:
- Levels of cash distributions by
Williams Partners L.P. (WPZ) with respect to 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;
- Demand for our services.
Forward-looking statements are based on numerous assumptions,
uncertainties and risks that could cause future events or results
to be materially different from those stated or implied in this
report. Many of the factors that will determine these results are
beyond our ability to control or predict. Specific factors that
could cause actual results to differ from results contemplated by
the forward-looking statements include, among others, the
following:
- Whether WPZ will produce sufficient
cash flows to provide the level of cash distributions that we
expect;
- Whether we are able to pay current and
expected levels of dividends;
- Whether we will be able to effectively
execute our financing plan including the receipt of anticipated
levels of proceeds from planned asset sales;
- Whether we will be able to effectively
manage the transition in our board of directors and management as
well as successfully execute our business restructuring;
- Availability of supplies, including
lower than anticipated volumes from third parties served by our
midstream business, and market demand;
- Volatility of pricing including the
effect of lower than anticipated energy commodity prices and
margins;
- Inflation, interest rates, and general
economic conditions (including future disruptions and volatility in
the global credit markets and the impact of these events on
customers and suppliers);
- The strength and financial resources of
our competitors and the effects of competition;
- Whether we are able to successfully
identify, evaluate and timely execute our capital projects and
other investment opportunities in accordance with our forecasted
capital expenditures budget;
- Our ability to successfully expand our
facilities and operations;
- Development of alternative energy
sources;
- Availability of adequate insurance
coverage and the impact of operational and developmental hazards
and unforeseen interruptions;
- The impact of existing and future laws,
regulations, the regulatory environment, environmental liabilities,
and litigation as well as our ability to obtain permits and achieve
favorable rate proceeding outcomes;
- Our costs and funding obligations for
defined benefit pension plans and other postretirement benefit
plans;
- 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 and physical damage
to our facilities;
- Acts of terrorism, including
cybersecurity threats and related disruptions;
- Additional risks described in our
filings with the SEC.
Given the uncertainties and risk factors that could cause our
actual results to differ materially from those contained in any
forward-looking statement, we caution investors not to unduly rely
on our forward-looking statements. We disclaim any obligations to
and do not intend to update the above list or announce publicly the
result of any revisions to any of the forward-looking statements to
reflect future events or developments.
In addition to causing our actual results to differ, the factors
listed above and referred to below may cause our intentions to
change from those statements of intention set forth in this report.
Such changes in our intentions may also cause our results to
differ. We may change our intentions, at any time and without
notice, based upon changes in such factors, our assumptions, or
otherwise.
Because forward-looking statements involve risks and
uncertainties, we caution that there are important factors, in
addition to those listed above, that may cause actual results to
differ materially from those contained in the forward-looking
statements. For a detailed discussion of those factors, see Part I,
Item 1A. Risk Factors in our Annual Report on Form 10-K filed with
the SEC on Feb. 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.
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 2nd Qtr
3rd Qtr 4th Qtr Year
Income (loss) attributable to The
Williams Companies, Inc. available to common stockholders
$ 70 $ 114 $ (40 ) $ (715 )
$ (571 ) $ (65 ) $ (405 ) $ 61 $
(15 ) $ (424 )
Income (loss) - diluted earnings
(loss) per common share $ .09 $ .15
$ (.05 ) $ (.95 ) $ (.76 ) $ (.09 ) $ (.54 )
$ .08 $ (.02 ) $ (.57 )
Adjustments:
Williams
Partners
Estimated minimum volume commitments $ 55 $ 55 $ 65 $ (175 ) $ —
$ 60 $ 64 $ 70 (194 ) $ — Impairment of certain assets 3 24 2 116
145 — 389 — 22 411 Organizational realignment-related costs — — — —
— — — — 24 24 Loss related to Canada disposition — — — — — — — 32 2
34 Severance and related costs — — — — — 25 — — 12 37 Constitution
Pipeline project development costs — — — — — — 8 11 9 28 Potential
rate refunds associated with rate case litigation — — — — — 15 — —
— 15 ACMP Merger and transition-related expenses 32 14 2 2 50 5 — —
— 5 Share of impairment at equity-method investments 8 1 17 7 33 —
— 6 19 25 Gain on asset retirement — — — — — — — — (11 ) (11 )
Geismar Incident adjustment for insurance and timing — (126 ) — —
(126 ) — — — (7 ) (7 ) 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 asset monetizations — — — — — —
— — 2 2 Expenses associated with strategic alternatives —
— 1
1 2 — —
— —
— Total Williams Partners adjustments 100 (45 ) 79 (48 ) 86
105 461 119 (122 ) 563
Williams NGL &
Petchem Services
Impairment of certain assets — — — 64 64 — 406 — 8 414 Loss related
to Canada disposition — — — — — — — 33 (1 ) 32 Canadian PDH
facility project development costs — — — — — 34 11 16 — 61 Gain on
sale of certain assets — —
— — —
(10 ) — —
— (10 ) Total Williams NGL &
Petchem Services adjustments — — — 64 64 24 417 49 7 497
Other
Expenses associated with strategic alternatives — 7 18 5 30 6 13 21
7 47 Other ACMP Merger and transition-related expenses 6 9 7 12 34
2 — — — 2 Severance and related costs — — — — — 1 — — 4 5
Contingency gain — — — (9 ) (9 ) — — — — — Accrued long-term
charitable commitment — —
— 8 8
— — —
— — Total Other
adjustments 6 16
25 16 63 9
13 21
11 54 Adjustments included in
Modified EBITDA 106 (29 ) 104 32 213 138 891 189 (104 ) 1,114
Adjustments below
Modified EBITDA
Impairment of equity-method investments - Williams Partners — — 461
898 1,359 112 — — 318 430 Impairment of goodwill - Williams
Partners — — — 1,098 1,098 — — — — — Gain on sale of equity-method
investment - Williams Partners — — — — — — — (27 ) — (27 )
Interest expense related to potential rate
refunds associated with rate case litigation - Williams
Partners
— — — — — 3 — — — 3
Accelerated depreciation related to
reduced salvage value of certain assets - Williams Partners
— — — 7 7 — — — 4 4
Change in depreciable life associated with
organizational realignment - Williams Partners
— — — — — — — — (16 ) (16 ) ACMP Acquisition-related financing
expenses - Williams Partners 2 — — — 2 — — — — — Interest income on
receivable from sale of Venezuela assets - Other — (9 ) (18 ) — (27
) (18 ) (18 ) — — (36 ) Allocation of adjustments to noncontrolling
interests (33 ) 21 (212 )
(767 ) (991 ) (83 )
(154 ) (41 ) (76 )
(354 ) (31 ) 12 231 1,236 1,448 14 (172 ) (68 ) 230 4
Total
adjustments 75 (17 ) 335 1,268 1,661 152 719 121 126 1,118 Less
tax effect for above items (28 ) 4 (129 ) (473 ) (626 ) (61 ) (202
) (39 ) 19 (283 ) Adjustments for tax-related items (1) 5 9 1 (74 )
(59 ) — 34 5 — 39
Adjusted income available to common
stockholders $ 122 $ 110 $ 167
$ 6 $ 405 $ 26 $
146 $ 148 $ 130 $ 450
Adjusted diluted earnings per common share $ .16
$ .15 $ .22 $ .01
$ .54 $ .03 $ .19 $ .20
$ .17 $ .60
Weighted-average
shares - diluted (thousands) 752,028 752,775 753,100 751,930
752,460 751,040 751,297 751,858 752,818 751,761 (1) The
fourth quarter of 2015 includes an unfavorable adjustment related
to the translation of certain foreign-denominated unrecognized tax
benefits. The second and third quarters of 2016 include a favorable
adjustment related to the reversal of a cumulative anticipatory
foreign tax credit. 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.
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 2nd Qtr 3rd Qtr 4th Qtr Year
Net income (loss) $ 13 $ 183 $
(173 ) $ (1,337 ) $ (1,314 ) $ (13 ) $ (505 ) $ 131 $ 37 $ (350 )
Provision (benefit) for income taxes 30 83 (65 ) (447 ) (399 ) 2
(145 ) 69 49 (25 ) Interest expense 251 262 263 268 1,044 291 298
297 293 1,179 Equity (earnings) losses (51 ) (93 ) (92 ) (99 ) (335
) (97 ) (101 ) (104 ) (95 ) (397 ) Impairment of equity-method
investments — — 461 898 1,359 112 — — 318 430 Other investing
(income) loss - net — (9 ) (18 ) — (27 ) (18 ) (18 ) (28 ) 1 (63 )
Proportional Modified EBITDA of equity-method investments 136 183
185 195 699 189 191 194 180 754 Impairment of goodwill — — — 1,098
1,098 — — — — — Depreciation and amortization expenses 427 428 432
451 1,738 445 446 435 437 1,763 Accretion for asset retirement
obligations associated with nonregulated operations 6
9 6 7
28 7 8
9 7
31
Modified EBITDA $ 812
$ 1,046 $ 999
$ 1,034 $ 3,891
$ 918 $ 174
$ 1,003 $ 1,227
$ 3,322 Williams Partners
$ 817 $ 1,053 $ 1,021 $ 1,112 $ 4,003 $ 955 $ 604 $ 1,070 $ 1,235 $
3,864 Williams NGL & Petchem Services (5 ) (3 ) (5 ) (70 ) (83
) (38 ) (429 ) (62 ) (11 ) (540 ) Other —
(4 ) (17 ) (8 )
(29 ) 1 (1 ) (5 )
3 (2 )
Total Modified EBITDA
$ 812 $ 1,046
$ 999 $ 1,034
$ 3,891 $ 918
$ 174 $
1,003 $ 1,227
$ 3,322 Adjustments included in
Modified EBITDA (1): Williams Partners $ 100 $ (45 ) $
79 $ (48 ) $ 86 $ 105 $ 461 $ 119 $ (122 ) $ 563 Williams NGL &
Petchem Services — — — 64 64 24 417 49 7 497 Other 6
16 25 16
63 9 13
21 11
54
Total Adjustments included in Modified
EBITDA $ 106 $ (29
) $ 104 $
32 $ 213 $
138 $ 891 $
189 $ (104 )
$ 1,114 Adjusted EBITDA:
Williams Partners $ 917 $ 1,008 $ 1,100 $ 1,064 $ 4,089 $ 1,060 $
1,065 $ 1,189 $ 1,113 $ 4,427 Williams NGL & Petchem Services
(5 ) (3 ) (5 ) (6 ) (19 ) (14 ) (12 ) (13 ) (4 ) (43 ) Other
6 12 8
8 34 10
12 16 14
52
Total Adjusted EBITDA $
918 $ 1,017
$ 1,103 $ 1,066
$ 4,104 $ 1,056
$ 1,065 $ 1,192
$ 1,123 $
4,436
(1)
Adjustments by segment are detailed in the
"Reconciliation of Income (Loss) Attributable to The Williams
Companies, Inc. to Adjusted Income," which is also included in
these materials.
Dividend Coverage Ratio
(UNAUDITED) 2015 2016 (Dollars in millions, except per share
amounts) 1st Qtr 2nd Qtr 3rd Qtr
4th Qtr Year 1st Qtr 2nd Qtr 3rd
Qtr 4th Qtr Year
Distributions from WPZ (accrued / “as declared” basis) (3) $ 515
$ 513 $ 513 $ 513
$ 2,054 $ 513 $ 513 $ 522
$ 597 $ 2,145 Williams NGL &
Petchem Services adjusted cash flow (see below) (5 ) (3 ) (5 ) (6 )
(19 ) (14 ) (12 ) (13 ) (4 ) (43 ) Corporate interest (64 )
(64 ) (63 ) (64 )
(255 ) (66 ) (67 ) (68 )
(67 ) (268 ) Subtotal 446 446 445 443
1,780 433 434 441 526 1,834 WMB cash tax rate -12 % 0 % 0 % 0 % -3
% 0 % -1 % 0 % 1 % 0 % WMB cash taxes (excludes cash taxes paid by
WPZ) (1) 55 — — — 55 2 3 — (7 ) (2 ) Corporate Capex (6 )
(5 ) (6 ) (7 )
(24 ) (6 ) (4 ) —
(1 ) (11 ) WMB cash available for
dividends and other uses (4) $ 495 $ 441 $ 439 $ 436 $ 1,811 $ 429
$ 433 $ 441 $ 518 $ 1,821 WMB dividends paid (434 )
(442 ) (480 ) (480 )
(1,836 ) (480 ) (481 )
(150 ) (150 ) (1,261 ) Excess cash
available after dividends $ 61 $ (1 ) $ (41 ) $ (44 ) $ (25 ) $ (51
) $ (48 ) $ 291 $ 368 $ 560 Dividend per share $ 0.5800 $
0.5900 $ 0.6400 $ 0.6400 $ 2.4500 $ 0.6400 $ 0.6400 $ 0.2000 $
0.2000 $ 1.6800 Coverage ratio (2)(3) 1.14 1.00 0.91 0.91
0.99 0.89 0.90 2.94 3.45 1.44
Williams NGL &
Petchem Services Adjusted Cash Flow:
Modified EBITDA (5 ) (3 ) (5 ) (70 ) (83 ) (38 ) (429 ) (62 ) (11 )
(540 ) Segment adjustments — —
— 64 64
24 417 49
7 497 Adjusted
EBITDA (5 ) (3 ) (5 ) (6 ) (19 ) (14 ) (12 ) (13 ) (4 ) (43 ) Less:
Maintenance Capex — —
— — —
— — —
— — Adjusted cash flow (5
) (3 ) (5 ) (6 ) (19 ) (14 ) (12 ) (13 ) (4 ) (43 ) 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 available for dividends and other uses / 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. Cash distributions for the third quarter of 2016 has been
increased by $150 million in order to exclude the impact of the IDR
waiver associated with the sale of the Canadian operations.
(4) As previously announced, effective with the third quarter of
2016, Williams reduced its regular dividend from $0.64 per share to
$0.20 per share. The dividend reduction supports Williams' plan to
reinvest a portion of the cash available for dividends and other
uses into Williams Partners.
WMB Dividend
Coverage Ratio 2017 (Dollars in billions, except per
share amounts) Guidance
Distributions from WPZ (accrued / “as declared” basis) $ 1.6
Corporate interest (0.3 ) Subtotal $ 1.3 WMB cash tax
rate 0.0 % WMB cash taxes (excludes cash taxes paid by WPZ) -
Corporate Capex < (0.1) WMB cash available for dividends and
other uses $ 1.3 WMB dividends paid (1.0 ) Excess cash
available after dividends $ 0.3 Dividend per share $ 1.2000
Coverage ratio (1) 1.3x
Memo:
WMB Economic Interest in WPZ Cash Coverage (2) $ 0.4 WMB cash
available for dividends and other uses 1.3 WMB
Economic Distributable Cash Flow (3) $ 1.7 Economic coverage
ratio (4) 1.7x
Notes:
-
Assumes WTI oil price of approximately $55
per barrel and a Henry Hub natural gas price of approximately $3.35
per mmbtu
-
WMB does not expect to be a U.S. federal
income cash taxpayer through at least 2020, excluding taxes on any
potential asset monetizations
(1)
WMB cash available for dividends and other
uses / WMB dividends paid
(2)
WMB pro rata share (~74%) of WPZ
Distributable Cash Flow in excess of Cash Distributions
(3)
WMB Economic Interest in WPZ Cash Coverage
+ WMB cash available for dividends and other uses
(4)
WMB Economic Distributable Cash Flow / WMB
dividends paid
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170215006146/en/
WilliamsMedia Contact:Keith Isbell,
918-573-7308orInvestor Contacts:John Porter,
918-573-0797orBrett Krieg, 918-573-4614
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