Williams (NYSE: WMB) today announced its unaudited financial
results for the three and 12 months ended December 31, 2023.
Continued strength in base business drives higher financial
results
- GAAP net income of $3.273 billion, or $2.68 per diluted share
(EPS) – up 60% vs. 2022
- Adjusted net income of $2.334 billion, or $1.91 per diluted
share (Adj. EPS) – up 5% vs. 2022
- Adjusted EBITDA of $6.779 billion – up $361 million or 6% vs.
2022
- Cash flow from operations (CFFO) of $6.055 billion – up $1.166
billion or 24% vs. 2022
- Available funds from operations (AFFO) of $5.213 billion – up
$295 million or 6% vs. 2022
- Dividend coverage ratio of 2.39x (AFFO basis)
- Record gathering volumes of nearly 18 Bcf/d and contracted
transmission capacity of 32.3 Bcf/d – up 6% and 32%, respectively,
from 2022
- Adjusted EBITDA guidance range of $6.8 billion to $7.1 billion
in 2024 and $7.2 billion to $7.6 billion in 2025, yielding an
expected 5-year CAGR of 8%
- Ended year with 3.58x leverage ratio
- Raised dividend by 6.1% to $1.90 annualized; hit 50 consecutive
years of dividend payments
Transmission projects driving additional business growth in
2024-25; strategic acquisitions add highly contracted take-or-pay
transmission and fee-based storage assets
- Pre-filed FERC application for Transco's 1.6 Bcf/d Southeast
Supply Enhancement 1Q 2024
- Received FERC certificates for Transco's Commonwealth Energy
Connectors, Southside Reliability Enhancement, Southeast Energy
Connector and Texas to Louisiana Energy Pathway
- Placed Transco's Carolina Market Link in service in 1Q
2024
- Placed phase one of Transco's Regional Energy Access expansion
in service in 4Q 2023 ahead of schedule with remainder expected by
4Q 2024
- Completed Cardinal and Susquehanna gathering & processing
expansions in 4Q 2023
- Acquired 115-Bcf natural gas storage portfolio, positioning
Williams as the largest storage owner on the Gulf Coast as storage
spreads and natural gas volatility continue to expand
- Optimized DJ Basin position with transactions to enhance
natural gas and NGL value chain
- Added more than 8 Bcf/d of transmission capacity and 56 Bcf of
gas storage with MountainWest acquisition in the Rockies serving
western markets
CEO Perspective
Alan Armstrong, president and chief executive officer, made the
following comments:
“Our natural gas-focused strategy delivered excellent financial
results again in 2023 with contracted transmission capacity,
gathering volumes and Adjusted EBITDA surpassing previous highs,
demonstrating our ability to grow despite low natural gas prices.
We expect this strong performance to continue in 2024 and have set
our Adjusted EBITDA guidance midpoint at $6.95 billion, paving the
way for what we anticipate will be a breakout year in 2025 as
several large fee-based projects come online.
"In addition to outstanding financial results in 2023, we
acquired strategic natural gas transmission, gathering and storage
assets in the Rockies and on the Gulf Coast, enhancing our
footprint in key areas and adding highly contracted take-or-pay
transmission and fee-based storage assets to our business. We also
continue to expand our existing infrastructure with 18 high-return
projects in execution, including approximately 3.1 Bcf/d of
expansions on Transco coming online over the next few years. I’m
extremely proud of our teams for their commitment to best-in-class
project execution in what has become a complex and challenging
permitting environment for energy infrastructure of all types."
Armstrong added, “Looking ahead, Williams is excited to provide
additional natural gas solutions to support the reliability of the
U.S. power sector as it faces growing regional demand driven in
large part by the emergence of new, large-scale data centers that
are accelerating throughout our key markets. With the buildout of
electrification and renewables, as well as previously permitted LNG
export growth, Williams will be there to provide additional natural
gas baseload to ensure reliability. Our infrastructure today is
vital to meeting the energy needs of tomorrow. Natural gas is an
immediate and scalable climate solution to reduce global emissions
and serve the growing need for energy security, while creating
long-term value for our shareholders.”
Williams Summary Financial
Information
4Q
Full Year
Amounts in millions, except ratios and
per-share amounts. Per share amounts are reported on a diluted
basis. Net income amounts are from continuing operations
attributable to The Williams Companies, Inc. available to common
stockholders.
2023
2022
2023
2022
GAAP Measures
Net Income
$1,146
$668
$3,273
$2,046
Net Income Per Share
$0.94
$0.55
$2.68
$1.67
Cash Flow From Operations
$1,930
$1,219
$6,055
$4,889
Non-GAAP Measures (1)
Adjusted EBITDA
$1,721
$1,774
$6,779
$6,418
Adjusted Net Income
$588
$653
$2,334
$2,228
Adjusted Earnings Per Share
$0.48
$0.53
$1.91
$1.82
Available Funds from Operations
$1,323
$1,357
$5,213
$4,918
Dividend Coverage Ratio
2.43x
2.62x
2.39x
2.37x
Other
Debt-to-Adjusted EBITDA at Quarter End
(2)
3.58x
3.55x
Capital Investments (Excluding
Acquisitions) (3) (4)
$666
$876
$2,711
$2,147
(1) Schedules reconciling Adjusted Net
Income, Adjusted EBITDA, Available Funds from Operations and
Dividend Coverage Ratio (non-GAAP measures) to the most comparable
GAAP measure are available at www.williams.com and as an attachment
to this news release.
(2) Does not represent leverage ratios
measured for WMB credit agreement compliance or leverage ratios as
calculated by the major credit ratings agencies. Debt is net of
cash on hand, and Adjusted EBITDA reflects the sum of the last four
quarters.
(3) Capital Investments include increases
to property, plant, and equipment (growth & maintenance
capital),purchases of and contributions to equity-method
investments and purchases of other long-term investments.
(4) Fourth-quarter and full-year 2023
capital excludes $544 million for the DJ Basin acquisitions, which
closed in November 2023. Full-year 2023 capital excludes $1.024
billion for the acquisition of MountainWest Pipeline Holding
company, which closed February 14, 2023. Full-year 2022 capital
excludes $424 million for the purchase of NorTex Midstream, which
closed August 31, 2022. Full-year 2022 capital also excludes $933
million for purchase of the Trace Midstream Haynesville gathering
assets, which closed April 29, 2022.
GAAP Measures
Fourth-quarter 2023 net income increased by $478 million
compared to the prior year driven by a $534 million gain related to
the net cash received from the favorable resolution of litigation
with Energy Transfer. The improvement also reflects a favorable
change of $147 million in net unrealized gains/losses on commodity
derivatives and higher service revenues driven by recent
acquisitions and expansion projects. These improvements were
partially offset by lower gas marketing margins reflecting the
absence of favorable severe winter weather impacts in the prior
year, lower results from our upstream business, and higher
depreciation and operating expenses resulting from acquisitions.
The income tax provision increased $114 million primarily due to
higher pretax income.
Full-year 2023 net income increased $1.2 billion compared to the
prior year reflecting a favorable change of $909 million in net
unrealized gains/losses on commodity derivatives, the previously
described $534 million net litigation gain, and higher service
revenues driven by recent acquisitions, expansion projects, and
increased Northeast G&P volumes and rates. The improvement also
included a $129 million gain on the sale of the Bayou Ethane system
in 2023, partially offset by lower results from our upstream
business, and higher depreciation and operating expenses resulting
from acquisitions. The income tax provision increased $580 million
primarily due to higher pretax income and the absence of $134
million benefit associated with the release of valuation allowances
on deferred income tax assets and federal income tax settlements
recorded in the prior year, and a lower benefit associated with
decreases in our estimate of the state deferred income tax rate in
both periods. The 2023 period also reported a loss from
discontinued operations associated with an adverse legal ruling
involving former refinery operations.
Cash flow from operations for the fourth quarter increased
compared to the prior year primarily due to $534 million of net
cash received related to the favorable Energy Transfer litigation
outcome and favorable net changes in working capital. Full-year
cash flow from operations increased compared to the prior year
reflecting similar drivers, as well as favorable changes in
derivative margin requirements partially offset by lower
distributions from certain equity-method investments.
Non-GAAP Measures
Fourth-quarter 2023 Adjusted EBITDA decreased by $53 million
from the prior year, driven by the previously described higher
service revenues, more than offset by lower gas marketing margins,
reduced upstream results and higher operating costs. Full-year 2023
Adjusted EBITDA increased by $361 million over the prior year,
driven by the previously described higher service revenues,
partially offset by reduced upstream results and higher operating
costs.
Fourth-quarter 2023 Adjusted Net Income decreased by $65 million
compared to the prior year, driven by the previously described
impacts to net income, adjusted primarily to remove the net
litigation gain, net unrealized gains/losses on commodity
derivatives, and the related tax effects of these adjustments.
Full-year Adjusted Net Income increased by $106 million over the
prior year driven by the previously described impacts to net income
from continuing operations, adjusted primarily for the litigation
gain, net unrealized gains/losses on commodity derivatives, the
gain on the sale of the Bayou Ethane system, amortization of
certain assets from the Sequent acquisition, and the related tax
effects of these adjustments as well as excluding the impact of the
previously described prior year favorable income tax benefits.
Fourth-quarter 2023 Available Funds From Operations (AFFO)
decreased slightly by $34 million compared to the prior year
primarily due to lower operating results exclusive of noncash
items. Full-year 2023 AFFO increased by $295 million primarily
reflecting higher results from continuing operations exclusive of
non-cash items partially offset by lower distributions from certain
equity method investments.
Business Segment Results & Form 10-K
Williams' operations are comprised of the following reportable
segments: Transmission & Gulf of Mexico, Northeast G&P,
West and Gas & NGL Marketing Services, as well as Other. For
more information, see the company's 2023 Form 10-K.
Fourth Quarter
Full Year
Amounts in millions
Modified EBITDA
Adjusted EBITDA
Modified EBITDA
Adjusted EBITDA
4Q 2023
4Q 2022
Change
4Q 2023
4Q 2022
Change
2023
2022
Change
2023
2022
Change
Transmission & Gulf of Mexico
$741
$687
$54
$752
$700
$52
$3,068
$2,674
$394
$2,982
$2,720
$262
Northeast G&P
477
464
13
485
464
21
1,916
1,796
120
1,955
1,796
159
West
307
326
(19)
323
326
(3)
1,238
1,211
27
1,236
1,219
17
Gas & NGL Marketing Services
272
209
63
69
149
(80)
950
(40)
990
300
258
42
Other
645
150
495
92
135
(43)
841
434
407
306
425
(119)
Total
$2,442
$1,836
$606
$1,721
$1,774
($53)
$8,013
$6,075
$1,938
$6,779
$6,418
$361
Note: Williams uses Modified EBITDA for
its segment reporting. Definitions of Modified EBITDA and Adjusted
EBITDA and schedules reconciling to net income are included in this
news release.
Transmission & Gulf of Mexico
Fourth-quarter 2023 Modified and Adjusted EBITDA improved
compared to the prior year driven by the MountainWest acquisition.
Modified EBITDA for full-year 2023 was further impacted by the gain
on the sale of the Bayou Ethane system, benefits from the NorTex
acquisition and expansion projects, increased benefit of allowance
for equity funds used during construction, and one-time
MountainWest acquisition and transition costs, while 2022 included
a loss related to Eminence storage cavern abandonments and a
regulatory charge associated with Transco’s deferred state income
tax rate. The gain on sale, MountainWest acquisition and transition
costs, Eminence abandonment costs, and Transco’s regulatory charge
are all excluded from Adjusted EBITDA.
Northeast G&P
Fourth-quarter and full-year 2023 Modified and Adjusted EBITDA
improved reflecting increased rates and volumes driven by the Ohio
Valley, Cardinal, and Susquehanna operations. For our joint
ventures, the full-year benefits of higher volumes and rates at
Marcellus South and higher volumes at Blue Racer were more than
offset by lower rates and volumes at Laurel Mountain Midstream and
Bradford compared to the prior year. Modified EBITDA for full-year
2023 also reflects our share of a loss contingency accrual at Aux
Sable which is excluded from Adjusted EBITDA.
West
Fourth-quarter 2023 Modified and Adjusted EBITDA decreased
compared to the prior year primarily reflecting lower NYMEX-based
rates in the Barnett partially offset by benefits from the DJ Basin
Acquisitions. Full-year Modified and Adjusted EBITDA improved
compared to the prior year driven by benefits from the DJ Basin and
Trace Midstream Acquisitions and higher volumes at our Overland
Pass joint venture. Favorable changes in operating and
administrative costs were more than offset by lower processing
margins reflecting a short-term gas price spike at Opal early in
the year and severe weather impacts and lower service revenues
reflecting lower NYMEX-based rates in the Barnett partially offset
by favorable changes in realized gains on natural gas hedges and
higher Haynesville volumes.
Gas & NGL Marketing Services
Fourth-quarter 2023 Modified EBITDA improved from the prior year
primarily reflecting a $142 million net favorable change in
unrealized gains/losses on commodity derivatives partially offset
by lower gas marketing margins reflecting the absence of favorable
severe winter weather impacts in the prior year. Full-year 2023
Modified EBITDA improved from the prior year primarily reflecting a
$933 million net favorable change in unrealized gains/losses on
commodity derivatives and higher commodity marketing margins
reflecting reduced levels of inventory write-downs partially offset
by the previously discussed lower gas marketing margins. The
unrealized gains/losses on commodity derivatives are excluded from
Adjusted EBITDA.
Other
Fourth-quarter and full-year 2023 Modified EBITDA increased
compared to the prior year primarily reflecting the $534 million
gain from the net cash received from the favorable resolution of
our litigation with Energy Transfer, partially offset by lower
results from our upstream business driven by lower prices,
partially offset by higher production volumes. The full-year
comparison also reflects a $24 million unfavorable change in
unrealized gains/losses on commodity derivatives. Adjusted EBITDA
for both comparative periods was lower and excludes the favorable
litigation gain and the effects of changes in unrealized
gains/losses on commodity derivatives.
Financial Guidance
The company expects 2024 Adjusted EBITDA between $6.8 billion
and $7.1 billion. The company also expects 2024 growth capex
between $1.45 billion and $1.75 billion and maintenance capex
between $1.1 billion and $1.3 billion, which includes capital of
$350 million based on midpoint for emissions reduction and
modernization initiatives. For 2025, the company expects Adjusted
EBITDA between $7.2 billion and $7.6 billion with growth capex
between $1.65 billion and $1.95 billion and maintenance capex
between $750 million and $850 million, which includes capital of
$100 million based on midpoint for emissions reduction and
modernization initiatives. Williams anticipates a leverage ratio
midpoint for 2024 of 3.85x and has increased the dividend by 6.1%
on an annualized basis to $1.90 in 2024 from $1.79 in 2023.
Williams 2024 Analyst Day Scheduled for Today, Materials to
be Posted Shortly
Williams is hosting its 2024 Analyst Day event this morning,
beginning at 8:30 a.m. Eastern Time (7:30 a.m. Central Time). In
addition to discussing 2023 results, Williams' management will give
in-depth presentations covering the company's natural gas
infrastructure strategy designed to meet growing clean energy
demands. These presentations will highlight the company’s efficient
operations, disciplined project execution, strong financial
position and financial guidance. Presentation slides and earnings
materials will be accessible on the Williams’ Investor Relations
website shortly.
Participants who wish to view the live presentation can access
the webcast here: https://wmb.link/73f
A replay of the 2024 Analyst Day webcast will also be available
on the website for at least 90 days following the event.
About Williams
Williams (NYSE: WMB) is a trusted energy industry leader
committed to safely, reliably, and responsibly meeting growing
energy demand. We use our 33,000-mile pipeline infrastructure to
move a third of the nation’s natural gas to where it's needed most,
supplying the energy used to heat our homes, cook our food and
generate low-carbon electricity. For over a century, we’ve been
driven by a passion for doing things the right way. Today, our team
of problem solvers is leading the charge into the clean energy
future – by powering the global economy while delivering immediate
emissions reductions within our natural gas network and investing
in new energy technologies. Learn more at www.williams.com.
The Williams Companies,
Inc.
Consolidated Statement of
Income
(Unaudited)
Year Ended December
31,
2023
2022
2021
(Millions, except per-share
amounts)
Revenues:
Service revenues
$
7,026
$
6,536
$
6,001
Service revenues – commodity
consideration
146
260
238
Product sales
2,779
4,556
4,536
Net gain (loss) from commodity
derivatives
956
(387
)
(148
)
Total revenues
10,907
10,965
10,627
Costs and expenses:
Product costs
1,884
3,369
3,931
Net processing commodity expenses
151
88
101
Operating and maintenance expenses
1,984
1,817
1,548
Depreciation and amortization expenses
2,071
2,009
1,842
Selling, general, and administrative
expenses
665
636
558
Gain on sale of business
(129
)
—
—
Other (income) expense – net
(30
)
28
16
Total costs and expenses
6,596
7,947
7,996
Operating income (loss)
4,311
3,018
2,631
Equity earnings (losses)
589
637
608
Other investing income (loss) – net
108
16
7
Interest expense.
(1,236
)
(1,147
)
(1,179
)
Net gain from Energy Transfer litigation
judgment
534
—
—
Other income (expense) – net
99
18
6
Income (loss) before income taxes
4,405
2,542
2,073
Less: Provision (benefit) for income
taxes
1,005
425
511
Income (loss) from continuing
operations
3,400
2,117
1,562
Income (loss) from discontinued
operations
(97
)
—
—
Net income (loss)
3,303
2,117
1,562
Less: Net income (loss) attributable to
noncontrolling interests
124
68
45
Net income (loss) attributable to The
Williams Companies, Inc.
3,179
2,049
1,517
Less: Preferred stock dividends
3
3
3
Net income (loss) available to common
stockholders
$
3,176
$
2,046
$
1,514
Amounts attributable to The Williams
Companies, Inc. available to common stockholders:
Income (loss) from continuing
operations
$
3,273
$
2,046
$
1,514
Income (loss) from discontinued
operations
(97
)
—
—
Net income (loss) available to common
stockholders
$
3,176
$
2,046
$
1,514
Basic earnings (loss) per common
share:
Income (loss) from continuing
operations
$
2.69
$
1.68
$
1.25
Income (loss) from discontinued
operations
(.08
)
—
—
Net income (loss) available to common
stockholders
$
2.61
$
1.68
$
1.25
Weighted-average shares (thousands)
1,217,784
1,218,362
1,215,221
Diluted earnings (loss) per common
share:
Income (loss) from continuing
operations
$
2.68
$
1.67
$
1.24
Income (loss) from discontinued
operations
(.08
)
—
—
Net income (loss) available to common
stockholders
$
2.60
$
1.67
$
1.24
Weighted-average shares (thousands)
1,222,715
1,222,672
1,218,215
The Williams Companies,
Inc.
Consolidated Balance
Sheet
(Unaudited)
December 31,
2023
2022
(Millions, except per-share
amounts)
ASSETS
Current assets:
Cash and cash equivalents
$
2,150
$
152
Trade accounts and other receivables (net
of allowance of $3 at December 31, 2023 and $6 at December 31,
2022)
1,655
2,723
Inventories
274
320
Derivative assets
239
323
Other current assets and deferred
charges
195
279
Total current assets
4,513
3,797
Investments
4,637
5,065
Property, plant, and equipment – net
34,311
30,889
Intangible assets – net of accumulated
amortization
7,593
7,363
Regulatory assets, deferred charges, and
other
1,573
1,319
Total assets
$
52,627
$
48,433
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
1,379
$
2,327
Derivative liabilities
105
316
Accrued and other current liabilities
1,284
1,270
Commercial paper
725
350
Long-term debt due within one year
2,337
627
Total current liabilities
5,830
4,890
Long-term debt
23,376
21,927
Deferred income tax liabilities
3,846
2,887
Regulatory liabilities, deferred income,
and other
4,684
4,684
Contingent liabilities and commitments
Equity:
Stockholders’ equity:
Preferred stock ($1 par value; 30 million
shares authorized at December 31, 2023 and December 31, 2022;
35,000 shares issued at December 31, 2023 and December 31,
2022)
35
35
Common stock ($1 par value; 1,470 million
shares authorized at December 31, 2023 and December 31, 2022; 1,256
million shares issued at December 31, 2023 and 1,253 million shares
issued at December 31, 2022)
1,256
1,253
Capital in excess of par value
24,578
24,542
Retained deficit
(12,287
)
(13,271
)
Accumulated other comprehensive income
(loss)
—
(24
)
Treasury stock, at cost (39 million shares
at December 31, 2023 and 35 million shares at December 31, 2022 of
common stock)
(1,180
)
(1,050
)
Total stockholders’ equity
12,402
11,485
Noncontrolling interests in consolidated
subsidiaries
2,489
2,560
Total equity
14,891
14,045
Total liabilities and equity
$
52,627
$
48,433
The Williams Companies,
Inc.
Consolidated Statement of Cash
Flows
(Unaudited)
Year Ended December
31,
2023
2022
2021
(Millions)
OPERATING ACTIVITIES:
Net income (loss)
$
3,303
$
2,117
$
1,562
Adjustments to reconcile to net cash
provided (used) by operating activities:
Depreciation and amortization
2,071
2,009
1,842
Provision (benefit) for deferred income
taxes
951
431
509
Equity (earnings) losses
(589
)
(637
)
(608
)
Distributions from equity-method
investees
796
865
757
Net unrealized (gain) loss from commodity
derivative instruments
(660
)
249
109
Gain on sale of business
(129
)
—
—
Inventory write-downs
30
161
15
Amortization of stock-based awards
77
73
81
Cash provided (used) by changes in current
assets and liabilities:
Accounts receivable
1,089
(733
)
(545
)
Inventories
13
(110
)
(139
)
Other current assets and deferred
charges
60
(33
)
(63
)
Accounts payable
(892
)
410
643
Accrued and other current liabilities
(19
)
209
58
Changes in current and noncurrent
commodity derivative assets and
200
94
(277
)
Other, including changes in noncurrent
assets and liabilities
(246
)
(216
)
1
Net cash provided (used) by operating
activities
6,055
4,889
3,945
FINANCING ACTIVITIES:
Proceeds from (payments of) commercial
paper – net
372
345
—
Proceeds from long-term debt
2,755
1,755
2,155
Payments of long-term debt
(634
)
(2,876
)
(894
)
Proceeds from issuance of common stock
6
54
9
Purchases of treasury stock
(130
)
(9
)
—
Common dividends paid
(2,179
)
(2,071
)
(1,992
)
Dividends and distributions paid to
noncontrolling interests
(213
)
(204
)
(187
)
Contributions from noncontrolling
interests
18
18
9
Payments for debt issuance costs
(23
)
(17
)
(26
)
Other – net
(21
)
(37
)
(16
)
Net cash provided (used) by financing
activities
(49
)
(3,042
)
(942
)
INVESTING ACTIVITIES:
Property, plant, and equipment:
Capital expenditures (1)
(2,633
)
(2,253
)
(1,239
)
Dispositions - net
(51
)
(30
)
(8
)
Proceeds from sale of business
346
—
—
Purchases of businesses, net of cash
acquired
(1,568
)
(933
)
(151
)
Purchases of and contributions to
equity-method investments
(141
)
(166
)
(115
)
Other – net
39
7
48
Net cash provided (used) by investing
activities
(4,008
)
(3,375
)
(1,465
)
Increase (decrease) in cash and cash
equivalents
1,998
(1,528
)
1,538
Cash and cash equivalents at beginning of
year
152
1,680
142
Cash and cash equivalents at end of
year
$
2,150
$
152
$
1,680
_________
(1) Increases to property, plant, and
equipment.
$
(2,564
)
$
(2,394
)
$
(1,305
)
Changes in related accounts payable and
accrued liabilities
(69
)
141
66
Capital expenditures
$
(2,633
)
$
(2,253
)
$
(1,239
)
Transmission & Gulf of
Mexico
(UNAUDITED)
2022
2023
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
Regulated interstate natural gas
transportation, storage, and other revenues (1)
$
730
$
717
$
734
$
758
$
2,939
$
774
$
786
$
794
$
822
$
3,176
Gathering, processing, storage and
transportation revenues
82
84
99
100
365
100
104
114
100
418
Other fee revenues (1)
5
5
4
7
21
6
8
5
4
23
Commodity margins
15
11
10
7
43
10
8
7
8
33
Net unrealized gain (loss) from derivative
instruments
—
—
1
(1
)
—
—
—
—
—
—
Operating and administrative costs (1)
(202
)
(227
)
(238
)
(239
)
(906
)
(254
)
(254
)
(257
)
(270
)
(1,035
)
Other segment income (expenses) - net
(1)
19
17
(22
)
5
19
26
31
36
26
119
Gain on sale of business
—
—
—
—
—
—
—
130
(1
)
129
Proportional Modified EBITDA of
equity-method investments
48
45
50
50
193
53
48
52
52
205
Modified EBITDA
697
652
638
687
2,674
715
731
881
741
3,068
Adjustments
—
—
33
13
46
13
17
(127
)
11
(86
)
Adjusted EBITDA
$
697
$
652
$
671
$
700
$
2,720
$
728
$
748
$
754
$
752
$
2,982
Statistics for Operated Assets
Natural Gas Transmission (2)
Transcontinental Gas Pipe Line
Avg. daily transportation volumes
(MMdth)
15.0
13.5
14.7
14.2
14.4
14.3
13.2
14.0
14.0
13.9
Avg. daily firm reserved capacity
(MMdth)
19.3
19.1
19.2
19.3
19.2
19.5
19.4
19.4
19.3
19.4
Northwest Pipeline LLC
Avg. daily transportation volumes
(MMdth)
2.8
2.1
2.0
2.9
2.5
3.1
2.3
2.3
2.8
2.6
Avg. daily firm reserved capacity
(MMdth)
3.8
3.8
3.8
3.8
3.8
3.8
3.8
3.8
3.8
3.8
MountainWest (3)
Avg. daily transportation volumes
(MMdth)
—
—
—
—
—
4.2
3.2
3.8
4.2
3.9
Avg. daily firm reserved capacity
(MMdth)
—
—
—
—
—
7.8
7.5
7.5
7.9
7.7
Gulfstream - Non-consolidated
Avg. daily transportation volumes
(MMdth)
0.9
1.3
1.4
1.1
1.3
1.0
1.2
1.4
1.1
1.2
Avg. daily firm reserved capacity
(MMdth)
1.3
1.3
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
Gathering, Processing, and Crude Oil
Transportation
Consolidated (4)
Gathering volumes (Bcf/d)
0.30
0.28
0.29
0.28
0.29
0.28
0.23
0.27
0.27
0.26
Plant inlet natural gas volumes
(Bcf/d)
0.48
0.46
0.49
0.46
0.47
0.43
0.40
0.46
0.46
0.44
NGL production (Mbbls/d)
31
31
26
26
28
28
24
28
26
27
NGL equity sales (Mbbls/d)
7
7
4
5
6
7
5
6
5
6
Crude oil transportation volumes
(Mbbls/d)
110
124
125
118
119
119
111
134
130
123
Non-consolidated (5)
Gathering volumes (Bcf/d)
0.39
0.37
0.41
0.42
0.40
0.36
0.30
0.36
0.33
0.34
Plant inlet natural gas volumes
(Bcf/d)
0.38
0.37
0.41
0.42
0.40
0.36
0.30
0.36
0.33
0.34
NGL production (Mbbls/d)
28
26
29
29
28
28
21
30
28
27
NGL equity sales (Mbbls/d)
8
6
7
10
8
8
3
8
7
7
(1) Excludes certain amounts associated
with revenues and operating costs for tracked or reimbursable
charges.
(2) Tbtu converted to MMdth at one
trillion British thermal units = one million dekatherms.
(3) Includes 100% of the volumes
associated with the MountainWest Acquisition transmission assets
after the purchase on February 14, 2023, including 100% of the
volumes associated with the operated equity-method investment White
River Hub, LLC. Average volumes were calculated over the period
owned.
(4) Excludes volumes associated with
equity-method investments that are not consolidated in our
results.
(5) Includes 100% of the volumes
associated with operated equity-method investments, including
Discovery Producer Services.
Northeast G&P
(UNAUDITED)
2022
2023
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
Gathering, processing, transportation, and
fractionation revenues
$
323
$
350
$
354
$
368
$
1,395
$
391
$
431
$
417
$
411
$
1,650
Other fee revenues (1)
27
27
27
46
127
32
27
27
28
114
Commodity margins
6
1
3
—
10
5
(1
)
7
1
12
Operating and administrative costs (1)
(85
)
(102
)
(101
)
(97
)
(385
)
(101
)
(101
)
(115
)
(107
)
(424
)
Other segment income (expenses) - net
(3
)
—
(1
)
(1
)
(5
)
—
—
(1
)
(9
)
(10
)
Proportional Modified EBITDA of
equity-method investments
150
174
182
148
654
143
159
119
153
574
Modified EBITDA
418
450
464
464
1,796
470
515
454
477
1,916
Adjustments
—
—
—
—
—
—
—
31
8
39
Adjusted EBITDA
$
418
$
450
$
464
$
464
$
1,796
$
470
$
515
$
485
$
485
$
1,955
Statistics for Operated Assets
Gathering and Processing
Consolidated (2)
Gathering volumes (Bcf/d)
4.03
4.19
4.22
4.31
4.19
4.42
4.61
4.41
4.37
4.45
Plant inlet natural gas volumes
(Bcf/d)
1.46
1.70
1.74
1.70
1.65
1.92
1.79
1.93
1.93
1.89
NGL production (Mbbls/d)
110
118
125
127
120
144
135
144
133
139
NGL equity sales (Mbbls/d)
2
1
1
1
1
1
1
—
1
1
Non-consolidated (3)
Gathering volumes (Bcf/d)
6.62
6.76
6.58
6.48
6.61
6.97
7.03
6.83
6.85
6.92
Plant inlet natural gas volumes
(Bcf/d)
0.66
0.76
0.66
0.77
0.71
0.77
0.93
0.99
1.01
0.93
NGL production (Mbbls/d)
50
53
45
56
51
54
64
71
69
65
NGL equity sales (Mbbls/d)
4
3
2
2
3
4
5
4
4
4
(1) Excludes certain amounts associated
with revenues and operating costs for reimbursable charges.
(2) Includes volumes associated with
Susquehanna Supply Hub, the Northeast JV, and Utica Supply Hub, all
of which are consolidated.
(3) Includes 100% of the volumes
associated with operated equity-method investments, including the
Laurel Mountain Midstream partnership and Blue Racer Midstream
which we operate effective January 1, 2024; and the Bradford Supply
Hub and the Marcellus South Supply Hub within the Appalachia
Midstream Services partnership.
West
(UNAUDITED)
2022
2023
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
Net gathering, processing, transportation,
storage, and fractionation revenues
$
317
$
360
$
397
$
401
$
1,475
$
382
$
373
$
371
$
397
$
1,523
Other fee revenues (1)
6
6
6
5
23
5
7
4
8
24
Commodity margins
23
25
27
27
102
(24
)
18
21
19
34
Operating and administrative costs (1)
(112
)
(133
)
(128
)
(133
)
(506
)
(115
)
(122
)
(122
)
(144
)
(503
)
Other segment income (expenses) - net
(1
)
(1
)
(6
)
(7
)
(15
)
23
(7
)
(4
)
(14
)
(2
)
Proportional Modified EBITDA of
equity-method investments
27
31
41
33
132
33
43
45
41
162
Modified EBITDA
260
288
337
326
1,211
304
312
315
307
1,238
Adjustments
—
8
—
—
8
(18
)
—
—
16
(2
)
Adjusted EBITDA
$
260
$
296
$
337
$
326
$
1,219
$
286
$
312
$
315
$
323
$
1,236
Statistics for Operated Assets
Gathering and Processing
Consolidated (2) (4)
Gathering volumes (Bcf/d) (3)
3.47
5.14
5.20
5.50
5.19
5.47
5.51
5.60
6.03
6.02
Plant inlet natural gas volumes
(Bcf/d)
1.13
1.14
1.21
1.10
1.15
0.92
1.06
1.12
1.63
1.54
NGL production (Mbbls/d)
47
49
45
32
43
25
40
61
99
91
NGL equity sales (Mbbls/d)
17
18
13
7
14
6
16
22
14
14
Non-consolidated (5)
Gathering volumes (Bcf/d)
0.28
0.28
0.29
0.29
0.29
0.32
0.33
0.33
—
—
Plant inlet natural gas volumes
(Bcf/d)
0.27
0.28
0.29
0.29
0.28
0.32
0.32
0.32
—
—
NGL production (Mbbls/d)
31
32
34
32
33
37
38
38
—
—
NGL and Crude Oil Transportation volumes
(Mbbls/d) (6)
132
162
189
151
158
161
217
244
250
218
(1) Excludes certain amounts associated
with revenues and operating costs for reimbursable charges.
(2) Excludes volumes associated with
equity-method investments that are not consolidated in our
results.
(3) Includes 100% of the volumes
associated with the Trace Acquisition gathering assets after the
purchase on April 29, 2022 and the Cureton Acquisition gathering
assets after the purchase on November 30, 2023. Average volumes
were calculated over the period owned.
(4) Volumes associated with the RMM assets
for 4th Qtr 2023 and Year 2023 are presented entirely in the
Consolidated section. We acquired the remaining 50 percent of RMM
on November 30, 2023.
(5) Includes 100% of the volumes
associated with operated equity-method investment Rocky Mountain
Midstream through 3rd Qtr 2023.
(6) Includes 100% of the volumes
associated with Overland Pass Pipeline Company (and operated
equity-method investment), Rocky Mountain Midstream (see Note 4
above) as well as volumes for our consolidated Bluestem
pipeline.
Gas & NGL Marketing
Services
(UNAUDITED)
2022
2023
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
Commodity margins
$
100
$
23
$
39
$
161
$
323
$
265
$
(2
)
$
38
$
88
$
389
Other fee revenues
1
—
1
1
3
1
—
—
—
1
Net unrealized gain (loss) from derivative
instruments
(57
)
(288
)
5
66
(274
)
333
94
24
208
659
Operating and administrative costs
(31
)
(23
)
(24
)
(18
)
(96
)
(32
)
(24
)
(19
)
(24
)
(99
)
Other segment income (expenses) - net
—
6
(1
)
(1
)
4
—
—
—
—
—
Modified EBITDA
13
(282
)
20
209
(40
)
567
68
43
272
950
Adjustments
52
288
18
(60
)
298
(336
)
(84
)
(27
)
(203
)
(650
)
Adjusted EBITDA
$
65
$
6
$
38
$
149
$
258
$
231
$
(16
)
$
16
$
69
$
300
Statistics
Product Sales Volumes
Natural Gas (Bcf/d)
7.96
6.66
7.11
7.05
7.20
7.24
6.56
7.31
7.11
7.05
NGLs (Mbbls/d)
246
234
267
254
250
234
239
245
173
223
Other
(UNAUDITED)
2022
2023
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
Service revenues
$
9
$
7
$
6
$
2
$
24
$
3
$
5
$
4
$
4
$
16
Net realized product sales
96
142
180
184
602
120
97
127
145
489
Net unrealized gain (loss) from derivative
instruments
(66
)
47
29
15
25
(6
)
(11
)
(1
)
19
1
Operating and administrative costs
(33
)
(57
)
(62
)
(59
)
(211
)
(48
)
(54
)
(58
)
(65
)
(225
)
Other segment income (expenses) - net
(1
)
—
(13
)
8
(6
)
5
5
10
8
28
Net gain from Energy Transfer litigation
judgment
—
—
—
—
—
—
—
—
534
534
Proportional Modified EBITDA of
equity-method investments
—
—
—
—
—
—
(1
)
(1
)
—
(2
)
Modified EBITDA
5
139
140
150
434
74
41
81
645
841
Adjustments
66
(47
)
(13
)
(15
)
(9
)
6
11
1
(553
)
(535
)
Adjusted EBITDA
$
71
$
92
$
127
$
135
$
425
$
80
$
52
$
82
$
92
$
306
Statistics
Net Product Sales Volumes
Natural Gas (Bcf/d)
0.12
0.19
0.27
0.31
0.22
0.26
0.29
0.31
0.30
0.29
NGLs (Mbbls/d)
7
7
8
7
7
3
6
9
10
7
Crude Oil (Mbbls/d)
2
3
2
2
2
1
3
5
7
4
Capital Expenditures and
Investments
(UNAUDITED)
2022
2023
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
Capital expenditures:
Transmission & Gulf of Mexico
$
125
$
129
$
637
$
358
$
1,249
$
205
$
263
$
382
$
521
$
1,371
Northeast G&P
40
30
52
92
214
99
74
115
71
359
West
61
82
94
226
463
169
197
141
121
628
Other
65
74
58
130
327
72
76
52
75
275
Total (1)
$
291
$
315
$
841
$
806
$
2,253
$
545
$
610
$
690
$
788
$
2,633
Purchases of and contributions to
equity-method investments:
Transmission & Gulf of Mexico
$
16
$
26
$
11
$
17
$
70
$
8
$
18
$
6
$
9
$
41
Northeast G&P
32
18
28
8
86
31
12
4
52
99
West
—
—
—
—
—
—
—
1
—
1
Other
8
—
1
1
10
—
—
—
—
—
Total
$
56
$
44
$
40
$
26
$
166
$
39
$
30
$
11
$
61
$
141
Summary:
Transmission & Gulf of Mexico
$
141
$
155
$
648
$
375
$
1,319
$
213
$
281
$
388
$
530
$
1,412
Northeast G&P
72
48
80
100
300
130
86
119
123
458
West
61
82
94
226
463
169
197
142
121
629
Other
73
74
59
131
337
72
76
52
75
275
Total
$
347
$
359
$
881
$
832
$
2,419
$
584
$
640
$
701
$
849
$
2,774
Capital investments:
Increases to property, plant, and
equipment
$
260
$
382
$
907
$
845
$
2,394
$
484
$
684
$
792
$
604
$
2,564
Purchases of businesses, net of cash
acquired
—
933
—
—
933
1,056
(3
)
(29
)
544
1,568
Purchases of and contributions to
equity-method investments
56
44
40
26
166
39
30
11
61
141
Purchases of other long-term
investments
—
3
3
5
11
2
1
2
1
6
Total
$
316
$
1,362
$
950
$
876
$
3,504
$
1,581
$
712
$
776
$
1,210
$
4,279
(1) Increases to property, plant, and
equipment
$
260
$
382
$
907
$
845
$
2,394
$
484
$
684
$
792
$
604
$
2,564
Changes in related accounts payable and
accrued liabilities
31
(67
)
(66
)
(39
)
(141
)
61
(74
)
(102
)
184
69
Capital expenditures
$
291
$
315
$
841
$
806
$
2,253
$
545
$
610
$
690
$
788
$
2,633
Contributions from noncontrolling
interests
$
3
$
5
$
7
$
3
$
18
$
3
$
15
$
—
$
—
$
18
Contributions in aid of construction
$
(3
)
$
9
$
2
$
4
$
12
$
11
$
7
$
2
$
8
$
28
Proceeds from sale of business
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
348
$
(2
)
$
346
Proceeds from disposition of equity-method
investments
$
—
$
—
$
7
$
—
$
7
$
—
$
—
$
—
$
—
$
—
Non-GAAP Measures
This news release and accompanying materials may include certain
financial measures – adjusted EBITDA, adjusted income (“earnings”),
adjusted earnings per share, available funds from operations and
dividend coverage ratio – that are non-GAAP financial measures as
defined under the rules of the SEC.
Our segment performance measure, modified EBITDA, is defined as
net income (loss) before income (loss) from discontinued
operations, income tax expense, net interest expense, equity
earnings from equity-method investments, other net investing
income, impairments of equity investments and goodwill,
depreciation and amortization expense, and accretion expense
associated with asset retirement obligations for nonregulated
operations. We also add our proportional ownership share (based on
ownership interest) of modified EBITDA of equity-method
investments.
Adjusted EBITDA further excludes items of income or loss that we
characterize as unrepresentative of our ongoing operations. Such
items are excluded from net income to determine adjusted income and
adjusted earnings per share. Management believes this measure
provides investors meaningful insight into results from ongoing
operations.
Available funds from operations (AFFO) is defined as cash flow
from operations excluding the effect of changes in working capital
and certain other changes in noncurrent assets and liabilities,
reduced by preferred dividends and net distributions to
noncontrolling interests. AFFO may be adjusted to exclude certain
items that we characterize as unrepresentative of our ongoing
operations.
This news release is accompanied by a reconciliation of these
non-GAAP financial measures to their nearest GAAP financial
measures. Management uses these financial measures because they are
accepted financial indicators used by investors to compare company
performance. In addition, management believes that these measures
provide investors an enhanced perspective of the operating
performance of assets and the cash that the business is
generating.
Neither adjusted EBITDA, adjusted income, nor available funds
from operations are intended to represent cash flows for the
period, nor are they presented as an alternative to net income or
cash flow from operations. They should not be considered in
isolation or as substitutes for a measure of performance prepared
in accordance with United States generally accepted accounting
principles.
Reconciliation of Income (Loss) from
Continuing Operations Attributable to The Williams Companies, Inc.
to Non-GAAP Adjusted Income
(UNAUDITED)
2022
2023
(Dollars in millions, except per-share
amounts)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
Income (loss) from continuing
operations attributable to The Williams Companies, Inc. available
to common stockholders
$
379
$
400
$
599
$
668
$
2,046
$
926
$
547
$
654
$
1,146
$
3,273
Income (loss) from continuing
operations - diluted earnings (loss) per common share (1)
$
.31
$
.33
$
.49
$
.55
$
1.67
$
.76
$
.45
$
.54
$
.94
$
2.68
Adjustments:
Transmission &
Gulf of Mexico
Loss related to Eminence storage cavern
abandonments and monitoring
$
—
$
—
$
19
$
12
$
31
$
—
$
—
$
—
$
—
$
—
Regulatory liability charges associated
with decrease in Transco’s estimated deferred state income tax
rate
—
—
15
—
15
—
—
—
—
—
Net unrealized (gain) loss from derivative
instruments
—
—
(1
)
1
—
—
—
—
—
—
MountainWest acquisition and
transition-related costs
—
—
—
—
—
13
17
3
9
42
Gulf Coast Storage acquisition and
transition-related costs
—
—
—
—
—
—
—
—
1
1
Gain on sale of business
—
—
—
—
—
—
—
(130
)
1
(129
)
Total Transmission & Gulf of Mexico
adjustments
—
—
33
13
46
13
17
(127
)
11
(86
)
Northeast
G&P
Accrual for loss contingency
—
—
—
—
—
—
—
—
10
10
Our share of accrual for loss contingency
at Aux Sable Liquid Products LP
—
—
—
—
—
—
—
31
(2
)
29
Total Northeast G&P adjustments
—
—
—
—
—
—
—
31
8
39
West
Trace acquisition costs
—
8
—
—
8
—
—
—
—
—
Cureton acquisition and transition-related
costs
—
—
—
—
—
—
—
—
6
6
Gain from contract settlement
—
—
—
—
—
(18
)
—
—
—
(18
)
Impairment of assets held for sale
—
—
—
—
—
—
—
—
10
10
Total West adjustments
—
8
—
—
8
(18
)
—
—
16
(2
)
Gas & NGL
Marketing Services
Amortization of purchase accounting
inventory fair value adjustment
15
—
—
—
15
—
—
—
—
—
Impact of volatility on NGL linefill
transactions
(20
)
—
23
6
9
(3
)
10
(3
)
5
9
Net unrealized (gain) loss from derivative
instruments
57
288
(5
)
(66
)
274
(333
)
(94
)
(24
)
(208
)
(659
)
Total Gas & NGL Marketing Services
adjustments
52
288
18
(60
)
298
(336
)
(84
)
(27
)
(203
)
(650
)
Other
Regulatory liability charge associated
with decrease in Transco’s estimated deferred state income tax
rate
—
—
5
—
5
—
—
—
—
—
Net unrealized (gain) loss from derivative
instruments
66
(47
)
(29
)
(15
)
(25
)
6
11
1
(19
)
(1
)
Net gain from Energy Transfer litigation
judgment
—
—
—
—
—
—
—
—
(534
)
(534
)
Accrual for loss contingency
—
—
11
—
11
—
—
—
—
—
Total Other adjustments
66
(47
)
(13
)
(15
)
(9
)
6
11
1
(553
)
(535
)
Adjustments included in Modified
EBITDA
118
249
38
(62
)
343
(335
)
(56
)
(122
)
(721
)
(1,234
)
Adjustments below
Modified EBITDA
Gain on remeasurement of RMM
investment
—
—
—
—
—
—
—
—
(30
)
(30
)
Amortization of intangible assets from
Sequent acquisition
42
41
42
42
167
15
14
15
15
59
Depreciation adjustment related to
Eminence storage cavern abandonments
—
—
(1
)
—
(1
)
—
—
—
—
—
42
41
41
42
166
15
14
15
(15
)
29
Total adjustments
160
290
79
(20
)
509
(320
)
(42
)
(107
)
(736
)
(1,205
)
Less tax effect for above items
(40
)
(72
)
(17
)
5
(124
)
78
10
25
178
291
Adjustments for tax-related items (2)
—
(134
)
(69
)
—
(203
)
—
—
(25
)
—
(25
)
Adjusted income from continuing
operations available to common stockholders
$
499
$
484
$
592
$
653
$
2,228
$
684
$
515
$
547
$
588
$
2,334
Adjusted income from continuing
operations - diluted earnings per common share (1)
$
.41
$
.40
$
.48
$
.53
$
1.82
$
.56
$
.42
$
.45
$
.48
$
1.91
Weighted-average shares - diluted
(thousands)
1,221,279
1,222,694
1,222,472
1,224,212
1,222,672
1,225,781
1,219,915
1,220,073
1,221,894
1,221,616
(1) The sum of earnings per share for the
quarters may not equal the total earnings per share for the year
due to changes in the weighted-average number of common shares
outstanding.
(2) The second quarter of 2022 includes
adjustments for the reversal of valuation allowance due to the
expected utilization of certain deferred income tax assets and
previously unrecognized tax benefits from the resolution of certain
federal income tax audits. The third quarter of 2022 includes an
unfavorable adjustment to reverse the net benefit primarily
associated with a significant decrease in our estimated deferred
state income tax rate, partially offset by an unfavorable revision
to a state net operating loss carryforward. The third quarter of
2023 includes an adjustment associated with a further decrease in
our estimated deferred state income tax rate.
Reconciliation of "Net Income (Loss)"
to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA”
(UNAUDITED)
2022
2023
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
Net income (loss)
$
392
$
407
$
621
$
697
$
2,117
$
957
$
494
$
684
$
1,168
$
3,303
Provision (benefit) for income taxes
118
(45
)
96
256
425
284
175
176
370
1,005
Interest expense
286
281
291
289
1,147
294
306
314
322
1,236
Equity (earnings) losses
(136
)
(163
)
(193
)
(145
)
(637
)
(147
)
(160
)
(127
)
(155
)
(589
)
Other investing (income) loss - net
(1
)
(2
)
(1
)
(12
)
(16
)
(8
)
(13
)
(24
)
(63
)
(108
)
Proportional Modified EBITDA of
equity-method investments
225
250
273
231
979
229
249
215
246
939
Depreciation and amortization expenses
498
506
500
505
2,009
506
515
521
529
2,071
Accretion expense associated with asset
retirement obligations for nonregulated operations
11
13
12
15
51
15
14
14
16
59
(Income) loss from discontinued
operations, net of tax
—
—
—
—
—
—
87
1
9
97
Modified EBITDA
$
1,393
$
1,247
$
1,599
$
1,836
$
6,075
$
2,130
$
1,667
$
1,774
$
2,442
$
8,013
Transmission & Gulf of Mexico
$
697
$
652
$
638
$
687
$
2,674
$
715
$
731
$
881
$
741
$
3,068
Northeast G&P
418
450
464
464
1,796
470
515
454
477
1,916
West
260
288
337
326
1,211
304
312
315
307
1,238
Gas & NGL Marketing Services
13
(282
)
20
209
(40
)
567
68
43
272
950
Other
5
139
140
150
434
74
41
81
645
841
Total Modified EBITDA
$
1,393
$
1,247
$
1,599
$
1,836
$
6,075
$
2,130
$
1,667
$
1,774
$
2,442
$
8,013
Adjustments (1):
Transmission & Gulf of Mexico
$
—
$
—
$
33
$
13
$
46
$
13
$
17
$
(127
)
$
11
$
(86
)
Northeast G&P
—
—
—
—
—
—
—
31
8
39
West
—
8
—
—
8
(18
)
—
—
16
(2
)
Gas & NGL Marketing Services
52
288
18
(60
)
298
(336
)
(84
)
(27
)
(203
)
(650
)
Other
66
(47
)
(13
)
(15
)
(9
)
6
11
1
(553
)
(535
)
Total Adjustments
$
118
$
249
$
38
$
(62
)
$
343
$
(335
)
$
(56
)
$
(122
)
$
(721
)
$
(1,234
)
Adjusted EBITDA:
Transmission & Gulf of Mexico
$
697
$
652
$
671
$
700
$
2,720
$
728
$
748
$
754
$
752
$
2,982
Northeast G&P
418
450
464
464
1,796
470
515
485
485
1,955
West
260
296
337
326
1,219
286
312
315
323
1,236
Gas & NGL Marketing Services
65
6
38
149
258
231
(16
)
16
69
300
Other
71
92
127
135
425
80
52
82
92
306
Total Adjusted EBITDA
$
1,511
$
1,496
$
1,637
$
1,774
$
6,418
$
1,795
$
1,611
$
1,652
$
1,721
$
6,779
(1) Adjustments by segment are detailed in
the "Reconciliation of Income (Loss) from Continuing Operations
Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted
Income," which is also included in these materials.
Reconciliation of Cash Flow from
Operating Activities to Non-GAAP Available Funds from Operations
(AFFO)
(UNAUDITED)
2022
2023
(Dollars in millions, except coverage
ratios)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
Net cash provided (used) by operating
activities
$
1,082
$
1,098
$
1,490
$
1,219
$
4,889
$
1,514
$
1,377
$
1,234
$
1,930
$
6,055
Exclude: Cash (provided) used by changes
in:
Accounts receivable
3
794
(125
)
61
733
(1,269
)
(154
)
128
206
(1,089
)
Inventories, including write-downs
(178
)
177
77
(127
)
(51
)
(45
)
(19
)
7
14
(43
)
Other current assets and deferred
charges
65
(50
)
47
(29
)
33
4
(28
)
29
(65
)
(60
)
Accounts payable
138
(828
)
(53
)
333
(410
)
1,017
203
(148
)
(180
)
892
Accrued and other current liabilities
149
(125
)
(191
)
(42
)
(209
)
318
(246
)
42
(95
)
19
Changes in current and noncurrent
commodity derivative assets and liabilities
(101
)
52
(37
)
(8
)
(94
)
(82
)
(37
)
(53
)
(28
)
(200
)
Other, including changes in noncurrent
assets and liabilities
67
65
73
11
216
40
47
53
106
246
Preferred dividends paid
(1
)
—
(1
)
(1
)
(3
)
(1
)
—
(1
)
(1
)
(3
)
Dividends and distributions paid to
noncontrolling interests
(37
)
(58
)
(46
)
(63
)
(204
)
(54
)
(58
)
(62
)
(39
)
(213
)
Contributions from noncontrolling
interests
3
5
7
3
18
3
15
—
—
18
Adjustment to exclude litigation-related
charges in discontinued operations
—
—
—
—
—
—
115
1
9
125
Adjustment to exclude net gain from Energy
Transfer litigation judgment
—
—
—
—
—
—
—
—
(534
)
(534
)
Available funds from operations
$
1,190
$
1,130
$
1,241
$
1,357
$
4,918
$
1,445
$
1,215
$
1,230
$
1,323
$
5,213
Common dividends paid
$
518
$
517
$
518
$
518
$
2,071
$
546
$
545
$
544
$
544
$
2,179
Coverage ratio:
Available funds from operations divided by
Common dividends paid
2.30
2.19
2.40
2.62
2.37
2.65
2.23
2.26
2.43
2.39
Reconciliation of Net Income (Loss)
from Continuing Operations to Modified EBITDA, Non-GAAP Adjusted
EBITDA and Cash Flow from Operating Activities to Non-GAAP
Available Funds from Operations (AFFO)
2024 Guidance
2025 Guidance
(Dollars in millions, except per-share
amounts and coverage ratio)
Low
Mid
High
Low
Mid
High
Net income (loss) from continuing
operations
$
2,094
$
2,219
$
2,344
$
2,373
$
2,523
$
2,673
Provision (benefit) for income taxes
670
695
720
735
785
835
Interest expense
1,380
1,390
Equity (earnings) losses
(535
)
(610
)
Proportional Modified EBITDA of
equity-method investments
895
990
Depreciation and amortization expenses and
accretion for asset retirement obligations associated with
nonregulated operations
2,270
2,325
Other
(6
)
(8
)
Modified EBITDA
$
6,768
$
6,918
$
7,068
$
7,195
$
7,395
$
7,595
EBITDA Adjustments
32
5
Adjusted EBITDA
$
6,800
$
6,950
$
7,100
$
7,200
$
7,400
$
7,600
Net income (loss) from continuing
operations
$
2,094
$
2,219
$
2,344
$
2,373
$
2,523
$
2,673
Less: Net income (loss) attributable to
noncontrolling interests and preferred dividends
115
115
Net income (loss) from continuing
operations attributable to The Williams Companies, Inc. available
to common stockholders
$
1,979
$
2,104
$
2,229
$
2,258
$
2,408
$
2,558
Adjustments:
Adjustments included in Modified EBITDA
(1)
32
5
Adjustments below Modified EBITDA (2)
29
18
Allocation of adjustments to
noncontrolling interests
—
—
Total adjustments
61
23
Less tax effect for above items
(15
)
(6
)
Adjusted income from continuing operations
available to common stockholders
$
2,025
$
2,150
$
2,275
$
2,275
$
2,425
$
2,575
Adjusted income from continuing
operations - diluted earnings per common share
$
1.65
$
1.76
$
1.86
$
1.85
$
1.97
$
2.10
Weighted-average shares - diluted
(millions)
1,224
1,228
Available Funds
from Operations (AFFO):
Net cash provided by operating activities
(net of changes in working capital, changes in current and
noncurrent derivative assets and liabilities, and changes in other,
including changes in noncurrent assets and liabilities)
$
5,125
$
5,250
$
5,375
$
5,295
$
5,445
$
5,595
Preferred dividends paid
(3
)
(3
)
Dividends and distributions paid to
noncontrolling interests
(215
)
(235
)
Contributions from noncontrolling
interests
18
18
Available funds from operations
(AFFO)
$
4,925
$
5,050
$
5,175
$
5,075
$
5,225
$
5,375
AFFO per common share
$
4.02
$
4.13
$
4.23
$
4.13
$
4.25
$
4.38
Common dividends paid
$
2,320
5%-7% Dividend growth
Coverage Ratio (AFFO/Common dividends
paid)
2.12x
2.18x
2.23x
~2.12x
(1) Adjustments reflect transaction and
transition costs of acquisitions
(2) Adjustments reflect amortization of
intangible assets from Sequent acquisition
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, outcomes of regulatory proceedings,
market conditions, and other matters. We make these forward-looking
statements in reliance on the safe harbor protections provided
under the Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical facts,
included in this report that address activities, events, or
developments that we expect, believe, or anticipate will exist or
may occur in the future, are forward-looking statements.
Forward-looking statements can be identified by various forms of
words such as “anticipates,” “believes,” “seeks,” “could,” “may,”
“should,” “continues,” “estimates,” “expects,” “forecasts,”
“intends,” “might,” “goals,” “objectives,” “targets,” “planned,”
“potential,” “projects,” “scheduled,” “will,” “assumes,”
“guidance,” “outlook,” “in-service date,” or other similar
expressions. These forward-looking statements are based on
management’s beliefs and assumptions and on information currently
available to management and include, among others, statements
regarding:
- Levels of dividends to Williams stockholders;
- Future credit ratings of Williams and its affiliates;
- Amounts and nature of future capital expenditures;
- Expansion and growth of our business and operations;
- Expected in-service dates for capital projects;
- Financial condition and liquidity;
- Business strategy;
- Cash flow from operations or results of operations;
- Seasonality of certain business components;
- Natural gas, natural gas liquids, and crude oil prices, supply,
and demand;
- Demand for our services.
Forward-looking statements are based on numerous assumptions,
uncertainties, and risks that could cause future events or results
to be materially different from those stated or implied in this
report. Many of the factors that will determine these results are
beyond our ability to control or predict. Specific factors that
could cause actual results to differ from results contemplated by
the forward-looking statements include, among others, the
following:
- Availability of supplies, market demand, and volatility of
prices;
- Development and rate of adoption of alternative energy
sources;
- The impact of existing and future laws and regulations, the
regulatory environment, environmental matters, and litigation, as
well as our ability and the ability of other energy companies, with
whom we conduct or seek to conduct business, to obtain necessary
permits and approvals, and our ability to achieve favorable rate
proceeding outcomes;
- Our exposure to the credit risk of our customers and
counterparties;
- Our ability to acquire new businesses and assets and
successfully integrate those operations and assets into existing
businesses as well as successfully expand our facilities, and
consummate asset sales on acceptable terms;
- Whether we are able to successfully identify, evaluate, and
timely execute our capital projects and investment
opportunities;
- The strength and financial resources of our competitors and the
effects of competition;
- The amount of cash distributions from and capital requirements
of our investments and joint ventures in which we participate;
- Whether we will be able to effectively execute our financing
plan;
- Increasing scrutiny and changing expectations from stakeholders
with respect to our environmental, social, and governance
practices;
- The physical and financial risks associated with climate
change;
- The impacts of operational and developmental hazards and
unforeseen interruptions;
- The risks resulting from outbreaks or other public health
crises;
- Risks associated with weather and natural phenomena, including
climate conditions and physical damage to our facilities;
- Acts of terrorism, cybersecurity incidents, and related
disruptions;
- Our costs and funding obligations for defined benefit pension
plans and other postretirement benefit plans;
- Changes in maintenance and construction costs, as well as our
ability to obtain sufficient construction-related inputs, including
skilled labor;
- Inflation, interest rates, and general economic conditions
(including future disruptions and volatility in the global credit
markets and the impact of these events on customers and
suppliers);
- Risks related to financing, including restrictions stemming
from debt agreements, future changes in credit ratings as
determined by nationally recognized credit rating agencies, and the
availability and cost of capital;
- The ability of the members of the Organization of Petroleum
Exporting Countries and other oil exporting nations to agree to and
maintain oil price and production controls and the impact on
domestic production;
- Changes in the current geopolitical situation, including the
Russian invasion of Ukraine and conflicts in the Middle East
including between Israel and Hamas and conflicts involving Iran and
its proxy forces;
- Changes in U.S. governmental administration and policies;
- Whether we are able to pay current and expected levels of
dividends;
- Additional risks described in our filings with the Securities
and Exchange Commission (SEC).
Given the uncertainties and risk factors that could cause our
actual results to differ materially from those contained in any
forward-looking statement, we caution investors not to unduly rely
on our forward-looking statements. We disclaim any obligations to,
and do not intend to, update the above list or announce publicly
the result of any revisions to any of the forward-looking
statements to reflect future events or developments.
In addition to causing our actual results to differ, the factors
listed above and referred to below may cause our intentions to
change from those statements of intention set forth in this report.
Such changes in our intentions may also cause our results to
differ. We may change our intentions, at any time and without
notice, based upon changes in such factors, our assumptions, or
otherwise.
Because forward-looking statements involve risks and
uncertainties, we caution that there are important factors, in
addition to those listed above, that may cause actual results to
differ materially from those contained in the forward-looking
statements. For a detailed discussion of those factors, see (a)
Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for
the year ended December 31, 2022, as filed with the SEC on February
27, 2023, (b) Part II, Item 1A. Risk Factors in subsequent
Quarterly Reports on Form 10-Q, and (c) when filed with the SEC,
Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for
the year ended December 31, 2023.
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Williams Companies (NYSE:WMB)
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Williams Companies (NYSE:WMB)
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