Williams (NYSE: WMB) today announced its unaudited financial
results for the three months ended March 31, 2024.
Business continues to outperform; solid execution on
accretive acquisitions and organic growth driving immediate
returns
- GAAP net income of $631 million, or $0.52 per diluted share
(EPS)
- Adjusted net income of $719 million, or $0.59 per diluted share
(Adj. EPS) – up 5% vs. 1Q 2023
- Adjusted EBITDA of $1.934 billion – up $139 million or 8% vs.
1Q 2023
- Cash flow from operations (CFFO) of $1.234 billion
- Available funds from operations (AFFO) of $1.507 billion – up
$62 million or 4% vs. 1Q 2023
- Dividend coverage ratio of 2.60x (AFFO basis)
- Record contracted transmission capacity of 33.9 Bcf/d – up 4.3%
from 1Q 2023
- Strong 1Q performance driving expectations to top half of 2024
financial guidance range
Recent acquisitions and large roster of projects in execution
building long-term value
- Closed acquisition of 6 storage facilities with total capacity
of 115 Bcf across Louisiana and Mississippi, strategically located
to serve growing LNG exports and power generation demand
- Placed Transco's Carolina Market Link into service 1Q 2024
- Received FERC notice to proceed on Transco's Commonwealth
Energy Connector
- Commenced construction on Transco's Southside Reliability
Enhancement and Southeast Energy Connector
- First phase of Transco's Regional Energy Access continued to
deliver earnings with second phase on track to come online in 4Q
2024
- Received FERC certificate for Transco's Alabama Georgia
Connector and Texas to Louisiana Energy Pathway
- Pre-filed FERC application for Transco's ~1.6 Bcf/d Southeast
Supply Enhancement
- Continued execution of additional transmission, gathering &
processing and Deepwater Gulf of Mexico projects
CEO Perspective
Alan Armstrong, president and chief executive officer, made the
following comments:
“Our 8 percent higher Adjusted EBITDA was driven by the
continued outperformance of our transmission, storage and gathering
businesses, which delivered 13 percent higher Adjusted EBITDA
compared to the same period last year. Contracted transmission
capacity achieved another record in the first quarter and our
Transco projects recently placed into service contributed
additional fee-based revenues, as did our immediately accretive
acquisitions, including the Gulf Coast storage portfolio that we
closed in the quarter.
“Crisp execution by our teams in both integrating newly acquired
assets and building large-scale organic projects has us on track to
be in the top half of our original 2024 guidance range. As our
natural gas-focused strategy continues to gain momentum, we are
successfully executing a full slate of high return growth projects,
with new regulatory milestones reached on seven of our
FERC-regulated expansion projects so far this year and progressing
on a healthy backlog of expansion opportunities to serve
accelerating demand for natural gas.
Armstrong added, “Our track record of generating predictable,
growing earnings in all market cycles underscores the value of
Williams as a resilient, long-term investment with a strong
dividend. We’ve built a business positioned for the future, and
we’re leveraging our existing infrastructure and project
development capabilities to serve rising domestic and global
security needs, while lowering emissions and creating sustainable
value for our shareholders.”
Williams Summary Financial
Information
1Q
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.
2024
2023
GAAP Measures
Net Income
$
631
$
926
Net Income Per Share
$
0.52
$
0.76
Cash Flow From Operations
$
1,234
$
1,514
Non-GAAP Measures (1)
Adjusted EBITDA
$
1,934
$
1,795
Adjusted Net Income
$
719
$
684
Adjusted Earnings Per Share
$
0.59
$
0.56
Available Funds from Operations
$
1,507
$
1,445
Dividend Coverage Ratio
2.60x
2.65x
Other
Debt-to-Adjusted EBITDA at Quarter End
(2)
3.79x
3.57x
Capital Investments (Excluding
Acquisitions) (3) (4)
$
563
$
525
(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) First-quarter 2024 capital excludes
$1.851 billion for the acquisition of the Gulf Coast Storage
assets, which closed in January 2024. First-quarter 2023 capital
excludes $1.056 billion for the acquisition of MountainWest, which
closed in February 2023.
GAAP Measures
First-quarter 2024 net income decreased by $295 million compared
to the prior year reflecting an unfavorable change of $419 million
in net unrealized gains/losses on commodity derivatives, higher net
interest expense from recent debt issuances and retirements, as
well as higher operating costs, depreciation and interest expense
resulting from recent acquisitions. These unfavorable changes were
partially offset by a $211 million increase in service revenues
driven by acquisitions and expansion projects. The tax provision
decreased primarily due to lower pretax income.
First-quarter 2024 cash flow from operations decreased compared
to the prior year primarily due to unfavorable net changes in both
working capital and derivative collateral requirements.
Non-GAAP Measures
First-quarter 2024 Adjusted EBITDA increased by $139 million
over the prior year, driven by the previously described favorable
net contributions from acquisitions and expansion projects.
First-quarter 2024 Adjusted Net Income improved by $35 million
over the prior year, driven by the previously described impacts to
net income, adjusted primarily to remove the effects of net
unrealized gains/losses on commodity derivatives and the related
income tax effects.
First-quarter Available Funds From Operations (AFFO) increased
by $62 million compared to the prior year primarily due to the
change in operating results exclusive of non-cash items.
Business Segment Results & Form 10-Q
Williams' operations are comprised of the following reportable
segments: Transmission & Gulf of Mexico, Northeast G&P,
West and Gas & NGL Marketing Services, as well as Other. For
more information, see the company's first-quarter 2024 Form
10-Q.
First Quarter
Amounts in millions
Modified EBITDA
Adjusted EBITDA
1Q 2024
1Q 2023
Change
1Q 2024
1Q 2023
Change
Transmission & Gulf of Mexico
$
829
$
715
$
114
$
839
$
728
$
111
Northeast G&P
504
470
34
504
470
34
West
327
304
23
328
286
42
Gas & NGL Marketing Services
101
567
(466
)
189
231
(42
)
Other
76
74
2
74
80
(6
)
Total
$
1,837
$
2,130
$
(293
)
$
1,934
$
1,795
$
139
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
First-quarter 2024 Modified and Adjusted EBITDA improved
compared to the prior year driven by favorable net contributions
from the Gulf Coast Storage and MountainWest acquisitions and the
Regional Energy Access expansion project. Modified EBITDA for both
periods was impacted by one-time acquisition costs, which are
excluded from Adjusted EBITDA.
Northeast G&P
First-quarter 2024 Modified and Adjusted EBITDA increased over
the prior year driven by higher rates and volumes at Susquehanna
Supply Hub, higher rates at Cardinal, and higher contribution from
our Aux Sable investment, partially offset by lower volumes at Ohio
Valley Midstream.
West
First-quarter 2024 Modified and Adjusted EBITDA increased
compared to the prior year benefiting from the DJ Basin
Acquisitions and improved commodity margins reflecting favorable
changes in shrink prices related to the absence of a short-term gas
price spike at Opal in 2023, partially offset by lower realized
gains on natural gas hedges. Modified EBITDA was also impacted by
the absence of a 2023 favorable contract settlement, which is
excluded from Adjusted EBITDA.
Gas & NGL Marketing Services
First-quarter 2024 Modified EBITDA decreased from the prior year
primarily reflecting lower commodity marketing margins and a $427
million net unfavorable change in unrealized gains/losses on
commodity derivatives, which is excluded from Adjusted EBITDA.
2024 Financial Guidance
After our strong first-quarter performance, Williams expects
Adjusted EBITDA at the top half of its 2024 guidance range of $6.8
billion and $7.1 billion. The company continues to expect 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 for emissions reduction and
modernization initiatives. For 2025, the company continues to
expect 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 continues to
anticipate 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' First-Quarter 2024 Materials to be Posted Shortly;
Q&A Webcast Scheduled for Tomorrow
Williams' first-quarter 2024 earnings presentation will be
posted at www.williams.com. The company's first-quarter 2024
earnings conference call and webcast with analysts and investors is
scheduled for Tuesday, May 7, at 9:30 a.m. Eastern Time (8:30 a.m.
Central Time). Participants who wish to join the call by phone must
register using the following link:
https://register.vevent.com/register/BI2af82b1f777e448892c40bafefdffe05
A webcast link to the conference call will be provided on
Williams' Investor Relations website. A replay of the 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)
Three Months Ended
March 31,
2024
2023
(Millions, except per-share
amounts)
Revenues:
Service revenues
$
1,905
$
1,694
Service revenues – commodity
consideration
30
36
Product sales
845
845
Net gain (loss) from commodity
derivatives
(9
)
506
Total revenues
2,771
3,081
Costs and expenses:
Product costs
526
553
Net processing commodity expenses
5
54
Operating and maintenance expenses
511
463
Depreciation and amortization expenses
548
506
Selling, general, and administrative
expenses
186
176
Other (income) expense – net
(17
)
(31
)
Total costs and expenses
1,759
1,721
Operating income (loss)
1,012
1,360
Equity earnings (losses)
137
147
Other investing income (loss) – net
24
8
Interest expense
(349
)
(294
)
Other income (expense) – net
31
20
Income (loss) before income taxes
855
1,241
Less: Provision (benefit) for income
taxes
193
284
Net income (loss)
662
957
Less: Net income (loss) attributable to
noncontrolling interests
30
30
Net income (loss) attributable to The
Williams Companies, Inc.
632
927
Less: Preferred stock dividends
1
1
Net income (loss) available to common
stockholders
$
631
$
926
Basic earnings (loss) per common
share:
Net income (loss) available to common
stockholders
$
.52
$
.76
Weighted-average shares (thousands)
1,218,155
1,219,465
Diluted earnings (loss) per common
share:
Net income (loss) available to common
stockholders
$
.52
$
.76
Weighted-average shares (thousands)
1,222,222
1,225,781
The Williams Companies,
Inc.
Consolidated Balance
Sheet
(Unaudited)
March 31,
December 31,
2024
2023
(Millions, except per-share
amounts)
ASSETS
Current assets:
Cash and cash equivalents
$
667
$
2,150
Trade accounts and other receivables (net
of allowance of $3 at March 31, 2024 and December 31, 2023)
1,355
1,655
Inventories
239
274
Derivative assets
173
239
Other current assets and deferred
charges
176
195
Total current assets
2,610
4,513
Investments
4,639
4,637
Property, plant and equipment
54,305
51,842
Accumulated depreciation and
amortization
(17,854
)
(17,531
)
Property, plant, and equipment – net
36,451
34,311
Intangible assets – net of accumulated
amortization
7,496
7,593
Regulatory assets, deferred charges, and
other
1,551
1,573
Total assets
$
52,747
$
52,627
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
1,042
$
1,379
Derivative liabilities
75
105
Accrued and other current liabilities
1,077
1,284
Commercial paper
—
725
Long-term debt due within one year
2,787
2,337
Total current liabilities
4,981
5,830
Long-term debt
24,100
23,376
Deferred income tax liabilities
4,001
3,846
Regulatory liabilities, deferred income,
and other
4,735
4,684
Contingent liabilities and commitments
Equity:
Stockholders’ equity:
Preferred stock ($1 par value; 30 million
shares authorized at March 31, 2024 and December 31, 2023; 35,000
shares issued at March 31, 2024 and December 31, 2023)
35
35
Common stock ($1 par value; 1,470 million
shares authorized at March 31, 2024 and December 31, 2023; 1,258
million shares issued at March 31, 2024 and 1,256 million shares
issued at December 31, 2023)
1,258
1,256
Capital in excess of par value
24,564
24,578
Retained deficit
(12,238
)
(12,287
)
Accumulated other comprehensive income
(loss)
10
—
Treasury stock, at cost (39 million shares
at March 31, 2024 and December 31, 2023 of common stock)
(1,180
)
(1,180
)
Total stockholders’ equity
12,449
12,402
Noncontrolling interests in consolidated
subsidiaries
2,481
2,489
Total equity
14,930
14,891
Total liabilities and equity
$
52,747
$
52,627
The Williams Companies,
Inc.
Consolidated Statement of Cash
Flows
(Unaudited)
Three Months Ended
March 31,
2024
2023
(Millions)
OPERATING ACTIVITIES:
Net income (loss)
$
662
$
957
Adjustments to reconcile to net cash
provided (used) by operating activities:
Depreciation and amortization
548
506
Provision (benefit) for deferred income
taxes
152
283
Equity (earnings) losses
(137
)
(147
)
Distributions from equity-method
investees
188
208
Net unrealized (gain) loss from commodity
derivative instruments
92
(327
)
Inventory write-downs
4
18
Amortization of stock-based awards
24
17
Cash provided (used) by changes in current
assets and liabilities:
Accounts receivable
314
1,269
Inventories
34
27
Other current assets and deferred
charges
9
(4
)
Accounts payable
(309
)
(1,017
)
Accrued and other current liabilities
(218
)
(318
)
Changes in current and noncurrent
commodity derivative assets and liabilities
(68
)
82
Other, including changes in noncurrent
assets and liabilities
(61
)
(40
)
Net cash provided (used) by operating
activities
1,234
1,514
FINANCING ACTIVITIES:
Proceeds from (payments of) commercial
paper – net
(723
)
(352
)
Proceeds from long-term debt
2,099
1,502
Payments of long-term debt
(1,012
)
(7
)
Payments for debt issuance costs
(16
)
(8
)
Proceeds from issuance of common stock
5
3
Purchases of treasury stock
—
(74
)
Common dividends paid
(579
)
(546
)
Dividends and distributions paid to
noncontrolling interests
(64
)
(54
)
Contributions from noncontrolling
interests
26
3
Other – net
(17
)
(17
)
Net cash provided (used) by financing
activities
(281
)
450
INVESTING ACTIVITIES:
Property, plant, and equipment:
Capital expenditures (1)
(544
)
(545
)
Dispositions - net
5
(7
)
Purchases of businesses, net of cash
acquired
(1,851
)
(1,056
)
Purchases of and contributions to
equity-method investments
(52
)
(39
)
Other – net
6
8
Net cash provided (used) by investing
activities
(2,436
)
(1,639
)
Increase (decrease) in cash and cash
equivalents
(1,483
)
325
Cash and cash equivalents at beginning of
year
2,150
152
Cash and cash equivalents at end of
period
$
667
$
477
(1) Increases to property, plant, and
equipment
$
(509
)
$
(484
)
Changes in related accounts payable and
accrued liabilities
(35
)
(61
)
Capital expenditures
$
(544
)
$
(545
)
Transmission & Gulf of
Mexico
(UNAUDITED)
2023
2024
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
Regulated interstate natural gas
transportation, storage, and other revenues (1)
$
774
$
786
$
794
$
822
$
3,176
$
836
Gathering, processing, storage and
transportation revenues
100
104
114
100
418
137
Other fee revenues (1)
6
8
5
4
23
12
Commodity margins
10
8
7
8
33
9
Operating and administrative costs (1)
(254
)
(254
)
(257
)
(270
)
(1,035
)
(254
)
Other segment income (expenses) - net
(1)
26
31
36
26
119
43
Gain on sale of business
—
—
130
(1
)
129
—
Proportional Modified EBITDA of
equity-method investments
53
48
52
52
205
46
Modified EBITDA
715
731
881
741
3,068
829
Adjustments
13
17
(127
)
11
(86
)
10
Adjusted EBITDA
$
728
$
748
$
754
$
752
$
2,982
$
839
Statistics for Operated Assets
Natural Gas Transmission (2)
Transcontinental Gas Pipe Line
Avg. daily transportation volumes
(MMdth)
14.3
13.2
14.0
14.0
13.9
14.6
Avg. daily firm reserved capacity
(MMdth)
19.5
19.4
19.4
19.3
19.4
20.3
Northwest Pipeline LLC
Avg. daily transportation volumes
(MMdth)
3.1
2.3
2.3
2.8
2.6
3.1
Avg. daily firm reserved capacity
(MMdth)
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
4.3
Avg. daily firm reserved capacity
(MMdth)
7.8
7.5
7.5
7.9
7.7
8.4
Gulfstream - Non-consolidated
Avg. daily transportation volumes
(MMdth)
1.0
1.2
1.4
1.1
1.2
1.0
Avg. daily firm reserved capacity
(MMdth)
1.4
1.4
1.4
1.4
1.4
1.4
Gathering, Processing, and Crude Oil
Transportation
Consolidated (4)
Gathering volumes (Bcf/d)
0.28
0.23
0.27
0.27
0.26
0.25
Plant inlet natural gas volumes
(Bcf/d)
0.43
0.40
0.46
0.46
0.44
0.45
NGL production (Mbbls/d)
28
24
28
26
27
28
NGL equity sales (Mbbls/d)
7
5
6
5
6
5
Crude oil transportation volumes
(Mbbls/d)
119
111
134
130
123
118
Non-consolidated (5)
Gathering volumes (Bcf/d)
0.36
0.30
0.36
0.33
0.34
0.27
Plant inlet natural gas volumes
(Bcf/d)
0.36
0.30
0.36
0.33
0.34
0.27
NGL production (Mbbls/d)
28
21
30
28
27
15
NGL equity sales (Mbbls/d)
8
3
8
7
7
3
(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)
2023
2024
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
Gathering, processing, transportation, and
fractionation revenues
$
391
$
431
$
417
$
411
$
1,650
$
411
Other fee revenues (1)
32
27
27
28
114
34
Commodity margins
5
(1
)
7
1
12
11
Operating and administrative costs (1)
(101
)
(101
)
(115
)
(107
)
(424
)
(108
)
Other segment income (expenses) - net
—
—
(1
)
(9
)
(10
)
(1
)
Proportional Modified EBITDA of
equity-method investments
143
159
119
153
574
157
Modified EBITDA
470
515
454
477
1,916
504
Adjustments
—
—
31
8
39
—
Adjusted EBITDA
$
470
$
515
$
485
$
485
$
1,955
$
504
Statistics for Operated Assets
Gathering and Processing
Consolidated (2)
Gathering volumes (Bcf/d)
4.42
4.61
4.41
4.37
4.45
4.33
Plant inlet natural gas volumes
(Bcf/d)
1.92
1.79
1.93
1.93
1.89
1.76
NGL production (Mbbls/d)
144
135
144
133
139
133
NGL equity sales (Mbbls/d)
1
1
—
1
1
1
Non-consolidated (3)
Gathering volumes (Bcf/d)
6.97
7.03
6.83
6.85
6.92
6.79
Plant inlet natural gas volumes
(Bcf/d)
0.77
0.93
0.99
1.01
0.93
0.98
NGL production (Mbbls/d)
54
64
71
69
65
72
NGL equity sales (Mbbls/d)
4
5
4
4
4
3
(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)
2023
2024
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
Net gathering, processing, transportation,
storage, and fractionation revenues
$
382
$
373
$
371
$
397
$
1,523
$
421
Other fee revenues (1)
5
7
4
8
24
8
Commodity margins
(24
)
18
21
19
34
12
Operating and administrative costs (1)
(115
)
(122
)
(122
)
(144
)
(503
)
(139
)
Other segment income (expenses) - net
23
(7
)
(4
)
(14
)
(2
)
—
Proportional Modified EBITDA of
equity-method investments
33
43
45
41
162
25
Modified EBITDA
304
312
315
307
1,238
327
Adjustments
(18
)
—
—
16
(2
)
1
Adjusted EBITDA
$
286
$
312
$
315
$
323
$
1,236
$
328
Statistics for Operated Assets
Gathering and Processing
Consolidated (2) (4)
Gathering volumes (Bcf/d) (3)
5.47
5.51
5.60
6.03
6.02
5.75
Plant inlet natural gas volumes
(Bcf/d)
0.92
1.06
1.12
1.63
1.54
1.52
NGL production (Mbbls/d)
25
40
61
99
91
87
NGL equity sales (Mbbls/d)
6
16
22
14
14
6
Non-consolidated (5)
Gathering volumes (Bcf/d)
0.32
0.33
0.33
—
—
—
Plant inlet natural gas volumes
(Bcf/d)
0.32
0.32
0.32
—
—
—
NGL production (Mbbls/d)
37
38
38
—
—
—
NGL and Crude Oil Transportation volumes
(Mbbls/d) (6)
161
217
244
250
218
220
(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 Cureton Acquisition gathering assets after the
purchase on November 30, 2023. Average volumes were calculated over
the period owned.
(4) Volumes associated with the Rocky
Mountain Midstream (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 RMM through 3rd
Qtr 2023.
(6) Includes 100% of the volumes
associated with Overland Pass Pipeline Company (an operated
equity-method investment), RMM (see Note 4 above) as well as
volumes for our consolidated Bluestem pipeline.
Gas & NGL Marketing
Services
(UNAUDITED)
2023
2024
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
Commodity margins
$
265
$
(2
)
$
38
$
88
$
389
$
236
Other fee revenues
1
—
—
—
1
—
Net unrealized gain (loss) from derivative
instruments
333
94
24
208
659
(95
)
Operating and administrative costs
(32
)
(24
)
(19
)
(24
)
(99
)
(40
)
Modified EBITDA
567
68
43
272
950
101
Adjustments
(336
)
(84
)
(27
)
(203
)
(650
)
88
Adjusted EBITDA
$
231
$
(16
)
$
16
$
69
$
300
$
189
Statistics
Product Sales Volumes
Natural Gas (Bcf/d)
7.24
6.56
7.31
7.11
7.05
7.53
NGLs (Mbbls/d)
234
239
245
173
223
170
Other
(UNAUDITED)
2023
2024
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
Service revenues
$
3
$
5
$
4
$
4
$
16
$
4
Net realized product sales
120
97
127
145
489
113
Net unrealized gain (loss) from derivative
instruments
(6
)
(11
)
(1
)
19
1
3
Operating and administrative costs
(48
)
(54
)
(58
)
(65
)
(225
)
(51
)
Other segment income (expenses) - net
5
5
10
8
28
7
Net gain from Energy Transfer litigation
judgment
—
—
—
534
534
—
Proportional Modified EBITDA of
equity-method investments
—
(1
)
(1
)
—
(2
)
—
Modified EBITDA
74
41
81
645
841
76
Adjustments
6
11
1
(553
)
(535
)
(2
)
Adjusted EBITDA
$
80
$
52
$
82
$
92
$
306
$
74
Statistics
Net Product Sales Volumes
Natural Gas (Bcf/d)
0.26
0.29
0.31
0.30
0.29
0.28
NGLs (Mbbls/d)
3
6
9
10
7
8
Crude Oil (Mbbls/d)
1
3
5
7
4
5
Capital Expenditures and
Investments
(UNAUDITED)
2023
2024
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr*
Year*
1st Qtr
Capital expenditures:
Transmission & Gulf of Mexico
$
205
$
263
$
382
$
404
$
1,254
$
310
Northeast G&P
99
74
115
71
359
71
West
169
197
141
121
628
120
Other
72
76
52
75
275
43
Total (1)
$
545
$
610
$
690
$
671
$
2,516
$
544
Purchases of and contributions to
equity-method investments:
Transmission & Gulf of Mexico
$
8
$
18
$
6
$
9
$
41
$
27
Northeast G&P
31
12
4
52
99
25
West
—
—
1
—
1
—
Other
—
—
—
—
—
—
Total
$
39
$
30
$
11
$
61
$
141
$
52
Summary:
Transmission & Gulf of Mexico
$
213
$
281
$
388
$
413
$
1,295
$
337
Northeast G&P
130
86
119
123
458
96
West
169
197
142
121
629
120
Other
72
76
52
75
275
43
Total
$
584
$
640
$
701
$
732
$
2,657
$
596
Capital investments:
Increases to property, plant, and
equipment
$
484
$
684
$
792
$
604
$
2,564
$
509
Purchases of businesses, net of cash
acquired
1,056
(3
)
(29
)
544
1,568
1,851
Purchases of and contributions to
equity-method investments
39
30
11
61
141
52
Purchases of other long-term
investments
2
1
2
1
6
2
Total
$
1,581
$
712
$
776
$
1,210
$
4,279
$
2,414
(1) Increases to property, plant, and
equipment
$
484
$
684
$
792
$
604
$
2,564
$
509
Changes in related accounts payable and
accrued liabilities
61
(74
)
(102
)
67
(48
)
35
Capital expenditures
$
545
$
610
$
690
$
671
$
2,516
$
544
Contributions from noncontrolling
interests
$
3
$
15
$
—
$
—
$
18
$
26
Contributions in aid of construction
$
11
$
7
$
2
$
8
$
28
$
10
Proceeds from sale of business
$
—
$
—
$
348
$
(2
)
$
346
$
—
* Certain amounts for the fourth quarter
of 2023 were revised to agree to final reported amounts.
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, 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 net income
(loss) excluding the effect of certain noncash items, reduced by
distributions from equity-method investees, net distributions to
noncontrolling interests, and preferred dividends. AFFO may also 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)
2023
2024
(Dollars in millions, except per-share
amounts)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
Income (loss) from continuing
operations attributable to The Williams Companies, Inc. available
to common stockholders
$
926
$
547
$
654
$
1,146
$
3,273
$
631
Income (loss) from continuing
operations - diluted earnings (loss) per common share (1)
$
.76
$
.45
$
.54
$
.94
$
2.68
$
.52
Adjustments:
Transmission &
Gulf of Mexico
MountainWest acquisition and
transition-related costs
$
13
$
17
$
3
$
9
$
42
$
—
Gulf Coast Storage acquisition and
transition-related costs*
—
—
—
1
1
10
Gain on sale of business
—
—
(130
)
1
(129
)
—
Total Transmission & Gulf of Mexico
adjustments
13
17
(127
)
11
(86
)
10
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
Cureton acquisition and transition-related
costs*
—
—
—
6
6
1
Gain from contract settlement
(18
)
—
—
—
(18
)
—
Impairment of assets held for sale
—
—
—
10
10
—
Total West adjustments
(18
)
—
—
16
(2
)
1
Gas & NGL
Marketing Services
Impact of volatility on NGL linefill
transactions*
(3
)
10
(3
)
5
9
(6
)
Net unrealized (gain) loss from derivative
instruments
(333
)
(94
)
(24
)
(208
)
(659
)
94
Total Gas & NGL Marketing Services
adjustments
(336
)
(84
)
(27
)
(203
)
(650
)
88
Other
Net unrealized (gain) loss from derivative
instruments
6
11
1
(19
)
(1
)
(2
)
Net gain from Energy Transfer litigation
judgment
—
—
—
(534
)
(534
)
—
Total Other adjustments
6
11
1
(553
)
(535
)
(2
)
Adjustments included in Modified
EBITDA
(335
)
(56
)
(122
)
(721
)
(1,234
)
97
Adjustments below
Modified EBITDA
Gain on remeasurement of RMM
investment
—
—
—
(30
)
(30
)
—
Imputed interest expense on deferred
consideration obligations*
—
—
—
—
—
12
Amortization of intangible assets from
Sequent acquisition
15
14
15
15
59
7
15
14
15
(15
)
29
19
Total adjustments
(320
)
(42
)
(107
)
(736
)
(1,205
)
116
Less tax effect for above items
78
10
25
178
291
(28
)
Adjustments for tax-related items (2)
—
—
(25
)
—
(25
)
—
Adjusted income from continuing
operations available to common stockholders
$
684
$
515
$
547
$
588
$
2,334
$
719
Adjusted income from continuing
operations - diluted earnings per common share (1)
$
.56
$
.42
$
.45
$
.48
$
1.91
$
.59
Weighted-average shares - diluted
(thousands)
1,225,781
1,219,915
1,220,073
1,221,894
1,221,616
1,222,222
(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 third quarter of 2023 includes an
adjustment associated with a decrease in our estimated deferred
state income tax rate.
*Amounts for the 2024 periods are included
in Additional adjustments on the Reconciliation of Cash Flow from
Operating Activities to Non-GAAP Available Funds from Operations
(AFFO).
Reconciliation of "Net Income (Loss)"
to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA”
(UNAUDITED)
2023
2024
(Dollars in millions)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Year
1st Qtr
Net income (loss)
$
957
$
494
$
684
$
1,168
$
3,303
$
662
Provision (benefit) for income taxes
284
175
176
370
1,005
193
Interest expense
294
306
314
322
1,236
349
Equity (earnings) losses
(147
)
(160
)
(127
)
(155
)
(589
)
(137
)
Other investing (income) loss - net
(8
)
(13
)
(24
)
(63
)
(108
)
(24
)
Proportional Modified EBITDA of
equity-method investments
229
249
215
246
939
228
Depreciation and amortization expenses
506
515
521
529
2,071
548
Accretion expense associated with asset
retirement obligations for nonregulated operations
15
14
14
16
59
18
(Income) loss from discontinued
operations, net of tax
—
87
1
9
97
—
Modified EBITDA
$
2,130
$
1,667
$
1,774
$
2,442
$
8,013
$
1,837
Transmission & Gulf of Mexico
$
715
$
731
$
881
$
741
$
3,068
$
829
Northeast G&P
470
515
454
477
1,916
504
West
304
312
315
307
1,238
327
Gas & NGL Marketing Services
567
68
43
272
950
101
Other
74
41
81
645
841
76
Total Modified EBITDA
$
2,130
$
1,667
$
1,774
$
2,442
$
8,013
$
1,837
Adjustments (1):
Transmission & Gulf of Mexico
$
13
$
17
$
(127
)
$
11
$
(86
)
$
10
Northeast G&P
—
—
31
8
39
—
West
(18
)
—
—
16
(2
)
1
Gas & NGL Marketing Services
(336
)
(84
)
(27
)
(203
)
(650
)
88
Other
6
11
1
(553
)
(535
)
(2
)
Total Adjustments
$
(335
)
$
(56
)
$
(122
)
$
(721
)
$
(1,234
)
$
97
Adjusted EBITDA:
Transmission & Gulf of Mexico
$
728
$
748
$
754
$
752
$
2,982
$
839
Northeast G&P
470
515
485
485
1,955
504
West
286
312
315
323
1,236
328
Gas & NGL Marketing Services
231
(16
)
16
69
300
189
Other
80
52
82
92
306
74
Total Adjusted EBITDA
$
1,795
$
1,611
$
1,652
$
1,721
$
6,779
$
1,934
(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)
2023
2024
(Dollars in millions, except coverage
ratios)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr**
Year**
1st Qtr
Net cash provided (used) by operating
activities
$
1,514
$
1,377
$
1,234
$
1,813
$
5,938
$
1,234
Exclude: Cash (provided) used by changes
in:
Accounts receivable
(1,269
)
(154
)
128
206
(1,089
)
(314
)
Inventories, including write-downs
(45
)
(19
)
7
14
(43
)
(38
)
Other current assets and deferred
charges
4
(28
)
29
(65
)
(60
)
(9
)
Accounts payable
1,017
203
(148
)
(63
)
1,009
309
Accrued and other current liabilities
318
(246
)
42
(95
)
19
218
Changes in current and noncurrent
commodity derivative assets and liabilities
(82
)
(37
)
(53
)
(28
)
(200
)
68
Other, including changes in noncurrent
assets and liabilities
40
47
53
106
246
61
Preferred dividends paid
(1
)
—
(1
)
(1
)
(3
)
(1
)
Dividends and distributions paid to
noncontrolling interests
(54
)
(58
)
(62
)
(39
)
(213
)
(64
)
Contributions from noncontrolling
interests
3
15
—
—
18
26
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
)
—
Additional Adjustments *
—
—
—
—
—
17
Available funds from operations
$
1,445
$
1,215
$
1,230
$
1,323
$
5,213
$
1,507
Common dividends paid
$
546
$
545
$
544
$
544
$
2,179
$
579
Coverage ratio:
Available funds from operations divided by
Common dividends paid
2.65
2.23
2.26
2.43
2.39
2.60
* See detail on Reconciliation of Income
(Loss) from Continuing Operations Attributable to The Williams
Companies, Inc. to Non-GAAP Adjusted Income.
** Certain amounts for the fourth quarter
of 2023 were revised to agree to final reported amounts, with no
impact to previously reported AFFO for that period.
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 Part I,
Item 1A. Risk Factors in our Annual Report on Form 10-K for the
year ended December 31, 2023, as filed with the SEC on February 21,
2024, and as may be supplemented by disclosures in Part II, Item
1A. Risk Factors in subsequent Quarterly Reports on Form 10-Q.
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version on businesswire.com: https://www.businesswire.com/news/home/20240506608318/en/
MEDIA CONTACT: media@williams.com (800) 945-8723
INVESTOR CONTACTS: Danilo Juvane (918) 573-5075 Caroline
Sardella (918) 230-9992
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