- First Quarter 2015 Cash Distributions
from Williams Partners Totaled $515 Million, Up $60 Million, or
13%
- Adjusted EBITDA is $918 Million, up
12%
- Reaffirming Williams Partners Adjusted
EBITDA Guidance For 2015-2017 With 2015 Expected to be Near Low End
of Range on Extended Geismar Ramp-Up and Effects of Low Commodity
Prices
- Reaffirming Williams Dividend Guidance
of $2.38 Per Share in 2015 with 10% to 15% Annual Dividend Growth
through 2017 with Growing Coverage
- Williams Analyst Day Set for May
13
Williams (NYSE: WMB) today announced unaudited first quarter
2015 financial results, including the financial results of its
master limited partnership (MLP), Williams Partners (NYSE: WPZ),
which merged with Access Midstream Partners, L.P. in the first
quarter.
Williams Summary Financial Information
1Q Amounts in millions, except per-share amounts. Per share
amounts are reported on a diluted basis. All amounts are
attributable to The Williams Companies, Inc. 2015 2014 (Unaudited)
MLP Cash Distributions to Williams (1) $ 515 $ 455 Dividend
Coverage Ratio (2) 1.14x 1.42x Quarterly Dividend Per Share $ 0.58
$ 0.4025 Adjusted EBITDA (2) $ 918 $ 821 Adjusted
income from continuing operations (2) $ 122 $ 190 Adjusted income
from continuing operations per share (2) $ 0.16 $ 0.28 Net
income $ 70 $ 140 Net income per share $ 0.09 $ 0.20
(1) Quarterly cash distributions in this table are declared and
received in the following quarter, as these distributions relate to
the first quarter's cash flow.
(2) Schedules reconciling dividend coverage ratio, adjusted
EBITDA and adjusted income from continuing operations (non-GAAP
measures) are available at www.williams.com and as an attachment to
this news release.
Williams reported first quarter 2015 cash distributions from
Williams Partners of $515 million, a $60 million or 13 percent
increase from total MLP cash distributions received in first
quarter 2014. Quarterly cash distributions discussed in this news
release are declared and received in the following quarter, as
these distributions relate to the first quarter’s cash flow.
Williams reported adjusted EBITDA of $918 million for first
quarter 2015, compared with $821 million in the first quarter 2014,
an increase of $97 million, or 12 percent.
Williams reported adjusted income from continuing operations of
$122 million, or $0.16 per share, for first quarter 2015, compared
with $190 million, or $0.28 per share, for first quarter 2014. The
variance in adjusted income was driven by the absence of $173
million of business interruption insurance proceeds included in
adjusted results related to the Geismar plant and sharp declines in
NGL margins driven by low prices, partially offset by new fee-based
revenues from Gulfstar One and Transco expansion projects.
Williams reported unaudited first quarter 2015 net income
attributable to Williams of $70 million, or $0.09 per share on a
diluted basis, compared with first quarter 2014 net income of $140
million, or $0.20 per share on a diluted basis. The $70 million
decrease in net income attributable to Williams was primarily the
result of the absence of insurance proceeds received in first
quarter 2014 and sharply lower NGL margins, partially offset by the
absence of 2014 losses associated with the discontinued Bluegrass
Pipeline project and new fee-based revenues from Gulfstar One and
Transco expansion projects.
CEO Comment
Alan Armstrong, Williams’ president and chief executive officer,
made the following comments:
“First quarter 2015 results showed strong fee-based revenue
growth for Williams Partners and we expect the second quarter to be
even higher with Gulfstar One and Keathley Canyon Connector nearing
full production and additional projects being placed in service
such as the Rockaway Lateral and the mainline portion of Leidy
Southeast.
“We’ve reaffirmed 2015-2017 guidance, but we do expect 2015
adjusted EBITDA to be near the low end of the range due to the
extended Geismar ramp-up and the effects of low commodity prices on
volumes and margins. Williams’ strong annual dividend growth rate
of 10 to 15 percent through 2017 with growing coverage remains
unchanged.
“Our strategy remains sound and our backlog of projects to serve
the demand side of the growing natural gas market continues to
build.”
Business Segment Results
Williams’ business segments for financial reporting are Williams
Partners, Williams NGL & Petchem Services and Other.
For periods prior to July 1, 2014, the Other segment includes
Williams’ equity earnings from its 50-percent interest in privately
held Access Midstream Partners GP, L.L.C. and an approximate
23-percent limited-partner interest in Access Midstream Partners,
L.P. As a result of Williams’ acquisition of additional ownership
interests, periods after July 1, 2014 include the consolidated
results of Access Midstream Partners. Furthermore, following the
closing of the merger between Williams Partners and Access
Midstream Partners in February 2015, the consolidated results of
Access Midstream for periods following July 1, 2014 are now
reported as part of the Williams Partners segment.
Williams NGL & Petchem Services segment is comprised of
projects in various stages of development, including offgas
processing at the CNRL’s Horizon upgrader plant as well as petchem
pipeline projects on the Gulf Coast.
Williams Adjusted EBITDA Amounts in
millions
1Q 2015 1Q 2014 Williams Partners $
917 $ 768 Williams NGL & Petchem (5 ) (5 ) Other 6
58 Total
$ 918
$ 821
Schedules reconciling adjusted EBITDA to modified EBITDA and net
income are attached to this news release.
The first quarter of 2014 includes Williams’ proportional share
of the adjusted EBITDA from its equity-method investment in Access
Midstream in its Other segment. Following the closing of the merger
between Williams Partners and Access Midstream, the consolidated
results of Access Midstream are reported as part of the Williams
Partners segment. Williams NGL & Petchem Services segment is
comprised of projects in various stages of development, including
the CNRL Horizon offgas processing project in Canada as well as NGL
and petrochemical pipeline projects on the Gulf Coast.
Williams Partners Segment
Williams Partners is focused on natural gas and natural gas
liquids (NGL) transportation, gathering, treating, processing and
storage; NGL fractionation; olefins production; and crude oil
transportation.
Williams Partners reported adjusted EBITDA of $917 million for
first quarter 2015, compared with $768 million for first quarter
2014. The increase is due primarily to the contribution of
approximately $314 million of adjusted EBITDA from Access Midstream
as a result of the merger and new fee-based revenues from Gulfstar
One and Transco expansion projects, partially offset by the absence
of $173 million of Geismar business interruption proceeds included
in adjusted EBITDA in 2014, as well as sharply lower NGL
margins.
Williams Partners’ complete financial results for first quarter
2015 are provided in the earnings news release issued today by
Williams Partners.
Other Segment
The first quarter of 2014 includes $51 million for Williams’
proportional share of the adjusted EBITDA from Williams’
equity-method investment in Access Midstream, L.P. As a result of
Williams’ acquisition of additional ownership interests, periods
after July 1, 2014 include the consolidated results of Access
Midstream Partners. Furthermore, following the closing of the
merger between Williams Partners and Access Midstream Partners in
February 2015, the consolidated results of Access Midstream for
periods following July 1, 2014 are now reported as part of the
Williams Partners segment.
Guidance
Williams is reaffirming its guidance for the years 2015 through
2017 provided on Feb. 18, 2015. We expect Williams Partners’ 2015
adjusted EBITDA and distributable cash flow to be near the low end
of the range due to the extended Geismar ramp-up and the effects of
low commodity prices on volumes and margins.
Williams’ current guidance for its earnings and capital
expenditures are displayed in the following table:
Williams - Financial outlook
and commodity price assumptions 2015
2016 2017 Low Mid
High Low Mid
High Low Mid
High Adjusted EBITDA (1) $ 4,345
$ 4,510 $ 4,675 $ 5,170 $ 5,375 $ 5,580 $ 5,825 $ 6,050 $ 6,275
Total Capital & Investment Expenditures $ 3,960 $
4,275 $ 4,590 $ 3,300 $ 3,605 $ 3,910 $ 3,025 $ 3,325 $ 3,625
Williams Cash Available for Dividends (1) $ 1,875 $
2,135 $ 2,525 Cash Dividends $ 1,785 $ 2,020 $ 2,290 Dividends per
Share $ 2.38 $ 2.68 $ 3.01 Dividend Coverage Ratio (1) 1.05x 1.06x
1.10x
Williams Partners Distributable Cash Flow (1) $
2,845 $ 3,010 $ 3,175 $ 3,475 $ 3,675 $ 3,875 $ 3,960 $ 4,185 $
4,410 Cash Distributions $ 3,010 $ 3,005 $ 2,995 $ 3,380 $ 3,440 $
3,515 $ 3,770 $ 3,925 $ 4,090 Cash Distributions per LP Unit $ 3.40
$ 3.40 $ 3.40 $ 3.64 $ 3.71 $ 3.78 $ 3.89 $ 4.04 $ 4.19 Cash
Distribution Coverage Ratio (1) 0.95x 1.00x 1.06x 1.03x 1.07x 1.10x
1.05x 1.07x 1.08x
Commodity Price Assumptions Crude
Oil - WTI ($ per barrel) $ 45.00 $ 55.00 $ 65.00 $ 53.75 $ 65.00 $
76.25 $ 57.50 $ 70.00 $ 82.50 Natural Gas - Henry Hub ($/MMBtu) $
2.50 $ 3.00 $ 3.50 $ 2.75 $ 3.25 $ 3.75 $ 3.25 $ 3.75 $ 4.25
Composite NGL Barrel ($ per gallon) $ 0.360 $ 0.450 $ 0.520 $ 0.410
$ 0.490 $ 0.560 $ 0.460 $ 0.550 $ 0.620 Crack Spread ($ per pound)
(2) $ 0.297 $ 0.350 $ 0.411 $ 0.323 $ 0.376 $ 0.443 $ 0.346 $ 0.395
$ 0.466 Ethylene spot - ($ per pound) $ 0.360 $ 0.430 $ 0.500 $
0.395 $ 0.465 $ 0.540 $ 0.430 $ 0.500 $ 0.580 Ethane- ($ per
gallon) $ 0.150 $ 0.190 $ 0.210 $ 0.170 $ 0.210 $ 0.230 $ 0.200 $
0.250 $ 0.270 Propane ($ per gallon) $ 0.500 $ 0.600 $ 0.700 $
0.550 $ 0.650 $ 0.750 $ 0.600 $ 0.700 $ 0.800 Propylene Spot ($ per
pound) $ 0.405 $ 0.475 $ 0.545 $ 0.415 $ 0.485 $ 0.555 $ 0.430 $
0.500 $ 0.570
(1) Adjusted EBITDA, distributable cash flow, cash distribution
coverage ratio, cash available for dividends and dividend coverage
ratio are non-GAAP measures. Reconciliations to the most relevant
measures included in GAAP are attached to this news release.
(2) Crack spread is based on delivered U.S. Gulf Coast ethylene
and Mont Belvieu ethane.
Williams, Williams Partners Analyst Day Set for May
13
Williams is scheduled to host its annual Analyst Day event May
13. During the event, Williams' management will give in-depth
presentations covering all of Williams' and Williams Partners
L.P.'s energy infrastructure businesses. The event is scheduled
from 8:30 a.m. to approximately 2:30 p.m. EDT.
On the day of the event, www.williams.com will feature
presentation files for download along with a link to a live
webcast. A replay of the Analyst Day webcast will be available for
two weeks following the event.
First Quarter Materials to be Posted Shortly, Q&A Webcast
Scheduled for Tomorrow
Williams’ first quarter 2015 financial results will be posted
shortly at www.williams.com. The information will include the data
book and analyst package.
The company and the partnership will jointly host a conference
call and live webcast on Thursday, April 30, at 9:30 a.m. EDT. A
limited number of phone lines will be available at (800) 475-3716.
International callers should dial (719) 457-2660. A link to the
webcast, as well as replays of the webcast in both streaming and
downloadable podcast formats, will be available for two weeks
following the event at www.williams.com.
Form 10-Q
The company plans to file its first quarter 2015 Form 10-Q with
the Securities and Exchange Commission this week. Once filed, the
document will be available on both the SEC and Williams
websites.
Definitions of Non-GAAP Financial Measures
This news release includes certain financial measures – adjusted
EBITDA, adjusted income from continuing operations (“earnings”),
adjusted earnings per share, cash available for dividends, dividend
coverage ratio, distributable cash flow and cash distribution
coverage ratio – that are non-GAAP financial measures as defined
under the rules of the Securities and Exchange Commission.
Our segment performance measure, modified EBITDA, is defined as
net income (loss) before income tax expense, net interest expense,
equity earnings from equity-method investments, other net investing
income, depreciation and amortization expense, and accretion
expense associated with asset retirement obligations for
nonregulated operations. We also add our proportional ownership
share (based on ownership interest) of modified EBITDA of equity
investments.
Adjusted EBITDA further excludes items of income or loss that we
characterize as unrepresentative of our ongoing operations and may
include assumed business interruption insurance related to the
Geismar plant. Management believes these measures provide investors
meaningful insight into results from ongoing operations.
For Williams, cash available for dividends is defined as cash
received from its ownership in MLPs, cash received (used) by its
NGL & Petchem Services segment (other than cash for capital
expenditures) less interest, taxes and maintenance capital
expenditures associated with Williams and not the underlying MLPs.
We also calculate the ratio of cash available for dividends to the
total cash dividends paid (dividend coverage ratio). This measure
reflects Williams’ cash available for dividends relative to its
actual cash dividends paid.
For Williams Partners L.P., we define distributable cash flow as
adjusted EBITDA less maintenance capital expenditures, cash portion
of interest expense, income attributable to noncontrolling
interests and cash income taxes, plus WPZ restricted stock unit
non-cash compensation and certain other adjustments that management
believes affects the comparability of results. Adjustments for
maintenance capital expenditures and cash portion of interest
expense include our proportionate share of these items of our
equity-method investments.
For Williams Partners L.P., we also calculate the ratio of
distributable cash flow to the total cash distributed (cash
distribution coverage ratio). This measure reflects the amount of
distributable cash flow relative to our cash distribution. We have
also provided this ratio calculated using the most directly
comparable GAAP measure, net income.
This news release is accompanied by a reconciliation of these
non-GAAP financial measures to their nearest GAAP financial
measures. Management uses these financial measures because they are
accepted financial indicators used by investors to compare company
performance. In addition, management believes that these measures
provide investors an enhanced perspective of the operating
performance of the Company’s assets and the cash that the business
is generating.
Neither adjusted EBITDA, adjusted income from continuing
operations, cash available for dividends, nor distributable cash
flow are intended to represent cash flows for the period, nor are
they presented as an alternative to net income or cash flow from
operations. They should not be considered in isolation or as
substitutes for a measure of performance prepared in accordance
with United States generally accepted accounting principles.
About Williams
Williams (NYSE: WMB) is a premier provider of large-scale
infrastructure to connect North American natural gas and natural
gas products to growing demand for cleaner fuel and feedstocks.
Headquartered in Tulsa, Okla., Williams owns approximately 60
percent of Williams Partners L.P. (NYSE: WPZ), including the
general-partner interest. Williams Partners is an industry-leading,
large-cap master limited partnership with operations across the
natural gas value chain from gathering, processing and interstate
transportation of natural gas and natural gas liquids to petchem
production of ethylene, propylene and other olefins. With major
positions in top U.S. supply basins and also in Canada, Williams
Partners owns and operates more than 33,000 miles of pipelines
system wide – including the nation’s largest volume and fastest
growing pipeline – providing natural gas for clean-power
generation, home heating and industrial use. Williams Partners’
operations touch approximately 30 percent of U.S. natural gas.
www.williams.com
Forward-Looking Statements
The reports, filings, and other public announcements of The
Williams Companies, Inc. (Williams) and Williams Partners L.P.
(WPZ) may contain or incorporate by reference statements that do
not directly or exclusively relate to historical facts. Such
statements are "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. We make
these forward-looking statements in reliance on the safe harbor
protections provided under the Private Securities Litigation Reform
Act of 1995. You typically can identify forward-looking statements
by various forms of words such as “anticipates,” “believes,”
“seeks,” “could,” “may,” “should,” “continues,” “estimates,”
“expects,” “forecasts,” “intends,” “might,” “goals,” “objectives,”
“targets,” “planned,” “potential,” “projects,” “scheduled,” “will,”
“assumes,” “guidance,” “outlook,” “in service date” or other
similar expressions. These forward-looking statements are based on
management's beliefs and assumptions and on information currently
available to management and include, among others, statements
regarding:
- Expected levels of cash distributions
by WPZ with respect to general partner interests, incentive
distribution rights, and limited partner interests;
- The levels of dividends to Williams
stockholders;
- Future credit ratings of Williams and
WPZ;
- Amounts and nature of future capital
expenditures;
- Expansion and growth of our business
and operations;
- Financial condition and liquidity;
- Business strategy;
- Cash flow from operations or results of
operations;
- Seasonality of certain business
components;
- Natural gas, natural gas liquids, and
olefins prices, supply, and demand; and
- Demand for our services.
Forward-looking statements are based on numerous assumptions,
uncertainties and risks that could cause future events or results
to be materially different from those stated or implied in this
presentation. Many of the factors that will determine these results
are beyond our ability to control or predict. Specific factors that
could cause actual results to differ from results contemplated by
the forward-looking statements include, among others, the
following:
- Whether WPZ will produce sufficient
cash flows to provide the level of cash distributions we
expect;
- Whether Williams is able to pay current
and expected levels of dividends;
- Availability of supplies, market
demand, and volatility of prices;
- Inflation, interest rates, and
fluctuation in foreign exchange rates and general economic
conditions (including future disruptions and volatility in the
global credit markets and the impact of these events on customers
and suppliers);
- The strength and financial resources of
our competitors and the effects of competition;
- Whether we are able to successfully
identify, evaluate and execute investment opportunities;
- Our ability to acquire new businesses
and assets and successfully integrate those operations and assets
into our existing businesses as well as successfully expand our
facilities;
- Development of alternative energy
sources;
- The impact of operational and
developmental hazards and unforeseen interruptions;
- Costs of, changes in, or the results of
laws, government regulations (including safety and environmental
regulations), environmental liabilities, litigation, and rate
proceedings;
- Williams’ costs and funding obligations
for defined benefit pension plans and other postretirement benefit
plans;
- WPZ’s allocated costs for defined
benefit pension plans and other postretirement benefit plans
sponsored by its affiliates;
- Changes in maintenance and construction
costs;
- Changes in the current geopolitical
situation;
- Our exposure to the credit risk of our
customers and counterparties;
- Risks related to financing, including
restrictions stemming from debt agreements, future changes in
credit ratings as determined by nationally-recognized credit rating
agencies and the availability and cost of capital;
- The amount of cash distributions from
and capital requirements of our investments and joint ventures in
which we participate;
- Risks associated with weather and
natural phenomena, including climate conditions;
- Acts of terrorism, including
cybersecurity threats and related disruptions; and
- Additional risks described in our
filings with the Securities and Exchange Commission (SEC).
Given the uncertainties and risk factors that could cause our
actual results to differ materially from those contained in any
forward-looking statement, we caution investors not to unduly rely
on our forward-looking statements. We disclaim any obligations to
and do not intend to update the above list or announce publicly the
result of any revisions to any of the forward-looking statements to
reflect future events or developments.
In addition to causing our actual results to differ, the factors
listed above may cause our intentions to change from those
statements of intention set forth in this presentation. Such
changes in our intentions may also cause our results to differ. We
may change our intentions, at any time and without notice, based
upon changes in such factors, our assumptions, or otherwise.
Investors are urged to closely consider the disclosures and risk
factors in Williams’ and WPZ’s annual reports on Form 10-K filed
with the SEC on Feb. 25, 2015, and each of our quarterly reports on
Form 10-Q available from our offices or from our website at
www.williams.com.
Reconciliation of Income (Loss) from Continuing
Operations Attributable to The Williams Companies, Inc. to Adjusted
Income (UNAUDITED)
2014* 2015 (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 $
140 $ 99 $ 1,678 $ 193
$ 2,110 $ 70
Income (loss) from
continuing operations - diluted earnings per common share $ .20
$ .14 $ 2.22 $ .26
$ 2.91 $ .09
Adjustments:
Williams
Partners
Merger and transition related expenses $ — $ — $ 11 $ 30 $ 41 $ 32
Acquisition-related expenses — 2 13 1 16 — Impairment of certain
materials and equipment — 17 — 35 52 3 Share of impairment at
equity-method investment — — — — — 8 Contingency loss (gain), net
of legal costs — — — (143 ) (143 ) — Net gain related to partial
acreage dedication release — — (12 ) — (12 ) — Loss related to
compressor station fire 6 — — — 6 — Geismar Incident adjustment for
insurance and timing 54 96 — (71 ) 79 — Loss related to Geismar
Incident — — 5 5 10 1 Loss related to Opal incident — 6 — 2 8 1
Loss on sale of equipment — — — 7 7 — Estimated minimum volume
commitments [1] — —
47 (114 ) (67 ) 55
Total Williams Partners adjustments 60 121 64 (248 ) (3 )
100
Williams NGL &
Petchem Services
Bluegrass Pipeline project development costs 25 1 — (1 ) 25 —
Bluegrass Pipeline and Moss Lake write-off of previously
capitalized project development costs 70
— — —
70 — Total Williams NGL &
Petchem Services adjustments 95 1 — (1 ) 95 —
Other
WMB impact of ACMP transaction-related compensation expenses — — 19
— 19 — Transition-related costs — —
3 7
10 6 Total Other adjustments —
— 22 7
29 6 Adjustments included
in Modified EBITDA 155 122 86 (242 ) 121 106
Adjustments below
Modified EBITDA
Acquisition-related financing expenses - Williams Partners — 9 — —
9 2 Gain on remeasurement of equity-method investment in ACMP -
Other — — (2,522 ) (22 ) (2,544 ) — Gain associated with ACMP
equity issuance - Other — (4 ) 4 — — — Interest income on
receivable from sale of Venezuela assets - Other (13 ) (14 ) (14 )
— (41 ) — Allocation of adjustments to noncontrolling interests
(25 ) (36 ) 3
38 (20 ) (33 ) (38 ) (45 )
(2,529 ) 16 (2,596 ) (31 )
Total adjustments 117 77 (2,443 )
(226 ) (2,475 ) 75 Less tax effect for above items (47 ) (32 ) 925
41 887 (28 ) Adjustments for tax-related items [2] (20 )
14 (3 ) 2
(7 ) 5
Adjusted income from
continuing operations available to common stockholders [1] $
190 $ 158 $ 157 $ 10
$ 515 $ 122
Adjusted diluted
earnings per common share [1] $ .28 $ .23
$ .21 $ .01 $ .71 $ .16
Weighted-average shares - diluted (thousands) 688,904
700,696 752,064 751,898 723,641 752,028 (1) The third and
fourth quarter of 2014 have been recast to include adjustments to
normalize the quarterly impact of approximately $167 million of
annual minimum volume commitments related to ACMP that were
recorded during the fourth quarter. The recast impacts adjusted
diluted earnings per common share by an increase of $.06 in the
third quarter 2014 and a decrease of $.15 in the fourth quarter
2014, for a total year decrease of $.09. (2) The first
quarter of 2014 includes an unfavorable adjustment related to
completing the dropdown of certain Canadian operations to Williams
Partners. The second quarter of 2014 includes a favorable
adjustment to reflect taxes on undistributed earnings of certain
foreign operations that are no longer considered permanently
reinvested. Note: The sum of earnings per share for the
quarters may not equal the total earnings per share for the year
due to changes in the weighted-average number of common shares
outstanding. *Recast due to the merger between Williams
Partners L.P. and Access Midstream Partners, L.P. and the change to
Modified EBITDA as our measure of segment performance in first
quarter 2015.
Reconciliation
of Non-GAAP “Modified EBITDA” to Non-GAAP “Adjusted EBITDA”
(UNAUDITED) 2014* 2015 (Dollars in
millions) 1st Qtr 2nd Qtr 3rd Qtr 4th
Qtr Year 1st Qtr
Net
income (loss) $ 196 $ 127 $ 1,708 $ 308 $ 2,339 $ 13 (Income)
loss from discontinued operations — (4 ) — — (4 ) — Provision
(benefit) for income taxes 51 84 998 116 1,249 30 Interest expense
140 163 210 234 747 251 Equity (earnings) losses 48 (37 ) (66 ) (89
) (144 ) (51 ) (Gain) on remeasurement of equity-method investments
— — (2,522 ) (22 ) (2,544 ) — Other investing (income) loss (14 )
(18 ) (11 ) — (43 ) — Proportional Modified EBITDA of equity-method
investments 28 113 132 165 438 136 Depreciation and amortization
expenses 214 214 369 379 1,176 427 Accretion for asset retirement
obligations associated with nonregulated operations 3
6 4 5
18 6
Modified
EBITDA $ 666 $ 648
$ 822 $
1,096 $ 3,232 $
812 Williams Partners $ 708 $ 596 $ 843 $
1,097 $ 3,244 $ 817 Williams NGL & Petchem Services (100 ) (8 )
(4 ) (3 ) (115 ) (5 ) Other 58 60
(17 ) 2 103
—
Total Modified EBITDA $
666 $ 648 $
822 $ 1,096
$ 3,232 $ 812
Adjustments included in Modified EBITDA: Williams
Partners $ 60 $ 121 $ 64 $ (248 ) $ (3 ) $ 100 Williams NGL &
Petchem Services 95 1 — (1 ) 95 — Other —
— 22 7
29 6
Total Adjustments
included in Modified EBITDA $ 155
$ 122 $ 86
$ (242 ) $ 121
$ 106 Adjusted EBITDA:
Williams Partners $ 768 $ 717 $ 907 $ 849 $ 3,241 $ 917 Williams
NGL & Petchem Services (5 ) (7 ) (4 ) (4 ) (20 ) (5 ) Other
58 60 5
9 132 6
Total Adjusted EBITDA $ 821
$ 770 $ 908
$ 854 $ 3,353
$ 918 *Recast due to the merger between
Williams Partners L.P. and Access Midstream Partners, L.P. and the
change to Modified EBITDA as our measure of segment performance in
first quarter 2015.
Dividend Coverage Ratio (UNAUDITED) 2014 2015
(Dollars in millions, except per share
amounts)
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Year 1st Qtr
Distributions from
Pre-merger WPZ (accrued / “as declared” basis) $ 422 $ 431 $ 438 $
— $ 1,291 $ — Distributions from ACMP (accrued / “as declared”
basis) 33 78 83 — 194 — Distributions from WPZ (accrued / “as
declared” basis) — —
— 515 515
515 Total distributions from Pre-merger WPZ, ACMP,
and WPZ 455 509 521 515 2,000 515 Williams NGL & Petchem
Services adjusted cash flow (see below)* (1) (5 ) (9 ) (5 ) (5 )
(24 ) (5 ) Corporate interest (38 ) (50 )
(65 ) (54 ) (207 )
(64 ) Subtotal 412 450 451 456 1,769 446 WMB cash tax rate 3 % 3 %
— % — % 2 % -12 % WMB cash taxes (excludes cash taxes paid by WPZ)
(2) (13 ) (14 ) — — (27 ) 55 Corporate Capex (8 )
(18 ) (13 ) (14 )
(53 ) (6 ) WMB cash flow available for dividends $ 391 $ 418
$ 438 $ 442 $ 1,689 $ 495 - per share $ 0.57 $ 0.61 $ 0.59 $ 0.59 $
2.36 $ 0.66 WMB dividends paid (276 ) (291 )
(419 ) (426 ) (1,412 )
(434 ) Excess cash flow available after dividends $ 115 $
127 $ 19 $ 16 $ 277 $ 61 Dividend per share $ 0.4025 $
0.4250 $ 0.5600 $ 0.5700 $ 1.9575 $ 0.5800 Coverage ratio
(3) 1.42 1.44 1.05 1.04 1.20 1.14
Williams NGL &
Petchem Services Adjusted Cash Flow:*
Modified EBITDA (100 ) (8 ) (4 ) (3 ) (115 ) (5 ) Segment
adjustments 95 1 —
(1 ) 95 —
Adjusted EBITDA (5 ) (7 ) (4 ) (4 ) (20 ) (5 ) Less: Maintenance
Capex — (2 ) (1 )
(1 ) (4 ) — Adjusted cash flow
(5 ) (9 ) (5 ) (5 ) (24 ) (5 ) *Recast due to the change to
Modified EBITDA as our measure of segment performance in first
quarter 2015. Notes: (1) Targeted for dropdown in the
future. (2) A 2014 tax Net Operating Loss, due to bonus
depreciation, yielded a carryback refund from 2012. (3) WMB cash
flow available for dividends / WMB dividends paid.
WMB Net
Income to Adjusted EBITDA ($ in millions)
2 0 1 5
2 0 1 6 2 0 1 7 Low
Base High Low
Base High Low
Base High Net income from
continuing operations 925 1,050 1,175 1,275 1,435 1,595 1,650 1,825
2,000 Add: Net interest expense 1,095 1,095 1,095 1,225 1,220 1,215
1,335 1,325 1,315 Add: Provision for income taxes 380 420 460 495
545 595 585 645 705 Add: Depreciation & amortization (DD&A)
1,750 1,750 1,750 1,870 1,870 1,870 1,945 1,945 1,945 Less: Equity
earnings from investments (380 ) (385 ) (390 ) (495 ) (505 ) (515 )
(645 ) (660 ) (675 ) Add: Proportionate share of EBITDA from
investments 1 665 670 675 800 810 820 955 970 985 Adjustments 2
(90
)
(90
)
(90
)
- -
- - -
- Adjusted EBITDA $ 4,345 $ 4,510 $ 4,675 $
5,170 $ 5,375 $ 5,580 $ 5,825 $ 6,050 $ 6,275
2 0 1 5 2 0 1 6 2 0 1 7 1)
Proportionate Share of EBITDA from investments:
Low
Base High
Low Base High
Low Base High
Net income from continuing operations $ 380 $ 385 $ 390 $
495 $ 505 $ 515 $ 645 $ 660 $ 675 Add: Net interest expense 53 53
53 58 58 58 61 61 61 Add: Depreciation & amortization
(DD&A) 206 206 206 226 226 226 236 236 236 Other 26
26 26
21 21
21 13 13
13 Adjusted EBITDA from Equity
Investments $ 665 $ 670
$ 675 $ 800
$ 810 $ 820 $ 955
$ 970 $ 985
2 0 1 5 2 0 1 6 2 0 1 7 2)
Adjustments:
Low Base
High Low Base
High Low Base
High Geismar incident adjustment for
insurance and timing (WPZ) ($150 ) ($150 ) ($150 ) - - - - - - ACMP
retention expenses (WPZ) 35 35 35 - - - - - - ACMP
acquisition-related expenses 25
25 25 -
- - -
- -
Total Adjustments ($90 )
($90 ) ($90 ) -
- -
- -
-
WPZ Distributable Cash Flow and Cash
Distribution Coverage Ratio 2 0 1 5 2 0
1 6 2 0 1 7 Dollars in millions, except per L.P.
unit Low Base
High Low Base
High Low Base
High Adjusted EBITDA 1 $ 4,300 $ 4,465 $ 4,630 $
5,120 $ 5,315 $ 5,510 $ 5,750 $ 5,965 $ 6,180 Less: Maintenance
Capex 2 (430 ) (430 ) (430 ) (440 ) (440 ) (440 ) (440 ) (440 )
(440 ) Less: Interest Expense (cash portion) 3 (885 ) (885 ) (885 )
(1,000 ) (995 ) (990 ) (1,110 ) (1,100 ) (1,090 ) Less: Cash Taxes
(5 ) (5 ) (5 ) (10 ) (10 ) (10 ) (10 ) (10 ) (10 ) Less:
Noncontrolling Interests (135 ) (135 )
(135 ) (195 ) (195
) (195 ) (230 )
(230 ) (230 ) Distributable Cash Flow
Attributable to Partnership Operations $ 2,845 $ 3,010 $ 3,175 $
3,475 $ 3,675 $ 3,875 $ 3,960 $ 4,185 $ 4,410 Cash
Distributions (accrued) $ 3,010 $ 3,005 $ 2,995 $ 3,380 $ 3,440 $
3,515 $ 3,770 $ 3,925 $ 4,090 --- per L.P. Unit $ 3.40 $ 3.40 $
3.40 $ 3.64 $ 3.71 $ 3.78 $ 3.89 $ 4.04 $ 4.19 --- Annual growth
rate 7 % 9 % 11 % 7 % 9 % 11 % Cash Distribution Coverage
Ratio 0.95x 1.00x 1.06x 1.03x 1.07x 1.10x 1.05x 1.07x 1.08x
Notes: 1 A more detailed schedule
reconciling this non-GAAP measure is provided in this presentation.
2 Includes proportionate share of maintenance capex of equity
investments. 3 Includes proportionate share of interest expense of
equity investments.
WMB Dividend
Illustration and Coverage Calculation (Midpoint of guidance,
dollars in millions except per share amounts)
2015
2016 2017 Distributions from MLP $ 2,140 $
2,455 $ 2,805 Williams NGL & Petchem Services Adjusted Cash
Flow (see below) (5 ) - 25 Corporate Interest
(255 ) (260 ) (260 )
Subtotal 1,880 2,195 2,570 WMB Cash Tax Rate 1 -2.9 % 0.0 % 0.2 %
WMB Cash Taxes (excludes cash taxes paid by MLP) 55 - (5 )
Corporate Capex and Other (60 )
(60 ) (40 ) WMB Cash Flow Available for
Dividends $ 1,875 $ 2,135 $ 2,525 - per share $ 2.50 $ 2.83 $ 3.32
WMB Expected Dividends Paid (1,785 )
(2,020 ) (2,290 ) Excess
Cash Flow Available After Dividends $ 90 $ 115 $ 235
Coverage Ratio 2 1.05x 1.06x 1.10x Dividend Per Share $ 2.38
$ 2.68 $ 3.01 Annual Growth Rate 22 % 12.5 % 12.5 %
Williams NGL &
Petchem Services Adjusted Cash Flow:
Adjusted EBITDA (see reconciliation provided in this presentation)
(5 ) 5 30 Maintenance Capital -
(5 ) (5 ) Adjusted Cash Flow
(5 ) - 25
Notes: 1 Near-term tax rates are lower than longer-term
rates due to accelerated depreciation and deductions related to our
investment in ACMP. A 2014 tax Net Operating Loss, due to bonus
depreciation, will yield a carryback refund from 2012 and a
carryforward reducing taxes through 2017. The average tax rate for
2018–2019 is expected to be approximately 4%, which represents a
blended rate on MLP distributions, WMB NGL Petchem earnings, and
corporate interest expense as well other tax items impacting the
WMB corporate entity. 2 WMB Cash Flow Available for Dividends / WMB
Expected Dividends Paid.
WilliamsMedia Contact:Tom Droege,
918-573-4034orInvestor Contacts:John Porter,
918-573-0797orBrett Krieg, 918-573-4614
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