- First Quarter 2015 Adjusted EBITDA is
$917 Million, Up 19% on Access Midstream Merger
- Distributable Cash Flow (DCF) of $646
Million, Up 11%
- Fee-Based Revenue Up $490 Million or
66% Primarily on Access Merger, Major Projects Placed into
Service
- Excluding Merger, Williams Partners 1Q
2015 Fee-Based Revenue Up $121 Million, or 16%
- Expect Geismar at Base Plant’s
Production Rate in April and May, Full Expanded Production in
June
- Reaffirming Adjusted EBITDA Guidance
for 2015-2017 with 2015 Expected to Be Near Low End of Range on
Extended Geismar Ramp-Up and Effects of Low Commodity Prices
- Reaffirming Williams Partners Per Unit
Distribution Guidance of $3.40 in 2015 with 7% to 11% Annual LP
Unit Distribution Growth Rate through 2017 with Growing
Coverage
- Williams Partners Analyst Day Set for
May 13
Williams Partners L.P. (NYSE: WPZ) today announced unaudited
financial results for first quarter 2015, during which time
Williams Partners and Access Midstream Partners, L.P. (formerly
NYSE: ACMP) merged to form one master limited partnership (MLP).
Financial information for periods prior to July 2014 – when
Williams (NYSE: WMB) acquired control of Access Midstream –
represents pre-merger Williams Partners and excludes Access
Midstream.
Summary Financial Information
1Q Amounts in millions, except coverage ratio amounts. All
income amounts attributable to Williams Partners L.P. 2015 2014
(Unaudited)
Williams Partners Adjusted EBITDA (1)
$917 $768 DCF attributable to partnership operations (1) $646 $582
Cash distribution coverage ratio (1) .89x 1.03x Net income $89 $352
(1) Adjusted EBITDA, distributable cash flow (DCF) and cash
distribution coverage ratio are non-GAAP measures. Financial
information for first quarter 2014 represents Williams Partners
L.P. on a basis that is prior to the merger with Access Midstream
Partners, L.P. Reconciliations to the most relevant measures
included in GAAP are attached to this news release.
Williams Partners reported first quarter 2015 adjusted EBITDA of
$917 million, a $149 million, or 19 percent, increase from first
quarter 2014.
The increase in adjusted EBITDA for first quarter 2015 is due
primarily to the contribution of approximately $314 million of
adjusted EBITDA from Access Midstream as a result of the merger,
$69 million higher adjusted EBITDA for the Atlantic-Gulf, and $46
million higher adjusted EBITDA from Northeast G&P. Partially
offsetting these increases were a $229 million decrease at NGL
& Petchem Services due primarily to $173 million of business
interruption proceeds included in adjusted EBITDA in 2014 and a $50
million decrease in the West due to lower NGL margins.
The increase in adjusted EBITDA in first quarter 2015 was also
driven by $490 million, or 66 percent, higher fee-based revenues
compared with first quarter 2014. The merger with Access Midstream
contributed $369 million and Atlantic-Gulf and Northeast G&P
improved $79 million and $43 million, respectively. Excluding the
Access Midstream merger, Williams Partners first-quarter 2015
fee-based revenue was up $121 million, or 16 percent. Additionally,
the proportional EBITDA from non-consolidated joint ventures
increased $90 million for first quarter 2015 versus first quarter
2014, primarily from the addition of Access Midstream’s joint
ventures.
Partially offsetting the increases described above, were lower
results from Williams Partners’ Geismar plant. The Geismar plant
was off-line for first quarter 2014; however, this period included
$173 million of business interruption insurance proceeds included
in adjusted EBITDA in 2014. Additionally, first quarter 2015
included $162 million higher operating and general and
administrative expenses versus first quarter 2014 primarily as a
result of the Access Midstream merger. Commodity margins totaled
$56 million, down $105 million due primarily to low NGL prices.
Williams Partners reported unaudited first quarter 2015 net
income of $89 million compared with $352 million in first quarter
2014. The decrease is primarily due to the absence of $125 million
of Geismar business interruption insurance proceeds received in
first quarter 2014 and a sharp decline in NGL margins, partially
offset by new fee-based revenues from Gulfstar One and Transco
expansion projects.
Distributable Cash Flow & Distributions
For first quarter 2015, Williams Partners generated $646 million
in distributable cash flow (DCF) attributable to partnership
operations, compared with $582 million in DCF attributable to
partnership operations in first quarter 2014.
The $64 million increase in DCF for the quarter was driven by
the $149 million net increase in adjusted EBITDA, partially offset
by higher interest expense and maintenance capital expenditures
primarily from the Access Midstream merger.
Williams Partners recently announced a regular quarterly cash
distribution of $0.85 per unit for its common unitholders. The cash
distribution is consistent with the partnership’s annual 2015
distribution guidance of $3.40 per unit announced on Feb. 18.
CEO Perspective
Alan Armstrong, chief executive officer of Williams Partners’
general partner, made the following comments:
“First quarter 2015 results showed strong fee-based revenue
growth from the Atlantic-Gulf and Northeast G&P operating areas
as well as from the merger with Access. We expect the second
quarter to be even higher with Gulfstar One and Keathley Canyon
Connector nearing full production and additional projects being
placed in service such as the Rockaway Lateral and the mainline
portion of Leidy Southeast.
“We’ve reaffirmed 2015-2017 guidance for Williams Partners, but
we do expect 2015 adjusted EBITDA and DCF to be near the low end of
the range due to the extended Geismar ramp-up and the effects of
low commodity prices on producers’ volumes and ethylene margins.
Our outlook for 2016 and 2017 remains unchanged and we are excited
about the rapid growth in DCF and coverage for the balance of the
year.
“Our strategy remains sound and our backlog of projects to serve
the demand side of the growing natural gas market continues to
build.”
Business Segment Performance
Williams Partners Adjusted EBITDA
Amounts in millions
1Q 2015 1Q 2014
Access Midstream (1) $314 N/A Atlantic-Gulf 335 266 NGL &
Petchem Services (2) 7 236 Northeast G&P 100 54 West 162 212
Other -1 - Total
$917 $768
Schedules reconciling adjusted EBITDA to modified EBITDA and net
income are attached to this news release.
(1) First quarter 2014 represents pre-merger Williams Partners
and excludes Access Midstream.
(2) First quarter 2014 includes $173 million in assumed business
interruption insurance proceeds related to the 2013 incident at the
Geismar plant.
Access Midstream
Access Midstream provides gathering, treating, and compression
services to producers under long term, fee-based contracts in
Pennsylvania, West Virginia, Ohio, Louisiana, Texas, Arkansas,
Oklahoma, and Kansas. Access Midstream also includes a non-operated
50 percent interest in the Delaware Basin gas gathering system in
the Mid-Continent region and a 49 percent interest in UEOM, a joint
project to develop infrastructure for the gathering, processing and
fractionation of natural gas and NGLs in the Utica Shale play in
Eastern Ohio. Additionally, Access Midstream operates 100 percent
of and owns an approximate average 45 percent interest in 11
natural gas gathering systems in the Marcellus Shale region.
Access Midstream reported adjusted EBITDA of $314 million for
first quarter 2015. Williams Partners’ results for first quarter of
2014 are on a pre-merger basis and exclude Access Midstream. For
first quarter 2014, Access Midstream reported $250 million of
adjusted EBITDA. The increase in adjusted EBITDA between years was
driven by higher fee-based volumes in the Utica, Eagle Ford and
Haynesville areas.
Atlantic-Gulf
Atlantic-Gulf includes the Transco interstate gas pipeline and a
41-percent interest in the Constitution interstate gas pipeline
development project, which we consolidate. The segment also
includes the partnership’s significant natural gas gathering and
processing and crude production handling and transportation in the
Gulf Coast region. These operations include a 51-percent interest
in Gulfstar One, a 50-percent interest in Gulfstream and a
60-percent interest in Discovery.
Atlantic-Gulf reported adjusted EBITDA of $335 million for first
quarter 2015, compared with $266 million for first quarter
2014.
Adjusted EBITDA for the quarter increased primarily due to $79
million higher fee-based revenues from both Gulfstar One and higher
transportation fee-based revenues on Transco associated with
expansion projects, partially offset by lower NGL margins.
NGL & Petchem Services
NGL & Petchem Services includes an 88.5 percent interest in
an olefins production facility in Geismar, La., along with a
refinery grade propylene splitter and pipelines in the Gulf Coast
region. This segment also includes midstream operations in Alberta
Canada, including an oil sands offgas processing plant near Fort
McMurray, 260 miles of NGL and olefins pipelines and an NGL/olefins
fractionation facility and butylene/butane splitter facility at
Redwater. This segment also includes the partnership’s energy
commodities marketing business, an NGL fractionator and storage
facilities near Conway, Kan. and a 50-percent interest in Overland
Pass Pipeline.
NGL & Petchem Services reported adjusted EBITDA of $7
million for first quarter 2015, compared with $236 million for
first quarter 2014.
The decrease in first-quarter 2015 adjusted EBITDA was primarily
due to lower Geismar results. The prior year period Geismar results
included $173 million of business interruption insurance proceeds
included in adjusted EBITDA in 2014. For first quarter of 2015, the
Geismar plant was off-line for most of the quarter and resumed
consistent operations in late March. Additionally, adjusted EBITDA
included $54 million lower commodity-related margins primarily at
the Canadian operations and higher operating expenses related to
the Geismar plant ramp-up.
Northeast G&P
Northeast G&P includes the partnership’s midstream gathering
and processing business in the Marcellus and Utica shale regions,
including Susquehanna Supply Hub and Ohio Valley Midstream, as well
as its 69-percent equity investment in Laurel Mountain Midstream,
and its 58.4-percent equity investment in Caiman Energy II. Caiman
Energy II owns a 50 percent interest in Blue Racer Midstream. This
segment is in the early stages of developing large-scale energy
infrastructure solutions for the Marcellus and Utica shale
regions.
Northeast G&P reported adjusted EBITDA of $100 million for
first quarter 2015, compared with adjusted EBITDA of $54 million
for first quarter 2014.
The improved results are primarily due to a $43 million increase
in fee-based revenues driven by 32 percent higher volumes primarily
at Susquehanna Supply Hub and higher results from our investments
in Blue Racer and Laurel Mountain Midstream. Additionally, Ohio
Valley Midstream realized $7 million higher adjusted EBITDA driven
by higher fee-based volumes and incremental new services.
West
West includes the partnership’s Northwest Pipeline interstate
gas pipeline system, as well as gathering, processing and treating
operations in Wyoming, the Piceance Basin and the Four Corners
area.
West reported adjusted EBITDA of $162 million for first quarter
2015, compared with $212 million for first quarter 2014.
Lower adjusted EBITDA for the quarter was due primarily to $40
million lower NGL margins from low NGL prices.
Guidance
Williams Partners is reaffirming its guidance for the years 2015
through 2017 provided on Feb. 18, 2015. We expect 2015 adjusted
EBITDA and distributable cash flow to be near the low end of the
range due to the extended Geismar ramp-up and the effects of low
commodity prices on volumes and margins.
Williams Partners’ current guidance for its earnings and capital
expenditures are displayed in the following table:
Williams Partners financial outlook and commodity price
assumptions 2015 2016
2017 (amounts in millions)
Low
Mid High Low Mid
High Low Mid High
Adjusted EBITDA $ 4,300 $ 4,465 $ 4,630 $ 5,120 $ 5,315 $ 5,510 $
5,750 $ 5,965 $ 6,180 Distributable Cash Flow (1) $ 2,845 $ 3,010 $
3,175 $ 3,475 $ 3,675 $ 3,875 $ 3,960 $ 4,185 $ 4,410 Total Cash
Distributions $ 3,010 $ 3,005 $ 2,995 $ 3,380 $ 3,440 $ 3,515 $
3,770 $ 3,925 $ 4,090 Cash Distributions per LP Unit $ 3.40 $ 3.40
$ 3.40 $ 3.64 $ 3.71 $ 3.78 $ 3.89 $ 4.04 $ 4.19 Cash Distribution
Coverage Ratio (1) .95x 1.00x 1.06x 1.03x 1.07x 1.10x 1.05x 1.07x
1.08x
Capital & Investment Expenditures Growth $
3,250 $ 3,525 $ 3,800 $ 2,650 $ 2,925 $ 3,200 $ 2,550 $ 2,850 $
3,150 Maintenance $ 430 $ 430 $ 430 $ 430 $ 430 $ 430 $ 430 $ 430 $
430
Total Capital & Investment Expenditures $ 3,680 $
3,955 $ 4,230 $ 3,080 $ 3,355 $ 3,630 $ 2,980 $ 3,280 $ 3,580
Commodity Price Assumptions Crude Oil - WTI ($ per
barrel) $ 45.00 $ 55.00 $ 65.00 $ 53.75 $ 65.00 $ 76.25 $ 57.50 $
70.00 $ 82.50 Natural Gas - Henry Hub ($/MMBtu) $ 2.50 $ 3.00 $
3.50 $ 2.75 $ 3.25 $ 3.75 $ 3.25 $ 3.75 $ 4.25 Composite NGL Barrel
($ per gallon) $ 0.360 $ 0.450 $ 0.520 $ 0.410 $ 0.490 $ 0.560 $
0.460 $ 0.550 $ 0.620 Crack Spread ($ per pound) (2) $ 0.297 $
0.350 $ 0.411 $ 0.323 $ 0.376 $ 0.443 $ 0.346 $ 0.395 $ 0.466
Ethylene spot - ($ per pound) $ 0.360 $ 0.430 $ 0.500 $ 0.395 $
0.465 $ 0.540 $ 0.430 $ 0.500 $ 0.580
Ethane - ($ per gallon)
$ 0.150 $ 0.190 $ 0.210 $ 0.170 $ 0.210 $ 0.230 $ 0.200 $ 0.250 $
0.270 Propane ($ per gallon) $ 0.500 $ 0.600 $ 0.700 $ 0.550 $
0.650 $ 0.750 $ 0.600 $ 0.700 $ 0.800 Propylene Spot ($ per pound)
$ 0.405 $ 0.475 $ 0.545 $ 0.415 $ 0.485 $ 0.555 $ 0.430 $ 0.500 $
0.570
(1) Distributable cash flow and cash distribution coverage ratio
are non-GAAP measures. Reconciliations to the most relevant
measures included in GAAP are attached to this news release.
(2) Crack spread is based on delivered U.S. Gulf Coast ethylene
and Mont Belvieu ethane.
Williams, Williams Partners Analyst Day Set for May
13
Williams and Williams Partners are scheduled to host their
annual Analyst Day event May 13. During the event, Williams'
management will give in-depth presentations covering all of
Williams' and Williams Partners L.P.'s energy infrastructure
businesses. The event is scheduled from 8:30 a.m. to approximately
2:30 p.m. EDT.
On the day of the event, www.williams.com will feature
presentation files for download along with a link to a live
webcast. A replay of the Analyst Day webcast will be available for
two weeks following the event.
First Quarter Materials to be Posted Shortly, Live Webcast
Scheduled for Tomorrow
Williams Partners’ first quarter 2015 financial results will be
posted shortly at www.williams.com. The information will include
the data book and analyst package.
Williams and Williams Partners L.P. will jointly host a
conference call and live webcast on Thursday, April 30, at 9:30
a.m. EDT. A limited number of phone lines will be available at
(800) 475-3716. International callers should dial (719) 457-2660. A
link to the live webcast, as well as replays of the webcast in both
streaming and downloadable podcast formats, will be available for
two weeks following the event at www.williams.com.
Form 10-Q
The company plans to file its first quarter 2015 Form 10-Q with
the Securities and Exchange Commission this week. Once filed, the
document will be available on both the SEC and Williams
websites.
Definitions of Non-GAAP Financial Measures
This news release includes certain financial measures – adjusted
EBITDA, distributable cash flow and cash distribution coverage
ratio – that are non-GAAP financial measures as defined under the
rules of the Securities and Exchange Commission.
Our segment performance measure, modified EBITDA, is defined as
net income (loss) before income tax expense, net interest expense,
equity earnings from equity-method investments, other net investing
income, depreciation and amortization expense, and accretion
expense associated with asset retirement obligations for
nonregulated operations. We also add our proportional ownership
share (based on ownership interest) of modified EBITDA of equity
investments.
Adjusted EBITDA further excludes items of income or loss that we
characterize as unrepresentative of our ongoing operations and may
include assumed business interruption insurance related to the
Geismar plant. Management believes these measures provide investors
meaningful insight into results from ongoing operations.
We define distributable cash flow as adjusted EBITDA less
maintenance capital expenditures, cash portion of interest expense,
income attributable to noncontrolling interests and cash income
taxes, plus WPZ restricted stock unit non-cash compensation and
certain other adjustments that management believes affects the
comparability of results. Adjustments for maintenance capital
expenditures and cash portion of interest expense include our
proportionate share of these items of our equity-method
investments.
We also calculate the ratio of distributable cash flow to the
total cash distributed (cash distribution coverage ratio). This
measure reflects the amount of distributable cash flow relative to
our cash distribution. We have also provided this ratio calculated
using the most directly comparable GAAP measure, net income.
This news release is accompanied by a reconciliation of these
non-GAAP financial measures to their nearest GAAP financial
measures. Management uses these financial measures because they are
accepted financial indicators used by investors to compare company
performance. In addition, management believes that these measures
provide investors an enhanced perspective of the operating
performance of the Partnership's assets and the cash that the
business is generating.
Neither adjusted EBITDA nor distributable cash flow are intended
to represent cash flows for the period, nor are they presented as
an alternative to net income or cash flow from operations. They
should not be considered in isolation or as substitutes for a
measure of performance prepared in accordance with United States
generally accepted accounting principles.
About Williams Partners
Williams Partners (NYSE: WPZ) is an industry-leading, large-cap
natural gas infrastructure master limited partnership with a strong
growth outlook and major positions in key U.S. supply basins and
also in Canada. Williams Partners has operations across the natural
gas value chain from gathering, processing and interstate
transportation of natural gas and natural gas liquids to petchem
production of ethylene, propylene and other olefins. Williams
Partners owns and operates more than 33,000 miles of pipelines
system wide – including the nation’s largest volume and fastest
growing pipeline – providing natural gas for clean-power
generation, home heating and industrial use. Williams Partners’
operations touch approximately 30 percent of U.S. natural gas.
Tulsa, Okla.-based Williams (NYSE: WMB), a premier provider of
large-scale North American natural gas infrastructure, owns 60
percent of Williams Partners, including the general-partner
interest. www.williams.com
Forward-Looking Statements
The reports, filings, and other public announcements of The
Williams Companies, Inc. (Williams) and Williams Partners L.P.
(WPZ) may contain or incorporate by reference statements that do
not directly or exclusively relate to historical facts. Such
statements are "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. We make
these forward-looking statements in reliance on the safe harbor
protections provided under the Private Securities Litigation Reform
Act of 1995. You typically can identify forward-looking statements
by various forms of words such as “anticipates,” “believes,”
“seeks,” “could,” “may,” “should,” “continues,” “estimates,”
“expects,” “forecasts,” “intends,” “might,” “goals,” “objectives,”
“targets,” “planned,” “potential,” “projects,” “scheduled,” “will,”
“assumes,” “guidance,” “outlook,” “in service date” or other
similar expressions. These forward-looking statements are based on
management's beliefs and assumptions and on information currently
available to management and include, among others, statements
regarding:
- Expected levels of cash distributions
by WPZ with respect to general partner interests, incentive
distribution rights, and limited partner interests;
- The levels of dividends to Williams
stockholders;
- Future credit ratings of Williams and
WPZ;
- Amounts and nature of future capital
expenditures;
- Expansion and growth of our business
and operations;
- Financial condition and liquidity;
- Business strategy;
- Cash flow from operations or results of
operations;
- Seasonality of certain business
components;
- Natural gas, natural gas liquids, and
olefins prices, supply, and demand; and
- Demand for our services.
Forward-looking statements are based on numerous assumptions,
uncertainties and risks that could cause future events or results
to be materially different from those stated or implied in this
presentation. Many of the factors that will determine these results
are beyond our ability to control or predict. Specific factors that
could cause actual results to differ from results contemplated by
the forward-looking statements include, among others, the
following:
- Whether WPZ will produce sufficient
cash flows to provide the level of cash distributions we
expect;
- Whether Williams is able to pay current
and expected levels of dividends;
- Availability of supplies, market
demand, and volatility of prices;
- Inflation, interest rates, and
fluctuation in foreign exchange rates and general economic
conditions (including future disruptions and volatility in the
global credit markets and the impact of these events on customers
and suppliers);
- The strength and financial resources of
our competitors and the effects of competition;
- Whether we are able to successfully
identify, evaluate and execute investment opportunities;
- Our ability to acquire new businesses
and assets and successfully integrate those operations and assets
into our existing businesses as well as successfully expand our
facilities;
- Development of alternative energy
sources;
- 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.
Williams
Partners L.P. Reconciliation of Non-GAAP Measures
(UNAUDITED)(UNAUDITED) 2014* 2015 (Dollars in
millions, except coverage ratios) 1st Qtr 2nd Qtr
3rd Qtr 4th Qtr Year 1st Qtr
Williams Partners L.P.
Reconciliation of GAAP "Net Income" to
Non-GAAP "Modified EBITDA", "Adjusted EBITDA", and "Distributable
cash flow”
Net income $ 352 $ 223 $ 247 $ 462 $ 1,284 $ 112 Provision
(benefit) for income taxes 8 5 10 6 29 3 Interest expense 106 126
154 176 562 192 Equity (earnings) losses (23 ) (32 ) (85 ) (88 )
(228 ) (51 ) Other investing (income) loss — (1 ) — (1 ) (2 ) (1 )
Proportional Modified EBITDA of equity-method investments 54 62 150
165 431 136 Depreciation and amortization expenses 208 207 364 372
1,151 419 Accretion for asset retirement obligations associated
with nonregulated operations 3 6
3 5 17 7 Modified
EBITDA 708 596 843 1,097 3,244 817 Adjustments Estimated
minimum volume commitments — — 47 (114 ) (67 ) 55
Acquisition-related expenses — 2 13 1 16 — Merger and transition
related expenses — — 11 30 41 32 Share of impairment at
equity-method investment — — — — — 8 Geismar Incident adjustment
for insurance and timing 54 96 — (71 ) 79 — Loss related to Geismar
Incident — — 5 5 10 1 Impairment of certain materials and equipment
— 17 — 35 52 3 Contingency loss (gain), net of legal costs — — —
(143 ) (143 ) — Net gain related to partial acreage dedication
release — — (12 ) — (12 ) — Loss related to compressor station fire
6 — — — 6 — Loss related to Opal incident — 6 — 2 8 1 Loss on sale
of equipment — — —
7 7 — Total EBITDA adjustments
60 121 64 (248 )
(3 ) 100 Adjusted EBITDA $ 768 $ 717
$ 907 $ 849 $ 3,241 $ 917
Maintenance capital expenditures (1) (54 ) Interest expense (cash
portion) (2) (204 ) Cash taxes (1 ) Income attributable to
noncontrolling interests (23 ) WPZ restricted stock unit non-cash
compensation 7 Plymouth incident adjustment 4
Distributable cash flow attributable to Partnership Operations
646 Total cash distributed $ 725
Coverage ratios: Distributable cash flow attributable to
partnership operations divided by Total cash distributed
0.89 Net income divided by Total cash distributed
0.15 *Recast due to the merger between Williams
Partners L.P. and Access Midstream Partners, L.P. and the change to
Modified EBITDA as our measure of segment performance in first
quarter 2015. Notes:
(1) Includes proportionate share of
maintenance capital expenditures of equity investments.
(2) Includes proportionate share of
interest expense of equity investments.
Williams
Partners L.P. Reconciliation of Non-GAAP “Modified EBITDA”
to Non-GAAP “Adjusted EBITDA” (UNAUDITED) 2014* 2015
(Dollars in millions) 1st Qtr 2nd Qtr
3rd Qtr 4th Qtr Year 1st Qtr
Modified EBITDA: Access Midstream $ — $ (2 ) $ 254 $
390 $ 642 $ 228 Northeast G&P 48 59 80 208 395 90 Atlantic-Gulf
266 270 271 258 1,065 335 West 212 199 224 188 823 161 NGL &
Petchem Services 182 72 17 53 324 6 Other — (2 )
(3 ) — (5 ) (3 )
Total
Modified EBITDA $ 708 $ 596
$ 843 $ 1,097 $
3,244 $ 817
Adjustments:
Access
Midstream
Acquisition-related expenses $ — $ 2 $ 13 $ 1 $ 16 $ — Merger and
transition costs — — 8 29 37 30 Loss on sale of equipment — — — 7 7
— Impairment of certain materials and equipment — — — 12 12 1
Estimated minimum volume commitments — —
47 (114 ) (67 ) 55 Total
Access Midstream adjustments — 2 68 (65 ) 5 86
Northeast
G&P
Share of impairment at equity-method investment — — — — — 8
Contingency (gain) loss, net of legal costs — — — (143 ) (143 ) —
Loss related to compressor station fire 6 — — — 6 — Net gain
related to partial acreage dedication release — — (12 ) — (12 ) —
Impairment of certain materials and equipment — 17
— 13 30 2
Total Northeast G&P adjustments 6 17 (12 ) (130 ) (119 )
10
Atlantic-Gulf
Impairment of certain equipment — — —
10 10 — Total
Atlantic-Gulf adjustments — — — 10 10 —
West
Loss related to Opal incident — 6 —
2 8 1 Total West
adjustments — 6 — 2 8 1
NGL & Petchem
Services
Loss related to Geismar Incident — — 5 5 10 1 Geismar Incident
adjustment for insurance and timing 54 96
— (71 ) 79 — Total
NGL & Petchem Services adjustments 54 96 5 (66 ) 89 1
Other
WPZ conflicts committee costs associated with merger —
— 3 1 4
2 Total Other adjustments — — 3 1 4 2
Total Adjustments $
60 $ 121 $ 64
$ (248 ) $ (3 ) $
100 Adjusted EBITDA: Access Midstream $
— $ — $ 322 $ 325 $ 647 $ 314 Northeast G&P 54 76 68 78 276 100
Atlantic-Gulf 266 270 271 268 1,075 335 West 212 205 224 190 831
162 NGL & Petchem Services 236 168 22 (13 ) 413 7 Other
— (2 ) — 1 (1 ) (1
)
Total Adjusted EBITDA $ 768 $
717 $ 907 $ 849
$ 3,241 $ 917
*Recast due to the merger between Williams Partners L.P. and Access
Midstream Partners, L.P. and for the change to Modified EBITDA as
our measure of segment performance in first quarter 2015.
Pre-merger Williams Partners
L.P.
Reconciliation of Non-GAAP
Measures
(UNAUDITED) 2014 1st Qtr 2nd Qtr 3rd
Qtr 4th Qtr Year
Williams Partners
L.P. Reconciliation of Non-GAAP “Distributable cash flow” to
GAAP “Net income” Net income $ 352 $ 234 $ 218 $ 300 $ 1,104
Income attributable to noncontrolling interests — (2 ) (1 ) (7 )
(10 ) Depreciation and amortization 208 207 209 231 855 Non-cash
amortization of debt issuance costs included in interest expense 4
3 4 4 15 Equity earnings from investments (23 ) (32 ) (36 ) (41 )
(132 ) Allocated reorganization-related costs — — — — — Impairment
of certain materials and equipment — 17 — 23 40 Loss related to
Geismar Incident — — 5 5 10 Geismar Incident adjustment for
insurance and timing 54 96 — (71 ) 79 Contingency (gain) loss, net
of legal costs — — — (143 ) (143 ) Reimbursements from Williams
under omnibus agreements 3 4 1 3 11 Loss related to Opal incident —
6 — 2 8 Plymouth incident adjustment — 3 3 6 12 Canadian income tax
— 4 8 28 40 Income related to partial acreage dedication release —
— (12 ) — (12 ) Maintenance capital expenditures (36 )
(90 ) (103 ) (126 ) (355 )
Distributable cash flow excluding equity investments 562 450 296
214 1,522 Plus: Equity investments cash distributions to Williams
Partners L.P. 43 54 71
52 220 Distributable cash flow
605 504 367 266 1,742 Less: Pre-partnership distributable cash flow
23 — — —
23 Distributable cash flow attributable to
partnership operations $ 582 $ 504 $ 367 $ 266
$ 1,719 Total cash distributed $ 566 $ 577 $
587 $ — $ 1,730
Coverage ratios: Distributable cash
flow attributable to partnership operations divided by Total cash
distributed 1.03 0.87 0.63
NA NA Net income divided by Total cash distributed
0.62 0.41 0.37 NA NA
WPZ Net Income to Adjusted EBITDA
2015
2016
2017
(Dollars in millions)
Low Base High Low Base
High Low Base High Net income
from continuing operations $ 1,555 $ 1,720 $ 1,885 $ 2,025 $ 2,225
$ 2,425 $ 2,465 $ 2,690 $ 2,915 Add: Net interest expense 855 855
855 965 960 955 1,075 1,065 1,055 Add: Provision for income taxes
15 15 15 25 25 25 25 25 25 Add: Depreciation & amortization
(DD&A) 1,705 1,705 1,705 1,800 1,800 1,800 1,875 1,875 1,875
Less: Equity earnings from investments (380 ) (385 ) (390 ) (495 )
(505 ) (515 ) (645 ) (660 ) (675 ) Add: Proportionate share of
EBITDA from investments 1 665 670 675 800 810 820 955 970 985
Adjustments 2 (115 ) (115 ) (115
) - - -
- - -
Adjusted EBITDA $ 4,300 $ 4,465 $ 4,630 $ 5,120 $ 5,315 $ 5,510 $
5,750 $ 5,965 $ 6,180
2015
2016
2017
1) Proportionate Share of EBITDA from investments:
Low
Base High Low Base High
Low Base High Net income from
continuing operations $ 380 $ 385 $ 390 $ 495 $ 505 $ 515 $ 645 $
660 $ 675 Add: Net interest expense 53 53 53 58 58 58 61 61 61 Add:
Depreciation & amortization (DD&A) 206 206 206 226 226 226
236 236 236 Other 26 26
26 21 21
21 13 13
13 Adjusted EBITDA from Equity Investments $
665 $ 670 $ 675 $ 800
$ 810 $ 820 $ 955
$ 970 $ 985
2015
2016
2017
2) Adjustments:
Low Base High Low
Base High Low Base High
Geismar incident adjustment for insurance and timing ($150 ) ($150
) ($150 ) - - - - - - ACMP acquisition-related expenses 35
35 35 -
- - -
- - Total
Adjustments ($115 ) ($115 )
($115 ) - -
- - -
-
WPZ Distributable Cash Flow and Cash
Distribution Coverage Ratio
2015
2016
2017
Dollars in millions, except per L.P. unit Low
Base High Low Base High
Low Base High Adjusted 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.
Williams Partners L.P.Media Contact:Tom Droege,
918-573-4034orInvestor Contacts:John Porter,
918-573-0797orBrett Krieg, 918-573-4614
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