- 2Q 2015 Adjusted EBITDA is $1.02
Billion, Up 32% vs. 2Q 2014
- Williams Partners Fee-Based Revenues Up
$537 Million or 72% on Access Midstream Merger, Major Projects
Ramping Up
- Excluding Access Midstream Merger,
Williams Partners 2Q 2015 Fee-Based Revenue Up $130 Million, or
17%
- Reaffirming Williams Dividend Guidance
of $0.64 per Share in 3Q 2015 or $2.56 Annualized; $2.85 in 2016
with 10% to 15% Annual Dividend Growth through 2020
Williams (NYSE: WMB) today announced second-quarter 2015
adjusted EBITDA of $1.02 billion, compared with $770 million in
second quarter 2014, an increase of $247 million, or 32
percent.
The increase reflects higher adjusted EBITDA for Williams
Partners resulting from the benefit of the Access Midstream
acquisition and new projects placed in service. Partially
offsetting these increases were lower Geismar results from the
absence of assumed business interruption insurance proceeds and
lower NGL margins.
Year-to-date 2015, Williams reported $1.94 billion in adjusted
EBITDA, a $344 million, or 22 percent increase from the same period
last year. The increase in the year-to-date period was also driven
primarily by Williams Partners’ adjusted EBITDA, and the drivers
were similar to those discussed for the quarterly period.
Williams
Summary Financial Information 2Q YTD 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 2015 2014
(Unaudited) Adjusted EBITDA (1) $ 1,017 $ 770 $ 1,935 $
1,591 Adjusted income from continuing operations (1) $ 110 $
158 $ 232 $ 348 Adjusted income from continuing operations per
share (1) $ 0.15 $ 0.23 $ 0.31 $ 0.50 Net income $ 114 $ 103
$ 184 $ 243 Net income per share $ 0.15 $ 0.15 $ 0.24 $ 0.35
(1) Schedules reconciling 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 adjusted income from continuing operations of
$110 million, or $0.15 per share, in second quarter 2015, compared
with $158 million, or $0.23 per share, in second quarter 2014. The
decrease in adjusted income for second quarter 2015 is due
primarily to the absence in 2015 of assumed Geismar business
interruption proceeds, increased interest expense associated with
new debt issuances and higher depreciation expense due to
significant projects that were placed into service in 2014 and
2015, as well as declines in NGL margins driven by lower prices.
These decreases were partially offset by new fee revenues
associated with certain growth projects that were placed in service
in 2014 and 2015.
Year-to-date 2015, Williams reported $232 million in adjusted
income from continuing operations, a $116 million decrease from the
same period last year. The decrease in year-to-date adjusted income
was driven by the same factors that drove the decrease in quarterly
adjusted income.
Williams reported unaudited second quarter 2015 net income
attributable to Williams of $114 million, or $0.15 per share on a
diluted basis, compared with second quarter 2014 net income of $103
million, or $0.15 per share on a diluted basis. The $11 million
increase in net income attributable to Williams in second quarter
2015 was driven primarily by new fee-based revenues from Gulfstar
One and Transco expansion projects and increased insurance
recoveries associated with the Geismar incident. These increases
were partially offset by increased interest expense associated with
new debt issuances, higher depreciation expense due to significant
projects that were placed in service in 2014 and 2015, as well as
declines in NGL margins driven by lower prices.
Year-to-date 2015, Williams reported net income of $184 million,
or $0.24 per share on a diluted basis, compared with net income of
$243 million, or $0.35 per share, for the same period last year.
The year-to-date changes in net income were impacted by the same
factors as the quarterly period with the exception of year-to-date
Geismar insurance recoveries being lower in the current year and
the absence of equity losses in 2014 associated with the
discontinuance of the Bluegrass Pipeline project.
CEO Comment
Alan Armstrong, Williams’ president and chief executive officer,
made the following comments:
“Second quarter results further demonstrate the benefits from
our clearly defined strategy of capitalizing on the significant
natural gas market growth by connecting the best supplies to the
best markets. This strategy has and will continue to deliver
significant growth in our fee-based revenues.
“The large-scale infrastructure projects we recently placed into
service – including Transco expansions and Gulf of Mexico
facilities – generated significant fee-based revenues in the second
quarter and we expect those numbers to continue growing throughout
2015.
“As well, the Geismar plant ramped up in the second quarter and
is now online and consistently operating at or near its full
production capacity. We look forward to the significant
contributions the plant will make in the second half of the
year.”
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
2Q YTD Amounts in millions
2015 2014
2015 2014
Williams Partners $ 1,008 $ 717 $ 1,925
$ 1,485 Williams NGL & Petchem (3 ) (7 ) (8 ) (12 ) Other
12 60
18 118 Total
$ 1,017 $
770 $ 1,935
$ 1,591
Schedules reconciling adjusted EBITDA to
modified EBITDA and net income are attached to this news
release.
The first quarter and second quarter of
2014 include 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 second quarter 2015 adjusted EBITDA
of $1.01 billion, a $291 million, or 41 percent, increase from
second quarter 2014. The increase in adjusted EBITDA in second
quarter 2015 was driven by $537 million, or 72 percent, higher
fee-based revenues including assumed minimum volume commitments
compared with second quarter 2014. This increase reflects the
benefit of the Access Midstream acquisition and new fee-based
revenues from assets placed in service, including Gulfstar One and
Transco expansion projects. Excluding the Access Midstream
acquisition, Williams Partners second-quarter 2015 fee-based
revenue was up $130 million, or 17 percent. Geismar contributed
approximately $50 million of olefins margins in second quarter
2015. Additionally, the proportional EBITDA from non-consolidated
joint ventures increased $121 million for second quarter 2015
versus second quarter 2014, including $92 million from the addition
of Access Midstream’s joint ventures and $33 million driven by
Discovery’s Keathley Canyon Connector project ramp up.
Partially offsetting these increases were $210 million higher
operating and general and administrative expenses versus second
quarter 2014 primarily as a result of the Access Midstream
acquisition, the absence of $138 million of assumed business
interruption insurance proceeds related to the Geismar plant and
$56 million in lower NGL margins due primarily to NGL prices that
are at a 10-year low.
Year-to-date 2015, Williams Partners reported adjusted EBITDA of
$1.93 billion, a $440 million, or 30 percent, increase from the
same period last year. The year-to-date increase in adjusted EBITDA
was driven primarily by the same factors that drove the quarterly
results for adjusted EBITDA.
Williams Partners’ complete financial results for second quarter
2015 are provided in the earnings news release issued today by
Williams Partners.
Other Segment
The first and second quarters of 2014 include $51 million and
$53 million, respectively, 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.
Williams Strategic Alternatives Review
On June 21, 2015, Williams announced that it had received and
subsequently rejected an unsolicited proposal to be acquired in an
all-equity transaction contingent on the termination of Williams’
proposed acquisition of Williams Partners. Williams also announced
that its board of directors authorized a process to explore a range
of strategic alternatives, which could include, among other things,
a merger, a sale, or continuing to pursue its existing operating
and growth plan. The process is well underway. Depending on the
outcome of the board’s review, Williams anticipates that any
shareholder vote seeking approval of the pending Williams Partners
transaction would occur after the process is completed.
Guidance
Williams reaffirmed its previously announced plans to increase
its third-quarter 2015 dividend to $0.64, or $2.56 on an annualized
basis and $2.85 in 2016, with annual dividend growth thereafter of
approximately 10 percent to 15 percent through 2020. Dividend
guidance assumes completion of Williams’ acquisition of Williams
Partners public units as previously announced on May 13, 2015.
Williams is reaffirming adjusted EBITDA guidance for 2016-2018.
However, Williams is lowering full-year 2015 adjusted EBITDA
guidance by approximately 6 percent to a midpoint of $4.23 billion,
due primarily to the effects of lower commodity prices and an
extended Geismar ramp-up to near-full production in the second
quarter.
Williams’ current guidance is displayed in the following
table:
Williams - Financial outlook 2015
2016 2017
2018 Low Mid High
Low Mid High Low
Mid High Low Mid
High Adjusted EBITDA (1) $ 4,130 $ 4,230
$ 4,330 $ 5,170 $ 5,375 $ 5,580 $ 5,825
$ 6,050 $ 6,275 $ 6,500 $ 6,800 $ 7,100
Total Capital & Investment Expenditures $ 3,960 $ 4,275
$ 4,590 $ 3,300 $ 3,605 $ 3,910 $ 3,025 $ 3,325 $ 3,625 $ 1,300 $
1,450 $ 1,600
Dividends per Share $ 2.47 $ 2.85 $
3.21 $ 3.61
(1) Adjusted EBITDA is a non-GAAP measure.
Reconciliations to the most relevant measures included in GAAP are
attached to this news release.
Assumes completion of Williams'
transaction to acquire all the public outstanding units of Williams
Partners.
Commodity price assumptions are contained
in Williams' second quarter data book available at
www.williams.com
Second-Quarter 2015 Materials to be Posted Shortly; Q&A
Webcast Scheduled for Tomorrow
Williams’ second-quarter 2015 financial results package will be
posted shortly at www.williams.com. The package will include the
data book and analyst package.
The company and the partnership will host a conference call and
live webcast on Thursday, July 30, at 9:30 a.m. EDT. A limited
number of phone lines will be available at (888) 297-0360.
International callers should dial (719) 457-2603. 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 second 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.
Non-GAAP Measures
This news release may include 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 (loss) from discontinued
operations, 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 connecting 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 all of the
2 percent 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, 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. 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:
- Expected levels of cash distributions
by WPZ with respect to general partner interests, incentive
distribution rights, and limited partner interests;
- Levels of dividends to Williams
stockholders;
- The status, expected timing, and
expected outcome of Williams’ proposed acquisition of all of the
publicly held outstanding common units of WPZ in exchange for
shares of Williams common stock (Acquisition of WPZ Public
Units);
- The status, expected timing, and
expected outcome of the unsolicited proposal for Williams to be
acquired in an all-equity transaction (Unsolicited Proposal) and
Williams Board of Directors’ ongoing review of strategic
alternatives;
- 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;
- 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
news release. 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:
- Satisfaction of the conditions to the
completion of the Acquisition of WPZ Public Units, including
receipt of the approval of Williams’ stockholders;
- The results of Williams Board of
Directors’ ongoing review of strategic alternatives;
- 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 2nd
Qtr Year
Income (loss) from continuing
operations attributable to The Williams Companies, Inc. available
to common stockholders $ 140 $ 99
$ 1,678 $ 193
$ 2,110 $ 70 $ 114
$ 184
Income (loss) from continuing operations -
diluted earnings per common share $ .20 $
.14 $ 2.22 $ .26
$ 2.91 $ .09 $ .15
$ .24
Adjustments:
Williams
Partners
Merger and transition related expenses $ — $ — $ 11 $ 30 $ 41 $ 32
14 46 Acquisition-related expenses — 2 13 1 16 — — — Impairment of
certain assets — 17 — 35 52 3 24 27 Share of impairment at
equity-method investment — — — — — 8 1 9 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 — (126 ) (126
) Loss related to Geismar Incident — — 5 5 10 1 1 2 Loss related to
Opal incident — 6 — 2 8 1 — 1 Loss on sale of equipment — — — 7 7 —
— — Estimated minimum volume commitments — — 47 (114 ) (67 ) 55 55
110 Gain on extinguishment of debt —
— —
— — —
(14 ) (14 ) Total Williams
Partners adjustments 60 121 64 (248 ) (3 ) 100 (45 ) 55
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 — — — Other merger and transition-related expenses — — 3 7 10
6 9 15 Expenses associated with strategic alternatives —
— —
— —
— 7 7
Total Other adjustments —
— 22 7
29 6
16 22 Adjustments
included in Modified EBITDA 155 122 86 (242 ) 121 106 (29 ) 77
Adjustments below
Modified EBITDA
Acquisition-related financing expenses - Williams Partners — 9 — —
9 2 — 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 ) — (9 ) (9 ) Allocation of adjustments to noncontrolling
interests (25 ) (36 )
3 38
(20 ) (33 ) 21
(12 ) (38 ) (45 ) (2,529 ) 16 (2,596 ) (31 ) 12 (19 )
Total adjustments 117 77 (2,443 ) (226 ) (2,475 ) 75 (17 )
58 Less tax effect for above items (47 ) (32 ) 925 41 887 (28 ) 4
(24 ) Adjustments for tax-related items [1] (20 )
14 (3 )
2 (7 ) 5
9 14
Adjusted
income from continuing operations available to common
stockholders $ 190 $ 158
$ 157 $ 10 $ 515
$ 122 $ 110 $ 232
Adjusted diluted earnings per common share $ .28
$ .23 $ .21
$ .01 $ .71 $ .16
$ .15 $ .31
Weighted-average
shares - diluted (thousands) 688,904 700,696 752,064 751,898
723,641 752,028 752,775 752,403
(1)
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.
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 2nd
Qtr Year
Net income (loss) $ 196 $ 127
$ 1,708 $ 308 $ 2,339 $ 13 $ 183 $ 196 (Income) loss from
discontinued operations — (4 ) — — (4 ) — — — Provision (benefit)
for income taxes 51 84 998 116 1,249 30 83 113 Interest expense 140
163 210 234 747 251 262 513 Equity (earnings) losses 48 (37 ) (66 )
(89 ) (144 ) (51 ) (93 ) (144 ) (Gain) on remeasurement of
equity-method investments — — (2,522 ) (22 ) (2,544 ) — — — Other
investing (income) loss (14 ) (18 ) (11 ) — (43 ) — (9 ) (9 )
Proportional Modified EBITDA of equity-method investments 28 113
132 165 438 136 183 319 Depreciation and amortization expenses 214
214 369 379 1,176 427 428 855
Accretion for asset retirement obligations
associated with nonregulated operations
3 6
4 5 18
6 9
15
Modified EBITDA $ 666
$ 648 $
822 $ 1,096
$ 3,232 $ 812
$ 1,046 $
1,858 Williams Partners $ 708 $ 596 $ 843 $
1,097 $ 3,244 $ 817 $ 1,053 $ 1,870 Williams NGL & Petchem
Services (100 ) (8 ) (4 ) (3 ) (115 ) (5 ) (3 ) (8 ) Other
58 60 (17 )
2 103
— (4 ) (4 )
Total Modified EBITDA $ 666
$ 648 $ 822
$ 1,096
$ 3,232 $ 812
$ 1,046 $
1,858 Adjustments included in Modified
EBITDA: Williams Partners $ 60 $ 121 $ 64 $ (248 ) $ (3
) $ 100 $ (45 ) $ 55 Williams NGL & Petchem Services 95 1 — (1
) 95 — — — Other — —
22 7
29 6 16
22
Total Adjustments included
in Modified EBITDA $ 155
$ 122 $ 86
$ (242 ) $
121 $ 106 $
(29 ) $ 77
Adjusted EBITDA: Williams Partners $ 768 $ 717 $ 907
$ 849 $ 3,241 $ 917 $ 1,008 $ 1,925 Williams NGL & Petchem
Services (5 ) (7 ) (4 ) (4 ) (20 ) (5 ) (3 ) (8 ) Other 58
60 5
9 132
6 12
18
Total Adjusted EBITDA $ 821
$ 770 $
908 $ 854
$ 3,353 $ 918
$ 1,017 $
1,935 WMB Net Income to Adjusted
EBITDA
($ in millions)
2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8
Low Base High
Low Base High
Low Base High
Low Base High
Net income from continuing operations 634 709 784 $ 1,255 $
1,385 $ 1,515 $ 1,570 $ 1,720 $ 1,870 $ 1,735 $ 1,925 $ 2,115
Add: Net interest expense 1,065 1,060 1,055 1,120 1,115 1,110 1,185
1,175 1,165 1,325 1,315 1,305
Add: Provision for income taxes 330 360 390 620 700 780 815 900 985
930 1,050 1,170
Add: Depreciation & amortization (DD&A) 1,775 1,775 1,775
1,870 1,870 1,870 1,945 1,945 1,945 2,110 2,110 2,110
Less: Equity (earnings) / losses from investments (355 ) (360 )
(365 ) (495 ) (505 ) (515 ) (645 ) (660 ) (675 ) (755 ) (780 ) (805
) Add: Proportional EBITDA of equity-method investments 1 710 715
720 800 810 820 955 970 985 1,155 1,180 1,205
Adjustments 2 (29 ) (29 )
(29 ) - -
- - -
- -
- -
Adjusted EBITDA $ 4,130 $
4,230 $ 4,330 $ 5,170 $
5,375 $ 5,580 $ 5,825 $
6,050 $ 6,275 $ 6,500 $
6,800 $ 7,100
2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8
1) Proportional EBITDA of equity-method investments:
Low
Base High Low
Base High Low
Base High Low
Base High Net
income from continuing operations $ 355 $ 360 $ 365 $ 495 $ 505 $
515 $ 645 $ 660 $ 675 $ 755 $ 780 $ 805 Add: Net interest expense
44 44 44 58 58 58 61 61 61 56 56 56 Add: Depreciation &
amortization (DD&A) 232 232 232 226 226 226 236 236 236 287 287
287 Other 79 79
79 21 21
21 13
13 13 57
57 57
Adjusted EBITDA from Equity Investments $ 710
$ 715 $ 720
$ 800 $ 810 $ 820
$ 955 $ 970
$ 985 $ 1,155 $
1,180 $ 1,205
2 0 1
5 2 0 1 6 2 0 1 7 2 0 1 8 2) Adjustments:
Low Base High
Low Base High
Low Base High
Low Base High
Geismar incident adjustment for insurance and timing ($124 )
($124 ) ($124 ) - - - - - - - - - Merger and transition related
expenses 65 65 65 - - - - - - - - - Share of impairment at
equity-method investment 9 9 9 - - - - - - - - - Impairment of
certain materials and equipment 27 27 27 - - - - - - - - - Loss
related to Opal incident 1 1 1 - - - - - - - - - Gain on
extinguishment of debt (14 ) (14 ) (14 ) - - - - - - - - - Expenses
associated with strategic alternatives 7 7 7
- -
- -
- - -
- - Total
Adjustments ($29 ) ($29 )
($29 ) -
- -
- -
- - -
-
Cash Available for Dividend Guidance
assumes completion of Williams' acquisition of
Williams Partners' public units
(originally published May 13, 2015)
Cash Available for Dividend Guidance
($ and shares in millions except per
share data)
2016 2017
2018
Adjusted WMB EBITDA⁽¹⁾
$ 5,375 $ 6,050 $ 6,800 Less: Maintenance and Corporate Capex (500
) (480 ) (480 ) Less: Distributions to Noncontrolling Interest (195
) (230 ) (215 ) Less: Interest Expense (1,155 ) (1,215 ) (1,330 )
Less: Cash Taxes⁽²⁾ (10 ) (15 ) (15 )
Total
Cash Available for Dividend $ 3,515
$ 4,110 $ 4,760 Expected
Coverage >1.1x
----->
~1.2x
Dividends per Share $ 2.85
$ 3.21 $ 3.61 Annual
Growth Rate⁽³⁾ 15.6 % 12.5 % 12.5 % (1) A more detailed schedule
reconciling this non-GAAP measure is provided in this presentation.
(2) Includes taxes paid in Canada. (3) Reflects third and fourth
quarter 2015 dividends pro forma for the WPZ acquisition.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150729006698/en/
WilliamsMedia Contact:Tom Droege,
918-573-4034orInvestor Contacts:John Porter,
918-573-0797orBrett Krieg, 918-573-4614
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