- Cash Flow from Operations is $685
Million for 2Q 2016; $1.464 Billion for Year-to-Date
- Continued Strong Financial Performance;
Significant Cost Reductions Achieved in 2Q
- Expects Williams Partners to Maintain
Quarterly Cash Distribution of $0.85 per Unit in 3Q 2016 or $3.40
Annualized through 2017
- Williams Partners Expects to Implement
Distribution Reinvestment Program (DRIP)
- Williams Intends to Reinvest
Approximately $1.7 Billion into Williams Partners through 2017,
Funded by Reduced Quarterly Cash Dividend
- Quarterly Cash Dividend at Williams
Reduced to $0.20 per Share in 3Q 2016 or $0.80 Annualized through
2017 with Expected Increases Resuming in 2018
- Planned Asset Sale on Track to Close
During the Second Half of 2016
- Strengthening Credit Profile;
Maintaining Commitment to Investment Grade Credit Ratings at
Williams Partners
Williams (NYSE: WMB) reported second quarter 2016 financial
results that included strong cash flow from operations, and also
announced actions it is taking to strengthen its position as the
premier provider of large-scale natural gas infrastructure by
maintaining a healthy credit profile, increasing its financial
flexibility and driving long-term growth.
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.
2016 2015 2016 2015
GAAP Measures Cash Flow from Operations $ 685
$ 814 $ 1,464 $ 1,483 Net income (loss) ($405 ) $ 114 ($470 ) $ 184
Net income (loss) per share ($0.54 ) $ 0.15 ($0.63 ) $ 0.24
Non-GAAP Measures (1) Adjusted income from continuing operations $
146 $ 110 $ 172 $ 232 Adjusted income from continuing operations
per share $ 0.19 $ 0.15 $ 0.23 $ 0.31 Adjusted EBITDA $ 1,065 $
1,017 $ 2,121 $ 1,935 Cash Available for Dividends $ 433 $ 441 $
862 $ 936 Dividend Coverage Ratio 0.90x 1.00x 0.90x 1.07x
(1) Schedules reconciling adjusted income
from continuing operations, adjusted EBITDA, Cash Available for
Dividends and Dividend Coverage Ratio (non-GAAP measures) are
available at www.williams.com and as an attachment to this news
release.
Second Quarter 2016 Financial Results
Due primarily to a $747 million non-cash pre-tax impairment
charge associated with held for sale Canadian operations, Williams
reported a second quarter 2016 unaudited net loss of $405 million,
an unfavorable change of $519 million from second quarter 2015. The
decrease also reflects the absence of $126 million of Geismar
insurance proceeds from the prior year, partially offset by lower
costs and expenses.
Year-to-date, Williams reported an unaudited net loss of $470
million, an unfavorable change of $654 million from the same
six-month reporting period in 2015, due primarily to the items
affecting the second quarter. The year-to-date decrease also
reflects $112 million associated with the first quarter impairment
of certain equity-method investments and higher interest expense,
partially offset by improved olefins margins and increased
contributions from Discovery’s Keathley Canyon Connector.
Williams reported second quarter 2016 Adjusted EBITDA of $1.065
billion, a $48 million increase over second quarter 2015. The
improvement is due primarily to a $57 million increase in Adjusted
EBITDA from the Williams Partners segment, partially offset by a $9
million decrease for the Williams NGL & Petchem Services
segment.
Year-to date, Williams reported Adjusted EBITDA of $2.121
billion, an increase of $186 million over the same six-month
reporting period in 2015. The improvement is due primarily to a
$200 million increase in Adjusted EBITDA from the Williams Partners
segment, partially offset by an $18 million decrease at the
Williams NGL & Petchem Services segment.
CEO Perspective
Alan Armstrong, Williams’ president and chief executive officer,
made the following comments:
“We own the premier natural gas focused asset base, and our
strong performance in the second quarter once again demonstrates
that our strategy positions Williams like no other company to
benefit from growing natural gas demand. In fact, we currently have
projects in negotiation or execution to add 7.6 Bcf per day of
capacity to markets served by Transco through 2020, which amounts
to 65 percent of Wood Mackenzie’s 5-year projected demand growth
for natural gas along Transco’s corridor. In 2018, we expect to
have twice as much fully-contracted capacity on Transco as we did
in 2010. Quarter after quarter, the significant advantages of
increased fee-based revenues are evident as we bring demand-driven
projects into service. Additionally, as we execute on current
projects, our assets continue to attract a steady number of
requests for new market area capacity.
“Early in 2016 we embarked on several actions, including cost
reduction initiatives, to address the realities of slower growth in
key supply areas. We executed quickly on these actions and are
already realizing the benefits of these efforts in the current
quarter and expect additional traction in subsequent quarters.
“As we move forward, our organization is fully aligned,
energized and focused on simplifying the way we operate and make
decisions. We are committed to executing on our projects, lowering
our overall risk, and driving stockholder value by delivering on
our growth strategy and strengthening our balance sheet.”
Business Segment Performance
Williams’ business segments for financial reporting are Williams
Partners, Williams NGL & Petchem Services and Other.
Williams Modified and Adjusted EBITDA
2Q 2016 2Q 2015 YTD
2016 YTD 2015 Amounts in millions
ModifiedEBITDA Adjust.
AdjustedEBITDA ModifiedEBITDA
Adjust.
AdjustedEBITDA ModifiedEBITDA
Adjust. AdjustedEBITDA
ModifiedEBITDA Adjust.
AdjustedEBITDA
Williams Partners $ 604 $ 461 $ 1,065 $ 1,053
($45 ) $ 1,008 $ 1,559 $ 566 $ 2,125 $ 1,870 $ 55 $ 1,925 Williams
NGL & Petchem (429 ) 417 (12 ) (3 ) - (3 ) (467 ) 441 (26 ) (8
) - (8 ) Other (1 ) 13
12 (4 ) 16
12 - 22
22 (4 ) 22
18 Total
$ 174
$ 891
$ 1,065 $
1,046 ($29
) $ 1,017
$ 1,092
$ 1,029 $
2,121 $ 1,858
$ 77
$ 1,935 Definitions of modified
EBITDA and adjusted EBITDA and schedules reconciling to net income
are included in this news release.
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
production.
Williams Partners reported second quarter 2016 Modified EBITDA
of $604 million, a decrease of $449 million from second quarter
2015. This decrease occurred due primarily to a $341 million
impairment charge associated with Williams Partners’ held-for-sale
Canadian operations, the absence in 2016 of $126 million in
business interruption proceeds from the 2013 Geismar Olefins plant
incident that were recorded in second quarter 2015, a $48 million
impairment charge related to a gathering system, and $34 million
lower fee-based revenues at Gulfstar One caused by a planned
shutdown to connect the Gunflint tieback and other activity by
producers on their wells. These were partially offset by lower
operating and G&A expenses despite additional assets being in
service, and other increases in fee-based revenue associated with
Transco expansion projects.
Year-to-date, Williams Partners reported Modified EBITDA of
$1.559 billion, a decrease of $311 million from the same six-month
reporting period in 2015. The decrease was due primarily to the
Canadian and gathering system impairments and absence of insurance
proceeds, partially offset by $75 million of higher olefins margins
reflecting a full six months of Geismar Olefins plant production,
$66 million higher joint-venture EBITDA primarily from Discovery
and lower operating and G&A costs.
Williams Partners reported second quarter 2016 Adjusted EBITDA
of $1.065 billion, a $57 million increase. The increase was largely
driven by a $55 million improvement in operating and G&A
costs.
Year-to-date, Williams Partners reported Adjusted EBITDA of
$2.125 billion, an increase of $200 million over the same six-month
reporting period in 2015. The increase in Adjusted EBITDA is due to
higher olefins margins, contributions from Discovery, and lower
operating and G&A costs.
Williams Partners’ complete financial results for second quarter
2016 are provided in the earnings news release issued today by
Williams Partners.
Williams NGL & Petchem Services
Williams NGL & Petchem Services segment includes an offgas
processing plant in Canada at CNRL’s Horizon upgrader that went
into service in first quarter 2016. The segment also includes a
propane dehydrogenation facility growth project under development
as well as petchem pipeline projects on the Gulf Coast.
Williams NGL & Petchem Services reported second quarter 2016
Modified EBITDA of $(429) million, a decrease of $426 million from
second quarter 2015. The decrease is due primarily to a $406
million impairment of held-for-sale Canadian operations and $11
million of project development costs.
Year-to-date, Williams NGL & Petchem Services reported
Modified EBITDA of $(467) million, a decrease of $459 million over
the same six-month reporting period in 2015. The decrease is due
primarily to the previously mentioned impairment and $45 million of
project development costs.
Williams Partners Expects to Implement Distribution
Reinvestment Program (DRIP); Williams Intends to Reinvest
Approximately $1.7 Billion into Williams Partners through 2017,
Funded by Reduced Quarterly Cash Dividend
Williams and Williams Partners announced immediate measures
designed to enhance values, strengthen their credit profile and
fund the development of a significant portfolio of fee-based growth
projects at Williams Partners, while maintaining flexibility as
they continue to review financial and operational plans.
Williams intends to reinvest approximately $1.7 billion into
Williams Partners through 2017, funded by reduced quarterly cash
dividends.
Williams plans to reinvest $500 million into Williams Partners
in 2016 including $250 million in the third quarter via a private
purchase of common units with the balance in the fourth quarter via
the DRIP. An additional $1.2 billion is planned to be reinvested in
2017 via the DRIP.
Williams expects the payment of a quarterly dividend of $0.20
per share to its common stockholders ($0.80 annually), reduced from
its current quarterly level of $0.64 ($2.56 annually), beginning
with the third quarter 2016 dividend payable in September 2016.
This dividend level will allow Williams to annually retain
approximately $1.3 billion that can be reinvested into Williams
Partners to enhance its ability to maintain its distribution and
increase its distribution coverage, while providing the partnership
with the flexibility to reduce debt and maintain its investment
grade ratings.
The DRIP is expected to be activated in the third quarter of
2016 and available for the quarterly cash distribution that will be
paid to limited partners in November of 2016. Williams Partners
expects the DRIP will enable limited partner unitholders to
reinvest all or a portion of the quarterly cash distributions they
would receive from their ownership of limited partner units to
purchase common units.
Ongoing Initiatives Continue to Strengthen Williams Partners’
Credit Profile
In addition to the implementation of the DRIP program, the
Company confirmed that:
- Williams and Williams Partners expect
to finalize the agreement on the sale of their Canadian business
during the third quarter of 2016, with expected combined proceeds
in excess of $1 billion, with Williams Partners’ share in excess of
$800 million, further reducing external capital-funding needs;
- Williams continues to make significant
progress on its ongoing cost reduction program, with $55 million in
lower adjusted costs at Williams Partners for second quarter 2016
versus the prior year period despite additional assets being in
service; additional cost-savings initiatives are planned in the
balance of the year;
- Williams Partners plans to access the
public equity market via Williams Partners’ ATM program or other
means and may access the public debt market as needed while
maintaining investment grade credit metrics.
Second-Quarter 2016 Materials to be Posted Shortly; Q&A
Webcast Scheduled for Tomorrow
Williams’ second quarter 2016 financial results package will be
posted shortly at www.williams.com.
Williams and Williams Partners plan to jointly host a Q&A
live webcast on Tuesday, Aug. 2 at 9:30 a.m. EDT. A limited number
of phone lines will be available at 800-723-6604. International
callers should dial 785-830-7977. The conference ID is 4335926. 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 2016 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 (“earnings”), adjusted earnings
per share, cash available for dividends, and dividend 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, impairments of equity investments and goodwill,
depreciation and amortization expense, and accretion expense
associated with asset retirement obligations for nonregulated
operations. We also add our proportional ownership share (based on
ownership interest) of modified EBITDA of equity-method
investments.
Adjusted EBITDA further excludes items of income or loss that we
characterize as unrepresentative of our ongoing operations 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.
Cash available for dividends is defined as cash received from
our ownership in MLPs, cash received (used) by the Williams 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 our cash available for dividends relative to actual cash
dividends paid.
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, or cash available for
dividends 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) may contain or incorporate by
reference statements that do not directly or exclusively relate to
historical facts. Such statements are “forward-looking statements”
within the meaning of Section 27A of the Securities Act of
1933, as amended (Securities Act), and Section 21E of the
Securities Exchange Act of 1934, as amended (Exchange Act). These
forward-looking statements relate to anticipated financial
performance, management’s plans and objectives for future
operations, business prospects, outcome of regulatory proceedings,
market conditions and other matters. We make these forward-looking
statements in reliance on the safe harbor protections provided
under the Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical facts,
included in this report that address activities, events or
developments that we expect, believe or anticipate will exist or
may occur in the future, are forward-looking statements.
Forward-looking statements can be identified by various forms of
words such as “anticipates,” “believes,” “seeks,” “could,” “may,”
“should,” “continues,” “estimates,” “expects,” “forecasts,”
“intends,” “might,” “goals,” “objectives,” “targets,” “planned,”
“potential,” “projects,” “scheduled,” “will,” “assumes,”
“guidance,” “outlook,” “in service date” or other similar
expressions. These forward-looking statements are based on
management’s beliefs and assumptions and on information currently
available to management and include, among others, statements
regarding:
- Expected levels of cash distributions
by Williams Partners L.P. (WPZ) with respect to general partner
interests, incentive distribution rights and limited partner
interests;
- Levels of dividends to Williams
stockholders;
- Future credit ratings of Williams and
WPZ;
- Amounts and nature of future capital
expenditures;
- Expansion 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
report. Many of the factors that will determine these results are
beyond our ability to control or predict. Specific factors that
could cause actual results to differ from results contemplated by
the forward-looking statements include, among others, the
following:
- Whether WPZ will produce sufficient
cash flows to provide the level of cash distributions, including
incentive distribution rights (IDRs), that we expect;
- Whether Williams is able to pay current
and expected levels of dividends;
- Whether we will be able to effectively
execute our financing plan including WPZ’s establishment of a
distribution reinvestment plan (DRIP) and the receipt of
anticipated levels of proceeds from planned asset sales;
- Availability of supplies, including
lower than anticipated volumes from third parties served by our
midstream business, and market demand;
- Volatility of pricing including the
effect of lower than anticipated energy commodity prices and
margins;
- Inflation, interest rates, 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 timely execute our capital projects and
other investment opportunities in accordance with our forecasted
capital expenditures budget;
- Our ability successfully expand our
facilities and operations;
- Development of alternative energy
sources;
- Availability of adequate insurance
coverage and the impact of operational and developmental hazards
and unforeseen interruptions;
- The impact of existing and future laws,
regulations, the regulatory environment, environmental liabilities,
and litigation as well as our ability to obtain permits and achieve
favorable rate proceeding outcomes;
- Williams’ costs and funding obligations
for defined benefit pension plans and other postretirement benefit
plans;
- 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 and physical damage
to our facilities;
- Acts of terrorism, including
cybersecurity threats and related disruptions;
- Additional risks described in our
filings with the SEC.
Given the uncertainties and risk factors that could cause our
actual results to differ materially from those contained in any
forward-looking statement, we caution investors not to unduly rely
on our forward-looking statements. We disclaim any obligations to
and do not intend to update the above list or announce publicly the
result of any revisions to any of the forward-looking statements to
reflect future events or developments.
In addition to causing our actual results to differ, the factors
listed above and referred to below may cause our intentions to
change from those statements of intention set forth in this report.
Such changes in our intentions may also cause our results to
differ. We may change our intentions, at any time and without
notice, based upon changes in such factors, our assumptions, or
otherwise.
Because forward-looking statements involve risks and
uncertainties, we caution that there are important factors, in
addition to those listed above, that may cause actual results to
differ materially from those contained in the forward-looking
statements. For a detailed discussion of those factors, see Part I,
Item 1A. Risk Factors in our Annual Report on Form 10-K filed with
the SEC on Feb. 26, 2016 and in Part II, Item 1A. Risk Factors in
our Quarterly Reports on Form 10-Q available from our offices or
from our website at www.williams.com.
Reconciliation of Income (Loss) Attributable to
The Williams Companies, Inc. to Adjusted Income (UNAUDITED)
2015 2016 (Dollars
in millions, except per-share amounts) 1st Qtr
2nd Qtr 3rd Qtr 4th Qtr
Year 1st Qtr 2nd Qtr
Year
Income (loss) attributable to The Williams Companies, Inc.
available to common stockholders $ 70 $
114 $ (40 ) $ (715 )
$ (571 ) $ (65 ) $ (405 ) $ (470
)
Income (loss) - diluted earnings (loss) per common
share $ .09 $ .15 $
(.05 ) $ (.95 ) $ (.76 ) $ (.09 )
$ (.54 ) $ (.63 )
Adjustments:
Williams
Partners
Estimated minimum volume commitments $ 55 $ 55 $ 65 $ (175 ) $ — $
60 64 $ 124 Severance and related costs — — — — — 25 — 25 Potential
rate refunds associated with rate case litigation — — — — — 15 — 15
Impairment of certain assets 3 24 2 116 145 — 389 389 ACMP Merger
and transition-related expenses 32 14 2 2 50 5 — 5 Constitution
Pipeline project development costs — — — — — — 8 8 Share of
impairment at equity-method investments 8 1 17 7 33 — — — Geismar
Incident adjustment for insurance and timing — (126 ) — — (126 ) —
— — Loss related to Geismar Incident 1 1 — — 2 — — — Loss
(recovery) related to Opal incident 1 — (8 ) 1 (6 ) — — — Gain on
extinguishment of debt — (14 ) — — (14 ) — — — Expenses associated
with strategic alternatives — —
1 1
2 —
— — Total Williams Partners
adjustments 100 (45 ) 79 (48 ) 86 105 461 566
Williams NGL &
Petchem Services
Canadian PDH facility project development costs — — — — — 34 11 45
Gain on sale of certain assets — — — — — (10 ) — (10 ) Impairment
of certain assets — —
— 64
64 — 406
406 Total Williams NGL &
Petchem Services adjustments — — — 64 64 24 417 441
Other
Expenses associated with strategic alternatives — 7 18 5 30 6 13 19
Other ACMP Merger and transition-related expenses 6 9 7 12 34 2 — 2
Severance and related costs — — — — — 1 — 1 Contingency gain — — —
(9 ) (9 ) — — — Accrued long-term charitable commitment —
— —
8 8
— — —
Total Other adjustments 6
16 25 16
63 9
13 22 Adjustments
included in Modified EBITDA 106 (29 ) 104 32 213 138 891 1,029
Adjustments below
Modified EBITDA
Impairment of equity-method investments - Williams Partners — — 461
898 1,359 112 — 112 Impairment of goodwill - Williams Partners — —
— 1,098 1,098 — — — Interest expense related to potential rate
refunds associated with rate case litigation - Williams Partners —
— — — — 3 — 3 Accelerated depreciation related to reduced salvage
value of certain assets - Williams Partners — — — 7 7 — — — ACMP
Acquisition-related financing expenses - Williams Partners 2 — — —
2 — — — Interest income on receivable from sale of Venezuela assets
- Other — (9 ) (18 ) — (27 ) (18 ) (18 ) (36 ) Allocation of
adjustments to noncontrolling interests (33 )
21 (212 )
(767 ) (991 ) (83 )
(154 ) (237 ) (31 ) 12 231 1,236 1,448
14 (172 ) (158 )
Total adjustments 75 (17 ) 335 1,268 1,661
152 719 871 Less tax effect for above items (28 ) 4 (129 ) (473 )
(626 ) (61 ) (202 ) (263 ) Adjustments for tax-related items (1) 5
9 1 (74 ) (59 ) — 34 34
Adjusted income available to
common stockholders $ 122 $ 110
$ 167 $ 6 $
405 $ 26 $ 146 $
172
Adjusted diluted earnings per common share $ .16
$ .15 $ .22
$ .01 $ .54 $ .03
$ .19 $ .23
Weighted-average
shares - diluted (thousands) 752,028 752,775 753,100 751,930
752,460 751,040 751,297 751,177 (1) The fourth quarter of
2015 includes an unfavorable adjustment related to the translation
of certain foreign-denominated unrecognized tax benefits. The
second quarter of 2016 includes a favorable adjustment related to
the reversal of a cumulative anticipatory foreign tax credit.
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)
2015 2016 (Dollars in millions)
1st Qtr 2nd Qtr 3rd Qtr
4th Qtr Year 1st Qtr 2nd Qtr
Year
Net income (loss) $ 13 $ 183 $ (173 ) $ (1,337 ) $ (1,314 )
$ (13 ) $ (505 ) $ (518 ) Provision (benefit) for income taxes 30
83 (65 ) (447 ) (399 ) 2 (145 ) (143 ) Interest expense 251 262 263
268 1,044 291 298 589 Equity (earnings) losses (51 ) (93 ) (92 )
(99 ) (335 ) (97 ) (101 ) (198 ) Impairment of equity-method
investments — — 461 898 1,359 112 — 112 Other investing (income)
loss - net — (9 ) (18 ) — (27 ) (18 ) (18 ) (36 ) Proportional
Modified EBITDA of equity-method investments 136 183 185 195 699
189 191 380 Impairment of goodwill — — — 1,098 1,098 — — —
Depreciation and amortization expenses 427 428 432 451 1,738 445
446 891 Accretion for asset retirement obligations associated with
nonregulated operations 6 9
6 7
28 7
8 15
Modified EBITDA
$ 812 $ 1,046
$ 999
$ 1,034 $ 3,891
$ 918 $ 174
$ 1,092 Williams
Partners $ 817 $ 1,053 $ 1,021 $ 1,112 $ 4,003 $ 955 $ 604 $ 1,559
Williams NGL & Petchem Services (5 ) (3 ) (5 ) (70 ) (83 ) (38
) (429 ) (467 ) Other — (4 )
(17 ) (8 )
(29 ) 1 (1 )
—
Total Modified EBITDA $
812 $ 1,046
$ 999 $
1,034 $ 3,891
$ 918 $ 174
$ 1,092 Adjustments
included in Modified EBITDA: Williams Partners $ 100 $
(45 ) $ 79 $ (48 ) $ 86 $ 105 $ 461 $ 566 Williams NGL &
Petchem Services — — — 64 64 24 417 441 Other 6
16 25
16 63
9 13
22
Total Adjustments included in Modified EBITDA
$ 106 $ (29
) $ 104
$ 32 $ 213
$ 138 $ 891
$ 1,029 Adjusted
EBITDA: Williams Partners $ 917 $ 1,008 $ 1,100 $ 1,064
$ 4,089 $ 1,060 $ 1,065 $ 2,125 Williams NGL & Petchem Services
(5 ) (3 ) (5 ) (6 ) (19 ) (14 ) (12 ) (26 ) Other 6
12 8
8 34 10
12 22
Total Adjusted EBITDA $ 918
$ 1,017 $
1,103 $ 1,066
$ 4,104 $ 1,056
$ 1,065
$ 2,121
Dividend Coverage Ratio (UNAUDITED)
2015 2016 (Dollars in millions, except per share amounts)
1st Qtr 2nd Qtr 3rd Qtr
4th Qtr Year 1st Qtr 2nd Qtr
Year
Distributions from WPZ (accrued / “as declared” basis) (3) $ 515
$ 513 $ 513
$ 513 $ 2,054 $ 513
$ 513 $ 1,026 Williams
NGL & Petchem Services adjusted cash flow (see below) (5 ) (3 )
(5 ) (6 ) (19 ) (14 ) (12 ) (26 ) Corporate interest (64 )
(64 ) (63 )
(64 ) (255 ) (66 )
(67 ) (133 ) Subtotal 446 446 445 443
1,780 433 434 867 WMB cash tax rate -12 % 0 % 0 % 0 % -3 % 0 % -1 %
-1 % WMB cash taxes (excludes cash taxes paid by WPZ) (1) 55 — — —
55 2 3 5 Corporate Capex (6 ) (5 )
(6 ) (7 )
(24 ) (6 ) (4 )
(10 ) WMB cash flow available for dividends $ 495 $ 441 $
439 $ 436 $ 1,811 $ 429 $ 433 $ 862 WMB dividends paid (434
) (442 ) (480 )
(480 ) (1,836 ) (480 )
(481 ) (961 ) Excess cash
flow available after dividends $ 61 $ (1 ) $ (41 ) $ (44 ) $ (25 )
$ (51 ) $ (48 ) $ (99 ) Dividend per share $ 0.5800 $ 0.5900
$ 0.6400 $ 0.6400 $ 2.4500 $ 0.6400 $ 0.6400 $ 1.2800
Coverage ratio (2)(3) 1.14 1.00 0.91 0.91 0.99 0.89 0.90 0.90
Williams NGL &
Petchem Services Adjusted Cash Flow:
Modified EBITDA (5 ) (3 ) (5 ) (70 ) (83 ) (38 ) (429 ) (467 )
Segment adjustments — —
— 64
64 24 417
441 Adjusted EBITDA (5 ) (3 ) (5
) (6 ) (19 ) (14 ) (12 ) (26 ) Less: Maintenance Capex —
— —
— —
— — —
Adjusted cash flow (5 ) (3 ) (5 ) (6 ) (19 ) (14 ) (12 ) (26
) Notes: (1) A refund was received in the first quarter of
2015 related to a 2014 tax Net Operating Loss, due to bonus
depreciation, that yielded a carryback refund from 2012. (2)
WMB cash flow available for dividends / WMB dividends paid.
(3) Cash distributions for the third and fourth quarters of 2015
and the first quarter of 2016 have been increased by $209 million,
$209 million, and $10 million, respectively, in order to exclude
the impact of the IDR waiver associated with the WPZ merger
termination fee from the determination of coverage ratios.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160801006155/en/
WilliamsMedia Contact:Keith Isbell,
918-573-7308orInvestor Contacts:John Porter,
918-573-0797orBrett Krieg, 918-573-4614
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