Expects to Maintain Current Cash
Distribution Level Through 2017
Provides Financial Update and Announces
Actions to Strengthen Credit Profile and Fund Fee-based Growth
Portfolio
- Cash Flow from Operations is $741
Million for 2Q 2016; $1.665 Billion Year-to-Date, Up Approximately
12% over First Half 2015
- Continued Strong Financial Performance;
Significant Cost Reductions Achieved in 2Q
- Expects to Maintain Quarterly Cash
Distribution of $0.85 per Unit or $3.40 Annualized through
2017
- Expects to Implement Distribution
Reinvestment Program (DRIP)
- Williams Intends to Reinvest
Approximately $1.7 Billion into Williams Partners through 2017
- Planned Asset Sale on Track to Close
During the Second Half of 2016
- Strengthening Credit Profile;
Maintaining Commitment to Investment Grade Credit Ratings
Williams Partners L.P. (NYSE: WPZ) today reported second quarter
2016 financial results that included strong cash flow from
operations and affirmed the partnership intends to maintain its
quarterly cash distribution of $0.85 per unit, or $3.40 annualized,
through 2017 with planned distribution growth beyond. Additionally,
the partnership 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.
Summary Financial Information
2Q YTD Amounts in millions, except per-unit amounts.
Per unit amounts are reported on a diluted basis. All amounts are
attributable to Williams Partners L.P. 2016
2015 2016 2015
GAAP Measures Cash Flow from Operations $ 741 $ 796 $
1,665 $ 1,493 Net income (loss) ($90 ) $ 300 ($40 ) $ 389 Net
income (loss) per common unit ($0.49 ) $ 0.14 ($0.74 ) ($0.16 )
Non-GAAP Measures (1) Adjusted EBITDA $ 1,065 $ 1,008 $
2,125 $ 1,925 DCF attributable to partnership operations $ 737 $
701 $ 1,476 $ 1,347 Cash distribution coverage ratio 1.02 0.97 1.02
0.93
(1) Adjusted EBITDA, distributable cash
flow (DCF) and cash distribution coverage ratio are non-GAAP
measures. Reconciliations to the most relevant measures included in
GAAP are attached to this news release
Second Quarter 2016 Financial Results
Due primarily to a $341 million non-cash pre-tax impairment
charge associated with held-for-sale Canadian operations, Williams
Partners reported second quarter 2016 unaudited net loss of $90
million, a $390 million unfavorable change from second quarter 2015
net income. The decrease also reflects the absence of $126 million
of Geismar insurance proceeds from the prior year and a $48 million
impairment charge in 2016 related to a gathering system. These
changes were partially offset by lower costs and expenses, as well
as a foreign tax provision impact associated with the Canadian
impairment charge.
Year-to-date Williams Partners reported unaudited net loss of
$40 million, an unfavorable change of $429 million for the same
six-month reporting period in 2015 due primarily to the items
affecting the second quarter. The year-to-date decrease also
reflects 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 Partners reported second quarter 2016 Adjusted EBITDA
of $1.065 billion, a $57 million increase over second quarter 2015.
The increase is due primarily to $55 million lower G&A and
operating expenses, despite additional assets being in service.
Fee-based revenues, which were steady versus second quarter 2015,
were impacted by a $34 million reduction at Gulfstar One resulting
from a planned shutdown to connect the Gunflint tieback, partially
offset by higher revenues from Transco expansion projects.
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 is due primarily to $75
million of higher olefins margins, $61 million of higher fee-based
revenues, $61 million of lower operating and G&A expenses and
$52 million of higher proportional EBITDA from joint ventures.
Partially offsetting these increases were certain unfavorable items
including a $15 million change in foreign currency exchange gains
and losses.
Distributable Cash Flow and Distributions
For second quarter 2016, Williams Partners generated $737
million in distributable cash flow (DCF) attributable to
partnership operations, compared with $701 million in DCF
attributable to partnership operations for the same period last
year. The $36 million increase in DCF for the quarter was driven by
a $57 million increase in Adjusted EBITDA, partially offset by $38
million higher interest expense. The cash distribution coverage was
1.02x versus 0.97x in second quarter 2015.
Year-to-date, Williams Partners generated $1.476 billion in DCF,
an increase of $129 million in DCF over the same six-month
reporting period in 2015. The increase was due to a $200 million
increase in Adjusted EBITDA partially offset by $75 million higher
interest expense. The cash distribution coverage for the first
six-month reporting period was 1.02x versus 0.93x for the same
six-month period in 2015.
Williams Partners recently announced a regular quarterly cash
distribution of $0.85 per unit for its common unitholders.
CEO Perspective
Alan Armstrong, chief executive officer of Williams Partners’
general partner, 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 Partners
Modified and Adjusted EBITDA Amounts in millions
2Q
2016 2Q 2015 YTD 2016 YTD 2015
ModifiedEBITDA
Adjust.
AdjustedEBITDA
ModifiedEBITDA
Adjust.
AdjustedEBITDA
ModifiedEBITDA
Adjust.
AdjustedEBITDA
ModifiedEBITDA
Adjust.
Adjusted EBITDA
Atlantic-Gulf $ 357 $ 8 $ 365 $ 389 $ - $ 389 $ 733 $ 31 $ 764 $
724 $ - $ 724 Central 134 112 246 160 72 232 291 181 472 293 157
450 NGL & Petchem Services (261 ) 341 80 158 (125 ) 33 (208 )
345 137 164 (124 ) 40 Northeast G&P 216 - 216 183 22 205 430 5
435 368 33 401 West 158 - 158 150 - 150 313 4 317 311 1 312 Other
- - - 13
(14 ) (1 ) - -
- 10 (12 ) (2 )
Total
$ 604 $
461 $ 1,065 $
1,053 ($45 )
$ 1,008 $
1,559 $ 566
$ 2,125 $ 1,870
$ 55 $
1,925
Definitions of modified EBITDA and
adjusted EBITDA and schedules reconciling these measures to net
income are included in this news release.
Atlantic-Gulf
Atlantic-Gulf operating area includes the Transco interstate gas
pipeline and a 41-percent interest in the Constitution interstate
gas pipeline development project, which Williams Partners
consolidates. The segment also includes the partnership’s
significant natural gas gathering and processing and crude oil
production and handling and transportation in the Gulf Coast
region. These operations include a 51-percent consolidated interest
in Gulfstar One, a 50-percent equity method interest in Gulfstream
and a 60-percent equity-method interest in the Discovery pipeline
and processing system.
Atlantic-Gulf reported Modified EBITDA of $357 million for
second quarter 2016, compared with $389 million for second quarter
2015. The $32 million decrease is due primarily to $34 million
lower fee-based revenues at Gulfstar One caused by a planned
month-long shutdown to connect the Gunflint tieback, and other
activity by producers on their wells partially offset by $17
million higher fee-based revenues in other areas – primarily from
Transco’s new expansion projects. Results also reflect an increase
in operating costs.
Year-to-date, Atlantic-Gulf reported Modified EBITDA of $733
million, an increase of $9 million over the same six-month
reporting period in 2015. The increase was primarily due to $28
million higher proportional EBITDA from Discovery due to increased
contributions from Keathley Canyon Connector and $55 million higher
fee-based revenues on Transco primarily associated with expansion
projects. These increases were partially offset by $41 million of
lower fee-based revenues from Gulfstar One, primarily from the
second quarter 2016 month-long shutdown to connect the Gunflint
tieback and other activity by producers on their wells. Results
were also unfavorably impacted by potential rate refunds associated
with litigation, severance-related costs, and Constitution project
development costs, all of which are excluded from Adjusted
EBITDA.
Central
Central operating area includes operations that were previously
part of the former Access Midstream segment located in Louisiana,
Texas, Arkansas and Oklahoma. These operations became the Central
operating area effective Jan. 1, 2016 and prior period segment
disclosures have been recast to reflect this change. Central
provides gathering, treating and compression services to producers
under long-term, fee-based contracts. The segment also includes a
non-operated 50 percent interest in the Delaware Basin gas
gathering system in the Mid-Continent region.
The Central operating area reported Modified EBITDA of $134
million for second quarter 2016, a decrease of $26 million from
second quarter 2015. The decrease is due primarily to a $48 million
impairment charge related to a gathering system. The impairment was
partially offset by lower operating and G&A expenses. The
non-cash impairment charge is excluded from Adjusted EBITDA.
Year-to-date, the Central operating area reported Modified
EBITDA of $291 million, a decrease of $2 million from the same
six-month reporting period in 2015. The decrease was primarily due
to the previously mentioned impairment charge, partially offset by
lower operating and G&A expenses due to cost reduction efforts
and the absence of certain merger and transition costs in the prior
year. Adjusted EBITDA improved by $22 million, excluding the
impairment charge and benefits from the absence of prior year
merger and transition costs.
NGL & Petchem Services
NGL & Petchem Services operating area 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, along with an oil sands offgas processing plant
near Fort McMurray, 261 miles of NGL and olefins pipelines and an
NGL/olefins fractionation 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 equity-method interest in Overland Pass Pipeline.
NGL & Petchem Services operating area reported Modified
EBITDA of ($261) million for second quarter 2016, compared with
Modified EBITDA of $158 million for second quarter 2015. The $419
million decrease was due primarily to the previously discussed
impairment charge associated with Canadian operations and absence
in second quarter 2016 of the $126 million business interruption
proceeds, partially offset by higher fee-based revenues and olefins
margins. Geismar olefins margins for second quarter 2016 were
favorable by $12 million, reflecting strong operational production
levels negatively impacted by lower ethylene prices. Adjusted
EBITDA, which excludes the impact of the impairment charge and
insurance proceeds, increased by $47 million reflecting the higher
fee-based revenues and olefins margins.
Year-to-date, NGL & Petchem Services operating area reported
Modified EBITDA of ($208) million compared with $164 million during
the same six-month reporting period in 2015. The decrease was due
primarily to the previously discussed impairment charge and absence
in second quarter 2016 of the $126 million business interruption
proceeds and $15 million of unfavorable foreign exchange activity
related to the partnership’s Canadian business. Partially
offsetting these unfavorable items were $72 million favorable
olefins margins at Geismar and $30 million favorable fee-based
revenues due primarily to new fees associated with Williams’
Canadian offgas processing plant that came online in first quarter
2016 at CNRL’s upgrader. Adjusted EBITDA, which excludes the
impairment charge and insurance proceeds, increased by $97
million.
Northeast G&P
Northeast G&P operating area now includes the Marcellus
South, Bradford and Utica midstream gathering and processing
operations that were within the former Access Midstream segment.
These operations became part of Northeast G&P effective Jan. 1,
2016 and prior period segment disclosures have been recast to
reflect this change. Northeast G&P also includes the
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.
Northeast G&P operating area reported Modified EBITDA of
$216 million for second quarter 2016, compared with $183 million
for second quarter 2015. The quarter to quarter increase was due
primarily to $25 million lower operating and G&A expenses and
the absence of $20 million in certain asset impairment charges
recorded in second quarter 2015. Adjusted EBITDA increased by $11
million and excludes the prior year impairments.
Year-to-date, Northeast G&P operating area reported Modified
EBITDA of $430 million, an increase of $62 million over the same
six-month reporting period in 2015. The increase is due primarily
to lower operating and G&A expenses, increased proportional
Modified EBITDA of equity-method investments, higher fee-based
revenues, and the absence of certain 2015 impairment charges.
Adjusted EBITDA increased by $34 million and excludes the prior
year impairment charges.
West
West operating area 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 operating area reported Modified EBITDA of $158 million for
second quarter 2016 compared with $150 million for second quarter
2015. The $8 million increase was due primarily to lower operating
and G&A expenses.
Year-to-date, the West operating area reported Modified EBITDA
of $313 million compared with $311 million over the same six-month
reporting period in 2015. The increase was due primarily to lower
operating and G&A expenses. Year-to-date, the West operating
area reported Adjusted EBITDA of $317 million compared with
Adjusted EBITDA of $312 million over the same six-month reporting
period in 2015.
Williams Partners Expects to Implement Distribution
Reinvestment Program (DRIP) in Third Quarter 2016; Williams Intends
to Reinvest Approximately $1.7 Billion into Williams Partners
through 2017
Williams Partners and Williams announced immediate measures
designed to enhance value, strengthen Williams Partners’ credit
profile and fund the development of a significant portfolio of
fee-based growth projects at Williams Partners, while maintaining
flexibility to review financial and operational plans.
Williams intends to reinvest approximately $1.7 billion into
Williams Partners through 2017.
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 reinvested in the fourth
quarter via the DRIP. An additional $1.2 billion is planned to be
reinvested in 2017 via the DRIP.
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
partnership 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 Partners continues to make
significant progress on its ongoing cost reduction program, with
$55 million in lower adjusted costs for second quarter 2016 versus
the prior year period despite additional assets being in service;
additional cost-savings initiatives are expected 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.
Guidance
Current guidance for 2016 is set out in the following table:
Williams Partners
2016 Williams Partners 2016 2017
(Amount in billions) (Amount in billions) Net income $ 0.9
Growth Capital & Investment Expenditures $ 1.9 $ 3.1 Adjusted
EBITDA (1) $ 4.3 Growth Capital for Transco (2) $ 1.3 $ 2.4
Distributable Cash Flow (1) $ 2.8
(1)
Adjusted EBITDA and Distributable Cash
Flow are non-GAAP measures; reconcilations to the most relevant
measures are attached in this news release.
(2)
The numbers listed reflect 68% of total
growth capex in 2016 and 77% of total growth capex in 2017.
Second-Quarter 2016 Materials to be Posted Shortly; Q&A
Webcast Scheduled for Tomorrow
Williams Partners’ 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 SEC and Williams websites.
Definitions of Non-GAAP Measures
This news release may include 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, 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.
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 expense
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
(loss).
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, 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 all of the 2 percent
general-partner interest. www.williams.com
Forward-Looking Statements
The reports, filings, and other public announcements of 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 (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.
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 with respect to general
partner interests, incentive distribution rights and limited
partner interests;
Our and our affiliates’ future credit ratings;
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 we have sufficient cash from operations to enable us to
pay current and expected levels of cash distributions, if any,
following the establishment of cash reserves and payment of fees
and expenses, including payments to our general partner;
Whether we will be able to effectively execute our financing
plan including the 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 to 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;
Our allocated costs for defined benefit pension plans and other
postretirement benefit plans sponsored by our 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 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.
Limited partner units are inherently different from the capital
stock of a corporation, although many of the business risks to
which we are subject are similar to those that would be faced by a
corporation engaged in a similar business. You should carefully
consider the risk factors discussed below in addition to the other
information in this report. If any of the following risks were
actually to occur, our business, results of operations and
financial condition could be materially adversely affected. In that
case, we might not be able to pay distributions on our common
units, the trading price of our common units could decline, and
unitholders could lose all or part of their investment.
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 February 26, 2016 and in Part II, Item 1A. Risk
Factors in our Quarterly Reports on Form 10-Q available from our
office or from our website at www.williams.com.
Williams
Partners L.P. Reconciliation of Non-GAAP Measures
(UNAUDITED) (UNAUDITED) 2015 2016
(Dollars in millions, except coverage ratios) 1st Qtr
2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr
2nd Qtr Year
Williams Partners L.P.
Reconciliation of GAAP "Net Income (Loss)" to Non-GAAP "Modified
EBITDA", "Adjusted EBITDA", and "Distributable cash flow”
Net income (loss) $ 112 $ 332 $ (167 ) $ (1,635 ) $ (1,358 ) $ 79 $
(77 ) $ 2 Provision (benefit) for income taxes 3 — 1 (3 ) 1 1 (80 )
(79 ) Interest expense 192 203 205 211 811 229 231 460 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 (1 ) — — (1 ) (2 ) — (1 ) (1 )
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 419 419 423 441 1,702
435 432 867 Accretion for asset retirement obligations associated
with nonregulated operations 7 9
5 7 28
7 9 16
Modified EBITDA 817 1,053 1,021 1,112 4,003 955 604 1,559
Adjustments 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 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 investment 8 1 17 7 33 — — —
Geismar Incident adjustment for insurance and timing — (126 ) — —
(126 ) — — — Loss related to Geismar Incident 1 1 — — 2 — — —
Impairment of certain assets 3 24 2 116 145 — 389 389 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 EBITDA adjustments 100 (45
) 79 (48 ) 86
105 461 566
Adjusted EBITDA 917 1,008 1,100 1,064 4,089 1,060 1,065
2,125 Maintenance capital expenditures (1) (54 ) (80 ) (114
) (114 ) (362 ) (58 ) (75 ) (133 ) Interest expense (cash portion)
(2) (204 ) (207 ) (219 ) (214 ) (844 ) (241 ) (245 ) (486 ) Cash
taxes (1 ) — — — (1 ) — — — Income attributable to noncontrolling
interests (3) (23 ) (32 ) (27 ) (29 ) (111 ) (29 ) (13 ) (42 ) WPZ
restricted stock unit non-cash compensation 7 6 7 7 27 7 5 12
Plymouth incident adjustment 4 6
7 4 21
— — —
Distributable cash flow attributable to Partnership
Operations 646 701
754 718 2,819
739 737 1,476
Total cash distributed (4) $ 725 $ 723 $ 723 $ 725 $
2,896 $ 725 $ 725 $ 1,450
Coverage ratios:
Distributable cash flow attributable to partnership operations
divided by Total cash distributed 0.89
0.97 1.04 0.99
0.97 1.02 1.02
1.02 Net income (loss) divided
by Total cash distributed 0.15 0.46
(0.23 ) (2.26 )
(0.47 ) 0.11 (0.11 ) 0.00
Notes: (1) Includes proportionate share of
maintenance capital expenditures of equity investments.
(2) Includes proportionate share of interest expense of
equity investments. (3) Income attributable to
noncontrolling interests for the fourth quarter 2015 excludes
allocable share of impairment of goodwill. (4) In order to
exclude the impact of the IDR waiver associated with the WPZ merger
termination fee from the determination of coverage ratios, cash
distributions have been increased for the 2015 third quarter,
fourth quarter, and year by $209 million, $209 million, and $418
million, respectively, and by $10 million in the first quarter of
2016.
Williams Partners L.P. 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
Modified
EBITDA: Central $ 133 $ 160 $ 163 $ 384 $ 840 $ 157 $ 134 $ 291
Northeast G&P 185 183 189 196 753 214 216 430 Atlantic-Gulf 335
389 414 385 1,523 376 357 733 West 161 150 169 77 557 155 158 313
NGL & Petchem Services 6 158 85 72 321 53 (261 ) (208 ) Other
(3 ) 13 1
(2 ) 9 — —
—
Total Modified EBITDA $
817 $ 1,053
$ 1,021 $ 1,112
$ 4,003 $ 955
$ 604 $ 1,559
Adjustments:
Central
Estimated minimum volume commitments $ 55 $ 55 $ 65 $ (175 ) $ — $
60 $ 64 $ 124 Severance and related costs — — — — — 6 — 6 ACMP
Merger and transition costs 30 14 2 2 48 3 — 3 Impairment of
certain assets — 3
— 8 11 —
48 48 Total Central
adjustments 85 72 67 (165 ) 59 69 112 181
Northeast
G&P
Severance and related costs — — — — — 3 — 3 Share of impairment at
equity-method investments 8 1 17 7 33 — — — ACMP Merger and
transition costs — — — — — 2 — 2 Impairment of certain assets
3 21 2
6 32 —
— — Total Northeast G&P
adjustments 11 22 19 13 65 5 — 5
Atlantic-Gulf
Potential rate refunds associated with rate case litigation — — — —
— 15 — 15 Severance and related costs — — — — — 8 — 8 Constitution
Pipeline project development costs — — — — — — 8 8 Impairment of
certain assets — —
— 5 5 —
— — Total Atlantic-Gulf
adjustments — — — 5 5 23 8 31
West
Severance and related costs — — — — — 4 — 4 Impairment of certain
assets — — — 97 97 — — — Loss (recovery) related to Opal incident
1 — (8 )
1 (6 ) — —
— Total West adjustments 1 — (8 ) 98 91 4 — 4
NGL & Petchem
Services
Severance and related costs — — — — — 4 — 4 Loss related to Geismar
Incident 1 1 — — 2 — — — Impairment of certain assets — — — — — —
341 341 Geismar Incident adjustment for insurance and timing
— (126 ) —
— (126 ) — —
— Total NGL & Petchem Services adjustments
1 (125 ) — — (124 ) 4 341 345
Other
ACMP Merger-related expenses 2 — — — 2 — — — Expenses associated
with strategic alternatives — — 1 1 2 — — — Gain on extinguishment
of debt — (14 ) —
— (14 ) — —
— Total Other adjustments 2 (14 ) 1 1
(10 ) — — —
Total Adjustments
$ 100 $ (45 )
$ 79 $ (48
) $ 86 $ 105
$ 461 $ 566
Adjusted EBITDA: Central $ 218 $ 232 $ 230 $ 219 $
899 $ 226 $ 246 $ 472 Northeast G&P 196 205 208 209 818 219 216
435 Atlantic-Gulf 335 389 414 390 1,528 399 365 764 West 162 150
161 175 648 159 158 317 NGL & Petchem Services 7 33 85 72 197
57 80 137 Other (1 ) (1 ) 2
(1 ) (1 ) —
— —
Total Adjusted EBITDA
$ 917 $ 1,008
$ 1,100 $ 1,064
$ 4,089 $ 1,060
$ 1,065 $ 2,125
Williams Partners L.P.
Reconciliation of Non-GAAP Measures (UNAUDITED)
2016 (Dollars in billions)
Guidance
Williams Partners L.P. Reconciliation of GAAP "Net
Income (Loss)" to Non-GAAP "Modified EBITDA", "Adjusted EBITDA",
and "Distributable cash flow” Net income (loss) $ 0.9
Provision (benefit) for income taxes (0.1 ) Interest expense 0.9
Equity (earnings) losses (0.4 ) Impairment of equity-method
investments 0.1 Proportional Modified EBITDA of equity-method
investments 0.7 Depreciation and amortization expenses and
accretion for asset retirement obligations 1.8
Modified EBITDA 3.9 Adjustments: Severance and related costs
$ 0.025 Potential rate refunds associated with rate case litigation
0.015 Merger and transition related expenses 0.005 Constitution
Pipeline project development costs 0.008 Impairment of certain
assets 0.389 Total EBITDA adjustments 0.4 Adjusted
EBITDA 4.3 Maintenance capital expenditures (1) (0.4 )
Interest expense (cash portion) (2) (1.0 ) Income attributable to
noncontrolling interests, cash taxes and other (0.1 )
Distributable cash flow attributable to Partnership Operations $
2.8 Notes:
(1) Includes proportionate share of
maintenance capital expenditures of equity-method investments.
(2) Includes proportionate share of
interest expense of equity-method investments.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160801006182/en/
Williams Partners L.P.Media Contact:Keith Isbell,
918-573-7308orInvestor Contacts:John Porter,
918-573-0797orBrett Krieg, 918-573-4614
Williams Partners (NYSE:WPZ)
Historical Stock Chart
From Mar 2024 to Apr 2024
Williams Partners (NYSE:WPZ)
Historical Stock Chart
From Apr 2023 to Apr 2024