- Continued Solid Financial Performance;
Increasing Fee-Based Revenue; Cost Reductions
- 3Q 2016 Cash Flow from Operations of
$618 million, Up 2%
- 3Q 2016 Net Income of $61 million, Up
$101 million
- 3Q 2016 Adjusted EBITDA of $1.192
billion, Up $89 million or 8%
- 3Q 2016 Cash Available for Dividends
and Other Uses of $441 million, $1.303 billion YTD
- Williams Partners Provides Revised 2017
Capital Expenditures Guidance Related Primarily to Atlantic Sunrise
Project Timing
Williams (NYSE: WMB) today announced its financial results for
the three and nine months ended Sept. 30, 2016.
Williams Summary
Financial Information 3Q 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 $618 $603 $2,082 $2,086 Net
income (loss) $61 ($40) ($409) $144 Net income (loss) per share
$0.08 ($0.05) ($0.55) $0.19 Non-GAAP Measures (1) Adjusted
income from continuing operations $148 $167 $320 $399 Adjusted
income from continuing operations per share $0.20 $0.22 $0.43 $0.53
Adjusted EBITDA $1,192 $1,103 $3,313 $3,038 Cash Flow available for
Dividends and other uses (2) $441 $439 $1,303 $1,375 Dividend
Coverage Ratio 2.94x 0.91x 1.17x 1.01x
(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.
(2) As previously announced, effective
with the third quarter of 2016, Williams reduced its regular
quarterly dividend from $0.64 per share to $0.20 per share. The
dividend reduction supports Williams' plan to reinvest a portion of
the cash available for dividends and other uses into Williams
Partners.
Third-Quarter 2016 Financial Results
Williams reported third-quarter 2016 unaudited net income of $61
million, a $101 million increase from third-quarter 2015 net
income. The favorable change was driven by the absence of $461
million of impairments of equity-method investments recognized in
2015. The improvement also reflected higher olefins margins at
our Geismar plant, lower operating and maintenance expenses, and
higher service revenues associated with expansion projects,
partially offset by a $65 million additional loss upon completing
the sale of our Canadian operations, higher interest expense, and
expensed project development costs.
Year-to-date Williams reported an unaudited net loss of ($409)
million, a $553 million decrease from the same time period in 2015.
The unfavorable change was driven by increased impairment charges
and the additional loss on sale associated with our Canadian
operations, the absence of $126 million of insurance recoveries,
expensed project development costs and higher interest incurred.
The decrease also includes an unfavorable change in net income
attributable to noncontrolling interests driven primarily by the
impact of reduced incentive distributions from WPZ associated with
the termination of the WPZ Merger Agreement as well as higher WPZ
income. These declines were partially offset by the favorable
impact of lower impairments of equity-method investments, an
increase in olefins margins associated with our Geismar plant,
decreases in operating and maintenance expenses, and higher equity
earnings.
Williams reported third-quarter 2016 Adjusted EBITDA of $1.192
billion, an $89 million increase over third-quarter 2015. The
improvement is due primarily to an $89 million increase in Adjusted
EBITDA from the Williams Partners segment and an $8 million
increase in the Other segment, partially offset by an $8 million
decrease for the Williams NGL & Petchem segment.
Year-to-date, Williams reported Adjusted EBITDA of $3.313
billion, an increase of $275 million over the same period in 2015.
The improvement is due primarily to a $289 million increase in
Adjusted EBITDA from the Williams Partners segment and a $12
million increase in the Other segment, partially offset by a $26
million decrease at the Williams NGL & Petchem Services
segment.
During third-quarter 2016, Williams reported Cash Available for
Dividends and Other Uses of $441 million and received $220 million
for its share of proceeds related to the sale of its Canadian
assets.
During third-quarter 2016, Williams reduced borrowing on its
credit facility by $265 million, reinvested $250 million via a
private placement to purchase WPZ common units pursuant to its
previously announced plans, and paid a cash dividend to
shareholders totaling $150 million.
CEO Perspective
Alan Armstrong, Williams’ president and chief executive officer,
made the following comments:
“With Adjusted EBITDA growth across all five of the
partnership’s operating areas and increased distributable cash flow
achieved by Williams Partners, our strong third-quarter results
highlighted once again the effectiveness of our strategy and how
well-positioned we are to capture natural gas demand growth now and
in the future.
“Our recent accomplishments reflect disciplined execution
against our business plan. The new Kodiak, Gunflint and Rock
Springs facilities all contributed to our growth in the third
quarter. Despite the expanding number of major projects recently
placed in-service, we reduced expenses on a year-to-date basis. We
also completed win-win contract renegotiations with our customer
Chesapeake and completed the sale of our Canadian businesses as we
continue to take decisive actions to position our company for
predictable growth.
“Our future growth is also visible in the number of projects now
under construction. After receiving the necessary permits to begin
construction, we began work in the third quarter on Dalton,
Virginia Southside II and Phase 1 of Hillabee. Construction on our
New York Bay Expansion project began this month while construction
also continues on our Gulf Trace project. We are aiming to place
all of these Transco-expansion projects into service next year.
“We are also excited to have the additional expertise and
contributions of five new, independent energy-industry veterans on
the Williams Board of Directors.”
Business Segment Results
Williams’ business segments for financial reporting are Williams
Partners, Williams NGL & Petchem Services and Other.
Williams Modified and Adjusted EBITDA
3Q 2016 3Q 2015 YTD 2016
YTD 2015 Amounts in millions
Modified EBITDA
Adjust. Adjusted EBITDA Modified EBITDA
Adjust. Adjusted EBITDA Modified EBITDA
Adjust. Adjusted EBITDA Modified EBITDA
Adjust. Adjusted EBITDA Williams Partners
$1,070 $119 $1,189 $1,021 $79 $1,100 $2,629 $685 $3,314 $2,891 $134
$3,025 Williams NGL & Petchem (62) 49 (13) (5) - (5) (529) 490
(39) (13) - (13) Other (5) 21 16 (17) 25 8 (5) 43 38 (21) 47 26
Total
$1,003 $189 $1,192
$999 $104 $1,103
$2,095 $1,218 $3,313
$2,857 $181 $3,038
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 third-quarter 2016 Modified EBITDA of
$1.07 billion, an increase of $49 million from third-quarter 2015.
Adjusted EBITDA increased $89 million to $1.189 billion. The
increase in Modified EBITDA was due primarily to $33 million higher
olefins margins, $32 million higher fee-based revenues and $21
million lower operating and maintenance and selling, general, and
administrative expenses. The 2016 period also included a $32
million additional loss associated with the completion of the sale
of our Canadian operations and expensed project development costs,
both of which are excluded from Adjusted EBITDA.
Year-to-date, Williams Partners reported Modified EBITDA of
$2.629 billion, a decrease of $262 million over the same period in
2015. Adjusted EBITDA increased $289 million to $3.314 billion. The
decrease in Modified EBITDA occurred primarily due to a $341
million impairment charge associated with the partnership’s
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
and a $48 million impairment charge related to a gathering system.
These were partially offset by higher olefins margins reflecting a
full nine months of production at the Geismar Olefins plant, $101
million lower operating and maintenance and selling, general, and
administrative expenses, $70 million higher joint-venture EBITDA
primarily from Discovery and $65 million higher fee-based revenues.
Adjusted EBITDA excludes the impairment charges and insurance
proceeds described above.
Williams Partners’ complete financial results for third-quarter
2016 are provided in the earnings news release issued today by
Williams Partners.
Williams NGL & Petchem Services
This segment currently includes petchem pipeline projects on the
Gulf Coast. Prior to the sale of all of our Canadian-based assets
effective Sept. 23, 2016, this segment also included an offgas
processing plant in Canada at CNRL’s Horizon upgrader that went
into service in first-quarter 2016. The segment also included a
propane dehydrogenation facility growth project under development
in Canada.
Williams NGL & Petchem Services reported third-quarter 2016
Modified EBITDA of ($62) million, a decrease of $57 million from
third quarter 2015. Adjusted EBITDA decreased $8 million to ($13)
million. The decrease in Modified EBITDA is due primarily to a $33
million additional loss associated with the completion of the sale
of our Canadian operations and $16 million of Canadian
project-development costs, both of which are excluded from Adjusted
EBITDA.
Year-to-date, Williams NGL & Petchem Services reported
Modified EBITDA of ($529) million, a decrease of $516 million over
the same time period in 2015. Adjusted EBITDA decreased $26 million
to ($39) million. The decrease in Modified EBITDA is due primarily
to a $406 million impairment of our Canadian operations, a $33
million additional loss associated with the completion of the sale
of our Canadian operations and $61 million of Canadian
project-development costs all of which are excluded from Adjusted
EBITDA.
Williams Partners Provides Revised 2017 Growth Capital
Guidance Related Primarily to Atlantic Sunrise Project
Timing
Williams Partners is revising its 2017 growth
capital guidance amounts due primarily to the shift in Transco
and related Northeast G&P growth spending caused by the revised
Atlantic Sunrise in-service date, as well as new projects and other
changes. As discussed in its press release dated Oct. 28, 2016,
Williams Partners expects partial Atlantic Sunrise service to begin
during the second half of 2017 and is now targeting full in-service
during mid-2018. Consistent with prior financial practice, Williams
Partners’ financial plan further risks these project cash flows by
approximately six months. The following guidance range represents
both the targeted in-service date and the further risked in-service
date: total 2017 growth capital and investment expenditures are
expected to be between $2.1 billion and $2.8 billion, including
total 2017 growth capital for Transco, which is expected to be
between $1.4 billion and $1.9 billion.
Third-Quarter 2016 Materials to be Posted Shortly; Q&A
Webcast Scheduled for This Morning
Williams’ third-quarter 2016 financial results package will be
posted shortly at www.williams.com. The package will include the
data book and analyst package.
Williams and Williams Partners plan to jointly host a Q&A
live webcast today, (Oct. 31), at 9:30 a.m. EDT. A limited number
of phone lines will be available at (888) 364-3105. International
callers should dial (719) 325-2228. The conference ID is 6961753. A
link to the webcast, as well as replays of the webcast, will be
available for two weeks following the event at
www.williams.com.
Form 10-Q
The company plans to file its third-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 and other uses 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 and other uses 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 U.S. 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, 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 we are able to pay current and
expected levels of dividends;
- Whether we will be able to effectively
execute our financing plan including 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;
- Our 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 3rd Qtr Year
Income (loss) attributable to The Williams
Companies, Inc. available to common stockholders $ 70
$ 114 $ (40 ) $ (715 ) $ (571 ) $ (65 ) $ (405 ) $ 61
$ (409 )
Income (loss) - diluted earnings (loss)
per common share $ .09 $ .15 $ (.05 ) $ (.95 ) $
(.76 ) $ (.09 ) $ (.54 ) $ .08 $ (.55 )
Adjustments:
Williams
Partners
Estimated minimum volume commitments $ 55 $ 55 $ 65 $ (175 ) $ — $
60 64 70 $ 194 Impairment of certain assets 3 24 2 116 145 — 389 —
389 Loss related to Canada disposition — — — — — — — 32 32
Severance and related costs — — — — — 25 — — 25 Constitution
Pipeline project development costs — — — — — — 8 11 19 Potential
rate refunds associated with rate case litigation — — — — — 15 — —
15 ACMP Merger and transition-related expenses 32 14 2 2 50 5 — — 5
Share of impairment at equity-method investments 8 1 17 7 33 — — 6
6 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 ) 86 105 461 119 685
Williams NGL &
Petchem Services
Impairment of certain assets — — — 64 64 — 406 — 406 Loss related
to Canada disposition — — — — — — — 33 33 Canadian PDH facility
project development costs — — — — — 34 11 16 61 Gain on sale of
certain assets — — —
— — (10 ) —
— (10 ) Total Williams NGL & Petchem Services
adjustments — — — 64 64 24 417 49 490
Other
Expenses associated with strategic alternatives — 7 18 5 30 6 13 21
40 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 21 43
Adjustments included in Modified EBITDA 106 (29 ) 104 32 213 138
891 189 1,218
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 — — — — Gain on sale of equity-method investment -
Williams Partners — — — — — — — (27 ) (27 ) 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 ) (41
) (278 ) (31 ) 12 231 1,236 1,448 14 (172 ) (68 ) (226 )
Total adjustments 75 (17 ) 335 1,268 1,661 152 719 121 992
Less tax effect for above items (28 ) 4 (129 ) (473 ) (626 ) (61 )
(202 ) (39 ) (302 ) Adjustments for tax-related items (1) 5 9 1 (74
) (59 ) — 34 5 39
Adjusted income available to common
stockholders $ 122 $ 110 $ 167 $ 6
$ 405 $ 26 $ 146 $ 148 $ 320
Adjusted diluted earnings per common share $ .16 $
.15 $ .22 $ .01 $ .54 $ .03 $
.19 $ .20 $ .43
Weighted-average shares -
diluted (thousands) 752,028 752,775 753,100 751,930 752,460
751,040 751,297 751,858 751,406 (1) The fourth
quarter of 2015 includes an unfavorable adjustment related to the
translation of certain foreign-denominated unrecognized tax
benefits. The second and third quarters of 2016 include 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
3rd Qtr Year
Net income (loss) $ 13 $ 183 $ (173 ) $ (1,337 ) $
(1,314 ) $ (13 ) $ (505 ) $ 131 $ (387 ) Provision (benefit) for
income taxes 30 83 (65 ) (447 ) (399 ) 2 (145 ) 69 (74 ) Interest
expense 251 262 263 268 1,044 291 298 297 886 Equity (earnings)
losses (51 ) (93 ) (92 ) (99 ) (335 ) (97 ) (101 ) (104 ) (302 )
Impairment of equity-method investments — — 461 898 1,359 112 — —
112 Other investing (income) loss - net — (9 ) (18 ) — (27 ) (18 )
(18 ) (28 ) (64 ) Proportional Modified EBITDA of equity-method
investments 136 183 185 195 699 189 191 194 574 Impairment of
goodwill — — — 1,098 1,098 — — — — Depreciation and amortization
expenses 427 428 432 451 1,738 445 446 435 1,326 Accretion for
asset retirement obligations associated with nonregulated
operations 6 9 6 7
28 7 8 9
24
Modified EBITDA $ 812
$ 1,046 $ 999
$ 1,034 $ 3,891 $
918 $ 174 $ 1,003
$ 2,095 Williams Partners $ 817
$ 1,053 $ 1,021 $ 1,112 $ 4,003 $ 955 $ 604 $ 1,070 $ 2,629
Williams NGL & Petchem Services (5 ) (3 ) (5 ) (70 ) (83 ) (38
) (429 ) (62 ) (529 ) Other — (4 ) (17
) (8 ) (29 ) 1 (1 ) (5 )
(5 )
Total Modified EBITDA $ 812
$ 1,046 $ 999 $
1,034 $ 3,891 $
918 $ 174 $ 1,003
$ 2,095
(1):
Williams Partners $ 100 $ (45 ) $ 79 $ (48 ) $ 86 $ 105 $ 461 $ 119
$ 685 Williams NGL & Petchem Services — — — 64 64 24 417 49 490
Other 6 16 25 16
63 9 13 21
43
Total Adjustments included in Modified
EBITDA $ 106 $ (29 )
$ 104 $ 32 $
213 $ 138 $ 891
$ 189 $ 1,218
Adjusted EBITDA: Williams Partners $ 917 $
1,008 $ 1,100 $ 1,064 $ 4,089 $ 1,060 $ 1,065 $ 1,189 $ 3,314
Williams NGL & Petchem Services (5 ) (3 ) (5 ) (6 ) (19 ) (14 )
(12 ) (13 ) (39 ) Other 6 12 8
8 34 10 12
16 38
Total Adjusted
EBITDA $ 918 $ 1,017
$ 1,103 $ 1,066 $
4,104 $ 1,056 $
1,065 $ 1,192 $
3,313 (1) Adjustments by segment are
detailed in the "Reconciliation of Income (Loss) Attributable to
The Williams Companies, Inc. to Adjusted Income," which is also
included in these materials.
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 3rd Qtr Year
Distributions from WPZ (accrued
/ “as declared” basis) (3) $ 515 $ 513 $ 513 $
513 $ 2,054 $ 513 $ 513 $ 522 $
1,548 Williams NGL & Petchem Services adjusted cash flow
(see below) (5 ) (3 ) (5 ) (6 ) (19 ) (14 ) (12 ) (13 ) (39 )
Corporate interest (64 ) (64 ) (63 )
(64 ) (255 ) (66 ) (67 ) (68 )
(201 ) Subtotal 446 446 445 443 1,780 433 434 441 1,308 WMB cash
tax rate -12 % 0 % 0 % 0 % -3 % 0 % -1 % 0 % 0 % 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
available for dividends and other uses (4) $ 495 $ 441 $ 439 $ 436
$ 1,811 $ 429 $ 433 $ 441 $ 1,303 WMB dividends paid (434 )
(442 ) (480 ) (480 ) (1,836 )
(480 ) (481 ) (150 ) (1,111 ) Excess cash
available after dividends $ 61 $ (1 ) $ (41 ) $ (44 ) $ (25 ) $ (51
) $ (48 ) $ 291 $ 192 Dividend per share $ 0.5800 $ 0.5900 $
0.6400 $ 0.6400 $ 2.4500 $ 0.6400 $ 0.6400 $ 0.2000 $ 1.4800
Coverage ratio (2)(3) 1.14 1.00 0.91 0.91 0.99 0.89 0.90 2.94 1.17
Williams NGL &
Petchem Services Adjusted Cash Flow:
Modified EBITDA (5 ) (3 ) (5 ) (70 ) (83 ) (38 ) (429 ) (62 ) (529
) Segment adjustments — — —
64 64 24
417 49 490 Adjusted EBITDA (5 )
(3 ) (5 ) (6 ) (19 ) (14 ) (12 ) (13 ) (39 ) Less: Maintenance
Capex — — — —
— — — —
— Adjusted cash flow (5 ) (3 ) (5 ) (6 ) (19 )
(14 ) (12 ) (13 ) (39 ) 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 available for
dividends and other uses / 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. Cash distributions
for the third quarter of 2016 has been increased by $150 million in
order to exclude the impact of the IDR waiver associated with the
sale of the Canadian operations. (4) As previously
announced, effective with the third quarter of 2016, Williams
reduced its regular dividend from $0.64 per share to $0.20 per
share. The dividend reduction supports Williams' plan to reinvest a
portion of the cash available for dividends and other uses into
Williams Partners.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161031005297/en/
WilliamsMedia:Keith Isbell,
918-573-7308orInvestors:John Porter, 918-573-0797orBrett
Krieg, 918-573-4614
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