- Continued Solid Financial Performance;
Increasing Fee-Based Revenue; Cost Reductions
- 3Q 2016 Cash Flow from Operations of
$676 million, Up $71 million or 12%
- 3Q 2016 Net Income of $326 million, Up
$520 million
- 3Q 2016 Adjusted EBITDA of $1.189
billion, Up $89 million or 8%
- Coverage Ratio of 1.08x Driven by
Distributable Cash Flow of $795 million, Up $41 million or 5%
- Revised 2017 Capital Expenditure
Guidance Related Primarily to Atlantic Sunrise Project Timing
Williams Partners L.P. (NYSE:WPZ) today announced its financial
results for the three and nine months ended Sept. 30, 2016.
Summary
Financial Information 3Q YTD
Amounts in millions, except per-unit
amounts. Per unit amounts are reported on a diluted basis. All
amounts are attributableto Williams Partners L.P.
2016 2015 2016 2015
GAAP Measures Cash Flow from Operations $676
$605 $2,341 $2,098 Net income (loss) $326 ($194 ) $286 $195 Net
income (loss) per common unit $0.42 ($0.32 ) ($0.32 ) ($0.50 )
Non-GAAP Measures (1) Adjusted EBITDA $1,189 $1,100 $3,314
$3,025 DCF attributable to partnership operations $795 $754 $2,271
$2,101 Cash distribution coverage ratio 1.08x 1.04x 1.04x 0.97x
(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.
Third-Quarter 2016 Financial Results
Williams Partners reported third-quarter 2016 unaudited net
income of $326 million, compared to a $194 million net loss from
third-quarter 2015. 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 (O&M) and selling, general and administrative
(SG&A) expenses, and higher service revenues associated with
expansion projects, partially offset by a $32 million additional
loss associated with the completion of the sale of our Canadian
operations and expensed project development costs.
Year-to-date, Williams Partners reported unaudited net income of
$286 million, a $91 million increase over the same time period in
2015. The favorable change was driven by lower impairments of
equity-method investments, higher service revenues, an increase in
olefins margins associated with our Geismar plant, decreases in
O&M and SG&A expenses, and higher equity earnings. These
favorable changes were partially offset by increased
property-impairment charges and the additional loss on sale
associated with our Canadian operations, the absence of $126
million of insurance recoveries, and higher interest incurred.
Williams Partners reported third-quarter 2016 Adjusted EBITDA of
$1.189 billion, an $89 million increase over third-quarter 2015.
The increase is due primarily to $37 million higher fee-based
revenues, $33 million higher olefins margins and $21 million lower
O&M and SG&A expenses.
Year-to-date, Williams Partners reported Adjusted EBITDA of
$3.314 billion, an increase of $289 million over the same
nine-month reporting period in 2015. The increase is due primarily
to $108 million of higher olefins margins, $99 million of higher
fee-based revenues, $83 million of lower O&M and SG&A
expenses and $50 million of higher proportional EBITDA from joint
ventures. Partially offsetting these increases was a $19 million
unfavorable change in foreign currency exchange gains and losses
related to our former Canadian operations divested in September
2016.
Distributable Cash Flow and Distributions
For third-quarter 2016, Williams Partners generated $795 million
in distributable cash flow (DCF) attributable to partnership
operations, compared with $754 million in DCF attributable to
partnership operations for the same period last year. The $41
million increase in DCF for the quarter was driven by an $89
million increase in Adjusted EBITDA, partially offset by $25
million higher interest expense. For third-quarter 2016, the cash
distribution coverage was 1.08x.
Year-to-date, Williams Partners generated $2.271 billion in DCF,
an increase of $170 million over the same period in 2015. The
increase was due to a $289 million increase in Adjusted EBITDA
partially offset by $100 million higher interest expense.
Year-to-date, the cash distribution coverage was 1.04x.
Williams Partners recently announced a regular quarterly cash
distribution of $0.85 per unit for its common unitholders payable
on Nov. 14, 2016 to unitholders of record at the close of business
on Nov. 4, 2016.
In August 2016, Williams reinvested $250 million via a private
placement to purchase WPZ common units pursuant to its previously
announced plans.
CEO Perspective
Alan Armstrong, chief executive officer of Williams Partners’
general partner, 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.”
Business Segment Results
Williams Partners Modified and Adjusted
EBITDA Amounts in millions
3Q 2016 3Q 2016
3Q 2015 3Q 2015
YTD 2016 YTD 2015
ModifiedEBITDA
Adjust.
AdjustedEBITDA
ModifiedEBITDA
Adjust.
AdjustedEBITDA
ModifiedEBITDA
Adjust.
AdjustedEBITDA
ModifiedEBITDA
Adjust.
AdjustedEBITDA
Atlantic-Gulf $416 $11 $427 $414 $ - $414 $1,149
$42 $1,191 $1,138 $ - $1,138 Central
176 70 246 163 67 230 467 251 718 456 224 680 NGL & Petchem
Services 104 32 136 85 - 85 (104 ) 377 273 249 (124 ) 125 Northeast
G&P 208 6 214 189 19 208 638 11 649 557 52 609 West 166 - 166
169 (8 ) 161 479 4 483 480 (7 ) 473 Other - - - 1
1 2 - - - 11 (11 )
- Total
$1,070 $119
$1,189 $1,021 $79
$1,100 $2,629 $685
$3,314 $2,891 $134
$3,025 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 41 percent interest in 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 $416 million for
third-quarter 2016, compared with $414 million for third-quarter
2015. Adjusted EBITDA increased by $13 million to $427 million for
the same time period. The increase in Modified EBITDA is due
primarily to $31 million higher fee-based revenues from both
offshore gathering and processing operations (including the new
Gunflint and Kodiak facilities) as well as Transco’s new expansion
projects. Substantially offsetting the higher fee-based revenues
were $20 million in higher O&M expenses primarily related to
pipeline safety testing activities as well as expensed project
development costs.
Year-to-date, Atlantic-Gulf reported Modified EBITDA of $1.149
billion, an increase of $11 million over the same time period in
2015. Adjusted EBITDA increased $53 million to $1.191 billion. The
increase in Modified EBITDA was due primarily to $27 million higher
fee-based revenues from both Transco’s new expansion projects as
well as offshore gathering and processing operations (including the
new Gunflint and Kodiak facilities) and $25 million higher
proportional EBITDA from Discovery due to increased contributions
from Keathley Canyon Connector. Modified EBITDA was also
unfavorably impacted by potential rate refunds associated with
litigation, severance-related costs, and project development costs,
all of which are excluded from Adjusted EBITDA.
Central
The 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 for 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 $176
million for third-quarter 2016, an increase of $13 million from
third-quarter 2015. Adjusted EBITDA increased by $16 million to
$246 million. The increase is due primarily to $20 million lower
O&M and SG&A expenses partially offset by lower fee-based
revenues.
Year-to-date, the Central operating area reported Modified
EBITDA of $467 million, an increase of $11 million from the same
nine-month reporting period in 2015. Adjusted EBITDA increased $38
million to $718 million. The increase in Modified EBITDA was due
primarily to $63 million of lower O&M and SG&A expenses due
to cost reduction efforts and the absence of certain merger and
transition costs in the prior year partially offset by lower
fee-based revenues and a $48 million impairment charge in the
second quarter of 2016 related to a gathering system. Adjusted
EBITDA excludes the impairment charge and benefits from the absence
of prior-year merger and transition costs, as well as estimated
minimum volume commitments.
NGL & Petchem Services
NGL & Petchem Services operating area includes an 88.5
percent undivided ownership interest in an olefins production
facility in Geismar, Louisiana, along with a refinery grade
propylene splitter and pipelines in the Gulf Coast region. 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. Prior to the sale of all of our Canadian-based
assets effective Sept. 23, 2016, this segment included midstream
operations in Alberta, Canada, including an oil sands offgas
processing plant near Fort McMurray, 261 miles of NGL and olefins
pipelines and an NGL/olefins fractionation facility at
Redwater.
NGL & Petchem Services operating area reported Modified
EBITDA of $104 million for third-quarter 2016, compared with $85
million for third-quarter 2015. Adjusted EBITDA increased by $51
million to $136 million. The $19 million increase in Modified
EBITDA was due primarily to $33 million higher olefins margins and
$8 million higher fee-based revenues. Geismar olefins margins for
third-quarter 2016 reflected enhanced operational production levels
and improved ethylene prices. Partially offsetting these increases
was a $32 million additional loss associated with the completion of
the sale of Canadian operations, which is excluded from Adjusted
EBITDA.
Year-to-date, NGL & Petchem Services operating area reported
Modified EBITDA of ($104) million compared with $249 million during
the same time period in 2015. Adjusted EBITDA increased $148
million to $273 million. The decrease in Modified EBITDA was due
primarily to a second quarter 2016 non-cash impairment charge of
$341 million associated with our former Canadian operations, the
additional loss associated with the sale, and the absence of $126
million business interruption proceeds. Partially offsetting these
unfavorable items were $108 million favorable olefins margins at
Geismar and $38 million favorable fee-based revenues due primarily
to new fees associated with Williams’ Canadian offgas processing
plant that came online in first quarter 2016. Adjusted EBITDA
excludes the impairment charge, additional loss on sale and
insurance proceeds.
Northeast G&P
Northeast G&P operating area includes the Susquehanna Supply
Hub, Ohio Valley Midstream, Marcellus South, Bradford and Utica
midstream gathering and processing operations 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. The
Marcellus South, Bradford and Utica midstream gathering and
processing operations that were previously within the former Access
Midstream segment became part of Northeast G&P effective Jan.
1, 2016 and prior period segment disclosures have been recast for
this change.
Northeast G&P operating area reported Modified EBITDA of
$208 million for third-quarter 2016, compared with $189 million for
third-quarter 2015. Adjusted EBITDA increased $6 million to $214
million. The $19 million increase in Modified EBITDA was due
primarily to $14 million of higher fee-based revenues.
Year-to-date, Northeast G&P operating area reported Modified
EBITDA of $638 million, an increase of $81 million over the same
period in 2015. Adjusted EBITDA increased $40 million to $649
million. The increase in Modified EBITDA is due primarily to higher
fee-based revenues, lower O&M expenses, increased proportional
Modified EBITDA of equity-method investments and the absence of
certain 2015 impairment charges. Adjusted EBITDA 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 $166 million for
third-quarter 2016, compared with $169 million for third-quarter
2015. Adjusted EBITDA of $166 million is $5 million higher than the
same period in 2015. The $3 million decrease in Modified EBITDA was
due primarily to the absence of an $8 million insurance settlement
recorded in 2015 and lower fee-based revenues, substantially offset
by $7 million lower O&M and SG&A expenses. Adjusted EBITDA
excludes the effect of the 2015 insurance settlement.
Year-to-date, the West operating area reported Modified EBITDA
of $479 million compared with $480 million over the same period in
2015. Adjusted EBITDA of $483 million is $10 million higher than
the same period in 2015 due primarily to lower O&M and SG&A
expenses.
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 Partners’ 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) 8325-2228. 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.
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 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.
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 U.S. 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 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 Feb. 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)
2015 2016 (Dollars in millions, except
coverage ratios) 1st Qtr 2nd Qtr 3rd
Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd
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 ) $ 351 $ 353 Provision (benefit) for income taxes 3 — 1 (3 ) 1
1 (80 ) (6 ) (85 ) Interest expense 192 203 205 211 811 229 231 229
689 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 (1 ) — — (1
) (2 ) — (1 ) (28 ) (29 ) 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 419 419 423 441 1,702 435 432 426 1,293
Accretion for asset retirement obligations associated with
nonregulated operations 7 9
5 7 28
7 9 8
24 Modified EBITDA 817 1,053 1,021
1,112 4,003 955 604 1,070 2,629 Adjustments Estimated
minimum volume commitments 55 55 65 (175 ) — 60 64 70 194 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 11 19 Share of
impairment at equity-method investment 8 1 17 7 33 — — 6 6 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 related to Canada
disposition — — — — — — — 32 32 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
105 461 119
685 Adjusted EBITDA 917 1,008 1,100
1,064 4,089 1,060 1,065 1,189 3,314 Maintenance capital
expenditures (1) (54 ) (80 ) (114 ) (114 ) (362 ) (58 ) (75 ) (121
) (254 ) Interest expense (cash portion) (2) (204 ) (207 ) (219 )
(214 ) (844 ) (241 ) (245 ) (244 ) (730 ) Cash taxes (1 ) — — — (1
) — — — — Income attributable to noncontrolling interests (3) (23 )
(32 ) (27 ) (29 ) (111 ) (29 ) (13 ) (31 ) (73 ) WPZ restricted
stock unit non-cash compensation 7 6 7 7 27 7 5 2 14 Plymouth
incident adjustment 4 6
7 4 21
— — —
— Distributable cash flow attributable
to Partnership Operations 646 701
754 718
2,819 739 737
795 2,271 Total
cash distributed (4) $ 725 $ 723 $ 723 $ 725 $ 2,896 $ 725 $ 725 $
734 $ 2,184
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
1.08 1.04 Net income (loss)
divided by Total cash distributed 0.15
0.46 (0.23 ) (2.26 )
(0.47 ) 0.11 (0.11 )
0.48 0.16 Notes: (1)
Includes proportionate share of maintenance capital
expenditures of equity investments. (2) Includes
proportionate share of interest expense of equity investments.
(3) Excludes allocable share of impairment of goodwill and
certain EBITDA adjustments. (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. Cash distributions
for the third quarter of 2016 have been increased to exclude the
impact of the $150 million IDR waiver associated with the sale of
our Canadian operations.
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
3rd Qtr Year
Modified EBITDA: Central $ 133 $
160 $ 163 $ 384 $ 840 $ 157 $ 134 $ 176 $ 467 Northeast G&P 185
183 189 196 753 214 216 208 638 Atlantic-Gulf 335 389 414 385 1,523
376 357 416 1,149 West 161 150 169 77 557 155 158 166 479 NGL &
Petchem Services 6 158 85 72 321 53 (261 ) 104 (104 ) Other
(3 ) 13 1 (2 ) 9
— — — —
Total Modified
EBITDA $ 817 $ 1,053
$ 1,021 $
1,112 $ 4,003 $
955 $ 604 $
1,070 $ 2,629
Adjustments:
Central
Estimated minimum volume commitments $ 55 $ 55 $ 65 $ (175 ) $ — $
60 $ 64 $ 70 $ 194 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 70 251
Northeast
G&P
Severance and related costs — — — — — 3 — — 3 Share of impairment
at equity-method investments 8 1 17 7 33 — — 6 6 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 — 6 11
Atlantic-Gulf
Potential rate refunds associated with rate case litigation — — — —
— 15 — — 15 Severance and related costs — — — — — 8 — — 8
Constitution Pipeline project development costs — — — — — — 8 11 19
Impairment of certain assets — —
— 5 5
— — —
— Total Atlantic-Gulf adjustments — — — 5 5 23 8 11
42
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
Impairment of certain assets — — — — — — 341 — 341 Loss related to
Canada disposition — — — — — — — 32 32 Severance and related costs
— — — — — 4 — — 4 Loss related to Geismar Incident 1 1 — — 2 — — —
— Geismar Incident adjustment for insurance and timing —
(126 ) — —
(126 ) — —
— — Total NGL & Petchem Services
adjustments 1 (125 ) — — (124 ) 4 341 32 377
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 $ 119
$ 685 Adjusted EBITDA: Central $
218 $ 232 $ 230 $ 219 $ 899 $ 226 $ 246 $ 246 $ 718 Northeast
G&P 196 205 208 209 818 219 216 214 649 Atlantic-Gulf 335 389
414 390 1,528 399 365 427 1,191 West 162 150 161 175 648 159 158
166 483 NGL & Petchem Services 7 33 85 72 197 57 80 136 273
Other (1 ) (1 ) 2
(1 ) (1 ) — —
— —
Total Adjusted EBITDA
$ 917 $ 1,008
$ 1,100 $ 1,064
$ 4,089 $ 1,060
$ 1,065 $ 1,189
$ 3,314
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161031005319/en/
Williams Partners L.P.MEDIA:Keith Isbell,
918-573-7308orINVESTORS:John Porter, 918-573-0797orBrett
Krieg, 918-573-4614
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