Williams Reports Fourth-Quarter and Full-Year 2020 Financial Results

February 22, 2021 4:15 PM EST

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TULSA, Okla.--(BUSINESS WIRE)-- Williams (NYSE: WMB) today announced its unaudited financial results for the three and 12 months ended December 31, 2020.

Full-year 2020 results validate strength of natural gas strategy in the face of significant headwinds; results exceed pre-COVID-19 guidance midpoints in key metrics

  • Net income of $208 million, or $0.17 per diluted share (EPS), which includes net non-cash impairment impact of ($1.107 billion), or ($0.91) per diluted share
  • Adjusted EPS of $1.10 per diluted share - up 11% from 2019
  • Cash flow from operations (CFFO) of $3.496 billion – down approximately $200 million from 2019 primarily due to the Transco rate case refund impact
  • Available funds from operations (AFFO) of $3.638 billion increased by 1% over 2019
  • Adjusted EBITDA of $5.105 billion - up $90 million or 2%
  • DCF of $3.356 billion - up $59 million or 2% over 2019
  • Record gathering volumes of 13.2 Bcf/d; record contracted transmission capacity of 22.2 Bcf/d
  • Debt-to-Adjusted EBITDA at quarter end: 4.35x, favorable to guidance
  • Expect strong natural gas market fundamentals to drive continued growth in 2021

4Q 2020 results demonstrate stability despite ongoing external volatility

  • Net income of $115 million, or $0.09 per diluted share, which includes net non-cash impairment impact of ($245 million), or ($0.20) per diluted share
  • Adjusted EPS of $0.31 per diluted share - up 29% vs. 4Q '19
  • CFFO of $1.114 billion - up $123 million or 12% over 4Q '19
  • AFFO of $983 million - up 2% over 4Q '19
  • Adjusted EBITDA of $1.336 billion - up $52 million or 4% over 4Q '19
  • DCF of $926 million - up $98 million or 12% over 4Q '19
  • Dividend coverage ratio is 1.91x

CEO Perspective

Alan Armstrong, president and chief executive officer, made the following comments:

“Williams established all-time record results in 2020, demonstrating how durable our business can be against multiple headwinds faced by our industry including the COVID-19 pandemic, major customer bankruptcies and a highly active hurricane season, among other factors. We surpassed guidance midpoints in our key financial metrics and generated free cash flow, driven by strong operations with records for both gathered volumes and contracted transmission capacity. Looking ahead to 2021, we believe our continued operating efficiencies combined with a focus on safety performance and environmental stewardship positions Williams to generate long-term sustainable value. Our business strategy is centered on the economic and environmental benefits of natural gas and its ability to accelerate emissions reductions in a pragmatic and cost-effective way. In addition to implementing aggressive and actionable plans to reduce our own emissions by 2030, we are pursuing a broader clean energy strategy that leverages our best-in-class pipeline transportation and storage systems to integrate solar, renewable natural gas, hydrogen and other emerging opportunities.

“Over the past year, our employees have truly demonstrated our safety-driven culture by taking care to protect themselves and others during the pandemic while at the same time efficiently completing projects that deliver clean, affordable energy to key markets ahead of schedule. I am incredibly proud of the around-the-clock work of our employees and their unwavering focus on running one of the nation’s largest energy infrastructure networks with the high level of dependability that consumers have come to expect – reliability that was particularly evident on our gas transmission systems during the severe cold weather event that gripped much of the country last week. Our production supplies in the Northeast and along the Gulf Coast as well as our network of interconnections with other pipelines and strategic storage reserves ensured we were able to meet our commitments and deliver scheduled supplies with no issue. The resiliency of our natural gas network allows us to meet energy demand in the most cost-effective, reliable way possible and demonstrates the importance of natural gas in our country’s energy mix.”

 

Williams Summary Financial Information

4Q

 

Full Year

Amounts in millions, except ratios and per-share amounts. Per share amounts are reported on a diluted basis. Net income amounts are from continuing operations attributable to The Williams Companies, Inc. available to common stockholders.

2020

2019

 

2020

2019

 

 

 

 

 

 

GAAP Measures

 

 

 

 

 

Net Income

$115

 

$138

 

 

$208

 

$862

 

Net Income Per Share

$0.09

 

$0.11

 

 

$0.17

 

$0.71

 

Cash Flow From Operations (1)

$1,114

 

$991

 

 

$3,496

 

$3,693

 

 

 

 

 

 

 

Non-GAAP Measures (2)

 

 

 

 

 

Adjusted EBITDA

$1,336

 

$1,284

 

 

$5,105

 

$5,015

 

Adjusted Income

$382

 

$293

 

 

$1,333

 

$1,200

 

Adjusted Income Per Share

$0.31

 

$0.24

 

 

$1.10

 

$0.99

 

Distributable Cash Flow

$926

 

$828

 

 

$3,356

 

$3,297

 

Available Funds from Operations

$983

 

$962

 

 

$3,638

 

$3,611

 

Dividend Coverage Ratio (DCF basis)

1.91

x

1.80

x

 

1.73

x

1.79

x

 

 

 

 

 

 

Other

 

 

 

 

 

Debt-to-Adjusted EBITDA at Quarter End (3)

4.35

x

4.39

x

 

 

 

Capital Investments (4) (5)

$423

 

$408

 

 

$1,485

 

$2,476

 

 

(1) Decline due primarily to working capital changes of approximately $284 million of rate refunds related to settlement of Transco's general rate case paid in July net of approximately $95 million collected from January through June 2020.

(2) Schedules reconciling Adjusted Income, Adjusted EBITDA, Distributable Cash Flow, Available Funds from Operations and Dividend Coverage Ratio (non-GAAP measures) to the most comparable GAAP measure are available at www.williams.com and as an attachment to this news release.

(3) Does not represent leverage ratios measured for WMB credit agreement compliance or leverage ratios as calculated by the major credit ratings agencies. Debt is net of cash on hand, and Adjusted EBITDA reflects the sum of the last four quarters.

(4) YTD 2019 excludes $728 million (net of cash acquired) for the purchase of the remaining 38% of UEOM as this amount was provided for at the close of the Northeast JV by our JV partner, CPPIB, in June 2019.

(5) Capital Investments includes increases to property, plant, and equipment, purchases of businesses, net of cash acquired, and purchases of and contributions to equity-method investments.

GAAP Measures

  • Fourth-quarter 2020 net income from continuing operations attributable to Williams declined slightly compared to the prior year as the benefits of significantly lower operating and administrative costs from cost-savings initiatives and a change in an employee benefit policy, and higher service revenues were more than offset by higher net impairment charges.
  • Improved service revenues reflect growth from Transco and Northwest Pipeline expansion projects and the benefit of certain minimum volume commitment (MVC) revenue in the West, partially offset by lower non-cash deferred revenue recognition at Gulfstar One and the impact of 2020 hurricane-related shut-ins in the Gulf of Mexico. The higher net impairment charges include the 2020 impairments of the Northeast Supply Enhancement project and our investment in Rocky Mountain Midstream, partially offset by the 2019 impairment of the Constitution Pipeline project, net of amounts attributable to noncontrolling interests in that project.
  • Full-year 2020 net income similarly benefited from significantly lower operating and administrative costs, including the absence of prior year severance charges and the benefit of a change in an employee benefit policy, while service revenues declined slightly as growth from our Northeast JV and pipeline expansion projects and the benefit of certain MVCs was more than offset by decreases in non-cash deferred revenue recognition at Gulfstar One and in the Barnett Shale, as well as the expiration of a Barnett Shale MVC in 2019.
  • The year-over-year change was also significantly impacted by net impairment charges, reflecting 2020 impairments related to equity-method investments, goodwill, and certain assets which resulted in a total $1.54 billion pre-tax charge, of which $65 million was attributable to noncontrolling interests. The 2019 period included similar impairment charges totaling $650 million, of which $209 million was attributable to noncontrolling interests, along with a $122 million gain on the sale of our Jackalope investment. The provision for income taxes changed favorably by $256 million primarily due to the change in pre-tax earnings.
  • Cash flow from operations for the fourth quarter of 2020 increased as compared to the same period of 2019 primarily due to net favorable changes in net working capital. The decrease for the full-year period was primarily due to working capital changes involving $284 million of rate refunds related to the settlement of Transco’s general rate case paid in July, net of approximately $95 million of that amount collected from January through June 2020.

Non-GAAP Measures

  • Adjusted EBITDA for the quarter improved over the prior year as increased service revenues from pipeline expansion projects, higher Northeast G&P JV EBITDA, and lower operating and administrative costs were partially offset by lower non-cash deferred revenue recognition at Gulfstar One and the impact of 2020 hurricane-related shut-ins in the Gulf of Mexico.
  • Full-year Adjusted EBITDA improved driven by lower operating and administrative costs and higher contributions from our Northeast G&P investments, partially offset by the previously described slight decline in service revenues and lower commodity margins.
  • Changes in Adjusted Income for the quarter and full-year periods were similarly driven by the changes in Adjusted EBITDA.
  • The increase in fourth quarter 2020 DCF compared to the prior year is driven by the increase in adjusted EBITDA and an income tax refund received. The increase in full-year DCF is also driven by higher adjusted EBITDA, as well as lower maintenance capital, partially offset by increased distributions to noncontrolling interests driven by our Northeast JV.

Business Segment Results & Form 10-K

Williams' operations are comprised of the following reportable segments: Transmission & Gulf of Mexico, Northeast G&P, West and Other. For more information, see the company's 2020 Form 10-K.

 

 

Quarter-To-Date

 

Full Year

Amounts in millions

Modified EBITDA

 

Adjusted EBITDA

 

Modified EBITDA

 

Adjusted EBITDA

4Q 2020

4Q 2019

Change

 

4Q 2020

4Q 2019

Change

 

2020

2019

Change

 

2020

2019

Change

Transmission & Gulf of Mexico

$486

 

$284

 

$202

 

 

$644

 

$643

 

$1

 

 

$2,379

 

$2,175

 

$204

 

 

$2,552

 

$2,587

 

($35

)

Northeast G&P

363

 

367

 

(4

)

 

406

 

377

 

29

 

 

1,489

 

1,314

 

175

 

 

1,535

 

1,341

 

194

 

West

283

 

239

 

44

 

 

277

 

263

 

14

 

 

998

 

952

 

46

 

 

990

 

1,064

 

(74

)

Other

(23

)

5

 

(28

)

 

9

 

1

 

8

 

 

(15

)

6

 

(21

)

 

28

 

23

 

5

 

Totals

$1,109

 

$895

 

$214

 

 

$1,336

 

$1,284

 

$52

 

 

$4,851

 

$4,447

 

$404

 

 

$5,105

 

$5,015

 

$90

 

 

Note: Williams uses Modified EBITDA for its segment reporting. Definitions of Modified EBITDA and Adjusted EBITDA and schedules reconciling to net income are included in this news release.

Transmission & Gulf of Mexico

  • Fourth-quarter 2020 Modified and Adjusted EBITDA benefited from lower operating and administrative costs, partially offset by decreased service revenues from lower non-cash deferred revenue amortization at Gulfstar One and the impact of 2020 hurricane-related shut-ins, partially offset by Transco expansion projects placed in service.
  • Full-year Modified and Adjusted EBITDA also benefited from lower operating and administrative costs, partially offset by similar decreases in service revenues.
  • Modified EBITDA for the comparative periods benefited from the absence of both 2019 severance charges and the 2019 impairment of the Constitution Pipeline project, partially offset by the 2020 impairment of the Northeast Supply Enhancement project. Both comparative periods reflect the reversal of previously capitalized costs, while 2020 also benefited from a change in employee benefit policy. These items have been excluded from Adjusted EBITDA.

Northeast G&P

  • Fourth-quarter 2020 Modified and Adjusted EBITDA reflect lower operating and administrative costs and higher contributions from equity-method investments. Full-year 2020 Modified and Adjusted EBITDA also reflect lower operating and administrative costs and higher contributions from equity-method investments, as well as increased service revenues associated with higher volumes. The full-year revenue comparison also benefited from the additional ownership in Utica East Ohio Midstream following the March 2019 acquisition and contribution to our Northeast JV.
  • Modified EBITDA for both periods includes our share of impairments at equity-method investees and the benefit of a 2020 change in employee benefit policy, while the full-year comparison reflects the absence of 2019 severance charges. These items are all excluded from Adjusted EBITDA.
  • Excluding Blue Racer volumes for fourth-quarter 2020 operating stats, Northeast G&P gross gathering volumes for fourth-quarter 2020, including 100% of operated equity-method investments, increased by 7% over the same period in 2019 and gross processing plant inlet volumes for fourth-quarter 2020 increased by 9% over the same period in 2019.

West

  • The changes in fourth-quarter 2020 Modified and Adjusted EBITDA reflect higher service revenues associated with certain MVCs and higher rates partially offset by lower volumes, as well as reduced operating and administrative costs. The changes in full-year 2020 Modified and Adjusted EBITDA reflect decreases in non-cash deferred revenue recognition in the Barnett Shale, as well as the expiration of the Barnett Shale MVC in 2019, partially offset by lower operating and administrative costs. The benefit of higher MVCs was more than offset by the impact of lower volumes.
  • Modified EBITDA for the quarter and full-year period also benefited from the absence of prior year impairment charges, as well as the benefit of a change in employee benefit policy. The full-year comparison also reflects the absence of prior-year severance charges. All of these items are excluded from Adjusted EBITDA.

2021 Financial Guidance

The company expects 2021 Adjusted EBITDA between $5.05 billion and $5.35 billion. The company also expects 2021 growth capex between $1 billion to $1.2 billion and leverage ratio of 4.25x, providing visibility to the company’s 4.20x leverage metric objective. Importantly, Williams also anticipates it will generate positive free cash flow (after capex and dividends), allowing it to retain financial flexibility.

Williams' Fourth-Quarter 2020 Materials to be Posted Shortly; Q&A Webcast Scheduled for Tomorrow

Williams' fourth-quarter 2020 earnings presentation will be posted at www.williams.com. The company’s fourth-quarter 2020 earnings conference call and webcast with analysts and investors is scheduled for Tuesday, Feb. 23, at 9:30 a.m. Eastern Time (8:30 a.m. Central Time). Participants who wish to join the call by phone must register using the following link: http://www.directeventreg.com/registration/event/5346299

A webcast link to the conference call is available at www.williams.com. A replay of the webcast will be available on the website for at least 90 days following the event.

About Williams

Williams (NYSE: WMB) is committed to being the leader in providing infrastructure that safely delivers natural gas products to reliably fuel the clean energy economy. Headquartered in Tulsa, Oklahoma, Williams is an industry-leading, investment grade C-Corp with operations across the natural gas value chain including gathering, processing, interstate transportation and storage of natural gas and natural gas liquids. With major positions in top U.S. supply basins, Williams connects the best supplies with the growing demand for clean energy. Williams owns and operates more than 30,000 miles of pipelines system wide – including Transco, the nation’s largest volume and fastest growing pipeline – and handles approximately 30 percent of the natural gas in the United States that is used every day for clean-power generation, heating and industrial use. www.williams.com

 

The Williams Companies, Inc.

Consolidated Statement of Operations

 

 

 

Year Ended December 31,

 

 

2020

 

2019

 

2018

 

(Millions, except per-share amounts)

Revenues:

 

 

 

 

 

 

Service revenues

 

$

5,924

 

 

$

5,933

 

 

$

5,502

 

Service revenues – commodity consideration

 

129

 

 

203

 

 

400

 

Product sales

 

1,666

 

 

2,065

 

 

2,784

 

Total revenues

 

7,719

 

 

8,201

 

 

8,686

 

Costs and expenses:

 

 

 

 

 

 

Product costs

 

1,545

 

 

1,961

 

 

2,707

 

Processing commodity expenses

 

68

 

 

105

 

 

137

 

Operating and maintenance expenses

 

1,326

 

 

1,468

 

 

1,507

 

Depreciation and amortization expenses

 

1,721

 

 

1,714

 

 

1,725

 

Selling, general, and administrative expenses

 

466

 

 

558

 

 

569

 

Impairment of certain assets

 

182

 

 

464

 

 

1,915

 

Impairment of goodwill

 

187

 

 

 

 

 

Gain on sale of certain assets and businesses

 

 

 

2

 

 

(692

)

Other (income) expense – net

 

22

 

 

8

 

 

50

 

Total costs and expenses

 

5,517

 

 

6,280

 

 

7,918

 

Operating income (loss)

 

2,202

 

 

1,921

 

 

768

 

Equity earnings (losses)

 

328

 

 

375

 

 

396

 

Impairment of equity-method investments

 

(1,046

)

 

(186

)

 

(32

)

Other investing income (loss) – net

 

8

 

 

107

 

 

219

 

Interest incurred

 

(1,192

)

 

(1,218

)

 

(1,160

)

Interest capitalized

 

20

 

 

32

 

 

48

 

Other income (expense) – net

 

(43

)

 

33

 

 

92

 

Income (loss) from continuing operations before income taxes

 

277

 

 

1,064

 

 

331

 

Less: Provision (benefit) for income taxes

 

79

 

 

335

 

 

138

 

Income (loss) from continuing operations

 

198

 

 

729

 

 

193

 

Income (loss) from discontinued operations

 

 

 

(15

)

 

 

Net income (loss)

 

198

 

 

714

 

 

193

 

Less: Net income (loss) attributable to noncontrolling interests

 

(13

)

 

(136

)

 

348

 

Net income (loss) attributable to The Williams Companies, Inc

 

211

 

 

850

 

 

(155

)

Less: Preferred stock dividends

 

3

 

 

3

 

 

1

 

Net income (loss) available to common stockholders

 

$

208

 

 

$

847

 

 

$

(156

)

Amounts attributable to The Williams Companies, Inc. available to common stockholders:

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

208

 

 

$

862

 

 

$

(156

)

Income (loss) from discontinued operations

 

 

 

(15

)

 

 

Net income (loss)

 

$

208

 

 

$

847

 

 

$

(156

)

Basic earnings (loss) per common share:

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

.17

 

 

$

.71

 

 

$

(.16

)

Income (loss) from discontinued operations

 

 

 

(.01

)

 

 

Net income (loss)

 

$

.17

 

 

$

.70

 

 

$

(.16

)

Weighted-average shares (thousands)

 

1,213,631

 

 

1,212,037

 

 

973,626

 

Diluted earnings (loss) per common share:

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

.17

 

 

$

.71

 

 

$

(.16

)

Income (loss) from discontinued operations

 

 

 

(.01

)

 

 

Net income (loss)

 

$

.17

 

 

$

.70

 

 

$

(.16

)

Weighted-average shares (thousands)

 

1,215,165

 

 

1,214,011

 

 

973,626

 

 

The Williams Companies, Inc.

Consolidated Balance Sheet

 

 

 

December 31,

 

 

2020

 

2019

 

 

(Millions, except per-share amounts)

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

142

 

 

$

289

 

Trade accounts and other receivables

 

1,000

 

 

1,002

 

Allowance for doubtful accounts

 

(1

)

 

(6

)

Trade accounts and other receivables - net

 

999

 

 

996

 

Inventories

 

136

 

 

125

 

Other current assets and deferred charges

 

152

 

 

170

 

Total current assets

 

1,429

 

 

1,580

 

 

 

 

 

 

Investments

 

5,159

 

 

6,235

 

Property, plant, and equipment – net

 

28,929

 

 

29,200

 

Intangible assets – net of accumulated amortization

 

7,444

 

 

7,959

 

Regulatory assets, deferred charges, and other

 

1,204

 

 

1,066

 

Total assets

 

$

44,165

 

 

$

46,040

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

482

 

 

$

552

 

Accrued liabilities

 

944

 

 

1,276

 

Long-term debt due within one year

 

893

 

 

2,140

 

Total current liabilities

 

2,319

 

 

3,968

 

 

 

 

 

 

Long-term debt

 

21,451

 

 

20,148

 

Deferred income tax liabilities

 

1,923

 

 

1,782

 

Regulatory liabilities, deferred income, and other

 

3,889

 

 

3,778

 

Contingent liabilities and commitments

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred stock

 

35

 

 

35

 

Common stock ($1 par value; 1,470 million shares authorized at December 31, 2020 and December 31, 2019; 1,248 million shares issued at December 31, 2020 and 1,247 million shares issued at December 31, 2019)

 

1,248

 

 

1,247

 

Capital in excess of par value

 

24,371

 

 

24,323

 

Retained deficit

 

(12,748

)

 

(11,002

)

Accumulated other comprehensive income (loss)

 

(96

)

 

(199

)

Treasury stock, at cost (35 million shares of common stock)

 

(1,041

)

 

(1,041

)

Total stockholders’ equity

 

11,769

 

 

13,363

 

Noncontrolling interests in consolidated subsidiaries

 

2,814

 

 

3,001

 

Total equity

 

14,583

 

 

16,364

 

Total liabilities and equity

 

$

44,165

 

 

$

46,040

 

 

The Williams Companies, Inc.

Consolidated Statement of Cash Flows

 

 

 

Year Ended December 31,

 

 

2020

 

2019

 

2018

 

 

(Millions)

OPERATING ACTIVITIES:

 

 

 

 

 

 

Net income (loss)

 

$

198

 

 

$

714

 

 

$

193

 

Adjustments to reconcile to net cash provided (used) by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

1,721

 

 

1,714

 

 

1,725

 

Provision (benefit) for deferred income taxes

 

108

 

 

376

 

 

220

 

Equity (earnings) losses

 

(328

)

 

(375

)

 

(396

)

Distributions from unconsolidated affiliates

 

653

 

 

657

 

 

693

 

Gain on disposition of equity-method investments

 

 

 

(122

)

 

 

(Gain) on sale of certain assets and businesses

 

 

 

2

 

 

(692

)

(Gain) loss on deconsolidation of businesses

 

 

 

29

 

 

(203

)

Impairment of goodwill

 

187

 

 

 

 

 

Impairment of equity-method investments

 

1,046

 

 

186

 

 

32

 

Impairment of certain assets

 

182

 

 

464

 

 

1,915

 

Amortization of stock-based awards

 

52

 

 

57

 

 

55

 

Cash provided (used) by changes in current assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

(2

)

 

34

 

 

(36

)

Inventories

 

(11

)

 

5

 

 

(16

)

Other current assets and deferred charges

 

11

 

 

21

 

 

17

 

Accounts payable

 

(7

)

 

(46

)

 

(93

)

Accrued liabilities

 

(309

)

 

153

 

 

23

 

Other, including changes in noncurrent assets and liabilities

 

(5

)

 

(176

)

 

(144

)

Net cash provided (used) by operating activities

 

3,496

 

 

3,693

 

 

3,293

 

FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from long-term debt

 

3,899

 

 

767

 

 

3,926

 

Payments of long-term debt

 

(3,841

)

 

(909

)

 

(3,204

)

Proceeds from issuance of common stock

 

9

 

 

10

 

 

15

 

Proceeds from sale of partial interest in consolidated subsidiary

 

 

 

1,334

 

 

 

Common dividends paid

 

(1,941

)

 

(1,842

)

 

(1,386

)

Dividends and distributions paid to noncontrolling interests

 

(185

)

 

(124

)

 

(591

)

Contributions from noncontrolling interests

 

7

 

 

36

 

 

15

 

Payments for debt issuance costs

 

(20

)

 

 

 

(26

)

Other – net

 

(13

)

 

(17

)

 

(48

)

Net cash provided (used) by financing activities

 

(2,085

)

 

(745

)

 

(1,299

)

INVESTING ACTIVITIES:

 

 

 

 

 

 

Property, plant, and equipment:

 

 

 

 

 

 

Capital expenditures (1)

 

(1,239

)

 

(2,109

)

 

(3,256

)

Dispositions – net

 

(36

)

 

(40

)

 

(7

)

Contributions in aid of construction

 

37

 

 

52

 

 

411

 

Proceeds from sale of businesses, net of cash divested

 

 

 

(2

)

 

1,296

 

Purchases of businesses, net of cash acquired

 

 

 

(728

)

 

 

Proceeds from dispositions of equity-method investments

 

 

 

485

 

 

 

Purchases of and contributions to equity-method investments

 

(325

)

 

(453

)

 

(1,132

)

Other – net

 

5

 

 

(32

)

 

(37

)

Net cash provided (used) by investing activities

 

(1,558

)

 

(2,827

)

 

(2,725

)

Increase (decrease) in cash and cash equivalents

 

(147

)

 

121

 

 

(731

)

Cash and cash equivalents at beginning of year

 

289

 

 

168

 

 

899

 

Cash and cash equivalents at end of year

 

$

142

 

 

$

289

 

 

$

168

 

_________

 

 

 

 

 

 

(1) Increases to property, plant, and equipment

 

$

(1,160

)

 

$

(2,023

)

 

$

(3,021

)

Changes in related accounts payable and accrued liabilities

 

(79

)

 

(86

)

 

(235

)

Capital expenditures

 

$

(1,239

)

 

$

(2,109

)

 

$

(3,256

)

Transmission & Gulf of Mexico

 

(UNAUDITED)

 

 

2019

 

2020

 

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

Regulated interstate natural gas transportation, storage, and other revenues (1)

$

658

 

$

650

 

$

682

 

$

690

 

$

2,680

 

 

$

692

 

$

676

 

$

686

 

$

702

 

$

2,756

 

 

 

Gathering, processing, and transportation revenues

128

 

121

 

117

 

113

 

479

 

 

99

 

78

 

85

 

86

 

348

 

 

Other fee revenues (1)

3

 

5

 

3

 

4

 

15

 

 

4

 

5

 

3

 

6

 

18

 

 

Commodity margins

8

 

7

 

6

 

4

 

25

 

 

3

 

1

 

4

 

4

 

12

 

 

Operating and administrative costs (1)

(197

)

(230

)

(209

)

(242

)

(878

)

 

(184

)

(189

)

(192

)

(192

)

(757

)

 

Other segment income (expenses) - net

(6

)

(7

)

22

 

22

 

31

 

 

4

 

2

 

(8

)

8

 

6

 

 

Impairment of certain assets (2)

 

 

 

(354

)

(354

)

 

 

 

 

(170

)

(170

)

 

Proportional Modified EBITDA of equity-method investments

42

 

44

 

44

 

47

 

177

 

 

44

 

42

 

38

 

42

 

166

 

 

Modified EBITDA

636

 

590

 

665

 

284

 

2,175

 

 

662

 

615

 

616

 

486

 

2,379

 

 

Adjustments

 

38

 

15

 

359

 

412

 

 

7

 

2

 

6

 

158

 

173

 

 

Adjusted EBITDA

$

636

 

$

628

 

$

680

 

$

643

 

$

2,587

 

 

$

669

 

$

617

 

$

622

 

$

644

 

$

2,552

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statistics for Operated Assets

 

 

 

 

 

 

 

 

 

 

 

 

Natural Gas Transmission

 

 

 

 

 

 

 

 

 

 

 

 

Transcontinental Gas Pipe Line

 

 

 

 

 

 

 

 

 

 

 

 

Avg. daily transportation volumes (Tbtu)

13.2

 

12.2

 

13.2

 

13.3

 

13.0

 

 

13.8

 

12.0

 

12.8

 

13.2

 

12.9

 

 

Avg. daily firm reserved capacity (Tbtu)

17.1

 

17.0

 

17.3

 

17.5

 

17.2

 

 

17.7

 

17.5

 

18.0

 

18.2

 

17.9

 

 

Northwest Pipeline LLC

 

 

 

 

 

 

 

 

 

 

 

 

Avg. daily transportation volumes (Tbtu)

2.7

 

2.0

 

1.9

 

2.7

 

2.3

 

 

2.6

 

1.9

 

1.8

 

2.5

 

2.2

 

 

Avg. daily firm reserved capacity (Tbtu)

3.1

 

3.0

 

3.0

 

3.0

 

3.0

 

 

3.0

 

3.0

 

3.0

 

2.9

 

3.0

 

 

Gulfstream - Non-consolidated

 

 

 

 

 

 

 

 

 

 

 

 

Avg. daily transportation volumes (Tbtu)

1.1

 

1.3

 

1.3

 

1.2

 

1.2

 

 

1.2

 

1.2

 

1.3

 

1.1

 

1.2

 

 

Avg. daily firm reserved capacity (Tbtu)

1.3

 

1.3

 

1.3

 

1.3

 

1.3

 

 

1.3

 

1.3

 

1.3

 

1.3

 

1.3

 

 

Gathering, Processing, and Crude Oil Transportation

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated (3)

 

 

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

0.25

 

0.25

 

0.22

 

0.29

 

0.25

 

 

0.30

 

0.23

 

0.23

 

0.26

 

0.25

 

 

Plant inlet natural gas volumes (Bcf/d)

0.53

 

0.55

 

0.50

 

0.58

 

0.54

 

 

0.58

 

0.50

 

0.40

 

0.46

 

0.48

 

 

NGL production (Mbbls/d)

36

 

33

 

27

 

31

 

32

 

 

32

 

25

 

27

 

30

 

29

 

 

NGL equity sales (Mbbls/d)

7

 

9

 

5

 

6

 

7

 

 

5

 

4

 

5

 

5

 

5

 

 

Crude oil transportation volumes (Mbbls/d)

146

 

136

 

128

 

135

 

136

 

 

138

 

92

 

121

 

132

 

121

 

 

Non-consolidated (4)

 

 

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

0.35

 

0.38

 

0.36

 

0.35

 

0.36

 

 

0.35

 

0.31

 

0.26

 

0.30

 

0.30

 

 

Plant inlet natural gas volumes (Bcf/d)

0.35

 

0.39

 

0.36

 

0.35

 

0.36

 

 

0.35

 

0.31

 

0.25

 

0.30

 

0.30

 

 

NGL production (Mbbls/d)

24

 

27

 

24

 

26

 

25

 

 

24

 

23

 

17

 

21

 

21

 

 

NGL equity sales (Mbbls/d)

7

 

8

 

6

 

5

 

6

 

 

5

 

8

 

4

 

6

 

6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes certain amounts associated with revenues and operating costs for tracked or reimbursable charges.

 

(2) Our partners' $209 million share of the fourth-quarter 2019 impairment of the Constitution pipeline project is reflected outside of Modified EBITDA within Net income (loss) attributable to noncontrolling interests.

 

(3) Excludes volumes associated with equity-method investments that are not consolidated in our results.

 

(4) Includes 100% of the volumes associated with operated equity-method investments.

 

 

Northeast G&P

 

(UNAUDITED)

 

 

2019

 

2020

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

Gathering, processing, transportation, and fractionation revenues

$

239

 

$

291

 

$

310

 

$

331

 

$

1,171

 

 

$

312

 

$

308

 

$

332

 

$

327

 

$

1,279

 

 

Other fee revenues (1)

23

 

21

 

23

 

24

 

91

 

 

25

 

25

 

22

 

24

 

96

 

 

Commodity margins

2

 

 

1

 

(1

)

2

 

 

1

 

1

 

1

 

1

 

4

 

 

Operating and administrative costs (1)

(83

)

(112

)

(100

)

(98

)

(393

)

 

(87

)

(86

)

(85

)

(84

)

(342

)

 

Other segment income (expenses) - net

(4

)

 

3

 

 

(1

)

 

(2

)

(4

)

(4

)

1

 

(9

)

 

Impairment of certain assets

 

 

 

(10

)

(10

)

 

 

 

 

(12

)

(12

)

 

Proportional Modified EBITDA of equity-method investments

122

 

103

 

108

 

121

 

454

 

 

120

 

126

 

121

 

106

 

473

 

 

Modified EBITDA

299

 

303

 

345

 

367

 

1,314

 

 

369

 

370

 

387

 

363

 

1,489

 

 

Adjustments

3

 

16

 

(2

)

10

 

27

 

 

1

 

(7

)

9

 

43

 

46

 

 

Adjusted EBITDA

$

302

 

$

319

 

$

343

 

$

377

 

$

1,341

 

 

$

370

 

$

363

 

$

396

 

$

406

 

$

1,535

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statistics for Operated Assets

 

 

 

 

 

 

 

 

 

 

 

 

Gathering and Processing

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated (2)

 

 

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

4.05

 

4.16

 

4.33

 

4.41

 

4.24

 

 

4.27

 

4.14

 

4.47

 

4.36

 

4.31

 

 

Plant inlet natural gas volumes (Bcf/d)

0.63

 

1.04

 

1.16

 

1.33

 

1.04

 

 

1.24

 

1.22

 

1.36

 

1.45

 

1.32

 

 

NGL production (Mbbls/d)

44

 

58

 

92

 

106

 

76

 

 

92

 

85

 

114

 

111

 

101

 

 

NGL equity sales (Mbbls/d)

4

 

3

 

3

 

2

 

3

 

 

2

 

2

 

2

 

2

 

2

 

 

Non-consolidated (3)

 

 

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

4.27

 

4.08

 

4.35

 

4.47

 

4.29

 

 

4.40

 

4.68

 

4.94

 

5.11

 

4.78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges.

 

(2) Includes volumes associated with Susquehanna Supply Hub, the Northeast JV, and Utica Supply Hub, all of which are consolidated. The Northeast JV includes 100% of volumes handled by UEOM from the date of consolidation on March 18, 2019, but does not include volumes prior to that date as we did not operate UEOM.

 

(3) Includes 100% of the volumes associated with operated equity-method investments, including the Laurel Mountain Midstream partnership; and the Bradford Supply Hub and a portion of the Marcellus South Supply Hub within the Appalachia Midstream Services partnership. Beginning November 18, 2020, we operate Blue Racer. Blue Racer gathering volumes of 1.38 Bcf/d, plant inlet natural gas volumes of 0.95 Bcf/d, NGL production of 65 Mbbls/d, and NGL equity sales of 6 Mbbls/d have been excluded.

 

West

 

(UNAUDITED)

 

 

2019

 

2020

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

Gathering, processing, transportation, storage, and fractionation revenues

$

344

 

$

355

 

$

307

 

$

302

 

$

1,308

 

 

$

299

 

$

297

 

$

288

 

$

320

 

$

1,204

 

 

Other fee revenues (1)

7

 

6

 

6

 

4

 

23

 

 

6

 

13

 

16

 

15

 

50

 

 

Commodity margins

19

 

18

 

24

 

33

 

94

 

 

2

 

30

 

28

 

25

 

85

 

 

Operating and administrative costs (1)

(125

)

(135

)

(116

)

(114

)

(490

)

 

(115

)

(111

)

(108

)

(105

)

(439

)

 

Other segment income (expenses) - net

(3

)

4

 

(5

)

6

 

2

 

 

(5

)

 

(7

)

 

(12

)

 

Impairment of certain assets

(12

)

(64

)

 

(24

)

(100

)

 

 

 

 

 

 

 

Proportional Modified EBITDA of equity-method investments

26

 

28

 

29

 

32

 

115

 

 

28

 

24

 

30

 

28

 

110

 

 

Modified EBITDA

256

 

212

 

245

 

239

 

952

 

 

215

 

253

 

247

 

283

 

998

 

 

Adjustments

14

 

75

 

(1

)

24

 

112

 

 

1

 

(1

)

(2

)

(6

)

(8

)

 

Adjusted EBITDA

$

270

 

$

287

 

$

244

 

$

263

 

$

1,064

 

 

$

216

 

$

252

 

$

245

 

$

277

 

$

990

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statistics for Operated Assets

 

 

 

 

 

 

 

 

 

 

 

 

Gathering and Processing

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated (2)

 

 

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

3.42

 

3.53

 

3.61

 

3.51

 

3.52

 

 

3.43

 

3.40

 

3.28

 

3.19

 

3.33

 

 

Plant inlet natural gas volumes (Bcf/d)

1.41

 

1.52

 

1.56

 

1.44

 

1.48

 

 

1.26

 

1.33

 

1.31

 

1.13

 

1.25

 

 

NGL production (Mbbls/d)

62

 

59

 

48

 

46

 

54

 

 

35

 

51

 

71

 

39

 

49

 

 

NGL equity sales (Mbbls/d)

27

 

28

 

17

 

17

 

22

 

 

12

 

25

 

34

 

18

 

22

 

 

Non-consolidated (3)

 

 

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

0.17

 

0.15

 

0.21

 

0.27

 

0.20

 

 

0.20

 

0.24

 

0.28

 

0.30

 

0.25

 

 

Plant inlet natural gas volumes (Bcf/d)

0.17

 

0.14

 

0.21

 

0.26

 

0.20

 

 

0.20

 

0.23

 

0.28

 

0.29

 

0.25

 

 

NGL production (Mbbls/d)

7

 

1

 

18

 

22

 

12

 

 

17

 

23

 

26

 

26

 

23

 

 

NGL and Crude Oil Transportation volumes (Mbbls/d) (4)

254

 

269

 

250

 

238

 

253

 

 

227

 

142

 

156

 

147

 

168

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges.

 

(2) Excludes volumes associated with equity-method investments that are not consolidated in our results.

 

(3) Includes 100% of the volumes associated with operated equity-method investments, including the Jackalope Gas Gathering System (sold in April 2019) and Rocky Mountain Midstream.

 

(4) Includes 100% of the volumes associated with operated equity-method investments, including the Overland Pass Pipeline Company and Rocky Mountain Midstream.

 

Capital Expenditures and Investments

 

(UNAUDITED)

 

 

2019

 

2020

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

204

 

$

255

 

$

543

 

$

252

 

$

1,254

 

 

$

185

 

$

181

 

$

192

 

$

190

 

$

748

 

 

Northeast G&P

152

 

177

 

131

 

74

 

534

 

 

46

 

41

 

32

 

38

 

157

 

 

West

58

 

59

 

107

 

76

 

300

 

 

72

 

80

 

93

 

65

 

310

 

 

Other

8

 

6

 

5

 

2

 

21

 

 

3

 

5

 

8

 

8

 

24

 

 

Total (1)

$

422

 

$

497

 

$

786

 

$

404

 

$

2,109

 

 

$

306

 

$

307

 

$

325

 

$

301

 

$

1,239

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of investments:

 

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

 

$

12

 

$

3

 

$

1

 

$

16

 

 

$

1

 

$

1

 

$

34

 

$

1

 

$

37

 

 

Northeast G&P

47

 

61

 

34

 

63

 

205

 

 

27

 

30

 

47

 

174

 

278

 

 

West

52

 

70

 

82

 

28

 

232

 

 

2

 

5

 

3

 

 

10

 

 

Total

$

99

 

$

143

 

$

119

 

$

92

 

$

453

 

 

$

30

 

$

36

 

$

84

 

$

175

 

$

325

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary:

 

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

204

 

$

267

 

$

546

 

$

253

 

$

1,270

 

 

$

186

 

$

182

 

$

226

 

$

191

 

$

785

 

 

Northeast G&P

199

 

238

 

165

 

137

 

739

 

 

73

 

71

 

79

 

212

 

435

 

 

West

110

 

129

 

189

 

104

 

532

 

 

74

 

85

 

96

 

65

 

320

 

 

Other

8

 

6

 

5

 

2

 

21

 

 

3

 

5

 

8

 

8

 

24

 

 

Total

$

521

 

$

640

 

$

905

 

$

496

 

$

2,562

 

 

$

336

 

$

343

 

$

409

 

$

476

 

$

1,564

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital investments:

 

 

 

 

 

 

 

 

 

 

 

 

Increases to property, plant, and equipment

$

418

 

$

559

 

$

730

 

$

316

 

$

2,023

 

 

$

254

 

$

327

 

$

331

 

$

248

 

$

1,160

 

 

Purchases of businesses, net of cash acquired

727

 

 

1

 

 

728

 

 

 

 

 

 

 

 

Purchases of investments

99

 

143

 

119

 

92

 

453

 

 

30

 

36

 

84

 

175

 

325

 

 

Total

$

1,244

 

$

702

 

$

850

 

$

408

 

$

3,204

 

 

$

284

 

$

363

 

$

415

 

$

423

 

$

1,485

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Increases to property, plant, and equipment

$

418

 

$

559

 

$

730

 

$

316

 

$

2,023

 

 

$

254

 

$

327

 

$

331

 

$

248

 

$

1,160

 

 

Changes in related accounts payable and accrued liabilities

4

 

(62

)

56

 

88

 

86

 

 

52

 

(20

)

(6

)

53

 

79

 

 

Capital expenditures

$

422

 

$

497

 

$

786

 

$

404

 

$

2,109

 

 

$

306

 

$

307

 

$

325

 

$

301

 

$

1,239

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contributions from noncontrolling interests

$

4

 

$

28

 

$

 

$

4

 

$

36

 

 

$

2

 

$

2

 

$

1

 

$

2

 

$

7

 

 

Contributions in aid of construction

$

10

 

$

8

 

$

7

 

$

27

 

$

52

 

 

$

14

 

$

5

 

$

8

 

$

10

 

$

37

 

 

Proceeds from sale of businesses, net of cash divested

$

(2

)

$

 

$

 

$

 

$

(2

)

 

$

 

$

 

$

 

$

 

$

 

 

Proceeds from sale of partial interest in consolidated subsidiary

$

 

$

1,330

 

$

 

$

4

 

$

1,334

 

 

$

 

$

 

$

 

$

 

$

 

 

Proceeds from disposition of equity-method investments

$

 

$

485

 

$

 

$

 

$

485

 

 

$

 

$

 

$

 

$

 

$

 

 

 

 

Non-GAAP Measures

This news release and accompanying materials may include certain financial measures – Adjusted EBITDA, adjusted income (“earnings”), adjusted earnings per share, distributable cash flow, available funds from operations and dividend coverage ratio – that are non-GAAP financial measures as defined under the rules of the SEC.

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. Such items are excluded from net income to determine adjusted income. Management believes these measure provide investors meaningful insight into results from ongoing operations.

Distributable cash flow is defined as Adjusted EBITDA less maintenance capital expenditures, cash portion of net interest expense, income attributable to or dividends/ distributions paid to noncontrolling interests and cash income taxes, 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 dividends paid (dividend coverage ratio). This measure reflects Williams’ distributable cash flow relative to its actual cash dividends paid.

Available funds from operations is defined as cash flow from operations excluding the effect of changes in working capital and certain other changes in noncurrent assets and liabilities, reduced by preferred dividends and net distributions to noncontrolling interests.

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 assets and the cash that the business is generating.

Neither Adjusted EBITDA, adjusted income, distributable cash flow, nor available funds from operations 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.

 

Reconciliation of Income (Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income

 

(UNAUDITED)

 

 

2019

 

2020

 

(Dollars in millions, except per-share amounts)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders

$

194

 

$

310

 

$

220

 

$

138

 

$

862

 

 

$

(518

)

$

303

 

$

308

 

$

115

 

$

208

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations - diluted earnings (loss) per common share (1)

$

.16

 

$

.26

 

$

.18

 

$

.11

 

$

.71

 

 

$

(.43

)

$

.25

 

$

.25

 

$

.09

 

$

.17

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

 

 

 

 

 

 

 

 

 

 

 

 

Constitution pipeline project development costs

$

 

$

1

 

$

1

 

$

1

 

$

3

 

 

$

 

$

 

$

 

$

 

$

 

 

Northeast Supply Enhancement project development costs

 

 

 

 

 

 

 

3

 

3

 

 

6

 

 

Impairment of certain assets (2)

 

 

 

354

 

354

 

 

 

 

 

170

 

170

 

 

Pension plan settlement charge

 

 

 

 

 

 

4

 

1

 

 

 

5

 

 

Adjustment of Transco’s regulatory asset for post-WPZ Merger state deferred income tax change consistent with filed rate case

 

 

 

 

 

 

2

 

 

 

 

2

 

 

Benefit of change in employee benefit policy

 

 

 

 

 

 

 

(3

)

(6

)

(13

)

(22

)

 

Reversal of costs capitalized in prior periods

 

15

 

 

1

 

16

 

 

 

 

10

 

1

 

11

 

 

Severance and related costs

 

22

 

14

 

3

 

39

 

 

1

 

1

 

(1

)

 

1

 

 

Total Transmission & Gulf of Mexico adjustments

 

38

 

15

 

359

 

412

 

 

7

 

2

 

6

 

158

 

173

 

 

Northeast G&P

 

 

 

 

 

 

 

 

 

 

 

 

Expenses associated with new venture

3

 

6

 

1

 

 

10

 

 

 

 

 

 

 

 

Share of early debt retirement gain at equity-method investment

 

 

 

 

 

 

 

(5

)

 

 

(5

)

 

Share of impairment of certain assets at equity-method investments

 

 

 

 

 

 

 

 

11

 

36

 

47

 

 

Pension plan settlement charge

 

 

 

 

 

 

1

 

 

 

 

1

 

 

Impairment of certain assets

 

 

 

10

 

10

 

 

 

 

 

12

 

12

 

 

Severance and related costs

 

10

 

(3

)

 

7

 

 

 

 

 

 

 

 

Benefit of change in employee benefit policy

 

 

 

 

 

 

 

(2

)

(2

)

(5

)

(9

)

 

Total Northeast G&P adjustments

3

 

16

 

(2

)

10

 

27

 

 

1

 

(7

)

9

 

43

 

46

 

 

West

 

 

 

 

 

 

 

 

 

 

 

 

Impairment of certain assets

12

 

64

 

 

24

 

100

 

 

 

 

 

 

 

 

Pension plan settlement charge

 

 

 

 

 

 

1

 

 

 

 

1

 

 

Benefit of change in employee benefit policy

 

 

 

 

 

 

 

(1

)

(2

)

(6

)

(9

)

 

Adjustment of gain on sale of Four Corners assets

2

 

 

 

 

2

 

 

 

 

 

 

 

 

Severance and related costs

 

11

 

(1

)

 

10

 

 

 

 

 

 

 

 

Total West adjustments

14

 

75

 

(1

)

24

 

112

 

 

1

 

(1

)

(2

)

(6

)

(8

)

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

Adjustment of Transco’s regulatory asset for post-WPZ Merger state deferred income tax change consistent with filed rate case

12

 

 

 

 

12

 

 

 

 

 

 

 

 

Regulatory asset reversals from impaired projects

 

 

 

 

 

 

 

 

8

 

7

 

15

 

 

Reversal of costs capitalized in prior periods

 

 

 

 

 

 

 

 

3

 

 

3

 

 

Pension settlement charge

 

 

 

 

 

 

 

 

 

1

 

1

 

 

Accrual for loss contingencies associated with former operations

 

 

9

 

(5

)

4

 

 

 

 

 

24

 

24

 

 

Severance and related costs

 

 

 

1

 

1

 

 

 

 

 

 

 

 

Total Other adjustments

12

 

 

9

 

(4

)

17

 

 

 

 

11

 

32

 

43

 

 

Adjustments included in Modified EBITDA

29

 

129

 

21

 

389

 

568

 

 

9

 

(6

)

24

 

227

 

254

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments below Modified EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

Impairment of equity-method investments

74

 

(2

)

114

 

 

186

 

 

938

 

 

 

108

 

1,046

 

 

Impairment of goodwill (2)

 

 

 

 

 

 

187

 

 

 

 

187

 

 

Share of impairment of goodwill at equity-method investment

 

 

 

 

 

 

78

 

 

 

 

78

 

 

Adjustment of gain on deconsolidation of certain Permian assets

2

 

 

 

 

2

 

 

 

 

 

 

 

 

Loss on deconsolidation of Constitution

 

 

 

27

 

27

 

 

 

 

 

 

 

 

Gain on sale of equity-method investments

 

(122

)

 

 

(122

)

 

 

 

 

 

 

 

Allocation of adjustments to noncontrolling interests

 

(1

)

 

(210

)

(211

)

 

(65

)

 

 

 

(65

)

 

 

76

 

(125

)

114

 

(183

)

(118

)

 

1,138

 

 

 

108

 

1,246

 

 

Total adjustments

105

 

4

 

135

 

206

 

450

 

 

1,147

 

(6

)

24

 

335

 

1,500

 

 

Less tax effect for above items

(26

)

(1

)

(34

)

(51

)

(112

)

 

(316

)

8

 

1

 

(68

)

(375

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted income from continuing operations available to common stockholders

$

273

 

$

313

 

$

321

 

$

293

 

$

1,200

 

 

$

313

 

$

305

 

$

333

 

$

382

 

$

1,333

 

 

Adjusted income from continuing operations - diluted earnings per common share (1)

$

.22

 

$

.26

 

$

.26

 

$

.24

 

$

.99

 

 

$

.26

 

$

.25

 

$

.27

 

$

.31

 

$

1.10

 

 

Weighted-average shares - diluted (thousands)

1,213,592

 

1,214,065

 

1,214,165

 

1,214,212

 

1,214,011

 

 

1,214,348

 

1,214,581

 

1,215,335

 

1,216,381

 

1,215,165

 

 

(1) 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.

 

(2) Our partners' $209 million share of the fourth-quarter 2019 impairment of the Constitution pipeline project and $65 million share of the first-quarter 2020 impairment of goodwill are reflected below in Allocation of adjustments to noncontrolling interests.

 

 

 

Reconciliation of Distributable Cash Flow (DCF)

 

(UNAUDITED)

 

 

2019

 

2020

 

(Dollars in millions, except coverage ratios)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Williams Companies, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP "Net Income (Loss)" to "Modified EBITDA", Non-GAAP "Adjusted EBITDA" and Non-GAAP "Distributable cash flow"

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

214

 

$

324

 

$

242

 

$

(66

)

$

714

 

 

$

(570

)

$

315

 

$

323

 

$

130

 

$

198

 

 

Provision (benefit) for income taxes

69

 

98

 

77

 

91

 

335

 

 

(204

)

117

 

111

 

55

 

79

 

 

Interest expense

296

 

296

 

296

 

298

 

1,186

 

 

296

 

294

 

292

 

290

 

1,172

 

 

Equity (earnings) losses

(80

)

(87

)

(93

)

(115

)

(375

)

 

(22

)

(108

)

(106

)

(92

)

(328

)

 

Impairment of goodwill

 

 

 

 

 

 

187

 

 

 

 

187

 

 

Impairment of equity-method investments

74

 

(2

)

114

 

 

186

 

 

938

 

 

 

108

 

1,046

 

 

Other investing (income) loss - net

(1

)

(124

)

(7

)

25

 

(107

)

 

(3

)

(1

)

(2

)

(2

)

(8

)

 

Proportional Modified EBITDA of equity-method investments

190

 

175

 

181

 

200

 

746

 

 

192

 

192

 

189

 

176

 

749

 

 

Depreciation and amortization expenses

416

 

424

 

435

 

439

 

1,714

 

 

429

 

430

 

426

 

436

 

1,721

 

 

Accretion expense associated with asset retirement obligations for nonregulated operations

9

 

8

 

8

 

8

 

33

 

 

10

 

7

 

10

 

8

 

35

 

 

(Income) loss from discontinued operations, net of tax

 

 

 

15

 

15

 

 

 

 

 

 

 

 

Modified EBITDA

1,187

 

1,112

 

1,253

 

895

 

4,447

 

 

1,253

 

1,246

 

1,243

 

1,109

 

4,851

 

 

EBITDA adjustments

29

 

129

 

21

 

389

 

568

 

 

9

 

(6

)

24

 

227

 

254

 

 

Adjusted EBITDA

1,216

 

1,241

 

1,274

 

1,284

 

5,015

 

 

1,262

 

1,240

 

1,267

 

1,336

 

5,105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maintenance capital expenditures (1)

(93

)

(130

)

(128

)

(113

)

(464

)

 

(52

)

(83

)

(144

)

(114

)

(393

)

 

Preferred dividends

(1

)

 

(1

)

(1

)

(3

)

 

(1

)

 

(1

)

(1

)

(3

)

 

Net interest expense - cash portion (2)

(304

)

(302

)

(301

)

(306

)

(1,213

)

 

(304

)

(304

)

(301

)

(299

)

(1,208

)

 

Cash taxes

3

 

85

 

(2

)

 

86

 

 

 

(2

)

 

42

 

40

 

 

Dividends and distributions paid to noncontrolling interests

(41

)

(27

)

(20

)

(36

)

(124

)

 

(44

)

(54

)

(49

)

(38

)

(185

)

 

Distributable cash flow

$

780

 

$

867

 

$

822

 

$

828

 

$

3,297

 

 

$

861

 

$

797

 

$

772

 

$

926

 

$

3,356

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common dividends paid

$

460

 

$

461

 

$

461

 

$

460

 

$

1,842

 

 

$

485

 

$

486

 

$

485

 

$

485

 

$

1,941

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coverage ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Distributable cash flow divided by Common dividends paid

1.70

 

1.88

 

1.78

 

1.80

 

1.79

 

 

1.78

 

1.64

 

1.59

 

1.91

 

1.73

 

 

Net income (loss) divided by Common dividends paid

0.47

 

0.70

 

0.52

 

(0.14

)

0.39

 

 

(1.18

)

0.65

 

0.67

 

0.27

 

0.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes proportionate share of maintenance capital expenditures of equity-method investments.

 

(2) Includes proportionate share of interest expense of equity-method investments.

 

 

Reconciliation of Cash Flow from Operating Activities to Available Funds from Operations (AFFO)

 

(UNAUDITED)

 

 

2019

 

2020

 

(Dollars in millions, except coverage ratios)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Williams Companies, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP "Net cash provided (used) by operating activities" to Non-GAAP "Available Funds from Operations"

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided (used) by operating activities

$

775

 

$

1,069

 

$

858

 

$

991

 

$

3,693

 

 

$

787

 

$

1,143

 

$

452

 

$

1,114

 

$

3,496

 

 

Exclude: Cash (provided) used by changes in:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

(97

)

(52

)

(10

)

125

 

(34

)

 

(67

)

(18

)

103

 

(16

)

2

 

 

Inventories

(1

)

(3

)

(3

)

2

 

(5

)

 

(19

)

28

 

24

 

(22

)

11

 

 

Other current assets and deferred charges

6

 

10

 

(6

)

(31

)

(21

)

 

(20

)

33

 

2

 

(26

)

(11

)

 

Accounts payable

39

 

59

 

(22

)

(30

)

46

 

 

155

 

(391

)

313

 

(70

)

7

 

 

Accrued liabilities

142

 

(212

)

(6

)

(77

)

(153

)

 

150

 

86

 

50

 

23

 

309

 

 

Other, including changes in noncurrent assets and liabilities

21

 

20

 

118

 

17

 

176

 

 

(23

)

43

 

(32

)

17

 

5

 

 

Preferred dividends paid

(1

)

 

(1

)

(1

)

(3

)

 

(1

)

 

(1

)

(1

)

(3

)

 

Dividends and distributions paid to noncontrolling interests

(41

)

(27

)

(18

)

(38

)

(124

)

 

(44

)

(54

)

(49

)

(38

)

(185

)

 

Contributions from noncontrolling interests

4

 

28

 

 

4

 

36

 

 

2

 

2

 

1

 

2

 

7

 

 

Available funds from operations

$

847

 

$

892

 

$

910

 

$

962

 

$

3,611

 

 

$

920

 

$

872

 

$

863

 

$

983

 

$

3,638

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common dividends paid

$

460

 

$

461

 

$

461

 

$

460

 

$

1,842

 

 

$

485

 

$

486

 

$

485

 

$

485

 

$

1,941

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coverage ratio:

 

 

 

 

 

 

 

 

 

 

 

 

Available funds from operations divided by Common dividends paid

1.84

 

1.93

 

1.97

 

2.09

 

1.96

 

 

1.90

 

1.79

 

1.78

 

2.03

 

1.87

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of "Net Income (Loss)" to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA”

 

(UNAUDITED)

 

 

2019

 

2020

 

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

214

 

$

324

 

$

242

 

$

(66

)

$

714

 

 

$

(570

)

$

315

 

$

323

 

$

130

 

$

198

 

 

Provision (benefit) for income taxes

69

 

98

 

77

 

91

 

335

 

 

(204

)

117

 

111

 

55

 

79

 

 

Interest expense

296

 

296

 

296

 

298

 

1,186

 

 

296

 

294

 

292

 

290

 

1,172

 

 

Equity (earnings) losses

(80

)

(87

)

(93

)

(115

)

(375

)

 

(22

)

(108

)

(106

)

(92

)

(328

)

 

Impairment of goodwill

 

 

 

 

 

 

187

 

 

 

 

187

 

 

Impairment of equity-method investments

74

 

(2

)

114

 

 

186

 

 

938

 

 

 

108

 

1,046

 

 

Other investing (income) loss - net

(1

)

(124

)

(7

)

25

 

(107

)

 

(3

)

(1

)

(2

)

(2

)

(8

)

 

Proportional Modified EBITDA of equity-method investments

190

 

175

 

181

 

200

 

746

 

 

192

 

192

 

189

 

176

 

749

 

 

Depreciation and amortization expenses

416

 

424

 

435

 

439

 

1,714

 

 

429

 

430

 

426

 

436

 

1,721

 

 

Accretion expense associated with asset retirement obligations for nonregulated operations

9

 

8

 

8

 

8

 

33

 

 

10

 

7

 

10

 

8

 

35

 

 

(Income) loss from discontinued operations, net of tax

 

 

 

15

 

15

 

 

 

 

 

 

 

 

Modified EBITDA

$

1,187

 

$

1,112

 

$

1,253

 

$

895

 

$

4,447

 

 

$

1,253

 

$

1,246

 

$

1,243

 

$

1,109

 

$

4,851

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

636

 

$

590

 

$

665

 

$

284

 

$

2,175

 

 

$

662

 

$

615

 

$

616

 

$

486

 

$

2,379

 

 

Northeast G&P

299

 

303

 

345

 

367

 

1,314

 

 

369

 

370

 

387

 

363

 

1,489

 

 

West

256

 

212

 

245

 

239

 

952

 

 

215

 

253

 

247

 

283

 

998

 

 

Other

(4

)

7

 

(2

)

5

 

6

 

 

7

 

8

 

(7

)

(23

)

(15

)

 

Total Modified EBITDA

$

1,187

 

$

1,112

 

$

1,253

 

$

895

 

$

4,447

 

 

$

1,253

 

$

1,246

 

$

1,243

 

$

1,109

 

$

4,851

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments included in Modified EBITDA (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

 

$

38

 

$

15

 

$

359

 

$

412

 

 

$

7

 

$

2

 

$

6

 

$

158

 

$

173

 

 

Northeast G&P

3

 

16

 

(2

)

10

 

27

 

 

1

 

(7

)

9

 

43

 

46

 

 

West

14

 

75

 

(1

)

24

 

112

 

 

1

 

(1

)

(2

)

(6

)

(8

)

 

Other

12

 

 

9

 

(4

)

17

 

 

 

 

11

 

32

 

43

 

 

Total Adjustments included in Modified EBITDA

$

29

 

$

129

 

$

21

 

$

389

 

$

568

 

 

$

9

 

$

(6

)

$

24

 

$

227

 

$

254

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

636

 

$

628

 

$

680

 

$

643

 

$

2,587

 

 

$

669

 

$

617

 

$

622

 

$

644

 

$

2,552

 

 

Northeast G&P

302

 

319

 

343

 

377

 

1,341

 

 

370

 

363

 

396

 

406

 

1,535

 

 

West

270

 

287

 

244

 

263

 

1,064

 

 

216

 

252

 

245

 

277

 

990

 

 

Other

8

 

7

 

7

 

1

 

23

 

 

7

 

8

 

4

 

9

 

28

 

 

Total Adjusted EBITDA

$

1,216

 

$

1,241

 

$

1,274

 

$

1,284

 

$

5,015

 

 

$

1,262

 

$

1,240

 

$

1,267

 

$

1,336

 

$

5,105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Adjustments by segment are detailed in the "Reconciliation of Income (Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Adjusted Income," which is also included in these materials.

 

 

Reconciliation of Net Income (Loss) to Modified EBITDA, Non-GAAP Adjusted EBITDA and Cash Flow from Operating Activities to Non-GAAP Available Funds from Operations (AFFO)

 

 

 

2021 Guidance

(Dollars in millions, except per share amounts and coverage ratio)

 

Low

 

Mid

 

High

 

 

 

 

 

 

 

Net income (loss)

 

$

1,275

 

 

$

1,425

 

 

$

1,575

 

Provision (benefit) for income taxes

 

 

 

460

 

 

 

Interest expense

 

 

 

1,180

 

 

 

Equity (earnings) losses

 

 

 

(430

)

 

 

Proportional Modified EBITDA of equity-method investments

 

 

 

800

 

 

 

Depreciation and amortization expenses and accretion for asset retirement obligations associated with nonregulated operations

 

 

 

1,775

 

 

 

Other

 

 

 

(10

)

 

 

Modified EBITDA

 

$

5,050

 

 

$

5,200

 

 

$

5,350

 

EBITDA Adjustments