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Williams Delivers Strong Second-Quarter Results

Williams (NYSE: WMB) today announced its unaudited financial results for the three and six months ended June 30, 2024.

Financial results build on track record of year-over-year consecutive growth

  • GAAP net income of $401 million, or $0.33 per diluted share (EPS)
  • Adjusted net income of $521 million, or $0.43 per diluted share (Adj. EPS)
  • Record 2Q Adjusted EBITDA of $1.667 billion – up $56 million or 3% vs. 2Q 2023
  • Cash flow from operations (CFFO) of $1.279 billion
  • Available funds from operations (AFFO) of $1.250 billion – up $35 million or 3% vs. 2Q 2023
  • Dividend coverage ratio of 2.16x (AFFO basis)
  • On track to achieve top half of 2024 financial guidance

Crisp project execution and accelerating natural gas demand drive strong financial outlook

  • Optimized portfolio by exiting Aux Sable joint venture position and consolidating ownership interest in Gulf of Mexico Discovery system
  • Placed Transco's Regional Energy Access into full service ahead of schedule on Aug. 1
  • Placed Marcellus South and MountainWest's Uinta Basin expansions in-service
  • Significant emissions reductions and cost savings accomplished in replacing 57 Transco and Northwest Pipeline compressor units to date
  • Initiated construction activities on Louisiana Energy Gateway gathering, treating and carbon capture & sequestration project
  • Began construction on Transco's Texas to Louisiana Energy Pathway expansion
  • Signed precedent agreement on Transco's Gillis West expansion
  • Published 2023 Sustainability Report; set 2028 methane intensity goal for OGMP 2.0

CEO Perspective

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

“Our record second quarter Adjusted EBITDA was driven primarily by the strong performance of our transmission and storage business. Even in this environment of low gas prices, we continue to deliver and are on track to achieve the top half of financial guidance this year and even higher levels of growth in 2025 with an expected five-year compound annual growth rate of over 12 percent on our Adjusted EPS, 2020 to 2025.

“Our teams have continued to execute on our strategy across all fronts, including placing projects into service in the Northeast, the West and the Deepwater Gulf of Mexico. In addition to bringing Transco’s Regional Energy Access expansion fully online ahead of schedule, we have initiated construction activities on the Louisiana Energy Gateway gathering, treating and carbon capture & sequestration project as well as Transco’s Texas to Louisiana Energy Pathway expansion. We also continued to optimize our portfolio by selling our stake in the Aux Sable joint venture at an attractive premium and consolidated our ownership interest in the Gulf of Mexico Discovery system at an attractive value, which allows us to improve efficiencies in this commercially active and growing region.”

Armstrong added, “We’ve been delivering consecutive year-over-year growth for more than a decade at Williams, and all signals indicate that the future will be even stronger as demand for natural gas accelerates due to increasing electrification and LNG exports. With our powerful backlog of projects and outstanding track record of execution, no other company is better positioned than Williams to convert these opportunities into compounding returns for our shareholders.”

Williams Summary Financial Information

2Q

 

Year to Date

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.

2024

2023

 

2024

2023

 

 

 

 

 

 

GAAP Measures

 

 

 

 

 

Net Income

$401

$547

 

$1,032

$1,473

Net Income Per Share

$0.33

$0.45

 

$0.84

$1.20

Cash Flow From Operations

$1,279

$1,377

 

$2,513

$2,891

 

 

 

 

 

 

Non-GAAP Measures (1)

 

 

 

 

 

Adjusted EBITDA

$1,667

$1,611

 

$3,601

$3,406

Adjusted Net Income

$521

$515

 

$1,240

$1,199

Adjusted Earnings Per Share

$0.43

$0.42

 

$1.01

$0.98

Available Funds from Operations

$1,250

$1,215

 

$2,757

$2,660

Dividend Coverage Ratio

2.16x

2.23x

 

2.38x

2.44x

 

 

 

 

 

 

Other

 

 

 

 

 

Debt-to-Adjusted EBITDA at Quarter End (2)

3.76x

3.50x

 

 

 

Capital Investments (Excluding Acquisitions) (3) (4)

$663

$715

 

$1,226

$1,240

 

 

 

 

 

 

(1) Schedules reconciling Adjusted Net Income, Adjusted EBITDA, 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.

(2) 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.

(3) Capital Investments include increases to property, plant, and equipment (growth & maintenance capital), purchases of and contributions to equity-method investments and purchases of other long-term investments.

(4) Year-to-date 2024 capital excludes $1.844 billion for the acquisition of the Gulf Coast Storage assets, which closed in January 2024. Year-to-date 2023 capital excludes $1.053 billion for the acquisition of MountainWest, which closed in February 2023.

 

GAAP Measures

Second-quarter 2024 net income decreased by $146 million compared to the prior year reflecting an unfavorable change of $214 million in net unrealized gains/losses on commodity derivatives, higher net interest expense from recent debt issuances and retirements, as well as higher operating costs, depreciation and interest expense resulting from recent acquisitions. These unfavorable changes were partially offset by a $89 million increase in service revenues driven by acquisitions and expansion projects, as well as higher equity allowance for funds used during construction (equity AFUDC) associated with ongoing capital projects at our regulated natural gas pipelines. The tax provision decreased primarily due to lower pretax income.

Year-to-date 2024 net income decreased by $441 million compared to the prior year reflecting an unfavorable change of $633 million in net unrealized gains/losses on commodity derivatives, higher net interest expense from recent debt issuances and retirements, lower realized hedge gains in the West, as well as higher operating costs, depreciation and interest expense resulting from recent acquisitions. These unfavorable changes were partially offset by a $300 million increase in service revenues driven by acquisitions and expansion projects, higher commodity margins, and higher equity AFUDC. The tax provision decreased primarily due to lower pretax income.

Second-quarter and year-to-date 2024 cash flow from operations decreased compared to the prior year primarily due to unfavorable net changes in both working capital and derivative collateral requirements, partially offset by higher operating results exclusive of non-cash items.

Non-GAAP Measures

Second-quarter 2024 Adjusted EBITDA increased by $56 million over the prior year, driven by the previously described favorable net contributions from acquisitions and expansion projects. Year-to-date 2024 Adjusted EBITDA increased by $195 million over the prior year, similarly reflecting favorable net contributions from acquisitions and expansion projects, as well as higher commodity margins.

Second-quarter and year-to-date 2024 Adjusted Net Income improved by $6 million and $41 million, respectively, over the prior year, driven by the previously described impacts to net income, adjusted primarily to remove the effects of net unrealized gains/losses on commodity derivatives and the related income tax effects.

Second-quarter and year-to-date Available Funds From Operations (AFFO) increased by $35 million and $97 million, respectively, compared to the prior year primarily due to higher results from continuing operations exclusive of non-cash items.

Business Segment Results & Form 10-Q

Williams' operations are comprised of the following reportable segments: Transmission & Gulf of Mexico, Northeast G&P, West and Gas & NGL Marketing Services, as well as Other. For more information, see the company's second-quarter 2024 Form 10-Q.

 

Second Quarter

 

Year to Date

Amounts in millions

Modified EBITDA

 

Adjusted EBITDA

 

Modified EBITDA

 

Adjusted EBITDA

2Q 2024

2Q 2023

Change

 

2Q 2024

2Q 2023

Change

 

2024

2023

Change

 

2024

2023

Change

Transmission & Gulf of Mexico

$808

 

$731

$77

 

 

$812

 

$748

 

$64

 

 

$1,637

 

$1,446

$191

 

 

$1,651

$1,476

$175

 

Northeast G&P

481

 

515

(34

)

 

479

 

515

 

(36

)

 

985

 

985

 

 

983

985

(2

)

West

318

 

312

6

 

 

319

 

312

 

7

 

 

645

 

616

29

 

 

647

598

49

 

Gas & NGL Marketing Services

(126

)

68

(194

)

 

(14

)

(16

)

2

 

 

(25

)

635

(660

)

 

175

215

(40

)

Other

47

 

41

6

 

 

71

 

52

 

19

 

 

123

 

115

8

 

 

145

132

13

 

Total

$1,528

 

$1,667

($139

)

 

$1,667

 

$1,611

 

$56

 

 

$3,365

 

$3,797

($432

)

 

$3,601

$3,406

$195

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

Second-quarter 2024 Modified and Adjusted EBITDA improved compared to the prior year driven by favorable net contributions from the Gulf Coast Storage acquisition and the Regional Energy Access expansion project, as well as higher equity AFUDC. Year-to-date 2024 Modified and Adjusted EBITDA also benefited from the MountainWest acquisition. Modified EBITDA for all periods was impacted by one-time acquisition costs, which are excluded from Adjusted EBITDA.

Northeast G&P

Second-quarter 2024 Modified and Adjusted EBITDA decreased compared to the prior year driven by lower gathering volumes, partially offset by higher rates at Susquehanna Supply Hub and Bradford. For the year-to-date comparison, both metrics were largely unchanged as these higher rates offset the lower gathering volumes.

West

Second-quarter 2024 Modified and Adjusted EBITDA increased compared to the prior year benefiting from the DJ Basin Acquisitions and higher volumes on the Overland Pass Pipeline, partially offset by lower gathering volumes and lower realized gains on natural gas hedges. Both metrics also improved for the year-to-date period reflecting similar drivers, as well as improved commodity margins reflecting favorable changes in shrink prices related to the absence of a short-term gas price spike at Opal in 2023. The year-to-date Modified EBITDA was also impacted by the absence of a first-quarter 2023 favorable contract settlement, which is excluded from Adjusted EBITDA.

Gas & NGL Marketing Services

Second-quarter 2024 Modified EBITDA decreased from the prior year primarily reflecting a $200 million net unfavorable change in unrealized gains/losses on commodity derivatives, which is excluded from Adjusted EBITDA. Year-to-date 2024 Modified EBITDA also decreased from the prior year reflecting a decline in gas marketing margins and a $628 million net unfavorable change in unrealized gains/losses on commodity derivatives, which is excluded from Adjusted EBITDA.

Strategic Transactions

Williams recently closed two strategic transactions to further derisk its portfolio from commodity price volatility and enhance the performance of commercially active and growing Gulf of Mexico assets.

Williams sold its 14 percent stake in a joint venture with Aux Sable for $160 million. The non-operated joint venture assets include a processing and fractionation facility near Chicago and a rich gas gathering pipeline and conditioning plant in North Dakota. Williams’ ownership in the joint venture was subject to cash flow volatility because the keep-whole arrangement made distributions sensitive to commodity prices.

Separately, Williams purchased from Phillips 66 for $170 million its 40 percent stake in Discovery pipeline in the Gulf of Mexico, bringing Williams’ ownership interest to 100 percent, as well as Phillips 66's Dauphin Island Gathering Partners system. Discovery's assets include approximately 600 miles of offshore gas pipelines, a 600 MMcf/d gas processing plant and a 35 Mbbls/d fractionator, both in Louisiana.

2024 Financial Guidance

Williams continues to expect Adjusted EBITDA at the top half of its 2024 guidance range of $6.8 billion and $7.1 billion. In addition, the company continues to expect 2024 growth capex between $1.45 billion and $1.75 billion and maintenance capex between $1.1 billion and $1.3 billion, which includes capital of $350 million for emissions reduction and modernization initiatives. For 2025, the company continues to expect Adjusted EBITDA between $7.2 billion and $7.6 billion with growth capex between $1.65 billion and $1.95 billion and maintenance capex between $750 million and $850 million, which includes capital of $100 million based on midpoint for emissions reduction and modernization initiatives. Williams continues to anticipate a leverage ratio midpoint for 2024 of 3.85x and increased the dividend by 6.1% on an annualized basis to $1.90 in 2024 from $1.79 in 2023.

Williams' Second-Quarter 2024 Materials to be Posted Shortly; Q&A Webcast Scheduled for Tomorrow

Williams' second-quarter 2024 earnings presentation will be posted at www.williams.com. The company's second-quarter 2024 earnings conference call and webcast with analysts and investors is scheduled for Tuesday, Aug. 6, 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: https://register.vevent.com/register/BI8cf6dbf9f06f47fabd194ab9f38a7eb8

A webcast link to the conference call will be provided on Williams' Investor Relations website. A replay of the webcast will also be available on the website for at least 90 days following the event.

About Williams

Williams (NYSE: WMB) is a trusted energy industry leader committed to safely, reliably, and responsibly meeting growing energy demand. We use our 33,000-mile pipeline infrastructure to move a third of the nation’s natural gas to where it's needed most, supplying the energy used to heat our homes, cook our food and generate low-carbon electricity. For over a century, we’ve been driven by a passion for doing things the right way. Today, our team of problem solvers is leading the charge into the clean energy future – by powering the global economy while delivering immediate emissions reductions within our natural gas network and investing in new energy technologies. Learn more at www.williams.com.

 

The Williams Companies, Inc.

Consolidated Statement of Income

(Unaudited)

 

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

 

2024

 

2023

 

2024

 

2023

 

(Millions, except per-share amounts)

Revenues:

 

 

 

 

 

 

 

 

Service revenues

 

$

1,837

 

 

$

1,748

 

 

$

3,742

 

 

$

3,442

 

Service revenues – commodity consideration

 

 

18

 

 

 

27

 

 

 

48

 

 

 

63

 

Product sales

 

 

610

 

 

 

593

 

 

 

1,455

 

 

 

1,438

 

Net gain (loss) from commodity derivatives

 

 

(129

)

 

 

115

 

 

 

(138

)

 

 

621

 

Total revenues

 

 

2,336

 

 

 

2,483

 

 

 

5,107

 

 

 

5,564

 

Costs and expenses:

 

 

 

 

 

 

 

 

Product costs

 

 

424

 

 

 

421

 

 

 

950

 

 

 

974

 

Net processing commodity expenses

 

 

17

 

 

 

44

 

 

 

22

 

 

 

98

 

Operating and maintenance expenses

 

 

522

 

 

 

481

 

 

 

1,033

 

 

 

944

 

Depreciation and amortization expenses

 

 

540

 

 

 

515

 

 

 

1,088

 

 

 

1,021

 

Selling, general, and administrative expenses

 

 

164

 

 

 

161

 

 

 

350

 

 

 

337

 

Other (income) expense – net

 

 

(27

)

 

 

(9

)

 

 

(44

)

 

 

(40

)

Total costs and expenses

 

 

1,640

 

 

 

1,613

 

 

 

3,399

 

 

 

3,334

 

Operating income (loss)

 

 

696

 

 

 

870

 

 

 

1,708

 

 

 

2,230

 

Equity earnings (losses)

 

 

147

 

 

 

160

 

 

 

284

 

 

 

307

 

Other investing income (loss) – net

 

 

18

 

 

 

13

 

 

 

42

 

 

 

21

 

Interest expense

 

 

(339

)

 

 

(306

)

 

 

(688

)

 

 

(600

)

Other income (expense) – net

 

 

33

 

 

 

19

 

 

 

64

 

 

 

39

 

Income (loss) before income taxes

 

 

555

 

 

 

756

 

 

 

1,410

 

 

 

1,997

 

Less: Provision (benefit) for income taxes.

 

 

129

 

 

 

175

 

 

 

322

 

 

 

459

 

Income (loss) from continuing operations

 

 

426

 

 

 

581

 

 

 

1,088

 

 

 

1,538

 

Income (loss) from discontinued operations)

 

 

 

 

 

(87

)

 

 

 

 

 

(87

)

Net income (loss)

 

 

426

 

 

 

494

 

 

 

1,088

 

 

 

1,451

 

Less: Net income (loss) attributable to noncontrolling interests.

 

 

25

 

 

 

34

 

 

 

55

 

 

 

64

 

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

 

 

401

 

 

 

460

 

 

 

1,033

 

 

 

1,387

 

Less: Preferred stock dividends.

 

 

 

 

 

 

 

 

1

 

 

 

1

 

Net income (loss) available to common stockholders

 

$

401

 

 

$

460

 

 

$

1,032

 

 

$

1,386

 

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

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

401

 

 

$

547

 

 

$

1,032

 

 

$

1,473

 

Income (loss) from discontinued operations

 

 

 

 

 

(87

)

 

 

 

 

 

(87

)

Net income (loss) available to common stockholders

 

$

401

 

 

$

460

 

 

$

1,032

 

 

$

1,386

 

Basic earnings (loss) per common share:

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

.33

 

 

$

.45

 

 

$

.85

 

 

$

1.21

 

Income (loss) from discontinued operations

 

 

 

 

 

(.07

)

 

 

 

 

 

(.07

)

Net income (loss) available to common stockholders

 

$

.33

 

 

$

.38

 

 

$

.85

 

 

$

1.14

 

Weighted-average shares (thousands)

 

 

1,219,367

 

 

 

1,217,673

 

 

 

1,218,761

 

 

 

1,218,564

 

Diluted earnings (loss) per common share:

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

.33

 

 

$

.45

 

 

$

.84

 

 

$

1.20

 

Income (loss) from discontinued operations

 

 

 

 

 

(.07

)

 

 

 

 

 

(.07

)

Net income (loss) available to common stockholders

 

$

.33

 

 

$

.38

 

 

$

.84

 

 

$

1.13

 

Weighted-average shares (thousands)

 

 

1,222,236

 

 

 

1,219,915

 

 

 

1,222,229

 

 

 

1,223,429

 

 

The Williams Companies, Inc.

Consolidated Balance Sheet

(Unaudited)

 

 

 

June 30,

 

December 31,

 

 

2024

 

2023

 

 

(Millions, except per-share amounts)

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents.

 

$

55

 

 

$

2,150

 

Trade accounts and other receivables (net of allowance of $4 at June 30, 2024 and $3 at December 31, 2023)

 

 

1,398

 

 

 

1,655

 

Inventories.

 

 

274

 

 

 

274

 

Derivative assets.

 

 

218

 

 

 

239

 

Other current assets and deferred charges.

 

 

170

 

 

 

195

 

Total current assets

 

 

2,115

 

 

 

4,513

 

Investments.

 

 

4,612

 

 

 

4,637

 

Property, plant, and equipment.

 

 

54,930

 

 

 

51,842

 

Accumulated depreciation and amortization.

 

 

(18,228

)

 

 

(17,531

)

Property, plant, and equipment – net.

 

 

36,702

 

 

 

34,311

 

Intangible assets – net of accumulated amortization.

 

 

7,402

 

 

 

7,593

 

Regulatory assets, deferred charges, and other.

 

 

1,578

 

 

 

1,573

 

Total assets

 

$

52,409

 

 

$

52,627

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable.

 

$

1,192

 

 

$

1,379

 

Derivative liabilities.

 

 

109

 

 

 

105

 

Accrued and other current liabilities.

 

 

1,229

 

 

 

1,284

 

Commercial paper.

 

 

630

 

 

 

725

 

Long-term debt due within one year.

 

 

1,536

 

 

 

2,337

 

Total current liabilities

 

 

4,696

 

 

 

5,830

 

Long-term debt.

 

 

24,096

 

 

 

23,376

 

Deferred income tax liabilities.

 

 

4,107

 

 

 

3,846

 

Regulatory liabilities, deferred income, and other.

 

 

4,764

 

 

 

4,684

 

Contingent liabilities and commitments

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred stock ($1 par value; 30 million shares authorized at June 30, 2024 and December 31, 2023; 35 thousand shares issued at June 30, 2024 and December 31, 2023)

 

 

35

 

 

 

35

 

Common stock ($1 par value; 1,470 million shares authorized at June 30, 2024 and December 31, 2023; 1,258 million shares issued at June 30, 2024 and 1,256 million shares issued at December 31, 2023)

 

 

1,258

 

 

 

1,256

 

Capital in excess of par value

 

 

24,589

 

 

 

24,578

 

Retained deficit

 

 

(12,419

)

 

 

(12,287

)

Accumulated other comprehensive income (loss)

 

 

13

 

 

 

 

Treasury stock, at cost (39 million shares at June 30, 2024 and December 31, 2023 of common stock)

 

 

(1,180

)

 

 

(1,180

)

Total stockholders’ equity.

 

 

12,296

 

 

 

12,402

 

Noncontrolling interests in consolidated subsidiaries.

 

 

2,450

 

 

 

2,489

 

Total equity

 

 

14,746

 

 

 

14,891

 

Total liabilities and equity.

 

$

52,409

 

 

$

52,627

 

 

The Williams Companies, Inc.

Consolidated Statement of Cash Flows

(Unaudited)

 

 

 

Six Months Ended

June 30,

 

 

2024

 

2023

 

 

(Millions)

OPERATING ACTIVITIES:

 

 

 

 

Net income (loss)

 

$

1,088

 

 

$

1,451

 

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

 

 

 

 

Depreciation and amortization.

 

 

1,088

 

 

 

1,021

 

Provision (benefit) for deferred income taxes.

 

 

258

 

 

 

427

 

Equity (earnings) losses.

 

 

(284

)

 

 

(307

)

Distributions from equity-method investees.

 

 

394

 

 

 

418

 

Net unrealized (gain) loss from commodity derivative instruments.

 

 

223

 

 

 

(410

)

Inventory write-downs.

 

 

6

 

 

 

23

 

Amortization of stock-based awards.

 

 

48

 

 

 

40

 

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

 

 

 

 

Accounts receivable

 

 

270

 

 

 

1,423

 

Inventories

 

 

(3

)

 

 

41

 

Other current assets and deferred charges

 

 

12

 

 

 

24

 

Accounts payable

 

 

(219

)

 

 

(1,220

)

Accrued and other current liabilities

 

 

(76

)

 

 

(72

)

Changes in current and noncurrent commodity derivative assets and liabilities.

 

 

(141

)

 

 

119

 

Other, including changes in noncurrent assets and liabilities.

 

 

(151

)

 

 

(87

)

Net cash provided (used) by operating activities

 

 

2,513

 

 

 

2,891

 

FINANCING ACTIVITIES:

 

 

 

 

Proceeds from (payments of) commercial paper – net

 

 

(95

)

 

 

(352

)

Proceeds from long-term debt

 

 

2,100

 

 

 

1,503

 

Payments of long-term debt

 

 

(2,274

)

 

 

(14

)

Payments for debt issuance costs

 

 

(18

)

 

 

(13

)

Proceeds from issuance of common stock

 

 

5

 

 

 

4

 

Purchases of treasury stock

 

 

 

 

 

(130

)

Common dividends paid

 

 

(1,158

)

 

 

(1,091

)

Dividends and distributions paid to noncontrolling interests

 

 

(130

)

 

 

(112

)

Contributions from noncontrolling interests

 

 

36

 

 

 

18

 

Other – net

 

 

(18

)

 

 

(17

)

Net cash provided (used) by financing activities

 

 

(1,552

)

 

 

(204

)

INVESTING ACTIVITIES:

 

 

 

 

Property, plant, and equipment:

 

 

 

 

Capital expenditures (1)

 

 

(1,123

)

 

 

(1,155

)

Dispositions - net.

 

 

(27

)

 

 

(21

)

Purchases of businesses, net of cash acquired

 

 

(1,844

)

 

 

(1,053

)

Purchases of and contributions to equity-method investments

 

 

(82

)

 

 

(69

)

Other – net

 

 

20

 

 

 

10

 

Net cash provided (used) by investing activities

 

 

(3,056

)

 

 

(2,288

)

Increase (decrease) in cash and cash equivalents

 

 

(2,095

)

 

 

399

 

Cash and cash equivalents at beginning of year

 

 

2,150

 

 

 

152

 

Cash and cash equivalents at end of period

 

$

55

 

 

$

551

 

_________

 

 

 

 

(1) Increases to property, plant, and equipment

 

$

(1,141

)

 

$

(1,168

)

Changes in related accounts payable and accrued liabilities.

 

 

18

 

 

 

13

 

Capital expenditures.

 

$

(1,123

)

 

$

(1,155

)

Transmission & Gulf of Mexico

 

(UNAUDITED)

 

 

2023

 

2024

 

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

 

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

$

774

 

$

786

 

$

794

 

$

822

 

$

3,176

 

 

$

836

 

$

805

 

$

1,641

 

 

Gathering, processing, storage and transportation revenues

 

100

 

 

104

 

 

114

 

 

100

 

 

418

 

 

 

137

 

 

147

 

 

284

 

 

Other fee revenues (1)

 

6

 

 

8

 

 

5

 

 

4

 

 

23

 

 

 

12

 

 

9

 

 

21

 

 

Commodity margins

 

10

 

 

8

 

 

7

 

 

8

 

 

33

 

 

 

9

 

 

5

 

 

14

 

 

Operating and administrative costs (1)

 

(254

)

 

(254

)

 

(257

)

 

(270

)

 

(1,035

)

 

 

(254

)

 

(261

)

 

(515

)

 

Other segment income (expenses) - net (1)

 

26

 

 

31

 

 

36

 

 

26

 

 

119

 

 

 

43

 

 

54

 

 

97

 

 

Gain on sale of business

 

 

 

 

 

130

 

 

(1

)

 

129

 

 

 

 

 

 

 

 

 

Proportional Modified EBITDA of equity-method investments

 

53

 

 

48

 

 

52

 

 

52

 

 

205

 

 

 

46

 

 

49

 

 

95

 

 

Modified EBITDA

 

715

 

 

731

 

 

881

 

 

741

 

 

3,068

 

 

 

829

 

 

808

 

 

1,637

 

 

Adjustments

 

13

 

 

17

 

 

(127

)

 

11

 

 

(86

)

 

 

10

 

 

4

 

 

14

 

 

Adjusted EBITDA

$

728

 

$

748

 

$

754

 

$

752

 

$

2,982

 

 

$

839

 

$

812

 

$

1,651

 

 

 

 

 

 

 

 

 

 

 

 

 

Statistics for Operated Assets

 

 

 

 

 

 

 

 

 

 

Natural Gas Transmission (2)

 

 

 

 

 

 

 

 

 

 

Transcontinental Gas Pipe Line

 

 

 

 

 

 

 

 

 

 

Avg. daily transportation volumes (MMdth)

 

14.3

 

 

13.2

 

 

14.0

 

 

14.0

 

 

13.9

 

 

 

14.6

 

 

12.9

 

 

13.8

 

 

Avg. daily firm reserved capacity (MMdth)

 

19.5

 

 

19.4

 

 

19.4

 

 

19.3

 

 

19.4

 

 

 

20.3

 

 

19.7

 

 

20.0

 

 

Northwest Pipeline LLC

 

 

 

 

 

 

 

 

 

 

Avg. daily transportation volumes (MMdth)

 

3.1

 

 

2.3

 

 

2.3

 

 

2.8

 

 

2.6

 

 

 

3.1

 

 

2.2

 

 

2.7

 

 

Avg. daily firm reserved capacity (MMdth)

 

3.8

 

 

3.8

 

 

3.8

 

 

3.8

 

 

3.8

 

 

 

3.8

 

 

3.7

 

 

3.8

 

 

MountainWest (3)

 

 

 

 

 

 

 

 

 

 

Avg. daily transportation volumes (MMdth)

 

4.2

 

 

3.2

 

 

3.8

 

 

4.2

 

 

3.9

 

 

 

4.3

 

 

3.2

 

 

3.8

 

 

Avg. daily firm reserved capacity (MMdth)

 

7.8

 

 

7.5

 

 

7.5

 

 

7.9

 

 

7.7

 

 

 

8.4

 

 

8.0

 

 

8.2

 

 

Gulfstream - Non-consolidated

 

 

 

 

 

 

 

 

 

 

Avg. daily transportation volumes (MMdth)

 

1.0

 

 

1.2

 

 

1.4

 

 

1.1

 

 

1.2

 

 

 

1.0

 

 

1.2

 

 

1.1

 

 

Avg. daily firm reserved capacity (MMdth)

 

1.4

 

 

1.4

 

 

1.4

 

 

1.4

 

 

1.4

 

 

 

1.4

 

 

1.4

 

 

1.4

 

 

Gathering, Processing, and Crude Oil Transportation

 

 

 

 

 

 

 

 

 

 

Consolidated (4)

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

 

0.28

 

 

0.23

 

 

0.27

 

 

0.27

 

 

0.26

 

 

 

0.25

 

 

0.23

 

 

0.24

 

 

Plant inlet natural gas volumes (Bcf/d)

 

0.43

 

 

0.40

 

 

0.46

 

 

0.46

 

 

0.44

 

 

 

0.45

 

 

0.27

 

 

0.36

 

 

NGL production (Mbbls/d)

 

28

 

 

24

 

 

28

 

 

26

 

 

27

 

 

 

28

 

 

17

 

 

22

 

 

NGL equity sales (Mbbls/d)

 

7

 

 

5

 

 

6

 

 

5

 

 

6

 

 

 

5

 

 

3

 

 

4

 

 

Crude oil transportation volumes (Mbbls/d)

 

119

 

 

111

 

 

134

 

 

130

 

 

123

 

 

 

118

 

 

114

 

 

116

 

 

Non-consolidated (5)

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

 

0.36

 

 

0.30

 

 

0.36

 

 

0.33

 

 

0.34

 

 

 

0.27

 

 

0.35

 

 

0.31

 

 

Plant inlet natural gas volumes (Bcf/d)

 

0.36

 

 

0.30

 

 

0.36

 

 

0.33

 

 

0.34

 

 

 

0.27

 

 

0.35

 

 

0.31

 

 

NGL production (Mbbls/d)

 

28

 

 

21

 

 

30

 

 

28

 

 

27

 

 

 

15

 

 

26

 

 

20

 

 

NGL equity sales (Mbbls/d)

 

8

 

 

3

 

 

8

 

 

7

 

 

7

 

 

 

3

 

 

7

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

(2) Tbtu converted to MMdth at one trillion British thermal units = one million dekatherms.

 

(3) Includes 100% of the volumes associated with the MountainWest Acquisition transmission assets after the purchase on February 14, 2023, including 100% of the volumes associated with the operated equity-method investment White River Hub, LLC. Average volumes were calculated over the period owned.

 

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

 

(5) Includes 100% of the volumes associated with operated equity-method investments, including Discovery Producer Services.

 

Northeast G&P

 

(UNAUDITED)

 

 

2023

 

2024

 

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

 

Gathering, processing, transportation, and fractionation revenues

$

391

 

$

431

 

$

417

 

$

411

 

$

1,650

 

 

$

411

 

$

398

 

$

809

 

 

Other fee revenues (1)

 

32

 

 

27

 

 

27

 

 

28

 

 

114

 

 

 

34

 

 

35

 

 

69

 

 

Commodity margins

 

5

 

 

(1

)

 

7

 

 

1

 

 

12

 

 

 

11

 

 

 

 

11

 

 

Operating and administrative costs (1)

 

(101

)

 

(101

)

 

(115

)

 

(107

)

 

(424

)

 

 

(108

)

 

(108

)

 

(216

)

 

Other segment income (expenses) - net

 

 

 

 

 

(1

)

 

(9

)

 

(10

)

 

 

(1

)

 

3

 

 

2

 

 

Proportional Modified EBITDA of equity-method investments

 

143

 

 

159

 

 

119

 

 

153

 

 

574

 

 

 

157

 

 

153

 

 

310

 

 

Modified EBITDA

 

470

 

 

515

 

 

454

 

 

477

 

 

1,916

 

 

 

504

 

 

481

 

 

985

 

 

Adjustments

 

 

 

 

 

31

 

 

8

 

 

39

 

 

 

 

 

(2

)

 

(2

)

 

Adjusted EBITDA

$

470

 

$

515

 

$

485

 

$

485

 

$

1,955

 

 

$

504

 

$

479

 

$

983

 

 

 

 

 

 

 

 

 

 

 

 

 

Statistics for Operated Assets

 

 

 

 

 

 

 

 

 

 

Gathering and Processing

 

 

 

 

 

 

 

 

 

 

Consolidated (2)

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

 

4.42

 

 

4.61

 

 

4.41

 

 

4.37

 

 

4.45

 

 

 

4.33

 

 

4.11

 

 

4.22

 

 

Plant inlet natural gas volumes (Bcf/d)

 

1.92

 

 

1.79

 

 

1.93

 

 

1.93

 

 

1.89

 

 

 

1.76

 

 

1.77

 

 

1.77

 

 

NGL production (Mbbls/d)

 

144

 

 

135

 

 

144

 

 

133

 

 

139

 

 

 

133

 

 

136

 

 

135

 

 

NGL equity sales (Mbbls/d)

 

1

 

 

1

 

 

 

 

1

 

 

1

 

 

 

1

 

 

1

 

 

1

 

 

Non-consolidated (3)

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

 

6.97

 

 

7.03

 

 

6.83

 

 

6.85

 

 

6.92

 

 

 

6.79

 

 

6.42

 

 

6.61

 

 

Plant inlet natural gas volumes (Bcf/d)

 

0.77

 

 

0.93

 

 

0.99

 

 

1.01

 

 

0.93

 

 

 

0.98

 

 

0.94

 

 

0.96

 

 

NGL production (Mbbls/d)

 

54

 

 

64

 

 

71

 

 

69

 

 

65

 

 

 

72

 

 

70

 

 

71

 

 

NGL equity sales (Mbbls/d)

 

4

 

 

5

 

 

4

 

 

4

 

 

4

 

 

 

3

 

 

6

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

(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.

 

(3) Includes 100% of the volumes associated with operated equity-method investments, including the Laurel Mountain Midstream partnership, Blue Racer Midstream, and the Bradford Supply Hub and the Marcellus South Supply Hub within the Appalachia Midstream Services partnership.

 

West

 

(UNAUDITED)

 

 

2023

 

2024

 

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

 

Net gathering, processing, transportation, storage, and fractionation revenues

$

382

 

$

373

 

$

371

 

$

397

 

$

1,523

 

 

$

421

 

$

397

 

$

818

 

 

Other fee revenues (1)

 

5

 

 

7

 

 

4

 

 

8

 

 

24

 

 

 

8

 

 

5

 

 

13

 

 

Commodity margins

 

(24

)

 

18

 

 

21

 

 

19

 

 

34

 

 

 

12

 

 

30

 

 

42

 

 

Operating and administrative costs (1)

 

(115

)

 

(122

)

 

(122

)

 

(144

)

 

(503

)

 

 

(139

)

 

(148

)

 

(287

)

 

Other segment income (expenses) - net

 

23

 

 

(7

)

 

(4

)

 

(14

)

 

(2

)

 

 

 

 

(2

)

 

(2

)

 

Proportional Modified EBITDA of equity-method investments

 

33

 

 

43

 

 

45

 

 

41

 

 

162

 

 

 

25

 

 

36

 

 

61

 

 

Modified EBITDA

 

304

 

 

312

 

 

315

 

 

307

 

 

1,238

 

 

 

327

 

 

318

 

 

645

 

 

Adjustments

 

(18

)

 

 

 

 

 

16

 

 

(2

)

 

 

1

 

 

1

 

 

2

 

 

Adjusted EBITDA

$

286

 

$

312

 

$

315

 

$

323

 

$

1,236

 

 

$

328

 

$

319

 

$

647

 

 

 

 

 

 

 

 

 

 

 

 

 

Statistics for Operated Assets

 

 

 

 

 

 

 

 

 

 

Gathering and Processing

 

 

 

 

 

 

 

 

 

 

Consolidated (2)

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d) (3)

 

5.47

 

 

5.51

 

 

5.60

 

 

6.03

 

 

6.02

 

 

 

5.75

 

 

5.25

 

 

5.50

 

 

Plant inlet natural gas volumes (Bcf/d)

 

0.92

 

 

1.06

 

 

1.12

 

 

1.63

 

 

1.54

 

 

 

1.52

 

 

1.48

 

 

1.50

 

 

NGL production (Mbbls/d)

 

25

 

 

40

 

 

61

 

 

99

 

 

91

 

 

 

87

 

 

91

 

 

89

 

 

NGL equity sales (Mbbls/d)

 

6

 

 

16

 

 

22

 

 

14

 

 

14

 

 

 

6

 

 

8

 

 

7

 

 

Non-consolidated

 

 

 

 

 

 

 

 

 

 

Gathering volumes (Bcf/d)

 

0.32

 

 

0.33

 

 

0.33

 

 

 

 

 

 

 

 

 

 

 

 

 

Plant inlet natural gas volumes (Bcf/d)

 

0.32

 

 

0.32

 

 

0.32

 

 

 

 

 

 

 

 

 

 

 

 

 

NGL production (Mbbls/d)

 

37

 

 

38

 

 

38

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

161

 

 

217

 

 

244

 

 

250

 

 

218

 

 

 

220

 

 

292

 

 

256

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 the Cureton Acquisition gathering assets after the purchase on November 30, 2023. Average volumes were calculated over the period owned.

 

(4) Includes 100% of the volumes associated with Overland Pass Pipeline Company (an operated equity-method investment), RMM (during the first three quarters of 2023), as well as volumes for our consolidated Bluestem pipeline.

 

Gas & NGL Marketing Services

 

(UNAUDITED)

 

 

2023

 

2024

 

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

 

Commodity margins

$

265

 

$

(2

)

$

38

 

$

88

 

$

389

 

 

$

236

 

$

3

 

$

239

 

 

Other fee revenues

 

1

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

Net unrealized gain (loss) from derivative instruments

 

333

 

 

94

 

 

24

 

 

208

 

 

659

 

 

 

(95

)

 

(106

)

 

(201

)

 

Operating and administrative costs

 

(32

)

 

(24

)

 

(19

)

 

(24

)

 

(99

)

 

 

(40

)

 

(23

)

 

(63

)

 

Modified EBITDA

 

567

 

 

68

 

 

43

 

 

272

 

 

950

 

 

 

101

 

 

(126

)

 

(25

)

 

Adjustments

 

(336

)

 

(84

)

 

(27

)

 

(203

)

 

(650

)

 

 

88

 

 

112

 

 

200

 

 

Adjusted EBITDA

$

231

 

$

(16

)

$

16

 

$

69

 

$

300

 

 

$

189

 

$

(14

)

$

175

 

 

 

 

 

 

 

 

 

 

 

 

 

Statistics

 

 

 

 

 

 

 

 

 

 

Product Sales Volumes

 

 

 

 

 

 

 

 

 

 

Natural Gas (Bcf/d)

 

7.24

 

 

6.56

 

 

7.31

 

 

7.11

 

 

7.05

 

 

 

7.53

 

 

6.98

 

 

7.25

 

 

NGLs (Mbbls/d)

 

234

 

 

239

 

 

245

 

 

173

 

 

223

 

 

 

170

 

 

162

 

 

166

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

(UNAUDITED)

 

 

2023

 

2024

 

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

 

Service revenues

$

3

 

$

5

 

$

4

 

$

4

 

$

16

 

 

$

4

 

$

4

 

$

8

 

 

Net realized product sales

 

120

 

 

97

 

 

127

 

 

145

 

 

489

 

 

 

113

 

 

109

 

 

222

 

 

Net unrealized gain (loss) from derivative instruments

 

(6

)

 

(11

)

 

(1

)

 

19

 

 

1

 

 

 

3

 

 

(25

)

 

(22

)

 

Operating and administrative costs

 

(48

)

 

(54

)

 

(58

)

 

(65

)

 

(225

)

 

 

(51

)

 

(50

)

 

(101

)

 

Other segment income (expenses) - net

 

5

 

 

5

 

 

10

 

 

8

 

 

28

 

 

 

7

 

 

9

 

 

16

 

 

Net gain from Energy Transfer litigation judgment

 

 

 

 

 

 

 

534

 

 

534

 

 

 

 

 

 

 

 

 

Proportional Modified EBITDA of equity-method investments

 

 

 

(1

)

 

(1

)

 

 

 

(2

)

 

 

 

 

 

 

 

 

Modified EBITDA

 

74

 

 

41

 

 

81

 

 

645

 

 

841

 

 

 

76

 

 

47

 

 

123

 

 

Adjustments

 

6

 

 

11

 

 

1

 

 

(553

)

 

(535

)

 

 

(2

)

 

24

 

 

22

 

 

Adjusted EBITDA

$

80

 

$

52

 

$

82

 

$

92

 

$

306

 

 

$

74

 

$

71

 

$

145

 

 

 

 

 

 

 

 

 

 

 

 

 

Statistics

 

 

 

 

 

 

 

 

 

 

Net Product Sales Volumes

 

 

 

 

 

 

 

 

 

 

Natural Gas (Bcf/d)

 

0.26

 

 

0.29

 

 

0.31

 

 

0.30

 

 

0.29

 

 

 

0.28

 

 

0.24

 

 

0.26

 

 

NGLs (Mbbls/d)

 

3

 

 

6

 

 

9

 

 

10

 

 

7

 

 

 

8

 

 

8

 

 

8

 

 

Crude Oil (Mbbls/d)

 

1

 

 

3

 

 

5

 

 

7

 

 

4

 

 

 

5

 

 

5

 

 

5

 

 

 

 

Capital Expenditures and Investments

 

(UNAUDITED)

 

 

2023

 

2024

 

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

205

$

263

$

382

$

404

$

1,254

 

$

310

$

397

$

707

 

Northeast G&P

 

99

 

74

 

115

 

71

 

359

 

 

71

 

46

 

117

 

West

 

169

 

197

 

141

 

121

 

628

 

 

120

 

90

 

210

 

Other

 

72

 

76

 

52

 

75

 

275

 

 

43

 

46

 

89

 

Total (1)

$

545

$

610

$

690

$

671

$

2,516

 

$

544

$

579

$

1,123

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of and contributions to equity-method investments:

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

8

$

18

$

6

$

9

$

41

 

$

27

$

10

$

37

 

Northeast G&P

 

31

 

12

 

4

 

52

 

99

 

 

25

 

19

 

44

 

West

 

 

 

1

 

 

1

 

 

 

1

 

1

 

Other

 

 

 

 

 

 

 

 

 

 

Total

$

39

$

30

$

11

$

61

$

141

 

$

52

$

30

$

82

 

 

 

 

 

 

 

 

 

 

 

 

Summary:

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

213

$

281

$

388

$

413

$

1,295

 

$

337

$

407

$

744

 

Northeast G&P

 

130

 

86

 

119

 

123

 

458

 

 

96

 

65

 

161

 

West

 

169

 

197

 

142

 

121

 

629

 

 

120

 

91

 

211

 

Other

 

72

 

76

 

52

 

75

 

275

 

 

43

 

46

 

89

 

Total

$

584

$

640

$

701

$

732

$

2,657

 

$

596

$

609

$

1,205

 

 

 

 

 

 

 

 

 

 

 

 

Capital investments:

 

 

 

 

 

 

 

 

 

 

Increases to property, plant, and equipment

$

484

$

684

$

792

$

604

$

2,564

 

$

509

$

632

$

1,141

 

Purchases of businesses, net of cash acquired

 

1,056

 

(3)

 

(29)

 

544

 

1,568

 

 

1,851

 

(7)

 

1,844

 

Purchases of and contributions to equity-method investments

 

39

 

30

 

11

 

61

 

141

 

 

52

 

30

 

82

 

Purchases of other long-term investments

 

2

 

1

 

2

 

1

 

6

 

 

2

 

1

 

3

 

Total

$

1,581

$

712

$

776

$

1,210

$

4,279

 

$

2,414

$

656

$

3,070

 

 

 

 

 

 

 

 

 

 

 

 

(1) Increases to property, plant, and equipment

$

484

$

684

$

792

$

604

$

2,564

 

$

509

$

632

$

1,141

 

Changes in related accounts payable and accrued liabilities

 

61

 

(74)

 

(102)

 

67

 

(48)

 

 

35

 

(53)

 

(18)

 

Capital expenditures

$

545

$

610

$

690

$

671

$

2,516

 

$

544

$

579

$

1,123

 

 

 

 

 

 

 

 

 

 

 

 

Contributions from noncontrolling interests

$

3

$

15

$

$

$

18

 

$

26

$

10

$

36

 

Contributions in aid of construction

$

11

$

7

$

2

$

8

$

28

 

$

10

$

13

$

23

 

Proceeds from sale of business

$

$

$

348

$

(2)

$

346

 

$

$

$

 

Non-GAAP Measures

This news release and accompanying materials may include certain financial measures – adjusted EBITDA, adjusted income (“earnings”), adjusted earnings per share, 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, 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 and adjusted earnings per share. Management believes this measure provides investors meaningful insight into results from ongoing operations.

Available funds from operations (AFFO) is defined as net income (loss) excluding the effect of certain noncash items, reduced by distributions from equity-method investees, net distributions to noncontrolling interests, and preferred dividends. AFFO may also be adjusted to exclude certain items that we characterize as unrepresentative of our ongoing operations.

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, 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)

 

 

2023

 

2024

 

(Dollars in millions, except per-share amounts)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

 

 

 

 

 

 

 

 

 

 

 

 

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

$

926

 

$

547

 

$

654

 

$

1,146

 

$

3,273

 

 

$

631

 

$

401

 

$

1,032

 

 

 

 

 

 

 

 

 

 

 

 

 

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

$

.76

 

$

.45

 

$

.54

 

$

.94

 

$

2.68

 

 

$

.52

 

$

.33

 

$

.84

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

 

 

 

 

 

 

 

 

 

 

MountainWest acquisition and transition-related costs*

$

13

 

$

17

 

$

3

 

$

9

 

$

42

 

 

$

 

$

1

 

$

1

 

 

Gulf Coast Storage acquisition and transition-related costs*

 

 

 

 

 

 

 

1

 

 

1

 

 

 

10

 

 

3

 

 

13

 

 

Gain on sale of business

 

 

 

 

 

(130

)

 

1

 

 

(129

)

 

 

 

 

 

 

 

 

Total Transmission & Gulf of Mexico adjustments

 

13

 

 

17

 

 

(127

)

 

11

 

 

(86

)

 

 

10

 

 

4

 

 

14

 

 

Northeast G&P

 

 

 

 

 

 

 

 

 

 

Accrual for loss contingency*

 

 

 

 

 

 

 

10

 

 

10

 

 

 

 

 

(3

)

 

(3

)

 

Our share of operator transition costs at Blue Racer Midstream*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

1

 

 

Our share of accrual for loss contingency at Aux Sable Liquid

Products LP

 

 

 

 

 

31

 

 

(2

)

 

29

 

 

 

 

 

 

 

 

 

Total Northeast G&P adjustments

 

 

 

 

 

31

 

 

8

 

 

39

 

 

 

 

 

(2

)

 

(2

)

 

West

 

 

 

 

 

 

 

 

 

 

Cureton acquisition and transition-related costs*

 

 

 

 

 

 

 

6

 

 

6

 

 

 

1

 

 

1

 

 

2

 

 

Gain from contract settlement

 

(18

)

 

 

 

 

 

 

 

(18

)

 

 

 

 

 

 

 

 

Impairment of assets held for sale

 

 

 

 

 

 

 

10

 

 

10

 

 

 

 

 

 

 

 

 

Total West adjustments

 

(18

)

 

 

 

 

 

16

 

 

(2

)

 

 

1

 

 

1

 

 

2

 

 

Gas & NGL Marketing Services

 

 

 

 

 

 

 

 

 

 

Impact of volatility on NGL linefill transactions*

 

(3

)

 

10

 

 

(3

)

 

5

 

 

9

 

 

 

(6

)

 

5

 

 

(1

)

 

Net unrealized (gain) loss from derivative instruments

 

(333

)

 

(94

)

 

(24

)

 

(208

)

 

(659

)

 

 

94

 

 

107

 

 

201

 

 

Total Gas & NGL Marketing Services adjustments

 

(336

)

 

(84

)

 

(27

)

 

(203

)

 

(650

)

 

 

88

 

 

112

 

 

200

 

 

Other

 

 

 

 

 

 

 

 

 

 

Net unrealized (gain) loss from derivative instruments

 

6

 

 

11

 

 

1

 

 

(19

)

 

(1

)

 

 

(2

)

 

24

 

 

22

 

 

Net gain from Energy Transfer litigation judgment

 

 

 

 

 

 

 

(534

)

 

(534

)

 

 

 

 

 

 

 

 

Total Other adjustments

 

6

 

 

11

 

 

1

 

 

(553

)

 

(535

)

 

 

(2

)

 

24

 

 

22

 

 

Adjustments included in Modified EBITDA

 

(335

)

 

(56

)

 

(122

)

 

(721

)

 

(1,234

)

 

 

97

 

 

139

 

 

236

 

 

Adjustments below Modified EBITDA

 

 

 

 

 

 

 

 

 

 

Gain on remeasurement of RMM investment

 

 

 

 

 

 

 

(30

)

 

(30

)

 

 

 

 

 

 

 

 

Imputed interest expense on deferred consideration obligations*

 

 

 

 

 

 

 

 

 

 

 

 

12

 

 

12

 

 

24

 

 

Amortization of intangible assets from Sequent acquisition

 

15

 

 

14

 

 

15

 

 

15

 

 

59

 

 

 

7

 

 

7

 

 

14

 

 

 

 

15

 

 

14

 

 

15

 

 

(15

)

 

29

 

 

 

19

 

 

19

 

 

38

 

 

Total adjustments

 

(320

)

 

(42

)

 

(107

)

 

(736

)

 

(1,205

)

 

 

116

 

 

158

 

 

274

 

 

Less tax effect for above items

 

78

 

 

10

 

 

25

 

 

178

 

 

291

 

 

 

(28

)

 

(38

)

 

(66

)

 

Adjustments for tax-related items (2)

 

 

 

 

 

(25

)

 

 

 

(25

)

 

 

 

 

 

 

 

 

Adjusted income from continuing operations available to common stockholders

$

684

 

$

515

 

$

547

 

$

588

 

$

2,334

 

 

$

719

 

$

521

 

$

1,240

 

 

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

$

.56

 

$

.42

 

$

.45

 

$

.48

 

$

1.91

 

 

$

.59

 

$

.43

 

$

1.01

 

 

Weighted-average shares - diluted (thousands)

 

1,225,781

 

 

1,219,915

 

 

1,220,073

 

 

1,221,894

 

 

1,221,616

 

 

 

1,222,222

 

 

1,222,236

 

 

1,222,229

 

 

(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) The third quarter of 2023 includes an adjustment associated with a decrease in our estimated deferred state income tax rate.

 

*Amounts for the 2024 periods are included in Additional adjustments on the Reconciliation of Cash Flow from Operating Activities to Non-GAAP Available Funds from Operations (AFFO).

 

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

 

(UNAUDITED)

 

 

2023

 

2024

 

(Dollars in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Year

 

1st Qtr

2nd Qtr

Year

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

957

 

$

494

 

$

684

 

$

1,168

 

$

3,303

 

 

$

662

 

$

426

 

$

1,088

 

 

Provision (benefit) for income taxes

 

284

 

 

175

 

 

176

 

 

370

 

 

1,005

 

 

 

193

 

 

129

 

 

322

 

 

Interest expense

 

294

 

 

306

 

 

314

 

 

322

 

 

1,236

 

 

 

349

 

 

339

 

 

688

 

 

Equity (earnings) losses

 

(147

)

 

(160

)

 

(127

)

 

(155

)

 

(589

)

 

 

(137

)

 

(147

)

 

(284

)

 

Other investing (income) loss - net

 

(8

)

 

(13

)

 

(24

)

 

(63

)

 

(108

)

 

 

(24

)

 

(18

)

 

(42

)

 

Proportional Modified EBITDA of equity-method investments

 

229

 

 

249

 

 

215

 

 

246

 

 

939

 

 

 

228

 

 

238

 

 

466

 

 

Depreciation and amortization expenses

 

506

 

 

515

 

 

521

 

 

529

 

 

2,071

 

 

 

548

 

 

540

 

 

1,088

 

 

Accretion expense associated with asset retirement obligations for nonregulated operations

 

15

 

 

14

 

 

14

 

 

16

 

 

59

 

 

 

18

 

 

21

 

 

39

 

 

(Income) loss from discontinued operations, net of tax

 

 

 

87

 

 

1

 

 

9

 

 

97

 

 

 

 

 

 

 

 

 

Modified EBITDA

$

2,130

 

$

1,667

 

$

1,774

 

$

2,442

 

$

8,013

 

 

$

1,837

 

$

1,528

 

$

3,365

 

 

 

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

715

 

$

731

 

$

881

 

$

741

 

$

3,068

 

 

$

829

 

$

808

 

$

1,637

 

 

Northeast G&P

 

470

 

 

515

 

 

454

 

 

477

 

 

1,916

 

 

 

504

 

 

481

 

 

985

 

 

West

 

304

 

 

312

 

 

315

 

 

307

 

 

1,238

 

 

 

327

 

 

318

 

 

645

 

 

Gas & NGL Marketing Services

 

567

 

 

68

 

 

43

 

 

272

 

 

950

 

 

 

101

 

 

(126

)

 

(25

)

 

Other

 

74

 

 

41

 

 

81

 

 

645

 

 

841

 

 

 

76

 

 

47

 

 

123

 

 

Total Modified EBITDA

$

2,130

 

$

1,667

 

$

1,774

 

$

2,442

 

$

8,013

 

 

$

1,837

 

$

1,528

 

$

3,365

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments (1):

 

 

 

 

 

 

 

 

 

 

Transmission & Gulf of Mexico

$

13

 

$

17

 

$

(127

)

$

11

 

$

(86

)

 

$

10

 

$

4

 

$

14

 

 

Northeast G&P

 

 

 

 

 

31

 

 

8

 

 

39

 

 

 

 

 

(2

)

 

(2

)

 

West

 

(18

)

 

 

 

 

 

16

 

 

(2

)

 

 

1

 

 

1

 

 

2

 

 

Gas & NGL Marketing Services

 

(336

)

 

(84

)

 

(27

)

 

(203

)

 

(650

)

 

 

88

 

 

112

 

 

200

 

 

Other

 

6

 

 

11

 

 

1

 

 

(553

)

 

(535

)

 

 

(2

)

 

24

 

 

22

 

 

Total Adjustments

$

(335

)

$

(56

)

$

(122

)

$

(721

)

$

(1,