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8-K - FORM 8-K - WILLIAMS COMPANIES, INC. | c63136e8vk.htm |
EX-99.2 - EX-99.2 - WILLIAMS COMPANIES, INC. | c63136exv99w2.htm |
Exhibit 99.1
News Release
|
Williams (NYSE: WMB) One Williams Center Tulsa, OK 74172 800-Williams www.williams.com |
DATE: Feb. 17, 2011
MEDIA CONTACT:
|
INVESTOR CONTACTS: | |||||
Jeff Pounds
|
Travis Campbell | Sharna Reingold | David Sullivan | |||
(918) 573-3332
|
(918) 573-2944 | (918) 573-2078 | (918) 573-9360 |
Williams Reports Fourth-Quarter and Full-Year 2010 Financial Results
| Non-cash Impairment Charges During 3Q, First-quarter Restructuring Costs Drive Net Loss for 2010 | ||
| Higher NGL, Olefin Profits Drive 38% Increase in 2010 Adjusted Results | ||
| 2011-12 Guidance Increased to Reflect Updated Commodity Prices, Bakken Acquisition | ||
| Williams to Initiate High-Dividend Strategy; Plans 60% Increase Starting With Quarterly Payout in June 2011, Additional 10%-15% Targeted in June 2012 |
2010 | 2009 | |||||||||||||||
Year-End Summary Financial Information | millions | per share | millions | per share | ||||||||||||
Per share amounts are reported on a diluted basis. All
amounts are attributable to The Williams Companies, Inc. |
||||||||||||||||
Income (loss) from continuing operations |
$ | (1,091 | ) | $ | (1.87 | ) | $ | 438 | $ | 0.75 | ||||||
Loss from discontinued operations |
(6 | ) | (0.01 | ) | (153 | ) | (0.26 | ) | ||||||||
Net income (loss) |
$ | (1,097 | ) | $ | (1.88 | ) | $ | 285 | $ | 0.49 | ||||||
Adjusted income from continuing operations* |
$ | 760 | $ | 1.28 | $ | 552 | $ | 0.94 | ||||||||
4Q 2010 | 4Q 2009 | |||||||||||||||
Quarterly Summary Financial Information | millions | per share | millions | per share | ||||||||||||
Per share amounts are reported on a diluted basis. All
amounts are attributable to The Williams Companies, Inc. |
||||||||||||||||
Income from continuing operations |
$ | 175 | $ | 0.29 | $ | 172 | $ | 0.29 | ||||||||
Loss from discontinued operations |
(1 | ) | | | | |||||||||||
Net income |
$ | 174 | $ | 0.29 | $ | 172 | $ | 0.29 | ||||||||
Adjusted income from continuing operations* |
$ | 259 | $ | 0.44 | $ | 161 | $ | 0.27 | ||||||||
* | A schedule reconciling income (loss) from continuing operations to adjusted income from continuing operations (non-GAAP measures) is available at www.williams.com and as an attachment to this press release. |
TULSA, Okla. Williams (NYSE: WMB) announced an unaudited net loss attributable to Williams,
for 2010 of $1,097 million, or a loss of $1.88 per share on a diluted basis, compared with net
income of $285 million, or $0.49 per share on a diluted basis for 2009.
Williams (NYSE: WMB) | Full-year 2010 Financial Results Feb. 17, 2011 | Page 1 of 10 |
The net loss for 2010 was primarily the result of significant non-cash impairment charges at the
companys Exploration & Production segment during the third quarter due to a decline in forward
natural gas prices. These included pre-tax charges of approximately $1 billion for an impairment
of goodwill and $678 million related to certain proved and unproved natural gas properties,
primarily in the Barnett Shale. First-quarter pre-tax costs of approximately $648 million in
conjunction with the strategic restructuring that transformed Williams Partners L.P. (NYSE: WPZ)
into a leading diversified master limited partnership also contributed to the net loss for 2010.
For fourth-quarter 2010, Williams reported net income of $174 million, or $0.29 per share, compared
with net income of $172 million, or $0.29 per share for the same period in 2009.
The slight improvement in the fourth-quarter results was driven by higher natural gas liquid (NGL)
and olefin profits, partially offset by a lower net realized price on natural gas production.
All prior-period comparisons in this news release are based on recast 2009 results. The recast
results reflect the companys updated segment financial reporting following the first-quarter and
fourth-quarter 2010 asset drop-down transactions with Williams Partners.
Adjusted Income from Continuing Operations
Adjusted income from continuing operations was $760 million, or $1.28 per share, for 2010, compared
with $552 million, or $0.94 per share for 2009.
For fourth-quarter 2010, adjusted income from continuing operations was $259 million, or $0.44 per
share; compared with $161 million, or $0.27 per share, for the fourth-quarter 2009.
The improvements in the full-year and fourth-quarter results were driven by increases in the
Williams Partners and Other segments, partially offset by lower results in the Exploration &
Production segment. These results are detailed later in this press release.
The fourth-quarter adjusted results also benefited from $65 million of favorable revisions to the
companys estimate of deferred state income taxes.
Adjusted income from continuing operations reflects the removal of items considered
unrepresentative of ongoing operations and the effect of mark-to-market accounting and is a
non-GAAP measure. Reconciliations to the most relevant GAAP measure are attached to this news
release.
Williams (NYSE: WMB) | Full-year 2010 Financial Results Feb. 17, 2011 | Page 2 of 10 |
CEO Comment
The portfolio of our businesses performed very well in the fourth quarter and drove a solid finish
for 2010, said Alan Armstrong, Williams chief executive officer. In addition, our financial
restructuring in 2010 allowed us to invest more than $4 billion dollars that will drive our
expected earnings growth as demonstrated by our 2011-12 guidance.
The continued demand for large-scale infrastructure to serve the growing resource plays will
continue to provide new investment opportunities throughout 2011 and beyond, Armstrong said.
Guidance Update
Williams assumptions for certain energy commodity prices for 2011-12 and the corresponding
guidance for the companys earnings and capital expenditures are displayed in the following table.
Guidance has been updated to reflect higher NGL and oil prices and lower natural gas prices, as
well as the previously announced Bakken Shale acquisition.
Please note that 2011-12 earnings and capital expenditure guidance does not reflect the companys
previously announced plans to separate into two stand-alone, publicly traded companies. However,
this guidance does reflect the companys plan to increase its quarterly dividend to shareholders by
60 percent to $0.20 per Williams share for the first-quarter 2011 dividend, paid in June. An
additional 10 to 15 percent increase is targeted with the June 2012 dividend payment.
Williams (NYSE: WMB) | Full-year 2010 Financial Results Feb. 17, 2011 | Page 3 of 10 |
Commodity Price Assumptions and Financial
Outlook
Outlook
2011 | 2012 | ||||||||||||||||||||||||
As of Feb. 17, 2011 | Low | Mid | High | Low | Mid | High | |||||||||||||||||||
Natural Gas ($/MMBtu): |
|||||||||||||||||||||||||
NYMEX |
$ | 3.40 | $ | 4.25 | $ | 5.10 | $ | 4.00 | $ | 5.00 | $ | 6.00 | |||||||||||||
Rockies |
$ | 3.10 | $ | 3.85 | $ | 4.60 | $ | 3.65 | $ | 4.55 | $ | 5.45 | |||||||||||||
Avg. San Juan/Mid-Continent |
$ | 3.20 | $ | 4.00 | $ | 4.80 | $ | 3.70 | $ | 4.65 | $ | 5.60 | |||||||||||||
Oil / NGL: |
|||||||||||||||||||||||||
Crude Oil WTI ($ per barrel) |
$ | 70 | $ | 87.50 | $ | 105 | $ | 71 | $ | 89 | $ | 107 | |||||||||||||
Crude to Gas Ratio |
20.6x | 20.6x | 20.6x | 17.8x | 17.8x | 17.8x | |||||||||||||||||||
NGL to Crude Oil Relationship |
52 | % | 53 | % | 53 | % | 52 | % | 54 | % | 55 | % | |||||||||||||
Average NGL Margins ($ per gallon) (1) |
$ | 0.52 | $ | 0.68 | $ | 0.83 | $ | 0.50 | $ | 0.68 | $ | 0.85 | |||||||||||||
Capital & Investment Expenditures (millions) |
|||||||||||||||||||||||||
Williams Partners |
$ | 1,580 | $ | 1,743 | $ | 1,905 | $ | 1,150 | $ | 1,300 | $ | 1,450 | |||||||||||||
Exploration & Production |
1,150 | 1,450 | 1,750 | 1,300 | 1,700 | 2,100 | |||||||||||||||||||
Other |
380 | 430 | 480 | 425 | 475 | 525 | |||||||||||||||||||
Total Capital & Investment Expenditures (2) |
$ | 3,125 | $ | 3,625 | $ | 4,125 | $ | 2,875 | $ | 3,475 | $ | 4,075 | |||||||||||||
Cash Flow from Continuing Operations |
$ | 2,500 | $ | 2,900 | $ | 3,300 | $ | 2,700 | $ | 3,350 | $ | 4,000 | |||||||||||||
Adjusted Segment Profit (millions) (3) |
|||||||||||||||||||||||||
Williams Partners |
$ | 1,550 | $ | 1,770 | $ | 1,990 | $ | 1,675 | $ | 1,945 | $ | 2,215 | |||||||||||||
Exploration & Production |
220 | 395 | 570 | 250 | 575 | 900 | |||||||||||||||||||
Other |
175 | 200 | 225 | 200 | 250 | 300 | |||||||||||||||||||
Total Adjusted Segment Profit (2) |
$ | 1,950 | $ | 2,363 | $ | 2,775 | $ | 2,125 | $ | 2,763 | $ | 3,400 | |||||||||||||
Adjusted Diluted Earnings Per Share (3) |
$ | 1.05 | $ | 1.40 | $ | 1.75 | $ | 1.20 | $ | 1.75 | $ | 2.30 |
(1) | In addition to the effect of commodity prices, per-unit margins are increasing because of more percent-of-liquids contracts. | |
(2) | The sum of the ranges for each business line may not match total range. | |
(3) | Adjusted Segment Profit and Adjusted Diluted EPS are adjusted to remove items considered unrepresentative of ongoing operations and the effect of mark-to-market accounting and are non- GAAP measures. Reconciliations to the most relevant GAAP measures are attached to this news release. |
Business Segment Results
Williams business segments for financial reporting are Williams Partners, Exploration &
Production, and Other. The Williams Partners segment includes the consolidated results of Williams
Partners L.P.; Exploration & Production includes the domestic E&P business, gas marketing, and the
companys controlling interest in Apco Oil & Gas International, Inc.; and the Other segment
includes the companys Canadian midstream and domestic olefins businesses and a 25.5-percent
interest in the Gulfstream interstate natural gas pipeline system.
Williams (NYSE: WMB) | Full-year 2010 Financial Results Feb. 17, 2011 | Page 4 of 10 |
Consolidated Segment Profit (Loss) | Full Year | 4Q | |||||||||||||||
Amounts in millions | 2010 | 2009 | 2010 | 2009 | |||||||||||||
Williams Partners |
$ | 1,574 | $ | 1,317 | $ | 418 | $ | 424 | |||||||||
Exploration & Production |
(1,343 | ) | 391 | 64 | 110 | ||||||||||||
Other |
240 | (2 | ) | 54 | 11 | ||||||||||||
Consolidated Segment Profit (Loss) |
$ | 471 | $ | 1,706 | $ | 536 | $ | 545 | |||||||||
Adjusted Consolidated Segment Profit* | Full Year | 4Q | |||||||||||||||
Amounts in millions | 2010 | 2009 | 2010 | 2009 | |||||||||||||
Williams Partners |
$ | 1,542 | $ | 1,278 | $ | 426 | $ | 389 | |||||||||
Exploration & Production |
321 | 483 | 76 | 125 | |||||||||||||
Other |
191 | 66 | 54 | 11 | |||||||||||||
Adjusted Consolidated Segment Profit |
$ | 2,054 | $ | 1,827 | $ | 556 | $ | 525 | |||||||||
* | A schedule reconciling income from continuing operations to adjusted income from continuing operations (non-GAAP measures) is available at www.williams.com and as an attachment to this press release. |
Williams Partners
Williams Partners is focused on natural gas transportation, gathering, treating, processing and
storage; NGL fractionation; and oil transportation.
For 2010, Williams Partners reported segment profit of $1,574 million, compared with $1,317 million
for 2009.
The 20 percent increase in Williams Partners segment profit for the year is primarily due to
higher per-unit NGL margins. Slightly higher NGL equity volumes, due to a full year of production
at Willow Creek and new fourth-quarter production capacity at Echo Springs, also contributed to the
improved results for the year.
There is a more detailed description of Williams Partners interstate gas pipeline and midstream
business results in the partnerships year-end 2010 financial results news release, which is also
being issued today.
Exploration & Production
Exploration & Production primarily develops natural gas reserves in the Piceance, Powder River and
San Juan basins, the Marcellus and Barnett shales; oil reserves in the Bakken Shale; and
internationally in Argentina and Colombia.
The business reported a segment loss of $1,343 million for 2010, compared with segment profit
of $391 million for 2009.
Williams (NYSE: WMB) | Full-year 2010 Financial Results Feb. 17, 2011 | Page 5 of 10 |
The segment loss for 2010 resulted from the previously noted third-quarter non-cash impairment
charges of approximately $1.7 billion for impairments of goodwill and certain proved and unproved
properties, primarily in the Barnett Shale.
Exploration & Productions adjusted segment profit for 2010 was $321 million, compared with $483
million in 2009 on the same adjusted basis.
The decline in segment profit on an adjusted basis is due primarily to lower natural gas production
levels, higher gathering, processing and transportation expenses, in addition to higher operating
taxes and lease operating expenses. These items were partially offset by higher net realized
average prices for natural gas.
Sharply reduced drilling activity in 2009 because of the global recession caused full-year 2010
production to be 4 percent lower. However, increased drilling activity in 2010 began driving
quarter-over-quarter production growth in the second quarter.
Total U.S. production increased 4 percent from third-quarter to fourth-quarter 2010. Additionally,
Williams expects average annual daily production to increase by 9 percent and 10 percent at
guidance midpoints in 2011 and 2012, respectively.
The chart below details Williams average daily natural gas production for 2010.
Average Daily Production | |||||||||||||||||||||||||||||||||
Amounts in million cubic feet | Full Year | 4Q | 3Q | Sequential | |||||||||||||||||||||||||||||
equivalent of natural gas (MMcfe) | 2010 | 2009 | Change | 2010 | 2009 | Change | 2010 | Change | |||||||||||||||||||||||||
Piceance Basin |
674 | 698 | -3 | % | 730 | 683 | 7 | % | 682 | 7 | % | ||||||||||||||||||||||
Powder River Basin |
230 | 244 | -6 | % | 214 | 245 | -13 | % | 237 | -10 | % | ||||||||||||||||||||||
Other Basins |
228 | 240 | -5 | % | 236 | 249 | -5 | % | 216 | 9 | % | ||||||||||||||||||||||
U.S. Interests only |
1,132 | 1,182 | -4 | % | 1,180 | 1,177 | 0 | % | 1,135 | 4 | % | ||||||||||||||||||||||
U.S. & International Interests |
1,185 | 1,236 | -4 | % | 1,227 | 1,232 | 0 | % | 1,190 | 3 | % |
During 2010, Williams net realized average price for U.S. production, inclusive of hedging
gains, was $5.23 per thousand cubic feet of natural gas equivalent (Mcfe), which was 8 percent
higher than the $4.85 per Mcfe realized in 2009.
During fourth-quarter 2010, Williams completed the acquisition of approximately 85,800 net acres
for $925 million (not including closing adjustments predominantly due to additional drilling) in
the Bakken Shale in North Dakota.
Williams (NYSE: WMB) | Full-year 2010 Financial Results Feb. 17, 2011 | Page 6 of 10 |
Williams entry into the Bakken Shale play follows its entry into Pennsylvanias Marcellus Shale,
where the company has accumulated approximately 100,000 net acres over the past year and a half.
In a separate announcement today, Williams announced that its total proved natural gas and oil
reserves as of Dec. 31, 2010, were approximately 4.5 trillion cubic feet equivalent (Tcfe)
including international reserves of approximately 0.2 Tcfe. Proved, probable, and possible (3P)
reserves increased by 7 percent to 15.9 Tcfe from 14.8 Tcfe in 2009. See the separate news release
from today for a more detailed discussion of year-end reserves.
Other
Other reported 2010 segment profit of $240 million, compared with a segment loss of $2 million
for 2009.
The significant improvement in the Other results for 2010 is due primarily to the favorable impact
of higher NGL and olefin production profits from much higher average per-unit margins and the net
impact of recognizing $43 million in gains on the Accroven investment in 2010 while recording a $75
million impairment charge on that investment in 2009.
Todays Analyst Call
Management will discuss the year-end and fourth-quarter 2010 results and 2011-12 outlook during a
live webcast beginning at 9:30 a.m. EST today. Participants are encouraged to access the webcast
and slides for viewing, downloading and printing at
www.williams.com.
A limited number of phone lines also will be available at (888) 298-3451. International callers
should dial (719) 325-2313. Replays of the year-end webcast in both streaming and
downloadable podcast formats will be available for two weeks following the event at
www.williams.com.
Form 10-K
The company plans to file its 2010 Form 10-K with the Securities and Exchange Commission next week.
Once filed, the document will be available on both the SEC and Williams websites.
Non-GAAP Measures
This press release includes certain financial measures, adjusted segment profit, adjusted earnings
and adjusted per share measures that are non-GAAP financial measures as defined under the rules of
the Securities and Exchange Commission. Adjusted segment profit, adjusted earnings and adjusted per
share measures exclude
Williams (NYSE: WMB) | Full-year 2010 Financial Results Feb. 17, 2011 | Page 7 of 10 |
items of income or loss that the company characterizes as unrepresentative
of its ongoing operations and reflects mark-to-market adjustments for certain hedges and other
derivatives in Exploration & Production. These measures provide investors meaningful insight into
the companys results from ongoing operations and better reflect results on a basis that is more
consistent with derivative portfolio cash flows. The mark-to-market adjustments reverse forward
unrealized mark-to-market gains or losses from derivatives and add realized gains or losses from
derivatives for which mark-to-market income has been previously recognized, with the effect that
the resulting adjusted segment profit is presented as if mark-to-market accounting had never been
applied to these derivatives. The measure is limited by the fact that it does not reflect
potential unrealized future losses or gains on derivative contracts. However, management
compensates for this limitation since derivative assets and liabilities do reflect unrealized gains
and losses of derivative contracts. Overall, management believes the mark-to-market adjustments
provide an alternative measure that more closely matches realized cash flows for these derivatives
but does not substitute for actual cash flows.
This press 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 widely
accepted financial indicators used by investors to compare a companys performance. In addition,
management believes that these measures provide investors an enhanced perspective of the operating
performance of the company and aid investor understanding. Neither adjusted segment profit,
adjusted earnings nor adjusted per share measures are intended to represent an alternative to
segment profit, net income or
earnings per share. They should not be considered in isolation or as substitutes for a measure of
performance prepared in accordance with United States generally accepted accounting principles.
About Williams (NYSE: WMB)
Williams is an integrated natural gas company focused on exploration and production, midstream
gathering and processing, and interstate natural gas transportation primarily in the Rocky
Mountains, Gulf Coast, Pacific Northwest, Eastern Seaboard and the Marcellus Shale in Pennsylvania.
Most of the companys interstate gas pipeline and midstream assets are held through its 75-percent
ownership interest (including the general-partner interest) in Williams Partners L.P. (NYSE: WPZ),
a leading diversified master limited partnership. More information is available at
www.williams.com. Go to http://www.b2i.us/irpass.asp?BzID=630&to=ea&s=0 to join our e-mail list.
# # #
Our reports, filings, and other public announcements may contain or incorporate by reference
statements that do not directly or exclusively relate to historical facts. Such statements are
forward-looking
Williams (NYSE: WMB) | Full-year 2010 Financial Results Feb. 17, 2011 | Page 8 of 10 |
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We make these forward
looking statements in reliance on the safe harbor protections provided under the Private Securities
Litigation Reform Act of 1995. You typically can identify forward-looking statements by various
forms of words such as anticipates, believes, seeks, could, may, should, continues,
estimates, expects, forecasts, intends, might, goals, objectives, targets,
planned, potential, projects, scheduled, will or other similar expressions. These
forward-looking statements are based on managements beliefs and assumptions and on information
currently available to management and include, among others, statements regarding:
| Amounts and nature of future capital expenditures; | ||
| Expansion and growth of our business and operations; | ||
| Financial condition and liquidity; | ||
| Business strategy; | ||
| Estimates of proved, probable, and possible gas and oil reserves; | ||
| Reserve potential; | ||
| Development drilling potential; | ||
| Cash flow from operations or results of operations; | ||
| Seasonality of certain business segments; and | ||
| Natural gas, natural gas liquids, and crude oil prices and demand. |
Forward-looking statements are based on numerous assumptions, uncertainties and risks that could
cause future events or results to be materially different from those stated or implied in this
announcement. Many of the factors that will determine these results are beyond our ability to
control or predict. Specific factors that could cause actual results to differ from results
contemplated by the forward-looking statements include, among others, the following:
| Availability of supplies (including the uncertainties inherent in assessing, estimating, acquiring and developing future natural gas and oil reserves), market demand, volatility of prices, and the availability and cost of capital; | ||
| Inflation, interest rates, fluctuation in foreign exchange, and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on our customers and suppliers); | ||
| The strength and financial resources of our competitors; | ||
| Development of alternative energy sources; | ||
| The impact of operational and development hazards; | ||
| Costs of, changes in, or the results of laws, government regulations (including climate change legislation and/or potential additional regulation of drilling and completion of wells), environmental liabilities, litigation, and rate proceedings; | ||
| Our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans; | ||
| Changes in maintenance and construction costs; | ||
| Changes in the current geopolitical situation; | ||
| Our exposure to the credit risk of our customers; | ||
| Risks related to strategy and financing, including restrictions stemming from our debt agreements, future changes in our credit ratings and the availability and cost of credit; | ||
| Risks associated with future weather conditions; | ||
| Acts of terrorism; and | ||
| Additional risks described in our filings with the Securities and Exchange Commission (SEC). |
Given the uncertainties and risk factors that could cause our actual results to differ materially
from those contained in any forward-looking statement, we caution investors not to unduly rely on
our forward-looking statements. We disclaim any obligations to and do not intend to update the
above list or to announce publicly the result of any revisions to any of the forward-looking
statements to reflect future events or developments.
In addition to causing our actual results to differ, the factors listed above may cause our
intentions to change from those statements of intention set forth in this announcement. Such
changes in our intentions may also cause our results to differ. We may change our intentions, at
any time and without notice, based upon changes in such factors, our assumptions, or otherwise.
Investors are urged to closely consider the disclosures and risk factors in our annual report on
Form 10-K filed with the SEC on Feb. 26, 2010, and our quarterly reports on Form 10-Q available
from our offices or from our website at www.williams.com.
The SEC requires oil and gas companies, in filings made with the SEC, to disclose proved reserves,
which are those quantities of oil and gas, which, by analysis of geoscience and engineering data,
can be estimated with reasonable certainty to be economically producible from a given date
forward, from known reservoirs, under existing economic conditions, operating methods, and
governmental regulations. The SEC permits the optional disclosure of probable and possible
reserves. We have elected to use in this presentation, but not in our Annual Report on Form 10-K,
probable reserves and possible reserves, excluding their valuation. The SEC defines
probable reserves as those additional reserves that are less certain to be recovered than proved
reserves but which, together with proved reserves, are as likely as not to be recovered. The SEC
defines possible reserves as those additional reserves that are less certain to be recovered
than probable reserves. Williams has applied these definitions in estimating probable and
possible reserves. Statements of reserves are only estimates and may not correspond to the ultimate
quantities of oil and gas recovered. Any reserve estimates provided in this presentation that are
not specifically designated as being estimates of proved reserves may include estimated reserves
not necessarily calculated in accordance with, or contemplated by, the SECs reserves reporting
guidelines. Investors are urged to consider closely the disclosure in
Williams (NYSE: WMB) | Full-year 2010 Financial Results Feb. 17, 2011 | Page 9 of 10 |
Williams Annual Report on
Form 10-K for the fiscal year ended December 31, 2009, available from Williams at One Williams
Center, Tulsa, OK 74172 (Attn: Investor Relations). You can also obtain this report from the SEC by
calling 1-800-SEC-0330 or from the SECs website at
www.sec.gov.
The SECs rules prohibit us from filing resource estimates. Our resource estimations include
estimates of hydrocarbon quantities for (i) new areas for which we do not have sufficient
information to date to classify as proved, probable or even possible reserves, (ii) other areas to
take into account the low level of certainty of recovery of the resources and (iii) uneconomic
proved, probable or possible reserves. Resource estimates do not take into account the certainty of
resource recovery and are therefore not indicative of the expected future recovery and should not
be relied upon. Resource estimates might never be recovered and are contingent on exploration
success, technical improvements in drilling access, commerciality and other factors.
Williams (NYSE: WMB) | Full-year 2010 Financial Results Feb. 17, 2011 | Page 10 of 10 |
Financial Highlights and Operating Statistics
(UNAUDITED)
(UNAUDITED)
Final
December 31, 2010
Reconciliation of Income (Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Adjusted Income
(UNAUDITED)
(UNAUDITED)
2009 | 2010 | |||||||||||||||||||||||||||||||||||||||
(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 |
$ | 2 | $ | 123 | $ | 141 | $ | 172 | $ | 438 | $ | (195 | ) | $ | 187 | $ | (1,258 | ) | $ | 175 | $ | (1,091 | ) | |||||||||||||||||
Income (loss) from continuing operations diluted earnings per common share |
$ | | $ | 0.21 | $ | 0.24 | $ | 0.29 | $ | 0.75 | $ | (0.33 | ) | $ | 0.31 | $ | (2.15 | ) | $ | 0.29 | $ | (1.87 | ) | |||||||||||||||||
Adjustments: |
||||||||||||||||||||||||||||||||||||||||
Williams Partners (WP) |
||||||||||||||||||||||||||||||||||||||||
Gain on sale of base gas from Hester storage field |
$ | | $ | | $ | | $ | | $ | | $ | (5 | ) | $ | (3 | ) | $ | | $ | | $ | (8 | ) | |||||||||||||||||
Involuntary conversion gain related to Ignacio |
1 | | (5 | ) | | (4 | ) | | (4 | ) | | | (4 | ) | ||||||||||||||||||||||||||
Involuntary conversion gain related Hurricane Ike |
| | | | | | (7 | ) | (7 | ) | | (14 | ) | |||||||||||||||||||||||||||
Gains on sales of certain assets |
| | | (40 | ) | (40 | ) | | | (12 | ) | | (12 | ) | ||||||||||||||||||||||||||
Settlement gain related to Green Canyon development |
| | | | | | | | (6 | ) | (6 | ) | ||||||||||||||||||||||||||||
Loss related to Eminence storage facility leak |
| | | | | | | | 5 | 5 | ||||||||||||||||||||||||||||||
Impairment of certain gathering assets |
| | | | | | | | 9 | 9 | ||||||||||||||||||||||||||||||
Restructuring transaction costs |
| | | 1 | 1 | | | | | | ||||||||||||||||||||||||||||||
Unclaimed
property assessment accrual and adjustment TGPL |
| | | 3 | 3 | | (1 | ) | | | (1 | ) | ||||||||||||||||||||||||||||
Unclaimed property assessment accrual and adjustment NWP |
| | | 1 | 1 | | (1 | ) | | | (1 | ) | ||||||||||||||||||||||||||||
Total Williams Partners adjustments |
1 | | (5 | ) | (35 | ) | (39 | ) | (5 | ) | (16 | ) | (19 | ) | 8 | (32 | ) | |||||||||||||||||||||||
Exploration & Production (E&P) |
||||||||||||||||||||||||||||||||||||||||
Gain on acreage swap |
| | | | | | | | (7 | ) | (7 | ) | ||||||||||||||||||||||||||||
Gain on sale of certain assets |
| | | | | | | (1 | ) | | (1 | ) | ||||||||||||||||||||||||||||
Impairment of goodwill |
| | | | | | | 1,003 | | 1,003 | ||||||||||||||||||||||||||||||
Impairments of certain natural gas properties and reserves |
5 | | | 15 | 20 | | | 678 | | 678 | ||||||||||||||||||||||||||||||
Prior years DD&A related to Piceance measurement issue |
| | | | | | | | 19 | 19 | ||||||||||||||||||||||||||||||
Unclaimed property assessment accrual |
| | | 1 | 1 | | 2 | | | 2 | ||||||||||||||||||||||||||||||
Penalties from early release of drilling rigs |
34 | (2 | ) | | | 32 | | | | | | |||||||||||||||||||||||||||||
Depletion expense adjustment related to new guidance |
| | | 14 | 14 | | | | | | ||||||||||||||||||||||||||||||
Recovery of receivables from bankrupt counterparty |
| | | (4 | ) | (4 | ) | | | | | | ||||||||||||||||||||||||||||
Accrual for Wyoming severance taxes |
| 3 | (4 | ) | (4 | ) | (5 | ) | | | | | | |||||||||||||||||||||||||||
Mark-to-market adjustments |
36 | (7 | ) | 12 | (7 | ) | 34 | (9 | ) | (4 | ) | (17 | ) | | (30 | ) | ||||||||||||||||||||||||
Total Exploration & Production adjustments |
75 | (6 | ) | 8 | 15 | 92 | (9 | ) | (2 | ) | 1,663 | 12 | 1,664 | |||||||||||||||||||||||||||
Other |
||||||||||||||||||||||||||||||||||||||||
(Gain)/Loss from Venezuela investment |
68 | | | | 68 | | (13 | ) | (30 | ) | | (43 | ) | |||||||||||||||||||||||||||
Customer settlement gain |
| | | | | | (6 | ) | | | (6 | ) | ||||||||||||||||||||||||||||
Total Other adjustments |
68 | | | | 68 | | (19 | ) | (30 | ) | | (49 | ) | |||||||||||||||||||||||||||
Adjustments included in segment profit (loss) |
144 | (6 | ) | 3 | (20 | ) | 121 | (14 | ) | (37 | ) | 1,614 | 20 | 1,583 | ||||||||||||||||||||||||||
Adjustments below segment profit (loss) |
||||||||||||||||||||||||||||||||||||||||
Loss associated with Venezuela investment E&P |
11 | | | | 11 | | | | | | ||||||||||||||||||||||||||||||
Impairment of cost-based investment Corporate |
| | 7 | | 7 | | | | | | ||||||||||||||||||||||||||||||
Augusta refinery environmental accrual Corporate |
| | | | | | | 8 | | 8 | ||||||||||||||||||||||||||||||
Reversal of litigation contingency Corporate |
| (5 | ) | | | (5 | ) | | | | | | ||||||||||||||||||||||||||||
Early debt retirement costs Corporate |
| | | | | 606 | | | | 606 | ||||||||||||||||||||||||||||||
Acceleration of unamortized debt costs related to credit
facility amendment -Corporate |
| | | | | 3 | | | | 3 | ||||||||||||||||||||||||||||||
Williams Partners |
| | | | | 1 | | | | 1 | ||||||||||||||||||||||||||||||
Restructuring transaction costs Corporate |
| | | 1 | 1 | 33 | | | | 33 | ||||||||||||||||||||||||||||||
Restructuring transaction costs Williams Partners |
| | | | | 6 | 2 | 4 | | 12 | ||||||||||||||||||||||||||||||
Allocation of Williams Partners adjustments to
noncontrolling interests |
| | | | | (4 | ) | 1 | 1 | (2 | ) | (4 | ) | |||||||||||||||||||||||||||
11 | (5 | ) | 7 | 1 | 14 | 645 | 3 | 13 | (2 | ) | 659 | |||||||||||||||||||||||||||||
Total adjustments |
155 | (11 | ) | 10 | (19 | ) | 135 | 631 | (34 | ) | 1,627 | 18 | 2,242 | |||||||||||||||||||||||||||
Less tax effect for above items |
(29 | ) | 4 | (4 | ) | 8 | (21 | ) | (239 | ) | 9 | (238 | ) | | (468 | ) | ||||||||||||||||||||||||
Adjustments for tax-related items [1] |
| | | | | 11 | | | 66 | 77 | ||||||||||||||||||||||||||||||
Adjusted income from continuing operations available to common stockholders |
$ | 128 | $ | 116 | $ | 147 | $ | 161 | $ | 552 | $ | 208 | $ | 162 | $ | 131 | $ | 259 | $ | 760 | ||||||||||||||||||||
Adjusted diluted earnings per common share,
including mark-to-market adjustments [2] |
$ | 0.22 | $ | 0.20 | $ | 0.25 | $ | 0.27 | $ | 0.94 | $ | 0.36 | $ | 0.27 | $ | 0.22 | $ | 0.44 | $ | 1.28 | ||||||||||||||||||||
Weighted-average shares diluted (thousands) |
582,361 | 588,780 | 590,059 | 591,439 | 589,385 | 583,929 | 592,498 | 584,744 | 594,157 | 592,887 |
[1] | The first quarter of 2010 includes an adjustment for the reduction of tax benefits on the Medicare Part D federal subsidy due to enacted healthcare legislation. The fourth quarter of 2010 includes an adjustment to reflect taxes on undistributed earnings of certain foreign operations that are no longer considered permanently reinvested. | |
[2] | Interest expense, net of tax, associated with our convertible debentures has been added back to adjusted income from continuing operations available to common stockholders to calculate adjusted diluted earnings per common share. | |
Note: | The sum of earnings per share for the quarters may not equal the total earnings per share for the year due to changes in the weighted-average number of common shares outstanding. |
1
Consolidated Statement of Operations
(UNAUDITED)
2009 | 2010 | |||||||||||||||||||||||||||||||||||||||
(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 | ||||||||||||||||||||||||||||||
Revenues |
$ | 1,922 | $ | 1,909 | $ | 2,098 | $ | 2,326 | $ | 8,255 | $ | 2,596 | $ | 2,292 | $ | 2,304 | $ | 2,424 | $ | 9,616 | ||||||||||||||||||||
Segment costs and expenses: |
||||||||||||||||||||||||||||||||||||||||
Costs and operating expenses |
1,444 | 1,392 | 1,537 | 1,708 | 6,081 | 1,922 | 1,723 | 1,752 | 1,788 | 7,185 | ||||||||||||||||||||||||||||||
Selling, general and administrative expenses |
125 | 129 | 126 | 132 | 512 | 111 | 122 | 123 | 142 | 498 | ||||||||||||||||||||||||||||||
Impairments of goodwill and long-lived assets |
5 | | | 15 | 20 | | | 1,681 | 11 | 1,692 | ||||||||||||||||||||||||||||||
Other (income) expense net |
28 | (1 | ) | 1 | (31 | ) | (3 | ) | | (13 | ) | (4 | ) | (7 | ) | (24 | ) | |||||||||||||||||||||||
Total segment costs and expenses |
1,602 | 1,520 | 1,664 | 1,824 | 6,610 | 2,033 | 1,832 | 3,552 | 1,934 | 9,351 | ||||||||||||||||||||||||||||||
Equity earnings (losses) |
23 | 26 | 44 | 43 | 136 | 40 | 39 | 38 | 46 | 163 | ||||||||||||||||||||||||||||||
Income (loss) from investments |
(75 | ) | | | | (75 | ) | | 13 | 30 | | 43 | ||||||||||||||||||||||||||||
Total segment profit (loss) |
268 | 415 | 478 | 545 | 1,706 | 603 | 512 | (1,180 | ) | 536 | 471 | |||||||||||||||||||||||||||||
Reclass equity earnings (losses) |
(23 | ) | (26 | ) | (44 | ) | (43 | ) | (136 | ) | (40 | ) | (39 | ) | (38 | ) | (46 | ) | (163 | ) | ||||||||||||||||||||
Reclass (income) loss from investments |
75 | | | | 75 | | (13 | ) | (30 | ) | | (43 | ) | |||||||||||||||||||||||||||
General corporate expenses |
(40 | ) | (38 | ) | (40 | ) | (46 | ) | (164 | ) | (85 | ) | (45 | ) | (43 | ) | (48 | ) | (221 | ) | ||||||||||||||||||||
Operating income (loss) |
280 | 351 | 394 | 456 | 1,481 | 478 | 415 | (1,291 | ) | 442 | 44 | |||||||||||||||||||||||||||||
Interest accrued |
(162 | ) | (167 | ) | (168 | ) | (164 | ) | (661 | ) | (164 | ) | (154 | ) | (158 | ) | (156 | ) | (632 | ) | ||||||||||||||||||||
Interest capitalized |
20 | 22 | 15 | 19 | 76 | 17 | 13 | 13 | 8 | 51 | ||||||||||||||||||||||||||||||
Investing income net |
(61 | ) | 24 | 39 | 44 | 46 | 39 | 55 | 68 | 47 | 209 | |||||||||||||||||||||||||||||
Early debt retirement costs |
| | | (1 | ) | (1 | ) | (606 | ) | | | | (606 | ) | ||||||||||||||||||||||||||
Other income (expense) net |
(2 | ) | 1 | (1 | ) | 4 | 2 | (7 | ) | (1 | ) | (4 | ) | | (12 | ) | ||||||||||||||||||||||||
Income (loss) from continuing operations before
income taxes |
75 | 231 | 279 | 358 | 943 | (243 | ) | 328 | (1,372 | ) | 341 | (946 | ) | |||||||||||||||||||||||||||
Provision (benefit) for income taxes |
56 | 80 | 87 | 136 | 359 | (95 | ) | 104 | (151 | ) | 112 | (30 | ) | |||||||||||||||||||||||||||
Income (loss) from continuing operations |
19 | 151 | 192 | 222 | 584 | (148 | ) | 224 | (1,221 | ) | 229 | (916 | ) | |||||||||||||||||||||||||||
Income (loss) from discontinued operations |
(243 | ) | 18 | 2 | | (223 | ) | 2 | (2 | ) | (5 | ) | (1 | ) | (6 | ) | ||||||||||||||||||||||||
Net income (loss) |
$ | (224 | ) | $ | 169 | $ | 194 | $ | 222 | $ | 361 | $ | (146 | ) | $ | 222 | $ | (1,226 | ) | $ | 228 | $ | (922 | ) | ||||||||||||||||
Less: Net income (loss) attributable to noncontrolling
interests |
(52 | ) | 27 | 51 | 50 | 76 | 47 | 37 | 37 | 54 | 175 | |||||||||||||||||||||||||||||
Net income (loss) attributable to The Williams
Companies, Inc. |
$ | (172 | ) | $ | 142 | $ | 143 | $ | 172 | $ | 285 | $ | (193 | ) | $ | 185 | $ | (1,263 | ) | $ | 174 | $ | (1,097 | ) | ||||||||||||||||
Amounts attributable to The Williams |
||||||||||||||||||||||||||||||||||||||||
Companies, Inc.: |
||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations |
$ | 2 | $ | 123 | $ | 141 | $ | 172 | $ | 438 | $ | (195 | ) | $ | 187 | $ | (1,258 | ) | $ | 175 | $ | (1,091 | ) | |||||||||||||||||
Income (loss) from discontinued operations |
(174 | ) | 19 | 2 | | (153 | ) | 2 | (2 | ) | (5 | ) | (1 | ) | (6 | ) | ||||||||||||||||||||||||
Net income (loss) |
$ | (172 | ) | $ | 142 | $ | 143 | $ | 172 | $ | 285 | $ | (193 | ) | $ | 185 | $ | (1,263 | ) | $ | 174 | $ | (1,097 | ) | ||||||||||||||||
Diluted earnings (loss) per common share: |
||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations |
$ | | $ | 0.21 | $ | 0.24 | $ | 0.29 | $ | 0.75 | $ | (0.33 | ) | $ | 0.31 | $ | (2.15 | ) | $ | 0.29 | $ | (1.87 | ) | |||||||||||||||||
Income (loss) from discontinued operations |
(0.29 | ) | 0.03 | | | (0.26 | ) | | | (0.01 | ) | | (0.01 | ) | ||||||||||||||||||||||||||
Net income (loss) |
$ | (0.29 | ) | $ | 0.24 | $ | 0.24 | $ | 0.29 | $ | 0.49 | $ | (0.33 | ) | $ | 0.31 | $ | (2.16 | ) | $ | 0.29 | $ | (1.88 | ) | ||||||||||||||||
Weighted-average number of shares used in
computations (thousands) |
582,361 | 588,780 | 590,059 | 591,439 | 589,385 | 583,929 | 592,498 | 584,744 | 594,157 | 584,552 | ||||||||||||||||||||||||||||||
Common shares outstanding at end of period
(thousands) |
580,072 | 582,933 | 583,101 | 583,432 | 583,432 | 584,223 | 584,546 | 584,724 | 585,891 | 585,891 | ||||||||||||||||||||||||||||||
Market price per common share (end of period) |
$ | 11.38 | $ | 15.61 | $ | 17.87 | $ | 21.08 | $ | 21.08 | $ | 23.10 | $ | 18.28 | $ | 19.11 | $ | 24.72 | $ | 24.72 | ||||||||||||||||||||
Common dividends per share |
$ | 0.11 | $ | 0.11 | $ | 0.11 | $ | 0.11 | $ | 0.44 | $ | 0.11 | $ | 0.125 | $ | 0.125 | $ | 0.125 | $ | 0.485 |
Note: | The sum of earnings (loss) per share for the quarters may not equal the total earnings (loss) per share for the year due to changes in the weighted-average number of common shares outstanding. |
2
Reconciliation of Segment Profit (Loss) to Adjusted Segment Profit (Loss)
(UNAUDITED)
2009* | 2010 | ||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr* | 2nd Qtr* | 3rd Qtr* | 4th Qtr | Year | |||||||||||||||||||||||||||||||||
Segment profit (loss): |
|||||||||||||||||||||||||||||||||||||||||||
Williams Partners |
$ | 254 | $ | 292 | $ | 347 | $ | 424 | $ | 1,317 | $ | 424 | $ | 361 | $ | 371 | $ | 418 | $ | 1,574 | |||||||||||||||||||||||
Exploration & Production |
74 | 107 | 100 | 110 | 391 | 152 | 72 | (1,631 | ) | 64 | (1,343 | ) | |||||||||||||||||||||||||||||||
Other |
(60 | ) | 16 | 31 | 11 | (2 | ) | 27 | 79 | 80 | 54 | 240 | |||||||||||||||||||||||||||||||
Total segment profit (loss) |
$ | 268 | $ | 415 | $ | 478 | $ | 545 | $ | 1,706 | $ | 603 | $ | 512 | $ | (1,180 | ) | $ | 536 | $ | 471 | ||||||||||||||||||||||
Adjustments: |
|||||||||||||||||||||||||||||||||||||||||||
Williams Partners |
$ | 1 | $ | | $ | (5 | ) | $ | (35 | ) | $ | (39 | ) | $ | (5 | ) | $ | (16 | ) | $ | (19 | ) | $ | 8 | $ | (32 | ) | ||||||||||||||||
Exploration & Production |
75 | (6 | ) | 8 | 15 | 92 | (9 | ) | (2 | ) | 1,663 | 12 | 1,664 | ||||||||||||||||||||||||||||||
Other |
68 | | | | 68 | | (19 | ) | (30 | ) | | (49 | ) | ||||||||||||||||||||||||||||||
Total segment adjustments |
$ | 144 | $ | (6 | ) | $ | 3 | $ | (20 | ) | $ | 121 | $ | (14 | ) | $ | (37 | ) | $ | 1,614 | $ | 20 | $ | 1,583 | |||||||||||||||||||
Adjusted segment profit (loss): |
|||||||||||||||||||||||||||||||||||||||||||
Williams Partners |
$ | 255 | $ | 292 | $ | 342 | $ | 389 | $ | 1,278 | $ | 419 | $ | 345 | $ | 352 | $ | 426 | $ | 1,542 | |||||||||||||||||||||||
Exploration & Production |
149 | 101 | 108 | 125 | 483 | 143 | 70 | 32 | 76 | 321 | |||||||||||||||||||||||||||||||||
Other |
8 | 16 | 31 | 11 | 66 | 27 | 60 | 50 | 54 | 191 | |||||||||||||||||||||||||||||||||
Total adjusted segment profit (loss) |
$ | 412 | $ | 409 | $ | 481 | $ | 525 | $ | 1,827 | $ | 589 | $ | 475 | $ | 434 | $ | 556 | $ | 2,054 | |||||||||||||||||||||||
* | Amounts reported for Williams Partners and Exploration & Production have been recast to reflect the impact of the November 2010 Piceance Acquisition. | |
Note: Segment profit (loss) includes equity earnings (losses) and income (loss) from investments reported in investing income net in the Consolidated Statement of Operations. Equity earnings (losses) results from investments accounted for under the equity method. Income (loss) from investments results from the management of certain equity investments. |
3
Williams Partners
(UNAUDITED)
(UNAUDITED)
2009* | 2010 | ||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr* | 2nd Qtr* | 3rd Qtr* | 4th Qtr | Year | |||||||||||||||||||||||||||||||||
Revenues |
$ | 980 | $ | 1,107 | $ | 1,201 | $ | 1,314 | $ | 4,602 | $ | 1,490 | $ | 1,400 | $ | 1,327 | $ | 1,498 | $ | 5,715 | |||||||||||||||||||||||
Segment costs and expenses: |
|||||||||||||||||||||||||||||||||||||||||||
Costs and operating expenses |
661 | 754 | 810 | 875 | 3,100 | 1,033 | 1,002 | 923 | 1,026 | 3,984 | |||||||||||||||||||||||||||||||||
Selling, general and administrative
expenses |
72 | 74 | 75 | 79 | 300 | 62 | 70 | 70 | 79 | 281 | |||||||||||||||||||||||||||||||||
Other (income) expense net |
(2 | ) | 3 | (1 | ) | (34 | ) | (34 | ) | (3 | ) | (6 | ) | (13 | ) | 7 | (15 | ) | |||||||||||||||||||||||||
Total segment costs and expenses |
731 | 831 | 884 | 920 | 3,366 | 1,092 | 1,066 | 980 | 1,112 | 4,250 | |||||||||||||||||||||||||||||||||
Equity earnings |
5 | 16 | 30 | 30 | 81 | 26 | 27 | 24 | 32 | 109 | |||||||||||||||||||||||||||||||||
Reported segment profit |
254 | 292 | 347 | 424 | 1,317 | 424 | 361 | 371 | 418 | 1,574 | |||||||||||||||||||||||||||||||||
Adjustments |
1 | | (5 | ) | (35 | ) | (39 | ) | (5 | ) | (16 | ) | (19 | ) | 8 | (32 | ) | ||||||||||||||||||||||||||
Adjusted segment profit |
$ | 255 | $ | 292 | $ | 342 | $ | 389 | $ | 1,278 | $ | 419 | $ | 345 | $ | 352 | $ | 426 | $ | 1,542 | |||||||||||||||||||||||
* | Amounts reported have been recast to reflect the impact of the November 2010 Piceance Acquisition. |
4
Exploration & Production
(UNAUDITED)
(UNAUDITED)
2009* | 2010 | |||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr* | 2nd Qtr* | 3rd Qtr* | 4th Qtr | Year | ||||||||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||||||||||||||
Production |
$ | 523 | $ | 486 | $ | 509 | $ | 575 | $ | 2,093 | $ | 571 | $ | 510 | $ | 530 | $ | 549 | $ | 2,160 | ||||||||||||||||||||
Gas management |
411 | 276 | 344 | 425 | 1,456 | 556 | 366 | 435 | 386 | 1,743 | ||||||||||||||||||||||||||||||
Hedge ineffectiveness and forward mark-to-
market gains (losses) |
10 | (1 | ) | | 9 | 18 | 9 | | 16 | 2 | 27 | |||||||||||||||||||||||||||||
International |
17 | 17 | 20 | 21 | 75 | 20 | 22 | 22 | 25 | 89 | ||||||||||||||||||||||||||||||
Other |
9 | 26 | 1 | 6 | 42 | 6 | 6 | 6 | 5 | 23 | ||||||||||||||||||||||||||||||
Total revenues |
970 | 804 | 874 | 1,036 | 3,684 | 1,162 | 904 | 1,009 | 967 | 4,042 | ||||||||||||||||||||||||||||||
Segment costs and expenses: |
||||||||||||||||||||||||||||||||||||||||
Depreciation, depletion and amortization
(including International) |
214 | 212 | 212 | 231 | 869 | 211 | 214 | 223 | 248 | 896 | ||||||||||||||||||||||||||||||
Lease and other operating expenses |
60 | 51 | 52 | 52 | 215 | 53 | 56 | 63 | 73 | 245 | ||||||||||||||||||||||||||||||
Operating taxes |
27 | 1 | 18 | 25 | 71 | 36 | 28 | 35 | 16 | 115 | ||||||||||||||||||||||||||||||
Exploration expense |
13 | 21 | 4 | 20 | 58 | 5 | 10 | 27 | 19 | 61 | ||||||||||||||||||||||||||||||
Third party & affiliate gathering, processing
and transportation |
77 | 83 | 81 | 100 | 341 | 100 | 98 | 107 | 112 | 417 | ||||||||||||||||||||||||||||||
Selling, general and administrative expenses
(including International) |
45 | 45 | 44 | 45 | 179 | 41 | 42 | 45 | 51 | 179 | ||||||||||||||||||||||||||||||
Gas management expenses |
422 | 278 | 357 | 439 | 1,496 | 558 | 376 | 446 | 394 | 1,774 | ||||||||||||||||||||||||||||||
International (excluding DD&A and SG&A) |
7 | 6 | 9 | 8 | 30 | 11 | 10 | 9 | 11 | 41 | ||||||||||||||||||||||||||||||
Impaiment of goodwill and long-lived assets |
5 | | | 15 | 20 | | | 1,681 | 3 | 1,684 | ||||||||||||||||||||||||||||||
Other expense net |
30 | 4 | 1 | (3 | ) | 32 | | 3 | 9 | (19 | ) | (7 | ) | |||||||||||||||||||||||||||
Total segment costs and expenses |
900 | 701 | 778 | 932 | 3,311 | 1,015 | 837 | 2,645 | 908 | 5,405 | ||||||||||||||||||||||||||||||
Equity earnings |
4 | 4 | 4 | 6 | 18 | 5 | 5 | 5 | 5 | 20 | ||||||||||||||||||||||||||||||
Reported segment profit |
74 | 107 | 100 | 110 | 391 | 152 | 72 | (1,631 | ) | 64 | (1,343 | ) | ||||||||||||||||||||||||||||
Adjustments |
75 | (6 | ) | 8 | 15 | 92 | (9 | ) | (2 | ) | 1,663 | 12 | 1,664 | |||||||||||||||||||||||||||
Adjusted segment profit |
$ | 149 | $ | 101 | $ | 108 | $ | 125 | $ | 483 | $ | 143 | $ | 70 | $ | 32 | $ | 76 | $ | 321 | ||||||||||||||||||||
Operating statistics |
||||||||||||||||||||||||||||||||||||||||
Domestic: |
||||||||||||||||||||||||||||||||||||||||
Total domestic net volumes (Bcfe) |
110.3 | 107.4 | 105.6 | 108.2 | 431.5 | 99.2 | 101.0 | 104.4 | 108.5 | 413.1 | ||||||||||||||||||||||||||||||
Net domestic volumes per day (MMcfe/d) |
1,225 | 1,180 | 1,148 | 1,177 | 1,182 | 1,102 | 1,110 | 1,135 | 1,180 | 1,132 | ||||||||||||||||||||||||||||||
Domestic realized price ($/Mcfe) (1) |
$ | 4.746 | $ | 4.523 | $ | 4.814 | $ | 5.313 | $ | 4.849 | $ | 5.759 | $ | 5.051 | $ | 5.075 | $ | 5.054 | $ | 5.228 | ||||||||||||||||||||
Net domestic realized price ($/Mcfe) (2) |
$ | 4.052 | $ | 3.753 | $ | 4.039 | $ | 4.389 | $ | 4.059 | $ | 4.752 | $ | 4.076 | $ | 4.049 | $ | 4.025 | $ | 4.218 | ||||||||||||||||||||
Production taxes per Mcfe |
$ | 0.243 | $ | 0.013 | $ | 0.170 | $ | 0.229 | $ | 0.164 | $ | 0.361 | $ | 0.274 | $ | 0.338 | $ | 0.145 | $ | 0.277 | ||||||||||||||||||||
Lease and other operating expense per Mcfe |
$ | 0.544 | $ | 0.478 | $ | 0.489 | $ | 0.479 | $ | 0.498 | $ | 0.534 | $ | 0.560 | $ | 0.607 | $ | 0.663 | $ | 0.592 |
(1) Domestic realized price is calculated the following way: production revenues (including hedging activities) divided by net volumes. | ||||||||||||||||||||||||||||||||||||||||
(2) Net domestic realized price is calculated the following way: production revenues (including hedging activities) less gathering & processing expense divided by net volumes. | ||||||||||||||||||||||||||||||||||||||||
International: |
||||||||||||||||||||||||||||||||||||||||
Total volumes including Equity Investee (Bcfe) |
6.1 | 6.2 | 6.3 | 6.5 | 25.1 | 6.2 | 6.7 | 6.4 | 5.5 | 24.8 | ||||||||||||||||||||||||||||||
Volumes per day (MMcfe/d) |
67 | 68 | 69 | 71 | 69 | 69 | 73 | 69 | 60 | 68 | ||||||||||||||||||||||||||||||
Volumes net to Williams (after minority interest) (Bcfe) |
4.8 | 4.8 | 5.0 | 5.1 | 19.7 | 4.9 | 5.3 | 5.0 | 4.3 | 19.5 | ||||||||||||||||||||||||||||||
Volumes net to Williams per day (MMcfe/d) |
53 | 53 | 54 | 55 | 54 | 54 | 58 | 55 | 47 | 53 | ||||||||||||||||||||||||||||||
Total Domestic and International: |
||||||||||||||||||||||||||||||||||||||||
Volumes net to Williams (after minority interest) (Bcfe) |
115.0 | 112.2 | 110.6 | 113.4 | 451.2 | 104.1 | 106.2 | 109.5 | 112.8 | 432.6 | ||||||||||||||||||||||||||||||
Volumes net to Williams per day (MMcfe/d) |
1,278 | 1,233 | 1,202 | 1,232 | 1,236 | 1,156 | 1,168 | 1,190 | 1,227 | 1,185 |
* | Amounts reported have been recast to reflect the sale of certain Piceance assets to Williams Partners in November 2010. |
5
Other
(UNAUDITED)
(UNAUDITED)
2009 | 2010 | |||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | ||||||||||||||||||||||||||||||
Revenues |
$ | 158 | $ | 170 | $ | 222 | $ | 230 | $ | 780 | $ | 278 | $ | 262 | $ | 238 | $ | 279 | $ | 1,057 | ||||||||||||||||||||
Reported segment profit (loss) |
$ | (60 | ) | $ | 16 | $ | 31 | $ | 11 | $ | (2 | ) | $ | 27 | $ | 79 | $ | 80 | $ | 54 | $ | 240 | ||||||||||||||||||
Adjustments |
68 | | | | 68 | | (19 | ) | (30 | ) | | (49 | ) | |||||||||||||||||||||||||||
Adjusted segment profit |
$ | 8 | $ | 16 | $ | 31 | $ | 11 | $ | 66 | $ | 27 | $ | 60 | $ | 50 | $ | 54 | $ | 191 | ||||||||||||||||||||
Operating statistics |
||||||||||||||||||||||||||||||||||||||||
Olefins |
||||||||||||||||||||||||||||||||||||||||
Olefins sales (Ethylene & Propylene) (million lbs) |
462 | 445 | 437 | 384 | 1,728 | 396 | 391 | 416 | 326 | 1,529 | ||||||||||||||||||||||||||||||
Canadian NGL equity sales (million gallons) |
36 | 30 | 37 | 23 | 126 | 23 | 31 | 27 | 35 | 116 |
6
Capital Expenditures and Investments
(UNAUDITED)
(UNAUDITED)
2009* | 2010 | |||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr* | 2nd Qtr* | 3rd Qtr* | 4th Qtr | Year | ||||||||||||||||||||||||||||||
Capital expenditures: |
||||||||||||||||||||||||||||||||||||||||
Williams Partners |
$ | 168 | $ | 221 | $ | 252 | $ | 266 | $ | 907 | $ | 120 | $ | 221 | $ | 246 | $ | 250 | $ | 837 | ||||||||||||||||||||
Exploration & Production |
435 | 225 | 483 | 271 | 1,414 | 286 | 263 | 894 | 396 | 1,839 | ||||||||||||||||||||||||||||||
Other |
9 | 19 | 17 | 21 | 66 | 22 | 28 | 31 | 31 | 112 | ||||||||||||||||||||||||||||||
Total** |
$ | 612 | $ | 465 | $ | 752 | $ | 558 | $ | 2,387 | $ | 428 | $ | 512 | $ | 1,171 | $ | 677 | $ | 2,788 | ||||||||||||||||||||
Purchase of businesses: |
||||||||||||||||||||||||||||||||||||||||
Williams Partners |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | 150 | $ | 150 | ||||||||||||||||||||
Exploration & Production |
| | | | | | | | 949 | 949 | ||||||||||||||||||||||||||||||
Other |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Total |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | 1,099 | $ | 1,099 | ||||||||||||||||||||
Purchase of investments: |
||||||||||||||||||||||||||||||||||||||||
Williams Partners |
$ | 8 | $ | 115 | $ | | $ | 8 | $ | 131 | $ | 9 | $ | 6 | $ | 435 | $ | 26 | $ | 476 | ||||||||||||||||||||
Exploration & Production |
| | 1 | | 1 | 2 | 2 | 2 | 1 | 7 | ||||||||||||||||||||||||||||||
Other |
5 | 1 | 2 | 2 | 10 | 2 | (1 | ) | 2 | 2 | 5 | |||||||||||||||||||||||||||||
Total |
$ | 13 | $ | 116 | $ | 3 | $ | 10 | $ | 142 | $ | 13 | $ | 7 | $ | 439 | $ | 29 | $ | 488 | ||||||||||||||||||||
Summary: |
||||||||||||||||||||||||||||||||||||||||
Williams Partners |
$ | 176 | $ | 336 | $ | 252 | $ | 274 | $ | 1,038 | $ | 129 | $ | 227 | $ | 681 | $ | 426 | $ | 1,463 | ||||||||||||||||||||
Exploration & Production |
435 | 225 | 484 | 271 | 1,415 | 288 | 265 | 896 | 1,346 | 2,795 | ||||||||||||||||||||||||||||||
Other |
14 | 20 | 19 | 23 | 76 | 24 | 27 | 33 | 33 | 117 | ||||||||||||||||||||||||||||||
Total |
$ | 625 | $ | 581 | $ | 755 | $ | 568 | $ | 2,529 | $ | 441 | $ | 519 | $ | 1,610 | $ | 1,805 | $ | 4,375 | ||||||||||||||||||||
Cumulative summary: |
||||||||||||||||||||||||||||||||||||||||
Williams Partners |
$ | 176 | $ | 512 | $ | 764 | $ | 1,038 | $ | 1,038 | $ | 129 | $ | 356 | $ | 1,037 | $ | 1,463 | $ | 1,463 | ||||||||||||||||||||
Exploration & Production |
435 | 660 | 1,144 | 1,415 | 1,415 | 288 | 553 | 1,449 | 2,795 | 2,795 | ||||||||||||||||||||||||||||||
Other |
14 | 34 | 53 | 76 | 76 | 24 | 51 | 84 | 117 | 117 | ||||||||||||||||||||||||||||||
Total |
$ | 625 | $ | 1,206 | $ | 1,961 | $ | 2,529 | $ | 2,529 | $ | 441 | $ | 960 | $ | 2,570 | $ | 4,375 | $ | 4,375 | ||||||||||||||||||||
Capital expenditures incurred and purchase of investments |
||||||||||||||||||||||||||||||||||||||||
Increases to property, plant, and equipment |
$ | 484 | $ | 420 | $ | 809 | $ | 601 | $ | 2,314 | $ | 410 | $ | 488 | $ | 1,174 | $ | 683 | $ | 2,755 | ||||||||||||||||||||
Purchase of businesses |
| | | | | | | | 1,099 | 1,099 | ||||||||||||||||||||||||||||||
Purchase of investments |
13 | 116 | 3 | 10 | 142 | 13 | 7 | 439 | 29 | 488 | ||||||||||||||||||||||||||||||
Total |
$ | 497 | $ | 536 | $ | 812 | $ | 611 | $ | 2,456 | $ | 423 | $ | 495 | $ | 1,613 | $ | 1,811 | $ | 4,342 | ||||||||||||||||||||
**Increases to property, plant, and equipment |
$ | 484 | $ | 420 | $ | 809 | $ | 601 | $ | 2,314 | $ | 410 | $ | 488 | $ | 1,174 | $ | 683 | $ | 2,755 | ||||||||||||||||||||
Changes in related accounts payable and accrued liabilities |
128 | 45 | (57 | ) | (43 | ) | 73 | 18 | 24 | (3 | ) | (6 | ) | 33 | ||||||||||||||||||||||||||
Capital expenditures |
$ | 612 | $ | 465 | $ | 752 | $ | 558 | $ | 2,387 | $ | 428 | $ | 512 | $ | 1,171 | $ | 677 | $ | 2,788 | ||||||||||||||||||||
* | Amounts reported for Williams Partners and Exploration & Production have been recast to reflect the impact of the November 2010 Piceance Acquisition. |
7
Depreciation, Depletion, and Amortization and Other Selected Financial Data
(UNAUDITED)
2009* | 2010 | |||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr* | 2nd Qtr* | 3rd Qtr* | 4th Qtr | Year | ||||||||||||||||||||||||||||||
Depreciation, depletion, and amortization: |
||||||||||||||||||||||||||||||||||||||||
Williams Partners |
$ | 135 | $ | 136 | $ | 139 | $ | 143 | $ | 553 | $ | 140 | $ | 140 | $ | 140 | $ | 148 | $ | 568 | ||||||||||||||||||||
Exploration & Production |
214 | 212 | 212 | 230 | 868 | 211 | 214 | 224 | 246 | 895 | ||||||||||||||||||||||||||||||
Other |
10 | 11 | 10 | 9 | 40 | 10 | 12 | 10 | 12 | 44 | ||||||||||||||||||||||||||||||
Discontinued Operations |
8 | | | | 8 | | | | | | ||||||||||||||||||||||||||||||
Total |
$ | 367 | $ | 359 | $ | 361 | $ | 382 | $ | 1,469 | $ | 361 | $ | 366 | $ | 374 | $ | 406 | $ | 1,507 | ||||||||||||||||||||
Other selected financial data: |
||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents |
$ | 1,785 | $ | 1,853 | $ | 1,640 | $ | 1,867 | $ | 1,867 | $ | 1,644 | $ | 1,601 | $ | 1,015 | $ | 795 | $ | 795 | ||||||||||||||||||||
Total assets |
$ | 25,368 | $ | 25,026 | $ | 24,952 | $ | 25,280 | $ | 25,280 | $ | 25,129 | $ | 24,947 | $ | 23,848 | $ | 24,972 | $ | 24,972 | ||||||||||||||||||||
Capital structure: |
||||||||||||||||||||||||||||||||||||||||
Debt |
||||||||||||||||||||||||||||||||||||||||
Current |
$ | 3 | $ | 13 | $ | 19 | $ | 17 | $ | 17 | $ | 10 | $ | 160 | $ | 508 | $ | 508 | $ | 508 | ||||||||||||||||||||
Noncurrent |
$ | 8,278 | $ | 8,265 | $ | 8,258 | $ | 8,259 | $ | 8,259 | $ | 8,615 | $ | 8,358 | $ | 8,002 | $ | 8,600 | $ | 8,600 | ||||||||||||||||||||
Stockholders equity |
$ | 8,326 | $ | 8,324 | $ | 8,307 | $ | 8,447 | $ | 8,447 | $ | 7,573 | $ | 7,633 | $ | 7,025 | $ | 7,288 | $ | 7,288 | ||||||||||||||||||||
Debt to debt-plus-stockholders equity ratio |
49.9 | % | 49.9 | % | 49.9 | % | 49.5 | % | 49.5 | % | 53.2 | % | 52.7 | % | 54.8 | % | 55.6 | % | 55.6 | % |
* | Amounts reported for Williams Partners and Exploration & Production have been recast to reflect the impact of the November 2010 Piceance Acquisition. |
8
Segment profit guidance reported to adjusted
2011 Guidance | 2012 Guidance | ||||||||||||||||||||||||
Dollars in millions | Low | Midpoint | High | Low | Midpoint | High | |||||||||||||||||||
Reported segment profit: |
|||||||||||||||||||||||||
Williams Partners (WPZ) |
1,550 | 1,770 | 1,990 | 1,675 | 1,945 | 2,215 | |||||||||||||||||||
Exploration & Production |
200 | 375 | 550 | 250 | 575 | 900 | |||||||||||||||||||
Other |
175 | 200 | 225 | 200 | 250 | 300 | |||||||||||||||||||
Total Reported segment profit |
1,930 | 2,343 | 2,755 | 2,125 | 2,763 | 3,400 | |||||||||||||||||||
Adjustments: |
|||||||||||||||||||||||||
Mark-to-Market adjustment |
20 | 20 | 20 | | | | |||||||||||||||||||
Total Adjustments Exploration & Production |
20 | 20 | 20 | | | | |||||||||||||||||||
Total Adjustments |
20 | 20 | 20 | | | | |||||||||||||||||||
Adjusted segment profit: |
|||||||||||||||||||||||||
Williams Partners (WPZ) |
1,550 | 1,770 | 1,990 | 1,675 | 1,945 | 2,215 | |||||||||||||||||||
Exploration & Production |
220 | 395 | 570 | 250 | 575 | 900 | |||||||||||||||||||
Other |
175 | 200 | 225 | 200 | 250 | 300 | |||||||||||||||||||
Total Adjusted segment profit |
1,950 | 2,363 | 2,775 | 2,125 | 2,763 | 3,400 |
The sum of the ranges for the business units may not match the consolidated total due to
rounding and other adjustments.
Reconciliation of forecasted reported income from continuing operations
to adjusted income from continuing operations after MTM adjustments
to adjusted income from continuing operations after MTM adjustments
2011 Guidance | 2012 Guidance | ||||||||||||||||||||||||
Dollars in millions | Low | Midpoint | High | Low | Midpoint | High | |||||||||||||||||||
Reported income from continuing
operations |
$ | 708 | $ | 918 | $ | 1,128 | $ | 725 | $ | 1,058 | $ | 1,390 | |||||||||||||
Adjustments pretax |
20 | 20 | 20 | | | | |||||||||||||||||||
Less taxes |
(98 | )1 | (98 | )1 | (98 | )1 | | | | ||||||||||||||||
Adjustments after tax |
(78 | ) | (78 | ) | (78 | ) | | | | ||||||||||||||||
Adjusted income from continuing ops |
$ | 630 | $ | 840 | $ | 1,050 | $ | 725 | $ | 1,058 | $ | 1,390 | |||||||||||||
Adjusted EPS |
$ | 1.05 | $ | 1.40 | $ | 1.75 | $ | 1.20 | $ | 1.75 | $ | 2.30 |
1) | Includes the estimated $90 million impact of a tax settlement finalized in early 2011. |