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| 8-K - FORM 8-K - WILLIAMS COMPANIES, INC. | c66115e8vk.htm |
Exhibit 99.1
News Release
|
Williams (NYSE: WMB) One Williams Center Tulsa, OK 74172 800-Williams www.williams.com |
 |
DATE: Sept. 6, 2011
MEDIA CONTACT:
|
INVESTOR CONTACT: | |
Jeff Pounds
|
Sharna Reingold | |
(918) 573-3332
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(918) 573-2078 |
Williams to Increase Annual Dividend by 25% to $1.00 per Share;
Provides 2011-13 Guidance Reflecting Separation of E&P Business
Provides 2011-13 Guidance Reflecting Separation of E&P Business
| • | Expect Growth in Business and Williams Partners Distributions to Drive Annual 10%-15% Dividend Increases | ||
| • | New Dividend Policy Supports Continued High Payouts | ||
| • | New 2011-13 Guidance Reflects E&P Separation | ||
| • | Committed to E&P Separation; IPO Timing Dependent on Market Conditions | ||
| • | CEO Alan Armstrong to Discuss Strategy at Barclays Capital CEO Energy-Power Conference |
TULSA, Okla. — Williams (NYSE: WMB) announced today it plans to increase the annual dividend on
its common stock by 25 percent, to $1.00 per share. The company also outlined a new dividend policy
that supports continued 10 to 15 percent annual dividend growth.
The dividend increase announced today is effective with Williams’ quarterly dividend of $0.25 per
share to be paid in December 2011. The new, $0.25 quarterly dividend is double what the company
paid in December 2010. Most recently, the company had paid a quarterly dividend of $0.20 per
share.
Williams’ new dividend policy supports continued high payouts. The company plans to pay out
substantially all of the distributions it receives from Williams Partners L.P. (NYSE:WPZ). Longer
term, the company expects its Midstream Canada & Olefins segment to contribute significantly to
dividend growth. In the near term, Williams plans to reinvest Midstream Canada & Olefins cash flows
in attractive growth projects.
Williams also is providing 2011-13 segment profit and capital expenditure guidance that reflects
the separation of the company’s exploration and production business. See the full chart below.
“The significant dividend increase and our new dividend policy underscore our active transformation
of Williams into a high-dividend, high-growth energy infrastructure company,” said Alan Armstrong,
president and chief executive officer.
“We remain committed to separating our exploration and production business. We are poised, when
market conditions are suitable, to move forward with an IPO. We plan to fully separate the business
with a tax-free spinoff to our shareholders not later than first-quarter 2012.
“Our large-scale midstream and gas pipeline assets are ideally situated in established and growing
supply areas and also in close proximity to key markets,” Armstrong said. “Through 2013, we expect
to invest more than $5 billion in growth projects. Across all parts of our businesses, we have good
visibility to significant, additional growth investments that are not yet included in our
guidance.”
Williams and Williams Partners are committed to maintaining investment-grade credit.
Armstrong will discuss the dividend increase, the company’s strategy and 2011-13 guidance in detail
during his presentation tomorrow at the 2011 Barclays Capital CEO Energy-Power Conference. A link
to the live webcast of his presentation, which is scheduled for approximately 11 a.m. EDT, is
available www.williams.com. The presentation will also be posted to the company’s website tomorrow
morning.
Williams’ assumptions for certain energy commodity prices for 2011-13 and the corresponding
guidance for the company’s earnings and capital expenditures are displayed in the following table.
These reflect the planned separation of the company’s exploration and production business.
Commodity Price Assumptions and Financial
Outlook (Assumes Separation of E&P for All
Periods Presented)
Outlook (Assumes Separation of E&P for All
Periods Presented)
| 2011 | 2012 | 2013 | ||||||||||||||||||||||||||||||||||
| As of Sept. 6, 2011 | Low | Mid | High | Low | Mid | High | Low | Mid | High | |||||||||||||||||||||||||||
Natural Gas ($/MMBtu): |
||||||||||||||||||||||||||||||||||||
NYMEX |
$ | 3.40 | $ | 4.25 | $ | 5.10 | $ | 4.00 | $ | 5.00 | $ | 6.00 | $ | 4.25 | $ | 5.30 | $ | 6.35 | ||||||||||||||||||
Rockies |
$ | 3.10 | $ | 3.85 | $ | 4.60 | $ | 3.65 | $ | 4.55 | $ | 5.45 | $ | 3.90 | $ | 4.85 | $ | 5.80 | ||||||||||||||||||
Avg. San Juan/Mid-Continent |
$ | 3.20 | $ | 4.00 | $ | 4.80 | $ | 3.70 | $ | 4.65 | $ | 5.60 | $ | 3.95 | $ | 4.95 | $ | 5.95 | ||||||||||||||||||
Oil / NGL: |
||||||||||||||||||||||||||||||||||||
Crude Oil -WTI ($ per barrel) |
$ | 80 | $ | 95 | $ | 110 | $ | 80 | $ | 95 | $ | 110 | $ | 80 | $ | 95 | $ | 110 | ||||||||||||||||||
Crude to Gas Ratio |
21.6 | x | 22.5 | x | 23.5 | x | 18.3 | x | 19.2 | x | 20.0 | x | 17.3 | x | 18.1 | x | 18.8 | x | ||||||||||||||||||
NGL to Crude Oil Relationship |
57 | % | 53 | % | 50 | % | 53 | % | 54 | % | 54 | % | 51 | % | 52 | % | 54 | % | ||||||||||||||||||
Average NGL margins ($ per gallon) (1) |
$ | 0.72 | $ | 0.78 | $ | 0.84 | $ | 0.59 | $ | 0.75 | $ | 0.90 | $ | 0.55 | $ | 0.72 | $ | 0.88 | ||||||||||||||||||
Composite frac spread ($ per gallon) (2) |
$ | 0.80 | $ | 0.85 | $ | 0.89 | $ | 0.68 | $ | 0.81 | $ | 0.92 | $ | 0.63 | $ | 0.74 | $ | 0.90 | ||||||||||||||||||
Capital & Investment Expenditures (millions) |
||||||||||||||||||||||||||||||||||||
Williams Partners |
||||||||||||||||||||||||||||||||||||
Midstream |
$ | 875 | $ | 1,000 | $ | 1,125 | $ | 900 | $ | 1,000 | $ | 1,100 | $ | 750 | $ | 900 | $ | 1,050 | ||||||||||||||||||
Gas Pipeline (3) |
535 | 573 | 610 | 580 | 630 | 680 | 600 | 650 | 700 | |||||||||||||||||||||||||||
Williams Partners -Total |
$ | 1,410 | $ | 1,573 | $ | 1,735 | $ | 1,480 | $ | 1,630 | $ | 1,780 | $ | 1,350 | $ | 1,550 | $ | 1,750 | ||||||||||||||||||
Midstream Canada & Olefins |
350 | 400 | 450 | 400 | 450 | 500 | 500 | 600 | 700 | |||||||||||||||||||||||||||
Total Capital & Investment Expenditures (4) |
$ | 1,825 | $ | 2,025 | $ | 2,225 | $ | 1,900 | $ | 2,100 | $ | 2,300 | $ | 1,875 | $ | 2,175 | $ | 2,475 | ||||||||||||||||||
Adjusted Segment Profit (millions) (5) |
||||||||||||||||||||||||||||||||||||
Williams Partners |
||||||||||||||||||||||||||||||||||||
Midstream |
$ | 1,075 | $ | 1,200 | $ | 1,325 | $ | 1,000 | $ | 1,250 | $ | 1,500 | $ | 1,025 | $ | 1,325 | $ | 1,625 | ||||||||||||||||||
Gas Pipeline |
670 | 690 | 710 | 680 | 700 | 720 | 700 | 725 | 750 | |||||||||||||||||||||||||||
Williams Partners -Total |
$ | 1,745 | $ | 1,890 | $ | 2,035 | $ | 1,680 | $ | 1,950 | $ | 2,220 | $ | 1,725 | $ | 2,050 | $ | 2,375 | ||||||||||||||||||
Midstream Canada & Olefins |
250 | 300 | 350 | 275 | 325 | 375 | 275 | 350 | 425 | |||||||||||||||||||||||||||
Total Adjusted Segment Profit (4) |
$ | 2,005 | $ | 2,193 | $ | 2,380 | $ | 1,950 | $ | 2,275 | $ | 2,600 | $ | 2,000 | $ | 2,400 | $ | 2,800 | ||||||||||||||||||
Adjusted Segment Profit + DD&A (millions) |
||||||||||||||||||||||||||||||||||||
Williams Partners |
||||||||||||||||||||||||||||||||||||
Midstream |
$ | 1,335 | $ | 1,470 | $ | 1,605 | $ | 1,275 | $ | 1,535 | $ | 1,795 | $ | 1,315 | $ | 1,625 | $ | 1,935 | ||||||||||||||||||
Gas Pipeline |
1,020 | 1,050 | 1,080 | 1,040 | 1,070 | 1,100 | 1,070 | 1,105 | 1,140 | |||||||||||||||||||||||||||
Williams Partners -Total |
$ | 2,355 | $ | 2,520 | $ | 2,685 | $ | 2,315 | $ | 2,605 | $ | 2,895 | $ | 2,385 | $ | 2,730 | $ | 3,075 | ||||||||||||||||||
Midstream Canada & Olefins |
270 | 325 | 380 | 305 | 360 | 415 | 315 | 395 | 475 | |||||||||||||||||||||||||||
Total Adjusted Segment Profit + DD&A (4) |
$ | 2,670 | $ | 2,870 | $ | 3,070 | $ | 2,625 | $ | 2,975 | $ | 3,325 | $ | 2,725 | $ | 3,150 | $ | 3,575 | ||||||||||||||||||
| (1) | Average NGL margins are for Williams Partners only. Excludes Midstream Canada & Olefins. | |
| (2) | Composite frac spread is based on Henry Hub natural gas and Mont Belvieu NGLs. | |
| (3) | Capital expenditures for 2011 exclude $330 million for Williams Partners’ acquisition of a 24.5% interest in Gulfstream system from Williams. | |
| (4) | The sum of the ranges for each business line may not match total range; does not include the Other segment. | |
| (5) | Adjusted Segment Profit is adjusted to remove items considered unrepresentative of ongoing operations and is a non-GAAP measure. A reconciliation to the most relevant GAAP measure is attached to this news release. |
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 company’s 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 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 management’s 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 regulation 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. 24, 2011, and our quarterly reports on Form 10-Q available
from our offices or from our website at www.williams.com.
Segment profit guidance – reported to adjusted
| 2011 Guidance | 2012 Guidance | 2013 Guidance | ||||||||||||||||||||||||||||||||||
| PRE E&P SPIN | POST E&P SPIN DOES NOT INCLUDE EXPLORATION & PROD. | |||||||||||||||||||||||||||||||||||
| Dollars in millions | Low | Midpoint | High | Low | Midpoint | High | Low | Midpoint | High | |||||||||||||||||||||||||||
Reported segment profit: |
||||||||||||||||||||||||||||||||||||
Williams Partners (WPZ) |
$ | 1,742 | $ | 1,887 | $ | 2,032 | $ | 1,680 | $ | 1,950 | $ | 2,220 | $ | 1,725 | $ | 2,050 | $ | 2,375 | ||||||||||||||||||
Exploration & Production |
250 | 375 | 500 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Midstream Canada & Olefins |
250 | 300 | 350 | 275 | 325 | 375 | 275 | 350 | 425 | |||||||||||||||||||||||||||
Other |
21 | 14 | 6 | (5 | ) | — | 5 | — | — | — | ||||||||||||||||||||||||||
Total Reported segment profit |
2,263 | 2,576 | 2,888 | 1,950 | 2,275 | 2,600 | 2,000 | 2,400 | 2,800 | |||||||||||||||||||||||||||
Adjustments: |
||||||||||||||||||||||||||||||||||||
Gain on sale of base gas from Hester storage field |
(4 | ) | (4 | ) | (4 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||
Loss related to Eminence storage facility leak |
7 | 7 | 7 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total Williams Partners (Gas Pipeline) Adjustments |
3 | 3 | 3 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Mark-to-Market adjustment |
20 | 20 | 20 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total Exploration & Production Adjustments |
20 | 20 | 20 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Gain from Venezuela investment |
(11 | ) | (11 | ) | (11 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||
Total “Other” Adjustments |
(11 | ) | (11 | ) | (11 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||
Total Adjustments |
12 | 12 | 12 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Adjusted segment profit: |
||||||||||||||||||||||||||||||||||||
Williams Partners (WPZ) |
1,745 | 1,890 | 2,035 | 1,680 | 1,950 | 2,220 | 1,725 | 2,050 | 2,375 | |||||||||||||||||||||||||||
Exploration & Production |
270 | 395 | 520 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Midstream Canada & Olefins |
250 | 300 | 350 | 275 | 325 | 375 | 275 | 350 | 425 | |||||||||||||||||||||||||||
Other |
10 | 3 | (5 | ) | (5 | ) | — | 5 | — | — | — | |||||||||||||||||||||||||
Total Adjusted segment profit |
$ | 2,275 | $ | 2,588 | $ | 2,900 | $ | 1,950 | $ | 2,275 | $ | 2,600 | $ | 2,000 | $ | 2,400 | $ | 2,800 | ||||||||||||||||||