Attached files
file | filename |
---|---|
8-K - FORM 8-K - Williams Partners L.P. | d304893d8k.htm |
Exhibit 99.1
News Release | Williams Partners L.P. (NYSE: WPZ) | |||||||
One Williams Center | ||||||||
Tulsa, OK 74172 | ||||||||
800-600-3782 | ||||||||
www.williamslp.com |
DATE: Feb. 22, 2012 | ||||||||
MEDIA CONTACT: | INVESTOR CONTACTS: | |||||||
Jeff Pounds | Travis Campbell | Sharna Reingold | ||||||
(918) 573-3332 | (918) 573-2944 | (918) 573-2078 |
Williams Partners Reports Year-End 2011 Financial Results
| Full-year Net Income is $1.38 Billion, Up 25% Over 2010 |
| Increase in Fee-Based Businesses, Higher NGL Margins Drive Strong 2011 Results |
| Distributable Cash Flow Tops $1.6 Billion for 2011, Up 42% Over 2010 |
| Newly Announced Constitution Pipeline, Laser Acquisition Part of 3 Bcf/d Natural Gas Supply Hub in Northeast Pennsylvania |
| Laser Acquisition Drives Increase in 2012-13 Guidance |
Summary Financial Information | Full Year | 4Q | ||||||||||||||
Amounts in millions, except per-unit amounts. | 2011 | 2010 | 2011 | 2010 | ||||||||||||
(Unaudited) | ||||||||||||||||
Net income |
$ | 1,378 | $ | 1,101 | $ | 391 | $ | 286 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income per common L.P. unit |
$ | 3.69 | $ | 2.66 | $ | 1.05 | $ | 0.76 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Distributable cash flow (DCF) (1) |
$ | 1,650 | $ | 1,387 | $ | 444 | $ | 347 | ||||||||
Less: Pre-partnership DCF (2) |
| (223 | ) | | (12 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
DCF attributable to partnership operations |
$ | 1,650 | $ | 1,164 | $ | 444 | $ | 335 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash distribution coverage ratio (1) |
1.41x | 1.30x | 1.43x | 1.25x | ||||||||||||
|
|
|
|
|
|
|
|
(1) | Distributable Cash Flow and Cash Distribution Coverage Ratio are non-GAAP measures. Reconciliations to the most relevant measures included in GAAP are attached to this news release. |
(2) | For 2010, this amount represents DCF for January 2010 from the assets acquired in February 2010 and DCF for January-October 2010 from the assets acquired in November 2010, since these periods were prior to the receipt of cash flows from the acquired assets. |
TULSA, Okla. Williams Partners L.P. (NYSE: WPZ) today announced unaudited 2011 net income of $1.38 billion, or $3.69 per common limited-partner unit, compared with 2010 net income of $1.10 billion, or $2.66 per common unit.
Williams Partners L.P. (NYSE: WPZ) | Year-End 2011 Financial Results Feb. 22, 2012 | Page 1 of 10 |
For fourth-quarter 2011, Williams Partners reported net income of $391 million, or $1.05 per common unit, compared with net income of $286 million, or $0.76 per common unit for the same period in 2010.
The increases in net income for the full-year and fourth-quarter 2011 periods are primarily due to higher natural gas liquid (NGL) margins in the midstream business and increased fee-based revenues in the midstream and gas pipeline businesses. There is a more detailed discussion of the midstream and gas pipeline results in the business segment performance section below.
Strong Results, Asset Acquisitions Drive 42-percent Increase in DCF for 2011
For 2011, Williams Partners distributable cash flow attributable to partnership operations was $1.65 billion, compared with $1.16 billion for 2010. The 42-percent increase in DCF attributable to partnership operations in 2011 was due to the previously noted strong results in the midstream business, as well as the growth of the partnership via asset acquisitions in the second half of 2010.
Susquehanna Supply Hub
Williams Partners recently announced the new Constitution Pipeline joint venture and the completion of the Laser Northeast Gathering System acquisition. These two milestones are the latest steps in Williams Partners strategy to create the Susquehanna Supply Hub, a major natural gas supply hub in northeastern Pennsylvania.
By 2015, Williams Partners expects the Susquehanna Supply Hub to be capable of gathering and delivering more than 3 billion cubic feet per day (Bcf/d) of Marcellus Shale production into four major interstate gas pipeline systems.
CEO Perspective
Alan Armstrong, chief executive officer of Williams Partners general partner, made the following comments:
The partnership performed exceptionally well in 2011, with distributable cash flow up more than 40 percent over 2010. Both our cash distribution growth and coverage ratio also remain strong.
We have a number of considerable growth projects under way in all of our major areas of focus.
The newly announced Constitution Pipeline and the recently closed Laser acquisition are the latest pieces of the 3 Bcf/d Susquehanna Supply Hub were building in northeast Pennsylvania.
Williams Partners L.P. (NYSE: WPZ) | Year-End 2011 Financial Results Feb. 22, 2012 | Page 2 of 10 |
We also have two major projects underway in the deepwater Gulf of Mexico and a significant volume of gas pipeline projects that will help meet the infrastructure demands for new gas-fired power generation.
All of these projects are in-line with our strategy of building large-scale infrastructure to meet the growing demand for reliable and efficient fee-based services in the midstream and gas pipeline businesses.
Laser Acquisition Drives Increase in 2012-13 Guidance
Williams Partners is increasing its 2012-13 adjusted segment profit and capital expenditure guidance to reflect the partnerships acquisition of the Laser Northeast Gathering System. The Laser system is expected to grow significantly from its current volume of approximately 100 MMcf/d to approximately 1.3 Bcf/d by 2015. Williams Partners is also updating 2012-13 capital expenditure guidance to reflect the inclusion of the Constitution Pipeline.
Williams Partners updated assumptions for certain energy commodity prices for 2012-13 and the corresponding guidance for the partnerships earnings and capital expenditures are displayed in the following table.
Williams Partners L.P. (NYSE: WPZ) | Year-End 2011 Financial Results Feb. 22, 2012 | Page 3 of 10 |
Commodity Price Assumptions and Average NGL Margins |
2012 | 2013 | ||||||||||||||||||||||||
As of Feb. 22, 2012 |
||||||||||||||||||||||||||
Low | Mid | High | Low | Mid | High | |||||||||||||||||||||
Natural Gas ($/MMBtu): |
||||||||||||||||||||||||||
NYMEX |
$ | 2.50 | $ | 3.00 | $ | 3.50 | $ | 3.25 | $ | 3.75 | $ | 4.25 | ||||||||||||||
Rockies |
$ | 2.30 | $ | 2.80 | $ | 3.30 | $ | 3.05 | $ | 3.55 | $ | 4.05 | ||||||||||||||
San Juan |
$ | 2.40 | $ | 2.90 | $ | 3.40 | $ | 3.05 | $ | 3.55 | $ | 4.05 | ||||||||||||||
Oil / NGL: |
||||||||||||||||||||||||||
Crude Oil - WTI ($ per barrel) |
$ | 90 | $ | 100 | $ | 110 | $ | 90 | $ | 100 | $ | 110 | ||||||||||||||
Crude to Gas Ratio |
31.4x | 33.7x | 36.0x | 25.9x | 26.8x | 27.7x | ||||||||||||||||||||
NGL to Crude Oil Relationship (1) |
43 | % | 45 | % | 47 | % | 43 | % | 45 | % | 47 | % | ||||||||||||||
Average NGL Margins ($ per gallon) |
$ | 0.65 | $ | 0.78 | $ | 0.90 | $ | 0.58 | $ | 0.70 | $ | 0.81 | ||||||||||||||
Composite Frac Spread ($ per gallon) (2) |
$ | 0.72 | $ | 0.83 | $ | 0.94 | $ | 0.65 | $ | 0.77 | $ | 0.88 | ||||||||||||||
Williams Partners Guidance | ||||||||||||||||||||||||||
Amounts are in millions except coverage ratio. |
||||||||||||||||||||||||||
Low | Mid | High | Low | Mid | High | |||||||||||||||||||||
DCF attributable to partnership ops. (3) |
$ | 1,410 | $ | 1,635 | $ | 1,860 | $ | 1,630 | $ | 1,880 | $ | 2,130 | ||||||||||||||
Total Cash Distribution (4) |
$ | 1,344 | $ | 1,375 | $ | 1,406 | $ | 1,486 | $ | 1,567 | $ | 1,648 | ||||||||||||||
Cash Distribution Coverage Ratio (3) |
1.05x | 1.19x | 1.32x | 1.10x | 1.20x | 1.29x | ||||||||||||||||||||
Adjusted Segment Profit (3): |
||||||||||||||||||||||||||
Gas Pipeline |
$ | 680 | $ | 700 | $ | 720 | $ | 700 | $ | 725 | $ | 750 | ||||||||||||||
Midstream |
1,050 | 1,275 | 1,500 | 1,150 | 1,375 | 1,600 | ||||||||||||||||||||
Total Adjusted Segment Profit |
$ | 1,730 | $ | 1,975 | $ | 2,220 | $ | 1,850 | $ | 2,100 | $ | 2,350 | ||||||||||||||
Adjusted Segment Profit + DD&A: |
||||||||||||||||||||||||||
Gas Pipeline |
$ | 1,040 | $ | 1,070 | $ | 1,100 | $ | 1,070 | $ | 1,105 | $ | 1,140 | ||||||||||||||
Midstream |
1,340 | 1,575 | 1,810 | 1,460 | 1,695 | 1,930 | ||||||||||||||||||||
Total Adjusted Segment Profit + DD&A |
$ | 2,380 | $ | 2,645 | $ | 2,910 | $ | 2,530 | $ | 2,800 | $ | 3,070 | ||||||||||||||
Capital Expenditures: |
||||||||||||||||||||||||||
Maintenance |
$ | 445 | $ | 480 | $ | 515 | $ | 350 | $ | 385 | $ | 420 | ||||||||||||||
Growth |
2,305 | 2,420 | 2,535 | 1,225 | 1,390 | 1,555 | ||||||||||||||||||||
Total Capital Expenditures |
$ | 2,750 | $ | 2,900 | $ | 3,050 | $ | 1,575 | $ | 1,775 | $ | 1,975 |
(1) | This is calculated as the price of natural gas liquids as a percentage of the price of crude oil on an equal volume basis. |
(2) | Composite frac spread is based on Henry Hub natural gas and Mont Belvieu NGLs. |
(3) | Distributable Cash Flow, Cash Distribution Coverage Ratio and Adjusted Segment Profit are non-GAAP measures. Reconciliations to the most relevant measures included in GAAP are attached to this news release. |
(4) | The cash distributions in guidance are on an accural basis and reflect an approximate 6% (low), 8% (midpoint), and 10% (high) increase in quarterly limited partner cash distributions annually through 2013. |
Williams Partners L.P. (NYSE: WPZ) | Year-End 2011 Financial Results Feb. 22, 2012 | Page 4 of 10 |
Business Segment Performance
Williams Partners operations are reported through two business segments, Gas Pipeline and Midstream Gas & Liquids.
Consolidated Segment Profit | Full Year | 4Q | ||||||||||||||
Amounts in millions | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Gas Pipeline |
$ | 673 | $ | 637 | $ | 176 | $ | 159 | ||||||||
Midstream Gas & Liquids |
1,223 | 937 | 341 | 259 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Segment Profit |
$ | 1,896 | $ | 1,574 | $ | 517 | $ | 418 | ||||||||
Adjustments |
11 | (32 | ) | 2 | 8 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted Segment Profit* |
$ | 1,907 | $ | 1,542 | $ | 519 | $ | 426 | ||||||||
|
|
|
|
|
|
|
|
* | A schedule reconciling segment profit to adjusted segment profit is attached to this press release. |
Gas Pipeline
Williams Partners owns interests in three major interstate natural gas pipeline systems Transco, Northwest Pipeline and Gulfstream. These systems have a combined peak day delivery capacity of more than 14 billion cubic feet per day (Bcf/d), and transport approximately 14 percent of the natural gas consumed in the United States.
Gas Pipeline reported segment profit of $673 million for 2011, compared with $637 million for 2010. For fourth quarter 2011, Gas Pipeline reported segment profit of $176 million, compared with $159 million for fourth quarter 2010.
Higher transportation revenues associated with expansion projects placed into service in 2010 and 2011 drove the improved results in full-year and fourth-quarter periods. Higher operating and depletion, depreciation and amortization expenses partially offset the higher transportation revenues.
Williams Partners is working on four expansion projects that it expects to be placed into service in 2012.
The Mid-South Expansion Project involves an expansion of the Transco mainline from Station 85 in Choctaw County, Ala., to markets as far downstream as North Carolina. The first phase of the project is expected to be placed into service in the third quarter of this year with a second stage placed into service in 2013. When complete, it will increase capacity by 225 Mdth/d.
Williams Partners L.P. (NYSE: WPZ) | Year-End 2011 Financial Results Feb. 22, 2012 | Page 5 of 10 |
The Mid-Atlantic Connector Project involves an expansion of the Transco mainline from an existing interconnection with East Tennessee Natural Gas in North Carolina to markets as far downstream as Maryland. It is expected to be placed into service in the fourth quarter, and it will increase capacity by 142 Mdth/d.
The Cardinal System Expansion project involves an expansion of the Cardinal Pipeline which is an intrastate pipeline located in North Carolina. The expansion will add 199 Mdth/d of capacity and is expected to be placed into service in the second quarter. Williams Partners has a 45 percent ownership interest in this asset.
The partnership is also working on the North Seattle Lateral Delivery Expansion on Northwest Pipeline, which will be placed into service later this year. Williams Partners has executed agreements with a customer for the project to provide additional lateral capacity of approximately 84 Mdth/d.
Midstream Gas & Liquids
Midstream provides natural gas gathering, treating, and processing; deepwater production handling and oil transportation; and NGL fractionation, storage and transportation services.
The business reported segment profit of $1.22 billion for 2011, compared with segment profit of $937 million for 2010. For fourth quarter 2011, Midstream reported segment profit of $341 million, compared with $259 million for the same period in 2010.
Higher NGL margins and fee-based revenues drove the improvement in both the full-year and fourth-quarter periods. Higher operating expenses, including depreciation, partially offset the higher NGL margins and fee-based revenues in both periods. Higher NGL prices were the driver of the increased NGL margins in both periods.
Midstreams fee-based revenues increased by 12 percent in 2011. This improvement was driven by new gathering business in the Marcellus Shale, increased throughput on the Perdido Norte gas and oil pipelines in the Gulf of Mexico and a rate increase in the Piceance Basin associated with an agreement executed in November 2010.
Williams Partners L.P. (NYSE: WPZ) | Year-End 2011 Financial Results Feb. 22, 2012 | Page 6 of 10 |
NGL Margin Trend | 2010 | 2011 | ||||||||||||||||||||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | |||||||||||||||||||||||||
NGL margins (millions) |
$ | 193 | $ | 166 | $ | 136 | $ | 200 | $ | 207 | $ | 253 | $ | 234 | $ | 287 | ||||||||||||||||
NGL equity volumes (gallons in millions) |
332 | 302 | 271 | 317 | 289 | 308 | 274 | 317 | ||||||||||||||||||||||||
Per-unit NGL margins ($/gallon) |
$ | 0.58 | $ | 0.55 | $ | 0.50 | $ | 0.63 | $ | 0.71 | $ | 0.83 | $ | 0.85 | $ | 0.91 |
Full-year per-unit NGL margins for 2011 were $0.83 per gallon, an increase of 46 percent over the full-year 2010 amount of $0.57 per gallon.
In addition to the previously discussed Susquehanna Supply Hub, the midstream business will continue work on several ongoing expansion projects in 2012 and beyond in all of its major locations.
Williams Partners has two major deepwater Gulf of Mexico projects under way. Construction has commenced on the Gulfstar FPSTM, a spar-based floating production system with a capacity of 60,000 barrels of oil per day, up to 200 MMcf/d of natural gas and the capability to provide seawater injection services. Williams Partners has signed multiple agreements with Hess Corporation (NYSE: HES) and Chevron (NYSE: CVX) to utilize Gufstar FPS for production handling, export pipeline, oil and gas gathering and gas processing services in the Tubular Bells field development located in the eastern deepwater Gulf of Mexico. The project is expected to be in service in 2014.
Discovery, of which Williams Partners owns 60 percent, plans to construct the Keathley Canyon Connector, a 20-inch diameter, 215-mile subsea natural gas gathering pipeline for production from the Keathley Canyon, Walker Ridge and Green Canyon areas in the central deepwater Gulf of Mexico. Discovery has signed long-term agreements with the Lucius and Hadrian South owners for natural gas gathering and processing services for production from those fields.
Definitions of Non-GAAP Financial Measures
This press release includes certain financial measures Distributable Cash Flow, Cash Distribution Coverage Ratio, and Adjusted Segment Profit that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission.
For Williams Partners L.P., Adjusted Segment Profit excludes items of income or loss that we characterize as unrepresentative of our ongoing operations. Management believes Adjusted Segment Profit provides investors meaningful insight into Williams Partners L.P.s results from ongoing operations.
Williams Partners L.P. (NYSE: WPZ) | Year-End 2011 Financial Results Feb. 22, 2012 | Page 7 of 10 |
For Williams Partners L.P. we define Distributable Cash Flow as net income plus depreciation and amortization and cash distributions from our equity investments less our earnings from our equity investments, distributions to noncontrolling interests and maintenance capital expenditures. We also adjust for payments and/or reimbursements under omnibus agreements with Williams and certain other items. Total Distributable Cash Flow is reduced by any amounts associated with operations, which occurred prior to our ownership of the underlying assets to arrive at Distributable Cash Flow attributable to partnership operations.
For Williams Partners L.P. we also calculate the ratio of Distributable Cash Flow attributable to partnership operations to the total cash distributed (Cash Distribution Coverage Ratio). This measure reflects the amount of Distributable Cash Flow relative to our cash distribution. We have also provided this ratio calculated using the most directly comparable GAAP measure, net income.
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 accepted financial indicators used by investors to compare company performance. In addition, management believes that these measures provide investors an enhanced perspective of the operating performance of the Partnerships assets and the cash that the business is generating. Neither Adjusted Segment Profit nor Distributable Cash Flow are intended to represent cash flows for the period, nor are they presented as an alternative to net income or cash flow from operations. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles.
Year-end Materials to be Posted Shortly, Q&A Webcast Scheduled for Tomorrow
Williams Partners year-end financial results package should be posted shortly at www.williamslp.com. The package will include the data book and analyst package, and the investor presentation with a recorded commentary from Alan Armstrong, CEO of Williams Partners general partner.
The partnership will host the year-end Q&A live webcast on Thursday, Feb. 23 at 11 a.m. EST. A limited number of phone lines will be available at (888) 481-2849. International callers should dial (719) 325-2268.
A link to the live webcast, as well as replays of the year-end webcast in both streaming and downloadable podcast formats following the event, will be available at www.williamslp.com.
Williams Partners L.P. (NYSE: WPZ) | Year-End 2011 Financial Results Feb. 22, 2012 | Page 8 of 10 |
Form 10-K
The partnership plans to file its 2011 Form 10-K with the Securities and Exchange Commission (SEC) next week. The document will be available on both the SEC and Williams Partners web sites.
About Williams Partners L.P. (NYSE: WPZ)
Williams Partners L.P. is a leading diversified master limited partnership focused on natural gas transportation; gathering, treating, and processing; storage; natural gas liquid (NGL) fractionation; and oil transportation. The partnership owns interests in three major interstate natural gas pipelines that, combined, deliver 14 percent of the natural gas consumed in the United States. The partnerships gathering and processing assets include large-scale operations in the U.S. Rocky Mountains and both onshore and offshore along the Gulf of Mexico. Williams (NYSE: WMB) owns approximately 72 percent of Williams Partners, including the general-partner interest. More information is available at www.williamslp.com. Go to http://www.b2i.us/irpass.asp?BzID=1296&to=ea&s=0 or http://www.b2i.us/irpass.asp?BzID=630&to=ea&s=0 to join our email list.
# # #
Williams Partners L.P. is a limited partnership formed by The Williams Companies, Inc. (Williams). 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. 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; |
| Cash flow from operations or results of operations; |
| The levels of cash distributions to unitholders; |
| Seasonality of certain business components; 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:
| Whether we have sufficient cash from operations to enable us to maintain current levels of cash distributions or to pay cash distributions following establishment of cash reserves and payment of fees and expenses, including payments to our general partner; |
| Availability of supplies, market demand, volatility of prices, and the availability and cost of capital; |
| Inflation, interest rates 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; |
| Ability to acquire new businesses and assets and integrate those operations and assets into our existing businesses, as well as expand our facilities; |
| Development of alternative energy sources; |
| The impact of operational and development hazards; |
Williams Partners L.P. (NYSE: WPZ) | Year-End 2011 Financial Results Feb. 22, 2012 | Page 9 of 10 |
| Costs of, changes in, or the results of laws, government regulations (including safety and climate change regulation and changes in natural gas production from exploration and production areas that we serve), environmental liabilities, litigation and rate proceedings; |
| Our allocated costs for defined benefit pension plans and other postretirement benefit plans sponsored by our affiliates; |
| Changes in maintenance and construction costs; |
| Changes in the current geopolitical situation; |
| Our exposure to the credit risk of our customers and counterparties; |
| Risks related to 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, including cybersecurity threats and related disruptions; 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.
Limited partner interests are inherently different from the capital stock of a corporation, although many of the business risks to which we are subject are similar to those that would be faced by a corporation engaged in a similar business. Investors are urged to closely consider the disclosures and risk factors in our annual report on Form 10-K filed with the SEC on February 24, 2011, and our quarterly reports on Form 10-Q available from our offices or from our website at www.williamslp.com.
Williams Partners L.P. (NYSE: WPZ) | Year-End 2011 Financial Results Feb. 22, 2012 | Page 10 of 10 |
Financial Highlights and Operating Statistics
(UNAUDITED)
Final
December 31, 2011
Reconciliation of Non-GAAP Measures
(UNAUDITED)
This press release includes certain financial measures, Adjusted Segment Profit and Distributable Cash Flow that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission.
For Williams Partners L.P., Adjusted Segment Profit excludes items of income or loss that we characterize as unrepresentative of our ongoing operations. Management believes Adjusted Segment Profit provides investors meaningful insight into Williams Partners L.P.s results from ongoing operations.
For Williams Partners L.P. we define Distributable Cash Flow as net income plus depreciation and amortization and cash distributions from our equity investments less our earnings from equity investments, distributions to noncontrolling interests and maintenance capital expenditures. We also adjust for payments and/or reimbursements under omnibus agreements with Williams and certain non-cash adjustments. Total Distributable Cash Flow is reduced by any amounts associated with operations, which occurred prior to our ownership of the underlying assets to arrive at Distributable Cash Flow attributable to partnership operations.
For Williams Partners L.P. we also calculate the ratio of Distributable Cash Flow attributable to partnership operations to the total cash distributed (cash distribution coverage ratio). This measure reflects the amount of Distributable Cash Flow relative to our cash distribution. We have also provided this ratio calculated using the most directly comparable GAAP measure, net income.
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 accepted financial indicators used by investors to compare company performance. In addition, management believes that these measures provide investors an enhanced perspective of the operating performance of the Partnerships assets and the cash that the business is generating. Neither Adjusted Segment Profit nor Distributable Cash Flow are intended to represent cash flows for the period, nor are they presented as an alternative to net income or cash flow from operations. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles.
2010 | 2011 | |||||||||||||||||||||||||||||||||||||||
(Dollars in millions, except coverage ratios) |
1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | ||||||||||||||||||||||||||||||
Williams Partners L.P. |
||||||||||||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Distributable Cash Flow to GAAP Net income |
||||||||||||||||||||||||||||||||||||||||
Net income |
$ | 322 | $ | 240 | $ | 253 | $ | 286 | $ | 1,101 | $ | 307 | $ | 338 | $ | 342 | $ | 391 | $ | 1,378 | ||||||||||||||||||||
Depreciation and amortization |
140 | 140 | 140 | 148 | 568 | 150 | 154 | 155 | 152 | 611 | ||||||||||||||||||||||||||||||
Non-cash amortization of debt issuance costs included in interest expense |
4 | 5 | 5 | 5 | 19 | 5 | 5 | 3 | 4 | 17 | ||||||||||||||||||||||||||||||
Equity earnings from investments |
(26 | ) | (27 | ) | (24 | ) | (32 | ) | (109 | ) | (25 | ) | (36 | ) | (40 | ) | (41 | ) | (142 | ) | ||||||||||||||||||||
Distributions to noncontrolling interests |
(6 | ) | (6 | ) | (6 | ) | | (18 | ) | | | | | | ||||||||||||||||||||||||||
Involuntary conversion gain resulting from Ignacio fire |
| (4 | ) | | | (4 | ) | | | | | | ||||||||||||||||||||||||||||
Involuntary conversion gain resulting from Hurricane Ike |
| (7 | ) | (7 | ) | | (14 | ) | | | | | | |||||||||||||||||||||||||||
Impairment of certain gathering assets |
| | | 9 | 9 | | | | | | ||||||||||||||||||||||||||||||
Reimbursements (payments) from/(to) Williams under omnibus agreement |
| (1 | ) | 1 | 3 | 3 | 8 | 2 | 6 | 15 | 31 | |||||||||||||||||||||||||||||
Maintenance capital expenditures |
(32 | ) | (46 | ) | (119 | ) | (104 | ) | (301 | ) | (34 | ) | (106 | ) | (148 | ) | (126 | ) | (414 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Distributable Cash Flow excluding equity investments |
402 | 294 | 243 | 315 | 1,254 | 411 | 357 | 318 | 395 | 1,481 | ||||||||||||||||||||||||||||||
Plus: Equity investments cash distributions to Williams Partners L.P. |
29 | 43 | 29 | 32 | 133 | 30 | 40 | 50 | 49 | 169 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Distributable Cash Flow |
431 | 337 | 272 | 347 | 1,387 | 441 | 397 | 368 | 444 | 1,650 | ||||||||||||||||||||||||||||||
Less: Pre-partnership Distributable Cash Flow |
158 | 21 | 32 | 12 | 223 | | | | | | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Distributable Cash Flow attributable to partnership operations |
$ | 273 | $ | 316 | $ | 240 | $ | 335 | $ | 1,164 | $ | 441 | $ | 397 | $ | 368 | $ | 444 | $ | 1,650 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total cash distributed: |
$ | 155 | $ | 221 | $ | 250 | $ | 268 | $ | 894 | $ | 276 | $ | 286 | $ | 294 | $ | 311 | $ | 1,167 | ||||||||||||||||||||
Coverage ratios: |
||||||||||||||||||||||||||||||||||||||||
Distributable Cash Flow attributable to partnership operations divided by Total cash distributed |
1.76 | 1.43 | 0.96 | 1.25 | 1.30 | 1.60 | 1.39 | 1.25 | 1.43 | 1.41 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net income divided by Total cash distributed |
2.08 | 1.09 | 1.01 | 1.07 | 1.23 | 1.11 | 1.18 | 1.16 | 1.26 | 1.18 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Reconciliation of GAAP Segment Profit to Non-GAAP Adjusted Segment Profit
(UNAUDITED)
2010 | 2011 | |||||||||||||||||||||||||||||||||||||||
(Dollars in millions) |
1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | ||||||||||||||||||||||||||||||
Gas Pipeline |
$ | 169 | $ | 148 | $ | 161 | $ | 159 | $ | 637 | $ | 175 | $ | 152 | $ | 170 | $ | 176 | $ | 673 | ||||||||||||||||||||
Midstream Gas & Liquids |
255 | 213 | 210 | 259 | 937 | 262 | 319 | 301 | 341 | 1,223 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Segment Profit |
$ | 424 | $ | 361 | $ | 371 | $ | 418 | $ | 1,574 | $ | 437 | $ | 471 | $ | 471 | $ | 517 | $ | 1,896 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Adjustments: |
||||||||||||||||||||||||||||||||||||||||
Gas Pipeline |
||||||||||||||||||||||||||||||||||||||||
Unclaimed property assessment accrual adjustment |
| (2 | ) | | | (2 | ) | | | | | | ||||||||||||||||||||||||||||
Loss related to Eminence storage facility leak |
| | | 5 | 5 | 4 | 3 | 6 | 2 | 15 | ||||||||||||||||||||||||||||||
Gain on sale of base gas from Hester storage field |
(5 | ) | (3 | ) | | | (8 | ) | (4 | ) | | | | (4 | ) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total Gas Pipeline adjustments |
(5 | ) | (5 | ) | | 5 | (5 | ) | | 3 | 6 | 2 | 11 | |||||||||||||||||||||||||||
Midstream Gas & Liquids |
||||||||||||||||||||||||||||||||||||||||
Involuntary conversion gain related to Ignacio |
| (4 | ) | | | (4 | ) | | | | | | ||||||||||||||||||||||||||||
Involuntary conversion gain related to Hurricane Ike |
| (7 | ) | (7 | ) | | (14 | ) | | | | | | |||||||||||||||||||||||||||
Gain on sale of certain assets |
| | (12 | ) | | (12 | ) | | | | | | ||||||||||||||||||||||||||||
Impairment of certain gathering assets |
| | | 9 | 9 | | | | | | ||||||||||||||||||||||||||||||
Settlement gain related to Green Canyon development |
| | | (6 | ) | (6 | ) | | | | | | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total Midstream Gas & Liquids adjustments |
| (11 | ) | (19 | ) | 3 | (27 | ) | | | | | | |||||||||||||||||||||||||||
Total adjustments included in segment profit |
(5 | ) | (16 | ) | (19 | ) | 8 | (32 | ) | | 3 | 6 | 2 | 11 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Adjusted segment profit |
$ | 419 | $ | 345 | $ | 352 | $ | 426 | $ | 1,542 | $ | 437 | $ | 474 | $ | 477 | $ | 519 | $ | 1,907 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
Williams Partners L.P.
(UNAUDITED)
2012 Guidance | 2013 Guidance | |||||||||||||||||||||||
(Dollars in millions, except coverage ratios) |
Low | Midpoint | High | Low | Midpoint | High | ||||||||||||||||||
Reconciliation of Non-GAAP Distributable Cash Flow attributable to partnership operations to GAAP Net income |
||||||||||||||||||||||||
Net income |
$ | 1,160 | $ | 1,400 | $ | 1,640 | $ | 1,260 | $ | 1,523 | $ | 1,785 | ||||||||||||
Depreciation and amortization |
650 | 670 | 690 | 680 | 700 | 720 | ||||||||||||||||||
Other |
45 | 45 | 45 | 40 | 43 | 45 | ||||||||||||||||||
Maintenance capital expenditures |
(445 | ) | (480 | ) | (515 | ) | (350 | ) | (385 | ) | (420 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Distributable cash flow attributable to partnership operations |
$ | 1,410 | $ | 1,635 | $ | 1,860 | $ | 1,630 | $ | 1,880 | $ | 2,130 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total cash to be distributed * |
$ | 1,344 | $ | 1,375 | $ | 1,406 | $ | 1,486 | $ | 1,567 | $ | 1,648 | ||||||||||||
Coverage ratios: |
||||||||||||||||||||||||
Distributable cash flow attributable to partnership operations divided by Total cash to be distributed * |
1.05 | 1.19 | 1.32 | 1.10 | 1.20 | 1.29 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income divided by Total cash to be distributed * |
0.86 | 1.02 | 1.17 | 0.85 | 0.97 | 1.08 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
* Distributions reflect growth rates of 6-10%. |
||||||||||||||||||||||||
Reconciliation of Non-GAAP Adjusted Segment Profit to GAAP Segment Profit |
||||||||||||||||||||||||
Segment Profit: |
||||||||||||||||||||||||
Midstream |
$ | 1,050 | $ | 1,275 | $ | 1,500 | $ | 1,150 | $ | 1,375 | $ | 1,600 | ||||||||||||
Gas Pipeline |
680 | 700 | 720 | 700 | 725 | 750 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Segment Profit |
1,730 | 1,975 | 2,220 | 1,850 | 2,100 | 2,350 | ||||||||||||||||||
Adjustments: |
||||||||||||||||||||||||
Midstream |
| | | | | | ||||||||||||||||||
Gas Pipeline |
| | | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Adjusted segment profit |
$ | 1,730 | $ | 1,975 | $ | 2,220 | $ | 1,850 | $ | 2,100 | $ | 2,350 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
3
Consolidated Statement of Income
(UNAUDITED)
2010 | 2011 | |||||||||||||||||||||||||||||||||||||||
(Dollars in millions, except |
1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | ||||||||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||||||||||||||
Gas Pipeline |
$ | 407 | $ | 380 | $ | 409 | $ | 409 | $ | 1,605 | $ | 416 | $ | 407 | $ | 429 | $ | 426 | $ | 1,678 | ||||||||||||||||||||
Midstream Gas & Liquids |
1,083 | 1,020 | 919 | 1,087 | 4,109 | 1,163 | 1,264 | 1,244 | 1,380 | 5,051 | ||||||||||||||||||||||||||||||
Intercompany eliminations |
| | (1 | ) | 2 | 1 | | | | | | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total revenues |
1,490 | 1,400 | 1,327 | 1,498 | 5,715 | 1,579 | 1,671 | 1,673 | 1,806 | 6,729 | ||||||||||||||||||||||||||||||
Segment costs and expenses: |
||||||||||||||||||||||||||||||||||||||||
Costs and operating expenses |
1,033 | 1,002 | 923 | 1,026 | 3,984 | 1,105 | 1,163 | 1,169 | 1,235 | 4,672 | ||||||||||||||||||||||||||||||
Selling, general, and administrative expenses |
62 | 70 | 70 | 79 | 281 | 73 | 74 | 69 | 74 | 290 | ||||||||||||||||||||||||||||||
Other (income) expense - net |
(3 | ) | (6 | ) | (13 | ) | 7 | (15 | ) | (11 | ) | (1 | ) | 4 | 21 | 13 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Segment costs and expenses |
1,092 | 1,066 | 980 | 1,112 | 4,250 | 1,167 | 1,236 | 1,242 | 1,330 | 4,975 | ||||||||||||||||||||||||||||||
General corporate expenses |
35 | 28 | 30 | 32 | 125 | 30 | 27 | 29 | 26 | 112 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Operating income: |
||||||||||||||||||||||||||||||||||||||||
Gas Pipeline |
160 | 138 | 151 | 150 | 599 | 166 | 138 | 153 | 158 | 615 | ||||||||||||||||||||||||||||||
Midstream Gas & Liquids |
238 | 196 | 196 | 236 | 866 | 246 | 297 | 278 | 318 | 1,139 | ||||||||||||||||||||||||||||||
General corporate expenses |
(35 | ) | (28 | ) | (30 | ) | (32 | ) | (125 | ) | (30 | ) | (27 | ) | (29 | ) | (26 | ) | (112 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total operating income |
363 | 306 | 317 | 354 | 1,340 | 382 | 408 | 402 | 450 | 1,642 | ||||||||||||||||||||||||||||||
Equity earnings |
26 | 27 | 24 | 32 | 109 | 25 | 36 | 40 | 41 | 142 | ||||||||||||||||||||||||||||||
Interest accrued |
(81 | ) | (102 | ) | (103 | ) | (107 | ) | (393 | ) | (108 | ) | (107 | ) | (105 | ) | (106 | ) | (426 | ) | ||||||||||||||||||||
Interest capitalized |
12 | 7 | 7 | 3 | 29 | 2 | 3 | 3 | 3 | 11 | ||||||||||||||||||||||||||||||
Interest income |
3 | | | 1 | 4 | 1 | | | 1 | 2 | ||||||||||||||||||||||||||||||
Other income (expense) - net |
(1 | ) | 2 | 9 | 4 | 14 | 5 | (2 | ) | 2 | 2 | 7 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Income before income taxes |
322 | 240 | 254 | 287 | 1,103 | 307 | 338 | 342 | 391 | 1,378 | ||||||||||||||||||||||||||||||
Provision for income taxes |
| | 1 | 1 | 2 | | | | | | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net income |
322 | 240 | 253 | 286 | 1,101 | 307 | 338 | 342 | 391 | 1,378 | ||||||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests |
6 | 5 | 5 | | 16 | | | | | | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net income attributable to controlling interests |
$ | 316 | $ | 235 | $ | 248 | $ | 286 | $ | 1,085 | $ | 307 | $ | 338 | $ | 342 | $ | 391 | $ | 1,378 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Allocation of net income for calculation of earnings per common unit: |
||||||||||||||||||||||||||||||||||||||||
Net income attributable to controlling interests |
$ | 316 | $ | 235 | $ | 248 | $ | 286 | $ | 1,085 | $ | 307 | $ | 338 | $ | 342 | $ | 391 | $ | 1,378 | ||||||||||||||||||||
Allocation of net income to general partner and Class C units |
284 | 65 | 85 | 73 | 517 | 71 | 74 | 79 | 84 | 308 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Allocation of net income to common units |
$ | 32 | $ | 170 | $ | 163 | $ | 213 | $ | 568 | $ | 236 | $ | 264 | $ | 263 | $ | 307 | $ | 1,070 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net income, per common unit |
$ | 0.61 | $ | 0.66 | $ | 0.63 | $ | 0.76 | $ | 2.66 | $ | 0.81 | $ | 0.91 | $ | 0.91 | $ | 1.05 | $ | 3.69 | ||||||||||||||||||||
Weighted-average number of common units outstanding (thousands) |
52,777 | 255,777 | 260,508 | 282,058 | 213,539 | 289,845 | 290,213 | 290,477 | 290,477 | 290,255 | ||||||||||||||||||||||||||||||
Cash distributions per common unit |
$ | 0.6575 | $ | 0.6725 | $ | 0.6875 | $ | 0.7025 | $ | 2.7200 | $ | 0.7175 | $ | 0.7325 | $ | 0.7475 | $ | 0.7625 | $ | 2.9600 |
Note: | The sum of net income per common unit for the quarters may not equal the total income per common unit for the year due to changes in the weighted-average number of common units outstanding. |
4
Gas Pipeline
(UNAUDITED)
2010 | 2011 | |||||||||||||||||||||||||||||||||||||||
(Dollars in millions) |
1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | ||||||||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||||||||||||||
Northwest Pipeline GP |
$ | 106 | $ | 103 | $ | 103 | $ | 110 | $ | 422 | $ | 110 | $ | 106 | $ | 107 | $ | 111 | $ | 434 | ||||||||||||||||||||
Transcontinental Gas Pipe Line |
300 | 278 | 305 | 299 | 1,182 | 305 | 301 | 322 | 315 | 1,243 | ||||||||||||||||||||||||||||||
Other |
1 | (1 | ) | 1 | | 1 | 1 | | | | 1 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total revenues |
407 | 380 | 409 | 409 | 1,605 | 416 | 407 | 429 | 426 | 1,678 | ||||||||||||||||||||||||||||||
Segment costs and expenses: |
||||||||||||||||||||||||||||||||||||||||
Costs and operating expenses |
212 | 199 | 216 | 212 | 839 | 219 | 225 | 237 | 213 | $ | 894 | |||||||||||||||||||||||||||||
Selling, general and administrative expenses |
33 | 39 | 37 | 42 | 151 | 41 | 40 | 35 | 39 | 155 | ||||||||||||||||||||||||||||||
Other (income) expense - net |
2 | 4 | 5 | 5 | 16 | (10 | ) | 4 | 4 | 16 | 14 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total segment costs and expenses |
247 | 242 | 258 | 259 | 1,006 | 250 | 269 | 276 | 268 | 1,063 | ||||||||||||||||||||||||||||||
Equity earnings |
9 | 10 | 10 | 9 | 38 | 9 | 14 | 17 | 18 | 58 | ||||||||||||||||||||||||||||||
Reported segment profit: |
||||||||||||||||||||||||||||||||||||||||
Northwest Pipeline GP |
54 | 50 | 53 | 55 | 212 | 56 | 51 | 50 | 58 | 215 | ||||||||||||||||||||||||||||||
Transcontinental Gas Pipe Line |
108 | 91 | 100 | 95 | 394 | 111 | 89 | 102 | 104 | 406 | ||||||||||||||||||||||||||||||
Other |
7 | 7 | 8 | 9 | 31 | 8 | 12 | 18 | 14 | 52 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total reported segment profit |
169 | 148 | 161 | 159 | 637 | 175 | 152 | 170 | 176 | 673 | ||||||||||||||||||||||||||||||
Adjustments: |
||||||||||||||||||||||||||||||||||||||||
Northwest Pipeline GP |
| (1 | ) | | | (1 | ) | | | | | | ||||||||||||||||||||||||||||
Transcontinental Gas Pipe Line |
(5 | ) | (4 | ) | | 5 | (4 | ) | | 3 | 6 | 2 | 11 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total adjustments |
(5 | ) | (5 | ) | | 5 | (5 | ) | | 3 | 6 | 2 | 11 | |||||||||||||||||||||||||||
Adjusted segment profit: |
||||||||||||||||||||||||||||||||||||||||
Northwest Pipeline GP |
54 | 49 | 53 | 55 | 211 | 56 | 51 | 50 | 58 | 215 | ||||||||||||||||||||||||||||||
Transcontinental Gas Pipe Line |
103 | 87 | 100 | 100 | 390 | 111 | 92 | 108 | 106 | 417 | ||||||||||||||||||||||||||||||
Other |
7 | 7 | 8 | 9 | 31 | 8 | 12 | 18 | 14 | 52 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total adjusted segment profit |
$ | 164 | $ | 143 | $ | 161 | $ | 164 | $ | 632 | $ | 175 | $ | 155 | $ | 176 | $ | 178 | $ | 684 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Operating statistics (Tbtu) |
||||||||||||||||||||||||||||||||||||||||
Northwest Pipeline GP |
||||||||||||||||||||||||||||||||||||||||
Throughput |
179.4 | 156.5 | 152.7 | 183.8 | 672.4 | 176.8 | 142.3 | 132.6 | 186.1 | 637.8 | ||||||||||||||||||||||||||||||
Avg. daily transportation volumes |
2.0 | 1.7 | 1.7 | 2.0 | 1.8 | 2.0 | 1.6 | 1.4 | 2.0 | 1.7 | ||||||||||||||||||||||||||||||
Avg. daily firm reserved capacity |
2.8 | 2.8 | 2.8 | 2.8 | 2.8 | 2.9 | 2.9 | 2.9 | 2.9 | 2.9 | ||||||||||||||||||||||||||||||
Transcontinental Gas Pipe Line |
||||||||||||||||||||||||||||||||||||||||
Throughput |
586.1 | 459.6 | 517.1 | 593.5 | 2,156.3 | 652.2 | 535.2 | 583.9 | 636.5 | 2,407.8 | ||||||||||||||||||||||||||||||
Avg. daily transportation volumes |
6.5 | 5.1 | 5.6 | 6.5 | 5.9 | 7.2 | 5.9 | 6.3 | 6.9 | 6.6 | ||||||||||||||||||||||||||||||
Avg. daily firm reserved capacity |
7.0 | 6.9 | 7.1 | 7.6 | 7.2 | 7.7 | 7.8 | 8.0 | 8.7 | 8.0 |
5
Midstream Gas & Liquids
(UNAUDITED)
2010 | 2011 | |||||||||||||||||||||||||||||||||||||||
(Dollars in millions) |
1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | ||||||||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||||||||||||||
Gathering & processing |
$ | 149 | $ | 152 | $ | 155 | $ | 163 | $ | 619 | $ | 163 | $ | 172 | $ | 182 | $ | 186 | $ | 703 | ||||||||||||||||||||
NGL sales from gas processing |
338 | 272 | 229 | 298 | 1,137 | 306 | 360 | 331 | 384 | 1,381 | ||||||||||||||||||||||||||||||
Production handling and transportation |
29 | 26 | 26 | 26 | 107 | 25 | 26 | 32 | 29 | 112 | ||||||||||||||||||||||||||||||
Marketing sales |
999 | 897 | 796 | 1,025 | 3,717 | 1,122 | 1,233 | 1,201 | 1,361 | 4,917 | ||||||||||||||||||||||||||||||
Other revenues |
43 | 42 | 38 | 40 | 163 | 42 | 47 | 45 | 47 | 181 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
1,558 | 1,389 | 1,244 | 1,552 | 5,743 | 1,658 | 1,838 | 1,791 | 2,007 | 7,294 | |||||||||||||||||||||||||||||||
Intrasegment eliminations |
(475 | ) | (369 | ) | (325 | ) | (465 | ) | (1,634 | ) | (495 | ) | (574 | ) | (547 | ) | (627 | ) | (2,243 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total revenues |
1,083 | 1,020 | 919 | 1,087 | 4,109 | 1,163 | 1,264 | 1,244 | 1,380 | 5,051 | ||||||||||||||||||||||||||||||
Segment costs and expenses: |
||||||||||||||||||||||||||||||||||||||||
NGL cost of goods sold |
145 | 106 | 93 | 98 | 442 | 99 | 107 | 97 | 97 | 400 | ||||||||||||||||||||||||||||||
Marketing cost of goods sold |
997 | 902 | 792 | 1,006 | 3,697 | 1,109 | 1,221 | 1,193 | 1,359 | 4,882 | ||||||||||||||||||||||||||||||
Other cost of goods sold |
10 | 7 | 7 | 6 | 30 | 7 | 9 | 5 | 11 | 32 | ||||||||||||||||||||||||||||||
Operating costs |
144 | 157 | 141 | 166 | 608 | 166 | 176 | 181 | 184 | 707 | ||||||||||||||||||||||||||||||
Other |
||||||||||||||||||||||||||||||||||||||||
Selling, general, and administrative expenses |
29 | 31 | 32 | 38 | 130 | 32 | 34 | 33 | 36 | 135 | ||||||||||||||||||||||||||||||
Other (income) expense - net |
(5 | ) | (10 | ) | (17 | ) | 2 | (30 | ) | (1 | ) | (6 | ) | 4 | 2 | (1 | ) | |||||||||||||||||||||||
Intrasegment eliminations |
(475 | ) | (369 | ) | (325 | ) | (465 | ) | (1,634 | ) | (495 | ) | (574 | ) | (547 | ) | (627 | ) | (2,243 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total segment costs and expenses |
845 | 824 | 723 | 851 | 3,243 | 917 | 967 | 966 | 1,062 | 3,912 | ||||||||||||||||||||||||||||||
Equity earnings |
17 | 17 | 14 | 23 | 71 | 16 | 22 | 23 | 23 | 84 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Reported segment profit |
255 | 213 | 210 | 259 | 937 | 262 | 319 | 301 | 341 | 1,223 | ||||||||||||||||||||||||||||||
Adjustments |
| (11 | ) | (19 | ) | 3 | (27 | ) | | | | | | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Adjusted segment profit |
$ | 255 | $ | 202 | $ | 191 | $ | 262 | $ | 910 | $ | 262 | $ | 319 | $ | 301 | $ | 341 | $ | 1,223 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Operating statistics |
||||||||||||||||||||||||||||||||||||||||
Gathering and Processing |
||||||||||||||||||||||||||||||||||||||||
Gathering volumes (TBtu) |
312 | 312 | 317 | 321 | 1,262 | 321 | 337 | 345 | 374 | 1,377 | ||||||||||||||||||||||||||||||
Plant inlet natural gas volumes (Tbtu) |
403 | 395 | 389 | 412 | 1,599 | 387 | 398 | 399 | 408 | 1,592 | ||||||||||||||||||||||||||||||
NGL equity sales (million gallons) * |
332 | 302 | 271 | 317 | 1,222 | 289 | 308 | 274 | 317 | 1,188 | ||||||||||||||||||||||||||||||
NGL margin ($/gallon) |
$ | 0.58 | $ | 0.55 | $ | 0.50 | $ | 0.63 | $ | 0.57 | $ | 0.71 | $ | 0.83 | $ | 0.85 | $ | 0.91 | $ | 0.83 | ||||||||||||||||||||
NGL production (million gallons) * |
687 | 671 | 636 | 739 | 2,733 | 683 | 729 | 693 | 788 | 2,893 | ||||||||||||||||||||||||||||||
Discovery Producer Services LLC (equity investment) - 100% |
||||||||||||||||||||||||||||||||||||||||
NGL equity sales (million gallons) |
30 | 28 | 23 | 24 | 105 | 20 | 19 | 21 | 19 | 79 | ||||||||||||||||||||||||||||||
NGL production (million gallons) |
89 | 84 | 81 | 91 | 345 | 83 | 80 | 76 | 68 | 307 | ||||||||||||||||||||||||||||||
Laurel Mountain Midstream, LLC (equity investment) - 100% |
||||||||||||||||||||||||||||||||||||||||
Gathering volumes (Tbtu) |
9 | 10 | 11 | 12 | 42 | 12 | 13 | 12 | 15 | 52 | ||||||||||||||||||||||||||||||
Overland Pass Pipeline Company LLC (equity investment) - 100% |
||||||||||||||||||||||||||||||||||||||||
NGL Transportation volumes (Mbbls) |
10,456 | 11,643 | 9,856 | 11,362 | 43,317 | 10,483 | 11,836 | 12,132 | 13,696 | 48,147 |
* | Excludes volumes associated with partially owned assets that are not consolidated for financial reporting purposes. |
6
Capital Expenditures and Investments
(UNAUDITED)
2010 | 2011 | |||||||||||||||||||||||||||||||||||||||
(Dollars in millions) |
1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | ||||||||||||||||||||||||||||||
Capital expenditures: |
||||||||||||||||||||||||||||||||||||||||
Gas Pipeline: |
||||||||||||||||||||||||||||||||||||||||
Northwest Pipeline GP |
$ | 10 | $ | 24 | $ | 51 | $ | 35 | $ | 120 | $ | 14 | $ | 22 | $ | 36 | $ | 43 | $ | 115 | ||||||||||||||||||||
Transcontinental Gas Pipe Line |
56 | 83 | 98 | 145 | 382 | 84 | 77 | 107 | 118 | 386 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
66 | 107 | 149 | 180 | 502 | 98 | 99 | 143 | 161 | 501 | ||||||||||||||||||||||||||||||
Midstream Gas & Liquids |
54 | 114 | 97 | 70 | 335 | 58 | 54 | 146 | 232 | 490 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total* |
$ | 120 | $ | 221 | $ | 246 | $ | 250 | $ | 837 | $ | 156 | $ | 153 | $ | 289 | $ | 393 | $ | 991 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Purchase of businesses: |
||||||||||||||||||||||||||||||||||||||||
Gas Pipeline |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||||
Midstream Gas & Liquids |
| | | 608 | 608 | | | 31 | | 31 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
$ | | $ | | $ | | $ | 608 | $ | 608 | $ | | $ | | $ | 31 | $ | | $ | 31 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Purchase of investments: |
||||||||||||||||||||||||||||||||||||||||
Gas Pipeline** |
$ | 1 | $ | | $ | 1 | $ | 3 | $ | 5 | $ | 8 | $ | 179 | $ | 2 | $ | 2 | $ | 191 | ||||||||||||||||||||
Midstream Gas & Liquids |
8 | 6 | 434 | 23 | 471 | 28 | 60 | 37 | 55 | 180 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
$ | 9 | $ | 6 | $ | 435 | $ | 26 | $ | 476 | $ | 36 | $ | 239 | $ | 39 | $ | 57 | $ | 371 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Summary: |
||||||||||||||||||||||||||||||||||||||||
Gas Pipeline |
$ | 67 | $ | 107 | $ | 150 | $ | 183 | $ | 507 | $ | 106 | $ | 278 | $ | 145 | $ | 163 | $ | 692 | ||||||||||||||||||||
Midstream Gas & Liquids |
62 | 120 | 531 | 701 | 1,414 | 86 | 114 | 214 | 287 | 701 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
$ | 129 | $ | 227 | $ | 681 | $ | 884 | $ | 1,921 | $ | 192 | $ | 392 | $ | 359 | $ | 450 | $ | 1,393 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Cumulative summary: |
||||||||||||||||||||||||||||||||||||||||
Gas Pipeline |
$ | 67 | $ | 174 | $ | 324 | $ | 507 | $ | 507 | $ | 106 | $ | 384 | $ | 529 | $ | 692 | $ | 692 | ||||||||||||||||||||
Midstream Gas & Liquids |
62 | 182 | 713 | 1,414 | 1,414 | 86 | 200 | 414 | 701 | 701 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
$ | 129 | $ | 356 | $ | 1,037 | $ | 1,921 | $ | 1,921 | $ | 192 | $ | 584 | $ | 943 | $ | 1,393 | $ | 1,393 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Capital expenditures incurred and purchase of investments: |
||||||||||||||||||||||||||||||||||||||||
Increases to property, plant, and equipment |
$ | 103 | $ | 181 | $ | 235 | $ | 240 | $ | 759 | $ | 142 | $ | 174 | $ | 332 | $ | 408 | $ | 1,056 | ||||||||||||||||||||
Purchase of businesses |
| | | 608 | 608 | | | 31 | | 31 | ||||||||||||||||||||||||||||||
Purchase of investments |
9 | 6 | 435 | 26 | 476 | 36 | 239 | 39 | 57 | 371 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
$ | 112 | $ | 187 | $ | 670 | $ | 874 | $ | 1,843 | $ | 178 | $ | 413 | $ | 402 | $ | 465 | $ | 1,458 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
*Increases to property, plant, and equipment |
$ | 103 | $ | 181 | $ | 235 | $ | 240 | $ | 759 | $ | 142 | $ | 174 | $ | 332 | $ | 408 | $ | 1,056 | ||||||||||||||||||||
Changes in related accounts payable and accrued liabilities |
17 | 40 | 11 | 10 | 78 | 14 | (21 | ) | (43 | ) | (15 | ) | (65 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Capital expenditures |
$ | 120 | $ | 221 | $ | 246 | $ | 250 | $ | 837 | $ | 156 | $ | 153 | $ | 289 | $ | 393 | $ | 991 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** | The second quarter of 2011 includes the acquisition of a 24.5 percent interest in Gulfstream Natural Gas System, L.L.C. from a subsidiary of Williams. |
7
Depreciation and Amortization
(UNAUDITED)
2010 | 2011 | |||||||||||||||||||||||||||||||||||||||
(Dollars in millions) |
1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | ||||||||||||||||||||||||||||||
Depreciation and amortization: |
||||||||||||||||||||||||||||||||||||||||
Gas Pipeline: |
||||||||||||||||||||||||||||||||||||||||
Northwest Pipeline GP |
$ | 22 | $ | 22 | $ | 22 | $ | 22 | $ | 88 | $ | 23 | $ | 22 | $ | 23 | $ | 23 | $ | 91 | ||||||||||||||||||||
Transcontinental Gas Pipe Line |
63 | 62 | 62 | 65 | 252 | 64 | 67 | 65 | 64 | 260 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
85 | 84 | 84 | 87 | 340 | 87 | 89 | 88 | 87 | 351 | ||||||||||||||||||||||||||||||
Midstream Gas & Liquids |
55 | 56 | 56 | 61 | 228 | 63 | 65 | 67 | 65 | 260 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
$ | 140 | $ | 140 | $ | 140 | $ | 148 | $ | 568 | $ | 150 | $ | 154 | $ | 155 | $ | 152 | $ | 611 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8