Exhibit 99.1

 

		Williams (NYSE: WMB)
		One Williams Center
		Tulsa, OK 74172
		800-Williams
		www.williams.com

DATE: Feb. 19, 2014

 

MEDIA CONTACT:		INVESTOR CONTACTS:
Tom Droege		John Porter		Sharna Reingold
(918) 573-4034		(918) 573-0797		(918) 573-2078

Williams Reports Year-End 2013 Financial Results

 

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2013 Net Income is $430 Million, $0.62 per Share; Results Impacted by Lower NGL Margins, Extended Outage at Olefins Plant

 

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Adjusted Net Income $559 Million or $0.81 per Share

 

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Williams Partners’ Fee-based Revenue Up $209 Million or 8% vs. 2012

 

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Continue to Expect More Than 50% Growth in Adjusted Segment Profit + DD&A for 2013 vs. 2015 Guidance Period

 

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Geismar Startup Delayed Until June; Expect BI Insurance to Substantially Offset Financial Impact

 

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Williams Partners’ Transco Contracts and Adds Large-Scale Atlantic Sunrise Project to Guidance

 

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Proposed Bluegrass Project Timing Revised to Better Match Producer Needs

 

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Reaffirming Cash-Dividend Growth of 20% in each of 2014 and 2015

 

Year-End Summary Financial Information		2013								2012
Per share amounts are reported on a diluted basis. All amounts are attributable to The Williams Companies, Inc.		millions				per share				millions				per share
(Unaudited)
Income from continuing operations		$	441			$	0.64			$	723			$	1.15
Income (loss) from discontinued operations			(11	)			(0.02	)			136				0.22
Net income		$	430			$	0.62			$	859			$	1.37
Adjusted income from continuing operations*		$	559			$	0.81			$	695			$	1.11
Quarterly Summary Financial Information		4Q 2013								4Q 2012
		millions				per share				millions				per share
Income (loss) from continuing operations		($	13	)		($	0.02	)		$	151			$	0.23
Income (loss) from discontinued operations			(1	)			—				(2	)			—
Net income (loss)		($	14	)		($	0.02	)		$	149			$	0.23
Adjusted income from continuing operations*		$	148			$	0.22			$	160			$	0.25

 

*	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 news release.

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TULSA, Okla. – Williams’ (NYSE: WMB) announced 2013 unaudited net income attributable to Williams of $430 million, or $0.62 per share on a diluted basis, compared with net income of $859 million, or $1.37 per share on a diluted basis for 2012.

The decline in net income for 2013 was primarily due to lower natural gas liquids (NGL) margins at Williams Partners, as well as the absence of $207 million of income in first-quarter 2012 associated with the sale of certain of the company’s former Venezuela operations, of which $144 million was recorded within discontinued operations. Full-year results were also impacted by over six months of lost production at the Williams Partners’ Geismar olefins plant and $99 million of tax expense on undistributed foreign earnings related to the planned dropdown of our Canadian operations to Williams Partners, which is expected to close by the end of February 2014.

For fourth-quarter 2013, Williams reported a net loss of $14 million, or $.02 per share on a diluted basis, compared with net income of $149 million, or $0.23 per share, for fourth-quarter 2012.

The decrease in fourth-quarter 2013 net income was primarily due to Williams Partners’ Geismar olefins plant being out of service for the entire fourth quarter and a decrease in NGL margins. The fourth quarter was also impacted by the previously mentioned $99 million of tax expense related to the planned Canadian dropdown. These declines were offset by an increase in fee-based revenues at Williams Partners and increased equity earnings from Access Midstream Partners.

Adjusted Income from Continuing Operations

Adjusted income from continuing operations was $559 million, or $0.81 per share, for 2013, compared with $695 million or $1.11 per share for 2012. For fourth-quarter 2013, adjusted income from continuing operations was $148 million, or $0.22 per share, compared with $160 million, or $0.25 per share for fourth quarter 2012.

Lower NGL margins at Williams Partners, including the effects of system-wide ethane rejection, as well as the unmitigated portion of the Geismar plant outage drove the decline in adjusted income from continuing operations during 2013. These were partially offset by higher fee-based revenues and Access Midstream Partners equity earnings in 2013.

Adjusted income from continuing operations reflects the removal of 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.

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CEO Comment

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

“In the face of the past year’s challenges presented by the continued decline in NGL margins and the significant and tragic Geismar incident, we continued to focus on significantly growing our fee-based revenues. This growth was steady throughout 2013 and we expect it to grow even faster in 2014 and 2015 as we deliver on major projects for our customers in a safe and reliable manner. We also continued to win significant new business that will support strong dividend growth for years to come. We increased our full-year dividend to shareholders by 20 percent and we expect strong cash flow growth from Williams Partners and Access Midstream Partners to drive this level of annual dividend growth through the 2014 to 2015 guidance period.

“Late in 2013, we placed into service a number of important projects and we expect to place into service approximately $4.5 billion in new growth projects at the partnership level and an additional $800 million at the Williams level in 2014 and 2015. We continue growing our gathering and processing operations to meet producer needs in the Northeast while following through on a roster of Transco expansions to serve growing markets along the Eastern Seaboard. In the Gulf of Mexico, we’re on schedule to bring into service significant deepwater infrastructure that is well supported by anchor customers and positioned for further upside as the deepwater Gulf of Mexico accelerates.

“In our NGL & Petchem Services business, we are moving the target in-service timing of the joint-venture Bluegrass Pipeline project to mid-to-late 2016 to better align with the needs of producers. We continue to engage in ongoing discussions with potential customers regarding commitments to this large-scale, integrated solution that connects Marcellus-Utica natural gas liquids to diverse domestic markets, fractionation, storage and export facilities in the Gulf Coast.

“We continue to see tremendous appetite for additional firm natural gas transportation capacity from a range of industry participants, as evidenced by our fully-contracted Atlantic Sunrise project, and we’ve identified abundant opportunities to help connect the very best supply basins with the fastest growing markets by building out large-scale, market-integrated infrastructure,” Armstrong said.

Business Segment Results

Williams’ business segments for financial reporting are Williams Partners, Williams NGL & Petchem Services, Access Midstream Partners, and Other.

The Williams Partners segment includes the consolidated results of Williams Partners L.P. (NYSE:WPZ); Williams NGL & Petchem Services includes the results of Williams’ Canadian midstream businesses; and Access Midstream Partners includes the company’s equity earnings from its 50-percent interest in privately held Access Midstream Partners GP, L.L.C. and an approximate 23-percent limited-partner interest in Access Midstream Partners, L.P. (NYSE: ACMP). Prior period segment results have been recast to reflect Williams Partners’ acquisition of Williams’ Gulf Olefins business, which was completed in November 2012.

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Consolidated Segment Profit (Loss)		Full Year								4Q
Amounts in millions		2013				2012				2013				2012
Williams Partners		$	1,606			$	1,812			$	342			$	441
Williams NGL & Petchem Services			38				99				(18	)			27
Access Midstream Partners *			61				—				26				—
Other			(4	)			49				(4	)			(12	)
Total Consolidated Segment Profit		$	1,701			$	1,960			$	346			$	456
Adjusted Consolidated Segment Profit (Loss)**		Full Year								4Q
Amounts in millions		2013				2012				2013				2012
Williams Partners		$	1,727			$	1,849			$	485			$	449
Williams NGL & Petchem Services			58				99				2				27
Access Midstream Partners *			30				—				21				—
Other			(4	)			(4	)			(4	)			(12	)
Total Adjusted Consolidated Segment Profit		$	1,811			$	1,944			$	504			$	464

 

*	Segment results for Access Midstream Partners for 4Q and YTD 2013 includes $15 million and $63 million, respectively, of non-cash amortization of the difference between the cost of Williams’ investment and the company’s underlying share of the net assets of Access Midstream Partners.

 

**	A schedule reconciling segment profit to adjusted segment profit (non-GAAP measure) 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; natural gas liquids fractionation, storage and transportation; olefins production; and oil transportation.

For 2013, Williams Partners reported segment profit of $1.61 billion, compared with $1.81 billion for 2012. For fourth quarter 2013, Williams Partners reported segment profit of $342 million, compared with $441 million for fourth quarter 2012.

The decline in Williams Partners’ segment profit during 2013 is primarily due to $297 million, or 39 percent, lower NGLs margins, as well as the Geismar olefins plant being out of service in the third and fourth quarters. The decrease was partially offset by a $209 million, or 8 percent, increase in fee-based revenues and by $50 million of insurance recoveries related to the Geismar incident.

There is a more detailed description of Williams Partners’ business results in the partnership’s 2013 financial results news release, also issued today.

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Williams Partners		2012																2013
Key Operational Metrics		1Q				2Q				3Q				4Q				1Q				2Q				3Q				4Q				4Q Change
																																		Year-over-year				Sequential
Fee-based Revenues (millions)		$	651			$	647			$	659			$	694			$	684			$	704			$	720			$	752				8	%			4	%
NGL Margins (millions)		$	242			$	189			$	167			$	154			$	121			$	105			$	118			$	111				-28	%			-6	%
Ethane Equity sales (million gallons)			176				166				163				141				23				37				52				12				-91	%			-77	%
Per-Unit Ethane NGL Margins ($/gallon)		$	0.36			$	0.22			$	0.12			$	0.04			$	0.03			$	0.02			($	0.01	)		$	0.04				0	%			N/A
Non-Ethane Equity sales (million gallons)			132				129				138				138				123				128				128				109				-21	%			-15	%
Per-Unit Non-Ethane NGL Margins ($/gallon)		$	1.36			$	1.17			$	1.07			$	1.08			$	0.97			$	0.83			$	0.92			$	1.01				-6	%			10	%
Olefin Margins (millions)		$	74			$	70			$	77			$	77			$	118			$	88				N/A				N/A				N/A				N/A
Geismar ethylene sales volumes (millions of lbs.)			284				250				263				261				246				211				N/A				N/A				N/A				N/A
Geismar ethylene margin ($/pound)		$	0.18			$	0.20			$	0.22			$	0.23			$	0.37			$	0.33				N/A				N/A				N/A				N/A

Williams NGL & Petchem Services

Williams NGL & Petchem Services primarily includes Williams’ midstream operations in Alberta, Canada, including an oil sands offgas processing plant near Fort McMurray, 260 miles of NGL and olefins pipelines and an NGL/olefins fractionation facility and butylene/butane splitter facility at Redwater. Williams NGL & Petchem Services also includes the proposed Bluegrass Pipeline.

Williams NGL & Petchem Services reported segment profit of $38 million for 2013, compared with segment profit of $99 million for 2012. For the fourth quarter of 2013, Williams NGL & Petchem Services reported segment loss of $18 million, compared with segment profit of $27 million for the fourth quarter 2012.

The decline in segment profit during the year and the fourth quarter was primarily due to a scheduled shutdown for maintenance and tie-in of the newly constructed and commissioned ethane recovery facilities, as well as a third-party outage. Additionally, the write-off of $20 million costs associated with a canceled pipeline project in 2013 contributed to lower results.

Access Midstream Partners

The 2013 segment profit of $61 million for Access Midstream Partners includes $93 million of equity earnings recognized from Access Midstream Partners, L.P. reduced by $63 million noncash amortization of the difference between the cost of Williams’ investment and the company’s underlying share of the net assets of Access Midstream Partners, L.P., as well as noncash gains of $31 million resulting from Access Midstream Partners’ equity issuances in 2013. These equity issuances resulted in the dilution of our ownership of limited partnership units from approximately 24 percent to 23 percent, which is accounted for as though we sold a portion of our investment. In 2013, Williams received regular quarterly distributions totaling $93 million from Access Midstream Partners, L.P.

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ACMP raised its fourth quarter cash distribution by 23.3 percent compared to the prior year and 3.7 percent compared to the prior quarter.

Other

The decline in segment profit for 2013 in the Other segment is primarily due to the absence of the gain of $53 million recognized in 2012 related to the 2010 sale of the company’s Accroven investment in Venezuela. This gain has been excluded from the adjusted segment profit for Other.

Recent Operational Achievements

Williams Partners

Northeast G&P

 

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Steadily increased the Northeast gathered volumes in 2013 reaching a new monthly average record of 2 billion cubic feet per day in the Utica-Marcellus. Average daily gathered volumes increased 63 percent in fourth quarter 2013 versus fourth quarter 2012. The Susquehanna Supply Hub grew volumes by 70 percent, Ohio Valley Midstream grew volumes by 40 percent and Laurel Mountain grew volumes by 55 percent during the year.

 

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On track to expand fractionation capacity and install de-ethanizer and stabilizer in the first half of 2014 at Ohio Valley Midstream to keep pace with producer demand.

Atlantic-Gulf

 

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Timely expansions to the Transco pipeline system drove record-breaking volume deliveries in areas stretching from Mississippi to New York City. Transco set a three-day delivery record Jan.6-8, 2014 when it delivered an average of 11.12 million dekatherms per day.

 

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Contracted Atlantic Sunrise, a major new Transco expansion that would provide firm transportation service from various supply points along Transco’s Leidy Line in Pennsylvania to demand in the southeast United States. A portion of the project will be jointly owned by Williams Partners and a third party. Williams Partners’ estimated $2.1 billion investment in the project is subject to Board approval. Williams Partners expects to bring Atlantic Sunrise into service in the second half of 2017, assuming all regulatory approvals are received in a timely manner. Additional details are expected to be disclosed later this week.

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Placed into service on November 1 the remaining capacity of its Northeast Supply Link, after bringing half the capacity into service three months ahead of schedule in response to customer demands. The $390 million project expands Transco’s existing system into the New York market by 250,000 dekatherms per day.

 

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Received FERC approval and began preliminary construction work on the $300 million Virginia Southside Expansion, which is designed to provide 270,000 dekatherms per day of incremental, year-round firm natural gas transportation capacity to North Carolina and a new, gas-fired, power-generation plant in Virginia in the second half of 2015.

 

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In the Gulf of Mexico, installation of the 215-mile Keathley Canyon Connector 20-inch deepwater pipeline is more than 80 percent complete. The $460 million project, which includes a new shelf platform and an onshore methanol extraction plant, is due to be completed and ready to receive production within the fourth quarter of 2014.

 

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In the deepwater Gulf of Mexico, positioned the floating spar and prepared for installation of the platform of Gulfstar One, the first-of-its-kind floating production spar on schedule to start serving our deepwater customers in the third quarter of 2014. The turn-key product, which is part of Williams’ new offshore field development program, combines production handling services with export pipeline, oil and gas gathering and processing services.

 

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Received FERC’s draft environmental impact statement in February 2014 regarding the Constitution Pipeline project.

West

 

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Placed into service Northwest Pipeline’s South Seattle Lateral expansion on November 1. The $20 million project provides Puget Sound Energy with an additional 64,000 dekatherms per day of delivery capacity.

 

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The Willow Creek processing plant in the Piceance Basin achieved a new quarterly average daily inlet volume throughput record of 467 million cubic feet per day in the fourth quarter.

Williams Partners NGL & Petchem Services

 

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Continuing to rebuild, turnaround and expand the Geismar Olefins plant, which is now expected to be completed and restarted in June 2014. The expansion will increase the ethylene production capacity by 600 million pounds per year to a total capacity of 1.95 billion pounds per year.

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Completed a truck rack expansion project at the NGL fractionator and storage facilities near Conway, Kan. The additional loading bay is helping meet increased demand for propane this heating season.

Guidance

The company continues to expect to increase the full-year dividend it pays shareholders by 20 percent in each 2014 and 2015 – to per-share amounts of $1.75 and $2.11, respectively. Williams’ full-year dividend for 2013 was $1.44 per share. The expected quarterly increases in Williams’ dividend are subject to quarterly approval of Williams’ board of directors. Williams has paid a common stock dividend every quarter since 1974.

Williams expects strong cash flow growth from Williams Partners and Access Midstream Partners to drive the cash dividend growth through the 2014 to 2015 guidance period and beyond.

Williams Partners’ profitability and cash flow guidance ranges are unchanged from guidance issued on October 30, 2013. Williams Partners expects adjusted segment profit + DD&A to grow by more than 50 percent for the 2013 versus 2015 guidance period. Several key drivers and assumptions are embedded in this estimate. The largest risks to achieving this growth in 2014 are:

 

a.

Natural gas and natural gas liquids prices that drive assumed NGL margins and drilling activities, as well as olefins prices and margins.

 

b.

Recovery of business interruption insurance proceeds offsetting the majority of the Geismar plant outage in 2014, which assumes a June startup.

 

c.

The timely completion and producer startup of the Gulfstar One project and Discovery’s Keathley Canyon System.

 

d.

The delivery of new facilities in the Marcellus producing region along with expected volume growth.

 

e.

The in-service date for Transco’s Rockaway Lateral.

Williams Partners’ Geismar plant is expected to be out of service until June 2014. The expected delay in returning the plant to service resulted from a variety of factors including the extended loss of utilities (primarily steam and electrical systems) severely damaged in the incident; lower than expected productivity due to congestion and complexity from temporary utility equipment impacting both the rebuild and expansion efforts; and restrictions in work-area access due to extensive clean-up procedures. Concurrently, the company is implementing additional systems and processes while conducting the necessary training to support the safe start-up and continued reliable operation of the facility.

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Williams Partners has $500 million of combined business interruption and property damage insurance related to this event (subject to deductibles and other limitations) that is expected to significantly mitigate the financial loss. Based on current commodity pricing assumptions and property damage estimates, the company currently estimates approximately $430 million of cash recoveries from insurers related to business interruption losses and approximately $70 million related to property damage. The company’s current estimate of uninsured business interruption loss, property damage loss and other losses totals $83 million, of which $73 million occurred in 2013 and $10 million in 2014. A $50 million payment from insurers was received during the third quarter of 2013. In February 2014, insurers agreed to pay a second installment of $125 million with funds expected to be received in the first quarter.

The assumed expanded plant restart date and repair cost estimate are subject to various uncertainties and risks that could cause the actual results to be materially different from these assumptions. The assumed property damage and business interruption insurance proceeds are also subject to various uncertainties and risks that could cause the actual results to be materially different from these assumptions.

Capital expenditures for Williams included in guidance for 2014 and 2015 have been decreased by approximately $500 million. Included in this decrease is a reduction of approximately $1.4 billion in Williams NGL & Petchem Services segment primarily due to a change in the target in-service date of the proposed Bluegrass Pipeline and a shift in certain Canada projects to Williams Partners (following the dropdown). This decrease is significantly offset by approximately $900 million of higher estimated capital expenditures at Williams Partners during this period, which primarily relates to new projects.

Regarding the proposed Bluegrass Pipeline, the updated target in-service date – to mid-to-late 2016 vs. late 2015 – is designed to better align with the needs of producers. The new timeframe is more consistent with evolving market conditions as the Bluegrass Pipeline project continues ongoing discussions with potential customers regarding commitments to the pipeline, fractionation, storage and export services. Completion of this project is subject to all necessary or required approvals, elections, and actions, as well as execution of formal customer commitments.

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Williams’ current guidance for its earnings and capital expenditures are displayed in the following table:

 

Williams Guidance		2014												2015
Amounts are in millions except EPS		Low				Mid				High				Low				Mid				High
Adjusted Segment Profit (1)(2)		$	2,200			$	2,400			$	2,600			$	2,820			$	3,070			$	3,320
Adjusted Segment Profit + DD&A (1)(2)		$	3,185			$	3,410			$	3,635			$	3,945			$	4,220			$	4,495
Capital & Investment Expenditures
Williams Partners		$	3,330			$	3,615			$	3,900			$	1,970			$	2,175			$	2,380
Williams NGL & Petchem Services			780				930				1,080				1,205				1,405				1,605
Other			50				55				60				25				25				25
Total Capital & Investment Expenditures		$	4,160			$	4,600			$	5,040			$	3,200			$	3,605			$	4,010
Adjusted Earnings Per Share (1)(2)		$	1.00			$	1.10			$	1.20			$	1.35			$	1.50			$	1.65

 

(1)	Adjusted Segment Profit and Adjusted Diluted EPS are adjusted to remove items considered unrepresentative of ongoing operations and are non-GAAP measures. Adjusted Segment Profit + DD&A is also a non-GAAP measure. Reconciliations to the most relevant GAAP measures are attached to this news release.

Year-End Materials to be Posted Shortly; Q&A Webcast Scheduled for Tomorrow

Williams’ year-end 2013 financial results package will be posted shortly at www.williams.com. The package will include the data book and analyst package.

Williams and Williams Partners L.P. will host a joint Q&A live webcast on Thursday, Feb. 20, at 9:30 a.m. EST. A limited number of phone lines will be available at (888) 329-8905. International callers should dial (719) 325-2301. A link to the live year-end webcast, as well as replays of the webcast in both streaming and downloadable podcast formats, will be available for two weeks following the event at www.williams.com and www.williamslp.com.

Form 10-K

The company plans to file its 2013 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 segment profit + DD&A, adjusted income from continuing operations (“earnings”) and adjusted earnings per share – that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission. Adjusted segment profit, adjusted earnings and adjusted earnings per share measures exclude items of income or loss that the company characterizes as unrepresentative of its ongoing operations. Management believes these measures provide investors meaningful insight into the company’s results from ongoing operations.

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

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financial indicators used by investors to compare a company’s 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 segment profit + DD&A, adjusted earnings, nor adjusted earnings 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 one of the leading energy infrastructure companies in North America. It owns interests in or operates 15,000 miles of interstate gas pipelines, 1,000 miles of NGL transportation pipelines, and more than 10,000 miles of oil and gas gathering pipelines. The company’s facilities have daily gas processing capacity of 6.6 billion cubic feet of natural gas, NGL production of more than 200,000 barrels per day and domestic olefins production capacity of 1.35 billion pounds of ethylene and 90 million pounds of propylene per year. Williams owns approximately 64 percent of Williams Partners L.P. (NYSE: WPZ), one of the largest diversified energy master limited partnerships. Williams Partners owns most of Williams’ interstate gas pipeline and domestic midstream assets. Williams also owns Canadian operations and certain domestic olefins pipelines assets, as well as a significant investment in Access Midstream Partners, L.P. (NYSE: ACMP), a midstream natural gas services provider. The company’s headquarters is in Tulsa, Okla. For more information, visit www.williams.com, where the company routinely posts important information.

Our reports, filings, and other public announcements may include “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. These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995.

All statements, other than statements of historical facts, included in this report that address activities, events or developments that we expect, believe or anticipate will exist or may occur in the future, are forward-looking statements. Forward-looking statements can be identified 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,” “assumes,” “guidance,” “outlook,” “in service date” 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:

 

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Amounts and nature of future capital expenditures;

 

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Expansion and growth of our business and operations;

 

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Financial condition and liquidity;

 

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Business strategy;

 

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Cash flow from operations or results of operations;

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The levels of dividends to stockholders;

 

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Natural gas, natural gas liquids and olefins, supply, prices and demand;

 

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Demand for our services.

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 report. 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:

 

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Whether we have sufficient cash to enable us to pay current and expected levels of dividends;

 

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Availability of supplies, market demand and volatility of prices;

 

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Inflation, interest rates, fluctuation in foreign exchange 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);

 

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The strength and financial resources of our competitors and the effects of competition;

 

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Whether we are able to successfully identify, evaluate and execute investment opportunities;

 

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Ability to acquire new businesses and assets and successfully integrate those operations and assets into our existing businesses, as well as successfully expand our facilities;

 

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Development of alternative energy sources;

 

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The impact of operational and development hazards and unforeseen interruptions;

 

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Costs of, changes in, or the results of laws, government regulations (including safety and environmental regulations), environmental liabilities, litigation, and rate proceedings;

 

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Our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans;

 

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Changes in maintenance and construction costs;

 

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Changes in the current geopolitical situation;

 

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Our exposure to the credit risk of our customers and counterparties;

 

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Risks related to financing, including restrictions stemming from our debt agreements, future changes in our credit ratings and the availability and cost of capital;

 

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The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate;

 

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Risks associated with weather and natural phenomena, including climate conditions;

 

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Acts of terrorism, including cybersecurity threats and related disruptions;

 

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Additional risks described in our filings with the Securities and Exchange Commission.

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. 27, 2013, and each of our quarterly reports on Form 10-Q available from our offices or from our website at www.williams.com.

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Financial Highlights and Operating Statistics

(UNAUDITED)

Final

December 31, 2013

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

(UNAUDITED)

 

		2012																				2013
(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		$	287			$	133			$	152			$	151			$	723			$	162			$	149			$	143			$	(13	)		$	441
Income (loss) from continuing operations—diluted earnings per common share		$	0.47			$	0.21			$	0.25			$	0.23			$	1.15			$	0.23			$	0.22			$	0.20			$	(0.02	)		$	0.64
Adjustments:
Williams Partners
Acquisition and transition-related costs		$	—			$	19			$	4			$	2			$	25			$	—			$	—			$	—			$	—			$	—
Net loss (recovery) related to Eminence storage facility leak			1				—				1				—				2				—				(5	)			5				(2	)			(2	)
Impairment of certain assets			—				—				6				—				6				—				—				—				—				—
Share of impairments at equity method investee			—				—				—				5				5				—				—				—				7				7
Loss related to Geismar furnace fire			—				—				4				1				5				—				—				—				—				—
Gain on sale of certain assets			—				(6	)			—				—				(6	)			—				—				—				—				—
Contingency loss (gain)			—				—				—				—				—				(6	)			—				9				16				19
Loss related to Geismar Incident			—				—				—				—				—				—				6				4				4				14
Geismar Incident adjustment for insurance timing—business interruption			—				—				—				—				—				—				—				(35	)			108				73
Geismar Incident adjustment for insurance timing—repair expense			—				—				—				—				—				—				—				—				10				10
Total Williams Partners adjustments			1				13				15				8				37				(6	)			1				(17	)			143				121
Access Midstream Partners
Gain associated with ACMP equity issuance			—				—				—				—				—				—				(26	)			—				(5	)			(31	)
Total Access Midstream Partners adjustments			—				—				—				—				—				—				(26	)			—				(5	)			(31	)
Williams NGL & Petchem Services
Write-off of abandoned project			—				—				—				—				—				—				—				—				20				20
Total Williams NGL & Petchem Services adjustments			—				—				—				—				—				—				—				—				20				20
Other
Gain from Venezuela investment			(53	)			—				—				—				(53	)			—				—				—				—				—
Total Other adjustments			(53	)			—				—				—				(53	)			—				—				—				—				—
Adjustments included in segment profit (loss)			(52	)			13				15				8				(16	)			(6	)			(25	)			(17	)			158				110
Adjustments below segment profit (loss)
Reorganization-related costs			—				6				6				12				24				2				—				—				—				2
Gain from Venezuela investment—related interest—Other			(10	)			—				—				—				(10	)			—				—				—				—				—
Interest income on receivable from sale of Venezuela assets—Other			—				(3	)			(2	)			(2	)			(7	)			(13	)			(13	)			(11	)			(13	)			(50	)
Allocation of adjustments to noncontrolling interests			—				(6	)			(5	)			(5	)			(16	)			5				4				9				(46	)			(28	)
			(10	)			(3	)			(1	)			5				(9	)			(6	)			(9	)			(2	)			(59	)			(76	)
Total adjustments			(62	)			10				14				13				(25	)			(12	)			(34	)			(19	)			99				34
Less tax effect for above items			11				(6	)			(6	)			(5	)			(6	)			1				10				4				(39	)			(24	)
Adjustments for tax-related items [1]			—				1				1				1				3				1				4				2				101				108
Adjusted income from continuing operations available to common stockholders		$	236			$	138			$	161			$	160			$	695			$	152			$	129			$	130			$	148			$	559
Adjusted diluted earnings per common share [2]		$	0.39			$	0.22			$	0.25			$	0.25			$	1.11			$	0.22			$	0.19			$	0.19			$	0.22			$	0.81
Weighted-average shares—diluted (thousands)			600,520				626,620				632,019				642,527				625,486				687,143				686,924				687,306				687,712				687,185

 

[1]	The fourth quarter of 2013 includes a favorable 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 Income

(UNAUDITED)

		2012																				2013
(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:
Service revenues		$	677			$	667			$	675			$	710			$	2,729			$	706			$	721			$	736			$	776			$	2,939
Product sales			1,342				1,179				1,077				1,159				4,757				1,104				1,046				887				884				3,921
Total revenues			2,019				1,846				1,752				1,869				7,486				1,810				1,767				1,623				1,660				6,860
Costs and expenses:
Product costs			957				900				771				868				3,496				790				801				710				726				3,027
Operating and maintenance expenses			230				275				261				261				1,027				260				291				269				277				1,097
Depreciation and amortization expenses			168				181				196				211				756				201				198				207				209				815
Selling, general, and administrative expenses			129				149				137				156				571				132				123				130				127				512
Other (income) expense—net			8				9				14				(7	)			24				1				4				(29	)			58				34
Total costs and expenses			1,492				1,514				1,379				1,489				5,874				1,384				1,417				1,287				1,397				5,485
Equity earnings (losses)			31				27				30				23				111				18				38				37				41				134
Income (loss) from investments			52				(1	)			—				(2	)			49				(1	)			25				(1	)			5				28
General corporate expenses			40				50				43				55				188				44				43				40				37				164
Total segment profit (loss)			650				408				446				456				1,960				487				456				412				346				1,701
Reclass equity earnings (losses)			(31	)			(27	)			(30	)			(23	)			(111	)			(18	)			(38	)			(37	)			(41	)			(134	)
Reclass income (loss) from investments			(52	)			1				—				2				(49	)			1				(25	)			1				(5	)			(28	)
Reclass general corporate expenses			(40	)			(50	)			(43	)			(55	)			(188	)			(44	)			(43	)			(40	)			(37	)			(164	)
Operating income (loss)			527				332				373				380				1,612				426				350				336				263				1,375
Equity earnings (losses)			31				27				30				23				111				18				38				37				41				134
Interest incurred			(141	)			(140	)			(140	)			(147	)			(568	)			(152	)			(151	)			(151	)			(157	)			(611	)
Interest capitalized			10				12				11				26				59				24				24				27				26				101
Other investing income—net			69				3				3				2				77				13				39				10				19				81
Other income (expense)—net			(4	)			3				—				(1	)			(2	)			(2	)			2				1				(1	)			—
Income (loss) from continuing operations before income taxes			492				237				277				283				1,289				327				302				260				191				1,080
Provision (benefit) for income taxes			133				71				77				79				360				96				102				62				141				401
Income (loss) from continuing operations			359				166				200				204				929				231				200				198				50				679
Income (loss) from discontinued operations			136				(1	)			3				(2	)			136				(1	)			(8	)			(1	)			(1	)			(11	)
Net income (loss)			495				165				203				202				1,065				230				192				197				49				668
Less: Net income attributable to noncontrolling interests			72				33				48				53				206				69				50				56				63				238
Net income (loss) attributable to The Williams Companies, Inc.		$	423			$	132			$	155			$	149			$	859			$	161			$	142			$	141			$	(14	)		$	430
Amounts attributable to The Williams Companies, Inc.:
Income (loss) from continuing operations		$	287			$	133			$	152			$	151			$	723			$	162			$	149			$	143			$	(13	)		$	441
Income (loss) from discontinued operations			136				(1	)			3				(2	)			136				(1	)			(7	)			(2	)			(1	)			(11	)
Net income (loss)		$	423			$	132			$	155			$	149			$	859			$	161			$	142			$	141			$	(14	)		$	430
Diluted earnings (loss) per common share:
Income (loss) from continuing operations		$	0.47			$	0.21			$	0.25			$	0.23			$	1.15			$	0.23			$	0.22			$	0.20			$	(0.02	)		$	0.64
Income (loss) from discontinued operations			0.23				—				—				—				0.22				—				(0.01	)			—				—				(0.02	)
Net income (loss)		$	0.70			$	0.21			$	0.25			$	0.23			$	1.37			$	0.23			$	0.21			$	0.20			$	(0.02	)		$	0.62
Weighted-average number of shares used in computations (thousands)			600,520				626,620				632,019				642,527				625,486				687,143				686,924				687,306				683,552				687,185
Common shares outstanding at end of period (thousands)			595,271				626,563				627,093				681,310				681,310				682,591				683,063				683,334				683,777				683,777
Market price per common share (end of period)		$	30.81			$	28.82			$	34.97			$	32.74			$	32.74			$	37.46			$	32.47			$	36.36			$	38.57			$	38.57
Common dividends per share		$	0.25875			$	0.300			$	0.3125			$	0.325			$	1.19625			$	0.33875			$	0.3525			$	0.36625			$	0.38			$	1.4375

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 GAAP “Segment Profit (Loss)” to Non-GAAP “Adjusted Segment Profit (Loss)” and “Adjusted Segment Profit + DD&A”

(UNAUDITED)

 

		2012																				2013
(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		$	551			$	391			$	429			$	441			$	1,812			$	456			$	403			$	405			$	342			$	1,606
Williams NGL & Petchem Services			40				16				16				27				99				36				22				(2	)			(18	)			38
Access Midstream Partners			—				—				—				—				—				—				29				6				26				61
Other			59				1				1				(12	)			49				(5	)			2				3				(4	)			(4	)
Total segment profit (loss)		$	650			$	408			$	446			$	456			$	1,960			$	487			$	456			$	412			$	346			$	1,701
Adjustments:
Williams Partners		$	1			$	13			$	15			$	8			$	37			$	(6	)		$	1			$	(17	)		$	143			$	121
Williams NGL & Petchem Services			—				—				—				—				—				—				—				—				20				20
Access Midstream Partners			—				—				—				—				—				—				(26	)			—				(5	)			(31	)
Other			(53	)			—				—				—				(53	)			—				—				—				—				—
Total segment adjustments		$	(52	)		$	13			$	15			$	8			$	(16	)		$	(6	)		$	(25	)		$	(17	)		$	158			$	110
Adjusted segment profit (loss):
Williams Partners		$	552			$	404			$	444			$	449			$	1,849			$	450			$	404			$	388			$	485			$	1,727
Williams NGL & Petchem Services			40				16				16				27				99				36				22				(2	)			2				58
Access Midstream Partners			—				—				—				—				—				—				3				6				21				30
Other			6				1				1				(12	)			(4	)			(5	)			2				3				(4	)			(4	)
Total adjusted segment profit (loss)		$	598			$	421			$	461			$	464			$	1,944			$	481			$	431			$	395			$	504			$	1,811
Depreciation and amortization (DD&A):
Williams Partners		$	159			$	171			$	185			$	199			$	714			$	190			$	185			$	190			$	193			$	758
Williams NGL & Petchem Services			4				3				6				7				20				7				6				11				9				33
Access Midstream Partners*			—				—				—				—				—				17				15				16				15				63
Other			5				7				5				5				22				4				7				6				7				24
Total depreciation and amortization		$	168			$	181			$	196			$	211			$	756			$	218			$	213			$	223			$	224			$	878
Adjusted segment profit (loss) + DD&A
Williams Partners		$	711			$	575			$	629			$	648			$	2,563			$	640			$	589			$	578			$	678			$	2,485
Williams NGL & Petchem Services			44				19				22				34				119				43				28				9				11				91
Access Midstream Partners			—				—				—				—				—				17				18				22				36				93
Other			11				8				6				(7	)			18				(1	)			9				9				3				20
Total adjusted segment profit (loss) + DD&A		$	766			$	602			$	657			$	675			$	2,700			$	699			$	644			$	618			$	728			$	2,689

 

*	DD&A adjustment for Access Midstream Partners reflects the amortization of the basis difference between Williams’ investment and its proportional share of the underlying net assets.

Note: Segment profit (loss) includes equity earnings (losses) and income (loss) from investments reported in other investing income—net in the Consolidated Statement of Income. 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)

 

		2012																				2013
(Dollars in millions)		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Year				1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Year
Revenues:
Service revenues		$	673			$	664			$	668			$	704			$	2,709			$	701			$	715			$	731			$	763			$	2,910
Product sales			1,295				1,153				1,049				1,114				4,611				1,055				1,012				855				853				3,775
Total revenues			1,968				1,817				1,717				1,818				7,320				1,756				1,727				1,586				1,616				6,685
Segment costs and expenses:
Product costs			974				907				781				864				3,526				798				810				718				722				3,048
Operating and maintenance expenses			220				264				252				251				987				246				279				245				259				1,029
Depreciation and amortization expenses			159				171				185				199				714				190				185				190				193				758
Selling, general, and administrative expenses			88				99				90				92				369				81				81				85				86				333
Other (income) expense—net			6				12				10				(5	)			23				3				4				(26	)			34				15
Total segment costs and expenses			1,447				1,453				1,318				1,401				5,619				1,318				1,359				1,212				1,294				5,183
Equity earnings			30				27				30				24				111				18				35				31				20				104
Reported segment profit			551				391				429				441				1,812				456				403				405				342				1,606
Adjustments			1				13				15				8				37				(6	)			1				(17	)			143				121
Adjusted segment profit		$	552			$	404			$	444			$	449			$	1,849			$	450			$	404			$	388			$	485			$	1,727
Operating statistics
Interstate Transmission
Throughput (Tbtu)			927.0				779.5				818.6				907.5				3,432.6				1,046.6				850.0				925.4				1,047.9				3,869.9
Avg. daily transportation volumes (Tbtu)			10.2				8.5				8.9				9.9				9.4				11.6				9.3				10.0				11.4				10.6
Avg. daily firm reserved capacity (Tbtu)			11.7				11.6				11.7				12.0				11.7				12.3				11.9				11.8				12.3				12.1
Gathering and Processing*
Gathering volumes (Tbtu)			382				402				413				419				1,616				405				429				442				455				1,731
Plant inlet natural gas volumes (Tbtu)			405				403				415				422				1,645				389				408				393				359				1,549
Ethane equity sales (million gallons)			176				166				163				141				646				23				37				52				12				124
Non-ethane equity sales (million gallons)			132				129				138				138				537				123				128				128				109				488
NGL equity sales (million gallons)			308				295				301				279				1,183				146				165				180				121				612
Ethane margin ($/gallon)		$	0.36			$	0.22			$	0.12			$	0.04			$	0.19			$	0.03			$	0.02			$	(0.01	)		$	0.04			$	0.01
Non-ethane margin ($/gallon)		$	1.36			$	1.17			$	1.07			$	1.08			$	1.17			$	0.97			$	0.83			$	0.92			$	1.01			$	0.93
NGL margin ($/gallon)		$	0.79			$	0.64			$	0.55			$	0.55			$	0.64			$	0.83			$	0.64			$	0.65			$	0.91			$	0.74
Ethane production (million gallons)			438				401				402				361				1,602				160				186				181				136				663
Non-ethane production (million gallons)			365				375				400				423				1,563				368				404				401				363				1,536
NGL production (million gallons)			803				776				802				784				3,165				528				590				582				499				2,199
Petrochemical Services
Geismar ethylene sales volumes (million lbs)			284				250				263				261				1,058				246				211				10				—				467
Geismar ethylene margin ($/lb)		$	0.18			$	0.20			$	0.22			$	0.23			$	0.21			$	0.37			$	0.33			$	0.10			$	—			$	0.34
Equity investments—100%
Discovery NGL equity sales (million gallons)			20				16				17				19				72				19				18				6				6				49
Discovery NGL production (million gallons)			71				62				58				69				260				63				64				45				46				218
Laurel Mountain gathering volumes (Tbtu)			15				16				22				27				80				27				29				32				36				124
Overland Pass NGL transportation volumes (Mbbls)			13,968				12,843				12,527				11,904				51,242				7,402				11,151				13,174				11,463				43,190

 

*	Excludes volumes associated with partially owned assets that are not consolidated for financial reporting purposes.

 

4

---

Williams NGL & Petchem Services

(UNAUDITED)

		2012																				2013
(Dollars in millions)		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Year				1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Year
Revenues:
Fee-based revenues		$	—			$	—			$	2			$	3			$	5			$	2			$	1			$	—			$	1			$	4
Olefin and NGL production sales			89				50				60				75				274				88				71				59				51				269
Total revenues			89				50				62				78				279				90				72				59				52				273
Segment costs and expenses:
Olefin and NGL production cost of goods sold			29				18				22				29				98				31				30				21				22				104
Operating and maintenance expenses			8				8				8				7				31				12				10				22				10				54
Selling, general, and administrative expenses			5				6				6				9				26				4				5				7				7				23
Depreciation and amortization expenses			4				3				6				7				20				7				6				11				9				33
Other (income) expense—net			3				(1	)			4				(1	)			5				—				(1	)			—				22				21
Total segment costs and expenses			49				34				46				51				180				54				50				61				70				235
Reported segment profit (loss)			40				16				16				27				99				36				22				(2	)			(18	)			38
Adjustments			—				—				—				—				—				—				—				—				20				20
Adjusted segment profit (loss)		$	40			$	16			$	16			$	27			$	99			$	36			$	22			$	(2	)		$	2			$	58
Operating statistics
Canadian propylene sales volumes (million lbs)			41				30				42				40				153				35				36				27				20				118
Canadian NGL sales volumes (million gallons)*			47				26				39				53				165				55				45				36				36				172

*       NGL products include: propane, normal butane, isobutane/butylene (butylene), and condensate.

Access Midstream Partners (UNAUDITED)

		2012										2013
(Dollars in millions)		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Year		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Year
Equity earnings												$	17			$	18			$	22			$	36			$	93
Less: Amortizations of equity investment basis differences													17				15				16				15				63
Total equity earnings													—				3				6				21				30
Other investing income—net													—				26				—				5				31
Reported segment profit													—				29				6				26				61
Adjustments													—				(26	)			—				(5	)			(31	)
Adjusted segment profit												$	—			$	3			$	6			$	21			$	30
Distributions received												$	20			$	22			$	22			$	29			$	93

 

5

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Capital Expenditures and Investments

(UNAUDITED)

 

		2012																				2013
(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		$	260			$	524			$	665			$	663			$	2,112			$	608			$	710			$	799			$	816			$	2,933
Williams NGL & Petchem Services**			64				65				62				203				394				100				102				205				207				614
Other**			5				4				3				11				23				5				5				8				7				25
Total*		$	329			$	593			$	730			$	877			$	2,529			$	713			$	817			$	1,012			$	1,030			$	3,572
Purchase of businesses:
Williams Partners		$	325			$	1,724			$	—			$	—			$	2,049			$	—			$	—			$	—			$	—			$	—
Other			—				—				—				—				—				—				—				—				6				6
Total		$	325			$	1,724			$	—			$	—			$	2,049			$	—			$	—			$	—			$	6			$	6
Purchase of investments:
Williams Partners		$	48			$	136			$	98			$	189			$	471			$	93			$	89			$	162			$	95			$	439
Williams NGL & Petchem Services**			—				—				—				—				—				—				2				—				10				12
Other**			—				—				—				2,180				2,180				—				4				—				—				4
Total		$	48			$	136			$	98			$	2,369			$	2,651			$	93			$	95			$	162			$	105			$	455
Summary:
Williams Partners		$	633			$	2,384			$	763			$	852			$	4,632			$	701			$	799			$	961			$	911			$	3,372
Williams NGL & Petchem Services**			64				65				62				203				394				100				104				205				217				626
Other**			5				4				3				2,191				2,203				5				9				8				13				35
Total		$	702			$	2,453			$	828			$	3,246			$	7,229			$	806			$	912			$	1,174			$	1,141			$	4,033
Capital expenditures incurred and purchase of investments:
Increases to property, plant, and equipment		$	371			$	628			$	785			$	971			$	2,755			$	732			$	873			$	1,080			$	968			$	3,653
Purchase of businesses			325				1,724				—				—				2,049				—				—				—				6				6
Purchase of investments			48				136				98				2,369				2,651				93				95				162				105				455
Total		$	744			$	2,488			$	883			$	3,340			$	7,455			$	825			$	968			$	1,242			$	1,079			$	4,114
*Increases to property, plant, and equipment		$	371			$	628			$	785			$	971			$	2,755			$	732			$	873			$	1,080			$	968			$	3,653
Changes in related accounts payable and accrued liabilities			(42	)			(35	)			(55	)			(94	)			(226	)			(19	)			(56	)			(68	)			62				(81	)
Capital expenditures		$	329			$	593			$	730			$	877			$	2,529			$	713			$	817			$	1,012			$	1,030			$	3,572

 

**	Williams NGL & Petchem Services recast to include Bluegrass Pipeline Company LLC and a 50-percent equity investment in Moss Lake Fractionation LLC, previously included in Other.

 

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Depreciation and Amortization and Other Selected Financial Data

(UNAUDITED)

 

		2012																				2013
(Dollars in millions)		1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Year				1st Qtr				2nd Qtr				3rd Qtr				4th Qtr				Year
Depreciation and amortization:
Williams Partners		$	159			$	171			$	185			$	199			$	714			$	190			$	185			$	190			$	193			$	758
Williams NGL & Petchem Services			4				3				6				7				20				7				6				11				9				33
Other			5				7				5				5				22				4				7				6				7				24
Total		$	168			$	181			$	196			$	211			$	756			$	201			$	198			$	207			$	209			$	815
Other selected financial data:
Cash and cash equivalents		$	1,100			$	679			$	996			$	839			$	839			$	702			$	824			$	732			$	681			$	681
Total assets		$	17,790			$	20,267			$	21,263			$	24,327			$	24,327			$	24,816			$	25,657			$	26,455			$	27,169			$	27,169
Capital structure:
Debt
Commercial paper		$	—			$	—			$	—			$	—			$	—			$	—			$	710			$	371			$	225			$	225
Current		$	329			$	4			$	2			$	1			$	1			$	1			$	1			$	1			$	1			$	1
Noncurrent		$	8,366			$	9,033			$	9,512			$	10,735			$	10,735			$	10,610			$	10,359			$	10,359			$	11,353			$	11,353
Stockholders’ equity		$	2,622			$	2,961			$	3,092			$	4,752			$	4,752			$	4,795			$	4,694			$	4,948			$	4,864			$	4,864
Debt to debt-plus-stockholders’ equity ratio			76.8	%			75.3	%			75.5	%			69.3	%			69.3	%			68.9	%			70.2	%			68.4	%			70.4	%			70.4	%

 

7

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2014 Forecast Guidance—Reported to Adjusted

 

		February 19 Guidance
		Reported				Adjustment				Adjusted
(Dollars in millions, except earnings per share)		Low — High				Items				Low — High
Segment profit		$	2,298  —  $2,698			$	(98)			$	2,200  —  $2,600
Net interest expense			(565)  —    (595)				—				(565)  —    (595)
General corporate/other/rounding			(135)  —    (145)				—				(135)  —    (145)
Pretax income			1,598  —  1,958				(98)				1,500  —    1,860
Provision for income tax			(473)  —   (593)				58				(415)  —    (535)
Income from continuing operations		$	1,125  —  $1,365			$	(40)			$	1,085  —  $1,325
Net income attributable to noncontrolling interests			(435)  —    (535)				45				(390)  —   (490)
Amounts attributable to Williams:
Income from continuing operations		$	690  —    $830			$	5			$	695  —    $835
Diluted EPS		$	0.99  —   $1.20							$	1.00  —   $1.20

Note: Guidance assumes the planned dropdown to Williams Partners of Williams’ currently in-service Canadian assets is completed in February 2014. The planned dropdown is subject to successful negotiation of a transaction between Williams and Williams Partners. Earnings guidance for Williams NGL & Petchem Services, which currently includes the planned dropdown assets, has been reduced pursuant to the anticipated transfer of these expected earnings to Williams Partners.

 

8

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Segment Profit Guidance—Reported to Adjusted

 

		February 19 Guidance
		2014												2015
(Dollars in millions)		Low				Midpoint				High				Low				Midpoint				High
Reported segment profit:
Williams Partners (WPZ)		$	2,292			$	2,472			$	2,652			$	2,610			$	2,830			$	3,050
Williams NGL & Petchem Services			(49	)			(47	)			(44	)			80				90				100
Access Midstream Partners			25				43				60				65				85				105
Other			30				30				30				65				65				65
Total Reported segment profit		$	2,298			$	2,498			$	2,698			$	2,820			$	3,070			$	3,320
Adjustments:
Williams Partners-Geismar Incident adjustment for insurance timing-business interruption		$	(104	)		$	(104	)		$	(104	)		$	—			$	—			$	—
Williams Partners-Geismar Incident adjustment for insurance timing-repair expense			22				22				22				—				—				—
Williams Partners-Geismar involuntary conversion gain			(45	)			(45	)			(45	)			—				—				—
Williams NGL & Petchem Services			29				29				29				—				—				—
Access Midstream Partners			—				—				—				—				—				—
Other			—				—				—				—				—				—
Total Adjustments		$	(98	)		$	(98	)		$	(98	)		$	—			$	—			$	—
Adjusted segment profit (loss):
Williams Partners (WPZ)		$	2,165			$	2,345			$	2,525			$	2,610			$	2,830			$	3,050
Williams NGL & Petchem Services			(20	)			(18	)			(15	)			80				90				100
Access Midstream Partners			25				43				60				65				85				105
Other			30				30				30				65				65				65
Total Adjusted segment profit (loss)		$	2,200			$	2,400			$	2,600			$	2,820			$	3,070			$	3,320
Depreciation and amortization (DD&A):
Williams Partners (WPZ)		$	895			$	920			$	945			$	1,010			$	1,035			$	1,060
Williams NGL & Petchem Services			5				5				5				25				25				25
Access Midstream Partners*			60				60				60				60				60				60
Other			25				25				25				30				30				30
Total depreciation and amortization		$	985			$	1,010			$	1,035			$	1,125			$	1,150			$	1,175
*       Amortization adjustment for Access Midstream Partners reflects the amortization of the basis difference between Williams’ investment and its proportional share of the underlying net assets.
Adjusted segment profit (loss) + DD&A
Williams Partners (WPZ)		$	3,060			$	3,265			$	3,470			$	3,620			$	3,865			$	4,110
Williams NGL & Petchem Services			(15	)			(13	)			(10	)			105				115				125
Access Midstream Partners			85				103				120				125				145				165
Other			55				55				55				95				95				95
Total adjusted segment profit + DD&A		$	3,185			$	3,410			$	3,635			$	3,945			$	4,220			$	4,495

 

9

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Reconciliation of Forecasted Reported Income from Continuing Operations to Adjusted Income from Continuing Operations

 

		February 19 Guidance
		2014												2015
(Dollars in millions, except earnings per share)		Low				Midpoint				High				Low				Midpoint				High
Reported income from continuing operations		$	690			$	760			$	830			$	965			$	1,070			$	1,175
Adjustments—pretax			(53	)			(53	)			(53	)			—				—				—
Less taxes			58				58				58				—				—				—
Adjustments—after tax			5				5				5				—				—				—
Adjusted income from continuing ops		$	695			$	765			$	835			$	965			$	1,070			$	1,175
Adjusted diluted EPS		$	1.00			$	1.10			$	1.20			$	1.35			$	1.50			$	1.65

Note: All amounts attributable to Williams

 

10