WILLIAMS COMPANIES, INC. - FORM 8-K - EX-99.2

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EX-99.1 - EX-99.1 - WILLIAMS COMPANIES, INC.	wmb_20180930xer.htm
8-K - 8-K - WILLIAMS COMPANIES, INC.	wmb_20180930x8kxer.htm

EXHIBIT 99.2






	Non-GAAP Reconciliations,
	Financial Highlights, and Operating Statistics

	(UNAUDITED)

	Final

	September 30, 2018



Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income
(UNAUDITED)
	2017															2018
(Dollars in millions, except per-share amounts)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			Year

Income (loss) attributable to The Williams Companies, Inc. available to common stockholders	$	373		$	81		$	33		$	1,687		$	2,174		$	152		$	135		$	129		$	416

Income (loss) - diluted earnings (loss) per common share	$	.45		$	.10		$	.04		$	2.03		$	2.62		$	.18		$	.16		$	.13		$	.46
Adjustments:
Northeast G&P
Share of impairment at equity-method investments	$	—		$	—		$	1		$	—		$	1		$	—		$	—		$	—		$	—
Impairment of certain assets	—			—			121			—			121			—			—			—			—
Ad valorem obligation timing adjustment	—			—			7			—			7			—			—			—			—
Settlement charge from pension early payout program	—			—			—			7			7			—			—			—			—
Organizational realignment-related costs	1			1			2			—			4			—			—			—			—
Total Northeast G&P adjustments	1			1			131			7			140			—			—			—			—
Atlantic-Gulf
Constitution Pipeline project development costs	2			6			4			4			16			2			1			1			4
Settlement charge from pension early payout program	—			—			—			15			15			—			—			—			—
Regulatory adjustments resulting from Tax Reform	—			—			—			493			493			11			(20		)	—			(9		)
Benefit of regulatory asset associated with increase in Transco’s estimated deferred state income tax rate following WPZ Merger	—			—			—			—			—			—			—			(3		)	(3		)
Share of regulatory charges resulting from Tax Reform for equity-method investments	—			—			—			11			11			2			—			—			2
Organizational realignment-related costs	1			2			2			1			6			—			—			—			—
(Gain) loss on asset retirement	—			—			(5		)	5			—			—			—			(10		)	(10		)
Total Atlantic-Gulf adjustments	3			8			1			529			541			15			(19		)	(12		)	(16		)
West
Estimated minimum volume commitments	15			15			18			(48		)	—			—			—			—			—
Impairment of certain assets	—			—			1,021			9			1,030			—			—			—			—
Settlement charge from pension early payout program	—			—			—			13			13			—			—			—			—
Organizational realignment-related costs	2			3			2			1			8			—			—			—			—
Regulatory adjustments resulting from Tax Reform	—			—			—			220			220			(7		)	—						(7		)
Charge for regulatory liability associated with the decrease in Northwest Pipeline’s estimated deferred state income tax rates following WPZ Merger	—			—			—			—			—			—			—			12			12
Gains from contract settlements and terminations	(13		)	(2		)	—			—			(15		)	—			—			—			—
Total West adjustments	4			16			1,041			195			1,256			(7		)	—			12			5
Other
(Gain) loss related to Canada disposition	(2		)	(1		)	4			5			6			—			—			—			—
Expenses associated with strategic asset monetizations	1			4			—			—			5			—			—			—			—
Geismar Incident adjustments	(9		)	2			8			(1		)	—			—			—			—			—
Gain on sale of Geismar Interest	—			—			(1,095		)	—			(1,095		)	—			—			—			—
Gain on sale of RGP Splitter	—			(12		)	—			—			(12		)	—			—			—			—
Accrual for loss contingency	9			—			—			—			9			—			—			—			—
Severance and related costs	9			4			5			4			22			—			—			—			—
ACMP Merger and transition costs	—			4			3			4			11			—			—			—			—
Expenses associated with Financial Repositioning	8			2			—			—			10			—			—			—			—
(Gain) loss on early retirement of debt	(30		)	—			3			—			(27		)	7			—			—			7
Impairment of certain assets	—			23			68			—			91			—			66			—			66
Expenses associated with strategic alternatives	1			3			5			—			9			—			—			—			—
Settlement charge from pension early payout program	—			—			—			36			36			—			—			—			—
Regulatory adjustments resulting from Tax Reform	—			—			—			63			63			—			1			—			1
Benefit of regulatory assets associated with increase in Transco’s estimated deferred state income tax rate following WPZ Merger	—			—			—			—			—			—			—			(45		)	(45		)
WPZ Merger costs	—			—			—			—			—			—			4			15			19
Charitable contribution of preferred stock to Williams Foundation	—			—			—			—			—			—			—			35			35
Total Other adjustments	(13		)	29			(999		)	111			(872		)	7			71			5			83
Adjustments included in Modified EBITDA	(5		)	54			174			842			1,065			15			52			5			72

Adjustments below Modified EBITDA
Gain on disposition of equity-method investment	(269		)	—			—			—			(269		)	—			—			—			—
Accelerated depreciation by equity-method investments	—			—			—			9			9			—			—			—			—
Change in depreciable life associated with organizational realignment	(7		)	—			—			—			(7		)	—			—			—			—
Gain on deconsolidation of Jackalope interest	—			—			—			—			—			—			(62		)	—			(62		)
Allocation of adjustments to noncontrolling interests	77			(10		)	(28		)	(199		)	(160		)	(5		)	21			—			16
	(199		)	(10		)	(28		)	(190		)	(427		)	(5		)	(41		)	—			(46		)
Total adjustments	(204		)	44			146			652			638			10			11			5			26
Less tax effect for above items	77			(17		)	(55		)	(246		)	(241		)	(3		)	(3		)	(1		)	(7		)
Adjustments for tax-related items ⁽¹⁾	(127		)	—			—			(1,923		)	(2,050		)	—			—			110			110

Adjusted income available to common stockholders	$	119		$	108		$	124		$	170		$	521		$	159		$	143		$	243		$	545
Adjusted diluted earnings per common share ⁽²⁾	$	.14		$	.13		$	.15		$	.20		$	.63		$	.19		$	.17		$	.24		$	.61
Weighted-average shares - diluted (thousands)	826,476			828,575			829,368			829,607			828,518			830,197			830,107			1,026,504			896,322

(1) The first quarter of 2017 includes an unfavorable adjustment related to the release of a valuation allowance. The fourth quarter of 2017 includes an unfavorable adjustment to reverse the tax benefit associated with remeasuring our deferred tax balances at a lower corporate rate resulting from Tax Reform. The third quarter of 2018 reflects tax adjustments driven by the WPZ Merger, primarily a valuation allowance for foreign tax credits.
(2) 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.



Reconciliation of Distributable Cash Flow (DCF)
(UNAUDITED)
	2017															2018
(Dollars in millions, except coverage ratios)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			Year

The Williams Companies, Inc.
Reconciliation of GAAP "Net Income (Loss)" to Non-GAAP "Modified EBITDA", "Adjusted EBITDA" and "Distributable cash flow"

Net income (loss)	$	569		$	193		$	125		$	1,622		$	2,509		$	270		$	269		$	200		$	739
Provision (benefit) for income taxes	37			65			24			(2,100		)	(1,974		)	55			52			190			297
Interest expense	280			271			267			265			1,083			273			275			270			818
Equity (earnings) losses	(107		)	(125		)	(115		)	(87		)	(434		)	(82		)	(92		)	(105		)	(279		)
Other investing (income) loss - net	(272		)	(2		)	(4		)	(4		)	(282		)	(4		)	(68		)	(2		)	(74		)
Proportional Modified EBITDA of equity-method investments	194			215			202			184			795			169			178			205			552
Depreciation and amortization expenses	442			433			433			428			1,736			431			434			425			1,290
Accretion for asset retirement obligations associated with nonregulated operations	7			9			7			10			33			8			10			8			26
Modified EBITDA	1,150			1,059			939			318			3,466			1,120			1,058			1,191			3,369
EBITDA adjustments	(5		)	54			174			842			1,065			15			52			5			72
Adjusted EBITDA	1,145			1,113			1,113			1,160			4,531			1,135			1,110			1,196			3,441

Maintenance capital expenditures ⁽¹⁾	(58		)	(105		)	(143		)	(165		)	(471		)	(110		)	(160		)	(138		)	(408		)
Net interest expense - cash portion ⁽²⁾	(289		)	(280		)	(271		)	(271		)	(1,111		)	(273		)	(275		)	(270		)	(818		)
Cash taxes	(5		)	(1		)	(11		)	(11		)	(28		)	(1		)	(10		)	(1		)	(12		)
Income attributable to noncontrolling interests ⁽³⁾	(27		)	(32		)	(27		)	(27		)	(113		)	(25		)	(24		)	(19		)	(68		)
WPZ restricted stock unit non-cash compensation	2			1			1			1			5			—			—			—			—
Amortization of deferred revenue associated with certain 2016 contract restructurings ⁽⁴⁾	(58		)	(58		)	(59		)	(58		)	(233		)	—			—			—			—
Distributable cash flow	$	710		$	638		$	603		$	629		$	2,580		$	726		$	641		$	768		$	2,135

Total cash distributed ⁽⁵⁾	$	400		$	400		$	400		$	401		$	1,601		$	438		$	443		$	412		$	1,293

Coverage ratios:
Distributable cash flow divided by Total cash distributed	1.78			1.60			1.51			1.57			1.61			1.66			1.45			1.86			1.65
Net income (loss) divided by Total cash distributed	1.42			0.48			0.31			4.04			1.57			0.62			0.61			0.49			0.57

(1) Includes proportionate share of maintenance capital expenditures of equity investments.
(2) Includes proportionate share of interest expense of equity investments.
(3) Excludes allocable share of certain EBITDA adjustments.
(4) Beginning first quarter 2018, as a result of the extended deferred revenue amortization period under the new GAAP revenue standard, we have discontinued the adjustment associated with these 2016 contract restructuring payments. The adjustments would have been $32 million, $31 million, and $32 million for the first, second, and third quarters of 2018, respectively.
(5) Includes cash dividends paid each quarter by WMB, as well as the public unitholders share of distributions declared by WPZ for the 2017 periods and the first two quarters of 2018.



Reconciliation of "Net Income (Loss)" to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA”
(UNAUDITED)
	2017															2018
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			Year

Net income (loss)	$	569		$	193		$	125		$	1,622		$	2,509		$	270		$	269		$	200		$	739
Provision (benefit) for income taxes	37			65			24			(2,100		)	(1,974		)	55			52			190			297
Interest expense	280			271			267			265			1,083			273			275			270			818
Equity (earnings) losses	(107		)	(125		)	(115		)	(87		)	(434		)	(82		)	(92		)	(105		)	(279		)
Other investing (income) loss - net	(272		)	(2		)	(4		)	(4		)	(282		)	(4		)	(68		)	(2		)	(74		)
Proportional Modified EBITDA of equity-method investments	194			215			202			184			795			169			178			205			552
Depreciation and amortization expenses	442			433			433			428			1,736			431			434			425			1,290
Accretion expense associated with asset retirement obligations for nonregulated operations	7			9			7			10			33			8			10			8			26
Modified EBITDA	$	1,150		$	1,059		$	939		$	318		$	3,466		$	1,120		$	1,058		$	1,191		$	3,369

Northeast G&P	$	226		$	247		$	115		$	231		$	819		$	250		$	255		$	281		$	786
Atlantic-Gulf	450			454			430			(96		)	1,238			451			475			492			1,418
West	385			356			(615		)	286			412			413			389			412			1,214
Other	89			2			1,009			(103		)	997			6			(61		)	6			(49		)
Total Modified EBITDA	$	1,150		$	1,059		$	939		$	318		$	3,466		$	1,120		$	1,058		$	1,191		$	3,369

Adjustments included in Modified EBITDA ⁽¹⁾:

Northeast G&P	$	1		$	1		$	131		$	7		$	140		$	—		$	—		$	—		$	—
Atlantic-Gulf	3			8			1			529			541			15			(19		)	(12		)	(16		)
West	4			16			1,041			195			1,256			(7		)	—			12			5
Other	(13		)	29			(999		)	111			(872		)	7			71			5			83
Total Adjustments included in Modified EBITDA	$	(5	)	$	54		$	174		$	842		$	1,065		$	15		$	52		$	5		$	72

Adjusted EBITDA:

Northeast G&P	$	227		$	248		$	246		$	238		$	959		$	250		$	255		$	281		$	786
Atlantic-Gulf	453			462			431			433			1,779			466			456			480			1,402
West	389			372			426			481			1,668			406			389			424			1,219
Other	76			31			10			8			125			13			10			11			34
Total Adjusted EBITDA	$	1,145		$	1,113		$	1,113		$	1,160		$	4,531		$	1,135		$	1,110		$	1,196		$	3,441

(1) Adjustments by segment are detailed in the "Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income," which is also included in these materials.



Consolidated Statement of Operations
(UNAUDITED)
	2017															2018
(Dollars in millions, except per-share amounts)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			Year

Revenues:
Service revenues	$	1,261		$	1,282		$	1,310		$	1,459		$	5,312		$	1,351		$	1,340		$	1,371		$	4,062
Service revenues - commodity consideration	—			—			—			—			—			101			94			121			316
Product sales	727			642			581			769			2,719			636			657			811			2,104
Total revenues	1,988			1,924			1,891			2,228			8,031			2,088			2,091			2,303			6,482
Costs and expenses:
Product costs	579			537			504			680			2,300			613			636			790			2,039
Processing commodity expenses	—			—			—			—			—			35			26			30			91
Operating and maintenance expenses	371			392			403			410			1,576			357			388			389			1,134
Depreciation and amortization expenses	442			433			433			428			1,736			431			434			425			1,290
Selling, general, and administrative expenses	161			153			138			142			594			132			130			174			436
Impairment of certain assets	1			25			1,210			12			1,248			—			66			—			66
Gain on sale of Geismar Interest	—			—			(1,095		)	—			(1,095		)	—			—			—			—
Regulatory charges resulting from Tax Reform	—			—			—			674			674			—			—			—			—
Other (income) expense - net	4			6			24			37			71			29			1			(6		)	24
Total costs and expenses	1,558			1,546			1,617			2,383			7,104			1,597			1,681			1,802			5,080
Operating income (loss)	430			378			274			(155		)	927			491			410			501			1,402
Equity earnings (losses)	107			125			115			87			434			82			92			105			279
Other investing income (loss) - net	272			2			4			4			282			4			68			2			74
Interest incurred	(287		)	(280		)	(275		)	(274		)	(1,116		)	(282		)	(288		)	(286		)	(856		)
Interest capitalized	7			9			8			9			33			9			13			16			38
Other income (expense) - net	77			24			23			(149		)	(25		)	21			26			52			99
Income (loss) before income taxes	606			258			149			(478		)	535			325			321			390			1,036
Provision (benefit) for income taxes	37			65			24			(2,100		)	(1,974		)	55			52			190			297
Net income (loss)	569			193			125			1,622			2,509			270			269			200			739
Less: Net income (loss) attributable to noncontrolling interests	196			112			92			(65		)	335			118			134			71			323
Net income (loss) attributable to The Williams Companies, Inc.	373			81			33			1,687			2,174			152			135			129			416
Preferred stock dividends	—			—			—			—			—			—			—			—			—
Net income (loss) available to common stockholders	$	373		$	81		$	33		$	1,687		$	2,174		$	152		$	135		$	129		$	416

Diluted earnings (loss) per common share:
Net income (loss) ⁽¹⁾	$	.45		$	.10		$	.04		$	2.03		$	2.62		$	.18		$	.16		$	.13		$	.46

Weighted-average number of shares (thousands)	826,476			828,575			829,368			829,607			828,518			830,197			830,107			1,026,504			896,322

Common shares outstanding at end of period (thousands)	826,239			826,398			826,723			826,836			826,836			827,607			827,733			1,210,525			1,210,525
Market price per common share (end of period)	$	29.59		$	30.28		$	30.01		$	30.49		$	30.49		$	24.86		$	27.11		$	27.19		$	27.19
Cash dividends declared per share	$	.30		$	.30		$	.30		$	.30		$	1.20		$	.34		$	.34		$	.34		$	1.02

(1) 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.



Northeast G&P
(UNAUDITED)
	2017											2018
(Dollars in millions)	1st Qtr		2nd Qtr		3rd Qtr			4th Qtr		Year		1st Qtr		2nd Qtr		3rd Qtr		Year

Revenues:
Service revenues:
Nonregulated gathering and processing fee-based revenue	$	182	$	183	$	182		$	191	$	738	$	189	$	196	$	211	$	596
Other fee revenues	35		34		32			33		134		39		36		36		111
Nonregulated commodity consideration	—		—		—			—		—		4		4		6		14
Product sales:
NGL sales from gas processing	4		4		2			4		14		4		5		6		15
Marketing sales	64		48		59			106		277		89		65		57		211
Tracked product sales	—		—		—			—		—		5		5		6		16
Total revenues	285		269		275			334		1,163		330		311		322		963

Segment costs and expenses:
NGL cost of goods sold	4		1		2			1		8		4		5		6		15
Marketing cost of goods sold	65		48		59			106		278		90		65		57		212
Processing commodity expenses	—		—		—			—		—		2		2		3		7
Operating and administrative costs	86		88		99			103		376		85		91		96		272
Other segment costs and expenses	—		1		(1		)	10		10		2		1		4		7
Impairment of certain assets	1		1		121			1		124		—		—		—		—
Tracked cost of goods sold	—		—		—			—		—		5		7		6		18
Total segment costs and expenses	156		139		280			221		796		188		171		172		531

Proportional Modified EBITDA of equity-method investments	97		117		120			118		452		108		115		131		354
Modified EBITDA	226		247		115			231		819		250		255		281		786
Adjustments	1		1		131			7		140		—		—		—		—
Adjusted EBITDA	$	227	$	248	$	246		$	238	$	959	$	250	$	255	$	281	$	786
NGL margin	$	—	$	3	$	—		$	3	$	6	$	2	$	2	$	3	$	7

Statistics for Operated Assets
Gathering and Processing
Gathering volumes (Bcf per day) - Consolidated ⁽¹⁾	3.32		3.28		3.28			3.37		3.31		3.38		3.44		3.62		3.48
Gathering volumes (Bcf per day) - Non-consolidated ⁽²⁾	3.55		3.58		3.48			3.61		3.55		3.82		3.59		3.73		3.71
Plant inlet natural gas volumes (Bcf per day) ⁽¹⁾	0.39		0.40		0.45			0.50		0.43		0.49		0.55		0.52		0.52

Ethane equity sales (Mbbls/d)	2.32		2.34		1.71			0.98		1.83		1.33		3.17		2.74		2.42
Non-ethane equity sales (Mbbls/d)	1.09		1.13		1.17			0.90		1.07		0.79		1.09		1.49		1.12
NGL equity sales (Mbbls/d)	3.41		3.47		2.88			1.88		2.90		2.12		4.26		4.23		3.54

Ethane production (Mbbls/d)	17		22		17			22		20		23		27		26		25
Non-ethane production (Mbbls/d)	15		17		19			22		18		21		21		23		22
NGL production (Mbbls/d)	32		39		36			44		38		44		48		49		47

(1) Includes gathering volumes associated with Susquehanna Supply Hub, Ohio Valley Midstream, and Utica Supply Hub, all of which are consolidated.
(2) Includes 100% of the volumes associated with operated equity-method investments, including the Laurel Mountain Midstream partnership; and the Bradford Supply Hub and a portion of the Marcellus South Supply Hub within the Appalachia Midstream Services partnership. Volumes handled by Blue Racer Midstream (gathering and processing) and UEOM (processing only), which we do not operate, are not included.



Atlantic-Gulf
(UNAUDITED)
	2017														2018
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year		1st Qtr			2nd Qtr			3rd Qtr			Year

Revenues:
Service revenues:
Nonregulated gathering & processing fee-based revenue	$	127		$	136		$	133		$	132		$	528	$	138		$	128		$	138		$	404
Regulated transportation revenue	354			358			380			408			1,500		413			406			411			1,230
Other fee revenues	34			34			31			33			132		32			34			34			100
Tracked service revenue	21			19			20			19			79		26			22			24			72
Nonregulated commodity consideration	—			—			—			—			—		15			12			18			45
Product sales:
NGL sales from gas processing	27			16			13			14			70		15			10			16			41
Marketing sales	90			75			66			81			312		45			57			67			169
Other sales	4			3			2			1			10		2			2			3			7
Tracked product sales	13			31			25			23			92		31			36			45			112
Total revenues	670			672			670			711			2,723		717			707			756			2,180
Segment costs and expenses:
NGL cost of goods sold	13			7			6			3			29		15			12			19			46
Marketing cost of goods sold	89			73			64			81			307		44			56			67			167
Other cost of goods sold	1			—			—			1			2		—			—			—			—
Tracked cost of goods sold	15			33			27			24			99		33			38			48			119
Processing commodity expenses	—			—			—			—			—		5			2			3			10
Operating and administrative costs	157			169			193			208			727		177			181			181			539
Other segment costs and expenses	(4		)	(3		)	(6		)	26			13		(2		)	(15		)	(29		)	(46		)
Regulatory charges resulting from Tax Reform	—			—			—			493			493		11			(20		)	—			(9		)
Tracked operating and administrative costs	21			19			20			19			79		26			22			24			72
Total segment costs and expenses	292			298			304			855			1,749		309			276			313			898
Proportional Modified EBITDA of equity-method investments	72			80			64			48			264		43			44			49			136
Modified EBITDA	450			454			430			(96		)	1,238		451			475			492			1,418
Adjustments	3			8			1			529			541		15			(19		)	(12		)	(16		)
Adjusted EBITDA	$	453		$	462		$	431		$	433		$	1,779	$	466		$	456		$	480		$	1,402
NGL Margins	$	14		$	9		$	7		$	11		$	41	$	10		$	8		$	12		$	30

Statistics for Operated Assets
Gathering, Processing and Crude Oil Transportation
Gathering volumes (Bcf per day) - Consolidated ⁽¹⁾	0.32			0.29			0.31			0.30			0.31		0.30			0.25			0.29			0.28
Gathering volumes (Bcf per day) - Non-consolidated ⁽²⁾	0.55			0.54			0.39			0.28			0.44		0.24			0.25			0.25			0.25
Plant inlet natural gas volumes (Bcf per day) - Consolidated ⁽¹⁾	0.56			0.57			0.52			0.54			0.55		0.54			0.43			0.51			0.49
Plant inlet natural gas volumes (Bcf per day) - Non-consolidated ⁽²⁾	0.54			0.53			0.39			0.27			0.43		0.24			0.25			0.25			0.25
Crude transportation volumes (Mbbls/d)	131			135			137			136			134		142			132			147			140
Consolidated ⁽¹⁾
Ethane margin ($/gallon)	$	.02		$	.03		$	.04		$	.09		$	.04	$	.03		$	.16		$	.24		$	.15
Non-ethane margin ($/gallon)	$	.42		$	.36		$	.53		$	.72		$	.47	$	.66		$	.74		$	.76		$	.72
NGL margin ($/gallon)	$	.26		$	.23		$	.26		$	.46		$	.28	$	.40		$	.48		$	.51		$	.46
Ethane equity sales (Mbbls/d)	6.09			3.74			4.29			2.36			4.11		2.82			1.91			3.05			2.59
Non-ethane equity sales (Mbbls/d)	8.64			5.82			3.50			3.42			5.33		3.87			2.35			3.14			3.12
NGL equity sales (Mbbls/d)	14.73			9.56			7.79			5.78			9.44		6.69			4.26			6.19			5.71
Ethane production (Mbbls/d)	14			14			13			14			14		12			12			15			13
Non-ethane production (Mbbls/d)	20			19			18			19			19		19			17			18			18
NGL production (Mbbls/d)	34			33			31			33			33		31			29			33			31
Non-consolidated ⁽²⁾
NGL equity sales (Mbbls/d)	5			4			5			4			5		2			5			4			4
NGL production (Mbbls/d)	21			22			22			19			21		18			20			20			19
Transcontinental Gas Pipe Line
Throughput (Tbtu)	939.1			887.6			938.5			1,017.5			3,782.7		1,099.9			965.5			1,092.3			3,157.7
Avg. daily transportation volumes (Tbtu)	10.4			9.8			10.2			11.1			10.4		12.2			10.6			11.9			11.6
Avg. daily firm reserved capacity (Tbtu)	12.8			13.2			14.1			14.9			13.8		15.4			15.0			15.0			15.2

(1) Excludes volumes associated with equity-method investments that are not consolidated in our results.
(2) Includes 100% of the volumes associated with operated equity-method investments.



West
(UNAUDITED)
	2017													2018
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr		Year		1st Qtr			2nd Qtr		3rd Qtr		Year

Revenues:
Service revenues:
Nonregulated gathering & processing fee-based revenue	$	363		$	382		$	398		$	502	$	1,645	$	386		$	398	$	387	$	1,171
Regulated transportation revenue	117			112			113			118		460		109			104		106		319
Other fee revenues	38			33			33			37		141		36			32		40		108
Nonregulated commodity consideration	—			—			—			—		—		82			78		97		257
Tracked service revenues	—			—			—			—		—		—			1		—		1
Product sales:
NGL sales from gas processing	64			61			68			82		275		85			76		90		251
Olefin sales	1			—			—			—		1		—			—		—		—
Marketing sales	387			368			408			534		1,697		419			465		615		1,499
Other sales	4			5			9			20		38		10			9		16		35
Tracked product sales	—			1			—			1		2		16			10		11		37
Total revenues	974			962			1,029			1,294		4,259		1,143			1,173		1,362		3,678
Segment costs and expenses:
NGL cost of goods sold	27			31			31			32		121		85			81		101		267
Marketing cost of goods sold	386			375			397			527		1,685		418			458		605		1,481
Other cost of goods sold	3			3			10			20		36		7			8		12		27
Tracked cost of goods sold	—			—			—			—		—		16			10		12		38
Processing commodity expenses	—			—			—			—		—		30			20		26		76
Operating and administrative costs	210			216			203			201		830		193			215		200		608
Tracked operating and administrative costs	—			—			1			1		2		—			1		—		1
Other segment costs and expenses	(12		)	(2		)	(1		)	15		—		6			10		19		35
Impairment of certain assets	—			1			1,021			10		1,032		—			—		—		—
Regulatory charges resulting from Tax Reform	—			—			—			220		220		(7		)	—		—		(7		)
Total segment costs and expenses	614			624			1,662			1,026		3,926		748			803		975		2,526
Proportional Modified EBITDA of equity-method investments	25			18			18			18		79		18			19		25		62
Modified EBITDA	385			356			(615		)	286		412		413			389		412		1,214
Adjustments	4			16			1,041			195		1,256		(7		)	—		12		5
Adjusted EBITDA	$	389		$	372		$	426		$	481	$	1,668	$	406		$	389	$	424	$	1,219
NGL margin	$	37		$	30		$	37		$	50	$	154	$	52		$	53	$	60	$	165

Statistics for Operated Assets
Gathering and Processing
Gathering volumes (Bcf per day) - Consolidated ⁽¹⁾	4.23			4.40			4.62			4.86		4.53		4.58			4.60		4.48		4.55
Gathering volumes (Bcf per day) - Non-consolidated⁽²⁾	—			—			—			—		—		—			—		0.15		0.05
Plant inlet natural gas volumes (Bcf per day) - Consolidated⁽¹⁾	1.99			2.01			2.11			2.17		2.07		2.16			2.12		2.11		2.13
Plant inlet natural gas volumes (Bcf per day) - Non-consolidated ⁽²⁾	—			—			—			—		—		—			—		0.12		0.04
Ethane equity sales (Mbbls/d)	3.00			10.55			10.87			11.90		9.11		19.01			10.23		12.19		13.78
Non-ethane equity sales (Mbbls/d)	19.52			19.53			20.49			20.80		20.09		19.83			18.80		19.48		19.37
NGL equity sales (Mbbls/d)	22.52			30.08			31.36			32.70		29.20		38.84			29.03		31.67		33.15
Ethane margin ($/gallon)	$	.04		$	.00		$	.02		$	.02	$	.02	$	.01		$	.07	$	.18	$	.07
Non-ethane margin ($/gallon)	$	.49		$	.40		$	.45		$	.61	$	.49	$	.69		$	.71	$	.69	$	.69
NGL margin ($/gallon)	$	.43		$	.26		$	.30		$	.39	$	.34	$	.35		$	.48	$	.49	$	.44
Ethane production (Mbbls/d)	8			18			19			26		18		31			26		28		28
Non-ethane production (Mbbls/d) - Consolidated ⁽¹⁾	55			57			62			63		59		62			61		59		60
Non-ethane production (Mbbls/d) - Jackalope equity-method investment - 100%	—			—			—			—		—		—			—		5		2
NGL production (Mbbls/d)	63			75			81			89		77		93			87		92		90
NGL Transportation volumes (Mbbls) ⁽³⁾	18,338			20,558			21,015			21,424		81,335		21,263			21,334		22,105		64,702
Northwest Pipeline LLC
Throughput (Tbtu)	219.0			165.4			156.4			209.1		749.9		226.1			188.1		196.5		610.7
Avg. daily transportation volumes (Tbtu)	2.4			1.8			1.7			2.3		2.1		2.5			2.1		2.1		2.2
Avg. daily firm reserved capacity (Tbtu)	3.0			3.0			3.0			3.0		3.0		3.0			3.0		3.0		3.0

(1) Excludes volumes associated with equity-method investments that are not consolidated in our results.
(2) Includes 100% of the volumes associated with operated equity-method investments, including the Jackalope Gas Gathering System and Rocky Mountain Midstream.
(3) Includes 100% of the volumes associated with operated equity-method investments, including the Overland Pass Pipeline Company and Rocky Mountain Midstream.



Capital Expenditures and Investments
(UNAUDITED)
	2017															2018
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr		2nd Qtr		3rd Qtr		Year

Capital expenditures:
Northeast G&P	$	58		$	81		$	173		$	101		$	413		$	114	$	104	$	114	$	332
Atlantic-Gulf	388			398			371			508			1,665			764		746		549		2,059
West	57			58			94			76			285			69		74		96		239
Other	8			8			6			14			36			10		9		10		29
Total ⁽¹⁾	$	511		$	545		$	644		$	699		$	2,399		$	957	$	933	$	769	$	2,659

Purchases of investments:
Northeast G&P	$	20		$	26		$	24		$	29		$	99		$	20	$	70	$	114	$	204
Atlantic-Gulf	—			1			—			—			1			1		—		5		6
West	32			—			—			—			32			—		—		593		593
Total	$	52		$	27		$	24		$	29		$	132		$	21	$	70	$	712	$	803

Summary:
Northeast G&P	$	78		$	107		$	197		$	130		$	512		$	134	$	174	$	228	$	536
Atlantic-Gulf	388			399			371			508			1,666			765		746		554		2,065
West	89			58			94			76			317			69		74		689		832
Other	8			8			6			14			36			10		9		10		29
Total	$	563		$	572		$	668		$	728		$	2,531		$	978	$	1,003	$	1,481	$	3,462

Capital expenditures incurred and purchases of investments:
Increases to property, plant, and equipment	$	569		$	591		$	666		$	836		$	2,662		$	934	$	930	$	618	$	2,482
Purchases of investments	52			27			24			29			132			21		70		712		803
Total	$	621		$	618		$	690		$	865		$	2,794		$	955	$	1,000	$	1,330	$	3,285

⁽¹⁾ Increases to property, plant, and equipment	$	569		$	591		$	666		$	836		$	2,662		$	934	$	930	$	618	$	2,482
Changes in related accounts payable and accrued liabilities	(58		)	(46		)	(22		)	(137		)	(263		)	23		3		151		177
Capital expenditures	$	511		$	545		$	644		$	699		$	2,399		$	957	$	933	$	769	$	2,659



Selected Financial Information
(UNAUDITED)
	2017												2018
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr

Selected financial information:
Cash and cash equivalents	$	639		$	1,918		$	1,172		$	899		$	1,292		$	275		$	42

Total assets	$	47,512		$	48,770		$	46,120		$	46,352		$	47,052		$	46,374		$	47,153

Capital structure:
Debt:
Commercial paper	$	—		$	—		$	—		$	—		$	—		$	—		$	823
Current	$	—		$	1,951		$	502		$	501		$	501		$	2		$	33
Noncurrent	$	21,825		$	21,325		$	20,567		$	20,434		$	21,379		$	21,313		$	21,409
Stockholders’ equity	$	8,444		$	8,306		$	8,109		$	9,656		$	9,473		$	9,345		$	15,610
Debt to debt-plus-stockholders’ equity ratio	72.1		%	73.7		%	72.2		%	68.4		%	69.8		%	69.5		%	58.8		%



Reconciliation of "Net Income (Loss)" to "Modified EBITDA", Non-GAAP "Adjusted EBITDA" and "Distributable Cash Flow"

	2018 Guidance									2019 Guidance
(Dollars in billions, except coverage ratios)	Low			Mid			High			Low			Mid			High

Net income (loss)	$	0.975		$	1.075		$	1.175		$	1.050		$	1.200		$	1.350
Provision (benefit) for income taxes				0.260									0.400
Interest expense				1.100									1.225
Equity (earnings) losses				(0.375		)							(0.450		)
Proportional Modified EBITDA of equity-method investments				0.725									0.825
Depreciation and amortization expenses and accretion expense associated with asset retirement obligations for nonregulated operations				1.750									1.800
Modified EBITDA	$	4.435		$	4.535		$	4.635		$	4.850		$	5.000		$	5.150

Adjustments included in Modified EBITDA:
Constitution Pipeline project development costs				0.002									—
(Gain) loss on early retirement of debt				0.007									—
Regulatory charges resulting from Tax Reform				0.004									—
Share of regulatory charges resulting from Tax Reform for equity-method investments				0.002									—
Total Adjustments included in Modified EBITDA				0.015									—
Adjusted EBITDA	$	4.450		$	4.550		$	4.650		$	4.850		$	5.000		$	5.150

Interest expense - net ⁽¹⁾				(1.150		)							(1.235		)
Maintenance capital expenditures ⁽²⁾	(0.575		)	(0.525		)	(0.475		)	(0.675		)	(0.625		)	(0.575		)
Cash taxes - (Payment) Benefit				—									0.075
Income attributable to noncontrolling interests (NCI) and other				(0.125		)							(0.115		)

Distributable cash flow (DCF)	$	2.600		$	2.750		$	2.900		$	2.900		$	3.100		$	3.300

Dividends & Distributions paid ⁽³⁾				(1.705		)							(1.850		)
Excess cash available after dividends & distributions	$	0.895		$	1.045		$	1.195		$	1.050		$	1.250		$	1.450

Dividend per share				$	1.36								$	1.52

Coverage ratio ⁽⁴⁾	1.52x			1.61x			1.70x			1.57x			1.68x			1.78x

(1) Includes proportionate share of interest expense of equity investments.
(2) Includes proportionate share of maintenance capital expenditures of equity investments.
(3) Includes WPZ distributions to public unitholders for 1Q and 2Q of 2018.
(4) Distributable cash flow / Dividends & distributions paid.



Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income
	2019
	Guidance
(Dollars in billions, except per-share amounts)	Midpoint

Net income (loss)	$	1.200
Less: Net income (loss) attributable to noncontrolling interests	0.115
Net income (loss) attributable to The Williams Companies, Inc.	$	1.085

Adjustments:
Adjustments included in Modified EBITDA	—
Adjustments below Modified EBITDA	—
Total adjustments	—
Less tax effect for above items	—
Adjustments for tax related items	—
Adjusted income available to common stockholders	$	1.085
Adjusted diluted earnings per common share	$	0.89
Weighted-average shares - diluted (billions)	1.217

WILLIAMS COMPANIES, INC. - FORM 8-K - EX-99.2 - October 31, 2018

Attached files

WILLIAMS COMPANIES, INC. Reports