Williams Reports Year-End 2011 Financial Results
TULSA, Okla., Feb 22, 2012 (BUSINESS WIRE) --
Copyright Business Wire 2012
--Adjusted Net Income for 2011 is $929 Million, $1.55 per Share; Includes Adjusted Results of Former E&P Business
--2011 Adjusted Income from Continuing Operations is $1.23 per Share, Up 35%
--Fee-based Business Growth at Williams Partners, Strong Margins Drive Improved 2011 Adjusted Results
--Williams Partners' Laser Acquisition, Higher Expected Ethylene Margins Drive Increase in Guidance
--Dividend Growth Accelerated - March 2012 Dividend More Than Double 2011 Level
--2012 Full-year Planned Dividend of $1.09 Up 41% Over 2011; 10-15% Dividend Growth Expected in 2013
(NYSE: WMB) announced 2011 unaudited net income attributable to Williams
of $376 million, or $0.63 per share on a diluted basis, compared with a
net loss of $1,097 million, or a loss of $1.86 per share on a diluted
basis for 2010.
* A schedule reconciling income (loss) from continuing operations to
adjusted income from continuing operations (non-GAAP measures) is
available at www.williams.com
and as an attachment to this press release.
Net income for 2011 and 2010 reflect significant losses from
discontinued operations. These losses were primarily due to significant
non-cash property impairment and other charges associated with Williams'
former exploration and production business.
Williams reported 2011 income from continuing operations of $803
million, or $1.34 per share, compared with income from continuing
operations of $104 million, or $0.17 per share in 2010. Higher fee-based
revenues and higher natural gas liquid (NGL) margins at Williams
Partners along with lower early debt retirement costs drove the
significant increase in income from continuing operations in 2011.
In 2011, Williams recorded pre-tax impairment charges to discontinued
operations of approximately $576 million associated with certain natural
gas properties of the former exploration and production business as well
as a $179 million impairment of Williams' investment in the former
exploration and production business at the time of the spinoff.
The full-year 2010 period included charges to discontinued operations of
approximately $1 billion for an impairment of goodwill and pre-tax
impairment charges of $678 million related to certain natural gas
properties, both related to the former exploration and production
business. Full-year 2010 also included $645 million of pre-tax charges
in first-quarter 2010 in conjunction with the strategic restructuring
that transformed Williams Partners L.P. (NYSE: WPZ) into a leading
diversified master limited partnership.
For fourth quarter 2011, Williams reported a net loss of $444 million,
or a loss of $0.74 per share, compared with net income of $174 million,
or $0.29 per share for fourth quarter 2010. The net loss in the fourth
quarter was due to the previously noted impairment charges associated
with the former exploration and production business and $271 million of
early debt retirement costs.
Prior-period results throughout this release have been recast to reflect
the separation of Williams' former exploration and production business
on Dec. 31, 2011. The former exploration and production businesses'
results are being reported in discontinued operations.
Adjusted Net Income
Williams' adjusted net income for 2011 was $929 million, or $1.55 per
share. This measure is presented on a basis comparable to 2011 earnings
guidance released on Nov. 1, 2011, prior to the WPX
Energy spin-off. This amount includes the adjusted results of
Williams' former exploration and production business.
Adjusted Income from Continuing Operations
Adjusted income from continuing operations was $734 million, or $1.23
per share, for 2011, compared with $537 million, or $0.91 per share for
2010. This measure reflects reporting WPX Energy's results in
discontinued operations. It does not correspond with 2011 earnings
guidance provided on Nov. 1, 2011.
For fourth quarter 2011, Williams' adjusted income from continuing
operations was $214 million, or $0.36 per share, compared with $180
million, or $0.30 per share for fourth quarter 2010.
The significant increase in the adjusted income from continuing
operations for 2011 was due to improved results in both the Williams
Partners and Midstream Canada & Olefins segments. There is a more
detailed description of the business results later in this press release.
Adjusted net income and adjusted income from continuing operations
reflect the removal of items considered unrepresentative of ongoing
operations and are non-GAAP measures. Reconciliations to the most
relevant GAAP measures are attached to this news release.
Armstrong, Williams' president and chief executive officer, made the
"Our infrastructure businesses performed extremely well in 2011, driving
a 35-percent increase in adjusted EPS for the year and generating more
than $2 billion in adjusted segment profit.
"We were also very successful in 2011 in both signing new business and
making significant progress on major expansion projects across our
businesses. On top of all of that, we completed the separation of our
E&P business, transforming Williams into a high-dividend, high-growth
energy infrastructure company.
"Our full-year 2012 planned dividend to shareholders will be 41 percent
higher than the full-year 2011 level, and we continue to expect robust
distributions from Williams Partners that will drive dividend growth at
"We're also expecting 12 percent adjusted EPS growth through 2013
despite an expectation of lower NGL margins and we're working on a
number of large-scale projects that we expect to drive significant
growth beyond the guidance period.
"Williams Partners is well on its way to creating a 3 Bcf/d natural gas
supply hub in northeast Pennsylvania; it also has other major projects
underway in the deepwater Gulf of Mexico and along the Transco pipeline.
We also have significant expansions underway in our olefins business in
both Canada and the U.S."
Williams Partners' Laser Acquisition Drives Increase in Guidance
Williams is increasing its capital expenditure and adjusted segment
profit guidance for 2012-13 to reflect Williams Partners' acquisition
of the Laser Northeast Gathering System. Capital expenditure guidance
for 2012-13 has also been updated to reflect Williams Partners' Constitution
Pipeline project. Higher expected ethylene margins at Midstream
Canada & Olefins also contributed to the increased segment profit
guidance in 2013.
Williams' updated assumptions for certain energy commodity prices for
2012-13 and the corresponding guidance for the company's earnings and
capital expenditures are displayed in the table below.
(1) Average NGL margins are for Williams Partners' midstream
business; they do not reflect Midstream Canada & Olefins' business. (2)
Composite frac spread is based on Henry Hub natural gas and Mont Belvieu
NGLs. (3) Adjusted Segment Profit, Adjusted Segment Profit +
DD&A, and Adjusted Diluted EPS are adjusted to remove items considered
unrepresentative of ongoing operations and are non-GAAP measures.
Reconciliations to the most relevant GAAP measures are attached to this
Business Segment Results
Williams' business segments for financial reporting are Williams
Partners, Midstream Canada & Olefins, and Other. The Williams Partners
segment includes the consolidated results of Williams Partners L.P., and
Midstream Canada & Olefins includes the results of Williams' Canadian
midstream and domestic olefins business.
* A schedule reconciling income from continuing operations to
adjusted income from continuing operations (non-GAAP measures) is
available at www.williams.com
and as an attachment to this press release.
Williams Partners is focused on natural gas transportation, gathering,
treating, processing and storage; NGL fractionation; and oil
For 2011, Williams Partners reported segment profit of $1.90 billion,
compared with $1.57 billion for 2010. For fourth quarter 2011, Williams
Partners reported segment profit of $517 million, compared with $418
million for the same period in 2010.
Higher NGL margins and higher fee-based revenues in the partnership's
midstream business, as well as improved results in the gas pipeline
business, drove the significant improvement in both the full-year and
The improvement in Williams Partners' gas pipeline business was
primarily due to increased revenue from expansion projects placed into
service in 2010 and 2011.
Fee-based revenues in the partnership's midstream business increased by
12 percent in 2011. This improvement was driven by new gathering
business in the Marcellus Shale, increased throughput on the Perdido
Norte gas and oil pipelines in the Gulf of Mexico and a rate increase in
the Piceance Basin associated with an agreement executed in November
Full-year per-unit NGL margins for 2011 were $0.83 per gallon, an
increase of 46 percent over the full-year 2010 amount of $0.57 per
There is a more detailed description of Williams Partners' interstate
gas pipeline and midstream business results and outlook in the
partnership's year-end 2011 financial results news release, which is
also being issued today.
Midstream Canada & Olefins
Midstream Canada & Olefins includes Williams' operations in the United
States and Canada focused on recovering and producing ethylene,
propylene, NGLs and other related products.
Midstream Canada & Olefins reported segment profit of $296 million for
2011, compared with $172 million for 2010. For fourth quarter 2011,
Midstream Canada & Olefins reported segment profit of $77 million,
compared with $49 million for fourth quarter 2010.
Higher Canadian NGL margins from butylene/butane mix products helped
drive the improvement in the full-year and fourth-quarter results. The
separate products produced by the company's Canadian butylene/butane
splitter placed in service in August 2010 provide a higher combined
per-unit margin than the butylene/butane mix product sold previously.
Additionally, product sales prices and sales volumes increased.
Higher per-unit margins on Canadian propane and propylene and Geismar
ethylene also contributed to the improved results in both 2011 periods.
Fourth-quarter 2011 segment profit also benefited from a $19 million
adjustment related to a litigation matter.
Midstream Canada & Olefins has two major expansion projects in Canada
and one in the U.S. currently under way.
Boreal Pipeline, which is a 12-inch diameter pipeline in Canada that
will transport recovered NGLs and olefins from the extraction plant in
Fort McMurray to the fractionator in Redwater, is expected to be placed
into service in the second quarter of this year. An ethane recovery
project is also under way in Canada that will enable Williams to
initially recover and process 10,000 barrels per day of an
ethane/ethylene mix in Canada. That project is expected to be placed
into service in 2013.
Williams is also in the process of expanding
its Geismar olefins production facility. The expansion is expected to
increase the facility's ethylene production capacity by 600 million
pounds per year to a new annual capacity of 1.95 billion pounds. The
expansion is expected to be placed into service in 2013.
Year-end Materials to be Posted Shortly; Q&A Webcast Scheduled for
Williams' year-end financial results package should be posted shortly at www.williams.com.
The package will include the data book and analyst package, and the
investor presentation with a recorded commentary from CEO Alan Armstrong.
The company will host the year-end Q&A live webcast on Thursday, Feb. 23
at 9:30 a.m. EST. A limited number of phone lines will be available at
(800) 967-7144. International callers should dial (719) 325-2207.
A link to the live webcast of the event, as well as replays in both
streaming and downloadable podcast formats, will be available at www.williams.com.
The company plans to file its 2011 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.
This press release includes certain financial measures -- adjusted
segment profit, adjusted earnings and adjusted 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 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 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
earnings nor adjusted per share measures are intended to represent an
alternative to segment profit, net income or earnings per share. They
should not be considered in isolation or as substitutes for a measure of
performance prepared in accordance with United States generally accepted
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 and NGL production of more than 200,000 barrels per day.
Williams owns a 72 percent ownership interest in 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. The company's headquarters is in
Tulsa, Okla. More information is available at www.williams.com.
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or from our website at www.williams.com.