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WILLIAMS COMPANIES, INC. Annual Report, Year Ended Dec 31, 1993

Filing Date
Filed March 29, 1994
Period End
December 31, 1993
Security
WMB
In the record · 2016–202610-K1110-Q328-K153

WMB filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 153 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Aug ’18Aug ’18
  2. Leadership change8-K · Feb ’20Feb ’20
  3. Leadership change8-K · Feb ’22Feb ’22
  4. Material agreement8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed March 29, 1994. Cited figures are marked; the original filing is the authoritative source.

The Williams Companies (NYSE/PSE: WMB) reported a strong 1993 recovery in earnings.

Income before extraordinary items rose to $231.8 milliona, or $2.16 per fully diluted share, up from $128.3 million ($1.25) in 1992, while revenues were roughly flat at $2,438.2 million versus $2,461.3 million. Results were helped by $97.5 million in gains on asset sales (including the Louisiana intrastate pipeline sale for $170 million and a Coal Seam Gas Royalty Trust unit sale), and by WilTel and Northwest Pipeline improvements. Operating profit rose to $411.0 million from $295.0 million.

Stockholders' equity grew 13.6% to $1,724.0 million, and long-term debt fell to $1,604.8 millionb, lowering the long-term debt-to-capitalization ratio to 48.2% from 52.6%. The company's cash position weakened: cash and equivalents fell to $64.3 million from $212.3 million, and the company carried a net working-capital deficit of $106 million, consistent with its historical practice of minimal cash and reliance on bank facilities. Operating cash flow improved to $349.5 million, while capital expenditures of $529.1 million were significant and 1994 budgeted capex is about $750 million, implying continued heavy investment and likely reliance on external financing or asset sales such as the planned partial sale of Northern Border interests and remaining Trust units.

Key risk factors include regulatory uncertainty under FERC Order 636 restructuring, the loss of a large customer concentration at Williams Natural Gas (Western Resources, about 73% of its revenues, now being split with Southern Union on one-year contracts), a pending $203 millionc-plus take-or-pay claim, a WilTel large carrier migrating traffic off its network in 1994, and environmental cleanup accruals of roughly $45 million. Management indicates it does not anticipate needing additional financing, though it has a $600 million bank facility and a $400 million shelf registration available.

02—Key points

Key Highlights

  1. Net income before extraordinary items rose 81% to $231.8 million ($2.16 fully diluted EPS) from $128.3 million ($1.25) in 1992.
  2. Total revenues were roughly flat at $2.44 billion, while operating profit increased 39% to $411.0 million.
  3. Gains on asset sales of $97.5 million, including the $170 million Louisiana intrastate pipeline sale, boosted 1993 earnings.
  4. Long-term debt declined to $1.60 billion and the debt-to-capitalization ratio improved to 48.2% from 52.6%.
  5. Cash fell sharply to $64.3 million and the company ran a $106 million working-capital deficit, though operating cash flow rose to $349.5 million.
  6. Planned 1994 capital expenditures of about $750 million signal continued heavy investment in pipeline and gathering expansions.
  7. Concentration risk: Williams Natural Gas depended on one customer for 73% of its 1993 operating revenues, now split between two one-year contracts.

03—Questions

Frequently Asked Questions

  1. How did Williams perform financially in 1993?

    Income before extraordinary items was $231.8 million, or $2.16 per fully diluted share, compared with $128.3 million, or $1.25, in 1992. Revenues were about $2.44 billion, nearly flat year over year, while operating profit rose to $411.0 million. Gains on asset sales of $97.5 million contributed meaningfully to the improvement.

  2. Is Williams' balance sheet getting stronger or weaker?

    Mixed. Long-term debt fell to $1.6 billion from $1.7 billion and stockholders' equity rose 13.6% to $1.72 billion, improving the debt-to-capitalization ratio to 48.2%. However, cash dropped to $64.3 million from $212.3 million and the company reported a $106 million working-capital deficit, which it says is typical given its cash-management approach.

  3. What are the main risks facing Williams' business?

    Key risks include FERC regulatory uncertainty following Order 636 restructuring and pending rate cases, customer concentration at Williams Natural Gas (Western Resources, 73% of its revenues, now being split with Southern Union on one-year contracts), a $203 million-plus take-or-pay claim from a major gas supplier, environmental cleanup liabilities of about $45 million, and a WilTel customer migrating significant traffic off its network in 1994.

  4. How will Williams fund its planned 1994 investments?

    Management expects to use its $600 million bank credit facility and public debt or equity offerings, and has a $400 million shelf registration in place. It also said it would consider selling part of its Northern Border Pipeline interest and the remaining 3.6 million Coal Seam Gas Royalty Trust units. Management stated it does not anticipate needing additional financing, though it believes such financing could be obtained on reasonable terms if required.

04—Continue

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