10-KPeriod: FY2007

WILLIAMS COMPANIES, INC. Annual Report, Year Ended Dec 31, 2007

Filed February 26, 2008For Securities:WMB

Summary

Williams Companies, Inc. (WMB) in its February 26, 2008, 10-K filing reported strong performance for the fiscal year ended December 30, 2007. The company highlighted significant growth in its natural gas production, a 21% increase year-over-year, and the successful raising of its credit ratings to investment grade following the sale of its power assets. Key strategic initiatives included the initiation of a $1 billion stock repurchase program and the formation of new master limited partnerships, Williams Pipeline Partners L.P. (WMZ) and continued growth of Williams Partners L.P. (WPZ). Financially, WMB saw a substantial increase in income from continuing operations to $847 million, up from $347 million in the prior year, driven by strong performance across its Exploration & Production, Gas Pipeline, and Midstream segments. This robust financial health, coupled with strategic capital allocation, positions WMB for continued growth in its core natural gas businesses. The company's focus on disciplined growth and shareholder value creation was evident throughout the report.

Financial Highlights

26 data points
Beta

Revenue

$10.24B

Net Income

$990.00M

9.7% Net Margin

EPS (Diluted)

$1.63

Cash & Equivalents

$1.70B

Free Cash Flow

$2.24B

Financial Statements
Beta
Revenue$10.24B
SG&A Expenses$461.00M
Operating Income$1.79B
Net Income$990.00M
EPS (Basic)$1.66
EPS (Diluted)$1.63
Shares Outstanding (Basic)596.17M
Shares Outstanding (Diluted)609.87M

Key Highlights

  • 1Credit ratings upgraded to investment grade following the sale of substantially all power assets.
  • 2Natural gas production increased by 21% for the year, with total year-end proved domestic natural gas reserves reaching 4.14 Tcfe.
  • 3Initiated a $1 billion stock repurchase program, repurchasing approximately $526 million (16 million shares) in 2007.
  • 4Formed Williams Pipeline Partners L.P. (WMZ) and completed its IPO in January 2008.
  • 5Williams Partners L.P. (WPZ) acquired Wamsutter LLC for $750 million, financed partly through a public equity offering.
  • 6Successfully executed rate cases for Transcontinental Gas Pipe Line Corporation (Transco) and Northwest Pipeline GP (Northwest Pipeline), leading to increased earnings.
  • 7Net income for continuing operations increased significantly to $847 million from $347 million in the prior year.

Frequently Asked Questions

Williams' strong financial performance in 2007 was driven by a combination of factors, including increased natural gas production volumes (up 21%), higher net realized average prices, successful rate case settlements for its Gas Pipeline segment, and strong NGL margins in its Midstream segment. The sale of its power business also contributed to reduced risk and complexity. These factors led to a significant increase in income from continuing operations to $847 million.

In 2007, Williams invested approximately $2.8 billion in capital expenditures, with a significant portion ($1.7 billion) allocated to its Exploration & Production segment to drive growth. The company also returned capital to shareholders by initiating a $1 billion stock repurchase program, having repurchased approximately $526 million of its stock during the year. Additionally, the Board of Directors approved an 11% increase in the quarterly dividend.

Williams made several strategic moves in 2007 to enhance its structure and fuel future growth. These included forming Williams Pipeline Partners L.P. (WMZ) and completing its IPO in early 2008, and continuing the growth of Williams Partners L.P. (WPZ) through significant asset drop-down transactions. The company also successfully resolved rate cases for its major pipeline systems and raised its credit ratings to investment grade, which is expected to improve access to capital and lower borrowing costs.