Summary
Williams Companies, Inc. (WMB) reported a net loss of $1.097 billion for the fiscal year ended December 31, 2010. This loss was significantly impacted by substantial impairment charges of $1.692 billion recognized primarily in its Exploration & Production segment, including a $1 billion goodwill impairment and $678 million for producing properties and unproved reserves. These impairments were driven by declining forward natural gas prices. Despite the overall loss, the company experienced revenue growth across its segments due to higher commodity prices and increased volumes in certain areas, particularly in the midstream business. Looking ahead, Williams announced a significant strategic decision to separate its exploration and production business into a new, publicly traded company through an initial public offering in Q3 2011 and a subsequent tax-free spinoff in 2012. This move aims to unlock shareholder value and allow Williams to focus on its premier natural gas infrastructure business. Additionally, the company intends to increase its quarterly dividend by 60% for the first quarter of 2011, signaling management's confidence in its future performance and cash flow generation.
Financial Highlights
50 data points| Revenue | $6.64B |
| Cost of Revenue | $3.26B |
| Gross Profit | $3.38B |
| SG&A Expenses | $504.00M |
| Operating Expenses | $5.23B |
| Operating Income | $1.41B |
| Interest Expense | $614.00M |
| Net Income | -$1.10B |
| EPS (Basic) | $-1.88 |
| EPS (Diluted) | $-1.86 |
| Shares Outstanding (Basic) | 584.55M |
| Shares Outstanding (Diluted) | 590.70M |
Key Highlights
- 1Williams Companies reported a significant net loss of $1.097 billion for the fiscal year 2010, primarily due to $1.692 billion in impairments (goodwill and long-lived assets) within its Exploration & Production segment.
- 2The company announced a plan to separate its exploration and production business into a new publicly traded entity via an IPO in Q3 2011, followed by a tax-free spinoff in 2012, to focus on its natural gas infrastructure assets.
- 3Williams intends to increase its quarterly dividend by 60% to $0.20 per share for Q1 2011, demonstrating a commitment to returning capital to shareholders.
- 4Revenue saw an increase to $9.616 billion from $8.255 billion in 2009, driven by higher commodity prices and volumes in the Williams Partners and Other segments, although natural gas prices remained low.
- 5Capital expenditures for 2010 were substantial, totaling $4.296 billion across investing activities, with significant investments in Exploration & Production ($2.8 billion) and Williams Partners ($1 billion).
- 6The company ended 2010 with $795 million in cash and cash equivalents and $1.508 billion in available credit capacity under its credit facilities, maintaining a strong liquidity position.
- 7Williams's gas pipeline business, particularly Transco, is expanding capacity with several projects underway, including the 85 North expansion and the Mid-South expansion, aimed at serving growing markets.