01—Abstract
Summary
Summary of the 10-K filed February 28, 2012. Cited figures are marked; the original filing is the authoritative source.
Williams Companies, Inc. (WMB) reported strong financial performance for the fiscal year ended December 31, 2011, marked by a significant increase in revenues and income from continuing operations.
A key strategic move was the tax-free spin-off of its exploration and production business, WPX Energy, Inc. (WPX), completed on December 31, 2011. This separation streamlined Williams' focus on its core energy infrastructure assets, primarily its master limited partnership, Williams Partners L.P. (WPZ).
The company also highlighted a strategic initiative to double its quarterly dividends from $0.125 to $0.25a per share, signaling confidence in its future cash flows, largely driven by expected growth from its interest in WPZ. Significant capital investments were made in expanding pipeline capacity, particularly in the Marcellus Shale region and the Gulf of Mexico, to support growing energy demand. Despite a volatile economic environment, Williams maintained robust liquidity and expressed optimism for continued growth and dividend increases in 2012.
02—Key points
Key Highlights
- Completed a tax-free spin-off of its exploration and production business, WPX Energy, Inc., on December 31, 2011, focusing the company on energy infrastructure.
- Doubled quarterly dividends from $0.125 to $0.25 per share, with expectations for continued increases in 2012.
- Reported a significant increase in revenues and income from continuing operations, driven by higher commodity prices and improved fee revenues in its Williams Partners segment.
- Invested in pipeline expansions, notably in the Marcellus Shale and Gulf of Mexico, to enhance capacity and serve growing markets.
- Maintained strong liquidity with $889 million in cash and cash equivalents and $2.9 billion in available credit capacity as of December 31, 2011.
- Williams Partners L.P. (WPZ), in which Williams holds a significant interest, completed key acquisitions and project expansions, contributing to the overall growth strategy.
- Outlook for 2012 includes planned capital expenditures of at least $3.4 billion, underscoring a commitment to growth and infrastructure development.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Williams Companies, Inc. kept $0.05.
- Revenue$7.93B100.0%
- Cost of revenue−$3.93B49.6%
- Gross profit$4.00B50.4%
- Operating costs−$2.13B26.8%
- Operating income$1.87B23.5%
- Interest, other & tax−$1.49B18.8%
- Net income$376.0M4.7%
Where FY2011 revenue went
$7.93B- Cost of revenue: $3.93B, 50% of revenue
- Other operating costs: $1.65B, 21% of revenue
- Interest, other & tax: $1.49B, 19% of revenue
- Net income: $376.0M, 4.7% of revenue
- SG&A: $477.0M, 6.0% of revenue
Kept 4.7% as net incomeNet income $376.0M · 4.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed February 28, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $7.93B$6.64B | +19.5% |
| Cost of Revenue | $3.93B$3.26B | +20.7% |
| Gross Profit | $4.00B$3.38B | +18.3% |
| SG&A Expenses | $477.00M$504.00M | −5.4% |
| Operating Expenses | $6.06B$5.23B | +15.9% |
| Operating Income | $1.87B$1.41B | +32.7% |
| Interest Expense | $599.00M$614.00M | −2.4% |
| Net Income | $376.00M-$1.10B | +134.3% |
| EPS (Basic) | $0.64$-1.88 | +134.0% |
| EPS (Diluted) | $0.63$-1.86 | +133.9% |
| Shares Outstanding (Basic) | 588.55M584.55M | +0.7% |
| Shares Outstanding (Diluted) | 598.17M590.70M | +1.3% |
05—Questions
Frequently Asked Questions
What was the most significant strategic event for Williams Companies in 2011?
The most significant strategic event was the completion of the tax-free spin-off of its exploration and production business, WPX Energy, Inc., on December 31, 2011. This allowed Williams to focus its resources and strategy on its core energy infrastructure assets.
How did Williams Companies' dividend policy change in 2011?
Williams Companies doubled its quarterly dividend from $0.125 per share in Q4 2010 to $0.25 per share in Q4 2011. The company also projected further quarterly dividend increases in 2012, indicating confidence in its cash flow generation.
What were the key growth drivers and investments for Williams Companies in 2011?
Growth was driven by the strong performance of its Williams Partners L.P. segment, which includes natural gas pipelines and midstream businesses. Key investments included expanding pipeline capacity in the Marcellus Shale and Gulf of Mexico regions, as well as strategic acquisitions and joint ventures within Williams Partners.
What is the company's outlook for 2012?
Williams Companies anticipates continued growth in 2012, supported by strong operating cash flows and planned capital expenditures of at least $3.4 billion. The company expects to benefit from the ongoing demand for midstream and pipeline infrastructure, particularly for natural gas, and aims to continue increasing its dividends.
06—Continue