01—Abstract
Summary
Summary of the 10-K filed February 27, 2013. Cited figures are marked; the original filing is the authoritative source.
Williams Companies, Inc. (WMB) reported its 2012 fiscal year results, showcasing a robust energy infrastructure business primarily focused on natural gas, NGLs, and olefins.
The company demonstrated significant growth through strategic acquisitions, notably the Caiman Eastern Midstream and Laser Gathering System assets, which bolstered its presence in the Marcellus Shale. Furthermore, WMB expanded its footprint by investing in Access Midstream Partners, a move that diversified its midstream operations across several key shale plays. Financially, WMB highlighted its commitment to shareholder returns by increasing its quarterly dividend and signaling expectations for continued growth.
The company's investments and expansion projects, particularly in natural gas transmission and midstream infrastructure, are positioned to capitalize on North America's abundant hydrocarbon resources. Despite facing some commodity price volatility, WMB's strategy emphasizes an increasing proportion of fee-based revenues, aiming for more stable cash flows and continued operational excellence.
02—Key points
Key Highlights
- Williams Partners (WPZ) is a key consolidated subsidiary, representing a significant portion of WMB's operations, including interstate natural gas pipelines and midstream assets.
- The company completed strategic acquisitions in the Marcellus Shale (Caiman Eastern Midstream, Laser Gathering System) and a significant investment in Access Midstream Partners to enhance its midstream capabilities.
- WMB reported an increase in its quarterly dividend, signaling a commitment to returning value to shareholders and expecting further dividend growth.
- Significant expansion projects were underway or planned for natural gas pipelines, such as the Constitution Pipeline and various Transco system expansions, to serve growing markets.
- The company's business segments are Williams Partners, Williams NGL & Petchem Services, and Access Midstream Partners, reflecting a diversified energy infrastructure portfolio.
- WMB addressed operational and financial performance, noting impacts from commodity price fluctuations, particularly in NGL margins, while highlighting the growing importance of fee-based revenues.
- The company maintained strong liquidity and accessed capital markets through debt and equity offerings to fund growth initiatives and acquisitions.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Williams Companies, Inc. kept $0.11.
- Revenue$7.49B100.0%
- Cost of revenue−$3.50B46.7%
- Gross profit$3.99B53.3%
- Operating costs−$2.38B31.8%
- Operating income$1.61B21.5%
- Interest, other & tax−$753.0M10.1%
- Net income$859.0M11.5%
Where FY2012 revenue went
$7.49B- Cost of revenue: $3.50B, 47% of revenue
- Other operating costs: $1.81B, 24% of revenue
- Net income: $859.0M, 11% of revenue
- SG&A: $571.0M, 7.6% of revenue
- Interest, other & tax: $753.0M, 10% of revenue
Kept 11% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 27, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $7.49B$7.93B | −5.6% |
| Cost of Revenue | $3.50B$3.93B | −11.1% |
| Gross Profit | $3.99B$4.00B | −0.2% |
| SG&A Expenses | $571.00M$477.00M | +19.7% |
| Operating Expenses | $5.87B$6.06B | −3.1% |
| Operating Income | $1.61B$1.87B | −13.7% |
| Net Income | $859.00M$376.00M | +128.5% |
| EPS (Basic) | $1.39$0.64 | +117.2% |
| EPS (Diluted) | $1.37$0.63 | +117.5% |
| Shares Outstanding (Basic) | 619.79M588.55M | +5.3% |
| Shares Outstanding (Diluted) | 625.49M598.17M | +4.6% |
05—Questions
Frequently Asked Questions
What is Williams Companies' primary business focus?
Williams Companies, Inc. is primarily an energy infrastructure company focused on connecting North America's significant hydrocarbon resource plays to growing markets for natural gas, NGLs (natural gas liquids), and olefins.
How did Williams Companies (WMB) grow its business in 2012?
WMB grew its business through strategic acquisitions, including the Caiman Eastern Midstream and Laser Gathering System assets, and a significant investment in Access Midstream Partners. The company also continued to invest in expanding its existing midstream and pipeline infrastructure.
What is the significance of Williams Partners L.P. (WPZ) to WMB?
Williams Partners L.P. (WPZ) is a significant consolidated master limited partnership subsidiary of WMB. It represents a substantial portion of WMB's operations, including interstate natural gas pipelines and midstream assets, and is a key driver of the company's cash flow and dividend distributions.
How did WMB manage its financial performance in 2012, considering market conditions?
WMB's financial performance in 2012 was impacted by commodity price volatility, particularly lower NGL margins. However, the company offset some of these effects through increased fee-based revenues from its pipeline expansions and acquisitions, and a strategic shift towards a more fee-based business mix. The company also increased its dividend, reflecting confidence in its business model and future cash flow generation.
06—Continue