10-QPeriod: Q3 FY2008

WILLIAMS COMPANIES, INC. Quarterly Report for Q3 Ended Sep 30, 2008

Filed November 6, 2008For Securities:WMB

Summary

Williams Companies, Inc. (WMB) reported its third-quarter 2008 results, showcasing a significant increase in income from continuing operations compared to the prior year, driven by higher natural gas prices and increased production volumes in its Exploration & Production segment. Despite the challenging macroeconomic environment characterized by financial market instability and declining energy prices, the company demonstrated resilience. The company maintained a strong liquidity position with substantial cash reserves and available credit facilities, and it has no significant debt maturities until 2011, providing financial flexibility. Management is actively managing capital expenditures and operational costs in response to market conditions. While the company faces risks related to commodity price volatility, counterparty credit, and regulatory changes, it is employing hedging strategies and disciplined investment approaches to mitigate these challenges.

Financial Highlights

23 data points
Beta

Revenue

$3.20B

Net Income

$366.00M

11.4% Net Margin

EPS (Diluted)

$0.62

Cash & Equivalents

$1.52B

Free Cash Flow

$840.00M

Financial Statements
Beta
Revenue$3.20B
SG&A Expenses$133.00M
Operating Income$689.00M
Net Income$366.00M
EPS (Basic)$0.63
EPS (Diluted)$0.62
Shares Outstanding (Basic)577.45M
Shares Outstanding (Diluted)589.14M

Key Highlights

  • 1Income from continuing operations for the nine months ended September 30, 2008, increased to $1.204 billion, a significant rise from $563 million in the same period of 2007, primarily driven by higher net realized average prices and strong natural gas production growth in the Exploration & Production segment.
  • 2Total revenues for the nine months ended September 30, 2008, increased to $10.22 billion from $8.052 billion in the prior year, reflecting growth across most segments.
  • 3The company maintained a strong liquidity position, with $1.524 billion in cash and cash equivalents and nearly $2.6 billion in available capacity under its credit facilities as of September 30, 2008.
  • 4Capital expenditures for 2008 were estimated between $3.375 billion and $3.575 billion, with a significant portion allocated to the Exploration & Production segment.
  • 5The company's Exploration & Production segment experienced a 42% increase in domestic net realized average prices and a 21% increase in average daily domestic production for the nine months ended September 30, 2008, compared to the prior year.
  • 6Hurricanes Gustav and Ike impacted operations in the third quarter of 2008, resulting in an estimated decrease in segment profit of $50 million to $65 million.
  • 7The company completed its $1 billion stock repurchase program in July 2008.

Frequently Asked Questions

Williams Companies, Inc. saw a substantial improvement in its financial performance for the first nine months of 2008 compared to the same period in 2007. Income from continuing operations more than doubled, rising to $1.204 billion from $563 million. This growth was driven by higher commodity prices and increased production volumes, particularly in the Exploration & Production segment.

As of September 30, 2008, the company reported a solid liquidity position with $1.524 billion in cash and cash equivalents and approximately $2.6 billion in available capacity under its credit facilities. It has no significant debt maturities until 2011. Management is actively reducing capital expenditures and managing operational costs in response to market volatility. The company utilizes hedging strategies and has credit protection measures in place to mitigate risks associated with commodity prices and counterparty credit.

The company experienced a negative impact from Hurricanes Gustav and Ike in the third quarter of 2008, particularly on its Midstream segment. It estimated a reduction in segment profit of $50 million to $65 million for the third quarter due to downtime, repair costs, and insurance deductibles. Further reductions of $10 million to $20 million were anticipated for the fourth quarter.

Yes, Williams Companies, Inc. completed its $1 billion stock repurchase program in July 2008. Additionally, in January 2008, Williams Pipeline Partners L.P. completed its initial public offering, in which WMB now holds approximately a 47.7% interest. The company also made strategic acquisitions of leasehold acreage and producing properties in the Piceance and Fort Worth basins during 2008.