10-QPeriod: Q2 FY2010

WILLIAMS COMPANIES, INC. Quarterly Report for Q2 Ended Jun 30, 2010

Filed July 29, 2010For Securities:WMB

Summary

Williams Companies, Inc. (WMB) reported on its Q2 2010 performance, with a key focus on the evolving landscape of environmental regulations. The company highlighted that existing risk factors, particularly those concerning environmental liabilities and compliance costs, remain largely unchanged but emphasized the potential for these costs to exceed expectations. This includes expenditures related to hazardous substances, spills, and emissions, as well as the growing implications of climate change and greenhouse gas (GHG) regulations. Investors should be aware of the potential financial impact of stricter environmental laws, including those related to climate change and hydraulic fracturing. While WMB currently does not anticipate these compliance costs to materially affect its financial condition or results of operations, future changes in legislation, regulation, or their interpretation could lead to increased operating and capital expenditures. Furthermore, uncertainty surrounding climate change policy and potential impacts on capital markets could affect the company's cost of and access to capital.

Financial Highlights

44 data points
Beta

Revenue

$2.29B

Net Income

$185.00M

8.1% Net Margin

EPS (Diluted)

$0.31

Total Assets

$24.95B

Cash & Equivalents

$1.60B

Free Cash Flow

$680.00M

Financial Statements
Beta
Revenue$2.29B
SG&A Expenses$123.00M
Operating Income$416.00M
Net Income$185.00M
EPS (Basic)$0.32
EPS (Diluted)$0.31
Shares Outstanding (Basic)584.41M
Shares Outstanding (Diluted)592.50M

Key Highlights

  • 1Environmental liabilities and compliance costs could exceed current expectations due to extensive regulations and potential future changes.
  • 2Climate change and greenhouse gas (GHG) regulations pose a potential financial risk, with increasing legislative and regulatory scrutiny.
  • 3The company is subject to extensive federal, state, and local environmental laws, requiring significant expenditures for compliance, cleanup, and remediation.
  • 4Failure to comply with environmental laws can result in penalties, remedial obligations, permit issues, and operational restrictions.
  • 5Legislation concerning GHG emissions, such as 'cap and trade' systems and EPA actions, could increase operational costs and impact results.
  • 6While not currently expected to have a material adverse effect, future changes in environmental interpretations or laws could lead to unexpected costs and potential operational shutdowns or alterations.
  • 7Proposed regulations for hydraulic fracturing could also adversely affect operations and those of its customers.

Frequently Asked Questions

Williams Companies faces risks from extensive environmental regulations governing the handling, storage, transportation, and disposal of hazardous substances, as well as spills and emissions. A significant evolving risk is related to climate change and greenhouse gas (GHG) emissions, with potential for increased compliance costs due to new legislation and regulatory actions.

While the company currently believes compliance with existing environmental laws will not materially affect its financial condition or results, future changes in laws, regulations, or their interpretations could lead to higher costs. This includes costs for operating, maintaining, and installing emission controls, as well as potential requirements to shut down or alter operations, which could result in material adverse consequences.

Legislative and regulatory responses to climate change and GHG emissions, such as 'cap and trade' systems or direct regulation under the Clean Air Act, could increase the costs associated with operating and maintaining facilities and installing new emission controls. If these costs cannot be recovered or passed through to customers, it could materially affect the company's results of operations. Additionally, market perception of climate change as a financial risk could impact the company's cost of and access to capital.

Yes, the company notes that certain environmental groups advocate for stricter regulation of hydraulic fracturing. While the outcome and specific provisions of any potential legislation are uncertain, new reporting, regulation, and permitting requirements in this area could adversely affect Williams Companies' operations and those of its customers.