10-QPeriod: Q1 FY2012

WILLIAMS COMPANIES, INC. Quarterly Report for Q1 Ended Mar 31, 2012

Filed May 1, 2012For Securities:WMB

Summary

Williams Companies, Inc. (WMB) reported solid financial results for the first quarter of 2012, demonstrating year-over-year growth in key financial metrics. Total revenues increased by 8% to $2.019 billion, while operating income saw a significant jump of 20% to $527 million. Net income attributable to The Williams Companies, Inc. rose to $423 million ($0.70 per share), up from $321 million ($0.55 per share) in the prior year's first quarter. The company's performance was bolstered by strong results from its Williams Partners segment, driven by increased fee revenues and higher NGL margins. The Midstream Canada & Olefins segment also contributed positively with improved olefin production margins. During the quarter, WMB completed a strategic acquisition in the Marcellus Shale, expanding its footprint in a key growth area. The company also announced its intention to increase its quarterly dividend by nearly 55% for 2012, signaling confidence in its future cash flows and commitment to shareholder returns.

Financial Highlights

48 data points
Beta

Revenue

$2.02B

52.6% Gross Margin

Net Income

$423.00M

21.0% Net Margin

EPS (Diluted)

$0.70

Total Assets

$17.79B

Cash & Equivalents

$1.10B

Free Cash Flow

$434.00M

Financial Statements
Beta
Revenue$2.02B
Cost of Revenue$957.00M
Gross Profit$1.06B
SG&A Expenses$129.00M
Operating Expenses$1.49B
Operating Income$527.00M
Net Income$423.00M
EPS (Basic)$0.71
EPS (Diluted)$0.70
Shares Outstanding (Basic)593.23M
Shares Outstanding (Diluted)600.52M

Key Highlights

  • 1Total revenues increased 8% to $2.019 billion in Q1 2012 compared to Q1 2011.
  • 2Operating income rose 20% to $527 million in Q1 2012.
  • 3Net income attributable to WMB was $423 million, or $0.70 per diluted share, an increase from $321 million, or $0.55 per diluted share, in Q1 2011.
  • 4Williams Partners segment revenue increased due to higher fee revenues and NGL margins.
  • 5Midstream Canada & Olefins segment profit improved due to higher olefin production margins.
  • 6The company completed the acquisition of the Laser Gathering System in the Marcellus Shale in February 2012.
  • 7Planned total 2012 dividends are expected to be $1.20 per share, a 55% increase over 2011.

Frequently Asked Questions

Revenue growth was primarily driven by an increase in marketing revenues at Williams Partners due to higher volumes, partially offset by lower average NGL prices. Fee revenues also increased at Williams Partners, benefiting from higher gathering, processing, and transportation fees. Additionally, Midstream Canada & Olefins saw increased ethylene revenues due to higher sales prices and volumes.

The acquisition of the Laser Gathering System in the Marcellus Shale in February 2012 is expected to enhance Williams Partners' strategic platform for expansion in the region. While the acquisition's direct impact on Q1 2012 revenues and earnings was not material, it positions the company for future growth in a key natural gas liquids-rich area.

The company's Board of Directors approved a regular quarterly dividend, and total expected dividends for 2012 are projected to be $1.20 per share, representing an increase of almost 55% compared to 2011. This increase signals management's confidence in the company's financial health and its commitment to returning value to shareholders.

Key risks include sustained reductions in energy commodity prices, lower than expected distributions from Williams Partners, lower cash flow from operations from Midstream Canada & Olefins, counterparty credit and performance risk, decreased volumes from third parties, and changes in the political and regulatory environments.