10-QPeriod: Q2 FY2014

WILLIAMS COMPANIES, INC. Quarterly Report for Q2 Ended Jun 30, 2014

Filed July 31, 2014For Securities:WMB

Summary

Williams Companies, Inc. (WMB) reported its second quarter 2014 financial results, showing a decrease in total revenues to $1.678 billion from $1.767 billion in the prior year's quarter. This was primarily driven by a decline in product sales, while service revenues saw a modest increase. Net income attributable to The Williams Companies, Inc. was $103 million, or $0.15 per diluted share, down from $142 million, or $0.21 per diluted share, in the second quarter of 2013. The company highlighted significant activity around the impending acquisition of Access Midstream Partners (ACMP), with $5.995 billion in cash held for this acquisition as of June 30, 2014. This acquisition, completed shortly after the quarter's end, is expected to significantly enhance WMB's position in key shale plays and fortify its fee-based business model.

Financial Highlights

51 data points
Beta

Revenue

$1.68B

Net Income

$103.00M

6.1% Net Margin

EPS (Diluted)

$0.15

Total Assets

$34.95B

Cash & Equivalents

$860.00M

Free Cash Flow

-$733.00M

Financial Statements
Beta
Revenue$1.68B
SG&A Expenses$136.00M
Operating Expenses$1.37B
Operating Income$311.00M
Interest Expense$163.00M
Net Income$103.00M
EPS (Basic)$0.15
EPS (Diluted)$0.15
Shares Outstanding (Basic)696.55M
Shares Outstanding (Diluted)700.70M

Key Highlights

  • 1Total revenues decreased by 5% to $1.678 billion for Q2 2014 compared to $1.767 billion for Q2 2013.
  • 2Net income attributable to The Williams Companies, Inc. declined to $103 million ($0.15/share) from $142 million ($0.21/share) year-over-year.
  • 3Service revenues increased by 14% to $825 million, while product sales decreased by 18% to $853 million.
  • 4The company received $50 million in insurance recoveries related to the June 2013 Geismar Incident in the current quarter.
  • 5Operating income for Q2 2014 was $311 million, down from $350 million in Q2 2013.
  • 6The company raised significant capital through debt and equity offerings, with $5.995 billion in cash held specifically for the ACMP acquisition at quarter-end.
  • 7Williams Partners segment revenues decreased to $1.616 billion from $1.763 billion in the prior year quarter, impacted by lower olefin sales and equity NGL revenues.

Frequently Asked Questions

The primary driver for the decrease in total revenues was a decline in product sales, which fell by 18% to $853 million, largely due to lower olefin sales volumes as a result of the Geismar Incident and decreased NGL sales. This offset the 14% increase in service revenues.

The Geismar Incident continued to impact results, primarily by reducing olefin sales volumes. However, the company received $50 million in insurance recoveries related to the incident during the quarter, which partially offset the negative impacts and was reported as Net insurance recoveries.

The ACMP Acquisition, which was completed shortly after the quarter ended, is a significant strategic move. The company held $5.995 billion in cash for this acquisition at June 30, 2014. It is expected to enhance WMB's position in key shale plays, diversify its asset base, and strengthen its fee-based business model, supporting its dividend growth strategy.

The company and its subsidiary WPZ completed substantial debt and equity offerings, raising significant capital. Proceeds from these offerings, along with existing cash, were used to fund the ACMP Acquisition, demonstrating the company's access to capital markets and its proactive approach to financing major strategic initiatives.