WILLIAMS COMPANIES, INC. Quarterly Report for Q1 Ended Mar 31, 2021

Summary

Williams Companies, Inc. (WMB) reported a significant improvement in financial performance for the first quarter of 2021 compared to the same period in 2020. The company posted a net income of $435 million, a substantial turnaround from a net loss of $570 million in Q1 2020. This improvement was primarily driven by the absence of significant impairment charges recorded in the prior year, particularly a $938 million impairment of equity-method investments and an $187 million goodwill impairment. Total revenues also saw a healthy increase of 36% year-over-year, reaching $2.61 billion, largely due to a surge in product sales which more than doubled. Key operational segments like Transmission & Gulf of Mexico and Northeast G&P showed stable Modified EBITDA, while the West segment experienced substantial growth. The company also noted a $128 million increase in commodity margins, reflecting higher realized prices and volumes, partly influenced by favorable weather conditions in early 2021. WMB is proceeding with its growth strategy, with planned capital expenditures between $1.0 billion and $1.2 billion for 2021, focusing on Transco expansions and projects within the Northeast G&P business. The company also announced a strategic acquisition in the natural gas marketing and logistics sector, expected to close in Q3 2021, aiming to bolster its market position.

Key Highlights

• 1Net income of $435 million in Q1 2021, a significant improvement from a net loss of $570 million in Q1 2020, primarily due to the absence of large impairment charges in the prior year.
• 2Total revenues increased by 36% to $2.61 billion, driven by a substantial increase in product sales and service revenues – commodity consideration.
• 3Commodity margins improved significantly, showing an increase of $128 million, influenced by higher commodity prices and volumes, and favorable weather impacts.
• 4Modified EBITDA across reportable segments demonstrates operational resilience, with Transmission & Gulf of Mexico and Northeast G&P stable, and West segment showing significant growth.
• 5The company reaffirmed its 2021 capital expenditure guidance of $1.0 billion to $1.2 billion, focusing on pipeline expansions and midstream projects.
• 6Williams announced an agreement to acquire Sequent Energy Management, L.P. and Sequent Energy Canada Corp. for $50 million plus working capital, aiming to enhance its natural gas marketing and logistics capabilities.
• 7The company increased its regular quarterly cash dividend to $0.41 per share, signaling confidence in its financial performance and outlook.

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