10-QPeriod: Q2 FY2021

WILLIAMS COMPANIES, INC. Quarterly Report for Q2 Ended Jun 30, 2021

Filed August 2, 2021For Securities:WMB

Summary

Williams Companies, Inc. (WMB) reported solid financial results for the second quarter and the first six months of 2021. Total revenues increased significantly year-over-year, driven by strong performance in "Product sales" and "Service revenues – commodity consideration." The company posted net income attributable to common stockholders of $304 million for the quarter and $730 million for the six-month period, a substantial improvement from a net loss in the prior-year period, largely due to the absence of significant impairment charges in 2020. Operationally, the company saw robust growth in its "Transmission & Gulf of Mexico" and "Northeast G&P" segments, with notable increases in Modified EBITDA. The "West" segment experienced a slight decrease in EBITDA but benefited from higher commodity margins. WMB also highlighted recent strategic moves, including the acquisition of Sequent Energy Management, L.P. and Sequent Energy Canada, Corp. in July 2021, which is expected to enhance its gas marketing capabilities. The company also reaffirmed its commitment to capital expenditures and dividends, signaling confidence in its ongoing strategy and financial health.

Financial Highlights

49 data points
Beta

Revenue

$2.28B

Net Income

$304.00M

13.3% Net Margin

EPS (Diluted)

$0.25

Total Assets

$45.51B

Cash & Equivalents

$1.20B

Free Cash Flow

$632.00M

Financial Statements
Beta
Revenue$2.28B
SG&A Expenses$114.00M
Operating Expenses$1.68B
Operating Income$600.00M
Interest Expense$298.00M
Net Income$304.00M
EPS (Basic)$0.25
EPS (Diluted)$0.25
Shares Outstanding (Basic)1.22B
Shares Outstanding (Diluted)1.22B

Key Highlights

  • 1Total revenues for the six months ended June 30, 2021, increased by approximately 32% to $4.9 billion compared to $3.7 billion in the prior year period.
  • 2Net income attributable to common stockholders for the six months ended June 30, 2021, was $730 million, a significant turnaround from a net loss of $214 million in the same period of 2020, primarily due to the absence of large impairment charges.
  • 3The Transmission & Gulf of Mexico segment showed a 7.7% increase in Modified EBITDA for the six months ended June 30, 2021, driven by higher transportation revenues from expansion projects and favorable commodity margins.
  • 4The Northeast G&P segment's Modified EBITDA increased by 9.7% for the first six months of 2021, supported by higher equity earnings from investments and increased service revenues.
  • 5"Product sales" saw a significant jump of 161% year-over-year for the six-month period, reaching $1.88 billion, boosted by higher NGL and natural gas prices and volumes, as well as contributions from recently acquired upstream operations.
  • 6The company completed the acquisition of Sequent Energy Management, L.P. and Sequent Energy Canada, Corp. in July 2021 for $134 million, aiming to enhance its gas marketing capabilities.
  • 7WMB paid a regular quarterly dividend of $0.41 per share in Q2 2021, representing a modest increase from the $0.40 per share paid in 2020.

Frequently Asked Questions

The substantial improvement in net income for the first six months of 2021 was primarily driven by the absence of significant impairment charges that occurred in the first half of 2020. Specifically, the $938 million impairment of equity-method investments and the $187 million impairment of goodwill in 2020 did not recur in 2021. Additionally, favorable changes in commodity margins and increased equity earnings contributed to the improved profitability.

The acquisition of upstream operations contributed to a $100 million increase in "Product sales" for the six months ended June 30, 2021, and also led to higher "Operating and maintenance expenses." The subsequent acquisition of Sequent Energy Management in July 2021, after the reporting period, is expected to enhance gas marketing capabilities and complement existing pipeline and storage businesses, though its financial impact will be reflected in future filings.

As of June 30, 2021, Williams Companies had $1.2 billion in cash and cash equivalents and $4.5 billion available under its credit facility, totaling $5.7 billion in available liquidity. The company expects to have sufficient liquidity to manage its businesses in 2021. It has approximately $2.1 billion of long-term debt due within one year, and plans to address these maturities through cash on hand, refinancing, its credit facility, or asset monetizations. Notably, the company expected to early retire $500 million of notes in August 2021.

While the company is involved in various legal and environmental matters, including litigation related to natural gas price reporting and refinery contamination, the report indicates that it does not anticipate a material effect on its consolidated financial position if it receives an unfavorable outcome in any one or more of the pending proceedings with governmental authorities. For other matters, while some potential losses cannot be reasonably estimated, the aggregate reasonably possible losses beyond amounts accrued are estimated to be immaterial. However, certain contingent liabilities, such as the natural gas litigation and the Alaska Refinery contamination, carry risks that could potentially be material to future results of operations.