10-QPeriod: Q2 FY2022

WILLIAMS COMPANIES, INC. Quarterly Report for Q2 Ended Jun 30, 2022

Filed August 1, 2022For Securities:WMB

Summary

Williams Companies, Inc. (WMB) reported solid financial results for the six months ended June 30, 2022, with net income attributable to the company increasing to $780 million from $730 million in the prior year period. This growth was driven by higher service revenues across key segments, particularly from increased gathering volumes due to the Trace Acquisition and favorable commodity-based gathering and processing rates. The company also benefited from higher equity earnings and favorable interest expense due to debt retirements. Despite an unfavorable change in net unrealized losses on commodity derivatives impacting reported revenue, the underlying operational performance remained strong. WMB completed the significant Trace Acquisition in April 2022, enhancing its footprint in the Haynesville Shale region. The company continues to execute on its growth strategy, with significant capital expenditures planned for expansion projects, including Transco expansions. WMB also maintained a commitment to returning capital to shareholders, increasing its quarterly dividend.

Financial Highlights

50 data points
Beta

Revenue

$2.49B

Net Income

$400.00M

16.1% Net Margin

EPS (Diluted)

$0.33

Total Assets

$47.55B

Cash & Equivalents

$133.00M

Free Cash Flow

$783.00M

Financial Statements
Beta
Revenue$2.49B
SG&A Expenses$160.00M
Operating Expenses$2.02B
Operating Income$472.00M
Interest Expense$281.00M
Net Income$400.00M
EPS (Basic)$0.33
EPS (Diluted)$0.33
Shares Outstanding (Basic)1.22B
Shares Outstanding (Diluted)1.22B

Key Highlights

  • 1Net income attributable to The Williams Companies, Inc. increased by $50 million to $780 million for the six months ended June 30, 2022, compared to the same period in 2021.
  • 2Total revenues for the six months ended June 30, 2022, were $5,014 million, a slight increase from $4,895 million in the prior year period.
  • 3The company completed the Trace Acquisition for $972 million on April 29, 2022, expanding its presence in the Haynesville Shale region.
  • 4Operating income decreased to $1,126 million for the six months ended June 30, 2022, from $1,339 million in the prior year, largely due to an unfavorable change in net gain/loss on commodity derivatives.
  • 5Service revenues increased by 8% to $3,143 million for the six months ended June 30, 2022, driven by higher commodity-based rates and volumes, including contributions from the Trace Acquisition.
  • 6Williams Companies, Inc. paid a quarterly dividend of $0.425 per share in June 2022, an increase from $0.41 per share in 2021.
  • 7Growth capital and investment expenditures for 2022 are expected to be between $2.25 billion and $2.35 billion, funding Transco expansions, Northeast G&P projects, the Trace Acquisition, and upstream development.

Frequently Asked Questions

The increase in net income for the first six months of 2022 was primarily driven by higher service revenues from commodity-based gathering and processing rates and increased gathering volumes, including contributions from the recent Trace Acquisition. Additionally, higher equity earnings and favorable interest expense due to debt retirements contributed to the improved net income.

The Trace Acquisition, completed on April 29, 2022, for $972 million, expanded Williams Companies' footprint in the Haynesville Shale region. Its impact is reflected in higher gathering volumes and revenues reported in the West segment for the period from the acquisition date onwards.

Williams Companies expects its growth capital and investment expenditures for 2022 to range between $2.25 billion and $2.35 billion, focusing on Transco expansions, Northeast G&P projects, the Trace Acquisition, and upstream development. The company also increased its regular quarterly cash dividend to $0.425 per share in 2022, reflecting a commitment to returning capital to shareholders.

Williams Companies is exposed to commodity price risk through its marketing activities and upstream business. While it uses derivative instruments to manage this risk, many are not designated as hedges for accounting purposes. This led to an unfavorable change in net unrealized losses on commodity derivatives, which impacted reported revenues and operating income. However, the company notes that these unrealized gains and losses are often offset by valuation changes in the underlying economic value of production or contracts.