8-KEarnings & ResultsLeadership ChangesRegulation FD+1

WILLIAMS COMPANIES, INC. 8-K Report, Financial Results (Nov 4, 2004)

Filed November 4, 2004For Securities:WMB

Summary

Williams Companies, Inc. (WMB) filed this 8-K on November 4, 2004, to report its third quarter 2004 financial results and announce an executive transition. The company is providing supplemental non-GAAP financial measures, including EBITDA, recurring earnings, and recurring segment profit, to offer investors greater insight into ongoing operational performance and cash generation. These measures are presented alongside reconciliations to GAAP, and management emphasizes their role as widely accepted indicators for comparing performance and understanding asset operations, while noting they are not substitutes for GAAP net income or cash flow from operations. The filing also details the adoption of hedge accounting for the Power segment, which began in the third quarter after the decision to cease marketing the Power business for sale. This change aims to reduce earnings volatility by aligning financial reporting more closely with cash flows, particularly for derivative hedging instruments. Additionally, an executive transition is announced where Phillip D. Wright will assume responsibility for the Gas Pipelines segment effective January 3, 2005, with J. Douglas Whisenant retiring.

Key Highlights

  • 1Williams Companies announced its third quarter 2004 financial results, accompanied by detailed non-GAAP financial metrics.
  • 2The company is providing EBITDA, recurring earnings, and recurring segment profit to enhance investor understanding of ongoing operational performance.
  • 3Williams has adopted hedge accounting for its Power segment following the cessation of efforts to sell the business, aiming to reduce earnings volatility.
  • 4Mark-to-market adjustments are being used for the Power segment to present results more consistently with cash flows and aid investor understanding.
  • 5Phillip D. Wright will take over leadership of the Gas Pipelines segment on January 3, 2005.
  • 6J. Douglas Whisenant, Senior Vice President for Gas Pipelines, will retire effective January 3, 2005.
  • 7A slide presentation was provided for a public conference call and webcast on November 4, 2004, to discuss these results and events.

Frequently Asked Questions

Williams is reporting EBITDA, recurring earnings, and recurring segment profit. These non-GAAP measures are provided to offer investors a clearer view of the company's ongoing operational performance and cash generation, as they are widely accepted by investors for performance comparison and understanding the operating results of the company's assets.

Williams is adopting hedge accounting for its Power segment because it ceased efforts to market the sale of the Power business during Q3 2004, now allowing it to qualify. This change aims to reduce earnings volatility associated with derivative hedging instruments by aligning financial reporting more closely with the segment's cash flows, presenting results as if mark-to-market accounting had not been applied to designated hedges.

Yes, Phillip D. Wright will assume responsibility for the Gas Pipelines segment starting January 3, 2005. Concurrently, J. Douglas Whisenant, the current Senior Vice President for Gas Pipelines, is retiring effective January 3, 2005.

Management uses mark-to-market adjustments for the Power segment to better reflect results consistent with portfolio cash flows and aid investor understanding. These adjustments reverse unrealized gains or losses from derivatives and include realized gains or losses, presenting segment profit as if mark-to-market accounting had not been applied to designated hedges. While it aims to align with realized cash flows, it doesn't reflect potential future unrealized gains or losses.