Summary
This Form 8-K filing from Williams Companies, Inc. (WMB) on June 25, 2013, addresses the impact of a June 13, 2013, explosion and fire at the Williams Partners L.P. (WPZ) Geismar olefins plant. The filing provides an overview of the plant's expected contribution to WPZ's 2013 financial guidance and details the relevant insurance coverage in place. Management is cooperating with investigations and assessing damage to plan repairs, a turnaround, and a facility expansion. While the full financial impact and timeline for repairs are still under assessment, WPZ has significant insurance coverage, including $500 million for property damage and business interruption, which is expected to mitigate the financial effects. The company and its parent, WMB, plan to provide an update on their financial guidance on July 31, 2013, concurrently with their second-quarter earnings release, allowing investors to gauge the revised outlook following this incident.
Key Highlights
- 1Williams Partners L.P. (WPZ) experienced a significant explosion and fire at its Geismar olefins plant on June 13, 2013.
- 2The Geismar plant was projected to contribute approximately $360 million to WPZ's full-year 2013 segment profit + DD&A, with about $190 million expected in the latter half of the year.
- 3WPZ has property-damage and business-interruption insurance with a combined per-occurrence limit of $500 million, and a 60-day waiting period for business interruption claims.
- 4General liability coverage is $610 million per occurrence, and workers' compensation coverage has statutory limits.
- 5The company is cooperating with OSHA and the U.S. Chemical Safety Board investigations into the incident's cause.
- 6Williams Companies (WMB) and WPZ will update their financial guidance on July 31, 2013, alongside their second-quarter financial results.
- 7The full impact on repair timelines and the facility's expansion remains uncertain as investigations and damage assessments are in their initial stages.