Williams Reports Strong Third-Quarter Results

November 01, 2023 at 16:15 PM EDT

Williams (NYSE: WMB) today announced its unaudited financial results for the three and nine months ended September 30, 2023.

Continued strength in base business delivers another quarter of solid financial results

GAAP net income of $654 million, or $0.54 per diluted share (EPS) – up 10% vs. 3Q 2022
Adjusted net income of $547 million, or $0.45 per diluted share (Adjusted EPS)
Adjusted EBITDA of $1.652 billion – up $15 million from 3Q 2022
Cash flow from operations (CFFO) of $1.234 billion
Available funds from operations (AFFO) of $1.230 billion
Dividend coverage ratio of 2.26x (AFFO basis)
Increased midpoint for full-year 2023 guidance to $6.7 billion Adjusted EBITDA
Continued improvement of balance sheet with leverage ratio of 3.45x

Steadfast project execution to drive additional business growth in 2023 and beyond; sale of non-core assets and strategic acquisitions fine-tune portfolio

Placed in-service phase one of Transco's Regional Energy Access expansion Oct. 21 ahead of schedule
Signed precedent agreements on Transco's Southeast Supply Enhancement
Signed anchor shipper precedent agreement on MountainWest Uinta Basin expansion project
Completed NorTex Wolf Hollow, South Mansfield and phase one of Northeast Cardinal Utica expansions
Sold non-core Bayou Ethane system for an attractive multiple greater than 14x
Delaware Supreme Court affirms previous rulings in long-standing suit; Energy Transfer ordered to pay $602 million plus additional interest accrued during the appeal to Williams for failed merger
Optimizing position in DJ Basin through Rocky Mountain Midstream and Cureton Front Range LLC acquisitions
Assuming operatorship of non-consolidated Blue Racer joint venture
Supporting two clean hydrogen hubs announced by U.S. Department of Energy

CEO Perspective

Alan Armstrong, president and chief executive officer, made the following comments:

“Williams delivered another quarter of impressive accomplishments with Adjusted EBITDA up 9 percent year-to-date 2023, despite dramatically lower natural gas prices. We expect the strong performance to continue, providing confidence to raise our guidance midpoint by $100 million to $6.7 billion Adjusted EBITDA for 2023.

"Our teams have done an excellent job executing our large-scale expansion projects in a complex and challenging permitting environment. We placed the first phase of our latest Transco expansion project, Regional Energy Access, into service ahead of schedule, progressed on an additional 2 Bcf/d of Transco expansions for completion by year-end 2025, and executed precedent agreements on the 1.4 Bcf/d Southeast Supply Enhancement project. Our teams also successfully integrated MountainWest into our operations and are executing on more profitable growth with this asset than we had planned. Additionally, we have once again optimized our portfolio, using proceeds from the sale of non-core assets, along with expected proceeds from a recent legal judgement, to strengthen our position and capture tangible synergies in the DJ Basin."

Armstrong added, “Williams has proven its ability to predictably grow through a variety of commodity cycles, and our natural gas strategy is more relevant than ever as demand for natural gas continues to increase, especially to serve electric power generation and LNG exports. Williams is well positioned to capture significant future growth and return value to our shareholders, while we reliably deliver the benefits of natural gas to the United States and abroad."

Williams Summary Financial Information	3Q		Year to Date
Amounts in millions, except ratios and per-share amounts. Per share amounts are reported on a diluted basis. Net income amounts are from continuing operations attributable to The Williams Companies, Inc. available to common stockholders.	2023	2022	2023	2022

GAAP Measures
Net Income	$654	$599	$2,127	$1,378
Net Income Per Share	$0.54	$0.49	$1.74	$1.13
Cash Flow From Operations	$1,234	$1,490	$4,125	$3,670

Non-GAAP Measures (1)
Adjusted EBITDA	$1,652	$1,637	$5,058	$4,644
Adjusted Net Income	$547	$592	$1,746	$1,575
Adjusted Earnings Per Share	$0.45	$0.48	$1.43	$1.29
Available Funds from Operations	$1,230	$1,241	$3,890	$3,561
Dividend Coverage Ratio	2.26x	2.40x	2.38x	2.29x

Other
Debt-to-Adjusted EBITDA at Quarter End (2)	3.45x	3.68x
Capital Investments (3) (4)	$805	$526	$2,045	$1,271

(1) Schedules reconciling Adjusted Net Income, Adjusted EBITDA, Available Funds from Operations and Dividend Coverage Ratio (non-GAAP measures) to the most comparable GAAP measure are available at www.williams.com and as an attachment to this news release.
(2) Does not represent leverage ratios measured for WMB credit agreement compliance or leverage ratios as calculated by the major credit ratings agencies. Debt is net of cash on hand, and Adjusted EBITDA reflects the sum of the last four quarters.
(3) Capital Investments includes increases to property, plant, and equipment (growth & maintenance capital),purchases of and contributions to equity-method investments and purchases of other long-term investments.
(4) Third-quarter and year-to-date 2023 capital excludes ($29 million) and $1.024 billion, respectively for the acquisition of MountainWest Pipeline Holding company, which closed February 14, 2023. Third-quarter and year-to-date 2022 capital excludes $424 million for the purchase of NorTex Midstream, which closed August 31, 2022. Year-to-date 2022 capital also excludes $933 million for purchase of the Trace Midstream Haynesville gathering assets, which closed April 29, 2022.

GAAP Measures

Third-quarter 2023 net income increased by $55 million compared to the prior year reflecting a $130 million gain on the sale of the Bayou Ethane system and the benefit of higher service revenues driven by contributions from recent acquisitions and increased volumes and rates in the Northeast G&P segment. These improvements were partially offset by our $31 million share of a loss contingency accrual on our Aux Sable equity-method investment and lower results from our upstream business reflecting lower prices partially offset by higher production volumes, and higher operating expenses. The tax provision increased $80 million primarily due to a lower benefit associated with decreases in our estimate of the state deferred income tax rate in both periods and higher pretax income, partially offset by the absence of an unfavorable revision to a state net operating loss carryforward in 2022.

For year-to-date 2023, net income increased $749 million compared to the prior year reflecting a favorable change of $762 million in net unrealized gains/losses on commodity derivatives. Other drivers of the year-to-date increase are similar to those described for the quarterly comparison, except that improved marketing margins more than offset lower natural gas liquids (NGL) processing margins for the year-to-date period. The tax provision increased primarily due to higher pretax income and the absence of $134 million benefit associated with the release of valuation allowances on deferred income tax assets and federal income tax settlements recorded in the prior year, and a lower benefit associated with decreases in our estimate of the state deferred income tax rate in both periods. The year-to-date 2023 period also reported a loss from discontinued operations associated with an adverse legal ruling involving former refinery operations.

Cash flow from operations for the third-quarter decreased compared to the prior year primarily due to unfavorable net changes in working capital and lower distributions from certain equity method investments, partially offset by higher operating results exclusive of noncash items. Year-to-date cash flow from operations increased compared to the prior year primarily due to higher operating results exclusive of non-cash items and favorable changes in derivative margin requirements, partially offset by lower distributions from certain equity method investments.

Non-GAAP Measures

Third-quarter 2023 Adjusted EBITDA increased by $15 million over the prior year, driven by the previously described higher service revenues, partially offset by reduced upstream results, lower marketing margins, higher operating costs and lower JV proportional EBITDA. Year-to-date 2023 Adjusted EBITDA increased by $414 million over the prior year, driven by similar factors, except that marketing margins were overall improved.

Third-quarter 2023 Adjusted Net Income decreased by $45 million compared to the prior year, driven by the previously described impacts to net income, adjusted primarily to remove the effects of net unrealized gains/losses on commodity derivatives, the gain on the sale of certain Gulf coast liquids pipelines, amortization of certain assets from the Sequent acquisition, our share of Aux Sable’s loss contingency accrual, NGL linefill volatility, and favorable income tax benefits. Year-to-date Adjusted Net Income increased by $171 million over the prior year driven by the previously described impacts to year-to-date income, adjusted primarily for similar items.

Third-quarter 2023 Available Funds From Operations (AFFO) decreased slightly by $11 million compared to the prior year primarily due to lower distributions from certain equity method investments partially offset by higher operating results exclusive of noncash items. Year-to-date 2023 AFFO increased by $329 million primarily reflecting higher results from continuing operations exclusive of non-cash items partially offset by lower distributions from certain equity method investments.

	Third Quarter								Year to Date
Amounts in millions	Modified EBITDA				Adjusted EBITDA				Modified EBITDA					Adjusted EBITDA
Amounts in millions	3Q 2023	3Q 2022	Change		3Q 2023	3Q 2022	Change		2023	2022		Change		2023	2022	Change
Transmission & Gulf of Mexico	$881	$638	$243		$754	$671	$83		$2,327	$1,987		$340		$2,230	$2,020	$210
Northeast G&P	454	464	(10	)	485	464	21		1,439	1,332		107		1,470	1,332	138
West	315	337	(22	)	315	337	(22	)	931	885		46		913	893	20
Gas & NGL Marketing Services	43	20	23		16	38	(22	)	678	(249	)	927		231	109	122
Other	81	140	(59	)	82	127	(45	)	196	284		(88	)	214	290	(76	)
Total	$1,774	$1,599	$175		$1,652	$1,637	$15		$5,571	$4,239		$1,332		$5,058	$4,644	$414

Note: Williams uses Modified EBITDA for its segment reporting. Definitions of Modified EBITDA and Adjusted EBITDA and schedules reconciling to net income are included in this news release.

Transmission & Gulf of Mexico

Third-quarter and year-to-date 2023 Modified and Adjusted EBITDA improved compared to the prior year driven by the MountainWest and NorTex Midstream acquisitions, higher service revenues, lower employee-related costs and increased benefit of allowance for equity funds used during construction. Modified EBITDA for 2023 was further impacted by the gain on the sale the Bayou Ethane system and one-time MountainWest acquisition and transition costs, while 2022 included a loss related to Eminence storage cavern abandonments and a regulatory charge associated with Transco’s deferred state income tax rate, all of which are excluded from Adjusted EBITDA.

Northeast G&P

Third-quarter and year-to-date 2023 Modified and Adjusted EBITDA reflect increased gathering rates and volumes, partially offset by lower rates at Laurel Mountain Midstream and Bradford joint ventures compared to the prior year. Modified EBITDA for 2023 also reflects our share of a loss contingency accrual at Aux Sable which is excluded from Adjusted EBITDA.

West

Third-quarter 2023 Modified and Adjusted EBITDA decreased compared to the prior year primarily reflecting lower NYMEX-based rates in the Barnett partially offset by favorable changes in realized gains on natural gas hedges. Year-to-date Modified and Adjusted EBITDA improved compared to the prior year driven by higher service revenues reflecting realized gains on natural gas hedges and higher Haynesville volumes, partially offset by lower NYMEX-based rates in the Barnett, as well increased JV EBITDA. The year-to-date period improvement also included contributions from Trace Midstream acquired in April 2022 and lower processing margins reflecting a short-term gas price spike at Opal early in the year and severe weather impacts.

Gas & NGL Marketing Services

Third-quarter 2023 Modified EBITDA improved from the prior year primarily reflecting a net favorable change in unrealized gains/losses on commodity derivatives. Year-to-date 2023 Modified EBITDA improved from the prior year primarily reflecting higher commodity marketing margins and a $791 million net favorable change in unrealized gains/losses on commodity derivatives. The unrealized gains/losses on commodity derivatives are excluded from Adjusted EBITDA.

Other

Third-quarter and year-to-date 2023 Modified and Adjusted EBITDA decreased compared to the prior year primarily reflecting lower results from our upstream business driven by lower prices, partially offset by higher production volumes. Modified EBITDA also includes net unfavorable changes in unrealized gains/losses on commodity derivatives for both the quarter and year-to-date comparative periods, which is excluded from Adjusted EBITDA.

Optimizing portfolio through non-core asset sale and re-investing in assets strategic to footprint

In the third quarter, Williams sold its Bayou Ethane system for $348 million in cash, representing a last-twelve-month multiple over 14x Adjusted EBITDA. The transaction includes long-term ethane take away agreements, locking in flow assurance for Discovery and Mobile Bay producers. The proceeds from the sale will contribute to funding Williams’ extensive portfolio of attractive growth capital investments, including transactions in Colorado’s Denver-Julesburg (“DJ”) Basin:

Williams has agreed to acquire Cureton Front Range LLC, whose assets include gas gathering pipelines and two processing plants to serve producers across 225,000 dedicated acres.

Williams has also agreed to purchase KKR’s 50 percent ownership interest in Rocky Mountain Midstream, resulting in 100 percent ownership of Rocky Mountain Midstream for Williams.

The acquisitions have a combined value of $1.27 billion, representing a blended multiple of approximately 7x expected 2024 Adjusted EBITDA. The combination of these two assets will further drive down purchase multiple via increased volumes on existing processing facilities, as well as downstream NGL transportation, fractionation and storage assets. The transactions are expected to close by the end of 2023, making Williams the third largest gatherer in the DJ Basin and progressing toward the company's strategy of maintaining top positions in its areas of operation.

Business Segment Results & Form 10-Q

Williams' operations are comprised of the following reportable segments: Transmission & Gulf of Mexico, Northeast G&P, West and Gas & NGL Marketing Services, as well as Other. For more information, see the company's third-quarter 2023 Form 10-Q.

2023 Financial Guidance

The company increased its midpoint of guidance and now expects 2023 Adjusted EBITDA between $6.6 billion and $6.8 billion. Growth capex guidance remains the same; between $1.6 billion to $1.9 billion. Importantly, Williams anticipates a leverage ratio midpoint of 3.65x, which will allow it to retain financial flexibility. The dividend was increased by 5.3% on an annualized basis to $1.79 in 2023 from $1.70 in 2022.

Williams' Third-Quarter 2023 Materials to be Posted Shortly; Q&A Webcast Scheduled for Tomorrow

Williams' third-quarter 2023 earnings presentation will be posted at www.williams.com. The company’s third-quarter 2023 earnings conference call and webcast with analysts and investors is scheduled for Thursday, November 2, at 9:30 a.m. Eastern Time (8:30 a.m. Central Time). Participants who wish to join the call by phone must register using the following link: https://conferencingportals.com/event/MTgNWtxQ.

A webcast link to the conference call will be provided on Williams’ Investor Relations website. A replay of the webcast will be available on the website for at least 90 days following the event.

About Williams

As the world demands reliable, low-cost, low-carbon energy, Williams (NYSE: WMB) will be there with the best transport, storage and delivery solutions to reliably fuel the clean energy economy. Headquartered in Tulsa, Oklahoma, Williams is an industry-leading, investment grade C-Corp with operations across the natural gas value chain including gathering, processing, interstate transportation, storage, wholesale marketing and trading of natural gas and natural gas liquids. With major positions in top U.S. supply basins, Williams connects the best supplies with the growing demand for clean energy. Williams owns and operates more than 33,000 miles of pipelines system wide – including Transco, the nation’s largest volume natural gas pipeline – and handles approximately one third of the natural gas in the United States that is used every day for clean-power generation, heating and industrial use. Learn how the company is leveraging its nationwide footprint to incorporate clean hydrogen, NextGen Gas and other innovations at www.williams.com.




The Williams Companies, Inc. Consolidated Statement of Income (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
		2023			2022			2023			2022
	(Millions, except per-share amounts)
Revenues:
Service revenues	$	1,770		$	1,685		$	5,212		$	4,828
Service revenues – commodity consideration		45			60			108			223
Product sales		720			1,260			2,158			3,475
Net gain (loss) on commodity derivatives		24			16			645			(491	)
Total revenues		2,559			3,021			8,123			8,035
Costs and expenses:
Product costs		484			990			1,458			2,650
Net processing commodity expenses		31			29			129			99
Operating and maintenance expenses		522			486			1,466			1,345
Depreciation and amortization expenses		521			500			1,542			1,504
Selling, general, and administrative expenses		146			163			483			477
Gain on sale of business		(130	)		—			(130	)		—
Other (income) expense – net		(9	)		33			(49	)		14
Total costs and expenses		1,565			2,201			4,899			6,089
Operating income (loss)		994			820			3,224			1,946
Equity earnings (losses)		127			193			434			492
Other investing income (loss) – net		24			1			45			4
Interest incurred		(330	)		(296	)		(953	)		(871	)
Interest capitalized		16	��		5			39			13
Other income (expense) – net		30			(6	)		69			5
Income (loss) before income taxes		861			717			2,858			1,589
Less: Provision (benefit) for income taxes		176			96			635			169
Income (loss) from continuing operations		685			621			2,223			1,420
Income (loss) from discontinued operations		(1	)		—			(88	)		—
Net income (loss)		684			621			2,135			1,420
Less: Net income (loss) attributable to noncontrolling interests		30			21			94			40
Net income (loss) attributable to The Williams Companies, Inc.		654			600			2,041			1,380
Less: Preferred stock dividends		1			1			2			2
Net income (loss) available to common stockholders	$	653		$	599		$	2,039		$	1,378
Amounts attributable to The Williams Companies, Inc. available to common stockholders:
Income (loss) from continuing operations	$	654		$	599		$	2,127		$	1,378
Income (loss) from discontinued operations		(1	)		—			(88	)		—
Net income (loss) available to common stockholders	$	653		$	599		$	2,039		$	1,378
Basic earnings (loss) per common share:
Income (loss) from continuing operations	$	.54		$	.49		$	1.74		$	1.13
Income (loss) from discontinued operations		—			—			(.07	)		—
Net income (loss) available to common stockholders	$	.54		$	.49		$	1.67		$	1.13
Weighted-average shares (thousands)		1,216,951			1,218,964			1,218,021			1,218,202
Diluted earnings (loss) per common share:
Income (loss) from continuing operations	$	.54		$	.49		$	1.74		$	1.13
Income (loss) from discontinued operations		—			—			(.07	)		—
Net income (loss) available to common stockholders	$	.54		$	.49		$	1.67		$	1.13
Weighted-average shares (thousands)		1,220,073			1,222,472			1,222,650			1,222,153





The Williams Companies, Inc. Consolidated Balance Sheet (Unaudited)

	September 30, 2023			December 31, 2022
	(Millions, except per-share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	2,074		$	152
Trade accounts and other receivables (net of allowance of $3 at September 30, 2023 and $6 at December 31, 2022)		1,419			2,723
Inventories		266			320
Derivative assets		243			323
Other current assets and deferred charges		254			279
Total current assets		4,256			3,797
Investments		4,998			5,065
Property, plant, and equipment		50,805			47,057
Accumulated depreciation and amortization		(18,177	)		(16,168	)
Property, plant, and equipment – net		32,628			30,889
Intangible assets – net of accumulated amortization		7,459			7,363
Regulatory assets, deferred charges, and other		1,447			1,319
Total assets	$	50,788		$	48,433
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,358		$	2,327
Derivative liabilities		123			316
Accrued and other current liabilities		1,166			1,270
Commercial paper		—			350
Long-term debt due within one year		2,879			627
Total current liabilities		5,526			4,890
Long-term debt		22,772			21,927
Deferred income tax liabilities		3,496			2,887
Regulatory liabilities, deferred income, and other		4,651			4,684
Contingent liabilities and commitments
Equity:
Stockholders’ equity:
Preferred stock ($1 par value; 30 million shares authorized at September 30, 2023 and December 31, 2022; 35,000 shares issued at September 30, 2023 and December 31, 2022)		35			35
Common stock ($1 par value; 1,470 million shares authorized at September 30, 2023 and December 31, 2022; 1,256 million shares issued at September 30, 2023 and 1,253 million shares issued at December 31, 2022)		1,256			1,253
Capital in excess of par value		24,562			24,542
Retained deficit		(12,876	)		(13,271	)
Accumulated other comprehensive income (loss)		48			(24	)
Treasury stock, at cost (39 million shares at September 30, 2023 and 35 million shares at December 31, 2022 of common stock)		(1,180	)		(1,050	)
Total stockholders’ equity		11,845			11,485
Noncontrolling interests in consolidated subsidiaries		2,498			2,560
Total equity		14,343			14,045
Total liabilities and equity	$	50,788		$	48,433





The Williams Companies, Inc. Consolidated Statement of Cash Flows (Unaudited)

	Nine Months Ended September 30,
		2023			2022
	(Millions)
OPERATING ACTIVITIES:
Net income (loss)	$	2,135		$	1,420
Adjustments to reconcile to net cash provided (used) by operating activities:
Depreciation and amortization		1,542			1,504
Provision (benefit) for deferred income taxes		586			182
Equity (earnings) losses		(434	)		(492	)
Distributions from equity-method investees		607			688
Net unrealized (gain) loss from derivative instruments		(433	)		329
Gain on sale of business		(130	)		—
Inventory write-downs		28			76
Amortization of stock-based awards		59			58
Cash provided (used) by changes in current assets and liabilities:
Accounts receivable		1,295			(672	)
Inventories		29			(152	)
Other current assets and deferred charges		(5	)		(62	)
Accounts payable		(1,072	)		743
Accrued and other current liabilities		(114	)		167
Changes in current and noncurrent derivative assets and liabilities		172			86
Other, including changes in noncurrent assets and liabilities		(140	)		(205	)
Net cash provided (used) by operating activities		4,125			3,670
FINANCING ACTIVITIES:
Proceeds from (payments of) commercial paper – net		(352	)		—
Proceeds from long-term debt		2,754			1,752
Payments of long-term debt		(21	)		(2,019	)
Proceeds from issuance of common stock		8			53
Purchases of treasury stock		(130	)		(9	)
Common dividends paid		(1,635	)		(1,553	)
Dividends and distributions paid to noncontrolling interests		(174	)		(141	)
Contributions from noncontrolling interests		18			15
Payments for debt issuance costs		(21	)		(14	)
Other – net		(19	)		(40	)
Net cash provided (used) by financing activities		428			(1,956	)
INVESTING ACTIVITIES:
Property, plant, and equipment:
Capital expenditures (1)		(1,845	)		(1,447	)
Dispositions – net		(33	)		(19	)
Contributions in aid of construction		20			8
Proceeds from sale of business		348			—
Purchases of businesses, net of cash acquired		(1,024	)		(933	)
Purchases of and contributions to equity-method investments		(80	)		(140	)
Other – net		(17	)		(4	)
Net cash provided (used) by investing activities		(2,631	)		(2,535	)
Increase (decrease) in cash and cash equivalents		1,922			(821	)
Cash and cash equivalents at beginning of year		152			1,680
Cash and cash equivalents at end of period	$	2,074		$	859
_____________
(1) Increases to property, plant, and equipment	$	(1,960	)	$	(1,549	)
Changes in related accounts payable and accrued liabilities		115			102
Capital expenditures	$	(1,845	)	$	(1,447	)





Transmission & Gulf of Mexico
(UNAUDITED)
	2022															2023
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			Year
Regulated interstate natural gas transportation, storage, and other revenues ⁽¹⁾	$	730		$	717		$	734		$	758		$	2,939		$	774		$	786		$	794		$	2,354
Gathering, processing, storage and transportation revenues		82			84			99			100			365			100			104			114			318
Other fee revenues ⁽¹⁾		5			5			4			7			21			6			8			5			19
Commodity margins		15			11			10			7			43			10			8			7			25
Net unrealized gain (loss) from derivative instruments		—			—			1			(1	)		—			—			—			—			—
Operating and administrative costs ⁽¹⁾		(202	)		(227	)		(238	)		(239	)		(906	)		(254	)		(254	)		(257	)		(765	)
Other segment income (expenses) - net ⁽¹⁾		19			17			(22	)		5			19			26			31			36			93
Gain on sale of business		—			—			—			—			—			—			—			130			130
Proportional Modified EBITDA of equity-method investments		48			45			50			50			193			53			48			52			153
Modified EBITDA		697			652			638			687			2,674			715			731			881			2,327
Adjustments		—			—			33			13			46			13			17			(127	)		(97	)
Adjusted EBITDA	$	697		$	652		$	671		$	700		$	2,720		$	728		$	748		$	754		$	2,230

Statistics for Operated Assets
Natural Gas Transmission ⁽²⁾
Transcontinental Gas Pipe Line
Avg. daily transportation volumes (MMdth)		15.0			13.5			14.7			14.2			14.4			14.3			13.2			14.0			13.8
Avg. daily firm reserved capacity (MMdth)		19.3			19.1			19.2			19.3			19.2			19.5			19.4			19.4			19.4
Northwest Pipeline LLC
Avg. daily transportation volumes (MMdth)		2.8			2.1			2.0			2.9			2.5			3.1			2.3			2.3			2.6
Avg. daily firm reserved capacity (MMdth)		3.8			3.8			3.8			3.8			3.8			3.8			3.8			3.8			3.8
MountainWest ⁽³⁾
Avg. daily transportation volumes (MMdth)		—			—			—			—			—			4.2			3.2			3.8			3.7
Avg. daily firm reserved capacity (MMdth)		—			—			—			—			—			7.8			7.5			7.5			7.6
Gulfstream - Non-consolidated
Avg. daily transportation volumes (MMdth)		0.9			1.3			1.4			1.1			1.3			1.0			1.2			1.4			1.2
Avg. daily firm reserved capacity (MMdth)		1.3			1.3			1.4			1.4			1.4			1.4			1.4			1.4			1.4
Gathering, Processing, and Crude Oil Transportation
Consolidated ⁽⁴⁾
Gathering volumes (Bcf/d)		0.30			0.28			0.29			0.28			0.29			0.28			0.23			0.27			0.26
Plant inlet natural gas volumes (Bcf/d)		0.48			0.46			0.49			0.46			0.47			0.43			0.40			0.46			0.43
NGL production (Mbbls/d)		31			31			26			26			28			28			24			28			27
NGL equity sales (Mbbls/d)		7			7			4			5			6			7			5			6			6
Crude oil transportation volumes (Mbbls/d)		110			124			125			118			119			119			111			134			121
Non-consolidated ⁽⁵⁾
Gathering volumes (Bcf/d)		0.39			0.37			0.41			0.42			0.40			0.36			0.30			0.36			0.34
Plant inlet natural gas volumes (Bcf/d)		0.38			0.37			0.41			0.42			0.40			0.36			0.30			0.36			0.34
NGL production (Mbbls/d)		28			26			29			29			28			28			21			30			26
NGL equity sales (Mbbls/d)		8			6			7			10			8			8			3			8			7

(1) Excludes certain amounts associated with revenues and operating costs for tracked or reimbursable charges.
(2) Tbtu converted to MMdth at one trillion British thermal units = one million dekatherms.
(3) Includes 100% of the volumes associated with the MountainWest Acquisition transmission assets after the purchase on February 14, 2023, including 100% of the volumes associated with the operated equity-method investment White River Hub, LLC. Average volumes were calculated over the period owned.
(4) Excludes volumes associated with equity-method investments that are not consolidated in our results.
(5) Includes 100% of the volumes associated with operated equity-method investments, including Discovery Producer Services.





Northeast G&P
(UNAUDITED)
	2022															2023
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			Year
Gathering, processing, transportation, and fractionation revenues	$	323		$	350		$	354		$	368		$	1,395		$	391		$	431		$	417		$	1,239
Other fee revenues ⁽¹⁾		27			27			27			46			127			32			27			27			86
Commodity margins		6			1			3			—			10			5			(1	)		7			11
Operating and administrative costs ⁽¹⁾		(85	)		(102	)		(101	)		(97	)		(385	)		(101	)		(101	)		(115	)		(317	)
Other segment income (expenses) - net		(3	)		—			(1	)		(1	)		(5	)		—			—			(1	)		(1	)
Proportional Modified EBITDA of equity-method investments		150			174			182			148			654			143			159			119			421
Modified EBITDA		418			450			464			464			1,796			470			515			454			1,439
Our share of accrual for loss contingency at Aux Sable Liquid Products LP		—			—			—			—			—			—			—			31			31
Adjusted EBITDA	$	418		$	450		$	464		$	464		$	1,796		$	470		$	515		$	485		$	1,470

Statistics for Operated Assets and non-operated Blue Racer Midstream
Gathering and Processing
Consolidated ⁽²⁾
Gathering volumes (Bcf/d) ⁽³⁾		4.03			4.19			4.22			4.31			4.19			4.42			4.61			4.41			4.48
Plant inlet natural gas volumes (Bcf/d)		1.46			1.70			1.74			1.70			1.65			1.92			1.79			1.93			1.88
NGL production (Mbbls/d)		110			118			125			127			120			144			135			144			141
NGL equity sales (Mbbls/d)		2			1			1			1			1			1			1			—			1
Non-consolidated ⁽⁴⁾
Gathering volumes (Bcf/d)		6.62			6.76			6.58			6.48			6.61			6.97			7.03			6.83			6.94
Plant inlet natural gas volumes (Bcf/d)		0.66			0.76			0.66			0.77			0.71			0.77			0.93			0.99			0.90
NGL production (Mbbls/d)		50			53			45			56			51			54			64			71			63
NGL equity sales (Mbbls/d)		4			3			2			2			3			4			5			4			4

(1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges.
(2) Includes volumes associated with Susquehanna Supply Hub, the Northeast JV, and Utica Supply Hub, all of which are consolidated.
(3) 1st Qtr 2023 and 2nd Qtr 2023 volumes have been revised for a correction.
(4) Includes 100% of the volumes associated with operated equity-method investments, including the Laurel Mountain Midstream partnership; and the Bradford Supply Hub and the Marcellus South Supply Hub within the Appalachia Midstream Services partnership. Also, all periods include non-operated Blue Racer Midstream.





West
(UNAUDITED)
	2022															2023
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			Year
Net gathering, processing, transportation, storage, and fractionation revenues	$	317		$	360		$	397		$	401		$	1,475		$	382		$	373		$	371		$	1,126
Other fee revenues⁽¹⁾		6			6			6			5			23			5			7			4			16
Commodity margins		23			25			27			27			102			(24	)		18			21			15
Operating and administrative costs ⁽¹⁾		(112	)		(133	)		(128	)		(133	)		(506	)		(115	)		(122	)		(122	)		(359	)
Other segment income (expenses) - net		(1	)		(1	)		(6	)		(7	)		(15	)		23			(7	)		(4	)		12
Proportional Modified EBITDA of equity-method investments		27			31			41			33			132			33			43			45			121
Modified EBITDA		260			288			337			326			1,211			304			312			315			931
Adjustments		—			8			—			—			8			(18	)		—			—			(18	)
Adjusted EBITDA	$	260		$	296		$	337		$	326		$	1,219		$	286		$	312		$	315		$	913

Statistics for Operated Assets
Gathering and Processing
Consolidated ⁽²⁾
Gathering volumes (Bcf/d) ⁽³⁾		3.47			5.14			5.20			5.50			5.19			5.47			5.51			5.60			5.52
Plant inlet natural gas volumes (Bcf/d)		1.13			1.14			1.21			1.10			1.15			0.92			1.06			1.12			1.04
NGL production (Mbbls/d)		47			49			45			32			43			25			40			61			42
NGL equity sales (Mbbls/d)		17			18			13			7			14			6			16			22			15
Non-consolidated ⁽⁴⁾
Gathering volumes (Bcf/d)		0.28			0.28			0.29			0.29			0.29			0.32			0.33			0.33			0.33
Plant inlet natural gas volumes (Bcf/d)		0.27			0.28			0.29			0.29			0.28			0.32			0.32			0.32			0.32
NGL production (Mbbls/d)		31			32			34			32			33			37			38			38			38
NGL and Crude Oil Transportation volumes (Mbbls/d) ⁽⁵⁾		132			162			189			151			158			161			217			244			208

(1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges.
(2) Excludes volumes associated with equity-method investments that are not consolidated in our results.
(3) Includes 100% of the volumes associated with the Trace Acquisition gathering assets after the purchase on April 29, 2022. Average volumes were calculated over the period owned.
(4) Includes 100% of the volumes associated with operated equity-method investments, including Rocky Mountain Midstream.
(5) Includes 100% of the volumes associated with operated equity-method investments, including Overland Pass Pipeline Company and Rocky Mountain Midstream as well as volumes for our consolidated Bluestem pipeline.





Gas & NGL Marketing Services
(UNAUDITED)
	2022															2023
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			Year
Commodity margins	$	100		$	23		$	39		$	161		$	323		$	265		$	(2	)	$	38		$	301
Other fee revenues		1			—			1			1			3			1			—			—			1
Net unrealized gain (loss) from derivative instruments		(57	)		(288	)		5			66			(274	)		333			94			24			451
Operating and administrative costs		(31	)		(23	)		(24	)		(18	)		(96	)		(32	)		(24	)		(19	)		(75	)
Other segment income (expenses) - net		—			6			(1	)		(1	)		4			—			—			—			—
Modified EBITDA		13			(282	)		20			209			(40	)		567			68			43			678
Adjustments		52			288			18			(60	)		298			(336	)		(84	)		(27	)		(447	)
Adjusted EBITDA	$	65		$	6		$	38		$	149		$	258		$	231		$	(16	)	$	16		$	231

Statistics
Product Sales Volumes
Natural Gas (Bcf/d)		7.96			6.66			7.11			7.05			7.20			7.24			6.56			7.31			7.04
NGLs (Mbbls/d)		246			234			267			254			250			234			239			245			239





Other
(UNAUDITED)
	2022															2023
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			Year
Service revenues	$	9		$	7		$	6		$	2		$	24		$	3		$	5		$	4		$	12
Net realized product sales		96			142			180			184			602			120			97			127			344
Net unrealized gain (loss) from derivative instruments		(66	)		47			29			15			25			(6	)		(11	)		(1	)		(18	)
Operating and administrative costs		(33	)		(57	)		(62	)		(59	)		(211	)		(48	)		(54	)		(58	)		(160	)
Other segment income (expenses) - net		(1	)		—			(13	)		8			(6	)		5			5			10			20
Proportional Modified EBITDA of equity-method investments		—			—			—			—			—			—			(1	)		(1	)		(2	)
Modified EBITDA		5			139			140			150			434			74			41			81			196
Adjustments		66			(47	)		(13	)		(15	)		(9	)		6			11			1			18
Adjusted EBITDA	$	71		$	92		$	127		$	135		$	425		$	80		$	52		$	82		$	214

Statistics
Net Product Sales Volumes
Natural Gas (Bcf/d)		0.12			0.19			0.27			0.31			0.22			0.26			0.29			0.31			0.28
NGLs (Mbbls/d)		7			7			8			7			7			3			6			9			6
Crude Oil (Mbbls/d)		2			3			2			2			2			1			3			5			3





Capital Expenditures and Investments
(UNAUDITED)
	2022															2023
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr		2nd Qtr			3rd Qtr			Year

Capital expenditures:
Transmission & Gulf of Mexico	$	125		$	129		$	637		$	358		$	1,249		$	205	$	263		$	382		$	850
Northeast G&P		40			30			52			92			214			99		74			115			288
West		61			82			94			226			463			169		197			141			507
Other		65			74			58			130			327			72		76			52			200
Total ⁽¹⁾	$	291		$	315		$	841		$	806		$	2,253		$	545	$	610		$	690		$	1,845

Purchases of and contributions to equity-method investments:
Transmission & Gulf of Mexico	$	16		$	26		$	11		$	17		$	70		$	8	$	18		$	6		$	32
Northeast G&P		32			18			28			8			86			31		12			4			47
West		—			—			—			—			—			—		—			1			1
Other		8			—			1			1			10			—		—			—			—
Total	$	56		$	44		$	40		$	26		$	166		$	39	$	30		$	11		$	80

Summary:
Transmission & Gulf of Mexico	$	141		$	155		$	648		$	375		$	1,319		$	213	$	281		$	388		$	882
Northeast G&P		72			48			80			100			300			130		86			119			335
West		61			82			94			226			463			169		197			142			508
Other		73			74			59			131			337			72		76			52			200
Total	$	347		$	359		$	881		$	832		$	2,419		$	584	$	640		$	701		$	1,925

Capital investments:
Increases to property, plant, and equipment	$	260		$	382		$	907		$	845		$	2,394		$	484	$	684		$	792		$	1,960
Purchases of businesses, net of cash acquired		—			933			—			—			933			1,056		(3	)		(29	)		1,024
Purchases of and contributions to equity-method investments		56			44			40			26			166			39		30			11			80
Purchases of other long-term investments		—			3			3			5			11			2		1			2			5
Total	$	316		$	1,362		$	950		$	876		$	3,504		$	1,581	$	712		$	776		$	3,069

⁽¹⁾ Increases to property, plant, and equipment	$	260		$	382		$	907		$	845		$	2,394		$	484	$	684		$	792		$	1,960
Changes in related accounts payable and accrued liabilities		31			(67	)		(66	)		(39	)		(141	)		61		(74	)		(102	)		(115	)
Capital expenditures	$	291		$	315		$	841		$	806		$	2,253		$	545	$	610		$	690		$	1,845

Contributions from noncontrolling interests	$	3		$	5		$	7		$	3		$	18		$	3	$	15		$	—		$	18
Contributions in aid of construction	$	(3	)	$	9		$	2		$	4		$	12		$	11	$	7		$	2		$	20
Proceeds from sale of business	$	—		$	—		$	—		$	—		$	—		$	—	$	—		$	348		$	348
Proceeds from disposition of equity-method investments	$	—		$	—		$	7		$	—		$	7		$	—	$	—		$	—		$	—

Non-GAAP Measures

This news release and accompanying materials may include certain financial measures – adjusted EBITDA, adjusted income (“earnings”), adjusted earnings per share, available funds from operations and dividend coverage ratio – that are non-GAAP financial measures as defined under the rules of the SEC.

Our segment performance measure, modified EBITDA, is defined as net income (loss) before income (loss) from discontinued operations, income tax expense, net interest expense, equity earnings from equity-method investments, other net investing income, impairments of equity investments and goodwill, depreciation and amortization expense, and accretion expense associated with asset retirement obligations for nonregulated operations. We also add our proportional ownership share (based on ownership interest) of modified EBITDA of equity-method investments.

Adjusted EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations. Such items are excluded from net income to determine adjusted income and adjusted earnings per share. Management believes this measure provides investors meaningful insight into results from ongoing operations.

Available funds from operations (AFFO) is defined as cash flow from operations excluding the effect of changes in working capital and certain other changes in noncurrent assets and liabilities, reduced by preferred dividends and net distributions to noncontrolling interests. AFFO may be adjusted to exclude certain items that we characterize as unrepresentative of our ongoing operations.

This news release is accompanied by a reconciliation of these non-GAAP financial measures to their nearest GAAP financial measures. Management uses these financial measures because they are accepted financial indicators used by investors to compare company performance. In addition, management believes that these measures provide investors an enhanced perspective of the operating performance of assets and the cash that the business is generating.

Neither adjusted EBITDA, adjusted income, nor available funds from operations are intended to represent cash flows for the period, nor are they presented as an alternative to net income or cash flow from operations. They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles.




Reconciliation of Income (Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income
(UNAUDITED)
	2022															2023
(Dollars in millions, except per-share amounts)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			Year

Income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders	$	379		$	400		$	599		$	668		$	2,046		$	926		$	547		$	654		$	2,127

Income (loss) from continuing operations - diluted earnings (loss) per common share ⁽¹⁾	$	.31		$	.33		$	.49		$	.55		$	1.67		$	.76		$	.45		$	.54		$	1.74
Adjustments:
Transmission & Gulf of Mexico
Loss related to Eminence storage cavern abandonments and monitoring	$	—		$	—		$	19		$	12		$	31		$	—		$	—		$	—		$	—
Regulatory liability charges associated with decrease in Transco’s estimated deferred state income tax rate		—			—			15			—			15			—			—			—			—
Net unrealized (gain) loss from derivative instruments		—			—			(1	)		1			—			—			—			—			—
MountainWest acquisition and transition-related costs		—			—			—			—			—			13			17			3			33
Gain on sale of business		—			—			—			—			—			—			—			(130	)		(130	)
Total Transmission & Gulf of Mexico adjustments		—			—			33			13			46			13			17			(127	)		(97	)
Northeast G&P
Our share of accrual for loss contingency at Aux Sable Liquid Products LP		—			—			—			—			—			—			—			31			31
Total Northeast G&P adjustments		—			—			—			—			—			—			—			31			31
West
Trace acquisition costs		—			8			—			—			8			—			—			—			—
Gain from contract settlement		—			—			—			—			—			(18	)		—			—			(18	)
Total West adjustments		—			8			—			—			8			(18	)		—			—			(18	)
Gas & NGL Marketing Services
Amortization of purchase accounting inventory fair value adjustment		15			—			—			—			15			—			—			—			—
Impact of volatility on NGL linefill transactions		(20	)		—			23			6			9			(3	)		10			(3	)		4
Net unrealized (gain) loss from derivative instruments		57			288			(5	)		(66	)		274			(333	)		(94	)		(24	)		(451	)
Total Gas & NGL Marketing Services adjustments		52			288			18			(60	)		298			(336	)		(84	)		(27	)		(447	)
Other
Regulatory liability charge associated with decrease in Transco’s estimated deferred state income tax rate		—			—			5			—			5			—			—			—			—
Net unrealized (gain) loss from derivative instruments		66			(47	)		(29	)		(15	)		(25	)		6			11			1			18
Accrual for loss contingencies		—			—			11			—			11			—			—			—			—
Total Other adjustments		66			(47	)		(13	)		(15	)		(9	)		6			11			1			18
Adjustments included in Modified EBITDA		118			249			38			(62	)		343			(335	)		(56	)		(122	)		(513	)
Adjustments below Modified EBITDA
Amortization of intangible assets from Sequent acquisition		42			41			42			42			167			15			14			15			44
Depreciation adjustment related to Eminence storage cavern abandonments		—			—			(1	)		—			(1	)		—			—			—			—
		42			41			41			42			166			15			14			15			44
Total adjustments		160			290			79			(20	)		509			(320	)		(42	)		(107	)		(469	)
Less tax effect for above items		(40	)		(72	)		(17	)		5			(124	)		78			10			25			113
Adjustments for tax-related items ⁽²⁾		—			(134	)		(69	)		—			(203	)		—			—			(25	)		(25	)
Adjusted income from continuing operations available to common stockholders	$	499		$	484		$	592		$	653		$	2,228		$	684		$	515		$	547		$	1,746
Adjusted income from continuing operations - diluted earnings per common share ⁽¹⁾	$	.41		$	.40		$	.48		$	.53		$	1.82		$	.56		$	.42		$	.45		$	1.43
Weighted-average shares - diluted (thousands)		1,221,279			1,222,694			1,222,472			1,224,212			1,222,672			1,225,781			1,219,915			1,220,073			1,222,650

(1) The sum of earnings per share for the quarters may not equal the total earnings per share for the year due to changes in the weighted-average number of common shares outstanding.
(2) The second quarter of 2022 includes adjustments for the reversal of valuation allowance due to the expected utilization of certain deferred income tax assets and previously unrecognized tax benefits from the resolution of certain federal income tax audits. The third quarter of 2022 includes an unfavorable adjustment to reverse the net benefit primarily associated with a significant decrease in our estimated deferred state income tax rate, partially offset by an unfavorable revision to a state net operating loss carryforward. The third quarter of 2023 includes an adjustment associated with a further decrease in our estimated deferred state income tax rate.





Reconciliation of "Net Income (Loss)" to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA”
(UNAUDITED)
	2022															2023
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			Year

Net income (loss)	$	392		$	407		$	621		$	697		$	2,117		$	957		$	494		$	684		$	2,135
Provision (benefit) for income taxes		118			(45	)		96			256			425			284			175			176			635
Interest expense		286			281			291			289			1,147			294			306			314			914
Equity (earnings) losses		(136	)		(163	)		(193	)		(145	)		(637	)		(147	)		(160	)		(127	)		(434	)
Other investing (income) loss - net		(1	)		(2	)		(1	)		(12	)		(16	)		(8	)		(13	)		(24	)		(45	)
Proportional Modified EBITDA of equity-method investments		225			250			273			231			979			229			249			215			693
Depreciation and amortization expenses		498			506			500			505			2,009			506			515			521			1,542
Accretion expense associated with asset retirement obligations for nonregulated operations		11			13			12			15			51			15			14			14			43
(Income) loss from discontinued operations, net of tax		—			—			—			—			—			—			87			1			88
Modified EBITDA	$	1,393		$	1,247		$	1,599		$	1,836		$	6,075		$	2,130		$	1,667		$	1,774		$	5,571

Transmission & Gulf of Mexico	$	697		$	652		$	638		$	687		$	2,674		$	715		$	731		$	881		$	2,327
Northeast G&P		418			450			464			464			1,796			470			515			454			1,439
West		260			288			337			326			1,211			304			312			315			931
Gas & NGL Marketing Services		13			(282	)		20			209			(40	)		567			68			43			678
Other		5			139			140			150			434			74			41			81			196
Total Modified EBITDA	$	1,393		$	1,247		$	1,599		$	1,836		$	6,075		$	2,130		$	1,667		$	1,774		$	5,571

Adjustments ⁽¹⁾:
Transmission & Gulf of Mexico	$	—		$	—		$	33		$	13		$	46		$	13		$	17		$	(127	)	$	(97	)
Northeast G&P		—			—			—			—			—			—			—			31			31
West		—			8			—			—			8			(18	)		—			—			(18	)
Gas & NGL Marketing Services		52			288			18			(60	)		298			(336	)		(84	)		(27	)		(447	)
Other		66			(47	)		(13	)		(15	)		(9	)		6			11			1			18
Total Adjustments	$	118		$	249		$	38		$	(62	)	$	343		$	(335	)	$	(56	)	$	(122	)	$	(513	)

Adjusted EBITDA:
Transmission & Gulf of Mexico	$	697		$	652		$	671		$	700		$	2,720		$	728		$	748		$	754		$	2,230
Northeast G&P		418			450			464			464			1,796			470			515			485			1,470
West		260			296			337			326			1,219			286			312			315			913
Gas & NGL Marketing Services		65			6			38			149			258			231			(16	)		16			231
Other		71			92			127			135			425			80			52			82			214
Total Adjusted EBITDA	$	1,511		$	1,496		$	1,637		$	1,774		$	6,418		$	1,795		$	1,611		$	1,652		$	5,058

(1) Adjustments by segment are detailed in the "Reconciliation of Income (Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income," which is also included in these materials.





Reconciliation of Cash Flow from Operating Activities to Non-GAAP Available Funds from Operations (AFFO)
(UNAUDITED)
	2022															2023
(Dollars in millions, except coverage ratios)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			Year

Net cash provided (used) by operating activities	$	1,082		$	1,098		$	1,490		$	1,219		$	4,889		$	1,514		$	1,377		$	1,234		$	4,125
Exclude: Cash (provided) used by changes in:
Accounts receivable		3			794			(125	)		61			733			(1,269	)		(154	)		128			(1,295	)
Inventories, including write-downs		(178	)		177			77			(127	)		(51	)		(45	)		(19	)		7			(57	)
Other current assets and deferred charges		65			(50	)		47			(29	)		33			4			(28	)		29			5
Accounts payable		138			(828	)		(53	)		333			(410	)		1,017			203			(148	)		1,072
Accrued and other current liabilities		149			(125	)		(191	)		(42	)		(209	)		318			(246	)		42			114
Changes in current and noncurrent derivative assets and liabilities		(101	)		52			(37	)		(8	)		(94	)		(82	)		(37	)		(53	)		(172	)
Other, including changes in noncurrent assets and liabilities		67			65			73			11			216			40			47			53			140
Preferred dividends paid		(1	)		—			(1	)		(1	)		(3	)		(1	)		—			(1	)		(2	)
Dividends and distributions paid to noncontrolling interests		(37	)		(58	)		(46	)		(63	)		(204	)		(54	)		(58	)		(62	)		(174	)
Contributions from noncontrolling interests		3			5			7			3			18			3			15			—			18
Adjustment to exclude litigation-related charges in discontinued operations		—			—			—			—			—			—			115			1			116
Available funds from operations	$	1,190		$	1,130		$	1,241		$	1,357		$	4,918		$	1,445		$	1,215		$	1,230		$	3,890

Common dividends paid	$	518		$	517		$	518		$	518		$	2,071		$	546		$	545		$	544		$	1,635

Coverage ratio:
Available funds from operations divided by Common dividends paid		2.30			2.19			2.40			2.62			2.37			2.65			2.23			2.26			2.38





Reconciliation of Net Income (Loss) from Continuing Operations to Modified EBITDA, Non-GAAP Adjusted EBITDA and Cash Flow from Operating Activities to Non-GAAP Available Funds from Operations (AFFO)

	2023 Guidance
(Dollars in millions, except per-share amounts and coverage ratio)	Low		Mid			High

Net income (loss) from continuing operations	$	2,675	$	2,750		$	2,825
Provision (benefit) for income taxes		800		825			850
Interest expense				1,225
Equity (earnings) losses				(590	)
Proportional Modified EBITDA of equity-method investments				945
Depreciation and amortization expenses and accretion for asset retirement obligations associated with nonregulated operations				2,110
Other				(52	)
Modified EBITDA	$	7,113	$	7,213		$	7,313
EBITDA Adjustments				(513	)
Adjusted EBITDA	$	6,600	$	6,700		$	6,800

Net income (loss) from continuing operations	$	2,675	$	2,750		$	2,825
Less: Net income (loss) attributable to noncontrolling interests & preferred dividends				130
Net income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders	$	2,545	$	2,620		$	2,695

Adjustments:
Adjustments included in Modified EBITDA ⁽¹⁾				(513	)
Adjustments below Modified EBITDA ⁽²⁾				59
Allocation of adjustments to noncontrolling interests				—
Total adjustments				(454	)
Less tax effect for above items ⁽³⁾				84
Adjusted income from continuing operations available to common stockholders	$	2,175	$	2,250		$	2,325
Adjusted income from continuing operations - diluted earnings per common share	$	1.78	$	1.84		$	1.90
Weighted-average shares - diluted (millions)				1,222

Available Funds from Operations (AFFO):
Net cash provided by operating activities (net of changes in working capital, changes in current and noncurrent derivative assets and liabilities, and changes in other, including changes in noncurrent assets and liabilities)	$	5,075	$	5,175		$	5,275
Preferred dividends paid				(3	)
Dividends and distributions paid to noncontrolling interests				(210	)
Contributions from noncontrolling interests				22
Adjustment to exclude litigation-related charges in discontinued operations				116
Available funds from operations (AFFO)	$	5,000	$	5,100		$	5,200
AFFO per common share	$	4.09	$	4.17		$	4.26
Common dividends paid			$	2,180
Coverage Ratio (AFFO/Common dividends paid)	2.29x		2.34x			2.39x

(1) 1Q, 2Q and 3Q adjustments of ($513) million as shown in the "Reconciliation of Income/(Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income"
(2) Includes 1Q, 2Q and 3Q amortization of intangible assets from Sequent acquisition of $44 million and 4Q amortization of $15 million
(3) Includes 1Q, 2Q and 3Q tax on adjustments of $113 million, 3Q adjustment associated with a further decrease in our estimated deferred state income tax rate of ($25) million, and 4Q tax on adjustments of ($4) million

Forward-Looking Statements

The reports, filings, and other public announcements of The Williams Companies, Inc. (Williams) may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). These forward-looking statements relate to anticipated financial performance, management’s plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions, and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995.

All statements, other than statements of historical facts, included in this report that address activities, events, or developments that we expect, believe, or anticipate will exist or may occur in the future, are forward-looking statements. Forward-looking statements can be identified by various forms of words such as “anticipates,” “believes,” “seeks,” “could,” “may,” “should,” “continues,” “estimates,” “expects,” “forecasts,” “intends,” “might,” “goals,” “objectives,” “targets,” “planned,” “potential,” “projects,” “scheduled,” “will,” “assumes,” “guidance,” “outlook,” “in-service date,” or other similar expressions. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to management and include, among others, statements regarding:

Levels of dividends to Williams stockholders;
Future credit ratings of Williams and its affiliates;
Amounts and nature of future capital expenditures;
Expansion and growth of our business and operations;
Expected in-service dates for capital projects;
Financial condition and liquidity;
Business strategy;
Cash flow from operations or results of operations;
Seasonality of certain business components;
Natural gas, natural gas liquids and crude oil prices, supply, and demand;
Demand for our services;

Forward-looking statements are based on numerous assumptions, uncertainties, and risks that could cause future events or results to be materially different from those stated or implied in this report. Many of the factors that will determine these results are beyond our ability to control or predict. Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include, among others, the following:

Availability of supplies, market demand, and volatility of prices;
Development and rate of adoption of alternative energy sources;
The impact of existing and future laws and regulations, the regulatory environment, environmental matters, and litigation, as well as our ability to obtain necessary permits and approvals, and achieve favorable rate proceeding outcomes;
Our exposure to the credit risk of our customers and counterparties;
Our ability to acquire new businesses and assets and successfully integrate those operations and assets into existing businesses as well as successfully expand our facilities, and to consummate asset sales on acceptable terms;
Whether we are able to successfully identify, evaluate, and timely execute our capital projects and investment opportunities;
The strength and financial resources of our competitors and the effects of competition;
The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate;
Whether we will be able to effectively execute our financing plan;
Increasing scrutiny and changing expectations from stakeholders with respect to our environmental, social, and governance practices;
The physical and financial risks associated with climate change;
The impacts of operational and developmental hazards and unforeseen interruptions;
The risks resulting from outbreaks or other public health crises, including COVID-19;
Risks associated with weather and natural phenomena, including climate conditions and physical damage to our facilities;
Acts of terrorism, cybersecurity incidents, and related disruptions;
Our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans;
Changes in maintenance and construction costs, as well as our ability to obtain sufficient construction-related inputs, including skilled labor;
Inflation, interest rates, and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers);
Risks related to financing, including restrictions stemming from debt agreements, future changes in credit ratings as determined by nationally recognized credit rating agencies, and the availability and cost of capital;
The ability of the members of the Organization of Petroleum Exporting Countries and other oil exporting nations to agree to and maintain oil price and production controls and the impact on domestic production;
Changes in the current geopolitical situation, including the Russian invasion of Ukraine and the developing conflict between Israel and Hamas;
Changes in U.S. governmental administration and policies;
Whether we are able to pay current and expected levels of dividends;
Additional risks described in our filings with the Securities and Exchange Commission (SEC).

Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement, we caution investors not to unduly rely on our forward-looking statements. We disclaim any obligations to, and do not intend to, update the above list or announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments.

In addition to causing our actual results to differ, the factors listed above and referred to below may cause our intentions to change from those statements of intention set forth in this report. Such changes in our intentions may also cause our results to differ. We may change our intentions, at any time and without notice, based upon changes in such factors, our assumptions, or otherwise.

Because forward-looking statements involve risks and uncertainties, we caution that there are important factors, in addition to those listed above, that may cause actual results to differ materially from those contained in the forward-looking statements. For a detailed discussion of those factors, see Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 27, 2023, as may be supplemented by disclosures in Part II, Item 1A. Risk Factors in subsequent Quarterly Reports on Form 10-Q.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231101330521/en/

Contacts

MEDIA CONTACT:

media@williams.com

(800) 945-8723

INVESTOR CONTACTS:

Danilo Juvane

(918) 573-5075

Caroline Sardella

(918) 230-9992

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