Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Williams Delivers Strong First-Quarter Results; Positioned to Hit Top Half of 2024 Financial Guidance Range By: Williams via Business Wire May 06, 2024 at 16:15 PM EDT Williams (NYSE: WMB) today announced its unaudited financial results for the three months ended March 31, 2024. Business continues to outperform; solid execution on accretive acquisitions and organic growth driving immediate returns GAAP net income of $631 million, or $0.52 per diluted share (EPS) Adjusted net income of $719 million, or $0.59 per diluted share (Adj. EPS) – up 5% vs. 1Q 2023 Adjusted EBITDA of $1.934 billion – up $139 million or 8% vs. 1Q 2023 Cash flow from operations (CFFO) of $1.234 billion Available funds from operations (AFFO) of $1.507 billion – up $62 million or 4% vs. 1Q 2023 Dividend coverage ratio of 2.60x (AFFO basis) Record contracted transmission capacity of 33.9 Bcf/d – up 4.3% from 1Q 2023 Strong 1Q performance driving expectations to top half of 2024 financial guidance range Recent acquisitions and large roster of projects in execution building long-term value Closed acquisition of 6 storage facilities with total capacity of 115 Bcf across Louisiana and Mississippi, strategically located to serve growing LNG exports and power generation demand Placed Transco's Carolina Market Link into service 1Q 2024 Received FERC notice to proceed on Transco's Commonwealth Energy Connector Commenced construction on Transco's Southside Reliability Enhancement and Southeast Energy Connector First phase of Transco's Regional Energy Access continued to deliver earnings with second phase on track to come online in 4Q 2024 Received FERC certificate for Transco's Alabama Georgia Connector and Texas to Louisiana Energy Pathway Pre-filed FERC application for Transco's ~1.6 Bcf/d Southeast Supply Enhancement Continued execution of additional transmission, gathering & processing and Deepwater Gulf of Mexico projects CEO Perspective Alan Armstrong, president and chief executive officer, made the following comments: “Our 8 percent higher Adjusted EBITDA was driven by the continued outperformance of our transmission, storage and gathering businesses, which delivered 13 percent higher Adjusted EBITDA compared to the same period last year. Contracted transmission capacity achieved another record in the first quarter and our Transco projects recently placed into service contributed additional fee-based revenues, as did our immediately accretive acquisitions, including the Gulf Coast storage portfolio that we closed in the quarter. “Crisp execution by our teams in both integrating newly acquired assets and building large-scale organic projects has us on track to be in the top half of our original 2024 guidance range. As our natural gas-focused strategy continues to gain momentum, we are successfully executing a full slate of high return growth projects, with new regulatory milestones reached on seven of our FERC-regulated expansion projects so far this year and progressing on a healthy backlog of expansion opportunities to serve accelerating demand for natural gas. Armstrong added, “Our track record of generating predictable, growing earnings in all market cycles underscores the value of Williams as a resilient, long-term investment with a strong dividend. We’ve built a business positioned for the future, and we’re leveraging our existing infrastructure and project development capabilities to serve rising domestic and global security needs, while lowering emissions and creating sustainable value for our shareholders.” Williams Summary Financial Information 1Q 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. 2024 2023 GAAP Measures Net Income $ 631 $ 926 Net Income Per Share $ 0.52 $ 0.76 Cash Flow From Operations $ 1,234 $ 1,514 Non-GAAP Measures (1) Adjusted EBITDA $ 1,934 $ 1,795 Adjusted Net Income $ 719 $ 684 Adjusted Earnings Per Share $ 0.59 $ 0.56 Available Funds from Operations $ 1,507 $ 1,445 Dividend Coverage Ratio 2.60x 2.65x Other Debt-to-Adjusted EBITDA at Quarter End (2) 3.79x 3.57x Capital Investments (Excluding Acquisitions) (3) (4) $ 563 $ 525 (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 include 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) First-quarter 2024 capital excludes $1.851 billion for the acquisition of the Gulf Coast Storage assets, which closed in January 2024. First-quarter 2023 capital excludes $1.056 billion for the acquisition of MountainWest, which closed in February 2023. GAAP Measures First-quarter 2024 net income decreased by $295 million compared to the prior year reflecting an unfavorable change of $419 million in net unrealized gains/losses on commodity derivatives, higher net interest expense from recent debt issuances and retirements, as well as higher operating costs, depreciation and interest expense resulting from recent acquisitions. These unfavorable changes were partially offset by a $211 million increase in service revenues driven by acquisitions and expansion projects. The tax provision decreased primarily due to lower pretax income. First-quarter 2024 cash flow from operations decreased compared to the prior year primarily due to unfavorable net changes in both working capital and derivative collateral requirements. Non-GAAP Measures First-quarter 2024 Adjusted EBITDA increased by $139 million over the prior year, driven by the previously described favorable net contributions from acquisitions and expansion projects. First-quarter 2024 Adjusted Net Income improved by $35 million over 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 and the related income tax effects. First-quarter Available Funds From Operations (AFFO) increased by $62 million compared to the prior year primarily due to the change in operating results exclusive of non-cash items. 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 first-quarter 2024 Form 10-Q. First Quarter Amounts in millions Modified EBITDA Adjusted EBITDA 1Q 2024 1Q 2023 Change 1Q 2024 1Q 2023 Change Transmission & Gulf of Mexico $ 829 $ 715 $ 114 $ 839 $ 728 $ 111 Northeast G&P 504 470 34 504 470 34 West 327 304 23 328 286 42 Gas & NGL Marketing Services 101 567 (466 ) 189 231 (42 ) Other 76 74 2 74 80 (6 ) Total $ 1,837 $ 2,130 $ (293 ) $ 1,934 $ 1,795 $ 139 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 First-quarter 2024 Modified and Adjusted EBITDA improved compared to the prior year driven by favorable net contributions from the Gulf Coast Storage and MountainWest acquisitions and the Regional Energy Access expansion project. Modified EBITDA for both periods was impacted by one-time acquisition costs, which are excluded from Adjusted EBITDA. Northeast G&P First-quarter 2024 Modified and Adjusted EBITDA increased over the prior year driven by higher rates and volumes at Susquehanna Supply Hub, higher rates at Cardinal, and higher contribution from our Aux Sable investment, partially offset by lower volumes at Ohio Valley Midstream. West First-quarter 2024 Modified and Adjusted EBITDA increased compared to the prior year benefiting from the DJ Basin Acquisitions and improved commodity margins reflecting favorable changes in shrink prices related to the absence of a short-term gas price spike at Opal in 2023, partially offset by lower realized gains on natural gas hedges. Modified EBITDA was also impacted by the absence of a 2023 favorable contract settlement, which is excluded from Adjusted EBITDA. Gas & NGL Marketing Services First-quarter 2024 Modified EBITDA decreased from the prior year primarily reflecting lower commodity marketing margins and a $427 million net unfavorable change in unrealized gains/losses on commodity derivatives, which is excluded from Adjusted EBITDA. 2024 Financial Guidance After our strong first-quarter performance, Williams expects Adjusted EBITDA at the top half of its 2024 guidance range of $6.8 billion and $7.1 billion. The company continues to expect 2024 growth capex between $1.45 billion and $1.75 billion and maintenance capex between $1.1 billion and $1.3 billion, which includes capital of $350 million for emissions reduction and modernization initiatives. For 2025, the company continues to expect Adjusted EBITDA between $7.2 billion and $7.6 billion with growth capex between $1.65 billion and $1.95 billion and maintenance capex between $750 million and $850 million, which includes capital of $100 million based on midpoint for emissions reduction and modernization initiatives. Williams continues to anticipate a leverage ratio midpoint for 2024 of 3.85x and has increased the dividend by 6.1% on an annualized basis to $1.90 in 2024 from $1.79 in 2023. Williams' First-Quarter 2024 Materials to be Posted Shortly; Q&A Webcast Scheduled for Tomorrow Williams' first-quarter 2024 earnings presentation will be posted at www.williams.com. The company's first-quarter 2024 earnings conference call and webcast with analysts and investors is scheduled for Tuesday, May 7, 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://register.vevent.com/register/BI2af82b1f777e448892c40bafefdffe05 A webcast link to the conference call will be provided on Williams' Investor Relations website. A replay of the webcast will also be available on the website for at least 90 days following the event. About Williams Williams (NYSE: WMB) is a trusted energy industry leader committed to safely, reliably, and responsibly meeting growing energy demand. We use our 33,000-mile pipeline infrastructure to move a third of the nation’s natural gas to where it's needed most, supplying the energy used to heat our homes, cook our food and generate low-carbon electricity. For over a century, we’ve been driven by a passion for doing things the right way. Today, our team of problem solvers is leading the charge into the clean energy future – by powering the global economy while delivering immediate emissions reductions within our natural gas network and investing in new energy technologies. Learn more at www.williams.com. The Williams Companies, Inc. Consolidated Statement of Income (Unaudited) Three Months Ended March 31, 2024 2023 (Millions, except per-share amounts) Revenues: Service revenues $ 1,905 $ 1,694 Service revenues – commodity consideration 30 36 Product sales 845 845 Net gain (loss) from commodity derivatives (9 ) 506 Total revenues 2,771 3,081 Costs and expenses: Product costs 526 553 Net processing commodity expenses 5 54 Operating and maintenance expenses 511 463 Depreciation and amortization expenses 548 506 Selling, general, and administrative expenses 186 176 Other (income) expense – net (17 ) (31 ) Total costs and expenses 1,759 1,721 Operating income (loss) 1,012 1,360 Equity earnings (losses) 137 147 Other investing income (loss) – net 24 8 Interest expense (349 ) (294 ) Other income (expense) – net 31 20 Income (loss) before income taxes 855 1,241 Less: Provision (benefit) for income taxes 193 284 Net income (loss) 662 957 Less: Net income (loss) attributable to noncontrolling interests 30 30 Net income (loss) attributable to The Williams Companies, Inc. 632 927 Less: Preferred stock dividends 1 1 Net income (loss) available to common stockholders $ 631 $ 926 Basic earnings (loss) per common share: Net income (loss) available to common stockholders $ .52 $ .76 Weighted-average shares (thousands) 1,218,155 1,219,465 Diluted earnings (loss) per common share: Net income (loss) available to common stockholders $ .52 $ .76 Weighted-average shares (thousands) 1,222,222 1,225,781 The Williams Companies, Inc. Consolidated Balance Sheet (Unaudited) March 31, December 31, 2024 2023 (Millions, except per-share amounts) ASSETS Current assets: Cash and cash equivalents $ 667 $ 2,150 Trade accounts and other receivables (net of allowance of $3 at March 31, 2024 and December 31, 2023) 1,355 1,655 Inventories 239 274 Derivative assets 173 239 Other current assets and deferred charges 176 195 Total current assets 2,610 4,513 Investments 4,639 4,637 Property, plant and equipment 54,305 51,842 Accumulated depreciation and amortization (17,854 ) (17,531 ) Property, plant, and equipment – net 36,451 34,311 Intangible assets – net of accumulated amortization 7,496 7,593 Regulatory assets, deferred charges, and other 1,551 1,573 Total assets $ 52,747 $ 52,627 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 1,042 $ 1,379 Derivative liabilities 75 105 Accrued and other current liabilities 1,077 1,284 Commercial paper — 725 Long-term debt due within one year 2,787 2,337 Total current liabilities 4,981 5,830 Long-term debt 24,100 23,376 Deferred income tax liabilities 4,001 3,846 Regulatory liabilities, deferred income, and other 4,735 4,684 Contingent liabilities and commitments Equity: Stockholders’ equity: Preferred stock ($1 par value; 30 million shares authorized at March 31, 2024 and December 31, 2023; 35,000 shares issued at March 31, 2024 and December 31, 2023) 35 35 Common stock ($1 par value; 1,470 million shares authorized at March 31, 2024 and December 31, 2023; 1,258 million shares issued at March 31, 2024 and 1,256 million shares issued at December 31, 2023) 1,258 1,256 Capital in excess of par value 24,564 24,578 Retained deficit (12,238 ) (12,287 ) Accumulated other comprehensive income (loss) 10 — Treasury stock, at cost (39 million shares at March 31, 2024 and December 31, 2023 of common stock) (1,180 ) (1,180 ) Total stockholders’ equity 12,449 12,402 Noncontrolling interests in consolidated subsidiaries 2,481 2,489 Total equity 14,930 14,891 Total liabilities and equity $ 52,747 $ 52,627 The Williams Companies, Inc. Consolidated Statement of Cash Flows (Unaudited) Three Months Ended March 31, 2024 2023 (Millions) OPERATING ACTIVITIES: Net income (loss) $ 662 $ 957 Adjustments to reconcile to net cash provided (used) by operating activities: Depreciation and amortization 548 506 Provision (benefit) for deferred income taxes 152 283 Equity (earnings) losses (137 ) (147 ) Distributions from equity-method investees 188 208 Net unrealized (gain) loss from commodity derivative instruments 92 (327 ) Inventory write-downs 4 18 Amortization of stock-based awards 24 17 Cash provided (used) by changes in current assets and liabilities: Accounts receivable 314 1,269 Inventories 34 27 Other current assets and deferred charges 9 (4 ) Accounts payable (309 ) (1,017 ) Accrued and other current liabilities (218 ) (318 ) Changes in current and noncurrent commodity derivative assets and liabilities (68 ) 82 Other, including changes in noncurrent assets and liabilities (61 ) (40 ) Net cash provided (used) by operating activities 1,234 1,514 FINANCING ACTIVITIES: Proceeds from (payments of) commercial paper – net (723 ) (352 ) Proceeds from long-term debt 2,099 1,502 Payments of long-term debt (1,012 ) (7 ) Payments for debt issuance costs (16 ) (8 ) Proceeds from issuance of common stock 5 3 Purchases of treasury stock — (74 ) Common dividends paid (579 ) (546 ) Dividends and distributions paid to noncontrolling interests (64 ) (54 ) Contributions from noncontrolling interests 26 3 Other – net (17 ) (17 ) Net cash provided (used) by financing activities (281 ) 450 INVESTING ACTIVITIES: Property, plant, and equipment: Capital expenditures (1) (544 ) (545 ) Dispositions - net 5 (7 ) Purchases of businesses, net of cash acquired (1,851 ) (1,056 ) Purchases of and contributions to equity-method investments (52 ) (39 ) Other – net 6 8 Net cash provided (used) by investing activities (2,436 ) (1,639 ) Increase (decrease) in cash and cash equivalents (1,483 ) 325 Cash and cash equivalents at beginning of year 2,150 152 Cash and cash equivalents at end of period $ 667 $ 477 (1) Increases to property, plant, and equipment $ (509 ) $ (484 ) Changes in related accounts payable and accrued liabilities (35 ) (61 ) Capital expenditures $ (544 ) $ (545 ) Transmission & Gulf of Mexico (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Regulated interstate natural gas transportation, storage, and other revenues (1) $ 774 $ 786 $ 794 $ 822 $ 3,176 $ 836 Gathering, processing, storage and transportation revenues 100 104 114 100 418 137 Other fee revenues (1) 6 8 5 4 23 12 Commodity margins 10 8 7 8 33 9 Operating and administrative costs (1) (254 ) (254 ) (257 ) (270 ) (1,035 ) (254 ) Other segment income (expenses) - net (1) 26 31 36 26 119 43 Gain on sale of business — — 130 (1 ) 129 — Proportional Modified EBITDA of equity-method investments 53 48 52 52 205 46 Modified EBITDA 715 731 881 741 3,068 829 Adjustments 13 17 (127 ) 11 (86 ) 10 Adjusted EBITDA $ 728 $ 748 $ 754 $ 752 $ 2,982 $ 839 Statistics for Operated Assets Natural Gas Transmission (2) Transcontinental Gas Pipe Line Avg. daily transportation volumes (MMdth) 14.3 13.2 14.0 14.0 13.9 14.6 Avg. daily firm reserved capacity (MMdth) 19.5 19.4 19.4 19.3 19.4 20.3 Northwest Pipeline LLC Avg. daily transportation volumes (MMdth) 3.1 2.3 2.3 2.8 2.6 3.1 Avg. daily firm reserved capacity (MMdth) 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 4.2 3.9 4.3 Avg. daily firm reserved capacity (MMdth) 7.8 7.5 7.5 7.9 7.7 8.4 Gulfstream - Non-consolidated Avg. daily transportation volumes (MMdth) 1.0 1.2 1.4 1.1 1.2 1.0 Avg. daily firm reserved capacity (MMdth) 1.4 1.4 1.4 1.4 1.4 1.4 Gathering, Processing, and Crude Oil Transportation Consolidated (4) Gathering volumes (Bcf/d) 0.28 0.23 0.27 0.27 0.26 0.25 Plant inlet natural gas volumes (Bcf/d) 0.43 0.40 0.46 0.46 0.44 0.45 NGL production (Mbbls/d) 28 24 28 26 27 28 NGL equity sales (Mbbls/d) 7 5 6 5 6 5 Crude oil transportation volumes (Mbbls/d) 119 111 134 130 123 118 Non-consolidated (5) Gathering volumes (Bcf/d) 0.36 0.30 0.36 0.33 0.34 0.27 Plant inlet natural gas volumes (Bcf/d) 0.36 0.30 0.36 0.33 0.34 0.27 NGL production (Mbbls/d) 28 21 30 28 27 15 NGL equity sales (Mbbls/d) 8 3 8 7 7 3 (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) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Gathering, processing, transportation, and fractionation revenues $ 391 $ 431 $ 417 $ 411 $ 1,650 $ 411 Other fee revenues (1) 32 27 27 28 114 34 Commodity margins 5 (1 ) 7 1 12 11 Operating and administrative costs (1) (101 ) (101 ) (115 ) (107 ) (424 ) (108 ) Other segment income (expenses) - net — — (1 ) (9 ) (10 ) (1 ) Proportional Modified EBITDA of equity-method investments 143 159 119 153 574 157 Modified EBITDA 470 515 454 477 1,916 504 Adjustments — — 31 8 39 — Adjusted EBITDA $ 470 $ 515 $ 485 $ 485 $ 1,955 $ 504 Statistics for Operated Assets Gathering and Processing Consolidated (2) Gathering volumes (Bcf/d) 4.42 4.61 4.41 4.37 4.45 4.33 Plant inlet natural gas volumes (Bcf/d) 1.92 1.79 1.93 1.93 1.89 1.76 NGL production (Mbbls/d) 144 135 144 133 139 133 NGL equity sales (Mbbls/d) 1 1 — 1 1 1 Non-consolidated (3) Gathering volumes (Bcf/d) 6.97 7.03 6.83 6.85 6.92 6.79 Plant inlet natural gas volumes (Bcf/d) 0.77 0.93 0.99 1.01 0.93 0.98 NGL production (Mbbls/d) 54 64 71 69 65 72 NGL equity sales (Mbbls/d) 4 5 4 4 4 3 (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) Includes 100% of the volumes associated with operated equity-method investments, including the Laurel Mountain Midstream partnership and Blue Racer Midstream which we operate effective January 1, 2024; and the Bradford Supply Hub and the Marcellus South Supply Hub within the Appalachia Midstream Services partnership. West (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Net gathering, processing, transportation, storage, and fractionation revenues $ 382 $ 373 $ 371 $ 397 $ 1,523 $ 421 Other fee revenues (1) 5 7 4 8 24 8 Commodity margins (24 ) 18 21 19 34 12 Operating and administrative costs (1) (115 ) (122 ) (122 ) (144 ) (503 ) (139 ) Other segment income (expenses) - net 23 (7 ) (4 ) (14 ) (2 ) — Proportional Modified EBITDA of equity-method investments 33 43 45 41 162 25 Modified EBITDA 304 312 315 307 1,238 327 Adjustments (18 ) — — 16 (2 ) 1 Adjusted EBITDA $ 286 $ 312 $ 315 $ 323 $ 1,236 $ 328 Statistics for Operated Assets Gathering and Processing Consolidated (2) (4) Gathering volumes (Bcf/d) (3) 5.47 5.51 5.60 6.03 6.02 5.75 Plant inlet natural gas volumes (Bcf/d) 0.92 1.06 1.12 1.63 1.54 1.52 NGL production (Mbbls/d) 25 40 61 99 91 87 NGL equity sales (Mbbls/d) 6 16 22 14 14 6 Non-consolidated (5) Gathering volumes (Bcf/d) 0.32 0.33 0.33 — — — Plant inlet natural gas volumes (Bcf/d) 0.32 0.32 0.32 — — — NGL production (Mbbls/d) 37 38 38 — — — NGL and Crude Oil Transportation volumes (Mbbls/d) (6) 161 217 244 250 218 220 (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 Cureton Acquisition gathering assets after the purchase on November 30, 2023. Average volumes were calculated over the period owned. (4) Volumes associated with the Rocky Mountain Midstream (RMM) assets for 4th Qtr 2023 and Year 2023 are presented entirely in the Consolidated section. We acquired the remaining 50 percent of RMM on November 30, 2023. (5) Includes 100% of the volumes associated with operated equity-method investment RMM through 3rd Qtr 2023. (6) Includes 100% of the volumes associated with Overland Pass Pipeline Company (an operated equity-method investment), RMM (see Note 4 above) as well as volumes for our consolidated Bluestem pipeline. Gas & NGL Marketing Services (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Commodity margins $ 265 $ (2 ) $ 38 $ 88 $ 389 $ 236 Other fee revenues 1 — — — 1 — Net unrealized gain (loss) from derivative instruments 333 94 24 208 659 (95 ) Operating and administrative costs (32 ) (24 ) (19 ) (24 ) (99 ) (40 ) Modified EBITDA 567 68 43 272 950 101 Adjustments (336 ) (84 ) (27 ) (203 ) (650 ) 88 Adjusted EBITDA $ 231 $ (16 ) $ 16 $ 69 $ 300 $ 189 Statistics Product Sales Volumes Natural Gas (Bcf/d) 7.24 6.56 7.31 7.11 7.05 7.53 NGLs (Mbbls/d) 234 239 245 173 223 170 Other (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Service revenues $ 3 $ 5 $ 4 $ 4 $ 16 $ 4 Net realized product sales 120 97 127 145 489 113 Net unrealized gain (loss) from derivative instruments (6 ) (11 ) (1 ) 19 1 3 Operating and administrative costs (48 ) (54 ) (58 ) (65 ) (225 ) (51 ) Other segment income (expenses) - net 5 5 10 8 28 7 Net gain from Energy Transfer litigation judgment — — — 534 534 — Proportional Modified EBITDA of equity-method investments — (1 ) (1 ) — (2 ) — Modified EBITDA 74 41 81 645 841 76 Adjustments 6 11 1 (553 ) (535 ) (2 ) Adjusted EBITDA $ 80 $ 52 $ 82 $ 92 $ 306 $ 74 Statistics Net Product Sales Volumes Natural Gas (Bcf/d) 0.26 0.29 0.31 0.30 0.29 0.28 NGLs (Mbbls/d) 3 6 9 10 7 8 Crude Oil (Mbbls/d) 1 3 5 7 4 5 Capital Expenditures and Investments (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr* Year* 1st Qtr Capital expenditures: Transmission & Gulf of Mexico $ 205 $ 263 $ 382 $ 404 $ 1,254 $ 310 Northeast G&P 99 74 115 71 359 71 West 169 197 141 121 628 120 Other 72 76 52 75 275 43 Total (1) $ 545 $ 610 $ 690 $ 671 $ 2,516 $ 544 Purchases of and contributions to equity-method investments: Transmission & Gulf of Mexico $ 8 $ 18 $ 6 $ 9 $ 41 $ 27 Northeast G&P 31 12 4 52 99 25 West — — 1 — 1 — Other — — — — — — Total $ 39 $ 30 $ 11 $ 61 $ 141 $ 52 Summary: Transmission & Gulf of Mexico $ 213 $ 281 $ 388 $ 413 $ 1,295 $ 337 Northeast G&P 130 86 119 123 458 96 West 169 197 142 121 629 120 Other 72 76 52 75 275 43 Total $ 584 $ 640 $ 701 $ 732 $ 2,657 $ 596 Capital investments: Increases to property, plant, and equipment $ 484 $ 684 $ 792 $ 604 $ 2,564 $ 509 Purchases of businesses, net of cash acquired 1,056 (3 ) (29 ) 544 1,568 1,851 Purchases of and contributions to equity-method investments 39 30 11 61 141 52 Purchases of other long-term investments 2 1 2 1 6 2 Total $ 1,581 $ 712 $ 776 $ 1,210 $ 4,279 $ 2,414 (1) Increases to property, plant, and equipment $ 484 $ 684 $ 792 $ 604 $ 2,564 $ 509 Changes in related accounts payable and accrued liabilities 61 (74 ) (102 ) 67 (48 ) 35 Capital expenditures $ 545 $ 610 $ 690 $ 671 $ 2,516 $ 544 Contributions from noncontrolling interests $ 3 $ 15 $ — $ — $ 18 $ 26 Contributions in aid of construction $ 11 $ 7 $ 2 $ 8 $ 28 $ 10 Proceeds from sale of business $ — $ — $ 348 $ (2 ) $ 346 $ — * Certain amounts for the fourth quarter of 2023 were revised to agree to final reported amounts. 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, 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 net income (loss) excluding the effect of certain noncash items, reduced by distributions from equity-method investees, net distributions to noncontrolling interests, and preferred dividends. AFFO may also 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) 2023 2024 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders $ 926 $ 547 $ 654 $ 1,146 $ 3,273 $ 631 Income (loss) from continuing operations - diluted earnings (loss) per common share (1) $ .76 $ .45 $ .54 $ .94 $ 2.68 $ .52 Adjustments: Transmission & Gulf of Mexico MountainWest acquisition and transition-related costs $ 13 $ 17 $ 3 $ 9 $ 42 $ — Gulf Coast Storage acquisition and transition-related costs* — — — 1 1 10 Gain on sale of business — — (130 ) 1 (129 ) — Total Transmission & Gulf of Mexico adjustments 13 17 (127 ) 11 (86 ) 10 Northeast G&P Accrual for loss contingency — — — 10 10 — Our share of accrual for loss contingency at Aux Sable Liquid Products LP — — 31 (2 ) 29 — Total Northeast G&P adjustments — — 31 8 39 — West Cureton acquisition and transition-related costs* — — — 6 6 1 Gain from contract settlement (18 ) — — — (18 ) — Impairment of assets held for sale �� — — — 10 10 — Total West adjustments (18 ) — — 16 (2 ) 1 Gas & NGL Marketing Services Impact of volatility on NGL linefill transactions* (3 ) 10 (3 ) 5 9 (6 ) Net unrealized (gain) loss from derivative instruments (333 ) (94 ) (24 ) (208 ) (659 ) 94 Total Gas & NGL Marketing Services adjustments (336 ) (84 ) (27 ) (203 ) (650 ) 88 Other Net unrealized (gain) loss from derivative instruments 6 11 1 (19 ) (1 ) (2 ) Net gain from Energy Transfer litigation judgment — — — (534 ) (534 ) — Total Other adjustments 6 11 1 (553 ) (535 ) (2 ) Adjustments included in Modified EBITDA (335 ) (56 ) (122 ) (721 ) (1,234 ) 97 Adjustments below Modified EBITDA Gain on remeasurement of RMM investment — — — (30 ) (30 ) — Imputed interest expense on deferred consideration obligations* — — — — — 12 Amortization of intangible assets from Sequent acquisition 15 14 15 15 59 7 15 14 15 (15 ) 29 19 Total adjustments (320 ) (42 ) (107 ) (736 ) (1,205 ) 116 Less tax effect for above items 78 10 25 178 291 (28 ) Adjustments for tax-related items (2) — — (25 ) — (25 ) — Adjusted income from continuing operations available to common stockholders $ 684 $ 515 $ 547 $ 588 $ 2,334 $ 719 Adjusted income from continuing operations - diluted earnings per common share (1) $ .56 $ .42 $ .45 $ .48 $ 1.91 $ .59 Weighted-average shares - diluted (thousands) 1,225,781 1,219,915 1,220,073 1,221,894 1,221,616 1,222,222 (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 third quarter of 2023 includes an adjustment associated with a decrease in our estimated deferred state income tax rate. *Amounts for the 2024 periods are included in Additional adjustments on the Reconciliation of Cash Flow from Operating Activities to Non-GAAP Available Funds from Operations (AFFO). Reconciliation of "Net Income (Loss)" to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA” (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Net income (loss) $ 957 $ 494 $ 684 $ 1,168 $ 3,303 $ 662 Provision (benefit) for income taxes 284 175 176 370 1,005 193 Interest expense 294 306 314 322 1,236 349 Equity (earnings) losses (147 ) (160 ) (127 ) (155 ) (589 ) (137 ) Other investing (income) loss - net (8 ) (13 ) (24 ) (63 ) (108 ) (24 ) Proportional Modified EBITDA of equity-method investments 229 249 215 246 939 228 Depreciation and amortization expenses 506 515 521 529 2,071 548 Accretion expense associated with asset retirement obligations for nonregulated operations 15 14 14 16 59 18 (Income) loss from discontinued operations, net of tax — 87 1 9 97 — Modified EBITDA $ 2,130 $ 1,667 $ 1,774 $ 2,442 $ 8,013 $ 1,837 Transmission & Gulf of Mexico $ 715 $ 731 $ 881 $ 741 $ 3,068 $ 829 Northeast G&P 470 515 454 477 1,916 504 West 304 312 315 307 1,238 327 Gas & NGL Marketing Services 567 68 43 272 950 101 Other 74 41 81 645 841 76 Total Modified EBITDA $ 2,130 $ 1,667 $ 1,774 $ 2,442 $ 8,013 $ 1,837 Adjustments (1): Transmission & Gulf of Mexico $ 13 $ 17 $ (127 ) $ 11 $ (86 ) $ 10 Northeast G&P — — 31 8 39 — West (18 ) — — 16 (2 ) 1 Gas & NGL Marketing Services (336 ) (84 ) (27 ) (203 ) (650 ) 88 Other 6 11 1 (553 ) (535 ) (2 ) Total Adjustments $ (335 ) $ (56 ) $ (122 ) $ (721 ) $ (1,234 ) $ 97 Adjusted EBITDA: Transmission & Gulf of Mexico $ 728 $ 748 $ 754 $ 752 $ 2,982 $ 839 Northeast G&P 470 515 485 485 1,955 504 West 286 312 315 323 1,236 328 Gas & NGL Marketing Services 231 (16 ) 16 69 300 189 Other 80 52 82 92 306 74 Total Adjusted EBITDA $ 1,795 $ 1,611 $ 1,652 $ 1,721 $ 6,779 $ 1,934 (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) 2023 2024 (Dollars in millions, except coverage ratios) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr** Year** 1st Qtr Net cash provided (used) by operating activities $ 1,514 $ 1,377 $ 1,234 $ 1,813 $ 5,938 $ 1,234 Exclude: Cash (provided) used by changes in: Accounts receivable (1,269 ) (154 ) 128 206 (1,089 ) (314 ) Inventories, including write-downs (45 ) (19 ) 7 14 (43 ) (38 ) Other current assets and deferred charges 4 (28 ) 29 (65 ) (60 ) (9 ) Accounts payable 1,017 203 (148 ) (63 ) 1,009 309 Accrued and other current liabilities 318 (246 ) 42 (95 ) 19 218 Changes in current and noncurrent commodity derivative assets and liabilities (82 ) (37 ) (53 ) (28 ) (200 ) 68 Other, including changes in noncurrent assets and liabilities 40 47 53 106 246 61 Preferred dividends paid (1 ) — (1 ) (1 ) (3 ) (1 ) Dividends and distributions paid to noncontrolling interests (54 ) (58 ) (62 ) (39 ) (213 ) (64 ) Contributions from noncontrolling interests 3 15 — — 18 26 Adjustment to exclude litigation-related charges in discontinued operations — 115 1 9 125 — Adjustment to exclude net gain from Energy Transfer litigation judgment — — — (534 ) (534 ) — Additional Adjustments * — — — — — 17 Available funds from operations $ 1,445 $ 1,215 $ 1,230 $ 1,323 $ 5,213 $ 1,507 Common dividends paid $ 546 $ 545 $ 544 $ 544 $ 2,179 $ 579 Coverage ratio: Available funds from operations divided by Common dividends paid 2.65 2.23 2.26 2.43 2.39 2.60 * See detail on Reconciliation of Income (Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income. ** Certain amounts for the fourth quarter of 2023 were revised to agree to final reported amounts, with no impact to previously reported AFFO for that period. 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) 2024 Guidance 2025 Guidance (Dollars in millions, except per-share amounts and coverage ratio) Low Mid High Low Mid High Net income (loss) from continuing operations $ 2,094 $ 2,219 $ 2,344 $ 2,373 $ 2,523 $ 2,673 Provision (benefit) for income taxes 670 695 720 735 785 835 Interest expense 1,380 1,390 Equity (earnings) losses (535 ) (610 ) Proportional Modified EBITDA of equity-method investments 895 990 Depreciation and amortization expenses and accretion for asset retirement obligations associated with nonregulated operations 2,270 2,325 Other (6 ) (8 ) Modified EBITDA $ 6,768 $ 6,918 $ 7,068 $ 7,195 $ 7,395 $ 7,595 EBITDA Adjustments 32 5 Adjusted EBITDA $ 6,800 $ 6,950 $ 7,100 $ 7,200 $ 7,400 $ 7,600 Net income (loss) from continuing operations $ 2,094 $ 2,219 $ 2,344 $ 2,373 $ 2,523 $ 2,673 Less: Net income (loss) attributable to noncontrolling interests and preferred dividends 115 115 Net income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders $ 1,979 $ 2,104 $ 2,229 $ 2,258 $ 2,408 $ 2,558 Adjustments: Adjustments included in Modified EBITDA (1) 32 5 Adjustments below Modified EBITDA (2) 29 18 Allocation of adjustments to noncontrolling interests — — Total adjustments 61 23 Less tax effect for above items (15 ) (6 ) Adjusted income from continuing operations available to common stockholders $ 2,025 $ 2,150 $ 2,275 $ 2,275 $ 2,425 $ 2,575 Adjusted income from continuing operations - diluted earnings per common share $ 1.65 $ 1.76 $ 1.86 $ 1.85 $ 1.97 $ 2.10 Weighted-average shares - diluted (millions) 1,224 1,228 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) $ 5,125 $ 5,250 $ 5,375 $ 5,295 $ 5,445 $ 5,595 Preferred dividends paid (3 ) (3 ) Dividends and distributions paid to noncontrolling interests (215 ) (235 ) Contributions from noncontrolling interests 18 18 Available funds from operations (AFFO) $ 4,925 $ 5,050 $ 5,175 $ 5,075 $ 5,225 $ 5,375 AFFO per common share $ 4.02 $ 4.13 $ 4.23 $ 4.13 $ 4.25 $ 4.38 Common dividends paid $ 2,320 5%-7% Dividend growth Coverage Ratio (AFFO/Common dividends paid) 2.12x 2.18x 2.23x ~2.12x (1) Adjustments reflect transaction and transition costs of acquisitions (2) Adjustments reflect amortization of intangible assets from Sequent acquisition 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, outcomes 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 and the ability of other energy companies with whom we conduct or seek to conduct business, to obtain necessary permits and approvals, and our ability to 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 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; 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 conflicts in the Middle East, including between Israel and Hamas and conflicts involving Iran and its proxy forces; 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, 2023, as filed with the SEC on February 21, 2024, and 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/20240506608318/en/Contacts MEDIA CONTACT: media@williams.com (800) 945-8723 INVESTOR CONTACTS: Danilo Juvane (918) 573-5075 Caroline Sardella (918) 230-9992 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Williams Delivers Strong First-Quarter Results; Positioned to Hit Top Half of 2024 Financial Guidance Range By: Williams via Business Wire May 06, 2024 at 16:15 PM EDT Williams (NYSE: WMB) today announced its unaudited financial results for the three months ended March 31, 2024. Business continues to outperform; solid execution on accretive acquisitions and organic growth driving immediate returns GAAP net income of $631 million, or $0.52 per diluted share (EPS) Adjusted net income of $719 million, or $0.59 per diluted share (Adj. EPS) – up 5% vs. 1Q 2023 Adjusted EBITDA of $1.934 billion – up $139 million or 8% vs. 1Q 2023 Cash flow from operations (CFFO) of $1.234 billion Available funds from operations (AFFO) of $1.507 billion – up $62 million or 4% vs. 1Q 2023 Dividend coverage ratio of 2.60x (AFFO basis) Record contracted transmission capacity of 33.9 Bcf/d – up 4.3% from 1Q 2023 Strong 1Q performance driving expectations to top half of 2024 financial guidance range Recent acquisitions and large roster of projects in execution building long-term value Closed acquisition of 6 storage facilities with total capacity of 115 Bcf across Louisiana and Mississippi, strategically located to serve growing LNG exports and power generation demand Placed Transco's Carolina Market Link into service 1Q 2024 Received FERC notice to proceed on Transco's Commonwealth Energy Connector Commenced construction on Transco's Southside Reliability Enhancement and Southeast Energy Connector First phase of Transco's Regional Energy Access continued to deliver earnings with second phase on track to come online in 4Q 2024 Received FERC certificate for Transco's Alabama Georgia Connector and Texas to Louisiana Energy Pathway Pre-filed FERC application for Transco's ~1.6 Bcf/d Southeast Supply Enhancement Continued execution of additional transmission, gathering & processing and Deepwater Gulf of Mexico projects CEO Perspective Alan Armstrong, president and chief executive officer, made the following comments: “Our 8 percent higher Adjusted EBITDA was driven by the continued outperformance of our transmission, storage and gathering businesses, which delivered 13 percent higher Adjusted EBITDA compared to the same period last year. Contracted transmission capacity achieved another record in the first quarter and our Transco projects recently placed into service contributed additional fee-based revenues, as did our immediately accretive acquisitions, including the Gulf Coast storage portfolio that we closed in the quarter. “Crisp execution by our teams in both integrating newly acquired assets and building large-scale organic projects has us on track to be in the top half of our original 2024 guidance range. As our natural gas-focused strategy continues to gain momentum, we are successfully executing a full slate of high return growth projects, with new regulatory milestones reached on seven of our FERC-regulated expansion projects so far this year and progressing on a healthy backlog of expansion opportunities to serve accelerating demand for natural gas. Armstrong added, “Our track record of generating predictable, growing earnings in all market cycles underscores the value of Williams as a resilient, long-term investment with a strong dividend. We’ve built a business positioned for the future, and we’re leveraging our existing infrastructure and project development capabilities to serve rising domestic and global security needs, while lowering emissions and creating sustainable value for our shareholders.” Williams Summary Financial Information 1Q 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. 2024 2023 GAAP Measures Net Income $ 631 $ 926 Net Income Per Share $ 0.52 $ 0.76 Cash Flow From Operations $ 1,234 $ 1,514 Non-GAAP Measures (1) Adjusted EBITDA $ 1,934 $ 1,795 Adjusted Net Income $ 719 $ 684 Adjusted Earnings Per Share $ 0.59 $ 0.56 Available Funds from Operations $ 1,507 $ 1,445 Dividend Coverage Ratio 2.60x 2.65x Other Debt-to-Adjusted EBITDA at Quarter End (2) 3.79x 3.57x Capital Investments (Excluding Acquisitions) (3) (4) $ 563 $ 525 (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 include 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) First-quarter 2024 capital excludes $1.851 billion for the acquisition of the Gulf Coast Storage assets, which closed in January 2024. First-quarter 2023 capital excludes $1.056 billion for the acquisition of MountainWest, which closed in February 2023. GAAP Measures First-quarter 2024 net income decreased by $295 million compared to the prior year reflecting an unfavorable change of $419 million in net unrealized gains/losses on commodity derivatives, higher net interest expense from recent debt issuances and retirements, as well as higher operating costs, depreciation and interest expense resulting from recent acquisitions. These unfavorable changes were partially offset by a $211 million increase in service revenues driven by acquisitions and expansion projects. The tax provision decreased primarily due to lower pretax income. First-quarter 2024 cash flow from operations decreased compared to the prior year primarily due to unfavorable net changes in both working capital and derivative collateral requirements. Non-GAAP Measures First-quarter 2024 Adjusted EBITDA increased by $139 million over the prior year, driven by the previously described favorable net contributions from acquisitions and expansion projects. First-quarter 2024 Adjusted Net Income improved by $35 million over 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 and the related income tax effects. First-quarter Available Funds From Operations (AFFO) increased by $62 million compared to the prior year primarily due to the change in operating results exclusive of non-cash items. 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 first-quarter 2024 Form 10-Q. First Quarter Amounts in millions Modified EBITDA Adjusted EBITDA 1Q 2024 1Q 2023 Change 1Q 2024 1Q 2023 Change Transmission & Gulf of Mexico $ 829 $ 715 $ 114 $ 839 $ 728 $ 111 Northeast G&P 504 470 34 504 470 34 West 327 304 23 328 286 42 Gas & NGL Marketing Services 101 567 (466 ) 189 231 (42 ) Other 76 74 2 74 80 (6 ) Total $ 1,837 $ 2,130 $ (293 ) $ 1,934 $ 1,795 $ 139 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 First-quarter 2024 Modified and Adjusted EBITDA improved compared to the prior year driven by favorable net contributions from the Gulf Coast Storage and MountainWest acquisitions and the Regional Energy Access expansion project. Modified EBITDA for both periods was impacted by one-time acquisition costs, which are excluded from Adjusted EBITDA. Northeast G&P First-quarter 2024 Modified and Adjusted EBITDA increased over the prior year driven by higher rates and volumes at Susquehanna Supply Hub, higher rates at Cardinal, and higher contribution from our Aux Sable investment, partially offset by lower volumes at Ohio Valley Midstream. West First-quarter 2024 Modified and Adjusted EBITDA increased compared to the prior year benefiting from the DJ Basin Acquisitions and improved commodity margins reflecting favorable changes in shrink prices related to the absence of a short-term gas price spike at Opal in 2023, partially offset by lower realized gains on natural gas hedges. Modified EBITDA was also impacted by the absence of a 2023 favorable contract settlement, which is excluded from Adjusted EBITDA. Gas & NGL Marketing Services First-quarter 2024 Modified EBITDA decreased from the prior year primarily reflecting lower commodity marketing margins and a $427 million net unfavorable change in unrealized gains/losses on commodity derivatives, which is excluded from Adjusted EBITDA. 2024 Financial Guidance After our strong first-quarter performance, Williams expects Adjusted EBITDA at the top half of its 2024 guidance range of $6.8 billion and $7.1 billion. The company continues to expect 2024 growth capex between $1.45 billion and $1.75 billion and maintenance capex between $1.1 billion and $1.3 billion, which includes capital of $350 million for emissions reduction and modernization initiatives. For 2025, the company continues to expect Adjusted EBITDA between $7.2 billion and $7.6 billion with growth capex between $1.65 billion and $1.95 billion and maintenance capex between $750 million and $850 million, which includes capital of $100 million based on midpoint for emissions reduction and modernization initiatives. Williams continues to anticipate a leverage ratio midpoint for 2024 of 3.85x and has increased the dividend by 6.1% on an annualized basis to $1.90 in 2024 from $1.79 in 2023. Williams' First-Quarter 2024 Materials to be Posted Shortly; Q&A Webcast Scheduled for Tomorrow Williams' first-quarter 2024 earnings presentation will be posted at www.williams.com. The company's first-quarter 2024 earnings conference call and webcast with analysts and investors is scheduled for Tuesday, May 7, 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://register.vevent.com/register/BI2af82b1f777e448892c40bafefdffe05 A webcast link to the conference call will be provided on Williams' Investor Relations website. A replay of the webcast will also be available on the website for at least 90 days following the event. About Williams Williams (NYSE: WMB) is a trusted energy industry leader committed to safely, reliably, and responsibly meeting growing energy demand. We use our 33,000-mile pipeline infrastructure to move a third of the nation’s natural gas to where it's needed most, supplying the energy used to heat our homes, cook our food and generate low-carbon electricity. For over a century, we’ve been driven by a passion for doing things the right way. Today, our team of problem solvers is leading the charge into the clean energy future – by powering the global economy while delivering immediate emissions reductions within our natural gas network and investing in new energy technologies. Learn more at www.williams.com. The Williams Companies, Inc. Consolidated Statement of Income (Unaudited) Three Months Ended March 31, 2024 2023 (Millions, except per-share amounts) Revenues: Service revenues $ 1,905 $ 1,694 Service revenues – commodity consideration 30 36 Product sales 845 845 Net gain (loss) from commodity derivatives (9 ) 506 Total revenues 2,771 3,081 Costs and expenses: Product costs 526 553 Net processing commodity expenses 5 54 Operating and maintenance expenses 511 463 Depreciation and amortization expenses 548 506 Selling, general, and administrative expenses 186 176 Other (income) expense – net (17 ) (31 ) Total costs and expenses 1,759 1,721 Operating income (loss) 1,012 1,360 Equity earnings (losses) 137 147 Other investing income (loss) – net 24 8 Interest expense (349 ) (294 ) Other income (expense) – net 31 20 Income (loss) before income taxes 855 1,241 Less: Provision (benefit) for income taxes 193 284 Net income (loss) 662 957 Less: Net income (loss) attributable to noncontrolling interests 30 30 Net income (loss) attributable to The Williams Companies, Inc. 632 927 Less: Preferred stock dividends 1 1 Net income (loss) available to common stockholders $ 631 $ 926 Basic earnings (loss) per common share: Net income (loss) available to common stockholders $ .52 $ .76 Weighted-average shares (thousands) 1,218,155 1,219,465 Diluted earnings (loss) per common share: Net income (loss) available to common stockholders $ .52 $ .76 Weighted-average shares (thousands) 1,222,222 1,225,781 The Williams Companies, Inc. Consolidated Balance Sheet (Unaudited) March 31, December 31, 2024 2023 (Millions, except per-share amounts) ASSETS Current assets: Cash and cash equivalents $ 667 $ 2,150 Trade accounts and other receivables (net of allowance of $3 at March 31, 2024 and December 31, 2023) 1,355 1,655 Inventories 239 274 Derivative assets 173 239 Other current assets and deferred charges 176 195 Total current assets 2,610 4,513 Investments 4,639 4,637 Property, plant and equipment 54,305 51,842 Accumulated depreciation and amortization (17,854 ) (17,531 ) Property, plant, and equipment – net 36,451 34,311 Intangible assets – net of accumulated amortization 7,496 7,593 Regulatory assets, deferred charges, and other 1,551 1,573 Total assets $ 52,747 $ 52,627 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 1,042 $ 1,379 Derivative liabilities 75 105 Accrued and other current liabilities 1,077 1,284 Commercial paper — 725 Long-term debt due within one year 2,787 2,337 Total current liabilities 4,981 5,830 Long-term debt 24,100 23,376 Deferred income tax liabilities 4,001 3,846 Regulatory liabilities, deferred income, and other 4,735 4,684 Contingent liabilities and commitments Equity: Stockholders’ equity: Preferred stock ($1 par value; 30 million shares authorized at March 31, 2024 and December 31, 2023; 35,000 shares issued at March 31, 2024 and December 31, 2023) 35 35 Common stock ($1 par value; 1,470 million shares authorized at March 31, 2024 and December 31, 2023; 1,258 million shares issued at March 31, 2024 and 1,256 million shares issued at December 31, 2023) 1,258 1,256 Capital in excess of par value 24,564 24,578 Retained deficit (12,238 ) (12,287 ) Accumulated other comprehensive income (loss) 10 — Treasury stock, at cost (39 million shares at March 31, 2024 and December 31, 2023 of common stock) (1,180 ) (1,180 ) Total stockholders’ equity 12,449 12,402 Noncontrolling interests in consolidated subsidiaries 2,481 2,489 Total equity 14,930 14,891 Total liabilities and equity $ 52,747 $ 52,627 The Williams Companies, Inc. Consolidated Statement of Cash Flows (Unaudited) Three Months Ended March 31, 2024 2023 (Millions) OPERATING ACTIVITIES: Net income (loss) $ 662 $ 957 Adjustments to reconcile to net cash provided (used) by operating activities: Depreciation and amortization 548 506 Provision (benefit) for deferred income taxes 152 283 Equity (earnings) losses (137 ) (147 ) Distributions from equity-method investees 188 208 Net unrealized (gain) loss from commodity derivative instruments 92 (327 ) Inventory write-downs 4 18 Amortization of stock-based awards 24 17 Cash provided (used) by changes in current assets and liabilities: Accounts receivable 314 1,269 Inventories 34 27 Other current assets and deferred charges 9 (4 ) Accounts payable (309 ) (1,017 ) Accrued and other current liabilities (218 ) (318 ) Changes in current and noncurrent commodity derivative assets and liabilities (68 ) 82 Other, including changes in noncurrent assets and liabilities (61 ) (40 ) Net cash provided (used) by operating activities 1,234 1,514 FINANCING ACTIVITIES: Proceeds from (payments of) commercial paper – net (723 ) (352 ) Proceeds from long-term debt 2,099 1,502 Payments of long-term debt (1,012 ) (7 ) Payments for debt issuance costs (16 ) (8 ) Proceeds from issuance of common stock 5 3 Purchases of treasury stock — (74 ) Common dividends paid (579 ) (546 ) Dividends and distributions paid to noncontrolling interests (64 ) (54 ) Contributions from noncontrolling interests 26 3 Other – net (17 ) (17 ) Net cash provided (used) by financing activities (281 ) 450 INVESTING ACTIVITIES: Property, plant, and equipment: Capital expenditures (1) (544 ) (545 ) Dispositions - net 5 (7 ) Purchases of businesses, net of cash acquired (1,851 ) (1,056 ) Purchases of and contributions to equity-method investments (52 ) (39 ) Other – net 6 8 Net cash provided (used) by investing activities (2,436 ) (1,639 ) Increase (decrease) in cash and cash equivalents (1,483 ) 325 Cash and cash equivalents at beginning of year 2,150 152 Cash and cash equivalents at end of period $ 667 $ 477 (1) Increases to property, plant, and equipment $ (509 ) $ (484 ) Changes in related accounts payable and accrued liabilities (35 ) (61 ) Capital expenditures $ (544 ) $ (545 ) Transmission & Gulf of Mexico (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Regulated interstate natural gas transportation, storage, and other revenues (1) $ 774 $ 786 $ 794 $ 822 $ 3,176 $ 836 Gathering, processing, storage and transportation revenues 100 104 114 100 418 137 Other fee revenues (1) 6 8 5 4 23 12 Commodity margins 10 8 7 8 33 9 Operating and administrative costs (1) (254 ) (254 ) (257 ) (270 ) (1,035 ) (254 ) Other segment income (expenses) - net (1) 26 31 36 26 119 43 Gain on sale of business — — 130 (1 ) 129 — Proportional Modified EBITDA of equity-method investments 53 48 52 52 205 46 Modified EBITDA 715 731 881 741 3,068 829 Adjustments 13 17 (127 ) 11 (86 ) 10 Adjusted EBITDA $ 728 $ 748 $ 754 $ 752 $ 2,982 $ 839 Statistics for Operated Assets Natural Gas Transmission (2) Transcontinental Gas Pipe Line Avg. daily transportation volumes (MMdth) 14.3 13.2 14.0 14.0 13.9 14.6 Avg. daily firm reserved capacity (MMdth) 19.5 19.4 19.4 19.3 19.4 20.3 Northwest Pipeline LLC Avg. daily transportation volumes (MMdth) 3.1 2.3 2.3 2.8 2.6 3.1 Avg. daily firm reserved capacity (MMdth) 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 4.2 3.9 4.3 Avg. daily firm reserved capacity (MMdth) 7.8 7.5 7.5 7.9 7.7 8.4 Gulfstream - Non-consolidated Avg. daily transportation volumes (MMdth) 1.0 1.2 1.4 1.1 1.2 1.0 Avg. daily firm reserved capacity (MMdth) 1.4 1.4 1.4 1.4 1.4 1.4 Gathering, Processing, and Crude Oil Transportation Consolidated (4) Gathering volumes (Bcf/d) 0.28 0.23 0.27 0.27 0.26 0.25 Plant inlet natural gas volumes (Bcf/d) 0.43 0.40 0.46 0.46 0.44 0.45 NGL production (Mbbls/d) 28 24 28 26 27 28 NGL equity sales (Mbbls/d) 7 5 6 5 6 5 Crude oil transportation volumes (Mbbls/d) 119 111 134 130 123 118 Non-consolidated (5) Gathering volumes (Bcf/d) 0.36 0.30 0.36 0.33 0.34 0.27 Plant inlet natural gas volumes (Bcf/d) 0.36 0.30 0.36 0.33 0.34 0.27 NGL production (Mbbls/d) 28 21 30 28 27 15 NGL equity sales (Mbbls/d) 8 3 8 7 7 3 (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) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Gathering, processing, transportation, and fractionation revenues $ 391 $ 431 $ 417 $ 411 $ 1,650 $ 411 Other fee revenues (1) 32 27 27 28 114 34 Commodity margins 5 (1 ) 7 1 12 11 Operating and administrative costs (1) (101 ) (101 ) (115 ) (107 ) (424 ) (108 ) Other segment income (expenses) - net — — (1 ) (9 ) (10 ) (1 ) Proportional Modified EBITDA of equity-method investments 143 159 119 153 574 157 Modified EBITDA 470 515 454 477 1,916 504 Adjustments — — 31 8 39 — Adjusted EBITDA $ 470 $ 515 $ 485 $ 485 $ 1,955 $ 504 Statistics for Operated Assets Gathering and Processing Consolidated (2) Gathering volumes (Bcf/d) 4.42 4.61 4.41 4.37 4.45 4.33 Plant inlet natural gas volumes (Bcf/d) 1.92 1.79 1.93 1.93 1.89 1.76 NGL production (Mbbls/d) 144 135 144 133 139 133 NGL equity sales (Mbbls/d) 1 1 — 1 1 1 Non-consolidated (3) Gathering volumes (Bcf/d) 6.97 7.03 6.83 6.85 6.92 6.79 Plant inlet natural gas volumes (Bcf/d) 0.77 0.93 0.99 1.01 0.93 0.98 NGL production (Mbbls/d) 54 64 71 69 65 72 NGL equity sales (Mbbls/d) 4 5 4 4 4 3 (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) Includes 100% of the volumes associated with operated equity-method investments, including the Laurel Mountain Midstream partnership and Blue Racer Midstream which we operate effective January 1, 2024; and the Bradford Supply Hub and the Marcellus South Supply Hub within the Appalachia Midstream Services partnership. West (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Net gathering, processing, transportation, storage, and fractionation revenues $ 382 $ 373 $ 371 $ 397 $ 1,523 $ 421 Other fee revenues (1) 5 7 4 8 24 8 Commodity margins (24 ) 18 21 19 34 12 Operating and administrative costs (1) (115 ) (122 ) (122 ) (144 ) (503 ) (139 ) Other segment income (expenses) - net 23 (7 ) (4 ) (14 ) (2 ) — Proportional Modified EBITDA of equity-method investments 33 43 45 41 162 25 Modified EBITDA 304 312 315 307 1,238 327 Adjustments (18 ) — — 16 (2 ) 1 Adjusted EBITDA $ 286 $ 312 $ 315 $ 323 $ 1,236 $ 328 Statistics for Operated Assets Gathering and Processing Consolidated (2) (4) Gathering volumes (Bcf/d) (3) 5.47 5.51 5.60 6.03 6.02 5.75 Plant inlet natural gas volumes (Bcf/d) 0.92 1.06 1.12 1.63 1.54 1.52 NGL production (Mbbls/d) 25 40 61 99 91 87 NGL equity sales (Mbbls/d) 6 16 22 14 14 6 Non-consolidated (5) Gathering volumes (Bcf/d) 0.32 0.33 0.33 — — — Plant inlet natural gas volumes (Bcf/d) 0.32 0.32 0.32 — — — NGL production (Mbbls/d) 37 38 38 — — — NGL and Crude Oil Transportation volumes (Mbbls/d) (6) 161 217 244 250 218 220 (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 Cureton Acquisition gathering assets after the purchase on November 30, 2023. Average volumes were calculated over the period owned. (4) Volumes associated with the Rocky Mountain Midstream (RMM) assets for 4th Qtr 2023 and Year 2023 are presented entirely in the Consolidated section. We acquired the remaining 50 percent of RMM on November 30, 2023. (5) Includes 100% of the volumes associated with operated equity-method investment RMM through 3rd Qtr 2023. (6) Includes 100% of the volumes associated with Overland Pass Pipeline Company (an operated equity-method investment), RMM (see Note 4 above) as well as volumes for our consolidated Bluestem pipeline. Gas & NGL Marketing Services (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Commodity margins $ 265 $ (2 ) $ 38 $ 88 $ 389 $ 236 Other fee revenues 1 — — — 1 — Net unrealized gain (loss) from derivative instruments 333 94 24 208 659 (95 ) Operating and administrative costs (32 ) (24 ) (19 ) (24 ) (99 ) (40 ) Modified EBITDA 567 68 43 272 950 101 Adjustments (336 ) (84 ) (27 ) (203 ) (650 ) 88 Adjusted EBITDA $ 231 $ (16 ) $ 16 $ 69 $ 300 $ 189 Statistics Product Sales Volumes Natural Gas (Bcf/d) 7.24 6.56 7.31 7.11 7.05 7.53 NGLs (Mbbls/d) 234 239 245 173 223 170 Other (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Service revenues $ 3 $ 5 $ 4 $ 4 $ 16 $ 4 Net realized product sales 120 97 127 145 489 113 Net unrealized gain (loss) from derivative instruments (6 ) (11 ) (1 ) 19 1 3 Operating and administrative costs (48 ) (54 ) (58 ) (65 ) (225 ) (51 ) Other segment income (expenses) - net 5 5 10 8 28 7 Net gain from Energy Transfer litigation judgment — — — 534 534 — Proportional Modified EBITDA of equity-method investments — (1 ) (1 ) — (2 ) — Modified EBITDA 74 41 81 645 841 76 Adjustments 6 11 1 (553 ) (535 ) (2 ) Adjusted EBITDA $ 80 $ 52 $ 82 $ 92 $ 306 $ 74 Statistics Net Product Sales Volumes Natural Gas (Bcf/d) 0.26 0.29 0.31 0.30 0.29 0.28 NGLs (Mbbls/d) 3 6 9 10 7 8 Crude Oil (Mbbls/d) 1 3 5 7 4 5 Capital Expenditures and Investments (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr* Year* 1st Qtr Capital expenditures: Transmission & Gulf of Mexico $ 205 $ 263 $ 382 $ 404 $ 1,254 $ 310 Northeast G&P 99 74 115 71 359 71 West 169 197 141 121 628 120 Other 72 76 52 75 275 43 Total (1) $ 545 $ 610 $ 690 $ 671 $ 2,516 $ 544 Purchases of and contributions to equity-method investments: Transmission & Gulf of Mexico $ 8 $ 18 $ 6 $ 9 $ 41 $ 27 Northeast G&P 31 12 4 52 99 25 West — — 1 — 1 — Other — — — — — — Total $ 39 $ 30 $ 11 $ 61 $ 141 $ 52 Summary: Transmission & Gulf of Mexico $ 213 $ 281 $ 388 $ 413 $ 1,295 $ 337 Northeast G&P 130 86 119 123 458 96 West 169 197 142 121 629 120 Other 72 76 52 75 275 43 Total $ 584 $ 640 $ 701 $ 732 $ 2,657 $ 596 Capital investments: Increases to property, plant, and equipment $ 484 $ 684 $ 792 $ 604 $ 2,564 $ 509 Purchases of businesses, net of cash acquired 1,056 (3 ) (29 ) 544 1,568 1,851 Purchases of and contributions to equity-method investments 39 30 11 61 141 52 Purchases of other long-term investments 2 1 2 1 6 2 Total $ 1,581 $ 712 $ 776 $ 1,210 $ 4,279 $ 2,414 (1) Increases to property, plant, and equipment $ 484 $ 684 $ 792 $ 604 $ 2,564 $ 509 Changes in related accounts payable and accrued liabilities 61 (74 ) (102 ) 67 (48 ) 35 Capital expenditures $ 545 $ 610 $ 690 $ 671 $ 2,516 $ 544 Contributions from noncontrolling interests $ 3 $ 15 $ — $ — $ 18 $ 26 Contributions in aid of construction $ 11 $ 7 $ 2 $ 8 $ 28 $ 10 Proceeds from sale of business $ — $ — $ 348 $ (2 ) $ 346 $ — * Certain amounts for the fourth quarter of 2023 were revised to agree to final reported amounts. 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, 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 net income (loss) excluding the effect of certain noncash items, reduced by distributions from equity-method investees, net distributions to noncontrolling interests, and preferred dividends. AFFO may also 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) 2023 2024 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders $ 926 $ 547 $ 654 $ 1,146 $ 3,273 $ 631 Income (loss) from continuing operations - diluted earnings (loss) per common share (1) $ .76 $ .45 $ .54 $ .94 $ 2.68 $ .52 Adjustments: Transmission & Gulf of Mexico MountainWest acquisition and transition-related costs $ 13 $ 17 $ 3 $ 9 $ 42 $ — Gulf Coast Storage acquisition and transition-related costs* — — — 1 1 10 Gain on sale of business — — (130 ) 1 (129 ) — Total Transmission & Gulf of Mexico adjustments 13 17 (127 ) 11 (86 ) 10 Northeast G&P Accrual for loss contingency — — — 10 10 — Our share of accrual for loss contingency at Aux Sable Liquid Products LP — — 31 (2 ) 29 — Total Northeast G&P adjustments — — 31 8 39 — West Cureton acquisition and transition-related costs* — — — 6 6 1 Gain from contract settlement (18 ) — — — (18 ) — Impairment of assets held for sale �� — — — 10 10 — Total West adjustments (18 ) — — 16 (2 ) 1 Gas & NGL Marketing Services Impact of volatility on NGL linefill transactions* (3 ) 10 (3 ) 5 9 (6 ) Net unrealized (gain) loss from derivative instruments (333 ) (94 ) (24 ) (208 ) (659 ) 94 Total Gas & NGL Marketing Services adjustments (336 ) (84 ) (27 ) (203 ) (650 ) 88 Other Net unrealized (gain) loss from derivative instruments 6 11 1 (19 ) (1 ) (2 ) Net gain from Energy Transfer litigation judgment — — — (534 ) (534 ) — Total Other adjustments 6 11 1 (553 ) (535 ) (2 ) Adjustments included in Modified EBITDA (335 ) (56 ) (122 ) (721 ) (1,234 ) 97 Adjustments below Modified EBITDA Gain on remeasurement of RMM investment — — — (30 ) (30 ) — Imputed interest expense on deferred consideration obligations* — — — — — 12 Amortization of intangible assets from Sequent acquisition 15 14 15 15 59 7 15 14 15 (15 ) 29 19 Total adjustments (320 ) (42 ) (107 ) (736 ) (1,205 ) 116 Less tax effect for above items 78 10 25 178 291 (28 ) Adjustments for tax-related items (2) — — (25 ) — (25 ) — Adjusted income from continuing operations available to common stockholders $ 684 $ 515 $ 547 $ 588 $ 2,334 $ 719 Adjusted income from continuing operations - diluted earnings per common share (1) $ .56 $ .42 $ .45 $ .48 $ 1.91 $ .59 Weighted-average shares - diluted (thousands) 1,225,781 1,219,915 1,220,073 1,221,894 1,221,616 1,222,222 (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 third quarter of 2023 includes an adjustment associated with a decrease in our estimated deferred state income tax rate. *Amounts for the 2024 periods are included in Additional adjustments on the Reconciliation of Cash Flow from Operating Activities to Non-GAAP Available Funds from Operations (AFFO). Reconciliation of "Net Income (Loss)" to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA” (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Net income (loss) $ 957 $ 494 $ 684 $ 1,168 $ 3,303 $ 662 Provision (benefit) for income taxes 284 175 176 370 1,005 193 Interest expense 294 306 314 322 1,236 349 Equity (earnings) losses (147 ) (160 ) (127 ) (155 ) (589 ) (137 ) Other investing (income) loss - net (8 ) (13 ) (24 ) (63 ) (108 ) (24 ) Proportional Modified EBITDA of equity-method investments 229 249 215 246 939 228 Depreciation and amortization expenses 506 515 521 529 2,071 548 Accretion expense associated with asset retirement obligations for nonregulated operations 15 14 14 16 59 18 (Income) loss from discontinued operations, net of tax — 87 1 9 97 — Modified EBITDA $ 2,130 $ 1,667 $ 1,774 $ 2,442 $ 8,013 $ 1,837 Transmission & Gulf of Mexico $ 715 $ 731 $ 881 $ 741 $ 3,068 $ 829 Northeast G&P 470 515 454 477 1,916 504 West 304 312 315 307 1,238 327 Gas & NGL Marketing Services 567 68 43 272 950 101 Other 74 41 81 645 841 76 Total Modified EBITDA $ 2,130 $ 1,667 $ 1,774 $ 2,442 $ 8,013 $ 1,837 Adjustments (1): Transmission & Gulf of Mexico $ 13 $ 17 $ (127 ) $ 11 $ (86 ) $ 10 Northeast G&P — — 31 8 39 — West (18 ) — — 16 (2 ) 1 Gas & NGL Marketing Services (336 ) (84 ) (27 ) (203 ) (650 ) 88 Other 6 11 1 (553 ) (535 ) (2 ) Total Adjustments $ (335 ) $ (56 ) $ (122 ) $ (721 ) $ (1,234 ) $ 97 Adjusted EBITDA: Transmission & Gulf of Mexico $ 728 $ 748 $ 754 $ 752 $ 2,982 $ 839 Northeast G&P 470 515 485 485 1,955 504 West 286 312 315 323 1,236 328 Gas & NGL Marketing Services 231 (16 ) 16 69 300 189 Other 80 52 82 92 306 74 Total Adjusted EBITDA $ 1,795 $ 1,611 $ 1,652 $ 1,721 $ 6,779 $ 1,934 (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) 2023 2024 (Dollars in millions, except coverage ratios) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr** Year** 1st Qtr Net cash provided (used) by operating activities $ 1,514 $ 1,377 $ 1,234 $ 1,813 $ 5,938 $ 1,234 Exclude: Cash (provided) used by changes in: Accounts receivable (1,269 ) (154 ) 128 206 (1,089 ) (314 ) Inventories, including write-downs (45 ) (19 ) 7 14 (43 ) (38 ) Other current assets and deferred charges 4 (28 ) 29 (65 ) (60 ) (9 ) Accounts payable 1,017 203 (148 ) (63 ) 1,009 309 Accrued and other current liabilities 318 (246 ) 42 (95 ) 19 218 Changes in current and noncurrent commodity derivative assets and liabilities (82 ) (37 ) (53 ) (28 ) (200 ) 68 Other, including changes in noncurrent assets and liabilities 40 47 53 106 246 61 Preferred dividends paid (1 ) — (1 ) (1 ) (3 ) (1 ) Dividends and distributions paid to noncontrolling interests (54 ) (58 ) (62 ) (39 ) (213 ) (64 ) Contributions from noncontrolling interests 3 15 — — 18 26 Adjustment to exclude litigation-related charges in discontinued operations — 115 1 9 125 — Adjustment to exclude net gain from Energy Transfer litigation judgment — — — (534 ) (534 ) — Additional Adjustments * — — — — — 17 Available funds from operations $ 1,445 $ 1,215 $ 1,230 $ 1,323 $ 5,213 $ 1,507 Common dividends paid $ 546 $ 545 $ 544 $ 544 $ 2,179 $ 579 Coverage ratio: Available funds from operations divided by Common dividends paid 2.65 2.23 2.26 2.43 2.39 2.60 * See detail on Reconciliation of Income (Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income. ** Certain amounts for the fourth quarter of 2023 were revised to agree to final reported amounts, with no impact to previously reported AFFO for that period. 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) 2024 Guidance 2025 Guidance (Dollars in millions, except per-share amounts and coverage ratio) Low Mid High Low Mid High Net income (loss) from continuing operations $ 2,094 $ 2,219 $ 2,344 $ 2,373 $ 2,523 $ 2,673 Provision (benefit) for income taxes 670 695 720 735 785 835 Interest expense 1,380 1,390 Equity (earnings) losses (535 ) (610 ) Proportional Modified EBITDA of equity-method investments 895 990 Depreciation and amortization expenses and accretion for asset retirement obligations associated with nonregulated operations 2,270 2,325 Other (6 ) (8 ) Modified EBITDA $ 6,768 $ 6,918 $ 7,068 $ 7,195 $ 7,395 $ 7,595 EBITDA Adjustments 32 5 Adjusted EBITDA $ 6,800 $ 6,950 $ 7,100 $ 7,200 $ 7,400 $ 7,600 Net income (loss) from continuing operations $ 2,094 $ 2,219 $ 2,344 $ 2,373 $ 2,523 $ 2,673 Less: Net income (loss) attributable to noncontrolling interests and preferred dividends 115 115 Net income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders $ 1,979 $ 2,104 $ 2,229 $ 2,258 $ 2,408 $ 2,558 Adjustments: Adjustments included in Modified EBITDA (1) 32 5 Adjustments below Modified EBITDA (2) 29 18 Allocation of adjustments to noncontrolling interests — — Total adjustments 61 23 Less tax effect for above items (15 ) (6 ) Adjusted income from continuing operations available to common stockholders $ 2,025 $ 2,150 $ 2,275 $ 2,275 $ 2,425 $ 2,575 Adjusted income from continuing operations - diluted earnings per common share $ 1.65 $ 1.76 $ 1.86 $ 1.85 $ 1.97 $ 2.10 Weighted-average shares - diluted (millions) 1,224 1,228 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) $ 5,125 $ 5,250 $ 5,375 $ 5,295 $ 5,445 $ 5,595 Preferred dividends paid (3 ) (3 ) Dividends and distributions paid to noncontrolling interests (215 ) (235 ) Contributions from noncontrolling interests 18 18 Available funds from operations (AFFO) $ 4,925 $ 5,050 $ 5,175 $ 5,075 $ 5,225 $ 5,375 AFFO per common share $ 4.02 $ 4.13 $ 4.23 $ 4.13 $ 4.25 $ 4.38 Common dividends paid $ 2,320 5%-7% Dividend growth Coverage Ratio (AFFO/Common dividends paid) 2.12x 2.18x 2.23x ~2.12x (1) Adjustments reflect transaction and transition costs of acquisitions (2) Adjustments reflect amortization of intangible assets from Sequent acquisition 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, outcomes 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 and the ability of other energy companies with whom we conduct or seek to conduct business, to obtain necessary permits and approvals, and our ability to 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 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; 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 conflicts in the Middle East, including between Israel and Hamas and conflicts involving Iran and its proxy forces; 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, 2023, as filed with the SEC on February 21, 2024, and 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/20240506608318/en/Contacts MEDIA CONTACT: media@williams.com (800) 945-8723 INVESTOR CONTACTS: Danilo Juvane (918) 573-5075 Caroline Sardella (918) 230-9992
Williams (NYSE: WMB) today announced its unaudited financial results for the three months ended March 31, 2024. Business continues to outperform; solid execution on accretive acquisitions and organic growth driving immediate returns GAAP net income of $631 million, or $0.52 per diluted share (EPS) Adjusted net income of $719 million, or $0.59 per diluted share (Adj. EPS) – up 5% vs. 1Q 2023 Adjusted EBITDA of $1.934 billion – up $139 million or 8% vs. 1Q 2023 Cash flow from operations (CFFO) of $1.234 billion Available funds from operations (AFFO) of $1.507 billion – up $62 million or 4% vs. 1Q 2023 Dividend coverage ratio of 2.60x (AFFO basis) Record contracted transmission capacity of 33.9 Bcf/d – up 4.3% from 1Q 2023 Strong 1Q performance driving expectations to top half of 2024 financial guidance range Recent acquisitions and large roster of projects in execution building long-term value Closed acquisition of 6 storage facilities with total capacity of 115 Bcf across Louisiana and Mississippi, strategically located to serve growing LNG exports and power generation demand Placed Transco's Carolina Market Link into service 1Q 2024 Received FERC notice to proceed on Transco's Commonwealth Energy Connector Commenced construction on Transco's Southside Reliability Enhancement and Southeast Energy Connector First phase of Transco's Regional Energy Access continued to deliver earnings with second phase on track to come online in 4Q 2024 Received FERC certificate for Transco's Alabama Georgia Connector and Texas to Louisiana Energy Pathway Pre-filed FERC application for Transco's ~1.6 Bcf/d Southeast Supply Enhancement Continued execution of additional transmission, gathering & processing and Deepwater Gulf of Mexico projects CEO Perspective Alan Armstrong, president and chief executive officer, made the following comments: “Our 8 percent higher Adjusted EBITDA was driven by the continued outperformance of our transmission, storage and gathering businesses, which delivered 13 percent higher Adjusted EBITDA compared to the same period last year. Contracted transmission capacity achieved another record in the first quarter and our Transco projects recently placed into service contributed additional fee-based revenues, as did our immediately accretive acquisitions, including the Gulf Coast storage portfolio that we closed in the quarter. “Crisp execution by our teams in both integrating newly acquired assets and building large-scale organic projects has us on track to be in the top half of our original 2024 guidance range. As our natural gas-focused strategy continues to gain momentum, we are successfully executing a full slate of high return growth projects, with new regulatory milestones reached on seven of our FERC-regulated expansion projects so far this year and progressing on a healthy backlog of expansion opportunities to serve accelerating demand for natural gas. Armstrong added, “Our track record of generating predictable, growing earnings in all market cycles underscores the value of Williams as a resilient, long-term investment with a strong dividend. We’ve built a business positioned for the future, and we’re leveraging our existing infrastructure and project development capabilities to serve rising domestic and global security needs, while lowering emissions and creating sustainable value for our shareholders.” Williams Summary Financial Information 1Q 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. 2024 2023 GAAP Measures Net Income $ 631 $ 926 Net Income Per Share $ 0.52 $ 0.76 Cash Flow From Operations $ 1,234 $ 1,514 Non-GAAP Measures (1) Adjusted EBITDA $ 1,934 $ 1,795 Adjusted Net Income $ 719 $ 684 Adjusted Earnings Per Share $ 0.59 $ 0.56 Available Funds from Operations $ 1,507 $ 1,445 Dividend Coverage Ratio 2.60x 2.65x Other Debt-to-Adjusted EBITDA at Quarter End (2) 3.79x 3.57x Capital Investments (Excluding Acquisitions) (3) (4) $ 563 $ 525 (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 include 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) First-quarter 2024 capital excludes $1.851 billion for the acquisition of the Gulf Coast Storage assets, which closed in January 2024. First-quarter 2023 capital excludes $1.056 billion for the acquisition of MountainWest, which closed in February 2023. GAAP Measures First-quarter 2024 net income decreased by $295 million compared to the prior year reflecting an unfavorable change of $419 million in net unrealized gains/losses on commodity derivatives, higher net interest expense from recent debt issuances and retirements, as well as higher operating costs, depreciation and interest expense resulting from recent acquisitions. These unfavorable changes were partially offset by a $211 million increase in service revenues driven by acquisitions and expansion projects. The tax provision decreased primarily due to lower pretax income. First-quarter 2024 cash flow from operations decreased compared to the prior year primarily due to unfavorable net changes in both working capital and derivative collateral requirements. Non-GAAP Measures First-quarter 2024 Adjusted EBITDA increased by $139 million over the prior year, driven by the previously described favorable net contributions from acquisitions and expansion projects. First-quarter 2024 Adjusted Net Income improved by $35 million over 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 and the related income tax effects. First-quarter Available Funds From Operations (AFFO) increased by $62 million compared to the prior year primarily due to the change in operating results exclusive of non-cash items. 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 first-quarter 2024 Form 10-Q. First Quarter Amounts in millions Modified EBITDA Adjusted EBITDA 1Q 2024 1Q 2023 Change 1Q 2024 1Q 2023 Change Transmission & Gulf of Mexico $ 829 $ 715 $ 114 $ 839 $ 728 $ 111 Northeast G&P 504 470 34 504 470 34 West 327 304 23 328 286 42 Gas & NGL Marketing Services 101 567 (466 ) 189 231 (42 ) Other 76 74 2 74 80 (6 ) Total $ 1,837 $ 2,130 $ (293 ) $ 1,934 $ 1,795 $ 139 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 First-quarter 2024 Modified and Adjusted EBITDA improved compared to the prior year driven by favorable net contributions from the Gulf Coast Storage and MountainWest acquisitions and the Regional Energy Access expansion project. Modified EBITDA for both periods was impacted by one-time acquisition costs, which are excluded from Adjusted EBITDA. Northeast G&P First-quarter 2024 Modified and Adjusted EBITDA increased over the prior year driven by higher rates and volumes at Susquehanna Supply Hub, higher rates at Cardinal, and higher contribution from our Aux Sable investment, partially offset by lower volumes at Ohio Valley Midstream. West First-quarter 2024 Modified and Adjusted EBITDA increased compared to the prior year benefiting from the DJ Basin Acquisitions and improved commodity margins reflecting favorable changes in shrink prices related to the absence of a short-term gas price spike at Opal in 2023, partially offset by lower realized gains on natural gas hedges. Modified EBITDA was also impacted by the absence of a 2023 favorable contract settlement, which is excluded from Adjusted EBITDA. Gas & NGL Marketing Services First-quarter 2024 Modified EBITDA decreased from the prior year primarily reflecting lower commodity marketing margins and a $427 million net unfavorable change in unrealized gains/losses on commodity derivatives, which is excluded from Adjusted EBITDA. 2024 Financial Guidance After our strong first-quarter performance, Williams expects Adjusted EBITDA at the top half of its 2024 guidance range of $6.8 billion and $7.1 billion. The company continues to expect 2024 growth capex between $1.45 billion and $1.75 billion and maintenance capex between $1.1 billion and $1.3 billion, which includes capital of $350 million for emissions reduction and modernization initiatives. For 2025, the company continues to expect Adjusted EBITDA between $7.2 billion and $7.6 billion with growth capex between $1.65 billion and $1.95 billion and maintenance capex between $750 million and $850 million, which includes capital of $100 million based on midpoint for emissions reduction and modernization initiatives. Williams continues to anticipate a leverage ratio midpoint for 2024 of 3.85x and has increased the dividend by 6.1% on an annualized basis to $1.90 in 2024 from $1.79 in 2023. Williams' First-Quarter 2024 Materials to be Posted Shortly; Q&A Webcast Scheduled for Tomorrow Williams' first-quarter 2024 earnings presentation will be posted at www.williams.com. The company's first-quarter 2024 earnings conference call and webcast with analysts and investors is scheduled for Tuesday, May 7, 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://register.vevent.com/register/BI2af82b1f777e448892c40bafefdffe05 A webcast link to the conference call will be provided on Williams' Investor Relations website. A replay of the webcast will also be available on the website for at least 90 days following the event. About Williams Williams (NYSE: WMB) is a trusted energy industry leader committed to safely, reliably, and responsibly meeting growing energy demand. We use our 33,000-mile pipeline infrastructure to move a third of the nation’s natural gas to where it's needed most, supplying the energy used to heat our homes, cook our food and generate low-carbon electricity. For over a century, we’ve been driven by a passion for doing things the right way. Today, our team of problem solvers is leading the charge into the clean energy future – by powering the global economy while delivering immediate emissions reductions within our natural gas network and investing in new energy technologies. Learn more at www.williams.com. The Williams Companies, Inc. Consolidated Statement of Income (Unaudited) Three Months Ended March 31, 2024 2023 (Millions, except per-share amounts) Revenues: Service revenues $ 1,905 $ 1,694 Service revenues – commodity consideration 30 36 Product sales 845 845 Net gain (loss) from commodity derivatives (9 ) 506 Total revenues 2,771 3,081 Costs and expenses: Product costs 526 553 Net processing commodity expenses 5 54 Operating and maintenance expenses 511 463 Depreciation and amortization expenses 548 506 Selling, general, and administrative expenses 186 176 Other (income) expense – net (17 ) (31 ) Total costs and expenses 1,759 1,721 Operating income (loss) 1,012 1,360 Equity earnings (losses) 137 147 Other investing income (loss) – net 24 8 Interest expense (349 ) (294 ) Other income (expense) – net 31 20 Income (loss) before income taxes 855 1,241 Less: Provision (benefit) for income taxes 193 284 Net income (loss) 662 957 Less: Net income (loss) attributable to noncontrolling interests 30 30 Net income (loss) attributable to The Williams Companies, Inc. 632 927 Less: Preferred stock dividends 1 1 Net income (loss) available to common stockholders $ 631 $ 926 Basic earnings (loss) per common share: Net income (loss) available to common stockholders $ .52 $ .76 Weighted-average shares (thousands) 1,218,155 1,219,465 Diluted earnings (loss) per common share: Net income (loss) available to common stockholders $ .52 $ .76 Weighted-average shares (thousands) 1,222,222 1,225,781 The Williams Companies, Inc. Consolidated Balance Sheet (Unaudited) March 31, December 31, 2024 2023 (Millions, except per-share amounts) ASSETS Current assets: Cash and cash equivalents $ 667 $ 2,150 Trade accounts and other receivables (net of allowance of $3 at March 31, 2024 and December 31, 2023) 1,355 1,655 Inventories 239 274 Derivative assets 173 239 Other current assets and deferred charges 176 195 Total current assets 2,610 4,513 Investments 4,639 4,637 Property, plant and equipment 54,305 51,842 Accumulated depreciation and amortization (17,854 ) (17,531 ) Property, plant, and equipment – net 36,451 34,311 Intangible assets – net of accumulated amortization 7,496 7,593 Regulatory assets, deferred charges, and other 1,551 1,573 Total assets $ 52,747 $ 52,627 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 1,042 $ 1,379 Derivative liabilities 75 105 Accrued and other current liabilities 1,077 1,284 Commercial paper — 725 Long-term debt due within one year 2,787 2,337 Total current liabilities 4,981 5,830 Long-term debt 24,100 23,376 Deferred income tax liabilities 4,001 3,846 Regulatory liabilities, deferred income, and other 4,735 4,684 Contingent liabilities and commitments Equity: Stockholders’ equity: Preferred stock ($1 par value; 30 million shares authorized at March 31, 2024 and December 31, 2023; 35,000 shares issued at March 31, 2024 and December 31, 2023) 35 35 Common stock ($1 par value; 1,470 million shares authorized at March 31, 2024 and December 31, 2023; 1,258 million shares issued at March 31, 2024 and 1,256 million shares issued at December 31, 2023) 1,258 1,256 Capital in excess of par value 24,564 24,578 Retained deficit (12,238 ) (12,287 ) Accumulated other comprehensive income (loss) 10 — Treasury stock, at cost (39 million shares at March 31, 2024 and December 31, 2023 of common stock) (1,180 ) (1,180 ) Total stockholders’ equity 12,449 12,402 Noncontrolling interests in consolidated subsidiaries 2,481 2,489 Total equity 14,930 14,891 Total liabilities and equity $ 52,747 $ 52,627 The Williams Companies, Inc. Consolidated Statement of Cash Flows (Unaudited) Three Months Ended March 31, 2024 2023 (Millions) OPERATING ACTIVITIES: Net income (loss) $ 662 $ 957 Adjustments to reconcile to net cash provided (used) by operating activities: Depreciation and amortization 548 506 Provision (benefit) for deferred income taxes 152 283 Equity (earnings) losses (137 ) (147 ) Distributions from equity-method investees 188 208 Net unrealized (gain) loss from commodity derivative instruments 92 (327 ) Inventory write-downs 4 18 Amortization of stock-based awards 24 17 Cash provided (used) by changes in current assets and liabilities: Accounts receivable 314 1,269 Inventories 34 27 Other current assets and deferred charges 9 (4 ) Accounts payable (309 ) (1,017 ) Accrued and other current liabilities (218 ) (318 ) Changes in current and noncurrent commodity derivative assets and liabilities (68 ) 82 Other, including changes in noncurrent assets and liabilities (61 ) (40 ) Net cash provided (used) by operating activities 1,234 1,514 FINANCING ACTIVITIES: Proceeds from (payments of) commercial paper – net (723 ) (352 ) Proceeds from long-term debt 2,099 1,502 Payments of long-term debt (1,012 ) (7 ) Payments for debt issuance costs (16 ) (8 ) Proceeds from issuance of common stock 5 3 Purchases of treasury stock — (74 ) Common dividends paid (579 ) (546 ) Dividends and distributions paid to noncontrolling interests (64 ) (54 ) Contributions from noncontrolling interests 26 3 Other – net (17 ) (17 ) Net cash provided (used) by financing activities (281 ) 450 INVESTING ACTIVITIES: Property, plant, and equipment: Capital expenditures (1) (544 ) (545 ) Dispositions - net 5 (7 ) Purchases of businesses, net of cash acquired (1,851 ) (1,056 ) Purchases of and contributions to equity-method investments (52 ) (39 ) Other – net 6 8 Net cash provided (used) by investing activities (2,436 ) (1,639 ) Increase (decrease) in cash and cash equivalents (1,483 ) 325 Cash and cash equivalents at beginning of year 2,150 152 Cash and cash equivalents at end of period $ 667 $ 477 (1) Increases to property, plant, and equipment $ (509 ) $ (484 ) Changes in related accounts payable and accrued liabilities (35 ) (61 ) Capital expenditures $ (544 ) $ (545 ) Transmission & Gulf of Mexico (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Regulated interstate natural gas transportation, storage, and other revenues (1) $ 774 $ 786 $ 794 $ 822 $ 3,176 $ 836 Gathering, processing, storage and transportation revenues 100 104 114 100 418 137 Other fee revenues (1) 6 8 5 4 23 12 Commodity margins 10 8 7 8 33 9 Operating and administrative costs (1) (254 ) (254 ) (257 ) (270 ) (1,035 ) (254 ) Other segment income (expenses) - net (1) 26 31 36 26 119 43 Gain on sale of business — — 130 (1 ) 129 — Proportional Modified EBITDA of equity-method investments 53 48 52 52 205 46 Modified EBITDA 715 731 881 741 3,068 829 Adjustments 13 17 (127 ) 11 (86 ) 10 Adjusted EBITDA $ 728 $ 748 $ 754 $ 752 $ 2,982 $ 839 Statistics for Operated Assets Natural Gas Transmission (2) Transcontinental Gas Pipe Line Avg. daily transportation volumes (MMdth) 14.3 13.2 14.0 14.0 13.9 14.6 Avg. daily firm reserved capacity (MMdth) 19.5 19.4 19.4 19.3 19.4 20.3 Northwest Pipeline LLC Avg. daily transportation volumes (MMdth) 3.1 2.3 2.3 2.8 2.6 3.1 Avg. daily firm reserved capacity (MMdth) 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 4.2 3.9 4.3 Avg. daily firm reserved capacity (MMdth) 7.8 7.5 7.5 7.9 7.7 8.4 Gulfstream - Non-consolidated Avg. daily transportation volumes (MMdth) 1.0 1.2 1.4 1.1 1.2 1.0 Avg. daily firm reserved capacity (MMdth) 1.4 1.4 1.4 1.4 1.4 1.4 Gathering, Processing, and Crude Oil Transportation Consolidated (4) Gathering volumes (Bcf/d) 0.28 0.23 0.27 0.27 0.26 0.25 Plant inlet natural gas volumes (Bcf/d) 0.43 0.40 0.46 0.46 0.44 0.45 NGL production (Mbbls/d) 28 24 28 26 27 28 NGL equity sales (Mbbls/d) 7 5 6 5 6 5 Crude oil transportation volumes (Mbbls/d) 119 111 134 130 123 118 Non-consolidated (5) Gathering volumes (Bcf/d) 0.36 0.30 0.36 0.33 0.34 0.27 Plant inlet natural gas volumes (Bcf/d) 0.36 0.30 0.36 0.33 0.34 0.27 NGL production (Mbbls/d) 28 21 30 28 27 15 NGL equity sales (Mbbls/d) 8 3 8 7 7 3 (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) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Gathering, processing, transportation, and fractionation revenues $ 391 $ 431 $ 417 $ 411 $ 1,650 $ 411 Other fee revenues (1) 32 27 27 28 114 34 Commodity margins 5 (1 ) 7 1 12 11 Operating and administrative costs (1) (101 ) (101 ) (115 ) (107 ) (424 ) (108 ) Other segment income (expenses) - net — — (1 ) (9 ) (10 ) (1 ) Proportional Modified EBITDA of equity-method investments 143 159 119 153 574 157 Modified EBITDA 470 515 454 477 1,916 504 Adjustments — — 31 8 39 — Adjusted EBITDA $ 470 $ 515 $ 485 $ 485 $ 1,955 $ 504 Statistics for Operated Assets Gathering and Processing Consolidated (2) Gathering volumes (Bcf/d) 4.42 4.61 4.41 4.37 4.45 4.33 Plant inlet natural gas volumes (Bcf/d) 1.92 1.79 1.93 1.93 1.89 1.76 NGL production (Mbbls/d) 144 135 144 133 139 133 NGL equity sales (Mbbls/d) 1 1 — 1 1 1 Non-consolidated (3) Gathering volumes (Bcf/d) 6.97 7.03 6.83 6.85 6.92 6.79 Plant inlet natural gas volumes (Bcf/d) 0.77 0.93 0.99 1.01 0.93 0.98 NGL production (Mbbls/d) 54 64 71 69 65 72 NGL equity sales (Mbbls/d) 4 5 4 4 4 3 (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) Includes 100% of the volumes associated with operated equity-method investments, including the Laurel Mountain Midstream partnership and Blue Racer Midstream which we operate effective January 1, 2024; and the Bradford Supply Hub and the Marcellus South Supply Hub within the Appalachia Midstream Services partnership. West (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Net gathering, processing, transportation, storage, and fractionation revenues $ 382 $ 373 $ 371 $ 397 $ 1,523 $ 421 Other fee revenues (1) 5 7 4 8 24 8 Commodity margins (24 ) 18 21 19 34 12 Operating and administrative costs (1) (115 ) (122 ) (122 ) (144 ) (503 ) (139 ) Other segment income (expenses) - net 23 (7 ) (4 ) (14 ) (2 ) — Proportional Modified EBITDA of equity-method investments 33 43 45 41 162 25 Modified EBITDA 304 312 315 307 1,238 327 Adjustments (18 ) — — 16 (2 ) 1 Adjusted EBITDA $ 286 $ 312 $ 315 $ 323 $ 1,236 $ 328 Statistics for Operated Assets Gathering and Processing Consolidated (2) (4) Gathering volumes (Bcf/d) (3) 5.47 5.51 5.60 6.03 6.02 5.75 Plant inlet natural gas volumes (Bcf/d) 0.92 1.06 1.12 1.63 1.54 1.52 NGL production (Mbbls/d) 25 40 61 99 91 87 NGL equity sales (Mbbls/d) 6 16 22 14 14 6 Non-consolidated (5) Gathering volumes (Bcf/d) 0.32 0.33 0.33 — — — Plant inlet natural gas volumes (Bcf/d) 0.32 0.32 0.32 — — — NGL production (Mbbls/d) 37 38 38 — — — NGL and Crude Oil Transportation volumes (Mbbls/d) (6) 161 217 244 250 218 220 (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 Cureton Acquisition gathering assets after the purchase on November 30, 2023. Average volumes were calculated over the period owned. (4) Volumes associated with the Rocky Mountain Midstream (RMM) assets for 4th Qtr 2023 and Year 2023 are presented entirely in the Consolidated section. We acquired the remaining 50 percent of RMM on November 30, 2023. (5) Includes 100% of the volumes associated with operated equity-method investment RMM through 3rd Qtr 2023. (6) Includes 100% of the volumes associated with Overland Pass Pipeline Company (an operated equity-method investment), RMM (see Note 4 above) as well as volumes for our consolidated Bluestem pipeline. Gas & NGL Marketing Services (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Commodity margins $ 265 $ (2 ) $ 38 $ 88 $ 389 $ 236 Other fee revenues 1 — — — 1 — Net unrealized gain (loss) from derivative instruments 333 94 24 208 659 (95 ) Operating and administrative costs (32 ) (24 ) (19 ) (24 ) (99 ) (40 ) Modified EBITDA 567 68 43 272 950 101 Adjustments (336 ) (84 ) (27 ) (203 ) (650 ) 88 Adjusted EBITDA $ 231 $ (16 ) $ 16 $ 69 $ 300 $ 189 Statistics Product Sales Volumes Natural Gas (Bcf/d) 7.24 6.56 7.31 7.11 7.05 7.53 NGLs (Mbbls/d) 234 239 245 173 223 170 Other (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Service revenues $ 3 $ 5 $ 4 $ 4 $ 16 $ 4 Net realized product sales 120 97 127 145 489 113 Net unrealized gain (loss) from derivative instruments (6 ) (11 ) (1 ) 19 1 3 Operating and administrative costs (48 ) (54 ) (58 ) (65 ) (225 ) (51 ) Other segment income (expenses) - net 5 5 10 8 28 7 Net gain from Energy Transfer litigation judgment — — — 534 534 — Proportional Modified EBITDA of equity-method investments — (1 ) (1 ) — (2 ) — Modified EBITDA 74 41 81 645 841 76 Adjustments 6 11 1 (553 ) (535 ) (2 ) Adjusted EBITDA $ 80 $ 52 $ 82 $ 92 $ 306 $ 74 Statistics Net Product Sales Volumes Natural Gas (Bcf/d) 0.26 0.29 0.31 0.30 0.29 0.28 NGLs (Mbbls/d) 3 6 9 10 7 8 Crude Oil (Mbbls/d) 1 3 5 7 4 5 Capital Expenditures and Investments (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr* Year* 1st Qtr Capital expenditures: Transmission & Gulf of Mexico $ 205 $ 263 $ 382 $ 404 $ 1,254 $ 310 Northeast G&P 99 74 115 71 359 71 West 169 197 141 121 628 120 Other 72 76 52 75 275 43 Total (1) $ 545 $ 610 $ 690 $ 671 $ 2,516 $ 544 Purchases of and contributions to equity-method investments: Transmission & Gulf of Mexico $ 8 $ 18 $ 6 $ 9 $ 41 $ 27 Northeast G&P 31 12 4 52 99 25 West — — 1 — 1 — Other — — — — — — Total $ 39 $ 30 $ 11 $ 61 $ 141 $ 52 Summary: Transmission & Gulf of Mexico $ 213 $ 281 $ 388 $ 413 $ 1,295 $ 337 Northeast G&P 130 86 119 123 458 96 West 169 197 142 121 629 120 Other 72 76 52 75 275 43 Total $ 584 $ 640 $ 701 $ 732 $ 2,657 $ 596 Capital investments: Increases to property, plant, and equipment $ 484 $ 684 $ 792 $ 604 $ 2,564 $ 509 Purchases of businesses, net of cash acquired 1,056 (3 ) (29 ) 544 1,568 1,851 Purchases of and contributions to equity-method investments 39 30 11 61 141 52 Purchases of other long-term investments 2 1 2 1 6 2 Total $ 1,581 $ 712 $ 776 $ 1,210 $ 4,279 $ 2,414 (1) Increases to property, plant, and equipment $ 484 $ 684 $ 792 $ 604 $ 2,564 $ 509 Changes in related accounts payable and accrued liabilities 61 (74 ) (102 ) 67 (48 ) 35 Capital expenditures $ 545 $ 610 $ 690 $ 671 $ 2,516 $ 544 Contributions from noncontrolling interests $ 3 $ 15 $ — $ — $ 18 $ 26 Contributions in aid of construction $ 11 $ 7 $ 2 $ 8 $ 28 $ 10 Proceeds from sale of business $ — $ — $ 348 $ (2 ) $ 346 $ — * Certain amounts for the fourth quarter of 2023 were revised to agree to final reported amounts. 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, 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 net income (loss) excluding the effect of certain noncash items, reduced by distributions from equity-method investees, net distributions to noncontrolling interests, and preferred dividends. AFFO may also 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) 2023 2024 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders $ 926 $ 547 $ 654 $ 1,146 $ 3,273 $ 631 Income (loss) from continuing operations - diluted earnings (loss) per common share (1) $ .76 $ .45 $ .54 $ .94 $ 2.68 $ .52 Adjustments: Transmission & Gulf of Mexico MountainWest acquisition and transition-related costs $ 13 $ 17 $ 3 $ 9 $ 42 $ — Gulf Coast Storage acquisition and transition-related costs* — — — 1 1 10 Gain on sale of business — — (130 ) 1 (129 ) — Total Transmission & Gulf of Mexico adjustments 13 17 (127 ) 11 (86 ) 10 Northeast G&P Accrual for loss contingency — — — 10 10 — Our share of accrual for loss contingency at Aux Sable Liquid Products LP — — 31 (2 ) 29 — Total Northeast G&P adjustments — — 31 8 39 — West Cureton acquisition and transition-related costs* — — — 6 6 1 Gain from contract settlement (18 ) — — — (18 ) — Impairment of assets held for sale �� — — — 10 10 — Total West adjustments (18 ) — — 16 (2 ) 1 Gas & NGL Marketing Services Impact of volatility on NGL linefill transactions* (3 ) 10 (3 ) 5 9 (6 ) Net unrealized (gain) loss from derivative instruments (333 ) (94 ) (24 ) (208 ) (659 ) 94 Total Gas & NGL Marketing Services adjustments (336 ) (84 ) (27 ) (203 ) (650 ) 88 Other Net unrealized (gain) loss from derivative instruments 6 11 1 (19 ) (1 ) (2 ) Net gain from Energy Transfer litigation judgment — — — (534 ) (534 ) — Total Other adjustments 6 11 1 (553 ) (535 ) (2 ) Adjustments included in Modified EBITDA (335 ) (56 ) (122 ) (721 ) (1,234 ) 97 Adjustments below Modified EBITDA Gain on remeasurement of RMM investment — — — (30 ) (30 ) — Imputed interest expense on deferred consideration obligations* — — — — — 12 Amortization of intangible assets from Sequent acquisition 15 14 15 15 59 7 15 14 15 (15 ) 29 19 Total adjustments (320 ) (42 ) (107 ) (736 ) (1,205 ) 116 Less tax effect for above items 78 10 25 178 291 (28 ) Adjustments for tax-related items (2) — — (25 ) — (25 ) — Adjusted income from continuing operations available to common stockholders $ 684 $ 515 $ 547 $ 588 $ 2,334 $ 719 Adjusted income from continuing operations - diluted earnings per common share (1) $ .56 $ .42 $ .45 $ .48 $ 1.91 $ .59 Weighted-average shares - diluted (thousands) 1,225,781 1,219,915 1,220,073 1,221,894 1,221,616 1,222,222 (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 third quarter of 2023 includes an adjustment associated with a decrease in our estimated deferred state income tax rate. *Amounts for the 2024 periods are included in Additional adjustments on the Reconciliation of Cash Flow from Operating Activities to Non-GAAP Available Funds from Operations (AFFO). Reconciliation of "Net Income (Loss)" to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA” (UNAUDITED) 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Net income (loss) $ 957 $ 494 $ 684 $ 1,168 $ 3,303 $ 662 Provision (benefit) for income taxes 284 175 176 370 1,005 193 Interest expense 294 306 314 322 1,236 349 Equity (earnings) losses (147 ) (160 ) (127 ) (155 ) (589 ) (137 ) Other investing (income) loss - net (8 ) (13 ) (24 ) (63 ) (108 ) (24 ) Proportional Modified EBITDA of equity-method investments 229 249 215 246 939 228 Depreciation and amortization expenses 506 515 521 529 2,071 548 Accretion expense associated with asset retirement obligations for nonregulated operations 15 14 14 16 59 18 (Income) loss from discontinued operations, net of tax — 87 1 9 97 — Modified EBITDA $ 2,130 $ 1,667 $ 1,774 $ 2,442 $ 8,013 $ 1,837 Transmission & Gulf of Mexico $ 715 $ 731 $ 881 $ 741 $ 3,068 $ 829 Northeast G&P 470 515 454 477 1,916 504 West 304 312 315 307 1,238 327 Gas & NGL Marketing Services 567 68 43 272 950 101 Other 74 41 81 645 841 76 Total Modified EBITDA $ 2,130 $ 1,667 $ 1,774 $ 2,442 $ 8,013 $ 1,837 Adjustments (1): Transmission & Gulf of Mexico $ 13 $ 17 $ (127 ) $ 11 $ (86 ) $ 10 Northeast G&P — — 31 8 39 — West (18 ) — — 16 (2 ) 1 Gas & NGL Marketing Services (336 ) (84 ) (27 ) (203 ) (650 ) 88 Other 6 11 1 (553 ) (535 ) (2 ) Total Adjustments $ (335 ) $ (56 ) $ (122 ) $ (721 ) $ (1,234 ) $ 97 Adjusted EBITDA: Transmission & Gulf of Mexico $ 728 $ 748 $ 754 $ 752 $ 2,982 $ 839 Northeast G&P 470 515 485 485 1,955 504 West 286 312 315 323 1,236 328 Gas & NGL Marketing Services 231 (16 ) 16 69 300 189 Other 80 52 82 92 306 74 Total Adjusted EBITDA $ 1,795 $ 1,611 $ 1,652 $ 1,721 $ 6,779 $ 1,934 (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) 2023 2024 (Dollars in millions, except coverage ratios) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr** Year** 1st Qtr Net cash provided (used) by operating activities $ 1,514 $ 1,377 $ 1,234 $ 1,813 $ 5,938 $ 1,234 Exclude: Cash (provided) used by changes in: Accounts receivable (1,269 ) (154 ) 128 206 (1,089 ) (314 ) Inventories, including write-downs (45 ) (19 ) 7 14 (43 ) (38 ) Other current assets and deferred charges 4 (28 ) 29 (65 ) (60 ) (9 ) Accounts payable 1,017 203 (148 ) (63 ) 1,009 309 Accrued and other current liabilities 318 (246 ) 42 (95 ) 19 218 Changes in current and noncurrent commodity derivative assets and liabilities (82 ) (37 ) (53 ) (28 ) (200 ) 68 Other, including changes in noncurrent assets and liabilities 40 47 53 106 246 61 Preferred dividends paid (1 ) — (1 ) (1 ) (3 ) (1 ) Dividends and distributions paid to noncontrolling interests (54 ) (58 ) (62 ) (39 ) (213 ) (64 ) Contributions from noncontrolling interests 3 15 — — 18 26 Adjustment to exclude litigation-related charges in discontinued operations — 115 1 9 125 — Adjustment to exclude net gain from Energy Transfer litigation judgment — — — (534 ) (534 ) — Additional Adjustments * — — — — — 17 Available funds from operations $ 1,445 $ 1,215 $ 1,230 $ 1,323 $ 5,213 $ 1,507 Common dividends paid $ 546 $ 545 $ 544 $ 544 $ 2,179 $ 579 Coverage ratio: Available funds from operations divided by Common dividends paid 2.65 2.23 2.26 2.43 2.39 2.60 * See detail on Reconciliation of Income (Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income. ** Certain amounts for the fourth quarter of 2023 were revised to agree to final reported amounts, with no impact to previously reported AFFO for that period. 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) 2024 Guidance 2025 Guidance (Dollars in millions, except per-share amounts and coverage ratio) Low Mid High Low Mid High Net income (loss) from continuing operations $ 2,094 $ 2,219 $ 2,344 $ 2,373 $ 2,523 $ 2,673 Provision (benefit) for income taxes 670 695 720 735 785 835 Interest expense 1,380 1,390 Equity (earnings) losses (535 ) (610 ) Proportional Modified EBITDA of equity-method investments 895 990 Depreciation and amortization expenses and accretion for asset retirement obligations associated with nonregulated operations 2,270 2,325 Other (6 ) (8 ) Modified EBITDA $ 6,768 $ 6,918 $ 7,068 $ 7,195 $ 7,395 $ 7,595 EBITDA Adjustments 32 5 Adjusted EBITDA $ 6,800 $ 6,950 $ 7,100 $ 7,200 $ 7,400 $ 7,600 Net income (loss) from continuing operations $ 2,094 $ 2,219 $ 2,344 $ 2,373 $ 2,523 $ 2,673 Less: Net income (loss) attributable to noncontrolling interests and preferred dividends 115 115 Net income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders $ 1,979 $ 2,104 $ 2,229 $ 2,258 $ 2,408 $ 2,558 Adjustments: Adjustments included in Modified EBITDA (1) 32 5 Adjustments below Modified EBITDA (2) 29 18 Allocation of adjustments to noncontrolling interests — — Total adjustments 61 23 Less tax effect for above items (15 ) (6 ) Adjusted income from continuing operations available to common stockholders $ 2,025 $ 2,150 $ 2,275 $ 2,275 $ 2,425 $ 2,575 Adjusted income from continuing operations - diluted earnings per common share $ 1.65 $ 1.76 $ 1.86 $ 1.85 $ 1.97 $ 2.10 Weighted-average shares - diluted (millions) 1,224 1,228 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) $ 5,125 $ 5,250 $ 5,375 $ 5,295 $ 5,445 $ 5,595 Preferred dividends paid (3 ) (3 ) Dividends and distributions paid to noncontrolling interests (215 ) (235 ) Contributions from noncontrolling interests 18 18 Available funds from operations (AFFO) $ 4,925 $ 5,050 $ 5,175 $ 5,075 $ 5,225 $ 5,375 AFFO per common share $ 4.02 $ 4.13 $ 4.23 $ 4.13 $ 4.25 $ 4.38 Common dividends paid $ 2,320 5%-7% Dividend growth Coverage Ratio (AFFO/Common dividends paid) 2.12x 2.18x 2.23x ~2.12x (1) Adjustments reflect transaction and transition costs of acquisitions (2) Adjustments reflect amortization of intangible assets from Sequent acquisition 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, outcomes 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 and the ability of other energy companies with whom we conduct or seek to conduct business, to obtain necessary permits and approvals, and our ability to 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 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; 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 conflicts in the Middle East, including between Israel and Hamas and conflicts involving Iran and its proxy forces; 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, 2023, as filed with the SEC on February 21, 2024, and 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/20240506608318/en/
MEDIA CONTACT: media@williams.com (800) 945-8723 INVESTOR CONTACTS: Danilo Juvane (918) 573-5075 Caroline Sardella (918) 230-9992