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Mar 31, 2022
Williams Q1 2022 Earnings Report
Reported strong first-quarter results and raised 2022 guidance.
Key Takeaways
Williams announced strong first-quarter results, with adjusted EBITDA up 7% and cash flow from operations up 18% compared to Q1 2021. The company also raised its 2022 Adjusted EBITDA guidance by $250 million at the midpoint.
GAAP net income was $379 million, or $0.31 per diluted share.
Adjusted EBITDA reached $1.511 billion, a 7% increase compared to Q1 2021.
Cash flow from operations totaled $1.082 billion, up 18% from Q1 2021.
The dividend coverage ratio was 2.30x on an AFFO basis.
Williams
Williams
Williams Revenue by Segment
Revenue by Segment
Northeast G&P Revenue
CapyFin.comWest Revenue
CapyFin.comGas & NGL Marketing Services Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
The company expects 2022 Adjusted EBITDA between $5.9 billion and $6.2 billion and growth capital expenditures between $2.25 billion to $2.35 billion.
Positive Outlook
- Expects 7% Adjusted EBITDA growth in 2022 with guidance midpoint of $6.05 billion.
- Anticipates achieving a leverage ratio midpoint of 3.8x.
- Expects to generate positive free cash flow after dividends and capital expenditures (excluding Trace acquisition of approximately $950 million).
- Dividend guidance increased 3.7% on an annualized basis to $1.70 in 2022 from $1.64 in 2021.
- The company now expects 2022 Adjusted EBITDA between $5.9 billion and $6.2 billion, a $250 million midpoint increase from guidance originally issued February 2022.
Challenges Ahead
- The company now expects 2022 growth capital expenditures between $2.25 billion to $2.35 billion, a $1 billion midpoint increase from guidance originally issued February 2022 driven by the strategic acquisition of Trace Midstream assets.
- Capital Investments includes increases to property, plant, and equipment (growth & maintenance capital), purchases of businesses, net of cash acquired, purchases of and contributions to equity-method investments and purchases of other long-term investments.
- First-quarter 2022 net income decreased by $46 million compared to the prior year reflecting the benefit of higher service revenues from commodity-based gathering and processing rates in the West and Transco’s Leidy South project being in service, higher commodity margins, and higher results from our upstream operations associated with increased scale of operations, more than offset by a $123 million net unrealized loss on commodity derivatives, the absence of a $77 million favorable impact in 2021 from Winter Storm Uri, increased depreciation and amortization, and increased operating and administrative expenses driven by the Sequent acquisition and increased scale of our upstream operations.
- Gas & NGL Marketing Services •First-quarter 2022 Modified EBITDA declined from the prior year primarily reflecting a $57 million net unrealized loss on commodity derivatives, which is excluded from Adjusted EBITDA. Both measures were also impacted by the absence of a $58 million favorable impact in 2021 from Winter Storm Uri, which was offset by higher commodity margins and higher administrative costs associated with the Sequent business acquired in July 2021.
- Other •First-quarter 2022 Modified EBITDA declined compared to the prior year primarily reflecting a $66 million net unrealized loss on commodity derivatives related to our upstream operations, which is excluded from Adjusted EBITDA. Both measures were also impacted by the absence of a $22 million favorable impact in 2021 from Winter Storm Uri, which was more than offset by higher results from upstream operations.
Revenue & Expenses
Visualization of income flow from segment revenue to net income