News Column

Williams, Williams Partners Announce 2016 Dividend and Distribution Growth Guidance; Posts Analyst Day Presentations to its Websites

May 13, 2014

  • WMB Expects Annual Dividend Growth of 20% Through 2016 with Substantial Excess Cash Coverage and Line of Sight to Continued High Growth Well Beyond Guidance Period
  • WPZ Expects per LP Unit Annual Distribution Growth of 6% in Each 2014 and 2015 and 4.5% Growth in 2016
  • WPZ Expects Cash Coverage to Grow to 1.03 in 2015 and 1.05 in 2016

    TULSA, Okla.--(BUSINESS WIRE)-- Williams (NYSE: WMB) and Williams Partners (NYSE: WPZ) today announced dividend and distribution growth guidance for 2016. The financial guidance is included in the presentations the company and partnership have posted for their annual Analyst Day event, which is tomorrow, May 14. The presentations are available for viewing and downloading at www.williams.com and www.williamslp.com.

    In addition to in-depth information on the energy infrastructure business segments, the presentations contain financial guidance consistent with guidance issued earlier in May for years 2014 and 2015 and additional guidance for 2016. Williams expects rapidly growing distributions for WPZ and Access Midstream Partners, L.P. (NYSE: ACMP), including distributions from its LP and GP interests including incentive distribution rights, to drive 20 percent dividend growth at Williams through 2016.

    Williams Partners expects, at the midpoint of guidance ranges, per LP unit annual distribution growth of 6 percent in each 2014 and 2015 and 4.5 percent in 2016. Williams Partners expects cash distribution coverage of 1.03 in 2015 and 1.05 in 2016.

    “With this extension of our guidance, the expected 2016 dividend is more than five times the level of the 2010 dividend,” said Alan Armstrong, Williams’ chief executive officer. “We’re pleased to continue this pace of high dividend and distribution growth and reward shareholders as we serve customer needs by connecting the best supplies of natural gas and natural gas liquids to the highest-value markets.”

    Members of Williams’ senior management team are scheduled to present between approximately 8:45 a.m. EDT to 2 p.m. EDT tomorrow. Additionally, management of ACMP will provide a presentation on ACMP's business.

    A link to the live webcast of the event will be available the morning of May 14 at www.williams.com and www.williamslp.com. A replay of the Analyst Day webcast will be available for two weeks following the event.

    Non-GAAP Measures

    This press release includes the financial measure cash distribution coverage ratio, which is a non-GAAP financial measure as defined under the rules of the Securities and Exchange Commission. We define cash distribution coverage ratio as the ratio of distributable cash flow attributable to partnership operations to the total cash distributed. This measure reflects the amount of distributable cash flow relative to our cash distribution. We define distributable cash flow, also a non-GAAP measure, as net income plus depreciation and amortization and cash distributions from our equity investments less our earnings from equity investments, income attributable to noncontrolling interests and maintenance capital expenditures. We also adjust for payments and/or reimbursements under omnibus agreements with Williams and certain other adjustments. Total distributable cash flow is reduced by any amounts associated with operations which occurred prior to our ownership of the underlying assets to arrive at distributable cash flow attributable to partnership operations.

    This press 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 the Partnership's assets and the cash that the business is generating. Distributable cash flow is not intended to represent cash flows for the period, nor is it presented as an alternative to net income or cash flow from operations. It should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles.

    About Williams (NYSE: WMB)

    Williams is one of the leading energy infrastructure companies in North America. It owns interests in or operates 15,000 miles of interstate gas pipelines, 1,000 miles of NGL transportation pipelines, and more than 10,000 miles of oil and gas gathering pipelines. The company's facilities have daily gas processing capacity of 6.6 billion cubic feet of natural gas, NGL production of more than 200,000 barrels per day and domestic olefins production capacity of 1.35 billion pounds of ethylene and 90 million pounds of propylene per year. Williams owns approximately 66 percent of Williams Partners L.P. (NYSE: WPZ), one of the largest diversified energy master limited partnerships. Williams Partners owns most of Williams' interstate gas pipeline and midstream assets. Williams also owns certain domestic olefins pipelines assets, as well as a significant investment in Access Midstream Partners, L.P. (NYSE: ACMP), a midstream natural gas services provider. The company's headquarters is in Tulsa, Okla. For more information, visit www.williams.com, where the company routinely posts important information.

    Portions of this document may constitute “forward-looking statements” as defined by federal law. Although the company believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Any such statements are made in reliance on the “safe harbor” protections provided under the Private Securities Reform Act of 1995. Additional information about issues that could lead to material changes in performance is contained in the company’s annual reports filed with the Securities and Exchange Commission.

                                                   
    Distributable cash flow (DCF) and DCF per common unit

     

    Dollars in millions

    2013

    2014 Guidance

    2015 Guidance

    2016 Guidance

    Actual Low Midpoint High Low Midpoint High Low Midpoint High
    Net Income 1,123 $ 1,778 1,918 $ 2,058 $ 1,900 $ 2,085 $ 2,270 $ 2,050 $ 2,340 $ 2,630
    D D & A 791 895 920 945 1,010 1,035 1,060 1,105 1,130 1,155
    Maintenance Capex (258 ) (305 ) (340 ) (375 ) (295 ) (325 ) (355 ) (300 ) (330 ) (360 )
    Attributable to Noncontrolling Interests (3 ) (40 ) (45 ) (50 ) (100 ) (105 ) (110 ) (130 ) (135 ) (140 )
    Geismar incident adjustment for insurance and timing 97 (116 ) (116 ) (116 ) - - - - - -
    Other / Rounding   104     31     36     41     90     95     100     75     80     85  
    Distributable Cash Flow 1,854 2,243 2,373 2,503 2,605 2,785 2,965 2,800 3,085 3,370
    Less: Pre-Partnership Distributable Cash Flow   83     23     23     23     -     -     -     -     -     -  
    Distributable Cash Flow Attributable to Partnership Operations $ 1,771 $ 2,220 $ 2,350 $ 2,480 $ 2,605 $ 2,785 $ 2,965 $ 2,800 $ 3,085 $ 3,370
     
    Cash Distributions 1 $ 1,960 $ 2,351 $ 2,419 $ 2,487 $ 2,632 $ 2,714 $ 2,796 $ 2,868 $ 2,950 $ 3,032
     
    Cash Distribution Coverage Ratio 0.90x 0.94x 0.97x 1.00x 0.99x 1.03x 1.06x 0.98x 1.05x 1.11x
     
    Net Income / Cash Distributions 0.57x 0.76x 0.79x 0.83x 0.72x 0.77x 0.81x 0.71x 0.79x 0.87x
     
    Distributable Cash Flow (DCF) Attributable to Partnership Operations $ 1,771 $ 2,220 $ 2,350 $ 2,480 $ 2,605 $ 2,785 $ 2,965 $ 2,800 $ 3,085 $ 3,370
    Allocation to General Partner   472     683     733     783     873     916     958     972     1,024     1,075  
    Allocation to Common Units 1,299 1,537 1,617 1,697 1,732 1,870 2,007 1,828 2,062 2,295
     
    Weighted Average Common Units Outstanding (millions) 420.9 450.2 450.2 450.1 460.3 460.1 459.9 481.2 473.2 465.3
     
    DCF Attributable to Partnership Operations Per Common Unit $ 3.09 $ 3.41 $ 3.59 $ 3.77 $ 3.76 $ 4.06 $ 4.36 $ 3.80 $ 4.36 $ 4.93
     
     
    Note: 1 Distributions reflect per-unit increases of 5% - 7% annually in 2014 and 2015, and 3%-6% in 2016.





    Williams

    Media Contact:

    Tom Droege, 918-573-4034

    or

    Investor Contacts:

    John Porter, 918-573-0797

    or

    Sharna Reingold, 918-573-2078


    Source: Williams


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