Williams Companies, Inc - Williams Delivers Another Year of Record Results; Company to Host Analyst Day Event Today Starting at 8:30 a.m. ET

Williams Delivers Another Year of Record Results; Company to Host Analyst Day Event Today Starting at 8:30 a.m. ET

February 14, 2024

TULSA, Okla.--(BUSINESS WIRE)--Feb. 14, 2024-- Williams (NYSE: WMB) today announced its unaudited financial results for the three and 12 months ended December 31, 2023.

Continued strength in base business drives higher financial results

GAAP net income of $3.273 billion, or $2.68 per diluted share (EPS) – up 60% vs. 2022
Adjusted net income of $2.334 billion, or $1.91 per diluted share (Adj. EPS) – up 5% vs. 2022
Adjusted EBITDA of $6.779 billion – up $361 million or 6% vs. 2022
Cash flow from operations (CFFO) of $6.055 billion – up $1.166 billion or 24% vs. 2022
Available funds from operations (AFFO) of $5.213 billion – up $295 million or 6% vs. 2022
Dividend coverage ratio of 2.39x (AFFO basis)
Record gathering volumes of nearly 18 Bcf/d and contracted transmission capacity of 32.3 Bcf/d – up 6% and 32%, respectively, from 2022
Adjusted EBITDA guidance range of $6.8 billion to $7.1 billion in 2024 and $7.2 billion to $7.6 billion in 2025, yielding an expected 5-year CAGR of 8%
Ended year with 3.58x leverage ratio
Raised dividend by 6.1% to $1.90 annualized; hit 50 consecutive years of dividend payments

Transmission projects driving additional business growth in 2024-25; strategic acquisitions add highly contracted take-or-pay transmission and fee-based storage assets

Pre-filed FERC application for Transco's 1.6 Bcf/d Southeast Supply Enhancement 1Q 2024
Received FERC certificates for Transco's Commonwealth Energy Connectors, Southside Reliability Enhancement, Southeast Energy Connector and Texas to Louisiana Energy Pathway
Placed Transco's Carolina Market Link in service in 1Q 2024
Placed phase one of Transco's Regional Energy Access expansion in service in 4Q 2023 ahead of schedule with remainder expected by 4Q 2024
Completed Cardinal and Susquehanna gathering & processing expansions in 4Q 2023
Acquired 115-Bcf natural gas storage portfolio, positioning Williams as the largest storage owner on the Gulf Coast as storage spreads and natural gas volatility continue to expand
Optimized DJ Basin position with transactions to enhance natural gas and NGL value chain
Added more than 8 Bcf/d of transmission capacity and 56 Bcf of gas storage with MountainWest acquisition in the Rockies serving western markets

CEO Perspective

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

“Our natural gas-focused strategy delivered excellent financial results again in 2023 with contracted transmission capacity, gathering volumes and Adjusted EBITDA surpassing previous highs, demonstrating our ability to grow despite low natural gas prices. We expect this strong performance to continue in 2024 and have set our Adjusted EBITDA guidance midpoint at $6.95 billion, paving the way for what we anticipate will be a breakout year in 2025 as several large fee-based projects come online.

"In addition to outstanding financial results in 2023, we acquired strategic natural gas transmission, gathering and storage assets in the Rockies and on the Gulf Coast, enhancing our footprint in key areas and adding highly contracted take-or-pay transmission and fee-based storage assets to our business. We also continue to expand our existing infrastructure with 18 high-return projects in execution, including approximately 3.1 Bcf/d of expansions on Transco coming online over the next few years. I’m extremely proud of our teams for their commitment to best-in-class project execution in what has become a complex and challenging permitting environment for energy infrastructure of all types."

Armstrong added, “Looking ahead, Williams is excited to provide additional natural gas solutions to support the reliability of the U.S. power sector as it faces growing regional demand driven in large part by the emergence of new, large-scale data centers that are accelerating throughout our key markets. With the buildout of electrification and renewables, as well as previously permitted LNG export growth, Williams will be there to provide additional natural gas baseload to ensure reliability. Our infrastructure today is vital to meeting the energy needs of tomorrow. Natural gas is an immediate and scalable climate solution to reduce global emissions and serve the growing need for energy security, while creating long-term value for our shareholders.”

Williams Summary Financial Information	4Q		Full Year
Amounts in millions, except ratios and per-share amounts. Per share amounts are reported on a diluted basis. Net income amounts are from continuing operations attributable to The Williams Companies, Inc. available to common stockholders.	2023	2022	2023	2022

GAAP Measures
Net Income	$1,146	$668	$3,273	$2,046
Net Income Per Share	$0.94	$0.55	$2.68	$1.67
Cash Flow From Operations	$1,930	$1,219	$6,055	$4,889

Non-GAAP Measures (1)
Adjusted EBITDA	$1,721	$1,774	$6,779	$6,418
Adjusted Net Income	$588	$653	$2,334	$2,228
Adjusted Earnings Per Share	$0.48	$0.53	$1.91	$1.82
Available Funds from Operations	$1,323	$1,357	$5,213	$4,918
Dividend Coverage Ratio	2.43x	2.62x	2.39x	2.37x

Other
Debt-to-Adjusted EBITDA at Quarter End (2)	3.58x	3.55x
Capital Investments (Excluding Acquisitions) (3) (4)	$666	$876	$2,711	$2,147

(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) Fourth-quarter and full-year 2023 capital excludes $544 million for the DJ Basin acquisitions, which closed in November 2023. Full-year 2023 capital excludes $1.024 billion for the acquisition of MountainWest Pipeline Holding company, which closed February 14, 2023. Full-year 2022 capital excludes $424 million for the purchase of NorTex Midstream, which closed August 31, 2022. Full-year 2022 capital also excludes $933 million for purchase of the Trace Midstream Haynesville gathering assets, which closed April 29, 2022.

GAAP Measures

Fourth-quarter 2023 net income increased by $478 million compared to the prior year driven by a $534 million gain related to the net cash received from the favorable resolution of litigation with Energy Transfer. The improvement also reflects a favorable change of $147 million in net unrealized gains/losses on commodity derivatives and higher service revenues driven by recent acquisitions and expansion projects. These improvements were partially offset by lower gas marketing margins reflecting the absence of favorable severe winter weather impacts in the prior year, lower results from our upstream business, and higher depreciation and operating expenses resulting from acquisitions. The income tax provision increased $114 million primarily due to higher pretax income.

Full-year 2023 net income increased $1.2 billion compared to the prior year reflecting a favorable change of $909 million in net unrealized gains/losses on commodity derivatives, the previously described $534 million net litigation gain, and higher service revenues driven by recent acquisitions, expansion projects, and increased Northeast G&P volumes and rates. The improvement also included a $129 million gain on the sale of the Bayou Ethane system in 2023, partially offset by lower results from our upstream business, and higher depreciation and operating expenses resulting from acquisitions. The income tax provision increased $580 million primarily due to higher pretax income and the absence of $134 million benefit associated with the release of valuation allowances on deferred income tax assets and federal income tax settlements recorded in the prior year, and a lower benefit associated with decreases in our estimate of the state deferred income tax rate in both periods. The 2023 period also reported a loss from discontinued operations associated with an adverse legal ruling involving former refinery operations.

Cash flow from operations for the fourth quarter increased compared to the prior year primarily due to $534 million of net cash received related to the favorable Energy Transfer litigation outcome and favorable net changes in working capital. Full-year cash flow from operations increased compared to the prior year reflecting similar drivers, as well as favorable changes in derivative margin requirements partially offset by lower distributions from certain equity-method investments.

Non-GAAP Measures

Fourth-quarter 2023 Adjusted EBITDA decreased by $53 million from the prior year, driven by the previously described higher service revenues, more than offset by lower gas marketing margins, reduced upstream results and higher operating costs. Full-year 2023 Adjusted EBITDA increased by $361 million over the prior year, driven by the previously described higher service revenues, partially offset by reduced upstream results and higher operating costs.

Fourth-quarter 2023 Adjusted Net Income decreased by $65 million compared to the prior year, driven by the previously described impacts to net income, adjusted primarily to remove the net litigation gain, net unrealized gains/losses on commodity derivatives, and the related tax effects of these adjustments. Full-year Adjusted Net Income increased by $106 million over the prior year driven by the previously described impacts to net income from continuing operations, adjusted primarily for the litigation gain, net unrealized gains/losses on commodity derivatives, the gain on the sale of the Bayou Ethane system, amortization of certain assets from the Sequent acquisition, and the related tax effects of these adjustments as well as excluding the impact of the previously described prior year favorable income tax benefits.

Fourth-quarter 2023 Available Funds From Operations (AFFO) decreased slightly by $34 million compared to the prior year primarily due to lower operating results exclusive of noncash items. Full-year 2023 AFFO increased by $295 million primarily reflecting higher results from continuing operations exclusive of non-cash items partially offset by lower distributions from certain equity method investments.

Business Segment Results & Form 10-K

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 2023 Form 10-K.

	Fourth Quarter						Full Year
Amounts in millions	Modified EBITDA			Adjusted EBITDA			Modified EBITDA			Adjusted EBITDA
Amounts in millions	4Q 2023	4Q 2022	Change	4Q 2023	4Q 2022	Change	2023	2022	Change	2023	2022	Change
Transmission & Gulf of Mexico	$741	$687	$54	$752	$700	$52	$3,068	$2,674	$394	$2,982	$2,720	$262
Northeast G&P	477	464	13	485	464	21	1,916	1,796	120	1,955	1,796	159
West	307	326	(19)	323	326	(3)	1,238	1,211	27	1,236	1,219	17
Gas & NGL Marketing Services	272	209	63	69	149	(80)	950	(40)	990	300	258	42
Other	645	150	495	92	135	(43)	841	434	407	306	425	(119)
Total	$2,442	$1,836	$606	$1,721	$1,774	($53)	$8,013	$6,075	$1,938	$6,779	$6,418	$361

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

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

Northeast G&P

Fourth-quarter and full-year 2023 Modified and Adjusted EBITDA improved reflecting increased rates and volumes driven by the Ohio Valley, Cardinal, and Susquehanna operations. For our joint ventures, the full-year benefits of higher volumes and rates at Marcellus South and higher volumes at Blue Racer were more than offset by lower rates and volumes at Laurel Mountain Midstream and Bradford compared to the prior year. Modified EBITDA for full-year 2023 also reflects our share of a loss contingency accrual at Aux Sable which is excluded from Adjusted EBITDA.

West

Fourth-quarter 2023 Modified and Adjusted EBITDA decreased compared to the prior year primarily reflecting lower NYMEX-based rates in the Barnett partially offset by benefits from the DJ Basin Acquisitions. Full-year Modified and Adjusted EBITDA improved compared to the prior year driven by benefits from the DJ Basin and Trace Midstream Acquisitions and higher volumes at our Overland Pass joint venture. Favorable changes in operating and administrative costs were more than offset by lower processing margins reflecting a short-term gas price spike at Opal early in the year and severe weather impacts and lower service revenues reflecting lower NYMEX-based rates in the Barnett partially offset by favorable changes in realized gains on natural gas hedges and higher Haynesville volumes.

Gas & NGL Marketing Services

Fourth-quarter 2023 Modified EBITDA improved from the prior year primarily reflecting a $142 million net favorable change in unrealized gains/losses on commodity derivatives partially offset by lower gas marketing margins reflecting the absence of favorable severe winter weather impacts in the prior year. Full-year 2023 Modified EBITDA improved from the prior year primarily reflecting a $933 million net favorable change in unrealized gains/losses on commodity derivatives and higher commodity marketing margins reflecting reduced levels of inventory write-downs partially offset by the previously discussed lower gas marketing margins. The unrealized gains/losses on commodity derivatives are excluded from Adjusted EBITDA.

Other

Fourth-quarter and full-year 2023 Modified EBITDA increased compared to the prior year primarily reflecting the $534 million gain from the net cash received from the favorable resolution of our litigation with Energy Transfer, partially offset by lower results from our upstream business driven by lower prices, partially offset by higher production volumes. The full-year comparison also reflects a $24 million unfavorable change in unrealized gains/losses on commodity derivatives. Adjusted EBITDA for both comparative periods was lower and excludes the favorable litigation gain and the effects of changes in unrealized gains/losses on commodity derivatives.

Financial Guidance

The company expects 2024 Adjusted EBITDA between $6.8 billion and $7.1 billion. The company also expects 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 based on midpoint for emissions reduction and modernization initiatives. For 2025, the company expects 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 anticipates 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 2024 Analyst Day Scheduled for Today, Materials to be Posted Shortly

Williams is hosting its 2024 Analyst Day event this morning, beginning at 8:30 a.m. Eastern Time (7:30 a.m. Central Time). In addition to discussing 2023 results, Williams' management will give in-depth presentations covering the company's natural gas infrastructure strategy designed to meet growing clean energy demands. These presentations will highlight the company’s efficient operations, disciplined project execution, strong financial position and financial guidance. Presentation slides and earnings materials will be accessible on the Williams’ Investor Relations website shortly.

Participants who wish to view the live presentation can access the webcast here: https://wmb.link/73f

A replay of the 2024 Analyst Day 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)

		Year Ended December 31,
			2023			2022			2021
	(Millions, except per-share amounts)
Revenues:
Service revenues		$	7,026		$	6,536		$	6,001
Service revenues – commodity consideration			146			260			238
Product sales			2,779			4,556			4,536
Net gain (loss) from commodity derivatives			956			(387	)		(148	)
Total revenues			10,907			10,965			10,627
Costs and expenses:
Product costs			1,884			3,369			3,931
Net processing commodity expenses			151			88			101
Operating and maintenance expenses			1,984			1,817			1,548
Depreciation and amortization expenses			2,071			2,009			1,842
Selling, general, and administrative expenses			665			636			558
Gain on sale of business			(129	)		—			—
Other (income) expense – net			(30	)		28			16
Total costs and expenses			6,596			7,947			7,996
Operating income (loss)			4,311			3,018			2,631
Equity earnings (losses)			589			637			608
Other investing income (loss) – net			108			16			7
Interest expense.			(1,236	)		(1,147	)		(1,179	)
Net gain from Energy Transfer litigation judgment			534			—			—
Other income (expense) – net			99			18			6
Income (loss) before income taxes			4,405			2,542			2,073
Less: Provision (benefit) for income taxes			1,005			425			511
Income (loss) from continuing operations			3,400			2,117			1,562
Income (loss) from discontinued operations			(97	)		—			—
Net income (loss)			3,303			2,117			1,562
Less: Net income (loss) attributable to noncontrolling interests			124			68			45
Net income (loss) attributable to The Williams Companies, Inc.			3,179			2,049			1,517
Less: Preferred stock dividends			3			3			3
Net income (loss) available to common stockholders		$	3,176		$	2,046		$	1,514
Amounts attributable to The Williams Companies, Inc. available to common stockholders:
Income (loss) from continuing operations		$	3,273		$	2,046		$	1,514
Income (loss) from discontinued operations			(97	)		—			—
Net income (loss) available to common stockholders		$	3,176		$	2,046		$	1,514
Basic earnings (loss) per common share:
Income (loss) from continuing operations		$	2.69		$	1.68		$	1.25
Income (loss) from discontinued operations			(.08	)		—			—
Net income (loss) available to common stockholders		$	2.61		$	1.68		$	1.25
Weighted-average shares (thousands)			1,217,784			1,218,362			1,215,221
Diluted earnings (loss) per common share:
Income (loss) from continuing operations		$	2.68		$	1.67		$	1.24
Income (loss) from discontinued operations			(.08	)		—			—
Net income (loss) available to common stockholders		$	2.60		$	1.67		$	1.24
Weighted-average shares (thousands)			1,222,715			1,222,672			1,218,215

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

	December 31,
		2023			2022
	(Millions, except per-share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	2,150		$	152
Trade accounts and other receivables (net of allowance of $3 at December 31, 2023 and $6 at December 31, 2022)		1,655			2,723
Inventories		274			320
Derivative assets		239			323
Other current assets and deferred charges		195			279
Total current assets		4,513			3,797

Investments		4,637			5,065
Property, plant, and equipment – net		34,311			30,889
Intangible assets – net of accumulated amortization		7,593			7,363
Regulatory assets, deferred charges, and other		1,573			1,319
Total assets	$	52,627		$	48,433

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,379		$	2,327
Derivative liabilities		105			316
Accrued and other current liabilities		1,284			1,270
Commercial paper		725			350
Long-term debt due within one year		2,337			627
Total current liabilities		5,830			4,890

Long-term debt		23,376			21,927
Deferred income tax liabilities		3,846			2,887
Regulatory liabilities, deferred income, and other		4,684			4,684
Contingent liabilities and commitments

Equity:
Stockholders’ equity:
Preferred stock ($1 par value; 30 million shares authorized at December 31, 2023 and December 31, 2022; 35,000 shares issued at December 31, 2023 and December 31, 2022)		35			35
Common stock ($1 par value; 1,470 million shares authorized at December 31, 2023 and December 31, 2022; 1,256 million shares issued at December 31, 2023 and 1,253 million shares issued at December 31, 2022)		1,256			1,253
Capital in excess of par value		24,578			24,542
Retained deficit		(12,287	)		(13,271	)
Accumulated other comprehensive income (loss)		—			(24	)
Treasury stock, at cost (39 million shares at December 31, 2023 and 35 million shares at December 31, 2022 of common stock)		(1,180	)		(1,050	)
Total stockholders’ equity		12,402			11,485
Noncontrolling interests in consolidated subsidiaries		2,489			2,560
Total equity		14,891			14,045
Total liabilities and equity	$	52,627		$	48,433

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

	Year Ended December 31,
		2023			2022			2021
	(Millions)
OPERATING ACTIVITIES:
Net income (loss)	$	3,303		$	2,117		$	1,562
Adjustments to reconcile to net cash provided (used) by operating activities:
Depreciation and amortization		2,071			2,009			1,842
Provision (benefit) for deferred income taxes		951			431			509
Equity (earnings) losses		(589	)		(637	)		(608	)
Distributions from equity-method investees		796			865			757
Net unrealized (gain) loss from commodity derivative instruments		(660	)		249			109
Gain on sale of business		(129	)		—			—
Inventory write-downs		30			161			15
Amortization of stock-based awards		77			73			81
Cash provided (used) by changes in current assets and liabilities:
Accounts receivable		1,089			(733	)		(545	)
Inventories		13			(110	)		(139	)
Other current assets and deferred charges		60			(33	)		(63	)
Accounts payable		(892	)		410			643
Accrued and other current liabilities		(19	)		209			58
Changes in current and noncurrent commodity derivative assets and		200			94			(277	)
Other, including changes in noncurrent assets and liabilities		(246	)		(216	)		1
Net cash provided (used) by operating activities		6,055			4,889			3,945
FINANCING ACTIVITIES:
Proceeds from (payments of) commercial paper – net		372			345			—
Proceeds from long-term debt		2,755			1,755			2,155
Payments of long-term debt		(634	)		(2,876	)		(894	)
Proceeds from issuance of common stock		6			54			9
Purchases of treasury stock		(130	)		(9	)		—
Common dividends paid		(2,179	)		(2,071	)		(1,992	)
Dividends and distributions paid to noncontrolling interests		(213	)		(204	)		(187	)
Contributions from noncontrolling interests		18			18			9
Payments for debt issuance costs		(23	)		(17	)		(26	)
Other – net		(21	)		(37	)		(16	)
Net cash provided (used) by financing activities		(49	)		(3,042	)		(942	)
INVESTING ACTIVITIES:
Property, plant, and equipment:
Capital expenditures (1)		(2,633	)		(2,253	)		(1,239	)
Dispositions - net		(51	)		(30	)		(8	)
Proceeds from sale of business		346			—			—
Purchases of businesses, net of cash acquired		(1,568	)		(933	)		(151	)
Purchases of and contributions to equity-method investments		(141	)		(166	)		(115	)
Other – net		39			7			48
Net cash provided (used) by investing activities		(4,008	)		(3,375	)		(1,465	)
Increase (decrease) in cash and cash equivalents		1,998			(1,528	)		1,538
Cash and cash equivalents at beginning of year		152			1,680			142
Cash and cash equivalents at end of year	$	2,150		$	152		$	1,680
_________
(1) Increases to property, plant, and equipment.	$	(2,564	)	$	(2,394	)	$	(1,305	)
Changes in related accounts payable and accrued liabilities		(69	)		141			66
Capital expenditures	$	(2,633	)	$	(2,253	)	$	(1,239	)

Transmission & Gulf of Mexico
(UNAUDITED)
	2022															2023
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year
Regulated interstate natural gas transportation, storage, and other revenues ⁽¹⁾	$	730		$	717		$	734		$	758		$	2,939		$	774		$	786		$	794		$	822		$	3,176
Gathering, processing, storage and transportation revenues		82			84			99			100			365			100			104			114			100			418
Other fee revenues ⁽¹⁾		5			5			4			7			21			6			8			5			4			23
Commodity margins		15			11			10			7			43			10			8			7			8			33
Net unrealized gain (loss) from derivative instruments		—			—			1			(1	)		—			—			—			—			—			—
Operating and administrative costs ⁽¹⁾		(202	)		(227	)		(238	)		(239	)		(906	)		(254	)		(254	)		(257	)		(270	)		(1,035	)
Other segment income (expenses) - net ⁽¹⁾		19			17			(22	)		5			19			26			31			36			26			119
Gain on sale of business		—			—			—			—			—			—			—			130			(1	)		129
Proportional Modified EBITDA of equity-method investments		48			45			50			50			193			53			48			52			52			205
Modified EBITDA		697			652			638			687			2,674			715			731			881			741			3,068
Adjustments		—			—			33			13			46			13			17			(127	)		11			(86	)
Adjusted EBITDA	$	697		$	652		$	671		$	700		$	2,720		$	728		$	748		$	754		$	752		$	2,982

Statistics for Operated Assets
Natural Gas Transmission ⁽²⁾
Transcontinental Gas Pipe Line
Avg. daily transportation volumes (MMdth)		15.0			13.5			14.7			14.2			14.4			14.3			13.2			14.0			14.0			13.9
Avg. daily firm reserved capacity (MMdth)		19.3			19.1			19.2			19.3			19.2			19.5			19.4			19.4			19.3			19.4
Northwest Pipeline LLC
Avg. daily transportation volumes (MMdth)		2.8			2.1			2.0			2.9			2.5			3.1			2.3			2.3			2.8			2.6
Avg. daily firm reserved capacity (MMdth)		3.8			3.8			3.8			3.8			3.8			3.8			3.8			3.8			3.8			3.8
MountainWest ⁽³⁾
Avg. daily transportation volumes (MMdth)		—			—			—			—			—			4.2			3.2			3.8			4.2			3.9
Avg. daily firm reserved capacity (MMdth)		—			—			—			—			—			7.8			7.5			7.5			7.9			7.7
Gulfstream - Non-consolidated
Avg. daily transportation volumes (MMdth)		0.9			1.3			1.4			1.1			1.3			1.0			1.2			1.4			1.1			1.2
Avg. daily firm reserved capacity (MMdth)		1.3			1.3			1.4			1.4			1.4			1.4			1.4			1.4			1.4			1.4
Gathering, Processing, and Crude Oil Transportation
Consolidated ⁽⁴⁾
Gathering volumes (Bcf/d)		0.30			0.28			0.29			0.28			0.29			0.28			0.23			0.27			0.27			0.26
Plant inlet natural gas volumes (Bcf/d)		0.48			0.46			0.49			0.46			0.47			0.43			0.40			0.46			0.46			0.44
NGL production (Mbbls/d)		31			31			26			26			28			28			24			28			26			27
NGL equity sales (Mbbls/d)		7			7			4			5			6			7			5			6			5			6
Crude oil transportation volumes (Mbbls/d)		110			124			125			118			119			119			111			134			130			123
Non-consolidated ⁽⁵⁾
Gathering volumes (Bcf/d)		0.39			0.37			0.41			0.42			0.40			0.36			0.30			0.36			0.33			0.34
Plant inlet natural gas volumes (Bcf/d)		0.38			0.37			0.41			0.42			0.40			0.36			0.30			0.36			0.33			0.34
NGL production (Mbbls/d)		28			26			29			29			28			28			21			30			28			27
NGL equity sales (Mbbls/d)		8			6			7			10			8			8			3			8			7			7

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

Northeast G&P
(UNAUDITED)
	2022															2023
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year
Gathering, processing, transportation, and fractionation revenues	$	323		$	350		$	354		$	368		$	1,395		$	391		$	431		$	417		$	411		$	1,650
Other fee revenues ⁽¹⁾		27			27			27			46			127			32			27			27			28			114
Commodity margins		6			1			3			—			10			5			(1	)		7			1			12
Operating and administrative costs ⁽¹⁾		(85	)		(102	)		(101	)		(97	)		(385	)		(101	)		(101	)		(115	)		(107	)		(424	)
Other segment income (expenses) - net		(3	)		—			(1	)		(1	)		(5	)		—			—			(1	)		(9	)		(10	)
Proportional Modified EBITDA of equity-method investments		150			174			182			148			654			143			159			119			153			574
Modified EBITDA		418			450			464			464			1,796			470			515			454			477			1,916
Adjustments		—			—			—			—			—			—			—			31			8			39
Adjusted EBITDA	$	418		$	450		$	464		$	464		$	1,796		$	470		$	515		$	485		$	485		$	1,955

Statistics for Operated Assets
Gathering and Processing
Consolidated ⁽²⁾
Gathering volumes (Bcf/d)		4.03			4.19			4.22			4.31			4.19			4.42			4.61			4.41			4.37			4.45
Plant inlet natural gas volumes (Bcf/d)		1.46			1.70			1.74			1.70			1.65			1.92			1.79			1.93			1.93			1.89
NGL production (Mbbls/d)		110			118			125			127			120			144			135			144			133			139
NGL equity sales (Mbbls/d)		2			1			1			1			1			1			1			—			1			1
Non-consolidated ⁽³⁾
Gathering volumes (Bcf/d)		6.62			6.76			6.58			6.48			6.61			6.97			7.03			6.83			6.85			6.92
Plant inlet natural gas volumes (Bcf/d)		0.66			0.76			0.66			0.77			0.71			0.77			0.93			0.99			1.01			0.93
NGL production (Mbbls/d)		50			53			45			56			51			54			64			71			69			65
NGL equity sales (Mbbls/d)		4			3			2			2			3			4			5			4			4			4

(1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges.
(2) Includes volumes associated with Susquehanna Supply Hub, the Northeast JV, and Utica Supply Hub, all of which are consolidated.
(3) 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)
	2022															2023
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year
Net gathering, processing, transportation, storage, and fractionation revenues	$	317		$	360		$	397		$	401		$	1,475		$	382		$	373		$	371		$	397		$	1,523
Other fee revenues⁽¹⁾		6			6			6			5			23			5			7			4			8			24
Commodity margins		23			25			27			27			102			(24	)		18			21			19			34
Operating and administrative costs ⁽¹⁾		(112	)		(133	)		(128	)		(133	)		(506	)		(115	)		(122	)		(122	)		(144	)		(503	)
Other segment income (expenses) - net		(1	)		(1	)		(6	)		(7	)		(15	)		23			(7	)		(4	)		(14	)		(2	)
Proportional Modified EBITDA of equity-method investments		27			31			41			33			132			33			43			45			41			162
Modified EBITDA		260			288			337			326			1,211			304			312			315			307			1,238
Adjustments		—			8			—			—			8			(18	)		—			—			16			(2	)
Adjusted EBITDA	$	260		$	296		$	337		$	326		$	1,219		$	286		$	312		$	315		$	323		$	1,236

Statistics for Operated Assets
Gathering and Processing
Consolidated ^{(2) (4)}
Gathering volumes (Bcf/d) ⁽³⁾		3.47			5.14			5.20			5.50			5.19			5.47			5.51			5.60			6.03			6.02
Plant inlet natural gas volumes (Bcf/d)		1.13			1.14			1.21			1.10			1.15			0.92			1.06			1.12			1.63			1.54
NGL production (Mbbls/d)		47			49			45			32			43			25			40			61			99			91
NGL equity sales (Mbbls/d)		17			18			13			7			14			6			16			22			14			14
Non-consolidated ⁽⁵⁾
Gathering volumes (Bcf/d)		0.28			0.28			0.29			0.29			0.29			0.32			0.33			0.33			—			—
Plant inlet natural gas volumes (Bcf/d)		0.27			0.28			0.29			0.29			0.28			0.32			0.32			0.32			—			—
NGL production (Mbbls/d)		31			32			34			32			33			37			38			38			—			—
NGL and Crude Oil Transportation volumes (Mbbls/d) ⁽⁶⁾		132			162			189			151			158			161			217			244			250			218

(1) Excludes certain amounts associated with revenues and operating costs for reimbursable charges.
(2) Excludes volumes associated with equity-method investments that are not consolidated in our results.
(3) Includes 100% of the volumes associated with the Trace Acquisition gathering assets after the purchase on April 29, 2022 and 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 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 Rocky Mountain Midstream through 3rd Qtr 2023.
(6) Includes 100% of the volumes associated with Overland Pass Pipeline Company (and operated equity-method investment), Rocky Mountain Midstream (see Note 4 above) as well as volumes for our consolidated Bluestem pipeline.

Gas & NGL Marketing Services
(UNAUDITED)
	2022															2023
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year
Commodity margins	$	100		$	23		$	39		$	161		$	323		$	265		$	(2	)	$	38		$	88		$	389
Other fee revenues		1			—			1			1			3			1			—			—			—			1
Net unrealized gain (loss) from derivative instruments		(57	)		(288	)		5			66			(274	)		333			94			24			208			659
Operating and administrative costs		(31	)		(23	)		(24	)		(18	)		(96	)		(32	)		(24	)		(19	)		(24	)		(99	)
Other segment income (expenses) - net		—			6			(1	)		(1	)		4			—			—			—			—			—
Modified EBITDA		13			(282	)		20			209			(40	)		567			68			43			272			950
Adjustments		52			288			18			(60	)		298			(336	)		(84	)		(27	)		(203	)		(650	)
Adjusted EBITDA	$	65		$	6		$	38		$	149		$	258		$	231		$	(16	)	$	16		$	69		$	300

Statistics
Product Sales Volumes
Natural Gas (Bcf/d)		7.96			6.66			7.11			7.05			7.20			7.24			6.56			7.31			7.11			7.05
NGLs (Mbbls/d)		246			234			267			254			250			234			239			245			173			223

Other
(UNAUDITED)
	2022															2023
(Dollars in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year
Service revenues	$	9		$	7		$	6		$	2		$	24		$	3		$	5		$	4		$	4		$	16
Net realized product sales		96			142			180			184			602			120			97			127			145			489
Net unrealized gain (loss) from derivative instruments		(66	)		47			29			15			25			(6	)		(11	)		(1	)		19			1
Operating and administrative costs		(33	)		(57	)		(62	)		(59	)		(211	)		(48	)		(54	)		(58	)		(65	)		(225	)
Other segment income (expenses) - net		(1	)		—			(13	)		8			(6	)		5			5			10			8			28
Net gain from Energy Transfer litigation judgment		—			—			—			—			—			—			—			—			534			534
Proportional Modified EBITDA of equity-method investments		—			—			—			—			—			—			(1	)		(1	)		—			(2	)
Modified EBITDA		5			139			140			150			434			74			41			81			645			841
Adjustments		66			(47	)		(13	)		(15	)		(9	)		6			11			1			(553	)		(535	)
Adjusted EBITDA	$	71		$	92		$	127		$	135		$	425		$	80		$	52		$	82		$	92		$	306

Statistics
Net Product Sales Volumes
Natural Gas (Bcf/d)		0.12			0.19			0.27			0.31			0.22			0.26			0.29			0.31			0.30			0.29
NGLs (Mbbls/d)		7			7			8			7			7			3			6			9			10			7
Crude Oil (Mbbls/d)		2			3			2			2			2			1			3			5			7			4

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

Capital expenditures:
Transmission & Gulf of Mexico	$	125		$	129		$	637		$	358		$	1,249		$	205	$	263		$	382		$	521		$	1,371
Northeast G&P		40			30			52			92			214			99		74			115			71			359
West		61			82			94			226			463			169		197			141			121			628
Other		65			74			58			130			327			72		76			52			75			275
Total ⁽¹⁾	$	291		$	315		$	841		$	806		$	2,253		$	545	$	610		$	690		$	788		$	2,633

Purchases of and contributions to equity-method investments:
Transmission & Gulf of Mexico	$	16		$	26		$	11		$	17		$	70		$	8	$	18		$	6		$	9		$	41
Northeast G&P		32			18			28			8			86			31		12			4			52			99
West		—			—			—			—			—			—		—			1			—			1
Other		8			—			1			1			10			—		—			—			—			—
Total	$	56		$	44		$	40		$	26		$	166		$	39	$	30		$	11		$	61		$	141

Summary:
Transmission & Gulf of Mexico	$	141		$	155		$	648		$	375		$	1,319		$	213	$	281		$	388		$	530		$	1,412
Northeast G&P		72			48			80			100			300			130		86			119			123			458
West		61			82			94			226			463			169		197			142			121			629
Other		73			74			59			131			337			72		76			52			75			275
Total	$	347		$	359		$	881		$	832		$	2,419		$	584	$	640		$	701		$	849		$	2,774

Capital investments:
Increases to property, plant, and equipment	$	260		$	382		$	907		$	845		$	2,394		$	484	$	684		$	792		$	604		$	2,564
Purchases of businesses, net of cash acquired		—			933			—			—			933			1,056		(3	)		(29	)		544			1,568
Purchases of and contributions to equity-method investments		56			44			40			26			166			39		30			11			61			141
Purchases of other long-term investments		—			3			3			5			11			2		1			2			1			6
Total	$	316		$	1,362		$	950		$	876		$	3,504		$	1,581	$	712		$	776		$	1,210		$	4,279

⁽¹⁾ Increases to property, plant, and equipment	$	260		$	382		$	907		$	845		$	2,394		$	484	$	684		$	792		$	604		$	2,564
Changes in related accounts payable and accrued liabilities		31			(67	)		(66	)		(39	)		(141	)		61		(74	)		(102	)		184			69
Capital expenditures	$	291		$	315		$	841		$	806		$	2,253		$	545	$	610		$	690		$	788		$	2,633

Contributions from noncontrolling interests	$	3		$	5		$	7		$	3		$	18		$	3	$	15		$	—		$	—		$	18
Contributions in aid of construction	$	(3	)	$	9		$	2		$	4		$	12		$	11	$	7		$	2		$	8		$	28
Proceeds from sale of business	$	—		$	—		$	—		$	—		$	—		$	—	$	—		$	348		$	(2	)	$	346
Proceeds from disposition of equity-method investments	$	—		$	—		$	7		$	—		$	7		$	—	$	—		$	—		$	—		$	—

Non-GAAP Measures

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

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

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

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

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

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

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

Income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders	$	379		$	400		$	599		$	668		$	2,046		$	926		$	547		$	654		$	1,146		$	3,273

Income (loss) from continuing operations - diluted earnings (loss) per common share ⁽¹⁾	$	.31		$	.33		$	.49		$	.55		$	1.67		$	.76		$	.45		$	.54		$	.94		$	2.68
Adjustments:
Transmission & Gulf of Mexico
Loss related to Eminence storage cavern abandonments and monitoring	$	—		$	—		$	19		$	12		$	31		$	—		$	—		$	—		$	—		$	—
Regulatory liability charges associated with decrease in Transco’s estimated deferred state income tax rate		—			—			15			—			15			—			—			—			—			—
Net unrealized (gain) loss from derivative instruments		—			—			(1	)		1			—			—			—			—			—			—
MountainWest acquisition and transition-related costs		—			—			—			—			—			13			17			3			9			42
Gulf Coast Storage acquisition and transition-related costs		—			—			—			—			—			—			—			—			1			1
Gain on sale of business		—			—			—			—			—			—			—			(130	)		1			(129	)
Total Transmission & Gulf of Mexico adjustments		—			—			33			13			46			13			17			(127	)		11			(86	)
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
Trace acquisition costs		—			8			—			—			8			—			—			—			—			—
Cureton acquisition and transition-related costs		—			—			—			—			—			—			—			—			6			6
Gain from contract settlement		—			—			—			—			—			(18	)		—			—			—			(18	)
Impairment of assets held for sale		—			—			—			—			—			—			—			—			10			10
Total West adjustments		—			8			—			—			8			(18	)		—			—			16			(2	)
Gas & NGL Marketing Services
Amortization of purchase accounting inventory fair value adjustment		15			—			—			—			15			—			—			—			—			—
Impact of volatility on NGL linefill transactions		(20	)		—			23			6			9			(3	)		10			(3	)		5			9
Net unrealized (gain) loss from derivative instruments		57			288			(5	)		(66	)		274			(333	)		(94	)		(24	)		(208	)		(659	)
Total Gas & NGL Marketing Services adjustments		52			288			18			(60	)		298			(336	)		(84	)		(27	)		(203	)		(650	)
Other
Regulatory liability charge associated with decrease in Transco’s estimated deferred state income tax rate		—			—			5			—			5			—			—			—			—			—
Net unrealized (gain) loss from derivative instruments		66			(47	)		(29	)		(15	)		(25	)		6			11			1			(19	)		(1	)
Net gain from Energy Transfer litigation judgment		—			—			—			—			—			—			—			—			(534	)		(534	)
Accrual for loss contingency		—			—			11			—			11			—			—			—			—			—
Total Other adjustments		66			(47	)		(13	)		(15	)		(9	)		6			11			1			(553	)		(535	)
Adjustments included in Modified EBITDA		118			249			38			(62	)		343			(335	)		(56	)		(122	)		(721	)		(1,234	)
Adjustments below Modified EBITDA
Gain on remeasurement of RMM investment		—			—			—			—			—			—			—			—			(30	)		(30	)
Amortization of intangible assets from Sequent acquisition		42			41			42			42			167			15			14			15			15			59
Depreciation adjustment related to Eminence storage cavern abandonments		—			—			(1	)		—			(1	)		—			—			—			—			—
		42			41			41			42			166			15			14			15			(15	)		29
Total adjustments		160			290			79			(20	)		509			(320	)		(42	)		(107	)		(736	)		(1,205	)
Less tax effect for above items		(40	)		(72	)		(17	)		5			(124	)		78			10			25			178			291
Adjustments for tax-related items ⁽²⁾		—			(134	)		(69	)		—			(203	)		—			—			(25	)		—			(25	)
Adjusted income from continuing operations available to common stockholders	$	499		$	484		$	592		$	653		$	2,228		$	684		$	515		$	547		$	588		$	2,334
Adjusted income from continuing operations - diluted earnings per common share ⁽¹⁾	$	.41		$	.40		$	.48		$	.53		$	1.82		$	.56		$	.42		$	.45		$	.48		$	1.91
Weighted-average shares - diluted (thousands)		1,221,279			1,222,694			1,222,472			1,224,212			1,222,672			1,225,781			1,219,915			1,220,073			1,221,894			1,221,616
(1) The sum of earnings per share for the quarters may not equal the total earnings per share for the year due to changes in the weighted-average number of common shares outstanding.
(2) The second quarter of 2022 includes adjustments for the reversal of valuation allowance due to the expected utilization of certain deferred income tax assets and previously unrecognized tax benefits from the resolution of certain federal income tax audits. The third quarter of 2022 includes an unfavorable adjustment to reverse the net benefit primarily associated with a significant decrease in our estimated deferred state income tax rate, partially offset by an unfavorable revision to a state net operating loss carryforward. The third quarter of 2023 includes an adjustment associated with a further decrease in our estimated deferred state income tax rate.

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

Net income (loss)	$	392		$	407		$	621		$	697		$	2,117		$	957		$	494		$	684		$	1,168		$	3,303
Provision (benefit) for income taxes		118			(45	)		96			256			425			284			175			176			370			1,005
Interest expense		286			281			291			289			1,147			294			306			314			322			1,236
Equity (earnings) losses		(136	)		(163	)		(193	)		(145	)		(637	)		(147	)		(160	)		(127	)		(155	)		(589	)
Other investing (income) loss - net		(1	)		(2	)		(1	)		(12	)		(16	)		(8	)		(13	)		(24	)		(63	)		(108	)
Proportional Modified EBITDA of equity-method investments		225			250			273			231			979			229			249			215			246			939
Depreciation and amortization expenses		498			506			500			505			2,009			506			515			521			529			2,071
Accretion expense associated with asset retirement obligations for nonregulated operations		11			13			12			15			51			15			14			14			16			59
(Income) loss from discontinued operations, net of tax		—			—			—			—			—			—			87			1			9			97
Modified EBITDA	$	1,393		$	1,247		$	1,599		$	1,836		$	6,075		$	2,130		$	1,667		$	1,774		$	2,442		$	8,013

Transmission & Gulf of Mexico	$	697		$	652		$	638		$	687		$	2,674		$	715		$	731		$	881		$	741		$	3,068
Northeast G&P		418			450			464			464			1,796			470			515			454			477			1,916
West		260			288			337			326			1,211			304			312			315			307			1,238
Gas & NGL Marketing Services		13			(282	)		20			209			(40	)		567			68			43			272			950
Other		5			139			140			150			434			74			41			81			645			841
Total Modified EBITDA	$	1,393		$	1,247		$	1,599		$	1,836		$	6,075		$	2,130		$	1,667		$	1,774		$	2,442		$	8,013

Adjustments ⁽¹⁾:
Transmission & Gulf of Mexico	$	—		$	—		$	33		$	13		$	46		$	13		$	17		$	(127	)	$	11		$	(86	)
Northeast G&P		—			—			—			—			—			—			—			31			8			39
West		—			8			—			—			8			(18	)		—			—			16			(2	)
Gas & NGL Marketing Services		52			288			18			(60	)		298			(336	)		(84	)		(27	)		(203	)		(650	)
Other		66			(47	)		(13	)		(15	)		(9	)		6			11			1			(553	)		(535	)
Total Adjustments	$	118		$	249		$	38		$	(62	)	$	343		$	(335	)	$	(56	)	$	(122	)	$	(721	)	$	(1,234	)

Adjusted EBITDA:
Transmission & Gulf of Mexico	$	697		$	652		$	671		$	700		$	2,720		$	728		$	748		$	754		$	752		$	2,982
Northeast G&P		418			450			464			464			1,796			470			515			485			485			1,955
West		260			296			337			326			1,219			286			312			315			323			1,236
Gas & NGL Marketing Services		65			6			38			149			258			231			(16	)		16			69			300
Other		71			92			127			135			425			80			52			82			92			306
Total Adjusted EBITDA	$	1,511		$	1,496		$	1,637		$	1,774		$	6,418		$	1,795		$	1,611		$	1,652		$	1,721		$	6,779

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

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

Net cash provided (used) by operating activities	$	1,082		$	1,098		$	1,490		$	1,219		$	4,889		$	1,514		$	1,377		$	1,234		$	1,930		$	6,055
Exclude: Cash (provided) used by changes in:
Accounts receivable		3			794			(125	)		61			733			(1,269	)		(154	)		128			206			(1,089	)
Inventories, including write-downs		(178	)		177			77			(127	)		(51	)		(45	)		(19	)		7			14			(43	)
Other current assets and deferred charges		65			(50	)		47			(29	)		33			4			(28	)		29			(65	)		(60	)
Accounts payable		138			(828	)		(53	)		333			(410	)		1,017			203			(148	)		(180	)		892
Accrued and other current liabilities		149			(125	)		(191	)		(42	)		(209	)		318			(246	)		42			(95	)		19
Changes in current and noncurrent commodity derivative assets and liabilities		(101	)		52			(37	)		(8	)		(94	)		(82	)		(37	)		(53	)		(28	)		(200	)
Other, including changes in noncurrent assets and liabilities		67			65			73			11			216			40			47			53			106			246
Preferred dividends paid		(1	)		—			(1	)		(1	)		(3	)		(1	)		—			(1	)		(1	)		(3	)
Dividends and distributions paid to noncontrolling interests		(37	)		(58	)		(46	)		(63	)		(204	)		(54	)		(58	)		(62	)		(39	)		(213	)
Contributions from noncontrolling interests		3			5			7			3			18			3			15			—			—			18
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	)
Available funds from operations	$	1,190		$	1,130		$	1,241		$	1,357		$	4,918		$	1,445		$	1,215		$	1,230		$	1,323		$	5,213

Common dividends paid	$	518		$	517		$	518		$	518		$	2,071		$	546		$	545		$	544		$	544		$	2,179

Coverage ratio:
Available funds from operations divided by Common dividends paid		2.30			2.19			2.40			2.62			2.37			2.65			2.23			2.26			2.43			2.39

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 (a) Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 27, 2023, (b) Part II, Item 1A. Risk Factors in subsequent Quarterly Reports on Form 10-Q, and (c) when filed with the SEC, Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240214832571/en/

MEDIA CONTACT:
media@williams.com
(800) 945-8723

INVESTOR CONTACTS:
Danilo Juvane
(918) 573-5075

Caroline Sardella
(918) 230-9992

Source: Williams

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