|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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THE WILLIAMS COMPANIES, INC.
|
(Exact name of registrant as specified in its charter)
|
DELAWARE
|
|
73-0569878
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
ONE WILLIAMS CENTER
|
|
|
TULSA, OKLAHOMA
|
|
74172-0172
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(Address of principal executive offices)
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(Zip Code)
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|
Title of each class
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Trading Symbol(s)
|
Name of each exchange on which registered
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Common Stock, $1.00 par value
|
WMB
|
New York Stock Exchange
|
Large accelerated filer
þ
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|
Accelerated filer
¨
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|
Non-accelerated filer
¨
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|
Smaller reporting company
¨
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Emerging growth company
¨
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Class
|
|
Shares Outstanding at April 29, 2019
|
Common Stock, $1.00 par value
|
|
1,211,770,224
|
|
|
|
Page
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•
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Levels of dividends to Williams stockholders;
|
•
|
Future credit ratings of Williams and its affiliates;
|
•
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Amounts and nature of future capital expenditures;
|
•
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Expansion and growth of our business and operations;
|
•
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Expected in-service dates for capital projects;
|
•
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Financial condition and liquidity;
|
•
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Business strategy;
|
•
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Cash flow from operations or results of operations;
|
•
|
Seasonality of certain business components;
|
•
|
Natural gas and natural gas liquids prices, supply, and demand;
|
•
|
Demand for our services.
|
•
|
Whether we are able to pay current and expected levels of dividends;
|
•
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Whether we will be able to effectively execute our financing plan;
|
•
|
Availability of supplies, market demand, and volatility of prices;
|
•
|
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);
|
•
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The strength and financial resources of our competitors and the effects of competition;
|
•
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Whether we are able to successfully identify, evaluate and timely execute our capital projects and investment opportunities;
|
•
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Our ability to acquire new businesses and assets and successfully integrate those operations and assets into existing businesses as well as successfully expand our facilities, and to consummate asset sales on acceptable terms;
|
•
|
Development and rate of adoption of alternative energy sources;
|
•
|
The impact of operational and developmental hazards and unforeseen interruptions;
|
•
|
The impact of existing and future laws and regulations, the regulatory environment, environmental liabilities, and litigation, as well as our ability to obtain necessary permits and approvals, and achieve favorable rate proceeding outcomes;
|
•
|
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;
|
•
|
Changes in the current geopolitical situation;
|
•
|
Our exposure to the credit risk of our customers and counterparties;
|
•
|
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 amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate;
|
•
|
Risks associated with weather and natural phenomena, including climate conditions and physical damage to our facilities;
|
•
|
Acts of terrorism, cybersecurity incidents, and related disruptions;
|
•
|
Additional risks described in our filings with the Securities and Exchange Commission (SEC).
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Millions, except per-share amounts)
|
||||||
Revenues:
|
|
|
|
||||
Service revenues
|
$
|
1,440
|
|
|
$
|
1,351
|
|
Service revenues – commodity consideration
|
64
|
|
|
101
|
|
||
Product sales
|
550
|
|
|
636
|
|
||
Total revenues
|
2,054
|
|
|
2,088
|
|
||
Costs and expenses:
|
|
|
|
||||
Product costs
|
525
|
|
|
613
|
|
||
Processing commodity expenses
|
40
|
|
|
35
|
|
||
Operating and maintenance expenses
|
340
|
|
|
357
|
|
||
Depreciation and amortization expenses
|
416
|
|
|
431
|
|
||
Selling, general, and administrative expenses
|
128
|
|
|
132
|
|
||
Other (income) expense – net
|
44
|
|
|
29
|
|
||
Total costs and expenses
|
1,493
|
|
|
1,597
|
|
||
Operating income (loss)
|
561
|
|
|
491
|
|
||
Equity earnings (losses)
|
80
|
|
|
82
|
|
||
Impairment of equity-method investments (Note 2)
|
(74
|
)
|
|
—
|
|
||
Other investing income (loss) – net
|
1
|
|
|
4
|
|
||
Interest incurred
|
(306
|
)
|
|
(282
|
)
|
||
Interest capitalized
|
10
|
|
|
9
|
|
||
Other income (expense) – net
|
11
|
|
|
21
|
|
||
Income (loss) before income taxes
|
283
|
|
|
325
|
|
||
Provision (benefit) for income taxes
|
69
|
|
|
55
|
|
||
Net income (loss)
|
214
|
|
|
270
|
|
||
Less: Net income (loss) attributable to noncontrolling interests
|
19
|
|
|
118
|
|
||
Net income (loss) attributable to The Williams Companies, Inc.
|
195
|
|
|
152
|
|
||
Preferred stock dividends
|
1
|
|
|
—
|
|
||
Net income (loss) available to common stockholders
|
$
|
194
|
|
|
$
|
152
|
|
Basic earnings (loss) per common share:
|
|
|
|
||||
Net income (loss)
|
$
|
.16
|
|
|
$
|
.18
|
|
Weighted-average shares (thousands)
|
1,211,489
|
|
|
827,509
|
|
||
Diluted earnings (loss) per common share:
|
|
|
|
||||
Net income (loss)
|
$
|
.16
|
|
|
$
|
.18
|
|
Weighted-average shares (thousands)
|
1,213,592
|
|
|
830,197
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Millions)
|
||||||
Net income (loss)
|
$
|
214
|
|
|
$
|
270
|
|
Other comprehensive income (loss):
|
|
|
|
||||
Cash flow hedging activities:
|
|
|
|
||||
Net unrealized gain (loss) from derivative instruments
|
—
|
|
|
1
|
|
||
Pension and other postretirement benefits:
|
|
|
|
||||
Amortization of actuarial (gain) loss included in net periodic benefit cost (credit), net of taxes of ($1) in 2019 and 2018
|
3
|
|
|
5
|
|
||
Other comprehensive income (loss)
|
3
|
|
|
6
|
|
||
Comprehensive income (loss)
|
217
|
|
|
276
|
|
||
Less: Comprehensive income (loss) attributable to noncontrolling interests
|
19
|
|
|
119
|
|
||
Comprehensive income (loss) attributable to The Williams Companies, Inc.
|
$
|
198
|
|
|
$
|
157
|
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
|
|
(Millions, except per-share amounts)
|
||||||
ASSETS
|
|
|
||||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
43
|
|
|
$
|
168
|
|
Trade accounts and other receivables (net of allowance of $9 at March 31, 2019 and $9 at December 31, 2018)
|
|
929
|
|
|
992
|
|
||
Inventories
|
|
129
|
|
|
130
|
|
||
Other current assets and deferred charges
|
|
186
|
|
|
174
|
|
||
Total current assets
|
|
1,287
|
|
|
1,464
|
|
||
Investments
|
|
6,544
|
|
|
7,821
|
|
||
Property, plant, and equipment
|
|
40,541
|
|
|
38,661
|
|
||
Accumulated depreciation and amortization
|
|
(11,460
|
)
|
|
(11,157
|
)
|
||
Property, plant, and equipment – net
|
|
29,081
|
|
|
27,504
|
|
||
Intangible assets – net of accumulated amortization
|
|
8,096
|
|
|
7,767
|
|
||
Regulatory assets, deferred charges, and other
|
|
962
|
|
|
746
|
|
||
Total assets
|
|
$
|
45,970
|
|
|
$
|
45,302
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
620
|
|
|
$
|
662
|
|
Accrued liabilities
|
|
974
|
|
|
1,102
|
|
||
Commercial paper
|
|
1,014
|
|
|
—
|
|
||
Long-term debt due within one year
|
|
1,561
|
|
|
47
|
|
||
Total current liabilities
|
|
4,169
|
|
|
1,811
|
|
||
Long-term debt
|
|
20,703
|
|
|
22,367
|
|
||
Deferred income tax liabilities
|
|
1,601
|
|
|
1,524
|
|
||
Regulatory liabilities, deferred income, and other
|
|
3,772
|
|
|
3,603
|
|
||
Contingent liabilities (Note 13)
|
|
|
|
|
||||
Equity:
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Preferred stock
|
|
35
|
|
|
35
|
|
||
Common stock ($1 par value; 1,470 million shares authorized at March 31, 2019 and December 31, 2018; 1,246 million shares issued at March 31, 2019 and 1,245 million shares issued at December 31, 2018)
|
|
1,246
|
|
|
1,245
|
|
||
Capital in excess of par value
|
|
24,703
|
|
|
24,693
|
|
||
Retained deficit
|
|
(10,270
|
)
|
|
(10,002
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
(267
|
)
|
|
(270
|
)
|
||
Treasury stock, at cost (35 million shares of common stock)
|
|
(1,041
|
)
|
|
(1,041
|
)
|
||
Total stockholders’ equity
|
|
14,406
|
|
|
14,660
|
|
||
Noncontrolling interests in consolidated subsidiaries
|
|
1,319
|
|
|
1,337
|
|
||
Total equity
|
|
15,725
|
|
|
15,997
|
|
||
Total liabilities and equity
|
|
$
|
45,970
|
|
|
$
|
45,302
|
|
|
The Williams Companies, Inc. Stockholders
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Preferred
Stock
|
|
Common
Stock |
|
Capital in
Excess of
Par Value
|
|
Retained
Deficit
|
|
AOCI*
|
|
Treasury
Stock
|
|
Total
Stockholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
||||||||||||||||||
|
(Millions)
|
||||||||||||||||||||||||||||||||||
Balance – December 31, 2018
|
$
|
35
|
|
|
$
|
1,245
|
|
|
$
|
24,693
|
|
|
$
|
(10,002
|
)
|
|
$
|
(270
|
)
|
|
$
|
(1,041
|
)
|
|
$
|
14,660
|
|
|
$
|
1,337
|
|
|
$
|
15,997
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
195
|
|
|
—
|
|
|
—
|
|
|
195
|
|
|
19
|
|
|
214
|
|
|||||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||||||
Cash dividends – common stock ($0.38 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(460
|
)
|
|
—
|
|
|
—
|
|
|
(460
|
)
|
|
—
|
|
|
(460
|
)
|
|||||||||
Dividends and distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41
|
)
|
|
(41
|
)
|
|||||||||
Stock-based compensation and related common stock issuances, net of tax
|
—
|
|
|
1
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|||||||||
Contributions from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||||||
Net increase (decrease) in equity
|
—
|
|
|
1
|
|
|
10
|
|
|
(268
|
)
|
|
3
|
|
|
—
|
|
|
(254
|
)
|
|
(18
|
)
|
|
(272
|
)
|
|||||||||
Balance – March 31, 2019
|
$
|
35
|
|
|
$
|
1,246
|
|
|
$
|
24,703
|
|
|
$
|
(10,270
|
)
|
|
$
|
(267
|
)
|
|
$
|
(1,041
|
)
|
|
$
|
14,406
|
|
|
$
|
1,319
|
|
|
$
|
15,725
|
|
Balance – December 31, 2017
|
$
|
—
|
|
|
$
|
861
|
|
|
$
|
18,508
|
|
|
$
|
(8,434
|
)
|
|
$
|
(238
|
)
|
|
$
|
(1,041
|
)
|
|
$
|
9,656
|
|
|
$
|
6,519
|
|
|
$
|
16,175
|
|
Adoption of new accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
(61
|
)
|
|
—
|
|
|
(84
|
)
|
|
(37
|
)
|
|
(121
|
)
|
|||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
152
|
|
|
—
|
|
|
—
|
|
|
152
|
|
|
118
|
|
|
270
|
|
|||||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
1
|
|
|
6
|
|
|||||||||
Cash dividends – common stock ($0.34 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(281
|
)
|
|
—
|
|
|
—
|
|
|
(281
|
)
|
|
—
|
|
|
(281
|
)
|
|||||||||
Dividends and distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(187
|
)
|
|
(187
|
)
|
|||||||||
Stock-based compensation and related common stock issuances, net of tax
|
—
|
|
|
1
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
|||||||||
Sales of limited partner units of Williams Partners L.P.
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
22
|
|
|||||||||
Changes in ownership of consolidated subsidiaries, net
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
(9
|
)
|
|
(2
|
)
|
|||||||||
Contributions from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||||||
Net increase (decrease) in equity
|
—
|
|
|
1
|
|
|
25
|
|
|
(153
|
)
|
|
(56
|
)
|
|
—
|
|
|
(183
|
)
|
|
(89
|
)
|
|
(272
|
)
|
|||||||||
Balance – March 31, 2018
|
$
|
—
|
|
|
$
|
862
|
|
|
$
|
18,533
|
|
|
$
|
(8,587
|
)
|
|
$
|
(294
|
)
|
|
$
|
(1,041
|
)
|
|
$
|
9,473
|
|
|
$
|
6,430
|
|
|
$
|
15,903
|
|
|
*
|
Accumulated Other Comprehensive Income (Loss)
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Millions)
|
||||||
OPERATING ACTIVITIES:
|
|
||||||
Net income (loss)
|
$
|
214
|
|
|
$
|
270
|
|
Adjustments to reconcile to net cash provided (used) by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
416
|
|
|
431
|
|
||
Provision (benefit) for deferred income taxes
|
75
|
|
|
73
|
|
||
Equity (earnings) losses
|
(80
|
)
|
|
(82
|
)
|
||
Distributions from unconsolidated affiliates
|
172
|
|
|
140
|
|
||
Impairment of equity-method investments (Note 2)
|
74
|
|
|
—
|
|
||
Amortization of stock-based awards
|
14
|
|
|
14
|
|
||
Cash provided (used) by changes in current assets and liabilities:
|
|
|
|
||||
Accounts and notes receivable
|
97
|
|
|
238
|
|
||
Inventories
|
1
|
|
|
(40
|
)
|
||
Other current assets and deferred charges
|
(6
|
)
|
|
(4
|
)
|
||
Accounts payable
|
(39
|
)
|
|
(197
|
)
|
||
Accrued liabilities
|
(142
|
)
|
|
(166
|
)
|
||
Other, including changes in noncurrent assets and liabilities
|
(21
|
)
|
|
17
|
|
||
Net cash provided (used) by operating activities
|
775
|
|
|
694
|
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from (payments of) commercial paper – net
|
1,014
|
|
|
—
|
|
||
Proceeds from long-term debt
|
708
|
|
|
2,048
|
|
||
Payments of long-term debt
|
(864
|
)
|
|
(1,060
|
)
|
||
Proceeds from issuance of common stock
|
6
|
|
|
10
|
|
||
Common dividends paid
|
(460
|
)
|
|
(281
|
)
|
||
Dividends and distributions paid to noncontrolling interests
|
(41
|
)
|
|
(165
|
)
|
||
Contributions from noncontrolling interests
|
4
|
|
|
3
|
|
||
Payments for debt issuance costs
|
—
|
|
|
(18
|
)
|
||
Other – net
|
(9
|
)
|
|
(40
|
)
|
||
Net cash provided (used) by financing activities
|
358
|
|
|
497
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
||||
Property, plant, and equipment:
|
|
|
|
||||
Capital expenditures (1)
|
(422
|
)
|
|
(957
|
)
|
||
Dispositions – net
|
(4
|
)
|
|
(1
|
)
|
||
Contributions in aid of construction
|
10
|
|
|
190
|
|
||
Purchases of businesses, net of cash acquired
|
(727
|
)
|
|
—
|
|
||
Purchases of and contributions to equity-method investments
|
(99
|
)
|
|
(21
|
)
|
||
Other – net
|
(16
|
)
|
|
(9
|
)
|
||
Net cash provided (used) by investing activities
|
(1,258
|
)
|
|
(798
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
(125
|
)
|
|
393
|
|
||
Cash and cash equivalents at beginning of year
|
168
|
|
|
899
|
|
||
Cash and cash equivalents at end of period
|
$
|
43
|
|
|
$
|
1,292
|
|
_____________
|
|
|
|
||||
(1) Increases to property, plant, and equipment
|
$
|
(418
|
)
|
|
$
|
(934
|
)
|
Changes in related accounts payable and accrued liabilities
|
(4
|
)
|
|
(23
|
)
|
||
Capital expenditures
|
$
|
(422
|
)
|
|
$
|
(957
|
)
|
|
(Millions)
|
||
Current assets, including $13 million cash acquired
|
$
|
52
|
|
Property, plant, and equipment
|
1,493
|
|
|
Other intangible assets
|
389
|
|
|
Total identifiable assets acquired
|
1,934
|
|
|
|
|
||
Current liabilities
|
4
|
|
|
Total liabilities assumed
|
4
|
|
|
|
|
||
Net identifiable assets acquired
|
1,930
|
|
|
|
|
||
Goodwill
|
19
|
|
|
Net assets acquired
|
$
|
1,949
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Millions)
|
||||||
Revenues
|
$
|
2,086
|
|
|
$
|
2,121
|
|
|
|
|
|
||||
Net income (loss) attributable to The Williams Companies, Inc.
|
$
|
273
|
|
|
$
|
155
|
|
|
Northeast
Midstream
|
|
Atlantic-
Gulf Midstream
|
|
West Midstream
|
|
Transco
|
|
Northwest Pipeline
|
|
Other
|
|
Intercompany Eliminations
|
|
Total
|
||||||||||||||||
|
(Millions)
|
||||||||||||||||||||||||||||||
Three Months Ended March 31, 2019
|
|
|
|||||||||||||||||||||||||||||
Revenues from contracts with customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Service revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-regulated gathering, processing, transportation, and storage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Monetary consideration
|
$
|
239
|
|
|
$
|
128
|
|
|
$
|
344
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(18
|
)
|
|
$
|
693
|
|
Commodity consideration
|
5
|
|
|
13
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
||||||||
Regulated interstate natural gas transportation and storage
|
—
|
|
|
—
|
|
|
—
|
|
|
570
|
|
|
114
|
|
|
—
|
|
|
—
|
|
|
684
|
|
||||||||
Other
|
32
|
|
|
4
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
43
|
|
||||||||
Total service revenues
|
276
|
|
|
145
|
|
|
401
|
|
|
570
|
|
|
114
|
|
|
—
|
|
|
(22
|
)
|
|
1,484
|
|
||||||||
Product Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
NGL and natural gas product sales
|
47
|
|
|
58
|
|
|
479
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
(58
|
)
|
|
550
|
|
||||||||
Total revenues from contracts with customers
|
323
|
|
|
203
|
|
|
880
|
|
|
594
|
|
|
114
|
|
|
—
|
|
|
(80
|
)
|
|
2,034
|
|
||||||||
Other revenues (1)
|
5
|
|
|
4
|
|
|
4
|
|
|
3
|
|
|
—
|
|
|
7
|
|
|
(3
|
)
|
|
20
|
|
||||||||
Total revenues
|
$
|
328
|
|
|
$
|
207
|
|
|
$
|
884
|
|
|
$
|
597
|
|
|
$
|
114
|
|
|
$
|
7
|
|
|
$
|
(83
|
)
|
|
$
|
2,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Three Months Ended March 31, 2018
|
|||||||||||||||||||||||||||||||
Revenues from contracts with customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Service revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-regulated gathering, processing, transportation, and storage:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Monetary consideration
|
$
|
202
|
|
|
$
|
137
|
|
|
$
|
408
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(18
|
)
|
|
$
|
729
|
|
Commodity consideration
|
4
|
|
|
15
|
|
|
82
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101
|
|
||||||||
Regulated interstate natural gas transportation and storage
|
—
|
|
|
—
|
|
|
—
|
|
|
461
|
|
|
112
|
|
|
—
|
|
|
(1
|
)
|
|
572
|
|
||||||||
Other
|
21
|
|
|
6
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
35
|
|
||||||||
Total service revenues
|
227
|
|
|
158
|
|
|
501
|
|
|
461
|
|
|
112
|
|
|
—
|
|
|
(22
|
)
|
|
1,437
|
|
||||||||
Product Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
NGL and natural gas
|
98
|
|
|
68
|
|
|
521
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
(85
|
)
|
|
627
|
|
||||||||
Other
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||||||
Total product sales
|
98
|
|
|
68
|
|
|
525
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
(85
|
)
|
|
631
|
|
||||||||
Total revenues from contracts with customers
|
325
|
|
|
226
|
|
|
1,026
|
|
|
486
|
|
|
112
|
|
|
—
|
|
|
(107
|
)
|
|
2,068
|
|
||||||||
Other revenues (1)
|
5
|
|
|
2
|
|
|
5
|
|
|
3
|
|
|
—
|
|
|
8
|
|
|
(3
|
)
|
|
20
|
|
||||||||
Total revenues
|
$
|
330
|
|
|
$
|
228
|
|
|
$
|
1,031
|
|
|
$
|
489
|
|
|
$
|
112
|
|
|
$
|
8
|
|
|
$
|
(110
|
)
|
|
$
|
2,088
|
|
(1)
|
Service revenues
in our Consolidated Statement of Income include leasing revenues associated with our headquarters building and management fees that we receive for certain services we provide to operated equity-method investments. The leasing revenues and the management fees do not constitute revenue from contracts with
|
|
Year-to-Date March 31, 2019
|
||
|
(Millions)
|
||
Balance at beginning of period
|
$
|
4
|
|
Revenue recognized in excess of amounts invoiced
|
19
|
|
|
Minimum volume commitments invoiced
|
(1
|
)
|
|
Balance at end of period
|
$
|
22
|
|
|
Year-to-Date March 31, 2019
|
||
|
(Millions)
|
||
Balance at beginning of period
|
$
|
1,397
|
|
Payments received and deferred
|
33
|
|
|
Noncash interest expense for significant financing component
|
4
|
|
|
Recognized in revenue
|
(99
|
)
|
|
Balance at end of period
|
$
|
1,335
|
|
|
(Millions)
|
||
2019 (remainder)
|
$
|
2,214
|
|
2020
|
2,831
|
|
|
2021
|
2,704
|
|
|
2022
|
2,408
|
|
|
2023
|
2,149
|
|
|
Thereafter
|
18,161
|
|
|
Total
|
$
|
30,467
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(Millions)
|
||||||
Accounts receivable related to revenues from contracts with customers
|
$
|
794
|
|
|
$
|
858
|
|
Other accounts receivable
|
135
|
|
|
134
|
|
||
Total reflected in
Trade accounts and other receivables
|
$
|
929
|
|
|
$
|
992
|
|
|
March 31,
2019 |
|
December 31,
2018 |
|
Classification
|
||||
|
(Millions)
|
|
|
||||||
Assets (liabilities):
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
26
|
|
|
$
|
33
|
|
|
Cash and cash equivalents
|
Trade accounts and other receivables
–
net
|
50
|
|
|
62
|
|
|
Trade accounts and other receivables
|
||
Other current assets
|
1
|
|
|
2
|
|
|
Other current assets and deferred charges
|
||
Property, plant, and equipment
–
net
|
2,333
|
|
|
2,363
|
|
|
Property, plant, and equipment – net
|
||
Intangible assets
–
net
|
1,166
|
|
|
1,177
|
|
|
Intangible assets – net of accumulated amortization
|
||
Regulatory assets, deferred charges, and other noncurrent assets
|
1
|
|
|
—
|
|
|
Regulatory assets, deferred charges, and other
|
||
Accounts payable
|
(15
|
)
|
|
(15
|
)
|
|
Accounts payable
|
||
Accrued liabilities including current asset retirement obligations
|
(115
|
)
|
|
(115
|
)
|
|
Accrued liabilities
|
||
Noncurrent asset retirement obligations
|
(107
|
)
|
|
(105
|
)
|
|
Regulatory liabilities, deferred income, and other
|
||
Regulatory liabilities, deferred income, and other noncurrent liabilities
|
(137
|
)
|
|
(159
|
)
|
|
Regulatory liabilities, deferred income, and other
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Millions)
|
||||||
Other (income) expense – net
within
Costs and expenses
|
|
|
|
||||
West
|
|
|
|
||||
Impairment of certain assets
|
$
|
12
|
|
|
$
|
—
|
|
|
|
|
|
||||
Other
|
|
|
|
||||
Change in regulatory asset associated with Transco’s estimated deferred state income tax rate
|
12
|
|
|
—
|
|
||
|
|
|
|
||||
Other income (expense) – net
below
Operating income (loss)
|
|
|
|
||||
Atlantic-Gulf
|
|
|
|
||||
Allowance for equity funds used during construction
|
7
|
|
|
20
|
|
||
|
|
|
|
||||
Other
|
|
|
|
||||
Net loss associated with early retirement of debt
|
—
|
|
|
(7
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Millions)
|
||||||
Current:
|
|
|
|
||||
Federal
|
$
|
(6
|
)
|
|
$
|
(19
|
)
|
State
|
—
|
|
|
1
|
|
||
|
(6
|
)
|
|
(18
|
)
|
||
Deferred:
|
|
|
|
||||
Federal
|
61
|
|
|
64
|
|
||
State
|
14
|
|
|
9
|
|
||
|
75
|
|
|
73
|
|
||
Provision (benefit) for income taxes
|
$
|
69
|
|
|
$
|
55
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in millions, except per-share
amounts; shares in thousands)
|
||||||
Net income (loss) available to common stockholders
|
$
|
194
|
|
|
$
|
152
|
|
Basic weighted-average shares
|
1,211,489
|
|
|
827,509
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Nonvested restricted stock units
|
1,845
|
|
|
2,095
|
|
||
Stock options
|
258
|
|
|
593
|
|
||
Diluted weighted-average shares
|
1,213,592
|
|
|
830,197
|
|
||
Earnings (loss) per common share:
|
|
|
|
||||
Basic
|
$
|
.16
|
|
|
$
|
.18
|
|
Diluted
|
$
|
.16
|
|
|
$
|
.18
|
|
|
Pension Benefits
|
||||||
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Millions)
|
||||||
Components of net periodic benefit cost (credit):
|
|
|
|
||||
Service cost
|
$
|
11
|
|
|
$
|
14
|
|
Interest cost
|
12
|
|
|
11
|
|
||
Expected return on plan assets
|
(15
|
)
|
|
(16
|
)
|
||
Amortization of net actuarial loss
|
4
|
|
|
6
|
|
||
Net periodic benefit cost (credit)
|
$
|
12
|
|
|
$
|
15
|
|
|
Other Postretirement Benefits
|
||||||
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Millions)
|
||||||
Components of net periodic benefit cost (credit):
|
|
|
|
||||
Interest cost
|
$
|
2
|
|
|
$
|
2
|
|
Expected return on plan assets
|
(2
|
)
|
|
(3
|
)
|
||
Amortization of prior service credit
|
—
|
|
|
(1
|
)
|
||
Reclassification to regulatory liability
|
—
|
|
|
1
|
|
||
Net periodic benefit cost (credit)
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
Three Months Ended
March 31, 2019 |
||
|
(Millions)
|
||
Lease Cost:
|
|
||
Operating lease cost
|
$
|
10
|
|
Short-term lease cost
|
—
|
|
|
Variable lease cost
|
6
|
|
|
Sublease income
|
(1
|
)
|
|
Total lease cost
|
$
|
15
|
|
Cash paid for amounts included in the measurement of operating lease liabilities
|
$
|
9
|
|
|
March 31, 2019
|
||
|
(Millions)
|
||
Other Information:
|
|
||
Right-of-use asset (included in
Regulatory assets, deferred charges, and other
in our Consolidated Balance Sheet)
|
$
|
223
|
|
Operating lease liabilities:
|
|
||
Current (included in
Accrued liabilities
in our Consolidated Balance Sheet)
|
$
|
25
|
|
Noncurrent (included in
Regulatory liabilities, deferred income, and other
in our Consolidated Balance Sheet)
|
$
|
198
|
|
Weighted-average remaining lease term
–
operating leases (years)
|
12
|
||
Weighted-average discount rate
–
operating leases
|
4.62%
|
|
March 31, 2019
|
||||||
|
Stated Capacity
|
|
Outstanding
|
||||
|
(Millions)
|
||||||
|
|
|
|
||||
Long-term credit facility (1)
|
$
|
4,500
|
|
|
$
|
—
|
|
Letters of credit under certain bilateral bank agreements
|
|
|
14
|
|
|
(1)
|
In managing our available liquidity, we do not expect a maximum outstanding amount in excess of the capacity of our credit facility inclusive of any outstanding amounts under our commercial paper program.
|
|
Cash
Flow
Hedges
|
|
Foreign
Currency
Translation
|
|
Pension and
Other Postretirement
Benefits
|
|
Total
|
||||||||
|
(Millions)
|
||||||||||||||
Balance at December 31, 2018
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
(267
|
)
|
|
$
|
(270
|
)
|
Amounts reclassified from
accumulated
other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
||||
Balance at March 31, 2019
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
(264
|
)
|
|
$
|
(267
|
)
|
Component
|
|
Reclassifications
|
|
Classification
|
||
|
|
(Millions)
|
|
|
||
Pension and other postretirement benefits:
|
|
|
|
|
||
Amortization of actuarial (gain) loss
included in
net periodic benefit cost (credit)
|
|
$
|
4
|
|
|
Note 8 – Employee Benefit Plans
|
Income tax benefit
|
|
(1
|
)
|
|
Provision (benefit) for income taxes
|
|
Reclassifications during the period
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements Using
|
||||||||||||||
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Quoted
Prices In
Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||
|
|
(Millions)
|
||||||||||||||||||
Assets (liabilities) at March 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Measured on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
ARO Trust investments
|
|
$
|
173
|
|
|
$
|
173
|
|
|
$
|
173
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Energy derivatives assets not designated as hedging instruments
|
|
2
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|||||
Energy derivatives liabilities not designated as hedging instruments
|
|
(9
|
)
|
|
(9
|
)
|
|
(6
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Additional disclosures:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt, including current portion
|
|
(22,264
|
)
|
|
(24,449
|
)
|
|
—
|
|
|
(24,449
|
)
|
|
—
|
|
|||||
Guarantees
|
|
(42
|
)
|
|
(29
|
)
|
|
—
|
|
|
(13
|
)
|
|
(16
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets (liabilities) at December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Measured on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
ARO Trust investments
|
|
$
|
150
|
|
|
$
|
150
|
|
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Energy derivatives assets not designated as hedging instruments
|
|
3
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|||||
Energy derivatives liabilities not designated as hedging instruments
|
|
(7
|
)
|
|
(7
|
)
|
|
(4
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Additional disclosures:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt, including current portion
|
|
(22,414
|
)
|
|
(23,330
|
)
|
|
—
|
|
|
(23,330
|
)
|
|
—
|
|
|||||
Guarantees
|
|
(43
|
)
|
|
(30
|
)
|
|
—
|
|
|
(14
|
)
|
|
(16
|
)
|
|
|
|
|
|
|
|
|
|
Impairments
|
||||||
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
Classification
|
|
Segment
|
|
Date of Measurement
|
|
Fair Value
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
|
|
(Millions)
|
||||||||
Impairment of assets (1)
|
Property, plant, and equipment – net
|
|
West
|
|
March 31, 2019
|
|
$
|
—
|
|
|
$
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity-method investments (2)
|
Investments
|
|
Northeast G&P
|
|
March 17, 2019
|
|
$
|
1,209
|
|
|
$
|
74
|
|
|
|
(1)
|
Reflects impairment of assets that are no longer in use for which the fair value was determined to be lower than the carrying value. This impairment is reported in
Other (income) expense – net
within
Costs and expenses
in the
Consolidated Statement of Income
.
|
(2)
|
Relates to Northeast G&P’s equity-method investment in UEOM. The estimated fair value was determined by a market approach based on the transaction price for the purchase of the remaining interest in UEOM as finalized just prior to the signing and closing of the acquisition in March 2019 (see
Note 2 – Acquisitions
). This impairment is reported in
Impairment of equity-method investments
in the
Consolidated Statement of Income
.
|
•
|
Former agricultural fertilizer and chemical operations and former retail petroleum and refining operations;
|
•
|
Former petroleum products and natural gas pipelines;
|
•
|
Former petroleum refining facilities;
|
•
|
Former exploration and production and mining operations;
|
•
|
Former electricity and natural gas marketing and trading operations.
|
•
|
This measure is further adjusted to include our proportionate share (based on ownership interest) of
Modified EBITDA
from our equity-method investments calculated consistently with the definition described above.
|
|
Northeast G&P
|
|
Atlantic-Gulf
|
|
West
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||||
|
(Millions)
|
||||||||||||||||||||||
Three Months Ended March 31, 2019
|
|||||||||||||||||||||||
Segment revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External
|
$
|
266
|
|
|
$
|
697
|
|
|
$
|
473
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
1,440
|
|
Internal
|
10
|
|
|
12
|
|
|
—
|
|
|
3
|
|
|
(25
|
)
|
|
—
|
|
||||||
Total service revenues
|
276
|
|
|
709
|
|
|
473
|
|
|
7
|
|
|
(25
|
)
|
|
1,440
|
|
||||||
Total service revenues – commodity consideration
|
5
|
|
|
13
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
64
|
|
||||||
Product sales
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External
|
36
|
|
|
52
|
|
|
462
|
|
|
—
|
|
|
—
|
|
|
550
|
|
||||||
Internal
|
11
|
|
|
30
|
|
|
17
|
|
|
—
|
|
|
(58
|
)
|
|
—
|
|
||||||
Total product sales
|
47
|
|
|
82
|
|
|
479
|
|
|
—
|
|
|
(58
|
)
|
|
550
|
|
||||||
Total revenues
|
$
|
328
|
|
|
$
|
804
|
|
|
$
|
998
|
|
|
$
|
7
|
|
|
$
|
(83
|
)
|
|
$
|
2,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three Months Ended March 31, 2018
|
|||||||||||||||||||||||
Segment revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External
|
$
|
219
|
|
|
$
|
596
|
|
|
$
|
531
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
1,351
|
|
Internal
|
9
|
|
|
13
|
|
|
—
|
|
|
3
|
|
|
(25
|
)
|
|
—
|
|
||||||
Total service revenues
|
228
|
|
|
609
|
|
|
531
|
|
|
8
|
|
|
(25
|
)
|
|
1,351
|
|
||||||
Total service revenues – commodity consideration
|
4
|
|
|
15
|
|
|
82
|
|
|
—
|
|
|
—
|
|
|
101
|
|
||||||
Product sales
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External
|
89
|
|
|
35
|
|
|
512
|
|
|
—
|
|
|
—
|
|
|
636
|
|
||||||
Internal
|
9
|
|
|
58
|
|
|
18
|
|
|
—
|
|
|
(85
|
)
|
|
—
|
|
||||||
Total product sales
|
98
|
|
|
93
|
|
|
530
|
|
|
—
|
|
|
(85
|
)
|
|
636
|
|
||||||
Total revenues
|
$
|
330
|
|
|
$
|
717
|
|
|
$
|
1,143
|
|
|
$
|
8
|
|
|
$
|
(110
|
)
|
|
$
|
2,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total assets
|
$
|
15,301
|
|
|
$
|
16,441
|
|
|
$
|
13,834
|
|
|
$
|
782
|
|
|
$
|
(388
|
)
|
|
$
|
45,970
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total assets
|
$
|
14,526
|
|
|
$
|
16,346
|
|
|
$
|
13,948
|
|
|
$
|
849
|
|
|
$
|
(367
|
)
|
|
$
|
45,302
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Millions)
|
||||||
Modified EBITDA by segment:
|
|
|
|
||||
Northeast G&P
|
$
|
299
|
|
|
$
|
250
|
|
Atlantic-Gulf
|
560
|
|
|
451
|
|
||
West
|
332
|
|
|
413
|
|
||
Other
|
(4
|
)
|
|
6
|
|
||
|
1,187
|
|
|
1,120
|
|
||
Accretion expense associated with asset retirement obligations for nonregulated operations
|
(9
|
)
|
|
(8
|
)
|
||
Depreciation and amortization expenses
|
(416
|
)
|
|
(431
|
)
|
||
Equity earnings (losses)
|
80
|
|
|
82
|
|
||
Impairment of equity-method investments
|
(74
|
)
|
|
—
|
|
||
Other investing income (loss) – net
|
1
|
|
|
4
|
|
||
Proportional Modified EBITDA of equity-method investments
|
(190
|
)
|
|
(169
|
)
|
||
Interest expense
|
(296
|
)
|
|
(273
|
)
|
||
(Provision) benefit for income taxes
|
(69
|
)
|
|
(55
|
)
|
||
Net income (loss)
|
$
|
214
|
|
|
$
|
270
|
|
•
|
Northeast G&P is comprised of our midstream gathering, processing and fractionation businesses in the Marcellus Shale region primarily in Pennsylvania, New York, and West Virginia and the Utica Shale region of eastern Ohio, including a
66 percent
interest in Cardinal Gas Services, L.L.C. (Cardinal) (a consolidated entity), as well as a
69 percent
equity-method investment in Laurel Mountain Midstream, LLC, a
58 percent
equity-method investment in Caiman Energy II, LLC, and Appalachia Midstream Services, LLC, which owns equity-method investments with an approximate average
66 percent
interest in multiple gas gathering systems in the Marcellus Shale (Appalachia Midstream Investments). Northeast G&P also includes Utica East Ohio Midstream, LLC (UEOM), which is now a consolidated entity after the remaining ownership interest was acquired in March 2019 (see
Note 2 – Acquisitions
of Notes to Consolidated Financial Statements).
|
•
|
Atlantic-Gulf is comprised of our interstate natural gas pipeline, Transcontinental Gas Pipe Line Company, LLC (Transco), and significant natural gas gathering and processing and crude oil production handling and transportation assets in the Gulf Coast region, including a
51 percent
interest in Gulfstar One LLC (Gulfstar One) (a consolidated entity), which is a proprietary floating production system, as well as a
50 percent
equity-method investment in Gulfstream Natural Gas System, L.L.C., a
60 percent
equity-method investment in Discovery Producer Services LLC (Discovery), and a
41 percent
interest in Constitution Pipeline Company, LLC (Constitution) (a consolidated entity), which is developing a pipeline project (see
Note 4 – Variable Interest Entities
of Notes to Consolidated Financial Statements).
|
•
|
West is comprised of our interstate natural gas pipeline, Northwest Pipeline LLC (Northwest Pipeline), and our gathering, processing, and treating operations in Colorado, Wyoming, the Barnett Shale region of north-central Texas, the Eagle Ford Shale region of south Texas, the Permian Shale region of west Texas, the
|
•
|
Opposition to, and legal regulations affecting, our infrastructure projects, including the risk of delay or denial in permits and approvals needed for our projects;
|
•
|
Unexpected significant increases in capital expenditures or delays in capital project execution;
|
•
|
Counterparty credit and performance risk;
|
•
|
Unexpected changes in customer drilling and production activities, which could negatively impact gathering and processing volumes;
|
•
|
Lower than anticipated demand for natural gas and natural gas products which could result in lower than expected volumes, energy commodity prices, and margins;
|
•
|
General economic, financial markets, or further industry downturn, including increased interest rates;
|
•
|
Physical damages to facilities, including damage to offshore facilities by named windstorms;
|
•
|
Other risks set forth under Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC on February 21, 2019.
|
|
Three Months Ended
March 31, |
|
|
|
|
||||||||
|
2019
|
|
2018
|
|
$ Change*
|
|
% Change*
|
||||||
|
(Millions)
|
|
|
|
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||
Service revenues
|
$
|
1,440
|
|
|
$
|
1,351
|
|
|
+89
|
|
|
+7
|
%
|
Service revenues – commodity consideration
|
64
|
|
|
101
|
|
|
-37
|
|
|
-37
|
%
|
||
Product sales
|
550
|
|
|
636
|
|
|
-86
|
|
|
-14
|
%
|
||
Total revenues
|
2,054
|
|
|
2,088
|
|
|
|
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||
Product costs
|
525
|
|
|
613
|
|
|
+88
|
|
|
+14
|
%
|
||
Processing commodity expenses
|
40
|
|
|
35
|
|
|
-5
|
|
|
-14
|
%
|
||
Operating and maintenance expenses
|
340
|
|
|
357
|
|
|
+17
|
|
|
+5
|
%
|
||
Depreciation and amortization expenses
|
416
|
|
|
431
|
|
|
+15
|
|
|
+3
|
%
|
||
Selling, general, and administrative expenses
|
128
|
|
|
132
|
|
|
+4
|
|
|
+3
|
%
|
||
Other (income) expense – net
|
44
|
|
|
29
|
|
|
-15
|
|
|
-52
|
%
|
||
Total costs and expenses
|
1,493
|
|
|
1,597
|
|
|
|
|
|
||||
Operating income (loss)
|
561
|
|
|
491
|
|
|
|
|
|
||||
Equity earnings (losses)
|
80
|
|
|
82
|
|
|
-2
|
|
|
-2
|
%
|
||
Impairment of equity-method investments
|
(74
|
)
|
|
—
|
|
|
-74
|
|
|
NM
|
|
||
Other investing income (loss) – net
|
1
|
|
|
4
|
|
|
-3
|
|
|
-75
|
%
|
||
Interest expense
|
(296
|
)
|
|
(273
|
)
|
|
-23
|
|
|
-8
|
%
|
||
Other income (expense) – net
|
11
|
|
|
21
|
|
|
-10
|
|
|
-48
|
%
|
||
Income (loss) before income taxes
|
283
|
|
|
325
|
|
|
|
|
|
||||
Provision (benefit) for income taxes
|
69
|
|
|
55
|
|
|
-14
|
|
|
-25
|
%
|
||
Net income (loss)
|
214
|
|
|
270
|
|
|
|
|
|
||||
Less: Net income (loss) attributable to noncontrolling interests
|
19
|
|
|
118
|
|
|
+99
|
|
|
+84
|
%
|
||
Net income (loss) attributable to The Williams Companies, Inc.
|
$
|
195
|
|
|
$
|
152
|
|
|
|
|
|
|
*
|
+ = Favorable change; - = Unfavorable change; NM = A percentage calculation is not meaningful due to a change in signs, a zero-value denominator, or a percentage change greater than 200.
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Millions)
|
||||||
Service revenues
|
$
|
276
|
|
|
$
|
228
|
|
Service revenues
–
commodity consideration
|
5
|
|
|
4
|
|
||
Product sales
|
47
|
|
|
98
|
|
||
Segment revenues
|
328
|
|
|
330
|
|
||
|
|
|
|
||||
Product costs
|
(47
|
)
|
|
(99
|
)
|
||
Processing commodity expenses
|
(3
|
)
|
|
(2
|
)
|
||
Other segment costs and expenses
|
(101
|
)
|
|
(87
|
)
|
||
Proportional Modified EBITDA of equity-method investments
|
122
|
|
|
108
|
|
||
Northeast G&P Modified EBITDA
|
$
|
299
|
|
|
$
|
250
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Millions)
|
||||||
Service revenues
|
$
|
709
|
|
|
$
|
609
|
|
Service revenues
–
commodity consideration
|
13
|
|
|
15
|
|
||
Product sales
|
82
|
|
|
93
|
|
||
Segment revenues
|
804
|
|
|
717
|
|
||
|
|
|
|
||||
Product costs
|
(82
|
)
|
|
(92
|
)
|
||
Processing commodity expenses
|
(5
|
)
|
|
(5
|
)
|
||
Other segment costs and expenses
|
(199
|
)
|
|
(212
|
)
|
||
Proportional Modified EBITDA of equity-method investments
|
42
|
|
|
43
|
|
||
Atlantic-Gulf Modified EBITDA
|
$
|
560
|
|
|
$
|
451
|
|
|
|
|
|
||||
NGL margin
|
$
|
7
|
|
|
$
|
10
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Millions)
|
||||||
Service revenues
|
$
|
473
|
|
|
$
|
531
|
|
Service revenues
–
commodity consideration
|
46
|
|
|
82
|
|
||
Product sales
|
479
|
|
|
530
|
|
||
Segment revenues
|
998
|
|
|
1,143
|
|
||
|
|
|
|
||||
Product costs
|
(475
|
)
|
|
(526
|
)
|
||
Processing commodity expenses
|
(31
|
)
|
|
(30
|
)
|
||
Other segment costs and expenses
|
(186
|
)
|
|
(192
|
)
|
||
Proportional Modified EBITDA of equity-method investments
|
26
|
|
|
18
|
|
||
West Modified EBITDA
|
$
|
332
|
|
|
$
|
413
|
|
|
|
|
|
||||
NGL margin
|
$
|
14
|
|
|
$
|
52
|
|
•
|
A $65 million decrease associated with asset divestitures and deconsolidations during 2018, including our former Four Corners area assets, our Jackalope assets, and certain Delaware basin assets that were contributed to our Brazos Permian II equity-method investment;
|
•
|
A $15 million decrease driven by lower gathering volumes due to more severe weather conditions in 2019 primarily in Wyoming;
|
•
|
An $11 million increase associated with higher other fee revenue, primarily in the Conway area mainly associated with higher fractionation volumes and new contracts with higher prices;
|
•
|
A $7 million increase associated with higher gathering rates primarily in the Barnett Shale region.
|
•
|
$23 million of the decrease is due to lower volumes, consisting of $14 million associated with the divestiture of our former Four Corners area assets and $13 million associated with 19 percent lower non-ethane sales volumes due to well freeze-offs and temporary shut-ins related to more severe weather conditions in 2019 and natural decline, partially offset by a $4 million decrease in natural gas purchases associated with the production of equity NGLs;
|
•
|
$15 million of the decrease is due to unfavorable commodity prices. Natural gas costs associated with the production of equity NGLs increased $8 million due to 34 percent higher average per-unit natural gas prices, and sales revenues decreased $7 million primarily due to 17 percent lower average per-unit non-ethane prices.
|
Sources:
|
|
|
Cash and cash equivalents on hand
|
|
Cash generated from operations
|
|
Distributions from our equity-method investees
|
|
Utilization of our credit facility and/or commercial paper program
|
|
Cash proceeds from issuance of debt and/or equity securities
|
|
Proceeds from asset monetizations
|
|
Contributions from noncontrolling interests
|
|
|
Uses:
|
|
|
Working capital requirements
|
|
Capital and investment expenditures
|
|
Quarterly dividends to our shareholders
|
|
Debt service payments, including payments of long-term debt
|
|
Distributions to noncontrolling interests
|
Available Liquidity
|
March 31, 2019
|
||
|
(Millions)
|
||
Cash and cash equivalents
|
$
|
43
|
|
Capacity available under our $4.5 billion credit facility, less amounts outstanding under our $4 billion commercial paper program (1)
|
3,484
|
|
|
|
$
|
3,527
|
|
|
(1)
|
In managing our available liquidity, we do not expect a maximum outstanding amount in excess of the capacity of our credit facility inclusive of any outstanding amounts under our commercial paper program. We had $1.016 billion of
Commercial paper
, exclusive of unamortized discount, outstanding as of
March 31, 2019
. Through
March 31, 2019
, the highest amount outstanding under our commercial paper program and credit facility during 2019 was $1.226 billion. At
March 31, 2019
, we were in compliance with the financial covenants associated with our credit facility. Borrowing capacity available under our credit facility as of April 30, 2019, was $4.163 billion.
|
Rating Agency
|
|
Outlook
|
|
Senior Unsecured
Debt Rating
|
|
Corporate
Credit Rating
|
S&P Global Ratings
|
|
Negative
|
|
BBB
|
|
BBB
|
Moody’s Investors Service
|
|
Stable
|
|
Baa3
|
|
N/A
|
Fitch Ratings
|
|
Positive
|
|
BBB-
|
|
N/A
|
|
Cash Flow
|
|
Three Months Ended
March 31, |
||||||
|
Category
|
|
2019
|
|
2018
|
||||
|
|
|
(Millions)
|
||||||
Sources of cash and cash equivalents:
|
|
|
|
|
|
||||
Operating activities – net
|
Operating
|
|
$
|
775
|
|
|
$
|
694
|
|
Proceeds from commercial paper – net
|
Financing
|
|
1,014
|
|
|
—
|
|
||
Proceeds from credit-facility borrowings
|
Financing
|
|
700
|
|
|
240
|
|
||
Contributions in aid of construction
|
Investing
|
|
10
|
|
|
190
|
|
||
Proceeds from long-term debt
|
Financing
|
|
8
|
|
|
1,808
|
|
||
|
|
|
|
|
|
||||
Uses of cash and cash equivalents:
|
|
|
|
|
|
||||
Payments on credit-facility borrowings
|
Financing
|
|
(860
|
)
|
|
(310
|
)
|
||
Purchase of business, net of cash acquired (see Note 2)
|
Investing
|
|
(727
|
)
|
|
—
|
|
||
Common dividends paid
|
Financing
|
|
(460
|
)
|
|
(281
|
)
|
||
Capital expenditures
|
Investing
|
|
(422
|
)
|
|
(957
|
)
|
||
Purchases of and contributions to equity-method investments
|
Investing
|
|
(99
|
)
|
|
(21
|
)
|
||
Dividends and distributions paid to noncontrolling interests
|
Financing
|
|
(41
|
)
|
|
(165
|
)
|
||
Payments of long-term debt
|
Financing
|
|
(4
|
)
|
|
(750
|
)
|
||
|
|
|
|
|
|
||||
Other sources / (uses) – net
|
Financing and Investing
|
|
(19
|
)
|
|
(55
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
|
|
$
|
(125
|
)
|
|
$
|
393
|
|
Exhibit
No.
|
|
|
|
Description
|
|
|
|
|
|
2.1+
|
|
—
|
|
|
2.2
|
|
—
|
|
|
2.3+
|
|
—
|
|
|
3.1
|
|
—
|
|
|
3.2
|
|
—
|
|
|
3.3
|
|
—
|
|
|
3.4
|
|
—
|
|
|
10.1§*
|
|
—
|
|
|
10.2§*
|
|
—
|
|
|
10.3§*
|
|
—
|
|
|
10.4§*
|
|
—
|
|
|
31.1*
|
|
—
|
|
|
31.2*
|
|
—
|
|
|
32**
|
|
—
|
|
|
101.INS*
|
|
—
|
|
XBRL Instance Document.
|
101.SCH*
|
|
—
|
|
XBRL Taxonomy Extension Schema.
|
101.CAL*
|
|
—
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
Exhibit
No.
|
|
|
|
Description
|
|
|
|
|
|
101.DEF*
|
|
—
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
101.LAB*
|
|
—
|
|
XBRL Taxonomy Extension Label Linkbase.
|
101.PRE*
|
|
—
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
|
+
|
Pursuant to item 601(b)(2) of Regulation S-K, the registrant agrees to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon request.
|
|
T
HE
W
ILLIAMS
C
OMPANIES
, I
NC
.
|
|
(Registrant)
|
|
|
|
/s/ T
ED
T. T
IMMERMANS
|
|
Ted T. Timmermans
|
|
Vice President, Controller and Chief Accounting Officer (Duly Authorized Officer and Principal Accounting Officer)
|
(a)
|
(i) The payment date for all Shares in which a Participant becomes vested pursuant to Subparagraph 5(g) above shall be no more than thirty (30) days after such Participant’s Separation from Service. If such 30-day period spans two calendar years, then payment will be made in the later calendar year. However, if the Participant was a “key employee” within the meaning of Section 409A(a)(B)(i) of the Code immediately prior to his or her Separation from Service, payment shall not be made sooner than the earlier to occur of the following: (i) six (6) months following the date of such Separation from Service; and (ii) the Participant’s death.
|
(a)
|
(i) The payment date for all Shares in which a Participant becomes vested pursuant to Subparagraph 5(e) above shall be no more than thirty (30) days after such Participant’s Separation from Service. If such 30-day period spans two calendar years, then payment will be made in the later calendar year. However, if the Participant was a “key employee” within the meaning of Section 409A(a)(B)(i) of the Code immediately prior to his or her Separation from Service, payment shall not be made sooner than the earlier to occur of the following: (i) six (6) months following the date of such Separation from Service; and (ii) the Participant’s death.
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Alan S. Armstrong
|
|
Alan S. Armstrong
|
|
President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ John D. Chandler
|
|
John D. Chandler
|
|
Senior Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|
/s/ Alan S. Armstrong
|
Alan S. Armstrong
|
President and Chief Executive Officer
|
May 2, 2019
|
|
/s/ John D. Chandler
|
John D. Chandler
|
Senior Vice President and Chief Financial Officer
|
May 2, 2019
|