Williams(WMB) - 2025 Q2 - Quarterly Results

Financial Performance Overview This section provides a comprehensive overview of Williams' strong financial results and key operational achievements for the second quarter and first half of 2025 Second-Quarter 2025 Highlights Williams reported strong Q2 2025 results with an 8% Adjusted EBITDA increase to $1.808 billion, raising full-year guidance and achieving key operational milestones Q2 2025 Key Financial Metrics vs. Q2 2024 | Metric | Q2 2025 | Change vs. Q2 2024 | | :--- | :--- | :--- | | GAAP Net Income ($ million) | $546 | +$145 | | Adjusted Net Income ($ million) | $566 | +9% | | Adjusted EPS ($) | $0.46 | +7% | | Adjusted EBITDA ($ billion) | $1.808 | +8% | | Cash Flow from Operations (CFFO) ($ billion) | $1.45 | +13% | | Available Funds from Operations (AFFO) ($ billion) | $1.317 | +5% | | Dividend Coverage Ratio (x) | 2.16x | Unchanged | - The company raised its full-year 2025 Adjusted EBITDA guidance midpoint by $50 million to $7.75 billion[5][6] - Key operational milestones include placing Transco's Texas to Louisiana Energy Pathway and Southeast Energy Connector projects into service, acquiring Saber Midstream, breaking ground on the $1.6 billion Socrates Power Innovation project, and placing deepwater Ballymore and Shenandoah expansions in-service[5] CEO Perspective CEO Chad Zamarin attributed strong performance to Transco expansions, new Gulf volumes, and higher gathering and processing volumes, citing recent acquisitions and project completions as drivers for increased full-year guidance - Adjusted EBITDA growth of 8% was primarily driven by Transco expansions, new volumes in the Gulf, and higher volumes in the Northeast and West gathering and processing segments[4] - The company raised its 2025 Adjusted EBITDA guidance midpoint by another $50 million to $7.75 billion, marking a total increase of $350 million from the original 2025 guidance[6] - Six projects were recently completed, including the Texas to Louisiana Energy Pathway, Louisiana Energy Gateway, and the Shenandoah deepwater project[7] Consolidated Financial Results The company demonstrated broad financial strength in Q2 and H1 2025, with GAAP Net Income rising to $546 million and Adjusted EBITDA increasing to $1.808 billion, while maintaining a stable leverage ratio Financial Summary (in millions, except per-share amounts) | Metric | 2Q 2025 | 2Q 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP Measures | | | | | | Net Income ($ million) | $546 | $401 | $1,236 | $1,032 | | Net Income Per Share ($) | $0.45 | $0.33 | $1.01 | $0.84 | | Cash Flow From Operations ($ million) | $1,450 | $1,279 | $2,883 | $2,513 | | Non-GAAP Measures | | | | | | Adjusted EBITDA ($ million) | $1,808 | $1,667 | $3,797 | $3,601 | | Adjusted Net Income ($ million) | $566 | $521 | $1,296 | $1,240 | | Adjusted EPS ($) | $0.46 | $0.43 | $1.06 | $1.01 | | AFFO ($ million) | $1,317 | $1,250 | $2,762 | $2,757 | Analysis of Financial Results This section provides a detailed analysis of Williams' GAAP and non-GAAP financial performance, highlighting key drivers of income and cash flow changes GAAP Measures Analysis GAAP net income increased by $145 million in Q2 2025 and $204 million year-to-date, driven by higher service revenues and favorable derivative changes, partially offset by increased costs - Q2 and YTD 2025 net income growth was driven by higher service revenues ($204 million and $302 million, respectively) and favorable changes in net unrealized gains/losses on commodity derivatives ($167 million and $227 million, respectively)[8] - These positive impacts were partially offset by higher depreciation expense, increased operating costs, and lower equity AFUDC from capital projects[8] - Cash flow from operations increased in Q2 and YTD 2025 primarily due to favorable changes to derivative collateral requirements and higher operating results (excluding non-cash items)[9] Non-GAAP Measures Analysis Non-GAAP Adjusted EBITDA rose by $141 million in Q2 2025 and $196 million year-to-date, driven by higher service revenues and upstream operations, leading to improved Adjusted Net Income and AFFO - Q2 2025 Adjusted EBITDA increased by $141 million YoY, driven by higher service revenues, partially offset by higher operating costs and lower equity AFUDC[10] - Q2 2025 Adjusted Net Income improved by $45 million YoY, primarily by removing the effects of net unrealized gains/losses on commodity derivatives from the GAAP results[11] - Q2 2025 AFFO increased by $67 million YoY, mainly due to higher results from operations (excluding non-cash items) and increased distributions from equity-method investees[12] Business Segment Performance This section details the financial performance of Williams' key business segments, highlighting contributions to overall Adjusted EBITDA growth Segment Performance Summary All business segments contributed positively in Q2 2025, with Transmission & Gulf of America leading growth by $91 million in Adjusted EBITDA, and Northeast G&P and West segments also showing solid gains Adjusted EBITDA by Segment (in millions) | Segment | Q2 2025 ($ million) | Q2 2024 ($ million) | Change ($ million) | YTD 2025 ($ million) | YTD 2024 ($ million) | Change ($ million) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Transmission & Gulf of America | $903 | $812 | $91 | $1,765 | $1,651 | $114 | | Northeast G&P | $501 | $479 | $22 | $1,015 | $983 | $32 | | West | $341 | $319 | $22 | $695 | $647 | $48 | | Gas & NGL Marketing Services | ($15) | ($14) | ($1) | $140 | $175 | ($35) | | Other | $78 | $71 | $7 | $182 | $145 | $37 | | Total Adjusted EBITDA | $1,808 | $1,667 | $141 | $3,797 | $3,601 | $196 | Transmission & Gulf of America The Transmission & Gulf of America segment's Adjusted EBITDA improved by $91 million in Q2 2025, driven by new Transco expansion projects and additional Gulf of Mexico volumes - Both Modified and Adjusted EBITDA improved in Q2 and YTD 2025 due to Transco expansion projects and new Gulf volumes, partially offset by lower equity AFUDC[15] Northeast G&P The Northeast G&P segment's Adjusted EBITDA increased by $22 million in Q2 2025, driven by higher gathering and processing volumes at Ohio Valley Midstream, Cardinal, and Bradford - Q2 2025 Adjusted EBITDA increased due to higher gathering and processing volumes at Ohio Valley Midstream, Cardinal, and Bradford[16] West The West segment's Adjusted EBITDA grew by $22 million in Q2 2025, driven by higher Haynesville volumes and contributions from recent acquisitions, offsetting lower Eagle Ford MVC revenues - Q2 2025 Adjusted EBITDA increased due to higher Haynesville volumes and contributions from the 2025 Rimrock and Saber acquisitions, partially offset by lower MVC revenues in the Eagle Ford[17] Gas & NGL Marketing Services The Gas & NGL Marketing Services segment's Modified EBITDA increased significantly due to a $102 million favorable change in unrealized derivative gains, though Adjusted EBITDA remained relatively flat - Q2 2025 Modified EBITDA increased due to a $102 million favorable change in unrealized gains/losses on commodity derivatives; these are excluded from Adjusted EBITDA[18] Other The 'Other' segment's year-to-date Modified EBITDA increased, reflecting improved realized results from upstream operations, including contributions from the Q4 2024 Crowheart acquisition - The increase in year-to-date 2025 Modified EBITDA reflects improved realized results from upstream operations, including contributions from the Q4 2024 Crowheart acquisition[19] 2025 Financial Guidance This section outlines Williams' updated full-year 2025 financial outlook, including revised Adjusted EBITDA guidance and capital expenditure forecasts Updated Full-Year 2025 Outlook Williams raised its full-year 2025 Adjusted EBITDA guidance midpoint by $50 million to $7.75 billion, while maintaining capital expenditure forecasts and a 3.65x leverage ratio midpoint 2025 Full-Year Guidance | Metric | Guidance Range / Midpoint | | :--- | :--- | | Adjusted EBITDA ($ billion) | $7.6B - $7.9B (Midpoint: $7.75B) | | Growth Capex ($ billion) | $2.575B - $2.875B | | Maintenance Capex ($ million) | $650M - $750M | | Leverage Ratio Midpoint (x) | 3.65x | | Annualized Dividend ($ per share) | $2.00 per share (+5.3% vs 2024) | Consolidated Financial Statements This section presents Williams' key consolidated financial statements, including the Statement of Income, Balance Sheet, and Statement of Cash Flows Consolidated Statement of Income The Consolidated Statement of Income shows total revenues increasing to $2.781 billion in Q2 2025, with net income attributable to Williams rising to $546 million and diluted EPS at $0.45 Key Income Statement Data (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total Revenues ($ million) | $2,781 | $2,336 | | Operating Income ($ million) | $945 | $696 | | Net Income Attributable to Williams ($ million) | $546 | $401 | Consolidated Balance Sheet The Consolidated Balance Sheet as of June 30, 2025, shows total assets of $56.141 billion, with long-term debt at $25.603 billion and total equity at $14.805 billion Key Balance Sheet Data (in millions) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets ($ million) | $3,221 | $2,661 | | Property, Plant, and Equipment – net ($ million) | $39,773 | $38,692 | | Total Assets ($ million) | $56,141 | $54,532 | | Total Current Liabilities ($ million) | $6,012 | $5,312 | | Long-term Debt ($ million) | $25,603 | $24,736 | | Total Liabilities ($ million) | $41,336 | $39,692 | | Total Equity ($ million) | $14,805 | $14,840 | Consolidated Statement of Cash Flows For H1 2025, net cash from operating activities was $2.883 billion, with $2.194 billion used in investing activities and $154 million provided by financing activities, marking a significant shift from the prior year Cash Flow Summary - Six Months Ended June 30 (in millions) | Activity | 2025 ($ million) | 2024 ($ million) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $2,883 | $2,513 | | Net Cash from Investing Activities | ($2,194) | ($3,056) | | Net Cash from Financing Activities | $154 | ($1,552) | | Increase (Decrease) in Cash ($ million) | $843 | ($2,095) | Supplemental Information This section provides additional details on capital expenditures, non-GAAP reconciliations, and important forward-looking statements Capital Expenditures and Investments Total capital expenditures for H1 2025 were $1.984 billion, with Transmission & Gulf of America and West segments accounting for the largest portions at $959 million and $823 million, respectively YTD 2025 Capital Expenditures by Segment (in millions) | Segment | YTD 2025 Capex ($ million) | | :--- | :--- | | Transmission & Gulf of America | $959 | | Northeast G&P | $101 | | West | $823 | | Gas & NGL Marketing Services | $1 | | Other | $100 | | Total | $1,984 | Non-GAAP Reconciliations This section defines key non-GAAP financial measures like Modified EBITDA, Adjusted EBITDA, and AFFO, providing detailed reconciliation tables to their comparable GAAP counterparts for transparency - Defines non-GAAP measures like Modified EBITDA, Adjusted EBITDA, and AFFO, which management believes provide meaningful insight into ongoing operations and cash generation[45][46][47] - Includes detailed tables reconciling GAAP Net Income to Non-GAAP Adjusted Income and Adjusted EBITDA, and GAAP Cash Flow from Operating Activities to Non-GAAP AFFO[51][53][55] Forward-Looking Statements This section contains a standard safe harbor statement, cautioning that forward-looking statements regarding future performance and projects are subject to numerous risks and uncertainties, with detailed risk factors referenced in SEC filings - The report contains forward-looking statements concerning anticipated financial performance, dividends, capital expenditures, and project in-service dates[58][60] - These statements are subject to risks and uncertainties, including market volatility, regulatory changes, project execution, and macroeconomic conditions[60][61] - Investors are cautioned not to place undue reliance on these statements and are directed to the company's Form 10-K and 10-Q filings for a detailed discussion of risk factors[61][64]