Williams Delivers Strong First-Quarter Results; Positioned to Hit Top Half of 2024 Financial Guidance Range

Press Release

TULSA, Okla.-May 6, 2024– Williams (NYSE: WMB) today announced its unaudited financial results for the three months ended March 31, 2024.

Business continues to outperform; solid execution on accretive acquisitions and organic growth driving immediate returns

• GAAP net income of $631 million, or $0.52 per diluted share (EPS)
• Adjusted net income of $719 million, or $0.59 per diluted share (Adj. EPS) – up 5% vs. 1Q 2023
• Adjusted EBITDA of $1.934 billion – up $139 million or 8% vs. 1Q 2023
• Cash flow from operations (CFFO) of $1.234 billion
• Available funds from operations (AFFO) of $1.507 billion – up $62 million or 4% vs. 1Q 2023
• Dividend coverage ratio of 2.60x (AFFO basis)
• Record contracted transmission capacity of 33.9 Bcf/d – up 4.3% from 1Q 2023
• Strong 1Q performance driving expectations to top half of 2024 financial guidance range

Recent acquisitions and large roster of projects in execution building long-term value

• Closed acquisition of 6 storage facilities with total capacity of 115 Bcf across Louisiana and Mississippi, strategically located to serve growing LNG exports and power generation demand
• Placed Transco’s Carolina Market Link into service 1Q 2024
• Received FERC notice to proceed on Transco’s Commonwealth Energy Connector
• Commenced construction on Transco’s Southside Reliability Enhancement and Southeast Energy Connector
• First phase of Transco’s Regional Energy Access continued to deliver earnings with second phase on track to come online in 4Q 2024
• Received FERC certificate for Transco’s Alabama Georgia Connector and Texas to Louisiana Energy Pathway
• Pre-filed FERC application for Transco’s ~1.6 Bcf/d Southeast Supply Enhancement
• Continued execution of additional transmission, gathering & processing and Deepwater Gulf of Mexico projects

CEO Perspective

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

“Our 8 percent higher Adjusted EBITDA was driven by the continued outperformance of our transmission, storage and gathering businesses, which delivered 13 percent higher Adjusted EBITDA compared to the same period last year. Contracted transmission capacity achieved another record in the first quarter and our Transco projects recently placed into service contributed additional fee-based revenues, as did our immediately accretive acquisitions, including the Gulf Coast storage portfolio that we closed in the quarter.

“Crisp execution by our teams in both integrating newly acquired assets and building large-scale organic projects has us on track to be in the top half of our original 2024 guidance range. As our natural gas-focused strategy continues to gain momentum, we are successfully executing a full slate of high return growth projects, with new regulatory milestones reached on seven of our FERC-regulated expansion projects so far this year and progressing on a healthy backlog of expansion opportunities to serve accelerating demand for natural gas.

Armstrong added, “Our track record of generating predictable, growing earnings in all market cycles underscores the value of Williams as a resilient, long-term investment with a strong dividend. We’ve built a business positioned for the future, and we’re leveraging our existing infrastructure and project development capabilities to serve rising domestic and global security needs, while lowering emissions and creating sustainable value for our shareholders.”

GAAP Measures

First-quarter 2024 net income decreased by $295 million compared to the prior year reflecting an unfavorable change of $419 million in net unrealized gains/losses on commodity derivatives, higher net interest expense from recent debt issuances and retirements, as well as higher operating costs, depreciation and interest expense resulting from recent acquisitions. These unfavorable changes were partially offset by a $211 million increase in service revenues driven by acquisitions and expansion projects. The tax provision decreased primarily due to lower pretax income.

First-quarter 2024 cash flow from operations decreased compared to the prior year primarily due to unfavorable net changes in both working capital and derivative collateral requirements.

Non-GAAP Measures

First-quarter 2024 Adjusted EBITDA increased by $139 million over the prior year, driven by the previously described favorable net contributions from acquisitions and expansion projects.

First-quarter 2024 Adjusted Net Income improved by $35 million over the prior year, driven by the previously described impacts to net income, adjusted primarily to remove the effects of net unrealized gains/losses on commodity derivatives and the related income tax effects.

First-quarter Available Funds From Operations (AFFO) increased by $62 million compared to the prior year primarily due to the change in operating results exclusive of non-cash items.

Business Segment Results & Form 10-Q

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 first-quarter 2024 Form 10-Q.

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