Williams (NYSE:WMB) today announced its unaudited financial results for the three and six months ended June 30, 2023.

Robust growth continues across key financial metrics driven by base business

GAAP net income of $547 million, or $0.45 per diluted share (EPS) – up 36% vs. 2Q 2022
Adjusted net income of $515 million, or $0.42 per diluted share (Adjusted EPS) – up 5% vs. 2Q 2022
Adjusted EBITDA of $1.611 billion – up $115 million or 8% vs. 2Q 2022
Cash flow from operations (CFFO) of $1.377 billion – up $279 million or 25% vs. 2Q 2022
Available funds from operations (AFFO) of $1.215 billion – up $85 million or 8% vs. 2Q 2022
Dividend coverage ratio of 2.23x (AFFO basis)
Repurchased $56 million in shares through opportunistic stock buyback program
Record gathering volumes of 18.03 Bcf/d
Continued improvement of balance sheet with leverage ratio of 3.50x

Recent progress on projects in execution to deliver additional earnings growth in 2023 and beyond

Continued construction of Regional Energy Access with partial in service expected ahead of schedule in 4Q 2023
Received FERC certificate on Southside Reliability Enhancement Project
Received favorable environmental assessment on Texas to Louisiana Energy Pathway Project
Filed FERC applications for Carolina Market Link and Alabama to Georgia Connector Projects
Signed precedent agreement on MountainWest's Overthrust Westbound Expansion
Continued execution of modernization and Emissions Reduction Program (ERP) on transmission systems with completion of first ERP project on Transco compressor station

CEO Perspective

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

"Our natural gas-centric strategy continues to prove its resiliency in a low gas price environment with second-quarter Adjusted EBITDA up 8 percent over the same period last year driven by strong earnings growth across our base business. In addition to record gathering volumes, we also benefited from our first full quarter of contributions from the MountainWest Pipeline transmission and storage assets, which our teams have quickly integrated into our large-scale platforms in the western U.S.

"On the project execution front, we are in full construction on the Regional Energy Access expansion, and expect to bring half of the project in service ahead of schedule this winter to begin moving additional Northeast gas to nearby markets. We are generating value from our 2022 acquisitions with several growth projects underway, including MountainWest's Overthrust Westbound Expansion. Elsewhere across our footprint, we are progressing on an impressive list of transmission and deepwater Gulf of Mexico projects, which we expect to drive additional growth toward the end of 2024."

Armstrong added, "As we continue expanding to serve growing markets, we're also investing in a multi-year modernization program of our large-scale transmission systems, which will reduce emissions and increase earnings. Our recently issued Sustainability Report details this progress as well as ongoing efforts to support communities, environmental stewardship and workforce development and diversity."

Williams Summary Financial Information	2Q		Year to Date
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	$547	$400	$1,473	$779
Net Income Per Share	$0.45	$0.33	$1.20	$0.64
Cash Flow From Operations	$1,377	$1,098	$2,891	$2,180

Non-GAAP Measures (1)
Adjusted EBITDA	$1,611	$1,496	$3,406	$3,007
Adjusted Net Income	$515	$484	$1,199	$983
Adjusted Earnings Per Share	$0.42	$0.40	$0.98	$0.80
Available Funds from Operations	$1,215	$1,130	$2,660	$2,320
Dividend Coverage Ratio	2.23x	2.19x	2.44x	2.24x

Other
Debt-to-Adjusted EBITDA at Quarter End (2)	3.50x	3.82x
Capital Investments (3) (4)	$715	$429	$1,240	$745

(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 includes 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) Year-to-date 2023 capital excludes $1.053 billion acquisition of MountainWest Pipeline Holding company, which closed February 14, 2023. Second quarter 2022 and full-year 2022 capital excludes $933 million for purchase of the Trace Midstream Haynesville gathering assets, which closed April 29, 2022.

GAAP Measures

Second-quarter 2023 net income increased by $147 million compared to the prior year reflecting the benefit of higher service revenues driven by contributions from recent acquisitions and increased volumes and rates in the Northeast G&P segment, as well as a favorable change of $324 million in net unrealized gains/losses on commodity derivatives. These improvements were partially offset by lower results from our upstream business driven by lower prices, lower commodity marketing margins, and higher operating and administrative expenses, including the impact from recent acquisitions. The tax provision increased primarily due to higher pretax income and the absence of $134 million associated with the release of valuation allowances on deferred income tax assets and federal income tax settlements recorded in the prior year. The second-quarter and year-to-date 2023 periods also reported a loss from discontinued operations associated with an adverse legal ruling involving former refinery operations.

For year-to-date 2023, net income increased $694 million compared to the prior year reflecting a favorable change of $774 million in net unrealized gains/losses on commodity derivatives. Other drivers of the year-to-date increase are similar to those described for the quarterly comparison, except that improved commodity marketing margins more than offset lower NGL processing margins for the year-to-date period.

Cash flow from operations for the second-quarter and year-to-date 2023 periods increased compared to 2022 primarily due to favorable net changes in working capital. The year-to-date improvement also reflected higher operating results exclusive of non-cash items.

Non-GAAP Measures

Second-quarter 2023 Adjusted EBITDA increased by $115 million over the prior year, driven by the previously described higher service revenues, partially offset by lower commodity marketing margins, reduced upstream results, and higher operating and administrative expenses. Year-to-date 2023 Adjusted EBITDA increased by $399 million over the prior year, driven by similar factors, except that commodity margins were overall improved.

Second-quarter 2023 Adjusted Net Income improved by $31 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, amortization of certain assets from the Sequent acquisition, and favorable income tax benefits. Year-to-date Adjusted Net Income increased by $216 million over the prior year for similar reasons.

Second-quarter 2023 Available Funds From Operations (AFFO) increased by $85 million compared to the prior year primarily due to higher results from continuing operations exclusive of non-cash items. Year-to-date 2023 AFFO increased by $340 million also primarily reflecting higher results from continuing operations exclusive of non-cash items.

	Second Quarter										Year to Date
Amounts in millions	Modified EBITDA					Adjusted EBITDA					Modified EBITDA					Adjusted EBITDA
Amounts in millions	2Q 2023	2Q 2022		Change		2Q 2023		2Q 2022	Change		2023	2022		Change		2023	2022	Change
Transmission & Gulf of Mexico	$731	$652		$79		$748		$652	$96		$1,446	$1,349		$97		$1,476	$1,349	$127
Northeast G&P	515	450		65		515		450	65		985	868		117		985	868	117
West	312	288		24		312		296	16		616	548		68		598	556	42
Gas & NGL Marketing Services	68	(282	)	350		(16	)	6	(22	)	635	(269	)	904		215	71	144
Other	41	139		(98	)	52		92	(40	)	115	144		(29	)	132	163	(31	)
Total	$1,667	$1,247		$420		$1,611		$1,496	$115		$3,797	$2,640		$1,157		$3,406	$3,007	$399

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

Second-quarter and year-to-date 2023 Modified and Adjusted EBITDA improved compared to the prior year driven by the MountainWest and NorTex Midstream acquisitions, as well as higher service revenues. Modified EBITDA for 2023 was further impacted by one-time MountainWest acquisition and transition costs, which are excluded from Adjusted EBITDA.

Northeast G&P

Second-quarter and year-to-date 2023 Modified and Adjusted EBITDA increased over the prior year driven by increased gathering rates and volumes, partially offset by lower rates at Laurel Mountain Midstream and Bradford joint ventures.

West

Second-quarter and year-to-date 2023 Modified and Adjusted EBITDA increased compared to the prior year benefiting from higher service revenues reflecting realized gains on natural gas hedges and higher Haynesville volumes, partially offset by lower NYMEX-based rates in the Barnett, as well increased JV EBITDA. The year-to-date period improvement also included contributions from Trace Midstream acquired in April 2022 and lower processing margins due to a short-term gas price spike at Opal early in the year and severe weather impacts.

Gas & NGL Marketing Services

Second-quarter 2023 Modified EBITDA improved from the prior year primarily reflecting a $382 million net favorable change in unrealized gains/losses on commodity derivatives. Year-to-date 2023 Modified EBITDA improved from the prior year primarily reflecting higher commodity marketing margins and a $772 million net favorable change in unrealized gains/losses on commodity derivatives. The unrealized gains/losses on commodity derivatives are excluded from Adjusted EBITDA.

Other

Second-quarter 2023 Modified EBITDA decreased compared to the prior year primarily reflecting a $58 million net unfavorable change in unrealized gains/losses on commodity derivatives, which is excluded from Adjusted EBITDA. The second-quarter and year-to-date periods were also impacted by lower results from our upstream business driven by lower prices.

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 second-quarter 2023 Form 10-Q.

2023 Financial Guidance

The company continues to expect 2023 Adjusted EBITDA between $6.4 billion and $6.8 billion with 2023 growth capex between $1.6 billion to $1.9 billion. Importantly, Williams anticipates a leverage ratio midpoint of 3.65x, which will allow it to retain financial flexibility. The dividend was increased by 5.3% on an annualized basis to $1.79 in 2023 from $1.70 in 2022.

Williams' Second-Quarter 2023 Materials to be Posted Shortly; Q&A Webcast Scheduled for Tomorrow

Williams' second-quarter 2023 earnings presentation will be posted at www.williams.com. The company's second-quarter 2023 earnings conference call and webcast with analysts and investors is scheduled for Thursday, Aug. 3, at 9:30 a.m. Eastern Time (8:30 a.m. Central Time). Participants who wish to join the call by phone must register using the following link: https://conferencingportals.com/event/MTgNWtxQ

A webcast link to the conference call will be provided on Williams' Investor Relations website. A replay of the webcast will be available on the website for at least 90 days following the event.

About Williams

As the world demands reliable, low-cost, low-carbon energy, Williams (NYSE:WMB) will be there with the best transport, storage and delivery solutions to reliably fuel the clean energy economy. Headquartered in Tulsa, Oklahoma, Williams is an industry-leading, investment grade C-Corp with operations across the natural gas value chain including gathering, processing, interstate transportation, storage, wholesale marketing and trading of natural gas and natural gas liquids. With major positions in top U.S. supply basins, Williams connects the best supplies with the growing demand for clean energy. Williams owns and operates more than 33,000 miles of pipelines system wide – including Transco, the nation's largest volume pipeline – and handles approximately one third of the natural gas in the United States that is used every day for clean-power generation, heating and industrial use. Learn how the company is leveraging its nationwide footprint to incorporate clean hydrogen, NextGen Gas and other innovations at www.williams.com.

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

	Three Months Ended June 30,						Six Months Ended June 30,
		2023			2022			2023			2022
	(Millions, except per-share amounts)
Revenues:
Service revenues	$	1,748		$	1,606		$	3,442		$	3,143
Service revenues – commodity consideration		27			86			63			163
Product sales		593			1,111			1,438			2,215
Net gain (loss) on commodity derivatives		115			(313	)		621			(507	)
Total revenues		2,483			2,490			5,564			5,014
Costs and expenses:
Product costs		421			857			974			1,660
Net processing commodity expenses		44			40			98			70
Operating and maintenance expenses		481			465			944			859
Depreciation and amortization expenses		515			506			1,021			1,004
Selling, general, and administrative expenses		161			160			337			314
Other (income) expense – net		(9	)		(10	)		(40	)		(19	)
Total costs and expenses		1,613			2,018			3,334			3,888
Operating income (loss)		870			472			2,230			1,126
Equity earnings (losses)		160			163			307			299
Other investing income (loss) – net		13			2			21			3
Interest incurred		(319	)		(286	)		(623	)		(575	)
Interest capitalized		13			5			23			8
Other income (expense) – net		19			6			39			11
Income (loss) before income taxes		756			362			1,997			872
Less: Provision (benefit) for income taxes		175			(45	)		459			73
Income (loss) from continuing operations		581			407			1,538			799
Income (loss) from discontinued operations		(87	)		—			(87	)		—
Net income (loss)		494			407			1,451			799
Less: Net income (loss) attributable to noncontrolling interests		34			7			64			19
Net income (loss) attributable to The Williams Companies, Inc		460			400			1,387			780
Less: Preferred stock dividends		—			—			1			1
Net income (loss) available to common stockholders	$	460		$	400		$	1,386		$	779
Amounts attributable to The Williams Companies, Inc. available to common stockholders:.
Income (loss) from continuing operations	$	547		$	400		$	1,473		$	779
Income (loss) from discontinued operations		(87	)		—			(87	)		—
Net income (loss) available to common stockholders	$	460		$	400		$	1,386		$	779
Basic earnings (loss) per common share:
Income (loss) from continuing operations	$	.45		$	.33		$	1.21		$	.64
Income (loss) from discontinued operations		(.07	)		—			(.07	)		—
Net income (loss) available to common stockholders	$	.38		$	.33		$	1.14		$	.64
Weighted-average shares (thousands)		1,217,673			1,218,678			1,218,564			1,217,814
Diluted earnings (loss) per common share:
Income (loss) from continuing operations	$	.45		$	.33		$	1.20		$	.64
Income (loss) from discontinued operations		(.07	)		—			(.07	)		—
Net income (loss) available to common stockholders	$	.38		$	.33		$	1.13		$	.64
Weighted-average shares (thousands)		1,219,915			1,222,694			1,223,429			1,221,991

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

	June 30, 2023			December 31, 2022
	(Millions, except per-share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	551		$	152
Trade accounts and other receivables (net of allowance of $6 at June 30, 2023 and December 31, 2022)		1,362			2,723
Inventories		259			320
Derivative assets		233			323
Other current assets and deferred charges		234			279
Total current assets		2,639			3,797
Investments		5,046			5,065
Property, plant, and equipment		50,240			47,057
Accumulated depreciation and amortization		(17,894	)		(16,168	)
Property, plant, and equipment – net.		32,346			30,889
Intangible assets – net of accumulated amortization		7,573			7,363
Regulatory assets, deferred charges, and other		1,421			1,319
Total assets	$	49,025		$	48,433
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,146		$	2,327
Derivative liabilities		143			316
Accrued and other current liabilities		1,218			1,270
Commercial paper		—			350
Long-term debt due within one year		2,877			627
Total current liabilities		5,384			4,890
Long-term debt		21,532			21,927
Deferred income tax liabilities		3,325			2,887
Regulatory liabilities, deferred income, and other		4,575			4,684
Contingent liabilities and commitments
Equity:
Stockholders' equity:
Preferred stock ($1 par value; 30 million shares authorized at June 30, 2023 and December 31, 2022; 35,000 shares issued at June 30, 2023 and December 31, 2022)		35			35
Common stock ($1 par value; 1,470 million shares authorized at June 30, 2023 and December 31, 2022; 1,256 million shares issued at June 30, 2023 and 1,253 million shares issued at December 31, 2022)		1,256			1,253
Capital in excess of par value		24,538			24,542
Retained deficit		(12,982	)		(13,271	)
Accumulated other comprehensive income (loss).		12			(24	)
Treasury stock, at cost (39 million shares at June 30, 2023 and 35 million shares at December 31, 2022 of common stock)		(1,180	)		(1,050	)
Total stockholders' equity		11,679			11,485
Noncontrolling interests in consolidated subsidiaries		2,530			2,560
Total equity		14,209			14,045
Total liabilities and equity	$	49,025		$	48,433

The Williams Companies, Inc. Consolidated Statement of Cash Flows (Unaudited)
	Six Months Ended June 30,
		2023			2022
	(Millions)
OPERATING ACTIVITIES:
Net income (loss)	$	1,451		$	799
Adjustments to reconcile to net cash provided (used) by operating activities:
Depreciation and amortization		1,021			1,004
Provision (benefit) for deferred income taxes		427			90
Equity (earnings) losses		(307	)		(299	)
Distributions from equity-method investees		418			414
Net unrealized (gain) loss from derivative instruments		(410	)		364
Inventory write-downs		23			12
Amortization of stock-based awards		40			36
Cash provided (used) by changes in current assets and liabilities:
Accounts receivable		1,423			(797	)
Inventories		41			(11	)
Other current assets and deferred charges		24			(15	)
Accounts payable		(1,220	)		690
Accrued and other current liabilities		(72	)		(24	)
Changes in current and noncurrent derivative assets and liabilities		119			49
Other, including changes in noncurrent assets and liabilities		(87	)		(132	)
Net cash provided (used) by operating activities		2,891			2,180
FINANCING ACTIVITIES:
Proceeds from (payments of) commercial paper – net		(352	)		1,037
Proceeds from long-term debt		1,503			5
Payments of long-term debt		(14	)		(2,012	)
Proceeds from issuance of common stock		4			48
Purchases of treasury stock		(130	)		—
Common dividends paid		(1,091	)		(1,035	)
Dividends and distributions paid to noncontrolling interests		(112	)		(95	)
Contributions from noncontrolling interests		18			8
Payments for debt issuance costs		(13	)		—
Other – net		(17	)		(31	)
Net cash provided (used) by financing activities		(204	)		(2,075	)
INVESTING ACTIVITIES:
Property, plant, and equipment:
Capital expenditures (1)		(1,155	)		(606	)
Dispositions – net		(21	)		(11	)
Contributions in aid of construction		18			6
Purchases of businesses, net of cash acquired		(1,053	)		(933	)
Purchases of and contributions to equity-method investments		(69	)		(100	)
Other – net		(8	)		(8	)
Net cash provided (used) by investing activities		(2,288	)		(1,652	)
Increase (decrease) in cash and cash equivalents		399			(1,547	)
Cash and cash equivalents at beginning of year		152			1,680
Cash and cash equivalents at end of period	$	551		$	133
_____________
(1) Increases to property, plant, and equipment	$	(1,168	)	$	(642	)
Changes in related accounts payable and accrued liabilities		13			36
Capital expenditures	$	(1,155	)	$	(606	)

Transmission & Gulf of Mexico
(UNAUDITED)
	2022										2023
(Dollars in millions)	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Year		1st Qtr		2nd Qtr		Year
Regulated interstate natural gas transportation, storage, and other revenues ⁽¹⁾	$	730	$	717	$	734	$	758	$	2,939	$	774	$	786	$	1,560
Gathering, processing, storage and transportation revenues		82		84		99		100		365		100		104		204
Other fee revenues ⁽¹⁾		5		5		4		7		21		6		8		14
Commodity margins		15		11		10