Williams Achieves Another Year of Record Results and Raises 2025 Financial Guidance

TULSA, Okla.–(BUSINESS WIRE)–Williams (NYSE: WMB) today announced its unaudited financial results for the three and 12 months ended Dec. 31, 2024.

Business strength drives year-over-year financial growth

• GAAP net income: $2.222 billion, or $1.82 per diluted share (EPS)
• Adjusted net income: $2.347 billion, or $1.92 per diluted share (Adj. EPS)
• Record Adjusted EBITDA: $7.08 billion – up $301 million or 4.4% vs. 2023
• Cash flow from operations (CFFO): $4.974 billion
• Available funds from operations (AFFO): $5.378 billion – up $165 million or 3.2% vs. 2023
• Dividend coverage ratio: 2.32x (AFFO basis)
• Record contracted transmission capacity: 33.4 Bcf/d – up 3.4% from 2023 – with Transco additions contributing to successive new peak days
• Surpassed 2024 Adjusted EBITDA guidance midpoint
• 2024 leverage ratio: 3.79x
• Raised 2025 Adjusted EBITDA guidance midpoint by 3% to between $7.45 billion and $7.85 billion, with a projected 5-year CAGR of 8% through 2025
• Dividend increase: 5.3% to $2.00 annualized; continuing quarterly dividend since 1974

Successful execution of strategic priorities in 2024 fuels momentum for 2025 growth

• Transco expansions: Placed Regional Energy Access, Southside Reliability Enhancement and Carolina Market Link expansions in service
• Key expansions: MountainWest, Marcellus South gathering system and the Deepwater Gulf
• Gulf Coast Storage integration: 115 Bcf of strategically located storage to serve growing LNG exports and power generation demand, announcing first expansion of 10 Bcf
• High-return transmission projects: Six projects announced in 2024 to add 885 MMcf/d of capacity, serving key demand centers along footprint
• Portfolio enhancements: Consolidated interest in Gulf Discovery system and Wamsutter upstream joint venture; divested Aux Sable
• DJ Basin bolt-on: Acquired Rimrock’s DJ gathering and processing system
• Emissions reductions: 92 compressor units replaced, decreasing emissions and operating expenses and generating earnings growth from Transco rate case
• Sustainability leadership: Recognized in key rankings, including the Dow Jones Best-in-Class Index, S&P Global, MSCI and the 2024 CDP Climate Change Questionnaire

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

“Our natural gas-focused strategy delivered outstanding financial results in 2024, with Adjusted EBITDA and contracted transmission capacity reaching record levels due to the continued growth in natural gas demand driven by the abundance of low-cost U.S. natural gas. As we maintain our strong track record of project execution and completion, we fully expect this growth to accelerate in 2025. Consequently, we are raising our Adjusted EBITDA guidance midpoint by 3% to $7.65 billion, representing a remarkable compound annual growth rate (CAGR) of 8% over the last five years.

“In 2024, we expanded Transco with the completion of the Regional Energy Access, Southside Reliability Enhancement and Carolina Market Link projects as natural gas demand hit record highs with the onset of winter. We also increased transmission capacity for MountainWest and gathering capacity in the prolific Marcellus and Deepwater Gulf regions. Currently, we have 14 high-return transmission projects in execution, including Transco’s Southeast Supply Enhancement project, a 1.6 Bcf/d expansion that will drive the largest earnings increase for a Williams pipeline project. Additionally, we optimized our portfolio by divesting Aux Sable and consolidating our interests in the Gulf Discovery system and the Wamsutter upstream joint ventures. Furthermore, we expanded our asset base in the DJ Basin with the recent bolt-on acquisition of the Rimrock gathering and processing system.”

Armstrong added, “For the last several years we’ve been implementing our long-term strategy to bring Williams to where we are today with a healthy balance sheet and a clear line of sight to a full portfolio of high-return projects. During these early years of what is shaping up to be the golden age of natural gas, our strategy is taking hold in a powerful way that is delivering robust growth and compounding returns for our shareholders. This is evidenced by our 5% CAGR on our dividend and annualized total shareholder return of nearly 30% over the last five years. Looking ahead, we maintain our long-standing commitment to shareholder returns and have once again increased our dividend this year by 5.3% as we continue providing the critical infrastructure that serves the increasing demand for clean, reliable energy across growing markets.”

GAAP Measures
Fourth-quarter 2024 net income decreased by $661 million compared to the prior year primarily reflecting the absence of a $534 million gain in 2023 related to the net cash received from the favorable resolution of litigation with Energy Transfer and an unfavorable change of $384 million in net unrealized gains/losses on commodity derivatives, partially offset by $161 million of higher service revenues driven by acquisitions and expansion projects. The decrease was also impacted by higher operating costs and depreciation from recent acquisitions, as well as lower investing income. The tax provision decreased $280 million primarily due to lower pretax income.

Full-year 2024 net income decreased by $1.051 billion compared to the prior year reflecting an unfavorable change of $1.027 billion in net unrealized gains/losses on commodity derivatives, the previously described $534 million net litigation gain, partially offset by $602 million of higher service revenues driven by acquisitions and expansion projects. The decrease was also impacted by higher operating costs, depreciation, and interest expense from recent acquisitions. Gains in 2024 of $149 million from the sale of our interests in Aux Sable and $127 million associated with the Discovery acquisition were partially offset by the absence of a $129 million gain on the sale of the Bayou Ethane system in 2023. The tax provision decreased $365 million primarily due to lower pretax income. The 2023 period also reported a loss from discontinued operations associated with an adverse legal ruling involving former refinery operations.

Fourth-quarter 2024 cash flow from operations decreased $595 million compared to the prior year, while full-year 2024 decreased $964 million, both driven by the absence of the previously described $534 million net litigation gain and unfavorable net changes in derivative collateral requirements, partially offset by higher operating results exclusive of non-cash items. The full year decline was also impacted by unfavorable changes in working capital.

Non-GAAP Measures
Fourth-quarter 2024 Adjusted EBITDA increased by $55 million over the prior year, driven by the previously described favorable net contributions from acquisitions and expansion projects. Full-year 2024 Adjusted EBITDA increased by $301 million over the prior year, similarly reflecting favorable net contributions from acquisitions and expansion projects, partially offset by lower proportional EBITDA from investees that have been sold or acquired by us and now consolidated.

Fourth-quarter 2024 Adjusted Net Income declined by $9 million over the prior year, while full-year 2024 Adjusted Net Income increased $13 million over the prior year, both driven by the previously described impacts to net income, adjusted primarily to remove the effects of the litigation gain related to Energy Transfer, gains associated with Bayou Ethane, Discovery, and Aux Sable, net unrealized gains/losses on commodity derivatives, acquisition-related costs, and the related income tax effects.

Fourth-quarter and full-year 2024 Available Funds From Operations (AFFO) increased by $12 million and $165 million, respectively, compared to the prior year primarily due to higher adjusted results from continuing operations exclusive of non-cash items.

Business Segment Results & Form 10-K
Williams’ operations are comprised of the following reportable segments: Transmission & Gulf, Northeast G&P, West and Gas & NGL Marketing Services, as well as Other. For more information, see the company’s 2024 Form 10-K.

Transmission & Gulf
Fourth-quarter 2024 Modified EBITDA improved compared to the prior year driven by favorable net contributions from the Gulf Coast Storage and Discovery acquisitions and the Regional Energy Access expansion project. Full-year 2024 Modified EBITDA improved as the favorable net contributions from acquisitions, including MountainWest, and Regional Energy Access, along with lower one-time acquisition and transition costs, were partially offset by the absence of the previously mentioned gain on the sale of the Bayou Ethane system and hurricane impacts. Fourth-quarter and full-year Adjusted EBITDA, which excludes the Bayou Ethane gain and acquisition and transition costs, improved compared to the prior year.

Northeast G&P
Fourth-quarter and full-year 2024 Modified EBITDA increased compared to the prior year driven by higher rates at Susquehanna Supply Hub, Ohio Valley Midstream and Bradford, substantially offset by lower gathering volumes. The improved full-year Modified EBITDA also reflects the absence of our share of a loss contingency accrual at Aux Sable in 2023, which is excluded from Adjusted EBITDA.

West
Fourth-quarter 2024 Modified and Adjusted EBITDA increased compared to the prior year benefiting from the DJ Basin Acquisitions, partially offset by lower gathering volumes. Both metrics also improved for the full-year period reflecting similar drivers, as well as improved commodity margins to reflect favorable changes in commodity processing costs and increased contributions from Overland Pass Pipeline reflecting higher volumes, partially offset by lower realized gains on natural gas hedges. The full-year Modified EBITDA was also impacted by the absence of a first-quarter 2023 favorable contract settlement, which is excluded from Adjusted EBITDA.

Gas & NGL Marketing Services
Fourth-quarter 2024 Modified EBITDA decreased from the prior year reflecting lower gas and NGL marketing margins and a $358 million net unfavorable change in unrealized gains/losses on commodity derivatives, which is excluded from Adjusted EBITDA. Full-year 2024 Modified EBITDA also decreased from the prior year reflecting a decline in gas and NGL marketing margins, as well as a $1 billion net unfavorable change in unrealized gains/losses on commodity derivatives, which is excluded from Adjusted EBITDA.

Other
Fourth-quarter and full-year 2024 Modified and Adjusted EBITDA decreased compared to the prior year driven by the absence of the $534 million litigation settlement income related to Energy Transfer in 2023 and an unfavorable change in unrealized gains/losses on commodity derivatives, both of which are excluded from Adjusted EBITDA. These metrics also reflect lower net contributions from upstream operations, including the benefit of upstream interests acquired in the fourth quarter of 2024.

2025 Financial Guidance
The company is raising the midpoint of its 2025 Adjusted EBITDA guidance by 3% and updating the range to between $7.45 billion and $7.85 billion. The company continues to expect 2025 growth capex between $1.65 billion and $1.95 billion and maintenance capex between $650 million and $750 million, excluding capital of $150 million based on midpoint for emissions reduction and modernization initiatives. Williams is improving its leverage ratio midpoint for 2025 to 3.55x and has increased the dividend by 5.3% on an annualized basis to $2.00 in 2025 from $1.90 in 2024.

Williams’ Fourth-Quarter and Full-Year 2024 Materials to be Posted Shortly; Q&A Webcast Scheduled for Tomorrow
Williams’ fourth-quarter and full-year 2024 earnings presentation will be posted at www.williams.com. The company’s full-year 2024 earnings conference call and webcast with analysts and investors is scheduled for Thursday, Feb. 13, 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://register.vevent.com/register/BI2a741c8698464278bd7752bfd9ef3746.

A webcast link to the conference call will be provided on Williams’ Investor Relations website. A replay of the 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.