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Analyzing Williams Companies and Williams Partners’ 3Q17 Results

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Analyzing Williams Companies and Williams Partners’ 3Q17 Results PART 1 OF 5

WMB and WPZ: Lower Earnings in 3Q17, Maintained 2017 Guidance

3Q17 adjusted EBITDA

Williams Companies (WMB) and its MLP subsidiary, Williams Partners (WPZ), reported their 3Q17 earnings on November 1, 2017, and held their conference call the next day. Williams Partners’ adjusted EBITDA fell to $1.101 billion in 3Q17 from $1.189 billion in 3Q16—a YoY (year-over-year) fall of 7.4%. However, the partnership almost met its 3Q17 EBITDA estimate. Despite the recent declines, Williams Partners still expects to meet its 2017 EBITDA and distributable cash flow guidance. Williams Partners expects its 2017 EBITDA to be $4.35 billion–$4.55 billion.

WMB and WPZ: Lower Earnings in 3Q17, Maintained 2017 Guidance

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The YoY fall in the partnership’s 3Q17 EBITDA was due to asset sales completed in the past year and contract restructuring in the Barnett and Niobrara regions. Williams Partners’ divestments include the sale of its Canadian business, Geismar plant, and RGP splitter. The partnership’s 3Q17 earnings were impacted slightly by Hurricane Harvey and Hurricane Irma. The above negatives were partially offset by growth in the Northeast G&P segment.

3Q17 distributable cash flows

Williams Partners’ distributable cash flows fell to $669 million in 3Q17 compared to $795 million in 3Q16—a YoY fall of 15.8%. The YoY decline in the partnership’s 3Q17 distributable cash flows was mainly due to contract restructuring and higher maintenance expenses. It was slightly offset by lower interest expenses.

Williams Companies’ distributable cash flows fell to $355 million in 3Q17 from $441 million in 3Q16—a YoY fall of 24.0%. It was mainly due to a distribution cut and the removal of invective distribution rights at Williams Partners.

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