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Williams Companies’ Leverage Situation: What You Should Know

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Williams Companies’ outstanding debt

Williams Companies (WMB) ended 2Q16 with a huge outstanding debt of $24.4 billion. That’s 2.4% higher than its outstanding debt at the end of 2015. This includes $19.9 billion of debt sitting on Williams Partners’ (WPZ) balance sheet.

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Williams Companies’ net debt-to-EBITDA

Williams Companies’ net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) multiple was 5.4x at the end of 2Q16. This is above the industry standards. Moreover, WMB’s leverage situation is worse than most of its peers.

WMB and Williams Partners (WPZ) have announced a number of measures, including an asset sale and a contract restructuring, to reduce their leverages and maintain WPZ’s investment-grade rating. Williams Partners expects to receive $820 million in upfront cash from the contract restructuring of the Barnett and Mid-Continent regions. We’ll look at this in more detail in a later part of the series.

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