WILLIAMS UT 
By - Lower NGL Margins Reduce DCF, Net Income in 1Q 2009
- Distribution Coverage Ratio is 0.9 for 1Q
- 1Q Results Consistent with Management's
- Cash Distribution Maintained at
First-quarter 2008 net income per limited-partner unit has been revised pursuant to the adoption of an accounting rule change in 2009.
Lower natural gas liquid (NGL) margins were the primary reason for the decline in net income in the first quarter. Sharply lower NGL prices, which were somewhat offset by lower natural gas prices, were the primary drivers of the lower NGL margins. Lower operating and maintenance expenses and higher fee-based revenues partially offset the lower NGL margins.
For first-quarter 2009, the key measure of distributable cash flow per weighted-average limited partner unit was
The declines in distributable cash flow in the first quarter are due to lower cash distributions from the Discovery and
Although first-quarter distributable cash flow and net income were sharply lower compared with first-quarter 2008, the results are consistent with the full-year 2009 guidance management previously provided.
The following chart shows management's
Commodity Price Assumptions Full-Year 2009 1Q 2009 Actual
Natural Gas ($/MMBtu):
NYMEX $4.50 $4.58
Rockies $3.00 $3.07
San Juan $3.25 $3.25
Oil / NGL
Low High
Crude Oil - WTI ($/barrel) $45 $60 $43
NGL to Crude Oil
relationship* 49% 60% 56%
Effect on Williams Partners'
Cash Flows
Amounts in millions, except NGL
margins and coverage ratios
Four Corners NGL Margins
($/gallon) $0.27 $0.58 $0.32
Wamsutter NGL Margins
($/gallon) $0.26 $0.57 $0.25
2009 Distributable Cash Flow** $105 $206 $30
2009 Distributions $137 $137 $34
Cash Distribution Coverage
Ratio** 0.8x 1.5x 0.9x
* The price of natural gas liquids as a percentage of the price of crude
oil on an equal volume basis for the remainder of 2009.
** Distributable Cash Flow and Cash Distribution Coverage Ratio are
non-GAAP measures. Reconciliations to the most relevant measures included
in GAAP are attached to this news release.
Chief Operating Officer Perspective
"As expected much lower NGL prices reduced our distributable cash flow compared with the results from last year. These reported NGL margins are in line with the guidance we provided unitholders on April 15," said
"Operationally, we were very pleased with our fee-based business, as volumes were up at our gathering and processing facilities in the West, with
Cash Distribution Per Limited-Partner Unit Maintained
For the first quarter, the partnership maintained its regular cash distribution to unitholders at
Williams Partners previously announced it expects to maintain its current level of quarterly cash distributions to limited-partner unitholders for 2009. This expectation is based on management's expectations for commodity prices, NGL margins, distributable cash flow attributable to partnership operations in 2009 and the partnership's year-end 2008 cash balance. See the partnership's
Business Segment Performance
Business segment performance includes results for the partnership's three business segments: Gathering and Processing - West, which includes Four Corners and the
Consolidated Segment Profit 1Q
-------------------
Amounts in thousands 2009 2008
Gathering and Processing - West $38,310 $50,405
Gathering and Processing - Gulf 691 13,511
NGL Services 4,316 5,541
----- -----
Consolidated Segment Profit $43,317 $69,457
======= =======
Recurring Consolidated Segment
Profit*
Amounts in thousands
Gathering and Processing - West $39,276 $47,340
Gathering and Processing - Gulf 691 13,511
NGL Services 4,316 5,541
----- -----
Recurring Consolidated Segment
Profit* $44,283 $66,392
======= =======
* A schedule reconciling segment profit to recurring segment
profit is attached to this press release.
Lower per-unit NGL margins at Four Corners and
Lower equity earnings from the Discovery investment drove the lower segment profit results in the Gathering and Processing - Gulf segment for first-quarter 2009. The reduced equity earnings were due primarily to lower per-unit NGL margins and lower plant inlet volumes, including hurricane effects. These negative impacts were partially offset by the receipt of
Reconciliations of the partnership's distributable cash flow for limited-partner unitholders to net income, as well as recurring segment profit to reported segment profit, are available on Williams Partners' web site at www.williamslp.com and as an attachment to this document.
Distributable Cash Flow and Recurring Segment Profit Definitions
Distributable cash flow per weighted average limited-partner unit is a key measure of the partnership's financial performance and available cash flows to unitholders.
Williams Partners defines distributable cash flow attributable to partnership operations as net income (loss) plus depreciation, amortization and accretion, less earnings from equity investments, as well as adjustments for certain non-cash, non-recurring items, plus reimbursements from Williams under an omnibus agreement and less maintenance capital expenditures, plus the actual cash distributed by
Williams Partners defines distributable cash flow per limited-partner unit as distributable cash flow attributable to partnership operations allocable to limited partners divided by the weighted average limited partner-units outstanding. Distributable cash flow attributable to partnership operations allocable to limited partners is calculated by allocating the distributable cash flow attributable to partnership operations, as defined in the preceding paragraph, between the general partner and the limited partners in accordance with the cash-distribution provisions of our partnership agreement.
Williams to Host Analyst Day in
Williams will host an analyst day in
The meeting will begin at
Both sessions will be broadcast live via webcast. Participants are encouraged to access the webcast at www.williams.com, www.williamslp.com, or www.williamspipelinepartners.com. Slides will be available the morning of
A replay of the analyst meeting webcast will be available for two weeks following the event at the web sites listed above.
Today's Analyst Call
Williams Partners' management will discuss the partnership's first-quarter 2009 financial results during a live webcast today beginning at
Participants are encouraged to access the webcast, as well as slides for viewing, downloading and printing at www.williamslp.com.
A limited number of phone lines also will be available at (877) 874-1563. International callers should dial (719) 325-4824. Replays of the first-quarter webcast, in both streaming and downloadable podcast formats, will be available for two weeks at www.williamslp.com following the event.
Form 10-Q
The partnership plans to file its Form 10-Q with the Securities and Exchange Commission today. The document will be available on both the SEC and Williams Partners web sites.
About Williams Partners L.P. (NYSE: WPZ)
Williams Partners L.P. is a publicly traded master limited partnership that owns natural gas gathering, transportation, processing and treating assets serving regions where producers require large scale and highly reliable services, including the
Contact: Jeff Pounds
Williams (media relations)
(918) 573-3332
Sharna Reingold
Williams (investor relations)
(918) 573-2078
Williams Partners L.P. is a limited partnership formed by The Williams Companies, Inc. (Williams). Our reports, filings, and other public announcements may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You typically can identify forward-looking statements by the use of forward-looking words, such as "anticipates," believes," "could," "may," "should," "continues," "estimates," "expects," "forecasts," "might," "planned," "potential," "projects," "scheduled," "will," and other similar words. These statements are based on our present intentions and our assumptions about future events and are subject to risks, uncertainties, and other factors. In addition to any assumptions, risks, uncertainties or other factors referred to specifically in connection with such statements, other factors not specifically referenced could cause our actual results to differ materially from the results expressed or implied in any forward-looking statements. Those factors include, among others:
-- whether we have sufficient cash from operations to enable us to maintain
current levels of cash distributions or to pay the minimum quarterly
distribution following establishment of cash reserves and payment of
fees and expenses, including payments to our general partner;
-- availability of supplies (including the uncertainties inherent in
assessing and estimating future natural gas reserves), market demand,
volatility of prices, and the availability and cost of capital;
-- inflation, interest rates and general economic conditions (including the
current economic slowdown and the disruption of global credit markets
and the impact of these events on our customers and suppliers);
-- the strength and financial resources of our competitors;
-- development of alternative energy sources;
-- the impact of operational and development hazards;
-- costs of, changes in, or the results of laws, government regulations
(including proposed climate change legislation), environmental
liabilities, litigation, and rate proceedings;
-- changes in maintenance and construction costs;
-- changes in the current geopolitical situation;
-- our exposure to the credit risks of our customers;
-- risks related to strategy and financing, including restrictions stemming
from our debt agreements, future changes in our credit ratings, and the
availability and cost of credit;
-- risks associated with future weather conditions;
-- acts of terrorism; and
-- additional risks described in our filings with the Securities and
Exchange Commission.
Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement, we caution investors not to unduly rely on our forward-looking statements. In addition to causing our actual results to differ, the factors listed above may cause our intentions to change. Such changes in our intentions may also cause our results to differ. We disclaim any obligation to and do not intend to publicly update or revise any forward-looking statements or changes to our intentions, whether as a result of new information, future events or otherwise.
Limited partner interests are inherently different from the capital stock of a corporation, although many of the business risks to which we are subject are similar to those that would be faced by a corporation engaged in a similar business. Investors are urged to closely consider the disclosures and risk factors in our annual report on Forms 10-K filed with the Securities and Exchange Commission on
Reconciliation of Non-GAAP Measures
(UNAUDITED)
This press release includes certain financial measures, Recurring
Segment Profit, Distributable Cash Flow and Distributable Cash Flow per
Limited Partner Unit that are non-GAAP financial measures as defined
under the rules of the Securities and Exchange Commission.
For Williams Partners L.P., Recurring Segment Profit excludes items
of income or loss that we characterize as unrepresentative of our ongoing
operations. Management believes Recurring Segment Profit provides
investors meaningful insight into Williams Partners L.P.'s results from
ongoing operations.
For Williams Partners L.P. we define Distributable Cash Flow
attributable to partnership operations as net income (loss) plus
depreciation, amortization and accretion, less our earnings from equity
investments, as well as adjustments for certain non-cash, non-recurring
items, plus reimbursements from Williams under an omnibus agreement and
less maintenance capital expenditures, plus the actual cash distributed
by Wamsutter and Discovery. For our equity investments, Wamsutter and
Discovery, we define Distributable Cash Flow as net income (loss) plus
depreciation, amortization and accretion and less maintenance capital
expenditures. We also adjust for certain non-cash, non-recurring items.
Our equity share of Wamsutter's Distributable Cash Flow is based on the
distribution provisions of the Wamsutter LLC Agreement. Our equity share
of Discovery's Distributable Cash Flow is 60%.
For Williams Partners L.P. we define Distributable Cash Flow per
Limited Partner Unit as Distributable Cash Flow attributable to
partnership operations allocable to limited partners divided by the
weighted average limited partner units outstanding. Distributable Cash
Flow attributable to partnership operations allocable to limited partners
is calculated by allocating the distributable cash flow attributable to
partnership operations, as defined in the preceding paragraph, between
the general partner and the limited partners in accordance with the cash
distribution provisions of our partnership agreement.
For Williams Partners L.P. we also calculate the ratio of
Distributable Cash Flow per Limited Partner Unit to the actual cash
distribution per unit paid and the ratio of Distributable Cash Flow
attributable to partnership operations to the total cash distributed
(cash distribution coverage ratio). These two measures reflect the
amount of Distributable Cash Flow relative to our actual cash
distribution on both a per Limited Partner Unit and total distribution
basis. We have also provided these ratios calculated using the most
directly comparable GAAP measures, net income per unit and net income.
This press release is accompanied by a reconciliation of these
non-GAAP financial measures to their nearest GAAP financial measures.
Management uses these financial measures because they are accepted
financial indicators used by investors to compare company performance.
In addition, management believes that these measures provide investors
an enhanced perspective of the operating performance of the Partnership's
assets and the cash that the business is generating. Neither Recurring
Segment Profit nor Distributable Cash Flow are intended to represent cash
flows for the period, nor are they presented as an alternative to net
income (loss) or cash flow from operations. Distributable Cash Flow per
Limited Partner is not presented as an alternative to net income per
unit. They should not be considered in isolation or as substitutes for a
measure of performance prepared in accordance with United States generally
accepted accounting principles.
2008
----
(Thousands,
except per-unit
amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D
----------------- ------- ------- ------- ------- -----
Williams Partners L.P.
Reconciliation of Non-GAAP
"Recurring Segment
Profit" to GAAP
"Segment Profit"
Gathering and
Processing - West $50,405 $86,778 $70,691 $46,288 $254,162
Gathering and
Processing - Gulf 13,511 8,446 8,480 (14,590) 15,847
NGL Services 5,541 3,414 6,315 8,768 24,038
----- ----- ----- ----- ------
Segment Profit 69,457 98,638 85,486 40,466 294,047
Non-recurring Items:
Gathering and
Processing - West
Involuntary
conversion
gain resulting
from Ignacio
fire - (3,266) (6,010) (2,328) (11,604)
Wamsutter
customer
contract
adjustment
included in
equity
earnings (3,065) - - - (3,065)
Gathering and
Processing - Gulf
Discovery
hurricane
repair
expenses up
to
insurance
deductible
(60%) - - 890 2,935 3,825
Hurricane-
related
survey
costs
(60%) - - - 1,188 1,188
NGL Services
Product
imbalance
valuation
adjustment - - - (1,437) (1,437)
Other items:
Gathering and
Processing - Gulf
Impairment
of
Carbonate
Trend
gathering
pipeline - - - 6,187 6,187
--- --- --- ----- -----
Recurring Segment
Profit $66,392 $95,372 $80,366 $47,011 $289,141
======= ======= ======= ======= ========
2009
----
(Thousands,
except per-unit
amounts) 1st Qtr
----------------- -------
Gathering and
Processing - West $38,310
Gathering and
Processing - Gulf 691
NGL Services 4,316
-----
Segment Profit 43,317
Non-recurring Items:
Gathering and
Processing - West
Involuntary
conversion
gain resulting
from Ignacio
fire 966
Wamsutter
customer
contract
adjustment
included in
equity
earnings -
Gathering and
Processing - Gulf
Discovery
hurricane
repair
expenses up
to
insurance
deductible
(60%) -
Hurricane-
related
survey
costs
(60%) -
NGL Services
Product
imbalance
valuation
adjustment -
Other items:
Gathering and
Processing - Gulf
Impairment
of
Carbonate
Trend
gathering
pipeline -
---
Recurring Segment
Profit $44,283
=======
2008
----
(Thousands,
except per-unit
amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D
----------------- ------- ------- ------- ------- -----
Williams Partners L.P.
Reconciliation of Non-GAAP
"Distributable Cash Flow
per Limited Partner
Unit "GAAP "Net income"
Net income $43,629 $71,822 $60,833 $15,105 $191,389
Depreciation,
amortization and
accretion 11,226 11,002 11,735 11,066 45,029
Non-cash
amortization of
debt issuance
costs included
in interest
expense 489 459 459 461 1,868
Involuntary
conversion gain
resulting from
Ignacio fire - (3,266) (6,010) (2,328) (11,604)
Equity earnings (34,815) (46,050) (29,045) 731 (109,179)
Reimbursements
from Williams
under omnibus
agreement 771 865 692 653 2,981
Impairment of
Carbonate Trend
gathering
pipeline - - - 6,187 6,187
Maintenance
capital
expenditures (a) (8,534) (2,497) (5,309) (5,420) (21,760)
------ ------ ------ ------ -------
Distributable
Cash Flow
Excluding Equity
Investments $12,766 $32,335 $33,355 $26,455 $104,911
------- ------- ------- ------- --------
Plus: Wamsutter
cash
distributions to
Williams
Partners L.P. 22,704 26,603 28,989 20,843 99,139
Plus:
Discovery's cash
distributions to
Williams
Partners L.P. 16,800 15,600 13,200 10,800 56,400
------ ------ ------ ------ ------
Distributable
cash flow
attributable to
partnership
operations 52,270 74,538 75,544 58,098 260,450
Distributable
Cash Flow
attributable to
partnership
operations
allocable to
general partner 13,431 24,565 25,067 16,344 79,407
------ ------ ------ ------ ------
Distributable
Cash Flow
attributable to
limited
partnership
operations
allocable to
limited partners $38,839 $49,973 $50,477 $41,754 $181,043
======= ======= ======= ======= ========
Weighted average
number of units
outstanding: 52,774,728 52,774,728 52,775,912 52,777,452 52,775,710
========== ========== ========== ========== ==========
Distributable
Cash Flow
attributable to
partnership
operations per
limited partner
unit: $0.74 $0.95 $0.96 $0.79 $3.44
===== ===== ===== ===== =====
Actual cash
distribution per
unit: $0.6000 $0.6250 $0.6350 $0.6350 $2.4950
Total cash
distributed: $37,922 $40,560 $41,617 $41,617 $161,716
Coverage ratios:
Distributable Cash Flow attributable to partnership operations per limited
partner unit divided by
Actual cash
distribution
per unit: 1.2 1.5 1.5 1.2 1.4
=== === === === ===
Distributable cash flow attributable to partnership operations divided by
Total cash
distributed 1.4 1.8 1.8 1.4 1.6
=== === === === ===
Net income, per
common and
subordinated
unit divided by
Actual cash
distribution per
unit 1.2 1.9 1.6 0.2 1.2
=== === === === ===
Net income
divided by Total
cash distributed 1.2 1.8 1.5 0.4 1.2
=== === === === ===
(a) Maintenance capital expenditures includes certain well connection
capital.
Wamsutter
Reconciliation of Non-GAAP "Distributable Cash Flow" to GAAP "Net income"
Net income $21,194 $37,480 $32,007 $13,083 $103,764
Depreciation,
amortization and
accretion 5,228 5,213 5,295 5,446 21,182
Maintenance
capital
expenditures (3,245) (6,258) (5,867) (6,070) (21,440)
------ ------ ------ ------ -------
Distributable
Cash Flow - 100% $23,177 $36,435 $31,435 $12,459 $103,506
======= ======= ======= ======= ========
Discovery Producer Services
Reconciliation of Non-GAAP "Distributable Cash Flow" to GAAP "Net income"
Net income (loss) $22,701 $14,282 $13,740 $(16,323) 34,400
Depreciation,
amortization and
accretion 6,983 6,802 3,726 3,813 21,324
Maintenance
capital
expenditures (187) (285) (680) (19) (1,171)
---- ---- ---- --- ------
Distributable
Cash Flow - 100% $29,497 $20,799 $16,786 $(12,529) $54,553
======= ======= ======= ======== =======
Distributable
Cash Flow - our
60% interest $17,698 $12,479 $10,072 $(7,517) $32,732
======= ======= ======= ======= =======
2009
----
(Thousands,
except per-unit
amounts) 1st Qtr
----------------- -------
Williams Partners L.P.
Reconciliation of Non-GAAP
"Distributable Cash Flow
per Limited Partner
Unit "GAAP "Net income"
Net income $18,672
Depreciation,
amortization and
accretion 11,184
Non-cash
amortization of
debt issuance
costs included
in interest
expense 460
Involuntary
conversion gain
resulting from
Ignacio fire 966
Equity earnings (12,110)
Reimbursements
from Williams
under omnibus
agreement 327
Impairment of
Carbonate Trend
gathering
pipeline -
Maintenance
capital
expenditures (a) (5,142)
------
Distributable
Cash Flow
Excluding Equity
Investments $14,357
-------
Plus: Wamsutter
cash
distributions to
Williams
Partners L.P. 15,643
Plus:
Discovery's cash
distributions to
Williams
Partners L.P. -
---
Distributable
cash flow
attributable to
partnership
operations 30,000
Distributable
Cash Flow
attributable to
partnership
operations
allocable to
general partner 600
---
Distributable
Cash Flow
attributable to
limited
partnership
operations
allocable to
limited partners $29,400
=======
Weighted average
number of units
outstanding: 52,777,452
==========
Distributable
Cash Flow
attributable to
partnership
operations per
limited partner
unit: $0.56
=====
Actual cash
distribution per
unit: $0.6350
Total cash
distributed: $34,197
Coverage ratios:
Distributable Cash Flow attributable to partnership operations per limited
partner unit divided by
Actual cash
distribution
per unit: 0.9
===
Distributable cash flow attributable to partnership operations divided by
Total cash
distributed 0.9
===
Net income, per
common and
subordinated
unit divided by
Actual cash
distribution per
unit 0.6
===
Net income
divided by Total
cash distributed 0.5
===
(a) Maintenance capital expenditures includes certain well connection
capital.
Wamsutter
Reconciliation of Non-GAAP "Distributable Cash Flow" to GAAP "Net income"
Net income $15,321
Depreciation,
amortization and
accretion 5,447
Maintenance
capital
expenditures (5,437)
------
Distributable
Cash Flow - 100% $15,331
=======
Discovery Producer Services
Reconciliation of Non-GAAP "Distributable Cash Flow" to GAAP "Net income"
Net income (loss) $(5,352)
Depreciation,
amortization and
accretion 3,929
Maintenance
capital
expenditures (70)
---
Distributable
Cash Flow - 100% $(1,493)
=======
Distributable
Cash Flow - our
60% interest $(896)
=====
Consolidated Statements of Income
(UNAUDITED)
2008*
----
(Thousands,
except per-unit
amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D
----------------- ------- ------- ------- ------- -----
Revenues:
Product sales:
Affiliate $78,122 $94,134 $92,421 $49,622 $314,299
Third-party 4,221 9,741 6,430 4,589 24,981
Gathering and processing:
Affiliate 8,790 9,847 9,480 9,776 37,893
Third-party 46,210 49,548 50,721 48,577 195,056
Storage 7,333 7,102 8,264 8,730 31,429
Fractionation 3,292 4,804 5,484 3,861 17,441
Other 2,394 3,069 2,913 7,585 15,961
----- ----- ----- ----- ------
Total revenues 150,362 178,245 175,713 132,740 637,060
Cost and expenses:
Product cost and
shrink replacement:
Affiliate 22,033 27,686 22,358 13,295 85,372
Third-party 30,065 38,323 35,391 16,927 120,706
Operating and
maintenance expense:
Affiliate 23,133 16,548 21,220 15,834 76,735
Third-party 23,951 29,984 29,257 25,974 109,166
Depreciation,
amortization and
accretion 11,226 11,002 11,735 11,066 45,029
General and
administrative expense:
Affiliate 9,876 12,385 10,620 11,184 44,065
Third-party 928 749 664 653 2,994
Taxes other than
income 2,505 2,167 2,314 2,522 9,508
Other, net 333 (2,811) (5,822) 4,777 (3,523)
--- ------ ------ ----- ------
Total costs and
expenses 124,050 136,033 127,737 102,232 490,052
------- ------- ------- ------- -------
Operating income 26,312 42,212 47,976 30,508 147,008
Equity earnings -
Wamsutter 21,194 37,480 20,801 9,063 88,538
Discovery
investment
income (loss) 13,621 8,570 8,244 (8,078) 22,357
Interest expense (17,673) (16,683) (16,437) (16,427) (67,220)
Interest income 175 243 249 39 706
--- --- --- --- ---
Net income $43,629 $71,822 $60,833 $15,105 $191,389
======= ======= ======= ======= ========
Allocation of net income *
Net income $43,629 $71,822 $60,833 $15,105 $191,389
Allocation of
net income
(loss) to
general
partner* 5,981 7,811 7,985 7,180 28,957
----- ----- ----- ----- ------
Allocation of
net income to
limited
partners* 37,648 64,011 52,848 7,925 162,432
Net income, per
common and
subordinated
unit* $0.71 $1.21 $1.00 $0.15 $3.07
Weighted average
number of units
outstanding 52,774,728 52,774,728 52,775,912 52,777,452 52,775,710
2009
----
(Thousands,
except per-unit
amounts) 1st Qtr
----------------- -------
---------
Revenues:
Product sales:
Affiliate $30,872
Third-party 2,291
Gathering and processing:
Affiliate 10,610
Third-party 47,255
Storage 8,361
Fractionation 2,557
Other 3,522
-----
Total revenues 105,468
Cost and expenses:
Product cost and shrink
replacement:
Affiliate 8,866
Third-party 11,296
Operating and maintenance
expense:
Affiliate 11,759
Third-party 28,147
Depreciation,
amortization and
accretion 11,184
General and administrative
expense:
Affiliate 11,587
Third-party 893
Taxes other than
income 2,436
Other, net 1,679
-----
Total costs and
expenses 87,847
------
Operating income 17,621
Equity earnings -
Wamsutter 15,321
Discovery
investment
income (loss) 812
Interest expense (15,116)
Interest income 34
---
Net income $18,672
=======
Allocation of net income *
Net income $18,672
Allocation of
net income
(loss) to
general
partner* (372)
----
Allocation of
net income to
limited
partners* 19,044
Net income, per
common and
subordinated
unit* $0.36
Weighted average
number of units
outstanding 52,777,452
-----------------
* The Net income, per common and subordinated unit for 2008 amounts have
been retrospectively adjusted for EITF Issue No 07-4, "Application of the
Two-Class Method under FASB Statement No. 128, Earnings per Share, to
Master Limited Partnerships." EITF Issue No. 07-4 states, among other
things, that the calculation of earnings per unit should not reflect an
allocation of undistributed earnings to the incentive distribution right
(IDR) holders beyond amounts distributable to IDR holders under the terms
of the partnership agreement. Previously, under generally accepted
accounting principles, we calculated earnings per unit as if all the
earnings for the period had been distributed, which resulted in an
additional allocation of income to the general partner (the IDR holder)
in quarterly periods where an assumed incentive distribution exceeded the
actual distributions Following the adoption of the guidance in EITF
Issue No. 07-4, we no longer calculate assumed incentive distributions.
We adopted EITF Issue No.
Segment Profit & Operating Statistics
(UNAUDITED)
2008
----
(Thousands) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Y-T-D
----------- ------- ------- ------- ------- -----
Gathering and
Processing - West
Segment revenues $132,333 $158,563 $155,217 $114,025 $560,138
Product cost and
shrink replacement 47,446 61,144 53,902 26,700 189,192
Operating and
maintenance
expense 40,893 36,677 42,129 37,014 156,713
Depreciation,
amortization and
accretion 10,299 10,136 10,811 9,969 41,215
Direct general and
administrative
expenses 1,930 2,058 2,188 2,157 8,333
Other, net 2,554 (750) (3,703) 960 (939)
----- ---- ------ --- ----
Segment operating
income 29,211 49,298 49,890 37,225 165,624
Equity earnings 21,194 37,480 20,801 9,063 88,538
------ ------ ------ ----- ------
Segment profit $50,405 $86,778 $70,691 $46,288 $254,162
======= ======= ======= ======= ========
Gathering and
Processing - Gulf
Segment revenues $567 $546 $537 $446 $2,096
Operating and
maintenance
expense 524 519 148 477 1,668
Depreciation and
accretion 153 151 153 294 751
Other, net - - - 6,187 6,187
--- --- --- ----- -----
Segment operating
income (loss) (110) (124) 236 (6,512) (6,510)
Discovery
investment income
(loss) 13,621 8,570 8,244 (8,078) 22,357
------ ----- ----- ------ ------
Segment profit
(loss) $13,511 $8,446 $8,480 $(14,590) $15,847
======= ====== ====== ======== =======
------------
NGL Services
Segment revenues $17,462 $19,136 $19,959 $18,269 $74,826
Product cost 4,652 4,865 3,847 3,522 16,886
Operating and
maintenance
expense 5,667 9,336 8,200 4,317 27,520
Depreciation and
accretion 774 715 771 803 3,063
Direct general and
administrative
expenses 544 700 631 707 2,582
Other, net 284 106 195 152 737
--- --- --- --- ---
Segment profit $5,541 $3,414 $6,315 $8,768 $24,038
====== ====== ====== ====== =======
------------------
Williams Partners:
Conway storage
revenues $7,333 $7,102 $8,264 $8,730 $31,429
Conway
fractionation
volumes (bpd) -
our 50% 33,103 38,173 43,829 40,898 39,019
Carbonate Trend
gathering volumes
(BBtu/d) 24 23 21 19 22
Williams Four Corners:
Gathering volumes
(BBtu/d) 1,316 1,410 1,406 1,388 1,380
Plant inlet
natural gas
volumes (BBtu/d) 547 680 681 673 646
NGL equity sales
(million
gallons) 36 43 43 40 162
NGL margin
($/gallon) $0.74 $0.78 $0.88 $0.57 $0.75
NGL production
(million
gallons) 112 140 134 132 518
Wamsutter - 100%:
Gathering volumes
(BBtu/d) 434 521 506 534 499
Plant inlet
natural gas
volumes (BBtu/d) 404 427 393 413 409
NGL equity sales
(million
gallons) 41 36 30 32 139
NGL margin
($/gallon) $0.58 $0.63 $0.77 $0.40 $0.59
NGL production
(million
gallons) 106 114 97 98 415
Discovery Producer Services - 100%
Plant inlet
natural gas
volumes (BBtu/d) 627 614 378 211 457
Gross processing
margin
($/MMBtu) $0.45 $0.36 $0.48 $- $0.37
NGL equity sales
(million
gallons) 37 23 21 4 85
NGL production
(million
gallons) 70 58 43 10 181
2009
----
(Thousands) 1st Qtr
----------- -------
Gathering and Processing - West
Segment revenues $90,778
Product cost and
shrink replacement 18,461
Operating and
maintenance
expense 33,014
Depreciation,
amortization and
accretion 10,344
Direct general and
administrative
expenses 2,161
Other, net 3,809
-----
Segment operating
income 22,989
Equity earnings 15,321
------
Segment profit $38,310
=======
Gathering and Processing - Gulf
Segment revenues $486
Operating and
maintenance
expense 575
Depreciation and
accretion 32
Other, net -
---
Segment operating
income (loss) (121)
Discovery
investment income
(loss) 812
---
Segment profit
(loss) $691
====
------------
NGL Services
Segment revenues $14,204
Product cost 1,701
Operating and
maintenance
expense 6,317
Depreciation and
accretion 808
Direct general and
administrative
expenses 756
Other, net 306
---
Segment profit $4,316
======
------------------
Williams Partners:
Conway storage
revenues $8,361
Conway
fractionation
volumes (bpd) -
our 50% 36,721
Carbonate Trend
gathering volumes
(BBtu/d) 20
Williams Four Corners:
Gathering volumes
(BBtu/d) 1,355
Plant inlet
natural gas
volumes (BBtu/d) 653
NGL equity sales
(million
gallons) 39
NGL margin ($/gallon) $0.32
NGL production
(million
gallons) 123
Wamsutter - 100%:
Gathering volumes
(BBtu/d) 534
Plant inlet
natural gas
volumes (BBtu/d) 437
NGL equity sales
(million
gallons) 36
NGL margin ($/gallon) $0.25
NGL production
(million
gallons) 105
Discovery Producer Services - 100%
Plant inlet
natural gas
volumes (BBtu/d) 324
Gross processing
margin ($/MMBtu) $0.10
NGL equity sales
(million
gallons) 12
NGL production
(million
gallons) 30
SOURCE Williams Partners L.P.
