Big quarter for Williams Cos.

What a quarter for Williams Cos.

Sixty-percent increase in net income, 5% gain in adjusted net income, 24% increase in cash flow and an increased dividend.

Results for the quarter that ended Dec. 31, 2023 were released early Wednesday showing net income of $3.273 billion or $2.68 per share, an increase of 22% compared to a year earlier. Adjusted net income was $2.334 billion or $1.91 per share, or 5% more than the quarter in 2022.

Adjusted EBITDA totaled $6.779 billion, or $361 million or 6% more than the previous year. The amount of available funds from operations totaled $5.213 billion, a gain of $295 million or 6% more than a year earlier.

Fourth-quarter 2023 net income increased by $478 million compared to the prior year driven by a $534 million gain related to the net cash received from the favorable resolution of litigation with Energy Transfer.

“We expect this strong performance to continue in 2024 and have set our Adjusted EBITDA guidance midpoint at $6.95 billion, paving the way for what we anticipate will be a breakout year in 2025 as several large fee-based projects come online,” said CEO Alan Armstrong.

He pointed out how the company’s natural gas-focused strategy delivered excellent financial results combined with acquisition of strategic natural gas transmission, gathering and storage assets in the Rockies and on the Gulf Coast.

” We also continue to expand our existing infrastructure with 18 high-return projects in execution, including approximately 3.1 Bcf/d of expansions on Transco coming online over the next few years. ”

Armstrong outlined some of the accomplishments in the past several months.

• Pre-filed FERC application for Transco’s 1.6 Bcf/d Southeast Supply Enhancement 1Q 2024
• Received FERC certificates for Transco’s Commonwealth Energy Connectors, Southside Reliability Enhancement, Southeast Energy Connector and Texas to Louisiana Energy Pathway
• Placed Transco’s Carolina Market Link in service in 1Q 2024
• Placed phase one of Transco’s Regional Energy Access expansion in service in 4Q 2023 ahead of schedule with remainder expected by 4Q 2024
• Completed Cardinal and Susquehanna gathering & processing expansions in 4Q 2023
• Acquired 115-Bcf natural gas storage portfolio, positioning Williams as the largest storage owner on the Gulf Coast as storage spreads and natural gas volatility continue to expand
• Optimized DJ Basin position with transactions to enhance natural gas and NGL value chain
• Added more than 8 Bcf/d of transmission capacity and 56 Bcf of gas storage with MountainWest acquisition in the Rockies serving western markets

As for financial guidance, the company expects 2024 Adjusted EBITDA between $6.8 billion and $7.1 billion. The company also expects 2024 growth capex between $1.45 billion and $1.75 billion and maintenance capex between $1.1 billion and $1.3 billion, which includes capital of $350 million based on midpoint for emissions reduction and modernization initiatives.

For 2025, the company expects Adjusted EBITDA between $7.2 billion and $7.6 billion with growth capex between $1.65 billion and $1.95 billion and maintenance capex between $750 million and $850 million, which includes capital of $100 million based on midpoint for emissions reduction and modernization initiatives. Williams anticipates a leverage ratio midpoint for 2024 of 3.85x and has increased the dividend by 6.1% on an annualized basis to $1.90 in 2024 from $1.79 in 2023.

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