DATE: Monday, August 1, 2022

TULSA, Okla. – Williams (NYSE: WMB) today announced its unaudited financial results for the three and six months ended June 30, 2022.

•GAAP net income of $400 million, or $0.33 per diluted share – up 32% vs. 2Q 2021

•Adjusted net income of $484 million, or $0.40 per diluted share (Adjusted EPS) – up 48% vs. 2Q 2021

•Adjusted EBITDA of $1.496 billion – up $179 million or 14% vs. 2Q 2021

•Cash flow from operations (CFFO) of $1.098 billion – up $41 million or 4% vs. 2Q 2021

•Available funds from operations (AFFO) of $1.130 billion – up $211 million or 23% vs. 2Q 2021

•Dividend coverage ratio of 2.19x (AFFO basis)

•Raising 2022 Adjusted EBITDA guidance again with midpoint of $6.25 billion; expect 11% Adjusted EBITDA year-over-year growth in 2022, yielding 7% CAGR over the last five years

•Reached final investment decision on Louisiana Energy Gateway pipeline project to advance wellhead to water strategy

•Completed Gulfstream Phase VI expansion; executing slate of projects on Transco, Northeast G&P and Deepwater Gulf of Mexico

•Strong operational performance with gathering volumes of 17 Bcf/d and transmission volumes of 16.9

Bcf/d – up 13% and 2%, respectively from 2Q 2021

•Closed on acquisition of Trace Midstream gathering assets in Haynesville

•Reached rate case settlement in principle with Northwest Pipeline customers

•Released Sustainability Report showing progress toward Williams' 2030 climate commitment; focus on social and governance issues

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

“Our natural gas focused strategy continues to outperform with second-quarter Adjusted EBITDA up 14 percent over the same period last year due to the strong earnings growth of our core business and also at our JV upstream operations in the Wamsutter and Haynesville supply areas. Record gathering volumes, continued execution of expansion projects, as well as favorable commodity prices drove the quarterly increase. As a result of our core business strength and better-than-planned market fundamentals, we are raising our 2022 EBITDA guidance midpoint to $6.25 billion, which is an 8% increase from our original guidance midpoint of $5.8 billion.

“As we enter the back half of the year, we are executing on a full slate of growth projects in and around our existing infrastructure to move additional natural gas from key supply basins to growing markets for clean-power generation, residential and commercial use. We recently closed on the strategic acquisition of gathering assets from Trace Midstream and reached a final investment decision on the Louisiana Energy Gateway, a 1.8 Bcf/d project to gather Haynesville natural gas into premium markets, including growing LNG export demand along the Gulf Coast.

In addition, we continue to grow our network in the deepwater Gulf of Mexico while advancing multiple gas gathering projects in the Northeast and progressing on expansions along our Transco system.

Armstrong added, “With the strong outlook for global natural gas demand and the growing need for secure and reliable supplies amid geopolitical volatility and climate concerns, Williams is well positioned to create long-term shareholder value. Our latest Sustainability Report, published last week, details the progress we are making on critical ESG-related fronts, including our climate commitment and initiatives focused on building thriving communities, environmental stewardship and workforce diversity. I appreciate our employees for their commitment to sustainable operations and emissions reductions efforts as we leverage our leading infrastructure to deliver the natural gas that is driving the clean energy economy."

•Second-quarter 2022 net income increased by $96 million compared to the prior year reflecting the benefit of higher service revenues from commodity-based rates, the Trace Acquisition and Transco’s Leidy South project being in service, higher commodity margins, and higher results from our upstream operations associated with increased scale of operations, more than offset by a $241 million net unrealized loss on commodity derivatives in 2022, increased intangible asset amortization, and planned higher operating and administrative expenses driven by the increased scale of our upstream operations and higher employee-related costs, including those resulting from the Sequent acquisition. The tax provision benefited from $134 million associated with the release of valuation allowances on deferred income tax assets and federal income tax settlements.

•Year-to-date 2022 net income increased by $50 million compared to the prior year reflecting similar drivers to those described for the quarter, further impacted by the absence of a $77 million favorable impact in 2021 from Winter Storm Uri.

•Cash flow from operations for the second quarter of 2022 increased as compared to 2021 primarily due to higher operating results exclusive of non-cash items, and higher distributions from equity-method investments, partially offset by an unfavorable change in margin deposits associated with commodity

derivatives. Year-to-date cash flow from operations also increased compared to 2021 driven by similar factors, except for a favorable change in margin deposits associated with commodity derivatives.

•Second-quarter 2022 Adjusted EBITDA increased by $179 million over the prior year, driven by the previously described benefits from service revenues, commodity margins, and upstream operations, partially offset by planned higher operating and administrative costs. Year-to-date 2022 Adjusted EBITDA increased by $275 million over the prior year due to similar drivers and also reflecting the absence of the favorable impact in 2021 from Winter Storm Uri.

•Second-quarter 2022 Adjusted Income improved by $157 million over the prior year, driven by the previously described impacts to net income, adjusted primarily to remove the effects of net unrealized losses on commodity derivatives, amortization of certain assets from the Sequent acquisition, and favorable income tax benefits. Year-to-date 2022 Adjusted Income improved by $227 million over the prior year for similar reasons.

•Second-quarter 2022 Available Funds From Operations (AFFO) increased by $211 million compared to the prior year primarily due to higher operating results exclusive of non-cash items and higher distributions from equity-method investments. Year-to-date 2022 AFFO increased by $372 million reflecting similar drivers.

Williams' operations are comprised of the following reportable segments: Transmission & Gulf of Mexico, Northeast G&P, West and Gas & NGL Marketing Services, as well as Other. For more information, see the company's second-quarter 2022 Form 10-Q.

•Second-quarter and year-to-date 2022 Modified and Adjusted EBITDA improved compared to the prior year driven by higher service revenues from Transco’s Leidy South expansion project largely offset by higher operating and administrative costs.

•Second-quarter 2022 Modified and Adjusted EBITDA increased over the prior year driven by higher service revenues, primarily related to higher volumes and gathering rate escalations.

•Both Modified and Adjusted EBITDA also improved for the year-to-date 2022 period, similarly reflecting gathering rate escalations and net increased contributions from equity-investees, partially offset by higher operating and administrative costs.

•Second-quarter and year-to-date 2022 Modified and Adjusted EBITDA increased compared to the prior year benefiting from higher commodity-based rates and higher Haynesville gathering volumes, as well as contributions from Trace Midstream acquired in April.

•Second-quarter 2022 Modified EBITDA declined from the prior year primarily reflecting a $288 million net unrealized loss on commodity derivatives in 2022, which is excluded from Adjusted EBITDA. Both measures were also impacted by higher commodity margins and higher administrative costs associated with the Sequent business acquired in July 2021.

•Year-to-date 2022 Modified EBITDA also declined from the prior year primarily reflecting a $345 million net unrealized loss on commodity derivatives in 2022, which is excluded from Adjusted EBITDA. Both measures were also impacted by higher commodity margins, more than offset by the absence of a $58 million favorable impact in 2021 from Winter Storm Uri and higher administrative costs associated with the Sequent business acquired in July 2021.

•Second-quarter 2022 Modified EBITDA improved compared to the prior year primarily reflecting the increased scale of our upstream operations and a second-quarter 2022 $47 million net unrealized gain on commodity derivatives related to our upstream operations, which is excluded from Adjusted EBITDA.

•Year-to-date 2022 Modified EBITDA also improved compared to the prior year primarily reflecting the increased scale of our upstream operations, partially offset by a $19 million net unrealized loss in 2022 on commodity derivatives related to our upstream operations, which is excluded from Adjusted EBITDA. Both measures were also impacted by the absence of a $22 million favorable impact in 2021 from Winter Storm Uri.

The company now expects 2022 Adjusted EBITDA between $6.1 billion and $6.4 billion, a $450 million midpoint increase from guidance originally issued February 2022. The company continues to expect 2022 growth capital expenditures between $2.25 billion to $2.35 billion, a $1 billion midpoint increase from guidance originally issued February 2022 driven by the strategic acquisition of Trace Midstream assets. The company also continues to expect maintenance capital expenditures between $650 million and $750 million, which includes capital for emissions reduction and modernization initiatives. Importantly, Williams anticipates achieving a leverage ratio (net debt-to-Adjusted EBITDA) midpoint of 3.6x, below the original guidance of 3.8x.

Williams second-quarter 2022 earnings presentation will be posted at www.williams.com. The company’s second-quarter 2022 earnings conference call and webcast with analysts and investors is scheduled for Tuesday, Aug. 2, 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://conferencingportals.com/event/MTgNWtxQ

A webcast link to the conference call is available on Williams' Investor Relations website. A replay of the webcast will be available on the website for at least 90 days following the event.

As the world demands reliable, low-cost, low-carbon energy, Williams (NYSE: WMB) will be there with the best transport, storage and delivery solutions to reliably fuel the clean energy economy. Headquartered in Tulsa, Oklahoma, Williams is an industry-leading, investment grade C-Corp with operations across the natural gas value chain including gathering, processing, interstate transportation, storage, wholesale marketing and trading of natural gas and natural gas liquids. With major positions in top U.S. supply basins, Williams connects the best supplies with the growing demand for clean energy. Williams owns and operates more than 30,000 miles of pipelines system wide – including Transco, the nation’s largest volume and fastest growing pipeline – and handles approximately 30 percent of the natural gas in the United States that is used every day for clean-power generation, heating and industrial use. Learn how the company is leveraging its nationwide footprint to incorporate clean hydrogen, next generation gas and other innovations at www.williams.com.

This news release and accompanying materials may include certain financial measures – adjusted EBITDA, adjusted income (“earnings”), adjusted earnings per share, available funds from operations and dividend coverage ratio – that are non-GAAP financial measures as defined under the rules of the SEC.

Our segment performance measure, modified EBITDA, is defined as net income (loss) before income (loss) from discontinued operations, income tax expense, net interest expense, equity earnings from equity-method investments, other net investing income, impairments of equity investments and goodwill, depreciation and amortization expense, and accretion expense associated with asset retirement obligations for nonregulated operations. We also add our proportional ownership share (based on ownership interest) of modified EBITDA of equity-method investments.

Adjusted EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations. Such items are excluded from net income to determine adjusted income and adjusted earnings per share. Management believes this measure provides investors meaningful insight into results from ongoing operations.

Available funds from operations is defined as cash flow from operations excluding the effect of changes in working capital and certain other changes in noncurrent assets and liabilities, reduced by preferred dividends and net distributions to noncontrolling interests.

This news 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 assets and the cash that the business is generating.

Neither adjusted EBITDA, adjusted income, nor available funds from operations are intended to represent cash flows for the period, nor are they presented as an alternative to net income or cash flow from operations. 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.

Reconciliation of "Net Income (Loss)" to “Modified EBITDA” and Non-GAAP “Adjusted EBITDA”
(UNAUDITED)
			2021																		2022
(Dollars in millions)			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			Year						1st Qtr			2nd Qtr									Year
Net income (loss)			$	435		$	322		$	173		$	632		$	1,562					$	392		$	407								$	799
Provision (benefit) for income taxes			141			119			53			198			511						118			(45)									73
Interest expense			294			298			292			295			1,179						286			281									567
Equity (earnings) losses			(131)			(135)			(157)			(185)			(608)						(136)			(163)									(299)
Other investing (income) loss - net			(2)			(2)			(2)			(1)			(7)						(1)			(2)									(3)
Proportional Modified EBITDA of equity-method investments			225			230			247			268			970						225			250									475
Depreciation and amortization expenses			438			463			487			454			1,842						498			506									1,004
Accretion expense associated with asset retirement obligations for nonregulated operations			10			11			12			12			45						11			13									24
Modified EBITDA			$	1,410		$	1,306		$	1,105		$	1,673		$	5,494					$	1,393		$	1,247								$	2,640
Transmission & Gulf of Mexico			$	660		$	646		$	630		$	685		$	2,621					$	697		$	652								$	1,349
Northeast G&P			402			409			442			459			1,712						418			450									868
West			222			223			257			259			961						260			288									548
Gas & NGL Marketing Services			93			8			(262)			183			22						13			(282)									(269)
Other			33			20			38			87			178						5			139									144
Total Modified EBITDA			$	1,410		$	1,306		$	1,105		$	1,673		$	5,494					$	1,393		$	1,247								$	2,640
Adjustments (1):
Transmission & Gulf of Mexico			$	—		$	2		$	—		$	—		$	2					$	—		$	—								$	—
West			—			—			—			—			—						—			8									8
Gas & NGL Marketing Services(2)			—			—			296			(172)			124						52			288									340
Other			5			9			19			(18)			15						66			(47)									19
Total Adjustments			$	5		$	11		$	315		$	(190)		$	141					$	118		$	249								$	367
Adjusted EBITDA:
Transmission & Gulf of Mexico			$	660		$	648		$	630		$	685		$	2,623					$	697		$	652								$	1,349
Northeast G&P			402			409			442			459			1,712						418			450									868
West			222			223			257			259			961						260			296									556
Gas & NGL Marketing Services			93			8			34			11			146						65			6									71
Other			38			29			57			69			193						71			92									163
Total Adjusted EBITDA			$	1,415		$	1,317		$	1,420		$	1,483		$	5,635					$	1,511		$	1,496								$	3,007
(1) Adjustments by segment are detailed in the "Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income," which is also included in these materials.
(2) 2022 Adjustments for Gas & NGL Marketing Services includes the impact of volatility on NGL linefill transactions. Had this adjustment been made in 2021, Adjusted EBITDA would have been reduced by ($15), ($5), ($15), $1, and ($34) for the 1st, 2nd, 3rd, and 4th quarters, and full year period, respectively.