DATE: Monday, Feb. 20, 2023

TULSA, Okla. – Williams (NYSE: WMB) today announced its unaudited financial results for the three and 12 months ended Dec. 31, 2022.

•GAAP net income of $2.046 billion, or $1.67 per diluted share (EPS) – up 35% vs. 2021

•Adjusted net income of $2.228 billion, or $1.82 per diluted share (Adjusted EPS) – up 34% vs. 2021

•Adjusted EBITDA of $6.418 billion – up $783 million or 14% vs. 2021

•Cash flow from operations (CFFO) of $4.889 billion – up $944 million or 24% vs. 2021

•Available funds from operations (AFFO) of $4.918 billion – up $845 million or 21% vs. 2021

•Dividend coverage ratio of 2.37x (AFFO basis)

•Record gathering volumes of 16.5 Bcf/d and contracted transmission capacity of 24.4 Bcf/d – up 9% and 3%, respectively, from 2021

•Expect 3% growth in 2023 with Adjusted EBITDA guidance midpoint of $6.6 billion, yielding 7% CAGR over the last five years

•Ended the year with 3.55x leverage ratio

•GAAP net income of $668 million, or $0.55 per diluted share

•Adjusted net income of $653 million, or $0.53 per diluted share (Adjusted EPS) – up 37% and 36%, respectively, vs. 4Q 2021

•Adjusted EBITDA of $1.774 billion – up $291 million or 20% vs. 4Q 2021

•CFFO of $1.219 billion – up 7% vs. 4Q 2021

•AFFO of $1.357 billion – up 30% vs. 4Q 2021

•Dividend coverage ratio of 2.62x (AFFO basis)

•Received FERC certificate and key permits for the Regional Energy Access expansion project which will provide the Northeast with greater access to clean, cost-effective natural gas

•Completed three strategic acquisitions: NorTex Midstream, Trace Midstream’s Haynesville assets and MountainWest at attractive valuations

•Advanced LNG capabilities with wellhead-to-water strategy and full-value chain NextGen Gas program

•Secured additional commitments on the Louisiana Energy Gateway project which connects Haynesville production to growing Gulf Coast LNG markets

•Continued execution of incremental growth projects on Transco, Northeast G&P, Haynesville and Deepwater Gulf of Mexico

•Outpaced midstream industry across key sustainability rankings including the 2022 CDP Climate Change Questionnaire and S&P Global ESG Score

•Named for the third consecutive year to the DJSI North American index and for the second consecutive year to the DJSI World index

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

“Williams finished the year strong with 20% Adjusted EBITDA growth in the fourth quarter, driven by our core business, upstream JVs and commodity marketing segment. Our natural gas-focused strategy once again resulted in record performance in 2022 with contracted transmission capacity, gathering volumes and Adjusted EBITDA all surpassing previous highs. Despite macroeconomic impacts of inflation, higher interest rates and recession risks, Williams delivered outstanding results that exceeded our financial guidance, even after we raised it twice during the year.

“In addition to the outstanding financial results in 2022, we also reached agreements on three acquisitions that bolster our ability to deliver growth through a variety of macroeconomic conditions. We significantly expanded our footprint with the strategic acquisitions of NorTex Midstream and Trace Midstream’s Haynesville assets, a key link in our Gulf Coast wellhead-to-water strategy. And just last week, we closed on our acquisition of MountainWest, enhancing our asset footprint in the western U.S. and growing our fully contracted demand based services. These investments along with our slate of high-return growth opportunities along our existing infrastructure give us a clear path to significant growth for years to come.”

Armstrong added, “Looking ahead, Williams will continue to set the pace for sustainable midstream companies by driving best-in-class emissions performance across the entire value chain. Natural gas is one of the most important tools available to reduce emissions on a global scale, and the build out of electrification and renewables will require our infrastructure and deep expertise in reliable energy delivery, resulting in continued earnings growth for Williams and long-term value creation for our shareholders.”

Williams Summary Financial Information			4Q									Full Year
Amounts in millions, except ratios and per-share amounts. Per share amounts are reported on a diluted basis. Net income amounts are from continuing operations attributable to The Williams Companies, Inc. available to common stockholders.			2022			2021						2022			2021
GAAP Measures
Net Income			$668			$621						$2,046			$1,514
Net Income Per Share			$0.55			$0.51						$1.67			$1.24
Cash Flow From Operations			$1,219			$1,139						$4,889			$3,945
Non-GAAP Measures (1)
Adjusted EBITDA			$1,774			$1,483						$6,418			$5,635
Adjusted Net Income			$653			$476						$2,228			$1,658
Adjusted Earnings Per Share			$0.53			$0.39						$1.82			$1.36
Available Funds from Operations			$1,357			$1,045						$4,918			$4,073
Dividend Coverage Ratio			2.62		x	2.10		x				2.37		x	2.04		x
Other
Debt-to-Adjusted EBITDA at Quarter End (2)			3.55		x	3.90		x
Capital Investments (3) (4) (5)			$876			$371						$2,147			$1,577
(1) Schedules reconciling Adjusted Net Income, Adjusted EBITDA, Available Funds from Operations and Dividend Coverage Ratio (non-GAAP measures) to the most comparable GAAP measure are available at www.williams.com and as an attachment to this news release.
(2) Does not represent leverage ratios measured for WMB credit agreement compliance or leverage ratios as calculated by the major credit ratings agencies. Debt is net of cash on hand, and Adjusted EBITDA reflects the sum of the last four quarters.
(3) Capital Investments includes increases to property, plant, and equipment (growth & maintenance capital), purchases of businesses, net of cash acquired, purchases of and contributions to equity-method investments and purchases of other long-term investments.
(4) Full-year 2022 excludes $933 million for purchase of the Trace Midstream Haynesville gathering assets, which closed April 29, 2022.
(5) Full-year 2022 excludes $424 million for purchase of the NorTex Midstream assets, which closed August 31, 2022.

Fourth-quarter 2022 net income increased by $47 million compared to the prior year reflecting the benefit of higher service revenues driven by increased Haynesville gathering volumes including the Trace Acquisition, as well as higher commodity margins, which included unfavorable write-downs of inventory to lower period-end market prices, and increased results from our upstream operations. These improvements were partially offset by an unfavorable change of $128 million in net unrealized gains/losses on commodity derivatives, higher operating expenses, including higher employee-related costs, and increased intangible asset amortization. The tax provision increased primarily due to higher pretax income.

Full-year 2022 net income increased by $532 million compared to the prior year reflecting the benefit of higher service revenues as described above and also reflecting higher commodity-based rates and Transco’s Leidy South project being in service, higher results from our upstream operations, and higher commodity margins, which include unfavorable write-downs of inventory to lower period-end market prices. These improvements were partially offset by higher operating and administrative expenses driven by the increased scale of our upstream operations and higher employee-related costs, including costs from the Sequent acquisition for the full 2022 period, increased intangible asset amortization, an unfavorable change of $140 million in net unrealized gains and losses on commodity derivatives and the absence of a $77 million favorable impact in 2021 from Winter Storm Uri. The tax provision changed favorably as the impact of higher pretax income was more than offset by $134 million associated with the release of valuation allowances on deferred income tax assets and federal income tax settlements in the second quarter and the net benefit from a lower estimated state deferred income tax rate in the third quarter.

Cash flow from operations for the fourth quarter of 2022 increased as compared to 2021 primarily due to higher operating results exclusive of non-cash items partially offset by unfavorable net changes in working capital. Full-year 2022 cash flow from operations also increased compared to 2021 driven by higher operating results exclusive of non-cash items, favorable changes in margin deposits associated with commodity derivatives, and higher distributions from equity-method investments, partially offset by unfavorable net changes in working capital.

Fourth-quarter 2022 Adjusted EBITDA increased by $291 million over the prior year, driven by the previously described benefits from service revenues, commodity margins, and upstream operations, partially offset by higher operating costs. Full-year 2022 Adjusted EBITDA increased by $783 million over the prior year due to similar drivers, but also reflecting higher administrative costs and the absence of the favorable impact in 2021 from Winter Storm Uri.

Fourth-quarter 2022 Adjusted Income improved by $177 million over the prior year, driven by the previously described impacts to net income, adjusted primarily to remove the effects of net unrealized gains/losses on commodity derivatives and amortization of certain assets from the Sequent acquisition. Full-year 2022 Adjusted Income improved by $570 million over the prior year driven by the previously described impacts to net income, adjusted primarily to remove the effects of net unrealized gains/losses on commodity derivatives, amortization of certain assets from the Sequent acquisition, and favorable income tax benefits.

Fourth-quarter 2022 Available Funds From Operations (AFFO) increased by $312 million compared to the prior year primarily due to higher operating results exclusive of non-cash items. Full-year 2022 AFFO increased by $845 million reflecting higher operating results exclusive of non-cash items and higher distributions from equity-method investments.

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 2022 Form 10-K.

Fourth-quarter 2022 Modified and Adjusted EBITDA improved compared to the prior year driven by higher service revenues from the NorTex acquisition, partially offset by higher operating and administrative costs. Year-to-date 2022 Modified and Adjusted EBITDA improved compared to the prior year driven by higher service revenues reflecting Transco’s Leidy South project going in service and the NorTex acquisition, as well as the absence of hurricane related impacts, partially offset by higher operating and administrative costs. Modified EBITDA for the 2022 periods was further impacted by certain regulatory, abandonment, and monitoring charges which are excluded from Adjusted EBITDA.

Fourth-quarter 2022 Modified and Adjusted EBITDA increased over the prior year driven by higher service revenues from Ohio Valley Midstream, partially offset by lower contributions from equity-investees reflecting lower cost-of-service rates, lower commodity-based rates, lower volumes and impact from winter weather.

Both Modified and Adjusted EBITDA also improved for the full-year 2022 period, driven by Ohio Valley Midstream and gathering rate increases, partially offset by lower Susquehanna volumes, higher operating and administrative costs, lower net equity-investee contributions reflecting lower cost-of-service rates partially offset by higher commodity-based rates, lower volumes and impact from winter weather.

Fourth-quarter and full-year 2022 Modified and Adjusted EBITDA increased compared to the prior year benefiting from higher Haynesville gathering volumes including contributions from Trace Midstream acquired in April as well as higher net realized commodity-based rates, partially offset by winter weather impact in the Wamsutter and Rocky Mountain Midstream joint venture as well as higher operating and administrative costs.

Fourth-quarter 2022 Modified EBITDA improved from the prior year primarily reflecting higher commodity margins which included higher write-downs of inventory to lower period-end market prices, partially offset by a $122 million net unfavorable change in unrealized gains/losses on commodity derivatives, which is excluded from Adjusted EBITDA.

Full-year 2022 Modified EBITDA declined from the prior year primarily reflecting a $168 million net unfavorable change in unrealized loss on commodity derivatives, which is excluded from Adjusted EBITDA, as well as 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. These decreases were partially offset by higher commodity margins which included higher write-downs of inventory to lower period-end market prices.

Fourth-quarter 2022 Modified and Adjusted EBITDA improved compared to the prior year primarily reflecting higher volumes from our upstream operations in the Haynesville Shale, partially offset by winter weather impact in the Wamsutter.

Full-year 2022 Modified EBITDA also improved compared to the prior year primarily reflecting higher prices and volumes from our upstream operations and a $25 million net favorable change in unrealized gain/loss on commodity derivatives related to our upstream operations, which is excluded from Adjusted EBITDA. Both measures were also impacted by higher operating expenses and the absence of a $22 million favorable impact in 2021 from Winter Storm Uri. The full-year results were partially offset by winter weather impact in the Wamsutter.

The company expects 2023 Adjusted EBITDA between $6.4 billion and $6.8 billion. The company also expects 2023 growth capex between $1.4 billion to $1.7 billion and maintenance capex between $750 million and $850 million, which includes capital of $250 million for emissions reduction and modernization initiatives. Importantly, Williams anticipates a leverage ratio midpoint of 3.65x, which will allow it to retain financial flexibility. The dividend has been increased by 5.3% on an annualized basis to $1.79 in 2023 from $1.70 in 2022.

Williams is hosting its 2023 Analyst Day event on Tuesday, Feb. 21, 2023 beginning at 8:30 a.m. Eastern Time (7:30 a.m. Central Time). In addition to discussing 2022 results, Williams' management will give in-depth presentations covering the company's natural gas infrastructure strategy to meet growing clean energy demands. These presentations will highlight the company’s efficient operations, disciplined project execution, strong financial position and 2023 financial guidance. Presentation slides and earnings materials will be accessible on the Williams’ Investor Relations website shortly.

Participants who wish to view the live presentation can access the webcast here: https://app.webinar.net/wAoX6Qm6lRx.

A replay of the 2023 Analyst Day webcast will also 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 32,000 miles of pipelines system wide – including Transco, the nation’s largest volume and fastest growing pipeline – and handles approximately one third 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, NextGen 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			3rd Qtr			4th Qtr			Year
Net income (loss)			$	435		$	322		$	173		$	632		$	1,562					$	392		$	407		$	621		$	697		$	2,117
Provision (benefit) for income taxes			141			119			53			198			511						118			(45)			96			256			425
Interest expense			294			298			292			295			1,179						286			281			291			289			1,147
Equity (earnings) losses			(131)			(135)			(157)			(185)			(608)						(136)			(163)			(193)			(145)			(637)
Other investing (income) loss - net			(2)			(2)			(2)			(1)			(7)						(1)			(2)			(1)			(12)			(16)
Proportional Modified EBITDA of equity-method investments			225			230			247			268			970						225			250			273			231			979
Depreciation and amortization expenses			438			463			487			454			1,842						498			506			500			505			2,009
Accretion expense associated with asset retirement obligations for nonregulated operations			10			11			12			12			45						11			13			12			15			51
Modified EBITDA			$	1,410		$	1,306		$	1,105		$	1,673		$	5,494					$	1,393		$	1,247		$	1,599		$	1,836		$	6,075
Transmission & Gulf of Mexico			$	660		$	646		$	630		$	685		$	2,621					$	697		$	652		$	638		$	687		$	2,674
Northeast G&P			402			409			442			459			1,712						418			450			464			464			1,796
West			222			223			257			259			961						260			288			337			326			1,211
Gas & NGL Marketing Services			93			8			(262)			183			22						13			(282)			20			209			(40)
Other			33			20			38			87			178						5			139			140			150			434
Total Modified EBITDA			$	1,410		$	1,306		$	1,105		$	1,673		$	5,494					$	1,393		$	1,247		$	1,599		$	1,836		$	6,075
Adjustments (1):
Transmission & Gulf of Mexico			$	—		$	2		$	—		$	—		$	2					$	—		$	—		$	33		$	13		$	46
West			—			—			—			—			—						—			8			—			—			8
Gas & NGL Marketing Services(2)			—			—			296			(172)			124						52			288			18			(60)			298
Other			5			9			19			(18)			15						66			(47)			(13)			(15)			(9)
Total Adjustments			$	5		$	11		$	315		$	(190)		$	141					$	118		$	249		$	38		$	(62)		$	343
Adjusted EBITDA:
Transmission & Gulf of Mexico			$	660		$	648		$	630		$	685		$	2,623					$	697		$	652		$	671		$	700		$	2,720
Northeast G&P			402			409			442			459			1,712						418			450			464			464			1,796
West			222			223			257			259			961						260			296			337			326			1,219
Gas & NGL Marketing Services			93			8			34			11			146						65			6			38			149			258
Other			38			29			57			69			193						71			92			127			135			425
Total Adjusted EBITDA			$	1,415		$	1,317		$	1,420		$	1,483		$	5,635					$	1,511		$	1,496		$	1,637		$	1,774		$	6,418
(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.