OREANDA-NEWS. Williams (NYSE: WMB) announced unaudited third-quarter 2013 net income attributable to Williams of USD 141 million, or USD 0.20 per share on a diluted basis, compared with net income of USD 155 million, or USD 0.25 per share on a diluted basis for third-quarter 2012.

The decrease in third-quarter 2013 net income was primarily due to lower olefin margins from lost production at Williams Partners' Geismar olefins plant. An increase in fee-based revenues at Williams Partners more than offset a decrease in natural gas liquids (NGL) margins driven by continued ethane rejection. Lower costs and initial insurance recoveries related to the Geismar incident also partially offset these negative impacts during the third quarter.

For the first nine months of 2013, Williams reported net income of USD 444 million, or USD 0.65 per share on a diluted basis, compared with net income of USD 710 million, or USD 1.15 per share, for the same time period in 2012.

The decline in net income for the first nine months of 2013 was primarily due to lower NGL margins at Williams Partners driven by ethane rejection, as well as the absence of USD 207 million of income in first-quarter 2012 associated with the sale of certain of the company's former Venezuela operations, of which USD 144 million was recorded within discontinued operations.

Adjusted Income from Continuing Operations

Adjusted income from continuing operations for third-quarter 2013 was USD 130 million, or USD 0.19 per share, compared with USD 161 million, or USD 0.25 per share for third-quarter 2012. Year-to-date through Sept. 30, adjusted income from continuing operations was USD 411 million, or USD 0.60 per share, compared with USD 535 million, or USD 0.86 per share.

During the third quarter and the first nine months of 2013, lower NGL margins at Williams Partners, including the effects of system-wide ethane rejection, drove the decline in adjusted income from continuing operations. Operating costs increased related to growth in businesses acquired in 2012. Lower olefins margins at Williams Partners also impacted adjusted results for the third quarter. These were partially offset by higher fee-based revenues.

Adjusted income from continuing operations reflects the removal of items considered unrepresentative of ongoing operations and is a non-GAAP measure. A reconciliation to the most relevant GAAP measure is attached to this news release.

CEO Comment

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

"Williams performed well in the third quarter. Growth in Williams Partners' fee-based business, along with our continued focus on cost control, more than offset the decline in NGL margins; however, the downtime at the Geismar plant negatively impacted our results.

"Given our diverse foothold in the energy infrastructure space, our large-scale fee-based assets and the tremendous development opportunities we're pursuing, we expect strong cash flow growth from Williams Partners and Access Midstream Partners to drive 20 percent annual cash dividend growth for the company through 2015.

"We remain keenly focused on executing a multi-billion dollar growth program over the next several years to further expand our capabilities and connections from supply areas in the Gulf of Mexico, the Mid-Continent, Canada and Northeast U.S. to growing demand centers throughout the eastern seaboard and southeast to the Gulf Coast petrochemical complex, as well as overseas to growing LPG markets."

Business Segment Results

Williams' business segments for financial reporting are Williams Partners, Williams NGL & Petchem Services, Access Midstream Partners, and Other.

The Williams Partners segment includes the consolidated results of Williams Partners L.P. (NYSE:WPZ); Williams NGL & Petchem Services includes the results of Williams' Canadian midstream businesses; and Access Midstream Partners includes the company's equity earnings from its 50-percent interest in privately held Access Midstream Partners GP, L.L.C. and an approximate 23-percent limited-partner interest in Access Midstream Partners, L.P. (NYSE: ACMP). Prior period segment results have been recast to reflect Williams Partners' acquisition of Williams' Gulf Olefins business, which was completed in November 2012.
Williams Partners

Williams Partners is focused on natural gas transportation, gathering, treating, processing and storage; natural gas liquids fractionation; olefins production; and oil transportation.

For third-quarter 2013, Williams Partners reported segment profit of USD 405 million, compared with USD 429 million for third-quarter 2012.

The decrease in Williams Partners' segment profit during third-quarter 2013 was primarily due to USD 77 million lower olefin margins from lost production at the Geismar olefins plant as well as USD 49 million lower NGL margins driven by continued ethane rejection. The decrease was offset by a USD 61 million increase in transportation, gathering and processing fee revenues as well as lower costs in the quarter. Third-quarter 2013 also benefited from USD 50 million of income associated with initial insurance recoveries related to the Geismar incident.

For Williams Partners' adjusted segment profit, USD 35 million of the USD 50 million of insurance recoveries recognized for GAAP accounting has been removed, leaving USD 15 million, which represents the amount of the actual business interruption claim that has been submitted for the third quarter. The remaining USD 35 million will be included in adjusted segment profit during future periods.

Year-to-date through Sept. 30, Williams Partners reported USD 1.26 billion in segment profit, compared with USD 1.37 billion for the same period in 2012.

The year-to-date 2013 decline in Williams Partners' segment profit was primarily due to USD 254 million (or 42 percent) lower NGL margins driven by ethane rejection, Geismar olefins plant downtime and higher operating costs associated with businesses acquired in 2012. The decline was partially offset by USD 151 million higher transportation and gathering and processing revenues.

There is a more detailed description of Williams Partners' business results in the partnership's third-quarter 2013 financial results news release, also issued today.