WMB Williams Companies 10-Q 2026-09-30 section summaries

Williams Companies (WMB) — Part I, Item 1

Consolidated results

Q3 revenue grew 10.3%; 9M revenue grew 6.3%. Commodity-related accounting materially affects reported revenue: 9M commodity derivative results were a $265 million net loss, compared with a $32 million net gain in 2025. Williams says unrealized derivative results generally offset changes in the economic value of underlying contracts, which are recognized later. Q3 G&A increased to $275 million from $168 million. Asset-sale gains were $83 million in Q3 and $277 million in 9M, versus none in 2025.

Segment performance

Modified EBITDA is management’s segment profit measure. Segment revenue excludes “Other” and eliminations, which reconcile reportable-segment revenue to consolidated revenue.

*9M values shown where growth differed from Q3 by at least three percentage points. Reportable-segment 9M Modified EBITDA was $5.994 billion versus $5.455 billion.

West and Gas & NGL Marketing Services revenue growth accelerated in Q3 relative to 9M; Northeast G&P growth also improved. West Modified EBITDA included an $83 million asset-sale gain. Gas & NGL Marketing Services Modified EBITDA fell despite higher revenue; its segment derivative results were a $29 million Q3 gain versus $33 million, and a $200 million 9M loss versus a $9 million loss.

Cash flow and balance sheet

Capital expenditures rose substantially, alongside $2.816 billion spent on acquisitions. Williams issued $5.538 billion of long-term debt and repaid $1.137 billion; it also received $3.737 billion from selling a partial interest in a consolidated subsidiary. Common shares outstanding increased from approximately 1,222 million at year-end 2025 to 1,251 million at September 30, 2026. Williams issued $2.020 billion of common stock as noncash acquisition consideration.

Acquisitions, investment and financing

On September 3, Williams acquired all of M6 Midstream (Momentum) for approximately $5.1 billion in cash and stock, including approximately 27 million Williams shares. The cash purchase price net of acquired cash was $2.8 billion, and Williams retained $869 million principal amount of NG3 debt. The preliminary allocation included $5.763 billion of PP&E and $490 million of intangibles; valuations remain subject to revision. From closing through quarter-end, Momentum contributed $113 million revenue and $40 million Modified EBITDA. Pro forma 9M revenue and attributable net income were $10.599 billion and $2.462 billion, versus $9.815 billion and $1.891 billion in 2025; these figures exclude synergies and implementation costs.

Williams sold a 49% noncontrolling interest in Pantheon, which owns five power projects, for $5.34 billion of committed capital while retaining control. An additional $1 billion was received in October, with remaining capital expected through Q1 2027 for construction. Williams’ construction and PP&E acquisition commitments totaled approximately $5.9 billion. Nine-month additions to long-lived segment assets were $10.327 billion versus $2.910 billion, principally in Transmission, Power & Gulf and West.

Williams’ $3.75 billion revolving facility and $1.0 billion 364-day facility were undrawn. Its debt/EBITDA covenant is generally capped at 5.0x, temporarily 5.5x following qualifying acquisitions; Transco and NWP each have a 65% debt-to-capitalization limit. Williams expected covenant compliance.

Contracted revenue, risks and other developments

Remaining performance obligations were $32.541 billion, including $21.030 billion for Transco and $4.008 billion for NWP, primarily reflecting pipeline capacity, storage and midstream commitments. The amounts exclude variable consideration and unexercised renewals.

Williams identified potential impairment risk if asset monetizations, weaker producer activity or other changes undermine assumptions supporting certain PP&E and intangibles, though management currently considers the assets recoverable. NWP’s Washington Climate Commitment Act regulatory assets rose to $89 million from $72 million; the state’s declining emissions cap may increase allowance costs. Total environmental liabilities were $38 million. Transco refunded a net $221 million following its rate-case settlement, effective March 1, 2026.

In 2026, Williams recognized gains of $127 million on the sale of a Permian equity-method investment and $182 million and $12 million on the South Mansfield sale in Q1 and Q2, respectively. The company also sold Permian gathering assets for $139 million, generating an $83 million Q3 gain.

Williams — MD&A (Q3 and nine months ended September 30, 2026)

Business and consolidated results

Williams operates U.S. natural-gas infrastructure. Interstate pipeline revenues are relatively insulated from near-term commodity-price and transportation-volume changes because firm-capacity reservation charges recover most costs; pipeline rates and facilities are FERC-regulated.

Consolidated results ($ millions):

Nine-month Williams-attributable net income increased $508 million. Higher operating income drove improvement, while derivative results were volatile. Asset-sale gains included the Permian gathering-asset sale in Q3 and South Mansfield and Permian sales year to date. Higher employee, operating, incentive-compensation and acquisition-related costs contributed to expense increases. Interest expense rose with debt issued and retained in the Momentum acquisition, partly offset by retirements and increased capitalized interest. Higher AFUDC contributed to other income; higher nine-month taxes primarily reflected higher pretax income.

Segment performance

Segment profit is Modified EBITDA, a non-GAAP measure. Amounts are $ millions. Nine-month figures are included where the growth rate differed materially from Q3, or where the segment information provided is year-to-date only.

Transmission, Power & Gulf growth reflected expansion projects, higher Gulf Coast storage rates and Socrates South power revenue; higher operating and administrative costs partly offset gains. Northeast G&P benefited from higher JV volumes and equity-method contributions, while lower commodity margins year to date followed expiration of a restructured gas-purchase agreement in 2025. West benefited from Momentum, Louisiana Energy Gateway and increased Haynesville activity; the Q3 Permian sale gain also boosted EBITDA. In Gas & NGL Marketing Services, Q3 EBITDA declined on less favorable unrealized derivative results. Nine-month commodity margin rose to $269 million from $181 million, including $68 million higher natural-gas margins (of which $62 million came from transportation-capacity marketing) and $20 million higher NGL margins; equity-method investment EBITDA increased to $45 million from $27 million, partly reflecting Cogentrix. Other’s nine-month EBITDA benefited from a $194 million South Mansfield sale gain.

For the nine months, Transco revenue was $2,491 million versus $2,405 million, operating income $1,286 million versus $1,244 million, and net income $1,120 million versus $1,045 million. NWP revenue was $357 million versus $338 million, operating income $154 million versus $145 million, and net income $152 million versus $135 million. Transco growth included new projects and higher storage rates; NWP benefited from rate increases and new firm-transportation contracts.

Cash flow, investment and financing

Higher operating income (excluding noncash items) and equity-investee distributions supported operating cash flow, partly offset by unfavorable working capital, including Transco rate-refund payments, and margin requirements. Other significant cash flows included $3,737 million of Pantheon-sale proceeds, $2,816 million of business purchases net of cash acquired, $324 million of net dispositions and $187 million of business-sale proceeds.

At September 30, long-term debt was $31.7 billion due after one year and $2.2 billion due within one year; Williams had a $1.6 billion working-capital deficit and $6.506 billion of available liquidity. Liquidity comprised $1.756 billion of cash, $3.750 billion of available Williams Credit Agreement capacity net of commercial-paper capacity, and $1.000 billion under a new 364-day facility. Williams issued $5.538 billion of long-term debt and repaid $1.137 billion during the nine months; no commercial paper was outstanding at quarter-end. The Credit Agreement was extended to 2031. Ratings remained investment grade (S&P BBB+, Moody’s Baa2, Fitch BBB); a downgrade could increase borrowing costs and, below investment grade, require collateral.

Transactions, outlook and risks

Williams closed the approximately $5.1 billion Momentum acquisition on September 3, adding Haynesville assets with 6 Bcf/d of gathering and 4 Bcf/d of pipeline capacity. Consideration included approximately 27 million restricted Williams shares and assumption or retention of $869 million principal of debt. In July, Williams sold a 49% noncontrolling interest in five Pantheon power projects for $5.34 billion of committed capital: $3.74 billion was received in July, with the remainder expected through Q1 2027, including $1 billion received in October. Williams also sold Permian gathering assets for $139 million and its Brazos Permian II equity-method investment for $143 million. The quarterly dividend was $0.525 per share in each of the first three quarters of 2026, up from $0.500 in 2025.

2026 growth capital and investment spending is expected to be $7.3–$7.9 billion, excluding acquisitions and specified customer-reimbursable long-lead power equipment. Planned investment includes contracted Transco expansions, power projects, Haynesville and Northeast G&P, Louisiana LNG and Driftwood Pipeline, and Wamsutter development. Growth expectations also reflect a full year of Louisiana Energy Gateway and higher Haynesville volumes, partly offset by the South Mansfield sale and lower Eagle Ford activity.

Projects placed in service included Naughton (98 Mdth/d contracted capacity), Socrates South (part of a 556 MW Ohio project with a 10-year, primarily fixed-price contract), and three late-October additions: Gillis West (115 Mdth/d), Ryckman Creek Lateral (50 Mdth/d contracted capacity) and Huntingdon Connector (78 Mdth/d). Key developments include FERC approval of Southeast Supply Enhancement (1,597 Mdth/d; targeted as early as Q3 2027), a Leidy Access application (183 Mdth/d; Q4 2027 target), and approval of Pine Prairie Phase IV (10 Bcf of working-gas storage; Q4 2028 target). Northeast Supply Enhancement is fully subscribed, but a September 2026 Third Circuit decision vacated New Jersey’s Clean Water Act certification and remanded it, creating permitting risk. Other planned work includes Line 200 for Louisiana LNG (3,100 Mdth/d; Q2 2028 target) and contracted power projects.

Principal risks include permitting opposition or delays, construction inflation and supply-chain disruption, counterparty credit or performance, changes in customer drilling and gathering volumes, weaker commodity demand and prices, economic or interest-rate downturns, and weather-related facility damage. Transco’s FERC rate-case settlement took effect March 1, 2026; required refunds were paid in April.

Market risk

Interest-rate exposure

Williams’ interest-rate risk is primarily tied to its debt portfolio, which is mostly fixed-rate and limits sensitivity to changes in interest rates. Variable-rate borrowings under credit facilities and commercial paper could increase exposure if rates rise. Debt maturities are partly aligned with the lives of operating assets; Williams may use interest-rate derivatives to hedge future debt issuances.

Commodity exposure and management

Commodity exposure comes from natural-gas and NGL marketing, upstream production, and commodity-exposed gathering and processing contracts. Williams manages marketing exposure through exchange-traded and over-the-counter contracts and physical transactions. It also hedges some expected production prices and NGL margins using derivatives. These economic hedges generally are not designated for, or do not qualify for, hedge accounting.

Williams manages open commodity positions with limits and daily reporting, using value-at-risk (VaR) and stress testing. It reports minimal open natural-gas price risk because physical gas positions are generally economically hedged and total purchase volumes are close to sales volumes. VaR uses a parametric model with a 95% confidence interval and a one-day holding period; the company cautions that its measure may not be comparable with other companies’ VaR measures.

Commodity derivative fair value

At September 30, 2026, commodity derivative contracts had a net fair-value liability of $259 million. Level 1 amounts exclude $220 million of net cash collateral.

Value-at-risk

Integrated natural-gas trading VaR declined to $3 million at September 30, 2026, from $11 million at December 31, 2025. For the nine months ended September 30, 2026, trading VaR averaged $9 million and ranged from $3 million to $41 million.

Non-trading commodity-derivative VaR, primarily related to upstream and gathering-and-processing hedges, was $4 million at September 30, 2026, compared with $2 million at December 31, 2025. For the nine months ended September 30, 2026, it averaged $9 million, with a low of $1 million and a high of $18 million.

Controls and Procedures

As of September 30, 2026, management of Williams, Transco, and NWP concluded that disclosure controls and procedures were effective at a reasonable-assurance level. No changes during Q3 2026 materially affected, or were reasonably likely to materially affect, internal control over financial reporting at any of the three entities.

Williams completed the Momentum Acquisition on September 3, 2026. Momentum accounted for approximately 1% of Williams’ consolidated revenue for the nine months ended September 30, 2026, and approximately 9% of consolidated assets at September 30. In accordance with SEC guidance allowing an acquired business to be excluded from an internal-control assessment for up to one year after acquisition, Williams excluded Momentum’s relevant controls from its assessment.

Management cautioned that controls provide reasonable, not absolute, assurance. Errors or fraud may go undetected, including through collusion or management override.

Williams states that the risk factors described in its 2025 Form 10-K, filed February 24, 2026, have not materially changed. Those risks could materially affect Williams’, Transco’s, and NWP’s businesses, financial condition, or future results. This section does not identify specific risk factors or provide financial metrics.

Director and Officer Trading Arrangements

During the three months ended September 30, 2026, no Williams director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement.

Five-Year Performance-Based Executive Award

On October 29, 2026, the Board’s Compensation and Management Development Committee approved a one-time cash performance award for five named executive officers, separate from the annual incentive programs. The award covers January 1, 2026 through December 31, 2030 and is intended to align executives with long-term growth and financial-strength goals and support leadership continuity.

Awards are earned only if both performance conditions are satisfied: Adjusted EBITDA compounds at least 10% annually over the five-year period, and debt to Adjusted EBITDA is no greater than 4.0x at December 31, 2030. There is no payout if Adjusted EBITDA growth is below the 10% threshold. If the leverage condition is met, payout ranges from target at 10% Adjusted EBITDA CAGR to 200% of target at 16% CAGR, with straight-line interpolation between those growth rates. The Committee will certify performance after the period; earned awards are payable in cash after certification and no later than March 15, 2031.

Executives generally must remain employed through payment. Retirement, death, disability, or termination connected with a business sale may qualify for a prorated award. A qualifying termination within two years after a change in control—or a successor’s failure to assume or substantially replace the award—results in target payout. Voluntary termination other than retirement, and involuntary termination (including for cause, performance, reduction in force, or position elimination), results in forfeiture. The award is also subject to continued-employment, forfeiture, and clawback provisions.