Williams Companies, Inc. (The) (WMB)

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Williams Companies (WMB)

Q2 2011 Earnings Call

August 09, 2011 9:30 am ET

Executives

Sharna Reingold - IR

Alan Armstrong - Chief Executive Officer, President, Director, President of Midstream Gathering & Processing, Chairman of Williams Partners GP LLC and Chief Executive Officer of Williams Partners GP LLC

Donald Chappel - Chief Financial Officer and Senior Vice President

Randall Barnard - Senior Vice President of Gas Pipeline

Rory Miller - Senior Vice President of Midstream

Analysts

Michael Karsch

Rebecca Followill - Howard Weil

Theodore Durbin - Goldman Sachs Group Inc.

Bradley Olsen

Carl Kirst - BMO Capital Markets U.S.

Stephen Maresca - Morgan Stanley

Sharon Lui - Wells Fargo Securities, LLC

Presentation

Operator

Good day, everyone, and welcome to the Williams Companies Second Quarter 2011 Earnings Release Conference Call. At this time, for opening remarks and introductions, I would like to turn the call over to Ms. Sharna Reingold, Director of Investor Relations. Please go ahead, ma'am.

Sharna Reingold

All right. Thank you and good morning. Welcome to the Williams second quarter 2011 earnings call. As always, thank you for your interest in the company. As you know, we released our results on August 3 after the market closed. Yesterday, Alan Armstrong, our President and CEO, had some commentary about our results. This audio commentary and slides are available on our website, williams.com, that we will not be reviewing our slides this morning. In a minute, Alan will make some brief remarks, and we will open the line for questions. Please be aware that Don Chappel, Ralph Hill, Rory Miller, and Randy Bernard are all available for any questions.

Please note that all the slides are available on our website, www.williams.com. There are forward-looking statements on Slides 2 and 3 and the disclaimer on oil and gas reserves on Slide 4 of yesterday's presentation. They are important and integral to the company, and you should review those slides. Also included in the presentation yesterday are various non-GAAP numbers that have been reconciled back to measures included in generally accepted accounting principles. Those reconciliation schedules and related information are included in the slides available on our website, williams.com. With that, I'll turn it over to Alan.

Alan Armstrong

Great, thank you, Sharna, and good morning. Thanks for joining us this morning in such a busy time in the markets. We certainly did experience a great second quarter. Our adjusted earnings per share was up 39%. We are increasing our full year earnings outlook based on the strength of the first and second quarter, and all of our business segments contributed to the gains that we had in this period.

While all our business segments are performing very well and growing according to plans, we also continue to work hard on restructurings at the corporate level to unlock value for our shareholders. As you're well aware, our WPX IPO, which I'll comment on in just a moment, continues to move ahead. And we are moving to a growing dividend company and expect that value to unlock significant shareholder value for WMB. Our WPZ Holdings and our Canadian midstream olefins give us a very clear line of sight to this sustainable growth for the WMB dividends for years to come.

We continue to be very focused on maintaining our investment grade credit and maintaining a very conservative approach to managing our margins within our WPZ segment. And this gives us a very clear growth trajectory and also gives us a very clear backlog. We have a very clear backlog of the great projects and we're very excited about for our future. So we've got great situations. We sit here today and we also have great transparency about where our growth is coming from. So we really continue to be very excited about how we're positioned today in these markets.

And so, before taking your questions though, I do want to briefly address our previously announced proposal to acquire Southern Union Company. But this time, Williams continues to closely monitor the situation and we are evaluating all of our options. We won't have any further comments today regarding Southern Union or the agreement they have with Energy Transfer.

I also have a few brief comments about our planned IPO of WPX Energy. We are ready to go with the WPX Energy IPO so as soon as market conditions are cooperative, we will be prepared to launch that. At this point, we still plan to get the IPO done in the third quarter and full spin no later than the first quarter of 2012.

So as a reminder though, the purpose of our call today is to discuss our very strong financial and operational performance in the second quarter and our new higher guidance for 2011. We intend to keep today's call focused on those topics, and so I appreciate your cooperation on that.

We can now open the call for questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] We'll take our first question from Carl Kirst with BMO Capital.

Carl Kirst - BMO Capital Markets U.S.

Just a very quick clarification, if I could, on the WPX IPO, because you just said market conditions are cooperative. Does that mean the SEC has declared it effective? I hadn't looked at that but I just want to make sure that that's not the hold up. It's now just more of your decision on when to go?

Alan Armstrong

Yes, it is just our decision on when we're ready to go. That is correct.

Carl Kirst - BMO Capital Markets U.S.

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