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Williams Q1 adjusted income erodes while EBITDA gains steam


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Williams Q1 adjusted income erodes while EBITDA gains steam

Williams Cos.Inc. on May 4 reported first-quarter adjusted income of $26million, or 3 cents per share, compared to $122 million, or 16 cents per share,during the prior-year period.

In explaining the year-over-year decrease, Williams citedhigher interest expense and the incentive distribution rights waiver that wentalong with the failure of a would-be merger with . When Williamscalled off its purchase of Williams Partners so that it could enter into amerger with Energy TransferEquity LP, it had agreed to pay a $428 million termination fee inthe form of reduced incentive distributions from the partnership.

Higher olefins margins from the Geismar plant and higherequity earnings from Discovery's KeathleyCanyon Connector partially offset the decrease, the company said inits May 4 earnings release.

The S&P Capital IQ consensus normalized EPS estimate forthe first quarter was 23 cents as of 5:45 p.m. ET on May 4, with four analystscontributing.

Williams reported a GAAP net loss of $65 million, or 9 centsper share, compared with net income of $70 million, or 9 cents per share,during the first quarter of 2015.

The company reported adjusted EBITDA of $1.06 billion, upfrom $918 million year over year.

"This marks the fourth consecutive quarter of adjustedEBITDA in excess of $1 billion. Our focus on fee-based revenues has allowed usto produce strong cash flow growth despite a 16-year low in NGL prices,"Alan Armstrong, CEO of Williams Partners' general partner, said in the earningsstatement.

Williams Partners on the same day reported first-quarter netincome of $50 million, compared to $89 million during the year-ago period,citing "impairments of certain equity-method investments" and higherinterest expense.

The partnership reported adjusted EBITDA of $1.06 billion,compared to $917 million during the corresponding period in 2015. The 16%increase in adjusted EBITDA was driven by $60 million in improved Geismarolefins margins and $63 million in fee-based revenue growth, according to thepartnership's earnings release.

The partnership posted distributable cash flow of $739million for 1.02x coverage, compared to $646 million of DCF and coverage of0.89x during the same period in 2015.