Williams Partners reported second quarter 2016 financial results and it intends to maintain its quarterly cash distribution of $0.85 per unit, or $3.40 annualized, through 2017 with planned distribution growth beyond.
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Due primarily to a $341 million non-cash pre-tax impairment charge associated with held-for-sale Canadian operations, Williams Partners reported second quarter 2016 unaudited net loss of $90 million, a $390 million unfavorable change from second quarter 2015 net income.
The decrease also reflects the absence of $126 million of Geismar insurance proceeds from the prior year and a $48 million impairment charge in 2016 related to a gathering system.
These changes were partially offset by lower costs and expenses, as well as a foreign tax provision impact associated with the Canadian impairment charge.
Year-to-date Williams Partners reported unaudited net loss of $40 million, an unfavorable change of $429 million for the same six-month reporting period in 2015 due primarily to the items affecting the second quarter.
The year-to-date decrease also reflects the first quarter impairment of certain equity-method investments and higher interest expense, partially offset by improved olefins margins and increased contributions from Discovery’s Keathley Canyon Connector.
Williams Partners reported second quarter 2016 Adjusted EBITDA of $1.065 billion, a $57 million increase over second quarter 2015.
The increase is due primarily to $55 million lower G&A and operating expenses, despite additional assets being in service.
Fee-based revenues, which were steady versus second quarter 2015, were impacted by a $34 million reduction at Gulfstar One resulting from a planned shutdown to connect the Gunflint tieback, partially offset by higher revenues from Transco expansion projects.
Year-to-date, Williams Partners reported Adjusted EBITDA of $2.125 billion, an increase of $200 million over the same six-month reporting period in 2015. The increase is due primarily to $75 million of higher olefins margins, $61 million of higher fee-based revenues, $61 million of lower operating and G&A expenses and $52 million of higher proportional EBITDA from joint ventures.
Partially offsetting these increases were certain unfavorable items including a $15 million change in foreign currency exchange gains and losses.
For second quarter 2016, Williams Partners generated $737 million in distributable cash flow (DCF) attributable to partnership operations, compared with $701 million in DCF attributable to partnership operations for the same period last year.
The $36 million increase in DCF for the quarter was driven by a $57 million increase in Adjusted EBITDA, partially offset by $38 million higher interest expense. The cash distribution coverage was 1.02x versus 0.97x in second quarter 2015.
Year-to-date, Williams Partners generated $1.476 billion in DCF, an increase of $129 million in DCF over the same six-month reporting period in 2015. The increase was due to a $200 million increase in Adjusted EBITDA partially offset by $75 million higher interest expense.
The cash distribution coverage for the first six-month reporting period was 1.02x versus 0.93x for the same six-month period in 2015.
Williams Partners recently announced a regular quarterly cash distribution of $0.85 per unit for its common unitholders. ■