Intrinsic value of Williams - WMB

Previous Close

$32.30

  Intrinsic Value

$1.40

stock screener

  Rating & Target

str. sell

-96%

Previous close

$32.30

 
Intrinsic value

$1.40

 
Up/down potential

-96%

 
Rating

str. sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of WMB stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  1.89
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  7,499
  7,649
  7,825
  8,026
  8,252
  8,502
  8,776
  9,075
  9,399
  9,747
  10,122
  10,522
  10,949
  11,403
  11,887
  12,399
  12,943
  13,518
  14,126
  14,769
  15,448
  16,164
  16,919
  17,715
  18,553
  19,437
  20,367
  21,345
  22,375
  23,459
  24,599
Variable operating expenses, $m
 
  8,827
  9,030
  9,262
  9,523
  9,811
  10,128
  10,473
  10,846
  11,249
  11,680
  12,142
  12,635
  13,160
  13,717
  14,309
  14,936
  15,600
  16,302
  17,043
  17,826
  18,653
  19,524
  20,443
  21,410
  22,430
  23,503
  24,633
  25,821
  27,072
  28,387
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  7,229
  8,827
  9,030
  9,262
  9,523
  9,811
  10,128
  10,473
  10,846
  11,249
  11,680
  12,142
  12,635
  13,160
  13,717
  14,309
  14,936
  15,600
  16,302
  17,043
  17,826
  18,653
  19,524
  20,443
  21,410
  22,430
  23,503
  24,633
  25,821
  27,072
  28,387
Operating income, $m
  270
  -1,178
  -1,205
  -1,236
  -1,271
  -1,309
  -1,352
  -1,398
  -1,447
  -1,501
  -1,559
  -1,620
  -1,686
  -1,756
  -1,831
  -1,910
  -1,993
  -2,082
  -2,175
  -2,274
  -2,379
  -2,489
  -2,605
  -2,728
  -2,857
  -2,993
  -3,136
  -3,287
  -3,446
  -3,613
  -3,788
EBITDA, $m
  2,033
  623
  637
  654
  672
  693
  715
  739
  766
  794
  824
  857
  892
  929
  968
  1,010
  1,054
  1,101
  1,151
  1,203
  1,258
  1,317
  1,378
  1,443
  1,511
  1,583
  1,659
  1,739
  1,823
  1,911
  2,004
Interest expense (income), $m
  1,152
  1,120
  1,155
  1,202
  1,256
  1,317
  1,384
  1,458
  1,538
  1,625
  1,718
  1,819
  1,926
  2,041
  2,163
  2,292
  2,430
  2,576
  2,730
  2,893
  3,066
  3,248
  3,440
  3,643
  3,856
  4,081
  4,318
  4,568
  4,830
  5,107
  5,397
Earnings before tax, $m
  -375
  -2,298
  -2,360
  -2,438
  -2,527
  -2,626
  -2,736
  -2,855
  -2,985
  -3,126
  -3,277
  -3,439
  -3,612
  -3,797
  -3,993
  -4,202
  -4,423
  -4,657
  -4,906
  -5,168
  -5,445
  -5,737
  -6,045
  -6,371
  -6,713
  -7,074
  -7,455
  -7,855
  -8,276
  -8,719
  -9,186
Tax expense, $m
  -25
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -424
  -2,298
  -2,360
  -2,438
  -2,527
  -2,626
  -2,736
  -2,855
  -2,985
  -3,126
  -3,277
  -3,439
  -3,612
  -3,797
  -3,993
  -4,202
  -4,423
  -4,657
  -4,906
  -5,168
  -5,445
  -5,737
  -6,045
  -6,371
  -6,713
  -7,074
  -7,455
  -7,855
  -8,276
  -8,719
  -9,186

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  170
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  46,835
  47,509
  48,602
  49,851
  51,253
  52,807
  54,512
  56,369
  58,378
  60,543
  62,867
  65,352
  68,005
  70,829
  73,830
  77,015
  80,390
  83,963
  87,741
  91,733
  95,947
  100,395
  105,085
  110,029
  115,238
  120,724
  126,500
  132,580
  138,978
  145,708
  152,788
Adjusted assets (=assets-cash), $m
  46,665
  47,509
  48,602
  49,851
  51,253
  52,807
  54,512
  56,369
  58,378
  60,543
  62,867
  65,352
  68,005
  70,829
  73,830
  77,015
  80,390
  83,963
  87,741
  91,733
  95,947
  100,395
  105,085
  110,029
  115,238
  120,724
  126,500
  132,580
  138,978
  145,708
  152,788
Revenue / Adjusted assets
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
  0.161
Average production assets, $m
  38,844
  39,622
  40,533
  41,575
  42,744
  44,040
  45,462
  47,010
  48,686
  50,492
  52,430
  54,503
  56,715
  59,070
  61,573
  64,229
  67,044
  70,023
  73,174
  76,503
  80,018
  83,727
  87,639
  91,762
  96,106
  100,681
  105,498
  110,569
  115,904
  121,518
  127,422
Working capital, $m
  -1,487
  -795
  -814
  -835
  -858
  -884
  -913
  -944
  -977
  -1,014
  -1,053
  -1,094
  -1,139
  -1,186
  -1,236
  -1,290
  -1,346
  -1,406
  -1,469
  -1,536
  -1,607
  -1,681
  -1,760
  -1,842
  -1,930
  -2,021
  -2,118
  -2,220
  -2,327
  -2,440
  -2,558
Total debt, $m
  23,502
  24,068
  25,052
  26,176
  27,438
  28,836
  30,371
  32,042
  33,850
  35,799
  37,890
  40,127
  42,514
  45,056
  47,757
  50,623
  53,661
  56,876
  60,277
  63,869
  67,663
  71,665
  75,887
  80,336
  85,024
  89,961
  95,160
  100,632
  106,390
  112,447
  118,819
Total liabilities, $m
  42,192
  42,758
  43,742
  44,866
  46,128
  47,526
  49,061
  50,732
  52,540
  54,489
  56,580
  58,817
  61,204
  63,746
  66,447
  69,313
  72,351
  75,566
  78,967
  82,559
  86,353
  90,355
  94,577
  99,026
  103,714
  108,651
  113,850
  119,322
  125,080
  131,137
  137,509
Total equity, $m
  4,643
  4,751
  4,860
  4,985
  5,125
  5,281
  5,451
  5,637
  5,838
  6,054
  6,287
  6,535
  6,800
  7,083
  7,383
  7,701
  8,039
  8,396
  8,774
  9,173
  9,595
  10,039
  10,509
  11,003
  11,524
  12,072
  12,650
  13,258
  13,898
  14,571
  15,279
Total liabilities and equity, $m
  46,835
  47,509
  48,602
  49,851
  51,253
  52,807
  54,512
  56,369
  58,378
  60,543
  62,867
  65,352
  68,004
  70,829
  73,830
  77,014
  80,390
  83,962
  87,741
  91,732
  95,948
  100,394
  105,086
  110,029
  115,238
  120,723
  126,500
  132,580
  138,978
  145,708
  152,788
Debt-to-equity ratio
  5.062
  5.070
  5.150
  5.250
  5.350
  5.460
  5.570
  5.680
  5.800
  5.910
  6.030
  6.140
  6.250
  6.360
  6.470
  6.570
  6.680
  6.770
  6.870
  6.960
  7.050
  7.140
  7.220
  7.300
  7.380
  7.450
  7.520
  7.590
  7.660
  7.720
  7.780
Adjusted equity ratio
  0.098
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -424
  -2,298
  -2,360
  -2,438
  -2,527
  -2,626
  -2,736
  -2,855
  -2,985
  -3,126
  -3,277
  -3,439
  -3,612
  -3,797
  -3,993
  -4,202
  -4,423
  -4,657
  -4,906
  -5,168
  -5,445
  -5,737
  -6,045
  -6,371
  -6,713
  -7,074
  -7,455
  -7,855
  -8,276
  -8,719
  -9,186
Depreciation, amort., depletion, $m
  1,763
  1,801
  1,842
  1,890
  1,943
  2,002
  2,066
  2,137
  2,213
  2,295
  2,383
  2,477
  2,578
  2,685
  2,799
  2,919
  3,047
  3,183
  3,326
  3,477
  3,637
  3,806
  3,984
  4,171
  4,368
  4,576
  4,795
  5,026
  5,268
  5,524
  5,792
Funds from operations, $m
  4,520
  -497
  -518
  -549
  -584
  -624
  -669
  -719
  -772
  -831
  -894
  -962
  -1,034
  -1,112
  -1,194
  -1,282
  -1,376
  -1,475
  -1,579
  -1,690
  -1,807
  -1,931
  -2,062
  -2,200
  -2,345
  -2,498
  -2,659
  -2,829
  -3,008
  -3,196
  -3,394
Change in working capital, $m
  856
  -16
  -18
  -21
  -23
  -26
  -29
  -31
  -34
  -36
  -39
  -42
  -44
  -47
  -50
  -53
  -57
  -60
  -63
  -67
  -71
  -74
  -79
  -83
  -87
  -92
  -97
  -102
  -107
  -113
  -119
Cash from operations, $m
  3,664
  -481
  -500
  -528
  -561
  -598
  -641
  -687
  -739
  -795
  -855
  -920
  -990
  -1,065
  -1,144
  -1,229
  -1,319
  -1,415
  -1,516
  -1,623
  -1,737
  -1,857
  -1,983
  -2,117
  -2,258
  -2,406
  -2,562
  -2,727
  -2,901
  -3,083
  -3,275
Maintenance CAPEX, $m
  0
  -1,766
  -1,801
  -1,842
  -1,890
  -1,943
  -2,002
  -2,066
  -2,137
  -2,213
  -2,295
  -2,383
  -2,477
  -2,578
  -2,685
  -2,799
  -2,919
  -3,047
  -3,183
  -3,326
  -3,477
  -3,637
  -3,806
  -3,984
  -4,171
  -4,368
  -4,576
  -4,795
  -5,026
  -5,268
  -5,524
New CAPEX, $m
  -2,051
  -778
  -911
  -1,042
  -1,169
  -1,296
  -1,422
  -1,548
  -1,676
  -1,806
  -1,938
  -2,073
  -2,212
  -2,355
  -2,503
  -2,656
  -2,815
  -2,979
  -3,151
  -3,329
  -3,515
  -3,709
  -3,912
  -4,123
  -4,344
  -4,575
  -4,817
  -5,070
  -5,336
  -5,613
  -5,904
Cash from investing activities, $m
  -416
  -2,544
  -2,712
  -2,884
  -3,059
  -3,239
  -3,424
  -3,614
  -3,813
  -4,019
  -4,233
  -4,456
  -4,689
  -4,933
  -5,188
  -5,455
  -5,734
  -6,026
  -6,334
  -6,655
  -6,992
  -7,346
  -7,718
  -8,107
  -8,515
  -8,943
  -9,393
  -9,865
  -10,362
  -10,881
  -11,428
Free cash flow, $m
  3,248
  -3,025
  -3,212
  -3,412
  -3,620
  -3,837
  -4,064
  -4,302
  -4,552
  -4,813
  -5,088
  -5,376
  -5,679
  -5,998
  -6,332
  -6,684
  -7,053
  -7,442
  -7,850
  -8,279
  -8,729
  -9,203
  -9,701
  -10,223
  -10,773
  -11,350
  -11,956
  -12,593
  -13,262
  -13,965
  -14,703
Issuance/(repayment) of debt, $m
  -972
  736
  983
  1,124
  1,262
  1,398
  1,534
  1,671
  1,809
  1,949
  2,091
  2,237
  2,387
  2,542
  2,701
  2,866
  3,038
  3,215
  3,400
  3,593
  3,793
  4,003
  4,221
  4,449
  4,688
  4,938
  5,199
  5,472
  5,758
  6,058
  6,372
Issuance/(repurchase) of shares, $m
  9
  2,406
  2,470
  2,563
  2,667
  2,782
  2,906
  3,041
  3,186
  3,342
  3,509
  3,688
  3,877
  4,079
  4,293
  4,520
  4,761
  5,015
  5,283
  5,567
  5,866
  6,182
  6,514
  6,865
  7,234
  7,623
  8,032
  8,463
  8,916
  9,392
  9,894
Cash from financing (excl. dividends), $m  
  -1,917
  3,142
  3,453
  3,687
  3,929
  4,180
  4,440
  4,712
  4,995
  5,291
  5,600
  5,925
  6,264
  6,621
  6,994
  7,386
  7,799
  8,230
  8,683
  9,160
  9,659
  10,185
  10,735
  11,314
  11,922
  12,561
  13,231
  13,935
  14,674
  15,450
  16,266
Total cash flow (excl. dividends), $m
  1,331
  117
  241
  276
  309
  343
  376
  410
  443
  478
  513
  549
  585
  623
  662
  703
  745
  788
  834
  881
  930
  981
  1,035
  1,091
  1,149
  1,211
  1,275
  1,342
  1,412
  1,485
  1,562
Retained Cash Flow (-), $m
  1,505
  -2,406
  -2,470
  -2,563
  -2,667
  -2,782
  -2,906
  -3,041
  -3,186
  -3,342
  -3,509
  -3,688
  -3,877
  -4,079
  -4,293
  -4,520
  -4,761
  -5,015
  -5,283
  -5,567
  -5,866
  -6,182
  -6,514
  -6,865
  -7,234
  -7,623
  -8,032
  -8,463
  -8,916
  -9,392
  -9,894
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -2,289
  -2,228
  -2,288
  -2,358
  -2,439
  -2,530
  -2,631
  -2,743
  -2,865
  -2,997
  -3,139
  -3,292
  -3,456
  -3,631
  -3,818
  -4,016
  -4,226
  -4,450
  -4,686
  -4,936
  -5,200
  -5,479
  -5,774
  -6,085
  -6,412
  -6,758
  -7,121
  -7,504
  -7,907
  -8,331
Discount rate, %
 
  12.10
  12.71
  13.34
  14.01
  14.71
  15.44
  16.22
  17.03
  17.88
  18.77
  19.71
  20.70
  21.73
  22.82
  23.96
  25.16
  26.41
  27.73
  29.12
  30.58
  32.10
  33.71
  35.40
  37.17
  39.02
  40.97
  43.02
  45.17
  47.43
  49.81
PV of cash for distribution, $m
 
  -2,042
  -1,754
  -1,571
  -1,396
  -1,228
  -1,069
  -919
  -780
  -652
  -536
  -434
  -345
  -268
  -204
  -152
  -111
  -79
  -54
  -36
  -24
  -15
  -9
  -5
  -3
  -2
  -1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  91.7
  84.1
  77.1
  70.5
  64.4
  58.8
  53.6
  48.8
  44.4
  40.3
  36.6
  33.2
  30.1
  27.2
  24.6
  22.2
  20.0
  18.0
  16.3
  14.6
  13.2
  11.8
  10.6
  9.5
  8.5
  7.7
  6.9
  6.1
  5.5
  4.9

The Williams Companies, Inc. is an energy infrastructure company. The Company is focused on connecting North America's hydrocarbon resource plays to markets for natural gas, natural gas liquids (NGL), and olefins. As of December 31, 2016, its interstate gas pipelines, midstream and olefins production interests were held through its investment in Williams Partners L.P. (WPZ). The Company's segments include Williams Partners, Williams NGL & Petchem Services and Other. The Williams Partners segment includes its consolidated master limited partnership, WPZ. The gas pipeline business includes interstate natural gas pipelines and pipeline joint project investments. The midstream business provides natural gas gathering, treating, processing and compression services. The Williams NGL & Petchem Services segment includes its Texas Belle pipeline and certain other domestic olefins pipeline assets. Other segment includes its corporate operations and Canadian construction services company.

FINANCIAL RATIOS  of  Williams (WMB)

Valuation Ratios
P/E Ratio -57.1
Price to Sales 3.2
Price to Book 5.2
Price to Tangible Book
Price to Cash Flow 6.6
Price to Free Cash Flow 15
Growth Rates
Sales Growth Rate 1.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -35.2%
Cap. Spend. - 3 Yr. Gr. Rate -10.5%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 487.3%
Total Debt to Equity 506.2%
Interest Coverage 1
Management Effectiveness
Return On Assets 1.4%
Ret/ On Assets - 3 Yr. Avg. 2.8%
Return On Total Capital -1.4%
Ret/ On T. Cap. - 3 Yr. Avg. 1.9%
Return On Equity -7.9%
Return On Equity - 3 Yr. Avg. 5.2%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 77%
Gross Margin - 3 Yr. Avg. 71.1%
EBITDA Margin 33.9%
EBITDA Margin - 3 Yr. Avg. 39.8%
Operating Margin 3.6%
Oper. Margin - 3 Yr. Avg. 2.9%
Pre-Tax Margin -5%
Pre-Tax Margin - 3 Yr. Avg. 6.2%
Net Profit Margin -5.7%
Net Profit Margin - 3 Yr. Avg. 4.8%
Effective Tax Rate 6.7%
Eff/ Tax Rate - 3 Yr. Avg. 21.6%
Payout Ratio -297.4%

WMB stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WMB stock intrinsic value calculation we used $7499 million for the last fiscal year's total revenue generated by Williams. The default revenue input number comes from 2016 income statement of Williams. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our WMB stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 12.1%, whose default value for WMB is calculated based on our internal credit rating of Williams, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Williams.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of WMB stock the variable cost ratio is equal to 115.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for WMB stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.8% for Williams.

Corporate tax rate of 27% is the nominal tax rate for Williams. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the WMB stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for WMB are equal to 518%.

Life of production assets of 22 years is the average useful life of capital assets used in Williams operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for WMB is equal to -10.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4643 million for Williams - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 827.156 million for Williams is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Williams at the current share price and the inputted number of shares is $26.7 billion.

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COMPANY NEWS

▶ Whats Driving Williams Partners Strong Stock Performance?   [Jan-19-18 12:52PM  Market Realist]
▶ What KMIs and ETEs Debt Levels Tell Us   [Jan-18-18 10:31AM  Market Realist]
▶ Why Kinder Morgans Earnings Growth Was Lowest among Peers   [Jan-17-18 12:10PM  Market Realist]
▶ Could ETEs and EPDs Revenues Grow in 2018?   [10:40AM  Market Realist]
▶ Why Energy Transfer Partners Leverage Is Still a Concern   [Jan-09-18 09:03AM  Market Realist]
▶ Williams Partners Transco Pipeline Delivers Record Volumes   [Jan-08-18 04:15PM  Business Wire]
▶ Williams Cos. Train Is Leaving the Station   [Jan-05-18 02:04PM  TheStreet.com]
▶ Analysts Views on Williams Companies   [Jan-04-18 10:33AM  Market Realist]
▶ What Williams Companies Technical Indicators Suggest   [Jan-03-18 04:40PM  Market Realist]
▶ Analyst Ratings: WMB Has the Most Buys, WGP the Most Holds   [Dec-20-17 07:30AM  Market Realist]
▶ Should You Buy The Williams Companies Inc (NYSE:WMB) Now?   [Dec-18-17 11:45AM  Simply Wall St.]
▶ ETE, PAGP, WGP, WMB: Analyzing Earnings Growth in 3Q17   [Dec-15-17 05:30PM  Market Realist]
▶ Williams Companies: What Investors Can Expect   [Dec-01-17 04:30PM  Market Realist]
▶ 52-Week Company Lows   [Nov-24-17 10:44AM  GuruFocus.com]
▶ What WMBs Current Valuation Tells Us   [Nov-21-17 07:32AM  Market Realist]
▶ Williams Announces Quarterly Cash Dividend   [Nov-16-17 01:15PM  Business Wire]
▶ Should You Sell The Williams Companies Inc (WMB) At $28.38?   [Nov-09-17 03:05PM  Simply Wall St.]
▶ WMB and WPZ: Analysts Recent Recommendations   [Nov-06-17 07:33AM  Market Realist]
▶ Williams Cos. misses 3Q profit forecasts   [Nov-01-17 05:07PM  Associated Press]
▶ November Top Energy Dividend Payers   [09:02AM  Simply Wall St.]
Financial statements of WMB
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