Can Williams Afford Its Spending Bill?
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Williams Companies (WMB) is expanding its Transco pipeline network, gas storage, and power projects, and management says demand for natural gas continues to accelerate. Capital spending reached $7.66 billion over the twelve months to September 2026, up from $2.7 billion in the twelve months to September 2023. Before reading on, what share of its sales would you guess that spending now takes?
How Big Is Williams’ Spending Bill?
Over the twelve months to September 2026, capital spending equaled 61.3% of sales for Williams, compared with 24.4% three years earlier. In dollars, the bill is about 2.8 times what it was then. That spending is still climbing: Williams spent 150.4% more in the quarter to September 2026 than in the same quarter a year earlier.
Can Williams Pay For It?
In the quarter to September 2026, Williams spent more than its business brought in. This spending equaled 165.4% of that cash, compared with 69.1% in the same quarter a year earlier.
| Fiscal quarter | Capital spending | Cash the business brought in | Cash left over |
|---|---|---|---|
| Q2 FY2025 (ended 2025-06-30) | $1.01 billion | $1.45 billion | $0.438 billion |
| Q3 FY2025 (ended 2025-09-30) | $0.994 billion | $1.44 billion | $0.445 billion |
| Q4 FY2025 (ended 2025-12-31) | $1.98 billion | $1.58 billion | -$0.405 billion |
| Q1 FY2026 (ended 2026-03-31) | $1.36 billion | $1.60 billion | $0.244 billion |
| Q2 FY2026 (ended 2026-06-30) | $1.83 billion | $1.38 billion | -$0.458 billion |
| Q3 FY2026 (ended 2026-09-30) | $2.49 billion | $1.51 billion | -$0.984 billion |
Each row is one fiscal quarter. Cash left over is the cash the business brought in minus the spending (free cash flow). The spending leaves out equipment taken on through leases.
Cash left after spending went from a surplus of $0.445 billion in the quarter to September 2025 to a shortfall of $0.984 billion a year later. This cash was below zero in three of the last four quarters. Put simply, the business no longer covers the bill.
Williams does have room to bridge that gap. It held $1.76 billion of cash against $33.9 billion of debt at the end of September 2026, and management expects its leverage, debt measured against earnings, to end the year around 3.75 times, still below its own ceiling. That figure counts the Momentum acquisition’s earnings on a full-year basis. That forecast leaves out any power projects announced before year end, and management expects to announce one or two more. That room comes from borrowing, though, and the latest shortfall was the largest of the last two years.
What Has The Spending Bought So Far?
Over the three years to September 2026, sales for Williams grew 13.1%, far less than the bill did.
Williams spent $14.0 billion in those three years, while the cash its business brings in each year rose by $0.716 billion. At that rate, the extra cash would take about 19.6 years to equal what was spent. That sets past spending beside past growth, not a return on it: sales and cash also grow for other reasons, such as the Momentum Midstream assets Williams bought on September 3, 2026, in the last weeks of those three years.
What Must Go Right For Williams
On its November 3, 2026 call, management said LNG exports are growing along the Gulf Coast and power demand is surging for the first time in decades. Williams is building Transco expansions and gas storage to serve that demand, and said the final phase of its Socrates power project would enter service that week. Management describes its tight borrowing levels as mainly an issue for 2026 and 2027, before the earnings growth it expects in 2028 and beyond. For 2026 as a whole, it forecasts growth capital spending of $7.3 billion to $7.9 billion.
Cash left after spending each quarter swung from a surplus to a shortfall in the quarter to September against a year earlier. This is the figure to watch when Williams is expected to report in February 2027.
Does This Mean You Should Act On WMB?
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