Williams Companies (NYSE:WMB) and its master limited partnership, Williams Partners (NYSE: WPZ), recently reported solid second-quarter results. Overall, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 4.5% to $1.11 billion, which marked the 15th straight quarterly increase.

That said, despite that history of success, the company is on a quest to become even better. It took several important steps in that direction last quarter, which CEO Alan Armstrong highlighted on the accompanying conference call. Here are three things the company wanted investors to know about its progress during the quarter.

A pipeline in a ditch at a construction site.

Image source: Getty Images.

We've driven risk out of our business

One of Williams' priorities over the past year has been to reduce the potential for earnings volatility by selling assets with direct exposure to commodity prices. The company took another significant step in that direction, with Armstrong pointing out:

On July 6, we completed the sale of Geismar to NOVA Chemicals. That sale, along with the sale of the Canadian assets last year, removed a significant amount of commodity risk from our business, as you're well aware. And we now stand at around 97% of our gross margins coming from predictable fee-based sources that are aligned with natural gas volumes.

As Armstrong notes, only 3% of Williams Partners' gross margins going forward have any direct exposure to commodity price volatility, which is a significant improvement from the roughly 10% exposure it had before undergoing this transformation. As a result, the company's earnings streams have become much more predictable, which should reduce its overall risk profile.

Our balance sheet is getting stronger

In addition to reducing earnings risk, the Geismar sale also brought in $2.1 billion in cash. Armstrong stated that the company used a portion of the proceeds "to pay off our $850 million term loan. And, of course, further strengthening our balance sheet, which we've made tremendous progress on here in the last 12 months." The company expects its leverage ratio to be below 4.5 times debt to EBITDA this year, which is an improvement from last year when its elevated leverage ratio caused credit rating agencies to put it on watch for a potential downgrade. Meanwhile, the sale provided the company with cash to help finance its expansion projects.

A team of welders working on a pipeline.

Image source: Getty Images.

We're making progress on our growth projects

While Williams has been jettisoning riskier assets and improving its balance sheet, it has also been expanding its low-risk network of fee-bearing natural gas infrastructure assets. The company began the year expecting to bring five projects on line by year-end. However, on the call, Armstrong said:

We're chipping away at all these important projects. As you know, Gulf Trace came into service in the first quarter. And Hillabee Phase I, which provides all of the supply for Sabal Trail, came online in early July. And then just this week on August 1, the Dalton capacity was placed in service to serve northern Georgia markets from supply points at the northern end of Transco... Our line of sight of the future growth is evident as we target the second half of '17. And the in-service dates coming up for Virginia Southside II, New York Bay and also, we'll get Garden State Phase I in this year as well, it looks like.

Given the company's pace, it could potentially finish six projects this year, which enhances its ability to continue growing earnings in future quarters. Overall, these projects represent a $1.4 billion investment, which should generate about $250 million in annual EBITDA. In addition to that, it has another $4 billion in projects under development on its Transco system alone that should enter service by 2020 and add another $650 million to the bottom line on an annual basis. Those projects support the forecast that Williams Partners can increase its distribution to investors by a 5% to 7% annual clip over the near term, which would fuel 10% to 15% annual dividend growth at Williams.

The uncertainty is quickly fading

Williams Companies and Williams Partners made tangible progress over the past few months on their goal to transform into a low-risk, gas-focused energy infrastructure company. Because of that, it's becoming increasingly likely that the companies will be able to deliver on their promised earnings and dividend growth. That's just what income-seeking investors want to see since it means that they should be able to earn a low-risk, high-yield 4% at Williams and 6.2% at Williams Partners that has an excellent chance of growing at a healthy clip for the next several years.

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