Williams Companies, Inc. (the) · NYSE:WMB
Williams Companies, Inc. (the) — The Williams Companies — Q3 2007 Earnings Presentation
84 slides from Williams Companies, Inc. (the)'s earnings presentation, Nov 1, 2007
Slide 1: Williams 2007 3rd Quarter Earnings
Williams 2007 3rd Quarter Earnings November 1, 2007 © 2007 The Williams Companies, Inc. All rights reserved.
Slide 2: Forward Looking Statements
Forward Looking Statements Our reports, filings, and other public announcements might contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are “forward-looking statements” within the meaning of the Private Securities Litigatio
Slide 3: Forward Looking Statements (cont.)
Forward Looking Statements (cont.) • Our ability to receive services from outsourcing provider locations outside the United States might be impacted by cultural differences, political instability, or unanticipated regulatory requirements in jurisdictions outside the United States; • We could be held
Slide 4: Oil and Gas Reserves and Resource Potential Disclaimer
Oil and Gas Reserves and Resource Potential Disclaimer The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves. We have used certain terms in this presentation such as “probable” reserves and “possible” reserves and "unrisked theoretical resource estima
Slide 5: Overview
Overview Steve Malcolm Chairman, President & CEO © 2007 The Williams Companies, Inc. All rights reserved.
Slide 6: Headlines
Headlines > 3Q • Strong performance • Adjusted EPS increases 44% to $0.39 from year ago > Outlook • ’07 picture gets still brighter; bumping up EPS guidance 18% • Expect ’08 earnings to show strength even in less extraordinary pricing environment • Look for approximately 15% production growth in ’08
Slide 7: Understanding Our 3Q Strength
Understanding Our 3Q Strength > Increased segment profit – again > Strong NGL margins > Rockies basis anomaly – net positive effect • Created extraordinary processing profits for Midstream • Transportation, hedging strategy insulated E&P − Rockies producer, not Rockies price-taker − Just 7% of produ
Slide 8: Outlook: Extraordinary '07 Leads Into Strong '08
Outlook: Extraordinary ’07 Leads Into Strong ’08 $3,000 $2,500 Guidance Range $2,000 Uplift from Price $1,500 Environment** $1,000 Segment Profit $500 $0 2005 2006 2007* 2008* *Represents midpoint of Total Forecasted Recurring Segment Profit after MTM **Increased profit due to better 2007 commodity
Slide 9: Financial Results
Financial Results Don Chappel Chief Financial Officer © 2007 The Williams Companies, Inc. All rights reserved.
Slide 10: Consolidated Financial Results
Consolidated Financial Results 3rd Quarter YTD Dollars in millions ( except per share amounts) 2007 2006 2007 2006 Income from Continuing Operations $228 $113 $642 $186 Income (loss) from Discontinued Operations (30) (7) 124 (24) Net Income $198 $106 $765 $162 Net Income/Share $0.33 $0.18 $1.25 $0.2
Slide 11: 3rd Quarter Segment Profit
Consolidated 3rd Quarter Segment Profit Dollars in millions Reported Recurring 2007 2006 2007 2006 Exploration & Production (See Slide 53) $169 $145 $169 $145 Midstream Gas & Liquids (See Slide 61) 300 223 300 233 Gas Pipeline (See Slide 64) 183 109 171 109 Subtotal $652 $476 $640 $486 Gas Marketing
Slide 12: YTD Segment Profit
Consolidated YTD Segment Profit Dollars in millions Reported Recurring 2007 2006 2007 2006 Exploration & Production (See Slide 53) $566 $412 $566 $412 Midstream Gas & Liquids (See Slide 61) 705 508 697 580 Gas Pipeline (See Slide 64) 513 366 478 364 Subtotal $1,784 $1,286 $1,741 $1,356 Gas Marketing
Slide 13: Exploration & Production
Exploration & Production Ralph Hill President © 2007 The Williams Companies, Inc. All rights reserved.
Slide 14: Exploration & Production 2007 Accomplishments
Exploration & Production 2007 Accomplishments > 3Q ’07 segment profit up 17% Recurring Segment Profit + Depreciation compared to 3Q ’06 400 350 > 3Q ’07 total production 974 300 MMcfed, up 17% compared to 250 3Q ’06 $MM 200 • 3Q ‘07 pipeline maintenance 150 and curtailments decreased 100 50 volumes
Slide 15: Production Highlights
Exploration & Production Production Highlights > Piceance Valley 545 MMcfed, up 30% over one Williams' Total Production year ago. 20 rigs operating, (26 with Highlands) 974 > Piceance Highlands 25 MMcfed, up 98% over one 1,000 945 year ago. Well performance meeting expectations. 879 891 831 850 786
Slide 16: 93% Domestic Production Not At Rockies Prices
Exploration & Production 93% Domestic Production Not At Rockies Prices 3Q ‘07 Sales Points > Total Domestic Production of 926 Calif. & MMcfed Other • 28% (264 MMcfed) at Rockies prices 10% before hedging • 72% (662 MMcfed) produced or Rockies transported to other price points hedges 21% • Rockies he
Slide 17: Guidance Updates
Exploration & Production Guidance Updates $MM 2007 2008 8/2/07 Segment Profit Guidance $750 $950 $950 $1,250 Price and transportation (85) 50 Volumes, net of expenses 22 60 Increased LOE, DD&A, and SG&A - (60) (63) 50 11/1/07 Segment Profit Guidance $750 $825 $1,000 $1,300 8/2/07 Capital Guidance $1
Slide 18: Key Points – Value Creation Continues
Exploration & Production Key Points – Value Creation Continues > Strategy remains rapid development of our premier drilling inventory > An industry leader in production growth and cost efficiencies > Continued strong reserves replacement through the drill bit > Long-term repeatable drilling inventor
Slide 19: Midstream
Midstream Alan Armstrong President © 2007 The Williams Companies, Inc. All rights reserved.
Slide 20: Midstream 2007 Accomplishments
Midstream 2007 Accomplishments Recurring Segment Profit + Depreciation > Breaking Records 400 • Quarterly recurring profit 350 300 • $0.62 per gallon margin in 3Q 250 ‘07 $MM 200 • Rockies margin $0.83 per 150 gallon - Sept 100 > Successfully integrated 50 BASF’s interest in Geismar 0 1Q 2Q 3Q 4Q >
Slide 21: Extraordinary 2007 Margins
Midstream Extraordinary 2007 Margins Domestic NGL Average Realized Net Margin and Volumes by Quarter Realized Margin Total Production & Equity (Cents / Gallon) Volumes by Quarter (MM Gallons) 70 800 700 60 600 50 500 40 400 30 300 20 200 10 100 0 0 Q4'02 Q1'03 Q2'03 Q3'03 Q4'03 Q1'04 Q2'04 Q3'04 Q4'
Slide 22: 2007-08 Guidance
Midstream 2007-08 Guidance Dollars in millions 2007 2008 Segment Profit $950 - 1,125 $575 – 850 $700 - 850 $550 - 825 Annual DD&A 210 - 220 240 – 250 Segment Profit + DD&A $1,160 – 1,345 $815 – 1,100 $910 - 1,070 $790 - 1,075 Capital Spending $650 – 700 $650 – 700 $525 - 575 NGL Margins $650 – 800 $
Slide 23: Guidance Updates
Midstream Guidance Updates $MM 2007 2008 8/2/07 Segment Profit Guidance $700 $850 $550 $825 Increased NGL Margins 200 80 Increased Olefins Margins 25 25 Increased Costs (30) Lower Volume Assumptions (35) Other 25 (15) 250 25 11/1/07 Segment Profit Guidance $950 $1,125 $575 $850 8/2/07 Capital Guidan
Slide 24: Significant Progress Made on Growth Projects
Midstream Significant Progress Made on Growth Projects In Development/Proposal (2007-2012) Under Negotiation (2007-2012) In Guidance (2007-2012) Spending $3,000MM–4,000MM Spending $450MM–650MM Spending $1,300MM-1,400MM 5% 5% 5% 10% 25% 45% 35% 55% 15% 45% 55% Overland Pass Canadian Oil Sands Deepwat
Slide 25: Key Points
Midstream Key Points > Segment profit guidance increased > 2nd consecutive record quarter > Record NGL margins • Extraordinary Rockies gas basis drives record margins • NGL margins projected to decrease in ’08 > Growth projects abound − Deepwater aggregation strategy continues to pay off − Unique po
Slide 26: Gas Pipeline
Gas Pipeline © 2007 The Williams Companies, Inc. All rights reserved.
Slide 27: 2007 Accomplishments
Gas Pipeline 2007 Accomplishments > Transco • Announces Open Seasons for: Recurring Segm ent Profit + Depreciation − 85 North Expansion 300 − Northeast Connector Expansion − Mobile Bay South Expansion 250 • Successfully concluded open season for Pascagoula Expansion Project 200 > Northwest 150 • Suc
Slide 28: 2007-08 Consolidated Outlook
2007-08 Consolidated Outlook Don Chappel Chief Financial Officer © 2007 The Williams Companies, Inc. All rights reserved.
Slide 29: 2007 and 2008 Forecast Guidance
Consolidated 2007 and 2008 Forecast Guidance 2007 2008 Aug 2 Nov 1 Nov 1 Dollars in millions, except per-share amounts Guidance Guidance Guidance Segment profit before MTM adjustment $2,085 - $2,350 $2,290 - $2,445 $2,280 - $2,785 Net Interest Expense (640) - (700) (640) - (680) (605) - (675) Genera
Slide 30: 2007-08 Segment Profit
Consolidated 2007-08 Segment Profit Dollars in millions 2007 2008 Exploration & Production $750 - 825 $1,000 - 1,300 950 950 - 1,250 Midstream 950 - 1,125 575 - 850 700 - 850 550 - 825 Gas Pipeline 640 - 670 625 - 675 625 - 655 Gas Marketing 2 (150) - (125) 0 - 30 (75) - (50) 15 - 55 Other / Corp. /
Slide 31: Enterprise Risk Management: Natural hedges
Enterprise Risk Management Natural hedges in our commodity businesses Economic Natural Gas Exposure for E&P and Midstream (Q4 2007-2008) 1,250,000 E&P Hedged Position E&P Unhedged Position 1,000,000 Midstream Unhedged Fuel & Shrink E&P Length + Midstream Short 750,000 500,000 MMBtu/Day 250,000 0 (25
Slide 32: Rockies Natural Gas Exposure
Enterprise Risk Management Rockies Natural Gas Exposure Economic Rockies Natural Gas Exposure for E&P and Midstream (Q4 2007-2008) 1,250,000 E&P Hedged Position E&P Unhedged Position 1,000,000 Midstream Unhedged Fuel & Shrink E&P Length + Midstream Short 750,000 500,000 MMBtu/Day 250,000 0 (250,000)
Slide 33: 2007-08 Capital Expenditures
Consolidated 2007-08 Capital Expenditures Dollars in millions 2007 2008 Exploration & Prod. $1,500 - 1,600 $1,400 - 1,600 1,400 - 1,500 1,250 - 1,400 Midstream 650 - 700 650 - 700 525 - 575 Gas Pipeline 575 - 625 360 - 495 460 - 565 285 - 410 Gas Marketing - - Other/Corporate 30 - 50 40 - 60 Total $
Slide 34: 2007-08 Outlook
Consolidated 2007-08 Outlook Dollars in millions 2007 2008 Segment Profit Reported After MTM Adj. $2,390 - 2,545 $2,250 - 2,755 2,160 - 2,425 2,090 - 2,805 Recurring After MTM Adj. 2,347 - 2,502 2,250 - 2,755 2,135 - 2,400 2,090 - 2,805 DD&A 1,020 - 1,120 1,160 - 1,260 1,010 - 1,110 1,150 - 1,250 Ca
Slide 35: Summary
Summary Steve Malcolm Chairman, President & CEO © 2007 The Williams Companies, Inc. All rights reserved.
Slide 36: A look at historical earnings and stock price performance
A look at historical earnings and stock price performance © 2007 The Williams Companies, Inc. All rights reserved. Williams 2007 Third Quarter Earnings / November 1, 2007 / 36
Slide 37: Strong Quarter, Extraordinary Year, Bright Future
Strong Quarter, Extraordinary Year, Bright Future > Strong 3Q performance; all businesses deliver > Extraordinary ’07 − Bumping up EPS guidance 18% > Even better ’08 • Pricing environment – less extraordinary • Expected production growth of approximately 15% • Expect to commit more capital to develo
Slide 38: Q&A
Q&A © 2007 The Williams Companies, Inc. All rights reserved.
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations © 2007 The Williams Companies, Inc. All rights reserved.
Slide 40: Non-GAAP Disclaimer
Non-GAAP Disclaimer This presentation includes certain financial measures, EBITDA, recurring earnings, operating free cash flow and recurring segment profit, that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission. EBITDA represents the sum of net in
Slide 41: Non-GAAP Reconciliation Schedule
Non-GAAP Reconciliation Non-GAAP Reconciliation Schedule Reconciliation of Income (Loss) from Continuing Operations to Recurring Earnings (UNAUDITED) 2006 2007 (Dollars in millions, except per-share amounts) 1st Qtr* 2nd Qtr* 3rd Qtr* 4th Qtr* Year* 1st Qtr 2nd Qtr 3rd Qtr Year Income (loss) from co
Slide 42: Non-GAAP Reconciliation Schedule
Non-GAAP Reconciliation Non-GAAP Reconciliation Schedule Reconciliation of Segment Profit to Recurring Segment Profit (UNAUDITED) 2006 2007 (Dollars in millions) 1st Qtr* 2nd Qtr* 3rd Qtr* 4th Qtr* Year* 1st Qtr 2nd Qtr 3rd Qtr Year Segment profit (loss): Exploration & Production $ 147.6 $ 119.8 $ 1
Slide 43: Non-GAAP Reconciliation Schedule – EPS after MTM adjustment
Non-GAAP Reconciliation Non-GAAP Reconciliation Schedule – EPS after MTM adjustment Adjustment to remove MTM impact Dollars in millions except per share amounts 2007 3Q YTD Recurring income from cont. ops available to common shareholders $ 219 $ 607 Recurring diluted earnings per common share $ 0.36
Slide 44: Non-GAAP Reconciliation Schedule – EPS after MTM adjustment 2004-2006
Non-GAAP Reconciliation Non-GAAP Reconciliation Schedule – EPS after MTM adjustment 2004-2006 Dollars in millions except for per share amounts 2004 2005 2006 Recurring income (loss) from cont. ops available to common shareholders $ 261 $ 428 $ 520 Recurring diluted earnings per common share $ 0.49 $
Slide 45: EBITDA Reconciliation
Non-GAAP Reconciliation EBITDA Reconciliation Dollars in millions 3Q07 YTD Net Income $ 198 $ 765 Income from Discontinued Operations 30 (124) Net Interest Expense 162 494 DD&A 275 792 Provision for Income Taxes 160 417 EBITDA $ 825 $ 2,344 © 2007 The Williams Companies, Inc. All rights reserved. Wi
Slide 46: 3Q 2007 Segment Contribution
Non-GAAP Reconciliation 3Q 2007 Segment Contribution Dollars in Millions E&P Midstream Gas Pipeline Gas Marketing Other Total Segment Profit (Loss) $ 169 $ 300 $ 183 $ (67) $ - $ 585 DD&A 139 52 79 2 4 $ 275 Segment Profit (Loss) before DDA $ 308 $ 352 $ 262 $ (65) $ 4 $ 860 General Corporate Expens
Slide 47: YTD 2007 Segment Contribution
Non-GAAP Reconciliation YTD 2007 Segment Contribution Dollars in Millions E&P Midstream Gas Pipeline Gas Marketing Other Total Segment Profit (Loss) $ 566 $ 705 $ 513 $ (160) $ - $ 1,624 DD&A 384 159 236 4 8 $ 791 Segment Profit (Loss) before DDA $ 950 $ 864 $ 749 $ (156) $ 8 $ 2,415 General Corpora
Slide 48: 2007 Forecast EBITDA Reconciliation
Non-GAAP Reconciliation 2007 Forecast EBITDA Reconciliation Nov 1 Aug 2 Dollars in millions Guidance Guidance Income from Continuing Ops. $955 - 1,015 $780 - 900 Net Interest 640 - 680 640 - 700 DD&A 1,020 - 1,120 1,010 - 1,110 Provision for Income Taxes 585 - 630 525 - 590 Other/Rounding 0-5 (5) -
Slide 49: 2007 Forecast Segment Contribution
Non-GAAP Reconciliation 2007 Forecast Segment Contribution Corp/ Dollars in millions E&P Midstream Gas Pipeline Gas Mktg 1 Other Total Segment Profit (Loss) $750 - 825 $950 - 1,125 $640 - 670 $(150) - (125) $0 - 25 $2,290 - 2,445 2 DD&A 485 - 535 210 - 220 310 - 330 0 15 - 35 1,020 - 1,120 Seg. Prof
Slide 50: 2007 Forecast Guidance Contribution
Non-GAAP Reconciliation 2007 Forecast Guidance Contribution Nov 1 Aug 2 Dollars in millions, except per-share amounts Guidance Guidance Income from Continuing Operations: $955 - 1,015 $780 - 900 Non-Recurring Items (Pretax) (42) (28) Less Taxes (7) (2) Non-Recurring After Tax (35) (26) Recurring Inc
Slide 51: Appendix
Appendix © 2007 The Williams Companies, Inc. All rights reserved.
Slide 52: Exploration & Production
Exploration & Production © 2007 The Williams Companies, Inc. All rights reserved.
Slide 53: Segment Profit – Exploration & Production
Exploration & Production Segment Profit – Exploration & Production 3rd Quarter YTD Dollars in millions 2007 2006 2007 2006 Segment Profit $169 $145 $566 $412 Nonrecurring - - - - Recurring segment profit $169 $145 $566 $412 > 3Q ‘07 to 3Q ‘06 financial highlights: > 2007 YTD to 2006 YTD financial hi
Slide 54: 2007-08 Guidance
Exploration & Production 2007-08 Guidance Dollars in millions 2007 2008 Segment Profit $750 - 825 $1,000 - 1,300 950 950 1,250 Annual DD&A 485 - 535 575 - 625 Segment Profit + DD&A $1,235 - 1,360 $1,575 - 1,925 1,485 1,525 1,875 Capital Spending $1,500 - 1,600 $1,400 - 1,600 1,400 1,500 1,250 1,400
Slide 55: Rockies Producer Not Necessarily a Rockies Price Taker
Exploration & Production Rockies Producer Not Necessarily a Rockies Price Taker > Rockies price risk managed through transport and basis hedges > Our contracted pipeline 209 150 capacity moves our Rockies production to 200 more favorable price 0 10 markets 200 Firm Capacity Under Contract Wamsutter
Slide 56: 2Q '07 E&P remains a Leader in Production Growth
Exploration & Production 2Q ’07 E&P remains a Leader in Production Growth Top 20 U.S. Gas Producers Top 20 U.S. Gas Producers (sorted by 2007 MMcfd) (sorted by Growth %) MMcfd MMcfd Percent MMcfd MMcfd Percent Company Q2 2007 Q2 2006 Change Company Q2 2007 Q2 2006 Change 1 ConocoPhillips 2,319 2,428
Slide 57: Cash Margin Analysis
Exploration & Production Cash Margin Analysis Previous 2-Year Average (2007-08) Previous $6.00 $6.14 $4.08 $5.00 $4.00 $4.09 Cash Margin $3.00 $6.14 $2.00 $2.06 $1.00 $2.05 Cash Costs $1.47 $0.00 3 yr. Historical Realized Gas Price Margin/Cost Assumption F&D Costs Assumption Reflective of core basin
Slide 58: 3Q07 Net Realized Price Summary
Exploration & Production 3Q07 Net Realized Price Summary Unhedged Hedge Market Price: NYMEX $6.16 $4.11 NYMEX & Basis Collars - 1.53 Basis Differential (1.56) (0.40) Net basin market price $4.60 $5.24 Net basin market price $4.60 $5.24 Fuel & Shrinkage/Gathering/ (0.31) (0.25) Transportation Net Pri
Slide 59: 2007-08 Hedge Update
Exploration & Production 2007-08 Hedge Update 4Q 2007 2008 Fixed Price at the basin Volume (MMcf/d) 171 73 Average Price ($/Mcf) $4.16 $3.96 Collars 1 Nymex Volume (MMcf/d) 15 Average Price ($/Mcf) $6.50 - $8.25 NWPL Volume (MMcf/d) 50 140 Average Price ($/Mcf) $5.65 - $7.45 $6.12 - $9.28 EPNG San J
Slide 60: Midstream
Midstream © 2007 The Williams Companies, Inc. All rights reserved.
Slide 61: Segment Profit - Midstream
Midstream Segment Profit - Midstream 3rd Quarter YTD Dollars in millions 2007 2006 2007 2006 Segment Profit* $300 $223 $705 $508 Nonrecurring Maintenance expense accrual reversal - - (8) - Accrual for Gulf Liquids litigation - 2 - 70 International Contract Settlement - - - (6) Accounts payable accru
Slide 62: Free Cash Flow - Forecast
Midstream Free Cash Flow - Forecast $1,400 $1,300 Discretionary $1,200 Expansion $1,100 $1,000 Historic Expansion $900 $800 $700 $600 Maintenance $500 $400 $300 Well Connects $200 $100 $0 2005 2006 2008 Guidance Mid-Point to 2007 Capital Seg Capital Seg Capital Seg Capital Seg High Case Upper Limit
Slide 63: Gas Pipeline
Gas Pipeline © 2007 The Williams Companies, Inc. All rights reserved.
Slide 64: Segment Profit – Gas Pipeline
Gas Pipeline Segment Profit – Gas Pipeline 3rd Quarter YTD Dollars in millions 2007 2006 2007 2006 Segment Profit $183 $109 $513 $366 Nonrecurring Excess royalty reserve reversal - - - (2) Regulatory Liability Reduction - - (17) - Contract Termination Gain – Gray’s Harbor (12) - (18) - Recurring seg
Slide 65: 2007-08 Guidance
Gas Pipeline 2007-08 Guidance Dollars in millions 2007 2008 Segment Profit $640 - 670 $625-675 625 - 655 Annual DD&A 310 - 330 310-340 Segment Profit + DD&A $950 – 1,000 $935 – 1,015 935 - 985 Capital Spending $575 - 625 $360 – 495 460 - 565 285 - 410 Note: If guidance has changed, previous guidance
Slide 66: 2007-08 Capital Spending Detail
Gas Pipeline 2007-08 Capital Spending Detail Dollars in millions 2007 2008 Normal Maintenance/Compliance $275 - 300 $180 - 260 250 - 300 Expansion + Contributions to Gulfstream 300 - 325 180 – 235 210 - 265 105 - 150 Total $575 - 625 $360 - 495 425 - 535 285 - 410 Note: If guidance has changed, prev
Slide 67: Expanding our systems to capture growing demand
Gas Pipeline Expanding our systems to capture growing demand Jackson Prairie Nov 2008 Leidy to NE Connector Long Island Nov 2010 Dec 2007 Colorado Hub Rockies Sentinel Connection Nov 2008/2009 Connector Nov 2009 Nov 2010 Potomac Nov 2007 Pacific Connector Pipeline Nov 2011 85 North Mobile Bay May 20
Slide 68: Key Points
Gas Pipeline Key Points > Growth • 2007 Projects: − Leidy to Long Island 12/07 − Potomac 11/07 − Parachute Lateral 05/07 • Open Season: − 85 North Expansion − Northeast Connector Expansion − Mobile Bay South Expansion − Rockies Connector • Open Season Concluded − Pascagoula Expansion − Colorado Hub
Slide 69: Enterprise Risk Management
Enterprise Risk Management © 2007 The Williams Companies, Inc. All rights reserved.
Slide 70: WMB Collateral Sensitivity
Enterprise Risk Management WMB Collateral Sensitivity WMB Collateral Sensitivity Dollars in MM Margin Volatility (1% chance of exceeding) -Potential incremental collateral requirement Days 9/27/2007 6/29/2007 3/30/2007 12/29/2006 30 ($91) ($86) ($199) ($98) 180 ($198) ($236) ($442) ($434) 360 ($375)
Slide 71: Sensitivity Analysis
Enterprise Risk Management Sensitivity Analysis Dollars in millions, except per unit increases Enterprise Risk Management Sensitivity Analysis Enterprise1 Midstream2 Natural Gas Processing Margin Per MMBtu Per Gallon of NGL's Increase $0.10 $0.01 2007 $1-$3 MM $2-$5 MM 2008 $16-$20 MM $10-$15 MM 1 A
Slide 72: Consolidated
Consolidated © 2007 The Williams Companies, Inc. All rights reserved.
Slide 73: Recurring Income from Continuing Operations
Consolidated Recurring Income from Continuing Operations 3rd Quarter YTD Dollars in millions ( except per share amounts) 2007 2006 2007 2006 Income from Continuing Operations $228 $113 $642 $186 Nonrecurring Items: Regulatory & Litigation Contingencies/Settlements (14) 6 (17) 250 Reduction in regula
Slide 74: Recurring Income from Cont. Ops. after MTM Adjustment
Consolidated Recurring Income from Cont. Ops. after MTM Adjustment 3rd Quarter YTD Dollars in millions ( except per share amounts) 2007 2006 2007 2006 Recurring Inc. from Cont. Ops. Avail. to Common $219 $122 $607 $376 Recurring Diluted Earnings per Common Share $0.36 $0.20 $0.99 $0.62 Mark-to-Marke
Slide 75: EPS Metrics
Financial Results EPS Metrics 2007 1Q 2Q 3Q 4Q YTD Diluted EPS from Cont. Ops.$0.28 $0.40 $0.38 - $1.05 Recurring EPS 0.27 0.36 0.36 - 0.99 Recurring EPS after MTM Adj. 0.31 0.43 0.39 - 1.14 Average Shares (MM) 611 613 611 - 612 2006 1Q 2Q 3Q 4Q YTD Diluted EPS from Cont. Ops.$0.22 ($.10) $0.19 $0.2
Slide 76: Commodity Price Summary
Consolidated Commodity Price Summary Un-hedged Commodity Price Assumptions 2007 2008 Natural Gas: Basin Prices Average Rockies $3.60 - $4.10 $5.65 - $6.95 Average San Juan / Mid-Continent $5.80 - $6.30 $6.05 - $7.35 NYMEX (reference only) $6.60 - $7.10 $7.05 - $8.35 Crude Oil to Natural Gas Ratio 1
Slide 77: Debt Balance
Consolidated Debt Balance1 Dollars in millions Avg. Cost Debt Balance @ 12/31/06 $8,014 7.6% Scheduled Debt Retirements & Amortization (119) Debt Balance @ 3/31/07 $7,895 7.7% Additions 195 Early Retirements (175) Scheduled Debt Retirements & Amortization (4) Debt Balance @ 6/30/07 $7,911 7.6% Early
Slide 78: Debt Amortization – As of 9/30/2007
Debt Amortization – As of 9/30/2007 Dollars in millions $1,250 $1,000 $750 1173 1170 $500 998 850 785 750 700 $250 385 253 244 208 22 7 85 100 80 54 39 8 10 $0 20 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 07 008 009 010 011 012 013 014 015 016 017 018 019 020 021 022 023 024 025 026 027 02
Slide 79: 2007 Interest Expense Forecast Guidance
Consolidated 2007 Interest Expense Forecast Guidance Dollars in millions 2007 2008 Interest on Long-Term Debt $600 - $610 $615 - $635 Amortization Discount/Premium and other 25 - 30 25 - 35 Debt Expense Credit Facilities: 35 - 45 30 - 40 (Incl. Commitment Fees Plus LC Usage) Interest on other Liabil
Slide 80: 2007 Effective Tax Rates
Consolidated 2007 Effective Tax Rates 2007 2007 2007 2007 First Second Third Quarter Quarter Quarter Year-To-Date Statutory Rate 96 35% 138 35% 136 35% 370 35% State 7 3% 9 2% 11 3% 27 2% Foreign 3 1% 8 2% 7 2% 18 2% Other (1) -1% (3) -1% 6 1% 2 0% Tax Provision 105 38% 152 38% 160 41% 417 39% 2007
Slide 81: Share Repurchase Update
Consolidated Share Repurchase Update Shares and dollars in millions, except per share amounts Shares $ $/share July - - - August 7.20 $226 $31.40 September 0.25 $8 $31.23 3Q ‘07 Total 7.45 $234 $31.40 © 2007 The Williams Companies, Inc. All rights reserved. Williams 2007 Third Quarter Earnings / Nov
Slide 82: Liquidity at September 30, 2007
Consolidated Liquidity at September 30, 2007 Dollars in millions Cash and cash equivalents $ 1,455 Other current securities 44 Less: Subsidiary and Int'l cash & cash equivalents $ 465 Customer margin deposits payable 206 (671) Available unrestricted cash 828 Available revolver capacity 1,904 Total L
Slide 83: 2007 Cash Information
Consolidated 2007 Cash Information Dollars in millions 3rd Quarter YTD Beginning unrestricted cash $ 1,739 $ 2,269 Cash flow from operations 694 1,678 Capital expenditures (873) (2,100) Debt retirements (21) (318) Purchase of treasury stock (234) (234) Proceeds from debt issuance - 184 Dividends (60
Slide 84: The Williams Companies, Inc.
The Williams Companies, Inc. © 2007 The Williams Companies, Inc. All rights reserved.
The Williams Companies — Q3 2007 Earnings Presentation on 6ix