Williams Companies, Inc. (the) · NYSE:WMB
Williams Companies, Inc. (the) — Merger or Acquisition (January 2017)
24 slides from Williams Companies, Inc. (the)'s merger presentation, Jan 9, 2017
Slide 1: Financial Repositioning for Long-Term, Sustainable Growth
Financial Repositioning for Long-Term, Sustainable Growth January 9, 2017 Williams and Williams Partners Exhibit 99.2
Slide 2: Forward Looking Statements
Forward Looking Statements The reports, filings, and other public announcements of The Williams Companies, Inc. (Williams) and Williams Partners L.P. (WPZ) may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are “forward-
Slide 3: Forward Looking Statements (cont'd)
Forward Looking Statements (cont’d) The impact of existing and future laws, regulations, the regulatory environment, environmental liabilities, and litigation, as well as our ability to obtain permits and achieve favorable rate proceeding outcomes; Our costs and funding obligations for defined benef
Slide 4: Transaction Overview
Transaction Overview Williams (WMB) and Williams Partners (WPZ) to permanently waive payment obligations under the IDRs and convert WMB’s economic general partner interest into a non-economic interest in exchange for 289 million newly issued WPZ common units Transaction valued at approximately $11.4
Slide 5: Transaction Rationale and Highlights
Transaction Rationale and Highlights Permanent waiver of IDRs, conversion of economic general partner interest into a non-economic interest and a right-sized distribution payout expected to significantly reduce WPZ’s cost of equity Positions WPZ as an efficient financing vehicle for the Williams com
Slide 6: Summary Business Update
Summary Business Update Clear line of sight to continued strong growth in natural gas demand driven by LNG exports, industrial, LDCs, power generation, Mexican exports, and other Best supply basins respond to demand growth with relief of infrastructure constraints Natural gas market growth = William
Slide 7: WPZ and WMB Key Guidance Metrics
WPZ and WMB Key Guidance Metrics Dividend & Growth Rate 2017 $4.6 billion a 2017 Total WPZ 2017 Transco $2.1 to $2.8 billion $1.4 to $1.9 billion 2017 Distribution Expected Growth Rate $2.40 per L.P. unit 5% to 7% annual growth 2017 Cash Distribution Coverage Ratio ~1.2x a 2017 Debt / EBITDA b < 4.5
Slide 8: NTM Enterprise Value / EBITDA Multiple: WMB Undervalued Relative to Peer and Historical Levels
NTM Enterprise Value / EBITDA Multiple x WMB Undervalued Relative to Peer and Historical Levels 3 Years Prior to ETE Transaction a During ETE Transaction b Since ETE Transaction Termination c Source S&P Capital IQ (a) June 19, 2012 – June 19, 2015 (b) June 19, 2015 – June 28, 2016 (c) June 29, 2016
Slide 9: Transactions Provide Clarity and Support Growth Opportunities
Review of asset portfolio to ensure maximum capital deployment efficiency Enhanced financial strength to fund growth opportunities Transactions Provide Clarity and Support Growth Opportunities Solidifies WPZ’s investment grade credit rating WMB consolidated leverage of < 5.25x (a) Provides for Accel
Slide 10: Appendix
Appendix 9
Slide 11: WPZ Producing Steady, Predictable Adjusted EBITDA and DCF
WPZ Producing Steady, Predictable Adjusted EBITDA and DCF Adjusted EBITDA and DCF are non-GAAP financial measures. A reconciliation of Adjusted EBITDA and DCF to Net Income is included at the back of this presentation. Capital program focused on Transco and other fee-based revenue $2.7 B - $3.2 B gr
Slide 12: Steady Natural Gas Demand Growth to Continue
Steady Natural Gas Demand Growth to Continue Sources: Wood Mackenzie 1H 2016; historical Henry Hub natural gas prices per Energy Information Administration- 2016 price is YTD as of Nov. 15th NORTH AMERICAN NATURAL GAS DEMAND BY SECTOR (2008-2020) ‘08-’16 Key Demand Drivers Power 10.1 Industrial 4.1
Slide 13: Leading Fee-based Natural Gas Assets
+12 24à 36 +2 15 à 17 +3 37à 40 +7 26à 33 0 13à 13 Regional Production change, 2016 to 2020 (Bcf/d) (1) Regional Demand change, 2016 to 2020 (Bcf/d) (1) Leading Fee-based Natural Gas Assets Focus on connecting demand growth with best supply basins Source: Wood Mackenzie 1H 2016; Excludes net Canadia
Slide 14: Fully Contracted Regulated Pipeline Growth
Fully Contracted Regulated Pipeline Growth In-service dates for projects not yet in service represent expected in-service dates. Expected in-service dates assume timely receipt of all necessary regulatory approvals. Constitution which is subject to litigation and is not included in financial forecas
Slide 15: Williams Exposed to High Growth Areas and Sub-plays Within Best Basins
Williams Exposed to High Growth Areas and Sub-plays Within Best Basins Source: Wood Mackenzie 1H 2016 Areas served by Williams G&P assets defined as Bradford Area and Susquehanna Core for Marcellus NE; Greene Dry Gas, Pittsburgh Area, Rich Gas Core, and West Virginia Rich Gas for Marcellus SW; Lean
Slide 16: Goal: add to our $7 billion of fully contracted 2015-2020 expansions
Goal: add to our $7 billion of fully contracted 2015-2020 expansions $7 billion of fully contracted Transco expansions are planned to be placed into service 2015-2020 – all supported by long-term firm demand charge contracts Pursuing numerous additional expansion opportunities: Transco, Gulfstream a
Slide 17: Leading asset footprint in low cost, high growth resource plays
Leading asset footprint in low cost, high growth resource plays positioned to deliver significant EBITDA growth Volume growth consistent with WoodMac forecast (~12% CAGR, ‘16 to ‘20) could more than double EBITDA in NE G&P segment by 2020 Operating leverage and highly efficient incremental capital a
Slide 18: Non-GAAP Reconciliations
Non-GAAP Reconciliations 9
Slide 19: Non-GAAP financial measures definitions
This presentation may include certain financial measures – adjusted EBITDA, distributable cash flow and cash distribution coverage ratio – that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission. Our segment performance measure, modified EBITDA, is d
Slide 20: Non-GAAP financial measures definitions (cont'd)
This presentation may include certain financial measures – adjusted EBITDA, distributable cash flow, cash available for dividends and other uses, dividend coverage and cash distribution coverage ratio – that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Co
Slide 21: WPZ Reconciliation of GAAP Net Income to Non-GAAP Modified EBITDA, Adjusted EBITDA and Distributable Cash Flow
WPZ Reconciliation of GAAP Net Income to Non-GAAP Modified EBITDA, Adjusted EBITDA and Distributable Cash Flow (1) WPZ Reconciliation of GAAP Net Income to Non-GAAP Modified EBITDA, Adjusted EBITDA and Distributable Cash Flow 2017 (Dollars in billions, except coverage ratios) Guidance Net income (lo
Slide 22: WMB Dividend Coverage Ratio
WMB Dividend Coverage Ratio WMB Dividend Coverage Ratio 2017 (Dollars in billions, except per share amounts) Guidance Distributions from WPZ (accrued / “as declared” basis) $1.6 Corporate interest -0.3 Subtotal $1.3 WMB cash tax rate 0.0% WMB cash taxes (excludes cash taxes paid by WPZ) 0 Corporate
Slide 23: WPZ Non-GAAP Reconciliations
WPZ Non-GAAP Reconciliations Reconciliation of Non-GAAP Adjusted EBITDA and Distributable Cash Flow to GAAP Net Income
Slide 24: WPZ Non-GAAP Reconciliations (cont'd)
WPZ Non-GAAP Reconciliations Reconciliation of Non-GAAP Adjusted EBITDA and Distributable Cash Flow to GAAP Net Income (cont’d)
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