Williams Companies, Inc. (the) · NYSE:WMB
Williams Companies, Inc. (the) — The Williams Companies — Non-Deal Roadshow (August 2016)
31 slides from Williams Companies, Inc. (the)'s roadshow presentation, August 2016
Slide 1: Williams and Williams Partners
Williams and Williams Partners Alan Armstrong, Chief Executive Officer Don Chappel, Chief Financial Officer August 2016
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 “forwar
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; – Williams’ costs and funding obligations for def
Slide 4: Investment Highlights
Investment Highlights A > Business aligned to emerging demand-side opportunities, connecting best supplies to best markets Where We > Key infrastructure positions across natural gas value chain established, including the Have Been nations largest, fastest-growing interstate pipeline system > Stated
Slide 5: Connecting Growing Regional Natural Gas Demand with Best-in-Class Natural Gas Producers
A Connecting Growing Regional Natural Gas Demand with Best-in-Class Natural Gas Producers Poised to Capture Emerging, Demand-side Opportunities +25 19 44 +1 +2 +3 15 16 11 13 15 18 -1 15 14 +17 24 41 +4 +6 12 16 39 45 Regional Production change, 2015 to 2025 (Bcf/d) (1) Regional Dema
Slide 6: WPZ Fee-based Revenues Increased Over $2.6 Billion While NGL Margins Declined 85%
A WPZ Fee-based Revenues Increased Over $2.6 Billion While NGL Margins Declined 85% 2015 > Buckinghorse Plant 2011 to 2015 ($MM) > Geismar Expansion 2014 > Mobile Bay South III > CPV Woodbridge > Access Acquisition > NE Connector > Gulfstar One > Rockaway Lateral 2013 > OVM De-ethanizer > OVM Proces
Slide 7: First Half 2016 Summary: Premier Natural Gas Asset Portfolio Performing Well
B First Half 2016 Summary: Premier Natural Gas Asset Portfolio Performing Well > GAAP Measures: Net Income(Loss), Segment Modified EBITDA - Affected by Impairment on Planned Canadian Asset Sale > 1H 2016 Net Income/(Loss) attributable to WPZ of $(40) million, inclusive of impairment on planned Canad
Slide 8: New Financial Actions Position Williams for Continued Future Growth
B New Financial Actions Position Williams for Continued Future Growth and Strengthen WMB & WPZ Credit Profile Expected 2016-2017 Capital Spending, Dividend, Distribution and DRIP Plan Actions Designed to Enhance Value, Strengthen Credit Profile & Fund Development of Significant Portfolio of Fee-base
Slide 9: Cash Reinvestment Immediately Strengthens Williams
B Cash Reinvestment Immediately Strengthens Williams Reinvesting Internally Generated Cash Flow Mitigates External Funding, Strengthens Investment Grade Ratings and Improves Distribution Coverage CASH REINVESTMENT STRATEGY ILLUSTRATIVE NEXT TWELVE MONTHS OVERVIEW IMPACT OF WMB DRIP PLAN ($Bn) Impact
Slide 10: Significant Demand Growth Forecasted in Markets Served by Transco
C Significant Demand Growth Forecasted in Markets Served by Transco N.A. CUMULATIVE DEMAND GROWTH BY N. A. MARKET SECTOR DEMAND REGION SINCE 2015 (Bcf/d) PULL THROUGH 2025 (Bcf/d) 35 > Industrial 6.2 30 > Power 4.0 25 20 > Residential/Commercial 1.4 15 > Other 3.1 10 > Transport 0.9 5 > LNG exports
Slide 11: Northeast Leads Production Growth Through 2025
C Northeast Leads Production Growth Through 2025 Supplying 80 Percent of North American Demand Growth N.A. CUMULATIVE NATURAL GAS PRODUCTION GROWTH BY REGION SINCE 2015 (Bcf/d) 40 35 Northeast 30 Permian 25 Gulf Coast 20 Gulf of Mexico Rockies 15 Mid-Continent 10 Fort Worth WCSB 5 Sa
Slide 12: Supply Continues to Grow, Led by Northeast; Poised to Meet Demand Growth
C Supply Continues to Grow, Led by Northeast; Poised to Meet Demand Growth in Markets Served by Transco N.A. CUMULATIVE DEMAND GROWTH BY N.A. CUMULATIVE PRODUCTION REGION SINCE 2015 (Bcf/d) GROWTH SINCE 2015 (Bcf/d) 40 40 30 30 20 20 10 10 0 0 -10 -10 2016 2017 2018 2019 2020 2021 2022 2023 2024 202
Slide 13: Transco is Advantaged to Compete for Significant North American Demand Growth
C Transco is Advantaged to Compete for Significant North American Demand Growth LNG Export Demand Growth Accounts for >50% of Total Demand Growth Along Transco Through 2025 Demand Pull Through 2025 in Bcf/d LNG Exports 11.0 21.4 Mexico Exports 3.1 Bcf/d Industrial 2.3 Power 2.1 Other 2.9 Source: Woo
Slide 14: Fully Contracted Expansions in Markets Served by Transco
C Fully Contracted Expansions in Markets Served by Transco BCF/D Constitution(2) (0.7 Bcf/d) Williams Project Capacity New York Bay (Placed in service in 2016, in 7.6 Expansion (0.1 Bcf/d) execution or negotiating) Leidy Southeast Northeast Supply (0.5 Bcf/d) Enhancement Forecasted Demand Growth(1)
Slide 15: Structural Growth Drivers in Place; Expect ~$11 Billion of New Capital In Service
C Structural Growth Drivers in Place; Expect ~$11 Billion of New Capital In Service 2015–2017 APPROXIMATE CUMULATIVE CAPITAL PLACED IN SERVICE BY YEAR ($Bn)(1) $11 $4 Billion of additional fully- contracted assets to be placed in service in 2017 –Interstate projects: • Gulf Trace, Hillabee Ph. 1, Da
Slide 16: Williams' Public Market Valuation Discounts Our Increasing Fee-Based Revenue
C Williams’ Public Market Valuation Discounts Our Increasing Fee-Based Revenue Driven by Our Multi-Year Capital Program ENTERPRISE VALUE / FORWARD EBITDA(2) WMB RECENT TRADING HISTORY ROLLING 30-DAY AVERAGE > Over the past 3 years, WMB generally traded in-line 20.0x with its peer set > However, over
Slide 17: Summary Public Market Data
C Summary Public Market Data As of July 29, 2016 Williams Companies, Inc. (WMB) Williams Partners (WPZ) Current share / unit price $23.97 $37.34 52-Week High $55.42 $47.21 Upside to Current Price (%) 131% 26% Analyst Price Target ($) (High) $28.00 $40.00 Upside to Current Price (%) 17% 7% Equity Val
Slide 18: Mitigation of Counter-party Risk Differs Between Services Provided
C Mitigation of Counter-party Risk Differs Between Services Provided HIGH LEVEL OF VOLUME AGGREGATION: LOW LEVEL OF VOLUME AGGREGATION: INTERSTATE PIPELINE TRANSPORTATION ESSENTIAL MIDSTREAM SERVICES > Credit quality is key risk mitigant for interstate > Credit quality of counter-parties less critic
Slide 19: Investment Highlights
Investment Highlights A > Business aligned to emerging demand-side opportunities, connecting best supplies to best markets Where We > Key infrastructure positions across natural gas value chain established, including the Have Been nations largest, fastest-growing interstate pipeline system > Stated
Slide 20: Appendix
Appendix
Slide 21: Second Quarter 2016 Summary: Premier Natural Gas Asset Portfolio Performing Well
Second Quarter 2016 Summary: Premier Natural Gas Asset Portfolio Performing Well > GAAP Measures: Net Income(Loss), Segment Modified EBITDA - Affected by Impairment on Planned Canadian Asset Sale > 2Q 2016 Net Income/(Loss) attributable to WPZ of $(90) million, inclusive of impairment on planned Can
Slide 22: Continue to Realize Execution Milestones
Continue to Realize Execution Milestones Recent Developments > Transco – Garden State: FERC approval received for ~180 MMcf/ expansion to serve increased demand in New Jersey > Transco – New York Bay: FERC approval received for ~115 MMcf/d expansion with expected 4Q 2017 in-service date > Transco –
Slide 23: Demand-driven Fee-based Projects Expected to Drive Continued Strong Performance
Demand-driven Fee-based Projects Expected to Drive Continued Strong Performance Williams Partners Guidance 2016 and 2017 Guidance Williams Partners 2016 Williams Partners 2016 2017 (Amount in billions) (Amount in billions) Net income $0.9 Growth Capital & Investment Expenditures $1.9 $3.1 Adjusted E
Slide 24: Focused on Safe, Reliable Operations
Focused on Safe, Reliable Operations > Safety metrics embedded in annual incentive plans # INCIDENTS / 1,000 MILES WILLIAMS TRIR (Total Recordable Incident Rate) 2.74 0.4 0.4 0.4 0.4 0.4 0.4 0.3 1.79 0.3 0.3 1.35 0.2 0.83 INDUSTRY WILLIAMS 2011 2012 2013 2014 2015 2012 2013 2014 2015 PHMSA reports a
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 26: Non-GAAP Disclaimer
Non-GAAP Reconciliations Non-GAAP Disclaimer > This presentation may include certain financial measures – adjusted EBITDA, adjusted income (“earnings”), adjusted earnings per share, cash available for dividends, dividend coverage ratio, distributable cash flow and cash distribution coverage ratio –
Slide 27: Reconciliation of Non-GAAP Adjusted EBITDA and Distributable Cash Flow to GAAP Net Income
WPZ Non-GAAP Reconciliations Reconciliation of Non-GAAP Adjusted EBITDA and Distributable Cash Flow to GAAP Net Income 27 Williams and Williams Partners Roadshow | August 2016 © 2016 The Williams Companies, Inc. All rights reserved.
Slide 28: Reconciliation of Non-GAAP Adjusted EBITDA and Distributable Cash Flow to GAAP Net Income (cont'd)
WPZ Non-GAAP Reconciliations Reconciliation of Non-GAAP Adjusted EBITDA and Distributable Cash Flow to GAAP Net Income (cont’d) 28 Williams and Williams Partners Roadshow | August 2016 © 2016 The Williams Companies, Inc. All rights reserved.
Slide 29: Reconciliation of Modified EBITDA to Non-GAAP Adjusted EBITDA
WPZ Non-GAAP Reconciliations Reconciliation of Modified EBITDA to Non-GAAP Adjusted EBITDA 29 Williams and Williams Partners Roadshow | August 2016 © 2016 The Williams Companies, Inc. All rights reserved.
Slide 30: Adjustments to Modified EBITDA by Segment
WPZ Non-GAAP Reconciliations Adjustments to Modified EBITDA by Segment 30 Williams and Williams Partners Roadshow | August 2016 © 2016 The Williams Companies, Inc. All rights reserved.
Slide 31: Reconciliation of Non-GAAP Adjusted EBITDA and Distributable Cash Flow (2016 Guidance)
WPZ Non-GAAP Reconciliations Reconciliation of Non-GAAP Adjusted EBITDA and Distributable Cash Flow to GAAP Net Income (2016 Guidance) 31 Williams and Williams Partners Roadshow | August 2016 © 2016 The Williams Companies, Inc. All rights reserved.
The Williams Companies — Non-Deal Roadshow (August 2016) on 6ix