Williams Companies, Inc. (the) · NYSE:WMB
Williams Companies, Inc. (the) — Merger or Acquisition (January 2010)
30 slides from Williams Companies, Inc. (the)'s merger presentation, Jan 19, 2010
Slide 1: Strategic Restructuring Transaction
Strategic Restructuring Transaction Steve Malcolm, Chairman, President and CEO January 19, 2010
Slide 2: Important Information
Important Information This document is provided for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell units of Williams Partners L.P. ("WPZ") or Williams Pipeline Partners L.P. ("WMZ"). WPZ intends to file a registration statement and tender offer
Slide 3: WMB Forward-Looking Statements
WMB Forward-Looking Statements Our reports, filings, and other public announcements may 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 Litigat
Slide 4: WPZ Forward-Looking Statements
WPZ Forward-Looking Statements Williams Partners L.P. is a limited partnership formed by The Williams Companies, Inc. (Williams). Our reports, filings, and other public announcements may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Su
Slide 5: WPZ Forward-Looking Statements (cont'd)
WPZ Forward-Looking Statements (cont'd) Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement, we caution investors not to unduly rely on our forward-looking statements. We disclaim any obligations to a
Slide 6: Transaction Overview
Transaction Overview Accelerates WMB's MLP strategy WMB shifts assets and debt to WPZ; increases ownership of WPZ to 80% Result is consolidation of WMB's regulated pipeline, midstream, WPZ, and WMZ interests into one entity with expected investment-grade ratings Transforms WPZ into top-3 MLP with $2
Slide 7: Transaction Detail
Transaction Detail Pipeline assets, excluding 25.5% interest in Gulfstream Midstream assets, excluding Canada, olefins and Venezuela GP & LP interests in WMZ ~$2.0 B of existing gas pipeline-level debt Step 1: Asset Contribution Step 2: WMZ Exchange Offer WMB WPZ WPZ WMZ Public Unitholders After Ste
Slide 8: Gas Pipeline Simplifies WMB's Corporate Structure
Gas Pipeline Simplifies WMB's Corporate Structure The transaction simplifies WMB's corporate structure and positions both entities with investment-grade capital structures Operational structure is unchanged Current Structure Pro Forma (1) Consolidated Debt: Corp Debt: 2010E Seg Profit + DD&A: $8.8 B
Slide 9: WMB Rationale and Benefits
WMB Rationale and Benefits Large diversified MLP will have more reliable access to market and investment-grade ratings Significantly increases capital availability Lowers cost of capital Improves competitiveness of gas pipeline and midstream businesses Improves ability to fund additional projects an
Slide 10: WPZ Rationale and Benefits
WPZ Rationale and Benefits Creates one of the largest diversified MLPs with best-in-class assets and strong growth outlook Increased scale, scope and diversification due to the addition of premier FERC regulated interstate pipelines and midstream assets Expected to improve WPZ valuation and create s
Slide 11: WPZ Investment Highlights
WPZ Investment Highlights One of the largest diversified MLPs $12 B in assets $2 B in 2010E segment profit + DD&A Initial increase in distribution; attractive distribution growth outlook Expected investment-grade ratings with strong access to capital markets Suite of attractive growth projects and o
Slide 12: Assets in Key Growth Markets
Assets in Key Growth Markets Paradox Basin San Juan Basin Marcellus Shale Basin Piceance Basin Wamsutter Area Greater Green River Basin Northwest Pipeline: 4,000 miles 41 compressor stations 3.4 Bcf / d capacity Transco Pipeline: 10,000 miles 44 compressor stations 8.6 Bcf / d capacity Gulfstream Pi
Slide 13: Comparison of WPZ Pre- and Post-Transaction
WPZ 0.298 0.298 Pro Forma WPZ 0.985 1.025 2.01 Comparison of WPZ Pre- and Post-Transaction WPZ 2.9 2.9 Pro Forma WPZ 17.7 2.2 19.9 Distribution Coverage Ratio Distribution / LP Unit 2010E Segment Profit + DD&A ($ B) Firm Value ($ B) (1) Indicative Yield (2) Gas Pipes Midstream Midstream Significantl
Slide 14: WPZ Will Become a Top-3 Diversified MLP
WPZ Will Become a Top-3 Diversified MLP Pro forma WPZ becomes one of the largest MLPs $12 B in assets $2 B of 2010E segment profit + DD&A Likely to be compared against the diversified MLPs, which currently trade in the 6.6% - 7.9% yield range Structured to attain size and diversified business mix, i
Slide 15: WMB and WPZ Interests Aligned, Growth Outlook Enhanced
WMB and WPZ Interests Aligned, Growth Outlook Enhanced Increased growth projects and acquisitions at WPZ... Growth capital funded at WPZ Increase in EBITDA and distributable cash flow Increase in unit distributions Growth in unit price ....Lead to more value at WMB Ability to focus WMB's free cash f
Slide 16: Overview of Pro-Forma WMB
Overview of Pro-Forma WMB WPZ LP and GP interests total 80% 78% LP interest (214.6 MM common units) 2% GP interest Annual distributions to WMB at $2.63 / unit: ~$755 MM ~$565 MM LP distributions ~$190 MM GP distributions(1) Premier E&P business 1.2 Bcfe/d production (as of 3Q '09) Premier portfolio
Slide 17: WMB Investment Highlights
WMB Investment Highlights Leading integrated natural gas company WPZ, a top-3 diversified MLP with premier gas pipeline and midstream businesses Growth opportunities with premier E&P assets and Canadian midstream Stable, significant LP and GP cash flows from WPZ Large, diversified MLP with a suite o
Slide 18: New Structure Facilitates WMB Valuation
New Structure Facilitates WMB Valuation WMB Segments Valuation Other Adjustments Less WMB corporate-level net debt, plus market value of interest in APCO Structure is simplified and implied value of WMB share price easier to calculate EBITDA, less Gulfstream debt @ 25.5% Canada, olefins and 25.5% in
Slide 19: Transaction Summary
Transaction Summary Creates one of the largest diversified MLPs with best-in-class assets WPZ's pro forma 2010E segment profit + DD&A of $2.0 B(1) will make it the 3rd-largest energy MLP Significantly enhances access to capital Ability to fund projects and acquisitions with more reliable access to a
Slide 20: Williams.
2 Williams. a" —<—D Williams. l a Ingenuity takes energy.”
Slide 21: Appendix
Appendix
Slide 22: Asset Contribution
Asset Contribution Contribution of WMB gas pipeline and midstream businesses, excluding Canada, olefins, Venezuela and 25.5% of Gulfstream Consideration received of 203 MM WPZ units and $3.5 B of cash, less WPZ transaction fees and expenses WMB Bond Tender Offer Tender offer for up to $3.0 B of WMB
Slide 23: Summary Timetable
Summary Timetable January 19: Announce transaction Initiate WMB bond tender offer Early February: Early tender date for WMB bond tender Launch and price WPZ private debt offering Week of February 15: HSR clearance Close WMB bond tender Close Asset Contribution transaction 1H 2010 Expect to launch an
Slide 24: Commodity price assumptions
Commodity price assumptions Reflects 3Q '09 Guidance
Slide 25: WPZ pro-forma guidance
ss WPZ pro-forma guidance ner en 2014 Low Midpoint High Distibatatie Cash Flaw (n milion) S10 $1318 S580 (Cash Ostnbutions per LP Unt 30 DTD Distrbaion Coverage Ratio 42x 44x 47% Note: ealevated at 2010 tution Segment Pratt Gn mlions) ‘Migetream sors S875 81,075, Gas Pipetne 5067680, Total Segment P
Slide 26: 2010 Recurring Segment Profit & EPS Guidance Retained by WMB
2010 Recurring Segment Profit & EPS Guidance Retained by WMB Retained by WMB a a Reflects 3Q '09 Guidance
Slide 27: 2011 Recurring Segment Profit & EPS Guidance Retained by WMB
2011 Recurring Segment Profit & EPS Guidance Retained by WMB Retained by WMB a a Reflects 3Q '09 Guidance
Slide 28: Pre-Transaction View of WPZ
28 Pre-Transaction View of WPZ Current WPZ Geographic Overview Gathering Processing Discovery Pipeline Legend Fractionator Underground Storage 2010E Pre-Transaction Business Mix Midstream East 298 Asset Profile: Before the transaction, WPZ owns and operates approximately: 5,200 miles of gathering pi
Slide 29: Post-Transaction View of WPZ
29 Post-Transaction View of WPZ WPZ pipeline and midstream assets will span most major gas producing basins in the West, Midcontinent, South, and East Northwest Pipeline Transco Pipeline Gulfstream Gathering Processing LNG Storage Northwest Pipeline Transco Pipeline Gulfstream Pipeline Cardinal Pipe
Slide 30: Williams.
2 Williams. a —<—D Williams. l a Ingenuity takes energy.”
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