Williams Companies, Inc. (the) · NYSE:WMB

Williams Companies, Inc. (the) — Q3 2023 Earnings Presentation

49 slides from Williams Companies, Inc. (the)'s earnings presentation, Nov 2, 2023

  1. Slide 1: Williams 3rd Quarter 2023 Earnings Call

    Williams 3rd Quarter 2023 Earnings Call WILLIAMS © 2023 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams 3rd Quarter 2023 Earnings Call I November 2, 2023 I www.williams.com 1

  2. Slide 2: Continued Operational Execution, Enhanced Strategic Footprint, Predictable Earnings Growth

    CONTINUED ENHANCED PREDICTABLE OPERATIONAL EXECUTION STRATEGIC FOOTPRINT EARNINGS GROWTH Completed expansions: Strategic developments: Financial performance: • Regional Energy Access Phase 1 • Sold non-core Bayou Ethane • Strong financial performance • NorTex Wolf Hollow Expansion system despite Hen

  3. Slide 3: Strong Financial Performance Across Key Financial Metrics

    Strong Financial Performance 3Q 3Q 3Q YTD 3Q YTD Change Change Across Key Financial Metrics 2023 2022 2023 2022 Adjusted EBITDA $1,652 $1,637 1% $5,058 $4,644 9% Base business Adjusted EBITDA1 $1,554 $1,472 6% $4,613 $4,245 9% Adjusted Earnings per Share $0.45 $0.48 (6%) $1.43 $1.29 11% Available Fu

  4. Slide 4: Core business performance drivers: 3Q 2023 vs. 3Q 2022

    Core business performance drivers WMB Adjusted EBITDA ($MM): 3Q 2023 vs. 3Q 2022 Transmission & GOM Higher earnings due to the MountainWest and Core Business Performance NorTex acquisitions and favorable segment costs $1,800 Northeast G&P $21 ($22) Increased revenues at our Ohio Valley Midstream $83

  5. Slide 5: Core business performance drivers: 3Q 2023 YTD vs. 3Q 2022 YTD

    Core business performance drivers WMB Adjusted EBITDA ($MM): 3Q 2023 YTD vs. 3Q 2022 YTD Transmission & GOM Higher earnings due to the MountainWest and Core Business Performance NorTex acquisitions, increased gas transmission $5,300 revenues, increased Gulf of Mexico revenues driven ($92) by Taggart

  6. Slide 6: Why Williams? Track record of creating shareholder value

    WHY WILLIAMS? S TA B L E P R E D I C TA B L E FINANCIAL SHAREHOLDER GROWTH EARNINGS STRENGTH RETURNS Track record of creating shareholder value Williams has demonstrated a long history of value creation to its shareholders through our strong balance sheet, durable returns, growing dividend and high-

  7. Slide 7: Appendix

    Appendix WILLIAMS © 2023 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams 3rd Quarter 2023 Earnings Call I November 2, 2023 I www.williams.com 7

  8. Slide 8: Core business performance drivers: 3Q 2023 vs. 2Q 2023

    Core business performance drivers WMB Adjusted EBITDA ($MM): 3Q 2023 vs. 2Q 2023 Transmission & GOM Core Business Performance Higher earnings driven by one additional $1,700 billable day at Transco and increased Gulf of Mexico volumes; partially offset by higher seasonal operating and maintenance co

  9. Slide 9: $6.4B+ 2022 Adj. EBITDA by business

    NGL services1 1% $6.4B+ 2022 Adj. EBITDA ~1% from NGL Services Marketing services 4% ~4% from Gas and NGL Marketing Services E&P 6% ~6% from E&P Joint Ventures Other Onshore Oil Basin2 2% Eagle Ford 6% ~8% from G&P SW Wyoming / Wamsutter 1% serving on-shore oil-directed supply areas Piceance 2% Blue

  10. Slide 10: Quarterly growth vs. commodity prices, indexed to 100

    Quarterly Growth: Williams Base Business Adjusted EBITDA1, Contracted Transmission Capacity and Gathering Volume vs. Crude Oil and Natural Gas Commodity Prices 250 Capacity + Indexed to 100 200 Volume Oil Price 150 Adj. EBITDA 100 Gas Price 50 2015 2016 2017 2018 2019 2020 2021 2022 2023 WTI Oil Pri

  11. Slide 11: Bayou Ethane Sale and DJ Basin Optimization

    Completed the sale of our Bayou Ethane system for $348MM, representing an attractive multiple of over 14x last twelve months (LTM) Adjusted EBITDA; Agreed to long-term ethane take away agreements locking in flow assurance for Discovery Bayou Ethane Sale and Mobile Bay producers as part of transactio

  12. Slide 12: Capturing synergies through integration of G&P and downstream assets

    Optimizing product flow Enhancing full NGL & gas value chain across our assets Capturing synergies through OPPL Cureton gathering Cureton processing plant DJ BASIN integration of G&P and Williams/RMM gathering Overland Pass Pipeline (OPPL) Williams processing plant downstream assets In-basin optimiz

  13. Slide 13: Increasing mid-point of full-year guidance

    Original 2023 Updated 2023 Financial Metric Guidance Guidance Adjusted EBITDA $6.4B - $6.8B $6.6B - $6.8B (Includes upstream contributions) ($230MM - $430MM) Adjusted Diluted EPS1 $1.67 - $1.92 $1.78 - $1.90 Available Funds From Operations (AFFO) $4.725B - $5.125B $5.0B - $5.2B AFFO Per Share $3.86

  14. Slide 14: Capital allocation priorities

    Capital allocation priorities: • Protect long-term health of balance sheet and investment-grade rating Maintain financial strength 1 • 2023 Debt-to-Adjusted EBITDA guidance ~3.65x • Preserve long-standing commitment to shareholder returns and grow dividend Dividends 2 • in-line with core business Ad

  15. Slide 15: Strong liquidity and minimal near-term debt maturities

    Strong liquidity and minimal near-term debt maturities Principal Value of Debt Maturities 3.65x 1.15x improvement 2023 guidance for in leverage since 20182 as of September 30, 2023 Debt-to-Adjusted EBITDA1 ($ in millions) $330 Investment $2,575 BBB/Baa2 grade rated Credit Rating across all rating ag

  16. Slide 16: All approved LNG export facilities within Transco corridor

    All approved LNG export facilities within Transco corridor Forecasted U.S. L-48 LNG Export Annual Volume Cumulative Growth U.S. L-48 Large Scale Approved Liquefaction Facilities Per EIA¹ (2022 – 2032) Project Name Bcf/d² Project Name Bcf/d² 18 LNG export Operational Awaiting FID volumes expected 16

  17. Slide 17: Lower-48 natural gas demand including exports

    Total demand including exports averaged 104 Bcf/d for 3Q 2023 YTD compared to 102 Bcf/d for 3Q 2022 YTD, driven by strong Power sector demand LNG & MEXICAN POWER GEN INDUSTRIAL RES / COM EXPORTS Bcf/d Bcf/d Bcf/d Bcf/d 40 40 40 40 7.2% 35 35 35 35 30 30 30 30 25 25 25 25 -0.8% 20 20 20 -6.6% 20 5.5%

  18. Slide 18: Tracking in line with expected long-term Adjusted EBITDA growth

    CONTINUED GROWTH AFTER RECORD YEARS, WITH A SIGNIFICANT EARNINGS STEP-UP AHEAD Transmission Gathering & Processing 2024 uplift Wolf Hollow Expansion 3Q’23 ✓ South Mansfield 3Q’23 ✓ 2025 uplift Regional Energy Access (Phase 1) 4Q’23 ✓ Cardinal expansion (Phase 1) 3Q’23 4Q’23 ✓ 2026 uplift Carolina Ma

  19. Slide 19: Transco expansion projects

    Target In- Project Current Status Project Capacity 1 Service ~1/2 in service; Regional Energy Partial ISD 4Q’23; Access 1 Full ISD 4Q’24 ~1/2 under 829 MMcf/d construction Southeast Supply Signed precedent 2 2 4Q’27 1.43 Bcf/d Enhancement agreements 3 5 4 Commonwealth Energy Connector 3 4Q’25 Receiv

  20. Slide 20: Reducing emissions: NWP compressor replacement

    Phased replacement of up to 184 compressor Reducing units Up to transmission compressor methane emissions $1.3B in anticipated >50% capital spend through 2030 Implemented Reducing tracker for transmission NOx emissions by NWP >75% customers Transco Compressor Station 175 in Virginia WILLIAMS © 2023

  21. Slide 21: Gulf of Mexico projects expected to double GOM Adjusted EBITDA

    Whale WESTERN ▪ Expected in service date: 4Q 2024 GULF OF MEXICO ▪ Expected CAPEX: ~$450MM ▪ Combined reserves: ~545 MMboe: Oil: 380 MMbbls, Gas: 1,000 Bcf Shenandoah Salamanca ▪ Expected in service date: 4Q 2024 ▪ Expected in service date: 2Q 2025 ▪ Expected CAPEX: ~$160MM ▪ Expected CAPEX: Zero ▪

  22. Slide 22: Leveraging operational expertise to drive projects from recent acquisitions

    Leveraging our operational expertise and footprint to drive transmission, gathering and MOUNTAINWEST storage projects from recent acquisitions TRACE MIDSTREAM Overthrust Westbound Expansion • Providing up to 325 MMcf/d of incremental firm Haynesville West Expansion transportation service on Overthru

  23. Slide 23: Northeast gathering capacity and takeaway

    Build out gathering capacity • Adding over 740 MMcf/d of capacity through 2 Northeast expansion projects underway and 2 recently placed in service Support increased basin takeaway for Gathering and Processing assets • Mountain Valley Pipeline (MVP) and Regional Energy Access (REA) to increase Northe

  24. Slide 24: Northeast gathering expansions: Susquehanna and Cardinal

    Map of Williams’ Northeast Assets Susquehanna Gathering expansion o Scope: ~22 miles of gathering pipeline and incremental compression 2 1 o o Expected in service date: 4Q 2023 Incremental capacity: 320 MMcf/d 1 Utica Cardinal gathering expansion Interstate Natural Gas Pipeline Natural Gas Gathering

  25. Slide 25: Strategically Positioned: Capturing Northeast Volume Growth

    Strategically Positioned: Capturing Northeast Volume Growth Northeast Natural Gas Williams Northeast Natural Gas Bcf/d Bcf/d Production Gathering Volumes 36 12 35 11 Gathering Production volume growth 34 growth 10 2.2% 5.8% 3Q 2023 YTD vs 3Q 2022 YTD 3Q 2023 YTD vs 33 3Q 2022 YTD 9 32 8 31 7 3Q 2022

  26. Slide 26: Haynesville gathering capacity and Louisiana Energy Gateway

    Map of Williams’ Assets in Haynesville Increasing gathering capacity Springridge ➢ Added 600 MMcf/d of capacity in Springridge (4Q 2022-1Q 2023) ➢ Added 300 MMcf/d of capacity in South Mansfield (3Q 2023) Haynesville Mansfield ➢ Adding 150 MMcf/d of capacity in Mansfield West LA South ➢ Adding 400 M

  27. Slide 27: Carbon capture and storage with Louisiana Energy Gateway

    Integrating carbon capture and storage with Louisiana Energy Gateway to deliver clean energy Haynesville Scope of project TX LA • New treating, compression, capture equipment, and CO2 pipeline CO2 from gathering and • Targeted in service aligned with Louisiana Energy Gateway Existing treating assets

  28. Slide 28: E&P and G&P hedges

    Commodity 4Q 2023 2024 Weighted-Average Weighted-Average E&P Hedges Natural Gas Volume (MMbtu) Volume (MMbtu) Price ($MMbtu) Price ($MMbtu) Fixed Price Swaps (12,217,500) $3.06 (26,407,500) $3.40 Basis Swaps (12,325,000) ($0.35) (24,272,500) ($0.33) Weighted-Average Weighted-Average Liquids Volume (

  29. Slide 29: Emissions, safety and community goals

    Link here for full report WE MAKE CLEAN ENERGY HAPPEN ® 56% REDUCTION GOAL in company-wide greenhouse gas emissions by 2030 vs 2005 levels, working toward net zero carbon emissions by 2050 16.5% REDUCTION 1 in total methane emissions from a three-year average, surpassing goal of 5% reduction 31% RED

  30. Slide 30: WILLIAMS © 2023 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams

    WILLIAMS © 2023 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams 3rd Quarter 2023 Earnings Call I November 2, 2023 I www.williams.com 30

  31. Slide 31: Forward-looking statements

    > The reports, filings, and other public announcements of The Williams Companies, Inc. (Williams) 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 Section 27A of t

  32. Slide 32: Forward-looking statement risk factors

    > Forward-looking statements are based on numerous assumptions, uncertainties, and risks that could cause future events or results to be materially different from those stated or implied in this report. Many of the factors that will determine these results are beyond our ability to control or predic

  33. Slide 33: Forward-looking statement risk factors (continued)

    – The ability of the members of the Organization of Petroleum Exporting Countries and other oil exporting nations to agree to and maintain oil price and production controls and the impact on domestic production; – Changes in the current geopolitical situation, including the Russian invasion of Ukrai

  34. Slide 34: WILLIAMS © 2023 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams

    WILLIAMS © 2023 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams 3rd Quarter 2023 Earnings Call I November 2, 2023 I www.williams.com 34

  35. Slide 35: Non-GAAP financial measures

    > This news release and accompanying materials may include certain financial measures – adjusted EBITDA, adjusted income (“earnings”), adjusted earnings per share, available funds from operations and dividend coverage ratio – that are non-GAAP financial measures as defined under the rules of the SEC

  36. Slide 36: Adjusted income reconciliation 2015-2017

    2015 2016 2017 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Income (loss) attributable to The Williams Companies, Inc. available to common $ 70 $ 114 $ (40) $ (715) $ (571) $ (65) $ (405

  37. Slide 37: Adjusted income reconciliation 2015-2017 (continued)

    2015 2016 2017 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Other Impairment of certain assets — — — 64 64 — 747 — 8 755 — 23 68 — 91 Regulatory adjustments resulting from Tax Reform — —

  38. Slide 38: Adjusted income reconciliation 2018-2019

    2018 2019 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders $ 152 $ 135 $ 129 $ (572) $ (156) $ 194 $ 310 $ 2

  39. Slide 39: Adjusted income reconciliation 2018-2019 (continued)

    2018 2019 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Other Regulatory asset reversals from impaired projects — — — — — — — — — — Commodity derivative non-cash mark-to-market — — — — — — — — — — Reversal of costs capitaliz

  40. Slide 40: Adjusted income reconciliation 2020-2021

    2020 2021 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr (1) 4th Qtr Year Income (loss) attributable to The Williams Companies, Inc. available to common $ (518) $ 303 $ 308 $ 115 $ 208 $ 425 $ 304 $ 164 $ 621 $ 1,514 stockholders Income (

  41. Slide 41: Adjusted income reconciliation 2020-2021 (continued)

    2020 2021 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr (1) 4th Qtr Year Sequent Amortization of purchase accounting inventory fair value adjustment - - - - - - - 2 16 18 Net unrealized (gain) loss from derivative instruments - - - - - -

  42. Slide 42: Adjusted income reconciliation 2022-2023

    2022 2023 (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 continuing operations attributable to The Williams Companies, Inc. available to common stockholders $ 379 $ 400 $ 599 $ 668 $ 2,046 $ 926 $ 547 $ 654 $ 2,127

  43. Slide 43: Adjusted income reconciliation 2022-2023 (continued)

    2022 2023 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr Year Other Regulatory liability charge associated with decrease in Transco’s estimated deferred state income tax rate — — 5 — 5 — — — — Net unrealized (gain) loss from derivative in

  44. Slide 44: Net income to Adjusted EBITDA 2015-2017

    2015 2016 2017 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Net income (loss) $ 13 $ 183 $ (173) $ (1,337) $ (1,314) $ (13) $ (505) $ 131 $ 37 $ (350) $ 569 $ 193 $ 125 $1,622 $2,509 Provision (benefit) for incom

  45. Slide 45: Net income to Adjusted EBITDA 2018-2019

    2018 2019 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Net income (loss) $ 270 $ 269 $ 200 $ (546) $ 193 $ 214 $ 324 $ 242 $ (66) $ 714 Provision (benefit) for income taxes 55 52 190 (159) 138 69 98 77 91 335 Interest expense 273 275 270 294 1,112 2

  46. Slide 46: Net income to Adjusted EBITDA 2020-2021

    2020 2021 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Net income (loss) $ (570) $ 315 $ 323 $ 130 $ 198 $ 435 $ 322 $ 173 $ 632 $ 1,562 Provision (benefit) for income taxes (204) 117 111 55 79 141 119 53 198 511 Interest expense 296 294 292 290 1,1

  47. Slide 47: Net income to Adjusted EBITDA 2022-2023

    2022 2023 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr Year Net income (loss) $ 392 $ 407 $ 621 $ 697 $ 2,117 $ 957 $ 494 $ 684 $ 2,135 Provision (benefit) for income taxes 118 (45) 96 256 425 284 175 176 635 Interest expense 286 281 291 289 1,147 294 306 314 91

  48. Slide 48: Available funds from operations and dividend coverage reconciliation

    2022 2023 (Dollars in millions, except coverage ratios) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr Year The Williams Companies, Inc. Reconciliation of GAAP "Net cash provided (used) by operating activities" to Non-GAAP "Available funds from operations" Net cash provided (used) by o

  49. Slide 49: 2023 Guidance reconciliation

    2023 Guidance (Dollars in millions, except per-share amounts and coverage ratio) Low Mid High Net income (loss) from continuing operations $ 2,675 $ 2,750 $ 2,825 Provision (benefit) for income taxes 800 825 850 Interest expense 1,225 Equity (earnings) losses (590) Proportional Modified EBITDA of eq

Williams Companies, Inc. (The) — Q3 2023 Earnings Presentation on 6ix