Williams Companies, Inc. (the) · NYSE:WMB
Williams Companies, Inc. (the) — Q2 2024 Earnings Presentation
50 slides from Williams Companies, Inc. (the)'s earnings presentation, Aug 6, 2024
Slide 1: Williams 2nd Quarter 2024 Earnings Call
Williams 2nd Quarter 2024 Earnings Call August 6, 2024 WILLIAMS © 2024 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams 2nd Quarter 2024 Earnings Call I August 6, 2024 I www.williams.com 1
Slide 2: Another quarter executing on strategic priorities
Another quarter executing on strategic priorities Continued operational execution Focus on strength & stability Completed expansions Portfolio optimization ▪ Placed Regional Energy Access in-service ahead of schedule ▪ Sold 14% interest in Aux Sable ▪ Placed MountainWest’s Uinta Basin expansion in-s
Slide 3: Strong results across key financial metrics
Strong results across key financial metrics Strong Financial Performance 2Q 2Q 2Q YTD 2Q YTD Change Change Across Key Financial Metrics 2024 2023 2024 2023 Adjusted EBITDA $1,667 $1,611 3% $3,601 $3,406 6% Adjusted Earnings per Share $0.43 $0.42 2% $1.01 $0.98 3% Available Funds from Operations $1,2
Slide 4: Achieved 3% growth 2Q 2024 vs. 2Q 2023
Achieved 3% growth 2Q 2024 vs. 2Q 2023 Core business performance drivers WMB Adjusted EBITDA ($MM): 2Q 2024 vs. 2Q 2023 Transmission & GOM Higher earnings due to the Gulf Coast Storage Core Business Performance acquisition and Transco expansions; partially offset by $1,750 purity pipes divestment an
Slide 5: Why Williams?
WHY WILLIAMS? Williams is a unique investment opportunity ✓ Strategy fueled by natural gas Our infrastructure is critical to providing reliable, affordable and clean energy to meet growing demand both domestically and abroad. ✓ Shareholder value creation Williams has demonstrated a long history of v
Slide 6: Appendix
Appendix WILLIAMS © 2024 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams 2nd Quarter 2024 Earnings Call I August 6, 2024 I www.williams.com 6
Slide 7: Sequential Adjusted EBITDA drivers
Sequential Adjusted EBITDA drivers Core business performance drivers WMB Adjusted EBITDA ($MM): 2Q 2024 vs. 1Q 2024 Transmission & GOM Decreased earnings due to lower seasonal Core Business Performance services, higher seasonal operating and $2,100 maintenance costs and lower Gulf of Mexico $1,934 (
Slide 8: Achieved 6% growth 2Q YTD vs. 2Q YTD
Achieved 6% growth 2Q 24 YTD vs. 2Q 23 YTD Core business performance drivers WMB Adjusted EBITDA ($MM): 2Q 24 YTD vs. 2Q 23 YTD Transmission & GOM Higher earnings due to the Gulf Coast Storage and Core Business Performance MountainWest acquisitions, and Transco expansions; $3,750 partially offset by
Slide 9: Diversification of Adjusted EBITDA fuels stability and growth
Diversification of Adjusted EBITDA fuels stability and growth ~$6.8B 2023 Adj. EBITDA NGL Services1 1% ~1% from NGL Services Marketing Services 4% ~4% from Gas and NGL Marketing Services E&P 4% ~4% from E&P Joint Ventures Other Onshore Oil Basin2 2% Eagle Ford 5% ~7% from G&P SW Wyoming / Wamsutter
Slide 10: Williams generates steady growth in volumes and Adjusted EBITDA
Williams generates steady growth in volumes and Adjusted EBITDA 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 Adj. EBITDA 150 Oil Price 100 Gas P
Slide 11: Recent accomplishments
Recent accomplishments Closed two strategic transactions to further derisk Williams’ portfolio from commodity price volatility and Portfolio enhance the performance of commercially active and growing Gulf of Mexico assets; Sold 14% stake in Optimization Aux Sable for $160 million and purchased remai
Slide 12: Returns-based approach to capital allocation
Returns-based approach to capital allocation Capital allocation priorities: • Protect long-term health of balance sheet and investment-grade rating Maintain financial strength 1 • 2024 Debt-to-Adjusted EBITDA1 ~3.85x • Preserve long-standing commitment to shareholder returns and grow dividend in- Di
Slide 13: Anticipating continued base business strength in 2024 and 2025
Anticipating continued base business strength in 2024 and 2025 2023 actuals 203 2024 guidance 2025 guidance $6.950B $7.4B Adjusted EBITDA $6.779B $6.8B $7.1B $7.2B $7.6B $1.76 $1.97 Adjusted Diluted EPS1 $1.91 $1.65 $1.86 $1.85 $2.10 Available Funds From $5.050B $5.225B $5.213B $4.925B $5.175B $5.07
Slide 14: Balance sheet strength and financial flexibility
Balance sheet strength and financial flexibility Strong liquidity and minimal near-term debt maturities Principal Value of Debt Maturities 3.85x 0.95x improvement as of June 30, 2024 2024 guidance for In leverage since 20182 ($ in millions) Debt-to-Adjusted EBITDA $330 Investment $2,575 BBB/Baa2 gra
Slide 15: Strong exports and gas-fired power generation driving demand
Strong exports and gas-fired power generation driving demand Total demand including exports averaged 109 Bcf/d in 1H 2024 compared to 107 Bcf/d in 1H 2023, driven by strong power sector demand POWER GEN INDUSTRIAL RES / COM LNG & MEXICAN EXPORTS Bcf/d Bcf/d Bcf/d Bcf/d 40 40 40 40 4.9% 35 35 35 35 3
Slide 16: Transco resides along active and growing US LNG corridor
Transco resides along active and growing US LNG corridor Williams’ Asset Map in U.S. Gulf Coast1 + U.S. L-48 Large Scale Approved and Potential Liquefaction Facilities Per EIA2 14.3 11.6 11.9 Bcf/d3 Bcf/d3 Bcf/d3 LNG projects INVESTED LNG export CAPITAL LNG export already projects currently projects
Slide 17: Growing electricity demand requires additional backup generation
Growing electricity demand requires additional backup generation Electrification of heating and transport, data centers and AI-driven future will create growth in power demand not seen in past two decades U.S. Net On-Grid Power Demand 6,000 Electricity demand 5,500 experiencing 5,000 10x TWh 4,500 f
Slide 18: Renewables remain a small part of the total energy mix
Renewables remain a small part of the total energy mix 2023 Total Global Energy Electricity only 2023 Global Power Consumption by Sector Generation by Fuel Type accounts for ~21% of total end-use energy consumption Transportation Natural 25% Gas, Coal, 19% 38% Wind, 8% Non- 11% Energy 11% Electricit
Slide 19: There is a growing need for reliable infrastructure investment
There is a growing need for reliable infrastructure investment Cumulative Percentage Growth in L-48 Natural Gas Demand versus Growth in Interstate Natural Gas Pipeline Capacity and Natural Gas Storage Delivery, 2013-2022 Since 2013 demand for gas 45% has grown by 40% 43% Cumulative Growth Since 2013
Slide 20: Natural gas meets the trifecta for energy solutions
Natural gas meets the trifecta for energy solutions CLEAN AFFORDABLE RELIABLE 45% less carbon dioxide 4x 2.5x Performance of gas power cheaper than emissions than coal1 capacity compared to electricity2 solar PV power capacity3 U.S. CO2 emissions decline with Natural gas is a flexible and increased
Slide 21: A strong future ahead
A strong future ahead CONTINUED GROWTH AFTER RECORD YEARS, WITH A SIGNIFICANT EARNINGS STEP-UP AHEAD Transmission Gathering & Processing 2024 uplift Uinta Basin expansion 3Q’24 ✓ Marcellus South expansion 2Q’24 ✓ 2025 uplift Regional Energy Access 3Q’24 ✓ Haynesville West expansion 2Q’25 2026 uplift
Slide 22: Executing on ~2.8 Bcf/d of Transco expansions
Executing on ~2.8 Bcf/d of Transco expansions1 Target In- Project Current Status Project Capacity 1 Service Regional Energy Placed in-service 1 In-service 829 MMcf/d Access 3Q’24 2 Southeast Supply Pre-filed FERC 2 4Q’27 1,592 MMcf/d 3 Enhancement application 4 Commonwealth Received Notice to 3 4Q’2
Slide 23: Emissions Reduction Program to modernize transmission infrastructure
Emissions Reduction Program to modernize transmission infrastructure and reduce emissions Phased replacement of up to 205 compressor Reducing units Up to transmission compressor methane emissions $1.3B in anticipated ~50% capital spend through 2030 Implemented Reducing tracker for transmission NOx e
Slide 24: MountainWest poised for growth beyond acquisition expectations
MountainWest poised for growth beyond acquisition expectations P R O J E C TS I N S E RV I C E Strong project execution on 570 ▪ Opal East ▪ Carbonate Tap significant opportunity set ✓ ▪ Green River 104 ▪ Rex Meeker MMcf/d ▪ Wells Draw ▪ Skull Creek P R O J E C TS I N E X E C U T I O N 400+ ▪ Uinta
Slide 25: Deepwater expansions adding significant volume growth
Deepwater expansions adding significant volume growth Whale WESTERN ▪ Expected in-service date: 4Q 2024 GULF OF MEXICO ▪ Expected CAPEX: ~$400MM ▪ Combined reserves: ~545 MMboe: Oil: 380 MMBbls, Gas: 1,000 Bcf Shenandoah Salamanca ▪ Expected in-service date: 2Q 2025 ▪ Expected in-service date: 2Q 20
Slide 26: Northeast expansion projects help capture future growth
Northeast expansion projects help capture future growth Map of Williams’ Northeast Assets Utica NW Cardinal gathering expansion ▪ Scope: ~8 miles of gathering pipeline and incremental compression ▪ Incremental capacity: 125 MMcf/d ▪ In-service: 3Q 2025 (aligned with customer need) Marcellus South Ga
Slide 27: Enhancing our Haynesville position
Enhancing our Haynesville position Map of Williams’ Assets in Haynesville ADDING INCREMENTAL GATHERING CAPACITY ▪ Haynesville West | Capacity: 400 MMcf/d | ISD: 2Q’25 Springridge ▪ Mansfield | Capacity: 150 MMcf/d | ISD: YE’25 (aligned with customer need) Mansfield Haynesville CO2 from gathering Wes
Slide 28: Williams' hedge positions
Williams’ hedge positions Commodity 2024 2025 E&P Hedges Weighted-Average Weighted-Average Natural Gas Volume (MMBtu) Volume (MMBtu) Price ($MMBtu) Price ($MMBtu) Fixed Price Swaps (10,280,000) $3.19 (44,990,000) $3.43 Basis Swaps (20,620,000) ($0.24) (34,042,500) ($0.49) Weighted-Average Weighted-A
Slide 29: Focused on environmental stewardship and building strong communities
Focused on environmental stewardship and building strong communities LINK HERE 26% REDUCTION 4,346 MILES in intensity-based GHG emissions of pipeline integrity assessments from 2018, working towards goal to protect our people, environment of a 30% reduction by 2028 and assets, up 36% from 2022 589+
Slide 30: Committed to a clean energy future
Committed to a clean energy future For more information regarding our sustainability efforts, please review our 2023 Sustainability Report LONG-TERM AMBITION Achieve net zero NEAR-TERM GOAL ambition by 2050 utilizing a combination of immediate NEAR-TERM GOAL 30% reduction and long-term in carbon int
Slide 31: Forward Looking Statements
Forward Looking Statements WILLIAMS © 2024 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams 2nd Quarter 2024 Earnings Call I August 6, 2024 I www.williams.com 31
Slide 32: Forward-looking statements
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
Slide 33: Forward-looking statements (cont'd)
Forward-looking statements (cont’d) > 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 bey
Slide 34: Forward-looking statements (cont'd)
Forward-looking statements (cont’d) – 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, inc
Slide 35: Non-GAAP Reconciliations
Non-GAAP Reconciliations WILLIAMS © 2024 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams 2nd Quarter 2024 Earnings Call I August 6, 2024 I www.williams.com 35
Slide 36: Non-GAAP Disclaimer
Non-GAAP Disclaimer > 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
Slide 37: Reconciliation of Income to Adjusted Income 2015-2017
Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income 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) attrib
Slide 38: Reconciliation of Income to Adjusted Income 2015-2017 cont.
Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income 2015-2017 cont. 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 Impairme
Slide 39: Reconciliation to Non-GAAP Adjusted Income 2018-2020
Reconciliation of Income (Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income 2018-2020 2018 2019 2020 (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 Q
Slide 40: Reconciliation to Non-GAAP Adjusted Income 2018-2020 Cont.
Reconciliation of Income (Loss) from Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income 2018-2020 Cont. 2018 2019 2020 (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
Slide 41: Reconciliation to Non-GAAP Adjusted Income 2021-2022
Reconciliation of Income (Loss) From Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income 2021-2022 2021 2022 (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 continu
Slide 42: Reconciliation to Non-GAAP Adjusted Income 2021-2022 Cont.
Reconciliation of Income (Loss) From Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income 2021-2022 Cont. 2021 2022 (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 Gas & NGL Marketing
Slide 43: Reconciliation to Non-GAAP Adjusted Income 2023-2024
Reconciliation of Income (Loss) From Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income 2023-2024 2023 2024 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Income (loss) from continuing operations a
Slide 44: Reconciliation to Non-GAAP Adjusted Income 2023-2024 Cont.
Reconciliation of Income (Loss) From Continuing Operations Attributable to The Williams Companies, Inc. to Non-GAAP Adjusted Income 2023-2024 Cont. 2023 2024 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Gas & NGL Marketing Services Impact
Slide 45: Reconciliation of Net Income to Adjusted EBITDA 2015-2017
Reconciliation of Net Income (Loss) to Modified EBITDA and Non-GAAP 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) $
Slide 46: Reconciliation of Net Income to Adjusted EBITDA 2018-2020
Reconciliation of Net Income (Loss) to Modified EBITDA and Non-GAAP Adjusted EBITDA 2018-2020 2018 2019 2020 (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) $ 270 $ 269 $ 200 $ (546) $ 193 $ 214 $
Slide 47: Reconciliation of Net Income to Adjusted EBITDA 2021-2022
Reconciliation of Net Income (Loss) to Modified EBITDA and Non-GAAP Adjusted EBITDA 2021-2022 2021 2022 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Net income (loss) $ 435 $ 322 $ 173 $ 632 $ 1,562 $ 392 $ 407 $ 621 $ 697 $ 2,117 Provision (benefit
Slide 48: Reconciliation of Net Income to Adjusted EBITDA 2023-2024
Reconciliation of Net Income (Loss) to Modified EBITDA, and Non-GAAP Adjusted EBITDA 2023-2024 2023 2024 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Net income (loss) $ 957 $ 494 $ 684 $ 1,168 $ 3,303 $ 662 $ 426 $ 1,088 Provision (benefit) for income taxes 284 17
Slide 49: Reconciliation of Cash Flow to Available Funds from Operations 2023-2024
Reconciliation of Cash Flow from Operating Activities to Non-GAAP Available Funds from Operations 2023-2024 2023 2024 (Dollars in millions, except coverage ratios) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Net cash provided (used) by operating activities $ 1,514 $ 1,377 $ 1,234 $ 1,8
Slide 50: Reconciliation of Guidance to Adjusted EBITDA and AFFO
Reconciliation of Net Income (Loss) from Continuing Operations to Modified EBITDA, Non-GAAP Adjusted EBITDA and Cash Flow from Operating Activities to Non-GAAP Available Funds from Operations (AFFO) 2024 Guidance 2025 Guidance (Dollars in millions, except per-share amounts and coverage ratio) Low Mi
Williams Companies, Inc. (The) — Q2 2024 Earnings Presentation on 6ix