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

Williams Companies, Inc. (the) — Q2 2023 Earnings Presentation

47 slides from Williams Companies, Inc. (the)'s earnings presentation, Aug 3, 2023

  1. Slide 1: Williams 2nd Quarter 2023 Earnings Call

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

  2. Slide 2: 2Q at a glance

    2Q at a glance Premier Midstream Operator Steadfast project execution to drive additional growth in 2023 and beyond ADJUSTED EBITDA • Signed precedent agreement for Overthrust Westbound Expansion • Fully integrated MountainWest into existing Western footprint 8% • Successful open season on Southeast

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

    Strong Financial Performance 2Q 2Q 2Q YTD 2Q YTD Change Change Across Key Financial Metrics 2023 2022 2023 2022 Adjusted EBITDA $1,611 $1,496 8% $3,406 $3,007 13% Adjusted Earnings per Share $0.42 $0.40 5% $0.98 $0.80 23% Available Funds from Operations $1,215 $1,130 8% $2,660 $2,320 15% Dividend Co

  4. Slide 4: Core business performance drivers: 2Q 2023 vs. 2Q 2022

    Core business performance drivers WMB Adjusted EBITDA ($MM): 2Q 2023 vs. 2Q 2022 Transmission & GOM Higher earnings due to the MountainWest and Core Business Performance NorTex acquisitions, increased gas transmission $1,650 revenues and increased Gulf of Mexico $16 ($22) production from new Taggart

  5. Slide 5: Core business performance drivers: 2Q'23 YTD vs. 2Q'22 YTD

    ’ ’ ‘ Core business performance drivers WMB Adjusted EBITDA ($MM): 2Q’23 YTD vs. 2Q’22 YTD Transmission & GOM Higher earnings due to the MountainWest and Core Business Performance NorTex acquisitions, increased gas transmission $3,500 revenues and increased Gulf of Mexico production from new Taggart

  6. Slide 6: Proven earnings growth, balance sheet strength, sustainable strategy

    Proven and predictable earnings growth Balance sheet strength and stability Long-term sustainable strategy WILLIAMS © 2023 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams 2nd Quarter 2023 Earnings Call I August 3, 2023 I www.williams.com 6

  7. Slide 7: Appendix

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

  8. Slide 8: Core business performance drivers: 2Q 2023 vs. 1Q 2023

    Core business performance drivers WMB Adjusted EBITDA ($MM): 2Q 2023 vs. 1Q 2023 Transmission & GOM Core Business Performance $1,900 Higher earnings due to the MountainWest $26 ($247) acquisition and increased Gulf of Mexico $45 production from new Taggart wells; partially $1,795 ($25) $20 West offs

  9. Slide 9: 2022 Adj. EBITDA by asset

    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

    Quarterly Growth: Williams Core Business Adj. EBITDA, Contracted Transmission Capacity and Gathering Volume vs. Crude Oil and Natural Gas Commodity Prices 250 Indexed to 100 200 Capacity + Volume Adj. EBITDA 150 Oil Price 100 Gas Price 50 2015 2016 2017 2018 2019 2020 2021 2022 2023 WTI Oil Price 1

  11. Slide 11: Transmission progress and emissions reduction updates

    Received FERC certificate for Southside Reliability Enhancement; Received Environmental Assessment Transmission for Texas to Louisiana Energy Pathway; Filed FERC applications for Carolina Market Link and Alabama Expansion Progress to Georgia Connector Projects; Signed precedent agreement for the Mou

  12. Slide 12: 2023 Guidance

    Financial Metric 2023 Guidance Adjusted EBITDA $6.4B - $6.8B (Includes upstream contributions) ($230MM - $430MM) Adjusted Diluted EPS1 $1.67 - $1.92 Available Funds From Operations (AFFO) $4.725B - $5.125B AFFO Per Share $3.86 - $4.18 Dividend Coverage Ratio 2.25x (midpoint) Debt-to-Adjusted EBITDA2

  13. Slide 13: 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

  14. Slide 14: 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 June 30, 2023 Debt-to-Adjusted EBITDA1 ($ in millions) $330 Investment $2,575 BBB/Baa2 grade rated Credit Rating across all rating agencie

  15. Slide 15: 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 Awaiting FID Operational volumes expected 16

  16. Slide 16: Lower-48 natural gas demand and exports

    Total demand including exports averaged 106 Bcf/d in 1H 2023 compared to 105 Bcf/d in 1H 2022, driven by strong Power sector demand LNG & MEXICAN POWER GEN INDUSTRIAL RES / COM EXPORTS Bcf/d Bcf/d Bcf/d Bcf/d 35 35 35 35 8.1% 30 30 30 30 25 25 -8.6% 25 -1.4% 25 20 20 20 20 2.7% 15 15 15 2,703 15 HDD

  17. Slide 17: Transmission project backlog and optionality

    DIVERSE OPTIONALITY ~10 Bcf/d in queue to serve power I N C R E M E N TA L generation facilities, LNG facilities and 2.1 Bcf/d Moved from backlog into execution since 2020 industrial facilities/gas utilities Successfully placed ~2.1 Bcf/d of projects in service since 2020 8 PROJECTS 25 AT T R A C T

  18. Slide 18: Transco expansion projects

    Regional Energy Access 1 • 829 MMcf/d serving Res/Com & Power demand in PA, NJ & MD • Construction underway with expected partial in service 4Q’23 and full in service expected 4Q’24 1 Commonwealth Energy Connector 2 • 105 MMcf/d serving Res/Com demand in Mid-Atlantic Enough natural gas • Received dr

  19. Slide 19: Emissions reduction program

    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

  20. Slide 20: Double Gulf of Mexico 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 ▪

  21. Slide 21: Projects from recent acquisitions

    Leveraging our operational expertise and footprint to drive transmission, gathering and storage projects from recent acquisitions MOUNTAINWEST Overthrust Westbound Expansion • Providing up to 325 MMcf/d of incremental firm transportation service on Overthrust Pipeline • Signed precedent agreement TR

  22. Slide 22: Northeast gathering capacity buildout

    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

  23. Slide 23: Susquehanna and Cardinal gathering expansions

    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

  24. Slide 24: 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 1.7% 6.9% 1H 2023 vs 1H 2023 vs 1H 2022 33 1H 2022 9 32 8 31 7 1H 2022 1H 2023 1H 2022

  25. Slide 25: Haynesville assets and capacity

    Map of Williams’ Assets in Haynesville South Mansfield Springridge Adding 300 Haynesville MMcf/d capacity Mansfield West Haynesville West Adding 400 South LA MMcf/d capacity Adding Existing Mansfield gathering ~850 MMcf/d systems Mansfield through near-term expansion projects in Adding 150 Haynesvil

  26. Slide 26: 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

  27. Slide 27: E&P Hedges and G&P Hedges

    Commodity 2H 2023 E&P Hedges Weighted-Average Price Natural Gas Volume (MMbtu) ($MMbtu) Fixed Price Swaps (26,707,500) $ 3.08 Basis Swaps (16,965,000) $ (0.6074) Liquids Volume (Bbls) Weighted-Average Price ($Bbl) Fixed Price Swaps - Crude Oil as % of C3 120,000 $ 77.31 Fixed Price Swaps - NGL (276,

  28. Slide 28: Emissions and safety reduction 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

  29. Slide 29: 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 2nd Quarter 2023 Earnings Call I August 3, 2023 I www.williams.com 29

  30. Slide 30: 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

  31. Slide 31: 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

  32. Slide 32: Forward-looking statement cautions

    – 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

  33. Slide 33: 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 2nd Quarter 2023 Earnings Call I August 3, 2023 I www.williams.com 33

  34. Slide 34: Non-GAAP financial measures definitions

    > 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

  35. Slide 35: 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

  36. Slide 36: 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 — —

  37. Slide 37: 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

  38. Slide 38: 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

  39. Slide 39: 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 (

  40. Slide 40: 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 - - - - - -

  41. Slide 41: 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 Year Income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders $ 379 $ 400 $ 599 $ 668 $ 2,046 $ 926 $ 547 $ 1,473 Income (loss)

  42. Slide 42: 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

  43. Slide 43: 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

  44. Slide 44: 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

  45. Slide 45: 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 Year Net income (loss) $ 392 $ 407 $ 621 $ 697 $ 2,117 $ 957 $ 494 $ 1,451 Provision (benefit) for income taxes 118 (45) 96 256 425 284 175 459 Interest expense 286 281 291 289 1,147 294 306 600 Equity (earnings) lo

  46. Slide 46: Available funds from operations reconciliation

    2022 2023 (Dollars in millions, except coverage ratios) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd 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 operating

  47. Slide 47: 2023 Guidance reconciliation

    2023 Guidance (Dollars in millions, except per-share amounts and coverage ratio) Low Mid High Net income (loss) $ 2,080 $ 2,230 $ 2,380 Provision (benefit) for income taxes 665 715 765 Interest expense 1,220 Equity (earnings) losses (580) Proportional Modified EBITDA of equity-method investments 930

Williams Companies, Inc. (The) — Q2 2023 Earnings Presentation on 6ix