Williams Companies, Inc. (the) · NYSE:WMB
Williams Companies, Inc. (the) — Q2 2020 Earnings Presentation
27 slides from Williams Companies, Inc. (the)'s earnings presentation, Aug 4, 2020
Slide 1: Williams 2nd Quarter 2020 Earnings Call
NYSE: WMB | www.williams.com Williams 2nd Quarter 2020 Earnings Call August 4, 2020
Slide 2: 2Q 2020 results exceed expectations despite external volatility
2Q 2020 results exceed expectations despite external volatility Strong Financial Performance 2Q 2Q % 2Q YTD 2Q YTD % Across Key Metrics 2020 2019 Change 2020 2019 Change Cash Flow from Operations $1,143 $1,069 7% $1,930 $1,844 5% Adjusted EBITDA $1,240 $1,241 0% $2,502 $2,457 2% Adjusted Earnings pe
Slide 3: WMB second quarter results stable
WMB second quarter results stable ONGOING WMB ADJUSTED EBITDA ($MM): 2Q 2019 vs. 2Q 2020 PERFORMANCE DRIVERS Ongoing Performance > TRANSMISSION & GOM $1,300 Increased revenue from transmission $44 ($32) expansion projects, benefit of Transco rate case settlement, new Deepwater volumes and $1,250 low
Slide 4: WMB 2Q year-to-date results up 2%
WMB 2Q year-to-date results up 2% ONGOING WMB Adjusted EBITDA ($MM): 2Q ‘19 YTD vs. 2Q ’20 YTD PERFORMANCE DRIVERS Ongoing Performance > TRANSMISSION & GOM $2,600 Increased revenue from transmission $112 ($45) expansion projects, benefit of Transco rate case settlement, new Deepwater volumes and $2,
Slide 5: Natural gas demand stands strong growing more than 2% in 2Q 2020
Natural gas demand stands strong growing more than 2% in 2Q 2020 POWER GEN LNG & MEXICAN INDUSTRIAL RES / COM EXPORTS Bcf/d Bcf/d Bcf/d Bcf/d 35 35 35 35 30 +3% 30 30 30 25 25 25 25 -0.6% 20 20 20 20 +5% 15 15 15 15 +11% 10 10 10 10 5 5 5 5 0 0 0 0 2Q ‘19 2Q ‘20 2Q ‘19 2Q ‘20 2Q ‘19 2Q ‘20 2Q ‘19 2Q
Slide 6: Growth across Williams assets continues through external volatility
Growth across Williams assets continues through external volatility LOWER-48 NATURAL GAS WILLIAMS NATURAL GAS WELLHEAD PRODUCTION GATHERING VOLUMES Bcf/d Bcf/d 100 14 +3.6% -0.3% 98 12 96 10 94 8 2Q ‘19 2Q ‘20 2Q ‘19 2Q ‘20 STRATEGICALLY POSITIONED TO CONNECT BEST SUPPLIES TO BEST MARKETS Source: IH
Slide 7: Key investor focus areas
Key investor focus areas RESILIENT BUSINESS STRATEGICALLY ALIGNED TO NATURAL GAS DEMAND GROWTH Durability Growth COMMERCIAL TRANSMISSION • High credit-quality, demand-pull gas • Existing natural gas infrastructure offers growth transmission customer base advantage • Fixed-fee based business does not
Slide 8: Appendix
Appendix WILLIAMS © 2020 The Williams Companies, Inc. All rights reserved. NYSE: WMB I Williams 2nd Quarter 2020 Earnings Call 08/04/2020 I www.williams.com 7
Slide 9: WMB sequential quarter results
WMB sequential quarter results ONGOING WMB Adjusted EBITDA ($MM): 1Q 2020 vs. 2Q 2020 PERFORMANCE DRIVERS $1,300 Ongoing Performance > TRANSMISSION & GOM Unfavorable revenue and cost impacts due $8 ($29) $1,262 to seasonality; Partially offset by Hillabee Comparability Ph. 2 in-service $1,250 Items
Slide 10: 2020 Guidance Ranges
2020 Guidance Ranges FINANCIAL METRIC 2020 GUIDANCE Adjusted Net Income1 $1.160 - $1.460 Bn Adjusted Diluted EPS1 $0.95 - $1.20 Adjusted EBITDA $4.950 - $5.250 Bn Distributable Cash Flow (DCF) $3.050 - $3.450 Bn DCF per share $2.50 - $2.83 $1.0 Bn - $1.2 Bn Growth Capex Prior guidance: $1.1 - $1.3 B
Slide 11: Recent accomplishments
Recent accomplishments Sustainability Published 2019 Sustainability Report on July 27, providing a comprehensive review of the Report company’s environmental, social and governance programs and initiatives Solar Power Taking steps to develop solar energy installations at certain facilities to provid
Slide 12: Executing significant portfolio of gas transmission growth projects
Executing significant portfolio of gas transmission growth projects PROJECTS IN EXECUTION $2.2B Target Current Project Project Markets Served In-service Status1 Capacity2 Commenced Service Hillabee Ph. 2 2Q ‘20 206 MMcf/d Power demand in FL May ‘20 Res/Com & Power demand in 4Q ’20 & Southeastern Tra
Slide 13: Recent Deepwater Project Milestones
Unique Deepwater opportunities available due to incumbent position Recent Deepwater Project Milestones Western Gulf Eastern Gulf Discovery Whale Ballymore Taggart Positive FIDs Under existing dedication Under existing Positive FID June Signed Definitive dedication 2020 Agreements Reimbursement execu
Slide 14: Gas transmission business built on high credit-quality, demand-pull customer base
Gas transmission business built on high credit-quality, demand-pull customer base Firm Contracted Capacity By Credit Rating Profile Of Williams 2019 Gas Customer Type1 Transmission Revenue From Top 100 Customers2 1% 4% 8% 9% 7% Investment Utilities/Power Grade 13% 68% LNG / Industrial 90% High Yield
Slide 15: Stable and diversified EBITDA, limiting exposure to any one basin
Stable and diversified EBITDA, limiting exposure to any one basin $5 B 2019 ADJ. EBITDA Other Onshore Oil Basin1 2% Only 7% EBITDA from Eagle Ford 5% Marketing & NGL Services2 2% G&P serving on-shore Blue Racer & Aux Sable 2% SW Wyoming / Wamsutter 2% oil-directed supply areas Piceance 2% Marcellus
Slide 16: Forward Looking Statements
Forward Looking Statements WILLIAMS © 2020 The Williams Companies, Inc. All rights reserved. NYSE: WMB I Williams 2nd Quarter 2020 Earnings Call 08/04/2020 I www.williams.com 15
Slide 17: 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 18: 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 19: 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; – W
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations WILLIAMS © 2020 The Williams Companies, Inc. All rights reserved. NYSE: WMB I Williams 2nd Quarter 2020 Earnings Call 08/04/2020 I www.williams.com 19
Slide 21: Non-GAAP Disclaimer
Non-GAAP Disclaimer > This presentation may include certain financial measures – adjusted EBITDA, adjusted income (“earnings”), adjusted earnings per share, distributable cash flow and dividend coverage ratio – that are non-GAAP financial measures as defined under the rules of the Securities and Exc
Slide 22: Reconciliation of Income (Loss) Attributable to Williams to Adjusted Income
Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income 2019 2020 (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. $
Slide 23: Reconciliation of Income (Loss) Attributable to Williams to Adjusted Income (con’t)
Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income (con’t) 2019 2020 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Other Adjustment of Transco’s regulatory asset for post-WPZ Merger state deferre
Slide 24: Reconciliation of Net Income to Non-GAAP Modified EBITDA, Adjusted EBITDA and Distributable Cash Flow
Reconciliation of Net Income to Non-GAAP Modified EBITDA, Adjusted EBITDA and Distributable Cash Flow 2019 2020 (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 Income (Loss)" to Non-GAAP
Slide 25: Reconciliation of Modified EBITDA to Non-GAAP Adjusted EBITDA
Reconciliation of Modified EBITDA to Non-GAAP Adjusted EBITDA 2019 2020 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Net income (loss) $ 214 $ 324 $ 242 $ (66) $ 714 $ (570) $ 315 $ (255) Provision (benefit) for income taxes 69 98 77 91 335 (204) 117 (87) Interest
Slide 26: Reconciliation of Net Income to Modified EBITDA, Adjusted EBITDA and Distributable Cash Flow
Reconciliation of Net Income to Modified EBITDA, Non-GAAP Adjusted EBITDA and Distributable Cash Flow 2020 Guidance (Dollars in millions, except per share amounts and coverage ratio) Low Mid High Net income (loss) $ 304 $ 454 $ 604 Provision (benefit) for income taxes 134 Interest expense 1,180 Equi
Slide 27: Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted Income
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted Income Available to Common Stockholders 2020 Guidance (Dollars in millions, except per-share amounts) Low Mid High Net income (loss) $ 304 $ 454 $ 604 Less: Net income (loss) attributable to noncontrolling interests & preferred dividends