Williams Companies, Inc. (the) · NYSE:WMB
Williams Companies, Inc. (the) — Q4 2005 Earnings Presentation
94 slides from Williams Companies, Inc. (the)'s earnings presentation, Feb 28, 2006
Slide 1: Williams 2005 4th Quarter Earnings
Williams 2005 4th Quarter Earnings February 28, 2006 Exhibit 99.2
Slide 2: Forward-looking statements
Our reports, filings, and other public announcements might 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 Litigation Reform Act of 1995. You t
Slide 3: Oil & Gas Reserves Disclaimer
Oil & Gas Reserves Disclaimer The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves. We use certain terms in this presentation, such as "probable" reserves and "possible" reserves and "new opportunities potential" reserves that the SEC's guidelines st
Slide 4: 2005 Review
2005 Review Steve Malcolm Chairman, President & CEO
Slide 5: 2005 Headlines
2005 Headlines Key earnings measure more than doubles Generated $1.45 billion net cash from operations Production increases dramatically Took steps to accelerate reserves development Successful launch of master limited partnership Significant progress in resolving legacy issues Overview
Slide 6: What you'll hear about 2005
What you'll hear about 2005 E&P growing - production, reserves, profits Recurring results up 122% U.S. production up 18% -- mostly via drill bit 277% reserves replacement with >99% success rate Total proved reserves 3.6 Tcfe Piceance Highlands shows promise Midstream sustains '04 record high; gears
Slide 7: What you'll hear about 2006 and beyond
What you'll hear about 2006 and beyond Overview Expect to grow key earnings measure over 3-year horizon Opportunity rich Significant reserves for development Sizable growth projects in gathering and processing Stable of expansions that strengthen gas pipelines' competitive position Demand growth in
Slide 8: Financial Results and 2006 Outlook
Financial Results and 2006 Outlook Don Chappel CFO
Slide 9: Financial Results
Financial Results Dollars in millions (except per share amounts) 4th Qtr Year 2005 2004 2005 2004 Income from Continuing Operations $69 $95 $318 $93 Income (Loss) from Discontinued Operations - (22) (2) 71 Cumulative effect of change in accounting principle (2) - (2) - Net Income $67 $73 $314 $164 N
Slide 10: Recurring Income from Continuing Operations
Recurring Income from Continuing Operations 4th Qtr Year 2005 2004 2005 2004 Income from Continuing Operations $69 $95 $318 $93 Nonrecurring Items Accrual for Regulatory & Litigation Contingencies/Settlements 78 - 96 - Impairments/Losses/Write-offs 61 31 119 70 Expense related to prior periods 28 4
Slide 11: Recurring Income After Mark-to-Market Adjustments
4th Qtr Year 2005 2004 2005 2004 Recurring Income from Continuing Operations After Mark-to-Market Adjustments Note: Adjustments have been made to reverse estimated forward unrealized MTM gains (losses) and add estimated realized gains from MTM previously recognized, i.e. assumes MTM accounting had n
Slide 12: Liquidity at Year-End 2005
Liquidity at Year-End 2005 Consolidated Dollars in millions Cash and cash equivalents 1,597 $ Other current securities 123 Less: Subsidiary & international cash Customer margin deposits payable $ 240 321 (561) Available unrestricted cash 1,159 Available revolver capacity 961 Total Liquidity 2,120 $
Slide 13: Business Unit Results
Business Unit Results Wiliams ——
Slide 14: Exploration & Production
Exploration & Production Ralph Hill Senior Vice President
Slide 15: Exploration & Production Segment Profit
Dollars in millions 4th Qtr Year 2005 2004 2005 2004 Segment Profit $206 $71 $587 $236 Nonrecurring: Ownership Issue - 4 - 15 Gain on sale of assets - - (29) - Recurring Segment Profit $206 $75 $558 $251 4Q04 to 4Q05 financial highlights include: Volume increase of 14% Domestic net realized price in
Slide 16: Strong Domestic Production Growth of 18%
Strong Domestic Production Growth of 18% Exploration & Production 2005 Domestic production grew 18% or 93 MMcfe/d over 2004 15 - 20% production growth projected for 2006
Slide 17: E&P 2005 Accomplishments and Current Update
Exploration & Production 2005 Accomplishments and Current Update Impressive domestic volume growth of 18% Domestic reserves replacement of 277% Successfully recruited talent, increased staff 34% Big George production continues to climb 2 rigs operating in Barnett Shale Mature San Juan basin producti
Slide 18: Piceance Production Growth
Piceance Production Growth Up 88 MMcfe/d or 34% over a year ago Up 17 MMcfe/d or 5% sequentially Exploration & Production Williams' Piceance Net Production 150 200 250 300 350 2Q '04 3Q '04 4Q '04 1Q '05 2Q '05 3Q '05 4Q '05 MMcfe/d
Slide 19: An Industry Leader in 2005 Cost Performance
An Industry Leader in 2005 Cost Performance Lease operating expense of $0.36 / Mcfe 3-year average F&D cost of $0.92 / Mcfe G&A cost of $0.34 / Mcfe Exploration & Production
Slide 20: Strong 2005 Reserves Performance
Strong 2005 Reserves Performance Exploration & Production Total proved reserves 3.6 Tcfe Domestic proved reserves up 13.3% to 3.4 Tcfe 277% domestic reserves replacement 99% success rate Moved 603 Bcfe to proved Transfers of Probable to Proved Reserves (Bcfe) 2003 2004 Total Total for retained basin
Slide 21: Domestic Proved Reserves Reconciliation
Exploration & Production Domestic Proved Reserves Reconciliation - -224 - -11 +603 +23 - -191 +451 Prod. +28 Prod. Acq. Sold YE 2003 Adds/ Rev. Acq. Adds/ Rev. YE 2005 YE 2004
Slide 22: Piceance Highlands Projects Summary
Project Area Net Acres Estimated Gross Potential Locations Estimated Net Potential Reserves (Bcfe) 2004 Wells 2005 Wells Projected 2006 Wells Trail Ridge (10-acre density) 21,112 1,500 1,500 - 2,000 3 12 20 Ryan Gulch (40-acre density) 16,078 800 700 3 5 15 Allen Point (40-acre density) 6,240 200 14
Slide 23: Piceance Highlands - Results To Date
Piceance Highlands - Results To Date Exploration & Production Project Area Wells Drilled Average 30 Day Rate / Completed Well (MMcfe/d) Expected EUR* Range (Bcfe/well) Trail Ridge 15 1.1 1.2 - 1.6 Ryan Gulch 8 1.2 1.2 - 2.0 Allen Point 6 1.1 1.2 - 1.6 Red Point 2 1.2 1.2 - 1.4 * Estimated Ultimate R
Slide 24: New E&P Opportunities
New E&P Opportunities Piceance Basin: Shale Ridge Prospect (Dakota Sandstone play) Leased 13,904 gross/net acres 100% WI; 87.5% NRI 10-year lease term Piceance Basin: Pending Williams Fork Project 2006 drill-to-earn commitment 11,000 net acres Uinta Basin: Sterling Hollow Prospect (Mesaverde tight g
Slide 25: Williams is a Leader in US Gas Production Growth
Williams is a Leader in US Gas Production Growth through the Drill Bit Exploration & Production (1) US production given on a natural gas equivalent basis, natural gas only production not available. Source: Publicly reported data from EvaluateEnergy.com, press releases, and company websites
Slide 26: Exploration & Production 2006-08 Guidance
2006 2007 2008 Segment profit $650 - 725 $775 - 900 $950 - 1,100 Annual DD&A 335 - 375 425 - 475 475 - 525 Segment profit + DD&A $985 - 1,100 $1,200 - 1,375 $1,425 - 1,625 Capital spending $950 - 1,050 $950 - 1,050 $1,000 - 1,150 Production (MMcfe/d) 750 - 825 875 - 975 950 - 1,100 Unhedged Price As
Slide 27: Key Points: Exploration & Production
An industry leader in production growth, cost efficiencies and reserves replacement Diligently managing increasing industry costs Strategy remains rapid development of our premier drilling inventory Delivering meaningful volume growth through expanded development drilling activity. Piceance is prima
Slide 28: Midstream
Midstream Alan Armstrong Senior Vice President
Slide 29: Midstream Segment Profit
Segment Profit Midstream Dollars in millions 4th Qtr Year 2005 2004 2005 2004 Segment Profit $112 $236 $471 $550 Nonrecurring: Depreciable Life Adjustment - 1 - 7 Gain on Asset Sales - (9) - (9) Insurance Arbitration Award - (94) - (94) Impairments - 17 - 17 Recurring Segment Profit $112 $151 $471 $
Slide 30: 4th Quarter and 2005 Highlights
4th Quarter and 2005 Highlights 2005 Opal TXP-5 construction commenced Construction of Tahiti and Blind Faith deepwater projects commenced Williams Partners L.P. (WPZ) successfully launched Hurricanes met with energetic response Sold $68MM in assets 4th Quarter Goldfinger and Triton production flowi
Slide 31: Midstream 2006-08 Guidance
Note: If guidance has changed, previous guidance from 11/3/2005 is shown in italics directly below Midstream Dollars in millions 2006 2007 2008 Segment Profit $400-500 $410-530 $440-580 Annual DD&A 190-200 200-210 210-220 Segment Profit + DDA $590-700 $610-740 $650-800 Capital Spending $280-300 $230
Slide 32: Significant Progress Made on Growth Projects
Significant Progress Made on Growth Projects Western Deepwater 38 62 Western G&P Expansions Deepwater Expansions Devel. /Proposal Stage 2006 2007 2008 Spending $200MM - 400MM 40% 60% Western G&P Expansions ($75MM in guidance) Overland Pass Deepwater Expansions ($30MM in guidance) Under Negotiation 2
Slide 33: Overland Pass Pipeline Proposal
Overland Pass Pipeline Proposal Midstream Expected NGL Production End of Year 2008: Opal Processing Plant 65-70 MBPD Echo Springs Processing Plant 40-45 MBPD
Slide 34: Key Points: Midstream
Key Points Midstream Another record year despite hurricanes and lower commodity margins Continued to generate excess free cash Operating Cash Flow MLP Proceeds Asset sales Geographic diversification of processing assets mitigated decline in Mt. Belvieu frac spreads Significant progress on growth pro
Slide 35: Gas Pipeline
Gas Pipeline Phil Wright Senior Vice President
Slide 36: Gas Pipeline Segment Profit
Segment Profit Gas Pipeline Dollars in millions 4th Qtr Year 2005 2004 2005 2004 Segment Profit $93 $157 $586 $586 Nonrecurring: (Income)/expense related to prior periods 27 - (8) - Accrual of contingent refund obligation 10 - 10 - 1999 Fuel Tracker adjustment - - (14) - Write-off hydrostatic testin
Slide 37: Gas Pipeline 4th Quarter and 2005 Accomplishments
Transco: Central New Jersey project placed in-service 105 MDth/d of firm transportation serving the northeast market Successful open season for Sentinel to serve northeast market Precedent agreements signed for Potomac Expansion FERC certificate application filed for Leidy to Long Island Northwest:
Slide 38: Gas Pipeline 2006-08 Guidance
2006 2007 2008 Segment Profit $475 - 5201 $585 - 655 $590 - 665 Annual DD&A 280 - 300 290 - 310 295 - 315 Segment Profit + DDA $755 - 820 $875 - 965 $885 - 980 Capital Spending $710 - 785 $390 - 490 $410 - 510 775 - 830 Dollars in millions 2006-08 Guidance Note: If guidance has changed, previous gui
Slide 39: 2006-07 Capital Spending Detail
2006-07 Capital Spending Detail $410 - 510 $390 - 490 $710 - 785 Total 230 - 250 180 - 220 95 - 105 - - 2 276 $180 - 260 $210 - 265 $340 - 405 Normal Maintenance/ Compliance 2008 2007 2006 Dollars in millions NWP 26" Replacement Expansion1 Note: - - Sum of ranges may not add due to rounding - - Rang
Slide 40: Growth Projects and Opportunities
Sentinel Nov 2008 Growth Projects and Opportunities Gulfstream Mainline Jan 2009 Leidy to Long Island Nov 2007 Potomac Nov 2007 Parachute Jan 2007 Pacific Connector Pipeline Late 2010 Prod. Area Mainline Exp Nov 2008 Mobile Bay South Summer 2008 Gas Pipeline Greasewood Nov 2008 Projects in proposal
Slide 41: Key Points: Gas Pipeline
Key Points 2005 another strong year Strong cash flow provider Operational excellence Achieved new delivery records Met customer demand through hurricane challenges Customer focused Meeting market demands with new growth projects High rankings in customer satisfaction survey 2006 & forward Anticipate
Slide 42: Power
Power Bill Hobbs Senior Vice President
Slide 43: Power Segment Profit/(Loss)
Segment Profit/(Loss) Power Dollars in millions Segment Profit/(Loss) Before MTM Adjustment ($69) ($44) ($257) $77 Nonrecurring: Accrual for Regulatory & Litigation Contingencies/Settlements 69 - 87 - Impairments, Losses, Write-offs 23 - 23 - Expense Related to Prior Periods - - 7 - Recurring Segmen
Slide 44: Power 2005 Segment Profit/(Loss) to Cash Flow From Operations
Power 2005 - Segment Profit/(Loss) to Cash Flow From Operations 1 Includes nonrecurring adjustments which decrease reported Segment Loss by $117 million, $110 million of which is included in the "Working Capital/Other" column. A more detailed schedule reconciling income (loss) from continuing operat
Slide 45: Power 2006-08 Guidance
2006-08 Guidance Power Note: If guidance has changed, previous guidance from11/03/05 is shown in italics directly below 1 2006-2008 CFFO guidance assumes no changes in Working Capital. Changes in Working Capital are likely if future commodity prices are volatile or if counterparties exchange Letters
Slide 46: 2005 Contracts
2005 Contracts Power Reducing Risk and Increasing Cash flow Certainty
Slide 47: 2006 Contracts
2006 Contracts Power Reducing Risk and Increasing Cash flow Certainty
Slide 48: Capacity Sold by Year
Capacity Sold by Year Power *Note: 2005A based on hedged position @ 3/31/05 Tutorial Schedules. 3,078 4,734 4,326 4,241 3,117 3,032 2,624 4,287 0 2,000 4,000 6,000 8,000 2005A* 2006F 2007F 2008F Total Capacity Sold Remaining Available Upside
Slide 49: Cash Flow Analysis
Cash Flow Analysis Power Estimated undiscounted dollars in millions 1 2005 Actual cash flows are realized from a combination of Hedged Cash Flows and Merchant Cash Flows and other risk management and trading activities. 2 Forecasted Hedged Cash Flows represents (1) the estimated cash flows from hedg
Slide 50: 2006 Forecast Segment Profit After MTM
Dollars in millions 2006 Forecast: Recurring Segment Profit/(Loss) After MTM Adjustments 2005 Recurring Segment Loss After MTM Adjustments $ (2) - (2) Estimated cash flows from new contracts executed in 2005 40 - 50 Current and forecasted improvement in markets 0 - 70 No unplanned plant outages & hu
Slide 51: Key Points: Power
Key Points Positive CFFO for Power Segment and Power Standalone in 2005 Recurring 2005 Segment Loss after MTM improves $39 million over 2004 levels despite record high gas prices, mild weather, hurricanes and unplanned outages Outlook for 2006 improves based upon strength of new contracts and improv
Slide 52: 2006-08 Consolidated Outlook
2006-08 Consolidated Outlook Don Chappel CFO
Slide 53: 2006 Consolidated Forecast Guidance
Segment profit before MTM adjustment $1,240 - $1,580 Net Interest Expense (665) - (705) Other (Primarily General Corp. Costs) (90) - (120) Pretax Income 485 - 755 Provision for Income Tax (200) - (315) Income from Continuing Ops 285 - 440 Income/(Loss) from Discontinued Ops (5) - 0 Net Income $280 -
Slide 54: 2006-08 Segment Profit After MTM Adjustments
Dollars in millions 2006-08 Segment Profit After MTM Adj. Exploration & Production Midstream Gas Pipeline Power 1 Other / Corp. / Rounding Total 2006 2007 Consolidated $650 - 725 400 - 500 475 - 520 50 - 150 (55) - (35) $1,520 - 1,860 2008 $775 - 900 410 - 530 585 - 655 50 - 200 10 - (30) $1,830 - 2
Slide 55: Consolidated 2006-08 Capital Expenditures
2006 2007 2008 Exploration & Prod. $950 - 1,050 $950 - 1,050 $1,000 - 1,150 Midstream 280 - 300 230 - 270 70 - 90 Gas Pipeline 710 - 785 390 - 490 410 - 510 Power - - - Other/Corporate 10 - 30 10 - 30 10 - 30 Total $1,950 - 2,150 $1,600 - 1,800 $1,500 - 1,750 Dollars in millions Notes: - - Sum of ra
Slide 56: 2006-08 Outlook: Operating Free Cash Flow
1 Operating free cash flow is defined as cash flow from operations less capital expenditures, before dividend or principal payments Note: If guidance has changed, previous guidance from 11/3/05 is shown in italics directly below Dollars in millions 2006-08 Outlook Consolidated Segment Profit Reporte
Slide 57: Strong Operating Cash Flow Growth & Increasing Investment Opportunities
Strong Operating Cash Flow Growth & Increasing Investment Opportunities 2003 2004 2005 2006 2007 2008 Cap Ex-Low 790 1415 1950 1600 1500 Cap Ex-High 790 1415 2150 1800 1750 CFFO-Low 588 1472 1450 1625 1850 2200 CFFO-High 588 1472 1450 1925 2150 2600 Debt to Cap 0.75 0.623 0.586 0.55 0.53 0.51 0.75 0
Slide 58: Segment Profit Guidance Trend
Segment Profit Guidance Trend 2004 2005 2006 2007 2008 SPAM Low 1263 1577 1520 1830 2015 SPAM High 1263 1577 1860 2255 2580 SP Low 1381 1275 1175 1375 SP High 1381 1575 1475 1800 Cap Ex-Low 790 1175 1825 1450 Cap Ex-High 790 1350 2050 1650 $ Millions $1,578 (recurring) $1,520 to $1,860 $1,830 to $2,
Slide 59: Financial Strategy/Key Points
Drive/enable sustainable growth in EVA(r)/shareholder value Maintain a cash/liquidity cushion of $1.0 billion plus Continue to steadily improve credit ratios/ratings; ultimately achieving investment grade ratios Reduce risk in Power segment Opportunity rich Increasing focus and disciplined EVA(r)-ba
Slide 60: Summary
Summary Steve Malcolm Chairman, President & CEO
Slide 61: Key Points
Key Points Expect to grow key earnings measure at 15% rate Opportunity rich Investing in value growth Summary
Slide 62: Q&A
Q&A Wiliams ——
Slide 63: Non-GAAP Reconciliations
Non-GAAP Reconciliations Wiliams ——
Slide 64: Non-GAAP Disclaimer
Non-GAAP Disclaimer This presentation includes certain financial measures, EBITDA, recurring earnings, free cash flow and recurring segment profit, that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission. EBITDA represents the sum of net income (loss
Slide 65: Non-GAAP Reconciliation Schedule
Non-GAAP Reconciliation Schedule Non-GAAP Reconciliation
Slide 66: Non-GAAP Reconciliation Schedule
Non-GAAP Reconciliation Schedule Non-GAAP Reconciliation
Slide 67: Non-GAAP Reconciliation Schedule
Non-GAAP Reconciliation Schedule Non-GAAP Reconciliation
Slide 68: EBITDA Reconciliation
EBITDA Reconciliation Non-GAAP Reconciliation
Slide 69: 4Q 2005 Segment Contribution
* Excluding equity earnings and income (loss) from investments contained in segment profit Dollars in millions 4Q 2005 Segment Contribution Non-GAAP Reconciliation
Slide 70: 2005 Segment Contribution
* Excluding equity earnings and income (loss) from investments contained in segment profit 2005 Segment Contribution Non-GAAP Reconciliation Dollars in millions
Slide 71: 2006 Forecast EBITDA Reconciliation
Net Income $280 - 440 Loss from Disc. Ops. 5 - 0 Net Interest 665 - 705 DD&A 790 - 890 Provision for Income Taxes 200 - 315 Other/Rounding 10 - 0 EBITDA $1,950 - 2,350 MTM Adjustments 280 EBITDA - After MTM Adj. $2,230 - 2,630 Dollars in millions 2006 Forecast EBITDA Reconciliation Feb 28 Guidance N
Slide 72: 2006 Forecast Segment Contribution
Power 1 $(235) - (135) 10 - 20 $(225) - (115) Gas Pipeline $475 - 520 280 - 300 $755 - 820 Segment Profit (Loss) DD&A Segment Profit Before DDA Other (Primarily General Corporate Expense & Investing Income) Rounding TOTAL E&P $650 - 725 335 - 375 $985 - 1,100 Midstream $400 - 500 190 - 200 $590 - 70
Slide 73: 2006 Forecast Guidance Reconciliation
Net Income $280 - 440 Less: Discontinued Operations 5 - 0 Income from Continuing Ops $285 - 440 Non-Recurring Items (Pretax) 30 Less Taxes @ Approx. 39% 12 Non-Recurring After Tax 18 Recurring Income from Cont. Ops $303 - 458 Recurring EPS $0.50 - $0.75 Mark-to-Market Adjustment (Pretax) Less Taxes
Slide 74: Appendix
Appendix Wiliams ——
Slide 75: Fourth Quarter Segment Profit
Fourth Quarter Segment Profit A more detailed schedule reconciling income (loss) from continuing operations to recurring income from continuing operations is available on Williams' Web site at www.williams.com and at the end of this presentation. Dollars in millions Exploration & Production $206 $71
Slide 76: 2005 Segment Profit
2005 Segment Profit Reported Recurring 2005 2004 2005 2004 Exploration & Production $587 $236 $558 $251 Midstream Gas & Liquids 471 550 471 471 Gas Pipeline 586 586 574 595 Power (257) 77 (140) 77 Other (104) (43) (23) (13) Segment Profit $1,283 $1,406 $1,440 $1,381 MTM Adjustments 138 (118) Segment
Slide 77: Debt Balance
Debt Balance1 Scheduled Debt Retirements & Amortization (6) Debt Balance @ 6/30/05 7,744 7.5% Scheduled Debt Retirements & Amortization (23) Debt Balance @ 9/30/05 $7,721 7.5% Scheduled Debt Retirements & Amortization (8) Debt Balance @ 12/31/05 $7,713 7.6% Fixed Rate Debt @ 12/31/05 $7,066 7.7% Var
Slide 78: 2005 Cash Information
2005 Cash Information Consolidated 1 $273 MM of proceeds related to settlement of purchase contract underlying FELINE PACS
Slide 79: EPS Metrics
Consolidated Diluted EPS from Cont. Ops. $0.34 $0.07 $0.01 $0.11 $0.53 Recurring EPS 0.33 0.11 ($0.01) $0.28 0.72 Recurring EPS after MTM Adj. 0.22 0.17 0.22 0.26 0.86 Average Shares (MM) 599 579 581 609 606 2005 1Q 2Q 3Q 4Q Total Diluted EPS from Cont. Ops. - ($0.03) $0.03 $0.17 $0.17 Recurring EPS
Slide 80: 2006 Interest Expense Guidance
Interest on Long-Term Debt $574 - $591 Amortization Discount/Premium and other Debt Expense 35 - 43 Credit Facilities: (incl. Commitment Fees plus LC Usage) 42 - 52 Interest on other Liabilities 22 - 32 Interest Expense $673 - $718 Less: Capitalized Interest (8) - (13) Net Interest Expense Guidance
Slide 81: 2005 Effective Tax Rates
2005 Effective Tax Rates Consolidated
Slide 82: Exploration & Production 2006-08 Hedge Update
2006 2007 2008 Fixed Price at the basin: Volume (MMcfe/d) 299 172 73 Price ($/Mcfe) $3.82 $3.90 $3.96 NYMEX Collars: Volume (MMcfe/d) 65 15 - Price ($/Mcfe) $6.62 - $8.42 $6.50 - $8.25 At the Basin Collars: NWPL Rockies1 Volume (MMcfe/d) 50 50 - Price ($/Mcfe) $6.05 - $7.90 $5.65 - $7.45 EPNG San Ju
Slide 83: 4Q 2005 Net Realized Price Calculation
4Q 2005 Net Realized Price Calculation Exploration & Production
Slide 84: Midstream Margins Above Average
Note: Based on actual realized prices, contractual obligations, shrink, fuel, actual equity liquids percentages, etc. Average Realized Margin shown for 2001-2005. Does not include Discovery volumes. Midstream Margins Above Average Domestic NGL Average Realized Net Margin and Volumes by Quarter Margi
Slide 85: Midstream Strong Free Cash Flow
Midstream Strong Free Cash Flow Dollars in millions Note: - - Segment Profit is stated on a recurring basis. Segment Profit for 2004 has been restated to reflect reclassifications - - Segment Profit + DDA and Capital Spending reflect midpoint of ranges. - - Margin uplift represents actual realized m
Slide 86: 2005 vs 2006 Segment Profit: Gas Pipeline
2005 vs 2006 Segment Profit Gas Pipeline 2005 Reported Segment Profit $586 Non-recurring Items (12) 2005 Recurring Segment Profit 574 Pipeline Safety Costs - Acctg Change (31) Gulfstream Interest Exp/Completion Fee 1 (15) Subtotal 528 Pacific Connector (6) - 0 Higher DDA/Operating Expenses (50) -(8)
Slide 87: Gas Pipeline Strong Free Cash Flow
2003 2004 2005 2006 2007 2008 Mandatory 106 199 329 584 180 165 Maintenance 43 34 40 65 60 55 Expansion 376 22 25 100 200 240 Seg Profit + DDA 862 857 841.4 788 920 933 Gas Pipeline Dollars in millions Strong Free Cash Flow 2004 2005 2006 2007 Seg Profit + DDA Seg Profit + DDA Capital Spending Expan
Slide 88: 4Q05 Financial Statement Changes for Derivatives
4Q05 Financial Statement Changes for Derivatives During 4Q05, Williams reported the following changes related to its derivative portfolio: The net change in Derivative Assets and Liabilities for E&P was positive reflecting the 2006 decrease in gas prices against a short derivative position. The net
Slide 89: West Undiscounted Cash Flows
West Undiscounted Cash Flows Power Expected undiscounted dollars in millions 1 2005 Actual cash flows are realized from a combination of Hedged Cash Flows and Merchant Cash Flows and other risk management and trading activities. 2 Forecasted Hedged Cash Flows represents (1) the estimated cash flows
Slide 90: Mid-Con Undiscounted Cash Flows
Mid-Con Undiscounted Cash Flows Power Expected undiscounted dollars in millions 1 2005 Actual cash flows are realized from a combination of Hedged Cash Flows and Merchant Cash Flows and other risk management and trading activities. 2 Forecasted Hedged Cash Flows represents (1) the estimated cash flo
Slide 91: East Undiscounted Cash Flows
East Undiscounted Cash Flows Power Expected undiscounted dollars in millions 1 2005 Actual cash flows are realized from a combination of Hedged Cash Flows and Merchant Cash Flows and other risk management and trading activities. 2 Forecasted Hedged Cash Flows represents (1) the estimated cash flows
Slide 92: WMB Collateral Sensitivity
Estimated dollars in millions WMB Collateral Sensitivity Note: The margin numbers above assume only the forward marginable position values are included.
Slide 93: Enterprise Risk Management
Enterprise Risk Management 1 Assumes a correlated movement in prices across all commodities, including spreads, for all Williams business units combined. 2 Assumes a non-correlated change in West power prices only, no change in power volatility, full extrinsic value not included. Heat rate and posit
Slide 94: The Williams Companies, Inc.
The Williams Companies, Inc.