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

Williams Companies, Inc. (the) — The Williams Companies — Q4 2014 Earnings Presentation

33 slides from Williams Companies, Inc. (the)'s earnings presentation, Feb 19, 2015

  1. Slide 1: Williams and Williams Partners Fourth Quarter Earnings Call

    Williams and Williams Partners Fourth Quarter Earnings Call February 19, 2015

  2. Slide 2: Fourth Quarter Summary and Outlook

    Fourth Quarter Summary and Outlook  4Q: Results and commissioning major assets  Large-scale assets ramping up in 1Q 2015 for expected strong contribution in balance of 2015 and beyond  WPZ/ACMP merger complete; creates leading, large-cap natural gas infrastructure-focused MLP  Updating post-merg

  3. Slide 3: Fourth Quarter Financial Results vs. Prior Year

    Fourth Quarter Financial Results vs. Prior Year WMB: Results reflect initial benefits of Access acquisition  Received $515 million in 4Q MLP cash distributions, up $70M (16%)  Adjusted Segment Profit + DD&A – 30% higher, up $216 million to $944 million Pre-merger WPZ: Fee-based revenue up $55 mill

  4. Slide 4: WPZ: Large-scale, value-creating projects ready to contribute; many more to come

    WPZ: Large-scale, value-creating projects ready to contribute; many more to come Recent Milestones  Gulfstar One commissioned in November 2014; ramping up production in 1Q 2015  Transco delivered record peak day volume of 12.6 MMdt; completed two recent expansions  ACMP - Over 6.5 Bcf/d – gross v

  5. Slide 5: Merged WPZ expecting 88% fee-based gross margins

    Williams Partners L.P. (WPZ) Merged WPZ expecting 88% fee-based gross margins 2015 FORECAST: $6.0 BILLION 3% 9% Regulated Gas Pipeline Fee Based Revenue (30%) 30% (Demand Payments) Access Midstream Fee Based Revenue (27%) (Primarily Cost of Service and MVC) 31% Other Fee Based Revenue (31%) Olefins

  6. Slide 6: Merged WPZ allocating 99% of $9.3 billion in growth capital to fee-based projects

    Merged WPZ allocating 99% of $9.3 billion in growth Williams Partners L.P. (WPZ) capital guidance to fee-based projects 2015-2017 GROWTH CAPITAL FORECAST 1% Regulated Gas Pipeline Fee Based 26% Projects (52%) (Demand Payments) Access Fee Based Projects (21%) 52% (Primarily Cost of Service and MVC) O

  7. Slide 7: Nearly $30 Billion in committed plus potential capital projects 2014-19

    Nearly $30 Billion in committed plus potential capital projects 2014-19 TARGET IN-SERVICE DATES FOR VISIBLE GROWTH PROJECTS 2014 2015 2016 2017 2018+  NE: Frac II  Geismar  Constitution  Atlantic Sunrise  Transco – numerous other Expansion Pipeline expansions  NE: ethane line  Dalton Lateral

  8. Slide 8: Williams well positioned for strong growth through lower commodity price cycles

    Williams well positioned for strong growth through lower commodity price cycles  ACMP/WPZ merger created leading natural gas MLP with strong cash distribution growth and investment-grade credit ratings – Expect WPZ per unit distribution of $3.40 in 2015 with 7% to 11% annual growth rate through 201

  9. Slide 9: Appendix

    Appendix

  10. Slide 10: Updated guidance reflects sharply lower commodity price assumptions

    Updated guidance reflects sharply lower commodity price assumptions 2015 2016 2017 Guidance Metric Low Mid High Low Mid High Low Mid High Adjusted EBITDA (millions) Williams Partners $4,300 $4,465 $4,630 $5,120 $5,315 $5,510 $5,750 $5,965 $6,180 Expected Williams NGL & Petchem Services (5) (5) (5) (

  11. Slide 11: Expect 10-15% Annual Dividend Growth with Expanding Coverage

    Financial Outlook – WMB Expect 10 - 15% Annual Dividend Growth with Expanding Coverage DIVIDEND ILLUSTRATION AND COVERAGE CALCULATION (Midpoint of guidance, dollars in millions except per share amounts) 2015 2016 2017 Distributions from Williams Partners $2,140 $2,455 $2,805 Williams NGL & Petchem S

  12. Slide 12: Updated guidance reflects sharply lower commodity price assumptions

    Updated guidance reflects sharply lower commodity price assumptions 2015 2016 2017 Expected Benefits Commodity Price Assumptions Low Mid High Low Mid High Low Mid High Crude – WTI $/barrel $45.00 $55.00 $65.00 $53.75 $65.00 $76.25 $57.50 $70.00 $82.50 for reference only(1) NG – Henry Hub $/MMBtu $2.

  13. Slide 13: Sensitivities to price changes

    Corporate Sensitivities to price changes (millions) NG Ethane Propane C4+ Ethylene Propylene 2 + $.10/Mmbtu ($5.9) WPZ + $.01/gallon ($4.2) $3.7 $2.9 + $.01/pound $14.4 $1.9 + $.10/Mmbtu ($0.2) Williams NGL & 2015 + $.01/gallon $0.1 $0.1 $0.0 Petchem Services 1 + $.01/pound $0.0 $0.1 + $.10/Mmbtu ($

  14. Slide 14: Reconciliations

    Reconciliations

  15. Slide 15: WMB Non-GAAP Disclaimer

    WMB Non-GAAP Reconciliations WMB Non-GAAP Disclaimer  This presentation includes certain financial measures – adjusted EBITDA, adjusted segment profit and adjusted segment profit + DD&A, adjusted income from continuing operations (“earnings”), adjusted earnings per share, cash available for dividen

  16. Slide 16: WMB Non-GAAP reconciliation schedule

    WMB Non-GAAP reconciliation schedule 2013 2014 (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 $ 162 $ 149

  17. Slide 17: WMB Non-GAAP reconciliation schedule cont'd

    WMB Non-GAAP reconciliation schedule cont’d 2013 2014 (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 Adjustments below segment profit (loss) Reorganization-related costs 2 — — — 2 — — — — — Transition-related costs — — — — —

  18. Slide 18: WMB Non-GAAP reconciliation schedule – Adjusted segment profit

    WMB Non-GAAP reconciliation schedule – Adjusted segment profit (loss) and adjusted segment profit +DD&A 2013 2014 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year (Dollars in millions) Segment profit (loss): Williams Partners $ 494 $ 427 $ 411 $ 345 $ 1,677 $ 503 $ 393 $ 373

  19. Slide 19: WMB Non-GAAP reconciliation schedule – Adjusted segment profit cont'd

    WMB Non-GAAP reconciliation schedule – Adjusted segment profit (loss) and adjusted segment profit +DD&A cont’d 2013 2014 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year (Dollars in millions) Depreciation and amortization (DD&A): Williams Partners $ 196 $ 191 $ 201 $ 203 $ 7

  20. Slide 20: 2014 Dividend Illustration and Coverage Calculation

    2014 Dividend Illustration and Coverage Calculation 2014 (Dollars in millions, except per share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Distributions from Pre-merger WPZ (accrued / “as declared” basis) $ 422 $ 431 $ 438 $ — $ 1,291 Distributions from Pre-merger ACMP (accrued / “as declared” ba

  21. Slide 21: WMB Net Income to Adjusted EBITDA Reconciliation

    WMB Net Income to Adjusted EBITDA Reconciliation 2 0 1 5 WPZ WMB NGL PETCHEM CORPORATE / OTHER TOTAL WMB Low Base High Low Base High Low Base High Low Base High Net income from continuing operations $1,555 $1,720 $1,885 $0 $0 $0 ($630) ($670) ($710) $925 $1,050 $1,175 Add: Net interest expense 855 8

  22. Slide 22: Reconciliation of Proportionate Share of Adjusted EBITDA from Equity Investments

    Reconciliation of Proportionate Share of Adjusted EBITDA from Equity Investments (Dollars in millions) 2 0 1 5 2 0 1 6 2 0 1 7 Low Base High Low Base High Low Base High Net income from continuing operations $380 $385 $390 $495 $505 $515 $645 $660 $675 Add: Net interest expense 53 53 53 58 58 58 61 6

  23. Slide 23: WMB 2015 Schedule of Expected EBITDA Adjustments

    WMB 2015 Schedule of Expected EBITDA Adjustments (Dollars in millions) Williams Partners (WPZ) Geismar incident adjustment for insurance and timing (150) ACMP retention expenses 35 Total Williams Partners adjustments (115) Williams Corporate / Other Adjustments: ACMP acquisition related expenses 25

  24. Slide 24: WPZ Non-GAAP Disclaimer

    WPZ Non-GAAP Disclaimer  This presentation includes certain financial measures – adjusted EBITDA, adjusted segment profit and adjusted segment profit + DD&A, distributable cash flow, and cash distribution coverage ratio – that are non-GAAP financial measures as defined under the rules of the Securi

  25. Slide 25: WPZ reconciliation of Non-GAAP distributable cash flow to GAAP net income

    Pre-merger Williams Partners L.P. WPZ reconciliation of Non-GAAP distributable cash flow to GAAP net income 2013 2014 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year (Dollars in millions, except coverage ratios) Williams Partners L.P. Reconciliation of Non-GAAP “Distributab

  26. Slide 26: WPZ adjusted segment profit reconciliation and adjusted segment profit + DD&A

    Pre-merger Williams Partners L.P. WPZ adjusted segment profit reconciliation and adjusted segment profit + DD&A 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Segment profit (loss): Northeast G&P $ (9) $ 12 $ (1) $ (26) $ (24) $ 6 $ 15 $ 35

  27. Slide 27: WPZ adjusted segment profit reconciliation cont'd

    Pre-merger Williams Partners L.P. WPZ adjusted segment profit reconciliation and adjusted segment profit + DD&A cont’d 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Adjusted segment profit (loss): Northeast G&P $ (9) $ 12 $ 8 $ (3) $ 8 $ 12

  28. Slide 28: Access Midstream Partners Reconciliation of non-GAAP Financial Measures

    Pre-merger Access Midstream Partners L.P. Access Midstream Partners, L.P. Reconciliation of non-GAAP Financial Measures Three Months Ended December 31, ($ in thousands) 2014 2013 Net Income attributable to Williams Partners L.P. (formerly Access Midstream Partners, L.P.).............................

  29. Slide 29: WPZ Distributable Cash Flow (DCF)

    WPZ Non-GAAP Reconciliations WPZ Distributable Cash Flow (DCF) 2 0 1 5 2 0 1 6 2 0 1 7 Dollars in millions, except per L.P. unit Low Base High Low Base High Low Base High 1 Adjusted EBITDA $4,300 $4,465 $4,630 $5,120 $5,315 $5,510 $5,750 $5,965 $6,180 Less: Maintenance Capex 2 (430) (430) (430) (440

  30. Slide 30: WPZ Net Income to Adjusted EBITDA Reconciliation

    WPZ Non-GAAP Reconciliations WPZ Net Income to Adjusted EBITDA Reconciliation 2 0 1 5 2 0 1 6 2 0 1 7 ('$ in millions) Low Base High Low Base High Low Base High Net income from continuing operations $1,555 $1,720 $1,885 $2,025 $2,225 $2,425 $2,465 $2,690 $2,915 Add: Net interest expense 855 855 855

  31. Slide 31: Forward Looking Statements

    Forward Looking Statements

  32. Slide 32: Forward Looking Statements

    Forward Looking Statements  The reports, filings, and other public announcements of The Williams Companies, Inc. (Williams) and Williams Partners L.P. (WPZ) may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are "forwar

  33. Slide 33: Forward Looking Statements (cont'd)

    Forward Looking Statements (cont’d) – Inflation, interest rates, and fluctuation in foreign exchange rates and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers); – The strength and financia

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