Williams Companies, Inc. (the) · NYSE:WMB
Williams Companies, Inc. (the) — Q2 2005 Earnings Presentation
85 slides from Williams Companies, Inc. (the)'s earnings presentation, Aug 4, 2005
Slide 1: Williams 2005 2nd Quarter Earnings Release
Williams 2005 2nd Quarter Earnings Release August 4, 2005
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: 2Q05 Review
2Q05 Review Steve Malcolm Chairman, President & CEO
Slide 5: Headlines
Headlines Key performance measures - moving up E&P segment profit - up more than 100% Domestic gas production - up 18% during half-year NGL sales volumes - up 13% for 6-month period Net cash from operations - up 29% during first quarter Recurring after mark-to-market - up more than 100% Overview
Slide 6: Other Developments
Other Developments Refined 2Q05 earnings guidance Returning more to investors via dividends Hedging gas production price risk with collars Continuing MLP process Williams Partners LP in SEC registration process Filed 3rd amendment to preliminary registration statement No more details in today's call
Slide 7: Headlines: growth opportunities
Headlines Williams' growth opportunities are growing Exploration & Production Piceance drilling locations and reserves - up significantly Developing new Piceance opportunities Entry into Ft. Worth Basin's Barnett Shale play Expect continued strong production growth Midstream Drilling activity in Wes
Slide 8: Financial Results and 2005 Outlook
Financial Results and 2005 Outlook Don Chappel CFO
Slide 9: Financial Results
Financial Results 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 (except per share amounts) 2nd Qtr YTD 2005 2
Slide 10: Recurring Income from Cont. Operations
Recurring Income from Cont. Operations 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 2nd Qtr YTD 2005 2004 20
Slide 11: Recurring Income After Mark-to-Market Adjustments
2nd Qtr YTD 2005 2004 2005 2004 Recurring Income from Cont. Operations After Mark-to-Market Adjustments Note: Adjustments have been made to reverse estimated forward unrealized MTM gains and add estimated realized gains from MTM previously recognized, i.e. assumes MTM accounting had never been appli
Slide 12: Net Income Components
Net Income Components 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 (except per share amounts) Segment Profit
Slide 13: Second Quarter Segment Profit
Second 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 $118 $43
Slide 14: 2005 YTD Segment Profit
2005 YTD Segment Profit Reported Recurring 2005 2004 2005 2004 Exploration & Production $222 $95 $214 $106 Midstream Gas & Liquids 238 209 238 192 Gas Pipeline 332 280 297 289 Power 39 12 64 12 Other (65) (24) (12) (5) Segment Profit $766 $572 $801 $594 MTM Adjustments (53) 53 Segment Profit after M
Slide 15: Major Changes in Quarter
Major Changes in Quarter Recurring Segment Profit After Mark-to-Market Adjustments Consolidated Recurring Segment Profit after MTM Adj. 2Q04 $260 Exploration & Production 63 - Higher production volumes +$20million - Higher net realized price +$45 million Midstream 27 - Increased NGL margins +$16 mil
Slide 16: Cash Information
2Q05 YTD05 Beginning Unrestricted $1,210 $930 Cash flow from Continuing Operations 489 793 Proceeds from Issuing Common1 9 297 Sale of WilTel Note - 55 Contract Termination Payment - 88 Debt Retirements (5) (221) Capital Expenditures (294) (517) Dividends (29) (57) Other-Net (83) (71) Change in Cash
Slide 17: Debt Balance
Debt Balance Scheduled Debt Retirements & Amortization (6) Debt Balance @ 6/30/051 $7,744 7.5% Fixed Rate Debt @ 6/30/05 $7,089 7.7% Variable Rate Debt @ 6/30/05 $655 5.2% Avg. Cost 1 Debt is long-term debt due within 1 year plus long-term debt. Dollars in millions Consolidated Debt Balance @ 12/31/
Slide 18: Business Unit Results
Business Unit Results
Slide 19: Exploration & Production
Exploration & Production Ralph Hill Senior Vice President
Slide 20: E&P Segment Profit
Segment Profit Dollars in millions 2nd Qtr YTD 2005 2004 2005 2004 Segment Profit $118 $43 $222 $95 Nonrecurring: Ownership Issue - 11 - 11 Gain on sale of assets - - (8) - Recurring Segment Profit $118 $551 $214 $106 2Q04 to 2Q05 financial highlights include: Volume increase of 17.5% Net realized p
Slide 21: Strong Domestic Production Growth
Strong Domestic Production Growth Exploration & Production 2004 2005
Slide 22: 2nd Quarter and 2005 Accomplishments
Volumes rising in all core basins Big George gross production up to 110 MMcf/d San Juan hits record production Increase in Piceance Valley location inventory and probable reserves 11 rigs operating in Piceance Valley, 4 rigs in Trail Ridge & Ryan Gulch H&P first rig on schedule for Nov 1 Ft. Worth-B
Slide 23: Piceance Production Growth
Piceance Production Growth Up 100 MMcf/d or 48% over a year ago Up 28 MMcf/d or 10% sequentially Exploration & Production
Slide 24: Powder River Basin Big George production
Up 48 MMcf/d or 78% over a year ago Up 25 MMcf/d or 29% sequentially Big George production increase offsets Wyodak decline Powder River Basin Big George Coal Area Exploration & Production
Slide 25: Updated 3P Reserves
Updated 3P Reserves 3 Tcf 8.5 Tcf 3P '04 YE 7.0 Tcf 37.5% increase in probable and possible reserves Extensive study of Piceance Valley yielded additional 1,600 locations and ~1.5 Tcf probable and possible reserves Rock quality Land/topography Drilling reach H&P rig capabilities provide access to so
Slide 26: Entrance into Ft. Worth Basin
Entrance into Ft. Worth Basin Entrance into Ft. Worth Basin Barnett Shale Arkoma Barnett Shale position established: 13,000 net acres Proved reserves of 17 Bcf with 40-50 Bcfe probable and possible High working interest averaging ~90% Utilizes Williams' Mid-continent horizontal drilling expertise Pr
Slide 27: E&P 2005-2007 Hedge Update
Dollars in millions Exploration & Production 2005-2007 Hedge Update NEW 4Q only 1 Please note basin locations not NYMEX 2005 2006 2007 Fixed Price: 2nd Half NYMEX Volume (MMcfe/d) 283 299 172 Price ($/Mcfe) $4.48 $4.39 $4.18 Collars : NYMEX Volume (MMcfe/d) 50 65 15 Price ($/Mcfe) $6.75 - $8.50 $6.6
Slide 28: E&P 2005-2007 Guidance
2005 2006 2007 Segment profit $410 - 4851 $520 - 595 $595 - 720 Annual DD&A 235 - 265 295 - 335 365 - 415 Segment profit + DD&A $645 - 750 $815 - 930 $960 - 1,135 Capital spending $605 - 680 $760 - 860 $735 - 885 Production (MMcfe/d) 625 - 700 740 - 840 850 - 950 Unhedged Price Assumption (NYMEX, $/
Slide 29: E&P Key Points
Delivering meaningful volume growth through expanded development drilling activity -- Piceance is primary growth driver Experienced and talented workforce Long history of high drilling success, low finding costs Short time cycle investments, fast cash returns Maintaining top quartile cost and effici
Slide 30: Midstream
Midstream Alan Armstrong Senior Vice President
Slide 31: Midstream Segment Profit
Segment Profit Dollars in millions 2nd Qtr YTD 2005 2004 2005 2004 Segment Profit $109 $99 $238 $209 Nonrecurring: Devils Tower Revenue Recognition1 (17) (17) Recurring Segment Profit $109 $82 $238 $192 2Q04 to 2Q05 financial highlights include: $16 million - Increase in domestic NGL margins $9 mill
Slide 32: Midstream 2nd Quarter and 2005 Accomplishments
2nd Quarter and 2005 Accomplishments 2Q05 vs 2Q04: Gathering volumes up 5% Organic Growth: Quintana Mesa Wamsutter Phase 1 Raised $55 million in asset sales 3Q '02 4Q '02 1Q '03 1Q '04 2Q '03 2Q '04 3Q '03 4Q '03 1Q 2Q 3Q 4Q 143 118.8 151.1 150.7 92.9 143.5 109 105.7 Recurring Segment Profit 102.2 7
Slide 33: Midstream 2005-2007 Guidance
2005 2006 2007 Segment Profit $400-470 $400-500 $400-520 Annual DD&A 180-190 185-195 190-200 Segment Profit + DDA $580-660 $585-695 $590-720 Capital Spending $120-140 $110-130 $100-130 Note: If guidance has changed, previous guidance from 5/5/2005 is shown in italics directly below Midstream 2005-20
Slide 34: Deepwater Activity
Deepwater Activity Midstream
Slide 35: Midstream Key Points
Key Points Strong earnings and cash flows Raising 2005 segment profit guidance, again Capturing growth opportunities Organic growth around our Western assets Footprint expansion in the deepwater One-two punch Premier assets in growth basins Attracting volumes through reliability Midstream
Slide 36: Gas Pipeline
Gas Pipeline Phil Wright Senior Vice President
Slide 37: Gas Pipeline Segment Profit
Segment Profit Dollars in millions Gas Pipeline Segment Profit $165 $133 $332 $280 Nonrecurring Pension expense reduction1 (17) - (17) - Adjustment to carrying value of certain liabilities1 (5) - (18) - Write-off hydrostatic testing - 9 - 9 Recurring Segment Profit $143 $142 $297 $289 2Q04 to 2Q05 f
Slide 38: Gas Pipeline 2nd Quarter and 2005 Accomplishments
Northwest's 26" Replacement - FERC issues preliminary Order Construction began in July for Central New Jersey expansion project Gulfstream Phase II began flowing volumes under two new long term firm contracts totaling 400MDt/d Transco holds open season for the Potomac Expansion project 1Q 2Q 3Q 4Q 2
Slide 39: Gas Pipeline 2005-2007 Guidance
2005 2006 2007 Segment Profit $590 - 6151 $500 - 5652 $585 - 655 Annual DD&A 270 - 280 290 - 300 300 - 310 Segment Profit + DDA $860 - 895 $790 - 865 $885 - 965 Capital Spending $370 - 420 $600 - 700 $250 - 325 Dollars in millions 2005-2007 Guidance Note: If guidance has changed, previous guidance f
Slide 40: 2005-2007 Capital Spending Detail
2005-2007 Capital Spending Detail $250 - 325 $600 - 700 $370 - 420 Total 70 - 90 10 - 20 20 - 30 2 276 48 $180 - 235 $310 - 400 $305 - 335 Normal Maintenance/ Compliance 2007 2006 2005 Dollars in millions NWP 26" Replacement Expansion Note: Sum of ranges may not add due to rounding Gas Pipeline 475
Slide 41: Gas Pipeline Key Points
Key Points Another strong quarter; operationally and financially Strong free cash flow generator Increased 2005 guidance due to strong YTD recurring earnings and impacts of prior period items Increased 2007 guidance as higher capital expected to be recovered through rates Guidance not reflective of
Slide 42: Power
Power Bill Hobbs Senior Vice President
Slide 43: Power Segment Profit
Segment Profit Dollars in millions 2nd Qtr YTD 2005 2004 2005 2004 Gross Margin (Includes MTM) $(35) $72 $105 $71 SG&A (17) (20) (33) (36) Operating & Other Inc. / (Expense) (23) (8) (33) (23) Segment Profit/(Loss) (Includes MTM) $(75) $44 $39 $12 MTM Adjustments 55 (59) (53) 53 Segment Profit/(Loss
Slide 44: Power Segment Profit to Cash Flow
Power 1 Includes YTD nonrecurring adjustments which decrease reported earnings by $25 million. Power Segment Standalone CFFO would be $25 million higher on a recurring basis. A more detailed schedule reconciling income (loss) from continuing operations to recurring income from continuing operations
Slide 45: Power 2005-2007 Guidance
2005 2006 2007 5/05/05 Segment Profit Guidance ($50) - 50 ($250) - (100) ($200) - (50) MTM Earnings (2Q05) 22 Est. Forward Impact of 2Q05 MTM 4 (20) (18) YTD Non-Recurring (25 ) - - Total Impact 1 (20) (18) Change in Segment Profit Guidance - (20) (20) Segment Profit Guidance (50) - 50 (270) - (120)
Slide 46: Combined Power Portfolio Cash Flow Analysis
Cash Flow Analysis Undiscounted dollars in millions (GAAP Measure) Note: 2Q05 forecast estimated as of 12/30/04. 2Q05 actual cash flows agree in total with Power's Cash Flow Statement; however the allocation of actual cash flows to the various deal types is based on estimates. The YTD05 forecasted "
Slide 47: Power Key Points
Key Points Recurring results on target CFFO YTD positive and on target Seasonal cash flows - 3rd quarter is historically best quarter for merchant power Full year recurring segment profit guidance remains unchanged Deal flow is increasing Application of FAS133 reduces 2Q05 earnings volatility Market
Slide 48: 2005-2007 Consolidated Outlook
2005-2007 Consolidated Outlook Don Chappel CFO
Slide 49: Consolidated 2005 Guidance
Segment profit before MTM adjustment $1,300 - $1,585 $1,275 - $1,575 Net Interest Expense (650) - (670) (630) - (665) Other (Primarily General Corp. Costs) (70) - (100) (80) - (110) Pretax Income 580 - 815 565 - 800 Provision for Income Tax (220) - (335) (235) - (320) Income from Continuing Ops 360
Slide 50: 2005-2007 Segment Profit - Reported
Dollars in millions 2005-2007 Segment Profit - Reported Exploration & Production Midstream Gas Pipeline Power Other/Corp. Total MTM Adjustment Total After MTM Adj. 20051 2006 Consolidated $410 - 485 400 - 470 590 - 615 (50) - 50 (50) - (35)2 $1,300 - 1,585 75 $1,375 - 1,660 $520 - 595 400 - 500 500
Slide 51: 2005 Segment Profit - Recurring
Dollars in millions Exploration & Production Midstream Gas Pipeline Power Other/Corp. Total MTM Adjustment Total After MTM Adj. Reported Consolidated $410 - 485 400 - 470 590 - 615 (50) - 50 (50) - (35) $1,300 - 1,585 75 $1,375 - 1,660 YTD Non-Recurring ($8) - - (35) 25 53 $35 - - $35 Recurring $402
Slide 52: Consolidated 2005-2007 Capital Expenditures
2005 2006 2007 Exploration & Prod. $605 - 680 $760 - 860 $735 - 885 Midstream 120 - 140 110 - 130 100 - 130 Gas Pipeline 370 - 420 600 - 700 250 - 325 Power - - - Other/Corporate 10 - 30 10 - 30 10 - 30 Total $1,100 - 1,300 $1,525 - 1,750 $1,100 - 1,300 Dollars in millions Notes: - - Sum of ranges f
Slide 53: 2005-2007 Outlook
1 Includes non-recurring adjustments of $35 million 2 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 5/5/05 is shown in italics directly below Dollars in millions
Slide 54: Guidance Reconciliation: Capex and Segment Profit
Dollars in millions 2005-2007 Guidance Reconciliation Consolidated Capital Expenditures May 5 Guidance E&P: Ft. Worth Basin Entry / Drilling Gas Pipes: New 2006 Projects Other Misc / Rounding Aug. 4 Guidance 2005 $1,025 - 1,225 75 - - - - $1,100 - 1,300 2006 $1,350 - 1,550 35 125 - 150 15 $1,525 - 1
Slide 55: Guidance Reconciliation: Cash Flow from Operations
Dollars in millions 2005-2007 Guidance Reconciliation Consolidated Cash Flow from Operations (CFFO): May 5 Guidance Tax Settlement Reclassification to "Investing"1 E&P Segment Profit Increase Midstream Segment Profit Increase Other Increases - net Aug. 4 Guidance 2005 $1,300 - 1,600 (180) - (200) (8
Slide 56: Strong Operating Cash Flow Growth & Increasing Investment Opportunities
Strong Operating Cash Flow Growth & Increasing Investment Opportunities . . . Consolidated 2003 2004 2005 2006 2007 Cap Ex-Low 790 1100 1525 1100 Cap Ex-High 790 1300 1750 1300 CFFO-Low 588 1482 1150 1550 1650 CFFO-High 588 1473 1450 1850 1950 Debt to Cap 0.75 0.623 0.58 0.57 0.54 0.75 0.623 0.59 0.
Slide 57: Segment Profit Guidance Trend
Segment Profit Guidance Trend Consolidated 2004 2005 2006 2007 SPAM Low 1263 1375 1515 1640 SPAM High 1263 1660 1815 2065 SP Low 1381 1275 1175 1375 SP High 1381 1575 1475 1800 Cap Ex-Low 790 1100 1525 1100 Cap Ex-High 790 1300 1750 1300 $ Millions $1,375 to $1,660 $1,515 to $1,815 $1,640 to $2,065
Slide 58: 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 59: Summary
Summary Steve Malcolm Chairman, President & CEO
Slide 60: Hitting on all cylinders
Hitting on all cylinders Business segment performance Consolidated earnings Cash from operations Growth opportunities growing Growth activity moving key performance measures up Seizing rich opportunities to grow shareholder value Key Points Summary
Slide 61: Q&A
Q&A
Slide 62: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 63: 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 64: Non-GAAP Reconciliation Schedule
Non-GAAP Reconciliation Schedule Non-GAAP Reconciliation
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: EBITDA Reconciliation
EBITDA Reconciliation 178 DD&A 42 Provision for Income Taxes 163 Net Interest Expense $41 Net Income $423 EBITDA (1) (Income) Loss from Disc. Operations Non-GAAP Reconciliation 2Q05 Dollars in millions YTD $242 1 327 356 171 $1,097
Slide 68: 2Q 2005 Segment Contribution
* Excluding equity earnings and income (loss) from investments contained in segment profit Dollars in millions Total Segment Profit (Loss) $256 DD&A 178 Segment Profit before DDA $434 General Corporate Expense (36) Investing Income* 21 Other Income 4 TOTAL $423 Gas Pipeline $109 46 $155 Corp/Other (
Slide 69: 2005 Forecast EBITDA Reconciliation
Net Income $350 - 480 $320 - 480 (Income) Loss from Disc. Ops. 10 - 0 10 - 0 Net Interest 650 - 670 630 - 665 DD&A 700 - 775 700 - 775 Provision for Income Taxes 220 - 335 235 - 320 Other/Rounding - (20) - (15) EBITDA - Reported $1,930 - 2,260 $1,875 - 2,225 MTM Adjustments 75 100 EBITDA - Reported
Slide 70: 2005 Forecast Segment Contribution
2005 Forecast Segment Contribution Non-GAAP Reconciliation Power 1 $(50) - 50 10 - 20 $(40) - 70 Gas Pipeline $590 - 615 270 - 280 $860 - 895 Segment Profit (Loss) DD&A Segment Profit before DDA Other (Primarily General Corporate Expense & Investing Income) TOTAL REPORTED E&P $410 - 485 235 - 265 $6
Slide 71: 2005 Forecast Guidance Reconciliation
Net Income $350 - 480 $320 - 480 Discontinued Operations 10 - 0 10 - 0 Income from Continuing Ops $360 - 480 $330 - 480 Non-Recurring Items (Pretax) 23 (7) Less Taxes @ Approx. 39% (6) 3 Non-Recurring After Tax 17 (4) Recurring Income from Cont. Ops $377 - 497 $326 - 476 Recurring EPS $0.62 - $0.82
Slide 72: Appendix
Appendix
Slide 73: EPS Metrics
Consolidated EPS $0.34 $0.07 - - $0.41 Recurring EPS 0.33 0.11 - - 0.45 Rec. EPS after MTM Adj. 0.22 0.17 - - 0.39 Average Shares (MM) 599 579 - - 603 2005 1Q 2Q 3Q 4Q Total EPS $0.02 ($0.03) $0.19 $0.13 $0.31 Recurring EPS 0.01 0.10 0.26 0.12 0.49 Rec. EPS after MTM Adj. 0.14 0.03 0.09 0.09 0.35 Av
Slide 74: 2005 Interest Expense Guidance
Interest on Long-Term Debt $575 - 585 Amortization Discount/Premium and other Debt Expense 25 Credit Facilities: (incl. Commitment Fees plus LC Usage) 32 - 40 Interest on other Liabilities 23 - 30 Interest Expense $655 - 680 Less: Capitalized Interest (5) - (10) Net Interest Expense Guidance $650 -
Slide 75: Consolidated Segment Profit and CFFO Drivers
Drivers Consolidated Dollars in millions Segment (Based on Guidance Midpoints) Profit CFFO 2004 1,381 1 1,473 Interest Savings - - 245 Tax Settlement - - (200) 2005 Longhorn Impairment (50) - - Gas Pipes - Lower Grays Harbor (15) (18) - 2005 Non Recurring Items 41 - - - Remove 2004 One Time Gains (9
Slide 76: 2005-2007 Maintenance vs. Growth Capital
Dollars in millions 2005-2007 Maintenance vs. Growth Capital Note: Sum of ranges for each business line does not necessarily match total range Explor. & Prod. Growth Maintenance Total Midstream Growth Maintenance Total Gas Pipeline Growth Maintenance Total Power Other/Corp - Maint. Total: Growth Mai
Slide 77: 2005 Effective Tax Rates
2005 Effective Tax Rates Dollars in millions Consolidated FIrst Quarter 2005 Federal 115 35% State 14 4% Foreign (5) - -2% Other 5 2% Tax Provision 129 $ 39% Second Quarter 2005 Federal 29 35% State 1 3% Foreign 5 6% Other 7 7% Tax Provision 42 $ 51% Year-to-Date 2005 Federal 145 35% State 16 4% For
Slide 78: 2Q 2005 Net Realized Price Calculation
2Q 2005 Net Realized Price Calculation Exploration & Production 2Q05 Unhedged Hedge Market Price: NYMEX including collars $6.60 - $6.80 $4.60 Basis Differential (0.50 - 0.70) (0.48) Net basin market price $5.90 - $6.30 $4.12 Fuel & Shrinkage/Gathering/ (0.80 - 1.00) (0.80 - 1.00) Transportation Net
Slide 79: 2005 Price Modeling
2005 Price Modeling Unhedged Price (NYMEX) $6.34 $5.96 $5.75 2005 2006 2007 Note: Economic impact of hedges may be different from the volume hedged due primarily to fuel and shrink and direct taxes Exploration & Production 2nd Half 2005 2005 Unhedged Hedge Market Price: NYMEX $6.10 - $6.50 $4.48 Bas
Slide 80: Midstream Margins Above Average
Note: Based on actual realized prices, contractual obligations, shrink, fuel, actual equity liquids percentages, etc. Average Realized Margin shown for 2000-2004. Midstream Margins Above Average Domestic NGL Average Realized Net Margin and Volumes by Quarter Margin (Cents / Gallon) Total Production
Slide 81: Fee-Based Bedrock of Earnings
Fee-Based Bedrock of Earnings 2004 2005 2006 2007 Fee 694 718 812 823 Commodity 301 237 200 200 Note: Total revenues less cost of goods sold. Reflects 5 year average (Jan '00-Dec '04) margins in 2006-2007 at mid-point of range. Midstream 30% 70% 25% 21% 20% 75% 79% 80%
Slide 82: Midstream Strong Free Cash Flow
Dollars in millions Note: - - Segment Profit is stated on a recurring basis. Segment Profit for 2003 & 2004 has been restated to reflect reclassifications - - Segment Profit + DDA and Capital Spending reflect midpoint of ranges. - - Margin uplift represents actual realized margin in excess of foreca
Slide 83: Gas Pipeline Strong Free Cash Flow
Gas Pipeline Dollars in millions Strong Free Cash Flow 2003 2004 2005 2006 2007 Seg Profit + DDA Seg Profit + DDA Capital Spending Expansion Maintenance Mandatory Note: - - Segment Profit is stated on a recurring basis. - - Segment Profit + DDA and Capital Spending reflect midpoint of ranges for 200
Slide 84: WMB Collateral Outstanding
Margins & Ad. Assur. $6 - $53 - $59 Prepayments - 1 34 - 35 Subtotal $6 $1 $87 - $94 Letters of Credit 469 183 270 92 1,013 Total as of 6/30/05 $475 $184 $357 $92 $1,107 Total as of 3/31/05* $566 $169 $311 $90 $1,136 Change ($91) $15 $46 $2 ($29) Corp./ E&P Midstream Power Other Total Dollars in mil
Slide 85: WMB Collateral Sensitivity
Margin volatility (1% chance of exceeding) - - Potential incremental collateral requirement 6/30/05 3/31/05 30 days ($178) ($124) 180 days ($458) ($328) 360 days ($351) ($341) Assumption: The margin numbers above consist of only the forward marginable position values, starting from August 2005. Doll