Williams Companies, Inc. (the) · NYSE:WMB
Williams Companies, Inc. (the) — Merger or Acquisition (September 2015)
24 slides from Williams Companies, Inc. (the)'s merger presentation, Sep 28, 2015
Slide 1: Energy Transfer Equity, L.P. to Acquire Williams
Filed by Energy Transfer Corp LP pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: The Williams Companies Inc. Commission File No.: 001-4174 Date: September 28, 2015 ENERGY TRANSFER EQUITY, L.P. T
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER Additional Information and Where to Find It SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND THE REGISTRATION STATEMENT REGARDING THE TRANSACTION (THE “TRANSACTION”) INVOLVING THE BUSINESS COMBINATION OF ENERGY TRANSFER EQUITY, L.P. (“ETE”) AND THE WILLIAMS COMP
Slide 3: Overview of ETE / WMB Merger Terms
OVERVIEW OF ETE / WMB MERGER TERMS Energy Transfer Equity, L.P. (“ETE”) has executed a definitive agreement to combine with Williams (“WMB”) in a transaction valued at approximately $38 billion as of September 25, 2015, including approximately $4.6 billion of assumed WMB debt Implied offer price of
Slide 4: Overview of ETE / WMB Merger Terms (Cont'd)
OVERVIEW OF ETE / WMB MERGER TERMS (CONT’D) In addition, each ETC common share received by WMB stockholders in the merger will have attached to it one contingent consideration right (“CCR”) The WMB Board wanted protection that the newly created ETC common shares would trade at least at parity to ETE
Slide 5: Combination Creates a Unique Collection of Compatible Businesses
COMBINATION CREATES A UNIQUE COLLECTION OF COMPATIBLE BUSINESSES THAT WILL DRIVE NEAR- AND LONG-TERM VALUE Largest Energy Infrastructure Group Creates the largest energy infrastructure company by combining two of the largest diversified MLPs, the second largest crude and logistics MLP, a fast-growin
Slide 6: Illustrative Transaction
ILLUSTRATIVE TRANSACTION 1 Energy Transfer Corp GP LLC and Energy Transfer Corp LP (“ETC”) are formed; ETC elects to be taxed as a corporation for federal tax purposes 2 ETC issues shares and cash to WMB stockholders in exchange for all outstanding shares of WMB WMB merges into ETC with ETC being th
Slide 7: Consideration Overview and CCR Mechanics
CONSIDERATION OVERVIEW AND CCR MECHANICS Consideration Overview WMB stockholders can elect to receive ETC common shares, cash or a mix of both in the merger, with cash and stock elections to be prorated such that the full cash pool of $6.05 billion is paid out as consideration in the merger (1) Proj
Slide 8: Pro Forma Energy Transfer Organizational Structure
PRO FORMA ENERGY TRANSFER ORGANIZATIONAL STRUCTURE ENERGY TRANSFER CORP LP (NYSE: ETC) ENERGY TRANSFER EQUITY, L.P. (NYSE: ETE) 58.8% LP Interest 100% GP / IDRs 100% Interest (1) 100% GP / IDRs (2) ~1% LP Interest 100% GP / IDRs 90% GP / IDRs (Class H Units) WILLIAMS PARTNERS, L.P. (NYSE: WPZ) Baa2
Slide 9: ETC Premium Value Opportunity
ETC PREMIUM VALUE OPPORTUNITY Vast C-Corp Market Compared to MLPs(1) ETC Advantages US Equity Market Cap ~ $20T MLPs ~ $~500B MLP C-Corp structure well received by the market 60% of pro forma float at ETC 1099 rather than K-1 for tax purposes Provides access to broader range of high quality institut
Slide 10: Balance Sheet Scale, Managing Cost of Capital, and Optionality
BALANCE SHEET SCALE, MANAGING COST OF CAPITAL, AND OPTIONALITY WILL DETERMINE LONG-TERM WINNERS Enterprise Value vs. Top Energy Companies(1) ($ in billions) $379 $332 $149 $269 $193 Pro Forma $139 $138 $135 $124 $113 $108 $81 $79 $73 Major Midstream Oilfield Services E&P ETE Family to Include Three
Slide 11: Merger Creates One of the Largest Energy Franchises in the U.S.
MERGER CREATES ONE OF THE LARGEST ENERGY FRANCHISES IN THE U.S Natural Gas NGLs Crude Oil Largest G&P MLP and NGL Producer in the U.S. Largest transporter of natural gas in the U.S. 3rd largest NGL business in the U.S. 3rd largest MLP transporter of crude oil in the U.S. 2nd largest planned LNG Expo
Slide 12: Diversified Portfolio of Complementary Businesses and Financial Scale
…WITH A DIVERSIFIED PORTFOLIO OF COMPLEMENTARY BUSINESSES AND FINANCIAL SCALE ACROSS THE GROUP Enterprise Value of ~$150 billion and over $10 billion of Pro Forma Consolidated EBITDA Peer outperformance across entire ETE family Indexed unit price performance since January 1, 2013 250% 200% 150% 100%
Slide 13: Unique and Complementary Geographic Footprint
UNIQUE AND COMPLEMENTARY GEOGRAPHIC FOOTPRINT TO HELP DRIVE INCREASED ENERGY PRODUCTION… ETP Assets SXL Assets WPZ Pipelines WPZ Gas Processing Plants WPZ LPG Fractionators 1,468 Crude Production (Mbpd) 1,155 9 Natural Gas Production (MMcf/d) 9 ‘03 ‘15 ‘03 ‘15 Bakken 4,478 16,372 2,571 399 114 ‘03 ‘
Slide 14: Compelling Interstate Natural Gas Pipeline Combination
…CREATES A COMPELLING INTERSTATE NATURAL GAS PIPELINE COMBINATION THAT PROVIDES BENEFITS FOR PRODUCERS AND END USE CUSTOMERS… Northwest Pipeline Constitution Atlantic Sunrise Rover Panhandle Eastern Appalachian Connector Transwestern Trunkline Fayetteville Express Transco Midcontinent Express Sabal
Slide 15: Fully Integrated Liquids Platform Across North America
…AND A FULLY INTEGRATED LIQUIDS PLATFORM ACROSS NORTH AMERICA The ability to integrate a producer liquids end-to-end solution will better serve customers and alleviate bottlenecks currently faced by producers Energy Transfer NGL Pipelines Crude Projects NGL Projects LNG Facilities Fractionator Sunoc
Slide 16: ETE Will Continue to Benefit from Strong Cash Flow Growth
ETE WILL CONTINUE TO BENEFIT FROM STRONG CASH FLOW GROWTH Distributions Received From Underlying Operating Partnerships(1) ($ in millions) LP | ETP GP + IDRs | ETP LP | RGP GP + IDRs | RGP Class H | SXL GP + IDRs | SUN Lake Charles LNG LP | WPZ(2) GP + IDRs | WPZ(2) (2) $11 $48 $441 $180 $13 $48 $53
Slide 17: Merger Accelerates ETE Towards Investment Grade Ratings
MERGER ACCELERATES ETE TOWARDS INVESTMENT GRADE RATINGS Pro Forma Capital Structure Actual Transaction Pro Forma ($ in millions) 6/30/2015 Adjustments 6/30/2015 Cash and Cash Equivalents $1 $0 $1 Debt: ETE Senior Secured Revolving Credit Facility due Dec. 2018 $230 $634(1) $864 ETE Senior Secured Te
Slide 18: Organic Development and Acquisitions Drive Cash Flow Growth
ORGANIC DEVELOPMENT AND ACQUISITIONS HAVE DRIVEN AND WILL CONTINUE TO DRIVE STRONG CASH FLOW GROWTH Completed ~$5 billion in organic projects and acquisitions since 2010 SXL Completed ~$41 billion(1) in organic projects and acquisitions since 2011 ETP Completed ~$25 billion(2) WPZ in organic project
Slide 19: Acquisition Further Enhances Our Key Strengths
ACQUISITION FURTHER ENHANCES OUR KEY STRENGTHS WMB/WPZ is a major complement to Energy Transfer’s existing business and will benefit from its integrated business model Franchise Strengths LNG SUN ETP / SXL / WPZ Interstate Natural Gas T&S Intrastate Natural Gas T&S Midstream Lone Star NGL Petchem Li
Slide 20: Well Over $2 Billion of Potential EBITDA from Commercial Synergies
WELL OVER $2 BILLION OF POTENTIAL EBITDA FROM COMMERCIAL SYNERGIES Appalachia / Northeast Integration of WPZ liquids footprint into SXL’s Mariner East / Marcus Hook franchise; PDH development Expanded processing, gathering, and fractionation / storage Rover synergies, capacity optimization WPZ compr
Slide 21: Substantial Opportunity to Realize Shared Service Cost Savings
SUBSTANTIAL OPPORTUNITY TO REALIZE SHARED SERVICE COST SAVINGS Value Creation Low execution risk ~$300 to 400 million expected annual cost synergies Run-rate cost synergies expected to be achieved by 2017 HR Internal Audit SOX Tax Insurance Accounting Treasury Risk IT Corporate Compliance & & Financ
Slide 22: Better Positioned to Create Value with Chesapeake
BETTER POSITIONED TO CREATE VALUE WITH ONE OF NORTH AMERICA’S LARGEST PRODUCERS Chesapeake Production Profile (1) Significant Improvement in Coverage for Chesapeake to Create Win-Win Outcomes for Energy Transfer and Chesapeake 2016E Total = 1,468 Bcfe Energy Transfer Franchise Expertise Marcellus 10
Slide 23: Key Takeaways
KEY TAKEAWAYS ETE / ETC will derive its cash flow strength from: – Three of the largest investment grade diversified MLPs (ETP, SXL and WPZ) as well as a fast growing retail fuel MLP (SUN) – Increasing incentive distributions resulting from significant growth projects that have been announced by ETP
Slide 24: Illustrative Transaction Timeline
ILLUSTRATIVE TRANSACTION TIMELINE Expected timing from announcement to closing Subject to SEC review & regulatory approval September 2015 Prepare proxy / registration statement Begin regulatory approval process File proxy statement / S-4 registration statement WMB Stockholder Vote First half of 2016
Williams Companies — Merger or Acquisition (September 2015) on 6ix