Williams Companies, Inc. (the) · NYSE:WMB
Williams Companies, Inc. (the) — Q1 2023 Earnings Presentation
44 slides from Williams Companies, Inc. (the)'s earnings presentation, May 4, 2023
Slide 1: Williams 1st Quarter 2023 Earnings Call
Williams 1st Quarter 2023 Earnings Call May 4, 2023 WILLIAMS © 2023 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams 1st Quarter 2023 Earnings Call I May 4, 2023 I www.williams.com 1
Slide 2: 1Q announcements, operational execution, financial strategy
1Q announcements Operational execution Financial strategy Strong 1Q results Accelerated project Closed MountainWest driven by solid timelines for three major acquisition fee-based business Transco projects and strategic marketing Received full Notice to asset Placed Taggart, Proceed and began Marcel
Slide 3: Key Financial Updates
Key Financial Updates Business remained strong in 1Q with Strong Financial Performance 1Q 1Q Change ✓ record volumes in Transmission and G&P businesses Across Key Metrics 2023 2022 Adjusted EBITDA $1,795 $1,511 19% Sequent strength overcame negative Adjusted Earnings per Share $0.56 $0.41 37% ✓ Opal
Slide 4: Core business performance drivers: 1Q 2023 vs 1Q 2022
Core business performance drivers WMB Adjusted EBITDA ($MM): 1Q 2023 vs. 1Q 2022 Transmission & GOM Increased revenues due to the MountainWest Core Business Performance and NorTex acquisitions and Transco park and $1,850 loan services $166 $6 $1,795 Northeast G&P Other Increased revenues at our Ohio
Slide 5: Proven and predictable earnings growth
Proven and predictable earnings growth Balance sheet strength and stability Long-term sustainable strategy WILLIAMS © 2023 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams 1st Quarter 2023 Earnings Call I May 4, 2023 I www.williams.com 5
Slide 6: Appendix
Appendix WILLIAMS © 2023 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams 1st Quarter 2023 Earnings Call I May 4, 2023 I www.williams.com 6
Slide 7: Core business performance drivers: 1Q 2023 vs 4Q 2022
Core business performance drivers WMB Adjusted EBITDA ($MM): 1Q 2023 vs. 4Q 2022 Transmission & GOM Core Business Performance Increased revenues from MountainWest $1,850 acquisition; partially offset by two less billable days on Transco and Northwest Pipeline $82 $3 $1,795 Northeast G&P $1,774 ($58)
Slide 8: 2022 Adjusted EBITDA mix
NGL services1 1% $6.4B+ 2022 Adj. EBITDA ~1% from NGL Services Marketing services 4% ~4% from Gas and NGL Marketing Services E&P 6% ~6% from E&P Joint Ventures Other Onshore Oil Basin2 2% Eagle Ford 6% ~8% from G&P SW Wyoming / Wamsutter 1% serving on-shore oil-directed supply areas Piceance 2% Blue
Slide 9: Quarterly growth vs commodity prices
Quarterly Growth: Williams Continuing Segment Adj. EBITDA, Contracted Transmission Capacity and Gathering Volume vs. Crude Oil and Natural Gas Commodity Prices 250 Gas Price Indexed to 100 200 Oil Price Adj. EBITDA 150 Capacity + Volume 100 50 2015 2016 2017 2018 2019 2020 2021 2022 2023 WTI Oil Pri
Slide 10: Regional Energy Access and Gulf of Mexico progress
Regional Energy Received Notice to Proceed (NTP) and began construction to bring approximately half of the project capacity on line ahead of schedule in 4Q 2023; total capacity for the project is 829 MMcf/d1 with second half expected to come on line in 4Q 2024. Access Progress Deepwater Gulf of Reac
Slide 11: 2023 Guidance
Financial Metric 2023 Guidance Adjusted EBITDA $6.4B - $6.8B (Includes upstream contributions) ($230MM - $430MM) Adjusted Diluted EPS1 $1.67 - $1.92 Available Funds From Operations (AFFO) $4.725B - $5.125B AFFO Per Share $3.86 - $4.18 Dividend Coverage Ratio 2.25x (midpoint) Debt-to-Adjusted EBITDA2
Slide 12: Capital allocation priorities
Capital allocation priorities: • Protect long-term health of balance sheet and investment-grade rating Maintain financial strength 1 • 2023 Debt-to-Adjusted EBITDA guidance ~3.65x • Preserve long-standing commitment to shareholder returns and grow dividend Dividends 2 • in-line with core business Ad
Slide 13: Strong liquidity and minimal near-term debt maturities
Strong liquidity and minimal near-term debt maturities Principal Value of Debt Maturities 3.65x 1.15x improvement 2023 guidance for In leverage since 20181 as of March 31, 2023 Net Debt to Adj. EBITDA ($ in millions) $330 Investment $2,575 BBB/Baa2 grade rated Credit Rating across all rating agencie
Slide 14: Lower-48 natural gas demand and exports
Total demand including exports averaged 116 Bcf/d in 1Q 2023 compared to 119 Bcf/d in 1Q 2022, driven by declines in the Res/Com sector due to a mild winter season LNG & MEXICAN POWER GEN INDUSTRIAL RES / COM EXPORTS Bcf/d Bcf/d Bcf/d Bcf/d 35 35 50 35 8.5% 45 30 30 30 40 25 -2.7% -12.0% 25 35 25 30
Slide 15: All approved LNG export facilities within Transco corridor
All approved LNG export facilities within Transco corridor Forecasted U.S. L-48 LNG Export Annual Volume Cumulative Growth U.S. L-48 Large Scale Approved Liquefaction Facilities Per EIA¹ (2022 – 2032) Project Name Bcf/d² Project Name Bcf/d² 18 Operational Awaiting FID LNG export 16 Sabine Pass Train
Slide 16: Transco growth projects backlog
DIVERSE OPTIONALITY ~10 Bcf/d in queue to serve power I N C R E M E N TA L generation facilities, LNG facilities and 2.1 Bcf/d Moved from backlog into execution since 2020 industrial facilities/gas utilities Successfully placed ~2.1 Bcf/d of projects in service since 2020 8 PROJECTS 25 AT T R A C T
Slide 17: Transco expansion projects
Regional Energy Access 1 • 829 MMcf/d serving Res/Com & Power demand in PA, NJ & MD • Received FERC certificate with expected partial in service 4Q’23 and second half expected in service 4Q’24 1 Commonwealth Energy Connector 2 • 105 MMcf/d serving Res/Com demand in Mid-Atlantic Enough natural gas •
Slide 18: Emissions reduction investments
Phased replacement of up to 184 compressor Reducing units Up to transmission compressor methane emissions $1.3B in anticipated >50% capital spend through 2030 Implemented Reducing tracker for transmission NOx emissions by NWP >75% customers Transco Compressor Station 175 in Virginia WILLIAMS © 2023
Slide 19: Deepwater Gulf of Mexico projects
Whale WESTERN ▪ Expected in service date: 4Q 2024 GULF OF MEXICO ▪ Expected CAPEX: ~$450MM ▪ Combined reserves: ~545 MMboe: Oil: 380 MMbbls, Gas: 1,000 Bcf Shenandoah Salamanca ▪ Expected in service date: 4Q 2024 ▪ Expected in service date: 2Q 2025 ▪ Expected CAPEX: ~$160MM ▪ Expected CAPEX: Zero ▪
Slide 20: Susquehanna Utica and Southwest Appalachia expansions
Susquehanna Utica Gathering expansion Cardinal gathering expansion 01 o Scope: ~22 miles of gathering pipeline and incremental compression 02 o Scope: ~20 miles of gathering pipeline and incremental compression o Expected in service date: 4Q 2023 o Expected in service date: 2H 2023 o Incremental cap
Slide 21: Capturing Northeast volume growth
Strategically Positioned: Capturing Northeast Volume Growth Northeast Natural Gas Williams Northeast Natural Gas Bcf/d Bcf/d Production Gathering Volumes 35 12 34 11 Gathering Production volume growth growth 1.7% 7.2% 33 10 1Q 2023 vs 1Q 2023 vs 1Q 2022 1Q 2022 32 9 31 8 1Q 2022 1Q 2023 1Q 2022 1Q 2
Slide 22: Haynesville assets map
Map of Williams’ Assets in Haynesville South Mansfield Springridge Adding 300 Haynesville MMcf/d capacity Mansfield West Haynesville West Adding 400 South LA MMcf/d capacity Adding Existing Mansfield gathering ~1.5 Bcf/d systems Mansfield through near-term expansion projects in Adding 150 Haynesvill
Slide 23: Carbon capture and storage with Louisiana Energy Gateway
Integrating carbon capture and storage with Louisiana Energy Gateway to deliver clean energy Haynesville Scope of project TX LA • New treating, compression, capture equipment, and CO2 pipeline CO2 captured from • Targeted in service aligned with Louisiana Energy Gateway Existing gathering and treati
Slide 24: E&P Hedges and G&P Hedges
Commodity 2Q-4Q 2023 Weighted-Average Price E&P Hedges Natural Gas Volume (MMbtu) ($MMbtu) Fixed Price Swaps (6,777,500) $ 5.52 Basis Swaps (24,425,000) $ (0.54) Liquids Volume (Bbls) Weighted-Average Price ($Bbl) Fixed Price Swaps - Crude Oil (75,000) $ 81.23 Fixed Price Swaps - Crude Oil as % of C
Slide 25: 2021 Sustainability Report
2021 Sustainability Report WILLIAMS WILL BE THERE 56% REDUCTION GOAL in company-wide greenhouse gas emissions by 2030 vs 2005 levels of 22.6 million mt CO2e, working toward net zero carbon emissions by 2050 84% REDUCTION averaged in pipeline blowdown GHG emissions when using recompression technology
Slide 26: WILLIAMS © 2023 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams
WILLIAMS © 2023 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams 1st Quarter 2023 Earnings Call I May 4, 2023 I www.williams.com 26
Slide 27: 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 meaning of Section 27A of t
Slide 28: Forward-looking statement risk factors
> 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 beyond our ability to control or predic
Slide 29: Forward-looking statement risk factors, continued
– 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, including the Russian invasion of Ukrai
Slide 30: WILLIAMS © 2023 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams
WILLIAMS © 2023 The Williams Companies, Inc. All rights reserved NYSE: WMB I Williams 1st Quarter 2023 Earnings Call I May 4, 2023 I www.williams.com 30
Slide 31: Non-GAAP financial measures
> This news release and accompanying materials may include certain financial measures – adjusted EBITDA, adjusted income (“earnings”), adjusted earnings per share, available funds from operations and dividend coverage ratio – that are non-GAAP financial measures as defined under the rules of the SEC
Slide 32: Adjusted income reconciliation 2015-2017
2015 2016 2017 (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 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Income (loss) attributable to The Williams Companies, Inc. available to common $ 70 $ 114 $ (40) $ (715) $ (571) $ (65) $ (405
Slide 33: Adjusted income reconciliation 2015-2017, continued
2015 2016 2017 (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 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Other Impairment of certain assets — — — 64 64 — 747 — 8 755 — 23 68 — 91 Regulatory adjustments resulting from Tax Reform — —
Slide 34: Adjusted income reconciliation 2018-2019
2018 2019 (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 $ 152 $ 135 $ 129 $ (572) $ (156) $ 194 $ 310 $ 2
Slide 35: Adjusted income reconciliation 2018-2019, continued
2018 2019 (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 Other Regulatory asset reversals from impaired projects — — — — — — — — — — Commodity derivative non-cash mark-to-market — — — — — — — — — — Reversal of costs capitaliz
Slide 36: Adjusted income reconciliation 2020-2021
2020 2021 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr (1) 4th Qtr Year Income (loss) attributable to The Williams Companies, Inc. available to common $ (518) $ 303 $ 308 $ 115 $ 208 $ 425 $ 304 $ 164 $ 621 $ 1,514 stockholders Income (
Slide 37: Adjusted income reconciliation 2020-2021, continued
2020 2021 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr (1) 4th Qtr Year Sequent Amortization of purchase accounting inventory fair value adjustment - - - - - - - 2 16 18 Net unrealized (gain) loss from derivative instruments - - - - - -
Slide 38: Adjusted income reconciliation 2022-2023
2022 2023 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Income (loss) attributable to The Williams Companies, Inc. available to common stockholders $ 379 $ 400 $ 599 $ 668 $ 2,046 $ 926 Income (loss) - diluted earnings (loss) per common share (1) $ .31
Slide 39: EBITDA reconciliation 2015-2017
2015 2016 2017 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Net income (loss) $ 13 $ 183 $ (173) $ (1,337) $ (1,314) $ (13) $ (505) $ 131 $ 37 $ (350) $ 569 $ 193 $ 125 $1,622 $2,509 Provision (benefit) for incom
Slide 40: EBITDA reconciliation 2018-2019
2018 2019 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Net income (loss) $ 270 $ 269 $ 200 $ (546) $ 193 $ 214 $ 324 $ 242 $ (66) $ 714 Provision (benefit) for income taxes 55 52 190 (159) 138 69 98 77 91 335 Interest expense 273 275 270 294 1,112 2
Slide 41: EBITDA reconciliation 2020-2021
2020 2021 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Net income (loss) $ (570) $ 315 $ 323 $ 130 $ 198 $ 435 $ 322 $ 173 $ 632 $ 1,562 Provision (benefit) for income taxes (204) 117 111 55 79 141 119 53 198 511 Interest expense 296 294 292 290 1,1
Slide 42: EBITDA reconciliation 2022-2023
2022 2023 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Net income (loss) $ 392 $ 407 $ 621 $ 697 $ 2,117 $ 957 Provision (benefit) for income taxes 118 (45) 96 256 425 284 Interest expense 286 281 291 289 1,147 294 Equity (earnings) losses (136) (163) (193) (145) (637) (147) Ot
Slide 43: Available funds from operations reconciliation
2022 2023 (Dollars in millions, except coverage ratios) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr The Williams Companies, Inc. Reconciliation of GAAP "Net cash provided (used) by operating activities" to Non-GAAP "Available funds from operations" Net cash provided (used) by operating activities $
Slide 44: 2023 Guidance reconciliation
2023 Guidance (Dollars in millions, except per-share amounts and coverage ratio) Low Mid High Net income (loss) $ 2,080 $ 2,230 $ 2,380 Provision (benefit) for income taxes 665 715 765 Interest expense 1,220 Equity (earnings) losses (580) Proportional Modified EBITDA of equity-method investments 930
Williams Companies, Inc. (The) — Q1 2023 Earnings Presentation on 6ix