Williams Companies, Inc. (the) · NYSE:WMB
Williams Companies, Inc. (the) — The Williams Companies — Investor Presentation (January 2017)
24 slides from Williams Companies, Inc. (the)'s investor presentation, Jan 9, 2017
Slide 1: Financial Repositioning for Long-Term, Sustainable Growth
Williams and Williams Partners Financial Repositioning for Long-Term, Sustainable Growth January 9, 2017
Slide 2: 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
Slide 3: Forward Looking Statements (cont'd)
Forward Looking Statements (cont’d) – The impact of existing and future laws, regulations, the regulatory environment, environmental liabilities, and litigation, as well as our ability to obtain permits and achieve favorable rate proceeding outcomes; – Our costs and funding obligations for defined b
Slide 4: Transaction Overview
Transaction Overview Financial Repositioning to Simplify Structure, Permanently Waive IDRs, Strengthen WPZ Distribution Coverage, Enhance Credit Profile, Improve WPZ Cost of Capital, Remove Need for WPZ to Access the Public Equity Markets Over the Next Several Years and Optimize Asset Portfolio > Wi
Slide 5: Transaction Rationale and Highlights
Transaction Rationale and Highlights Comprehensive measures that further enhance Williams’ position as North America’s premier natural gas infrastructure company > Permanent waiver of IDRs, conversion of economic general partner interest into a non- economic interest and a right-sized distribution p
Slide 6: Summary Business Update
Summary Business Update > Clear line of sight to continued strong growth in natural gas demand driven by LNG exports, industrial, LDCs, power generation, Mexican exports, and other Compelling Market Fundamentals > Best supply basins respond to demand growth with relief of infrastructure constraints
Slide 7: WPZ and WMB Key Guidance Metrics
WPZ and WMB Key Guidance Metrics EBITDA 2017 $4.6 billion a DCF 2017 $2.8 billion a Distribution 2017 Distribution $2.40 per L.P. unit & Growth Rate Expected Growth Rate 5% to 7% annual growth WPZ Cash Coverage 2017 Cash Distribution ~1.2x a Ratio Coverage Ratio Growth 2017 Total WPZ $2.1 to $2.8 bi
Slide 8: WMB Undervalued Relative to Peer and Historical Levels
WMB Undervalued Relative to Peer and Historical Levels 3 Years Prior to ETE Transaction a During ETE Transaction b Since ETE Transaction Termination c WMB historically traded at least in line WMB’s relative valuation separated Valuation gap is narrowing but more to be with its peers during ETE trans
Slide 9: Transactions Provide Clarity and Support Growth Opportunities
Transactions Provide Clarity and Support Growth Opportunities • Removes IDR burden and provides clarity on cash flow payout; reduces cost of equity • Improves WPZ distribution coverage: expected coverage of approximately 1.2x in 2017 and maintenance of strong coverage in excess of 1.1x Significantly
Slide 10: Appendix
Appendix
Slide 11: WPZ Producing Steady, Predictable Adjusted EBITDA and DCF
WPZ Producing Steady, Predictable Adjusted EBITDA and DCF $1.4 Actions support cash flow stability $1.2 > Capital program focused on Transco $1.0 and other fee-based revenue $US Billions $0.8 – $2.7 B - $3.2 B growth capital for regulated gas pipelines in 2016-2017; $0.6 ~68% of total – Remaining gr
Slide 12: Steady Natural Gas Demand Growth to Continue
Steady Natural Gas Demand Growth to Continue NORTH AMERICAN NATURAL GAS DEMAND BY SECTOR (2008-2020) 105 $10 $8.90 90 12 Bcf/d Growth ‘16-’20 Key Demand Drivers $8 75 LNG Exports 5.0 18.7 Bcf/d Growth 3.5 Industrial $/MMBtu ‘08-’16 Key Demand Drivers $6 Bcf/d Net Mex. Exports 1.1 60 Power 10.1 Res/C
Slide 13: Leading Fee-based Natural Gas Assets
Leading Fee-based Natural Gas Assets Focus on connecting demand growth with best supply basins +12 24 36 0 +0 +2 12 12 15 15 0 15 17 13 13 +7 26 33 +2 +3 12 14 37 40 Regional Production change, 2016 to 2020 (Bcf/d) (1) Regional Demand change, 2016 to 2020 (Bcf/d) (1) Source: Wood Mackenzi
Slide 14: Fully Contracted Regulated Pipeline Growth
Fully Contracted Regulated Pipeline Growth 2017-2018+ Fully Contracted Regulated project return profile -- Projects Placed In-service (1) Projects 2015-2016 2017 (3) 2018+ Growth Capital Placed $ 1.4 $ 1.5 $ 4.0 In-service ($ B) Atlantic Full-year runrate ~ $0.25 ~ $0.25 ~ $0.60 Sunrise(2) New York
Slide 15: Strong Production Growth Expected in Areas Served by Williams G&P Assets
Strong Production Growth Expected in Areas Served by Williams G&P Assets Williams Exposed to High Growth Areas and Sub-plays Within Best Basins 12 Bcf/d of growth expected across NE basins Wood Mackenzie production forecast in areas served by Williams G&P assets (1) Wood Mackenzie production forecas
Slide 16: Regulated Pipeline Project Opportunities Expected to Increase Firm Demand Charge Revenue
Regulated Pipeline Project Opportunities Expected to Increase Firm Demand Charge Revenue Goal: add to our $7 billion of fully contracted 2015-2020 expansions > $7 billion of fully contracted Transco expansions are planned to be placed into service 2015-2020 – all supported by long-term firm demand c
Slide 17: High Value Northeast G&P Footprint Poised for Significant EBITDA Growth
High Value Northeast G&P Footprint Poised for Significant EBITDA Growth > Leading asset footprint in low cost, high growth resource plays positioned to deliver significant EBITDA growth > Volume growth consistent with WoodMac forecast (~12% CAGR, ‘16 to ‘20) could more than double EBITDA in NE G&P s
Slide 18: Non-GAAP Reconciliations
_) Williams: ee Non-GAAP Reconciliations
Slide 19: Non-GAAP Disclaimer (WPZ)
Non-GAAP Disclaimer (WPZ) > This presentation may include certain financial measures – adjusted EBITDA, distributable cash flow and cash distribution coverage ratio – that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission. > Our segment performance
Slide 20: Non-GAAP Disclaimer (WMB)
Non-GAAP Disclaimer (WMB) > This presentation may include certain financial measures – adjusted EBITDA, distributable cash flow, cash available for dividends and other uses, dividend coverage and cash distribution coverage ratio – that are non-GAAP financial measures as defined under the rules of th
Slide 21: WPZ Reconciliation of GAAP Net Income to Non-GAAP Measures
WPZ Reconciliation of GAAP Net Income to Non-GAAP Modified EBITDA, Adjusted EBITDA and Distributable Cash Flow 2017 (1) (Dollars in billions, except coverage ratios) Guidance Net income (loss) $1.7 Provision (benefit) for income taxes 0.0 Interest expense 0.9 Equity (earnings) losses (0.5) Proportio
Slide 22: WMB Dividend Coverage Ratio
WMB Dividend Coverage Ratio 2017 (Dollars in billions, except per share amounts) Guidance Distributions from WPZ (accrued / “as declared” basis) $1.6 Corporate interest (0.3) Subtotal $1.3 WMB cash tax rate 0.0% WMB cash taxes (excludes cash taxes paid by WPZ) - Corporate Capex < (0.1) WMB cash avai
Slide 23: Reconciliation of Non-GAAP Adjusted EBITDA and Distributable Cash Flow to GAAP Net Income
WPZ Non-GAAP Reconciliations Reconciliation of Non-GAAP Adjusted EBITDA and Distributable Cash Flow to GAAP Net Income 23 © 2016 The Williams Companies, Inc. All rights reserved.
Slide 24: Reconciliation of Non-GAAP Adjusted EBITDA and Distributable Cash Flow to GAAP Net Income (cont'd)
WPZ Non-GAAP Reconciliations Reconciliation of Non-GAAP Adjusted EBITDA and Distributable Cash Flow to GAAP Net Income (cont’d) 24 © 2016 The Williams Companies, Inc. All rights reserved.
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