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Williams 2019 Analyst Day – Williams Companies, Inc.

Williams Companies, Inc. · Dec 5, 2019 · 62 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 1
    NYSE: WMB www.williams.com Williams 2019 Analyst Day New York Stock Exchange December 5, 2019 Erica B. Operations Supervisor
  2. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 2
    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…
  3. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 3
    Agenda for today Agenda Item Presenter Breakfast Registration 7:30 a.m. Welcome and Introductions Brett Krieg 8:15 a.m. CEO Perspective Alan Armstrong Operations and Execution Micheal Dunn Break (approximately 15 minutes)…
  4. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 4
    CEO Perspective Alan Armstrong, President & Chief Executive Officer NYSE: WMB www.williams.com Delivering on 2019 expectations since our last Analyst Day Dividend Adjusted Distributable Leverage Growth & EBITDA Cash Flow…
  5. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 5
    What well talk about today Strategy Growth Leverage strong competitive advantages into Catalysts for continued growth across our higher ROCE on growing natural gas demand broad footprint Financial Performance Stable Predictable…
  6. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 6
    Natural gas plays critical role in reducing emissions Total U.S. Energy CO2 Emissions vs. Natural Gas Market Share 6,200 35% Natural Gas as % of Total Primary Energy 6,000 30% 5,800 25% Consumption 5,600 MM Tons…
  7. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 7
    Renewables remain a small part of the energy mix 2018 Total Global End-Use Power Generation only Energy Consumption by Fuel 2018 Global Power Generation by Fuel Type accounts for 20% of total end-use energy Coal consumption 12%…
  8. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 8
    The world can benefit from growth in natural gas supply and demand Nearly half of 17,300 children 3 billion people Each year, 4 50% of the world lives under age 15 die cook using open million people pneumonia on less than every…
  9. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 9
    Human development fueled by energy Improved Living Conditions, Increased Energy Consumption United Nations Human Very High Human High Human Medium Human Low Human Development Groups Development Development Development Development…
  10. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 10
    Natural gas plays an essential role in global energy demand growth Total Global Energy Consumption By Fuel 15-40 300 Growing by +188 QBtu to 809 QBtu by 40 +47 QBtu Or 23% 250 +84 QBtu Natural Gas Or 65% 200 Fulfilling 45%…
  11. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 11
    Robust natural gas demand growth will require many production sources NYSE: WMB www.williams.com Market relies heavily on Northeast to meet demand U.S. Natural Gas Production Totaling 89 Bcf/d By Region (Nov. 18 Oct. 19)…
  12. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 12
    Robust demand growth and well declines drive new U.S. production U.S. Natural Gas Production Declines + New Production Required to Meet Robust Demand Growth (1928) 120 100 80 +75 Bcf/d of incremental Bcf/d 60 natural gas…
  13. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 13
    Williams generates steady growth in volumes and EBITDA Quarterly Growth: Williams Continuing Segment Adj. EBITDA, Contracted Transmission Capacity and Gathering Volume vs. Crude oil and Natural Gas Commodity Prices 160 140 120…
  14. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 14
    Track record of execution Operational Project Strategic Financial Excellence Execution Transactions Performance Operating safely in Maintaining on-time and Attractive opportunities that Dividend growth and stability everything we…
  15. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 15
    Industry-leading Board of Directors provides corporate governance with focus on long-term, sustainable value Alan Armstrong Stephen W. Bergstrom Nancy K. Buese Stephen I. Chazen Charles Casey Cogut Kathleen B. Cooper Inside…
  16. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 16
    Key management metrics drive financial performance Performance Since 16 Future Expectations Operating Operating Margin ratio(1) Targeting top quartile performance vs. peers drives Efficiency +12% continued improvement Investing…
  17. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 17
    Long-term, sustainable growth Driven by: Strong competitive advantages Global natural gas demand growth Broad portfolio of businesses Targeting Realized through: 5%-7% Safe, reliable operations Adj. EBITDA and Cash Project…
  18. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 18
    Williams is a unique investment opportunity Disciplined Value & Focused Strategy Execution Stability Sustainable natural gas Operational excellence Sustainable growth demand growth supports Capital project success Predictable…
  19. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 19
    Operations & Execution Micheal Dunn, Executive Vice President & Chief Operating Officer NYSE: WMB www.williams.com Infrastructure serving natural gas demand Williams Handles 30% Of U.S. Natural Gas Volumes NATURAL GAS…
  20. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 20
    Operational excellence supports long-term, sustainable business Operational Safety Safety is the cornerstone of everything we do Reliability Safety metrics significantly Consistently meeting our improving customers needs…
  21. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 21
    High reliability makes Williams a preferred operator Customer Volume Reliability (% Delivered) 99.4% 99.6% 99.5% 99.8% 99.7% 99.8% 99.8% 99.7% 99.7% 99.5% 99.6% 99.8% 99.7% Maximize Reliability and Customer Throughput…
  22. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 22
    Project execution track record 19 Cost and Schedule Performance for Projects Greater Than 75MM -50% Cost Performance vs. Original Budget -40% Better Norphlet 1.7 Billion -30% portfolio of Rivervale South -20% 19 ISD…
  23. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 23
    Connecting the best supplies to the best markets WEST NORTHEAST ATLANTIC GULF Broad portfolio of G&P assets Largest gatherer in nations largest Transco, the nations largest gas supply basin interstate natural gas network Connecting…
  24. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 24
    Northwest Pipeline: Continued contract renewals from customers with strong credit metrics Northwest Pipeline Firm Capacity By Customer Type Primary Washington and Oregon high-pressure 1% gas delivery west of Cascade Mountains 4%…
  25. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 25
    Rocky Mountain G&P, Overland Pass and Bluestem assets: Connecting Western NGL supplies to Gulf Coast markets Williams Asset Map Highlighting Bluestem NGL Pipeline Project Long-term, sustainable infrastructure solution Platform for…
  26. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 26
    Northeast G&P systems delivered substantial growth and are poised to continue ramping Northeast G&P Gathering Volumes (12-19) 9 8 Volume growth 7 6 240% since 12 5 Bcf/d 4 Large-scale position 3 in leading basin 2…
  27. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 27
    Northeast remains largest and most economic gas basin Remaining Risked Natural Gas Reserves By Henry Hub Breakeven 350 300 Northeast Has 78% of the 250 Remaining Risked Reserves 200 Under 3 Tcfe 150 100 50 0 < 2.25 <…
  28. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 28
    Fully-contracted Transco expansions provide clear visibility into forecasted revenue Transco Fully-Contracted Year-End Delivery Capacity and Fee-Based Revenue 20 Attractive Returns on Growth Projects 2.75 18.9 18.3 18 2017(1)…
  29. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 29
    Transco is the premier transmission provider to growing LNG market Williams asset map, showing Transco Natural Gas Flows Serving third-party LNG facilities LNG Facilities In Bcf/d (Jan. 17 Nov. 19) 2.25 Elba Island Corpus Christi…
  30. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 30
    Significant Atlantic-Gulf transmission growth opportunities PROJECT BACKLOG PROJECTS IN EXECUTION 3.2B of Project Target In-service Type of Project Opportunities Gateway 4Q 19 Transporting Natural Gas to Power Generation…
  31. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 31
    Leidy South: Meeting growing natural gas demand along the Atlantic Seaboard Map of Project Area Leidy South Project Details NY Transco expansion connecting northern and western Pennsylvania supplies with growing demand centers…
  32. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 32
    Reached settlement terms on Transco rate case Anticipated Settlement in effective date of Rate case filing principle settlement Aug. 31, 2018 Oct. 10, 2019 May 1, 2020 Mar. 1, 2019 Dec. 31, 2019 Begin billing filed rate…
  33. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 33
    Existing Deepwater infrastructure positions Williams for future growth Map of Williams Deepwater Assets, Projects & Opportunities MS AL COMPLETED PROJECTS FL LA TX First production of Shell Appomattox/Norphlet Esox & Fieldwood…
  34. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 34
    Current opportunities align with Deepwater strategy Western Gulf: Eastern Gulf: Discovery: Whale Ballymore Anchor Increased utilization of existing Increased utilization of existing Increased utilization of existing Asset pipelines;…
  35. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 35
    Williams Strategy Chad Zamarin, Senior Vice President, Corporate Strategic Development NYSE: WMB www.williams.com A strategy based on solid fundamentals Williams is committed to being the leader in providing infrastructure that…
  36. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 36
    The U.S. is driving an energy renaissance U.S. crude oil production (Mbpd) U.S. natural gas production (Bcf/d) U.S. NGL production (Mbpd) 112% 80 69% 4,000 154% 10,000 Growth 70 Growth 3,500 Growth 8,000 3,000 60 2,500 6,000…
  37. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 37
    Williams is uniquely positioned to connect low cost supplies to growing markets (2018 2028) L-48 Demand Growth 2018-28 (Bcf/d) LNG Exports 14.0 Gulf Coast 5.1 Mexican Exports 2.5 Appalachia 2.3 Cove Point L-48 Other 2.1 +0.3…
  38. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 38
    Positioning to solve the gas supply and demand balance Haynesville Fundamentals Haynesville Supply constrained by mid-haul pipeline buildout to economic destination Dependent on dry gas economics Perryville Haynesville Station…
  39. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 39
    Comprehensive strategy process 1 2 Assess Fundamentals & Leverage Existing Business & Market Trends Competitive Advantages Monitor market signposts Determine core business potential Assess supply and demand forecasts Identify and…
  40. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 40
    A large-scale and diverse platform that supports unique value proposition NYSE: WMB www.williams.com Scale and diversity support stability, growth and optimization Large and strong positions, wide moats, vertical integration…
  41. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 41
    Strategic positioning: Gas transmission The nations largest gas transmission system, with ideal geographic location and unmatched system flexibility Nations largest transmission system Major market positions and footprint on both…
  42. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 42
    Strategic positioning: West G&P Diverse assets with stable cash flows and attractive growth and consolidation opportunities 10 franchises generating 1B of annual adjusted EBITDA Well integrated NGL value chain Significant MVCs &…
  43. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 43
    Strategic positioning: Offshore Gulf of Mexico Gulf of Mexico discoveries near existing assets expected to facilitate long-term growth with limited capital spending Well-established position with wide competitive moat Existing…
  44. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 44
    A continuous focus on portfolio optimization NYSE: WMB www.williams.com Portfolio optimization Platform for capturing opportunities unique to Williams Anticipate emerging growth opportunities and position assets,…
  45. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 45
    Portfolio optimization Leveraging mature assets Divestiture of Four Corners franchise and acquisition of Rocky Mountain Midstream Rocky Mountain Midstream vs. Four Corners Rocky Mountain: Strong execution in first year Placed two…
  46. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 46
    Portfolio optimization Expanding capabilities, simplifying structure and capturing efficiencies Consolidating assets in partnership with a private equity provider Acquired and consolidated Utica East Combined Joint Venture Map…
  47. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 47
    Financial Outlook John Chandler, Senior Vice President and Chief Financial Officer NYSE: WMB www.williams.com Williams is delivering STRONG STABLE CONSERVATIVE GROWING Execution Foundation Financial Position Advantaged…
  48. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 48
    Significant improvement in key financial metrics 2-Year Key Financial Metrics 2017 2018 2019 CAGR Cash Cash Flow from Operations 3,089 3,293 3,700 9.4% Flow Metrics: Distributable Cash Flow (DCF) 2,580 2,872 3,100 (1) 9.6%…
  49. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 49
    The financial drivers that are important to us: Continued improvement in Return on Capital Employed (ROCE) Leverage moving toward 4.2x or below Returning capital to our shareholders Continuing improvement in Operating Margin %…
  50. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 50
    Stable and diversified EBITDA, limiting exposure to any one basin and creating numerous growth opportunities Stable EBITDA Growth 19 EBITDA By Franchise(2) 5,000 SUSQUEHANNA SUPPLY HUB, 10% OHIO RIVER SUPPLY HUB, 6% 4,000 EAGLE…
  51. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 51
    Capital discipline focused on high growth projects and free cash flow generation West G&P 0% (2) All Other (2)Bluestem Atlantic West G&P 1% Pipeline Sunrise All Other Norphlet Pipeline West 8% (2) Rocky 2% Deepwater…
  52. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 52
    Debt maturities provide opportunity to reduce interest costs and offer uplift in cash flow Refinancing near- term maturities at current rates would reduce interest expense by 49 million Notes: 2020 maturities presented above…
  53. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 53
    Williams is a unique investment opportunity There are 11 companies in and only 5 but only 3 that also and only 2 that also the S&P 500 with a dividend that also have have investment grade have grown their yield 6% a market cap ratings…
  54. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 54
    NYSE: WMB www.williams.com Appendix Reference slides and Non-GAAP reconciliations West: Broad portfolio of supply basins and demand centers Asset Type Key Asset Characteristics(1) 3.8 Bcf/d(2) Interstate 3,900 pipeline 367…
  55. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 55
    Northeast G&P: Large, established footprint in nations largest gas supply basin OVM & UEOM JV Natural Gas Gathering SUSQUEHANNA SUPPLY OVM & UEOM JV 2.1 Bcf/d of gathering capacity in HUB LMM & Marcellus South dry/rich gas Utica…
  56. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 56
    Transco: Nations largest gas transmission system supported by long-term demand-charge contracts Firm Contracted Capacity By Customer Type 5% 4% 17.4 Bcf/d(1) of firm contracted capacity pro forma for 2019 7% expansions(2) 8%…
  57. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 57
    Reconciliation of Net Income (Loss) to Modified EBITDA and Non-GAAP Adjusted EBITDA 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…
  58. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 58
    Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income (cont) 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…
  59. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 59
    Reconciliation of Income (Loss) Attributable to The Williams Companies, Inc. to Adjusted Income (cont) 2018 2019 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr Year Other…
  60. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 60
    Reconciliation of Modified EBITDA to Non- GAAP Adjusted EBITDA 2018 2019 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr Year Net income (loss) 270 269 200 (546) 193 214 324 242 780 Provision…
  61. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 61
    Reconciliation of GAAP net income (loss) to modified EBITDA, Non-GAAP adjusted EBITDA and distributable cash flow (DCF) ( in millions, except per-share amounts and coverage ratios) 2019 GUI DANCE 2020 GUI DANCE Low Mid High Low Mid High…
  62. Williams 2019 Analyst Day – Williams Companies, Inc. – slide 62
    Calculation of return on invested capital ( in millions) Increase in EBITDA 2016-2019 2019 EBITDA guidance 5,000 2016 EBITDA 4,436 Less EBITDA of assets sold (336) 2016 EBITDA of retained assets 4,100 Increase in EBITDA…

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