NYSE WMB | williamscom
WE MAKE ENERGY HAPPEN
Williams January Investor MeetingsJanuary 2019
WILLIAMS COMPANIES HEADQUARTERSTulsa Oklahoma
2copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
WMBMedian
SampP 500
WMB vs SampP 500
Approximate Current Dividend Yield(2)
58 22 1636
Adjusted EPSCAGR(2)
(2017-2019)189 136 390
Adjusted EBITDA Growth(2)
(2018-2019)99 71 394
Dividend Growth(2)
(2018-2019)125 67 866
(1) Per SampP Capital IQ Williamsrsquo adjusted EBITDA exceeded or was within 2 of the consensus estimate for EBITDA in each quarter 1Q 2016ndash3Q 2018(2) Data and estimates as of January 4 2018 Median SampP 500 2017-2019 growth rates based on Bloomberg consensus estimates WMB 2018-2019 growth rates based on midpoint of guidance (3) Represents peer average EV NTM EBITDA multiple from January 1 2013 to current peers include ENB EPD ET KMI OKE TRGP and TRPNote This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP comparable financial measures are included at the back of this presentation
Williams is a unique large-scale low-volatility growing natural gas infrastructure company with strong investor upside
gt Volume-driven natural gas strategy drives low volatility in earnings and cash flowgt Advantaged and irreplaceable asset base handling 30 of US low-cost natural gas suppliesgt Large-scale energy company ~$52 billion enterprise value with Investment Grade credit
ratingsgt 2019 gross margin projected to be ~97 fee-based gt Met or exceeded Adjusted EBITDA street consensus each of the last 11 quarters(1)
gt Exceeded midpoint for 2017 key guidance metrics 2018 trending toward high end of rangegt ~$125 billion excess cash available after dividends in 2019
STABILITY
gt Nationrsquos largest and fastest growing interstate natural gas pipeline system Transco with unrivaled proximity to growing Mid-Atlantic Southeast and Gulf Coast demand centers
gt 15 Northeast GampP gathered volume CAGR expected 2018-2021
gt 189 Adjusted EPS growth CAGR expected 2017-2019 despite $34B in asset sales
gt 10 Adjusted EBITDA growth 2018-2019 expecting 5-7 annual Adjusted EBITDA growth longer term beyond 2019
GROWTH
gt Attractive current dividend yield of 58(2) with strong coverage
gt 104x EV 2019 EBITDA multiple(2) below long-term historical average of 128x(3)
gt Long-term historical 128x multiple(3) implies a $34 stock price which aligns with sell-side consensus target price providing for 44 upside to current price(2)
VALUATION
3copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
WILLIAMS HANDLES ~30 OF US NATURAL GAS VOLUMES
Source Figures represent 100 capacity for operated assets including those in which Williams has a share of ownership NGL storage includes capacity owned and under long-term lease All data as of December 31 2017 plus the addition of Atlantic Sunrise Transco expansion to the natural gas transportation statistics DJ Basin acquisition and Four Corners assets sale of 2H 2018 not accounted for in statistics
Consistent strategy focused on natural gas volume growth
StorageMixed NaturalGas Liquids
FractionationFacilities
Gas Processing Plants(onshore and
Offshore)
Gathering(onshore and
Offshore)
Wellhead(onshore and
Offshore)
TransportationLines Rail and
Truck
OlefinsPlant
Olefins End Users
Natural Gas TransportationLines Storage
MultipleProducts
Industrial
Power Transport
ResidentialCommercial
Exports
Gas End Users
Other NGL End Users
224 Bcfd18670 miles
69 Bcfdinlet
383 Mbbld 317 Mbbld224 MMbbl
575 Mbbld
218 MMdthd capacity14530 miles
4copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Connecting the best supplies to thebest markets with advantaged infrastructure
Williamsrsquo US Asset MapNORTHEAST GampP Operating Area
ATLANTIC GULFOperating Area
WEST Operating Area
gt Extensive portfolio of reliable assets connecting sources of supply to demand markets
gt Stable cash flows and operational efficiencies driving results
gt Growth opportunities continue to reinforce long-term stability
gt Large-scale asset footprint in place gt Significant production growth driven
by infrastructure de-bottleneckinggt Capital efficient expansions linked
to existing assets
gt Irreplaceable infrastructure with low-risk revenue stream
gt Unmatched growth opportunity linked to existing assets
gt Unique footprint with access to low-cost supply sources and growing demand centers
5copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Industry leading board of directors focused on capital discipline and long-term growth
Alan ArmstrongInside Director
President and CEO Williams
Director since 2011
Stephen W BergstromIndependent Director
ChairmanFormer President and CEO general partner American
Midstream Partners GP LLCDirector since 2016
Nancy K BueseIndependent DirectorExecutive Vice President
and CFO Newmont
Mining CorporationDirector since 2018
Stephen I ChazenIndependent DirectorFormer President and
CEO Occidental Petroleum Corporation Director since 2016
Charles ldquoCaseyrdquo Cogut
Independent DirectorRetired Partner
Simpson Thacheramp Bartlett LLP
Director since 2016
Kathleen B CooperIndependent Director
President Cooper Strategies Intl LLC
Director since 2006
Michael A CreelIndependent Director
Former CEO Enterprise Products
Partners LPDirector since 2016
Vicki L FullerIndependent Director
Former Chief Investment Officer New York State Common
Retirement FundDirector since 2018
Peter A RagaussIndependent Director
Former Senior Vice President and CFO
Baker Hughes Incorporated
Director since 2016
Scott D SheffieldIndependent DirectorChairman and Former
CEO Pioneer Natural Resources
CompanyDirector since 2016
Murray D SmithIndependent Director
President Murray Smith and Associates former Minister of Energy for
Alberta CanadaDirector since 2012
William H SpenceIndependent DirectorChairman President and
CEO PPL Corporation
Director since 2016
Joseph H WilliamsHonorary Director
6copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Leadership team focused on driving toward sustainable long-term growth
Leadership amp Talent Development
gt Organization aligned around our focused strategy
gt Focusing resources on regulatory permitting and government affairs to increase project execution effectiveness
Alan ArmstrongPresident and Chief
Executive Officer
Micheal DunnExecutive Vice President
and Chief Operating Officer
Chad ZamarinSenior Vice President
Corporate Strategic Development
John ChandlerSenior Vice President and Chief Financial
Officer
T Lane WilsonSenior Vice President and General Counsel
Debbie CowanSenior Vice President
Chief Human Resources Officer
7copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
gt Strong safety reporting and continuous improvement culture
gt Robust Pipeline Integrity Management Program
gt Performing better than industry benchmark for Total Recordable Injury Rate (TRIR)
gt Goal of 15 reduction of process safety incidents 25 reduction since last year
gt Strong commitment to safety and operational discipline by 12 Life Critical Operating Requirements being institutionalized
gt Leading damage prevention and public awareness programs
gt Diverse and independent board comprised of industry leaders
gt Oversight on ESG issues from EHS Nominating and Governance Committees
gt Compensation aligned with business strategies including safety performance
gt Comprehensive Integrated Management System operationalizes EHS management with specific policies procedures and standards includes external and internal audits
gt Extensive environmental monitoring and measurement including emissions tracking and reporting
gt Signatory to INGAArsquos Methane Emissions Commitments to minimize methane emissions
gt Proud history of voluntary environmental conservation and restoration projects that exceed regulatory requirements
gt Committed to increased diversity
gt Dedicated to excellence in land use and landowner relationships
gt Stakeholder input resulting in more than 400 changes to Atlantic Sunrisersquos pipeline route
gt $107 million total charitable giving in last decade to more than 8000 organizations
Strong leadership commitment to sustainable business practices
SAFETY
GOVERNANCE
ENVIRONMENTAL
SOCIAL
8copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
2018gt International Association for Public Participationrsquos Core Values Award and
Project of the Year Award for Atlantic Sunrise projectgt Platts 2018 1 Midstream Company
2017gt Forbes US Best Large Employers ― 22gt SGA Environmental Excellence Award for Stewardship
2016gt Forbes Americarsquos Best Employersgt SGA Environmental Excellence Award for Stewardshipgt New York Landmarks Conservancy Lucy G Moses Award
2015gt Fortune Magazine 1 Most Admired US Energy Companygt Platts 2015 Global Energy Awards mdash Midstream Leader Awardgt ENR MidAtlantic Best Project mdash EnergyIndustrialgt SGA Environmental Excellence Award
A history of industry recognition
9copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Williamsrsquo regulated gas pipelines located in most densely populated areas of United States creating premier competitive advantage
Transco
Northwest Pipeline
Gulfstream
LegendPopulation per sq mile
50 or less
50-100100-200200-300300 or more
Source Data based off 2012 Census estimates
US Counties Color-coded by Population Density vs Williamsrsquo Regulated Natural Gas Pipelines
10copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0 100 200
Rockies
Mid-Con + Gulf Coast
Appalachia
Gas-Directed Risked Reserves by Region(Tcf)
Source Wood Mackenzie NACPAT 4Q 2018
Williamsrsquo Northeast GampP located in basin with largest recoverable gas reserves at the lowest cost
US Key Production Basins vs Williamsrsquo GampP Assets
LegendWilliamsrsquo Assets
Greater Green River
Powder River
Denver-JulesburgPiceance
Mid-Con + Gulf Coast
AnadarkoPermian
Eagle Ford
Barnett
Haynesville
Arkoma
89 lt$300MMBtu HH
78 lt$300 MMBtu HH
89 lt$300MMBtu HH
Appalachia
Rockies
0 4000 8000 12000
Rockies
Mid-Con + Gulf Coast
Appalachia
Gas-directed Remaining Locations by Region
73 lt$300 MMBtu HH
82 lt$300 MMBtu HH
84 lt$300 MMBtu HH
181
81
9
111K
55K
15K
11copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
DECEMBER 2018 $MMBTU BY FUEL SOURCE
Sources SampP Global Platts NYMEXNote Bar chart denotes MMBTU equivalent of quoted price data label denotes quoted price
Natural gas provides superior economic and environmental benefits vs other fuels driving investment in new demand
$0
$2
$4
$6
$8
$10
$12
Coal NYMEX Henry Hub NaturalGas
Mt Belvieu Ethane WTI Brent USGC NAPHTHA
$M
MBt
u
$336 MMBTU
36CPG
$202 MMBTU
$6100Bbl
$5216 Bbl
WTI to Henry Hub ratio 22X
$4720Bbl
Ethane FracSpread 12 CPG
12copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
NORTH AMERICAN NATURAL GAS DEMAND BY SECTOR (2012ndash2023)
Sources Wood Mackenzie 1H rsquo18 WMB Analytics Based off 90 utilization of announced North American ethane export capacity and North American ethylene plant capacity rsquo18-rsquo22
Robust domestic and global natural gas demand forecasts continue to rise reaching 120 Bcfd by 2023
0
15
30
45
60
75
90
105
120
135
2012 2017 2018 2023
Bcf
d
IndustrialPowerGeneration
Mexico Exports
TransportOther
ResidentialCommercial
LNG Exports
Demand Growth lsquo17-rsquo18 10
North American demand growth lsquo17-rsquo23 increased by 4 Bcfd from prior forecast
+~1045 Mbpd
of incremental ethane
represents ~29 Bcfd of natural gas
13copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0
5
10
15
20
25
30
35
40
45
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18 Cum
ulative Global D
emand G
rowth Since lsquo11
Oil
amp G
as P
rice
in M
MB
tu
Cumulative Global Demand for Nat Gas Cumulative Global Demand for Oil Henry Hub Forward Curve WTI Forward Curve
Sources SampP Global Platts Analytics for global demand outlook US Energy Information Administration for price history NYMEX for forward curves as of 1-4-19
Natural gas will continue to win global market share
Forecast
NATURAL GAS VS OIL DEMAND GROWTH (2011 TO 2027) HENRY HUB AND WTI PRICES (MMBTU)
14copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0
500
1000
1500
2000
2500
3000
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Tota
l Em
issi
on (M
MtC
O2)
Ele
ctric
Pow
er (b
illion
KW
h)
Coal Natural Gas Renewables Nuclear Petroleum Total Emissions (MMT CO2)
US ELECTRIC POWER GENERATION AND EMISSIONS 2007-2017
Note Renewables = hydroelectric wind amp solar power generation Source US Energy Information Administration
US natural gas market share increases over time for Power sector while coal use declines Contributes to a decline of CO2 emissions
Coal and petroleum power generation
decreased by 40 while natural gas power generation increased by 42
CO2emissions decline by
28
15copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Source US Energy Information Administration
Natural gas continues to be the preferred fuel type for new power generation projects in the United States followed by renewables
0 5000 10000 15000 20000
Other
Coal
Nuclear
Solar
Wind
Natural Gas
Nameplate Capacity (MW)
Power Generation Projects Under Construction by Fuel Type Fuel Type of
Choicegt Carbon intensity from the US power sector
fell by 14 since 2005 as natural gas displaced other fossil fuels in power generation
gt Natural-gas fired power generation accounts for over 50 of current power projects under construction
Partnering with Renewables
gt As states make strides toward renewable power it is vital for natural gas-fired generation to follow as a backup fuel to ensure grid reliability
gt Natural gas pipeline capacity is increasingly valuable as more capacity will be needed to support the intermittent nature of renewable power
Dark blue represents expected utilization
Full bar represents nameplate capacity
16copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Note Chart excludes Eastern Canada Alaska West Coast Barnett Gulf Coast conventional amp GOM production that amounts to a decline of 24 Bcfd through 2022 CV=Cotton Valley Source Wood Mackenzie 1H lsquo18
Supply from advantaged basins must grow to meet forecasted demand
0
5
10
15
20
25
30
35
40
45
Northeast Permian Mid-con WesternCanada
Eagle Ford Haynesville+ CV
Rockies San Juan
Gas DirectedOil-Directed
Bcfd
+148 Bcfd or 61
+53 Bcfdor 76 -01 Bcfd
or -1
+19 Bcfdor 33
+20 Bcfdor 46
+30 Bcfd or 35
+23 Bcfdor 15
NATURAL GAS FORECASTED PRODUCTION BY REGION amp WELL TYPE (2017ndash2022)
-05 Bcfdor -30
70 of NA Gas growth comes from
gas-directeddrilling
17copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
ResCom Industrial Power
TransportOther LNG Exports Net Mexican Exports
NORTH AMERICAN NATURAL GAS CUMULATIVE PRODUCTIONGROWTH 2017-2022 (IN BCFD)
NORTH AMERICAN NATURAL GAS CUMULATIVE DEMANDGROWTH 2017-2022 (IN BCFD)
Source Wood Mackenzie 1H lsquo18
Forecasted Northeast production growth alone could fuel domestic natural gas demand growth through 2022
0
5
10
15
20
25
30
Northeast Permian All Other
Northeast is 60 of all North American gas production growth through 2022
Exports
Domestic Demand
18copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
2nd wave of US LNG export projects expected to drive an additional +5 Bcfd of growth through 2027
LNG exportvolumes to grow by+11 Bcfd along
Transco statesthrough 2027
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
Sabine Pass Cove Point Corpus ChristiCameron Elba Island Freeport2nd Wave Gulf Coast Golden Pass WoodfibreLNG Canada Prior 1H 17 Forecast
Forecasted Monthly LNG Export Volumes
In MMcfd
Source Wood Mackenzie 1H lsquo18
Williamsrsquo Asset Map + Third-party Liquefaction Plants
19copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
43
27
2017
1413
1110
1008
0761
39414345474951535557596163
Bcf
d
TOP DRIVERS OF GLOBAL LNG DEMAND BY COUNTRY lsquo17- lsquo27
Source Wood Mackenzie LNG Tool 3Q lsquo18
Global LNG demand grows by 24 Bcfd through 2027 driven by Asia and Europe
Asia Europe Other
Global Market
Reaching 63 Bcfd
+24 Bcfd
Factors Driving GrowthChina amp Indiabull Developing economies pursuing clean
energy for growth amp fuel diversity Northwest Europebull LNG balances the market with flexible
dependable supplybull Upside potential from weather events amp
other price sensitive demand responsesSoutheast Asiabull Need for supplemental supplies to replace
maturing and declining indigenous resourcesbull Stronger growth prospects linked with better
than anticipated economic developmentsSoutheast Europebull LNG complements domestic amp pipeline
supply Japan South Korea amp Taiwanbull While solely dependent on LNG legacy
importers expected to have flat to declining demand due to relatively mature energy demand market
20copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Sources 1Wood Mackenzie LNG Tool 3Q lsquo18 and 1H lsquo18 LT 2Columbia SIPA Center on Global Energy Policy httpsenergypolicycolumbiaedu
Chinese LNG demand surpassed industry expectations in 2017 Growth outlook remains strong for 2018 and beyond
0
1
2
3
4
5
6
7
8
9
10
2016 2017 2018 2019 2020
Bcfd
China LNG Imports North America LNG Exports
2Factors Driving LNG Demand Growth in Chinabull Ambitious goals to improve air quality including
almost doubling the share of gas in Chinarsquos energy mix to 10 by 2020
bull Coal-to-gas switching to fight greenhouse gas emissions as natural gas emits nearly 60 less CO2 per kWh than coal in power generation
bull Progress in liberalizing natural gas to allow non-government parties to receive access to pipelines and LNG terminals
bull Short-term gas shortages due to peaked demand lack of storage capacity and overstretched LNG infrastructure with a 2017 average utilization rate of 105
bull Declines in piped gas supply from central Asia and insufficient domestic gas production unable to meet demand growth
1Chinese LNG Demand vs NA LNG Export Forecast2016-2020
21copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Williams best positioned to capitalize on significant opportunities to connect low-cost supplies to premier demand markets
+53 +32
Gulf CoastDemand
Mexican Exports
Permian Production
+21
+148
+22
+35
Northeast Demand
Southeast Demand
NortheastProduction
GC LNGExports
+69
Production and Demand Growth in Key Areas in Bcfd (2017-2022)
Williamsrsquo assets uniquely aligned with demand growth along the East Coast from Texas all the way to the Northeast
LNG Exports(Elba + Cove Point)
+11
Leveraging significant investments in Northeast and Transco to connect best supplies to the best markets
Note All other NA production amounts to 02 Bcfd of growth rsquo17 ndash rsquo22 and all other NA demand amounts to 16 Bcfd of growth lsquo17 ndash lsquo22
Source Wood Mackenzie 1H lsquo18
Majority of production growth in Northeast with significant growth also occurring in the Permian
22copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Attractive returns on visible growth capital focused on Transco and GampP projects in the Northeast West and AG Deepwater
gt West ndash DJ Processing Plants 200 MMcfd (Ft Lupton III)
gt Atlantic Gulf Deepwater ndashStampede
gt Northeast GampP ndashSusquehanna Gathering Expansion 700 MMcfd
gt Transco ndash Atlantic Sunrise 17 MMDthd
gt West ndash DJ Processing Plant 225 MMcfd (Keenesburg I)
gt West ndash Wamsutter ndash High Point Hansen Lake amp Echo Springs GampP Expansions
gt West ndash Niobrara ndash Jackalope Gathering amp Bucking Horse Processing 200 MMcfd
gt Northeast GampP ndash Rich Gas Growth Driving Oak Grove Expansions
gt Northeast GampP ndash Oak Grove II III 400 MMcfd amp Harrison Hub C3+ Pipeline
gt Northeast GampP ndash Bradford amp Utica Gathering Expansion
gt Atlantic Gulf Deepwater ndash Shell Appomattox ndash Norphlet Pipelinendash Mobile Bay Gas Plant Expansion
gt West ndash North Seattle Lateral Upgrade 159 MDthd
gt Transco ndash Rate Casegt Transco ndash Gulf Connector 475 MDthdgt Transco ndash St James Supply 162 MDthdgt Transco ndash Rivervale S to Market 190 Mdthd
gt West ndash DJ Processing Plant 225 MMcfd (Keenesburg II)
gt Northeast GampP ndashSusquehanna Gathering Expansion 800 MMcfd
gt Atlantic Gulf Deepwater ndashBuckskin
gt Transco ndash Hillabee Phase 2 206 MDthd
gt Transco ndash Southeastern Trail 296 MDthd
gt West ndash DJ Processing Plants 225 MMcfd (Milton I)
gt Transco ndash Gateway 65 MDthd
gt Transco ndash Northeast Supply Enhancement 400 MDthd
gt Transco ndash Leidy South 580 MDthd
gt West ndash DJ Processing Plants 225 MMcfd (Milton II)
gt Northeast GampP ndash Oak Grove IV 200 MMcfd
gt Atlantic Gulf DeepwaterndashAdditional Tie-backs Shell Whale Ballymore Tigris Mexico Perdido amp others
gt Transco ndash Pursuing 20+ expansion opportunities including ldquoProject 1rdquo from Analyst Day
gt Gulfstream Phase VI Expansion
SUPP
LY D
RIV
END
EMA
ND
DR
IVEN
Black = In Progress Blue = PotentialUnder Negotiation
2018 2019 2020 2021 2022+
23copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
(1) Consolidated revenue will be reduced by lease payment of ~$8 millionmonth to partners
Atlantic Sunrise Largest expansion project in Transco history placed in service October 6th delivers significant EBITDA growth
gt Significant revenue contribution to Transco
ndash $35 millionmonth(1) in consolidated fee-based revenue
gt Northeast gas prices quickly respond to incremental takeaway capacity
ndash NE Gas prices rose from ~$120 to ~$270 the day Atlantic Sunrise was placed in service
gt Northeast GampP gathered volume and EBITDA uplift expected
ndash Price response supportive of producer activity in the NE PA Susquehanna
ndash 15 gathering volume growth CAGR expected 2018-2021
ndash EBITDA to grow at a higher rate due to improved operating margins
Atlantic Sunrise17 MMDthd
Williamsrsquo US Asset Map Highlighting Transcorsquos Atlantic Sunrise Expansion Project PA
NY
WV
OH
NJ
$050
$100
$150
$200
$250
$300
$350
$M
MB
tu
Northeast Gas PricesTetco M-2 TGP Z-4 300 Leg Transco Leidy
Atlantic SunriseIn Service Oct 6
24copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Transco 2018 rate case protects adequate return on base system
gt Rate filed August 31 2018ndash ~$270MM annual revenue increase
bull Based on 16 ROE as prescribed by FERC methodology every 1 change in ROE is worth ~$30MM in Revenue
bull Subject to negotiation with shippers ndash Proposed 5-year $12B modernization and emission reduction investment
programndash Rate increase and proposed modernization program incremental to 2019
guidancegt Increased rates expected to be effective March 2019
RATE CASE TIMELINE
gt Lower corporate tax rate reduces income tax allowancegt Factors driving higher cost of service
ndash Higher expense in recent years to be incorporated into rate casendash Maintenance capital and modernization spending to be reflected in rate base
gt By 2019 approximately 55 of fee revenues from negotiated ratesndash Negotiated rate contracts remain unaffected by rate case and income tax changes
RATE CASE CONSIDERATIONS
VIRGINIA SOUTHSIDE II CONSTRUCTIONTransco Pipeline Southern Virginia
25copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Transco Project 2 sanctioned Leidy South ndash Providing access to new Northeast supplies
gt Extends Transcorsquos reach
gt Greater than 1000 MDthd of firm transport capacity in Zones 3 4 5 and 6
gt Attractive returns consistent with recent Transco expansions
gt 580 MDthd expansion in Pennsylvania from receipt points on Transcorsquos Leidy system to Zone 6 markets
gt Target in-service date 4Q 2021
gt Target capital cost $450-$550 million
gt 100 long-term take-or-pay contracts providing attractive returns consistent with Transcorsquos 2018-2021 expansion project profile of ~64x
gt Provides transportation outlet for producers and supports incremental gathering volume for Williamsrsquo Northeast PA gathering system
Two examples of Transcorsquos
20+ expansion
opportunities
US Map of Williamsrsquo Assets Highlighting Transco Pipeline PROJECT 1
LEIDY SOUTH (PROJECT 2)
26copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
(1) Includes Gulf Trace Hillabee (Ph 1) Dalton NY Bay Expansion Virginia Southside II Garden State I(2) Includes Garden State II Atlantic Sunrise Gulf Connector St James Supply Rivervale South to Market NE Supply Enhancement Hillabee (Ph 2) Gateway Southeastern Trail Leidy South
Transco Unprecedented growth demonstrates competitive advantageTRANSCO CONTRACTED CAPACITYAND FEE-BASED REVENUE
85 86 89 100 101
106 106
120 122
150
169177
180
193
$750
$1000
$1250
$1500
$1750
$2000
$2250
$2500
$2750
6
8
10
12
14
16
18
20
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Fee
Bas
ed R
even
ue $
Mill
ions
Con
trac
t Cap
acity
MM
Dtd
Year-end Contracted Capacity Forecasted Year-end Contracted Capacity Fee Revenue ($ MM) Forecast Fee Rev
2017(1) 2018 ndash2021(2)
Growth Capital Placed In-service ($ Bln) ~$14 ~$52
Full-year run-rate Modified EBITDA ($ Bln) ~$024 ~$084
EBITDA multiple ~58x ~63x
Attractive Returns on Growth Projects
27copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
(1) Gathering and processing statistics for Utica Supply Hub do not include Blue Racer (2) Non-operated joint venture (3) Primarily Cost-of-service based contracts
Northeast GampP Large footprint with foundational assets in place
gt 13 Bcfd of gathering capacity in dryrich gas
gt 800 MMcfd of processing capacity
gt 135000 bpd fractionation capacity
UTICA SUPPLY HUB(1)
gt Cardinal Gathering(3)
gt Flint Gatheringgt Utica East Ohio (UEO)(2)
BLUE RACER MIDSTREAM(2)
BRADFORD SUPPLY HUB(3)
SUSQUEHANNA SUPPLY HUB
gt 32 Bcfd of gathering capacity in dry gas
gt 570 miles of gathering pipeline in dryrich gas
gt 800 MMcfd of processing capacity
gt 123000 bpd fractionation capacity
gt 151 miles of NGL and condensate transport
gt 36 Bcfd of gathering capacity in dry gas
gt 15 Bcfd of gathering capacity in dryrich gas
gt 700+ MMcfd processing capacity
gt 120000+ bpd fractionation and de-ethanization capacity
OHIO RIVER SUPPLY HUB
gt Ohio Valley Midstreamgt Laurel Mtn Midstreamgt Marcellus South
PA
28copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0
1
2
3
4
5
6
7
8
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2013 2014 2015 2016 2017 2018
Bcf
d
Dry Gas Wet GasLegend
Northeast GampP Substantial growth expected from incremental takeaway capacity and new expansion projects to relieve constraints
Notes Partially owned system volumes are shown at 100 Excludes volumes for all non-operated assets
NORTHEAST GATHERING VOLUME GROWTH THROUGH 3Q 2018 AVERAGE GATHERED VOLUMES (BCFD)
15 GATHERED VOLUME
CAGR EXPECTED
2018-2021
29copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Gulf of Mexico Substantial discoveries in close proximity to existing assets expected to facilitate long-term growth
Gulf East
7 tiebacks contracted expecting morebull Shell Appomattox dedication Norphlet pipeline option
minus Producer expected reserves 650 MMboeminus Producer expected peak production 175 Mboedminus Target in-service date Mid 2019
bull Opportunities include ChevronTotal Ballymore discovery 3 miles from Blind Faithminus Largest discovery by Total in the GOM with more than 670 ft of net oil pay
Discovery
gt1 TCF of gas discoveries within reach of KCCbull Buckskin Stampede dedications
minus Combined additional reserves 66 Bcfminus Stampede online May 2018 Buckskin target in-service date 2H 2019
bull Opportunities include discoveries at Anchor Shenandoah and Katmai
Gulf West
Only existing Oil amp Gas pipelines near active Western Gulf explorationbull Opportunities include Shell Whale (15 miles from existing pipelines)
Tigris and Mexico Perdido discoveriesminus Shell Whale One of Shellrsquos largest finds in the GOM in the past decade
with over 1400 feet of oil pay
Gas GatheringOil GatheringNorphlet PipelineDeepwater SparGrowth ProjectsMexico Deepwater Basin
Sources Chevron 1302018 Ballymore Press Release Total 1312018 Ballymore Press Release Shell 1312018 Whale Press Release
TXLA
MS
BALLYMORE
NORPHLETPIPELINE
TIGRIS
BUCKSKIN
ANCHOR
APPOMATTOX
WHALE
ALFL
30copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Pro-forma Four Corners sale and DJ Basin acquisition Fee-based business structure reinforces stability in cash flows
gt Reduced commodity exposure with sale of Four Corners Area assets
(1) Includes our proportional ownership of the gross margin of our equity method investments Excludes certain regulated revenues which are related to tracked operating costs(2) MVC revenue includes revenue level guaranteed by MVC and excludes any revenue on volumes exceeding MVC MVC revenue also includes amortization of upfront payments associated with canceled MVCs
~97 of 2019 Gross Margin from Fee-based Sources2019 Gross Margin(1)
gt Fully contracted demand charge revenuegt Attractive positions exposed to growth
gt Mix of capacity payments MVCs(2) and Cost of Service agreements
gt Volume-driven fee-based contracts for gathering processing or other non-regulated services
gt Some contracts include escalation provisions
36 Volume-driven Non-regulated Fee-based Revenue
38 Regulated Gas PipelineFee-based Revenue
3 NGL and Other Commodity Exposure
23 Volume-protected Non-regulated Fee-based Revenue
36
3
38
23
31copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Moved to investment grade on significant credit metric improvementIndustry leading dividend coverage funding growth capital forecast gt$44 billion of asset sales from 2016-2018
significantly reducing our direct commodity exposure Jan lsquo17 repositioning and deleveraging transactions Streamlining the organization and aggressively
managing costs
$39
$26
$00
$05
$10
$15
$20
$25
$30
$35
$40
2018 2019
GrowthCapex
GrowthCapex
$1045 $125
Excess Cash Available After Dividends
($ in billions)
Excess Cash Available After Dividends
Note This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP comparable financial measures are included at the back of this presentation(1) 2015-2019 Debt Adjusted EBITDA ratios presented here does not represent leverage ratios measured for WMB credit agreement compliance or leverage ratios as calculated by the major credit ratings agencies
$1302Cash from sale of
Four Corners Area assets and Gulf Coast Pipelines
597x
530x
462x
~500x
lt475x
2500
3000
3500
4000
4500
5000
5500
300x
350x
400x
450x
500x
550x
600x
650x
2015 2016 2017 2018 2019
Adjusted EB
ITDA
($ Millions)
Deb
t A
djus
ted
EBIT
DA
WMB DebtAdjusted EBITDAAdjusted EBITDA ($MM)
WMB 2018 DebtAdjusted EBITDA proforma for full year Atlantic Sunrise revenue contributions
GUIDANCE
(1)
Long-term Target
lt42x Book Debt Adjusted EBITDA
(1)
No equity issuance required to fund forecasted growth capital
Excess cash available after dividends and asset sales to be used to partially fund growth capex
Capital discipline focused on ROCE
32copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
$063
$076 $077
$082$089
$101
$020
$030
$040
$050
$060
$070
$080
$090
$100
$110
2017 2018 Guidance Ranges 2019 Guidance Ranges
Williams Adjusted EPS 2017-2019
Steady and predictable growth despite assets sales and commodity price volatility
$Sh
are
Note This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP financial measures is included at the back of this presentation
Assets sales of over $34B
Geismar in rsquo17 Four Corners amp Gulf Pipes in lsquo18
(Note ~$2B in book gains are removed from Adjusted EPS)
LowMidpoint
MidpointHigh
HighWe expect 2018 to be in the upper half of our guidance
range ($076 to $082)
33copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Strong stable and growing 2018 and 2019 key guidance metrics
2018 GUIDANCE 1 2019 GUIDANCE
Net Income $0975 - $1175 Bn $1050 - $1350 Bn
Adjusted EBITDA $4450 - $4650 Bn $4850 - $5150 Bn
Distributable CashFlow (DCF) $2600 - $2900 Bn $2900 - $3300 Bn
Expected DividendGrowth Rate
10-15 annual growth(annual dividend increases)
10-15 annual growth(annual dividend increases)
DividendCoverage Ratio
~16xMidpoint of Guidance
~17xMidpoint of Guidance
Growth Capex $39 Bn $26 Bn
Consolidated Debt Adjusted EBITDA 2 ~ 50 x lt 475x
Note This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP comparable financial measures are included at the back of this presentationWilliams does not expect to be a US Federal cash income taxpayer through at least 2024 excluding taxes on any potential asset monetizations
1 DCF shown Proforma as if the WPZ transaction had occurred 1118 Dividend payments used in the coverage calculation include WPZ distribution payments to WPZ public unitholders for 1Q and 2Q 2 Consolidated Debt Adjusted EBITDA ratio does not represent leverage ratios measured for either WMB or WPZ credit agreement compliance or leverage ratios as calculated by the major credit ratings agencies
34copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
WMBMedian
SampP 500
WMB vs SampP 500
Approximate Current Dividend Yield(2)
58 22 1636
Adjusted EPSCAGR(2)
(2017-2019)189 136 390
Adjusted EBITDA Growth(2)
(2018-2019)99 71 394
Dividend Growth(2)
(2018-2019)125 67 866
(1) Per SampP Capital IQ Williamsrsquo adjusted EBITDA exceeded or was within 2 of the consensus estimate for EBITDA in each quarter 1Q 2016ndash3Q 2018(2) Data and estimates as of January 4 2018 Median SampP 500 2017-2019 growth rates based on Bloomberg consensus estimates WMB 2018-2019 growth rates based on midpoint of guidance (3) Represents peer average EV NTM EBITDA multiple from January 1 2013 to current peers include ENB EPD ET KMI OKE TRGP and TRPNote This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP comparable financial measures are included at the back of this presentation
Williams is a unique large-scale low-volatility growing natural gas infrastructure company with strong investor upside
gt Volume-driven natural gas strategy drives low volatility in earnings and cash flowgt Advantaged and irreplaceable asset base handling 30 of US low-cost natural gas suppliesgt Large-scale energy company ~$52 billion enterprise value with Investment Grade credit
ratingsgt 2019 gross margin projected to be ~97 fee-based gt Met or exceeded Adjusted EBITDA street consensus each of the last 11 quarters(1)
gt Exceeded midpoint for 2017 key guidance metrics 2018 trending toward high end of rangegt ~$125 billion excess cash available after dividends in 2019
STABILITY
gt Nationrsquos largest and fastest growing interstate natural gas pipeline system Transco with unrivaled proximity to growing Mid-Atlantic Southeast and Gulf Coast demand centers
gt 15 Northeast GampP gathered volume CAGR expected 2018-2021
gt 189 Adjusted EPS growth CAGR expected 2017-2019 despite $34B in asset sales
gt 10 Adjusted EBITDA growth 2018-2019 expecting 5-7 annual Adjusted EBITDA growth longer term beyond 2019
GROWTH
gt Attractive current dividend yield of 58(2) with strong coverage
gt 104x EV 2019 EBITDA multiple(2) below long-term historical average of 128x(3)
gt Long-term historical 128x multiple(3) implies a $34 stock price which aligns with sell-side consensus target price providing for 44 upside to current price(2)
VALUATION
35copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward Looking Statements
36copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward-looking statements
FORWARD-LOOKING STATEMENTS
gt 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 ldquoforward-looking statementsrdquo within the meaning of Section 27A of the Securities Act of 1933 as amended (Securities Act) and Section 21E of the Securities Exchange Act of 1934 as amended (Exchange Act) These forward-looking statements relate to anticipated financial performance managementrsquos plans and objectives for future operations business prospects outcome of regulatory proceedings market conditions and other matters We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995 All statements other than statements of historical facts included herein that address activities events or developments that we expect believe or anticipate will exist or may occur in the future are forward-looking statements Forward-looking statements can be identified by various forms of words such as ldquoanticipatesrdquo ldquobelievesrdquo ldquoseeksrdquo ldquocouldrdquo ldquomayrdquo ldquoshouldrdquo ldquocontinuesrdquo ldquoestimatesrdquo ldquoexpectsrdquo ldquoforecastsrdquo ldquointendsrdquo ldquomightrdquo ldquogoalsrdquo ldquoobjectivesrdquo ldquotargetsrdquo ldquoplannedrdquo ldquopotentialrdquo ldquoprojectsrdquo ldquoscheduledrdquo ldquowillrdquo ldquoassumesrdquo ldquoguidancerdquo ldquooutlookrdquo ldquoin-service daterdquo or other similar expressions These forward-looking statements are based on managementrsquos beliefs and assumptions and on information currently available to management and may include among others statements regardingndash Levels of dividends to Williams stockholders
ndash Future credit ratings of Williams and its affiliates
ndash Amounts and nature of future capital expenditures
ndash Expansion and growth of our business and operations
ndash Expected in-service dates for capital projects
ndash Financial condition and liquidity
ndash Business strategy
ndash Cash flow from operations or results of operations
ndash Seasonality of certain business components
ndash Natural gas and natural gas liquids prices supply and demand
ndash Demand for our services
37copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward-looking statements (contrsquod)
FORWARD-LOOKING STATEMENTS
gt 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 herein Many of the factors that will determine these results are beyond our ability to control or predict Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include among others the followingndash Whether we are able to pay current and expected levels of dividends
ndash Whether we will be able to effectively execute our financing plan
ndash Availability of supplies market demand and volatility of prices
ndash Inflation interest rates and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers)
ndash The strength and financial resources of our competitors and the effects of competition
ndash Whether we are able to successfully identify evaluate and timely execute our capital projects and other investment opportunities
ndash Our ability to acquire new businesses and assets and successfully integrate those operations and assets into existing businesses as well as successfully expand our facilities and to consummate asset sales on acceptable terms
ndash Development and rate of adoption of alternative energy sources
ndash The impact of operational and developmental hazards and unforeseen interruptions
ndash The impact of existing and future laws and regulations (including but not limited to the Tax Cuts and Jobs Act of 2017) the regulatory environment environmental liabilities and litigation as well as our ability to obtain necessary permits and approvals and achieve favorable rate proceeding outcomes
ndash Our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans
ndash Changes in maintenance and construction costs
ndash Changes in the current geopolitical situation
ndash Our exposure to the credit risk of our customers and counterparties
ndash Risks related to financing including restrictions stemming from debt agreements future changes in credit ratings as determined by nationally-recognized credit rating agencies and the availability and cost of capital
ndash The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate
38copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward-looking statements (contrsquod)
FORWARD-LOOKING STATEMENTS
ndash Risks associated with weather and natural phenomena including climate conditions and physical damage to our facilities
ndash Acts of terrorism cybersecurity incidents and related disruptions
ndash Additional risks described in our filings with the Securities and Exchange Commission (SEC)
gt Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement we caution investors not to unduly rely on our forward-looking statements We disclaim any obligations to and do not intend to update the above list or announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments
gt In addition to causing our actual results to differ the factors listed above may cause our intentions to change from those statements of intention set forth herein Such changes in our intentions may also cause our results to differ We may change our intentions at any time and without notice based upon changes in such factors our assumptions or otherwise
gt Because forward-looking statements involve risks and uncertainties we caution that there are important factors in addition to those listed above that may cause actual results to differ materially from those contained in the forward-looking statements For a detailed discussion of those factors see Part I Item 1A Risk Factors in our Annual Report on Form 10-K filed with the SEC on February 22 2018 and in Part II Item 1A Risk Factors in our Quarterly Reports on Form 10-Q
39copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Non-GAAP Reconciliations
40copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Non-GAAP Disclaimer
NON-GAAP RECONCILIATIONS
gt This presentation may include certain financial measures ndash adjusted EBITDA adjusted income (ldquoearningsrdquo) adjusted earnings per share distributable cash flow and dividend coverage ratio ndash that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission
gt Our segment performance measure modified EBITDA is defined as net income (loss) before income (loss) from discontinued operations income tax expense net interest expense equity earnings from equity-method investments other net investing income remeasurement gain on equity-method investment impairment of equity investments and goodwill depreciation and amortization expense and accretion expense associated with asset retirement obligations for nonregulated operations We also add our proportional ownership share (based on ownership interest) of modified EBITDA of equity-method investments
gt Adjusted EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations Management believes this measure provides investors meaningful insight into results from ongoing operations
gt Distributable cash flow is defined as adjusted EBITDA less maintenance capital expenditures cash portion of net interest expense income attributable to noncontrolling interests and cash income taxes and certain other adjustments that management believes affects the comparability of results Adjustments for maintenance capital expenditures and cash portion of interest expense include our proportionate share of these items of our equity-method investments We also calculate the ratio of distributable cash flow to the total cash dividends paid (dividend coverage ratio) This measure reflects Williamsrsquo distributable cash flow relative to its actual cash dividends paid
gt This presentation is accompanied by a reconciliation of these non-GAAP financial measures to their nearest GAAP financial measures Management uses these financial measures because they are accepted financial indicators used by investors to compare company performance In addition management believes that these measures provide investors an enhanced perspective of the operating performance of assets and the cash that the business is generating
gt Neither adjusted EBITDA adjusted income nor distributable cash flow are intended to represent cash flows for the period nor are they presented as an alternative to net income or cash flow from operations They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles
41copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Reconciliation of Income (Loss) Attributable to The Williams Companies Inc to Adjusted Income
NON-GAAP RECONCILIATIONS
2017 2018(Dollars in millions except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr Year
Income (loss) attributable to The Williams Companies Inc available to common stockholders $ 373 $ 81 $ 33 $ 1687 $ 2174 $ 152 $ 135 $ 129 $ 416
Income (loss) - diluted earnings (loss) per common share $ 45 $ 10 $ 04 $ 203 $ 262 $ 18 $ 16 $ 13 $ 46Adjustments
Northeast GampPShare of impairment at equity-method investments $ mdash $ mdash $ 1 $ mdash $ 1 $ mdash $ mdash $ mdash $ mdashImpairment of certain assets mdash mdash 121 mdash 121 mdash mdash mdash mdashAd valorem obligation timing adjustment mdash mdash 7 mdash 7 mdash mdash mdash mdashSettlement charge from pension early payout program mdash mdash mdash 7 7 mdash mdash mdash mdashOrganizational realignment-related costs 1 1 2 mdash 4 mdash mdash mdash mdashTotal Northeast GampP adjustments 1 1 131 7 140 mdash mdash mdash mdash
Atlantic-GulfConstitution Pipeline project development costs 2 6 4 4 16 2 1 1 4Settlement charge from pension early payout program mdash mdash mdash 15 15 mdash mdash mdash mdashRegulatory adjustments resulting from Tax Reform mdash mdash mdash 493 493 11 (20) mdash (9)Benefit of regulatory asset associated with increase in Transcorsquos estimated deferred
state income tax rate following WPZ Merger mdash mdash mdash mdash mdash mdash mdash (3) (3)
Share of regulatory charges resulting from Tax Reform for equity-method investments mdash mdash mdash 11 11 2 mdash mdash 2
Organizational realignment-related costs 1 2 2 1 6 mdash mdash mdash mdash(Gain) loss on asset retirement mdash mdash (5) 5 mdash mdash mdash (10) (10)Total Atlantic-Gulf adjustments 3 8 1 529 541 15 (19) (12) (16)
WestEstimated minimum volume commitments 15 15 18 (48) mdash mdash mdash mdash mdashImpairment of certain assets mdash mdash 1021 9 1030 mdash mdash mdash mdashSettlement charge from pension early payout program mdash mdash mdash 13 13 mdash mdash mdash mdashOrganizational realignment-related costs 2 3 2 1 8 mdash mdash mdash mdashRegulatory adjustments resulting from Tax Reform mdash mdash mdash 220 220 (7) mdash (7)
Charge for regulatory liability associated with the decrease in Northwest Pipelinersquos estimated deferred state income tax rates following WPZ Merger mdash mdash mdash mdash mdash mdash mdash 12 12
Gains from contract settlements and terminations (13) (2) mdash mdash (15) mdash mdash mdash mdashTotal West adjustments 4 16 1041 195 1256 (7) mdash 12 5
42copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Reconciliation of Income (Loss) Attributable to The Williams Companies Inc to Adjusted Income (conrsquot)
NON-GAAP RECONCILIATIONS
2017 2018(Dollars in millions except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr Year
Other(Gain) loss related to Canada disposition (2) (1) 4 5 6 mdash mdash mdash mdashExpenses associated with strategic asset monetizations 1 4 mdash mdash 5 mdash mdash mdash mdashGeismar Incident adjustments (9) 2 8 (1) mdash mdash mdash mdash mdashGain on sale of Geismar Interest mdash mdash (1095) mdash (1095) mdash mdash mdash mdashGain on sale of RGP Splitter mdash (12) mdash mdash (12) mdash mdash mdash mdashAccrual for loss contingency 9 mdash mdash mdash 9 mdash mdash mdash mdashSeverance and related costs 9 4 5 4 22 mdash mdash mdash mdashACMP Merger and transition costs mdash 4 3 4 11 mdash mdash mdash mdashExpenses associated with Financial Repositioning 8 2 mdash mdash 10 mdash mdash mdash mdash(Gain) loss on early retirement of debt (30) mdash 3 mdash (27) 7 mdash mdash 7Impairment of certain assets mdash 23 68 mdash 91 mdash 66 mdash 66Expenses associated with strategic alternatives 1 3 5 mdash 9 mdash mdash mdash mdashSettlement charge from pension early payout program mdash mdash mdash 36 36 mdash mdash mdash mdashRegulatory adjustments resulting from Tax Reform mdash mdash mdash 63 63 mdash 1 mdash 1Benefit of regulatory assets associated with increase in Transcorsquos estimated deferred state income
tax rate following WPZ Merger mdash mdash mdash mdash mdash mdash mdash (45) (45)WPZ Merger costs mdash mdash mdash mdash mdash mdash 4 15 19Charitable contribution of preferred stock to Williams Foundation mdash mdash mdash mdash mdash mdash mdash 35 35Total Other adjustments (13) 29 (999) 111 (872) 7 71 5 83
Adjustments included in Modified EBITDA (5) 54 174 842 1065 15 52 5 72
Adjustments below Modified EBITDAGain on disposition of equity-method investment (269) mdash mdash mdash (269) mdash mdash mdash mdashAccelerated depreciation by equity-method investments mdash mdash mdash 9 9 mdash mdash mdash mdashChange in depreciable life associated with organizational realignment (7) mdash mdash mdash (7) mdash mdash mdash mdashGain on deconsolidation of Jackalope interest mdash mdash mdash mdash mdash mdash (62) mdash (62)Allocation of adjustments to noncontrolling interests 77 (10) (28) (199) (160) (5) 21 mdash 16
(199) (10) (28) (190) (427) (5) (41) mdash (46)Total adjustments (204) 44 146 652 638 10 11 5 26Less tax effect for above items 77 (17) (55) (246) (241) (3) (3) (1) (7)Adjustments for tax-related items (1) (127) mdash mdash (1923) (2050) mdash mdash 110 110
Adjusted income available to common stockholders $ 119 $ 108 $ 124 $ 170 $ 521 $ 159 $ 143 $ 243 $ 545Adjusted diluted earnings per common share (2) $ 14 $ 13 $ 15 $ 20 $ 63 $ 19 $ 17 $ 24 $ 61Weighted-average shares - diluted (thousands) 826476 828575 829368 829607 828518 830197 830107 1026504 896322
(1) The first quarter of 2017 includes an unfavorable adjustment related to the release of a valuation allowance The fourth quarter of 2017 includes an unfavorable adjustment to reverse the tax benefit associated with remeasuring our deferred tax balances at a lower corporate rate resulting from Tax Reform The third quarter of 2018 reflects tax adjustments driven by the WPZ Merger primarily a valuation allowance for foreign tax credits
(2) The sum of earnings per share for the quarters may not equal the total earnings per share for the year due to changes in the weighted-average number of common shares outstanding
43copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Reconciliation of Income (Loss) Attributable to The Williams Companies Inc to Adjusted Income (conrsquot)
NON-GAAP RECONCILIATIONS
Midpt High Low Midpt High(Dol lars in mi l l ions except per-share amounts )
Net income (loss) $1385 $1460 $1050 $1200 $1350Less Net income (loss) attributable to noncontrolling interests 325 345 115 115 115Net income (loss) attributable to The Williams Companies Inc 1060 1115 935 1085 1235
Adjustments 1Adjustments included in Modified EBITDA 2 (521) (521) - - - Adjustments below Modified EBITDA (62) (62) - - - Allocation of adjustments to noncontrolling interests 16 16 - - - Total adjustments (567) (567) - - - Less tax effect for above items 141 141 - - -
Adjustments for tax-related items 3 110 110 - - -
Adjusted income available to common stockholders $744 $799 $935 $1085 $1235
Adjusted diluted earnings per common share $076 $082 $077 $089 $101
Weighted-average shares - diluted (millions) 976 976 1217 1217 1217
Note Reconci l iation shown with acquis i tion of WPZ completed on August 10 2018
(1) A deta i led l i s t of adjustments i s included in this presentation
(2) Primari ly a $593 mi l l ion ga in on the sa le of Four Corners assets(3) Reflects tax adjustments driven by the WPZ Merger primari ly a va luation a l lowance for foreign tax credi ts
2 0 1 8G U I D A N C E R A N G E S
2 0 1 9
2copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
WMBMedian
SampP 500
WMB vs SampP 500
Approximate Current Dividend Yield(2)
58 22 1636
Adjusted EPSCAGR(2)
(2017-2019)189 136 390
Adjusted EBITDA Growth(2)
(2018-2019)99 71 394
Dividend Growth(2)
(2018-2019)125 67 866
(1) Per SampP Capital IQ Williamsrsquo adjusted EBITDA exceeded or was within 2 of the consensus estimate for EBITDA in each quarter 1Q 2016ndash3Q 2018(2) Data and estimates as of January 4 2018 Median SampP 500 2017-2019 growth rates based on Bloomberg consensus estimates WMB 2018-2019 growth rates based on midpoint of guidance (3) Represents peer average EV NTM EBITDA multiple from January 1 2013 to current peers include ENB EPD ET KMI OKE TRGP and TRPNote This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP comparable financial measures are included at the back of this presentation
Williams is a unique large-scale low-volatility growing natural gas infrastructure company with strong investor upside
gt Volume-driven natural gas strategy drives low volatility in earnings and cash flowgt Advantaged and irreplaceable asset base handling 30 of US low-cost natural gas suppliesgt Large-scale energy company ~$52 billion enterprise value with Investment Grade credit
ratingsgt 2019 gross margin projected to be ~97 fee-based gt Met or exceeded Adjusted EBITDA street consensus each of the last 11 quarters(1)
gt Exceeded midpoint for 2017 key guidance metrics 2018 trending toward high end of rangegt ~$125 billion excess cash available after dividends in 2019
STABILITY
gt Nationrsquos largest and fastest growing interstate natural gas pipeline system Transco with unrivaled proximity to growing Mid-Atlantic Southeast and Gulf Coast demand centers
gt 15 Northeast GampP gathered volume CAGR expected 2018-2021
gt 189 Adjusted EPS growth CAGR expected 2017-2019 despite $34B in asset sales
gt 10 Adjusted EBITDA growth 2018-2019 expecting 5-7 annual Adjusted EBITDA growth longer term beyond 2019
GROWTH
gt Attractive current dividend yield of 58(2) with strong coverage
gt 104x EV 2019 EBITDA multiple(2) below long-term historical average of 128x(3)
gt Long-term historical 128x multiple(3) implies a $34 stock price which aligns with sell-side consensus target price providing for 44 upside to current price(2)
VALUATION
3copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
WILLIAMS HANDLES ~30 OF US NATURAL GAS VOLUMES
Source Figures represent 100 capacity for operated assets including those in which Williams has a share of ownership NGL storage includes capacity owned and under long-term lease All data as of December 31 2017 plus the addition of Atlantic Sunrise Transco expansion to the natural gas transportation statistics DJ Basin acquisition and Four Corners assets sale of 2H 2018 not accounted for in statistics
Consistent strategy focused on natural gas volume growth
StorageMixed NaturalGas Liquids
FractionationFacilities
Gas Processing Plants(onshore and
Offshore)
Gathering(onshore and
Offshore)
Wellhead(onshore and
Offshore)
TransportationLines Rail and
Truck
OlefinsPlant
Olefins End Users
Natural Gas TransportationLines Storage
MultipleProducts
Industrial
Power Transport
ResidentialCommercial
Exports
Gas End Users
Other NGL End Users
224 Bcfd18670 miles
69 Bcfdinlet
383 Mbbld 317 Mbbld224 MMbbl
575 Mbbld
218 MMdthd capacity14530 miles
4copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Connecting the best supplies to thebest markets with advantaged infrastructure
Williamsrsquo US Asset MapNORTHEAST GampP Operating Area
ATLANTIC GULFOperating Area
WEST Operating Area
gt Extensive portfolio of reliable assets connecting sources of supply to demand markets
gt Stable cash flows and operational efficiencies driving results
gt Growth opportunities continue to reinforce long-term stability
gt Large-scale asset footprint in place gt Significant production growth driven
by infrastructure de-bottleneckinggt Capital efficient expansions linked
to existing assets
gt Irreplaceable infrastructure with low-risk revenue stream
gt Unmatched growth opportunity linked to existing assets
gt Unique footprint with access to low-cost supply sources and growing demand centers
5copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Industry leading board of directors focused on capital discipline and long-term growth
Alan ArmstrongInside Director
President and CEO Williams
Director since 2011
Stephen W BergstromIndependent Director
ChairmanFormer President and CEO general partner American
Midstream Partners GP LLCDirector since 2016
Nancy K BueseIndependent DirectorExecutive Vice President
and CFO Newmont
Mining CorporationDirector since 2018
Stephen I ChazenIndependent DirectorFormer President and
CEO Occidental Petroleum Corporation Director since 2016
Charles ldquoCaseyrdquo Cogut
Independent DirectorRetired Partner
Simpson Thacheramp Bartlett LLP
Director since 2016
Kathleen B CooperIndependent Director
President Cooper Strategies Intl LLC
Director since 2006
Michael A CreelIndependent Director
Former CEO Enterprise Products
Partners LPDirector since 2016
Vicki L FullerIndependent Director
Former Chief Investment Officer New York State Common
Retirement FundDirector since 2018
Peter A RagaussIndependent Director
Former Senior Vice President and CFO
Baker Hughes Incorporated
Director since 2016
Scott D SheffieldIndependent DirectorChairman and Former
CEO Pioneer Natural Resources
CompanyDirector since 2016
Murray D SmithIndependent Director
President Murray Smith and Associates former Minister of Energy for
Alberta CanadaDirector since 2012
William H SpenceIndependent DirectorChairman President and
CEO PPL Corporation
Director since 2016
Joseph H WilliamsHonorary Director
6copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Leadership team focused on driving toward sustainable long-term growth
Leadership amp Talent Development
gt Organization aligned around our focused strategy
gt Focusing resources on regulatory permitting and government affairs to increase project execution effectiveness
Alan ArmstrongPresident and Chief
Executive Officer
Micheal DunnExecutive Vice President
and Chief Operating Officer
Chad ZamarinSenior Vice President
Corporate Strategic Development
John ChandlerSenior Vice President and Chief Financial
Officer
T Lane WilsonSenior Vice President and General Counsel
Debbie CowanSenior Vice President
Chief Human Resources Officer
7copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
gt Strong safety reporting and continuous improvement culture
gt Robust Pipeline Integrity Management Program
gt Performing better than industry benchmark for Total Recordable Injury Rate (TRIR)
gt Goal of 15 reduction of process safety incidents 25 reduction since last year
gt Strong commitment to safety and operational discipline by 12 Life Critical Operating Requirements being institutionalized
gt Leading damage prevention and public awareness programs
gt Diverse and independent board comprised of industry leaders
gt Oversight on ESG issues from EHS Nominating and Governance Committees
gt Compensation aligned with business strategies including safety performance
gt Comprehensive Integrated Management System operationalizes EHS management with specific policies procedures and standards includes external and internal audits
gt Extensive environmental monitoring and measurement including emissions tracking and reporting
gt Signatory to INGAArsquos Methane Emissions Commitments to minimize methane emissions
gt Proud history of voluntary environmental conservation and restoration projects that exceed regulatory requirements
gt Committed to increased diversity
gt Dedicated to excellence in land use and landowner relationships
gt Stakeholder input resulting in more than 400 changes to Atlantic Sunrisersquos pipeline route
gt $107 million total charitable giving in last decade to more than 8000 organizations
Strong leadership commitment to sustainable business practices
SAFETY
GOVERNANCE
ENVIRONMENTAL
SOCIAL
8copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
2018gt International Association for Public Participationrsquos Core Values Award and
Project of the Year Award for Atlantic Sunrise projectgt Platts 2018 1 Midstream Company
2017gt Forbes US Best Large Employers ― 22gt SGA Environmental Excellence Award for Stewardship
2016gt Forbes Americarsquos Best Employersgt SGA Environmental Excellence Award for Stewardshipgt New York Landmarks Conservancy Lucy G Moses Award
2015gt Fortune Magazine 1 Most Admired US Energy Companygt Platts 2015 Global Energy Awards mdash Midstream Leader Awardgt ENR MidAtlantic Best Project mdash EnergyIndustrialgt SGA Environmental Excellence Award
A history of industry recognition
9copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Williamsrsquo regulated gas pipelines located in most densely populated areas of United States creating premier competitive advantage
Transco
Northwest Pipeline
Gulfstream
LegendPopulation per sq mile
50 or less
50-100100-200200-300300 or more
Source Data based off 2012 Census estimates
US Counties Color-coded by Population Density vs Williamsrsquo Regulated Natural Gas Pipelines
10copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0 100 200
Rockies
Mid-Con + Gulf Coast
Appalachia
Gas-Directed Risked Reserves by Region(Tcf)
Source Wood Mackenzie NACPAT 4Q 2018
Williamsrsquo Northeast GampP located in basin with largest recoverable gas reserves at the lowest cost
US Key Production Basins vs Williamsrsquo GampP Assets
LegendWilliamsrsquo Assets
Greater Green River
Powder River
Denver-JulesburgPiceance
Mid-Con + Gulf Coast
AnadarkoPermian
Eagle Ford
Barnett
Haynesville
Arkoma
89 lt$300MMBtu HH
78 lt$300 MMBtu HH
89 lt$300MMBtu HH
Appalachia
Rockies
0 4000 8000 12000
Rockies
Mid-Con + Gulf Coast
Appalachia
Gas-directed Remaining Locations by Region
73 lt$300 MMBtu HH
82 lt$300 MMBtu HH
84 lt$300 MMBtu HH
181
81
9
111K
55K
15K
11copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
DECEMBER 2018 $MMBTU BY FUEL SOURCE
Sources SampP Global Platts NYMEXNote Bar chart denotes MMBTU equivalent of quoted price data label denotes quoted price
Natural gas provides superior economic and environmental benefits vs other fuels driving investment in new demand
$0
$2
$4
$6
$8
$10
$12
Coal NYMEX Henry Hub NaturalGas
Mt Belvieu Ethane WTI Brent USGC NAPHTHA
$M
MBt
u
$336 MMBTU
36CPG
$202 MMBTU
$6100Bbl
$5216 Bbl
WTI to Henry Hub ratio 22X
$4720Bbl
Ethane FracSpread 12 CPG
12copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
NORTH AMERICAN NATURAL GAS DEMAND BY SECTOR (2012ndash2023)
Sources Wood Mackenzie 1H rsquo18 WMB Analytics Based off 90 utilization of announced North American ethane export capacity and North American ethylene plant capacity rsquo18-rsquo22
Robust domestic and global natural gas demand forecasts continue to rise reaching 120 Bcfd by 2023
0
15
30
45
60
75
90
105
120
135
2012 2017 2018 2023
Bcf
d
IndustrialPowerGeneration
Mexico Exports
TransportOther
ResidentialCommercial
LNG Exports
Demand Growth lsquo17-rsquo18 10
North American demand growth lsquo17-rsquo23 increased by 4 Bcfd from prior forecast
+~1045 Mbpd
of incremental ethane
represents ~29 Bcfd of natural gas
13copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0
5
10
15
20
25
30
35
40
45
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18 Cum
ulative Global D
emand G
rowth Since lsquo11
Oil
amp G
as P
rice
in M
MB
tu
Cumulative Global Demand for Nat Gas Cumulative Global Demand for Oil Henry Hub Forward Curve WTI Forward Curve
Sources SampP Global Platts Analytics for global demand outlook US Energy Information Administration for price history NYMEX for forward curves as of 1-4-19
Natural gas will continue to win global market share
Forecast
NATURAL GAS VS OIL DEMAND GROWTH (2011 TO 2027) HENRY HUB AND WTI PRICES (MMBTU)
14copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0
500
1000
1500
2000
2500
3000
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Tota
l Em
issi
on (M
MtC
O2)
Ele
ctric
Pow
er (b
illion
KW
h)
Coal Natural Gas Renewables Nuclear Petroleum Total Emissions (MMT CO2)
US ELECTRIC POWER GENERATION AND EMISSIONS 2007-2017
Note Renewables = hydroelectric wind amp solar power generation Source US Energy Information Administration
US natural gas market share increases over time for Power sector while coal use declines Contributes to a decline of CO2 emissions
Coal and petroleum power generation
decreased by 40 while natural gas power generation increased by 42
CO2emissions decline by
28
15copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Source US Energy Information Administration
Natural gas continues to be the preferred fuel type for new power generation projects in the United States followed by renewables
0 5000 10000 15000 20000
Other
Coal
Nuclear
Solar
Wind
Natural Gas
Nameplate Capacity (MW)
Power Generation Projects Under Construction by Fuel Type Fuel Type of
Choicegt Carbon intensity from the US power sector
fell by 14 since 2005 as natural gas displaced other fossil fuels in power generation
gt Natural-gas fired power generation accounts for over 50 of current power projects under construction
Partnering with Renewables
gt As states make strides toward renewable power it is vital for natural gas-fired generation to follow as a backup fuel to ensure grid reliability
gt Natural gas pipeline capacity is increasingly valuable as more capacity will be needed to support the intermittent nature of renewable power
Dark blue represents expected utilization
Full bar represents nameplate capacity
16copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Note Chart excludes Eastern Canada Alaska West Coast Barnett Gulf Coast conventional amp GOM production that amounts to a decline of 24 Bcfd through 2022 CV=Cotton Valley Source Wood Mackenzie 1H lsquo18
Supply from advantaged basins must grow to meet forecasted demand
0
5
10
15
20
25
30
35
40
45
Northeast Permian Mid-con WesternCanada
Eagle Ford Haynesville+ CV
Rockies San Juan
Gas DirectedOil-Directed
Bcfd
+148 Bcfd or 61
+53 Bcfdor 76 -01 Bcfd
or -1
+19 Bcfdor 33
+20 Bcfdor 46
+30 Bcfd or 35
+23 Bcfdor 15
NATURAL GAS FORECASTED PRODUCTION BY REGION amp WELL TYPE (2017ndash2022)
-05 Bcfdor -30
70 of NA Gas growth comes from
gas-directeddrilling
17copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
ResCom Industrial Power
TransportOther LNG Exports Net Mexican Exports
NORTH AMERICAN NATURAL GAS CUMULATIVE PRODUCTIONGROWTH 2017-2022 (IN BCFD)
NORTH AMERICAN NATURAL GAS CUMULATIVE DEMANDGROWTH 2017-2022 (IN BCFD)
Source Wood Mackenzie 1H lsquo18
Forecasted Northeast production growth alone could fuel domestic natural gas demand growth through 2022
0
5
10
15
20
25
30
Northeast Permian All Other
Northeast is 60 of all North American gas production growth through 2022
Exports
Domestic Demand
18copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
2nd wave of US LNG export projects expected to drive an additional +5 Bcfd of growth through 2027
LNG exportvolumes to grow by+11 Bcfd along
Transco statesthrough 2027
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
Sabine Pass Cove Point Corpus ChristiCameron Elba Island Freeport2nd Wave Gulf Coast Golden Pass WoodfibreLNG Canada Prior 1H 17 Forecast
Forecasted Monthly LNG Export Volumes
In MMcfd
Source Wood Mackenzie 1H lsquo18
Williamsrsquo Asset Map + Third-party Liquefaction Plants
19copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
43
27
2017
1413
1110
1008
0761
39414345474951535557596163
Bcf
d
TOP DRIVERS OF GLOBAL LNG DEMAND BY COUNTRY lsquo17- lsquo27
Source Wood Mackenzie LNG Tool 3Q lsquo18
Global LNG demand grows by 24 Bcfd through 2027 driven by Asia and Europe
Asia Europe Other
Global Market
Reaching 63 Bcfd
+24 Bcfd
Factors Driving GrowthChina amp Indiabull Developing economies pursuing clean
energy for growth amp fuel diversity Northwest Europebull LNG balances the market with flexible
dependable supplybull Upside potential from weather events amp
other price sensitive demand responsesSoutheast Asiabull Need for supplemental supplies to replace
maturing and declining indigenous resourcesbull Stronger growth prospects linked with better
than anticipated economic developmentsSoutheast Europebull LNG complements domestic amp pipeline
supply Japan South Korea amp Taiwanbull While solely dependent on LNG legacy
importers expected to have flat to declining demand due to relatively mature energy demand market
20copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Sources 1Wood Mackenzie LNG Tool 3Q lsquo18 and 1H lsquo18 LT 2Columbia SIPA Center on Global Energy Policy httpsenergypolicycolumbiaedu
Chinese LNG demand surpassed industry expectations in 2017 Growth outlook remains strong for 2018 and beyond
0
1
2
3
4
5
6
7
8
9
10
2016 2017 2018 2019 2020
Bcfd
China LNG Imports North America LNG Exports
2Factors Driving LNG Demand Growth in Chinabull Ambitious goals to improve air quality including
almost doubling the share of gas in Chinarsquos energy mix to 10 by 2020
bull Coal-to-gas switching to fight greenhouse gas emissions as natural gas emits nearly 60 less CO2 per kWh than coal in power generation
bull Progress in liberalizing natural gas to allow non-government parties to receive access to pipelines and LNG terminals
bull Short-term gas shortages due to peaked demand lack of storage capacity and overstretched LNG infrastructure with a 2017 average utilization rate of 105
bull Declines in piped gas supply from central Asia and insufficient domestic gas production unable to meet demand growth
1Chinese LNG Demand vs NA LNG Export Forecast2016-2020
21copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Williams best positioned to capitalize on significant opportunities to connect low-cost supplies to premier demand markets
+53 +32
Gulf CoastDemand
Mexican Exports
Permian Production
+21
+148
+22
+35
Northeast Demand
Southeast Demand
NortheastProduction
GC LNGExports
+69
Production and Demand Growth in Key Areas in Bcfd (2017-2022)
Williamsrsquo assets uniquely aligned with demand growth along the East Coast from Texas all the way to the Northeast
LNG Exports(Elba + Cove Point)
+11
Leveraging significant investments in Northeast and Transco to connect best supplies to the best markets
Note All other NA production amounts to 02 Bcfd of growth rsquo17 ndash rsquo22 and all other NA demand amounts to 16 Bcfd of growth lsquo17 ndash lsquo22
Source Wood Mackenzie 1H lsquo18
Majority of production growth in Northeast with significant growth also occurring in the Permian
22copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Attractive returns on visible growth capital focused on Transco and GampP projects in the Northeast West and AG Deepwater
gt West ndash DJ Processing Plants 200 MMcfd (Ft Lupton III)
gt Atlantic Gulf Deepwater ndashStampede
gt Northeast GampP ndashSusquehanna Gathering Expansion 700 MMcfd
gt Transco ndash Atlantic Sunrise 17 MMDthd
gt West ndash DJ Processing Plant 225 MMcfd (Keenesburg I)
gt West ndash Wamsutter ndash High Point Hansen Lake amp Echo Springs GampP Expansions
gt West ndash Niobrara ndash Jackalope Gathering amp Bucking Horse Processing 200 MMcfd
gt Northeast GampP ndash Rich Gas Growth Driving Oak Grove Expansions
gt Northeast GampP ndash Oak Grove II III 400 MMcfd amp Harrison Hub C3+ Pipeline
gt Northeast GampP ndash Bradford amp Utica Gathering Expansion
gt Atlantic Gulf Deepwater ndash Shell Appomattox ndash Norphlet Pipelinendash Mobile Bay Gas Plant Expansion
gt West ndash North Seattle Lateral Upgrade 159 MDthd
gt Transco ndash Rate Casegt Transco ndash Gulf Connector 475 MDthdgt Transco ndash St James Supply 162 MDthdgt Transco ndash Rivervale S to Market 190 Mdthd
gt West ndash DJ Processing Plant 225 MMcfd (Keenesburg II)
gt Northeast GampP ndashSusquehanna Gathering Expansion 800 MMcfd
gt Atlantic Gulf Deepwater ndashBuckskin
gt Transco ndash Hillabee Phase 2 206 MDthd
gt Transco ndash Southeastern Trail 296 MDthd
gt West ndash DJ Processing Plants 225 MMcfd (Milton I)
gt Transco ndash Gateway 65 MDthd
gt Transco ndash Northeast Supply Enhancement 400 MDthd
gt Transco ndash Leidy South 580 MDthd
gt West ndash DJ Processing Plants 225 MMcfd (Milton II)
gt Northeast GampP ndash Oak Grove IV 200 MMcfd
gt Atlantic Gulf DeepwaterndashAdditional Tie-backs Shell Whale Ballymore Tigris Mexico Perdido amp others
gt Transco ndash Pursuing 20+ expansion opportunities including ldquoProject 1rdquo from Analyst Day
gt Gulfstream Phase VI Expansion
SUPP
LY D
RIV
END
EMA
ND
DR
IVEN
Black = In Progress Blue = PotentialUnder Negotiation
2018 2019 2020 2021 2022+
23copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
(1) Consolidated revenue will be reduced by lease payment of ~$8 millionmonth to partners
Atlantic Sunrise Largest expansion project in Transco history placed in service October 6th delivers significant EBITDA growth
gt Significant revenue contribution to Transco
ndash $35 millionmonth(1) in consolidated fee-based revenue
gt Northeast gas prices quickly respond to incremental takeaway capacity
ndash NE Gas prices rose from ~$120 to ~$270 the day Atlantic Sunrise was placed in service
gt Northeast GampP gathered volume and EBITDA uplift expected
ndash Price response supportive of producer activity in the NE PA Susquehanna
ndash 15 gathering volume growth CAGR expected 2018-2021
ndash EBITDA to grow at a higher rate due to improved operating margins
Atlantic Sunrise17 MMDthd
Williamsrsquo US Asset Map Highlighting Transcorsquos Atlantic Sunrise Expansion Project PA
NY
WV
OH
NJ
$050
$100
$150
$200
$250
$300
$350
$M
MB
tu
Northeast Gas PricesTetco M-2 TGP Z-4 300 Leg Transco Leidy
Atlantic SunriseIn Service Oct 6
24copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Transco 2018 rate case protects adequate return on base system
gt Rate filed August 31 2018ndash ~$270MM annual revenue increase
bull Based on 16 ROE as prescribed by FERC methodology every 1 change in ROE is worth ~$30MM in Revenue
bull Subject to negotiation with shippers ndash Proposed 5-year $12B modernization and emission reduction investment
programndash Rate increase and proposed modernization program incremental to 2019
guidancegt Increased rates expected to be effective March 2019
RATE CASE TIMELINE
gt Lower corporate tax rate reduces income tax allowancegt Factors driving higher cost of service
ndash Higher expense in recent years to be incorporated into rate casendash Maintenance capital and modernization spending to be reflected in rate base
gt By 2019 approximately 55 of fee revenues from negotiated ratesndash Negotiated rate contracts remain unaffected by rate case and income tax changes
RATE CASE CONSIDERATIONS
VIRGINIA SOUTHSIDE II CONSTRUCTIONTransco Pipeline Southern Virginia
25copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Transco Project 2 sanctioned Leidy South ndash Providing access to new Northeast supplies
gt Extends Transcorsquos reach
gt Greater than 1000 MDthd of firm transport capacity in Zones 3 4 5 and 6
gt Attractive returns consistent with recent Transco expansions
gt 580 MDthd expansion in Pennsylvania from receipt points on Transcorsquos Leidy system to Zone 6 markets
gt Target in-service date 4Q 2021
gt Target capital cost $450-$550 million
gt 100 long-term take-or-pay contracts providing attractive returns consistent with Transcorsquos 2018-2021 expansion project profile of ~64x
gt Provides transportation outlet for producers and supports incremental gathering volume for Williamsrsquo Northeast PA gathering system
Two examples of Transcorsquos
20+ expansion
opportunities
US Map of Williamsrsquo Assets Highlighting Transco Pipeline PROJECT 1
LEIDY SOUTH (PROJECT 2)
26copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
(1) Includes Gulf Trace Hillabee (Ph 1) Dalton NY Bay Expansion Virginia Southside II Garden State I(2) Includes Garden State II Atlantic Sunrise Gulf Connector St James Supply Rivervale South to Market NE Supply Enhancement Hillabee (Ph 2) Gateway Southeastern Trail Leidy South
Transco Unprecedented growth demonstrates competitive advantageTRANSCO CONTRACTED CAPACITYAND FEE-BASED REVENUE
85 86 89 100 101
106 106
120 122
150
169177
180
193
$750
$1000
$1250
$1500
$1750
$2000
$2250
$2500
$2750
6
8
10
12
14
16
18
20
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Fee
Bas
ed R
even
ue $
Mill
ions
Con
trac
t Cap
acity
MM
Dtd
Year-end Contracted Capacity Forecasted Year-end Contracted Capacity Fee Revenue ($ MM) Forecast Fee Rev
2017(1) 2018 ndash2021(2)
Growth Capital Placed In-service ($ Bln) ~$14 ~$52
Full-year run-rate Modified EBITDA ($ Bln) ~$024 ~$084
EBITDA multiple ~58x ~63x
Attractive Returns on Growth Projects
27copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
(1) Gathering and processing statistics for Utica Supply Hub do not include Blue Racer (2) Non-operated joint venture (3) Primarily Cost-of-service based contracts
Northeast GampP Large footprint with foundational assets in place
gt 13 Bcfd of gathering capacity in dryrich gas
gt 800 MMcfd of processing capacity
gt 135000 bpd fractionation capacity
UTICA SUPPLY HUB(1)
gt Cardinal Gathering(3)
gt Flint Gatheringgt Utica East Ohio (UEO)(2)
BLUE RACER MIDSTREAM(2)
BRADFORD SUPPLY HUB(3)
SUSQUEHANNA SUPPLY HUB
gt 32 Bcfd of gathering capacity in dry gas
gt 570 miles of gathering pipeline in dryrich gas
gt 800 MMcfd of processing capacity
gt 123000 bpd fractionation capacity
gt 151 miles of NGL and condensate transport
gt 36 Bcfd of gathering capacity in dry gas
gt 15 Bcfd of gathering capacity in dryrich gas
gt 700+ MMcfd processing capacity
gt 120000+ bpd fractionation and de-ethanization capacity
OHIO RIVER SUPPLY HUB
gt Ohio Valley Midstreamgt Laurel Mtn Midstreamgt Marcellus South
PA
28copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0
1
2
3
4
5
6
7
8
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2013 2014 2015 2016 2017 2018
Bcf
d
Dry Gas Wet GasLegend
Northeast GampP Substantial growth expected from incremental takeaway capacity and new expansion projects to relieve constraints
Notes Partially owned system volumes are shown at 100 Excludes volumes for all non-operated assets
NORTHEAST GATHERING VOLUME GROWTH THROUGH 3Q 2018 AVERAGE GATHERED VOLUMES (BCFD)
15 GATHERED VOLUME
CAGR EXPECTED
2018-2021
29copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Gulf of Mexico Substantial discoveries in close proximity to existing assets expected to facilitate long-term growth
Gulf East
7 tiebacks contracted expecting morebull Shell Appomattox dedication Norphlet pipeline option
minus Producer expected reserves 650 MMboeminus Producer expected peak production 175 Mboedminus Target in-service date Mid 2019
bull Opportunities include ChevronTotal Ballymore discovery 3 miles from Blind Faithminus Largest discovery by Total in the GOM with more than 670 ft of net oil pay
Discovery
gt1 TCF of gas discoveries within reach of KCCbull Buckskin Stampede dedications
minus Combined additional reserves 66 Bcfminus Stampede online May 2018 Buckskin target in-service date 2H 2019
bull Opportunities include discoveries at Anchor Shenandoah and Katmai
Gulf West
Only existing Oil amp Gas pipelines near active Western Gulf explorationbull Opportunities include Shell Whale (15 miles from existing pipelines)
Tigris and Mexico Perdido discoveriesminus Shell Whale One of Shellrsquos largest finds in the GOM in the past decade
with over 1400 feet of oil pay
Gas GatheringOil GatheringNorphlet PipelineDeepwater SparGrowth ProjectsMexico Deepwater Basin
Sources Chevron 1302018 Ballymore Press Release Total 1312018 Ballymore Press Release Shell 1312018 Whale Press Release
TXLA
MS
BALLYMORE
NORPHLETPIPELINE
TIGRIS
BUCKSKIN
ANCHOR
APPOMATTOX
WHALE
ALFL
30copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Pro-forma Four Corners sale and DJ Basin acquisition Fee-based business structure reinforces stability in cash flows
gt Reduced commodity exposure with sale of Four Corners Area assets
(1) Includes our proportional ownership of the gross margin of our equity method investments Excludes certain regulated revenues which are related to tracked operating costs(2) MVC revenue includes revenue level guaranteed by MVC and excludes any revenue on volumes exceeding MVC MVC revenue also includes amortization of upfront payments associated with canceled MVCs
~97 of 2019 Gross Margin from Fee-based Sources2019 Gross Margin(1)
gt Fully contracted demand charge revenuegt Attractive positions exposed to growth
gt Mix of capacity payments MVCs(2) and Cost of Service agreements
gt Volume-driven fee-based contracts for gathering processing or other non-regulated services
gt Some contracts include escalation provisions
36 Volume-driven Non-regulated Fee-based Revenue
38 Regulated Gas PipelineFee-based Revenue
3 NGL and Other Commodity Exposure
23 Volume-protected Non-regulated Fee-based Revenue
36
3
38
23
31copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Moved to investment grade on significant credit metric improvementIndustry leading dividend coverage funding growth capital forecast gt$44 billion of asset sales from 2016-2018
significantly reducing our direct commodity exposure Jan lsquo17 repositioning and deleveraging transactions Streamlining the organization and aggressively
managing costs
$39
$26
$00
$05
$10
$15
$20
$25
$30
$35
$40
2018 2019
GrowthCapex
GrowthCapex
$1045 $125
Excess Cash Available After Dividends
($ in billions)
Excess Cash Available After Dividends
Note This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP comparable financial measures are included at the back of this presentation(1) 2015-2019 Debt Adjusted EBITDA ratios presented here does not represent leverage ratios measured for WMB credit agreement compliance or leverage ratios as calculated by the major credit ratings agencies
$1302Cash from sale of
Four Corners Area assets and Gulf Coast Pipelines
597x
530x
462x
~500x
lt475x
2500
3000
3500
4000
4500
5000
5500
300x
350x
400x
450x
500x
550x
600x
650x
2015 2016 2017 2018 2019
Adjusted EB
ITDA
($ Millions)
Deb
t A
djus
ted
EBIT
DA
WMB DebtAdjusted EBITDAAdjusted EBITDA ($MM)
WMB 2018 DebtAdjusted EBITDA proforma for full year Atlantic Sunrise revenue contributions
GUIDANCE
(1)
Long-term Target
lt42x Book Debt Adjusted EBITDA
(1)
No equity issuance required to fund forecasted growth capital
Excess cash available after dividends and asset sales to be used to partially fund growth capex
Capital discipline focused on ROCE
32copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
$063
$076 $077
$082$089
$101
$020
$030
$040
$050
$060
$070
$080
$090
$100
$110
2017 2018 Guidance Ranges 2019 Guidance Ranges
Williams Adjusted EPS 2017-2019
Steady and predictable growth despite assets sales and commodity price volatility
$Sh
are
Note This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP financial measures is included at the back of this presentation
Assets sales of over $34B
Geismar in rsquo17 Four Corners amp Gulf Pipes in lsquo18
(Note ~$2B in book gains are removed from Adjusted EPS)
LowMidpoint
MidpointHigh
HighWe expect 2018 to be in the upper half of our guidance
range ($076 to $082)
33copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Strong stable and growing 2018 and 2019 key guidance metrics
2018 GUIDANCE 1 2019 GUIDANCE
Net Income $0975 - $1175 Bn $1050 - $1350 Bn
Adjusted EBITDA $4450 - $4650 Bn $4850 - $5150 Bn
Distributable CashFlow (DCF) $2600 - $2900 Bn $2900 - $3300 Bn
Expected DividendGrowth Rate
10-15 annual growth(annual dividend increases)
10-15 annual growth(annual dividend increases)
DividendCoverage Ratio
~16xMidpoint of Guidance
~17xMidpoint of Guidance
Growth Capex $39 Bn $26 Bn
Consolidated Debt Adjusted EBITDA 2 ~ 50 x lt 475x
Note This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP comparable financial measures are included at the back of this presentationWilliams does not expect to be a US Federal cash income taxpayer through at least 2024 excluding taxes on any potential asset monetizations
1 DCF shown Proforma as if the WPZ transaction had occurred 1118 Dividend payments used in the coverage calculation include WPZ distribution payments to WPZ public unitholders for 1Q and 2Q 2 Consolidated Debt Adjusted EBITDA ratio does not represent leverage ratios measured for either WMB or WPZ credit agreement compliance or leverage ratios as calculated by the major credit ratings agencies
34copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
WMBMedian
SampP 500
WMB vs SampP 500
Approximate Current Dividend Yield(2)
58 22 1636
Adjusted EPSCAGR(2)
(2017-2019)189 136 390
Adjusted EBITDA Growth(2)
(2018-2019)99 71 394
Dividend Growth(2)
(2018-2019)125 67 866
(1) Per SampP Capital IQ Williamsrsquo adjusted EBITDA exceeded or was within 2 of the consensus estimate for EBITDA in each quarter 1Q 2016ndash3Q 2018(2) Data and estimates as of January 4 2018 Median SampP 500 2017-2019 growth rates based on Bloomberg consensus estimates WMB 2018-2019 growth rates based on midpoint of guidance (3) Represents peer average EV NTM EBITDA multiple from January 1 2013 to current peers include ENB EPD ET KMI OKE TRGP and TRPNote This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP comparable financial measures are included at the back of this presentation
Williams is a unique large-scale low-volatility growing natural gas infrastructure company with strong investor upside
gt Volume-driven natural gas strategy drives low volatility in earnings and cash flowgt Advantaged and irreplaceable asset base handling 30 of US low-cost natural gas suppliesgt Large-scale energy company ~$52 billion enterprise value with Investment Grade credit
ratingsgt 2019 gross margin projected to be ~97 fee-based gt Met or exceeded Adjusted EBITDA street consensus each of the last 11 quarters(1)
gt Exceeded midpoint for 2017 key guidance metrics 2018 trending toward high end of rangegt ~$125 billion excess cash available after dividends in 2019
STABILITY
gt Nationrsquos largest and fastest growing interstate natural gas pipeline system Transco with unrivaled proximity to growing Mid-Atlantic Southeast and Gulf Coast demand centers
gt 15 Northeast GampP gathered volume CAGR expected 2018-2021
gt 189 Adjusted EPS growth CAGR expected 2017-2019 despite $34B in asset sales
gt 10 Adjusted EBITDA growth 2018-2019 expecting 5-7 annual Adjusted EBITDA growth longer term beyond 2019
GROWTH
gt Attractive current dividend yield of 58(2) with strong coverage
gt 104x EV 2019 EBITDA multiple(2) below long-term historical average of 128x(3)
gt Long-term historical 128x multiple(3) implies a $34 stock price which aligns with sell-side consensus target price providing for 44 upside to current price(2)
VALUATION
35copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward Looking Statements
36copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward-looking statements
FORWARD-LOOKING STATEMENTS
gt 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 ldquoforward-looking statementsrdquo within the meaning of Section 27A of the Securities Act of 1933 as amended (Securities Act) and Section 21E of the Securities Exchange Act of 1934 as amended (Exchange Act) These forward-looking statements relate to anticipated financial performance managementrsquos plans and objectives for future operations business prospects outcome of regulatory proceedings market conditions and other matters We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995 All statements other than statements of historical facts included herein that address activities events or developments that we expect believe or anticipate will exist or may occur in the future are forward-looking statements Forward-looking statements can be identified by various forms of words such as ldquoanticipatesrdquo ldquobelievesrdquo ldquoseeksrdquo ldquocouldrdquo ldquomayrdquo ldquoshouldrdquo ldquocontinuesrdquo ldquoestimatesrdquo ldquoexpectsrdquo ldquoforecastsrdquo ldquointendsrdquo ldquomightrdquo ldquogoalsrdquo ldquoobjectivesrdquo ldquotargetsrdquo ldquoplannedrdquo ldquopotentialrdquo ldquoprojectsrdquo ldquoscheduledrdquo ldquowillrdquo ldquoassumesrdquo ldquoguidancerdquo ldquooutlookrdquo ldquoin-service daterdquo or other similar expressions These forward-looking statements are based on managementrsquos beliefs and assumptions and on information currently available to management and may include among others statements regardingndash Levels of dividends to Williams stockholders
ndash Future credit ratings of Williams and its affiliates
ndash Amounts and nature of future capital expenditures
ndash Expansion and growth of our business and operations
ndash Expected in-service dates for capital projects
ndash Financial condition and liquidity
ndash Business strategy
ndash Cash flow from operations or results of operations
ndash Seasonality of certain business components
ndash Natural gas and natural gas liquids prices supply and demand
ndash Demand for our services
37copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward-looking statements (contrsquod)
FORWARD-LOOKING STATEMENTS
gt 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 herein Many of the factors that will determine these results are beyond our ability to control or predict Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include among others the followingndash Whether we are able to pay current and expected levels of dividends
ndash Whether we will be able to effectively execute our financing plan
ndash Availability of supplies market demand and volatility of prices
ndash Inflation interest rates and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers)
ndash The strength and financial resources of our competitors and the effects of competition
ndash Whether we are able to successfully identify evaluate and timely execute our capital projects and other investment opportunities
ndash Our ability to acquire new businesses and assets and successfully integrate those operations and assets into existing businesses as well as successfully expand our facilities and to consummate asset sales on acceptable terms
ndash Development and rate of adoption of alternative energy sources
ndash The impact of operational and developmental hazards and unforeseen interruptions
ndash The impact of existing and future laws and regulations (including but not limited to the Tax Cuts and Jobs Act of 2017) the regulatory environment environmental liabilities and litigation as well as our ability to obtain necessary permits and approvals and achieve favorable rate proceeding outcomes
ndash Our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans
ndash Changes in maintenance and construction costs
ndash Changes in the current geopolitical situation
ndash Our exposure to the credit risk of our customers and counterparties
ndash Risks related to financing including restrictions stemming from debt agreements future changes in credit ratings as determined by nationally-recognized credit rating agencies and the availability and cost of capital
ndash The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate
38copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward-looking statements (contrsquod)
FORWARD-LOOKING STATEMENTS
ndash Risks associated with weather and natural phenomena including climate conditions and physical damage to our facilities
ndash Acts of terrorism cybersecurity incidents and related disruptions
ndash Additional risks described in our filings with the Securities and Exchange Commission (SEC)
gt Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement we caution investors not to unduly rely on our forward-looking statements We disclaim any obligations to and do not intend to update the above list or announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments
gt In addition to causing our actual results to differ the factors listed above may cause our intentions to change from those statements of intention set forth herein Such changes in our intentions may also cause our results to differ We may change our intentions at any time and without notice based upon changes in such factors our assumptions or otherwise
gt Because forward-looking statements involve risks and uncertainties we caution that there are important factors in addition to those listed above that may cause actual results to differ materially from those contained in the forward-looking statements For a detailed discussion of those factors see Part I Item 1A Risk Factors in our Annual Report on Form 10-K filed with the SEC on February 22 2018 and in Part II Item 1A Risk Factors in our Quarterly Reports on Form 10-Q
39copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Non-GAAP Reconciliations
40copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Non-GAAP Disclaimer
NON-GAAP RECONCILIATIONS
gt This presentation may include certain financial measures ndash adjusted EBITDA adjusted income (ldquoearningsrdquo) adjusted earnings per share distributable cash flow and dividend coverage ratio ndash that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission
gt Our segment performance measure modified EBITDA is defined as net income (loss) before income (loss) from discontinued operations income tax expense net interest expense equity earnings from equity-method investments other net investing income remeasurement gain on equity-method investment impairment of equity investments and goodwill depreciation and amortization expense and accretion expense associated with asset retirement obligations for nonregulated operations We also add our proportional ownership share (based on ownership interest) of modified EBITDA of equity-method investments
gt Adjusted EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations Management believes this measure provides investors meaningful insight into results from ongoing operations
gt Distributable cash flow is defined as adjusted EBITDA less maintenance capital expenditures cash portion of net interest expense income attributable to noncontrolling interests and cash income taxes and certain other adjustments that management believes affects the comparability of results Adjustments for maintenance capital expenditures and cash portion of interest expense include our proportionate share of these items of our equity-method investments We also calculate the ratio of distributable cash flow to the total cash dividends paid (dividend coverage ratio) This measure reflects Williamsrsquo distributable cash flow relative to its actual cash dividends paid
gt This presentation is accompanied by a reconciliation of these non-GAAP financial measures to their nearest GAAP financial measures Management uses these financial measures because they are accepted financial indicators used by investors to compare company performance In addition management believes that these measures provide investors an enhanced perspective of the operating performance of assets and the cash that the business is generating
gt Neither adjusted EBITDA adjusted income nor distributable cash flow are intended to represent cash flows for the period nor are they presented as an alternative to net income or cash flow from operations They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles
41copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Reconciliation of Income (Loss) Attributable to The Williams Companies Inc to Adjusted Income
NON-GAAP RECONCILIATIONS
2017 2018(Dollars in millions except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr Year
Income (loss) attributable to The Williams Companies Inc available to common stockholders $ 373 $ 81 $ 33 $ 1687 $ 2174 $ 152 $ 135 $ 129 $ 416
Income (loss) - diluted earnings (loss) per common share $ 45 $ 10 $ 04 $ 203 $ 262 $ 18 $ 16 $ 13 $ 46Adjustments
Northeast GampPShare of impairment at equity-method investments $ mdash $ mdash $ 1 $ mdash $ 1 $ mdash $ mdash $ mdash $ mdashImpairment of certain assets mdash mdash 121 mdash 121 mdash mdash mdash mdashAd valorem obligation timing adjustment mdash mdash 7 mdash 7 mdash mdash mdash mdashSettlement charge from pension early payout program mdash mdash mdash 7 7 mdash mdash mdash mdashOrganizational realignment-related costs 1 1 2 mdash 4 mdash mdash mdash mdashTotal Northeast GampP adjustments 1 1 131 7 140 mdash mdash mdash mdash
Atlantic-GulfConstitution Pipeline project development costs 2 6 4 4 16 2 1 1 4Settlement charge from pension early payout program mdash mdash mdash 15 15 mdash mdash mdash mdashRegulatory adjustments resulting from Tax Reform mdash mdash mdash 493 493 11 (20) mdash (9)Benefit of regulatory asset associated with increase in Transcorsquos estimated deferred
state income tax rate following WPZ Merger mdash mdash mdash mdash mdash mdash mdash (3) (3)
Share of regulatory charges resulting from Tax Reform for equity-method investments mdash mdash mdash 11 11 2 mdash mdash 2
Organizational realignment-related costs 1 2 2 1 6 mdash mdash mdash mdash(Gain) loss on asset retirement mdash mdash (5) 5 mdash mdash mdash (10) (10)Total Atlantic-Gulf adjustments 3 8 1 529 541 15 (19) (12) (16)
WestEstimated minimum volume commitments 15 15 18 (48) mdash mdash mdash mdash mdashImpairment of certain assets mdash mdash 1021 9 1030 mdash mdash mdash mdashSettlement charge from pension early payout program mdash mdash mdash 13 13 mdash mdash mdash mdashOrganizational realignment-related costs 2 3 2 1 8 mdash mdash mdash mdashRegulatory adjustments resulting from Tax Reform mdash mdash mdash 220 220 (7) mdash (7)
Charge for regulatory liability associated with the decrease in Northwest Pipelinersquos estimated deferred state income tax rates following WPZ Merger mdash mdash mdash mdash mdash mdash mdash 12 12
Gains from contract settlements and terminations (13) (2) mdash mdash (15) mdash mdash mdash mdashTotal West adjustments 4 16 1041 195 1256 (7) mdash 12 5
42copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Reconciliation of Income (Loss) Attributable to The Williams Companies Inc to Adjusted Income (conrsquot)
NON-GAAP RECONCILIATIONS
2017 2018(Dollars in millions except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr Year
Other(Gain) loss related to Canada disposition (2) (1) 4 5 6 mdash mdash mdash mdashExpenses associated with strategic asset monetizations 1 4 mdash mdash 5 mdash mdash mdash mdashGeismar Incident adjustments (9) 2 8 (1) mdash mdash mdash mdash mdashGain on sale of Geismar Interest mdash mdash (1095) mdash (1095) mdash mdash mdash mdashGain on sale of RGP Splitter mdash (12) mdash mdash (12) mdash mdash mdash mdashAccrual for loss contingency 9 mdash mdash mdash 9 mdash mdash mdash mdashSeverance and related costs 9 4 5 4 22 mdash mdash mdash mdashACMP Merger and transition costs mdash 4 3 4 11 mdash mdash mdash mdashExpenses associated with Financial Repositioning 8 2 mdash mdash 10 mdash mdash mdash mdash(Gain) loss on early retirement of debt (30) mdash 3 mdash (27) 7 mdash mdash 7Impairment of certain assets mdash 23 68 mdash 91 mdash 66 mdash 66Expenses associated with strategic alternatives 1 3 5 mdash 9 mdash mdash mdash mdashSettlement charge from pension early payout program mdash mdash mdash 36 36 mdash mdash mdash mdashRegulatory adjustments resulting from Tax Reform mdash mdash mdash 63 63 mdash 1 mdash 1Benefit of regulatory assets associated with increase in Transcorsquos estimated deferred state income
tax rate following WPZ Merger mdash mdash mdash mdash mdash mdash mdash (45) (45)WPZ Merger costs mdash mdash mdash mdash mdash mdash 4 15 19Charitable contribution of preferred stock to Williams Foundation mdash mdash mdash mdash mdash mdash mdash 35 35Total Other adjustments (13) 29 (999) 111 (872) 7 71 5 83
Adjustments included in Modified EBITDA (5) 54 174 842 1065 15 52 5 72
Adjustments below Modified EBITDAGain on disposition of equity-method investment (269) mdash mdash mdash (269) mdash mdash mdash mdashAccelerated depreciation by equity-method investments mdash mdash mdash 9 9 mdash mdash mdash mdashChange in depreciable life associated with organizational realignment (7) mdash mdash mdash (7) mdash mdash mdash mdashGain on deconsolidation of Jackalope interest mdash mdash mdash mdash mdash mdash (62) mdash (62)Allocation of adjustments to noncontrolling interests 77 (10) (28) (199) (160) (5) 21 mdash 16
(199) (10) (28) (190) (427) (5) (41) mdash (46)Total adjustments (204) 44 146 652 638 10 11 5 26Less tax effect for above items 77 (17) (55) (246) (241) (3) (3) (1) (7)Adjustments for tax-related items (1) (127) mdash mdash (1923) (2050) mdash mdash 110 110
Adjusted income available to common stockholders $ 119 $ 108 $ 124 $ 170 $ 521 $ 159 $ 143 $ 243 $ 545Adjusted diluted earnings per common share (2) $ 14 $ 13 $ 15 $ 20 $ 63 $ 19 $ 17 $ 24 $ 61Weighted-average shares - diluted (thousands) 826476 828575 829368 829607 828518 830197 830107 1026504 896322
(1) The first quarter of 2017 includes an unfavorable adjustment related to the release of a valuation allowance The fourth quarter of 2017 includes an unfavorable adjustment to reverse the tax benefit associated with remeasuring our deferred tax balances at a lower corporate rate resulting from Tax Reform The third quarter of 2018 reflects tax adjustments driven by the WPZ Merger primarily a valuation allowance for foreign tax credits
(2) The sum of earnings per share for the quarters may not equal the total earnings per share for the year due to changes in the weighted-average number of common shares outstanding
43copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Reconciliation of Income (Loss) Attributable to The Williams Companies Inc to Adjusted Income (conrsquot)
NON-GAAP RECONCILIATIONS
Midpt High Low Midpt High(Dol lars in mi l l ions except per-share amounts )
Net income (loss) $1385 $1460 $1050 $1200 $1350Less Net income (loss) attributable to noncontrolling interests 325 345 115 115 115Net income (loss) attributable to The Williams Companies Inc 1060 1115 935 1085 1235
Adjustments 1Adjustments included in Modified EBITDA 2 (521) (521) - - - Adjustments below Modified EBITDA (62) (62) - - - Allocation of adjustments to noncontrolling interests 16 16 - - - Total adjustments (567) (567) - - - Less tax effect for above items 141 141 - - -
Adjustments for tax-related items 3 110 110 - - -
Adjusted income available to common stockholders $744 $799 $935 $1085 $1235
Adjusted diluted earnings per common share $076 $082 $077 $089 $101
Weighted-average shares - diluted (millions) 976 976 1217 1217 1217
Note Reconci l iation shown with acquis i tion of WPZ completed on August 10 2018
(1) A deta i led l i s t of adjustments i s included in this presentation
(2) Primari ly a $593 mi l l ion ga in on the sa le of Four Corners assets(3) Reflects tax adjustments driven by the WPZ Merger primari ly a va luation a l lowance for foreign tax credi ts
2 0 1 8G U I D A N C E R A N G E S
2 0 1 9
3copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
WILLIAMS HANDLES ~30 OF US NATURAL GAS VOLUMES
Source Figures represent 100 capacity for operated assets including those in which Williams has a share of ownership NGL storage includes capacity owned and under long-term lease All data as of December 31 2017 plus the addition of Atlantic Sunrise Transco expansion to the natural gas transportation statistics DJ Basin acquisition and Four Corners assets sale of 2H 2018 not accounted for in statistics
Consistent strategy focused on natural gas volume growth
StorageMixed NaturalGas Liquids
FractionationFacilities
Gas Processing Plants(onshore and
Offshore)
Gathering(onshore and
Offshore)
Wellhead(onshore and
Offshore)
TransportationLines Rail and
Truck
OlefinsPlant
Olefins End Users
Natural Gas TransportationLines Storage
MultipleProducts
Industrial
Power Transport
ResidentialCommercial
Exports
Gas End Users
Other NGL End Users
224 Bcfd18670 miles
69 Bcfdinlet
383 Mbbld 317 Mbbld224 MMbbl
575 Mbbld
218 MMdthd capacity14530 miles
4copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Connecting the best supplies to thebest markets with advantaged infrastructure
Williamsrsquo US Asset MapNORTHEAST GampP Operating Area
ATLANTIC GULFOperating Area
WEST Operating Area
gt Extensive portfolio of reliable assets connecting sources of supply to demand markets
gt Stable cash flows and operational efficiencies driving results
gt Growth opportunities continue to reinforce long-term stability
gt Large-scale asset footprint in place gt Significant production growth driven
by infrastructure de-bottleneckinggt Capital efficient expansions linked
to existing assets
gt Irreplaceable infrastructure with low-risk revenue stream
gt Unmatched growth opportunity linked to existing assets
gt Unique footprint with access to low-cost supply sources and growing demand centers
5copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Industry leading board of directors focused on capital discipline and long-term growth
Alan ArmstrongInside Director
President and CEO Williams
Director since 2011
Stephen W BergstromIndependent Director
ChairmanFormer President and CEO general partner American
Midstream Partners GP LLCDirector since 2016
Nancy K BueseIndependent DirectorExecutive Vice President
and CFO Newmont
Mining CorporationDirector since 2018
Stephen I ChazenIndependent DirectorFormer President and
CEO Occidental Petroleum Corporation Director since 2016
Charles ldquoCaseyrdquo Cogut
Independent DirectorRetired Partner
Simpson Thacheramp Bartlett LLP
Director since 2016
Kathleen B CooperIndependent Director
President Cooper Strategies Intl LLC
Director since 2006
Michael A CreelIndependent Director
Former CEO Enterprise Products
Partners LPDirector since 2016
Vicki L FullerIndependent Director
Former Chief Investment Officer New York State Common
Retirement FundDirector since 2018
Peter A RagaussIndependent Director
Former Senior Vice President and CFO
Baker Hughes Incorporated
Director since 2016
Scott D SheffieldIndependent DirectorChairman and Former
CEO Pioneer Natural Resources
CompanyDirector since 2016
Murray D SmithIndependent Director
President Murray Smith and Associates former Minister of Energy for
Alberta CanadaDirector since 2012
William H SpenceIndependent DirectorChairman President and
CEO PPL Corporation
Director since 2016
Joseph H WilliamsHonorary Director
6copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Leadership team focused on driving toward sustainable long-term growth
Leadership amp Talent Development
gt Organization aligned around our focused strategy
gt Focusing resources on regulatory permitting and government affairs to increase project execution effectiveness
Alan ArmstrongPresident and Chief
Executive Officer
Micheal DunnExecutive Vice President
and Chief Operating Officer
Chad ZamarinSenior Vice President
Corporate Strategic Development
John ChandlerSenior Vice President and Chief Financial
Officer
T Lane WilsonSenior Vice President and General Counsel
Debbie CowanSenior Vice President
Chief Human Resources Officer
7copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
gt Strong safety reporting and continuous improvement culture
gt Robust Pipeline Integrity Management Program
gt Performing better than industry benchmark for Total Recordable Injury Rate (TRIR)
gt Goal of 15 reduction of process safety incidents 25 reduction since last year
gt Strong commitment to safety and operational discipline by 12 Life Critical Operating Requirements being institutionalized
gt Leading damage prevention and public awareness programs
gt Diverse and independent board comprised of industry leaders
gt Oversight on ESG issues from EHS Nominating and Governance Committees
gt Compensation aligned with business strategies including safety performance
gt Comprehensive Integrated Management System operationalizes EHS management with specific policies procedures and standards includes external and internal audits
gt Extensive environmental monitoring and measurement including emissions tracking and reporting
gt Signatory to INGAArsquos Methane Emissions Commitments to minimize methane emissions
gt Proud history of voluntary environmental conservation and restoration projects that exceed regulatory requirements
gt Committed to increased diversity
gt Dedicated to excellence in land use and landowner relationships
gt Stakeholder input resulting in more than 400 changes to Atlantic Sunrisersquos pipeline route
gt $107 million total charitable giving in last decade to more than 8000 organizations
Strong leadership commitment to sustainable business practices
SAFETY
GOVERNANCE
ENVIRONMENTAL
SOCIAL
8copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
2018gt International Association for Public Participationrsquos Core Values Award and
Project of the Year Award for Atlantic Sunrise projectgt Platts 2018 1 Midstream Company
2017gt Forbes US Best Large Employers ― 22gt SGA Environmental Excellence Award for Stewardship
2016gt Forbes Americarsquos Best Employersgt SGA Environmental Excellence Award for Stewardshipgt New York Landmarks Conservancy Lucy G Moses Award
2015gt Fortune Magazine 1 Most Admired US Energy Companygt Platts 2015 Global Energy Awards mdash Midstream Leader Awardgt ENR MidAtlantic Best Project mdash EnergyIndustrialgt SGA Environmental Excellence Award
A history of industry recognition
9copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Williamsrsquo regulated gas pipelines located in most densely populated areas of United States creating premier competitive advantage
Transco
Northwest Pipeline
Gulfstream
LegendPopulation per sq mile
50 or less
50-100100-200200-300300 or more
Source Data based off 2012 Census estimates
US Counties Color-coded by Population Density vs Williamsrsquo Regulated Natural Gas Pipelines
10copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0 100 200
Rockies
Mid-Con + Gulf Coast
Appalachia
Gas-Directed Risked Reserves by Region(Tcf)
Source Wood Mackenzie NACPAT 4Q 2018
Williamsrsquo Northeast GampP located in basin with largest recoverable gas reserves at the lowest cost
US Key Production Basins vs Williamsrsquo GampP Assets
LegendWilliamsrsquo Assets
Greater Green River
Powder River
Denver-JulesburgPiceance
Mid-Con + Gulf Coast
AnadarkoPermian
Eagle Ford
Barnett
Haynesville
Arkoma
89 lt$300MMBtu HH
78 lt$300 MMBtu HH
89 lt$300MMBtu HH
Appalachia
Rockies
0 4000 8000 12000
Rockies
Mid-Con + Gulf Coast
Appalachia
Gas-directed Remaining Locations by Region
73 lt$300 MMBtu HH
82 lt$300 MMBtu HH
84 lt$300 MMBtu HH
181
81
9
111K
55K
15K
11copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
DECEMBER 2018 $MMBTU BY FUEL SOURCE
Sources SampP Global Platts NYMEXNote Bar chart denotes MMBTU equivalent of quoted price data label denotes quoted price
Natural gas provides superior economic and environmental benefits vs other fuels driving investment in new demand
$0
$2
$4
$6
$8
$10
$12
Coal NYMEX Henry Hub NaturalGas
Mt Belvieu Ethane WTI Brent USGC NAPHTHA
$M
MBt
u
$336 MMBTU
36CPG
$202 MMBTU
$6100Bbl
$5216 Bbl
WTI to Henry Hub ratio 22X
$4720Bbl
Ethane FracSpread 12 CPG
12copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
NORTH AMERICAN NATURAL GAS DEMAND BY SECTOR (2012ndash2023)
Sources Wood Mackenzie 1H rsquo18 WMB Analytics Based off 90 utilization of announced North American ethane export capacity and North American ethylene plant capacity rsquo18-rsquo22
Robust domestic and global natural gas demand forecasts continue to rise reaching 120 Bcfd by 2023
0
15
30
45
60
75
90
105
120
135
2012 2017 2018 2023
Bcf
d
IndustrialPowerGeneration
Mexico Exports
TransportOther
ResidentialCommercial
LNG Exports
Demand Growth lsquo17-rsquo18 10
North American demand growth lsquo17-rsquo23 increased by 4 Bcfd from prior forecast
+~1045 Mbpd
of incremental ethane
represents ~29 Bcfd of natural gas
13copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0
5
10
15
20
25
30
35
40
45
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18 Cum
ulative Global D
emand G
rowth Since lsquo11
Oil
amp G
as P
rice
in M
MB
tu
Cumulative Global Demand for Nat Gas Cumulative Global Demand for Oil Henry Hub Forward Curve WTI Forward Curve
Sources SampP Global Platts Analytics for global demand outlook US Energy Information Administration for price history NYMEX for forward curves as of 1-4-19
Natural gas will continue to win global market share
Forecast
NATURAL GAS VS OIL DEMAND GROWTH (2011 TO 2027) HENRY HUB AND WTI PRICES (MMBTU)
14copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0
500
1000
1500
2000
2500
3000
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Tota
l Em
issi
on (M
MtC
O2)
Ele
ctric
Pow
er (b
illion
KW
h)
Coal Natural Gas Renewables Nuclear Petroleum Total Emissions (MMT CO2)
US ELECTRIC POWER GENERATION AND EMISSIONS 2007-2017
Note Renewables = hydroelectric wind amp solar power generation Source US Energy Information Administration
US natural gas market share increases over time for Power sector while coal use declines Contributes to a decline of CO2 emissions
Coal and petroleum power generation
decreased by 40 while natural gas power generation increased by 42
CO2emissions decline by
28
15copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Source US Energy Information Administration
Natural gas continues to be the preferred fuel type for new power generation projects in the United States followed by renewables
0 5000 10000 15000 20000
Other
Coal
Nuclear
Solar
Wind
Natural Gas
Nameplate Capacity (MW)
Power Generation Projects Under Construction by Fuel Type Fuel Type of
Choicegt Carbon intensity from the US power sector
fell by 14 since 2005 as natural gas displaced other fossil fuels in power generation
gt Natural-gas fired power generation accounts for over 50 of current power projects under construction
Partnering with Renewables
gt As states make strides toward renewable power it is vital for natural gas-fired generation to follow as a backup fuel to ensure grid reliability
gt Natural gas pipeline capacity is increasingly valuable as more capacity will be needed to support the intermittent nature of renewable power
Dark blue represents expected utilization
Full bar represents nameplate capacity
16copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Note Chart excludes Eastern Canada Alaska West Coast Barnett Gulf Coast conventional amp GOM production that amounts to a decline of 24 Bcfd through 2022 CV=Cotton Valley Source Wood Mackenzie 1H lsquo18
Supply from advantaged basins must grow to meet forecasted demand
0
5
10
15
20
25
30
35
40
45
Northeast Permian Mid-con WesternCanada
Eagle Ford Haynesville+ CV
Rockies San Juan
Gas DirectedOil-Directed
Bcfd
+148 Bcfd or 61
+53 Bcfdor 76 -01 Bcfd
or -1
+19 Bcfdor 33
+20 Bcfdor 46
+30 Bcfd or 35
+23 Bcfdor 15
NATURAL GAS FORECASTED PRODUCTION BY REGION amp WELL TYPE (2017ndash2022)
-05 Bcfdor -30
70 of NA Gas growth comes from
gas-directeddrilling
17copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
ResCom Industrial Power
TransportOther LNG Exports Net Mexican Exports
NORTH AMERICAN NATURAL GAS CUMULATIVE PRODUCTIONGROWTH 2017-2022 (IN BCFD)
NORTH AMERICAN NATURAL GAS CUMULATIVE DEMANDGROWTH 2017-2022 (IN BCFD)
Source Wood Mackenzie 1H lsquo18
Forecasted Northeast production growth alone could fuel domestic natural gas demand growth through 2022
0
5
10
15
20
25
30
Northeast Permian All Other
Northeast is 60 of all North American gas production growth through 2022
Exports
Domestic Demand
18copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
2nd wave of US LNG export projects expected to drive an additional +5 Bcfd of growth through 2027
LNG exportvolumes to grow by+11 Bcfd along
Transco statesthrough 2027
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
Sabine Pass Cove Point Corpus ChristiCameron Elba Island Freeport2nd Wave Gulf Coast Golden Pass WoodfibreLNG Canada Prior 1H 17 Forecast
Forecasted Monthly LNG Export Volumes
In MMcfd
Source Wood Mackenzie 1H lsquo18
Williamsrsquo Asset Map + Third-party Liquefaction Plants
19copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
43
27
2017
1413
1110
1008
0761
39414345474951535557596163
Bcf
d
TOP DRIVERS OF GLOBAL LNG DEMAND BY COUNTRY lsquo17- lsquo27
Source Wood Mackenzie LNG Tool 3Q lsquo18
Global LNG demand grows by 24 Bcfd through 2027 driven by Asia and Europe
Asia Europe Other
Global Market
Reaching 63 Bcfd
+24 Bcfd
Factors Driving GrowthChina amp Indiabull Developing economies pursuing clean
energy for growth amp fuel diversity Northwest Europebull LNG balances the market with flexible
dependable supplybull Upside potential from weather events amp
other price sensitive demand responsesSoutheast Asiabull Need for supplemental supplies to replace
maturing and declining indigenous resourcesbull Stronger growth prospects linked with better
than anticipated economic developmentsSoutheast Europebull LNG complements domestic amp pipeline
supply Japan South Korea amp Taiwanbull While solely dependent on LNG legacy
importers expected to have flat to declining demand due to relatively mature energy demand market
20copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Sources 1Wood Mackenzie LNG Tool 3Q lsquo18 and 1H lsquo18 LT 2Columbia SIPA Center on Global Energy Policy httpsenergypolicycolumbiaedu
Chinese LNG demand surpassed industry expectations in 2017 Growth outlook remains strong for 2018 and beyond
0
1
2
3
4
5
6
7
8
9
10
2016 2017 2018 2019 2020
Bcfd
China LNG Imports North America LNG Exports
2Factors Driving LNG Demand Growth in Chinabull Ambitious goals to improve air quality including
almost doubling the share of gas in Chinarsquos energy mix to 10 by 2020
bull Coal-to-gas switching to fight greenhouse gas emissions as natural gas emits nearly 60 less CO2 per kWh than coal in power generation
bull Progress in liberalizing natural gas to allow non-government parties to receive access to pipelines and LNG terminals
bull Short-term gas shortages due to peaked demand lack of storage capacity and overstretched LNG infrastructure with a 2017 average utilization rate of 105
bull Declines in piped gas supply from central Asia and insufficient domestic gas production unable to meet demand growth
1Chinese LNG Demand vs NA LNG Export Forecast2016-2020
21copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Williams best positioned to capitalize on significant opportunities to connect low-cost supplies to premier demand markets
+53 +32
Gulf CoastDemand
Mexican Exports
Permian Production
+21
+148
+22
+35
Northeast Demand
Southeast Demand
NortheastProduction
GC LNGExports
+69
Production and Demand Growth in Key Areas in Bcfd (2017-2022)
Williamsrsquo assets uniquely aligned with demand growth along the East Coast from Texas all the way to the Northeast
LNG Exports(Elba + Cove Point)
+11
Leveraging significant investments in Northeast and Transco to connect best supplies to the best markets
Note All other NA production amounts to 02 Bcfd of growth rsquo17 ndash rsquo22 and all other NA demand amounts to 16 Bcfd of growth lsquo17 ndash lsquo22
Source Wood Mackenzie 1H lsquo18
Majority of production growth in Northeast with significant growth also occurring in the Permian
22copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Attractive returns on visible growth capital focused on Transco and GampP projects in the Northeast West and AG Deepwater
gt West ndash DJ Processing Plants 200 MMcfd (Ft Lupton III)
gt Atlantic Gulf Deepwater ndashStampede
gt Northeast GampP ndashSusquehanna Gathering Expansion 700 MMcfd
gt Transco ndash Atlantic Sunrise 17 MMDthd
gt West ndash DJ Processing Plant 225 MMcfd (Keenesburg I)
gt West ndash Wamsutter ndash High Point Hansen Lake amp Echo Springs GampP Expansions
gt West ndash Niobrara ndash Jackalope Gathering amp Bucking Horse Processing 200 MMcfd
gt Northeast GampP ndash Rich Gas Growth Driving Oak Grove Expansions
gt Northeast GampP ndash Oak Grove II III 400 MMcfd amp Harrison Hub C3+ Pipeline
gt Northeast GampP ndash Bradford amp Utica Gathering Expansion
gt Atlantic Gulf Deepwater ndash Shell Appomattox ndash Norphlet Pipelinendash Mobile Bay Gas Plant Expansion
gt West ndash North Seattle Lateral Upgrade 159 MDthd
gt Transco ndash Rate Casegt Transco ndash Gulf Connector 475 MDthdgt Transco ndash St James Supply 162 MDthdgt Transco ndash Rivervale S to Market 190 Mdthd
gt West ndash DJ Processing Plant 225 MMcfd (Keenesburg II)
gt Northeast GampP ndashSusquehanna Gathering Expansion 800 MMcfd
gt Atlantic Gulf Deepwater ndashBuckskin
gt Transco ndash Hillabee Phase 2 206 MDthd
gt Transco ndash Southeastern Trail 296 MDthd
gt West ndash DJ Processing Plants 225 MMcfd (Milton I)
gt Transco ndash Gateway 65 MDthd
gt Transco ndash Northeast Supply Enhancement 400 MDthd
gt Transco ndash Leidy South 580 MDthd
gt West ndash DJ Processing Plants 225 MMcfd (Milton II)
gt Northeast GampP ndash Oak Grove IV 200 MMcfd
gt Atlantic Gulf DeepwaterndashAdditional Tie-backs Shell Whale Ballymore Tigris Mexico Perdido amp others
gt Transco ndash Pursuing 20+ expansion opportunities including ldquoProject 1rdquo from Analyst Day
gt Gulfstream Phase VI Expansion
SUPP
LY D
RIV
END
EMA
ND
DR
IVEN
Black = In Progress Blue = PotentialUnder Negotiation
2018 2019 2020 2021 2022+
23copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
(1) Consolidated revenue will be reduced by lease payment of ~$8 millionmonth to partners
Atlantic Sunrise Largest expansion project in Transco history placed in service October 6th delivers significant EBITDA growth
gt Significant revenue contribution to Transco
ndash $35 millionmonth(1) in consolidated fee-based revenue
gt Northeast gas prices quickly respond to incremental takeaway capacity
ndash NE Gas prices rose from ~$120 to ~$270 the day Atlantic Sunrise was placed in service
gt Northeast GampP gathered volume and EBITDA uplift expected
ndash Price response supportive of producer activity in the NE PA Susquehanna
ndash 15 gathering volume growth CAGR expected 2018-2021
ndash EBITDA to grow at a higher rate due to improved operating margins
Atlantic Sunrise17 MMDthd
Williamsrsquo US Asset Map Highlighting Transcorsquos Atlantic Sunrise Expansion Project PA
NY
WV
OH
NJ
$050
$100
$150
$200
$250
$300
$350
$M
MB
tu
Northeast Gas PricesTetco M-2 TGP Z-4 300 Leg Transco Leidy
Atlantic SunriseIn Service Oct 6
24copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Transco 2018 rate case protects adequate return on base system
gt Rate filed August 31 2018ndash ~$270MM annual revenue increase
bull Based on 16 ROE as prescribed by FERC methodology every 1 change in ROE is worth ~$30MM in Revenue
bull Subject to negotiation with shippers ndash Proposed 5-year $12B modernization and emission reduction investment
programndash Rate increase and proposed modernization program incremental to 2019
guidancegt Increased rates expected to be effective March 2019
RATE CASE TIMELINE
gt Lower corporate tax rate reduces income tax allowancegt Factors driving higher cost of service
ndash Higher expense in recent years to be incorporated into rate casendash Maintenance capital and modernization spending to be reflected in rate base
gt By 2019 approximately 55 of fee revenues from negotiated ratesndash Negotiated rate contracts remain unaffected by rate case and income tax changes
RATE CASE CONSIDERATIONS
VIRGINIA SOUTHSIDE II CONSTRUCTIONTransco Pipeline Southern Virginia
25copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Transco Project 2 sanctioned Leidy South ndash Providing access to new Northeast supplies
gt Extends Transcorsquos reach
gt Greater than 1000 MDthd of firm transport capacity in Zones 3 4 5 and 6
gt Attractive returns consistent with recent Transco expansions
gt 580 MDthd expansion in Pennsylvania from receipt points on Transcorsquos Leidy system to Zone 6 markets
gt Target in-service date 4Q 2021
gt Target capital cost $450-$550 million
gt 100 long-term take-or-pay contracts providing attractive returns consistent with Transcorsquos 2018-2021 expansion project profile of ~64x
gt Provides transportation outlet for producers and supports incremental gathering volume for Williamsrsquo Northeast PA gathering system
Two examples of Transcorsquos
20+ expansion
opportunities
US Map of Williamsrsquo Assets Highlighting Transco Pipeline PROJECT 1
LEIDY SOUTH (PROJECT 2)
26copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
(1) Includes Gulf Trace Hillabee (Ph 1) Dalton NY Bay Expansion Virginia Southside II Garden State I(2) Includes Garden State II Atlantic Sunrise Gulf Connector St James Supply Rivervale South to Market NE Supply Enhancement Hillabee (Ph 2) Gateway Southeastern Trail Leidy South
Transco Unprecedented growth demonstrates competitive advantageTRANSCO CONTRACTED CAPACITYAND FEE-BASED REVENUE
85 86 89 100 101
106 106
120 122
150
169177
180
193
$750
$1000
$1250
$1500
$1750
$2000
$2250
$2500
$2750
6
8
10
12
14
16
18
20
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Fee
Bas
ed R
even
ue $
Mill
ions
Con
trac
t Cap
acity
MM
Dtd
Year-end Contracted Capacity Forecasted Year-end Contracted Capacity Fee Revenue ($ MM) Forecast Fee Rev
2017(1) 2018 ndash2021(2)
Growth Capital Placed In-service ($ Bln) ~$14 ~$52
Full-year run-rate Modified EBITDA ($ Bln) ~$024 ~$084
EBITDA multiple ~58x ~63x
Attractive Returns on Growth Projects
27copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
(1) Gathering and processing statistics for Utica Supply Hub do not include Blue Racer (2) Non-operated joint venture (3) Primarily Cost-of-service based contracts
Northeast GampP Large footprint with foundational assets in place
gt 13 Bcfd of gathering capacity in dryrich gas
gt 800 MMcfd of processing capacity
gt 135000 bpd fractionation capacity
UTICA SUPPLY HUB(1)
gt Cardinal Gathering(3)
gt Flint Gatheringgt Utica East Ohio (UEO)(2)
BLUE RACER MIDSTREAM(2)
BRADFORD SUPPLY HUB(3)
SUSQUEHANNA SUPPLY HUB
gt 32 Bcfd of gathering capacity in dry gas
gt 570 miles of gathering pipeline in dryrich gas
gt 800 MMcfd of processing capacity
gt 123000 bpd fractionation capacity
gt 151 miles of NGL and condensate transport
gt 36 Bcfd of gathering capacity in dry gas
gt 15 Bcfd of gathering capacity in dryrich gas
gt 700+ MMcfd processing capacity
gt 120000+ bpd fractionation and de-ethanization capacity
OHIO RIVER SUPPLY HUB
gt Ohio Valley Midstreamgt Laurel Mtn Midstreamgt Marcellus South
PA
28copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0
1
2
3
4
5
6
7
8
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2013 2014 2015 2016 2017 2018
Bcf
d
Dry Gas Wet GasLegend
Northeast GampP Substantial growth expected from incremental takeaway capacity and new expansion projects to relieve constraints
Notes Partially owned system volumes are shown at 100 Excludes volumes for all non-operated assets
NORTHEAST GATHERING VOLUME GROWTH THROUGH 3Q 2018 AVERAGE GATHERED VOLUMES (BCFD)
15 GATHERED VOLUME
CAGR EXPECTED
2018-2021
29copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Gulf of Mexico Substantial discoveries in close proximity to existing assets expected to facilitate long-term growth
Gulf East
7 tiebacks contracted expecting morebull Shell Appomattox dedication Norphlet pipeline option
minus Producer expected reserves 650 MMboeminus Producer expected peak production 175 Mboedminus Target in-service date Mid 2019
bull Opportunities include ChevronTotal Ballymore discovery 3 miles from Blind Faithminus Largest discovery by Total in the GOM with more than 670 ft of net oil pay
Discovery
gt1 TCF of gas discoveries within reach of KCCbull Buckskin Stampede dedications
minus Combined additional reserves 66 Bcfminus Stampede online May 2018 Buckskin target in-service date 2H 2019
bull Opportunities include discoveries at Anchor Shenandoah and Katmai
Gulf West
Only existing Oil amp Gas pipelines near active Western Gulf explorationbull Opportunities include Shell Whale (15 miles from existing pipelines)
Tigris and Mexico Perdido discoveriesminus Shell Whale One of Shellrsquos largest finds in the GOM in the past decade
with over 1400 feet of oil pay
Gas GatheringOil GatheringNorphlet PipelineDeepwater SparGrowth ProjectsMexico Deepwater Basin
Sources Chevron 1302018 Ballymore Press Release Total 1312018 Ballymore Press Release Shell 1312018 Whale Press Release
TXLA
MS
BALLYMORE
NORPHLETPIPELINE
TIGRIS
BUCKSKIN
ANCHOR
APPOMATTOX
WHALE
ALFL
30copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Pro-forma Four Corners sale and DJ Basin acquisition Fee-based business structure reinforces stability in cash flows
gt Reduced commodity exposure with sale of Four Corners Area assets
(1) Includes our proportional ownership of the gross margin of our equity method investments Excludes certain regulated revenues which are related to tracked operating costs(2) MVC revenue includes revenue level guaranteed by MVC and excludes any revenue on volumes exceeding MVC MVC revenue also includes amortization of upfront payments associated with canceled MVCs
~97 of 2019 Gross Margin from Fee-based Sources2019 Gross Margin(1)
gt Fully contracted demand charge revenuegt Attractive positions exposed to growth
gt Mix of capacity payments MVCs(2) and Cost of Service agreements
gt Volume-driven fee-based contracts for gathering processing or other non-regulated services
gt Some contracts include escalation provisions
36 Volume-driven Non-regulated Fee-based Revenue
38 Regulated Gas PipelineFee-based Revenue
3 NGL and Other Commodity Exposure
23 Volume-protected Non-regulated Fee-based Revenue
36
3
38
23
31copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Moved to investment grade on significant credit metric improvementIndustry leading dividend coverage funding growth capital forecast gt$44 billion of asset sales from 2016-2018
significantly reducing our direct commodity exposure Jan lsquo17 repositioning and deleveraging transactions Streamlining the organization and aggressively
managing costs
$39
$26
$00
$05
$10
$15
$20
$25
$30
$35
$40
2018 2019
GrowthCapex
GrowthCapex
$1045 $125
Excess Cash Available After Dividends
($ in billions)
Excess Cash Available After Dividends
Note This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP comparable financial measures are included at the back of this presentation(1) 2015-2019 Debt Adjusted EBITDA ratios presented here does not represent leverage ratios measured for WMB credit agreement compliance or leverage ratios as calculated by the major credit ratings agencies
$1302Cash from sale of
Four Corners Area assets and Gulf Coast Pipelines
597x
530x
462x
~500x
lt475x
2500
3000
3500
4000
4500
5000
5500
300x
350x
400x
450x
500x
550x
600x
650x
2015 2016 2017 2018 2019
Adjusted EB
ITDA
($ Millions)
Deb
t A
djus
ted
EBIT
DA
WMB DebtAdjusted EBITDAAdjusted EBITDA ($MM)
WMB 2018 DebtAdjusted EBITDA proforma for full year Atlantic Sunrise revenue contributions
GUIDANCE
(1)
Long-term Target
lt42x Book Debt Adjusted EBITDA
(1)
No equity issuance required to fund forecasted growth capital
Excess cash available after dividends and asset sales to be used to partially fund growth capex
Capital discipline focused on ROCE
32copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
$063
$076 $077
$082$089
$101
$020
$030
$040
$050
$060
$070
$080
$090
$100
$110
2017 2018 Guidance Ranges 2019 Guidance Ranges
Williams Adjusted EPS 2017-2019
Steady and predictable growth despite assets sales and commodity price volatility
$Sh
are
Note This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP financial measures is included at the back of this presentation
Assets sales of over $34B
Geismar in rsquo17 Four Corners amp Gulf Pipes in lsquo18
(Note ~$2B in book gains are removed from Adjusted EPS)
LowMidpoint
MidpointHigh
HighWe expect 2018 to be in the upper half of our guidance
range ($076 to $082)
33copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Strong stable and growing 2018 and 2019 key guidance metrics
2018 GUIDANCE 1 2019 GUIDANCE
Net Income $0975 - $1175 Bn $1050 - $1350 Bn
Adjusted EBITDA $4450 - $4650 Bn $4850 - $5150 Bn
Distributable CashFlow (DCF) $2600 - $2900 Bn $2900 - $3300 Bn
Expected DividendGrowth Rate
10-15 annual growth(annual dividend increases)
10-15 annual growth(annual dividend increases)
DividendCoverage Ratio
~16xMidpoint of Guidance
~17xMidpoint of Guidance
Growth Capex $39 Bn $26 Bn
Consolidated Debt Adjusted EBITDA 2 ~ 50 x lt 475x
Note This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP comparable financial measures are included at the back of this presentationWilliams does not expect to be a US Federal cash income taxpayer through at least 2024 excluding taxes on any potential asset monetizations
1 DCF shown Proforma as if the WPZ transaction had occurred 1118 Dividend payments used in the coverage calculation include WPZ distribution payments to WPZ public unitholders for 1Q and 2Q 2 Consolidated Debt Adjusted EBITDA ratio does not represent leverage ratios measured for either WMB or WPZ credit agreement compliance or leverage ratios as calculated by the major credit ratings agencies
34copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
WMBMedian
SampP 500
WMB vs SampP 500
Approximate Current Dividend Yield(2)
58 22 1636
Adjusted EPSCAGR(2)
(2017-2019)189 136 390
Adjusted EBITDA Growth(2)
(2018-2019)99 71 394
Dividend Growth(2)
(2018-2019)125 67 866
(1) Per SampP Capital IQ Williamsrsquo adjusted EBITDA exceeded or was within 2 of the consensus estimate for EBITDA in each quarter 1Q 2016ndash3Q 2018(2) Data and estimates as of January 4 2018 Median SampP 500 2017-2019 growth rates based on Bloomberg consensus estimates WMB 2018-2019 growth rates based on midpoint of guidance (3) Represents peer average EV NTM EBITDA multiple from January 1 2013 to current peers include ENB EPD ET KMI OKE TRGP and TRPNote This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP comparable financial measures are included at the back of this presentation
Williams is a unique large-scale low-volatility growing natural gas infrastructure company with strong investor upside
gt Volume-driven natural gas strategy drives low volatility in earnings and cash flowgt Advantaged and irreplaceable asset base handling 30 of US low-cost natural gas suppliesgt Large-scale energy company ~$52 billion enterprise value with Investment Grade credit
ratingsgt 2019 gross margin projected to be ~97 fee-based gt Met or exceeded Adjusted EBITDA street consensus each of the last 11 quarters(1)
gt Exceeded midpoint for 2017 key guidance metrics 2018 trending toward high end of rangegt ~$125 billion excess cash available after dividends in 2019
STABILITY
gt Nationrsquos largest and fastest growing interstate natural gas pipeline system Transco with unrivaled proximity to growing Mid-Atlantic Southeast and Gulf Coast demand centers
gt 15 Northeast GampP gathered volume CAGR expected 2018-2021
gt 189 Adjusted EPS growth CAGR expected 2017-2019 despite $34B in asset sales
gt 10 Adjusted EBITDA growth 2018-2019 expecting 5-7 annual Adjusted EBITDA growth longer term beyond 2019
GROWTH
gt Attractive current dividend yield of 58(2) with strong coverage
gt 104x EV 2019 EBITDA multiple(2) below long-term historical average of 128x(3)
gt Long-term historical 128x multiple(3) implies a $34 stock price which aligns with sell-side consensus target price providing for 44 upside to current price(2)
VALUATION
35copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward Looking Statements
36copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward-looking statements
FORWARD-LOOKING STATEMENTS
gt 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 ldquoforward-looking statementsrdquo within the meaning of Section 27A of the Securities Act of 1933 as amended (Securities Act) and Section 21E of the Securities Exchange Act of 1934 as amended (Exchange Act) These forward-looking statements relate to anticipated financial performance managementrsquos plans and objectives for future operations business prospects outcome of regulatory proceedings market conditions and other matters We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995 All statements other than statements of historical facts included herein that address activities events or developments that we expect believe or anticipate will exist or may occur in the future are forward-looking statements Forward-looking statements can be identified by various forms of words such as ldquoanticipatesrdquo ldquobelievesrdquo ldquoseeksrdquo ldquocouldrdquo ldquomayrdquo ldquoshouldrdquo ldquocontinuesrdquo ldquoestimatesrdquo ldquoexpectsrdquo ldquoforecastsrdquo ldquointendsrdquo ldquomightrdquo ldquogoalsrdquo ldquoobjectivesrdquo ldquotargetsrdquo ldquoplannedrdquo ldquopotentialrdquo ldquoprojectsrdquo ldquoscheduledrdquo ldquowillrdquo ldquoassumesrdquo ldquoguidancerdquo ldquooutlookrdquo ldquoin-service daterdquo or other similar expressions These forward-looking statements are based on managementrsquos beliefs and assumptions and on information currently available to management and may include among others statements regardingndash Levels of dividends to Williams stockholders
ndash Future credit ratings of Williams and its affiliates
ndash Amounts and nature of future capital expenditures
ndash Expansion and growth of our business and operations
ndash Expected in-service dates for capital projects
ndash Financial condition and liquidity
ndash Business strategy
ndash Cash flow from operations or results of operations
ndash Seasonality of certain business components
ndash Natural gas and natural gas liquids prices supply and demand
ndash Demand for our services
37copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward-looking statements (contrsquod)
FORWARD-LOOKING STATEMENTS
gt 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 herein Many of the factors that will determine these results are beyond our ability to control or predict Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include among others the followingndash Whether we are able to pay current and expected levels of dividends
ndash Whether we will be able to effectively execute our financing plan
ndash Availability of supplies market demand and volatility of prices
ndash Inflation interest rates and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers)
ndash The strength and financial resources of our competitors and the effects of competition
ndash Whether we are able to successfully identify evaluate and timely execute our capital projects and other investment opportunities
ndash Our ability to acquire new businesses and assets and successfully integrate those operations and assets into existing businesses as well as successfully expand our facilities and to consummate asset sales on acceptable terms
ndash Development and rate of adoption of alternative energy sources
ndash The impact of operational and developmental hazards and unforeseen interruptions
ndash The impact of existing and future laws and regulations (including but not limited to the Tax Cuts and Jobs Act of 2017) the regulatory environment environmental liabilities and litigation as well as our ability to obtain necessary permits and approvals and achieve favorable rate proceeding outcomes
ndash Our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans
ndash Changes in maintenance and construction costs
ndash Changes in the current geopolitical situation
ndash Our exposure to the credit risk of our customers and counterparties
ndash Risks related to financing including restrictions stemming from debt agreements future changes in credit ratings as determined by nationally-recognized credit rating agencies and the availability and cost of capital
ndash The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate
38copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward-looking statements (contrsquod)
FORWARD-LOOKING STATEMENTS
ndash Risks associated with weather and natural phenomena including climate conditions and physical damage to our facilities
ndash Acts of terrorism cybersecurity incidents and related disruptions
ndash Additional risks described in our filings with the Securities and Exchange Commission (SEC)
gt Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement we caution investors not to unduly rely on our forward-looking statements We disclaim any obligations to and do not intend to update the above list or announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments
gt In addition to causing our actual results to differ the factors listed above may cause our intentions to change from those statements of intention set forth herein Such changes in our intentions may also cause our results to differ We may change our intentions at any time and without notice based upon changes in such factors our assumptions or otherwise
gt Because forward-looking statements involve risks and uncertainties we caution that there are important factors in addition to those listed above that may cause actual results to differ materially from those contained in the forward-looking statements For a detailed discussion of those factors see Part I Item 1A Risk Factors in our Annual Report on Form 10-K filed with the SEC on February 22 2018 and in Part II Item 1A Risk Factors in our Quarterly Reports on Form 10-Q
39copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Non-GAAP Reconciliations
40copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Non-GAAP Disclaimer
NON-GAAP RECONCILIATIONS
gt This presentation may include certain financial measures ndash adjusted EBITDA adjusted income (ldquoearningsrdquo) adjusted earnings per share distributable cash flow and dividend coverage ratio ndash that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission
gt Our segment performance measure modified EBITDA is defined as net income (loss) before income (loss) from discontinued operations income tax expense net interest expense equity earnings from equity-method investments other net investing income remeasurement gain on equity-method investment impairment of equity investments and goodwill depreciation and amortization expense and accretion expense associated with asset retirement obligations for nonregulated operations We also add our proportional ownership share (based on ownership interest) of modified EBITDA of equity-method investments
gt Adjusted EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations Management believes this measure provides investors meaningful insight into results from ongoing operations
gt Distributable cash flow is defined as adjusted EBITDA less maintenance capital expenditures cash portion of net interest expense income attributable to noncontrolling interests and cash income taxes and certain other adjustments that management believes affects the comparability of results Adjustments for maintenance capital expenditures and cash portion of interest expense include our proportionate share of these items of our equity-method investments We also calculate the ratio of distributable cash flow to the total cash dividends paid (dividend coverage ratio) This measure reflects Williamsrsquo distributable cash flow relative to its actual cash dividends paid
gt This presentation is accompanied by a reconciliation of these non-GAAP financial measures to their nearest GAAP financial measures Management uses these financial measures because they are accepted financial indicators used by investors to compare company performance In addition management believes that these measures provide investors an enhanced perspective of the operating performance of assets and the cash that the business is generating
gt Neither adjusted EBITDA adjusted income nor distributable cash flow are intended to represent cash flows for the period nor are they presented as an alternative to net income or cash flow from operations They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles
41copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Reconciliation of Income (Loss) Attributable to The Williams Companies Inc to Adjusted Income
NON-GAAP RECONCILIATIONS
2017 2018(Dollars in millions except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr Year
Income (loss) attributable to The Williams Companies Inc available to common stockholders $ 373 $ 81 $ 33 $ 1687 $ 2174 $ 152 $ 135 $ 129 $ 416
Income (loss) - diluted earnings (loss) per common share $ 45 $ 10 $ 04 $ 203 $ 262 $ 18 $ 16 $ 13 $ 46Adjustments
Northeast GampPShare of impairment at equity-method investments $ mdash $ mdash $ 1 $ mdash $ 1 $ mdash $ mdash $ mdash $ mdashImpairment of certain assets mdash mdash 121 mdash 121 mdash mdash mdash mdashAd valorem obligation timing adjustment mdash mdash 7 mdash 7 mdash mdash mdash mdashSettlement charge from pension early payout program mdash mdash mdash 7 7 mdash mdash mdash mdashOrganizational realignment-related costs 1 1 2 mdash 4 mdash mdash mdash mdashTotal Northeast GampP adjustments 1 1 131 7 140 mdash mdash mdash mdash
Atlantic-GulfConstitution Pipeline project development costs 2 6 4 4 16 2 1 1 4Settlement charge from pension early payout program mdash mdash mdash 15 15 mdash mdash mdash mdashRegulatory adjustments resulting from Tax Reform mdash mdash mdash 493 493 11 (20) mdash (9)Benefit of regulatory asset associated with increase in Transcorsquos estimated deferred
state income tax rate following WPZ Merger mdash mdash mdash mdash mdash mdash mdash (3) (3)
Share of regulatory charges resulting from Tax Reform for equity-method investments mdash mdash mdash 11 11 2 mdash mdash 2
Organizational realignment-related costs 1 2 2 1 6 mdash mdash mdash mdash(Gain) loss on asset retirement mdash mdash (5) 5 mdash mdash mdash (10) (10)Total Atlantic-Gulf adjustments 3 8 1 529 541 15 (19) (12) (16)
WestEstimated minimum volume commitments 15 15 18 (48) mdash mdash mdash mdash mdashImpairment of certain assets mdash mdash 1021 9 1030 mdash mdash mdash mdashSettlement charge from pension early payout program mdash mdash mdash 13 13 mdash mdash mdash mdashOrganizational realignment-related costs 2 3 2 1 8 mdash mdash mdash mdashRegulatory adjustments resulting from Tax Reform mdash mdash mdash 220 220 (7) mdash (7)
Charge for regulatory liability associated with the decrease in Northwest Pipelinersquos estimated deferred state income tax rates following WPZ Merger mdash mdash mdash mdash mdash mdash mdash 12 12
Gains from contract settlements and terminations (13) (2) mdash mdash (15) mdash mdash mdash mdashTotal West adjustments 4 16 1041 195 1256 (7) mdash 12 5
42copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Reconciliation of Income (Loss) Attributable to The Williams Companies Inc to Adjusted Income (conrsquot)
NON-GAAP RECONCILIATIONS
2017 2018(Dollars in millions except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr Year
Other(Gain) loss related to Canada disposition (2) (1) 4 5 6 mdash mdash mdash mdashExpenses associated with strategic asset monetizations 1 4 mdash mdash 5 mdash mdash mdash mdashGeismar Incident adjustments (9) 2 8 (1) mdash mdash mdash mdash mdashGain on sale of Geismar Interest mdash mdash (1095) mdash (1095) mdash mdash mdash mdashGain on sale of RGP Splitter mdash (12) mdash mdash (12) mdash mdash mdash mdashAccrual for loss contingency 9 mdash mdash mdash 9 mdash mdash mdash mdashSeverance and related costs 9 4 5 4 22 mdash mdash mdash mdashACMP Merger and transition costs mdash 4 3 4 11 mdash mdash mdash mdashExpenses associated with Financial Repositioning 8 2 mdash mdash 10 mdash mdash mdash mdash(Gain) loss on early retirement of debt (30) mdash 3 mdash (27) 7 mdash mdash 7Impairment of certain assets mdash 23 68 mdash 91 mdash 66 mdash 66Expenses associated with strategic alternatives 1 3 5 mdash 9 mdash mdash mdash mdashSettlement charge from pension early payout program mdash mdash mdash 36 36 mdash mdash mdash mdashRegulatory adjustments resulting from Tax Reform mdash mdash mdash 63 63 mdash 1 mdash 1Benefit of regulatory assets associated with increase in Transcorsquos estimated deferred state income
tax rate following WPZ Merger mdash mdash mdash mdash mdash mdash mdash (45) (45)WPZ Merger costs mdash mdash mdash mdash mdash mdash 4 15 19Charitable contribution of preferred stock to Williams Foundation mdash mdash mdash mdash mdash mdash mdash 35 35Total Other adjustments (13) 29 (999) 111 (872) 7 71 5 83
Adjustments included in Modified EBITDA (5) 54 174 842 1065 15 52 5 72
Adjustments below Modified EBITDAGain on disposition of equity-method investment (269) mdash mdash mdash (269) mdash mdash mdash mdashAccelerated depreciation by equity-method investments mdash mdash mdash 9 9 mdash mdash mdash mdashChange in depreciable life associated with organizational realignment (7) mdash mdash mdash (7) mdash mdash mdash mdashGain on deconsolidation of Jackalope interest mdash mdash mdash mdash mdash mdash (62) mdash (62)Allocation of adjustments to noncontrolling interests 77 (10) (28) (199) (160) (5) 21 mdash 16
(199) (10) (28) (190) (427) (5) (41) mdash (46)Total adjustments (204) 44 146 652 638 10 11 5 26Less tax effect for above items 77 (17) (55) (246) (241) (3) (3) (1) (7)Adjustments for tax-related items (1) (127) mdash mdash (1923) (2050) mdash mdash 110 110
Adjusted income available to common stockholders $ 119 $ 108 $ 124 $ 170 $ 521 $ 159 $ 143 $ 243 $ 545Adjusted diluted earnings per common share (2) $ 14 $ 13 $ 15 $ 20 $ 63 $ 19 $ 17 $ 24 $ 61Weighted-average shares - diluted (thousands) 826476 828575 829368 829607 828518 830197 830107 1026504 896322
(1) The first quarter of 2017 includes an unfavorable adjustment related to the release of a valuation allowance The fourth quarter of 2017 includes an unfavorable adjustment to reverse the tax benefit associated with remeasuring our deferred tax balances at a lower corporate rate resulting from Tax Reform The third quarter of 2018 reflects tax adjustments driven by the WPZ Merger primarily a valuation allowance for foreign tax credits
(2) The sum of earnings per share for the quarters may not equal the total earnings per share for the year due to changes in the weighted-average number of common shares outstanding
43copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Reconciliation of Income (Loss) Attributable to The Williams Companies Inc to Adjusted Income (conrsquot)
NON-GAAP RECONCILIATIONS
Midpt High Low Midpt High(Dol lars in mi l l ions except per-share amounts )
Net income (loss) $1385 $1460 $1050 $1200 $1350Less Net income (loss) attributable to noncontrolling interests 325 345 115 115 115Net income (loss) attributable to The Williams Companies Inc 1060 1115 935 1085 1235
Adjustments 1Adjustments included in Modified EBITDA 2 (521) (521) - - - Adjustments below Modified EBITDA (62) (62) - - - Allocation of adjustments to noncontrolling interests 16 16 - - - Total adjustments (567) (567) - - - Less tax effect for above items 141 141 - - -
Adjustments for tax-related items 3 110 110 - - -
Adjusted income available to common stockholders $744 $799 $935 $1085 $1235
Adjusted diluted earnings per common share $076 $082 $077 $089 $101
Weighted-average shares - diluted (millions) 976 976 1217 1217 1217
Note Reconci l iation shown with acquis i tion of WPZ completed on August 10 2018
(1) A deta i led l i s t of adjustments i s included in this presentation
(2) Primari ly a $593 mi l l ion ga in on the sa le of Four Corners assets(3) Reflects tax adjustments driven by the WPZ Merger primari ly a va luation a l lowance for foreign tax credi ts
2 0 1 8G U I D A N C E R A N G E S
2 0 1 9
4copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Connecting the best supplies to thebest markets with advantaged infrastructure
Williamsrsquo US Asset MapNORTHEAST GampP Operating Area
ATLANTIC GULFOperating Area
WEST Operating Area
gt Extensive portfolio of reliable assets connecting sources of supply to demand markets
gt Stable cash flows and operational efficiencies driving results
gt Growth opportunities continue to reinforce long-term stability
gt Large-scale asset footprint in place gt Significant production growth driven
by infrastructure de-bottleneckinggt Capital efficient expansions linked
to existing assets
gt Irreplaceable infrastructure with low-risk revenue stream
gt Unmatched growth opportunity linked to existing assets
gt Unique footprint with access to low-cost supply sources and growing demand centers
5copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Industry leading board of directors focused on capital discipline and long-term growth
Alan ArmstrongInside Director
President and CEO Williams
Director since 2011
Stephen W BergstromIndependent Director
ChairmanFormer President and CEO general partner American
Midstream Partners GP LLCDirector since 2016
Nancy K BueseIndependent DirectorExecutive Vice President
and CFO Newmont
Mining CorporationDirector since 2018
Stephen I ChazenIndependent DirectorFormer President and
CEO Occidental Petroleum Corporation Director since 2016
Charles ldquoCaseyrdquo Cogut
Independent DirectorRetired Partner
Simpson Thacheramp Bartlett LLP
Director since 2016
Kathleen B CooperIndependent Director
President Cooper Strategies Intl LLC
Director since 2006
Michael A CreelIndependent Director
Former CEO Enterprise Products
Partners LPDirector since 2016
Vicki L FullerIndependent Director
Former Chief Investment Officer New York State Common
Retirement FundDirector since 2018
Peter A RagaussIndependent Director
Former Senior Vice President and CFO
Baker Hughes Incorporated
Director since 2016
Scott D SheffieldIndependent DirectorChairman and Former
CEO Pioneer Natural Resources
CompanyDirector since 2016
Murray D SmithIndependent Director
President Murray Smith and Associates former Minister of Energy for
Alberta CanadaDirector since 2012
William H SpenceIndependent DirectorChairman President and
CEO PPL Corporation
Director since 2016
Joseph H WilliamsHonorary Director
6copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Leadership team focused on driving toward sustainable long-term growth
Leadership amp Talent Development
gt Organization aligned around our focused strategy
gt Focusing resources on regulatory permitting and government affairs to increase project execution effectiveness
Alan ArmstrongPresident and Chief
Executive Officer
Micheal DunnExecutive Vice President
and Chief Operating Officer
Chad ZamarinSenior Vice President
Corporate Strategic Development
John ChandlerSenior Vice President and Chief Financial
Officer
T Lane WilsonSenior Vice President and General Counsel
Debbie CowanSenior Vice President
Chief Human Resources Officer
7copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
gt Strong safety reporting and continuous improvement culture
gt Robust Pipeline Integrity Management Program
gt Performing better than industry benchmark for Total Recordable Injury Rate (TRIR)
gt Goal of 15 reduction of process safety incidents 25 reduction since last year
gt Strong commitment to safety and operational discipline by 12 Life Critical Operating Requirements being institutionalized
gt Leading damage prevention and public awareness programs
gt Diverse and independent board comprised of industry leaders
gt Oversight on ESG issues from EHS Nominating and Governance Committees
gt Compensation aligned with business strategies including safety performance
gt Comprehensive Integrated Management System operationalizes EHS management with specific policies procedures and standards includes external and internal audits
gt Extensive environmental monitoring and measurement including emissions tracking and reporting
gt Signatory to INGAArsquos Methane Emissions Commitments to minimize methane emissions
gt Proud history of voluntary environmental conservation and restoration projects that exceed regulatory requirements
gt Committed to increased diversity
gt Dedicated to excellence in land use and landowner relationships
gt Stakeholder input resulting in more than 400 changes to Atlantic Sunrisersquos pipeline route
gt $107 million total charitable giving in last decade to more than 8000 organizations
Strong leadership commitment to sustainable business practices
SAFETY
GOVERNANCE
ENVIRONMENTAL
SOCIAL
8copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
2018gt International Association for Public Participationrsquos Core Values Award and
Project of the Year Award for Atlantic Sunrise projectgt Platts 2018 1 Midstream Company
2017gt Forbes US Best Large Employers ― 22gt SGA Environmental Excellence Award for Stewardship
2016gt Forbes Americarsquos Best Employersgt SGA Environmental Excellence Award for Stewardshipgt New York Landmarks Conservancy Lucy G Moses Award
2015gt Fortune Magazine 1 Most Admired US Energy Companygt Platts 2015 Global Energy Awards mdash Midstream Leader Awardgt ENR MidAtlantic Best Project mdash EnergyIndustrialgt SGA Environmental Excellence Award
A history of industry recognition
9copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Williamsrsquo regulated gas pipelines located in most densely populated areas of United States creating premier competitive advantage
Transco
Northwest Pipeline
Gulfstream
LegendPopulation per sq mile
50 or less
50-100100-200200-300300 or more
Source Data based off 2012 Census estimates
US Counties Color-coded by Population Density vs Williamsrsquo Regulated Natural Gas Pipelines
10copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0 100 200
Rockies
Mid-Con + Gulf Coast
Appalachia
Gas-Directed Risked Reserves by Region(Tcf)
Source Wood Mackenzie NACPAT 4Q 2018
Williamsrsquo Northeast GampP located in basin with largest recoverable gas reserves at the lowest cost
US Key Production Basins vs Williamsrsquo GampP Assets
LegendWilliamsrsquo Assets
Greater Green River
Powder River
Denver-JulesburgPiceance
Mid-Con + Gulf Coast
AnadarkoPermian
Eagle Ford
Barnett
Haynesville
Arkoma
89 lt$300MMBtu HH
78 lt$300 MMBtu HH
89 lt$300MMBtu HH
Appalachia
Rockies
0 4000 8000 12000
Rockies
Mid-Con + Gulf Coast
Appalachia
Gas-directed Remaining Locations by Region
73 lt$300 MMBtu HH
82 lt$300 MMBtu HH
84 lt$300 MMBtu HH
181
81
9
111K
55K
15K
11copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
DECEMBER 2018 $MMBTU BY FUEL SOURCE
Sources SampP Global Platts NYMEXNote Bar chart denotes MMBTU equivalent of quoted price data label denotes quoted price
Natural gas provides superior economic and environmental benefits vs other fuels driving investment in new demand
$0
$2
$4
$6
$8
$10
$12
Coal NYMEX Henry Hub NaturalGas
Mt Belvieu Ethane WTI Brent USGC NAPHTHA
$M
MBt
u
$336 MMBTU
36CPG
$202 MMBTU
$6100Bbl
$5216 Bbl
WTI to Henry Hub ratio 22X
$4720Bbl
Ethane FracSpread 12 CPG
12copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
NORTH AMERICAN NATURAL GAS DEMAND BY SECTOR (2012ndash2023)
Sources Wood Mackenzie 1H rsquo18 WMB Analytics Based off 90 utilization of announced North American ethane export capacity and North American ethylene plant capacity rsquo18-rsquo22
Robust domestic and global natural gas demand forecasts continue to rise reaching 120 Bcfd by 2023
0
15
30
45
60
75
90
105
120
135
2012 2017 2018 2023
Bcf
d
IndustrialPowerGeneration
Mexico Exports
TransportOther
ResidentialCommercial
LNG Exports
Demand Growth lsquo17-rsquo18 10
North American demand growth lsquo17-rsquo23 increased by 4 Bcfd from prior forecast
+~1045 Mbpd
of incremental ethane
represents ~29 Bcfd of natural gas
13copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0
5
10
15
20
25
30
35
40
45
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18 Cum
ulative Global D
emand G
rowth Since lsquo11
Oil
amp G
as P
rice
in M
MB
tu
Cumulative Global Demand for Nat Gas Cumulative Global Demand for Oil Henry Hub Forward Curve WTI Forward Curve
Sources SampP Global Platts Analytics for global demand outlook US Energy Information Administration for price history NYMEX for forward curves as of 1-4-19
Natural gas will continue to win global market share
Forecast
NATURAL GAS VS OIL DEMAND GROWTH (2011 TO 2027) HENRY HUB AND WTI PRICES (MMBTU)
14copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0
500
1000
1500
2000
2500
3000
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Tota
l Em
issi
on (M
MtC
O2)
Ele
ctric
Pow
er (b
illion
KW
h)
Coal Natural Gas Renewables Nuclear Petroleum Total Emissions (MMT CO2)
US ELECTRIC POWER GENERATION AND EMISSIONS 2007-2017
Note Renewables = hydroelectric wind amp solar power generation Source US Energy Information Administration
US natural gas market share increases over time for Power sector while coal use declines Contributes to a decline of CO2 emissions
Coal and petroleum power generation
decreased by 40 while natural gas power generation increased by 42
CO2emissions decline by
28
15copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Source US Energy Information Administration
Natural gas continues to be the preferred fuel type for new power generation projects in the United States followed by renewables
0 5000 10000 15000 20000
Other
Coal
Nuclear
Solar
Wind
Natural Gas
Nameplate Capacity (MW)
Power Generation Projects Under Construction by Fuel Type Fuel Type of
Choicegt Carbon intensity from the US power sector
fell by 14 since 2005 as natural gas displaced other fossil fuels in power generation
gt Natural-gas fired power generation accounts for over 50 of current power projects under construction
Partnering with Renewables
gt As states make strides toward renewable power it is vital for natural gas-fired generation to follow as a backup fuel to ensure grid reliability
gt Natural gas pipeline capacity is increasingly valuable as more capacity will be needed to support the intermittent nature of renewable power
Dark blue represents expected utilization
Full bar represents nameplate capacity
16copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Note Chart excludes Eastern Canada Alaska West Coast Barnett Gulf Coast conventional amp GOM production that amounts to a decline of 24 Bcfd through 2022 CV=Cotton Valley Source Wood Mackenzie 1H lsquo18
Supply from advantaged basins must grow to meet forecasted demand
0
5
10
15
20
25
30
35
40
45
Northeast Permian Mid-con WesternCanada
Eagle Ford Haynesville+ CV
Rockies San Juan
Gas DirectedOil-Directed
Bcfd
+148 Bcfd or 61
+53 Bcfdor 76 -01 Bcfd
or -1
+19 Bcfdor 33
+20 Bcfdor 46
+30 Bcfd or 35
+23 Bcfdor 15
NATURAL GAS FORECASTED PRODUCTION BY REGION amp WELL TYPE (2017ndash2022)
-05 Bcfdor -30
70 of NA Gas growth comes from
gas-directeddrilling
17copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
ResCom Industrial Power
TransportOther LNG Exports Net Mexican Exports
NORTH AMERICAN NATURAL GAS CUMULATIVE PRODUCTIONGROWTH 2017-2022 (IN BCFD)
NORTH AMERICAN NATURAL GAS CUMULATIVE DEMANDGROWTH 2017-2022 (IN BCFD)
Source Wood Mackenzie 1H lsquo18
Forecasted Northeast production growth alone could fuel domestic natural gas demand growth through 2022
0
5
10
15
20
25
30
Northeast Permian All Other
Northeast is 60 of all North American gas production growth through 2022
Exports
Domestic Demand
18copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
2nd wave of US LNG export projects expected to drive an additional +5 Bcfd of growth through 2027
LNG exportvolumes to grow by+11 Bcfd along
Transco statesthrough 2027
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
Sabine Pass Cove Point Corpus ChristiCameron Elba Island Freeport2nd Wave Gulf Coast Golden Pass WoodfibreLNG Canada Prior 1H 17 Forecast
Forecasted Monthly LNG Export Volumes
In MMcfd
Source Wood Mackenzie 1H lsquo18
Williamsrsquo Asset Map + Third-party Liquefaction Plants
19copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
43
27
2017
1413
1110
1008
0761
39414345474951535557596163
Bcf
d
TOP DRIVERS OF GLOBAL LNG DEMAND BY COUNTRY lsquo17- lsquo27
Source Wood Mackenzie LNG Tool 3Q lsquo18
Global LNG demand grows by 24 Bcfd through 2027 driven by Asia and Europe
Asia Europe Other
Global Market
Reaching 63 Bcfd
+24 Bcfd
Factors Driving GrowthChina amp Indiabull Developing economies pursuing clean
energy for growth amp fuel diversity Northwest Europebull LNG balances the market with flexible
dependable supplybull Upside potential from weather events amp
other price sensitive demand responsesSoutheast Asiabull Need for supplemental supplies to replace
maturing and declining indigenous resourcesbull Stronger growth prospects linked with better
than anticipated economic developmentsSoutheast Europebull LNG complements domestic amp pipeline
supply Japan South Korea amp Taiwanbull While solely dependent on LNG legacy
importers expected to have flat to declining demand due to relatively mature energy demand market
20copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Sources 1Wood Mackenzie LNG Tool 3Q lsquo18 and 1H lsquo18 LT 2Columbia SIPA Center on Global Energy Policy httpsenergypolicycolumbiaedu
Chinese LNG demand surpassed industry expectations in 2017 Growth outlook remains strong for 2018 and beyond
0
1
2
3
4
5
6
7
8
9
10
2016 2017 2018 2019 2020
Bcfd
China LNG Imports North America LNG Exports
2Factors Driving LNG Demand Growth in Chinabull Ambitious goals to improve air quality including
almost doubling the share of gas in Chinarsquos energy mix to 10 by 2020
bull Coal-to-gas switching to fight greenhouse gas emissions as natural gas emits nearly 60 less CO2 per kWh than coal in power generation
bull Progress in liberalizing natural gas to allow non-government parties to receive access to pipelines and LNG terminals
bull Short-term gas shortages due to peaked demand lack of storage capacity and overstretched LNG infrastructure with a 2017 average utilization rate of 105
bull Declines in piped gas supply from central Asia and insufficient domestic gas production unable to meet demand growth
1Chinese LNG Demand vs NA LNG Export Forecast2016-2020
21copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Williams best positioned to capitalize on significant opportunities to connect low-cost supplies to premier demand markets
+53 +32
Gulf CoastDemand
Mexican Exports
Permian Production
+21
+148
+22
+35
Northeast Demand
Southeast Demand
NortheastProduction
GC LNGExports
+69
Production and Demand Growth in Key Areas in Bcfd (2017-2022)
Williamsrsquo assets uniquely aligned with demand growth along the East Coast from Texas all the way to the Northeast
LNG Exports(Elba + Cove Point)
+11
Leveraging significant investments in Northeast and Transco to connect best supplies to the best markets
Note All other NA production amounts to 02 Bcfd of growth rsquo17 ndash rsquo22 and all other NA demand amounts to 16 Bcfd of growth lsquo17 ndash lsquo22
Source Wood Mackenzie 1H lsquo18
Majority of production growth in Northeast with significant growth also occurring in the Permian
22copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Attractive returns on visible growth capital focused on Transco and GampP projects in the Northeast West and AG Deepwater
gt West ndash DJ Processing Plants 200 MMcfd (Ft Lupton III)
gt Atlantic Gulf Deepwater ndashStampede
gt Northeast GampP ndashSusquehanna Gathering Expansion 700 MMcfd
gt Transco ndash Atlantic Sunrise 17 MMDthd
gt West ndash DJ Processing Plant 225 MMcfd (Keenesburg I)
gt West ndash Wamsutter ndash High Point Hansen Lake amp Echo Springs GampP Expansions
gt West ndash Niobrara ndash Jackalope Gathering amp Bucking Horse Processing 200 MMcfd
gt Northeast GampP ndash Rich Gas Growth Driving Oak Grove Expansions
gt Northeast GampP ndash Oak Grove II III 400 MMcfd amp Harrison Hub C3+ Pipeline
gt Northeast GampP ndash Bradford amp Utica Gathering Expansion
gt Atlantic Gulf Deepwater ndash Shell Appomattox ndash Norphlet Pipelinendash Mobile Bay Gas Plant Expansion
gt West ndash North Seattle Lateral Upgrade 159 MDthd
gt Transco ndash Rate Casegt Transco ndash Gulf Connector 475 MDthdgt Transco ndash St James Supply 162 MDthdgt Transco ndash Rivervale S to Market 190 Mdthd
gt West ndash DJ Processing Plant 225 MMcfd (Keenesburg II)
gt Northeast GampP ndashSusquehanna Gathering Expansion 800 MMcfd
gt Atlantic Gulf Deepwater ndashBuckskin
gt Transco ndash Hillabee Phase 2 206 MDthd
gt Transco ndash Southeastern Trail 296 MDthd
gt West ndash DJ Processing Plants 225 MMcfd (Milton I)
gt Transco ndash Gateway 65 MDthd
gt Transco ndash Northeast Supply Enhancement 400 MDthd
gt Transco ndash Leidy South 580 MDthd
gt West ndash DJ Processing Plants 225 MMcfd (Milton II)
gt Northeast GampP ndash Oak Grove IV 200 MMcfd
gt Atlantic Gulf DeepwaterndashAdditional Tie-backs Shell Whale Ballymore Tigris Mexico Perdido amp others
gt Transco ndash Pursuing 20+ expansion opportunities including ldquoProject 1rdquo from Analyst Day
gt Gulfstream Phase VI Expansion
SUPP
LY D
RIV
END
EMA
ND
DR
IVEN
Black = In Progress Blue = PotentialUnder Negotiation
2018 2019 2020 2021 2022+
23copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
(1) Consolidated revenue will be reduced by lease payment of ~$8 millionmonth to partners
Atlantic Sunrise Largest expansion project in Transco history placed in service October 6th delivers significant EBITDA growth
gt Significant revenue contribution to Transco
ndash $35 millionmonth(1) in consolidated fee-based revenue
gt Northeast gas prices quickly respond to incremental takeaway capacity
ndash NE Gas prices rose from ~$120 to ~$270 the day Atlantic Sunrise was placed in service
gt Northeast GampP gathered volume and EBITDA uplift expected
ndash Price response supportive of producer activity in the NE PA Susquehanna
ndash 15 gathering volume growth CAGR expected 2018-2021
ndash EBITDA to grow at a higher rate due to improved operating margins
Atlantic Sunrise17 MMDthd
Williamsrsquo US Asset Map Highlighting Transcorsquos Atlantic Sunrise Expansion Project PA
NY
WV
OH
NJ
$050
$100
$150
$200
$250
$300
$350
$M
MB
tu
Northeast Gas PricesTetco M-2 TGP Z-4 300 Leg Transco Leidy
Atlantic SunriseIn Service Oct 6
24copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Transco 2018 rate case protects adequate return on base system
gt Rate filed August 31 2018ndash ~$270MM annual revenue increase
bull Based on 16 ROE as prescribed by FERC methodology every 1 change in ROE is worth ~$30MM in Revenue
bull Subject to negotiation with shippers ndash Proposed 5-year $12B modernization and emission reduction investment
programndash Rate increase and proposed modernization program incremental to 2019
guidancegt Increased rates expected to be effective March 2019
RATE CASE TIMELINE
gt Lower corporate tax rate reduces income tax allowancegt Factors driving higher cost of service
ndash Higher expense in recent years to be incorporated into rate casendash Maintenance capital and modernization spending to be reflected in rate base
gt By 2019 approximately 55 of fee revenues from negotiated ratesndash Negotiated rate contracts remain unaffected by rate case and income tax changes
RATE CASE CONSIDERATIONS
VIRGINIA SOUTHSIDE II CONSTRUCTIONTransco Pipeline Southern Virginia
25copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Transco Project 2 sanctioned Leidy South ndash Providing access to new Northeast supplies
gt Extends Transcorsquos reach
gt Greater than 1000 MDthd of firm transport capacity in Zones 3 4 5 and 6
gt Attractive returns consistent with recent Transco expansions
gt 580 MDthd expansion in Pennsylvania from receipt points on Transcorsquos Leidy system to Zone 6 markets
gt Target in-service date 4Q 2021
gt Target capital cost $450-$550 million
gt 100 long-term take-or-pay contracts providing attractive returns consistent with Transcorsquos 2018-2021 expansion project profile of ~64x
gt Provides transportation outlet for producers and supports incremental gathering volume for Williamsrsquo Northeast PA gathering system
Two examples of Transcorsquos
20+ expansion
opportunities
US Map of Williamsrsquo Assets Highlighting Transco Pipeline PROJECT 1
LEIDY SOUTH (PROJECT 2)
26copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
(1) Includes Gulf Trace Hillabee (Ph 1) Dalton NY Bay Expansion Virginia Southside II Garden State I(2) Includes Garden State II Atlantic Sunrise Gulf Connector St James Supply Rivervale South to Market NE Supply Enhancement Hillabee (Ph 2) Gateway Southeastern Trail Leidy South
Transco Unprecedented growth demonstrates competitive advantageTRANSCO CONTRACTED CAPACITYAND FEE-BASED REVENUE
85 86 89 100 101
106 106
120 122
150
169177
180
193
$750
$1000
$1250
$1500
$1750
$2000
$2250
$2500
$2750
6
8
10
12
14
16
18
20
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Fee
Bas
ed R
even
ue $
Mill
ions
Con
trac
t Cap
acity
MM
Dtd
Year-end Contracted Capacity Forecasted Year-end Contracted Capacity Fee Revenue ($ MM) Forecast Fee Rev
2017(1) 2018 ndash2021(2)
Growth Capital Placed In-service ($ Bln) ~$14 ~$52
Full-year run-rate Modified EBITDA ($ Bln) ~$024 ~$084
EBITDA multiple ~58x ~63x
Attractive Returns on Growth Projects
27copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
(1) Gathering and processing statistics for Utica Supply Hub do not include Blue Racer (2) Non-operated joint venture (3) Primarily Cost-of-service based contracts
Northeast GampP Large footprint with foundational assets in place
gt 13 Bcfd of gathering capacity in dryrich gas
gt 800 MMcfd of processing capacity
gt 135000 bpd fractionation capacity
UTICA SUPPLY HUB(1)
gt Cardinal Gathering(3)
gt Flint Gatheringgt Utica East Ohio (UEO)(2)
BLUE RACER MIDSTREAM(2)
BRADFORD SUPPLY HUB(3)
SUSQUEHANNA SUPPLY HUB
gt 32 Bcfd of gathering capacity in dry gas
gt 570 miles of gathering pipeline in dryrich gas
gt 800 MMcfd of processing capacity
gt 123000 bpd fractionation capacity
gt 151 miles of NGL and condensate transport
gt 36 Bcfd of gathering capacity in dry gas
gt 15 Bcfd of gathering capacity in dryrich gas
gt 700+ MMcfd processing capacity
gt 120000+ bpd fractionation and de-ethanization capacity
OHIO RIVER SUPPLY HUB
gt Ohio Valley Midstreamgt Laurel Mtn Midstreamgt Marcellus South
PA
28copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
0
1
2
3
4
5
6
7
8
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2012 2013 2014 2015 2016 2017 2018
Bcf
d
Dry Gas Wet GasLegend
Northeast GampP Substantial growth expected from incremental takeaway capacity and new expansion projects to relieve constraints
Notes Partially owned system volumes are shown at 100 Excludes volumes for all non-operated assets
NORTHEAST GATHERING VOLUME GROWTH THROUGH 3Q 2018 AVERAGE GATHERED VOLUMES (BCFD)
15 GATHERED VOLUME
CAGR EXPECTED
2018-2021
29copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Gulf of Mexico Substantial discoveries in close proximity to existing assets expected to facilitate long-term growth
Gulf East
7 tiebacks contracted expecting morebull Shell Appomattox dedication Norphlet pipeline option
minus Producer expected reserves 650 MMboeminus Producer expected peak production 175 Mboedminus Target in-service date Mid 2019
bull Opportunities include ChevronTotal Ballymore discovery 3 miles from Blind Faithminus Largest discovery by Total in the GOM with more than 670 ft of net oil pay
Discovery
gt1 TCF of gas discoveries within reach of KCCbull Buckskin Stampede dedications
minus Combined additional reserves 66 Bcfminus Stampede online May 2018 Buckskin target in-service date 2H 2019
bull Opportunities include discoveries at Anchor Shenandoah and Katmai
Gulf West
Only existing Oil amp Gas pipelines near active Western Gulf explorationbull Opportunities include Shell Whale (15 miles from existing pipelines)
Tigris and Mexico Perdido discoveriesminus Shell Whale One of Shellrsquos largest finds in the GOM in the past decade
with over 1400 feet of oil pay
Gas GatheringOil GatheringNorphlet PipelineDeepwater SparGrowth ProjectsMexico Deepwater Basin
Sources Chevron 1302018 Ballymore Press Release Total 1312018 Ballymore Press Release Shell 1312018 Whale Press Release
TXLA
MS
BALLYMORE
NORPHLETPIPELINE
TIGRIS
BUCKSKIN
ANCHOR
APPOMATTOX
WHALE
ALFL
30copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Pro-forma Four Corners sale and DJ Basin acquisition Fee-based business structure reinforces stability in cash flows
gt Reduced commodity exposure with sale of Four Corners Area assets
(1) Includes our proportional ownership of the gross margin of our equity method investments Excludes certain regulated revenues which are related to tracked operating costs(2) MVC revenue includes revenue level guaranteed by MVC and excludes any revenue on volumes exceeding MVC MVC revenue also includes amortization of upfront payments associated with canceled MVCs
~97 of 2019 Gross Margin from Fee-based Sources2019 Gross Margin(1)
gt Fully contracted demand charge revenuegt Attractive positions exposed to growth
gt Mix of capacity payments MVCs(2) and Cost of Service agreements
gt Volume-driven fee-based contracts for gathering processing or other non-regulated services
gt Some contracts include escalation provisions
36 Volume-driven Non-regulated Fee-based Revenue
38 Regulated Gas PipelineFee-based Revenue
3 NGL and Other Commodity Exposure
23 Volume-protected Non-regulated Fee-based Revenue
36
3
38
23
31copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Moved to investment grade on significant credit metric improvementIndustry leading dividend coverage funding growth capital forecast gt$44 billion of asset sales from 2016-2018
significantly reducing our direct commodity exposure Jan lsquo17 repositioning and deleveraging transactions Streamlining the organization and aggressively
managing costs
$39
$26
$00
$05
$10
$15
$20
$25
$30
$35
$40
2018 2019
GrowthCapex
GrowthCapex
$1045 $125
Excess Cash Available After Dividends
($ in billions)
Excess Cash Available After Dividends
Note This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP comparable financial measures are included at the back of this presentation(1) 2015-2019 Debt Adjusted EBITDA ratios presented here does not represent leverage ratios measured for WMB credit agreement compliance or leverage ratios as calculated by the major credit ratings agencies
$1302Cash from sale of
Four Corners Area assets and Gulf Coast Pipelines
597x
530x
462x
~500x
lt475x
2500
3000
3500
4000
4500
5000
5500
300x
350x
400x
450x
500x
550x
600x
650x
2015 2016 2017 2018 2019
Adjusted EB
ITDA
($ Millions)
Deb
t A
djus
ted
EBIT
DA
WMB DebtAdjusted EBITDAAdjusted EBITDA ($MM)
WMB 2018 DebtAdjusted EBITDA proforma for full year Atlantic Sunrise revenue contributions
GUIDANCE
(1)
Long-term Target
lt42x Book Debt Adjusted EBITDA
(1)
No equity issuance required to fund forecasted growth capital
Excess cash available after dividends and asset sales to be used to partially fund growth capex
Capital discipline focused on ROCE
32copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
$063
$076 $077
$082$089
$101
$020
$030
$040
$050
$060
$070
$080
$090
$100
$110
2017 2018 Guidance Ranges 2019 Guidance Ranges
Williams Adjusted EPS 2017-2019
Steady and predictable growth despite assets sales and commodity price volatility
$Sh
are
Note This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP financial measures is included at the back of this presentation
Assets sales of over $34B
Geismar in rsquo17 Four Corners amp Gulf Pipes in lsquo18
(Note ~$2B in book gains are removed from Adjusted EPS)
LowMidpoint
MidpointHigh
HighWe expect 2018 to be in the upper half of our guidance
range ($076 to $082)
33copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Strong stable and growing 2018 and 2019 key guidance metrics
2018 GUIDANCE 1 2019 GUIDANCE
Net Income $0975 - $1175 Bn $1050 - $1350 Bn
Adjusted EBITDA $4450 - $4650 Bn $4850 - $5150 Bn
Distributable CashFlow (DCF) $2600 - $2900 Bn $2900 - $3300 Bn
Expected DividendGrowth Rate
10-15 annual growth(annual dividend increases)
10-15 annual growth(annual dividend increases)
DividendCoverage Ratio
~16xMidpoint of Guidance
~17xMidpoint of Guidance
Growth Capex $39 Bn $26 Bn
Consolidated Debt Adjusted EBITDA 2 ~ 50 x lt 475x
Note This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP comparable financial measures are included at the back of this presentationWilliams does not expect to be a US Federal cash income taxpayer through at least 2024 excluding taxes on any potential asset monetizations
1 DCF shown Proforma as if the WPZ transaction had occurred 1118 Dividend payments used in the coverage calculation include WPZ distribution payments to WPZ public unitholders for 1Q and 2Q 2 Consolidated Debt Adjusted EBITDA ratio does not represent leverage ratios measured for either WMB or WPZ credit agreement compliance or leverage ratios as calculated by the major credit ratings agencies
34copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
WMBMedian
SampP 500
WMB vs SampP 500
Approximate Current Dividend Yield(2)
58 22 1636
Adjusted EPSCAGR(2)
(2017-2019)189 136 390
Adjusted EBITDA Growth(2)
(2018-2019)99 71 394
Dividend Growth(2)
(2018-2019)125 67 866
(1) Per SampP Capital IQ Williamsrsquo adjusted EBITDA exceeded or was within 2 of the consensus estimate for EBITDA in each quarter 1Q 2016ndash3Q 2018(2) Data and estimates as of January 4 2018 Median SampP 500 2017-2019 growth rates based on Bloomberg consensus estimates WMB 2018-2019 growth rates based on midpoint of guidance (3) Represents peer average EV NTM EBITDA multiple from January 1 2013 to current peers include ENB EPD ET KMI OKE TRGP and TRPNote This slide contains non-GAAP financial measures A reconciliation of all non-GAAP financial measures used in this presentation to their nearest GAAP comparable financial measures are included at the back of this presentation
Williams is a unique large-scale low-volatility growing natural gas infrastructure company with strong investor upside
gt Volume-driven natural gas strategy drives low volatility in earnings and cash flowgt Advantaged and irreplaceable asset base handling 30 of US low-cost natural gas suppliesgt Large-scale energy company ~$52 billion enterprise value with Investment Grade credit
ratingsgt 2019 gross margin projected to be ~97 fee-based gt Met or exceeded Adjusted EBITDA street consensus each of the last 11 quarters(1)
gt Exceeded midpoint for 2017 key guidance metrics 2018 trending toward high end of rangegt ~$125 billion excess cash available after dividends in 2019
STABILITY
gt Nationrsquos largest and fastest growing interstate natural gas pipeline system Transco with unrivaled proximity to growing Mid-Atlantic Southeast and Gulf Coast demand centers
gt 15 Northeast GampP gathered volume CAGR expected 2018-2021
gt 189 Adjusted EPS growth CAGR expected 2017-2019 despite $34B in asset sales
gt 10 Adjusted EBITDA growth 2018-2019 expecting 5-7 annual Adjusted EBITDA growth longer term beyond 2019
GROWTH
gt Attractive current dividend yield of 58(2) with strong coverage
gt 104x EV 2019 EBITDA multiple(2) below long-term historical average of 128x(3)
gt Long-term historical 128x multiple(3) implies a $34 stock price which aligns with sell-side consensus target price providing for 44 upside to current price(2)
VALUATION
35copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward Looking Statements
36copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward-looking statements
FORWARD-LOOKING STATEMENTS
gt 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 ldquoforward-looking statementsrdquo within the meaning of Section 27A of the Securities Act of 1933 as amended (Securities Act) and Section 21E of the Securities Exchange Act of 1934 as amended (Exchange Act) These forward-looking statements relate to anticipated financial performance managementrsquos plans and objectives for future operations business prospects outcome of regulatory proceedings market conditions and other matters We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995 All statements other than statements of historical facts included herein that address activities events or developments that we expect believe or anticipate will exist or may occur in the future are forward-looking statements Forward-looking statements can be identified by various forms of words such as ldquoanticipatesrdquo ldquobelievesrdquo ldquoseeksrdquo ldquocouldrdquo ldquomayrdquo ldquoshouldrdquo ldquocontinuesrdquo ldquoestimatesrdquo ldquoexpectsrdquo ldquoforecastsrdquo ldquointendsrdquo ldquomightrdquo ldquogoalsrdquo ldquoobjectivesrdquo ldquotargetsrdquo ldquoplannedrdquo ldquopotentialrdquo ldquoprojectsrdquo ldquoscheduledrdquo ldquowillrdquo ldquoassumesrdquo ldquoguidancerdquo ldquooutlookrdquo ldquoin-service daterdquo or other similar expressions These forward-looking statements are based on managementrsquos beliefs and assumptions and on information currently available to management and may include among others statements regardingndash Levels of dividends to Williams stockholders
ndash Future credit ratings of Williams and its affiliates
ndash Amounts and nature of future capital expenditures
ndash Expansion and growth of our business and operations
ndash Expected in-service dates for capital projects
ndash Financial condition and liquidity
ndash Business strategy
ndash Cash flow from operations or results of operations
ndash Seasonality of certain business components
ndash Natural gas and natural gas liquids prices supply and demand
ndash Demand for our services
37copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward-looking statements (contrsquod)
FORWARD-LOOKING STATEMENTS
gt 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 herein Many of the factors that will determine these results are beyond our ability to control or predict Specific factors that could cause actual results to differ from results contemplated by the forward-looking statements include among others the followingndash Whether we are able to pay current and expected levels of dividends
ndash Whether we will be able to effectively execute our financing plan
ndash Availability of supplies market demand and volatility of prices
ndash Inflation interest rates and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on customers and suppliers)
ndash The strength and financial resources of our competitors and the effects of competition
ndash Whether we are able to successfully identify evaluate and timely execute our capital projects and other investment opportunities
ndash Our ability to acquire new businesses and assets and successfully integrate those operations and assets into existing businesses as well as successfully expand our facilities and to consummate asset sales on acceptable terms
ndash Development and rate of adoption of alternative energy sources
ndash The impact of operational and developmental hazards and unforeseen interruptions
ndash The impact of existing and future laws and regulations (including but not limited to the Tax Cuts and Jobs Act of 2017) the regulatory environment environmental liabilities and litigation as well as our ability to obtain necessary permits and approvals and achieve favorable rate proceeding outcomes
ndash Our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans
ndash Changes in maintenance and construction costs
ndash Changes in the current geopolitical situation
ndash Our exposure to the credit risk of our customers and counterparties
ndash Risks related to financing including restrictions stemming from debt agreements future changes in credit ratings as determined by nationally-recognized credit rating agencies and the availability and cost of capital
ndash The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate
38copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Forward-looking statements (contrsquod)
FORWARD-LOOKING STATEMENTS
ndash Risks associated with weather and natural phenomena including climate conditions and physical damage to our facilities
ndash Acts of terrorism cybersecurity incidents and related disruptions
ndash Additional risks described in our filings with the Securities and Exchange Commission (SEC)
gt Given the uncertainties and risk factors that could cause our actual results to differ materially from those contained in any forward-looking statement we caution investors not to unduly rely on our forward-looking statements We disclaim any obligations to and do not intend to update the above list or announce publicly the result of any revisions to any of the forward-looking statements to reflect future events or developments
gt In addition to causing our actual results to differ the factors listed above may cause our intentions to change from those statements of intention set forth herein Such changes in our intentions may also cause our results to differ We may change our intentions at any time and without notice based upon changes in such factors our assumptions or otherwise
gt Because forward-looking statements involve risks and uncertainties we caution that there are important factors in addition to those listed above that may cause actual results to differ materially from those contained in the forward-looking statements For a detailed discussion of those factors see Part I Item 1A Risk Factors in our Annual Report on Form 10-K filed with the SEC on February 22 2018 and in Part II Item 1A Risk Factors in our Quarterly Reports on Form 10-Q
39copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Non-GAAP Reconciliations
40copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Non-GAAP Disclaimer
NON-GAAP RECONCILIATIONS
gt This presentation may include certain financial measures ndash adjusted EBITDA adjusted income (ldquoearningsrdquo) adjusted earnings per share distributable cash flow and dividend coverage ratio ndash that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission
gt Our segment performance measure modified EBITDA is defined as net income (loss) before income (loss) from discontinued operations income tax expense net interest expense equity earnings from equity-method investments other net investing income remeasurement gain on equity-method investment impairment of equity investments and goodwill depreciation and amortization expense and accretion expense associated with asset retirement obligations for nonregulated operations We also add our proportional ownership share (based on ownership interest) of modified EBITDA of equity-method investments
gt Adjusted EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations Management believes this measure provides investors meaningful insight into results from ongoing operations
gt Distributable cash flow is defined as adjusted EBITDA less maintenance capital expenditures cash portion of net interest expense income attributable to noncontrolling interests and cash income taxes and certain other adjustments that management believes affects the comparability of results Adjustments for maintenance capital expenditures and cash portion of interest expense include our proportionate share of these items of our equity-method investments We also calculate the ratio of distributable cash flow to the total cash dividends paid (dividend coverage ratio) This measure reflects Williamsrsquo distributable cash flow relative to its actual cash dividends paid
gt This presentation is accompanied by a reconciliation of these non-GAAP financial measures to their nearest GAAP financial measures Management uses these financial measures because they are accepted financial indicators used by investors to compare company performance In addition management believes that these measures provide investors an enhanced perspective of the operating performance of assets and the cash that the business is generating
gt Neither adjusted EBITDA adjusted income nor distributable cash flow are intended to represent cash flows for the period nor are they presented as an alternative to net income or cash flow from operations They should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles
41copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Reconciliation of Income (Loss) Attributable to The Williams Companies Inc to Adjusted Income
NON-GAAP RECONCILIATIONS
2017 2018(Dollars in millions except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr Year
Income (loss) attributable to The Williams Companies Inc available to common stockholders $ 373 $ 81 $ 33 $ 1687 $ 2174 $ 152 $ 135 $ 129 $ 416
Income (loss) - diluted earnings (loss) per common share $ 45 $ 10 $ 04 $ 203 $ 262 $ 18 $ 16 $ 13 $ 46Adjustments
Northeast GampPShare of impairment at equity-method investments $ mdash $ mdash $ 1 $ mdash $ 1 $ mdash $ mdash $ mdash $ mdashImpairment of certain assets mdash mdash 121 mdash 121 mdash mdash mdash mdashAd valorem obligation timing adjustment mdash mdash 7 mdash 7 mdash mdash mdash mdashSettlement charge from pension early payout program mdash mdash mdash 7 7 mdash mdash mdash mdashOrganizational realignment-related costs 1 1 2 mdash 4 mdash mdash mdash mdashTotal Northeast GampP adjustments 1 1 131 7 140 mdash mdash mdash mdash
Atlantic-GulfConstitution Pipeline project development costs 2 6 4 4 16 2 1 1 4Settlement charge from pension early payout program mdash mdash mdash 15 15 mdash mdash mdash mdashRegulatory adjustments resulting from Tax Reform mdash mdash mdash 493 493 11 (20) mdash (9)Benefit of regulatory asset associated with increase in Transcorsquos estimated deferred
state income tax rate following WPZ Merger mdash mdash mdash mdash mdash mdash mdash (3) (3)
Share of regulatory charges resulting from Tax Reform for equity-method investments mdash mdash mdash 11 11 2 mdash mdash 2
Organizational realignment-related costs 1 2 2 1 6 mdash mdash mdash mdash(Gain) loss on asset retirement mdash mdash (5) 5 mdash mdash mdash (10) (10)Total Atlantic-Gulf adjustments 3 8 1 529 541 15 (19) (12) (16)
WestEstimated minimum volume commitments 15 15 18 (48) mdash mdash mdash mdash mdashImpairment of certain assets mdash mdash 1021 9 1030 mdash mdash mdash mdashSettlement charge from pension early payout program mdash mdash mdash 13 13 mdash mdash mdash mdashOrganizational realignment-related costs 2 3 2 1 8 mdash mdash mdash mdashRegulatory adjustments resulting from Tax Reform mdash mdash mdash 220 220 (7) mdash (7)
Charge for regulatory liability associated with the decrease in Northwest Pipelinersquos estimated deferred state income tax rates following WPZ Merger mdash mdash mdash mdash mdash mdash mdash 12 12
Gains from contract settlements and terminations (13) (2) mdash mdash (15) mdash mdash mdash mdashTotal West adjustments 4 16 1041 195 1256 (7) mdash 12 5
42copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Reconciliation of Income (Loss) Attributable to The Williams Companies Inc to Adjusted Income (conrsquot)
NON-GAAP RECONCILIATIONS
2017 2018(Dollars in millions except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr Year
Other(Gain) loss related to Canada disposition (2) (1) 4 5 6 mdash mdash mdash mdashExpenses associated with strategic asset monetizations 1 4 mdash mdash 5 mdash mdash mdash mdashGeismar Incident adjustments (9) 2 8 (1) mdash mdash mdash mdash mdashGain on sale of Geismar Interest mdash mdash (1095) mdash (1095) mdash mdash mdash mdashGain on sale of RGP Splitter mdash (12) mdash mdash (12) mdash mdash mdash mdashAccrual for loss contingency 9 mdash mdash mdash 9 mdash mdash mdash mdashSeverance and related costs 9 4 5 4 22 mdash mdash mdash mdashACMP Merger and transition costs mdash 4 3 4 11 mdash mdash mdash mdashExpenses associated with Financial Repositioning 8 2 mdash mdash 10 mdash mdash mdash mdash(Gain) loss on early retirement of debt (30) mdash 3 mdash (27) 7 mdash mdash 7Impairment of certain assets mdash 23 68 mdash 91 mdash 66 mdash 66Expenses associated with strategic alternatives 1 3 5 mdash 9 mdash mdash mdash mdashSettlement charge from pension early payout program mdash mdash mdash 36 36 mdash mdash mdash mdashRegulatory adjustments resulting from Tax Reform mdash mdash mdash 63 63 mdash 1 mdash 1Benefit of regulatory assets associated with increase in Transcorsquos estimated deferred state income
tax rate following WPZ Merger mdash mdash mdash mdash mdash mdash mdash (45) (45)WPZ Merger costs mdash mdash mdash mdash mdash mdash 4 15 19Charitable contribution of preferred stock to Williams Foundation mdash mdash mdash mdash mdash mdash mdash 35 35Total Other adjustments (13) 29 (999) 111 (872) 7 71 5 83
Adjustments included in Modified EBITDA (5) 54 174 842 1065 15 52 5 72
Adjustments below Modified EBITDAGain on disposition of equity-method investment (269) mdash mdash mdash (269) mdash mdash mdash mdashAccelerated depreciation by equity-method investments mdash mdash mdash 9 9 mdash mdash mdash mdashChange in depreciable life associated with organizational realignment (7) mdash mdash mdash (7) mdash mdash mdash mdashGain on deconsolidation of Jackalope interest mdash mdash mdash mdash mdash mdash (62) mdash (62)Allocation of adjustments to noncontrolling interests 77 (10) (28) (199) (160) (5) 21 mdash 16
(199) (10) (28) (190) (427) (5) (41) mdash (46)Total adjustments (204) 44 146 652 638 10 11 5 26Less tax effect for above items 77 (17) (55) (246) (241) (3) (3) (1) (7)Adjustments for tax-related items (1) (127) mdash mdash (1923) (2050) mdash mdash 110 110
Adjusted income available to common stockholders $ 119 $ 108 $ 124 $ 170 $ 521 $ 159 $ 143 $ 243 $ 545Adjusted diluted earnings per common share (2) $ 14 $ 13 $ 15 $ 20 $ 63 $ 19 $ 17 $ 24 $ 61Weighted-average shares - diluted (thousands) 826476 828575 829368 829607 828518 830197 830107 1026504 896322
(1) The first quarter of 2017 includes an unfavorable adjustment related to the release of a valuation allowance The fourth quarter of 2017 includes an unfavorable adjustment to reverse the tax benefit associated with remeasuring our deferred tax balances at a lower corporate rate resulting from Tax Reform The third quarter of 2018 reflects tax adjustments driven by the WPZ Merger primarily a valuation allowance for foreign tax credits
(2) The sum of earnings per share for the quarters may not equal the total earnings per share for the year due to changes in the weighted-average number of common shares outstanding
43copy 2019 The Williams Companies Inc All rights reserved Williams January Investor Meetings I January 2019
Reconciliation of Income (Loss) Attributable to The Williams Companies Inc to Adjusted Income (conrsquot)
NON-GAAP RECONCILIATIONS
Midpt High Low Midpt High(Dol lars in mi l l ions except per-share amounts )
Net income (loss) $1385 $1460 $1050 $1200 $1350Less Net income (loss) attributable to noncontrolling interests 325 345 115 115 115Net income (loss) attributable to The Williams Companies Inc 1060 1115 935 1085 1235
Adjustments 1Adjustments included in Modified EBITDA 2 (521) (521) - - - Adjustments below Modified EBITDA (62) (62) - - - Allocation of adjustments to noncontrolling interests 16 16 - - - Total adjustments (567) (567) - - - Less tax effect for above items 141 141 - - -
Adjustments for tax-related items 3 110 110 - - -
Adjusted income available to common stockholders $744 $799 $935 $1085 $1235
Adjusted diluted earnings per common share $076 $082 $077 $089 $101
Weighted-average shares - diluted (millions) 976 976 1217 1217 1217
Note Reconci l iation shown with acquis i tion of WPZ completed on August 10 2018
(1) A deta i led l i s t of adjustments i s included in this presentation
(2) Primari ly a $593 mi l l ion ga in on the sa le of Four Corners assets(3) Reflects tax adjustments driven by the WPZ Merger primari ly a va luation a l lowance for foreign tax credi ts
2 0 1 8G U I D A N C E R A N G E S
2 0 1 9