2017 Wells Fargo Securities Pipeline, MLP and Utility Symposium

Transcription

1 WE MAKE ENERGY HAPPEN 2017 Wells Fargo Securities Pipeline, MLP and Utility Symposium Alan Armstrong, President and CEO December 6, 2017 NYSE: WMB NYSE: WPZ williams.com

2 Williams is Strong, Stable, Conservative, and Growing STRONG Execution > Exceeded target for asset sales with $3.3 billion in proceeds > Identifying, contracting, permitting and constructing attractive expansion projects: ~3.2 Bcf/d of Transco expansions in 2017 STABLE Foundation > Natural gas market fundamentals support volume-driven strategy: demand for low-cost U.S. natural gas continues to grow > Steady, high-quality revenues from broad mix of fee-based contracts: volume-protected and volume-driven > Expect gross margin to be 97% fee-based, pro forma for Geismar sale CONSERVATIVE Financial Position > Significantly improved balance sheet, with ample liquidity > No WMB or WPZ equity issuance for forecast growth capital expect to fund planned growth capex with retained cash flow, asset sale proceeds, and low-cost debt > WMB s economic DCF, including proportionate share of healthy cash distribution coverage at WPZ, expected to provide 1.7x (1) coverage of WMB dividend in 2017 GROWING Advantaged Businesses > Nation s largest and fastest growing interstate gas pipeline system, Transco, with unrivaled proximity to growing Mid-Atlantic, Southeast and Gulf Coast demand centers > Largest gas gatherer in fastest growing basins (Marcellus and Utica; ~7.8 Bcf/d) > Medium to long-term growth opportunities continue emerging across portfolio (1) 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. 2

3 Executing Growth Projects, Maintaining Financial Discipline > Big 5 projects plus Atlantic Sunrise early mainline service grew Transco capacity by over 25% Transco Project Operations > Deepwater tiebacks continue Barataria and South Santa Cruz June 2017 > West gathering volumes In-service Capacity (Dth/d) Virginia Southside 2 12/1/ ,000 New York Bay 10/9/ ,000 Atlantic Sunrise (early mainline service) 9/1/ ,000 Dalton 8/1/ ,000 Hillabee Ph. 1 7/11/ ,410 Gulf Trace 2/1/017 1,200,000 Total 3,231,410 3Q 17 up 9% vs. 1Q 17; 4Q 17 expected to be up 13% vs. 1Q 17 > Current Operating Areas show continued adjusted EBITDA (1) growth Sep YTD Adjusted EBITDA (1) up $118 million over 2016 period, excluding NGL-Petchem Services > $3.3 Billion in asset sales Transaction Financial Close Cash Proceeds ($US MM) Geismar 7/6/2017 $2,084 DBJV for Bradford 3/31/2017 $200 Canada 9/23/2016 $1,020 Total $3,304 > Current growth plans do not require new equity issuance Sept 30 cash and cash equivalents of $1.17 Billion at WPZ available to fund growth capital projects and for other corporate and partnership purposes > Significant de-leveraging through Sep 30 WMB Consolidated net debt (2) down $4.56 Billion since Dec. 31, 2016 (1) 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. (2) Net debt is long-term debt plus commercial paper less cash 3

4 Fully-contracted Regulated Pipelines, Portfolio of Non-regulated Services Offer Stability and Growth ~97% of WPZ 2017 Gross Margin from Fee-based Sources Pro Forma for Geismar Sale 2017 Forecasted Gross Margin (1) NGL and Other Commodity Exposure > Minimal commodity exposure with exit from olefins businesses > More upside than down (Ethane cracking demand; C3+ exports) 3% 34% Regulated Gas Pipeline Fee-Based Revenue 34% Volume-driven Non-regulated Feebased Revenue 34% 34% > Fully contracted demand charge revenue > Attractive positions exposed to growth > Volume-driven fee-based contracts for gathering, processing, or other nonregulated services > Some contracts include escalation provisions 29% 29% Volume-protected Nonregulated Fee-based Revenue > Mix of capacity payments, MVCs (2), and Cost of Service agreements (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 4

5 Attractive Returns on Visible, Contracted Growth Capital Focused on Transco and Northeast G&P Projects No Equity Issuance Required to Fund Forecasted Growth Capital WPZ Forecasted Growth Capital Expenditures Averages $2.0 to $2.5 Billion per year > Susquehanna expansion supports supply to Atlantic Sunrise > Other highly efficient expansions of existing footprint > Justified by volumes Non-Regulated Northeast G&P Non-Regulated West Non-Regulated Atlantic Gulf 8% 24% 7% 61% Regulated Growth Projects Major projects in execution: > Atlantic Sunrise > Dalton > Garden State > Gateway Expansion > Gulf Connector > Gulf Trace > Hillabee Ph. 1 and 2 > New York Bay > North Seattle Lateral > Rivervale South to Market > St. James Supply > Northeast Supply Enhancement > Virginia Southside II 5

6 West Gathering Volumes: Stable Foundation of Volumes Supported by Customer Activity West Segment Gathering Volumes (Bcf/d) ~ 4.8 > Strong volume performance 3Q 17 up 9.2% over 1Q 17 4Q 17 expected to be up >13% versus 1Q 17 > System expansions in-service Haynesville Springridge expansion placed in-service early August; system approaching full utilization Chain Lake expansion in Wyoming completed October 9 > Drilling activity supporting volumes Continued strong drilling in Haynesville and Eagle Ford 3.0 1Q'16 2Q'16 3Q'16 4Q'16 1Q'17 2Q'17 3Q'17 4Q'17 Fcst. > Expect continued stability in West volumes Regionally focused producers remain active Broad portfolio of basins provide diversity of supply 6

7 Investing in the Future of America s Fastest Growing Interstate Gas Pipeline > Fulfilling obligation to customers, shareholders and public to modernize system > Defined Transco modernization program to upgrade and/or replace HP/compression and pipeline facilities > Evaluating various capital recovery methods allowable under FERC policy Modernization tracker vs. rate case > Customer education and participation > Rate case milestones Filing date: August 31, 2018 Base period: June 1, 2017 May 31, 2018 Test period: June 1, 2018 Feb. 28, 2019 Effective date: March 1,

8 Net Debt (2) / TTM Adjusted EBITDA (3) (4) Significant De-leveraging with Adjusted EBITDA Growth from Fee-based Revenue 7.00 x 5, x 6.00 x 5.50 x 5.00 x 4.50 x 4.00 x 3.50 x 3.00 x 6.42 x 5.21 x 5.29 x 4.43 x 4,500 4,000 3,500 3, x 2,500 3/31/15 6/30/15 9/30/15 12/31/15 3/31/16 6/30/16 9/30/16 12/31/16 3/31/17 6/30/17 9/30/17 (1) WMB WPZ 3Q'17 Peer Average WPZ TTM Adjusted EBITDA ($MM) (5) TTM Adjusted EBITDA ($ Millions) (3) 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) Peer company Net Debt and TTM Adjusted EBITDA source Bloomberg. Peer set per 2017 Proxy Statement comparator group for Relative TSR pertaining to 2017 performance-based RSUs: ENB, EPD, ETE, KMI, OKE, PAA, TRGP, TRP, and WES. (2) Net Debt is long-term debt plus commercial paper less cash (3) TTM Adjusted EBITDA as derived from WMB Analyst Package or WPZ Analyst Package, as appropriate. (4) Net Debt / TTM Adjusted EBITDA ratio presented here is based on data directly from public disclosures and 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. See Appendix for calculation of WMB and WPZ Net Debt to TTM Adjusted EBITDA ratio. (5) Decline in WPZ TTM Adjusted EBITDA for 9/30/2017 is primarily a result of the sale of Geismar 8

9 Atlantic Sunrise: Permits Received, Construction Underway Atlantic Sunrise 1.7 MMDth/d Mid 2018 > Project Update Manpower ramping up: over 4,000 personnel currently working Project-specific compliance and safety training program Pipeline right of way clearing: ~54% complete Installation of 132,000 horsepower of compression: ~25% complete Cove Point LNG > Target In-service date: mid-2018 > Significant revenue contribution Early mainline service currently providing ~$2.5 million/month Full in-service consolidated fee-based revenue expected to be $35 million/month (1) Additional revenue in Northeast G&P 1) Consolidated revenue will be burdened by lease payment of ~$8 million/month to partners 9

10 Williams has a Long-standing Commitment to Community and Environmental Stewardship Creative partnerships drive meaningful, local benefits through unique solutions Williams has made it a priority to proactively demonstrate its commitment to not only the communities in which they operate but also the environment. The Atlantic Sunrise Environmental Stewardship Program in Pennsylvania is an exemplary model that recognizes the importance of working in a collaborative way to go above and beyond legally required mitigation to advance high value community projects. This is corporate leadership at its best. Larry Selzer, President & CEO, The Conservation Fund Visit us at: CSR.Williams.com 10

11 Fully-contracted, Take-or-pay Projects Provide Attractive Returns Transco Project Return Profile Projects Placed In-service Growth Capital Placed In-service ($ B) $1.5 $1.5 ~$4.2 Full-year Run Rate Modified EBITDA ($ B) Projects Mobile Bay South 3 CPV Woodbridge NE Connector Rockaway Lateral Leidy Southeast Virginia Southside Rock Springs ~ $0.25 ~ $0.25 ~ $0.66 Garden State I Gulf Trace Dalton Hillabee (Ph. 1) Virginia Southside II NY Bay Expansion St. James Supply Gulf Connector NE Supply Enhancement Hillabee (Ph. 2) Garden State II Atlantic Sunrise Rivervale South to Market 1 In-service dates for projects not yet in service represent expected in-service dates. Expected in-service dates assume timely receipt of all necessary regulatory approvals. Constitution, is not included in financial forecast. 2 Excludes impact of any early in-service revenues. 11

12 Contract Capacity MMDt/d Fee Based Revenue, $ Millions Fully-contracted Demand Charge Revenue Growth to 2017 and Beyond Transco Contracted Capacity & Fee Based Revenue 20 $2, Year-end Contracted Capacity Annual Average Contracted Capacity Fee Revenue ($ MM) $2, $2, $1, $1,500 $1,250 8 $1, $750 12

13 Bcf/d Global LNG Demand Growth Anchored in Asia and Europe LNG demand in Asia is forecasted to increase 48%, or 11.8 Bcf/d, from 2016 to 2025 Global LNG Demand by Region ( ) Europe makes up a third of global LNG demand growth China makes up almost 50% of Asian LNG demand growth, increasing by 5.4 Bcf/d Japan, South Korea, Taiwan China South Asia Southeast Asia Europe Middle East Africa FSRU Marine Bunkers Latin America North America NOTE: Converted to Bcf/d Source: Wood Mackenzie 13

14 LNG Demand Growth Begins: Williams Positioned to Serve LNG Export Terminals Gas Flows to Sabine Pass in Bcf/d Daily Monthly Average Contracted with 4 of 6 LNG Facilities In-service or Under Construction (~2 Bcf/d) Market Access to Other 2 Sabine Pass, Contracted Other Contracted Source: PointLogic Energy Market Access 14

15 Deepwater Gulf of Mexico Assets Well-positioned for Future Growth Leading service provider; competitively advantaged assets > Strong Market Share: Williams gathered ~43% of Deepwater gross gas production (1) > Serving Top Customers: 9 of the top 10 Deepwater producers are Williams customers (2) A. Gulf East: Tie-backs confirm value of competitive position Platforms and pipelines have won seven tiebacks in addition to original anchor volumes Tiebacks continue with Shell Appomattox dedication Total expected production volume: 175 Mboe/d; Expected Reserves: 650 MMboe Target in-service date: 2Q 2020 Norphlet pipeline option Perdido B. Discovery: Well positioned for over 1 TCF of gas reserve discoveries along the Keathley Canyon Connector corridor C. Gulf West: Mexico represents a significant mid- to long-term growth opportunity Perdido system in proximity to five deepwater discoveries in Mexican federal waters: Trion, Maximino, Supremus, Noblis and Exploratus 1. Source for deepwater gross gas production: BTU Analytics 2. Source for top deepwater GOM liquid and gas producers August July 2017: BTU Analytics 15

16 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19 Oct-19 Dec-19 Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 Coming Wave of Pipeline Capacity Drives Marcellus and Utica Production Growth 21 Planned Northeast Gas Pipeline Capacity (Bcf/d) (1) 18 All Other Projects (2) Williams owned systems gather ~1/3 of Marcellus & Utica Gas Production (3) Atlantic Coast Mountain Valley PennEast Mountaineer Atlantic Sunrise WB Xpress NEXUS Rover Leach Xpress > Marcellus and Utica volumes poised for growth with pipeline capacity additions > Williams is largest gas gatherer across the Marcellus and Utica > Existing footprint allows for efficient incremental expansions justified by volume growth (1) Capacity and in-service date per Wood Mackenzie (2) All Other Projects includes Garden State Expansion, New Market Project, Leidy South, Access South, Adair SW/Lebanon Extension, New York Bay Expansion, Susquehanna West, Triad Expansion Project, Orion Expansion Project, CPV Valley Lateral Project, Millennium Eastern System Upgrade, Gulf Xpress, Equitrans Expansion Project, Northeast Supply Enhancement, Constitution Pipeline, and Northern Access 2016 (3) Source for total Utica and Marcellus volume: Energy Information Administration, average daily production year-ended 9/30/2017. Partially owned gathering system volumes are shown at 100%. 16

17 Williams is Strong, Stable, Conservative, and Growing STRONG Execution > Exceeded target for asset sales with $3.3 billion in proceeds > Identifying, contracting, permitting and constructing attractive expansion projects: ~3.2 Bcf/d of Transco expansions in 2017 STABLE Foundation > Natural gas market fundamentals support volume-driven strategy: demand for low-cost U.S. natural gas continues to grow > Steady, high-quality revenues from broad mix of fee-based contracts: volume-protected and volume-driven > Expect gross margin to be 97% fee-based, pro forma for Geismar sale CONSERVATIVE Financial Position > Significantly improved balance sheet, with ample liquidity > No WMB or WPZ equity issuance for forecast growth capital expect to fund planned growth capex with retained cash flow, asset sale proceeds, and low-cost debt > WMB s economic DCF, including proportionate share of healthy cash distribution coverage at WPZ, expected to provide 1.7x (1) coverage of WMB dividend in 2017 GROWING Advantaged Businesses > Nation s largest and fastest growing interstate gas pipeline system, Transco, with unrivaled proximity to growing Mid-Atlantic, Southeast and Gulf Coast demand centers > Largest gas gatherer in fastest growing basins (Marcellus and Utica; ~7.8 Bcf/d) > Medium to long-term growth opportunities continue emerging across portfolio (1) 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. 17

18 Forward-looking Statements 18

19 FORWARD-LOOKING STATEMENTS Forward-looking Statements > The reports, filings, and other public announcements of The Williams Companies, Inc. (Williams) and Williams Partners L.P. (WPZ) may contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forwardlooking statements relate to anticipated financial performance, management s 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 All statements, other than statements of historical fact, included in this document 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 anticipates, believes, seeks, could, may, should, continues, estimates, expects, forecasts, intends, might, goals, objectives, targets, planned, potential, projects, scheduled, will, assumes, guidance, outlook, in-service date and other similar expressions. These forward-looking statements are based on management s beliefs and assumptions and on information currently available to management and include, among others, statements regarding: Levels of cash distributions by WPZ with respect to limited partner interests; Levels of dividends to Williams stockholders; Future credit ratings of Williams, WPZ, and their affiliates; Amounts and nature of future capital expenditures; Expansion and growth of Williams business and operations; Expected in-service dates for capital projects; Financial condition and liquidity; Business strategy; Cash flow from operations or results of operations; Seasonality of certain business components; Natural gas and natural gas liquids prices, supply, and demand; Demand for our services. > Forward-looking statements are based on numerous assumptions, uncertainties and risks that could cause future events or results to be materially different from those stated or implied in this document. 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 following: Whether WPZ will produce sufficient cash flows to provide expected levels of cash distributions; Whether Williams is able to pay current and expected levels of dividends; Whether WPZ elects to pay expected levels of cash distributions and Williams elects to pay expected levels of dividends; Whether we will be able to effectively execute our financing plan; Whether Williams will be able to effectively manage the transition in its board of directors and management as well as successfully execute its business restructuring; Availability of supplies, including lower than anticipated volumes from third parties served by our business, and market demand; Volatility of pricing including the effect of lower than anticipated energy commodity prices and margins; 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); The strength and financial resources of our competitors and the effects of competition; Whether we are able to successfully identify, evaluate and timely execute capital projects and other investment opportunities in accordance with our forecasted capital expenditures budget; Our ability to successfully expand our facilities and operations; Development and rate of adoption of alternative energy sources; 19

20 FORWARD-LOOKING STATEMENTS Forward-looking Statements (cont d) The impact of operational and developmental hazards, unforeseen interruptions, and the availability of adequate insurance coverage; The impact of existing and future laws, regulations, the regulatory environment, environmental liabilities, and litigation, as well as our ability to obtain necessary permits and approvals, and achieve favorable rate proceeding outcomes; Williams costs and funding obligations for defined benefit pension plans and other postretirement benefit plans; WPZ s costs for defined benefit pension plans and other postretirement benefit plans sponsored by its affiliates; Changes in maintenance and construction costs; Changes in the current geopolitical situation; Our exposure to the credit risk of our customers and counterparties; 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; The amount of cash distributions from and capital requirements of our investments and joint ventures in which we participate; Risks associated with weather and natural phenomena, including climate conditions and physical damage to our facilities; Acts of terrorism, including cybersecurity threats, and related disruptions; Additional risks described in our filings with the Securities and Exchange Commission (SEC). > 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. > 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 in this document. 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. > 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 Williams and WPZ s Annual Reports on Form 10-K filed with the SEC on February 22,

21 Non-GAAP Reconciliations and Appendix 21

22 NON-GAAP RECONCILIATIONS Non-GAAP Disclaimer > This presentation may include certain financial measures adjusted EBITDA, adjusted income ( earnings ), adjusted earnings per share, cash available for dividends, dividend coverage ratio, economic coverage ratio, distributable cash flow and cash distribution coverage ratio that are non-gaap financial measures as defined under the rules of the Securities and Exchange Commission. > Our segment performance 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. > 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. > For Williams, cash available for dividends is defined as cash received from its ownership in WPZ and adjusted EBITDA from our Other segment, less interest, taxes and maintenance capital expenditures with our Other segment. We also calculate the ratio of cash available for dividends to the total cash dividends paid (dividend coverage ratio). This measure reflects Williams cash available for dividends relative to its actual cash dividends paid. We further adjust these metrics to include Williams proportionate share of WPZ s distributable cash flow in excess of distributions paid, resulting in Williams Economic DCF and Economic Coverage Ratio. > For Williams Partners L.P., we define distributable cash flow as adjusted EBITDA less maintenance capital expenditures, cash portion of interest expense, income attributable to noncontrolling interests and cash income taxes, plus WPZ restricted stock unit non-cash compensation 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. > For Williams Partners L.P., we also calculate the ratio of distributable cash flow to the total cash distributed (cash distribution coverage ratio). This measure reflects the amount of distributable cash flow relative to our cash distribution. We have also provided this ratio calculated using the most directly comparable GAAP measure, net income. > 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. > Neither adjusted EBITDA, adjusted income, cash available for dividends, 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. 22

23 WPZ Reconciliation of Net Income (Loss) to Non- GAAP Adjusted EBITDA, 2016 and (Dollars in millions, except coverage ratios) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr Year Williams Partners L.P. Reconciliation of "Net Income (Loss)" to "Modified EBITDA", Non-GAAP "Adjusted EBITDA" and "Distributable cash flow" Net income (loss) $ 79 $ (77) $ 351 $ 166 $ 519 $ 660 $ 348 $ 284 $ 1,292 Provision (benefit) for income taxes 1 (80) (6) 5 (80) 3 1 (1) 3 Interest expense Equity (earnings) losses (97) (101) (104) (95) (397) (107) (125) (115) (347) Impairment of equity-method investments Other investing (income) loss (1) (28) (29) (271) (2) (4) (277) Proportional Modified EBITDA of equity-method investments Depreciation and amortization expenses , ,280 Accretion for asset retirement obligations associated with nonregulated operations Modified EBITDA ,070 1,235 3,864 1,132 1,076 1,000 3,208 Adjustments Estimated minimum volume commitments (194) Severance and related costs Potential rate refunds associated with rate case litigation ACMP Merger and transition costs Constitution Pipeline project development costs Share of impairment at equity-method investment Geismar Incident adjustment (7) (7) (9) Gain on sale of Geismar Interest (1,095) (1,095) Impairment of certain assets ,142 1,142 Ad valorem obligation timing adjustment 7 7 Organizational realignment-related costs Loss related to Canada disposition (3) (1) 4 Gain on asset retirement (11) (11) (5) (5) Gains from contract settlements and terminations (13) (2) (15) Accrual for loss contingency 9 9 Gain on early retirement of debt (30) 3 (27) Gain on sale of RGP Splitter (12) (12) Expenses associated with Financial Repositioning 2 2 Expenses associated with strategic asset monetizations Total EBITDA adjustments (122) 563 (15) Adjusted EBITDA 1,060 1,065 1,189 1,113 4,427 1,117 1,104 1,101 3,322 23

24 NON-GAAP RECONCILIATIONS WPZ Reconciliation of Net Income (Loss) to Non- GAAP Adjusted EBITDA, 2014 and

25 WMB Reconciliation of Net Income (Loss) to Non- GAAP Adjusted EBITDA, 2016 and

26 NON-GAAP RECONCILIATIONS WMB Adjustments to Modified EBITDA by Segment, 2016 and

27 NON-GAAP RECONCILIATIONS WMB Reconciliation of Net Income (Loss) to Non- GAAP Adjusted EBITDA, 2014 and

28 NON-GAAP RECONCILIATIONS WMB Adjustments to Modified EBITDA by Segment, 2014 and

29 NON-GAAP RECONCILIATIONS WMB 2017 Guidance: Dividend Illustration and Coverage Calculation (Dollars in billions, except per share amounts) 2017 Guidance Distributions from WPZ (accrued / as declared basis) $1.7 Corporate interest (0.3) Subtotal $1.4 WMB cash tax rate 0.0% WMB cash taxes (excludes cash taxes paid by WPZ) - WMB cash available for dividends and other uses $1.4 WMB dividends paid (1.0) Excess cash available after dividends $0.4 Dividend per share $1.20 Coverage ratio (1) 1.4x Memo: WMB Economic Interest in WPZ Cash Coverage - Guidance Midpoint (2) $0.3 WMB cash available for dividends and other uses 1.4 WMB Economic Distributable Cash Flow (3) $1.7 Economic coverage ratio (4) 1.7x Notes: - WMB does not expect to be a U.S. federal income cash taxpayer through at least 2020, excluding taxes on any potential asset monetizations - WMB "Other Segment" Adjusted EBITDA and "Other Segment" Maintenance Capital are not shown due to their immateriality (1) WMB cash available for dividends and other uses / WMB dividends paid (2) WMB pro rata share (~74%) of WPZ Distributable cash flow in excess of Total cash distributed (3) WMB Economic Interest in WPZ Cash Coverage + WMB cash available for dividends and other uses (4) WMB Economic Distributable Cash Flow / WMB dividends paid 29

30 Appendix: Calculation of Net Debt to TTM Adjusted EBITDA Ratio WMB ($MM) Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 17' Q3 17 (4) Net Debt (1) 22,150 23,202 23,587 24,387 24,648 25,241 24,642 23,332 21,186 21,358 19,897 TTM Adj. EBITDA (2) 3,450 3,697 3,892 4,104 4,242 4,290 4,379 4,436 4,525 4,573 4,494 Net Debt / EBITDA (3) 6.42 x 6.28 x 6.06 x 5.94 x 5.81 x 5.88 x 5.63 x 5.26 x 4.71 x 4.70 x 4.46 x WPZ ($MM) Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 17' Q3 17 (4) Net Debt (1) 17,647 18,678 19,034 19,580 19,490 19,997 19,637 18,418 16,440 16,657 15,337 TTM Adj. EBITDA (2) 3,390 3,681 3,874 4,089 4,232 4,289 4,378 4,427 4,484 4,523 4,435 Net Debt / EBITDA (3) 5.21 x 5.07 x 4.91 x 4.79 x 4.61 x 4.66 x 4.49 x 4.16 x 3.67 x 3.68 x 3.46 x (1) Net Debt is long-term debt plus commercial paper less cash (2) TTM Adjusted EBITDA as derived from WMB Analyst Package or WPZ Analyst Package, as appropriate. (3) Net Debt / TTM Adjusted EBITDA ratio presented here is based on data directly from public disclosures and 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. See Appendix for calculation of WMB and WPZ Net Debt to TTM Adjusted EBITDA ratio. (4) Decline in WPZ TTM Adjusted EBITDA for 9/30/2017 is primarily a result of the sale of Geismar 30