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Williams Quarterly Databook for 2Q14

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A report with narrative, charts and graphs detailing the latest results and future projects for midstream company Williams--covering all of their North American operations. …

A report with narrative, charts and graphs detailing the latest results and future projects for midstream company Williams--covering all of their North American operations.

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  • 1. We make energy happen.® July 30, 2014 © 2014 The Williams Companies, Inc. All rights reserved. Williams Quarterly Data Book Second Quarter 2014
  • 2. 1 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 > 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. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. You typically can identify forward-looking statements by various forms of words such as “anticipates,” “believes,” “seeks,” “could,” “may,” “should,” “continues,” “estimates,” “expects,” “forecasts,” “intends,” “might,” ”proposed,” “goals,” “objectives,” “targets,” “planned,” “potential,” “projects,” “scheduled,” “will,” “assumes,” “guidance,” “outlook,” “in service date” or 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: – The levels of dividends to Williams stockholders; – Expected levels of cash distributions by Access Midstream Partners, L.P. (“ACMP”) and WPZ with respect to general partner interests, incentive distribution rights, and limited partner interests; – Amounts and nature of future capital expenditures; – Expansion and growth of our business and operations; – Financial condition and liquidity; – Business strategy; – Cash flow from operations or results of operations; – Seasonality of certain business components – Natural gas, natural gas liquids, and olefins prices, supply, and demand; and – Demand for our service; and – The proposed merger of ACMP and WPZ (the Proposed Merger). > 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 presentation. 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, ACMP, or the merged partnership will produce sufficient cash flows to provide the level of cash distributions we expect; – The structure, terms, timing and approval of the Proposed Merger, including as to be negotiated by the conflicts committees of ACMP and WPZ; – Whether Williams is able to pay current and expected levels of dividends; – Availability of supplies, market demand, and volatility of prices; Forward Looking Statements 2 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 – Inflation, interest rates, and fluctuation in foreign exchange 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 execute investment opportunities; – Our ability to acquire new businesses and assets and successfully integrate those operations and assets, including ACMP’s business, into our existing businesses as well as successfully expand our facilities; – Development of alternative energy sources; – The impact of operational and developmental hazards and unforeseen interruptions; – The ability to recover expected insurance proceeds related to the Geismar plant; – Costs of, changes in, or the results of laws, government regulations (including safety and environmental regulations), environmental liabilities, litigation, and rate proceedings; – Williams’ costs and funding obligations for defined benefit pension plants and other postretirement benefit plans sponsored by its affiliates; – WPZ’s allocated 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; – 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 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; – Acts of terrorism, including cybersecurity threats and related disruptions; and – 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 announcement. 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. > Investors are urged to closely consider the disclosures and risk factors in Williams’ and WPZ’s annual reports on Form 10-K filed with the SEC on Feb. 26, 2014, and each of our quarterly reports on Form 10-Q available from our offices or from our websites at www.williams.com and www.williamslp.com. Forward Looking Statements (cont’d)
  • 3. Williams Partners L.P. 4 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Williams Partners L.P. (WPZ) WPZ Total Gross Margin1 Notes: 2013 has been recast to reflect the Canadian asset drop-down completed in 1Q 2014. 2013 includes proceeds from business interruption insurance claim for the Geismar incident of $123 million. 1Gross margin is gross revenues less related product costs and certain regulated revenues, which are related to tracked operating costs. WPZ unregulated fee revenue includes certain variable fee based revenues (margin-sharing fees) that are immaterial to the total. Expect Gross Margin to Grow by about 50% with Fee-Based Revenues >75% of Business WPZ – Regulated Fee Revenue WPZ – Unregulated Fee Revenue Non-ethane Margin Ethane Margin Olefins Margin 2013 ACTUAL $3.8 BILLION 2016 FORECAST $5.7 BILLION 43% 32% 14% 11% 0% 36% 41% 7% 1% 15% 0%
  • 4. 5 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Strong Fundamentals and Competitive Advantages Drive Robust, Visible Growth Growth Investment Spending by Operating Area 1 Guidance presented here is at the midpoint of ranges. NGL & Petchem Atlantic-Gulf WestNortheast G&P In guidance1 In guidance1 Under negotiation In guidance1 Under negotiation Potential Williams Partners L.P. (WPZ) ~$7 BILLION ~$13 BILLION $25 BILLION+ 2014–2016 2014–2019 6 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Adjusted segment profit + DD&A1 Notes: If guidance has changed, previous guidance is shown in italics directly below. 1A reconciliation of this non–GAAP measure is included in this presentation. * Unallocated revisions of $195 (low/mid/high) as previously announced in ACMP acquisition press release on 6/15/14 and $190 low / $140 mid / $90 high as announced in WPZ press release on 7/30/14. Adjusted Segment Profit: $1,860 - 2,160 $2,610 - 3,050 $2,925 - 3,525 2,050 - 2,250 DD&A: $885 - 935 $1,010 - 1,060 $1,105 - 1,155 895 - 945 Adjusted Segment Profit + DD&A: $2,745 - 3,095 $3,620 - 4,110 $4,030 - 4,680 2,945 - 3,195 (335) (195) - - (335) (195) - - 975 1,010 1,060 1,460 75 95 430 495 985 - 855 830 - - - - $365 $565 - - 85 - 235 235 - - - - $170 $210 - - 900 915 - - 620 595 - - 630 965 - - $195 $355 - - Dollars in millions 2014 2015 2016 Guidance Guidance Guidance Northeast G&P Total Adjusted Segment Profit Northeast G&P NGL & Petchem Services Total DD&A Northeast G&P Total Adjusted Segment Profit + DD&A Atlantic - Gulf West NGL & Petchem Services Atlantic - Gulf West Atlantic - Gulf West NGL & Petchem Unallocated Revisions Unallocated Revisions * * Williams Partners L.P. (WPZ)
  • 5. 7 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Notes: If guidance has changed, previous guidance is shown in italics directly below. 1Includes purchases of property, plant & equipment; investments; and businesses. Capital expenditures1 guidance Maintenance Capex: $305 - 375 $295 - 355 $300 - 360 Growth Capex: $3,140 - 3,640 $1,900 - 2,350 $1,750 - 2,150 3,065 - 3,565 Total Capex: $3,445 - 4,015 $2,195 - 2,705 $2,050 - 2,510 3,370 - 3,940 Dollars in millions 2014 2015 2016 Guidance Guidance Guidance $20 $15 - - 175 175 - - 125 120 - - 20 15 - - $1,400 $350 - 425 1,325 1,475 - 1,400 75 200 - - 590 100 515 - $1,420 $365 - 440 1,500 1,650 - 1,575 200 320 - - 610 115 535 - Northeast G&P NGL & Petchem Services Total Maintenance Capex Total Growth Capex Total Capex Atlantic - Gulf West Northeast G&P NGL & Petchem Services Atlantic - Gulf West Northeast G&P NGL & Petchem Services Atlantic - Gulf West Williams Partners L.P. (WPZ) 8 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Williams Partners L.P. (WPZ) Consolidated Statement of Income 2013 * 2014 (Dollars in millions, except per-unit amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Revenues: Service revenues $ 702 $ 717 $ 731 $ 764 $ 2,914 $ 763 $ 763 $ 1,526 Product sales 1,104 1,046 887 884 3,921 930 853 1,783 Total revenues 1,806 1,763 1,618 1,648 6,835 1,693 1,616 3,309 Costs and expenses: Product costs 790 801 710 726 3,027 769 724 1,493 Operating and maintenance expenses 257 289 265 269 1,080 248 251 499 Depreciation and amortization expenses 196 191 201 203 791 208 207 415 Selling, general, and administrative expenses 130 131 130 128 519 130 132 262 Net insurance recoveries - Geismar Incident — — (50) 10 (40) (119) (42) (161) Other (income) expense - net 1 4 21 25 51 17 27 44 Total costs and expenses 1,374 1,416 1,277 1,361 5,428 1,253 1,299 2,552 Equity earnings (losses) 18 35 31 20 104 23 32 55 Income (loss) from investments (1) (1) (1) — (3) — — — General corporate expenses 45 46 40 38 169 40 44 84 Total segment profit 494 427 411 345 1,677 503 393 896 Reclass equity earnings (losses) (18 ) (35 ) (31 ) (20 ) (104 ) (23 ) (32 ) (55 ) Income (loss) from investments 1 1 1 — 3 — — — Reclass general corporate expenses (45 ) (46 ) (40 ) (38 ) (169 ) (40 ) (44 ) (84 ) Operating income 432 347 341 287 1,407 440 317 757 Equity earnings (losses) 18 35 31 20 104 23 32 55 Interest incurred (118 ) (118) (119) (122) (477 ) (131 ) (142 ) (273 ) Interest capitalized 22 22 24 22 90 25 25 50 Other income (expense) - net 5 7 7 6 25 3 7 10 Income before income taxes 359 293 284 213 1,149 360 239 599 Provision (benefit) for income taxes 15 21 (1) (5) 30 8 5 13 Net income 344 272 285 218 1,119 352 234 586 Less: Net income attributable to noncontrolling interests — 1 1 1 3 — 2 2 Net income attributable to controlling interests 344 271 284 217 1,116 352 232 584
  • 6. 9 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Williams Partners L.P. (WPZ) Consolidated Statement of Income cont’d 2013 * 2014 (Dollars in millions, except per-unit amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Allocation of net income for calculation of earnings per common unit: Net income attributable to controlling interests 344 271 284 217 1,116 352 232 584 Allocation of net income to general partner 142 141 60 162 505 180 167 347 Allocation of net income to Class D units — — — — — 14 18 32 Allocation of net income to common units 202 130 224 55 611 158 47 205 Net income per common unit $ 0.50 $ 0.31 $ 0.52 $ 0.12 $ 1.45 $ 0.36 $ 0.11 $ 0.47 Weighted-average number of common units outstanding (thousands) 401,969 413,901 428,682 438,626 420,916 438,626 438,626 438,626 Cash distributions per common unit $ 0.8475 $ 0.8625 $ 0.8775 $ 0.8925 $ 3.480 $ 0.9045 $ 0.9165 $ 1.8210 * Recast due to the dropdown of the Canadian operations to Williams Partners in the first quarter of 2014. Note: The sum of net income per common unit for the quarters may not equal the total income per common unit for the year due to changes in the weighted-average number of common units outstanding. 10 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Williams Partners L.P. (WPZ) Operating Statistics-Williams Partners 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Operating statistics Interstate Transmission Throughput (Tbtu) 1,046.6 850.0 925.4 1,047.9 3,869.9 1,141.6 938.1 2,079.7 Avg. daily transportation volumes (Tbtu) 11.6 9.3 10.0 11.4 10.6 12.6 10.4 11.4 Avg. daily firm reserved capacity (Tbtu) 12.3 11.9 11.8 12.3 12.1 12.6 12.4 12.5 Gathering and Processing* Gathering volumes (Tbtu) 405 429 442 455 1,731 436 450 886 Plant inlet natural gas volumes (Tbtu) 389 408 393 359 1,549 339 344 683 Ethane equity sales (million gallons) 23 43 57 24 147 33 39 72 Non-ethane equity sales (million gallons) 163 157 153 134 607 113 108 221 NGL equity sales (million gallons) 186 200 210 158 754 146 147 293 Ethane margin ($/gallon) $ 0.03 $ 0.02 $ (0.01 ) $ 0.02 $ 0.01 $ 0.20 $ 0.18 $ 0.19 Non-ethane margin ($/gallon) $ 0.87 $ 0.75 $ 0.85 $ 0.94 $ 0.85 $ 0.88 $ 0.80 $ 0.84 NGL margin ($/gallon) $ 0.77 $ 0.59 $ 0.62 $ 0.80 $ 0.69 $ 0.73 $ 0.64 $ 0.68 Ethane production (million gallons) 160 186 181 143 670 135 173 308 Non-ethane production (million gallons) 404 439 425 381 1,649 372 384 756 NGL production (million gallons) 564 625 606 524 2,319 507 557 1,064 Petrochemical Services Geismar ethylene sales volumes (million lbs) 246 211 10 — 467 — — — Geismar ethylene margin ($/lb) $ 0.37 $ 0.33 $ 0.05 $ — $ 0.34 $ — $ — $ — Equity investments - 100% Discovery NGL equity sales (million gallons) 19 18 6 6 49 10 10 20 Discovery NGL production (million gallons) 63 64 45 46 218 47 54 101 Laurel Mountain gathering volumes (Tbtu) 27 29 32 36 124 34 36 70 Overland Pass NGL transportation volumes (Mbbls) 7,402 11,151 13,174 11,463 43,190 8,612 8,926 17,538 * Excludes volumes associated with partially owned assets that are not consolidated for financial reporting purposes.
  • 7. 11 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Williams Partners L.P. (WPZ) Capital expenditures and investments 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Capital expenditures: Northeast G&P $ 307 $ 298 $ 338 $ 407 $ 1,350 $ 359 $ 291 $ 650 Atlantic-Gulf 174 276 290 247 987 180 412 592 West 63 58 55 35 211 22 27 49 NGL & Petchem Services 157 158 244 201 760 161 211 372 Other 2 1 1 4 8 2 2 4 Total* $ 703 $ 791 $ 928 $ 894 $ 3,316 $ 724 $ 943 $ 1,667 Purchase of businesses: NGL & Petchem Services** $ (25 )$ — $ — $ — $ (25 ) $ 25 $ 31 $ 56 Purchase of investments: Northeast G&P $ 72 $ 37 $ 123 $ 1 $ 233 $ 163 $ 6 $ 169 Atlantic-Gulf 15 50 35 93 193 51 9 60 NGL & Petchem Services 6 2 4 1 13 1 1 2 Total $ 93 $ 89 $ 162 $ 95 $ 439 $ 215 $ 16 $ 231 Summary: Northeast G&P $ 379 $ 335 $ 461 $ 408 $ 1,583 $ 522 $ 297 $ 819 Atlantic-Gulf 189 326 325 340 1,180 231 421 652 West 63 58 55 35 211 22 27 49 NGL & Petchem Services 138 160 248 202 748 187 243 430 Other 2 1 1 4 8 2 2 4 Total $ 771 $ 880 $ 1,090 $ 989 $ 3,730 $ 964 $ 990 $ 1,954 12 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Williams Partners L.P. (WPZ) Capital expenditures and investments cont’d 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Capital expenditures incurred and purchase of investments: Increases to property, plant, and equipment $ 716 $ 824 $ 968 $ 825 $ 3,333 $ 769 $ 867 $ 1,636 Purchase of businesses (25 ) — — — (25 ) 25 31 56 Purchase of investments 93 89 162 95 439 215 16 231 Total $ 784 $ 913 $ 1,130 $ 920 $ 3,747 $ 1,009 $ 914 $ 1,923 *Increases to property, plant, and equipment $ 716 $ 824 $ 968 $ 825 $ 3,333 $ 769 $ 867 $ 1,636 Changes in related accounts payable and accrued liabilities (13 ) (33 ) (40 ) 69 (17 ) (45) 76 31 Capital expenditures $ 703 $ 791 $ 928 $ 894 $ 3,316 $ 724 $ 943 $ 1,667 ** The first quarter of 2013 relates to a working capital adjustment associated with the acquisition of the olefins business from a subsidiary of Williams and the first quarter of 2014 relates to the acquisition of certain Canadian operations from a subsidiary of Williams.
  • 8. Northeast G&P 14 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Northeast G&P WPZ– Northeast G&P 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Revenues: Fee revenues: Gathering & processing $ 59 $ 69 $ 84 $ 90 $ 302 $ 90 $ 93 $ 183 Production handling and transportation 1 3 2 4 10 3 2 5 Other fee revenues 3 6 8 6 23 6 12 18 Commodity-based revenues: NGL sales from gas processing 1 — 3 2 6 2 2 4 Marketing sales 19 34 45 62 160 58 35 93 Other sales — 1 (1 ) — — — — — 83 113 141 164 501 159 144 303 Intrasegment eliminations — — (1 ) 1 — — — — Total revenues 83 113 140 165 501 159 144 303 Segment costs and expenses: NGL cost of goods sold — — (1 ) — (1 ) 1 — 1 Marketing cost of goods sold 20 33 46 62 161 57 37 94 Depreciation and amortization 29 32 33 38 132 39 40 79 Other segment costs and expenses 40 43 66 77 226 57 62 119 Intrasegment eliminations — — (1 ) 1 — — — — Total segment costs and expenses 89 108 143 178 518 154 139 293 Equity earnings (losses) (3 ) 7 2 (13 ) (7 ) 1 10 11 Reported segment profit (loss) (9 ) 12 (1 ) (26 ) (24 ) 6 15 21 Adjustments — — 9 23 32 6 17 23 Adjusted segment profit (loss) $ (9 )$ 12 $ 8 $ (3 ) $ 8 $ 12 $ 32 $ 44
  • 9. 15 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Northeast G&P operating statistics WPZ– Northeast G&P 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Operating statistics Gathering and Processing* Gathering volumes (Tbtu) 127 142 157 180 606 179 189 368 Plant inlet natural gas volumes (Tbtu) 18 25 28 34 105 29 27 56 Non-ethane equity sales (million gallons) 1 1 3 2 7 2 1 3 NGL equity sales (million gallons) 1 1 3 2 7 2 1 3 Ethane production (million gallons) — 1 1 1 3 1 1 2 Non-ethane production (million gallons) 21 32 39 44 136 38 37 75 NGL production (million gallons) 21 33 40 45 139 39 38 77 Laurel Mountain Midstream LLC (equity investment) - 100% Gathering volumes (Tbtu) 27 29 32 36 124 34 36 70 * Excludes volumes associated with partially owned assets that are not consolidated for financial reporting purposes. 16 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Susquehanna Supply Hub (SSH) – 2015* 3 Bcf/d takeaway capacity Laurel Mountain Midstream (LMM) ~670 MMcf/d gathering capacity Blue Racer Midstream G&P/Fractionation/NGL services for Utica shale Ohio Valley Midstream (OVM) – 2015* 0.9 Bcf/d processing capacity ~80 MBPD fractionation/deethanization Three Rivers Midstream (TRM) 275,000 dedicated acres GATHERING VOLUMES UP 64% 2013 vs. 2012 Delivering Large-scale Infrastructure To the Marcellus & Utica WPZ – Northeast G&P Note: LMM capacity is stated at 100%. WPZ owns 51% of LMM. * Represents estimated in-service dates and estimated capacity at respective year end. MARCELLUS & UTICA SHALE OVERVIEW
  • 10. 17 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Susquehanna Supply Hub: Building Large-scale Gathering System in Northeast PA WPZ – Northeast G&P SIGNIFICANT SUPPLY HUB WITH ACCESS TO EAST COAST MARKETS > Planning access to 3 Bcf/d* of takeaway capacity by 2015 > Delivery into 3 major interstate pipelines – Transco, Tennessee, Millennium EXPANDING GAS GATHERING SYSTEM TO MEET PRODUCERS’ DRILLING PLANS > Key customers – Cabot – WPX Energy – Carrizo-Reliance > Large-scale build out – Building operational flexibility to allow increased system reliability * Excludes Constitution, estimated in-service date is late 2015 to 2016 18 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Laurel Mountain Midstream Covers Broad Footprint in Western PA and Eastern Ohio WPZ – Northeast G&P Dedicated Acreage CONTINUED SYSTEM EXPANSION THROUGH JV WITH CHEVRON > JV with Chevron – 51% WPZ owned – WPZ operated > Optimization of capital plan for dry gas area – System capacity of ~ 670 MMcf/d EXTENSIVE DEDICATIONS PROVIDE EXPOSURE TO RICH AND DRY GAS AREAS > Approximately 500,000 acres dedicated across 47 counties > Developing infrastructure solutions for dedicated rich-gas acreage in NW PA and Eastern Ohio Gathering System
  • 11. 19 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Ohio Valley Midstream Provides Large-scale Presence in Liquids-rich Area WPZ – Northeast G&P EXTENSIVE ACREAGE, GATHERING AND PROCESSING UNDER CONTRACT > Long-term contracts: – 236M acres dedicated – 7 producers – Processing of gathered gas Ethane Line Moundsville Fractionation Plant Oak Grove Cryogenic Plant Ft. Beeler Cryogenic Plant Oak Grove Deethanizer Ft. Beeler to Moundsville NGL Line WELL-POSITIONED ASSETS WITH SIGNIFICANT EXPANSIONS PLANNED > Gathering system – 2 processing facilities – 0.9 Bcf/d capacity expected by 2015 year-end – Fort Beeler Cryogenic Plant currently 520 MMcf/d – Oak Grove Cryogenic Plant 400 MMcf/d expected by 2015 year-end > Fractionation/Deethanization – Moundsville fractionation currently 42.5 MBPD; 30 MBPD added in 1Q2014 – 40 MBPD Deethanizer at Oak Grove expected by 3Q2014 > 50-mile ethane line – Completed in 2Q2014 Oak Grove Stabilization 20 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Executing Key Ohio Valley Projects To Drive System Capacity Growth Northeast G&P *Reflects expected in-service dates Several Central Receipt Points (CRPs) expected to come online during 2014. ** Volumes listed for certain projects represent additional installed capacity as opposed to immediate incremental volume impact 1Q14 2Q14 3Q14 4Q14 Moundsville Frac II 30,000 BPD** Stabilization Facilities 6,000 BPD Oak Grove TXP I 200 MMcfd** Oak Grove Deethanizer 40,000 BPD** 50 Mile Ethane Line 24” Pipeline on West Side of System to Oak Grove Avg 305 MMcfd320 MMcfd 420 MMcfd KEY PROJECTS (2014)* Stabilization Facilities 8,500 BPD
  • 12. 21 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Caiman Energy II/Blue Racer Midstream JV Interest Enhances Presence in Utica Shale WPZ – Northeast G&P Three Rivers Midstream FOCUSES ON COUNTIES IN EAST OH AND NORTHWEST PA COVERING THE UTICA SHALE > Blue Racer Midstream is developing a substantial gathering and processing system – Nearly 600 miles of large-diameter gathering pipelines – Natrium complex in Marshall County, WV, processing and fractionation assets – Berne processing complex in Monroe County, OH > Williams Partners owns a 58% equity investment in Caiman Energy II. Caiman Energy II owns 50 % of Blue Racer Midstream > Williams Partners anticipates investing approximately $420 million through 2014 for its proportional interest in Blue Racer Midstream 22 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 2012 2013 2014 2015 AverageGatheredVolumes(Bcf/d) - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 AverageGatheredVolumes(MMcf/d) Delivering Large Scale Infrastructure for Fastest-Growing Supply Area in the U.S. WPZ – Northeast G&P 1Laurel Mountain Midstream average annual gathered volumes are 100% amounts. WPZ owns 51% of Laurel Mountain Midstream. Note: Excludes Marcellus/Utica investments in Blue Racer and Three Rivers. STEADY AND SIGNIFICANT HISTORICAL FEE-BASED VOLUME GROWTH (MMCF/D) EXPECTED GATHERING VOLUME GROWTH THROUGH 2015 (BCF/D) Laurel Mountain Midstream1 Susquehanna Supply Hub Ohio Valley Midstream 0.6 Bcf/d or 31% Growth 2Q YTD Y-o-Y 2.1 Bcf/d or 183% Growth ’12-’15
  • 13. WPZ – Atlantic - Gulf 24 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Atlantic – Gulf WPZ – Atlantic-Gulf 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Revenues: Fee-based revenues: Gathering & processing $ 19 $ 19 $ 15 $ 17 $ 70 $ 16 $ 21 $ 37 Production handling and transportation 283 282 282 302 1,149 307 293 600 Other fee revenues 29 29 30 30 118 30 29 59 Commodity-based revenues: NGL sales from gas processing 28 26 22 27 103 20 25 45 Marketing sales 176 186 167 175 704 171 162 333 Other sales 1 — — 2 3 1 1 2 Tracked revenues: 52 59 46 43 200 53 40 93 588 601 562 596 2,347 598 571 1,169 Intrasegment eliminations 1 1 1 (1 ) 2 2 2 4 Total revenues 589 602 563 595 2,349 600 573 1,173 Segment costs and expenses: NGL cost of goods sold 6 7 5 6 24 6 5 11 Marketing cost of goods sold 176 186 167 175 704 171 162 333 Depreciation and amortization expenses 93 87 92 91 363 94 91 185 Other segment costs and expenses 118 130 132 134 514 124 121 245 Tracked costs 52 59 46 43 200 53 40 93 Intrasegment eliminations 1 1 1 (1 ) 2 2 2 4 Total segment costs and expenses 446 470 443 448 1,807 450 421 871 Equity earnings (losses) 16 20 17 19 72 15 16 31 Reported segment profit 159 152 137 166 614 165 168 333 Adjustments (6 ) (5 ) 5 (2 ) (8 ) — — — Adjusted segment profit $ 153 $ 147 $ 142 $ 164 $ 606 $ 165 $ 168 $ 333
  • 14. 25 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Atlantic – Gulf operating statistics WPZ – Atlantic-Gulf 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Operating statistics Gathering and Processing* Gathering volumes (Tbtu) 39 36 31 31 137 28 31 59 Plant inlet natural gas volumes (Tbtu) 76 78 55 61 270 60 72 132 Ethane equity sales (million gallons) 8 6 7 7 28 2 6 8 Non-ethane equity sales (million gallons) 20 20 16 18 74 12 18 30 NGL equity sales (million gallons) 28 26 23 25 102 14 24 38 Ethane margin ($/gallon) $ .16 $ .21 $ .11 $ .08 $ .14 $ .46 $ .23 $ .28 Non-ethane margin ($/gallon) $ 1.03 $ .89 $ 1.03 $ 1.09 $ 1.01 $ 1.10 $ 1.04 $ 1.06 NGL margin ($/gallon) $ .79 $ .73 $ .75 $ .81 $ .77 $ 1.02 $ .82 $ .89 Ethane production (million gallons) 61 61 42 47 211 45 57 102 Non-ethane production (million gallons) 85 91 68 73 317 71 87 158 NGL production (million gallons) 146 152 110 120 528 116 144 260 Discovery Producer Services LLC (equity investment) - 100% NGL equity sales (million gallons) 19 18 6 6 49 10 10 20 NGL production (million gallons) 63 64 45 46 218 47 54 101 Transcontinental Gas Pipe Line Throughput (Tbtu) 845.6 713.1 756.8 837.5 3,153.0 949.2 796.8 1,746.0 Avg. daily transportation volumes (Tbtu) 9.4 7.8 8.2 9.1 8.6 10.5 8.8 9.6 Avg. daily firm reserved capacity (Tbtu) 9.3 8.9 8.8 9.3 9.1 9.6 9.4 9.5 * Excludes volumes associated with partially owned assets that are not consolidated for financial reporting purposes. 26 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Transco: Nation’s Largest, Fastest Growing Interstate Pipeline System Leidy Southeast Virginia Southside Mobile Bay South III Rock Springs Expansion NE Connector/ Rockaway Lateral NE Connector/ Rockaway Lateral CPV Woodbridge Leidy Southeast Virginia Southside Mobile Bay South III CPV Woodbridge ConstitutionConstitution Rock Springs Expansion NE Connector/ Rockaway Lateral Leidy Southeast Virginia Southside Mobile Bay South III CPV Woodbridge Constitution Rock Springs Expansion $0.3 $1.3 $1.6 CAPITAL INVESTED PLACED INTO SERVICE ($B) $4.8 2014 2015 2016 2017 $0.3 $1.3 $1.6 Dalton LateralHillabee Phase 1 Atlantic Sunrise Gulf Trace Garden State Expansion WPZ – Atlantic-Gulf
  • 15. 27 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Constitution Pipeline: New Market Access for Marcellus Production > A 126-mile, 30-inch pipeline connecting Williams Partners’ Gathering System in Susquehanna County, PA to Iroquois Gas Transmission and Tennessee Gas Pipeline in Schoharie County, NY > Capacity: 650 MDth/d > Project capex: $300 million (41%) > New FERC-regulated interstate pipeline > Owned (41%) and operated by WPZ; Cabot Oil and Gas owns 25%, Piedmont Constitution Pipeline Company owns 24%, and WGL Midstream, Inc. owns 10% > Target in-service date: Late 2015 to 2016 WPZ – Atlantic-Gulf 28 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Atlantic Sunrise: Major Transco Expansion Underpinned by Long-term Commitments > 15-year binding firm-transportation agreements > Bolsters connection to growing, emerging supplies > 1.7 MMDth/d fully committed > Expecting WPZ net investment of $2.1 billion > Producers, LDCs investing in project > Target in-service: second half of 2017 LNG Cove Point WPZ – Atlantic-Gulf
  • 16. 29 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 6 8 10 12 14 16 18 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 2003 2005 2007 2009 2011 2013 2015 2017 Transco Gulfstream* Constitution* Capacity* WPZ – Atlantic - Gulf * Represents Williams ownership percentage. The estimated project in-service dates assume timely receipt of all regulatory approvals. Constitution expected in service late 2015 to 2016. Gas Pipeline Assets: Unprecedented Growth with Fully Contracted Projectsy j CAPITAL INVESTMENT PLACED INTO SERVICE ($MM) MMdt/Day 7.7 16.5 10.8 30 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 ~$3.3 Billion Growth Capex Through 2017 Planned in Transco’s Northern Market WPZ – Atlantic-Gulf 195 210 New York City Philadelphia PAOH WV VA MD DE NJ NY Leidy Hub Zone 6 Baltimore Zone 5 Project Name ISD MDth/d Est. Cap. Northeast Connector 2014 100 $50 MM Rockaway Delivery Lateral 2014 647 $230 MM Leidy Southeast 2015 525 $600 MM CPV Woodbridge 2015 264 $32 MM Rock Springs 2016 192 $80 MM Atlantic Sunrise 2017 1,700 *$2,100 MM Garden State Expansion 2017 180 $150 MM Atlantic Sunrise > Pipeline & loop > Compression Leidy Southeast > 25 mi. of 42-inch loop > Compression Rockaway Lateral > 3.3 mi. of 26-inch lateral Rock Springs > 10.7 mi. of 20-inch > Compression NE Connector > Compression CPV Woodbridge > 2.3 mi. of 20-inch lateral Garden State Expansion > Compression *Represents WPZ’s expected net investment. The estimated project in-service dates assume timely receipt of all regulatory approvals.
  • 17. 31 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 ~$0.9 Billion Growth Capex Through 2017 Planned in Transco’s Southern Market WPZ – Atlantic-Gulf * Represents phase 1. The estimated project in-service dates assume timely receipt of all regulatory approvals. 210Zone 6 Zone 5 Zone 4 85 160 Charlotte Richmond Project Name ISD MDth/d Est. Cap. Mobile Bay South III 2015 225 $50 MM Virginia Southside 2015 270 $300 MM Hillabee Expansion 2017 *818 *$280 MM Dalton Expansion 2017 448 $275 MM Atlanta Virginia Southside > 99 mi. of 24-inch pipe (including lateral) > Compression Mobile Bay South III > Compression Hillabee Expansion > Loop & Compression Dalton Expansion > 106 mi. greenfield pipeline & Compression 32 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 ~ $0.3 Billion Growth CapEx Through 2017 Planned in Transco’s Production Area WPZ – Atlantic - Gulf 85 65 45 30 Zone 2 Zone 3 Zone 4 Sabine Pass LNG Project Name ISD MDth/d Est. Cap. Gulf Trace 2017 1,200 $300 MM Gulf Trace • 8 mi. of 30-inch lateral • Compression
  • 18. 33 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Gulfstream: Stable, High-Return Base Asset > 50% WPZ ownership interest > Flexible supply – Gulf of Mexico – Midcontinent Shales > Fully subscribed with long- term contracts > Average contract life ~ 16 years > Serves growing Florida market – Growth driven by increased power generation needs > No rate case requirement WPZ – Atlantic-Gulf 34 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Gulf East Growth Projects and Opportunities WPZ – Atlantic - Gulf > Gulfstar One – Tubular Bells (GS1) – expected online 3Q 2014 > Kodiak – tieback to Devils Tower – expected online 3Q 2015 > Gunflint – tieback to GS1 expected online 1Q 2016 CONTRACTED: > Appomattox Development (Norphlet Play) – gas gathering, transportation, & processing expected online early 2019 > Taggart – tieback to Devils Tower – expected online1Q 2016 POTENTIAL:
  • 19. 35 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Gulfstar One on Track for First Oil WPZ – Atlantic - Gulf > Speed to market: first oil expected in 3Q > Design one, build many > Project execution: topsides and hull set > Hook-up and commissioning under way > Gunflint tieback contracted 36 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Gulf West Growth Projects and Opportunities WPZ – Atlantic - Gulf > Well positioned for Deep Nansen, Pemex, and other Perdido Fold Belt deepwater opportunities > Short-term South Texas gas supplies for fee based processing in 2014 > Eagle Ford rich gas gathering and processing opportunities > Continued development at Perdido has resulted in record production rates of 140MMcfd and 90Mbpd
  • 20. 37 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Project Execution: Keathley Canyon Connector WPZ – Atlantic - Gulf > 400 MMcf/d capacity > Expected to be in service by 4Q 2014 > Long-term reserves from Lucius dedication > High-deliverability reserves from Hadrian South yield front-end financial loading > Heidelberg dedication contracted > High-potential neighborhoods and additional opportunities with associated gas WPZ – NGL & Petchem Services
  • 21. 39 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 WPZ – NGL & Petchem Services NGL & Petchem Services 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Revenues: Fee-based revenues: Production handling and transportation $ 6 $ 6 $ 6 $ 5 $ 23 $ 7 $ 7 $ 14 Other fee-based revenues 26 31 29 31 117 33 33 66 Commodity-based revenues: NGL sales from gas processing 37 24 22 28 111 54 32 86 Olefin sales 269 228 67 29 593 79 96 175 Marketing sales 684 673 645 644 2,646 698 680 1,378 Other sales 15 11 11 9 46 11 11 22 1,037 973 780 746 3,536 882 859 1,741 Intrasegment eliminations (79 ) (80 ) (56 ) (54 ) (269 ) (77 ) (76 ) (153 ) Total revenues 958 893 724 692 3,267 805 783 1,588 Segment costs and expenses: NGL cost of goods sold 14 12 9 12 47 28 20 48 Olefins cost of goods sold 119 111 44 17 291 51 69 120 Marketing cost of goods sold 679 678 630 638 2,625 684 681 1,365 Other cost of goods sold 13 10 10 7 40 12 10 22 Depreciation and amortization expenses 13 14 18 15 60 17 16 33 Net insurance recoveries - Geismar Incident — 6 (45 ) 13 (26 ) (119) (42) (161) Other segment costs and expenses 46 49 58 39 192 49 53 102 Intrasegment eliminations (79 ) (80 ) (56 ) (54 ) (269 ) (77 ) (76 ) (153 ) Total segment costs and expenses 805 800 668 687 2,960 645 731 1,376 Equity earnings (losses) 5 8 12 14 39 7 6 13 Reported segment profit 158 101 68 19 346 167 58 225 Adjustments — 6 (31 ) 122 97 54 96 150 Adjusted segment profit $ 158 $ 107 $ 37 $ 141 $ 443 $ 221 $ 154 $ 375 40 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 WPZ – NGL & Petchem Services NGL & Petchem Services operating statistics 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Operating statistics Ethane equity sales (million gallons) — — — 3 3 27 28 55 Non-ethane equity sales (million gallons) 40 29 25 26 120 30 18 48 NGL equity sales (million gallons) 40 29 25 29 123 57 46 103 Ethane production (million gallons) — — — 7 7 29 29 58 Non-ethane production (million gallons) 36 35 24 18 113 30 28 58 NGL production (million gallons) 36 35 24 25 120 59 57 116 Petrochemical Services Geismar ethylene sales volumes (million lbs) 246 211 10 — 467 — — — Geismar ethylene margin ($/lb) $ 0.37 $ 0.33 $ 0.05 $ — $ 0.34 $ — $ — $ — Canadian propylene sales volumes (millions lbs) 35 36 27 20 118 32 34 66 Canadian alky feedstock sales volumes (million gallons) 9 10 7 5 31 7 7 14 Overland Pass Pipeline Company LLC (equity investment) - 100% NGL Transportation volumes (Mbbls) 7,402 11,151 13,174 11,463 43,190 8,612 8,926 17,538
  • 22. 41 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Geismar Expansion and Modernization WPZ – NGL & Petchem Services > Objectives: – Bring the plant into sustainably safe operations – Restore Williams high standard of reliability – Deliver promised value to our shareholders > Expansion increases annual ethylene production capacity 50% to 1.95 billion lbs. – Williams’ share is 1.7 billion lbs., up 600MM lbs., + >50% Early Mover in the Industry Expansion Wave © 2014 The Williams Companies, Inc. All rights reserved. 42 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Geismar to Benefit from the Current Commodity Environment WPZ – NGL & Petchem Services Note: Historical CMAI spot prices for ethylene and ethane. Crack spread and ethane price stated before any co-product credits. ETHYLENE CRACK SPREAD $US/lb 20142009 2010 2011 2012 2013 Industry Crack Spread $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Ethane Cost Ethylene Spot Price
  • 23. 43 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Geismar Mitigates Declining Ethane to Crude Ratio WPZ – NGL & Petchem Services Note: Historical CMAI spot prices for ethylene and ethane converted to a $/barrel basis. ETHANE AND ETHYLENE RELATIONSHIP TO CRUDE 20142009 2010 2011 2012 2013 % of Crude 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Ethane as % of WTI Ethylene as % of WTI 44 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Our Canada Growth Story WPZ – NGL & Petchem Services > Existing asset position – Ft. McMurray Cryo at Suncor 26 Mbpd – Boreal Pipeline 43 Mbpd (expandable to 125 Mbpd) – The only pipeline capable of moving offgas liquids from the oil sands region to the Edmonton region > Upgrading product value – Aggregating more liquids from the oil sands – Increasing Boreal Pipeline utilization – Recovering ethane and ethylene > Environmental benefits – Reduces sulphur dioxide, CO2 emissions E i ti t VALUE DRIVERS Capitalizing on Our Competitive Advantages © 2014 The Williams Companies, Inc. All rights reserved.
  • 24. 45 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Propylene is Consistently the Top of the Value Chain WPZ – NGL & Petchem Services Note: Historical CMAI Gulf Coast spot prices converted to a $/MMBtu basis. OLEFINS PRODUCTION FROM NGLs AND OFFGAS RECOVERY ADDS SIGNIFICANT ADDITIONAL MARGIN POTENTIAL TO THE NATURAL GAS VALUE CHAIN $/MMBtu 20142009 2010 2011 2012 2013 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Gas Ethane Propane Crude Ethylene Propylene Propylene 46 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Canadian Operations Hold Distinct Feedstock Cost Advantage WPZ – NGL & Petchem Services Note: Historical CMAI spot pricing for propylene and propane and AECO pricing for natural gas. Assume 1.05 lbs of propane for each 1 lb of propylene cracked. OFFGAS PROPYLENE MARGIN $US/lb 20142009 2010 2011 2012 2013 Offgas Margin Industry Margin $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 $1.00 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Natural Gas Propane Cracking Propylene
  • 25. WPZ – West 48 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 West WPZ – West 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Revenues: Fee-based revenues: Gathering & processing $ 134 $ 141 $ 143 $ 144 $ 562 $ 132 $ 141 $ 273 Production handling and transportation 116 110 114 118 458 116 112 228 Other fee revenues 9 9 8 7 33 8 8 16 Commodity-based revenues: NGL sales from gas processing 142 137 151 128 558 103 95 198 Marketing sales 46 46 55 34 181 30 28 58 Other sales 10 7 8 8 33 12 9 21 Tracked revenues — 1 — 1 2 — 1 1 457 451 479 440 1,827 401 394 795 Intrasegment eliminations — — (1 ) — (1 ) — (1 ) (1 ) Total revenues 457 451 478 440 1,826 401 393 794 Segment costs and expenses: NGL cost of goods sold 44 51 54 40 189 38 35 73 Marketing cost of goods sold 46 46 55 33 180 30 27 57 Other cost of goods sold 4 2 2 3 11 4 6 10 Depreciation and amortization expenses 61 58 58 59 236 58 60 118 Other segment costs and expenses 116 131 103 118 468 106 113 219 Tracked costs — 1 — 1 2 — 1 1 Intrasegment eliminations — — (1 ) — (1 ) — (1 ) (1 ) Total segment costs and expenses 271 289 271 254 1,085 236 241 477 Reported segment profit 186 162 207 186 741 165 152 317 Adjustments — — — — — — 6 6 Adjusted segment profit $ 186 $ 162 $ 207 $ 186 $ 741 $ 165 $ 158 $ 323
  • 26. 49 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 West operating statistics WPZ – West 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Operating statistics Gathering and Processing Gathering volumes (Tbtu) 240 250 254 244 988 229 230 459 Plant inlet natural gas volumes (Tbtu) 295 305 310 264 1,174 249 246 495 Ethane equity sales (million gallons) 15 37 51 12 115 4 5 9 Non-ethane equity sales (million gallons) 102 106 110 89 407 69 71 140 NGL equity sales (million gallons) 117 143 161 101 522 73 76 149 Ethane margin ($/gallon) $ (0.03 )$ (0.01 )$ (0.02 )$ (0.001 )$ (0.02 ) $ 0.12 $ 0.22 $ 0.17 Non-ethane margin ($/gallon) $ 0.96 $ 0.81 $ 0.89 $ 0.99 $ 0.91 $ 0.94 $ 0.84 $ 0.89 NGL margin ($/gallon) $ 0.83 $ 0.60 $ 0.61 $ 0.86 $ 0.71 $ 0.89 $ 0.80 $ 0.84 Ethane production (million gallons) 98 124 139 89 450 60 86 146 Non-ethane production (million gallons) 262 281 294 246 1,083 233 232 465 NGL production (million gallons) 360 405 433 335 1,533 293 318 611 Northwest Pipeline LLC Throughput (Tbtu) 201.0 136.9 168.6 210.4 716.9 192.4 141.3 333.7 Avg. daily transportation volumes (Tbtu) 2.2 1.5 1.8 2.3 2.0 2.1 1.6 1.8 Avg. daily firm reserved capacity (Tbtu) 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 50 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 WPZ – West West G&P: Scale, Stability, Potential Growth > Large-scale positions provide competitive advantages > Business generating strong cash flows and driving efficiencies > Ability to quickly “throttle up” in improved commodity price environment – significant gas and liquids infrastructure in place > Customer base transitioning – more aggressive independent producers buying positions Piceance Basin > 328 miles of pipeline > 1.4 Bcf/d of gathering capacity > 1.7 Bcf/d of processing capacity Four Corners > 3,823 miles of pipeline > 1.8 Bcf/d of gathering capacity > 1.5 Bcf/d of processing/ treating capacity Wyoming > 3,587 miles of pipeline > 1.1 Bcf/d of gathering capacity > 2.2 Bcf/d of processing capacity Northwest Pipeline
  • 27. 51 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Fee-based Revenue Increasing; Gross Margin Mix Expected to Improve to 84% Fee-based by 2015 WPZ – West 1 2013 equity NGL margin includes a significant keep-whole contract that expired in September 2013. $0 $400 $800 $1,200 $1,600 2013 2014 2015 NWP Fee G&P Fee Commodity-based Fee NGL Margin Other GROSS MARGIN BY TYPE ($MM) > Fee-based revenue increasing, helping to drive improved gross margin mix > G&P fee-based business expected to grow 10% from 2013 to 2015 > Steady NWP fee business 1 52 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Expect to Continue Delivering Significant Volumes; Ethane Rejection Persists WPZ – West 0 500 1,000 1,500 2,000 2,500 3,000 3,500 2013 2014 2015 Gathering Plant Inlet GATHERING AND PLANT INLET VOLUMES 0 1 2 3 4 5 2013 2014 2015 Non-Ethane 3rd Party Ethane Equity Ethane NGL PRODUCTION MMBtu/day Gallons (Millions)/Day
  • 28. 53 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Northwest Pipeline: Backbone of the Pacific Northwest Gas Delivery System WPZ – West > Plentiful, diverse supply sources – British Columbia, Alberta, Rockies, San Juan > Sole provider in most major markets – Low-cost provider in competitive markets – Strong credit quality of customers > Long-term firm transportation capacity of 3.9 MMDt/d – Avg. remaining life – more than 9 years > Storage capacity – 14 MMdt of capacity – 731 Mdt/d of withdrawal capability > Assets – 3,900 mi. of pipeline and 41 compressor stations – 2 storage facilities > New rates were effective January 1, 2013 – Will remain in effect for min of 3 yrs. and max of 5 yrs. Spokane Boise Portland Seattle Northwest Pipeline 54 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Pacific Northwest Potential Market Growth Heating Up WPZ – West Blue = Proposed Expansion Projects (not included in guidance) Green = Potential new end-use markets announced by 3rd parties (may lead to additional expansion opportunities on Northwest) Boise Spokane Seattle Portland Jordan Cove Oregon LNG Magnida Fertilizer Up to 75 MDth/d Target ISD: 2017 Transfuels LNG Trucking @ Plymouth Up to 359K gal (30 MDth/d) Target ISD: 2014 Kalama Methanol Export Up to 320 MDth/d Target ISD: 2018 Port Westward Methanol Export Up to 320 MDth/d Target ISD: 2018 Portland General Up to 50 MDth/d Target ISD: 2015 TransAlta Coal Plant Up to 200 MDth/d Target ISD: 2020 Washington Expansion Up to 750 MDth/d Target ISD: 2018 Pacific Connector Gas Pipeline 1 Bcf/d Target ISD: 2018 > Announced New Market Opportunities – LNG Export – LNG Transportation – Methanol Export – Fertilizer Plants – New Electric Generation – Coal Conversion > Potential Projects – Pacific Connector – Washington Expansion > Wood Mackenzie Regional Demand Growth – 400 MDth/d by 2020 (excludes LNG and methanol export opportunities) Port of Tacoma Methanol Export Up to 320 MDth/d Target ISD: 2018
  • 29. Williams – NGL & Petchem Services 56 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Williams – NGL & Petchem Services Williams NGL & Petchem Services 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Segment costs and expenses: Operating and maintenance expenses $ 1 $ 1 $ 1 $ — $ 3 $ 2 $ 1 $ 3 Selling, general, and administrative expenses — — 3 3 6 22 4 26 Other (income) expense - net 1 — — 22 23 (1 ) 1 — Total segment costs and expenses 2 1 4 25 32 23 6 29 Equity earnings (losses) — — — — — (77 ) (2 ) (79 ) Reported segment profit (loss) (2 ) (1 ) (4 ) (25 ) (32 ) (100) (8 ) (108 ) Adjustments — — — 20 20 95 1 96 Adjusted segment profit (loss) $ (2 ) $ (1 ) $ (4 ) $ (5 ) $ (12 ) $ (5 ) $ (7 ) $ (12 )
  • 30. 57 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Williams – NGL & Petchem Services Agreement to Process CNRL’s Horizon Upgrader Offgas > Expected to add approximately 15 Mbpd of NGL/Olefins production (12 Mbpd by 4Q 2015; growing to 15 Mbpd by 2018) > Ethane price risk mitigated via previously announced agreement to supply NOVA up to 17 Mbpd of ethane and ethylene (includes price floor) > Total capex expected to be $500–600 million shared between WMB and WPZ > Expected in-service 4Q 2015 58 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Williams – NGL & Petchem Services Proposed Canada PDH Facility Would Convert Discounted Propane to High-value Product > First facility of its kind in Canada > Will produce 1.1 billion pounds of polymer grade propylene annually > Exploring opportunities that would see a propylene derivative plant built in close proximity to the PDH – PGP would be sold under a long-term fee-type arrangement to reduce risk profile of PDH project > Expected in-service 2nd half of 2018 – Relaxed construction schedule supports capital cost control – Potential to match PDH execution schedule and start-up date with derivative plant ALBERTA PROPANE DEHYDROGENATION
  • 31. 59 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 WMB / WPZ – NGL & Petchem Services New Plants Need New Logistics Services Williams Gulf Coast Petchem Services CURRENT MAJOR PROJECTS > Under construction: – WPZ ethane pipeline system expansion; expected fully in- service 3Q 2015 – WMB Texas Belle Pipeline: Isobutane, normal butane, C5+; expected in-service 4Q 2014 > Under development: – WMB Promesa: Ethylene Pipeline and Storage Hub Expansion – TX – WMB Jackrabbit: PGP Pipeline and Storage Hub Development © 2014 The Williams Companies, Inc. All rights reserved. Access Midstream Partners
  • 32. 61 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 ACMP Access Midstream Partners 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Equity earnings $ 17 $ 18 $ 22 $ 36 $ 93 $ 21 $ 22 $ 43 Less: Amortizations of equity investment basis differences 17 15 16 15 63 15 15 30 Total equity earnings — 3 6 21 30 6 7 13 Other investing income - net — 26 — 5 31 — 4 4 ACMP acquisition costs — — — — — — (2) (2) Reported segment profit — 29 6 26 61 6 9 15 Adjustments — (26 ) — (5 ) (31 ) — (2) (2) Adjusted segment profit $ — $ 3 $ 6 $ 21 $ 30 $ 6 $ 7 $ 13 Distributions received $ 20 $ 22 $ 22 $ 29 $ 93 $ 31 $ 33 $ 64 62 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 ACMP WMB Corporate Structure NYSE: WMB NYSE: ACMP Williams NGL & Petchem Services NYSE: WPZ LP 64% 100% of GP Interest, IDRs LP 50% 100% of GP Interest, IDRs
  • 33. 63 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 ACMP Source: Access Midstream August 2014 Investor Presentation PARTNERSHIP OVERVIEW 1 Gathering and processing master limited partnership formed in 2010 Leadership position in 9 unconventional basins in U.S. ~$13 billion market capitalization with 49% public float Williams owns 100% of the GP Wellhead Customer Wellhead Facilities/ Flowlines Gathering Systems Gathering Facilities Pipeline Transportation Access Midstream Partners Natural Gas Value Chain: Central Delivery Points Distribution Processing Facilities 64 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 ACMP Source: Access Midstream August 2014 Investor Presentation ACMP INVESTMENT HIGHLIGHTS Low Risk Business Model • Fixed fee revenue model with no direct commodity price exposure • Contractual structure creates cash flow stability and visibility Industry Leading Growth • ~$4.3B of CAPEX in 2013 - 2016 generating contractual mid-teens return • Broad footprint creates many new customer opportunities Conservative Financial Strategy • Maintain strong liquidity and a conservative balance sheet • Target investment grade financial metrics to optimize cost of capital Experienced Management Team • Same team that has delivered industry leading performance since IPO • Dedicated and experienced with a proven midstream track record World Class Sponsorship • Williams brings expertise across midstream value chain • Benefit from best practices from industry leader 3
  • 34. 65 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 ACMP Source: Access Midstream August 2014 Investor Presentation LOW RISK BUSINESS MODEL VVolume & Capital MVC and long-term acreage dedications Rate redetermination, cost of service and fee tiers Conservative maintenance capital Commodity & Basin 100% fixed-fee revenues Commitment to maintain contract structure / business model as business grows Concentrated in low cost basins Re-Contracting Arms-length, 10-20 year contracts at market rates Critical infrastructure providing access to market Dedicated acreage Considerations Mitigants Confidential 4 66 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 ACMP Source: Access Midstream August 2014 Investor Presentation EXPANDING ASSET BASE 5 1) Data as of quarter ended June 30, 2014. Volume is net to Partnership. HIGH QUALITY, SCALABLE ASSET BASE IN HIGH GROWTH UNCONVENTIONAL PLAYS Key Operating Data(1) Total Assets: ~$8.5 billion Dedicated Areas: ~8.3 million acres Miles of Pipe: 6,495 Volume: 3,918 mmcf/d Employees: ~1,500
  • 35. 67 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 ACMP Source: Access Midstream August 2014 Investor Presentation. * A reconciliation of this non-GAAP measure can be found on ACMP’s website. 2011A 2012A 2013A 2014E 2015E 2016E $859 $1,025-$1,125 $478 $349 $1,250-$1,350 $1,400-$1,600 OUR GROWTH FOCUS 6 Organic growth • ~$4.3 billion in 2013-2016 • Substantial processing investment Business development growth • New producer opportunities • Bolt-on acquisitions Contractual growth • Escalating minimum volume commitments • Long-term, cost of service fee structures 2011A 2012A 2013A 2014E 2015E 2016E Growth CAPEX $1,100-$1,200 $345 $660 $900-$1,000 $600-$800 $1,468 $ in millions EBITDA Growth $ in millions * Corporate
  • 36. 69 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Other Petchem Svs. Projects – $240 Pipeline Acq. & Related Petchem Svs. Proj. – $400 Canadian Ethane Recovery – $570 CNRL Upgrader – $360 Canadian PDH - Not Disclosed Parachute Plant Expansion – $200 CNRL Upgrader – $165 Geismar Expansion – $785 Gunflint – $140 Garden State - $150 Mid-South Expansion – $200 Rockaway Lateral – $230 Dalton Lateral – $275 Constitution Pipeline 41% Ownership – $300 Hillabee Expansion (Phase 1) – $280 Gulf Trace – $300 Virginia South Side – $300 NE Supply Link – $390 Keathley Canyon Connector 60% Ownership – $460 Gulfstar 51% Ownership – $600 Leidy SE – $600 Atlantic Sunrise ($2,100 Transco share) – $2,100 Three Rivers Utica JV – (Blue Racer Midstream) Susquehanna Supply Hub Ohio Valley MidstreamOhio Valley Mi PROJECT DESCRIPTION AND EST. CAPEX $ IN MILLIONS (EXCLUDES ACMP PROJECTS) EXPECTED REMAINING TIME TO IN-SERVICE DATE* Corporate *Actual in-service date often dependent on customer readiness, regulatory approvals, and other factors outside our control. The amounts listed for the Northeast represent the midpoint of capex and investment guidance for 2013-2016. Amounts for other projects represent total expected capital expenditures, including amounts invested prior to 2013. Strategic, Large-Scale, Primarily Fee-Based Cash Flows Driving Growth > Target IRRs > Fee-based 13%-25% > Commodity-exposed 25%+ Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 2017 WPZ Northeast WPZ Atlantic/Gulf WPZ NGL/Petchem WMB NGL/Petchem WPZ West Investing $1,800 2013 through 2016 Investing $1,300 2013 through 2016 Investing $420 2013 through 2015 Spending under review pending analysis of drilling plans Phase 2 70 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Strong Fundamentals and Competitive Advantages Drive Robust, Visible Growth Growth Investment Spending by Operating Area 1 Guidance presented here is at the midpoint of ranges. 2 No capital included for ACMP beyond guidance period. NGL & Petchem (WMB) Atlantic-Gulf (WPZ) West (WPZ) In guidance1 In guidance 1 Under negotiation In guidance1 Under negotiation Potential ~$10 BILLION ~$17 BILLION $25 BILLION+ 2014–2016 2014–2019 Corporate NGL & Petchem (WPZ) Northeast G&P (WPZ) ACMP2
  • 37. 71 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Corporate WMB Total Gross Margin1 Notes: 2013 has been recast to reflect the Canadian asset drop-down completed in 1Q 2014. 2013 includes proceeds from business interruption insurance claim for the Geismar incident of $123 million. Williams NGL & Petchem Services is targeted for dropdown in late 2014 / early 2015. 1Gross margin is gross revenues less related product costs and certain regulated revenues, which are related to tracked operating costs. WPZ unregulated fee revenue includes certain variable fee based revenues (margin-sharing fees) that are immaterial to the total. Expect Fee-Based Revenues to Grow by More than 120% and Account for More than 81% of Business WPZ – Regulated Fee Revenue WPZ – Unregulated Fee Revenue Non-ethane Margin Ethane Margin Olefins Margin 2013 ACTUAL $3.8 BILLION 2016 FORECAST $7.7 BILLION 43% 32% 14% 11% 0% 26% 30%5% <1% 11% 25% 1% 1% ACMP Fee Revenue Williams NGL & Petchem Fee Revenue Commodity Margin 1%<1% 72 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 WPZ’s Expected Growth Drives 58% Increase in Cash Distributions to WMB Notes: 1 A more detailed schedule reconciling this non-GAAP measure is provided in this presentation. 2 Distributions reflect per-unit increases of 6% annually in 2014 and 2015, and 4.5% in 2016 (midpoint of guidance). Williams owns an approximate 64 percent limited partner interest, a 2 percent general partner interest and the incentive distribution rights (IDRs). (Midpoint of guidance, dollars in millions) WPZ ADJUSTED SEGMENT PROFIT + DD&A1 WPZ DISTRIBUTIONS TO WILLIAMS2 (ACCRUED BASIS) 2,589 2,920 3,865 4,355 0 1,000 2,000 3,000 4,000 5,000 2013 2014 2015 2016 19% CAGR 0 1,000 2,000 3,000 2013 2014 2015 2016 16% CAGR 2,283 1,448 1,775 2,007 LP 9% CAGR GP/IDRs 29% CAGR > WPZ business expected to grow 68% (19% CAGR) – GP / IDRs expected to grow 115% (29% CAGR) Corporate
  • 38. 73 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 ACMP Expected Growth Drives Nearly 500% Increase in Cash Distributions to WMB Through 2016 Corporate (Dollars in millions) > ACMP business expected to grow 75% (20% CAGR) – GP / IDRs expected to grow 1,246% (138% CAGR) ACMP ADJUSTED EBITDA1 ACMP DISTRIBUTIONS TO WILLIAMS (ACCRUED BASIS) 859 1,075 1,300 1,500 0 250 500 750 1,000 1,250 1,500 1,750 2013 2014 2015 2016 104 288 481 613 0 100 200 300 400 500 600 700 2013 2014 2015 2016 LP 58% CAGR GP/IDRs 138% CAGR 20% CAGR 81% CAGR Note: 1 Prior to July 1, 2014, Williams ownership in ACMP was 50% of the GP and 23% of the LP. Beginning July 1, 2014, Williams ownership increased to 100% of the GP and 50% of the LP. A reconciliation of this non-GAAP measure can be found on ACMP’s website. 74 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Planning Williams 3Q 2014 Dividend Up 32% to $0.56, or $2.24 on an Annualized Basis; $2.46 for 2015, With Follow-on Annual Dividend Growth of Approximately 15% through 2017 Note: 1 Detailed illustrative dividend and coverage calculations are included in the presentation. CASH DIVIDENDS PER SHARE GROWTH 2010–2017 CAGR OF 31%1 ILLUSTRATIVE EXCESS CASH FLOW AVAILABLE & COVERAGE RATIO $0.49 $0.78 $1.20 $1.44 $1.96 $2.46 $2.82 $3.25 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 2010 2011 2012 2013 2014 2015 2016 2017 Actual Guidance (millions) $0 $1,000 $2,000 $3,000 2014 2015 2016 1.20x 1.21x 1.18x Expected Cash Flow Available After Dividends Expected Dividends Paid Corporate
  • 39. 75 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Expect Strong Annual Dividend Growth With Substantial Cash Coverage Notes: 1 Targeted for dropdown in late 2014 / early 2015. See Williams NGL & Petchem Services Adjusted Cash Flow slide in appendix for additional details. 2 Near-term tax rates are lower than longer-term rates due to accelerated depreciation and deductions related to our investment in ACMP. The average tax rate for 2017–2019 is expected to be approximately 14%, which represents a blended rate on WPZ / ACMP distributions, WMB NGL Petchem earnings, and corporate interest expense as well other tax items impacting the WMB corporate entity. 3 Excludes transition costs related to integration of ACMP 4 WMB Cash Flow Available for Dividends / WMB Expected Dividends Paid. DIVIDEND ILLUSTRATION AND COVERAGE CALCULATION (Midpoint of guidance, dollars in millions except per share amounts) 2014 2015 2016 2017 Distributions from WPZ (accrued / "as declared" basis) $1,775 $2,007 $2,283 Distributions from ACMP (accrued / "as declared" basis) 288 481 613 Total Distributions from WPZ and ACMP 2,063 2,488 2,896 Williams NGL & Petchem Services Adjusted Cash Flow 1 (20) 103 103 Corporate Interest (205) (257) (255) Subtotal 1,838 2,334 2,743 WMB Cash Tax Rate 2 3% 2% 6% WMB Cash Taxes (excludes cash taxes paid by WPZ & ACMP) (56) (48) (178) Corporate Capex and Other 3 (55) (40) (40) WMB Cash Flow Available for Dividends $1,727 $2,246 $2,525 - per share $2.35 $2.98 $3.34 WMB Expected Dividends Paid (1,440) (1,851) (2,134) Excess Cash Flow Available After Dividends $287 $395 $391 Coverage Ratio 4 1.20x 1.21x 1.18x Dividend Per Share $1.96 $2.46 $2.82 $3.25 Annual Grow th Rate 36% 26% 15% 15% Corporate 76 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Williams NGL & Petchem Services Positioned to Contribute to Dividend Growth Corporate WILLIAMS NGL & PETCHEM SERVICES ADJUSTED CASH FLOW (DOLLARS IN MILLIONS) 2014 Guidance 2015 Guidance 2016 Guidance Low Midpoint High Low Midpoint High Low Midpoint High Segment Profit ($116) ($114) ($111) $80 $90 $105 $80 $90 $105 Adjustments 1 96 96 96 - - - - - - DD&A 5 5 5 25 25 25 25 25 25 Maintenance Capex (5) (5) (5) (5) (5) (5) (5) (5) (5) General Corp Costs – (3) (5) (5) (8) (10) (5) (8) (10) Adjusted Cash Flow ($20) ($20) ($20) $95 $103 $110 $95 $103 $110 Note: Segment targeted for dropdown in late 2014 / early 2015 1 A detailed schedule of adjustments is provided in this presentation.
  • 40. 77 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 2014-2016 capital expenditures guidance Notes: If guidance has changed, previous guidance is shown in italics directly below. Includes purchases of property, plant & equipment; investments; and businesses. Capex for 2014 excludes acquisition of ACMP. 1 ACMP capex guidance is net of contributions from noncontrolling interests. 2 Targeted for dropdown in late 2014 / early 2015. 2014 2015 2016 Guidance Guidance Guidance Williams Partners (WPZ) $3,445 - 4,015 $2,195 - 2,705 $2,050 - 2,510 3,370 - 3,940 Access Midstream Partners (ACMP) 1 590 - 690 1,030 - 1,130 730 - 930 0 0 0 Williams NGL & Petchem Services 2 405 - 505 70 - 80 275 - 365 380 - 480 455 - 605 Other / Corporate 50 - 60 40 40 25 25 Total capital expenditures $4,490 - 5,270 $3,335 - 3,955 $3,095 - 3,845 3,825 - 4,505 2,600 - 3,210 2,530 - 3,140 Dollars in millions Corporate 78 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Tax Rates Corporate Dollars in millions 1Q 2014 2Q 2014 2014 Year-to-Date Provision (benefit) at statutory rate $86 35% $73 35% $159 35% Increases (decreases) in taxes resulting from: Impact of nontaxable noncontrolling interests -20 -8% -5 -3% -25 -6% Completion of the Canada dropdown -23 -9% 12 6% -11 -2% State income taxes (net of federal benefit) 5 2% 2 1% 7 2% Other-net 3 1% 2 1% 5 1% Provision (benefit) for income taxes $51 21% $84 40% $135 30% Rates Below Are Based On Income From Continuing Operations Before Income Taxes 2014 2015 2016 Full Year Effective Tax Rate Guidance 26–28% 27–29% 26-28%
  • 41. 79 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 PROPANE ($/Gallon) ETHYLENE ($/Pound) Commodity Price Assumptions Corporate NATURAL GAS – HENRY HUB ($/MMBtu) ETHANE ($/Gallon) $0.40 $0.60 $0.80 2012 2013 2014 2015 2016 $2.00 $3.00 $4.00 $5.00 2012 2013 2014 2015 2016 $0.00 $0.20 $0.40 $0.60 2012 2013 2014 2015 2016 $0.75 $1.00 $1.25 $1.50 2012 2013 2014 2015 2016 (Low / High guidance) 80 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 NG Ethane Propane C4+ Ethylene Propylene 3 2014 WPZ 1 + $.10/Mmbtu ($3.7) + $.01/gallon ($2.2) $1.7 $1.3 + $.01/pound $7.6 $1.1 Williams NGL & Petchem Services 2 + $.10/Mmbtu $0.0 + $.01/gallon $0.0 $0.0 $0.0 + $.01/pound $0.0 WMB + $.10/Mmbtu ($3.7) + $.01/gallon ($2.2) $1.7 $1.3 + $.01/pound $7.6 $1.1 Notes: Includes equity volumes, commodity exposed fee contracts, and hedges. 1 WPZ includes equity volumes from RGP Splitter, Geismar and the impact of fixed margin contracts. 2 For 2014 and 2015, equity volumes from Canada are included in WPZ, except for those volumes reated to CNRL, which are included in Williams NGL & Petchem Services. 3 Excludes volumes associated with RGP Splitter. Sensitivities to price changes (millions) NG Ethane Propane C4+ Ethylene Propylene 3 2015 WPZ 1 + $.10/Mmbtu ($6.6) + $.01/gallon ($4.6) $3.5 $2.5 + $.01/pound $14.9 $2.1 Williams NGL & Petchem Services 2 + $.10/Mmbtu ($1.1) + $.01/gallon $0.5 $0.3 $0.1 + $.01/pound $0.6 WMB + $.10/Mmbtu ($7.7) + $.01/gallon ($4.1) $3.8 $2.5 + $.01/pound $14.9 $2.7 Corporate
  • 42. 81 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Corporate Consolidated statement of income 2013 2014 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Revenues: Service revenues $ 706 $ 721 $ 736 $ 776 2,939 $ 819 $ 825 $ 1,644 Product sales 1,104 1,046 887 884 3,921 930 853 1,783 Total revenues 1,810 1,767 1,623 1,660 6,860 1,749 1,678 3,427 Costs and expenses: Product costs 790 801 710 726 3,027 769 724 1,493 Operating and maintenance expenses 260 291 269 277 1,097 298 308 606 Depreciation and amortization expenses 201 198 207 209 815 214 214 428 Selling, general, and administrative expenses 132 123 130 127 512 150 136 286 Net insurance recoveries - Geismar Incident — — (50) 10 (40) (119) (42) (161) Other (income) expense - net 1 4 21 48 74 17 27 44 Total costs and expenses 1,384 1,417 1,287 1,397 5,485 1,329 1,367 2,696 Equity earnings (losses) 18 38 37 41 134 (48) 37 (11) Income (loss) from investments (1 ) 25 (1) 5 28 — 4 4 General corporate expenses 44 43 40 37 164 40 43 83 Total segment profit (loss) 487 456 412 346 1,701 412 395 807 Reclass equity earnings (losses) (18 ) (38 ) (37) (41 ) (134) 48 (37) 11 Reclass income (loss) from investments 1 (25 ) 1 (5 ) (28) — (4) (4) Reclass general corporate expenses (44 ) (43 ) (40 ) (37 ) (164 ) (40) (43) (83) Operating income (loss) 426 350 336 263 1,375 420 311 731 Equity earnings (losses) 18 38 37 41 134 (48) 37 (11) Interest incurred (152 ) (151 ) (151) (157) (611) (169) (192) (361) Interest capitalized 24 24 27 26 101 29 29 58 Other investing income - net 13 39 10 19 81 14 18 32 Other income (expense) - net (2 ) 2 1 (1) — 1 4 5 Income (loss) from continuing operations before income taxes 327 302 260 191 1,080 247 207 454 Provision (benefit) for income taxes 96 102 62 141 401 51 84 135 Income (loss) from continuing operations 231 200 198 50 679 196 123 319 Income (loss) from discontinued operations (1 ) (8) (1) (1) (11) — 4 4 Net income (loss) 230 192 197 49 668 196 127 323 Less: Net income attributable to noncontrolling interests 69 50 56 63 238 56 24 80 Net income (loss) attributable to The Williams Companies, Inc. $ 161 $ 142 $ 141 $ (14 ) $ 430 $ 140 $ 103 $ 243 82 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Corporate Consolidated statement of income cont’d 2013 2014 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Amounts attributable to The Williams Companies, Inc.: Income (loss) from continuing operations $ 162 $ 149 $ 143 $ (13 ) $ 441 $ 140 $ 99 $ 239 Income (loss) from discontinued operations (1 ) (7 ) (2 ) (1 ) (11 ) — 4 4 Net income (loss) $ 161 $ 142 $ 141 $ (14 ) $ 430 $ 140 $ 103 $ 243 Diluted earnings (loss) per common share: Income (loss) from continuing operations $ 0.23 $ 0.22 $ 0.20 $ (0.02 ) $ 0.64 $ 0.20 $ 0.14 $ 0.34 Income (loss) from discontinued operations — (0.01 ) — — (0.02 ) — 0.01 0.01 Net income (loss) $ 0.23 $ 0.21 $ 0.20 $ (0.02 ) $ 0.62 $ 0.20 $ 0.15 $ 0.35 Weighted-average number of shares used in computations (thousands) 687,143 686,924 687,306 683,552 687,185 688,904 700,696 694,832 Common shares outstanding at end of period (thousands) 682,591 683,063 683,334 683,777 683,777 685,419 747,190 747,190 Market price per common share (end of period) $ 37.46 $ 32.47 $ 36.36 $ 38.57 $ 38.57 $ 40.58 $ 58.21 $ 58.21 Common dividends per share $ 0.33875 $ 0.3525 $ 0.36625 $ 0.38 $ 1.4375 $ 0.4025 $ 0.4250 $ 0.8275 Note: The sum of earnings (loss) per share for the quarters may not equal the total earnings (loss) per share for the year due to changes in the weighted-average number of common shares outstanding.
  • 43. 83 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Corporate Capital expenditures and investments 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Capital expenditures: Williams Partners $ 703 $ 791 $ 928 $ 894 $ 3,316 $ 724 $ 943 $ 1,667 Williams NGL & Petchem Services 5 23 74 128 230 61 85 146 Other 5 3 10 8 26 8 18 26 Total* $ 713 $ 817 $ 1,012 $ 1,030 $ 3,572 $ 793 $ 1,046 $ 1,839 Purchase of businesses: Other $ — $ — $ — $ 6 $ 6 $ — $ — $ — Purchase of investments: Williams Partners $ 93 $ 89 $ 162 $ 95 $ 439 $ 215 $ 16 $ 231 Williams NGL & Petchem Services — 2 — 10 12 13 2 15 Other — 4 — — 4 — — — Total $ 93 $ 95 $ 162 $ 105 $ 455 $ 228 $ 18 $ 246 Summary: Williams Partners $ 796 $ 880 $ 1,090 $ 989 $ 3,755 $ 939 $ 959 $ 1,898 Williams NGL & Petchem Services 5 25 74 138 242 74 87 161 Other 5 7 10 14 36 8 18 26 Total $ 806 $ 912 $ 1,174 $ 1,141 $ 4,033 $ 1,021 $ 1,064 $ 2,085 Capital expenditures incurred and purchase of investments: Increases to property, plant, and equipment $ 732 $ 873 $ 1,080 $ 968 $ 3,653 $ 840 $ 949 $ 1,789 Purchase of businesses — — — 6 6 — — — Purchase of investments 93 95 162 105 455 228 18 246 Total $ 825 $ 968 $ 1,242 $ 1,079 $ 4,114 $ 1,068 $ 967 $ 2,035 *Increases to property, plant, and equipment $ 732 $ 873 $ 1,080 $ 968 $ 3,653 $ 840 $ 949 $ 1,789 Changes in related accounts payable and accrued liabilities (19 ) (56 ) (68 ) 62 (81 ) (47) 97 50 Capital expenditures $ 713 $ 817 $ 1,012 $ 1,030 $ 3,572 $ 793 $ 1,046 $ 1,839 84 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Corporate Depreciation and amortization and other selected financial data 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Depreciation and amortization: Williams Partners $ 196 $ 191 $ 201 $ 203 $ 791 $ 208 $ 207 $ 415 Other 5 7 6 6 24 6 7 13 Total $ 201 $ 198 $ 207 $ 209 $ 815 $ 214 $ 214 $ 428 Other selected financial data: Cash and cash equivalents $ 702 $ 824 $ 732 $ 681 $ 681 $ 1,064 $ 860 $ 860 Total assets $ 24,816 $ 25,657 $ 26,455 $ 27,142 $ 27,142 $ 28,306 $ 34,949 $ 34,949 Capital structure: Debt Commercial paper $ — $ 710 $ 371 $ 225 $ 225 $ — $ — $ — Current $ 1 $ 1 $ 1 $ 1 $ 1 $ 751 $ 751 $ 751 Noncurrent $ 10,610 $ 10,359 $ 10,359 $ 11,353 $ 11,353 $ 12,099 $ 15,539 $ 15,539 Stockholders’ equity $ 4,795 $ 4,694 $ 4,948 $ 4,864 $ 4,864 $ 4,616 $ 7,863 $ 7,863 Debt to debt-plus-stockholders’ equity ratio 68.9 % 70.2 % 68.4 % 70.4 % 70.4 % 73.6 % 67.4 % 67.4 % Cash distributions received from interests in: Williams Partners L.P. General partner $ 113 $ 122 $ 131 $ 58 $ 424 $ 164 $ 170 $ 334 Limited partner 228 237 242 245 952 250 252 502 $ 341 $ 359 $ 373 $ 303 $ 1,376 $ 414 $ 422 $ 836 Access Midstream Partners, L.P. General partner $ 2 $ 3 $ 3 $ 7 $ 15 $ 9 $ 10 $ 19 Limited partner 18 19 19 22 78 22 23 45 $ 20 $ 22 $ 22 $ 29 $ 93 $ 31 $ 33 $ 64 $ 361 $ 381 $ 395 $ 332 $ 1,469 $ 445 $ 455 $ 900
  • 44. WMB Non-GAAP Reconciliations 86 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 WMB Non-GAAP Reconciliations > This presentation includes certain financial measures – adjusted segment profit, adjusted segment profit + DD&A, adjusted income from continuing operations (“earnings”) and adjusted earnings per share – that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission. Adjusted segment profit, adjusted earnings and adjusted earnings per share measures exclude items of income or loss that the company characterizes as unrepresentative of its ongoing operations and may include assumed business interruption insurance related to the Geismar plant. Management believes these measures provide investors meaningful insight into the company's results from ongoing operations. > 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 widely accepted financial indicators used by investors to compare a company’s performance. In addition, management believes that these measures provide investors an enhanced perspective of the operating performance of the company and aid investor understanding. Neither adjusted segment profit, adjusted segment profit + DD&A, adjusted earnings nor adjusted earnings per share measures are intended to represent an alternative to segment profit, net income or earnings per share. 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. WMB Non-GAAP Disclaimer
  • 45. 87 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 WMB non-GAAP reconciliation schedule WMB Non-GAAP Reconciliations 2013 2014 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Income (loss) from continuing operations attributable to The Williams Companies, Inc. available to common stockholders $ 162 $ 149 $ 143 $ (13) $ 441 $ 140 $ 99 $ 239 Income (loss) from continuing operations - diluted earnings per common share $ .23 $ .22 $ .20 $ (.02) $ .64 $ .20 $ .14 $ .34 Adjustments: Williams Partners Net loss (recovery) related to Eminence storage facility leak $ — $ (5) $ 5 $ (2) $ (2) $ — $ — $ — Share of impairments at equity method investee — — — 7 7 — — — Contingency loss (gain) (6) — 9 16 19 — — — Loss related to Geismar Incident — 6 4 4 14 — — — Geismar Incident adjustment for insurance and timing — — (35 ) 118 83 54 96 150 Loss related to compressor station fire — — — — — 6 — 6 Impairment of certain equipment held for sale — — — — — — 17 17 Loss related to Opal incident — — — — — — 6 6 Total Williams Partners adjustments (6) 1 (17 ) 143 121 60 119 179 Williams NGL & Petchem Services Write-off of abandoned project — — — 20 20 — — — Bluegrass Pipeline project development costs - (100% consolidated) — — — — — 19 — 19 Bluegrass Pipeline and Moss Lake project development costs (50% equity investment losses) — — — — — 6 1 7 Equity investment losses related to Bluegrass Pipeline and Moss Lake write-offs — — — — — 70 — 70 Total Williams NGL & Petchem Services adjustments — — — 20 20 95 1 96 Access Midstream Partners Gain associated with ACMP equity issuance — (26 ) — (5 ) (31 ) — (4) (4) Acquisition-related expenses — — — — — — 2 2 Total Access Midstream Partners adjustments — (26 ) — (5 ) (31 ) — (2) (2) Adjustments included in segment profit (loss) (6 ) (25 ) (17 ) 158 110 155 118 273 88 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 WMB non-GAAP reconciliation schedule cont’d WMB Non-GAAP Reconciliations 2013 2014 (Dollars in millions, except per-share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Adjustments below segment profit (loss) Reorganization-related costs 2 — — — 2 — — — Acquisition-related financing expenses - Access Midstream Partners — — — — — — 9 9 Interest income on receivable from sale of Venezuela assets - Other (13 ) (13 ) (11 ) (13 ) (50 ) (13) (14) (27) Allocation of adjustments to noncontrolling interests 5 4 9 (46 ) (28 ) (25) (36) (61) (6 ) (9 ) (2 ) (59 ) (76 ) (38) (41) (79) Total adjustments (12 ) (34 ) (19 ) 99 34 117 77 194 Less tax effect for above items 1 10 4 (39 ) (24 ) (47) (32) (79) Adjustments for tax-related items [1] 1 4 2 101 108 (20) 14 (6) Adjusted income from continuing operations available to common stockholders $ 152 $ 129 $ 130 $ 148 $ 559 $ 190 $ 158 $ 348 Adjusted diluted earnings per common share [2] $ .22 $ .19 $ .19 $ .22 $ .81 $ .28 $ .23 $ .50 Weighted-average shares - diluted (thousands) 687,143 686,924 687,306 687,712 687,185 688,904 700,696 694,832 [1] The fourth quarter of 2013 includes a favorable adjustment to reflect taxes on undistributed earnings of certain foreign operations that are no longer considered permanently reinvested. The first quarter of 2014 includes an unfavorable adjustment related to completing the dropdown of certain Canadian operations to Williams Partners. The second quarter of 2014 includes a favorable adjustment to reflect taxes on undistributed earnings of certain foreign operations that are no longer considered permanently reinvested. [2] Interest expense, net of tax, associated with our convertible debentures has been added back to adjusted income from continuing operations available to common stockholders to calculate adjusted diluted earnings per common share. Note: 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.
  • 46. 89 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Non-GAAP reconciliation schedule– adjusted segment profit (loss) and adjusted segment profit +DD&A WMB Non-GAAP Reconciliations 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Segment profit (loss): Williams Partners $ 494 $ 427 $ 411 $ 345 $ 1,677 $ 503 $ 393 $ 896 Williams NGL & Petchem Services (2 ) (1 ) (4 ) (25 ) (32 ) (100 ) (8 ) (108 ) Access Midstream Partners — 29 6 26 61 6 9 15 Other (5 ) 1 (1) — (5 ) 3 1 4 Total segment profit (loss) $ 487 $ 456 $ 412 $ 346 $ 1,701 $ 412 $ 395 $ 807 Segment adjustments: Williams Partners $ (6 )$ 1 $ (17 )$ 143 $ 121 $ 60 $ 119 $ 179 Williams NGL & Petchem Services — — — 20 20 95 1 96 Access Midstream Partners — (26 ) — (5 ) (31 ) — (2 ) (2 ) Other — — — — — — — — Total segment adjustments $ (6 ) $ (25 ) $ (17 ) $ 158 $ 110 $ 155 $ 118 $ 273 Adjusted segment profit (loss): Williams Partners $ 488 $ 428 $ 394 $ 488 $ 1,798 $ 563 $ 512 $ 1,075 Williams NGL & Petchem Services (2 ) (1 ) (4 ) (5 ) (12 ) (5 ) (7 ) (12 ) Access Midstream Partners — 3 6 21 30 6 7 13 Other (5 ) 1 (1) — (5 ) 3 1 4 Total adjusted segment profit (loss) $ 481 $ 431 $ 395 $ 504 $ 1,811 $ 567 $ 513 $ 1,080 90 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Non-GAAP reconciliation schedule– adjusted segment profit (loss) and adjusted segment profit +DD&A WMB Non-GAAP Reconciliations 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Depreciation and amortization (DD&A): Williams Partners $ 196 $ 191 $ 201 $ 203 $ 791 $ 208 $ 207 $ 415 Williams NGL & Petchem Services — — — — — — 1 1 Access Midstream Partners* 17 15 16 15 63 15 15 30 Other 5 7 6 6 24 6 6 12 Total depreciation and amortization $ 218 $ 213 $ 223 $ 224 $ 878 $ 229 $ 229 $ 458 Adjusted segment profit (loss) + DD&A: Williams Partners $ 684 $ 619 $ 595 $ 691 $ 2,589 $ 771 $ 719 $ 1,490 Williams NGL & Petchem Services (2 ) (1 ) (4 ) (5 ) (12 ) (5 ) (6 ) (11 ) Access Midstream Partners 17 18 22 36 93 21 22 43 Other — 8 5 6 19 9 7 16 Total adjusted segment profit (loss) + DD&A $ 699 $ 644 $ 618 $ 728 $ 2,689 $ 796 $ 742 $ 1,538 * DD&A adjustment for Access Midstream Partners reflects the amortization of the basis difference between Williams’ investment and its proportional share of the underlying net assets. Note: Segment profit (loss) includes equity earnings (losses) and income (loss) from investments reported in other investing income - net in the Consolidated Statement of Income. Equity earnings (losses) results from investments accounted for under the equity method. Income (loss) from investments results from the management of certain equity investments.
  • 47. 91 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 WMB 2014 schedule of expected adjustments (dollars in millions) WMB Non-GAAP Reconciliations Segment Profit Adjustments: 2014 Williams Partners (WPZ) Loss related to compressor station fire $6 Impairment of certain equipment held for sale 17 Loss related to Opal incident 6 Geismar incident adjustment for insurance and timing (115) Other (136) Total Williams Partners adjustments (222) NGL & Petchem Services Bluegrass Pipeline project development costs (100% consolidated) 19 Bluegrass Pipeline and Moss Lake project development costs (50% equity investment losses) 7 Equity investment losses related to Bluegrass Pipeline and Moss Lake write-offs 70 Total NGL & Petchem Services adjustments 96 Access Midstream Partners Gain associated with ACMP equity issuance (4) Acquisition-related expenses 2 Total Access Midstream Partners (2) Other Total "Other" adjustments 0 Adjustments included in segment profit (loss) ($128) WPZ Non-GAAP Reconciliations
  • 48. 93 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 WPZ Non-GAAP Disclaimer WPZ Non-GAAP Reconciliations > This presentation includes certain financial measures, adjusted segment profit, adjusted segment profit + DD&A, 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. > For Williams Partners L.P., adjusted segment profit excludes items of income or loss that we characterize as unrepresentative of our ongoing operations and may include assumed business interruption insurance related to the Geismar plant. Adjusted segment profit + DD&A is further adjusted to add back depreciation and amortization expense. Management believes these measures provide investors meaningful insight into Williams Partners L.P.'s results from ongoing operations. > For Williams Partners L.P. we define distributable cash flow as net income plus depreciation and amortization and cash distributions from our equity investments less our earnings from equity investments, income attributable to noncontrolling interests and maintenance capital expenditures. We also adjust for reimbursements under omnibus agreements with Williams and certain other adjustments. Total distributable cash flow is reduced by any amounts associated with operations which occurred prior to our ownership of the underlying assets to arrive at distributable cash flow attributable to partnership operations. > For Williams Partners L.P. we also calculate the ratio of distributable cash flow attributable to partnership operations 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 the Partnership’s assets and the cash that the business is generating. Neither adjusted segment profit, adjusted segment profit + DD&A, 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. 94 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Reconciliation of non-GAAP distributable cash flow to GAAP net income WPZ Non-GAAP Reconciliations 2013 2014 (Dollars in millions, except coverage ratios) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Williams Partners L.P. Reconciliation of Non-GAAP “Distributable cash flow” to GAAP “Net income” Net income $ 344 $ 272 $ 289 $ 218 $ 1,123 $ 352 $ 234 $ 586 Income attributable to noncontrolling interests — — — (3 ) (3 ) — (2 ) (2 ) Depreciation and amortization 196 191 201 203 791 208 207 415 Non-cash amortization of debt issuance costs included in interest expense 3 4 4 3 14 4 3 7 Equity earnings from investments (18 ) (35 ) (31 ) (20 ) (104 ) (23 ) (32 ) (55 ) Allocated reorganization-related costs 2 — — — 2 — — — Impairment of certain equipment held for sale — — — — — — 17 17 Loss related to Geismar Incident — 6 4 4 14 — — — Geismar Incident adjustment for insurance and timing — — (35 ) 118 83 54 96 150 Contingency loss — — 9 16 25 — — — Reimbursements from Williams under omnibus agreements 4 4 2 3 13 3 4 7 Loss related to Opal incident — — — — — — 6 6 Plymouth incident adjustment — — — — — — 3 3 Canadian income tax — — — — — — 4 4 Maintenance capital expenditures (44 ) (76 ) (79 ) (59 ) (258 ) (36 ) (90 ) (126 ) Distributable cash flow excluding equity investments 487 366 364 483 1,700 562 450 1,012 Plus: Equity investments cash distributions to Williams Partners L.P. 38 41 34 41 154 43 54 97 Distributable cash flow 525 407 398 524 1,854 605 504 1,109 Less: Pre-partnership distributable cash flow 28 20 20 15 83 23 — 23 Distributable cash flow attributable to partnership operations $ 497 $ 387 $ 378 $ 509 $ 1,771 $ 582 $ 504 $ 1,086 Total cash distributed $ 473 $ 489 $ 442 $ 556 $ 1,960 $ 566 $ 577 $ 1,143 Coverage ratios: Distributable cash flow attributable to partnership operations divided by Total cash distributed 1.05 0.79 0.86 0.92 0.90 1.03 0.87 0.95 Net income divided by Total cash distributed 0.73 0.56 0.65 0.39 0.57 0.62 0.41 0.51
  • 49. 95 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Adjusted segment profit reconciliation and adjusted segment profit + DD&A WPZ Non-GAAP Reconciliations 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Segment profit (loss): Northeast G&P $ (9) $ 12 $ (1) $ (26) $ (24) $ 6 $ 15 $ 21 Atlantic-Gulf 159 152 137 166 614 165 168 333 West 186 162 207 186 741 165 152 317 NGL & Petchem Services 158 101 68 19 346 167 58 225 Total segment profit (loss) $ 494 $ 427 $ 411 $ 345 $ 1,677 $ 503 $ 393 $ 896 Segment adjustments: Northeast G&P Share of impairments at equity method investee $ — $ — $ — $ 7 $ 7 $ — $ — $ — Contingency loss — — 9 16 25 — — — Loss related to compressor station fire — — — — — 6 — 6 Impairment of certain equipment held for sale — — — — — — 17 17 Total Northeast G&P adjustments — — 9 23 32 6 17 23 Atlantic-Gulf Litigation settlement gain (6 ) — — — (6 ) — — — Net loss (recovery) related to Eminence storage facility leak — (5 ) 5 (2 ) (2 ) — — — Total Atlantic-Gulf adjustments (6 ) (5 ) 5 (2 ) (8 ) — — — West Loss related to Opal incident — — — — — — 6 6 Total West adjustments — — — — — — 6 6 NGL & Petchem Services Loss related to Geismar Incident — 6 4 4 14 — — — Geismar Incident adjustment for insurance and timing — — (35 ) 118 83 54 96 150 Total NGL & Petchem Services adjustments — 6 (31 ) 122 97 54 96 150 Total segment adjustments $ (6) $ 1 $ (17) $ 143 $ 121 $ 60 $ 119 $ 179 96 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Adjusted segment profit reconciliation and adjusted segment profit + DD&A cont’d WPZ Non-GAAP Reconciliations 2013 2014 (Dollars in millions) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr Year Adjusted segment profit (loss): Northeast G&P $ (9) $ 12 $ 8 $ (3) $ 8 $ 12 $ 32 $ 44 Atlantic-Gulf 153 147 142 164 606 165 168 333 West 186 162 207 186 741 165 158 323 NGL & Petchem Services 158 107 37 141 443 221 154 375 Total adjusted segment profit (loss) $ 488 $ 428 $ 394 $ 488 $ 1,798 $ 563 $ 512 $ 1,075 Depreciation and amortization (DD&A): Northeast G&P $ 29 $ 32 $ 33 $ 38 $ 132 $ 39 $ 40 $ 79 Atlantic-Gulf 93 87 92 91 363 94 91 185 West 61 58 58 59 236 58 60 118 NGL & Petchem Services 13 14 18 15 60 17 16 33 Total depreciation and amortization $ 196 $ 191 $ 201 $ 203 $ 791 $ 208 $ 207 $ 415 Adjusted segment profit (loss) + DD&A: Northeast G&P $ 20 $ 44 $ 41 $ 35 $ 140 $ 51 $ 72 $ 123 Atlantic-Gulf 246 234 234 255 969 259 259 518 West 247 220 265 245 977 223 218 441 NGL & Petchem Services 171 121 55 156 503 238 170 408 Total adjusted segment profit (loss) + DD&A $ 684 $ 619 $ 595 $ 691 $ 2,589 $ 771 $ 719 $ 1,490 Note: Segment profit (loss) includes equity earnings (losses) and income (loss) from investments reported in other income (expense) - net below operating income in the Consolidated Statement of Comprehensive Income. Equity earnings (losses) result from investments accounted for under the equity method. Income (loss) from investments results from the management of certain equity investments.
  • 50. 97 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Segment profit guidance – reported to adjusted WPZ Non-GAAP Reconciliations Segment profit guidance – reported to adjusted Dollars in millions 2014 Guidance 2015 Guidance 2016 Guidance Low Midpoint High Low Midpoint High Low Midpoint High Reported segment profit: Northeast G&P $308 $355 Atlantic - Gulf 630 965 West 614 595 NGL & Petchem Services 1,015 915 Unallocated Revisions (335) - Total reported segment profit 2,082 2,232 2,382 2,610 2,830 3,050 2,925 3,225 3,525 Adjustments: Loss related to compressor station fire 6 6 6 - - Impairment of certain equipment held for sale 17 17 17 - - - - - - Other (136) (136) (136) - - - - - - Total adjustments - Northeast G&P (113) (113) (113) - - - - - - Total adjustments - Atlantic - Gulf - - - - - - - - - Loss related to Opal incident 6 6 6 - - - - - - Total adjustments - West 6 6 6 - - - - - - Geismar incident adjustment for insurance and timing (115) (115) (115) - - - - - - Total adjustments - NGL & Petchem Services (115) (115) (115) - - - - - - Total segment profit adjustments (222) (222) (222) - - - - - - Adjusted segment profit: Northeast G&P 195 355 Atlantic - Gulf 630 965 West 620 595 NGL & Petchem Services 900 915 Unallocated Revisions (335) - Total adjusted segment profit $1,860 2,010 $2,160 $2,610 $2,830 $3,050 $2,925 $3,225 $3,525 Notes: * Unallocated revisions of $195 (low/mid/high) as previously announced in ACMP acquisition press release on 6/15/14 and $190 low / $140 mid / $90 high as announced in WPZ press release on 7/30/14. * * 98 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 WPZ adjusted segment profit + DD&A WPZ Non-GAAP Reconciliations Dollars in millions 2014 Guidance 2015 Guidance 2016 Guidance Low Midpoint High Low Midpoint High Low Midpoint High Adjusted segment profit: Northeast G&P $195 $355 Atlantic - Gulf 630 965 West 620 595 NGL & Petchem Services 900 915 Unallocated Revisions (335) - Total adjusted segment profit 1,860 $2,010 2,160 2,610 2,830 3,050 2,925 3,225 3,525 Depreciation, Depletion and Amortiz. (DD&A): Northeast G&P 170 210 Atlantic - Gulf 430 495 West 235 235 NGL & Petchem Services 75 95 Total DD&A 885 910 935 1,010 1,035 1,060 1,105 1,130 1,155 Adjusted segment profit + DD&A: Northeast G&P 365 565 Atlantic - Gulf 1,060 1,460 West 855 830 NGL & Petchem Services 975 1,010 Unallocated Revisions (335) - Total adjusted segment profit + DD&A $2,745 $2,920 $3,095 $3,620 $3,865 $4,110 $4,030 $4,355 $4,680 Notes: * Unallocated revisions of $195 (low/mid/high) as previously announced in ACMP acquisition press release on 6/15/14 and $190 low / $140 mid / $90 high as announced in WPZ press release on 7/30/14. * * *
  • 51. 99 © 2014 The Williams Companies, Inc. All rights reserved.Williams and Williams Partners L.P. Second Quarter 2014 Earnings | 7/30/14 Distributable cash flow (DCF) and DCF per common unit WPZ Non-GAAP Reconciliations Note: Net Income presented above is on an after tax basis but was presented on a pretax basis in prior guidance. 1 Distributions reflect per- unit increases of 5% - 7% annually in 2014 and 2015, and 3%-6% in 2016. Dollars in millions 2013 2014 Guidance 2015 Guidance 2016 Guidance Actual Low Midpoint High Low Midpoint High Low Midpoint High Net Income (After Tax) 1,123 $1,406 1,566 $1,726 $1,850 $2,035 $2,220 $2,000 $2,290 $2,580 D D & A 791 885 910 935 1,010 1,035 1,060 1,105 1,130 1,155 Maintenance Capex (258) (305) (340) (375) (295) (325) (355) (300) (330) (360) Attributable to Noncontrolling Interests (3) (30) (35) (40) (100) (105) (110) (130) (135) (140) Geismar incident adjustment for insurance and timing 97 (115) (115) (115) - - - - - - Other / Rounding 104 (18) (13) (8) 140 145 150 125 130 135 Distributable Cash Flow 1,854 1,823 1,973 2,123 2,605 2,785 2,965 2,800 3,085 3,370 Less: Pre-Partnership Distributable Cash Flow 83 23 23 23 - - - - - - Distributable Cash Flow Attributable to Partnership Operations $1,771 $1,800 $1,950 $2,100 $2,605 $2,785 $2,965 $2,800 $3,085 $3,370 Cash Distributions 1 $1,960 $2,340 $2,370 $2,400 $2,632 $2,714 $2,796 $2,868 $2,950 $3,032 Cash Distribution Coverage Ratio 0.90x 0.77x 0.82x 0.88x 0.99x 1.03x 1.06x 0.98x 1.05x 1.11x Net Income / Cash Distributions 0.57x 0.60x 0.66x 0.72x 0.70x 0.75x 0.79x 0.70x 0.78x 0.85x Distributable Cash Flow (DCF) Attributable to Partnership Operations $1,771 $1,800 $1,950 $2,100 $2,605 $2,785 $2,965 $2,800 $3,085 $3,370 Allocation to General Partner 472 717 735 752 873 916 958 972 1,024 1,075 Allocation to Common Units 1,299 1,083 1,216 1,348 1,732 1,870 2,007 1,828 2,062 2,295 Weighted Average Common Units Outstanding (millions) 420.9 450.2 450.2 450.1 460.3 460.1 459.9 481.2 473.2 465.3 DCF Attributable to Partnership Operations Per Common Unit $3.09 $2.41 $2.70 $2.99 $3.76 $4.06 $4.36 $3.80 $4.36 $4.93

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