OCTOBER 2014 - Williams Companies, Inc. |investor.williams.com/.../October_2014_ACMP_Investo… ·...

ACCESS MIDSTREAM PARTNERS INVESTOR PRESENTATION OCTOBER 2014

Certain statements and information in this presentation may constitute forward-looking statements. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” foresee,” “should,” “would,” “could,” or similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward-looking statements are based on current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. All comments concerning our expectations for future revenues and operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisitions. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, those summarized below:

• dependence on Chesapeake Energy Corporation, Total E&P USA, Inc., Mitsui & Co., Anadarko Petroleum Corporation and Statoil for a majority of our revenues;

• the impact on our growth strategy and ability to increase cash distributions if producers do not increase the volume of natural gas they provide to our gathering systems;

• oil and natural gas realized prices;

• the termination of our gas gathering agreements;

• the availability, terms and effects of acquisitions;

• our potential inability to maintain existing distribution amounts or pay the minimum quarterly distribution to our unitholders;

• the limitations that our level of indebtedness may have on our financial flexibility;

• our ability to obtain new sources of natural gas, which is dependent on factors largely beyond our control;

• the availability of capital resources to fund capital expenditures and other contractual obligations, and our ability to access those resources through the debt or equity capital markets;

• competitive conditions;

• the unavailability of third-party pipelines interconnected to our gathering systems or the potential that the volumes we gather do not meet the quality requirement of such pipelines;

• new asset construction may not result in revenue increases and will be subject to regulatory, environmental, political, legal and economic risks;

• our exposure to direct commodity price risk may increase in the future;

• our ability to maintain and/or obtain rights to operate our assets on land owned by third parties;

• hazards and operational risks that may not be fully covered by insurance;

• our dependence on Exterran Partners, L.P. for a significant portion of our compression capacity;

• our lack of industry diversification; and

• legislative or regulatory changes, including changes in environmental regulations, environmental risks, regulations by FERC and liability under federal and state environmental laws and regulations.

Other factors that could cause our actual results to differ from our projected results are described in our 2013 Form 10-K and our other SEC filings. Individuals are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

FORWARD-LOOKING STATEMENTS

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PARTNERSHIP OVERVIEW

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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

BEST IN CLASS MLP Best in class midstream

business model Industry leading organic growth

platform Key investment highlights

include:

• Low Risk Business Model

• Industry Leading Growth

• Conservative Financial Strategy

• Experienced Management Team

• World Class Sponsorship

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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

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Risk Factors ACMP Typical Long Haul Pipeline MLPs

Typical G&P MLPs

Commodity Price Minimal exposure (fixed fee) Indirect Direct & Indirect

Re-Contracting Long-term acreage dedication Medium term Short term

Volume Contractual protections ‘Firm’ transport revenues None

Inflation Contractual protections Depreciated rate base None

Capital Contractual protections Rate review None

Cost Contractual protections Cost of service Varies

Overall Business Model Best in Class Low Risk Moderate Risk

BUSINESS MODEL COMPARISON

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BUSINESS MODEL PROVIDES PROTECTED AND VISIBLE DISTRIBUTIONS

LEADING CONTRACT STRUCTURE

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Barnett Eagle Ford Haynesville

Marcellus Mid-Continent

Niobrara Utica

Direct Commodity Price Exposure

100% Fixed Fee 100% Fixed Fee 100% Fixed Fee 100% Fixed Fee 100% Fixed Fee 100% Fixed Fee 100% Fixed Fee

Contract Structure

MVC and Fee Redetermination

Cost of Service and Fee Tiers

Annual Fee Redetermination / Fixed Fee with MVC

and Fee Tiers

Cost of Service Annual Fee

Redetermination Cost of Service

Cost of Service (gathering) / Fixed Fee (processing)

Re-Contracting 20 Year Acreage

Dedication 20 Year Acreage

Dedication 10-20 Year

Acreage Dedication 15 Year Acreage



Dedication 15-20 Year

Acreage Dedication

Volume Protection

10 Year MVC and Fee

Redeterminations

Two Year Fee Tiers and Cost of Service

Annual Fee Redetermination / 5 Year MVC and

Fee Tiers


Redetermination Cost of Service Cost of Service (gathering only)

Inflation Protection

2.0% Fee Escalation

Cost of Service 2.5% Fee Escalation

Cost of Service 2.5% Fee Escalation

Cost of Service

Cost of Service (gathering) / 1.5%

Fee Escalation (processing)

Capital Protection

Fee Redeterminations


Redetermination (Springridge only)


Redetermination Cost of Service

Cost of Service (gathering only)

STRUCTURE CREATES CASH FLOW STABILITY ACROSS ALL BASINS

LOW RISK BUSINESS MODEL

Volume & 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 8

EXPANDING ASSET BASE

9 1) Data as of quarter ended September 30, 2014. Volume is net to Partnership.

HIGH QUALITY, SCALABLE ASSET BASE IN HIGH GROWTH UNCONVENTIONAL PLAYS

Key Operating Data(1)

Total Assets: ~$8.8 billion

Dedicated Areas: ~8.3 million acres

Miles of Pipe: 6,773

Volume: 4,133 mmcf/d

Employees: ~1,500

2011A 2012A 2013A 2014E 2015E 2016E

$859

$1,025-$1,125

$478 $349

$1,250-$1,350 $1,400-$1,600

OUR GROWTH FOCUS

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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

COST OF SERVICE GROWTH 15 - 20 year fee calculated based on mid-teens return on invested capital Long-term EBITDA growth part of contractual model Fee recalculated annually for actual experience and revised forecast

CAPEX

Levelized Fee ($/mcf)

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Cost of Service Structure

Cost of service structure provides long-term, built-in EBITDA growth

WORLD-CLASS MANAGEMENT TEAM

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Name / Title Current / Prior Experience Yrs Experience

ACMP Management Team J. Mike Stice Chief Executive Officer

President and COO – Chesapeake Midstream Development, LLC Various senior management roles – ConocoPhillips

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Robert S. Purgason Chief Operating Officer

COO – Crosstex Energy Services, LP Various senior management roles – The Williams Companies

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David C. Shiels Chief Financial Officer

CFO – GE Security Americas Various finance and operations roles – Conoco, Inc.

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Board of Directors David A. Daberko Chairman, Independent Director Retired Chairman and CEO – National City Corp 35

Alan S. Armstrong President and CEO – Williams 25

Francis E. Billings SVP Corporate Strategic Development – Williams 25

Donald R. Chappel SVP and CFO – Williams 35

Robyn L. Ewing SVP and Chief Administrative Officer – Williams 40 Philip L. Frederickson Independent Director

Retired EVP of Planning, Strategy and Corporate Affairs – ConocoPhillips

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Suedeen G. Kelly Independent Director

Co-Chair – Akin Gump Strauss Hauer & Feld, LLP Former FERC Commissioner (2003 – 2009)

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Sarah C. Miller VP, Corporate Secretary and Assistant General Counsel – Williams 17

Robert S. Purgason COO – Access Midstream Partners 35

Richard D. Rodekohr VP Financial Planning & Analysis – Williams 35

J. Mike Stice CEO – Access Midstream Partners 30

ASSET OVERVIEW

BARNETT OVERVIEW

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PARKER TARRANT DALLAS

HOOD JOHNSON ELLIS

SOMERVELL

BOSQUE HILL

NAVARRO

Asset Summary Resource Dry Gas

Services Gathering, Compression, Treating

Gas Gathering Systems 26

Miles of Pipeline 860

Gas Gathered 876 mmcf/d

Gas Compression (horsepower) 139,115

Dedicated Area 900,000 acres

Contract Structure MVC and Fee Redetermination

Contract Term 20 years (2029)

LONG-TERM CONTRACT WITH MINIMUM VOLUME PROTECTION AND SIGNIFICANT GROWTH POTENTIAL

A leading position in the Barnett with over $2.0 billion of investment

Data as of quarter ended September 30, 2014.

EAGLE FORD OVERVIEW

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Asset Summary Resource Associated Gas (Oil), Wet Gas






Dedicated Area 1,400,000 acres

Contract Structure Cost of Service, Fee Tiers in 2013, 2014


KEY FOOTPRINT IN LEADING LIQUIDS RICH BASIN


Growing a leadership position in the Eagle Ford to $1.6 billion of investment by 2015

HAYNESVILLE OVERVIEW

Asset Summary Resource Dry Gas







Contract Structure Fixed fee with MVC, fee redetermination and fee tiers

Contract Term Springridge – 10 years (2020) Mansfield – 20 years (2032)

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LONG-TERM CONTRACT WITH ESCALATING ANNUAL MINIMUM VOLUME PROTECTION AND SIGNIFICANT GROWTH POTENTIAL

A leading position in the Haynesville with over $1.5 billion of investment


MARCELLUS OVERVIEW

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STRATEGICALLY POSITIONED IN LEADING SHALE BASIN

Asset Summary Resource Dry and Wet Gas

Services Gathering, Compression



Gas Gathered (net) 1,193 mmcf/d



Contract Structure Cost of Service

Contract Term 15 years (~2026)

Ownership ~ 47% ACMP owned and operated

Accounting Treatment Equity Investment


Growing a leadership position in the Marcellus to $1.9 billion of investment by 2015

MID-CONTINENT OVERVIEW

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Asset Summary

Resource Associated Gas (Oil), Dry and Wet Gas

Services Gathering, Compression,

Treating, Processing


Miles of Pipeline 2,931




Contract Structure Annual Fee Redetermination


LONG-TERM LIQUIDS RICH GATHERING DEDICATIONS WITH RATE REDETERMINATION CONTRACT STRUCTURE

Key positions in the Granite Wash / Colony Wash and Mississippi Lime with over $1 billion of investment


NIOBRARA OVERVIEW

Asset Summary Resource Associated Gas (Oil), Wet Gas

Services Gathering, Compression, Processing



Gas Gathered (net) 30 mmcf/d



Contract Structure Cost of Service


Ownership 50% ACMP owned and operated

Accounting Treatment Consolidated

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LIQUIDS-RICH GATHERING & PROCESSING DEDICATION WITH COST OF SERVICE CONTRACT STRUCTURE


Growing a leadership position in the Niobrara to $300 million of investment by 2015

UTICA GATHERING SYSTEM OVERVIEW

Asset Summary Asset Cardinal Gas Services

(“CGS”) Utica Gas Services (“UGS”)

Resource Associated Gas (Oil), Wet Gas

Dry Gas

Services Gathering, Compression, Dehydration

Gathering, Compression, Dehydration

Gas Gathering Systems 1 2

Miles of Pipeline 283 N/A

Gas Gathered (net) 418 mmcf/d N/A

Gas Compression (horsepower) 124,360 0

Dedicated Area 1,500,000 acres 140,000 acres

Contract Structure Cost of Service Cost of Service

Contract Term 20 years (2032) 15 Years (2027)

Ownership ACMP – 66%, Operator

TOTAL – 25% EVEP – 9%

100% ACMP owned and operated

Accounting Treatment Consolidated Consolidated

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LEADING ASSET POSITION WITH A VERTICALLY INTEGRATED SYSTEM ABLE TO SERVE PRODUCERS FROM THE WELLHEAD THROUGH FRACTIONATION


Growing a leadership position in the Utica to $1.8 billion of investment for gathering and processing by 2015

UTICA EAST OHIO PROCESSING OVERVIEW

Project Summary

Current Status In-Service with additional capacity under construction

Processing 1,100 mmcf/d (5 plants x ~220 mmcf/d)

Fractionation 135,000 Bbl/d (C2+)

NGL Storage 1,220,900 Bbls Propane – 630,000 Bbls; Butane – 425,000 Bbls; Natural Gasoline – 123,000 Bbls; Bullet

tanks – 42,900 Bbls

Processing Spine Pipeline 24” processing spine pipeline

NGL Pipeline 12 and 8” NGL pipelines


Residue Gas Delivery Points 4

NGL Delivery Points 4

Contract Structure Fixed Fee with capex protection


Ownership ACMP – 49% M3 – 30%

EVEP – 21%

Accounting Treatment Equity Investment

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PROCESSING DEDICATION IN WET GAS WINDOW


Growing a leadership position in the Utica to $1.8 billion of investment for gathering and processing by 2015

FINANCIAL OVERVIEW

FINANCIAL STRATEGY

Maintain stable cash flows with a low risk, fee-based business model • Consistently delivering EBITDA performance at or above estimates

• No direct commodity exposure and a diversified asset portfolio reduce volatility

Deliver top-quartile performance for long-term distribution growth and distribution coverage • Distribution has grown at 17% CAGR since IPO

• Current strong cash flow growth results in strong distribution coverage (1.67x), including 10% one-time increase in 3Q 2013

Manage balance sheet to conservative long-term leverage profile • Natural de-levering of business driven by long-term contractual EBITDA growth

• Consistently conservative leverage…Currently 3.2x(1)

Maintain ample liquidity to fund growth CAPEX through market cycles • $1.75 billion revolving credit facility provides ample flexibility…Currently over $1.3 billion of liquidity

• Consistently maintaining over $1 billion in available liquidity

(1) 3Q 2014 EBITDA annualized. Leverage of 3.8x on LTM basis. Data as of quarter ended September 30, 2014. .

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CONSERVATIVE FINANCIAL STRATEGY CONSISTENT WITH LOW RISK BUSINESS MODEL

0.34 0.35 0.36 0.38 0.39 0.41 0.42 0.44 0.45 0.47 0.49 0.54 0.56 0.58 0.60 0.62

Distribution / Unit

FINANCIAL PERFORMANCE

$73 $76 $84 $92 $97 $118 $121 $120 $119

$184 $207

$227 $241 $250 $275

$319

Adjusted EBITDA (1)

$2.6 $4.3 $5.0

$9.0

$14.9 $15.5 $16.9 $17.3

IPO 2010 2011 2012 2013 1Q'14 2Q'14 3Q'14

Enterprise Value

1.15x 1.23x 1.23x

1.49x 1.38x

1.45x

1.67x

2010 2011 2012 2013 1Q'14 2Q'14 3Q'14*

Distribution Coverage Ratio

FINANCIAL PERFORMANCE HIGHLIGHTS STRENGTH OF ACMP MODEL

$ in millions $ in billions

$ / unit basis

24 (1) Includes quarterly allocation of MVC payments in 2010, 2011, 2013 and 2014. * Using Adjusted Coverage. Unadjusted coverage was .82x

HIGHLY VISIBLE GROWTH

($ million) 2014 2015 2016

EBITDA 1,025 – 1,125 1,250 – 1,350 1,400 – 1,600

Growth Capital 1,100 – 1,200 900 – 1,000 600 – 800

Maintenance Capital ~130 ~130 ~130

ACMP FINANCIAL OUTLOOK UPDATED WITH 2016

Capable of delivering sustained ~15% annual distribution growth

25 * Guidance does not reflect impact of WPZ/ACMP merger agreement as announced on 10/26/14

PARTNERSHIP STRUCTURE

Access Midstream Partners GP, LLC Public Common

Unit Holders

100%

100% of 2% GP interest + IDRs

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The Williams Companies, Inc

STRATEGIC SPONSOR; STRONG GOVERNANCE

Access Midstream Partners, LP (NYSE:ACMP)

48.9% Limited Partner Interest

49.1% Limited Partner Interest

Eagle Ford Barnett Haynesville Marcellus Mid-Continent Niobrara Utica Eagle Ford Haynesville Marcellus Mid-Continent Niobrara Utica

OUR COMMITMENT TO SAFETY & ENVIRONMENTAL EXCELLENCE Every day, across every part of our business, Access is committed to

safety and environmental excellence Every day, we commit to:

• Excellence • Safety • Environment • Community Focus • Continuous Improvement

Through: • Continuous Training • Screening Contractors • Implementing Safety Programs • Stewardship Projects • Minimizing our Environmental Footprint

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Contact:

John Porter [email protected] (918) 573-0797

ACMP Headquarters

525 Central Park Dr. Oklahoma City, OK 73105 (877) 413-1023 Web site: www.accessmidstream.com

CORPORATE INFORMATION

mailto:[email protected]

http://www.chkm.com/

PARTNERSHIP HISTORY

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IPO: July 2010 $513mm

December 2010 Acquires Springridge assets for $500mm

February 2011 CHKM is added to the Alerian MLP

Index

April 2011 Senior Notes

offering of $350mm

January 2012 Senior Notes

offering of $750mm

December 2011 Acquires Marcellus assets for $865mm

June 2012 GIP II purchases CHK’s GP and LP

ownership interests in CHKM

July 2012 CHKM announces name change to

Access Midstream Partners (ACMP)

December 2012 Acquires gathering

and processing assets from CHK

for $2.16bn

March 2013 Public offering of

10.4mm units

December 2012 WMB purchases

50% of GP & 34.5mm units of LP ownership interests

December 2012 Senior Notes

offering of $1.4bn Follow-on equity

offering of 18.4mm units

August 2013 Senior Notes

offering of $400mm

December 2012 GIP II and WMB

equity infusion of $700mm Issued 11.9mm Class B

units and 11.2mm Class C units

Funding / Capital Markets Transaction

Acquisitions

Corporate / Other

Note: CHKM – Chesapeake Midstream Partners; GIP II– Global Infrastructure Partners Fund II; CHK – Chesapeake Energy; WMB – The Williams Companies, Inc.

$478mm $735mm

$9bn

$859mm $1.6bn ~$15bn

$350mm $419mm

$5bn

EBITDA: $294mm CAPEX: $216mm EV: $4bn

Results / Projected Results

2010 2011 2013 2012

March 2014 Senior Notes

offering of $750mm

$1.0 - $1.1bn $1.2 - $1.3bn

2014

February 2014 Acquires

compression assets from MidCon

Compression for $160mm

July 2014 WMB purchases

GIP II’s GP and LP ownership interests

in ACMP

ANADARKO OVERVIEW

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LIQUIDS RICH GATHERING DEDICATION WITH RATE REDETERMINATION CONTRACT STRUCTURE

Asset Summary Resource Associated Gas (Oil), Dry and Wet Gas



Miles of Pipeline 1,657





Data as of quarter ended September 30, 2014

MISSISSIPPI LIME OVERVIEW

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LIQUIDS RICH GATHERING DEDICATION WITH RATE REDETERMINATION CONTRACT STRUCTURE

Asset Summary Resource Associated Gas (Oil), Dry and Wet Gas









PERMIAN OVERVIEW

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LIQUIDS-RICH GATHERING & PROCESSING DEDICATION WITH COST OF SERVICE CONTRACT STRUCTURE

Asset Summary Asset Operated Non-Operated

Resource Associated Gas (Oil), Dry and Wet Gas

Associated Gas (Oil), Dry and Wet Gas


Gathering, Processing, Compression, Treating

Gas Gathering Systems 15 1

Miles of Pipeline 342 242

Gas Gathered (net) 41 mmcf/d 69 mmcf/d

Gas Compression (horsepower) 17,255 N/A

Contract Structure Annual Fee Redetermination Cost of Service

Ownership 100 % ACMP owned and operated

Ranch Westex : ACMP - 33%; RGP – 34%; Anadarko –33%;

DBJV: ACMP – 50%; Anadarko – 50% (operator)

Accounting Treatment Consolidated

Ranch Westex – Equity Investment

DBJV - Consolidated

Contract Term 20 years (2029) Ranch Westex - 10 years (2021) DBJV – 10 years (2017)


FINANCIAL STATEMENTS

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(1) Excludes revenue from equity investments of $255.7 million and $173.0 million for the nine months ended September 30, 2014 and 2013, respectively that is included in Income from unconsolidated affiliates.

(2) In July 2014, the Partnership reassessed the estimated useful lives of its gathering systems. Through this assessment, the Partnership increased the useful lives of its gathering systems from 20 years to 30 years. In accordance with FASB ASC 250, the Partnership determined that the change in depreciation method is a change in accounting estimate, and accordingly, the change will be applied on a prospective basis. The effect of this change in estimate resulted in a decrease in depreciation expense for the nine months ended September 30, 2014, by approximately $29.7 million, or by approximately $0.16 per unit.


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