The following presentation was first furnished by The Williams Companies, Inc. (Williams) to investors on June 15, 2016, with respect to the
previously announced combination of Williams with Energy Transfer Equity, L.P. (ETE), through the merger of a newly formed entity, Energy Transfer Corp LP (ETC) with Williams (the merger). Please consider the
following when reviewing the presentation:
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT HAVE BEEN OR MAY BE FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY AS THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED BUSINESS COMBINATION. Definitive proxy statement(s) were mailed to stockholders of Williams beginning on
May 25, 2016 and amended by Amendment No. 1 on June 3, 2016. Investors and security holders may obtain free copies of these documents and other documents filed with the SEC by ETE, ETC and Williams through the website maintained by
the SEC at http://www.sec.gov. Copies of the documents filed by ETE and ETC with the SEC will be available free of charge on ETEs website at www.energytransfer.com or by contacting Investor Relations at 214-981-0700 and copies of the documents
filed by Williams with the SEC will be available on Williams website at investor.williams.com.
ETE and
its directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding the directors and officers of ETEs
general partner is contained in ETEs Annual
Report on Form 10-K filed with the SEC on February 29,
2016 (as it may be amended from time to time). Additional information regarding the interests of such potential participants is included in the proxy statement/prospectus and other relevant documents filed with the SEC. Investors should read the
proxy statement/prospectus carefully before making any voting or investment decisions. You may obtain free copies of these documents from ETE using the sources indicated above.
Williams and its directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed
transaction. Information regarding the directors and officers of Williams is contained in Williams Annual Report on Form 10-K filed with the SEC on February 26, 2016 (as it may be amended from time to time). Additional information
regarding the interests of such potential participants is included in the proxy statement/prospectus and other relevant documents filed with the SEC. Investors should read the proxy statement/prospectus carefully before making any voting or
investment decisions. You may obtain free copies of these documents from Williams using the sources indicated above.
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© 2016 The Williams Companies, Inc. All rights reserved.
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[Graphic Appears Here]
Agenda
Transaction Overview
Investment Highlights
ETC/ETE Alignment
Merger Integration Update
Key Dates
Key Takeaways
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© 2016 The Williams Companies, Inc. All rights reserved.
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[Graphic Appears Here]
Transaction Overview
Summary
> On September 28, 2015, Williams (WMB) executed a definitive agreement to combine with Energy Transfer
Equity, L.P. (ETE)
> ETE will form a partnership that will be treated as a corporation for tax
purposes to be called
Energy Transfer Corp LP (ETC) that will merge with WMB and survive the
merger
> WMB stockholders can elect to receive as merger consideration (subject to proration):
Mixed consideration of $8.00 per share in cash and 1.5274 ETC shares per WMB share
All ETC shares at a fixed exchange ratio of 1.8716 ETC shares per WMB share
All cash of $43.50 per WMB share
> WMB stockholders that elect to receive all ETC shares or all cash will be subject to proration to ensure that the aggregate number of ETC common shares and the aggregate amount of
cash paid in the merger will be the same as if all shareholders elect mixed consideration(a)
Mixed
consideration represents $27.38 of value per WMB share(b)
> Regardless of consideration election, all
shares will receive a one-time special dividend of $0.10 per share following closing
(a) Elections to receive
ETC shares or cash are both subject to proration such that a cash pool of $6.05 billion will be fully allocated. (b) Based on ETEs closing price of $12.69 as of June 14, 2016.
5 © 2016 The Williams Companies, Inc. All rights reserved.
Transaction Overview (contd)
Summary
Intended to qualify as a tax-free exchange to WMB stockholders (except with respect to cash received)
In addition, each ETC common share received by WMB stockholders in the merger will have attached to it one
contingent consideration right (CCR)
The CCRs provide an adjustment mechanism for
trading parity between ETC shares and ETE units through the potential to provide additional or reduced consideration to ETC shareholders should ETC shares trade, on average over the 23-month measurement period, at a discount or premium to the ETE
units
ETC will benefit from an agreement for dividend equalization with ETE through 2018 that ensures that ETC
shareholders will receive the identical cash dividend as ETE unitholders, if any
WPZ will remain a separate,
publicly traded MLP
A majority of the Williams Board recommends that
WMB stockholders adopt the merger agreement
6 © 2016 The Williams Companies, Inc. All rights reserved.
Transaction Overview (contd)
Pro Forma
Energy Transfer Organizational Structure
ENERGY TRANSFER CORP LP ENERGY TRANSFER EQUITY LP
(NYSE: ETC)(NYSE: ETE)
~58% LP interest 100% Interest (a) ~2% LP Interest ~1% LP Interest ~90% GP /IDRs
100% GP / IDRs 100% GP / IDRs 100% GP / IDRs(Class H Units)
ENERGY TRANSFER 27% LP Interest SUNOCO LOGISTICS
WILLIAMS PARTNERS, L.P. SUNOCO LP
PARTNERS, L.P. PARTNERS L.P.
(NYSE: WPZ)(NYSE:
SUN)
~39% LP Interest(NYSE: ETP) ~10% GP / IDRs(NYSE: SXL)
ENERGY TRANSFER LNG 40% Interest
60% Interest
Lake Charles Lake Charles
LNG (Regas) LNG Export Co
[Graphic Appears Here]
[Graphic Appears Here]
Owner and operator of LNG facility in Lake Charles, LA and expected nucleus of another MLP.
Excludes potential effect of conversion of Convertible Units and potential issuances under the ETC Long-Term Incentive
Plan.
ETE expects to grant awards to officers, directors and eligible service providers of ETC and its
affiliates shortly following closing covering approximately 10% of
7 the outstanding ETC common shares at the
closing of the merger.
© 2016 The Williams Companies, Inc. All rights reserved.
Investment Highlights
Summary
Expect WMB shareholders to benefit from enhanced long-term value prospects through ongoing participation in a larger, more
diverse company, while securing substantial value certainty through cash consideration amidst the currently volatile energy environment
Key investment highlights:
1 Enhanced scale,
scope of operations and M&A opportunities, as well as significant commercial and cost synergies
2 A
complementary geographic footprint, which will allow the combined company to better serve customers through the entire value chain across all major basins
3 Upside exposure to combined companys significant growth opportunities (including
Lake Charles LNG) and additional commercial synergies
4 Combination reduces risks inherent in WMBs standalone case, including customer concentration and related credit exposure; standalone expectation to eliminate or significantly
reduce WMB dividend
5 Combined company has proposed a clear path to delever and improve its balance sheet
6 Cash consideration provides substantial value certainty to WMB stockholders amidst the currently volatile
and challenging environment for U.S. midstream companies
8 © 2016 The Williams Companies, Inc. All rights
reserved.
Investment Highlights (contd)
1 Enhanced
scale, scope of operations and M&A opportunities, as well as significant commercial and cost synergies
> Combined company expected to be better positioned to compete in a dynamic midstream sector and a challenging
commodity price environment
Creates the largest midstream franchise in North America, with two of the
largest diversified MLPs, the second largest crude and logistics MLP, a fast-growing retail fuel MLP and an attractive LNG export opportunity
Broader footprint, diversified business mix and increased financing options through four MLP vehicles position the combined company to better participate in value-enhancing M&A
going forward
> Commercial synergies expected to result in increased EBITDA for the combined company by
2020 of more than $100 million (base case) to more than $500 million (upside price case) in addition to material cost synergies
Pro Forma Business Overview
Market Cap(a) $19,203
$7,718 $2,792 NA $19,071 Distribution/unit (LQA) $4.22 $1.92 $3.27 NA $3.40 2015A EBITDA(b) $3,982(c) $1,159 $356 $196 $4,089 Credit Ratings BBB- BBB BB NA BBB-
~62,500 miles of ~5,900 miles of crude ~6,800 sites and 6 terminals 9.0 bcf LNG storage 33,000+ miles of gas/NGL gas/NGL pipelines pipelines
Presence in 30 states Take-or-pay contract pipelines
67 processing/treating ~2,700 miles
of product More than 5.3 billion gallons (regasification) with BG NGL production of 130
Key
Operating Assets plants and fracs pipelines of annual motor fuel sales through 2030 mmbbl/d
51mmbbls
underground 40 active refined products Potential LNG export project ~11 bcf/d of gas transported liquids storage terminals provides significant upside
2015A EBITDA Contribution(b) Market Capitalization of MLPs(a)
LNG
0%
2% WPZ SUN WPZ
SUN 42% 6% 39% 3%
SXL ETP SXL ETP 12% 41% 16% 39%
(a) Based on trading prices as of June 14, 2016. (c) Does not include consolidated subsidiaries.
9 (b) Wells Fargo. © 2016 The Williams Companies, Inc. All rights reserved.
Investment Highlights (contd)
2
Complementary geographic footprint
> Complementary geographic footprint will allow the combined company to
better serve customers through the entire value chain across all major basins
Compelling interstate
natural gas pipeline combination and fully integrated North America liquids platform allows the pro forma company to offer cost-effective solutions to customers
Williams
Fractionators Gas Plants Offshore
Platforms Olefins Plants Underground Storage Laurel Mountain Midstream Susquehanna Supply Hub Canada Cardinal Discovery Four Corners Area East Gulf Coast West Gulf Coast Gulf Olefins Overland Pass Pipeline Northwest Pipeline Ohio Valley Midstream
Southwest Wyoming Transco Wamsutter ACMP
Blue Racer
Marcellus/Utica
Energy Transfer
ETP Pipelines SXL Pipelines Lake
Charles LNG
Development Projects
Rover Pipeline
Dakota Access Pipeline Lone Star
Express Pipeline Crude Conversion Pipeline Marcus Hook Eagle Point Nederland
© 2016 The Williams
Companies, Inc. All rights reserved.
10
Investment Highlights (contd)
3 Upside
exposure to combined companys significant growth opportunities (including Lake Charles LNG) and additional commercial synergies
> Significant and diverse set of growth opportunities for combined company
Importantly, combined company has more levers to fund growth and broader footprint for identifying new organic growth opportunities
> Upside to commercial synergy targets assuming continued commodity price improvement and increased demand for natural
gas, NGL and crude supply (e.g., petchem, power gen, exports)
Bakken Crude Pipeline Bakken Crude
Pipeline Rock Springs Awaiting positive FID from
Project/Bayou Bridge Pipeline Project/Bayou
Bridge Pipeline BG/Shell
Dalton
ET Rover Pipeline Project Permian Express 3 ETE/ETP have secured a
Hillabee Phase 1 conditional 25-year
Natural Gas Exports to Mexico Longview & Louisiana Gulf Trace LNG commercial commitment from
Extension
Lone Star Expansions and BG for all capacity
Virginia Southside II
NGL Export Opportunity Mariner East 2 Key regulatory approvals
Atlantic Sunrise secured
Eagle Ford
& Permian Basin Mariner East 2 Extension
Expansion Projects Gulf Connector
Distributable cash flow is
Delaware Basin Extension expected to be in excess of
Revolution New York Bay ~$1.0bn per year to ETE and
Utica Ohio River Joint Venture Garden State ETP from 2022-2046(a)
NE Supply Enhancement
Kodiak
Gunflint
© 2016 The Williams Companies, Inc. All rights reserved.
(a) Based on ETE Analyst Day presentation from November 17, 2015.
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Investment Highlights (contd)
Combination
reduces risks inherent in WMBs standalone case, including customer concentration and related credit exposure; standalone expectation to eliminate or significantly reduce WMB dividend
Customer concentration and credit exposure (e.g., Chesapeake accounted for 18% of 2015 revenues)
Combination dilutes WMB exposure to Chesapeake risk and provides additional levers for negotiating win-win
solutions
Risk that access to capital may be impaired as a result of customer credit issues
Combined company has more levers to finance capital plan, including four MLP financing vehicles
Additionally, WMB faces the following challenges going forward on a standalone basis:
A: Elimination or significant reduction of WMB dividend
To strengthen WMBs credit profile and increase WMBs financial flexibility, the Board expects to eliminate or
significantly reduce the WMB dividend, supplemented as needed by asset sales and equity issuances
We have
illustrated the comparative cash flows between a merger scenario and two illustrative standalone scenarios
($
per share) At Close:
6/30/2016 3/4Q 2016 2017 2018 Total
Standalone Example 1: Full Elimination of WMB Dividend $0.00
Pro Forma Scenario: Latest S-4 Disclosure $8.10 $0.70 $8.80(a)
Difference ($) vs. Standalone Example 1 $8.80
($ per share) At Close:
6/30/2016 3/4Q 2016 2017 2018 Total
Standalone
Example 2: 75% Annual Reduction of WMB Dividend$0.32 $0.64 $0.64 $1.60
Pro Forma Scenario: Latest S-4
Disclosure $8.10 $0.70 $8.80(a)
Difference ($) vs. Standalone Example 2 $7.20
(a) Assumes a shareholder elects mixed consideration, thereby receiving $8.10 in cash and 1.5274 ETC shares (per latest
S-4, ETC is forecasting a $0.46 per share annual dividend in 2018).
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© 2016 The Williams Companies, Inc. All rights reserved.
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Investment Highlights (contd)
Combination
reduces risks inherent in WMBs standalone case, including customer concentration and related credit exposure; standalone expectation to eliminate or significantly reduce WMB dividend
> WMB challenges going forward (contd):
B: Leverage considerations in a standalone case
WMB is focused on continuing to improve its credit profile
Reducing debt to strengthen consolidated balance sheet
Decreasing the reliance on asset sales and equity issuances
Current leverage metrics are higher than the companys targeted level; risk for credit rating downgrade at WMB
Consolidated Debt / 2016E EBITDA: ~6x
Levers available to WMB to improve its balance sheet and delever over time include (in order of priority):
Dividend elimination or significant reduction
Further capex reductions
Asset sales
Equity issuances
13 © 2016 The Williams Companies, Inc. All rights reserved.
Investment Highlights (contd)
Combined
company has proposed a clear path to delever and improve its balance sheet
ETEs current acquisition
facility provides flexibility to cost-effectively address leverage considerations
Interest rate on facility
capped at 5.50%
One-year facility with ability to extend term by one year
ETE projections in S-4/proxy reflect conservative financing assumptions
Term loan financing to pay cash portion of merger consideration at closing
Debt paydown driven by proposed elimination of ETE/ETC distribution over two-year period following the closing
Significant ETE support planned to maintain IG ratings at ETP, WPZ and SXL(a)
No additional asset sales to delever
Consolidated EBITDA
Cash Available for
Distribution
HoldCo Debt / EBITDA
[Graphic Appears Here]
13.7% CAGR
13.1% CAGR
3.1x Reduction in Metric
> The combined
company will also have enhanced levers to pull to further reduce debt & bolster its underlying
partnerships including HoldCo Level Underlying MLP Level
n
Asset Sales
n
Asset
Sales
n
Equity Financings
n
Equity / Debt Financings
n
Distribution Cuts
n
Distribution Cuts
n
Capex Cuts
S&P recently advised ETE that it has placed ETEs BB corporate credit and senior secured debt ratings
on CreditWatch with negative implications and that S&P expects to lower ETEs rating by two notches to B+ upon the closing of the merger with WMB. S&P also advised ETE that S&Ps BBB- corporate credit
rating and stable outlook for ETP and S&Ps ratings and
14 outlooks on SXL and SUN are unaffected by
this action.
© 2016 The Williams Companies, Inc. All rights reserved.
Investment Highlights (contd)
6 Cash
consideration provides substantial value certainty to WMB stockholders
> The cash consideration crystalizes
substantial value for WMB stockholders amidst the currently volatile environment for U.S. midstream companies
Equivalent to selling ~18% of WMB for $43.50 per share (vs. current WMB price of $21.18(a))
Cash component has provided a substantial value cushion in the current commodity downturn, representing ~29% of
overall merger consideration(a)
If the ~$6 billion in cash consideration were reinvested in ETE or ETC
shares, it would represent an additional ~22%(a) ownership in the combined company, bringing total WMB ownership to ~74%
(a) Based on WMB and ETE closing prices of $21.18 and $12.69 as of June 14, 2016.
15 © 2016 The Williams Companies, Inc. All rights reserved.
ETC/ETE Alignment
Protections for ETC
Shareholders
Uncapped CCR attached to each ETC common share
Represents the right to receive additional consideration (which can be satisfied in additional ETC shares or cash)
should ETE units trade higher than ETC shares for a 23-month period post-closing
Strongly incents ETE
to ensure ETC trades at parity with ETE
To the extent ETC trades at a 10% discount to ETE over the
23-month period, ETE would owe ETC an additional $1.5 billion(a)
Dividend equalization with ETE through
2018
ETE management stated goal (as disclosed in S-4) to manage ETC to 10% federal cash tax rate from
2019-2020 and thereafter, depending on among other things, the level of tax attributes at ETEs disposal, more in the range of a
15-20% cash federal income tax rate
Initial ETC GP Board includes three independent directors meeting the independence standards established by the NYSE and the Exchange Act
Initial conflicts committee of the ETC GP Board was approved by the existing WMB Board
The conflicts committee appoints its successors going forward
ETE Management Track Record and Alignment
ETE management has strong track record for creating value for unitholders
Since January 2010, ETE has
generated total shareholder return of ~135% vs. ~60% for the Alerian MLP Index and ~65% for WMB(b)
ETE
managements significant ownership in ETE provides high degree of incentive for ETE value creation
ETE management owns ~28% of outstanding ETE units with Kelcy Warren personally owning ~18%
ETE will own
19% of ETC; ETE is obligated to ETE/ETC dividend equalization through 2018 and ETE is responsible to compensate ETC for any CCR value at the end of 2 years following closing
(a) Based on WMB and ETE closing prices of $21.18 and $12.69 as of June 14, 2016. (b) Total shareholder return calculation includes reinvestment of dividends.
16 © 2016 The Williams Companies, Inc. All rights reserved.
ETE Management Track Record and Alignment
ETE
management has strong track record for creating value for unitholders
Since January 2010, ETE has generated
total shareholder return of ~150% vs. ~65% for the Alerian MLP Index and ~70% for WMB(b)
ETE managements
significant ownership in ETE provides high degree of incentive for ETE value creation
ETE management owns ~28%
of outstanding ETE units with Kelcy Warren personally owning ~18%
ETE will own 19% of ETC; ETE is obligated to
ETE/ETC dividend equalization through 2018 and ETE is responsible to compensate ETC for any CCR value at the end of 2 years following closing
© 2016 The Williams Companies, Inc. All rights reserved.
Merger Integration Update
Integration planning
Teams are crafting integration plans designed to deliver a well-functioning organization and material cost
synergies
In December 2015, a Joint Integration Management Office was established and is functioning under
direction of a combined executive steering committee
Teams are designing a functional organizational structure
featuring a centrally led / shared service organization supporting both ETP & WPZ
Leaders from both
companies have been named to functional teams tasked with integration planning
Business Functions Teams
Currently Launched
n
HR
n
Insurance
n
Project Execution
n
EH&S
n
IT
n
Corporate Services
Major Projects & Offshore
n
Right of Way
n
Financial Planning and
n
Compliance, Governmental NGL Exports
n
Procurement
Analysis Affairs and Records Retention Process Engineering and
n
Power/Commodity
Planning
n
Accounting
n
Legal Optimization
Rotating Equipment
n
Treasury
n
Corporate Communications
n
Capital Cost Controls
Facilities Planning/Project
n
Financial Risk Management
n
Financial Reporting Dev
n
ENV/GIS/Survey
n
Credit
n
Measurement Gathering and Well
n
Engineering Services
Connects
n
SOX
n
Technical Services
NGL/ Crude Facilities
n
Tax
n
Pipeline and Mechanical
Integrity NGL/ Crude Pipes
n
Internal Audit
17 © 2016 The Williams Companies, Inc. All rights reserved.
Key Dates
DATE DESCRIPTION
September 28, 2015 WMB executed definitive agreement to combine with ETE
May 19, 2016 WMBs stockholders of record entitled to vote on ETE transaction
at special meeting
May 25, 2016 Form S-4 declared effective by SEC
June 2016 Declaration of WMB quarterly dividend in early June; dividend
payment to be made before closing
FTC
announces clearance of the proposed transaction, subject to
June 9, 2016 certain conditions (including
divestiture of Williams interest in
Gulfstream Natural Gas System)
Trial dates for WMB/ETE litigation; WMB seeking to have ETE
Convertible Units issuance rescinded and WMB seeking a
June 20/21, 2016 declaratory judgment that ETE cannot terminate the merger
agreement due to failure to receive tax opinion and failure to use
reasonable best efforts to achieve closing of the merger prior to
outside date of June 28, 2016
June 27, 2016 Special meeting for WMB stockholders to vote on ETE transaction
June 28, 2016 Expected closing date and outside date set forth in merger
agreement
© 2016 The Williams Companies,
Inc. All rights reserved.
18
Key Takeaways
WMB shareholders expected to
benefit from enhanced long-term value prospects through ongoing participation in a larger, more diverse company, while securing substantial value certainty through cash consideration amidst the currently volatile energy environment
1
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Enhanced scale, scope of operations and M&A opportunities, as well as significant commercial and cost
synergies
|
2 A complementary geographic footprint, which will allow the combined company to
better serve customers through the entire value chain across all major basins
3
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Upside exposure to combined companys significant growth opportunities (including
|
Lake Charles LNG) and additional commercial synergies
4 Combination reduces risks inherent in WMBs standalone case, including customer concentration and related credit
exposure; standalone expectation to eliminate or significantly reduce WMB dividend
5
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Combined company has proposed a clear path to delever and improve its balance sheet
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6 Cash consideration provides substantial value certainty to WMB stockholders amidst the
currently volatile and challenging environment for U.S. midstream companies
A majority of the Williams Board
recommends that
WMB stockholders adopt the merger agreement
19 © 2016 The Williams Companies, Inc. All rights reserved.
Additional Information
For additional
information, please refer to the Proxy Statement mailed on May 25, 2016, including the Recent Developments section.
20 © 2016 The Williams Companies, Inc. All rights reserved.