Q1 2024 The Williams Companies Inc Earnings Call

Operator: Good day, and thank you for standing by. Welcome to the Williams First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Danilo Juvane, Vice President of Investor Relations, ESG, and Investment Analysis. Please go ahead.

Okay.

Yeah.

Good day and thank you for standing by welcome to the Williams first quarter 2024 earnings Conference call.

Operator: At this time all participants are in a listen only mode.

Danilo Marcelo Juvane: After the speaker's presentation, there will be a question and answer session.

Operator: To ask a question during the session you will need to press star one on your telephone.

Operator: You will then hear an automated message advising your hand is raised.

Operator: To withdraw your question. Please press star one again.

Operator: Please be advised that today's conference is being recorded.

Geneva, Giovanni: Now I'd like to hand, the conference over to your first speaker today, Geneva, Giovanni Vice President of Investor Relations, he or she and investment analysis. Please go ahead.

Danilo Marcelo Juvane: Thanks, Andrea, and good morning, everyone. Thank you for joining us and for your interest in The Williams Company. Yesterday afternoon, we released our earnings and price repeats and the presentation that our President and CEO, Alan Armstrong, and our Chief Financial Officer, John Porter, will speak to this morning. Also joining us on the call are Michael Dunn, our Chief Operating Officer, Lane Wilson, our General Counsel, and Chad Zamarin, our Executive Vice President of Corporate Strategic Development.

Danilo Marcelo Juvane: Thanks, Andrea and good morning, everyone. Thank you for joining us and for your interest in the Williams companies.

Danilo Marcelo Juvane: Yesterday afternoon, we released our earnings impressed with pizza in the presentation.

Danilo Marcelo Juvane: <unk> CEO, Alan Armstrong, and our Chief Financial Officer, John Porter, who will speak to this morning.

Danilo Marcelo Juvane: Also joining us on the call micro Dunn, our Chief operating Officer Lynn Wilson, Our General Counsel, John Demaree, Our executive Vice President of corporate strategic development.

Danilo Marcelo Juvane: In our presentation materials, you'll find a disclaimer related to forward-looking safety. This disclaimer is important and integral to our remarks, and you should review it. Also included in the presentation materials are non-GAAP measures that we reconcile with generally accepted contemplative accounting principles, and these reconciliation schedules appear at the back of today's presentation material. And with that, I'll turn it over to Alan Armstrong.

Danilo Marcelo Juvane: In our presentation materials, you'll find a disclaimer related to forward looking statements.

Alan S. Armstrong: This disclaimer is important and integral to our remarks and you should review it.

Alan S. Armstrong: Also included in the presentation materials are non-GAAP measures that we reconciled with generally accepted accounting principles and.

Alan S. Armstrong: And these reconciliation schedules appear at the back of today's presentation materials.

Danilo Marcelo Juvane: And with that I'll turn it over to Alan Armstrong.

Alan S. Armstrong: Okay, well, thanks Danilo and thank you all for joining us today. Well, another first quarter and another strong start for Williams. So, let me begin on slide two by calling out a few operational, financial, and strategic achievements we saw this first quarter, starting here on the left of this slide.

Alan S. Armstrong: Okay, well, thanks, Danilo and thank you all for joining us today, well another first quarter and another strong start for Williams. So let me begin here on slide two by calling out a few operational financial and strategic achievements. We saw this first quarter.

Alan S. Armstrong: Starting here on the left of this slide.

Alan S. Armstrong: Yet again, we've set a record for contracted transmission capacity, led by Transco, the largest and fastest-growing natural gas pipeline. And in January, we closed on our acquisition of a portfolio of natural gas storage assets from an affiliate of Hartree Partners for approximately $1.9 billion. The transaction included six underground natural gas storage facilities located in Louisiana and Mississippi, making us the largest owner of storage on the Gulf Coast.

Alan S. Armstrong: Yet again, we set a record for contracted transmission capacity led by Transco, the largest and fastest growing natural gas pipeline and in January we closed on our acquisition of a portfolio of natural gas storage assets from an affiliate of Heart-free partners for approximately $1 9 billion.

Alan S. Armstrong: The transaction included six underground natural gas storage facilities, located in Louisiana, and Mississippi, making us the largest owner of storage on the Gulf Coast.

Alan S. Armstrong: Demand for natural gas has greatly outpaced natural gas storage capacity since 2010, and our thesis of this underinvestment is now being realized as this newly acquired storage is being recontracted at rates above our acquisition expectations. In fact, storage rates have reached the point of supporting brownfield expansions, and we are gauging interest from customers willing to underwrite the potential expansion of these facilities in the form of long-term contracts. Also, in the first quarter, we announced the expansion of the Southeast Supply Enhancement Project to roughly 1.6 BCF a day of capacity, and we pre-filed this project with the FERC on February 1st.

Alan S. Armstrong: Demand for natural gas is greatly outpace natural gas storage capacity since 2010, and our thesis of this underinvestment is now being realized.

Alan S. Armstrong: This newly acquired storage is being re contracted at rates above our acquisition expectations. In fact storage rates have reached the point of supporting brownfield expansions and we're engaging interest from customers willing to underwrite potential expansion of these facilities in the form of long term contracts.

Alan S. Armstrong: Also in the first quarter, we announced the expansion of the southeast supply enhancement project to roughly one six Bcf a day of capacity and we pre filed this project with the FERC on February one we expect to make the official PRC filing later this year and I'll remind you that this project will serve both the mid Atlantic and the South.

Alan S. Armstrong: We expect to make the official FERC filing later this year, and I'll remind you that this project will serve both the Mid-Atlantic and the Southeast markets. These markets are experiencing increasing gas demand from power generation and the reshoring of industrial load.

Alan S. Armstrong: These markets. These markets are experiencing increasing gas demand from power generation and the re shoring of industrial loads.

Alan S. Armstrong: Since the time of our open season, the large utilities that we serve in this area have come back and provided dramatic increases to their generation needs based on data centers to be built in the region, as well as reshoring of industrial markets. So we believe that we are in the early innings for expansions in these Mid-Atlantic and Southeast markets. Our project execution team has also delivered an impressive list of accomplishments this quarter.

Alan S. Armstrong: Since the time of our open season, the large utilities that we serve in this area have come back and provided dramatic increases to their generation needs based on data centers to be built in the region as well as re shoring of industrial markets. So we believe that we are in the early any for expansions in these mid.

Alan S. Armstrong: <unk> and southeast markets.

Alan S. Armstrong: Our project execution teams also delivered an impressive list of accomplishments this quarter in total we have 20 high return projects in execution across our business, including approximately three one bcf per day of expansion on Transco, which equates to a 15% increase in fully contracted.

Alan S. Armstrong: In total, we have 20 high-return projects in execution across our business, including approximately 3.1 BCF per day of expansion on Transco, which equates to a 15% increase in fully contracted long-term capacity that will be coming online over the next few years. Within these Transco opportunities, there are a few noteworthy accomplishments to hit. First, we placed the Carolina MarketLink in service, and now we have begun receiving the full revenues in this quarter. Next, we will commence construction on the Southside Reliability Enhancement and the Southeast Energy Connector Project. And we received the FERC order for the Alabama-Georgia Connector and the Texas-Louisiana Energy Pathway. And, finally, we're advancing.

Alan S. Armstrong: Long term capacity that will be coming online over the next few years.

Alan S. Armstrong: Within these transco opportunity a few noteworthy accomplishments to hit.

Alan S. Armstrong: First we placed the Carolina market link and service and now began receiving the full revenues in this quarter next we commenced construction for the south side of reliability enhancement and the southeast energy connector projects and we received a FERC order for the Alabama, Georgia connector and the.

Alan S. Armstrong: Texas to Louisiana energy pathway projects.

Alan S. Armstrong: And finally, we are advancing.

Alan S. Armstrong: A number of modest but high return expansion projects on our Mountain West transmission system. You know, this is a period when we have a tremendous number of large projects, and sometimes it's easy to overlook things as large as even the Whale Deepwater Project. But I'm happy to report to you that great execution by our teams there, in some pretty difficult environments, has that project coming in quite a bit below our original capital estimate on that project, and we do expect this project now to start up towards the end of this year.

Alan S. Armstrong: A number of modest but high return expansion projects.

Alan S. Armstrong: Our mountain West transmission system.

Alan S. Armstrong: This is a period, where we have a tremendous amount of large projects and sometimes it's easy to overlook things as large as even the well deepwater project, but happy to report to you that great execution by our teams there and some pretty difficult environments has that project coming in quite a bit below our original capital.

Alan S. Armstrong: Estimate on that project and we do expect now this project with start up towards the end of this year. So congratulations to our deepwater team that have been working on that project for about four years, now and pretty remarkable accomplishments.

Alan S. Armstrong: So, congratulations to our Deepwater team that has been working on that project for about four years now, and pretty remarkable accomplishments to get that project in on budget and actually below. And then, finally, our teams are well on their way to replacing 112 mainline compressor units with state-of-the-art low-emission turbines and electric drive units on Transco and Northwest Pipes. As a reminder, these projects will generate an incremental regulated return realized through a rate case or a tracking mechanism that will begin in 2025. So, again, a huge body of work there to go in and replace this compression that is well past its useful life, but the team's doing a great job.

Alan S. Armstrong: To get that project in on budget and actually below budget and then finally, our teams are well on their way to replacing 112 mainline compressor units with state of the art low emission turbines and electric drive unit on Transco and northwest pipe as a reminder, these projects will generate an incremental.

Alan S. Armstrong: Regulated return realized through a rate case or a tracker mechanism that will begin.

Alan S. Armstrong: 2025%, so again, a huge body of work there to go in and replace this compression that is well past its useful life, but the team is doing a great job you can imagine the efforts that go in to replacing that scale of operations, but we have so much going on it.

Alan S. Armstrong: You can imagine the efforts that go into replacing that scale of operations, but we have so much going on, it's kind of easy to miss, and we're excited to see the earnings from that show up in 2025. So now turning to the highlights of our first quarter financial performance, we delivered quarterly EBITDA of $1.934 billion, which was 8% higher than last year, an impressive peak given the tough comp we were up against, and a 25% year-over-year decline in natural gas prices and the lack of severe winter weather in most of our markets.

Alan S. Armstrong: It's kind of easy to Miss out and we're excited to see the earnings from that show up in 'twenty five.

Alan S. Armstrong: So now turning to the highlights of our first quarter financial performance, we delivered quarterly EBITDA of $1 $93 4 billion, which was 8% higher than last year, an impressive feat given the tough comp we were up against and a 25% year over year decline in natural gas prices and the lag.

Alan S. Armstrong: A severe winter weather.

Alan S. Armstrong: An important takeaway from the quarter is that our outperformance occurred despite year-over-year lower earnings in the marketing and upstream segments, which reaffirms the strength and resilience of our underlying business, no matter the commodity price. To this end, we expect to deliver our EBITDA in the top half of our earlier guidance. And to be clear, we think we can accomplish this with continued soft gas prices and without any further earnings contributions from our marketing sector.

Alan S. Armstrong: Most of our markets.

Alan S. Armstrong: An important takeaway from the quarter is that our outperformance occurred despite year over year lower earnings in the marketing and upstream segments.

Alan S. Armstrong: Which reaffirms the strength and resilience of our underlying business no matter the commodity price environment.

Alan S. Armstrong: To this end, we expect to deliver our EBITDA in the top half of our earlier guidance and to be clear. We think we can accomplish this with continued soft gas prices and without any further earnings contributions from our marketing segment.

Alan S. Armstrong: Due to the ongoing steady growth and resilience of our business, we recently raised the 2024 dividend by 6.1%, underscoring our confidence in our ability to continue this strong record of per share growth through even extreme low commodity price environments. And with a slate of high-return growth projects under execution right now and in development, Williams remains well-positioned to grow at this rate for many years to come. And with that, I'll turn it over to John to walk through the quarter and year-to-date financials. John?

Alan S. Armstrong: Due to the ongoing steady growth and resilience of our business. We recently raised the 2024 dividend by six 1% underscoring our confidence in our ability to continue this strong record of per share growth through even extreme low commodity price environment and with <unk>.

John: <unk> of high return growth projects under execution right now and in development Williams remains well positioned to grow at this rate for many years to come and with that I'll turn it over to Jon to walk through the quarter and year to date financials John.

John D. Porter: All right, thanks, Alan. Starting here on slide three with the summary of our year-over-year financial performance, beginning with adjusted EBITDA, we saw an 8% year-over-year increase despite natural gas prices that averaged less than $2 for the first quarter of 2024. Now, included in that 8% overall growth is almost 13% growth from our primarily fee-based infrastructure businesses, excluding marketing and the upstream JVs. As we'll see on the next slide, our adjusted EBITDA growth was driven by strong growth from our core, large-scale natural gas transmission, gathering, and processing, and storage businesses, including the expected favorable effects of our recent acquisition.

John: Alright, Thanks, Alan starting here on slide three with a summary of our year over year financial performance beginning with adjusted EBITDA, We saw an 8% year over year increase despite natural gas prices that averaged less than $2 for the first quarter of 2024 now included in that 8% overall growth is almost 13% growth.

John D. Porter: From our primarily fee based infrastructure businesses, excluding marketing in the upstream JV.

John D. Porter: As you'll see on the next slide our adjusted EBITDA growth was driven by strong growth from our core large scale natural gas transmission gathering and processing and storage businesses, including the expected favorable effects of our recent acquisitions.

John D. Porter: And it also included strong performance from our sequential marketing business, which had another strong start to the year despite falling a bit short of the extraordinary start they had to 2023. Our adjusted EPS increased 5% for the quarter, continuing to grow off of the 19% five-year CAGR we've had for EPS from 2018 through 2023. And available funds from operations growth was just over four percent. Also, you can see our dividend coverage based on AFFO was a very strong 2.6 times on a dividend that grew 6.1% over the prior year.

Speaker Change: And it also included strong performance from our secret marketing business, which had another strong start to the year, despite falling a bit short of the extraordinary starts they had to 2023.

John D. Porter: Our adjusted EPS increased 5% for the quarter continuing to grow off of the 19% five year CAGR. We've had for EPS for 2018 through 2023 and available funds from operations growth was just over 4% also you see our dividend coverage based on <unk> was a very.

John D. Porter: From two six times on a dividend that grew six 1% over the prior year.

John D. Porter: And our debt to adjusted EBITDA was 3.79 times, in line with our expectations for slightly higher leverage in 2024 before dropping back down in 2025 to guidance of 3.6 times. So before we move to the next slide and dig a little deeper into our adjusted EBITDA growth for the quarter, we'll provide a few updates to our financial guidance. Overall, based on our strong start to 2024, we are now guiding to the upper half of our 2024 adjusted EBITDA range of $6.95 billion to $7.1 billion, and we are also well-positioned for upsides to drive toward the high end of this original guidance.

John D. Porter: And our debt to adjusted EBITDA was $3 79 times in line with our expectations for slightly higher leverage in 2024 before dropping back down in 2025 to guidance of three six times.

John D. Porter: So before we move to the next slide and dig a little deeper into our adjusted EBITDA growth for the quarter will provide a few updates to our financial guidance.

John D. Porter: Overall based on our strong start to 2024, we are now guiding to the upper half of our 2024 adjusted EBITDA range of $6 95 billion to $7 1 billion and we are also well positioned for upside to drive towards the high end of this original guidance.

John D. Porter: We also remain well positioned to deliver on our 2025 adjusted EBITDA range of $7.2 to $7.6 billion. Additionally, based on our improved adjusted EBITDA outlook and other changes, including interest expense and income assumption shifts, we now see our key per share metrics, adjusted EPS and AFFO per share, coming in at the high end of their ranges for 2024, which in the case of AFFO per share would lead to a higher overall dividend coverage ratio as well.

John D. Porter: We also remain well positioned to deliver on our 2025 adjusted EBITDA range of seven two to $7 6 billion.

John D. Porter: Additionally, based on our improved adjusted EBITDA outlook and other changes, including interest expense and income assumption shifts we now see our key per share metrics adjusted EPS and <unk> per share coming in at the high end of their ranges for 2024.

John D. Porter: Which in the case of <unk> <unk> per share would lead to a higher overall dividend coverage ratio as well.

John D. Porter: Specifically for 2024, our transmission and Gulf of Mexico business is tracking a bit ahead of plan with a good first quarter and expectations of continued best-in-class execution on our many key high-returning organic projects, as well as immediate results from our Gulf Coast Storage Acquisition with strong performance expected going forward. Our Northeast Gathering and Processing business was basically right on plan for the first quarter, with drilling in the higher-margin wet gas areas and inflation adjusters offsetting lower volumes in some dry gas areas.

John D. Porter: And specifically for 2020 for our transmission in Gulf of Mexico business is tracking a bit ahead of plan with a good first quarter and expectations of continued best in class execution on our many key high returning organic projects as well as immediate results from our Gulf Coast storage acquisition with strong performance expected going.

John D. Porter: Forward.

John D. Porter: Our northeast gathering and processing business was basically right on plan for first quarter with drilling in the higher margin wet gas areas and inflation adjusters offsetting lower volumes in some dry gas areas.

John D. Porter: The West got off to a strong start in the first quarter, where DJ performance following our recent transactions, along with all the hard work our teams did in preparing for winter, allowed for excellent execution, especially across our Rocky Zasper.

John D. Porter: <unk> got off to a strong start in the first quarter were DJ performance. Following our recent transactions along with all the hard work our teams did in preparing for winter allowed for excellent execution, especially across our Rockies assets.

John D. Porter: We see the West also tracking a bit ahead of plan, although we're also embedding a bit more conservatism around Haynesville Volume Assembly. For both the Northeast and West GMP assets, our guidance update today provides room for additional volume reductions and for upside movement toward the higher end of the range if those don't occur. For the marketing business, we've had a strong overall start to 2024, but again, beating the midpoint of our full year 2024 guidance doesn't rely on any additional help from CEQA at this point.

John D. Porter: We see the west also tracking a bit ahead of plan. Although we're also embedding a bit more conservatism around haynesville volume assumptions.

John D. Porter: For both the northeast and West G&P assets, our guidance update today provides room for additional volume reductions and for upside movement towards the higher end of the range if those don't occur.

John D. Porter: For the marketing business, we've had a strong overall start to 2024, but again, beating the midpoint of our full year 2024 guidance doesn't rely on any additional help from secret at this point.

John D. Porter: And then finally, nice to see our upstream joint ventures off to a strong start versus our plan, again, supported by the preparations our team made for winter weather. So we expect our upstream joint ventures to perform well against their plans this year as well.

John D. Porter: And then finally nice to see our upstream joint ventures off to a strong start versus our plan again supported by the preparations our team made for winter weather. So we expect our upstream joint ventures performed well against their plan this year as well.

John D. Porter: So let's turn to the next slide and take a little closer look at the first quarter results. Again, it was a strong start to the year with 8% growth over the prior year. Walking now from last year's $1.795 billion to this year's record $1.934 billion, we start with our transmission and Gulf of Mexico business, which improved $111 million, or 15%, due to the combined effects of nearly a full quarter contribution from the Hartree Gulf Coast Storage Acquisition, which is delivering as expected following a flawless integration effort thus far.

John D. Porter: So, let's turn to the next slide and take a little closer look at the first quarter results.

John D. Porter: Again, it was a strong start to the year with 8% growth over the prior year walking now from last year's $1 $795 billion to this year's record $1 93, 4 billion, we start with our transmission in Gulf of Mexico business, which improved $111 million or 15% due to the combined effect.

John D. Porter: <unk> have nearly a full quarter contribution from the Hartree Gulf Coast storage acquisition, which is delivering as expected following a flawless integration effort thus far.

John D. Porter: Higher Transco revenues, including partial in-service from the Regional Energy Access Project, and also a full quarter contribution from the Mountain West Pipeline acquisition, which closed mid-February 2023. However, segment growth was unfavorably impacted by last year's Bayou ethane divestiture and also some planned maintenance at Discovery. Our Northeast GMP business performed well with a $34 million, or 7%, increase, driven by a $22 million increase in service revenue. This revenue increase was fueled by rate escalations that occurred after the first quarter of last year.

John D. Porter: Transco revenues, including partial in service from the regional energy access project and also a full quarter contribution from the mountain West pipeline acquisition, which closed mid February in 2023.

John D. Porter: Segment growth was unfavorably impacted by last year's Bayou ethane divestiture and also some planned maintenance at discovery.

John D. Porter: Our northeast G&P business performed well with a $34 million or 7% increase driven by a $22 million increase in service revenues.

John D. Porter: This revenue increase was fueled by rate Escalations that occurred after the first quarter of last year.

Alan S. Armstrong: Overall, Northeast gathering volumes performed roughly in line with our plan, down about 2% versus the prior year, with those decreases focused in the dry gas area. Shifting now to the West, which increased $42 million, or 15%, benefiting from a great start to the DJ transactions we completed in the fourth quarter of 2023. Now the increase in the DJ Basin results was about the same magnitude as the unfavorable loss of hedge gains that we had in the first quarter of 2023.

John D. Porter: Overall northeast gathering volumes performed roughly in line with our plan down about 2% versus the prior year with those decreases focused in the dry gas areas.

Alan S. Armstrong: Shifting now to the west, which increased $42 million or 15%, but it's benefiting from a great start for the DJ transactions, we completed in the fourth quarter of 2023 now the increase in the DJ Basin results was about the same magnitude as the unfavorable loss of hedge gains that we had in the first quarter.

Alan S. Armstrong: Additionally, last year the West was significantly unfavorably impacted by the severe Wyoming weather and January processing economics at our Hotel Wyoming Processing. As I mentioned a moment ago, much work was done by our teams to prepare for winter weather this year, and those preparations proved effective in getting us off to a great start for the West and also for our upstream operations in Wyoming. Overall, West's gathering volumes performed roughly in line with our plan, up 5% on the benefits of our DJ transactions and better Wyoming volumes, which more than offset declines primarily in the Haynesville area.

Alan S. Armstrong: 2023.

Alan S. Armstrong: Additionally, last year, the west was significantly unfavorably impacted by the severe Wyoming weather in January processing economics at our Ocala, Wyoming processing plant.

Alan S. Armstrong: As I mentioned, a moment ago much work was done by our teams to prepare for winter weather. This year and those preparations proved effective in getting us off to a great start for the west and also for our upstream operations in Wyoming.

Alan S. Armstrong: Overall west gathering volumes performed roughly in line with our plan up 5% on the benefits of our DJ transaction and better Wyoming volumes, which more than offset declines primarily in the haynesville area.

Alan S. Armstrong: And then you see the $41 million, or 18% decrease in our gas and NGL marketing business. As I mentioned a moment ago, it was another strong start to the year, but it did come up a bit short of the extraordinary 2023. Our upstream joint venture operations included in our other segment were down about $9 million, or 15% from last year. However, our Walmsutter upstream EBITDA was actually up about $8 million with strong volume growth that was substantially offset by lower net realized prices.

Alan S. Armstrong: And then you'll see the $41 million or 18% decrease in our gas and NGL marketing business as I mentioned, a moment ago. It was another strong start to the year, but it did come up a bit short of the extraordinary 2023 start.

Alan S. Armstrong: Our upstream joint venture operations included in our other segment were down about $9 million or 15% from last year, our warm set or upstream EBITDA was actually up about $8 million was strong volume growth that was substantially offset by lower net realized prices.

Alan S. Armstrong: However, the warm center increase was more than offset by lower Haynesville results from both lower net production volumes and net realized prices.

Alan S. Armstrong: However, the Walmstadter increase was more than offset by lower Haynesville results from both lower net production volumes and net realized prices. So again, a strong start to 2024 with 8% growth in EBITDA driven by core infrastructure business performance and continued strength from our market. And with that, I'll turn it back to Alan.

Alan S. Armstrong: So again, a strong start to 2024 with 8% growth in EBITDA driven by core infrastructure business performance with continued strength from our marketing business and with that I'll turn it back to Alan.

Alan S. Armstrong: Okay, thanks, John. And so just a few closing remarks before we turn it over to your questions. First of all, natural gas demand is not just growing now; it is accelerating. This period of low natural gas prices is reaffirming the great bargain that natural gas offers as a practical, low-cost, clean energy solution, and the power-hungry world we live in is rapidly turning to natural gas to generate this power. This, compounded with the hard-to-miss growth in LNG exports and data centers, as well as the continued drumbeat of electrifying everything and reshore it, is accelerating demand, and the expansions of our uniquely placed infrastructure will demand a premium.

Alan: Okay. Thanks, John and so just a few closing remarks before we turn it over to your questions.

Alan S. Armstrong: First of all natural gas demand is not just growing now it is accelerating.

Alan S. Armstrong: This period of low natural gas prices is reaffirming the great bargain that natural gas offers is a practical low cost clean energy solution and the power hungry World. We live in is rapid turning to natural gas to generate power.

Alan S. Armstrong: This compounded with the hard to Miss growth in LNG exports in data centers as well as the continued drumbeat of electrify everything and Richard It is accelerating demand and the expansions of our uniquely placed infrastructure will demand a premium.

Alan S. Armstrong: We have been betting on and setting our strategy around the benefits of natural gas for many years, and we have focused our investments in this space. So if you want to invest in natural gas infrastructure, no one is more concentrated than Williams.

Alan S. Armstrong: We have been betting on in setting our strategy around the benefits of natural gas for many years and have focused our investments in this space.

Alan S. Armstrong: So if you want to invest in natural gas infrastructure no. One is more concentrated in Williams. We are the most natural gas centric large scale midstream company around today, and our natural gas focused strategy will be relevant for decades to come.

Alan S. Armstrong: We are the most natural gas-centric, large-scale, midstream company around today, and our natural gas-focused strategy will be relevant for decades to come, thanks to the accelerating natural gas demand we are seeing today. Our strong conviction in this strategy led us to the bolt-on acquisitions of strategic assets like Mountain West Pipeline, Hartree Storage, and Nortek Storage. A couple of points on these acquisitions. First, these deals were quickly, sorry. These deals were directly in line with our strategy based on where we thought the puck was going.

Alan S. Armstrong: Two accelerating natural gas demand we are seeing today.

Alan S. Armstrong: Our strong conviction that this strategy led us to the bolt on acquisitions in strategic assets like mountain West pipeline Hartree storage in Nortek storage.

Alan S. Armstrong: Couple of points on these acquisitions first these deals were quickly sorry. These deals were directly in line with our strategy based on where we thought the puck was going.

Alan S. Armstrong: The synergies and commercial opportunities we expected are already being realized thanks to clear plans and decisive action. And finally, I'll reiterate our belief that Williams remains a compelling investment opportunity. Our conservative but distinct strategy continues to deliver steady, predictable growth and value to our shareholders and check all the boxes that a long-term investor looks for in a durable and winning portfolio. We've now seen 11 consecutive years of adjusted EBITDA growth and an 8% CAGR of adjusted EBITDA since 2018, and I'll remind you that that is without issuing equity to drive this growth.

Alan S. Armstrong: The synergies and commercial opportunities, we expected are already being realized thanks to clear plans and decisive actions.

Alan S. Armstrong: And finally, I'll reiterate our belief that Williams remains a compelling investment opportunity are conservative, but distinct strategy continues to deliver steady predictable growth and value to our shareholders.

Alan S. Armstrong: And checks all the boxes that a long term investor looks for in a durable and winning portfolio.

Alan S. Armstrong: We've now seen 11 consecutive years of adjusted EBITDA growth and an 8% CAGR of adjusted EBITDA since 2018, and I'll remind you that that is without issuing equity to drive this growth.

Alan S. Armstrong: In addition, we have recognized a 19.5% return on our invested capital during the same period, and our steadfast project execution has led to record contracted transmission capacity and will continue to drive growth in 2024 and beyond. On the predictability front, we have met or beat analyst estimates for 33 quarters in a row now and beat the estimates two-thirds of the time over this eight-year period. And this year marks the 50th year in a row that the Williams Companies has paid a dividend.

Alan S. Armstrong: In addition, we have recognized a 19, 5% return on our invested capital during the same period and our steadfast project execution has led to record contracted transmission capacity and will continue to drive growth in 2024 and beyond.

Alan S. Armstrong: On the predictability front, we have met or beat analyst estimates for 33 quarters in a row now and beat the estimate two thirds of the time over this eight year period.

Alan S. Armstrong: And this year marks the 15th year in a row that the Williams companies has paid a dividend in.

Alan S. Armstrong: In closing, we've built a business that is delivering record profitability and strong financial returns in the present but is positioned even better for the future. And with that, I'll open it up to your questions. Thank you.

Alan S. Armstrong: In closing, we built a business that is delivering record profitability and strong financial returns in the present.

Alan S. Armstrong: But is positioned even better for the future and with that I'll open it up for your questions.

Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. In the interest of time, we kindly ask that you limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from Spiro Dounis with Citi. Please go ahead.

Speaker Change: At this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Operator: In the interest of time, we kindly ask that you limit yourself to one question and one follow up.

Operator: Please standby, while we compile the Q&A roster.

Spiro Michael Dounis: Our first question comes from Spiro <unk> with Citi. Please go ahead.

Spiro Michael Dounis: Thanks, operator. Good morning, team.

Spiro Michael Dounis: Thanks, operator, good morning team.

Spiro Michael Dounis: First one maybe to start with the guidance that two part question. There. So John you had mentioned, leaving room for some volume reductions from here.

John D. Porter: First one, maybe to start with the guidance, two-part question there. So, John, you mentioned leaving room for some volume reductions from here. Curious if you could provide a little more detail there and how to think about maybe the cadence as we go throughout 24. And just given that you've left 25 a bit unchanged, it sounds like maybe 25 also contemplates some slower activity levels. Just curious to kind of get some confirmation on that.

Spiro Michael Dounis: So if you could provide a little more detail there and how to think about maybe the cadence as we go throughout 'twenty four and just given that you've left 25 EBITDA unchanged. It sounds like maybe 25 also contemplates some slower activity levels. So just curious to kind of get some confirmation around that.

John D. Porter: Yeah, I'll start and then Micheal can chime in as well, but yeah, I think overall we are being cautious, you know, obviously with where natural gas prices are and especially during the shoulder months. So, you know, we started off with a plan that I think embedded a fair amount of cautiousness. And I think since then, we've taken a little bit more caution, just given where things finished, you know, from the time that we were at analyst day, which was really mid-winter to where we finished the year.

Speaker Change: Yes ill start and then Michael can chime in as well, but I think overall, we are being cautious obviously with where natural gas prices are and especially during the shoulder months. So we started off with the plan that I think embedded a fair amount of cautious I think caution and I think since then.

Micheal: We've taken a little bit more caution just given where things are finished from the time that we were at analyst day, which was really mid winter to where we finished the year or so.

John D. Porter: So, you know, hopefully, hopefully, we will actually experience some upside relative to these assumptions, but we are going into the rest of the year with quite a bit of caution, especially around the dry gas area.

Michael: Yes, hopefully hopefully we will actually experienced some upside relative to these.

John D. Porter: These assumptions, but we are going into the rest of the year with quite a bit of caution, especially around the dry gas areas.

Micheal G. Dunn: Yeah, this is Mike. I can add to that. Obviously, we talk to our producer customers quite often about their plans, and they're obviously, back and forth, depending on where prices are. We feel really comfortable where we had predicted our results to occur in the second half of the year here with our guidance. Covenant, based on the volume expectations that we have coming from the customers.

Micheal G. Dunn: Yes. This is Michael I can add to that obviously, we talk to our producer customers quite often about their plans.

Mike: They're shifting obviously back and forth depending on where prices are we feel really comfort comfortable.

Micheal G. Dunn: Where we've had predicted our results to occur in the second half of the year here with our guidance.

Micheal G. Dunn: Evident.

Micheal G. Dunn: Based on the volume expectations that we have coming from the customers and so just as a reminder, and I always say this we have a lot of diversity across <unk>.

Spiro Michael Dounis: And so just as a reminder, and I always say this, we have a lot of diversity across geography customers and rich gas as well as dry gas. And, you know, obviously, that benefits us by having that diversity. And so we're still seeing some activity on the rich gas side that's benefiting not only our gathering but our processing business in the Northeast. And as I said, we feel confident about the volume that we have embedded within our going forward plans here in 2024.

Spiro Michael Dounis: Geography customers and rich gas as well as dry gas.

Spiro Michael Dounis: Obviously.

Spiro Michael Dounis: That benefits us and having that diversity and so we're still seeing some.

Spiro Michael Dounis: Activity on the rich gas side, that's benefiting not only our gathering but our processing business in.

Spiro Michael Dounis: In the northeast.

Spiro Michael Dounis: As I said, we feel confident about the volumes that we have embedded within our going forward plans here in 2024.

Alan S. Armstrong: Great, I appreciate the color there. Second question, maybe going to data centers. Alan, to your credit, you've been talking about data center demand for a few quarters now. It seems to be a bit more mainstream, to say the least at this point. So, curious to maybe get your updated thoughts on how you're thinking about that data center demand going forward. And really, what I'd love to know more about is when you think we start to see tangible sort of commercial discussions start to take place and filter through?

Speaker Change: Okay. Great. Appreciate the color there second question, maybe going to data centers.

Alan S. Armstrong: Alan to your credit you've been talking about data center demand for a few quarters now it seems to be a bit more mainstream to say belief at this point. So curious to maybe get your updated thoughts on how you're thinking about that data center demand going forward.

Alan S. Armstrong: What I'd love to know more about it is when do you think we start to see tangible sort of commercial discussions start to take place until tahira.

Alan S. Armstrong: Yeah, great, great question, Spiro. And I do think that, you know, that this is one that will grow over time, not each individual data center isn't going to show up as a big pool and demand given the size and scale of most of these big transmission systems. So it is going to be the collective amount of data centers in these markets that show up. But there certainly is a lot of fury going on right now, I would say, both with our utility customers, and we certainly are working closely with them to make sure that we can serve their needs and the growth in their needs.

Alan: Yes, great Great question, Spiro and I do think that this is one that will grow over time that each each individual data center isn't going to show up as a big.

Alan S. Armstrong: Pool in demand given the size and scale of most of these big transmission system. So it is going to be the collective amount of data centers in these markets that's going to show up.

Alan S. Armstrong: But there certainly is a lot of PRA going on right now I would say both with our utility customers.

Alan S. Armstrong: I would tell you that, you know, it's broader than even though data centers and AI get all the hype. It's actually broader than that in terms of a lot of reshoring of industrial loads that is occurring as well. And part of that is because natural gas is so low cost here. If you think about the rest of the world and the energy costs expanding in the rest of the world and the US sitting here on such a great resource of low cost energy, it is reshoring industrial loads as well. And so I would say it's a combination of those things that tend to center around low-cost power.

Alan S. Armstrong: And we certainly are working closely with them to make sure that we can serve their needs and the growth in there I would tell you that it's broader than even though data centers and AI gets all the hype.

Alan S. Armstrong: It's actually broader than that in terms of a lot of re shoring of industrial loads that is occurring as well.

Alan S. Armstrong: And part of that is because natural gas is so low cost here. If you think about the rest of the world and the energy cost expanding in the rest of the world in the U S. Sitting here on such a great resource of low cost energy. It is reassuring industrial loads as well.

Alan S. Armstrong: And so I would say, it's a combination of those things that tends to centered around low cost power. So I would just say first of all this isn't going to be.

Spiro Michael Dounis: So I would just say, first of all, this isn't going to be a, you know, a one-and-done kind of issue. It's not going to happen maybe as quick as some people are expecting, but because it does take long-term planning to be able to serve the kind of ultimate loads that we're talking to our customers about. But I do think it is going to be very sizable and very impactful.

Spiro Michael Dounis: One and done kind of issue, it's not going to happen maybe as quick as.

Spiro Michael Dounis: Some people are expecting because.

Spiro Michael Dounis: Because it does take a long term planning to be able to serve their kind of ultimate loads that we're talking to our customers about but I do think it is going to be very sizable and very impactful I. Just don't think it's going to happen quite as quick as a lot of people think it will just because a lot of these areas. We are we are constrained on <unk>.

Spiro Michael Dounis: I just don't think it's going to happen quite as quick as a lot of people think it will, just because a lot of these areas we are constrained on infrastructure, and and so you know it's going to take some time and planning to be able to address that but we are we are looking at it both with our customers and we are also looking in in terms of both direct serve as well where all of the combinations of low-cost gas land and communication capacity all come together so I would tell you we as Williams are working very hard it's a very high priority for us to make sure that we don't let any of these opportunities slip by us and we've got a great team as well.

Spiro Michael Dounis: The structure.

Spiro Michael Dounis: And so it's going to take some time and planning to be able to address that but we are we are looking at it both with our customers and we are also looking and in terms of both direct serve as well.

Spiro Michael Dounis: Where all of the combinations of low cost gas.

Spiro Michael Dounis: Land and communication capacity all come together, so I would tell you we as Williams are working very hard it's a very.

Spiro Michael Dounis: High priority for us to make sure that we don't let any of these opportunities slipped bias and we've got a great team assembled that's working on that.

Operator: Great, I'll leave it there. Thanks for the time. Thank you.

Speaker Change: Great I'll leave it there thanks for the time.

Operator: Thank you. One moment for our next question. Our next question comes from Jeremy Tonet with J.P. Morgan. Please go ahead.

Speaker Change: Thank you one moment for our next question.

Operator: Our next question comes from Jeremy Tonet with J P. Morgan. Please go ahead.

Jeremy Bryan Tonet: Hi, good morning.

Jeremy Bryan Tonet: I just want to dive a bit further into the natural gas market, if I could, you know, it appears a bit oversupplied at this point in time. And I was wondering any thoughts you could share, I guess, and how you see supply and demand balancing over the course of this year and into 2025, and I guess how that might impact Williams' trajectory at that.

Jeremy Bryan Tonet: Good morning, Jeremy.

Jeremy Bryan Tonet: Just wanted to dive a bit further into the natural gas market if I could.

Jeremy Bryan Tonet: Appears a bit oversupplied at this point in time, and just wondering any thoughts you could share I guess and how you see supply demand balancing over the course of this year and into 2025, and I guess, how that might impact Williams that trajectory at that point.

Alan S. Armstrong: Yeah, great question Jeremy and I firmly agree with the notion that the market is oversupplied right now, and it's kind of a unique time because we've had the market in such strong contango here for quite some time, putting a lot of value on our storage. I would tell you we feel very fortunate to have bought the storage that we bought in the time frame that we bought it and to pick up the contract that Sequent had on storage as well.

Speaker Change: Yes, great question Jeremy.

Alan S. Armstrong: Firmly.

Alan S. Armstrong: I agree with the notion that the market is oversupplied right now and it's kind of a unique time, because we've had the market in such strong contango here for quite some period.

Alan S. Armstrong: It's putting a lot of value on our storage I would tell you we feel very fortunate to have bought the storage that we bought in the timeframe that we bought and can pick up the contracts that sequence had on storage as well so a lot of in the money business around the storage business because of the strong contango, but that strong contango is also.

Alan S. Armstrong: So a lot of money is in the money business around the storage business because of the strong contango, but that strong contango is also keeping rigs running that might not otherwise be running right now. And I think that's adding to the oversupply situation, but we certainly are starting to see producers respond to that. And we're also starting to see the demand side respond to that as well. And I think we'll see more of that this summer, and the market always finds a way to balance itself with low enough prices, but it's definitely oversupplied right now.

Alan S. Armstrong: Keeping rigs running that might not otherwise be running right now and I think thats, adding to the.

Alan S. Armstrong: The oversupply situation, but we certainly are starting to see producers respond to that and we're also starting to see the demand side respond to that as well and I think we will see more of that this summer and the market always finds a way to balance itself with lowering our prices, but that is definitely oversupplied right now.

Alan S. Armstrong: And I do think that once the demand materializes that we would expect it to start in the mid-25s, I do think that we're going to start to see a big demand for gas that'll last for years to come. So, you know, it is going to be a period, though, of people having to be patient and waiting on the market, and, you know, it's going to take some turning back, if you will, here in the short term.

Alan S. Armstrong: And I do think that once the demand materializes that we would expect in starting in mid 'twenty five.

Alan S. Armstrong: I do think that we're going to start to see.

Alan S. Armstrong: A big call on gas that will last for years to come so.

Alan S. Armstrong: It is going to be a period, though.

Alan S. Armstrong: People are having to be patient and waiting on the market.

Alan S. Armstrong: And.

Alan S. Armstrong: And it's going to take some turn back if you will.

Alan S. Armstrong: Here in the short term, but I think people are.

Alan S. Armstrong: But I think people are appropriately looking to the future, and it is the future is pretty clear and pretty transparent when we think about LNG demand, and we think about incremental demand from our customers on both power traditional power generation, maybe as well as direct power generation. Well, so, in the short term, we're oversupplied, and that's causing a lot of contango in the market. But I think that contango is well founded because there is such a transparent and clear picture of demand.

Alan S. Armstrong: Appropriately looking to the future and it is the future is pretty clear and pretty transparent when we think about LNG demand and we think about incremental demand from our customers.

Alan S. Armstrong: On both powered traditional power generation is maybe as well as direct power generation as.

Alan S. Armstrong: As well so short term, we're oversupplied, that's causing a lot of contango in the market.

Alan S. Armstrong: But I think that contango as well founded because theres, such a transparent and clear picture of demand for the future.

Jeremy Bryan Tonet: Got it. Thank you for that. And then just want to pivot over to leg one and was wondering if you could provide any updates on project progress at this point, given litigation, other items in play. And any thoughts, I guess, on a basis in southern Louisiana, just given this seems to be concerned that that could widen out.

Speaker Change: Got it. Thank you for that and then just wanted to pivot over tail Wag and was wondering if you could provide any updates on project progress at this point given litigation other items in play and any thoughts I guess on basis in southern Louisiana, just given this seems to be concerned.

Jeremy Bryan Tonet: And that that could widen out without the infrastructure coming.

Micheal G. Dunn: Hey, Jeremy, this is Michael. I'll take that. You know, I'll start with a bit of a higher level in regard to pipeline crossings. And generally, you know, we have almost 26,000 pipeline crossings in the US that have been built over the last several decades. Just under 2,200 of those are with energy transfer, and for the most part, those are all being done by our operators in the field unless you have, you know, some design issues that you've got to get your engineers involved with, but for the most part, each of our companies works that out in the field until recently.

Jeremy Bryan Tonet: And to service.

Jeremy Bryan Tonet: Hey, Jeremy this is Michael I'll take that.

Micheal G. Dunn: I'll start with a bit of a higher level in regard to pipeline crossing generally.

Micheal G. Dunn: We have almost 26000 pipeline crossings in the U S that had been built over the last several decade.

Micheal G. Dunn: Just under 2200 of those are with energy transfer and for the most part those are all being done by our operators in the field unless you have some design issues that <unk> got to get your engineers involved with but for the most part each of our companies work that out in the field until most recently.

Micheal G. Dunn: So we've been challenged in Louisiana and some other states by energy transfer and our ability to cross their pipelines. And I would say the tide's turning now on the legal issues. We're seeing, you know, the appellate ruling from the Louisiana court that overturned a lower court ruling in the DTM case. You certainly think that's going to be a... Page PAGE of NUMPAGES www.verbalink.com, Out of Haynesville, there's definitely a need to move volumes, or gathering systems, to the demand centers in the Gulf Coast area, and ultimately, we'll get through the legal process; we'll get through the FERC process that's now been initiated by energy transfer, and certainly this was a move that we expected energy transfer to do.

Micheal G. Dunn: So we've been challenged in Louisiana, and some other states by energy transfer and our ability to cross their pipeline.

Micheal G. Dunn: And I would say the tide is turning now on the legal issues we're seeing.

Micheal G. Dunn: Pellet ruling from the Louisiana core.

Micheal G. Dunn: I will return to a lower court ruling in the <unk> case, we certainly think thats going to be.

Micheal G. Dunn: The same outcomes that will have on our cases ultimately it certainly is troubling that we're.

Micheal G. Dunn: We're having these difficulties with an industry peer, but ultimately we're going to get our pipeline of project built.

Micheal G. Dunn: Out of the Haynesville, there is definitely a need to move volume through our gathering systems.

Micheal G. Dunn: Two the demand centers in the Gulf Coast area, and ultimately we will get through the legal process will get through the FERC process has now been initiated by.

Micheal G. Dunn: By energy transfer uncertainty this was a move that we expected energy transfer to do.

Micheal G. Dunn: And so it was anticipated, and that was established within our project schedule that I talked about at analyst day. So we still expect the second half of 2025 and service day. And just in closing, you know, we've filed, permitted, and installed more FERC-regulated pipelines in the U.S. than any operator. Over the last decade, we fully know what a project is when it comes to either being a designated gathering line or when it should be FERC regulated.

Micheal G. Dunn: And so it was anticipated and that was to.

Micheal G. Dunn: Established within our project schedule that I talked about at analyst day. So we still expect the second half of 2025 in service date.

Micheal G. Dunn: And just in closing we filed permitted and installed more foresee regulated pipelines in the U S. At any operator over the last decade, we fully know well when a project is when it comes to either being a designated gathering line.

Micheal G. Dunn: Or when it should be for RC regulated and we've taken that certainly under consideration in the <unk>.

Micheal G. Dunn: And we've taken that certainly into consideration in the formulation of the design of the light project, and ultimately, we'll get it built, and it's unfortunate that we're having these delays, but I'm very confident in our ability to finish this project as we've outlined in our most recent schedule. It's going to be needed. The growth in LNG demand in the Gulf Coast is going to happen. We're certainly seeing... The expectations of that occur late this year or early 2025 when some of the new facilities are coming online. And so we're, as I said, very confident about the project and looking forward to getting the legal issues behind us and getting on with construction.

Micheal G. Dunn: Formulation and the design of the <unk> project and ultimately we will get it built and it's unfortunate that we're having these delays but.

Micheal G. Dunn: I'm very confident in our ability to finish this project as we've outlined in our most recent schedule.

Jeremy Bryan Tonet: Got it. Thank you very much.

Micheal G. Dunn: Going to be needed.

Jeremy Bryan Tonet: The growth in the LNG demand in the Gulf Coast is going to happen we are certainly seeing.

Jeremy Bryan Tonet: The expectations of that occurring late this year early 2025, and some of the new facilities are coming online.

Speaker Change: And so we are.

Jeremy Bryan Tonet: As I said very confident about the project and looking forward to getting the legal issues behind us and getting on with construction.

Jeremy Bryan Tonet: Got it thank you very much.

Operator: Thank you. One moment for our next question. Our next question comes from Manav Gupta with UBS. Please go ahead.

Speaker Change: Thank you fund moment for our next question.

Operator: Our next question comes from Manav Gupta with UBS. Please go ahead.

Manav Gupta: Good morning, and congratulations on a very strong quarter I only have one question. When you look at your 2025 guidance here can you help us elaborate the growth capex like key projects that you'll be looking to spend the money in 2025 2 billion in EBITDA from <unk>.

Manav Gupta: But can you help us identify some of those key projects that the good spending will be done.

Manav Gupta: Yeah, absolutely. So when we look at 2025, we've got quite a bit of spending expected on the Louisiana Energy Gateway Project that Micheal just referred to. So that would be in the category of gathering and processing expansions, and by far the biggest in the gathering and processing area would be the Louisiana Energy Gateway Pipeline Project. We do have some new energy ventures investments that we're expecting to begin to spend some money on, including our first carbon capture and sequestration project, which is at the terminus of the Louisiana Energy Gateway Project.

Manav Gupta: Yes, absolutely so when we look at 2025.

Manav Gupta: We've got really Ed.

Manav Gupta: Quite a bit of spend expected on the Louisiana Energy Gateway project that that Michael just referred to so that would be in the category of gathering and processing expansions are by far the biggest in the gathering and processing area would be the Louisiana Entergy Gateway pipeline project, we do have some new energy ventures' investments that we're expecting to begin to spend.

Manav Gupta: Some money on including our first carbon capture and sequestration project, which is S. Determinants of the Louisiana Energy Gateway project. So it's related to that to that lag project, but we also have some solar projects that we'll be investing in.

Manav Gupta: So it's related to that leg project, but we also have some solar projects that we'll be investing in. We will make some of our contributions to our upstream JVs. Those are typically smaller amounts of capital. But then, finally, you can see the long list of transmission projects that we have on Transco and Mountain West that are still in execution. Obviously, we're wrapping up regional energy access this year, but you'll see many, many that will continue to have a spend going into 2025 as those reach their in-service date in 2025. So those would be the main pieces of the growth capital for 2025.

Manav Gupta: We won't have some of our contributions to our upstream JV is those are typically smaller amounts of capital. But then finally you can see the long list of transmission projects that we have on Transco and mountain west better that are still in execution. Obviously, we're wrapping up regional energy access this year, but youll.

Manav Gupta: See many many that will continue.

Manav Gupta: Continue to have a spend going into 2025 as those reach their in service dates.

Manav Gupta: In 2025, so that would be the that would be the main pieces of the growth capital for 2025, and <unk> I would just add in terms of drivers for growth in 2005, we have a number of large deep water projects that we've already spent the majority of the capital those will be coming on.

Alan S. Armstrong: And Gupta, I would just add, in terms of drivers for growth in 2025, we have a number of large deepwater projects that we've already spent the majority of the capital on. Those will be coming on towards the end of this year and into next year.

Alan S. Armstrong: Towards the end of this year and into next year. So we're really excited about the big step up in deep water growth and how well we're positioned out there for what we think is going to be a lot of continued growth in that area. So but in terms of drivers for growth. That's one. Additionally drivers for growth would be the rate case on transco and so.

John D. Porter: So we're really excited about the big step up in deepwater growth and how well we're positioned out there for what we think is going to be a lot of continued growth in that area. But in terms of drivers for growth, that's one. Additionally, another driver for growth would be the rate case on Transco. And so the benefit of all the money we're spending right now on emission reduction projects will show up; the benefits of that will show up when we start charging our new rates in March of 2025.

John D. Porter: The benefit of all the money, we're spending right now on the emission reduction projects.

John D. Porter: We'll show up the benefits of that will show up when we start charging our new rates in March of $25. So those are some of the other drivers for growth.

John D. Porter: So those are some of the other drivers for growth. Yeah, I didn't do a great job of connecting that to growth. So, thanks Alan. Just specifically, we have six Transco growth projects that are in service between the second half of 2024 and 2025 and five major Gulf of Mexico projects that are in service as well, as well as that Transco rate case that Alan mentioned. But in many cases, those are projects where we've already spent the capital, or in some cases, some of the deepwater projects, there were no capital requirements at all.

John D. Porter: I didn't do a great job of connecting that to growth. So thanks, Alan It just specifically we had fixed transco growth projects that are in service between the second half of 'twenty, four and 2025 and five major Gulf of Mexico projects that are in service as well as well as at Transco rate case fit that Alan mentioned and but in many cases.

John D. Porter: Those are projects, where we've already spent the capital or in some cases some of the deepwater projects. There was no there were no capital requirements at all.

Manav Gupta: Thank you.

Speaker Change: Thank you for that detailed response and congrats on a great quarter.

Manav Gupta: Sure.

Operator: Thank you. One moment for our next question. Our next question comes from Praneeth Satish with Wells Fargo. Please go ahead.

Speaker Change: Thank you.

Speaker Change: Thank you one moment for our next question.

Praneeth Satish: Our next.

Praneeth Satish: Comes from Puneet <unk> with Wells Fargo. Please go ahead.

Praneeth Satish: Thanks. Good morning.

Praneeth Satish: Thanks, Good morning, maybe let me start with the with a data center question here. So most of the expansion on Transco over last few years have taken place in the northeast, but if we start to see large AI data center build out or even some of the re shoring that you've talked about in <unk>.

Alan S. Armstrong: Maybe let me start with a data center question here. So, most of the expansions on Transco over the last few years have taken place in the Northeast. But if we start to see large AI data center build outs, or even some of the reshoring that you talked about in other regions along Transco's path, like the Southeast, and that, you know, the bottleneck for more capacity shifts south on Transco, just trying to think about how that impacts things.

Alan S. Armstrong: Other regions, along Transco is path like the southeast and that the bottleneck for more capacity shifts south on Transco.

Alan S. Armstrong: Trying to think about how that impacts things is there more opportunity for maybe higher return compression expansions on the southeastern part of Transco or just more available capacity there.

Alan S. Armstrong: Is there more opportunity for, you know, higher return compression expansions on the southeastern part of Transco or just more available capacity there? Or do you think expansions anywhere along Transco are kind of uniform in terms of return?

Alan S. Armstrong: Or do you think expansions anywhere along transco are kind of uniform in terms of return.

Alan S. Armstrong: Yeah, good question. Yeah, you know, the first evidence of that, even though it really was before the data center load became quite so evident, is our Southeast Supply Enhancement Project. You know, we've announced that and now filed it for the first quarter at 1.6 BCF a day. And that serves both the Mid-Atlantic and the Southeast markets. Since that time, as I mentioned, those utilities have come out and said that they are missing their growth targets by many multiples. In fact, I think Southern Company came out and said they missed their original growth per power generation by 17 times.

Alan S. Armstrong: Yes. Good question, yes, the first evidence of that even though it really was before the data center load became quite so evident.

Alan S. Armstrong: Is our southeast supply enhancement project, we've announced that and and now filed in the first quarter for one six Bcf a day and that does serve both the mid Atlantic and the southeast markets.

Alan S. Armstrong: Since that time, the as I mentioned, those utilities have come out and said that they were missing missing their growth targets by.

Alan S. Armstrong: Many multiples in fact, I think southern company's came out and said they miss their original growth.

Alan S. Armstrong: For power generation by 17 times.

Alan S. Armstrong: So lots lots going on in those markets in terms of our abilities to serve those.

Alan S. Armstrong: So, lots going on in those markets. In terms of our abilities to serve them, we're extremely well positioned to serve them. Again, the Southeast Supply Enhancement Project is the first initial example of that, and that'll serve projects along Transco to the Mid-Atlantic and Southeast, starting at Station 165, and we'll take advantage of supplies coming in from the Mountain Valley Pipeline at 165. In terms of the future, continued ability to expand along the system and ability to restore pipeline pressures on systems that have been derated over time due to population encroachment in

Alan S. Armstrong: We're extremely well positioned to serve that again southeast supply enhancement project is the <unk>.

Alan S. Armstrong: First initial example of that and that'll serve projects.

Alan S. Armstrong: Along.

Alan S. Armstrong: Transco to the mid Atlantic Southeast starting at station 165, and we will take advantage of supplies coming in from the Mountain Valley pipeline at $1 65 in terms of the future.

Alan S. Armstrong: Continued ability to expand along system.

Alan S. Armstrong: And ability to restore pipeline pressures on systems that had been derate over time due to population encroachment in the areas.

Alan S. Armstrong: So lots of ways for us to expand along that existing capacity, and believe me, there is a lot of work going on right now with our teams and with our customers in those areas figuring out the very best solutions to serve their growth needs in that area. There's a lot going on in that front that, you know, we were not in a position to talk about yet, but a lot of expansion in that corridor. And again, Transco is extremely well positioned to serve that demand with its expanding network.

Alan S. Armstrong: Lots of ways for us to expand along that existing capacity and believe me. There is a lot of work going on right now with our teams and with our customers in those areas figuring out the very best solutions to serve their growth needs in that area and theirs.

Alan S. Armstrong: A lot going on.

Alan S. Armstrong: In that front that we are not in a position to talk about yet, but a lot of a lot of expansion in that corridor and again Transco is extremely well positioned to serve that with the expansions of our existing system.

Praneeth Satish: Got it. That's helpful. And then I just had a couple questions here on the, you know, the Washington storage transition to market based on Transco. Can you just help frame maybe how much of an uplift you expect for moving that from storage to market based on, I guess, cost of service? How much difference in rates could you see there? And then how much of that capacity do you need to go through an open season now? And how much of that capacity do you think third parties could take versus sequential? And then finally, is this a shift to market-based rates? And the upside, is that reflected in 2025?

Speaker Change: Got it that's helpful.

Praneeth Satish: And then I just had a couple of questions here on the Washington storage.

Praneeth Satish: Transition to market based on Transco.

Praneeth Satish: Can you just help frame maybe how much of an uplift do you expect from moving that from to market base from I guess cost of service how much difference in rates could you see there.

Praneeth Satish: Then how much of that capacity do you need to go through an open season, now and how much of that capacity do you think third parties could take versus sequent.

Praneeth Satish: And then finally is this shift to market based rates and the upside is that reflected in 2025 EBITDA guidance at all.

Micheal G. Dunn: Mike, you take that. Yeah, I want to say that. So, yes, answer your last question first.

Praneeth Satish: Michael you can take that yes I'll.

Mike: I'll take that so yes answer your last question first that is embedded in our guidance for 2025, so the process.

Micheal G. Dunn: That is embedded in our guidance for 2025. So the process, as it stands now, FERC has approved our settlement with the customers. The customers have a choice to take on a tranche of capacity on a term that they so desire. So they're making that decision now, between now and the end of May. So ultimately, they'll decide upon how long of a term they want, and there's already a predetermined rate for that that was embedded within the settlement.

Micheal G. Dunn: And so once they make that decision, that will be effective as of April of 2025, so that's when those rates will go into effect. We definitely have expectations about where we think the customers will end up in regard to their choices of selection. Ultimately, we think that it will be fully subscribed by existing customers. It's a really good project for them, it's a great project for us, the storage is in high demand. We don't expect anybody to turn back any of that capacity. Got it. Thank you.

Micheal G. Dunn: Where it stands now FERC approved our settlement with the customers the customers have a choice to take all of that.

Micheal G. Dunn: Tranche of capacity.

Micheal G. Dunn: On a term that they so desire so they're making that decision now between now and the end of May.

Micheal G. Dunn: So ultimately they will decide upon how long of a term they want and there's already a predetermined rate for that that was embedded within the settlement.

Micheal G. Dunn: And so once they make that decision that will be effective as of April of 2025, so that when those rates will go into effect. So we definitely embedded with what our expectations are with where we think the customers will end up in regard to their choices of selection. Ultimately we think it will be fully subscribed by existing customers.

Micheal G. Dunn: It's a really good project for them, it's a great project for US the storage is in high demand, we don't expect anybody to turn back any of that capacity at this time.

Micheal G. Dunn: Got it thank you.

Praneeth Satish: Thank you. One moment for our next question. Our next question comes from Gabriel Moreen with Mizzou. Please go ahead.

Speaker Change: One moment for our next question.

Praneeth Satish: Our next question comes from Gabriel Moreen with Mizuho. Please go ahead.

Gabriel Philip Moreen: Hey, good morning, everyone. A quick one on your Gulf projects. I think there's been some talk about Shenandoah being delayed, you know, maybe a half a year, plus or minus. Can you talk about whether you're potentially seeing that and whether that would impact project economics or would just demand fees kick in regardless?

Gabriel Philip Moreen: Hey, good morning, everyone. A quick one on your Gulf projects, I think theres been some talk about terra about Shenandoah being delayed maybe a half a year plus or minus can you talk about whether you are potentially seeing that and whether that would impact project economics or just demand fees kicking regardless.

Alan S. Armstrong: Yeah, Gabe, I would just say our part of that project is on schedule. We're not really at liberty to get into the details of the contracting details of that, but we remain confident in what we have in forecast for that project. So anyway, we're not going to speak for the producer. Our part of that project and our work there is on time and we do a great job of executing on that. We'll be ready to serve when we are supposed to be ready.

Speaker Change: Yes, Gabe I would you say are part of that project is on schedule.

Alan S. Armstrong: Not really at Liberty to get into the details of the.

Alan S. Armstrong: Contracting details in that but.

Alan S. Armstrong: We remain confident in what we have in the forecast for for that project. So.

Alan S. Armstrong: Anyway, we're not going to speak for the producer are part of that project and our work. There is on time the team doing a great job of executing on that.

Alan S. Armstrong: We will be.

Alan S. Armstrong: Our ready to serve when we were supposed to be ready to serve on that project.

Gabriel Philip Moreen: And then maybe I can just talk LNG a little bit. There's a stake in an LNG export facility under construction that I know you've looked at pretty hard over the course of time. Are you interested in potentially looking at that stake and just, you know, how it may or may not fit into a broader LNG strategy that you may be pursuing over time?

Alan S. Armstrong: Understood.

Gabriel Philip Moreen: Then maybe if I can just talk LNG, a little bit theirs.

Gabriel Philip Moreen: That's taken a facility LNG export facilities under construction that I know you've looked at it pretty hard over the over the course of time are you interested in potentially looking at that stake and just how it may or may not fit into our broader LNG strategy that you may be pursuing over overtime.

Unknown Executive: Gabe, are you referring to Port Arthur?

Gabriel Philip Moreen: Dave are you referring to port Arthur.

Unknown Executive: Yeah, do you want to take that one? Yeah, you know, I think in general... You know, we're focused on high-return projects that, you know, we operate, we build and operate. And so, you know, we continue to look at how we can connect our customers to the most attractive markets. LNG markets are obviously an important destination for US natural gas. And so we're going to continue to look for ways to connect our customers and our value chain to those international markets. You know, we've typically not been looking for non-operators.

Unknown Executive: Yes.

Gabe: Yes, I do want to take them.

Unknown Executive: I think in general.

Unknown Executive: We're focused on high return projects that.

Unknown Executive: We operate we build and operate and so we continue to look at how we can connect our customers to the most attractive markets LNG markets are obviously an important.

Unknown Executive: <unk> for U S natural gas and so we're going to continue to look for ways to connect our customers in our value chain to those international markets, but we've typically not been.

Unknown Executive: You know, we've typically not been, or have not been looking for non-operated positions.

Unknown Executive: Not been looking for non operated positions and infrastructure projects. We've got so many opportunities to invest in.

Unknown Executive: Our kind of organic projects, but thats been our primary focus, but again, we find opportunities that come with our ability to connect our customers to better markets, we'll look at them, but that's certainly not the primary focus of our LNG strategy.

Speaker Change: Thanks Scott.

Unknown Executive: [inaudible]

Speaker Change: Thank you one moment for our next question.

Operator: Thank you. One moment for our next question. Our next question comes from Neal Mitra with Bank of America. Please go ahead.

Unknown Executive: Our next question comes from Neel Mitra with Bank of America. Please go ahead.

Neal Mitra: Hi, thanks for taking my question. I wanted to follow up on the SETI expansion in your conversations with your big three utility customers there. You had an interesting slide at analyst day where you talked about those utilities, having quotes about not procuring enough natural gas and kind of underestimating power. When they made those quotes in your conversations, did that reflect the AI theme? So do you think that the project that you've contracted so far has some AI components in it, or is it just general electrification so far that's being reflected in that demand?

Neal Mitra: Hi, Thanks for taking my question I had I wanted to follow up on the subsea expansion in your your conversations with your banks.

Neal Mitra: III utility customers. There you had interesting slide at the analyst day, where you talked about those utilities, having folks about.

Neal Mitra: Not procuring enough.

Neal Mitra: Natural gas.

Neal Mitra: Under estimating power.

Neal Mitra: When they made those quotes in your conversations did that reflect the AI team.

Neal Mitra: So do you think that the the projects that you've contracted so far has some AI components in it or is it just general electric case, so far that's being reflected in that demand.

Alan S. Armstrong: Yeah, to answer your question, you know, our work on that in terms of developing that project obviously was even further ahead of when we announced that, and so you kind of have to remember that and think about the timing of that. And to answer your question very simply, the degree, and the kind of incremental demand that we're talking about is not reflected in the CESI project. There might have been some expectation for that, but in terms of the large incremental growth impacts that customers are now starting to reflect in their integrated resource plans, those are somewhat, I wouldn't say perfectly incremental, but certainly a big chunk of that is incremental to the load that we're serving.

Neal Mitra: Yes.

Alan S. Armstrong: Answer your question no our work on that in terms of developing that project. Obviously was even further ahead of when we announce that and so you kind of have to remember that as I think about the timing of that and to answer your question very simply.

Alan S. Armstrong: Degree of kind of incremental demand that we're talking about is not reflected in the SaaS project, there might've been some expectation for that but but in terms of the large incremental.

Alan S. Armstrong: Growth impacts that customers are now starting to reflect in their integrated resource plans.

Alan S. Armstrong: Those are somewhat I wouldn't say perfectly incremental but certainly.

Alan S. Armstrong: Big chunk of that is incremental to the to the load that we're serving on SFC.

Alan S. Armstrong: Perfect, thank you. And then I wanted to follow up on some of your producer activity. I know one or more of your customers are delaying pills so gas prices get better. Do you have any updates on that? And then how do you factor that into your 25 guidance if you just have a lower base going into 25 if those don't get turned in line?

Speaker Change: Okay. Thank you and then.

Alan S. Armstrong: I wanted.

Alan S. Armstrong: To follow up on some of your producer activity I know one or more of your customers are delaying.

Alan S. Armstrong: Pills.

Alan S. Armstrong: Gas prices get better.

Alan S. Armstrong: Have any updates on that and then how do you factor that into 25 guidance. If you just saw.

Alan S. Armstrong: Lower base going into 25, plus don't get turned in line.

Alan S. Armstrong: Yeah, well, you know, first of all, there's a lot of productive capability in these fields and the ability to ramp that up and respond to the market. And I think the producers are managing their business in a way that they will be ready to respond to it. As I mentioned in my comments earlier about the gas supply and demand balance. That's certainly what we're seeing, producers being willing and able to commit to what they need to on their end to be ready to respond to that.

Alan S. Armstrong: Yes.

Alan S. Armstrong: First of all there is a lot of productive capability in these fields.

Alan S. Armstrong: And the ability to ramp that up and respond to the market and I think the producers are managing their business in a way that they will be ready to respond to and as I mentioned in my comments earlier around gas supply and demand balance.

Alan S. Armstrong: That's certainly what we're seeing is as producers being.

Alan S. Armstrong: Willing and able to.

Alan S. Armstrong: Commit to.

Alan S. Armstrong: What they need to on there and to be ready to respond to that.

Alan S. Armstrong: So I think there certainly will be some upside, you know, to our business in 25, as the market and supply start to respond to that. But I, you know, it is typically a very long lag period and very difficult for the market to be able to respond quickly. I do think, however, this time, and I hate to be the guy calling it different this time, but because there is such strong contango in the market right now, we are seeing a different response and a different positioning from our producers than we typically see in this situation. And again, I think that's because there is such confidence in both the fundamentals and visibility to the foreign market that's suggesting that that's how they should be.

Alan S. Armstrong: So I think there is certainly will be some upside.

Alan S. Armstrong: <unk> to our business and 25 as the market and supply start to respond to that.

Alan S. Armstrong: But.

Alan S. Armstrong: It is.

Alan S. Armstrong: Lee of.

Alan S. Armstrong: A very long lag period, and very difficult for the market to be able to respond quickly I do think however at this time.

Alan S. Armstrong: <unk> to be the guy comments different this time, but.

Alan S. Armstrong: <unk>.

Alan S. Armstrong: But because there is such strong contango in the market right now we are seeing is different.

Alan S. Armstrong: Our response and a different positioning from our producers than we typically see.

Alan S. Armstrong: In this situation and again I think thats because there is such confidence in both the fundamentals and the visibility to the forward market that suggesting that thats, how they should behave at this point.

Neal Mitra: Perfect. Thank you very much.

Speaker Change: Perfect. Thank you very much.

Speaker Change: Thank you one moment for our next question.

Neal Mitra: Our next question comes from Theresa Chen with Barclays. Please go ahead.

Neal Mitra: Okay.

Speaker Change: Good morning, Thank you for taking my question.

Speaker Change: Alan I would like to go back and touch on the comments.

Neal Mitra: Strong contango benefiting our storage assets.

Speaker Change: Can you give us a sense of what youre seeing changes in storage rates as contracts come up for renewal.

Speaker Change: Is this largely due to the current contango as the Kanata the contained or do you think these economics.

Alan S. Armstrong: Yeah, good question, Theresa. I'll give you my comments, and I'm going to ask Chad to give you a little more detail on that. But, you know, I think over time, we have seen the value of storage, and we've certainly seen it with our own subsequent operations. We have seen the value of storage in these volatile markets and markets that are having to respond very quickly to shifts in demand. I think it's also pretty obvious to see that both with an increase in renewable power on the market, as well as more and more LNG, as that comes on, LNG is going to need to be a little more responsive.

Neal Mitra: <unk>.

Speaker Change: Yes. Good good question <unk> I'll give you my comments and I'm going to ask Chad to give you a little more detail on that but.

Alan S. Armstrong: I think over time, we have seen the value of storage and we certainly have seen it with our own sequent operations, we've seen the value of storage in these volatile markets and markets that are having to respond very quickly.

Speaker Change: Two shifts in demand continuing I think it's also pretty visible to see that both with.

Chad: The increase in renewable power on the market as well as more and more LNG as that comes on.

Chad: LNG is going to need to be a little more responsive, it's not going to run at 100% load factor.

Alan S. Armstrong: It's not going to run at a hundred percent load factor when LNG is closer to meeting the more mature demands of that market. So, I think those are a lot of the drivers for the increase in storage capacity. As Michael mentioned earlier, we certainly have seen a pretty strong response from our customers in making sure that they don't lose the benefits of the Washington storage facility and the flexibility of their business.

Alan S. Armstrong: When when the LNG is more is closer to meeting.

Alan S. Armstrong: More mature demand from that market. So I think those are a lot of the drivers for the increase in storage capacity as Michael mentioned earlier, we certainly have seen a pretty strong response from our customers and making sure that they don't lose the benefits of the Washington storage facility and the flexibility.

Alan S. Armstrong: And I think as the market turns to more and more hourly type services and pipelines tighten up on the flexible services and no notice services that they've previously offered, I think that's going to continue to put more and more pressure on and more need on the storage business. And I think that's becoming pretty evident in the gas market. In terms of Contango driving value, it's certainly one of the elements of value that is driving that. But I think it's a little broader than just the Contango in terms of what's driving the value, pretty rapid increases for, I'll let Chad talk a little more specifically. Yeah, I think it's really good.

Alan S. Armstrong: Their business.

Alan S. Armstrong: And I think as.

Chad: As the market turns to more and more hourly type service.

Chad: And pipelines tighten up on the.

Chad: The flexible services and no notice services that they previously offered.

Chad: Think thats going to continue to put more and more pressure and more need for the storage business and I think thats, becoming pretty evident.

Alan S. Armstrong: To.

Chad: The gas marketing business in terms of contango driving the value. It's certainly one of the elements of value that that is driving that.

Chad: But I think it's a little broader than just the contango in terms of what's driving that.

Alan S. Armstrong: Pretty rapid increase in storage rates and I'll, let Chad talk a little more specifically about what we're seeing in rates, yes, I think it's a really important theme to keep an eye on.

Alan S. Armstrong: Both.

Chad: The ability to set up our infrastructure to benefit from volatility in price that supports.

Chad: Extraction value, but also importantly, we're seeing the transition we've been talking about it for a while increased volatility in power markets Alan talked about the power demand that we're seeing and we talk often in PJM numbers themselves say that by 2040 peak demand will more than double that was significant.

Alan S. Armstrong: From a from a set of infrastructure thats already full and so assets like storage will not only be driven from a value perspective by.

Chad: Dislocations in price over time like a contango were seeing in the current market, but we are seeing an evolution and a recognition that youre going to need those assets for reliability power produced power companies will need storage LNG companies, we're seeing much more variable demand coming in the future and so not only will we be set up for storage to have.

Chad: <unk> value in the near term when there are price dislocations like we are seeing with the contango in the market, but we're also seeing an.

Chad: <unk> of the market to recognize that storage value would increase even when there may not be apparent price dislocation there will be a need for reliability and backup bolt in supply and the ability to put gas into storage win upset conditions occur. So we're set up really well to benefit from bowl.

Chad: The value dislocations you see in the current market in the long term fundamentals around the need for storage for reliability. So all that being said I don't think that the.

Alan S. Armstrong: said, I don't think that, you know, the contango in the market is the only

Chad J. Zamarin: The Contango in the market is the only necessary driver for long-term storage value. We see long-term storage value both in markets where there are dislocations from a price perspective but also because of the long-term need for reliability and the important role that storage plays in providing reliability.

Chad: The contango in the market is the only necessary driver for long term storage values, we see long term storage valuable in markets, where there are dislocations from a price perspective, but also because of the long term need for reliability and the important role that storage plays in providing reliability.

Speaker Change: Thank you so much.

Operator: Thank you. One moment for our next question. Our next question comes from Tristan Richardson with Scotiabank. Please go ahead.

Speaker Change: One moment for our next question.

Operator: Our next question comes from Tristan Richardson with Scotiabank. Please go ahead.

Tristan James Richardson: Hi, good morning, guys. Alan, just maybe switch back to the thematic for a moment. At analyst day, you and some of your guest speakers talked a lot about sort of that general need for permitting reform and how critical gas supply is to power through this increased demand we're seeing in electricity. How critical is it, Unknown Speaker? Regulatory Environment. For energy supply to kind of meet this accelerating demand growth you guys have talked about today and the slide you talked about with sort of the 3x demand you're seeing over the next decade.

Tristan James Richardson: Hi, good morning, guys.

Tristan James Richardson: Alan just maybe switching back to the thematic for a moment.

Tristan James Richardson: At the Analyst day, you in some of your guest speakers.

Tristan James Richardson: So it's a lot about sort of that general need for permitting reform and how critical.

Tristan James Richardson: Gas supply is yet.

Tristan James Richardson: Power through this increased demand we are seeing in electricity.

Tristan James Richardson: How critical is.

Tristan James Richardson: Sort of permitting reform or at least a more amenable.

Tristan James Richardson: Tori environment for.

Tristan James Richardson: For energy supply to kind of meet this accelerating demand growth you guys have talked about today.

Tristan James Richardson: The slides you talked about sort of the three X demand youre seeing over the next decade.

Alan S. Armstrong: Yeah, you know, I would just say, as the world turns off coal as the reliable baseload and shifts more and more and more to natural gas, the baseload, as Chad mentioned, that reliability issue is going to be really key. And, and us continuing to stretch and deny the amount of capacity we really need in these markets is going to become a louder and louder drumbeat. You're hearing it from the ISOs already.

Tristan James Richardson: Yeah.

Alan S. Armstrong: I would just say as the world turns off of coal as the reliable baseload and and is shifting more and more and more to natural gas as the baseload as Chad mentioned that reliability issues going to be really key.

Alan S. Armstrong: And us continuing to stretch and deny the amount of capacity you really need in these markets.

Alan S. Armstrong: You're hearing it from, starting to even hear it from the Utility Commission, about how important it is that they have access to natural gas. You're even starting to hear it in places like Connecticut that are, you know, upset that they don't have low-priced gas in those markets because Governor Cuomo stopped a number of projects coming across the state. So it's unfortunate.

Alan S. Armstrong: <unk> is going to become a louder and louder drumbeat, you're hearing it from the ISO is already you are hearing it from starting to even from the utility commissions.

Alan S. Armstrong: About how important it is that they have access to natural gas you are even starting to hear it in places like Connecticut that are upset that they don't have low price gas into those markets because governor Cuomo stopped a number of projects coming across the state. So.

Alan S. Armstrong: It's kind of like, you know, sometimes it's a terrible situation as we think about long-term infrastructure and politics, but the two don't meet very well together, unfortunately. And sometimes a bridge has to fail for people to realize that we have to spend money on maintaining and keeping our bridges safe. And And I would say a similar situation on gas infrastructure. We are heavily underinvested in gas infrastructure right now in terms of keeping up with this growing need.

Alan S. Armstrong: Its unfortunate as kind of like sometimes.

Alan S. Armstrong: It's a terrible situation as we think about long term infrastructure and politics, but the two don't meet very well together, Unfortunately, and sometimes the bridge has to fail the people to realize that we have to spend money on maintaining and keeping our bridge is safe.

Alan S. Armstrong: <unk>.

Alan S. Armstrong: And I would say similar situation on gas infrastructure.

Alan S. Armstrong: We are heavily.

Alan S. Armstrong: We underinvested in gas infrastructure right now in terms of keeping up with this growing need. The good news is I think the screen is going to get pretty loud and its not just going to be from the gas industry. When when the tech industry is really struggling to get adequate supplies.

Alan S. Armstrong: The good news is I think the scream is going to get pretty loud, and it's not just going to be from the gas industry when the tech industry is really struggling to get adequate supplies for data centers and power. I think that both the utilities are going to get loud on this. I think the tech companies are going to get loud on this. Hopefully, it doesn't come to catastrophe in some of the markets, but it's amazing to me how quickly people forget how close we got to losing parts of the Northwest markets due to a couple of very small failures on some of our competitors' pipelines serving into us that caused a shortage as well as a shortage at one of the big storage facilities up there.

Alan S. Armstrong: For data centers and power I think that both the utilities are going to get loud on this I think the tech companies are going to get loud on this.

Alan S. Armstrong: <unk>.

Alan S. Armstrong: And.

Alan S. Armstrong: Hopefully it doesn't come to.

Alan S. Armstrong: Catastrophe and some of the markets, but it's amazing to me how quickly people forget how close we got last this last winter how close we got to losing parts of the northwest markets due to a couple of very small failures on some.

Alan S. Armstrong: Some of our competitors pipeline serving into us that caused the shortage as well as the shortage that one of the big storage facilities up there so.

Alan S. Armstrong: You know, we've been able to manage, we've been able to, you know, keep the gas service on, but we really haven't experienced the situation in these big, heavily populated areas where we've lost gas service. People, I think, tend to think just like losing your power, and it just flickers off and comes back on. That's not the way gas service works, and it will be, you know, a So, thank you for asking the question, because we certainly try to make it clear that we've got to invest adequately in our infrastructure, and it is going to take permitting reform to do that.

Alan S. Armstrong: We've been able to manage we've been able to keep the gas service on.

Alan S. Armstrong: But we really haven't experienced the situation in these big heavily populated areas, where we've lost gas service because people I think tend to think that just like losing your power and it just flickers often comes back on Thats not the way gas service works and it'll be a pretty catastrophic event. So thank you for asking the question.

Alan S. Armstrong: We certainly try to make it clear that we've got to invest adequately in our infrastructure and it is going to take permitting reform to do that I would say, we're we're hopeful that we're getting more and more of the moderate left engaged on this issue and understanding how important this is for.

Alan S. Armstrong: I would say we're hopeful that we're getting more and more of the moderate left engaged on this issue and understanding how important this is for their constituents as well. So, I do think we're making progress on it, but it is a very large issue. If we hope to keep up with demand, we're going to have to get better at building out infrastructure here in the U.S.

Alan S. Armstrong: Their constituents as well so I do think we're making progress on it but it is a it is a very large issue we hope to keep up with demand we're going to have to get better at building out infrastructure here in the U S.

Tristan James Richardson: Appreciate it, Alan. Thanks, as always. And then maybe, John, just a smaller one, appreciate kind of laying out sort of some of the puts and takes in the TGOM segment year over year, but is there a number we can think of as what was the organic growth in the quarter? Just thinking about heart tree contributions as well as sort of a partial anniversary of Mount West.

Speaker Change: Appreciate Allen Thanks, as always and then maybe John just a smaller one.

Tristan James Richardson: I appreciate kind of laying out sort of some of the puts and takes in that.

Tristan James Richardson: <unk> segment year over year, but.

Speaker Change: Is there a number we can think of is what was the <unk>.

John: Organic growth in the quarter, just thinking about heartbeat contributions as well as sort of a partial anniversary of mountain west.

John D. Porter: Yeah, I think we think the acquisitions as it relates to Hartree and Mountain West Pipeline have tracked very well to the announcements we made in terms of the valuation and the multiples that were involved there. So, I think you can rely pretty much in terms of sizing those impacts as to the announcements we made at the time of the acquisitions, obviously, with Mountain West Pipeline that closed on Valentine's Day in 2023.

John: Yes, I think I think we think the acquisitions as it relates to Hartree and mountain West pipeline have tracked very well to the announcements we made in terms of the valuation and the multiples that were involved there. So I think you can you can rely pretty much in terms of sizing those impacts as to the announcements we made at the time of the acquisitions obviously.

John D. Porter: With mountain West pipeline that closed on Valentine's day in 2023, so that kind of allows you to size the relative size of the uplift in 24 versus 23 for mountain was pipeline with hartree. It closed very early in the year. So we pretty much had a full quarter of hartree. So I think that I would just say.

John D. Porter: So, that kind of allows you to size the relative size of the uplift in 24 versus 23 for Mountain West Pipeline. With Hartree, it closed very early in the year. So, we pretty much had a full quarter of Hartree. So, I think that, you know, I would just say size those 2 pieces.

John D. Porter: It was a strong quarter for Transco, no doubt. They did have the nice uplift from partial and service of regional energy access, but they had some good seasonal revenues as well. And we did mention a couple of things that worked the other way, though, like the bioethane divestiture that we had last year, and I think we put some information out about that, the size of that divestiture as well. And then we did have some planned downtime at Discovery, which had an impact as well.

John D. Porter: Size those two pieces it was a strong quarter.

John D. Porter: For Transco.

John D. Porter: No doubt.

John D. Porter: Have a nice uplift from partial in service of regional energy access, but they had some good seasonal revenues.

John D. Porter: As well, we did mentioned a couple of things that worked the other way.

John D. Porter: The Bayou ethane divestiture that we had last year and I think we put some information out about the size of that divestiture as well and then we did have some planned downtime at discovery, which was an impact as well.

Tristan James Richardson: I appreciate it. Thanks, John. I appreciate it, guys.

Speaker Change: I appreciate it thanks, John I appreciate it guys.

Operator: Thank you. One moment for our next question. Our next question comes from John Mackay with Goldman Sachs. Please go ahead. Hey, good morning.

Speaker Change: Thank you one moment for our next question.

Operator: Our next question comes from John Mackay with Goldman Sachs. Please go ahead.

John Ross Mackay: Maybe to keep it in the, you know, gas demand policy front, you guys have also talked a lot about coal plant retirements in your footprint. You kind of framed up a, maybe an upside number at Analyst's Day earlier this year. Just be curious, any thoughts you can share on the recent EPA updates around power plant carbon emissions and how that's playing into your forward view.

John Ross Mackay: Hey, good morning. Thanks for the time.

John Ross Mackay: Hey, good morning, Thanks for the time, maybe to keep it in that.

Speaker Change: Gas demand policy front.

John Ross Mackay: You guys have also talked a lot about coal plant retirements on your footprint and you kind of framed up.

John Ross Mackay: Maybe an upside number at the analyst day earlier this year just be curious any thoughts you can share on the recent.

John Ross Mackay: EPA updates around Powerplant carbon emissions and how that's playing into your forward view.

Micheal G. Dunn: Hey, John, this is Michael. Yeah, you know, obviously, we're watching that closely. And the fact that the new gas fired power plants have to have some kind of sequestration on them in the

John Ross Mackay: Hey, John This is Michael yes.

Michael: We're watching that closely and the fact that these new gas fired power plants have to have some kind of sequestration on them in the in the <unk>.

Micheal G. Dunn: In the mid-term, I would say that this is certainly taken into consideration by the utilities that are building these plants. You know, I think, ultimately, we'll probably see some tempering of that.

Micheal G. Dunn: Mid term I would say is certainly taken into consideration by the utilities that are building these plants.

Micheal G. Dunn: That's my opinion, that whenever you see the EPA power plan come out with a new rule, it's certainly subject to litigation, as they have been several times now, and I suspect this one will be no different. But that will be a challenge, I think, for the industry to respond to a lot of that sequestration requirement in regard to these combined cycle power plants. I mean, it's technology that is available, but it is going to be expensive. It's going to be expensive for the end user and the consumers.

Micheal G. Dunn: I think ultimately we will probably see some tempering of that Thats my opinion.

Micheal G. Dunn: Whenever you see the EPA are planned to come out with a new rule certainly subject to litigation as they have been several times now and I suspect that there will be no different but that will be that will be a challenge I think for the industry to respond to a lot of that sequestration requirement.

Micheal G. Dunn: In regard to these combined cycle power plants. It I mean, it's technology that is available.

Micheal G. Dunn: But it is going to be expensive, it's going to be expensive for the end user and the consumers.

Micheal G. Dunn: And I certainly think the utilities will take that into consideration in their plans. But we'll definitely see some coal plant retirements, and they're accelerating. And, you know, I think the rub there is, will they be able to meet demand with the acceleration of coal plant retirements with the AI boom that we're seeing? And I think that's going to be a big issue in the boardrooms for the utilities for years to come.

Micheal G. Dunn: Certainly thank the utilities will take that into consideration in their plans, but we will definitely see coal plant retirements accelerating.

Micheal G. Dunn: Accelerating.

Micheal G. Dunn: And.

Micheal G. Dunn: Thank the rough areas.

Micheal G. Dunn: Will they be able to meet demand with the acceleration of coal plant retirements with the AI boom that we're seeing.

Micheal G. Dunn: And I think thats going to be a big debate in the boardroom with the utilities to come.

Micheal G. Dunn: Yeah, and I would just add to that the issue around sequestration. If you think about how difficult it's been to build sequestration pipelines in South Dakota and Iowa, serving those markets. And if you think that we're going to be able to take sequestration to a new level in areas where there aren't good underground resources for sequestration along the East Coast and pipe that in through heavily populated areas, I just think that is a very unrealistic perspective right now.

Micheal G. Dunn: Yes.

Speaker Change: I'd just add to that.

Micheal G. Dunn: Issue around sequestration and if you think about how difficult it's been to build sequestration pipelines in South Dakota and Iowa.

Micheal G. Dunn: And serving those markets and if you think that we're going to be able to take sequestration to a new level in areas, where there isn't good underground resources for sequestration, along the east coast and pipe that through heavily populated areas.

Micheal G. Dunn: And so I think this is a place again where politics and the popular notion of politics and good old-fashioned hard physics are not matching up. And to have the Sierra Club fighting a CO2 pipeline in Iowa that's going to sequester carbon is really, I think, a warning about the practical nature of being able to sequester large volumes of CO2 from these heavily populated areas.

Micheal G. Dunn: I just think that is.

Micheal G. Dunn: Very unrealistic.

Micheal G. Dunn: Perspective, right now and so.

Micheal G. Dunn: I think this is a place again, where politics in the popular notion of politics and good old fashion hard physics are not matching up.

Micheal G. Dunn: And to have the Sierra club fighting the Cotwo pipeline in Iowa, Thats going to sequester carbon.

Micheal G. Dunn: It is really I think for warning about the practical nature of being able to sequester.

Micheal G. Dunn: Large volumes of Cotwo in these heavily populated areas.

John Ross Mackay: I appreciate all that. Thanks.

Micheal G. Dunn: I appreciate it all that thanks, maybe just.

John Ross Mackay: Zooming back on you guys specifically quickly appreciate the frame up the gas storage opportunity at the very beginning you mentioned the rates have come into making brownfield economics work I guess I'd just be curious like how much do you think you guys can add on a DCF basis across your existing footprint from a.

John Ross Mackay: Brownfield perspective thanks.

John Ross Mackay: Well I mean, the fact is we have the right away through those areas and so.

John Ross Mackay: There's a very large number but it's not as simple as not a finite number by any stretch the imagination and it has its economic limits.

John Ross Mackay: So said another way it may not have its physical limits, because we have the right away through there, but it certainly has its economic limits and so obviously the easiest thing to do is to add compression and.

John Ross Mackay: In the area.

John Ross Mackay: And then next is replacing lines that are that we've had to derate over time.

John Ross Mackay: Maybe just zooming back in on you guys specifically, quickly, appreciate the framing of the gas storage opportunity. At the very beginning, you mentioned the, you know, rates have come into making brownfield economics work. I guess I'd just be curious, like, how much do you think you guys can add on a BCF basis across your existing footprint from a

Alan S. Armstrong: Well, I mean, the fact is, we have the right of way through those areas. And so, you know, there's a very large number, but it's not as simple as it is not a finite number by any stretch of the imagination. And it has its economic limits. And so, said another way, it may not have its physical limits because we have the right of way through there. But it certainly has its economic benefits. Obviously, the easiest thing to do is to add compression in the area. And then, you know, next is replacing lines that are, that we've had to de-rate over time. I think he's talking about storage. Oh, sorry.

John Ross Mackay: I think you said that storage Oh, sorry on storage between sorry, I thought back on Transco, sorry about that.

Chad J. Zamarin: Sorry about that. I'll let, I'll let Chad take it. Yeah, sorry.

Chad J. Zamarin: I'll, let I'll, let Chad take afterwards, yes, sorry.

Chad: Just on storage and we do have quite a bit of capacity at the salt cavern facilities that we acquired to the Gulf Coast and so.

Chad: And those expansions that we're looking at would likely come in kind of 10 Bcf tranches at each facility and Theres a lot of capacity to expand I think we're going to be thoughtful about how to do that incrementally as the market kind of recognizes the need.

Chad: And we're seeing that evolution, but we need to see storage contracts shift from short term to long term for us to support that kind of infrastructure expansion, but few would look like kind of 10 Bcf.

Chad: Catherine expansions at <unk>.

Chad J. Zamarin: Salt Cameron facilities.

John Ross Mackay: All right. I appreciate that. Thanks very much. Thank you.

Chad: Alright, I appreciate that thanks very much.

Operator: Thank you. One moment for our next question. Our next question comes from Sunil Sibal with Seaport Global. Please go ahead.

Speaker Change: Thank you one moment for our next question.

Operator: Our next question comes from Sunil Sibal with Seaport Global Please go ahead.

Sunil K. Sibal: Hi, good morning, everybody, and thanks for squeezing me in. So I wanted to start off with a little bit of a big picture question. So it seems like, you know, you're executing pretty well on the guidance for the 24 and 25. So I was curious, you know, if The actual performance comes out to be above the top end of your guidance range is what's best. Incremental Use of the Cash Flows, in the current environment, especially if these permitting constraints continue.

Sunil K. Sibal: Hi, good morning, everybody and thanks for squeezing me in so I wanted to start off with a little bit.

Sunil K. Sibal: So it seems like youre executing pretty well on the guidance.

Sunil K. Sibal: <unk> 2425, so I was curious.

Sunil K. Sibal: Yeah excellent performance comes out to be above the top end of guidance range is what's the best.

Sunil K. Sibal: Incremental use of the cash flows.

Sunil K. Sibal: The current environment, especially at this permitting constraints continue.

Alan S. Armstrong: Yeah, well, that is a great question. And one that gets a lot of debate both, you know, in this team and within the boardroom as well. And it's a very astute question because if you look at the math that you know starts to build on us pretty quickly. We saw the the the movie.

Speaker Change: Yes, well that is a great question and one that gets a lot of debate, both mis team and within the boardroom as well and it's.

Alan S. Armstrong: A very astute question because if you look at the math that starts to build on us pretty quickly we saw the.

Alan S. Armstrong: Outlook, a positive outlook change coming from S&P on our credit rating so that, you know, we think we'll meet the conditions for that here through the balance of the year.

Alan S. Armstrong: <unk>.

Alan S. Armstrong: Outlook positive outlook change coming from S&P on our credit rating.

Alan S. Armstrong: That we think will meet the conditions.

Alan S. Armstrong: For that here through the balance of the year. So.

Alan S. Armstrong: Only so much more value, I would argue, should be added in that regard. But I would say, you know, certainly, our dividend policy is one lever, share buybacks another, and acquisitions of bolt-on transactions that have continued to add a lot of value and ones that we're really excited about the way our teams have performed on taking these assets in and extremely quickly extracting the synergies that we expect out of them. And so we have been very purposeful about building the capabilities within the organization to be able to act quickly and decisively on these kinds of bolt-on transactions.

Alan S. Armstrong: When we have so much more value I would argue to be added.

Alan S. Armstrong: In that regard.

Alan S. Armstrong: But I would say certainly our dividend policy as is one lever share buybacks, another and acquisitions of bolt on transactions that have continued to add a lot of value and ones that we're really excited about the way our teams have performed on.

Alan S. Armstrong: Taking these assets and extremely quickly extracting the synergies that we expect out of them and so we have been very purposeful about building the capabilities within the organization to be able to.

Alan S. Armstrong: To act quickly and decisively on.

Alan S. Armstrong: Those kind of bolt on transactions and so we will keep our eyes on that certainly we've seen so far we've seen a lot of value that we can add by being the operator on those kind of assets to make them immediately accretive transactions and so we will certainly keep our eyes open for those kind of bolt on very tightly aligned.

Alan S. Armstrong: And so we'll keep our eyes on that. Certainly, we've seen so far, a lot of value that we can add by being the operator on those kind of assets that make them immediately accretive transactions. And so we'll certainly keep our eyes open for those kind of bolt-ons very tightly aligned with strategy.

Alan S. Armstrong: The strategy acquisitions as well.

Sunil K. Sibal: Thanks for that. And then in the Northeast, it seems like, you know, MVP is going to start up pretty soon. And I was kind of curious in the current gas price environment, how do you think you know that impact? The producer reactions and then what kind of operating leverage you have in your systems to kind of benefit from that in the near term.

Speaker Change: Thanks for that.

Sunil K. Sibal: And then.

Sunil K. Sibal: In the northeast seems like Mbps.

Sunil K. Sibal: Chart up pretty soon.

Sunil K. Sibal: I was kind of acuity in the current gas price environment.

Sunil K. Sibal: Or do you think that impacts the.

Sunil K. Sibal: The produce of the actions and then what kind of operating leverage.

Sunil K. Sibal: Neil systems to kind of.

Sunil K. Sibal: Benefits from that in the near term.

Alan S. Armstrong: Yeah, good. A great question.

Speaker Change: Yes, Great question I think right now as we sit here today the power Gen loads will be pretty pretty strong this summer.

Alan S. Armstrong: The weather predictions that are out there are accurate right now I think we'll see some pretty strong pools and.

Alan S. Armstrong: You know, I think right now, as we sit here today, the power gen loads will be pretty, pretty strong this summer. If the weather predictions that are out there are accurate right now, I think we'll see some pretty strong pulls, and that pipe and those gas supplies that serve that will be, you know, capable of responding to that. And that's probably the extent of what we would see here in the immediate term for that.

Alan S. Armstrong: That pipe and those gas supplies to serve that will be.

Alan S. Armstrong: Capable of responding to that and Thats, probably the extent of what we would see here in the immediate term for that as our expansions.

Alan S. Armstrong: As our expansions that we're working on, like the Southeast Supply and Expansion System, come on in the years ahead, they'll start to take full advantage of those incremental supplies. And we'll see areas where we gather volumes upstream on that benefit from that. But importantly, you know, our ability to expand Transco is a lot lower cost and a lot higher margin for us if we have supplies coming in there at 165.

Alan S. Armstrong: That we're working on like the southeast supply expansion.

Alan S. Armstrong: System come on.

Alan S. Armstrong: In the years ahead that will start to take full advantage of those incremental supplies and we will see areas, where we gather the volumes upstream on that benefit from that but importantly.

Alan S. Armstrong: <unk>.

Alan S. Armstrong: The our ability to expand trans goes a lot lower cost and a lot higher margin for us if we have supply coming in there at $1 65, and so that's a huge positive for us to have.

Alan S. Armstrong: And so, you know, that's a huge positive for us to have high-pressure supplies coming into our system right there at 165. And so we'll see, I'm fairly confident we'll see some fairly significant additional expansions from 165 and take advantage of that.

Alan S. Armstrong: High pressure supplies coming into our system right there at $1 65.

Alan S. Armstrong: And so we'll see.

Alan S. Armstrong: Fairly confident we will see some fairly significant additional expansions.

Alan S. Armstrong: From $1 65, and take advantage of that on the Transco system.

Speaker Change: Thanks Helane.

Operator: Thank you. This concludes the question and answer session. I would now like to turn it back to Alan Armstrong for closing remarks.

Alan S. Armstrong: Thank you. Thank you. This concludes the question and answer session I would now like to turn it back to Alan Armstrong for closing remarks.

Alan S. Armstrong: Okay, well, thank you all very much. You know, we're very excited to deliver another record at the company, and not just for the quarter that it produced in terms of the present; a lot of people are talking about what they're going to do in the future. We continue to deliver in the present, but we also have a very strong future ahead of us and are extremely well positioned for not just the next couple of years but for the next decades as we are contracting for these major expansions on our system.

Alan S. Armstrong: Okay, well, thank you all very much.

Alan S. Armstrong: Very excited to deliver another.

Alan S. Armstrong: Record at the company and.

Alan S. Armstrong: Not not just for the quarter that it produced in terms of the present a lot of people are talking about what theyre going to do in the future we continue to deliver and the president.

Alan S. Armstrong: But we also have a very strong future ahead of us and are extremely well positioned for not just the next couple of years, but for the next decades.

Alan S. Armstrong: We are contracting for these major expansions on our system. So very excited to see a strategy that we've stuck with for years now really coming home and all the benefits that we thought natural gas had to offer the market start to be realized by others and putting a lot of demand on our infrastructure. So.

Alan S. Armstrong: So, very excited to see a strategy that we've stuck with for years now really coming home, and all the benefits that we thought natural gas had to offer the market start to be realized by others and putting a lot of demand on our infrastructure. So, very excited to see this turn here in the quarter and very thankful for all the extraordinary efforts of the employees and the leadership of this company and the management team that I get to work with for continuing to deliver such great results. So, thanks for joining us today.

Operator: Thank you for your participation in today's conference. This concludes the program. You may now disconnect.

Operator: Very excited to see this turn here.

Operator: Here in the quarter and vary.

Operator: Thankful for all of the extraordinary efforts of the employees and the leadership of this company and the management team that I get to work with for continuing to deliver such great results. So thanks for joining us today.

Operator: Thank you for your participation in today's conference. This concludes the program you may now disconnect.

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