The Williams Companies, Inc. Q1 FY2025 earnings call

• Leadership Changes: Welcomed new Chief Operating Officer Larry Larson; announced Alan Armstrong will serve as Executive Chairman and Chad Zamarin as President and CEO effective July 1.
• Growth Drivers: Benefiting from data center power load; projects like Socrates (Williams to invest ~$1.6B for data center demand in Ohio, fully contracted with 10-year PPA), Transco's Power Express Pipeline (950 MMCFD expansion), and a 10% interest in Cogentrix Energy.
• Operational Execution: Successfully placed projects like Southeast Energy Connector and Texas to Louisiana Energy Pathway; deepwater expansions including Chevron's Valley Moor startup and commissioning of Shenandoah and Salamanca floaters.
• Financial Highlights: Raised adjusted EBITDA guidance midpoint by $50M to $7.7B; increased quarterly dividend 5.3% to $0.50/share; 37 consecutive quarters of meeting or beating consensus.

The Williams Companies' first quarter 2025 performance was driven by various segments. The Transmission & Gulf segment hit a new record EBITDA, primarily due to record contract gas transmission capacity and fee-based revenue in deepwater and storage. The Northeast G&P business improved by 10 million, or 2%, mainly from higher revenues despite the Aux Sable divestiture. The West segment saw an 8% increase (26 million) driven by strong margins, Overland Pass Pipeline volumes, and the Rimrock acquisition. The Sequin Marketing business had 155 million of adjusted EBITDA, marking the third straight year of first quarter results exceeding $150 million but was down vs 2024. The upstream business in the other segment was up about $37 million, with roughly half related to the consolidation of the Wamsutter upstream position.

• Raised adjusted EBITDA guidance midpoint for 2025 to $7.7B, with the top of the range at $7.9B, expecting 9% growth.
• Anticipate continued growth in segments such as Transmission & Gulf, deepwater, gathering/processing, and sequent marketing, with expectations of surpassing records in the second quarter.

• Permitting Delays: Concerns about permitting processes being exposed to litigation and obstructive environmentalists.
• Commodity Price Swings: Uncertainty in gas market responses due to crude oil downturns affecting gas supply dynamics.

Q: Alan, you mentioned ordered equipment for two more behind the meter power projects. Similar to Socrates?

A: Chad Zamarin said these projects are expected to reach full commercialization throughout the remainder of the year and have returns similar to Socrates, generally similar in scope and scale but maybe a bit smaller as they get more efficient.

Q: Strategic rationale for Cogentrix investment?

A: Alan Armstrong said it's to be front and center on the gas supply side in the Northeast power market, recognizing changes in gas supply to that business, and working closely with Quantum Energy Group to expand the relationship.

Q: Jeremy Tonet asked about Williams' competitive advantage in behind the meter projects.

A: Chad Zamarin credited the Williams team's collaboration, ability to put together solutions for customers by bringing different capabilities, and strong relationships with suppliers like Solar.