The Williams Companies, Inc. Q2 FY2025 earnings call

• Welcomed Rob Wingo to the team, who joined on July 14.
• Teams delivered strong performance with 6 major projects in service, including Transco's Southeast Energy Connector and Texas to Louisiana Energy Pathway.
• Accelerated Transco's Southeast Supply Enhancement project, began construction on Socrate's power innovation project, and finalized commercial agreements for Transco's Northeast Supply Enhancement.
• Increased 2025 adjusted EBITDA guidance midpoint by $50 million to $7.75 billion.
• Published 2024 sustainability report, leading the industry in environmental stewardship, social responsibility, and governance.

The transmission and Gulf segment saw adjusted EBITDA increase $91 million or 11%, setting an all-time record due to higher revenues from expansion projects, storage growth, Discovery acquisition, and new service to Shell's Whale project. The Northeast G&P business improved $22 million or 5% primarily on higher revenues but was unfavorably impacted by the Aux Sable divestiture. The West was $22 million or 7% higher driven by higher Haynesville volumes and Rimrock acquisition, but negatively impacted by a step down in Eagle Ford minimum volume commitments. The Sequent marketing business was flat. The other segment (upstream) was up about $7 million, including higher upstream volumes but offset by lower oil prices.

• Williams is increasing 2025 adjusted EBITDA guidance midpoint by $50 million to $7.75 billion, with the top of the range at $7.9 billion.
• Reflects solid start to 2025, Saber acquisition contribution, and confidence in underlying business growth.
• Transmission and Gulf segment expects contributions from recent projects and recontracting of storage business. Deepwater volume ramp to accelerate through remainder of year. Gathering and Processing businesses see strengthening volumes. Upstream business on plan.

• Tariffs on steel could impact project costs, with steel costs potentially making up 5%-15% of total project costs, but managed within contingencies.
• Permitting challenges, as addressing permitting reform is crucial for lowering costs and making infrastructure build-out more efficient.

Q: So you've increased EBITDA at a 9% CAGR over the last 5 years. I guess when I look at the opportunity set for the next 5 years, it looks dramatically better with CapEx opportunities rising power demand rising and ROIC improving. So I guess that you're going up against the law of large numbers, but do you think there's some upward bias here to the 5% to 7% EBITDA CAGR guidance that's out there. I mean from our math, you could significantly surpass that? Or are there some headwinds that we should be thinking about as we look out through 2030?

A: Yes. No, I don't think there are headwinds for Praneeth. I think you actually said it well. We've shown, I think, pretty remarkable growth over the last 5 years. And the company is even healthier now. The balance sheet is stronger, and I'd say the tailwinds are even better. And so we're going to remain disciplined. And stay tuned, we'll be, I think, laying out a bit more color on the longer-range opportunity set in our Analyst Day in early 2026. But I think you captured it well. We want to continue to invest in a disciplined manner, high-return projects, and do that in a way that generates predictable growth. But I'd say more to come as we roll out the next 5-plus years of projects.

Q: Just wanted to kind of pick up with the opportunity set as you outlined previously. Just if we think about the back half of '25, do you see FIDs on the pipeline side more likely stemming from another Transco type of expansion? Or do you see the possibility for an FID on something stemming from the Northwest system? It seems like there's a lot of irons in the fire, as you laid out in the slides there.

A: Yes. I can start and then Larry can also weigh in here. Obviously, we've crystallize, I think, the scoping of Power Express on Transco. The announcement on NESE yesterday is a significant milestone. And I think it's reflective of markets that have been constrained reopening and recognizing the need for natural gas as we've seen utility bills go up. We see reliability go down. And so we are seeing still across the entire footprint, including as you mentioned, in the Pacific Northwest area that's been a bit quiet over the last few years from a gas pipeline expansion perspective. And so whether or not we see FIDs here in the second half of the year, kind of wait to see the pace at which the next round of projects roll out. But as I mentioned in my remarks, we continue to be as active as ever, and we really do see project opportunities in the Gulf Coast, in the Southeast, Mid-Atlantic, the Northeast and in the West and Pacific Northwest. But Larry can also maybe give an update on the West opportunities.