WMB - Earnings call transcript Q1 2018 | The Williams Companies, Inc.

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Operator

Good day, everyone, and welcome to the Williams, Williams Partners' First Quarter 2018 Earnings Conference Call. Today's conference is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Mr. John Porter, Head of Investor Relations. Please go ahead.

John D. Porter

Christina. Thanks, thank interest and Williams Williams for Partners. you morning, in your and Good released and financial items afternoon our Yesterday we results website. on posted our important several These Armstrong, will materials to you related that releases President speak items slide our Alan the deck investor CEO, and momentarily. include press including and

and Dunn; disclaimer related presentation our to us will materials, integral Joining Michael find is is to John CFO, an Chief our our today disclaimer forward-looking you This statements. Chandler. important Officer, important of Operating and In all presentation our you of accepted back schedules should reconciled measures in remarks reconciliation review and the generally it. materials that today's included presentation Also accounting to non-GAAP these at our principles materials. and are various appear we've

I'll it Armstrong. turn Alan that, to over so, And with

Alan S. Armstrong

growth the plan more going John, the right looking this We're of that was a upcoming we Analyst and level, really course Great. and keep of things brief due to I going in-depth highlighting forward much we're to everyone. welcome, provide at to high would to today you, remain a and review Day, anticipate our here toward of into a continue say quarter on and significant I pretty met look to plan. lot the we remarks second We business. on half Thank on. the expectations XXXX. as year are where

new the while we're on term. again long to of our in shareholder ROCE continue No as deliver This showing demand about updating opportunities than to Once And our and years the Our strategy accelerating contract most going solid in come. growing supplies growth each identify, adjusted produce in of EBITDA natural to many long average at of advantaged to for focus of and Analyst returns. we have to now focusing of is positions our capture quarter us improvement positioned and significant a investors develop, forward gas, for this posted, another broad-based and higher well fastest gas May low industry value EBITDA on string will demand and allow future U.S. natural foundation us intense is about in the connecting we improvement excited Day year-over-year allowed has to one and what Williams centers for growth predictable cost focus strategy our to a drive plans at growth. look XX. achievements organization as for on the leverage event business our to the adjusted to segments,

So, for here. today's call, relatively things going just we're hit few brief to a

delivering first First, we're the saw business that a to finally, we quarter that our hit review now, in in then a our of the the key the to And of across drill quarter. highlights a Day for I'll continue a into our business execution quarter of all slide segments. first bit let's for segments. I'll into and few dive terms performance that our strong results will I'll of down the provide XXXX. recap Analyst But move and deeper X for event. outline topics little

largest XXXX. posted of XXXX million was decrease net by first higher from we executed the income income absence in driver sale a first XXXX results, Geismar the booked execution say on reflecting during an GAAP the and was olefins quarter absence project quarter in Partners' of commodity was in our XXXX. of was successful with that – The that delivered all, continued to margins bulk million the see of the million, pleased quarter The performance sorry of $XX you can asset million XXXX. first commodity of number, looking our the change XXXX gain and of and in operational $XXX the portion the was margins. – million now so teams increase I'm margins our First the sold gain the July from And of about of asset that we program that driven $XXX $XXX in of and that $XXX that in the Williams facility, I'll largest a XXXX net a sale $XX million of was which in on

And $X first placed million in to $XX business million in of segments on EBITDA joint in ventures and from service in our billion, and this quarter expansion being I'll in of XXXX higher $XX of showed This driven period all and increased fee-based revenues into offset that was million million a business X% non-GAAP little our a Moving segments by from $XX of current the XXXX, over or for in partially by in $X.XX was an projects segment. the three measures, same the up the decrease was Transco another partnership's EBITDA. Northeast XXXX, Gathering on was year-over-year proportional adjusted minute. million current adjusted increase revenues over EBITDA $XX improvement more that the hit a

me let the drivers for areas. into drill each these down So, of

fee compared service many all later of the we decreased we higher depletion where offset quarter, of Discovery, up wells of into of year. XX% we expansions worth quarter did part Atlantic-Gulf, large And for segment. in impact fully in as sequential the the see $XX completion in half call. a million larger quarter that year to the Atlantic Sunrise to off incremental segment. anticipate from Atlantic-Gulf The Prolific expenses that be we'll projected for XXXX, the in by Exxon's but revenue quarter quarter's of Hadrian Transco XXXX. saw drove $XXX earnings last million contributor to XX% And about the of came The during per the about the – increase contracted as revenues the of about XQ placed see to actually this a third will wells, from in that on JV expenses we down significant Transco First taper taper through adjusted growth $XX Atlantic-Gulf million due was depleted The in off last EBITDA. continue down and in EBITDA those were

X the million, that despite moving The increased franchises lower Now West, XXXX. $XX supply of in in some the impact quarter was the the to versus and to revenue area one stable record fact, And in results recognizing EBITDA large of reducing a first period recognition its X% as from range by XXXX we broad strong in basins; were showed produce continues gathered the was XX in rates Northwest West EBITDA continued of overcame West the it asset a from on a are about higher Barnett, adjusted customers Pipeline. year. and first which same comparison, with another West of this that gathering from volumes from XXXX, the expenses decrease from of associated lower sold annual of showed and the loss and quarter decline last new expenses

Turner are the we on growth – Basin that's these Wamsutter for forward, NGL plays areas plant while and volumes Basin, area producers additional formation inlet Wyoming, basis, starting of and X% and the are the were the basis drive and volume the on up oil year-over-year volumes to balance to for higher increased producer and in an X% processing all in respond the a River inlet Looking prices, West, gas seeing gathering activity like in Washakie should liquids is Ford, now Eagle the driven Powder the year. emerging gas

being X% $XX improvement to the improvement showed our business of Northeast million and production or the gathering year-over-year increase increased actually the increased largest at first This was Northeast Gathering up in primarily by Pittsburgh. saw and Midstream both Now adjusted processing by complex won team new by our EBITDA. of was XX% gas Ohio drilling West The driven where driven Valley quarter NGL volumes over XX% segment, gas Virginia, new the we in XX% and by XXXX. in volumes inlet turning (XX:XX:XX) processing was contracts

a fourth the led during County Bradford requests worked to million in expenses quarter quarter flat of ownership other to system expansions basis proportional for We're benefited Results was volume and the year. XXXX. the the from and EBITDA seeing ventures, key serving last JVs also that shape. first by increases, year XXXX keep in the first of a increase we an as up in to actually the hard Sunrise the these managing team operating current cost the Northeast take While for in increased joint our from reduced on Atlantic quarter this of and year-over-year $XX ramp infrastructure begin takeaway significant

volumes significant XXXX. the We of fourth by EBITDA quarter segment from expect the growth in and

really are seeing lot on. we going of So, activity a

now expansions our to and increase X% DCF, looking first XXXX, to annually to responding flow requests are a while quarter systems teams Our cash very us right the guidance coverage And from on X% increase for our staying meet to X% of now. distributable ratio. maintaining allowing continued producers strong versus by of distribution busy at

again basis much level. coverage economic the then on is at was the partnership this of Our course, an X.XX level, and quarter WMB at higher

turning growth at as records projects year, managed recapped some business. Day event, slide as delivery set we've to already our – detail system. Analyst in of Transco May we new looking Now X. the our long-term recent our but We in I've build discuss earlier, And we'll predictable said to XX continue on our achievements here greater this to

Transco the on Gulf our service both and Supply Connector, And – LNG we Hub million LNG Gulf State gathering Susquehanna Freeport Gathering in Corpus Louisiana delivery goes that's the the large a into construction started Coast System namely Texas Wamsutter service Christi. from an XXX Phase have also expansion, and into of into X that the expansion and We placed expansion Wyoming. day our of so facilities, Garden additional placed in expansions some

volume segment. Northeast we expansion into continue of as that This in in month, franchises, the just to increase of by continue see our volumes many as records X projects that in of growth the West service Susquehanna last new that volumes the we to was area and Supply we Finally, planned. increased XX established driven areas on Hub. placed

producer application growing We projects by for driven unique Southeastern in demand-driven demand not that'll and is another our the push. the markets. system again, on is also contracting these filed which were markets, projects serve a And by fully-contracted being for that Trail project one Mid-Atlantic expansion that Southeastern our and FERC of

Bcf segments X.X the a by planning along completed. of Atlantic greenfield has continue on pipeline the that certain you stringing tell been and large the for is and construction team. begun pipeline wet and we pipe project for tie-ins of of welding we a dedicated commenced testing the line. XX% project, have Hydrostatic our to the the the very has making now Sunrise to of portion I project an On thanks day hardworking extended some winter, placing target very will and mid-XXXX into employees and number Despite terrific extremely service, some and

overcome team have very So, there, to making but on conditions really progress difficult has the that putting that great is project and in been up service. continued

the half of our second reinforce operational of confidence stronger increasing growth highlighted even this for year, us performance see and items up the an All good I've sets XXXX. that in here we'll which

moving with the visiting to Now you the beginning mentioned on Analyst forward our of at I call, slide York. X, XX event in at to many on as New May of Day I look

systems. certainly supplies that our robust uniquely enable to will we low our strategy positions beginning gas and gas highlight We are cost demand natural for connect now leading our realize how natural the to on to us

of that the development and the not will also in the us term. in much look in projects areas short predictable or transparency great very but under execution long spanning towards give We – just list extensive over currently these our our term, at are growth attractive operating

that the and elements XXXX regulated now to So, and the significant together excited great us. pipeline provide is coming action we're finally fill drivers ramp which for MLPs, see FERC look are we'll growth, our forward pipelines before many is highlight by to We'll and really up to recent also on we way our key transparency highlighting the of held in growth that. to the continuing address

Partners and pleased our business in very year-over-year our delivered. solid project the of operational I'm with that Williams again, growth and teams results quarter the reflects the So, execution Williams performance of and very segments continuing

operator, first please. let's the take question, So,

Operator

first Thank Tonet take you. Jeremy We'll our from JPMorgan. with question

Jeremy Bryan Tonet

Good morning.

Alan S. Armstrong

Jeremy. Morning,

Jeremy Bryan Tonet

in be could base for this, additional Day and might share see any want to wait but you if Appreciate the if Analyst the some recent that touch so, that and I FERC there's regards quantify the you the to collapsing wanted you on decision, just sense? on impact would the anything able structure mitigate there, could if with and that of to

Alan S. Armstrong

Yeah. that I would various said structures. confident just manage say in Jeremy, ability through just we're previously, very our like we've to

expect don't to And impact so, we our any guidance.

than very to manage to confident on structures you new various in we other that nothing the us available we offer really to So, have that are that.

Jeremy Bryan Tonet

be for Got but And you a into in XXXX. XQ you the might drivers of touched that. anything down was stepped as you. was able bit Pipe, some bit West Northwest more think on else to I you share there? a with on the your as Thanks can rate XXXX the if far but wondering decompose I there Appreciate kind there. XQ of comments, case

Alan S. Armstrong

(XX:XX:XX).

Michael G. Dunn

revenue biggest Yeah, was customers had I that settlement with rate probably would take a that West impact in case, our down. Northwest the where the say that did and the Pipeline we

quarter in area, we surprisingly weather impacts volumes, say bad gathering such we first we XXXX very but bit, although impacts our that's didn't weather volumes I'd winter. keep in to QX when areas, West impact have probably sequentially QX just in the mind Wyoming did down, our were in on And say strong our biggest we were but So, results we in little really there. of performance that's off in very strong primarily last the we And too XXXX. have the naturally this Eagle year. the I a coming to would And our in in QX wasn't hurt strong compared quarter just and end winter of some tough Ford at the had that gathering comparison Haynesville some any fourth on QX, cold Haynesville, that traditional and a it in had

John D. Chandler

last revenue things a prepayments. previously that And to Jeremy, our too call standards, of about other the the we've we're on in particularly our West point one and earnings recognition is we where time. talked – settled And this of longer revenue thing I'd the Chandler, the John add other period talked new standards, West, we amortization new that and under where received last we recognition in number MVCs that's a extending had the over on

book down. to first really step to of So, It a $XX quarter there pure between just quarter, between $XX down the those a fourth probably step wasn't million the million period. was the tune and cash

non-cash So, there was a items. recognition big to step down related revenue

Jeremy Bryan Tonet

really bit in balance gathering volumes producer as Any That's And provide over you Great. more color, Thanks. activity could, one more I color guess, can systems? Northeast, as just last one the as if year? of you far you helpful. up behind a that the then, see share where I the there your could as shaping far

Michael G. Dunn

full. in Fort XXX Beeler's Grove. we're that's we're this And Michael capabilities is processing system of there Chevron the of between activity River and a Yeah. bringing This of Ohio I'll processing to that, Ohio from Oak the tell facilities would lot Fort seeing A you in volumes side likely of and area. there We're Area, Beeler, XXX EQT, West a Valley there, year. of lot the million capacity areas couple million regard on growth on Southwestern, our our and Dunn. at in in expanding start

Oak If service go has putting And Grove now, right after next following Train X you and that Train we're likely X there. Train recall will shortly year, in, that. in one

Susquehanna will we're a system. Pennsylvania seeing activity more coming fill on Supply Atlantic side of we to well from with of So, on up the volumes lot as lot activity Northeast a Shifting seeing ramping more to Sunrise. that Cabot the be area, their the Hub

second our in be production a come volume delivering right anticipating they'll bringing pipelines, of Marcellus there. on QX in today other net of and net But shift gas all no And online Some wells but XX They from system. Marcellus where that will they're incremental wells on comes interstate of had XXXX. Gathering the now, volume about be that Northeast XX in on half QX. they're also

So, we're that as day to fill soon fill stated that publicly that And definitely be as bring one will project intend Atlantic they've from up the ramping to they online. Sunrise. nearly volume able to

Jeremy Bryan Tonet

Good growth encouraging. color. the see continued you that's what despite a Thank in that Permian, Marcellus That's to we hear the so for great. around even

Michael G. Dunn

Sure.

Operator

Barclays. question from next our Cho Christine take We'll with

Christine Cho

accumulated for the your get of have reduce So, step I basis the transaction, sense a up assets. the your eliminate tax in you on wanted pipes? took where actions your to impact Just for income deferred a Hypothetically, that base FERC in Would place. that event like materially a to balance or guys would that do the rate your start assets. trying in transaction on calculation FERC there's

John D. Chandler

No, would Yeah. it now. don't eliminate think that we

Christine Cho

Okay.

John D. Chandler

Now to just our file course liability great relative two increase to back same (XX:XX:XX) tax, when of the last of going mind even That but income we we that from rate year-end deferred still the about providing XX% part on quarter of time, XX%. talked with think to for to that to be possibly the to we if relief at clear guidance the there's was you subject believe steps kind be accumulated though Transco. our regulatory the that shippers, in still a could would

relates March company. As we be payable payer to that deferred the the it still a the by and be that filing, still there out and corporate we'll be XX tax tax liability believe still will

any So, be implications. believe same we eliminated time, we either. feel at rate will I like has the don't And don't that

Christine Cho

– you think expect to have well, it X%, you take a to I have you you what to are do you, liability? What more pipeline the and MLP, – keep regulatory from book guess, in into the to – if going it keep XX% the in the do

John D. Chandler

Yeah.

you'd MLP, have were yes. be that think at the in it end was liability, it of the the regulatory an if – day outcome if the that the would were I – additional

Christine Cho

Okay.

John D. Chandler

inquiry. that. FERC to yet also I the not It's to how that's intends completely say subject handle though clear would notice of And the

that responding regulated NOI. entities various are So, to

still that. it's subject think I to So,

Christine Cho

Okay.

John D. Chandler

But follows to the happen. the to the of on the same that could is that you expect approach XX% extent move, kind that to FERC yeah, XX% then there

Christine Cho

and earlier of was And interest, synergies. both which marketing is but party you their collectively their to selling out up that interest year, to buying in stakes, Racer. wasn't Blue potentially gain getting some it think about Dominion think Caiman stake out indicate that maybe guys this this then one there was seem And control ownership could I buy now Okay. their you out that How was out to operational do XX%? over their that

Alan S. Armstrong

Christine, rights but related of into it type get as that have to Well, transaction, the that, we we to the Yeah. interest. do relates details don't of particularly Caiman

And consider so, rights to in has of indicates that interest the – nothing we're changed just transfer really sale because of not or there. regard our

Christine Cho

Okay. for the steps us Supply the the on date? and Project? permit in-service for And Enhancement can you then, more next to are give that color What potential water what lastly, some denial the Northeast the does

Michael G. Dunn

Michael is Yeah. I Dunn. do This can Christine, that.

they past necessary There to Quality been review. act, Conservation year, closely could the their is you Environmental be State did the we satisfy and be there the of a York waiver probably occur. one-year complete period, very During the statutory inform for to if denial have Certification. They needed that period that us deemed Department of don't to time additional working this they issuance that a Water to recall prior with New conditions

support every And and them order but Grid. we to of intention customer so, time National did have re-file their whole every to that and deny permit, review, the right certainly our in they more that allow for for permit,

up on and review, to really assuming that data we timeframe, project think we will any the still It's And certainly approvals there impact would heating in it oil with permits project that emissions project will, continues critical the would of units. and York National now, it million the Quality we York its Certification able to We oil burned gas several into displace right year. in New Now, City that converting schedule. have assuming it continue the next that's year intend X.X a continue and by in every our per same which on tons to the and reduce re-file do weeks, COX get wouldn't schedule. needs million gallons to for New be X about Water Grid, the natural order all that fuel FERC

it's So, there a and think needed to needs project it we much in their Grid certainly activities continue the National conversion Northeast. certainly

Christine Cho

color. Great. the Thank for you

Operator

Pickering, We'll Bean Holt. take question our next from Colton Tudor, with

Colton Bean

Good morning.

volume looks the some So, EBITDA was on for bit. investments, Northeast the like the it but proportional lagged growth solid equity there a front

Racer there, So, or any it? primary on East color just whether of caused what Blue the maybe or drivers Utica it variance that was

Alan S. Armstrong

on there. Cardinal declined were of and Yeah. volume the right, you Bradford the but was Most UEO volumes JV, the the on there the growth rich interest, gas, are Utica they

that joint so, had venture. on And that impact

primarily Utica So, offset was Bradford some by increases, it Rich decline.

Colton Bean

Okay.

lower-margin the bit just a dry gas a So, so there of makeshift?

Alan S. Armstrong

right. That's exactly

Colton Bean

right. All

wanted up I to on West. just the on And Jeremy's Okay. follow question

Alan S. Armstrong

that increases clear that that No. But but we and we – be EBITDA. Colton, just lower but you're rates higher did to on have is be lower had – just Bradford, right to there, we – a sorry where clear on – saw margin EBITDA Utica there Rich see that we so

Colton Bean

And So, Appreciate the if the impacts that? mean, I anyway detail on it follow-up give Jeremy's West, could you on mean, that. then, was of comments Ford, transitioning would quantify little producers sounds it bit to away rigs just maybe Eagle basins, you weather think I in mentioned question also any from Haynesville fairly marginal Haynesville, in there. or I be the a Yeah. there shift like more to your any Powder sort to or activity, be River from have the that helpful. assets? whether seen liquids-rich Niobrara actually you

Michael G. Dunn

And I that very them winter talking quarter. the for if up us say there very activity impacts a just you areas significant last Haynesville minimal. for the just still And there were I'd Yeah. would say year because rig was I in have last is mentioned to recall the it's ramp about unusual those impacts there. us. those us, winter

length Haynesville, significant an wells would pretty production lateral expect other online which so rate initial significant that this week is they from that we I on production there, in about think well. the just brought we talked pretty just

and in call the Ford about there's there talked some that expect activity seeing that still we're occurring lot But Eagle we're we well. Crestwood they with them seeing to of have Powder of significant lot in activity as our a fairly a with the as yesterday area So, activity also take on interest to those River Basin there of as opportunities arise. producers there advantage and with in well-positioned up partnership their

Alan S. Armstrong

I Ford, our Yeah, just there. planned week outage of also turnaround Dilly add had facility, Eagle outage would think in to that we gas treating a or (XX:XX) at facility was And an about I sour that gas there. treating

– that a was time that saw any unusual didn't mentioned So, lot of the a big wells on as I impact And planned, an the It was near event. XXXX, these the got earlier, on big we've you Haynesville, is we off coming decline in to term. work but new it like you've have think quarter. in

through there pick and fresher that here winter. up activity out the adequate There we seeing immediate production, get are the we decline. So, is back more the as the

always have lull of kind you So, bit a the winter. during of a little

course now. And about so, fourth we at some oil rich pick the areas seeing the move But of back up. see quarter definitely first doubt we'll the No more first over the of that. of end right are and to so, the that part rigs quarter, gas and of

Colton Bean

a one. Got it. guess I just last

some the CapEx So, you updates hinted the budget to Analyst at at Day.

of the expect to projects primarily those out existing just the additions some to to hold any most indications backlog? details. see to So, of scope But whether adjustments you'd are prefer or if we the to as should I whether understand

Alan S. Armstrong

new you projects a it's tell terms opportunities the incremental more for in Yeah. It And would of some driving I lot the and that same, of are lot along will, of of is system new Northeast demand just the that. services it's a of if Transco you. kind in

Colton Bean

it. you Thank much. very Got

Operator

from Durbin We'll question Goldman Ted with Sachs. take our next

Theodore Durbin

Thanks.

back I the this to the to call, the downside to rate coming wouldn't items. on case know into your rate earnings on think I see said XX% you you tax touch on going income the Just FERC Analyst a but allowance. Day, last from going you're

in that you you go zero zero Transco or whether of a tax would keep view be impact what do refreshed tax tariff a for using the would a on you if and So, allowance? MLP a that the have allowance, potential kind be to reduced

Alan S. Armstrong

I would of contemplate structures use to and to we Yeah. just say path. we plenty have that intend don't

employ, to in we So, not the us and rate allowance expect case follow other I there's it. plenty of so do tax structures would without that

Theodore Durbin

Okay. That sense. makes

And like so for guess, then, to have but do we we do, one I if WPZ the is to sorry that and stipulate roll ways WMB. into that I'm the up if perspective be look rating at any might be of do hypothetical, that the you to what they previewed entity? you consolidated with a Have need at agencies? investment from would leverage of given what you sense grade a to

John D. Chandler

it's to this new is rating tell Williams months you an had talk been having eight at here agency, – opportunity Chandler again. now just times. Having X.X X.XX Not really been my and I in, and felt consistent to inside John to to somewhere obviously an this, with view talk to kind BaaX on opportunity BBB, had I've and that think down here Williams to would times is, I I rating I've agencies it of is but what front, what of the new ultimately reaffirm at

investment BaaX. basis. as certainly mind lot view that on basis, be consolidated a long-term BBB consolidated we it's flat, at too we not grade desire But of BaaX, certainly to at that on certainly flat level, So, a think but totally We're in may with clear we're BBB I be today there. a a my capacity

Theodore Durbin

of by you numbers tended EBITDA to numbers to Got I you're be about quoting, the versus that clear, reported fair? lift it. think Is those turn. And a John, just a the quarter

John D. Chandler

and right I'm referring That's the adjusted. rating agency are – are numbers to those

Theodore Durbin

to last the great Perfect. then, me Okay. see progress And from Sunrise, on Understood. Atlantic there. Yeah. one just

are – to items the Sort hit in-service that you you've mid-XXXX need key what discussed? what's left, that left milestones of to hit date sort of that

Michael G. Dunn

the was, the Alan Northeast a in and stations a snow got the Anybody tough looking and good up are a six on winter through right as now, winter. way. rain And pipeline great directional as job along that's said, horizontal looking very completed. drills it have but a had progressing indicated, at residing Alan of coming and the from of four mid-XXXX way, the knows we're tough there. contractors the in-service. done right schedule Right of as we lot how standpoint Compressor as We've of well a

The hydro we and next here starting those pull-back other tests. have on two, weeks in are the we should two

and weeks date So, of it's breaks some in-service we'll good we're it's us. by make as right on there really for all Northeast, really the in as now minus weather-dependent up weather or plus weather now. progress either soon and that and targeting driven some the getting date, an good side really We're

Theodore Durbin

it me. Thank perfect. you. That's That's for

Alan S. Armstrong

Thanks.

Operator

We'll Horowitz question from James. Raymond with take our Darren next

Darren C. Horowitz

Hey Good morning. guys.

for Just a me. questions couple quick housekeeping

looked looking total year? down was on XXX revenues, The to we first, you percent segment guys things sales, at sequential way right nominally a XX%. decreased it it O&M, it this the mentioned about of change progress thinking as through Is it was it like the about and the around but in asset points, about so that basis think

Alan S. Armstrong

Yeah.

of didn't Could the Darren. you catch part sorry that. about Sorry, that? repeat first that We question,

Darren C. Horowitz

perspective wondering points an sequentially, this revenues, that's it Yeah. but problem. margin obviously was Alan when year? if fourth I'm quarter And dropped segment XXX about of duration percent a O&M from looked basis just from we of O&M for that No the nominally now. about down like the the XX% XX% is right that referencing think to total I in as platform just it

Alan S. Armstrong

Yeah.

scale talking O&M around call performance good very drive similar I margin we're we on good improve these tracking to we the to track progress a what We're and for continue what think we're really actually we about an a closely making is gain teams, you're do we where ratio, making and that which measure and – expect from we as today. are that to projects.

West terms a that to somewhat West to scale around a it is as revenues area. able and areas in our I the say the basis, to annual well on continuing and our it mature drive team I lot are that and without basis, has that down if of drive are ability increases, sometimes you we would and you, but of volume expect team larger, so our continuing quarter-to-quarter average volume think at the as move that similarly, obviously down we drive increase its to against are Northeast look fixed, cost very and would operating in big of we costs on we we an like unit that drive costs better have these ratio gets in been benefit as on in issue. the that, even can that

So, expect much I would may on annual improve basis. as will you it that but to you it see us quarter-to-quarter from on to not see average continue number, an

Darren C. Horowitz

volumes about for what the thinking do G&P of contribution follow-up, then Northeast and gathered Bradford they can you of build? of year, gas to my and volumes regard How Bradford with to just kind this light recognizing And Susquehanna change of Okay. versus to for EBITDA is you about that. how the EBITDA – rate going just Susquehanna contribution half the in ramp as back of incremental in plant sort think there from be lead much cadence the the know

Alan S. Armstrong

Yeah.

expanded be somewhat to is saw is we rapidly. volumes a vantage called was Susquehanna pick little there. the out I ability Part stepped we to there. those saw we point respond pricing that thing producer was to from a what was impressive bit saw going hit there system in because when the we that of think on my some as the But more some the be for when the and There this pricing had our areas. of up good pretty We volumes winter think driven. quite expansion locally Genesis demand boost stair capability was I out

So, well certainly on. their activity they've that we're all coming markets. we're a managing and contracted They've the keep that managing see of as big to occur that. today has are as Sunrise going got in projects as serve couple power up comes seeing with Atlantic gas-fired to well. Cabot the that And a job to of great business on done place

– those well. So are projects very and doing

a are And really Sunrise we're those just going think gas-fired facilities I both power to the in online. with the business team gas job there nice Northeast, elsewhere. to done response really down of impressed business going we on degree the and the from from on, – activity there winning of were OVM area, So, generation has coming the (XX:XX:XX) some and in see Atlantic rich that new

And volumes so of on that. a to job grow done the great team has really continuing

against is about behind right a process XXX but then TXP-X, and follow online that. would quickly, As TXP-X we'll our fill limits a day that constructing we've we're the day have to coming Michael million got which and pretty up be in capacity XXX of another million were now then mentioned, up there another to going

processing, – will, much Ohio really see area fill we're now. And down don't now volumes that's in but period just but in adequate gas slowing matter up the ORM we going you of be area, a capacity little I just that'll little of late a function the see smoother, drilling it's think to stepwise XXXX seeing the takeaway those though. come seeing the Midstream more sorry to the right out our if Northeast, a for be Valley continue or So, the because

Darren C. Horowitz

I Alan. appreciate Thanks, it.

Alan S. Armstrong

Thanks.

Operator

Citi. from Genco our take question next Eric with We'll

Eric C. Genco

morning. Good

remind wondering, can did the Just is rate the period go that what on Transco quick When test you real through? again case? me

Alan S. Armstrong

plan and assuming the March now we period that to Right goes August rate end there. Xst, test Yeah. case through of we file file at that our

Eric C. Genco

Okay. wanted again... – And to ask I (XX:XX:XX)

Eric C. Genco

XXXX. X, March

to and were goes, choose Sunrise in like point process realize a to the online. were thinking to kind but this that I when of corner announced this how still Okay. you gets of Atlantic closes sort when is through if roll-up of option of kind there's you the hypothetically, sort rating it And a look and through being agencies hypothetical, again of at is of some from around feels that terms stuff and in

could that closes, the like? but of I something if terms What's sort then where heard in something thinking something on of point and eventually about the get that for of eyeing announce being Is credit rating think is grade you that at the were of investment Sunrise that like apologize Sunrise we you for? Atlantic comes process kind kind you something between, Atlantic agencies So, for spectrum. one where in and you it that in fall theoretical.

John D. Chandler

think is the Chandler – again. John given this I fact

Atlantic think firm I it's least forma given predictable, stream the that full because I believe is fact at somewhat that project pro be when credit given capacity, service, is credit, in of the we'll a do Sunrise. for revenue highly

Eric C. Genco

maybe to ask in years then sort to you your affect Permian a tradeoffs to LNG being demand the demand. and there's of of situation, in to through ask But longer the of kind if growth. of you one lower couple where sort And of scenario has customers. that levered could see of kind of sort wanted and next I think on some prices through obviously of sort lot demand, between then you're sort tend associated where wall then I'll price been Northeast for do spur bit and Okay. of is just of of goes, a philosophical a How coming a low question sort the which about a philosophically, how that but the made were you Gas get and gas

I'm decade think holds you looking beyond Williams trying just to So, next what about think the that and philosophically? for about how

Alan S. Armstrong

continue actually to a capital that helping that in you there spurring us a in capital. Yeah. investment Permian something the prices question. the Great I big much lot of quite and bit. more would longer, for thought is is confidence give which – in we is just supply low investment study think big And tell actually I

where people, don't And expansion any U.S.'s doubt it. for period some about that, doubt was I continue going supplies about to of I a think to the think the think low-cost is gas produce to very in there of we're so, there LNG ability backs a see long on before I time.

are And are – amount in have should activity plants great methanol and Louisiana, to so now serve methanol I serving we're tremendous big seeing we've contracted of plants we say. we're that – that building two that got

to of just go And seeing we're frankly. additive capital trying big to low-cost Permian in is I advantage So, story just the that think take gas.

rosy which the terms if of in large, In the and towards the by XX% out the is see probably you Permian, of increase case go downside a even so starting terms we I that. are increase certainly helping that the have of dollars is we're most Marcellus, that's impacted Marcellus versus to the perspective big really signs my the the line sustained Permian capital Bernstein even to a into negative the is there the to pretty think the say But in have demand in for Permian, like volumes, Marcellus of certainly seeing that. has very signs report, get I and bottom kind from would coming of of that's and Marcellus, that

Eric C. Genco

Thank you very much. I appreciate your time.

Operator

question take next Tuohy our Shere from We'll Brothers. Craig with

Craig K. Shere

Good morning.

Alan S. Armstrong

morning, Craig. Good

Craig K. Shere

industry coming perspective, for familiar or playbook through it actually a whether comes Constitution. any new we're from seeing the through on with Enhancement broader what opine not citing a to you Supply there? environment Northeast improving on really projects sounds you've the York New when regulatory is of regulatory traction Can been little an The promise ground

Michael G. Dunn

somewhat the miles that will for the us negate tell doesn't away, you tell more for import are LNG permit York we they still all all in few world, is Christmas project whenever oil would from to over will they than have this I New but I the this cheapest of need markets. And New just is a to specifically. important just the you Dunn. saw project Year, just cold a for of that did to locations England say Michael Craig, weeks This can you the in Russian two they very burned it ridiculous through fuel the in those and winter into challenging there two and XXXX between hundred what those that projects, I after week Northeast. gas Northeast New Boston. in had And and was spell the get

gas the the failing their difficult reduce of water hot for they to in And really so, there and upgraded to areas. with be The systems. equipment and to boilers be costs with because need the oil reduce serviced really is this and Housing need there on the And heated they had fuel need we think York winter keeping up natural a times, New those upgraded Authority emissions just some there. buildings and citizens City really

our doubt permit it need and permitted. to but we and projects get our customers, challenge There's public with that get we're real and out there out a be no a into that, projects. making about definitive and sure purpose So, to there those hands opportunities is going the challenging

Alan S. Armstrong

denied certificate case would just I got Yeah, add of same certificate, It the the XXX Constitution. It Craig. denied on to – same Day. got also the that certainly Earth that in the one is

has that similar a lot so, ring to it. And of

to. important out, not political I'd points As is going by this of Governor project. City, here one approval the terms from really State's some locally having and strong gas. York we are the this New support now, Michael that's And the think really factor on is that actions to probably this important get to natural to for no and lot need stay far trying paid think to certainly Cuomo politically, starting folks is timing folks remind on actually in the that a and affected we get that attention we of but to right and access we left are be certainly to call, an

Almost City out there's think emissions to reductions of of in terms is positives oil. for take fuel of lot all I off their a by getting oil. of York in gas New fuel dramatic strong very this So, going

large And fuels getting in so, folks. very actually to this project a it's there's benefit and from lower emissions cost

the ultimately, like turn favor closely the and the much there's working issue election think and this the and this governor's related on particularly been that's more regarding we've of an denial to feel to State in the we timing So, will again primary. on with very our politics

one hand. the go familiar So, feeling does very on

really on think we hand, some other us politics work that'll strong we have the On for this project. eventually

Craig K. Shere

Sounds some to but listen doesn't Obviously work constituents. in good. situations, political will logic hopefully they

Alan S. Armstrong

Yeah.

Craig K. Shere

order and the question. the rate lot or about because implications. to that the Transco of Pipeline settlement year can One two? Northwest order a in tariff in, next March talked dragged it quick and immune the other or settlement We've FERC Is be

John D. Chandler

be put that specifically explain to companies able does And and that depending tariff the we get come think reduction. entity course. we expect whatever point our how in on paying and address also that it Pipe time be place of provide structure say would in a rate for We to is by of I FERC they're tax Well, was addressed XX% address it NOPR will suggested the NOPR XX% actually happen. going Northwest we to required it to to the the tax that to that, of doing corporate make part that in

would potentially we that that rate believe a have to FERC, this. don't with addressed going communication we be there we do So, but some think have case traditional follow the that since we settled through specifically are the process others

Alan S. Armstrong

XX% has higher that Craig, rate rate XX% And charging we're as a rate, quarter Even that appropriate to that we're our already the receiving XX%. the recognizing only be would this reflected cash actually though we're step to down. current

Craig K. Shere

clarification. Great. that I appreciate

Operator

And we'll with question our take next Shneur Gershuni UBS. from

Shneur Z. Gershuni

everyone. morning, Hi. Good

of quick Just a couple questions.

point, interest producer producers. lower customers have was your is NGL of of liquid-rich in X which at wells. hearing to expected bigger output? the the to hearing also over of future rigs from the evacuation more gas of Just when the come shifting you're at all would or into from on service. type four Northeast kind move issue in to Are back curious in About tended wells, what an five you ago any year, an about years Northeast, Mariner This East First question. some producers the operations gas the dry rigs to

Alan S. Armstrong

because and there a propane goes is gas oil right now. that continuing a of drive certainly of to depending the move and on rigs I a richer is right lot the back Obviously, on towards high. lot say forth things, been spread would gas rich there focus gas the is have and right now, that's now, prices between

that well Virginia Ohio but West the as of projects – seeing have has southwest somewhat benefits takeaway we're think so the and part is I know play, so, that's interesting increased of the Pennsylvania online. and you And coincidental, and come Southwest

a and TETCO M-X also Transco-Leidy Northeast see serves serves South, play. that area you're pretty Tennessee the the – spread big starting Dominion the of So they the versus to part pricing between which which and pricing,

better only the southwest have have not so, And benefit the gas strong right pricing you the in obviously you gas. now part of play, of do rich

real reasons. those really say say markets, a up starts would northeast play play we're sending there activity increased some into of in towards not two Atlantic now to but opens a being I Sunrise would in going I to cul-de-sac, as the gas of part the right southwest real and to been as rigs new the markets, leaning So, the part has just provide deployed well. see great access for

Shneur Z. Gershuni

answers the you previous Okay. gave And some to questions. two follow-ups, just of

the other WMB of with of be out as confirm you to ones if questioning wiped able with a up about First, be to that if would your FERC, Christine's (XX:XX:XX) WPZ you would have happened? did roll we've seen some the

John D. Chandler

at I mean, look to continuing we're that.

obviously payer. think little our a in that question WPZ of mark thing I by leaves bit one corporate today a the mind tax that the has XX% fact owned still is

in in what scenario. impacts material Williams that I I point calculation we or – of those not all. mean not happens so, at this the looking ownership other that clear WPZ think are specifically see to And we're at at by that And whether transactions

the the public, Christine I a I was corporation. or buy-in scenario about. think of what to that by taxes think and owned that a paying of So, processing was notion where a sure partnerships by I parent talking means is and versus ownership due there's that just XX% not unitholders, through what scenarios all specific the think the relative so, corporate the payment roll-up, there by is we're our to other level I'm of

Shneur Z. Gershuni

the the I structures, you word obvious to your us the is to used Okay. Craig's you you're follow-up will mean there going you direction And will entity tax some to plural, pick are and the responses, which corporate of that rate and other before response word question, in really with and the us, share paying or think file one I that you that structures that you're take in can Analyst one you case? any WPZ, come have mentioned the by is other looking Day up rolling at the

Alan S. Armstrong

the us and talk there they you've I'll Williams' certainly level to I multiple at, many many primarily And into are structures long that a about at those. so get various why payer take Williams' that difference that. structures that are going to description but we tax those the is heard a There what available are lot available in all that pointed don't regard. to look structures in think and therefore Street a out, available structures, and of we're is are at of the regard. there's John is which already the level, other

the that's So, part of first question.

going The to the question second answer. not of I'm part is,

not we're going pin we're ourselves So, to as this to point. at to this when exactly going down answer question

Shneur Z. Gershuni

Fair I try. to had No. figured enough. I

the is personal out ultimately I tax tax How WMB distinction they're or being – a well corporate there the when and in WPZ's does income corporate the tax how follow-up. what's pay originally mean, paying last that does taxes. differ an longer allowing as payer ITA I payer, WMB individual the being man units versus payers? one are about common Just also? The XX% the argument from person does argument unitholders the of WMB mean, was no that argument taxes as a owning fact it that constructed

John D. Chandler

roll-up maybe think were it here specifically a event bit, not I is the a twisting distinction taxable transaction, to to mean ownership I would WPZ. there the and – I distinction think aided a the relates as it we're be but WMB's of if there

that all deferred And notion have paid so, taxes. the taxes including been

the WPZ. it to one you'd have we that I and analyze that relates ownership in XX% have think to Does as it's sense? make

Shneur Z. Gershuni

perfect Yeah. very That sense. right. you the appreciate makes I much, Thank color. All guys.

Alan S. Armstrong

you. Thank Yeah.

Operator

question from next Followill Advisors. our with Becca Capital take U.S. We'll

Becca Followill

guys. morning, Good

out they Just for a back final of on structure decide NOI. the made the and and There's on like consideration a the FERC to have you of to a to that or comments asked of feel a the issue. the you what elect Do that FERC to same need order taxes final lot you're filed before been can order, before take deferred NOPR do into a them you simplification? comments income of in lot terms going

Alan S. Armstrong

that for to don't wait want order. around I No. think we would final

exactly wait So I to the and what for sit is, saying want timing don't not again but that. around

to think not is completely I the high. real ability turn over that

So...

Becca Followill

all That's Thank had. Super. I you.

Alan S. Armstrong

Thanks.

Operator

additional session. question-and-answer you to today's concludes to back That closing the Mr. like I'd or turn any Armstrong, for remarks. conference

Alan S. Armstrong

Well, Great. very a would phase say IR predictable teams thank continue quarter for tough and team's us, environment, to the suggest great all. of be well. just Okay. just is execution I would to tremendous you execute I some continuing very in pretty

the So really and of projects drive excited us to a term things going the front are rolling out really well. that exciting way as our Day are that going Analyst and into excited on about long lot

Analyst for thanks Day. questions you forward at look and seeing So, today your to

Operator

today's call. Thank This you for concludes participation. your

may You disconnect. now

The Williams Companies, Inc. (WMB) 3 May 182018 Q1 Earnings call transcript