WMB - Earnings call transcript Q3 2020 | The Williams Companies, Inc.

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Operator

Good day, everyone, and welcome to The Williams Third Quarter 2020 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. Danilo Juvane, Vice President, Investor Relations. Please go ahead.

Danilo Juvane

good and Cheryl, you, morning, everyone. Thank for The Williams you joining us in interest your for Companies. and Thank Yesterday afternoon, and we presentation released speak our earnings press morning. President Officer, Chandler, CEO, to Financial this that release and Alan Chief Armstrong; our John will our and the on today Development. Vice Senior joining Officer; Corporate Dunn, Strategic Operating are President our our us Also Wilson, Chad our Zamarin, Michael Chief Lane General the call Counsel; and of to In our find you'll statements. presentation a disclaimer forward-looking related materials, integral to it. and remarks, and This review important disclaimer our you should is accepted Also non-GAAP included in measures that the principles. presentation materials we are reconciled to accounting generally And schedules at today's of these reconciliation the materials. back appear presentation

So to Alan. with over turn that, it I'll

Alan Armstrong

Great. today. Well, for all and joining you thanks, us Danilo, thank

Williams and in exceeded investor headwinds, once plans and We against just can active showed internal hurricane again season the of pleased are share quarter. the its expectations to durable a very several results be Gulf. this how including business third another strong

in two Louisiana know, did job you As while in of the to operations. staying operating minimizing a hurricanes bore Delta. area great our safe, brunt of And our impact teams the significant Laura the and

Gulf than and hurricane met critically impact, the record as the out quarter financial produced not always, to staging the offset region more of exceeded allowed and As impact the multiple donated or processing to need. Despite Williams in Northeast manned expectations. where in those hit and gathering XXth us Street those interruptions growth we in supplies response volunteers consecutive but by areas areas the and have helped effort I'm surprised impressed, really the

has of to factors. across market. allowed stability on us distinguish difficult able and continue us in Everybody normal to this a year-to-date ourselves to has illustrate wide of predictability Our environment more used but the our basis, XXXX a this to really produce being gotten business external range results

more company in of in to long-term Additionally, and commitment near-term a the right now highlighted during then to ability midstream reduction later. Williams quarter, emission performance busy first, and walk John it the and its bit want a reduction right goals. way I'll I results. I'll and becoming emissions through our highlight set this our talk to Northeast turn to help But here segment, Rex' over U.S. both to by climate QX announced its in G&P about our goals first

of Northeast. here show that over XXXX impressive more looking gas in our Gathering the versus X.X% assets growth X, So of third volumes record X% the our across Bcf where quarter XQ averaged day gathering XXXX of slide second Strong segment. the we segment and Processing performance dry on the and was per This business in and the in Northeast a gas volumes XXXX. processing of up areas operated to call drove for our is Southwest our on sequential rich production. growth the position handled over Northeast strong up NGL performance and of our Utica was record you XX%. Marcellus these a here production our over was in can evidence begin gathering the was and processing growth NGL And supplies. see XX%, of as attractive fundamentals volumes the for market Each nearly Northeast gas an comparison growth quarter and the X.X This processing areas U.S. even

to Basin. most include the demonstrate the We ability important Basin, Appalachian our prolific continuously acreage operated within gas-producing most producers and the improve that area, And the by on continue their are structures. their resilient Appalachian the largest cost gatherer to in dedications attractive

faster supply. the than out gathering You our can see Northeast this Northeast playing grew as total volumes

up in even information as by was volume. the by including gas X.X% of X.X% the you production Williams, a for see shown, wellhead natural Northeast if looked point area, all XXXX ours, was up And to would you XQ comparison. gathered logic, XXXX at on overall, the we've So from outside XQ that of

So parts only we basin, the really are the not right of in in area. Appalachian in basin also the but right we're the

trend forward to to and strip favorable G&P continue when QX now, this Utica. to let in for results. well-positioned it about But response focus in more to of turn highlight the very investor area we our expect Marcellus a for over me both We talk to John very XXXX We'll and group the customers segment. business pricing get our our

John Chandler

results going Thanks, once our And And our an again, theme, Alan. quarter. our service into cost Transco to and brought in we're this pleased processing Mexico of overall offset projects reduction some hurricane gathering Gulf deepwater to efforts, Northeast conditions here. out and to X We're challenging helped heightened strong as our new results our the of slide from activity. very incredibly go with segment

performance statistics. You our can see in strong the

adjusted First, at looking it down EBITDA $X quarter, X%. for was million or the

deferred we in down at Gulfstar and $XX platform a that quarter. expected is million this misleading, deepwater However, realized given revenue this our very step

In third last from XXXX. quarter included true-up of Transco case prior incremental of rate the third million for EBITDA year quarter addition, settlement the periods of $XX to the

discuss the you if our had. And items, thing which very noncash same in adjusting up year-to-date results; We'll step-downs strong is EBITDA in our more a But XXXX, more up adjusted the X%. actually these depth versus X%. at and up out other is of for adjusted EBITDA our indicative adjust year-to-date revenue for was So EBITDA is items, the in deferred moment. quarter quarter actually third X% similarly playing of is our we EBITDA

mentioned. CapEx, quarter depreciation. on non-controlling is year-to-date for was probably new EBITDA, to largely have maintenance strongly, our had down operating adjusted which in much up which of basis. the more due to the like increased just dividends been for for would down for JV, distributions it earnings quarter due the not timing been interest the noncash owners, Distributable items But I more adjusted Our share our related to results our lower due increased a primarily flow was per just again, to Northeast and consolidated cash quarter higher to and so but the

included is slightly, refund the refund, but million an not year-to-date from also period XXXX tax distributable cash this DCF benefited tax cash cash down is flow that that we've up. Our Without year. $XX

the we our look end towards flow distributable likely above still see of above we performance the and year, of results. guidance midpoint cash As coming last in year's the

but $XX is that last Of come $XXX in front, With free that, EBITDA metrics. less. and our spending DCF the capital free and capital helped to this that forecast, spending for over our we'll our goal spending towards on capital our the and times, continued million $X we it's capital our expenditures. $X.X about and year, improving times. billion has drive the and with metric end million the range quarter expected capital come XX expansion at flow year, maintenance And And And that to above last of capital goal discipline was excess what towards of moving for metric X.XX towards to that inside end about we and This dividends of low still to debt leverage next all capital year-to-date leverage this likely point, less, spending capital one-half the us down year-to-date On year. in looking our all to guided EBITDA of improvement flow expect discipline goal and continues range. times. intentional produce cash to it expansion cash the up. we is And at year spending of is quarter, being strong is months X.X to leverage going move frankly, predict the capital for X.X year our billion expect cash generation

Now X, Williams going quarter a performed let's Gulf Mexico despite very deeper well and hurricane unusually our that at the looking that. little negatively quarter, Again, to into of EBITDA operations. an slide active dig impacted season for adjusted this

a throughout year hear each benefit strong this has bonus accruals recognition control in cost you'll segment, performance. of been realizing higher our after this even quarter As big

mentioned performance unusual They of of more total it's to segment, unusual and a reflective as this this comparable of on the identified primarily we We've items, ongoing chart two before we the to those a things. make numbers million. moment they each comparability on are items into ago, shown slide, our $XX As consist few which business. and noncash things dive believe important isolate I

in The transmission Mexico first East franchise in is the on $XX Gulf our step-downs Gulf million reduction our of noncash deferred in revenue segment area.

time. received producer, revenue As from upfront a reminder, cash at not deferred recognize significant payments revenue, on ago we that but years several did a

received been We been has we years, payments the several shrinking. last amortizing previously into income and have amortization that those over

described entry item earlier. case The made point second rate million is that of in the $XX XXXX to I trip the third quarter I'd

if up items, again, So, adjust actually X%. those EBITDA over was for you

than $X of Gulf & results Transmission the last these same the segments, items year. period were assets our at better produced that non-cash looking So, Mexico without million

the projects the fourth the including two in service quarter pipeline came of into the added in of in transmission this project on New service second $XX Phase revenues project, year. the and quarter, year into that quarter gateway came for that million last Hillabee

were about resulting during further operating the impact property lower revenues While The Gulf and taxes. higher $XX and by we offset costs the down reduced Offsetting deepwater heightened reinsurance seen the quarter, due be of was did from of see were XX%. Mexico in somewhat increased shut-ins positive lower accruals they million bonus shut-ins, the which can volumes, to profits activity. of hurricane about gathering

going contributing the drove a processing revenue last Equity record it also revenues gas this EBITDA, million Mountain on Marcellus realizing lesser and to volumes to and volumes benefited Mcf of extent, several over revenue that course, expansion X% record continues XXXX; we G&P EBITDA $XX Northeast new late benefited total year; the segment, investments quarter, the the of backs to gathering Laurel to per we've and higher gathering of due gathered South over investment XX%. Now on and some on where online come system from coming These several volumes that producing the Collectively, and from made And system, where in additional are Northeast this volumes, wells to infrastructure. additional due in results processing, fractionation from transportation strong, were higher higher the quarter. growth. we Midstream. method years of earned volumes up NGLs we on more in last grew drove

efforts, which well as much cost also benefited from savings. of Finally, reduction began Northeast expense as year, last favorable from maintenance the

Northeast you note, include in which X% compared quarter time a gathered our is Mcf from a of Mcf $X.XX Mcf when increase. EBITDA As the $X.XX per averaged assets, per assets, year, year, volumes final non-operated last proportional to for per adjusted this our the operating the same third

offset margins last by reduced amongst slightly about of the commodity West were third West, due in segment the volumes, Haynesville, down lower Wamsutter revenues Overall, biggest the last which down at looking coming were quarter higher Now the Revenues those were year, Piceance. but that the year. X%, flat declined and was decreases gathered to with were expenses. and to and in impact basins, spread many versus

new with a of an cost bankruptcies we these as to year. volumes segments, as on Of the control. increase lower to by of decline, course, revenues we in MVC volume those producers our bankruptcy. rate again, and agreed was of contract efficiency last customer we with focus three higher a in have in and their relentless as two December the muted West The would expect keep a however, And out somewhat Ford, than experienced other dealing higher cost, basins, with just move Eagle where

and X X% results. by at showed The slide price affecting driven linefill revenue year. same growth. inventory in while commodity quarter growth to the on $XX Gulfstar going totaled our $X million, of factors and Now of EBITDA, of reduction deferred the again, many position adjusted our third the fluctuations million EBITDA this net looking They noncash step-downs Barnett created noncash in year-to-date a impact

to volumes COVID, part a Northeast from transportation our year In at from million over year-to-date, back additional and while contract adjusted in lower price good in payment last the margins. quarter key all, the being renegotiated had a expense And expansion projects new points $XX last & Northeast MVC tough costs. on of it's being earlier impact collapse service largely million. huge of by and investor year. volumes similarly finally, service So at back the overall tough million been because was reductions, and last and year $XX market this Gulf EBITDA Eagle with by adding segments, pipeline uplift been projects offset turn in Mexico, payments cost received of about Gulf The the the year year. Otherwise, and to revenues from that December looking year, the true-up the some gathered shut-ins offset the total year, growth reduced of areas. is of impact but time, million of call processing, it Again, up our last cost cash delivering and items, of up segment and hurricane Again, without all off without on is and on commodity we've in by this has despite incremental a those the we've and EBITDA into Mexico up those to in year, of to somewhat ended of of versus Barnett, X% Transco. the had the focus noncash same volumes Ford with largely of increased gas was Alan? performance due West were now Gulf a down revenues $XXX really noncash growth, season, in the and Transmission the comparability reductions over the the $XX X%. that hurricanes coming an about reducing is fractionation items I'll Alan were discuss Mexico last realized we that West, and X%, NGLs, four costs

Alan Armstrong

X. John, thanks, on starting again Slide and Well, Great. here just

a what investors. key have are of We listing we believe focus areas our for of

discuss so performance. our the And for first, I'll financial XXXX expectations

expect but for release financial following follows. expect we our We we to XXXX in during as insights provide what our XQ to XXXX the offer guidance February earnings

we continued of expect driven positions adjusted with continue our and both generate and comfortably free second, our all, improving strong demand various favoring the setup we production supply following: first showing modest our expect growth and to gas. and returns; to predictable growth third, gas EBITDA flow discretionary First, highly on flow CapEx; cash growth our again reliable of cash covering by dividend

our And that a gas number across the in-service year many growth a business. deferred will driving issues. forward degree longer we have with and experienced downward demand this that of John so well. certainly Trail, driving non-cash be again, of we're the make deepwater to we And projects finally, Southeastern you of is for customers our then just due would just Leidy no that step-downs market tell South transmission lot And early of systems our like plans about, as don't and heard talk dealing the pressure revenue to you to the different shut-ins we expect from of

And nice offset that how growth point. are at feel these that So XXXX about really lots a drivers shape of to very We couple predictable partially small this will only point. will expect confident this for of items growth at those very we drivers. up work

overall capacity XXXX. operating in to. thanks driven expect expect gathering operating are mindset, do again fifth cost really we year spoken volume and team's of to our But margins for small First, consecutive to a continuous the transmission increases improvement growth amount that by we've our expand that we both expansions

again, any to in going outpacing expansion are our expenses. revenues And be so

by So efforts margin focus really the on our businesses. ratio operating across to continuing tremendous our teams

We West declines also from short-term enjoyed year. segment modest that the lower last NGL expect we services this in

year, against of weaker So expect we those have and course, prices our to some prices NGL margins. in enjoy that year opportunistic in higher higher next business did from again gas gas margins revenues next don't NGL we services with working our keep-whole

On capital thoughts. the allocation

for valuation have and is But discretionary dividend to flow our free of investors, and of our CapEx, income relative achieving key dividend we planned in reliability is to growth key growth cash allocate. we to dividend source our the and will believe beyond First, appropriate stocks. a value other our predictability

highest contraction consider, our all we've the stock One value about continue our appreciation credit of three yield, our as X.X investors to the attract for plan. I'm lot agencies energy of priorities our and ratings should Once the strong investors. we in towards be sheet on weigh will will we leverage target, Board to complete on ratings we across XXXX, to the will options for higher have a talked bring we outside sustainable say driving And options. target that variety of generating Obviously, will a BBB are to XXXX. to know our reach focus investors balance course, a deleveraging of drive end you which the for we of debt-to-EBITDA value reach think this seeking. of flat And been all the with long-term course, continue these that we've goal sector. And proud towards to the price various

would one additional be course, delevering. Of

buyback, stock today, investments where if in our and rate from expansions improve are valuation would incremental be regulated our and pipeline Another doesn't we base.

of of to investors. additional turning cash longer-term And And plenty drive to now look utilize so alternatives, those at things for to plenty our value flows free outlook. growth

the in gathering our in versus market broad footprint. volumes growth nice position the is across the the that all, G&P of evidence strong First we've and of our business, seen processing

see our the for on is total a Slide of slightly basis. wellhead on down can X XXXX slide year-to-date gas in You that appendix natural production

gathering of So another have to. we're that's There really over X%. Mexico in across Williams and just exposed volumes with the gas that while face grown public of And even isn't the gathered disruptions company looking all processing Gulf supplies, domestic the of footprint. a by comparable

appropriate low-cost we portfolio that business our of have, is comps of basins, portfolio. because a our practices, are or number dominant with for small G&P that systems resilient gathering the customer, single the wellhead gas Single-basin a of and produces those contracting very Our the flow, just our broad or businesses focus and operate. reliable on connectivity not cash we customers

by as spoken many we've gas, diverse is natural driven asset low-cost demand more to base times. Our for

a for this So, moment. let's look at driver

decline resilient has domestic down single on wouldn't from less year, and it heating of demand biggest pandemic. a of been this the degree this a exports year, res-com And this of all, you decline from certainly was a the which year, XX% but year-to-date weakness contributor demand this in nearly to COVID-XX basis. days the driver was key through news, March than January the X.X% know First not

looked year-to-date. dealing resulting weather, as exports well even with XXXX's Lower up, this through after a total XXXX's the pipeline Europe, up and X% are demand be January were would highs we if I'm seeing by are LNG near total fact, we're Mexico, in gas March winter In year. Exports, to exports. both the you summer weather the now, flows, aware, XX year, that sure, low winter now And in LNG very warm of in a saw LNG earlier rebounding like

said truly response, to seeing. this we driving demand we've the price the is As business. key picture And before, is our demand are

price into could eat growth. Continued demand increases,

So producers respond you watch these signals. price for, closely how should to certainly

to However, of increasing respond serve. we market. be we'll producers effectively see call best we which have confidence Marcellus, and Shales, Utica as very so attractive able supplies, on are this fortunate particularly in the to the an gas that And very to Haynesville the of

capital Ballymore the to this of advantages next for online. opportunities required new as And very we These have EBITDA the for like have the contract to of as begin growth. And as past, several will mentioned large really impactful in our unique and operating been for more years we this and competitive Taggart as come up large ramping relative expertise tranche in the continue early very existing prospect, is the projects new footprint some the and more low, well our Looking XXXX, deepwater the business to growth at for capacity. of Mexico, Gulf bringing exciting existing is fortunate developments.

teams, going we're versus growth excited see area incremental the the course, we the or lower, when with because for deepwater in regulatory kind gas this, work and great lower to systems the growth And that have a we also our of competitors, signals Gulf see causes our and And less as existing environmental really we're project this so, execution we're Brownfield risk to lot impact. thus, is of nature see of our by projects footprint. well. transmission the on see, advantaged Mexico. ahead going expanding The that of risk. of schedule. cost And natural to Capital across of expansions returns in remain And of

really through, teams. So work, impressive let these. few is by of execution me walk just a project our This

a as First of Transco has day day Southeastern million its of a into of XXX all, Trail total service, now capacity of million placed incremental November XXX X.

an this of in kind million but on And up addition people, by that, XX towards a to maybe So, early day year-end. slipped we've in-service in-service. possibly have working we been

XXX year-end, during day well day XXX be a final had placed XX on The of of will our placed of million a ahead be XXXX. in-service, So million service what million will we by expected. QX

to next of on Leidy even XXX great customer So, day great an we schedule, we expect Leidy Project, the South, million working of capacity and demand of our that work online there. the On South a impressive more to work the here teams due -- in day have a month. total be by on, by million XXX

then a needs, of businesses our original So important this and integration expectations providing the recognize meet provides gathering of PA gathering and ahead customer also the of The year us customer. because and area. additional Williams allowed for both and project customer out accelerated relationships Northeast is to of capacity unexpected full our across transmission this course, the value

projects well and for have months. forward is not regulatory look very we've energy regulatory to that this file are going mode, as FERC critical and process is here in next three milestone XXX% application achieved. the the today do that that a we Even commercial we survey permission front Obviously, access a yet the for on a in we both on project regional very and execution additional is expect

our take-or-pay and continues our PA work That can are contracts will well. that gas of that opportunities continuing to or have and XX confidence continue the great sustained really in years see are as for growth that of to see, of demand fairly along show Expectations transmission expansions we by another will drop that sizable business as truly demand there years for expand gas will the said on So, long-term before, and this area. project we've longer on drive be out great and growth Transco underwritten of going Northeast business you transmission our capacity need come. the growing be to expansion the to are gas the so serve lot to system customers a and

the XX% in greenhouse the became to a midstream near-term by emissions a XXXX, and August, We to announced XXXX. absolute sustainability net company a climate putting emissions, on from our goal On front, first reduction trajectory that of we company U.S. a issue commitment. XXXX positive by zero achieve company-wide would gas levels we carbon the be in

carbon invest We our will communities continue the and footprint stakeholders. meeting reduce stewardship clean to value energy of our in our environmental long-term while needs delivering to and

transmission and an to team in capture including our to natural opportunities Our to energy while including deployment entire investment exploring other fuels, efforts taking well-positioned But are emerging energy. across solar allocation compete emission these and and systems, and carbon opportunities manage opportunities scale opportunities, clear, of explore reduction extremely and will further footprint. alongside all capital natural gas, renewable established networks process. out across renewable on be bring opportunities, our we've internal our to hydrogen gas multiple aggregate solar focused near-term other carbon And higher like renewable

on clear towards clean here, steps future. So, proud meeting while midstream We a others space we energy to challenge to based goals in similar what energy hope we demand now. the to establish the are right for outlining can right reduce lead growing American-made

that steady So I'll intentionally in and we've built closing, a business predictable. is that reiterate

transmission serve flow advantage, and wide our Our natural-gas-focused cash gas strategy natural positions well growth, basins to scenarios. existing growth that and predictable low-cost demand we a us in position grow supply offers on us and of our capitalize infrastructure to provide continued range

that, the critical countries a of for reliable our to recognize entire ours I'll once as consumers' coworkers workforce Second, future, during will again I think of and we gas And healthy. tremendous that communities. continue industry. companies the the And no today our by and it political industry. the lower our in play take for keep of to up their because significant of see themselves I'm for want your open natural pursuit gas Often, granted energy to ensuring our gas, I'll been COVID-XX And our to Williams, this smoothly our of there about and service plays for cities emissions, cycle say our of on utility to renewable in we reductions the we provide just terms the employees with it our and while clean And Election that's U.S. debate to then Day. Thanks bills, the role of operations is at that of in in political natural remain future and keep world's the great efforts navigate to a investments provided running energy. of efforts delivery bullish continues nation recognize in finally, proud the in irrespective and COX operating to for extremely we also questions. great America's pandemic, reliability lot enhanced continue I of course, opportunities going the has natural we is extra their mile exception backdrop. that

Operator

Thank Jeremy go Instructions] first you. from [Operator Our Please JPMorgan. Tonet from comes question ahead.

open. is line Your

Jeremy Tonet

Hello. morning. Good

Alan Armstrong

morning, Good Jeremy.

Jeremy Tonet

I given remarks CapEx there. if any clarity land just how in had XXXX where you start on on you more I your just wondering off it know on allocation. a to itself. a buybacks. a might prepared CapEx XXXX But touched interplays capital to want within Trying this move could -- get feel and could to around timing project and could for bit any how level approach of potential potentially impact how that deleveraging your bit approach

Alan Armstrong

we Yes. a idea. Great Jeremy. guidance but we firmly laid out do pretty haven't Obviously, yet, good question, have that

than end these the think earlier finished is are I we one projects expected. helping things of on that that's being

So a this because is real that's capital as that year, And our has reduction of cost obviously, well. lot positive. come down a

market as just out been we've is coming a slow the the are The right signs And positive So budget. would now. seeing coming cost for say, construction that our that, seeing are projects in as gone result of for below really on bids we've a I bit in we our little bid.

would too I early pretty capital that being in somewhere is -- say to a range the that. budget about feeling this good saw that same now, year. manage to as what call little to a to So I able But think we right we're

So if I anything know, to capital. you on add the don't to Micheal, have that

Micheal Dunn

will in positive next cover regard say, free about I and overall would to just performance. be cash year will and opening we and remarks, dividend in of capital the talk our I all company our flow

As from our great we're seeing Alan contractors. said, bids

an Our executing expectations incredible continue job with we construction and projects where that doing to market teams achieving this on projects to And in of the high underbudget is have all our next performance year regard major year. our activity. are

Jeremy Tonet

and And helpful. very comments you a renewable know And you talked provided you That's energy about I interconnections installations. there. solar have on RNG of number

figure could big trying basket, opportunity the expand Just but renewables figure to you out dollar bigger set a little on on is. dig how trying how the there, that than for in it's bit front, to be you if big I more bread could CapEx a

Alan Armstrong

Yes.

that -- Chad? Chad Let Zamarin, who me opportunities group. emerging leading sorry, have is that

Chad Zamarin

think years, less pipeline opportunities near Thanks, in say And couple the next in RNG connected We I our we still space. term, early of a still project. projects. investment space, -- but million the we of that Yes. probably that see today than that just over capital in pretty in RNG Jeremy. days, $XXX announced it's modest I'd sixth good we've

we Those but XX investment would solar On one the decision, projects of installations. full million those yet around aren't million capital to have advanced through $XXX have projects Gate we constitute solar our to front, process. that investment $XXX what allocation in projects approved call

we to I And see kind over to we solution But so and also for those the part any our that process and projects I really up capabilities impactful part the we're as committed we months. would to will future of several continue gas you just our clean as regard. for the lot infrastructure company. the energy rest see, capabilities. the natural through is of sure think move of next and I a most we infrastructure energy. are making clean on, can ourselves And an spent very say, our respect view very building in And source with are being a mean focused the time talent of solutions and And energy of energy world. country of And

we'll in So that's to will we've hydrogen on and be and a to not team capital a part the of focused term, those is but be days, look I'd probably also well. up capture areas stood in very other a lot technologies. investment very carbon the But early continue of say solution now near that as

Jeremy Tonet

Got very there. it. stop That's Thanks. helpful. I’ll

Operator

Wells And you. Praneeth from our from Thank Satish comes Fargo. question next

open. is line Your

Praneeth Satish

Thanks. Good morning.

pipeline. so Your volumes Overland on Pass plan owned onto their partner that they wholly move their to

Just to you if still those And they wondering paid backfill there plan and what's if would not, get the move then try kind if volumes. of volumes.

Micheal Dunn

for anticipated we've on In of with them. volumes Bakken. the but Pass now the morning. place from volumes, This with Overland of that in take we've time with movement this I'll to taken our pay they've had some continue And in year Good their partner us the is partnership agreement pipeline construction Pipeline, Micheal. to regard our their that. those

us having we've in this additional year, so leaving anticipate this Colorado partner that we've Mountain on our that And the that Rocky backfilling that's of we've pipeline. in are volumes been entity do Midstream plans where expectation for from coming got volumes And our had. the coming We've from anticipated those some built an entity. into but and our we has volumes next that OPPL also

Praneeth Satish

on of appetite investments to landfills been What's and capture building Great. the all RNG out so or and consisted methane? of and have most your the And just laterals. the dairy far, invest tied think, -- then the farms facilities in to of or further front, that I actual process push renewables Okay. maybe upstream

Alan Armstrong

returns. where say I think can the highest we're advantage would Yes. the and biggest just to competitive going invest we generate we have

fairly that those few subsidies are bit financing on quite of have quite credits a backed them. of generally some low and by And projects and returns tax a

to we So that part focus of make can capital investments allocation front. a our going competes within the we're those return on where

investment have considerably aware, So with and that that. everyone space the the in sure as narrowed popularity I'm returns the around all is

where advantage the have competitive to areas better we to So we're strong going returns. stick really create to

Micheal Dunn

does RNG areas point, relatively would returns a I investing on familiar lot capable we're but attractive. most required us for towards point of think trading we're kind project, very the to to into opportunities. I small an processing just that make our footprint It's primarily those further Yes. bringing But infrastructure going focus of the upstream gas be I by-products. facilities just would those scale. RNG And say, we natural add, and we're where very of of sure is would market to of with. Alan's It's again, gas infrastructure and

John Chandler

Chandler. say taxpayer in we The is remain noncash is, projections. John a I'd our at thing through least XXXX last This

of it's for And tax tough value make so that. therefore, credits, to us

of to in those we've partners and tax got So take credits cases. find to many co-invest advantage

really more the -- So of us. don't returns as make some -- valuable things attractive are that upstream that the to aren't

Praneeth Satish

helpful. will I there. Thanks. stop That’s

Operator

Shneur next Our Instructions] question [Operator from comes from Gershuni UBS.

Shneur Gershuni

good on congrats new everyone Alan and Hi the role. morning

here Just off here. to start bit little a

the intimated You Overland year. wondering pluses walk be of remarks specific year for a offsetting wondering EBITDA can to this about sort higher you as us minuses of to versus seeing giving pluses expect underpins Pass the potentially support can next and us some more Haynesville? are through loss? number be just that without to year? what this of that direction of ledger volume in if higher the that in the above Just yet. sort and versus give you you was your year next earlier question the EBITDA you if minuses Is expectations Obviously, I prepared to, as the directionally, activity the view,

Alan Armstrong

I'll And the through kind go Shneur. laid back Sure, just there. of out Yes. notes I that

and as with good in continuing and grow about supply demand turning to be and within way out there and hanging First basins. some processing drawing on balanced, how serve hard basins look concentration. best basins. really itself the get you very it's our again. all, to demand if with is we starting favorable gas-focused we're going that's of basins are balance to lower-cost positioned serve, position for market without and situation that that. the gas for associated the decline I Obviously, a feel positioned gathering the mentioned, for those gas We Obviously, to at really in But --

there. had finally, Trail like of in-service And Secondly, some have Mexico $XX normally things produce non-cash John some growth not overcame we're to that the this downward as year. And one and the South projects well overcome year, will of deepwater that year early items, then, had of the transmission million year Mexico of of from Gulf Southeastern in so for course, this and we will drive some having number we've this that we then about, pressure the in Leidy XXXX. be impact of like tie-ins the this course, headwinds of in Gulf And revenues those year. higher next a of won't talked

the would and where the volumes about we really see terms we nice seeing the in So, in a of Northeast those but would primary good EBITDA here are really right earnings say, volumes but in way our flat from of fourth Northeast. didn't just in they drivers, quarter anything, we're XXXX, through growth And I if are feeling now. see the the some we're stay

are a we So it's and growth somehow producers we going to seeing have won't say that. a to because making hard is balance -- plans for itself, to lot some of see But somewhere, certainly that lot really for keeping built the we're market powerful our But relatively pretty growth early very have whole us pretty modest of and is EBITDA we there, in. costs our to really, modest growth growth. growth flat, and call with

are. our be next that people say, number there's that I and to mentioned not just would I across I anything get make all just quite business would certainly out a want ahead give to mean growth confidence But drive things us bit that I modest. don't a that our So we growth exciting of -- of really of happening year. where

Shneur Gershuni

and color. flow one the is about of after perfect of sense follow-up do makes question, announcing you the that maybe arrows next free it's dividends of a positive -- Buybacks appreciate And in in with everybody ranges talked So as really becoming authorizations. prepared sort being certainly all quiver, cash and late the year. a remarks, the that

that it's kind the Just wondering that it? the and target wondering, start target? the or on can the hitting already actually topic? about -- you're stock, Just thinking how Board buying around to back in actually something you sprinkling sooner that given Do hit exceed the you a start you're have you trajectory, authorize close, thoughts your than before is is leverage approaching target or of

Alan Armstrong

Yeah. can I a about we've disciplined I goal very just been I a on pretty I if something been as or that and disciplined. change to deliberate that is clear push And But think clear, stock collapse price this pretty like we No, and Obviously, say, be don't opportunistic. might waiver. continuing a that we've that see forward priority. would And anyway that right would us that, mind top there's just this very and saw say now Board, that foresee I goal. would anything

So a and you I might we tell did it I we across we're fundamental is would our what And on buybacks, sprinkling do just focus that now, three think would going to much. rating while agencies. see think the value right don't be down we really And is. getting it if all credit debt to be popular, And gaining in. targets that fundamental value those

Shneur Gershuni

Perfect. Thank that for and does you much, me, very it guys.

Operator

And from you. question Thank Salisbury Ann Jean next Bernstein. comes from

Your line is open.

Jean Ann Salisbury

usage gas gas see they did structures to contracts? meet demand there your aggressive at need an you gas still dramatically, peak compared to pipelines changing, pipelines utilities MVCs require but of utilities high In contract on morning. Good down currently availability all? scenario different if of how are and on goes types demand, renewables where And very adoption examples would

Alan Armstrong

a Ann, is time was that years, and any I got and our the markets. we And -- And the the seen bid that anything come in the could at all on The capacity year. had Jean just have on that say XX we term last highly we back, was would only Yeah. bid successful that valued. haven't capacity up we available distinguish this on last term was that. resembling that thing turned was

really so are need our compared our in see the would not or or low seeing are. cost a any what we're discount provide need So to discount rates to any alternatives markets, the because to avoided

is, our -- I always the see. compete pipeline. we bad But any don't regulated I hard But mean, the always think news can't that's capped. and really markets. news good from good is working I And really our best our say very Obviously, news news we with that So expand rate, pressure to to the on about rate. just with rate's The pricing there's not customers service. bad pricing those within in standpoint, that's we're the provide the the a the

not high And our the a so, you, the course, for degree of as in coal-fired have despite long being don't we're continue into despite we seeing demand system to a I market. renewables as we -- our services. expansions And are to capacity really the we're lot generation interjected generation, see not of utilization it. on of see lot the on going still issue, of our markets, talk just come down on tell would But the of this gas-fired

So don't to anything you'd that. Micheal, know if add I

Micheal Dunn

on anticipate the having think I of see were Transco on there, I peaking pipelines agreements. say would Alan. demand No, that, transmission to that have, and we on any to right negotiate you kind don't based we continuing other the we're

that opportunity what see then But year-round and for to are we for, an provide to that. for contracts, time, to absolutely continue there's us, our a that's if service point in that this desirable can pursue. rate peaking we'll Now charge a continuing pursue at long-term we'll demand customers is

John Chandler

renewables question for today. not power are the backing charge utilities the when backup happening up, the that's to derivation a they're power the interruptible resource. that independent renewables that start charging I of the developers -- going And think interesting coming interruption from an is,

Jean Ann Salisbury

is No, Yes. of possible now, And growth is well out of separate this And roughly? really it years to even kind helpful your much answer CapEx went that's Thank you. extremely to from connects, helpful. then then so valid. how year's and just XX-plus

John Chandler

little a year capital million. in spend total, you, Well, this total bit the tell going less million. Northeast south In from I $XXX to capital is probably $XXX can West, spending be for a than to it's standpoint, the

some a -- when And of expansion that work. processing and you and within is embedded maintenance So spending. combination that's capital

that's don't say well all now. I to capital, but it's want insignificant So connect fairly

Jean Ann Salisbury

helpful. much. that’s so John, Thank Great. you

Alan Armstrong

effectively are of Because these that sometimes -- single what that lot effectively areas they it's and Ann, producers -- a are to all providing to pads thing so like even well pretty the Jean there difficult larger. these that's well by Northeast, one well pipelines got we're got a you bringing laterals connect PA, call where XX-inch us. in by times, a the drilling might be to these be a used connect, big locations, a be into but pipeline out of building it's for into location

having to to what out over us producers actually large rather those pads on time fairly the we've those than keep continue we're them. to so the just connect drill we lines -- those individual seeing go And volumes see full and built wells, that

about to fuzzy, think system of A -- these the country. gas It's volume So it's gotten well lot a does very than are really in particularly of the something being large fuzzy Northeast with of these pads lot a more pads. gathering single of gotten pretty in delivering connect. parts

that in front. year that keep on less of easier place really million it's West. track than John fuzzy of that's West a in little connects mentioned, And the a So gotten are regard. as this probably in the to kind we But $XXX spent well

Jean Ann Salisbury

you Great. helpful. Thank so much. really That’s

Operator

And Cho Barclays. question Thank comes next Christine from our from you.

line is open. Your

Christine Cho

of and if are can spending from on Gulf say Haynesville, XXXX connects and or the I I in this differently. of Southeastern maybe ask change as some And Mexico Good South CapEx the months, pieces of Trail the the but CapEx you Transco of think on and cancellation program understand Maybe, a can right project morning. residual well couple can those materializing additional main I a next of Would now? stands small ACP, it year tiebacks. Leidy the question next little Northeast maybe some

Alan Armstrong

might that that, going for his notably there in deepwater crisper your Mexico. The in build-out -- thing Micheal's add one well of the the list is a probably got I'm head. the be Christine, But list Gulf I prospect to would the thing from little only to missing

project. so a sizable And that's pretty

And so pretty and canceling to that this -- remember, anybody for that's is were that they at about to for getting that's far probably point. reason, some cancel along reimbursable but if think

if... don't I Micheal, So know

Micheal Dunn

Access for us reimbursable pipe a was order that on Yes. the that for And the I substantial get customers will producer that that the me. with Energy and Regional our gating agreement on out that up time as and South full for be was year pipelines we for ordered Leidy that pretty project. sticking to have pipe have we'll based item Leidy mean, project South the order, well proceed to now the which for We so construction, notes for That's that's the one there, in construction our another on on South are and obviously, next restoration as, we in ramp that project, construction January. start will Leidy those underway. on one the

the of bulk there work some component moves with small South. Brownfield of pretty The that are a there. compressor the really Just Leidy stations on project

John Chandler

up. to of in filling systems we bit a as the And expansion just work maybe processing the and it's do Northeast other need one but thing, not we're may little sizable,

Christine Cho

it. Got

Micheal Dunn

up complex, well, construction we've we point -- A now. we've there as stopped TXPX Grove processing actually ramped and that Oak our back on

of on there idled work a And now, and accelerated above train Grove we had in that Oak there quarter we we've months first we're eight the online six and sometime that the being capacity construction lull 'XX. third where processing now had work. anticipate that of about So or we complex, at

Christine Cho

a don't the until Access. on Regional 'XX. online like think that Got came project just And Energy I it. clarification

So going next is spending be to really that there on much that year?

Micheal Dunn

be won't there Christine. Well,

in-service, projects will and of That's hand. too pretty it have But permits been is our it much Transco initiate but a about some right. year. we component You're those next spending on another spending XXXX in until uptick opportunities, expansion we've in careful

until XXXX. and really accelerate won't that right, you're So XXXX

Christine Cho

you as ways drive value, pay buybacks mentioned follow-up, additional then and the in investing And debt Alan, projects. it. mentioned to down, and a Got you stock different

Assuming better be use what thresholds for it buybacks you X.X to get flat would need clear projects to this a and the juncture? order BBB in any times in comfortably territory, return than are transfer of leverage of at capital to

Alan Armstrong

good Yes. a That's question.

we I value that's not further we'll for and reduction. market to we that debt how shareholder is much Obviously, stock to be there we debt there through reduction. judgment think, use how think obviously, something that's to determine think would how see on own there's going our have much line investor the around a value the best additional to bright and

markets be the price determine is like stock that until in to So projects. projects. what what the second in there's on you, that's what Transco the And Board's in effectively really systems we look. the would of the investment what profit to decision be the point and I in of what modernization of great would that all we the been in emission in return But know how then when price tell and is we look is be don't of that is that time, point for just really systems to benefit to the at good that And return terms reduction see have that it know terms to negotiating we at going that and the for confident of will there's 'XX. question. kinds just return shareholder would news rate-based debt make that value, set very answer piece will at stock I'm end that those of of assess the we've part that have when ability to reduction And process that. look And and get places would point threshold our what reduction to get very the that predetermine going point. opportunities. of the that. obviously, emission depend make those -- like the we We'll the a and good to And time, And we incremental

Christine Cho

Fair you. enough. Thank

Operator

from Thank you. question next comes Mizuho. And Moreen go our Please from Gabe ahead.

is line open. Your

Gabe Moreen

opportunities the it, There's two-pronged I also, question guys. some a in growth increases Hey, Wondering consolidation, significant that. I And if the better Appalachia. any assuming decide would go there's Northeast. if or from to holds been on mode? beyond, any impacts even customer had think, to forward from curve does modest CapEx or then call here, let's customers maintenance your there be

Alan Armstrong

Mike.

Micheal Dunn

a we Yes, are in I They're would their in a assets great into positive say, their completions a under and certainly really for buying is coming drilling an Appalachia is only that us. with the and on getting job doing Chevron cost operator. there EQT control there. partnership and admirable EQT on their

the opportunity volumes of there, additional bit. there have lot a able We to more to capital in be deploying not possibly to EQT drill with money deployment in regard bring

and XX% on us. think of us with Midstream. with there with Mountain acquisition, owning And midstream be assets upside just that's entity Laurel opportunity with us I that a there'll the partner So a great that for there

even already so. to looking them more that working we're built relationship so that forward we've with And

Gabe Moreen

the you Great. about side been yourself. done those lot portfolio sales, And consolidation on the still in XXXX? discussions follow-up, Do there? then think as of curious for thoughts talked your you there's asset things. Those happen ongoing? upstream perhaps a of of lot a clearly, past, Just In a shaping

Alan Armstrong

that. to certainly Yes, that's We're pursue question. a continue -- good we'll

takes our think and is stock well to very the is other. we them amount XXXX. do more they manage TBD. to we've what better way going opportunities having those is way through for along cash cash are this path fairly believe the our concerns we that the certainly really assets, we've G&P valuable. flow with cash the predictability West look continuing to the that that And But position valued free able generate valued seen in the think this are asset make bankruptcy that that think And tremendous price, one sure we that year, flows of to we exactly the free I these or flow, around for been within -- that

listed So rapidly, still -- some that certainly over of the working contracts the as Chesapeake lifting existed particularly any eroded really concerns bankruptcy the way haven't in to and the and in confident very the our yes, it. the on we our ability have with some been rejection we're those of concerns are value pretty as clouds around I preserve think that way And there.

Gabe Moreen

Great. Thanks, Alan.

Alan Armstrong

Thank you.

Operator

from next comes from Alex you. question And Wolfe Thank Research. our Kania

open. is line Your

Alex Kania

Thanks.

the comments maybe focused or latest on, U.S.-based the thoughts a or – kind or of put the in to in just have any you in guess, pun might from a Just room, a any today. I about of bad Trump But maybe statewide kind elephant races energy question, it just talk in particularly there the or reelection? policy any that are Biden on you're of elections terms shift a

Alan Armstrong

Yes.

continue -- As the feel matter. I energy And utilize in going world U.S. we to to at to be to I natural to mentioned less-polarized and we're the think gas decarbonize here sober, like use in around going a tool. my manner opening moment -- comments, in cost-effective that and both important that for a think a to it's is in a a cost-effective really renewables continue powerful be we tool

the about it get U.S. we the our -- decarbonization, the so And is is serious better more for business.

so if fuels, we just environment. serious But if get fossil business in that that's different And around decarbonization, extremely is the well-positioned really is our focus think eliminating a about story. we

We would rate, the an raise -- or assets, lower the back. more around lower corporate within to us get well -- of And a that of we rider probabilities, us actually, those a we back because on higher accept corporate was do and the we those because we to a have the level, to when would case that lower probably tactical a that had Biden if rate for administration lower. allow impact time positive corporate rates. Northwest tax last -- say, one would we within regulated I tax tax our be within the pipeline had be raise. to there Secondly, on -- think to And works to rate near-term our as rates those win would out would was a on Transco, I this had

process actually get rate works, the of cash the and taxes, those recover Now corporate course, to we're case tax but we that is. not way rate paying for whatever

companies So the really one -- in a we we in of think that and kind really the about see we role a of out coming play constructive after probably would that would few are get longer-term, think near going very term, can positive energy decarbonization, we serious see process. important if near-term And of we that.

Alex Kania

much. Great. Thanks very

Danilo Juvane

for time got we Cheryl? more Cheryl, one question.

Operator

And Morningstar. go from comes our ahead. from question Please Miller next Travis

Your open. line is

Travis Miller

question. when you'd of in kind you timing would to taking -- would started, from as was of to be projects? the to be my once of for what not projects a -- when the I Thanks hydrogen timing what's projects timing what So Good And wondering, on morning. the in-service? but take specific at? to types looking start, those terms you go follow-up those conversation, investment first

Alan Armstrong

is much us all, Hey, say, long-dated. and this for question, of joining the first very Travis. you just I it would morning. thanks thank for Yeah,

-- reduction. the a place that So we in opportunities, I the to carbon-based the another difference of serious And exactly fuel, about it's do at And think doesn't do of we second bring number burning to when to we're any important reduction or natural it's probably going make emission can the the scale we're to And that we terms that hydrogen but to in is emissions you separated, be hydrogen, whether think a blended none is if manner. gas degree do, utilization. looking of the in it's with opportunity it we're to hydrogen get looking whatever in same.

a into to emissions. to systems hydrogen ability blend of powerful our in is hydrogen here in tool existing And reduce the really accelerating so carbon the use

ability to generated ability going meet people certain I renewables think help via to energy agree excess power, pockets power our and good in so in to the And converting able that markets the over-investing most that that renewables demand. transmission tram be there's to take to we're renewable for both would via that which power be with the in and excess of chance relative a

will hydrogen, transport as both power to be that need systems think store our and you there that that think you've converted got to as powerful systems as And be the systems that in set transport So store ability to up, the well need now are into the excess the capital a once emerge there'll investment. into we that. And already generation, place, a with once that's you've way without about that. if existing be we've going incremental we to really converted

really push with hydrogen, in in to of the say, for where emissions areas a be big use would to help a tool well hydrogen, accelerate carbon both systems our of starting reducing as the technical our permitting I positioned we're there a or extremely and as and -- is on utilize political assets. tool Secondly, markets able to well those

not play we're in role And that infrastructure system way towards a so can not utilizing the just truly in waiting more And really but hydrogen a on it long one and market. gets road a the long that's we developments about excited can play in just project, and that. without novelty the we and development on us pilot capably

it. certainly intend we for lines. now opportunities how So, looking we'll along be right And go that's to those after

Travis Miller

that. options your the a above stock -- and follow-up into perhaps discussion. about, increase thought talked stays your some price about situation. element or back incremental that What's real What's buybacks capital the growth appreciate around quick and investment? foregoing you've the returns dividend thinking or stock here X% that just directing I of a around dividend then, instead great. of up capital Just to the That's if allocation And so. stays dividend thought the

Alan Armstrong

Yeah.

I in our as valuable. growth and say Board and a to decision reliability going our the cash certainly line predictability that's that. a think, from what keep we to we growth And in we up intend with do continuing company, do we dividend of match of the before, to But mentioned do I our to terms would standpoint growth. to we're And flow we've free growth. we flow capabilities think is expect cash flow continue the policy say Ultimately, cash in that have to the that. with

today, question. a alongside say is obviously we've to I as of we it's Board-level would that right But So modest, cash a which the would continue business that. sit talked decision. we've here just and grow now, it in about expect got growth that's degree to we great the flow

that's expectation be the on. of should So I kind the think

Travis Miller

Okay, great. Appreciate that.

Alan Armstrong

Thank you.

Danilo Juvane

Cheryl, please. the call, wrap-up ready to we're

Operator

today. you. remarks. turn Alan closing Armstrong concludes Q&A That back the I'll call to Thank our for for

Alan Armstrong

to in -- for are stand prove Well, joining able thanks, to We headwinds, continuing I the Cheryl. really continuing continue predictable is these great up with of you, a in interest flows lot really everybody, all forward us. excited Thank to and see the to business to And company, looking grow. today. out way and the to external the cash be questions our appreciate

So have a nice you. day. Thank

Operator

ladies you concludes us, and Thank may call, you for gentlemen. and joining now This our disconnect.

The Williams Companies, Inc. (WMB) 3 Nov 202020 Q3 Earnings call transcript