Williams Companies, Inc. (The)

Good day, everyone, and welcome to the Williams First Quarter 2023 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 Giovanni, Vice President of Investor Relations and ESG. Please go ahead.

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

Thanks, Danilo, and thank you all for joining us today. Our natural gas focus strategy continues to deliver steady, predictable growth, and this past year was no exception, sorry, this past quarter was no exception with our adjusted EBITDA up nearly 20% compared to the first quarter of 22. And let me remind you that last year was a record year for growth as well when we were up 14% on an annual basis. So really a big quarter for us on a tough comp. We saw strong performance across all key financial metrics in the first quarter and set new records in our key operational stats as well. once again demonstrating our business's resiliency through commodity price swings. But beyond this obvious financial performance in the headlines, please don't miss the importance of the accomplishments in this past quarter that will serve to produce growth in 24 and beyond. So let me start out here on slide two by highlighting a few of these accomplishments that will continue to drive what has now been over 10 years of consistent year-over-year EBITDA growth. First, we closed the acquisition of the Mountain West natural gas transmission and storage business well ahead of our expectations. This acquisition enhances our position in the western U.S. and expands our services to key Rockies markets. We're really happy with how the integration of Mountain West into Williams has been progressing since we closed in February. And, in fact, we're already seeing several expansion opportunities that were not in our pro forma. proving this asset is best positioned to be optimized within the Williams platform. Our team also accelerated the timing on key deliverables for several other fixed fee-based projects that are all supported by long-term contracts. This includes our Louisiana Energy Gateway project, Transco's Southeast Energy Connector, and Transco's Regional Energy Access project. In fact, project execution is now in full swing on both Regional Energy Access and Louisiana Energy Gateway. And as a result of the quick action by the FERC and our construction teams, we now expect to bring approximately half of this Regional Energy Access capacity into service ahead of schedule and actually in the fourth quarter of this year. So that will be just in time to meet growing demand in the Northeast region ahead of the winter heating season. Of course, this will also provide new market for producers on our Northeast Pennsylvania gathering systems, which, of course, is incremental to the returns on a project like that. We also executed several key agreements with Chevron to facilitate natural gas production growth in the Haynesville and the Deepwater Gulf of Mexico. As part of those agreements, we gained a large dedication to our recently acquired trace gathering system and a long-term capacity commitment commitment on our Louisiana Energy Gateway project. This is a great example of Williams and Chevron working together to connect prolific domestic resources to expanding LNG export markets. We also placed several large-scale gathering expansions into service this quarter. The Marcellus South gathering expansion in southwest Appalachia increased our capacity by 100 million cubic feet per day for rich gas supplies in this area. And significant progress was also made on our build out of the new and fully contracted capacity on our Susquehanna County Gathering System in Northeast PA. We also added 100 million cubic feet per day of capacity this quarter as part of the second phase of our Haynesville Spring Ridge expansion. And we saw first flow for the Taggart expansion project in the Deepwater Gulf of Mexico. across our Devils Tower platform. Importantly, this is the first of five significant expansion projects that are expected to come online over the next two years and that will ultimately double our Gulf of Mexico earnings contributions. Finally, I'll add that we're moving forward on a number of projects in our backlog and our visibility to growth on the transmission side of the business is as good as we have seen it. From a financial perspective, the strength of our assets across all areas is reflected in our solid first quarter results, and in fact, our base business produced record contracted transmission capacity and record gathering volumes, even after we exclude the contributions from acquisitions. The one underperforming area was in NGL processing margins, but more about this in a moment. Importantly, this was a quarter in which we saw sequent fully optimized assets in our base business, underscoring the balance and improved commercial competencies that the sequent acquisition has delivered for the benefit of our natural gas strategy. So, for example, in the northeast, we benefited from record gathering volumes and significantly outperformed the broader Marcellus production trends as Sequent provided takeaway markets uniquely for our producing customers in Ohio. In the transmission in Gulf of Mexico segment, we realized higher short-term firm sales on our pipes as Sequent helped to commercialize more business in that area as well. And now, back to the big variance in our processing margins. In the West, our NGO processing margins on the Legacy Williams business were actually negative due to abnormally high natural gas prices at OPAL and really throughout everything west of OPAL. Normally, this would have shown up as a significant negative issue for the quarter. However, Sequent was able to capitalize on these large natural gas basis spreads in the west and more than offset the negative NGL margins, turning this volatility into a net positive for Williams. Our acquisitions continue to deliver as expected, proving that our capital allocation strategy to fund these transactions with excess sequent and EMP cash flows is setting us up for continued reliable and predictable earnings growth. I'd also note that as the market continues to underappreciate and undervalue the strength and resilience of our business, we stand ready to utilize our repurchase program as we did during this first quarter. So overall, a great quarter that has us set up for growth in 24 and beyond. And with that, John will walk us through the financial metrics for the quarter. John? Thanks, Alan.