Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2025 was reported at $2.4 billion, with distributable cash flow (DCF) of $1.9 billion, providing 1.6 times coverage [6][20] - Net income attributable to common unitholders remained stable at $1.4 billion for both Q2 2025 and Q2 2024, while net income per common unit increased by 3% to $0.66 [16][17] - Distributable cash flow increased by $127 million or 7% compared to the previous year, primarily due to lower sustaining capital expenditures [17][20] Business Line Data and Key Metrics Changes - The company set five volumetric records, processing 7.8 billion cubic feet of natural gas per day and transporting over 1 million barrels per day of refined products and petrochemicals [6][7] - The Neches River Terminal began operations with an initial capacity to load 120,000 barrels of ethane per day, expected to increase to 360,000 barrels per day with future expansions [9][15] Market Data and Key Metrics Changes - Export volumes rose by 5 million barrels quarter-over-quarter, but gross operating margin declined by $37 million due to market pricing and a 60% drop in spot rates [12] - The company noted that spot terminal fees for LPG exports have significantly decreased from $0.10 to $0.15 per gallon to lower levels [12] Company Strategy and Development Direction - The company is focused on organic growth projects worth nearly $6 billion, including new gas processing plants in the Permian [7][8] - The competitive landscape for LPG exports is becoming increasingly challenging, with new midstream companies entering the market [11][13] - The company aims to leverage its existing infrastructure to maintain competitive advantages and meet customer needs through brownfield expansions [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic and geopolitical challenges, emphasizing the importance of U.S. energy exports [10][11] - The management team believes that the demand for U.S. ethane and ethylene remains strong in Asia and Europe, despite recent market pressures [13][14] - The company anticipates continued profitability in the Permian Basin, with producers maintaining their guidance despite market fluctuations [40][42] Other Important Information - The company declared a distribution of $0.545 per common unit for Q2 2025, a 3.8% increase from the previous year [18] - Total capital investments for 2025 were reported at $1.3 billion, with growth capital expenditures expected to remain in the range of $4 to $4.5 billion for 2025 [19][20] Q&A Session Summary Question: Ramp-up of new assets in the second half of 2025 - Management indicated that the new processing plants are expected to ramp up quickly, with high utilization rates anticipated [23][24][26] Question: Capital allocation and buyback strategy - The company plans to continue opportunistic buybacks, with expectations of increased free cash flow in 2026 [28][30] Question: LPG export fees and market dynamics - Management confirmed that they are 85-90% contracted for LPG exports through the end of the decade, indicating that significant margin compression challenges are likely over [73] Question: Outlook for PDH and refined product services - Operating rates for PDH have improved, but management noted that they have not yet met expectations [49] Question: Impact of potential LNG projects on Haynesville Shale - The company is optimistic about the Acadian gas system and expects to benefit from increased activity in the Haynesville [68][69] Question: Strategic importance of growth backlog - Management emphasized the importance of maintaining a robust growth backlog to attract equity investment and support future capital allocation decisions [89][90]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2025 was reported at $2.4 billion, with distributable cash flow (DCF) providing 1.6 times coverage and retaining $740 million of DCF [5][15][18] - Net income attributable to common unitholders remained stable at $1.4 billion for both Q2 2025 and Q2 2024, while net income per common unit increased by 3% to $0.66 [14][15] - Distributable cash flow increased by $127 million or 7% to $1.9 billion for Q2 2025, primarily due to lower sustaining capital expenditures compared to the previous year [15][17] Business Line Data and Key Metrics Changes - The company set five volumetric records, processing 7.8 billion cubic feet of natural gas per day and transporting over 1 million barrels per day of refined products and petrochemicals [5][6] - The Neches River Terminal began operations with an initial capacity to load 120,000 barrels of ethane per day, expected to reach full operational capacity in the first half of 2026 [7] Market Data and Key Metrics Changes - Export volumes rose by 5 million barrels quarter-over-quarter, but gross operating margin declined by $37 million due to market pricing and a 60% drop in spot rates [10][11] - The company noted a shift in the LPG export market, with spot terminal fees previously ranging from $0.10 to $0.15 per gallon, now facing increased competition [9][10] Company Strategy and Development Direction - The company is focused on organic growth projects worth nearly $6 billion, including gas processing plants in the Permian [6][12] - The competitive advantage lies in existing export infrastructure, allowing the company to meet customer needs through brownfield expansions [12][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic and geopolitical challenges but expressed confidence in the company's positioning to succeed despite these headwinds [5][8] - The management highlighted the importance of energy and global trade, indicating potential future challenges due to competitive pressures in the LPG export market [9][12] Other Important Information - The company declared a distribution of $0.545 per common unit for Q2 2025, a 3.8% increase from the previous year [16] - Total capital investments for 2025 were reported at $1.3 billion, with growth capital expenditures expected to remain unchanged at $4 to $4.5 billion for 2025 [17][18] Q&A Session Summary Question: How should we think about the ramp-up of $6 billion of assets coming online in the second half of 2025? - Management indicated that processing plants are expected to ramp up quickly, with high utilization rates anticipated [21][23][25] Question: Will the buyback program increase in anticipation of 2026 being a lean year? - Management confirmed that they are being opportunistic with buybacks and expect larger opportunities in 2026 as free cash flow increases [27][29] Question: How do you see the LPG export market evolving? - Management stated that they are 85-90% contracted through the end of the decade and will defend their market position [32][74] Question: What are the lessons learned from the BIS ethane incident during Q2? - Management noted that while they were largely unscathed, the incident compromised the U.S. brand for reliable supply and energy security [45][46] Question: How do you view the outlook for PDH and octane enhancement? - Operating rates for PDHs have improved, but management is still not satisfied with performance, while octane enhancement margins have normalized but remain healthy [48][49]