Good day and welcome to the Energy Transfer Third Quarter 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Tom Long, CEO. Please go ahead.

Thank you, operator.

Good morning, everyone, and welcome to the Energy Transfer Third Quarter 2026 Earnings Call. I'm joined today by Mackie McCree, Dylan Bramhall, and other members of the senior management team. who are here to help answer your questions after our prepared remarks. Hopefully you saw the press release we issued earlier this morning. As a reminder, our earnings release contains an update to guidance and a thorough MD&A that goes through the segment results. We encourage everyone to review the release and slides on our website for full understanding of the quarter and our growth opportunities. We will be making forward-looking statements within the meaning of Section 21E of the Security Exchange Act of 1934. These statements are based upon our current beliefs as well as certain assumptions and information currently available to us and are discussed in more detail in our Form 10Q for the quarter ended September 30, 2026, which we expect to file later this week. I'll also refer to adjusted EBITDA and distributable cash flow or DCF, both of which are non-GAAP Financial Measures. You'll find a reconciliation of our non-GAAP measures on our website. Let's start today by going over our financial results for the third quarter of 2026. We generated adjusted EBITDA of approximately $5 billion compared to approximately $3.8 billion for the third quarter of last year. DCF attributable to the partners of ET as adjusted was approximately $2.5 billion Compare it to approximately $1.9 billion for the third quarter of 2025. Strong performances across all our business segments supported these results, including record intrastate transportation volumes following Hugh Branson Phase 1 entering into service and record midstream gathering volumes. And for the first nine months of 2026, we spent approximately $3.9 billion on organic growth capital, excluding sun and USA compression CapEx. Turning to our 2026 adjusted EBITDA guidance, for the third consecutive quarter, we captured meaningful upside from market volatility reflecting the quality of our diversified asset footprint. As a result, we expect our full year adjusted EBITDA to range between $19.7 billion and $19.9 billion, which is up approximately $850 million at the midpoint compared to our guidance range provided on our last quarter's A revised 2026 guidance reflected outperformance in the base business and the benefit of approximately $285 million of previously disputed natural gas purchases with a downstream customer recognized in the fourth quarter of this year. We have not included any benefit from the Figueroa acquisition, which is expected to close in the mid-fourth quarter of this year. Now turning to organic growth capital guidance, we expect our 2026 organic growth capital to be between $5.4 billion and $5.6 billion, excluding Sun and USAC. As we advance certain projects toward FID and refine the timing of others, we currently expect 2027 growth capex to be approximately $7 billion. We will provide formal growth capital guidance on our next quarter's call. The majority of these growth projects are contracted under long-term commitments and are expected to generate mid-teen returns, resulting in considerable earnings growth over the next decade plus. Now let's turn to our results by segment for the third quarter, and I'll start with NGL and refined products. Adjusted EBITDA was approximately $1.2 billion compared to approximately $1.1 billion for the third quarter of 2025. These results were driven by increased exports out of our Nederland and Marcus Hook terminals, as well as higher throughput at our Montbell defractionators. Results for the third quarter also included an increase of approximately $177 million in marketing margin from favorable market conditions, including increased premiums on both domestic and export sales of NGLs and higher volatility. Approximately $100 million of this gain is expected to be offset over the next two quarters as the derivative losses are realized. For midstream, adjusted EBITDA was approximately $864 million compared to approximately $751 million for the third quarter of 2025. This was primarily driven by record volumes in the Permian Basin, which increased approximately 8% as a result of new plants being placed into service and improve plant utilization as well as volume growth in several other regions. In addition, we saw an approximately $70 million increase due to higher NGL and natural gas prices compared to last year. For our crude oil segment, adjusted EBITDA was approximately $871 million compared to approximately $746 million for the third quarter of 2025. During the quarter, We saw continued growth across several of our crude oil pipelines and gathering systems. These results also included an increase related to favorable market conditions, primarily stronger spreads and increased volatility. Approximately $100 million of this gain is expected to be offset in the fourth quarter as the derivative losses are realized. In our interstate natural gas segment, adjusted EBITDA was approximately $500 million compared to approximately $431 million for the third quarter of 2025. The primary driver of these results was higher contracted volumes and utilization on several of our pipelines, including Transwestern, Rover, Panhandle Eastern, and Florida Gas Transmission. And for our intrastate natural gas segment, adjusted EBITDA was approximately $346 million compared to approximately $230 million in the third quarter of 2025. This was primarily due to an increase of approximately $82 million of gross margin as volumes continue to ramp up on phase one of the Hugh Brinson pipeline. The $82 million is inclusive of optimization volumes that flowed on the pipeline during the quarter. We recently announced plans to acquire Vaccaro Midstream for approximately $2.625 billion in cash and ET common units. The acquisition is expected to be immediately accreted to distributable cash flow per common unit and represents an approximately 8.5 times multiple on 2027 estimated EBITDA. We anticipate this drops to below seven times by 2029 as we increase utilization of existing processing capacity. The Procaro assets include approximately 300 miles of pipeline in Loving, Reese, Ward, and Winkler counties, as well as three natural gas processing plants with a total capacity of approximately 675 million cubic feet per day. The acquisition will expand and enhance Energy Transfer's integrated natural gas gathering and processing network and add additional volumes to our downstream natural gas and NGL infrastructure. Thank you for joining us. Phase 1 of the Hugh Brinson pipeline is in service with a capacity of 1.5 BCF per day. We expect Phase 2, which includes additional downstream compression, to be in service in the first quarter of 2027, increasing the expected capacity to over 2.3 BCF per day. The full project is still expected to come in under budget. We continue to see interest from customers seeking to increase commitments and new customers looking for Permian egress. On the last call, we announced an agreement with Crusoe to construct natural gas supply facilities supporting its previously announced 900 megawatt expansion at its AI factory campus in Abilene, Texas. In furtherance of this agreement, we have now executed a 250,000 MMBTUs per day, 10-year firm transportation agreement with an A-rated hyperscaler. Next, we're making good progress on our Desert Southwest Pipeline project. We expect to file the formal certificate application with FERC in the fourth quarter. We continue to see interest in contracting additional volumes on the pipe, which includes multiple electric utilities. Our teams remain engaged with key stakeholders along the pipeline route. Last quarter, we announced TransWestern's Springerville Lateral This quarter, we added the construction of the Cholla Lateral project, an approximately 30-mile, 20-inch pipeline with an expected capacity of approximately 100,000 MCF per day that will extend south from ET's existing transwestern pipeline to a local utility. The new lateral will enable the conversion of a coal-fired power plant to a natural gas service and is expected to be in service in the first quarter of 2029. Growth capital associated with this project is expected to be fully reimbursable. To support the growing markets in the southeastern U.S. earlier this month, we reached positive FID on the 215-mile South Mississippi Pipeline project, which will extend from a connection near the Perryville Hub to an interconnect on the FGT Pipeline in southern Mississippi. We have secured long-term 20-year demand-based firm transportation agreements to support construction of a 36-inch pipeline with a capacity of approximately 1.2 BCF per day at an expected cost of approximately $1.6 billion. Energy Transfer will likely be a 51% owner and operator of this project with the remaining ownership coming from shippers or their affiliates. A binding open season is currently underway to solicit additional customer commitments. We are discussing and in some cases negotiating with multiple shippers. Final pipeline sizing and capacity will be determined after the open season. This project, which is expected to be in service in 2030, will give shippers crater access to natural gas from multiple U.S. producing basins to markets in the rapidly growing southeastern United States. And in the northeast, on our rover pipeline system, We recently completed the addition of compression and metering facilities to support a 15-year transportation agreement with a Marcellus producer. The agreement, which added 250,000 MMBTUs per day of firm natural gas volumes to the pipeline system, began November the 1st. Looking at new power plant connections in Oklahoma, the first three connections serving new power plant loads are in service and we expect the fourth to be in service in the fourth quarter of 2028. We recently executed an agreement to provide natural gas service to a fifth power plant in Oklahoma. In total, these will provide approximately 400,000 MCF per day of new demand growth. In addition, we are in negotiations to serve another approximately 100,000 MCF per day of new power plant demand in Oklahoma. And in Missouri, We have executed two agreements to provide a total of approximately 150,000 MCF per day of firm natural gas transportation service from our Mississippi River transmission pipeline to two new power plants being constructed. To support these agreements, we will add pipeline and metering facilities. Growth capital associated with the construction of these facilities will be fully reimbursed and the agreements are expected to become Effective in late 2027 and mid-2028. Since the beginning of 2025, we have executed over 9.5 million MMBTUs per day of agreements with demand pool customers, including hyperscalers, data centers, and power plants to provide volumes associated with our natural gas business throughout Texas, Oklahoma, Arkansas, Louisiana, Ohio, Illinois, and many other states along our pipeline network. We're in advanced negotiations to provide customers with significant additional volumes along our pipeline network and remain confident in our ability to reach FID on many more such opportunities. Now looking at our Permian processing expansions, we placed the Mustang Draw 2 plan into service in October and expect the volumes to ramp up through the first half of next year. We also recently reached positive FID on BEAR II, a 200,000 MCF per day cryogenic processing plant in the Delaware Basin adjacent to our existing BEAR processing plant. BEAR II is expected to cost approximately $225 million and be in service in the third quarter of 2027. Now looking at our growth opportunities for our liquids business, as a result of the significant growth in the Permian as well as the Ficaro acquisition, we reached positive FID on our 10th fractionator at Mont Bellevue. Fract 10 is expected to have a capacity of 200,000 barrels per day and be in service in the first half of 2029, which will bring our total capacity at Mont Bellevue to approximately 1.6 million barrels per day. In addition, we expect volumes on Fract 9 to ramp up quickly after its anticipated completion later this year. and at our Needland terminal, we previously announced a 240,000 barrel per day ethane export expansion to meet additional customer demand. We have since elected to upsize this to approximately 300,000 barrels per day, which will be achieved through optimization of our Mont Bellevue to Needland pipeline corridor. This project will also provide an additional 55,000 barrels per day of LPG capacity and two additional NGL Ship Docks. We still expect the project to be placed in service in stages beginning in 2028 with the docks expected in mid-2029. At Marcus Hook, the ethane expansion project is on schedule for anticipated completion in the second half of 2027. This is now expected to increase our ethane export capacity from the terminal to approximately 100,000 barrels per day. We have executed agreements with existing customers to offtake approximately 75% of this capacity for terms extending out through late 2030s and early 2040s. Growing NGL demand across India, South Korea, China, and Europe supports continued growth at our Nederland and Marcus Hook export terminals. Our strong base business performance and volume growth within each of our segments, along with a third straight quarter of significant upside from market volatility, drove solid earnings results. Phase 1 of Hugh Brinson Pipeline began contributing in a meaningful way during the third quarter, and this contribution will increase as we bring on Phase 2. In addition, Mustang Draw 2 is also now up and running. Fract 9 is expected to go into service later this year. and the pending Vaccaro acquisition with that to our Delaware Basin footprint is expected to be immediately accreted DCF per unit upon its closing later this year. Looking ahead, the growing demand from power generation and NGL markets continue to create new growth opportunities evidenced by our newly announced expansions to our processing capacity in the Permian, our natural gas pipeline business expansion and the upsize to our planned ethane export expansion project. With a large slate of growth projects under construction plus the newly announced projects, we continue to be very well positioned for growth in 2027 and beyond. We remain focused on capital discipline as well as project execution and completing these projects safely on time and on budget. In summary, the quality and connectivity of our assets give us a clear line of sight to growth From the wellhead to the export dock, our integrated system lets us serve every major supply basin and every major demand center, and we believe this is a unique and stable competitive advantage. This concludes our prepared remarks. Operator, please open the lineup for our first question.

We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, Please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Teresa Chen with Barclays. Please go ahead.

Good morning and thank you for taking my questions. First, I'd like to dive deeper into the South Mississippi project in light of today's FID. Given recent commercial progress for transmission expansions to support the rising power load across the southeast, can you elaborate on the addressable demand underpinning this project? Any downstream implications? And more broadly, how will the South Mississippi project strategically enhance your natural gas footprint?

Good morning, Teresa. This is Mackie. What a great opening question because I think this project shows the power and the ability of energy transfer to perform like no others. And the reason I say that is what South Mississippi does for us, it connects all of our pipelines that come into the Perryville area down to FGT, which continues to grow. And what it gives the markets, the shippers, the opportunity to do is to reach out to all the bases. With the uncertainty in the future of where prices will go and where volumes will go, some of our customers on this project alone are reaching out to the Permian Basin, Haynesville, and even up in the Marcellus Utica. They've taken long-term space out of there. So it really shows what we can do for customers throughout the U.S., but especially in the Southeast. We're very excited about that project. And to elaborate a little deeper on your question, we continue to see constant growth in the southeast especially Florida and other areas and so we're in the middle of phase nine as everybody knows we're working on phase 10 we already have customers we're talking to but one thing that really isn't very evident that we have tremendous capability by when we connect this pipeline to Florida to move large volumes backhaul into the heart of Louisiana and as everybody knows there's a lot of Thank you so much for that detailed answer, Mackie.

Looking at your current growth capex in the mid-fives this year and then stepping up to about $7 billion next year, plus a significant amount of projects under development from here, how are you thinking about the magnitude of run rate capex over the next few years beyond 2027?

Teresa, this is Dylan. Thanks for the question there. I think as we look out, 2027 right now looks to be one of our larger years definitely we've had in the past. And as we look out further, it's probably expected that we're going to be north of $5 billion in that area for the next several years here with this great backlog we have. But I think 2027 definitely looks like probably the high watermark as we see it right now.

Thank you. The next question is from Jeremy Tonnet with JP Morgan. Please go ahead.

Hi, good morning.

Good morning. Morning, Jeremy. Just wanted to look forward into 27 a little bit here. 26 enjoyed a lot of nice tailwinds across a number of the business lines. But when we think about, I guess, you know, the 27, how do you see those, I guess, continuing? Do you still expect some of those tailwinds to be as strong, or how should we think about that, you know, particularly as it relates to when you introduce the 27 guidance?

Yes, I can start, and Dylan or Adam can add on to it. As Tom explained in the opening remarks, all these projects that we're building are so exciting to bring on. and one of the reasons are other than long projects take years a lot of these projects are coming on as we speak this year as we've talked about and throughout 27 with FRAC 9 ramping up with our cryos ramping up another cryo coming on in the third quarter of next year is that these projects are filling up quickly the demand for our products and what we do especially natural gases can continue to grow exponentially and we're trying to stay ahead of that with these projects so that'll be a A lot of the driver behind this is how quickly volumes bring value to these assets as we complete them.

Yeah, just to talk about this year relative to next year a little bit, we don't have front-run guidance here, but if you recall, when we start out the year, we talk about the optimization opportunities we have. We generally have a couple hundred, two to four hundred million in our plan as we go into the year, and Generally, we have outperformed that. I think if you look historically, that number is probably more than 600 to 700 million range a year. But we don't always know exactly where it's coming from. We have an asset base and a group of dedicated employees that are set up to optimize around these situations. And this year has presented more opportunities than most. We're looking at something probably closer to a billion five across this year. So when we come out with our guidance, you know we will we'll take all this into account and and more to come on that.

Got it that's helpful thank you for that and then you know maybe just coming back to the natural gas logistics side some new you know developments there and if I just take a step back and I think about you know new power demand I was wondering if you might be able to just you know frame for us how you think of the opportunity set going forward you know be it CapEx and how much EBITDA that could generate or any parameters, I guess, as far as you see opportunities set in front of you right now for more natural gas logistics projects.

Adrian, this is Mackie again. Yeah, I think it's pretty evident when you look at our pipeline network throughout the country how well positioned we are. We've made a lot of announcements, working on a lot of other projects to deliver gas to power plants, and were so extremely well positioned. And then you look at how we have the capability, as I mentioned earlier, to move volumes from different basins to different markets. A great example of the benefit of that is, of course, South Mississippi, but also Hugh Brinson. And that project is built, was built to move large volumes out of the Permian Basin East. And now we're seeing a growing demand to move volumes out of the Carthage, Katy area, deeper in Texas and a backhaul basis through Hugh Brinson so there's just so much upside and then when you look at because of how well positioned we are and where a lot of these power plants and a lot of these power plants that are back in data centers where they're located are immaterial from the standpoint of capital to get to them these are in many cases two three four miles away maybe 18 miles away so low capital to benefit from existing assets existing capacity I mean on our assets especially in a backhaul basis a little bit down the road here the next two or three years with all these power plants being built in Texas and throughout the country with LNG taken off there's on any given day molecules will be moving multiple directions through our pipelines we'll be charging for all those different directions but in effect a lot of being consumed of where it's being delivered and consumed of where we receive it so our vast intrastate and intrastate pipeline network is going to create a lot of potential upside in the future.

Got it. Thank you for that.

The next question is from Keith Stanley with Wolf Research. Please go ahead.

Hi. Good morning. Wanted to follow up on the South Mississippi project connectivity. So assuming this would pull some gas off Tiger or Gulf Run, How full are those pipelines today, and do you think you'd need to expand them or other assets to accommodate the project? Just wondering holistically if this is going to drive other opportunities upstream of the South Mississippi project.

Yeah, the answer to that, Keith, is absolutely it'll drive other upstream opportunities. As I mentioned, we've... One of the contracts that's supporting South Mississippi has signed a long-term deal starting in 29 for capacity out of the Marcellus Utica down our Panhandle trunk line. We have more capacity. All of our assets we can always loop or add compression if necessary, but right now we have plenty of capacity in our existing system to move gas out of Texas, out of Oklahoma, into the Perryville area. And we also have the ability, of course, to extend further upstream to The Permian Basin as well. So certainly those will bring other opportunities, but we already are so well positioned with the capacity we have today to provide transportation services to feed that new project.

Great. Thanks for that. Second one, Dylan, I wanted to follow up on the The billion and a half of optimization benefits for this year versus the 200 to 400 million kind of baseline. Is that excess earnings purely spread and volatility benefits or is the billion and a half dollars also including benefiting simply from higher commodity prices that could very well continue into next year at this point?

Yeah, Keith, it's all the above there. And it really crosses every segment. We're sitting here taking a look. I'm staring down at my sheet here. We're looking at just the drivers from the increase in guidance from last quarter to this quarter. And it is every single segment in our business that's up. And it's the higher prices, it's the spreads, it's the volatility. It's also just additional volumes across assets too that are driven by some of the global volatility that we're seeing. So It's really, it's a lot of great tailwinds right now, and I think you're correct. Some of this could very well extend into 2027.

And Keith, hey, this is Adam. Just one thing I'd add to that and point out is while we've certainly benefited from that volatility continue, there's also definitely an underlying pull globally. You know, we recently were on a trip here to Asia and heard, you know, firsthand that We have been the stable source of supply in this storm that's happened globally. And so we expect that business and that pool to continue and support the assets for longer at higher rates.

Thanks very much.

The next question is from Julian Dumlin-Smith with Jefferies. Please go ahead.

Hey, good morning, guys. Thanks for the time. I appreciate it. Maybe just following up a little bit on the South Mississippi Focus, Mackie, can you talk a little bit about what's going on with Entergy? I mean, they obviously made sort of a parallel announcement yesterday. Can you perhaps maybe tether those two together in as much as folks are trying to triangulate how you think about this? And then more to the point, how do you think about the opportunity above and beyond what you're seeing here? And as much as if you read the line with Entergy, they seem to be talking about even more here. if you will, and ultimately what this means for a 42-inch configuration.

Yeah, you bet, Dylan. Yeah, first of all, probably won't talk about specific customers. As you know, we've done a huge deal with Entergy up in North Louisiana to provide transportation service off of Tiger for a facility up there, a power plant up there, and we continue to be in conversation with them everywhere where we can provide services to them, but when it's talked specifically about them on this project. However, as I mentioned earlier, this project is so significant to our partnership because the growing demand along the Gulf Coast is exponential. And with our ability to move more volumes east, down South Mississippi and east through Florida Gas, as I mentioned earlier, it's a really important point. We have the ability to backhaul two BCF from South Mississippi deep into Louisiana to markets that are growing markets that are there today and significant markets that are planned and actually being developed as we speak. So South Mississippi is going to be a great conduit to help other projects downstream and other markets downstream on FGT.

Awesome. Excellent. Thank you very much. And maybe just getting a little bit more into the numbers here, maybe more of Dylan. Obviously, you raised the guidance meaningfully here, $900 million, pretty solid. Can you speak a little bit more to the drivers? Obviously, there's a few different pieces here. You've got marketing earnings in third quarter that waned a little bit, but how do you think about the guide up being tied more to the first half of this year? Obviously, there's a Caro in there, but how do you think about the stacked pieces here, if you will?

I'll focus on really what we're seeing here and then the drive up from the last call to this call here. and like I said earlier, it's every segment. So midstream, we've seen not just higher commodity prices, it's better operational performance, it's better runtime in the Permian which has resulted in more efficient operations and more volumes through our facilities. It's the crude segment where we've benefited not just from the increased volatility in the spreads but also from additional volume across our assets. NGL has been a great performer here, similar to crude, The better volatility, better spreads, more volume, still seeing great demand across the docks for our products and strong rates there. The intrastate pipelines, we've got Hugh Brinson online right now, and this segment will also benefit from the resolution of the dispute with the customer that we're going to recognize here in the fourth quarter. Inter and other both contributed. They're both kind of the steady Eddie segments, but even both of those are up. as we just continue to see strong demand across all the assets. And then finally, Sunoco, can't forget the job they're doing there right now and really outperformance across all their segments, really strong refining earnings, but also all their other segments as well are really hitting on all cylinders. So you put all that together and it's just, it's a really large increase from the last call to this call here. And some of that is, a lot of that's a Q3 performance, but we do still As we're looking at Q4, we see Q4 up from where we had it three months ago as well.

Yeah, it's pretty striking. And then lastly, just to sneak it in here, the lateral economics here in terms of incremental gas supply deals, anything you'd care to share about what that looks like prospectively? Obviously, it's de minimis capex. So any leading indicators there or just how meaningful that could be as you kind of leverage your assets here, the operating leverage of your assets? if there's anything you care to share at this point.

Yeah, you bet. This is Mackie again. And like I said, because of where all of our pythons are and because of where a lot of these power plants are being built, data centers, et cetera, we are very fortunate. And so even in the laterals that we're building off transwestern or north end, both of those are nice projects for us, going to create some good upstream revenues. These are pipelines that are going to coal-fired plants that are being – replaced with natural gas power generation, which is going to be a common theme as we go on. And we're just so well positioned there, as like I said earlier, throughout the country, to spend fairly immaterial dollars to connect to large power plant loads.

Awesome, guys. Thank you.

Thank you. The next question is from Gene Salisbury with Bank of America. Please go ahead.

Hi, good morning. There's been increased bullishness on Permian crude growth, partly because there's been so many Permian gas pipelines announced. I believe most of Energy Transfer's Permian crude volumes are traveling at spot rates. Do you see this Permian crude supply-demand balance tightening over the next few years, and would you seek to contract out more of this space? And as a follow-up, what would you have to see in the basin to consider adding new crude pipeline capacity? Thanks.

Hey, Gina, it's Adam. Great question. So yes, we definitely are expecting more growth. And, you know, I would like to point out that as we see the GORs increasing, it's not surprising to us that we're seeing more gas pipelines added relative to crude egress. You're spot on on the amount of our capacity that's moving under spot rates. You When we went through the recontracting phase, the rates that the market was willing to pay were undervalued. And I think this year has been a great example of that being true. And so, of course, we will look to contract the pipes long term, assuming that the values get to where we view them as appropriate. And there's clearly a lot of value in these long haul pipes. I think we serve different markets than several of our competitor pipes. which also provides an incremental level of intrinsic value to our system. As far as looking to expand, I think there are several low-hanging fruit expansions that people like us and others in the industry can do and as people are signing up for contracts and rates are appreciating, we'll certainly look to those in the future.

Great, thanks a lot. The next question is from Gabe Maureen with Mizuho. Please go ahead.

Hey, good morning, everyone. Can you maybe just talk about the rationale for Vaquero versus some of the other GMP systems that are transacted in the Permian? And I'm just curious with the FIDing of FRAC 10, to what extent, you know, having Vaquero under your belt might have prompted that and also timing on future Vaquero processing FIDs expansion?

Yeah, really for us, Vaquero sits in a really great spot in our system, and so we're already very well connected to Vaquero on all fronts, on the upstream front. We've taken advantage of utilizing each other's systems when we have maintenance and other events in the field, as well as being connected with the NGLs and other downstream products. and many more. The Y-grade team as well as our upstream, midstream team have done a really good job of bringing new volumes to the system and contracting our Y-grade system. So while Vaquero certainly helped with us make the decision on Fract 10, it wasn't the only driver. Great.

Thank you. I was going to add to that too. When you think about Vaquero and you look at the multiple and the multiple coming down, That's just really filling up the processing capacity that's there. As far as thinking about synergies, we didn't add the downstream in the synergies. It's a lot of volumes off these assets that are definitely helping support new capital projects going forward, like Fract 10 that obviously supported. But the economics that we've put out there as far as multiples is really just centered around the processing capacity there and bringing new volumes onto that system.

Great. Thanks, Dylan. And maybe then if I can ask a little bit about credit risk, particularly as it pertains to contracting for some of these data center demands. Can you talk about how you're evaluating that, how much you're scrutinizing different projects, maybe what sort of assurances you're asking for before you enter into projects? I know some of these projects aren't the most capital intensive, but I'm just curious kind of what the process might be there, whether that's been evolving.

Yeah, so we have a very robust credit process anytime we're looking at putting capital out there or spending money on new assets. And that goes the same for these data center projects, even when it is smaller capital dollars on laterals. We're generally making sure that we are contracting through to an investment grade counterparty. And so that can take many different forms. I don't want to talk specifics on any customers, but generally, Generally, we are getting some form of parental guarantee for the contract value or a large portion of the contract value so that we're protected upstairs. In the few cases where we have done something with non-investment graded counterparties, generally several years support through an LC or a surety bond or some sort of credit enhancement like that. to give us some protections in the event of any sort of insolvency. We've always looked at it as a couple years gives us time to get recontracted on the space then as these assets are being built are all going to become very critical to the U.S. infrastructure here for many years to come. Thanks, Tom.

Our last question comes from John McKay with Goldman Sachs. Please go ahead.

Hey team, thank you for the time. I'll just do one quick one. Obviously, elections today, not going to ask you to weigh in on that, but just be curious the tone from your customers you're hearing. Are they waiting on kind of today's outcomes to move forward with some projects or said differently? Depending on how, let's say, today goes, do you think you could see a pickup in contract announcements on the gas side? Thank you.

Gosh, I guess we're all kind of looking at each other. I don't really, this is Mackie, I don't really have conversations with customers around politics and how that might affect. Now, certainly there are some conversations around threats coming out of Iran and that type of thing that everybody in America is paying attention to as well as us. But I'm not aware of any conversations where there's discussions around exactly what will happen after today. I mean, you still have Trump. as president, regardless of what happens. So there's still going to be certainly support for our industry and for what we do for this country and for the rest of the world. But we try not to worry about those things. We support them. We are big encouragers of voting. I hope everyone on this call gets out and vote. Very important. And we'll see how everything works out this evening. But either way, we'll wake up tomorrow morning and we're going to continue to grow and make this a great partnership for many years to come.

Thanks for the time, guys. Appreciate it.

This concludes our question and answer session. I would like to turn the conference back over to Mackie McCrae for any closing remarks.

Yeah, thank you. Everybody's kind of looking like, oh my gosh, what's he going to say? But I won't be too long here. But I guess, you know, Tom and I for years have talked about how great our employees are, and that's what makes us who we are. And As I look at Tom, I've really enjoyed working with him, a co-CEO. He's calm. He's easygoing. He's smart. He's well-connected. He's very experienced, and I'm kind of the opposite of all of that. And so it's been kind of a really good partnership, and I know him being the sole CEO starting in January is a great thing, and he'll continue to lead this. I'm very excited about that. He's got Dylan next to him. If Dylan's not the top CFO in our industry he should be because he's very talented brought a lot of value to our partnership and he's put himself with a great team with Ashton and Troy and Justin and just a great group running our financial and accounting departments and then you've got Brad and tax and Brad probably the smartest guy in our company I don't understand about half of what he says so I have to get an interpreter on that but he's a very talented guy that brings a lot of value and and then go to the commercial side. Adam Arthur, who's sitting next to me, I joked that he started cleaning bathrooms, I think, at any transfer when he joined us. But no, he came with a master's and he came with an intent to learn and to do well and he has really prospered. He's brought a lot of value to our NGL business, to our crude business and now over a lot of our interest take gas and I think the sky's the limit where he's going to go from a commercial standpoint. in this partnership. He's put together great teams. Our crew team with Christina and Tyler and everybody under them, it's just phenomenal. You spend time with those folks like Tom and I do often. It's just a talented group that are extracting every bit of value they can out of our assets. And then you go to RB and the team he's built in our NGL group with Brian up in Philly and John and John and others in Houston. We've got incredibly smart very experienced people likewise with our crew that really extract value as you can see with all these NGL products and I'm sorry projects that we've done over the years and are continuing to build out then you go into Brian Beebe and his GNP you know everything starts at the wellhead once it comes out of the wellhead that's where we start making money and so very important cog in our will and he and Alex and Michael and Todd and everybody that's built our GNP That's been really fun working with them and I know they'll continue to do what they do for many years to come. And on the interstate front, we have so many great projects going on just in South Mississippi with Joey and Jimmy and Mike and their teams in Florida and Steve and all his guys and folks. Just exciting what's going on in the interstate front. It's been so fun. And then you look on the M&A. The way Kelcy and we've run this partnership for years is we've got to balance our M&A with our organic growth and we've kind of got out of balance off and on over the years and right now you can see we're turning pretty good on keeping that balanced and with Chris and his ability to do deals with Clyde and really Chris reaches out to everybody in this organization as he evaluates assets and companies. He's done such a great job. He looks at a lot of deals. We look at a lot of deals and We don't win many of them, but the ones we do win turn out to be great acquisitions. There's other upside that we think we're going to get from those, and then there's always other upside synergies and revenues that we get that we don't anticipate. So what a great asset Chris has been for our partnership. We've got an incredible legal team that, you know, we're fighters. We don't like fighting, but when we have people drilling holes in our pipe and chaining themselves to equipment and pouring sand in equipment, Enough's enough. And so I think folks out there know that we will stand up for ourselves. We will stand up for our industry. I'm very proud of our legal team and the jobs that they have done. And then you talk about our E&C. Commercial works very close to the E&C with Mike and Raj. They've got such great teams. And a great example of that is Hugh Brinson and Chris Hubart and what he's done to get Hugh Brinson built a lot earlier than we'd anticipated. And then now he's jumped over phase two. A9 on Florida and probably part of South Mississippi. You got Futch and his whole team out on DSW. It's just what an incredible ENC team that's bombarded with thousands of requests from our commercial teams every year. And they churn out all these costs that are so important to be accurate so that we can be competitive and keep our market share. And then I turn to, I could go on and on, by the way, with our of partnerships. It's incredible, as Tom and I say, who supports us and who makes us look good. But we go to our, with Bill and with Brent and with Lindsay, they do such a great job communicating with y'all, everybody on this phone, communicating internally with everybody inside. Even this prep for these quarterly calls, just the amount of work they put into this, it's been a pleasure. And once again, they make us look good, like I said. And then finally going to a you guys, everybody on the phone and all the investors that have stuck with us for all these years and you know there were times when our coverage wasn't so great and there were times when our leverage was a little bit higher than we wanted and we had protesters etc etc and y'all stuck with us especially a lot of y'all and a lot that are on this phone that have been great loyal investors and believers in who we are and what we've done and we appreciate that very much and then going to Kelcy, I met Kelcy Years ago, I think I interviewed with him for about 10 minutes. He told me to come back in two weeks because I had to get noticed where I was working as a land man. And then he'd tell me what the salary was or they would. So I joined him. And then when he and Kelsey started, I mean, I'm sorry, he and Ray started energy transfer. Our first asset was a 10-inch, 150-mile pipeline in East Texas full of nitrogen. We tied a gathering system into it, tied it to you, to Tusco, and we took off from there. and oh yeah oh my goodness yeah kind of important I didn't look at my notes probably the most important group which is hard to say that is our ops group I actually had it on my deal I was trying to speed up to get through this but I shouldn't have so yeah Daniel I'll start with this start with Tom and then Daniel the most important thing is yes we want to run efficient systems we want to run systems that are profitable. But the most important thing is safety, that our employees that come to work every day go home to their families every day. And that's the biggest emphasis we put. But after that, Daniel and his team have done an incredible job. Throughout the country, we have such great operating people at Marcus Hook, Mont Bellevue, at Nederland, throughout all of our terminals and pipelines throughout the country take forever to to give those people the credence, but also out in Permian where we're most active with Andrew and Chris and what they've done to not only continue to run assets we have over the years, but also to take new assets or assets we purchased recently and turn them into the AT standard of reliability. And then as we brought on new cryos, they've done a great job there and they'll continue to do that. So yes, they are such an important part. That's why I have a co-CO to remind me of the things I forget. And... Please keep doing that as I close out here. But anyway, with Kelcy and Ray buying the 10-inch, I think Kelcy's such a unique man. I mean, there's not many people like him with his aggressiveness, with his competitiveness, with his never-give-up attitude. My dad had a lot of that same thing. But my dad didn't have this massive vision that I think most people don't have of where things can go. He may be one that goes, I'm not surprised where we're at today. Well, I'm shocked where this partnership's gone. I've enjoyed this ride the whole way. And then I look at kind of summarizing this, our assets. And hands down, I'm always puzzled by why we trade as poorly as we trade compared to our competitors. It makes no sense. You look at our interest rate pipeline network, unmatched by far by anybody in the industry. You look at our crude business, we moved out. 30% of every barrel that's produced through our pipe. We move about 25% of every gas molecule that's produced in the state through our assets. We're one of the biggest exporters of natural gas liquids. We export a lot of oil. We have a tremendous amount of, I think it's 80 million barrels of oil storage, 80 million barrels of NGL storage. We have 240 BCF of gas storage. We're just so well positioned. You combine that with what I started out this with with our people, the best people in the industry. What works out is years like this. We're going to be steady growing for many years to come, but we're so well positioned to capitalize with our assets and our people and opportunities on volatilities. And if this year is an example of that, I don't know what is. So the future is so great for energy transfer. The best is yet to come. I hate leaving. It's bittersweet. I'll certainly be the... biggest cheerleader from the sidelines for this partnership and I hope that y'all continue to believe like you should because there's a lot of great things that are happening now that we'll be announcing within the next 6 to 12 months and I look forward to where this partnership is going. Appreciate everybody's support. Appreciate everybody's support and thank you for this. Paul, feel free to reach out to Bill and team on questions or Dylan.

This has been a real pleasure.

Take care.

Have a good day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.