Viatris Inc.

Good morning and thank you for attending the Kinetic first quarter 2024 results call. My name is Alyssa and I will be your moderator today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the call to our host, Alex Durkee, Investor Relations. Alex, please go ahead.

Thank you. Good morning and welcome to Kinetic's first quarter 2024 earnings conference call. Our speakers today are Jamie Welch, our President and Chief Executive Officer, and Trevor Howard, our Chief Financial Officer. Other members of our senior management team are also in attendance for this morning's call. The press release we issued yesterday, the slide presentation, and access to the webcast for today's call are remarks, including the question and answer section, will provide forward-looking statements and actual results could differ from what is described in these statements. These statements are not guarantees of future performance and involve a number of risks and assumptions. We may also provide certain performance measures that do not conform to U.S. GAAP. We've provided schedules that reconcile these non-GAAP measures as part of our earnings press release. After our prepared remarks, we will open the call to Q&A. With that, I will turn the call over to Jamie.

Thank you, Alex. Good morning everyone and thank you for joining our call today. Kinetic had an exceptional start to 2024 with continued momentum throughout April and early May. We reported our first quarter results yesterday afternoon, exceeding our own internal budget and positioning Kinetic for a strong year ahead. First quarter adjusted EBITDA was $234 million, a 25% increase year over year, reflecting robust underlying volume growth and contributions from the Permian Highway Pipeline expansion and Delaware Link. We process gas volumes of 1.53 billion cubic feet per day, representing 13% growth year over year and down less than 1% quarter over quarter. Due to planned maintenance at several processing facilities, alpine high curtailments as a result of depressed Waha prices, and winter weather in January. During the quarter, we completed our planned maintenance projects at our Diamond Cryo, East Toya, and Pecos Bend processing facilities. We opportunistically scheduled these projects ahead of the ramp-in producer turn-in line activity starting in March and the Lee County contract commencement on April 1st. As a result of the mulch bed change-outs, we have improved our plant recoveries and system efficiencies. I would like to thank the operations team for their hard work and commitment to safety during this time. They did a phenomenal job ensuring safe operations and system reliability for our customers. More recently, we completed our system-wide front-end amine treating project with the installation at our Pecos Bend processing facility in April. we can now offer enhanced blending and treating services across our system and accept gas that previously did not meet our gas quality specifications. As producers explore different benches such as the Avalon and Bonespring and further expand the boundaries of the Delaware Basin, treating and blending will become critical to manage the elevated levels of H2S and CO2 and Kinetic stands ready to support this next phase of growth out of the basin. As we shared during our February call, we placed our gathering system expansion into Lee County, New Mexico, in service on January 18th, over two months ahead of schedule. The NBC-backed agreement went into effect on April 1st, and we are currently receiving volumes well above that threshold. The expansion into Lee County combined with our enhanced treating and blending capabilities, positions Kinetic to capture incremental market share in New Mexico. Furthermore, with the in-service of the PHP expansion and Delaware link, we can now offer producers an integrated wellhead to Gulf Coast solution. With volatile and even negative natural gas prices at Waha since early March, it has been top of mind for producers to access premium priced natural gas markets. particularly along the Gulf Coast, which offers more price stability. Waha gas daily prices averaged negative 72 cents per MMBTU in the month of March and April. Many of our customers benefited handsomely during this period by having their gas sold at Gulf Coast markets rather than in basin at the Waha hub. As a reminder, Kinetics' equity gas exposure shifted from Waha to the Gulf Coast following the in-service of the PHP expansion on December 1st. The depressed in-basin Waha prices have not only generated opportunities with Kinetics Reserve PHP capacity, but have also further strengthened our partnerships with existing and new customers in need of egress out of the basin. We continue to forecast pressured in-basin pricing until additional pipeline capacity is placed in service However, Kinetic and our customers are very well positioned with egress from the Permian to demand centers along the Gulf Coast. March was an important month for Kinetic shareholders. With a fourth quarter dividend payment on March 7th, core shareholders completed their commitment to reinvest their dividends. This commitment was important in that it enabled us to execute upon key financial priorities such as fully redeeming the Series A preferred in 2022, and fund our elevated 2023 capital program. It further demonstrated strong alignment with all stakeholders. Moving forward, we're excited for all shareholders to now receive cash dividends, starting with the first quarter dividend payment today. Subsequently, in March, we facilitated a secondary offering which fully exited Apache's remaining ownership in Kinetic. When combined with a prior secondary offering in December, we increased our public float to nearly $1.5 billion and quadrupled our average daily trading volume to nearly $30 million. We saw exceptionally high investor demand and participation in the secondary, and I want to thank our investors for their continued support and belief in the kinetic story. And with that, I would now like to hand the call over to Trevor.