DCP Midstream, LP Common Units

Ladies and gentlemen, thank you for standing by and welcome to Q4 2020 DCP Midstream Earnings Conference Call. At this time, I'll participate in lines in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Sarah Sandberg. Senior Director of Investor Relations. Thank you. Please go ahead, Madam.

Thanks, Justin. Good morning, and welcome to the DCP Midstream Fourth Quarter 2020 Earnings Call. Today's call is being webcast, and I encourage those listening on the phone to view the supporting slides, which are available on our website at dcpmidstream.com. Before we begin, I'd like to point out today that our discussion includes forward-looking statements. Actual results may differ due to certain risk factors that affect our business. Please review the second slide in the deck that describes our use of forward-looking statements. And for a complete listing of the risk factors, please refer to the partnership's latest SEC filings. We will also use various non-GAAP measures, which are reconciled to the nearest GAAP measure and schedules in the appendix section of the slides. Wouter van Kempen, CEO, and Sean O'Brien, CFO, will be our speakers today. And after their remarks, we'll take your questions. With that, I'll turn the call over to Wouter.

Thank you, Sarah. Good morning, everyone. Appreciate you joining us on our call today. After an incredibly challenging year, we are really proud to reflect on the performance of our team throughout 2020. We were able to navigate a double black swan event that eviscerated demand, plunged oil prices into negative territory, and fundamentally changed the way we operate as a company. The team rose to the challenge to produce extremely strong financial and operational performance as a result of our multi-year strategic evolution, our COVID and downturn mitigation plans, and a focus on sustainability and operational excellence, which I'll walk you through on slide three. Over the past decade, we've transitioned the company into a fully integrated midstream service provider with our logistics and marketing segments generating 61% over 2020 adjusted EBITDA. This has stabilized our cash flows and allowed us to capture more earnings along our extended value chain. Additionally, in the years leading up to 2020, We optimized existing infrastructure as part of our supply long capacity short strategy, keeping our utilization rates high and minimizing our capital spending. In 2016, we launched our DCP 2.0 digital transformation, which has revolutionized our company. Our investment over the past several years enabled us to deploy proven fourth industrial revolution technologies to achieve substantial improvements in our processes and operations, resulting in enhanced operational excellence and efficiencies. We've also focused on margin optimization and increased productivity by the utilization of digital twins of our assets in our integrated collaboration center and significant enhancement to our reliability and predictive maintenance. Across our footprint, as a result of our ICC and our operations team, this year represented our best operational reliability in the company's history, relevant to planned runtime, plant-based recoveries, and major equipment malfunctions. Underpinning our business continuity was our pandemic response plan that ensured the health of our workforce and communities while maintaining safe and reliable operations. And to protect the health of our business, we took early and aggressive action that resulted in over $1.1 billion of increased cash flow year over year, driven by reductions in cost, reductions in capital, and a measured reduction of our distribution to secure liquidity, generate excess free cash flow, and ultimately reduce debt. Before we detail our financial performance, I want to mention a few other highlights from 2020. We made significant improvements to our emissions profile in our Permian assets, as a result of improved reliability and continued operational discipline. Following our inaugural report in 2020, we expect to highlight the details of this reduction and other ESG metrics in our second sustainability report, which will be published this summer. Our sustainability efforts were recognized by GPA midstream this year, through the awards of environmental excellence and energy conservation, and we look forward to continued ESG improvements. And lastly, on the operations side of the business, the Cheyenne connector and the Latham 2 offload came online in 2020, increasing needed residue gas takeaway and processing capacity in the DJ basin. All of this hard work culminated in the financial results you see on slide four. For 2020, our assets generated a 4% increase in adjusted EBITDA year over year, totaling $1.252 billion, and a 12% increase in DCF compared to 2009, totaling $850 million and exceeding the high end of our 2020 guidance range. We introduced access-free cash flow as a financial metric within our guidance during 2020 and exceeded the midpoint of our range with $237 million generated in access-free cash flow this year. Inclusive of working capital adjustments, we used this access-free cash flow to pay down $300 million of debt, and we closed out 2020 with zero borrowings on our bank facility and a leverage ratio of 3.9 times better than our 4.0 times guidance target. Total capital was down 74% year over year, with growth capital of $205 million, slightly exceeding the high end of our range, driven by increased cost on the Cheyenne connector. In all, we're tremendously, tremendously proud of our team's execution, and we look forward to carrying this momentum into 2021. So let me turn it over to Sean to walk you through the details of the fourth quarter, the full year, and our 2021 guidance.