DCP Midstream, LP Common Units

Ladies and gentlemen, thank you for standing by and welcome to the Q1 2021 DCP Midstream Earnings Conference Call. At this time, all participants' lines are 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 will 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.

Thanks, Angela. Good morning, and welcome to the DCP Midstream first quarter 2021 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 that our discussion today 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 scheduled in the appendix section of the slides. Bouter 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 Bouter.

Thank you, Sarah, and good morning, everyone. Appreciate you joining us. Our team delivered solid first quarter earnings despite managing through the historic volatility created by Winter Storm URI. First and foremost, I want to thank our team for tremendous execution through this event without a single safety incident or any employee or contractor injuries. This hard work helped us achieve adjusted EBITDA of 275 million and distributable cash flow of 175 million, which resulted in leverage of 4.1 times and over $1 billion of liquidity at the end of Q1. We maintained our dedication to cost and capital discipline with a 22% reduction in cost and a 55% reduction in sustaining capital versus the fourth quarter of 2020. In all, we generated a 5% sequential increase in excess free cash flow, totaling approximately $90 million in the first quarter. This solid quarter is a testament to the multi-year strategic transformation of our business model. We balanced and diversified our portfolio, prioritized capital discipline, and invested in DCP 2.0 to drive efficiencies in our business and restructure our cost basis. These deliberate strategic actions have positioned DCP to successfully navigate the historic supply and demand shocks resulting from a pandemic compounded by adverse actions by OPEC and an epic winter storm. And earnings continue to prove their earnings power, generating significant excess free cash flow throughout historically challenging environments, which brings me to slide four. In total, winter storm URI resulted in a $60 million adverse impact to our first quarter earnings. As a result, severe producer volume declines and record natural gas pricing, the storm created negative impacts on commercial settlements including natural gas marketing swaps, which were partially offset by DCP's balanced portfolio and integrated value chain, including gas storage. The DCP team prioritized safety and proactively prepared our assets for the storm and maintained near-perfect reliability while gas was still being produced. We were also able to leverage the DCP 2.0 platform and our integrated collaboration center to provide our teams enhanced visibility into our assets with real-time data, enabling an informed and proactive response. Our team's exceptional preparation and execution, supported by our leading digital platform, was instrumental in our ability to safely and effectively manage through the storm and maintain our 2021 financial guidance. As you can see on the slide, exit to exit, our GNP and NGL pipeline volumes have improved and we're confident in our team, our strategy, our portfolio, and ultimately our continued success. In slide five, I'll highlight the versatility of the DCP portfolio and the connectivity of our fully integrated value chains as a critical component of our success during these recent challenges. We generate diversified earnings from multiple basins and revenue streams. From wellhead gathering and processing to fractionation and storage, The DCP portfolio is positioned to maximize earnings across the value chain. Over the past decade, we have invested in expanding our logistics portfolio and strategically connected St. and Southern Hills to our GNP business. We also were able to leverage our GNP footprint to vertically integrate fee-based natural gas transportation pipelines like Gulf Coast Express and the Cheyenne Connector. Since 2010, we have stabilized our cash flows. as we grew our L&M earnings share from 10 to 60% of adjusted EBITDA. In 2019, we anticipated the industry super cycle of growth coming to an end and employed a capital efficient supply long capacity short strategy to mitigate overbuild and utilize existing third party capacity and infrastructure rather than build new assets. Along with shifting and optimizing the asset base, we took additional transformative action to better position DCP for a sustainable future. DCP was a first mover in the industry's digital transformation, investing in DCP 2.0 since 2016 to drive efficiencies, enable real-time improved decision-making, and enhance safety, reliability, and asset optimization. We have reinvented the way we operate our business. which has helped to reduce our annual cost by $155 million, or 15% since 2015, while absorbing inflation and investing in transformation initiatives and improving our culture and employee experience. Combined, these dedicated strategies have stabilized our cash flows and positioned DCP to generate excess-free cash flow which has enabled us to deliver the balance sheet and provide increased financial flexibility through even the most challenging environments. I'll now turn it over to Sean, who will walk us through the financial details of our first quarter.