DCP Midstream, LP Common Units

Good day and thank you for standing by. Welcome to the DCP midstream second quarter 2021 earnings conference call. At this time, all participants are in responding 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, Mike Fullman, Director of Investor Relations. Please go ahead.

Thank you, Shannon. Good morning and welcome to the DCP Midstream second 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 financial measures, which are reconciled to the most comparable GAAP financial measures in the schedules in the appendix section of the slides. Bauder Van Kempen, CEO, and Sean O'Brien, CFO, will be our speakers today, and after the remarks, we'll take your questions. With that, I'll turn the call over to Bauder.

Thank you, Mike, and good morning, everyone. We appreciate you joining us today and hope you're all safe and well. On today's call, we will discuss our second quarter and first half results for 2021 and our outlook for the remainder of this year. Before getting to that, I would like to say thank you to Team DCP for delivering another strong quarter of results. Compared to the last 15 months, the second quarter was relatively quiet. Instead of managing through unprecedented events and responding to historic volatility, we focused 100% of our time and efforts on executing our strategy, providing safe and reliable operations for our customers, accelerating progress on ESG and sustainability, and investing in our employees and our culture. Our second quarter results in highlights that demonstrate the strength of our diversified portfolio, the transformation we've undertaken over the last five plus years, and the earnings power of the DCP business model, which was recently recognized by Moody's with a full-turn upgrade. For the quarter, we generated $333 million of adjusted EBITDA and $225 million of DCF, representing 21% and 29% increases versus Q1 as volumes strengthened across the portfolio. Within the quarter, we generated a record $132 million of access-free cash flow, which was the fifth consecutive quarter generating positive access-free cash flow, which we defined as cash flow after paying our distributions and funding our capital programs. This strong quarter and fast start to the year, coupled with a favorable commodity environment and producer activity, has us confident that we will meet the upper end of our financial guidance. The DCP business model, strategy, and track record of execution has the partnership well-positioned as we look towards the second half of the year. As we aim to close the year with a strong second half and build momentum for 2022, we're also taking steps to position DCP for the long-term future as we accelerate our ESG and sustainability efforts, which brings me to our next slide. On Monday, we published our second annual sustainability report, Resiliency and Evolution, which highlights our sustainability performance from the 2020 calendar year, announces forward-looking goals on greenhouse gas emissions reductions and inclusion and diversity, and outlines our strategies within a variety of ESG-related efforts. Importantly, we substantially increased our disclosures by aligning with SASB, the Sustainability Accounting Standards Board, the Energy Infrastructure Council, EIC, and the GPA Midstream Association ESG reporting template, the latter of which we helped to create as a participant in the joint ESG working group. Before I review the highlights of our report, I want to set some context. The United Nations expects the global population of 7.7 billion people to increase to almost 10 billion by 2050, with the potential to peak at 11 billion by the century's end. As one of the largest natural gas processors, natural gas liquids producers in the United States, DCP plays a critical role in meeting the rapidly increasing energy demands of a growing global society that is constantly striving for enhanced living standards. From creating electricity, fuels and heat sources, to providing feedstock for countless consumer and industrial products, the natural gas and NGLs that DCP processes and transports are a fundamental pillar to improving quality of life, both here in the United States and abroad. And this is why our company purpose is building connections to enable better lives. We know that hydrocarbons continue to fuel our global society, with increased long-term demands for natural gas for decades to come. We also know that we have a duty to ensure that our role in the energy value chain is as clean, as responsible, and as sustainable as possible. We've established a sustainability council and energy transition team focused on building and executing long-term strategies to ensure our company sustainably enhances values for our stakeholders and that we are a proactive participant in the energy transition. Our council has established concrete three-year strategies to drive our sustainability performance and in our newly published report, we outlined how well the team executed last year. At DCP, 2020 was not defined by the challenges we faced, but by the achievements we celebrated, including our financial and strategic execution, as well as our ESG performance. Several highlights of our team's hard work during our company's most trying time include a 46% decrease in recordable injuries since 2016, with an industry lead in TRIR of 0.44 in 2020. 16% reduction in scope one and scope two greenhouse gas emissions, and a 23% reduction in methane emissions since 2018. We established a company-wide inclusion and diversity committee, and we increased diversity on our board of directors. We achieved an employee engagement survey score of 76%, which was above the industry and represents a three percentage point increase since 2018. And as a company, we donated a million dollars to our community partners, including 325,000 to local food banks during COVID-19 crisis. We're proud of the progress that we've made. We're excited about setting new forward-looking targets, which brings me to slide five. Looking forward, we must continue to evolve and proactively meet the needs of our employees, our customers, our investors, and communities. There is a remarkable opportunity for our company to thrive and ensure the sustainability of DCP for the long term. We've been a strong midstream company for over nine years, and by successfully enhancing our ESG outcomes, we ensure we can operate as a leading midstream business for decades more to come. In our report, you'll find that among many targets and aspirations for improvement, we've highlighted several new forward-looking goals. We have two goals for emission reductions, including that by 2030, we will reduce our total Scope 1 and Scope 2 greenhouse gas emissions by 30% from the 2018 baseline, and that by 2050, we will achieve net zero greenhouse gas emissions. We plan to achieve those targets, through three strategic horizons focused on clean the core, adjacent to the core, and beyond the core. Clean the core means continuing to improve our emissions profile to increase efficiency and modernization of existing operations. And we know that we're going to spend most of our efforts here over the next decade. Adjacent to the core focuses on expanding our business portfolio where DCP's existing intellectual and social capital is relevant to compete in complementary business lines that improve our outcomes and provide solid returns. And this can include carbon capture and sequestration and other emerging technologies. And beyond the core is a strategy to ensure that DCP is positioned well for the rapidly changing energy ecosystem and tomorrow's energy solutions. In addition to our emissions reduction targets, we've also established formal inclusion and diversity goals. And these include, by 2028 and 2031, ensuring our workforce, our leadership, and our succession pipeline represents the gender and racial demographics of the local communities in which we operate. Secondly, we continue to invest in our people and are committed to maintaining at least satisfaction and belonging scores above the industry benchmark over the next five years. And finally, on an annual basis, ensuring that representation of veterans in our workforce aligns with national demographics. When aligned with our focus on safety, reliability, transformation, efficiency, and culture, these goals are about continuing to do what is right while strengthening our company. And we're proud to back our words up with action. We also announced renewal for $350 million accounts receivable securitization facility with the addition of ESG-linked KPIs. This is a first-of-its-kind agreement within the entire energy industry, as we have leveraged our annual pricing against our safety performance, relevant to our peers, and year-over-year reductions in our greenhouse gas emissions intensity rate. Our goal is to demonstrate accountability to improving our sustainability performance. As always, we welcome your feedback on our reports, our targets, and our strategy looking forward. And with that, I'll turn things over to Sean to run through the second quarter financial results.