DCP Midstream, LP Common Units

Good day, ladies and gentlemen. Thank you for standing by. And welcome to DCP Midstream's second quarter 2022 earnings conference call. At this time, all participants are on 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 1-1. I would now like to hand the conference over to your speaker host for today, Mike Fullman, Director of Investor Relations.

Thank you, Livia, and welcome everyone to the DCP Midstream second quarter 2022 earnings call. Today's call is being webcast and 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 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 measure in schedules in the appendix section of the slides. Wouter van Kempen, CEO, and Sean O'Ryan, 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, Mike, and we appreciate you all joining us. On today's call, we'll look at our Q2 financial performance and highlight the benefits and value being created through the hard work and execution of the DCP team. A little over two years ago, at the start of the COVID-19 pandemic, DCP faced a rapidly changing external environment with unprecedented demand destruction and extreme commodity pricing volatility. In response, we focused our efforts on strengthening our balance sheet and prioritizing debt reductions. We set out to build a business that delivers reliable earnings during a low cycle and that excels and outperforms through the high cycles. That said, I'm proud to announce that we delivered another record quarter for adjusted EBITDA, DCF, and excess free cash flow. For the quarter, we realized adjusted EBITDA of $477 million and DCF of $369 million. And our excess free cash flow which we define as free cash flow after paying our distributions and funding our growth capital program, was $254 million. This quarter's result, coupled with our strong Q1 performance, have generated a record start to the year, as our year-to-date adjusted EBITDA is over $900 million, our DCF is over $700 million, and our excess free cash flow is already at the midpoint or full-year guidance range, only six months into the year. This performance has enabled us to reduce our absolute debt by over $300 million, delivering at a rapid pace, going from 4.2 times to 2.9 times over the last 12 months. And our efforts have resulted in upgrades from Fitch to InvestmentGrade and from S&P to Positive Outlook. Our InvestmentGrade balance sheet and the earnings power of the DCP portfolio have created financial flexibility. and allowed us to expand our Permian GNP business with the James Lake acquisition, announced a 10% distribution increase to return incremental capital to our unit holders. The DCP team has accomplished a lot over the last six months, as our performance has surpassed our original expectations, and we have great momentum going into the second half of the year. This strong start and our outlook for the rest of 2022 will result in us significantly exceeding the high end of our full year guidance for adjusted EBITDA and DCF. Before we dive into detailed financial results and review our second half outlook, I'd like to take some time to discuss our third annual sustainability report and the progress that we've made on our ESG efforts. On Monday, we released our annual sustainability report titled Fundamentally Sustainable. And on slide four, you'll see some of the highlights from that report. As a reminder, at this time last year, we announced a number of environmental and social goals aimed at proactively meeting the needs of our employees, our customers, our investors, and our communities. We're proud to announce significant progress towards these goals with an 8% reduction in Scope 1 and Scope 2 emissions in 2021, bringing us to a total 23% reduction since 2018. Additionally, on the environmental front, We've accomplished an 80% reduction in volume of hydrocarbon spills, and we continue to be recognized as a leader among our peers with our sixth Environmental Excellence Award from the GPA Midstream Association. The report also details our progress on inclusion and diversity outcomes, including improvement in our employee satisfaction and employee belonging scores, which increased in the last year by four points and six points, respectively. Our goal here is to maintain scores above the industry benchmark. And not only have we continued to meet this goal, but we've seen significant improvement, reporting an employee satisfaction score of 80%, 7% above benchmark, and an employee belonging score of 81%, 8% above the industry benchmark. These increases are especially impressive as they were achieved while facing headwinds such as COVID and a great resignation. And while we're proud of the work being done internally at DCP, we're also committed to sustainability, transparency, and standardization. This year's report includes initial alignment with the recommendations of the Task Force on Climate-Related Financial Disclosures, or TCFD. It provides enhanced descriptions on internal management practices around sustainability and climate-related risks and opportunities. And this alignment drives transparency for our investors and supports long-term accountabilities. I'm proud that our team continues to make progress on the three strategic horizons of our comprehensive energy transition plan. While we actively clean the core, we also have resources dedicated to advancing adjacent to the core initiatives, like carbon capture and electrification. And we're looking beyond the core to ensure we're on track in meeting our long-term ESG goals. I encourage you to access the full report on our website, and I look forward to a continued conversation. And with that, I'll turn it over to Sean to give us further insights into our financial results.