EnLink Midstream, LLC

Good day and welcome to the InLink Midstream second quarter 2021 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Brian Brungard, Director of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Welcome to InLink's second quarter of 2021 earnings call. Participating on the call today are Barry Davis, Chairman and Chief Executive Officer, Ben Lamb, Executive Vice President and Chief Operating Officer, and Pablo Mercado. Executive Vice President and Chief Financial Officer. We issued our earnings release and presentation after the markets closed yesterday and those materials are on our website. A replay of today's call will also be made available on our website at www.nlink.com. Today's discussion will include forward-looking statements including expectations and predictions within the meaning of the federal securities laws. The forward-looking statements speak only as of the date of this call, and we undertake no obligation to update or revise. Actual results may differ materially from our projections, and a discussion of factors that could cause actual results to differ can be found in our press release, presentation, and SEC filings. This call also includes discussion pertaining to certain non-GAAP financial measures, Definitions of these measures, as well as reconciliations of comparable gap measures, are available in our press release and the appendix of our presentation. We encourage you to review the cautionary statements and other disclosures made in our press release and our SEC filings, including those under the heading Risk Factors. We'll start today's call with a set of brief prepared remarks by Barry, Ben, and Pablo, and then leave the remainder of the call open for questions and answers. I would now like to turn the call over to Barry Davis.

Thank you for joining us today. I first want to take a moment to remember Jim Crane, who joined the NLINC family as a member of the board of directors of our predecessor company in 2005. Jim served us faithfully and diligently for the last 16 years, including attending an NLINC board meeting on the last day of his life. His contribution to NLINC was great, and we will miss Jim. On the call today, we will discuss our second quarter results, our current operating environment, and the opportunities we see for our carbon solutions group. After the significant disruption from severe weather in February, the strong momentum exiting the first quarter continued throughout the second quarter, with producers adding rigs and completing wells that had been drilled but not completed. We achieved adjusted EBITDA of $258 million in the second quarter, which built on the strong first quarter results and represents over 6% growth from prior year, net of MVC payments that ended in 2020. This is a tremendous outcome and positions us well for the second half of 2021. With continued momentum in producer activity on our footprint and strong commodity prices, we expect to end 2021 in the upper end of our previously updated adjusted EBITDA guidance range of $1.02 to $1.06 billion. We generated approximately $72 million in free cash flow after distributions during the second quarter, which takes our trailing 12-month total to nearly $360 million. As the first half of 2021 has shown, we remain focused on executing our plan and driving sustainable value. Our first execution plan priority is to optimize our existing business and improve efficiencies. After leading our peers last year with a greater than 20% reduction in operating in general and administrative expenses, we have maintained those reductions through increased efficiencies, even with the growth and inflation we are now seeing. The second priority of our execution plan is to maintain financial flexibility, and we have continued to make significant progress on this front. As I've already mentioned, we are generating strong cash flow and using the majority of that cash to pay down debt. We have previously discussed our near-term leverage goal is to get below four times, and that goal is now within arm's reach as we exited the second quarter at 4.1 times. Our third priority is deliberate and disciplined growth. As we previously announced in the second quarter, we closed the Amarillo Rattler transaction, a very attractive Permian Basin acquisition with an excellent customer behind it and we remain very confident in achieving a 6x multiple on full year 22 EBITDA. As far as capital projects, our team has been hard at work as we continue to utilize our capital-like growth model to handle higher Permian volumes driven by robust customer activity. We have been expanding our Midland Basin capacity creatively and efficiently through a plant relocation and other plant optimizations. Now looking ahead, I am excited about the opportunities in our Louisiana business. Our team continues to work on exciting downstream growth opportunities, and we expect to bring some of those low-capital, high-return opportunities to closure in the next few months. In addition, we announced in June the formation of the Carbon Solutions Group, which will focus on carbon capture, utilization, and sequestration. As we all know, the United States as a whole and a growing number of companies have set aggressive climate goals focused on reducing greenhouse gas emissions. According to the IEA's sustainable development scenario, CCUS should account for approximately 15% of the cumulative reduction in emissions. Within the U.S., the Mississippi River Corridor in the Gulf Coast of Louisiana is one of the largest CO2-emitting regions, and we believe that our extensive assets in the ground, our customer relationships, and long history of operating in the state of Louisiana uniquely position us to build a business aimed at helping companies achieve their carbon reduction goals. Last but not least, our fourth priority is sustainability and safety. These are part of our DNA, and I'm pleased to report that we have strengthened our governance through the formation of board-level sustainability committee to monitor our performance, risks, and opportunities. In summary, I believe the momentum that we are seeing in our business today, coupled with a strong first half of 2021 and our team's relentless focus on the execution of our plan, have us well positioned to drive sustainable value and growth in the second half of 2021 and beyond. With that, I'll turn it over to Ben to discuss our operational update.