EnLink Midstream, LLC

Good day and welcome to the in-link midstream fourth quarter 2021 earnings conference call. All participants will be in listen-only mode. Since 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 a touch-tone phone. To withdraw your question, please press star then two. Please note, today's 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 fourth 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.nlinked.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 files. This call also includes discussions pertaining to certain non-GAAP financial measures. Definitions of these measures as well as reconciliation of comparable GAAP 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. With that, I would now like to turn the call over to Barry Davis.

Thank you, Brian, and good morning, everyone. Thank you for joining us today to discuss our fourth quarter and full year 2021 results. We'll also discuss our 2022 outlook, which will advance our vision to become the future of Midstream by leading in innovation and creating sustainable value. Additionally, we will share an exciting opportunity ahead of us in Louisiana and discuss how we plan to build a substantial carbon solutions business and play a big role in the energy transition. We headed into 2021 with the intent to drive value for our unit holders, partners, and employees. and to make our business more resilient and sustainable for the long term. I am very proud of our team for their focus and relentless execution in doing just that. Their dedication resulted in exceptional progress in 2021 and has allowed us to enter 2022 from a position of strength. For the fourth quarter, InLink achieved adjusted EBITDA of $286.4 million, taking our full year adjusted EBITDA to $1.05 billion. The robust fourth quarter results placed us within the upper end of the increased guidance range that we provided in June. I am also proud to report that on a year-over-year basis, we delivered adjusted EBITDA growth of over 17% in the fourth quarter, after excluding the impact of MVCs that rolled off in 2020. NLINC delivered robust growth in our Permian and Louisiana segments, and we began to see the stability we've projected in Oklahoma and North Texas. as higher commodity prices spur an increase in activity. Through our innovative operational excellence program, which we call the NLINC way and is the roadmap for how we operate, we've been able to sustain peer-leading cost structure reductions enacted in 2020, despite returning to a growth environment and seeing some inflationary pressures. With the strength of our business and our disciplined financial approach, NLINC delivered another year of cash flow of over $300 million. which allowed us to reach our leverage goal with a ratio of under 3.9 times. As a result of this solid execution, we were pleased to announce in December several actions that reflect a more balanced approach to capital allocation and increased returns to our unit holders. Our base business has shown tremendous execution, and I am excited about the progress we are seeing in our carbon solutions business, which is pursuing carbon capture and other opportunities that will allow in-length to play an even more active role in energy transition. In a few short months, we have begun to make real progress in building a comprehensive offering in Louisiana. Yesterday afternoon, we announced an alliance with Palos Energy to provide customers a complete solution for their carbon emissions in Louisiana. Each of these successes is impressive, and combined, they made 2021 one of our best years to date. and have positioned us well to further excel in 2022. Last night, we issued our 2022 financial guidance, which showcases the tremendous improvement across our business. We are forecasting adjusted EBITDA year-over-year growth of approximately 10% at the midpoint. The robust growth of our business, coupled with our capital discipline, allows us to continue to generate significant free cash flow and to maintain our strong financial flexibility. At the midpoint, we are forecasting our third consecutive year with free cash flow after distributions in excess of $300 million. We are entering 2022 with an incredibly bright future ahead. NLINK's path forward will be focused on becoming the future of midstream. We believe the midstream company of the future must have the following five key characteristics, an integrated business model, a large-scale cash flow generating platform, proven operational excellence, a focus on delivering energy solutions for the future, and a focus on environmentally responsible operations. We believe NLINK is well on its way in these five areas, and we are focused on moving them forward with diligence and urgency as the future of midstream demands. Here's how. First, our large-scale cash flow generating platform generates over $1 billion of EBITDA and is delivering growth. Our robust free cash flow allows us to invest in growing our business while providing attractive capital returns to our unit holders and continuing to improve our balance sheet. Second, we have an integrated business model with scale positions in GMP across multiple basins connected to key downstream demand markets. Third, we are powered by operational excellence. We are deploying new technology to build on our position as one of the lowest cost, most efficient operators in our industry. Our leading experienced operations teams maintains both a customer centric mindset and a strong safety focus. Fourth, we are well positioned to deliver energy solutions for the future. Our business is approximately 90% natural gas and NGLs, which are expected to show demand growth through the energy transition. and we are building a promising carbon solutions business. Last but certainly not least, we are focused on environmentally responsible operations. In a few short months after establishing near-term emissions targets, we have made solid progress as demonstrated by an agreement to capture and sell CO2 at our Bridgeport facility in North Texas. As I touched on earlier, we have a unique and very real opportunity to build a significant CCS business over time by repurposing existing assets in Louisiana. I'd like to provide some color on the efforts NLINC is pursuing. We believe CCS provides a meaningful path forward to help industrial CO2 emitters achieve their emission reductions goals. Within the United States, CO2 emissions from industrial and power generation make up nearly half of all CO2 emissions. The state of Louisiana is the second largest industrial emitting state in the country and also ranks as the state with the second greatest sequestration potential due to its geology. The majority of the emission sources are industries that are critical to our daily lives, like fertilizer plants and chemical plants that make a key component used to make plastics. NLINK is the natural service provider in the state of Louisiana, particularly with the highly dense area of the Mississippi River Corridor, where we bring decades of relationships and reliable operating experience, plus over 4,000 miles of pipe already in place. In addition, our pipeline systems are located within close proximity to multiple potential sequestration sites. All of that brings me to our latest announcements. We are excited to be working with Talos Energy to jointly develop a complete CO2 capture, transportation, and sequestration solution for industrial scale emitters in Louisiana. Talos brings substantial subsurface expertise and access to potential sequestration sites, while we bring the significant midstream assets, customer relationships, and the other elements that I mentioned. As a result, we are very excited for 2022 and beyond. both for the trajectory of our base business and for the transformational potential of our carbon solutions endeavors. With that, I'll turn it over to you, Ben, for an operational update.