EnLink Midstream, LLC

Greetings. Welcome to the fourth quarter 2022 NLINC Midstream Earnings Conference Call and Webcast. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded. At this time, I'll turn the conference over to Brian Bernkart, Director of Investor Relations. Mr. Bernkart, you may now begin.

Thank you, and good morning, everyone. Welcome to NLINC's fourth quarter of 2022 earnings call. Participating on the call today are Jesse Aranivas, Chief Executive Officer, and Ben Lam, Executive Vice President and Chief Financial Officer. Walter Pinto, Executive Vice President and Chief Operating Officer, is also in the room to answer any questions during the Q&A session. 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 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 Jesse and Ben, and then leave the remainder of the call open for question and answers. With that, I would now like to turn the call over to Jesse Arenivas.

Thank you, Brian, and good morning, everyone. Thank you for joining us today to discuss our fourth quarter and record full year 22 results. We'll also discuss our 2023 outlook, which looks like it will be another record year. In short, we remain focused on executing the same game plan that worked in 2022, driving sustainable value through investing in higher return projects, returning capital to investors, and executing on our first mover advantage in CCS. Looking back at 2022, we achieved a lot of in-link records. Last night, we reported fourth quarter adjusted EBITDA of $337 million and 2022 adjusted EBITDA of $1.285 billion. This marked both a record for annual adjusted EBITDA and our strongest ever year-over-year growth at 22%. We achieved these results despite December headwinds. Severe winter weather throughout Texas and Oklahoma, along with unscheduled downtime after an earthquake in the Permian, had a negative impact on adjusted EBITDA of approximately $11 million in the fourth quarter of 2022. The strong cash flow generation drove robust free cash flow after distributions of $312 million. This represents the third consecutive year generating at least $300 million in free cash flow after distributions. We use this robust cash flow generation in part to increase the returns to our investors. We recently announced an annualized increase to the distribution of 11% to 50 cents per unit. Additionally, we completed the Board-authorized $200 million unit repurchase program in 2022, and the Board has already authorized an additional $200 million program for 2023. Importantly, These returns to our investors were made while we simultaneously strengthened our balance sheet. In August, we refinanced most of our senior notes due 2024 and a portion of our senior notes due 2025, with an upsized offering of our senior notes due 2030. As a result, we have no meaningful near-term debt maturities. We exited the fourth quarter with leverage of 3.4 times. And subsequent to the end of the quarter, Fitch recognized our improving balance sheet when they upgraded us to investment grade with a BBB minus credit rating. We remain one notch below investment grade by Moody's and S&P with a positive outlook at S&P. Shifting to 2023, We look for this momentum to continue and expect another record year with adjusted EBITDA generation of $1.355 billion at the midpoint of our guidance we issued last night. In particular, we forecast our largest segment, the Permian, to continue to exhibit solid growth. During the fourth quarter, we also continued the execution of our bolt-on acquisition strategy with the acquisition of a small neighbor and GNP system in central Oklahoma. This is another example of our low risk consolidation strategy, which is designed to yield attractive returns in any market environment. We remain focused on maintaining a balanced capital allocation approach, and we continue to find very attractive opportunities to invest in high return projects, including the continuation of our capital efficient strategy of relocating valuable assets. Last night, we announced our third plant relocation to the Permian and the first to the Delaware, which represents a savings of approximately 50% over comparable new build cost. As we look to 2024 and beyond, our assets are well positioned for the structurally supportive natural gas market and the wave of LNG capacity coming online along the Gulf Coast. We generate approximately 90% of our gross margin from natural gas and NGLs, and we operate three dominant GNP systems in the Permian, Oklahoma, and North Texas. While natural gas price is currently lower in 2023 and may remain so for a period of time, long-term we see a significant call on North American natural gas and our systems are very well positioned to benefit. On the supply side, our Oklahoma and North Texas assets are the perfect gas-weighted complement to our Permian position. And on the demand side, we have a Louisiana footprint that can't be replicated, which will enable us to participate in supplying gas to the growing demand centers, including LNG terminals. In addition, we are taking advantage of those assets in the ground to create a differentiated future for NLINC by building a market-leading CCS business, complementing our diverse traditional midstream business. Last year, we executed on our first mover advantage with the first definitive transportation agreement for CO2 addressing current industrial emissions in Louisiana. We expect to sign additional definitive agreements beyond ExxonMobil in 2023 and beyond as we become the CO2 transporter of choice. Because of the extent of our assets in the ground, we can do this without cannibalizing our existing gas business. Next week, we plan to provide additional details around this unique opportunity and the evolving CCS business at our Investor Day in Dallas. With that, I will turn it over to Ben to provide an overview of our operations and our financial results.