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spk_0: thank you for standing by and welcome to the echo trans midstream que for and four year twenty twenty earnings call at this time all participants are knowledge and only note after the speakers presentation there will be a question and answer session to ask a question during the session really depressed star one on your telephone please he lives with a comfort is being courted few require any further assistance please press stars zero thank you are an alligator because it's over to make kettle vice president corporate development and investor relations mr tech low please go ahead
spk_1: the morning and welcome to the year and twenty twenty earnings call for equity in midstream corporation a replay of it's called will be available for fourteen days beginning the feet the phone number for the reply is eight hundred five eight five eight three six seven or or one six to one for six or to the top and by be is four two three three to nine today's call may contain forward looking statements related the future than and expectations please refer to today's news release and risk factors and each year and form ten k for the year ended december thirty first two thousand and nineteen he ended up the the by form ten queues for factors that could cause the actual results to differ materially from the for remotely
spk_2: statements
spk_1: also the form and cave for the year ended december thirty first twenty twenty and expected to be filed with the us is the later today a call may contain certain band of financial measures
spk_0: you refer to this morning news release and or investor presentation on ported disclosures regarding such measures including reconciliation for the most comparable gap financial measure on the called today or tom karen chairman and ceo diana charlotte a president and chief operating officer her gallagher senior vice president and chief financial officer just the machen senior vice president gas systems planning and engineering and brian for change area by president and chief accounting officer after that prepared remarks we were open the call to question him about of and over the phone
spk_3: and actually than good morning
spk_0: we hope everyone is continuing to stay safe and healthy today we reported full hear net income of six hundred and thirty eight dollars
spk_3: and adjusted ebitda a one point two billion dollars
spk_1: cook will provide more details on the financial in of humor only twenty was an unprecedented year as we all navigated dependent
spk_0: you train acted quickly to implement covered nineteen protocols all while achieving a number of very significant accomplishment
spk_3: we executed a new fifteen year gap gathering agreement with it you key establishing the foundation for long term stable cash flows and enhanced capital efficiency
spk_1: we simplified our structure i won't be qm into a tiara we advance our he had three efforts which included publishing our first comprehensive sustainability report and also recently established in our climate policy we strengthen our liquidity and balance you to a one point six billion dollar long term bond offer makes flow that certain progress with mvp and lastly or operations teams that mr be during a very challenging environment
spk_0: continuing to deliver results all while maintaining the highest afraid to stand
spk_1: the not turned over to diana for the operations update and then kurt will provide financial update and i'll come back were some closing remarks before we open the call your questions
spk_4: diana
spk_5: thanks tom and good morning everyone
spk_4: let's start with mvp in january the project for cured another key permit as the bureau of land management granted a right of way permit for mvp crafting in the jefferson national forest we're currently working on a single outstanding regulatory approval which relates to our remaining water body and wetland minecraft things the water body authorization is a two pronged approach first mvp has applied to the army corps district for an individual project permit to implement open caught crossing technique on if elected group of water bodies and second and it has been added a certificate amendment application to the park requesting utilize trench with crashing method for certain crossing previously approved as open time our primary focus is on the process and ensuring the agencies have everything they require to perform a thorough review and issue authorization that well as fan challenge one quick note on the legal fat last friday the dc circuit court of appeal of denied a motion first day brought by project opponents related to several farc order we are pleased with this decision and appreciate a comprehensive work that has been and continues to be done i fired and all the federal agencies involved in terms of construction our current view is that we will have all permits and hand by mid year allowing us to ramp up to for construction this would still allow us to meet the targeted full and service date in may twenty twenty one
spk_6: the total project cost estimate remains approximately five point eight to six billion dollars at the midpoint a train expect that find approximately two point nine billion dollars of the overall cost
spk_4: moving for gathering for the four year twenty twenty we averaged eight point two bcf per day have gathered volume which was roughly a five percent increase over twenty nineteen we did see a nice a ticket and que four volumes which averaged eight point six bcf per day as the summer and fall volume for town and for back on online we continue to expect our producer customers to be less focused on volume growth and twenty twenty one and more focused on efficient capital deployment as such are twenty twenty one guidance reflects roughly flat year over year volume
spk_7: now for a short recap of some of our twenty twenty and more recent yes she effort and twenty twenty we published our first comprehensive sustainability report which was produced in accordance with both the gr i and faith be reporting standard i report is available on our website and offers easy to navigate
spk_4: functionality beyond the formal report we also took several tangible stuff during the last twelve months including establishing the board appointed role of chief sustainability officer increasing our board to nine director including the addition of to new female directors are board now includes eight independent director of which half or female launching a diversity and inclusion program focused on employee education
spk_0: how point recruitment power sing or initial climate policy which includes a long term goal of net zero carbon by twenty fifty an interim target of fifty percent reduction in methane emissions by twenty thirty and fifty percent reduction in greenhouse gases by twenty forty
spk_4: the climate policy is also available on the sustainability pages of our website and lastly we have incorporated methane emissions mitigation target into our twenty twenty one short term incentive plan and showing that we have company wide and incentive to work toward our interim and long term climate policy target we're excited about where he sg efforts are going and will continue to provide updates as we make progress lastly we continue to drag capital efficiency improvements are gathering that came in right around three hundred million for the full year which was more than twenty five percent lower than our expectation at the beginning of the year we expect continued capital efficiency and twenty twenty one and the coming years driven by the new a kid he gathering agreement which provides for more flexibility across are gathering systems and transmission asset
spk_8: i'm now turn the call over to kirk diana and good morning everyone this morning we reported for your net income a terminal to eat train common shareholders have three hundred and sixty four million dollars and earnings per diluted you train common share of one dollar and success at income was six hundred and thirty eight million dollars adjusted ebitda was just over one point two billion dollars and deferred revenue was two hundred and twenty six million dollars
spk_1: we also reported for year not cash provided by operating activities of approximately one point one billion dollars and free cash flow of two hundred seventy million dollars
spk_0: for the quarter and income attributable to eat and common shareholders was one hundred eighty million dollars and earnings per diluted eatery and commerce share was twenty seven cents and income for the quarter was one hundred thirty seven million dollars adjusted iba dollars two hundred eighty six million dollars and deferred revenue was seventy seven million dollars
spk_8: in the fourth quarter regenerated three hundred seventy million dollars of naqqash provided by operating activities
spk_1: and eighty seven million dollars of free cash flow
spk_0: and income for the quarter was impacted by a twenty one million dollar unrealized loss on derivative instruments which is reported within other income
spk_8: this is related to the contractual provision entitling he trained to receive cash payments from me que te
spk_1: conditioned and specific nymex and rehab natural gas prices exceeding certain threshold during the three years post mvp and service after adjusting for the loss and derivative q for adjusted net income attributable to a train common shareholders was one hundred and thirty four million dollars and adjusted earnings per diluted he train common share was very one sense he train operating revenue for the fourth quarter twenty twenty was lower compared to the same quarter of last year by fifty nine million dollars this is primarily from the impact of seventy seven million dollars of differed revenue in the fourth quarter of this year the reduced revenue was partially offset by higher gathered volumes and increases in transmission and water revenue operating expenses for the fourth quarter twenty twenty or five hundred seventy seven million dollars lower than the fourth quarter of two thousand and nineteen the decrease was mainly driven by a five hundred eighty four million dollar impairment of long lived assets and queue for twenty nineteen on him expenses were down about eight million versus the same quarter last year and this was offset by increases and depreciation and as una a expenses or the fourth quarter a train paid a quarterly cash dividend of fifteen cents per common share on feb twelve the a train common shareholders of record at the close of business on february third at year and we had approximately two billion dollars available under the eat you and revolver and approximately two hundred and eight million dollars of consolidated cash
spk_0: and finally in january we raise eight hundred million dollars of eight year senior notes with a and a half percent coupon and a billion one of ten year senior notes with a four point seven five per cent coupon
spk_8: proceeds from the new issuances address our nearest her maturities with one point four billion dollars used to repay to a you him term loan a and five hundred million dollars use for a tender of the eco am twenty twenty three finger nope
spk_9: allow him to call back to top
spk_1: bench cook consumers can be twenty was a big deal with a number of accomplishments that should position as well for the coming years long term strategy is designed to consistently generated age of we kashmir allocate our company and free cash flow with picketing and deliver maximum value to our shovel
spk_0: before taking your questions wanted to greet me comment on what we saw last week he touches the didn't you store power outages and the aftermath first we hope all our friends families and colleagues are safe and doing well
spk_1: if you've been highlighted critical role of energy infrastructure we need major upgrade investments in our electric grid across the nation
spk_10: won't tigers this we need continued investment in natural gas infrastructure can maintain the beef no certainty a demand projects like can me that will serve the southeastern united states will faithfully transport the natural gas supply needed to ensure that be slowed certainty can be achieved
spk_0: once we got us all that reliable we cannot and should not be ignored
spk_1: everyone expected to be able to heat their homes in the winter and cool them in the summer accents and reliability must be the first priority
spk_3: we firmly believe that will gas and natural gas infrastructure
spk_11: with a long term into the wall in delivering this reliable
spk_12: we stay safe
spk_0: wash your hands he that we're happy to take your question
spk_1: at this time if you'd like ask a question please press star one on your telephone keypad carried on a with jp morgan your line it up
spk_0: a gore in it is james offer jeremy
spk_13: i just want his wife and child star i know knows that you keep he's building their own water infrastructure i believe they mentioned in earnings they're just wondering maybe if there's any opposition to have that constructed by you guys and what he was ship is going on for with the the show
spk_3: no such
spk_0: hi more innocent justin to touch on on eg to plans so we have a lot of our water assets in pennsylvania and some in ohio but our focus is really been on leveraging the existing water as circumstances that you're going forward eg does have some interesting water assets in west virginia and napa likely be a little leverage those they go down there any water system we have a lot of construction synergy them pennsylvania he built up the gas and water infrastructure together because the location of the water source of them was regain your we don't see as many opportunities to call locate gas and wanted to so the even realize and capital energy the much virginia so we've had those conversations with educate and i'm and certainly understand and their plans unless you gain and how to make sense for them and and just really
spk_1: regular the very much focused on realize and all the capital efficiency on our build up pennsylvania he gotta not mix on average guy their i'm an end to the get a cab actually i i think time twenty came out below what you guys got it too just wondering what the moving pieces were there if there's anything pusher twenty twenty one
spk_0: images on a gathering side ah maybe they're just walk and active and yeah he get use california at me is known as as the the walk next they're ugly or tier system next year as or something else and better than that
spk_12: shirt nail twenty two thousand and we started to realize some of the benefits of the the teach you to dabbling deal and and the capital efficiencies built into that arrangement
spk_0: as we look at that twenty one yeah most of it games well connected you want to mention also the of the little over three hundred ninety gonna get that that we do have we also about fifty million dollars compression project built into that and those those compression projects also bring with them incremental steve
spk_1: but even if it's not increasing the volumes you know that it's it's probably a little bit different than what we consider to be sustaining callbacks because those projects do carry some additional revenue with them
spk_14: but but outside of that you're right it's not like malcolm x freaky t and and the other producers or what
spk_0: great lakes lot of about their
spk_1: john mccain with goldman sachs your london's open
spk_0: hey good morning time i want to ask about the first amendment request or process so i found out last week i forget about one hundred twenty bars to do at i know you can do a lot of eve and parallel and some will take more time than others just one on can share any more detail on one you expect be able to start that and then really i guess how many cruz the you can have ah
spk_4: along the right away at once like so let me just take that as an opening hi this is diana and and maybe i can answer everybody's mvp questions i'll at one time so we have two primary hate for construction work remaining be the atlantic and the jefferson national forest and parts of virginia and then we have the water cracking we've completed the compressor stations an original interconnect so that work is all day we have about two hundred and sixty five miles the pipe welded and which weighs approximately forty a smile to complete felt the watercraft things are are included in that mileage we estimate that we complete the up upper we can complete the up and work and and you as the water crossing inside a six month and our schedules fans the remaining approval by mid year
spk_15: so given that we aren't starting from scratch the same route the same crossing considering the amount of data at the agencies have already reviewed we expect the agency's the army corps for ugh
spk_4: west virginia d p virginia dq will take four to six months to complete their work and as she their approval and the water crossings which then does included whatever cannot carry that they have to do so this time frame is built into i get on guidance
spk_1: i think that's that's the nuts and bolts of everything they're different pieces of the right away that we can have different koreans that kind of thing but we do the crossings we believe we can get done in under six months
spk_0: i appreciate that that the the top or maybe just one more hour on on that side
spk_4: did you just put a little bit more about the for that mentioned be boring process that for the individual permit just put that process actually looks like and maybe if you can share anything in your conversations with bridging at this point so are so for the individual process and for permit agency will follow a very well established facts and for a for permitting process it includes analysis of the open cat crossing and public input and there is a well established process to receive the for a one water certificate and we have to get that from west virginia in virginia and that intended to happen and concurrently inside that army corps process
spk_1: we have had conversations with then obviously and but we did just submit sixty six hundred pages in our application so i'm gonna take them a little bit to digest and then we'll be able to talk more about what that timeframe looks like
spk_0: i understood things are that that the funny thank you
spk_1: your humans with but it's feelings of him
spk_16: and in prison for you and just when you eat and to be answered
spk_1: question to answer some follow up unfortunately distance between so on
spk_4: from yeah on on online forums is monster seats were and how to curious and turns
spk_0: goal posts that we should be looking for i know there's a public comment period a lot of back and forth run things like that just he had benefited people call as through some of the big mile markers he sees shirt and that process play up
spk_1: so i don't i don't know that there is anything obviously the and virginia west virginia approvals from the the issue in the d p will happen when i'm in there and then the park will ask whatever questions and whatever additional information they need from us will get that back to them there are some comment period and both processes but i can't tell you exactly windows will happen
spk_4: yet so i think it's really don't i don't know that there is anything that i can point to concretely that should be the first thing you see understood in consumer follow up on that as well just in terms of picky about that six months or under six months to complete and water crossings he is that that shut o'clock start once you have the funding and worries are preliminary work your kind of doing that and so really want to get the it it's something less than six
spk_15: mansour or while inside of it
spk_4: so it's it's well inside of it obviously we can be doing the open cats with certain cruise and we can be doing the board with other trees and so those two things they don't have to be done in some kind of theory they can all be done and parallel as long as
spk_1: and i don't think we're going to have any problem getting cruz as far as activity go so
spk_5: hello inside six month
spk_4: because he had lunch or dinner we haven't sorry we do have upland work that we can do before that to prep and be ready and we have the ability to be working and we probably won't start that though and how the weather breaks and get anything on that understood cabinets that's helpful color our last one and quickly and sorry and nine guidance for tweeting one seems to imply stepped down here regeneration to the back three quarters as opposed to the first quarter and it's it's curious what's driving that decline in the latter part each year really get he added so much of that is you being conservative vs you can find got some your producers
spk_15: so and as far as volume we we did see an uptick in fourth quarter
spk_17: aliens last year and we're certainly happy to see that and right now
spk_0: we are guiding to fly which is what we have been hearing from our producers we did see some curtailment the the pricing last year so as we it's still kind of early for us to be more optimistic than not to answer were kind of sticking with the flat right now and we'll go from there were lumpy because of the usage on the system
spk_1: as large quarter to quarter but nothing really big
spk_0: yeah and he well everybody
spk_1: and kill
spk_0: ryan reynolds with you bf your lungs open
spk_1: hi good morning everyone's bronwyn accomplished in august uni on the down and agreements my understanding that on this mvp not online by one twenty two data he declared the absence of now different ones million dollar has been in order loans cause structure you guys providing color and potential payment on and to this potentially reduce gmp and or transportation eat on the t thanks
spk_0: yeah that moves related to the shares that we purchased some e que te if you recall we bought back twenty five point three million shares be train so the payment they would receive into really consideration for those shit
spk_1: there's still at the green it's it's today once mbps in service it you key would be entitled to two years of rape relief as consideration but it's mbp not in service by january twenty two eg could elect to take that consideration in the form of a one time payment and for go the gathering great relief great arm and a bit i guess it would be just as consideration or nerd i guess any type of color hands you know how other people have and would happen on january first door opens a kind of still in a negotiation period
spk_0: he would be a cash payment i believe they have one year
spk_1: the exercise that option
spk_0: so i think he did you just after the make a decision that and be people concerned this starting in january they can elect that option if they so choose groovy thanks and i guess it as one could follow up is better resolution the hammerhead or does he know ultimately to that know come with more clarity around and vpn service time on in canada is using the thought you could see are ultimately yeah this is this is tom the there's no resolution yet ahead isolated the shoes in arbitration and it'll run it's on course completely separate from all the other activity that we have to be que te and in separate from anything having to do with with mvp great i'm thinking as the colored another happens if day and kids alex humor with move your eyes open
spk_1: hey good morning and to questions at first i'm pretty good to go through the any kind of how many a of t v accounting changes for the sheer and then and secondly i'm just be a couple of your partner's i'm kind of have you know like to take eight impair their investments in ndp i'm just kind of wondering what help is there in there a differences of opinion or north it's just really appalled on their cousins i'm in the center there is an impairment at some point that actually have any kind of impact you credited or anything like that that maybe that we should be thinking about ah yeah this is kirk us all of i if i can remember mile try to go in reverse order so if there were an impairment there's a it doesn't great any problems and any of our and dentures or credit agreements or anything of that nature
spk_0: i'm feeling on the a impairment yeah we've been consistent and our approach and how we look at the impairment and will continue to be consistent were not we're not afraid to take an impairment were following the accounting rules and down waves don't feel impairment ah at this time and then i think your other question was on the a a few defeat and basically
spk_18: yeah there's been a lot of fits and starts on mvp overtime and so what we've decided to do going forward is to just a crew i'm the a few dc on the actual construction of the pipe or we're going kind of that growth component of getting the project on were no longer going to be a crew
spk_4: being on maintenance a capital that's going into basically babies at the pipe got it okay to a dozen that isn't and if it isn't in a cashier had you like that
spk_0: now the great the undersea isn't getting yeah right and then i'm a good guy made it has volume on the water permits because it is there a in a you feel like you probably then you're working with the agency's me sure that you know that you've got it for fun applications on did it feel like is dead kind of the tone conversations the dishes reconstruct is in a job
spk_19: like and he's a very
spk_0: go straight for in trouble prices and just wondering if there any kind of pitfalls or anything like that or or even navy early indication that we may get from any hidden fees prior to this you know kind of this this the forty six not approval process
spk_1: yeah so and
spk_20: it's a pretty comprehensive filing a the data is all their this is a normal standard
spk_1: course of business permit that an i find that water coughing chemicals that everybody get like it's not gas so it's renewable that's for the same kind of individual permit an electric and power sector it so it's something they do normal course of business and we don't expect anything to crazy
spk_12: britain
spk_1: derek walker with bank of america your lines open
spk_4: are they view a negligible maybe to at the click on the around it out a civil claims he added he did he mention that it sold out of the at the thought that underneath upon a me
spk_19: the comments i guess to for a and the assault on that page an indefinable record our guests how does how much they've gone with the canadian thanks
spk_0: yeah they get it we we stand and dialogue with the hc treasury kinda stays in communication with them and try to keep them updated and we don't surprise on ah the agency big focus with us is iraq and can't just basically continues to be what it has been which is ndp so ah that's what they're really watching are they haven't given us any
spk_12: yeah there's no on line that's been drawn in the sand on anything around that but that's i mean that they're right yeah that's obviously they're their point of focus
spk_0: that it's i made it up with all of the indicted for here are kind that around urge the comprehensive the your application and but yet we do here of her condition sort of the majority change and mid year the that
spk_12: they'll try to change that you guys think about how these are the application to get reviewed no again it doesn't really change the review process say you know we've been in close contact with fair can staff and understand what they need at five the application and and we've had good comments as far as an fanfare commissioners as to needing the permits and and being able to proceed
spk_0: right like a legitimate budget
spk_1: again if you'd like to ask the question please press star one on your telephone keypad john okay with goldman sachs your line is open
spk_0: he thinks it's not as good as a beamer bobsleigh if you t talk about being able to offload some of it's capacity on mvp is care of you guys may go to share next to on but picking that up in another running across as the really anything else on that front that are that might be helpful thanks yeah geniuses the this is time know we we can't share can share anything beyond what what he que te
spk_1: hence as said in that regard
spk_0: clearly were well aware of the activity and and are
spk_4: in fact support of it i think it's
spk_21: no we shouldn't read too much into this i mean historically it's it's been a natural progression of long haul pipes that they were initiated in originated by supply push the issues that then overtime transition to demand poor customers
spk_0: and by the production company releasing some of it's capacity that doesn't mean that they will make burnham gas else to fill their capacity so that
spk_1: you could miss read it to say well gee the papers immediate any longer when in fact what it is is a transitioning to the demand for customers holding the capacity for their own the liability uncertainty and then coupling that good from guess who else
spk_0: from some of those same upstream customers so we support about that we can get for natural
spk_22: progression in transition of of many long haul pipes and we think it's it's a situation where he could be beneficial to eat you t and to train into the downstream demand for customers
spk_0: now show that mimic on authentic that cool helped some to and you guys trying to do the are they never found anything under mvp it'd make sense just to see that anymore color they want just fobbed one last line i'm back to be cute t and actually my development firm what's her junior as to what's your junior from pennsylvania
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