DCP Midstream Partners LP (NYSE:DPM) Q2 2020 Earnings Conference Call - Final Transcript

Aug 06, 2020 • 10:00 am ET

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DCP Midstream Partners LP (NYSE:DPM) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Q2 2020 DCP Midstream Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Ms. Sarah Sandberg, Senior Director of Investor Relations. Thank you, please go ahead.

Executive
Sarah Sandberg

Thanks, Jamie. Good morning and welcome to the DCP Midstream's second quarter 2020 earnings call. Today's call is being webcast, and I 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 of the deck that describes our use of forward-looking statements. And for a complete listing of the risk factors, please refer to the partnership's latest SEC filings. We will also use various non-GAAP measures, which are reconciled to the nearest GAAP measure in schedules in the appendix section of the slide. Dr. Van Kampen, CEO and Sean O'Brien, CFO will be our speakers today and after their remarks, we'll take your questions.

With that, I'll turn the call over to Van Kampen.

Executive
Wouter van Kempen

Thank you, Sarah. And hood morning, everyone. We appreciate you joining us and hope you are all safe and well. In today's call we will discuss our strong Q2 and first half results, our guidance and outlook for the remainder of the year, and new developments in the DJ Basin.

I want to first say thank you to team DCP and incredible credit goes to every employee for delivering some of our best safety, reliability, and financial results in what has been an exceptionally challenging environment. Our team and our diversified asset base, is strong. Our strategy remains consistent and effective. The earnings power of the DCP business model is evidenced by our outstanding financial results. We generated $220 million of distributable cash flow in the second quarter and $440 million year-to-date, representing our strongest performance since the Company was combined with DCP Midstream, LLC. As a result of our early and aggressive efforts to optimize cash we created $54 million of free cash flow quarter and our bank leverage improved from Q1 now down to a target 4.0 times.

Underpinned by our strong year-to-date performance in recent market stabilization, we have reissued our original adjusted EBITDA and DCF guidance, which Sean discuss shortly. During the quarter volumes across both segments remained stronger in a worst case scenarios as a result of fewer than anticipated shut-ins and the earlier return of curtail production. Importantly, we were also able to proactively work with our customers to optimize their net backs throughout our integrated value chain. This in short that's when shut-in decisions were made, DCP was a service provider of choice and volume stayed on our system, creating a