Financial Data and Key Metrics Changes - For the full year 2025, the company reported a net income of approximately $685 million and adjusted EBITDA of $1,238 million, representing a growth of approximately 9% from 2024 [10] - In the fourth quarter, net income was $168 million compared to approximately $176 million in the third quarter, and adjusted EBITDA was $309 million compared with approximately $321 million in the third quarter, primarily due to lower revenues from severe winter weather [10][11] - The gross adjusted EBITDA margin for the fourth quarter was maintained at approximately 83%, above the target of 75% [11] Business Line Data and Key Metrics Changes - Fourth quarter gas processing volumes averaged 444 million cubic feet per day, crude terminaling volumes averaged 122,000 barrels of oil per day, and water gathering volumes averaged 124,000 barrels of water per day [5] - For the full year 2025, gas processing volumes averaged 445 million cubic feet per day, crude terminaling volumes averaged 129,000 barrels of oil per day, and water gathering volumes averaged 131,000 barrels of water per day [6] Market Data and Key Metrics Changes - The company expects lower volumes across its systems for the first quarter of 2026 due to severe winter weather, but anticipates growth in volumes throughout the rest of the year consistent with historical seasonal expectations [7][8] Company Strategy and Development Direction - The company plans to reduce capital spending significantly, expecting to spend approximately $150 million in 2026, a 40% reduction from 2025, and further decrease to less than $75 million per year in 2027 and 2028 [4][9] - The strategy includes leveraging historical investments to drive significant free cash flow generation, supporting a targeted 5% distribution growth per Class A share through 2028, along with potential share repurchases and debt repayment [5][9] Management's Comments on Operating Environment and Future Outlook - Management reiterated that approximately 95% of revenues are protected by minimum volume commitments (MVCs) for 2026, which provides a safety net against production fluctuations [8][14] - The company expects annualized net income and adjusted EBITDA growth of 5% and approximately 10% annualized adjusted free cash flow growth through 2028, supported by gas volume growth and lower operating and capital expenditures [8][15] Other Important Information - The company had a drawn balance of $338 million on its revolving credit facility at year-end [12] - Adjusted free cash flow for the first quarter of 2026 is expected to increase relative to the fourth quarter of 2025, as capital expenditures are projected to be lower [12] Q&A Session Summary Question: Balance sheet and debt repayment priorities - Management plans to use a portion of free cash flow after distributions to pay down debt, expecting to naturally deliver below 3x leverage in the next few years as EBITDA grows without increasing absolute debt levels [18][19] Question: Third-party outlook and Chevron's production target - Management expects no change to the third-party outlook, maintaining an average of 10% across oil and gas, and confirmed Chevron's target of 200,000 barrels of oil equivalent per day remains intact [21][23] Question: Growth drivers and cost-cutting contributions - Future EBITDA growth is driven by inflation escalators and gas growth, with free cash flow growth resulting from reduced capital expenditures as the infrastructure buildout is completed [27][29] Question: CapEx flexibility - The company expects capital expenditures to be lower than the previous year, with guidance of $150 million for 2026 and potentially less than $75 million in 2027 and 2028 [31][35] Question: Weather impact on production - Management noted that while severe cold weather has impacted production, they expect a recovery as weather improves, with a typical seasonal increase in volumes anticipated in the second and third quarters [40][41]

Financial Data and Key Metrics Changes - For the full year 2025, the company reported a net income of approximately $685 million and adjusted EBITDA of $1,238 million, representing a growth of approximately 9% from 2024 [10] - In Q4 2025, net income was $168 million, down from approximately $176 million in Q3 2025, while adjusted EBITDA was $309 million compared to approximately $321 million in Q3 2025 [10][11] - The company expects adjusted free cash flow in Q1 2026 to increase relative to Q4 2025, with projected capital expenditures lower than in the previous quarter [12] Business Line Data and Key Metrics Changes - Gas processing volumes for 2025 averaged 445 million cubic feet per day, crude terminaling volumes averaged 129,000 barrels of oil per day, and water gathering volumes averaged 131,000 barrels of water per day [6] - In Q4 2025, gas processing volumes averaged 444 million cubic feet per day, crude terminaling volumes averaged 122,000 barrels of oil per day, and water gathering volumes averaged 124,000 barrels of water per day [5] Market Data and Key Metrics Changes - The company anticipates lower volumes across its systems in Q1 2026 due to severe winter weather, but expects growth in volumes throughout the rest of 2026 consistent with historical seasonal expectations [6][12] - Approximately 95% of the company's revenues are protected by minimum volume commitments (MVCs) for the full year 2026, providing a stable revenue base [7][13] Company Strategy and Development Direction - The company plans to reduce capital spending significantly, expecting to spend approximately $150 million in 2026, a 40% reduction from 2025, and further decrease to less than $75 million per year in 2027 and 2028 [4][14] - The strategy includes a targeted 5% distribution growth per Class A share through 2028, supported by significant free cash flow generation and debt repayment [5][9] Management's Comments on Operating Environment and Future Outlook - Management highlighted that the severe winter weather impacted Q4 2025 performance but expects a recovery in production as weather conditions improve [40] - The company reiterated its long-term growth outlook, expecting approximately 10% annualized adjusted free cash flow growth through 2028, driven by gas volume growth and lower operating and capital expenditures [8][29] Other Important Information - The gross adjusted EBITDA margin for Q4 2025 was maintained at approximately 83%, above the target of 75%, indicating strong operating leverage [11] - The company had a drawn balance of $338 million on its revolving credit facility at year-end [12] Q&A Session Summary Question: Balance Sheet and Debt Repayment Strategy - Management confirmed plans to use a portion of free cash flow after distributions for debt repayment, expecting to naturally deliver below 3x leverage in the coming years as EBITDA grows [18][19] Question: Third-Party Outlook and Chevron's Production Target - Management indicated no change to the third-party outlook, expecting an average of 10% across oil and gas, and reaffirmed Chevron's target of 200,000 barrels of oil equivalent per day [21][23] Question: Growth Drivers and Cost-Cutting Impact - Management stated that growth in EBITDA is driven by inflation escalators and gas volume growth, with free cash flow growth supported by reduced capital expenditures [27][29] Question: Capital Expenditures Flexibility - Management expects capital expenditures to be lower than $150 million in 2026, with potential for further reductions in 2027 and 2028 [32][35] Question: Weather Impact on Production - Management noted that while severe weather has impacted production, they expect a recovery as conditions improve, with 95% of revenues protected by MVCs [40][41] Question: Long-Term Leverage Target - Management indicated there is no specific leverage target, but expects natural deleveraging as EBITDA grows and debt levels remain stable [43][44]