Tallgrass Energy, LP (NASDAQ:TGE) Q1 2017 Earnings Conference Call - Final Transcript
May 03, 2017 • 04:30 pm ET
Good day and welcome to the Tallgrass Energy Quarterly Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Nate Lien. Please go ahead, sir.
Thank you, Shannon. Good afternoon and thank you for joining the Tallgrass Energy quarterly earnings call. As we discussed among other things, the TEP and TEGP results from the first quarter of 2017, which were released through our joint press release and 10-Qs this afternoon. Joining me on the call are David Dehaemers, President and Chief Executive Officer; Bill Moler, Executive Vice President and Chief Operating Officer; and Gary Brauchle, Executive Vice President and Chief Financial Officer.
Before turning the call over to David, let me remind you that this event is being recorded and a replay will be available for a limited time on our website. Additionally, our comments today will include forward-looking statements and estimates. These forward-looking comments are subject to various risks and uncertainties and reflect managements' views as of May 3, 2017. Please refer to our filings with the SEC, which are available on our website, including our 10-Ks and 10-Qs, which provide discussions of factors that may cause actual results to differ from management's projections, forecasts, estimates, and expectations. Note, that except to the extent required by law, Tallgrass undertakes no obligation to update any forward-looking statements. Please also refer to our earnings release for reconciliations between the non-GAAP financial measures referenced in this presentation and the most comparable financial measure or measures calculated and presented in accordance with GAAP.
With that, let me now turn the call over to David for his opening remarks.
Good afternoon, everybody and thanks to everyone for joining our Tallgrass Energy first quarter earnings call. First quarter was another strong quarter for TEP with the acquisition of terminals and the operator of REX, the full in-service of the capacity enhancement project and continued strong operating results, all of which contributed to our 15th consecutive quarterly distribution increase and TEGP's seventh consecutive quarterly distribution increase. A number of positives have occurred since our last call in mid February. We will provide additional details later in the call. But in late February, we announced an agreement with Holly Frontier to connect their El Dorado refining complex to Pony Express.
On April 3, we announced a very accretive acquisition of an additional interest in REX from TDev. Effective March 31, and on April 12, Ultra Resources announced that it had completed its restructuring and emerged from bankruptcy. This means that TEP expects to receive its share of the expected approximately $150 million distribution from REX by mid-July and that would be half since we now own 50% of REX in TEP.
Before I dive into the summary of the financial performance, I would like to briefly touch on the economics of the recent REX acquisition, which we view as extremely favorable to TEP. As you know, TEP purchased its first 25% interest from Sempra in May 2016, little over