DCP Midstream, LP (NYSE:DCP) Q4 2017 Earnings Conference Call - Preliminary Transcript

Feb 14, 2018 • 11:00 am ET


DCP Midstream, LP (NYSE:DCP) Q4 2017 Earnings Conference Call - Preliminary Transcript


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Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2017 DCP Midstream Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we'll conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] And as a reminder, today's program is being recorded.

I would now like to introduce your host for today's conference, Irene Lofland, Vice President of Investor Relations. Please go ahead.

Irene Lofland

Thank you, Jonathan. Good morning, and welcome to DCP Midstream's fourth quarter 2017 earnings call. Today's call is being webcast and the supporting slides can be accessed under the Investors Section of 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 in 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 measures and scheduled in the Appendix section of the slide. Wouter van Kempen, CEO; and Sean O'Brien, CFO, will be our speakers today. And after their remarks, we will take your questions.

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

Wouter van Kempen

Thank you, Irene, and thanks, everyone for joining us this morning. We said 2017 would be successful if we delivered on our financial targets, advanced our growth program and continue to transform DCP. With that, we demonstrated strong execution on all of our commitments and advanced the DCP 2020 strategy, which is evident in our fourth quarter and full year results. We delivered 2017 DCF above the midpoint of our guidance range, driven by continued cost efficiencies, improvements in our base business, actual reliability and on top of that, the best safety performance in DCP's history.

We strengthened our balance sheet de-levering by almost a full turn, putting us well within our debt-to-EBITDA target range of three to four times and ending the year with distribution coverage above one times. And while we have continued protection, with an idea of get back, we didn't need a penny of it. We also advanced our growth program with a strategic and disciplined focus on evolving our integrated value chain in our key regions.

In the Permian, our Sand Hills expansion just 365,000 barrels per days complete and the next phase is proceeding on time. And we've expanded our logistics value chain and made the final investment decision to proceed with the Gulf Coast Express residue natural gas pipeline in the Permian. I am excited that we've accelerated our Mewbourn 3 plant through the third quarter of 2018 and we continue to do everything we can to get it running even sooner.

We've also ordered loan lead equipment and are working on permits for our O'Connor 2 plant, which is on track for the middle of 2019. These projects give