Enterprise Products Partners L.P. (NYSE:EPD) Q1 2018 Earnings Conference Call - Final Transcript

Apr 30, 2018 • 10:00 am ET


Enterprise Products Partners L.P. (NYSE:EPD) Q1 2018 Earnings Conference Call - Final Transcript


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Good morning. My name is Thea and I will be the conference operator today. At this time, I would like to welcome everyone to the Enterprise Products Partners L.P. quarter one 2018 earnings conference call. [Operator Instructions]

Thank you. At this time, I would like to turn the conference over to Mr. Randy Burkhalter. Please go ahead, sir.

Randy Burkhalter

Thank you, Thea. Good morning, everyone, and welcome to the Enterprise Products Partners conference call to discuss first quarter 2018 earnings. Our speakers today will be Jim Teague, Chief Executive Officer of Enterprise General Partner and he'll be follow by Bryan Bulawa, Chief Financial Officer. Other members of our senior management team are also in attendance for the call today.

During this call, we will make forward-looking statements within the meaning of section 21-E of the Securities and Exchange Act of 1934, based on the beliefs of the company, as well as assumptions made by and information currently available to enterprise's management team.Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during this call.

With that, I'll turn it over to Jim.

James Teague

Thank you, Randy. Our business performed exceptionally well in the first quarter, including records for net income, gross operating margin, and adjusted EBITDA. Excluding proceeds from asset sales, distributable cashflow was also a record. Record NGL and margin terminal volumes increased crude oil pipeline transportation and marine terminal volumes and higher natural gas pipeline transportation volumes led to three of our four business segments reporting higher results compared to first quarter last year. These results are allowing us to consistently grow our profits, grow our distributions, plus make substantial headway toward equity self-funding. With a comfortable 1.5 times distribution coverage, we retained over $450 million to put back into our future growth. At Enterprise, it's probably time to quit thinking downturn. Today's results continued to prove that our future has really never looked brighter.

The first quarter, we were still in the ramp-up phase for two of our largest projects, our PDH plant in the Midland to ECHO crude oil pipeline. Both projects have now officially been put into service. On April 16th, we announced that our Midland to ECHO crude pipeline moved into full service with an expanded capacity of up to 575,000 barrels per day.

Supporting the Midland to ECHO pipeline are several strategic supply aggregation projects, including a new 140-mile pipeline from Loving County, Texas, to Midland that is expected in service this quarter. Recent extreme basis differentials for Midland have been a significant source of attention. Pipeline, rail, and trucking capacity out of the Permian appears to be very tight for at least the next year and with no significant additional takeaway expected until the second half of '19, the timing