Tallgrass Energy, LP (NASDAQ:TGE) Q1 2018 Earnings Conference Call - Final Transcript

May 03, 2018 • 04:30 pm ET


Tallgrass Energy, LP (NASDAQ:TGE) Q1 2018 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen. Welcome to the Tallgrass Energy Q1 2018 Earnings Conference Call. [Operator Instructions]

At this time, I'd like to turn the conference over to Nate Lien. Please go ahead, sir.

Nathan Lien

Thank you, Kathryn. Good afternoon, and thank you for joining the Tallgrass Energy Quarterly Earnings Call. As we discussed, TEP and TEGP's results from the first quarter of 2018, which were released through our joint press release this morning 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 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 management's views as of May 3, 2018.

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 projections, forecasts, estimates and expectations. Note that except to the extent required by law, Tallgrass undertakes no obligation to update any forward-looking statement.

Please also refer to our earnings release and website 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.

David Dehaemers

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 consistent performance in the natural gas and crude oil transportation segments and continued growth in our gathering and processing and terminaling segment. All this contributed to TEP's 19th consecutive quarterly distribution increase. Again, we started out at $1.15 when we annualized, we went public in 2013, and today we're at $3.90 annualized.

And then also TEGP's 11th consecutive quarterly distribution increase. Again, just as a reminder we were $0.53 annualized May of '15 money when we went public and three years later we're $1.95 annualized. Now let's review the first quarter financial results, which were the catalyst for these increases. Adjusted EBITDA for TEP was $165 million, and DCF was $146.2 million, producing robust coverage of 1.3 times for the first quarter.

TEP increased its quarterly distribution to $0.975 or like I said earlier, $3.90 annualized, which is an increase of 16.8% over the first quarter of 2017. TEGP increased its quarterly distribution to $0.4875[Phonetic] per quarter or $1.95 annualized, which again is an eye-popping increase of 69.6% over the first quarter 2017. I'm going to turn the call over to Gary now for further details on the financial performance, and then Bill will talk about some of our commercial items, and then