DCP Midstream, LP (NYSE:DCP) Q1 2018 Earnings Conference Call - Preliminary Transcript

May 08, 2018 • 11:00 am ET


DCP Midstream, LP (NYSE:DCP) Q1 2018 Earnings Conference Call - Preliminary Transcript


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Good day, ladies and gentlemen. And welcome to the Q1 2018 DCP Midstream LP Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time [Operator Instructions]. As a reminder, this conference is being recorded.

I would now like to introduce your host for today's conference, Irene Lofland, VP of Investor Relations. You may begin

Irene Lofland

Thank you. Good morning. And welcome to DCP Midstream first quarter 2018 earnings call. Today's call is being webcast and the supporting slides can be accessed under the Investors Section of our Web site 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 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. We're off to a great start to 2018, and we delivered strong Q1 results that demonstrate the success of our diverse portfolio and our team's dedicated focus on innovation, operational excellence and growth.

During the quarter, we generated distributable cash flow of $171 million, driven by outstanding logistics and marketing results and continued cost efficiencies. Sand Hills had record throughput volumes and is ramping quickly with expansion is coming online. We continue to strengthen our balance sheet with leverage of 3.8 times and our distribution coverage was 1.1 times. Our integrated asset portfolio provides us with significant opportunity to grow and extend our value chain as we remain focused on our DCP 2020 strategy to become the most reliable, safe, low cost Midstream service provider.

On top of the strong financial results, our team continues to perform with remarkable safety outcomes. Delving on our record setting safety performance in 2017, the GPA Midstream Association, recently own our DCP with the Chairman's award for safety improvement and the second play safety award for large companies. We are incredibly proud of our employee's consistent commitment to safety, and we thank them for their diligent effort.

Today, we're extremely excited to discuss our substantial multi-year expansion in two of the most prolific basins in the country. Let me give you a snapshot into the things we'll be discussing on today's call. Within our already extensive footprint in the DJ Basin, we are further establishing our leading position well into the next decade by announcing a comprehensive integrated strategy. This plan includes up to 1.5 bcf per day of capacity, inclusive of our new Plant