Tallgrass Energy, LP (NASDAQ:TGE) Q2 2019 Earnings Conference Call - Final Transcript

Good day everyone and welcome to the Tallgrass Energy Q2 2019 Earnings Call. [Operator Instructions]

And now it is now my pleasure to turn the conference over to Nate Lien. Please go ahead sir.

Thank you, Laurie. Good afternoon and thank you for joining the Tallgrass Energy quarterly earnings call, as we discuss TGE results from the second quarter of 2019, which were released through our press release this morning.

Joining me on the call are David Dehaemers, Chief Executive Officer; Bill Moler, 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 management's views as of July 25, 2019. Please refer to our filings with the SEC, which are available on our website, 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 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.

Good afternoon, everybody, and thanks to everyone for joining our Tallgrass Energy second quarter earnings call. Second quarter again produced outstanding financial results and our commercial teams continue to make progress on REX and Pony re-contracting and the ongoing efforts to commercialize the Pony Express expansion, our Seahorse Pipeline, as well as our Plaquemines Liquids Terminal project.

While we are not yet at the point to share specific details about re-contracting or to announce FID on our growth and expansion projects, we continue to make solid progress on all fronts.

Now with the financial metrics for the quarter. Adjusted EBITDA was $254 million and cash available from dividends was $205 million producing a dividend coverage ratio of 1.35 times for the second quarter. The performance drove TGE 16th consecutive quarterly dividend increase, again that's $2.16 annualized which is quadruple where we IPO-ed at over four years ago and that is $0.54 a quarter. That all is a sequential increase of 1.9% for the first quarter of 2019, and an increase of 8.5% over the second quarter for our 2018 dividend.

With that, I'll turn the call over to Gary for his financial comments.

Thanks Dave and afternoon everyone. Analyzing the segment performance for the quarter, the Natural Gas Transportation segment produced adjusted EBITDA of $144 million in the second quarter of '19, which is an increase of $5 million from the first quarter of '19. The primary driver of the strong performance in