DCP Midstream Partners, LP ( DPM) Q3 2010 Earnings Conference Call November 5, 2010 9:00 a.m. ET Executives Mike Richards – VP and General Counsel Mark Borer – President and CEO Angela Minas – VP and CFO Analysts Gabe Moreen – Bank of America, Merrill Lynch Michael Blum – Wells Fargo Yves Siegel – Credit Suisse Selman Akyol – Stifel Nicolaus Chet Barriok – George Weiss Associates Presentation Operator
» DCP Midstream Partners L P. Q1 2010 Earnings Call Transcript
» Alon USA CEO Discusses Q3 2010 Results - Earnings Call Transcript
In addition, during our discussion we will use various non-GAAP measures, including distributable cash flow, adjusted EBITDA and adjusted segment EBITDA. These measures are reconciled to the nearest GAAP measure and schedules provided on our website. We ask that you review that information as well. And now, I will turn it over to Mark Borer.Mark Borer Thanks Mike. Morning everyone and thanks for joining us today for the discussion of our third quarter results. As you saw in our press release last evening, we reported third quarter results, which were in line with our 2010 DCF forecast. In addition to meeting our financial goals, we have continued to diligently execute on our growth strategy including the drop down from our sponsor, which we announced our earnings release last evening. On Slide 3, you’ll see our agenda for this morning. I will begin some highlights of the quarter including an overview of the dropdown transaction followed by an operational update. Angela will follow-up with a financial overview of the quarter. We will close with our outlook and summary. We are pleased with the progress we have made thus far this year. We are optimistic about the future and believe we are favorably positioned to continue executing our growth strategy. Turning to Slide 4, lets discuss some highlights for the quarter. Third quarter financial results are on track to achieve our 2010 DCF forecast. We generated a distributable cash flow of $24 million for the quarter and 80.6 million year-to-date providing a distribution coverage of 1.14 times over the trailing four quarters. Our integration efforts related to our numerous (inaudible)acquisitions are progressing according to plan. For the November 2009 Michigan gathering and treating system acquisition, January 2010 Wattenberg NGL pipeline acquisition and our most recent acquisitions during the third quarter of the Chesapeake propane terminal and the remaining 55% interest in our Black Lake NGL pipeline. Wattenberg Capital expansion project, which we expect to complete in early 2011 is also progressing on plan.
We successfully accessed the term debt market through our Inaugural Investment grade debt offering. We believe our financial positioning is a key element of our growth strategy. Angela will provide additional color on this in a few moments.Finally, last evening we announced the $150 million acquisition of a one-third interest in the Southeast Texas joint venture from our general partner, DCP Midstream. This transaction compliments the third-party acquisitions in organic growth we have executed thus far this year and demonstrates our multifaceted growth strategy. In summary we are progressing well in terms of delivering on our 2010 business planned commitments. Turning to Slide 5, I will provide some additional color on the dropdown transaction. The DCP Southeast Texas joint venture is a fully integrated midstream business that sits well with the MLP business model. The assets in the joint venture include 675 miles of natural gas pipelines, three natural gas processing plants totaling 350 MMcf per day of processing capacity, natural gas storage assets with 9-Bcf of high deliverability salt dome storage capacity, favorable access to interstate and intrastate gas markets, NGL market deliveries direct to Exxon Mobil and to Mont Belvieu via our Black Lake NGL pipeline. This transaction’s a prime example of how we are co-investing and effectively partnering with our clients. In line with our strategy of utilizing the MLP as a growth vehicle for the DCP Enterprise, DCP Midstream will re-apploy the proceeds to ongoing capital projects. Read the rest of this transcript for free on seekingalpha.com