Welcome to the Enable Midstream Partners First Quarter Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen-only mode and the floor will be opened for questions following the presentation. [Operator Instructions] Today's call is being recorded. We ask that you please pick-up your handset to allow optimal sound quality. It is now my pleasure to turn the call over to Enable's Senior Director of Investor Relations, Mr. Matt Beasley. Sir, you may begin.

Thanks, Savanna. Good morning and welcome to Enable Midstream Partners' first quarter 2017 earnings call. I am joined on today's call by our President and CEO, Rod Sailor; our Chief Financial Officer, John Laws; our Chief Commercial Officer, Craig Harris, as well as other members of management. This morning we issued our earnings press release and filed our Form 10-Q with the SEC. Our earnings press release, Form 10-Q filing and the presentation that accompanies this call are all available in the Investor Relations section of our Web site. We'll also be posting a replay of today's call through our Web site. Today's discussion will include forward-looking statements within the meaning of the Securities laws. Actual results could differ materially from our projections and the discussion of factors that could cause actual results to differ from our projections can be found in our SEC filings. We'll also be referencing non-GAAP financial measures on today's call, which we've reconciled to the newest GAAP measures in the appendix of today's presentation. We invite you to review the disclaimers in this presentation for both forward-looking statements and non-GAAP financial measures. With that, we'll get started and I'll turn the call over to Rod Sailor.

Thanks Matt. Good morning. Thank you for joining us on our first quarter call. We are excited to announce today Project Wildcat, a rich gas takeaway solution for the Anadarko Basin that provides new market outlook for growing SCOOP and STACK production. We also recently announced that Newfield is a foundation shipper for EGT's CaSE project and has signed a long-term firm natural gas transportation agreement that moves gas out of the Anadarko basin to preferred markets. I will cover these projects in greater detail in the next slide. But, I want to highlight that these projects were both cost effective and timely solutions that Enable is uniquely positioned to provide for our customers. With a critical market access and additional process and capacity from these projects, Enable and our customers are well positioned for future growth. In addition to our commercial successes, Enable had a great start to 2017 with another quarter of strong financial and operational performance. Net income attributable to limited partners and to common and subordinated units, gross margin and adjusted EBITDA all increased in the first quarter of 2017 compared to the first quarter of 2016. We also saw increased per day natural gas gathered, processed and transported volumes for first quarter 2017 compared to first quarter 2016. Turning to Slide 5, Project Wildcat is a rich gas takeaway solution that is supported by an agreement to deliver approximately 400 MMcf/d of rich natural gas from the Anadarko Basin toward Texas. Enable is able to provide new market outlook and additional processing capacity by contracting with an affiliate of Energy Transfer Partners for 400 MMcf/d of firm processing capacity at the ETP's Godley plant where customers can access the Texas Interstate natural gas markets including the Tolar Hub. Enable will move gas to the Godley…

Thank you, Rod, and good morning, everyone. As Rod mentioned, Enable delivered another strong quarter of operational and financial performance. I will cover a few of our key metrics for the quarter on Slide 9 and 10, as always a more detailed and comprehensive overview can be found in our first quarter earnings release and in our 10-Q both of which were released earlier this morning. Turning to Slide 9, you can see we have 32 rigs that are actively drilling on our footprint. The sustained rig activity in the Anadarko and Ark-La-Tex Basins contributed to 7.9% increase in natural gas gathered volumes and 5.1% increase in natural gas process volumes in the first quarter of 2017 compared to the first quarter of 2016. On a sequential basis, natural gas gathered volumes have increased for the fifth consecutive quarter, while natural gas processed volumes posted an increase for the third consecutive quarter. The increase in gathered and processed volumes for the quarter also contributed to the higher transportation volume in the first quarter of 2017 compared to the first quarter of 2016. Turning to Slide 10, net income attributable to common and subordinated units was $111 million for the first quarter of 2017 an increase of $25 million compared to the first quarter of 2016. The increase in net income attributable to common and subordinated units was primarily a result of increased gross margin in both our gathering and processing and transportation and storage segment partially offset by higher depreciation and amortization expense associated with new assets placed in service, higher interest expense and distributions recognized on the Series A preferred units in the first quarter of 2017 that were not recognized in the first quarter of 2016. Adjusted EBITDA was $221 million in the first quarter of 2017, an…

The floor is now opened for questions. [Operator Instructions] Thank you. And we can take our first question from Shneur Gershuni from UBS. Please go ahead. Your line is open.

Hi, good morning, guys. Just two questions here. First off, with respect to the new project that was announced today. I was just wondering if we can sort of think about this, I guess economically maybe peeling back the onion a little bit here. But, as I sort of look what you have announced, it seems to me that it's a synthetic takeaway solution that effectively helps the producers move their gas and NGLs are just hydrocarbons to market. But, you basically bypass the bottleneck. Are you assuming that's correct, when I think about the economic impact, does Enable effectively -- is synthetically increase your processing capacity without spending for a new plant. But, still gives you the opportunity to capture part of the takeaway margin out of the basin. Or maybe said differently, when I think about it for a modeling perspective, is your net margins going to go up for volumes you currently process and positions you to still capture more volumes without spending as much money as it would cost for new processing plant and pipeline versus just this spend for this pipeline. Am I thinking about this correctly?

Yes. You are. This is Rod. Absolutely, you are. That was a great summary. We look at this really as a very unique way to provide not only transport out of the basin, but to continue to build on our ability to have what we see as an advantage processing capacity inside the Anadarko basin. As I mentioned on my call, we see a need for additional processing capacity and this is a very capital efficient way of getting that capacity. But again, a very important that we have been talking for years about the need for hitting a residue gas out of the Anadarko Basin. And we looked at a number of large pipeline solutions that's a very competitive -- a number of competing projects about that and we really stepped back and said, let's concentrate on what do our customers get -- what is it need to get to. And I think the CaSE project, the project that we are talking about right now or Wildcat project really addresses not only, I think getting our customers gas to the markets but they want to get to, but it provides them, I think the higher net back and it provides us, I think a nice incremental returns again to Enable. But, I think, again, you're thinking about this absolutely correctly. We have -- we don't see to take advantage of some steel are already in the ground to take advantage of building -- putting some new steel in the ground, but also taking advantage of some excess capacity elsewhere but really I think set us up for -- as we see our growth profile what we can do in the future as well as solving a takeaway issue out of the Anadarko Basin.

And Shneur just to underscore, you mentioned it and Rod has mentioned it in his opening comments about this being a capital efficient project, but just to underscore that's better than you lost is, that this project is indeed one that is more efficient from a capital deployment perspective than what otherwise be the CaSE to build transport and/or incremental processing capacity for this volumetric growth.

True. Very elegant solution with high return. Just turning to a second question here just you started to talk about in your prepared remarks about distribution, policy and the pending update. I was wondering kind of what is this things that you are thinking about and discussing with the Board in terms of how you're going to arrive it wherever you choose to be or you're going to be looking kind of it targeting a static coverage ratio and I'd say leverage ratio, how you're going to look at it as how much routine cash I want to keep to fund growth projects. I was just kind of wondering what are the sort of the things that you're thinking about as well as do you sort of look at it is -- what is it look like post [MBC] [ph] world later on this decade as well too if you have any comments, that would be great.

I'll get us started here. I think as we said in the past, what I mentioned a little bit ago is, we target again sort of 4x plus or minus on our leverage and 105 to 115 on a longer run basis for coverage. So we've take into account exactly all of the things that you mentioned where we're at the near-term, but also as we start looking out. I think Rod has said in the past, when we make a distribution decision whether that's the increase that keep it flat that's effectively our covenant with investors when we make that -- make that decision, it's one that we don't take lightly and we do intent to keep and continue to honor as we pay distributions into the future. So you're absolutely right. We're going to be looking at all the changes that we could expect to occur what the business adding to the next several years not necessarily just what we see there.

Is there a scenario where you run effectively with the higher coverage ratio to sort of keep more routine cash on hand, so that you're not in the equity market to fund your capital program?

Potentially, I think that we again, we'll take that in the consideration as we're looking out with respect to our needs over the next several years and that's why we've got a little bit of a range here that we talked about in that 105 to 115 on a sort of a stabilized forward looking basis.

That's correct, I mean it's going to be highly depending on when projects come online or the -- our outlook is on future commodity prices and activity in and around our footprint and new opportunities.

Great.

I guess maybe just to underscore again we don't intend to be a variable with respect to our distributions and to make a distribution decision or election that's what we would intend to have carried a bit.

That makes total sense. Great. Thank you very much for the color, much appreciated.

Shneur, thank you.

Thank you.

And we can take our next question from Neel Mitra with Tudor Pickering. Please go ahead. Your line is open.

Hi, good morning.

Gross margin, Neel.

I had a question about economics behind the Godley Plant, so are you taking commodity exposure once the processing plant and the pipe or is the backstop by a producer and a fixed fee contract, how should we be thinking about that?

Yes. We're not really taking commodity exposure on this. Again, as we talked about on the prior question, we really look at this as a way to get gas out of the Anadarko to more liquid markets, preferred markets by our customers and so now it's bigger product more along the lines you discussed in the last -- on the last question.

And is it more capital efficient just because the Barnett has a lot of underutilized processing capacity and it's cheaper to contract with ETP than it is to build a new processing facility or is it really…

It's a combination of things. It's a fact that they are already with some existing pipe inflation that we will look into -- there is -- again there is available capacity in the Texas market that we can contract for. And then, again, the fact that we can move this new production coming months whether it's the STACK or the SCOOP, we will have the ability to move that gas through some expansions on our system and new pipe in the ground.

Okay. And then, when you think about moving the gas to the North Texas, what do you think of it is as a desirable place to be ultimately where is the end market where you can move that -- the gas towards north Texas kind of demand there.

I think the key here is really customer wanted to get to the Tolar Hub and so this provides that the ability -- that we started this project with thinking not about the pieces, but where does the customers gas need to blow and needed to blow to Tolar that was -- that was the most desirable location. And so, again, we think that we provide a very creative and customized solution to get that gas to the Tolar Hub.

So, this is for a specific customer and…

We have not been specific -- not been specific as to customer or customers [indiscernible].

And the other thing, I think the other thing that kind of you get down to the North Texas market that infra space system and I take you to a number of other locations and so that area in North Texas to just our dropping out form. We will effectively help facilitate the gas due to a number of other locations across the infra space potentially out of Texas as well. So I think it's just a very attractive hub to be at that can facilitate gas movements to a number of other markets.

Okay. And just one last quick question, how long is the contract for on the processing plant?

We've got a long-term agreement. I think we leave it there. We do have some confidentiality there. I think we will it there. These are long-term agreement then we do have options that stands those as well.

Okay, great. Thank you.

And we'll take our next question from Gabriel Moreen with Bank of America. Please go ahead. Your line is open.

Hi, good morning. Not to beat a dead horse or I guess in this case a Wildhorse. I wanted to ask about you had mentioned basically while Wildcat pushing out Wildhorse. Clearly, Godley is not the only plan maybe it's the biggest plan on the Barnett with spare capacity. But, the ability to do this again and build a Wildhorse yourself maybe closer to the basin, any reason you kind of wouldn't looking doing as we can when the time came we kind of comments or why wouldn't you use, I guess some slight capacity in the Barnett again that just kind of customers specific, but it seems to be like that would be a pretty good way to maximize in that back if you are a producer.

Well, I think you get only couple of points, one is that we're trying to be sure that we're getting gas for customers want their gas to flow. Again, on our CaSE project, Newfield had some specifics of where they wanted to get to -- we're getting them there and our Wildcat project satisfies other needs. Again, we see a volume forecast that points to the need for Wildhorse, we have invested capital in Wildhorse and now will be to deploy that in the future for reserves that option that will continue to look at other ways that we can use utilized our scale position. And again, I'd like to think about our job is not to fill processing capacity -- our job is to build just enough processing capacity. And right now as we said in our opening remarks we still see a strong need for Wildhorse in the future and we are working on a number of potential short-term and longer term volume dedication. So again, hopefully that 2017 will continue to have I think some nice flow to our commercial successes.

And I know you're not to me -- given as for your specific cost or timing of CapEx spend could is this safe to say the majority of the CapEx spend here is going to be in 2018 on Wildcat?

That's a fair assumption, Gabe.

Okay, great. And just two more from me if I could, one is in terms of how you look at your credit metrics. And are you going to getting result kind of pro forma credit when you present this credit metrics for some of these projects as you're spending the CapEx spend, so 3.5x at the EBITDA right now maybe that doesn't go up as much as would be otherwise suggested given the carrying cost suited with -- lag time associated with this project.

I don't think that we necessarily need to -- if you're getting to do -- from a credit covenant perspective. I think our metrics we would expect to be able to hold in the desire strike zone without doing anything special.

Yes. Again, these are very efficient use of capital. Some already spend on the well will be deployed.

Fair enough. And then, on a totally separate topic, I think I noticed that MRT kind of file a protest at deferred giving inspires a new lateral there in the market that they want to build. Can you talk about that up a little bit and how that relates to MRT's contractual situation and what you maybe looking to achieve with that protest?

Yes. This is Craig Harris. And we have a longstanding relationship with McLeod, obviously, they have decided to move forward with their project from Rex. And that is in the thought process and part of what we're looking at is our ability to continue recover our cost of our rate. So in that thought process, we had to kind of layout impacts to our rate and the rates to our customers. So that I think we'll kind of leave it that as that is kind of end [indiscernible] process.

And Harris, that's something where you kind of wanted, I mean, look you may not answer this, but we want to ultimately negotiate with McLeod for the impact of that project.

We'll continue to talk to McLeod, as I said they're a long-term customer and we look forward to continuing to help them to project gas made [ph] so yes, we will always continue to work with them.

Great. Thanks guys.

Thanks Gabriel.

And our next question comes from Jeremy Tonet with JPMorgan. Please go ahead. Your line is open.

Good morning.

Good morning, Jeremy.

Just want to step back confirm with each projects with Wildcat and CaSE, our contracts needed to move forward, are you guys are at the point where you pacified, be able to go forward.

No. These projects are go or we're moving forward in contracts behind them or sign in the projects were supported.

That's great to hear. Congratulations there.

Thank you.

And just thinking about the Wildcat project then, is this going to be servicing kind of volumes that are proving now or kind of volumes that you expect to have to be there when the project comes online given your line of site with rig activity.

Yes. I think that's a great question. Again, we've tried to characterize that this will capture the drilling reduction out of the SCOOP and the STACK basins. And so we have said again way back that again or our customers going to -- I think the continue at the pace, I think everybody wants to continue at -- the residue gas situation has to be solved and we look at this as a way to help alleviate that takeaway constraint. So again, it's really the service growing volumes.

Got it. Thanks for that. And then, if I think about where you guys achieving the quarter and I think about your guidance granted the seasonality in your business, but if I kind of annualize your results here, it seems like you go to the top end of that guidance. And so I'm just kind of wondering what factors could prevent you guys from hitting kind of the top end as this current rate is very high end of your guidance right now. Is there any bumps in the knife that you guys see that we should be aware off, or is that just a degree of conservative there?

Well, I think Jeremy what I'd point to is, yes. We continue to have strong financial results. And we're certainly pleased with those had some great commercial successes. But also just need to be mindful of we do have some contracts roll-off that we talked about in the past primarily on online CP that will take effect to the second -- the next three quarters of the year. In 2017, we'll continue to have some higher interest expense as well, but -- and potentially I think as we've talked about last quarter or for the 2016 call with some incremental O&M expense related to new assets, but that being said I think we're shaping up for 2017.

Yes. You're making good observation and again we feel good about our guidance range where it is we have some headwinds, but we also see a lot of continued upside in the business if we don't see it. This year clearly we are setting ourselves up very, very well for the future.

Great. Thanks. And then, just kind of turns of the Haynesville bit here, it seems like some producers there are really quite active with the rigs. I'm just wondering if you could provide any thoughts as far as how you guys are internally think about those volumes ramping up some of those [MBCs] [ph] follow-up a few years down the road, any color there as how you think of that imports over time?

Yes. I'm going to start and Craig has mentioned like to answer. That's fine. Again, I think we're very excited about the activity we see in the Haynesville. I think we said on a couple of these calls that again we're seeing a lot more activity than we thought at sort of the commodity price. We do think we'll continue to make it ground volumetrically against MBCs. I think, again, it's going to be highly depending on how much activity -- how activity stays and how much if any grows, but again I think we see half towards filling up a big piece of the hole that we have on the MBCs volumetrically in that area. Craig, do you have?

No. And I don't think it also outside of the MBC that the activity in that area -- doesn't have a lot of other opportunities for us. We continue to look at the activity there. We're excited about it. And we do have -- we've talked about Line CP in the area that and we're looking at further creative ways to utilize that height to add value to Enable into our customers.

John, I mean, do you want to add or?

I was just going to say there has been -- Jeremy to your point there have been some additional reports out from the area, I think at least one of our customers is publicly out in the market and buying with their S1 filing. They've indicated some of these strong trends further underpinning the growth that you're talking about and the activity they you are talking about. So we continue to see good growth to come out of that area and continue to be impressed by the success that our customers are having particularly in driving down the breakeven cost out of the area $2 and even less than some.

That's helpful. One -- last one from me just with the 24 million of mark-to-market activity that you guys disclosed in the quarter for your reconciliation to adjusted EBITDA, would you be able to kind of attribute how much of that is -- from each of the segment, just helpful for us.

There is a difference in what is allocated to segment, most of it's going to be in the transportation and storage. I think it's roughly Jeremy is about 15 of the 24, the balance will be in the GMP segment.

That's great. Thanks.

Thank you. [Operator Instructions] At this time, we'll take our next question from John Edwards with Credit Suisse. Please go ahead. Your line is open.

Yes. Good morning everybody and congrats on a nice quarter and the announcement. I just want to sort of follow-up a bit on your comment about takeaway constraints in the area because we have been getting kind of mixed views from various players and some saying there is enough takeaway and it's just a matter of directing volumes to different markets and others are same, there is not enough and so kind of how are you thinking about what the takeaway constraints are today from STACK and SCOOP?

Well, again, I think what we demonstrated is that we have involved in those takeaway constraints now for the next -- for the last couple of years. And specifically addressing them with CaSE and the Wildcat project and again that helps alleviate a lot of that concern as we've demonstrated over a Bcf of takeaway capacity that we will have completed by the end of -- sort of the released projects completed in 2018. So depending on where you're at -- that the answer is yes, we've solved, I think a lot of that -- a lot of that issue with these projects we started talking, I think in 2014 about the need for takeaway, I think at point in time we're talking about 1.2 Bcf, now I'll admit that was before we start to see the activity levels in the STACK life. But I think we've gone a long way which addressing takeaway concerns in the Anadarko with the four projects given on the slides as specifically with the two projects that will be announced today -- the one we announced today and the one announced earlier in the quarter.

Okay. So I guess the follow-up to that then would be in terms of growth coming out of the basin, do you see Wildcat is something that would be upsized and you would take more gas to Godley in the future and if so you what kind of timing would you see on that?

I don't think we see the expansion -- the expansion there, I think it addresses a concern. We think the other projects that addressed concerns and we will continue to look to get customer's gas where they need to go. But again, I think again going back we thought there was a need for over a Bcf to takeaway and we put at least the Bcf in place. So I think we'll continue to see volumes ramp-up with our customers and we'll prepare the process of the gas with the new capacity that where we put on and the takeaway that we've identified today.

Okay. And so I guess that would leave me to what are you looking for now to restart Wildhorse, I mean what's the criteria there and any idea here or not you can give us with regard to timing?

Yes. I think again fairly one of the reasons that we have delayed an announcement around that was because of what the commercial team was working on related to Wildcat as John said I think in your remarks I mentioned in my remarks is we still -- we still see a need to deploy Wildhorse at the outside of 2017 guidance period, but it will be again we see a need for that in the near future.

That's -- similar criteria John, I think while we were otherwise looking and we're sizing that need for Wildcat or whether be Wildhorse it's going to be our continued growth in volume expectation about the system. So here you're seeing us effectively at $400 million a day of -- for processing capacity whereas Wildhorse was adding to, we've talked about a need for Wildhorse in the future. So I think there is clearly an expectation for growth in the future as with incremental volumes come to us.

Yes. We're not backing away from our commitment on Wildhorse. We think we have for a while now to deploy the capacity a edge strategy and we try to be in a position where we had processing capacity and steel on the ground to meet our customers needs when they bring their wells online. And again, we see that Wildcat solves two issues, takeaway and additional processing capacity. We still see a need as John mentioned volumetrically from our forecast for Wildhorse.

Okay. That's helpful. And then turning to your CaSE projects, I mean look like from the math there you're going to be dropping significant amounts of volume down at Bennington. So just curious, as far as, what kind of arms your expected to drop there because it looks like it sort of split. And then, where do you -- which pipe, there is two pipes taking away from there, has that volume been taking up by one of those or both and how you are thinking about the gas going away from Bennington?

Yes. Again, there is capacity of Bennington. We really haven't and we actually can't disclose how that volume split is going to go, again, the producer wanted to get to -- again, to Bennington and wanted to get Perryville and we provided that solution. I may say, I think that's a very favorable rate which gives them I think a superior net back.

Okay. Can you share with us approximately how the volume sort of split between those two locations Perryville and Bennington?

Yes. This is Craig. We have been asked not to disclose the details of the contract. But obviously, it's an interstate pipe, so they are secondary right throughout the system as well. So, it is -- they do have the flexibility that you would expect from our existing infrastructure.

Okay. That's really helpful. Thank you so much and congrats on a nice quarter and a nice announcement here.

Yes. Thank you.

I appreciate it.

And our final question comes from Nick Raza with Citigroup. Please go ahead. Your line is open.

Thank you. Good morning, guys. Just a couple of quick follow-up questions. Also my questions were actually answered. But, one of the things that press release says that -- the revise guidance also includes adjustment, other CapEx spending or other projects? Any sort of color on that?

No, Nick. I think that it is going to go through -- as we move through the first quarter and have a little bit better clarity where wells will be drilled, okay and it's just got a true-up. And it's just a comment that reflect all the nature of the adjustment.

Okay. And I know, we sorted of discussed this in the past, but in terms of ethane rejection, I mean, are you guys still rejecting, or do you see a lot of rejection going go on your systems?

Yes. I think, generally, where we can't reject ethane economically efficiently that -- for most of part -- our plant has been operating.

Okay. And just turning to the Bakken real quick, I mean, it seems like the volumes came off because of Wilson. But generally, have you sort of seen an up tick in producers sentiment, I mean just in terms of drilling out more acreage post apple?

I think there is generally a positive buyers in Bakken, but they just came off [Technical Difficulty] we are not seeing the activity actually there starting to materialize yet. But, generally, a positive sentiment with Bakken.

And we can start to talk about this a little bit more offline. But, is there sort of a sense of building that system out more right now. Or I mean, have you had any discussions with AXTO or…?

We are obviously a very important customer. We are always in contact with them. We are running and rating the area. So, we can continue to [Technical Difficulty] meet their needs up there.

Okay. And last question guys. In terms of the Wildcat project, any sense on the liquid side where most of the NGLs are going to have, I mean just -- are you just expecting, is it good at Mont Belvieu or any sort of sense on, or any other additional color on that?

I think on the NGL side, we have agreement with our producers with how we deal with the NGL. And that really depends on how they want [indiscernible] to certain extent along with how we deal with [Technical Difficulty] not really a straightforward answer.

Okay. That's all I had. Thank you.

Thanks Nick.

And it appears that we have no further questions at this time. I will turn it back over to Mr. Sailor for any additional or closing remarks.

Thank you, Savanna. In closing, I just want to reiterate how excited we are with our recent commercial successes. Enable continues to be a premium midstream company by providing customers with tailored, cost effective and timely solutions from well-ahead to end markets. Our market-leading position in the SCOOP and STACK place has been enhanced by Project Wildcat and the CaSE project. And as I mentioned earlier, we expect both projects to be accretive to our 2018 distributable cash flow. Enable has contracted over 1 Bcf/d of market solutions out of the Anadarko basin in recent years and will have up to 2.5 Bcf/d of processing capacity for production in the basin by the end of second quarter 2018. As a result, we are well positioned to capture additional business in and around our footprint, as we grow, we will remain financially disciplined. We will focus on deploying capital efficiently, while maintaining a strong balance sheet and consistent distributions to our unitholders. Finally, I would like to thank our employees for their contributions and continued focus on safety. Also, I would like to thank everyone on the call for your interest in Enable. Please have a safe day.

Thank you. This does conclude today's conference call. Please disconnect your lines at any time. And have a wonderful day.