MPLX - Earnings call transcript Q1 2020

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Operator

Welcome to the MPLX First Quarter 2020 Earnings Call. My name is Sheila and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions]. conference recorded. this that note is being Please

I Kazarian. Kristina, turn the to Kristina call over you will now may begin.

Kristina Kazarian

Good call. that the webcast be morning MPLX first under mplx.com quarter to and the XXXX found Investors on and The this accompany conference slides synchronized call can welcome tab. earnings

Mike President other management the members CEO; call Beall, Pam the On Hennigan, Chief today of team. are and Financial and Officer;

that follows. may there results Actual to X. session with we Harbor well from that Safe be actual We Factors included are invite It’s filings results and as what today. disclaimer during we SEC. expect a on differ read reminder cause as materially could during that statements our you differ forward-looking the statements Slide and the will non-GAAP making the call to the question-and-answer

I’ll Now, remarks. to over over call turn for Mike opening Hennigan this

Mike Hennigan

thank Good morning Kristina. call. our Thanks, and for you joining

you to this with essential provide and safely done change continue for our professionalism properly other products to this important those taken measures. has we the the with by for how flexibility and the on Let those all of steps work we some hydrocarbons start of for all affected COVID-XX and the we've that impacted current and social rely employees which us excellence. sharing our the me services. has demand to which to response crisis, with provide commitment in ensure which implement home, business run To employees that is must a safety I the health from continuing appreciate you've run company you in we employees to thank everyone, every and who we by those space many our to and approached operations protect need employees could to start distance I be they working services to especially of onsite day. asked work who who our to better Thank and mid-March, and shown so have protective have want

we to grateful NXX for working on country, the healthcare everyone is of different masks quarter the the XXX,XXX support of MPC the XX are to our frontlines across This hospitals donated sponsor across country. Second, efforts our this pandemic. workers

of later support We efforts MPLX's global the call. some in share will

through late worked this dynamic as quarter impact situation we to and progressed demand had impact strong the pandemic we relatively March. by of price As COVID-XX quarter, to tensions. to business very destruction adapt in created oil the began a MPLX the

quarter. Earlier $X.X and prior the million EBITDA the XXXX reported today, to consistent environment, by target we reduce million. of are proactive taking quarter with year $XXX for In first first adjusted operating expenses $XXX we by XXXX approximately which over this is of billion, annual capital our forecasted steps

Today, most over combination the reduce may was underway On by the $X.X has the call, our earnings When identified of growth Last quarter, our closed, to $XXX quarter million You high target our portfolio capital target reducing returns, since to additional approximately attractive that to XXXX focusing XXXX $X.X capital opportunities billion. ANDX the $XXX our to further year. $X billion. been our XXXX to capital our on that we expenditures, we we we streamline announced initial combination had last spending recall reducing grading that announced we million. announced process growth are approximately billion. with growth growth plan third

Mt. and to target the primarily is spend that related natural gas including Airy pipeline, projects already pipeline now capital the growth underway, crude expansion. Terminal the Whistler XXXX oil Our Wink-to-Webster are

producers’ have optimize existing needs continuing the growth. pipeline BANGL and are facility Also, and associated original to the assurance others project scope no flow we capacity while fractionation longer meet export is with for working future being Additionally, pursued. Instead, capacity, been to deferred.

our reducing XXXX are to announced by also approximately capital net $XXX we target $XXX maintenance We million million. about that

and is goal earnings combination XXXX This are continued of achieved of forward, achieve growth to growth cash free positive on through investments and both annual Slide high capital expected flow, net of Looking X. to be grading and maintaining inflection capital highlight a in distributions plan. we our that plan the our

As that positioned we our believe result, be financial broaden we our flexibility. creation enhance long-term options a will value to and

business the of many getting we've Turning security our to both stability cash of current been Slide X: flows and on the our Given environment, segments. questions in business

had stable made of RLFD Our service which up of fee-for-capacity our L&S largest of Logistics minimum billion. highly Distribution has fees Refining business part combined and or the and approximately volume was Fuels commitments. two-thirds segment XXXX $X.X our EBIT approximately with EBITDA. Logistics of and business combined a a Storage RLFD, The MPC's This combination

Similar stable L&S method business with our RLFD, investments. fees marine our and businesses to pipelines commitments. crude are primarily terminals equity The refined and and service fee-for-capacity certain and product volume minimum with remainder of highly includes MPC

MVCs refined substantial Our MPC of our and volumes. and XX% by are backed approximately pipelines product XXXX crude represents

processing Turning to closer and Marcellus provide our at percentage represents The Utica is in vary. largest region XX% Marcellus backed our or segment. our one-third Appalachia characteristics XX% G&P, of and Mid-Con G&P is XXXX of XX% Southern Processing MVCs. We respectively, Southwest backed the MVCs Gathering approximately look capacity region within EBITDA. Slide G&P processing MVCs and by capacity is remaining the capabilities of and backed X: the by Processing a by the of regions in MPLX's

and have programs significant hedging producer XXXX. key Our XXXX in in place customers

is of our hedge additional also The support improve The public the lining into current decline for that production announced natural producers the provides to in sheets environment. well the providing to gas, Northeast balance for is it opportunity on-purpose In gas production price further associated especially the and an Permian natural the in to the crude customers strip addition, last liquidity their producers. gas and XXXX gas being silver future. to production expected are week, their their as plans as largest measures maintained

we I MPLX this X: In to Turning of Challenge how moment earned a significant to terminals. Energy corporate STAR XXXX, at leader. take a some to on focus EPA's and comment ongoing remain responsible an our Slide several recent has will been wanted always Award achievements. highlight

have have effective Protection We and workers National below XX of Statistic or VPP also implemented maintained Program employers their Labor sites OSHA's for who VPP. industries. have illness that under management and respective systems Voluntary rates been health recognizes safety and now recognized injury and Bureau averages

and the has professional As us created unprecedented an ways. COVID-XX I pandemic mentioned our unique of help in It for challenges lives also the communities many. in earlier, personal opportunity has created to

for the for the area. fleet emergency provide Pipe to relief and El to Paso, Texas, that everyone El those an on Line nursing crisis. regions. are homes this to are the local proud transported responders we in medical are Again, its Airport supplies pandemic our at In of throughout do transport our Paso to donated Marathon supporting contributing working and organizations staff grateful meals frontlines part operating clinic also mobile to first by

the Pam Now, let XXXX to quarter results. call turn first operational financial discuss our me and to over

Pam Beall

and billion, quarter pleased results $X.X that leverage distributable Thanks, and I'm distribution coverage X.XX times. Mike. times adjusted of first to of flow strong strong cash billion report provided of X.X with continued which $X MPLX for of EBITDA delivered the

COVID-XX operating steps our our by and volumes previously, business spend offset As through to Mike capital announced lower proactive caused forecasted we reduce environment. the assets to impact the expenses mentioned of expected

Logistics downtime business barrels highlights. approximately X.X increase the averaged pipeline Terminal Slide per first some X quarter at versus MPC's of XXXX. the first an barrels provides segment the refineries. X% Storage day, a decrease quarter, per of first to day Total for quarter of decrease X% This of throughputs million and X versus averaged quarter and attributable was unplanned million primarily throughput planned XXXX. of

we a the the project, joint progress. XX% equity in Wink-to-Webster oil continues which During first venture have of ownership crude the quarter, to pipeline Permian interest

pipeline committed progress. XXXX. expected in in MVCs, XX% capacity in to of capacity with than which committed that more system, up continue We the day will gas placed Whistler which XXXX. contractable second Bcf of also XXX% the project of per is The to expect The pipeline project, the of with MVCs, half service half first be natural X the start to is continued is

X.X and representing volumes This day, Processing related XXXX. quarter a X.X Slide averaged was versus first the producer volumes downtime customer first driven business cubic period averaged of per per gathered decrease last feet billion segment decrease primarily Utica Utica and cubic unplanned quarter XX Marcellus in X% Gathering a by to region. X% our year. day, billion dry the feet provides same a highlights. gas versus increase Gathered

which versus placed per the primarily day, processed by the Sherwood in cubic of billion volume at our fourth new increased in year feet had X% quarter volumes same XXXX. X.X two to last growth Quarterly driven plants service complex, quarter

averaged XXXX. the quarter an the cubic feet billion first Marcellus volumes day, X% barrels online XXX,XXX and over representing the per quarter came of that first XXXX, day processed fourth X.X by volumes the over increase last quarter in increase averaged driven Sherwood Utica fractionator per primarily a year. Fractionated of X%

of X% average Utica of first to the quarter per and XXXX volumes Marcellus barrels fractionated day. increased an XXX,XXX over

our Slide adjusted segment contributed segment of was million, EBITDA and on was in highlights billion adjusted $X.X Processing while Gathering to $XXX financial Storage and $XXX EBITDA quarter the Logistics The Turning Adjusted XXXX. for XX: EBITDA. first the million

times unitholders. approximately we of This flow, the our distribution and to we'll the of distributable $XXX $XXX X.XX return billion cash retained of and resulted generated million DCF. in quarter For approximately $X.X MPLX for coverage provides quarter, million

The by first from $XX as Logistics of bridge quarter XXXX pipeline change driven on to segment business. XXXX. increased and the in quarter volumes the marine The the Storage Slide year-over-year, adjusted as in primarily increased well XX shows EBITDA growth million of the first

and driven growth new average decreased over fractionated from and Gathering into offset $XX segment in processed weighted service Processing placed the primarily NGL past lower prices, year. partially by volumes assets million, by The

ended of facility, billion XX We provides times MPC. quarter information. facility X.X summary financial and $X.X the balance with loan with approximately and on our leverage and Slide on bank of $X.X resolving intercompany a the ratio sheet available key select available highlights billion a

highest continue flow a profile. capital As credit focus. financial investment increase This to long-term we grow our to and disciplined expect grade allocating strategic we projects free cash us approach maintaining with an forward, to by investments should investment capital coverage look to allow while the distribution return flexibility

me the back Now, over Kristina. turn let call to

Kristina Kazarian

Thanks, Pam.

plus additional to a to question re-prompt Operator? now We that we questions. the we open as follow-up. will may call limit for that, With for we As open questions time the yourself call permits. ask questions, one you

Operator

[Operator Instructions].

from will Our first with Shneur question UBS. Gershuni come

ahead. go may Your

Shneur Gershuni

demand talk we think the Evidence last widely the during significant of segment the congratulations how you off, ahead segment your think kind sure the start role. or of can we about you months. But said Lab first to environment. some improvements, I'm is seen the Maybe about given much Mike, L&S talk off, in repeatable if of on in both congratulations. it wondering that. nonetheless, not was a I want have green can was refined and environment. But It’s this on if of shoots, new color by may third-party of hard about -- has do UBS QX that with in confirms is presentation Slide put the the kind as EBITDA around But kind that performance broad product I MVCs I of appreciate on wondering week-over-week study capacity MVCs protected the XQ two were today at basis. we owners? sort that it’s QX fallen X. look maybe MPC some I differently And to And when in reported

Mike Hennigan

Hey, Shneur, good question.

that we the one around since little color do MVCs more asking give bit in So, general, that has things the to been everybody a tried on was of question.

more high-level numbers. on Let the me you can view color and give Pam then give macro a on even the bit little L&S the

a We general gasoline but at bit that it off, a Gulf had XX% high reduction jet everybody the aware call first puts around in bit a on little the XX%. floor kind little less hit of pandemic. average and West diesel of that about overall of Coast, in for more a demand dramatic a said I a result position, kind change of So overall, it level, and the is a gasoline mean fuels as nominally

go. a that of X% to we're still the bit seeing depending XX% have we little maybe cautiously way to a on area, optimistic but We're recovery, long

we XX product and over of million is recovery year to So, average At cautious year light over XX X the optimism we of crude time, the barrels have starting occur. have still inventory average. X million barrels that the same

ways long guiding the minimum a So, at there's continuing still MPC is in quarter. to second go. rates

two-thirds MPC cut to the has So, system capacity. basically back of about its

is that impact So are L&S has which asking. you the business, an on which --

our to like more give numbers that'll Pam couple let a into me you look that let what more bit cost remarks, would -- that'll the in prepared little that add you So, quarter. a give insight

Pam Beall

Shneur. Hi, Yes.

stab at we've EBITDA commitments a impact be. volume what take As for would were might for minimum full at at a to give tried you if quarter what the Mike that said, to be sense looking we the

not do Now, subject we lot MPC not to to have the volume swing. fee-for-capacity slides to also and all are MVCs. in we a tried we at about the volume we hit provided that took quarter. But services the stab that of for them and it'd to quarter commitments to highlight risk A are entire were that that are and EBITDA million be the volume $XXX at minimum for think subject if

remains consistently that is basket, we at One a for XX The NGL million other have that the just NGL every provided sensitivity. past change in $X.XX we've about price want year. other highlight, sensitivities. And the in the about price it's sensitivity thing I to

you if gallon, so, the we're $X.XX about quarter, average experienced think a $X.XX that first about right and about And was now our gallon. we a

So, $XX would be probably here if we to quarter. the somewhere million for held around that million the the in full quarter, second quarter the $X.XX for for change second quarter $XX flat

One Shneur a from I while wanted highlight to of we're that sensitivity number about just investors. questions that had other We've curtailments. thing talking about is

curtailments we $XX based the to million that we at the on moment, quarter. as could just much the $XX be think see So, in as million that

about, second official those the to some quarter, are for giving you helpful that full could quarter use just for of be that if giving part sensitivities -- not you conditions So you but not want for assumptions we're the or trying if to we data. quarter, these for guidance make it to put we're remain the guidance only the might give year, thought

Shneur Gershuni

appreciate do a helpful really there. super Maybe and was transparency follow-up as That the question.

expect assume we CapEx cash XXXX, cash steep around after free how distribution far comments reductions say positive didn't just about should we this but flow pretty flow steeper for be to that thinking. Should year? some announced you about that to you You you had any than And XXXX? that were there also XXXX, you're in Is close color or about for how thinking XXXX. that we probably neutral be

Mike Hennigan

Yes, Mike. Shneur, it's

one XXXX thought could originally said So, and pretty predicated to yes, be the little a obviously way by We on there or it it'll be close other. that get your is, would point higher had on was bit we capital we paper that the number.

So, your point is well taken.

rest number, With associated the considerably on gas going a of see remarks, prepared has to situation the the we're the lower just gas plays capital the have to out. result the as year we in the natural of Permian, as cetera. improved Obviously in how et of shut-in mentioned

we about program major the to of BANGL in -- original the longer one the want and capital project really So, be clear changes I are is this pursuing. no

had we FIDed and but Wink-to-Webster, project. FIDed Just Whistler reminding had had FIDed that not BANGL we everybody we the

committed flow with that the still use But people producers take servicing that just changed of to some assurance. that working We've that, not we're with we're our to away to want I other existing some from pipe don't parties. view

sure there's producers, solution make to to the interest now still row. outside pursuing, that been we which the times that scope for want we a that's capital going many So, And has the quarters quite is of the an at couple in what a market know not original Bellevue. in same for considerably. we we of area time, wondering said changes have I lot a about are a

such and expectation where project that's requirement needed that situation at is that's right we're that for capital this point. the change, So the The still to volume headed is the such holds. all

solution. overall, committed So NGL still we're to

the putting included However, is deferring here we that's guidance what scope original point, on our or this the have capital the and we're a to reduction. side scope at in new

you. makes can significant So, pretty sense you result as to a that see all Hopefully that. a of reduction

Operator

you. Thank

hear Morgan. we'll Next Jeremy with from JP Tonet

may You go ahead.

Charles Barber

on Charlie Jeremy. is This for

some last 'XX. cash up the in you're that on comments flow I following of still targeting there. generation Just free understand

what that’s kind times view as in on you've at right that capital allocation view relates past? X buybacks? you how down your curious might level about year, as versus you how following the it to on that how impacted of leverage the of the is And then kind that, recent Just if next cycle, of the look talked influence leverage

Pam Beall

question Yes, so additional Shneur asked potential should let the EBITDA. me have impact about just to thought highlight one when that shared I the

get to free cash flow of positive and ability starts the strength obviously, So with to EBITDA, that. the

we offset we operating here of EBITDA mentioned, impact mentioned that's the to across Mike of we help to going And going of expense sound as so significant what million volumes so reduction, lower as $XXX be second also portion is quarter a think have today, system. in a the the to

I out free we wanted flow. our cash as that going be impact. that strategy That's an talk get just of volume to to So, element to offset important there too about some

think there then is sponsor are And that and few we them. investment credit are But free distribution we flow, just have, a when and an cash grade profile our maintaining about managing one important. of maintaining capital to our certainly levers

there, at leverage it to very think go leverage, level, we a would recognizing bringing we higher comfortable it back comfortable seeing we up when So where permanently, are X.X we're down. feel we'd would times, not about be be that

leverage. longer Over their term, And in comfortable leverage think we not space down, moving up. I been the with everyone the feel has

operating-in that the times to times we comfortable And area future. so is an X X.X will in feel

we'll shareholders buyback. reduction in use we'll place if we we'll And it the excess will that of form that to nice unit to a which for flow, return where if to be we or when debt have additional cash get determine then have, luxury

give the little flexibility to less to that in a will us whole best for value system So the unitholders. financial determine create leverage how getting

Charles Barber

second a CapEx your program. Just question on

through You kind of talked XXXX.

XXXX. curious any on on level, Just thoughts, high

billion in was deck. last put quarter's slide you think that I that number $X

Just curious potential if there's any on deferrals? thoughts there

Mike Hennigan

Yes.

a itself given think we're -- of mentioned, there's way yet have see to lot continues out. I haven't But long that we pandemic earlier, to how as on have to recover. still starting play optimism play a XXXX will as We color we cautious said, I here. out where go this Like I

to the we bit we're So, XXXX see out plays now, we'll where year progresses give this little then -- XXXX as concentrating a just on be. get how more disclosure on plan. right will the And and we’re and

Operator

Our Spiro next Credit question Suisse. will come with from Dounis

Your open. line is

Spiro Dounis

go the Just like want we Look seemed a to like to tangible the tabled Northeast processing Northeast, expansions. same has Northeast time you’ve if could. again. some it potential growth actually At

guess I see going about So pivot Or a Northeast the you some forward? made how you you we are could diversify allocation thinking basin? to Have actually point? back within capital at decision

Mike Hennigan

bit Spiro, producer associated the gas flow the with view that obviously I on gas. expect think a still that previously changing reduction situation the us we to was amount for I we environment. a stated stable stable on community of in many was previous Northeast current the quite mean and even is calls our cash in the that be

or or what the as near-term. even above strip all And see, community. like everybody kind that and current in along. the of been obviously has north of And that's absolute it’s concern level for But we're changed. producing so. some to Northeast maintain does our in price stronger opportunity now can to looks been if slightly position XXXX $X of hasn't And the about the $X.XX There the So, that it situation, grow. the natural anything, gas is

along from all We has of flow the lot the a be think there. you've community think so, -- changed to -- maintained. But disclosure occurring a as is I as gas far think the absolute was And us. heard to changed thought going we the hasn't would we producer thought as for up Northeast source dynamic we a good I what our it on there. of stated view but be quite cash So situation price, bit

reduction this that been this have the for in situation. never and there gas was volumes But up itself a even now security bit little in We more, out to played there large gas prior obviously situation the prices going to Northeast. there is volumes be a a believer more has

Spiro Dounis

point just a there. Switching system us at to of update the build to guess sort bit. was you that changed on I goal strategy Permian just has now now. little out and I broader look the can know super everything one

in curious the where just Just related side augmented and and you’ve moving thinking of that you’re the the fracs, around frac equation. then maybe stands forward that it still that that like context sounds And and with BANGL strategy?

you stay the can board. clarify curious, that through new two existing offload commercial pipe, on the to walk driving on to those actually are else's to can provide assurance. Just you BANGL us partnering to you onto a NGL degree pipeline? projects planning you there interest an the really flow Are on someone some on plan was And about just NGL talking

Mike Hennigan

Yes.

albeit of that's first to on to the Permian slower. going now the question, still the occur, So part we're committed growth

wanted with So the the in long-term We still have we’ve been one you’ve business several know, short-term has the about volumes. to low talked the a not as the situation crude unexpected. discipline to the changed the where our because capital expectation for the still things much in was have is that hesitated and of Obviously larger heard surety a capital around that producers area. do trying in that. commitment commitment to and price our is putting as and for you in Permian investment the XXs, current scope the we're we view original of good is, that adapt for a quarters Well, to obviously we've

won't But had the It solution. the we an we just to on. we be out that committed to there existing still scope are and early committed assets working are are still with original So, that envisioned we're area. NGL

project solution our his far team give Tim the you can't do But together. for like industrial is believe, the I So, situation commercial all putting as working NGL along the whole lot and I as a I said, as there still logic more holds. on color

little really would producers commit along adapt had Now the we tell we in the needed the as our full the there. of is happening certainly think requirement volume And that pace that scope it'll as not the understand. is it, a I to that mind to project. of part until are commitments market, is be this which and be kind environment, volume you such we we of sure we've slower to slower wanted with were And what that current I would all understand adjust. What's the volume in and that's the therefore capital commitments obviously, what we've done to

believe still in in believe is changing. that it, goal, NGLs industrial the producer what's for how scope the outlets believe So Overall the of just in also projects. we logic, still holds still attack

Operator

will from Blum with Wells question come next Our Michael Fargo.

is line open. Your

Michael Blum

that of wondering especially you improving, if actually commentary it segments. this fundamentals you since more discuss came like the wondering took little gas could more the I quarter drove your just could most but was are for little I'm impairment? if like gas you the write-down it -- a related and especially seems talk what write-down a seems detail about into

Pam Beall

to was of we longer the term recognize. which And to themselves. of us caused I'll important Yes, just look thing the an the that note to in a event, triggering And write-down primarily impairment goodwill, I it assets think that's Marcellus, it's due at really, not an forecasts. had

with in demand we and the cases examination well prices, the in in sheet outlook themselves. more the the price, prices change change rapid our as of an as caused the the NGL rapid concern so just commodity value goodwill for on it's stock what over assets And balance had, the limited is that the a the

Michael Blum

question $XXX that Give million me the then operating detail little -- second on a Is more expense of from, And where's Okay. that come reduction. guess that guess? I I to and...? is my going

Pam Beall

Yes, we have and the And the really out And things one expensed. between things all that Logistics we that Storage of expensed MPLX. projects. Certain and projects was just and say I'll they business. it different that of it's the -- ANDX capitalized would we some was of capitalized, segment

So, a expensed certainly opportunity capitalize. that we projects money to on large population opposed are of have to spend as

there healthy for a opportunity to there's so us And the reduce spending.

that's projects to so large -- that way describe small the it. what is to And number of relates

was on and the All business. of it Logistics side the Storage of

Operator

hear from with Cho Christine we'll Next Barclays.

go may You ahead.

Christine Cho

But change too at stable I'm event? in but through of lot early and roll it it's on not what we then, probably timeframe? income a necessary crude you time it's I year were guys diversified. them because those more sure to the a the that lot some let into and we're to more the for What a the to the how be there's about going that about MLP. going pipes thinking Should expire level a MPLX once was understand smaller MVCs is back MVCs whereas thinking or legacy at place this, are pandemic were that if does XXX a bigger, now think option always IPO off in MVCs XXXX that is products put just an you provide

Pam Beall

majority expect an those of be Yes, in we contracts. contracts provision -- the extension the would there's automatic to

we way just ordinary to in the expect structured extend they're those course, the would So today.

Christine Cho

basis? Okay. And annual renewals are an automatic the on

Pam Beall

No. year extensions pipeline. Five the for

Christine Cho

realizations And on a a of NGL bit think while seeing with we mark? then, having still sort I about the the commentary it is more expand the appreciate But your little gas should boost, in a are you're of And on question the how focused. conversations prices exposure your Northeast? a And gas producers bit wet are Northeast. given you can what

Mike Hennigan

Yes, Christine, this is Mike.

is, wet refining under a the So, U.S. crude a little how running price place minimum. is price question and normal does I'll is, more of much comment first off. the The change normal. price gas NGL unknown result the Obviously, price where is a at pressure and NGL quickly to does as crude than return then how system

shelter-in-place So, to will the expectation result propane demand reopening and coming be situation really at us the going how pandemic, itself out. of be recovery of as as is don't prices long point up a our I is will the the economy play this evolves. that know of any know

that's boost long-term. in an that, think in our economics And that. gas I gas better pricing Obviously is than view, believe are gas natural dry longer-term, unknown. we for the over least that overall the general, still of economics helping So, the at wet

extra very your low, prices is prices Pam that point, short-term, sensitivity in have propane You on get low. have that what pretty Obviously gotten commented to the pretty gotten for has boost. us. crude

and the well. the in recovery in health economy optimism prices cautious assuming direction, economy in recovery all the recovery situation and in a the right to But should GDP, assuming get a works a for NGL back everybody fine we as going see out

into in run says back at given second being draw the down half to get system if kind there's is expect a of butanes, the way, demand. the So, can we still we see that the to quarter at cetera point that it. minimum the actually April it pandemic refineries a refining to basically more does et for is in in there's run the actually out gas/NGL and of just We've bullish coming unknown stated to And less and were I the once continues as for how real minimum for guidance March for we've take think MPC built that how anything, the of of we some to went loss MPC at do that minimum. out occur, long time recovery while we weird long propanes inventories and quite that produced. U.S. that

out. see to we’ll I I long all the good plays to itself in have think gas So, general. how it's business watch for directionally But guess it

Pam Beall

associated for gas add gas there’ll there Northeast probably associated written as NGLs about associated gas comes out how just and less on-purpose that, a that, associated but helpful But I'll NGLs Christine, just gas has that Yes. and that's an expectation lower does producers. is down, so about result of in Southwest been talks the of as lower the particular. be coming everybody

going could even for it that up set itself forward, for seeing the in a So, though benefit well not today. NGLs price we're

Operator

question will Ujjwal America. of with from next come Our Bank Pradhan

open. is line Your

Ujjwal Pradhan

on here Does recovery demand and target Just free the to really that assuming on a in what level that full variables wanted your in there, at refined and trying distributions sort of levels, confidence assume the flat with recovery products to of get follow-up L&S XXXX flow from full target -- XXXX. to here? meeting of cash positive

Mike Hennigan

it's great question. So a

a We, we Board as it's on hold is lot advantage, it lower heavily do a thing keep time if debated right this to our distribution. of the that, it want something in competitors flat our to to decision. distribution because was obviously, the but and mode. that a felt that And growth very So we for call philosophy have taken it to the us off talked Board, and distribution a leave about you

in be we involved ball, having of be who everybody So this. the health like extended pandemic have Obviously, really to whether here. how a that's out. that. Very do time. to year time what out, economy this else nor reaction know will crystal to Christine's interesting much result, anybody safety plays itself to is there'll a a how don't the is the We going important is, to and decided question, this as is it itself a does see play most thing the And an

capital that it's conviction don't point, we question it like think to out. XXXX around we at just change, this of how possibilities right itself plays on So, that kind this strong a there's depending because the asked was for have number earlier,

to getting why stated it a be, as the of that's looked that but level as at in -- we the achieved to payout business, we be rule, capital would full XXXX. So we our want that distribution, and thought assuming general assuming we

from in recovery We'll itself close to occurs, out, you XXXX. heard have Shneur’s production and the gas could it we this depending plays what be and on you see. how comments, how As

strong our come capital that dynamics been we return just a our And pulled. it’s play. can we that I'll position to view you into get leave has with, projects. those level all So get think now, couple levers been our right a There's wanted down develops, very a there. to has that goal be to

the a thought our flat before now. hydrating capital right was and to has portfolio answer we for where So having was remain it distribution the been focus

Pam Beall

way, EBITDA midstream broken and yield payout a EV ratio, out value in like very of hasn't reward one different measurements. that there And that lot Ujjwal, at say relationship at a high to at add and growing time growth for of was of terms point between just for to instead a we're time, yield. people are I’d there high the distributions. market oriented as our to been now, But that really just fundamentally choosing And the in also I is that, correlation end. looked we've distribution would a the some

our flow of XXXX, of operating cash out the about we’ve in paid distribution. XX% So form

the it's end. C the So or right whether if across there you corps, space, look high we're at MLPs

think distribution more to have that ability over time. of They're that So are environment or sheet, distributions for looking in period long their this are have balance rewarding a fortressed interested companies really in don't that that sustain midstream the we investors growth. really

Mike Hennigan

are time distribution The of also the and feel in diverse is it's many many levels. one area. thing feedback would we've about investor a -- reduce I maintaining who times, who opportune an add said to this lot investors this There are current it. very strongly feel There

As Pam believe with be constantly gets the the right at year. at that But for area the thing it's high to discussed this us end. an it's stated, Board the we throughout are We doing point.

Ujjwal Pradhan

And Mike. especially that quick Thanks it. and associated in the see also comment in be on Got in your to your have comment how NGL earlier uptick your maybe that, would benefit from G&P driver and a here from pricing Northeast increase the in between environment, XXXX, to dry in competition it could to the in about versus current we you potential follow-up and the Northeast in the growth Northeast What seen gas gas system volumes XXXX? the production here expect on. in for the

Mike Hennigan

Yes. the side Again, of depends grow. to the maintain continue of Obviously was people demand how it was, a is, Northeast the think across to situation, on occurring plays it the I to lot out itself or questioning prior going whole economy. whether pandemic this

have back to there least now. out But crystal maintain don't most respond that levels side to normal still unknown. the it either equation. at now does view recover is, a think, bolstered of is and have I'll the I does grow think and Right and When say unknown U.S. to the going I we economy was ball was, how Our demand the little this that's it bit. Obviously, the is the that's thing still this.

Our don't same of focus always that is, we we things we those. worry at of the don't control, control, some conscious things but time realize about be can the control that the

as us it of plays the side and for thoughtful is be itself out. demand to So, of this watch part

Pam Beall

flow a customers. just And that under that been for have the generate let largest focus that's cash producers. among capital me are Those of producers investors, and consideration pressure the returner add that, remain themselves is big a been to another to free of and be the lot and are a themselves Northeast our

And think so, production flow going to continue and to means live or they're maintain grow within to I that. ability their within their cash do their

come position their factor. that that's with very mindful of more another as up their them So, prices, financial they're the gives NGL also gas supported both Certainly maturities that but natural gets higher and flexibility, well. financial and

another growth make future. go So just keep consideration you in strong have to think as they portfolio taking as about steps to the balance into we sure sheets. they're that's But mind that proactive

Operator

question last come Tristan will from with our And SunTrust. Richardson

Your open. line is

Tristan Richardson

commentary, particularly the around in sensitivity the L&S. all Appreciate

there. that MPC where sub there's the of of at Just sub assuming volumetric segments the all exposure? talked that dollar Pam, the impact minimums about were or pipeline is clarifying a question across most flow you just is to segment in L&S, the L&S,

Pam Beall

have we volumetric on. pieces we most volume focus to we as where that's have MVCs, is think but feathered some we other exposure well. Wherever exposure, we there is where have That in the the tried what

Tristan Richardson

to... And then you. Thank helpful. up Very just one follow

Mike Hennigan

just Marine, every team the can term go we as business is, you on is, color pipeline scorecard she tried do to then different. generically is is the has a whole well as as individual Pam add But terminals, to lot go you and It's some has And imagine, given into wanted lump across what I of This into or variations. pipeline. numbers. then you those Mike. MVC the asset a and and

Pam then refining rolled as the trying it our minimum, team river color have best And number we're what that we of systems banks you the to give will hopefully can. expect. So give the into the of as accumulated as and to here's that at up all and kind much one

We've As to move, NGL around given what we've gas, et expect. prices some here's given shut-in, that also guidance, sensitivity cetera.

question that of you as we're have to know lot a give wondering as the trying we color hopefully I So, people can. it been on and much answers that

Tristan Richardson

just around involved there. structure. I follow-up, complexity guess the just appreciate then last Really And the

MVC where highly MVCs current LP I guess sponsor sort reduce can environment but is mean and of this I to of are in the think the met in curious could disclosed I Clearly, with thinking, this unilaterally conditions those the been adjust LP. just the conditions. environment, make LP sponsor that? in have about the just adjustments sponsor the or past agreements certain any the that aligned, in

Mike Hennigan

so. think no, I don't Yes,

I MPLX a skewed people a far that’s will that hit to have XX that's one says to football price. think yard that of trying obviously the line skewed I as the people's mean people use little MPLX, The the view bit market to it's a MPC. I a in as analogy minds. we're have misnomer view MPC

to hoping So I best comfortable very the XX our feel XX. between we're hit that the lines, yard

So to a should I that know people but risk don't think that really that's it have questions, some get. that I it discussion does the get

Pam, cetera, renewals, then talked about, of contractual And the obligation et et kind and cetera. automatic

is obviously back. integrated coming distribution via MPC, the So, to MPLX

think synergy I and don't understand there's sometimes So people But is. as MPC as much MPLX. between relationship it a

Kristina Kazarian

in thank like would Operator? team will Thank additional you questions members joining be available you thank clarification of us and MPLX. interest morning, topics call. this have you that, for again. with you your Should for our today or on take And you discussed to your

Operator

That does Thank your conference. today's conclude for you participation. again

at time. may this disconnect You

MPLX (MPLX) 5 May 202020 Q1 Earnings call transcript