MPLX - Earnings call transcript Q3 2020

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Operator

Welcome to the MPLX Third 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] Please note that this conference is being recorded. the to turn Kazarian. now will call Kristina over I Kristina, begin. you may

Kristina Kazarian

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

during On you forward-looking SEC. question-and-answer Hennigan, and there that today. included results to non-GAAP making what Safe differ and session statements Beall, actual that the are read are CEO; the the expect statements call management materially disclaimer as Mike during members well follows. be and X. Factors will reminder and we may cause the we differ other the of today that It’s on as team. could Actual the Pam call our results to with President from filings CFO; We a Slide invite Harbor

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

Mike Hennigan

thank reported EBITDA. a Good versus call. Kristina. $X.X billion, second our slight morning for and of of you quarter XXXX quarter EBITDA third adjusted our for joining XXXX Thanks we increase today Earlier the

publicly partner units. an approval, program our make attractive $X with repurchase our return us naturally to Our quality retirement for will performance to and Board repurchases we Board our of on and our EBITDA us would unit third and the continued reduced. limited now units up unit during a the capital to on time, stability expense that our be execution can of common outstanding operating capital To be emphasis of company's allow our strict provide and authorization contracts challenging end, help underlying business, at billion we our offset highlights appropriate environment. to With and of getting reductions the holders. our common the what a opportunity the have knew this to repurchase value time for quarter program leverage growing of over By the obtained discipline, traded

positive cash Turning key to slide capital a four, continued flows our path spending to discipline. part of

be continue capital opportunities continue on XXXX our most returns. to of to $XXX achieve as We over track we focus attractive on with million, to the reduction

moment five, responsibilities on comments I around leadership. would sustainability corporate to some take a slide to and provide Turning our

of greenhouse combined mention As below a enterprise the result perspectives, refinement initiatives XXXX this our our important earlier gas of XXXX. continued incremental to intensity the established, want additional emissions XX% ESG to as levels announcement reduce I year, and two to to by

goal levels. our to emissions XX% G&P below from to First, we've methane reduce a intensity XXXX business XXXX established

climate-related perspectives slide work scenarios. related published TCFD is recently six, which on planning This published company Second, freshwater in compliant strategic we fourth MPC in we enterprises XXXX XX% expect to are intensity focusing to by Shifting on To combined efforts water. further conserving by of withdrawal enterprises to the area, an the scenarios report. highlights reduced since a XX% our XXXX, and opportunities over year engaged climate XXXX. managing it by and use the is additional and the report, the reduce this our

also We environmental, upon July, in sustainability and published social expands late aspects the XXXX report which our business. of efforts governance in

enhances as deliver. We the view ESG stakeholder customers sustainability and performance our continuing journey our pertains standards. XXXX the midstream with business sustainability report, to also to We team and published of supplement, Sustainability publication engagement Standards accounting sustainability commitment forward we to the or we shared employees, we value report Board, conduct process the and look sustainability With as our communities. fundamental within and creation, of our a of metrics industry-specific Accounting the XXXX SASBs how partners, topics SASB our specific highlighting it business

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

Pam Beall

Thanks, Mike.

times. delivered slide of of distribution billion billion, of quarter distributable continued to and X.XX EBITDA seven strong Turning which coverage third provided flow MPLX $X.X $X.X cash adjusted

again, Our challenging reductions our help results us of generate once for $XXX and quarter demand business, operating as resiliency as forecasted a well to strong highlight flow the million environment, offset continue adjusted the EBITDA. of cost underlying allowing cash to execution to of our

the this the For reduce with the leverage end We ended and quarter, second of and the to debt to flow, total in third third times. the quarter cash distributions we after investments unitholders. end we of generated from positive the the business use to outstanding of four quarter quarter, cash

some of at across Logistics quarter X.XX% with our Volumes with lower refinery MPCs of that During and business of pipeline XXXX, the Slide very or our maturities, quarter, compared debt at in XXXX rate, due driven Storage and attractive eight by third higher. refinanced notes were along XXXX, XXXX, refineries. coupons we systems & our third lower carried highlight. the primarily segment utilization quarter shows terminal the

in pipeline XXXX. throughputs terminal versus of both the increase quarter second However, we sequential and did see

quarter, available the crude the During to and Webster Permian oil Permian on is segment quarter. to oil from in crude Texas. was segment the achieved Houston, to completion main The the project service with commissioned to the Houston of mechanical Midland third pipeline expected to system shippers Basin Permian October, the fourth in connecting Wink be main pipeline

volume this its XX% with capacity joint system XXX% has venture. have contractible We of of equity The ownership a commitments. minimum committed interest pipeline

segments natural be capacity per project progress. bcf Additional with service also shippers offering to two more throughout project placed are is continued in volume gas XXXX. committed than pipeline day commitments. The Whistler further The to XX% service minimum expected

of the up expect in to XXXX. project the continue second of We start half to

a last venture in business optimized initial to quarter, takeaway highlight. XXXX. Sweeney, will Processing plants gas Texas. gas from joint to second and provide to expected in segment and West NGL Permian third largely use is infrastructure provides quarter capacity processing approach Gathering formed construction. Commercial Slide Midstream the transportation half Sweeney, limited NGL with Texas and existing commence MPLX Texas WTG's WhiteWater MPLX to the noted we This As service of nine

third the With the day, Processed online including exceptions, natural barrels global by pressure the remain volumes the reached increased third and period demand volumes Processed where volumes Processed volumes quarter averaged NGL of significantly Hopedale West historical the XXXX, Marcellus a price operating quarter. a during the Fractionated X% Gathered of well on XXX,XXX prices take respectively. their levels, X% driven increase in XXXX. remains natural cubic Texas gas NGL we year increased representing and volumes recovery. and borrowing per Fractionated per and lower in few X.X Gathered last as the X our for fractionator, the impact both record results, The increase they most than quarter a beneficial below Total can which base prices, increased as for realize volumes across and feet billion Record is futures of recent our came producer as Marcellus the outlook customers, redetermination. optimistic were volumes as Marcellus day. positive hedging and Despite where on were For opportunities with primarily demand the in advantage same recovery of a in XX% gas X% a over third footprints. commodity and

their to address continue to will improve expect balance term of environment sheets debt improving We flexibility. near the and apply their an to price producers maturities benefits financial

counterparties that's profile. should result among with a which the our consolidation We’re also occurring financial stronger by in encouraged producers,

in adjusted slide segment $X.X Logistics financial and while EBITDA. Storage highlights contributed adjusted third $XXX Moving Processing on to $XXX adjusted EBITDA the million, billion our of quarter was XX, and XXXX. the segment million EBITDA for was Gathering The

of The minimum quarter additional offset XXXX bank completion utilization revolver, the production third our in summary Storage quarter $XXX For and Mt. ended terminal pipeline segment and the and primarily volume billion This approximately distributable driven costs, $XX by coming Logistics at decreased MPC's due quarter, and partially slide four The we lower Utica the to by refineries. highlights the with shut-ins. balance lower plants million, offset provided billion expansion of to for select million million of our unitholders. due change available volumes information. bridge operating flow by quarter $XX year-over-year, $X.X leverage on billion the to driven generated financial EBITDA commitments, We a of and curtailments distribution volumes higher from third the sheet on a on times. and cash Processing coverage return adjusted ratio butane the Airy $X.X XX terminalling with shows $X.X Slide projects, XXXX. and quarter by the to X.XX of our MPC. of key times of facility increased provides and lower available and approximately primarily online, intercompany XX Gathering we'll segment The and partially expenses, increased

costs lowering earnings were undertook we several balance quarter, and These and extending continue after steps maturities. strengthen release. by activities During interest our the sheet, in to the shortly financing to our outlined

quarter, earlier, and target mentioned EBITDA, and flow flow our for after cash of generated growth after investments continue continued cash I and in distributions. to progress goal positive investments we capital our XXXX. in made As discipline XXXX, With achieving third free capital the distributions positive expected we for

units have this to the reach we that debt. repurchase we inflection we flexibility or As believe financial will point, reduce

credit growth to will leverage We we in over an modest continue profile prioritize EBITDA. time grade and with investment to our improve expect

timing, call our if investment business turn now $X including program be actual the the and any, several cash expected price to will Kristina. authorized implement back of number common unit repurchased, let market will available, excess opportunities looking The repurchase to outstanding alternative conditions. depend traded over units We And in to the units. factors, publicly our and me board on of common up of billion

Kristina Kazarian

Thanks, Pam.

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

Operator

you. Thank

will Jeremy Instructions] We first JPMorgan. question-and-answer Our comes question begin with [Operator Tonet session. the now from

Your open. is line

Jeremy Tonet

good Hi, morning.

Mike Hennigan

morning, Good Jeremy.

Pam Beall

Jeremy. morning, Good

Jeremy Tonet

Thanks.

about just past, areas talked buybacks start should bogey into you to thinking you've versus And if reducing before just to where evaluate thinking, divestitures JVs, how you between and of could leverage in wanted specific a back units? balance equation on the or you there number operate, as about you here And also off XXXX. leverage the geographical the well? buying going through start reducing is that know, in here we be factor you're would Just rationalizing the

Mike Hennigan

see by a remarks you on. this buybacks are we're is start goes conditions prepared point. we said option and the our What time off, with, moment dynamic evaluate, I'll it's to Mike, we going business to trading yield, at at off unit program as is right right MPLX going in XX-plus a at this preferred the know, going change to saying, continue Jeremy, to as first be

EBITDA as continues to long we term, we're we increase, is continue And you or base expect if the But - the leverage flat, plan, because naturally a with debt real-time natural our Over something to mode, has earnings quarterly over increase. if base to that going know, as in our decline keep plan stayed it progresses. to that calls time we'll calls leverage reduction make time. have we then

quite said now get and flow ‘XX. would distributions expectation XXXX where that for of was, occur we into emphasis this main Our the And was in to here. after to as for to that position free cash a our and some achieving after we we come end time have was We're capital.

goes to earlier for just what's going it. time went Board, evaluate to little best then to to That's continue out authorization why we're we're program deploy continue with as than and on, to the way the a thoughtful we we as be So our and expected. the

Jeremy Tonet

leg very the And how understand better to and I we over pivot you. cash increasing year should this online ramp about and there Webster Wink next That's to trying just year? Thank those with want here and first into I the to flows, guess, helpful. think to

Mike Hennigan

partners Jeremy of at we have spending. that the Webster optimize one capital things is looked on the how can the Wink all to done

the throughout as a are, of give instead going we Houston an our the early. of said, you the So time itself that that's where we’ll sooner. as at know, early, But process, portions to up project there to the then we're as early project could for up from will look capital, out. Midland the the we optimization it play XX, of whole the part was on we optimize of so as waiting ‘XX completed start segment update But to where start And going piece remarks, in XXXX. come progresses, in of different to segments more it's main

Pam Beall

just a I would I seller. Pam. And play not want comment its optimization thought just to repurchase. role a on asked unit a factor, add would whether you to would about highlight, have Jeremy, distressed that. Mike's in I the asset And we're

improving that deploy And we in the what dilutive and clearly to that would reduction. we hope extent debt first a, basins, And are so and we'll proceeds we'll be environment But we with want monetization. optimizing of in don't be an we the successful, deleveraging. successful asset patient we with to certainly some prudent to a price be call, absolutely

certainly as at using well. to they're So repurchase available extent some to would the unit for look proceeds that

So allocate we stand all our move on our predicated where all with to forward. grade as we want - to and of these credit that's profile in course, we leverage that opportunities to capital to respect investment prioritize, evaluate

Jeremy Tonet

your you share just That's I more with very one If thoughts to of recovery Thanks. trajectory across wondering any in, if regard could the helpful. sneak could you just systems? had other demand

Pam Beall

Jeremy. Yeah,

the volumes it of and quarter in business, the guidance MPCs Currently, in for terms and throughput. provide business Logistics the And guidance quarter some refining for of was Storage fourth will move the each the on its to it third. what certainly, our MPC as side Logistics So the lower segment, it of segment expects with than slightly does their largest relates Storage is guidance. the really

from mind. the So our and all as that's been out. what coming Gathering producer customers of very keep But certainly expect relates the across pleased see of of then certainly as to to it's some really, been the side been And have We've business, we the would in that for geographies. challenging reports Processing producers well. it

to you those an well. backdrop Gathering of supportive and very and we segment. But price think for that some encourage will So - environment at as look guidance be Processing we'd improving the

are area. We high running at Marcellus our very in volumes

quite take we X have certainly complex a And up could to when some Sherwood that Utica. is gas, appropriate Smithburg that time the ready but So full. in running we we fill capacity the have

improving So environment. will how able gas natural about NGL we're producers overall optimistic and our to price benefit be from an

Jeremy Tonet

Got it. I'll That's in back queue. very get the helpful. Thank you.

Mike Hennigan

welcome. You're

Operator

you. Thank

Our come will Gershuni UBS. next question with from Shneur

is open. line Your

Shneur Gershuni

just that everyone. morning, bit. off and Good buyback go Hi. back Maybe little start to question a to

Just you're can the is in balance already, the that at then flow unpack where we to at we expect And it's times wondering that given leverage be fact sheet at. and if ‘XX. four positive when free it, cash you distribution look after

Board? it as that all towards held around public go be And you pro the you format, know, buybacks? to towards going give instructions give you us more execute that. kind the of if it on goes could the if Is it, versus MPC a bit a little around of units? wondering percentage wondering color Just sense excess is - in there does that buybacks? can that us units a Is rata Just a you from

Mike Hennigan

Shneur, its Mike.

prioritize is What we we're was saying as to probably at So my our to reduce going disclose yeah, determination And this say be as we previous I I environment to we not of we XX-plus it to comments, the see forward, yield, as call vehicle. business the everybody set generate been is because going growth we've see conditions positive a preferred the that best It's our like business a see go it cash. leverage. a proceeds what's not there's us as dictate. in base the the I'd it's today evaluate way today, the like use do unit buybacks case In time, we those or that your right see trying trading we're EBITDA in naturally the we time, same making particular will at set our There's that. anything -to today question, is buybacks. market percentage desire to

we has our Over now Pam yield four go said times. market adjust, priority comfortable time, the different and think we’ll as grow. times, buybacks the that see down as many we unit our we're where based right earnings will something trading dictate at But that on conditions So we as the is but on units. have if

Shneur Gershuni

great. that much side How reduction in efforts. above year? And updated. question, expand a Okay, will bit, last of were original for across I if target XXXX? was on up translate changed the terms we cost of a earlier cost wondering was happening CapEx as at can $X follow time to that's a little your just the billion set outlook you MPC MPLX the your I think this has we it Maybe

Pam Beall

Yeah, Pam. Shneur. I'll that. It's take

reduction as year. And force $XXX MPC So and target we earlier, MPLX. we expense the reductions operating also of mentioned was announced on we're the the across this to achieve that million in then enterprise

reductions in with will portion that as associated workforce forward we the be part so primarily our And reflected separation of the of cost of XXXX. move

the year. about than We're So here. that expect when the we've will identified to we although for results. And was throughout some questions we about that XXXX, would then earlier. million we're $XXX an projects fourth targeting expect provide But million, report provide up larger update not we to be to CapEx. as which reduce CapEx, as would XXX And million. we CapEx incremental XXXX, the down we’ll we some $XXX other asked know, hard about that's is XXXX capital quarter still ready lower our then – been you spend we've would wrapping guidance, you worked

give it'll you year. be lower that But just this than ready not yet So guidance we're quite to Shneur.

Shneur Gershuni

Jeremy. can I do really appreciate And one, last sneak No, like one it. If I

any this is really positive strong well, for You seasonality expect had results should to QX next Or it as free there year. that flow thinking [ph] this too? cash reason think we some happen Is about? after year there distributions to be year, you've be can't

Pam Beall

volumes a side and will refining And was about the there so MPCs system. on the throughput. the follow, Logistics Well, Storage as volume I question mentioned across and earlier, outlook

third. fourth the is then throughput for MPC lower the forecasting So – quarter, slightly and

So keep mind. here expect were be corner in free first to we positive point, positive cash the in We third. negative on the fourth. your we're But that would flow, the the turning to half, in

So positive full be of right the around we know, quarter be modestly you for or the a XXXX we'll year. position for fourth think maybe to for

Shneur Gershuni

Perfect.

Mike Hennigan

One of to that cash trying the things were the drive we I to in towards ourselves we're a made that think flow market ‘XX. is, free we going communicate commitment to

know, a overplay we as As execute you're expect there we want bit getting standpoint authorization, plan. we're you we out, don't the to early. from got I - pointing continue to this, though, to little the

the a very float As of large public this is size at number the not you point. know,

don't I the just show for discussion But really do said, we trying we're we're time row to what getting quarters we're We're here. we over-hype to a So want we where said track today. of long a to on reiterate that. to were multiple here's going It's been there, that you headed. period where in do

it As Pam a positive, more to as why little full that's a position just get be will in to said, made for we were some a we’ll slightly resulting we getting we a get got I And will we go We're to ‘XX think we're just the authorization. where that, into we executing buybacks. bit of in. that And point trying year that. finally commitment on the disclose

Shneur Gershuni

safe Take appreciate have the color, and Perfect, really day. care a guys.

Mike Hennigan

Thanks, Shneur. Appreciate it.

Operator

Thank you.

with from hear Goldman we'll Mackay Sachs. John Next

Your open. line is

John Mackay

Thanks Hey, the for time. good morning.

there? of a just it circle to about XXXX. what how number? it talk overall How is again wondering pace the could And that wanted then you lower guidance pieces be CapEx should Just the little year-over-year. does bit depend moving But Appreciate flexible be might the the on recovery? on up much really, for if that

Mike Hennigan

can Pam and off in. start jump I'll John, So

Board with of we're So ‘XX. middle the internally our We're through that. process or in quite not the for

in ready any give that guidance So we're area. not to forward

tenants to discipline. going think is our, of Pam I going capital we're strict reiterating, one of maintain forward very was is what

be this committed we capital that as we’ll market have we've many strong if we we've a of to said, but in hurdle to raised goal set realized to think that that you become, a that, we're the generate generate trade, excess That's that’s it. use distribution. As back then been, know, such us the where keeps we where about free flow. market committed units. managing discipline we cash rate We’ll buy times, proceeds way are that a We're as our we we'll is now, around excess our committed in point. the way distribution, of asking at to that to We're cash its kind cash, right continues said

control. don't there's question the indications think we ones a on And is recovery. to online was is, hopefully that but you rather all lot I worry recovery that around things demand mode, about earlier. know, just personal are good will far way Again, this your sooner good. the rhetoric can reading mean, of some As that. economy ‘XX. where from of to my a planning philosophy scenario I do than people going control, market not Hopefully, vaccines we the it about, rebound And in US overall all some back as the in we're as later is coming The projecting. that

saying, here reached our in staying just going a have distribution. point capital. watch, I which conditions funds. is, expected. staying was to we're and to excess committed pace we're that which to starting we think the And I our first to reaching at and point. business to message dictate question, things. We're We're we've method where disciplined on how So what But We're the deploy on delivering answers we as the will we're main have

John Mackay

All right. That’s helpful. appreciate I that.

two follow today. and I'll to quick my Just keep it up,

quarter. in CapEx the on Just

So XXXX like your the a little has what CapEx kind coming in year-to-date guidance on year been. number looks of it's tight full

know, maybe for frame just something that? capital you of spending one kind Thank there. the JVs return the And, another you're really up and So if expecting or kind from of rest the of I you, was what's of wondering year of you happening like if

Pam Beall

John. Yeah,

interest. one for in to I difficult change a that forecast and capitalize little the of is is more think So things accrual for us expenditures, capital

and our back schedule But press so is give of targeted some release, to those press are the those, than you to items that higher if a the think we million. in release. of attached it's the out, I so number little this it's - last a detail adding $XXX And the

things see you in And considerably out, still the it, will we capital that on is you'll target lower intentional. back those we're fourth right for quarter. If have spending that

were I up the projects And As and had Airy we part butane larger that being the year, some some throughout like Mt. the NGL wrapping mentioned earlier up. plants Appalachia. terminal, of we in the Utica were expansion, wrapped pipeline

So half part you know, flow But sequentially – was in of in much the as the see first part the of greater of spending the decline and the fourth yeah, capital the we CapEx. cash into had reason our close were out year the year. go that's we negative That significant for also we year. a growth first why quarter very you'll

John Mackay

Thank helpful. you. That’s

Operator

you. Thank

come Christine question will next with Barclays. from Cho Our

Your line is open.

Christine Cho

savings give where volume how cost to actually relative Thank us If how were next And volume hit idea to MVC the Can against due free at remainder we an MPC the the quarter-over-quarter with was you of L&S level? I just of comments quarter with that year. of you're you and you generation expect whether cash levels could take through the about guidance forecasting at should up maybe increase much your any you. to about MVCs? flow think the

Pam Beall

part the always can of equation. be a MVCs So

from kind the protections we've the our of some of number large And of that time, benefit been in the a have are experiencing, and systems demand that minimum had shock volume when even weren't supported we've contracts in MVCs. periods by commitments. We we of

Christine. And so always certainly play, that's in

reductions terms in the But still we here and cost respect $XXX of won't break part with certainly did of expectation million third, that each separately cost operating that And In cost second reductions, to have third reductions. for probably play of quarter fourth cost XXXX, well, quarter. the segment. deliver out we an reductions for some as to important that

a have fixed and of a we've and a the the they Processing. a bit on we've portion refinery, benefit more The little Gathering and Storage of know, that the costs. had business have installed what than We been little operating that that's So Logistics high probably have significant they like flexibility side have, you plants that's on mini realizing.

the And so cost and we on we Storage business the than have probably Gathering and in savings of Logistics the side experienced did of Processing. more

Christine Cho

existing growing it. the And the world, then contribution given the assets changing against as natural the post-pandemic long-term flow for in think just from generation Okay, think landscape from should how guess you projects, cash growth a got I we the we about EBITDA? buy take about refineries, mentioned [indiscernible] of changes stocks to today, continued And that or term that cost your in CapEx we medium deterioration to on confident back as either savings? offset see lower more any should will and near assets, your don't structural the you preference be than with

Pam Beall

Christine. good Yeah. And That's a question. thanks,

well. it's idling as But we renewable about to if refinery, diesel, some we drop I - answer conversion to renewable in they give taken of And when chime kind of in existing Dickinson the so of can some it's a think significant the place at that about MPCs you of will Gallup as kind ask that others changes a with of the Martinez multi have in a know, part and And the want maybe assets. renewable operations fuel. like you and of those move fuel think products the diesel, refinery, we when our then

pipelines the we've feedstocks or now Midland. period that crude certainly feedstocks it for forward no of fields. about transported to transition specifically crude change flow to that MPC is the a time. the in on to we'll to And fact and then its and relates be Martinez, be longer talked and those EBITDA, And Tex a place a at because contracts haul, of as in in will protect some pipeline enterprise its for Gallup, equipped to look we then as cash handle expect to flow that we little Gallup Mex will the fuels, there supported as So actually refinery, moving New would cash the being that those

refinery. combination And at we there. believe impacted the of by Gallup be will not shutdown then Martinez, of And earnings the so the things

agreements the down with were time systems. protected legacy Andeavor, various the we're by So for ANDX assets again, dropped that over

We and conformed move in evaluate XXXX. continues objectives MPC for minimum of go that NPCs that out logistics volume in contracts assets to to the opportunities continuing project around place, have to there, to with as the to its some we're forward operation support December market. protection be And long-term

As talk that we when COX require know, talk to the future, and opportunities or/and oil, to sequestering an moving believe energy terms in into finished some well term moving services that products far COX the transition. to them, facilities, assets hydrogen in then we and energy space renewable And continue those support we kinds pipelines even does about the transition, as like transition, on delivering and and our markets the as a believe on to of pipelines, gas role and we will crude to feedstocks help of continue important long caverns will new storage assets could you of convert our of some things. operations, about serve

part need time, to industry of time. in lot will delivering adapted very for to Over we believe of continue be a over So, an certainly us. vital standards This and And we've has to it. assets those a who been changes opportunity resilient. energy regulations our

Mike Hennigan

so, to we're sight to on different occurring short to term MPLX, both the Pam's you comment story And in high as know, and in was the very is, I an part end think evolving is In the you of a the point spend going last world. structure where don't energy I'll short was I question. we the was long been add at progresses. term, known things one a quarter-to-quarter around cost it's at ourselves to priority to our priority, a the getting lot an priorities Christine, market, position important its your is A that structure the the cost that we're to over long of line well priority. day, that parts think six in end the continue COVID liquidity term uncertainty that made of then growth, it give the that that different that's At But question, least Obviously, us in end of continues. and and just to earnings of months want competitive? the was a your Mike. landscape. also at there's MPLX, But the growing cost the we to entities has Pam also the in believe for MPC higher term do structure. at the with to of at more we time but of the hitting going lose very point continue getting making how effort And at updates important and of see a the have the or MPC

Christine Cho

you. Thank

Mike Hennigan

You're welcome.

Operator

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

is Your line open.

Michael Blum

Thank morning, you. Good everyone.

focused? be Midstream Upstream My moving the So so, in just to ultimately talked in about playing or sector? is you're internally your question space. there, that to really, you a more just you're remarks, M&A the seeing MPLX in going you your do prepared are role if you thoughts do And see terms what think of

Pam Beall

Pam. its start, I'll Michael. Yeah,

very that at moment, be a in currency don't So I the think really we consolidation. would effective have

and sheet I our But not our and think that we'll sheet priority the balance to And to happening back will we free again, And here, what's our debt to is use space. our in take near be forward. think the check opportunities not units. our blind certainly we as evaluate move But - term use to free keep cash will cash but buy consolidation. going do balance we're there in be to in consolidation place. our use

are that monitoring What in M&A to predict. in unfolds. time, on might So that that point we'll certainly engaging look I'm this how we'll it’s eye but certainly we difficult And be keep at an saying that. actively not like,

Michael Blum

Great.

second a question. Just

any Thank ask had if on proceedings you to the updates on pipeline? Plains the High you. want Just

Pam Beall

so pipeline, Yeah, back. on recent there the remanded the really High Plains development was case was some and

We an December anything See sent XX, by court. good. to regional do by so damages that's beyond will the trespass So the there if director. there much We here. - back update But Yeah, that's XX. the been a to vacated. and that. And has share so all December missing decision from determination be don't expect new The matter that's I'm is. have a really, are

for to at if that piece a level stated we of as to in before, was some generate line just want alternatives we have tribes. the we're similar we've people, unable past, issue Now, as with generated that EBITDA, of use one remind the reason to

Mike Hennigan

Michael, development this alternatives we obviously, But point. disclosed, system continue out. whole it mentioned. it's an where we secretary issued But how and come previously as the we to important we'll order. this trespass order positive that's a I’d process, that its to as as plays in as Mike. have we at are that just add, us, still for know, stand big is, the BIAs vacating There see just you Pam is believe more

Michael Blum

you very much. Thank

Mike Hennigan

You're welcome.

Operator

Thank you.

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

open. line is Your

Spiro Dounis

Morning, everyone. Hey.

at transaction [ph] Midstream question if MPLX? up could cash you're about wondering the an assets First Oak you guys facilitate Gray were swap level, assets down still and that update Texas, So on both they NPC those a South migrating down could how there? if the to And is something us thinking on is flowing just just asset

Pam Beall

Pam. Yeah. It’s

So I - the the of on burner. would front say it's a kind not it's at moment

was of For we program to our our our and the company, you has And our on for repurchasing we optimizing really that commercial know, the that getting highlighted, order. that the investments, can those excess aspects units. capital that cash after our distributions positive in us particular, commence to free focused cash getting have costs, by that begin that MPLX, our flow, items business, focusing reducing priorities Mike flow, across really house portfolio, Board after the in authorized on so

Spiro Dounis

Understood.

wondering ESG at just of make is to it point governance, Corp for to governance does a when pretty see the encouraging weightier evaluation a some big things, just they're question a continued obviously, that. side on of C factor you? it the But push, comes to become Second vehicle

Mike Hennigan

Spiro, its Mike.

things argument Corp, found widening from continue that have at we and of term in review, where particular be investor is unknowns. the there this the look the bring are the of a wider both and is term understand the structure base, lot advantages would I've that our a knowns cons, to then certainly to the Obviously, a there that there would that be in partnership investor pros to case, And in Midstream here. quite of long for our we used the C the impacts large occur one tax that and would would in we is pro holders. the that structure. cases and one currently We So, base. But But cons bit. at MPC as

reasons main the forward we not of have on that. one moved that's that So

that entity reason, XX% The up a flow, start even numbers, you're that we've second about at have be tax tax going we a main you we Corp which is you're And cash much corporate that at obviously, is to mode, that in distributable of even paying believe $X the us, that's if that significant today, looked rate taxes. just for it's could an rough rate, C future, corporate going billion if the would paying. tax that in be more. And for

cons, that to the to light whatever it's That's billion billion tax the well in ongoing the know, significant So X would be of want this been as number which if $XXX to you of you're $X pick, pretty haven't the, to loss or as felt holders, regard. upfront our consider in you that implications to looking at flow. cash worthwhile we

So this with want and right said, best case create that more keep then of on prioritize and saying that and us the been get ‘XX cash get point a we think a to try until generate path. source they is always to of still value, that We level, where start that's the for kind up to use we flow units excess continue to into us, continue to evaluating as we'll we're if for and and that we what's that constantly continue the to we've the and of try emphasize to value best base buy now cash. way back at trade

Spiro Dounis

Got you, it. the Makes color. Mike. sense. you, Thank Thank Pam. Appreciate it

Mike Hennigan

You're welcome.

Pam Beall

Thanks.

Operator

you. Thank

T question Capital. RBC Our with come from next will J Schultz

open. is line Your

T J Schultz

Great, thanks.

And Just have first on remaining contract on the the renewals on Do what's MVCs XXXX? renewal you a in within average any major MVCs. question the MVCs the L&S? term

Pam Beall

in put them would contracts, would that up in So, coming of most be within coming long-term L&S, were Those for primarily have place. up we be XXXX. renewal

So And first back down are contracts. Marathon drop XXXX Petroleum assets. XX-year those our was in

and Storage XXXX. excuse That up do renewed. contracts. Logistics will XXXX, our a majority start other the our then have of of for those business is and of We up all come and So in for segment more me, renewal little the would unique does contract that renewal January in in one and the coming beginning contract, marine of extended be among contract

rates have rates the feature equipment that's for does a it However, under market will contract. reset to where we the

a a So it's it's for contract, capacity. fee

dedicated extent every contract The the to available we equipment. to will equipment paid that have X to So we be for service upon MPC, fluctuate set the in rates and are years renewal. that

contract we are. reset be And really is rates So what the market rates, be on expect the the will that on reset. there rates based will rate renegotiations would

be will that So up that's XXXX. one in

T J Schultz

or conversions Okay, those the there. thanks. and be And Are when then right possible Thanks. those do transition hydrogen to when be considering or or may conversions has do it any just to considerations, types of answer you asset that with Or happening whether a needed? theme follow COX now? about up on of expect R&G possible earlier energy to [ph] your be

Mike Hennigan

going most things some tell the an an So know, because to area Tim, frustrate where projects we give best. we kind these don't can make energy to But J of for I competitive I going in thing of this as at to bit, look keep probably that you have. our nature we're earlier But and Probably part negotiations we'll think of of said our the is, or T But a of in to opportunities, one some the calls. from it's in position we look know, I give to you that's best put if end, as area. it either our year little it's this closer where we where we're area hurting won't at try ourselves that you Pam toughest these a well the disclosures would color And you space, the is, of want projects that the we continue not comment forward. all. probably to participate going you the portfolio also evolution

Timothy Griffith

short, have things opportunities. add pretty I Tim. is this molecules. to an look all know look of that, it's think we But conversion know, that at to well, competitive we're And logistics we assets, in has the company. at we summarized energy So would I it we're you whether Mike going move environment, just continue

in, on to So what the we'll at it's whether those use look services we put table. can pipes. continue boats, to all trains, It's trucks,

Operator

you. Thank

next Keith will with Research. from question come Our Wolfe Stanley

open. is line Your

Keith Stanley

was maybe $XXX then ballpark? market sense morning. up comments reset you something only that understanding first if that's that, to that on Marine you in the And or a Can million unique market rate good for the follow million do it the it contract. rates? current to on also I versus to I contracts of business, And the think at was you give Marine? Hi, a renewal, my wanted was related pretty small XXX or pipeline XXXX EBITDA, to referenced then

Pam Beall

in - of the size business. the you in terms of the to that's zip have business. you're right unique the code And No, marine

we relative yeah, say, So another fact have keep contract in that would established. the the - market the put we mind to fact is place in I first to rates that prices to equipment say was and when to it's the current down. work I helps to thing more would and put also soft would the expect first Marine is come were the offset

clearly it zip the you're code it's but - right So is in for Marine. -

Keith Stanley

the units the by against the buying held second about And talk not in just for MPC. buying the on other for $X the do Can public But Obviously, in it's any great. in units? buybacks, you and no maybe just any public the units interest authorizations Okay, thoughts considerations, for the units, or just units. public has billion stock MPLX more reasons came impactful back to topic, authorization technically. MPC Thanks. for the selling how

Pam Beall

and we buy used in MPCs public is MPLx. may we think And MPLX. available want use business, important to business is cash, as ownership again the message interest free know ownership we important in investors to serve interest positive that will in distribution, be its which after MPC, invest to its hold after capitalist in Well, does increase that maintain will the back the investing we to the units MPC only for you after

the So we but into not important continues as opportunities MPLX think for an distribution long-term, value to today, for message that part only growth MPC that's for an important of investors its future. business the well

Keith Stanley

Great, you. thank

Operator

Thank you.

come Our Richardson will with from Tristan Truist question next Securities.

is line open. Your

Tristan Richardson

communication the on all capitol for Thanks morning. good Hey, priorities.

You've covered a lot ground of here.

Just one if more I question, buyback may.

Just LP? the pace curious, on does to as deliver the of execution how sponsor the consolidated continuing much leverage a influence Mike, just buyback versus

Mike Hennigan

much pretty Tristan. So independent they're

believe the in X.X One to of sponsor net level us our times. to spot good our in you a at time, X situation with Pam we've be. time, a But appropriately as that At not them for Over communicate have look we little earnings a the over growth entity. to levered, entities have the bit, MPC, drift a entities looking things with over for around times happening of Obviously, little COVID. an think levered, leverage, at is, that, we're we've said the anomaly x-MPLX is right level, a has down and said, bit mind. looking is to that at each we're we the is levered, have we're should we that the MPLX looking appropriate under not I amount four want continued for keep use leverage, word to we're be we of both and to what's good

would earnings. the market type an Midstream appropriate here. level. not hopefully, as We of you is on quarters last as was stable appropriate know, the that, for space. leverage the far couple Midstream refining space, the an So very And seeing that the consistent, think At time, same that's leverage space be

credit what maintain is for why grade metrics. entities communicated, that's So we X important us to is right In there. very both think times investment to is we've X.X

we investment rating ratings agencies, profile. continue our continue we have maintain point, with that. at have we'll that think that the this businesses. appropriate have to do We the we that dialogue leverage always we grade The important for to to And believe is are

the So think we way that's them. about

people about like the look about you're of asking appropriately them consolidated, we it. kind we You some independent that is question, them know, ask having at think two levered way now and businesses, as

Tristan Richardson

Thank guys very Appreciate it. you much.

Mike Hennigan

welcome. You're

Operator

Thank you.

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

Your is open. line

Ujjwal Pradhan

Good morning, everyone. Thanks questions. for my taking

for two quick Just ones clarification me.

year. aggregate from high reduction mentioned able that million repeatable much the this year? cost in plan earlier quantify how And incremental Are cost the next forward? year going you is be level, to You will perhaps the the workforce this benefits reduction $XXX that of from reduction to OpEx reduction

Pam Beall

cost ongoing reduction expect forward. Ujjwal, to cost achieving the reductions yet we're Yeah, providing be it our equates you'll of we're able the results that in information future. be but amount workforce And the all in that reduction, move the not XXXX, the to we into for as see about to we

the been you financial of reductions detailed see to some cost able in our here in as we've be able And statements that to successfully XXXX, that execute should well.

move monitor continue say progress, should our through as I to it able just and you So be we would XXXX. to follow

Ujjwal Pradhan

we levels? G&P CapEx run earlier, Northeast, the CapEx Got And it. so given think production current comments that outlook your rate Thanks you based the perhaps could should appreciate color about share maintain for Northeast already the customer far. share clarification for why second on improving the But conversations, from you to on Pam. for

Pam Beall

there. - completion the modest, would out of bring even the to comparison that then to we've that we're that Yeah, property. we And bringing in to I XXXX to on Smithburg additional Most some there. building close relatively capital spent completed, relative preparing capital NGL is that's total related in Ujjwal. - we've been and and that pipeline spending say on plants I'd historically the X

well or customers be, my have a we of and the to you couple within less. Marcellus capital know, So support would in guess that that forth. the connects $XXX the But ongoing so just producer definitely way is million

Mike Hennigan

are year just looking that compared of were the the slower the E&P of growth of in any seen they in Mike. players a ago, be whether the its the going Permian, result areas. or situation. I'm looking activities it in we've at add couple of things this trajectory, think Ujjwal, to where Northeast, a their many to that, years one is, I other a at or as And

we'll at going plus, $X that XXXX same as for has to going months seen going the a with time, blends has landscape. consistent price ago. now also We're forward, we you the different energy that we outlook be far how So, be into recent that think will is pattern I the part At our where pace growth I of is activities the pricing think it's expectation natural evolving And the energy at six a see and as everybody one of compared gas the things know, responded, the slower were important still natural to that. expectation in think an long-term. gas of landscape forward there's looking that, the

Ujjwal Pradhan

you, Thank great And Mike. Got on congratulations a it. Pam and quarter.

Mike Hennigan

thank Yeah, you.

Operator

closing remarks. Kristina to over call you. I back Kazarian for Thank now the will turn

Kristina Kazarian

Thank like a great calls. us of and Should MPLX. members to you thank for questions you be today would will in you have take morning, for available you topics interest any our on the you Hope this team or joining additional day. clarification have any of your your discussed

Operator

participating. That you does conclude today's conference. Thank for

disconnect may time. You at this

MPLX (MPLX) 2 Nov 202020 Q3 Earnings call transcript