Tuesday, Nov.
3, 2026 CALL PARTICIPANTS President and CEO - Maryann T.
MannenCFO - Chris HagedornVice President, Investor Relations - Brian WorthingtonExecutive Team Member - Gregory Scott FloerkeExecutive Team Member - David R.
Heppner Adjusted EBITDA -- $1.9 billion, representing 5.3% growth versus the third quarter of 2025 driven by higher rates and increased butane blending.Annualized Distribution -- $4.84 per unit, reflecting a 12.5% increase for the third consecutive year based on the durability of the company's cash flows.Midstream Asset Divestiture -- $750 million, involving logistics assets supporting the Saint Paul Park and Mandan refineries at an EBITDA multiple of approximately 9x.Organic Growth Capital -- $2.9 billion for the 2026 program, with over 90% of funds allocated to natural gas and NGL infrastructure.Solitude Pipeline FID -- 4.5 billion cubic feet per day of capacity, which increases the company's interest in Permian natural gas egress to approximately 16 billion cubic feet per day.Harmon Creek III Capacity -- 300 million cubic feet per day of gas processing and 40,000 barrels per day of de-ethanization capacity, which commenced operations in August 2026.Utica Processing Utilization -- 89% during the quarter, an increase from 73% in the second quarter of 2026 due to higher producer activity.Titan Complex Expansion -- 400 million cubic feet per day of sour gas treating capacity, with construction on track for completion by the end of 2026.BANGL Pipeline Capacity -- 300,000 barrels per day, increasing from 250,000 barrels per day in the fourth quarter of 2026 to provide additional NGL takeaway from the Permian Basin.Gathering Throughput -- 7,216 million cubic feet per day, representing a 14% increase year over year in the Utica, Marcellus, and Permian basins.Terminal Throughput -- 3,375,000 barrels per day, reflecting 6% growth versus last year driven by higher export volumes.Incentive Compensation -- $77 million in quarterly expense, which reduced adjusted EBITDA growth by 2% for the period.Distributable Cash Flow -- $1.5 billion, which enabled the return of $1.1 billion to unitholders during the third quarter.Distribution Coverage -- 1.3x for the third quarter, a level management stated is comfortable for the partnership.Leverage Ratio -- 3.8x at the end of the quarter, which remains below the company's long-term target of approximately 4.0x.Intercompany Loan Agreement -- $2.5 billion, following an amendment that increased borrowing capacity by $1 billion and extended the term to Oct.
30, 2031.Northeast Processing Capacity -- 8.1 billion cubic feet per day, reflecting high utilization across the system in the Marcellus and Utica basins.LPG Export Facility -- 400,000 barrels per day of joint venture capacity, which remains scheduled to enter service in the first half of 2028.Unit Repurchases -- $50 million during the quarter, with approximately $1 billion remaining under the existing common unit repurchase authorization.Logistics Segment EBITDA -- $1.2 billion, an increase of $67 million compared to the third quarter of 2025 driven by higher rates across business units.
Need a quote from a Motley Fool analyst? Email [email protected] Mannen stated, "The divestiture announced today currently presents a headwind to 2027 that was not initially contemplated when other operational metrics were established," noting that future distribution growth magnitude could be impacted by the loss of this EBITDA.Hagedorn warned that incentive compensation expenses are tied to the share price of the company's strategic partner, Marathon Petroleum Corporation, which could act as a "headwind or a tailwind" for financial results in the fourth quarter.
MPLX LP (MPLX -2.21%) reported quarterly results focused on the expansion of its integrated natural gas and natural gas liquids infrastructure, primarily within the Permian and Marcellus basins.
Management reported that the company achieved a fifth consecutive year of double-digit distribution growth while maintaining a 1.3x distribution coverage ratio.
The company stated that it is divesting noncore midstream assets for $750 million to redeploy capital into high-return growth projects, including the Solitude pipeline system.
Management indicated that high utilization across its processing system and the progression of several organic expansion projects are expected to support mid-single-digit adjusted EBITDA growth through 2027.
Mannen stated, "MPLX increased its quarterly distribution by 12.5% for the third consecutive year," supported by a multiyear track record of adjusted EBITDA growth.Management confirmed that the company reached a final investment decision for the Solitude pipeline system in under 90 days, citing it as one of the fastest project developments in company history.The company expects processing volumes to ramp through 2027 as the Bay Runner pipeline provides additional access to liquefied natural gas export infrastructure along the Gulf Coast.Hagedorn noted that incentive compensation expense was $48 million higher year to date compared to 2025, primarily due to performance metrics linked to its strategic partner, Marathon Petroleum Corporation.Management indicated that Northeast processing utilization remains at high levels of 93% to 94% even after the Harmon Creek III plant began operations.The company stated that 2027 capital expenditures are likely to be lower than the $2.9 billion budgeted for 2026 as several large-scale organic projects move toward completion.
INDUSTRY GLOSSARY NGL: Natural gas liquids, such as ethane, propane, and butane, which are separated from natural gas.FID: Final Investment Decision, the stage where a company commits the capital required to proceed with a project.Bcf/d: Billion cubic feet per day.MMcf/d: Million cubic feet per day.Fractionator: A facility that separates mixed natural gas liquid streams into individual purity products.De-ethanization: The process of separating ethane from a natural gas liquid stream.Midstream: The sector of the energy industry responsible for the processing, storage, and transportation of oil and gas.EBITDA: Earnings before interest, taxes, depreciation, and amortization.DCF: Distributable cash flow, a measure of the cash available to be paid out to unitholders.Unit: A share of ownership in a master limited partnership.LPG: Liquefied petroleum gas.Wellhead to Water: A strategy covering the entire value chain from production at the well to export at marine terminals.
Full Conference Call Transcript Operator: Welcome to the MPLX Third Quarter 26 Earnings Call.
My name is Julie, and I will be your operator for today's call.
At this time, all participants are in a listen-only mode.
Please note that this conference is being recorded.
I will now turn the call over to Brian Worthington.
Brian, you may begin.
Brian Worthington: Welcome to MPLX's Third Quarter 26 Earnings Conference Call.
The slides that accompany this call can be found on our website at mplx.com under the Investors tab.
Joining me on the call today are Maryann T.
Mannen, President and CEO Chris Hagedorn, CFO other members of the executive team.
We invite you to read the safe harbor statements on Slide 2.
We will be making forward looking statements today.
Actual results may differ.
Factors that could cause actual results to differ are included here.
As well as in our filings with the SEC.
With that, I will turn the call over to Maryann T.
Mannen: Thanks, Brian.
Good morning and thank you for joining our call.
Effective November 1, 2 new independent directors joined the MPLX board.
Michael Dunn, and Bruce Niemeyer have strong records of accomplishment in the energy industry.
Making them outstanding additions, and we are happy to have them join our board.
Delivering on our commitments to return capital, MPLX increased its quarterly distribution by 12.5% for the third consecutive year.
The increase is supported by our multiyear track record of delivering mid-single-digit adjusted EBITDA growth and growth projects coming online over the next several years.
Additionally, this increase reflects conviction in the durability of our cash flows and execution of our strategy.
MPLX's distribution now equates to an annualized rate of $4.84 per unit.
And as also announced this morning, in conjunction with Marathon Petroleum sale of the Saint Paul Park and Mandan refineries, MPLX announced the divestiture of midstream assets supporting these refineries for $750 million.
Representing an EBITDA multiple of approximately 9x.
Ensuring the competitive positioning of our portfolio is a strategic commitment and we expect to redeploy proceeds from the sale to advance MPLX growth plans anchored in the Permian and Marcellus basins.
In the third quarter, MPLX delivered adjusted EBITDA of $1.9 billion reflecting 5% growth versus the same period in 2025.
Excluding the impact of the Rockies divestiture in late 2025, MPLX adjusted EBITDA would have grown 7.3% year over year for the third quarter.
Strong execution across our business and continued progress on the growth strategies across our integrated natural gas and NGL value chains enabled the return of approximately $1.1 billion to our unitholders During the quarter, the Harman Creek III Complex began operations with 300 million cubic feet per day of gas processing and 40 thousand barrels per day of deethonization capacity increasing our Northeast processing capacity to 8.1 billion cubic feet per day, fractionation capacity to 800 thousand barrels per day.
As we continue placing high return projects into service and increasing utilization across our system.
MPLX remains positioned to deliver durable mid-single-digit adjusted EBITDA growth.
Natural gas and NGL fundamentals are robust.
Creating compelling opportunities to support increasing domestic and global demand for US energy.
Growing producer activity, increasing demand for natural gas fired power generation and expanding access to global markets support continued investment across our integrated value chains.
Our disciplined capital allocation framework remains unchanged.
Investments must provide strategic fit durable demand and attractive risk adjusted returns.
In the third quarter, MPLX and its joint venture partners announced the FID of the Solitude Pipeline System which when completed, will provide an additional 4.5 billion cubic feet per day of natural gas egress from the Permian Basin.
Solitude was 1 of the fastest projects to reach FID in the company's history, with strong long term contracts from shippers bringing the project from commercial to FID in under 90 days, supporting our view of long term production growth.
In the Permian Basin.
Solitude increases MPLX's interest in Permian natural gas long haul pipeline capacity from 11 billion cubic feet per day to approximately 16 billion cubic feet per day and is expected in service in late 2029.
MPLX is investing over 90% of its $2.9 billion organic growth capital program for 2026 toward natural gas and NGL infrastructure opportunities.
Our growth towards the end of the year is supported by this capital investment and efforts to optimize operations.
Secretariat 1 and Harmon Creek III have been increasing throughputs since being placed into service.
We see opportunities to further increase processing utilization in the Marcellus Basin and in the Utica where utilization rose from 73% in the second quarter to 89% in the third quarter.
We also anticipate ramping additional sour gas throughput on our Titan I plant, which is running at over 150 million cubic feet per day.
In addition to these efforts, we are advancing several projects that support our integrated value chain into 2027.
The Bay Runner pipeline is expected to be placed into service in the fourth quarter.
Providing additional access to LNG export infrastructure along the Gulf Coast.
We expect volumes to ramp through 2027 to support the end users commissioning and scaling demand.
Additionally, the BANGL pipeline expansion is expected to come online in the fourth quarter, increasing capacity from 250 thousand barrels per day to 300 thousand barrels per day and providing additional NGL takeaway capacity from the Permian Basin.
The Blackcomb natural gas pipeline began commissioning activities in July, The JV partners continue to progress the pipeline as planned and Blackcomb is expected to achieve full commercial service in the fourth quarter.
In the Delaware Basin, construction is progressing to expand sour gas treating capacity at the Titan Complex to over 400 million cubic feet per day expected by year end.
New pipeline connectivity was placed into service between our Titan Sour Gas Complex and our Delaware Basin processing footprint further enhancing our ability to optimize volumes across our integrated Permian system.
We expect these growth platforms to position MPLX for strong adjusted EBITDA growth in 2027.
Our Gulf Coast fractionation and export facilities continue to progress on schedule and on budget.
We expect the first 150 thousand barrel per day fractionator associated purity pipeline and our 400 thousand barrel per day joint venture LPG export facility to enter service in the first half of 2028.
Furthermore, the second 150 thousand barrel per day fractionator remains scheduled to begin operations in 2029.
Through these investments, MPLX continues to strengthen its integrated wellhead to water strategy while positioning the partnership to generate durable cash flow growth.
Let me turn the call over to Chris to discuss our operational and financial results for the quarter.
Carl Kristopher Hagedorn: Thanks, Maryann T.
Slide 8 outlines third quarter operational and financial performance highlights for our crude oil and products logistics segment.
Segment adjusted EBITDA increased $67 million compared to the third quarter of 2025.
The increase was primarily driven by higher rates across the business units and increased butane blending, partially offset by higher operating expenses.
Including incentive compensation.
Terminal throughput increased 6% year over year, primarily driven by higher export volumes.
Moving on to slide 9, segment adjusted EBITDA in our Natural Gas and NGL Services segment increased $26 million compared to the third quarter of 2025.
The increase was driven by higher volumes, including growth from acquisitions, partially offset by the divestiture of noncore gathering and processing assets in 2025.
and-- Higher operating expenses, including incentive compensation.
Excluding the impacts of the Rockies divestiture, our Natural Gas and NGL Services segment adjusted EBITDA has grown 10% year over year for the third quarter.
Gathering volumes increased 14% year over year driven by strong producer activity across the Utica, Marcellus and Permian Basins.
Processing volumes were up 5% year over year due to increased production in the Utica and additional processing capacity entering service in the Marcellus and Permian basins.
Utica gathering and processing volumes rose 19%, 20% year-over-year.
And remain an area where we anticipate strong producer activity.
Our Northeast processing system operated at a 93% utilization in the third quarter, demonstrating the strength of producer activity in the Marcellus and Utica.
In the Permian, increased utilization at Secretariat 1 and growing demand moving through BANGL, further demonstrates value of our integrated value chain strategy.
Sour gas treating volumes averaged over 150 million cubic feet per day during the quarter as we continue progressing toward over 400 million cubic feet per day to capacity at Titan by year end.
As additional projects enter service, we remain well positioned to support growing producer activity.
The quarter included $77 million of expense associated with incentive compensation, $37 million higher than the third quarter of 2025.
Year to date, this expense has totaled $167 million, which is $48 million higher than the same time frame last year, impacting our adjusted EBITDA growth by approximately 1% for the year.
The increase was driven by charges to the partnership for annual bonus and long term incentive compensation programs.
The programs are a combination of final.
Financial and other metrics that include performance relative to peers and linked to its strategic partner.
Marathon Petroleum.
Looking ahead, MPLX remains positioned to deliver second half weighted adjusted EBITDA growth in 2026, underpinned by investment investments that are ramping through the balance of the year.
While we expect these investments to generate modest cash flow in 2026, we are well positioned to accelerate cash flow growth.
Throughout 2027.
Lastly, we do not expect the sale of the midstream assets associated with the Saint Paul Park and Mandan refineries to impact our ability to deliver mid-single-digit growth.
Now let me hand it back to Maryann T.
Mannen for some concluding thoughts.
Mannen: Thanks, Chris.
MPLX is executing its strategy with consistency and discipline.
Our priorities remain unchanged.
Operate safely and reliably, grow through high return investments, optimize integrated value chains, return capital to unitholders.
The durability of our cash flows enabled us to increase our quarterly distribution by 12.5% for the third consecutive year.
This increase marks the fifth consecutive year of double digit increases resulting in annualized base distribution growth of greater than 70%.
Over the past 5 years.
The divestiture announced today currently presents a headwind to 2027 that was not initially contemplated when other operational metrics were established.
We still believe we can deliver mid-single-digit EBITDA growth and our comfortable with annual distribution coverage of 1.3x.
Acknowledge that another year of 12.5% distribution growth may be impacted by the loss of this EBITDA.
And we still expect a significant distribution increase in 2027 greater than distributable cash flow growth.
In addition to the strong set of organic projects we are developing, we continue with evaluating inorganic opportunities.
Our announced divestiture provides an additional $750 million for growth and we remain committed to deploying capital to opportunities that are strategic and deliver strong returns.
Underpinned by the optimization of our value chains and increasing utilization across recently completed investments, MPLX remains on track to deliver durable mid-single-digit adjusted EBITDA growth and we expect even greater EBITDA growth in 2027.
Our strategic investments, financial flexibility and strong with MPC, continue to differentiate MPLX and support long term value creation.
Now let me turn the call over to Brian.
Brian Worthington: Thanks, Maryann T.
As we open the call, for your questions.
As a courtesy to all participants, we ask that you limit yourself to 1 question and a follow-up.
If time permits, we will re-prompt for additional questions.
We will now open the call to questions.
Operator: Thank you.
We will now begin the question and answer session.
If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers.
Once again, Our first question comes from John Mackay with Goldman Sachs.
Your line is open.
John Mackay: Hey, team.
Thank you for the time.
Maryann, maybe I will pick up on kind of the end of your closing remarks there.
You guys have been talking a lot about confidence in the second half over first half.
EBITDA ramp.
Maybe just a little more color you can share there and kind of specifically whether you would expect the Titan expansion to contribute in fourth quarter? And then any not to ask for too much, but kind of any incremental color you want to give on 27 over 2026.
I know you sound constructive on it, but maybe any incremental detail, we would appreciate.
Mannen: Good morning, John, and thanks for the So let me take the first part, which is the ramp first half to the second half.
We have been indicating for the last several quarters that the back half of our year, second half of 26, we expected that growth to be stronger than the first half of the year given the timing of project completions etcetera.
And we remain confident frankly in the fact that the fourth quarter will see incremental growth over the third.
Let me talk a little bit about why we see that, and then I will talk about 2027 for a bit.
As I mentioned, even in my prepared remarks, we have got Secretariat I continuing to ramp Harmon Creek III that came online in the middle of the year.
Just in the third quarter.
It continues to ramp into the fourth quarter as well.
We are also seeing opportunity to increase Utica processing utilization think I mentioned in my prepared remarks, it rose from 73% in the second quarter.
To 89% in the third, and we still see opportunity there.
Ramping on additional sour gas through our Titan I plant, I think the question you asked is whether or not Titan II would see any incremental volumes.
And the answer is no.
We expect Titan II to be complete at the end of this year and it will begin its ramp to 400 in 2027.
But certainly Titan 1 operating well.
As a matter of fact, Gregory, Chris and I had the opportunity to visit the Titan facility just a few weeks ago.
And experience really the progress on that asset as well.
Quite pleased with where we stand and confident in the team's ability to get that Titan II completed by the end of the year.
Then we have got Blackcomb Pipeline that began its commissioning in July and that is expected to achieve full commercial service in the fourth quarter as well.
And then BANGL, the NGL pipeline, 100 thousand to 400 thousand in the fourth quarter.
So again, we feel pretty confident about that.
And then for 2027, even with the loss of the EBIT from the assets associated with MPC sale, we still expect 2027 EBITDA growth to be stronger than 2026 as many of the projects that we were talking about begin to come into service again.
The 1 thing I want to pass to Chris we talked a little bit about the compensation expense and that could be a headwind or a tailwind.
Chris talked about it in his remarks I just wanted to give him a second to talk about that as well, and then I will come back in the event you have any other follow-up.
Carl Kristopher Hagedorn: Yes.
Just to elaborate a little bit on what I had in my prepared remarks.
Emphasizing 2 numbers.
When you look third quarter and you look Q over Q versus 2025, our expense was $37 million higher this year than it was in prior year,....