Welcome to the MPLX Third Quarter 2025 Earnings Call. My name is Shirley, and I'll be your operator for today's call. Please note that this conference is being recorded. I will now turn the call over to Kristina Kazarian. Kristina, you may begin.

Thank you, Shirley. Welcome to MPLX's Third Quarter 2025 Earnings Conference Call. The slides that accompany this call can be found on our website at mplx.com under the Investor tab. Joining me on the call today are Maryann Mannen, President and CEO; Kris Hagedorn, CFO; and 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 there as well as our filings with the SEC. With that, I'll turn the call over to Maryann.

Thanks, Kristina. Good morning, and thank you for joining our call. I'd like to take a moment to recognize Mike Hennigan. At the end of the year, Mike will be stepping down as our Executive Chairman. Mike's guidance has been tremendously valuable to our Board, to me and our entire leadership team. We thank him for his service as well as all of his contributions. He will be missed. Delivering on our commitment to return capital, MPLX increased its quarterly distribution by 12.5% for the second consecutive year. The increase is supported by our multiyear track record of mid-single-digit growth and reflects conviction in our growth outlook from recent capital deployment. Our growing portfolio is expected to support this level of annual distribution increases over the next couple of years. In the third quarter, MPLX generated adjusted EBITDA of $1.8 billion. Strong performance through the first 9 months has contributed to year-to-date adjusted EBITDA of $5.2 billion, reflecting growth of 4% over the same time frame in the prior year. Distributable cash flows of $1.5 billion, which supported the return of $1.1 billion to unitholders. We are committed to returning capital to unitholders, primarily through a secure and growing distribution, but also through unit repurchases as we believe our equity remains undervalued. MPLX is optimizing the competitive position of its portfolio as we pursue mid-single-digit adjusted EBITDA growth anchored in the Marcellus and Permian Basins, advancing our strategic commitments. During the third quarter, MPLX closed on 2 strategic acquisitions. First, the remaining 55% interest in the BANGL NGL pipeline system. Full ownership of BANGL and its expansion opportunities enhance our Permian platform as we connect growing NGL production from the wellhead to MPLX's Gulf Coast fractionation facilities and export terminal joint venture currently under construction. We are progressing the expansion of BANGL from 250,000 to 300,000 barrels per day, which we expect to enter service in the second half of 2026. Second, MPLX closed on the acquisition of a Delaware Basin sour gas treating business. Integrating our newly acquired sour gas treating assets with MPLX operations is ongoing. Additionally, we are completing construction of the second amine treating plant at the Titan complex. This will increase sour gas treating capacity from 150 million cubic feet per day to over 400 million cubic feet per day expected by the end of 2026, driving the returns we expect from the acquisition and expansion. The sour gas treating capabilities will allow us to capitalize on additional growth opportunities. These sour gas treating assets are adjacent and complementary to our existing natural gas system in the Delaware Basin. They expand MPLX's treating and blending operations, attracted to our current and new customers who are increasing crude drilling activity in the lower-cost sour gas window on the eastern edge of the Northern Delaware Basin and the assets increase access to natural gas and NGL volumes. We are advancing our strategic growth objectives in the Permian. Secretariat, our seventh processing plant is expected to be online at the end of 2025, bringing total regional capacity to 1.4 billion cubic feet per day. And we fully own the BANGL pipeline system integral to MPLX's Permian NGL chain, which is expected to add incremental EBITDA in 2026. Construction is progressing on schedule and on budget for the first Gulf Coast fractionation facility and LPG export terminal. The location of our LPG dock is advantaged as it will allow vessels to avoid congestion and reduce fuel consumption, lowering cost for shippers. MPLX will not have direct commodity price exposure as MPC will purchase the LPG production from the fracs and market globally through its marketing business across the new export terminal, demonstrating the strength of our strategic relationship with MPC. The first frac export terminal and purity pipeline are expected to enter service in 2028 with full run rate in late 2029. Within natural gas, MPLX and its partners announced they will construct the Eiger Express pipeline, having secured firm transportation agreements with investment-grade shippers. Upon completion, expected in mid-2028, the pipeline will transport natural gas from the Permian Basin to the Katy area of Texas. Eiger will have connectivity to the Traverse natural gas pipeline, which connects supply between Agua Dulce and the Houston area and will provide shippers optionality and access to multiple premium markets on the Gulf Coast, driven by demand pull for LNG exports. The continued build-out of our Permian to Gulf Coast natural gas system enhances that value chain with additional growth opportunities. Favorable market outlook supports our operations in the Marcellus, Utica and Permian Basins. MPLX is positioned for long-term natural gas volume growth in these key operating regions, and we expand our integrated value chains and execute our wellhead-to-water strategy. This year, over 90% of MPLX's total investments are being allocated to opportunities within our natural gas and NGL Services segment. The progress and execution of our strategic commitments give us conviction in the sustainability of our mid-single-digit adjusted EBITDA growth outlook for 2025 and beyond. Our approach to growth is structured to deliver mid-teens returns on our investments and mid-single-digit adjusted EBITDA growth. We do this by constructing processing facilities on a just-in-time basis, maximizing the utilization of existing assets, optimizing value chains and strengthening our strategic partnership with MPC. In the Marcellus, our largest operating region, construction of our Harmon Creek III processing plant and fractionation facility aligns with producer drilling plans. This new complex will feature a 300 million cubic feet per day gas processing plant and a 40,000 barrel per day de-ethanizer supported by producer commitments. In the second half of 2026, we anticipate our gas processing capacity in the Northeast will reach 8.1 billion cubic feet per day and fractionation capacity will reach 800,000 barrels per day, positioning MPLX to handle growing production from the Utica and Marcellus. As demand for natural gas-powered electricity rises, MPLX is well positioned to support the development plans of its producer customers. In our Crude Oil and Product Logistics segment, we are focused on expanding gathering infrastructure, enhancing butane blending at terminals, growing volumes organically and pursuing high-return projects to maximize asset utilization. With a strong pipeline of organic opportunities, we are well positioned to generate resilient cash flows that underpins our commitment to deliver long-term value and return capital to unitholders. Now let me turn the call over to Kris to discuss our operational and financial results for the quarter.

Thanks, Maryann. Slide 12 outlines the third quarter operational and financial performance highlights for our Crude Oil and Products Logistics segment. Segment adjusted EBITDA increased $43 million when compared to the third quarter of 2024. The increase was driven by higher rates, partially offset by higher operating expenses. Pipeline volumes were flat, while terminal volumes were down 3% year-over-year. Moving to our natural gas and NGL Services segment on Slide 13. Segment adjusted EBITDA increased $9 million compared to the third quarter of 2024 as contributions from recently acquired assets and higher volumes were partially offset by higher operating expenses. Gathered volumes increased 3% year-over-year, primarily due to production growth in the Utica. Processing volumes increased 3% year-over-year, primarily from increased production in the Utica and Marcellus. Permian processing volumes increased 9% compared to the second quarter of this year. Processing volumes in the Utica have increased 24% year-over-year, showing the value of the liquids-rich acreage. Marcellus processing utilization was 95% for the quarter, reflecting robust producer activity in the region. Total fractionation volumes increased 7% year-over-year, primarily due to higher ethane recoveries in the Marcellus and Utica. Moving to our third quarter financial highlights on Slide 14. Adjusted EBITDA of $1.8 billion increased 3% from the prior year, while distributable cash flow of $1.5 billion increased 2% over the same time frame. MPLX returned nearly $1 billion to unitholders in distributions and $100 million in unit repurchases. During the quarter, MPLX issued $4.5 billion in senior notes, the proceeds of which were primarily used to fund our acquisition of the Delaware Basin sour gas treating business and to increase cash from the BANGL acquisition and associated debt repayment. MPLX ended the quarter with a cash balance of $1.8 billion and plans to utilize this cash in alignment with our capital allocation framework. MPLX maintains a solid balance sheet with leverage below our comfort level of 4x. Now let me hand it back to Maryann for some concluding thoughts.

Thanks, Kris. Our distribution increase of 12.5% announced last week marks the fourth consecutive year of double-digit increases, resulting in annualized base distribution growth of greater than 50% over the past 4 years. Through prudent capital allocation, cost control and operational optimization, MPLX has achieved a 7% compound annual growth rate in both adjusted EBITDA and distributable cash flow over the past 4 years. Year-to-date, we've returned $3.2 billion to unitholders. As we've stated before, adjusted EBITDA growth at MPLX will not be linear. We anticipate growth in 2026 will exceed that of 2025, supported by throughput growth on existing assets and new assets being placed in service. Our growing portfolio is well positioned to sustain this level of annual distribution increases over the next couple of years, and we do not expect MPLX's coverage ratio to fall below 1.3x. In summary, MPLX is well positioned to capitalize on opportunities that fit our strategic roadmap as we execute our plan targeting mid-single-digit adjusted EBITDA growth. As a strategic asset for Marathon and with the distribution increase, MPLX is expected to provide $2.8 billion annually to MPC through its growing distribution. Our unwavering focus on safety and operational excellence, strategic growth opportunities and strong financial flexibility enable us to consistently drive cash flow growth. This, in turn, supports our commitment to delivering peer-leading capital returns to unitholders. Now let me turn the call over to Kristina.

Thanks, Maryann. As we open the call for your questions, as a courtesy to all participants, we ask that you limit yourself to a question and a follow-up. If time permits, we'll reprompt for additional questions. We're ready for questions, please.

Our first question comes from John Mackay with Goldman Sachs.

I wanted to start on the EBITDA growth outlook. You guys have done a bunch of projects, M&A this year. Maryann, I was wondering if you could kind of walk us through how you're thinking about the go-forward growth outlook now for EBITDA, both kind of level and duration relative to how you were framing up the similar target of mid-single-digit EBITDA growth at the beginning of the year before we had some of these announcements.

Yes. Thanks, John. Thanks for your question. So as I mentioned in my prepared remarks, when we look at our growth rate '24 to '25 and then we look at it also from '25 to '26, we believe '25 to '26 will actually deliver stronger growth than we did '24 to '25. As you know, we've also been talking about our EBITDA growth over a 3-year period. And when we look at that, it's been roughly 7% for the last few years. We see the ability to continue that as we look into 2026 for right now for those acquisitions and other projects that we put into place. So maybe let me take a minute and talk about how we see that unfolding to address your question of how do we think about it in the beginning of the year versus how we're looking at it now. When we look at 2026, as an example, a couple of things really begin to come online and increase that growth that I was referring to. So as you know, we mentioned BANGL, the incremental 55% ownership will now be additive to 2026 EBITDA targets. As I mentioned, Secretariat will come online at the end of this year, and that ramp-up into 2026 will again deliver incremental EBITDA throughout 2026. We'll also have the full rate of Preakness II that came online in the third quarter of '24. And so we'll have a full ramp-up as we head into 2026. And then the sour gas investment that we made, as you know, will reach full run rate by the end of 2026 as the next phase of the Titan treatment plant comes online. So we'll see that incremental EBITDA coming from Titan as well. And then there's a few other projects, as you know. And then heading into '27, we obviously have full rate for Titan, consistent with the way that we've shared with you as we talked about the EBITDA potential on that transaction. And then also Agua Pipeline, as an example, another project that we just announced that will bring EBITDA into 2027. I'll take you actually to '28 and '29 just for a moment. But in '28, we'll have the first frac in the LPG export dock come online and then obviously heading into full run rate as the second one comes online in '29 as well. So those projects, either organic or those acquisitions, I think support our ability to continue to grow that mid-single-digit growth. Let me pause there, John, and see if I've answered your question.

That was great. I appreciate the color. Maybe just as a second question from my side, I would love to hear a little bit more about the power LOI, maybe just steps to converting that, how we think about the opportunity set for you, returns, etc.

Yes. Thank you for that. As you saw, we issued a press release this morning and appreciate it. It is an LOI in this early stage. One, we think the opportunity with MARA is critically important for us as we evaluate the opportunity set around data centers and AI. We think for MPC, this obviously creates in-basin demand. And then ultimately, at what we would consider to be a very low-cost or no-cost transaction here in its early evaluation, we will provide gas. And then in return, we receive lower cost, reliable power, which, in fact, will get passed on to our producer customers. But time-wise, this is certainly not a 2026 project. It will be beyond 2026, John.

Our next question comes from Manav Gupta with UBS.

I would like to start by saying I'm a big fan of Mike Hennigan, but he's left the company in very good hands. So congratulations, Maryann. My first question to you is, can you elaborate a little more on the Permian sour gas opportunity? And it's my understanding you do not need to permit more AGI wells to run this asset at full capacity because that's where the gating factor is. If you could talk a little bit about those things.

Thank you for your question, and we agree with you as it relates to Mike Hennigan. So on the Permian sour gas opportunity, as we shared, we've got about $0.5 billion of incremental capital that gets us to all of the investment economics that we shared. That includes getting the amine treating Titan facility as we call it, from 150 to 400 and the next AGI well. There is no other incremental gas injection well necessary to meet the economics on the project as we have outlined for you so far.

Perfect. My quick follow-up here is, as you evaluate all these data center opportunities, would there be more letters of intent of similar nature? And how do you see that pipeline? And then the bigger question is, some of your peers have said this opportunity set is so big that we are even open to generating and selling electricity using our natural gas. Is that something which MPLX could be open to if the right opportunity arises, or are you more comfortable being the supplier of natural gas but not the generator of electricity, if you could talk about that?

Yes, of course. Thanks for the question. As you know, when we look at the Northeast, we handle about 10% of U.S. natural gas consumption every day. So our ability to continue to evaluate where in this opportunity set that we can best support our producer customers is a place that we are spending time evaluating. Again, this MARA is the first step for us as we continue to evaluate those opportunities. I'm going to pass it to Greg, who's been spending quite a bit of time looking at how and where MPLX can continue to pursue opportunities.

Manav, it's a great question. The first, obviously, as Maryann said, being a large player in the midstream business and touching a lot of gas, we aggregate gas at our processing plants, similar to interstate pipelines and some of the other projects you've seen. So we certainly have the ability to co-locate, similar to the MARA project, where we have a co-located facility and we can sell gas and buy power and increase reliability. In terms of generating the power, the solar turbines and the Caterpillar reciprocating engines that constitute most of the prime movers for generation behind the meter are assets that we deploy by the hundreds across our system. So we know how to install, operate and maintain these units, running all of our gas compression. And so we have that capability. On the refining side of Marathon, we actually self-generate power at some of the refineries. So we have the capability, but it's a separate business case in terms of moving from providing gas processing to move into the power generation business. So that's something that we'll keep all options open and continue to look at, talk to a lot of people and see where that goes, if anywhere.

Your next question comes from Theresa Chen with Barclays.

Going back to the Titan complex and the early days of integration after the recent close. As you continue your investment here in the build-out, has there been any shift in commercial activity with your customers? Any incremental interest in your services now that you have the set of assets within your portfolio?

Theresa, thanks for the question. I would tell you, integration with our sour gas acquisition, which we refer to as North Wind has gone very well as we exited the quarter processing roughly at 150. You may have also heard and will echo some of the comments that those producer customers who we are working for in the region have commented on. I think they're pleased with the fact that MPLX now owns this asset. We're working diligently. They were customers of ours in that basin prior, and this adds more opportunity for us to continue to work closely with those key customers. One of the other things that we talked about when we were together the last time was the potential for processing. Some of our contracts are about 2 to 3 years, they're third party. And as we look at the ability to accelerate growth in that region, being able to take on incremental processing would be a place that we would look to grow beyond that integration. The other thing that I would mention is we continue to look at the project, and as I shared with John earlier, passing the look at how EBITDA will grow, we expect to be complete so that by the end of 2026, as we head into EBITDA generation, those projects will be completed, and we'll be able to see the full benefit supporting our customers in the basin. I'll look to Greg to see if there's anything else that he wants to add because he's been overseeing the strength of that integration.

Thanks, Maryann. We've been spending most of the time towards the last few weeks of the quarter and then into the early first quarter, integrating the assets and working with producers to ramp up volume. We've got great feedback from our customers. We're meeting with our customers. I think they're excited about our ownership and operation of the system and moving to the next level as we continue to deploy the assets. Titan 1 train in the commissioning process late in the quarter and into the prior month and the third train of Titan 1 and then Titan 2 Civil and construction is underway for that plant to come into service in the latter part of '26.

And then related to the LOI with MARA, Maryann, going back to your comments about how low or no cost is going to be, can you just frame that up in terms of what would be the nature of any potential CapEx related to this? And if there's not so much of like a CapEx or economic moat, what positions you to win this agreement? And what would position MPLX in your regions of service given the competition out there to win incremental agreements? And with this transaction specifically, what are the next steps?

Yes. Thanks, Theresa. Look, I think one of the benefits that we see from this transaction is the potential for in-basin demand, right, the growth in that in-basin demand. So essentially, the way that this LOI will continue to be structured is we will provide gas, at the tailpipe of our plants. And then in return, so to speak, we will have the ability to have lower cost, more reliable power to provide to our producer customers. So again, when I say low or no cost, there really isn't anything that we need to do in order to facilitate that transaction. In terms of the opportunities there, we're continuing to evaluate how that might go forward. But as we stand right now, this LOI, we think, has the potential to increase in-basin demand.

Our next question comes from Burke Sansiviero with Wolfe Research.

Just looking at Slide 9, can you please walk through some of your assumptions for in-basin demand growth and incremental takeaway capacity to underwrite the 10% Marcellus and Utica gas growth through 2030? Mainly curious if you expect new greenfield pipelines to be built out of Appalachia.

This is Greg. I'll speak to that. We continue to grow in the Marcellus and the Utica, primarily the Marcellus through incremental plant construction. You see our Harmon Creek III plant in Washington County, PA is in construction and supported by customer contracts. We have seen growth over the last 12 to 18 months in the Utica as we fill existing capacity in that system that was built years ago. Our customers, producer customers who own the residue gas at the back of our plants have commitments and are finding the capacity to exit the basin. There's also in-basin demand growth, both for power generation, both coal-to-gas switching at existing plants and then new plants as well as behind the meter, whether data center or other power generation. So I think there's in-basin demand growth. Obviously, MVP coming online was a big addition to takeaway capacity, and we continue to see increases in capacity announced on that system, particularly as the downstream pipeline system is debottlenecked. So we feel that our producers with the positions they have, both in firm capacity and capacity that opens up that maybe other producers don't use, can grow, the ability to continue to grow even in the Marcellus where the volumes are high and utilization is high.

Just as you continue to build out the Permian position, do you have visibility on filling the full 300,000 barrels per day on BANGL with NGLs from your own plants?

Yes. We have visibility to fill that capacity on that pipeline.

Your next question comes from Jeremy Tonet with JPMorgan.

Just as I think about, I guess, the long-term EBITDA growth, going to be in the mid-single-digit growth on a multiyear basis, would organic initiatives be enough to underpin that? Or would there need to be a certain amount of inorganic initiatives as well to complement that to get to mid-single digits or higher?

Jeremy, you were cutting out a little bit, but I think your question was, do we need M&A and organic growth opportunities to meet mid-single digit growth over the longer period of time. I think that's what your question was. So let me try to address that. As you've seen over the next couple of years, I tried to lay out how we see that EBITDA coming to fruition. But certainly, when we look at organic opportunities, those that fit our strategic lens, we're executing on those. I gave you a few examples. But we also see the opportunity, again, assuming that those M&A opportunities would meet our strategic rationale, providing us that mid-single-digit growth and give us mid-teens returns. We do see opportunities for incremental M&A to continue to build out mid-single-digit growth. I hope that was your question, Jeremy.

So it sounds like organic alone wouldn't get to mid-single digit; there would need to be acquisitions to get there over a multiyear period.

Yes. I think that's fair. When you look at the size of our EBITDA, if I can do rough math for you, just a $7 billion EBITDA, we're approaching $0.5 billion worth of growth. We've shared with you the opportunity set in nat gas and NGL and we'll continue to focus our resources in the Permian. We will also concentrate on the base business. We never lose focus on the base business, including JVs and opportunities there as well. But given the size of that EBITDA growth, likely that we will see inorganic opportunities as well.

Jeremy, this is Kris. I might just add to that as well, though. One thing I do want to note is you've heard about all of these acquisitions we've recently done. This also provides additional growth opportunities of new organic projects for optimization and growth. So that backlog of what I would call capital projects is going to continue to grow. So we have backlog looking into '26, '27 as we sit today, '28. As Greg and Shawn continue to see these assets come online, they're also going to identify more opportunities for more organic projects as we progress.

That's helpful. And if I could get one last one in, just as far as the distribution growth policy, how should we think about that over time post the two 12.5% raises recently here?

Yes. Thanks, Jeremy. So as I mentioned, we look at a couple of years and see a path to 12.5% distribution growth for the next couple of years. That's how we're seeing it today. And beyond that, we'll continue to evaluate. But for the next couple of years, in addition to '24 and '25, that's how we see 12.5% distribution growth.

Our final question comes from Michael Blum with Wells Fargo.

Just wanted to go back to a prior comment made about evaluating potentially bringing power to a data center project since you do operate a lot of... you have a lot of experience operating those anyway. Is that something that you're actively evaluating and in discussions with potential customers or just more something that's sort of a longer-term potential item?

Yes. We have no intent to indicate that we are actively evaluating it. Instead, we have the capability and options available if it makes sense in the future.

Okay. Perfect. And then I just wanted to ask like high level, if you could refresh us a little bit. I think there's a view out there that crude oil prices are going to be lower for some period of time here. So can you just discuss how that could impact your Logistics segment either positively or negatively?

This is Shawn. In terms of our crude oil and project logistics operations, our volumes remain robust across all areas, primarily due to our partnership with Marathon Petroleum. This collaboration continues to provide us with a solid foundation. Looking ahead, we are still experiencing strong demand and throughput.

Yes. And Michael, this is Kris. What I might add to that, you'll remember that on the crude oil and project logistics side of the business, those contracts with Marathon have significant minimum volume commitments, and they're also capacity-type arrangements. So if you go back all the way to kind of the COVID year, you'll remember, they didn't really see that big of a dip in what would be probably the most extreme, hopefully, we ever see when it comes to EBITDA from that segment. So that segment is very well protected.

I would add that from a producer standpoint, we're still seeing strong demand for gas, NGLs, and crude oil. We're not seeing changes in plans regarding producer activity.

All right. Operator, do we have any other questions today?

At this time, I'm showing no further questions.

Great. With that, should you have more questions or would you like clarifications on the topics discussed this morning, please feel free to reach out. Members of our Investor Relations team will be available to take your calls. Thank you so much for joining us today.

Thank you. That does conclude today's conference. We thank you for your participation. At this time, you may disconnect your lines.