MPLX LP (MPLX) 2018 Q1 法說會逐字稿

Welcome to the MPLX First Quarter Earnings Call. My name is Elaan, and I will be your operator for today's call. (Operator Instructions) Please note, this conference is now being recorded. I would now like to turn the call over to Kristina Kazarian. Kristina, you may began.

Morning, and welcome to the MPLX First Quarter Earnings Webcast and Conference Call. The synchronized slides that accompany this call can be found on mplx.com under the Investors tab. On the call today, we have: Gary Heminger, Chairman and CEO; Mike Hennigan, President; Pam Beall, CFO and other members of the op management team. We invite you to read the Safe Harbor statement and non-GAAP disclaimer on Slide 2. It's a reminder that we will be making forward-looking statements during the call and during the question-and-answer session that follows. Actual results may differ materially from what we expect today. Factors that could cause actual results to differ are included there, as well as in our filings with the SEC. Now, I will turn the call over to Gary Heminger for opening remarks on Slide 3.

Thanks, Kristina, good morning and thank everyone for joining our call. Before I begin, we're delighted to welcome Kristina Kazarian, who recently joined our team as Vice President of Investor Relations for both MPC and MPLX. Kristina comes to the role with experience at 2 of Wall Street's premier financial institutions, where she led Equity Research Teams covering petroleum refiners, midstream companies and Master Limited Partnerships. She brings a deep understanding of our business and a competitive landscape and will be a tremendous asset as we execute on our corporate strategy.

You are likely aware that earlier this morning, MPC announced its plan to acquire all the outstanding shares of Andeavor to create a leading energy company of the U.S. We are enthusiastic about MPLX's role in this new-leading energy company, that is well positioned for long-term growth and value creation for all of its stakeholders, and we believe this combination and expansion of MPC's footprint will provide additional strategic and organic growth opportunities for MPLX.

Also, at the closing of the transaction, MPC will own the General Partner of MPLX and Andeavor Logistics as well as the majority of the limited partner units of both partnerships.

We know that a very logical question is, what will the general partner do with the 2 of MLP's post closing. We are not commenting or any potential structural considerations for MPLX and Andeavor Logistics today. Both will operate as separate MLPs, and MPC will evaluate structural considerations at the appropriate time following the close of the Andeavor transition. As a result, we will not be addressing these questions during the question-and-answer session.

Moving to the first quarter results, I am pleased to report that MPLX delivered another strong quarter, continuing our track record of sequential earnings growth, driven by strong contributions from our underlying base business as well as the February dropdown. We are executing on our robust organic growth plan and commenced operations of 3 processing plants in the quarter with 5 more planned this year as well as 3 fractionation plants.

This growth, when combined with our existing business and strong balance sheet, positions MPLX as one of the most compelling investments in the midstream space. With that, let me turn the call over to Mike to review our quarterly financial and operational highlights on Slide 4. Mike?

Thanks, Gary. As Gary mentioned, I'm pleased to report record quarterly financial results with adjusted EBITDA of $760 million and distributable cash flow of $619 million. We announced our 21st consecutive increase in our quarterly distribution, to $0.6175 per common unit, a 14% increase over the distribution in the first quarter last year. We also affirmed our distribution growth guidance of 10% for 2018 and our intent to continue to execute a self-funding model with no expected new units to be issued this year to fund our organic capital investments. The partnership ended the quarter with a leverage of 3.8x, well below levels for an investment grade credit profile and strong distribution coverage of 1.29x.

Slide 5 provides an overview of our logistics and storage segment. Before I cover the quarterly highlights, there continues to be a lot of discussion in the market regarding FERC's policy revision no longer allowing MLPs to recover an income tax allowance in cost of service rate filings. I just want to reiterate what we disclosed in our press release issued on March 16. We expect these revisions to have a de minimus impact on the partnership's earnings and cash flows.

Turning back to our L&S quarterly highlights. We completed the dropdown of refining logistics, assets and fuels distribution services, commissioned the Robinson butane cavern and added 2 boats and 13 barges to our marine fleet. Further expansion to our fleet are expected later this year. The partnership also completed the first phase of our expansion of the Ozark and Wood River-to-Patoka pipeline systems, which deliver Cushing crude source to Wood River and Patoka. This expansion capacity is ramping up as boosters and connections are completed at Cushing. The full expansion to 360,000 barrels per day is expected to be available by mid-2018. We're pleased to bring these projects online, which provide additional high-quality, fee-based earnings to the partnership as well as logistics solutions and crude optionality to MPC and other market participants.

Moving to our gathering and processing segment. Slide 6 provides an overview of our operations in the Marcellus and Utica shales during the quarter. Gathered volumes increased 46% over the same quarter last year to an average of 2.7 billion cubic feet per-day, setting a new record for the partnership. Processed volumes averaged approximately 5.1 billion cubic feet per day in the quarter, representing a 10% increase over the same quarter last year. While volumes were up versus the first quarter of 2017, there were a couple of factors that resulted in lower processing volume versus the fourth quarter of last year. First, much of this decline was planned as producers temporarily shut in wells that were producing in the fourth quarter in order to safely frac and complete new wells in the vicinity of the existing wells. This practice is common in the industry where you take one step back in order to gain two steps forward in terms of volume levels. We also had a planned shutdown at our Houston Complex to complete maintenance and turnaround work in advance of placing our new 200 million cubic feet per day plant in service. In addition to the 2 planned reductions, we also experienced unexpectedly harsh winter conditions in the Northeast that impacted producer volumes and some of our facilities. With these activities behind us, we expect new wells to come online in the second quarter leading the higher volumes in the quarter and continuing the growth trends throughout the year. We have a positive outlook for volume growth in the Northeast. To support this growth, we expect to add 800 million cubic feet per day of incremental capacity during the second half of the year through planned additions at our Sherwood, Majorsville and Harmon Creek complexes.

Slide 7 provides a summary of our fractionated volumes in the Marcellus and Utica regions. We produced a record 395,000 barrels a day of ethane and heavier NGLs in the quarter, up 18% over the same quarter last year.

During the second half of the year, we expect to add 20,000 barrels per day ethane fractionation capacity at both Sherwood and Harmon Creek and a 60,000 barrel per day propane plus fractionation capacity at our Hopedale Complex. These capacity additions will further strengthen our position as the largest fractionator in the Northeast.

Moving to our Southwest operations on Slide 8. Gathered volumes averaged nearly 1.5 billion cubic feet per day for the first quarter, representing a 10% increase over the same quarter last year. Processed volumes averaged over 1.3 billion cubic feet per day for the quarter, a 5% increase over first quarter 2017. We are pleased to report continued progress on our Permian growth strategy. We commenced operations of the $200 million cubic feet per day Argo Plant, doubling our processing capacity in the highly prolific Delaware Basin.

Construction of the Omega plant in the STACK shale play of Oklahoma continues and is expected to be operational by mid-2018. These midstream assets and joint venture interest expand our footprint in the Southwest and provide the partnership growth and diversification of cash flows.

Before I turn the call over to Pam, I want to take a moment to summarize why we continue to believe MPLX is one of the most attractive investments in the midstream space.

First, in the logistics and storage segment, over the past year, we have acquired from MPC midstream assets and services that are projected to generate $1.4 billion of annual EBITDA for the partnership. These are fee-based earning streams with almost no commodity sensitivity to them. We have a strong focus on continuing to be a superior midstream service provider at MPC. And at the same time, we see an opportunity to attract more third-parties to our current assets as well as replace some of the third parties who currently provide logistics services to MPC. On the Gathering and Processing side, we have a solid foundation, particularly in the Northeast, where we are the largest processor and fractionator in the region. We also have a presence in the Permian and STACK and expect to see growth in these regions. We remain bullish on U.S. crude and natural gas production and are enthusiastic about the long runway of investment opportunities for MPLX. With the support of MPC as our sponsor, we have the ability to develop incremental infrastructure to support growth across the hydrocarbon value chain, importantly including export opportunities.

We are executing a self-funding model and intend to finance our approximate $2 billion of organic growth without issuing public equity. Our plan is to fund this growth with retained cash and debt, while maintaining an investment-grade credit profile and strong distribution coverage. The future for MPLX is bright. We are one of the premier midstream investment offerings and are well-positioned to deliver long-term, sustainable distribution growth to our investors.

I will now turn the call over to Pam to cover some financial highlights. Pam?

Yes. Thanks, Mike. Turning to our financial highlights on Slide 9. We reported adjusted EBITDA of $760 million and distributable cash flow of $619 million for the first quarter, both of which are records for the partnership. We are now providing segment-adjusted EBITDA in addition to segment income for our respective business segments. We believe this supplemental non-GAAP financial measure will be useful to investors and other stakeholders. Total Logistics segment adjusted EBITDA was $437 million, while the Gathering and Processing segment contributed $323 million in adjusted EBITDA.

The bridge on Slide 10 shows the change in adjusted EBITDA from the first quarter of 2017 to the first quarter of 2018. Since the prior year quarter, we increased adjusted EBITDA by $337 million, $283 million of this increase came from the assets and services acquired from MPC. With each dropdown's contribution broken out separately on the waterfall.

The adjusted EBITDA for the refining logistics assets and fuels distribution services included a one-time benefit of approximately $24 million in the first quarter, related to the treatment of this dropdown for the partial period.

With our strategic actions now complete, we continue to expect the assets and services acquired from MPC in 2017 and 2018 to generate approximately $1.4 billion of annual adjusted EBITDA. The increase in the logistics and storage segment was primarily driven by earnings from Ozark Pipeline and the expansion of our marine fleet that Mike referenced earlier. For the Gathering and Processing segment, higher gathered, processed and fractionated volumes accounted for the majority of the increase.

Slide 11 provides a summary of key financial highlights and select balance sheet information. On February 1, we drew $4.1 billion on our term loan to fund the dropdown transaction with MPC. And on February 5, we successfully raised $5.5 billion in unsecured senior notes with a weighted-average coupon of 4.4%. And those offerings were significantly oversubscribed, demonstrating confidence in the quality of our asset base. Net proceeds from this offering were used to repay the term loan, outstanding borrowings on our bank revolving credit facility and our facility with MPC. Remaining proceeds will be used for general partnership purposes, including our continued investment in the business. We had approximately $2.7 billion of liquidity at the end of the quarter with approximately $2.2 billion available on our bank revolving credit facility and $500 million available on the intercompany facility with MPC. We've since increased the availability on our credit facility with MPC to $1 billion. The increased borrowing capacity provides the partnership additional financing flexibility and provides interest expense savings across the enterprise.

Consistent with our intent to manage to a self-funding model, no public equity was issued in the first quarter. We are committed to maintaining a strong balance sheet and ended the quarter with a leverage ratio of 3.8x, comfortably within levels appropriate for an investment-grade credit profile. With a solid track record of growing distributions to unitholders, and last week, the Board of Directors of our General Partner declared the distribution of $0.6175 for common unit. This distribution supports our prior guidance. And we continue to expect 2018 calendar year distribution growth of approximately 10%. With our strong balance sheet and robust organic growth opportunities, we're well-positioned to deliver attractive long-term returns for our unitholders.

And now, let me turn the call back over to Kristina.

Thanks, Pam. (Operator Instructions) With that, we will now open the call to questions.

(Operator Instructions) Our first question today is from Jeremy Tonet from JP Morgan.

I just want to start off with the -- if you could update us post the ADV -- ANDV merger, what the dropdown inventory at MPC would look like?

Yes, Jeremy it's way too early for us to be able to project or forecast at this time. As you know, as required, both MLPs will operate the normal ordinary course of business in the meantime between announcement here and closing. And we really will not start looking at the structure that I've set this morning. This is a gate -- a day 2 issue for bringing these MLPs together. But as we've stated before, the dropdowns at MPC are largely complete with the big dropdowns we completed in February of this year. And we have a few assets still in MPC. But business will be normal as usual with both sides managing their MLPs between now and closing.

Fair enough. Maybe if I could just turn to the organic growth opportunities set. For MPLX and the Gathering and Processing side in the Permian and STACK, I was wondering if you could update us there as far as your commercial activities and if you see more expansion opportunities there?

Right, I might have Mike cover this. But let me say one thing, I talked about this a good while -- Greg and I both did this morning is that the natural synergy that was just announced last week that Andeavor is going to be part of Gray Oak pipeline. And with our big demands, Galveston Bay is a 600,000 barrels a day refinery, about 200,000 of that is a light sweet input. So there's just a natural synergy there. And with that pipeline opportunities as we're looking at other pipeline opportunities that may fit for us as well to serve Galveston Bay. So I just want to speak to that synergy, but Mike will go into the detail of other assets.

Jeremy, as you know, we're putting a lot of emphasis on growth in the Permian. We did announce that our Argo Plant has started up. So that's our second plant in the Delaware Basin. We're hoping to continue to progress that and in time, get to announce another plant. As you also know, I've been pretty vocal about, we want to get into long-haul pipelines, both on the gas, NGL or even crude side. All those things are still priorities for MPLX. We also, as you mentioned, continue to look at the STACK as an area for growth. And as Gary mentioned, having our sponsor get more involved in the crude area is good for us. We certainly on our own have had an emphasis in that crude area. And I've been vocal before that we've been looking at crude projects that would support MPC's growth in the Gulf Coast region. So we're excited about the transaction that has occurred. We have a lot of good things going that we've already spoken about. And then obviously some more things will be available in the future, hopefully.

Our next question is from Shneur Gershuni from UBS.

Just to clarify your response to Jeremy's first question with respect to drop. So are you saying at this point right now that there is no expected drops for MPC as a result of the merger of ANDV and MPC? Or is it just you sort of view that is part of the structure review? I'm just trying to understand kind of the subtle differences between them.

No, I wasn't trying to be subtle there. The -- all I said Shneur, was we -- it'll be business as usual, both parties will determine now what is best for their MLP until we close. And I didn't say that there won't be any drops for MPLX. We sat right down with the very strong coverage ratio. I can let Mike and Pam here discuss, I don't know if you have, I don't think you have anything planned for the second quarter, but I don't. Mike?

Yes, Shneur, I'll just add, as Gary mentioned, what we've been trying to say from the MPLX model standpoint is, we're going to self-fund organic growth that we have already disclosed about $2 billion worth. We're going to keep our coverage ratio up at a high level to give investors comfort on stability. We finished the year of 2017 at 1.28. We just finished the first quarter at 1.29. We have debt to EBITDA at 3.8x in the quarter. So we're going to continue to execute the plan that we've had. At the same time, we're very excited about the transaction the sponsor has announced. That's a great thing for everybody involved, and we look forward to seeing how that plays out in the future.

Maybe a better way to ask the question is Andeavor -- is there any language that prevents Andeavor from picking any drops before the merger of Andeavor and MPC?

What we said once again, Shneur, both parties are going to operate their assets in the normal course of business, and I can't go any deeper than that at this time.

Okay. Maybe a follow-up on the business related question. There's been a lot of talk about overproduction of natural gas, causing natural gas price realizations to drop and potentially impacting Marcellus. With Mariner East 2 at some point coming to service, are any of your customers looking at shifting grades away from, say, big gas wells in Utica to the more liquid rich wells in parts of the Marcellus that have less gas and so forth. Do you see sort of that trend potentially emerging as there's more NGL Takeaway capacity?

Yes, Shneur, this is Mike. Yes, a couple of comments for you. First off, we are still just as bullish the Marcellus Utica as we've been. Obviously, there's a lot of associated gas that comes out of the Permian, that will be important part of the natural gas dynamic going forward, but outside of that associated gas, we believe the Northeast has the lowest cost structure for natural gas production for the U.S. So it will continue to be a very important part of the natural gas supply and demand going forward. Specifically to your question, we're encouraged that we're seeing from the producers on both the dry and the wet increased activity. Obviously, that's part of the reason that we've announced 8 processing plants this year with the majority of those up in the Northeast, so we are gearing up for considerable growth in the Marcellus Utica. You saw volumes pick up in 2017 in the dry area. Specifically to your question, we are seeing some movement from dry to wet as absolute flat price continues to increase and you're seeing propane prices and C3, C4 prices continually move back up with crude price. So I think you're seeing a little bit of both. We're bullish. That's why we have the plans we've had in place. We're going to progress pretty good organic growth program up in the Northeast. And then, I know we get the question a lot about associated gas versus Marcellus Utica. And I always encourage people to look at any consultant out there and anyone that you want to pick, and you'll see that the Marcellus Utica growth is still a very important part of the natural gas supply demand balance.

Our next question is from Michael Blum from Wells Fargo.

First question is on your very strong commitment to self funding. Does that -- will that still hold in place regardless of any future acquisitions you undertake at MPLX, including potentially MPLX buying Andeavor's MLP?

So Michael, this is Mike. What we've said in the past is that self-funding model is there to represent organic growth program. We said, we do not plan to issue any equity to support that organic growth, but if there was a situation where our project was large enough or an acquisition or something along those lines that required that access to the Capital Market, we would look at that. But from the pure self-funding standpoint, what we're trying to relate to the market is that's related to our organic program.

Okay. And then second question, just as you continue to add capacity in the Northeast from the processing and frac side, can you just talk kind of big picture, how you're thinking about handling the incremental NGL equity wells that are coming out in light of the fact that Mariner East 1 is out of service and Mariner East 2 is likely delayed?

Yes, Michael. We continue with the same plan that we've done to-date. Up until this point, we're moving all the NGL barrels through the existing ethane pipes that are available. And we're moving a lot of the C3-plus, obviously, through -- mostly through rail. That will continue to be our plan since the Mariner System comes up. We still are very supportive of both Mariner 1 and Mariner 2 coming online. We've been asked the question a couple of times if it's delayed further, does that impact us. And we've stated that we don't see any impact throughout the remainder of the year if it were delayed further. Obviously, at some point, if it continue to be delayed, we'd have to make additional plans. But right now, we're assuming that Mariner will be coming up. And it'll be a major part of the NGL Takeaway up in the Northeast.

Our next question is from Barrett Blaschke from MUFG Securities.

Just a couple of kind of housekeeping, a lot of mine have been asked. As we're thinking about ongoing growth in processing and fractionation in the Northeast, where do you, sort of, see a ceiling? Are you getting -- do you feel like you're getting close to it? And is there a point where MPLX becomes a bigger part of the downstream solution for Takeaway capacity?

To your first part Barrett, right now, we continue to see just growth. We're not seeing anything that gives us any concerns up in the Northeast. As was mentioned earlier, I often get asked the question about associated gas and obviously associated gas being free with the crude production down in the Permian. We certainly agree with that, but I always try and point out to everybody that the lowest cost gas outside of that associated gas is in the Northeast in the Marcellus Utica. So I'm still very bullish that the growth in natural gas supply demand will have a major part up in the Northeast. Second question was on NGL Takeaway. As I just mentioned previously to Michael, we're supportive of the Mariner systems coming online. We look forward to the opportunity to have further discussions whether it's JVs or anything along those lines in that regard. But for right now, we're just supportive of seeing those pipelines come online and increase the dynamic up in the Northeast of NGL Takeaway.

Our next session is from Corey Goldman from Jefferies.

Just a quick question. If I can actually go back to the presentation for the Andeavor Marathon combination, Slide 16, you guys get the breakdown to 2 high-quality MLPs. And I'm sorry, if I can't tell if the disclosures were supposed to be meant for the 2018 EBITDA using FactSet consensus? Is that guidance for the 2018 EBITDA based on your expectations? Or is that what you're referring to for the source for FactSet?

I think what I'm looking at is, if you're referring to the chart that has 2 bars, that's just consensus data that came out of FactSet, yes.

Okay, 1.2 for ANDX, and 3.3 for MPLX, right?

Yes, that's correct. That whole chart is the source's FactSet data.

Understood. Okay. I don't know if you guys gave guidance for the MPLX even though you talked about last quarter not providing that. So I just wanted to confirm that. That's all I had.

Our next question is from Ross Payne from Wells Fargo Securities.

Mike, you obviously voiced before this transaction was announced with MPC and Andeavor that you had an interest getting into the Permian. Do you have interest beyond what Andeavor brings to the table with their pipeline exposure, et cetera?

Yes, Ross, obviously, I can't speak for ANDX, but as you stated, we are pretty public that one of MPLX's goals was to get more active in the Permian, both on the NGL and gas side with our processing plants. Also mentioned that we want to get into long-haul pipelines. At the end of the day, the exposure that we are going to have there is independent, but also obviously complementary because we're very excited that our sponsor has engaged in a transaction that brings more footprint in the Permian. So obviously, we see more growth opportunities in the future, but in the short term, we're going to continue to focus on what we've stated in the past. And that includes crude exposure, as Gary mentioned earlier, that's something that we were working on independently, and then obviously, the sponsor transaction adds to that and provides growth for us in the future hopefully as well.

And Mike, did you guys look at Gray Oak on your own behalf before this as well?

So we are obviously always evaluating all the projects that are out there. Gray Oak is one of the project that's been out in the public domain. We've been looking at that as well as others. So we've been a part of that process and we'll continue to be that way.

Our next question is from Matthew Phillips from Guggenheim Partners.

So Gary, you mentioned on Gray Oak, a downstream connectivity to Galveston, MPLX obviously has a Texas City tank farm. I mean what kind of opportunity do you all see downstream in terms of expansion opportunity in the Houston and Galveston area?

Yes, Matthew, what I said was on the call this morning that Andeavor Logistics through their gathering systems, they're gathering a significant amount of crude in the Permian area. And we are a natural customer and are refining, and we'll see what happens. Gray Oak was announced today, does not include a connection into Galveston Bay. But I said that we're looking at that as well as we're looking at a few other options that are coming out of the Permian as well to see what the best project is and where I look at, is kind of a high-grade problem. And that there are going to be several options that we have in order to be able to connect into Galveston Bay.

So not only for servicing Galveston Bay, Mike can speak on some other opportunities that we believe can be in and around our GBR facility.

Matthew, as Ross just asked, we have been intensely focused on the Permian as an area where we think we can create value at MPLX. We've been looking at these crude projects and we've been vocal about our involvement and looking in that. Gary just mentioned, one of our primary goals is to enable better supply into Galveston Bay. In addition to that, as you just mentioned, one of our goals is to be more active in the export community. And we are growing out our tank farm at Texas City as a portion of that strategy. We'll continue to look for other opportunities as far as exporting goes, that's another important part of this. So being part of the value chain that gets us into the crude game is something that we've stated as the goal continues to be obviously to sponsor transaction brings another dynamic to that. But absent that, it's an area that we've been focusing on and we'll continue to evaluate a couple opportunities as well as pursue long-haul pipes in general whether they're gas or crude, those are the things that we've been talking to you about in the recent past.

Understood. It -- in the follow up on the presentation for the acquisition you'll provide in the appendix of some nice pro forma of footprints on both Permian and Bakken for the Andeavor assets. With the lack of Rockies assets, pro forma mapping here imply that they don't quite fit into MPLX as long-term plans as much as does other 2 basins?

Not at all. In fact, we're one of the biggest purchasers of Rockies type crude that could get into the DAPL pipeline system as well as crude that can get down into Cushing and then get back up into Patoka. So we have many opportunities and the word that we like to use is optionality in the way we support our supply needs for our refineries. And the same thing goes for Andeavor's refineries. They've been able to do a very good job of moving barrels from the Bakken west. So you just look at our opportunities there. I think we have a lot of opportunities for solutions going forward.

And we do have time for 1 final question. Our last question today is from Craig Shere from Tuohy Brothers.

Beyond 2018, do you see the need for robust MLP coverage to cover equity funding for new growth projects as something systemic the MLP space is going to have to face for years to come? And something that would be unchanged by any material expansion of scale at your MLP level?

So this is Mike. One of the things that we're trying to be very attentive to is the investor basin and what they're looking for. And we think there's a combination of good long-term growth as well as providing sustainable coverage. So right now, what we're trying to provide is both. I mean we've guided this year for 10% growth in distribution which we think is pretty strong signal of our confidence in our long-term plans. At the same time, that we've guided that we would have coverage greater than 1.2 and as you just saw in our announced results, we are 1.29 for the quarter. So we continue to think there's a good balance needed. Investors need to see that stability from 1 side of it as well as continued growth. And that's our mission. We haven't guided past 2018, but we'll continue to be in contact with the market and provide investors what we think they're looking for as far as a valued investment.

Do think in terms of market appetite for a really stable large entity to support low-risk growth CapEx that it's still an open question as to whether there is sufficient market support that would allow for tapping external equity for growth funding, say years from now?

Yes, I mean I'm not going to speculate out for years from now, but what I can tell you is, again along the same lines of -- we saw a need in the market to show that stability, show like you said the lack of delusion. And that's why we've been very vocal about a self-funding model. At the same time, we have a pretty robust program. We're announced at about $2 billion of organic growth, we're going to do that with coverage and with debt, but I think we're providing the marketplace with what they're looking for from an MLP's offering. And we feel pretty good about the future of MPLX. From that standpoint, we think we're providing the model that the market is looking for. We're excited about the investments that we have planned. And now we're also very excited about the transaction that the sponsor has announced today.

Craig, this is Pam. And I'll just add to that that as Mike highlighted earlier, if there were a scenario where we needed to raise equity, we would. So first and foremost is, we're going to defend the investment-grade credit profile that we have. We don't see a need to issue equity based on our current organic growth platform. But if the need arose then we would definitely do it to make sure that we have the investment grade credit profile that we want to have sustainably through the future.

Great. With that, thank you for joining us today and thank you for your interest in MPLX. Should you have additional questions or would like clarification on any of the topics discussed this morning, Doug Wendt, Denice Myers and I will be available to take your calls. Thank you so much. Operator?

Thank you. And this does conclude today's conference. You may disconnect at this time.