MPLX LP

Welcome to the MPLX fourth quarter 2021 earnings call. My name is Kristen 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. Press star one on your touch tone phone to enter the queue. Please note that this conference is being recorded. I will now turn the call over to Christina Tarazan. Christina, you may begin.

Good morning and welcome to the MPLX fourth quarter 2021 earnings conference call. The slides that accompany this call may be found on our website at MPLX.com under the investor tab. Joining me on the call today are Mike Hennigan, chairman and CEO, John Quaid, CFO, and other members of the executive team. We invite you to read the safe harbors statements and non-GAAP Disclaimer on slide two, 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 with that, I'll turn the call over to Mike.

Thanks, Christina. Good morning, and thank you for joining our call. Earlier today, we reported adjusted EBITDA of $1.4 billion for the fourth quarter of 2021. and $5.6 billion for the full year. Over the past year, we've executed on each of our three priorities. We exceeded our initial cost reduction target, reducing our annual operating expenses by approximately $400 million as compared to 2019 levels. We've made significant progress in this area over the last two years. And so what began as a cost reduction initiative is being embraced by the organization. Now a low cost culture is being embedded in how we conduct our business. We brought multiple projects into service over the last year while maintaining strict capital discipline. Within the L&S segment, our three Permian takeaway projects, Whistler for natural gas, Wink the Webster for crude oil, and our NGL project were all placed into service, and we expect volumes across these systems to ramp over time. Within the GMP segment, both the Smithsburg I processing plant in the Marcellus and the Preakness Processing Plant in the Permian have started operation. We also continued our portfolio optimization efforts and completed the sale of the Javelina Processing Plant in Texas and some minor gathering assets in southern Wyoming for proceeds of approximately $110 million. In addition to our cost reduction and portfolio optimization efforts, 2021 also benefited from the tailwinds of strong NGL prices and the recovery in U.S. refined product demand. All these items resulted in exceptionally strong cash flow and enabled us to return over $4.2 billion to unit holders through distributions and unit repurchases. On our Alaskan logistic and storage assets, we've been working a sales process since we last communicated. We'll be back to you when we have more details that we can share. Turning this slide forward in your deck, today we announced our capital outlook for 2022 of $900 million. That plan includes approximately $700 million of growth capital, $140 million of maintenance capital, and $60 million for the repayment of our share of the DAPL pipeline joint venture debt due in 2022. Our 2022 capital plan is directed towards investments expected to deliver high capital returns such as expansions, and de-bottlenecking of our existing assets and projects related to the expected increased producer activity. While our capital outlook is primarily focused on our current LNS and GMP footprint, we also continue to evaluate low-carbon opportunities where we can leverage our competitive advantage through technologies that are complementary with our expertise and our asset footprint. Near term, these opportunities are likely to be supported or to be in support of MPC's renewable efforts, such as investment in our logistics assets supporting MPC's Martinez Renewable Fuels Project. Moving to slide five, I'd like to provide some comments on our capital allocation framework, as I mentioned on last quarter's call. The foundation of executing this strategy is a strong balance sheet. We continue to target a leverage ratio of around four times and remain committed to an investment-grade credit profile. Our maintenance capital remains steadfast, and our commitment to safely operating our assets, protect the health and safety of our employees, and support the communities in which we operate. We continue to have a distribution with very strong coverage, and most recently declared a 2.5% increase to the base quarterly distribution on November 2nd. After these commitments are met, our plan focuses on investing to grow the business. In 2022, the majority of capital is expected to be directed at opportunities in the Marcellus, Permian, and Bakken, where we are focused on high capital return projects that expand and to bottleneck our existing assets. As I've stated in the past, we believe this is both a return on and a return of capital business. Each quarter, we will evaluate our free cash flow after distributions and determine the optimal use for those dollars, be it growth capital, buybacks, or additional distributions. As a reminder, 2021 had many one-off tailwinds which drove our return of capital, including strong NGL prices and asset sales. We're optimistic about our opportunity to achieve solid operational performance in 2022, and we'll evaluate the needs of the business as we make decisions on incremental return of capital. Shifting to slide six, we remain focused on leading in sustainable energy by lowering the carbon intensity of our operations and products, improving energy efficiency and conserving natural resources, all while using innovative technologies to do it. And we believe the targets we are setting and our transparent disclosures on how we plan to achieve these targets position us well for the future. Through the end of 20, MPLX was nearly halfway to reaching both our methane and freshwater intensity reduction targets. And later this quarter, we plan to report the progress we made on these initiatives in 2021. Now let me turn the call over to John to discuss our operational and financial results for the quarter.