MPLX(US:MPLX)2022-02-02 19:41Financial Data and Key Metrics Changes - Adjusted EBITDA for Q4 2021 was reported at $1.4 billion, with a full-year total of $5.6 billion, reflecting a 7% increase year-over-year [6][20] - Distributable cash flow for Q4 2021 was $1.2 billion, an increase of almost 5% from the prior year [20] - The company returned over $4.2 billion to unitholders through distributions and unit repurchases in 2021 [8] Business Line Data and Key Metrics Changes - In the Logistics and Storage (L&S) segment, adjusted EBITDA increased by $50 million year-over-year, with pipeline volumes up 18% and terminal volumes up 11% [14] - The Gathering and Processing (G&P) segment saw adjusted EBITDA increase by $40 million compared to Q4 2020, driven by higher NGL prices, which averaged $1.05 per gallon, more than double the $0.52 per gallon in Q4 2020 [16][17] Market Data and Key Metrics Changes - The company experienced strong cash flow due to tailwinds from high NGL prices and recovery in U.S. refined product demand [8] - Gathered volumes in the Marcellus region were up 7%, while processing and fractionation volumes decreased by 2% and 6%, respectively [18] Company Strategy and Development Direction - The capital outlook for 2022 is set at $900 million, with a focus on high capital return projects, including expansions and debottlenecking of existing assets [9][10] - The company is evaluating low carbon opportunities to leverage its competitive advantage, particularly in support of MPC's renewable efforts [9][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving solid operational performance in 2022, despite acknowledging the one-off tailwinds that benefited 2021 results [11][36] - The company aims to maintain a strong balance sheet with a target leverage ratio of around 4x, while continuing to focus on capital discipline and a low-cost culture [10][22] Other Important Information - The company completed the sale of the Javelina processing plant and other minor assets for approximately $110 million [8][53] - The company declared a fourth-quarter distribution of $0.705 per unit, resulting in a distribution coverage of 1.64x for Q4 [20] Q&A Session Summary Question: Context on growth CapEx for 2022 - Management confirmed that some spending from 2021 would shift into 2022, with a focus on smaller debottlenecking and expansion projects rather than large capital projects [25][26] Question: Drivers for EBITDA in 2022 - Management highlighted NGL prices and potential asset sales as key drivers, while noting uncertainty around capital spending and working capital [32][34] Question: Clarification on Whistler expansion - The Whistler expansion to 2.5 Bcf per day is under consideration but not yet budgeted; timing and costs remain to be determined [43][44] Question: Impact of inflation on capital allocation - Management indicated a focus on maintaining a strong balance sheet while evaluating growth opportunities and potential distribution increases [46][47] Question: Asset sales and market appetite - The company continues to evaluate its assets, with recent sales resulting from portfolio optimization; market appetite for G&P assets remains under review [52][54] Question: Northeast production outlook - Management expects continued flat production in the Northeast, with some producers slowly bringing on new pads [60] Question: Processing capacity changes - Adjustments in processing capacity were made as part of cost reduction efforts, with some units idled based on demand [72]