Morning, and thank you all for holding. Welcome to the MPLX First Quarter Earnings Call. My name is Elan, 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.
Please note this conference is now being recorded. I would now like to turn the call over to Kristina Kavarian. Kristina, you may begin.
Good morning, and welcome to the MPLX Q1 2018 earnings webcast and conference call. The synchronized slides that accompany this call can be found on mplx.com under the Investor tab. On the call today, we have Gary Heminger, Chairman and CEO Mike Hennigan, Pam Beall, CFO and other members of the management team. We invite you to read the Safe Harbor statements 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, Christina. Good morning and thank everyone for joining our call. Before I begin, we are delighted to welcome Christina Kazarian, who recently joined our team as Vice President of Investor Relations for both MPC and MPLX. Christina comes through 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 the 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 plans to acquire all of the outstanding shares of Andeavor to create a leading energy company in the U. S. We are enthusiastic about MPLS' 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 MLPs post closing?
We are not commenting on any potential structural considerations for MPLX and Endeavor Logistics today. Both will operate as separate MLPs and MPC will evaluate structural considerations at the appropriate time following the close of the Endeavor transaction. As a result, we will not be addressing these questions during the question and answer session. Moving to the Q1 results. I am pleased to report that MPLX delivered another strong quarter, continuing 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 $760,000,000 and distributable cash flow of $619,000,000 We announced our 21st consecutive increase in our quarterly distribution to $0.6175 per common unit, a 14% increase over the distribution in the Q1 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 leverage of 3 point 8 times, well below levels for an investment grade credit profile and strong distribution coverage of 1.29 times. 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 minimis impact on the partnership's earnings and cash flows. Turning back to our L and S quarterly highlights, we completed the drop down 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 sourced 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-twenty 18. 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 2,700,000,000 cubic feet per day, setting a new record for the partnership. Process volumes averaged approximately 5,100,000,000 cubic feet per day in the quarter, representing a 10% increase over the same quarter last year. While volumes were up versus the Q1 of 2017, there were a couple of factors that resulted in lower processing volume versus the Q4 of last year. First, much of this decline was planned as producers temporarily shut in wells that were producing in the 4th 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 2 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 200,000,000 cubic feet per day plan in service. In addition to the 2 plan 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 2nd quarter, leading to 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 800,000,000 cubic feet per day of incremental capacity during the second half of the year through plant 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 barrel 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 1,500,000,000 cubic feet per day for the Q1, representing a 10% increase over the same quarter last year.
Process volumes averaged over 1,300,000,000 cubic feet per day for the quarter, a 5% increase over Q1 2017. We are pleased to report continued progress on our Permian growth strategy. We commenced operations of the 200,000,000 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-twenty 18. These midstream assets and joint venture interests 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. 1st, in the logistics and storage segment, over the past year, we have acquired from MPC midstream assets and services that are projected to generate $1,400,000,000 of annual EBITDA for the partnership. These are fee based earnings 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 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 $2,000,000,000 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 $760,000,000 and distributable cash flow of $619,000,000 for the Q1, both of which are records for the partnership. We're 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 $437,000,000 while the gathering and processing segment contributed 323,000,000 dollars in adjusted EBITDA. The bridge on Slide 10 shows the change in adjusted EBITDA from the Q1 of 2017 to the Q1 of 2018. Since the prior year quarter, we increased adjusted EBITDA by $337,000,000 $283,000,000 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 fuel distribution services included a one time benefit of approximately $24,000,000 in the Q1 related to the treatment of this drop down for the partial period. With our strategic actions now complete, we continue to expect the assets and services acquired from MPC in 2017 2018 to generate approximately $1,400,000,000 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 $4,100,000,000 on our term loans to fund the drop down transaction with MPC. And then on February 5, we successfully raised $5,500,000,000 in unsecured senior notes with a weighted average coupon of 4.4%.
The notes offering was 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. The remaining proceeds will be used for general partnership purposes, including our continued investment in the business. We had approximately $2,700,000,000 of liquidity at the end of the quarter, with approximately $2,200,000,000 available on our bank revolving credit facility and $500,000,000 available on the intercompany facility with MPC. We've since increased the availability on our credit facility with MPC to $1,000,000,000 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 Q1. 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 a distribution of $0.6175 per 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. As we open the call for questions, we ask that you limit yourself to one question plus a follow-up. You may be prompt for additional questions as time permits. With that, we will now open the call to
Our first question today is from Jeremy Tonet from JPMorgan.
Good morning. Congratulations on the transaction here.
Thanks, Jeremy.
I just want to start off with the if you could update us post the ANDV merger, what the drop down 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 in 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 said 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 opportunity set for MPLX on 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 want to have Mike cover this, but let me say one thing. I talked about this good while, but Greg and I both did this morning, is that the natural synergy that was just announced last week that the Endeavor is going to be part of the Gray Oak pipeline. And with our big demands, Galveston Bay is a 600,000 barrel 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 wanted to speak to that synergy, but Michael, go into the detail of other assets.
Yes, 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.
Thank you. Our next question is from Shneur Gershuni from UBS.
Hi, good morning, everyone. Just to clarify your response to Jeremy's first question with respect to drops. So are you saying at this point right now that there's no expected drops for MPC as a result of the merger of ANDV and MPC? Or is it just you sort of view that as 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. All I said, Shneur, was we it will 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 a 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 Q2. 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've already disclosed about $2,000,000,000 worth. We're going to keep our coverage ratio up at a high level that gives investors We have debt to EBITDA at 3.8 in We have debt to EBITDA at $3.8 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 transactions 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, is Endeavor is there any language that prevents Endeavor from making 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 a 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 into service, are any of your customers looking at shifting rigs away forth? Do you see sort of that trend potentially emerging as there's more NGL takeaway capacity?
Shneur, this is Mike. A couple of comments for you. First off, we are still just as bullish to Marcellus Utica as we've been. Obviously, there's a lot of dissociated gas that comes out of the Permian that will be an important part of the natural gas dynamic going forward. But outside 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've had the plans we've had in place that we're going to progress a 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.
Thank you. Our next question is from Michael Blum from Wells Fargo.
Hi, good morning. Thank you. 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 Endeavors MLP?
So Michael, this is Mike. What we've said in the past is that self funding model is there to represent our 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 a 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 a pure self funding standpoint, what we're trying to relate to the market is that's related to our organic program.
Okay. Thank you. And then second question, just as you continue to add capacity in the Northeast on the processing and frac side, Can you just talk kind of big picture how you're thinking about handling the incremental NGL equity barrels that are coming out in light of the fact that, you know, 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 until 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 of 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 continued 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.
All right. Thank you very much, Mike.
You're welcome, Michael.
Thank you. Our next question is from Barrett Blaschke from MUFG Securities.
Hey, guys. 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 then is there a point where MPLX becomes a bigger part of a 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. Well, 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 system 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.
Okay. Thank you.
You're welcome.
Thank you. Our next question is from Cory Goldman from Jefferies.
Hey, guys. So just a quick question. If I can actually go back to the presentation for the Endeavor Marathon combination, Slide 16, you guys give the breakdown of the 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 Faxap?
I think what I'm looking at is, if you're referring to the chart that has the 2 bars, that's just consensus data that came out of FactSet, yes.
Okay. So, 1, 2 for ANDX and a 3, 3 for MPLX, right?
Yes, that's correct. That whole chart is the sources FactSet data.
Understood. Okay. I didn't know if you guys gave guidance for the MPLX because I know you talked about last quarter not providing that. So I just want to confirm that. That's all I had.
Thank you.
You're welcome.
Thank you. Our next question is from Ross Payne from Wells Fargo Securities.
How are you doing guys? Hey, Mike. You obviously voiced before this transaction was announced with MPC and Endeavor that you had an interest getting into the Permian. Did you do you have interest beyond what Endeavor brings to the table with their pipeline exposure, etcetera? Thanks.
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're going to have there is independent, but also 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 projects that's been out in the public domain. We've been looking at that as well as others. So we've been part of that process and we'll continue to be that way.
Thank you. Our next question is from Matthew Phillips from Guggenheim Partners.
Good morning, guys. So, Gary, you mentioned on Gray Oak, 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 system, they're gathering a significant amount of crude in the Permian area, and we are a natural customer in our refining, and we'll see what happens. Gray Oak, as announced today, does not include a connection into Galveston Bay, but I said that we are looking at that. Wells, we are looking at a few other options that are coming out of the Permian as well to see what the best project is. And, we're I look at it as kind of a high grade problem, in 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.
So 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 in 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 stated as a goal, continues to be. Obviously, the 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 of 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. In the follow-up, I mean, on the presentation for the acquisition, you all provide in the appendix some nice pro form a footprints on both Permian and Bakken for the Andeavor assets. With the lack of Rockies assets pro form a map in here imply that they don't quite fit into MPLX's long term plans as much as those other two basins?
Not at all.
In fact, we're one of the biggest purchasers of Rockies type crude that can 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 the supply needs for our refineries. And the same thing goes for Endeavour'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.
Thank you. And we do have time for one final question. Our last question today is from Craig Shere from Tuohy Brothers.
Good morning and congratulations on the transaction announced earlier today. Beyond 2018, do you see the need for robust MLP coverage to cover equity funding for new growth projects. That's something systemic the MLP space is going
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 try and be very attentive to is the investor base 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 a 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 were 1.29 for the quarter. So we continue to think there's a good balance needed. Investors need to see that stability from one 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 you think in terms of market appetite for a really stable large entity to support low risk growth CapEx that still an open question as to whether there's 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, that lack of dilution, 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 announced at about $2,000,000,000 of organic growth. We're going to do that with coverage and with debt.
So 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 sponsors 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
Thank you. And this does conclude today's conference. You may disconnect at this time.