Lisa Wilson - Investor Relations Gary Heminger - Chairman & CEO Don Templin - President Pam Beall - Chief Financial Officer Randy Nickerson - Chief Commercial Officer Tim Griffith - SVP, Chief Financial Officer MPC.

Kristina Kazarian - Deutsche Bank Eric Genco - Citi Shneur Gershuni - UBS Brian Zarahn - Mizuho Michael Blum - Wells Fargo John Edwards - Credit Suisse Selman Akyol - Stifel Jerren Holder - Goldman Sachs Timm Schneider - Evercore ISI Helen Ryoo - Barclays Eric Genco - Citi.

Welcome to the Third Quarter 2016 Earnings Call for MPLX. My name is Katy and I’ll 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 that this conference is being recorded.

And now I will turn the call to Lisa Wilson, Director of Investor Relations. Please go ahead..

Thanks Katy. Good morning and welcome to the MPLX third quarter 2016 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 are Gary Heminger, our Chairman and CEO, Don Templin, President, Pam Beall, Chief Financial Officer and other members of the management team. We invite you to read the Safe Harbor statements and non-GAAP disclaimer on Slide 2.

It is a reminder that we will be making forward-looking statements today during the call and the question-and-answer session that follows. Actual results may vary -- 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.

Gary?.

Thank you, Lisa. Good morning and thank you for joining us. Before reviewing our third quarter financial results I want to highlight an announcement made by MPC this morning, and how it creates a value for MPLX unit holders.

By the end of 2017 MPC plans to offer the partnership assets contributing approximately $350 million of annual EBITDA with a first drop of approximately $235 million of EBITDA expected to occur by the end of the first quarter.

The transactions are expected to provide additional highly predictable incoming cash flow to the partnership, further diversify our earnings mix and enable continued strong growth at distributions.

Funding these drop downs will likely include transactions with MPC including the potential for a substantial amount of equity to MPC lessening the partnership reliance on the capital markets.

MPC also intends to execute on additional value and has seen dropdowns, totaling an estimate of $1 billion of annual EBITDA to the partnership within the next three years. The dropdown strategy is subject to market and other conditions as well as requisite approvals.

In addition to the expected dropdowns MPC announced the valuation of opportunities to optimize the partnerships cost of capital through a strategic review of its general partner interest.

We believe the MPC’s strategic plan introduced today including the visibility towards plan dropdown schedule combined with the strong underline organic growth we continue to enjoy in the gathering and processing business will support our continued strong growth in distributions.

Before I turn the call over to Don to discuss the quarterly results I want to take the opportunity to thank Nancy Buese for the contributions she has made in both MarkWest and MPLX over the past 11 years. We wish her well in her new opportunity. I also want to congratulate Pam Beall on her appointment as MPLX's CFO.

Pam has a long history with Marathon Petroleum and the MPLX family and will bring an insightful perspective adding tremendous value to the partnership. Now let me turn the call over to Don to review our quarterly financial and operational results.

Don?.

Thank Gary. Turning to quarterly results, we reported third quarter adjusted EBITDA of 375 million and distributable cash flow of 301 million. Since the merger with MarkWest we've delivered three strong quarters and continue to execute on our plans.

In addition we announced an increase in our quarterly distribution of $0.515 per common unit while maintaining a strong coverage ratio of over 1.2 times. We reaffirmed our distribution growth guidance of 12% to 15% for 2016. We also now forecast a distribution growth rate of 12% to 15% for 2017. And a double-digit distribution growth rate for 2018.

The expected increases in our distribution are supported by our robust portfolio of organic growth opportunities and the high quality dropdowns Gary talked about. Turning to Slide 4, we provide an update on our logistics and storage segments.

We commenced operations of the Cornerstone pipeline this month and are pleased with our team's success in completing it on-schedule and under-budget. Cornerstone pipeline is a comprehensive industry solution to move condensate and NGL out of the Marcellus and Utica region.

It results in a more efficient transportation of hydrocarbons from the region and the opportunity to increase the net backs for our producer customers. The pipeline segment connecting Hopedale complex to Cornerstone pipeline is expected to be completed later this year.

We've accelerated the completion of the connection to support natural gasoline demand in the Midwest. We're also in the process of expanding the capacity of existing pipelines as well as constructing new pipelines as part of our larger build out of Utica shale infrastructure. These projects are targeted for completion in mid-2017.

With this mix of new and existing pipelines we're seizing a unique opportunity to support producer customer growth by connecting NGLs to downstream markets in the Midwestern Canada through our extensive distribution network.

Shifting to our Gathering and Processing segment, Slide 5 provides an overview of our Southwest operations, where we recently expanded our processing operations to the Delaware Basin with completion of our Hidalgo complex in May. During this first full quarter of operations the Hidalgo complex was already operating at an 84% utilization rate.

For the Southwest region we processed almost 1.3 billion cubic feet per day of natural gas, a 14% increase in volumes compared to the second quarter. For the full year 2016 we continue to forecast an increase in Southwest process volumes of approximately 15% and a modest increase in gathered volumes.

And for 2017 we forecast process volumes to increase another 3% to 8%. Growth is being driven by the addition of our Hidalgo complex as well as further development of infrastructure to support Newfield stack play in the Cana-Woodford sale.

In the Stock Play we are currently processing over 100 million cubic per day of gas and are gathering over 80 oil wells with an additional 21 wells ready to flow. Moving to Slide 6, we provide an overview of our Gathering & Processing operations in the Marcellus and Utica shale.

Processed gas volumes average 4.3 billion cubic feet per day and our complexes were 79% utilized during the quarter. While other basins are in declined the Marcellus and Utica rich gas volumes continue to grow.

For 2016 we continue to expect processed volumes to increase by approximately 15% year-over-year and gathered volumes to increase by approximately 20%. And in 2017, we expect an additional 10% to 15% increase in processed volumes compared to 2016.

In 2017, we planned to complete two additional processing facilities at the Sherwood complex in Doddridge West Virginia. These expansions would increase total capacity by 400 million cubic feet per day and support increasing demand from Antara Resources one of our largest producer customers in the Marcellus.

Turning to Slide 7, we provide a summary of our Marcellus and Utica fractionated volumes. As the largest provider of fractionation services in the basin we produced 315,000 barrels per day of ethane and heavier NGLs during the third quarter. The ethane volume represents over 75% increase when compared to third quarter last year.

For 2016 we expect purity product fractionated volumes to grow by approximately 30% over the prior year. Due to the continuation of rich gas development by our producer customer we forecast the robust growth in fractionated volumes will continue throughout 2017 with 15% to 20% increase year-over-year.

To support our NGL growth forecast in 2017 we are in the process of constructing three additional fractionation facilities in the North East, adding 60,000 barrels per day of propane plus capacity at the Hopedale complex and a total of 60,000 barrels per day of ethane capacity at the Keystone and Majorsville complexes.

We are also accelerating completion of Hopedale three from second quarter 2017 to early 2017 to support liquid growth. Slide 8 provides a summary of our capital expenditure program. We narrowed our 2016 organic growth capital expenditures forecast to a range of $1.1 billion to $1.2 billion, based on out latest estimates.

In addition we are providing a preliminary 2017 forecast for organic growth capital investments of $1.2 billion to $1.6 billion approximately three quarters of this amount is attributed to the gathering and processing segment, supporting the additional processing and fractionation I referenced earlier.

The remainder of the budget is planning to support the Logistics and Storage segment. Projects include the Utica infrastructure build out, a butane cavern in Robinson, Illinois, and a tank farm expansion in Texas City, Texas. Work will continue on our Capital plan over the next several months as producers evaluate their 2017 drilling programs.

Consistent with prior practice our goal is complete facilities on just in time basis to meet their needs. We will provide additional guidance on our year-end earnings call. Now I'll turn it over to Pam to review our financial position and strategy.

Pam?.

Thanks, Don. Turning to our financial highlights on Slide 9, we reported adjusted EBITDA of $375 million and distributable cash flow of $301 million for the third quarter 2016. Approximately 70% of segment operating income for the quarter was generated by the Gathering and Processing segment.

The bridge on Slide 10 shows the change in adjusted EBITDA from the third quarter of 2015 compared to the third quarter of 2016. Since the prior year quarter we increased adjusted EBITDA by $309 million. The addition of MarkWest operations accounted for nearly all of this increase.

While the addition of the Marine business accounted for the majority of the remaining change. Slide 11 provides a summary of key financial highlights and select balance sheet information. At the end of the third quarter we had nearly $2 billion available on our bank revolver and the full $500 million available on our inter-company facility with MPC.

During the quarter we opportunistically issued 5.7 million new common units through our ATM program and received net proceeds of approximately $184 million.

As part of our effort to simplify our organization structure, during the third quarter MPC directly acquired -- or indirectly both acquired all of our outdating Class A units which were exchanged for common units. As a result of reorganization the partnership received cash of $225 million.

With $2.7 billion of available liquidity including approximately $200 million of cash and leverage that is well below our target, we're well positioned for the remainder of 2016 and into 2017. We plan on funding our organic growth opportunities over the long term on a 50-50 basis primarily using the ATM for the equity needs.

Also as Gary mentioned funding the dropdown contemplated in MPC's announced strategic plan would likely include transactions with MPC, including the potential for a substantial amount of equity issued to MPC, lessening the partnership's reliance on the capital markets.

We're committed to maintaining a strong balance sheet and an investment grade credit profile by targeting a leverage ratio of around four times. At the end of the third quarter our leverage ratio was 3.5 times.

On Slide 12, we provide our commodity price sensitivity forecast, highlighting the annual unhedged impact to DCF of our exposure to natural gas, natural gas liquids and crude oil. For the remaining commodity exposed portion, we continue to employ an active and disciplined hedging strategy and we have hedged almost half of our remaining 2016 exposure.

In addition, we have hedged approximately 25% of our 2017 exposure. We forecast net operating margin to be 90% fee based next year.

Turning to Slide 13, for 2016 we remain on-track to deliver our financial guidance of 12% to 15% increase in our distribution; adjusted EBITDA of 1.3 billion to 1.4 billion, distributable cash flow of 1 billion to 1.1 billion for the year.

We're trending towards the upper end of the forecasted adjusted EBITDA and distributable cash flow guidance ranges which we did increase last quarter. These results are driven by strong process volumes and improving outlook on pricing and the Gathering and Processing segment as well as our continued overall focus on cost control.

As Don mentioned we forecast 2017 organic growth capital of $1.2 billion to $1.6 billion, based on our expectations for producer volumes, commodity prices and our strategy of deploying capital on a just-in-time basis.

We expected distribution growth of 12% to 15% in 2017, including the impact of the dropdown announced today, and double digit distribution growth in 2018. MPLX has a consistent record of growing distributions to unit holders.

Based on our quarterly financial performance the Board of Directors of our general partner declared a distribution of $51.5 per common unit. The third quarter 2016 distribution represent a 10% increase over the same period last year and mark the 15th consecutive quarterly increased since our initial public offering in October 2012.

With strategically located assets, long term producer customer relationships, and a strong sponsor, MPLX is well positioned to deliver on 2016 and 2017 plans, and to continue providing sustainable returns well into the future. Now let me turn the call back to Lisa..

Thank you, Pam. As we open the call for questions, we ask that you limit yourself to one question plus a follow-up. You may re-prompt for additional questions as time permits. With that we will now open the call to questions..

Thank you. [Operator Instructions] And our first question comes from Kristina Kazarian from Deutsche Bank. Please go ahead..

Gary, so a lot of positive update this afternoon or this morning. And I listened to the refining analysts, all asked you about drop multiple, timing of decision on GP. So maybe let me try it a different way.

What is your long-term goal for MPLX? So what I'm trying to get at is if you and I are sitting here having this conversation in three years, what kind of Company is it going to be and what is going to define the story?.

First of all on the aggressive and bold moves that we made today is to help improve the cost of capital.

I believe there is going to be tremendous consolidation in this space and the way that we are going to be positioned as we move forward in the drops that we’ve already announced and to be able to look at the $1 billion that is still left, as we stated we will drop as we get those ready and we get the PLR approval down the road.

So as you say three to five years down the road, I think we are going to be very well positioned from a cost of capital standpoint.

If you look at being a large cap high growth MLP, we are one of the few in this space, but being able to dropdown the assets of we are talking about I think is going to position us very well, position us to go and be a consolidator in the regions that we are very prevalent today.

It’s going to allow us to be acquisitive in different markets and to help improve the currency that we have to be acquisitive. So I believe that all these steps are going to line us up to be one of the top performers and very sustainable performers in the MLP space..

Perfect. And my follow-up will be on fundamentals, good numbers this quarter in all of the regions.

So can you kind of just touch on maybe what you guys are hearing from producer customers specifically in the Northeast and what you think the biggest headwind is to driving continued meaningful volume growth across your system for those guys? Is it gas takeaway, is it improving their NGL net backs? What are you guys hearing on the ground?.

This I Don, I think we're actually getting some very optimistic and positive feedback from our producer customers. As we think about 2017, I would say there's a lot of optimism around Marcellus and the Rich-Gas.

So, to me and if you looked at our guidance that we were giving, a lot of the growth that we're embedding into our forecast relates to the Rich-Gas, Marcellus. There are a number of projects that have been undertaken and are being undertaken to improve the netbacks for our producer customers.

We've been very active in coming up with creative ways to do that. This past summer is a really good example.

We had I think 30 unit trains of propane that we ultimately sent to Conway and that allowed our producer customers in addition to improving flat prices, now, that allowed our customers to realize an improvement in differential that they were -- or basis differential that they were experiencing probably in the $0.10 to $0.15 range.

So, a meaningful difference for our producer customers. On other takeaway projects, maybe I'd have Randy Nickerson, our Chief Commercial Officer give you some perspective on some of the other projects and where we see it. But, we believe help is on the way for our producer customers and there're a lot of projects that are in the hopper to do that..

Sure Don just, Don just repeating what you talked about. You're right the producers have been helped in the Rich-Gas area significantly by the increase in crude price has helped out. Even the increase in the percentage of crude that the NGLs are trading at the Gulf Coasts, that's been helping the producers.

As Don did a great job of explaining the netbacks that we're receiving out of our facilities have been significantly improved. So, producers have seen a lot of relief. What do we have left? Obviously one of the key items we still have left is gas takeaway capacity.

Certainly REX coming on their Zone 3 expansion at the end of this year is going to help a lot. But it really is going to be opened up dramatically when Rover, NEXUS, when the Columbia gas pipelines come on, that will really open up the space. So, we're half way there. We've seen lots of improvement.

We really get down to find way through '17 and in the early '18 when it really opens up. Fortunately for us, processing, we used to talk a lot about process capacity, not a problem, we used to talk a lot about gathering infrastructure, not a problem.

We're keeping up just fine with fractionation, so the basin now is in fine shape from the lot of the infrastructure finance standpoint waiting really just for gas takeaway to fully unload in late '17, '18..

Perfect. Thanks guys. Nancy, congrats on the new job and Pam, excited to work with you again..

And our next question comes from Eric Genco from Citi. Please go ahead..

I just wanted to I guess maybe get your thoughts on DAPL and where that stands now? I know on the last, on the MPC call you talked a lot about potential drop down, potential drop of more traditional pipeline assets.

If DAPL were to go through and does go through, is that something you are be thinking about dropping in the next year? Just your thoughts there?.

We have actually been out in public saying that DAPL will be a direct acquisition of MPLX versus MPC. We had an opportunity we believe to participate in that pipeline which we think is a very exciting opportunity.

And we would expect to be closing one or two -- be closing on that in either the first the late fourth quarter or early first quarter of 2017..

Okay. Then there were some reports I guess since the publication yesterday, Enterprise, some of them Enterprise saying that they thought they were getting down to the one yard line on Centennial.

I was just wondering if you could give us an update on there and where that stands from your perspective?.

I think as I mentioned maybe previously we have been committed and are totally committed to coming up with creative ways and opportunities to provide for transportation move NGLs and gas out of the basin. Certainly the Centennial pipeline is one of those opportunities.

We have been working very diligently with our partner in that which is Enterprise and we are optimistic that a good solution will be forth coming for another takeaway opportunity out of that basin that utilized the Centennial pipeline..

Nothing in terms of timing yet?.

Nothing. No..

And our next question comes from Shneur Gershuni from UBS. Please go ahead..

Just a couple of quick questions here. And just as a quick follow-up actually to your response to the previous question, so DAPL is not part of what you call your drop-down bucket at this stage right now? It is a straight acquisition? I just wanted to confirm that part of the numbers..

That is correct..

Okay, cool. As far as my questions go, I was wondering if you can sort of expand on comments that you made on the MPC call with respect to unlocking the value in the GP.

How should we be thinking about it from an MPLX perspective? Does it end up as a standalone company potentially with no relationship to MPC? I was just wondering if you can sort of expand on those comments a little bit..

I think that I believe it’s very important for MPC and this was at the time MPLX was the IPO, I think it's very important that MPC has an ability to control the assets that were legacy MPC assets in that support the refining complex and the logistic complex and the retail complex.

So having an ability to have a GP that allows for that control I think is a very important aspect.

I think the comments that were being made about unlocking the value here is that at the MPLX level we believe that there are opportunities for us to lower our cost of capital and so obviously we are in a situation where we are in the higher splits in terms of IDRs and so one of the thing that’s being evaluated is whether there is an opportunity to do something like an IDR buy in that would give some clarity to the value of the investment that MPC has in MPLX, while also allowing us to lower the cost of capital inside MPLX..

So if I can paraphrase what you said, so effectively you would like to be able to have MPC still maintain somewhat control of the assets itself.

So if I think about it, you are basically looking at a scenario where you can potentially convert the IDRs into MPLX units at some price while still maintaining control of the 2% GP interest so that you can still sort of cohesively control the assets between MPC and MPLX.

Is that the right way to be thinking about it?.

Yes, I think that's a right way to think about it. And Tim, when he was on the call he mentioned other options that are being explored as well. So, I think we -- the reason we're evaluating this in a comprehensive way is to make sure that we make a decision that makes a lot of sense for MPC and a decision that makes a lot of sense for MPLX.

Going back to the comment that Gary had, with the goal ultimately long term of driving down our yield, enhancing the currency that we have, so that we can participate not only in organic growth opportunities and fund them appropriately, but to participate in what we believe will continue to be a situation where there are M&A opportunities or consolidation opportunities..

That makes perfect sense to me. As a follow-up strategic question, when we sort of look at the hydrocarbon market at a 10,000 foot level specifically in the Northeast, we see wide basis differentials in the Northeast, challenges moving NGLs. And it sort of foreshadows some challenges for some producers.

But given your CapEx outlook clearly you are linked to some of the producers that are not as challenged.

I was wondering if you can sort of discuss what your customers are actually saying to you about their expectations with the discussions that they have had with you about where they see volumes over the next two to three years? And outside of your response on the Centennial question earlier, are there any other steps that you are evaluating to improve the logistics aspect of moving the NGLs? Are you looking potentially at partnering on Mariner East given that you have established a relationship with the energy transfer family with the recent DAPL potential acquisition I guess?.

Well, let me talk about sort of Mariner East first and then I'll have Randy to make some observations around what our producer customers are saying to us. I mean we're in regular communication with them, regular dialogue. We meet with them weekly and so, I think we've some good insight, and we can share those perspectives.

We're big fans of Mariner East too, we need that project to be successful because we want there to be opportunities to be able to take NGLs out of the basins and get them to markets where our producer customers can realize a better netback.

And we also are very focused, have been in the past and we'll continue to be in the future, very focused on being efficient with our capital. So, if being efficient with your capital means taking advantage of joint venture opportunities, we will look for those types of opportunities.

So, we've done that in the past, MarkWest was very successful using joint ventures in the past. And I would guess that using joint ventures and teaming up with other business partners to deploy capital efficiently will be part of the formula going forward. Now maybe over to Randy on some observations about our producer customers..

I think our producer customers see the same thing that Don just described. NGLs have been improved a lot. When Mariner East comes online, we're no longer -- NGLs are not stranded in the Northeast when that happens, you add Centennial on top of that, and things just get even better.

We haven't talked here about Cornerstone, Cornerstone's been extended into Siloam and opens up entirely from the MarkWest and MPLX perspective opens up entirely new markets for gasoline for normal butane. So the NGL side of the equation is rapidly getting much, much better and very shortly will be solved.

It has a real key for producers again add to that flat price going up, percentage of the NGLs crude going up, NGLs just look better all the time. So I think in the public statements you’ve seeing producers that’s reflecting that. They are much more active these days, a number of announced increased rigs in the area and increased takeaway.

So we are seeing folks feeling really good about -- our producer customers feeling really good about where we are the infrastructure sure it will be much better in '18, but between now and then things have improved dramatically, even over what they were six months ago.

It’s night and day from what we are seeing out there in reality from just a short period ago..

And our next question comes from Jeremy Tonet from JP Morgan. Please go ahead..

Hi good morning it’s actually Andy for Jeremy. First question on organic growth CapEx it seems to be holding up at pretty robust levels for 2017.

Where are some those incremental growth projects coming from? Are these new Appalachian projects, is it just finishing up existing projects or is it elsewhere?.

There is about a quarter of that of our proposed capital project and our capital budget that’s going to be in the LNS side of the business and that is getting our Robinson butane cavern closer to completion, we’re expecting that to happen in 2018.

Its working on incremental capital around the Utica build out and we are expecting that will be complete sort of in the middle of 2017 and then we have an opportunities to build some storage in Texas and we will be deploying capital to that project in 2017.

On the GNP side of the business I would say a large part of the capital that we are going to be deploying will be in the Marcellus and that will be really to support the growth in Rich-Gas, natural gas processing and the fractionation.

So the projects that we mentioned 400 million cubic feet per day of gas processing and 120,000 barrels per day of fractionation. Those will be very big components of our capital.

And the capital I know has a pretty wide range right now, I mean that will be really dependent on what our producer customer are coming back to us, but we see a lot of optimism there and we see a lot of opportunities to be able to meet their needs on just-in-time basis..

The final question is we appreciate the longer term distribution growth guidance that was given. The question is, how firm will that commitment be if capital markets are not supportive, kind of similar to the strategy shift that happened a year ago..

Andy I am very confident that we will meet 12% to 15% distribution growth in '17 and double digit in '18..

Okay thank you..

And maybe one question -- in our deck in the appendix there are some listing of some of the capital projects, so that you could get a better look at kind of when we expect those to get completed in the nature of them..

And our next question comes from Brian Zarahn from Mizuho. Please go ahead..

Gary, given your outlook for drop downs and organic CapEx in 2017, you'll likely need to finance in the ballpark of $4 billion.

Assuming the strategic review isn't done before the first drop, how do you think about potential IDR adjustments and multiples versus prior transactions?.

Well, we of course have the flexibility and the options to look at all those different things as we play through this.

We said in the first quarter that 235 million or so would be done, but again we have options to look at taking back some equity, some options in the debt market, and we'll see how our analysis -- as I said earlier on the call, the MPC call, we've been doing quite a bit of work already around one of the best ways we think to be able to get some value -- increase the value out of the general partner.

And Tim is with me here, so let Tim expand on this..

Sure. Brian, again as we mentioned earlier we're going to sort of evaluate all the options. We've got the level of flexibility that really affords us a get window to the extent that the market can absorb fairly good sized transactions, we'll utilize that, but we can certainly take back units as we need to.

We think that the partnerships capacity on the debt side is robust and sufficient that it can raise all that money.

So, I don't know that the -- we'll certainly monitor market conditions and sort of see where things are at, but lots of options at our disposal and -- but again, lots of options and frankly lots of flexibility, so that we don't need to sort of cram too much in the market at any one point in time and it can be very opportunistic about how we access the market..

And then maybe shifting to the higher level of the strategic review and everything as you said is on the table.

But as of today, how do you think about balancing the dualing interest of MPC shareholders wanting to realize their GP value while the MPLX unitholders would want to lower the GP burden? So I guess maybe in other words, how willing are MPC shareholders to potentially swap their GP ownership for LP ownership?.

Well that's one of the things Brian that we're certainly in the midst of studying..

Any initial thoughts from folks on that option?.

I think it's too early to give you any indication or a hint, one way or another..

And our next question comes from Michael Blum from Wells Fargo. Please go ahead..

I just had a question I wanted to clarify in terms of the timing of drop-downs. So 2017 is very clear that is $350 million of EBITDA for that year.

And then the $1 billion of additional drop downs beyond that, will that -- is the goal to accomplish that by the end of 2019 or by the end of 2020?.

Well what we've said it'll be within the next three years, which will be 2019. And it doesn't -- we don't want to infer by that comment that's going to be ratable. It's going to be frontend loaded or backend loaded. As we've said as soon as practicable of course we have the issues around the private letter ruling for the fuels distribution.

And the other key point is getting the assets ready, getting them in the proper systems, all the assets that or the majority of the assets that we have always been a counter for as call center within MPC.

And we have to get those transformed into individual businesses, getting all those completed as well take some time in order to be able to be able to accomplish that..

Okay.

But assuming you can clear all those hurdles within that timeframe, we are talking about $1.35 billion EBITDA assets by the end of 2019?.

That’s correct..

And our next question comes from John Edwards from Credit Suisse. Please go ahead..

Just if I could follow up on Michael’s question, so just to be clear.

From your comment you are saying the $1 billion that include '17 you are talking around $330 and $350, ’17, ’18, ’19 or you are talking $1 billion in addition to the $350, so that would be?.

John we have roughly $1.4 billion that’s available, $350 we would -- we have committed to dropping in '17 and the remainder by the end of 2019..

Okay [multiple speakers].

So roughly you are talking roughly $500 million in each of '18 and '19 then?.

[Multiple speakers]..

Just to be clear on the math. So my other question was just on the DAPL transaction, are there any contingencies related to that transaction? So that for whatever reason final permits aren’t received on that, that you don’t close or is everybody kind of in the same -- everyone's assuming the same risk regarding the final permit.

I guess it still has yet to be received for that 1,200 foot section. I guess it's still sitting with the Secretary of Army.

Is that a correct understanding or is it something different?.

John we have publicly indicated that there are closing conditions that are required to be met before we can close and we’ve not yet closed..

So the closing conditions are still confidential at this point, correct?.

That is correct..

And our next question comes from Selman Akyol from Stifel. Please go ahead..

Two quick ones for me.

First of all on your CapEx guidance for next year, the $1.2 billion to $1.6 billion, is there anything in there at all for the reversal of Centennial?.

No, there is not..

Also when you talked about your distribution guidance, you talked about 12% to 15% for next year.

Can you just talk about parameters which might lead you to the lower end versus the higher end?.

I guess we are guided by a number of things, but one of the things that we have tried to target is to maintain or target a coverage ratio 1.1 times.

We are not bound by that, but we are not happy or not satisfied with the current yield, we believe that supporting as strong distribution growth rate will help improve our yield and so we are committed to taking the actions that we need to, to do that, and we believe that signaling a 12% to 15% distribution growth was an important part of doing that.

We've a lot of levers to pull but there're -- it would guide partly by distribution or coverage..

And our next question comes from Jerren Holder from Goldman Sachs. Please go ahead..

Looking at the Southwest operations, obviously there is a lot of excitement about the Delaware Basin and the stack play right now. It looks like your processing capacity is above 80% on utilization and the CapEx there is gathering CapEx allocated.

But given the outlooks that we have out there, would it be fair to assume that we would need to start construction of maybe more capacity down in that region? How do you guys think about that as it kind of looks out into 2017, 2018?.

Well, we're super excited about Delaware Basin and those opportunities and maybe let me give it over to Randy who has been having a lot of conversations with producer customers around that..

Yes, you hit the nail on the head. Delaware is exciting, we're talking about Hidalgo for sure, stack is exciting. And we think their longer term absolutely opportunities to expand at both of those facilities and it would be fair to say we're having active discussions with the producers behind those systems.

So, great place to be in addition to the Northeast, it's great to be back exciting -- expanding down in the Southwest, and so we're definitely talking about them. And the opportunities will rise sometime in the future we think..

And I guess separately we've definitely seen some transaction multiples in those regions transact fairly high.

And so from the funding perspective would do you guys consider maybe the Southwest assets to a degree you can get attractive multiple there and reinvest that into other parts of the business, dropdowns et cetera?.

We've seen some of those multiples as well, but our view is there're some really long term good growth opportunities there and we want to be positioned there, not leading there. We have great relationships with producer customers, we're meeting with some of them earlier this week.

And one of the things that they said to us is that we like being associated with MarkWest and MPLX because they have a long term view and so do we and we want to partner with people that have a long term view..

And our next question comes from Timm Schneider from Evercore ISI. Please go ahead..

Just a couple of questions.

As far as the macro landscape in the Northeast, do you guys have a good sense as to how much of the see-through plus right now moves in rail, barge or trucks out of the region?.

I think we'll have to get back to you on that, we have a good sense by product, but putting numbers out now, I'm afraid we'd mislead you off the top of our head. So let us get back with you on that for sure..

Sure.

The other question is as you guys look at some of these takeaway projects, do you think that Centennial and ME 2 can kind of coexist or do you think that those projects will cannibalize volumes from each other?.

No, we believe they'd both -- they can coexist and we think it would provide an exciting opportunity for both -- the both of those projects, exciting opportunity for takeaway capacity for producer customers and give them lots of incremental sort of encouraging or enticement to continue to deploy capital on the basin..

Got it.

Can you remind us do you guys have capacity on ME 2? And if so, how much?.

We certainly we have capacity on ME 1. I don’t know if we talked about publicly what capacity we have on ME 2, so at this point we are better off not commenting on what capacity have on ME 2.

The more exciting part is just the capacity it provides for the entire base and both for us, the NGLs we marketing and for our producer customers who market theirs. It’s just a great opportunity.

The Marcellus will be in a great position if both those projects are done, Centennial and Mariner East we’ll be able to have access to East Coast and to the Gulf Coast. So it just gives the basin an enormous opportunity and advantage over even another part of the country..

Sure.

Last one for me is on ME 2 specifically, is there any interest on your end to potentially do something with Sunoco Logistics there is far as any joint venture -- potential joint of those? Has that been on the radar screen at all??.

No I think we have commented before maybe on this call that, our view is that there are a lot -- we want to be really efficient with the deployment of capital and if joint venture opportunities allow you to be more efficient with the deployment of capital then we will definitely pursue those opportunities.

We have done well in the past I mean I think some of the great joint ventures that have allowed MarkWest to grow in the way that they have and certainly MPC and MPLX have a great track record of joint venture as well.

So without specifically mentioning or commenting about an individual partner, we think joint ventures make sense and it allows you to deploy capital efficiently and that’s our goal..

And our next question comes from Helen Ryoo from Barclays. Please go ahead..

Just a follow-up on the drop-down strategy. I guess it going to 2019, it seems like most of what you have today will have come down.

Would MPLX be more of an organic story at that point or perhaps be synergistic projects like the Appellation [ph], the other downstream projects may be invested at the MPC level at that point, so you would still have some sizable drop-down inventory? I just want to make sure I understand what the growth driver looks like beyond 2019 whether it is more organic spending at MPLX level driving that or still having substantial sizable drop-down inventory?.

Why don’t I have Pam answer that..

Yes. Helen when we go out that far and when MPC has dropped down is current inventory, MPLX is going to be very substantial in terms of size and scale and capacity to take on larger projects. So it may take on larger projects directly that maybe a onetime MPC might have incubated and then dropped.

Certainly the growth story we believe is a very strong story and we will continue well into the future, it really was the thesis behind bringing together a terrific dropdown story and the organic growth machine that MarkWest has been historically and we expect will be in the future. And then I would add to that mix Helen, M&A.

So as Gary mentioned earlier, we do expect that consolidation in the industry to continue.

And we believe that we will be very well positioned when you look at the mix of the earnings in cash flow of MPLX once these drops are made we are going to be roughly 50% logistics and storage very stable cash flows, long haul pipeline and storage assets, but not necessarily a lot of growth there.

And then high growth in Gathering and Processing business. So, we think that the profile will be very attractive to investors and we think that we should attract -- we'll have an attractive cost of capital that we'll be able to go participate in other M&A as well..

And our next question comes from Eric Genco from Citi. Please go ahead..

I just had a quick follow-up.

In thinking about some of the guidance and as I look at some of the volume guidance that is out there, what are you assuming in terms of timing for something like Rover and seeing gathering volumes going from 20% growth in ’16 to flat in ’17? If Rover were brought in on-time versus say coming on in 2018, is there an upside to our -- to some of these guidance numbers or is there -- where is there downside and how should we be thinking about that?.

So, I think what we try to be when we gave this guidance, is we try to I'll say cautious and conservative in providing our growth guidance around Gathering. So, I would say this is probably on the low side not on the high side in terms of what we think about.

And we did that just because as you know there's some uncertainty around the timing of completing projects, we're very confident that these projects will get completed. We understand the importance of those projects but for purposes of guiding and you all building your models, we thought it made sense for us to be conservative..

Okay. So Randy mentioned I mean REX Zone 3.

Can I ask what you are assuming in terms of timing for Rover within this guidance?.

As Don said we did talk about REX opens up some capacity this year, we're also -- no we don't talk a lot about it, but some of the pipelines coming out of our largest complex sure would going down South still have we believe capacity. So even without that we still have capacity from a processing standpoint to support the growth.

But certainly all the public information around Rover and some of the potential delays in that has sort of build into the guidance. We wouldn't want to specifically talk about what the exact date we think it'll come on, that's not our job.

But we certainly as Don said have been conservative in a way we've build out our projections for '17 and '18 for sure..

So it is fair to say then that if you did get some positive news on Rover, some of those things would -- it is disproportionately more upside risk than downside risk and a lot of that may be in sort of the gathered volume in terms of some of the dry gas that is out there? Is that a fair way to look at it?.

Always nicer to have more upside then downside in a plan for sure..

And with that I will turn the call back to Lisa..

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; Teresa Homan, Doug Wendt and I will be available to take your call. Thank you..

Thank you ladies and gentlemen. This concludes today’s conference. Thank you for participating and you may now disconnect..