MPLX LP (NYSE:MPLX) Q1 2016 Earnings Conference Call - Preliminary Transcript
Apr 28, 2016 • 11:00 am ET
Welcome to the MPLX First Quarter 2016 Earnings Webcast and Conference Call. My name is John, and I'll be your operator for today's call. And I'll now turn the call over to Lisa Wilson, Director of Investor Relations.
Thank you, John. Good morning and welcome to the MPLX first 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; Frank Semple, Vice Chairman; Don Templin, President; Nancy Buese, 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'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.
Thanks, Lisa, and good morning. If you please turn to Slide 3, we delivered solid financial results in this first full quarter as a combined company, and are executing on the plans we've laid out for 2016. Adjusted EBITDA was $302 million and distributable cash flow was $236 million.
Last week, we announced an increase in our quarterly distribution to $0.505 per common unit, while maintaining a strong coverage ratio of 1.18 times. We also reaffirmed our distribution growth guidance of 12% to 15% for the full-year 2016, and expect a double-digit distribution growth rate in 2017.
Yesterday, we announced a binding agreement for $1 billion private placement of convertible preferred securities with a select group of investors. While this transaction was originally contemplated with MPC, we elected to take advantage of strong investor interest in equity securities with attractive terms for the partnership.
The combination of some opportunistic ATM issuances in the first quarter along with this transaction provides for anticipated funding needs for the remainder of 2016 and into 2017, therefore enabling us to continue our execution of attractive organic growth projects that will contribute to distributable cash flow and long-term value for our unitholders. We are committed to pursuing a strategy that balances capital investments to meet the needs of our customers with the sustainable growth of the partnership.
In response to market conditions, we previously announced a substantial reduction to our 2016 capital investment plan, and we remain focused on managing both capital and expenses across the business. Another example of how we're executing our 2016 plans is the acquisition of MPC's inland marine business, which took place in the first quarter.
MPC clearly demonstrated its commitment to the success of the partnership, as we acquired the marine business at a supportive valuation in exchange for MPLX equity, eliminating the need to access the public market to fund the transaction. In addition, MPC provided another measure of