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Section 1: 8-K (8-K)

Document


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 _____________________________________________
FORM 8-K
 _____________________________________________
 
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 26, 2018
 _____________________________________________
MPLX LP
(Exact name of registrant as specified in its charter)
 _____________________________________________
 
 
 
 
 
Delaware
 
001-35714
 
27-0005456
(State or Other Jurisdiction
of Incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification Number)
200 E. Hardin Street
Findlay, Ohio
 
45840
(Address of Principal Executive Offices)
 
(Zip Code)
Registrant’s telephone number, including area code:
(419) 421-2414
(Former name or former address, if changed since last report)
 _____________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
 






Item 2.02
Results of Operations and Financial Condition.
On July 26, 2018, MPLX LP ("MPLX") issued a press release announcing second-quarter 2018 earnings. The press release is being furnished as Exhibit 99.1 to this Current Report and is incorporated herein by reference.
 
Item 9.01
Financial Statements and Exhibits.
 
(d)
Exhibits.

Exhibit
Number
  
Description
  
Press Release dated July 26, 2018, issued by MPLX LP
 
 
 






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
MPLX LP
 
 
 
 
 
 
 
By:
 
MPLX GP LLC, its General Partner
 
 
 
 
 
 
 
 
Date: July 26, 2018
By:
 
/s/ Pamela K. M. Beall
 
 
 
Name: Pamela K. M. Beall
 
 
 
Title: Executive Vice President and Chief Financial Officer



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit



394368831_mplx2017erimagea08.jpg
MPLX LP reports record second-quarter 2018 financial results

Reported second-quarter net income of $453 million and adjusted EBITDA of $867 million, which provided 1.36x distribution coverage and resulted in 3.7x leverage
Gathering & Processing segment income from operations of $174 million and adjusted EBITDA of $341 million driven by record gathered, processed, and fractionated volumes
Logistics & Storage segment income from operations of $434 million and adjusted EBITDA of $526 million driven by dropdowns and strong results from the underlying base business
Commenced operations of Majorsville 7 in the Marcellus and Omega in the STACK
Acquired an equity interest in the Agua Blanca natural gas pipeline in Texas
Announced a new 200 million cubic feet per day plant in the Delaware Basin, called Torñado

FINDLAY, Ohio, July 26, 2018 - MPLX LP (NYSE: MPLX) today reported record second-quarter 2018 net income attributable to MPLX of $453 million compared with $190 million in the second quarter of 2017. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $867 million compared with $474 million in the second quarter of 2017. The year-over-year EBITDA increases in the Logistics and Storage (L&S) and Gathering and Processing (G&P) segments were driven by dropdowns in the L&S segment and strong base business performance in both segments. Logistics and Storage (L&S) reported segment adjusted EBITDA of $526 million for the quarter, up $342 million versus second quarter of last year. Gathering and Processing (G&P) reported segment adjusted EBITDA of $341 million for the quarter, up $51 million on a year-over-year basis.

During the quarter, the company generated $840 million in net cash provided by operating activities and distributable cash flow of $695 million, which provided 1.36x coverage and resulted in 3.7x leverage. Consistent with its self-funding strategy, the partnership did not issue public equity during the second quarter. MPLX also announced its 22nd consecutive distribution increase to $0.6275 per common unit and affirmed its 2018 distribution growth guidance of 10 percent.

“This was another impressive quarter for our midstream business,” said Gary R. Heminger, chairman and chief executive officer. “Our team continued to grow the business both by increasing utilization of existing assets as well as executing a robust organic growth plan. The opportunity set remains extensive in the regions where we operate and we are encouraged by industry volume forecasts and the growth prospects in both the Northeast and the Permian basins.”

Heminger further commented, “As we assess our opportunities, we maintain our commitment to a self-funding base business model with an emphasis toward higher coverage and lower leverage, as we believe this approach will help us to create long-term sustainable shareholder value.”



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Financial Highlights
 
 
Three Months Ended 
 June 30
 
 
Six Months Ended 
 June 30
(In millions, except per unit and ratio data)
 
2018
 
 
2017
 
 
2018
 
 
2017
Net income attributable to MPLX
$
453

 
$
190

 
$
874

 
$
340

Adjusted EBITDA attributable to MPLX(a)
 
867

 
 
474

 
 
1,627

 
 
897

Net cash provided by operating activities
 
840

 
 
467

 
 
1,290

 
 
844

Distributable cash flow ("DCF")(a)
 
695

 
 
387

 
 
1,314

 
 
741

Distribution per common unit(b)
 
0.6275

 
 
0.5625

 
 
1.2450

 
 
1.1025

Distribution coverage ratio(c)
 
1.36x

 
 
1.26x

 
 
1.33x

 
 
1.27x

Growth capital expenditures(d)
 
431

 
 
370

 
 
901

 
 
728

 
 
 
 
 
 
 
 
 
 
 
 
(a)
Non-GAAP measure calculated before the distribution to preferred units. See reconciliation below.
(b)
Distributions declared by the board of directors of MPLX’s general partner.
(c)
Non-GAAP measure. See calculation below.
(d)
Excludes non-affiliated joint-venture (JV) members' share of capital expenditures. See capital expenditures table below.

Logistics & Storage

L&S segment income from operations and adjusted EBITDA for the second quarter of 2018 increased compared with the same period in 2017. The increase was primarily due to dropdowns from our sponsor of the refining logistics assets and the reliable fuels distribution service business as well as the continued solid performance of the segment including record pipeline throughput.

Total pipeline throughputs were 3.39 million barrels per day in the second quarter, an increase of 10 percent versus the same quarter last year. The average tariff rate was $0.64 per barrel for the quarter. Terminal throughput was 1.49 million barrels per day for the quarter which is consistent with the prior year. During the quarter, MPLX expanded its marine fleet by 12 barges, which is a 5 percent increase in the overall fleet size.

MPLX continued to execute its organic growth plan for the L&S segment. The partnership completed its major expansion work on the Ozark and Wood River-to-Patoka pipeline systems. The available capacity of these systems is now 345 thousand barrels per day (mbpd). Additional work is expected to be completed in the third quarter, which will allow capacity to increase to 360 mbpd. Both projects create additional fee-based revenue for MPLX while providing logistics solutions to MPC and other market participants.

Gathering & Processing

G&P segment income from operations and segment adjusted EBITDA increased for the second quarter of 2018 compared with the same period in 2017. The increase was primarily due to increased gathered, processed and fractionated volumes.
Gathered volumes: 4.3 billion cubic feet per day in the second quarter of 2018, a 29 percent increase versus the second quarter of 2017


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Processed volumes: 6.9 billion cubic feet per day in the second quarter of 2018, a 9 percent increase versus the second quarter of 2017
Fractionated volumes: 439,000 barrels per day in the second quarter of 2018, a 13 percent increase versus the second quarter of 2017

Regionally, the Marcellus/Utica continued its solid growth trajectory. Gathered volumes averaged 2.8 billion cubic feet per day (bcf/d) for the quarter, a 46 percent increase versus the second quarter of 2017, driven primarily by higher Utica dry-gas volumes. Processed volumes averaged 5.2 bcf/d, a 10 percent increase versus the second quarter of 2017 as volumes at the recently completed Sherwood 9 and Houston 1 plants ramped during the quarter. Fractionated volumes averaged 407,000 barrels per day, a 16 percent increase versus the second quarter of 2017. The increase was primarily the result of higher utilization at the Hopedale Complex.

To support additional growth in the Northeast, MPLX commenced operations of the 200-million-cubic-feet-per-day (mmcf/d) Majorsville 7 gas processing plant in July. MPLX also expects to add 600 million cubic feet per day of incremental processing capacity and 100,000 barrels per day of additional fractionation capacity in the Marcellus by the end of 2018.

In the Southwest, gathered volumes were 1.5 bcf/d for the second quarter, a 6 percent increase versus the second quarter of 2017. Processed volumes averaged 1.4 bcf/d for the quarter, an 8 percent increase versus the second quarter of 2017, as volumes continued to ramp at the recently completed Argo plant in the Delaware Basin. Also, in the STACK shale play in Oklahoma, MPLX commenced operations of the 75 mmcf/d Omega gas processing plant in early July.

The partnership continues to expand its footprint in the Southwest. MPLX executed an agreement to acquire an equity interest in the Agua Blanca gas pipeline running from Orla, Texas, to Waha, Texas. Additionally, in the Delaware Basin, the partnership plans to build a new 200 mmcf/d gas processing plant called Torñado in Loving County, Texas.

 
 
 
 
 
 
 
 
 
 
 
 
(In millions)
 
Three Months Ended 
 June 30
 
 
Six Months Ended 
 June 30
Segment adjusted EBITDA attributable to MPLX LP (unaudited)
 
2018
 
 
2017
 
 
2018
 
 
2017
Logistics and Storage(a)
$
526

 
$
184

 
$
963

 
$
326

Gathering and Processing(a)
$
341

 
$
290

 
$
664

 
$
571

 
 
 
 
 
 
 
 
 
 
 
 
(a)
Non-GAAP measure. See reconciliation below for details.



3





Financial Position and Liquidity

As of June 30, MPLX had $3 million in cash, approximately $2.2 billion available through its bank revolving credit facility expiring in July 2022, and $888 million available through its credit facility with MPC.

The partnership’s $3.1 billion of available liquidity at the end of the second quarter, its distribution coverage, and its access to the capital markets should provide it with sufficient flexibility to meet its day-to-day operational needs and continue investing in organic growth opportunities. The partnership’s leverage ratio was 3.7x times at June 30, 2018. MPLX remains committed to maintaining an investment-grade credit profile and self-funding strategy for its organic growth capital needs.

Conference Call

At 11 a.m. EDT today, MPLX will hold a conference call and webcast to discuss the reported results and provide an update on operations. Interested parties may listen to the conference call by dialing 1-888-606-5719 (confirmation number 6033306) or by visiting MPLX’s website at
http://www.mplx.com and clicking on the “2018 Second-Quarter Financial Results” link in the “News & Headlines” section. Replays of the conference call will be available on MPLX’s website through Thursday, August 9. Investor-related material will also be available online prior to the conference call and webcast at http://ir.mplx.com.
###
About MPLX LP

MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; the transportation, storage and distribution of crude oil and refined petroleum products; and the refining logistics and fuels distributions services through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX’s assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 80,000 barrels per day of crude oil and product throughput capacity; tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.7 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.

Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Doug Wendt (419) 421-2423

Media Contacts:
Chuck Rice (419) 421-2521



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Non-GAAP references
In addition to our financial information presented in accordance with U.S. generally accepted accounting principles (GAAP), management utilizes additional non-GAAP measures to facilitate comparisons of past performance and future periods. This press release and supporting schedules include the non-GAAP measures adjusted EBITDA (including segment adjusted EBITDA), distributable cash flow (DCF) and distribution coverage ratio. The amount of adjusted EBITDA and DCF generated is considered by the board of directors of our general partner in approving the Partnership’s cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) provision for income taxes; (iii) amortization of deferred financing costs; (iv) non-cash equity-based compensation; (v) net interest and other financial costs; (vi) income from equity method investments; (vii) distributions and adjustments related to equity method investments; (viii) unrealized derivative gains and losses; (ix) acquisition costs; (x) noncontrolling interest and (xi) other adjustments as deemed necessary. In general, we define DCF as adjusted EBITDA adjusted for (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items.

The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record the realized gain or loss of the contract.

Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures.

DCF is a financial performance measure used by management as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders.

Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between the partnership's financial operating performance and cash distribution capability. We define the distribution coverage ratio as the ratio of DCF attributable to GP and LP unitholders to total GP and LP distribution declared.
 
Forward-looking statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (“MPLX”) and Marathon Petroleum Corporation (“MPC"). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPLX and MPC, including strategic initiatives and our value creation plans. You can identify forward-looking statements by words such as “anticipate,” “believe,” “design,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “imply,” “intend,” “objective,” “opportunity,” “outlook,” “plan,” “position,” “pursue,” “prospective,” “predict,” “project,” “potential,” “seek,” “strategy,” “target,” “could,” “may,” “should,” “would,” “will” or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the companies’ control and are difficult to predict. Factors that could cause MPLX’s actual results to differ materially from those implied in the forward-looking statements include: negative capital market conditions, including an increase of the current yield on common units, adversely affecting MPLX’s ability to meet its distribution growth guidance; our


5





ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein and other proposed transactions; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of MPLX’s capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt on commercially reasonable terms, and the ability to successfully execute its business plans, growth strategy and self-funding model; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of MPC’s obligations under MPLX’s commercial agreements; modifications to earnings and distribution growth objectives; our ability to manage disruptions in credit markets or changes to our credit rating; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; changes to MPLX's capital budget; other risk factors inherent to MPLX’s industry; and the factors set forth under the heading “Risk Factors” in MPLX’s Annual Report on Form 10-K for the year ended Dec. 31, 2017, filed with the Securities and Exchange Commission (“SEC”). Factors that could cause MPC’s actual results to differ materially from those implied in the forward-looking statements include: risks associated with the proposed transaction between MPC and Andeavor, including, but not limited to, its ability to complete the proposed transaction on anticipated terms and timetable, the ability to obtain stockholder and regulatory approval, the ability to satisfy various other conditions to the closing of the proposed transaction, the risk that the cost savings and any other synergies from the proposed transaction may not be fully realized or may take longer to realize than expected, disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers, and risks relating to any unforeseen liabilities of Andeavor; its ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein; the ability to manage disruptions in credit markets or changes to its credit rating; adverse changes in laws including with respect to tax and regulatory matters; changes to the expected construction costs and timing of projects; continued/further volatility in and/or degradation of market and industry conditions; the availability and pricing of crude oil and other feedstocks; slower growth in domestic and Canadian crude supply; the effects of the lifting of the U.S. crude oil export ban; completion of pipeline capacity to areas outside the U.S. Midwest; consumer demand for refined products; transportation logistics; the reliability of processing units and other equipment; MPC’s ability to successfully implement growth opportunities; the impact of adverse market conditions affecting MPC’s midstream business; modifications to MPLX earnings and distribution growth objectives, and other risks described above with respect to MPLX; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or enforcement actions initiated thereunder; adverse results in litigation; changes to MPC’s capital budget; other risk factors inherent to MPC’s industry; and the factors set forth under the heading “Risk Factors” in MPC’s Annual Report on Form 10-K for the year ended Dec. 31, 2017, and in the Form S-4 filed by MPC, filed with the SEC. In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here, in MPLX’s Form 10-K or in MPC’s Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPLX’s Form 10-K are available on the SEC website, MPLX’s website at http://ir.mplx.com or by contacting MPLX’s Investor Relations office. Copies of MPC’s Form 10-K are available on the SEC website, MPC’s website at http://ir.marathonpetroleum.com or by contacting MPC’s Investor Relations office.




6



Condensed Results of Operations (unaudited)
 
Three Months Ended 
 June 30
 
 
Six Months Ended 
 June 30
(In millions, except per unit data)
 
2018
 
 
2017
 
 
2018
 
 
2017
Revenues and other income:
 
 
 
 
 
 
 
 
 
 
 
Operating revenue
$
751

 
$
547

 
$
1,463

 
$
1,079

Operating revenue - related parties
 
752

 
 
342

 
 
1,372

 
 
666

Income from equity method investments
 
50

 
 
1

 
 
111

 
 
6

Other income
 
25

 
 
26

 
 
52

 
 
51

Total revenues and other income
 
1,578

 
 
916

 
 
2,998

 
 
1,802

Costs and expenses:
 
 
 
 
 
 
 
 
 
 
 
Operating expenses
 
470

 
 
292

 
 
892

 
 
548

Operating expenses - related parties
 
223

 
 
110

 
 
401

 
 
217

Depreciation and amortization
 
188

 
 
164

 
 
364

 
 
351

General and administrative expenses
 
72

 
 
57

 
 
141

 
 
115

Other taxes
 
17

 
 
13

 
 
35

 
 
26

Total costs and expenses
 
970

 
 
636

 
 
1,833

 
 
1,257

Income from operations
 
608

 
 
280

 
 
1,165

 
 
545

Interest and other financial costs
 
151

 
 
87

 
 
281

 
 
165

Income before income taxes
 
457

 
 
193

 
 
884

 
 
380

Provision for income taxes
 
1

 
 
2

 
 
5

 
 
2

Net income
 
456

 
 
191

 
 
879

 
 
378

Less: Net income attributable to noncontrolling interests
 
3

 
 
1

 
 
5

 
 
2

Less: Net income attributable to Predecessor(a)
 

 
 

 
 

 
 
36

Net income attributable to MPLX LP
 
453

 
 
190

 
 
874

 
 
340

Less: Preferred unit distributions
 
20

 
 
17

 
 
36

 
 
33

Less: General partner’s interest in net income attributable to MPLX LP
 

 
 
74

 
 

 
 
136

Limited partners’ interest in net income attributable to MPLX LP
$
433

 
$
99

 
$
838

 
$
171

 
 
 
 
 
 
 
 
 
 
 
 
Per Unit Data
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to MPLX LP per limited partner unit:
 
 
 
 
 
 
 
 
 
 
 
Common - basic
$
0.55

 
$
0.26

 
$
1.15

 
$
0.46

Common - diluted
$
0.55

 
$
0.26

 
$
1.15

 
$
0.46

Weighted average limited partner units outstanding:
 
 
 
 
 
 
 
 
 
 
 
Common units – basic
 
794

 
 
377

 
 
728

 
 
370

Common units – diluted
 
794

 
 
382

 
 
728

 
 
374

 
 
 
 
 
 
 
 
 
 
 
 
(a) The pipeline, storage and terminals businesses acquired on March 1, 2017 ("Predecessor").



7





Select Financial Statistics (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended 
 June 30
 
 
Six Months Ended 
 June 30
(In millions, except ratio data)
 
2018
 
 
2017
 
 
2018
 
 
2017
Distribution declared:
 
 
 
 
 
 
 
 
 
 
 
Common units (LP) - public
$
181

 
$
162

 
$
360

 
$
311

Common units - MPC(a)
 
316

 
 
56

 
 
604

 
 
105

GP units - MPC
 

 
 
6

 
 

 
 
11

Incentive distribution rights - MPC
 

 
 
70

 
 

 
 
130

Total GP and LP distribution declared
 
497

 
 
294

 
 
964

 
 
557

Redeemable preferred units(b)
 
20

 
 
17

 
 
36

 
 
33

Total distribution declared
$
517

 
$
311

 
$
1,000

 
$
590

 
 
 
 
 
 
 
 
 
 
 
 
Distribution coverage ratio(c)
 
1.36x

 
 
1.26x

 
 
1.33x

 
 
1.27x

 
 
 
 
 
 
 
 
 
 
 
 
Cash Flow Data
 
 
 
 
 
 
 
 
 
 
 
Net cash flow provided by (used in):
 
 
 
 
 
 
 
 
 
 
 
Operating activities
$
840

 
$
467

 
$
1,290

 
$
844

Investing activities
 
(464
)
 
 
(450
)
 
 
(954
)
 
 
(1,405
)
Financing activities
$
(373
)
 
$
12

 
$
(336
)
 
$
619

 
 
 
 
 
 
 
 
 
 
 
 
Other Financial Data
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA attributable to MPLX LP(d)
$
867

 
$
474

 
$
1,627

 
$
897

DCF attributable to GP and LP unitholders(d)
$
675

 
$
370

 
$
1,278

 
$
708

 
 
 
 
 
 
 
 
 
 
 
 
(a)
MPC agreed to waive $23.7 million in common unit distributions associated with the units received in connection with the Feb. 1 dropdown.
(b)
The preferred units are considered redeemable securities due to the existence of redemption provisions upon a deemed liquidation event, which is outside of our control. These units rank senior to all common units with respect to distributions and rights upon liquidation and effective May 13, 2018, on an as-converted basis, preferred unit holders receive the greater of $0.528125 per unit or the amount of per unit distributions paid to holders of MPLX LP common units.
(c)
DCF attributable to GP and LP unitholders divided by total GP and LP distribution declared.
(d)
Non-GAAP measure. See reconciliation below.




8





Select Balance Sheet Data (unaudited)
 
 
 
 
 
(In millions, except ratio data)
 
June 30 2018
 
 
Dec. 31 2017
Cash and cash equivalents
$
3

 
$
5

Total assets
 
21,412

 
 
19,500

Total debt(a)
 
11,987

 
 
7,332

Redeemable preferred units
 
1,003

 
 
1,000

Total equity
$
6,952

 
$
9,973

Consolidated total debt to adjusted EBITDA(b)
 
3.7x

 
 
3.6x

 
 
 
 
 
 
Partnership units outstanding:
 
 
 
 
 
GP units
 

 
 
8

MPC-held common units
 
505

 
 
118

Public common units
 
289

 
 
289

 
 
 
 
 
 
(a)
Total debt includes $112 million and $386 million of outstanding intercompany borrowings classified in current liabilities as of June 30, 2018, and Dec. 31, 2017, respectively.
(b)
Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. Face value total debt includes approximately $482 million and $416 million of unamortized discount and debt issuance costs as of June 30, 2018, and Dec. 31, 2017, respectively.


Logistics and Storage Operating Statistics (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended 
 June 30
 
 
Six Months Ended 
 June 30
 
 
2018
 
 
2017
 
% Change
 
 
2018
 
 
2017
 
% Change
Pipeline throughput (mbpd)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Crude oil pipelines
 
2,229

 
 
2,027

 
10
 %
 
 
2,119

 
 
1,827

 
16
 %
Product pipelines
 
1,164

 
 
1,067

 
9
 %
 
 
1,110

 
 
1,010

 
10
 %
Total pipelines
 
3,393

 
 
3,094

 
10
 %
 
 
3,229

 
 
2,837

 
14
 %
Average tariff rates ($ per barrel)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Crude oil pipelines
$
0.58

 
$
0.58

 
 %
 
$
0.57

 
$
0.58

 
(2
)%
Product pipelines
 
0.76

 
 
0.70

 
9
 %
 
 
0.76

 
 
0.73

 
4
 %
Total pipelines
$
0.64

 
$
0.62

 
3
 %
 
$
0.64

 
$
0.63

 
2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Terminal throughput (mbpd)
 
1,485


 
1,489

 
 %
 
 
1,465

 
 
1,456

 
1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Barges at period-end
 
256

 
 
232

 
10
 %
 
 
256

 
 
232

 
10
 %
Towboats at period-end
 
20

 
 
18

 
11
 %
 
 
20

 
 
18

 
11
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 






Gathering and Processing Operating Statistics (unaudited) - Consolidated(a)
 
Three Months Ended 
 June 30
 
 
Six Months Ended 
 June 30
 
 
2018
 
 
2017
 
% Change
 
 
2018
 
 
2017
 
% Change
Gathering throughput (mmcf/d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Marcellus Operations
 
1,147

 
 
964

 
19
 %
 
 
1,135

 
 
944

 
20
 %
Utica Operations
 

 
 

 
 %
 
 

 
 

 
 %
Southwest Operations
 
1,492

 
 
1,409

 
6
 %
 
 
1,484

 
 
1,377

 
8
 %
Total gathering throughput
 
2,639

 
 
2,373

 
11
 %
 
 
2,619

 
 
2,321

 
13
 %
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
Natural gas processed (mmcf/d)
 
 
 
 
 
 


 
 
 
 
 
 
 
 
Marcellus Operations
 
3,716

 
 
3,594

 
3
 %
 
 
3,656

 
 
3,538

 
3
 %
Utica Operations
 

 
 

 
 %
 
 

 
 

 
 %
Southwest Operations
 
1,434

 
 
1,333

 
8
 %
 
 
1,380

 
 
1,300

 
6
 %
Southern Appalachian Operations
 
254

 
 
269

 
(6
)%
 
 
253

 
 
267

 
(5
)%
Total natural gas processed
 
5,404

 
 
5,196

 
4
 %
 
 
5,289

 
 
5,105

 
4
 %
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
C2 + NGLs fractionated (mbpd)
 
 
 
 
 
 


 
 
 
 
 
 
 
 
Marcellus Operations
 
362

 
 
313

 
16
 %
 
 
357

 
 
302

 
18
 %
Utica Operations
 

 
 

 
 %
 
 

 
 

 
 %
Southwest Operations
 
19

 
 
21

 
(10
)%
 
 
17

 
 
20

 
(15
)%
Southern Appalachian Operations
 
13

 
 
15

 
(13
)%
 
 
13

 
 
15

 
(13
)%
Total C2 + NGLs fractionated
 
394

 
 
349

 
13
 %
 
 
387

 
 
337

 
15
 %
(a)
Includes operating data for entities that have been consolidated into the Partnership financial statements.



9





Gathering and Processing Operating Statistics (unaudited) - Operated(a)
 
Three Months Ended 
 June 30
 
 
Six Months Ended 
 June 30
 
 
2018
 
 
2017
 
% Change
 
 
2018
 
 
2017
 
% Change
Gathering throughput (mmcf/d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Marcellus Operations
 
1,147

 
 
964

 
19
 %
 
 
1,135

 
 
944

 
20
 %
Utica Operations
 
1,654

 
 
951

 
74
 %
 
 
1,612

 
 
933

 
73
 %
Southwest Operations
 
1,494

 
 
1,411

 
6
 %
 
 
1,486

 
 
1,378

 
8
 %
Total gathering throughput
 
4,295

 
 
3,326

 
29
 %
 
 
4,233

 
 
3,255

 
30
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Natural gas processed (mmcf/d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Marcellus Operations
 
4,286

 
 
3,811

 
12
 %
 
 
4,201

 
 
3,672

 
14
 %
Utica Operations
 
876

 
 
879

 
 %
 
 
906

 
 
973

 
(7
)%
Southwest Operations
 
1,434

 
 
1,333

 
8
 %
 
 
1,380

 
 
1,300

 
6
 %
Southern Appalachian Operations
 
254

 
 
269

 
(6
)%
 
 
253

 
 
267

 
(5
)%
Total natural gas processed
 
6,850

 
 
6,292

 
9
 %
 
 
6,740

 
 
6,212

 
8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
C2 + NGLs fractionated (mbpd)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Marcellus Operations
 
362

 
 
313

 
16
 %
 
 
357

 
 
302

 
18
 %
Utica Operations
 
45

 
 
38

 
18
 %
 
 
45

 
 
40

 
13
 %
Southwest Operations
 
19

 
 
21

 
(10
)%
 
 
17

 
 
20

 
(15
)%
Southern Appalachian Operations
 
13

 
 
15

 
(13
)%
 
 
13

 
 
15

 
(13
)%
Total C2 + NGLs fractionated
 
439

 
 
387

 
13
 %
 
 
432

 
 
377

 
15
 %
(a)
Includes operating data for entities that have been consolidated into the Partnership financial statements as well as operating data for Partnership-operated equity method investments.



10





Reconciliation of Segment Adjusted EBITDA to Net Income (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended 
 June 30
 
 
Six Months Ended 
 June 30
(In millions)
 
2018
 
 
2017
 
 
2018
 
 
2017
L&S segment adjusted EBITDA attributable to MPLX LP
$
526

 
$
184

 
$
963

 
$
326

G&P segment adjusted EBITDA attributable to MPLX LP
 
341

 
 
290

 
 
664

 
 
571

Adjusted EBITDA attributable to MPLX LP
 
867

 
 
474

 
 
1,627

 
 
897

Depreciation and amortization
 
(188
)
 
 
(164
)
 
 
(364
)
 
 
(351
)
Provision for income taxes
 
(1
)
 
 
(2
)
 
 
(5
)
 
 
(2
)
Amortization of deferred financing costs
 
(15
)
 
 
(13
)
 
 
(31
)
 
 
(25
)
Non-cash equity-based compensation
 
(5
)
 
 
(3
)
 
 
(9
)
 
 
(6
)
Net interest and other financial costs
 
(136
)
 
 
(74
)
 
 
(250
)
 
 
(140
)
Income from equity method investments
 
50

 
 
1

 
 
111

 
 
6

Distributions/adjustments related to equity method investments
 
(112
)
 
 
(33
)
 
 
(202
)
 
 
(66
)
Unrealized derivative (losses) gains(a)
 
(8
)
 
 
3

 
 
(1
)
 
 
19

Acquisition costs
 

 
 

 
 
(3
)
 
 
(4
)
Adjusted EBITDA attributable to noncontrolling interests
 
4

 
 
2

 
 
6

 
 
3

Adjusted EBITDA attributable to Predecessor(b)
 

 
 

 
 

 
 
47

Net income
$
456

 
$
191

 
$
879

 
$
378

 
 
 
 
 
 
 
 
 
 
 
 
(a)
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded.
(b)
The adjusted EBITDA adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP prior to the acquisition date.


11





Reconciliation of Adjusted EBITDA Attributable to MPLX LP and DCF Attributable to GP and LP Unitholders from Net Income (Loss) (unaudited)
 
 
 
 
 
 
 
Three Months Ended 
 June 30
 
 
Six Months Ended 
 June 30
(In millions)
 
2018
 
 
2017
 
 
2018
 
 
2017
Net income
$
456

 
$
191

 
$
879

 
$
378

Provision for income taxes
 
1

 
 
2

 
 
5

 
 
2

Amortization of deferred financing costs
 
15

 
 
13

 
 
31

 
 
25

Net interest and other financial costs
 
136

 
 
74

 
 
250

 
 
140

Income from operations
 
608

 
 
280

 
 
1,165

 
 
545

Depreciation and amortization
 
188

 
 
164

 
 
364

 
 
351

Non-cash equity-based compensation
 
5

 
 
3

 
 
9

 
 
6

Income from equity method investments
 
(50
)
 
 
(1
)
 
 
(111
)
 
 
(6
)
Distributions/adjustments related to equity method investments
 
112

 
 
33

 
 
202

 
 
66

Unrealized derivative losses (gains)(a)
 
8

 
 
(3
)
 
 
1

 
 
(19
)
Acquisition costs
 

 
 

 
 
3

 
 
4

Adjusted EBITDA
 
871

 
 
476

 
 
1,633

 
 
947

Adjusted EBITDA attributable to noncontrolling interests
 
(4
)
 
 
(2
)
 
 
(6
)
 
 
(3
)
Adjusted EBITDA attributable to Predecessor(b)
 

 
 

 
 

 
 
(47
)
Adjusted EBITDA attributable to MPLX LP
 
867

 
 
474

 
 
1,627

 
 
897

Deferred revenue impacts
 
2

 
 
9

 
 
11

 
 
17

Net interest and other financial costs
 
(136
)
 
 
(74
)
 
 
(250
)
 
 
(140
)
Maintenance capital expenditures
 
(33
)
 
 
(23
)
 
 
(58
)
 
 
(35
)
Equity method investment capital expenditures paid out
 
(5
)
 
 

 
 
(16
)
 
 
(2
)
Other
 

 
 
1

 
 

 
 
2

Portion of DCF adjustments attributable to Predecessor(b)
 

 
 

 
 

 
 
2

DCF attributable to MPLX LP
 
695

 
 
387

 
 
1,314

 
 
741

Preferred unit distributions
 
(20
)
 
 
(17
)
 
 
(36
)
 
 
(33
)
DCF attributable to GP and LP unitholders
$
675

 
$
370

 
$
1,278

 
$
708

 
 
 
 
 
 
 
 
 
 
 
 
(a)
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded.
(b)
The adjusted EBITDA and DCF adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF prior to the acquisition date.



12





Reconciliation of Adjusted EBITDA Attributable to MPLX LP and DCF Attributable to GP and LP Unitholders from Net Cash Provided by Operating Activities (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended 
 June 30
 
 
Six Months Ended 
 June 30
(In millions)
 
2018
 
 
2017
 
 
2018
 
 
2017
Net cash provided by operating activities
$
840

 
$
467

 
$
1,290

 
$
844

Changes in working capital items
 
(145
)
 
 
(58
)
 
 
33

 
 
(14
)
All other, net
 
17

 
 
(8
)
 
 
14

 
 
(17
)
Non-cash equity-based compensation
 
5

 
 
3

 
 
9

 
 
6

Net gain on disposal of assets
 

 
 
2

 
 

 
 
1

Net interest and other financial costs
 
136

 
 
74

 
 
250

 
 
140

Current income taxes
 

 
 
1

 
 

 
 
1

Asset retirement expenditures
 
4

 
 

 
 
5

 
 
1

Unrealized derivative losses (gains)(a)
 
8

 
 
(3
)
 
 
1

 
 
(19
)
Acquisition costs
 

 
 

 
 
3

 
 
4

Other adjustments to equity method investment distributions
 
5

 
 

 
 
27

 
 

Other
 
1

 
 
(2
)
 
 
1

 
 

Adjusted EBITDA
 
871

 
 
476

 
 
1,633

 
 
947

Adjusted EBITDA attributable to noncontrolling interests
 
(4
)
 
 
(2
)
 
 
(6
)
 
 
(3
)
Adjusted EBITDA attributable to Predecessor(b)
 

 
 

 
 

 
 
(47
)
Adjusted EBITDA attributable to MPLX LP
 
867

 
 
474

 
 
1,627

 
 
897

Deferred revenue impacts
 
2

 
 
9

 
 
11

 
 
17

Net interest and other financial costs
 
(136
)
 
 
(74
)
 
 
(250
)
 
 
(140
)
Maintenance capital expenditures
 
(33
)
 
 
(23
)
 
 
(58
)
 
 
(35
)
Equity method investment capital expenditures paid out
 
(5
)
 
 

 
 
(16
)
 
 
(2
)
Other
 

 
 
1

 
 

 
 
2

Portion of DCF adjustments attributable to Predecessor(b)
 

 
 

 
 

 
 
2

DCF attributable to MPLX LP
 
695

 
 
387

 
 
1,314

 
 
741

Preferred unit distributions
 
(20
)
 
 
(17
)
 
 
(36
)
 
 
(33
)
DCF attributable to GP and LP unitholders
$
675

 
$
370

 
$
1,278

 
$
708

 
 
 
 
 
 
 
 
 
 
 
 
(a)
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded.
(b)
The adjusted EBITDA and DCF adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF prior to the acquisition date.



13





Capital Expenditures (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended 
 June 30
 
 
Six Months Ended 
 June 30
(In millions)
 
2018
 
 
2017
 
 
2018
 
 
2017
Capital Expenditures(a):
 
 
 
 
 
 
 
 
 
 
 
Maintenance
$
33

 
$
23

 
$
58

 
$
35

Growth
 
499

 
 
380

 
 
924

 
 
651

Total capital expenditures
 
532

 
 
403

 
 
982

 
 
686

Less: Increase in capital accruals
 
121

 
 
31

 
 
115

 
 
33

Asset retirement expenditures
 
4

 
 

 
 
5

 
 
1

Additions to property, plant and equipment
 
407

 
 
372

 
 
862

 
 
652

Capital expenditures of unconsolidated subsidiaries(b)
 
113

 
 
81

 
 
167

 
 
205

Total gross capital expenditures
 
520

 
 
453

 
 
1,029

 
 
857

Less: Joint venture partner contributions
 
56

 
 
59

 
 
70

 
 
93

Total capital expenditures, net
 
464

 
 
394

 
 
959

 
 
764

Less: Maintenance capital
 
33

 
 
24

 
 
58

 
 
36

Total growth capital expenditures
$
431

 
$
370

 
$
901

 
$
728

 
 
 
 
 
 
 
 
 
 
 
 
(a)
Includes capital expenditures of the Predecessor for all periods presented.
(b)
Capital expenditures includes amounts related to unconsolidated, partnership operated subsidiaries.



14

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