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MPLX LP Reports Third-Quarter 2019 Financial Results

FINDLAY, Ohio, Oct. 31, 2019 /PRNewswire/ --

  • Reported third quarter net income attributable to MPLX of $629 million; adjusted EBITDA attributable to MPLX of $1.2 billion, or $1.3 billion including full-quarter results of acquired business

  • Reported net cash provided by operating activities of $1.0 billion and 1.42x distribution coverage, which includes full-quarter results of acquired business

  • Targeting 2020 growth capital of approximately $2.0 billion

  • Completed acquisition of Andeavor Logistics on July 30

  • MPC announces formation of Midstream Special Committee

MPLX LP (MPLX) today reported third quarter 2019 net income attributable to MPLX of $629 million compared with $510 million for the third quarter of 2018. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $1.2 billion compared with $937 million in the third quarter of 2018.

On July 30, MPLX closed its acquisition of Andeavor Logistics (ANDX). Third quarter adjusted EBITDA attributable to MPLX, including full-quarter results of ANDX, would have been $1.3 billion. Logistics and Storage (L&S) reported segment income from operations of $713 million and adjusted EBITDA of $849 million for the quarter, up $245 million and $302 million, respectively, versus the third quarter of last year. Gathering and Processing (G&P) reported segment income from operations of $213 million and adjusted EBITDA of $424 million for the quarter, up $9 million and $34 million, respectively, on a year-over-year basis.

"During the quarter, we progressed our slate of high-return projects, advancing MPLX's strategy of creating integrated crude oil and natural gas logistics from the Permian to Gulf Coast markets," said Gary R. Heminger, chairman and chief executive officer. "Additionally, we moved forward with high-grading our growth capex portfolio and today announced a growth capital target of approximately $2.0 billion for 2020."

During the quarter, MPLX generated $1.0 billion in net cash provided by operating activities and distributable cash flow, including a full-quarter of results from ANDX, of $1.0 billion, which provided adjusted distribution coverage of 1.42x. MPLX also announced its 27th consecutive distribution increase to $0.6775 per common unit, a $0.01 increase over the prior quarter and a 6.3 percent increase over the prior year third quarter.

 

Financial Highlights




Three Months Ended

 Sept. 30



Nine Months Ended

 Sept. 30

(In millions, except per unit and ratio data)


2019



2018



2019



2018

Net income attributable to MPLX


$

629




$

510




$

1,614




$

1,384


Adjusted net income attributable to MPLX(a)


681




N/A




2,015




N/A


Adjusted EBITDA attributable to MPLX LP (excluding
predecessor results)(b)


1,165




937




3,015




2,564


Adjusted EBITDA attributable to MPLX LP (including
predecessor results)(c)


1,273




N/A




3,785




N/A


Net cash provided by operating activities


1,036




737




2,990




2,027


Distributable cash flow attributable to MPLX LP(c)


1,027




766




3,055




2,080


Distribution per common unit(d)


$

0.6775




$

0.6375




$

2.0025




$

1.8825


Distribution coverage ratio(e)


1.42x




1.47x




1.54x




1.38x


Consolidated debt to adjusted EBITDA(f)


4.0x




3.8x




N/A




N/A


















(a)  

Includes net income attributable to predecessor for the three and nine months ended September 30, 2019.

(b)  

Non-GAAP measure calculated before distributions to preferred unitholders. See reconciliation below. Excludes
adjusted EBITDA attributable to predecessor.

(c) 

Non-GAAP measure calculated before distributions to preferred unitholders. See reconciliation below. Includes
adjusted EBITDA and DCF adjustments attributable to predecessor.

(d) 

Distributions declared by the board of directors of MPLX's general partner.

(e) 

DCF attributable to GP and LP unitholders (including DCF attributable to predecessor) divided by total GP and LP
distribution declared.

(f)   

Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. See
reconciliation below.

 

 

Segment Results (including predecessor)














(In millions)


Three Months Ended

 Sept. 30



Nine Months Ended

 Sept. 30

Segment income from operations (unaudited)


2019



2018



2019



2018

Logistics and Storage

$

713


$

468


$

2,075


$

1,287

Gathering and Processing


213



204



648



550













Segment adjusted EBITDA attributable to MPLX LP
(unaudited)












Logistics and Storage


849



547



2,498



1,510

Gathering and Processing

$

424


$

390


$

1,287


$

1,054













 

The operations acquired through the ANDX acquisition have been assigned to MPLX's existing segments based on the nature of the assets and the services provided.

  • The L&S segment now includes: a network of crude oil and refined product pipelines; crude oil and water gathering systems; an inland marine business; terminals; rail facilities; storage caverns; refining logistics assets; and wholesale and fuels distribution services across the U.S.

  • The G&P segment now includes: systems and assets which gather, process, and fractionate natural gas and NGLs in key U.S. supply basins.

Logistics & Storage

L&S segment income from operations and adjusted EBITDA for the third quarter of 2019 increased by $245 million and $302 million, respectively, compared with the same period in 2018. The increase was primarily due to the acquisition of ANDX and the continued solid performance of the underlying base business.

Total pipeline throughputs were 5.2 million barrels per day in the third quarter. The average tariff rate was $0.90 per barrel for the quarter. Terminal throughput was 3.3 million barrels per day for the quarter.

Gathering & Processing

G&P segment income from operations and segment adjusted EBITDA for the third quarter of 2019 increased by $9 million and $34 million, respectively, compared with the same period in 2018. Year-over-year results increased due to the ANDX acquisition and higher volumes partially offset by a significant decline in weighted average NGL prices. In the third quarter of 2019:

  • Gathered volumes: 6.3 billion cubic feet per day

  • Processed volumes: 8.8 billion cubic feet per day

  • Fractionated volumes: 547 thousand barrels per day

In the Marcellus and Utica, the company continued to experience significant year-over-year growth. Gathered volumes averaged 3.7 billion cubic feet per day (bcf/d) for the quarter, a 16 percent increase versus the third quarter of 2018. Processed volumes averaged 6.2 bcf/d, a 13 percent increase versus the same quarter last year, driven by high utilization across the company's Marcellus operations. Fractionated volumes averaged 482 thousand barrels per day, a 6 percent increase versus the third quarter of 2018. The increase was primarily driven by higher volumes at the expanded Hopedale Complex.

In the Southwest, gathered volumes averaged 1.7 bcf/d for the third quarter, a 3 percent increase versus the third quarter of 2018. Processed volumes averaged 1.7 bcf/d for the quarter, a 13 percent increase versus the third quarter of 2018. The increase was primarily the result of higher volumes in the Permian.

In the Bakken, gathered volumes averaged 149 mmcf/d for the third quarter. Processed volumes averaged 149 mmcf/d for the quarter.

In the Rockies, gathered volumes averaged 827 mmcf/d for the third quarter. Processed volumes averaged 568 mmcf/d for the quarter.

Strategic Update

MPC announced that it is forming a special committee of its Board of Directors, led by J. Mike Stice, to continue to evaluate alternatives to enhance value across its midstream business.

MPLX announced that it has completed its plan to high-grade its capital expenditures, focusing on the most attractive returns. For 2020, MPLX is targeting growth capex of approximately $2.0 billion.

In the L&S segment, MPLX continues to advance its strategy of creating integrated crude oil and natural gas logistics systems from the Permian to the U.S. Gulf Coast. The Wink-to-Webster crude oil pipeline, in which MPLX has an equity interest, remains on schedule to be competed in the first half of 2021. The 36-inch diameter pipeline will originate in the Permian Basin and have destination points in the Houston market, including Marathon Petroleum Corporation's (MPC) Galveston Bay refinery.

Also in the Permian, the Whistler Pipeline is being designed to transport approximately 2 billion cubic feet per day of natural gas from Waha, Texas to the Agua Dulce market in South Texas, ultimately reaching MPC's Galveston Bay refinery. MPLX has an equity interest in Whistler, which is expected to be placed in service in the second half of 2021.

To support additional growth in the G&P segment, MPLX placed into service the Sherwood 12 and Torñado processing plants in October, adding 400 million cubic feet per day of capacity. The company expects to complete the Sherwood 13 processing plant late in the fourth quarter of 2019, adding another 200 million cubic feet per day of incremental capacity. Also, MPLX has two additional plants under various stages of development in the Permian.

Financial Position and Liquidity

As of September 30, 2019, MPLX had $41 million in cash, $3.5 billion available through its bank revolving credit facility expiring in July 2024, $1.4 billion available through its intercompany loan agreement with MPC, and $500 million of capacity available through its new bank term loan facility. The company's leverage ratio was 4.0x at September 30, 2019.

As a result of the completion of the ANDX acquisition, MPLX assumed an aggregate principal amount of $3.75 billion senior notes issued by ANDX. On September 23, 2019, approximately $3.06 billion aggregate principal amount of ANDX's outstanding senior notes were exchanged for new unsecured notes issued by MPLX having the same maturity and interest rates as the previously outstanding ANDX notes and cash as part of an exchange offer and consent solicitation undertaken by MPLX and ANDX.

During the quarter, MPLX also issued $2.0 billion aggregate principal amount of unsecured senior notes in an underwritten public offering consisting of $1.0 billion aggregate principal amount of floating rate senior notes due 2021 and $1.0 billion aggregate principal amount of floating rate senior notes due 2022. In addition, on September 26, 2019, MPLX entered into a term loan agreement with a syndicate of lenders providing for a committed term loan facility for up to an aggregate of $1.0 billion. MPLX borrowed $500 million under the term loan agreement during the quarter.

MPLX used a portion of the net proceeds from the notes offering and borrowings under the term loan agreement to repay the previously outstanding ANDX 5.500% senior notes due 2019 in the aggregate principal amount of $500 million at maturity on October 15, 2019 and to repay borrowings under its revolving credit facility and its intercompany loan agreement with MPC. The remainder of the proceeds from the notes offering and term loan borrowings have or will be used for general partnership purposes. MPLX remains committed to maintaining an investment-grade credit profile and a strategy of self-funding the equity portion of 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 by visiting MPLX's website at http://www.mplx.com and clicking on the "2019 Third-Quarter Financial Results" link in the "News & Headlines" section. A replay of the webcast will be available on MPLX's website for two weeks. Financial information, including earnings release and other 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, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com

Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Jim Mallamaci, Manager, Investor Relations
Evan Barbosa, Manager, Investor Relations

Media Contacts:
Hamish Banks, Vice President, Communications (419) 421-2521
Jamal Khiery, Manager, Communications (419) 421-3312

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 and consolidated debt to last twelve months pro forma adjusted EBITDA, which we refer to as our leverage ratio, 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 distributions declared.

Leverage ratio is a liquidity measure used by management, industry analysts, investors, lenders and rating agencies to analyze our ability to incur and service debt and fund capital expenditures.

Forward-Looking statements

This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX). These forward-looking statements relate to, among other things, MPLX's acquisition of Andeavor Logistics LP and include expectations, estimates and projections concerning the business and operations, financial priorities and strategic plans of MPLX. These statements are accompanied by cautionary language identifying important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements. You can identify forward-looking statements by words such as "anticipate," "believe," "commitment," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "project," "proposition," "prospective," "pursue," "seek," "should," "strategy," "target," "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 company's 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 but are not limited to: Marathon Petroleum Corporation's (MPC) ability to achieve the strategic and other objectives related to the strategic initiatives and review discussed herein; the risk that anticipated opportunities and any other synergies from or anticipated benefits of the Andeavor Logistics acquisition may not be fully realized or may take longer to realize than expected, including whether the transaction will be accretive within the expected timeframe or at all; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDX; the amount and timing of future distributions; negative capital market conditions, including an increase of the current yield on common units; the ability to achieve strategic and financial objectives, including with respect to distribution coverage, future distribution levels, proposed projects and completed transactions; the success of MPC's portfolio optimization, including the ability to complete any divestitures on commercially reasonable terms and/or within the expected timeframe, and the effects of any such divestitures on the business, financial condition, results of operations and cash flows; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of 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 business plans, growth strategies and self-funding models; 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 and planned investments, and the ability to obtain regulatory and other approvals with respect thereto; 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 financial policies, capital budgets, and earnings and distributions; the ability to manage disruptions in credit markets or changes to credit ratings; 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; other risk factors inherent to MPLX's industry; risks related to MPC; 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, 2018, and in Forms 10-Q, filed with 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: with respect to the planned Speedway separation, the ability to successfully complete the separation within the expected timeframe or at all, based on numerous factors including the macroeconomic environment, credit markets and equity markets, and the ability to satisfy customary conditions and achieve the strategic and other objectives related thereto; with respect to the Midstream review, the ability to achieve the strategic and other objectives related to the strategic review discussed herein; the risk that the cost savings and any other synergies from the Andeavor transaction may not be fully realized or may take longer to realize than expected; disruption from the Andeavor transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of Andeavor; risks related to the acquisition of Andeavor Logistics LP by MPLX, including the risk that anticipated opportunities and any other synergies from or anticipated benefits of the transaction may not be fully realized or may take longer to realize than expected, including whether the transaction will be accretive within the expected timeframe or at all, or disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; the ability to complete any divestitures on commercially reasonable terms and/or within the expected timeframe, and the effects of any such divestitures on the business, financial condition, results of operations and cash flows; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income and earnings per share; the regional, national and worldwide availability and pricing of refined products, crude oil, natural gas, NGLs and other feedstocks; consumer demand for refined products; the ability to manage disruptions in credit markets or changes to credit ratings; future levels of capital, environmental and maintenance expenditures; general and administrative and other expenses; the success or timing of completion of ongoing or anticipated capital or maintenance projects; the reliability of processing units and other equipment; business strategies, growth opportunities and expected investment; share repurchase authorizations, including the timing and amounts of such repurchases; the adequacy of capital resources and liquidity, including availability, timing and amounts of free cash flow necessary to execute business plans and to effect any share repurchases or dividend increases; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on the business, financial condition, results of operations and cash flows; continued or further volatility in and/or degradation of general economic, market, industry or business conditions; 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; the anticipated effects of actions of third parties such as competitors, activist investors or federal, foreign, state or local regulatory authorities or plaintiffs in litigation; the impact of adverse market conditions or other similar risks to those identified herein affecting MPLX; 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, 2018, and in Forms 10-Q, filed with the SEC.

We have based our forward-looking statements on our current expectations, estimates and projections about our business and industry. We caution that these statements are not guarantees of future performance and you should not rely unduly on them, as they involve risks, uncertainties, and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. While our management considers these assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Accordingly, our actual results may differ materially from the future performance that we have expressed or forecast in our forward-looking statements. We undertake no obligation to update any forward-looking statements except to the extent required by applicable law. Copies of MPLX's Form 10-K and Forms 10-Q 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 and Forms 10-Q are available on the SEC website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.

 

Condensed Results of Operations (unaudited)














Three Months Ended

 Sept. 30



Nine Months Ended

 Sept. 30

(In millions, except per unit data)


2019



2018



2019



2018

Revenues and other income:












Operating revenue

$

928



$

843



$

2,818



$

2,306


Operating revenue - related parties


1,224




776




3,562




2,148


Income (loss) from equity method investments


95




64




255




175


Other income


33




29




90




81


Total revenues and other income


2,280




1,712




6,725




4,710


Costs and expenses:












Operating expenses


573




514




1,691




1,406


Operating expenses - related parties


348




229




1,018




630


Depreciation and amortization


302




201




916




565


General and administrative expenses


102




76




293




217


Other taxes


29




20




84




55


Total costs and expenses


1,354




1,040




4,002




2,873


Income from operations


926




672




2,723




1,837


Interest and other financial costs


233




153




686




434


Income before income taxes


693




519




2,037




1,403


(Benefit) provision for income taxes


4




3




2




8


Net income


689




516




2,035




1,395


Less: Net income (loss) attributable to noncontrolling
interests


8




6




20




11


Less: Net income attributable to Predecessor


52







401





Net income attributable to MPLX LP


629




510




1,614




1,384


Less: Series A preferred unit distributions


20




19




61




55


Less: Series B preferred unit distributions


7







7





Limited partners' interest in net income attributable to
MPLX LP

$

602



$

491



$

1,546



$

1,329














Per Unit Data












Net income attributable to MPLX LP per limited partner
unit:












Common - basic

$

0.61



$

0.62



$

1.78



$

1.77


Common - diluted

$

0.61



$

0.62



$

1.78



$

1.77


Weighted average limited partner units outstanding:












Common units – basic


974




794




855




750


Common units – diluted


975




794




855




750














 

 













Select Financial Statistics (unaudited)


Three Months Ended

 Sept. 30



Nine Months Ended

 Sept. 30

(In millions, except ratio data)


2019



2018



2019



2018

Common unit distributions declared by MPLX












Common units (LP) - public(a)

$

266


$

185


$

718


$

545

Common units - MPC(a)(b)


438



322



1,201



926

Total GP and LP distribution declared


704



507



1,919



1,471













Preferred unit distributions(c)












Series A preferred unit distributions(d)


20



19



61



55

Series B preferred unit distributions(e)


10





31



Total preferred unit distributions


30



19



92



55













Other Financial Data












Adjusted EBITDA attributable to MPLX LP (excluding
predecessor results)(f)(g)


1,165



937



3,015



2,564

Adjusted EBITDA attributable to MPLX LP (including
predecessor results)(f)(h)


1,273



N/A



3,785



N/A

DCF attributable to GP and LP unitholders(f)(h)

$

997


$

747


$

2,963


$

2,025

Distribution coverage ratio(i)


1.42x



1.47x



1.54x



1.38x













Cash Flow Data












Net cash flow provided by (used in):












Operating activities

$

1,036


$

737


$

2,990


$

2,027

Investing activities


(750)



(1,073)



(2,189)



(2,027)

Financing activities

$

(276)


$

366


$

(845)


$

30















(a)  

The distribution on common units for both the three and nine months ended September 30, 2019 includes the impact
of the issuance of approximately 102 million units issued to public unitholders and approximately 161 million units issued
to MPC in connection with MPLX's acquisition of ANDX on July 30, 2019.

(b)  

Distributions to MPC exclude $12.5 million in distributions waived by MPC in connection with MPLX's acquisition of ANDX with
ANDX for the three months ended September 30, 2019 and $25 million for the nine months ended September 30, 2019. The
waiver was instituted in 2017 under the terms of ANDX's historical partnership agreement and will remain in effect through 2019,
the original term of the waiver agreement. In addition, MPC agreed to waive $23.7 million in common unit distributions associated
with the units received in connection with the Feb. 1, 2018 dropdown.

(c)  

Includes MPLX distributions declared on the Series A and Series B preferred units as well as distributions earned on the Series
B preferred units for the three months ended September 30, 2019 assuming a distribution is declared by the Board of Directors
(distributions on Series B preferred units are declared and payable semi-annually on February 15th and August 15th or the first
business day thereafter). Cash distributions declared/to be paid to holders of the Series A and Series B preferred units are not
available to common unitholders.

(d)  

Series A preferred units are considered redeemable securities due to the existence of redemption provisions upon a deemed
liquidation event which is outside 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.

(e)  

As a result of the ANDX acquisition, 600,000 ANDX preferred units were converted into 600,000 preferred units of MPLX (the
"Series B preferred units"). Series B preferred unitholders are entitled to receive a fixed distribution of $68.75 per unit, per annum,
payable semi-annually in arrears on February 15 and August 15 or the first business day thereafter.

(f)   

Non-GAAP measure. See reconciliation below.

(g)  

Excludes predecessor EBITDA that is attributable to the period prior to the acquisition date of July 30, 2019.

(h)  

Includes predecessor EBITDA and DCF that is attributable to the period prior to the acquisition date of July 30, 2019.

(i)  

DCF attributable to GP and LP unitholders (including DCF attributable to predecessor) divided by total GP and LP distribution declared.

 

 

Select Balance Sheet Data (unaudited)






(In millions, except ratio data)


Sept. 30,
2019



December 31,
2018(a)

Cash and cash equivalents

$

41



$

77


Total assets


41,281




39,325


Total long-term debt(b)


19,825




18,435


Redeemable preferred units


968




1,004


Total equity

$

17,892



$

17,731


Consolidated total debt to adjusted EBITDA(c)


4.0x




3.8x








Partnership units outstanding:






MPC-held common units


666




505


Public common units


392




289










(a) 

Financial information has been retrospectively adjusted for the acquisition of ANDX.

(b)  

Outstanding intercompany borrowings were $125 million as of September 30, 2019
and zero December 31, 2018. Includes current portion of long-term debt.

(c)  

Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro
forma for acquisitions. Face value total debt includes approximately $420 million and $431
million of unamortized discount and debt issuance costs as of September 30, 2019 and December 
31, 2018, respectively.

 

 

Operating Statistics (unaudited)(a)

















Three Months Ended

 Sept. 30



Nine Months Ended

 Sept. 30



2019



2018


%
Change



2019



2018


%
Change

Logistics and Storage
















Pipeline throughput (mbpd)
















Crude oil pipelines


3,367




2,208



52

%



3,240




2,149



51

%

Product pipelines


1,859




1,182



57

%



1,875




1,135



65

%

Total pipelines


5,226




3,390



54

%



5,115




3,284



56

%

Average tariff rates ($ per barrel)
















Crude oil pipelines

$

0.97



$

0.60



62

%


$

0.94



$

0.58



62

%

Product pipelines


0.77




0.86



(10)

%



0.73




0.80



(9)

%

Total pipelines

$

0.90



$

0.69



30

%



0.86




0.66



30

%

















Terminal throughput (mbpd)


3,292




1,474



123

%



3,267




1,468



123

%

















Barges at period-end


264




256



3

%



264




256



3

%

Towboats at period-end


23




20



15

%



23




20



15

%













































(a) 

Includes predecessor operations for the three and nine months ended September 30, 2019.

 

 

Gathering and Processing
Operating Statistics (unaudited) -
Consolidated
(a)


Three Months Ended

 Sept. 30



Nine Months Ended

 Sept. 30



2019



2018


%
Change



2019



2018


%
Change

Gathering throughput (mmcf/d)
















Marcellus Operations


1,271




1,201



6

%



1,273




1,157



10

%

Utica Operations







%








%

Southwest Operations


1,653




1,599



3

%



1,618




1,523



6

%

Bakken Operations


149




N/A



N/A



149




N/A



N/A

Rockies Operations


627




N/A



N/A



639




N/A



N/A

Total gathering throughput


3,700




2,800



32

%



3,679




2,680



37

%

















Natural gas processed (mmcf/d)
















Marcellus Operations


4,264




4,004



6

%



4,211




3,775



12

%

Utica Operations







%








%

Southwest Operations


1,667




1,479



13

%



1,608




1,403



15

%

Southern Appalachian Operations


254




226



12

%



244




244



%

Bakken Operations


149




N/A



N/A



149




N/A



N/A

Rockies Operations


568




N/A



N/A



575




N/A



N/A

Total natural gas processed


6,902




5,709



21

%



6,787




5,422



25

%

















C2 + NGLs fractionated (mbpd)
















Marcellus Operations


433




405



7

%



431




374



15

%

Utica Operations







%








%

Southwest Operations


19




20



(5)

%



13




18



(28)

%

Southern Appalachian Operations


13




14



(7)

%



12




13



(8)

%

Bakken Operations


29




N/A



N/A



22




N/A



N/A

Rockies Operations


4




N/A



N/A



4




N/A



N/A

Total C2 + NGLs fractionated


498




439



13

%



482




405



19

%


















(a) 

Includes operating data for entities that have been consolidated into the MPLX financial statements. Also includes
predecessor operations for the three and nine months ended September 30, 2019.

 

 

Gathering and Processing
Operating Statistics (unaudited) -
Operated
(a)


Three Months Ended

 Sept. 30



Nine Months Ended

 Sept. 30


2019


2018


%
Change


2019


2018


%
Change

Gathering throughput (mmcf/d)
















Marcellus Operations


1,271




1,201



6

%



1,273




1,157



10

%

Utica Operations


2,381




1,936



23

%



2,186




1,722



27

%

Southwest Operations


1,653




1,600



3

%



1,618




1,524



6

%

Bakken Operations


149




N/A



N/A




149




N/A



N/A


Rockies Operations


827




N/A



N/A




835




N/A



N/A


Total gathering throughput


6,281




4,737



33

%



6,061




4,403



38

%

















Natural gas processed (mmcf/d)
















Marcellus Operations


5,300




4,609



15

%



5,218




4,338



20

%

Utica Operations


866




857



1

%



835




889



(6)

%

Southwest Operations


1,667




1,479



13

%



1,608




1,403



15

%

Southern Appalachian Operations


254




226



12

%



244




244



%

Bakken Operations


149




N/A



N/A




149




N/A



N/A


Rockies Operations


568




N/A



N/A




575




N/A



N/A


Total natural gas processed


8,804




7,171



23

%



8,629




6,874



26

%

















C2 + NGLs fractionated (mbpd)
















Marcellus Operations


433




405



7

%



431




374



15

%

Utica Operations


49




49



%



45




46



(2)

%

Southwest Operations


19




20



(5)

%



13




18



(28)

%

Southern Appalachian Operations


13




14



(7)

%



12




13



(8)

%

Bakken Operations


29




N/A



N/A




22




N/A



N/A


Rockies Operations


4




N/A



N/A




4




N/A



N/A


Total C2 + NGLs fractionated


547




488



12

%



527




451



17

%



















(a) 

Includes operating data for entities that have been consolidated into the MPLX financial statements as well as operating data for partnership-operated equity
method investments. Also includes predecessor operations for the three and nine months ended September 30, 2019.

 

 

Reconciliation of Segment Adjusted EBITDA to Net
Income (unaudited)














Three Months Ended

 Sept. 30



Nine Months Ended

 Sept. 30

(In millions)


2019



2018



2019



2018

L&S segment adjusted EBITDA attributable to MPLX LP
(including predecessor results)

$

849



$

547



$

2,498



$

1,510


G&P segment adjusted EBITDA attributable to MPLX LP
(including predecessor results)


424




390




1,287




1,054


Adjusted EBITDA attributable to MPLX LP (including
predecessor results)


1,273




937




3,785




2,564


Depreciation and amortization


(302)




(201)




(916)




(565)


Provision for income taxes


(4)




(3)




(2)




(8)


Amortization of deferred financing costs


(10)




(14)




(29)




(45)


Non-cash equity-based compensation


(5)




(6)




(17)




(15)


Net interest and other financial costs


(223)




(139)




(657)




(389)


Income from equity method investments


95




64




255




175


Distributions/adjustments related to equity method investments


(145)




(112)




(399)




(314)


Unrealized derivative losses(a)


11




(17)




7




(18)


Acquisition costs


(9)







(14)




(3)


Other


(1)







(1)





Adjusted EBITDA attributable to noncontrolling interests


9




7




23




13


Net income

$

689



$

516



$

2,035



$

1,395
















(a)  

MPLX makes a distinction between realized and 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.

 

 

L&S Reconciliation of Segment Income from
Operations to Segment Adjusted EBITDA (unaudited)













Three Months Ended

 Sept. 30


Nine Months Ended

 Sept. 30

(In millions)


2019



2018



2019



2018

L&S segment income from operations

$

713



$

468



$

2,075



$

1,287


Depreciation and amortization


113




62




373




171


Income from equity method investments


(60)




(43)




(159)




(123)


Distributions/adjustments related to equity method
investments


70




57




184




164


Acquisition costs


9







14




3


Non-cash equity-based compensation


3




3




10




8


Other


1







1





L&S segment adjusted EBITDA attributable to MPLX LP
(including predecessor results)


849




547




2,498




1,510


L&S predecessor segment adjusted EBITDA attributable to
MPLX LP


(83)







(603)





L&S segment adjusted EBITDA attributable to MPLX LP

$

766



$

547



$

1,895



$

1,510














 

 

G&P Reconciliation of Segment Income from
Operations to Segment Adjusted EBITDA (unaudited)













Three Months Ended

 Sept. 30


Nine Months Ended

 Sept. 30

(In millions)

2019


2018


2019


2018

G&P segment income from operations

$

213



$

204



$

648



$

550


Depreciation and amortization


189




139




543




394


Income from equity method investments


(35)




(21)




(96)




(52)


Distributions/adjustments related to equity method investments


75




55




215




150


Unrealized derivative losses(a)


(11)




17




(7)




18


Non-cash equity-based compensation


2




3




7




7


Adjusted EBITDA attributable to noncontrolling interest


(9)




(7)




(23)




(13)


G&P segment adjusted EBITDA attributable to MPLX LP
(including predecessor results)


424




390




1,287




1,054


G&P predecessor segment adjusted EBITDA attributable to
MPLX LP


(25)







(167)





G&P segment adjusted EBITDA attributable to MPLX LP

$

399



$

390



$

1,120



$

1,054
















(a) 

MPLX makes a distinction between realized and 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.

 

 

Reconciliation of Adjusted EBITDA Attributable to MPLX
LP and DCF Attributable to GP and LP Unitholders from
Net Income (Loss) (unaudited)








Three Months Ended

 Sept. 30



Nine Months Ended

 Sept. 30

(In millions)


2019



2018



2019



2018

Net income

$

689



$

516



$

2,035



$

1,395


Provision for income taxes


4




3




2




8


Amortization of deferred financing costs


10




14




29




45


Net interest and other financial costs


223




139




657




389


Income from operations


926




672




2,723




1,837


Depreciation and amortization


302




201




916




565


Non-cash equity-based compensation


5




6




17




15


Income from equity method investments


(95)




(64)




(255)




(175)


Distributions/adjustments related to equity method
investments


145




112




399




314


Unrealized derivative (gains) losses(a)


(11)




17




(7)




18


Acquisition costs


9







14




3


Other


1







1





Adjusted EBITDA


1,282




944




3,808




2,577


Adjusted EBITDA attributable to noncontrolling
interests


(9)




(7)




(23)




(13)


Adjusted EBITDA attributable to predecessor(b)


(108)







(770)





Adjusted EBITDA attributable to MPLX LP


1,165




937




3,015




2,564


Deferred revenue impacts


36




13




67




24


Net interest and other financial costs


(223)




(139)




(657)




(389)


Maintenance capital expenditures


(75)




(40)




(174)




(98)


Maintenance capital expenditures reimbursements


18







34





Equity method investment capital expenditures paid
out


(8)




(6)




(16)




(22)


Other


6




1




16




1


Portion of DCF adjustments attributable to predecessor(b)


27







159





DCF attributable to MPLX LP


946




766




2,444




2,080


Preferred unit distributions(c)


(30)




(19)




(92)




(55)


DCF attributable to GP and LP unitholders (excluding
predecessor results)


916




747




2,352




2,025


Adjusted EBITDA attributable to predecessor(b)


108







770





Portion of DCF adjustments attributable to
predecessor(b)


(27)







(159)





DCF attributable to GP and LP unitholders (including
predecessor results)

$

997



$

747



$

2,963



$

2,025
















(a)

MPLX makes a distinction between realized and 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
attributable to GP and LP unitholders prior to the acquisition date.

(c)  

Includes MPLX distributions declared on the Series A and Series B preferred units as well as cash distributions earned by the Series B
preferred units for the three months ended September 30, 2019 (as the Series B preferred units are declared and payable semi-annually) 
assuming a distribution is declared by the Board of Directors. Cash distributions declared/to be paid to holders of the Series A and Series B
preferred units are not available to common unitholders.

 

Reconciliation of Net Income to LTM Pro forma adjusted EBITDA (unaudited)





Three Months Ended

 Sept. 30

(In millions)


2019



2018

LTM Net income

$

2,126



$

1,636


LTM Net income to adjusted EBITDA adjustments


1,908




1,811


LTM Adjusted EBITDA attributable to MPLX LP


4,034




3,447


LTM Pro forma adjustments for acquisitions


1,001




37


LTM Pro forma adjusted EBITDA


5,035




3,484


Consolidated debt

$

20,245



$

13,357


Consolidated debt to adjusted EBITDA


4.0x




3.8x








 

 

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

 Sept. 30



Nine Months Ended

 Sept. 30

(In millions)


2019



2018



2019



2018

Net cash provided by operating activities

$

1,036



$

737



$

2,990



$

2,027


Changes in working capital items


21




45




134




78


All other, net


(15)




(9)




(23)




5


Non-cash equity-based compensation


5




6




17




15


Net gain (loss) on disposal of assets


1




(1)




3




(1)


Current income taxes


1




1




1




1


Net interest and other financial costs


223




139




657




389


Asset retirement expenditures





2




1




7


Unrealized derivative (gains) losses(a)


(11)




17




(7)




18


Acquisition costs


9







14




3


Other adjustments related to equity method
investments


11




8




20




35


Other


1




(1)




1





Adjusted EBITDA


1,282




944




3,808




2,577


Adjusted EBITDA attributable to noncontrolling interests


(9)




(7)




(23)




(13)


Adjusted EBITDA attributable to predecessor(b)


(108)







(770)





Adjusted EBITDA attributable to MPLX LP


1,165




937




3,015




2,564


Deferred revenue impacts


36




13




67




24


Net interest and other financial costs


(223)




(139)




(657)




(389)


Maintenance capital expenditures


(75)




(40)




(174)




(98)


Maintenance capital expenditures reimbursements


18







34





Equity method investment capital expenditures paid out


(8)




(6)




(16)




(22)


Other


6




1




16




1


Portion of DCF adjustments attributable to
predecessor(b)


27







159





DCF attributable to MPLX LP


946




766




2,444




2,080


Preferred unit distributions(c)


(30)




(19)




(92)




(55)


DCF attributable to GP and LP unitholders (excluding
predecessor results)


916




747




2,352




2,025


Adjusted EBITDA attributable to predecessor(b)


108







770





Portion of DCF adjustments attributable to predecessor(b)


(27)







(159)





DCF attributable to GP and LP unitholders (including
predecessor results)

$

997



$

747



$

2,963



$

2,025
















(a) 

MPLX makes a distinction between realized and 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 attributable to GP and LP unitholders prior to the acquisition date.

(c)  

Includes MPLX distributions declared on the Series A and Series B preferred units as well as cash distributions
earned by the Series B preferred units for the three months ended September 30, 2019 (as the Series B preferred units
are declared and payable semi-annually) assuming a distribution is declared by the Board of Directors. Cash distributions
declared/to be paid to holders of the Series A and Series B preferred units are not available to common unitholders.

 

 

Capital Expenditures (unaudited)














Three Months Ended

 Sept. 30



Nine Months Ended

 Sept. 30

(In millions)


2019



2018



2019



2018

Capital Expenditures:












Maintenance

$

75



$

40



$

174



$

98


Maintenance reimbursements


(18)







(34)





Growth


518




458




1,479




1,382


Growth reimbursements


(5)







(17)





Total capital expenditures


570




498




1,602




1,480


Less: Increase (decrease) in capital accruals


10




(25)




(67)




90


Asset retirement expenditures





2




1




7


Additions to property, plant and equipment, net(a)


560




521




1,668




1,383


Investments in unconsolidated affiliates


171




103




494




215


Acquisitions





451




(5)




451


Total capital expenditures and acquisitions


731



$

1,075



$

2,157



$

2,049


Less: Maintenance capital expenditures (including
reimbursements)


57




40




140




98


Acquisitions





451




(5)




451


Total growth capital expenditures(b)

$

674



$

584



$

2,022



$

1,500
















(a)  

This amount is represented in the Consolidated Statements of Cash Flows as Additions to property, plant and equipment
after excluding growth and maintenance reimbursements. Reimbursements are shown as Contributions from MPC within the
Financing activities section of the Consolidated Statements of Cash Flows.

(b)  

Amount excludes contributions from noncontrolling interests of $94 million and $8 million for the nine months ended September
30, 2019 and 2018, respectively, as reflected in the financing section of our statement of cash flows and zero and $3 million for
the three months ended September 30, 2019 and 2018, respectively.

 

 

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