MPLX LP Reports Fourth-Quarter and Full-Year Financial Resul

|Jan 29|magazine104 min read

FINDLAY, Ohio, Jan. 29, 2020 /PRNewswire/ --

  • Reported fourth-quarter net loss attributable to MPLX of $581 million and full-year net income attributable to MPLX of $1.0 billion; includes non-cash impairment charges of $1.2 billion in fourth quarter primarily related to goodwill associated with the Andeavor Logistics G&P businesses acquired by MPC as part of its combination with Andeavor in October 2018
  • Reported fourth-quarter adjusted EBITDA attributable to MPLX of $1.3 billion and full-year adjusted EBITDA attributable to MPLX of $4.3 billion, or $5.1 billion including results of Andeavor Logistics
  • Generated $4.1 billion in net cash provided by operating activities for the full-year 2019, supporting the return of capital of approximately $2.8 billion to unitholders
  • Reduced 2020 growth capital spending target to approximately $1.5 billion
  • Targeting positive free cash flow, after capital investments and distributions, in 2021

MPLX LP (NYSE: MPLX) today reported a fourth-quarter 2019 net loss attributable to MPLX of $581 million compared with net income of $434 million for the fourth quarter of 2018. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) attributable to MPLX was $1.3 billion, compared with $1.2 billion in the fourth quarter of 2018. Fourth-quarter 2019 results include non-cash impairment charges of $1.2 billion, primarily related to goodwill associated with the Andeavor Logistics (ANDX) gathering and processing businesses acquired by Marathon Petroleum Corporation (NYSE: MPC) as part of its combination with Andeavor in October 2018.

The Logistics and Storage (L&S) segment reported segment income from operations of $677 million and adjusted EBITDA of $853 million for the quarter, up $40 million and $44 million, respectively, versus the fourth quarter of last year. The Gathering and Processing (G&P) segment reported a segment loss from operations of $1.0 billion and adjusted EBITDA of $466 million for the quarter, down $1.3 billion and up $29 million, respectively, on a year-over-year basis. G&P results include the non-cash impairment charges discussed above.

MPLX today announced an updated 2020 growth capital target of approximately $1.5 billion from the previously announced target of approximately $2.0 billion. Michael J. Hennigan, president and chief executive officer, commented, "We have further streamlined our project portfolio to focus on projects that deliver the highest returns. Our continued efforts to high-grade our capital spending will help accomplish our target of positive free cash flow generation, after capital investments and distributions, in 2021. This inflection is expected to allow both the funding of our distribution and capital program entirely from internally generated cash flow, as well as increase our flexibility to reduce debt or repurchase units."

During the quarter, MPLX generated $1.1 billion in net cash provided by operating activities and $1.0 billion of distributable cash flow, which provided adjusted distribution coverage of 1.42 times. MPLX also announced its 28th consecutive distribution increase, to $0.6875 per common unit, a $0.01 increase over the prior quarter and a 6.2% increase over the prior year's fourth quarter.

Financial Highlights



Three Months Ended
 Dec. 31



Year Ended
 Dec. 31

(In millions, except per unit and ratio data)


2019



2018



2019



2018

Net (loss) income attributable to MPLX


$

(581)




$

434




$

1,033




$

1,818


Adjusted net (loss) income attributable to MPLX(a)


(581)




606




1,434




1,990


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


1,319




911




4,334




3,475


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


1,319




1,246




5,104




3,810


Net cash provided by operating activities


1,092




1,044




4,082




3,071


Distributable cash flow attributable to MPLX LP(c)


1,045




955




4,100




3,035


Distribution per common unit(d)


$

0.6875




$

0.6475




$

2.6900




$

2.5300


Distribution coverage ratio(e)


1.42x




1.80x




1.51x




1.49x


Consolidated debt to adjusted EBITDA(f)


4.1x




3.9x




N/A




N/A















(a)  

Includes net income attributable to predecessor.

(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. For the three months and year ended December 31, 2018, DCF attributable to predecessor for the fourth quarter has been included with no corresponding distribution being declared by MPLX relating to the predecessor, resulting in distribution coverage ratios of 1.80x and 1.49x, respectively. For the year ended December 31, 2019, DCF attributable to predecessor has been included with no corresponding distribution being declared by MPLX relating to the predecessor for the first quarter of 2019, resulting in a distribution coverage ratio of 1.51x.

(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
 Dec. 31



Year Ended
 Dec. 31

Segment income (loss) from operations (unaudited)


2019


2018



2019



2018

 Logistics and Storage


$

677



$

637



$

2,752



$

1,924


 Gathering and Processing



(1,023)




254




(375)




804















Segment adjusted EBITDA attributable to MPLX LP
(unaudited)













 Logistics and Storage



853




809




3,351




2,319


 Gathering and Processing


$

466



$

437



$

1,753



$

1,491















Logistics & Storage

L&S segment income from operations and adjusted EBITDA for the fourth quarter of 2019 increased by $40 million and $44 million, respectively, compared to the same period in 2018. The increase was primarily due to the acquisition of ANDX and the performance of the underlying base business.

Total pipeline throughputs were 5.1 million barrels per day in the fourth quarter, relatively flat versus the same quarter of 2018, despite volume impacts related to project work at MPC's Garyville refinery. The average tariff rate was $0.90 per barrel for the quarter. Terminal throughput was 3.3 million barrels per day for the quarter, an increase of 4% versus the same quarter of 2018.

Gathering & Processing

G&P segment income from operations and segment adjusted EBITDA for the fourth quarter of 2019 decreased by $1.3 billion and increased by $29 million, respectively, compared to the same period in 2018. Year-over-year results were impacted by non-cash impairment charges of $1.2 billion, primarily related to goodwill associated with the ANDX G&P businesses acquired by MPC as part of its combination with Andeavor in October 2018. In the fourth quarter of 2019:

  • Gathered volumes: 6.2 billion cubic feet per day, a 5% increase versus the fourth quarter of 2018
  • Processed volumes: 8.8 billion cubic feet per day, a 7% increase versus the fourth quarter of 2018
  • Fractionated volumes: 557 thousand barrels per day, an 11% increase versus the fourth quarter of 2018

In the Marcellus and Utica, the company continued to experience significant year-over-year growth:

  • Gathered volumes averaged 3.6 billion cubic feet per day (bcf/d) in the fourth quarter, an 11% increase versus the fourth quarter of 2018. For the full year, gathered volumes increased 18% year-over-year
  • Processed volumes averaged 6.1 bcf/d in the fourth quarter, a 7% increase versus the fourth quarter of 2018 driven by the addition of the Sherwood 12 and 13 processing plants, which were placed in service during the quarter. For the full year, processed volumes increased 14% year-over-year
  • Fractionated volumes averaged 487 thousand barrels per day in the fourth quarter, a 9% increase versus the fourth quarter of 2018. The increase was primarily driven by higher volumes from expansions at the Hopedale and Sherwood complexes. For the full year, fractionated volumes increased 12% year-over-year

Strategic Update

Today, MPLX announced an updated 2020 growth capital target of approximately $1.5 billion from the previously announced target of approximately $2.0 billion. The company also announced it is targeting positive free cash flow, after capital investments and distributions, in 2021. This inflection is expected to allow both the funding of its distribution and capital program entirely from internally generated cash flow. Removing MPLX's reliance on external funding and shifting to a model focused on generating cash flow beyond the needs of the business is anticipated to enable MPLX to focus its capital allocation toward opportunities like debt reduction or unit repurchases.

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 completed 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 MPC's Galveston Bay refinery.

Also in the Permian, the Whistler Pipeline is being designed to transport approximately 2 bcf/d 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.

MPLX continues to progress its Permian-to-Gulf Coast NGL pipeline, called BANGL, which has a planned capacity of approximately 500 thousand barrels per day. The company expects a final investment decision in the near term.

Reversal of the Capline pipeline continues to progress, with a purge of the mainline completed in the fourth quarter. Once reversed, Capline will be capable of supplying discounted mid-continent and Canadian crude to St. James, Louisiana, which has a direct connection to MPC's Garyville refinery. Capline, which is partially owned by MPC and operated by MPLX, is expected to begin light crude service in mid-2021, with heavy crude service expected in 2022.

To support additional growth in the G&P segment, following the Sherwood 12 and Torñado processing plants that came online in October 2019, MPLX completed the Sherwood 13 processing plant late in the fourth quarter. This added another 200 million cubic feet per day of incremental capacity. The company expects to place in service the Omega 2 processing plant in the STACK shale play in Oklahoma in the first quarter of 2020, the Preakness processing plant in the Permian in the second quarter of 2020, and the Smithburg 1 processing plant in the Marcellus in the third quarter of 2020.

Financial Position and Liquidity

As of Dec. 31, 2019, MPLX had $15 million in cash, $3.5 billion available through its bank revolving credit facility expiring in July 2024 and $0.9 billion available through its intercompany loan agreement with MPC. The company's leverage ratio was 4.1 times at Dec. 31, 2019. MPLX remains committed to maintaining an investment-grade credit profile.

Conference Call

At 11 a.m. ET 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 Fourth-Quarter and Full-Year Financial Results" link in the "Financial Results" section. A replay of the webcast will be available on MPLX's website for two weeks. Financial information, including this 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 Kheiry, 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 DCFgenerated 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 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; the risk of further impairments; 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 positive free cash flow in 2021, and 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, including obtaining regulatory approvals, 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 related thereto; 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 risk of further impairments; 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 to maintain or increase the dividend; 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
 Dec. 31



Year Ended
 Dec. 31

(In millions, except per unit data)

2019


2018


2019


2018

Revenues and other income:












Operating revenue

$

1,014



$

1,009



$

3,832



$

3,315


Operating revenue - related parties


1,231




1,189




4,793




3,337


Income from equity method investments


35




72




290




247


Other income


36




25




126




106


Total revenues and other income


2,316




2,295




9,041




7,005


Costs and expenses:












Operating expenses


625




649




2,316




2,055


Operating expenses - related parties


378




326




1,396




956


Depreciation and amortization


338




302




1,254




867


Impairment expense


1,197







1,197





General and administrative expenses


95




99




388




316


Other taxes


29




28




113




83


Total costs and expenses


2,662




1,404




6,664




4,277


Income from operations


(346)




891




2,377




2,728


Interest and other financial costs


229




280




915




714


Income before income taxes


(575)




611




1,462




2,014


(Benefit) provision for income taxes


(2)










8


Net (loss) income


(573)




611




1,462




2,006


Less: Net income attributable to noncontrolling interests


8




5




28




16


Less: Net income attributable to Predecessor





172




401




172


Net (loss) income attributable to MPLX LP


(581)




434




1,033




1,818


Less: Series A preferred unit distributions


20




20




81




75


Less: Series B preferred unit distributions


10







17





Limited partners' interest in net (loss) income
attributable to MPLX LP

$

(611)



$

414



$

935



$

1,743














Per Unit Data












Net (loss) income attributable to MPLX LP per limited
partner unit:












Common - basic

$

(0.58)



$

0.52



$

1.00



$

2.29


Common - diluted

$

(0.58)



$

0.52



$

1.00



$

2.29


Weighted average limited partner units outstanding:












Common units – basic


1,058




794




906




761


Common units – diluted


1,058




794




907




761














 

 













Select Financial Statistics (unaudited)


Three Months Ended
 Dec. 31



Year Ended
 Dec. 31

(In millions, except ratio data)

2019


2018


2019


2018

Common unit distributions declared by MPLX












Common units (LP) - public(a)

$

270



$

187



$

988



$

732


Common units - MPC(a)(b)


446




327




1,647




1,253


Total GP and LP distribution declared


716




514




2,635




1,985














Preferred unit distributions(c)












Series A preferred unit distributions(d)


20




20




81




75


Series B preferred unit distributions(e)


11







42





Total preferred unit distributions


31




20




123




75














Other Financial Data












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


1,319




911




4,334




3,475


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


1,319




1,246




5,104




3,810


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

$

1,015



$

925



$

3,978



$

2,950


Distribution coverage ratio(i)


1.42x



1.80x



1.51x



1.49x













Cash Flow Data












Net cash flow provided by (used in):












Operating activities

$

1,092



$

1,044



$

4,082



$

3,071


Investing activities


(874)




(851)




(3,063)




(2,878)


Financing activities

$

(244)



$

(147)



$

(1,089)



$

(117)














(a)  

The distribution on common units for 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 December 31, 2019 and $37.5 million for the twelve months ended December 31, 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 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. For the three months and year ended December 31, 2018, DCF attributable to predecessor for the fourth quarter has been
included with no corresponding distribution being declared by MPLX relating to the predecessor, resulting in distribution coverage
ratios of 1.80x and 1.49x, respectively. For the year ended December 31, 2019, DCF attributable to predecessor has been included
with no corresponding distribution being declared by MPLX relating to the predecessor for the first quarter of 2019, resulting in a
distribution coverage ratio of 1.51x.

 

 

Select Balance Sheet Data (unaudited)






(In millions, except ratio data)

 

Dec. 31, 2019


 

Dec. 31, 2018(a)

Cash and cash equivalents

$

15



$

77


Total assets


40,430




39,325


Total long-term debt(b)


20,307




18,435


Redeemable preferred units


968




1,004


Total equity

$

16,613



$

17,731


Consolidated total debt to adjusted EBITDA(c)


4.1x




3.9x








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 $594 million as of December 31, 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 $406 million and $431 million of unamortized discount and debt issuance costs as of December 31, 2019 and December 31, 2018, respectively.

 

 

Operating Statistics (unaudited)(a)

















Three Months Ended
 Dec. 31



Year Ended
 Dec. 31


2019


2018


%
Change


2019


2018


%
Change

Logistics and Storage
















Pipeline throughput (mbpd)
















Crude oil pipelines


3,196




3,214



(1)

%



3,228




3,121



3

%

Product pipelines


1,923




1,943



(1)

%



1,886




1,823



3

%

Total pipelines


5,119




5,157



(1)

%



5,114




4,944



3

%

Average tariff rates ($ per barrel)
















Crude oil pipelines

$

0.97



$

0.85



14

%


$

0.94



$

0.67



40

%

Product pipelines


0.78




0.67



16

%



0.75




0.75



%

Total pipelines

$

0.90



$

0.78



15

%



0.87




0.70



24

%

















Terminal throughput (mbpd)


3,313




3,188



4

%



3,279




3,148



4

%

















Barges at period-end


286




256



12

%



286




256



12

%

Towboats at period-end


23




23



%



23




23



%

(a)    Inclusive of predecessor operations beginning October 1, 2018.










 

 

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


Three Months Ended
 Dec. 31



Twelve Months Ended
 Dec. 31


 

2019


 

2018


%
Change


 

2019


2018


%
Change

Gathering throughput (mmcf/d)
















Marcellus Operations


1,329




1,148



16

%



1,287




1,155



11

%

Utica Operations







%








%

Southwest Operations


1,651




1,694



(3)

%



1,625




1,566



4

%

Bakken Operations


158




147



7

%



151




147



3

%

Rockies Operations


602




654



(8)

%



630




654



(4)

%

Total gathering throughput


3,740




3,643



3

%



3,693




3,522



5

%

















Natural gas processed (mmcf/d)
















Marcellus Operations


4,136




3,977



4

%



4,192




3,826



10

%

Utica Operations







%








%

Southwest Operations


1,690




1,542



10

%



1,629




1,438



13

%

Southern Appalachian Operations


244




255



(4)

%



244




247



(1)

%

Bakken Operations


158




147



7

%



151




147



3

%

Rockies Operations


564




573



(2)

%



572




573



%

Total natural gas processed


6,792




6,494



5

%



6,788




6,231



9

%

















C2 + NGLs fractionated (mbpd)
















Marcellus Operations


446




398



12

%



435




379



15

%

Utica Operations







%








%

Southwest Operations


21




17



24

%



15




18



(17)

%

Southern Appalachian Operations


13




18



(28)

%



12




15



(20)

%

Bakken Operations


31




15



107

%



24




15



60

%

Rockies Operations


5




4



25

%



4




4



%

Total C2 + NGLs fractionated


516




452



14

%



490




431



14

%

















(a)   

Includes operating data for entities that have been consolidated into the MPLX financial statements. Also inclusive of predecessor
operations beginning October 1, 2018.

 

 

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


Three Months Ended
 Dec. 31



Twelve Months Ended
 Dec. 31


 

2019


 

2018


%
Change


 

2019


 

2018


%
Change

Gathering throughput (mmcf/d)
















Marcellus Operations


1,329




1,148



16

%



1,287




1,155



11

%

Utica Operations


2,241




2,067



8

%



2,200




1,809



22

%

Southwest Operations


1,658




1,694



(2)

%



1,628




1,567



4

%

Bakken Operations


158




147



7

%



151




147



3

%

Rockies Operations


806




841



(4)

%



828




841



(2)

%

Total gathering throughput


6,192




5,897



5

%



6,094




5,519



10

%

















Natural gas processed (mmcf/d)
















Marcellus Operations


5,339




4,773



12

%



5,248




4,448



18

%

Utica Operations


734




877



(16)

%



810




886



(9)

%

Southwest Operations


1,720




1,542



12

%



1,636




1,438



14

%

Southern Appalachian Operations


244




255



(4)

%



244




247



(1)

%

Bakken Operations


158




147



7

%



151




147



3

%

Rockies Operations


564




573



(2)

%



572




573



%

Total natural gas processed


8,759




8,167



7

%



8,661




7,739



12

%

















C2 + NGLs fractionated (mbpd)
















Marcellus Operations


446




398



12

%



435




379



15

%

Utica Operations


41




50



(18)

%



44




47



(6)

%

Southwest Operations


21




17



24

%



15




18



(17)

%

Southern Appalachian Operations


13




18



(28)

%



12




15



(20)

%

Bakken Operations


31




15



107

%



24




15



60

%

Rockies Operations


5




4



25

%



4




4



%

Total C2 + NGLs fractionated


557




502



11

%



534




478



12

%


(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 inclusive of predecessor operations beginning October 1, 2018.

 


Reconciliation of Segment Adjusted EBITDA to Net
Income (unaudited)














Three Months Ended
 Dec. 31



Year Ended
 Dec. 31

(In millions)

2019


2018


2019


2018

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

$

853



$

809



$

3,351



$

2,319


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


466




437




1,753




1,491


Adjusted EBITDA attributable to MPLX LP (including
predecessor results)


1,319




1,246




5,104




3,810


Depreciation and amortization


(338)




(302)




(1,254)




(867)


Benefit (provision) for income taxes


2










(8)


Amortization of deferred financing costs


(13)




(10)




(42)




(55)


Loss on extinguishment of debt





(46)







(46)


Non-cash equity-based compensation


(5)




(8)




(22)




(23)


Impairment expense


(1,197)







(1,197)





Net interest and other financial costs


(216)




(224)




(873)




(613)


Income from equity method investments


35




72




290




247


Distributions/adjustments related to equity method
investments


(163)




(144)




(562)




(458)


Unrealized derivative (losses) gains(a)


(6)




23




1




5


Acquisition costs





(1)




(14)




(4)


Other








(1)





Adjusted EBITDA attributable to noncontrolling interests


9




5




32




18


Net income

$

(573)



$

611



$

1,462



$

2,006



(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
 Dec. 31


Year Ended
 Dec. 31

(In millions)

2019


2018


2019


2018

L&S segment income from operations

$

677



$

637



$

2,752



$

1,924


Depreciation and amortization


130




137




503




308


Income from equity method investments


(41)




(48)




(200)




(171)


Distributions/adjustments related to equity method investments


83




78




267




242


Acquisition costs





1




14




4


Non-cash equity-based compensation


4




4




14




12


Other








1





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


853




809




3,351




2,319


L&S predecessor segment adjusted EBITDA attributable to
MPLX LP





(262)




(603)




(262)


L&S segment adjusted EBITDA attributable to MPLX LP

$

853



$

547



$

2,748



$

2,057



 

 

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













Three Months Ended
 Dec. 31


Year Ended
 Dec. 31

(In millions)

2019


2018


2019


2018

G&P segment income from operations

$

(1,023)



$

254



$

(375)



$

804


Depreciation and amortization


208




165




751




559


Impairment expense


1,197







1,197





Loss (Income) from equity method investments


6




(24)




(90)




(76)


Distributions/adjustments related to equity method investments


80




66




295




216


Unrealized derivative losses (gains)(a)


6




(23)




(1)




(5)


Non-cash equity-based compensation


1




5




8




12


Adjusted EBITDA attributable to noncontrolling interest


(9)




(6)




(32)




(19)


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


466




437




1,753




1,491


G&P predecessor segment adjusted EBITDA attributable to
MPLX LP





(73)




(167)




(73)


G&P segment adjusted EBITDA attributable to MPLX LP

$

466



$

364



$

1,586



$

1,418














(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
 Dec. 31



Year Ended
 Dec. 31

(In millions)

2019


2018


2019


2018

Net income

$

(573)



$

611



$

1,462



$

2,006


(Benefit) provision for income taxes


(2)










8


Amortization of deferred financing costs


13




10




42




55


Loss on extinguishment of debt





46







46


Net interest and other financial costs


216




224




873




613


Income from operations


(346)




891




2,377




2,728


Depreciation and amortization


338




302




1,254




867


Non-cash equity-based compensation


5




8




22




23


Impairment expense


1,197







1,197





Income from equity method investments


(35)




(72)




(290)




(247)


Distributions/adjustments related to equity method
investments


163




144




562




458


Unrealized derivative losses (gains)(a)


6




(23)




(1)




(5)


Acquisition costs





1




14




4


Other








1





Adjusted EBITDA


1,328




1,251




5,136




3,828


Adjusted EBITDA attributable to noncontrolling
interests


(9)




(5)




(32)




(18)


Adjusted EBITDA attributable to predecessor(b)





(335)




(770)




(335)


Adjusted EBITDA attributable to MPLX LP


1,319




911




4,334




3,475


Deferred revenue impacts


27




4




94




28


Net interest and other financial costs


(216)




(224)




(873)




(613)


Maintenance capital expenditures


(88)




(77)




(262)




(175)


Maintenance capital expenditures reimbursements


19




8




53




8


Equity method investment capital expenditures paid
out


(12)




(9)




(28)




(31)


Other


(4)




7




12




8


Portion of DCF adjustments attributable to
predecessor(b)





81




159




81


DCF attributable to MPLX LP


1,045




701




3,489




2,781


Preferred unit distributions(c)


(30)




(30)




(122)




(85)


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


1,015




671




3,367




2,696


Adjusted EBITDA attributable to predecessor(b)





335




770




335


Portion of DCF adjustments attributable to predecessor(b)





(81)




(159)




(81)


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

$

1,015



$

925



$

3,978



$

2,950














(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 (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)





Year Ended
 Dec. 31

(In millions)

2019


2018

LTM Net income

$

1,462



$

1,834


LTM Net income to adjusted EBITDA adjustments


2,872




1,641


LTM Adjusted EBITDA attributable to MPLX LP


4,334




3,475


LTM Pro forma/Predecessor adjustments for acquisitions


770




92


LTM Pro forma adjusted EBITDA


5,104




3,567


Consolidated debt

$

20,713



$

13,856


Consolidated debt to adjusted EBITDA(a)


4.1x




3.9x








(a)   

2018 is shown as historically presented and has not been adjusted for predecessor impacts.

 

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
 Dec. 31



Year Ended
 Dec. 31

(In millions)

2019


2018


2019


2018

Net cash provided by operating activities

$

1,092



$

1,044



$

4,082



$

3,071


Changes in working capital items


(26)




(47)




108




31


All other, net


14




(10)




(9)




(5)


Non-cash equity-based compensation


5




8




22




23


Net gain (loss) on disposal of assets


3




(2)




6




(3)


Current income taxes


1




(1)




2





Loss on extinguishment of debt





46







46


Net interest and other financial costs


216




224




873




613


Asset retirement expenditures








1




7


Unrealized derivative (gains) losses(a)


6




(23)




(1)




(5)


Acquisition costs





1




14




4


Other adjustments related to equity method
investments


17




11




37




46


Other








1





Adjusted EBITDA


1,328




1,251




5,136




3,828


Adjusted EBITDA attributable to noncontrolling interests


(9)




(5)




(32)




(18)


Adjusted EBITDA attributable to predecessor(b)





(335)




(770)




(335)


Adjusted EBITDA attributable to MPLX LP


1,319




911




4,334




3,475


Deferred revenue impacts


27




4




94




28


Net interest and other financial costs


(216)




(224)




(873)




(613)


Maintenance capital expenditures


(88)




(77)




(262)




(175)


Maintenance capital expenditures reimbursements


19




8




53




8


Equity method investment capital expenditures paid out


(12)




(9)




(28)




(31)


Other


(4)




7




12




8


Portion of DCF adjustments attributable to
predecessor(b)





81




159




81


DCF attributable to MPLX LP


1,045




701




3,489




2,781


Preferred unit distributions(c)


(30)




(30)




(122)




(85)


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


1,015




671




3,367




2,696


Adjusted EBITDA attributable to predecessor(b)





335




770




335


Portion of DCF adjustments attributable to
predecessor(b)





(81)




(159)




(81)


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

$

1,015



$

925



$

3,978



$

2,950














(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 (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
 Dec. 31



Year Ended
 Dec. 31

(In millions)

2019


2018


2019


2018

Capital Expenditures:












Maintenance

$

88



$

77



$

262



$

175


Maintenance reimbursements


(19)




(8)




(53)




(8)


Growth


522




696




2,001




2,078


Growth reimbursements


(4)




(16)




(21)




(16)


Total capital expenditures


587




749




2,189




2,229


Less: Increase (decrease) in capital accruals


(79)




45




(146)




135


Asset retirement expenditures








1




7


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


666




704




2,334




2,087


Investments in unconsolidated affiliates


219




126




713




341


Acquisitions








(6)




451


Total capital expenditures and acquisitions


885



$

830



$

3,041



$

2,879


Less: Maintenance capital expenditures (including
reimbursements)


69




69




209




167


Acquisitions








(6)




451


Total growth capital expenditures(b)

$

816



$

761



$

2,838



$

2,261



(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 $95 million and $11 million for the year ended December 21, 2019 and 2018,
respectively, as reflected in the financing section of our statement of cash flows and $1 million and $3 million for the three months ended
December 31, 2019 and 2018, respectively. The table below shows our 2019 adjusted growth capital expenditures which excludes the impact of
changes in capital accruals and capitalized interest and also factors in any contributions from noncontrolling interests.

 

2019 adjusted growth capital expenditures

 

Year Ended
 Dec. 31

(In millions)

2019

Total growth capital expenditures

$

2,838


Decrease in capital accruals


(146)


Capitalized interest


(44)


Contributions from noncontrolling interests


(95)


Total adjusted growth capital expenditures

$

2,553


 

Cision View original content:http://www.prnewswire.com/news-releases/mplx-lp-reports-fourth-quarter-and-full-year-financial-results-300995208.html

SOURCE MPLX LP