MPLX LP Reports Fourth-Quarter and Full-Year Financial Results
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
Year Ended
Dec. 31 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 1,319 911 4,334 3,475
predecessor results)(b)
Adjusted EBITDA attributable to MPLX LP (including 1,319 1,246 5,104 3,810
predecessor results)(c)
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 Year Ended
Dec. 31 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 Year Ended
Dec. 31 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 $
(611) $
414 $
935 $
1,743
attributable to MPLX LP
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 Year Ended
Dec. 31 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 1,319 911 4,334 3,475
predecessor results)(f)(g)
Adjusted EBITDA attributable to MPLX LP (including 1,319 1,246 5,104 3,810
predecessor results)(f)(h)
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 $431 million of unamortized
discount and debt issuance costs as
of December 31, 2019 and December
31, 2018, respectively.
Operating Statistics (unaudited)(a)
Three Months Ended Year Ended
Dec. 31 Dec. 31
2019 2018 % 2019 2018 %
Change Change
---
Logistics and Storage
Pipeline throughput (mbpd)
---
Crude oil pipelines 3,196 3,214 (1) 3,228 3,121 3
% %
Product pipelines 1,923 1,943 (1) 1,886 1,823 3
% %
Total pipelines 5,119 5,157 (1) 5,114 4,944 3
% %
Average tariff rates ($ 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 Three Months Ended Twelve Months Ended
Operating Statistics (unaudited) - Dec. 31 Dec. 31
Consolidated
(a)
% 2018 %
Change Change
2019 2018 2019
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 Three Months Ended Twelve Months Ended
Operating Statistics (unaudited) - Dec. 31 Dec. 31
Operated
(a)
% %
Change Change
2019 2018 2019 2018
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 Year Ended
Dec. 31 Dec. 31
(In millions) 2019 2018 2019 2018
--- ---
L&S segment adjusted EBITDA attributable to MPLX LP $
853 $
809 $
3,351 $
2,319
(including predecessor results)
G&P segment adjusted EBITDA attributable to MPLX LP 466 437 1,753 1,491
(including predecessor results)
Adjusted EBITDA attributable to MPLX LP (including 1,319 1,246 5,104 3,810
predecessor results)
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 (163) (144) (562) (458)
investments
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 Year Ended
Dec. 31 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 853 809 3,351 2,319
(including predecessor results)
L&S predecessor segment adjusted EBITDA attributable
to (262) (603) (262)
MPLX LP
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 Year Ended
Dec. 31 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 466 437 1,753 1,491
(including predecessor results)
G&P predecessor segment adjusted EBITDA attributable to (73) (167) (73)
MPLX LP
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 Year Ended
Dec. 31 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 163 144 562 458
investments
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 (9) (5) (32) (18)
interests
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 (12) (9) (28) (31)
out
Other (4) 7 12 8
Portion of DCF adjustments attributable to 81 159 81
predecessor(b)
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 1,015 671 3,367 2,696
predecessor results)
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 $
1,015 $
925 $
3,978 $
2,950
predecessor results)
(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 Year Ended
Dec. 31 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 17 11 37 46
investments
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 81 159 81
predecessor(b)
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 1,015 671 3,367 2,696
predecessor results)
Adjusted EBITDA attributable to predecessor(b) 335 770 335
Portion of DCF adjustments attributable to (81) (159) (81)
predecessor(b)
DCF attributable to GP and LP unitholders (including $
1,015 $
925 $
3,978 $
2,950
predecessor results)
(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 Year Ended
Dec. 31 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 69 69 209 167
reimbursements)
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
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SOURCE MPLX LP
