COST: 450 $MM
VOLUMES: 120 M Bbls/d
COST: 220 $MM
VOLUMES: 230 M Bbls/d
COST: 2 $B
FINDLAY, Ohio, Feb. 2, 2021 /PRNewswire/ --
MPLX LP (NYSE: MPLX) today reported fourth-quarter 2020 net income attributable to MPLX of $691 million, compared to a net loss attributable to MPLX of $581 million for the fourth quarter of 2019. Fourth-quarter 2019 results include non-cash impairment charges of $1.2 billion primarily related to goodwill associated with western U.S. gathering and processing businesses. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) attributable to MPLX was $1.4 billion, compared with $1.3 billion in the fourth quarter of 2019.
The Logistics and Storage (L&S) segment reported segment income from operations of $662 million and adjusted EBITDA of $884 million for the quarter, down $15 million and up $31 million, respectively, versus the fourth quarter of last year. The Gathering and Processing (G&P) segment reported segment income from operations of $258 million and adjusted EBITDA of $471 million for the quarter, up $1.3 billion and $5 million, respectively, versus the fourth quarter of last year.
During the quarter, MPLX generated $1.2 billion in net cash provided by operating activities and $1.2 billion of distributable cash flow. Distribution coverage was 1.58x for the fourth quarter of 2020. MPLX also announced a fourth-quarter 2020 distribution of $0.6875 per common unit, consistent with the prior quarter.
"As we look back on the unprecedented challenges we faced in 2020, we are proud of the way our performance highlighted the resiliency and stability of our underlying businesses," said Michael J. Hennigan, chairman, president and chief executive officer. "Our results demonstrate our commitment to executing on the priorities we laid out for the year. We took necessary steps to reduce our long-term cost structure and achieved excess cash flow for the full year, giving us the financial flexibility to begin repurchasing units.
"Looking forward to 2021, we have outlined a growth capital spending outlook that allows us to focus on investments that deliver the most attractive returns. We also continue to work on opportunities for lowering costs and driving efficiencies in the business. This emphasis on strict capital discipline, along with growing EBITDA, supports our continuing goal of generating excess cash flow for 2021, providing the opportunity to return incremental capital to our unitholders."
Financial Highlights
Three Months Ended Dec. 31 | Twelve Months Ended December 31 | ||||||||||||||||||
(In millions, except per unit and ratio data) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
Net income (loss) attributable to MPLX(a) | $ | 691 | $ | (581) | $ | (720) | $ | 1,033 | |||||||||||
Adjusted net (loss) income attributable to MPLX(b) | N/A | (581) | N/A | 1,434 | |||||||||||||||
Adjusted EBITDA attributable to MPLX LP(c) | 1,355 | 1,319 | 5,211 | 5,104 | |||||||||||||||
Net cash provided by operating activities | 1,185 | 1,092 | 4,521 | 4,082 | |||||||||||||||
Distributable cash flow attributable to MPLX LP(c) | 1,155 | 1,045 | 4,327 | 4,100 | |||||||||||||||
Distribution per common unit(d) | $ | 0.6875 | $ | 0.6875 | $ | 2.7500 | $ | 2.6900 | |||||||||||
Distribution coverage ratio(e) | 1.58x | 1.42x | 1.46x | 1.51x | |||||||||||||||
Consolidated debt to adjusted EBITDA(f) | 3.9x | 4.1x | 3.9x | 4.1x | |||||||||||||||
(a) | The twelve months ended Dec. 31, 2020 includes impairments related to equity method investments of approximately $1.3 billion, goodwill impairment of approximately $1.8 billion and long-lived asset impairments of approximately $0.3 billion, all within our G&P operating segment. |
(b) | Includes net income attributable to predecessor for the twelve months ended Dec. 31, 2019. The predecessor period represents the period prior to MPLX's acquisition of Andeavor Logistics LP (ANDX) on July 30, 2019. |
(c) | Non-GAAP measures calculated before distributions to preferred unitholders. See reconciliation below. Includes adjusted EBITDA and distributable cash flow (DCF) adjustments attributable to predecessor. For the twelve months ended Dec. 31, 2019, adjusted EBITDA attributable to MPLX LP excluding predecessor results was $4.3 billion. |
(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 distributions declared. For the twelve months ended Dec. 31, 2019, DCF attributable to predecessor has been included with no corresponding distribution being declared by MPLX 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. 2019 is shown as historically presented and has not been adjusted for predecessor impacts. |
Segment Results (including predecessor)
(In millions) | Three Months Ended Dec. 31 | Twelve Months Ended December 31 | |||||||||||||
Segment income (loss) from operations (unaudited) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Logistics and Storage | $ | 662 | $ | 677 | $ | 2,743 | $ | 2,752 | |||||||
Gathering and Processing | 258 | (1,023) | (2,532) | (375) | |||||||||||
Segment adjusted EBITDA attributable to MPLX LP (unaudited) | |||||||||||||||
Logistics and Storage | 884 | 853 | 3,488 | 3,351 | |||||||||||
Gathering and Processing | $ | 471 | $ | 466 | $ | 1,723 | $ | 1,753 | |||||||
Logistics & Storage
L&S segment income from operations for the fourth quarter of 2020 decreased by $15 million while segment adjusted EBITDA for the fourth quarter of 2020 increased by $31 million. Both results are compared to the same period in 2019. EBITDA for the quarter benefited from lower operating expenses and the strength of underlying contracts, partially offset by lower demand due to the COVID-19 pandemic.
Total pipeline throughputs were 4.7 million barrels per day (bpd) in the fourth quarter, a decrease of 8% versus the same quarter of 2019. The average tariff rate was $0.90 per barrel for the quarter, consistent with the same quarter of 2019. Terminal throughput was 2.6 million bpd for the quarter, a decrease of 21% versus the same quarter of 2019.
Gathering & Processing
G&P segment income from operations for the fourth quarter of 2020 increased by $1.3 billion while segment adjusted EBITDA for the fourth quarter of 2020 increased by $5 million. Both results are compared to the same period in 2019. Fourth-quarter 2019 income from operations results include non-cash impairment charges of $1.2 billion primarily related to goodwill associated with western U.S. G&P businesses. EBITDA for the current quarter was primarily driven by lower operating costs partially offset by production curtailments and shut-ins. In the fourth quarter of 2020:
In the Marcellus and Utica:
Strategic Update
MPLX announced a 2021 growth capital outlook of $800 million focused on projects expected to deliver the highest returns and support the generation of excess cash flow. The company repurchased $33 million of common units held by the public in the fourth quarter of 2020.
In line with previously announced efforts around portfolio optimization, the company intends to close the sale of its Javelina plant in Corpus Christi, Texas, in early 2021. MPLX remains committed to portfolio optimization, focusing on the assets that have long-term strategic value to the company.
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, continues to progress, with segments and assets expected to come online throughout 2021. The 36-inch diameter pipeline, of which 100% of the contractible capacity is committed with minimum volume commitments (MVCs), will originate in the Permian Basin and have destination points in the Houston market, including Marathon Petroleum Corporation's (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. Whistler is more than 90% committed with MVCs.
MPLX, WhiteWater Midstream (WWM), and West Texas Gas, Inc. (WTG) through a joint venture (JV) continue to progress a solution for natural gas liquids takeaway capacity from MPLX and WTG gas processing plants to Sweeny, Texas. The JV utilizes existing infrastructure with limited new construction and is a capital-efficient solution to support producer customers.
In the G&P segment, during the quarter WWM and MPLX announced the substantial completion of a 1.8 bcf/d expansion of their joint venture Agua Blanca pipeline system. The Agua Blanca system is connected to almost 20 gas processing sites in the Delaware Basin. The system is anticipated to be brought into full service in early 2021.
Financial Position and Liquidity
As of Dec. 31, 2020, MPLX had $15 million in cash, $3.3 billion available through its bank revolving credit facility expiring in July 2024, and $1.5 billion available through its intercompany loan agreement with MPC. The company's leverage ratio was 3.9x at Dec. 31, 2020.
On Jan.15, 2021, MPLX redeemed all of its $750 million outstanding aggregate principal amount of 5.250% senior notes due Jan. 15, 2025.
MPLX remains committed to maintaining an investment-grade credit profile.
Conference Call
At 9:30 a.m. EST 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 www.mplx.com. 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 www.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 Contact: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Taryn Erie, Manager, Investor Relations
Media Contact: (419) 421-3312
Jamal Kheiry, Manager, Communications
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; consolidated debt to last twelve months pro forma adjusted EBITDA, which we refer to as our leverage ratio; distributable cash flow (DCF); distribution coverage ratio; and free cash flow (FCF) and excess/deficit cash flow. The amount of adjusted EBITDA and DCF generated is considered by the board of directors of our general partner in approving the Partnership's cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) provision/benefit for income taxes; (iii) amortization of deferred financing costs; (iv) gain/loss on extinguishment of debt; (v) non-cash equity-based compensation; (vi) impairment expense; (vii) net interest and other financial costs; (viii) income/loss from equity method investments; (ix) distributions and adjustments related to equity method investments; (x) unrealized derivative gains/losses; (xi) acquisition costs; (xii) noncontrolling interest and (xiii) 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 adjustments as deemed necessary.
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.
FCF and excess/deficit cash flow are financial performance measures used by management in the allocation of capital and to assess financial performance. We believe that unitholders may use this metric to analyze our ability to manage leverage and return capital. We define FCF as net cash provided by operating activities adjusted for (i) net cash used in investing activities; (ii) contributions from MPC; (iii) contributions from noncontrolling interests and (iv) distributions to noncontrolling interests. We define excess/deficit cash flow as FCF adjusted for distributions to common and preferred 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: the magnitude and duration of the COVID-19 pandemic and its effects, including travel restrictions, business and school closures, increased remote work, stay at home orders and other actions taken by individuals, government and the private sector to stem the spread of the virus, and the adverse impact thereof on our business, financial condition, results of operations and cash flows, including, but not limited to, our growth, operating costs, labor availability, logistical capabilities, customer demand for our services and industry demand generally, cash position, taxes, the price of our securities and trading markets with respect thereto, our ability to access capital markets, and the global economy and financial markets generally; the ability to reduce capital and operating expenses; the risk of further impairments; 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 Marathon Petroleum Corporation's (MPC) 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 and to effect any common unit repurchases; 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 as a result of the COVID-19 pandemic (including any related government policies and actions), other infectious disease outbreaks, natural hazards, extreme weather events or otherwise; general economic, political or regulatory developments, including changes in governmental policies relating to refined petroleum products, crude oil, natural gas or NGLs, regulation or taxation and other economic and political developments (including those caused by public health issues and outbreaks); non-payment or non-performance by our producer and other customers; 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, 2019, and in Forms 10-Q and other filings, 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 but are not limited to: the magnitude and duration of the COVID-19 pandemic and its effects, including travel restrictions, business and school closures, increased remote work, stay at home orders and other actions taken by individuals, government and the private sector to stem the spread of the virus, and the adverse impact thereof on the business, financial condition, results of operations and cash flows, including, but not limited to, growth, operating costs, labor availability, logistical capabilities, customer demand for products and industry demand generally, margins, inventory value, cash position, taxes, the price of securities and trading markets with respect thereto, the ability to access capital markets, and the global economy and financial markets generally; the ability to reduce capital and operating expenses; with respect to the planned sale of Speedway, the ability to successfully complete the sale within the expected timeframe, on the expected terms, or at all, based on numerous factors, including the failure to satisfy any of the conditions to the consummation of the planned transaction (including obtaining certain governmental or regulatory approvals on the proposed terms and schedule), the occurrence of any event, change or other circumstance that could give rise to the termination of the planned transaction; MPC's ability to utilize the proceeds as anticipated; the risk that the dissynergy costs, costs of restructuring transactions and other costs incurred in connection with the planned transaction will exceed our estimates; and our ability to capture value and realize the other expected benefits from the associated ongoing supply relationship following consummation of the planned sale; the risk that the cost savings and any other synergies from MPC's acquisitions may not be fully realized or may take longer to realize than expected; 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, 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, including the potential conversion of MPC's Martinez Refinery to a renewable diesel facility; the receipt of relevant third party and/or regulatory approvals; the reliability of processing units and other equipment; the successful realization of 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, complete announced capital projects and to effect any share repurchases or to maintain or increase the dividend; the effect of restructuring or reorganization of business components, including those undertaken in connection with the planned sale of Speedway and workforce reduction; the potential effects of judicial or other proceedings, including remedial actions involving removal and reclamation obligations under environmental regulations, 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 as a result of the COVID-19 pandemic (including any related government policies and actions), other infectious disease outbreaks, natural hazards, extreme weather events or otherwise; general economic, political or regulatory developments, including changes in governmental policies relating to refined petroleum products, crude oil, natural gas or NGLs, regulation or taxation and other economic and political developments (including those caused by public health issues and outbreaks); non-payment or non-performance by producer and other customers; compliance with federal and state environmental, economic, health and safety, energy and other policies, permitting and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or enforcement actions initiated thereunder; the 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, 2019, and in Forms 10-Q and other filings, 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. Any forward-looking statements speak only as of the date of the applicable communication and 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, Forms 10-Q and other SEC filings are available on the SEC's website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of MPC's Form 10-K, Forms 10-Q and other SEC filings are available on the SEC's 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 | Twelve Months Ended December 31 | |||||||||||||
(In millions, except per unit data) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Revenues and other income: | |||||||||||||||
Operating revenue | $ | 955 | $ | 1,014 | $ | 3,586 | $ | 3,832 | |||||||
Operating revenue - related parties | 1,154 | 1,231 | 4,660 | 4,793 | |||||||||||
Income (loss) from equity method investments | 76 | 35 | (936) | 290 | |||||||||||
Other income | 64 | 36 | 259 | 126 | |||||||||||
Total revenues and other income | 2,249 | 2,316 | 7,569 | 9,041 | |||||||||||
Costs and expenses: | |||||||||||||||
Operating expenses | 519 | 625 | 2,000 | 2,316 | |||||||||||
Operating expenses - related parties | 304 | 378 | 1,276 | 1,396 | |||||||||||
Depreciation and amortization | 385 | 338 | 1,377 | 1,254 | |||||||||||
Impairment expense | — | 1,197 | 2,165 | 1,197 | |||||||||||
General and administrative expenses | 89 | 95 | 378 | 388 | |||||||||||
Restructuring expenses | 1 | — | 37 | — | |||||||||||
Other taxes | 31 | 29 | 125 | 113 | |||||||||||
Total costs and expenses | 1,329 | 2,662 | 7,358 | 6,664 | |||||||||||
Income (loss) from operations | 920 | (346) | 211 | 2,377 | |||||||||||
Interest and other financial costs | 219 | 229 | 896 | 915 | |||||||||||
Income (loss) before income taxes | 701 | (575) | (685) | 1,462 | |||||||||||
Provision (benefit) for income taxes | 1 | (2) | 2 | — | |||||||||||
Net income (loss) | 700 | (573) | (687) | 1,462 | |||||||||||
Less: Net income attributable to noncontrolling interests | 9 | 8 | 33 | 28 | |||||||||||
Less: Net income attributable to Predecessor | — | — | — | 401 | |||||||||||
Net income (loss) attributable to MPLX LP | 691 | (581) | (720) | 1,033 | |||||||||||
Less: Series A preferred unit distributions | 20 | 20 | 81 | 81 | |||||||||||
Less: Series B preferred unit distributions | 10 | 10 | 41 | 17 | |||||||||||
Limited partners' interest in net income (loss) attributable to MPLX LP | $ | 661 | $ | (611) | $ | (842) | $ | 935 | |||||||
Per Unit Data | |||||||||||||||
Net income (loss) attributable to MPLX LP per limited partner unit: | |||||||||||||||
Common - basic | $ | 0.63 | $ | (0.58) | $ | (0.80) | $ | 1.00 | |||||||
Common - diluted | $ | 0.63 | $ | (0.58) | $ | (0.80) | $ | 1.00 | |||||||
Weighted average limited partner units outstanding: | |||||||||||||||
Common units – basic | 1,040 | 1,058 | 1,051 | 906 | |||||||||||
Common units – diluted | 1,040 | 1,058 | 1,051 | 907 | |||||||||||
Select Financial Statistics (unaudited) | Three Months Ended Dec. 31 | Twelve Months Ended December 31 | ||||||||||||||
(In millions, except ratio data) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Common unit distributions declared by MPLX | ||||||||||||||||
Common units (LP) - public(a) | $ | 269 | $ | 270 | $ | 1,079 | $ | 988 | ||||||||
Common units - MPC(a) | 445 | 446 | 1,793 | 1,647 | ||||||||||||
Total GP and LP distribution declared | 714 | 716 | 2,872 | 2,635 | ||||||||||||
Preferred unit distributions(b) | ||||||||||||||||
Series A preferred unit distributions(c) | 20 | 20 | 81 | 81 | ||||||||||||
Series B preferred unit distributions(d) | 10 | 11 | 41 | 42 | ||||||||||||
Total preferred unit distributions | 30 | 31 | 122 | 123 | ||||||||||||
Other Financial Data | ||||||||||||||||
Adjusted EBITDA attributable to MPLX LP(e)(f) | 1,355 | 1,319 | 5,211 | 5,104 | ||||||||||||
DCF attributable to GP and LP unitholders(e)(f) | $ | 1,125 | $ | 1,015 | $ | 4,200 | $ | 3,978 | ||||||||
Distribution coverage ratio(g) | 1.58x | 1.42x | 1.46x | 1.51x | ||||||||||||
Cash Flow Data | ||||||||||||||||
Net cash flow provided by (used in): | ||||||||||||||||
Operating activities | $ | 1,185 | $ | 1,092 | $ | 4,521 | $ | 4,082 | ||||||||
Investing activities | (202) | (874) | (1,262) | (3,063) | ||||||||||||
Financing activities | $ | (996) | $ | (244) | $ | (3,259) | $ | (1,089) | ||||||||
(a) | The distribution on common units for the three and twelve months ended Dec. 31, 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) | 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 Feb. 15th and Aug. 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. |
(c) | 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. |
(d) | Series B preferred unitholders are entitled to receive a fixed distribution of $68.75 per unit, per annum, payable semi-annually in arrears on Feb. 15 and Aug. 15 or the first business day thereafter. |
(e) | Non-GAAP measure. See reconciliation below. |
(f) | Includes predecessor EBITDA and DCF that is attributable to the period prior to the acquisition date of July 30, 2019. For the twelve months ended Dec. 31, 2019, adjusted EBITDA attributable to MPLX LP excluding predecessor results was $4.3 billion. |
(g) | DCF attributable to GP and LP unitholders (including DCF attributable to predecessor) divided by total GP and LP distribution declared. For the twelve months ended Dec. 31, 2019, DCF attributable to predecessor has been included with no corresponding distribution being declared by MPLX 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) | December 31, 2020 | December 31, | |||||
Cash and cash equivalents | $ | 15 | $ | 15 | |||
Total assets | 36,414 | 40,430 | |||||
Total long-term debt(a) | 20,139 | 20,307 | |||||
Redeemable preferred units | 968 | 968 | |||||
Total equity | $ | 13,017 | $ | 16,613 | |||
Consolidated total debt to adjusted EBITDA(b) | 3.9x | 4.1x | |||||
Partnership units outstanding: | |||||||
MPC-held common units | 647 | 666 | |||||
Public common units | 391 | 392 | |||||
(a) | Outstanding intercompany borrowings were zero as of Dec. 31, 2020, and $594 million as of Dec. 31, 2019. Includes unamortized debt issuance costs, unamortized discount/premium and long-term debt due within one year. |
(b) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. Face value total debt includes approximately $397 million and $406 million of unamortized discount and debt issuance costs as of Dec. 31, 2020, and Dec. 31, 2019, respectively. |
Operating Statistics (unaudited)(a) | Three Months Ended Dec. 31 | Twelve Months Ended December 31 | |||||||||||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||
Logistics and Storage | |||||||||||||||||||||
Pipeline throughput (mbpd) | |||||||||||||||||||||
Crude oil pipelines | 2,970 | 3,196 | (7) | % | 2,998 | 3,228 | (7) | % | |||||||||||||
Product pipelines | 1,753 | 1,923 | (9) | % | 1,714 | 1,886 | (9) | % | |||||||||||||
Total pipelines | 4,723 | 5,119 | (8) | % | 4,712 | 5,114 | (8) | % | |||||||||||||
Average tariff rates ($ per barrel) | |||||||||||||||||||||
Crude oil pipelines | $ | 0.97 | $ | 0.97 | — | % | $ | 0.96 | $ | 0.94 | 2 | % | |||||||||
Product pipelines | 0.78 | 0.78 | — | % | 0.81 | 0.75 | 8 | % | |||||||||||||
Total pipelines | $ | 0.90 | $ | 0.90 | — | % | 0.91 | 0.87 | 5 | % | |||||||||||
Terminal throughput (mbpd) | 2,606 | 3,313 | (21) | % | 2,673 | 3,279 | (18) | % | |||||||||||||
Barges at period-end | 300 | 286 | 5 | % | 300 | 286 | 5 | % | |||||||||||||
Towboats at period-end | 23 | 23 | — | % | 23 | 23 | — | % | |||||||||||||
(a) | Statistics for the twelve months ended Dec. 31, 2019, are inclusive of predecessor operations. |
Gathering and Processing Operating Statistics (unaudited) - Consolidated(a) | Three Months Ended Dec. 31 | Twelve Months Ended Dec. 31 | |||||||||||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 1,281 | 1,329 | (4) | % | 1,349 | 1,287 | 5 | % | |||||||||||||
Utica Operations(b) | — | — | — | % | — | — | — | % | |||||||||||||
Subtotal | 1,281 | 1,329 | (4) | % | 1,349 | 1,287 | 5 | % | |||||||||||||
Southwest Operations | 1,385 | 1,651 | (16) | % | 1,430 | 1,625 | (12) | % | |||||||||||||
Bakken Operations | 136 | 158 | (14) | % | 137 | 151 | (9) | % | |||||||||||||
Rockies Operations | 476 | 602 | (21) | % | 511 | 630 | (19) | % | |||||||||||||
Total gathering throughput | 3,278 | 3,740 | (12) | % | 3,427 | 3,693 | (7) | % | |||||||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 4,259 | 4,136 | 3 | % | 4,198 | 4,192 | — | % | |||||||||||||
Utica Operations(b) | — | — | — | % | — | — | — | % | |||||||||||||
Subtotal | 4,259 | 4,136 | 3 | % | 4,198 | 4,192 | — | % | |||||||||||||
Southwest Operations | 1,448 | 1,690 | (14) | % | 1,471 | 1,629 | (10) | % | |||||||||||||
Southern Appalachian Operations | 231 | 244 | (5) | % | 231 | 244 | (5) | % | |||||||||||||
Bakken Operations | 135 | 158 | (15) | % | 136 | 151 | (10) | % | |||||||||||||
Rockies Operations | 471 | 564 | (16) | % | 502 | 572 | (12) | % | |||||||||||||
Total natural gas processed | 6,544 | 6,792 | (4) | % | 6,538 | 6,788 | (4) | % | |||||||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||||||
Marcellus Operations | 492 | 446 | 10 | % | 472 | 435 | 9 | % | |||||||||||||
Utica Operations(b) | — | — | — | % | — | — | — | % | |||||||||||||
Subtotal | 492 | 446 | 10 | % | 472 | 435 | 9 | % | |||||||||||||
Southwest Operations | 21 | 21 | — | % | 18 | 15 | 20 | % | |||||||||||||
Southern Appalachian Operations | 12 | 13 | (8) | % | 12 | 12 | — | % | |||||||||||||
Bakken Operations | 26 | 31 | (16) | % | 25 | 24 | 4 | % | |||||||||||||
Rockies Operations | 4 | 5 | (20) | % | 4 | 4 | — | % | |||||||||||||
Total C2 + NGLs fractionated | 555 | 516 | 8 | % | 531 | 490 | 8 | % | |||||||||||||
(a) | Includes operating data for entities that have been consolidated into the MPLX financial statements. Statistics for the twelve months ended Dec. 31, 2019, are inclusive of predecessor operations. |
(b) | The Utica region relates to operations for partnership-operated equity method investments and thus does not have any operating statistics from a consolidated perspective. See table below for details on Utica. |
Gathering and Processing Operating Statistics (unaudited) - Operated(a) | Three Months Ended Dec. 31 | Twelve Months Ended Dec. 31 | |||||||||||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 1,281 | 1,329 | (4) | % | 1,349 | 1,287 | 5 | % | |||||||||||||
Utica Operations | 1,753 | 2,241 | (22) | % | 1,818 | 2,200 | (17) | % | |||||||||||||
Subtotal | 3,034 | 3,570 | (15) | % | 3,167 | 3,487 | (9) | % | |||||||||||||
Southwest Operations | 1,459 | 1,658 | (12) | % | 1,483 | 1,628 | (9) | % | |||||||||||||
Bakken Operations | 136 | 158 | (14) | % | 137 | 151 | (9) | % | |||||||||||||
Rockies Operations | 636 | 806 | (21) | % | 688 | 828 | (17) | % | |||||||||||||
Total gathering throughput | 5,265 | 6,192 | (15) | % | 5,475 | 6,094 | (10) | % | |||||||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 5,769 | 5,339 | 8 | % | 5,629 | 5,248 | 7 | % | |||||||||||||
Utica Operations | 552 | 734 | (25) | % | 578 | 810 | (29) | % | |||||||||||||
Subtotal | 6,321 | 6,073 | 4 | % | 6,207 | 6,058 | 2 | % | |||||||||||||
Southwest Operations | 1,519 | 1,720 | (12) | % | 1,537 | 1,636 | (6) | % | |||||||||||||
Southern Appalachian Operations | 231 | 244 | (5) | % | 231 | 244 | (5) | % | |||||||||||||
Bakken Operations | 135 | 158 | (15) | % | 136 | 151 | (10) | % | |||||||||||||
Rockies Operations | 471 | 564 | (16) | % | 502 | 572 | (12) | % | |||||||||||||
Total natural gas processed | 8,677 | 8,759 | (1) | % | 8,613 | 8,661 | (1) | % | |||||||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||||||
Marcellus Operations | 492 | 446 | 10 | % | 472 | 435 | 9 | % | |||||||||||||
Utica Operations | 30 | 41 | (27) | % | 31 | 44 | (30) | % | |||||||||||||
Subtotal | 522 | 487 | 7 | % | 503 | 479 | 5 | % | |||||||||||||
Southwest Operations | 21 | 21 | — | % | 18 | 15 | 20 | % | |||||||||||||
Southern Appalachian Operations | 12 | 13 | (8) | % | 12 | 12 | — | % | |||||||||||||
Bakken Operations | 26 | 31 | (16) | % | 25 | 24 | 4 | % | |||||||||||||
Rockies Operations | 4 | 5 | (20) | % | 4 | 4 | — | % | |||||||||||||
Total C2 + NGLs fractionated | 585 | 557 | 5 | % | 562 | 534 | 5 | % | |||||||||||||
(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. Statistics for the twelve months ended Dec. 31, 2019 are inclusive of predecessor operations. |
Reconciliation of Segment Adjusted EBITDA to Net Income (unaudited) | Three Months Ended Dec. 31 | Twelve Months Ended Dec. 31 | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | $ | 884 | $ | 853 | $ | 3,488 | $ | 3,351 | |||||||
G&P segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | 471 | 466 | 1,723 | 1,753 | |||||||||||
Adjusted EBITDA attributable to MPLX LP (including predecessor results) | 1,355 | 1,319 | 5,211 | 5,104 | |||||||||||
Depreciation and amortization | (385) | (338) | (1,377) | (1,254) | |||||||||||
(Provision) benefit for income taxes | (1) | 2 | (2) | — | |||||||||||
Amortization of deferred financing costs | (17) | (13) | (61) | (42) | |||||||||||
Gain on extinguishment of debt | 5 | — | 19 | — | |||||||||||
Non-cash equity-based compensation | (2) | (5) | (14) | (22) | |||||||||||
Impairment expense | — | (1,197) | (2,165) | (1,197) | |||||||||||
Restructuring expenses | (1) | — | (37) | — | |||||||||||
Net interest and other financial costs | (207) | (216) | (854) | (873) | |||||||||||
Income (loss) from equity method investments(a) | 76 | 35 | (936) | 290 | |||||||||||
Distributions/adjustments related to equity method investments | (130) | (163) | (499) | (562) | |||||||||||
Unrealized derivative (losses) gains(b) | (2) | (6) | (3) | 1 | |||||||||||
Acquisition costs | — | — | — | (14) | |||||||||||
Other | (1) | — | (6) | (1) | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | 10 | 9 | 37 | 32 | |||||||||||
Net income (loss) | $ | 700 | $ | (573) | $ | (687) | $ | 1,462 | |||||||
(a) | Includes impairment charges of $1,264 million for the twelve months ended Dec. 31, 2020. |
(b) | 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 | Twelve Months Ended Dec. 31 | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
L&S segment income from operations | $ | 662 | $ | 677 | $ | 2,743 | $ | 2,752 | |||||||
Depreciation and amortization | 193 | 130 | 633 | 503 | |||||||||||
Restructuring expenses | 2 | — | 29 | — | |||||||||||
Income from equity method investments | (28) | (41) | (154) | (200) | |||||||||||
Distributions/adjustments related to equity method investments | 52 | 83 | 221 | 267 | |||||||||||
Acquisition costs | — | — | — | 14 | |||||||||||
Non-cash equity-based compensation | 2 | 4 | 10 | 14 | |||||||||||
Other | 1 | — | 6 | 1 | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | 884 | 853 | 3,488 | 3,351 | |||||||||||
L&S predecessor segment adjusted EBITDA attributable to MPLX LP | — | — | — | (603) | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 884 | $ | 853 | $ | 3,488 | $ | 2,748 | |||||||
G&P Reconciliation of Segment Income from Operations to Segment Adjusted EBITDA (unaudited) | Three Months Ended Dec. 31 | Twelve Months Ended Dec. 31 | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
G&P segment income (loss) from operations | $ | 258 | $ | (1,023) | $ | (2,532) | $ | (375) | |||||||
Depreciation and amortization | 192 | 208 | 744 | 751 | |||||||||||
Impairment expense | — | 1,197 | 2,165 | 1,197 | |||||||||||
Restructuring expenses | (1) | — | 8 | — | |||||||||||
(Income) loss from equity method investments | (48) | 6 | 1,090 | (90) | |||||||||||
Distributions/adjustments related to equity method investments | 78 | 80 | 278 | 295 | |||||||||||
Unrealized derivative losses (gains)(a) | 2 | 6 | 3 | (1) | |||||||||||
Non-cash equity-based compensation | — | 1 | 4 | 8 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interest | (10) | (9) | (37) | (32) | |||||||||||
G&P segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | 471 | 466 | 1,723 | 1,753 | |||||||||||
G&P predecessor segment adjusted EBITDA attributable to MPLX LP | — | — | — | (167) | |||||||||||
G&P segment adjusted EBITDA attributable to MPLX LP | $ | 471 | $ | 466 | $ | 1,723 | $ | 1,586 | |||||||
(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 | Twelve Months Ended Dec. 31 | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net income (loss) | $ | 700 | $ | (573) | $ | (687) | $ | 1,462 | |||||||
Provision for income taxes | 1 | (2) | 2 | — | |||||||||||
Amortization of deferred financing costs | 17 | 13 | 61 | 42 | |||||||||||
Gain on extinguishment of debt | (5) | — | (19) | — | |||||||||||
Net interest and other financial costs | 207 | 216 | 854 | 873 | |||||||||||
Income (loss) from operations | 920 | (346) | 211 | 2,377 | |||||||||||
Depreciation and amortization | 385 | 338 | 1,377 | 1,254 | |||||||||||
Non-cash equity-based compensation | 2 | 5 | 14 | 22 | |||||||||||
Impairment expense | — | 1,197 | 2,165 | 1,197 | |||||||||||
Restructuring expenses | 1 | — | 37 | — | |||||||||||
(Income) loss from equity method investments | (76) | (35) | 936 | (290) | |||||||||||
Distributions/adjustments related to equity method investments | 130 | 163 | 499 | 562 | |||||||||||
Unrealized derivative losses (gains)(a) | 2 | 6 | 3 | (1) | |||||||||||
Acquisition costs | — | — | — | 14 | |||||||||||
Other | 1 | — | 6 | 1 | |||||||||||
Adjusted EBITDA | 1,365 | 1,328 | 5,248 | 5,136 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | (10) | (9) | (37) | (32) | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | — | — | (770) | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 1,355 | 1,319 | 5,211 | 4,334 | |||||||||||
Deferred revenue impacts | 52 | 27 | 144 | 94 | |||||||||||
Net interest and other financial costs | (207) | (216) | (854) | (873) | |||||||||||
Maintenance capital expenditures | (53) | (88) | (161) | (262) | |||||||||||
Maintenance capital expenditures reimbursements | 15 | 19 | 46 | 53 | |||||||||||
Equity method investment capital expenditures paid out | (7) | (12) | (23) | (28) | |||||||||||
Restructuring expenses | (1) | — | (37) | — | |||||||||||
Other | 1 | (4) | 1 | 12 | |||||||||||
Portion of DCF adjustments attributable to predecessor(b) | — | — | — | 159 | |||||||||||
DCF attributable to MPLX LP | 1,155 | 1,045 | 4,327 | 3,489 | |||||||||||
Preferred unit distributions(c) | (30) | (30) | (127) | (122) | |||||||||||
DCF attributable to GP and LP unitholders (excluding predecessor results) | 1,125 | 1,015 | 4,200 | 3,367 | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | — | — | 770 | |||||||||||
Portion of DCF adjustments attributable to predecessor(b) | — | — | — | (159) | |||||||||||
DCF attributable to GP and LP unitholders (including predecessor results) | $ | 1,125 | $ | 1,015 | $ | 4,200 | $ | 3,978 | |||||||
(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 preferred units, Series B preferred units and TexNew Mex 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 preferred units, Series B preferred units and TexNew Mex units are not available to common unitholders. |
Reconciliation of Net Income to LTM Pro forma adjusted EBITDA (unaudited) | Three Months Ended December 31 | ||||||
(In millions) | 2020 | 2019 | |||||
LTM Net (loss) income | $ | (687) | $ | 1,462 | |||
LTM Net income to adjusted EBITDA adjustments | 5,898 | 2,872 | |||||
LTM Adjusted EBITDA attributable to MPLX LP | 5,211 | 4,334 | |||||
LTM Pro forma/Predecessor adjustments for acquisitions | — | 770 | |||||
LTM Pro forma adjusted EBITDA | 5,211 | 5,104 | |||||
Consolidated debt(a) | $ | 20,536 | $ | 20,713 | |||
Consolidated debt to adjusted EBITDA(b) | 3.9x | 4.1x | |||||
(a) | Consolidated debt excludes unamortized debt issuance costs and unamortized discount/premium. Consolidated debt includes long-term debt due within one year and borrowing under the loan agreement with MPC. |
(b) | 2019 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 | Twelve Months Ended Dec. 31 | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net cash provided by operating activities | $ | 1,185 | $ | 1,092 | $ | 4,521 | $ | 4,082 | |||||||
Changes in working capital items | (50) | (26) | (204) | 108 | |||||||||||
All other, net | 3 | 14 | (3) | (9) | |||||||||||
Non-cash equity-based compensation | 2 | 5 | 14 | 22 | |||||||||||
Net (loss) gain on disposal of assets | (3) | 3 | (4) | 6 | |||||||||||
Restructuring expenses | 1 | — | 37 | — | |||||||||||
Current income taxes | 1 | 1 | 3 | 2 | |||||||||||
Gain on extinguishment of debt | (5) | — | (19) | — | |||||||||||
Net interest and other financial costs | 207 | 216 | 854 | 873 | |||||||||||
Asset retirement expenditures | — | — | — | 1 | |||||||||||
Unrealized derivative losses (gains)(a) | 2 | 6 | 3 | (1) | |||||||||||
Acquisition costs | — | — | — | 14 | |||||||||||
Other adjustments related to equity method investments | 21 | 17 | 40 | 37 | |||||||||||
Other | 1 | — | 6 | 1 | |||||||||||
Adjusted EBITDA | 1,365 | 1,328 | 5,248 | 5,136 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | (10) | (9) | (37) | (32) | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | — | — | (770) | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 1,355 | 1,319 | 5,211 | 4,334 | |||||||||||
Deferred revenue impacts | 52 | 27 | 144 | 94 | |||||||||||
Net interest and other financial costs | (207) | (216) | (854) | (873) | |||||||||||
Maintenance capital expenditures | (53) | (88) | (161) | (262) | |||||||||||
Maintenance capital expenditures reimbursements | 15 | 19 | 46 | 53 | |||||||||||
Equity method investment capital expenditures paid out | (7) | (12) | (23) | (28) | |||||||||||
Restructuring expenses | (1) | — | (37) | — | |||||||||||
Other | 1 | (4) | 1 | 12 | |||||||||||
Portion of DCF adjustments attributable to predecessor(b) | — | — | — | 159 | |||||||||||
DCF attributable to MPLX LP | 1,155 | 1,045 | 4,327 | 3,489 | |||||||||||
Preferred unit distributions(c) | (30) | (30) | (127) | (122) | |||||||||||
DCF attributable to GP and LP unitholders (excluding predecessor results) | 1,125 | 1,015 | 4,200 | 3,367 | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | — | — | 770 | |||||||||||
Portion of DCF adjustments attributable to predecessor(b) | — | — | — | (159) | |||||||||||
DCF attributable to GP and LP unitholders (including predecessor results) | $ | 1,125 | $ | 1,015 | $ | 4,200 | $ | 3,978 | |||||||
(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 preferred units, Series B preferred units and TexNew Mex 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 preferred units, Series B preferred units and TexNew Mex units are not available to common unitholders. |
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (unaudited) | Three Months Ended Dec. 31 | Twelve Months Ended Dec. 31 | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net cash provided by operating activities(a) | $ | 1,185 | $ | 1,092 | $ | 4,521 | $ | 4,082 | |||||||
Adjustments to reconcile net cash provided by operating activities to free cash flow | |||||||||||||||
Net cash used in investing activities | (202) | (874) | (1,262) | (3,063) | |||||||||||
Contributions from MPC | 16 | 22 | 50 | 74 | |||||||||||
Contributions from noncontrolling interests | — | 1 | — | 95 | |||||||||||
Distributions to noncontrolling interests | (11) | (10) | (37) | (30) | |||||||||||
Free cash flow | 988 | 231 | 3,272 | 1,158 | |||||||||||
Distributions to common and preferred unitholders(b) | (742) | (724) | (3,006) | (3,039) | |||||||||||
Excess (deficit) cash flow(c) | $ | 246 | $ | (493) | $ | 266 | $ | (1,881) | |||||||
(a) | The three and twelve months ended Dec. 31, 2020, include a decrease in working capital of $50 million and $204 million, respectively. The three and twelve months ended Dec. 31, 2019, include a decrease in working capital of $26 million and an increase in working capital of $108 million, respectively. |
(b) | For the twelve months ended Dec. 31, 2019, this amount includes distributions to common unitholders and Series B unitholders attributable to the Predecessor. |
(c) | In the fourth quarter of 2020, $33 million of excess cash flow generated was used to repurchase common units held by the public. |
Capital Expenditures (unaudited) | Three Months Ended Dec. 31 | Twelve Months Ended Dec. 31 | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Capital Expenditures: | |||||||||||||||
Growth capital expenditures | $ | 101 | $ | 522 | $ | 778 | $ | 2,000 | |||||||
Growth capital reimbursements | (2) | (4) | (4) | (21) | |||||||||||
Investments in unconsolidated affiliates | 22 | 219 | 266 | 713 | |||||||||||
Return of capital | (11) | (16) | (123) | (18) | |||||||||||
Contributions from noncontrolling interests | — | (1) | — | (95) | |||||||||||
Capitalized interest | (8) | (15) | (39) | (51) | |||||||||||
Total growth capital expenditures | 102 | 705 | 878 | 2,528 | |||||||||||
Maintenance capital expenditures | 53 | 88 | 161 | 262 | |||||||||||
Maintenance capital reimbursements | (15) | (19) | (46) | (53) | |||||||||||
Total maintenance capital expenditures | 38 | 69 | 115 | 209 | |||||||||||
Total growth and maintenance capital expenditures | 140 | 774 | 993 | 2,737 | |||||||||||
Investments in unconsolidated affiliates(a) | (22) | (219) | (266) | (713) | |||||||||||
Return of capital(a) | 11 | 16 | 123 | 18 | |||||||||||
Contributions from noncontrolling interests(b) | — | 1 | — | 95 | |||||||||||
Growth and maintenance capital reimbursements(c) | 17 | 23 | 50 | 74 | |||||||||||
Decrease in capital accruals | 47 | 78 | 244 | 146 | |||||||||||
Capitalized interest | 8 | 15 | 39 | 51 | |||||||||||
Additions to property, plant and equipment, net(a) | $ | 201 | $ | 688 | $ | 1,183 | $ | 2,408 | |||||||
(a) | Investments in unconsolidated affiliate, return of capital and additions to property, plant and equipment, net are shown as separate lines within Investing activities in the Consolidated Statements of Cash Flows. |
(b) | Contributions from noncontrolling interests are shown as separate line within financing activities in the Consolidated Statements of Cash Flows. |
(c) | Growth and maintenance capital reimbursements are included in the contributions from MPC line within financing activities in the Consolidated Statements of Cash Flows. |
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SOURCE MPLX LP
FINDLAY, Ohio, Jan. 28, 2021 /PRNewswire/ -- The board of directors of the general partner of MPLX LP (NYSE: MPLX) has declared a quarterly cash distribution of $0.6875 per common unit for the fourth quarter of 2020, or $2.75 on an annualized basis. The distribution will be paid on Feb. 12, 2021, to common unitholders of record as of Feb. 8, 2021.
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100 percent of MPLX's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MPLX's distributions to non-United States investors are subject to federal income tax withholding at the highest applicable effective tax rate.
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
Taryn Erie, Manager, Investor Relations
Media Contact:
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
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SOURCE MPLX LP
FINDLAY, Ohio, Jan. 26, 2021 /PRNewswire/ -- MPLX LP (NYSE: MPLX) has adjusted the time of its conference call with analysts on Tuesday, Feb. 2, 2021, to begin at 9:30 a.m. EST. During the call, MPLX executives will discuss 2020 fourth-quarter and full-year financial results, which will be released earlier that day, and provide an update on company operations.
Interested parties may listen to the conference call by visiting MPLX's website at www.mplx.com. 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 www.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
Taryn Erie, Manager, Investor Relations
Media Contact:
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
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SOURCE MPLX LP
FINDLAY, Ohio, Dec. 29, 2020 /PRNewswire/ -- MPLX LP (NYSE: MPLX) today announced the redemption of all of the $750 million outstanding aggregate principal amount of MPLX's 5.250% senior notes due Jan. 15, 2025, including the approximately $42 million in aggregate principal amount of senior notes issued by Andeavor Logistics LP and Tesoro Logistics Finance Corp.
The 2025 senior notes will be redeemed on Jan. 15, 2021, at a price equal to 102.625% of the principal amount thereof. The regular semiannual interest payment due on the 2025 senior notes on Jan. 15, 2021, will be paid in the usual manner to holders of record at the close of business on Jan. 1, 2021.
This news release is for informational purposes only and is neither an offer to buy nor a solicitation to sell any of the 2025 senior notes. The foregoing does not constitute a notice of redemption under the indenture governing the 2025 senior notes and is qualified in its entirety by the redemption notices distributed to the holders of the 2025 senior notes under such indenture.
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 Contact: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Taryn Erie, Manager, Investor Relations
Media Contact: (419) 421-3312
Jamal Kheiry, Manager, Communications
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SOURCE MPLX LP
FINDLAY, Ohio, Nov. 11, 2020 /PRNewswire/ -- WhiteWater Midstream (WWM) and MPLX LP (NYSE: MPLX) today announced the substantial completion of a 1.8 billion cubic-feet-per-day (Bcf/d) expansion of their joint venture Agua Blanca pipeline system. Testing and commissioning of the expansion will begin this month, and the system is anticipated to be brought into full service in early 2021.
The Agua Blanca system is connected to almost 20 gas processing sites in the Delaware Basin and is currently transporting gas produced in Culberson, Loving, Reeves, Pecos, Winkler and Ward counties in Texas, and Eddy and Lea counties in New Mexico, to the Waha Hub. The Agua Blanca expansion includes a 42-inch diameter trunk line that more than doubles system capacity to over 3 Bcf/d while providing significant incremental takeaway capacity for plants servicing Texas and New Mexico gas producers.
"We are excited to bring this expansion into service ahead of schedule while continuing to provide reliable and transparent transportation services to producers and processors in Texas and New Mexico," said WhiteWater Chief Executive Officer Christer Rundlof. "WWM remains committed to developing premier Permian basin residue assets as markets normalize and growth resumes."
WhiteWater Midstream's investment in the Agua Blanca joint venture is led by First Infrastructure Capital. Inquiries regarding the Agua Blanca Expansion should be directed to ab@wwm-llc.com.
About WhiteWater Midstream
WhiteWater Midstream is a management owned, Austin based midstream company. WhiteWater Midstream is partnered with multiple private equity funds including but not limited to Ridgemont Equity Partners, Denham Capital Management, First Infrastructure Capital and the Ontario Power Generation Inc. Pension Plan. Since inception, WhiteWater has reached final investment decision on ~$3 billion in greenfield development projects. For more information about WhiteWater Midstream, visit www.whitewatermidstream.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
About First Infrastructure Capital
First Infrastructure Capital Advisors, LLC is a Houston-based investment firm specializing in greenfield projects and companies operating in the midstream, downstream, electric power, telecommunications, and renewable energy industries. First Infrastructure Capital Advisors, LLC is an SEC-registered investment adviser, which manages funds affiliated with First Infrastructure Capital, L.P. For more information about First Infrastructure Capital, visit www.firstinfracap.com.
Investor Relations Contacts:
WhiteWater Midstream
Bryan Willoughby
Director, Business Development
(512) 953-2100
www.whitewatermidstream.com
MPLX
Kristina Kazarian
Vice President, Investor Relations
(419) 421-2071
This press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements relate to, among other things, statements with respect to forecasts regarding capacity, rates, incremental investment, market conditions and timing for becoming operational for the opportunities discussed above. You can identify forward-looking statements by words such as "anticipate," "design," "estimate," "expect," "forecast," "plan," "project," "potential," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the companies and are difficult to predict. Factors that could impact the opportunities described above are set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2019, and Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission (SEC). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPLX's Forms 10-K and 10-Q could also have material adverse effects on forward-looking statements. Copies of MPLX's Forms 10-K and 10-Q are available on the SEC's website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.
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SOURCE MPLX LP
FINDLAY, Ohio, Nov. 2, 2020 /PRNewswire/ --
MPLX LP (NYSE: MPLX) today reported third-quarter 2020 net income attributable to MPLX of $665 million, compared with $629 million for the third quarter of 2019. Third-quarter 2020 results include a charge of $36 million related to a reimbursement of expenses associated with Marathon Petroleum Corporation's (NYSE: MPC) involuntary workforce reduction plan. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) attributable to MPLX was $1.3 billion, compared with $1.3 billion in the third quarter of 2019.
The Logistics and Storage (L&S) segment reported segment income from operations of $677 million and adjusted EBITDA of $893 million for the quarter, down $36 million and up $44 million, respectively, versus the third quarter of last year. The Gathering and Processing (G&P) segment reported segment income from operations of $222 million and adjusted EBITDA of $442 million for the quarter, up $9 million and $18 million, respectively, versus the third quarter of last year.
During the quarter, MPLX generated $1.2 billion in net cash provided by operating activities and $1.1 billion of distributable cash flow. Distribution coverage was 1.44x for the third quarter of 2020. MPLX also announced a third-quarter 2020 distribution of $0.6875 per common unit, consistent with the prior quarter.
"Our performance during the third quarter highlights the resiliency and stability of our underlying businesses," said Michael J. Hennigan, chairman, president, and chief executive officer. "In addition to the proactive steps we took earlier this year to reduce capital spending and operating expenses, we took additional necessary steps to reduce our cost structure. The difficult decision to reduce our workforce was not made lightly, and we are committed to treating employees with integrity and respect.
"We continue to believe that we can generate stable EBITDA to support our goal of achieving positive free cash flow, after capital investments and distributions, for 2021, allowing us the financial flexibility to repurchase units or reduce debt. With this in mind, we have obtained board authorization to repurchase up to $1 billion of units."
Financial Highlights | |||||||||||||||||||
Three Months Ended Sept. 30 | Nine Months Ended September 30 | ||||||||||||||||||
(In millions, except per unit and ratio data) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
Net income (loss) attributable to MPLX(a) | $ | 665 | $ | 629 | $ | (1,411) | $ | 1,614 | |||||||||||
Adjusted net income attributable to MPLX(b) | N/A | 681 | N/A | 2,015 | |||||||||||||||
Adjusted EBITDA attributable to MPLX LP(c) | 1,335 | 1,273 | 3,856 | 3,785 | |||||||||||||||
Net cash provided by operating activities | 1,222 | 1,036 | 3,336 | 2,990 | |||||||||||||||
Distributable cash flow attributable to MPLX LP(c) | 1,067 | 1,027 | 3,172 | 3,055 | |||||||||||||||
Distribution per common unit(d) | $ | 0.6875 | $ | 0.6775 | $ | 2.0625 | $ | 2.0025 | |||||||||||
Distribution coverage ratio(e) | 1.44x | 1.42x | 1.42x | 1.54x | |||||||||||||||
Consolidated debt to adjusted EBITDA(f) | 4.0x | 4.0x | N/A | N/A | |||||||||||||||
(a) | The nine months ended Sept. 30, 2020 includes impairments related to equity method investments of approximately $1.3 billion, |
(b) | Includes net income attributable to predecessor for the three and nine months ended Sept. 30, 2019. The predecessor period |
(c) | Non-GAAP measures calculated before distributions to preferred unitholders. See reconciliation below. Includes adjusted EBITDA |
(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 distributions |
(f) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. See reconciliation |
Segment Results (including predecessor) | |||||||||||||||
(In millions) | Three Months Ended Sept. 30 | Nine Months Ended September 30 | |||||||||||||
Segment income (loss) from operations (unaudited) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Logistics and Storage | $ | 677 | $ | 713 | $ | 2,081 | $ | 2,075 | |||||||
Gathering and Processing | 222 | 213 | (2,790) | 648 | |||||||||||
Segment adjusted EBITDA attributable to MPLX LP (unaudited) | |||||||||||||||
Logistics and Storage | 893 | 849 | 2,604 | 2,498 | |||||||||||
Gathering and Processing | $ | 442 | $ | 424 | $ | 1,252 | $ | 1,287 | |||||||
Logistics & Storage
L&S segment income from operations for the third quarter of 2020 decreased by $36 million and includes a charge of $27 million related to a reimbursement of expenses associated with MPC's involuntary workforce reduction plan. Segment adjusted EBITDA for the third quarter of 2020 increased by $44 million. Both results are compared to the same period in 2019. Results for the quarter benefited from lower operating expenses, minimum volume commitments, and the completion of the Mt. Airy terminal and Utica butane expansion projects, and were partially offset by lower demand due to the COVID-19 pandemic.
Total pipeline throughputs were 4.7 million barrels per day in the third quarter, a decrease of 10% versus the same quarter of 2019. The average tariff rate was $0.93 per barrel for the quarter, an increase of 3% versus the same quarter of 2019. Terminal throughput was 2.7 million barrels per day for the quarter, a decrease of 18% versus the same quarter of 2019.
Gathering & Processing
G&P segment income from operations for the third quarter of 2020 increased by $9 million and includes a charge of $9 million related to a reimbursement of expenses associated with MPC's involuntary workforce reduction plan. Segment adjusted EBITDA for the third quarter of 2020 increased by $18 million. Both results are compared to the same period in 2019. Results for the quarter were primarily driven by higher volumes due to additional plants coming online, partially offset by production curtailments and shut-ins. In the third quarter of 2020:
In the Marcellus and Utica:
Strategic Update
MPLX remains on-track to achieve forecasted 2020 reductions to capital spending by over $700 million and annual operating expenses by approximately $200 million. Incremental to these reductions, MPC implemented a workforce reduction plan to reduce cost structure across the combined enterprise.
The board of directors of MPLX's general partner has authorized a unit repurchase program for the repurchase of up to $1 billion of the outstanding publicly traded common units. MPLX may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block transactions, tender offers, accelerated unit repurchases, or open market solicitations for units, some of which may be effected through Rule 10b5-1 plans. The timing and amount of repurchases, if any, will depend upon several factors, including market and business conditions, and repurchases may be initiated, suspended or discontinued at any time. The repurchase authorization has no expiration date.
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, with segments and assets expected to come on line throughout 2021. The main segment of the pipeline system started transporting Permian crude oil and condensate from Midland, Texas, to Houston in October. The 36-inch diameter pipeline, of which 100% of the contractible capacity is committed with minimum volume commitments, 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. Whistler is more than 90% committed with minimum volume commitments.
In August, MPLX, WhiteWater Midstream, and West Texas Gas, Inc. (WTG) announced the formation of a joint venture (JV) to provide natural gas liquids takeaway capacity from MPLX and WTG gas processing plants to Sweeny, Texas. The JV utilizes existing infrastructure with limited new construction and is a capital-efficient solution to support producer customers.
Financial Position and Liquidity
As of Sept. 30, 2020, MPLX had $28 million in cash, $3.4 billion available through its bank revolving credit facility expiring in July 2024 and $1.5 billion available through its intercompany loan agreement with MPC. The company's leverage ratio was 4.0x at Sept. 30, 2020.
During the quarter, MPLX issued $3.0 billion aggregate principal amount of unsecured senior notes in an underwritten public offering consisting of $1.5 billion aggregate principal amount of 1.750% senior notes due 2026 and $1.5 billion aggregate principal amount of 2.650% senior notes due in 2030.
During the third quarter, MPLX used a portion of the net proceeds from this offering to repay or redeem the $1.0 billion term loan borrowing maturing in 2021, the $1.0 billion aggregate principal amount of its floating rate senior notes due 2021, and the $450 million aggregate principal amount of its 6.375% senior notes due 2024. MPLX also used a portion of the net proceeds to redeem all of the $300 million aggregate principal amount of its 6.250% senior notes due 2022, in October 2020. The remainder of the proceeds from the notes offering have or will be used for general partnership purposes.
MPLX remains committed to maintaining an investment-grade credit profile.
Conference Call
At 11 a.m. EST 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 www.mplx.com. 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 www.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 Contact: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Taryn Erie, Manager, Investor Relations
Media Contact: (419) 421-3312
Jamal Kheiry, Manager, Communications
Non-GAAP references
In addition to our financial information presented in accordance with U.S. generally accepted accounting principles (GAAP), management utilizes additional non-GAAP measures to facilitate comparisons of past performance and future periods. This press release and supporting schedules include the non-GAAP measures adjusted EBITDA and consolidated debt to last twelve months pro forma adjusted EBITDA, which we refer to as our leverage ratio, distributable cash flow (DCF) and distribution coverage ratio. The amount of adjusted EBITDA and DCF generated is considered by the board of directors of our general partner in approving the Partnership's cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) provision for income taxes; (iii) amortization of deferred financing costs; (iv) non-cash equity-based compensation; (v) net interest and other financial costs; (vi) income from equity method investments; (vii) distributions and adjustments related to equity method investments; (viii) unrealized derivative gains and losses; (ix) acquisition costs; (x) noncontrolling interest and (xi) other adjustments as deemed necessary. In general, we define DCF as adjusted EBITDA adjusted for (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items.
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record the realized gain or loss of the contract.
Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures.
DCF is a financial performance measure used by management as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders.
Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between the partnership's financial operating performance and cash distribution capability. We define the distribution coverage ratio as the ratio of DCF attributable to GP and LP unitholders to total GP and LP distributions declared.
Leverage ratio is a liquidity measure used by management, industry analysts, investors, lenders and rating agencies to analyze our ability to incur and service debt and fund capital expenditures.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX). These forward-looking statements relate to, among other things, MPLX's 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: the effects of the recent outbreak of COVID-19, including any related government policies and actions, and the adverse impact thereof on our business, financial condition, results of operations and cash flows, including, but not limited to, our growth, operating costs, labor availability, logistical capabilities, customer demand for our services and industry demand generally, cash position, taxes, the price of our securities and trading markets with respect thereto, our ability to access capital markets, and the global economy and financial markets generally; the ability to reduce capital and operating expenses; the risk of further impairments; the risk that anticipated opportunities and any other synergies from or benefits of the Andeavor Logistics LP (ANDX) 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 Marathon Petroleum Corporation's (MPC) 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 and to effect any common unit repurchases; 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 as a result of the COVID-19 pandemic (including any related government policies and actions), other infectious disease outbreaks, natural hazards, extreme weather events or otherwise; non-payment or non-performance by our producer and other customers; 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, 2019, and in Forms 10-Q and other filings, 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 but are not limited to: the effects of the recent outbreak of COVID-19, including any related government policies and actions, and the adverse impact thereof on the business, financial condition, results of operations and cash flows, including, but not limited to, growth, operating costs, labor availability, logistical capabilities, customer demand for products and industry demand generally, margins, inventory value, cash position, taxes, the price of securities and trading markets with respect thereto, the ability to access capital markets, and the global economy and financial markets generally; the effects of the recent outbreak of COVID-19, and the current economic environment generally, on working capital, cash flows and liquidity, which can be significantly affected by decreases in commodity prices; the ability to reduce capital and operating expenses; with respect to the proposed sale of Speedway, the ability to successfully complete the sale within the expected timeframe, on the expected terms, or at all, based on numerous factors, including the failure to satisfy any of the conditions to the consummation of the proposed transaction (including obtaining certain governmental or regulatory approvals on the proposed terms and schedule), the occurrence of any event, change or other circumstance that could give rise to the termination of the proposed transaction; MPC's ability to utilize the proceeds as anticipated; the risk that the dissynergy costs, costs of restructuring transactions and other costs incurred in connection with the proposed transaction will exceed our estimates; and our ability to capture value and realize the other expected benefits from the associated ongoing supply relationship following consummation of the proposed sale; the risk that the cost savings and any other synergies from MPC's acquisition of Andeavor and the ANDX acquisition may not be fully realized or may take longer to realize than expected, including whether the ANDX transaction will be accretive within the expected timeframe or at all; disruption from the Andeavor or ANDX transactions making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of Andeavor or ANDX, respectively; 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, 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, including the potential conversion of MPC's Martinez Refinery to a renewable diesel facility; the receipt of relevant third party and/or regulatory approvals; the reliability of processing units and other equipment; the successful realization of 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, complete announced capital projects and to effect any share repurchases or to maintain or increase the dividend; the effect of restructuring or reorganization of business components, including those undertaken in connection with the Speedway sale and workforce reduction; the potential effects of judicial or other proceedings, including remedial actions involving removal and reclamation obligations under environmental regulations, 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 as a result of the COVID-19 pandemic (including any related government policies and actions), other infectious disease outbreaks, natural hazards, extreme weather events or otherwise; general economic, political or regulatory developments, including changes in governmental policies relating to refined petroleum products, crude oil, natural gas or NGLs, regulation or taxation and other economic and political developments (including those caused by public health issues and outbreaks); non-payment or non-performance by producer and other customers; compliance with federal and state environmental, economic, health and safety, energy and other policies, permitting and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or enforcement actions initiated thereunder; the 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, 2019, and in Forms 10-Q and other filings, 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. Any forward-looking statements speak only as of the date of the applicable communication and 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, Forms 10-Q and other SEC filings are available on the SEC's website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of MPC's Form 10-K, Forms 10-Q and other SEC filings are available on the SEC's website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.
Condensed Results of Operations (unaudited) | Three Months Ended Sept. 30 | Nine Months Ended September 30 | |||||||||||||
(In millions, except per unit data) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Revenues and other income: | |||||||||||||||
Operating revenue | $ | 912 | $ | 928 | $ | 2,631 | $ | 2,818 | |||||||
Operating revenue - related parties | 1,187 | 1,224 | 3,506 | 3,562 | |||||||||||
Income (loss) from equity method investments | 83 | 95 | (1,012) | 255 | |||||||||||
Other income | 65 | 33 | 195 | 90 | |||||||||||
Total revenues and other income | 2,247 | 2,280 | 5,320 | 6,725 | |||||||||||
Costs and expenses: | |||||||||||||||
Operating expenses | 508 | 573 | 1,481 | 1,691 | |||||||||||
Operating expenses - related parties | 329 | 348 | 972 | 1,018 | |||||||||||
Depreciation and amortization | 346 | 302 | 992 | 916 | |||||||||||
Impairment expense | — | — | 2,165 | — | |||||||||||
General and administrative expenses | 96 | 102 | 289 | 293 | |||||||||||
Restructuring expenses | 36 | — | 36 | — | |||||||||||
Other taxes | 33 | 29 | 94 | 84 | |||||||||||
Total costs and expenses | 1,348 | 1,354 | 6,029 | 4,002 | |||||||||||
Income (loss) from operations | 899 | 926 | (709) | 2,723 | |||||||||||
Interest and other financial costs | 224 | 233 | 677 | 686 | |||||||||||
Income (loss) before income taxes | 675 | 693 | (1,386) | 2,037 | |||||||||||
(Benefit) provision for income taxes | 1 | 4 | 1 | 2 | |||||||||||
Net income (loss) | 674 | 689 | (1,387) | 2,035 | |||||||||||
Less: Net income attributable to noncontrolling interests | 9 | 8 | 24 | 20 | |||||||||||
Less: Net income attributable to Predecessor | — | 52 | — | 401 | |||||||||||
Net income (loss) attributable to MPLX LP | 665 | 629 | (1,411) | 1,614 | |||||||||||
Less: Series A preferred unit distributions | 20 | 20 | 61 | 61 | |||||||||||
Less: Series B preferred unit distributions | 10 | 7 | 31 | 7 | |||||||||||
Limited partners' interest in net income (loss) | $ | 635 | $ | 602 | $ | (1,503) | $ | 1,546 | |||||||
Per Unit Data | |||||||||||||||
Net income (loss) attributable to MPLX LP per | |||||||||||||||
Common - basic | $ | 0.61 | $ | 0.61 | $ | (1.43) | $ | 1.78 | |||||||
Common - diluted | $ | 0.61 | $ | 0.61 | $ | (1.43) | $ | 1.78 | |||||||
Weighted average limited partner units | |||||||||||||||
Common units – basic | 1,046 | 974 | 1,054 | 855 | |||||||||||
Common units – diluted | 1,047 | 975 | 1,054 | 855 | |||||||||||
Select Financial Statistics (unaudited) | Three Months Ended Sept. 30 | Nine Months Ended September 30 | |||||||||||||
(In millions, except ratio data) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Common unit distributions declared by MPLX | |||||||||||||||
Common units (LP) - public(a) | $ | 270 | $ | 266 | $ | 810 | $ | 718 | |||||||
Common units - MPC(a) | 445 | 438 | 1,348 | 1,201 | |||||||||||
Total GP and LP distribution declared | 715 | 704 | 2,158 | 1,919 | |||||||||||
Preferred unit distributions(b) | |||||||||||||||
Series A preferred unit distributions(c) | 20 | 20 | 61 | 61 | |||||||||||
Series B preferred unit distributions(d) | 10 | 10 | 31 | 31 | |||||||||||
Total preferred unit distributions | 30 | 30 | 92 | 92 | |||||||||||
Other Financial Data | |||||||||||||||
Adjusted EBITDA attributable to MPLX LP(e)(f) | 1,335 | 1,273 | 3,856 | 3,785 | |||||||||||
DCF attributable to GP and LP unitholders(e)(f) | $ | 1,032 | $ | 997 | $ | 3,075 | $ | 2,963 | |||||||
Distribution coverage ratio(g) | 1.44x | 1.42x | 1.42x | 1.54x | |||||||||||
Cash Flow Data | |||||||||||||||
Net cash flow provided by (used in): | |||||||||||||||
Operating activities | $ | 1,222 | $ | 1,036 | $ | 3,336 | $ | 2,990 | |||||||
Investing activities | (283) | (750) | (1,060) | (2,189) | |||||||||||
Financing activities | $ | (978) | $ | (277) | $ | (2,263) | $ | (845) | |||||||
(a) | The distribution on common units for the three and nine months ended Sept. 30, 2019 includes the impact of the issuance of |
(b) | Includes MPLX distributions declared on the Series A and Series B preferred units as well as distributions earned on the |
(c) | Series A preferred units are considered redeemable securities due to the existence of redemption provisions upon a deemed |
(d) | Series B preferred unitholders are entitled to receive a fixed distribution of $68.75 per unit, per annum, payable semi-annually |
(e) | Non-GAAP measure. See reconciliation below. |
(f) | Includes predecessor EBITDA and DCF that is attributable to the period prior to the acquisition date of July 30, 2019. For the |
(g) | DCF attributable to GP and LP unitholders (including DCF attributable to predecessor) divided by total GP and LP distribution |
Select Balance Sheet Data (unaudited) | |||||||
(In millions, except ratio data) | September 30, 2020 | December 31, | |||||
Cash and cash equivalents | $ | 28 | $ | 15 | |||
Total assets | 36,662 | 40,430 | |||||
Total long-term debt(a) | 20,349 | 20,307 | |||||
Redeemable preferred units | 968 | 968 | |||||
Total equity | $ | 13,095 | $ | 16,613 | |||
Consolidated total debt to adjusted EBITDA(b) | 4.0x | 4.1x | |||||
Partnership units outstanding: | |||||||
MPC-held common units | 647 | 666 | |||||
Public common units | 393 | 392 | |||||
(a) | Outstanding intercompany borrowings were zero as of Sept. 30, 2020 and $594 million as of Dec. 31, 2019. Includes current portion |
(b) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. Face value total debt |
Operating Statistics (unaudited)(a) | Three Months Ended Sept. 30 | Nine Months Ended September 30 | |||||||||||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||
Logistics and Storage | |||||||||||||||||||||
Pipeline throughput (mbpd) | |||||||||||||||||||||
Crude oil pipelines | 3,077 | 3,367 | (9) | % | 3,007 | 3,240 | (7) | % | |||||||||||||
Product pipelines | 1,613 | 1,859 | (13) | % | 1,701 | 1,875 | (9) | % | |||||||||||||
Total pipelines | 4,690 | 5,226 | (10) | % | 4,708 | 5,115 | (8) | % | |||||||||||||
Average tariff rates ($ per barrel) | |||||||||||||||||||||
Crude oil pipelines | $ | 0.96 | $ | 0.97 | (1) | % | $ | 0.96 | $ | 0.94 | 2 | % | |||||||||
Product pipelines | 0.85 | 0.77 | 10 | % | 0.82 | 0.73 | 12 | % | |||||||||||||
Total pipelines | $ | 0.93 | $ | 0.90 | 3 | % | 0.91 | 0.86 | 6 | % | |||||||||||
Terminal throughput (mbpd) | 2,701 | 3,292 | (18) | % | 2,696 | 3,267 | (17) | % | |||||||||||||
Barges at period-end | 301 | 264 | 14 | % | 301 | 264 | 14 | % | |||||||||||||
Towboats at period-end | 23 | 23 | — | % | 23 | 23 | — | % | |||||||||||||
(a) | Statistics for the three and nine months ended Sept. 30, 2019 are inclusive of predecessor operations. |
Gathering and | Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 1,312 | 1,271 | 3 | % | 1,372 | 1,273 | 8 | % | |||||||||||||
Utica Operations(b) | — | — | — | % | — | — | — | % | |||||||||||||
Subtotal | 1,312 | 1,271 | 3 | % | 1,372 | 1,273 | 8 | % | |||||||||||||
Southwest Operations | 1,413 | 1,653 | (15) | % | 1,445 | 1,618 | (11) | % | |||||||||||||
Bakken Operations | 130 | 149 | (13) | % | 137 | 149 | (8) | % | |||||||||||||
Rockies Operations | 481 | 627 | (23) | % | 523 | 639 | (18) | % | |||||||||||||
Total gathering throughput | 3,336 | 3,700 | (10) | % | 3,477 | 3,679 | (5) | % | |||||||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 4,222 | 4,264 | (1) | % | 4,177 | 4,211 | (1) | % | |||||||||||||
Utica Operations(b) | — | — | — | % | — | — | — | % | |||||||||||||
Subtotal | 4,222 | 4,264 | (1) | % | 4,177 | 4,211 | (1) | % | |||||||||||||
Southwest Operations | 1,377 | 1,667 | (17) | % | 1,479 | 1,608 | (8) | % | |||||||||||||
Southern Appalachian Operations | 227 | 254 | (11) | % | 231 | 244 | (5) | % | |||||||||||||
Bakken Operations | 129 | 149 | (13) | % | 137 | 149 | (8) | % | |||||||||||||
Rockies Operations | 481 | 568 | (15) | % | 512 | 575 | (11) | % | |||||||||||||
Total natural gas processed | 6,436 | 6,902 | (7) | % | 6,536 | 6,787 | (4) | % | |||||||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||||||
Marcellus Operations | 477 | 433 | 10 | % | 466 | 431 | 8 | % | |||||||||||||
Utica Operations(b) | — | — | — | % | — | — | — | % | |||||||||||||
Subtotal | 477 | 433 | 10 | % | 466 | 431 | 8 | % | |||||||||||||
Southwest Operations | 21 | 19 | 11 | % | 16 | 13 | 23 | % | |||||||||||||
Southern Appalachian Operations | 11 | 13 | (15) | % | 12 | 12 | — | % | |||||||||||||
Bakken Operations | 25 | 29 | (14) | % | 25 | 22 | 14 | % | |||||||||||||
Rockies Operations | 3 | 4 | (25) | % | 4 | 4 | — | % | |||||||||||||
Total C2 + NGLs fractionated | 537 | 498 | 8 | % | 523 | 482 | 9 | % | |||||||||||||
(a) | Includes operating data for entities that have been consolidated into the MPLX financial statements. Statistics for the three and nine |
(b) | The Utica region relates to operations for partnership-operated equity method investments and thus does not have any operating |
Gathering and Statistics (unaudited) - | Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 1,312 | 1,271 | 3 | % | 1,372 | 1,273 | 8 | % | |||||||||||||
Utica Operations | 1,816 | 2,381 | (24) | % | 1,840 | 2,186 | (16) | % | |||||||||||||
Subtotal | 3,128 | 3,652 | (14) | % | 3,212 | 3,459 | (7) | % | |||||||||||||
Southwest Operations | 1,479 | 1,653 | (11) | % | 1,491 | 1,618 | (8) | % | |||||||||||||
Bakken Operations | 130 | 149 | (13) | % | 137 | 149 | (8) | % | |||||||||||||
Rockies Operations | 659 | 827 | (20) | % | 706 | 835 | (15) | % | |||||||||||||
Total gathering throughput | 5,396 | 6,281 | (14) | % | 5,546 | 6,061 | (8) | % | |||||||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 5,706 | 5,300 | 8 | % | 5,582 | 5,218 | 7 | % | |||||||||||||
Utica Operations | 530 | 866 | (39) | % | 587 | 835 | (30) | % | |||||||||||||
Subtotal | 6,236 | 6,166 | 1 | % | 6,169 | 6,053 | 2 | % | |||||||||||||
Southwest Operations | 1,439 | 1,667 | (14) | % | 1,543 | 1,608 | (4) | % | |||||||||||||
Southern Appalachian Operations | 227 | 254 | (11) | % | 231 | 244 | (5) | % | |||||||||||||
Bakken Operations | 129 | 149 | (13) | % | 137 | 149 | (8) | % | |||||||||||||
Rockies Operations | 481 | 568 | (15) | % | 512 | 575 | (11) | % | |||||||||||||
Total natural gas processed | 8,512 | 8,804 | (3) | % | 8,592 | 8,629 | — | % | |||||||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||||||
Marcellus Operations | 477 | 433 | 10 | % | 466 | 431 | 8 | % | |||||||||||||
Utica Operations | 30 | 49 | (39) | % | 32 | 45 | (29) | % | |||||||||||||
Subtotal | 507 | 482 | 5 | % | 498 | 476 | 5 | % | |||||||||||||
Southwest Operations | 21 | 19 | 11 | % | 16 | 13 | 23 | % | |||||||||||||
Southern Appalachian Operations | 11 | 13 | (15) | % | 12 | 12 | — | % | |||||||||||||
Bakken Operations | 25 | 29 | (14) | % | 25 | 22 | 14 | % | |||||||||||||
Rockies Operations | 3 | 4 | (25) | % | 4 | 4 | — | % | |||||||||||||
Total C2 + NGLs fractionated | 567 | 547 | 4 | % | 555 | 527 | 5 | % | |||||||||||||
(a) | Includes operating data for entities that have been consolidated into the MPLX financial statements as well as operating data for |
Reconciliation of Segment Adjusted EBITDA to | Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
L&S segment adjusted EBITDA attributable to | $ | 893 | $ | 849 | $ | 2,604 | $ | 2,498 | |||||||
G&P segment adjusted EBITDA attributable to | 442 | 424 | 1,252 | 1,287 | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 1,335 | 1,273 | 3,856 | 3,785 | |||||||||||
Depreciation and amortization | (346) | (302) | (992) | (916) | |||||||||||
Provision for income taxes | (1) | (4) | (1) | (2) | |||||||||||
Amortization of deferred financing costs | (15) | (10) | (44) | (29) | |||||||||||
Gain on extinguishment of debt | 14 | — | 14 | — | |||||||||||
Non-cash equity-based compensation | (4) | (5) | (12) | (17) | |||||||||||
Impairment expense | — | — | (2,165) | — | |||||||||||
Restructuring expenses | (36) | — | (36) | — | |||||||||||
Net interest and other financial costs | (223) | (223) | (647) | (657) | |||||||||||
Income (loss) from equity method investments(a) | 83 | 95 | (1,012) | 255 | |||||||||||
Distributions/adjustments related to equity method | (130) | (145) | (369) | (399) | |||||||||||
Unrealized derivative (losses) gains(b) | (10) | 11 | (1) | 7 | |||||||||||
Acquisition costs | — | (9) | — | (14) | |||||||||||
Other | (3) | (1) | (5) | (1) | |||||||||||
Adjusted EBITDA attributable to noncontrolling | 10 | 9 | 27 | 23 | |||||||||||
Net income (loss) | $ | 674 | $ | 689 | $ | (1,387) | $ | 2,035 | |||||||
(a) | Includes impairment charges of $1,264 million for the nine months ended Sept. 30, 2020. |
(b) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. |
L&S Reconciliation of Segment Income from | Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
L&S segment income from operations | $ | 677 | $ | 713 | $ | 2,081 | $ | 2,075 | |||||||
Depreciation and amortization | 164 | 113 | 440 | 373 | |||||||||||
Restructuring expenses | 27 | — | 27 | — | |||||||||||
Income from equity method investments | (36) | (60) | (126) | (159) | |||||||||||
Distributions/adjustments related to equity method investments | 55 | 70 | 169 | 184 | |||||||||||
Acquisition costs | — | 9 | — | 14 | |||||||||||
Non-cash equity-based compensation | 3 | 3 | 8 | 10 | |||||||||||
Other | 3 | 1 | 5 | 1 | |||||||||||
L&S segment adjusted EBITDA attributable to | 893 | 849 | 2,604 | 2,498 | |||||||||||
L&S predecessor segment adjusted EBITDA | — | (83) | — | (603) | |||||||||||
L&S segment adjusted EBITDA attributable to | $ | 893 | $ | 766 | $ | 2,604 | $ | 1,895 | |||||||
G&P Reconciliation of Segment Income from | Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
G&P segment income (loss) from operations | $ | 222 | $ | 213 | $ | (2,790) | $ | 648 | |||||||
Depreciation and amortization | 182 | 189 | 552 | 543 | |||||||||||
Impairment expense | — | — | 2,165 | — | |||||||||||
Restructuring expenses | 9 | — | 9 | — | |||||||||||
(Income) loss from equity method investments | (47) | (35) | 1,138 | (96) | |||||||||||
Distributions/adjustments related to equity method investments | 75 | 75 | 200 | 215 | |||||||||||
Unrealized derivative losses (gains)(a) | 10 | (11) | 1 | (7) | |||||||||||
Non-cash equity-based compensation | 1 | 2 | 4 | 7 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interest | (10) | (9) | (27) | (23) | |||||||||||
G&P segment adjusted EBITDA attributable to | 442 | 424 | 1,252 | 1,287 | |||||||||||
G&P predecessor segment adjusted EBITDA | — | (25) | — | (167) | |||||||||||
G&P segment adjusted EBITDA attributable to | $ | 442 | $ | 399 | $ | 1,252 | $ | 1,120 | |||||||
(a) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative |
Reconciliation of Adjusted EBITDA Attributable | Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net income (loss) | $ | 674 | $ | 689 | $ | (1,387) | $ | 2,035 | |||||||
Provision for income taxes | 1 | 4 | 1 | 2 | |||||||||||
Amortization of deferred financing costs | 15 | 10 | 44 | 29 | |||||||||||
Gain on extinguishment of debt | (14) | — | (14) | — | |||||||||||
Net interest and other financial costs | 223 | 223 | 647 | 657 | |||||||||||
Income (loss) from operations | 899 | 926 | (709) | 2,723 | |||||||||||
Depreciation and amortization | 346 | 302 | 992 | 916 | |||||||||||
Non-cash equity-based compensation | 4 | 5 | 12 | 17 | |||||||||||
Impairment expense | — | — | 2,165 | — | |||||||||||
Restructuring expenses | 36 | — | 36 | — | |||||||||||
(Income) loss from equity method investments | (83) | (95) | 1,012 | (255) | |||||||||||
Distributions/adjustments related to equity method | 130 | 145 | 369 | 399 | |||||||||||
Unrealized derivative losses (gains)(a) | 10 | (11) | 1 | (7) | |||||||||||
Acquisition costs | — | 9 | — | 14 | |||||||||||
Other | 3 | 1 | 5 | 1 | |||||||||||
Adjusted EBITDA | 1,345 | 1,282 | 3,883 | 3,808 | |||||||||||
Adjusted EBITDA attributable to noncontrolling | (10) | (9) | (27) | (23) | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | (108) | — | (770) | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 1,335 | 1,165 | 3,856 | 3,015 | |||||||||||
Deferred revenue impacts | 29 | 36 | 92 | 67 | |||||||||||
Net interest and other financial costs | (223) | (223) | (647) | (657) | |||||||||||
Maintenance capital expenditures | (41) | (75) | (108) | (174) | |||||||||||
Maintenance capital expenditures reimbursements | 11 | 18 | 31 | 34 | |||||||||||
Equity method investment capital expenditures | (5) | (8) | (16) | (16) | |||||||||||
Restructuring expenses | (36) | — | (36) | — | |||||||||||
Other | (3) | 6 | — | 16 | |||||||||||
Portion of DCF adjustments attributable to | — | 27 | — | 159 | |||||||||||
DCF attributable to MPLX LP | 1,067 | 946 | 3,172 | 2,444 | |||||||||||
Preferred unit distributions(c) | (35) | (30) | (97) | (92) | |||||||||||
DCF attributable to GP and LP unitholders | 1,032 | 916 | 3,075 | 2,352 | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | 108 | — | 770 | |||||||||||
Portion of DCF adjustments attributable to | — | (27) | — | (159) | |||||||||||
DCF attributable to GP and LP unitholders | $ | 1,032 | $ | 997 | $ | 3,075 | $ | 2,963 | |||||||
(a) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is |
(b) | The adjusted EBITDA and DCF adjustments related to predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF |
(c) | Includes MPLX distributions declared on the Series A preferred units, Series B preferred units and TexNew Mex units, as well as cash |
Reconciliation of Net Income to LTM Pro forma adjusted EBITDA (unaudited) | Three Months Ended September 30 | ||||||
(In millions) | 2020 | 2019 | |||||
LTM Net (loss) income | $ | (1,960) | $ | 2,126 | |||
LTM Net income to adjusted EBITDA adjustments | 7,135 | 1,908 | |||||
LTM Adjusted EBITDA attributable to MPLX LP | 5,175 | 4,034 | |||||
LTM Pro forma/Predecessor adjustments for acquisitions | — | 1,001 | |||||
LTM Pro forma adjusted EBITDA | 5,175 | 5,035 | |||||
Consolidated debt | $ | 20,757 | $ | 20,245 | |||
Consolidated debt to adjusted EBITDA(a) | 4.0x | 4.0x | |||||
(a) | 2019 is shown as historically presented and has not been adjusted for predecessor impacts. |
Reconciliation of Adjusted EBITDA Attributable | Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net cash provided by operating activities | $ | 1,222 | $ | 1,036 | $ | 3,336 | $ | 2,990 | |||||||
Changes in working capital items | (166) | 22 | (154) | 134 | |||||||||||
All other, net | 20 | (16) | (6) | (23) | |||||||||||
Non-cash equity-based compensation | 4 | 5 | 12 | 17 | |||||||||||
Net gain (loss) on disposal of assets | — | 1 | (1) | 3 | |||||||||||
Restructuring expenses | 36 | — | 36 | — | |||||||||||
Current income taxes | 1 | 1 | 2 | 1 | |||||||||||
Gain on extinguishment of debt | (14) | — | (14) | — | |||||||||||
Net interest and other financial costs | 223 | 223 | 647 | 657 | |||||||||||
Asset retirement expenditures | — | — | — | 1 | |||||||||||
Unrealized derivative losses (gains)(a) | 10 | (11) | 1 | (7) | |||||||||||
Acquisition costs | — | 9 | — | 14 | |||||||||||
Other adjustments related to equity method investments | 6 | 11 | 19 | 20 | |||||||||||
Other | 3 | 1 | 5 | 1 | |||||||||||
Adjusted EBITDA | 1,345 | 1,282 | 3,883 | 3,808 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | (10) | (9) | (27) | (23) | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | (108) | — | (770) | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 1,335 | 1,165 | 3,856 | 3,015 | |||||||||||
Deferred revenue impacts | 29 | 36 | 92 | 67 | |||||||||||
Net interest and other financial costs | (223) | (223) | (647) | (657) | |||||||||||
Maintenance capital expenditures | (41) | (75) | (108) | (174) | |||||||||||
Maintenance capital expenditures reimbursements | 11 | 18 | 31 | 34 | |||||||||||
Equity method investment capital expenditures paid out | (5) | (8) | (16) | (16) | |||||||||||
Restructuring expenses | (36) | — | (36) | — | |||||||||||
Other | (3) | 6 | — | 16 | |||||||||||
Portion of DCF adjustments attributable to predecessor(b) | — | 27 | — | 159 | |||||||||||
DCF attributable to MPLX LP | 1,067 | 946 | 3,172 | 2,444 | |||||||||||
Preferred unit distributions(c) | (35) | (30) | (97) | (92) | |||||||||||
DCF attributable to GP and LP unitholders | 1,032 | 916 | 3,075 | 2,352 | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | 108 | — | 770 | |||||||||||
Portion of DCF adjustments attributable to predecessor(b) | — | (27) | — | (159) | |||||||||||
DCF attributable to GP and LP unitholders | $ | 1,032 | $ | 997 | $ | 3,075 | $ | 2,963 | |||||||
(a) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, |
(b) | The adjusted EBITDA and DCF adjustments related to predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF attributable |
(c) | Includes MPLX distributions declared on the Series A preferred units, Series B preferred units and TexNew Mex units, as well as cash distributions |
Capital Expenditures (unaudited) | Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Capital Expenditures: | |||||||||||||||
Maintenance | $ | 41 | $ | 75 | $ | 108 | $ | 174 | |||||||
Maintenance reimbursements | (11) | (18) | (31) | (34) | |||||||||||
Growth | 208 | 518 | 677 | 1,479 | |||||||||||
Growth reimbursements | (2) | (5) | (2) | (17) | |||||||||||
Total capital expenditures | 236 | 570 | 752 | 1,602 | |||||||||||
Less: Increase (decrease) in capital accruals | (25) | 10 | (197) | (67) | |||||||||||
Asset retirement expenditures | — | — | — | 1 | |||||||||||
Additions to property, plant and equipment, net(a) | 261 | 560 | 949 | 1,668 | |||||||||||
Investments in unconsolidated affiliates | 22 | 171 | 244 | 494 | |||||||||||
Acquisitions | — | — | — | (6) | |||||||||||
Total capital expenditures and acquisitions | 283 | 731 | 1,193 | 2,156 | |||||||||||
Less: Maintenance capital expenditures (including | 30 | 57 | 77 | 140 | |||||||||||
Acquisitions | — | — | — | (6) | |||||||||||
Total growth capital expenditures(b) | $ | 253 | $ | 674 | $ | 1,116 | $ | 2,022 | |||||||
(a) | This amount is represented in the Consolidated Statements of Cash Flows as Additions to property, plant and equipment after excluding growth |
(b) | Amount excludes contributions from noncontrolling interests of $94 million for the nine months ended Sept. 30, 2019, as reflected in the |
2020 adjusted growth capital expenditures | Three Months Ended September 30, 2020 | Nine Months Ended September 30, 2020 | |||||
(In millions) | |||||||
Total growth capital expenditures | $ | 253 | $ | 1,116 | |||
Decrease in capital accruals | (25) | (197) | |||||
Capitalized interest | (8) | (29) | |||||
Return of Capital | (2) | (112) | |||||
Total adjusted growth capital expenditures | $ | 218 | $ | 778 | |||
View original content:http://www.prnewswire.com/news-releases/mplx-lp-reports-third-quarter-2020-financial-results-301164735.html
SOURCE MPLX LP
FINDLAY, Ohio, Oct. 27, 2020 /PRNewswire/ -- The board of directors of the general partner of MPLX LP (NYSE: MPLX) has declared a quarterly cash distribution of $0.6875 per common unit for the third quarter of 2020, or $2.75 on an annualized basis. The distribution will be paid on Nov. 13, 2020, to common unitholders of record as of Nov. 6, 2020.
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100 percent of MPLX's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MPLX's distributions to non-United States investors are subject to federal income tax withholding at the highest applicable effective tax rate.
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
Taryn Erie, Manager, Investor Relations
Media Contact:
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/mplx-lp-announces-quarterly-distribution-301161102.html
SOURCE MPLX LP
FINDLAY, Ohio, Oct. 23, 2020 /PRNewswire/ -- MPLX LP (NYSE: MPLX) announced today that it will extend its binding open season for the expansion of the SLC Core Pipeline System by two weeks. In response to feedback from potential shippers, MPLX is making modest revisions to its transportation service agreement under the open season process. The binding open season will be extended to Nov. 6, 2020, at 12 p.m. CST to allow potential shippers adequate time to review these revisions, and to provide additional time to finalize commitments.
The proposed SLC Core Pipeline System capacity expansion would provide shippers access to the Guernsey crude oil market hub and access to additional crude oil grades for refiners in the Salt Lake City, Utah, area. The expansion would provide incremental pipeline capacity of approximately 11,000 barrels per day (bpd), reinstating origin service from Fort Laramie, Wyoming. This expansion would bring total capacity on the SLC Core Pipeline to approximately 56,000 bpd, and is expected to begin service in the first quarter of 2022.
The SLC Core Pipeline System, owned by Tesoro Logistics Northwest Pipeline LLC, a subsidiary of MPLX, is a common carrier system transporting crude oil from various points in Wyoming to Wahsatch Station, Utah, with a connection to a third-party pipeline at Wahsatch Station for further transportation to refineries in the Salt Lake City area, with approximate total delivery capacity of 45,000 bpd.
The binding open season began on Monday, Sept. 21, 2020.
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
Taryn Erie, Manager, Investor Relations
Media Contact:
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
Commercial Contacts:
Greg Henderson (210) 626-4585
Ryan Robins (210) 626-4971
This press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements relate to, among other things, statements with respect to forecasts regarding the need for additional pipeline capacity. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the companies and are difficult to predict. Factors that could impact the opportunities described above are: the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of pipeline capacity by competitors; the ability to obtain required regulatory approvals on a timely basis; the occurrence of an operational hazard or unforeseen interruption; 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, 2019, and Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission (SEC). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPLX's Forms 10-K and 10-Q could also have material adverse effects on forward-looking statements. Copies of MPLX's Forms 10-K and 10-Q are available on the SEC's website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.
View original content:http://www.prnewswire.com/news-releases/mplx-announces-extension-of-binding-open-season-for-proposed-expansion-of-slc-core-pipeline-system-301158713.html
SOURCE MPLX LP
FINDLAY, Ohio, Sept. 21, 2020 /PRNewswire/ -- MPLX LP (NYSE: MPLX) today launched a binding open season to assess shipper interest in firm priority capacity on the SLC Core Pipeline System, located in Wyoming, to transport crude oil from Fort Laramie Station, Wyoming, to Wahsatch Station, Utah. From Wahsatch Station, crude transportation service is available on a third-party system for ultimate delivery to refineries in the Salt Lake City, Utah, area.
The binding open season will commence on Sept. 21, 2020 and will end at noon CDT on Oct. 23, 2020.
About the SLC Core Expansion
The proposed SLC Core Pipeline System capacity expansion would provide shippers access to the Guernsey crude oil market hub and access to additional crude oil grades for refiners in the Salt Lake City area. The expansion would provide incremental pipeline capacity of approximately 11,000 barrels per day (bpd), reinstating origin service from Fort Laramie, Wyoming. This expansion would bring total capacity on the SLC Core Pipeline to approximately 56,000 bpd and is expected to begin service in the first quarter of 2022.
About the SLC Core Pipeline System
The SLC Core Pipeline System, owned by Tesoro Logistics Northwest Pipeline LLC, a subsidiary of MPLX, is a common carrier system transporting crude oil from various points in Wyoming to Wahsatch Station, Utah, with a connection to a third-party pipeline at Wahsatch Station for further transportation to refineries in the Salt Lake City area, with approximate total delivery capacity of 45,000 bpd.
Open Season Process
Documents and further details related to the binding open season will be made available upon completion of a Confidentiality Agreement, available at: www.MPLX.com
All interested shippers should submit an executed Confidentiality Agreement to:
Martin Marz
Attorney
19100 Ridgewood Parkway
San Antonio, TX 78259
Telephone: 210-626-6517
Email: mjmarz@marathonpetroleum.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
Evan Barbosa, Manager, Investor Relations
Jim Mallamaci, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
Commercial Contacts:
Greg Henderson (210) 626-4585
Ryan Robins (210) 626-4971
This press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements relate to, among other things, statements with respect to forecasts regarding the need for additional pipeline capacity. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the companies and are difficult to predict. Factors that could impact the opportunities described above are: the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of pipeline capacity by competitors; the ability to obtain required regulatory approvals on a timely basis; the occurrence of an operational hazard or unforeseen interruption; 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, 2019, and Quarterly Reports on Form 10-Q, filed with the Securities and Exchange Commission (SEC). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPLX's Forms 10-K and 10-Q could also have material adverse effects on forward-looking statements. Copies of MPLX's Forms 10-K and 10-Q are available on the SEC's website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.
View original content:http://www.prnewswire.com/news-releases/mplx-announces-binding-open-season-proposing-expansion-of-slc-core-pipeline-system-301134615.html
SOURCE MPLX LP
FINDLAY, Ohio, Aug. 24, 2020 /PRNewswire/ -- Marathon Pipe Line LLC, a subsidiary of MPLX LP (NYSE: MPLX), has earned the American Petroleum Institute's (API's) 2019 Distinguished Pipeline Safety Award. The recognition is based on selection by pipeline industry peers, and recognizes the company for fostering a culture of safety, sharing and implementing best practices, and participating in API policy and technical work.
Shawn Lyon, president of Marathon Pipe Line, said the award is a testament to the dedication of the company's employees. "They're out there giving their all, focused on our mission to safely and reliably operate pipelines 24 hours a day, 365 days a year – and they're making a difference," he said. "No matter what, even during this pandemic, they always answer the higher calling to be guardians of public safety. The safety of those in the communities where we operate – that's at the heart of everything Marathon Pipe Line does."
Lyon also expressed his gratitude to the API member pipeline operators. "We're truly honored by this recognition from our peers," he said. "There are so many excellent operators who helped select Marathon Pipe Line, and I'm humbled by their confidence in us."
As a subsidiary of MPLX, Marathon Pipe Line transports and stores crude oil, refined products and natural gas throughout the U.S. using its network of thousands of miles of pipelines, storage tanks, storage caverns and marine facilities.
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 petroleum 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.
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Evan Barbosa, Manager, Investor Relations
Jim Mallamaci, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-pipe-line-llc-earns-american-petroleum-institute-distinguished-pipeline-safety-award-301117073.html
SOURCE MPLX LP
FINDLAY, Ohio, Aug. 11, 2020 /PRNewswire/ -- MPLX LP (NYSE: MPLX) announced today that it has priced $3,000,000,000 in aggregate principal amount of unsecured senior notes in an underwritten public offering consisting of $1,500,000,000 aggregate principal amount of 1.75% senior notes due in 2026 (the "2026 senior notes") and $1,500,000,000 aggregate principal amount of 2.65% senior notes due in 2030 (the "2030 senior notes").
The 2026 senior notes and 2030 senior notes were offered at a price to the public of 99.785% of par and 99.913% of par, respectively.
MPLX intends to use the net proceeds from this offering to repay or redeem existing indebtedness, including, without limitation, (i) the $1 billion term loan borrowing maturing in 2021, (ii) the $1 billion aggregate principal amount of its floating rate senior notes due 2021, (iii) the $300 million aggregate principal amount of its 6.250% senior notes due 2022 (including the approximately $34 million in aggregate principal amount of senior notes issued by Andeavor Logistics LP and Tesoro Logistics Finance Corp.) and (iv) the $450 million aggregate principal amount of its 6.375% senior notes due 2024 (including the approximately $69 million in aggregate principal amount of senior notes issued by Andeavor Logistics LP and Tesoro Logistics Finance Corp.). Any remaining net proceeds will be used for general partnership purposes.
The closing of the senior notes offering is expected to occur on Aug. 18, 2020, subject to satisfaction of customary closing conditions.
RBC Capital Markets, LLC; J.P. Morgan Securities LLC; and MUFG Securities Americas Inc. are acting as joint book-running managers for the offering.
This offering is being made only by means of a prospectus and related prospectus supplement, which may be obtained for free by visiting the Securities and Exchange Commission's website at http://www.sec.gov. Alternatively, copies may be obtained by contacting the following, who are acting as representatives of the underwriters:
RBC Capital Markets, LLC
200 Vesey Street, 8th Floor
New York, NY 10281
Toll-Free: (866) 375-6829
J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Collect: (212) 834-4533
MUFG Securities Americas Inc.
1221 Avenue of the Americas, 6th Floor
New York, NY 10020
Attn: Capital Markets Group
Toll-Free: (877) 649-6848
This news release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
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 petroleum 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.
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Evan Barbosa, Manager, Investor Relations
Jim Mallamaci, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/mplx-lp-prices-3-billion-senior-notes-offering-301110429.html
SOURCE MPLX LP
FINDLAY, Ohio, Aug. 3, 2020 /PRNewswire/ --
MPLX LP (NYSE: MPLX) today reported second-quarter 2020 net income attributable to MPLX of $648 million, compared with net income of $482 million for the second quarter of 2019. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) attributable to MPLX was $1.2 billion, compared with $1.2 billion in the second quarter of 2019.
The Logistics and Storage (L&S) segment reported segment income from operations of $681 million and adjusted EBITDA of $839 million for the quarter, up $6 million and $18 million, respectively, versus the second quarter of last year. The Gathering and Processing (G&P) segment reported segment income from operations of $197 million and adjusted EBITDA of $388 million for the quarter, down $13 million and $40 million, respectively, versus the second quarter of last year.
During the quarter, MPLX generated $1.1 billion in net cash provided by operating activities and $1.0 billion of distributable cash flow. Distribution coverage was 1.39x for the second quarter of 2020. MPLX also announced a second-quarter 2020 distribution of $0.6875 per common unit, consistent with the prior quarter.
"The challenges created by the COVID pandemic continued during our second quarter," said Michael J. Hennigan, president and chief executive officer. "Significantly lower levels of demand for crude and refined products decreased the need for our logistics and storage services, while production curtailments in response to lower prices pressured the gathering and processing systems we operate. However, the progress we made on the proactive steps we announced last quarter helped offset some of these challenges. We continue to believe we will be able to generate a stable level of EBITDA to support our goal of achieving positive free cash flow, after capital investments and distributions, for 2021."
Financial Highlights
Three Months Ended | Six Months Ended | ||||||||||||||||||
(In millions, except per unit and ratio data) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
Net (loss) income attributable to MPLX(a) | $ | 648 | $ | 482 | $ | (2,076) | $ | 985 | |||||||||||
Adjusted net income attributable to MPLX(b) | N/A | 651 | N/A | 1,334 | |||||||||||||||
Adjusted EBITDA attributable to MPLX LP(c) | 1,227 | 1,249 | 2,521 | 2,512 | |||||||||||||||
Net cash provided by operating activities | 1,105 | 1,101 | 2,114 | 1,954 | |||||||||||||||
Distributable cash flow attributable to MPLX LP(c) | 1,027 | 1,007 | 2,105 | 2,028 | |||||||||||||||
Distribution per common unit(d) | $ | 0.6875 | $ | 0.6675 | $ | 1.3750 | $ | 1.3250 | |||||||||||
Distribution coverage ratio(e) | 1.39x | 1.41x | 1.42x | 1.62x | |||||||||||||||
Consolidated debt to adjusted EBITDA(f) | 4.1x | 3.9x | N/A | N/A | |||||||||||||||
(a) | The six months ended June 30, 2020 includes impairments related to equity method investments of approximately $1.3 billion, goodwill impairment of approximately $1.8 billion and long-lived asset impairments of approximately $0.3 billion, all within our G&P operating segment. |
(b) | Includes net income attributable to predecessor for the three and six months ended June 30, 2019. The predecessor period represents the period prior to MPLX's acquisition of ANDX on July 30, 2019. |
(c) | Non-GAAP measures calculated before distributions to preferred unitholders. See reconciliation below. Includes adjusted EBITDA and DCF adjustments attributable to predecessor. For the three and six months ended June 30, 2019, adjusted EBITDA attributable to MPLX LP excluding predecessor results was $920 million and $1,850 million, respectively. |
(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 distributions declared. For the six months ended June 30, 2019, DCF attributable to predecessor has been included with no corresponding distribution being declared by MPLX for the first quarter of 2019, resulting in a distribution coverage ratio of 1.62x. |
(f) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. See reconciliation below. 2019 is shown as historically presented and has not been adjusted for predecessor impacts. |
Segment Results (including predecessor)
(In millions) | Three Months Ended | Six Months Ended | |||||||||||||
Segment income (loss) from operations | 2020 | 2019 | 2020 | 2019 | |||||||||||
Logistics and Storage | $ | 681 | $ | 675 | $ | 1,404 | $ | 1,362 | |||||||
Gathering and Processing | 197 | 210 | (3,012) | 435 | |||||||||||
Segment adjusted EBITDA attributable to MPLX | |||||||||||||||
Logistics and Storage | 839 | 821 | 1,711 | 1,649 | |||||||||||
Gathering and Processing | $ | 388 | $ | 428 | $ | 810 | $ | 863 | |||||||
Logistics & Storage
L&S segment income from operations and segment adjusted EBITDA for the second quarter of 2020 increased by $6 million and $18 million, respectively, compared to the same period in 2019. Results for the quarter were impacted by lower demand due to the COVID-19 pandemic, which was more than offset by lower operating expenses, minimum volume commitments, and additional marine equipment placed in service.
Total pipeline throughputs were 4.3 million barrels per day in the second quarter, a decrease of 15% versus the same quarter of 2019. The average tariff rate was $0.94 per barrel for the quarter. Terminal throughput was 2.4 million barrels per day for the quarter, a decrease of 26% versus the same quarter of 2019.
Gathering & Processing
G&P segment income from operations and segment adjusted EBITDA for the second quarter of 2020 decreased by $13 million and $40 million, respectively, compared to the same period in 2019. Results for the quarter were primarily impacted by lower commodity prices and production curtailments and shut-ins. In the second quarter of 2020:
In the Marcellus and Utica:
Strategic Update
MPLX has made significant progress to reduce forecasted annual operating expenses by approximately $200 million, net maintenance capital spending by $100 million to approximately $150 million, and growth capital spending by over $600 million to approximately $900 million.
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, of which 100% of the contractible capacity is committed with minimum volume commitments, will originate in the Permian Basin and have destination points in the Houston market, including the Marathon Petroleum Corporation (NYSE: MPC) 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. Whistler is more than 90% committed with minimum volume commitments. During the quarter, MPLX, along with its partners, secured project financing for the Whistler Pipeline. Lower capital spend related to this financing was already factored into the company's reduced 2020 growth capital target.
This quarter, MPLX, WhiteWater Midstream, and West Texas Gas, Inc. (WTG) formed a joint venture (JV) to provide natural gas liquids (NGL) takeaway capacity from MPLX and WTG gas processing plants to Sweeny, Texas. The JV utilizes existing infrastructure with limited new construction and is a capital-efficient solution to support producer customers.
Additionally, MPLX entered into a redemption agreement with MPC, in which MPLX agreed to transfer the Western wholesale distribution business, which it acquired as a result of its acquisition of Andeavor Logistics, to MPC in exchange for the redemption of $340 million of MPLX common units held by MPC. The transaction, which was signed and closed on July 31, leaves MPLX with the fuels distribution business acquired from MPC in 2018.
Yesterday, MPC announced an agreement with 7-Eleven to sell Speedway for $21 billion in cash. MPC expects to use proceeds from the sale to strengthen its balance sheet and return capital to shareholders. The arrangement includes a 15-year fuel supply agreement for approximately 7.7 billion gallons of fuel per year and the opportunity to supply additional 7-Eleven locations.
MPC also announced the indefinite idling of the Gallup and Martinez refineries, and announced it is evaluating the strategic repositioning of Martinez to a renewable diesel facility.
Financial Position and Liquidity
As of June 30, 2020, MPLX had $67 million in cash, $2.7 billion available through its bank revolving credit facility expiring in July 2024 and $1.5 billion available through its intercompany loan agreement with MPC. The company's leverage ratio was 4.1x at June 30, 2020. 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. 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 Contact: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Evan Barbosa, Manager, Investor Relations
Jim Mallamaci, 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 DCF generated is considered by the board of directors of our general partner in approving the Partnership's cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) provision for income taxes; (iii) amortization of deferred financing costs; (iv) non-cash equity-based compensation; (v) net interest and other financial costs; (vi) income from equity method investments; (vii) distributions and adjustments related to equity method investments; (viii) unrealized derivative gains and losses; (ix) acquisition costs; (x) noncontrolling interest and (xi) other adjustments as deemed necessary. In general, we define DCF as adjusted EBITDA adjusted for (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items.
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record the realized gain or loss of the contract.
Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures.
DCF is a financial performance measure used by management as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders.
Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between the partnership's financial operating performance and cash distribution capability. We define the distribution coverage ratio as the ratio of DCF attributable to GP and LP unitholders to total GP and LP distributions declared.
Leverage ratio is a liquidity measure used by management, industry analysts, investors, lenders and rating agencies to analyze our ability to incur and service debt and fund capital expenditures.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX). These forward-looking statements relate to, among other things, MPLX's 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: the effects of the recent outbreak of COVID-19 and the adverse impact thereof on our business, financial condition, results of operations and cash flows, including our growth, operating costs, labor availability, logistical capabilities, customer demand for our services and industry demand generally, cash position, taxes, the price of our securities and trading markets with respect thereto, our ability to access capital markets, and the global economy and financial markets generally; the ability to reduce capital and operating expenses; the risk of further impairments; the risk that anticipated opportunities and any other synergies from or anticipated benefits of the Andeavor Logistics LP (ANDX) 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 as a result of the COVID-19 pandemic, other infectious disease outbreaks or otherwise; non-payment or non-performance by our producer and other customers; 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, 2019, and in Forms 10-Q and other filings, 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: the effects of the recent outbreak of COVID-19 and the adverse impact thereof on the business, financial condition, results of operations and cash flows, including, but not limited to, growth, operating costs, labor availability, logistical capabilities, customer demand for products and industry demand generally, margins, inventory value, cash position, taxes, the price of securities and trading markets with respect thereto, the ability to access capital markets, and the global economy and financial markets generally; the effects of the recent outbreak of COVID-19, and the current economic environment generally, on working capital, cash flows and liquidity, which can be significantly affected by decreases in commodity prices; the ability to reduce capital and operating expenses; with respect to the planned Speedway sale, the ability to successfully complete the sale within the expected timeframe or at all, based on numerous factors, including our ability to satisfy customary conditions, including obtaining regulatory approvals on the proposed terms and schedule, and any conditions imposed in connection with the consummation of the transaction, our ability to utilize the proceeds as anticipated, and our ability to capture value from the associated ongoing supply relationship and realize the other expected benefits; 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 ANDX 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 as a result of the COVID-19 pandemic, other infectious disease outbreaks or otherwise; 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, 2019, and in Forms 10-Q and other filings, 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, Forms 10-Q and other SEC filings are available on the SEC's website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of MPC's Form 10-K, Forms 10-Q and other SEC filings are available on the SEC's 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 | Six Months Ended | |||||||||||||
(In millions, except per unit data) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Revenues and other income: | |||||||||||||||
Operating revenue | $ | 803 | $ | 927 | $ | 1,719 | $ | 1,890 | |||||||
Operating revenue - related parties | 1,124 | 1,169 | 2,319 | 2,338 | |||||||||||
Income (loss) from equity method investments | 89 | 83 | (1,095) | 160 | |||||||||||
Other income | 65 | 31 | 130 | 57 | |||||||||||
Total revenues and other income | 2,081 | 2,210 | 3,073 | 4,445 | |||||||||||
Costs and expenses: | |||||||||||||||
Operating expenses | 435 | 548 | 973 | 1,118 | |||||||||||
Operating expenses - related parties | 321 | 349 | 643 | 670 | |||||||||||
Depreciation and amortization | 321 | 313 | 646 | 614 | |||||||||||
Impairment expense | — | — | 2,165 | — | |||||||||||
General and administrative expenses | 96 | 90 | 193 | 191 | |||||||||||
Other taxes | 30 | 25 | 61 | 55 | |||||||||||
Total costs and expenses | 1,203 | 1,325 | 4,681 | 2,648 | |||||||||||
Income (loss) from operations | 878 | 885 | (1,608) | 1,797 | |||||||||||
Interest and other financial costs | 223 | 229 | 453 | 453 | |||||||||||
Income (loss) before income taxes | 655 | 656 | (2,061) | 1,344 | |||||||||||
(Benefit) provision for income taxes | — | (1) | — | (2) | |||||||||||
Net income (loss) | 655 | 657 | (2,061) | 1,346 | |||||||||||
Less: Net income attributable to noncontrolling interests | 7 | 6 | 15 | 12 | |||||||||||
Less: Net income attributable to Predecessor | — | 169 | — | 349 | |||||||||||
Net income (loss) attributable to MPLX LP | 648 | 482 | (2,076) | 985 | |||||||||||
Less: Series A preferred unit distributions | 21 | 21 | 41 | 41 | |||||||||||
Less: Series B preferred unit distributions | 10 | — | 21 | — | |||||||||||
Limited partners' interest in net income (loss) attributable to MPLX LP | $ | 617 | $ | 461 | $ | (2,138) | $ | 944 | |||||||
Per Unit Data | |||||||||||||||
Net income (loss) attributable to MPLX LP per | |||||||||||||||
Common - basic | $ | 0.58 | $ | 0.56 | $ | (2.02) | $ | 1.16 | |||||||
Common - diluted | $ | 0.58 | $ | 0.55 | $ | (2.02) | $ | 1.16 | |||||||
Weighted average limited partner units outstanding: | |||||||||||||||
Common units – basic | 1,059 | 794 | 1,059 | 794 | |||||||||||
Common units – diluted | 1,059 | 795 | 1,059 | 795 | |||||||||||
Select Financial Statistics (unaudited) | Three Months Ended | Six Months Ended | |||||||||||||
(In millions, except ratio data) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Common unit distributions declared by MPLX | |||||||||||||||
Common units (LP) - public(a) | $ | 270 | $ | 261 | $ | 540 | $ | 452 | |||||||
Common units - MPC(a) | 445 | 431 | 903 | 763 | |||||||||||
Total GP and LP distribution declared | 715 | 692 | 1,443 | 1,215 | |||||||||||
Preferred unit distributions(b) | |||||||||||||||
Series A preferred unit distributions(c) | 21 | 21 | 41 | 41 | |||||||||||
Series B preferred unit distributions(d) | 10 | 21 | 21 | 21 | |||||||||||
Total preferred unit distributions | 31 | 42 | 62 | 62 | |||||||||||
Other Financial Data | |||||||||||||||
Adjusted EBITDA attributable to MPLX LP(e)(f) | 1,227 | 1,249 | 2,521 | 2,512 | |||||||||||
DCF attributable to GP and LP unitholders(e)(f) | $ | 996 | $ | 975 | $ | 2,043 | $ | 1,966 | |||||||
Distribution coverage ratio(g) | 1.39x | 1.41x | 1.42x | 1.62x | |||||||||||
Cash Flow Data | |||||||||||||||
Net cash flow provided by (used in): | |||||||||||||||
Operating activities | $ | 1,105 | $ | 1,101 | $ | 2,114 | $ | 1,954 | |||||||
Investing activities | (415) | (739) | (777) | (1,439) | |||||||||||
Financing activities | $ | (680) | $ | (452) | $ | (1,285) | $ | (568) | |||||||
(a) | The distribution on common units for the three and six months ended June 30, 2019 includes the impact of the issuance of approximately 102 million units issued to public unitholders and approximately 161 million units issued to MPC in connection with MPLX's acquisition of ANDX on July 30, 2019. |
(b) | 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. |
(c) | 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. |
(d) | 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. |
(e) | Non-GAAP measure. See reconciliation below. |
(f) | Includes predecessor EBITDA and DCF that is attributable to the period prior to the acquisition date of July 30, 2019. For the three and six months ended June 30, 2019, adjusted EBITDA attributable to MPLX LP excluding predecessor results was $920 million and $1,850 million respectively. |
(g) | DCF attributable to GP and LP unitholders (including DCF attributable to predecessor) divided by total GP and LP distribution declared. For the six months ended June 30, 2019, DCF attributable to predecessor has been included with no corresponding distribution being declared by MPLX for the first quarter of 2019, resulting in a distribution coverage ratio of 1.62x. |
Select Balance Sheet Data (unaudited) | |||||||
(In millions, except ratio data) | June 30, | December 31, | |||||
Cash and cash equivalents | $ | 67 | $ | 15 | |||
Total assets | 37,022 | 40,430 | |||||
Total long-term debt(a) | 20,559 | 20,307 | |||||
Redeemable preferred units | 968 | 968 | |||||
Total equity | $ | 13,262 | $ | 16,613 | |||
Consolidated total debt to adjusted EBITDA(b) | 4.1x | 4.1x | |||||
Partnership units outstanding: | |||||||
MPC-held common units | 666 | 666 | |||||
Public common units | 393 | 392 | |||||
(a) | Outstanding intercompany borrowings were zero as of June 30, 2020 and $594 |
(b) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is and December 31, 2019, respectively. |
Operating Statistics | Three Months Ended | Six Months Ended | |||||||||||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||
Logistics and Storage | |||||||||||||||||||||
Pipeline throughput (mbpd) | |||||||||||||||||||||
Crude oil pipelines | 2,733 | 3,242 | (16) | % | 2,971 | 3,174 | (6) | % | |||||||||||||
Product pipelines | 1,586 | 1,867 | (15) | % | 1,746 | 1,882 | (7) | % | |||||||||||||
Total pipelines | 4,319 | 5,109 | (15) | % | 4,717 | 5,056 | (7) | % | |||||||||||||
Average tariff rates ($ per barrel) | |||||||||||||||||||||
Crude oil pipelines | $ | 0.99 | $ | 0.88 | 13 | % | $ | 0.96 | $ | 0.92 | 4 | % | |||||||||
Product pipelines | 0.84 | 0.75 | 12 | % | 0.81 | 0.72 | 13 | % | |||||||||||||
Total pipelines | $ | 0.94 | $ | 0.83 | 13 | % | 0.90 | 0.84 | 7 | % | |||||||||||
Terminal throughput (mbpd) | 2,420 | 3,287 | (26) | % | 2,693 | 3,253 | (17) | % | |||||||||||||
Barges at period-end | 305 | 261 | 17 | % | 305 | 261 | 17 | % | |||||||||||||
Towboats at period-end | 23 | 23 | — | % | 23 | 23 | — | % | |||||||||||||
(a) | Statistics for the three and six months ended June 30, 2019 are inclusive of predecessor operations. |
Gathering and | Three Months Ended | Six Months Ended | |||||||||||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 1,385 | 1,266 | 9 | % | 1,402 | 1,274 | 10 | % | |||||||||||||
Utica Operations(b) | — | — | — | % | — | — | — | % | |||||||||||||
Subtotal | 1,385 | 1,266 | 9 | % | 1,402 | 1,274 | 10 | % | |||||||||||||
Southwest Operations | 1,365 | 1,617 | (16) | % | 1,461 | 1,600 | (9) | % | |||||||||||||
Bakken Operations | 126 | 147 | (14) | % | 141 | 150 | (6) | % | |||||||||||||
Rockies Operations | 495 | 649 | (24) | % | 544 | 644 | (16) | % | |||||||||||||
Total gathering throughput | 3,371 | 3,679 | (8) | % | 3,548 | 3,668 | (3) | % | |||||||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 4,112 | 4,216 | (2) | % | 4,155 | 4,185 | (1) | % | |||||||||||||
Utica Operations(b) | — | — | — | % | — | — | — | % | |||||||||||||
Subtotal | 4,112 | 4,216 | (2) | % | 4,155 | 4,185 | (1) | % | |||||||||||||
Southwest Operations | 1,412 | 1,558 | (9) | % | 1,530 | 1,578 | (3) | % | |||||||||||||
Southern Appalachian Operations | 223 | 243 | (8) | % | 233 | 239 | (3) | % | |||||||||||||
Bakken Operations | 126 | 147 | (14) | % | 141 | 150 | (6) | % | |||||||||||||
Rockies Operations | 516 | 585 | (12) | % | 528 | 578 | (9) | % | |||||||||||||
Total natural gas processed | 6,389 | 6,749 | (5) | % | 6,587 | 6,730 | (2) | % | |||||||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||||||
Marcellus Operations | 464 | 440 | 5 | % | 460 | 430 | 7 | % | |||||||||||||
Utica Operations(b) | — | — | — | % | — | — | — | % | |||||||||||||
Subtotal | 464 | 440 | 5 | % | 460 | 430 | 7 | % | |||||||||||||
Southwest Operations | 13 | 3 | 333 | % | 14 | 10 | 40 | % | |||||||||||||
Southern Appalachian Operations | 12 | 12 | — | % | 12 | 12 | — | % | |||||||||||||
Bakken Operations | 19 | 21 | (10) | % | 25 | 18 | 39 | % | |||||||||||||
Rockies Operations | 4 | 3 | 33 | % | 4 | 4 | — | % | |||||||||||||
Total C2 + NGLs fractionated | 512 | 479 | 7 | % | 515 | 474 | 9 | % | |||||||||||||
(a) | Includes operating data for entities that have been consolidated into the MPLX financial statements. Statistics for the three and six months ended June 30, 2019 are inclusive of predecessor operations. |
(b) | The Utica region relates to operations for partnership-operated equity method investments and thus does not have any operating statistics from a consolidated perspective. See table below for details on Utica. |
Gathering and | Three Months Ended | Six Months Ended | |||||||||||||||||||
2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 1,385 | 1,266 | 9 | % | 1,402 | 1,274 | 10 | % | |||||||||||||
Utica Operations | 1,903 | 2,066 | (8) | % | 1,852 | 2,087 | (11) | % | |||||||||||||
Subtotal | 3,288 | 3,332 | (1) | % | 3,254 | 3,361 | (3) | % | |||||||||||||
Southwest Operations | 1,393 | 1,617 | (14) | % | 1,497 | 1,600 | (6) | % | |||||||||||||
Bakken Operations | 126 | 147 | (14) | % | 141 | 150 | (6) | % | |||||||||||||
Rockies Operations | 683 | 852 | (20) | % | 729 | 839 | (13) | % | |||||||||||||
Total gathering throughput | 5,490 | 5,948 | (8) | % | 5,621 | 5,950 | (6) | % | |||||||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 5,516 | 5,202 | 6 | % | 5,519 | 5,175 | 7 | % | |||||||||||||
Utica Operations | 585 | 823 | (29) | % | 616 | 820 | (25) | % | |||||||||||||
Subtotal | 6,101 | 6,025 | 1 | % | 6,135 | 5,995 | 2 | % | |||||||||||||
Southwest Operations | 1,510 | 1,558 | (3) | % | 1,595 | 1,578 | 1 | % | |||||||||||||
Southern Appalachian Operations | 223 | 243 | (8) | % | 233 | 239 | (3) | % | |||||||||||||
Bakken Operations | 126 | 147 | (14) | % | 141 | 150 | (6) | % | |||||||||||||
Rockies Operations | 516 | 585 | (12) | % | 528 | 578 | (9) | % | |||||||||||||
Total natural gas processed | 8,476 | 8,558 | (1) | % | 8,632 | 8,540 | 1 | % | |||||||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||||||
Marcellus Operations | 464 | 440 | 5 | % | 460 | 430 | 7 | % | |||||||||||||
Utica Operations | 31 | 40 | (23) | % | 33 | 43 | (23) | % | |||||||||||||
Subtotal | 495 | 480 | 3 | % | 493 | 473 | 4 | % | |||||||||||||
Southwest Operations | 13 | 3 | 333 | % | 14 | 10 | 40 | % | |||||||||||||
Southern Appalachian Operations | 12 | 12 | — | % | 12 | 12 | — | % | |||||||||||||
Bakken Operations | 19 | 21 | (10) | % | 25 | 18 | 39 | % | |||||||||||||
Rockies Operations | 4 | 3 | 33 | % | 4 | 4 | — | % | |||||||||||||
Total C2 + NGLs fractionated | 543 | 519 | 5 | % | 548 | 517 | 6 | % | |||||||||||||
(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. Statistics for the three and six months ended June 30, 2019 are inclusive of predecessor operations. |
Reconciliation of Segment Adjusted EBITDA to Net Income (unaudited) | Three Months Ended | Six Months Ended | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | $ | 839 | $ | 821 | $ | 1,711 | $ | 1,649 | |||||||
G&P segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | 388 | 428 | 810 | 863 | |||||||||||
Adjusted EBITDA attributable to MPLX LP (including predecessor results) | 1,227 | 1,249 | 2,521 | 2,512 | |||||||||||
Depreciation and amortization | (321) | (313) | (646) | (614) | |||||||||||
Benefit (provision) for income taxes | — | 1 | — | 2 | |||||||||||
Amortization of deferred financing costs | (15) | (12) | (29) | (19) | |||||||||||
Non-cash equity-based compensation | (3) | (5) | (8) | (12) | |||||||||||
Impairment expense | — | — | (2,165) | — | |||||||||||
Net interest and other financial costs | (208) | (217) | (424) | (434) | |||||||||||
Income (loss) from equity method investments(a) | 89 | 83 | (1,095) | 160 | |||||||||||
Distributions/adjustments related to equity method investments | (115) | (132) | (239) | (254) | |||||||||||
Unrealized derivative (losses) gains(b) | (6) | — | 9 | (4) | |||||||||||
Acquisition costs | — | (4) | — | (5) | |||||||||||
Other | (1) | — | (2) | — | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | 8 | 7 | 17 | 14 | |||||||||||
Net income (loss) | $ | 655 | $ | 657 | $ | (2,061) | $ | 1,346 | |||||||
(a) | Includes impairment charges of $1,264 million for the six months ended June 30, 2020. |
(b) | 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 | Six Months Ended | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
L&S segment income from operations | $ | 681 | $ | 675 | $ | 1,404 | $ | 1,362 | |||||||
Depreciation and amortization | 138 | 134 | 276 | 260 | |||||||||||
Income from equity method investments | (40) | (54) | (90) | (99) | |||||||||||
Distributions/adjustments related to equity method investments | 57 | 60 | 114 | 114 | |||||||||||
Acquisition costs | — | 4 | — | 5 | |||||||||||
Non-cash equity-based compensation | 2 | 2 | 5 | 7 | |||||||||||
Other | 1 | — | 2 | — | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | 839 | 821 | 1,711 | 1,649 | |||||||||||
L&S predecessor segment adjusted EBITDA attributable to MPLX LP | — | (251) | — | (520) | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 839 | $ | 570 | $ | 1,711 | $ | 1,129 | |||||||
G&P Reconciliation of Segment Income from Operations to Segment Adjusted EBITDA (unaudited) | Three Months Ended | Six Months Ended | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
G&P segment income (loss) from operations | $ | 197 | $ | 210 | $ | (3,012) | $ | 435 | |||||||
Depreciation and amortization | 183 | 179 | 370 | 354 | |||||||||||
Impairment expense | — | — | 2,165 | — | |||||||||||
(Income) loss from equity method investments | (49) | (29) | 1,185 | (61) | |||||||||||
Distributions/adjustments related to equity method investments | 58 | 72 | 125 | 140 | |||||||||||
Unrealized derivative losses (gains)(a) | 6 | — | (9) | 4 | |||||||||||
Non-cash equity-based compensation | 1 | 3 | 3 | 5 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interest | (8) | (7) | (17) | (14) | |||||||||||
G&P segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | 388 | 428 | 810 | 863 | |||||||||||
G&P predecessor segment adjusted EBITDA attributable to MPLX LP | — | (78) | — | (142) | |||||||||||
G&P segment adjusted EBITDA attributable to MPLX LP | $ | 388 | $ | 350 | $ | 810 | $ | 721 | |||||||
(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
| Three Months Ended | Six Months Ended | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net income (loss) | $ | 655 | $ | 657 | $ | (2,061) | $ | 1,346 | |||||||
(Benefit) provision for income taxes | — | (1) | — | (2) | |||||||||||
Amortization of deferred financing costs | 15 | 12 | 29 | 19 | |||||||||||
Net interest and other financial costs | 208 | 217 | 424 | 434 | |||||||||||
Income (loss) from operations | 878 | 885 | (1,608) | 1,797 | |||||||||||
Depreciation and amortization | 321 | 313 | 646 | 614 | |||||||||||
Non-cash equity-based compensation | 3 | 5 | 8 | 12 | |||||||||||
Impairment expense | — | — | 2,165 | — | |||||||||||
(Income) loss from equity method investments | (89) | (83) | 1,095 | (160) | |||||||||||
Distributions/adjustments related to equity method investments | 115 | 132 | 239 | 254 | |||||||||||
Unrealized derivative losses (gains)(a) | 6 | — | (9) | 4 | |||||||||||
Acquisition costs | — | 4 | — | 5 | |||||||||||
Other | 1 | — | 2 | — | |||||||||||
Adjusted EBITDA | 1,235 | 1,256 | 2,538 | 2,526 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | (8) | (7) | (17) | (14) | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | (329) | — | (662) | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 1,227 | 920 | 2,521 | 1,850 | |||||||||||
Deferred revenue impacts | 40 | 22 | 63 | 31 | |||||||||||
Net interest and other financial costs | (208) | (217) | (424) | (434) | |||||||||||
Maintenance capital expenditures | (33) | (62) | (67) | (99) | |||||||||||
Maintenance capital expenditures reimbursements | 6 | 9 | 20 | 16 | |||||||||||
Equity method investment capital expenditures paid out | (4) | (4) | (11) | (8) | |||||||||||
Other | (1) | 10 | 3 | 10 | |||||||||||
Portion of DCF adjustments attributable to predecessor(b) | — | 63 | — | 132 | |||||||||||
DCF attributable to MPLX LP | 1,027 | 741 | 2,105 | 1,498 | |||||||||||
Preferred unit distributions(c) | (31) | (32) | (62) | (62) | |||||||||||
DCF attributable to GP and LP unitholders (excluding predecessor results) | 996 | 709 | 2,043 | 1,436 | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | 329 | — | 662 | |||||||||||
Portion of DCF adjustments attributable to predecessor(b) | — | (63) | — | (132) | |||||||||||
DCF attributable to GP and LP unitholders (including predecessor results) | $ | 996 | $ | 975 | $ | 2,043 | $ | 1,966 | |||||||
(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. |
Reconciliation of Net Income to LTM Pro forma adjusted EBITDA (unaudited) | Three Months Ended | ||||||
(In millions) | 2020 | 2019 | |||||
LTM Net (loss) income | $ | (1,945) | $ | 1,952 | |||
LTM Net income to adjusted EBITDA adjustments | 6,950 | 1,746 | |||||
LTM Adjusted EBITDA attributable to MPLX LP | 5,005 | 3,698 | |||||
LTM Pro forma/Predecessor adjustments for acquisitions | 108 | 2 | |||||
LTM Pro forma adjusted EBITDA | 5,113 | 3,700 | |||||
Consolidated debt | $ | 20,938 | $ | 14,517 | |||
Consolidated debt to adjusted EBITDA(a) | 4.1x | 3.9x | |||||
(a) | 2019 is shown as historically presented and has not been adjusted for predecessor impacts. |
Reconciliation of Adjusted EBITDA Attributable to | Three Months Ended | Six Months Ended | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net cash provided by operating activities | $ | 1,105 | $ | 1,101 | $ | 2,114 | $ | 1,954 | |||||||
Changes in working capital items | (100) | (84) | 12 | 112 | |||||||||||
All other, net | 4 | 8 | (26) | (7) | |||||||||||
Non-cash equity-based compensation | 3 | 5 | 8 | 12 | |||||||||||
Net (loss) gain on disposal of assets | (1) | 3 | (1) | 2 | |||||||||||
Current income taxes | 1 | (1) | 1 | — | |||||||||||
Net interest and other financial costs | 208 | 217 | 424 | 434 | |||||||||||
Asset retirement expenditures | — | 1 | — | 1 | |||||||||||
Unrealized derivative losses (gains)(a) | 6 | — | (9) | 4 | |||||||||||
Acquisition costs | — | 4 | — | 5 | |||||||||||
Other adjustments related to equity method investments | 8 | 2 | 13 | 9 | |||||||||||
Other | 1 | — | 2 | — | |||||||||||
Adjusted EBITDA | 1,235 | 1,256 | 2,538 | 2,526 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | (8) | (7) | (17) | (14) | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | (329) | — | (662) | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 1,227 | 920 | 2,521 | 1,850 | |||||||||||
Deferred revenue impacts | 40 | 22 | 63 | 31 | |||||||||||
Net interest and other financial costs | (208) | (217) | (424) | (434) | |||||||||||
Maintenance capital expenditures | (33) | (62) | (67) | (99) | |||||||||||
Maintenance capital expenditures reimbursements | 6 | 9 | 20 | 16 | |||||||||||
Equity method investment capital expenditures paid out | (4) | (4) | (11) | (8) | |||||||||||
Other | (1) | 10 | 3 | 10 | |||||||||||
Portion of DCF adjustments attributable to predecessor(b) | — | 63 | — | 132 | |||||||||||
DCF attributable to MPLX LP | 1,027 | 741 | 2,105 | 1,498 | |||||||||||
Preferred unit distributions(c) | (31) | (32) | (62) | (62) | |||||||||||
DCF attributable to GP and LP unitholders (excluding predecessor results) | 996 | 709 | 2,043 | 1,436 | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | 329 | — | 662 | |||||||||||
Portion of DCF adjustments attributable to predecessor(b) | — | (63) | — | (132) | |||||||||||
DCF attributable to GP and LP unitholders (including predecessor results) | $ | 996 | $ | 975 | $ | 2,043 | $ | 1,966 | |||||||
(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 | Six Months Ended | |||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Capital Expenditures: | |||||||||||||||
Maintenance | $ | 33 | $ | 62 | $ | 67 | $ | 99 | |||||||
Maintenance reimbursements | (6) | (9) | (20) | (16) | |||||||||||
Growth | 185 | 494 | 469 | 961 | |||||||||||
Growth reimbursements | — | (7) | — | (12) | |||||||||||
Total capital expenditures | 212 | 540 | 516 | 1,032 | |||||||||||
Less: Increase (decrease) in capital accruals | (111) | (6) | (172) | (77) | |||||||||||
Asset retirement expenditures | — | 1 | — | 1 | |||||||||||
Additions to property, plant and equipment, net(a) | 323 | 545 | 688 | 1,108 | |||||||||||
Investments in unconsolidated affiliates | 131 | 188 | 222 | 323 | |||||||||||
Acquisitions | — | (5) | — | (6) | |||||||||||
Total capital expenditures and acquisitions | 454 | 728 | 910 | 1,425 | |||||||||||
Less: Maintenance capital expenditures (including reimbursements) | 27 | 53 | 47 | 83 | |||||||||||
Acquisitions | — | (5) | — | (6) | |||||||||||
Total growth capital expenditures(b) | $ | 427 | $ | 680 | $ | 863 | $ | 1,348 | |||||||
(a) | This amount is represented in the Consolidated Statements of Cash Flows as Additions to property, plant and equipment after excluding growth and maintenance reimbursements. Reimbursements are shown as Contributions from MPC within the Financing activities section of the Consolidated Statements of Cash Flows. |
(b) | Amount excludes contributions from noncontrolling interests of $94 million for the six months ended June 30, 2019, as reflected in the financing section of our statement of cash flows. Also excludes a $69 million return of capital from our Wink to Webster Pipeline joint venture in the first quarter of 2020 and a $41 million return of capital from our Whistler Pipeline joint venture in the second quarter of 2020. These are reflected in the investing section of our statement of cash flows for the six months ended June 30, 2020. The table below shows our 2020 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. |
2020 adjusted growth capital expenditures | Three Months Ended | Six Months Ended | |||||
(In millions) | |||||||
Total growth capital expenditures | $ | 427 | $ | 863 | |||
Decrease in capital accruals | (111) | (172) | |||||
Capitalized interest | (9) | (21) | |||||
Return of Capital | (41) | (110) | |||||
Contributions from noncontrolling interests | — | — | |||||
Total adjusted growth capital expenditures | $ | 266 | $ | 560 | |||
View original content:http://www.prnewswire.com/news-releases/mplx-lp-reports-second-quarter-2020-financial-results-301104565.html
SOURCE MPLX LP
FINDLAY, Ohio, July 28, 2020 /PRNewswire/ -- The board of directors of the general partner of MPLX LP (NYSE: MPLX) has declared a quarterly cash distribution of $0.6875 per common unit for the second quarter of 2020, or $2.75 on an annualized basis.
This distribution is flat versus the first quarter of 2020 distribution and represents an increase of 3% over the second quarter 2019 distribution. The distribution will be paid on Aug. 14, 2020, to common unitholders of record as of Aug. 7, 2020.
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100 percent of MPLX's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MPLX's distributions to non-United States investors are subject to federal income tax withholding at the highest applicable effective tax rate.
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
Evan Barbosa, Manager, Investor Relations
Jim Mallamaci, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/mplx-lp-announces-quarterly-distribution-301101680.html
SOURCE MPLX LP
FINDLAY, Ohio, May 5, 2020 /PRNewswire/ --
MPLX LP (NYSE: MPLX) today reported a first-quarter 2020 net loss attributable to MPLX of $2.7 billion, compared with net income of $503 million for the first quarter of 2019. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) attributable to MPLX was $1.3 billion, compared with $1.3 billion in the first quarter of 2019. First-quarter 2020 results include non-cash impairment charges of $3.4 billion. These charges include a goodwill impairment associated with Marcellus gathering and processing assets, impairments of equity method investments primarily located in the Utica region, and long-lived asset impairments related to assets located in East Texas.
The Logistics and Storage (L&S) segment reported segment income from operations of $723 million and adjusted EBITDA of $872 million for the quarter, up $36 million and $44 million, respectively, versus the first quarter of last year. The Gathering and Processing (G&P) segment reported a segment loss from operations of $3.2 billion and adjusted EBITDA of $422 million for the quarter, down $3.4 billion and $13 million, respectively, versus the first quarter of last year. G&P results include the non-cash impairment charges discussed above.
During the quarter, MPLX generated $1.0 billion in net cash provided by operating activities and $1.1 billion of distributable cash flow. Distribution coverage was 1.44x for the first quarter of 2020. MPLX also announced a first-quarter 2020 distribution of $0.6875 per common unit, consistent with the prior quarter and a 4.6% increase over the prior year's first quarter.
"COVID-19 has created an extraordinary set of circumstances and challenges across the country, impacting the personal and professional lives of many, as well as the demand for hydrocarbons that we transport through our logistics assets," said Michael J. Hennigan, president and chief executive officer. "In this environment, we are taking proactive steps by reducing planned 2020 capital and operating expenses to offset the impacts from the related demand destruction, as well as potential impacts from the current commodity price environment on our Gathering and Processing business segment."
Spending Reductions for 2020
MPLX 2020 capital spending target reduced by over $700 million to approximately $1.0 billion.
The company also expects to reduce forecasted annual operating expenses by approximately $200 million, primarily through the deferral of certain expense projects.
MPLX is maintaining its goal to achieve positive free cash flow, after capital investments and distributions, in 2021.
Financial Highlights
Three Months Ended | |||||||
(In millions, except per unit and ratio data) | 2020 | 2019 | |||||
Net (loss) income attributable to MPLX | $ | (2,724) | $ | 503 | |||
Adjusted net income attributable to MPLX(a) | N/A | 683 | |||||
Adjusted EBITDA attributable to MPLX LP(b) | 1,294 | 1,263 | |||||
Net cash provided by operating activities | 1,009 | 853 | |||||
Distributable cash flow attributable to MPLX LP(b) | 1,078 | 1,021 | |||||
Distribution per common unit(c) | $ | 0.6875 | $ | 0.6575 | |||
Distribution coverage ratio(d) | 1.44x | 1.89x | |||||
Consolidated debt to adjusted EBITDA(e) | 4.1x | 3.9x | |||||
(a) | Includes net income attributable to predecessor for the three months ended March 31, 2019. The predecessor period represents the period prior to MPLX's acquisition of ANDX on July 30, 2019. |
(b) | Non-GAAP measures calculated before distributions to preferred unitholders. See reconciliation below. Includes adjusted EBITDA and DCF adjustments attributable to predecessor. For the three months ended March 31, 2019, adjusted EBITDA attributable to MPLX LP excluding predecessor results was $930 million. |
(c) | Distributions declared by the board of directors of MPLX's general partner. |
(d) | DCF attributable to GP and LP unitholders (including DCF attributable to predecessor) divided by total GP and LP distribution declared. For the three months ended March 31, 2019, DCF attributable to predecessor has been included with no corresponding distribution being declared by MPLX relating to the predecessor, resulting in a distribution coverage ratio of 1.89x. |
(e) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. See reconciliation below. 2019 is shown as historically presented and has not been adjusted for predecessor impacts. |
Segment Results (including predecessor)
(In millions) | Three Months Ended | ||||
Segment income (loss) from operations (unaudited) | 2020 | 2019 | |||
Logistics and Storage | $ | 723 | $ | 687 | |
Gathering and Processing | (3,209) | 225 | |||
Segment adjusted EBITDA attributable to MPLX LP (unaudited) | |||||
Logistics and Storage | 872 | 828 | |||
Gathering and Processing | $ | 422 | $ | 435 | |
Logistics & Storage
L&S segment income from operations and segment adjusted EBITDA for the first quarter of 2020 increased by $36 million and $44 million, respectively, compared to the same period in 2019. The increase was primarily due to increased pipeline volumes as well as growth in the marine business.
Total pipeline throughputs were 5.1 million barrels per day in the first quarter, an increase of 2% versus the same quarter of 2019. The average tariff rate was $0.88 per barrel for the quarter. Terminal throughput was 3 million barrels per day for the quarter, a decrease of 8% versus the same quarter of 2019.
Gathering & Processing
G&P segment income from operations and segment adjusted EBITDA for the first quarter of 2020 decreased by $3.4 billion and $13 million, respectively, compared to the same period in 2019. Year-over-year results were impacted by non-cash impairment charges primarily related to goodwill, equity method investments, and long-lived assets during the quarter. In the first quarter of 2020:
In the Marcellus and Utica:
Strategic Update
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, of which 100% of the contractible capacity is committed with minimum volume commitments, will originate in the Permian Basin and have destination points in the Houston market, including Marathon Petroleum Corporation's (NYSE: MPC) 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. Whistler is more than 90% committed with minimum volume commitments.
Financial Position and Liquidity
As of March 31, 2020, MPLX had $57 million in cash, $2.8 billion available through its bank revolving credit facility expiring in July 2024 and $1.5 billion available through its intercompany loan agreement with MPC. The company's leverage ratio was 4.1 times at March 31, 2020. 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 "2020 First-Quarter 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 Contact: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Evan Barbosa, Manager, Investor Relations
Jim Mallamaci, 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 DCF generated is considered by the board of directors of our general partner in approving the Partnership's cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) provision for income taxes; (iii) amortization of deferred financing costs; (iv) non-cash equity-based compensation; (v) net interest and other financial costs; (vi) income from equity method investments; (vii) distributions and adjustments related to equity method investments; (viii) unrealized derivative gains and losses; (ix) acquisition costs; (x) noncontrolling interest and (xi) other adjustments as deemed necessary. In general, we define DCF as adjusted EBITDA adjusted for (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items.
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record the realized gain or loss of the contract.
Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures.
DCF is a financial performance measure used by management as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders.
Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between the partnership's financial operating performance and cash distribution capability. We define the distribution coverage ratio as the ratio of DCF attributable to GP and LP unitholders to total GP and LP distributions declared.
Leverage ratio is a liquidity measure used by management, industry analysts, investors, lenders and rating agencies to analyze our ability to incur and service debt and fund capital expenditures.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX). These forward-looking statements relate to, among other things, MPLX's 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: the effects of the recent outbreak of COVID-19 and the adverse impact thereof on our business, financial condition, results of operations and cash flows, including our growth, operating costs, labor availability, logistical capabilities, customer demand for our services and industry demand generally, cash position, taxes, the price of our securities and trading markets with respect thereto, our ability to access capital markets, and the global economy and financial markets generally; the ability to reduce capital and operating expenses; the risk of further impairments; the risk that anticipated opportunities and any other synergies from or anticipated benefits of the Andeavor Logistics LP (ANDX) 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 as a result of the COVID-19 pandemic, other infectious disease outbreaks or otherwise; non-payment or non-performance by our producer and other customers; 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, 2019, and in Forms 10-Q and other filings, 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: the effects of the recent outbreak of COVID-19 and the adverse impact thereof on the business, financial condition, results of operations and cash flows, including, but not limited to, growth, operating costs, labor availability, logistical capabilities, customer demand for products and industry demand generally, margins, inventory value, cash position, taxes, the price of securities and trading markets with respect thereto, the ability to access capital markets, and the global economy and financial markets generally; the effects of the recent outbreak of COVID-19, and the current economic environment generally, on working capital, cash flows and liquidity, which can be significantly affected by decreases in commodity prices; the ability to reduce capital and operating expenses; 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, the ability to satisfy customary conditions, including obtaining regulatory approvals, and the ability to achieve the strategic and other objectives discussed herein; with respect to the Midstream review, the ability to achieve the strategic and other objectives 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 ANDX 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 as a result of the COVID-19 pandemic, other infectious disease outbreaks or otherwise; 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, 2019, and in Forms 10-Q and other filings, 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, Forms 10-Q and other SEC filings are available on the SEC's website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of MPC's Form 10-K, Forms 10-Q and other SEC filings are available on the SEC's 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 | |||||
(In millions, except per unit data) | 2020 | 2019 | |||
Revenues and other income: | |||||
Operating revenue | $ | 916 | $ | 963 | |
Operating revenue - related parties | 1,195 | 1,169 | |||
(Loss) income from equity method investments | (1,184) | 77 | |||
Other income | 65 | 26 | |||
Total revenues and other income | 992 | 2,235 | |||
Costs and expenses: | |||||
Operating expenses | 538 | 570 | |||
Operating expenses - related parties | 322 | 321 | |||
Depreciation and amortization | 325 | 301 | |||
Impairment expense | 2,165 | — | |||
General and administrative expenses | 97 | 101 | |||
Other taxes | 31 | 30 | |||
Total costs and expenses | 3,478 | 1,323 | |||
(Loss) income from operations | (2,486) | 912 | |||
Interest and other financial costs | 230 | 224 | |||
(Loss) income before income taxes | (2,716) | 688 | |||
(Benefit) provision for income taxes | — | (1) | |||
Net (loss) income | (2,716) | 689 | |||
Less: Net income attributable to noncontrolling interests | 8 | 6 | |||
Less: Net income attributable to Predecessor | — | 180 | |||
Net (loss) income attributable to MPLX LP | (2,724) | 503 | |||
Less: Series A preferred unit distributions | 20 | 20 | |||
Less: Series B preferred unit distributions | 11 | — | |||
Limited partners' interest in net (loss) income attributable to MPLX LP | $ | (2,755) | $ | 483 | |
Per Unit Data | |||||
Net (loss) income attributable to MPLX LP per limited partner unit: | |||||
Common - basic | $ | (2.60) | $ | 0.61 | |
Common - diluted | $ | (2.60) | $ | 0.61 | |
Weighted average limited partner units outstanding: | |||||
Common units – basic | 1,058 | 794 | |||
Common units – diluted | 1,058 | 795 | |||
Select Financial Statistics (unaudited) | Three Months Ended | ||||
(In millions, except ratio data) | 2020 | 2019 | |||
Common unit distributions declared by MPLX | |||||
Common units (LP) - public(a) | $ | 270 | $ | 191 | |
Common units - MPC(a) | 458 | 332 | |||
Total GP and LP distribution declared | 728 | 523 | |||
Preferred unit distributions(b) | |||||
Series A preferred unit distributions(c) | 20 | 20 | |||
Series B preferred unit distributions(d) | 11 | — | |||
Total preferred unit distributions | 31 | 20 | |||
Other Financial Data | |||||
Adjusted EBITDA attributable to MPLX LP(e)(f) | 1,294 | 1,263 | |||
DCF attributable to GP and LP unitholders(e)(f) | $ | 1,047 | $ | 991 | |
Distribution coverage ratio(g) | 1.44x | 1.89x | |||
Cash Flow Data | |||||
Net cash flow provided by (used in): | |||||
Operating activities | $ | 1,009 | $ | 853 | |
Investing activities | (362) | (700) | |||
Financing activities | $ | (605) | $ | (116) | |
(a) | The distribution on common units for the three months ended March 31, 2019 excludes 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) | 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. |
(c) | 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. |
(d) | 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. |
(e) | Non-GAAP measure. See reconciliation below. |
(f) | Includes predecessor EBITDA and DCF that is attributable to the period prior to the acquisition date of July 30, 2019. For the three months ended March 31, 2019, adjusted EBITDA attributable to MPLX LP excluding predecessor results was $930 million. |
(g) | 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 March 31, 2019, DCF attributable to predecessor has been included with no corresponding distribution being declared by MPLX, resulting in a distribution coverage ratio of 1.89x. |
Select Balance Sheet Data (unaudited) | |||||
(In millions, except ratio data) | March 31, | December 31, | |||
Cash and cash equivalents | $ | 57 | $ | 15 | |
Total assets | 37,006 | 40,430 | |||
Total long-term debt(a) | 20,471 | 20,307 | |||
Redeemable preferred units | 968 | 968 | |||
Total equity | $ | 13,356 | $ | 16,613 | |
Consolidated total debt to adjusted EBITDA(b) | 4.1x | 4.1x | |||
Partnership units outstanding: | |||||
MPC-held common units | 666 | 666 | |||
Public common units | 393 | 392 | |||
(a) | Outstanding intercompany borrowings were zero as of March 31, 2020 and $594 million as of December 31, 2019. Includes current portion of long-term debt. |
(b) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. Face value total debt includes approximately $393 million and $406 million of unamortized discount and debt issuance costs as of March 31, 2020 and December 31, 2019, respectively. |
Operating Statistics (unaudited)(a) | ||||||||
Three Months Ended | ||||||||
2020 | 2019 | % Change | ||||||
Logistics and Storage | ||||||||
Pipeline throughput (mbpd) | ||||||||
Crude oil pipelines | 3,210 | 3,105 | 3 | % | ||||
Product pipelines | 1,905 | 1,897 | 0 | % | ||||
Total pipelines | 5,115 | 5,002 | 2 | % | ||||
Average tariff rates ($ per barrel) | ||||||||
Crude oil pipelines | $ | 0.93 | $ | 0.96 | (3) | % | ||
Product pipelines | 0.79 | 0.68 | 16 | % | ||||
Total pipelines | $ | 0.88 | $ | 0.85 | 4 | % | ||
Terminal throughput (mbpd) | 2,966 | 3,220 | (8) | % | ||||
Barges at period-end | 305 | 256 | 19 | % | ||||
Towboats at period-end | 23 | 23 | — | % |
(a) | Three months ended March 31, 2019 is inclusive of predecessor operations. |
Gathering and Processing Operating Statistics (unaudited) - Consolidated(a) | Three Months Ended | |||||||||
2020 | 2019 | % Change | ||||||||
Gathering throughput (mmcf/d) | ||||||||||
Marcellus Operations | 1,420 | 1,282 | 11 | % | ||||||
Utica Operations(b) | — | — | — | % | ||||||
Southwest Operations | 1,557 | 1,581 | (2) | % | ||||||
Bakken Operations | 156 | 152 | 3 | % | ||||||
Rockies Operations | 592 | 642 | (8) | % | ||||||
Total gathering throughput | 3,725 | 3,657 | 2 | % | ||||||
Natural gas processed (mmcf/d) | ||||||||||
Marcellus Operations | 4,198 | 4,152 | 1 | % | ||||||
Utica Operations(b) | — | — | — | % | ||||||
Southwest Operations | 1,648 | 1,599 | 3 | % | ||||||
Southern Appalachian Operations | 243 | 235 | 3 | % | ||||||
Bakken Operations | 156 | 152 | 3 | % | ||||||
Rockies Operations | 539 | 570 | (5) | % | ||||||
Total natural gas processed | 6,784 | 6,708 | 1 | % | ||||||
C2 + NGLs fractionated (mbpd) | ||||||||||
Marcellus Operations | 456 | 420 | 9 | % | ||||||
Utica Operations(b) | — | — | — | % | ||||||
Southwest Operations | 15 | 17 | (12) | % | ||||||
Southern Appalachian Operations | 12 | 13 | (8) | % | ||||||
Bakken Operations | 31 | 16 | 94 | % | ||||||
Rockies Operations | 5 | 4 | 25 | % | ||||||
Total C2 + NGLs fractionated | 519 | 470 | 10 | % | ||||||
(a) | Includes operating data for entities that have been consolidated into the MPLX financial statements. Three months ended March 31, 2019 is inclusive of predecessor operations. |
(b) | The Utica region relates to operations for partnership-operated equity method investments and thus does not have any operating statistics from a consolidated perspective. See table below for details on Utica. |
Gathering and Processing Operating Statistics (unaudited) - Operated(a) | Three Months Ended | |||||||
2020 | 2019 | % Change | ||||||
Gathering throughput (mmcf/d) | ||||||||
Marcellus Operations | 1,420 | 1,282 | 11 | % | ||||
Utica Operations | 1,800 | 2,109 | (15) | % | ||||
Subtotal | 3,220 | 3,391 | (5) | % | ||||
Southwest Operations | 1,601 | 1,581 | 1 | % | ||||
Bakken Operations | 156 | 152 | 3 | % | ||||
Rockies Operations | 775 | 827 | (6) | % | ||||
Total gathering throughput | 5,752 | 5,951 | (3) | % | ||||
Natural gas processed (mmcf/d) | ||||||||
Marcellus Operations | 5,522 | 5,148 | 7 | % | ||||
Utica Operations | 648 | 817 | (21) | % | ||||
Subtotal | 6,170 | 5,965 | 3 | % | ||||
Southwest Operations | 1,679 | 1,599 | 5 | % | ||||
Southern Appalachian Operations | 243 | 235 | 3 | % | ||||
Bakken Operations | 156 | 152 | 3 | % | ||||
Rockies Operations | 539 | 570 | (5) | % | ||||
Total natural gas processed | 8,787 | 8,521 | 3 | % | ||||
C2 + NGLs fractionated (mbpd) | ||||||||
Marcellus Operations | 456 | 420 | 9 | % | ||||
Utica Operations | 34 | 44 | (23) | % | ||||
Subtotal | 490 | 464 | 6 | % | ||||
Southwest Operations | 15 | 17 | (12) | % | ||||
Southern Appalachian Operations | 12 | 13 | (8) | % | ||||
Bakken Operations | 31 | 16 | 94 | % | ||||
Rockies Operations | 5 | 4 | 25 | % | ||||
Total C2 + NGLs fractionated | 553 | 514 | 8 | % | ||||
(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. Three months ended March 31, 2019 is inclusive of predecessor operations. |
Reconciliation of Segment Adjusted EBITDA to Net Income (unaudited) | ||||||
Three Months Ended | ||||||
(In millions) | 2020 | 2019 | ||||
L&S segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | $ | 872 | $ | 828 | ||
G&P segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | 422 | 435 | ||||
Adjusted EBITDA attributable to MPLX LP (including predecessor results) | 1,294 | 1,263 | ||||
Depreciation and amortization | (325) | (301) | ||||
Benefit (provision) for income taxes | — | 1 | ||||
Amortization of deferred financing costs | (14) | (7) | ||||
Loss on extinguishment of debt | — | — | ||||
Non-cash equity-based compensation | (5) | (7) | ||||
Impairment expense | (2,165) | — | ||||
Net interest and other financial costs | (216) | (217) | ||||
(Loss) income from equity method investments(a) | (1,184) | 77 | ||||
Distributions/adjustments related to equity method investments | (124) | (122) | ||||
Unrealized derivative (losses) gains(b) | 15 | (4) | ||||
Acquisition costs | — | (1) | ||||
Other | (1) | — | ||||
Adjusted EBITDA attributable to noncontrolling interests | 9 | 7 | ||||
Net (loss) income | $ | (2,716) | $ | 689 | ||
(a) | Includes impairment charges of $1,264 million for the three months ended March 31, 2020. |
(b) | 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 | ||||||
(In millions) | 2020 | 2019 | ||||
L&S segment income from operations | $ | 723 | $ | 687 | ||
Depreciation and amortization | 138 | 126 | ||||
Income from equity method investments | (50) | (45) | ||||
Distributions/adjustments related to equity method investments | 57 | 54 | ||||
Acquisition costs | — | 1 | ||||
Non-cash equity-based compensation | 3 | 5 | ||||
Other | 1 | — | ||||
L&S segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | 872 | 828 | ||||
L&S predecessor segment adjusted EBITDA attributable to MPLX LP | — | (269) | ||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 872 | $ | 559 | ||
G&P Reconciliation of Segment Income from Operations to Segment Adjusted EBITDA (unaudited) | ||||||
Three Months Ended | ||||||
(In millions) | 2020 | 2019 | ||||
G&P segment (loss) income from operations | $ | (3,209) | $ | 225 | ||
Depreciation and amortization | 187 | 175 | ||||
Impairment expense | 2,165 | — | ||||
Loss (income) from equity method investments | 1,234 | (32) | ||||
Distributions/adjustments related to equity method investments | 67 | 68 | ||||
Unrealized derivative (gains) losses(a) | (15) | 4 | ||||
Non-cash equity-based compensation | 2 | 2 | ||||
Adjusted EBITDA attributable to noncontrolling interest | (9) | (7) | ||||
G&P segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | 422 | 435 | ||||
G&P predecessor segment adjusted EBITDA attributable to MPLX LP | — | (64) | ||||
G&P segment adjusted EBITDA attributable to MPLX LP | $ | 422 | $ | 371 | ||
(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 | ||||||
(In millions) | 2020 | 2019 | ||||
Net (loss) income | $ | (2,716) | $ | 689 | ||
(Benefit) provision for income taxes | — | (1) | ||||
Amortization of deferred financing costs | 14 | 7 | ||||
Net interest and other financial costs | 216 | 217 | ||||
(Loss) income from operations | (2,486) | 912 | ||||
Depreciation and amortization | 325 | 301 | ||||
Non-cash equity-based compensation | 5 | 7 | ||||
Impairment expense | 2,165 | — | ||||
Loss (Income) from equity method investments | 1,184 | (77) | ||||
Distributions/adjustments related to equity method investments | 124 | 122 | ||||
Unrealized derivative (gains) losses(a) | (15) | 4 | ||||
Acquisition costs | — | 1 | ||||
Other | 1 | — | ||||
Adjusted EBITDA | 1,303 | 1,270 | ||||
Adjusted EBITDA attributable to noncontrolling interests | (9) | (7) | ||||
Adjusted EBITDA attributable to predecessor(b) | — | (333) | ||||
Adjusted EBITDA attributable to MPLX LP | 1,294 | 930 | ||||
Deferred revenue impacts | 23 | 9 | ||||
Net interest and other financial costs | (216) | (217) | ||||
Maintenance capital expenditures | (34) | (37) | ||||
Maintenance capital expenditures reimbursements | 14 | 7 | ||||
Equity method investment capital expenditures paid out | (7) | (4) | ||||
Other | 4 | — | ||||
Portion of DCF adjustments attributable to predecessor(b) | — | 69 | ||||
DCF attributable to MPLX LP | 1,078 | 757 | ||||
Preferred unit distributions(c) | (31) | (30) | ||||
DCF attributable to GP and LP unitholders (excluding predecessor results) | 1,047 | 727 | ||||
Adjusted EBITDA attributable to predecessor(b) | — | 333 | ||||
Portion of DCF adjustments attributable to predecessor(b) | — | (69) | ||||
DCF attributable to GP and LP unitholders (including predecessor results) | $ | 1,047 | $ | 991 | ||
(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. |
Reconciliation of Net Income to LTM Pro forma adjusted EBITDA (unaudited) | |||||
Three Months Ended | |||||
(In millions) | 2020 | 2019 | |||
LTM Net (loss) income | $ | (1,943) | $ | 1,920 | |
LTM Net income to adjusted EBITDA adjustments | 6,641 | 1,725 | |||
LTM Adjusted EBITDA attributable to MPLX LP | 4,698 | 3,645 | |||
LTM Pro forma/Predecessor adjustments for acquisitions | 437 | 4 | |||
LTM Pro forma adjusted EBITDA | 5,135 | 3,649 | |||
Consolidated debt | $ | 20,864 | $ | 14,283 | |
Consolidated debt to adjusted EBITDA(a) | 4.1x | 3.9x | |||
(a) | 2019 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 | |||||
(In millions) | 2020 | 2019 | |||
Net cash provided by operating activities | $ | 1,009 | $ | 853 | |
Changes in working capital items | 112 | 196 | |||
All other, net | (30) | (15) | |||
Non-cash equity-based compensation | 5 | 7 | |||
Net gain (loss) on disposal of assets | — | (1) | |||
Current income taxes | — | 1 | |||
Net interest and other financial costs | 216 | 217 | |||
Unrealized derivative (gains) losses(a) | (15) | 4 | |||
Acquisition costs | — | 1 | |||
Other adjustments related to equity method investments | 5 | 7 | |||
Other | 1 | — | |||
Adjusted EBITDA | 1,303 | 1,270 | |||
Adjusted EBITDA attributable to noncontrolling interests | (9) | (7) | |||
Adjusted EBITDA attributable to predecessor(b) | — | (333) | |||
Adjusted EBITDA attributable to MPLX LP | 1,294 | 930 | |||
Deferred revenue impacts | 23 | 9 | |||
Net interest and other financial costs | (216) | (217) | |||
Maintenance capital expenditures | (34) | (37) | |||
Maintenance capital expenditures reimbursements | 14 | 7 | |||
Equity method investment capital expenditures paid out | (7) | (4) | |||
Other | 4 | — | |||
Portion of DCF adjustments attributable to predecessor(b) | — | 69 | |||
DCF attributable to MPLX LP | 1,078 | 757 | |||
Preferred unit distributions(c) | (31) | (30) | |||
DCF attributable to GP and LP unitholders (excluding predecessor results) | 1,047 | 727 | |||
Adjusted EBITDA attributable to predecessor(b) | — | 333 | |||
Portion of DCF adjustments attributable to predecessor(b) | — | (69) | |||
DCF attributable to GP and LP unitholders (including predecessor results) | $ | 1,047 | $ | 991 | |
(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 | |||||
(In millions) | 2020 | 2019 | |||
Capital Expenditures: | |||||
Maintenance | $ | 34 | $ | 37 | |
Maintenance reimbursements | (14) | (7) | |||
Growth | 284 | 467 | |||
Growth reimbursements | — | (5) | |||
Total capital expenditures | 304 | 492 | |||
Less: Increase (decrease) in capital accruals | (61) | (71) | |||
Additions to property, plant and equipment, net(a) | 365 | 563 | |||
Investments in unconsolidated affiliates | 91 | 135 | |||
Acquisitions | — | (1) | |||
Total capital expenditures and acquisitions | 456 | $ | 697 | ||
Less: Maintenance capital expenditures (including reimbursements) | 20 | 30 | |||
Acquisitions | — | (1) | |||
Total growth capital expenditures(b) | $ | 436 | $ | 668 | |
(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 zero and $94 million for the three months ended March 31, 2020 and 2019, respectively, as reflected in the financing section of our statement of cash flows. Also excludes a $69 million return of capital from our Wink to Webster joint venture which is reflected in the investing section of our statement of cash flows for the three months ended March 31, 2020. The table below shows our 2020 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. |
2020 adjusted growth capital expenditures | Three Months Ended | |
(In millions) | ||
Total growth capital expenditures | $ | 436 |
Decrease in capital accruals | (61) | |
Capitalized interest | (12) | |
Return of Capital | (69) | |
Contributions from noncontrolling interests | — | |
Total adjusted growth capital expenditures | $ | 294 |
View original content:http://www.prnewswire.com/news-releases/mplx-lp-reports-first-quarter-2020-financial-results-301052814.html
SOURCE MPLX LP
FINDLAY, Ohio, April 30, 2020 /PRNewswire/ -- The board of directors of the general partner of MPLX LP (NYSE: MPLX) has elected Michael J. Hennigan as chairman, succeeding retiring chairman Gary R. Heminger. Hennigan's appointment became effective April 29. Hennigan is president and chief executive officer of the general partner of MPLX LP, and has been a director since 2017.
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
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/board-of-mplx-lp-general-partner-elects-michael-j-hennigan-as-chairman-301050062.html
SOURCE MPLX LP
FINDLAY, Ohio, April 30, 2020 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) announced today that board member John P. Surma has been elected by the board of directors to serve as non-executive chairman of the board. MPC also announced today that MPC President and Chief Executive Officer Michael J. Hennigan has been elected to serve as a member of the board. Both appointments became effective April 29.
Surma, a member of the MPC board of directors since 2011, retired as chief executive officer of United States Steel Corporation in September 2013 and as executive chairman in December 2013. He is a member of the boards of directors of MPLX GP LLC, Public Service Enterprise Group, Inc. and Trane Technologies plc.
Hennigan assumed his role as president and chief executive officer of MPC in March. He also serves as president and chief executive officer of the general partner of MPC's sponsored master limited partnership, MPLX LP (NYSE: MPLX). Prior to joining MPLX in 2017, Hennigan was president of crude, NGL and refined products of the general partner of Energy Transfer Partners L.P.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with more than 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company which owns and operates gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure. More information is available at www.marathonpetroleum.com.
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Taryn Erie, Manager, Investor Relations
Brian Worthington, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Communications (419) 421-2521
Jamal Kheiry, Manager, Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-board-of-directors-elects-john-p-surma-as-chairman-and-michael-j-hennigan-as-new-director-301050065.html
SOURCE Marathon Petroleum Corporation
FINDLAY, Ohio, April 28, 2020 /PRNewswire/ -- The board of directors of the general partner of MPLX LP (NYSE: MPLX) has declared a quarterly cash distribution of $0.6875 per common unit for the first quarter of 2020, or $2.75 on an annualized basis.
This distribution is flat versus the fourth quarter of 2019 distribution and represents an increase of 4.6% over the first quarter 2019 distribution. The distribution will be paid on May 15, 2020, to common unitholders of record as of May 8, 2020.
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100 percent of MPLX's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MPLX's distributions to non-United States investors are subject to federal income tax withholding at the highest applicable effective tax rate.
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
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/mplx-lp-announces-quarterly-distribution-301048827.html
SOURCE MPLX LP
FINDLAY, Ohio, April 3, 2020 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), has rescheduled its 2020 first-quarter earnings conference call to Tuesday, May 5, at 11 a.m. EDT. During the conference call, company executives will discuss 2020 first-quarter financial results, which will be released earlier that day, and provide an update on company operations.
Interested parties may listen to the conference call by visiting MPLX's website at http://www.mplx.com and clicking on the "2020 First-Quarter Financial Results" link. A replay of the conference call will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
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
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/mplx-lp-reschedules-2020-first-quarter-earnings-call-to-may-5-301034847.html
SOURCE MPLX LP
DENVER, March 30, 2020 /PRNewswire/ -- John M. Fox, beneficial owner of 1,427,826 common units of MPLX LP and 62,583 shares of Marathon Petroleum Company, today released the following open letter to the board of directors of Marathon Petroleum Corporation (MPC) and MPLX LP (MPLX) outlining his support of management. Mr. Fox believes that recent decisions to appoint Michael Hennigan as CEO of MPC, maintain the current structure and direction of MPLX, and to downsize capex in line with current industry conditions are keys to generating long-term MPC and MPLX value for shareholders, and that the board of directors is working diligently to ensure all of the above are delivered.
Please see disclosures at the end of this release.
The full text of the letter follows:
March 30, 2020
Board of Directors
Marathon Petroleum Corporation
539 S Main St
FINDLAY, OH 45840-3229
Attention:
To the Board of Directors of Marathon Petroleum Corporation:
I am writing to express my support …
As you know I am the Founder and a former Chairman, Chief Executive Officer and director of MarkWest Energy GP, L.L.C. As of this date, through the merger of MPLX and MarkWest on December 4, 2015, and from follow-on investment, I am the beneficial owner of 1,427,826 common units of MPLX LP and 62,583 shares of Marathon Petroleum Corporation.
In the past I have had some differences with Marathon, but with Gary Heminger's leadership in guiding the company through the Andeavor acquisition and the board's subsequent decision to maintain the MPLX LP structure and to appoint Michael J. Hennigan as the new CEO, Marathon is now positioned for a very robust future. Gary announced in the annual report that the cost synergies from the Andeavor acquisition are ahead of schedule and now amount to $1.4 billion from the initially estimated $1 billion. The spin-off of Speedway's impressive 4,000 convenience store network across the country by the end 2020 is an added bonus.
After careful consideration, the special committee of the board concluded that Marathon's 63% interest in MPLX is best served by keeping the MPLX MLP structure the same. MPLX provides MPC with a steady and growing distribution stream of $1.8 billion per year and helps immensely in mitigating the cyclical nature of the refining business. It is my judgement that as investors learn more about the powerful complementary combination of Marathon and Andeavor, and begin to recognize the underlying value of the growth engine at MPLX, that both MPC and MPLX holders will be well rewarded.
Finally, Michael Hennigan is an excellent choice as the CEO to lead both MPC and MPLX into the future. Not only does he have extensive experience in the refining business from his thirty years of operational, financial planning, and marketing experience at Sunoco Inc., but he has had extensive midstream experience leading MPLX as CEO since 2017. Michael started out as a young engineer at Sunoco's Marcus Hook refinery in 1981 and after a distinguished career and increasing responsibility was named chief executive officer of Sunoco Logistics in 2012.
The COVID-19 virus has been a setback for all of us, but as we emerge from this crisis, I think the financial strength and commitment to operational excellence at MPC and MPLX will lead to attractive shareholder returns. As a shareholder of MPC and a unitholder of MPLX LP, I strongly support the Board's recent decisions for the future of both companies.
Sincerely,
John Fox
About John M. Fox
John Fox is the founder, former CEO, and Chairman of MarkWest Energy GP, L.L.C. ("MarkWest GP"), the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial owner of 1,427,826 MPLX common units, and 62,583 shares of Marathon Petroleum Company, through its merger with MarkWest in 2015 and from follow-on investments.
Disclosure:
John Fox is providing this material for general informational purposes only. None of the information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those of Mr. Fox as of March 30, 2020 and are subject to change at any time due to changes in market, economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other member of the Fox family. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
SOURCE John M. Fox
FINDLAY, Ohio, March 20, 2020 /PRNewswire/ -- MPLX LP (NYSE: MPLX) today announced that the company's 2019 investor tax packages are available on its website, http://www.mplx.com. Investors may select the Tax Reporting Package link under the Investors tab, or use the following link: http://www.mplx.com/Investors/Tax_Reporting_Package/.
Investor tax packages for Andeavor Logistics LP, acquired by MPLX in July 2019, will be available on the MPLX website at the link noted above, or at https://www.taxpackagesupport.com/andeavor.
MPLX plans to mail tax packages for both MPLX LP and Andeavor Logistics LP beginning on March 23, 2020. Questions regarding the 2019 Tax Reporting Packages, can be addressed by contacting (800) 232-0011 and (877) 259-6330 (both toll free) for MPLX LP and Andeavor Logistics LP, respectively.
Investors in Andeavor Logistics LP who did not dispose of all of their units on or before July 30, 2019, will also receive an investor tax package from MPLX LP. Such investors will need both tax packages in order to prepare their 2019 federal and state income tax returns.
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
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/mplx-lp-and-andeavor-logistics-lp-2019-k-1-tax-packages-now-available-on-company-website-301027546.html
SOURCE MPLX LP
FINDLAY, Ohio, Jan. 29, 2020 /PRNewswire/ --
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 | ||||||||||||||||||
(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 | |||||||||||||||
Adjusted EBITDA attributable to MPLX LP (including | 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 | Year Ended | ||||||||||||||
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 | ||||||||||||||||
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:
In the Marcellus and Utica, the company continued to experience significant year-over-year growth:
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 | ||||||||||||||
(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 | |||||||
Per Unit Data | |||||||||||||||
Net (loss) income attributable to MPLX LP per limited | |||||||||||||||
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 | |||||||||||||
(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 | |||||||||||
Adjusted EBITDA attributable to MPLX LP (including | 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 |
(b) | Distributions to MPC exclude $12.5 million in distributions waived by MPC in connection with MPLX's acquisition of ANDX with ANDX |
(c) | Includes MPLX distributions declared on the Series A and Series B preferred units as well as distributions earned on the Series B |
(d) | Series A preferred units are considered redeemable securities due to the existence of redemption provisions upon a deemed |
(e) | As a result of the ANDX acquisition, 600,000 ANDX preferred units were converted into 600,000 preferred units of MPLX (the "Series |
(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 |
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 $431 million of unamortized discount and debt issuance costs as of December 31, 2019 and December 31, 2018, respectively. |
Operating Statistics (unaudited)(a) | |||||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||
2019 | 2018 | % | 2019 | 2018 | % | ||||||||||||||||
Logistics and Storage | |||||||||||||||||||||
Pipeline throughput (mbpd) | |||||||||||||||||||||
Crude oil pipelines | 3,196 | 3,214 | (1) | % | 3,228 | 3,121 | 3 | % | |||||||||||||
Product pipelines | 1,923 | 1,943 | (1) | % | 1,886 | 1,823 | 3 | % | |||||||||||||
Total pipelines | 5,119 | 5,157 | (1) | % | 5,114 | 4,944 | 3 | % | |||||||||||||
Average tariff rates ($ 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 | |||||||||||||||||||
2019 |
2018 | % |
2019 | 2018 | % | ||||||||||||||||
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 |
Gathering and Processing | Three Months Ended | Twelve Months Ended | |||||||||||||||||||
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 |
Reconciliation of Segment Adjusted EBITDA to Net | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 853 | $ | 809 | $ | 3,351 | $ | 2,319 | |||||||
G&P segment adjusted EBITDA attributable to MPLX LP | 466 | 437 | 1,753 | 1,491 | |||||||||||
Adjusted EBITDA attributable to MPLX LP (including | 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 | (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 |
L&S Reconciliation of Segment Income from | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(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 | |||||||||||
L&S predecessor segment adjusted EBITDA attributable to | — | (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 | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(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 | |||||||||||
G&P predecessor segment adjusted EBITDA attributable to | — | (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 |
Reconciliation of Adjusted EBITDA Attributable to MPLX
| |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(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 | |||||||||||
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) | |||||||||||
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) | |||||||||||
Other | (4) | 7 | 12 | 8 | |||||||||||
Portion of DCF adjustments attributable to | — | 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 | 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 | $ | 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 |
(b) | The adjusted EBITDA and DCF adjustments related to predecessor are excluded from adjusted EBITDA attributable to MPLX LP and |
(c) | Includes MPLX distributions declared on the Series A and Series B preferred units as well as cash distributions earned by the Series |
Reconciliation of Net Income to LTM Pro forma adjusted EBITDA (unaudited) | |||||||
Year Ended | |||||||
(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 | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(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 | |||||||||||
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 | |||||||||||
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 | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | 335 | 770 | 335 | |||||||||||
Portion of DCF adjustments attributable to | — | (81) | (159) | (81) | |||||||||||
DCF attributable to GP and LP unitholders (including | $ | 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 |
(b) | The adjusted EBITDA and DCF adjustments related to predecessor are excluded from adjusted EBITDA attributable to MPLX LP and |
(c) | Includes MPLX distributions declared on the Series A and Series B preferred units as well as cash distributions earned by the Series |
Capital Expenditures (unaudited) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(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 | |||||||||||
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 |
(b) | Amount excludes contributions from noncontrolling interests of $95 million and $11 million for the year ended December 21, 2019 and 2018, |
2019 adjusted growth capital expenditures |
Year Ended | ||
(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 |
View original content:http://www.prnewswire.com/news-releases/mplx-lp-reports-fourth-quarter-and-full-year-financial-results-300995208.html
SOURCE MPLX LP
FINDLAY, Ohio, Jan. 29, 2020 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported net income of $443 million, or $0.68 per diluted share, for the fourth quarter of 2019 compared to $951 million, or $1.35 per diluted share, for the fourth quarter of 2018.
Fourth-quarter 2019 results include a pre-tax charge of $1.2 billion primarily related to a midstream goodwill impairment related to MPLX LP (NYSE: MPLX). Details on this and other adjustments are shown in the accompanying release tables. Adjusted net income was $1.0 billion, or $1.56 per diluted share, for the fourth quarter of 2019, compared to $1.7 billion, or $2.41 per diluted share, for the fourth quarter of 2018.
MPC returned $409 million of capital to shareholders during the fourth quarter and $3.3 billion for the full year 2019, including $2.0 billion of share repurchases. In addition, the company announced a 9.4% increase in its quarterly dividend to $0.58 per share.
"This quarter demonstrated our continued ability to execute across all segments and capture incremental synergies at an accelerated pace," said Gary R. Heminger, chairman and chief executive officer. "In refining, we continued our focus on margin enhancement opportunities and progressed several projects including completion of the first phase of the Garyville coker expansion project. Our commercial team optimized crude sourcing and product placement opportunities across all regions of our business. The team's commitment to execution enabled us to achieve 94% utilization and strong capture of 105% for the quarter. Across the retail footprint, our team converted over 700 stores since the combination, positioning us to capture merchandise growth and synergy opportunities. And within midstream, we advanced several long-haul pipeline projects that are key to the development of our integrated Permian-to-Gulf Coast logistics system and are expected to generate returns that meaningfully exceed our hurdle rates.
"As we look into 2020, we are optimistic about the prospects for our business," continued Heminger. "With continuous progress of high-grading our midstream project backlog, MPLX is targeting positive free cash flow, after capital investments and distributions, in 2021. We are progressing the Speedway separation while continuing to identify opportunities to grow merchandise margins through store conversions and remodels. In refining, we have made significant enhancements in the operations and reliability of the assets we acquired. And we continue to believe that the configuration and upgrading capacity at our coastal refineries positions us well to capture the market opportunities that are expected to arise from implementation of IMO 2020 regulations."
Synergies
MPC realized $420 million of synergies in the fourth quarter. The majority of the synergy capture was in the Refining and Marketing segment, including: $62 million from catalyst formulation improvements at multiple refineries, $55 million in crude supply optimization in the Mid-Continent region, and $15 million in marine optimization.
The company realized $1.1 billion of total synergies in 2019, exceeding the targeted $600 million of annual gross run-rate synergies. The majority of the synergy capture for the year related to operational and commercial performance in the Refining and Marketing segment, including: $128 million in catalyst formulation enhancements at seven refineries, $76 million in turnaround execution improvements at the Los Angeles, Martinez, and St. Paul Park refineries, $127 million in crude supply optimization in the Mid-Continent region, and $25 million in improved crude sourcing for the West Coast refineries. The company also realized $121 million of synergies in the Retail segment associated with economies of scale and the application of the Speedway merchandise model at newly converted stores. Lastly, MPC realized $24 million of synergies in the Midstream segment and $109 million of corporate synergies. Corporate synergies were driven by cost eliminations and contract negotiations made possible by the combination.
Segment Results
Income from operations was $841 million in the fourth quarter of 2019 compared to $2.0 billion for the fourth quarter of 2018. Adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $3.2 billion in the fourth quarter of 2019 compared to $4.1 billion for the fourth quarter of 2018. Adjusted EBITDA excludes refining planned turnaround costs of $153 million for the fourth quarter of 2019 and $232 million for the fourth quarter of 2018.
Full-year income from operations was $5.6 billion in 2019 compared to $5.6 billion in 2018. Adjusted EBITDA was $11.1 billion in 2019 compared to $9.7 billion in 2018. Full-year adjusted EBITDA excludes refining planned turnaround costs of $740 million and $664 million for 2019 and 2018, respectively.
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||
Income from Operations by Segment | |||||||||||
Refining & Marketing | $ | 912 | $ | 923 | $ | 2,367 | $ | 2,481 | |||
Retail | 477 | 613 | 1,582 | 1,028 | |||||||
Midstream | 889 | 889 | 3,594 | 2,752 | |||||||
Items not allocated to segments: | |||||||||||
Corporate and other unallocated items | (237) | (233) | (805) | (502) | |||||||
Equity method investment restructuring gains | 52 | — | 259 | — | |||||||
Transaction-related costs | (13) | (183) | (160) | (197) | |||||||
Litigation | — | — | (22) | — | |||||||
Impairments | (1,239) | 8 | (1,239) | 9 | |||||||
Income from operations | $ | 841 | $ | 2,017 | $ | 5,576 | $ | 5,571 |
Midstream
Midstream segment income from operations, which primarily reflects the results of MPLX, was $889 million in the fourth quarter of 2019 compared with $889 million for the fourth quarter of 2018.
Segment EBITDA was $1.2 billion in the fourth quarter of 2019 versus $1.2 billion for the fourth quarter of 2018. Strong performance across MPLX's base business included increased terminal throughputs. During the quarter, MPLX brought three natural gas processing plants and a fractionation plant online. Additionally, gathered, processed, and fractionated volumes all increased in the fourth quarter of 2019 compared to the fourth quarter of 2018, primarily due to continued growth in the Northeast region.
Full-year income from operations was $3.6 billion for 2019, compared with $2.8 billion for 2018. Segment EBITDA was $4.9 billion for 2019, versus $3.6 billion for 2018.
Retail
Retail segment income from operations was $477 million in the fourth quarter of 2019 compared with $613 million for the fourth quarter of 2018. Segment EBITDA was $636 million in the fourth quarter of 2019 versus $738 million for the fourth quarter of 2018. The decrease in quarterly results was primarily due to lower fuel margins, partially offset by higher merchandise margin contributions.
Retail fuel margin decreased to 28.65 cents per gallon in the fourth quarter of 2019, from 32.35 cents per gallon in the fourth quarter of 2018. Same-store merchandise sales increased by 4.7% year-over-year and same-store gasoline sales volume decreased by 4.2% year-over-year.
Full-year income from operations was $1.6 billion in 2019, compared with $1.0 billion in 2018. Segment EBITDA was $2.1 billion in 2019, versus $1.4 billion in 2018.
Refining & Marketing (R&M)
R&M segment income from operations was $912 million in the fourth quarter of 2019 compared to $923 million for the fourth quarter of 2018. Fourth-quarter 2019 results included a benefit of $153 million for the biodiesel blender's tax credit attributable to volumes blended in 2018 and the first three quarters of 2019. The benefit was recognized in the fourth quarter since the legislation authorizing the credit was enacted in December 2019. Fourth-quarter 2018 results included estimated costs of $759 million due to purchase accounting-related inventory effects.
Segment adjusted EBITDA was $1.5 billion in the fourth quarter of 2019, versus $2.3 billion for the fourth quarter of 2018. Segment adjusted EBITDA excludes refinery planned turnaround costs, which totaled $153 million in the fourth quarter of 2019 and $232 million in the fourth quarter of 2018. The quarter-over-quarter decrease in R&M earnings was primarily due to narrower sweet and sour crude differentials partially offset by higher blended crack spreads.
R&M margin was $15.55 per barrel for the fourth quarter. Crude capacity utilization was 94%, resulting in total throughputs of 3.1 million barrels per day for the fourth quarter of 2019. Fourth-quarter 2019 clean product yield was 87 percent.
Full-year segment income from operations was $2.4 billion for 2019, compared to $2.5 billion in 2018. Segment adjusted EBITDA was $4.8 billion in 2019, versus $5.1 billion in 2018.
Items Not Allocated to Segments and Other
Items not allocated to segments totaled $1.4 billion of expense in the fourth quarter of 2019, compared to $408 million in the fourth quarter of 2018. Fourth-quarter 2019 results include $1.2 billion of impairment charges primarily related to MPLX goodwill and $13 million of costs incurred in connection with the Speedway separation, midstream strategic review, and other related activities. These items were partially offset by an equity method restructuring gain of $52 million. The non-cash impairment charge is primarily related to goodwill associated with gathering and processing businesses acquired as a part of the Andeavor combination. Fourth-quarter 2018 results included $183 million of transaction-related costs associated with the Andeavor combination.
Strong Financial Position and Liquidity
As of Dec. 31, 2019, the company had $1.5 billion in cash and cash equivalents (excluding MPLX's cash and cash equivalents of $15 million), $5 billion available under a five-year bank revolving credit facility, $1 billion available under a 364-day bank revolving credit facility, and $750 million available under its trade receivables securitization facility.
Strategic and Operations Update
As previously announced, MPC is targeting early fourth quarter 2020 for the completion of the separation of Speedway. Additionally, the special committee of the MPC board evaluating alternatives to enhance value across the midstream business continues its work and remains on track to provide an update in the first quarter of 2020.
Consistent with MPC's midstream strategy of developing long-haul pipelines and other logistics solutions, the company progressed several projects during the quarter.
Initial startup of the Gray Oak pipeline began during the fourth quarter, with full service expected in the second quarter of 2020. The pipeline will provide crude oil transportation from the Permian and Eagle Ford Basins to the Texas Gulf Coast region, including Corpus Christi. The Gray Oak pipeline will connect to multiple terminals, including the South Texas Gateway terminal, which is expected to start up in the third quarter of 2020. The terminal is designed to have two deepwater docks, with storage capacity of approximately 8.5 million barrels and up to 800 thousand barrels per day (mbpd) of throughput capacity. MPC owns a 25% interest in both the Gray Oak pipeline and the South Texas Gateway terminal.
The Wink-to-Webster crude oil pipeline, in which MPLX has an equity interest, remains on schedule to be competed in the first half of 2021. The 36-inch diameter pipeline will originate in the Permian Basin and have destination points in the Houston market, including MPC's Galveston Bay refinery.
Also in the Permian, the Whistler pipeline is being designed to transport approximately 2 billion cubic feet per day of natural gas from Waha, Texas, to the Agua Dulce market in South Texas, ultimately reaching MPC's Galveston Bay refinery. MPLX has an equity interest in Whistler, which is expected to be placed in service in the second half of 2021.
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.
In keeping with the company's retail strategy of driving merchandise growth and operating cost efficiencies, Speedway continues to expand its brand through store conversions of the acquired Andeavor sites. As of December 31, 2019, Speedway had completed 708 store conversions since the combination with Andeavor, putting the company ahead of schedule and on track to complete all planned store conversions in less than two years.
MPC also continues to expand its presence in Mexico. In addition to significant exports from the Gulf Coast and investments in refined product distribution, the company is now supplying over 218 retail sites, including 179 that are branded ARCO as of December 31, 2019. The network of sites in Mexico provides additional product outlets for, and enhanced integration with, the refining business.
In refining, the company is focused on high-return projects that enhance margin, produce higher-value products, and promote resid destruction. At Garyville, the crude revamp project and the first phase of the coker project were commissioned in the fourth quarter of 2019, allowing the company to realize higher coker unit rates from expanded drum sizing. The second phase of the coker project is on schedule to be completed in the first quarter of 2020. Early operating results on the first coker have been very positive and the company has been able to achieve a 17 percent capacity increase, exceeding original project expectations. The company anticipates the second phase to achieve a similar rate increase.
Construction continues on the Dickinson Renewable Diesel project, which remains on schedule for planned completion in late 2020. The project will convert the Dickinson refinery into a 12 mbpd biorefinery that will process corn and soybean oil to produce renewable diesel. MPC intends to sell the renewable diesel into the California market to comply with the California Low Carbon Fuel Standard.
The Los Angeles Refinery Integration and Compliance (LARIC) project to physically connect the adjacent Carson and Wilmington facilities for cleaner and more efficient operations is nearing completion. The last phase, which is the expansion of the Wilmington hydrocracker, is on track to be completed in the first half of 2020.
First Quarter 2020 Outlook
Refining & Marketing Segment: | ||
Refining operating costs per barrel(a) | $ | 6.05 |
Distribution costs (in millions) | $ | 1,300 |
Refining planned turnaround costs (in millions) | $ | 425 |
Depreciation and amortization (in millions) | $ | 440 |
Refinery throughputs (mbpd): | ||
Crude oil refined | 2,775 | |
Other charge and blendstocks | 200 | |
Total | 2,975 | |
(a) | Includes refining major maintenance and operating costs. Excludes turnaround and depreciation and amortization expenses. |
Retail Segment: | Range | ||||
Fuel sales (millions of gallons) | 2,325 | 2,450 | |||
Merchandise sales (in millions) | $ | 1,450 | $ | 1,550 | |
Corporate and unallocated items (in millions) | $ | 225 | |||
2020 Capital Plan ($ millions)
MPC (excluding MPLX) | ||
Refining & Marketing Segment: | $ | 1,550 |
Growth | 1,100 | |
Maintenance | 450 | |
Retail | 550 | |
Midstream Segment (excluding MPLX) | 300 | |
Corporate and Other | 200 | |
Total MPC (excluding MPLX) | $ | 2,600 |
MPLX | ||
Growth | 1,500 | |
Maintenance | 250 | |
Total MPLX | $ | 1,750 |
Conference Call
At 9:30 a.m. ET today, MPC will hold a conference call and webcast to discuss the reported results and provide an update on company operations. Interested parties may listen by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "Join the Webcast" link below the "2019 Fourth-Quarter and Full-Year Financial Results." A replay of the webcast will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, will also be available online prior to the conference call and webcast at https://www.marathonpetroleum.com.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with more than 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company which owns and operates gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure. More information is available at www.marathonpetroleum.com.
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Taryn Erie, Manager, Investor Relations
Doug Wendt, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Communications (419) 421-2521
Jamal Kheiry, Manager, Communications (419) 421-3312
References to Earnings and Defined Terms
References to earnings mean net income attributable to MPC from the statements of income. Unless otherwise indicated, references to earnings and earnings per share are MPC's share after excluding amounts attributable to noncontrolling interests. Discretionary free cash flow is defined as operating cash flow less maintenance and regulatory capital.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation (MPC). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations, strategy and value creation plans of MPC. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, 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 MPC's actual results to differ materially from those implied in the forward-looking statements include but are not limited to: 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, our ability to satisfy customary conditions, including obtaining regulatory approvals, and the ability to achieve the strategic and other objectives discussed herein; with respect to the Midstream review, our ability to achieve the strategic and other objectives related to the strategic review discussed herein; the risk that the cost savings and any other synergies from the Andeavor transaction may not be fully realized or may take longer to realize than expected; disruption from the Andeavor transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of Andeavor; risks related to the acquisition of Andeavor Logistics LP by MPLX LP (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. 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. 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.
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.
Consolidated Statements of Income (Unaudited) | |||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
(In millions, except per-share data) | 2019 | 2018 | 2019 | 2018 | |||||||
Revenues and other income: | |||||||||||
Sales and other operating revenues | $ | 31,159 | $ | 32,333 | $ | 124,016 | $ | 96,504 | |||
Income from equity method investments | 64 | 111 | 394 | 373 | |||||||
Net gain on disposal of assets | 85 | 17 | 307 | 23 | |||||||
Other income | 67 | 80 | 163 | 202 | |||||||
Total revenues and other income | 31,375 | 32,541 | 124,880 | 97,102 | |||||||
Costs and expenses: | |||||||||||
Cost of revenues (excludes items below) | 27,301 | 28,294 | 110,243 | 86,066 | |||||||
Impairment expense | 1,197 | — | 1,197 | — | |||||||
Depreciation and amortization | 978 | 874 | 3,638 | 2,490 | |||||||
Selling, general and administrative expenses | 857 | 1,147 | 3,475 | 2,418 | |||||||
Other taxes | 201 | 209 | 751 | 557 | |||||||
Total costs and expenses | 30,534 | 30,524 | 119,304 | 91,531 | |||||||
Income from operations | 841 | 2,017 | 5,576 | 5,571 | |||||||
Net interest and other financial costs | 302 | 385 | 1,247 | 1,003 | |||||||
Income before income taxes | 539 | 1,632 | 4,329 | 4,568 | |||||||
Provision for income taxes | 277 | 437 | 1,074 | 962 | |||||||
Net income | 262 | 1,195 | 3,255 | 3,606 | |||||||
Less net income attributable to: | |||||||||||
Redeemable noncontrolling interest | 20 | 20 | 81 | 75 | |||||||
Noncontrolling interests | (201) | 224 | 537 | 751 | |||||||
Net income attributable to MPC | $ | 443 | $ | 951 | $ | 2,637 | $ | 2,780 | |||
Per-share data | |||||||||||
Basic: | |||||||||||
Net income attributable to MPC per share | $ | 0.68 | $ | 1.38 | $ | 4.00 | $ | 5.36 | |||
Weighted average shares: | 648 | 687 | 659 | 518 | |||||||
Diluted: | |||||||||||
Net income attributable to MPC per share | $ | 0.68 | $ | 1.35 | $ | 3.97 | $ | 5.28 | |||
Weighted average shares: | 653 | 704 | 664 | 526 | |||||||
Income Summary (Unaudited) | |||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
(In millions) | 2019 | 2018(a) | 2019 | 2018(a) | |||||||
Income from Operations by segment | |||||||||||
Refining & Marketing(b) | $ | 912 | $ | 923 | $ | 2,367 | $ | 2,481 | |||
Retail | 477 | 613 | 1,582 | 1,028 | |||||||
Midstream | 889 | 889 | 3,594 | 2,752 | |||||||
Items not allocated to segments: | |||||||||||
Corporate and other unallocated items | (237) | (233) | (805) | (502) | |||||||
Equity method investment restructuring gains(c) | 52 | — | 259 | — | |||||||
Transaction-related costs(d) | (13) | (183) | (160) | (197) | |||||||
Litigation | — | — | (22) | — | |||||||
Impairments(e) | (1,239) | 8 | (1,239) | 9 | |||||||
Income from operations | 841 | 2,017 | 5,576 | 5,571 | |||||||
Net interest and other financial costs | 302 | 385 | 1,247 | 1,003 | |||||||
Income before income taxes | 539 | 1,632 | 4,329 | 4,568 | |||||||
Provision for income taxes | 277 | 437 | 1,074 | 962 | |||||||
Net income | 262 | 1,195 | 3,255 | 3,606 | |||||||
Less net income attributable to: | |||||||||||
Redeemable noncontrolling interest | 20 | 20 | 81 | 75 | |||||||
Noncontrolling interests | (201) | 224 | 537 | 751 | |||||||
Net income attributable to MPC | $ | 443 | $ | 951 | $ | 2,637 | $ | 2,780 | |||
(a) | Includes the results of Andeavor from the October 1, 2018 acquisition date forward. |
(b) | R&M segment results includes a benefit of $153 million and $93 million in the fourth quarter and full year 2019, respectively, for the biodiesel tax credit attributable to volumes blended in prior periods. The benefit was recognized in the fourth quarter because the legislation authorizing the credit was enacted in December 2019. R&M segment results for the 2018 periods included estimated costs of $759 million due to purchase accounting related inventory effects. |
(c) | Includes gains related to the formation of two new joint ventures: The Andersons Marathon Holdings LLC (4Q 2019) and Capline LLC (1Q 2019). |
(d) | The fourth quarter of 2019 includes costs incurred in connection with the Speedway separation, Midstream strategic review and other related efforts. Full year 2019 and both 2018 periods also include employee severance, retention and other costs related to the acquisition of Andeavor. Effective October 1, 2019, we discontinued reporting Andeavor transaction-related costs separately as one year has passed since the acquisition and any remaining costs are not material. |
(e) | 2019 primarily reflects an MPLX goodwill impairment. |
Capital Expenditures and Investments (Unaudited) | |||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||
(In millions) | 2019 | 2018(a) | 2019 | 2018(a) | |||||||||
Refining & Marketing | $ | 614 | $ | 444 | $ | 1,999 | $ | 1,057 | |||||
Retail | 237 | 235 | 607 | 460 | |||||||||
Midstream | 870 | 954 | 3,290 | 2,630 | |||||||||
Corporate and Other(b) | 96 | 60 | 237 | 157 | |||||||||
Total | $ | 1,817 | $ | 1,693 | $ | 6,133 | $ | 4,304 | |||||
(a) | Includes the results of Andeavor from the October 1, 2018 acquisition date forward. |
(b) | Includes capitalized interest of $40 million, $25 million, $137 million and $80 million, respectively. |
Refining & Marketing Operating Statistics (Unaudited) | |||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||
(per barrel) | 2019 | 2018 | 2019 | 2018 | |||||||||
Refining & Marketing margin(a) | $ | 15.55 | $ | 15.70 | $ | 14.23 | $ | 14.25 | |||||
Less: | |||||||||||||
Refining operating costs(b) | 6.25 | 5.79 | 5.66 | 4.99 | |||||||||
Distribution costs(c) | 4.60 | 4.64 | 4.51 | 4.23 | |||||||||
Refining planned turnaround costs | 0.54 | 0.81 | 0.65 | 0.80 | |||||||||
Depreciation and amortization | 1.52 | 1.44 | 1.47 | 1.41 | |||||||||
Plus: | |||||||||||||
Purchase accounting - depreciation and amortization(d) | — | — | 0.01 | — | |||||||||
Biodiesel tax credit(e) | 0.55 | — | 0.08 | — | |||||||||
Other(f) | 0.04 | 0.21 | 0.05 | 0.17 | |||||||||
Refining & Marketing segment income | $ | 3.23 | $ | 3.23 | $ | 2.08 | $ | 2.99 | |||||
Refining & Marketing refined product sales volume (mbpd)(g) | 3,750 | 3,764 | 3,735 | 2,703 | |||||||||
Crude oil capacity utilization (percent)(h) | 94 | 94 | 96 | 96 | |||||||||
Refinery throughputs (mbpd):(i) | |||||||||||||
Crude oil refined | 2,831 | 2,857 | 2,902 | 2,081 | |||||||||
Other charge and blendstocks | 238 | 254 | 210 | 193 | |||||||||
Total | 3,069 | 3,111 | 3,112 | 2,274 | |||||||||
Sour crude oil throughput (percent) | 45 | 50 | 48 | 52 | |||||||||
Sweet crude oil throughput (percent) | 55 | 50 | 52 | 48 | |||||||||
Refined product yields (mbpd):(i) | |||||||||||||
Gasoline | 1,623 | 1,593 | 1,560 | 1,107 | |||||||||
Distillates | 1,074 | 1,111 | 1,087 | 773 | |||||||||
Propane | 56 | 53 | 55 | 41 | |||||||||
Feedstocks and special products | 228 | 273 | 315 | 288 | |||||||||
Heavy fuel oil | 54 | 62 | 49 | 38 | |||||||||
Asphalt | 81 | 74 | 87 | 69 | |||||||||
Total | 3,116 | 3,166 | 3,153 | 2,316 |
(a) | Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. Fourth quarter and full year 2018 are not adjusted for estimated costs of $759 million due to purchase accounting related inventory effects. |
(b) | Includes refining major maintenance and operating costs. Excludes planned turnaround and depreciation and amortization expense. |
(c) | Includes fees paid to MPLX, on a per barrel throughput basis, of $2.99, $2.11, $2.84 and $2.74, respectively. Excludes depreciation and amortization expense. |
(d) | Reflects the cumulative effects related to a measurement period adjustment arising from the finalization of purchase accounting. |
(e) | Reflects a benefit of $153 million and $93 million in the fourth quarter and full year 2019, respectively, for the biodiesel tax credit attributable to volumes blended in prior periods. |
(f) | Includes income from equity method investments, net gain on disposal of assets and other income. |
(g) | Includes intersegment sales. |
(h) | Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance and other normal operating activities. |
(i) | Excludes inter-refinery volumes of 148 mbpd, 85 mbpd, 110 mbpd and 61 mbpd, respectively. |
Refining & Marketing Operating Statistics by Region (Unaudited) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Gulf Coast | |||||||||||||||
(per barrel) | |||||||||||||||
Refining & Marketing margin dollars(a) | $ | 11.49 | $ | N/A | $ | 9.94 | $ | N/A | |||||||
Refining operating costs(b) | $ | 5.00 | $ | 3.90 | $ | 4.27 | $ | 4.09 | |||||||
Refining planned turnaround costs | $ | 0.65 | $ | 0.06 | $ | 0.30 | $ | 0.44 | |||||||
Refining depreciation and amortization(c) | $ | 1.16 | $ | 1.03 | $ | 1.10 | $ | 1.03 | |||||||
Refinery throughputs (mbpd):(d) | |||||||||||||||
Crude oil refined | 1,022 | 1,177 | 1,115 | 1,135 | |||||||||||
Other charge and blendstocks | 257 | 197 | 202 | 190 | |||||||||||
Total | 1,279 | 1,374 | 1,317 | 1,325 | |||||||||||
Sour crude oil throughput (percent) | 58 | 60 | 61 | 62 | |||||||||||
Sweet crude oil throughput (percent) | 42 | 40 | 39 | 38 | |||||||||||
Refined product yields (mbpd):(d) | |||||||||||||||
Gasoline | 569 | 622 | 566 | 574 | |||||||||||
Distillates | 400 | 467 | 428 | 432 | |||||||||||
Propane | 29 | 28 | 28 | 25 | |||||||||||
Feedstocks and special products | 280 | 260 | 291 | 291 | |||||||||||
Heavy fuel oil | 17 | 20 | 15 | 18 | |||||||||||
Asphalt | 15 | 16 | 20 | 19 | |||||||||||
Total | 1,310 | 1,413 | 1,348 | 1,359 | |||||||||||
Mid-Continent | |||||||||||||||
(per barrel) | |||||||||||||||
Refining & Marketing margin(a) | $ | 17.30 | $ | N/A | $ | 17.70 | $ | N/A | |||||||
Refining operating costs(b) | $ | 5.36 | $ | 5.73 | $ | 5.16 | $ | 5.21 | |||||||
Refining planned turnaround costs | $ | 0.42 | $ | 1.02 | $ | 0.66 | $ | 1.10 | |||||||
Refining depreciation and amortization(c) | $ | 1.45 | $ | 1.60 | $ | 1.51 | $ | 1.67 | |||||||
Refinery throughputs (mbpd):(e) | |||||||||||||||
Crude oil refined | 1,189 | 1,069 | 1,150 | 792 | |||||||||||
Other charge and blendstocks | 64 | 72 | 54 | 47 | |||||||||||
Total | 1,253 | 1,141 | 1,204 | 839 | |||||||||||
Sour crude oil throughput (percent) | 26 | 26 | 27 | 33 | |||||||||||
Sweet crude oil throughput (percent) | 74 | 74 | 73 | 67 | |||||||||||
Refined product yields (mbpd):(e) | |||||||||||||||
Gasoline | 674 | 617 | 632 | 444 | |||||||||||
Distillates | 434 | 398 | 413 | 279 | |||||||||||
Propane | 17 | 18 | 18 | 14 | |||||||||||
Feedstocks and special products | 44 | 36 | 60 | 43 | |||||||||||
Heavy fuel oil | 20 | 19 | 16 | 14 | |||||||||||
Asphalt | 66 | 58 | 67 | 50 | |||||||||||
Total | 1,255 | 1,146 | 1,206 | 844 | |||||||||||
West Coast | |||||||||||||||
(per barrel) | |||||||||||||||
Refining & Marketing margin(a) | $ | 19.44 | $ | N/A | $ | 16.03 | $ | N/A | |||||||
Refining operating costs(b) | $ | 8.84 | $ | 9.00 | $ | 8.19 | $ | 9.00 | |||||||
Refining planned turnaround costs | $ | 0.46 | $ | 1.86 | $ | 1.20 | $ | 1.86 | |||||||
Refining depreciation and amortization(c) | $ | 1.26 | $ | 1.26 | $ | 1.11 | $ | 1.26 | |||||||
Refinery throughputs (mbpd):(f) | |||||||||||||||
Crude oil refined | 620 | 611 | 637 | 154 | |||||||||||
Other charge and blendstocks | 65 | 70 | 64 | 17 | |||||||||||
Total | 685 | 681 | 701 | 171 | |||||||||||
Sour crude oil throughput (percent) | 61 | 72 | 63 | 72 | |||||||||||
Sweet crude oil throughput (percent) | 39 | 28 | 37 | 28 | |||||||||||
Refined product yields (mbpd):(f) | |||||||||||||||
Gasoline | 380 | 354 | 362 | 89 | |||||||||||
Distillates | 240 | 246 | 246 | 62 | |||||||||||
Propane | 10 | 7 | 9 | 2 | |||||||||||
Feedstocks and special products | 45 | 56 | 68 | 14 | |||||||||||
Heavy fuel oil | 24 | 29 | 24 | 7 | |||||||||||
Asphalt | — | — | — | — | |||||||||||
Total | 699 | 692 | 709 | 174 | |||||||||||
(a) | Sales revenue less cost of refinery inputs and purchased products, divided by refinery throughputs, excluding inter-refinery transfer volumes. The 2019 margin amounts exclude the biodiesel tax credit related to volumes blended in periods other than the fourth quarter and 2019. |
(b) | Includes refining major maintenance and operating costs. Excludes planned turnaround and depreciation and amortization expense. |
(c) | Purchase accounting measurement period adjustments related to prior periods are not allocated to regional depreciation and amortization. |
(d) | Includes inter-refinery transfer volumes of 113 mbpd and 69 mbpd for the three and twelve months ended December 31, 2019, respectively. |
(e) | Includes inter-refinery transfer volumes of 12 mbpd and 10 mbpd for the three and twelve months ended December 31, 2019, respectively. |
(f) | Includes inter-refinery transfer volumes of 23 mbpd and 31 mbpd for the three and twelve months ended December 31, 2019, respectively. |
Retail Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Speedway fuel sales (millions of gallons) | 1,838 | 1,976 | 7,658 | 6,293 | |||||||||||
Direct dealer fuel sales (millions of gallons) | 625 | 644 | 2,554 | 644 | |||||||||||
Retail fuel margin (dollars per gallon)(a) | $ | 0.2865 | $ | 0.3235 | $ | 0.2426 | $ | 0.2230 | |||||||
Merchandise sales (in millions) | $ | 1,569 | $ | 1,479 | $ | 6,305 | $ | 5,232 | |||||||
Merchandise margin (in millions) | $ | 451 | $ | 417 | $ | 1,827 | $ | 1,486 | |||||||
Merchandise margin percent | 28.7 | % | 28.2 | % | 29.0 | % | 28.4 | % | |||||||
Same store gasoline sales volume (period over period)(b) | (4.2) | % | (0.7) | % | (3.3) | % | (1.5) | % | |||||||
Same store merchandise sales (period over period)(b)(c) | 4.7 | % | 6.5 | % | 5.4 | % | 4.2 | % | |||||||
Total convenience stores at period-end | 3,898 | 3,923 | |||||||||||||
Direct dealer locations at period-end | 1,068 | 1,065 | |||||||||||||
(a) | Includes bankcard processing fees (as applicable). |
(b) | Same store comparison includes only locations owned at least 13 months. |
(c) | Excludes cigarettes. |
Midstream Operating Statistics (Unaudited) | ||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||
Pipeline throughputs (mbpd)(a) | 5,231 | 5,612 | 5,245 | 4,177 | ||||||||||
Terminal throughput (mbpd) | 3,313 | 3,188 | 3,279 | 1,901 | ||||||||||
Gathering system throughput (million cubic feet per day)(b) | 6,192 | 5,893 | 6,094 | 4,779 | ||||||||||
Natural gas processed (million cubic feet per day)(b) | 8,759 | 8,161 | 8,661 | 7,199 | ||||||||||
C2 (ethane) + NGLs fractionated (mbpd)(b) | 557 | 501 | 534 | 464 | ||||||||||
(a) | Includes common-carrier pipelines and private pipelines contributed to MPLX. Excludes equity method affiliate pipeline volumes. |
(b) | Includes amounts related to unconsolidated equity method investments on a 100% basis. |
Select Financial Data (Unaudited) | |||||
December 31 | September 30 | ||||
(In millions) | 2019 | 2019 | |||
Cash and cash equivalents | $ | 1,527 | $ | 1,525 | |
MPC debt | 9,125 | 9,139 | |||
MPLX debt | 19,713 | 19,700 | |||
Total consolidated debt | 28,838 | 28,839 | |||
Redeemable noncontrolling interest | 968 | 968 | |||
Equity | 42,139 | 42,656 | |||
Shares outstanding | 649 | 650 | |||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Cash provided by operations | $ | 2,409 | $ | 2,727 | $ | 9,441 | $ | 6,158 | |||
Dividends paid per share | $ | 0.53 | $ | 0.46 | $ | 2.12 | $ | 1.84 | |||
Non-GAAP Financial Measures
Management uses certain financial measures to evaluate our operating performance that are calculated and presented on the basis of methodologies other than in accordance with GAAP. We believe these non-GAAP financial measures are useful to investors and analysts to assess our ongoing financial performance because, when reconciled to their most comparable GAAP financial measures, they provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies. The non-GAAP financial measures we use are as follows:
Adjusted Net Income Attributable to MPC
Adjusted net income attributable to MPC is defined as net income attributable to MPC excluding the items in the table below, along with their related income tax effect. We have excluded these items because we believe that they are not indicative of our core operating performance and that their exclusion results in an important measure of our ongoing financial performance to better assess our underlying business results and trends.
Adjusted Diluted Earnings Per Share
Adjusted diluted earnings per share is defined as adjusted net income attributable to MPC divided by the number of weighted-average shares outstanding in the applicable period, assuming dilution.
Reconciliation of Net Income Attributable to MPC to Adjusted Net Income Attributable to MPC | |||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||
Net income attributable to MPC | $ | 443 | $ | 951 | $ | 2,637 | $ | 2,780 | |||
Pre-tax adjustments: | |||||||||||
Purchase accounting related inventory effects | — | 759 | — | 759 | |||||||
MPLX debt extinguishment costs | — | 60 | — | 60 | |||||||
Equity method investment restructuring gains | (52) | — | (259) | — | |||||||
Transaction-related costs | 13 | 183 | 160 | 197 | |||||||
Litigation | — | — | 22 | — | |||||||
Impairments | 1,239 | — | 1,239 | — | |||||||
Pension settlement | — | — | — | 45 | |||||||
Purchase accounting - depreciation and amortization | — | — | (17) | — | |||||||
Biodiesel tax credit | (175) | — | (104) | — | |||||||
Out of period tax adjustment | — | — | 36 | — | |||||||
Tax impact of adjustments(a) | 9 | (236) | 22 | (250) | |||||||
NCI impact of adjustments | (459) | (22) | (457) | (22) | |||||||
Adjusted net income attributable to MPC | $ | 1,018 | $ | 1,695 | $ | 3,279 | $ | 3,569 | |||
Diluted earnings per share | $ | 0.68 | $ | 1.35 | $ | 3.97 | $ | 5.28 | |||
Adjusted diluted earnings per share(b) | $ | 1.56 | $ | 2.41 | $ | 4.94 | $ | 6.78 |
(a) | We generally tax effect pre-tax earnings adjustments to reported earnings using a combined federal and state statutory rate of approximately 24 percent. However, since the Midstream impairments, net of the portion attributable to NCI, and the biodiesel tax credit are largely non-taxable items, these adjustments are not tax affected for adjusted earnings purposes. |
(b) | Weighted-average diluted shares outstanding and income allocated to participating securities, if applicable, in the adjusted earnings per share calculation are the same as those used in the GAAP diluted earnings per share calculation. |
Adjusted EBITDA & Segment Adjusted EBITDA
Adjusted EBITDA and Segment Adjusted EBITDA represent earnings before net interest and other financial costs, income taxes, depreciation and amortization expense as well as adjustments to exclude refining turnaround costs, items not allocated to segment results and other items shown in the table below. We believe these non-GAAP financial measures are useful to investors and analysts to analyze and compare our operating performance between periods by excluding items that do not reflect the core operating results of our business or in the case of turnarounds, which provide benefits over multiple years. We also believe that excluding turnaround costs from this metric is useful for comparability to other companies as certain of our competitors defer these costs and amortize them between turnarounds. Adjusted EBITDA and Segment Adjusted EBITDA should not be considered as a substitute for, or superior to segment income (loss) from operations, net income attributable to MPC, income before income taxes, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA and Segment Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
Reconciliation of Net Income Attributable to MPC to Adjusted EBITDA | |||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||
December 31, | December 31, | ||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||
Net income attributable to MPC | $ | 443 | $ | 951 | $ | 2,637 | $ | 2,780 | |||
Plus (Less): | |||||||||||
Net interest and other financial costs | 302 | 385 | 1,247 | 1,003 | |||||||
Net income attributable to noncontrolling interests | (181) | 244 | 618 | 826 | |||||||
Provision for income taxes | 277 | 437 | 1,074 | 962 | |||||||
Depreciation and amortization | 978 | 874 | 3,638 | 2,490 | |||||||
Refining planned turnaround costs | 153 | 232 | 740 | 664 | |||||||
Equity method investment restructuring gains | (52) | — | (259) | — | |||||||
Purchase accounting inventory related effects | — | 759 | — | 759 | |||||||
Transaction-related costs | 13 | 183 | 160 | 197 | |||||||
Litigation | — | — | 22 | — | |||||||
Impairments | 1,239 | (8) | 1,239 | (9) | |||||||
Adjusted EBITDA | $ | 3,172 | $ | 4,057 | $ | 11,116 | $ | 9,672 |
Reconciliation of Segment Income From Operations to Segment Adjusted EBITDA and Adjusted EBITDA | |||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||
Refining & Marketing Segment | |||||||||||
Segment income from operations | $ | 912 | $ | 923 | $ | 2,367 | $ | 2,481 | |||
Add: Depreciation and amortization | 430 | 413 | 1,665 | 1,174 | |||||||
Refining planned turnaround costs | 153 | 232 | 740 | 664 | |||||||
Purchase accounting inventory effect, net of LIFO | — | 759 | — | 759 | |||||||
Segment Adjusted EBITDA | $ | 1,495 | $ | 2,327 | $ | 4,772 | $ | 5,078 | |||
Retail Segment | |||||||||||
Segment income from operations | $ | 477 | $ | 613 | $ | 1,582 | $ | 1,028 | |||
Add: Depreciation and amortization | 159 | 125 | 528 | 353 | |||||||
Segment EBITDA | $ | 636 | $ | 738 | $ | 2,110 | $ | 1,381 | |||
Midstream Segment | |||||||||||
Segment income from operations | $ | 889 | $ | 889 | $ | 3,594 | $ | 2,752 | |||
Add: Depreciation and amortization | 342 | 308 | 1,267 | 885 | |||||||
Segment EBITDA | $ | 1,231 | $ | 1,197 | $ | 4,861 | $ | 3,637 | |||
Segment Adjusted EBITDA | $ | 3,362 | $ | 4,262 | $ | 11,743 | $ | 10,096 | |||
Corporate and other unallocated items | (237) | (233) | (805) | (502) | |||||||
Add: Depreciation and amortization | 47 | 28 | 178 | 78 | |||||||
Adjusted EBITDA | $ | 3,172 | $ | 4,057 | $ | 11,116 | $ | 9,672 |
Refining & Marketing Margin
Refining margin is defined as sales revenue less the cost of refinery inputs and purchased products and excludes any LCM inventory market adjustment and other items reflected in the table below.
Reconciliation of Refining & Marketing Income from Operations to Refining & Marketing Margin | |||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||
Refining & Marketing income from operations | $ | 912 | $ | 923 | $ | 2,367 | $ | 2,481 | |||
Plus (Less): | |||||||||||
Refining operating costs(a) | 1,765 | 1,657 | 6,421 | 4,137 | |||||||
Refining depreciation and amortization | 382 | 377 | 1,465 | 1,089 | |||||||
Refining planned turnaround costs | 153 | 232 | 740 | 664 | |||||||
Distribution costs(b) | 1,299 | 1,329 | 5,117 | 3,512 | |||||||
Distribution depreciation and amortization | 48 | 36 | 200 | 85 | |||||||
Income from equity method investments | (1) | (1) | (11) | (15) | |||||||
Net gain on disposal of assets | — | 1 | (6) | (4) | |||||||
Other income | (13) | (62) | (43) | (125) | |||||||
Biodiesel tax credit | (153) | — | (93) | — | |||||||
Refining & Marketing margin | $ | 4,392 | $ | 4,492 | $ | 16,157 | $ | 11,824 | |||
Refining & Marketing margin by region: | |||||||||||
Gulf Coast | $ | 1,233 | $ | N/A | $ | 4,525 | $ | N/A | |||
Mid-Continent | 1,975 | N/A | 7,712 | N/A | |||||||
West Coast | 1,184 | N/A | 3,920 | N/A | |||||||
Refining & Marketing margin | $ | 4,392 | $ | N/A | $ | 16,157 | $ | N/A | |||
(a) | Includes refining major maintenance and operating costs. Excludes planned turnaround and depreciation and amortization expense. |
(b) | Includes fees paid to MPLX of $845 million, $603 million, $3,223 million and $2,278 million, respectively. Excludes depreciation and amortization expense. |
Retail Fuel Margin
Retail fuel margin is defined as the price paid by consumers or direct dealers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees (where applicable) and excluding any LCM inventory market adjustment.
Retail Merchandise Margin
Retail merchandise margin is defined as the price paid by consumers less the cost of merchandise.
Reconciliation of Retail Income from Operations to Retail Total Margin | ||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||
Retail income from operations | $ | 477 | $ | 613 | $ | 1,582 | $ | 1,028 | ||||||
Plus (Less): | ||||||||||||||
Operating, selling, general and administrative expenses | 632 | 593 | 2,456 | 1,796 | ||||||||||
Depreciation and amortization | 159 | 125 | 528 | 353 | ||||||||||
Income from equity method investments | (24) | (23) | (82) | (74) | ||||||||||
Net gain on disposal of assets | (27) | (16) | (31) | (17) | ||||||||||
Other income | (35) | (2) | (44) | (7) | ||||||||||
Retail total margin | $ | 1,182 | $ | 1,290 | $ | 4,409 | $ | 3,079 | ||||||
Retail total margin: | ||||||||||||||
Fuel margin | $ | 706 | $ | 848 | $ | 2,478 | $ | 1,547 | ||||||
Merchandise margin | 451 | 417 | 1,827 | 1,486 | ||||||||||
Other margin | 25 | 25 | 104 | 46 | ||||||||||
Retail total margin | $ | 1,182 | $ | 1,290 | $ | 4,409 | $ | 3,079 |
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-full-year-and-fourth-quarter-results-300995179.html
SOURCE Marathon Petroleum Corp.
FINDLAY, Ohio, Jan. 23, 2020 /PRNewswire/ -- The board of directors of the general partner of MPLX LP (NYSE: MPLX) has declared a quarterly cash distribution of $0.6875 per common unit for the fourth quarter of 2019, or $2.75 on an annualized basis.
This represents an increase of $0.01 per unit, or 1.5 percent, over the third quarter 2019 distribution, and an increase of $0.04 per unit, or 6.2 percent, over the fourth quarter 2018 distribution. This is the 28th consecutive quarterly distribution increase and will be paid on Feb. 14, 2020, to common unitholders of record as of Feb. 4, 2020.
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100 percent of MPLX's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MPLX's distributions to non-United States investors are subject to federal income tax withholding at the highest applicable effective tax rate.
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, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/mplx-lp-increases-quarterly-distribution-300992539.html
SOURCE MPLX LP
FINDLAY, Ohio, Oct. 31, 2019 /PRNewswire/ -- Gary R. Heminger, Chairman and Chief Executive Officer of Marathon Petroleum Corporation (NYSE: MPC), today announced his plan to retire from MPC, where he has served as president and CEO since the company's spin-off from Marathon Oil in June 2011, and as chairman and CEO since 2016. He has also served as chairman and CEO of MPLX GP LLC since 2012.
Lead Independent Director James E. Rohr said: "On behalf of the Board of Directors, I am grateful to Gary for his distinguished and successful leadership of this great company, for which he has earned the unqualified and unanimous support of the board. We thank him also for his commitment to the board's request that he remain on for extended service following the announcement of the Andeavor combination to ensure the successful integration of the two companies." Mr. Heminger's retirement will come two full years after the announcement of the transaction.
Under Mr. Heminger's leadership, the company has continued to create value for shareholders. Since 2011, the company has delivered returns of 323%, outstripping the 183% growth of the S&P 500 over the same period, and returned nearly $21 billion to shareholders. As CEO, Mr. Heminger has headed several transformative acquisitions, resulting in Marathon Petroleum's current position amongst the highest performers in the refining, retail and midstream segments of the industry.
"I am very proud of the management team with whom I have served over the years", said Mr. Heminger, "and I thank them for their dedication, loyalty, and diligence that has fueled the steady growth of the company. Their expertise, and the commitment to superior execution by everyone at Marathon Petroleum, has resulted in MPC being considered one of the very best operators in the industry today."
The board has appointed a committee, led by Edward G. Galante, that will consider internal and external candidates to succeed Mr. Heminger. A nationwide search is currently under way.
Concurrent with Mr. Heminger's MPC retirement, he will also retire from MPLX GP LLC, the general partner of MPLX LP (NYSE: MPLX).
Mr. Heminger joined Marathon in 1975 and his experience spans more than four decades in a range of business groups and functions. As vice president of Business Development he was integral to the formation of Marathon Ashland Petroleum in January 1998, and was named senior vice president, Business Development in 1999. In January 2001, he was appointed executive vice president, Supply, Transportation and Marketing and, subsequently, president of Marathon Ashland Petroleum LLC, in September 2001. In addition, he was named executive vice president – Downstream of Marathon Oil Corporation and served as a member of Marathon's Executive Committee. Mr. Heminger was appointed president and chief executive officer of Marathon Petroleum Corporation on July 1, 2011, and elected Chairman of the board in 2016. Under Mr. Heminger's leadership, Marathon Petroleum was honored by Forbes magazine as the Best Employer of 2015.
Mr. Heminger earned a bachelor's degree in accounting from Tiffin University and a master's degree in business administration from the University of Dayton, Ohio; he is also a graduate of the Wharton School Advanced Management Program at the University of Pennsylvania. Mr. Heminger is a member of the Oxford Institute for Energy Studies; past chairman of the Board of Trustees of Tiffin University; and was recently elected Chairman of the Board of Trustees of The Ohio State University. He sits on the Boards of Directors and Executive Committees of the American Petroleum Institute (API) and American Fuel & Petrochemical Manufacturers (AFPM), and also on the Boards of Directors of Fifth Third Bancorp and PPG Industries, Inc.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with more than 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company which owns and operates gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure. More information is available at www.marathonpetroleum.com.
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Taryn Erie, Manager, Investor Relations
Doug Wendt, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Communications (419) 421-2521
Jamal Kheiry, Manager, Communications (419) 421-3312
Important Additional Information
MPC, its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from MPC shareholders in connection with the matters to be considered at MPC's 2020 Annual Meeting. MPC intends to file a proxy statement with the SEC in connection with any such solicitation of proxies from MPC shareholders. MPC shareholders are encouraged to read any such proxy statement and accompanying white proxy card when they become available as they will contain important information. Information regarding the ownership of MPC's directors and executive officers in MPC shares, restricted shares and options is included in their SEC filings on Forms 3, 4 and 5. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC in connection with MPC's 2020 Annual Meeting. Information can also be found in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed with the SEC, and Current Reports on Form 8-K filed with the SEC. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by MPC with the SEC for no charge on the SEC website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.
View original content:http://www.prnewswire.com/news-releases/gary-r-heminger-announces-plan-to-retire-from-marathon-petroleum-in-2020-after-45-years-300948837.html
SOURCE Marathon Petroleum Corporation
FINDLAY, Ohio, Oct. 31, 2019 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) and MPLX LP (NYSE: MPLX) today announced that Gregory J. Goff, executive vice chairman of MPC and a member of each of the boards of directors of MPC and MPLX's general partner, has elected to retire effective December 31, 2019. In addition, Michael J. Hennigan, current president of MPLX GP LLC, has been appointed chief executive officer of the same organization, effective November 1, 2019.
Mr. Goff was named executive vice chairman upon the closing of MPC's strategic combination with Andeavor in October 2018, and he has served on the board of directors of both MPC and MPLX. Mr. Goff will retire from both boards concurrent with his retirement and Frank M. Semple will succeed Mr. Goff as a member of the MPC board.
"On behalf of Marathon Petroleum Corporation and the board of directors, we thank Greg for his leadership and service both to this company and the industry, and congratulate him on his well-deserved retirement," said Chairman and Chief Executive Officer Gary R. Heminger. "Greg and his team at Andeavor built a highly regarded organization with some of the most attractive refining, marketing and midstream assets in the western U.S.," continued Heminger.
Michael J. Hennigan named president and chief executive officer of MPLX GP LLC
Mr. Hennigan succeeds Gary R. Heminger as chief executive officer of the general partner of MPLX. Mr. Heminger will remain chairman of the board of MPLX GP LLC.
"Mike's strategic leadership has created tremendous value for both MPLX and MPC. His appointment as CEO of MPLX is well-earned and a natural step in positioning both organizations for continued success," said Mr. Heminger. "Mike has a very strong track record and I have every confidence in his ability to further optimize and leverage our portfolio."
Most recently, Mr. Hennigan has overseen the combination of MPLX with Andeavor Logistics LP, which was completed earlier this year. Before joining MPLX GP LLC as president in 2017, Mr. Hennigan was president, Crude, NGL and Refined Products of the general partner of Energy Transfer Partners LP. He earlier spent 36 years with Sunoco and Sunoco Logistics and held many senior refining operations positions between 1981 and 1996; he led the Strategic Planning function from 1996-2000. Subsequently, Hennigan was appointed executive in charge of Wholesale Marketing, and then senior vice president of Crude & Feedstock Supply and Trading. After serving as senior vice president, Business Transportation, from 2008-2012, he was appointed president and chief executive officer of Sunoco Logistics Partners LP.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with more than 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company which owns and operates gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure. More information is available at www.marathonpetroleum.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
Taryn Erie, Manager, Investor Relations
Doug Wendt, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Communications (419) 421-2521
Jamal Kheiry, Manager, Communications (419) 421-3312
Important Additional Information
MPC, its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from MPC shareholders in connection with the matters to be considered at MPC's 2020 Annual Meeting. MPC intends to file a proxy statement with the SEC in connection with any such solicitation of proxies from MPC shareholders. MPC shareholders are encouraged to read any such proxy statement and accompanying white proxy card when they become available as they will contain important information. Information regarding the ownership of MPC's directors and executive officers in MPC shares, restricted shares and options is included in their SEC filings on Forms 3, 4 and 5. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC in connection with MPC's 2020 Annual Meeting. Information can also be found in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed with the SEC, and Current Reports on Form 8-K filed with the SEC. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by MPC with the SEC for no charge on the SEC website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.
SOURCE Marathon Petroleum Corporation; MPLX LP
FINDLAY, Ohio, Oct. 31, 2019 /PRNewswire/ --
MPLX LP (NYSE: MPLX) today reported third quarter 2019 net income attributable to MPLX of $629 million compared with $510 million for the third quarter of 2018. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $1.2 billion compared with $937 million in the third quarter of 2018.
On July 30, MPLX closed its acquisition of Andeavor Logistics (ANDX). Third quarter adjusted EBITDA attributable to MPLX, including full-quarter results of ANDX, would have been $1.3 billion. Logistics and Storage (L&S) reported segment income from operations of $713 million and adjusted EBITDA of $849 million for the quarter, up $245 million and $302 million, respectively, versus the third quarter of last year. Gathering and Processing (G&P) reported segment income from operations of $213 million and adjusted EBITDA of $424 million for the quarter, up $9 million and $34 million, respectively, on a year-over-year basis.
"During the quarter, we progressed our slate of high-return projects, advancing MPLX's strategy of creating integrated crude oil and natural gas logistics from the Permian to Gulf Coast markets," said Gary R. Heminger, chairman and chief executive officer. "Additionally, we moved forward with high-grading our growth capex portfolio and today announced a growth capital target of approximately $2.0 billion for 2020."
During the quarter, MPLX generated $1.0 billion in net cash provided by operating activities and distributable cash flow, including a full-quarter of results from ANDX, of $1.0 billion, which provided adjusted distribution coverage of 1.42x. MPLX also announced its 27th consecutive distribution increase to $0.6775 per common unit, a $0.01 increase over the prior quarter and a 6.3 percent increase over the prior year third quarter.
Financial Highlights | |||||||||||||||||||
Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | ||||||||||||||||||
(In millions, except per unit and ratio data) | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
Net income attributable to MPLX | $ | 629 | $ | 510 | $ | 1,614 | $ | 1,384 | |||||||||||
Adjusted net income attributable to MPLX(a) | 681 | N/A | 2,015 | N/A | |||||||||||||||
Adjusted EBITDA attributable to MPLX LP (excluding | 1,165 | 937 | 3,015 | 2,564 | |||||||||||||||
Adjusted EBITDA attributable to MPLX LP (including | 1,273 | N/A | 3,785 | N/A | |||||||||||||||
Net cash provided by operating activities | 1,036 | 737 | 2,990 | 2,027 | |||||||||||||||
Distributable cash flow attributable to MPLX LP(c) | 1,027 | 766 | 3,055 | 2,080 | |||||||||||||||
Distribution per common unit(d) | $ | 0.6775 | $ | 0.6375 | $ | 2.0025 | $ | 1.8825 | |||||||||||
Distribution coverage ratio(e) | 1.42x | 1.47x | 1.54x | 1.38x | |||||||||||||||
Consolidated debt to adjusted EBITDA(f) | 4.0x | 3.8x | N/A | N/A | |||||||||||||||
(a) | Includes net income attributable to predecessor for the three and nine months ended September 30, 2019. |
(b) | Non-GAAP measure calculated before distributions to preferred unitholders. See reconciliation below. Excludes |
(c) | Non-GAAP measure calculated before distributions to preferred unitholders. See reconciliation below. Includes |
(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 |
(f) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. See |
Segment Results (including predecessor) | |||||||||||||||
(In millions) | Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||
Segment income from operations (unaudited) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Logistics and Storage | $ | 713 | $ | 468 | $ | 2,075 | $ | 1,287 | |||||||
Gathering and Processing | 213 | 204 | 648 | 550 | |||||||||||
Segment adjusted EBITDA attributable to MPLX LP | |||||||||||||||
Logistics and Storage | 849 | 547 | 2,498 | 1,510 | |||||||||||
Gathering and Processing | $ | 424 | $ | 390 | $ | 1,287 | $ | 1,054 | |||||||
The operations acquired through the ANDX acquisition have been assigned to MPLX's existing segments based on the nature of the assets and the services provided.
Logistics & Storage
L&S segment income from operations and adjusted EBITDA for the third quarter of 2019 increased by $245 million and $302 million, respectively, compared with the same period in 2018. The increase was primarily due to the acquisition of ANDX and the continued solid performance of the underlying base business.
Total pipeline throughputs were 5.2 million barrels per day in the third quarter. The average tariff rate was $0.90 per barrel for the quarter. Terminal throughput was 3.3 million barrels per day for the quarter.
Gathering & Processing
G&P segment income from operations and segment adjusted EBITDA for the third quarter of 2019 increased by $9 million and $34 million, respectively, compared with the same period in 2018. Year-over-year results increased due to the ANDX acquisition and higher volumes partially offset by a significant decline in weighted average NGL prices. In the third quarter of 2019:
In the Marcellus and Utica, the company continued to experience significant year-over-year growth. Gathered volumes averaged 3.7 billion cubic feet per day (bcf/d) for the quarter, a 16 percent increase versus the third quarter of 2018. Processed volumes averaged 6.2 bcf/d, a 13 percent increase versus the same quarter last year, driven by high utilization across the company's Marcellus operations. Fractionated volumes averaged 482 thousand barrels per day, a 6 percent increase versus the third quarter of 2018. The increase was primarily driven by higher volumes at the expanded Hopedale Complex.
In the Southwest, gathered volumes averaged 1.7 bcf/d for the third quarter, a 3 percent increase versus the third quarter of 2018. Processed volumes averaged 1.7 bcf/d for the quarter, a 13 percent increase versus the third quarter of 2018. The increase was primarily the result of higher volumes in the Permian.
In the Bakken, gathered volumes averaged 149 mmcf/d for the third quarter. Processed volumes averaged 149 mmcf/d for the quarter.
In the Rockies, gathered volumes averaged 827 mmcf/d for the third quarter. Processed volumes averaged 568 mmcf/d for the quarter.
Strategic Update
MPC announced that it is forming a special committee of its Board of Directors, led by J. Mike Stice, to continue to evaluate alternatives to enhance value across its midstream business.
MPLX announced that it has completed its plan to high-grade its capital expenditures, focusing on the most attractive returns. For 2020, MPLX is targeting growth capex of approximately $2.0 billion.
In the L&S segment, MPLX continues to advance its strategy of creating integrated crude oil and natural gas logistics systems from the Permian to the U.S. Gulf Coast. The Wink-to-Webster crude oil pipeline, in which MPLX has an equity interest, remains on schedule to be competed in the first half of 2021. The 36-inch diameter pipeline will originate in the Permian Basin and have destination points in the Houston market, including Marathon Petroleum Corporation's (NYSE: MPC) Galveston Bay refinery.
Also in the Permian, the Whistler Pipeline is being designed to transport approximately 2 billion cubic feet per day of natural gas from Waha, Texas to the Agua Dulce market in South Texas, ultimately reaching MPC's Galveston Bay refinery. MPLX has an equity interest in Whistler, which is expected to be placed in service in the second half of 2021.
To support additional growth in the G&P segment, MPLX placed into service the Sherwood 12 and Torñado processing plants in October, adding 400 million cubic feet per day of capacity. The company expects to complete the Sherwood 13 processing plant late in the fourth quarter of 2019, adding another 200 million cubic feet per day of incremental capacity. Also, MPLX has two additional plants under various stages of development in the Permian.
Financial Position and Liquidity
As of September 30, 2019, MPLX had $41 million in cash, $3.5 billion available through its bank revolving credit facility expiring in July 2024, $1.4 billion available through its intercompany loan agreement with MPC, and $500 million of capacity available through its new bank term loan facility. The company's leverage ratio was 4.0x at September 30, 2019.
As a result of the completion of the ANDX acquisition, MPLX assumed an aggregate principal amount of $3.75 billion senior notes issued by ANDX. On September 23, 2019, approximately $3.06 billion aggregate principal amount of ANDX's outstanding senior notes were exchanged for new unsecured notes issued by MPLX having the same maturity and interest rates as the previously outstanding ANDX notes and cash as part of an exchange offer and consent solicitation undertaken by MPLX and ANDX.
During the quarter, MPLX also issued $2.0 billion aggregate principal amount of unsecured senior notes in an underwritten public offering consisting of $1.0 billion aggregate principal amount of floating rate senior notes due 2021 and $1.0 billion aggregate principal amount of floating rate senior notes due 2022. In addition, on September 26, 2019, MPLX entered into a term loan agreement with a syndicate of lenders providing for a committed term loan facility for up to an aggregate of $1.0 billion. MPLX borrowed $500 million under the term loan agreement during the quarter.
MPLX used a portion of the net proceeds from the notes offering and borrowings under the term loan agreement to repay the previously outstanding ANDX 5.500% senior notes due 2019 in the aggregate principal amount of $500 million at maturity on October 15, 2019 and to repay borrowings under its revolving credit facility and its intercompany loan agreement with MPC. The remainder of the proceeds from the notes offering and term loan borrowings have or will be used for general partnership purposes. MPLX remains committed to maintaining an investment-grade credit profile and a strategy of self-funding the equity portion of its organic growth capital needs.
Conference Call
At 11 a.m. EDT today, MPLX will hold a conference call and webcast to discuss the reported results and provide an update on operations. Interested parties may listen by visiting MPLX's website at http://www.mplx.com and clicking on the "2019 Third-Quarter Financial Results" link in the "News & Headlines" section. A replay of the webcast will be available on MPLX's website for two weeks. Financial information, including earnings release and other investor-related material, will also be available online prior to the conference call and webcast at http://ir.mplx.com.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Jim Mallamaci, Manager, Investor Relations
Evan Barbosa, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Communications (419) 421-2521
Jamal Khiery, Manager, Communications (419) 421-3312
Non-GAAP references
In addition to our financial information presented in accordance with U.S. generally accepted accounting principles (GAAP), management utilizes additional non-GAAP measures to facilitate comparisons of past performance and future periods. This press release and supporting schedules include the non-GAAP measures adjusted EBITDA and consolidated debt to last twelve months pro forma adjusted EBITDA, which we refer to as our leverage ratio, distributable cash flow (DCF) and distribution coverage ratio. The amount of adjusted EBITDA and DCF generated is considered by the board of directors of our general partner in approving the Partnership's cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) provision for income taxes; (iii) amortization of deferred financing costs; (iv) non-cash equity-based compensation; (v) net interest and other financial costs; (vi) income from equity method investments; (vii) distributions and adjustments related to equity method investments; (viii) unrealized derivative gains and losses; (ix) acquisition costs; (x) noncontrolling interest and (xi) other adjustments as deemed necessary. In general, we define DCF as adjusted EBITDA adjusted for (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items.
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record the realized gain or loss of the contract.
Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures.
DCF is a financial performance measure used by management as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders.
Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between the partnership's financial operating performance and cash distribution capability. We define the distribution coverage ratio as the ratio of DCF attributable to GP and LP unitholders to total GP and LP distributions declared.
Leverage ratio is a liquidity measure used by management, industry analysts, investors, lenders and rating agencies to analyze our ability to incur and service debt and fund capital expenditures.
Forward-Looking statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX). These forward-looking statements relate to, among other things, MPLX's acquisition of Andeavor Logistics LP and include expectations, estimates and projections concerning the business and operations, financial priorities and strategic plans of MPLX. These statements are accompanied by cautionary language identifying important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements. You can identify forward-looking statements by words such as "anticipate," "believe," "commitment," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "project," "proposition," "prospective," "pursue," "seek," "should," "strategy," "target," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the company's control and are difficult to predict. Factors that could cause MPLX's actual results to differ materially from those implied in the forward-looking statements include but are not limited to: Marathon Petroleum Corporation's (MPC) ability to achieve the strategic and other objectives related to the strategic initiatives and review discussed herein; the risk that anticipated opportunities and any other synergies from or anticipated benefits of the Andeavor Logistics acquisition may not be fully realized or may take longer to realize than expected, including whether the transaction will be accretive within the expected timeframe or at all; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDX; the amount and timing of future distributions; negative capital market conditions, including an increase of the current yield on common units; the ability to achieve strategic and financial objectives, including with respect to distribution coverage, future distribution levels, proposed projects and completed transactions; the success of MPC's portfolio optimization, including the ability to complete any divestitures on commercially reasonable terms and/or within the expected timeframe, and the effects of any such divestitures on the business, financial condition, results of operations and cash flows; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt on commercially reasonable terms, and the ability to successfully execute business plans, growth strategies and self-funding models; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects and planned investments, and the ability to obtain regulatory and other approvals with respect thereto; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of MPC's obligations under MPLX's commercial agreements; modifications to financial policies, capital budgets, and earnings and distributions; the ability to manage disruptions in credit markets or changes to credit ratings; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; other risk factors inherent to MPLX's industry; risks related to MPC; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2018, and in Forms 10-Q, filed with Securities and Exchange Commission (SEC).
Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: with respect to the planned Speedway separation, the ability to successfully complete the separation within the expected timeframe or at all, based on numerous factors including the macroeconomic environment, credit markets and equity markets, and the ability to satisfy customary conditions and achieve the strategic and other objectives related thereto; with respect to the Midstream review, the ability to achieve the strategic and other objectives related to the strategic review discussed herein; the risk that the cost savings and any other synergies from the Andeavor transaction may not be fully realized or may take longer to realize than expected; disruption from the Andeavor transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of Andeavor; risks related to the acquisition of Andeavor Logistics LP by MPLX, including the risk that anticipated opportunities and any other synergies from or anticipated benefits of the transaction may not be fully realized or may take longer to realize than expected, including whether the transaction will be accretive within the expected timeframe or at all, or disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; the ability to complete any divestitures on commercially reasonable terms and/or within the expected timeframe, and the effects of any such divestitures on the business, financial condition, results of operations and cash flows; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income and earnings per share; the regional, national and worldwide availability and pricing of refined products, crude oil, natural gas, NGLs and other feedstocks; consumer demand for refined products; the ability to manage disruptions in credit markets or changes to credit ratings; future levels of capital, environmental and maintenance expenditures; general and administrative and other expenses; the success or timing of completion of ongoing or anticipated capital or maintenance projects; the reliability of processing units and other equipment; business strategies, growth opportunities and expected investment; share repurchase authorizations, including the timing and amounts of such repurchases; the adequacy of capital resources and liquidity, including availability, timing and amounts of free cash flow necessary to execute business plans and to effect any share repurchases or dividend increases; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on the business, financial condition, results of operations and cash flows; continued or further volatility in and/or degradation of general economic, market, industry or business conditions; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or enforcement actions initiated thereunder; the anticipated effects of actions of third parties such as competitors, activist investors or federal, foreign, state or local regulatory authorities or plaintiffs in litigation; the impact of adverse market conditions or other similar risks to those identified herein affecting MPLX; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2018, and in Forms 10-Q, filed with the SEC.
We have based our forward-looking statements on our current expectations, estimates and projections about our business and industry. We caution that these statements are not guarantees of future performance and you should not rely unduly on them, as they involve risks, uncertainties, and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. While our management considers these assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Accordingly, our actual results may differ materially from the future performance that we have expressed or forecast in our forward-looking statements. We undertake no obligation to update any forward-looking statements except to the extent required by applicable law. Copies of MPLX's Form 10-K and Forms 10-Q are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of MPC's Form 10-K and Forms 10-Q are available on the SEC website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.
Condensed Results of Operations (unaudited) | |||||||||||||||
Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | ||||||||||||||
(In millions, except per unit data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Revenues and other income: | |||||||||||||||
Operating revenue | $ | 928 | $ | 843 | $ | 2,818 | $ | 2,306 | |||||||
Operating revenue - related parties | 1,224 | 776 | 3,562 | 2,148 | |||||||||||
Income (loss) from equity method investments | 95 | 64 | 255 | 175 | |||||||||||
Other income | 33 | 29 | 90 | 81 | |||||||||||
Total revenues and other income | 2,280 | 1,712 | 6,725 | 4,710 | |||||||||||
Costs and expenses: | |||||||||||||||
Operating expenses | 573 | 514 | 1,691 | 1,406 | |||||||||||
Operating expenses - related parties | 348 | 229 | 1,018 | 630 | |||||||||||
Depreciation and amortization | 302 | 201 | 916 | 565 | |||||||||||
General and administrative expenses | 102 | 76 | 293 | 217 | |||||||||||
Other taxes | 29 | 20 | 84 | 55 | |||||||||||
Total costs and expenses | 1,354 | 1,040 | 4,002 | 2,873 | |||||||||||
Income from operations | 926 | 672 | 2,723 | 1,837 | |||||||||||
Interest and other financial costs | 233 | 153 | 686 | 434 | |||||||||||
Income before income taxes | 693 | 519 | 2,037 | 1,403 | |||||||||||
(Benefit) provision for income taxes | 4 | 3 | 2 | 8 | |||||||||||
Net income | 689 | 516 | 2,035 | 1,395 | |||||||||||
Less: Net income (loss) attributable to noncontrolling | 8 | 6 | 20 | 11 | |||||||||||
Less: Net income attributable to Predecessor | 52 | — | 401 | — | |||||||||||
Net income attributable to MPLX LP | 629 | 510 | 1,614 | 1,384 | |||||||||||
Less: Series A preferred unit distributions | 20 | 19 | 61 | 55 | |||||||||||
Less: Series B preferred unit distributions | 7 | — | 7 | — | |||||||||||
Limited partners' interest in net income attributable to | $ | 602 | $ | 491 | $ | 1,546 | $ | 1,329 | |||||||
Per Unit Data | |||||||||||||||
Net income attributable to MPLX LP per limited partner | |||||||||||||||
Common - basic | $ | 0.61 | $ | 0.62 | $ | 1.78 | $ | 1.77 | |||||||
Common - diluted | $ | 0.61 | $ | 0.62 | $ | 1.78 | $ | 1.77 | |||||||
Weighted average limited partner units outstanding: | |||||||||||||||
Common units – basic | 974 | 794 | 855 | 750 | |||||||||||
Common units – diluted | 975 | 794 | 855 | 750 | |||||||||||
Select Financial Statistics (unaudited) | Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||
(In millions, except ratio data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Common unit distributions declared by MPLX | |||||||||||||||
Common units (LP) - public(a) | $ | 266 | $ | 185 | $ | 718 | $ | 545 | |||||||
Common units - MPC(a)(b) | 438 | 322 | 1,201 | 926 | |||||||||||
Total GP and LP distribution declared | 704 | 507 | 1,919 | 1,471 | |||||||||||
Preferred unit distributions(c) | |||||||||||||||
Series A preferred unit distributions(d) | 20 | 19 | 61 | 55 | |||||||||||
Series B preferred unit distributions(e) | 10 | — | 31 | — | |||||||||||
Total preferred unit distributions | 30 | 19 | 92 | 55 | |||||||||||
Other Financial Data | |||||||||||||||
Adjusted EBITDA attributable to MPLX LP (excluding | 1,165 | 937 | 3,015 | 2,564 | |||||||||||
Adjusted EBITDA attributable to MPLX LP (including | 1,273 | N/A | 3,785 | N/A | |||||||||||
DCF attributable to GP and LP unitholders(f)(h) | $ | 997 | $ | 747 | $ | 2,963 | $ | 2,025 | |||||||
Distribution coverage ratio(i) | 1.42x | 1.47x | 1.54x | 1.38x | |||||||||||
Cash Flow Data | |||||||||||||||
Net cash flow provided by (used in): | |||||||||||||||
Operating activities | $ | 1,036 | $ | 737 | $ | 2,990 | $ | 2,027 | |||||||
Investing activities | (750) | (1,073) | (2,189) | (2,027) | |||||||||||
Financing activities | $ | (276) | $ | 366 | $ | (845) | $ | 30 | |||||||
(a) | The distribution on common units for both the three and nine months ended September 30, 2019 includes the impact |
(b) | Distributions to MPC exclude $12.5 million in distributions waived by MPC in connection with MPLX's acquisition of ANDX with |
(c) | Includes MPLX distributions declared on the Series A and Series B preferred units as well as distributions earned on the Series |
(d) | Series A preferred units are considered redeemable securities due to the existence of redemption provisions upon a deemed |
(e) | As a result of the ANDX acquisition, 600,000 ANDX preferred units were converted into 600,000 preferred units of MPLX (the |
(f) | Non-GAAP measure. See reconciliation below. |
(g) | Excludes predecessor EBITDA that is attributable to the period prior to the acquisition date of July 30, 2019. |
(h) | Includes predecessor EBITDA and DCF that is attributable to the period prior to the acquisition date of July 30, 2019. |
(i) | DCF attributable to GP and LP unitholders (including DCF attributable to predecessor) divided by total GP and LP distribution declared. |
Select Balance Sheet Data (unaudited) | |||||||
(In millions, except ratio data) | Sept. 30, | December 31, | |||||
Cash and cash equivalents | $ | 41 | $ | 77 | |||
Total assets | 41,281 | 39,325 | |||||
Total long-term debt(b) | 19,825 | 18,435 | |||||
Redeemable preferred units | 968 | 1,004 | |||||
Total equity | $ | 17,892 | $ | 17,731 | |||
Consolidated total debt to adjusted EBITDA(c) | 4.0x | 3.8x | |||||
Partnership units outstanding: | |||||||
MPC-held common units | 666 | 505 | |||||
Public common units | 392 | 289 | |||||
(a) | Financial information has been retrospectively adjusted for the acquisition of ANDX. |
(b) | Outstanding intercompany borrowings were $125 million as of September 30, 2019 |
(c) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro |
Operating Statistics (unaudited)(a) | |||||||||||||||||||||
Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | ||||||||||||||||||||
2019 | 2018 | % | 2019 | 2018 | % | ||||||||||||||||
Logistics and Storage | |||||||||||||||||||||
Pipeline throughput (mbpd) | |||||||||||||||||||||
Crude oil pipelines | 3,367 | 2,208 | 52 | % | 3,240 | 2,149 | 51 | % | |||||||||||||
Product pipelines | 1,859 | 1,182 | 57 | % | 1,875 | 1,135 | 65 | % | |||||||||||||
Total pipelines | 5,226 | 3,390 | 54 | % | 5,115 | 3,284 | 56 | % | |||||||||||||
Average tariff rates ($ per barrel) | |||||||||||||||||||||
Crude oil pipelines | $ | 0.97 | $ | 0.60 | 62 | % | $ | 0.94 | $ | 0.58 | 62 | % | |||||||||
Product pipelines | 0.77 | 0.86 | (10) | % | 0.73 | 0.80 | (9) | % | |||||||||||||
Total pipelines | $ | 0.90 | $ | 0.69 | 30 | % | 0.86 | 0.66 | 30 | % | |||||||||||
Terminal throughput (mbpd) | 3,292 | 1,474 | 123 | % | 3,267 | 1,468 | 123 | % | |||||||||||||
Barges at period-end | 264 | 256 | 3 | % | 264 | 256 | 3 | % | |||||||||||||
Towboats at period-end | 23 | 20 | 15 | % | 23 | 20 | 15 | % | |||||||||||||
(a) | Includes predecessor operations for the three and nine months ended September 30, 2019. |
Gathering and Processing | Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||||||||
2019 | 2018 | % | 2019 | 2018 | % | ||||||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 1,271 | 1,201 | 6 | % | 1,273 | 1,157 | 10 | % | |||||||||||||
Utica Operations | — | — | — | % | — | — | — | % | |||||||||||||
Southwest Operations | 1,653 | 1,599 | 3 | % | 1,618 | 1,523 | 6 | % | |||||||||||||
Bakken Operations | 149 | N/A | N/A | 149 | N/A | N/A | |||||||||||||||
Rockies Operations | 627 | N/A | N/A | 639 | N/A | N/A | |||||||||||||||
Total gathering throughput | 3,700 | 2,800 | 32 | % | 3,679 | 2,680 | 37 | % | |||||||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 4,264 | 4,004 | 6 | % | 4,211 | 3,775 | 12 | % | |||||||||||||
Utica Operations | — | — | — | % | — | — | — | % | |||||||||||||
Southwest Operations | 1,667 | 1,479 | 13 | % | 1,608 | 1,403 | 15 | % | |||||||||||||
Southern Appalachian Operations | 254 | 226 | 12 | % | 244 | 244 | — | % | |||||||||||||
Bakken Operations | 149 | N/A | N/A | 149 | N/A | N/A | |||||||||||||||
Rockies Operations | 568 | N/A | N/A | 575 | N/A | N/A | |||||||||||||||
Total natural gas processed | 6,902 | 5,709 | 21 | % | 6,787 | 5,422 | 25 | % | |||||||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||||||
Marcellus Operations | 433 | 405 | 7 | % | 431 | 374 | 15 | % | |||||||||||||
Utica Operations | — | — | — | % | — | — | — | % | |||||||||||||
Southwest Operations | 19 | 20 | (5) | % | 13 | 18 | (28) | % | |||||||||||||
Southern Appalachian Operations | 13 | 14 | (7) | % | 12 | 13 | (8) | % | |||||||||||||
Bakken Operations | 29 | N/A | N/A | 22 | N/A | N/A | |||||||||||||||
Rockies Operations | 4 | N/A | N/A | 4 | N/A | N/A | |||||||||||||||
Total C2 + NGLs fractionated | 498 | 439 | 13 | % | 482 | 405 | 19 | % | |||||||||||||
(a) | Includes operating data for entities that have been consolidated into the MPLX financial statements. Also includes |
Gathering and Processing | Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | |||||||||||||||||||
2019 | 2018 | % | 2019 | 2018 | % | ||||||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 1,271 | 1,201 | 6 | % | 1,273 | 1,157 | 10 | % | |||||||||||||
Utica Operations | 2,381 | 1,936 | 23 | % | 2,186 | 1,722 | 27 | % | |||||||||||||
Southwest Operations | 1,653 | 1,600 | 3 | % | 1,618 | 1,524 | 6 | % | |||||||||||||
Bakken Operations | 149 | N/A | N/A | 149 | N/A | N/A | |||||||||||||||
Rockies Operations | 827 | N/A | N/A | 835 | N/A | N/A | |||||||||||||||
Total gathering throughput | 6,281 | 4,737 | 33 | % | 6,061 | 4,403 | 38 | % | |||||||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 5,300 | 4,609 | 15 | % | 5,218 | 4,338 | 20 | % | |||||||||||||
Utica Operations | 866 | 857 | 1 | % | 835 | 889 | (6) | % | |||||||||||||
Southwest Operations | 1,667 | 1,479 | 13 | % | 1,608 | 1,403 | 15 | % | |||||||||||||
Southern Appalachian Operations | 254 | 226 | 12 | % | 244 | 244 | — | % | |||||||||||||
Bakken Operations | 149 | N/A | N/A | 149 | N/A | N/A | |||||||||||||||
Rockies Operations | 568 | N/A | N/A | 575 | N/A | N/A | |||||||||||||||
Total natural gas processed | 8,804 | 7,171 | 23 | % | 8,629 | 6,874 | 26 | % | |||||||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||||||
Marcellus Operations | 433 | 405 | 7 | % | 431 | 374 | 15 | % | |||||||||||||
Utica Operations | 49 | 49 | — | % | 45 | 46 | (2) | % | |||||||||||||
Southwest Operations | 19 | 20 | (5) | % | 13 | 18 | (28) | % | |||||||||||||
Southern Appalachian Operations | 13 | 14 | (7) | % | 12 | 13 | (8) | % | |||||||||||||
Bakken Operations | 29 | N/A | N/A | 22 | N/A | N/A | |||||||||||||||
Rockies Operations | 4 | N/A | N/A | 4 | N/A | N/A | |||||||||||||||
Total C2 + NGLs fractionated | 547 | 488 | 12 | % | 527 | 451 | 17 | % | |||||||||||||
(a) | Includes operating data for entities that have been consolidated into the MPLX financial statements as well as operating data for partnership-operated equity |
Reconciliation of Segment Adjusted EBITDA to Net | |||||||||||||||
Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 849 | $ | 547 | $ | 2,498 | $ | 1,510 | |||||||
G&P segment adjusted EBITDA attributable to MPLX LP | 424 | 390 | 1,287 | 1,054 | |||||||||||
Adjusted EBITDA attributable to MPLX LP (including | 1,273 | 937 | 3,785 | 2,564 | |||||||||||
Depreciation and amortization | (302) | (201) | (916) | (565) | |||||||||||
Provision for income taxes | (4) | (3) | (2) | (8) | |||||||||||
Amortization of deferred financing costs | (10) | (14) | (29) | (45) | |||||||||||
Non-cash equity-based compensation | (5) | (6) | (17) | (15) | |||||||||||
Net interest and other financial costs | (223) | (139) | (657) | (389) | |||||||||||
Income from equity method investments | 95 | 64 | 255 | 175 | |||||||||||
Distributions/adjustments related to equity method investments | (145) | (112) | (399) | (314) | |||||||||||
Unrealized derivative losses(a) | 11 | (17) | 7 | (18) | |||||||||||
Acquisition costs | (9) | — | (14) | (3) | |||||||||||
Other | (1) | — | (1) | — | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | 9 | 7 | 23 | 13 | |||||||||||
Net income | $ | 689 | $ | 516 | $ | 2,035 | $ | 1,395 | |||||||
(a) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, |
L&S Reconciliation of Segment Income from | |||||||||||||||
Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
L&S segment income from operations | $ | 713 | $ | 468 | $ | 2,075 | $ | 1,287 | |||||||
Depreciation and amortization | 113 | 62 | 373 | 171 | |||||||||||
Income from equity method investments | (60) | (43) | (159) | (123) | |||||||||||
Distributions/adjustments related to equity method | 70 | 57 | 184 | 164 | |||||||||||
Acquisition costs | 9 | — | 14 | 3 | |||||||||||
Non-cash equity-based compensation | 3 | 3 | 10 | 8 | |||||||||||
Other | 1 | — | 1 | — | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP | 849 | 547 | 2,498 | 1,510 | |||||||||||
L&S predecessor segment adjusted EBITDA attributable to | (83) | — | (603) | — | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 766 | $ | 547 | $ | 1,895 | $ | 1,510 | |||||||
G&P Reconciliation of Segment Income from | |||||||||||||||
Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
G&P segment income from operations | $ | 213 | $ | 204 | $ | 648 | $ | 550 | |||||||
Depreciation and amortization | 189 | 139 | 543 | 394 | |||||||||||
Income from equity method investments | (35) | (21) | (96) | (52) | |||||||||||
Distributions/adjustments related to equity method investments | 75 | 55 | 215 | 150 | |||||||||||
Unrealized derivative losses(a) | (11) | 17 | (7) | 18 | |||||||||||
Non-cash equity-based compensation | 2 | 3 | 7 | 7 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interest | (9) | (7) | (23) | (13) | |||||||||||
G&P segment adjusted EBITDA attributable to MPLX LP | 424 | 390 | 1,287 | 1,054 | |||||||||||
G&P predecessor segment adjusted EBITDA attributable to | (25) | — | (167) | — | |||||||||||
G&P segment adjusted EBITDA attributable to MPLX LP | $ | 399 | $ | 390 | $ | 1,120 | $ | 1,054 | |||||||
(a) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is |
Reconciliation of Adjusted EBITDA Attributable to MPLX | |||||||||||||||
Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income | $ | 689 | $ | 516 | $ | 2,035 | $ | 1,395 | |||||||
Provision for income taxes | 4 | 3 | 2 | 8 | |||||||||||
Amortization of deferred financing costs | 10 | 14 | 29 | 45 | |||||||||||
Net interest and other financial costs | 223 | 139 | 657 | 389 | |||||||||||
Income from operations | 926 | 672 | 2,723 | 1,837 | |||||||||||
Depreciation and amortization | 302 | 201 | 916 | 565 | |||||||||||
Non-cash equity-based compensation | 5 | 6 | 17 | 15 | |||||||||||
Income from equity method investments | (95) | (64) | (255) | (175) | |||||||||||
Distributions/adjustments related to equity method | 145 | 112 | 399 | 314 | |||||||||||
Unrealized derivative (gains) losses(a) | (11) | 17 | (7) | 18 | |||||||||||
Acquisition costs | 9 | — | 14 | 3 | |||||||||||
Other | 1 | — | 1 | — | |||||||||||
Adjusted EBITDA | 1,282 | 944 | 3,808 | 2,577 | |||||||||||
Adjusted EBITDA attributable to noncontrolling | (9) | (7) | (23) | (13) | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | (108) | — | (770) | — | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 1,165 | 937 | 3,015 | 2,564 | |||||||||||
Deferred revenue impacts | 36 | 13 | 67 | 24 | |||||||||||
Net interest and other financial costs | (223) | (139) | (657) | (389) | |||||||||||
Maintenance capital expenditures | (75) | (40) | (174) | (98) | |||||||||||
Maintenance capital expenditures reimbursements | 18 | — | 34 | — | |||||||||||
Equity method investment capital expenditures paid | (8) | (6) | (16) | (22) | |||||||||||
Other | 6 | 1 | 16 | 1 | |||||||||||
Portion of DCF adjustments attributable to predecessor(b) | 27 | — | 159 | — | |||||||||||
DCF attributable to MPLX LP | 946 | 766 | 2,444 | 2,080 | |||||||||||
Preferred unit distributions(c) | (30) | (19) | (92) | (55) | |||||||||||
DCF attributable to GP and LP unitholders (excluding | 916 | 747 | 2,352 | 2,025 | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | 108 | — | 770 | — | |||||||||||
Portion of DCF adjustments attributable to | (27) | — | (159) | — | |||||||||||
DCF attributable to GP and LP unitholders (including | $ | 997 | $ | 747 | $ | 2,963 | $ | 2,025 | |||||||
(a) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
(b) | The adjusted EBITDA and DCF adjustments related to predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF |
(c) | Includes MPLX distributions declared on the Series A and Series B preferred units as well as cash distributions earned by the Series B |
Reconciliation of Net Income to LTM Pro forma adjusted EBITDA (unaudited) | |||||||
Three Months Ended Sept. 30 | |||||||
(In millions) | 2019 | 2018 | |||||
LTM Net income | $ | 2,126 | $ | 1,636 | |||
LTM Net income to adjusted EBITDA adjustments | 1,908 | 1,811 | |||||
LTM Adjusted EBITDA attributable to MPLX LP | 4,034 | 3,447 | |||||
LTM Pro forma adjustments for acquisitions | 1,001 | 37 | |||||
LTM Pro forma adjusted EBITDA | 5,035 | 3,484 | |||||
Consolidated debt | $ | 20,245 | $ | 13,357 | |||
Consolidated debt to adjusted EBITDA | 4.0x | 3.8x | |||||
Reconciliation of Adjusted EBITDA Attributable to | |||||||||||||||
Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net cash provided by operating activities | $ | 1,036 | $ | 737 | $ | 2,990 | $ | 2,027 | |||||||
Changes in working capital items | 21 | 45 | 134 | 78 | |||||||||||
All other, net | (15) | (9) | (23) | 5 | |||||||||||
Non-cash equity-based compensation | 5 | 6 | 17 | 15 | |||||||||||
Net gain (loss) on disposal of assets | 1 | (1) | 3 | (1) | |||||||||||
Current income taxes | 1 | 1 | 1 | 1 | |||||||||||
Net interest and other financial costs | 223 | 139 | 657 | 389 | |||||||||||
Asset retirement expenditures | — | 2 | 1 | 7 | |||||||||||
Unrealized derivative (gains) losses(a) | (11) | 17 | (7) | 18 | |||||||||||
Acquisition costs | 9 | — | 14 | 3 | |||||||||||
Other adjustments related to equity method | 11 | 8 | 20 | 35 | |||||||||||
Other | 1 | (1) | 1 | — | |||||||||||
Adjusted EBITDA | 1,282 | 944 | 3,808 | 2,577 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | (9) | (7) | (23) | (13) | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | (108) | — | (770) | — | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 1,165 | 937 | 3,015 | 2,564 | |||||||||||
Deferred revenue impacts | 36 | 13 | 67 | 24 | |||||||||||
Net interest and other financial costs | (223) | (139) | (657) | (389) | |||||||||||
Maintenance capital expenditures | (75) | (40) | (174) | (98) | |||||||||||
Maintenance capital expenditures reimbursements | 18 | — | 34 | — | |||||||||||
Equity method investment capital expenditures paid out | (8) | (6) | (16) | (22) | |||||||||||
Other | 6 | 1 | 16 | 1 | |||||||||||
Portion of DCF adjustments attributable to | 27 | — | 159 | — | |||||||||||
DCF attributable to MPLX LP | 946 | 766 | 2,444 | 2,080 | |||||||||||
Preferred unit distributions(c) | (30) | (19) | (92) | (55) | |||||||||||
DCF attributable to GP and LP unitholders (excluding | 916 | 747 | 2,352 | 2,025 | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | 108 | — | 770 | — | |||||||||||
Portion of DCF adjustments attributable to predecessor(b) | (27) | — | (159) | — | |||||||||||
DCF attributable to GP and LP unitholders (including | $ | 997 | $ | 747 | $ | 2,963 | $ | 2,025 | |||||||
(a) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period |
(b) | The adjusted EBITDA and DCF adjustments related to predecessor are excluded from adjusted EBITDA attributable |
(c) | Includes MPLX distributions declared on the Series A and Series B preferred units as well as cash distributions |
Capital Expenditures (unaudited) | |||||||||||||||
Three Months Ended Sept. 30 | Nine Months Ended Sept. 30 | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Capital Expenditures: | |||||||||||||||
Maintenance | $ | 75 | $ | 40 | $ | 174 | $ | 98 | |||||||
Maintenance reimbursements | (18) | — | (34) | — | |||||||||||
Growth | 518 | 458 | 1,479 | 1,382 | |||||||||||
Growth reimbursements | (5) | — | (17) | — | |||||||||||
Total capital expenditures | 570 | 498 | 1,602 | 1,480 | |||||||||||
Less: Increase (decrease) in capital accruals | 10 | (25) | (67) | 90 | |||||||||||
Asset retirement expenditures | — | 2 | 1 | 7 | |||||||||||
Additions to property, plant and equipment, net(a) | 560 | 521 | 1,668 | 1,383 | |||||||||||
Investments in unconsolidated affiliates | 171 | 103 | 494 | 215 | |||||||||||
Acquisitions | — | 451 | (5) | 451 | |||||||||||
Total capital expenditures and acquisitions | 731 | $ | 1,075 | $ | 2,157 | $ | 2,049 | ||||||||
Less: Maintenance capital expenditures (including | 57 | 40 | 140 | 98 | |||||||||||
Acquisitions | — | 451 | (5) | 451 | |||||||||||
Total growth capital expenditures(b) | $ | 674 | $ | 584 | $ | 2,022 | $ | 1,500 | |||||||
(a) | This amount is represented in the Consolidated Statements of Cash Flows as Additions to property, plant and equipment |
(b) | Amount excludes contributions from noncontrolling interests of $94 million and $8 million for the nine months ended September |
View original content:http://www.prnewswire.com/news-releases/mplx-lp-reports-third-quarter-2019-financial-results-300948988.html
SOURCE MPLX LP
FINDLAY, Ohio, Oct. 31, 2019 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported net income of $1.1 billion, or $1.66 per diluted share, for the third quarter 2019 compared to $737 million, or $1.62 per diluted share, for the third quarter of 2018. Excluding adjustments shown in the accompanying earnings release tables, third quarter 2019 adjusted net income was $1.1 billion, or $1.63 per diluted share, compared to $774 million, or $1.70 per diluted share, for the third quarter of 2018.
MPC returned $848 million of capital to shareholders during the third quarter of 2019, including $500 million in share repurchases.
"Our third-quarter results showcased our operational and commercial excellence," said Gary R. Heminger, chairman and chief executive officer. "Refining system utilization was 98% and leveraging our commercial expertise drove strong capture of 94% vs. market indicators. The retail segment delivered solid fuel margins and exceptional merchandise sales growth across our nationwide footprint, marking the 33rd consecutive quarter of same-store merchandise sales growth.
"The focus of the first year of our combination was execution to unlock unrealized value. We have made significant, observable progress improving mechanical availability and operational integrity, expanding our commercial capabilities, and reducing costs. We have converted roughly 550 of our targeted 700 retail stores and our synergy capture across the company is significantly ahead-of-schedule and on-track to exceed the targeted $600 million by year end."
"Our company has a history of bold strategic actions. Creating value for our shareholders has always been and remains a top priority. Today we announced our next step to unlocking future value: our intent to separate Speedway into an independent company. Additionally, we are forming a special committee of the Board of Directors to continue evaluating alternatives to enhance value across our midstream business."
Synergies
MPC realized $283 million of synergies in the third quarter. Some examples of realized synergies include: approximately $55 million from supply and distribution optimization, approximately $40 million from catalyst reformulation, and approximately $24 million from marketing-related enhancements. The company has realized $686 million of total synergies through the first nine months of the year, and is on track to exceed the $600 million of annual gross run-rate synergies targeted for the end of 2019.
Segment Results
In the third quarter of 2019, total income from operations was $2.0 billion compared to $1.4 billion for the third quarter of 2018. Adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $3.1 billion in the third quarter of 2019 compared to $2.2 billion for the same quarter last year. Adjusted EBITDA excludes refining planned turnaround costs of $164 million in the third quarter of 2019 and $197 million in the third quarter of 2018.
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
Income from Operations by Segment | |||||||
Refining & Marketing | $ | 883 | $ | 666 | |||
Retail | 442 | 161 | |||||
Midstream | 919 | 679 | |||||
Items not allocated to segments: | |||||||
Corporate and other unallocated items | (198) | (99) | |||||
Transaction-related costs | (22) | (4) | |||||
Income from operations | $ | 2,024 | $ | 1,403 |
Midstream
Midstream segment income from operations, which primarily reflects the results of MPLX LP (NYSE: MPLX), was $919 million in the third quarter of 2019, compared with $679 million for the third quarter of 2018. The increase was due to growth across MPLX's businesses as well as contributions from legacy Andeavor Logistics. Segment EBITDA was $1.2 billion in the third quarter 2019 versus $884 million for the same quarter last year.
Retail
Retail segment income from operations was $442 million in the third quarter of 2019, compared with $161 million in the third quarter of 2018. The increase in earnings was largely related to the addition of the legacy Andeavor retail operations and higher fuel and merchandise margin contributions across the legacy Speedway system. Segment EBITDA was $555 million in the third quarter 2019 versus $237 million for the same quarter last year.
Retail fuel margin increased to 24.5 cents per gallon in the third quarter of 2019 from 16.5 cents per gallon in the third quarter of 2018. Same-store merchandise sales increased by 5.2 percent year-over-year and same-store gasoline sales volume decreased by 2.8 percent year-over-year.
Refining & Marketing (R&M)
R&M segment income from operations was $883 million in the third quarter of 2019 compared with $666 million in the same quarter of 2018. The year-over-year increase was primarily due to higher throughputs as a result of the Andeavor combination. R&M margin was $14.66 per barrel for the quarter with a clean product yield of 83 percent.
Segment adjusted EBITDA was $1.4 billion in the third quarter of 2019 versus $1.1 billion for the same quarter last year. Segment adjusted EBITDA excludes refinery planned turnaround costs which totaled $164 million in the third quarter of 2019. This compares to $197 million of turnaround-related costs in the third quarter of 2018.
Crude capacity utilization was 98 percent, resulting in total throughputs of 3.2 million barrels per day for the third quarter of 2019, which was 1.1 million barrels per day higher than the throughput for the third quarter of last year. The increase was primarily due to the addition of the Andeavor refineries.
Items Not Allocated to Segments and Other
Items not allocated to segments totaled $220 million of expenses in the third quarter of 2019 compared to $103 million in the third quarter of 2018. Third quarter 2019 results include $22 million of transaction-related expenses and the inclusion of legacy Andeavor corporate costs.
Strong Financial Position and Liquidity
As of Sept. 30, 2019, the company had $1.5 billion in cash and cash equivalents (excluding MPLX's cash and cash equivalents of $41 million), $5 billion available under a five-year bank revolving credit facility, $1 billion available under a 364-day bank revolving credit facility, and $750 million available under its trade receivables securitization facility.
Strategic Update
In a separate release this morning, MPC announced several strategic actions to enhance shareholder value. The company plans to separate its Speedway business into an independent company and also form a special committee of MPC's board to continue to evaluate alternatives to enhance value across the midstream business. Among other aspects, the special committee will analyze the strategic fit of assets with MPC, the ability to realize full valuation credit for midstream earnings and cash flow, balance sheet impacts including liquidity and credit ratings, transaction tax impacts, separation costs, and overall complexity.
During the quarter, the Gray Oak Pipeline project progressed and is expected to be placed in service by the end of 2019. The pipeline will provide crude oil transportation from the Permian and Eagle Ford Basins to the Texas Gulf Coast region, including Corpus Christi. The Gray Oak pipeline will connect to multiple terminals including the South Texas Gateway Terminal, which is expected to start up by mid-2020. The terminal is designed to have two deepwater docks, with initial storage capacity of approximately 7 million barrels and up to 800 mbpd of throughput capacity. MPC owns a 25 percent interest in both the Gray Oak Pipeline and the South Texas Gateway Terminal.
The Wink-to-Webster crude oil pipeline, in which MPLX has an equity interest, remains on schedule to be competed in the first half of 2021. The 36-inch diameter pipeline will originate in the Permian Basin and have destination points in the Houston market, including MPC's Galveston Bay refinery.
Also in the Permian, the Whistler Pipeline is being designed to transport approximately 2 billion cubic feet per day of natural gas from Waha, Texas to the Agua Dulce market in South Texas, ultimately reaching MPC's Galveston Bay refinery. MPLX has an equity interest in Whistler, which is expected to be placed in service in the second half of 2021.
The company also continues to progress the reversal of the Capline pipeline, with a purge of the mainline initiated 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 the first half of 2021, with heavy crude service expected in 2022.
In the retail segment, Speedway continues to expand its brand through store conversions of the acquired Andeavor sites. As of September 30, 2019, Speedway had completed 379 store conversions in 2019, bringing the total number of conversions since the combination with Andeavor to 549. The company remains on track to complete 700 total cumulative store conversions by the end of 2019, including locations on the West Coast and in the Southwest.
MPC also continues to expand its presence in Mexico. In addition to significant exports from the Gulf Coast and investments in refined product distribution, the company is now supplying over 215 retail sites, including 171 that are branded ARCO as of September 30, 2019. The entire network of sites in Mexico provides additional product outlets for and enhanced integration with the refining business.
In preparation for the IMO fuel specification change, the company has completed infrastructure enhancements at multiple refineries to decrease on-purpose high sulfur fuel oil production and receive outside feedstocks into resid destruction units. The company progressed the completion of its Garyville crude revamp and coker drum replacement projects. The crude project is expected to be completed by the end of 2019. The coker project is expected to increase unit capacity by approximately 14 percent and remains on track to be completed in two phases, fourth quarter of 2019 and first quarter of 2020.
Construction continues on the Dickinson Renewable Diesel project, which remains on-track for planned completion in late 2020. The project will convert the Dickinson refinery into a 12 mbpd biorefinery that will process corn and soybean oil to produce renewable diesel. MPC intends to sell the renewable diesel into the California market to comply with the California Low Carbon Fuel Standard.
The Los Angeles Refinery Integration and Compliance (LARIC) project to physically connect the adjacent Carson and Wilmington facilities for cleaner and more efficient operations is nearing completion. The expansion of the Wilmington hydrocracker is on track to be completed in the first half of 2020.
Fourth Quarter 2019 Outlook | |||
Refining & Marketing Segment: | |||
Refining operating costs per barrel(a) | $ | 6.10 | |
Distribution costs (in millions) | $ | 1,300 | |
Refining planned turnaround costs (in millions) | $ | 185 | |
Depreciation and amortization (in millions) | $ | 425 | |
Refinery throughputs (mbpd): | |||
Crude oil refined | 2,775 | ||
Other charge and blendstocks | 175 | ||
Total | 2,950 | ||
(a) Includes refining major maintenance and operating costs. Excludes turnaround and depreciation and |
Retail Segment: | Range | ||||||
Fuel sales (millions of gallons) | 2,450 | 2,575 | |||||
Merchandise sales (in $ millions) | 1,500 | 1,600 | |||||
Corporate and unallocated items (in $ millions) | 195 |
Conference Call
At 9:30 a.m. EDT today, MPC will hold a conference call and webcast to discuss the reported results and provide an update on company operations. Interested parties may listen by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2019 Third-Quarter Financial Results" link. A replay of the webcast will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, will also be available online prior to the conference call and webcast at https://www.marathonpetroleum.com.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with more than 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company which owns and operates gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure. More information is available at www.marathonpetroleum.com.
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Taryn Erie, Manager, Investor Relations
Doug Wendt, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Communications (419) 421-2521
Jamal Kheiry, Manager, Communications (419) 421-3312
References to Earnings and Defined Terms
References to earnings mean net income attributable to MPC from the statements of income. Unless otherwise indicated, references to earnings and earnings per share are MPC's share after excluding amounts attributable to noncontrolling interests. Discretionary free cash flow is defined as operating cash flow less maintenance and regulatory capital.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation (MPC). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations, strategy and value creation plans of MPC. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, 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 MPC's actual results to differ materially from those implied in the forward-looking statements include but are not limited to: 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, our ability to satisfy customary conditions, and the ability to achieve the strategic and other objectives discussed herein; with respect to the Midstream review, our ability to achieve the strategic and other objectives related to the strategic review discussed herein; the risk that the cost savings and any other synergies from the Andeavor transaction may not be fully realized or may take longer to realize than expected; disruption from the Andeavor transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of Andeavor; risks related to the acquisition of Andeavor Logistics LP by MPLX LP (MPLX), including the risk that anticipated opportunities and any other synergies from or anticipated benefits of the transaction may not be fully realized or may take longer to realize than expected, including whether the transaction will be accretive within the expected timeframe or at all, or disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; the ability to complete any divestitures on commercially reasonable terms and/or within the expected timeframe, and the effects of any such divestitures on the business, financial condition, results of operations and cash flows; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income and earnings per share; the regional, national and worldwide availability and pricing of refined products, crude oil, natural gas, NGLs and other feedstocks; consumer demand for refined products; the ability to manage disruptions in credit markets or changes to credit ratings; future levels of capital, environmental and maintenance expenditures; general and administrative and other expenses; the success or timing of completion of ongoing or anticipated capital or maintenance projects; the reliability of processing units and other equipment; business strategies, growth opportunities and expected investment; share repurchase authorizations, including the timing and amounts of such repurchases; the adequacy of capital resources and liquidity, including availability, timing and amounts of free cash flow necessary to execute business plans and to effect any share repurchases or dividend increases; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on the business, financial condition, results of operations and cash flows; continued or further volatility in and/or degradation of general economic, market, industry or business conditions; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or enforcement actions initiated thereunder; the anticipated effects of actions of third parties such as competitors, activist investors or federal, foreign, state or local regulatory authorities or plaintiffs in litigation; the impact of adverse market conditions or other similar risks to those identified herein affecting MPLX; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2018, and in Forms 10-Q, filed with the SEC. 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. 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.
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.
Important Additional Information
MPC, its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from MPC shareholders in connection with the matters to be considered at MPC's 2020 Annual Meeting. MPC intends to file a proxy statement with the SEC in connection with any such solicitation of proxies from MPC shareholders. MPC shareholders are encouraged to read any such proxy statement and accompanying white proxy card when they become available as they will contain important information. Information regarding the ownership of MPC's directors and executive officers in MPC shares, restricted shares and options is included in their SEC filings on Forms 3, 4 and 5. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC in connection with MPC's 2020 Annual Meeting. Information can also be found in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed with the SEC, and Current Reports on Form 8-K filed with the SEC. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by MPC with the SEC for no charge on the SEC website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.
Consolidated Statements of Income (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions, except per-share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Revenues and other income: | |||||||||||||||
Sales and other operating revenues | $ | 31,043 | $ | 22,988 | $ | 92,857 | $ | 64,171 | |||||||
Income from equity method investments | 124 | 96 | 330 | 262 | |||||||||||
Net gain on disposal of assets | 4 | 1 | 222 | 6 | |||||||||||
Other income | 31 | 47 | 96 | 122 | |||||||||||
Total revenues and other income | 31,202 | 23,132 | 93,505 | 64,561 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of revenues (excludes items below) | 27,300 | 20,606 | 82,942 | 57,772 | |||||||||||
Depreciation and amortization | 855 | 555 | 2,660 | 1,616 | |||||||||||
Selling, general and administrative expenses | 833 | 445 | 2,618 | 1,271 | |||||||||||
Other taxes | 190 | 123 | 550 | 348 | |||||||||||
Total costs and expenses | 29,178 | 21,729 | 88,770 | 61,007 | |||||||||||
Income from operations | 2,024 | 1,403 | 4,735 | 3,554 | |||||||||||
Net interest and other financial costs | 317 | 240 | 945 | 618 | |||||||||||
Income before income taxes | 1,707 | 1,163 | 3,790 | 2,936 | |||||||||||
Provision for income taxes | 340 | 222 | 797 | 525 | |||||||||||
Net income | 1,367 | 941 | 2,993 | 2,411 | |||||||||||
Less net income attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 20 | 19 | 61 | 55 | |||||||||||
Noncontrolling interests | 252 | 185 | 738 | 527 | |||||||||||
Net income attributable to MPC | $ | 1,095 | $ | 737 | $ | 2,194 | $ | 1,829 | |||||||
Per-share data | |||||||||||||||
Basic: | |||||||||||||||
Net income attributable to MPC per share | $ | 1.67 | $ | 1.63 | $ | 3.31 | $ | 3.96 | |||||||
Weighted average shares: | 656 | 451 | 663 | 462 | |||||||||||
Diluted: | |||||||||||||||
Net income attributable to MPC per share | $ | 1.66 | $ | 1.62 | $ | 3.28 | $ | 3.92 | |||||||
Weighted average shares: | 660 | 456 | 668 | 466 | |||||||||||
Income Summary (Unaudited) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
(In millions) | 2019(a) | 2018 | 2019(a) | 2018 | |||||||||||||
Income from Operations by segment | |||||||||||||||||
Refining & Marketing | $ | 883 | $ | 666 | $ | 1,455 | $ | 1,558 | |||||||||
Retail | 442 | 161 | 1,105 | 415 | |||||||||||||
Midstream | 919 | 679 | 2,705 | 1,863 | |||||||||||||
Items not allocated to segments: | |||||||||||||||||
Corporate and other unallocated items | (198) | (99) | (568) | (269) | |||||||||||||
Capline restructuring gain | — | — | 207 | — | |||||||||||||
Transaction-related costs(b) | (22) | (4) | (147) | (14) | |||||||||||||
Litigation | — | — | (22) | — | |||||||||||||
Impairments | — | — | — | 1 | |||||||||||||
Income from operations | 2,024 | 1,403 | 4,735 | 3,554 | |||||||||||||
Net interest and other financial costs | 317 | 240 | 945 | 618 | |||||||||||||
Income before income taxes | 1,707 | 1,163 | 3,790 | 2,936 | |||||||||||||
Provision for income taxes | 340 | 222 | 797 | 525 | |||||||||||||
Net income | 1,367 | 941 | 2,993 | 2,411 | |||||||||||||
Less net income attributable to: | |||||||||||||||||
Redeemable noncontrolling interest | 20 | 19 | 61 | 55 | |||||||||||||
Noncontrolling interests | 252 | 185 | 738 | 527 | |||||||||||||
Net income attributable to MPC | $ | 1,095 | $ | 737 | $ | 2,194 | $ | 1,829 | |||||||||
(a) Includes the results of Andeavor from the October 1, 2018 acquisition date forward. | |||||||||||||||||
(b) Includes costs related to the Andeavor acquisition including financial advisor and legal fees, employee |
Capital Expenditures and Investments (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2019(a) | 2018 | 2019(a) | 2018 | |||||||||||
Refining & Marketing | $ | 561 | $ | 226 | $ | 1,385 | $ | 613 | |||||||
Retail | 177 | 98 | 370 | 225 | |||||||||||
Midstream | 783 | 593 | 2,420 | 1,676 | |||||||||||
Corporate and Other(b) | 62 | 28 | 141 | 97 | |||||||||||
Total | $ | 1,583 | $ | 945 | $ | 4,316 | $ | 2,611 | |||||||
(a) Includes the results of Andeavor from the October 1, 2018 acquisition date forward. | |||||||||||||||
(b) Includes capitalized interest of $32 million, $21 million, $97 million and $55 million, respectively. |
Refining & Marketing Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(per barrel) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Refining & Marketing margin(a) | $ | 14.66 | $ | 14.25 | $ | 13.72 | $ | 13.48 | |||||||
Less: | |||||||||||||||
Refining operating costs(b) | 5.44 | 4.25 | 5.45 | 4.55 | |||||||||||
Distribution costs(c) | 4.31 | 4.17 | 4.48 | 4.02 | |||||||||||
Other(d) | (0.05) | (0.17) | (0.05) | (0.15) | |||||||||||
Refining planned turnaround costs | 0.56 | 1.06 | 0.69 | 0.80 | |||||||||||
Depreciation and amortization | 1.45 | 1.38 | 1.46 | 1.40 | |||||||||||
Purchase accounting - depreciation and amortization(e) | (0.09) | — | (0.01) | — | |||||||||||
Refining & Marketing segment income | $ | 3.04 | $ | 3.56 | $ | 1.70 | $ | 2.86 | |||||||
Refining & Marketing refined product sales volume (mbpd)(f) | 3,706 | 2,382 | 3,730 | 2,346 | |||||||||||
Crude oil capacity utilization (percent)(g) | 98 | 97 | 97 | 97 | |||||||||||
Refinery throughputs (mbpd):(h) | |||||||||||||||
Crude oil refined | 2,969 | 1,833 | 2,925 | 1,819 | |||||||||||
Other charge and blendstocks | 187 | 199 | 200 | 173 | |||||||||||
Total | 3,156 | 2,032 | 3,125 | 1,992 | |||||||||||
Sour crude oil throughput (percent) | 47 | 52 | 49 | 53 | |||||||||||
Sweet crude oil throughput (percent) | 53 | 48 | 51 | 47 | |||||||||||
Refined product yields (mbpd):(h) | |||||||||||||||
Gasoline | 1,553 | 942 | 1,538 | 942 | |||||||||||
Distillates | 1,103 | 676 | 1,091 | 659 | |||||||||||
Propane | 56 | 40 | 55 | 37 | |||||||||||
Feedstocks and special products | 334 | 313 | 345 | 294 | |||||||||||
Heavy fuel oil | 44 | 29 | 47 | 30 | |||||||||||
Asphalt | 106 | 73 | 90 | 68 | |||||||||||
Total | 3,196 | 2,073 | 3,166 | 2,030 | |||||||||||
(a) Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. | |||||||||||||||
(b) Includes refining major maintenance and operating costs. Excludes planned turnaround and depreciation and | |||||||||||||||
(c) Includes fees paid to MPLX, on a per barrel throughput basis, of $2.74, $3.22, $2.79 and $3.08, respectively. | |||||||||||||||
(d) Includes income from equity method investments, net gain on disposal of assets and other income. | |||||||||||||||
(e) Reflects the cumulative effects related to a measurement period adjustment arising from the finalization of | |||||||||||||||
(f) Includes intersegment sales. | |||||||||||||||
(g) Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance | |||||||||||||||
(h) Excludes inter-refinery volumes of 116 mbpd, 54 mbpd, 98 mbpd and 53 mbpd, respectively. |
Refining & Marketing Operating Statistics by Region (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Gulf Coast | |||||||||||||||
(per barrel) | |||||||||||||||
Refining & Marketing margin dollars(a) | $ | 11.26 | $ | N/A | $ | 9.46 | $ | N/A | |||||||
Refining operating costs(b) | $ | 4.23 | $ | 3.54 | $ | 4.05 | $ | 4.16 | |||||||
Refining planned turnaround costs | $ | 0.15 | $ | 0.30 | $ | 0.18 | $ | 0.57 | |||||||
Refining depreciation and amortization(c) | $ | 1.08 | $ | 1.03 | $ | 1.08 | $ | 1.03 | |||||||
Refinery throughputs (mbpd):(d) | |||||||||||||||
Crude oil refined | 1,115 | 1,150 | 1,146 | 1,121 | |||||||||||
Other charge and blendstocks | 203 | 204 | 183 | 187 | |||||||||||
Total | 1,318 | 1,354 | 1,329 | 1,308 | |||||||||||
Sour crude oil throughput (percent) | 62 | 63 | 61 | 62 | |||||||||||
Sweet crude oil throughput (percent) | 38 | 37 | 39 | 38 | |||||||||||
Refined product yields (mbpd):(d) | |||||||||||||||
Gasoline | 559 | 567 | 565 | 557 | |||||||||||
Distillates | 429 | 442 | 438 | 421 | |||||||||||
Propane | 27 | 27 | 27 | 24 | |||||||||||
Feedstocks and special products | 297 | 314 | 295 | 301 | |||||||||||
Heavy fuel oil | 14 | 16 | 15 | 18 | |||||||||||
Asphalt | 20 | 22 | 21 | 21 | |||||||||||
Total | 1,346 | 1,388 | 1,361 | 1,342 | |||||||||||
Mid-Continent | |||||||||||||||
(per barrel) | |||||||||||||||
Refining & Marketing margin(a) | $ | 17.42 | $ | N/A | $ | 17.69 | $ | N/A | |||||||
Refining operating costs(b) | $ | 4.88 | $ | 5.26 | $ | 5.08 | $ | 4.96 | |||||||
Refining planned turnaround costs | $ | 1.26 | $ | 2.37 | $ | 0.75 | $ | 1.13 | |||||||
Refining depreciation and amortization(c) | $ | 1.43 | $ | 1.68 | $ | 1.54 | $ | 1.70 | |||||||
Refinery throughputs (mbpd):(d) | |||||||||||||||
Crude oil refined | 1,197 | 683 | 1,137 | 698 | |||||||||||
Other charge and blendstocks | 48 | 49 | 51 | 39 | |||||||||||
Total | 1,245 | 732 | 1,188 | 737 | |||||||||||
Sour crude oil throughput (percent) | 27 | 34 | 27 | 37 | |||||||||||
Sweet crude oil throughput (percent) | 73 | 66 | 73 | 63 | |||||||||||
Refined product yields (mbpd):(d) | |||||||||||||||
Gasoline | 628 | 375 | 618 | 385 | |||||||||||
Distillates | 415 | 234 | 405 | 238 | |||||||||||
Propane | 19 | 13 | 19 | 13 | |||||||||||
Feedstocks and special products | 86 | 53 | 65 | 46 | |||||||||||
Heavy fuel oil | 14 | 13 | 15 | 12 | |||||||||||
Asphalt | 84 | 51 | 68 | 47 | |||||||||||
Total | 1,246 | 739 | 1,190 | 741 | |||||||||||
West Coast | |||||||||||||||
(per barrel) | |||||||||||||||
Refining & Marketing margin(a) | $ | 15.85 | $ | N/A | $ | 14.85 | $ | N/A | |||||||
Refining operating costs(b) | $ | 7.74 | $ | — | $ | 7.98 | $ | — | |||||||
Refining planned turnaround costs | $ | 0.02 | $ | — | $ | 1.45 | $ | — | |||||||
Refining depreciation and amortization(c) | $ | 1.08 | $ | — | $ | 1.06 | $ | — | |||||||
Refinery throughputs (mbpd):(d) | |||||||||||||||
Crude oil refined | 657 | — | 642 | — | |||||||||||
Other charge and blendstocks | 52 | — | 64 | — | |||||||||||
Total | 709 | — | 706 | — | |||||||||||
Sour crude oil throughput (percent) | 59 | — | 63 | — | |||||||||||
Sweet crude oil throughput (percent) | 41 | — | 37 | — | |||||||||||
Refined product yields (mbpd):(d) | |||||||||||||||
Gasoline | 366 | — | 355 | — | |||||||||||
Distillates | 259 | — | 248 | — | |||||||||||
Propane | 10 | — | 9 | — | |||||||||||
Feedstocks and special products | 60 | — | 76 | — | |||||||||||
Heavy fuel oil | 23 | — | 24 | — | |||||||||||
Asphalt | 2 | — | 1 | — | |||||||||||
Total | 720 | — | 713 | — | |||||||||||
(a) Sales revenue less cost of refinery inputs and purchased products, divided by refinery throughputs, excluding | |||||||||||||||
(b) Includes refining major maintenance and operating costs. Excludes planned turnaround and depreciation and | |||||||||||||||
(c) Purchase accounting measurement period adjustments related to prior periods are not allocated to regional | |||||||||||||||
(d) Includes inter-refinery transfer volumes. |
Retail Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Speedway fuel sales (millions of gallons) | 1,992 | 1,474 | 5,820 | 4,317 | |||||||||||
Direct dealer fuel sales (millions of gallons) | 653 | N/A | 1,929 | N/A | |||||||||||
Retail fuel margin (dollars per gallon)(a) | $ | 0.2453 | $ | 0.1651 | $ | 0.2286 | $ | 0.1620 | |||||||
Merchandise sales (in millions) | $ | 1,703 | $ | 1,339 | $ | 4,736 | $ | 3,753 | |||||||
Merchandise margin (in millions) | $ | 498 | $ | 384 | $ | 1,376 | $ | 1,069 | |||||||
Merchandise margin percent | 29.2% | 28.7% | 29.1% | 28.5% | |||||||||||
Same store gasoline sales volume (period over period)(b) | (2.8)% | (1.2)% | (2.8)% | (1.8)% | |||||||||||
Same store merchandise sales (period over period)(b)(c) | 5.2% | 4.9% | 5.6% | 3.4% | |||||||||||
Total convenience stores at period-end | 3,931 | 2,745 | |||||||||||||
Direct dealer locations at period-end | 1,067 | N/A | |||||||||||||
(a) Includes bankcard processing fees (as applicable). | |||||||||||||||
(b) Same store comparison includes only locations owned at least 13 months. | |||||||||||||||
(c) Excludes cigarettes. |
Midstream Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Pipeline throughputs (mbpd)(a) | 5,319 | 3,829 | 5,250 | 3,694 | |||||||||||
Terminal throughput (mbpd) | 3,292 | 1,474 | 3,267 | 1,468 | |||||||||||
Gathering system throughput (million cubic feet per day)(b) | 6,281 | 4,737 | 6,061 | 4,403 | |||||||||||
Natural gas processed (million cubic feet per day)(b) | 8,804 | 7,171 | 8,629 | 6,874 | |||||||||||
C2 (ethane) + NGLs fractionated (mbpd)(b) | 547 | 488 | 527 | 451 | |||||||||||
(a) Includes common-carrier pipelines and private pipelines contributed to MPLX. Excludes equity method affiliate | |||||||||||||||
(b) Includes amounts related to unconsolidated equity method investments on a 100% basis. |
Select Financial Data (Unaudited) | |||||||
(In millions) | September 30 | June 30 | |||||
Cash and cash equivalents | $ | 1,525 | $ | 1,247 | |||
MPC debt | 9,139 | 9,142 | |||||
MPLX debt | 19,700 | 14,036 | |||||
ANDX debt | — | 5,229 | |||||
Total consolidated debt | 28,839 | 28,407 | |||||
Redeemable noncontrolling interest | 968 | 1,005 | |||||
Equity | 42,656 | 43,061 | |||||
Shares outstanding | 650 | 660 | |||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cash provided by operations | $ | 2,787 | $ | 1,182 | $ | 7,032 | $ | 3,431 | |||||||
Dividends paid per share | $ | 0.53 | $ | 0.46 | $ | 1.59 | $ | 1.38 | |||||||
Non-GAAP Financial Measures
Management uses certain financial measures to evaluate our operating performance that are calculated and presented on the basis of methodologies other than in accordance with GAAP. We believe these non-GAAP financial measures are useful to investors and analysts to assess our ongoing financial performance because, when reconciled to their most comparable GAAP financial measures, they provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies. The non-GAAP financial measures we use are as follows:
Adjusted Net Income Attributable to MPC
Adjusted net income attributable to MPC is defined as net income attributable to MPC excluding the items in the table below, along with their related income tax effect. We have excluded these items because we believe that they are not indicative of our core operating performance and that their exclusion results in an important measure of our ongoing financial performance to better assess our underlying business results and trends.
Adjusted Diluted Earnings Per Share
Adjusted diluted earnings per share is defined as adjusted net income attributable to MPC divided by the number of weighted-average shares outstanding in the applicable period, assuming dilution.
Reconciliation of Net Income Attributable to MPC to Adjusted Net Income Attributable to MPC | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income attributable to MPC | $ | 1,095 | $ | 737 | $ | 2,194 | $ | 1,829 | |||||||
Pre-tax adjustments: | |||||||||||||||
Capline restructuring gain | — | — | (207) | — | |||||||||||
Transaction-related costs | 22 | 4 | 147 | 14 | |||||||||||
Litigation | — | — | 22 | — | |||||||||||
Impairments | — | — | — | (1) | |||||||||||
Pension settlement | — | 45 | — | 45 | |||||||||||
Purchase accounting - depreciation and amortization(a) | (57) | — | (17) | — | |||||||||||
Out of period tax adjustment | — | — | 36 | — | |||||||||||
Tax impact of adjustments(b) | 7 | (12) | 13 | (14) | |||||||||||
NCI impact of adjustments | 6 | — | 2 | — | |||||||||||
Adjusted net income attributable to MPC | $ | 1,073 | $ | 774 | $ | 2,190 | $ | 1,873 | |||||||
Diluted earnings per share | $ | 1.66 | $ | 1.62 | $ | 3.28 | $ | 3.92 | |||||||
Adjusted diluted earnings per share(c) | $ | 1.63 | $ | 1.70 | $ | 3.27 | $ | 4.02 | |||||||
(a) Reflects the cumulative effects related to a measurement period adjustment arising from the finalization of | |||||||||||||||
(b) We generally tax effect taxable adjustments to reported earnings using a combined federal and state statutory | |||||||||||||||
(c) Weighted-average diluted shares outstanding and income allocated to participating securities, if applicable, in the |
Adjusted EBITDA & Segment Adjusted EBITDA
Adjusted EBITDA and Segment Adjusted EBITDA represent earnings before net interest and other financial costs, income taxes, depreciation and amortization expense as well as adjustments to exclude refining turnaround costs and items not allocated to segment results. We believe these non-GAAP financial measures are useful to investors and analysts to analyze and compare our operating performance between periods by excluding items that do not reflect the core operating results of our business or in the case of turnarounds, which provide benefits over multiple years. We also believe that excluding turnaround costs from this metric is useful for comparability to other companies as certain of our competitors defer these costs and amortize them between turnarounds. Adjusted EBITDA and Segment Adjusted EBITDA should not be considered as a substitute for, or superior to segment income (loss) from operations, net income attributable to MPC, income before income taxes, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA and Segment Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
Reconciliation of Net Income Attributable to MPC to Adjusted EBITDA | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income attributable to MPC | $ | 1,095 | $ | 737 | $ | 2,194 | $ | 1,829 | |||||||
Plus (Less): | |||||||||||||||
Net interest and other financial costs | 317 | 240 | 945 | 618 | |||||||||||
Net income attributable to noncontrolling interests | 272 | 204 | 799 | 582 | |||||||||||
Provision for income taxes | 340 | 222 | 797 | 525 | |||||||||||
Depreciation and amortization | 855 | 555 | 2,660 | 1,616 | |||||||||||
Refining planned turnaround costs | 164 | 197 | 587 | 432 | |||||||||||
Capline restructuring gain | — | — | (207) | — | |||||||||||
Transaction-related costs | 22 | 4 | 147 | 14 | |||||||||||
Litigation | — | — | 22 | — | |||||||||||
Impairments | — | — | — | (1) | |||||||||||
Adjusted EBITDA | $ | 3,065 | $ | 2,159 | $ | 7,944 | $ | 5,615 |
Reconciliation of Segment Income From Operations to Segment Adjusted EBITDA and Adjusted EBITDA | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Refining & Marketing Segment | |||||||||||||||
Segment income from operations | $ | 883 | $ | 666 | $ | 1,455 | $ | 1,558 | |||||||
Add: Depreciation and amortization | 397 | 257 | 1,235 | 761 | |||||||||||
Refining planned turnaround costs | 164 | 197 | 587 | 432 | |||||||||||
Segment Adjusted EBITDA | $ | 1,444 | $ | 1,120 | $ | 3,277 | $ | 2,751 | |||||||
Retail Segment | |||||||||||||||
Segment income from operations | $ | 442 | $ | 161 | $ | 1,105 | $ | 415 | |||||||
Add: Depreciation and amortization | 113 | 76 | 369 | 228 | |||||||||||
Segment EBITDA | $ | 555 | $ | 237 | $ | 1,474 | $ | 643 | |||||||
Midstream Segment | |||||||||||||||
Segment income from operations | $ | 919 | $ | 679 | $ | 2,705 | $ | 1,863 | |||||||
Add: Depreciation and amortization | 300 | 205 | 925 | 577 | |||||||||||
Segment EBITDA | $ | 1,219 | $ | 884 | $ | 3,630 | $ | 2,440 | |||||||
Segment Adjusted EBITDA | $ | 3,218 | $ | 2,241 | $ | 8,381 | $ | 5,834 | |||||||
Corporate and other unallocated items | (198) | (99) | (568) | (269) | |||||||||||
Add: Depreciation and amortization | 45 | 17 | 131 | 50 | |||||||||||
Adjusted EBITDA | $ | 3,065 | $ | 2,159 | $ | 7,944 | $ | 5,615 |
Refining & Marketing Margin
Refining margin is defined as sales revenue less the cost of refinery inputs and purchased products and excludes any LCM inventory market adjustment.
Reconciliation of Refining & Marketing Income from Operations to Refining & Marketing Margin | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Refining & Marketing income from operations | $ | 883 | $ | 666 | $ | 1,455 | $ | 1,558 | |||||||
Plus (Less): | |||||||||||||||
Refining operating costs(a) | 1,577 | 795 | 4,656 | 2,480 | |||||||||||
Refining depreciation and amortization | 328 | 241 | 1,083 | 712 | |||||||||||
Refining planned turnaround costs | 164 | 197 | 587 | 432 | |||||||||||
Distribution costs(b) | 1,251 | 780 | 3,818 | 2,183 | |||||||||||
Distribution depreciation and amortization | 69 | 16 | 152 | 49 | |||||||||||
Income from equity method investments | (6) | (7) | (10) | (14) | |||||||||||
Net gain on disposal of assets | — | (1) | (6) | (5) | |||||||||||
Other income | (8) | (24) | (30) | (63) | |||||||||||
Refining & Marketing margin | $ | 4,258 | $ | 2,663 | $ | 11,705 | $ | 7,332 | |||||||
Refining & Marketing margin by region: | |||||||||||||||
Gulf Coast | $ | 1,285 | $ | N/A | $ | 3,292 | $ | N/A | |||||||
Mid-Continent | 1,977 | N/A | 5,687 | N/A | |||||||||||
West Coast | 996 | N/A | 2,726 | N/A | |||||||||||
Refining & Marketing margin | $ | 4,258 | $ | N/A | $ | 11,705 | $ | N/A | |||||||
(a) Includes refining major maintenance and operating costs. Excludes planned turnaround and depreciation and amortization expense. | |||||||||||||||
(b) Includes fees paid to MPLX of $794 million, $601 million, $2,378 million and $1,675 million, respectively. Excludes depreciation and amortization expense. |
Retail Fuel Margin
Retail fuel margin is defined as the price paid by consumers or direct dealers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees (where applicable) and excluding any LCM inventory market adjustment.
Retail Merchandise Margin
Retail merchandise margin is defined as the price paid by consumers less the cost of merchandise.
Reconciliation of Retail Income from Operations to Retail Total Margin | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Retail income from operations | $ | 442 | $ | 161 | $ | 1,105 | $ | 415 | |||||||
Plus (Less): | |||||||||||||||
Operating, selling, general and administrative expenses | 644 | 418 | 1,824 | 1,203 | |||||||||||
Depreciation and amortization | 113 | 76 | 369 | 228 | |||||||||||
Income from equity method investments | (20) | (18) | (58) | (51) | |||||||||||
Net gain on disposal of assets | (2) | (1) | (4) | (1) | |||||||||||
Other income | (3) | (2) | (9) | (5) | |||||||||||
Retail total margin | $ | 1,174 | $ | 634 | $ | 3,227 | $ | 1,789 | |||||||
Retail total margin: | |||||||||||||||
Fuel margin | $ | 649 | $ | 243 | $ | 1,772 | $ | 699 | |||||||
Merchandise margin | 498 | 384 | 1,376 | 1,069 | |||||||||||
Other margin | 27 | 7 | 79 | 21 | |||||||||||
Retail total margin | $ | 1,174 | $ | 634 | $ | 3,227 | $ | 1,789 |
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-third-quarter-results-300948965.html
SOURCE Marathon Petroleum Corporation
FINDLAY, Ohio, Oct. 25, 2019 /PRNewswire/ -- The board of directors of the general partner of MPLX LP (NYSE: MPLX) has declared a quarterly cash distribution of $0.6775 per common unit for the third quarter of 2019, or $2.71 on an annualized basis.
This represents an increase of $0.01 per unit, or 1.5 percent, over the second quarter 2019 distribution, and an increase of $0.04 per unit, or 6.3 percent, over the third quarter 2018 distribution. This is the 27th consecutive quarterly distribution increase and will be paid on Nov. 14, 2019, to common unitholders of record as of Nov. 4, 2019.
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100 percent of MPLX's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MPLX's distributions to non-United States investors are subject to federal income tax withholding at the highest applicable effective tax rate.
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, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/mplx-lp-increases-quarterly-distribution-300945537.html
SOURCE MPLX LP
FINDLAY, Ohio, Sept. 20, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) today announced the final results of the previously announced offers to exchange (the "Exchange Offers") any and all outstanding senior notes of the series set forth in the table below (the "Existing ANDX Notes") issued by Andeavor Logistics LP ("ANDX") and Tesoro Logistics Finance Corp. ("Finance Corp."), each of which are wholly owned subsidiaries of MPLX, for (1) up to $3,250,000,000 aggregate principal amount of new senior notes issued by MPLX (the "New MPLX Notes") and (2) cash, and related consent solicitations (the "Consent Solicitations") to adopt certain amendments to each of the indentures governing the Existing ANDX Notes.
The Exchange Offers and Consent Solicitations expired at 12:00 midnight, New York City time, at the end of the day on Sept. 19, 2019 (the "Expiration Date"). As of the Expiration Date, the following principal amounts of each series of Existing ANDX Notes were validly tendered and not validly withdrawn (and consents thereby validly given and not validly revoked):
Title of Series/CUSIP Number of Existing ANDX Notes | Aggregate Principal Amount Outstanding | Existing ANDX Notes Tendered at Expiration Date(1) | |
Principal Amount | Percentage | ||
6.250% Senior Notes due 2022 / U88109AE0; 88160QAH6; 88160QAL7 | $300,000,000 | $266,389,000 | 88.80% |
3.500% Senior Notes due 2022 / 03350WAA7 | $500,000,000 | $486,366,000 | 97.27% |
6.375% Senior Notes due 2024 / 88160QAM5 | $450,000,000 | $380,523,000 | 84.56% |
5.250% Senior Notes due 2025 / 88160QAN3 | $750,000,000 | $707,663,000 | 94.36% |
4.250% Senior Notes due 2027 / 03350WAC3 | $750,000,000 | $731,726,000 | 97.56% |
5.200% Senior Notes due 2047 / 03350WAB5 | $500,000,000 | $487,211,000 | 97.44% |
(1) Reflects the aggregate principal amount of each series of Existing ANDX Notes that were validly tendered and not validly withdrawn as of the Expiration Date, based on information provided by the exchange agent to MPLX.
The Exchange Offers and Consent Solicitations were made pursuant to the terms and subject to the conditions set forth in the offering memorandum and consent solicitation statement, dated Aug. 22, 2019 (the "Offering Memorandum and Consent Solicitation Statement").
Upon settlement of the Exchange Offers and Consent Solicitations, which is expected to occur on Monday, Sept. 23, 2019, MPLX will (i) issue to the holders of the Existing ANDX Notes whose securities were tendered on or before 5:00 p.m., New York City Time, on Sept. 5, 2019 (the "Early Tender Date"), and accepted for exchange, New MPLX Notes in an equal aggregate principal amount to the principal amount of the Existing ANDX Notes that have been accepted for exchange, (ii) issue to the holders of the Existing ANDX Notes whose securities were tendered after the Early Tender Date but prior to the Expiration Date and accepted for exchange, New MPLX Notes in an aggregate principal amount equal to $970 for each $1,000 aggregate principal amount of Existing ANDX Notes that have been accepted for exchange, and (iii) pay to the holders of the Existing ANDX Notes whose securities have been accepted for exchange a total of $3,059,878 in cash as part of the exchange consideration.
In addition, as previously disclosed, ANDX and Finance Corp. received consents in the Consent Solicitations sufficient to approve amendments to each of the respective indentures governing each series of the Existing ANDX Notes. As a result, ANDX, Finance Corp. and the trustee for the Existing ANDX Notes entered into supplemental indentures implementing those amendments to the indentures governing each series of the Existing ANDX Notes subject to the Exchange Offers and Consent Solicitations. Such supplemental indentures were valid and enforceable upon execution but will only become operative upon the settlement of the Exchange Offers and Consent Solicitations. As a result, the proposed amendments effected by such supplemental indentures will be deemed to be revoked retroactively to the date thereof if the Exchange Offers and Consent Solicitations are terminated or withdrawn prior to settlement.
The New MPLX Notes will only be issued to eligible holders of Existing ANDX Notes who have completed and returned an eligibility form confirming that they are either (i) a "Qualified Institutional Buyer" as that term is defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") or (ii) a person that is outside the "United States" and is (a) not a "U.S. person," as those terms are defined in Rule 902 under the Securities Act, (b) not an "EEA Retail Investor" (as defined in the Offering Memorandum and Consent Solicitation Statement) and (c) not located in Canada. The complete terms and conditions of the Exchange Offers and Consent Solicitations are described in the Offering Memorandum and Consent Solicitation Statement.
This communication does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, any security. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful. The Exchange Offers and Consent Solicitations were made solely pursuant to the Offering Memorandum and Consent Solicitation Statement and only to such persons and in such jurisdictions as was permitted under applicable law.
The New MPLX Notes have not been and will not be registered under the Securities Act or any state securities laws. Therefore, the New MPLX Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws.
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, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
Forward-looking statements
This communication contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP ("MPLX"), Andeavor Logistics LP ("ANDX") and Tesoro Logistics Finance Corp. ("Finance Corp."). All statements other than statements of historical facts included in this communication are forward-looking statements. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, 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 "believe," "estimate," "expect," "plan," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the companies' control and are difficult to predict. Factors that could cause actual results to differ materially from those implied in this communication include: the satisfaction of the conditions to the settlement of the offers to exchange (collectively, the "Exchange Offers") any and all outstanding notes of the series set forth in this communication issued by ANDX and Finance Corp., as described in this communication; the anticipated effects of participating in the Exchange Offers; the availability of alternative transactions; the ability of MPLX to successfully refinance its and ANDX's outstanding debt; general financial or market conditions; and those factors discussed in the offering memorandum and consent solicitation statement dated August 22, 2019. For a description of additional risks and uncertainties that may adversely affect MPLX's and ANDX's business and future operational and financial results, refer also to the risk 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 Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, each filed with the Securities and Exchange Commission ("SEC"); and the factors set forth under the heading "Risk Factors" in ANDX's Annual Report on Form 10-K for the year ended Dec. 31, 2018, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, each filed with the SEC. Unpredictable or unknown factors not discussed here, in MPLX's Form 10-K and Form 10-Qs or in ANDX's Form 10-K and Form 10-Qs could also have material adverse effects on forward-looking statements. Copies of MPLX's Form 10-K and Form 10-Qs are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of ANDX's Form 10-K and Form 10-Qs are available on the SEC website, ANDX's website at http://ir.andeavorlogistics.com or by contacting ANDX's Investor Relations office.
We have based our forward-looking statements on our current expectations, estimates and projections about our 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 the respective management of MPLX, ANDX and Finance Corp. each consider 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, actual results may differ materially from the future performance expressed or forecast in such forward-looking statements. We undertake no obligation to update any forward-looking statements except to the extent required by applicable law.
View original content:http://www.prnewswire.com/news-releases/mplx-lp-announces-final-results-of-note-exchange-offers-and-consent-solicitations-300922335.html
SOURCE MPLX LP
FINDLAY, Ohio, Sept. 16, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call with analysts on Thursday, October 31, at 11 a.m. EDT to discuss 2019 third-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPLX's website at http://www.mplx.com and clicking on the "2019 Third-Quarter Financial Results" link. A replay of the webcast will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
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, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/mplx-lp-to-announce-2019-third-quarter-financial-results-october-31-300918529.html
SOURCE MPLX LP
FINDLAY, Ohio, Sept. 4, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) announced today that it has priced $2,000,000,000 in aggregate principal amount of unsecured senior notes in an underwritten public offering consisting of $1,000,000,000 aggregate principal amount of floating rate senior notes due 2021 (the "2021 senior notes") and $1,000,000,000 aggregate principal amount of floating rate senior notes due 2022 (the "2022 senior notes").
The 2021 senior notes were offered at a price to the public of 100% of par and will bear interest at a floating rate equal to the three-month LIBOR plus 0.900% per annum, reset quarterly. The 2022 senior notes were offered at a price to the public of 100% of par and will bear interest at a floating rate equal to the three-month LIBOR plus 1.100% per annum, reset quarterly.
MPLX intends to use a portion of the net proceeds from this offering to repay, redeem or otherwise retire the Andeavor Logistics LP 5.500% senior notes due 2019. Pending that final use, MPLX intends to use the net proceeds from this offering to repay borrowings under its revolving credit facility and its amended and restated intercompany loan agreement with Marathon Petroleum Corporation and/or for general partnership purposes, which may include, from time to time, acquisitions, capital expenditures and the payment of distributions.
The closing of the senior notes offering is expected to occur on Sept. 9, 2019, subject to satisfaction of customary closing conditions.
Citigroup Global Markets Inc.; Barclays Capital Inc.; and RBC Capital Markets, LLC are acting as joint book-running managers for the offering.
This offering is being made only by means of a prospectus and related prospectus supplement, which may be obtained for free by visiting the Securities and Exchange Commission's website at http://www.sec.gov. Alternatively, copies may be obtained by contacting the following, who are acting as representatives of the underwriters:
Citigroup Global Markets Inc.
388 Greenwich Street
New York, NY 10013
Toll-Free: (800) 831-9146
Barclays Capital Inc.
745 Seventh Avenue
New York, NY 10019
Toll-Free: (888) 603-5847
RBC Capital Markets, LLC
200 Vesey Street
New York, NY 10281
Toll-Free: (866) 375-6829
This news release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
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.
Investor Relations Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Hamish Banks (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/mplx-lp-prices-2-0-billion-senior-notes-offering-300912044.html
SOURCE MPLX LP
DALLAS, Aug. 23, 2019 /PRNewswire/ -- Cushing® Asset Management, LP, and Swank Capital, LLC, announce today the upcoming rebalancing of The Cushing® Energy Supply Chain Index (the "Index") as part of normal index operations. After the markets close on August 30, 2019, the constituents of the Index will be rebalanced, and the following changes will become effective on September 3, 2019:
Constituents added:
NGL Energy Partners LP (NYSE: NGL)
Western Midstream Partners, LP (NYSE: WES)
Noble Midstream Partners LP (NYSE: NBLX)
MPLX LP (NYSE: MPLX)
BP Midstream Partners LP (NYSE: BPMP)
Amcor plc (NYSE: AMCR)
Corteva, Inc. (NYSE: CTVA)
Constituents removed:
Antero Midstream Corporation (NYSE: AM)
EQM Midstream Partners, LP (NYSE: EQM)
Energy Transfer LP (NYSE: ET)
NuStar Energy L.P. (NYSE: NS)
Shell Midstream Partners, L.P. (NYSE: SHLX)
Sealed Air Corporation (NYSE: SEE)
Newmont Goldcorp Corporation (NYSE: NEM)
ABOUT THE CUSHING® ENERGY SUPPLY CHAIN INDEX
The Cushing® Energy Supply Chain Index tracks the performance of widely held companies engaged in exploration and production, refining and marketing, or storage and transportation of oil, natural gas, coal and consumable fuels; oil and natural gas equipment and services companies; and companies that extract and/or manufacture materials. Constituents of the Index are weighted based on current yield. The Index price level is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "CSCI".
ABOUT CUSHING® ASSET MANAGEMENT AND SWANK CAPITAL
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts, providing active management in markets where inefficiencies exist.
Cushing is also dedicated to serving the needs of investors by sponsoring a variety of benchmarks, including The Cushing® 30 MLP Index (Bloomberg Ticker: MLPX), The Cushing® 30 MLP Market Cap Index (Bloomberg Ticker: CMCI), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY), The Cushing® Energy Index (Bloomberg Ticker: CENI), The Cushing® Transportation Index (Bloomberg Ticker: CTRI) and The Cushing® Utility Index (Bloomberg Ticker: CUTI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Brian Atwood
214-692-6334
www.cushingasset.com
The Cushing® Energy Supply Chain Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
CUSH-CSCI
View original content:http://www.prnewswire.com/news-releases/cushing-asset-management-and-swank-capital-announce-rebalancing-of-the-cushing-energy-supply-chain-index-corrected-300906463.html
SOURCE Cushing Asset Management, LP, and Swank Capital, LLC
DALLAS, Aug. 23, 2019 /PRNewswire/ -- Cushing® Asset Management, LP, and Swank Capital, LLC, announce today the upcoming rebalancing of The Cushing® Energy Index (the "Index") as part of normal index operations. After the markets close on August 30, 2019, the constituents of the Index will be rebalanced, and the following changes will become effective on September 3, 2019:
Constituents added:
NGL Energy Partners LP (NYSE: NGL)
Western Midstream Partners, LP (NYSE: WES)
Noble Midstream Partners LP (NYSE: NBLX)
MPLX LP (NYSE: MPLX)
BP Midstream Partners LP (NYSE: BPMP)
Pioneer Natural Resources Company (NYSE: PXD)
Constituents removed:
Antero Midstream Corporation (NYSE: AM)
EQM Midstream Partners, LP (NYSE: EQM)
Energy Transfer LP (NYSE: ET)
NuStar Energy L.P. (NYSE: NS)
Shell Midstream Partners, L.P. (NYSE: SHLX)
ABOUT THE CUSHING® ENERGY INDEX
The Cushing® Energy Index tracks the performance of widely held companies engaged in exploration and production, refining and marketing, and storage and transportation of oil, natural gas, coal and consumable fuels, as well as oil and natural gas equipment and services companies. Constituents of the Index are weighted based on current yield. The Index price level is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "CENI".
ABOUT CUSHING® ASSET MANAGEMENT AND SWANK CAPITAL
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts, providing active management in markets where inefficiencies exist.
Cushing is also dedicated to serving the needs of investors by sponsoring a variety of benchmarks, including The Cushing® 30 MLP Index (Bloomberg Ticker: MLPX), The Cushing® 30 MLP Market Cap Index (Bloomberg Ticker: CMCI), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY), The Cushing® Energy Supply Chain Index (Bloomberg Ticker: CSCI), The Cushing® Transportation Index (Bloomberg Ticker: CTRI) and The Cushing® Utility Index (Bloomberg Ticker: CUTI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Brian Atwood
214-692-6334
www.cushingasset.com
The Cushing® Energy Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
CUSH-CENI
View original content:http://www.prnewswire.com/news-releases/cushing-asset-management-and-swank-capital-announce-rebalancing-of-the-cushing-energy-index-300906136.html
SOURCE Cushing Asset Management, LP; Swank Capital, LLC
FINDLAY, Ohio, Aug. 22, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) today announced that it has commenced offers to exchange (each an "Exchange Offer" and collectively, the "Exchange Offers") any and all outstanding notes of the series set forth in the table below issued by Andeavor Logistics LP ("ANDX") and Tesoro Logistics Finance Corp. ("Finance Corp."), each of which are wholly owned subsidiaries of MPLX (the "Existing ANDX Notes") for (1) up to $3,250,000,000 aggregate principal amount of new notes issued by MPLX (the "New MPLX Notes") and (2) cash.
The following table sets forth the Exchange Consideration, Early Tender Premium and Total Exchange Consideration for each series of Existing ANDX Notes:
Title of | Maturity Date | Aggregate | Exchange | Early Tender | Total Exchange |
6.250% Senior Notes due 2022 / | October 15, 2022 | $300,000,000 | $970 principal amount of New MPLX 6.250% Notes due 2022 and $1.00 in cash | $30 principal amount of New MPLX 6.250% Notes due 2022 | $1,000 principal amount of New MPLX 6.250% Notes due 2022 and $1.00 in cash |
3.500% Senior Notes due 2022 / (CUSIP: 03350WAA7) | December 1, 2022 | $500,000,000 | $970 principal amount of New MPLX 3.500% Notes due 2022 and $1.00 in cash | $30 principal amount of New MPLX 3.500% Notes due 2022 | $1,000 principal amount of New MPLX 3.500% Notes due 2022 and $1.00 in cash |
6.375% Senior Notes due 2024 / (CUSIP: 88160QAM5) | May 1, 2024 | $450,000,000 | $970 principal amount of New MPLX 6.375% Notes due 2024 and $1.00 in cash | $30 principal amount of New MPLX 6.375% Notes due 2024 | $1,000 principal amount of New MPLX 6.375% Notes due 2024 and $1.00 in cash |
5.250% Senior Notes due 2025 / (CUSIP: 88160QAN3) | January 15, 2025 | $750,000,000 | $970 principal amount of New MPLX 5.250% Notes due 2025 and $1.00 in cash | $30 principal amount of New MPLX 5.250% Notes due 2025 | $1,000 principal amount of New MPLX 5.250% Notes due 2025 and $1.00 in cash |
4.250% Senior Notes due 2027 / (CUSIP: 03350WAC3) | December 1, 2027 | $750,000,000 | $970 principal amount of New MPLX 4.250% Notes due 2027 and $1.00 in cash | $30 principal amount of New MPLX 4.250% Notes due 2027 | $1,000 principal amount of New MPLX 4.250% Notes due 2027 and $1.00 in cash |
5.200% Senior Notes due 2047 / (CUSIP: 03350WAB5) | December 1, 2047 | $500,000,000 | $970 principal amount of New MPLX 5.200% Notes due 2047 and $1.00 in cash | $30 principal amount of New MPLX 5.200% Notes due 2047 | $1,000 principal amount of New MPLX 5.200% Notes due 2047 and $1.00 in cash |
(1) For each $1,000 principal amount of Existing ANDX Notes. |
(2) Includes Early Tender Premium. |
In conjunction with the Exchange Offers, ANDX and Finance Corp. are soliciting consents (each, a "Consent Solicitation" and, collectively, the "Consent Solicitations") to adopt certain proposed amendments to each of the indentures governing the Existing ANDX Notes to, among other things, eliminate certain covenants, restrictive provisions, events of default and the requirement for subsidiaries to make guarantees in the future from such indentures. Each Exchange Offer and Consent Solicitation is conditioned upon the completion of the other Exchange Offers and Consent Solicitations, although MPLX may waive such condition at any time with respect to an Exchange Offer. Any waiver of a condition by MPLX with respect to an Exchange Offer will automatically waive such condition with respect to the corresponding Consent Solicitation, as applicable.
The Exchange Offers and Consent Solicitations are being made pursuant to the terms and subject to the conditions set forth in the offering memorandum and consent solicitation statement dated August 22, 2019 (the "Offering Memorandum and Consent Solicitation Statement").
The consummation of the Exchange Offers is subject to, and conditional upon, the satisfaction or, where permitted, waiver of certain conditions discussed in the Offering Memorandum and Consent Solicitation Statement.
ANDX also has outstanding $500,000,000 aggregate principal amount of 5.500% notes that mature in October 2019. In the near term, MPLX currently intends to issue or raise new indebtedness, the proceeds of which would be used to repay these notes at maturity as well as to repay a material portion of the indebtedness currently outstanding under its revolving credit facility and/or the intercompany loan with Marathon Petroleum Corporation and for general partnership purposes.
Holders who validly tender their Existing ANDX Notes at or prior to 5:00 p.m., New York City time, on September 5, 2019, unless extended (the "Early Tender Date"), will be eligible to receive the applicable Total Exchange Consideration as set forth in the table above, which includes the applicable Early Tender Premium as set forth in the table, for all such Existing ANDX Notes that are accepted. For each $1,000 principal amount of Existing ANDX Notes validly tendered after the Early Tender Date but prior to 12:00 midnight, New York City time, at the end of the day on September 19, 2019, unless extended (the "Expiration Date"), holders of Existing ANDX Notes will not be eligible to receive the applicable Early Tender Premium and, accordingly, will only be eligible to receive the applicable Exchange Consideration as set forth in the table above on the settlement date. The settlement date is expected to occur within two business days after the Expiration Date.
Documents relating to the Exchange Offers and Consent Solicitations will only be distributed to eligible holders of Existing ANDX Notes who complete and return an eligibility form confirming that they are either (a) a "Qualified Institutional Buyer" as that term is defined in Rule 144A under the Securities Act of 1933 or (b) a person that is outside the "United States" and is (i) not a "U.S. person," as those terms are defined in Rule 902 under the Securities Act of 1933, (ii) not an "EEA Retail Investor" (as defined in the Offering Memorandum and Consent Solicitation Statement) and (iii) not located in Canada. The complete terms and conditions of the Exchange Offers and Consent Solicitations are described in the Offering Memorandum and Consent Solicitation Statement, a copy of which may be obtained by contacting Global Bondholder Services Corporation, the exchange agent and information agent in connection with the Exchange Offers and Consent Solicitations, at (866) 924-2200 (U.S. toll-free) or (212) 430-3774 (banks and brokers). The eligibility form is available electronically at: https://gbsc-usa.com/eligibility/mplx.
This communication does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, any security. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful. The Exchange Offers and Consent Solicitations are being made solely pursuant to the Offering Memorandum and Consent Solicitation Statement and only to such persons and in such jurisdictions as is permitted under applicable law.
The New MPLX Notes have not been and will not be registered under the Securities Act of 1933 or any state securities laws. Therefore, the New MPLX Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act of 1933 and any applicable state securities laws.
About MPLX
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:
Kristina Kazarian (419) 421-2071
Media Contacts:
Hamish Banks (419) 421-2521
This communication contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP ("MPLX"), Andeavor Logistics LP ("ANDX") and Tesoro Logistics Finance Corp. ("Finance Corp."). All statements other than statements of historical facts included in this communication are forward-looking statements. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, 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 "believe," "estimate," "expect," "plan," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the companies' control and are difficult to predict. Factors that could cause actual results to differ materially from those implied in this communication include: the participation by noteholders in the offers to exchange (collectively, the "Exchange Offers") any and all outstanding notes issued by ANDX and Finance Corp., as described in this communication; the satisfaction of the conditions to the Exchange Offers; the anticipated effects of participating in the Exchange Offers; the availability of alternative transactions; the ability of MPLX to successfully refinance its and ANDX's outstanding debt; general financial or market conditions; and those factors discussed in the offering memorandum and consent solicitation statement dated August 22, 2019. For a description of additional risks and uncertainties that may adversely affect MPLX's and ANDX's business and future operational and financial results, refer also to the risk 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 Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, each filed with the Securities and Exchange Commission (SEC); and the factors set forth under the heading "Risk Factors" in ANDX's Annual Report on Form 10-K for the year ended Dec. 31, 2018, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, each filed with the SEC. Unpredictable or unknown factors not discussed here, in MPLX's Form 10-K and Form 10-Qs or in ANDX's Form 10-K and Form 10-Qs could also have material adverse effects on forward-looking statements. Copies of MPLX's Form 10-K and Form 10-Qs are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of MPC's Form 10-K are available on the SEC website. Copies of ANDX's Form 10-K and Form 10-Qs are available on the SEC website, ANDX's website at http://ir.andeavorlogistics.com or by contacting ANDX's Investor Relations office.
We have based our forward-looking statements on our current expectations, estimates and projections about our 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 the respective management of MPLX, ANDX and Finance Corp. each consider 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, actual results may differ materially from the future performance expressed or forecast in such forward-looking statements. We undertake no obligation to update any forward-looking statements except to the extent required by applicable law.
View original content:http://www.prnewswire.com/news-releases/mplx-lp-commences-exchange-offers-and-andeavor-logistics-lp-and-tesoro-logistics-finance-corp-commence-consent-solicitations-300906169.html
SOURCE MPLX LP
DALLAS, Aug. 9, 2019 /PRNewswire/ -- Alerian reported, as of June 28, 2019, total products directly tied to and tracking the Alerian indices was $13.7 billion.
Exchange traded funds, exchange traded notes, return of capital notes, and variable insurance portfolios represent $12.7 billion of the total $13.7 billion. Below is a list of energy master limited partnership (MLP) positions, as of June 28, 2019, in the $12.7 billion of such assets tracking Alerian's indices.
Ticker | Exposure in Alerian Linked-Products ($) | Exposure in Alerian Linked-Products (Units) | Ticker | Exposure in Alerian Linked-Products ($) | Exposure in Alerian Linked-Products (Units) | |
AM | 2,402,831 | 209,671 | HESM | 7,694,422 | 394,586 | |
AMID | 4,919,211 | 951,492 | MMLP | 5,598,671 | 784,128 | |
ANDX | 403,075,523 | 11,094,840 | MMP | 1,276,581,260 | 19,946,582 | |
BPL | 782,332,474 | 19,058,038 | MPLX | 1,273,711,451 | 39,568,545 | |
BPMP | 18,205,543 | 1,176,069 | NBLX | 89,522,800 | 2,691,606 | |
CEQP | 220,495,699 | 6,164,263 | NGL | 214,053,630 | 14,492,460 | |
CNXM | 14,513,491 | 1,032,989 | NS | 331,580,260 | 12,217,401 | |
CQP | 214,074,794 | 5,075,268 | OMP | 5,663,726 | 263,429 | |
DCP | 329,731,673 | 11,253,641 | PAA | 1,305,749,277 | 53,624,200 | |
DKL | 6,791,101 | 212,222 | PAGP | 7,638,294 | 305,899 | |
ENBL | 153,164,680 | 11,171,749 | PBFX | 16,284,545 | 770,319 | |
ENLC | 327,210,823 | 32,429,219 | PSXP | 342,743,828 | 6,945,164 | |
EPD | 1,277,755,891 | 44,258,950 | SHLX | 319,209,192 | 15,405,849 | |
EQM | 462,044,829 | 10,341,200 | SMLP | 7,589,588 | 1,020,106 | |
ET | 1,262,122,882 | 89,639,409 | TCP | 253,540,259 | 6,739,507 | |
GEL | 298,090,775 | 13,611,451 | TGE | 419,509,147 | 19,872,532 | |
GPP | 3,882,098 | 277,293 | USDP | 3,861,679 | 342,044 | |
HEP | 156,422,759 | 5,688,100 | WES | 773,416,245 | 25,135,400 |
About Alerian
Alerian equips investors to make informed decisions about energy infrastructure and Master Limited Partnerships (MLPs). Its benchmarks are widely used by industry executives, investment professionals, research analysts, and national media to analyze relative performance. As of June 28, 2019, nearly $14 billion of products, including exchange traded funds and notes, are directly tied to and tracking the Alerian Index Series. Visit alerian.com to learn more.
View original content:http://www.prnewswire.com/news-releases/alerian-reports-june-30-2019-index-linked-product-positions-300899499.html
SOURCE Alerian
FINDLAY, Ohio, Aug. 1, 2019 /PRNewswire/ --
Andeavor Logistics LP today reported second-quarter 2019 net earnings of $160 million, compared with $132 million for the second quarter of 2018. Earnings before interest, taxes, depreciation and amortization (EBITDA) was $327 million, compared with $285 million in second-quarter 2018. Results in the second-quarter 2019 were reduced by a non-cash, out of period adjustment to reduce revenue recognized by $14 million for a crude oil gathering contract.
"This quarter included many milestones for Andeavor Logistics," said Gary R. Heminger, chairman and chief executive officer. "Business performance was strong, with crude oil volumes across our system in the Permian continuing to exceed expectations. The Conan Crude Oil Gathering System has now reached 200,000 barrels per day and progresses our strategy of building an integrated crude oil logistics system in the Permian."
Heminger continued, "With MPLX's acquisition of ANDX, we now have a single midstream entity, which has the ability to high-grade commercial activities across our integrated crude oil and natural gas logistics systems." In connection with the merger, Andeavor Logistics' common units are no longer publicly traded. Andeavor Logistics plans to file a Quarterly Report on Form 10-Q with the SEC prior to the filing deadline.
Second-Quarter Results
Three Months Ended | Six Months Ended | ||||||||||||||
($ in millions) | 2019 | 2018 (a) | 2019 | 2018 (a) | |||||||||||
Net Earnings | $ | 160 | $ | 132 | $ | 317 | $ | 263 | |||||||
Segment Operating Income | |||||||||||||||
Terminalling and Transportation | $ | 146 | $ | 107 | $ | 298 | $ | 211 | |||||||
Gathering and Processing | 59 | 69 | 122 | 146 | |||||||||||
Wholesale | 12 | 11 | 17 | 15 | |||||||||||
EBITDA (b) | $ | 327 | $ | 285 | $ | 646 | $ | 560 | |||||||
Segment EBITDA (b) | |||||||||||||||
Terminalling and Transportation | $ | 195 | $ | 151 | $ | 386 | $ | 294 | |||||||
Gathering and Processing | 128 | 128 | 257 | 261 | |||||||||||
Wholesale | 14 | 13 | 22 | 20 | |||||||||||
Net Cash From Operating Activities | $ | 264 | $ | 281 | $ | 483 | $ | 547 | |||||||
Distributable Cash Flow Attributable to Common | $ | 249 | $ | 214 | $ | 504 | $ | 413 |
(a) | Adjusted to include the historical results of the Predecessors. See "Items Impacting Comparability." |
(b) | For more information on EBITDA, Segment EBITDA, Distributable Cash Flow Attributable to Common Unitholders and Distribution Coverage Ratio, see "Non-GAAP Measures." |
About Andeavor Logistics LP
Andeavor Logistics LP is a fee-based, full-service, diversified midstream logistics company, with integrated assets across the western and mid-continent regions of the United States. Andeavor Logistics operates through three business segments: Terminalling and Transportation, Gathering and Processing and Wholesale. The Terminalling and Transportation segment consists of marine terminals, refined product truck terminals, rail terminals, dedicated storage facilities and transportation pipelines. The Gathering and Processing segment consists of crude oil gathering systems and pipelines as well as natural gas gathering pipelines, processing facilities and fractionation facilities. The Wholesale segment consists of a fee-based fuel wholesale business. Andeavor Logistics is a Delaware limited partnership owned entirely by MPLX LP (NYSE: MPLX) headquartered in Findlay, Ohio.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding Andeavor Logistics LP. These forward-looking statements relate to, among other things, the acquisition of Andeavor Logistics by MPLX LP (MPLX) and include expectations, estimates and projections concerning the business and operations, financial priorities and strategic plans of the combined entity. 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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. Andeavor Logistics has included in its Form 10-K for the year ended Dec. 31, 2018 and in its Forms 10-Q, 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.
We have based our forward-looking statements on our current expectations, estimates and projections about our 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 Andeavor Logistics' Form 10-K and Forms 10-Q are available on the SEC website, Andeavor Logistics' website at http://ir.andeavorlogistics.com or by contacting Andeavor Logistics' Investor Relations office.
Investor Relations Contact:
Kristina Kazarian (419) 421-2071
Media Contacts:
Hamish Banks (419) 421-2521
Jamal Kheiry (419) 421-3312
Non-GAAP Measures
As a supplement to our financial information presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), our management uses certain "non-GAAP" measures to analyze our results of operations, assess internal performance against budgeted and forecasted amounts and evaluate future impacts to our financial performance as a result of capital investments, acquisitions, divestitures and other strategic projects. These measures are important factors in assessing our operating results and profitability and include:
We present these measures because we believe they may help investors, analysts, lenders and ratings agencies analyze our results of operations and liquidity in conjunction with our U.S. GAAP results, including but not limited to:
Management also uses these measures to assess internal performance, and we believe they may provide meaningful supplemental information to the users of our financial statements. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings, operating income and net cash from operating activities. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. See "Reconciliation of Amounts Reported Under U.S. GAAP" and "Segment Reconciliation of Amounts Reported Under U.S. GAAP" for reconciliations between non-GAAP measures and their most directly comparable U.S. GAAP measures.
Items Impacting Comparability
Other than certain assets acquired from the 2018 Drop Down, our Predecessors did not record revenues with Andeavor and our Predecessors recorded general and administrative expenses and financed operations differently than the Partnership. On August 6, 2018, we completed the 2018 Drop Down for total consideration of $1.55 billion. As an entity under common control with Andeavor, who merged with and became a wholly-owned subsidiary of MPC effective October 1, 2018, we accounted for the transfers of businesses as if the transfer occurred at the beginning of the period, and prior periods are retrospectively adjusted to furnish comparative information. Accordingly, the accompanying results of operations have been retrospectively adjusted to include the historical results of the assets acquired prior to the effective date of the acquisition.
Andeavor Logistics LP | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 (a) | 2019 | 2018 (a) | ||||||||||||
Revenues | |||||||||||||||
Terminalling and Transportation | $ | 297 | $ | 250 | $ | 590 | $ | 482 | |||||||
Gathering and Processing | 284 | 301 | 605 | 600 | |||||||||||
Wholesale | 23 | 25 | 45 | 42 | |||||||||||
Intersegment revenues | (3) | (7) | (9) | (9) | |||||||||||
Total Revenues | 601 | 569 | 1,231 | 1,115 | |||||||||||
Costs and Expenses | |||||||||||||||
NGL expense (excluding items shown separately below) | 33 | 45 | 92 | 93 | |||||||||||
Operating expenses (excluding depreciation and amortization) | 237 | 221 | 476 | 422 | |||||||||||
Depreciation and amortization expenses | 104 | 93 | 205 | 182 | |||||||||||
General and administrative expenses | 18 | 29 | 38 | 60 | |||||||||||
Loss on asset disposals and impairments | 2 | 1 | 2 | 1 | |||||||||||
Operating Income | 207 | 180 | 418 | 357 | |||||||||||
Interest and financing costs, net | (63) | (60) | (124) | (115) | |||||||||||
Equity in earnings of equity method investments | 9 | 10 | 16 | 18 | |||||||||||
Other income, net | 7 | 2 | 7 | 3 | |||||||||||
Net Earnings | $ | 160 | $ | 132 | $ | 317 | $ | 263 | |||||||
Loss attributable to Predecessors | $ | — | $ | 16 | $ | — | $ | 24 | |||||||
Net Earnings Attributable to Partners | 160 | 148 | 317 | 287 | |||||||||||
Preferred unitholders' interest in net earnings | (10) | (10) | (20) | (24) | |||||||||||
Limited Partners' Interest in Net Earnings | $ | 150 | $ | 138 | $ | 297 | $ | 263 | |||||||
Net Earnings per Limited Partner Unit: | |||||||||||||||
Common - basic | $ | 0.65 | $ | 0.63 | $ | 1.29 | $ | 1.23 | |||||||
Common - diluted | $ | 0.65 | $ | 0.63 | $ | 1.29 | $ | 1.23 | |||||||
Weighted Average Limited Partner Units Outstanding: | |||||||||||||||
Common units - basic | 245.6 | 217.2 | 245.6 | 217.2 | |||||||||||
Common units - diluted | 245.7 | 217.3 | 245.7 | 217.3 |
Andeavor Logistics LP | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 (a) | 2019 | 2018 (a) | ||||||||||||
Cash Flows From (Used In) | |||||||||||||||
Net earnings | $ | 160 | $ | 132 | $ | 317 | $ | 263 | |||||||
Depreciation and amortization expenses | 104 | 93 | 205 | 182 | |||||||||||
Changes in assets and liabilities | (16) | 51 | (59) | 89 | |||||||||||
Other operating activities | 16 | 5 | 20 | 13 | |||||||||||
Operating Activities | 264 | 281 | 483 | 547 | |||||||||||
Investing Activities | (146) | (424) | (265) | (748) | |||||||||||
Financing Activities | (122) | 160 | (203) | 170 | |||||||||||
Increase (Decrease) in Cash and Cash Equivalents | $ | (4) | $ | 17 | $ | 15 | $ | (31) |
Andeavor Logistics LP | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 (a) | 2019 | 2018 (a) | ||||||||||||
Earnings Before Income Taxes | |||||||||||||||
Terminalling and Transportation | $ | 146 | $ | 107 | $ | 298 | $ | 211 | |||||||
Gathering and Processing | 59 | 69 | 122 | 146 | |||||||||||
Wholesale | 12 | 11 | 17 | 15 | |||||||||||
Total Segment Operating Income | 217 | 187 | 437 | 372 | |||||||||||
Unallocated general and administrative expenses | (10) | (7) | (19) | (15) | |||||||||||
Operating Income | 207 | 180 | 418 | 357 | |||||||||||
Interest and financing costs, net | (63) | (60) | (124) | (115) | |||||||||||
Equity in earnings of equity method investments | 9 | 10 | 16 | 18 | |||||||||||
Other income, net | 7 | 2 | 7 | 3 | |||||||||||
Earnings Before Income Taxes | $ | 160 | $ | 132 | $ | 317 | $ | 263 | |||||||
Depreciation and Amortization Expenses | |||||||||||||||
Terminalling and Transportation | $ | 38 | $ | 37 | $ | 74 | $ | 70 | |||||||
Gathering and Processing | 64 | 54 | 126 | 107 | |||||||||||
Wholesale | 2 | 2 | 5 | 5 | |||||||||||
Total Depreciation and Amortization Expenses | $ | 104 | $ | 93 | $ | 205 | $ | 182 | |||||||
Segment EBITDA (c) | |||||||||||||||
Terminalling and Transportation | $ | 195 | $ | 151 | $ | 386 | $ | 294 | |||||||
Gathering and Processing | 128 | 128 | 257 | 261 | |||||||||||
Wholesale | 14 | 13 | 22 | 20 | |||||||||||
Total Segment EBITDA | $ | 337 | $ | 292 | $ | 665 | $ | 575 |
(c) | See "Non-GAAP Reconciliations" section below for further information regarding this non-GAAP measure. |
Andeavor Logistics LP | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 (a) | 2019 | 2018 (a) | ||||||||||||
Terminalling and Transportation Segment | |||||||||||||||
Revenues | |||||||||||||||
Terminalling | $ | 248 | $ | 209 | $ | 493 | $ | 408 | |||||||
Pipeline transportation | 47 | 40 | 93 | 71 | |||||||||||
Other revenues | 2 | 1 | 4 | 3 | |||||||||||
Total Revenues | 297 | 250 | 590 | 482 | |||||||||||
Costs and Expenses | |||||||||||||||
Operating expenses (excluding depreciation and | 107 | 95 | 208 | 180 | |||||||||||
Depreciation and amortization expenses | 38 | 37 | 74 | 70 | |||||||||||
General and administrative expenses | 5 | 10 | 9 | 20 | |||||||||||
Loss on asset disposals and impairments | 1 | 1 | 1 | 1 | |||||||||||
Terminalling and Transportation Segment Operating Income | $ | 146 | $ | 107 | $ | 298 | $ | 211 |
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 (a) | 2019 | 2018 (a) | ||||||||||||
Gathering and Processing Segment | |||||||||||||||
Revenues | |||||||||||||||
NGL sales (e) | $ | 94 | $ | 95 | $ | 216 | $ | 199 | |||||||
Gas gathering and processing | 75 | 82 | 145 | 167 | |||||||||||
Crude oil and water gathering | 79 | 80 | 176 | 155 | |||||||||||
Pass-thru and other | 36 | 44 | 68 | 79 | |||||||||||
Total Revenues | 284 | 301 | 605 | 600 | |||||||||||
Costs and Expenses | |||||||||||||||
NGL expense (excluding items shown separately below) | 33 | 45 | 92 | 93 | |||||||||||
Operating expenses (excluding depreciation and amortization) | 124 | 122 | 255 | 230 | |||||||||||
Depreciation and amortization expenses | 64 | 54 | 126 | 107 | |||||||||||
General and administrative expenses | 3 | 11 | 9 | 24 | |||||||||||
Loss on asset disposals and impairments | 1 | — | 1 | — | |||||||||||
Gathering and Processing Segment Operating Income | $ | 59 | $ | 69 | $ | 122 | $ | 146 |
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Wholesale Segment | |||||||||||||||
Revenues | |||||||||||||||
Fuel sales | $ | 17 | $ | 15 | $ | 29 | $ | 24 | |||||||
Other wholesale | 6 | 10 | 16 | 18 | |||||||||||
Total Revenues | 23 | 25 | 45 | 42 | |||||||||||
Costs and Expenses | |||||||||||||||
Operating expenses (excluding depreciation and amortization) | 9 | 11 | 22 | 21 | |||||||||||
Depreciation and amortization expenses | 2 | 2 | 5 | 5 | |||||||||||
General and administrative expenses | — | 1 | 1 | 1 | |||||||||||
Wholesale Operating Income | $ | 12 | $ | 11 | $ | 17 | 15 |
Non-GAAP Reconciliations | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 (a) | 2019 | 2018 (a) | ||||||||||||
Reconciliation of Net Earnings to EBITDA | |||||||||||||||
Net earnings | $ | 160 | $ | 132 | $ | 317 | $ | 263 | |||||||
Depreciation and amortization expenses | 104 | 93 | 205 | 182 | |||||||||||
Interest and financing costs, net of capitalized interest | 63 | 60 | 124 | 115 | |||||||||||
EBITDA | 327 | 285 | 646 | 560 | |||||||||||
Predecessor impact | — | 9 | — | 11 | |||||||||||
Maintenance capital expenditures (d) | (44) | (22) | (73) | (44) | |||||||||||
Reimbursement for maintenance capital expenditures (d) | 21 | 6 | 36 | 12 | |||||||||||
Changes in deferred revenue (e) | 14 | (2) | 15 | (5) | |||||||||||
Loss on asset disposals and impairments | 2 | 1 | 2 | 1 | |||||||||||
Interest and financing costs, net | (63) | (60) | (124) | (115) | |||||||||||
Amortized debt costs | 3 | 2 | 5 | 5 | |||||||||||
Adjustments for equity method investments | 3 | 5 | 10 | 8 | |||||||||||
Other (f) | (4) | — | 7 | — | |||||||||||
Distributable Cash Flow | 259 | 224 | 524 | 433 | |||||||||||
Less: Preferred unit distributions (g) | (10) | (10) | (20) | (20) | |||||||||||
Distributable Cash Flow Attributable to Common Unitholders | $ | 249 | $ | 214 | $ | 504 | $ | 413 |
(d) | We adjust our reconciliation of distributable cash flows for maintenance capital expenditures, tank restoration costs and expenditures required to ensure the safety, reliability, integrity and regulatory compliance of our assets with an offset for any reimbursements received for such expenditures. |
(e) | Included in changes in deferred revenue are adjustments to remove the impact of the adoption of the new revenue recognition accounting standard on January 1, 2018 as well as the impact from the timing of recognition with certain of our contracts that contain minimum volume commitment with clawback provisions. |
(f) | Other includes transaction costs related to recent acquisitions, non-cash legal reserves and unit-based compensation expense. |
(g) | Represents the cash distributions earned by the Preferred Units for the three and six months ended June 30, 2019 and 2018 assuming a distribution is declared by the Board, however, we did not declare a distribution for the first half of 2019 due to the MPLX Merger. Cash distributions to be paid to holders of the Preferred Units are not available to common unitholders. |
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 (a) | 2019 | 2018 (a) | ||||||||||||
Reconciliation of Net Cash from Operating Activities to | |||||||||||||||
Net cash from operating activities | $ | 264 | $ | 281 | $ | 483 | $ | 547 | |||||||
Changes in assets and liabilities | 16 | (51) | 59 | (89) | |||||||||||
Predecessors impact | — | 9 | — | 11 | |||||||||||
Maintenance capital expenditures (d) | (44) | (22) | (73) | (44) | |||||||||||
Reimbursement for maintenance capital expenditures (d) | 21 | 6 | 36 | 12 | |||||||||||
Changes in deferred revenue (e) | 14 | (2) | 15 | (5) | |||||||||||
Adjustments for equity method investments | (7) | 4 | — | 3 | |||||||||||
Other (h) | (5) | (1) | 4 | (2) | |||||||||||
Distributable Cash Flow | 259 | 224 | 524 | 433 | |||||||||||
Less: Preferred unit distributions (g) | (10) | (10) | (20) | (20) | |||||||||||
Distributable Cash Flow Attributable to Common | $ | 249 | $ | 214 | $ | 504 | $ | 413 |
(h) | Other includes transaction costs related to recent acquisitions and non-cash legal reserves. |
Andeavor Logistics LP | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 (a) | 2019 | 2018 (a) | ||||||||||||
Reconciliation of Segment Operating Income to Segment | |||||||||||||||
Terminalling and Transportation segment operating income | $ | 146 | $ | 107 | $ | 298 | $ | 211 | |||||||
Depreciation and amortization expenses | 38 | 37 | 74 | 70 | |||||||||||
Equity in earnings of equity method investments | 4 | 5 | 7 | 10 | |||||||||||
Other income, net | 7 | 2 | 7 | 3 | |||||||||||
Terminalling and Transportation Segment EBITDA | $ | 195 | $ | 151 | $ | 386 | $ | 294 | |||||||
Gathering and Processing segment operating income | $ | 59 | $ | 69 | $ | 122 | $ | 146 | |||||||
Depreciation and amortization expenses | 64 | 54 | 126 | 107 | |||||||||||
Equity in earnings of equity method investments | 5 | 5 | 9 | 8 | |||||||||||
Gathering and Processing Segment EBITDA | $ | 128 | $ | 128 | $ | 257 | $ | 261 | |||||||
Wholesale segment operating income | $ | 12 | $ | 11 | $ | 17 | $ | 15 | |||||||
Depreciation and amortization expenses | 2 | 2 | 5 | 5 | |||||||||||
Wholesale Segment EBITDA | $ | 14 | $ | 13 | $ | 22 | $ | 20 |
Andeavor Logistics LP | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
September | December | March | June | Trailing Four | |||||||||||||||
Net Earnings | $ | 166 | $ | 171 | $ | 157 | $ | 160 | $ | 654 | |||||||||
Add: Depreciation and amortization expense | 85 | 101 | 101 | 104 | 391 | ||||||||||||||
Add: Interest and financing costs, net | 57 | 61 | 61 | 63 | 242 | ||||||||||||||
EBITDA | $ | 308 | $ | 333 | $ | 319 | $ | 327 | 1,287 | ||||||||||
Add: Pro forma adjustment for acquisitions | 19 | ||||||||||||||||||
Pro forma LTM EBITDA | $ | 1,306 | |||||||||||||||||
June 30, | |||||||||||||||||||
Total debt | $ | 5,263 | |||||||||||||||||
Pro forma LTM EBITDA | 1,306 | ||||||||||||||||||
Leverage ratio | 4.0x |
View original content:http://www.prnewswire.com/news-releases/andeavor-logistics-lp-reports-second-quarter-2019-results-300894834.html
SOURCE Andeavor Logistics LP
FINDLAY, Ohio, Aug. 1, 2019 /PRNewswire/ --
MPLX LP (NYSE: MPLX) today reported second quarter 2019 net income attributable to MPLX of $482 million compared with $453 million for the second quarter of 2018. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $920 million compared with $867 million in the second quarter of 2018. Logistics and Storage (L&S) reported segment income from operations of $486 million and adjusted EBITDA of $569 million for the quarter, up $52 million and $43 million, respectively, versus the second quarter of last year. Gathering and Processing (G&P) reported segment income from operations of $173 million and adjusted EBITDA of $351 million for the quarter, down $1 million and up $10 million, respectively, on a year-over-year basis.
"MPLX successfully closed its acquisition of Andeavor Logistics on July 30th," said Gary R. Heminger, chairman and chief executive officer. "We plan to focus on three strategic initiatives. First, streamlining our capital expenditures focusing on the most attractive returns. Second, working with MPC on a portfolio optimization initiative, which could include asset divestitures. And third, using proceeds from any divestitures for general purposes, such as investments in high-return projects as well as debt reduction."
During the quarter, MPLX generated $834 million in net cash provided by operating activities and distributable cash flow of $741 million, which provided adjusted distribution coverage1 of 1.36x and resulted in 3.9x leverage. MPLX also announced its 26th consecutive distribution increase to $0.6675 per common unit, a $0.01 increase over the prior quarter and a 6.4 percent increase over the prior year second quarter.
(1) Adjusted distribution coverage does not include distributable cash flow from ANDX or distributions paid to converted ANDX unitholders post-close |
Financial Highlights
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
(In millions, except per unit and ratio data) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income attributable to MPLX | $ | 482 | $ | 453 | $ | 985 | $ | 874 | ||||||||
Adjusted EBITDA attributable to MPLX(a) | 920 | 867 | 1,850 | 1,627 | ||||||||||||
Net cash provided by operating activities | 834 | 840 | 1,452 | 1,290 | ||||||||||||
Distributable cash flow ("DCF")(a) | 741 | 695 | 1,498 | 1,314 | ||||||||||||
Distribution per common unit(b) | $ | 0.6675 | $ | 0.6275 | $ | 1.3250 | $ | 1.2450 | ||||||||
Distribution coverage ratio(c) | 1.01x | 1.36x | 1.18x | 1.33x | ||||||||||||
Adjusted distribution coverage ratio(c)(d) | 1.36x | N/A | 1.38x | N/A | ||||||||||||
Consolidated debt to adjusted EBITDA(e) | 3.9x | 3.7x | N/A | N/A | ||||||||||||
(a) | Non-GAAP measure calculated before distributions to preferred unitholders. See reconciliation below. |
(b) | Distributions declared by the board of directors of MPLX's general partner. |
(c) | Non-GAAP measure. See calculation below. Includes distributions in respect of common units and preferred units issued in connection with the acquisition of ANDX on July 30, 2019 to MPLX DCF as reported above. |
(d) | Non-GAAP measure. See calculation below. Excludes distributions in respect of common units and preferred units issued in connection with the acquisition of ANDX on July 30, 2019. Such units were issued prior to the record dates for the respective units. |
(e) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. See reconciliation below. |
Segment Results
(In millions) | Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||
Segment income from operations (unaudited) | 2019 | 2018 | 2019 | 2018 | ||||||||||
Logistics and Storage | $ | 486 | $ | 434 | $ | 966 | $ | 819 | ||||||
Gathering and Processing | 173 | 174 | 371 | 346 | ||||||||||
Segment adjusted EBITDA attributable to MPLX LP | ||||||||||||||
Logistics and Storage | 569 | 526 | 1,128 | 963 | ||||||||||
Gathering and Processing | $ | 351 | $ | 341 | $ | 722 | $ | 664 | ||||||
Logistics & Storage
L&S segment income from operations and adjusted EBITDA for the second quarter of 2019 increased by $52 million and $43 million, respectively, compared with the same period in 2018. The increase was primarily due to the continued solid performance of the underlying base business, partially offset by weather-related operational impacts in the Midwest during the quarter.
Total pipeline throughputs were 3.5 million barrels per day in the second quarter, an increase of 3 percent versus the same quarter last year. The average tariff rate was $0.71 per barrel for the quarter. Terminal throughput was 1.5 million barrels per day for the quarter, an increase of 2 percent versus the same quarter last year.
MPLX advanced its strategy of creating integrated crude oil and natural gas logistics systems from the Permian to the U.S. Gulf Coast. During the quarter, the company announced a final investment decision on Whistler, a planned natural gas pipeline, and signed definitive agreements for its participation in Wink-to-Webster, a proposed crude oil pipeline, both in the Permian.
Gathering & Processing
G&P segment income from operations and segment adjusted EBITDA decreased by $1 million and increased by $10 million, respectively, for the second quarter of 2019 compared with the same period in 2018. Year-over-year results were impacted by $30 million due to lower weighted average NGL prices. Additionally, second quarter results were sequentially impacted by approximately $18 million for planned maintenance at the Javelina facility and $5 million associated with roughly one week of precautionary downtime on a Marcellus NGL pipeline.
In the Marcellus and Utica, the company continued to experience significant year-over-year growth. Gathered volumes averaged 3.3 billion cubic feet per day (bcf/d) for the quarter, a 19 percent increase versus the second quarter of 2018. Processed volumes averaged 6.0 bcf/d, a 17 percent increase versus the same quarter last year. Fractionated volumes averaged 480 thousand barrels per day, an 18 percent increase versus the second quarter of 2018. The increase was primarily the result of higher volumes at the recently expanded Hopedale Complex.
In the Southwest, gathered volumes averaged 1.6 bcf/d for the second quarter, an 8 percent increase versus the second quarter of 2018. Processed volumes averaged 1.6 bcf/d for the quarter, an 11 percent increase versus the second quarter of 2018.
To support additional growth, MPLX expects to complete two additional processing plants at Sherwood in late 2019, adding 400 million cubic feet per day of incremental capacity. Additionally, MPLX has three plants under various stages of development in the Permian.
Financial Position and Liquidity
As of June 30, 2019, MPLX had $7 million in cash, $1.6 billion available through its bank revolving credit facility expiring in July 2022, and $956 million available through its credit facility with MPC. The company's leverage ratio was 3.9x at June 30, 2019.
In connection with the July 30 closing of the Andeavor Logistics acquisition, MPLX amended and restated its existing $2.25 billion revolving credit facility to increase borrowing capacity to up to $3.5 billion and extend the term to July 30, 2024. ANDX's revolving credit facilities totaling $2.1 billion in borrowing capacity were terminated upon the closing and repaid with borrowings under the MPLX revolving credit facility. Additionally, MPLX upsized its existing $1.0 billion intercompany loan agreement with MPC to $1.5 billion. MPLX believes that the combined company's available liquidity, its distribution coverage, and its access to the capital markets will provide it with sufficient liquidity to meet its day-to-day operational needs and continue investing in organic growth opportunities. MPLX remains committed to maintaining an investment-grade credit profile and a strategy of self-funding the equity portion of its organic growth capital needs.
Conference Call
At 11 a.m. EDT today, MPLX will hold a conference call and webcast to discuss the reported results and provide an update on operations. Interested parties may listen by visiting MPLX's website at http://www.mplx.com and clicking on the "2019 Second-Quarter Financial Results" link in the "News & Headlines" section. A replay of the webcast will be available on MPLX's website for two weeks. Financial information, including earnings release and other investor-related material, will also be available online prior to the conference call and webcast at http://ir.mplx.com.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Jim Mallamaci, Manager, Investor Relations
Evan Barbosa, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Communications (419) 421-2521
Jamal 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 DCF generated is considered by the board of directors of our general partner in approving the Partnership's cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) provision for income taxes; (iii) amortization of deferred financing costs; (iv) non-cash equity-based compensation; (v) net interest and other financial costs; (vi) income from equity method investments; (vii) distributions and adjustments related to equity method investments; (viii) unrealized derivative gains and losses; (ix) acquisition costs; (x) noncontrolling interest and (xi) other adjustments as deemed necessary. In general, we define DCF as adjusted EBITDA adjusted for (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items.
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record the realized gain or loss of the contract.
Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures.
DCF is a financial performance measure used by management as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders.
Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between the partnership's financial operating performance and cash distribution capability. We define the distribution coverage ratio as the ratio of DCF attributable to GP and LP unitholders to total GP and LP distributions declared.
Leverage ratio is a liquidity measure used by management, industry analysts, investors, lenders and rating agencies to analyze our ability to incur and service debt and fund capital expenditures.
Forward-Looking statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX). These forward-looking statements relate to, among other things, MPLX's acquisition of Andeavor Logistics LP and include expectations, estimates and projections concerning the business and operations, financial priorities and strategic plans of the combined entity. 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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: the risk that anticipated opportunities and any other synergies from or anticipated benefits of the Andeavor Logistics acquisition may not be fully realized or may take longer to realize than expected, including whether the transaction will be accretive within the expected timeframe or at all; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDX; the amount and timing of future distributions; negative capital market conditions, including an increase of the current yield on common units; the ability to achieve strategic and financial objectives, including with respect to distribution coverage, future distribution levels, proposed projects and completed transactions; the success of Marathon Petroleum Corporation's (MPC) 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, 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: 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 as set forth above related to the acquisition of Andeavor Logistics LP by MPLX; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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 or 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 any common stock repurchases; the adequacy of capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute business plans and to effect any share repurchases or dividend increases, including within the expected timeframe; 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; 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, filed with the SEC.
We have based our forward-looking statements on our current expectations, estimates and projections about our 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 are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of MPC's Form 10-K are available on the SEC website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.
Condensed Results of Operations (unaudited) | |||||||||||||
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||
(In millions, except per unit data) | 2019 | 2018 | 2019 | 2018 | |||||||||
Revenues and other income: | |||||||||||||
Operating revenue | $ | 732 | $ | 751 | $ | 1,500 | $ | 1,463 | |||||
Operating revenue - related parties | 792 | 752 | 1,574 | 1,372 | |||||||||
Income (loss) from equity method investments | 73 | 50 | 143 | 111 | |||||||||
Other income | 32 | 25 | 58 | 52 | |||||||||
Total revenues and other income | 1,629 | 1,578 | 3,275 | 2,998 | |||||||||
Costs and expenses: | |||||||||||||
Operating expenses | 427 | 470 | 868 | 892 | |||||||||
Operating expenses - related parties | 241 | 223 | 456 | 401 | |||||||||
Depreciation and amortization | 214 | 188 | 425 | 364 | |||||||||
General and administrative expenses | 69 | 72 | 151 | 141 | |||||||||
Other taxes | 19 | 17 | 38 | 35 | |||||||||
Total costs and expenses | 970 | 970 | 1,938 | 1,833 | |||||||||
Income from operations | 659 | 608 | 1,337 | 1,165 | |||||||||
Interest and other financial costs | 170 | 151 | 341 | 281 | |||||||||
Income before income taxes | 489 | 457 | 996 | 884 | |||||||||
(Benefit) provision for income taxes | 1 | 1 | (1) | 5 | |||||||||
Net income | 488 | 456 | 997 | 879 | |||||||||
Less: Net income (loss) attributable to noncontrolling | 6 | 3 | 12 | 5 | |||||||||
Net income attributable to MPLX LP | 482 | 453 | 985 | 874 | |||||||||
Less: Preferred unit distributions | 21 | 20 | 41 | 36 | |||||||||
Limited partners' interest in net income attributable to | $ | 461 | $ | 433 | $ | 944 | $ | 838 | |||||
Per Unit Data | |||||||||||||
Net income attributable to MPLX LP per limited partner | |||||||||||||
Common - basic | $ | 0.56 | $ | 0.55 | $ | 1.16 | $ | 1.15 | |||||
Common - diluted | $ | 0.55 | $ | 0.55 | $ | 1.16 | $ | 1.15 | |||||
Weighted average limited partner units outstanding: | |||||||||||||
Common units – basic | 794 | 794 | 794 | 728 | |||||||||
Common units – diluted | 795 | 794 | 795 | 728 | |||||||||
Select Financial Statistics (unaudited) | Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||
(In millions, except ratio data) | 2019 | 2018 | 2019 | 2018 | ||||||||
Distribution declared | ||||||||||||
Common units (LP) - public(a) | $ | 261 | $ | 181 | $ | 452 | $ | 360 | ||||
Common units - MPC(a)(b) | 431 | 316 | 763 | 604 | ||||||||
Total GP and LP distribution declared | 692 | 497 | 1,215 | 964 | ||||||||
Less: Distributions attributable to common units issued in connection with MPLX's acquisition of ANDX(a) | 163 | — | 163 | — | ||||||||
Adjusted GP and LP distribution declared | 529 | 497 | 1,052 | 964 | ||||||||
Series A preferred units distribution declared(c) | 21 | 20 | 41 | 36 | ||||||||
Series B preferred units distribution declared(d) | 21 | — | 21 | — | ||||||||
Total distribution declared | 734 | 517 | 1,277 | 1,000 | ||||||||
Adjusted total distribution declared(e) | $ | 550 | $ | 517 | $ | 1,093 | $ | 1,000 | ||||
Distribution coverage ratio(f) | 1.01x | 1.36x | 1.18x | 1.33x | ||||||||
Adjusted distribution coverage ratio(g) | 1.36x | N/A | 1.38x | N/A | ||||||||
Cash Flow Data | ||||||||||||
Net cash flow provided by (used in): | ||||||||||||
Operating activities | $ | 834 | $ | 840 | $ | 1,452 | $ | 1,290 | ||||
Investing activities | (600) | (464) | (1,175) | (954) | ||||||||
Financing activities | (320) | (373) | (346) | (336) | ||||||||
Other Financial Data | ||||||||||||
Adjusted EBITDA attributable to MPLX LP(h) | 920 | 867 | 1,850 | 1,627 | ||||||||
DCF attributable to GP and LP unitholders(h) | 699 | 675 | 1,436 | 1,278 | ||||||||
Adjusted DCF attributable to GP and LP unitholders(h) | $ | 720 | $ | 675 | $ | 1,457 | $ | 1,278 | ||||
(a) | The distribution on common units for both the three and six months ended June 30, 2019 includes the impact of the issuance of approximately 102 million units issued to public unitholders and approximately 161 million units issued to MPC in connection with MPLX's acquisition of ANDX on July 30, 2019. Had the transaction been completed subsequent to our distribution record date, distributions would have been $163 million lower for the three and six months ended June 30, 2019. |
(b) | Distributions to MPC exclude $12.5 million in distributions waived by MPC in connection with MPLX's merger with ANDX for the three and six months ended June 30, 2019. The waiver was instituted in 2017 under the terms of ANDX's historical partnership agreement and will remain in effect through 2019, the original term of the waiver agreement. In addition, MPC agreed to waive $23.7 million in common unit distributions associated with the units received in connection with the Feb. 1, 2018 dropdown. |
(c) | 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. |
(d) | As a result of the ANDX Merger, 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. Accordingly a cash distribution payment totaling $21 million will be paid to Series B unitholders on August 15, 2019. |
(e) | Adjusted GP and LP distribution declared plus Series A preferred units distribution declared. |
(f) | DCF attributable to GP and LP unitholders divided by total GP and LP distribution declared. Includes distributions in respect of common units and preferred units issued in connection with the acquisition of ANDX on July 30, 2019 to MPLX DCF as reported above. |
(g) | Adjusted DCF attributable to GP and LP unitholders divided by total adjusted GP and LP distribution declared. Excludes distributions in respect of common units and preferred units issued in connection with the acquisition of ANDX on July 30, 2019. Such units were issued prior to the record dates for the respective units. |
(h) | Non-GAAP measure. See reconciliation below. |
Select Balance Sheet Data (unaudited) | |||||
(In millions, except ratio data) | June 30, | December 31, | |||
Cash and cash equivalents | $ | 7 | $ | 68 | |
Total assets | 23,746 | 22,779 | |||
Total debt(a) | 14,080 | 13,393 | |||
Redeemable preferred units | 1,005 | 1,004 | |||
Total equity | $ | 6,869 | $ | 6,864 | |
Consolidated total debt to adjusted EBITDA(b) | 3.9x | 3.9x | |||
Partnership units outstanding: | |||||
MPC-held common units | 505 | 505 | |||
Public common units | 290 | 289 | |||
(a) | Outstanding intercompany borrowings were $44 million as of June 30, 2019 and zero December 31, 2018. |
(b) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. Face value total debt includes approximately $437 million and $463 million of unamortized discount and debt issuance costs as of June 30, 2019 and December 31, 2018, respectively. |
Operating Statistics (unaudited) | ||||||||||||||||||
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | |||||||||||||
Logistics and Storage | ||||||||||||||||||
Pipeline throughput (mbpd) | ||||||||||||||||||
Crude oil pipelines | 2,263 | 2,229 | 2 | % | 2,216 | 2,119 | 5 | % | ||||||||||
Product pipelines | 1,226 | 1,164 | 5 | % | 1,234 | 1,110 | 11 | % | ||||||||||
Total pipelines | 3,489 | 3,393 | 3 | % | 3,450 | 3,229 | 7 | % | ||||||||||
Average tariff rates ($ per barrel) | ||||||||||||||||||
Crude oil pipelines | $ | 0.63 | $ | 0.58 | 9 | % | $ | 0.62 | $ | 0.57 | 9 | % | ||||||
Product pipelines | 0.84 | 0.76 | 11 | % | 0.82 | 0.76 | 8 | % | ||||||||||
Total pipelines | $ | 0.71 | $ | 0.64 | 11 | % | 0.69 | 0.64 | 8 | % | ||||||||
Terminal throughput (mbpd) | 1,509 | 1,485 | 2 | % | 1,470 | 1,465 | — | % | ||||||||||
Barges at period-end | 261 | 256 | 2 | % | 261 | 256 | 2 | % | ||||||||||
Towboats at period-end | 23 | 20 | 15 | % | 23 | 20 | 15 | % |
Gathering and Processing Operating Statistics (unaudited) - Consolidated(a) | Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||
Marcellus Operations | 1,266 | 1,147 | 10 | % | 1,274 | 1,135 | 12 | % | |||||||||
Utica Operations | — | — | — | % | — | — | — | % | |||||||||
Southwest Operations | 1,617 | 1,492 | 8 | % | 1,600 | 1,484 | 8 | % | |||||||||
Total gathering throughput | 2,883 | 2,639 | 9 | % | 2,874 | 2,619 | 10 | % | |||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||
Marcellus Operations | 4,216 | 3,716 | 13 | % | 4,185 | 3,656 | 14 | % | |||||||||
Utica Operations | — | — | — | % | — | — | — | % | |||||||||
Southwest Operations | 1,558 | 1,401 | 11 | % | 1,578 | 1,364 | 16 | % | |||||||||
Southern Appalachian Operations | 243 | 254 | (4) | % | 239 | 253 | (6) | % | |||||||||
Total natural gas processed | 6,017 | 5,371 | 12 | % | 6,002 | 5,273 | 14 | % | |||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||
Marcellus Operations | 440 | 362 | 22 | % | 430 | 357 | 20 | % | |||||||||
Utica Operations | — | — | — | % | — | — | — | % | |||||||||
Southwest Operations | 3 | 19 | (84) | % | 10 | 17 | (41) | % | |||||||||
Southern Appalachian Operations | 12 | 13 | (8) | % | 12 | 13 | (8) | % | |||||||||
Total C2 + NGLs fractionated | 455 | 394 | 15 | % | 452 | 387 | 17 | % | |||||||||
(a) | Includes operating data for entities that have been consolidated into the MPLX financial statements. |
Gathering and Processing Operating Statistics (unaudited) - Operated(a) | Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||
Marcellus Operations | 1,266 | 1,147 | 10 | % | 1,274 | 1,135 | 12 | % | |||||||||
Utica Operations | 2,066 | 1,654 | 25 | % | 2,087 | 1,612 | 29 | % | |||||||||
Southwest Operations | 1,617 | 1,494 | 8 | % | 1,600 | 1,486 | 8 | % | |||||||||
Total gathering throughput | 4,949 | 4,295 | 15 | % | 4,961 | 4,233 | 17 | % | |||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||
Marcellus Operations | 5,202 | 4,286 | 21 | % | 5,175 | 4,201 | 23 | % | |||||||||
Utica Operations | 823 | 876 | (6) | % | 820 | 906 | (9) | % | |||||||||
Southwest Operations | 1,558 | 1,401 | 11 | % | 1,578 | 1,364 | 16 | % | |||||||||
Southern Appalachian Operations | 243 | 254 | (4) | % | 239 | 253 | (6) | % | |||||||||
Total natural gas processed | 7,826 | 6,817 | 15 | % | 7,812 | 6,724 | 16 | % | |||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||
Marcellus Operations | 440 | 362 | 22 | % | 430 | 357 | 20 | % | |||||||||
Utica Operations | 40 | 45 | (11) | % | 43 | 45 | (4) | % | |||||||||
Southwest Operations | 3 | 19 | (84) | % | 10 | 17 | (41) | % | |||||||||
Southern Appalachian Operations | 12 | 13 | (8) | % | 12 | 13 | (8) | % | |||||||||
Total C2 + NGLs fractionated | 495 | 439 | 13 | % | 495 | 432 | 15 | % | |||||||||
(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. |
Reconciliation of Segment Adjusted EBITDA to Net Income (unaudited) | ||||||||||||
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 569 | $ | 526 | $ | 1,128 | $ | 963 | ||||
G&P segment adjusted EBITDA attributable to MPLX LP | 351 | 341 | 722 | 664 | ||||||||
Adjusted EBITDA attributable to MPLX LP | 920 | 867 | 1,850 | 1,627 | ||||||||
Depreciation and amortization | (214) | (188) | (425) | (364) | ||||||||
Provision for income taxes | (1) | (1) | 1 | (5) | ||||||||
Amortization of deferred financing costs | (13) | (15) | (26) | (31) | ||||||||
Non-cash equity-based compensation | (3) | (5) | (9) | (9) | ||||||||
Net interest and other financial costs | (157) | (136) | (315) | (250) | ||||||||
Income from equity method investments | 73 | 50 | 143 | 111 | ||||||||
Distributions/adjustments related to equity method investments | (120) | (112) | (228) | (202) | ||||||||
Unrealized derivative losses(a) | — | (8) | (4) | (1) | ||||||||
Acquisition costs | (4) | — | (4) | (3) | ||||||||
Adjusted EBITDA attributable to noncontrolling interests | 7 | 4 | 14 | 6 | ||||||||
Net income | $ | 488 | $ | 456 | $ | 997 | $ | 879 | ||||
(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 June 30 | Six Months Ended June 30 | ||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||
L&S Segment income from operations | $ | 486 | $ | 434 | $ | 966 | $ | 819 | |||
Depreciation and amortization | 70 | 61 | 140 | 109 | |||||||
Income from equity method investments | (47) | (36) | (88) | (80) | |||||||
Distributions/adjustments related to equity method investments | 55 | 64 | 101 | 107 | |||||||
Acquisition costs | 4 | — | 4 | 3 | |||||||
Non-cash equity-based compensation | 1 | 3 | 5 | 5 | |||||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 569 | $ | 526 | $ | 1,128 | $ | 963 | |||
G&P Reconciliation of Segment Income from Operations to Segment Adjusted EBITDA (unaudited) | |||||||||||
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||
G&P Segment income from operations | $ | 173 | $ | 174 | $ | 371 | $ | 346 | |||
Depreciation and amortization | 144 | 127 | 285 | 255 | |||||||
Income from equity method investments | (26) | (14) | (55) | (31) | |||||||
Distributions/adjustments related to equity method investments | 65 | 48 | 127 | 95 | |||||||
Unrealized derivative losses(a) | — | 8 | 4 | 1 | |||||||
Non-cash equity-based compensation | 2 | 2 | 4 | 4 | |||||||
Adjusted EBITDA attributable to noncontrolling interest | (7) | (4) | (14) | (6) | |||||||
G&P Segment adjusted EBITDA attributable to MPLX LP | $ | 351 | $ | 341 | $ | 722 | $ | 664 | |||
(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 June 30 | Six Months Ended June 30 | |||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||
Net income | $ | 488 | $ | 456 | $ | 997 | $ | 879 | ||||||
(Benefit)/provision for income taxes | 1 | 1 | (1) | 5 | ||||||||||
Amortization of deferred financing costs | 13 | 15 | 26 | 31 | ||||||||||
Net interest and other financial costs | 157 | 136 | 315 | 250 | ||||||||||
Income from operations | 659 | 608 | 1,337 | 1,165 | ||||||||||
Depreciation and amortization | 214 | 188 | 425 | 364 | ||||||||||
Non-cash equity-based compensation | 3 | 5 | 9 | 9 | ||||||||||
Income from equity method investments | (73) | (50) | (143) | (111) | ||||||||||
Distributions/adjustments related to equity method investments | 120 | 112 | 228 | 202 | ||||||||||
Unrealized derivative losses(a) | — | 8 | 4 | 1 | ||||||||||
Acquisition costs | 4 | — | 4 | 3 | ||||||||||
Adjusted EBITDA | 927 | 871 | 1,864 | 1,633 | ||||||||||
Adjusted EBITDA attributable to noncontrolling interests | (7) | (4) | (14) | (6) | ||||||||||
Adjusted EBITDA attributable to MPLX LP | 920 | 867 | 1,850 | 1,627 | ||||||||||
Deferred revenue impacts | 9 | 2 | 17 | 11 | ||||||||||
Net interest and other financial costs | (157) | (136) | (315) | (250) | ||||||||||
Maintenance capital expenditures | (34) | (33) | (53) | (58) | ||||||||||
Equity method investment capital expenditures paid out | (5) | (5) | (9) | (16) | ||||||||||
Other | 8 | — | 8 | — | ||||||||||
DCF attributable to MPLX LP | 741 | 695 | 1,498 | 1,314 | ||||||||||
Preferred unit distributions | (42) | (20) | (62) | (36) | ||||||||||
DCF attributable to GP and LP unitholders | 699 | 675 | 1,436 | 1,278 | ||||||||||
Series B preferred unit distributions | 21 | — | 21 | — | ||||||||||
Adjusted DCF attributable to GP and LP unitholders | $ | 720 | $ | 675 | $ | 1,457 | $ | 1,278 | ||||||
(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 Net Income to LTM Pro forma adjusted EBITDA (unaudited) | ||||||
Three Months Ended June 30 | ||||||
(In millions) | 2019 | 2018 | ||||
LTM Net income | $ | 1,952 | $ | 1,337 | ||
LTM Net income to adjusted EBITDA adjustments | 1,746 | 1,989 | ||||
LTM Adjusted EBITDA attributable to MPLX LP | 3,698 | 3,326 | ||||
LTM Pro forma adjustments for acquisitions | 2 | 19 | ||||
LTM Pro forma adjusted EBITDA | 3,700 | 3,345 | ||||
Consolidated debt | $ | 14,517 | $ | 12,469 | ||
Consolidated debt to adjusted EBITDA | 3.9x | 3.7x | ||||
Reconciliation of Adjusted EBITDA Attributable to MPLX LP and DCF Attributable to GP and LP Unitholders from Net Cash Provided by Operating Activities (unaudited) | |||||||||||||
Three Months Ended June 30 |
Six Months Ended June 30 | ||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||
Net cash provided by operating activities | $ | 834 | $ | 840 | $ | 1,452 | $ | 1,290 | |||||
Changes in working capital items | (79) | (145) | 62 | 33 | |||||||||
All other, net | — | 17 | 4 | 14 | |||||||||
Non-cash equity-based compensation | 3 | 5 | 9 | 9 | |||||||||
Net gain on disposal of assets | 5 | — | 4 | — | |||||||||
Current income taxes | 1 | — | 1 | — | |||||||||
Net interest and other financial costs | 157 | 136 | 315 | 250 | |||||||||
Asset retirement expenditures | 1 | 4 | 1 | 5 | |||||||||
Unrealized derivative losses(a) | — | 8 | 4 | 1 | |||||||||
Acquisition costs | 4 | — | 4 | 3 | |||||||||
Distributions/adjustments related to equity method investments | 1 | 5 | 8 | 27 | |||||||||
Other | — | 1 | — | 1 | |||||||||
Adjusted EBITDA | 927 | 871 | 1,864 | 1,633 | |||||||||
Adjusted EBITDA attributable to noncontrolling interests | (7) | (4) | (14) | (6) | |||||||||
Adjusted EBITDA attributable to MPLX LP | 920 | 867 | 1,850 | 1,627 | |||||||||
Deferred revenue impacts | 9 | 2 | 17 | 11 | |||||||||
Net interest and other financial costs | (157) | (136) | (315) | (250) | |||||||||
Maintenance capital expenditures | (34) | (33) | (53) | (58) | |||||||||
Equity method investment capital expenditures paid out | (5) | (5) | (9) | (16) | |||||||||
Other | 8 | — | 8 | — | |||||||||
DCF attributable to MPLX LP | 741 | 695 | 1,498 | 1,314 | |||||||||
Preferred unit distributions | (42) | (20) | (62) | (36) | |||||||||
DCF attributable to GP and LP unitholders | 699 | 675 | 1,436 | 1,278 | |||||||||
Series B preferred unit distributions | 21 | — | 21 | — | |||||||||
Adjusted DCF attributable to GP and LP unitholders | $ | 720 | $ | 675 | $ | 1,457 | $ | 1,278 | |||||
(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. |
Capital Expenditures (unaudited) | |||||||||||||
Three Months Ended June 30 |
Six Months Ended June 30 | ||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||
Capital Expenditures: | |||||||||||||
Maintenance | $ | 34 | $ | 33 | $ | 53 | $ | 58 | |||||
Growth | 383 | 499 | 747 | 924 | |||||||||
Total capital expenditures | 417 | 532 | 800 | 982 | |||||||||
Less: Decrease in capital accruals | (11) | 121 | (85) | 115 | |||||||||
Asset retirement expenditures | 1 | 4 | 1 | 5 | |||||||||
Additions to property, plant and equipment | 427 | 407 | 884 | 862 | |||||||||
Investments in unconsolidated affiliates | 182 | 74 | 310 | 112 | |||||||||
Acquisitions | (5) | — | (6) | — | |||||||||
Total capital expenditures and acquisitions | 604 | $ | 481 | $ | 1,188 | $ | 974 | ||||||
Less: Maintenance capital expenditures | 34 | 33 | 53 | 58 | |||||||||
Acquisitions | (5) | — | (6) | — | |||||||||
Total growth capital expenditures(a) | $ | 575 | $ | 448 | $ | 1,141 | $ | 916 | |||||
(a) | Amount excludes contributions from noncontrolling interests of $94 million and $5 million for the six months ended June 30, 2019 and 2018, respectively, as reflected in the financing section of our statement of cash flows and zero and $4 million for the three months ended June 30, 2019 and 2018, respectively. |
View original content:http://www.prnewswire.com/news-releases/mplx-lp-reports-second-quarter-2019-financial-results-300894828.html
SOURCE MPLX LP
FINDLAY, Ohio, Aug. 1, 2019 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported net income of $1.1 billion, or $1.66 per diluted share, for the second quarter 2019 compared to $1.1 billion, or $2.27 per diluted share, for the second quarter of 2018. Excluding adjustments shown in the accompanying earnings release tables, second quarter 2019 adjusted net income was $1.1 billion, or $1.73 per diluted share, compared to $1.1 billion, or $2.29 per diluted share, for the second quarter of 2018.
MPC returned $852 million of capital to shareholders during the second quarter of 2019, including $500 million in share repurchases.
"This quarter we executed across our integrated business and progressed many strategic initiatives," said Gary R. Heminger, chairman and chief executive officer. "Our retail business, comprised of Speedway and our direct dealer network, had an exceptional quarter and demonstrated its ability to capture value. We simplified our midstream structure into one public company to high-grade commercial opportunities and progressed an impressive slate of high-return projects that are expected to enhance integration across our system. Lastly, today we also highlighted our continued focus on portfolio optimization, which could include asset divestitures to strategically streamline our integrated asset base.
"We are confident that strengthening business fundamentals throughout the year and the competitive advantages of our integrated business model will both support a growing cash flow profile," said Heminger.
Synergies
MPC realized $270 million of synergies in the second quarter. Some examples of realized synergies include: approximately $60 million of turnaround savings related to lower spending and incremental earnings from completing maintenance under budget and ahead of schedule, approximately $35 million from leveraging scale and logistics assets to optimize Canadian and Bakken supply sources, and approximately $10 million from improved catcracker yields at the company's Los Angeles refinery.
"Our team's impressive execution this quarter led to strong realized synergies," said Heminger. "Combined with our first quarter results, we have realized $403 million of synergies year to date. Our progress gives us great confidence in achieving our target of up to $600 million of annual gross run-rate synergies by year-end 2019 and $1.4 billion by the end of 2021."
Segment Results
In the second quarter of 2019, total income from operations was $2.0 billion compared to $1.7 billion for the second quarter of 2018. Adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) was $3.2 billion in the second quarter of 2019 compared to $2.3 billion for the same quarter last year. Adjusted EBITDA excludes refining planned turnaround costs of $237 million in the second quarter of 2019 and $62 million in the second quarter of 2018.
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
Income from Operations by Segment | |||||||
Refining & Marketing | $ | 906 | $ | 1,025 | |||
Retail | 493 | 159 | |||||
Midstream | 878 | 617 | |||||
Items not allocated to segments: | |||||||
Corporate and other unallocated items | (179) | (81) | |||||
Transaction-related costs | (34) | (10) | |||||
Litigation | (22) | — | |||||
Impairments | — | 1 | |||||
Income from operations | $ | 2,042 | $ | 1,711 |
Midstream
Midstream segment income from operations, which primarily reflects the results of MPLX LP (NYSE: MPLX) and Andeavor Logistics (ANDX), was $878 million in the second quarter of 2019, compared with $617 million for the second quarter of 2018. The increase was due to contributions of $223 million from ANDX and a $38 million increase driven primarily by growth across MPLX's businesses. Segment EBITDA was $1.2 billion in the second quarter 2019 versus $808 million for the same quarter last year.
Retail
Retail segment income from operations was $493 million in the second quarter of 2019, compared with $159 million in the second quarter of 2018. The increase in earnings was largely related to the addition of the legacy Andeavor retail operations and higher fuel and merchandise margin contributions across the legacy Speedway system. Segment EBITDA was $623 million in the second quarter 2019 versus $232 million for the same quarter last year.
Retail fuel margin increased to 26.7 cents per gallon in the second quarter of 2019 from 16.5 cents per gallon in the second quarter of 2018. Same-store merchandise sales increased by 6.3 percent year-over-year and same-store gasoline sales volume decreased by 2.4 percent year-over-year.
Refining & Marketing (R&M)
R&M segment income from operations was $906 million in the second quarter of 2019 compared with $1.0 billion in the same quarter of 2018. The year-over-year decrease was primarily driven by narrower crude differentials and lower product realizations. R&M margin was $15.24 per barrel for the quarter with a clean product yield of 82 percent.
Segment adjusted EBITDA was $1.6 billion in the second quarter of 2019 versus $1.3 billion for the same quarter last year. Segment adjusted EBITDA excludes refinery planned turnaround costs which totaled $237 million in the second quarter of 2019, as the company completed maintenance work at its Garyville, Los Angeles, and Martinez refineries. This compares to $62 million of turnaround related work in the second quarter of 2018.
Refinery capacity utilization was 97 percent, resulting in total throughputs of 3.1 million barrels per day for the second quarter, which was 1.1 million barrels per day higher than the throughput for the second quarter of last year. The increase was primarily due to the addition of the Andeavor refineries.
Items Not Allocated to Segments and Other
Items not allocated to segments totaled $235 million of expenses in the second quarter of 2019 compared to $90 million in the second quarter of 2018. Second quarter 2019 results include $34 million of transaction-related expenses, $22 million of litigation charges, and the inclusion of legacy Andeavor corporate costs.
Strong Financial Position and Liquidity
As of June 30, 2019, the company had $1.2 billion in cash and cash equivalents (excluding MPLX and ANDX's cash and cash equivalents of $7 million and $25 million, respectively), approximately $5 billion available under a revolving credit agreement, $1 billion available under a 364-day bank revolving credit facility and $750 million available under its trade receivables securitization facility.
Strategic Update
"This quarter saw significant advancement of strategic initiatives that we expect to enhance the strength and cash generation of our integrated model," said Heminger.
MPC combined its two midstream businesses, MPLX and ANDX, to simplify its midstream structure into one public company to high-grade commercial opportunities. At the same time, the company progressed numerous high-return projects that are expected to advance its strategy of creating integrated crude oil and natural gas systems from the Permian Basin to the U.S. Gulf Coast.
During the quarter, MPLX announced a final investment decision on the Whistler natural gas pipeline. MPLX also signed definitive agreements on the Wink-to-Webster crude oil pipeline, in which it is expected to have an equity interest. The Gray Oak Pipeline, in which MPC has a 25 percent equity interest, remains on schedule and is expected to be placed in service in the fourth quarter of 2019. These pipelines will help connect growing domestic production with global demand while also providing refining value to MPC's integrated business.
In the retail segment, Speedway continues to expand its brand through store conversions. As of June 30, 2019, Speedway had completed 237 store conversions in 2019, bringing the total number of conversions since the combination with Andeavor to 407. The company remains on track to complete 700 total cumulative store conversions by the end of 2019 including locations in the Southwest and on the West Coast. In July 2019, Speedway closed on its acquisition of 33 NOCO Express convenience stores in the Buffalo, New York area. The acquisition further expands Speedway's brand presence in this region while supporting MPC's Midwest product placement strategy and builds upon prior investments to maximize refinery utilization.
MPC also continues to expand its presence in Mexico. In addition to expanding its refined product distribution into this region, the company now has 155 ARCO stations in Mexico as of June 30, 2019, with plans to continue growing its brand. These stores provide additional product outlets and enhanced integration with the refining business.
In anticipation of the expected favorable uplift from the International Maritime Organization low-sulfur marine fuel rule, MPC has positioned its integrated business to optimize around changing market dynamics associated with the bunker fuel regulation change in 2020. The company's preparations have included resid destruction strategies and bunker blending logistics capabilities.
During the quarter, the company progressed the completion of its Garyville crude revamp and coker drum replacement projects. The crude project is expected to be completed by the end of 2019. The coker project is expected to increase unit capacity by approximately 14 percent and remains on track to be completed in two phases, fourth quarter of 2019 and first quarter of 2020. On the logistics side, the company finalized plans to optimize its coker feed and resid processing capabilities between refineries and ensured readiness of its blending and storage capabilities near its key coastal export facilities.
Lastly, the company highlighted its continued focus on portfolio optimization, which could include asset divestitures. Proceeds from any divestitures would be used for general purposes, such as investments in high-return projects as well as debt reduction.
Third Quarter 2019 Outlook | |||
Refining & Marketing Segment: | |||
Refining operating costs per barrel(a)(b) | $ | 5.90 | |
Distribution costs (in millions)(a) | $ | 1,300 | |
Refining planned turnaround costs (in millions)(a) | $ | 155 | |
Depreciation and amortization (in millions)(a) | $ | 420 | |
Refinery throughputs (mbpd): | |||
Crude oil refined | 2,900 | ||
Other charge and blendstocks | 150 | ||
Total | 3,050 | ||
(a) | We revised our Refining & Marketing segment supplemental reporting in the second quarter. Costs formerly included in MPC's direct operating costs category are now reported in three categories: operating costs, planned turnaround costs, and depreciation and amortization. We also report distribution costs which are primarily related to transportation and marketing of refined products, including fees paid to MPLX and ANDX. |
(b) | Includes refining major maintenance and operating costs. Excludes turnaround and depreciation and amortization expenses. |
Retail Segment: | Range | ||||||
Speedway fuel sales (millions of gallons) | 2,525 | 2,675 | |||||
Merchandise sales (in $ millions) | 1,625 | 1,725 | |||||
Corporate and unallocated items (in $ millions) | 190 |
Conference Call
At 9:30 a.m. EDT today, MPC will hold a conference call and webcast to discuss the reported results and provide an update on company operations. Interested parties may listen by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2019 Second-Quarter Financial Results" link. A replay of the webcast will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, will also be available online prior to the conference call and webcast at https://www.marathonpetroleum.com.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with more than 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company which owns and operates gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure. More information is available at www.marathonpetroleum.com.
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Taryn Erie, Manager, Investor Relations
Doug Wendt, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Communications (419) 421-2521
Jamal Kheiry, Manager, Communications (419) 421-3312
References to Earnings and Defined Terms
References to earnings mean net income attributable to MPC from the statements of income. Unless otherwise indicated, references to earnings and earnings per share are MPC's share after excluding amounts attributable to noncontrolling interests. Discretionary free cash flow is defined as operating cash flow less maintenance and regulatory capital.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation (MPC). These forward-looking statements relate to, among other things, MPC's acquisition of Andeavor and include expectations, estimates and projections concerning the business and operations, strategy and value creation plans of MPC. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "project," "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 MPC's actual results to differ materially from those implied in the forward-looking statements include: 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 LP (MPLX), including the risk that anticipated opportunities and any other synergies from or anticipated benefits of the transaction may not be fully realized or may take longer to realize than expected, including whether the transaction will be accretive within the expected timeframe or at all, or disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; the ability to complete any divestitures on commercially reasonable terms and/or within the expected timeframe, and the effects of any such divestitures on the business, financial condition, results of operations and cash flows; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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 or 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 any common stock repurchases; the adequacy of capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute business plans and to effect any share repurchases or dividend increases, including within the expected timeframe; 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, filed with the SEC. Copies of MPC's Form 10-K are available on the SEC website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.
We have based our forward-looking statements on our current expectations, estimates and projections about our 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.
Consolidated Statements of Income (Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions, except per-share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Revenues and other income: | |||||||||||||||
Sales and other operating revenues | $ | 33,547 | $ | 22,317 | $ | 61,814 | $ | 41,183 | |||||||
Income from equity method investments | 107 | 80 | 206 | 166 | |||||||||||
Net gain on disposal of assets | 4 | 3 | 218 | 5 | |||||||||||
Other income | 30 | 45 | 65 | 75 | |||||||||||
Total revenues and other income | 33,688 | 22,445 | 62,303 | 41,429 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of revenues (excludes items below) | 29,682 | 19,655 | 55,642 | 37,166 | |||||||||||
Depreciation and amortization | 886 | 533 | 1,805 | 1,061 | |||||||||||
Selling, general and administrative expenses | 904 | 424 | 1,785 | 826 | |||||||||||
Other taxes | 174 | 122 | 360 | 225 | |||||||||||
Total costs and expenses | 31,646 | 20,734 | 59,592 | 39,278 | |||||||||||
Income from operations | 2,042 | 1,711 | 2,711 | 2,151 | |||||||||||
Net interest and other financial costs | 322 | 195 | 628 | 378 | |||||||||||
Income before income taxes | 1,720 | 1,516 | 2,083 | 1,773 | |||||||||||
Provision for income taxes | 353 | 281 | 457 | 303 | |||||||||||
Net income | 1,367 | 1,235 | 1,626 | 1,470 | |||||||||||
Less net income attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 21 | 20 | 41 | 36 | |||||||||||
Noncontrolling interests | 240 | 160 | 486 | 342 | |||||||||||
Net income attributable to MPC | $ | 1,106 | $ | 1,055 | $ | 1,099 | $ | 1,092 | |||||||
Per-share data | |||||||||||||||
Basic: | |||||||||||||||
Net income attributable to MPC per share | $ | 1.67 | $ | 2.30 | $ | 1.65 | $ | 2.34 | |||||||
Weighted average shares: | 662 | 459 | 667 | 467 | |||||||||||
Diluted: | |||||||||||||||
Net income attributable to MPC per share | $ | 1.66 | $ | 2.27 | $ | 1.63 | $ | 2.31 | |||||||
Weighted average shares: | 666 | 464 | 672 | 472 | |||||||||||
Income Summary (Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | 2019(a) | 2018 | 2019(a) | 2018 | |||||||||||
Income from Operations by segment | |||||||||||||||
Refining & Marketing | $ | 906 | $ | 1,025 | $ | 572 | $ | 892 | |||||||
Retail | 493 | 159 | 663 | 254 | |||||||||||
Midstream | 878 | 617 | 1,786 | 1,184 | |||||||||||
Items not allocated to segments: | |||||||||||||||
Corporate and other unallocated items | (179) | (81) | (370) | (170) | |||||||||||
Capline restructuring gain | — | — | 207 | — | |||||||||||
Transaction-related costs(b) | (34) | (10) | (125) | (10) | |||||||||||
Litigation | (22) | — | (22) | — | |||||||||||
Impairments | — | 1 | — | 1 | |||||||||||
Income from operations | 2,042 | 1,711 | 2,711 | 2,151 | |||||||||||
Net interest and other financial costs | 322 | 195 | 628 | 378 | |||||||||||
Income before income taxes | 1,720 | 1,516 | 2,083 | 1,773 | |||||||||||
Provision for income taxes | 353 | 281 | 457 | 303 | |||||||||||
Net income | 1,367 | 1,235 | 1,626 | 1,470 | |||||||||||
Less net income attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 21 | 20 | 41 | 36 | |||||||||||
Noncontrolling interests | 240 | 160 | 486 | 342 | |||||||||||
Net income attributable to MPC | $ | 1,106 | $ | 1,055 | $ | 1,099 | $ | 1,092 | |||||||
(a) | Includes the results of Andeavor from the October 1, 2018 acquisition date forward. |
(b) | Includes costs related to the Andeavor acquisition including financial advisor and legal fees, employee severance, and other expenses. |
Capital Expenditures and Investments (Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | 2019(a) | 2018 | 2019(a) | 2018 | |||||||||||
Refining & Marketing | $ | 430 | $ | 196 | $ | 824 | $ | 387 | |||||||
Retail | 120 | 88 | 193 | 127 | |||||||||||
Midstream | 814 | 601 | 1,637 | 1,083 | |||||||||||
Corporate and Other(b) | 38 | 33 | 79 | 69 | |||||||||||
Total | $ | 1,402 | $ | 918 | $ | 2,733 | $ | 1,666 | |||||||
(a) | Includes the results of Andeavor from the October 1, 2018 acquisition date forward. |
(b) | Includes capitalized interest of $34 million, $16 million, $65 million and $34 million, respectively. |
Refining & Marketing Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Refining & Marketing margin per barrel(a) | $ | 15.24 | $ | 15.40 | $ | 13.23 | $ | 13.08 | |||||||
Less: | |||||||||||||||
Refining operating costs per barrel(b) | 5.35 | 4.19 | 5.47 | 4.72 | |||||||||||
Distribution costs per barrel(c) | 4.48 | 4.17 | 4.56 | 3.93 | |||||||||||
Other per barrel(d) | (0.04) | (0.18) | (0.06) | (0.14) | |||||||||||
Refining planned turnaround costs per barrel | 0.83 | 0.33 | 0.75 | 0.66 | |||||||||||
Depreciation and amortization per barrel | 1.44 | 1.36 | 1.49 | 1.41 | |||||||||||
Refining & Marketing segment income per barrel | $ | 3.18 | $ | 5.53 | $ | 1.02 | $ | 2.50 | |||||||
Refining & Marketing refined product sales volume (mbpd)(e) | 3,814 | 2,392 | 3,742 | 2,327 | |||||||||||
Crude oil capacity utilization (percent)(f) | 97 | 100 | 96 | 96 | |||||||||||
Refinery throughputs (mbpd):(g) | |||||||||||||||
Crude oil refined | 2,937 | 1,878 | 2,902 | 1,812 | |||||||||||
Other charge and blendstocks | 198 | 160 | 207 | 160 | |||||||||||
Total | 3,135 | 2,038 | 3,109 | 1,972 | |||||||||||
Sour crude oil throughput (percent) | 47 | 55 | 49 | 53 | |||||||||||
Sweet crude oil throughput (percent) | 53 | 45 | 51 | 47 | |||||||||||
Refined product yields (mbpd):(g) | |||||||||||||||
Gasoline | 1,528 | 970 | 1,531 | 943 | |||||||||||
Distillates | 1,080 | 691 | 1,086 | 651 | |||||||||||
Propane | 57 | 40 | 55 | 35 | |||||||||||
Feedstocks and special products | 370 | 278 | 350 | 283 | |||||||||||
Heavy fuel oil | 51 | 27 | 48 | 31 | |||||||||||
Asphalt | 83 | 72 | 81 | 65 | |||||||||||
Total | 3,169 | 2,078 | 3,151 | 2,008 | |||||||||||
(a) | Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. |
(b) | Includes refining major maintenance and operating costs. Excludes turnaround and depreciation and amortization expense. |
(c) | Includes fees paid to our two sponsored master limited partnerships, MPLX and ANDX, on a per barrel throughput basis, these fees were $2.80, $3.21, $2.81 and $3.01, respectively. Excludes depreciation and amortization expense. |
(d) | Includes income from equity method investments, net gain on disposal of assets and other income. |
(e) | Includes intersegment sales. |
(f) | Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance and other normal operating activities. |
(g) | Excludes inter-refinery volumes of 102 mbpd, 64 mbpd, 88 mbpd and 53 mbpd, respectively. |
Refining & Marketing Operating Statistics by Region (Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Gulf Coast | |||||||||||||||
Refining & Marketing margin dollars per barrel(a) | $ | 9.32 | $ | N/A | $ | 8.58 | $ | N/A | |||||||
Refining operating costs per barrel(b) | $ | 4.03 | $ | 3.69 | $ | 3.95 | 4.47 | ||||||||
Refining planned turnaround costs per barrel | $ | 0.23 | $ | 0.08 | $ | 0.20 | 0.72 | ||||||||
Refining depreciation and amortization per barrel | $ | 1.03 | $ | 0.99 | $ | 1.08 | 1.04 | ||||||||
Refinery throughputs (mbpd):(c) | |||||||||||||||
Crude oil refined | 1,154 | 1,156 | 1,162 | 1,106 | |||||||||||
Other charge and blendstocks | 177 | 190 | 173 | 179 | |||||||||||
Total | 1,331 | 1,346 | 1,335 | 1,285 | |||||||||||
Sour crude oil throughput (percent) | 59 | 65 | 61 | 63 | |||||||||||
Sweet crude oil throughput (percent) | 41 | 35 | 39 | 37 | |||||||||||
Refined product yields (mbpd):(c) | |||||||||||||||
Gasoline | 564 | 570 | 569 | 552 | |||||||||||
Distillates | 440 | 458 | 443 | 410 | |||||||||||
Propane | 29 | 26 | 28 | 22 | |||||||||||
Feedstocks and special products | 293 | 290 | 293 | 294 | |||||||||||
Heavy fuel oil | 15 | 16 | 14 | 20 | |||||||||||
Asphalt | 21 | 23 | 21 | 20 | |||||||||||
Total | 1,362 | 1,383 | 1,368 | 1,318 | |||||||||||
Mid-Continent | |||||||||||||||
Refining & Marketing margin per barrel(a) | $ | 20.21 | $ | N/A | $ | 17.84 | $ | N/A | |||||||
Refining operating costs per barrel(b) | $ | 4.82 | $ | 4.70 | $ | 5.21 | $ | 4.80 | |||||||
Refining planned turnaround costs per barrel | $ | 0.27 | $ | 0.76 | $ | 0.47 | $ | 0.51 | |||||||
Refining depreciation and amortization per barrel | $ | 1.46 | $ | 1.66 | $ | 1.55 | $ | 1.71 | |||||||
Refinery throughputs (mbpd):(c) | |||||||||||||||
Crude oil refined | 1,155 | 722 | 1,106 | 706 | |||||||||||
Other charge and blendstocks | 48 | 34 | 52 | 34 | |||||||||||
Total | 1,203 | 756 | 1,158 | 740 | |||||||||||
Sour crude oil throughput (percent) | 28 | 39 | 27 | 38 | |||||||||||
Sweet crude oil throughput (percent) | 72 | 61 | 73 | 62 | |||||||||||
Refined product yields (mbpd):(c) | |||||||||||||||
Gasoline | 626 | 400 | 612 | 391 | |||||||||||
Distillates | 412 | 233 | 400 | 241 | |||||||||||
Propane | 20 | 14 | 19 | 13 | |||||||||||
Feedstocks and special products | 71 | 52 | 55 | 42 | |||||||||||
Heavy fuel oil | 16 | 11 | 16 | 11 | |||||||||||
Asphalt | 61 | 49 | 59 | 45 | |||||||||||
Total | 1,206 | 759 | 1,161 | 743 | |||||||||||
West Coast | |||||||||||||||
Refining & Marketing margin per barrel(a) | $ | 17.77 | $ | N/A | $ | 14.33 | $ | N/A | |||||||
Refining operating costs per barrel(b) | $ | 8.01 | $ | — | $ | 8.10 | $ | — | |||||||
Refining planned turnaround costs per barrel | $ | 2.80 | $ | — | $ | 2.18 | $ | — | |||||||
Refining depreciation and amortization per barrel | $ | 1.29 | $ | — | $ | 1.31 | $ | — | |||||||
Refinery throughputs (mbpd):(c) | |||||||||||||||
Crude oil refined | 628 | — | 634 | — | |||||||||||
Other charge and blendstocks | 75 | — | 70 | — | |||||||||||
Total | 703 | — | 704 | — | |||||||||||
Sour crude oil throughput (percent) | 58 | — | 66 | — | |||||||||||
Sweet crude oil throughput (percent) | 42 | — | 34 | — | |||||||||||
Refined product yields (mbpd):(c) | |||||||||||||||
Gasoline | 338 | — | 350 | — | |||||||||||
Distillates | 228 | — | 243 | — | |||||||||||
Propane | 8 | — | 8 | — | |||||||||||
Feedstocks and special products | 104 | — | 84 | — | |||||||||||
Heavy fuel oil | 24 | — | 24 | — | |||||||||||
Asphalt | 1 | — | 1 | — | |||||||||||
Total | 703 | — | 710 | — | |||||||||||
(a) | Sales revenue less cost of refinery inputs and purchased products, divided by refinery throughputs, excluding inter-refinery transfer volumes. |
(b) | Includes refining major maintenance and operating costs. Excludes turnaround and depreciation and amortization expense. |
(c) | Includes inter-refinery transfer volumes. |
Retail Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Speedway fuel sales (millions of gallons) | 1,957 | 1,450 | 3,828 | 2,843 | |||||||||||
Direct dealer fuel sales (millions of gallons) | 646 | N/A | 1,276 | N/A | |||||||||||
Retail fuel margin (dollars per gallon)(a) | $ | 0.2666 | $ | 0.1645 | $ | 0.2200 | $ | 0.1604 | |||||||
Merchandise sales (in millions) | $ | 1,620 | $ | 1,285 | $ | 3,033 | $ | 2,414 | |||||||
Merchandise margin (in millions) | $ | 471 | $ | 366 | $ | 878 | $ | 685 | |||||||
Merchandise margin percent | 29.1 | % | 28.5 | % | 29.0 | % | 28.4 | % | |||||||
Same store gasoline sales volume (period over period)(b) | (2.4) | % | (2.6) | % | (2.8) | % | (2.1) | % | |||||||
Same store merchandise sales (period over period)(b)(c) | 6.3 | % | 2.9 | % | 5.9 | % | 2.6 | % | |||||||
Total convenience stores at period-end | 3,913 | 2,744 | |||||||||||||
Direct dealer locations at period-end | 1,062 | N/A | |||||||||||||
(a) | Includes bankcard processing fees (as applicable). |
(b) | Same store comparison includes only locations owned at least 13 months. |
(c) | Excludes cigarettes. |
Midstream Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Pipeline throughputs (mbpd)(a) | 5,178 | 3,789 | 5,214 | 3,625 | |||||||||||
Terminal throughput (mbpd) | 3,287 | 1,485 | 3,254 | 1,465 | |||||||||||
Gathering system throughput (million cubic feet per day)(b) | 5,948 | 4,295 | 5,950 | 4,233 | |||||||||||
Natural gas processed (million cubic feet per day)(b) | 8,535 | 6,850 | 8,528 | 6,740 | |||||||||||
C2 (ethane) + NGLs fractionated (mbpd)(b) | 520 | 439 | 517 | 432 | |||||||||||
(a) | Includes common-carrier pipelines and private pipelines contributed to MPLX. Excludes equity method affiliate pipeline volumes. |
(b) | Includes amounts related to unconsolidated equity method investments on a 100% basis. |
Select Financial Data (Unaudited) | |||||||
(In millions) | June 30, | March 31 | |||||
Cash and cash equivalents | $ | 1,247 | $ | 877 | |||
MPC debt | 9,142 | 9,150 | |||||
MPLX debt | 14,036 | 13,833 | |||||
ANDX debt | 5,229 | 5,132 | |||||
Total consolidated debt | 28,407 | 28,115 | |||||
Redeemable noncontrolling interest | 1,005 | 1,004 | |||||
Equity | 43,061 | 42,858 | |||||
Shares outstanding | 660 | 667 |
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cash provided by operations | $ | 2,622 | $ | 2,386 | $ | 4,245 | $ | 2,249 | |||||||
Dividends paid per share | $ | 0.53 | $ | 0.46 | $ | 1.06 | $ | 0.92 |
Non-GAAP Financial Measures
Management uses certain financial measures to evaluate our operating performance that are calculated and presented on the basis of methodologies other than in accordance with GAAP. We believe these non-GAAP financial measures are useful to investors and analysts to assess our ongoing financial performance because, when reconciled to their most comparable GAAP financial measures, they provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies. The non-GAAP financial measures we use are as follows:
Adjusted Net Income Attributable to MPC
Adjusted net income attributable to MPC is defined as net income attributable to MPC excluding the items in the table below, along with their related income tax effect. We have excluded these items because we believe that they are not indicative of our core operating performance and that their exclusion results in an important measure of our ongoing financial performance to better assess our underlying business results and trends.
Adjusted Diluted Earnings Per Share
Adjusted diluted earnings per share is defined as adjusted net income attributable to MPC divided by the number of weighted-average shares outstanding in the applicable period, assuming dilution.
Reconciliation of Net Income Attributable to MPC to Adjusted Net Income Attributable to MPC | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income attributable to MPC | $ | 1,106 | $ | 1,055 | $ | 1,099 | $ | 1,092 | |||||||
Pre-tax adjustments: | |||||||||||||||
Capline restructuring gain | — | — | (207) | — | |||||||||||
Transaction-related costs | 34 | 10 | 125 | 10 | |||||||||||
Litigation | 22 | — | 22 | — | |||||||||||
Impairments | — | (1) | — | (1) | |||||||||||
Out of period tax adjustment | — | — | 36 | — | |||||||||||
Tax impact of adjustments(a) | (14) | (2) | 14 | (2) | |||||||||||
Adjusted net income attributable to MPC | $ | 1,148 | $ | 1,062 | $ | 1,089 | $ | 1,099 | |||||||
Diluted earnings per share | $ | 1.66 | $ | 2.27 | $ | 1.63 | $ | 2.31 | |||||||
Adjusted diluted earnings per share(b) | $ | 1.73 | $ | 2.29 | $ | 1.62 | $ | 2.33 | |||||||
(a) | We generally tax effect taxable adjustments to reported earnings using a combined federal and state statutory rate of approximately 24 percent. |
(b) | Weighted-average diluted shares outstanding and income allocated to participating securities, if applicable, in the adjusted earnings per share calculation are the same as those used in the GAAP diluted earnings per share calculation. |
Adjusted EBITDA & Segment Adjusted EBITDA
Adjusted EBITDA and Segment Adjusted EBITDA represent earnings before net interest and other financial costs, income taxes, depreciation and amortization expense as well as adjustments to exclude refining turnaround costs and items not allocated to segment results. We believe these non-GAAP financial measures are useful to investors and analysts to analyze and compare our operating performance between periods by excluding items that do not reflect the core operating results of our business or in the case of turnarounds, which provide benefits over multiple years. We also believe that excluding turnaround costs from this metric is useful for comparability to other companies as certain of our competitors defer these costs and amortize them between turnarounds. Adjusted EBITDA and Segment Adjusted EBITDA should not be considered as a substitute for, or superior to segment income (loss) from operations, net income attributable to MPC, income before income taxes, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA and Segment Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
Reconciliation of Net Income Attributable to MPC to Adjusted EBITDA | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income attributable to MPC | $ | 1,106 | $ | 1,055 | $ | 1,099 | $ | 1,092 | |||||||
Plus (Less): | |||||||||||||||
Net interest and other financial costs | 322 | 195 | 628 | 378 | |||||||||||
Net income attributable to noncontrolling interests | 261 | 180 | 527 | 378 | |||||||||||
Provision for income taxes | 353 | 281 | 457 | 303 | |||||||||||
Depreciation and amortization | 886 | 533 | 1,805 | 1,061 | |||||||||||
Refining planned turnaround costs | 237 | 62 | 423 | 235 | |||||||||||
Capline restructuring gain | — | — | (207) | — | |||||||||||
Transaction-related costs | 34 | 10 | 125 | 10 | |||||||||||
Litigation | 22 | — | 22 | — | |||||||||||
Impairments | — | (1) | — | (1) | |||||||||||
Adjusted EBITDA | $ | 3,221 | $ | 2,315 | $ | 4,879 | $ | 3,456 |
Reconciliation of Segment Income From Operations to Segment Adjusted EBITDA and Adjusted EBITDA | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Refining & Marketing Segment | |||||||||||||||
Segment income from operations | $ | 906 | $ | 1,025 | $ | 572 | $ | 892 | |||||||
Add: Depreciation and amortization | 411 | 252 | 838 | 504 | |||||||||||
Refining planned turnaround costs | 237 | 62 | 423 | 235 | |||||||||||
Segment Adjusted EBITDA | $ | 1,554 | $ | 1,339 | $ | 1,833 | $ | 1,631 | |||||||
Retail Segment | |||||||||||||||
Segment income from operations | $ | 493 | $ | 159 | $ | 663 | $ | 254 | |||||||
Add: Depreciation and amortization | 130 | 73 | 256 | 152 | |||||||||||
Segment EBITDA | $ | 623 | $ | 232 | $ | 919 | $ | 406 | |||||||
Midstream Segment | |||||||||||||||
Segment income from operations | $ | 878 | $ | 617 | $ | 1,786 | $ | 1,184 | |||||||
Add: Depreciation and amortization | 318 | 191 | 625 | 372 | |||||||||||
Segment EBITDA | $ | 1,196 | $ | 808 | $ | 2,411 | $ | 1,556 | |||||||
Segment Adjusted EBITDA | $ | 3,373 | $ | 2,379 | $ | 5,163 | $ | 3,593 | |||||||
Corporate and other unallocated items | (179) | (81) | (370) | (170) | |||||||||||
Add: Depreciation and amortization | 27 | 17 | 86 | 33 | |||||||||||
Adjusted EBITDA | $ | 3,221 | $ | 2,315 | $ | 4,879 | $ | 3,456 |
Refining & Marketing Margin
Refining margin is defined as sales revenue less the cost of refinery inputs and purchased products and excludes any LCM inventory market adjustment.
Reconciliation of Refining & Marketing Income from Operations to Refining & Marketing Margin | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Refining & Marketing income from operations | $ | 906 | $ | 1,025 | $ | 572 | $ | 892 | |||||||
Plus (Less): | |||||||||||||||
Refining operating costs(a) | 1,527 | 776 | 3,079 | 1,685 | |||||||||||
Refining depreciation and amortization | 368 | 235 | 755 | 471 | |||||||||||
Refining planned turnaround costs | 237 | 62 | 423 | 235 | |||||||||||
Distribution costs(b) | 1,277 | 774 | 2,567 | 1,403 | |||||||||||
Distribution depreciation and amortization | 43 | 17 | 83 | 33 | |||||||||||
Income from equity method investments | (3) | (4) | (4) | (7) | |||||||||||
Net gain on disposal of assets | — | (3) | (6) | (4) | |||||||||||
Other income | (8) | (27) | (22) | (39) | |||||||||||
Refining & Marketing margin | $ | 4,347 | $ | 2,855 | $ | 7,447 | $ | 4,669 | |||||||
Refining & Marketing margin by region: | |||||||||||||||
Gulf Coast | $ | 1,090 | $ | N/A | $ | 2,007 | $ | N/A | |||||||
Mid-Continent | 2,193 | N/A | 3,710 | N/A | |||||||||||
West Coast | 1,064 | N/A | 1,730 | N/A | |||||||||||
Refining & Marketing margin | $ | 4,347 | $ | N/A | $ | 7,447 | $ | N/A | |||||||
(a) | Includes refining major maintenance and operating costs. Excludes turnaround and depreciation and amortization expense. |
(b) | Includes fees paid to our two sponsored master limited partnerships, MPLX and ANDX, of $798 million, $596 million, $1,584 million and $1,074 million, respectively. Excludes depreciation and amortization expense. |
Retail Fuel Margin
Retail fuel margin is defined as the price paid by consumers or direct dealers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees (where applicable) and excluding any LCM inventory market adjustment.
Retail Merchandise Margin
Retail merchandise margin is defined as the price paid by consumers less the cost of merchandise.
Reconciliation of Retail Income from Operations to Retail Total Margin | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Retail income from operations | $ | 493 | $ | 159 | $ | 663 | $ | 254 | |||||||
Plus (Less): | |||||||||||||||
Operating, selling, general and administrative expenses | 597 | 401 | 1,180 | 785 | |||||||||||
Depreciation and amortization | 130 | 73 | 256 | 152 | |||||||||||
Income from equity method investments | (21) | (19) | (38) | (33) | |||||||||||
Net gain on disposal of assets | — | — | (2) | — | |||||||||||
Other income | (4) | (2) | (6) | (3) | |||||||||||
Retail total margin | $ | 1,195 | $ | 612 | $ | 2,053 | $ | 1,155 | |||||||
Retail total margin: | |||||||||||||||
Fuel margin | $ | 694 | $ | 239 | $ | 1,123 | $ | 456 | |||||||
Merchandise margin | 471 | 366 | 878 | 685 | |||||||||||
Other margin | 30 | 7 | 52 | 14 | |||||||||||
Retail total margin | $ | 1,195 | $ | 612 | $ | 2,053 | $ | 1,155 |
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-second-quarter-results-300894819.html
SOURCE Marathon Petroleum Corporation
FINDLAY, Ohio, July 30, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) today announced that the company has completed its acquisition of Andeavor Logistics LP (ANDX) in a unit-for-unit transaction (with a blended exchange ratio of 1.07 times) and assumption of approximately $5 billion of debt. As of this morning, ANDX ceased to be publicly traded and its common units discontinued trading on the New York Stock Exchange.
"We are pleased to close our acquisition of Andeavor Logistics today," said Gary R. Heminger, MPLX chairman and chief executive officer. "This transaction allows MPLX to further progress its strategic vision of creating a leading, large-scale, diversified midstream company anchored by fee-based cash flows."
ANDX unaffiliated common unitholders representing a majority of the common units held by unaffiliated holders submitted consents in favor of the transaction.
ANDX common unitholders will receive the MPLX quarterly cash distribution of $0.6675 per common unit for the second quarter 2019, payable on August 14, 2019, with respect to the MPLX common units issued in connection with the merger, and will not receive any future distributions from ANDX. Additionally, ANDX Series A Preferred unitholders will not receive any future distributions from ANDX, but instead will receive the semi-annual distribution payable August 15, 2019, on MPLX Series B Preferred units issued in connection with the merger.
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
Forward-Looking statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX). These forward-looking statements relate to, among other things, MPLX's acquisition of Andeavor Logistics LP (ANDX) and include expectations, estimates and projections concerning the business and operations, financial priorities and strategic plans of the combined entity. 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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: the risk that anticipated opportunities and any other synergies from or anticipated benefits of the ANDX acquisition may not be fully realized or may take longer to realize than expected, including whether the transaction will be accretive within the expected timeframe or at all; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDX; the amount and timing of future distributions; negative capital market conditions, including an increase of the current yield on common units; the ability to achieve strategic and financial objectives, including with respect to distribution coverage, future distribution levels, proposed projects and completed transactions; 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 Marathon Petroleum Corporation's (MPC) 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, filed with Securities and Exchange Commission (SEC).
We have based our forward-looking statements on our current expectations, estimates and projections about our 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.
View original content:http://www.prnewswire.com/news-releases/mplx-completes-acquisition-of-andeavor-logistics-300893108.html
SOURCE MPLX LP; Andeavor Logistics LP
DALLAS, July 25, 2019 /PRNewswire/ -- Alerian announced today that Andeavor Logistics (NYSE: ANDX) is expected to be removed from the Alerian Midstream Energy Index (AMNA), Alerian US Midstream Energy Index (AMUS), Alerian Midstream Energy Select Index (AMEI), Alerian MLP Index (AMZ), Alerian MLP Infrastructure Fund (AMZI), and Alerian MLP Equal Weight Index (AMZE) in a special rebalancing.
Special rebalancings are triggered by corporate actions such as mergers, bankruptcies, and liquidations. Andeavor Logistics will cease to trade due to its merger with MPLX (NYSE: MPLX). The rebalancing will take place after market close on Monday, July 29.
Each index will be rebalanced in accordance with its existing methodology. Constituent additions to and deletions from an index do not reflect an opinion by Alerian on the investment merits of the respective securities.
About Alerian
Alerian equips investors to make informed decisions about energy infrastructure and Master Limited Partnerships (MLPs). Its benchmarks are widely used by industry executives, investment professionals, research analysts, and national media to analyze relative performance. As of June 30, 2019, over $12 billion is directly tied to the Alerian Index Series through exchange-traded funds and notes, separately managed accounts, and structured products. Visit alerian.com to learn more.
View original content:http://www.prnewswire.com/news-releases/andeavor-logistics-expected-to-be-removed-from-the-alerian-index-series-300890808.html
SOURCE Alerian
FINDLAY, Ohio, July 22, 2019 /PRNewswire/ -- The board of directors of the general partner of MPLX LP (NYSE: MPLX) has declared a quarterly cash distribution of $0.6675 per common unit for the second quarter of 2019, or $2.67 on an annualized basis.
This represents an increase of $0.01 per unit, or 1.5 percent, over the first quarter 2019 distribution, and an increase of $0.04 per unit, or 6.4 percent, over the second quarter 2018 distribution. This is the 26th consecutive quarterly distribution increase and will be paid on Aug. 14, 2019, to common unitholders of record as of Aug. 5, 2019.
As previously announced, MPLX expects to close the acquisition of Andeavor Logistics LP (NYSE: ANDX) on July 30, 2019, subject to the satisfaction or waiver of the remaining customary closing conditions. Given the anticipated timing of the closing of the transaction, the parties expect that ANDX common unitholders will not receive any future distributions from ANDX, but instead will receive the second quarter 2019 distribution with respect to the MPLX common units expected to be issued in connection with the merger. Additionally, the parties expect that ANDX Series A Preferred unitholders will not receive any future distributions from ANDX, but instead will receive the semi-annual distribution payable August 15, 2019, on MPLX Series B Preferred units expected to be issued in connection with the Merger.
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100 percent of MPLX's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MPLX's distributions to non-United States investors are subject to federal income tax withholding at the highest applicable effective tax rate.
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 Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Hamish Banks (419) 421-2521
This communication contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX) and Andeavor Logistics LP (ANDX). These forward-looking statements relate to, among other things, the proposed acquisition of ANDX by MPLX and include expectations, estimates and projections concerning the business and operations, financial priorities and strategic plans of the combined entity. 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 companies' control and are difficult to predict. Factors that could cause MPLX's or ANDX's actual results to differ materially from those implied in the forward-looking statements include: the ability to complete the proposed transaction between MPLX and ANDX on the proposed terms and timetable; the ability to satisfy various conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain regulatory approvals for the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entity in connection with the consummation of the proposed transaction; the risk that anticipated opportunities and any other synergies from or anticipated benefits of the proposed transaction may not be fully realized or may take longer to realize than expected, including whether the proposed transaction will be accretive within the expected timeframe or at all; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDX or MPLX; the amount and timing of future distributions; negative capital market conditions, including an increase of the current yield on common units; the ability to achieve strategic and financial objectives, including with respect to distribution coverage, future distribution levels, proposed projects and completed transactions; 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 Marathon Petroleum Corporation's (MPC) obligations under MPLX's and ANDX'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 and ANDX's industry; risks related to MPC; and the factors set forth under the heading "Risk Factors" in MPLX's and ANDX's respective Annual Reports on Form 10-K for the year ended Dec. 31, 2018, filed with the Securities and Exchange Commission (SEC).
Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: 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 as set forth above related to the acquisition of ANDX by MPLX; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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 or 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 any common stock repurchases; the adequacy of capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute business plans and to effect any share repurchases or dividend increases, including within the expected timeframe; 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 or ANDX; 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, filed with the SEC.
We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed acquisition, MPLX and ANDX have filed relevant materials with the SEC, including MPLX's registration statement on Form S-4 that includes a definitive consent statement and a prospectus and was declared effective by the SEC on June 28, 2019. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE DEFINITIVE CONSENT STATEMENT AND PROSPECTUS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final consent statement/prospectus will be sent to unitholders of ANDX. Investors and security holders will be able to obtain these documents free of charge at the SEC's website, www.sec.gov, from ANDX at its website, http://ir.andeavorlogistics.com, or by contacting ANDX's Investor Relations at (419) 421-2414, or from MPLX at its website, http://ir.mplx.com, or by contacting MPLX's Investor Relations at (419) 421-2414.
Participants in Solicitation
MPLX, ANDX, MPC and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of consents in respect of the proposed transaction. Information concerning MPLX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, which was filed with the SEC on Feb. 28, 2019. Information concerning ANDX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, which was filed with the SEC on Feb. 28, 2019. Information concerning MPC's executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, which was filed with the SEC on Feb. 28, 2019. Information about MPC's directors is set forth in its Definitive Proxy Statement on Schedule 14A for its 2019 Annual Meeting of Shareholders, which was filed with the SEC on March 14, 2019. Investors and security holders will be able to obtain the documents free of charge from the sources indicated above, and with respect to MPC, from its website, https://www.marathonpetroleum.com/Investors/, or by contacting MPC's Investor Relations at (419) 421-2414. Additional information regarding the interests of such participants in the solicitation of consents in respect of the proposed transaction are included in the registration statement and consent statement/prospectus and other relevant materials filed with the SEC.
View original content:http://www.prnewswire.com/news-releases/mplx-lp-increases-quarterly-distribution-300888558.html
SOURCE MPLX LP
DALLAS, July 22, 2019 /PRNewswire/ -- Cushing® Asset Management, LP, and Swank Capital, LLC, and announce an upcoming interim change to the constituents of The Cushing® MLP Market Cap Index (the "Index"). On May 7, 2019, Index constituents Andeavor Logistics LP (NYSE: ANDX) and MPLX LP (NYSE: MPLX) and related entities entered into an Agreement and Plan of Merger ("Merger Agreement") that would result in ANDX common units ceasing to be publicly traded, subject to the approval of the holders of at least a majority of the ANDX common units. On June 28, 2019, ANDX publicly announced that entities holding a majority of common units of ANDX have agreed to deliver written consents approving the Merger Agreement and, accordingly, the merger may be completed as soon as July 30, 2019. Per the Index's methodology guide, this event will result in a constituent replacement. Accordingly, after the market closes on July 29, 2019, and effective on July 30, 2019, Black Stone Minerals, L.P. (NYSE: BSM) will replace ANDX as a constituent of the Index at ANDX's then-current weight.
There will be no changes to the remaining constituents of the Index due to this event.
ABOUT THE CUSHING® MLP MARKET CAP INDEX
The Cushing® MLP Market Cap Index provides a benchmark that is designed to track the performance of widely held midstream energy infrastructure companies, including master limited partnerships (MLPs) and non-MLP midstream corporations (each, a "Midstream Company" and collectively, "Midstream Companies"). The Index is weighted on a float-adjusted market capitalization basis, with the weight of each constituent capped at 7.5% at rebalance. The Index price level is calculated by S&P Dow Jones Indices while the constituents are selected from the entire universe of publicly traded Midstream Companies. The Cushing® MLP Market Cap Index is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "CMCI".
ABOUT CUSHING® ASSET MANAGEMENT AND SWANK CAPITAL
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts, providing active management in markets where inefficiencies exist.
Cushing is also dedicated to serving the needs of MLP and energy income investors by sponsoring a variety of industry benchmarks, including The Cushing® 30 MLP Index (Bloomberg Ticker: MLPX), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY) ), The Cushing® Energy Index (Bloomberg Ticker: CENI), The Cushing® Energy Supply Chain Index (Bloomberg Ticker: CSCI), The Cushing® Transportation Index (Bloomberg Ticker: CTRI) and The Cushing® Utility Index (Bloomberg Ticker: CUTI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Brian Atwood
214-692-6334
www.cushingasset.com
The Cushing® MLP Market Cap Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
CUSH-CMCI
View original content:http://www.prnewswire.com/news-releases/cushing-asset-management-and-swank-capital-announce-a-constituent-change-to-the-cushing-mlp-market-cap-index-300888298.html
SOURCE Cushing Asset Management, LP; Swank Capital, LLC
DALLAS, July 22, 2019 /PRNewswire/ -- Cushing® Asset Management, LP, and Swank Capital, LLC, announce an upcoming interim change to the constituents of The Cushing® 30 MLP Index (the "Index"). On May 7, 2019, Index constituents Andeavor Logistics LP (NYSE: ANDX) and MPLX LP (NYSE: MPLX) and related entities entered into an Agreement and Plan of Merger ("Merger Agreement") that would result in ANDX common units ceasing to be publicly traded, subject to the approval of the holders of at least a majority of the ANDX common units. On June 28, 2019, ANDX publicly announced that entities holding a majority of common units of ANDX have agreed to deliver written consents approving the Merger Agreement and, accordingly, the merger may be completed as soon as July 30, 2019. Per the Index's methodology guide, this event will result in a constituent replacement. Accordingly, after the market closes on July 29, 2019, and effective on July 30, 2019, TC PipeLines, LP (NYSE: TCP) will replace ANDX as a constituent of the Index at ANDX's then-current weight.
There will be no changes to the remaining constituents of the Index due to this event.
ABOUT THE CUSHING® 30 MLP INDEX
The Cushing® 30 MLP Index tracks the performance of 30 publicly traded midstream energy infrastructure companies, including master limited partnerships (MLPs) and non-MLP energy midstream corporations (each, a "Midstream Company" and collectively, "Midstream Companies"). Constituents of the Index are selected by using a formula-based proprietary valuation model developed by Cushing® Asset Management, LP to rank Midstream Companies for potential inclusion in the Index. The Index price level is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "MLPX".
ABOUT CUSHING® ASSET MANAGEMENT AND SWANK CAPITAL
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts, providing active management in markets where inefficiencies exist.
Cushing is also dedicated to serving the needs of MLP and energy income investors by sponsoring a variety of industry benchmarks, including The Cushing® MLP Market Cap Index (Bloomberg Ticker: CMCI), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY), The Cushing® Energy Index (Bloomberg Ticker: CENI), The Cushing® Energy Supply Chain Index (Bloomberg Ticker: CSCI), The Cushing® Transportation Index (Bloomberg Ticker: CTRI) and The Cushing® Utility Index (Bloomberg Ticker: CUTI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Brian Atwood
214-692-6334
www.cushingasset.com
The Cushing® 30 MLP Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Swank Capital, LLC, and Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
CUSH-MLPX
View original content:http://www.prnewswire.com/news-releases/cushing-asset-management-and-swank-capital-announce-a-constituent-change-to-the-cushing-30-mlp-index-300888299.html
SOURCE Cushing Asset Management, LP; Swank Capital, LLC
FINDLAY, Ohio, July 1, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call with analysts on Thursday, August 1, at 11 a.m. EDT to discuss 2019 second-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPLX's website at http://www.mplx.com and clicking on the "2019 Second-Quarter Financial Results" link. A replay of the webcast will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
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:
Kristina Kazarian (419) 421-2071
Media Contacts:
Hamish Banks (419) 421-2521
Jamal Kheiry (419) 421-3312
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SOURCE MPLX LP
FINDLAY, Ohio, June 28, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) and Andeavor Logistics LP (NYSE: ANDX) today announced that the Board of Directors of the general partner of ANDX has set June 28, 2019 as the record date for determining holders of ANDX common units entitled to execute and deliver written consents with respect to the proposed acquisition. The consent process will conclude on July 29, 2019.
ANDX's general partner and a subsidiary of Marathon Petroleum Corporation (NYSE: MPC), which together own approximately 64% of ANDX's common units, have delivered written consents adopting and approving in all respects the Agreement and Plan of Merger, dated as of May 7, 2019 (the "Merger Agreement") and the transactions contemplated thereby. The delivery of these consents is sufficient to adopt the Merger Agreement and approve the acquisition of ANDX by MPLX, without the receipt of written consent from any other holder of ANDX units.
MPLX expects the closing of the acquisition to occur on July 30, 2019, subject to the satisfaction or waiver of the remaining customary conditions to closing. Given the anticipated timing of the closing of the transaction, the parties expect that ANDX common unitholders will not receive any future distributions from ANDX but instead will receive a second quarter 2019 distribution as and when declared by the Board of Directors of the general partner of MPLX (the "MPLX Board") with respect to the MPLX common units expected to be issued in connection with the merger. Additionally, the parties expect that ANDX Series A Preferred unitholders will not receive any future distributions from ANDX, but instead will receive the semi-annual distribution payable August 15, 2019, when declared by the MPLX Board, on MPLX Series B Preferred units expected to be issued in connection with the Merger.
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
About Andeavor Logistics LP
Andeavor Logistics LP is a fee-based, full-service, diversified midstream logistics company, with integrated assets across the western and mid-continent regions of the United States. Andeavor Logistics operates through three business segments: Terminalling and Transportation, Gathering and Processing and Wholesale. The Terminalling and Transportation segment consists of marine terminals, refined product truck terminals, rail terminals, dedicated storage facilities and transportation pipelines. The Gathering and Processing segment consists of crude oil gathering systems and pipelines as well as natural gas gathering pipelines, processing facilities and fractionation facilities. The Wholesale segment consists of a fee-based fuel wholesale business. Andeavor Logistics is a Delaware limited partnership headquartered in Findlay, Ohio.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Hamish Banks (419) 421-2521
Jamal Kheiry (419) 421-3312
Forward-Looking Statements
This communication contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX) and Andeavor Logistics LP (ANDX). These forward-looking statements relate to, among other things, the proposed acquisition of ANDX by MPLX and include expectations, estimates and projections concerning the business and operations, financial priorities and strategic plans of the combined entity. 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 companies' control and are difficult to predict. Factors that could cause MPLX's or ANDX's actual results to differ materially from those implied in the forward-looking statements include: the ability to complete the proposed transaction between MPLX and ANDX on the proposed terms and timetable; the ability to satisfy various conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain regulatory approvals for the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entity in connection with the consummation of the proposed transaction; the risk that anticipated opportunities and any other synergies from or anticipated benefits of the proposed transaction may not be fully realized or may take longer to realize than expected, including whether the proposed transaction will be accretive within the expected timeframe or at all; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDX or MPLX; the amount and timing of future distributions; negative capital market conditions, including an increase of the current yield on common units; the ability to achieve strategic and financial objectives, including with respect to distribution coverage, future distribution levels, proposed projects and completed transactions; 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 Marathon Petroleum Corporation's (MPC) obligations under MPLX's and ANDX'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 and ANDX's industry; risks related to MPC; and the factors set forth under the heading "Risk Factors" in MPLX's and ANDX's respective Annual Reports on Form 10-K for the year ended Dec. 31, 2018, filed with the Securities and Exchange Commission (SEC).
Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: 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 as set forth above related to the acquisition of ANDX by MPLX; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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 or 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 any common stock repurchases; the adequacy of capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute business plans and to effect any share repurchases or dividend increases, including within the expected timeframe; 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 or ANDX; 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, filed with the SEC.
We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed acquisition, MPLX and ANDX have filed relevant materials with the SEC, including MPLX's registration statement on Form S-4 that includes a definitive consent statement and a prospectus and was declared effective by the SEC on June 28, 2109. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE DEFINITIVE CONSENT STATEMENT AND PROSPECTUS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final consent statement/prospectus will be sent to unitholders of ANDX. Investors and security holders will be able to obtain these documents free of charge at the SEC's website, www.sec.gov, from ANDX at its website, http://ir.andeavorlogistics.com, or by contacting ANDX's Investor Relations at (419) 421-2414, or from MPLX at its website, http://ir.mplx.com, or by contacting MPLX's Investor Relations at (419) 421-2414.
Participants in Solicitation
MPLX, ANDX, MPC and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of consents in respect of the proposed transaction. Information concerning MPLX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, which was filed with the SEC on Feb. 28, 2019. Information concerning ANDX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, which was filed with the SEC on Feb. 28, 2019. Information concerning MPC's executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, which was filed with the SEC on Feb. 28, 2019. Information about MPC's directors is set forth in its Definitive Proxy Statement on Schedule 14A for its 2019 Annual Meeting of Shareholders, which was filed with the SEC on March 14, 2019. Investors and security holders will be able to obtain the documents free of charge from the sources indicated above, and with respect to MPC, from its website, https://www.marathonpetroleum.com/Investors/, or by contacting MPC's Investor Relations at (419) 421-2414. Additional information regarding the interests of such participants in the solicitation of consents in respect of the proposed transaction are included in the registration statement and consent statement/prospectus and other relevant materials filed with the SEC.
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SOURCE MPLX LP
FINDLAY, Ohio, June 5, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX), WhiteWater Midstream (WhiteWater) backed by First Infrastructure Capital, and a joint venture between Stonepeak Infrastructure Partners (Stonepeak) and West Texas Gas, Inc. (WTG) have reached a final investment decision to move forward with the design and construction of the Whistler Pipeline after having secured sufficient firm transportation agreements with shippers. The majority of available capacity on the planned pipeline has been subscribed and committed by long-term transportation agreements. WhiteWater and MPLX expect that the remaining capacity will be fully subscribed in the coming months.
The Whistler Pipeline is being designed to transport approximately 2 billion cubic feet per day (Bcf/d) of natural gas through approximately 475 miles of 42-inch pipeline from Waha, Texas, to the Agua Dulce area in South Texas. Supply for the Whistler Pipeline would be sourced from multiple upstream connections in the Permian Basin, including direct connections to plants in the Midland Basin through an approximately 50 mile, 30-inch pipeline lateral, as well as a direct connection to the 1.4 Bcf/d Agua Blanca Pipeline, a joint venture between WhiteWater, MPLX and Targa. The Agua Blanca Pipeline crosses through the heart of the Delaware Basin, including portions of Culberson, Loving, Pecos, Reeves, Winkler and Ward counties.
"The decision to move forward with this project after securing sufficient commitments from shippers demonstrates our disciplined approach to investing," said Michael J. Hennigan, MPLX president. "Whistler is expected to provide reliable residue gas transportation out of the Permian Basin, which is vital to our growing gas processing position and producers in the region."
"The WhiteWater team is excited to partner with MPLX and develop incremental transportation out of the Permian Basin, as production continues to dramatically outperform consensus estimates," added Christer Rundlof, CEO of WhiteWater. "Whistler will tie directly into the most attractive markets in South Texas, including the growing LNG and Mexican markets."
The Whistler Pipeline is expected to be in service in the third quarter of 2021, pending the receipt of customary regulatory and other approvals.
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
About WhiteWater Midstream
WhiteWater Midstream is an Austin based, independent midstream company that provides transportation services to domestic oil and gas plays. WhiteWater was founded in 2016 and is backed by significant commitments from First Infrastructure Capital. For more information about WhiteWater Midstream, visit www.whitewatermidstream.com.
About First Infrastructure Capital
First Infrastructure Capital Advisors, LLC is a Houston-based investment firm specializing in greenfield projects and companies operating in the midstream, downstream, electric power, telecommunications, and renewable energy industries. First Infrastructure Capital Advisors, LLC is affiliated with Quanta Services and operated separately as an SEC-registered investment adviser, which manages funds affiliated with First Infrastructure Capital, L.P. For more information about First Infrastructure Capital, visit www.firstinfracap.com.
About Stonepeak Infrastructure Partners
Stonepeak Infrastructure Partners (www.stonepeakpartners.com) is an infrastructure-focused private equity firm with over $15 billion of assets under management and with offices in New York, Houston and Austin. Stonepeak invests in long-lived, hard-asset businesses and projects that provide essential services to customers, and seeks to actively partner with high-quality management teams, facilitate operational improvements, and provide capital for growth initiatives.
About WTG
WTG (West Texas Gas, Inc. & affiliates) is composed of a family of related natural gas midstream and downstream entities headquartered in Midland, TX since 1976 with operations in more than 90 Texas and Oklahoma counties. These WTG entities operate more than 700 MMcfd of gas processing capacity with more than 10,000 miles of gathering systems, 1,800 miles of transmission pipelines and distribution systems serving approximately 25,000 LDC customers.
CONTACTS
MPLX LP Investor Relations: Kristina Kazarian (419) 421-2071
WhiteWater Midstream Investor Relations: www.whitewatermidstream.com
Stonepeak Infrastructure Partners Investor Relations: Dan Schmitz (212) 907-5119
WTG Investor Relations: David B. Freeman (432) 682-4349
Forward-looking statements
This press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements relate to, among other things, statements with respect to forecasts regarding capacity and timing for becoming operational for the opportunities discussed above. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "intend," "plan," "project," "potential," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the companies and are difficult to predict. Although management of the respective companies believe any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Among the key risk factors associated with the project that may have a direct impact on completion of the project and construction of the pipeline or the pipeline's and the companies' results of operations and financial condition are: (1) the ability of the companies to obtain all required rights-of-way, permits and other approvals on a timely basis; (2) the ability to complete construction of the project on time and at expected costs; (3) price fluctuations and overall demand for natural gas; (4) changes in the pipeline's tariff rates or other terms as required by state or federal regulatory authorities; (5) the occurrence of an operational hazard or unforeseen interruption; (6) disruption in the debt and equity markets that negatively impacts the companies' abilities to finance capital spending and (7) willingness to incur or failure of customers or vendors to meet or continue contractual obligations related to this project. Additional information about issues that could lead to material changes in performance is set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed with the Securities and Exchange Commission (SEC). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPLX's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. The companies undertake no obligation to revise these forward-looking statements to reflect events or circumstances occurring after today's date.
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SOURCE MPLX LP
FINDLAY, Ohio, May 8, 2019 /PRNewswire/ --
MPLX LP (NYSE: MPLX) today reported first quarter 2019 net income attributable to MPLX of $503 million compared with $421 million for the first quarter of 2018. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $930 million compared with $760 million in the first quarter of 2018. The significant year-over-year increase was driven by strong performance in the base business of both segments as well as dropdowns in Logistics and Storage (L&S). L&S reported segment income from operations of $480 million and adjusted EBITDA of $559 million for the quarter, up $95 million and $122 million, respectively, versus the first quarter of last year. Gathering and Processing (G&P) reported segment income from operations of $198 million and adjusted EBITDA of $371 million for the quarter, up $26 million and $48 million, respectively, on a year-over-year basis.
The company also announced that MPLX and Andeavor Logistics LP (NYSE: ANDX) have entered into a definitive merger agreement whereby MPLX will acquire ANDX in a unit-for-unit exchange. "This merger creates a leading, large-scale, diversified midstream company anchored by fee-based cash flows," said Gary R. Heminger, chairman and chief executive officer. "The combined entity will have an expanded geographic footprint with enhanced long-term growth opportunities. We are confident about the midstream growth and value-creation opportunities that exist across this combined platform in the best basins in the U.S."
MPLX made progress on its strategy of capturing the full midstream value chain and enhancing its cash flow stability by announcing continued development of long-haul pipelines that meet growing market needs. The company signed a letter of intent to partner in the Wink-to-Webster crude oil pipeline in the Permian Basin and it continues to progress Permian natural gas and NGL pipelines. MPLX, as operator, also completed an open season on the proposed reversal of the Capline pipeline. These projects are expected to increase the flow of crude oil and other hydrocarbons to the Texas and Louisiana Gulf Coast markets, where the partnership plans to develop and increase export capabilities.
"Our decision to move forward on these projects underscores our commitment to allocate more of our growth capital to the Logistics and Storage segment and is aligned with our long-term strategy of enhancing the return profile of our company," added Heminger.
During the quarter, MPLX generated $618 million in net cash provided by operating activities and distributable cash flow of $757 million, which provided 1.41x coverage and resulted in 3.9x leverage. The company did not issue any public equity during the first quarter, maintaining its commitment to a strategy of self-funding the equity portion of its capital investments. MPLX also announced its 25th consecutive distribution increase to $0.6575 per common unit, a 6.5 percent increase over the prior year first quarter.
Financial Highlights
Three Months Ended | |||||||||
(In millions, except per unit and ratio data) | 2019 | 2018 | |||||||
Net income attributable to MPLX | $ | 503 | $ | 421 | |||||
Adjusted EBITDA attributable to MPLX(a) | 930 | 760 | |||||||
Net cash provided by operating activities | 618 | 450 | |||||||
Distributable cash flow ("DCF")(a) | 757 | 619 | |||||||
Distribution per common unit(b) | $ | 0.6575 | $ | 0.6175 | |||||
Distribution coverage ratio(c) | 1.41x | 1.29x | |||||||
Consolidated debt to adjusted EBITDA(d) | 3.9x | 3.8x | |||||||
(a) Non-GAAP measure calculated before distributions to preferred unitholders. See reconciliation below. | |||||||||
(b) Distributions declared by the board of directors of MPLX's general partner. | |||||||||
(c) Non-GAAP measure. See calculation below. | |||||||||
(d) Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. See reconciliation below. |
Segment Results
(In millions) | Three Months Ended | ||||||
Segment income from operations (unaudited) | 2019 | 2018 | |||||
Logistics and Storage | $ | 480 | $ | 385 | |||
Gathering and Processing | 198 | 172 | |||||
Segment adjusted EBITDA attributable to MPLX LP (unaudited) | |||||||
Logistics and Storage | 559 | 437 | |||||
Gathering and Processing | $ | 371 | $ | 323 | |||
Logistics & Storage
L&S segment income from operations and adjusted EBITDA for the first quarter of 2019 increased by $95 million and $122 million, respectively, compared with the same period in 2018. The increase was primarily due to the February 1, 2018 dropdown of certain refining logistics assets and the fuels distribution service business, as well as the continued solid performance of the underlying base business.
Total pipeline throughputs were 3.4 million barrels per day in the first quarter, an increase of 11 percent versus the same quarter last year. The average tariff rate was $0.67 per barrel for the quarter. Terminal throughput was 1.4 million barrels per day for the quarter, which is consistent with the prior-year quarter.
MPLX provided updates on several previously announced Permian pipeline projects. The company signed a letter of intent to partner in the Wink-to-Webster crude oil pipeline. The pipeline will have a planned capacity of 1.5 million barrels per day and is expected to begin operations in the first half of 2021. The partnership's previously announced Whistler natural gas and BANGL natural gas liquids pipeline projects are both in the documentation phase. MPLX expects to make final investment decisions on both pipelines in the near term.
Gathering & Processing
G&P segment income from operations and segment adjusted EBITDA increased by $26 million and $48 million, respectively, for the first quarter of 2019 compared with the same period in 2018. The increase was primarily due to record gathered, processed and fractionated volumes partially offset by decreased pricing on product sales.
Regionally, the company continued to experience significant growth in the Marcellus and Utica basins. Gathered volumes averaged 3.4 billion cubic feet per day (bcf/d) for the quarter, a 26 percent increase versus the first quarter of 2018. Processed volumes averaged 6.0 bcf/d, an 18 percent increase versus the same quarter last year as volumes at the Sherwood and Harmon Creek complexes ramped during the quarter. Fractionated volumes averaged 464 thousand barrels per day, a 17 percent increase versus the first quarter of 2018. The increase was primarily the result of higher volumes at the recently expanded Hopedale Complex.
Consistent with its strategy of constructing assets on a just-in-time basis, MPLX expects to complete two additional processing plants at Sherwood in 2019, adding 400 million cubic feet per day of incremental capacity.
In the Southwest, gathered volumes averaged 1.6 bcf/d for the first quarter, a 7 percent increase versus the first quarter of 2018. Processed volumes averaged 1.6 bcf/d for the quarter, a 21 percent increase versus the first quarter of 2018. The increase was primarily due to higher volumes in the Delaware Basin.
To support additional growth in the Permian Basin, MPLX has three additional plants under various stages of development. Upon completion, the company will have approximately 1.0 billion cubic feet per day of processing capacity, leading to significant liquids production in the basin.
Financial Position and Liquidity
As of March 31, 2019, MPLX had $93 million in cash, $1.8 billion available through its bank revolving credit facility expiring in July 2022, and $1.0 billion available through its credit facility with MPC.
The company's $2.9 billion of available liquidity, its distribution coverage and its access to the capital markets should provide it with sufficient flexibility to meet its day-to-day operational needs and continue investing in organic growth opportunities. The company's leverage ratio was 3.9x at March 31, 2019. MPLX remains committed to maintaining an investment-grade credit profile and a strategy of self-funding the equity portion of its organic growth capital needs.
Conference Call
MPLX's previously announced first-quarter 2019 earnings conference call and webcast, which had been scheduled for Wednesday, May 8, at 11 a.m. EDT, has been canceled. MPLX and ANDX will hold a conference call and webcast at 8:30 a.m. EDT today to discuss the transaction and MPLX first-quarter highlights. Interested parties may listen to the conference call by dialing 1-888-455-2707 (confirmation number 2634753) or by visiting MPLX's website at http://www.mplx.com and clicking on the "Events and Presentations" link in the "Investor Center" tab or ANDX's website at http://www.andeavorlogistics.com and clicking on the "Events and Presentations" link in the "Investor" tab. A replay of the webcast will be available on MPLX's and ANDX's websites for two weeks. An investor presentation will also be available online prior to the conference call and webcast at http://ir.mplx.com or http://ir.andeavorlogistics.com.
MPLX management will be available to answer questions about the earnings release at the end of today's conference call. Financial information, including earnings release and other investor-related material, will also be available online prior to the conference call and webcast at http://ir.mplx.com.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
Non-GAAP references
In addition to our financial information presented in accordance with U.S. generally accepted accounting principles (GAAP), management utilizes additional non-GAAP measures to facilitate comparisons of past performance and future periods. This press release and supporting schedules include the non-GAAP measures adjusted EBITDA and consolidated debt to last twelve months pro forma adjusted EBITDA, which we refer to as our leverage ratio, distributable cash flow (DCF) and distribution coverage ratio. The amount of adjusted EBITDA and DCF generated is considered by the board of directors of our general partner in approving the Partnership's cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) provision for income taxes; (iii) amortization of deferred financing costs; (iv) non-cash equity-based compensation; (v) net interest and other financial costs; (vi) income from equity method investments; (vii) distributions and adjustments related to equity method investments; (viii) unrealized derivative gains and losses; (ix) acquisition costs; (x) noncontrolling interest and (xi) other adjustments as deemed necessary. In general, we define DCF as adjusted EBITDA adjusted for (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items.
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record the realized gain or loss of the contract.
Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures.
DCF is a financial performance measure used by management as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders.
Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between the partnership's financial operating performance and cash distribution capability. We define the distribution coverage ratio as the ratio of DCF attributable to GP and LP unitholders to total GP and LP distributions declared.
Leverage ratio is a liquidity measure used by management, industry analysts, investors, lenders and rating agencies to analyze our ability to incur and service debt and fund capital expenditures.
Forward-looking statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX). These forward-looking statements relate to, among other things, the proposed acquisition of Andeavor Logistics LP (ANDX) by MPLX and include expectations, estimates and projections concerning the business and operations, financial priorities and strategic plans of the combined entity. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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: the ability to complete the proposed transaction between MPLX and ANDX on the proposed terms and timetable; the ability to satisfy various conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain regulatory approvals for the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entity in connection with the consummation of the proposed transaction; the risk that anticipated opportunities and any other synergies from or anticipated benefits of the proposed transaction may not be fully realized or may take longer to realize than expected, including whether the proposed transaction will be accretive within the expected timeframe or at all; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDX; the amount and timing of future distributions; negative capital market conditions, including an increase of the current yield on common units; the ability to achieve strategic and financial objectives, including with respect to distribution coverage, future distribution levels, proposed projects and completed transactions; 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 Marathon Petroleum Corporation's (MPC) obligations under MPLX's and ANDX'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 and ANDX'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, 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: 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 as set forth above related to the acquisition of ANDX by MPLX; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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 or 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 any common stock repurchases; the adequacy of capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute business plans and to effect any share repurchases or dividend increases, including within the expected timeframe; 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 or ANDX; 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, filed with the SEC.
We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed transaction, a registration statement on Form S-4 will be filed with the SEC. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE CONSENT STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final consent statement/prospectus will be sent to unitholders of ANDX. Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, from ANDX at its website, http://ir.andeavorlogistics.com, or by contacting ANDX's Investor Relations at (419) 421-2414, or from MPLX at its website, http://ir.mplx.com, or by contacting MPLX's Investor Relations at (419) 421-2414.
Participants in Solicitation
MPLX, ANDX, MPC and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of consents in respect of the proposed transaction. Information concerning MPLX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed Feb. 28, 2019. Information concerning ANDX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed Feb. 28, 2019. Information concerning MPC's executive officers is set forth in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed Feb. 28, 2019. Information about MPC's directors is set forth in MPC's Definitive Proxy Statement on Schedule 14A for its 2019 Annual Meeting of Shareholders, which was filed with the SEC on March 14, 2019. Investors and security holders will be able to obtain the documents free of charge from the sources indicated above, and with respect to MPC, from its website, https://www.marathonpetroleum.com/Investors, or by contacting MPC's Investor Relations at (419) 421-2414. Additional information regarding the interests of such participants in the solicitation of consents in respect of the proposed transaction will be included in the registration statement and consent statement/prospectus and other relevant materials to be filed with the SEC when they become available.
Condensed Results of Operations (unaudited) | |||||||
Three Months Ended | |||||||
(In millions, except per unit data) | 2019 | 2018 | |||||
Revenues and other income: | |||||||
Operating revenue | $ | 768 | $ | 712 | |||
Operating revenue - related parties | 782 | 620 | |||||
Income (loss) from equity method investments | 70 | 61 | |||||
Other income | 26 | 27 | |||||
Total revenues and other income | 1,646 | 1,420 | |||||
Costs and expenses: | |||||||
Operating expenses | 441 | 422 | |||||
Operating expenses - related parties | 215 | 178 | |||||
Depreciation and amortization | 211 | 176 | |||||
General and administrative expenses | 82 | 69 | |||||
Other taxes | 19 | 18 | |||||
Total costs and expenses | 968 | 863 | |||||
Income from operations | 678 | 557 | |||||
Interest and other financial costs | 171 | 130 | |||||
Income before income taxes | 507 | 427 | |||||
(Benefit) provision for income taxes | (2) | 4 | |||||
Net income | 509 | 423 | |||||
Less: Net income (loss) attributable to noncontrolling interests | 6 | 2 | |||||
Net income attributable to MPLX LP | 503 | 421 | |||||
Less: Preferred unit distributions | 20 | 16 | |||||
Limited partners' interest in net income attributable to MPLX LP | $ | 483 | $ | 405 | |||
Per Unit Data | |||||||
Net income attributable to MPLX LP per limited partner unit: | |||||||
Common - basic | $ | 0.61 | $ | 0.61 | |||
Common - diluted | $ | 0.61 | $ | 0.61 | |||
Weighted average limited partner units outstanding: | |||||||
Common units – basic | 794 | 661 | |||||
Common units – diluted | 795 | 661 | |||||
Select Financial Statistics (unaudited) | |||||||
Three Months Ended | |||||||
(In millions, except ratio data) | 2019 | 2018 | |||||
Distribution declared | |||||||
Common units (LP) - public | $ | 191 | $ | 179 | |||
Common units - MPC(a) | 332 | 288 | |||||
Total GP and LP distribution declared | 523 | 467 | |||||
Redeemable preferred units(b) | 20 | 16 | |||||
Total distribution declared | $ | 543 | $ | 483 | |||
Distribution coverage ratio(c) | 1.41x | 1.29x | |||||
Cash Flow Data | |||||||
Net cash flow provided by (used in): | |||||||
Operating activities | $ | 618 | $ | 450 | |||
Investing activities | (575) | (490) | |||||
Financing activities | (26) | 37 | |||||
Other Financial Data | |||||||
Adjusted EBITDA attributable to MPLX LP(d) | 930 | 760 | |||||
DCF attributable to GP and LP unitholders(d) | $ | 737 | $ | 603 | |||
(a) MPC agreed to waive $23.7 million in common unit distributions associated with the units received in connection with the Feb. 1, 2018 dropdown. | |||||||
(b) The 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. | |||||||
(c) DCF attributable to GP and LP unitholders divided by total GP and LP distribution declared. | |||||||
(d) Non-GAAP measure. See reconciliation below. |
Select Balance Sheet Data (unaudited) | |||||||
(In millions, except ratio data) | March 31, | December 31, | |||||
Cash and cash equivalents | $ | 93 | $ | 68 | |||
Total assets | 23,584 | 22,779 | |||||
Total debt(a) | 13,833 | 13,393 | |||||
Redeemable preferred units | 1,004 | 1,004 | |||||
Total equity | $ | 6,929 | $ | 6,864 | |||
Consolidated total debt to adjusted EBITDA(b) | 3.9x | 3.9x | |||||
Partnership units outstanding: | |||||||
MPC-held common units | 505 | 505 | |||||
Public common units | 290 | 289 | |||||
(a) Outstanding intercompany borrowings were zero as of March 31, 2019 and December 31, 2018. | |||||||
(b) Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. Face value total debt includes approximately $450 million and $463 million of unamortized discount and debt issuance costs as of March 31, 2019 and December 31, 2018, respectively. |
Operating Statistics (unaudited) | ||||||||||
Three Months Ended | ||||||||||
2019 | 2018 | % Change | ||||||||
Logistics and Storage | ||||||||||
Pipeline throughput (mbpd) | ||||||||||
Crude oil pipelines | 2,168 | 2,006 | 8 | % | ||||||
Product pipelines | 1,242 | 1,056 | 18 | % | ||||||
Total pipelines | 3,410 | 3,062 | 11 | % | ||||||
Average tariff rates ($ per barrel) | ||||||||||
Crude oil pipelines | $ | 0.61 | $ | 0.56 | 9 | % | ||||
Product pipelines | 0.79 | 0.76 | 4 | % | ||||||
Total pipelines | $ | 0.67 | $ | 0.63 | 6 | % | ||||
Terminal throughput (mbpd) | 1,431 | 1,445 | (1) | % | ||||||
Barges at period-end | 256 | 244 | 5 | % | ||||||
Towboats at period-end | 23 | 20 | 15 | % |
Gathering and Processing Operating Statistics (unaudited) - Consolidated(a) | Three Months Ended | |||||||||
2019 | 2018 | % Change | ||||||||
Gathering throughput (mmcf/d) | ||||||||||
Marcellus Operations | 1,282 | 1,123 | 14 | % | ||||||
Utica Operations | — | — | — | % | ||||||
Southwest Operations | 1,581 | 1,476 | 7 | % | ||||||
Total gathering throughput | 2,863 | 2,599 | 10 | % | ||||||
Natural gas processed (mmcf/d) | ||||||||||
Marcellus Operations | 4,152 | 3,594 | 16 | % | ||||||
Utica Operations | — | — | — | % | ||||||
Southwest Operations | 1,599 | 1,326 | 21 | % | ||||||
Southern Appalachian Operations | 235 | 253 | (7) | % | ||||||
Total natural gas processed | 5,986 | 5,173 | 16 | % | ||||||
C2 + NGLs fractionated (mbpd) | ||||||||||
Marcellus Operations | 420 | 352 | 19 | % | ||||||
Utica Operations | — | — | — | % | ||||||
Southwest Operations | 17 | 16 | 6 | % | ||||||
Southern Appalachian Operations | 13 | 12 | 8 | % | ||||||
Total C2 + NGLs fractionated | 450 | 380 | 18 | % | ||||||
(a) Includes operating data for entities that have been consolidated into the MPLX financial statements. |
Gathering and Processing Operating Statistics (unaudited) - Operated(a) | Three Months Ended | |||||||||
2019 | 2018 | % Change | ||||||||
Gathering throughput (mmcf/d) | ||||||||||
Marcellus Operations | 1,282 | 1,123 | 14 | % | ||||||
Utica Operations | 2,109 | 1,570 | 34 | % | ||||||
Southwest Operations | 1,581 | 1,478 | 7 | % | ||||||
Total gathering throughput | 4,972 | 4,171 | 19 | % | ||||||
Natural gas processed (mmcf/d) | ||||||||||
Marcellus Operations | 5,148 | 4,114 | 25 | % | ||||||
Utica Operations | 817 | 936 | (13) | % | ||||||
Southwest Operations | 1,599 | 1,326 | 21 | % | ||||||
Southern Appalachian Operations | 235 | 253 | (7) | % | ||||||
Total natural gas processed | 7,799 | 6,629 | 18 | % | ||||||
C2 + NGLs fractionated (mbpd) | ||||||||||
Marcellus Operations | 420 | 352 | 19 | % | ||||||
Utica Operations | 44 | 43 | 2 | % | ||||||
Southwest Operations | 17 | 16 | 6 | % | ||||||
Southern Appalachian Operations | 13 | 12 | 8 | % | ||||||
Total C2 + NGLs fractionated | 494 | 423 | 17 | % | ||||||
(a) Includes operating data for entities that have been consolidated into the MPLX financial statements as well as operating data for Partnership-operated equity method investments. |
Reconciliation of Segment Adjusted EBITDA to Net Income (unaudited) | |||||||
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 559 | $ | 437 | |||
G&P segment adjusted EBITDA attributable to MPLX LP | 371 | 323 | |||||
Adjusted EBITDA attributable to MPLX LP | 930 | 760 | |||||
Depreciation and amortization | (211) | (176) | |||||
Provision for income taxes | 2 | (4) | |||||
Amortization of deferred financing costs | (13) | (16) | |||||
Non-cash equity-based compensation | (6) | (4) | |||||
Net interest and other financial costs | (158) | (114) | |||||
Income from equity method investments | 70 | 61 | |||||
Distributions/adjustments related to equity method investments | (108) | (90) | |||||
Unrealized derivative gains/(losses)(a) | (4) | 7 | |||||
Acquisition costs | — | (3) | |||||
Adjusted EBITDA attributable to noncontrolling interests | 7 | 2 | |||||
Net income | $ | 509 | $ | 423 | |||
(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 | |||||||
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
L&S Segment income from operations | $ | 480 | $ | 385 | |||
Depreciation and amortization | 70 | 48 | |||||
Income from equity method investments | (41) | (44) | |||||
Distributions/adjustments related to equity method investments | 46 | 43 | |||||
Acquisition costs | — | 3 | |||||
Non-cash equity-based compensation | 4 | 2 | |||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 559 | $ | 437 | |||
G&P Reconciliation of Segment Income from Operations to Segment | |||||||
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
G&P Segment income from operations | $ | 198 | $ | 172 | |||
Depreciation and amortization | 141 | 128 | |||||
Income from equity method investments | (29) | (17) | |||||
Distributions/adjustments related to equity method investments | 62 | 47 | |||||
Unrealized derivative (gains)/losses(a) | 4 | (7) | |||||
Non-cash equity-based compensation | 2 | 2 | |||||
Adjusted EBITDA attributable to noncontrolling interest | (7) | (2) | |||||
G&P Segment adjusted EBITDA attributable to MPLX LP | $ | 371 | $ | 323 | |||
(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 | |||||||
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
Net income | $ | 509 | $ | 423 | |||
(Benefit)/provision for income taxes | (2) | 4 | |||||
Amortization of deferred financing costs | 13 | 16 | |||||
Net interest and other financial costs | 158 | 114 | |||||
Income from operations | 678 | 557 | |||||
Depreciation and amortization | 211 | 176 | |||||
Non-cash equity-based compensation | 6 | 4 | |||||
Income from equity method investments | (70) | (61) | |||||
Distributions/adjustments related to equity method investments | 108 | 90 | |||||
Unrealized derivative (gains)/losses(a) | 4 | (7) | |||||
Acquisition costs | — | 3 | |||||
Adjusted EBITDA | 937 | 762 | |||||
Adjusted EBITDA attributable to noncontrolling interests | (7) | (2) | |||||
Adjusted EBITDA attributable to MPLX LP | 930 | 760 | |||||
Deferred revenue impacts | 8 | 9 | |||||
Net interest and other financial costs | (158) | (114) | |||||
Maintenance capital expenditures | (19) | (25) | |||||
Equity method investment capital expenditures paid out | (4) | (11) | |||||
DCF attributable to MPLX LP | 757 | 619 | |||||
Preferred unit distributions | (20) | (16) | |||||
DCF attributable to GP and LP unitholders | $ | 737 | $ | 603 | |||
(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 Net Income to LTM Pro forma adjusted EBITDA | |||||||
Three Months Ended March 31 | |||||||
(In millions) | 2019 | 2018 | |||||
LTM Net income | $ | 1,920 | $ | 1,072 | |||
LTM Net income to adjusted EBITDA adjustments | 1,725 | 1,269 | |||||
LTM Adjusted EBITDA attributable to MPLX LP | 3,645 | 2,341 | |||||
LTM Pro forma adjustments for acquisitions | 4 | 888 | |||||
LTM Pro forma adjusted EBITDA | 3,649 | 3,229 | |||||
Consolidated debt | $ | 14,283 | $ | 12,357 | |||
Consolidated debt to adjusted EBITDA | 3.9x | 3.8x | |||||
Reconciliation of Adjusted EBITDA Attributable to MPLX LP and DCF | |||||||
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
Net cash provided by operating activities | $ | 618 | $ | 450 | |||
Changes in working capital items | 141 | 178 | |||||
All other, net | 4 | (3) | |||||
Non-cash equity-based compensation | 6 | 4 | |||||
Net loss on disposal of assets | (1) | — | |||||
Net interest and other financial costs | 158 | 114 | |||||
Asset retirement expenditures | — | 1 | |||||
Unrealized derivative (gains)/losses(a) | 4 | (7) | |||||
Acquisition costs | — | 3 | |||||
Distributions/adjustments related to equity method investments | 7 | 22 | |||||
Adjusted EBITDA | 937 | 762 | |||||
Adjusted EBITDA attributable to noncontrolling interests | (7) | (2) | |||||
Adjusted EBITDA attributable to MPLX LP | 930 | 760 | |||||
Deferred revenue impacts | 8 | 9 | |||||
Net interest and other financial costs | (158) | (114) | |||||
Maintenance capital expenditures | (19) | (25) | |||||
Equity method investment capital expenditures paid out | (4) | (11) | |||||
DCF attributable to MPLX LP | 757 | 619 | |||||
Preferred unit distributions | (20) | (16) | |||||
DCF attributable to GP and LP unitholders | $ | 737 | $ | 603 | |||
(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. |
Capital Expenditures (unaudited) | |||||||
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
Capital Expenditures: | |||||||
Maintenance | $ | 19 | $ | 25 | |||
Growth | 364 | 425 | |||||
Total capital expenditures | 383 | 450 | |||||
Less: Decrease in capital accruals | (74) | (6) | |||||
Asset retirement expenditures | — | 1 | |||||
Additions to property, plant and equipment | 457 | 455 | |||||
Investments in unconsolidated affiliates | 128 | 38 | |||||
Acquisitions | (1) | — | |||||
Total capital expenditures and acquisitions | 584 | $ | 493 | ||||
Less: Maintenance capital expenditures | 19 | 25 | |||||
Acquisitions | (1) | — | |||||
Total growth capital expenditures(a) | $ | 566 | $ | 468 | |||
(a) Amount excludes contributions from noncontrolling interests of $94 million and $1 million for the three months ended March 31, 2019 and 2018, respectively, as reflected in the financing section of our statement of cash flows. |
View original content:http://www.prnewswire.com/news-releases/mplx-lp-reports-first-quarter-2019-financial-results-300846177.html
SOURCE MPLX LP
FINDLAY, Ohio, May 8, 2019 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported a first-quarter 2019 loss of $7 million, or $(0.01) per diluted share. First quarter 2019 earnings included a net benefit of $0.08 per diluted share related to a non-cash gain which was partially offset by transaction-related costs and prior period tax adjustments. This compares with income of $37 million, or $0.08 per diluted share, in the first quarter of 2018.
"Despite challenging refining market conditions, the stability of our Midstream and Retail segments helped our integrated business generate over $1.6 billion of operating cash flow during the quarter," said Gary R. Heminger, chairman and chief executive officer. "Throughout the quarter refining fundamentals improved, gasoline and distillate inventories rebalanced, and the April blended crack spread of $18.80 is more than double the first-quarter average. We expect positive dynamics across all three of our business segments to support growing cash flows throughout the remainder of 2019."
Heminger added, "One of our core objectives is growing profitability and creating competitive advantages. We continuously assess our project portfolio to ensure disciplined capital allocation. Based on our internal forecasts, the Garyville Coker 3 project no longer comfortably exceeds our internal hurdle rates for refining projects. Consequently, we have decided to remove the project from our investment plans."
The company remains committed to returning at least 50 percent of discretionary free cash flow to investors over the long term. MPC returned $1.2 billion in capital to shareholders during the first quarter of 2019, including $885 million in share repurchases.
MPLX LP (NYSE: MPLX) today announced that it has entered into a definitive merger agreement whereby MPLX will acquire Andeavor Logistics LP (NYSE: ANDX) in a unit-for-unit exchange. "This merger creates a leading, large-scale, diversified midstream company anchored by fee-based cash flows," added Heminger. "The combined entity will have an expanded geographic footprint with enhanced long-term growth opportunities in some of the best basins in the U.S. We are confident about the midstream growth and value-creation opportunities that exist across this combined platform."
Segment Results
In the first quarter of 2019, total income from operations was $669 million and adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) was $1.5 billion. This compares to $440 million in income from operations and $1.0 billion of Adjusted EBITDA for the first quarter of 2018.
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
Income (loss) from Operations by Segment | |||||||
Refining & Marketing | $ | (334) | $ | (133) | |||
Retail | 170 | 95 | |||||
Midstream | 908 | 567 | |||||
Items not allocated to segments: | |||||||
Corporate and other unallocated items | (191) | (89) | |||||
Capline restructuring gain | 207 | — | |||||
Transaction-related costs | (91) | — | |||||
Income from operations | $ | 669 | $ | 440 |
Refining & Marketing (R&M)
R&M segment loss from operations was $334 million in the first quarter of 2019 compared with a loss from operations of $133 million in the same quarter of 2018. The $201 million decrease in R&M income was primarily driven by narrower crude discounts across our medium and heavy sour crude slate. Additionally, high industry gasoline inventories following the fourth quarter's strong production environment resulted in weaker gasoline margins particularly in January 2019.
Refinery capacity utilization was 95 percent, resulting in total throughputs of 3.1 million barrels per day for the first quarter, which was 1.2 million barrels per day higher than the throughput for the first quarter of last year. The increase was primarily due to the addition of the legacy Andeavor refineries. Refined product exports totaled 430 thousand barrels per day in the first quarter of 2019.
R&M margin was $11.17 per barrel for the quarter. This quarter MPC began providing regional R&M margins. Gulf Coast R&M margins were $7.82 per barrel, Mid-Con R&M margins were $15.26 per barrel, and West Coast R&M margins were $10.94 per barrel.
Segment EBITDA was $93 million in the first quarter 2019 versus $119 million for the same quarter last year. These results include turnaround costs of $186 million in the first quarter of 2019 and $173 million in the first quarter of 2018.
Midstream
Midstream segment income from operations, which primarily reflects the results of MPLX and ANDX, was $908 million in the first quarter of 2019, compared with $567 million for the first quarter of 2018. The increase was due to contributions of $220 million from Andeavor Logistics and a $121 million increase in Midstream segment results driven primarily by growth across MPLX's businesses.
The Midstream segment made progress on its strategy of capturing the full midstream value chain and enhancing its cash flow stability by announcing continued development of long-haul pipelines that meet growing market needs. MPLX signed a letter of intent to participate in the Wink-to-Webster crude oil pipeline in the Permian Basin. Additionally, the previously announced Whistler natural gas and BANGL natural gas liquids pipeline projects are both in the documentation phase, with final investment decisions expected in the near term. The open season on the proposed Capline reversal was completed and received significant interest such that the project will progress with an initial target in-service date of September 2020. Lastly, the Gray Oak Pipeline, in which MPC has a 25 percent equity interest, remains on schedule and is expected to be placed in service in the fourth quarter of 2019.
Retail
Retail segment income from operations was $170 million in the first quarter of 2019, compared with $95 million in the first quarter of 2018. The increase in earnings was largely related to the addition of the legacy Andeavor retail operations as well as a $24 million year-over-year increase in MPC's legacy Speedway segment earnings.
Retail fuel margin increased to 17.15 cents per gallon in the first quarter of 2019 from 15.61 cents per gallon in the first quarter of 2018. Same-store merchandise sales increased by 5.4 percent year-over-year and same-store gasoline sales volume decreased by 3.2 percent year-over-year.
As of April 30, Speedway has completed 112 store conversions in 2019, bringing the total number of conversions since the combination with Andeavor to 282. The store conversions across Minnesota are complete and the company is now focused on conversions in the Southwest. The company is targeting 700 total cumulative store conversions by the end of 2019.
Items Not Allocated to Segments and Other
Items not allocated to segments totaled $75 million of expenses in the first quarter of 2019 compared to $89 million in the first quarter of 2018. First quarter 2019 results included a $207 million gain related to the exchange of MPC's undivided interest in the Capline Pipeline system for an equity ownership in a newly formed entity. The non-cash gain reflects the excess of the estimated fair value of MPC's new entity ownership interest over the carrying value of the company's contributed undivided interest. This gain was partially offset by $91 million of transaction related costs primarily associated with adopting MPC's vacation accrual policies across the legacy Andeavor employee base.
The effective tax rate for the first quarter of 2019 was 29 percent, largely due to $36 million of state deferred tax expense recognized for an out-of-period adjustment to correct the tax effects recorded in 2018 for the Andeavor acquisition.
Strong Financial Position and Liquidity
As of March 31, 2019, the company had $755 million in cash and cash equivalents (excluding MPLX and ANDX's cash and cash equivalents of $93 million and $29 million, respectively), approximately $5 billion available under a revolving credit agreement, $1 billion available under a 364-day bank revolving credit facility and $750 million available under its trade receivables securitization facility.
Strategic Update
MPC realized $133 million of synergies related to the Andeavor combination in the first quarter. The company continues to expect annual gross run-rate synergies of up to $600 million at year-end 2019 and $1.4 billion by the end of 2021.
Today, MPLX announced that it has entered into a definitive merger agreement with ANDX whereby MPLX will acquire ANDX in a unit-for-unit transaction at a 1.07x blended exchange ratio. Under the terms of the agreement, ANDX public unit holders will receive 1.135x MPLX common units for each ANDX common unit held, representing a premium of 7.3%, and MPC will receive 1.0328x MPLX common units for each ANDX common unit held, representing a 2.4% discount based on May 2, 2019 closing prices.
Second Quarter 2019 Outlook
The company's second quarter 2019 outlook for the R&M segment includes total throughput guidance of 2,925 thousand barrels per day and total direct operating costs of $8.70 per barrel. Corporate and other unallocated items are estimated at $200 million.
Conference Call
The company's previously scheduled conference call and webcast has been rescheduled from 9 a.m. EDT to 10 a.m. EDT. At 10 a.m. EDT today, MPC will hold a conference call and webcast to discuss the reported results and provide an update on company operations. Interested parties may listen by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2019 First-Quarter Financial Results" link. A replay of the webcast will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, will also be available online prior to the conference call and webcast at https://www.marathonpetroleum.com.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with more than 3.0 million barrels per day of crude oil capacity across sixteen refineries. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure. More information is available at www.marathonpetroleum.com.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
References to Earnings and Defined Terms
References to earnings mean net income attributable to MPC from the statements of income. Unless otherwise indicated, references to earnings and earnings per share are MPC's share after excluding amounts attributable to noncontrolling interests. Discretionary free cash flow is defined as operating cash flow less maintenance and regulatory capital.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation (MPC). These forward-looking statements relate to, among other things, MPC's acquisition of Andeavor and include expectations, estimates and projections concerning the business and operations, strategy and value creation plans of MPC. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "project," "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 MPC's actual results to differ materially from those implied in the forward-looking statements include: 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 proposed transaction between MPLX LP (MPLX) and Andeavor Logistics LP (ANDX), including the ability to complete the proposed transaction on the proposed terms and timetable, the ability to satisfy various conditions to the closing of the transaction contemplated by the merger agreement, the ability to obtain regulatory approvals for the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entity in connection with the consummation of the proposed transaction, the risk that anticipated opportunities and any other synergies from or anticipated benefits of the proposed transaction may not be fully realized or may take longer to realize than expected, including whether the proposed transaction will be accretive within the expected timeframe or at all, or disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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 or 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 any common stock repurchases; the adequacy of capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute business plans and to effect any share repurchases or dividend increases, including within the expected timeframe; 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 or ANDX; 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, filed with the SEC.
We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed transaction, a registration statement on Form S-4 will be filed with the SEC. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE CONSENT STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final consent statement/prospectus will be sent to unitholders of ANDX. Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, from ANDX at its website, http://ir.andeavorlogistics.com, or by contacting ANDX's Investor Relations at (419) 421-2414, or from MPLX at its website, http://ir.mplx.com, or by contacting MPLX's Investor Relations at (419) 421-2414.
Participants in Solicitation
MPLX, ANDX, MPC and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of consents in respect of the proposed transaction. Information concerning MPLX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed Feb. 28, 2019. Information concerning ANDX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed Feb. 28, 2019. Information concerning MPC's executive officers is set forth in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed Feb. 28, 2019. Information about MPC's directors is set forth in MPC's Definitive Proxy Statement on Schedule 14A for its 2019 Annual Meeting of Shareholders, which was filed with the SEC on March 14, 2019. Investors and security holders will be able to obtain the documents free of charge from the sources indicated above, and with respect to MPC, from its website, https://www.marathonpetroleum.com/Investors, or by contacting MPC's Investor Relations at (419) 421-2414. Additional information regarding the interests of such participants in the solicitation of consents in respect of the proposed transaction will be included in the registration statement and consent statement/prospectus and other relevant materials to be filed with the SEC when they become available.
Consolidated Statements of Income (Unaudited) | |||||||
Three Months Ended | |||||||
(In millions, except per-share data) | 2019 | 2018 | |||||
Revenues and other income: | |||||||
Sales and other operating revenues | $ | 28,081 | $ | 18,694 | |||
Sales to related parties | 186 | 172 | |||||
Income from equity method investments | 99 | 86 | |||||
Net gain on disposal of assets | 214 | 2 | |||||
Other income | 35 | 30 | |||||
Total revenues and other income | 28,615 | 18,984 | |||||
Costs and expenses: | |||||||
Cost of revenues (excludes items below) | 25,756 | 17,370 | |||||
Purchases from related parties | 204 | 141 | |||||
Depreciation and amortization | 919 | 528 | |||||
Selling, general and administrative expenses | 881 | 402 | |||||
Other taxes | 186 | 103 | |||||
Total costs and expenses | 27,946 | 18,544 | |||||
Income from operations | 669 | 440 | |||||
Net interest and other financial costs | 306 | 183 | |||||
Income before income taxes | 363 | 257 | |||||
Provision for income taxes | 104 | 22 | |||||
Net income | 259 | 235 | |||||
Less net income attributable to: | |||||||
Redeemable noncontrolling interest | 20 | 16 | |||||
Noncontrolling interests | 246 | 182 | |||||
Net income (loss) attributable to MPC | $ | (7) | $ | 37 | |||
Per-share data | |||||||
Basic: | |||||||
Net income (loss) attributable to MPC per share | $ | (0.01) | $ | 0.08 | |||
Weighted average shares: | 673 | 476 | |||||
Diluted: | |||||||
Net income (loss) attributable to MPC per share | $ | (0.01) | $ | 0.08 | |||
Weighted average shares: | 673 | 480 | |||||
Income Summary (Unaudited) | |||||||
Three Months Ended | |||||||
(In millions) | 2019(a) | 2018 | |||||
Income (Loss) from Operations by segment | |||||||
Refining & Marketing | $ | (334) | $ | (133) | |||
Retail | 170 | 95 | |||||
Midstream | 908 | 567 | |||||
Items not allocated to segments: | |||||||
Corporate and other unallocated items | (191) | (89) | |||||
Capline restructuring gain | 207 | — | |||||
Transaction-related costs(b) | (91) | — | |||||
Income from operations | 669 | 440 | |||||
Net interest and other financial costs | 306 | 183 | |||||
Income before income taxes | 363 | 257 | |||||
Provision for income taxes | 104 | 22 | |||||
Net income | 259 | 235 | |||||
Less net income attributable to: | |||||||
Redeemable noncontrolling interest | 20 | 16 | |||||
Noncontrolling interests | 246 | 182 | |||||
Net income (loss) attributable to MPC | $ | (7) | $ | 37 | |||
(a) | Includes the results of Andeavor from the October 1, 2018 acquisition date forward. |
(b) | Includes costs related to the Andeavor acquisition including financial advisor and legal fees, employee severance, and other expenses. |
Capital Expenditures and Investments (Unaudited) | |||||||
Three Months Ended | |||||||
(In millions) | 2019(a) | 2018 | |||||
Refining & Marketing | $ | 394 | $ | 191 | |||
Retail | 73 | 39 | |||||
Midstream | 823 | 482 | |||||
Corporate and Other(b) | 41 | 36 | |||||
Total | $ | 1,331 | $ | 748 | |||
(a) | Includes the results of Andeavor from the October 1, 2018 acquisition date forward. |
(b) | Includes capitalized interest of $31 million and $18 million, respectively. |
Refining & Marketing Operating Statistics (Unaudited) | |||||||
Three Months Ended | |||||||
2019 | 2018 | ||||||
Refining & Marketing refined product sales volume (mbpd)(a) | 3,669 | 2,261 | |||||
Refining & Marketing margin (dollars per barrel)(b) | $ | 11.17 | $ | 10.58 | |||
Crude oil capacity utilization (percent)(c) | 95 | 93 | |||||
Refinery throughputs (mbpd):(d) | |||||||
Crude oil refined | 2,869 | 1,745 | |||||
Other charge and blendstocks | 215 | 160 | |||||
Total | 3,084 | 1,905 | |||||
Sour crude oil throughput (percent) | 52 | 52 | |||||
Sweet crude oil throughput (percent) | 48 | 48 | |||||
Refined product yields (mbpd):(d) | |||||||
Gasoline | 1,533 | 917 | |||||
Distillates | 1,091 | 609 | |||||
Propane | 53 | 31 | |||||
Feedstocks and special products | 330 | 287 | |||||
Heavy fuel oil | 45 | 34 | |||||
Asphalt | 80 | 58 | |||||
Total | 3,132 | 1,936 | |||||
Refinery direct operating costs ($/barrel):(e) | |||||||
Planned turnaround and major maintenance | $ | 1.23 | $ | 2.22 | |||
Depreciation and amortization | 1.40 | 1.37 | |||||
Other manufacturing(f) | 5.03 | 4.09 | |||||
Total | $ | 7.66 | $ | 7.68 | |||
Memo: Total includes turnaround costs of ($/barrel): (g) | $ | 0.67 | $ | 1.01 |
(a) | Includes intersegment sales. |
(b) | Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. |
(c) | Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance and other normal operating activities. |
(d) | Excludes inter-refinery volumes of 76 mbpd and 42 mbpd for first quarter 2019 and 2018, respectively. |
(e) | Per barrel of total refinery throughputs. |
(f) | Includes utilities, labor, routine maintenance and other operating costs. |
(g) | Reflects costs for turnaround activity which we expense as incurred. |
Refining & Marketing Operating Statistics by Region (Unaudited) | |||||||
Three Months Ended | |||||||
2019 | 2018 | ||||||
Gulf Coast | |||||||
Refining & Marketing margin (dollars per barrel)(a) | $ | 7.82 | $ | N/A | |||
Refinery throughputs (mbpd):(b) | |||||||
Crude oil refined | 1,171 | 1,056 | |||||
Other charge and blendstocks | 168 | 167 | |||||
Total | 1,339 | 1,223 | |||||
Sour crude oil throughput (percent) | 63 | 60 | |||||
Sweet crude oil throughput (percent) | 37 | 40 | |||||
Refined product yields (mbpd):(b) | |||||||
Gasoline | 573 | 534 | |||||
Distillates | 445 | 360 | |||||
Propane | 28 | 19 | |||||
Feedstocks and special products | 294 | 298 | |||||
Heavy fuel oil | 13 | 23 | |||||
Asphalt | 22 | 17 | |||||
Total | 1,375 | 1,251 | |||||
Refinery direct operating costs ($/barrel):(c) | |||||||
Planned turnaround and major maintenance | $ | 0.70 | $ | 2.87 | |||
Depreciation and amortization | 1.13 | 1.09 | |||||
Other manufacturing(d) | 3.34 | 3.91 | |||||
Total | $ | 5.17 | $ | 7.87 | |||
Memo: Total includes turnaround costs of ($/barrel): (e) | $ | 0.16 | $ | 1.43 | |||
Mid-Continent | |||||||
Refining & Marketing margin (dollars per barrel)(a) | $ | 15.26 | $ | N/A | |||
Refinery throughputs (mbpd):(b) | |||||||
Crude oil refined | 1,057 | 689 | |||||
Other charge and blendstocks | 57 | 35 | |||||
Total | 1,114 | 724 | |||||
Sour crude oil throughput (percent) | 26 | 38 | |||||
Sweet crude oil throughput (percent) | 74 | 62 | |||||
Refined product yields (mbpd):(b) | |||||||
Gasoline | 599 | 383 | |||||
Distillates | 388 | 249 | |||||
Propane | 17 | 12 | |||||
Feedstocks and special products | 39 | 31 | |||||
Heavy fuel oil | 16 | 11 | |||||
Asphalt | 58 | 41 | |||||
Total | 1,117 | 727 | |||||
Refinery direct operating costs ($/barrel):(c) | |||||||
Planned turnaround and major maintenance | $ | 1.26 | $ | 0.99 | |||
Depreciation and amortization | 1.65 | 1.77 | |||||
Other manufacturing(d) | 5.06 | 4.16 | |||||
Total | $ | 7.97 | $ | 6.92 | |||
Memo: Total includes turnaround costs of ($/barrel): (e) | $ | 0.68 | $ | 0.25 | |||
West Coast | |||||||
Refining & Marketing margin (dollars per barrel)(a) | $ | 10.94 | $ | N/A | |||
Refinery throughputs (mbpd):(b) | |||||||
Crude oil refined | 641 | — | |||||
Other charge and blendstocks | 66 | — | |||||
Total | 707 | — | |||||
Sour crude oil throughput (percent) | 73 | — | |||||
Sweet crude oil throughput (percent) | 27 | — | |||||
Refined product yields (mbpd):(b) | |||||||
Gasoline | 361 | — | |||||
Distillates | 258 | — | |||||
Propane | 8 | — | |||||
Feedstocks and special products | 64 | — | |||||
Heavy fuel oil | 25 | — | |||||
Asphalt | — | — | |||||
Total | 716 | — | |||||
Refinery direct operating costs ($/barrel):(c) | |||||||
Planned turnaround and major maintenance | $ | 2.06 | $ | — | |||
Depreciation and amortization | 1.34 | — | |||||
Other manufacturing(d) | 7.68 | — | |||||
Total | $ | 11.08 | $ | — | |||
Memo: Total includes turnaround costs of ($/barrel): (e) | $ | 1.55 | $ | — | |||
(a) | Sales revenue less cost of refinery inputs and purchased products, divided by refinery throughputs, excluding inter-refinery transfer volumes. |
(b) | Includes inter-refinery transfer volumes. |
(c) | Per barrel of total refinery throughputs. |
(d) | Includes utilities, labor, routine maintenance and other operating costs. |
(e) | Reflects costs for turnaround activity which we expense as incurred. |
Retail Operating Statistics (Unaudited) | |||||||
Three Months Ended | |||||||
2019 | 2018 | ||||||
Speedway fuel sales (millions of gallons) | 1,871 | 1,393 | |||||
Direct dealer fuel sales (millions of gallons) | 630 | N/A | |||||
Retail fuel margin (dollars per gallon)(a) | $ | 0.1715 | $ | 0.1561 | |||
Merchandise sales (in millions) | $ | 1,413 | $ | 1,129 | |||
Merchandise margin (in millions) | $ | 407 | $ | 319 | |||
Merchandise margin percent | 28.8 | 28.3 | |||||
Same store gasoline sales volume (period over period)(b) | (3.2) | % | (1.5) | % | |||
Same store merchandise sales (period over period)(b)(c) | 5.4 | % | 2.3 | % | |||
Total convenience stores at period-end | 3,918 | 2,742 | |||||
Direct dealer locations at period-end | 1,062 | N/A |
(a) | Includes bankcard processing fees (as applicable). |
(b) | Same store comparison includes only locations owned at least 13 months. |
(c) | Excludes cigarettes. |
Midstream Operating Statistics (Unaudited) | |||||||
Three Months Ended | |||||||
2019 | 2018 | ||||||
Pipeline throughputs (mbpd)(a) | 5,248 | 3,459 | |||||
Terminal throughput (mbpd) | 3,220 | 1,445 | |||||
Gathering system throughput (million cubic feet per day)(b) | 5,951 | 4,171 | |||||
Natural gas processed (million cubic feet per day)(b) | 8,522 | 6,629 | |||||
C2 (ethane) + NGLs fractionated (mbpd)(b) | 514 | 423 | |||||
(a) | Includes common-carrier pipelines and private pipelines contributed to MPLX. Excludes equity method affiliate pipeline volumes. |
(b) | Includes amounts related to unconsolidated equity method investments on a 100% basis. |
Select Financial Data (Unaudited) | |||||||
(In millions) | March 31, | December 31 | |||||
Cash and cash equivalents | $ | 877 | $ | 1,687 | |||
MPLX debt | 13,833 | 13,393 | |||||
ANDX debt | 5,132 | 4,973 | |||||
Total consolidated debt | 28,115 | 27,524 | |||||
Redeemable noncontrolling interest | 1,004 | 1,004 | |||||
Equity | 42,858 | 44,049 | |||||
Shares outstanding | 667 | 680 | |||||
Three Months Ended | |||||||
2019 | 2018 | ||||||
Cash provided by (used in) operations | $ | 1,623 | $ | (137) | |||
Dividends paid per share | $ | 0.53 | $ | 0.46 | |||
Non-GAAP Financial Measures
Management uses certain financial measures to evaluate our operating performance that are calculated and presented on the basis of methodologies other than in accordance with GAAP. We believe these non-GAAP financial measures are useful to investors and analysts to assess our ongoing financial performance because, when reconciled to its most comparable GAAP financial measure, they provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies. The non-GAAP financial measures we use are as follows:
Adjusted EBITDA & Segment EBITDA
Adjusted EBITDA represents earnings before net interest and other financial costs, income taxes, depreciation and amortization expense as well as adjustments to exclude items not allocated to segment results. Segment EBITDA represents segment earnings before net interest and other financial costs, income taxes, depreciation and amortization expense. We believe these non-GAAP financial measures are useful to investors and analysts to analyze and compare our operating performance between periods by excluding items that do not reflect the core operating results of our business. Adjusted EBITDA and Segment EBITDA should not be considered as a substitute for, or superior to segment income (loss) from operations, net income attributable to MPC, income before income taxes, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. Adjusted EBITDA and Segment EBITDA may not be comparable to similarly titled measures reported by other companies.
Reconciliation of Net Income (Loss) Attributable to MPC to Adjusted EBITDA | |||||||
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
Net income (loss) attributable to MPC | $ | (7) | $ | 37 | |||
Plus (Less): | |||||||
Net interest and other financial costs | 306 | 183 | |||||
Net income attributable to noncontrolling interests | 266 | 198 | |||||
Provision for income taxes | 104 | 22 | |||||
Depreciation and amortization | 919 | 528 | |||||
Capline restructuring gain | (207) | — | |||||
Transaction-related costs | 91 | — | |||||
Adjusted EBITDA | $ | 1,472 | $ | 968 |
Reconciliation of Segment Income (Loss) From Operations to Segment EBITDA and Adjusted EBITDA | |||||||
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
Refining & Marketing Segment | |||||||
Segment loss from operations | $ | (334) | $ | (133) | |||
Add: Depreciation and amortization | 427 | 252 | |||||
Segment EBITDA | $ | 93 | $ | 119 | |||
Retail Segment | |||||||
Segment income from operations | $ | 170 | $ | 95 | |||
Add: Depreciation and amortization | 126 | 79 | |||||
Segment EBITDA | $ | 296 | $ | 174 | |||
Midstream Segment | |||||||
Segment income from operations | $ | 908 | $ | 567 | |||
Add: Depreciation and amortization | 307 | 181 | |||||
Segment EBITDA | $ | 1,215 | $ | 748 | |||
Segment EBITDA | $ | 1,604 | $ | 1,041 | |||
Corporate and other unallocated items | (191) | (89) | |||||
Add: Depreciation and amortization | 59 | 16 | |||||
Adjusted EBITDA | $ | 1,472 | $ | 968 |
Refining & Marketing Margin
Refining margin is defined as sales revenue less the cost of refinery inputs and purchased products and excludes any LCM inventory market adjustment.
Reconciliation of Refining & Marketing Loss from Operations to Refining & Marketing Margin | |||||||
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
Refining & Marketing loss from operations | $ | (334) | $ | (133) | |||
Plus (Less): | |||||||
Refinery direct operating costs(a) | 1,739 | 1,081 | |||||
Refinery depreciation and amortization | 387 | 236 | |||||
Other: | |||||||
Operating expenses(a)(b) | 1,268 | 614 | |||||
Depreciation and amortization | 40 | 16 | |||||
Refining & Marketing margin | $ | 3,100 | $ | 1,814 | |||
Refining & Marketing margin by region: | |||||||
Gulf Coast | $ | 917 | $ | N/A | |||
Mid-Continent | 1,517 | N/A | |||||
West Coast | 666 | N/A | |||||
Refining & Marketing margin | $ | 3,100 | $ | N/A |
(a) | Excludes depreciation and amortization. |
(b) | These costs are primarily related to refined product distribution costs, including fees paid to our two sponsored master limited partnerships, MPLX and ANDX (for 1Q 2019 only). Included in these costs were fees paid to MPLX of $609 million and $478 million for the first quarters of 2019 and 2018, respectively. MPLX's and ANDX's results are reported in MPC's Midstream segment. |
Retail Fuel Margin
Retail fuel margin is defined as the price paid by consumers or direct dealers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees (where applicable) and excluding any LCM inventory market adjustment.
Retail Merchandise Margin
Retail merchandise margin is defined as the price paid by consumers less the cost of merchandise.
Reconciliation of Retail Income from Operations to Retail Total Margin | |||||||
Three Months Ended | |||||||
(in millions) | 2019 | 2018 | |||||
Retail income from operations | $ | 170 | $ | 95 | |||
Plus (Less): | |||||||
Operating, selling, general and administrative expenses | 583 | 384 | |||||
Depreciation and amortization | 126 | 79 | |||||
Income from equity method investments | (17) | (14) | |||||
Net gain on disposal of assets | (2) | — | |||||
Other income | (2) | (1) | |||||
Retail total margin | $ | 858 | $ | 543 | |||
Retail total margin: | |||||||
Fuel margin | $ | 429 | $ | 217 | |||
Merchandise margin | 407 | 319 | |||||
Other margin | 22 | 7 | |||||
Retail total margin | $ | 858 | $ | 543 |
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-first-quarter-results-300846175.html
SOURCE Marathon Petroleum Corporation
FINDLAY, Ohio, May 8, 2019 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC), MPLX LP (NYSE: MPLX), and Andeavor Logistics LP (NYSE: ANDX) today announced that the two midstream companies have entered into a definitive merger agreement whereby MPLX will acquire ANDX in a unit-for-unit transaction at a blended exchange ratio of 1.07x. This represents an equity value of approximately $9 billion and an enterprise value of $14 billion for the acquired entity. The transaction has been unanimously approved by MPLX's and ANDX's respective Conflicts Committees and both Boards of Directors. Subject to the satisfaction of customary closing conditions and receipt of regulatory approvals, the transaction is expected to close in the second half of 2019.
Under the terms of the merger agreement, ANDX public unitholders will receive 1.135x MPLX common units for each ANDX common unit held, representing a premium of 7.3%, and MPC will receive 1.0328x MPLX common units for each ANDX common unit held, representing a 2.4% discount. The blended exchange ratio of 1.07x represents a 1% premium to market1.
"This transaction simplifies our MLPs into a single listed entity and creates a leading, large-scale, diversified midstream company anchored by fee-based cash flows," said Gary R. Heminger, chairman and chief executive officer. "This transaction is projected to be immediately accretive to MPLX unitholders on distributable cash flow, demonstrating MPC's commitment to positioning its midstream business for long-term success. The combined entity will have an expanded geographic footprint which we believe enhances our long-term growth opportunities and the sustainable cash flow profile of the business. We are confident about the midstream growth and value-creation opportunities that exist across this combined platform in the best basins in the U.S."
Mike Hennigan will remain President of the combined entity and lead all midstream activities.
Strategic Rationale
Approvals and Timing
The transaction has been unanimously approved by MPLX's and ANDX's respective Conflicts Committees and both Boards of Directors. As part of the transaction, ANDX's General Partner and an MPC subsidiary, together representing approximately 64% of ANDX's common units, have entered into a support agreement pursuant to which those entities have agreed to deliver written consents approving the transaction. ANDX expects to maintain its current distribution level through close. The transaction is expected to close in the second half of 2019, subject to customary closing conditions.
Investor Presentation, Conference Call, Webcast
MPLX and ANDX will hold a conference call and webcast at 8:30 a.m. EDT today to discuss the transaction. Interested parties may listen to the conference call by dialing 1-888-455-2707 (confirmation number 2634753) or by visiting MPLX's website at http://www.mplx.com and clicking on the "Events and Presentations" link in the "Investor Center" tab or ANDX's website at http://www.andeavorlogistics.com and clicking on the "Events and Presentations" link in the "Investor" tab. A replay of the webcast will be available on MPLX's and ANDX's websites for two weeks. An investor presentation will also be available online prior to the conference call and webcast at http://ir.mplx.com and http://ir.andeavorlogistics.com.
MPLX and ANDX First-Quarter 2019 Earnings Announcements
MPLX and ANDX also issued their respective first-quarter 2019 financial results this morning. Management will be available to answer questions about the earnings releases on today's conference call. MPLX's and ANDX's previously announced first-quarter 2019 earnings conference calls and webcasts, which had been scheduled for Wednesday, May 8, at 11 a.m. EDT and 1 p.m EDT, respectively, have been canceled.
Advisors
In connection with the transaction, Barclays acted as an exclusive financial advisor and Jones Day acted as legal advisor to MPC, Jefferies LLC acted as financial advisor and Latham & Watkins LLP acted as legal advisor to the Conflicts Committee of MPLX, and Goldman, Sachs & Co. LLC acted as exclusive financial advisor and Sidley Austin LLP acted as legal advisor to the Conflicts Committee of ANDX.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with more than 3.0 million barrels per day of crude oil capacity across sixteen refineries. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure. More information is available at www.marathonpetroleum.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
About Andeavor Logistics LP
Andeavor Logistics LP is a fee-based, full-service, diversified midstream logistics company, with integrated assets across the western and mid-continent regions of the United States. Andeavor Logistics operates through three business segments: Terminalling and Transportation, Gathering and Processing and Wholesale. The Terminalling and Transportation segment consists of marine terminals, refined product truck terminals, rail terminals, dedicated storage facilities and transportation pipelines. The Gathering and Processing segment consists of crude oil gathering systems and pipelines as well as natural gas gathering pipelines, processing facilities and fractionation facilities. The Wholesale segment consists of a fee-based fuel wholesale business. Andeavor Logistics is a Delaware limited partnership headquartered in Findlay, Ohio.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX) and Andeavor Logistics LP (ANDX). These forward-looking statements relate to, among other things, the proposed acquisition of ANDX by MPLX and include expectations, estimates and projections concerning the business and operations, financial priorities and strategic plans of the combined entity. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 companies' control and are difficult to predict. Factors that could cause MPLX's or ANDX's actual results to differ materially from those implied in the forward-looking statements include: the ability to complete the proposed transaction between MPLX and ANDX on the proposed terms and timetable; the ability to satisfy various conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain regulatory approvals for the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entity in connection with the consummation of the proposed transaction; the risk that anticipated opportunities and any other synergies from or anticipated benefits of the proposed transaction may not be fully realized or may take longer to realize than expected, including whether the proposed transaction will be accretive within the expected timeframe or at all; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of MPLX or ANDX; the amount and timing of future distributions; negative capital market conditions, including an increase of the current yield on common units; the ability to achieve strategic and financial objectives, including with respect to distribution coverage, future distribution levels, proposed projects and completed transactions; 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 Marathon Petroleum Corporation's (MPC) obligations under MPLX's and ANDX'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 and ANDX's industry; risks related to MPC; and the factors set forth under the heading "Risk Factors" in MPLX's and ANDX's respective Annual Reports on Form 10-K for the year ended Dec. 31, 2018, 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: 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 as set forth above related to the acquisition of ANDX by MPLX; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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 or 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 any common stock repurchases; the adequacy of capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute business plans and to effect any share repurchases or dividend increases, including within the expected timeframe; 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 or ANDX; 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, filed with the SEC.
We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed transaction, a registration statement on Form S-4 will be filed with the SEC. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE CONSENT STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final consent statement/prospectus will be sent to unitholders of ANDX. Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, from ANDX at its website, http://ir.andeavorlogistics.com, or by contacting ANDX's Investor Relations at (419) 421-2414, or from MPLX at its website, http://ir.mplx.com, or by contacting MPLX's Investor Relations at (419) 421-2414.
Participants in Solicitation
MPLX, ANDX, MPC and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of consents in respect of the proposed transaction. Information concerning MPLX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed Feb. 28, 2019. Information concerning ANDX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed Feb. 28, 2019. Information concerning MPC's executive officers is set forth in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed Feb. 28, 2019. Information about MPC's directors is set forth in MPC's Definitive Proxy Statement on Schedule 14A for its 2019 Annual Meeting of Shareholders, which was filed with the SEC on March 14, 2019. Investors and security holders will be able to obtain the documents free of charge from the sources indicated above, and with respect to MPC, from its website, https://www.marathonpetroleum.com/Investors, or by contacting MPC's Investor Relations at (419) 421-2414. Additional information regarding the interests of such participants in the solicitation of consents in respect of the proposed transaction will be included in the registration statement and consent statement/prospectus and other relevant materials to be filed with the SEC when they become available.
1 Based on May 2, 2019 closing prices
2 Based on projections as of announcement
Investor Relations Contacts: | |
Kristina Kazarian – Vice President, Investor Relations | (419) 421-2071 |
Doug Wendt – Manager, Investor Relations | (419) 421-2423 |
Evan Barbosa – Manager, Investor Relations | (419) 421-2539 |
Jim Clarke – Manager, Investor Relations | (419) 421-4165 |
Media Contacts: | |
Chuck Rice – Director, Communications and Corporate Affairs | (419) 421-2521 |
View original content:http://www.prnewswire.com/news-releases/mplx-lp-announces-agreement-to-acquire-andeavor-logistics-lp-300846153.html
SOURCE MPLX LP; Andeavor Logistics LP
FINDLAY, Ohio, April 29, 2019 /PRNewswire/ -- The board of directors of the general partner of MPLX LP (NYSE: MPLX) has declared a quarterly cash distribution of $0.6575 per common unit for the first quarter 2019, or $2.63 on an annualized basis.
This represents an increase of $0.01 per unit, or 1.5 percent, over the fourth quarter 2018 distribution, and an increase of $0.04 per unit, or 6.5 percent, over the first quarter 2018 distribution. This is the 25th consecutive quarterly distribution increase and will be paid on May 15, 2019, to common unitholders of record as of May 9, 2019.
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100 percent of MPLX's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MPLX's distributions to non-United States investors are subject to federal income tax withholding at the highest applicable effective tax rate.
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 Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/mplx-lp-increases-quarterly-distribution-300840095.html
SOURCE MPLX LP
FINDLAY, Ohio, April 8, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call with analysts on Wednesday, May 8, at 11 a.m. EDT to discuss 2019 first-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPLX's website at http://www.mplx.com and clicking on the "2019 First-Quarter Financial Results" link. A replay of the webcast will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
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:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/mplx-lp-to-announce-2019-first-quarter-financial-results-may-8-300826017.html
SOURCE MPLX LP
FINDLAY, Ohio, March 1, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) today announced that the company's 2018 investor tax packages are now available on its website, http://www.mplx.com. Investors may select the Tax Reporting Package link under the Investors tab, or use the following link: http://www.mplx.com/Investors/Tax_Reporting_Package/
Additionally, MPLX plans to mail tax packages on March 8, 2019. Questions regarding the Tax Reporting Package for the year ended December 31, 2018, can be addressed by contacting 800-232-0011 (toll free).
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 http://www.mplx.com.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/mplx-lp-2018-k-1-tax-packages-now-available-on-company-website-300805207.html
SOURCE MPLX LP
FINDLAY, Ohio, Feb. 28, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) today filed with the U.S. Securities and Exchange Commission its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2018. The filing can be viewed through a link on MPLX's website at http://www.mplx.com by selecting the "SEC Filings" link under the "Investors" tab.
Upon written request, unitholders may receive, free of charge, a hard copy of MPLX's Annual Report on Form 10-K (including complete audited financial statements). Requests should be communicated in writing to MPLX LP, Attention: Investor Relations, 200 E. Hardin Street, Findlay, OH 45840.
About MPLX
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 Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/mplx-lp-files-2018-form-10-k-300804451.html
SOURCE MPLX LP
DALLAS, Feb. 21, 2019 /PRNewswire/ -- Cushing® Asset Management, LP, and Swank Capital, LLC, announce today the upcoming rebalancing of The Cushing® Utility Index (the "Index") as part of normal index operations. After the markets close on February 28, 2019, the constituents of the Index will be rebalanced, and the following changes will become effective on March 1, 2019:
Constituents added:
Genesis Energy, L.P. (NYSE: GEL)
EnLink Midstream, LLC (NYSE: ENLC)
Tallgrass Energy, LP (NYSE: TGE)
Sunoco LP (NYSE: SUN)
Atmos Energy Corporation (NYSE: ATO)
Constituents removed:
Alliance Resource Partners, L.P. (NASDAQ: ARLP)
Andeavor Logistics LP (NYSE: ANDX)
Crestwood Equity Partners LP (NYSE: CEQP)
MPLX LP (NYSE: MPLX)
ABOUT THE CUSHING® UTILITY INDEX
The Cushing® Utility Index tracks the performance of widely held companies engaged in electric, gas and water utility services as well as master limited partnerships (MLPs) engaged in storage and transportation of oil, natural gas, coal and consumable fuels. Constituents of the Index are weighted based on current yield. The Index price level is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "CUTI".
ABOUT CUSHING® ASSET MANAGEMENT AND SWANK CAPITAL
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts which invest primarily in securities of midstream energy infrastructure companies and other natural resource companies.
Cushing is also dedicated to serving the needs of investors by sponsoring a variety of benchmarks, including The Cushing® 30 MLP Index (Bloomberg Ticker: MLPX), The Cushing® 30 MLP Market Cap Index (Bloomberg Ticker: CMCI), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY), The Cushing® Energy Index (Bloomberg Ticker: CENI), The Cushing® Energy Supply Chain Index (Bloomberg Ticker: CSCI) and The Cushing® Transportation Index (Bloomberg Ticker: CTRI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Brian Atwood
214-692-6334
www.cushingasset.com
The Cushing® Utility Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
CUSH-CUTI
View original content:http://www.prnewswire.com/news-releases/cushing-asset-management-and-swank-capital-announce-rebalancing-of-the-cushing-utility-index-300799539.html
SOURCE Cushing Asset Management, LP; Swank Capital, LLC
DALLAS, Feb. 21, 2019 /PRNewswire/ -- Cushing® Asset Management, LP, and Swank Capital, LLC, announce today the upcoming rebalancing of The Cushing® Energy Index (the "Index") as part of normal index operations. After the markets close on February 28, 2019, the constituents of the Index will be rebalanced, and the following changes will become effective on March 1, 2019:
Constituents added:
Genesis Energy, L.P. (NYSE: GEL)
EnLink Midstream, LLC (NYSE: ENLC)
Tallgrass Energy, LP (NYSE: TGE)
Sunoco LP (NYSE: SUN)
Constituents removed:
Alliance Resource Partners, L.P. (NASDAQ: ARLP)
Andeavor Logistics LP (NYSE: ANDX)
Crestwood Equity Partners LP (NYSE: CEQP)
MPLX LP (NYSE: MPLX)
ABOUT THE CUSHING® ENERGY INDEX
The Cushing® Energy Index tracks the performance of widely held companies engaged in exploration and production, refining and marketing, and storage and transportation of oil, natural gas, coal and consumable fuels, as well as oil and natural gas equipment and services companies. Constituents of the Index are weighted based on current yield. The Index price level is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "CENI".
ABOUT CUSHING® ASSET MANAGEMENT AND SWANK CAPITAL
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts which invest primarily in securities of midstream energy infrastructure companies and other natural resource companies.
Cushing is also dedicated to serving the needs of investors by sponsoring a variety of benchmarks, including The Cushing® 30 MLP Index (Bloomberg Ticker: MLPX), The Cushing® 30 MLP Market Cap Index (Bloomberg Ticker: CMCI), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY), The Cushing® Energy Supply Chain Index (Bloomberg Ticker: CSCI), The Cushing® Transportation Index (Bloomberg Ticker: CTRI) and The Cushing® Utility Index (Bloomberg Ticker: CUTI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Brian Atwood
214-692-6334
www.cushingasset.com
The Cushing® Energy Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
CUSH-CENI
View original content:http://www.prnewswire.com/news-releases/cushing-asset-management-and-swank-capital-announce-rebalancing-of-the-cushing-energy-index-300799547.html
SOURCE Cushing Asset Management, LP; Swank Capital, LLC
FINDLAY, Ohio, Feb. 7, 2019 /PRNewswire/ --
MPLX LP (NYSE: MPLX) today reported fourth quarter 2018 net income attributable to MPLX of $434 million and full-year 2018 net income attributable to MPLX of $1.8 billion, compared with $238 million and $0.8 billion for the fourth quarter and full year 2017, respectively, which was an increase of $1.0 billion on a year-over-year basis. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $3.5 billion for the full year, which was nearly $1.5 billion higher than 2017. The increase was driven by dropdowns in the L&S segment and strong base business performance across both segments.
"2018 was a transformational year for MPLX," said Gary R. Heminger, chairman and chief executive officer. "Our team executed on the strategic vision outlined at the beginning of the year by significantly growing the business, enhancing the stability of the cash flow profile, and simplifying our financial structure.
"Looking forward, we continue to focus on increasing our presence throughout the midstream value chain as well as developing assets that generate third-party revenue. We announced a number of compelling new projects, including anticipated investments in multiple long-haul pipelines and export facilities that we expect to deliver long-term attractive returns for our shareholders and position the company for success in 2019 and beyond."
For the year, the company generated $2.8 billion in net cash provided by operating activities and distributable cash flow of $2.8 billion, returning $2.1 billion to unitholders. Consistent with its self-funding strategy, the company did not issue any public equity in 2018 and ended the year with leverage of 3.9x.
Financial Highlights
Three Months Ended | Year Ended | ||||||||||||||||||
(In millions, except per unit and ratio data) | 2018 | 2017 | 2018 | 2017 | |||||||||||||||
Net income attributable to MPLX(a) | $ | 434 | $ | 238 | $ | 1,818 | $ | 794 | |||||||||||
Adjusted EBITDA attributable to MPLX(b) | 911 | 569 | 3,475 | 2,004 | |||||||||||||||
Net cash provided by operating activities | 799 | 569 | 2,826 | 1,907 | |||||||||||||||
Distributable cash flow ("DCF")(b) | 701 | 445 | 2,781 | 1,628 | |||||||||||||||
Distribution per common unit(c) | $ | 0.6475 | $ | 0.6075 | $ | 2.5300 | $ | 2.2975 | |||||||||||
Distribution coverage ratio(d) | 1.32x | 1.24x | 1.36x | 1.28x | |||||||||||||||
Consolidated debt to adjusted EBITDA(e) | 3.9x | 3.6x | 3.9x | 3.6x | |||||||||||||||
(a) | Includes $60 million of debt extinguishment charges. |
(b) | Non-GAAP measure calculated before distributions to preferred unitholders. See reconciliation below. |
(c) | Distributions declared by the board of directors of MPLX's general partner. |
(d) | Non-GAAP measure. See calculation below. |
(e) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. See reconciliation below. |
During the quarter, MPLX generated $799 million in net cash provided by operating activities and distributable cash flow of $701 million. Fourth quarter 2018 results were impacted by several items that reduced net income attributable to MPLX by approximately $82 million. Debt extinguishment costs were $60 million, of which nearly $14 million were cash costs, and approximately $22 million of the impact was associated with unplanned downtime at the Houston complex, NGL production curtailments due to the delayed startup of the Mariner East 2 pipeline, and contract related accrual adjustments. Adjusted EBITDA attributable to MPLX was reduced by approximately $22 million for these items.
Segment Results
(In millions) | Three Months Ended | Year Ended | |||||||||||||
Segment income from operations (unaudited) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Logistics and Storage | $ | 449 | $ | 161 | $ | 1,736 | $ | 602 | |||||||
Gathering and Processing | 217 | 174 | 767 | 589 | |||||||||||
Segment adjusted EBITDA attributable to MPLX | |||||||||||||||
Logistics and Storage | 547 | 231 | 2,057 | 775 | |||||||||||
Gathering and Processing | $ | 364 | $ | 338 | $ | 1,418 | $ | 1,229 | |||||||
Logistics & Storage
L&S segment income from operations and adjusted EBITDA for 2018 increased by $1.1 billion and $1.3 billion, respectively, compared with the prior year. The increase was primarily due to dropdowns of certain refining logistics assets and the fuels distribution service business as well as record crude oil and product pipeline throughputs.
Total pipeline throughputs were 3.36 million barrels per day in 2018, an increase of 11 percent versus the prior year, primarily due to the expansion of the Ozark and Wood River-to-Patoka pipeline systems. The average tariff rate was $0.66 per barrel for the year. Terminal throughput was 1.48 million barrels per day in 2018, which is consistent with the prior year.
Gathering & Processing
G&P segment income from operations and segment adjusted EBITDA both increased by $0.2 billion for 2018 compared with 2017. The increase was primarily due to record gathered, processed and fractionated volumes and a benefit from higher product margins.
Regionally, the company delivered significant volume growth in the Northeast in 2018. Gathered volumes averaged 3.0 billion cubic feet per day (bcf/d) for the year, a 35 percent increase versus 2017, driven primarily by higher Utica dry-gas and Marcellus wet-gas volumes. Processed volumes averaged 5.3 bcf/d, a 10 percent increase versus the prior year. Fractionated volumes averaged 426,000 barrels per day, an 18 percent increase versus 2017.
MPLX commissioned the Sherwood 10, Sherwood 11, and Harmon Creek plants during the fourth quarter. The company also completed fractionation plants at Sherwood, Harmon Creek, and Hopedale during the quarter. In total, the company commissioned 8 plants in the Northeast in 2018, adding 1.2 bcf/d of processing capacity and 100,000 barrels per day of fractionation capacity for the year.
In the Southwest, gathered volumes averaged 1.6 bcf/d in 2018, an 11 percent increase versus the prior year. Processed volumes averaged 1.4 bcf/d for the year, an 8 percent increase versus 2017. The company added 275 million cubic feet per day of processing capacity in 2018.
Financial Position and Liquidity
As of December 31, 2018, MPLX had $68 million in cash, $2.2 billion available through its bank revolving credit facility expiring in July 2022, and $1 billion available through its credit facility with MPC.
On December 10, 2018, MPLX redeemed all $750 million aggregate principal amount of its 5.5% senior notes due February 15, 2023. These notes were redeemed at 101.833 percent of the principal amount and resulted in a payment of approximately $14 million related to the note premium and the immediate recognition of $46 million of unamortized debt issuance costs.
The company's $3.3 billion of available liquidity, its distribution coverage and its access to the capital markets should provide it with sufficient flexibility to meet its day-to-day operational needs and continue investing in organic growth opportunities. The company's leverage ratio was 3.9 times at December 31, 2018. MPLX remains committed to maintaining an investment-grade credit profile and self-funding strategy for its organic growth capital needs.
2019 and 2020 Financial Outlook
In December 2018, MPLX provided its 2019 and 2020 capital investment plans. This strategic deployment of capital combined with growth in the underlying base business is expected to generate $2.2 billion and $2.5 billion of net income in 2019 and 2020, and $3.9 billion and $4.4 billion of annual adjusted EBITDA, respectively.
Key new project announcements include Permian long-haul crude oil, natural gas and NGL pipelines and export facilities which would enhance the full value chain capture in the L&S segment. The company also expects to add approximately 800 million cubic feet per day of processing capacity and 100,000 barrels per day of fractionation capacity in 2019 to the G&P segment.
The partnership plans to fund approximately 50% of its organic growth capital plan with cash from operating activities, while maintaining strong coverage and an investment grade credit profile. MPLX does not anticipate the need to issue public equity in 2019 or 2020 to fund its organic growth capital.
Conference Call
At 11 a.m. EST 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 "2018 Fourth-Quarter and Full-Year Financial Results" link in the "News & Headlines" section. A replay of the webcast will be available on MPLX's website for two weeks. Financial information, including earnings release and other investor-related material, will also be available online prior to the conference call and webcast at http://ir.mplx.com.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
Non-GAAP references
In addition to our financial information presented in accordance with U.S. generally accepted accounting principles (GAAP), management utilizes additional non-GAAP measures to facilitate comparisons of past performance and future periods. This press release and supporting schedules include the non-GAAP measures adjusted EBITDA and consolidated debt to last twelve months pro forma adjusted EBITDA, which we refer to as our leverage ratio, distributable cash flow (DCF) and distribution coverage ratio. The amount of adjusted EBITDA and DCF generated is considered by the board of directors of our general partner in approving the Partnership's cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) provision for income taxes; (iii) amortization of deferred financing costs; (iv) non-cash equity-based compensation; (v) net interest and other financial costs; (vi) income from equity method investments; (vii) distributions and adjustments related to equity method investments; (viii) unrealized derivative gains and losses; (ix) acquisition costs; (x) noncontrolling interest and (xi) other adjustments as deemed necessary. In general, we define DCF as adjusted EBITDA adjusted for (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items.
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record the realized gain or loss of the contract.
Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures.
DCF is a financial performance measure used by management as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders.
Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between the partnership's financial operating performance and cash distribution capability. We define the distribution coverage ratio as the ratio of DCF attributable to GP and LP unitholders to total GP and LP distributions declared.
Leverage ratio is a liquidity measure used by management, industry analysts, investors, lenders and rating agencies to analyze our ability to incur and service debt and fund capital expenditures.
Forward-looking statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations, strategy and value creation plans of MPLX. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "policy, " "position," "potential," "predict," "priority, " "project," "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: negative capital market conditions, including an increase of the current yield on common units, adversely affecting MPLX's ability to meet its distribution growth guidance; the ability to achieve strategic and financial objectives, including with respect to proposed projects and transactions; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of MPLX's capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt on commercially reasonable terms, and the ability to successfully execute its business plans, growth strategy and self-funding model; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects 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 earnings and distribution growth objectives; 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; changes to MPLX's capital budget; other risk factors inherent to MPLX's industry; risks related to MPC as set forth below, including those related to MPC's acquisition of Andeavor or the potential merger, consolidation or combination of MPLX with ANDX; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2017, and in MPLX's Forms 10-Q, filed with the Securities and Exchange Commission (SEC). Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: 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; the potential merger, consolidation or combination of MPLX with ANDX; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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 or 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 any common stock repurchases; the adequacy of capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute business plans and to effect any share repurchases or dividend increases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on MPC's 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 or ANDX; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2017, and in MPC's Forms 10-Q, filed with the SEC. We have based our forward-looking statements on our current expectations, estimates and projections about our 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 http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office.
Condensed Results of Operations (unaudited) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions, except per unit data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Revenues and other income: | |||||||||||||||
Operating revenue | $ | 847 | $ | 658 | $ | 3,153 | $ | 2,322 | |||||||
Operating revenue - related parties | 778 | 355 | 2,926 | 1,369 | |||||||||||
Income (loss) from equity method investments | 65 | 49 | 240 | 78 | |||||||||||
Other income | 25 | 23 | 106 | 98 | |||||||||||
Total revenues and other income | 1,715 | 1,085 | 6,425 | 3,867 | |||||||||||
Costs and expenses: | |||||||||||||||
Operating expenses | 522 | 375 | 1,928 | 1,241 | |||||||||||
Operating expenses - related parties | 235 | 126 | 865 | 457 | |||||||||||
Depreciation and amortization | 201 | 168 | 766 | 683 | |||||||||||
General and administrative expenses | 74 | 67 | 291 | 241 | |||||||||||
Other taxes | 17 | 14 | 72 | 54 | |||||||||||
Total costs and expenses | 1,049 | 750 | 3,922 | 2,676 | |||||||||||
Income from operations | 666 | 335 | 2,503 | 1,191 | |||||||||||
Interest and other financial costs | 227 | 96 | 661 | 354 | |||||||||||
Income before income taxes | 439 | 239 | 1,842 | 837 | |||||||||||
(Benefit) provision for income taxes | — | (2) | 8 | 1 | |||||||||||
Net income | 439 | 241 | 1,834 | 836 | |||||||||||
Less: Net income (loss) attributable to noncontrolling interests | 5 | 3 | 16 | 6 | |||||||||||
Less: Net income attributable to Predecessor(a) | — | — | — | 36 | |||||||||||
Net income attributable to MPLX LP | 434 | 238 | 1,818 | 794 | |||||||||||
Less: Preferred unit distributions | 20 | 16 | 75 | 65 | |||||||||||
Less: General partner's interest in net income attributable to | — | 96 | — | 318 | |||||||||||
Limited partners' interest in net income attributable to | $ | 414 | $ | 126 | $ | 1,743 | $ | 411 | |||||||
Per Unit Data | |||||||||||||||
Net income attributable to MPLX LP per limited partner unit: | |||||||||||||||
Common - basic | $ | 0.52 | $ | 0.31 | $ | 2.29 | $ | 1.07 | |||||||
Common - diluted | 0.52 | 0.31 | 2.29 | 1.06 | |||||||||||
Weighted average limited partner units outstanding: | |||||||||||||||
Common units – basic | 794 | 407 | 761 | 385 | |||||||||||
Common units – diluted | 794 | 407 | 761 | 388 | |||||||||||
(a) | The pipeline, storage and terminals businesses acquired on March 1, 2017 ("Predecessor"). |
Select Financial Statistics (unaudited) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions, except ratio data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Distribution declared | |||||||||||||||
Common units (LP) - public | $ | 187 | $ | 175 | $ | 732 | $ | 656 | |||||||
Common units - MPC(a) | 327 | 171 | 1,253 | 338 | |||||||||||
GP units - MPC | — | — | — | 18 | |||||||||||
Incentive distribution rights - MPC | — | — | — | 211 | |||||||||||
Total GP and LP distribution declared | 514 | 346 | 1,985 | 1,223 | |||||||||||
Redeemable preferred units(b) | 20 | 16 | 75 | 65 | |||||||||||
Total distribution declared | $ | 534 | $ | 362 | $ | 2,060 | $ | 1,288 | |||||||
Distribution coverage ratio(c) | 1.32x | 1.24x | 1.36x | 1.28x | |||||||||||
Cash Flow Data | |||||||||||||||
Net cash flow provided by (used in): | |||||||||||||||
Operating activities | $ | 799 | $ | 569 | $ | 2,826 | $ | 1,907 | |||||||
Investing activities | (659) | (472) | (2,686) | (2,308) | |||||||||||
Financing activities | (103) | (97) | (73) | 171 | |||||||||||
Other Financial Data | |||||||||||||||
Adjusted EBITDA attributable to MPLX LP(d) | 911 | 569 | 3,475 | 2,004 | |||||||||||
DCF attributable to GP and LP unitholders(d) | $ | 681 | $ | 429 | $ | 2,706 | $ | 1,563 | |||||||
(a) | MPC agreed to waive $23.7 million in common unit distributions associated with the units received in connection with the Feb. 1 dropdown. |
(b) | The preferred units are considered redeemable securities due to the existence of redemption provisions upon a deemed liquidation event which is outside our control. These units rank senior to all common units with respect to distributions and rights upon liquidation and effective May 13, 2018, on an as-converted basis, preferred unit holders receive the greater of $0.528125 per unit or the amount of per unit distributions paid to holders of MPLX LP common units. |
(c) | DCF attributable to GP and LP unitholders divided by total GP and LP distribution declared. |
(d) | Non-GAAP measure. See reconciliation below. |
Select Balance Sheet Data (unaudited) | |||||||
(In millions, except ratio data) | Dec. 31, 2018 | Dec. 31, 2017 | |||||
Cash and cash equivalents | $ | 68 | $ | 5 | |||
Total assets | 22,779 | 19,500 | |||||
Total debt(a) | 13,393 | 7,332 | |||||
Redeemable preferred units | 1,004 | 1,000 | |||||
Total equity | $ | 6,864 | $ | 9,973 | |||
Consolidated total debt to adjusted EBITDA(b) | 3.9x | 3.6x | |||||
Partnership units outstanding: | |||||||
GP units | — | 8 | |||||
MPC-held common units | 505 | 118 | |||||
Public common units | 289 | 289 | |||||
(a) | Total debt includes $0 million and $386 million of outstanding intercompany borrowings classified in current liabilities as of December 31, 2018 and 2017, respectively. |
(b) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. Face value total debt includes approximately $463 million and $416 million of unamortized discount and debt issuance costs as of December 31, 2018, and 2017, respectively. |
Operating Statistics (unaudited) | |||||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||
2018 | 2017 | % | 2018 | 2017 | % | ||||||||||||||||
Logistics and Storage | |||||||||||||||||||||
Pipeline throughput (mbpd) | |||||||||||||||||||||
Crude oil pipelines | 2,273 | 2,041 | 11 | % | 2,180 | 1,936 | 13 | % | |||||||||||||
Product pipelines | 1,295 | 1,186 | 9 | % | 1,175 | 1,085 | 8 | % | |||||||||||||
Total pipelines | 3,568 | 3,227 | 11 | % | 3,355 | 3,021 | 11 | % | |||||||||||||
Average tariff rates ($ per barrel) | |||||||||||||||||||||
Crude oil pipelines | $ | 0.60 | $ | 0.55 | 9 | % | $ | 0.59 | $ | 0.56 | 5 | % | |||||||||
Product pipelines | 0.78 | 0.73 | 7 | % | 0.79 | 0.74 | 7 | % | |||||||||||||
Total pipelines | 0.66 | 0.62 | 6 | % | 0.66 | 0.63 | 5 | % | |||||||||||||
Terminal throughput (mbpd) | 1,521 | 1,497 | 2 | % | 1,481 | 1,477 | — | % | |||||||||||||
Barges at period-end | 256 | 232 | 10 | % | 256 | 232 | 10 | % | |||||||||||||
Towboats at period-end | 23 | 18 | 28 | % | 23 | 18 | 28 | % |
Gathering and Processing Operating | Three Months Ended | Year Ended | |||||||||||||||||||
2018 | 2017 | % | 2018 | 2017 | % | ||||||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 1,148 | 1,121 | 2 | % | 1,155 | 1,004 | 15 | % | |||||||||||||
Utica Operations | — | — | — | % | — | — | — | % | |||||||||||||
Southwest Operations | 1,694 | 1,487 | 14 | % | 1,566 | 1,410 | 11 | % | |||||||||||||
Total gathering throughput | 2,842 | 2,608 | 9 | % | 2,721 | 2,414 | 13 | % | |||||||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 3,977 | 3,778 | 5 | % | 3,826 | 3,619 | 6 | % | |||||||||||||
Utica Operations | — | — | — | % | — | — | — | % | |||||||||||||
Southwest Operations | 1,542 | 1,373 | 12 | % | 1,438 | 1,326 | 8 | % | |||||||||||||
Southern Appalachian Operations | 255 | 261 | (2) | % | 247 | 265 | (7) | % | |||||||||||||
Total natural gas processed | 5,774 | 5,412 | 7 | % | 5,511 | 5,210 | 6 | % | |||||||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||||||
Marcellus Operations | 398 | 350 | 14 | % | 379 | 320 | 18 | % | |||||||||||||
Utica Operations | — | — | — | % | — | — | — | % | |||||||||||||
Southwest Operations | 17 | 21 | (19) | % | 18 | 20 | (10) | % | |||||||||||||
Southern Appalachian Operations | 18 | 13 | 38 | % | 15 | 14 | 7 | % | |||||||||||||
Total C2 + NGLs fractionated | 433 | 384 | 13 | % | 412 | 354 | 16 | % | |||||||||||||
(a) | Includes operating data for entities that have been consolidated into the MPLX financial statements. |
Gathering and Processing Operating | Three Months Ended | Year Ended | |||||||||||||||||||
2018 | 2017 | % | 2018 | 2017 | % | ||||||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 1,148 | 1,121 | 2 | % | 1,155 | 1,004 | 15 | % | |||||||||||||
Utica Operations | 2,067 | 1,571 | 32 | % | 1,809 | 1,192 | 52 | % | |||||||||||||
Southwest Operations | 1,694 | 1,489 | 14 | % | 1,567 | 1,412 | 11 | % | |||||||||||||
Total gathering throughput | 4,909 | 4,181 | 17 | % | 4,531 | 3,608 | 26 | % | |||||||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 4,773 | 4,203 | 14 | % | 4,448 | 3,885 | 14 | % | |||||||||||||
Utica Operations | 877 | 991 | (12) | % | 886 | 984 | (10) | % | |||||||||||||
Southwest Operations | 1,542 | 1,373 | 12 | % | 1,438 | 1,326 | 8 | % | |||||||||||||
Southern Appalachian Operations | 255 | 261 | (2) | % | 247 | 265 | (7) | % | |||||||||||||
Total natural gas processed | 7,447 | 6,828 | 9 | % | 7,019 | 6,460 | 9 | % | |||||||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||||||
Marcellus Operations | 398 | 350 | 14 | % | 379 | 320 | 18 | % | |||||||||||||
Utica Operations | 50 | 39 | 28 | % | 47 | 40 | 18 | % | |||||||||||||
Southwest Operations | 17 | 21 | (19) | % | 18 | 20 | (10) | % | |||||||||||||
Southern Appalachian Operations | 18 | 13 | 38 | % | 15 | 14 | 7 | % | |||||||||||||
Total C2 + NGLs fractionated | 483 | 423 | 14 | % | 459 | 394 | 16 | % | |||||||||||||
(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. |
Reconciliation of Segment Adjusted EBITDA to Net | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 547 | $ | 231 | $ | 2,057 | $ | 775 | |||||||
G&P segment adjusted EBITDA attributable to MPLX LP | 364 | 338 | 1,418 | 1,229 | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 911 | 569 | 3,475 | 2,004 | |||||||||||
Depreciation and amortization | (201) | (168) | (766) | (683) | |||||||||||
Provision for income taxes | — | 2 | (8) | (1) | |||||||||||
Amortization of deferred financing costs | (14) | (15) | (59) | (53) | |||||||||||
Loss on extinguishment of debt | (46) | — | (46) | — | |||||||||||
Non-cash equity-based compensation | (4) | (5) | (19) | (15) | |||||||||||
Net interest and other financial costs | (167) | (81) | (556) | (301) | |||||||||||
Income from equity method investments | 65 | 49 | 240 | 78 | |||||||||||
Distributions/adjustments related to equity method | (133) | (100) | (447) | (231) | |||||||||||
Unrealized derivative gains/(losses)(a) | 23 | (8) | 5 | (6) | |||||||||||
Acquisition costs | — | (5) | (3) | (11) | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | 5 | 3 | 18 | 8 | |||||||||||
Adjusted EBITDA attributable to Predecessor(b) | — | — | — | 47 | |||||||||||
Net income | $ | 439 | $ | 241 | $ | 1,834 | $ | 836 | |||||||
(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 adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP prior to the acquisition date. |
L&S Reconciliation of Segment Income from | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
L&S Segment income from operations | $ | 449 | $ | 161 | $ | 1,736 | $ | 602 | |||||||
Depreciation and amortization | 69 | 42 | 240 | 163 | |||||||||||
Income from equity method investments | (43) | (29) | (166) | (36) | |||||||||||
Distributions/adjustments related to equity method | 71 | 50 | 235 | 76 | |||||||||||
Acquisition costs | — | 5 | 3 | 11 | |||||||||||
Non-cash equity-based compensation | 1 | 2 | 9 | 6 | |||||||||||
Adjusted EBITDA attributable to Predecessor | — | — | — | (47) | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX | $ | 547 | $ | 231 | $ | 2,057 | $ | 775 | |||||||
G&P Reconciliation of Segment Income from | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
G&P Segment income from operations | $ | 217 | $ | 174 | $ | 767 | $ | 589 | |||||||
Depreciation and amortization | 132 | 126 | 526 | 520 | |||||||||||
Income from equity method investments | (22) | (20) | (74) | (42) | |||||||||||
Distributions/adjustments related to equity method | 62 | 50 | 212 | 155 | |||||||||||
Unrealized derivative (gains)/losses(a) | (23) | 8 | (5) | 6 | |||||||||||
Non-cash equity-based compensation | 3 | 3 | 10 | 9 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interest | (5) | (3) | (18) | (8) | |||||||||||
G&P Segment adjusted EBITDA attributable to MPLX | $ | 364 | $ | 338 | $ | 1,418 | $ | 1,229 | |||||||
(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
| |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net income | $ | 439 | $ | 241 | $ | 1,834 | $ | 836 | |||||||
(Benefit)/provision for income taxes | — | (2) | 8 | 1 | |||||||||||
Amortization of deferred financing costs | 14 | 15 | 59 | 53 | |||||||||||
Loss on extinguishment of debt | 46 | — | 46 | — | |||||||||||
Net interest and other financial costs | 167 | 81 | 556 | 301 | |||||||||||
Income from operations | 666 | 335 | 2,503 | 1,191 | |||||||||||
Depreciation and amortization | 201 | 168 | 766 | 683 | |||||||||||
Non-cash equity-based compensation | 4 | 5 | 19 | 15 | |||||||||||
Income from equity method investments | (65) | (49) | (240) | (78) | |||||||||||
Distributions/adjustments related to equity | 133 | 100 | 447 | 231 | |||||||||||
Unrealized derivative (gains)/losses(a) | (23) | 8 | (5) | 6 | |||||||||||
Acquisition costs | — | 5 | 3 | 11 | |||||||||||
Adjusted EBITDA | 916 | 572 | 3,493 | 2,059 | |||||||||||
Adjusted EBITDA attributable to noncontrolling | (5) | (3) | (18) | (8) | |||||||||||
Adjusted EBITDA attributable to Predecessor(b) | — | — | — | (47) | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 911 | 569 | 3,475 | 2,004 | |||||||||||
Deferred revenue impacts | 8 | 8 | 32 | 33 | |||||||||||
Net interest and other financial costs | (167) | (81) | (556) | (301) | |||||||||||
Maintenance capital expenditures | (48) | (44) | (146) | (103) | |||||||||||
Equity method investment capital expenditures | (9) | (9) | (31) | (13) | |||||||||||
Other | 6 | 2 | 7 | 6 | |||||||||||
Portion of DCF adjustments attributable to | — | — | — | 2 | |||||||||||
DCF attributable to MPLX LP | 701 | 445 | 2,781 | 1,628 | |||||||||||
Preferred unit distributions | (20) | (16) | (75) | (65) | |||||||||||
DCF attributable to GP and LP unitholders | $ | 681 | $ | 429 | $ | 2,706 | $ | 1,563 | |||||||
(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 prior to the acquisition date. |
Reconciliation of Net Income to LTM Pro forma adjusted EBITDA (unaudited)
| |||||||
Year Ended Dec. 31 | |||||||
(In millions) | 2018 | 2017 | |||||
Net income | $ | 1,834 | $ | 836 | |||
Net income to adjusted EBITDA adjustments | 1,641 | 1,168 | |||||
Adjusted EBITDA attributable to MPLX LP | 3,475 | 2,004 | |||||
Pro forma adjustments for acquisitions | 92 | 146 | |||||
LTM Pro forma adjusted EBITDA | 3,567 | 2,150 | |||||
Consolidated debt | $ | 13,856 | $ | 7,748 | |||
Consolidated debt to adjusted EBITDA | 3.9x | 3.6x | |||||
Reconciliation of Adjusted EBITDA Attributable to | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net cash provided by operating activities | $ | 799 | $ | 569 | $ | 2,826 | $ | 1,907 | |||||||
Changes in working capital items | (37) | (83) | 41 | (147) | |||||||||||
All other, net | (50) | (8) | (45) | (28) | |||||||||||
Non-cash equity-based compensation | 4 | 5 | 19 | 15 | |||||||||||
Net loss on disposal of assets | (1) | (1) | (2) | — | |||||||||||
Current income taxes | (1) | 1 | — | 2 | |||||||||||
Loss on extinguishment of debt | 46 | 0 | 46 | 0 | |||||||||||
Net interest and other financial costs | 167 | 81 | 556 | 301 | |||||||||||
Asset retirement expenditures | — | — | 7 | 2 | |||||||||||
Unrealized derivative (gains)/losses(a) | (23) | 8 | (5) | 6 | |||||||||||
Acquisition costs | — | 5 | 3 | 11 | |||||||||||
Distributions/adjustments related to equity method | 12 | (5) | 47 | (10) | |||||||||||
Adjusted EBITDA | 916 | 572 | 3,493 | 2,059 | |||||||||||
Adjusted EBITDA attributable to noncontrolling | (5) | (3) | (18) | (8) | |||||||||||
Adjusted EBITDA attributable to Predecessor(b) | — | — | — | (47) | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 911 | 569 | 3,475 | 2,004 | |||||||||||
Deferred revenue impacts | 8 | 8 | 32 | 33 | |||||||||||
Net interest and other financial costs | (167) | (81) | (556) | (301) | |||||||||||
Maintenance capital expenditures | (48) | (44) | (146) | (103) | |||||||||||
Equity method investment capital expenditures paid | (9) | (9) | (31) | (13) | |||||||||||
Other | 6 | 2 | 7 | 6 | |||||||||||
Portion of DCF adjustments attributable to | — | — | — | 2 | |||||||||||
DCF attributable to MPLX LP | 701 | 445 | 2,781 | 1,628 | |||||||||||
Preferred unit distributions | (20) | (16) | (75) | (65) | |||||||||||
DCF attributable to GP and LP unitholders | $ | 681 | $ | 429 | $ | 2,706 | $ | 1,563 | |||||||
(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 prior to the acquisition date. |
Capital Expenditures (unaudited) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Capital Expenditures(a): | |||||||||||||||
Maintenance | $ | 48 | $ | 44 | $ | 146 | $ | 103 | |||||||
Growth | 502 | 379 | 1,884 | 1,381 | |||||||||||
Total capital expenditures | 550 | 423 | 2,030 | 1,484 | |||||||||||
Less: Increase in capital accruals | 14 | 16 | 104 | 71 | |||||||||||
Asset retirement expenditures | — | — | 7 | 2 | |||||||||||
Additions to property, plant and equipment | 536 | 407 | 1,919 | 1,411 | |||||||||||
Capital expenditures of unconsolidated subsidiaries(b) | 98 | 78 | 421 | 384 | |||||||||||
Total gross capital expenditures | 634 | 485 | 2,340 | 1,795 | |||||||||||
Less: Joint venture partner contributions | 62 | 37 | 196 | 169 | |||||||||||
Total capital expenditures, net | 572 | 448 | 2,144 | 1,626 | |||||||||||
Acquisitions | — | — | 451 | 249 | |||||||||||
Total capital expenditures, net and acquisitions | 572 | 448 | 2,595 | 1,875 | |||||||||||
Less: Maintenance capital | 48 | 48 | 146 | 108 | |||||||||||
Acquisitions | — | — | 451 | 249 | |||||||||||
Total growth capital expenditures | $ | 524 | $ | 400 | $ | 1,998 | $ | 1,518 | |||||||
(a) | Includes capital expenditures of the Predecessor for all periods presented. |
(b) | Capital expenditures includes amounts related to unconsolidated, partnership-operated subsidiaries. |
Reconciliation of Adjusted EBITDA and Distributable Cash Flow from Net Income (unaudited) | |||||||
(In billions) | 2019E | 2020E | |||||
Net Income | $ | 2.2 | $ | 2.5 | |||
Depreciation and amortization | 0.9 | 1.0 | |||||
Net interest and other financial costs | 0.7 | 0.7 | |||||
Adjustments for equity investment earnings and distributions | 0.2 | 0.2 | |||||
Other | — | 0.1 | |||||
Adjusted EBITDA | 4.0 | 4.5 | |||||
Adjusted EBITDA attributable to noncontrolling interests | (0.1) | (0.1) | |||||
Adjusted EBITDA attributable to MPLX LP | 3.9 | 4.4 | |||||
Deferred revenue impacts | 0.1 | 0.1 | |||||
Net interest and other financial costs | (0.7) | (0.7) | |||||
Maintenance capital expenditures | (0.2) | (0.2) | |||||
Other | — | (0.1) | |||||
Distributable cash flow attributable to MPLX LP | $ | 3.1 | $ | 3.5 | |||
Reconciliation of Adjusted EBITDA and Distributable Cash Flow from Net Cash Provided by Operating | |||||||
(In billions) | 2019E | 2020E | |||||
Net cash provided by operating activities | $ | 3.2 | $ | 3.8 | |||
Changes in working capital items | — | (0.1) | |||||
Net interest and other financial costs | 0.7 | 0.7 | |||||
Other | 0.1 | 0.1 | |||||
Adjusted EBITDA | 4.0 | 4.5 | |||||
Adjusted EBITDA attributable to noncontrolling interests | (0.1) | (0.1) | |||||
Adjusted EBITDA attributable to MPLX LP | 3.9 | 4.4 | |||||
Deferred revenue impacts | 0.1 | 0.1 | |||||
Net interest and other financial costs | (0.7) | (0.7) | |||||
Maintenance capital expenditures | (0.2) | (0.2) | |||||
Other | — | (0.1) | |||||
Distributable cash flow attributable to MPLX LP | $ | 3.1 | $ | 3.5 | |||
View original content:http://www.prnewswire.com/news-releases/mplx-lp-delivers-extraordinary-results-in-2018-300791604.html
SOURCE MPLX LP
FINDLAY, Ohio, Jan. 31, 2019 /PRNewswire/ -- Crimson Midstream, LLC and MPLX LP (NYSE: MPLX) today announced an extension to the binding open season on the Swordfish Pipeline to align with the recently announced binding open season by Capline Pipeline Company LLC. Additionally, the Louisiana Offshore Oil Port (LOOP) recently confirmed the loading of three VLCCs in seven days from the deepwater port and stated the number of vessels loaded can be scaled to meet increasing market demand.
To allow prospective shippers sufficient time to evaluate this new information and to solicit additional commitments for transportation service on the Swordfish Pipeline, the binding open season will now conclude at 12 p.m. EDT on April 30, 2019.
The Swordfish Pipeline is being jointly developed by Crimson and MPLX to provide connectivity from existing terminal facilities in St. James, Louisiana, and Raceland, Louisiana, to the Louisiana Offshore Oil Port (LOOP). The proposed pipeline would be a multi-diameter batched system with the ability to transport up to 600,000 barrels of crude oil per day and provide shippers with access to storage services, vessel loading, as well as connectivity to other carriers at the Clovelly Hub. The in-service date for the Swordfish Pipeline is anticipated to be in the first half of 2020.
About Swordfish Pipeline
The proposed Swordfish Pipeline would originate from terminal facilities in St. James, Louisiana, and Raceland, Louisiana, and provide service to the Clovelly Hub. Storage and further transportation services to end markets would be facilitated through the Clovelly Hub and connecting carriers. Pending shipper interest and final construction of the project, the Swordfish Pipeline is expected to be a multi-diameter (16", 20" and 30") batched system with the ability to transport various levels of capacity, from approximately 170,000 to 600,000 barrels of crude oil per day based on market demands. The completion of the Swordfish Pipeline will have minimal impact on current shippers on the Crimson system, as their ability to access the St. James and local refining markets will be maintained.
Open Season Process
Documents and further details related to the binding open season will be made available upon completion of a confidentiality agreement, available at:
http://www.crimsonmidstream.com/shipper-information
http://www.mplx.com/St_James_to_Clovelly_Binding_Open_Season/
All interested shippers should submit an executed confidentiality agreement to:
Will Airhart
Attorney
539 S. Main St., Rm. 887-M
Findlay, OH 45840
Direct: 419-421-4561
Email: waairhart@mplx.com
This press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements relate to, among other things, timing for the anticipated operations discussed above. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the companies and are difficult to predict. Factors that could impact the opportunities described above are: the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of pipeline capacity by competitors; the ability to obtain required regulatory approvals on a timely basis; or the occurrence of an operational hazard or unforeseen interruption. In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions.
View original content to download multimedia:http://www.prnewswire.com/news-releases/crimson-midstream-and-mplx-announce-extension-of-binding-open-season-for-swordfish-pipeline-to-align-with-capline-reversal-open-season-300787697.html
SOURCE MPLX LP
FINDLAY, Ohio, Jan. 25, 2019 /PRNewswire/ -- The board of directors of the general partner of MPLX LP (NYSE: MPLX) has declared a quarterly cash distribution of $0.6475 per common unit for the fourth quarter 2018, or $2.59 on an annualized basis.
This represents an increase of $0.01 per unit, or 1.6 percent, over the third quarter 2018 distribution, and an increase of $0.04 per unit, or 6.6 percent, over the fourth quarter 2017 distribution. This is the 24th consecutive quarterly distribution increase and will be paid on February 14, 2019, to common unitholders of record as of February 5, 2019.
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100 percent of MPLX's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MPLX's distributions to non-United States investors are subject to federal income tax withholding at the highest applicable effective tax rate.
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 Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/mplx-lp-increases-quarterly-distribution-300784202.html
SOURCE MPLX LP
FINDLAY, Ohio, Jan. 16, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will release its 2018 fourth-quarter and full-year financial results before the market opens on Thursday, February 7. MPLX will live broadcast its conference call with analysts regarding its financial results and provide an update on company operations at 11 a.m. EST.
Interested parties may listen to the conference call by visiting MPLX's website at http://www.mplx.com and clicking on the "2018 Fourth-Quarter and Full-Year Financial Results" link. A replay of the webcast will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
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:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/mplx-lp-to-announce-2018-fourth-quarter-and-full-year-financial-results-february-7-300779455.html
SOURCE MPLX LP
FINDLAY, Ohio, Nov. 29, 2018 /PRNewswire/ -- Since the Swordfish Pipeline binding open season was announced on Oct. 17 by Crimson Midstream, LLC and MPLX LP (NYSE: MPLX), the Louisiana Offshore Oil Port LLC (LOOP) terminal facility in Clovelly, Louisiana, reports that customer requests concerning its deepwater port export capabilities have risen sharply. In addition, LOOP has stated that the number of vessels loaded can be scaled to meet increasing market demand. To allow prospective shippers sufficient time to evaluate this new information and to account for the holiday season, Crimson and MPLX today announced an extension to a binding open season to continue to assess interest and solicit commitments from prospective shippers for transportation service on the Swordfish Pipeline.
The binding open season which began at 8 a.m. CDT on Oct. 17, 2018, will now conclude at noon CST on Jan. 31, 2019.
The Swordfish Pipeline is being jointly developed by Crimson and MPLX to provide connectivity from existing terminal facilities in St. James, Louisiana, and Raceland, Louisiana, to LOOP. The proposed pipeline would be a multi-diameter batched system with the ability to transport up to 600,000 barrels of crude oil per day and provide shippers with access to storage services, vessel loading, as well as connectivity to other carriers at the Clovelly Hub. The in-service date for the Swordfish Pipeline is anticipated to be in the first half of 2020.
About Swordfish Pipeline
The proposed Swordfish Pipeline would originate from terminal facilities in St. James, Louisiana, and Raceland, Louisiana, and provide service to the Clovelly Hub. Storage and further transportation services to end markets would be facilitated through the Clovelly Hub and connecting carriers. Pending shipper interest and final construction of the project, the Swordfish Pipeline is expected to be a multi-diameter (16", 20" and 30") batched system with the ability to transport various levels of capacity, from approximately 170,000 to 600,000 barrels of crude oil per day based on market demands. The completion of the Swordfish Pipeline will have minimal impact on current shippers on the Crimson system, as their ability to access the St. James and local refining markets will be maintained.
Open Season Process
Documents and further details related to the binding open season will be made available upon completion of a confidentiality agreement, available at:
http://www.crimsonmidstream.com/shipper-information
http://www.mplx.com/St_James_to_Clovelly_Binding_Open_Season/
All interested shippers should submit an executed confidentiality agreement to:
Will Airhart
Attorney
539 S. Main St., Rm. 887-M
Findlay, OH 45840
Direct: 419-421-4561
Email: waairhart@mplx.com
View original content to download multimedia:http://www.prnewswire.com/news-releases/crimson-midstream-and-mplx-announce-extension-of-binding-open-season-for-swordfish-pipeline-300757636.html
SOURCE MPLX LP
FINDLAY, Ohio, Nov. 19, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC), MPLX LP (NYSE: MPLX), and Andeavor Logistics LP (NYSE: ANDX) will jointly host a 2018 Investor Day on December 4, 2018. The presentation and accompanying slides will be webcast via the MPC website at http://ir.marathonpetroleum.com, the MPLX website at http://ir.mplx.com, and the Andeavor Logistics website at http://ir.andeavorlogistics.com beginning at 8:30 a.m. EST.
Gary R. Heminger, MPC's chairman and chief executive officer, and other members of the executive management teams, will provide updates on the companies' strategic objectives and outlook. Replays of the webcast will be available on the Marathon Petroleum, MPLX, and Andeavor Logistics websites after the presentation's completion for two weeks.
Advance registration is required to attend. Please contact investorrelations@marathonpetroleum.com to inquire about attendance.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (NYSE: MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with over 3.0 million barrels per day of crude oil capacity across sixteen refineries. MPC's marketing system includes approximately 7,800 branded locations across the United States, including approximately 5,600 Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates approximately 3,900 retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interests in two midstream companies, MPLX LP (NYSE: MPLX) and Andeavor Logistics LP (NYSE: ANDX), which own and operate gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.
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.
About Andeavor Logistics
Andeavor Logistics LP is a fee-based, full-service, diversified midstream logistics company, with integrated assets across the western and mid-continent regions of the United States. Andeavor Logistics operates through three business segments: Terminalling and Transportation, Gathering and Processing and Wholesale. The Terminalling and Transportation segment consists of marine terminals, refined product truck terminals, rail terminals, dedicated storage facilities and transportation pipelines. The Gathering and Processing segment consists of crude oil gathering systems and pipelines as well as natural gas gathering pipelines, processing facilities and fractionation facilities. The Wholesale segment consists of a fee-based fuel wholesale business. Andeavor Logistics is a Delaware limited partnership headquartered in Findlay, Ohio.
Investor Relations Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corporation-mplx-lp-and-andeavor-logistics-lp-2018-investor-day-to-be-webcast-live-on-dec-4-300753200.html
SOURCE Marathon Petroleum Corporation; MPLX LP and Andeavor Logistics LP
FINDLAY, Ohio, Nov. 7, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) announced today that it has priced $2,250,000,000 in aggregate principal amount of unsecured senior notes in an underwritten public offering consisting of $750,000,000 aggregate principal amount of 4.800% senior notes due in 2029 and $1,500,000,000 aggregate principal amount of 5.500% senior notes due in 2049.
The 2029 senior notes and 2049 senior notes were offered at a price to the public of 99.432% of par and 98.031% of par, respectively.
MPLX intends to use a portion of the net proceeds from this offering to redeem all of the $750,000,000 aggregate principal amount of its 5.500% senior notes due 2023 (including the approximately $40,000,000 in aggregate principal amount of senior notes issued by MarkWest Energy Partners, L.P. and MarkWest Energy Finance Corporation). MPLX will use the remaining net proceeds of this offering to repay borrowings under its revolving credit facility and the intercompany loan agreement with its sponsor, Marathon Petroleum Corporation, and/or for general partnership purposes, which may include, from time to time, acquisitions, capital expenditures and the payment of distributions.
The closing of the senior notes offering is expected to occur on Nov. 15, 2018, subject to satisfaction of customary closing conditions.
J.P. Morgan Securities LLC; RBC Capital Markets, LLC; and Wells Fargo Securities, LLC are acting as joint book-running managers for the offering.
This offering is being made only by means of a prospectus and related prospectus supplement, which may be obtained for free by visiting the SEC's website at http://www.sec.gov. Alternatively, copies may be obtained by contacting the following, who are acting as representatives of the underwriters:
J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
(212) 834-4533 (collect)
RBC Capital Markets, LLC
200 Vesey Street
New York, NY 10281
866-375-6829
Wells Fargo Securities, LLC
Attention: WFS Customer Service
608 2nd Avenue South, Suite 1000
Minneapolis, MN 55402
Toll-Free: 1-800-645-3751
This news release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
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.
Investor Relations Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP ("MPLX") and Marathon Petroleum Corporation ("MPC"). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPLX and MPC, including strategic initiatives and our value creation plans. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the companies' control and are difficult to predict. Factors that could cause MPLX's actual results to differ materially from those implied in the forward-looking statements include: negative capital market conditions, including an increase of the current yield on common units, adversely affecting MPLX's ability to meet its distribution growth guidance; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein and other completed or proposed transactions; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of MPLX's capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt on commercially reasonable terms, and the ability to successfully execute its business plans, growth strategy and self-funding model; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects 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; other risks related to MPC, including those related to MPC's acquisition of Andeavor or the potential merger, consolidation or combination of MPLX with Andeavor Logistics LP; modifications to earnings and distribution growth objectives; our ability to manage disruptions in credit markets or changes to our 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; changes to MPLX's capital budget; prices of and demand for natural gas, NGLs, crude oil and refined products; delays in obtaining necessary third-party approvals and governmental permits; changes in labor, material and equipment costs and availability; planned and unplanned outages, the delay of, cancellation of or failure to implement planned capital projects; project overruns, disruptions or interruptions of our operations due to the shortage of skilled labor; unforeseen hazards such as weather conditions, acts of war or terrorist acts and the governmental or military response; other operating and economic considerations; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2017, filed with the Securities and Exchange Commission ("SEC"). Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: 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; and risks relating to any unforeseen liabilities of Andeavor; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; MPC's ability to manage disruptions in credit markets or changes to its credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute the business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on its 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; risks related to MPLX described above and similar risks related to Andeavor Logistics LP; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2017, and in MPC's Form 10-Q for the quarters ended June 30, 2018 and September 30, 2018, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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 are available on the SEC website 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 or by contacting MPC's Investor Relations office.
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SOURCE MPLX LP
FINDLAY, Ohio, Nov. 1, 2018 /PRNewswire/ -- Timothy J. Aydt, president, Marathon Pipe Line LLC, and vice president, operations of MPLX GP LLC, the general partner of MPLX LP (NYSE: MPLX), has been appointed vice president, business development, MPLX, effective Nov. 1. He will continue to be located in Findlay, Ohio, and report to Michael J. Hennigan, MPLX president.
"With 33 years of experience in our industry, Tim brings a wealth of operating knowledge to this role and will provide seasoned leadership and expertise as we execute our plans to grow our business," said Hennigan. "As an experienced business leader, Tim has a strong track record of driving growth and shaping strategies across our business areas throughout his career."
Aydt began his career with MPC in 1985 as a pipeline engineer. He has held senior management positions throughout the company, including assignments in Marketing & Transportation Engineering and at MPC's refineries in Detroit and Robinson, Illinois. Aydt was named general manager of Terminal, Transport & Rail in 2013, following the completion of the $2.2 billion Detroit Coker Project where he served as project director. Aydt graduated from the University of Missouri-Rolla with a Bachelor of Science degree in mechanical engineering and attended the Wharton Advanced Management Program at University of Pennsylvania.
Shawn M. Lyon, who is currently vice president, operations for Marathon Pipe Line, will replace Aydt and report to John Swearingen, executive vice president of Logistics and Storage.
"We are fortunate to be able to tap Shawn's comprehensive 29-year experience to head up our pipeline company," Hennigan added. "We anticipate his leadership will contribute to the value-enhancing growth we are pursuing in our pipeline system."
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 Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
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SOURCE MPLX LP
FINDLAY, Ohio, Nov. 1, 2018 /PRNewswire/ --
MPLX LP (NYSE: MPLX) today reported record third quarter 2018 net income attributable to MPLX of $510 million compared with $216 million in the third quarter of 2017. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $937 million compared with $538 million in the second quarter of 2017. The significant year-over-year increase in EBITDA was driven by strong performance in the base business of both segments as well as drop downs in Logistics and Storage (L&S). L&S reported adjusted EBITDA of $547 million for the quarter, up $329 million versus the third quarter of last year. Gathering and Processing (G&P) reported adjusted EBITDA of $390 million for the quarter, up $70 million on a year-over-year basis.
"MPLX delivered exceptional results this quarter, setting multiple financial and operational records," said Gary R. Heminger, chairman and chief executive officer. "Our team continued to successfully bring multiple assets online throughout the year to match production growth. This has allowed us to take advantage of the strong levels of demand across all regions where we operate."
"At the same time, we are also very enthusiastic about the new Permian pipeline and Gulf Coast export investments we announced this quarter," Heminger added. "These projects demonstrate our team's ability to respond to market trends, developing infrastructure that connects growing domestic supply sources to global demand. Our focus on long haul pipelines and stable fee-based businesses positions the company to create long-term sustainable shareholder value."
During the quarter, the company generated $737 million in net cash provided by operating activities and distributable cash flow of $766 million, which provided 1.47x coverage. Consistent with its self-funding strategy, the company did not issue equity and ended the third quarter with leverage of 3.8x. MPLX also announced its 23rd consecutive distribution increase, to $0.6375 per common unit.
Financial Highlights
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions, except per unit and ratio data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net income attributable to MPLX | $ | 510 | $ | 216 | $ | 1,384 | $ | 556 | |||||||
Adjusted EBITDA attributable to MPLX(a) | 937 | 538 | 2,564 | 1,435 | |||||||||||
Net cash provided by operating activities | 737 | 494 | 2,027 | 1,338 | |||||||||||
Distributable cash flow ("DCF")(a) | 766 | 442 | 2,080 | 1,183 | |||||||||||
Distribution per common unit(b) | $ | 0.6375 | $ | 0.5875 | $ | 1.8825 | $ | 1.6900 | |||||||
Distribution coverage ratio(c) | 1.47x | 1.33x | 1.38x | 1.29x | |||||||||||
Consolidated debt to adjusted EBITDA(d) | 3.8x | 3.6x | |||||||||||||
(a) Non-GAAP measure calculated before the distribution to preferred units. See reconciliation below. |
Logistics & Storage
L&S segment income from operations and adjusted EBITDA for the third quarter of 2018 increased by $315 million and $329 million, respectively, compared with the same period in 2017. The increase was primarily due to dropdowns of certain refining logistics assets and the fuels distribution service business as well as the continued solid performance of the segment.
Total pipeline throughputs were 3.39 million barrels per day in the third quarter, an increase of 7 percent versus the same quarter last year, including the addition and expansion of the Ozark pipeline system. The average tariff rate was $0.69 per barrel for the quarter. Terminal throughput was 1.47 million barrels per day for the quarter, down 1 percent versus the same quarter last year.
During the quarter, MPLX announced planned investments in two separate long-haul pipelines. The company plans to join with Energy Transfer (NYSE: ET), Magellan Midstream Partners (NYSE: MMP), and Delek US Holdings, Inc (NYSE: DK) to construct a crude pipeline running from the Permian Basin to the Texas Gulf Coast region. The 600-mile Permian Gulf Coast pipeline system (PGC Pipeline) is expected to be at least 30 inches in diameter and operational in mid-2020. MPLX also plans to participate in developing the Whistler Pipeline, a 2.0 billion cubic feet per day (bcf/d) pipeline designed to deliver natural gas from Waha, Texas, to the Agua Dulce market hub. This pipeline is expected to begin operations in the fourth quarter of 2020.
MPLX also announced the acquisition of an eastern Gulf Coast export terminal in Mt. Airy, Louisiana. The terminal is strategically located on the Mississippi River in close proximity to several large refineries, including MPC's Garyville refinery. The facility has 4 million barrels of third-party leased storage capacity and a 120 thousand barrel-per-day (mbpd) dock, with the capability of expanding storage capacity to 10 million barrels. MPLX has received a permit to construct a second 120 mbpd dock at the terminal to serve growing export needs in the region.
Additionally, on October 17, 2018, MPLX announced with Crimson Midstream, LLC the commencement of a binding open season to assess interest and solicit commitments from prospective shippers for transportation service on the Swordfish Pipeline. The Swordfish Pipeline would provide connectivity within Louisiana from existing terminal facilities in St. James and Raceland to the Louisiana Offshore Oil Port LLC (LOOP) terminal facility in Clovelly. The proposed pipeline would have the ability to transport up to 600,000 barrels of crude oil per day and provide shippers with access to storage services, vessel loading, as well as connectivity to other carriers at the Clovelly Hub. The in-service date for the Swordfish Pipeline is anticipated to be in the first half of 2020.
Within the L&S segment, MPLX continued to execute its organic growth plan. The company completed its major expansion work on the Ozark and Wood River-to-Patoka crude pipeline systems, with available capacity of these systems now at 360 mbpd. The company also placed into service two 410,000 barrel crude tanks in Texas City, Texas, in the third quarter. Both projects create additional fee-based revenue for MPLX while providing logistics solutions to Marathon Petroleum Corp. (NYSE: MPC) and other market participants.
Gathering & Processing
G&P segment income from operations and segment adjusted EBITDA increased by $46 million and $70 million, respectively, for the third quarter of 2018 compared with the same period in 2017. The increase was primarily due to increased gathered, processed and fractionated volumes.
Regionally, the company continues to deliver significant volume growth in the Northeast. Gathered volumes averaged 3.1 bcf/d for the quarter, a 35 percent increase versus the third quarter of 2017, driven primarily by higher Utica dry-gas and Marcellus wet-gas volumes. Processed volumes averaged 5.5 bcf/d, a 10 percent increase versus the third quarter of 2017 as volumes at the recently completed Sherwood 9, Houston 1, and Majorsville 7 plants ramped during the quarter. Fractionated volumes averaged 454,000 barrels per day, a 24 percent increase versus the third quarter of 2017. The increase was primarily the result of higher utilization at the Hopedale Complex.
In October, MPLX commenced operations of the 200-million-cubic-feet-per-day (mmcf/d) Sherwood 10 gas processing plant. Additionally, MPLX expects to add an incremental 400 mmcf/d of processing capacity and 100,000 barrels per day of fractionation capacity in the Northeast in the fourth quarter.
In the Southwest, gathered volumes were 1.6 bcf/d for the third quarter, a 14 percent increase versus the third quarter of 2017. Processed volumes averaged 1.5 bcf/d for the quarter, an 11 percent increase versus the third quarter of 2017, as volumes continued to ramp at the recently completed Argo plant in the Delaware Basin and the Omega plant in the STACK shale play in Oklahoma.
(In millions) | Three Months Ended | Nine Months Ended | |||||||||||||
Segment adjusted EBITDA attributable to MPLX LP (unaudited) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Logistics and Storage(a) | $ | 547 | $ | 218 | $ | 1,510 | $ | 544 | |||||||
Gathering and Processing(a) | $ | 390 | $ | 320 | $ | 1,054 | $ | 891 | |||||||
(a) Non-GAAP measure. See reconciliation below for details. |
Financial Position and Liquidity
As of September 30, MPLX had $37 million in cash, approximately $1.25 billion available through its bank revolving credit facility expiring in July 2022, and $1 billion available through its credit facility with MPC.
The company's $2.3 billion of available liquidity at the end of the third quarter, its distribution coverage, and its access to the capital markets should provide it with sufficient flexibility to meet its day-to-day operational needs and continue investing in organic growth opportunities. The company's leverage ratio was 3.8x at September 30, 2018. MPLX remains committed to maintaining an investment-grade credit profile and self-funding strategy for its organic growth capital needs.
Conference Call
At 11 a.m. EDT today, MPLX will hold a conference call and webcast to discuss the reported results and provide an update on operations. Interested parties may listen by visiting MPLX's website at http://www.mplx.com and clicking on the "2018 Third Quarter Financial Results" link in the "News & Headlines" section. A replay of the webcast will be available on MPLX's website for two weeks. Financial information, including the earnings release and other investor-related material, will also be available online prior to the conference call and webcast at http://ir.mplx.com.
2018 Investor Day
Marathon Petroleum Corporation, MPLX LP, and Andeavor Logistics LP (NYSE: ANDX) will host their 2018 Investor Day at the Mandarin Oriental Hotel in New York City on December 4, 2018 at 8:30 a.m. EST. Reservations are required to attend. Interested parties can request an invitation by contacting the Investor Relations department via email at investorrelations@marathonpetroleum.com. The presentation will also be webcast live at http://marathonpetroleum.com, http://mplx.com, and http://andeavorlogistics.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 Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
Non-GAAP references
In addition to our financial information presented in accordance with U.S. generally accepted accounting principles (GAAP), management utilizes additional non-GAAP measures to facilitate comparisons of past performance and future periods. This press release and supporting schedules include the non-GAAP measures adjusted EBITDA (including segment adjusted EBITDA), distributable cash flow (DCF) and distribution coverage ratio. The amount of adjusted EBITDA and DCF generated is considered by the board of directors of our general partner in approving the Partnership's cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) provision for income taxes; (iii) amortization of deferred financing costs; (iv) non-cash equity-based compensation; (v) net interest and other financial costs; (vi) income from equity method investments; (vii) distributions and adjustments related to equity method investments; (viii) unrealized derivative gains and losses; (ix) acquisition costs; (x) noncontrolling interest and (xi) other adjustments as deemed necessary. In general, we define DCF as adjusted EBITDA adjusted for (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items.
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record the realized gain or loss of the contract.
Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures.
DCF is a financial performance measure used by management as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders.
Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between the partnership's financial operating performance and cash distribution capability. We define the distribution coverage ratio as the ratio of DCF attributable to GP and LP unitholders to total GP and LP distribution declared.
Forward-looking statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP ("MPLX") and Marathon Petroleum Corporation ("MPC"). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPLX and MPC, including strategic initiatives and our value creation plans. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the companies' control and are difficult to predict. Factors that could cause MPLX's actual results to differ materially from those implied in the forward-looking statements include: negative capital market conditions, including an increase of the current yield on common units, adversely affecting MPLX's ability to meet its distribution growth guidance; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein and other proposed transactions; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of MPLX's capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt on commercially reasonable terms, and the ability to successfully execute its business plans, growth strategy and self-funding model; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects and planned investments, and our 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 earnings and distribution growth objectives; our ability to manage disruptions in credit markets or changes to our credit rating; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; changes to MPLX's capital budget; other risk factors inherent to MPLX's industry; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2017, filed with the Securities and Exchange Commission ("SEC"). Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: risks related to MPC's acquisition of Andeavor; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; MPC's ability to manage disruptions in credit markets or changes to its credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute the business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on its 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; risks related to MPLX described above and similar risks related to Andeavor Logistics LP; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2017, and in MPC's Form 10-Q for the quarter ended June 30, 2018, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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 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 http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office.
Condensed Results of Operations (unaudited) | Three Months Ended | Nine Months Ended | |||||||||||||
(In millions, except per unit data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Revenues and other income: | |||||||||||||||
Operating revenue | $ | 843 | $ | 585 | $ | 2,306 | $ | 1,664 | |||||||
Operating revenue - related parties | 776 | 348 | 2,148 | 1,014 | |||||||||||
Income from equity method investments | 64 | 23 | 175 | 29 | |||||||||||
Other income | 29 | 24 | 81 | 75 | |||||||||||
Total revenues and other income | 1,712 | 980 | 4,710 | 2,782 | |||||||||||
Costs and expenses: | |||||||||||||||
Operating expenses | 514 | 318 | 1,406 | 866 | |||||||||||
Operating expenses - related parties | 229 | 114 | 630 | 331 | |||||||||||
Depreciation and amortization | 201 | 164 | 565 | 515 | |||||||||||
General and administrative expenses | 76 | 59 | 217 | 174 | |||||||||||
Other taxes | 20 | 14 | 55 | 40 | |||||||||||
Total costs and expenses | 1,040 | 669 | 2,873 | 1,926 | |||||||||||
Income from operations | 672 | 311 | 1,837 | 856 | |||||||||||
Interest and other financial costs | 153 | 93 | 434 | 258 | |||||||||||
Income before income taxes | 519 | 218 | 1,403 | 598 | |||||||||||
Provision for income taxes | 3 | 1 | 8 | 3 | |||||||||||
Net income | 516 | 217 | 1,395 | 595 | |||||||||||
Less: Net income attributable to noncontrolling interests | 6 | 1 | 11 | 3 | |||||||||||
Less: Net income attributable to Predecessor(a) | — | — | — | 36 | |||||||||||
Net income attributable to MPLX LP | 510 | 216 | 1,384 | 556 | |||||||||||
Less: Preferred unit distributions | 19 | 16 | 55 | 49 | |||||||||||
Less: General partner's interest in net income attributable to MPLX LP | — | 86 | — | 222 | |||||||||||
Limited partners' interest in net income attributable to MPLX LP | $ | 491 | $ | 114 | $ | 1,329 | $ | 285 | |||||||
Per Unit Data | |||||||||||||||
Net income (loss) attributable to MPLX LP per limited partner unit: | |||||||||||||||
Common - basic | $ | 0.62 | $ | 0.29 | $ | 1.77 | $ | 0.75 | |||||||
Common - diluted | $ | 0.62 | $ | 0.29 | $ | 1.77 | $ | 0.75 | |||||||
Weighted average limited partner units outstanding: | |||||||||||||||
Common units – basic | 794 | 394 | 750 | 378 | |||||||||||
Common units – diluted | 794 | 395 | 750 | 381 | |||||||||||
(a) The pipeline, storage and terminals businesses acquired on March 1, 2017 ("Predecessor"). |
Select Financial Statistics (unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions, except ratio data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Distribution declared: | |||||||||||||||
Common units (LP) - public | $ | 185 | $ | 170 | $ | 545 | $ | 481 | |||||||
Common units - MPC(a) | 322 | 62 | 926 | 167 | |||||||||||
GP units - MPC | — | 7 | — | 18 | |||||||||||
Incentive distribution rights - MPC | — | 81 | — | 211 | |||||||||||
Total GP and LP distribution declared | 507 | 320 | 1,471 | 877 | |||||||||||
Redeemable preferred units(b) | 19 | 16 | 55 | 49 | |||||||||||
Total distribution declared | $ | 526 | $ | 336 | $ | 1,526 | $ | 926 | |||||||
Distribution coverage ratio(c) | 1.47x | 1.33x | 1.38x | 1.29x | |||||||||||
Cash Flow Data | |||||||||||||||
Net cash flow provided by (used in): | |||||||||||||||
Operating activities | $ | 737 | $ | 494 | $ | 2,027 | $ | 1,338 | |||||||
Investing activities | (1,073) | (431) | (2,027) | (1,836) | |||||||||||
Financing activities | $ | 366 | $ | (351) | $ | 30 | $ | 268 | |||||||
Other Financial Data | |||||||||||||||
Adjusted EBITDA attributable to MPLX LP(d) | $ | 937 | $ | 538 | $ | 2,564 | $ | 1,435 | |||||||
DCF attributable to GP and LP unitholders(d) | $ | 747 | $ | 426 | $ | 2,025 | $ | 1,134 | |||||||
(a) MPC agreed to waive $23.7 million in common unit distributions associated with the units received in connection with the Feb. 1 dropdown. |
Select Balance Sheet Data (unaudited) | |||||||
(In millions, except ratio data) | Sept. 30, 2018 | Dec. 31, 2017 | |||||
Cash and cash equivalents | $ | 37 | $ | 5 | |||
Total assets | 22,379 | 19,500 | |||||
Total debt(a) | 12,890 | 7,332 | |||||
Redeemable preferred units | 1,003 | 1,000 | |||||
Total equity | $ | 6,953 | $ | 9,973 | |||
Consolidated total debt to adjusted EBITDA(b) | 3.8x | 3.6x | |||||
Partnership units outstanding: | |||||||
GP units | — | 8 | |||||
MPC-held common units | 505 | 118 | |||||
Public common units | 289 | 289 | |||||
(a) Total debt includes $0 million and $386 million of outstanding intercompany borrowings classified in current liabilities as of September 30, 2018, and Dec. 31, 2017, respectively. |
Logistics and Storage Operating Statistics (unaudited) | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||||||||||
Pipeline throughput (mbpd) | |||||||||||||||||||||
Crude oil pipelines | 2,208 | 2,046 | 8 | % | 2,149 | 1,901 | 13 | % | |||||||||||||
Product pipelines | 1,182 | 1,131 | 5 | % | 1,135 | 1,051 | 8 | % | |||||||||||||
Total pipelines | 3,390 | 3,177 | 7 | % | 3,284 | 2,952 | 11 | % | |||||||||||||
Average tariff rates ($ per barrel) | |||||||||||||||||||||
Crude oil pipelines | $ | 0.60 | $ | 0.54 | 11 | % | $ | 0.58 | $ | 0.57 | 2 | % | |||||||||
Product pipelines | 0.86 | 0.75 | 15 | % | 0.80 | 0.74 | 8 | % | |||||||||||||
Total pipelines | $ | 0.69 | $ | 0.62 | 11 | % | $ | 0.66 | $ | 0.63 | 5 | % | |||||||||
Terminal throughput (mbpd) | 1,474 | 1,496 | (1) | % | 1,468 | 1,470 | — | % | |||||||||||||
Barges at period-end | 256 | 232 | 10 | % | 256 | 232 | 10 | % | |||||||||||||
Towboats at period-end | 20 | 18 | 11 | % | 20 | 18 | 11 | % | |||||||||||||
Gathering and Processing Operating Statistics (unaudited) - Consolidated(a) | Three Months Ended | Nine Months Ended | |||||||||||||||||||
2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 1,201 | 1,005 | 20 | % | 1,157 | 965 | 20 | % | |||||||||||||
Utica Operations | — | — | — | % | — | — | — | % | |||||||||||||
Southwest Operations | 1,599 | 1,398 | 14 | % | 1,523 | 1,383 | 10 | % | |||||||||||||
Total gathering throughput | 2,800 | 2,403 | 17 | % | 2,680 | 2,348 | 14 | % | |||||||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 4,004 | 3,618 | 11 | % | 3,775 | 3,565 | 6 | % | |||||||||||||
Utica Operations | — | — | — | % | — | — | — | % | |||||||||||||
Southwest Operations | 1,479 | 1,331 | 11 | % | 1,403 | 1,310 | 7 | % | |||||||||||||
Southern Appalachian Operations | 226 | 264 | (14) | % | 244 | 266 | (8) | % | |||||||||||||
Total natural gas processed | 5,709 | 5,213 | 10 | % | 5,422 | 5,141 | 5 | % | |||||||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||||||
Marcellus Operations | 405 | 326 | 24 | % | 374 | 310 | 21 | % | |||||||||||||
Utica Operations | — | — | — | % | — | — | — | % | |||||||||||||
Southwest Operations | 20 | 18 | 11 | % | 18 | 19 | (5) | % | |||||||||||||
Southern Appalachian Operations | 14 | 14 | — | % | 13 | 15 | (13) | % | |||||||||||||
Total C2 + NGLs fractionated | 439 | 358 | 23 | % | 405 | 344 | 18 | % | |||||||||||||
(a) Includes operating data for entities that have been consolidated into the Partnership financial statements. |
Gathering and Processing Operating Statistics (unaudited) - Operated(a) | Three Months Ended | Nine Months Ended | |||||||||||||||||||
2018 | 2017 | % Change | 2018 | 2017 | % Change | ||||||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 1,201 | 1,005 | 20 | % | 1,157 | 965 | 20 | % | |||||||||||||
Utica Operations | 1,936 | 1,324 | 46 | % | 1,722 | 1,065 | 62 | % | |||||||||||||
Southwest Operations | 1,600 | 1,400 | 14 | % | 1,524 | 1,385 | 10 | % | |||||||||||||
Total gathering throughput | 4,737 | 3,729 | 27 | % | 4,403 | 3,415 | 29 | % | |||||||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 4,609 | 3,986 | 16 | % | 4,338 | 3,778 | 15 | % | |||||||||||||
Utica Operations | 857 | 1,000 | (14) | % | 889 | 982 | (9) | % | |||||||||||||
Southwest Operations | 1,479 | 1,331 | 11 | % | 1,403 | 1,310 | 7 | % | |||||||||||||
Southern Appalachian Operations | 226 | 264 | (14) | % | 244 | 266 | (8) | % | |||||||||||||
Total natural gas processed | 7,171 | 6,581 | 9 | % | 6,874 | 6,336 | 8 | % | |||||||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||||||
Marcellus Operations | 405 | 326 | 24 | % | 374 | 310 | 21 | % | |||||||||||||
Utica Operations | 49 | 39 | 26 | % | 46 | 40 | 15 | % | |||||||||||||
Southwest Operations | 20 | 18 | 11 | % | 18 | 19 | (5) | % | |||||||||||||
Southern Appalachian Operations | 14 | 14 | — | % | 13 | 15 | (13) | % | |||||||||||||
Total C2 + NGLs fractionated | 488 | 397 | 23 | % | 451 | 384 | 17 | % | |||||||||||||
(a) Includes operating data for entities that have been consolidated into the Partnership financial statements as well as operating data for Partnership-operated equity method investments. |
Reconciliation of Segment Adjusted EBITDA to Net Income (unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 547 | $ | 218 | $ | 1,510 | $ | 544 | |||||||
G&P segment adjusted EBITDA attributable to MPLX LP | 390 | 320 | 1,054 | 891 | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 937 | 538 | 2,564 | 1,435 | |||||||||||
Depreciation and amortization | (201) | (164) | (565) | (515) | |||||||||||
Provision for income taxes | (3) | (1) | (8) | (3) | |||||||||||
Amortization of deferred financing costs | (14) | (13) | (45) | (38) | |||||||||||
Non-cash equity-based compensation | (6) | (4) | (15) | (10) | |||||||||||
Net interest and other financial costs | (139) | (80) | (389) | (220) | |||||||||||
Income from equity method investments | 64 | 23 | 175 | 29 | |||||||||||
Distributions/adjustments related to equity method investments | (112) | (65) | (314) | (131) | |||||||||||
Unrealized derivative (losses) gains(a) | (17) | (17) | (18) | 2 | |||||||||||
Acquisition costs | — | (2) | (3) | (6) | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | 7 | 2 | 13 | 5 | |||||||||||
Adjusted EBITDA attributable to Predecessor(b) | — | — | — | 47 | |||||||||||
Net income | $ | 516 | $ | 217 | $ | 1,395 | $ | 595 | |||||||
(a) The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
L&S Reconciliation of Segment Income from Operations to Segment Adjusted EBITDA (unaudited) | |||||||||||||||
Three Months Ended Sept. 30, | Nine Months Ended Sept. 30, | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
L&S Segment income from operations | $ | 468 | $ | 153 | $ | 1,287 | $ | 441 | |||||||
Depreciation and amortization | 62 | 42 | 171 | 121 | |||||||||||
Income from equity method investments | (43) | (7) | (123) | (7) | |||||||||||
Distributions/adjustments related to equity method investments | 57 | 26 | 164 | 26 | |||||||||||
Acquisition costs | — | 2 | 3 | 6 | |||||||||||
Non-cash equity-based compensation | 3 | 2 | 8 | 4 | |||||||||||
Adjusted EBITDA attributable to Predecessor | — | — | — | (47) | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 547 | $ | 218 | $ | 1,510 | $ | 544 | |||||||
G&P Reconciliation of Segment Income from Operations to Segment Adjusted EBITDA (unaudited) | |||||||||||||||
Three Months Ended Sept. 30, | Nine Months Ended Sept. 30, | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
G&P Segment income from operations | $ | 204 | $ | 158 | $ | 550 | $ | 415 | |||||||
Depreciation and amortization | 139 | 122 | 394 | 394 | |||||||||||
Income from equity method investments | (21) | (16) | (52) | (22) | |||||||||||
Distributions/adjustments related to equity method investments | 55 | 39 | 150 | 105 | |||||||||||
Unrealized derivative loss/(gain)(a) | 17 | 17 | 18 | (2) | |||||||||||
Non-cash equity-based compensation | 3 | 2 | 7 | 6 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interest | (7) | (2) | (13) | (5) | |||||||||||
G&P Segment adjusted EBITDA attributable to MPLX LP | $ | 390 | $ | 320 | $ | 1,054 | $ | 891 | |||||||
(a) MPLX makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
Reconciliation of Adjusted EBITDA Attributable to MPLX LP and DCF Attributable to GP and LP Unitholders from Net Income (Loss) (unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net income | $ | 516 | $ | 217 | $ | 1,395 | $ | 595 | |||||||
Provision for income taxes | 3 | 1 | 8 | 3 | |||||||||||
Amortization of deferred financing costs | 14 | 13 | 45 | 38 | |||||||||||
Net interest and other financial costs | 139 | 80 | 389 | 220 | |||||||||||
Income from operations | 672 | 311 | 1,837 | 856 | |||||||||||
Depreciation and amortization | 201 | 164 | 565 | 515 | |||||||||||
Non-cash equity-based compensation | 6 | 4 | 15 | 10 | |||||||||||
Income from equity method investments | (64) | (23) | (175) | (29) | |||||||||||
Distributions/adjustments related to equity method investments | 112 | 65 | 314 | 131 | |||||||||||
Unrealized derivative losses (gains)(a) | 17 | 17 | 18 | (2) | |||||||||||
Acquisition costs | — | 2 | 3 | 6 | |||||||||||
Adjusted EBITDA | 944 | 540 | 2,577 | 1,487 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | (7) | (2) | (13) | (5) | |||||||||||
Adjusted EBITDA attributable to Predecessor(b) | — | — | — | (47) | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 937 | 538 | 2,564 | 1,435 | |||||||||||
Deferred revenue impacts | 13 | 8 | 24 | 25 | |||||||||||
Net interest and other financial costs | (139) | (80) | (389) | (220) | |||||||||||
Maintenance capital expenditures | (40) | (24) | (98) | (59) | |||||||||||
Equity method investment capital expenditures paid out | (6) | (2) | (22) | (4) | |||||||||||
Other | 1 | 2 | 1 | 4 | |||||||||||
Portion of DCF adjustments attributable to Predecessor(b) | — | — | — | 2 | |||||||||||
DCF attributable to MPLX LP | 766 | 442 | 2,080 | 1,183 | |||||||||||
Preferred unit distributions | (19) | (16) | (55) | (49) | |||||||||||
DCF attributable to GP and LP unitholders | $ | 747 | $ | 426 | $ | 2,025 | $ | 1,134 | |||||||
(a) The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
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 | Nine Months Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net cash provided by operating activities | $ | 737 | $ | 494 | $ | 2,027 | $ | 1,338 | |||||||
Changes in working capital items | 45 | (50) | 78 | (64) | |||||||||||
All other, net | (9) | (3) | 5 | (20) | |||||||||||
Non-cash equity-based compensation | 6 | 4 | 15 | 10 | |||||||||||
Net (loss) / gain on disposal of assets | (1) | — | (1) | 1 | |||||||||||
Net interest and other financial costs | 139 | 80 | 389 | 220 | |||||||||||
Current income taxes | 1 | — | 1 | 1 | |||||||||||
Asset retirement expenditures | 2 | 1 | 7 | 2 | |||||||||||
Unrealized derivative losses (gains)(a) | 17 | 17 | 18 | (2) | |||||||||||
Acquisition costs | — | 2 | 3 | 6 | |||||||||||
Other adjustments to equity method investment distributions | 8 | (5) | 35 | (5) | |||||||||||
Other | (1) | — | — | — | |||||||||||
Adjusted EBITDA | 944 | 540 | 2,577 | 1,487 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | (7) | (2) | (13) | (5) | |||||||||||
Adjusted EBITDA attributable to Predecessor(b) | — | — | — | (47) | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 937 | 538 | 2,564 | 1,435 | |||||||||||
Deferred revenue impacts | 13 | 8 | 24 | 25 | |||||||||||
Net interest and other financial costs | (139) | (80) | (389) | (220) | |||||||||||
Maintenance capital expenditures | (40) | (24) | (98) | (59) | |||||||||||
Equity method investment capital expenditures paid out | (6) | (2) | (22) | (4) | |||||||||||
Other | 1 | 2 | 1 | 4 | |||||||||||
Portion of DCF adjustments attributable to Predecessor(b) | — | — | — | 2 | |||||||||||
DCF attributable to MPLX LP | 766 | 442 | 2,080 | 1,183 | |||||||||||
Preferred unit distributions | (19) | (16) | (55) | (49) | |||||||||||
DCF attributable to GP and LP unitholders | $ | 747 | $ | 426 | $ | 2,025 | $ | 1,134 | |||||||
(a) The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
Capital Expenditures (unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Capital Expenditures(a): | |||||||||||||||
Maintenance | $ | 40 | $ | 24 | $ | 98 | $ | 59 | |||||||
Growth | 458 | 351 | 1,382 | 1,002 | |||||||||||
Total capital expenditures | 498 | 375 | 1,480 | 1,061 | |||||||||||
Less: Increase in capital accruals | (25) | 22 | 90 | 55 | |||||||||||
Asset retirement expenditures | 2 | 1 | 7 | 2 | |||||||||||
Additions to property, plant and equipment | 521 | 352 | 1,383 | 1,004 | |||||||||||
Capital expenditures of unconsolidated subsidiaries(b) | 156 | 101 | 323 | 306 | |||||||||||
Total gross capital expenditures | 677 | 453 | 1,706 | 1,310 | |||||||||||
Less: Joint venture partner contributions | 64 | 39 | 134 | 132 | |||||||||||
Total capital expenditures, net | 613 | 414 | 1,572 | 1,178 | |||||||||||
Acquisitions | 451 | 29 | 451 | 249 | |||||||||||
Total capital expenditures, net and acquisitions | 1,064 | 443 | 2,023 | 1,427 | |||||||||||
Less: Maintenance capital | 40 | 24 | 98 | 60 | |||||||||||
Acquisitions | 451 | 29 | 451 | 249 | |||||||||||
Total growth capital expenditures | $ | 573 | $ | 390 | $ | 1,474 | $ | 1,118 | |||||||
(a) Includes capital expenditures of the Predecessor for all periods presented. |
View original content:http://www.prnewswire.com/news-releases/mplx-lp-delivers-exceptional-third-quarter-2018-financial-results-300742081.html
SOURCE MPLX LP
FINDLAY, Ohio, Nov. 1, 2018 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported 2018 third quarter earnings of $737 million, or $1.62 per diluted share. Third quarter 2018 earnings included pre-tax charges of $49 million related to pension settlement and transaction costs, or approximately $0.08 per diluted share. This compares with $903 million, or $1.77 per diluted share, in the third quarter of 2017.
"On October 1, we closed on our strategic combination with Andeavor after a vote that demonstrated overwhelming support by both sets of shareholders. We are now the leading, integrated, downstream energy company in the U.S.," said Gary R. Heminger, chairman and chief executive officer. "As we look forward, we see extraordinary potential across our nationwide platform including over $1 billion of annual run-rate synergies within the first three years."
"This was another impressive quarter," Heminger continued. "Our team's strong execution drove over $1.2 billion of cash from operations, allowing us to return $607 million to shareholders, contributing to the $3.2 billion of capital returned so far in 2018. The market environment appears favorable and our integrated business model enables us to capture opportunities including wider crude differentials and the changing dynamics of low-sulfur fuel requirements which we expect to begin to see in the second half of 2019."
Segment Results
MPC's income from operations was $1.40 billion in the third quarter of 2018, compared with $1.58 billion in the third quarter of 2017, driven by strong contributions from the Midstream segment, offset by lower segment income from operations in the Refining and Marketing (R&M) and Speedway segments.
Three Months Ended | |||||||
(In millions) | 2018 | 2017 | |||||
Income from Operations by Segment | |||||||
Refining & Marketing | $ | 666 | $ | 1,097 | |||
Speedway | 161 | 208 | |||||
Midstream | 679 | 355 | |||||
Items not allocated to segments | (103) | (83) | |||||
Income from operations(a) | $ | 1,403 | $ | 1,577 | |||
(a) We adopted Accounting Standards Update 2017-07, Retirement Benefits Presentation of Pension and Postretirement Cost, as |
Refining & Marketing
R&M segment income from operations was $666 million, compared with $1.1 billion in the third quarter of 2017. The year-over-year decrease in R&M segment results was primarily driven by lower Midwest and Gulf Coast crack spreads, partially offset by wider WCS- and WTI- based crude differentials. In addition, R&M segment income was $230 million lower resulting from the February 1, 2018 dropdown transaction. Prior period R&M segment results do not reflect the impact of the dropdown.
Refinery utilization was 97 percent during the quarter. The U.S. Gulf Coast and Chicago LLS blended 6-3-2-1 crack spread on an ex-RIN basis was $8.03 per barrel in the third quarter of 2018 as compared to $8.68 per barrel in the third quarter of 2017. These crack spreads are net of RIN crack adjustments of $1.73 and $4.00 per barrel for the third quarter of 2018 and 2017, respectively.
Midstream
Midstream segment income from operations, which largely reflects MPLX LP (NYSE: MPLX), was $679 million in the quarter, compared with $355 million in the third quarter of 2017. The results include $230 million from the February 1, 2018 drop of refining logistics and fuels distribution services to MPLX. Prior period Midstream segment results do not reflect the impact of these businesses. The incremental $94 million increase in third quarter Midstream segment results were driven by strong pipeline throughput volumes as well as record gathered, processed and fractionated volumes.
During the quarter, MPLX announced several new projects. First, the company plans to participate in a new 600-mile crude pipeline running from the Permian Basin to the Texas Gulf Coast region. Second, the company also plans to jointly develop the Whistler Pipeline, a 2.0 billion cubic feet per day (bcf/d) pipeline designed to deliver natural gas to the Agua Dulce market hub. Lastly, the company announced the acquisition of a Gulf Coast export terminal in Mt. Airy, Louisiana with 4 million barrels of third-party leased storage capacity and a 120 thousand barrel-per-day (mbpd) dock.
Additionally in October, MPLX announced with Crimson Midstream, LLC the commencement of an open season on the proposed 600 mbpd Swordfish Pipeline from St. James, Louisiana, and Raceland, Louisiana, to the Louisiana Offshore Oil Port LLC (LOOP) terminal facility in Clovelly, Louisiana.
Speedway
Speedway segment income from operations was $161 million in the quarter, compared with $208 million in the third quarter of 2017. The year-over-year decrease in segment results was primarily related to higher operating expenses and lower light product margins. Speedway's gasoline and distillate margin decreased to 16.51 cents per gallon in the third quarter of 2018 compared with 17.72 cents per gallon in the third quarter of 2017 primarily due to the effects of rising crude oil prices.
For the quarter, same-store merchandise sales increased by 4.9 percent and same-store gasoline sales volume decreased by 1.2 percent year-over-year. Expenses increased $28 million, primarily due to higher labor and benefits costs. Depreciation was $8 million higher, primarily due to increased investment in the business.
MPC has begun the process of converting the Andeavor company-owned-and-operated stores to the Speedway brand. Since the closing of the transaction on October 1st, roughly 90 sites in the St. Paul and Minneapolis markets have been converted and the company expects to complete approximately 200 sites in total by the end of 2018.
Items Not Allocated to Segments
Items not allocated to segments totaled $103 million of expenses in the third quarter of 2018, compared with $83 million in the third quarter of 2017. The increase was due to transaction costs related to the combination with Andeavor and increased employee benefit costs.
Strong Financial Position and Liquidity
On September 30, 2018, the company had $5.0 billion of cash and cash equivalents, including the approximately $3.5 billion necessary to close the Andeavor transaction on October 1, 2018; $2.5 billion available under a revolving credit agreement and full availability under its $750 million trade receivables securitization facility.
During the quarter, MPC returned $607 million to MPC shareholders, including $400 million in share repurchases. MPC remains committed to its disciplined capital strategy and returning capital beyond the needs of the business in a manner consistent with maintaining the company's current investment-grade credit profile.
MPC Revolving Credit Agreements
On August 28, 2018, in connection with the Andeavor transaction, MPC entered into agreements with a syndicate of lenders to replace MPC's previous credit facilities. The facilities, which became effective October 1, 2018, provide for a $5 billion five-year revolving credit agreement that expires in 2023 and a $1.0 billion 364-day revolving credit agreement that expires in 2019.
The financial covenants and the interest rate terms contained in the new credit agreements are substantially the same as those contained in the previous bank revolving credit facilities.
MPC Senior Notes
As a result of the completion of the Andeavor transaction, MPC assumed an aggregate principal amount of $3.375 billion senior notes issued by Andeavor. On October 2, 2018, approximately $2.905 billion aggregate principal amount of Andeavor's outstanding senior notes were part of an exchange offer and consent solicitation undertaken by MPC and Andeavor, where unsecured notes were exchanged for new unsecured senior notes issued by MPC having the same maturity and interest rates as the Andeavor senior notes and cash.
Other Strategic Updates
In October, MPC began evaluating the financial business plans of Andeavor Logistics LP (NYSE: ANDX), with the intent to move toward financial policies more consistent with its approach towards MPLX. This approach includes meaningfully higher distribution coverage, leverage levels at or below 4.0x EBITDA, no planned public equity issuances, and independent sustainability with limited parent support.
MPC plans to engage advisors and begin the process of assessing all options for the two MLPs, which could include MPLX acquiring ANDX and ANDX acquiring MPLX.
Conference Call
At 9 a.m. EDT today, MPC will hold a conference call and webcast to discuss the reported results and provide an update on company operations. Interested parties may listen by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2018 Third Quarter Financial Results" link. A replay of the webcast will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, will also be available online prior to the conference call and webcast at http://ir.marathonpetroleum.com.
2018 Investor Day
Marathon Petroleum Corporation, MPLX LP, and Andeavor Logistics LP will host their 2018 Investor Day at the Mandarin Oriental Hotel in New York City on December 4, 2018 at 8:30 a.m. EST. Reservations are required to attend. Interested parties can request an invitation by contacting the Investor Relations department via email at investorrelations@marathonpetroleum.com. The presentation will also be webcast live at http://marathonpetroleum.com, http://mplx.com, and http://andeavorlogistics.com.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (NYSE: MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with over 3.0 million barrels per day of crude oil capacity across sixteen refineries. MPC's marketing system includes approximately 7,800 branded locations across the United States, including approximately 5,600 Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates approximately 3,900 retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interests in two midstream companies, MPLX LP (NYSE: MPLX) and Andeavor Logistics LP (NYSE: ANDX), which own and operate gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.
Investor Relations Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
References to Earnings
References to earnings mean net income attributable to MPC from the statements of income. Unless otherwise indicated, references to earnings and earnings per share are MPC's share after excluding amounts attributable to noncontrolling interests.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation (MPC). These forward-looking statements relate to, among other things, the acquisition of Andeavor and include expectations, estimates and projections concerning the business and operations, strategic initiatives and value creation plans of MPC. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 MPC's actual results to differ materially from those implied in the forward-looking statements include: 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; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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 or ANDX; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2017, and in MPC's Form 10-Q for the quarter ended June 30, 2018, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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 MPC's Form 10-K and Forms 10-Q are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of ANDX's Form 10-K are available on the SEC website, ANDX's website at http://ir.andeavorlogistics.com or by contacting ANDX's Investor Relations office.
Consolidated Statements of Income (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions, except per-share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Revenues and other income: | |||||||||||||||
Sales and other operating revenues(a) | $ | 22,787 | $ | 19,053 | $ | 63,599 | $ | 53,220 | |||||||
Sales to related parties | 201 | 157 | 572 | 458 | |||||||||||
Income from equity method investments | 96 | 84 | 262 | 224 | |||||||||||
Net gain on disposal of assets | 1 | — | 6 | 12 | |||||||||||
Other income | 47 | 92 | 122 | 219 | |||||||||||
Total revenues and other income | 23,132 | 19,386 | 64,561 | 54,133 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of revenues (excludes items below)(a) | 20,457 | 16,617 | 57,344 | 47,664 | |||||||||||
Purchases from related parties | 149 | 148 | 428 | 420 | |||||||||||
Depreciation and amortization | 555 | 517 | 1,616 | 1,574 | |||||||||||
Selling, general and administrative expenses(b) | 445 | 411 | 1,271 | 1,286 | |||||||||||
Other taxes | 123 | 116 | 348 | 339 | |||||||||||
Total costs and expenses | 21,729 | 17,809 | 61,007 | 51,283 | |||||||||||
Income from operations(b) | 1,403 | 1,577 | 3,554 | 2,850 | |||||||||||
Net interest and other financial costs(b) | 240 | 158 | 618 | 465 | |||||||||||
Income before income taxes | 1,163 | 1,419 | 2,936 | 2,385 | |||||||||||
Provision for income taxes | 222 | 415 | 525 | 706 | |||||||||||
Net income | 941 | 1,004 | 2,411 | 1,679 | |||||||||||
Less net income attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 19 | 16 | 55 | 49 | |||||||||||
Noncontrolling interests | 185 | 85 | 527 | 214 | |||||||||||
Net income attributable to MPC | $ | 737 | $ | 903 | $ | 1,829 | $ | 1,416 | |||||||
Per-share data | |||||||||||||||
Basic: | |||||||||||||||
Net income attributable to MPC per share | $ | 1.63 | $ | 1.79 | $ | 3.96 | $ | 2.75 | |||||||
Weighted average shares: | 451 | 504 | 462 | 514 | |||||||||||
Diluted: | |||||||||||||||
Net income attributable to MPC per share | $ | 1.62 | $ | 1.77 | $ | 3.92 | $ | 2.73 | |||||||
Weighted average shares: | 456 | 508 | 466 | 518 | |||||||||||
(a) We adopted Accounting Standards Update 2014-09, Revenue - Revenue from contracts with customers, as of Jan. 1, 2018, | |||||||||||||||
(b) We adopted Accounting Standards Update 2017-07, Retirement Benefits Presentation of Pension and Postretirement Cost, as |
Supplemental Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Income from Operations by Segment | |||||||||||||||
Refining & Marketing(a) | $ | 666 | $ | 1,097 | $ | 1,558 | $ | 1,589 | |||||||
Speedway | 161 | 208 | 415 | 581 | |||||||||||
Midstream(a) | 679 | 355 | 1,863 | 996 | |||||||||||
Items not allocated to segments: | |||||||||||||||
Corporate and other unallocated items(b)(c) | (103) | (85) | (283) | (251) | |||||||||||
Litigation | — | — | — | (86) | |||||||||||
Impairments | — | 2 | 1 | 21 | |||||||||||
Income from operations(b) | 1,403 | 1,577 | 3,554 | 2,850 | |||||||||||
Net interest and other financial costs(b) | 240 | 158 | 618 | 465 | |||||||||||
Income before income taxes | 1,163 | 1,419 | 2,936 | 2,385 | |||||||||||
Provision for income taxes | 222 | 415 | 525 | 706 | |||||||||||
Net income | 941 | 1,004 | 2,411 | 1,679 | |||||||||||
Less net income attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 19 | 16 | 55 | 49 | |||||||||||
Noncontrolling interests | 185 | 85 | 527 | 214 | |||||||||||
Net income attributable to MPC | $ | 737 | $ | 903 | $ | 1,829 | $ | 1,416 | |||||||
Capital Expenditures and Investments(d) | |||||||||||||||
Refining & Marketing | $ | 226 | $ | 198 | $ | 613 | $ | 570 | |||||||
Speedway | 98 | 108 | 225 | 221 | |||||||||||
Midstream | 593 | 423 | 1,676 | 1,267 | |||||||||||
Corporate and Other(e) | 28 | 32 | 97 | 92 | |||||||||||
Total | $ | 945 | $ | 761 | $ | 2,611 | $ | 2,150 | |||||||
(a) On Feb. 1, 2018, we contributed certain refining logistics assets and fuels distribution services to MPLX. The results of these | |||||||||||||||
(b) We adopted Accounting Standards Update 2017-07, Retirement Benefits Presentation of Pension and Postretirement Cost, as | |||||||||||||||
(c) Includes transaction-related costs from the Andeavor merger of $4 million and $14 million in the three and nine months ended | |||||||||||||||
(d) Capital expenditures include changes in capital accruals and investments in affiliates, excluding acquisitions. | |||||||||||||||
(e) Includes capitalized interest of $21 million, $13 million, $55 million and $39 million, respectively. |
Supplementary Statistics (Unaudited) (continued) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
MPC Consolidated Refined Product Sales Volumes | 2,394 | 2,357 | 2,358 | 2,272 | |||||||||||
Refining & Marketing (R&M) Operating Statistics | |||||||||||||||
R&M refined product sales volume (mbpd)(b) | 2,382 | 2,357 | 2,346 | 2,263 | |||||||||||
Export sales volume (mbpd)(c) | 280 | 331 | 289 | 291 | |||||||||||
R&M margin (dollars per barrel)(d) | $ | 14.25 | $ | 14.14 | $ | 13.48 | $ | 12.42 | |||||||
Crude oil capacity utilization (percent)(e) | 97.4 | 101.5 | 96.7 | 95.8 | |||||||||||
Refinery throughputs (mbpd):(f) | |||||||||||||||
Crude oil refined | 1,833 | 1,845 | 1,819 | 1,741 | |||||||||||
Other charge and blendstocks | 199 | 172 | 173 | 176 | |||||||||||
Total | 2,032 | 2,017 | 1,992 | 1,917 | |||||||||||
Sour crude oil throughput (percent) | 52 | 57 | 53 | 61 | |||||||||||
WTI-priced crude oil throughput (percent) | 30 | 23 | 28 | 20 | |||||||||||
Refined product yields (mbpd):(f) | |||||||||||||||
Gasoline | 942 | 939 | 942 | 910 | |||||||||||
Distillates | 676 | 673 | 659 | 627 | |||||||||||
Propane | 40 | 38 | 37 | 35 | |||||||||||
Feedstocks and special products | 313 | 298 | 294 | 285 | |||||||||||
Heavy fuel oil | 29 | 45 | 30 | 36 | |||||||||||
Asphalt | 73 | 67 | 68 | 64 | |||||||||||
Total | 2,073 | 2,060 | 2,030 | 1,957 | |||||||||||
Refinery direct operating costs ($/barrel):(g) | |||||||||||||||
Planned turnaround and major maintenance | $ | 1.77 | $ | 1.20 | $ | 1.64 | $ | 1.69 | |||||||
Depreciation and amortization | 1.29 | 1.34 | 1.31 | 1.44 | |||||||||||
Other manufacturing(h) | 3.54 | 3.83 | 3.71 | 4.10 | |||||||||||
Total | $ | 6.60 | $ | 6.37 | $ | 6.66 | $ | 7.23 | |||||||
R&M Operating Statistics by Region - Gulf Coast | |||||||||||||||
Refinery throughputs (mbpd):(i) | |||||||||||||||
Crude oil refined | 1,150 | 1,123 | 1,121 | 1,041 | |||||||||||
Other charge and blendstocks | 204 | 217 | 187 | 219 | |||||||||||
Total | 1,354 | 1,340 | 1,308 | 1,260 | |||||||||||
Sour crude oil throughput (percent) | 63 | 69 | 62 | 75 | |||||||||||
WTI-priced crude oil throughput (percent) | 17 | 14 | 15 | 10 | |||||||||||
Refined product yields (mbpd):(i) | |||||||||||||||
Gasoline | 567 | 538 | 557 | 525 | |||||||||||
Distillates | 442 | 438 | 421 | 393 | |||||||||||
Propane | 27 | 25 | 24 | 25 | |||||||||||
Feedstocks and special products | 314 | 326 | 301 | 310 | |||||||||||
Heavy fuel oil | 16 | 31 | 18 | 24 | |||||||||||
Asphalt | 22 | 19 | 21 | 17 | |||||||||||
Total | 1,388 | 1,377 | 1,342 | 1,294 |
Supplementary Statistics (Unaudited) (continued) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Refinery direct operating costs ($/barrel):(g) | |||||||||||||||
Planned turnaround and major maintenance | $ | 0.64 | $ | 0.90 | $ | 1.30 | $ | 1.86 | |||||||
Depreciation and amortization | 1.03 | 1.05 | 1.03 | 1.15 | |||||||||||
Other manufacturing(h) | 3.20 | 3.52 | 3.43 | 3.81 | |||||||||||
Total | $ | 4.87 | $ | 5.47 | $ | 5.76 | $ | 6.82 | |||||||
R&M Operating Statistics by Region - Midwest | |||||||||||||||
Refinery throughputs (mbpd):(i) | |||||||||||||||
Crude oil refined | 683 | 722 | 698 | 700 | |||||||||||
Other charge and blendstocks | 49 | 35 | 39 | 31 | |||||||||||
Total | 732 | 757 | 737 | 731 | |||||||||||
Sour crude oil throughput (percent) | 34 | 38 | 37 | 41 | |||||||||||
WTI-priced crude oil throughput (percent) | 52 | 38 | 49 | 34 | |||||||||||
Refined product yields (mbpd):(i) | |||||||||||||||
Gasoline | 375 | 401 | 385 | 385 | |||||||||||
Distillates | 234 | 235 | 238 | 234 | |||||||||||
Propane | 13 | 14 | 13 | 11 | |||||||||||
Feedstocks and special products | 53 | 50 | 46 | 47 | |||||||||||
Heavy fuel oil | 13 | 15 | 12 | 13 | |||||||||||
Asphalt | 51 | 48 | 47 | 47 | |||||||||||
Total | 739 | 763 | 741 | 737 | |||||||||||
Refinery direct operating costs ($/barrel):(g) | |||||||||||||||
Planned turnaround and major maintenance | $ | 3.74 | $ | 1.60 | $ | 2.13 | $ | 1.22 | |||||||
Depreciation and amortization | 1.68 | 1.72 | 1.70 | 1.80 | |||||||||||
Other manufacturing(h) | 3.89 | 3.96 | 3.96 | 4.19 | |||||||||||
Total | $ | 9.31 | $ | 7.28 | $ | 7.79 | $ | 7.21 | |||||||
Speedway Operating Statistics | |||||||||||||||
Convenience stores at period-end | 2,745 | 2,734 | |||||||||||||
Gasoline and distillate sales (millions of gallons) | 1,474 | 1,464 | 4,317 | 4,332 | |||||||||||
Gasoline and distillate margin (dollars per gallon)(j) | $ | 0.1651 | $ | 0.1772 | $ | 0.1620 | $ | 0.1727 | |||||||
Merchandise sales (in millions) | $ | 1,339 | $ | 1,295 | $ | 3,753 | $ | 3,693 | |||||||
Merchandise margin (in millions) | $ | 384 | $ | 374 | $ | 1,069 | $ | 1,065 | |||||||
Merchandise margin percent | 28.7 | % | 28.9 | % | 28.5 | % | 28.8 | % | |||||||
Same store gasoline sales volume (period over period)(k) | (1.2) | % | (3.1) | % | (1.8) | % | (1.6) | % | |||||||
Same store merchandise sales (period over period)(k)(l) | 4.9 | % | 0.3 | % | 3.4 | % | 1.5 | % | |||||||
Midstream Operating Statistics | |||||||||||||||
Crude oil & refined product pipeline throughputs (mbpd)(m) | 3,829 | 3,562 | 3,694 | 3,299 | |||||||||||
Terminal throughput (mbpd) | 1,474 | 1,496 | 1,468 | 1,470 | |||||||||||
Gathering system throughput (million cubic feet per day)(n) | 4,737 | 3,729 | 4,403 | 3,415 | |||||||||||
Natural gas processed (million cubic feet per day)(n) | 7,171 | 6,581 | 6,874 | 6,336 | |||||||||||
C2 (ethane) + NGLs fractionated (mbpd)(n) | 488 | 397 | 451 | 384 | |||||||||||
(a) Total average daily volumes of refined product sales to wholesale, branded and retail customers. | |||||||||||||||
(b) Includes intersegment sales. | |||||||||||||||
(c) Represents fully loaded export cargoes for each time period. These sales volumes are included in the total sales volume | |||||||||||||||
(d) Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. | |||||||||||||||
(e) Based on calendar-day capacity, which is an annual average that includes down time for planned maintenance and other | |||||||||||||||
(f) Excludes inter-refinery volumes of 54 mbpd and 80 mbpd for the third quarter of 2018 and 2017, respectively and 53 mbpd and | |||||||||||||||
(g) Per barrel of total refinery throughputs. Effective with the Feb. 1, 2018, dropdown, direct operating costs related to certain | |||||||||||||||
(h) Includes utilities, labor, routine maintenance and other operating costs. | |||||||||||||||
(i) Includes inter-refinery transfer volumes. | |||||||||||||||
(j) The price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bank card | |||||||||||||||
(k) Same store comparison includes only locations owned at least 13 months. | |||||||||||||||
(l) Excludes cigarettes. | |||||||||||||||
(m) Includes common-carrier pipelines and private pipelines owned or operated by MPLX, excluding equity method investments. | |||||||||||||||
(n) Includes amounts related to unconsolidated equity method investments on a 100% basis. |
Segment Earnings Before Interest, Taxes, Depreciation & Amortization (Segment EBITDA) (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Segment EBITDA(a) | |||||||||||||||
Refining & Marketing(b) | $ | 923 | $ | 1,363 | $ | 2,319 | $ | 2,394 | |||||||
Speedway | 237 | 276 | 643 | 778 | |||||||||||
Midstream(b) | 884 | 524 | 2,440 | 1,524 | |||||||||||
Total Segment EBITDA(a) | 2,044 | 2,163 | 5,402 | 4,696 | |||||||||||
Total segment depreciation & amortization | (538) | (503) | (1,566) | (1,530) | |||||||||||
Items not allocated to segments | (103) | (83) | (282) | (316) | |||||||||||
Income from operations | 1,403 | 1,577 | 3,554 | 2,850 | |||||||||||
Net interest and other financial costs | 240 | 158 | 618 | 465 | |||||||||||
Income before income taxes | 1,163 | 1,419 | 2,936 | 2,385 | |||||||||||
Income tax provision | 222 | 415 | 525 | 706 | |||||||||||
Net income | 941 | 1,004 | 2,411 | 1,679 | |||||||||||
Less net income attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 19 | 16 | 55 | 49 | |||||||||||
Noncontrolling interests | 185 | 85 | 527 | 214 | |||||||||||
Net income attributable to MPC | $ | 737 | $ | 903 | $ | 1,829 | $ | 1,416 | |||||||
(a) Segment EBITDA represents segment earnings before interest and financing costs, interest income, income taxes and | |||||||||||||||
(b) On Feb. 1, 2018, we contributed certain refining logistics assets and fuels distribution services to MPLX. The results of these |
Select Financial Data (Unaudited) | |||||||
(In millions) | September 30 | June 30 | |||||
Cash and cash equivalents | $ | 4,992 | $ | 4,999 | |||
MPLX debt | 12,890 | 11,875 | |||||
Total consolidated debt | 18,449 | 17,267 | |||||
Redeemable noncontrolling interest | 1,003 | 1,003 | |||||
Equity | 19,031 | 18,818 | |||||
Debt-to-total-capital ratio (percent) | 48 | 47 | |||||
Shares outstanding | 451 | 456 | |||||
Net cash provided by operations (quarter ended) | $ | 1,182 | $ | 2,386 | |||
Three Months Ended | Nine Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Dividends paid per share | $ | 0.46 | $ | 0.40 | $ | 1.38 | $ | 1.12 | |||||||
Reconciliation of Refining & Marketing Margin to Refining & Marketing Income from Operations | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Refining & Marketing income from operations | $ | 666 | $ | 1,097 | $ | 1,558 | $ | 1,589 | |||||||
Plus: | |||||||||||||||
Refinery direct operating costs(a) | 992 | 933 | 2,912 | 3,029 | |||||||||||
Refinery depreciation and amortization | 241 | 249 | 712 | 755 | |||||||||||
Other: | |||||||||||||||
Operating expenses, net(a)(b) | 748 | 328 | 2,101 | 1,075 | |||||||||||
Depreciation and amortization | 16 | 17 | 49 | 50 | |||||||||||
Refining & Marketing margin(c) | $ | 2,663 | $ | 2,624 | $ | 7,332 | $ | 6,498 | |||||||
(a) Excludes depreciation and amortization. | |||||||||||||||
(b) Includes fees paid to MPLX for various midstream services. MPLX's results are reported in MPC's Midstream segment. | |||||||||||||||
(c) Refining & Marketing margin is defined as sales revenue less cost of refinery inputs and purchased products, excluding any |
Reconciliation of Speedway Total Margin to Speedway Income from Operations | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Speedway income from operations | $ | 161 | $ | 208 | $ | 415 | $ | 581 | |||||||
Plus (Less): | |||||||||||||||
Operating, selling, general and administrative expenses | 418 | 390 | 1,203 | 1,133 | |||||||||||
Depreciation and amortization | 76 | 68 | 228 | 197 | |||||||||||
Income from equity method investments | (18) | (20) | (51) | (54) | |||||||||||
Net gain on disposal of assets | (1) | (2) | (1) | (12) | |||||||||||
Other income | (2) | (3) | (5) | (9) | |||||||||||
Speedway total margin | $ | 634 | $ | 641 | $ | 1,789 | $ | 1,836 | |||||||
Speedway total margin:(a) | |||||||||||||||
Gasoline and distillate margin | $ | 243 | $ | 259 | $ | 699 | $ | 748 | |||||||
Merchandise margin | 384 | 374 | 1,069 | 1,065 | |||||||||||
Other margin | 7 | 8 | 21 | 23 | |||||||||||
Speedway total margin | $ | 634 | $ | 641 | $ | 1,789 | $ | 1,836 | |||||||
(a) Speedway gasoline and distillate margin is defined as the price paid by consumers less the cost of refined products, including |
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SOURCE Marathon Petroleum Corporation
FINDLAY, Ohio, Oct. 31, 2018 /PRNewswire/ -- The board of directors of Marathon Petroleum Corp. (NYSE: MPC) has declared a dividend of $0.46 per share on common stock. The dividend is payable Dec. 10, 2018, to shareholders of record as of the close of business Nov. 21, 2018.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (NYSE: MPC) is a leading, nationwide, integrated energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with over 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes approximately 7,800 branded locations across the United States, including approximately 5,600 Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates approximately 3,900 retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interests in two midstream companies, MPLX LP (NYSE: MPLX) and Andeavor Logistics LP (NYSE: ANDX), which own and operate gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.
Investor Relations Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-quarterly-dividend-300741135.html
SOURCE Marathon Petroleum Corporation
FINDLAY, Ohio, Oct. 26, 2018 /PRNewswire/ -- The board of directors of the general partner of MPLX LP (NYSE: MPLX) has declared a quarterly cash distribution of $0.6375 per common unit for the third quarter 2018. This represents an increase of $0.01 per unit, or 1.6 percent, over the second quarter 2018 distribution, and an increase of $0.05 per unit, or 8.5 percent, over the third quarter 2017 distribution. This is the 23rd consecutive quarterly distribution increase and will be paid on Nov. 14, 2018, to common unitholders of record as of Nov. 5, 2018.
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100 percent of MPLX's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MPLX's distributions to non-United States investors are subject to federal income tax withholding at the highest applicable effective tax rate.
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 Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
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SOURCE MPLX LP
FINDLAY, Ohio, Oct. 26, 2018 /PRNewswire/ -- Andeavor Logistics LP (NYSE: ANDX) announced today the declaration of its quarterly cash distribution for the third quarter 2018 of $1.03 per limited partnership unit, or $4.12 on an annualized basis. The distribution is unchanged from the prior quarter and will be paid on Nov. 14, 2018, to common unitholders of record as of Nov. 5, 2018.
"We are evaluating the financial business plans of ANDX, including the partnership's distribution policies, with the intent to move toward practices that are more consistent with the general partner's approach on MPLX LP (NYSE: MPLX)," stated Gary Heminger, who became chairman and chief executive officer of ANDX upon the closing of Marathon Petroleum Corp.'s (NYSE: MPC) combination with Andeavor. "This approach will include meaningfully higher distribution coverage, leverage levels at or below 4.0x debt-to-EBITDA*, no planned public equity issuances, and independent sustainability with limited parent support."
*EBITDA is defined as earnings before interest, taxes, depreciation and amortization.
About Andeavor Logistics LP
Andeavor Logistics LP is a fee-based, full-service, diversified midstream logistics company, with integrated assets across the western and mid-continent regions of the United States. Andeavor Logistics operates through three business segments: Terminalling and Transportation, Gathering and Processing and Wholesale. The Terminalling and Transportation segment consists of marine terminals, refined product truck terminals, rail terminals, dedicated storage facilities and transportation pipelines. The Gathering and Processing segment consists of crude oil gathering systems and pipelines as well as natural gas gathering pipelines, processing facilities and fractionation facilities. The Wholesale segment consists of a fee-based fuel wholesale business. Andeavor Logistics is a Delaware limited partnership, headquartered in Findlay, Ohio.
Forward Looking Statements
This press release contains "forward-looking" statements within the meaning of federal securities laws regarding ANDX. These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the amount and timing of our cash distributions. You can identify forward-looking statements by words such as "anticipate," "approach," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Factors that could cause ANDX's actual results to differ materially from those implied in the forward-looking statements include without limitation statements concerning: the amount and timing of future distributions; expected coverage improvement and distributable cash growth; our ability to execute a funding model with no additional equity issuances and limited parent support; net earnings and EBITDA run rate; our ability to achieve our financial and strategic targets; expected unitholder value creation; negative capital market conditions, including an increase of the current yield on common units; our financial position, liquidity and capital resources, including available capacity under our credit facilities and access to debt on commercially reasonable terms; our financial and operational outlook, and ability to fulfill that outlook; continued/further volatility in and/or degradation of market and industry conditions and their effects on our business; our ability to manage disruptions in credit markets or changes to our credit rating; adverse changes in laws including with respect to tax and regulatory matters; other risk factors inherent to ANDX's industry; and the factors set forth under the heading "Risk Factors" in ANDX's Annual Report on Form 10-K for the year ended Dec. 31, 2017, filed with the Securities and Exchange Commission ("SEC"). Although we believe the assumptions concerning future events are reasonable, a number of factors could cause results to differ materially from those projected. Our operations involve risks and uncertainties, many of which are outside of our control and could materially affect our results. For more information concerning factors that could affect these statements, see our annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the SEC, available at http://www.andeavorlogistics.com or by contacting ANDX's Investor Relations Office. We undertake no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
This release serves as qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b)(4) and (d). Please note that 100 percent of Andeavor Logistics LP's distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of Andeavor Logistics' distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals or corporations, as applicable. Nominees, and not Andeavor Logistics, are treated as withholding agents responsible for withholding distributions received by them on behalf of foreign investors.
Investor Relations Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
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SOURCE Andeavor Logistics LP
FINDLAY, Ohio, Oct. 17, 2018 /PRNewswire/ -- Crimson Midstream, LLC, and MPLX LP (NYSE: MPLX), today announced the commencement of a binding open season to assess interest and solicit commitments from prospective shippers for transportation service on the Swordfish Pipeline.
The Swordfish Pipeline is being jointly developed by Crimson and MPLX to provide connectivity from existing terminal facilities in St. James, Louisiana, and Raceland, Louisiana, to the Louisiana Offshore Oil Port LLC (LOOP) terminal facility in Clovelly, Louisiana. The proposed pipeline would be a multi-diameter batched system with the ability to transport up to 600,000 barrels of crude oil per day and provide shippers with access to storage services, vessel loading, as well as connectivity to other carriers at the Clovelly Hub. The in-service date for the Swordfish Pipeline is anticipated to be in the first half of 2020.
The binding open season will begin at 8 a.m. CDT on Oct. 17, 2018, and will conclude at noon CST on Nov. 30, 2018. The binding open season provides interested shippers with an opportunity to secure transportation service on the proposed pipeline.
"Swordfish is an industry solution that provides needed capacity to local Louisiana refineries and to the Clovelly Hub based on market demands," said MPLX President Michael Hennigan. "We believe our pipeline's ability to be paired with existing assets will make it more competitive than alternative projects to supply refiners in the region. The pipeline would also provide needed additional capacity for exporters of North American crude."
"Leveraging mostly existing infrastructure, this open season offers Gulf Coast refiners and North American crude exporters a first-to-market pipeline solution providing reliable supply from St. James," added Larry Alexander, Crimson's president and chief operating officer. "The Swordfish Pipeline enables Crimson and MPLX to provide transportation solutions from St. James to a wide range of markets."
About Swordfish Pipeline
The proposed Swordfish Pipeline would originate from terminal facilities in St. James, Louisiana, and Raceland, Louisiana, and provide service to the Clovelly Hub. Storage and further transportation services to end markets would be facilitated through the Clovelly Hub and connecting carriers. Pending shipper interest and final construction of the project, the Swordfish Pipeline is expected to be a multi-diameter (16", 20" and 30") batched system with the ability to transport various levels of capacity, from approximately 170,000 to 600,000 barrels of crude oil per day based on market demands. The completion of the Swordfish Pipeline will have minimal impact on current shippers on the Crimson system, as their ability to access the St. James and local refining markets will be maintained.
Open Season Process
Documents and further details related to the binding open season will be made available upon completion of a confidentiality agreement, available at:
http://www.crimsonmidstream.com/shipper-information
http://www.mplx.com/St_James_to_Clovelly_Binding_Open_Season/
All interested shippers should submit an executed confidentiality agreement to:
Will Airhart
Attorney
539 S. Main St., Rm. 887-M
Findlay, OH 45840
Direct: 419-421-4561
Email: waairhart@mplx.com
About Crimson Midstream, LLC
Crimson Midstream LLC is a provider of crude oil transportation and storage services in California, Louisiana, and offshore Gulf of Mexico. Crimson safely and reliably operates more than 2000 miles of pipeline transporting approximately 400 thousand barrels of crude oil per day to end users. Crimson is led by a management team with deep experience in pipeline operations and management. For further information on Crimson, visit the company's website at http://www.crimsonmidstream.com.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; the transportation, storage and distribution of crude oil and refined petroleum products; and the refining logistics and fuels distribution services through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 80,000 barrels per day of crude oil and product throughput capacity; tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.7 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.
Legal Contact:
Will Airhart
419-421-4561
waairhart@mplx.com
Commercial Contact:
Nestor Taura
Crimson Midstream
562-285-4148
ntaura@crimsonpl.com
Matt Heft
Marathon Pipe Line LLC
419-429-5499
mrheft@mplx.com
This press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements relate to, among other things, statements with respect to forecasts regarding capacity, rates, incremental investment and timing for becoming operational for the opportunities discussed above, as well as MPLX's future growth and results of operations. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the company and are difficult to predict. Factors that could impact the opportunities described above are: the ability to negotiate and enter into definitive agreements between the parties; the ability to obtain required regulatory approvals on a timely basis; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of pipeline capacity by our competitors; the occurrence of an operational hazard or unforeseen interruption; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2017, filed with the Securities and Exchange Commission (SEC). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPLX's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPLX's Form10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.
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SOURCE MPLX LP
FINDLAY, Ohio, Oct. 15, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will release its 2018 third-quarter financial results before the market opens on Thursday, November 1, 2018. MPLX will live broadcast its conference call with senior executives regarding its financial results and provide an update on company operations at 11 a.m. EDT.
Interested parties may listen to the conference call by visiting MPLX's website at http://www.mplx.com and clicking on the "2018 Third-Quarter Financial Results" link. A replay of the webcast will be available on the company's website. Financial information, including the earnings release and other investor-related material, also will be available online. Replays of the conference call will be available on the company's website through Thursday, November 15.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; the transportation, storage and distribution of crude oil and refined petroleum products; and the refining logistics and fuels distributions services through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.7 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
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SOURCE MPLX LP
FINDLAY, Ohio, Oct. 15, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will release its 2018 third-quarter financial results before the market opens on Thursday, November 1, 2018. MPC will live broadcast its conference call with senior executives regarding its financial results and provide an update on company operations at 9 a.m. EDT.
Interested parties may listen to the conference call by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2018 Third-Quarter Financial Results" link. A replay of the webcast will be available on the company's website. Financial information, including the earnings release and other investor-related material, also will be available online. Replays of the conference call will be available on the company's website through Thursday, November 15.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (NYSE: MPC) is a leading, nationwide, integrated energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with over 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes approximately 7,800 branded locations across the United States, including approximately 5,600 Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates approximately 4,000 retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interest in two midstream companies, MPLX LP (NYSE: MPLX) and Andeavor Logistics LP (NYSE: ANDX), which own and operate gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
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SOURCE Marathon Petroleum Corporation
FINDLAY, Ohio, Oct. 1, 2018 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) today announced the final results of the previously announced offers to exchange (the "Exchange Offers") any and all outstanding senior notes issued by Andeavor as set forth in the table below (the "Existing Andeavor Notes") for (1) up to $3,375,000,000 aggregate principal amount of new senior notes issued by MPC (the "New MPC Notes") and (2) cash, and related consent solicitations (the "Consent Solicitations") to adopt certain amendments to each of the indentures governing the Existing Andeavor Notes.
The Exchange Offers and Consent Solicitations expired at 12:01, a.m., New York City time, on Oct. 1, 2018 (the "Expiration Date"). As of the Expiration Date, the following principal amounts of each series of Existing Andeavor Notes were validly tendered and not validly withdrawn (and consents thereby validly given and not validly revoked):
Title of Series/CUSIP Number of Existing | Aggregate Principal Amount | Existing Andeavor Notes Tendered at | |
Principal Amount | Percentage | ||
5.375% Senior Notes due 2022 / 881609AZ4 | $475,000,000 | $336,820,000 | 70.91% |
4.750% Senior Notes due 2023 / | $850,000,000 | $613,986,000 | 72.23% |
5.125% Senior Notes due 2024 / 881609BA8 | $300,000,000 | $241,283,000 | 80.43% |
5.125% Senior Notes due 2026 / | $750,000,000 | $718,710,000 | 95.83% |
3.800% Senior Notes due 2028 / 03349MAA3 | $500,000,000 | $496,487,000 | 99.30% |
4.500% Senior Notes due 2048 / 03349MAB1 | $500,000,000 | $497,590,000 | 99.52% |
The Exchange Offers and Consent Solicitations were made in connection with MPC's acquisition of Andeavor, which was completed on Oct. 1, 2018, and pursuant to the terms and subject to the conditions set forth in the offering memorandum and consent solicitation statement, dated Aug. 29, 2018 (the "Offering Memorandum and Consent Solicitation Statement").
Upon settlement of the Exchange Offers and Consent Solicitations, which is expected to occur on Tuesday, Oct. 2, 2018, MPC will (i) issue to the holders of the Existing Andeavor Notes whose securities were tendered on or before 5:00 p.m., New York City Time, on September 12, 2018 (the "Early Tender Date"), and accepted for exchange, New MPC Notes in an equal aggregate principal amount to the principal amount of the Existing Andeavor Notes that have been accepted for exchange, (ii) issue to the holders of the Existing Andeavor Notes whose securities were tendered after the Early Tender Date but prior to the Expiration Date and accepted for exchange, New MPC Notes in an aggregate principal amount equal to $970 for each $1,000 aggregate principal amount of Existing Andeavor Notes that have been accepted for exchange, and (iii) pay to the holders of the Existing Andeavor Notes whose securities have been accepted for exchange a total of $2,904,874 in cash as part of the exchange consideration.
In addition, as previously disclosed, Andeavor received consents in the Consent Solicitations sufficient to approve amendments to the respective indentures governing the Existing Andeavor Notes. As a result, Andeavor and the trustee for the Existing Andeavor Notes entered into supplemental indentures implementing those amendments to the indentures governing the Existing Andeavor Notes.
The New MPC Notes will only be issued to eligible holders of Existing Andeavor Notes who have completed and returned an eligibility form confirming that they are either (i) "Qualified Institutional Buyers" as that term is defined in Rule 144A under the Securities Act of 1933 (the "Securities Act") or (ii) persons that are outside of the "United States" and that are (a) not "U.S. persons," as those terms are defined in Rule 902 under the Securities Act, (b) "non-U.S. qualified offerees," as defined in the Offering Memorandum and Consent Solicitation Statement, and (c) not located in Canada.
The New MPC Notes have not been and will not be registered under the Securities Act or any state securities laws. Therefore, the New MPC Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (NYSE: MPC) is a leading integrated downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with over 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes approximately 7,800 branded locations across the United States, including approximately 5,600 Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates approximately 4,000 retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interest in two midstream companies, MPLX LP (NYSE: MPLX) and Andeavor Logistics LP (NYSE: ANDX), which own and operate gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.
Investor Relations Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
This communication contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation (MPC). These forward-looking statements relate to, among other things, the acquisition of Andeavor and include expectations, estimates and projections concerning the business and operations, strategic initiatives and value creation plans of MPC. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 MPC's actual results to differ materially from those implied in the forward-looking statements include: 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; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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 or Andeavor Logistics LP (ANDX); and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2017, and in MPC's Form 10-Q for the quarter ended June 30, 2018, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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 MPC's Form 10-K are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of ANDX's Form 10-K are available on the SEC website, ANDX's website at http://ir.andeavorlogistics.com or by contacting ANDX's Investor Relations office.
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SOURCE Marathon Petroleum Corporation
FINDLAY, Ohio, Oct. 1, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) has closed the transaction in which it acquired all of the outstanding shares of Andeavor. As of this morning, Andeavor ceased to be publicly traded and its common stock discontinued trading on the New York Stock Exchange.
"This transformative transaction is a significant milestone in our company's more than 130-year history," said MPC Chairman and Chief Executive Officer Gary R. Heminger. "MPC is now the leading refining, midstream, and marketing company in the U.S., and is well-positioned for long-term growth and shareholder value creation."
"We are excited to begin unlocking the extraordinary potential across our new platform, including approximately $1 billion of tangible annual run-rate synergies we expect within the first three years," added Heminger. "We look forward to sharing more details around our plans at our upcoming December Investor Day."
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (NYSE: MPC) is a leading integrated downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with over 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes approximately 7,800 branded locations across the United States, including approximately 5,600 Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates approximately 4,000 retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interest in two midstream companies, MPLX LP (NYSE: MPLX) and Andeavor Logistics LP (NYSE: ANDX), which own and operate gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.
Investor Relations Contact
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
Forward Looking Statements
This communication contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation (MPC). These forward-looking statements relate to, among other things, the acquisition of Andeavor and include expectations, estimates and projections concerning the business and operations, strategic initiatives and value creation plans of MPC. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 MPC's actual results to differ materially from those implied in the forward-looking statements include: 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; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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 or Andeavor Logistics LP (ANDX); and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2017, and in MPC's Form 10-Q for the quarter ended June 30, 2018, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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 MPC's Form 10-K are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of ANDX's Form 10-K are available on the SEC website, ANDX's website at http://ir.andeavorlogistics.com or by contacting ANDX's Investor Relations office.
SOURCE Marathon Petroleum Corporation
MT. AIRY, La., Sept. 26, 2018 /PRNewswire/ -- Pin Oak Holdings, LLC ("Pin Oak") today announced the sale of Pin Oak Terminals, LLC ("Pin Oak Mt. Airy") to MPLX LP (NYSE: MPLX) for approximately $450 million in cash. As part of the transaction, Pin Oak will retain an economic interest in the facility. Pin Oak is a partnership between Dauphine Midstream, LLC ("Dauphine") and Mercuria Energy Group Ltd. ("Mercuria").
Pin Oak Mt. Airy was the first asset developed, financed, constructed, and operated by Pin Oak. The greenfield site was acquired in 2012 with the objective of developing a full-service transportation hub on the Mississippi River. Pin Oak Mt. Airy has 4 million barrels of fully-leased storage capacity and an operational deep-water ship dock. The facility has the capability to expand its storage capacity to 10 million barrels and is permitted for construction of a second deep-water ship dock.
"Our team is very proud to have built a premier storage and logistics facility in Louisiana, and this transaction further validates our development strategy and ability to execute," said C. Mike Reed, Chief Executive Officer of Pin Oak. "We delivered top-tier logistics solutions for our customers, and we are pleased that our dedicated employees will continue to provide excellent service to our valued customers."
"As the project's initial developers, we remain grateful for our partnerships with the Port of South Louisiana, St. John the Baptist Parish government, and the St. John the Baptist Parish Sherriff's office. We look forward to seeing the continued growth of the terminal and building on our strong relationships with the local community," said Harris Ziskroit, Chief Investment Officer of Dauphine.
"Mercuria is pleased to have been a partner in constructing and operating a world-class terminal in Louisiana," said Brian Falik, Mercuria's Chief Investment Officer – Americas. "We look forward to Pin Oak actively developing additional terminals and forging strong ties with key customers and local communities."
Pin Oak recently commenced construction on its liquid bulk export terminal in Corpus Christi, Texas called Pin Oak Corpus Christi. Since acquiring Pin Oak Corpus Christi in 2017, Pin Oak has successfully executed an interconnection agreement with a crude oil pipeline and secured a multi-million-barrel long-term crude oil storage contract, with the capacity to construct additional third party storage. Pin Oak Corpus Christi is expected to commence full operations during the fourth quarter of 2019.
About Pin Oak Holdings, LLC
Pin Oak Holdings, LLC is a partnership between Dauphine Midstream, LLC and Mercuria Energy Group Ltd. and is committed to the development, acquisition, and operations of midstream and downstream assets in North America, with a focus on the U.S. Gulf Coast.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; the transportation, storage and distribution of crude oil and refined petroleum products; and the refining logistics and fuels distributions services through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.7 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.
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SOURCE Mercuria Energy
FINDLAY, Ohio, Sept. 26, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) today announced it has purchased an eastern U.S. Gulf Coast export terminal with 4 million barrels of third-party leased storage capacity and a 120,000 barrels-per-day (bpd) dock from Pin Oak Holdings, LLC, for approximately $450 million. The transaction will be financed with a combination of cash from operations and debt. This facility has the capability to significantly expand its storage capacity to 10 million barrels and is permitted for construction of a second 120,000 bpd dock. This growth potential is significant, as multiple pipelines and rail lines cross the property, and the terminal is positioned as an aggregation point for liquids growth in the region for both ocean-going vessels and inland barges. As the facility expands, this investment is expected to generate a mid-teens percent return.
The facility, which will be known as MPLX's Mt. Airy Terminal, is strategically located on the Mississippi River between New Orleans and Baton Rouge, near nine lower-Mississippi refineries, including Marathon Petroleum Corporation's (NYSE: MPC) Garyville refinery. The Mt. Airy facility can handle multiple refined products, as well as residual fuel and bunker products to provide optionality and flexibility of feedstocks and finished products in a single location.
"This acquisition provides an excellent platform for MPLX, as production growth and refining output increase the requirement for additional export capacity," said Michael J. Hennigan, president of MPLX. "With a prime location on the Mississippi River and proximity to over 2 million barrels per day of refining capacity, this terminal will serve as a platform to meet growing export needs, expand our third-party business, and give MPLX tremendous flexibility to help its customers meet upcoming International Maritime Organization fuel standards."
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; the transportation, storage and distribution of crude oil and refined petroleum products; and the refining logistics and fuels distributions services through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.7 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
This press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements relate to, among other things, statements with respect to forecasts regarding expansion plans for the opportunities discussed above, as well as MPLX's future growth and results of operations. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "platform," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the company and are difficult to predict. Factors that could impact the opportunities described above are: the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of capacity by our competitors; the ability to obtain required regulatory approvals on a timely basis; the occurrence of an operational hazard or unforeseen interruption; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2017, filed with the Securities and Exchange Commission (SEC). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPLX's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.
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SOURCE MPLX LP
FINDLAY, Ohio, Sept. 12, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) today announced that its subsidiary, MarkWest Liberty NGL Pipeline, L.L.C., has launched a binding open season to solicit commitments from potential shippers for a new pipeline it plans to construct to serve the growing needs of Appalachian producers. Once complete, the pipeline will provide transportation services of a mixed stream of natural gas liquids (NGLs) – including propane, normal butane, isobutane, pentanes and higher molecular-weight hydrocarbons – from natural gas processing plants located in West Virginia and Pennsylvania to fractionation facilities located in Ohio and Pennsylvania.
Shippers electing to make long-term volume commitments to the project during the open season will be eligible to receive firm service for their committed volumes. The binding open season will commence today and is scheduled to conclude at 8 p.m. Eastern Time on Oct. 12, 2018.
For additional information regarding the project, or to obtain a confidentiality agreement, interested shippers should contact:
Andrew Morrison
Managing Counsel
MarkWest Energy Partners, L.P.
1515 Arapahoe Street, Tower 1, Suite 1600
Denver, CO 80202
Office Phone: (303) 925-9207
Email: andrew.morrison@markwest.com
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering,transportation, fractionation, storage and marketing of NGLs; the transportation, storage and distribution of crude oil and refined petroleum products; and the refining logistics and fuels distributions services through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 80,000 barrels per day of crude oil and product throughput capacity; tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.7 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.
This press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements relate to, among other things, statements with respect to forecasts regarding capacity, rates, incremental investment and timing for becoming operational for the opportunities discussed above, as well as MPLX's future growth and results of operations. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could,""may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the company and are difficult to predict.Factors that could impact the opportunities described above are: the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of pipeline capacity by our competitors; the ability to obtain required regulatory approvals on a timely basis; the occurrence of an operational hazard or unforeseen interruption; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2017, filed with the Securities and Exchange Commission (SEC). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPLX's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPLX's Form10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.
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SOURCE MPLX LP
DALLAS and TULSA, Okla., and FINDLAY, Ohio, and BRENTWOOD, Tenn., Sept. 4, 2018 /PRNewswire/ -- Energy Transfer Partners, L.P. (NYSE: ETP) ("Energy Transfer"), Magellan Midstream Partners, L.P. (NYSE: MMP) ("Magellan"), MPLX LP (NYSE: MPLX) ("MPLX") and Delek US Holdings, Inc. (NYSE: DK) ("Delek") announced today that they have received sufficient commitments to proceed with plans to construct a new 30-inch diameter common carrier pipeline to transport crude oil from the Permian Basin to the Texas Gulf Coast region, with the ability to increase the pipe diameter to expand the capacity based upon additional commitments received during the upcoming open season. An open season for additional shipper volume commitments on the new pipeline system will be launched this week.
The 600-mile pipeline system is expected to be operational in mid-2020 with multiple Texas origins, including Wink, Crane and Midland. The pipeline system will have the strategic capability to transport crude oil to both Energy Transfer's Nederland, Texas terminal and Magellan's East Houston, Texas terminal for ultimate delivery through their respective distribution systems.
The project is subject to receipt of customary regulatory and Board approvals of the respective entities.
About Energy Transfer Partners, L.P.
Energy Transfer Partners, L.P. (NYSE: ETP) is a master limited partnership that owns and operates one of the largest and most diversified portfolios of energy assets in the United States. Strategically positioned in all of the major U.S. production basins, ETP owns and operates a geographically diverse portfolio of complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; NGL fractionation; and various acquisition and marketing assets. ETP's general partner is owned by Energy Transfer Equity, L.P. (ETE). More information is available at www.energytransfer.com.
About Magellan Midstream Partners, L.P.
Magellan Midstream Partners, L.P. (NYSE: MMP) is a publicly traded partnership that primarily transports, stores and distributes refined petroleum products and crude oil. Magellan owns the longest refined petroleum products pipeline system in the country, with access to nearly 50% of the nation's refining capacity, and can store more than 100 million barrels of petroleum products such as gasoline, diesel fuel and crude oil. More information is available at www.magellanlp.com.
About MPLX LP
MPLX LP (NYSE: MPLX) is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 80,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.7 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. More information is available at www.mplx.com.
About Delek US Holdings, Inc.
Delek US Holdings, Inc. (NYSE: DK) is a diversified downstream energy company with assets in petroleum refining, logistics, renewable fuels and convenience store retailing. The refining assets consist of refineries operated in Tyler and Big Spring, Texas, El Dorado, Arkansas and Krotz Springs, Louisiana with a combined nameplate crude throughput capacity of 302,000 barrels per day. The logistics operations primarily consist of Delek Logistics Partners, LP. Delek US Holdings, Inc. and its affiliates own approximately 63% (including the 2 percent general partner interest) of Delek Logistics Partners, LP. Delek Logistics Partners, LP (DKL) is a growth-oriented master limited partnership focused on owning and operating midstream energy infrastructure assets. The convenience store retail business is the largest 7-Eleven licensee in the United States and operates approximately 300 convenience stores in central and west Texas and New Mexico. More information is available at www.delekus.com.
This press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements relate to, among other things, statements with respect to forecasts regarding capacity and timing for becoming operational for the opportunities discussed above. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "intend," "plan," "project," "potential," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the companies and are difficult to predict. Although management of Energy Transfer Partners, L.P., Magellan Midstream Partners, L.P., MPLX LP and Delek US Holdings, Inc. (the "companies") believe any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Among the key risk factors associated with the project that may have a direct impact on completion of the project and construction of the pipeline or the pipeline's and the companies' results of operations and financial condition are: (1) the ability of the companies to negotiate and enter into definitive agreements and to obtain all required rights-of-way, permits and other approvals on a timely basis; (2) the ability to complete construction of the project on time and at expected costs; (3) price fluctuations and overall demand for crude oil; (4) changes in the pipeline's tariff rates or other terms as required by state or federal regulatory authorities; (5) the occurrence of an operational hazard or unforeseen interruption; (6) disruption in the debt and equity markets that negatively impacts the companies' abilities to finance capital spending and (7) willingness to incur or failure of customers or vendors to meet or continue contractual obligations related to this project. Additional information about issues that could lead to material changes in performance is contained in filings with the Securities and Exchange Commission for all companies. The companies undertake no obligation to revise these forward-looking statements to reflect events or circumstances occurring after today's date.
SOURCE MPLX LP
DALLAS, Aug. 1, 2018 /PRNewswire/ -- Alerian reported index linked product positions of $15.0 billion as of June 30, 2018. Linked products include exchange-traded funds, exchange-traded notes, return of capital notes, variable insurance portfolios, and mutual funds.
Below is a full list of energy master limited partnership (MLP) positions, as of June 30, 2018, in products linked to the Alerian Index Series.
Ticker |
Exposure in |
Exposure in |
Ticker |
Exposure in |
Exposure in | |
AM |
305,257,484 |
10,340,701 |
HEP |
151,911,915 |
5,375,510 | |
AMGP |
1,164,270 |
61,732 |
MMP |
1,501,453,809 |
21,735,000 | |
ANDX |
446,822,576 |
10,506,056 |
MPLX |
1,162,174,520 |
34,041,433 | |
APU |
58,778,057 |
1,392,185 |
NBLX |
22,166,701 |
434,130 | |
ARLP |
25,591,033 |
1,394,607 |
NGL |
165,162,738 |
13,213,019 | |
BPL |
604,497,037 |
17,197,640 |
NS |
210,933,016 |
9,312,716 | |
BPMP |
20,189,424 |
961,859 |
NSH |
239,822 |
19,340 | |
BWP |
170,678,160 |
14,688,310 |
PAA |
1,177,071,579 |
49,791,522 | |
CEQP |
183,499,246 |
5,779,504 |
PAGP |
3,213,393 |
134,395 | |
CQP |
173,601,824 |
4,828,980 |
PSXP |
318,554,875 |
6,238,834 | |
CVRR |
20,028,626 |
896,135 |
RMP |
147,346,450 |
8,657,253 | |
DCP |
421,401,442 |
10,654,904 |
SEP |
341,382,494 |
9,638,128 | |
DM |
13,475,016 |
990,810 |
SHLX |
322,823,077 |
14,554,692 | |
EEP |
277,227,481 |
25,363,905 |
SMLP |
12,744,536 |
827,567 | |
ENBL |
176,973,526 |
10,343,280 |
SPH |
28,830,596 |
1,227,356 | |
ENLC |
853,859 |
51,906 |
SUN |
27,065,571 |
1,084,358 | |
ENLK |
303,905,691 |
19,568,943 |
TCP |
165,868,659 |
6,391,856 | |
EPD |
1,503,782,388 |
54,347,032 |
TEGP |
386,005,955 |
17,419,041 | |
EQGP |
355,540 |
15,123 |
TGP |
18,444,324 |
1,094,619 | |
EQM |
356,373,011 |
6,907,792 |
USAC |
16,751,289 |
995,323 | |
ETE |
6,023,303 |
349,177 |
VLP |
17,131,051 |
449,988 | |
ETP |
1,481,856,983 |
77,828,623 |
VNOM |
25,953,041 |
813,320 | |
GEL |
281,851,288 |
12,864,048 |
WES |
571,788,034 |
11,816,244 | |
GLOP |
14,609,467 |
612,556 |
WGP |
826,761 |
23,126 | |
GMLP |
15,169,006 |
981,178 |
WPZ |
1,218,967,796 |
30,031,234 | |
HCLP |
18,789,000 |
1,592,288 |
||||
About Alerian
Alerian equips investors to make informed decisions about energy infrastructure and Master Limited Partnerships (MLPs). Its benchmarks are widely used by industry executives, investment professionals, research analysts, and national media to analyze relative performance. As of June 30, 2018, over $15 billion is directly tied to the Alerian Index Series through exchange-traded funds and notes, separately managed accounts, and structured products. For more information, including index values and constituents, research content, and announcements regarding rebalancings, please visit alerian.com.
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SOURCE Alerian
FINDLAY, Ohio, July 25, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) today announced that the board of directors of its general partner has declared a cash distribution of $0.6275 per common unit for the second quarter of 2018. This represents an increase of $0.01 per unit, or 1.6 percent, over the first-quarter 2018 distribution, and an increase of $0.065 per unit, or 11.6 percent, over the second-quarter 2017 distribution. Since the partnership's initial public offering in October 2012, the MPLX board has authorized distribution increases for 22 consecutive quarters, representing a compound annual growth rate of 17.2 percent over the minimum quarterly distribution established at the partnership's formation. The distribution will be paid Aug. 14, 2018, to common unitholders of record as of Aug. 6, 2018.
On July 26, MPLX will provide an update on its 2018 second-quarter results through an earnings release, to be followed by a conference call scheduled for 11 a.m. EDT that day. Interested parties may listen to the conference call by dialing 1-888-606-5719 (confirmation number 6033306) or by visiting MPLX's website at http://www.mplx.com and clicking on the "2018 Second-Quarter Financial Results" link in the "News & Headlines" section.
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100 percent of MPLX's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MPLX's distributions to non-United States investors are subject to federal income tax withholding at the highest applicable effective tax rate.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; the transportation, storage and distribution of crude oil and refined petroleum products; and the refining logistics and fuels distributions services through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.
View original content:http://www.prnewswire.com/news-releases/mplx-lp-increases-quarterly-distribution-300686669.html
SOURCE MPLX LP
FINDLAY, Ohio, July 25, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) announced today the executive team that will lead the combined company upon the closing of the combination of MPC and Andeavor (NYSE: ANDV). The new team will include executives from both MPC and Andeavor, leading a premier U.S. refining, marketing and midstream company into the future.
As previously announced, Gary R. Heminger will continue to serve as MPC's Chairman and CEO. "This executive team represents unparalleled business acumen and a steadfast commitment to our core values," said Heminger. "Both MPC and Andeavor are successful companies with excellent track records, and these leaders will enable us to deliver on the full potential of this powerful combination."
The leadership team, consisting of seven executives from MPC and three from Andeavor, will include:
Gregory J. Goff, Executive Vice Chairman
Currently Chairman, President and CEO of Andeavor, Mr. Goff will have responsibility for MPC's information technology, commercial and business development, strategy and corporate affairs functions.
Donald C. Templin, President of Refining, Marketing and Supply
Currently President of MPC, Mr. Templin will have responsibility for MPC's refining, crude and feedstock supply, product distribution, marketing, environment and safety, and supply chain functions.
Anthony R. Kenney, President of Speedway LLC
Currently President of Speedway LLC, Mr. Kenney will have responsibility for all company-owned and -operated convenience stores.
Michael J. Hennigan, President of MPLX LP (NYSE: MPLX)
Mr. Hennigan currently serves as President of MPLX.
Timothy T. Griffith, Senior Vice President and Chief Financial Officer
Currently MPC Senior Vice President and Chief Financial Officer, Mr. Griffith will have responsibility for MPC's controller, audit, tax, treasurer, and budget and analysis functions.
Suzanne Gagle, General Counsel
Ms. Gagle currently serves as MPC General Counsel.
Fiona C. Laird, Chief Human Resources Officer
Ms. Laird currently serves as Andeavor's Chief Human Resources Officer.
David R. Sauber, Senior Vice President of Labor Relations, Operations, Health and Administrative Services
Mr. Sauber is currently Senior Vice President of Human Resources, Health and Administrative Services for MPC. In his new position, he will report to Fiona C. Laird, Chief Human Resources Officer.
Kristina A. Kazarian, Vice President of Investor Relations
Ms. Kazarian currently serves as MPC Vice President of Investor Relations.
Don J. Sorensen, President of Andeavor Logistics LP (NYSE: ANDX)
Mr. Sorensen currently serves as Senior Vice President of ANDX.
MPC expects to close the transaction in the second half of 2018, subject to regulatory and other customary closing conditions.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 22 states. MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.7 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
This communication contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation ("MPC"). These forward-looking statements relate to, among other things, the proposed transaction between MPC and Andeavor ("ANDV") and include expectations, estimates and projections concerning the business and operations, strategic initiatives and value creation plans of MPC. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 MPC's actual results to differ materially from those implied in the forward-looking statements include: the ability to complete the proposed transaction between MPC and ANDV on anticipated terms and timetable; the ability to obtain approval by the shareholders of ANDV and MPC related to the proposed transaction and the ability to satisfy various other conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain regulatory approvals of the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entity in connection with consummation of the proposed transaction; the risk that the cost savings and any other synergies from the proposed transaction may not be fully realized or may take longer to realize than expected; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDV; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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, 2017, and in the Form S-4 filed by MPC, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed transaction, MPC filed an amendment to the registration statement on Form S-4 with the SEC on July 20, 2018 that includes a preliminary proxy statement of MPC and ANDV. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PRELIMINARY JOINT PROXY STATEMENT/PROSPECTUS AND, WHEN AVAILABLE, THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final joint proxy statement/prospectus will be mailed to stockholders of MPC and ANDV. Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, from MPC at its website, www.marathonpetroleum.com, or by contacting MPC's Investor Relations at 419.421.2414, or from ANDV at its website, www.andeavor.com, or by contacting ANDV's Investor Relations at 210.626.4757.
Participants in Solicitation
MPC and ANDV and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information concerning MPC's participants is set forth in the proxy statement, filed March 15, 2018, for MPC's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Information concerning ANDV's participants is set forth in the proxy statement, filed March 15, 2018, for ANDV's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of such participants in the solicitation of proxies in respect of the proposed transaction will be included in the registration statement and joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
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SOURCE Marathon Petroleum Corp.
FINDLAY, Ohio, July 6, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call Thursday, July 26, 2018, at 11 a.m. EDT to discuss 2018 second-quarter financial results, which will be released earlier that day, and to provide an update on partnership operations.
MPLX participants will be Gary R. Heminger, chairman and chief executive officer; Michael J. Hennigan, president; Pamela K.M. Beall, executive vice president and chief financial officer; and other senior executives. The call will be hosted by Kristina A. Kazarian, vice president of Investor Relations.
Interested parties may listen to the conference call by dialing (888) 606-5719 (confirmation number 6033306) or by visiting MPLX's website at http://www.mplx.com and clicking on the "2018 Second-Quarter Financial Results" link in the "News & Headlines" section. Financial information, including the earnings release and other investor-related material, also will be available online. Replays of the conference call will be available on the partnership's website through Thursday, Aug. 9.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; the transportation, storage and distribution of crude oil and refined petroleum products; and the refining logistics and fuels distributions services through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.
View original content with multimedia:http://www.prnewswire.com/news-releases/mplx-lp-to-announce-2018-second-quarter-financial-results-july-26-300676809.html
SOURCE MPLX LP
FINDLAY, Ohio, July 6, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will host a conference call Thursday, July 26, 2018, at 9 a.m. EDT to discuss 2018 second-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Participants will be Gary R. Heminger, chairman and chief executive officer; Don Templin, president; Tim Griffith, senior vice president and chief financial officer; Michael J. Hennigan, president of the general partner of MPLX LP (NYSE: MPLX), the master limited partnership sponsored by MPC; and other senior executives. The call will be hosted by Kristina A. Kazarian, vice president of Investor Relations.
Interested parties may listen to the conference call by dialing (888) 989-4720 (confirmation number 4852094) or by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2018 Second-Quarter Financial Results" link. Financial information, including the earnings release and other investor-related material, also will be available online. Replays of the conference call will be available on the company's website through Thursday, Aug. 9.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
View original content with multimedia:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-announce-2018-second-quarter-financial-results-july-26-300676808.html
SOURCE Marathon Petroleum Corporation
DALLAS, June 22, 2018 /PRNewswire/ -- Swank Capital, LLC, and Cushing® Asset Management, LP, announce today the upcoming rebalancing of The Cushing® Energy Index (the "Index") as part of normal index operations. After the markets close on June 29, 2018, the constituents of the Index will be rebalanced, and the following changes will become effective on July 2, 2018:
Cushing® Energy Index constituents, effective July 2, 2018:
Company Name |
Ticker |
Index Weight |
Status |
The Williams Companies, Inc. |
WMB |
6.00% |
Existing |
Kinder Morgan, Inc. |
KMI |
5.83% |
Existing |
ONEOK, Inc. |
OKE |
5.78% |
Existing |
Helmerich & Payne, Inc. |
HP |
5.60% |
Existing |
Exxon Mobil Corporation |
XOM |
5.19% |
Existing |
Occidental Petroleum Corporation |
OXY |
4.71% |
Existing |
Chevron Corporation |
CVX |
4.56% |
Existing |
Schlumberger N.V. (Schlumberger Limited) |
SLB |
3.89% |
Existing |
Phillips 66 |
PSX |
3.56% |
Existing |
Valero Energy Corporation |
VLO |
3.52% |
Existing |
Marathon Petroleum Corporation |
MPC |
3.18% |
Existing |
Apache Corporation |
APA |
2.79% |
Existing |
Baker Hughes, A GE Company |
BHGE |
2.77% |
Existing |
HollyFrontier Corporation |
HFC |
2.25% |
NEW |
Andeavor |
ANDV |
2.19% |
Existing |
ConocoPhillips |
COP |
2.15% |
Existing |
TechnicFMC plc |
FTI |
2.12% |
Existing |
Hess Corporation |
HES |
2.04% |
Existing |
Halliburton Company |
HAL |
2.01% |
Existing |
Alliance Resource Partners, L.P. |
ARLP |
2.00% |
Existing |
EnLink Midstream Partners, LP |
ENLK |
2.00% |
Existing |
Dominion Energy Midstream Partners, LP |
DM |
2.00% |
Existing |
Andeavor Logistics LP |
ANDX |
2.00% |
Existing |
DCP Midstream, LP |
DCP |
2.00% |
Existing |
Western Gas Partners, L.P. |
WES |
2.00% |
Existing |
Crestwood Equity Partners LP |
CEQP |
2.00% |
Existing |
EQT Midstream Partners, LP |
EQM |
2.00% |
Existing |
Enable Midstream Partners, LP |
ENBL |
2.00% |
Existing |
Energy Transfer Equity, L.P. |
ETE |
2.00% |
Existing |
MPLX LP |
MPLX |
2.00% |
NEW |
Energy Transfer Partners, L.P. |
ETP |
2.00% |
Existing |
Anadarko Petroleum Corporation |
APC |
1.82% |
Existing |
Noble Energy, Inc. |
NBL |
1.57% |
Existing |
Cabot Oil & Gas Corporation |
COG |
1.26% |
Existing |
Marathon Oil Corporation |
MRO |
1.21% |
Existing |
Constituents removed, effective July 2, 2018:
Company Name |
Ticker |
Devon Energy Corporation |
DVN |
AmeriGas Partners, L.P. |
APU |
ABOUT THE CUSHING® ENERGY INDEX
The Cushing® Energy Index tracks the performance of widely held companies engaged in exploration and production, refining and marketing, and storage and transportation of oil, natural gas, coal and consumable fuels, as well as oil and natural gas equipment and services companies. Constituents of the Index are weighted based on current yield. The Index price level is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "CENI".
ABOUT SWANK CAPITAL AND CUSHING® ASSET MANAGEMENT
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts which invest primarily in securities of MLPs and other natural resource companies.
Cushing is also dedicated to serving the needs of investors by sponsoring a variety of benchmarks, including The Cushing® 30 MLP Index (Bloomberg Ticker: MLPX), The Cushing® 30 MLP Market Cap Index (Bloomberg Ticker: CMCI), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY), The Cushing® Energy Supply Chain Index (Bloomberg Ticker: CSCI), The Cushing® Transportation Index (Bloomberg Ticker: CTRI) and The Cushing® Utility Index (Bloomberg Ticker: CUTI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Judson Redmond
214-692-6334
www.cushingasset.com
The Cushing® Energy Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
CUSH-CENI
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SOURCE Cushing Asset Management, LP; Swank Capital, LLC
DALLAS, June 22, 2018 /PRNewswire/ -- Swank Capital, LLC, and Cushing® Asset Management, LP, announce today the upcoming rebalancing of The Cushing® Energy Supply Chain Index (the "Index") as part of normal index operations. After the markets close on June 29, 2018, the constituents of the Index will be rebalanced, and the following changes will become effective on July 2, 2018:
Cushing® Energy Supply Chain Index constituents, effective July 2, 2018:
Company Name |
Ticker |
Index Weight |
Status |
The Williams Companies, Inc. |
WMB |
3.38% |
Existing |
LyondellBasell Industries N.V. |
LYB |
3.37% |
Existing |
International Paper Company |
IP |
3.25% |
Existing |
Kinder Morgan, Inc. |
KMI |
3.15% |
Existing |
ONEOK, Inc. |
OKE |
3.12% |
Existing |
Helmerich & Payne, Inc. |
HP |
3.02% |
Existing |
Exxon Mobil Corporation |
XOM |
2.80% |
Existing |
WestRock Company |
WRK |
2.73% |
Existing |
Air Products and Chemicals, Inc. |
APD |
2.59% |
Existing |
Occidental Petroleum Corporation |
OXY |
2.54% |
Existing |
Packaging Corporation of America |
PKG |
2.51% |
Existing |
CF Industries Holdings, Inc. |
CF |
2.49% |
Existing |
Chevron Corporation |
CVX |
2.46% |
Existing |
Nucor Corporation |
NUE |
2.14% |
Existing |
DowDuPont Inc. |
DWDP |
2.14% |
Existing |
Schlumberger N.V. (Schlumberger Limited) |
SLB |
2.10% |
Existing |
International Flavors & Fragrances Inc. |
IFF |
2.04% |
Existing |
Eastman Chemical Company |
EMN |
2.01% |
Existing |
Alliance Resource Partners, L.P. |
ARLP |
2.00% |
Existing |
EnLink Midstream Partners, LP |
ENLK |
2.00% |
Existing |
Dominion Energy Midstream Partners, LP |
DM |
2.00% |
Existing |
Andeavor Logistics LP |
ANDX |
2.00% |
Existing |
DCP Midstream, LP |
DCP |
2.00% |
Existing |
Western Gas Partners, L.P. |
WES |
2.00% |
Existing |
Crestwood Equity Partners LP |
CEQP |
2.00% |
Existing |
EQT Midstream Partners, LP |
EQM |
2.00% |
Existing |
Enable Midstream Partners, LP |
ENBL |
2.00% |
Existing |
Energy Transfer Equity, L.P. |
ETE |
2.00% |
Existing |
MPLX LP |
MPLX |
2.00% |
NEW |
Energy Transfer Partners, L.P. |
ETP |
2.00% |
Existing |
Praxair, Inc. |
PX |
1.97% |
Existing |
Phillips 66 |
PSX |
1.92% |
Existing |
Valero Energy Corporation |
VLO |
1.90% |
Existing |
Avery Dennison Corporation |
AVY |
1.90% |
Existing |
Marathon Petroleum Corporation |
MPC |
1.71% |
Existing |
PPG Industries, Inc. |
PPG |
1.58% |
Existing |
Apache Corporation |
APA |
1.51% |
Existing |
Baker Hughes, A GE Company |
BHGE |
1.50% |
Existing |
Newmont Mining Corporation |
NEM |
1.37% |
Existing |
Albemarle Corporation |
ALB |
1.35% |
Existing |
Sealed Air Corporation |
SEE |
1.33% |
Existing |
HollyFrontier Corporation |
HFC |
1.22% |
NEW |
Andeavor |
ANDV |
1.18% |
Existing |
ConocoPhillips |
COP |
1.16% |
Existing |
TechnicFMC plc |
FTI |
1.15% |
Existing |
Freeport-McMoRan Inc. |
FCX |
1.14% |
Existing |
Hess Corporation |
HES |
1.10% |
Existing |
Halliburton Company |
HAL |
1.08% |
Existing |
Ecolab Inc. |
ECL |
1.06% |
Existing |
Ball Corporation |
BLL |
1.03% |
Existing |
Constituents removed, effective July 2, 2018:
Company Name |
Ticker |
Anadarko Petroleum Corporation |
APC |
AmeriGas Partners, L.P. |
APU |
ABOUT THE CUSHING® ENERGY SUPPLY CHAIN INDEX
The Cushing® Energy Supply Chain Index tracks the performance of widely held companies engaged in exploration and production, refining and marketing, or storage and transportation of oil, natural gas, coal and consumable fuels; oil and natural gas equipment and services companies; and companies that extract and/or manufacture materials. Constituents of the Index are weighted based on current yield. The Index price level is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "CSCI".
ABOUT SWANK CAPITAL AND CUSHING® ASSET MANAGEMENT
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts which invest primarily in securities of MLPs and other natural resource companies.
Cushing is also dedicated to serving the needs of investors by sponsoring a variety of benchmarks, including The Cushing® 30 MLP Index (Bloomberg Ticker: MLPX), The Cushing® 30 MLP Market Cap Index (Bloomberg Ticker: CMCI), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY), The Cushing® Energy Index (Bloomberg Ticker: CENI), The Cushing® Transportation Index (Bloomberg Ticker: CTRI) and The Cushing® Utility Index (Bloomberg Ticker: CUTI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Judson Redmond
214-692-6334
www.cushingasset.com
The Cushing® Energy Supply Chain Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
CUSH-CSCI
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SOURCE Cushing Asset Management, LP; Swank Capital, LLC
DALLAS, June 22, 2018 /PRNewswire/ -- Swank Capital, LLC, and Cushing® Asset Management, LP, announce today the upcoming rebalancing of The Cushing® Utility Index (the "Index") as part of normal index operations. After the markets close on June 29, 2018, the constituents of the Index will be rebalanced, and the following changes will become effective on July 2, 2018:
Cushing® Utility Index constituents, effective July 2, 2018:
Company Name |
Ticker |
Index Weight |
Status |
SCANA Corporation |
SCG |
4.78% |
Existing |
PPL Corporation |
PPL |
4.38% |
Existing |
The Southern Company |
SO |
3.89% |
Existing |
Dominion Energy, Inc. |
D |
3.67% |
Existing |
Duke Energy Corporation |
DUK |
3.41% |
Existing |
Entergy Corporation |
ETR |
3.24% |
Existing |
CenterPoint Energy, Inc. |
CNP |
3.08% |
Existing |
FirstEnergy Corp. |
FE |
3.01% |
Existing |
The AES Corporation |
AES |
2.93% |
Existing |
Edison International |
EIX |
2.92% |
Existing |
Consolidated Edison, Inc. |
ED |
2.78% |
Existing |
American Electric Power Company, Inc. |
AEP |
2.70% |
Existing |
Eversource Energy |
ES |
2.64% |
Existing |
Pinnacle West Capital Corporation |
PNW |
2.62% |
Existing |
WEC Energy Group, Inc. |
WEC |
2.61% |
Existing |
DTE Energy Company |
DTE |
2.59% |
Existing |
Xcel Energy Inc. |
XEL |
2.53% |
Existing |
Public Service Enterprise Group Inc. |
PEG |
2.47% |
Existing |
Exelon Corporation |
EXC |
2.41% |
Existing |
Alliant Energy Corporation |
LNT |
2.38% |
Existing |
Sempra Energy |
SRE |
2.32% |
Existing |
CMS Energy Corporation |
CMS |
2.31% |
Existing |
NiSource Inc. |
NI |
2.30% |
Existing |
Ameren Corporation |
AEE |
2.29% |
Existing |
Evergy, Inc. |
EVRG |
2.15% |
NEW |
Alliance Resource Partners, L.P. |
ARLP |
2.00% |
Existing |
EnLink Midstream Partners, LP |
ENLK |
2.00% |
Existing |
Dominion Energy Midstream Partners, LP |
DM |
2.00% |
Existing |
Andeavor Logistics LP |
ANDX |
2.00% |
Existing |
DCP Midstream, LP |
DCP |
2.00% |
Existing |
Western Gas Partners, L.P. |
WES |
2.00% |
Existing |
Crestwood Equity Partners LP |
CEQP |
2.00% |
Existing |
EQT Midstream Partners, LP |
EQM |
2.00% |
Existing |
Enable Midstream Partners, LP |
ENBL |
2.00% |
Existing |
Energy Transfer Equity, L.P. |
ETE |
2.00% |
Existing |
MPLX LP |
MPLX |
2.00% |
NEW |
Energy Transfer Partners, L.P. |
ETP |
2.00% |
Existing |
NextEra Energy, Inc. |
NEE |
1.99% |
Existing |
American Water Works Company, Inc. |
AWK |
1.60% |
Existing |
Constituents removed, effective July 2, 2018:
Company Name |
Ticker |
AmeriGas Partners, L.P. |
APU |
ABOUT THE CUSHING® UTILITY INDEX
The Cushing® Utility Index tracks the performance of widely held companies engaged in electric, gas and water utility services as well as master limited partnerships (MLPs) engaged in storage and transportation of oil, natural gas, coal and consumable fuels. Constituents of the Index are weighted based on current yield. The Index price level is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "CUTI".
ABOUT SWANK CAPITAL AND CUSHING® ASSET MANAGEMENT
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts which invest primarily in securities of MLPs and other natural resource companies.
Cushing is also dedicated to serving the needs of investors by sponsoring a variety of benchmarks, including The Cushing® 30 MLP Index (Bloomberg Ticker: MLPX), The Cushing® 30 MLP Market Cap Index (Bloomberg Ticker: CMCI), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY), The Cushing® Energy Index (Bloomberg Ticker: CENI), The Cushing® Energy Supply Chain Index (Bloomberg Ticker: CSCI) and The Cushing® Transportation Index (Bloomberg Ticker: CTRI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Judson Redmond
214-692-6334
www.cushingasset.com
The Cushing® Utility Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
CUSH-CUTI
View original content:http://www.prnewswire.com/news-releases/swank-capital-and-cushing-asset-management-announce-rebalancing-of-the-cushing-utility-index-300670618.html
SOURCE Cushing Asset Management, LP; Swank Capital, LLC
DALLAS, June 8, 2018 /PRNewswire/ -- Swank Capital, LLC and Cushing® Asset Management, LP, announce today an upcoming interim rebalancing of The Cushing® Energy Index (the "Index"). Per the Index's methodology guide, the removal of an Index constituent from a Sub-Index without a named direct replacement necessitates the rebalancing of the Index. The Cushing® 30 MLP Index (the "Sub-Index") announced today that Index constituents Spectra Energy Partners, LP (NYSE: SEP) and Tallgrass Energy GP, LP (NYSE: TEGP) will be removed from the Sub-Index after the markets close on June 15, 2018, and effective on June 18, 2018. Replacements named for the removed constituents are not direct replacements. After the markets close on June 15, 2018, the constituents of the Index will be rebalanced, and the changes in the table below will become effective on June 18, 2018.
Cushing® Energy Index constituents, effective June 18, 2018:
Company Name |
Ticker |
Index Weight |
Status |
The Williams Companies, Inc. |
WMB |
6.00% |
Existing |
Kinder Morgan, Inc. |
KMI |
6.00% |
Existing |
ONEOK, Inc. |
OKE |
6.00% |
Existing |
Helmerich & Payne, Inc. |
HP |
5.78% |
Existing |
Exxon Mobil Corporation |
XOM |
5.22% |
Existing |
Chevron Corporation |
CVX |
4.74% |
Existing |
Occidental Petroleum Corporation |
OXY |
4.65% |
Existing |
Schlumberger N.V. (Schlumberger Limited) |
SLB |
3.79% |
Existing |
Phillips 66 |
PSX |
3.58% |
Existing |
Valero Energy Corporation |
VLO |
3.45% |
Existing |
Apache Corporation |
APA |
3.30% |
Existing |
Marathon Petroleum Corporation |
MPC |
3.05% |
Existing |
Baker Hughes, A GE Company |
BHGE |
2.72% |
Existing |
ConocoPhillips |
COP |
2.19% |
Existing |
Andeavor |
ANDV |
2.14% |
Existing |
TechnicFMC plc |
FTI |
2.13% |
Existing |
Hess Corporation |
HES |
2.12% |
Existing |
Dominion Energy Midstream Partners, LP |
DM |
2.00% |
NEW |
Alliance Resource Partners, L.P. |
ARLP |
2.00% |
Existing |
Andeavor Logistics LP |
ANDX |
2.00% |
Existing |
Tallgrass Energy Partners, LP |
TEP |
2.00% |
Existing |
EnLink Midstream Partners, LP |
ENLK |
2.00% |
Existing |
DCP Midstream, LP |
DCP |
2.00% |
Existing |
Enable Midstream Partners, LP |
ENBL |
2.00% |
NEW |
EQT Midstream Partners, LP |
EQM |
2.00% |
NEW |
Western Gas Partners, L.P. |
WES |
2.00% |
Existing |
Crestwood Equity Partners LP |
CEQP |
2.00% |
NEW |
Energy Transfer Equity, L.P. |
ETE |
2.00% |
Existing |
Energy Transfer Partners, L.P. |
ETP |
2.00% |
NEW |
Halliburton Company |
HAL |
1.95% |
Existing |
Anadarko Petroleum Corporation |
APC |
1.88% |
Existing |
Noble Energy, Inc. |
NBL |
1.67% |
Existing |
Cabot Oil & Gas Corporation |
COG |
1.37% |
Existing |
Marathon Oil Corporation |
MRO |
1.26% |
Existing |
Devon Energy Corporation |
DVN |
1.01% |
Existing |
Constituents removed, effective June 18, 2018:
Company Name |
Ticker |
MPLX LP |
MPLX |
Spectra Energy Partners, LP |
SEP |
Sunoco LP |
SUN |
Tallgrass Energy GP, LP |
TEGP |
Williams Partners L.P. |
WPZ |
ABOUT THE CUSHING® ENERGY INDEX
The Cushing® Energy Index tracks the performance of widely held companies engaged in exploration and production, refining and marketing, and storage and transportation of oil, natural gas, coal and consumable fuels, as well as oil and natural gas equipment and services companies. Constituents of the Index are weighted based on current yield. The Index price level is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "CENI".
ABOUT SWANK CAPITAL AND CUSHING® ASSET MANAGEMENT
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts which invest primarily in securities of MLPs and other natural resource companies.
Cushing is also dedicated to serving the needs of investors by sponsoring a variety of benchmarks, including The Cushing® 30 MLP Index (Bloomberg Ticker: MLPX), The Cushing® 30 MLP Market Cap Index (Bloomberg Ticker: CMCI), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY), The Cushing® Energy Supply Chain Index (Bloomberg Ticker: CSCI), The Cushing® Transportation Index (Bloomberg Ticker: CTRI) and The Cushing® Utility Index (Bloomberg Ticker: CUTI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Judson Redmond
214-692-6334
www.cushingasset.com
The Cushing® Energy Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Swank Capital, LLC, and Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
CUSH-CENI
View original content:http://www.prnewswire.com/news-releases/swank-capital-and-cushing-asset-management-announce-rebalancing-of-the-cushing-energy-index-300662241.html
SOURCE Cushing Asset Management, LP; Swank Capital, LLC
FINDLAY, Ohio, April 30, 2018 /PRNewswire/ --
MPLX LP (NYSE: MPLX) today reported record first-quarter 2018 net income attributable to MPLX of $421 million compared with $150 million in the first quarter of 2017.
MPLX also reported record adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $760 million and record income from operations of $557 million. Results were driven by strong contributions from the underlying base business as well as the Feb. 1 dropdown of refining logistics assets and fuels distribution services from sponsor Marathon Petroleum Corp. (NYSE: MPC).
The partnership ended the quarter with strong distribution coverage of 1.29 times and affirmed its 2018 distribution growth guidance of 10 percent. Debt-to-pro forma adjusted EBITDA was 3.8 times for the quarter. Consistent with its strategy to maximize unitholder returns and execute a self-funding model, the partnership did not issue public equity during the first quarter.
"Our record financial results reflect MPLX's significant transformation into one of the largest diversified master limited partnerships in the energy sector," said Gary R. Heminger, chairman and chief executive officer. "The dropdowns of the past year have nearly doubled the partnership's earnings base, and the elimination of incentive distribution rights improves the partnership's cost of capital. Combined with our existing business and planned organic growth, the partnership is extraordinarily well-positioned to deliver long-term sustainable distribution growth for our investors."
Gathering and Processing (G&P) reported segment operating income of $350 million for the quarter and segment adjusted EBITDA of $323 million, up $41 million and $42 million on a year-over-year basis, respectively. The G&P segment continues to build upon its strong footprint in the Marcellus, Utica, Permian and STACK shale plays. In the Northeast, the partnership added capacity to support producer needs. The Sherwood 9, 200-million-cubic-feet-per-day gas processing plant was commissioned during the quarter and is expected to ramp up in the second quarter. The partnership also added 200 million cubic feet per day of processing capacity at its highly utilized Houston, Pennsylvania, complex to support increased demand. MPLX expects to further strengthen its position as the largest processor and fractionator in the Northeast by adding approximately 800 million cubic feet per day of incremental processing capacity and 100,000 barrels per day of additional fractionation capacity during the second half of 2018, expanding its earnings base.
Continuing to expand on its Permian growth strategy, MPLX commissioned operations of the 200-million-cubic-feet-per-day Argo plant, doubling the partnership's gas processing capacity in the Permian basin. Construction of the 75-million-cubic-feet-per-day Omega gas processing plant in the STACK shale play in Oklahoma is on schedule and expected to be completed by mid-2018. These new facilities provide an important addition to the partnership's expanding footprint in these regions.
Logistics and Storage (L&S) reported segment operating income of $424 million for the quarter and segment adjusted EBITDA of $437 million, up $268 million and $295 million on a year-over-year basis, respectively. During the quarter, the L&S segment significantly expanded its earnings base with the Feb. 1 acquisition of refining logistics assets and fuels distribution services from MPC. These assets and services are projected to generate annual EBITDA of $1 billion, providing additional high-quality fee-based revenue streams to the partnership.
MPLX also continued to execute its organic growth plan for the L&S segment. The partnership commenced operations of the Robinson butane cavern in late March and expanded its marine fleet by two boats and 13 barges, with further growth planned later this year. The expansions of the Ozark and Wood River-to-Patoka pipeline systems, which deliver Cushing, Oklahoma-sourced crude to Patoka, Illinois, continue to be targeted for completion by mid-2018. These projects are expected to create additional fee-based revenue for the partnership while providing logistics solutions and crude optionality to MPC and other market participants.
"We are enthusiastic about the future for MPLX and the value proposition for our unitholders," Heminger said. "The partnership is extraordinarily well-positioned with strong and growing operations in the most prolific and economic shale plays in the country and a diversified suite of logistics assets. With a strong balance sheet and an investment-grade credit profile, we believe MPLX is one of the most compelling investments in the midstream space."
Financial Highlights
Three Months Ended | |||||||
(In millions, except per unit and ratio data) |
2018 |
2017 |
|||||
Net income attributable to MPLX |
$ |
421 |
$ |
150 |
|||
Adjusted EBITDA attributable to MPLX(a) |
760 |
423 |
|||||
Net cash provided by operating activities |
450 |
377 |
|||||
Distributable cash flow ("DCF")(a) |
619 |
354 |
|||||
Distribution per common unit(b) |
0.6175 |
0.5400 |
|||||
Distribution coverage ratio(c) |
1.29x |
1.29x |
|||||
Growth capital expenditures(d) |
470 |
358 |
|||||
(a) |
Non-GAAP measure calculated before the distribution to preferred units. See reconciliation below. |
(b) |
Distributions declared by the board of directors of MPLX's general partner. |
(c) |
Non-GAAP measure. See calculation below. |
(d) |
Excludes non-affiliated joint-venture (JV) members' share of capital expenditures. See capital expenditures table below. |
Operational Highlights
Financial Position and Liquidity
As of March 31, MPLX had $2 million in cash, approximately $2.2 billion available through its bank revolving credit facility expiring in July 2022, and $500 million available through its credit facility with MPC. In February, the partnership issued $5.5 billion in unsecured senior notes with a weighted average coupon of approximately 4.4 percent. MPLX used a significant portion of the net proceeds from this offering to repay the $4.1 billion term loan made on Feb. 1 associated with the dropdown transactions. The remaining proceeds were used to repay the outstanding borrowings on the bank revolving credit facility and the credit facility with MPC, as well as for general partnership purposes. The partnership has since increased availability through its credit facility with MPC to $1 billion. The increased borrowing capacity provides additional financing flexibility to MPLX.
The partnership's $2.7 billion of available liquidity at the end of the first quarter and its access to the capital markets should provide it with sufficient flexibility to meet its day-to-day operational needs and continue investing in organic growth opportunities. The partnership's debt-to-pro forma adjusted EBITDA ratio was 3.8 times at March 31, 2018. MPLX remains committed to maintaining an investment-grade credit profile.
Segment Results
(In millions) |
Three Months Ended | ||||||
Segment operating income attributable to MPLX LP (unaudited) |
2018 |
2017 |
|||||
Logistics and Storage(a) |
$ |
424 |
$ |
156 |
|||
Gathering and Processing(a) |
350 |
309 |
|||||
Segment adjusted EBITDA attributable to MPLX LP (unaudited) |
|||||||
Logistics and Storage(b) |
437 |
142 |
|||||
Gathering and Processing(b) |
323 |
281 |
|||||
(a) |
See reconciliation below for details. |
(b) |
Non-GAAP measure. See reconciliation below for details. |
L&S segment operating income and segment adjusted EBITDA increased for the first quarter of 2018 compared with the same period in 2017. The increase was primarily due to the acquisition of the MPLX Terminals, Hardin Street Transportation, Woodhaven Cavern and Ozark Pipeline businesses on March 1, 2017 (which have a full quarter of results in 2018) as well as the acquisition of the refining logistics assets and fuels distribution services on Feb. 1, 2018.
G&P segment operating income and segment adjusted EBITDA increased for the first quarter of 2018 compared with the same period in 2017. The increase was primarily due to increased gathered, processed and fractionated volumes.
See reconciliations below for detail on items not allocable to, or controllable by, any individual segment, which are therefore excluded when evaluating segment performance.
Conference Call
At 11 a.m. EDT today, MPLX will hold a conference call and webcast to discuss the reported results and provide an update on operations. Interested parties may listen to the conference call by dialing 1-888-606-5719 (confirmation number 6033306) or by visiting MPLX's website at http://www.mplx.com and clicking on the "2018 First-Quarter Financial Results" link in the "News & Headlines" section. Replays of the conference call will be available on MPLX's website through Tuesday, May 15. Investor-related material will also be available online prior to the conference call and webcast at http://ir.mplx.com.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; the transportation, storage and distribution of crude oil and refined petroleum products; and the refining logistics and fuels distributions services through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.
Non-GAAP references
In addition to our financial information presented in accordance with U.S. generally accepted accounting principles (GAAP), management utilizes additional non-GAAP measures to facilitate comparisons of past performance and future periods. This press release and supporting schedules include the non-GAAP measures adjusted EBITDA (including segment adjusted EBITDA), distributable cash flow (DCF) and distribution coverage ratio. The amount of adjusted EBITDA and DCF generated is considered by the board of directors of our general partner in approving the Partnership's cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) (benefit) provision for income taxes; (iii) amortization of deferred financing costs; (iv) non-cash equity-based compensation; (v) impairment expense; (vi) net interest and other financial costs; (vii) (income) loss from equity method investments; (viii) distributions from unconsolidated subsidiaries; (ix) distributions of cash received from equity method investments to MPC; (x) unrealized derivative losses; (xi) other adjustments to equity method investment distributions; and (xii) acquisition costs. In general, we define DCF as adjusted EBITDA adjusted for (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items.
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record the realized gain or loss of the contract.
Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures.
DCF is a financial performance measure used by management as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders.
Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between the partnership's financial operating performance and cash distribution capability. We define the distribution coverage ratio as the ratio of DCF attributable to GP and LP unitholders to total GP and LP distribution declared.
Forward-looking statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP ("MPLX") and Marathon Petroleum Corporation ("MPC"). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPLX and MPC, including strategic initiatives and our value creation plans. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the companies' control and are difficult to predict. Factors that could cause MPLX's actual results to differ materially from those implied in the forward-looking statements include: negative capital market conditions, including an increase of the current yield on common units, adversely affecting MPLX's ability to meet its distribution growth guidance; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein and other proposed transactions; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of MPLX's capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt on commercially reasonable terms, and the ability to successfully execute its business plans and growth strategy; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of MPC's obligations under MPLX's commercial agreements; modifications to earnings and distribution growth objectives; our ability to manage disruptions in credit markets or changes to our credit rating; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; changes to MPLX's capital budget; other risk factors inherent to MPLX's industry; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2017, filed with the Securities and Exchange Commission ("SEC"). Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: risks associated with the proposed transaction between MPC and Andeavor, including, but not limited to, our ability to complete the proposed transaction on anticipated terms and timetable, the ability to obtain stockholder and government approval, the ability to satisfy various other conditions to the closing of the proposed transaction, the risk that the cost savings and any other synergies from the proposed transaction may not be fully realized or may take longer to realize than expected, disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers, and risks relating to any unforeseen liabilities of Andeavor; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein; our ability to manage disruptions in credit markets or changes to our credit rating; adverse changes in laws including with respect to tax and regulatory matters; changes to the expected construction costs and timing of projects; continued/further volatility in and/or degradation of market and industry conditions; the availability and pricing of crude oil and other feedstocks; slower growth in domestic and Canadian crude supply; the effects of the lifting of the U.S. crude oil export ban; completion of pipeline capacity to areas outside the U.S. Midwest; consumer demand for refined products; transportation logistics; the reliability of processing units and other equipment; MPC's ability to successfully implement growth opportunities; the impact of adverse market conditions affecting MPC's midstream business; modifications to MPLX earnings and distribution growth objectives, and other risks described above with respect to MPLX; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or enforcement actions initiated thereunder; adverse results in litigation; changes to MPC's capital budget; other risk factors inherent to MPC's industry; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2017, filed with the SEC. In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here, in MPLX's Form 10-K or in MPC's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of MPC's Form 10-K are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office.
Condensed Results of Operations (unaudited) |
Three Months Ended | ||||||
(In millions, except per unit data) |
2018 |
2017 |
|||||
Revenues and other income: |
|||||||
Operating revenue |
$ |
712 |
$ |
532 |
|||
Operating revenue - related parties |
620 |
324 |
|||||
Income from equity method investments |
61 |
5 |
|||||
Other income |
27 |
25 |
|||||
Total revenues and other income |
1,420 |
886 |
|||||
Costs and expenses: |
|||||||
Operating expenses |
422 |
256 |
|||||
Operating expenses - related parties |
178 |
107 |
|||||
Depreciation and amortization |
176 |
187 |
|||||
General and administrative expenses |
69 |
58 |
|||||
Other taxes |
18 |
13 |
|||||
Total costs and expenses |
863 |
621 |
|||||
Income from operations |
557 |
265 |
|||||
Interest and other financial costs |
130 |
78 |
|||||
Income before income taxes |
427 |
187 |
|||||
Provision for income taxes |
4 |
— |
|||||
Net income |
423 |
187 |
|||||
Less: Net income attributable to noncontrolling interests |
2 |
1 |
|||||
Less: Net income attributable to Predecessor(a) |
— |
36 |
|||||
Net income attributable to MPLX LP |
421 |
150 |
|||||
Less: Preferred unit distributions |
16 |
16 |
|||||
Less: General partner's interest in net income attributable to MPLX LP |
— |
62 |
|||||
Limited partners' interest in net income attributable to MPLX LP |
$ |
405 |
$ |
72 |
|||
Per Unit Data |
|||||||
Net income (loss) attributable to MPLX LP per limited partner unit: |
|||||||
Common - basic |
$ |
0.61 |
$ |
0.20 |
|||
Common - diluted |
0.61 |
0.19 |
|||||
Weighted average limited partner units outstanding: |
|||||||
Common units – basic |
661 |
362 |
|||||
Common units – diluted |
661 |
367 |
|||||
(a) |
The pipeline, storage and terminals businesses acquired on March 1, 2017 ("Predecessor"). |
Select Financial Statistics (unaudited) |
|||||||
Three Months Ended | |||||||
(In millions, except ratio data) |
2018 |
2017 |
|||||
Distribution declared: |
|||||||
Common units (LP) - public |
$ |
179 |
$ |
149 |
|||
Common units - MPC(a) |
288 |
49 |
|||||
GP units - MPC |
— |
5 |
|||||
Incentive distribution rights - MPC |
— |
60 |
|||||
Total GP and LP distribution declared |
467 |
263 |
|||||
Redeemable preferred units(b) |
16 |
16 |
|||||
Total distribution declared |
$ |
483 |
$ |
279 |
|||
Distribution coverage ratio(c) |
1.29x |
1.29x | |||||
Cash Flow Data |
|||||||
Net cash flow provided by (used in): |
|||||||
Operating activities |
$ |
450 |
$ |
377 |
|||
Investing activities |
(490) |
(955) |
|||||
Financing activities |
37 |
607 |
|||||
Other Financial Data |
|||||||
Adjusted EBITDA attributable to MPLX LP(d) |
$ |
760 |
$ |
423 |
|||
DCF attributable to GP and LP unitholders(d) |
603 |
338 |
|||||
(a) |
MPC agreed to waive $23.7 million in common unit distributions associated with the units received in connection with the Feb. 1 dropdown. |
(b) |
The preferred units are considered redeemable securities due to the existence of redemption provisions upon a deemed liquidation event, which is outside our control. |
(c) |
DCF attributable to GP and LP unitholders divided by total GP and LP distribution declared. |
(d) |
Non-GAAP measure. See reconciliation below. |
Select Balance Sheet Data (unaudited) |
|||||||
(In millions, except ratio data) |
March 31 |
Dec. 31, |
|||||
Cash and cash equivalents |
$ |
2 |
$ |
5 |
|||
Total assets |
21,006 |
19,500 |
|||||
Total debt(a) |
11,862 |
7,332 |
|||||
Redeemable preferred units |
1,000 |
1,000 |
|||||
Total equity |
6,978 |
9,973 |
|||||
Consolidated total debt to LTM pro forma adjusted EBITDA(b) |
3.8x |
3.6x |
|||||
Partnership units outstanding: |
|||||||
GP units |
— |
8 |
|||||
MPC-held common units |
505 |
118 |
|||||
Public common units |
289 |
289 |
|||||
(a) |
Total debt includes $0 million and $386 million of outstanding intercompany borrowings classified in current liabilities as of March 31, 2018, and Dec. 31, 2017, respectively. |
(b) |
Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. Face value total debt includes approximately $495 million and $416 million of unamortized discount and debt issuance costs as of March 31, 2018, and Dec. 31, 2017, respectively. |
Operating Statistics (unaudited) |
|||||||||||
Three Months Ended | |||||||||||
2018 |
2017 |
% | |||||||||
Logistics and Storage |
|||||||||||
Pipeline throughput (thousands of barrels per day) |
|||||||||||
Crude oil pipelines |
2,006 |
1,624 |
24 |
% | |||||||
Product pipelines |
1,056 |
951 |
11 |
% | |||||||
Total pipelines |
3,062 |
2,575 |
19 |
% | |||||||
Average tariff rates ($ per barrel) |
|||||||||||
Crude oil pipelines |
$ |
0.56 |
$ |
0.59 |
(5) |
% | |||||
Product pipelines |
0.76 |
0.76 |
0 |
% | |||||||
Total pipelines |
0.63 |
0.65 |
(3) |
% | |||||||
Terminal throughput (thousands of barrels per day) |
1,445 |
1,424 |
1 |
% | |||||||
Barges at period-end |
244 |
231 |
6 |
% | |||||||
Towboats at period-end |
20 |
18 |
11 |
% | |||||||
Gathering and Processing |
|||||||||||
Gathering throughput (mmcf/d)(a) |
|||||||||||
Marcellus Operations |
1,123 |
926 |
21 |
% | |||||||
Utica Operations |
1,570 |
914 |
72 |
% | |||||||
Southwest Operations |
1,478 |
1,344 |
10 |
% | |||||||
Total gathering throughput |
4,171 |
3,184 |
31 |
% | |||||||
Natural gas processed (mmcf/d)(a) |
|||||||||||
Marcellus Operations |
4,114 |
3,532 |
16 |
% | |||||||
Utica Operations |
936 |
1,068 |
(12) |
% | |||||||
Southwest Operations |
1,326 |
1,267 |
5 |
% | |||||||
Southern Appalachian Operations |
253 |
265 |
(5) |
% | |||||||
Total natural gas processed |
6,629 |
6,132 |
8 |
% | |||||||
C2 + NGLs fractionated (mbpd)(a) |
|||||||||||
Marcellus Operations |
352 |
291 |
21 |
% | |||||||
Utica Operations |
43 |
43 |
— |
% | |||||||
Southwest Operations |
16 |
19 |
(16) |
% | |||||||
Southern Appalachian Operations |
12 |
14 |
(14) |
% | |||||||
Total C2 + NGLs fractionated |
423 |
367 |
15 |
% | |||||||
(a) |
Includes amounts related to unconsolidated equity method investments on a 100 percent basis. |
Reconciliation of Segment Operating Income Attributable to MPLX LP to |
|||||||
Three Months Ended | |||||||
(In millions) |
2018 |
2017 |
|||||
L&S segment operating income attributable to MPLX LP |
$ |
424 |
$ |
156 |
|||
G&P segment operating income attributable to MPLX LP(a) |
350 |
309 |
|||||
Segment portion attributable to equity affiliates |
(53) |
(40) |
|||||
Segment portion attributable to Predecessor(b) |
— |
53 |
|||||
Income from equity method investments |
61 |
5 |
|||||
Other income - related parties |
13 |
11 |
|||||
Unrealized derivative gains(c) |
7 |
16 |
|||||
Depreciation and amortization |
(176) |
(187) |
|||||
General and administrative expenses |
(69) |
(58) |
|||||
Income from operations |
$ |
557 |
$ |
265 |
|||
(a) |
All Partnership-operated, non-wholly owned subsidiaries are treated as if they are consolidated. |
(b) |
The operating income of the Predecessor is excluded from segment operating income attributable to MPLX LP prior to the acquisition date. |
(c) |
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
Reconciliation of Segment Adjusted EBITDA to Net Income (unaudited) |
|||||||
Three Months Ended | |||||||
(In millions) |
2018 |
2017 |
|||||
L&S segment adjusted EBITDA attributable to MPLX LP |
$ |
437 |
$ |
142 |
|||
G&P segment adjusted EBITDA attributable to MPLX LP |
323 |
281 |
|||||
Adjusted EBITDA attributable to MPLX LP |
760 |
423 |
|||||
Depreciation and amortization |
(176) |
(187) |
|||||
Provision for income taxes |
(4) |
— |
|||||
Amortization of deferred financing costs |
(16) |
(12) |
|||||
Non-cash equity-based compensation |
(4) |
(3) |
|||||
Net interest and other financial costs |
(114) |
(66) |
|||||
Income from equity method investments |
61 |
5 |
|||||
Distributions from unconsolidated subsidiaries |
(68) |
(33) |
|||||
Other adjustments to equity method investment distributions |
(22) |
— |
|||||
Unrealized derivative (losses) gains(a) |
7 |
16 |
|||||
Acquisition costs |
(3) |
(4) |
|||||
Noncontrolling interest |
2 |
1 |
|||||
Adjusted EBITDA attributable to Predecessor(b) |
— |
47 |
|||||
Net income (loss) |
$ |
423 |
$ |
187 |
|||
(a) |
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
(b) |
The adjusted EBITDA adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP prior to the acquisition date. |
Reconciliation of Adjusted EBITDA Attributable to MPLX LP and DCF |
|||||||
Three Months Ended | |||||||
(In millions) |
2018 |
2017 |
|||||
Net income |
$ |
423 |
$ |
187 |
|||
Depreciation and amortization |
176 |
187 |
|||||
Provision for income taxes |
4 |
— |
|||||
Amortization of deferred financing costs |
16 |
12 |
|||||
Non-cash equity-based compensation |
4 |
3 |
|||||
Net interest and other financial costs |
114 |
66 |
|||||
Income from equity method investments |
(61) |
(5) |
|||||
Distributions from unconsolidated subsidiaries |
68 |
33 |
|||||
Other adjustments to equity method investment distributions |
22 |
— |
|||||
Unrealized derivative losses (gains)(a) |
(7) |
(16) |
|||||
Acquisition costs |
3 |
4 |
|||||
Adjusted EBITDA |
762 |
471 |
|||||
Adjusted EBITDA attributable to noncontrolling interests |
(2) |
(1) |
|||||
Adjusted EBITDA attributable to Predecessor(b) |
— |
(47) |
|||||
Adjusted EBITDA attributable to MPLX LP |
760 |
423 |
|||||
Deferred revenue impacts |
9 |
8 |
|||||
Net interest and other financial costs |
(114) |
(66) |
|||||
Maintenance capital expenditures |
(25) |
(12) |
|||||
Equity method investment capital expenditures paid out |
(11) |
(2) |
|||||
Other |
— |
1 |
|||||
Portion of DCF adjustments attributable to Predecessor(b) |
— |
2 |
|||||
DCF attributable to MPLX LP |
619 |
354 |
|||||
Preferred unit distributions |
(16) |
(16) |
|||||
DCF attributable to GP and LP unitholders |
$ |
603 |
$ |
338 |
|||
(a) |
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
(b) |
The adjusted EBITDA and DCF adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF prior to the acquisition date. |
Reconciliation of Adjusted EBITDA Attributable to MPLX LP and DCF |
|||||||
Three Months Ended | |||||||
(In millions) |
2018 |
2017 |
|||||
Net cash provided by operating activities |
$ |
450 |
$ |
377 |
|||
Changes in working capital items |
178 |
44 |
|||||
All other, net |
(3) |
(9) |
|||||
Non-cash equity-based compensation |
4 |
3 |
|||||
Net gain on disposal of assets |
— |
(1) |
|||||
Net interest and other financial costs |
114 |
66 |
|||||
Asset retirement expenditures |
1 |
1 |
|||||
Unrealized derivative losses (gains)(a) |
(7) |
(16) |
|||||
Acquisition costs |
3 |
4 |
|||||
Other adjustments to equity method investment distributions |
22 |
— |
|||||
Other |
— |
2 |
|||||
Adjusted EBITDA |
762 |
471 |
|||||
Adjusted EBITDA attributable to noncontrolling interests |
(2) |
(1) |
|||||
Adjusted EBITDA attributable to Predecessor(b) |
— |
(47) |
|||||
Adjusted EBITDA attributable to MPLX LP |
760 |
423 |
|||||
Deferred revenue impacts |
9 |
8 |
|||||
Net interest and other financial costs |
(114) |
(66) |
|||||
Maintenance capital expenditures |
(25) |
(12) |
|||||
Equity method investment capital expenditures paid out |
(11) |
(2) |
|||||
Other |
— |
1 |
|||||
Portion of DCF adjustments attributable to Predecessor(b) |
— |
2 |
|||||
DCF attributable to MPLX LP |
619 |
354 |
|||||
Preferred unit distributions |
(16) |
(16) |
|||||
DCF attributable to GP and LP unitholders |
$ |
603 |
$ |
338 |
|||
(a) |
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
(b) |
The adjusted EBITDA and DCF adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF prior to the acquisition date. |
Capital Expenditures (unaudited) |
|||||||
Three Months Ended | |||||||
(In millions) |
2018 |
2017 |
|||||
Capital Expenditures(a): |
|||||||
Maintenance |
$ |
25 |
$ |
12 |
|||
Growth |
425 |
271 |
|||||
Total capital expenditures |
450 |
283 |
|||||
Less: Increase in capital accruals |
(6) |
2 |
|||||
Asset retirement expenditures |
1 |
1 |
|||||
Additions to property, plant and equipment |
455 |
280 |
|||||
Capital expenditures of unconsolidated subsidiaries(b) |
54 |
124 |
|||||
Total gross capital expenditures |
509 |
404 |
|||||
Less: Joint venture partner contributions |
14 |
34 |
|||||
Total capital expenditures, net |
495 |
370 |
|||||
Less: Maintenance capital |
25 |
12 |
|||||
Total growth capital expenditures |
$ |
470 |
$ |
358 |
|||
(a) |
Includes capital expenditures of the Predecessor for all periods presented. |
(b) |
Capital expenditures includes amounts related to unconsolidated, partnership operated subsidiaries. |
View original content with multimedia:http://www.prnewswire.com/news-releases/mplx-lp-reports-record-first-quarter-2018-financial-results-300638814.html
SOURCE MPLX LP
FINDLAY, Ohio, April 30, 2018 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported 2018 first-quarter earnings of $37 million, or $0.08 per diluted share. This compares with $30 million, or $0.06 per diluted share, in the first quarter of 2017.
"So far in 2018, we have accomplished many significant milestones," said Gary R. Heminger, chairman and chief executive officer. "We successfully completed a major turnaround at our Galveston Bay refinery, organically grew our midstream footprint in the Northeast and Permian, announced a definitive agreement to acquire store locations that will expand Speedway into key growth markets, and returned over $1.5 billion of capital to our shareholders.
"As we continue to focus on operational excellence and maximizing our shareholders' long-term returns, we also are pleased to announce that the U.S. Environmental Protection Agency has named MPC a 2018 Energy Star Partner of the Year for Energy Management, recognizing our leadership in energy efficiency. We are proud to manufacture, transport and market cost-efficient energy that makes millions of people's lives better every day, never losing sight of our responsibility to operate safely and efficiently."
MPC's first-quarter 2018 income from operations was $440 million, an increase of $149 million over the first quarter of 2017. The year-over-year increase in first-quarter income from operations was partially offset by higher net interest and other financial costs, as well as the increased amount of net income allocated to noncontrolling interests in MPLX LP (NYSE: MPLX) resulting from the Feb. 1 dropdown and general partner/IDR exchange transactions. In addition, the effective tax rate for the quarter reflects deferred tax benefits of approximately $20 million, primarily resulting from effects of these strategic transactions.
The Refining and Marketing (R&M) segment reported a loss from operations of $133 million, compared with a loss from operations of $70 million in the first quarter of 2017, largely as a result of the February dropdown. This quarter, activities associated with these businesses reduced R&M segment income from operations by approximately $181 million and increased Midstream segment income from operations by a like amount. Excluding these effects, R&M results improved, driven by higher throughputs and lower direct operating costs from decreased turnaround activity, partially offset by lower product-price realizations.
MPC remains focused on realizing the substantial advantages of its flexible and integrated refining system and enhancing margins through further investments and process improvements. During the quarter, the Garyville refinery completed the final phase of its diesel maximization project. This investment further enhances MPC's ability to benefit from the adoption of the International Maritime Organization's (IMO) low-sulfur-fuels requirements, scheduled to take effect in 2020, by increasing ultra-low-sulfur-distillate production by 5,000 barrels per day.
The Midstream segment, which largely reflects MPLX, reported record income from operations of $567 million, up from $309 million in the first quarter last year, driven by a strong underlying base business and the February dropdown. The partnership continues to execute on its significant organic growth plan, commissioning three new processing plants during the quarter, further expanding the partnership's earnings base.
Speedway contributed $95 million in segment income from operations, compared with $135 million in the same quarter last year. Results were affected by increased operating expenses, accelerated depreciation arising from technology investments, and adverse weather. In April, consistent with its growth strategy, Speedway announced its agreement to purchase 78 store locations in Syracuse, Rochester and Buffalo, New York. These stores will enhance the existing network and expand Speedway's brand presence in key growth markets.
During the quarter, MPC returned $1.55 billion to MPC shareholders, including $1.33 billion in share repurchases funded primarily by after-tax cash proceeds from the February dropdown.
"Looking forward, we are very optimistic about the opportunities for our business," Heminger said. "The solid demand backdrop, favorable crude differentials, and changing dynamics of the low-sulfur-fuel market all set the stage to create meaningful benefits across MPC's integrated and diversified business model.
"Additionally, this morning we were excited to announce that MPC entered into a definitive merger agreement to acquire Andeavor (NYSE: ANDV). This transaction combines two strong, complementary companies to create a leading U.S. refining, marketing, and midstream company, building a platform that is well-positioned for long-term growth and shareholder value creation."
MPC and Andeavor will hold a conference call and webcast today at 8:30 a.m. to discuss the transaction and related materials can be found on our website.
Segment Results
Income from operations was $440 million in the first quarter of 2018, compared with $291 million in the first quarter of 2017.
Three Months Ended | |||||||
(In millions) |
2018 |
2017 | |||||
Income (Loss) from Operations by Segment |
|||||||
Refining & Marketing |
$ |
(133) |
$ |
(70) |
|||
Speedway |
95 |
135 |
|||||
Midstream |
567 |
309 |
|||||
Items not allocated to segments: |
|||||||
Corporate and other unallocated items(a) |
(88) |
(83) |
|||||
Pension settlement expenses |
(1) |
— |
|||||
Income from operations(a) |
$ |
440 |
$ |
291 |
(a) |
We adopted Accounting Standards Update 2017-07, Retirement Benefits Presentation of Pension and Postretirement Cost, as of Jan. 1, 2018, and applied the standard retrospectively. As a result, we reclassified prior period amounts from Selling, general and administrative expenses to Net interest and other financial costs to conform to current period presentation. |
Refining & Marketing
Refining & Marketing (R&M) segment loss from operations was $133 million in the first quarter of 2018, compared with a loss from operations of $70 million in the same quarter of 2017. The decrease in segment results was primarily due to the Feb. 1, 2018, dropdown of refining logistics assets and fuels distribution services to MPLX. These businesses were reported in the Midstream segment prospectively from Feb. 1, resulting in a net reduction of $181 million to R&M segment results and a net increase to Midstream segment results of the same amount. Prior period segment results do not reflect these new businesses.
The change in segment results also reflects the benefits of increased refinery throughputs, lower direct operating costs and the retroactive enactment of a biodiesel blending tax credit for 2017, offset by lower product price realizations as compared with spot market reference prices. Refinery throughputs totaled 1.9 million barrels per day in first quarter 2018, an increase of almost 12 percent from the first quarter of 2017. The U.S. Gulf Coast (USGC) and Chicago LLS blended 6-3-2-1 crack spread was $7.70 per barrel in the first quarter of 2018 as compared to $7.72 per barrel in the first quarter of 2017.
Speedway
Speedway segment income from operations was $95 million in the first quarter of 2018, compared with $135 million in the first quarter of 2017. Speedway's light product margin was 15.61 cents per gallon in the first quarter of 2018 compared with 15.66 cents per gallon in the first quarter of 2017. The decrease in segment results was primarily due to higher operating expense, largely related to labor costs, and accelerated depreciation. The accelerated depreciation resulted from Speedway's upgrade of dispenser technology to provide marketing earnings enhancements and strengthen customer bank card security in advance of the required timeframe. In addition, during the quarter, multiple storms in the Northeast and Midwest markets resulted in reduced traffic at Speedway stores.
Midstream
Midstream segment income from operations, which primarily reflects the results of MPLX, was $567 million in the first quarter of 2018, compared with $309 million for the first quarter of 2017. The increase was primarily due to the Feb. 1 dropdown of refining logistics assets and fuels distribution services to MPLX. Additionally, the Midstream segment benefited from higher gathered, processed and fractionated volumes resulting from new processing facilities.
Items Not Allocated to Segments
Corporate and other unallocated expenses were $88 million in the first quarter of 2018, compared with $83 million in the first quarter of 2017.
Strong Financial Position and Liquidity
On March 31, 2018, the company had $4.7 billion of cash and cash equivalents, excluding MPLX's cash and cash equivalents of $2 million; $2.5 billion available under a revolving credit agreement; $1 billion available under a 364-day bank revolving credit facility; and full availability under its $750 million trade receivables securitization facility. During the quarter, the company completed the redemption of all of the $600 million outstanding aggregate principal amount of its 2.700% senior notes due in December 2018. The company's liquidity should provide it with sufficient flexibility to meet its day-to-day operational needs and continue its balanced approach to investing in the business and returning capital to shareholders while maintaining an investment-grade credit profile.
Conference Call
MPC's previously announced first-quarter 2018 earnings conference call and webcast, which had been scheduled for Tuesday, May 1, has been cancelled. MPC and Andeavor will hold a conference call and webcast at 8:30 a.m. EDT today to discuss the transaction. Interested parties may listen to the conference call by dialing (888) 989-4720 (confirmation number 4852094) or by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "Marathon Petroleum Corp. and Andeavor Strategic Combination" link. Replays of the conference call will be available on both companies' websites through Tuesday, May 15. MPC management will be available to answer questions about the earnings release at the end of today's conference call. Financial information, including the earnings release and other investor-related material, also will be available online prior to the conference call and webcast at http://ir.marathonpetroleum.com in the Quarterly Investor Packet and Earnings Capsule.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
References to Earnings
References to earnings mean net income attributable to MPC from the statements of income. Unless otherwise indicated, references to earnings and earnings per share are MPC's share after excluding amounts attributable to noncontrolling interests.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation ("MPC"). These forward-looking statements relate to, among other things, the proposed transaction between MPC and Andeavor ("ANDV") and include expectations, estimates and projections concerning the business and operations, strategic initiatives and value creation plans of MPC. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may", "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 MPC's actual results to differ materially from those implied in the forward-looking statements include: the ability to complete the proposed transaction between MPC and ANDV on anticipated terms and timetable; the ability to obtain approval by the shareholders of ANDV and MPC related to the proposed transaction and the ability to satisfy various other conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain governmental approvals of the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entity in connection with consummation of the proposed transaction; the risk that the cost savings and any other synergies from the proposed transaction may not be fully realized or may take longer to realize than expected; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDV; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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 and ANDV's respective Annual Reports on Form 10-K for the year ended Dec. 31, 2017, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed transaction, a registration statement on Form S-4 will be filed with the SEC. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE JOINT PROXY STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final joint proxy statement/prospectus will be mailed to stockholders of Marathon Petroleum Corporation ("MPC") and Andeavor ("ANDV"). Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, from MPC at its website, www.marathonpetroleum.com, or by contacting MPC's Investor Relations at (419) 421-2414, or from ANDV at its website, www.andeavor.com, or by contacting ANDV's Investor Relations at (210) 626-4757.
Participants in Solicitation
MPC and ANDV and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information concerning MPC's participants is set forth in the proxy statement, filed March 15, 2018, for MPC's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Information concerning ANDV's participants is set forth in the proxy statement, filed March 15, 2018, for ANDV's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of such participants in the solicitation of proxies in respect of the proposed transaction will be included in the registration statement and joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
Consolidated Statements of Income (Unaudited) | |||||||
Three Months Ended | |||||||
(In millions, except per-share data) |
2018 |
2017 | |||||
Revenues and other income: |
|||||||
Sales and other operating revenues(a) |
$ |
18,694 |
$ |
16,134 |
|||
Sales to related parties |
172 |
154 |
|||||
Income from equity method investments |
86 |
57 |
|||||
Net gain on disposal of assets |
2 |
5 |
|||||
Other income |
30 |
43 |
|||||
Total revenues and other income |
18,984 |
16,393 |
|||||
Costs and expenses: |
|||||||
Cost of revenues (excludes items below)(a) |
17,370 |
14,946 |
|||||
Purchases from related parties |
141 |
122 |
|||||
Depreciation and amortization |
528 |
536 |
|||||
Selling, general and administrative expenses(b) |
402 |
390 |
|||||
Other taxes |
103 |
108 |
|||||
Total costs and expenses |
18,544 |
16,102 |
|||||
Income from operations(b) |
440 |
291 |
|||||
Net interest and other financial costs(b) |
183 |
149 |
|||||
Income before income taxes |
257 |
142 |
|||||
Provision for income taxes |
22 |
41 |
|||||
Net income |
235 |
101 |
|||||
Less net income attributable to: |
|||||||
Redeemable noncontrolling interest |
16 |
16 |
|||||
Noncontrolling interests |
182 |
55 |
|||||
Net income attributable to MPC |
$ |
37 |
$ |
30 |
|||
Per-share data |
|||||||
Basic: |
|||||||
Net income attributable to MPC per share |
$ |
0.08 |
$ |
0.06 |
|||
Weighted average shares: |
476 |
525 |
|||||
Diluted: |
|||||||
Net income attributable to MPC per share |
$ |
0.08 |
$ |
0.06 |
|||
Weighted average shares: |
480 |
530 |
|||||
Dividends paid |
$ |
0.46 |
$ |
0.36 |
|||
(a) |
We adopted Accounting Standards Update 2014-09, Revenue - Revenue from contracts with customers, as of Jan. 1, 2018, and elected to report certain taxes on a net basis. We applied the standard using the modified retrospective method and, therefore, comparative information continues to reflect certain taxes on a gross basis. |
(b) |
We adopted Accounting Standards Update 2017-07, Retirement Benefits Presentation of Pension and Postretirement Cost, as of Jan. 1, 2018, and applied the standard retrospectively. As a result, we reclassified prior period amounts from Selling, general and administrative expenses to Net interest and other financial costs to conform to current period presentation. |
Supplemental Statistics (Unaudited) | |||||||
Three Months Ended | |||||||
(In millions) |
2018 |
2017 | |||||
Income (Loss) from Operations by Segment |
|||||||
Refining & Marketing(a) |
$ |
(133) |
$ |
(70) |
|||
Speedway |
95 |
135 |
|||||
Midstream(a) |
567 |
309 |
|||||
Items not allocated to segments: |
|||||||
Corporate and other unallocated items(b) |
(88) |
(83) |
|||||
Pension settlement expenses |
(1) |
— |
|||||
Income from operations(b) |
440 |
291 |
|||||
Net interest and other financial costs(b) |
183 |
149 |
|||||
Income before income taxes |
257 |
142 |
|||||
Provision for income taxes |
22 |
41 |
|||||
Net income |
235 |
101 |
|||||
Less net income attributable to: |
|||||||
Redeemable noncontrolling interest |
16 |
16 |
|||||
Noncontrolling interests |
182 |
55 |
|||||
Net income attributable to MPC |
$ |
37 |
$ |
30 |
|||
Capital Expenditures and Investments |
|||||||
Refining & Marketing |
$ |
191 |
$ |
192 |
|||
Speedway |
39 |
35 |
|||||
Midstream(c) |
482 |
1,070 |
|||||
Corporate and Other(d) |
36 |
28 |
|||||
Total |
$ |
748 |
$ |
1,325 |
|||
(a) |
On Feb. 1, 2018, we contributed certain refining logistics assets and fuels distribution services to MPLX. The results of these new businesses are reported in the Midstream segment prospectively from Feb. 1, resulting in a net increase of $181 million to Midstream segment results and a net decrease to Refining & Marketing segment results of the same amount in the first quarter of 2018. No effect was given to prior periods as these entities were not considered businesses prior to Feb. 1, 2018. |
(b) |
We adopted Accounting Standards Update 2017-07, Retirement Benefits Presentation of Pension and Postretirement Cost, as of Jan. 1, 2018, and applied the standard retrospectively. As a result, we reclassified prior period amounts from Selling, general and administrative expenses to Net interest and other financial costs to conform to current period presentation. |
(c) |
Includes $220 million for the acquisition of the Ozark pipeline and an investment of $500 million in MarEn Bakken related to the Bakken Pipeline system in the three months ended March 31, 2017. |
(d) |
Includes capitalized interest of $18 million and $12 million, respectively. |
Supplementary Statistics (Unaudited) (continued) |
Three Months Ended | ||||||
2018 |
2017 | ||||||
MPC Consolidated Refined Product Sales Volumes (thousands of barrels per day (mbpd)(a) |
2,275 |
2,085 |
|||||
Refining & Marketing (R&M) Operating Statistics |
|||||||
R&M refined product sales volume (mbpd)(b) |
2,261 |
2,070 |
|||||
R&M margin (dollars per barrel)(c) |
$ |
10.58 |
$ |
11.65 |
|||
Crude oil capacity utilization (percent)(d) |
93 |
83 |
|||||
Refinery throughputs (mbpd):(e) |
|||||||
Crude oil refined |
1,745 |
1,511 |
|||||
Other charge and blendstocks |
160 |
197 |
|||||
Total |
1,905 |
1,708 |
|||||
Sour crude oil throughput (percent) |
52 |
67 |
|||||
WTI-priced crude oil throughput (percent) |
26 |
15 |
|||||
Refined product yields (mbpd):(e) |
|||||||
Gasoline |
917 |
867 |
|||||
Distillates |
609 |
544 |
|||||
Propane |
31 |
28 |
|||||
Feedstocks and special products |
287 |
224 |
|||||
Heavy fuel oil |
34 |
29 |
|||||
Asphalt |
58 |
56 |
|||||
Total |
1,936 |
1,748 |
|||||
Refinery direct operating costs ($/barrel):(f) |
|||||||
Planned turnaround and major maintenance |
$ |
2.22 |
$ |
3.10 |
|||
Depreciation and amortization |
1.37 |
1.63 |
|||||
Other manufacturing(g) |
4.09 |
4.72 |
|||||
Total |
$ |
7.68 |
$ |
9.45 |
|||
R&M Operating Statistics by Region - Gulf Coast |
|||||||
Refinery throughputs (mbpd):(h) |
|||||||
Crude oil refined |
1,056 |
850 |
|||||
Other charge and blendstocks |
167 |
222 |
|||||
Total |
1,223 |
1,072 |
|||||
Sour crude oil throughput (percent) |
60 |
84 |
|||||
WTI-priced crude oil throughput (percent) |
13 |
4 |
|||||
Refined product yields (mbpd):(h) |
|||||||
Gasoline |
534 |
499 |
|||||
Distillates |
360 |
309 |
|||||
Propane |
19 |
21 |
|||||
Feedstocks and special products |
298 |
243 |
|||||
Heavy fuel oil |
23 |
18 |
|||||
Asphalt |
17 |
14 |
|||||
Total |
1,251 |
1,104 |
|||||
Refinery direct operating costs ($/barrel):(f) |
|||||||
Planned turnaround and major maintenance |
$ |
2.87 |
$ |
4.31 |
|||
Depreciation and amortization |
1.09 |
1.35 |
|||||
Other manufacturing(g) |
3.91 |
4.62 |
|||||
Total |
$ |
7.87 |
$ |
10.28 |
|||
Supplementary Statistics (Unaudited) (continued) |
Three Months Ended | ||||||
2018 |
2017 | ||||||
R&M Operating Statistics by Region - Midwest |
|||||||
Refinery throughputs (mbpd):(h) |
|||||||
Crude oil refined |
689 |
661 |
|||||
Other charge and blendstocks |
35 |
30 |
|||||
Total |
724 |
691 |
|||||
Sour crude oil throughput (percent) |
38 |
45 |
|||||
WTI-priced crude oil throughput (percent) |
47 |
29 |
|||||
Refined product yields (mbpd):(h) |
|||||||
Gasoline |
383 |
368 |
|||||
Distillates |
249 |
235 |
|||||
Propane |
12 |
8 |
|||||
Feedstocks and special products |
31 |
35 |
|||||
Heavy fuel oil |
11 |
11 |
|||||
Asphalt |
41 |
42 |
|||||
Total |
727 |
699 |
|||||
Refinery direct operating costs ($/barrel):(f) |
|||||||
Planned turnaround and major maintenance |
$ |
0.99 |
$ |
0.98 |
|||
Depreciation and amortization |
1.77 |
1.93 |
|||||
Other manufacturing(g) |
4.16 |
4.50 |
|||||
Total |
$ |
6.92 |
$ |
7.41 |
|||
Speedway Operating Statistics |
|||||||
Convenience stores at period-end |
2,742 |
2,731 |
|||||
Gasoline and distillate sales (millions of gallons) |
1,393 |
1,393 |
|||||
Gasoline and distillate margin (dollars per gallon)(i) |
$ |
0.1561 |
$ |
0.1566 |
|||
Merchandise sales (in millions) |
$ |
1,129 |
$ |
1,127 |
|||
Merchandise margin (in millions) |
$ |
319 |
$ |
320 |
|||
Merchandise margin percent |
28.3 |
% |
28.4 |
% | |||
Same store gasoline sales volume (period over period) |
(1.5) |
% |
(1.0) |
% | |||
Same store merchandise sales (period over period)(j) |
2.3 |
% |
2.1 |
% | |||
Midstream Operating Statistics |
|||||||
Crude oil and refined product pipeline throughputs (mbpd)(k) |
3,459 |
2,888 |
|||||
Terminal throughput (mbpd) |
1,445 |
1,424 |
|||||
Gathering system throughput (million cubic feet per day)(l) |
4,171 |
3,184 |
|||||
Natural gas processed (million cubic feet per day)(l) |
6,629 |
6,132 |
|||||
C2 (ethane) + NGLs fractionated (mbpd)(l) |
423 |
367 |
|||||
(a) |
Total average daily volumes of refined product sales to wholesale, branded and retail customers. |
(b) |
Includes intersegment sales. |
(c) |
Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. |
(d) |
Based on calendar-day capacity, which is an annual average that includes down time for planned maintenance and other normal operating activities. |
(e) |
Excludes inter-refinery volumes of 42 mbpd and 55 mbpd for the first quarter of 2018 and 2017, respectively. |
(f) |
Per barrel of total refinery throughputs. Effective with the Feb. 1, 2018, dropdown, direct operating costs related to certain refining logistics assets are now reported in the Midstream segment. Comparative information has not been adjusted. |
(g) |
Includes utilities, labor, routine maintenance and other operating costs. |
(h) |
Includes inter-refinery transfer volumes. |
(i) |
The price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bank card processing fees, divided by gasoline and distillate sales volumes. |
(j) |
Excludes cigarettes. |
(k) |
Includes common-carrier pipelines and private pipelines owned or operated by MPLX, excluding equity method investments. |
(l) |
Includes amounts related to unconsolidated equity method investments on a 100% basis. |
Segment Earnings Before Interest, Taxes, Depreciation & Amortization (Segment EBITDA) (Unaudited) | |||||||
Three Months Ended | |||||||
(In millions) |
2018 |
2017 | |||||
Segment EBITDA(a) |
|||||||
Refining & Marketing(b) |
$ |
119 |
$ |
197 |
|||
Speedway |
174 |
199 |
|||||
Midstream(b) |
748 |
500 |
|||||
Total Segment EBITDA(a) |
1,041 |
896 |
|||||
Total segment depreciation & amortization |
(512) |
(522) |
|||||
Items not allocated to segments |
(89) |
(83) |
|||||
Income from operations |
440 |
291 |
|||||
Net interest and other financial costs |
183 |
149 |
|||||
Income before income taxes |
257 |
142 |
|||||
Income tax provision |
22 |
41 |
|||||
Net income |
235 |
101 |
|||||
Less net income attributable to: |
|||||||
Redeemable noncontrolling interest |
16 |
16 |
|||||
Noncontrolling interests |
182 |
55 |
|||||
Net income attributable to MPC |
$ |
37 |
$ |
30 |
|||
(a) |
Segment EBITDA represents segment earnings before interest and financing costs, interest income, income taxes and depreciation and amortization expense. Segment EBITDA is used by some investors and analysts to analyze and compare companies on the basis of operating performance. Segment EBITDA should not be considered as an alternative to net income attributable to MPC, income before income taxes, cash flows from operating activities or any other measure of financial performance presented in accordance with accounting principles generally accepted in the United States. Segment EBITDA may not be comparable to similarly titled measures used by other entities. |
(b) |
On Feb. 1, 2018, we contributed certain refining logistics assets and fuels distribution services to MPLX. The results of these new businesses are reported in the Midstream segment prospectively from Feb. 1, resulting in a net increase of $181 million to Midstream segment results and a net decrease to Refining & Marketing segment results of the same amount in the first quarter of 2018. No effect was given to prior periods as these entities were not considered businesses prior to Feb. 1, 2018. |
Select Financial Data (Unaudited) |
|||||||
(In millions) |
March 31 |
Dec. 31 | |||||
Cash and cash equivalents |
$ |
4,653 |
$ |
3,011 |
|||
MPLX debt |
11,862 |
6,946 |
|||||
Total consolidated debt |
17,258 |
12,946 |
|||||
Redeemable noncontrolling interest |
1,000 |
1,000 |
|||||
Equity |
18,863 |
20,828 |
|||||
Debt-to-total-capital ratio (percent) |
46 |
37 |
|||||
Shares outstanding |
467 |
486 |
|||||
Net cash provided by (used in) operations (quarter ended) |
$ |
(137) |
$ |
2,745 |
|||
Reconciliation of Refining & Marketing Margin to Refining & Marketing Income (Loss) from Operations | |||||||
Three Months Ended | |||||||
(In millions) |
2018 |
2017 | |||||
Refining & Marketing loss from operations |
$ |
(133) |
$ |
(70) |
|||
Plus (Less): |
|||||||
Refinery direct operating costs(a) |
1,081 |
1,202 |
|||||
Refinery depreciation and amortization |
236 |
251 |
|||||
Other: |
|||||||
Operating expenses(a)(b) |
722 |
456 |
|||||
Segment (income) expense, net(a) |
(108) |
(64) |
|||||
Depreciation and amortization |
16 |
16 |
|||||
Refining & Marketing margin(c) |
$ |
1,814 |
$ |
1,791 |
(a) |
Excludes depreciation and amortization. |
(b) |
Includes fees paid to MPLX for various midstream services. |
(c) |
Refining & Marketing margin is defined as sales revenue less cost of refinery inputs and purchased products, excluding any LCM inventory market adjustment. We believe this non-GAAP financial measure is useful to investors and analysts to assess our ongoing financial performance because, when reconciled to its most comparable GAAP measure, it provides improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. This measure should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies. |
Reconciliation of Speedway Total Margin to Speedway Income from Operations | |||||||
Three Months Ended | |||||||
(in millions) |
2018 |
2017 | |||||
Speedway income from operations |
$ |
95 |
$ |
135 |
|||
Plus (Less): |
|||||||
Operating, selling, general and administrative expenses |
384 |
366 |
|||||
Depreciation and amortization |
79 |
64 |
|||||
Income from equity method investments |
(14) |
(13) |
|||||
Net gain on disposal of assets |
— |
(4) |
|||||
Other income |
(1) |
(3) |
|||||
Speedway total margin |
$ |
543 |
$ |
545 |
|||
Speedway total margin:(a) |
|||||||
Gasoline and distillate margin |
$ |
217 |
$ |
218 |
|||
Merchandise margin |
319 |
320 |
|||||
Other margin |
7 |
7 |
|||||
Speedway total margin |
$ |
543 |
$ |
545 |
(a) |
Speedway gasoline and distillate margin is defined as the price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bank card processing fees and excluding any LCM inventory market adjustment. Speedway merchandise margin is defined as the price paid by consumers less the cost of merchandise. We believe these non-GAAP financial measures are useful to investors and analysts to assess our ongoing financial performance because, when reconciled to the most comparable GAAP measures, they provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies. |
View original content with multimedia:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-first-quarter-2018-results-300638808.html
SOURCE Marathon Petroleum Corp.
FINDLAY, Ohio and SAN ANTONIO, April 30, 2018 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) and Andeavor (NYSE: ANDV) today announced that they have entered into a definitive merger agreement under which MPC will acquire all of ANDV's outstanding shares, representing a total equity value of $23.3 billion and total enterprise value of $35.6 billion, based on MPC's April 27, 2018, closing price of $81.43. ANDV shareholders will have the option to choose 1.87 shares of MPC stock, or $152.27 in cash subject to a proration mechanism that will result in 15 percent of ANDV's fully diluted shares receiving cash consideration. This represents a premium of 24.4 percent to ANDV's closing price on April 27, 2018. MPC and ANDV shareholders will own approximately 66 percent and 34 percent of the combined company, respectively. The transaction was unanimously approved by the board of directors of both companies and is expected to close in the second half of 2018, subject to regulatory and other customary closing conditions, including approvals from both MPC and ANDV shareholders. The headquarters will be located in Findlay, Ohio, and the combined business will maintain an office in San Antonio, Texas.
"This transaction combines two strong, complementary companies to create a leading U.S. refining, marketing, and midstream company, building a platform that is well-positioned for long-term growth and shareholder value creation," said Gary R. Heminger, MPC chairman and chief executive officer. "Each of our operating segments are strengthened through this transaction, as it geographically diversifies our refining portfolio into attractive markets, increases access to advantaged feedstocks, enhances our midstream footprint in the Permian basin, and creates a nationwide retail and marketing portfolio that will substantially improve efficiencies and enhance our ability to serve customers.
"Importantly, we expect this transaction will be meaningfully accretive for shareholders, generating approximately $1 billion of tangible annual run-rate synergies within the first three years and significantly enhancing our long-term cash flow generation profile," said Heminger. "Given the confidence in the robust cash flow expected to be generated by the combined business, our board also authorized an incremental $5 billion of share repurchases. As a combined company, we will continue our balanced approach to investing in the business and returning cash to our investors, while maintaining our commitment to an investment-grade credit profile."
At closing, Greg Goff, ANDV chairman and chief executive officer, will join MPC as executive vice chairman. As executive vice chairman and an executive of MPC following closing, Goff will provide leadership and be integrally involved in the strategy for the combined company. Goff, along with three other Andeavor directors, will also join the board of directors of Marathon Petroleum. "With significantly increased scale, a strong platform for our midstream businesses and a leading nationwide retail and marketing distribution portfolio, the combined company presents tremendous value enhancement and growth opportunities for all shareholders," said Goff. "This strategic combination provides our shareholders with a premium for their shares and the opportunity to benefit from substantial future value creation at MPC. As the largest refiner by capacity in the U.S., with a best-in-class operating capability and a strong capital structure, the combined company will be exceptionally well-positioned to deliver on its synergy and earnings targets. We look forward to working together to deliver on the full potential of this powerful combination."
Heminger and Goff added that MPC and ANDV are not only complementary from operational and financial standpoints, but also share similar core values. They said that both MPC and ANDV have been committed to safety, environmental stewardship, and community involvement. Together, the alignment on these values will enable the combined company to remain an excellent corporate citizen wherever it has the privilege to operate, they added.
1 Based on closing share/unit price of MPC/MPLX and ANDV/ANDX on April 27, 2018
2 Based on 2019 consensus
Merits of the Transaction:
Transaction Terms
Under the terms of the agreement, ANDV shareholders will have the option to elect 1.87 shares of MPC stock or $152.27 in cash per share subject to a proration mechanism that will result in 15 percent of ANDV's fully diluted shares receiving cash consideration. The stock portion of the consideration received by Andeavor's shareholders is expected to be tax-free.
Approvals and Timing
The transaction has been unanimously approved by the boards of directors of both companies. The transaction is expected to close in the second half of 2018 and is subject to customary closing conditions, including approval by ANDV shareholders of the merger, and approval by MPC shareholders of the new MPC shares issued in the transaction. It is also subject to approval pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR), and the receipt of other required regulatory approvals.
Investor Presentation, Conference Call, Webcast
The companies will issue an investor presentation today, providing additional detail on the announcement. The presentation will be available on both companies' websites; on MPC's website at http://www.marathonpetroleum.com by clicking on the "Events and Presentations" link in the "Investor Center" tab; on ANDV's website at http://www.andeavor.com by clicking on the "Events and Presentations" link in the "Investor" tab.
MPC and Andeavor will hold a conference call and webcast at 8:30 a.m. EDT today to discuss the transaction. Interested parties may listen to the conference call by dialing (888) 989-4720 (confirmation number 4852094) or by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "Marathon Petroleum Corp. and Andeavor Strategic Combination" link. Replays of the conference call will be available on both companies' websites through Tuesday, May 15.
MPC First-Quarter 2018 Earnings Announcement
MPC plans to issue its first quarter 2018 financial results today following this announcement. Management will be available to answer questions about the earnings release at the end of today's conference call. MPC's previously announced first-quarter 2018 earnings conference call and webcast, which had been scheduled for Tuesday, May 1, at 9 a.m. EDT, has been cancelled.
MPLX will host a conference call and webcast today at 11 a.m. EDT in lieu of the previously scheduled call for Tuesday, May 1 to discuss 2018 first-quarter financial results, which will be released prior to the call, and to provide an update on partnership operations.
Advisors
Barclays acted as financial advisor and Jones Day acted as legal advisor to MPC in connection with the transaction. Goldman, Sachs & Co. LLC acted as exclusive financial advisor and Sullivan & Cromwell LLP acted as legal advisor to Andeavor in connection with the transaction.
About Marathon Petroleum Corp.
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
About Andeavor
Andeavor is a premier, highly integrated marketing, logistics and refining company. Andeavor's retail-marketing system includes more than 3,200 stores marketed under multiple well-known fuel brands, including ARCO®, SUPERAMERICA®, Shell®, Exxon®, Mobil®, Tesoro®, USA Gasoline(TM) and Giant®. It also has ownership in Andeavor Logistics LP and its non-economic general partner. Andeavor operates 10 refineries with a combined capacity of approximately 1.2 million barrels per day in the mid-continent and western United States.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation ("MPC") and Andeavor ("ANDV"). These forward-looking statements relate to, among other things, the proposed transaction between MPC and ANDV and include expectations, estimates and projections concerning the business and operations, strategic initiatives and value creation plans of MPC, MPLX LP ("MPLX"), ANDV and Andeavor Logistics ("ANDX"). In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may", "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 companies' control and are difficult to predict. Factors that could cause MPC's or ANDV's actual results to differ materially from those implied in the forward-looking statements include: the ability to complete the proposed transaction between MPC and ANDV on anticipated terms and timetable; the ability to obtain approval by the shareholders of ANDV and MPC related to the proposed transaction and the ability to satisfy various other conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain governmental approvals of the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entities in connection with consummation of the proposed transaction; the risk that the cost savings and any other synergies from the proposed transaction may not be fully realized or may take longer to realize than expected; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDV; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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 ANDX; and the factors set forth under the heading "Risk Factors" in MPC's and ANDV's respective Annual Reports on Form 10-K for the year ended Dec. 31, 2017, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed transaction, a registration statement on Form S-4 will be filed with the SEC. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE JOINT PROXY STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final joint proxy statement/prospectus will be mailed to stockholders of Marathon Petroleum Corporation ("MPC") and Andeavor ("ANDV"). Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, from MPC at its website, www.marathonpetroleum.com, or by contacting MPC's Investor Relations at (419) 421-2414, or from ANDV at its website, www.andeavor.com, or by contacting ANDV's Investor Relations at (210) 626-4757.
Participants in Solicitation
MPC and ANDV and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information concerning MPC's participants is set forth in the proxy statement, filed March 15, 2018, for MPC's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Information concerning ANDV's participants is set forth in the proxy statement, filed March 15, 2018, for ANDV's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of such participants in the solicitation of proxies in respect of the proposed transaction will be included in the registration statement and joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
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SOURCE Marathon Petroleum Corporation
FINDLAY, Ohio, April 25, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) today announced that the board of directors of its general partner has declared a cash distribution of $0.6175 per common unit for the first quarter of 2018. This represents an increase of $0.01 per unit, or 1.6 percent, over the fourth-quarter 2017 distribution; and an increase of $0.0775 per unit, or 14.4 percent, over the first-quarter 2017 distribution. Since the partnership's initial public offering in October 2012, the MPLX board has authorized distribution increases for 21 consecutive quarters, representing a compound annual growth rate of 17.7 percent over the minimum quarterly distribution established at the partnership's formation. The distribution will be paid May 15, 2018, to common unitholders of record as of May 7, 2018.
On May 1, MPLX will provide an update on its 2018 first-quarter results through an earnings release, to be followed by a conference call scheduled for 11 a.m. EDT that day. Interested parties may listen to the conference call by dialing 1-888-606-5719 (confirmation number 6033306) or by visiting MPLX's website at http://www.mplx.com and clicking on the "2018 First-Quarter Financial Results" link in the "News & Headlines" section.
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100 percent of MPLX's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, MPLX's distributions to non-United States investors are subject to federal income tax withholding at the highest applicable effective tax rate.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; the transportation, storage and distribution of crude oil and refined petroleum products; and the refining logistics and fuels distributions services through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610.000 barrels per day of fractionation capacity.
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SOURCE MPLX LP
FINDLAY, Ohio, April 12, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call Tuesday, May 1, 2018, at 11 a.m. EDT to discuss 2018 first-quarter financial results, which will be released earlier that day, and to provide an update on partnership operations.
MPLX participants will be Gary R. Heminger, chairman and chief executive officer; Michael J. Hennigan, president; Pamela K.M. Beall, executive vice president and chief financial officer; and other senior executives. The call will be hosted by Kristina A. Kazarian, vice president of Investor Relations.
Interested parties may listen to the conference call by dialing (888) 606-5719 (confirmation number 6033306) or by visiting MPLX's website at http://www.mplx.com and clicking on the "2018 First-Quarter Financial Results" link in the "News & Headlines" section. Financial information, including the earnings release and other investor-related material, also will be available online. Replays of the conference call will be available on the partnership's website through Tuesday, May 15.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. In addition, MPLX provides fuels distribution services to MPC and owns refining logistics assets consisting of tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping.
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SOURCE MPLX LP
FINDLAY, Ohio, April 12, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will host a conference call Tuesday, May 1, 2018, at 9 a.m. EDT to discuss 2018 first-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Participants will be Gary R. Heminger, chairman and chief executive officer; Don Templin, president; Tim Griffith, senior vice president and chief financial officer; Michael J. Hennigan, president of the general partner of MPLX LP (NYSE: MPLX), the master limited partnership sponsored by MPC; and other senior executives. The call will be hosted by Kristina A. Kazarian, vice president of Investor Relations.
Interested parties may listen to the conference call by dialing (888) 989-4720 (confirmation number 4852094) or by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2018 First-Quarter Financial Results" link. Replays of the conference call will be available on the company's website through Tuesday, May 15. Financial information, including the earnings release and other investor-related material, also will be available online.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
View original content with multimedia:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-announce-2018-first-quarter-financial-results-may-1-300629216.html
SOURCE Marathon Petroleum Corporation
DALLAS, March 22, 2018 /PRNewswire/ -- Swank Capital, LLC, and Cushing® Asset Management, LP, announce today the upcoming rebalancing of The Cushing® Energy Supply Chain Index (the "Index") as part of normal index operations. After the markets close on March 29, 2018, the constituents of the Index will be rebalanced, and the following changes will become effective on April 2, 2018:
Cushing® Energy Supply Chain Index constituents, effective April 2, 2018:
Company Name |
Ticker |
Index Weight |
Status |
LyondellBasell Industries N.V. |
LYB |
3.58% |
Existing |
International Paper Company |
IP |
3.43% |
Existing |
ONEOK, Inc. |
OKE |
3.41% |
Existing |
The Williams Companies, Inc. |
WMB |
3.31% |
Existing |
Occidental Petroleum Corporation |
OXY |
3.07% |
Existing |
CF Industries Holdings, Inc. |
CF |
3.04% |
Existing |
Helmerich & Payne, Inc. |
HP |
2.73% |
Existing |
Exxon Mobil Corporation |
XOM |
2.66% |
Existing |
WestRock Company |
WRK |
2.56% |
Existing |
Air Products and Chemicals, Inc. |
APD |
2.55% |
Existing |
Chevron Corporation |
CVX |
2.50% |
Existing |
Nucor Corporation |
NUE |
2.28% |
Existing |
DowDuPont Inc. |
DWDP |
2.20% |
Existing |
Valero Energy Corporation |
VLO |
2.16% |
Existing |
Praxair, Inc. |
PX |
2.11% |
Existing |
Packaging Corporation of America |
PKG |
2.08% |
Existing |
Kinder Morgan, Inc. |
KMI |
2.04% |
Existing |
Eastman Chemical Company |
EMN |
2.03% |
Existing |
Alliance Holdings GP, L.P. |
AHGP |
2.00% |
NEW |
Alliance Resource Partners, L.P. |
ARLP |
2.00% |
Existing |
EnLink Midstream Partners, LP |
ENLK |
2.00% |
Existing |
Tallgrass Energy Partners, LP |
TEP |
2.00% |
Existing |
DCP Midstream, LP |
DCP |
2.00% |
Existing |
Andeavor Logistics LP |
ANDX |
2.00% |
Existing |
Spectra Energy Partners, LP |
SEP |
2.00% |
Existing |
Energy Transfer Equity, L.P. |
ETE |
2.00% |
Existing |
Western Gas Partners, L.P. |
WES |
2.00% |
Existing |
Tallgrass Energy GP, LP |
TEGP |
2.00% |
NEW |
MPLX LP |
MPLX |
2.00% |
NEW |
Sunoco LP |
SUN |
2.00% |
NEW |
Schlumberger N.V. (Schlumberger Limited) |
SLB |
1.95% |
Existing |
International Flavors & Fragrances Inc. |
IFF |
1.95% |
Existing |
Phillips 66 |
PSX |
1.88% |
Existing |
Apache Corporation |
APA |
1.76% |
Existing |
Monsanto Company |
MON |
1.75% |
Existing |
Marathon Petroleum Corporation |
MPC |
1.64% |
Existing |
Avery Dennison Corporation |
AVY |
1.56% |
Existing |
Baker Hughes, A GE Company |
BHGE |
1.54% |
Existing |
PPG Industries, Inc. |
PPG |
1.52% |
Existing |
Andeavor |
ANDV |
1.50% |
Existing |
Newmont Mining Corporation |
NEM |
1.44% |
NEW |
Sealed Air Corporation |
SEE |
1.41% |
Existing |
Albemarle Corporation |
ALB |
1.35% |
Existing |
ConocoPhillips |
COP |
1.33% |
Existing |
Hess Corporation |
HES |
1.31% |
Existing |
Ecolab Inc. |
ECL |
1.16% |
Existing |
TechnicFMC plc |
FTI |
1.11% |
Existing |
Anadarko Petroleum Corporation |
APC |
1.09% |
NEW |
Halliburton Company |
HAL |
1.01% |
Existing |
Constituents removed, effective April 2, 2018:
Company Name |
Ticker |
Ball Corporation |
BLL |
Buckeye Partners, L.P. |
BPL |
CNX Midstream Partners LP |
CNXM |
Enterprise Products Partners, L.P. |
EPD |
Summit Midstream Partners, LP |
SMLP |
ABOUT THE CUSHING® ENERGY SUPPLY CHAIN INDEX
The Cushing® Energy Supply Chain Index tracks the performance of widely held companies engaged in exploration and production, refining and marketing, or storage and transportation of oil, natural gas, coal and consumable fuels; oil and natural gas equipment and services companies; and companies that extract and/or manufacture materials. Constituents of the Index are weighted based on current yield. The Index price level is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "CSCI".
ABOUT SWANK CAPITAL AND CUSHING® ASSET MANAGEMENT
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts which invest primarily in securities of MLPs and other natural resource companies.
Cushing is also dedicated to serving the needs of investors by sponsoring a variety of benchmarks, including The Cushing® 30 MLP Index (Bloomberg Ticker: MLPX), The Cushing® 30 MLP Market Cap Index (Bloomberg Ticker: CMCI), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY), The Cushing® Energy Index (Bloomberg Ticker: CENI), The Cushing® Transportation Index (Bloomberg Ticker: CTRI) and The Cushing® Utility Index (Bloomberg Ticker: CUTI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Judson Redmond
214-692-6334
www.cushingasset.com
The Cushing® Energy Supply Chain Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
CUSH-CSCI
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SOURCE Cushing Asset Management, LP; Swank Capital, LLC
DALLAS, March 22, 2018 /PRNewswire/ -- Swank Capital, LLC, and Cushing® Asset Management, LP, announce today the upcoming rebalancing of The Cushing® Utility Index (the "Index") as part of normal index operations. After the markets close on March 29, 2018, the constituents of the Index will be rebalanced, and the following changes will become effective on April 2, 2018:
Cushing® Utility Index constituents, effective April 2, 2018: | |||
Company Name |
Ticker |
Index Weight |
Status |
SCANA Corporation |
SCG |
4.70% |
Existing |
PPL Corporation |
PPL |
4.47% |
Existing |
The Southern Company |
SO |
3.93% |
Existing |
Dominion Energy, Inc. |
D |
3.62% |
Existing |
The AES Corporation |
AES |
3.60% |
Existing |
Duke Energy Corporation |
DUK |
3.46% |
Existing |
Entergy Corporation |
ETR |
3.35% |
Existing |
FirstEnergy Corp. |
FE |
3.17% |
Existing |
CenterPoint Energy, Inc. |
CNP |
3.07% |
Existing |
Edison International |
EIX |
2.86% |
Existing |
Consolidated Edison, Inc. |
ED |
2.76% |
Existing |
American Electric Power Company, Inc. |
AEP |
2.73% |
Existing |
Public Service Enterprise Group Inc. |
PEG |
2.73% |
Existing |
Exelon Corporation |
EXC |
2.67% |
Existing |
WEC Energy Group, Inc. |
WEC |
2.67% |
Existing |
Pinnacle West Capital Corporation |
PNW |
2.65% |
Existing |
Eversource Energy |
ES |
2.60% |
Existing |
DTE Energy Company |
DTE |
2.56% |
Existing |
Xcel Energy Inc. |
XEL |
2.55% |
Existing |
Alliant Energy Corporation |
LNT |
2.51% |
Existing |
NiSource Inc. |
NI |
2.50% |
Existing |
Ameren Corporation |
AEE |
2.46% |
Existing |
CMS Energy Corporation |
CMS |
2.41% |
Existing |
Sempra Energy |
SRE |
2.40% |
Existing |
NextEra Energy, Inc. |
NEE |
2.06% |
Existing |
Alliance Holdings GP, L.P. |
AHGP |
2.00% |
NEW |
Alliance Resource Partners, L.P. |
ARLP |
2.00% |
Existing |
EnLink Midstream Partners, LP |
ENLK |
2.00% |
Existing |
Tallgrass Energy Partners, LP |
TEP |
2.00% |
Existing |
DCP Midstream, LP |
DCP |
2.00% |
Existing |
Andeavor Logistics LP |
ANDX |
2.00% |
Existing |
Spectra Energy Partners, LP |
SEP |
2.00% |
Existing |
Energy Transfer Equity, L.P. |
ETE |
2.00% |
Existing |
Western Gas Partners, L.P. |
WES |
2.00% |
Existing |
Tallgrass Energy GP, LP |
TEGP |
2.00% |
NEW |
MPLX LP |
MPLX |
2.00% |
NEW |
Sunoco LP |
SUN |
2.00% |
NEW |
American Water Works Company, Inc. |
AWK |
1.51% |
Existing |
Constituents removed, effective April 2, 2018: | |
Company Name |
Ticker |
Buckeye Partners, L.P. |
BPL |
CNX Midstream Partners LP |
CNXM |
Enterprise Products Partners, L.P. |
EPD |
Summit Midstream Partners, LP |
SMLP |
ABOUT THE CUSHING® UTILITY INDEX
The Cushing® Utility Index tracks the performance of widely held companies engaged in electric, gas and water utility services as well as master limited partnerships (MLPs) engaged in storage and transportation of oil, natural gas, coal and consumable fuels. Constituents of the Index are weighted based on current yield. The Index price level is calculated by S&P Dow Jones Indices and reported on a real-time basis under the Bloomberg ticker "CUTI".
ABOUT SWANK CAPITAL AND CUSHING® ASSET MANAGEMENT
Cushing® Asset Management, LP ("Cushing"), a subsidiary of Swank Capital, LLC, is an SEC-registered investment adviser headquartered in Dallas, Texas. Cushing serves as investment adviser to affiliated funds and managed accounts which invest primarily in securities of MLPs and other natural resource companies.
Cushing is also dedicated to serving the needs of investors by sponsoring a variety of benchmarks, including The Cushing® 30 MLP Index (Bloomberg Ticker: MLPX), The Cushing® 30 MLP Market Cap Index (Bloomberg Ticker: CMCI), The Cushing® MLP High Income Index (Bloomberg Ticker: MLPY), The Cushing® Energy Index (Bloomberg Ticker: CENI), The Cushing® Energy Supply Chain Index (Bloomberg Ticker: CSCI) and The Cushing® Transportation Index (Bloomberg Ticker: CTRI). For more information, please visit http://www.cushingasset.com/indices.
Contact:
Judson Redmond
214-692-6334
www.cushingasset.com
The Cushing® Utility Index (the "Index") is the exclusive property of Swank Capital, LLC, and Cushing Asset Management, LP, which have contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) ("S&P Dow Jones Indices") to calculate and maintain the Index. S&P® is a registered trademark of Standard & Poor's Financial Services LLC ("SPFS"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and, these trademarks have been licensed to S&P Dow Jones Indices. "Calculated by S&P Dow Jones Indices" and its related stylized mark(s) have been licensed for use by Cushing Asset Management, LP. Neither S&P Dow Jones Indices, SPFS, Dow Jones nor any of their affiliates sponsor and promote the Index and none shall be liable for any errors or omissions in calculating the Index.
CUSH-CUTI
View original content:http://www.prnewswire.com/news-releases/swank-capital-and-cushing-asset-management-announce-rebalancing-of-the-cushing-utility-index-300617889.html
SOURCE Cushing Asset Management, LP; Swank Capital, LLC
FINDLAY, Ohio, March 16, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) has reviewed the March 15 Federal Energy Regulatory Commission (FERC) policy revision, in which FERC no longer will allow master limited partnership interstate natural gas and oil pipelines to recover an income tax allowance in cost-of-service rate filings. The partnership expects these revisions to have a de minimis effect on its earnings and cash flow.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. In addition, MPLX provides fuels distribution services to MPC and owns refining logistics assets consisting of tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping.
Forward-looking statement
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, expectations, estimates and projections concerning the business and operations of MPLX. You can identify forward-looking statements by words such as "anticipate," "expect," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our 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: the actual impact of the policy revision on our earnings and cash flow; other adverse changes in laws or regulatory matters; continued/further volatility in and/or degradation of market and industry conditions; other risk factors inherent to MPLX's industry; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2017, filed with the Securities and Exchange Commission (SEC). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPLX's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPLX's Form 10-K are available on the SEC website or by contacting MPLX's Investor Relations office.
View original content with multimedia:http://www.prnewswire.com/news-releases/mplx-responds-to-ferc-announcement-300615246.html
SOURCE MPLX LP
FINDLAY, Ohio, Feb. 28, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) today announced it has filed with the U.S. Securities and Exchange Commission its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2017. The filing can be viewed through a link on MPLX's website at http://www.mplx.com by selecting the "SEC Filings" link under the "Investors" tab.
Upon written request, unitholders may receive, free of charge, a copy of MPLX's Annual Report on Form 10-K (including complete audited financial statements). Requests should be communicated in writing to MPLX LP, Attention: Investor Relations, 200 E. Hardin Street, Findlay, OH 45840.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. In addition, MPLX provides fuels distribution services to MPC and owns refining logistics assets consisting of tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping.
View original content:http://www.prnewswire.com/news-releases/mplx-lp-files-2017-form-10-k-300606107.html
SOURCE MPLX LP
FINDLAY, Ohio, Feb. 26, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) today announced that its subsidiaries MPLX Ozark Pipe Line LLC (Ozark) and Marathon Pipe Line LLC (MPL) have completed a successful joint binding open season on the combined Ozark 22-inch and Woodpat 22-inch pipelines from Cushing, Oklahoma, to Patoka, Illinois. Based on strong interest from prospective shippers, MPL will continue with plans to increase the capacity of the pipeline by providing operational modifications, including tankage, in Wood River, Illinois. The expansion is expected to begin service in the third quarter of 2018.
"The Cushing-to-Patoka Expansion Project is a great example of providing our customers with additional capacity between two major crude hubs by adding connectivity and tankage," MPLX President Michael J. Hennigan said. "By securing long term commitments from shippers, MPL continues to enhance the value of its existing assets."
The binding open season began on Jan. 17, 2018, and concluded on Feb. 16, 2018.
About the Cushing-to-Patoka Expansion
The Cushing-to-Patoka Expansion provides transportation from Cushing, Oklahoma, to Patoka, Illinois. The project will further expand the capacity of the pipelines by 15,000 barrels per day (bpd) to 360,000 bpd by providing operational modifications, including tankage, in Wood River, Illinois. The expansion is expected to begin service in the third quarter of 2018.
About the Ozark Pipeline
The Ozark Pipeline is a 433-mile, 22-inch crude oil pipeline originating in Cushing, Oklahoma, and terminating in Wood River, Illinois, capable of transporting approximately 230,000 bpd. MPLX plans an expansion project, expected to be complete in the second quarter of 2018, to increase the line's capacity to approximately 345,000 bpd.
About the Woodpat Pipeline
The Woodpat Pipeline is a 55-mile, 22-inch crude oil pipeline originating in Wood River, Illinois, and terminating in Patoka, Illinois, capable of transporting approximately 215,000 bpd. MPLX plans an expansion project, expected to be complete in the second quarter of 2018, to increase the line's capacity to approximately 345,000 bpd.
About Marathon Pipe Line LLC
MPL operates one of the largest petroleum pipeline systems in the United States, based on total volume delivered. MPL operates approximately 6,400 miles of pipeline in 16 states. These pipelines range from 4 inches to 40 inches in diameter. MPL transports crude oil, refined petroleum products and refinery feedstocks to and from terminals, refineries and other pipelines. MPL safely controls the movement and delivery of an average of 143 million gallons of crude oil and petroleum products daily through its pipelines. For further information on MPL, visit the company's website at http://www.marathonpipeline.com.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. In addition, MPLX provides fuels distribution services to MPC and owns refining logistics assets consisting of tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping.
This press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements relate to, among other things, statements with respect to forecasts regarding capacity, rates, incremental investment and timing for becoming operational for the opportunities discussed above, as well as MPLX's future growth and results of operations. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the company and are difficult to predict. Factors that could impact the opportunities described above are: the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of pipeline capacity by our competitors; the ability to obtain required regulatory approvals on a timely basis; the occurrence of an operational hazard or unforeseen interruption; 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, 2016, filed with the Securities and Exchange Commission (SEC). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPLX's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.
View original content:http://www.prnewswire.com/news-releases/mplx-announces-successful-joint-binding-open-season-on-cushing-to-patoka-pipeline-expansion-300603638.html
SOURCE MPLX LP
DALLAS, Feb. 21, 2018 /PRNewswire/ -- Alerian reported index linked product positions of $16.3 billion as of December 31, 2017. Linked products include exchange-traded funds, exchange-traded notes, return of capital notes, variable insurance portfolios, and mutual funds.
Below is a full list of energy master limited partnership (MLP) positions, as of December 31, 2017, in products linked to the Alerian Index Series.
Ticker |
Exposure in |
Exposure in |
Ticker |
Exposure in |
Exposure in | |
AM |
318,072,149 |
10,952,898 |
MMP |
1,644,568,414 |
23,182,526 | |
AMGP |
754,587 |
38,265 |
MPLX |
1,279,929,181 |
36,084,837 | |
ANDX |
516,099,522 |
11,173,404 |
NBLX |
21,404,873 |
428,097 | |
APU |
76,556,528 |
1,655,992 |
NGL |
195,952,022 |
13,946,763 | |
ARLP |
20,166,275 |
1,023,669 |
NS |
296,565,295 |
9,902,013 | |
BPL |
908,164,717 |
18,328,249 |
NSH |
236,356 |
15,055 | |
BWP |
201,509,203 |
15,608,769 |
PAA |
1,085,692,515 |
52,601,382 | |
CEQP |
30,317,020 |
1,175,078 |
PAGP |
3,567,709 |
162,538 | |
CQP |
30,774,953 |
1,038,291 |
PSXP |
303,822,210 |
5,803,672 | |
DCP |
411,714,791 |
11,332,639 |
RMP |
197,598,050 |
9,203,449 | |
DM |
186,044,367 |
6,109,831 |
SEP |
397,826,315 |
10,061,364 | |
EEP |
372,358,764 |
26,962,981 |
SHLX |
369,468,507 |
12,389,957 | |
ENBL |
30,305,242 |
2,131,170 |
SMLP |
20,113,987 |
981,170 | |
ENLC |
1,134,945 |
64,485 |
SPH |
35,347,307 |
1,459,426 | |
ENLK |
317,615,016 |
20,664,607 |
SUN |
36,559,156 |
1,287,294 | |
EPD |
1,672,410,145 |
63,086,011 |
TCP |
350,896,258 |
6,608,216 | |
EQGP |
315,059 |
11,712 |
TEGP |
1,533,669 |
59,583 | |
EQM |
536,502,790 |
7,339,299 |
TEP |
269,478,027 |
5,877,383 | |
ETE |
6,574,648 |
380,918 |
TGP |
26,220,374 |
1,301,259 | |
ETP |
1,669,396,449 |
93,158,284 |
VLP |
23,823,578 |
535,361 | |
GEL |
300,264,393 |
13,434,648 |
VNOM |
20,179,418 |
864,956 | |
GLOP |
17,814,465 |
719,776 |
WES |
604,184,334 |
12,563,617 | |
GMLP |
26,442,305 |
1,159,750 |
WGP |
664,201 |
17,874 | |
HEP |
168,157,229 |
5,175,661 |
WPZ |
1,231,920,496 |
31,766,903 |
About Alerian
Alerian equips investors to make informed decisions about Master Limited Partnerships (MLPs) and energy infrastructure. Its benchmarks, including the flagship Alerian MLP Index (AMZ), are widely used by industry executives, investment professionals, research analysts, and national media to analyze relative performance. As of December 31, 2017, over $16 billion was directly tied to the Alerian Index Series through exchange-traded funds and notes, separately managed accounts, and structured products. For more information, including index values and constituents, research content, and announcements regarding rebalancings, please visit alerian.com.
View original content:http://www.prnewswire.com/news-releases/alerian-reports-december-31-2017-index-linked-product-positions-300602316.html
SOURCE Alerian
DES PLAINES, Ill., Feb. 12, 2018 /PRNewswire/ -- Honeywell (NYSE: HON) today announced that its UOP Russell business will provide a fractionation plant capable of producing 60,000 barrels per day of natural gas liquids (NGLs) to MarkWest Energy Partners. The company, which is a wholly owned subsidiary of MPLX LP (NYSE: MPLX), will install the plant at its Hopedale facility located in Jewett, Ohio.
The fractionation system will recover propane, isobutane, normal butane and pentane – or natural gasoline -- from mixed natural gas liquids for use in petrochemical manufacturing.
"A growing number of gas processors are investing in NGL fractionation technology," said Craig Ranta, Honeywell's business director for UOP Russell. "Today, our fractionation technologies produce more than 850,000 barrels per day of natural gas liquids extracted from natural gas streams."
Fractionation units are used to separate mixtures of extracted NGLs into individual pure components. The resulting products are used to manufacture a wide range of petrochemicals that are made into plastic resins, films and fibers, rubber, and fuel-blending components.
The UOP Russell fractionation plant is customized for the large capacity requirements of MarkWest, and it represents an expansion of UOP Russell's portfolio of pre-engineered fractionation products.
"In less than 40 weeks, Honeywell now can provide fractionation units for de-ethanizers up to 125,000 barrels per day and for depropanizers up to 60,000 barrels per day," Ranta said. "This allows customers to get onstream and begin reliably generating revenue even faster than before."
MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products. MarkWest operates natural gas gathering systems in six states. Its natural gas processing complexes remove the heavier and more valuable hydrocarbon components from natural gas. The company currently operates natural gas processing complexes in the Marcellus Shale, Utica Shale, Appalachia region, and Southwest region. MarkWest's assets include approximately 5.9 billion cubic feet per day of gathering capacity, 8 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.
Honeywell UOP (www.uop.com) is a leading international supplier and licensor of process technology, catalysts, adsorbents, equipment, and consulting services to the petroleum refining, petrochemical, and gas processing industries. Honeywell UOP is part of Honeywell's Performance Materials and Technologies strategic business group, which also includes Honeywell Process Solutions (www.honeywellprocess.com), a pioneer in automation control, instrumentation and services for the oil and gas, refining, petrochemical, chemical and other industries.
Honeywell (www.honeywell.com) is a Fortune 100 software-industrial company that delivers industry specific solutions that include aerospace and automotive products and services; control technologies for buildings, homes, and industry; and performance materials globally. Our technologies help everything from aircraft, cars, homes and buildings, manufacturing plants, supply chains, and workers become more connected to make our world smarter, safer, and more sustainable. For more news and information on Honeywell, please visit www.honeywell.com/newsroom.
View original content:http://www.prnewswire.com/news-releases/honeywell-to-provide-natural-gas-liquids-fractionation-plant-for-markwests-hopedale-plant-300596706.html
SOURCE Honeywell
FINDLAY, Ohio, Feb. 6, 2018 /PRNewswire/ -- On Tuesday, Feb. 13, Gary R. Heminger, the chairman and chief executive officer of Marathon Petroleum Corp. (NYSE: MPC) and MPLX LP (NYSE: MPLX), will deliver a presentation to investors and industry analysts at the Credit Suisse 2018 Energy Summit in Vail, Colorado.
Heminger's presentation is scheduled to begin at 8:35 a.m. MST (10:35 a.m. EST). The live webcast and archived presentation can be viewed on MPC's Investor Relations website, http://ir.marathonpetroleum.com, and MPLX's Investor Relations website, http://ir.mplx.com. The archived webcast and presentation support materials will be available for 14 days following Heminger's presentation.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. In addition, MPLX provides fuels distribution services to MPC and owns refining logistics assets consisting of tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping.
View original content with multimedia:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-and-mplx-lp-to-present-at-credit-suisse-energy-summit-300594515.html
SOURCE Marathon Petroleum Corp.; MPLX LP
FINDLAY, Ohio, Feb. 5, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) announced today that it has priced $5,500,000,000 in aggregate principal amount of unsecured senior notes in an underwritten public offering consisting of five series of senior notes:
The 2023 senior notes were offered at a price to the public of 99.931% of par. The 2028 senior notes were offered at a price to the public of 99.551% of par. The 2038 senior notes were offered at a price to the public of 98.811% of par. The 2048 senior notes were offered at a price to the public of 99.348% of par. The 2058 senior notes were offered at a price to the public of 99.289% of par.
MPLX intends to use the net proceeds from this offering to repay the principal amount and accrued interest on its $4.1 billion term loan borrowing made on Feb. 1, 2018, and to pay related fees and expenses. MPLX will use the remaining net proceeds of this offering, if any, to repay borrowings under its revolving credit facility and the intercompany loan agreement with its sponsor, Marathon Petroleum Corporation, and/or for general partnership purposes, which may include, from time to time, acquisitions, capital expenditures and the payment of distributions.
The closing of the senior notes offering is expected to occur on Feb. 8, 2018, subject to satisfaction of customary closing conditions.
Merrill Lynch, Pierce, Fenner & Smith Incorporated; Barclays Capital Inc.; and Mizuho Securities USA LLC are acting as joint global coordinators and book-running managers. J.P. Morgan Securities LLC; MUFG Securities Americas Inc.; Wells Fargo Securities, LLC; Citigroup Global Markets Inc.; RBC Capital Markets, LLC; BNP Paribas Securities Corp.; Goldman Sachs & Co. LLC; PNC Capital Markets LLC; Scotia Capital (USA) Inc.; SunTrust Robinson Humphrey, Inc.; TD Securities (USA) LLC; UBS Securities LLC; and U.S. Bancorp Investments, Inc. are acting as joint book-running managers.
This offering is being made only by means of a prospectus and related prospectus supplement, which may be obtained for free by visiting the SEC's website at http://www.sec.gov. Alternatively, copies may be obtained by contacting the following, who are acting as representatives of the underwriters:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
200 North College Street
NC1-004-03-43
Charlotte NC 28255-0001
Attn: Prospectus Department
Toll-free: 1-800-294-1322
E-mail: dg.prospectus_requests@baml.com
Barclays Capital Inc.
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, NY 11717
1-888-603-5847
Mizuho Securities USA LLC
320 Park Avenue, New York, NY 10022
Attn: Debt Capital Markets
Tel: 1-866-271-7403
J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
(212) 834-4533 (collect)
MUFG Securities Americas Inc.
1221 Avenue of the Americas, 6th Floor
New York, NY 10020
Attn: Capital Markets Group
1-877-649-6848
Wells Fargo Securities, LLC
Attention: WFS Customer Service
608 2nd Avenue South, Suite 1000
Minneapolis, MN 55402
Toll-Free: 1-800-645-3751
This news release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. In addition, MPLX provides fuels distribution services to MPC and owns refining logistics assets consisting of tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping.
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP ("MPLX") and Marathon Petroleum Corporation ("MPC"). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPLX and MPC, including strategic initiatives and our value creation plans. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the companies' control and are difficult to predict. Factors that could cause MPLX's actual results to differ materially from those implied in the forward-looking statements include: negative capital market conditions, including an increase of the current yield on common units, adversely affecting MPLX's ability to meet its distribution growth guidance; our ability to achieve the strategic and other objectives related to the strategic initiatives and other proposed transactions; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of MPLX's capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt on commercially reasonable terms, and the ability to successfully execute its business plans and growth strategy; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of MPC's obligations under MPLX's commercial agreements; modifications to earnings and distribution growth objectives; our ability to manage disruptions in credit markets or changes to our credit rating; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; changes to MPLX's capital budget; other risk factors inherent to MPLX's industry; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2016, filed with the Securities and Exchange Commission (SEC). Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: our ability to achieve the strategic and other objectives related to the strategic initiatives; our ability to manage disruptions in credit markets or changes to our credit rating; adverse changes in laws including with respect to tax and regulatory matters; changes to the expected construction costs and timing of projects; continued/further volatility in and/or degradation of market and industry conditions; the availability and pricing of crude oil and other feedstocks; slower growth in domestic and Canadian crude supply; the effects of the lifting of the U.S. crude oil export ban; completion of pipeline capacity to areas outside the U.S. Midwest; consumer demand for refined products; transportation logistics; the reliability of processing units and other equipment; MPC's ability to successfully implement growth opportunities; the impact of adverse market conditions affecting MPLX's midstream business; modifications to MPLX earnings and distribution growth objectives, and other risks described above with respect to MPLX; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or enforcement actions initiated thereunder; adverse results in litigation; other risk factors inherent to MPC's industry; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2016, filed with the SEC. In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here, in MPLX's Form 10-K or in MPC's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPLX's Form 10-K are available on the SEC website or by contacting MPLX's Investor Relations office. Copies of MPC's Form 10-K are available on the SEC website or by contacting MPC's Investor Relations office.
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SOURCE MPLX LP
FINDLAY, Ohio, Feb. 5, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) announced today that it has commenced an underwritten public offering of unsecured senior notes pursuant to an effective shelf registration statement on Form S-3 previously filed with the Securities and Exchange Commission (SEC). The actual terms of the unsecured senior notes, including principal amount, interest rate and maturity, will depend on market and other conditions.
MPLX intends to use the net proceeds from this offering to repay the principal amount and accrued interest on its $4.1 billion term loan borrowing made on Feb. 1, 2018, and to pay related fees and expenses. MPLX will use the remaining net proceeds of this offering, if any, to repay borrowings under its revolving credit facility and the intercompany loan agreement with its sponsor, Marathon Petroleum Corporation, and/or for general partnership purposes, which may include, from time to time, acquisitions, capital expenditures and the payment of distributions.
Merrill Lynch, Pierce, Fenner & Smith Incorporated; Barclays Capital Inc.; and Mizuho Securities USA LLC are acting as joint global coordinators and book-running managers. J.P. Morgan Securities LLC; MUFG Securities Americas Inc.; Wells Fargo Securities, LLC; Citigroup Global Markets Inc.; RBC Capital Markets, LLC; BNP Paribas Securities Corp.; Goldman Sachs & Co. LLC; PNC Capital Markets LLC; Scotia Capital (USA) Inc.; SunTrust Robinson Humphrey, Inc.; TD Securities (USA) LLC; UBS Securities LLC; and U.S. Bancorp Investments, Inc. are acting as joint book-running managers.
This offering will be made only by means of a prospectus and related prospectus supplement, which may be obtained for free by visiting the SEC's website at http://www.sec.gov. Alternatively, copies may be obtained by contacting the following, who are acting as representatives of the underwriters:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
200 North College Street
NC1-004-03-43
Charlotte NC 28255-0001
Attn: Prospectus Department
Toll-free: 1-800-294-1322
E-mail: dg.prospectus_requests@baml.com
Barclays Capital Inc.
c/o Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, NY 11717
1-888-603-5847
Mizuho Securities USA LLC
320 Park Avenue, New York, NY 10022
Attn: Debt Capital Markets
Tel: 1-866-271-7403
J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
(212) 834-4533 (collect)
MUFG Securities Americas Inc.
1221 Avenue of the Americas, 6th Floor
New York, NY 10020
Attn: Capital Markets Group
1-877-649-6848
Wells Fargo Securities, LLC
Attention: WFS Customer Service
608 2nd Avenue South, Suite 1000
Minneapolis, MN 55402
Toll-Free: 1-800-645-3751
This news release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. In addition, MPLX provides fuels distribution services to MPC and owns refining logistics assets consisting of tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping.
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP ("MPLX") and Marathon Petroleum Corporation ("MPC"). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPLX and MPC, including strategic initiatives and our value creation plans. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the companies' control and are difficult to predict. Factors that could cause MPLX's actual results to differ materially from those implied in the forward-looking statements include: negative capital market conditions, including an increase of the current yield on common units, adversely affecting MPLX's ability to meet its distribution growth guidance; our ability to achieve the strategic and other objectives related to the strategic initiatives and other proposed transactions; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of MPLX's capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt on commercially reasonable terms, and the ability to successfully execute its business plans and growth strategy; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of MPC's obligations under MPLX's commercial agreements; modifications to earnings and distribution growth objectives; our ability to manage disruptions in credit markets or changes to our credit rating; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; changes to MPLX's capital budget; other risk factors inherent to MPLX's industry; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2016, filed with the Securities and Exchange Commission (SEC). Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: our ability to achieve the strategic and other objectives related to the strategic initiatives; our ability to manage disruptions in credit markets or changes to our credit rating; adverse changes in laws including with respect to tax and regulatory matters; changes to the expected construction costs and timing of projects; continued/further volatility in and/or degradation of market and industry conditions; the availability and pricing of crude oil and other feedstocks; slower growth in domestic and Canadian crude supply; the effects of the lifting of the U.S. crude oil export ban; completion of pipeline capacity to areas outside the U.S. Midwest; consumer demand for refined products; transportation logistics; the reliability of processing units and other equipment; MPC's ability to successfully implement growth opportunities; the impact of adverse market conditions affecting MPLX's midstream business; modifications to MPLX earnings and distribution growth objectives, and other risks described above with respect to MPLX; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or enforcement actions initiated thereunder; adverse results in litigation; other risk factors inherent to MPC's industry; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2016, filed with the SEC. In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here, in MPLX's Form 10-K or in MPC's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPLX's Form 10-K are available on the SEC website or by contacting MPLX's Investor Relations office. Copies of MPC's Form 10-K are available on the SEC website or by contacting MPC's Investor Relations office.
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SOURCE MPLX LP
FINDLAY, Ohio, Feb. 1, 2018 /PRNewswire/ --
MPLX LP (NYSE: MPLX) today reported fourth-quarter 2017 net income attributable to MPLX of $238 million and full-year 2017 net income attributable to MPLX of $794 million.
MPLX achieved record financial results in the fourth-quarter and full-year 2017, reporting $1.2 billion in income from operations for the year. This record-setting performance was primarily driven by gathered, processed and fractionated volume growth, resulting in high plant utilization, as well as contributions from acquired logistics and storage assets.
MPLX achieved 12.1 percent distribution growth for 2017, in line with prior guidance and ended the year with strong full-year distribution coverage of 1.28 times and debt-to-pro forma adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 3.6 times. Higher earnings and cash flow, combined with a disciplined approach to capital investments, have increased the partnership's capacity to fund organic growth with debt and retained cash. As a result, there was no public equity issued in the fourth quarter.
MPLX and its sponsor, Marathon Petroleum Corp. (NYSE: MPC), announced that they are today closing the dropdown of refining logistics assets and fuels distribution services that are projected to generate approximately $1 billion in annual EBITDA as well as the exchange of MPC's general partner (GP) economic interests, including its incentive distribution rights (IDRs), for newly issued MPLX common (LP) units, eliminating the GP cash distribution requirements of the partnership.
"In 2017, MPLX delivered strong results with sequential earnings growth in all four quarters as we executed our strategy to grow the business through increased utilization of our existing assets; an impressive portfolio of organic projects; strategic third-party acquisitions; and strategic actions with our sponsor," said Gary R. Heminger, chairman and chief executive officer. "These actions have transformed MPLX, nearly doubling the partnership's earnings base and improving the partnership's cost of capital by permanently eliminating the IDR burden."
MPLX also announced its 2018 capital investment plan, which includes approximately $2.2 billion of organic growth capital and $190 million of maintenance capital. For the Gathering and Processing (G&P) segment, this robust organic growth plan includes the addition of 8 processing plants representing nearly 1.5 billion cubic feet per day of incremental processing capacity as well as 100,000 barrels per day of additional fractionation capacity in the prolific Marcellus, Utica and Permian basins.
In the Marcellus and Utica basins, MPLX expects to strengthen its position as the largest processor and fractionator with the addition of six gas processing plants in 2018, increasing the partnership's processing capacity by 21 percent to over 7 billion cubic feet per day. Additionally, the partnership expects to add 40,000 barrels per day of ethane fractionation capacity, and 60,000 barrels per day of propane-plus fractionation capacity.
In the Southwest, the partnership also plans to expand its footprint by adding nearly 300 million cubic feet per day of processing capacity. The Argo gas processing plant will be placed in service in the first quarter, doubling the partnership's processing capacity in the Permian basin. Construction of the Omega gas processing plant in the STACK shale play of Oklahoma is on schedule and expected to be complete by mid-2018.
In the Logistics and Storage (L&S) segment, work continues on the expansion of the Ozark and Wood River-to-Patoka pipeline systems, which connect Cushing, Oklahoma, to Patoka, Illinois. Both are targeted for completion in mid-2018. Additional 2018 projects include the completion of a butane cavern in Robinson, Illinois; tank expansions in Patoka, Illinois, and Texas City, Texas; and an expansion of the partnership's marine fleet. Work also continues on the refining logistics project to expand Galveston Bay refinery's export capacity, expected to be completed in 2020. These projects are expected to create additional fee-based revenue for the partnership while providing logistics solutions to MPC and other market participants.
The partnership plans to fund its 2018 organic growth capital plan with retained cash and debt, while maintaining strong coverage and an investment grade credit profile. MPLX does not anticipate the need to issue public equity to fund organic growth capital.
"After the closing of today's dropdown and the elimination of IDRs, MPLX is among the largest diversified master limited partnerships in the energy sector with a very competitive cost of capital," Heminger said. "With a robust portfolio of organic projects in the Marcellus, Utica, Permian and STACK, which are among the most prolific and economic shale plays in the country, and a diversified suite of logistics assets, we believe MPLX is extraordinarily well-positioned to deliver attractive long-term returns."
Financial Highlights
Three Months Ended |
Year Ended | ||||||||||||||
(In millions, except per unit and ratio data) |
2017 |
2016 |
2017 |
2016 | |||||||||||
Net income attributable to MPLX(a) |
$ |
238 |
$ |
133 |
$ |
794 |
$ |
233 |
|||||||
Adjusted EBITDA attributable to MPLX(b) |
569 |
391 |
2,004 |
1,419 |
|||||||||||
Net cash provided by operating activities |
569 |
516 |
1,907 |
1,491 |
|||||||||||
Distributable cash flow ("DCF")(b) |
445 |
318 |
1,628 |
1,140 |
|||||||||||
Distribution per common unit(c) |
0.6075 |
0.5200 |
2.2975 |
2.0500 |
|||||||||||
Distribution coverage ratio(d) |
1.24x |
1.25x |
1.28x |
1.23x |
|||||||||||
Growth capital expenditures(e) |
400 |
358 |
1,518 |
1,292 |
|||||||||||
(a) |
The year ended Dec. 31, 2016, includes pretax, non-cash impairments of $89 million related to an equity method investment and $130 million related to the goodwill established in connection with the MarkWest acquisition. |
(b) |
Non-GAAP measure calculated before the distribution to preferred units and excluding impairment charges. See reconciliation below. |
(c) |
Distributions declared by the board of directors of our general partner. |
(d) |
Non-GAAP measure. See calculation below. |
(e) |
Excludes non-affiliated joint-venture (JV) members' share of capital expenditures. See capital expenditures table below. |
Operational Highlights
Financial Position and Liquidity
As of Dec. 31, 2017, MPLX had $5 million in cash, $1.7 billion available through its bank revolving credit facility expiring in July 2022, and $114 million available through its credit facility with MPC. In 2017, MPLX received net proceeds from public equity issuances of approximately $473 million related to first- and second-quarter commitments under its at-the-market program. No additional common units were issued through this program in the third and fourth quarters.
The partnership's $1.9 billion of available liquidity and its access to the capital markets should provide it with sufficient flexibility to meet its day-to-day operational needs and continue investing in organic growth opportunities. The partnership's debt-to-pro forma adjusted EBITDA ratio was 3.6 times at Dec. 31, 2017. MPLX remains committed to maintaining an investment-grade credit profile.
Segment Results
Segment operating income attributable to MPLX LP |
|||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
Logistics and Storage(a) |
$ |
205 |
$ |
118 |
$ |
782 |
$ |
453 |
|||||||
Gathering and Processing(a) |
364 |
311 |
1,335 |
1,132 |
|||||||||||
(a) |
See reconciliation below for details. |
L&S segment operating income increased for the fourth quarter and full year of 2017, compared with the same periods in 2016. The full-year increase was primarily due to the acquisition of the Hardin Street Marine, MPLX Terminals, Hardin Street Transportation, Woodhaven Cavern, and Ozark Pipeline businesses.
G&P segment operating income increased for the fourth-quarter and full-year 2017, compared with the same periods in 2016. The fourth-quarter increase was predominantly due to record gathered, processed and fractionated volumes, which drove high utilization rates, and a benefit from increased product margins. The full-year increase was predominantly due to record gathered, processed and fractionated volumes resulting in strong utilization of existing and new facilities. The increase also included a benefit from higher product margins.
See reconciliation below for detail on items not allocable to or controllable by any individual segment, which are therefore excluded when evaluating segment performance.
Conference Call
At 11 a.m. EST today, MPLX will hold a conference call and webcast to discuss the reported results and provide an update on operations. Interested parties may listen to the conference call by dialing 1-888-606-5719 (confirmation number 6033306) or by visiting MPLX's website at http://www.mplx.com and clicking on the "2017 Fourth-Quarter and Full-Year Financial Results" link in the "News & Headlines" section. Replays of the conference call will be available on MPLX's website through Thursday, Feb. 15. Investor-related material will also be available online prior to the conference call and webcast at http://ir.mplx.com.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. Following today's dropdown, MPLX will provide fuels distribution services to MPC and own refining logistics assets consisting of tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping.
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, distributable cash flow (DCF) and distribution coverage ratio. The amount of adjusted EBITDA and DCF generated is considered by the board of directors of our general partner in approving the Partnership's cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) (benefit) provision for income taxes; (iii) amortization of deferred financing costs; (iv) non-cash equity-based compensation; (v) impairment expense; (vi) net interest and other financial costs; (vii) (income) loss from equity method investments; (viii) distributions from unconsolidated subsidiaries; (ix) distributions of cash received from equity method investments to MPC; (x) unrealized derivative losses; (xi) other adjustments to equity method investment distributions; and (xii) acquisition costs. In general, we define DCF as adjusted EBITDA adjusted for (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items.
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record the realized gain or loss of the contract.
Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures.
DCF is a financial performance measure used by management as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders.
Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between the partnership's financial operating performance and cash distribution capability. We define the distribution coverage ratio as the ratio of DCF attributable to GP and LP unitholders to total GP and LP distribution declared.
Forward-looking statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP ("MPLX") and Marathon Petroleum Corporation ("MPC"). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPLX and MPC, including strategic initiatives and our value creation plans. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the companies' control and are difficult to predict. Factors that could cause MPLX's actual results to differ materially from those implied in the forward-looking statements include: negative capital market conditions, including an increase of the current yield on common units, adversely affecting MPLX's ability to meet its distribution growth guidance; the ability to consummate the strategic initiatives discussed herein; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein and other proposed transactions; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of MPLX's capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt to fund anticipated dropdowns on commercially reasonable terms, and the ability to successfully execute its business plans and growth strategy; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of MPC's obligations under MPLX's commercial agreements; modifications to earnings and distribution growth objectives; our ability to manage disruptions in credit markets or changes to our credit rating; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; changes to MPLX's capital budget; other risk factors inherent to MPLX's industry; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2016, filed with the Securities and Exchange Commission (SEC). Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: the ability to consummate the strategic initiatives discussed herein; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein; our ability to manage disruptions in credit markets or changes to our credit rating; adverse changes in laws including with respect to tax and regulatory matters; changes to the expected construction costs and timing of projects; continued/further volatility in and/or degradation of market and industry conditions; the availability and pricing of crude oil and other feedstocks; slower growth in domestic and Canadian crude supply; the effects of the lifting of the U.S. crude oil export ban; completion of pipeline capacity to areas outside the U.S. Midwest; consumer demand for refined products; transportation logistics; the reliability of processing units and other equipment; MPC's ability to successfully implement growth opportunities; the impact of adverse market conditions affecting MPLX's midstream business; modifications to MPLX earnings and distribution growth objectives, and other risks described above with respect to MPLX; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or enforcement actions initiated thereunder; adverse results in litigation; other risk factors inherent to MPC's industry; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2016, filed with the SEC. In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here, in MPLX's Form 10-K or in MPC's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of MPC's Form 10-K are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office.
Condensed Results of Operations (unaudited) |
|||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
(In millions, except per unit data) |
2017 |
2016 |
2017 |
2016 | |||||||||||
Revenues and other income: |
|||||||||||||||
Operating revenue |
$ |
657 |
$ |
504 |
$ |
2,322 |
$ |
1,829 |
|||||||
Operating revenue - related parties |
355 |
326 |
1,369 |
1,182 |
|||||||||||
Income (loss) from equity method investments |
49 |
(2) |
78 |
(74) |
|||||||||||
Other income |
24 |
20 |
98 |
92 |
|||||||||||
Total revenues and other income |
1,085 |
848 |
3,867 |
3,029 |
|||||||||||
Costs and expenses: |
|||||||||||||||
Operating expenses |
375 |
278 |
1,241 |
959 |
|||||||||||
Operating expenses - related parties |
126 |
102 |
457 |
389 |
|||||||||||
Depreciation and amortization |
168 |
153 |
683 |
591 |
|||||||||||
Impairment expense |
— |
— |
— |
130 |
|||||||||||
General and administrative expenses |
67 |
55 |
241 |
227 |
|||||||||||
Other taxes |
14 |
13 |
54 |
50 |
|||||||||||
Total costs and expenses |
750 |
601 |
2,676 |
2,346 |
|||||||||||
Income from operations |
335 |
247 |
1,191 |
683 |
|||||||||||
Interest and other financial costs |
96 |
65 |
354 |
261 |
|||||||||||
Income before income taxes |
239 |
182 |
837 |
422 |
|||||||||||
(Benefit) provision for income taxes |
(2) |
— |
1 |
(12) |
|||||||||||
Net income |
241 |
182 |
836 |
434 |
|||||||||||
Less: Net income (loss) attributable to noncontrolling interests |
3 |
(1) |
6 |
2 |
|||||||||||
Less: Net income attributable to Predecessor(a) |
— |
50 |
36 |
199 |
|||||||||||
Net income attributable to MPLX LP |
238 |
133 |
794 |
233 |
|||||||||||
Less: Preferred unit distributions |
16 |
16 |
65 |
41 |
|||||||||||
Less: General partner's interest in net income attributable to MPLX LP |
96 |
55 |
318 |
191 |
|||||||||||
Limited partners' interest in net income attributable to MPLX LP |
$ |
126 |
$ |
62 |
$ |
411 |
$ |
1 |
|||||||
Per Unit Data |
|||||||||||||||
Net income attributable to MPLX LP per limited partner unit: |
|||||||||||||||
Common - basic |
$ |
0.31 |
$ |
0.17 |
$ |
1.07 |
$ |
— |
|||||||
Common - diluted |
0.31 |
0.17 |
1.06 |
— |
|||||||||||
Weighted average limited partner units outstanding: |
|||||||||||||||
Common units – basic |
407 |
351 |
385 |
331 |
|||||||||||
Common units – diluted |
407 |
356 |
388 |
338 |
|||||||||||
(a) |
The inland marine business acquired on March 31, 2016, and the pipeline, storage and terminals businesses acquired on March 1, 2017 (collectively with inland marine business, "Predecessor"). |
Select Financial Statistics (unaudited) |
|||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
(In millions, except ratio data) |
2017 |
2016 |
2017 |
2016 | |||||||||||
Distribution declared |
|||||||||||||||
Common units (LP) - public |
$ |
175 |
$ |
140 |
$ |
656 |
$ |
533 |
|||||||
Common units - MPC |
58 |
45 |
210 |
159 |
|||||||||||
Common units - General partner (GP) |
113 |
— |
128 |
— |
|||||||||||
GP units - MPC |
— |
5 |
18 |
18 |
|||||||||||
Incentive distribution rights - MPC |
— |
52 |
211 |
187 |
|||||||||||
Total GP and LP distribution declared |
346 |
242 |
1,223 |
897 |
|||||||||||
Redeemable preferred units(a) |
16 |
16 |
65 |
41 |
|||||||||||
Total distribution declared |
$ |
362 |
$ |
258 |
$ |
1,288 |
$ |
938 |
|||||||
Distribution coverage ratio(b) |
1.24x |
1.25x |
1.28x |
1.23x | |||||||||||
Cash Flow Data |
|||||||||||||||
Net cash flow provided by (used in): |
|||||||||||||||
Operating activities |
$ |
569 |
$ |
516 |
$ |
1,907 |
$ |
1,491 |
|||||||
Investing activities |
(470) |
(521) |
(2,307) |
(1,413) |
|||||||||||
Financing activities |
(97) |
31 |
171 |
113 |
|||||||||||
Other Financial Data |
|||||||||||||||
Adjusted EBITDA attributable to MPLX LP(c) |
$ |
569 |
$ |
391 |
$ |
2,004 |
$ |
1,419 |
|||||||
DCF attributable to GP and LP unitholders(c) |
429 |
302 |
1,563 |
1,099 |
|||||||||||
(a) |
The preferred units are considered redeemable securities due to the existence of redemption provisions upon a deemed liquidation event which is outside our control. |
(b) |
DCF attributable to GP and LP unitholders divided by total GP and LP distribution declared. |
(c) |
Non-GAAP measure. See reconciliation below. |
Select Balance Sheet Data (unaudited) |
|||||||
(In millions, except ratio data) |
Dec. 31, 2017 |
Dec. 31, 2016 | |||||
Cash and cash equivalents |
$ |
5 |
$ |
234 |
|||
Total assets |
19,500 |
17,509 |
|||||
Total debt(a) |
7,332 |
4,423 |
|||||
Redeemable preferred units |
1,000 |
1,000 |
|||||
Total equity |
9,973 |
11,110 |
|||||
Consolidated total debt to LTM pro forma adjusted EBITDA(b) |
3.6x |
2.9x |
|||||
Partnership units outstanding: |
|||||||
GP units |
8 |
7 |
|||||
Class B units(c) |
— |
4 |
|||||
MPC-held common units |
95 |
86 |
|||||
GP-held common units |
23 |
— |
|||||
Public common units |
289 |
271 |
|||||
(a) |
Total debt includes $386 million of outstanding intercompany borrowings classified in current liabilities as of Dec. 31, 2017. |
(b) |
Calculated using face value total debt and LTM adjusted EBITDA, which is pro forma for acquisitions. Face value total debt includes approximately $416 million and $435 million of unamortized discount and debt issuance costs as of Dec 31, 2017, and 2016, respectively. |
(c) |
Class B units were issued to and were held by M&R MWE Liberty LLC and certain of its affiliates, an affiliate of The Energy & Minerals Group. The Class B units converted into common units at a rate of 1.09 common units and received $6.20 in cash for each Class B unit in two equal installments, on July 1, 2016, and 2017. Class B units did not receive distributions. |
Operating Statistics (unaudited) |
|||||||||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||||||||
2017 |
2016 |
% |
2017 |
2016 |
% | ||||||||||||||||
Logistics and Storage |
|||||||||||||||||||||
Pipeline throughput (thousands of barrels |
|||||||||||||||||||||
Crude oil pipelines |
2,041 |
1,577 |
29 |
% |
1,936 |
1,643 |
18 |
% | |||||||||||||
Product pipelines |
1,186 |
991 |
20 |
% |
1,085 |
990 |
10 |
% | |||||||||||||
Total pipelines |
3,227 |
2,568 |
26 |
% |
3,021 |
2,633 |
15 |
% | |||||||||||||
Average tariff rates ($ per barrel) |
|||||||||||||||||||||
Crude oil pipelines |
$ |
0.55 |
$ |
0.57 |
(4) |
% |
$ |
0.56 |
$ |
0.57 |
(2) |
% | |||||||||
Product pipelines |
0.73 |
0.71 |
3 |
% |
0.74 |
0.68 |
9 |
% | |||||||||||||
Total pipelines |
0.62 |
0.62 |
— |
% |
0.63 |
0.61 |
3 |
% | |||||||||||||
Terminal throughput (thousands of barrels |
1,497 |
1,496 |
— |
% |
1,477 |
1,505 |
(2) |
% | |||||||||||||
Barges at period-end |
232 |
222 |
5 |
% |
232 |
222 |
5 |
% | |||||||||||||
Towboats at period-end |
18 |
18 |
— |
% |
18 |
18 |
— |
% | |||||||||||||
Gathering and Processing |
|||||||||||||||||||||
Gathering throughput (mmcf/d)(a) |
|||||||||||||||||||||
Marcellus Operations |
1,121 |
874 |
28 |
% |
1,004 |
910 |
10 |
% | |||||||||||||
Utica Operations |
1,571 |
922 |
70 |
% |
1,192 |
932 |
28 |
% | |||||||||||||
Southwest Operations |
1,489 |
1,368 |
9 |
% |
1,412 |
1,433 |
(1) |
% | |||||||||||||
Total gathering throughput |
4,181 |
3,164 |
32 |
% |
3,608 |
3,275 |
10 |
% | |||||||||||||
Natural gas processed (mmcf/d)(a) |
|||||||||||||||||||||
Marcellus Operations |
4,203 |
3,341 |
26 |
% |
3,885 |
3,210 |
21 |
% | |||||||||||||
Utica Operations |
991 |
1,084 |
(9) |
% |
984 |
1,072 |
(8) |
% | |||||||||||||
Southwest Operations |
1,373 |
1,277 |
8 |
% |
1,326 |
1,226 |
8 |
% | |||||||||||||
Southern Appalachian Operations |
261 |
268 |
(3) |
% |
265 |
253 |
5 |
% | |||||||||||||
Total natural gas processed |
6,828 |
5,970 |
14 |
% |
6,460 |
5,761 |
12 |
% | |||||||||||||
C2 + NGLs fractionated (mbpd)(a) |
|||||||||||||||||||||
Marcellus Operations |
350 |
276 |
27 |
% |
320 |
260 |
23 |
% | |||||||||||||
Utica Operations |
39 |
38 |
3 |
% |
40 |
42 |
(5) |
% | |||||||||||||
Southwest Operations |
21 |
19 |
11 |
% |
20 |
18 |
11 |
% | |||||||||||||
Southern Appalachian Operations |
13 |
13 |
— |
% |
14 |
15 |
(7) |
% | |||||||||||||
Total C2 + NGLs fractionated |
423 |
346 |
22 |
% |
394 |
335 |
18 |
% | |||||||||||||
(a) |
Includes amounts related to unconsolidated equity method investments on a 100 percent basis. |
Reconciliation of Segment Operating Income |
|||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
L&S segment operating income attributable to MPLX LP |
$ |
205 |
$ |
118 |
$ |
782 |
$ |
453 |
|||||||
G&P segment operating income attributable to MPLX LP(a) |
364 |
311 |
1,335 |
1,132 |
|||||||||||
Segment portion attributable to equity affiliates |
(53) |
(43) |
(178) |
(173) |
|||||||||||
Segment portion attributable to Predecessor(b) |
— |
73 |
53 |
289 |
|||||||||||
Income (loss) from equity method investments |
49 |
(2) |
78 |
(74) |
|||||||||||
Other income - related parties |
13 |
11 |
51 |
40 |
|||||||||||
Unrealized derivative losses(c) |
(8) |
(13) |
(6) |
(36) |
|||||||||||
Depreciation and amortization |
(168) |
(153) |
(683) |
(591) |
|||||||||||
Impairment expense |
— |
— |
— |
(130) |
|||||||||||
General and administrative expenses |
(67) |
(55) |
(241) |
(227) |
|||||||||||
Income from operations |
$ |
335 |
$ |
247 |
$ |
1,191 |
$ |
683 |
|||||||
(a) |
All Partnership-operated, non-wholly owned subsidiaries are treated as if they are consolidated. |
(b) |
The operating income of the Predecessor is excluded from segment operating income attributable to MPLX LP prior to the acquisition dates. |
(c) |
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
Reconciliation of Adjusted EBITDA Attributable to
|
|||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
Net income |
$ |
241 |
$ |
182 |
$ |
836 |
$ |
434 |
|||||||
Depreciation and amortization |
168 |
153 |
683 |
591 |
|||||||||||
(Benefit) provision for income taxes |
(2) |
— |
1 |
(12) |
|||||||||||
Amortization of deferred financing costs |
15 |
12 |
53 |
46 |
|||||||||||
Non-cash equity-based compensation |
5 |
1 |
15 |
10 |
|||||||||||
Impairment expense |
— |
— |
— |
130 |
|||||||||||
Net interest and other financial costs |
81 |
53 |
301 |
215 |
|||||||||||
(Income) loss from equity method investments |
(49) |
2 |
(78) |
74 |
|||||||||||
Distributions from unconsolidated subsidiaries |
105 |
37 |
241 |
148 |
|||||||||||
Distributions of cash received from equity method |
(18) |
— |
(31) |
— |
|||||||||||
Other adjustments to equity method investment |
13 |
2 |
21 |
2 |
|||||||||||
Unrealized derivative losses(a) |
8 |
13 |
6 |
36 |
|||||||||||
Acquisition costs |
5 |
— |
11 |
(1) |
|||||||||||
Adjusted EBITDA |
572 |
455 |
2,059 |
1,673 |
|||||||||||
Adjusted EBITDA attributable to noncontrolling |
(3) |
— |
(8) |
(3) |
|||||||||||
Adjusted EBITDA attributable to Predecessor(b) |
— |
(64) |
(47) |
(251) |
|||||||||||
Adjusted EBITDA attributable to MPLX LP |
569 |
391 |
2,004 |
1,419 |
|||||||||||
Deferred revenue impacts |
8 |
8 |
33 |
16 |
|||||||||||
Net interest and other financial costs |
(81) |
(53) |
(301) |
(215) |
|||||||||||
Maintenance capital expenditures |
(44) |
(26) |
(103) |
(84) |
|||||||||||
Equity method investment capital expenditures |
(9) |
(2) |
(13) |
(3) |
|||||||||||
Other |
2 |
— |
6 |
(1) |
|||||||||||
Portion of DCF adjustments attributable to |
— |
— |
2 |
8 |
|||||||||||
DCF attributable to MPLX LP |
445 |
318 |
1,628 |
1,140 |
|||||||||||
Preferred unit distributions |
(16) |
(16) |
(65) |
(41) |
|||||||||||
DCF attributable to GP and LP unitholders |
$ |
429 |
$ |
302 |
$ |
1,563 |
$ |
1,099 |
|||||||
(a) |
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
(b) |
The adjusted EBITDA and DCF adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF prior to the acquisition dates. |
Reconciliation of Adjusted EBITDA Attributable to |
|||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
Net cash provided by operating activities |
$ |
569 |
$ |
516 |
$ |
1,907 |
$ |
1,491 |
|||||||
Changes in working capital items |
(106) |
(135) |
(147) |
(76) |
|||||||||||
All other, net |
15 |
2 |
(28) |
(16) |
|||||||||||
Non-cash equity-based compensation |
5 |
1 |
15 |
10 |
|||||||||||
Net gain on disposal of assets |
(1) |
— |
— |
1 |
|||||||||||
Current income taxes |
1 |
1 |
2 |
5 |
|||||||||||
Net interest and other financial costs |
81 |
53 |
301 |
215 |
|||||||||||
Asset retirement expenditures |
— |
2 |
2 |
6 |
|||||||||||
Unrealized derivative losses(a) |
8 |
13 |
6 |
36 |
|||||||||||
Acquisition costs |
5 |
— |
11 |
(1) |
|||||||||||
Distributions of cash received from equity method |
(18) |
— |
(31) |
— |
|||||||||||
Other adjustments to equity method investment |
13 |
2 |
21 |
2 |
|||||||||||
Adjusted EBITDA |
572 |
455 |
2,059 |
1,673 |
|||||||||||
Adjusted EBITDA attributable to noncontrolling |
(3) |
— |
(8) |
(3) |
|||||||||||
Adjusted EBITDA attributable to Predecessor(b) |
— |
(64) |
(47) |
(251) |
|||||||||||
Adjusted EBITDA attributable to MPLX LP |
569 |
391 |
2,004 |
1,419 |
|||||||||||
Deferred revenue impacts |
8 |
8 |
33 |
16 |
|||||||||||
Net interest and other financial costs |
(81) |
(53) |
(301) |
(215) |
|||||||||||
Maintenance capital expenditures |
(44) |
(26) |
(103) |
(84) |
|||||||||||
Equity method investment capital expenditures paid |
(9) |
(2) |
(13) |
(3) |
|||||||||||
Other |
2 |
— |
6 |
(1) |
|||||||||||
Portion of DCF adjustments attributable to |
— |
— |
2 |
8 |
|||||||||||
DCF attributable to MPLX LP |
445 |
318 |
1,628 |
1,140 |
|||||||||||
Preferred unit distributions |
(16) |
(16) |
(65) |
(41) |
|||||||||||
DCF attributable to GP and LP unitholders |
$ |
429 |
$ |
302 |
$ |
1,563 |
$ |
1,099 |
|||||||
(a) |
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
(b) |
The adjusted EBITDA and DCF adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF prior to the acquisition dates. |
Capital Expenditures (unaudited) |
|||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
Capital Expenditures(a): |
|||||||||||||||
Maintenance |
$ |
44 |
$ |
26 |
$ |
103 |
$ |
84 |
|||||||
Growth |
379 |
324 |
1,381 |
1,213 |
|||||||||||
Total capital expenditures |
423 |
350 |
1,484 |
1,297 |
|||||||||||
Less: Increase (decrease) in capital accruals |
16 |
(22) |
71 |
(22) |
|||||||||||
Asset retirement expenditures |
— |
2 |
2 |
6 |
|||||||||||
Additions to property, plant and equipment |
407 |
370 |
1,411 |
1,313 |
|||||||||||
Capital expenditures of unconsolidated subsidiaries(b) |
78 |
37 |
384 |
131 |
|||||||||||
Total gross capital expenditures |
485 |
407 |
1,795 |
1,444 |
|||||||||||
Less: Joint venture partner contributions |
37 |
19 |
169 |
64 |
|||||||||||
Total capital expenditures, net |
448 |
388 |
1,626 |
1,380 |
|||||||||||
Less: Maintenance capital |
48 |
30 |
108 |
88 |
|||||||||||
Total growth capital expenditures |
$ |
400 |
$ |
358 |
$ |
1,518 |
$ |
1,292 |
|||||||
(a) |
Includes capital expenditures of the Predecessor for all periods presented. |
(b) |
Capital expenditures includes amounts related to unconsolidated, partnership operated subsidiaries. |
View original content with multimedia:http://www.prnewswire.com/news-releases/mplx-lp-reports-fourth-quarter-and-full-year-2017-financial-results-300591816.html
SOURCE MPLX LP
FINDLAY, Ohio, Feb. 1, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) today reported 2017 fourth-quarter earnings of $2.02 billion, or $4.09 per diluted share, compared with $227 million, or $0.43 per diluted share, in the fourth quarter of 2016.
Earnings were $3.43 billion, or $6.70 per diluted share, for the full-year 2017, compared with $1.17 billion, or $2.21 per diluted share, for the full-year 2016.
During the fourth quarter, the Tax Cuts and Jobs Act significantly revised U.S. corporate income tax law by, among other things, reducing the corporate income tax rate to 21 percent. Earnings for the fourth quarter and full year include a tax benefit of approximately $1.5 billion (or $3.04 and $2.93 per diluted share for the fourth quarter and full year, respectively) as a result of remeasuring certain net deferred tax liabilities using the lower corporate tax rate.
"We delivered a strong operational and financial performance across the business," said Gary R. Heminger, chairman and chief executive officer. "We provided outstanding value for our investors in 2017. The Midstream and Speedway segments each achieved a record full-year performance, which, combined with a substantial increase in earnings from the Refining and Marketing segment, fully demonstrates the robust earnings power of MPC's integrated model."
MPC's Midstream segment, which primarily reflects the results of MPLX LP (NYSE: MPLX), reported record financial results in the fourth quarter and full-year 2017, contributing $1.34 billion in segment income from operations for the year. This record-setting performance was largely driven by gathered, processed and fractionated volume growth, resulting in high plant utilization.
Speedway continued its exceptional performance, finishing the year with segment income of $732 million, a record when excluding the favorable lower of cost or market inventory adjustment (LCM) reversal recorded in 2016, building upon several years of solid segment earnings growth. In 2017, Speedway delivered strong earnings from light product sales, an increase of 1.2 percent in same-store merchandise sales, lower operating expenses and contributions from its travel center joint venture. Speedway's sixth straight year of record segment earnings before interest, taxes, depreciation and amortization (EBITDA) and second consecutive year of approximately $1 billion of annual EBITDA reinforces the strategic value of this high-performing, stable cash-flow business.
The Refining and Marketing segment reported full-year segment income from operations of $2.32 billion, a $964 million increase over 2016. Results were largely driven by higher LLS-based blended crack spreads and high utilization rates. Numerous monthly process unit and production records were achieved in both the fourth quarter and throughout the year, including monthly records for crude throughput and gasoline and distillate production. As a result, MPC is now the second-largest refiner in the U.S. on a crude-throughput basis and Galveston Bay and Garyville are the second- and third-largest refineries, respectively.
"February marks the 5-year anniversary of our acquisition of the Galveston Bay refinery. The accomplishments during this time are impressive," Heminger said. "Since 2013, we have dramatically improved the environmental and safety performance of the refinery and advanced operational excellence, all while achieving lower operating expenses. Some of the accomplishments include an 80 percent reduction in environmental incidents and 33 monthly process-unit rate records in 2017 alone, while cutting unplanned downtime in half and lowering operating expenses nearly 25 percent."
MPC and its sponsored master limited partnership, MPLX, announced that they are today closing the dropdown of refining logistics assets and fuels distribution services as well as the exchange of MPC's general partner (GP) economic interests for newly issued MPLX common (LP) units, completing the previously announced strategic actions.
During 2017, MPC returned over $3 billion of capital to MPC shareholders through dividends and share repurchases, which were supported in part by proceeds from dropdown transactions during the year. The company plans further return of capital with the after-tax cash proceeds from today's dropdown transaction, in a manner consistent with maintaining its current investment grade credit profile.
On Jan. 29, the MPC board of directors announced a 15 percent increase in the quarterly dividend, to $0.46 per share. This represents a 26.5 percent compound annual growth rate in the dividend since becoming an independent company six years ago, demonstrating continued confidence in the cash-flow generation of the business.
"Building on 2017's strong operational and financial results, we are pleased to complete our strategic actions, adding to our long and successful track record of taking steps to create long-term value for our shareholders," Heminger said. "We have tremendous momentum going into 2018 and are encouraged by the high-returning investment opportunities across the business."
MPC also announced its 2018 capital investment plan, which remains focused on strengthening the sustained earnings power of its businesses through growth and margin-enhancing investments across the enterprise. MPC's investment plan, excluding MPLX, totals approximately $1.6 billion.
The capital plan for the Refining and Marketing segment is $950 million. Of that amount, approximately $400 million is growth capital focused on optimizing the Galveston Bay refinery, upgrading residual fuel oils to higher-value products, maximizing distillate production and expanding light product placement flexibility, including exports. Sustaining capital is approximately $550 million, which includes approximately $210 million related to regulatory spending for Tier 3 gasoline.
Speedway's capital plan is $530 million, a $150 million increase from last year. This significant increase in Speedway's capital allocation is primarily targeted for construction of new store locations as well as remodeling and rebuilding existing locations, consistent with MPC's commitment to aggressively grow the business and build upon its industry-leading position.
The capital plan also includes approximately $100 million to support corporate activities and the remaining assets in MPC's Midstream segment, excluding MPLX.
MPLX announced its 2018 capital investment plan, which includes approximately $2.2 billion of organic growth capital and $190 million of maintenance capital. This robust organic growth plan includes the addition of 8 processing plants representing nearly 1.5 billion cubic feet per day of incremental processing capacity as well as 100,000 barrels per day of additional fractionation capacity in the prolific Marcellus, Utica and Permian basins. The remaining growth capital is planned for the development of various crude oil and refined products infrastructure projects, including the export-capacity expansion project at the Galveston Bay refinery.
"Looking forward, we believe the global and U.S. macro picture remains solid and expect that good underlying economic growth will continue to support strong demand for our products. Export markets, which have been important to the high utilization of our refineries, are also expected to remain robust. Recent tax legislation complements our outlook and stimulates further investment in the business," Heminger said. "As the nation's second-largest refiner, the sponsor of one of the largest diversified master limited partnerships in MPLX, and an industry leader in retail through our Speedway business, we are uniquely positioned to deliver compelling and sustainable returns for our investors."
Segment Results
Total income from operations was $1.12 billion in the fourth quarter of 2017 and $3.97 billion for full-year 2017, compared with $553 million in the fourth quarter of 2016 and $2.38 billion for full-year 2016.
Three Months Ended |
Twelve Months Ended | ||||||||||||||
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
Income from Operations by Segment |
|||||||||||||||
Refining & Marketing(a)(b) |
$ |
732 |
$ |
166 |
$ |
2,321 |
$ |
1,357 |
|||||||
Speedway(b) |
149 |
165 |
732 |
734 |
|||||||||||
Midstream(a) |
343 |
296 |
1,339 |
1,048 |
|||||||||||
Items not allocated to segments: |
|||||||||||||||
Corporate and other unallocated items(a) |
(114) |
(74) |
(365) |
(268) |
|||||||||||
Pension settlement expenses |
(50) |
— |
(52) |
(7) |
|||||||||||
Litigation |
57 |
— |
(29) |
— |
|||||||||||
Impairments |
2 |
— |
23 |
(486) |
|||||||||||
Income from operations |
$ |
1,119 |
$ |
553 |
$ |
3,969 |
$ |
2,378 |
(a) |
In the first quarter of 2017, segment reporting was revised in connection with the contribution of certain terminal, pipeline and storage assets to MPLX. The results related to these assets are now presented in the Midstream segment. Previously, these results were reported in the Refining & Marketing segment. The results for the pipeline and storage assets were recast effective Jan. 1, 2015, and the results for the terminal assets were recast effective April 1, 2016. Prior to these dates these assets were not considered businesses and therefore there are no financial results from which to recast segment results. |
(b) |
Due to increased refined product prices during the second quarter of 2016, the company reversed its lower of cost or market inventory valuation reserve resulting in a $370 million non-cash benefit to income from operations for the full-year 2016, which increased Refining & Marketing and Speedway segment results by $345 million and $25 million, respectively. |
Refining & Marketing
Refining & Marketing (R&M) segment income from operations was $732 million in the fourth quarter of 2017 and $2.32 billion for full-year 2017, compared with $166 million and $1.36 billion in the fourth quarter of 2016 and full-year 2016, respectively.
The increase in quarter-over-quarter segment results was primarily a result of a $1.81 per barrel increase in the R&M margin. This favorable effect was primarily due to higher blended crack spreads and utilization rates as well as the widening of the West Texas Intermediate (WTI) / Light Louisiana Sweet (LLS) crude oil differential. The U.S. Gulf Coast and Chicago LLS blended 6-3-2-1 crack spread increased to $9.75 per barrel in the fourth quarter of 2017 from $7.39 per barrel in the fourth quarter of 2016. These favorable effects were partially offset by less favorable product price realizations relative to the spot market prices used in the LLS blended crack spread. Refinery throughputs exceeded 2 million barrels per day in the fourth quarter and crude oil capacity utilization was 101 percent in the fourth quarter of 2017 as compared to 93 percent in the fourth quarter of 2016.
Excluding the $345 million LCM benefit recognized in 2016, the increase in segment results for full-year 2017 compared with full-year 2016 primarily resulted from higher LLS crack spreads in both the U.S. Gulf Coast and Chicago markets. The LLS blended crack spread for the full-year 2017 increased to $9.84 per barrel from $6.96 per barrel in 2016. These favorable effects were partially offset by less favorable product price realizations as compared to the spot market prices used in the LLS blended crack spread.
Speedway
Speedway segment income from operations was $149 million in the fourth quarter of 2017 and $732 million for full-year 2017, compared with $165 million in the fourth quarter of 2016 and $734 million for full-year 2016, which includes a $25 million LCM benefit.
The decrease in quarter-over-quarter segment results was primarily due to higher operating expenses and lower merchandise margin partially offset by an increase in the light product margin. Speedway's light product margin increased to 17.72 cents per gallon in the fourth quarter of 2017 from 16.17 cents per gallon in the fourth quarter of 2016.
Excluding the $25 million LCM benefit recognized in 2016, the increase in segment results for the full-year 2017 compared to full-year 2016 was primarily due to contributions from its travel center joint venture formed in the fourth quarter 2016 and lower operating expense partially offset by lower merchandise margin and lower gains from asset sales.
Midstream
Midstream segment income from operations, which primarily reflects the results of MPLX's operations on a 100 percent basis, was $343 million in the fourth quarter of 2017 and $1.34 billion for full-year 2017, compared with $296 million and $1.05 billion for the fourth quarter and full-year 2016, respectively. The increases in segment results for the fourth quarter and full year of 2017 compared with respective periods in 2016 were primarily due to higher natural gas and NGL gathering, processing and fractionating volumes and changes in natural gas and NGL prices. Segment results also benefited from the first-quarter 2017 acquisitions of the Ozark Pipeline and our ownership interest in the Bakken Pipeline system.
Items Not Allocated to Segments
Corporate and other unallocated expenses of $114 million in the fourth quarter of 2017 and $365 million for the full-year 2017 compared with $74 million and $268 million for the full-year 2016. The increases for the quarter and full year were due to higher unallocated corporate costs and increases in employee-related expenses and corporate costs.
Strong Financial Position and Liquidity
On Dec. 31, 2017, the company had $3 billion in cash and cash equivalents, excluding MPLX's cash and cash equivalents of $5 million, $2.5 billion available under a revolving credit agreement, $1 billion available under a 364-day bank revolving credit facility and approximately $750 million available under its $750 million trade receivables securitization facility. The company's liquidity should provide it with sufficient flexibility to meet its day-to-day operational needs and continue its balanced approach to investing in the business and returning capital to shareholders. The company remains committed to maintaining an investment-grade credit profile.
Conference Call
At 9 a.m. EST today, MPC will hold a conference call and webcast to discuss the reported results and provide an update on company operations. Interested parties may listen to the conference call by dialing 1-888-989-4720 (confirmation #4852094) or by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2017 Fourth-Quarter and Full-Year Financial Results" link. Replays of the conference call will be available on the company's website through Thursday, Feb. 15. Financial information, including the earnings release and other investor-related material, will also be available online prior to the conference call and webcast at http://ir.marathonpetroleum.com in the Quarterly Investor Packet and Earnings Capsule.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
References to Earnings
References to earnings mean net income attributable to MPC from the statements of income. Unless otherwise indicated, references to earnings and earnings per share are MPC's share after excluding amounts attributable to noncontrolling interests.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation ("MPC") and MPLX LP ("MPLX"). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPC and MPLX, including strategic initiatives and our value creation plans. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the companies' control and are difficult to predict. Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: the ability to consummate the strategic initiatives discussed herein; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein; our ability to manage disruptions in credit markets or changes to our credit rating; adverse changes in laws including with respect to tax and regulatory matters; changes to the expected construction costs and timing of projects; continued/further volatility in and/or degradation of market and industry conditions; the availability and pricing of crude oil and other feedstocks; slower growth in domestic and Canadian crude supply; the effects of the lifting of the U.S. crude oil export ban; completion of pipeline capacity to areas outside the U.S. Midwest; consumer demand for refined products; transportation logistics; the reliability of processing units and other equipment; MPC's ability to successfully implement growth opportunities; the impact of adverse market conditions affecting MPC's and MPLX's midstream businesses; modifications to MPLX earnings and distribution growth objectives, and other risks described below with respect to MPLX; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or enforcement actions initiated thereunder; adverse results in litigation; changes to MPC's capital budget; other risk factors inherent to MPC's industry; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2016, filed with Securities and Exchange Commission (SEC). Factors that could cause MPLX's actual results to differ materially from those implied in the forward-looking statements include: negative capital market conditions, including an increase of the current yield on common units, adversely affecting MPLX's ability to meet its distribution growth guidance; the ability to consummate the strategic initiatives discussed herein; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein and other proposed transactions; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of MPLX's capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt to fund anticipated dropdowns on commercially reasonable terms, and the ability to successfully execute its business plans and growth strategy; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of MPC's obligations under MPLX's commercial agreements; modifications to earnings and distribution growth objectives; our ability to manage disruptions in credit markets or changes to our credit rating; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; changes to MPLX's capital budget; other risk factors inherent to MPLX's industry; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2016, filed with the SEC. In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here, in MPC's Form 10-K or in MPLX's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPC's Form 10-K are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.
Consolidated Statements of Income (Unaudited) | |||||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||||
(In millions, except per-share data) |
2017 |
2016 |
2017 |
2016 | |||||||||||
Revenues and other income: |
|||||||||||||||
Sales and other operating revenues (including consumer |
$ |
20,884 |
$ |
17,098 |
$ |
74,104 |
$ |
63,277 |
|||||||
Sales to related parties |
171 |
57 |
629 |
62 |
|||||||||||
Income (loss) from equity method investments |
82 |
51 |
306 |
(185) |
|||||||||||
Net gain (loss) on disposal of assets |
(2) |
6 |
10 |
32 |
|||||||||||
Other income |
101 |
72 |
320 |
178 |
|||||||||||
Total revenues and other income |
21,236 |
17,284 |
75,369 |
63,364 |
|||||||||||
Costs and expenses: |
|||||||||||||||
Cost of revenues (excludes items below) |
16,847 |
13,695 |
58,760 |
49,170 |
|||||||||||
Purchases from related parties |
150 |
150 |
570 |
509 |
|||||||||||
Inventory market valuation charges |
— |
— |
— |
(370) |
|||||||||||
Consumer excise taxes |
2,008 |
1,873 |
7,759 |
7,506 |
|||||||||||
Impairment expense |
— |
— |
— |
130 |
|||||||||||
Depreciation and amortization |
540 |
504 |
2,114 |
2,001 |
|||||||||||
Selling, general and administrative expenses |
457 |
406 |
1,743 |
1,605 |
|||||||||||
Other taxes |
115 |
103 |
454 |
435 |
|||||||||||
Total costs and expenses |
20,117 |
16,731 |
71,400 |
60,986 |
|||||||||||
Income from operations |
1,119 |
553 |
3,969 |
2,378 |
|||||||||||
Net interest and other financial income (costs) |
(160) |
(136) |
(625) |
(556) |
|||||||||||
Income before income taxes |
959 |
417 |
3,344 |
1,822 |
|||||||||||
(Benefit) provision for income taxes |
(1,166) |
128 |
(460) |
609 |
|||||||||||
Net income |
2,125 |
289 |
3,804 |
1,213 |
|||||||||||
Less net income (loss) attributable to: |
|||||||||||||||
Redeemable noncontrolling interest |
16 |
16 |
65 |
41 |
|||||||||||
Noncontrolling interests |
93 |
46 |
307 |
(2) |
|||||||||||
Net income attributable to MPC |
$ |
2,016 |
$ |
227 |
$ |
3,432 |
$ |
1,174 |
|||||||
Per-share data |
|||||||||||||||
Basic: |
|||||||||||||||
Net income attributable to MPC per share |
$ |
4.13 |
$ |
0.43 |
$ |
6.76 |
$ |
2.22 |
|||||||
Weighted average shares: |
488 |
526 |
507 |
528 |
|||||||||||
Diluted: |
|||||||||||||||
Net income attributable to MPC per share |
$ |
4.09 |
$ |
0.43 |
$ |
6.70 |
$ |
2.21 |
|||||||
Weighted average shares: |
493 |
529 |
512 |
530 |
|||||||||||
Dividends paid |
$ |
0.40 |
$ |
0.36 |
$ |
1.52 |
$ |
1.36 |
|||||||
Supplemental Statistics (Unaudited) | |||||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||||
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
Income from Operations by segment |
|||||||||||||||
Refining & Marketing(a)(b) |
$ |
732 |
$ |
166 |
$ |
2,321 |
$ |
1,357 |
|||||||
Speedway(a) |
149 |
165 |
732 |
734 |
|||||||||||
Midstream(b) |
343 |
296 |
1,339 |
1,048 |
|||||||||||
Items not allocated to segments: |
|||||||||||||||
Corporate and other unallocated items(b) |
(114) |
(74) |
(365) |
(268) |
|||||||||||
Pension settlement expenses |
(50) |
— |
(52) |
(7) |
|||||||||||
Litigation |
57 |
— |
(29) |
— |
|||||||||||
Impairments(c) |
2 |
— |
23 |
(486) |
|||||||||||
Income from operations(a) |
1,119 |
553 |
3,969 |
2,378 |
|||||||||||
Net interest and other financial income (costs) |
(160) |
(136) |
(625) |
(556) |
|||||||||||
Income before income taxes |
959 |
417 |
3,344 |
1,822 |
|||||||||||
(Benefit) provision for income taxes |
(1,166) |
128 |
(460) |
609 |
|||||||||||
Net income |
2,125 |
289 |
3,804 |
1,213 |
|||||||||||
Less net income (loss) attributable to: |
|||||||||||||||
Redeemable noncontrolling interest |
16 |
16 |
65 |
41 |
|||||||||||
Noncontrolling interests |
93 |
46 |
307 |
(2) |
|||||||||||
Net income attributable to MPC |
$ |
2,016 |
$ |
227 |
$ |
3,432 |
$ |
1,174 |
|||||||
Capital Expenditures and Investments |
|||||||||||||||
Refining & Marketing(b) |
$ |
262 |
$ |
298 |
$ |
832 |
$ |
1,054 |
|||||||
Speedway |
160 |
112 |
381 |
303 |
|||||||||||
Midstream(b)(d) |
488 |
389 |
2,505 |
1,568 |
|||||||||||
Corporate and Other(e) |
46 |
38 |
138 |
144 |
|||||||||||
Total |
$ |
956 |
$ |
837 |
$ |
3,856 |
$ |
3,069 |
|||||||
(a) |
The company reversed a $370 million lower of cost or market inventory valuation reserve due to increased refined product prices during the second quarter of 2016 resulting in a $370 million non-cash benefit to income from operations for the full-year 2016, which increased Refining & Marketing and Speedway segment results by $345 million and $25 million, respectively. |
(b) |
In the first quarter of 2017, segment reporting was revised in connection with the contribution of certain terminal, pipeline and storage assets to MPLX. The results related to these assets are now presented in the Midstream segment. Previously, these results were reported in the Refining & Marketing segment. The results for the pipeline and storage assets were recast effective Jan. 1, 2015, and the results for the terminal assets were recast effective April 1, 2016. Prior to these dates these assets were not considered businesses and therefore there are no financial results from which to recast segment results. |
(c) |
The fourth-quarter and full-year 2017 impairments include MPC's share of gains related to the sale of assets from the Sandpiper Pipeline project. Full-year 2016 includes impairments of our equity method investments and goodwill. |
(d) |
Full-year 2017 includes $220 million for the acquisition of the Ozark Pipeline and an investment of $500 million in MarEn Bakken related to the Bakken Pipeline system. |
(e) |
Includes capitalized interest of $16 million, $16 million, $55 million and $63 million, respectively. |
Supplementary Statistics (Unaudited) (continued) | |||||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
MPC Consolidated Refined Product Sales Volumes |
2,427 |
2,252 |
2,311 |
2,269 |
|||||||||||
Refining & Marketing (R&M) Operating Statistics |
|||||||||||||||
R&M refined product sales volume (mbpd)(b) |
2,414 |
2,240 |
2,301 |
2,259 |
|||||||||||
R&M margin (dollars per barrel)(c) |
$ |
13.12 |
$ |
11.31 |
$ |
12.60 |
$ |
11.16 |
|||||||
Crude oil capacity utilization (percent)(d) |
101 |
93 |
97 |
95 |
|||||||||||
Refinery throughputs (mbpd):(e) |
|||||||||||||||
Crude oil refined |
1,837 |
1,672 |
1,765 |
1,699 |
|||||||||||
Other charge and blendstocks |
187 |
138 |
179 |
151 |
|||||||||||
Total |
2,024 |
1,810 |
1,944 |
1,850 |
|||||||||||
Sour crude oil throughput (percent) |
53 |
61 |
59 |
60 |
|||||||||||
WTI-priced crude oil throughput (percent) |
26 |
18 |
21 |
19 |
|||||||||||
Refined product yields (mbpd):(e) |
|||||||||||||||
Gasoline |
997 |
877 |
932 |
900 |
|||||||||||
Distillates |
679 |
621 |
641 |
617 |
|||||||||||
Propane |
40 |
34 |
36 |
35 |
|||||||||||
Feedstocks and special products |
254 |
227 |
277 |
241 |
|||||||||||
Heavy fuel oil |
42 |
19 |
37 |
32 |
|||||||||||
Asphalt |
62 |
58 |
63 |
58 |
|||||||||||
Total |
2,074 |
1,836 |
1,986 |
1,883 |
|||||||||||
Refinery direct operating costs ($/barrel):(f) |
|||||||||||||||
Planned turnaround and major maintenance |
$ |
1.80 |
$ |
2.16 |
$ |
1.72 |
$ |
1.83 |
|||||||
Depreciation and amortization |
1.38 |
1.48 |
1.43 |
1.47 |
|||||||||||
Other manufacturing(g) |
4.03 |
4.29 |
4.07 |
4.09 |
|||||||||||
Total |
$ |
7.21 |
$ |
7.93 |
$ |
7.22 |
$ |
7.39 |
|||||||
R&M Operating Statistics by Region - Gulf Coast |
|||||||||||||||
Refinery throughputs (mbpd):(h) |
|||||||||||||||
Crude oil refined |
1,158 |
986 |
1,070 |
1,039 |
|||||||||||
Other charge and blendstocks |
237 |
184 |
224 |
195 |
|||||||||||
Total |
1,395 |
1,170 |
1,294 |
1,234 |
|||||||||||
Sour crude oil throughput (percent) |
62 |
73 |
71 |
73 |
|||||||||||
WTI-priced crude oil throughput (percent) |
14 |
10 |
11 |
8 |
|||||||||||
Refined product yields (mbpd):(h) |
|||||||||||||||
Gasoline |
608 |
466 |
546 |
514 |
|||||||||||
Distillates |
440 |
377 |
405 |
399 |
|||||||||||
Propane |
29 |
24 |
26 |
26 |
|||||||||||
Feedstocks and special products |
313 |
294 |
311 |
286 |
|||||||||||
Heavy fuel oil |
30 |
10 |
25 |
21 |
|||||||||||
Asphalt |
17 |
16 |
17 |
15 |
|||||||||||
Total |
1,437 |
1,187 |
1,330 |
1,261 |
|||||||||||
Refinery direct operating costs ($/barrel):(f) |
|||||||||||||||
Planned turnaround and major maintenance |
$ |
1.45 |
$ |
2.82 |
$ |
1.75 |
$ |
2.09 |
|||||||
Depreciation and amortization |
1.05 |
1.16 |
1.12 |
1.14 |
|||||||||||
Other manufacturing(g) |
3.55 |
3.94 |
3.74 |
3.70 |
|||||||||||
Total |
$ |
6.05 |
$ |
7.92 |
$ |
6.61 |
$ |
6.93 |
Supplementary Statistics (Unaudited) (continued) |
Three Months Ended |
Twelve Months Ended | |||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
R&M Operating Statistics by Region - Midwest |
|||||||||||||||
Refinery throughputs (mbpd):(h) |
|||||||||||||||
Crude oil refined |
679 |
686 |
695 |
660 |
|||||||||||
Other charge and blendstocks |
38 |
44 |
33 |
39 |
|||||||||||
Total |
717 |
730 |
728 |
699 |
|||||||||||
Sour crude oil throughput (percent) |
36 |
43 |
40 |
40 |
|||||||||||
WTI-priced crude oil throughput (percent) |
46 |
29 |
37 |
38 |
|||||||||||
Refined product yields (mbpd):(h) |
|||||||||||||||
Gasoline |
389 |
411 |
386 |
386 |
|||||||||||
Distillates |
239 |
244 |
236 |
218 |
|||||||||||
Propane |
12 |
12 |
11 |
11 |
|||||||||||
Feedstocks and special products |
27 |
20 |
42 |
35 |
|||||||||||
Heavy fuel oil |
13 |
10 |
13 |
12 |
|||||||||||
Asphalt |
45 |
42 |
46 |
43 |
|||||||||||
Total |
725 |
739 |
734 |
705 |
|||||||||||
Refinery direct operating costs ($/barrel):(f) |
|||||||||||||||
Planned turnaround and major maintenance |
$ |
2.25 |
$ |
0.84 |
$ |
1.48 |
$ |
1.15 |
|||||||
Depreciation and amortization |
1.86 |
1.81 |
1.81 |
1.88 |
|||||||||||
Other manufacturing(g) |
4.46 |
4.31 |
4.26 |
4.29 |
|||||||||||
Total |
$ |
8.57 |
$ |
6.96 |
$ |
7.55 |
$ |
7.32 |
|||||||
Speedway Operating Statistics(i) |
|||||||||||||||
Convenience stores at period-end |
2,744 |
2,733 |
|||||||||||||
Gasoline and distillate sales (millions of gallons) |
1,467 |
1,489 |
5,799 |
6,094 |
|||||||||||
Gasoline and distillate margin (dollars per gallon)(j) |
$ |
0.1772 |
$ |
0.1617 |
$ |
0.1738 |
$ |
0.1656 |
|||||||
Merchandise sales (in millions) |
$ |
1,200 |
$ |
1,230 |
$ |
4,893 |
$ |
5,007 |
|||||||
Merchandise margin (in millions) |
$ |
337 |
$ |
350 |
$ |
1,402 |
$ |
1,435 |
|||||||
Merchandise margin percent |
28.1 |
% |
28.4 |
% |
28.7 |
% |
28.7 |
% | |||||||
Same store gasoline sales volume (period over period) |
(0.3) |
% |
(2.4) |
% |
(1.3) |
% |
(0.4) |
% | |||||||
Same store merchandise sales (period over period)(k) |
0.5 |
% |
3.7 |
% |
1.2 |
% |
3.2 |
% | |||||||
Midstream Operating Statistics |
|||||||||||||||
Crude oil and refined product pipeline throughputs (mbpd)(l) |
3,610 |
2,930 |
3,377 |
2,948 |
|||||||||||
Terminal throughput (mbpd)(m) |
1,497 |
1,496 |
1,477 |
1,505 |
|||||||||||
Gathering system throughput (million cubic feet per day)(n) |
4,181 |
3,164 |
3,608 |
3,275 |
|||||||||||
Natural gas processed (million cubic feet per day)(n) |
6,828 |
5,970 |
6,460 |
5,761 |
|||||||||||
C2 (ethane) + NGLs fractionated (mbpd)(n) |
423 |
346 |
394 |
335 |
|||||||||||
(a) |
Total average daily volumes of refined product sales to wholesale, branded and retail customers. |
(b) |
Includes intersegment sales. |
(c) |
Excludes LCM inventory valuation adjustments. Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. Comparable prior period information for R&M margin has been recast in connection with the contribution of certain pipeline assets to MPLX on March 1, 2017. |
(d) |
Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance and other normal operating activities. |
(e) |
Excludes inter-refinery volumes of 88 mbpd and 90 mbpd for fourth quarter 2017 and 2016, respectively, and 78 mbpd and 83 mbpd for the full-year 2017 and 2016, respectively. |
(f) |
Per barrel of total refinery throughputs. |
(g) |
Includes utilities, labor, routine maintenance and other operating costs. |
(h) |
Includes inter-refinery transfer volumes. |
(i) |
Fourth quarter and year-to-date 2017 operating statistics do not reflect any information for the 41 travel centers contributed to PFJ Southeast, whereas they are reflected in the fourth quarter and year-to-date 2016 operating statistics. |
(j) |
Excludes LCM inventory valuation adjustments. The price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees, divided by gasoline and distillate sales volumes. |
(k) |
Excludes cigarettes. |
(l) |
Includes common-carrier pipelines and private pipelines contributed to MPLX, excluding equity method investments. |
(m) |
Includes the results of the terminal assets beginning on April 1, 2016, the date the assets became a business. |
(n) |
Includes amounts related to unconsolidated equity method investments on a 100% basis. |
Segment Earnings Before Interest, Taxes, Depreciation & Amortization (Segment EBITDA) (Unaudited) | |||||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||||
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
Segment EBITDA(a) |
|||||||||||||||
Refining & Marketing(b)(c) |
$ |
1,009 |
$ |
428 |
$ |
3,403 |
$ |
2,420 |
|||||||
Speedway(b) |
227 |
235 |
1,007 |
1,007 |
|||||||||||
Midstream(c) |
514 |
453 |
2,038 |
1,653 |
|||||||||||
Total Segment EBITDA(a)(b) |
1,750 |
1,116 |
6,448 |
5,080 |
|||||||||||
Total segment depreciation & amortization |
(526) |
(489) |
(2,056) |
(1,941) |
|||||||||||
Items not allocated to segments(c)(d) |
(105) |
(74) |
(423) |
(761) |
|||||||||||
Income from operations |
1,119 |
553 |
3,969 |
2,378 |
|||||||||||
Net interest and other financial income (costs) |
(160) |
(136) |
(625) |
(556) |
|||||||||||
Income before income taxes |
959 |
417 |
3,344 |
1,822 |
|||||||||||
(Benefit) provision for income taxes |
(1,166) |
128 |
(460) |
609 |
|||||||||||
Net income |
2,125 |
289 |
3,804 |
1,213 |
|||||||||||
Less net income (loss) attributable to: |
|||||||||||||||
Redeemable noncontrolling interest |
16 |
16 |
65 |
41 |
|||||||||||
Noncontrolling interests |
93 |
46 |
307 |
(2) |
|||||||||||
Net income attributable to MPC |
$ |
2,016 |
$ |
227 |
$ |
3,432 |
$ |
1,174 |
|||||||
(a) |
Segment EBITDA represents segment earnings before interest and financing costs, interest income, income taxes, depreciation and amortization expense. Segment EBITDA is a non-GAAP financial measure used by some investors and analysts to analyze and compare companies on the basis of operating performance. Segment EBITDA should not be considered as a substitute for, or superior to net income attributable to MPC, income before income taxes, cash flows from operating activities or any other measure of financial performance presented in accordance with GAAP. Segment EBITDA may not be comparable to similarly titled measures reported by other companies. |
(b) |
The company reversed a $370 million lower of cost or market inventory valuation reserve due to increased refined product prices during the second quarter of 2016 resulting in a $370 million non-cash benefit to income from operations for the full-year 2016, which increased Refining & Marketing and Speedway segment results by $345 million and $25 million, respectively. |
(c) |
In the first quarter of 2017, segment reporting was revised in connection with the contribution of certain terminal, pipeline and storage assets to MPLX. The results related to these assets are now presented in the Midstream segment. Previously, these results were reported in the Refining & Marketing segment. The results for the pipeline and storage assets were recast effective Jan. 1, 2015, and the results for the terminal assets were recast effective April 1, 2016. Prior to these dates these assets were not considered businesses and therefore there are no financial results from which to recast segment results. |
(d) |
The three months ended Dec. 31, 2017, includes MPC's share of gains related to the sale of assets remaining from the Sandpiper pipeline project of $2 million, pension settlement expense of $50 million and a favorable litigation settlement of $57 million. Full-year 2017 includes charges for losses of $29 million related to litigation, pension settlement expenses of $52 million and MPC's share of gains related to the sale of assets remaining from the Sandpiper pipeline project of $23 million. Full-year 2016 includes pension settlement expenses of $7 million and impairment charges of $486 million. |
Select Financial Data (Unaudited) | |||||||
(In millions) |
December 31, |
September 30, | |||||
Cash and cash equivalents |
$ |
3,011 |
$ |
2,088 |
|||
MPLX debt |
6,946 |
6,849 |
|||||
Total consolidated debt |
12,946 |
12,782 |
|||||
Redeemable noncontrolling interest |
1,000 |
1,000 |
|||||
Equity |
20,828 |
19,802 |
|||||
Shares outstanding |
486 |
498 |
|||||
Cash provided from operations (quarter ended) |
$ |
2,746 |
$ |
1,901 |
|||
Reconciliation of Refining & Marketing Margin to Refining & Marketing Income from Operations | |||||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||||
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
Refining & Marketing income from operations |
$ |
732 |
$ |
166 |
$ |
2,321 |
$ |
1,357 |
|||||||
Plus (Less): |
|||||||||||||||
Refinery direct operating costs(a) |
1,084 |
1,072 |
4,113 |
4,007 |
|||||||||||
Refinery depreciation and amortization |
258 |
247 |
1,013 |
994 |
|||||||||||
Other: |
|||||||||||||||
Operating expenses(a)(b) |
499 |
494 |
1,924 |
1,835 |
|||||||||||
Segment (income) expense, net(a) |
(149) |
(111) |
(499) |
(360) |
|||||||||||
Depreciation and amortization |
19 |
15 |
69 |
69 |
|||||||||||
Inventory market valuation adjustment |
— |
— |
— |
(345) |
|||||||||||
Refining & Marketing margin(c) |
$ |
2,443 |
$ |
1,883 |
$ |
8,941 |
$ |
7,557 |
(a) |
Excludes depreciation and amortization. |
(b) |
Includes fees paid to MPLX for various midstream services, which includes marine and pipeline transportation and terminal and storage services, but excludes costs related to delivery of crude and feedstocks to our refineries. |
(c) |
Refining & Marketing margin is defined as sales revenue less cost of refinery inputs and purchased products, excluding any LCM inventory market adjustment. We believe this non-GAAP financial measure is useful to investors and analysts to assess our ongoing financial performance because, when reconciled to its most comparable GAAP measure, it provides improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. This measure should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies. |
Reconciliation of Speedway Total Margin to Speedway Income from Operations | |||||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||||
(in millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
Speedway income from operations |
$ |
149 |
$ |
165 |
$ |
732 |
$ |
734 |
|||||||
Plus (Less): |
|||||||||||||||
Operating, selling, general and administrative expenses(a) |
399 |
383 |
1,530 |
1,554 |
|||||||||||
Depreciation and amortization(a) |
78 |
70 |
275 |
273 |
|||||||||||
Income from equity method investments |
(15) |
(5) |
(69) |
(5) |
|||||||||||
Net gain on disposal of assets |
(2) |
(5) |
(14) |
(30) |
|||||||||||
Other income(a) |
(5) |
(10) |
(14) |
(18) |
|||||||||||
Inventory market valuation adjustment |
— |
— |
— |
(25) |
|||||||||||
Speedway total margin |
$ |
604 |
$ |
598 |
$ |
2,440 |
$ |
2,483 |
|||||||
Speedway total margin:(a)(b) |
|||||||||||||||
Gasoline and distillate margin |
$ |
260 |
$ |
241 |
$ |
1,008 |
$ |
1,009 |
|||||||
Merchandise margin |
337 |
350 |
1,402 |
1,435 |
|||||||||||
Other margin |
7 |
7 |
30 |
39 |
|||||||||||
Speedway total margin |
$ |
604 |
$ |
598 |
$ |
2,440 |
$ |
2,483 |
(a) |
Fourth-quarter and year-to-date 2017 margin and expenses do not reflect any results from the 41 travel centers contributed to PFJ Southeast, whereas they are reflected in the fourth-quarter and year-to-date 2016 information. Our share of the net results from the joint venture is reflected in income from equity method investments. |
(b) |
Speedway gasoline and distillate margin is defined as the price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees and excluding any LCM inventory market adjustment. Speedway merchandise margin is defined as the price paid by consumers less the cost of merchandise. We believe these non-GAAP financial measures are useful to investors and analysts to assess our ongoing financial performance because, when reconciled to the most comparable GAAP measures, they provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies. |
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SOURCE Marathon Petroleum Corporation
FINDLAY, Ohio, Feb. 1, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) and MPLX LP (NYSE: MPLX) today are closing on the final transactions to complete the previously announced strategic actions.
MPC is contributing refining logistics assets and fuels distribution services to MPLX that are projected to generate approximately $1 billion in annual earnings before interest, taxes, depreciation and amortization (EBITDA) for total consideration of $8.1 billion consisting of $4.1 billion in cash and approximately 114 million newly issued MPLX units valued at $4 billion as of the announcement date. MPLX is financing the cash portion of the transaction with its $4.1 billion 364-day term loan facility, which was entered into on Jan. 2, 2018.
Immediately following the dropdown, MPC is exchanging its general partner (GP) economic interests in MPLX, including incentive distribution rights (IDRs), for 275 million newly issued MPLX common (LP) units valued at $10.1 billion as of the announcement date. MPC will continue to control MPLX through its ownership of the non-economic GP interest in MPLX and will own approximately 64 percent of the outstanding MPLX common units.
"We are very pleased to complete these transformative transactions for both MPC and MPLX," said Gary R. Heminger, chairman and chief executive officer of both MPC and MPLX. "The conversion of MPC's GP economic interests in MPLX into LP units provides a clear valuation for MPC's interests. This, combined with the elimination of the IDR burden on the partnership, creates mutual benefits and positions MPLX extraordinarily well to deliver long-term sustainable growth for all of its unitholders, including MPC."
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. Following today's dropdown, MPLX will provide fuels distribution services to MPC and own refining logistics assets consisting of tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation ("MPC") and MPLX LP ("MPLX"). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPC and MPLX, including strategic initiatives and our value creation plans. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the companies' control and are difficult to predict. Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: the ability to consummate the strategic initiatives discussed herein; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein; our ability to manage disruptions in credit markets or changes to our credit rating; adverse changes in laws including with respect to tax and regulatory matters; continued/further volatility in and/or degradation of market and industry conditions; the impact of adverse market conditions affecting MPC's and MPLX's midstream businesses; modifications to MPLX earnings and distribution growth objectives, and other risks described below with respect to MPLX; changes to MPC's capital budget; other risk factors inherent to MPC's industry; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2016, filed with Securities and Exchange Commission (SEC). Factors that could cause MPLX's actual results to differ materially from those implied in the forward-looking statements include: negative capital market conditions, including an increase of the current yield on common units, adversely affecting MPLX's ability to meet its distribution growth guidance; the ability to consummate the strategic initiatives discussed herein; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of MPLX's capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt to fund anticipated dropdowns on commercially reasonable terms, and the ability to successfully execute its business plans and growth strategy; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of midstream infrastructure by competitors; the suspension, reduction or termination of MPC's obligations under MPLX's commercial agreements; modifications to earnings and distribution growth objectives; changes to MPLX's capital budget; other risk factors inherent to MPLX's industry; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2016, filed with the SEC. In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here, in MPC's Form 10-K or in MPLX's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPC's Form 10-K are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.
Non-GAAP Financial Measures
The EBITDA forecasts were determined on an EBITDA-only basis. Accordingly, information related to the elements of net income, including tax and interest, are not available and, therefore, reconciliations of these non-GAAP financial measures to the nearest GAAP financial measures have not been provided.
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SOURCE Marathon Petroleum Corporation; MPLX LP
FINDLAY, Ohio, Jan. 23, 2018 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) today announced the appointments of Brian K. Partee, currently director of Business Development, to vice president of Business Development, and Rick Linhardt, currently director of Tax, to vice president of Tax. Both positions are effective Feb. 1, 2018. Partee will report to Donald C. Templin, president of MPC, and Michael J. Hennigan, president of the general partner of MPLX LP (NYSE: MPLX), the master limited partnership sponsored by MPC. Linhardt will report to Timothy T. Griffith, senior vice president and chief financial officer of MPC. Both Partee and Linhardt will remain in Findlay.
Partee joined MPC in 1995 as an accountant in Marathon Pipe Line. He progressed through increasingly responsible positions before being named territory manager in the Wholesale Marketing southern region in 2004, district sales manager in 2006 and coordinating manager in 2008. In 2009, Partee was named commercial director for Speedway. In 2012, he was named vice president, Business Development and Franchise at Speedway. He served as MPC's manager of crude oil logistics and analysis beginning in 2014 and assumed his current role in January 2017. Partee holds a bachelor's degree in accounting from Bowling Green State University and an MBA from the University of Findlay.
Linhardt joined MPC in 2013 as manager of Tax Compliance with responsibility for the company's income tax, sales/use tax, property tax, trade and customs tax and motor fuels tax. He was named director of Tax in 2017. Linhardt has 30 years of tax experience in public accounting and the oil and gas industry, including an assignment as the head of the tax department at RRI Energy Inc., where he was instrumental in its merger with NRG Energy. He earned a bachelor's degree in accounting from the University of Kansas, and has been a certified public accountant since 1986.
"We are delighted to welcome Brian and Rick to our executive leadership team," said Gary R. Heminger, chairman and chief executive officer of MPC. "They both have a wealth of experience and knowledge that will benefit our Business Development and Tax organizations."
The respective organizations led by Partee and Linhardt also provide services for MPLX.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
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SOURCE Marathon Petroleum Corporation
FINDLAY, Ohio, Jan. 17, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) today announced that its subsidiaries MPLX Ozark Pipe Line LLC (Ozark) and Marathon Pipe Line LLC (MPL) have commenced a joint binding open season on the combined Ozark 22-inch and Woodpat 22-inch pipelines from Cushing, Oklahoma, to Patoka, Illinois. The joint binding open season provides interested shippers with an opportunity to secure priority transportation service on the pipelines.
The joint binding open season will commence on Jan. 17, 2018, at 8 a.m., Central Standard Time, and will conclude at noon Central Standard Time, on Feb. 16, 2018.
"We are pleased to announce the Cushing-to-Patoka Expansion Project as Midwest markets desire further access to West Texas Intermediate crude. This expansion will provide additional capacity for shippers while positioning the partnership to grow its distributable cash flow," MPLX President Michael J. Hennigan said.
About the Cushing-to-Patoka Expansion
The Cushing-to-Patoka Expansion provides transportation from Cushing, Oklahoma, to Patoka, Illinois. The project will further expand the capacity of the pipelines by 15,000 barrels per day (bpd) to 360,000 bpd by providing operational modifications, including tankage, in Wood River, Illinois. The expansion is expected to begin service in the third quarter of 2018.
About the Ozark Pipeline
The Ozark Pipeline is a 433-mile, 22-inch crude oil pipeline originating in Cushing, Oklahoma, and terminating in Wood River, Illinois, capable of transporting approximately 230,000 bpd. MPLX plans an expansion project, expected to be complete in the second quarter of 2018, to increase the line's capacity to approximately 345,000 bpd.
About the Woodpat Pipeline
The Woodpat Pipeline is a 55-mile, 22-inch crude oil pipeline originating in Wood River, Illinois, and terminating in Patoka, Illinois, capable of transporting approximately 215,000 bpd. MPLX plans an expansion project, expected to be complete in the second quarter of 2018, to increase the line's capacity to approximately 345,000 bpd.
Open Season Process
Documents and further details related to the binding open season will be made available upon completion of a Confidentiality Agreement, available at:
http://www.marathonpipeline.com/Cushing_to_Patoka_Expansion_Joint_Binding_Open_Season/
http://www.mplx.com/Cushing_to_Patoka_Expansion_Joint_Binding_Open_Season/
All interested shippers should submit an executed Confidentiality Agreement to:
Will Airhart
Attorney
539 South Main Street, Room 887-M
Findlay, Ohio 45840
Telephone: 419-421-4561
FAX: 419-427-3695
Email: waairhart@marathonpetroleum.com
About Marathon Pipe Line LLC
MPL operates one of the largest petroleum pipeline systems in the United States, based on total volume delivered. MPL operates approximately 6,400 miles of pipeline in 16 states. These pipelines range from 4 inches to 40 inches in diameter. MPL transports crude oil, refined petroleum products and refinery feedstocks to and from terminals, refineries and other pipelines. MPL safely controls the movement and delivery of an average of 143 million gallons of crude oil and petroleum products daily through its pipelines. For further information on MPL, visit the company's website at http://www.marathonpipeline.com.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. We are engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipeline assets located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; crude oil and product storage facilities (tank farms) with approximately 5 million barrels of available storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.
This press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements relate to, among other things, statements with respect to forecasts regarding capacity, rates, incremental investment and timing for becoming operational for the opportunities discussed above, as well as MPLX's future growth and results of operations. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of the company and are difficult to predict. Factors that could impact the opportunities described above are: the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of pipeline capacity by our competitors; the ability to obtain required regulatory approvals on a timely basis; the occurrence of an operational hazard or unforeseen interruption; 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, 2016, filed with the Securities and Exchange Commission (SEC). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPLX's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.
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SOURCE MPLX LP
FINDLAY, Ohio, Jan. 8, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will host a conference call Thursday, Feb. 1, 2018, at 9 a.m. EST to discuss 2017 fourth-quarter and full-year financial results, which will be released earlier that day, and to provide an update on company operations.
Participants will be Gary R. Heminger, chairman and chief executive officer; Don Templin, president; Tim Griffith, senior vice president and chief financial officer; Michael J. Hennigan, president of the general partner of MPLX LP (NYSE: MPLX), the master limited partnership sponsored by MPC; and other senior executives. The call will be hosted by Lisa Wilson, director of Investor Relations.
Interested parties may listen to the conference call by dialing (888) 989-4720 (confirmation number 4852094) or by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2017 Fourth-Quarter and Full-Year Financial Results" link. Replays of the conference call will be available on the company's website through Thursday, Feb. 15. Financial information, including the earnings release and other investor-related material, also will be available online.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,730 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
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SOURCE Marathon Petroleum Corporation
FINDLAY, Ohio, Jan. 8, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call Thursday, Feb. 1, 2018, at 11 a.m. EST to discuss 2017 fourth-quarter and full-year financial results, which will be released earlier that day, and to provide an update on partnership operations.
MPLX participants will be Gary R. Heminger, chairman and chief executive officer; Michael J. Hennigan, president; Pamela K.M. Beall, executive vice president and chief financial officer; and other senior executives. The call will be hosted by Lisa Wilson, director of Investor Relations.
Interested parties may listen to the conference call by dialing (888) 606-5719 (confirmation number 6033306) or by visiting MPLX's website at http://www.mplx.com and clicking on the "2017 Fourth-Quarter and Full-Year Financial Results" link in the "News & Headlines" section. Financial information, including the earnings release and other investor-related material, also will be available online. Replays of the conference call will be available on the partnership's website through Thursday, Feb. 15.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. We are engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipeline assets located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; crude oil and product storage facilities (tank farms) with approximately 5 million barrels of available storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.
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SOURCE Marathon Petroleum Corporation
DENVER, Dec. 19, 2017 /PRNewswire/ -- John M. Fox today released the following open letter to the board of directors of MPLX responding to Marathon Petroleum Corporation's announcement to demand over $10 billion for its GP economic interest in MPLX.
The full text of the letter follows:
December 19, 2017
Board of Directors
MPLX LP
200 East Hardin Street
FINDLAY, OH 45840-3229
Attention: The Board of Directors of MPLX GP
Dear Gary,
As you have seen from my letter to you and the MPC board yesterday the price contemplated for MPLX's purchase of MPC's IDRs (incentive Distribution Rights) is extraordinarily excessive. As Chairman of MPLX's General Partner it is incumbent on you to ensure that the Conflicts Committee reviewing and approving the proposed IDR take-out transaction act in good faith and "subjectively believe that the determination . . . is not adverse to the best interests of the Partnership Group". The words in quotes are from the Third Amended and Restated Agreement of Limited Partnership of MPLX LP dated as of October 31, 2016 (as amended) and it appears to me that the proposed transaction value is adverse to the best interests of the Partnership Group in that the Partnership Group is paying an unjustified price to eliminate the GP IDR interest, diluting all unitholders. Moreover, I believe the price agreed to by MPLX would not be one agreed to by truly independent directors.
Therefore, I sincerely hope your press release dated December 15, 2017 does not represent the final deal terms. As I outlined in my letter to you on December 5, 2017, any multiple in excess of 14x is both well above the precedent set by the market, and will destroy value for both MPLX and MPC. With a 4.8% single-day decline in the value of MPLX units after your announcement of the transaction, it is clear that investors are voting with their feet.
MPLX is being asked to pay for the MPC IDRs with 275,000,000 new units which is equivalent to 17 times the value of the IDRs being purchased. With approximately 800,000,000 outstanding units following the issuance of these new units, I estimate pro forma distributions will equate to $2.40 per unit. However, without the IDR elimination, I estimate you would be distributing $2.50 - $2.55 per unit. How, then, can the IDR elimination be considered accretive to MPLX as you indicate in your press release?
By MPC insisting on 275,000,000 units of MPLX rather than a more justifiable number of 215,000,000 units you, in effect, cripple MPLX and its value creating potential for MPC. Where is the logic in doing that?
I support MPC's decision to eliminate the IDRs and MPLX's desire to purchase the IDR burden, but it must be done at a multiple which will actually create long-term value for MPLX and its unitholders, MPC included. I urge MPLX to reconsider the inflated multiple it is paying for the IDRs so that it do not lose an opportunity to create real value for its unit holders.
It is not too late to do the right thing!
Sincerely,
John Fox
About John M. Fox
John Fox is the co-founder of MarkWest Hydrocarbon, former CEO, Chairman and Director of MarkWest Energy GP, L.L.C. ("MarkWest GP"), which was the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial owner of 1,544,172 MPLX common units, and 20,900 shares of Marathon Petroleum Company, through its merger with MarkWest in 2015 and from follow-on investments. Mr. Fox worked to eliminate the Incentive Distribution Rights (IDRs) at MarkWest in 2007, creating tremendous value that ultimately led to the successful acquisition of MWE by MPLX in 2015. MarkWest generated a 143.3% total return and grew from a $1.2 billion market cap to an $8.6 billion market cap for the period of September 5, 2007, when the IDRs were eliminated, to December 4, 2015.
Disclosure:
John Fox is providing this material for general informational purposes only. None of the information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those of Mr. Fox as of December 19, 2017 and are subject to change at any time due to changes in market, economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other member of the Fox family. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
More information can be found at www.itjustmakessensegary.com.
Contact:
John Fox
Johnfox@itjustmakessensegary.com
720-213-6439
www.itjustmakessensegary.com
SOURCE John M. Fox
DENVER, Dec. 18, 2017 /PRNewswire/ -- John M. Fox today released the following open letter to the board of directors of Marathon Petroleum Corporation (MPC) responding to management's announcement to demand over $10 billion for its GP economic interest in MPLX.
The full text of the letter follows:
December 18, 2017
Board of Directors
Marathon Petroleum Corporation
539 S Main St
FINDLAY, OH 45840-3229
Attention: Gary Heminger, Chairman, President and Chief Executive Officer
To the Board of Directors of Marathon Petroleum Corporation:
I was frustrated to see Marathon Petroleum Corporation's Board of Directors continues to push an unjustified inflated price for its Incentive Distribution Right (IDR) burden on MPLX. Therefore, I sincerely hope your press release dated December 15, 2017 does not represent the final deal terms. As I outlined in my letter to you on December 5, 2017, any multiple in excess of 14x is both well above the precedent set by the market, and will destroy value for both MPLX and MPC. With a 4.8% single-day decline in the value of MPLX units after your announcement of the transaction, it is clear that investors are voting with their feet.
Based on the volume-weighted average price of MPLX over the past 10 days which MPC's management is using to value the newly issued MPLX common (LP) units, the IDR elimination will be executed at a multiple of 17x the pro forma value of the GP's IDRs. Given expectations of available Distributable Cashflow to the LP for 2018 of $1.9 billion and approximately 796 million outstanding units following the issuance of your 275 million new units as part of the elimination, pro forma distributions will equate to $2.40 per unit. However, if you didn't do the IDR elimination, I estimate you would be distributing $2.50 - $2.55 per unit. How, then, can the IDR elimination be considered accretive as you indicate in your press release?
Over the past 13 days since my last letter, I have had an overwhelming response from many large institutional holders of MPC and MPLX that share my concern over the valuation. Your more than $10 billion valuation announced on Friday is destructive not only to MPLX but also to MPC who would own two thirds of MPLX if this gets done on these terms!
Gary, you and others have emphasized that a significant part of your effort to create value for MPC shareholders is to enhance the value of your ownership of MPLX where MPC is the largest unit holder. Yet by insisting on a value-destroying multiple from MPLX you are in effect shooting MPLX in the foot!
By insisting on 275,000,000 units of MPLX rather than a more justifiable number of 215,000,000 units you, in effect, cripple MPLX and its value creating potential for MPC. Where is the logic in doing that?
I support MPC's decision to eliminate the IDRs, but it must be done at a multiple which will actually create long-term value for MPLX and its unitholders, MPC included. I urge you to reconsider the inflated multiple you have set to this deal so that you do not lose an opportunity to create real value for MPLX.
It is not too late to do the right thing!
Sincerely,
John Fox
About John M. Fox
John Fox is the co-founder of MarkWest Hydrocarbon, former CEO, Chairman and Director of MarkWest Energy GP, L.L.C. ("MarkWest GP"), which was the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial owner of 1,544,172 MPLX common units, and 20,900 shares of Marathon Petroleum Company, through its merger with MarkWest in 2015 and from follow-on investments. Mr. Fox worked to eliminate the Incentive Distribution Rights (IDRs) at MarkWest in 2007, creating tremendous value that ultimately led to the successful acquisition of MWE by MPLX in 2015. MarkWest generated a 143.3% total return and grew from a $1.2 billion market cap to an $8.6 billion market cap for the period of September 5, 2007, when the IDRs were eliminated, to December 4, 2015.
Disclosure:
John Fox is providing this material for general informational purposes only. None of the information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those of Mr. Fox as of December 18, 2017 and are subject to change at any time due to changes in market, economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other member of the Fox family. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
More information can be found at www.itjustmakessensegary.com.
Contact:
John Fox
Johnfox@itjustmakessensegary.com
720-213-6439
www.itjustmakessensegary.com
SOURCE John M. Fox
DENVER, Dec. 5, 2017 /PRNewswire/ -- John M. Fox, beneficial owner of 1,544,172 MPLX common units and 20,900 shares of Marathon Petroleum Company, today released the following open letter to the board of directors of Marathon Petroleum Corporation (MPC) outlining how valuation of the proposed IDR elimination is the key to generating long-term MPC and MPLX value for holders.
Please see disclosures at the end of this release. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily comprehensive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
A new slide deck highlighting key points on growth and valuation implications can be found at www.itjustmakessensegary.com.
The full text of the letter follows:
December 5, 2017
Board of Directors
Marathon Petroleum Corporation
539 S Main St
FINDLAY, OH 45840-3229
Attention: Gary Heminger, Chairman, President and Chief Executive Officer
To the Board of Directors of Marathon Petroleum Corporation:
I support Marathon Petroleum Corporation's (MPC) decision to eliminate the Incentive Distribution Right (IDRs) burden on MPLX and am aligned with you to ensure the best possible path forward. However, I strongly disagree on the valuation MPC management is placing on MPLX's GP. As MPLX's largest holder, I am concerned that such a valuation will destroy long-term value for both MPLX and MPC. MPC management estimates the IDR Elimination will transact between 15x-20x the pro forma value of the GP's IDRS. This valuation is unjustified compared to established benchmarks for this type of transaction. It is really very simple, every new share that MPLX issues as a result of an inflated IDR valuation puts pressure on current distribution and future growth potential.
Based on recent transactions including Plains All American Pipeline (11.6X), Andeavor Logistics (13.1X), and HollyFrontier (14.1X), there is a clear precedent for a 12x-14x multiple. Additionally, based on my analysis, at any valuation above 13.7x, pro forma MPLX distributions will need to be cut and value destroyed as the additional shares to MPC will strain returns on equity and the associated growth rates.
Based on my experience and countless hours my team and I spent at MarkWest analyzing the many disincentives associated with the IDRs, I know first-hand the drag that can be caused by the IDR structure. As a result, I strongly support Marathon Petroleum Corporation's commitment to exchange its IDRs for LP units in MPLX. However, the valuation of the IDR transaction has material impacts on MPC's long-term value, and could vastly diminish growth prospects at MPLX ultimately raising the cost of capital and destroying value for both companies.
As MPC will remain MPLX's largest long-term holder, it is imperative to approach valuation of the IDR elimination with value creation in mind. MPLX has meaningful organic growth potential that will drive growth for MPLX and MPC. I urge you to revise your valuation estimates for the IDR elimination to 12x – 14x, creating a clear path to long-term value growth for MPLX. It just makes sense!
Sincerely,
John Fox
About John M. Fox
John Fox is the co-founder of MarkWest Hydrocarbon, former CEO, Chairman and Director of MarkWest Energy GP, L.L.C. ("MarkWest GP"), which was the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial owner of 1,544,172 MPLX common units, and 20,900 shares of Marathon Petroleum Company, through its merger with MarkWest in 2015 and from follow-on investments. Mr. Fox worked to eliminate the Incentive Distribution Rights (IDRs) at MarkWest in 2007, creating tremendous value that ultimately led to the successful acquisition of MWE by MPLX in 2015. MarkWest generated a 143.3% total return and grew from a $1.2 billion market cap to an $8.6 billion market cap for the period of September 5, 2007, when the IDRs were eliminated, to December 4, 2015.
Disclosure:
John Fox is providing this material for general informational purposes only. None of the information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those of Mr. Fox as of December 5, 2017 and are subject to change at any time due to changes in market, economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other member of the Fox family. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
Contact:
John Fox
Johnfox@itjustmakessensegary.com
720-213-6439
www.itjustmakessensegary.com
SOURCE John M. Fox
DENVER, Dec. 5, 2017 /PRNewswire/ -- John M. Fox, beneficial owner of 1,544,172 MPLX common units, and 20,900 shares of Marathon Petroleum Company, today released the following open letter to the board of directors of Marathon Petroleum Corporation (MPC) outlining how valuation of the proposed IDR elimination is the key to generating long-term MPC and MPLX value for holders.
Please see disclosures at the end of this release. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily comprehensive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
A new slide deck highlighting key points on growth and valuation implications can be found at www.itjustmakessensegary.com.
The full text of the letter follows:
December 5, 2017
MPLX GP LLC Conflicts Committee
MPLX LP
200 East Hardin Street
FINDLAY, OH 45840-3229
Attention: Christopher Helms, Chairman, MPLX GP LLC Conflicts Committee, and Members of the Committee Michael Beatty, Dan Sandman, and C. Richard Wilson
To the MPLX GP LLC Conflicts Committee:
I support Marathon Petroleum Corporation's (MPC) decision to eliminate the Incentive Distribution Rights (IDRs) burden on MPLX. It is my belief, however, that MPC's stated target of a 15x – 20x multiple for the elimination of pro forma IDRs is in direct opposition to the interests of the unitholders of MPLX and will ultimately damage both MPC (the largest holder of units) and MPLX in the long-run. It is the responsibility of the MPLX GP Conflicts Committee to recommend to Marathon's Board of Directors a fair and transparent multiple before agreeing to a transaction.
Based on my experience and countless hours my team and I spent at MarkWest analyzing the many disincentives associated with the IDRs, I know first-hand the drag that can be caused by the IDR structure. As a result, I strongly support MPC's commitment to exchange its IDRs for LP units in MPLX. However, the valuation of the IDR transaction has material impact on MPLX's cost of capital and growth prospects, ultimately destroying long-term value for both companies.
MPC management's consistent messaging toward an IDR transaction range of 15x-20x is far above established levels for this type of deal. Based on recent transactions including Plains All American Pipeline (11.6X), Andeavor Logistics (13.1X), and HollyFrontier (14.1X), there is a clear precedent for a 12x-14x multiple. Additionally, based on my analysis, at any valuation above 13.7x, pro forma MPLX future distributions will need to be cut and value destroyed.
As MPC will remain MPLX's largest long-term holder, it is imperative to approach valuation of the IDR elimination with value creation in mind. MPLX has meaningful organic growth potential that will drive growth for MPLX and MPC if this deal is done right. I urge you to not to agree to this transaction at an unjustified multiple, and to ensure that the transaction is completed at a price that is fair and reasonable to the Partnership.
Sincerely,
John Fox
About John M. Fox
John Fox is the co-founder of MarkWest Hydrocarbon, former CEO, Chairman and Director of MarkWest Energy GP, L.L.C. ("MarkWest GP"), which was the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial owner of 1,544,172 MPLX common units, and 20,900 shares of Marathon Petroleum Company, through its merger with MarkWest in 2015 and from follow-on investments. Mr. Fox worked to eliminate the Incentive Distribution Rights (IDRs) at MarkWest in 2007, creating tremendous value that ultimately led to the successful acquisition of MWE by MPLX in 2015. MarkWest generated a 143.3% total return and grew from a $1.2 billion market cap to an $8.6 billion market cap for the period of September 5, 2007, when the IDRs were eliminated, to December 4, 2015.
Disclosure:
John Fox is providing this material for general informational purposes only. None of the information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those of Mr. Fox as of December 5, 2017 and are subject to change at any time due to changes in market, economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other member of the Fox family. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
Contact:
John Fox
Johnfox@itjustmakessensegary.com
720-213-6439
www.itjustmakessensegary.com
SOURCE John M. Fox
DENVER, April 18, 2017 /PRNewswire/ -- Antero Midstream Partners LP (NYSE: AM) ("Antero Midstream" or the "Partnership") today announced that John C. Mollenkopf has been appointed to the board of directors of Antero Midstream Partners GP LLC, the general partner of Antero Midstream (the "Board").
Appointment of John C. Mollenkopf to the Board of Directors
Mr. Mollenkopf retired from MPLX, L.P. (NYSE: MPLX) in October 2016. He previously served MPLX as Executive Vice President and Chief Operating Officer, MarkWest operations, from December 2015 through September 2016 following the merger of MPLX and MarkWest Energy Partners, L.P. ("MarkWest Energy Partners"). From 2011 through 2015, he served as Executive Vice President and Chief Operating Officer of MarkWest Energy Partners. Between 2002 and 2011, Mr. Mollenkopf served MarkWest Energy Partners as Vice President – Business Development, Senior Vice President – Southwest Business Unit, Senior Vice President and Chief Operations Officer, Senior Vice President and Chief Operating Officer. Mr. Mollenkopf holds a Bachelor of Science degree in mechanical engineering from the University of Colorado at Boulder 1983. He serves on the Engineering Advisory Council for the college of engineering at the University of Colorado at Boulder.
The Board has determined that John C. Mollenkopf qualifies as an independent director under the director independence standards set forth in the rules and regulations of the Securities and Exchange Commission and the applicable listing standards of the New York Stock Exchange ("NYSE").
Paul M. Rady, Chairman and CEO of Antero Midstream commented, "We are very excited to announce the addition of John to the board of directors. We have known and worked with John for many years in his various roles with MarkWest and MPLX. He has a deep knowledge of and expertise in midstream operations and business development, particularly in the Northeast, and will be a valuable asset for Antero Midstream and its unitholders."
Conditional Resignation of Brooks J. Klimley from the Board of Directors
In connection with the proposed offering of Common Shares representing limited partner interests ("Common Shares") in Antero Midstream GP LP ("AMGP"), effective as of and conditioned upon the listing of the Common Shares on the NYSE and his appointment to the board of directors of AMGP GP LLC, a Delaware limited liability company that will serve as general partner of AMGP, Brooks J. Klimley resigned as a member of the Board. If the Common Shares are not listed on the NYSE, Mr. Klimley will remain a member of the Board of Antero Midstream. This resignation was not the result of any disagreements with the Partnership regarding any matter related to its operations, policies, practices or otherwise.
Antero Midstream is a limited partnership that owns, operates and develops midstream gathering, compression, processing and fractionation assets as well as integrated water assets that primarily service Antero Resources' properties located in West Virginia and Ohio.
For more information, contact Michael Kennedy – CFO of Antero Midstream at (303) 357-6782 or mkennedy@anteroresources.com.
SOURCE Antero Midstream Partners LP
DENVER, Feb. 6, 2017 /PRNewswire/ -- Antero Midstream Partners LP (NYSE: AM) ("Antero Midstream" or the "Partnership") announced today the pricing of an upsized underwritten public offering of 6,000,000 common units representing limited partner interests in Antero Midstream (the "Offering") at a public offering price of $33.00 per common unit for aggregate gross proceeds of approximately $198 million before estimated offering expenses. In addition, the Partnership has also granted the underwriters a 30-day option to purchase up to an additional 900,000 common units.
The Partnership expects to use the net proceeds from the Offering, including the proceeds from any exercise of the underwriters' option to purchase additional common units, for general partnership purposes, including to repay a portion of the outstanding borrowings under its revolving credit facility. These borrowings include amounts incurred on February 6, 2017 to fund the recently announced Appalachian processing and fractionation joint venture with MPLX, LP (NYSE: MPLX).
Barclays and Wells Fargo Securities are acting as joint book-running managers for the Offering.
The Offering is being made pursuant to an effective registration statement on Form S-3 previously filed with the Securities and Exchange Commission ("SEC"). The Offering is being made only by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, copies of which, when available, may be obtained from:
Barclays c/o Broadridge Financial Solutions 1155 Long Island Avenue Edgewood, New York 11717 barclaysprospectus@broadridge.com Toll-Free: (888) 603-5847 |
Wells Fargo Securities c/o Equity Syndicate Department 375 Park Avenue New York, New York 10152 cmclientsupport@wellsfargo.com Toll-Free: (800) 326-5897 |
You may also get these documents for free by visiting the SEC's website at www.sec.gov. This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described above, nor shall there be any sale of such securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Antero Midstream is a limited partnership that owns, operates and develops midstream gathering and compression assets as well as integrated water assets that primarily service Antero Resources' properties located in West Virginia and Ohio.
This release includes "forward-looking statements" within the meaning of federal securities laws. Such forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Partnership's control. All statements, other than historical facts included in this release, are forward-looking statements. All forward-looking statements speak only as of the date of this release and are based upon a number of assumptions. Although the Partnership believes that the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that the assumptions underlying these forward-looking statements will be accurate or the plans, intentions or expectations expressed herein will be achieved. For example, future acquisitions, dispositions or other strategic transactions may materially impact the forecasted or targeted results described in this release. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements. Nothing in this release is intended to constitute guidance with respect to Antero Resources.
Antero Midstream cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond the Partnership's control, incident to the gathering and compression and fresh water and waste water treatment business. These risks include, but are not limited to, Antero Resources' expected future growth, Antero Resources' ability to meet its drilling and development plan, commodity price volatility, ability to execute the Partnership's business strategy, competition and government regulations, actions taken by third-party producers, operators, processors and transporters, inflation, environmental risks, drilling and completion and other operating risks, regulatory changes, the uncertainty inherent in projecting future rates of production, cash flow and access to capital, the timing of development expenditures, and the other risks described under "Risk Factors" in Antero Midstream's Annual Report on Form 10-K for the quarter ended December 31, 2015.
For more information, contact Michael Kennedy – CFO of Antero Midstream at (303) 357-6782 or mkennedy@anteroresources.com.
SOURCE Antero Midstream Partners LP
DENVER, Feb. 6, 2017 /PRNewswire/ -- Antero Midstream Partners LP (NYSE: AM) ("Antero Midstream" or the "Partnership") announced today that it has commenced an underwritten public offering of 5,000,000 common units representing limited partner interests in Antero Midstream (the "Offering"). In addition, the Partnership anticipates granting the underwriters a 30-day option to purchase up to an additional 750,000 common units.
The Partnership expects to use the net proceeds from the Offering, including the proceeds from any exercise of the underwriters' option to purchase additional common units, for general partnership purposes, including to repay a portion of the outstanding borrowings under our revolving credit facility. These borrowings include amounts incurred on February 6, 2017 to fund the recently announced Appalachian processing and fractionation joint venture with MPLX, LP (NYSE: MPLX).
Barclays and Wells Fargo Securities will act as joint book-running managers for the Offering.
The Offering is being made pursuant to an effective registration statement on Form S-3 previously filed with the Securities and Exchange Commission ("SEC"). The Offering is being made only by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, copies of which, when available, may be obtained from:
Barclays c/o Broadridge Financial Solutions 1155 Long Island Avenue Edgewood, New York 11717 barclaysprospectus@broadridge.com Toll-Free: (888) 603-5847 |
Wells Fargo Securities c/o Equity Syndicate Department 375 Park Avenue New York, New York 10152 cmclientsupport@wellsfargo.com Toll-Free: (800) 326-5897 |
You may also get these documents for free by visiting the SEC's website at www.sec.gov. This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described above, nor shall there be any sale of such securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Antero Midstream is a limited partnership that owns, operates and develops midstream gathering and compression assets as well as integrated water assets that primarily service Antero Resources' properties located in West Virginia and Ohio.
This release includes "forward-looking statements" within the meaning of federal securities laws. Such forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Partnership's control. All statements, other than historical facts included in this release, are forward-looking statements. All forward-looking statements speak only as of the date of this release and are based upon a number of assumptions. Although the Partnership believes that the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that the assumptions underlying these forward-looking statements will be accurate or the plans, intentions or expectations expressed herein will be achieved. For example, future acquisitions, dispositions or other strategic transactions may materially impact the forecasted or targeted results described in this release. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements. Nothing in this release is intended to constitute guidance with respect to Antero Resources.
Antero Midstream cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond the Partnership's control, incident to the gathering and compression and fresh water and waste water treatment business. These risks include, but are not limited to, Antero Resources' expected future growth, Antero Resources' ability to meet its drilling and development plan, commodity price volatility, ability to execute the Partnership's business strategy, competition and government regulations, actions taken by third-party producers, operators, processors and transporters, inflation, environmental risks, drilling and completion and other operating risks, regulatory changes, the uncertainty inherent in projecting future rates of production, cash flow and access to capital, the timing of development expenditures, and the other risks described under "Risk Factors" in Antero Midstream's Annual Report on Form 10-K for the quarter ended December 31, 2015.
For more information, contact Michael Kennedy – CFO of Antero Midstream at (303) 357-6782 or mkennedy@anteroresources.com.
SOURCE Antero Midstream Partners LP
DENVER, Feb. 6, 2017 /PRNewswire/ -- Antero Midstream Partners LP (NYSE: AM) ("Antero Midstream" or the "Partnership") today announced the formation of a joint venture to develop processing and fractionation assets in Appalachia (the "Joint Venture" or the "JV") with MarkWest Energy Partners, L.P. ("MarkWest"), a wholly owned subsidiary of MPLX, LP (NYSE: MPLX) ("MPLX"). Antero Midstream and MarkWest will each own a 50% interest in the Joint Venture and MarkWest will operate the Joint Venture assets. Antero Midstream also announced increased 2017 guidance.
Highlights Include:
Joint Venture
Antero Midstream and MarkWest will jointly develop processing assets at the Sherwood processing facility in Doddridge County, WV, and an additional still to be designated facility also located in West Virginia in the southwestern core of the Marcellus Shale. The assets are underpinned by long-term, fee-based agreements pursuant to which the Joint Venture will process Antero Resources Corporation's ("Antero Resources") (NYSE: AR) liquids-rich production from the Marcellus Shale. As part of the agreement, Antero Midstream will release to the Joint Venture its right to provide processing services on 195,000 gross acres held by Antero Resources in Ritchie, Tyler, and Wetzel Counties in West Virginia.
The Joint Venture participation will begin with the next three plants at the Sherwood processing facility, which are under development and scheduled to be placed into service during the first quarter of 2017, third quarter of 2017, and first quarter of 2018. The Joint Venture will not participate in the six existing Sherwood plants, which will continue to be owned and operated solely by MarkWest. The existing plants have the capacity to process over 1.2 Bcf per day of liquids-rich gas and are currently running at full capacity. The Joint Venture processing facilities, starting with the seventh plant, will be operated by MarkWest and have the potential to support an incremental eleven plants, or 2.2 Bcf per day of capacity, to facilitate liquids-rich production growth from Antero Resources.
In addition to the processing assets, the Joint Venture will own C3+ fractionation capacity at the Hopedale complex in Harrison County, Ohio supported by Antero Resources and other third party producers. The Hopedale complex, which is operated by MarkWest and its affiliates, currently includes three 60,000 Bbl/d fractionators that fractionate natural gas liquids from both the Marcellus and Ohio Utica Shales, and provides access to strategic liquids pipelines including Mariner East, Mariner West, TEPPCO, and Cornerstone. The Joint Venture will own a 33 1/3% interest in the recently commissioned third fractionator at the Hopedale complex. The Joint Venture will have the option to participate in additional fractionation capacity in the future, contingent on further C3+ NGL production growth.
Antero Midstream expects to invest up to $800 million through 2020, net to its 50% ownership interest in the joint venture. Approximately $155 million of the $800 million investment was made upon execution of the definitive agreements and represented capital related to the Sherwood processing plants and the Hopedale fractionation facility.
Paul Rady, Chairman and CEO of Antero Midstream said, "We are very excited about the opportunity to invest in the largest processing and fractionation footprint in the Northeast and support it with the largest core liquids-rich resource base in Appalachia. The accretive Joint Venture represents a big step towards executing Antero Midstream's full value chain organic growth strategy supporting Antero Resources."
Mr. Rady further added, "The joint venture capitalizes on the strong relationship between Antero and MarkWest, and now MPLX, and the long track record and deep expertise in developing processing and fractionation assets, particularly in the Northeast. This premier partnership will economically align a dominant resource and infrastructure footprint unparalleled in Appalachia."
Increased 2017 Guidance and Long-Term Targets
Driven by the Joint Venture, Antero Midstream is increasing its forecast for net income to $305 million to $345 million, adjusted EBITDA to $520 million to $560 million and distributable cash flow ("DCF") to $405 million to $445 million for 2017. Additionally, Antero Midstream's peer-leading distribution growth of 28% to 30% as compared to 2016 remains unchanged, resulting in an average DCF coverage ratio of 1.30x to 1.45x on an annual basis. Antero Midstream has also revised its 2017 capital expenditure budget to $800 million.
Below is a comparison of the 2017 updated guidance and long-term targets to previously provided 2017 guidance and long-term targets.
Previous Guidance |
Updated Guidance |
||||||||
2017 Financial Guidance |
Low |
High |
Low |
High |
% Change | ||||
Net Income ($MM) |
$295 |
— |
$335 |
$305 |
— |
$345 |
3% | ||
Adjusted EBITDA ($MM) |
$510 |
— |
$550 |
$520 |
— |
$560 |
2% | ||
Distributable Cash Flow ($MM) |
$395 |
— |
$435 |
$405 |
— |
$445 |
2% | ||
Year-Over-Year Distribution Growth |
28% |
— |
30% |
28% |
— |
30% |
— | ||
DCF Coverage Ratio |
1.30x |
— |
1.45x |
1.30x |
— |
1.45x |
— | ||
Capital Expenditures ($MM) |
$525 |
$800 |
52% | ||||||
2018 – 2020 Long-Term Targets |
Previous Target |
Updated Target |
% Change | ||||||
Annual Distribution Growth |
28% — 30% |
28% — 30% |
— | ||||||
DCF Coverage Ratio |
>1.20x |
>1.25x |
4% | ||||||
Leverage |
Low 2-times range |
Low 2-times range |
— |
Michael Kennedy, CFO of Antero Midstream said, "The visibility into Antero Resources' development plan allows Antero Midstream and MPLX to invest in attractive rate of return projects with 4-times to 6-times investment to buildout EBITDA multiples. Additionally, Antero Midstream is benefitting from investing in significant projects that will be placed in-service almost immediately, improving overall project returns and resulting in accretion to distributable cash flow. This attractive organic expansion opportunity allows Antero Midstream to target peer-leading compound annual distribution growth of 28% to 30% through 2020, while maintaining a healthy balance sheet and increasing its DCF coverage to over 1.25x in the corresponding period."
Presentation
An updated presentation will be posted to the Partnership's website. The presentation can be found at www.anteromidstream.com on the homepage. Information on the Partnership's website does not constitute a portion of this press release.
Non-GAAP Financial Measures
Antero Midstream views Adjusted EBITDA as an important indicator of the Partnership's performance. Antero Midstream defines Adjusted EBITDA as Net Income before equity-based compensation expense, interest expense, depreciation expense, accretion of contingent acquisition consideration, excluding pre-acquisition income and expenses attributable to the parent and equity in earnings of unconsolidated affiliate, and including cash distributions from unconsolidated affiliate.
Antero Midstream uses Adjusted EBITDA to assess:
The Partnership defines Distributable Cash Flow as Adjusted EBITDA less cash interest paid, income tax withholding payments and cash reserved for payments upon vesting of equity-based compensation awards and ongoing maintenance capital expenditures paid, excluding pre-acquisition amounts attributable to the parent plus cash distribution to be received from unconsolidated affiliate. Antero Midstream uses Distributable Cash Flow as a performance metric to compare the cash generating performance of the Partnership from period to period and to compare the cash generating performance for specific periods to the cash distributions (if any) that are expected to be paid to unitholders. Distributable Cash Flow does not reflect changes in working capital balances.
Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial measures. The GAAP measure most directly comparable to Adjusted EBITDA and Distributable Cash Flow is Net Income. The non-GAAP financial measures of Adjusted EBITDA and Distributable Cash Flow should not be considered as alternatives to the GAAP measure of Net Income. Adjusted EBITDA and Distributable Cash Flow are not presentations made in accordance with GAAP and have important limitations as an analytical tool because they include some, but not all, items that affect Net Income and Adjusted EBITDA. You should not consider Adjusted EBITDA and Distributable Cash Flow in isolation or as a substitute for analyses of results as reported under GAAP. Antero Midstream's definition of Adjusted EBITDA and Distributable Cash Flow may not be comparable to similarly titled measures of other partnerships.
Antero Midstream does not provide guidance on equity earnings, among other items, that are reconciling items between forecasted Adjusted EBITDA and forecasted Net Income due to the uncertainty regarding timing and estimates of reconciling items. Antero Midstream provides a range for the forecasts of Net Income, Adjusted EBITDA, and Distributable Cash Flow to allow for the variability in timing and uncertainty of estimates of reconciling items between forecasted Adjusted EBITDA and forecasted Net Income. Therefore, the Partnership cannot reconcile Adjusted EBITDA to forecasted Net Income without unreasonable effort.
Antero Midstream is a limited partnership that owns, operates and develops midstream gathering and compression assets located in West Virginia and Ohio, as well as integrated water assets that primarily service Antero Resources' properties located in West Virginia and Ohio.
This release includes "forward-looking statements" within the meaning of federal securities laws. Such forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Partnership's control. All statements, other than historical facts included in this release, are forward-looking statements. All forward-looking statements speak only as of the date of this release and are based upon a number of assumptions. Although the Partnership believes that the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that the assumptions underlying these forward-looking statements will be accurate or the plans, intentions or expectations expressed herein will be achieved. For example, future acquisitions, dispositions or other strategic transactions may materially impact the forecasted or targeted results described in this release. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements. Nothing in this release is intended to constitute guidance with respect to Antero Resources.
Antero Midstream cautions you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond the Partnership's control, incident to the gathering and compression and fresh water and waste water treatment business. These risks include, but are not limited to, Antero Resources' expected future growth, Antero Resources' ability to meet its drilling and development plan, commodity price volatility, ability to execute the Partnership's business strategy, competition and government regulations, actions taken by third-party producers, operators, processors and transporters, inflation, environmental risks, drilling and completion and other operating risks, regulatory changes, the uncertainty inherent in projecting future rates of production, cash flow and access to capital, the timing of development expenditures, and the other risks described under "Risk Factors" in Antero Midstream's Annual Report on Form 10-K for the quarter ended December 31, 2015.
For more information, contact Michael Kennedy – CFO of Antero Midstream at (303) 357-6782 or mkennedy@anteroresources.com.
SOURCE Antero Midstream Partners LP
DENVER, Jan. 30, 2017 /PRNewswire/ -- John M. Fox, beneficial owner of 1,542,072 MPLX common units, and 20,900 shares of Marathon Petroleum Company, today reaffirms his stance against Marathon Petroleum Corporation's proposed January 3, 2017 plan and offers additional support for a plan that provides immediate uplift in value for MPC shareholders.
A new slide deck highlighting key points on growth and valuation implications can be found at www.itjustmakessensegary.com.
John Fox commented, "The engagement that I have had with investors, analysts and other stakeholders since my open letter to management on January 11, 2017, has confirmed that there are many that also share my concern around management's proposed path forward. The proposed plan is just another complex financial engineering plot that has too many unanswered questions that ultimately sends MPLX down a slow growth path of value destruction. As MPLX's largest unitholder, MPC must understand the implications that growth expectations at the MPLX level have on its own value.
"Companies with slow distribution growth are put in the penalty box, putting downward pressure on the unit price and upward pressure on the yield. Based on our analysis of the MLP space, under a high growth valuation scenario MPLX could expect to attract a 4.1% yield implying a $55.12 per unit price, a 50% uplift to market close on January 12, 2017. Alternatively, under a slow growth plan like the one MPC is currently proposing, MPLX could expect to attract a 7.8% yield implying a $28.97 per unit price, a 20% decline in value compared to the market close on January 12, 2017. This swing has material implications for MPC shareholders. By dropping down slow growth refining assets, MPLX's organic growth assets will be strangled, diminishing MPC's fully integrated value.
"Don't put MPLX in the penalty box. Our simple and less risky plan puts us on a growth path to value creation. If managed properly, MPLX has years of double digit organic growth ahead with high rate of return projects built on its substantial core infrastructure. This high growth path retains management's focus on high-return EBITDA projects in the Marcellus. We estimate the adoption of our plan results in an immediate uplift in value for MPC shareholders of between $20-$30 per share.
"The high growth path is the only real path to value creation for MPC and MPLX. Execute the IDR elimination plan immediately at a fair and transparent price and set MPLX free with its own focused and growth driven management team. It Just Makes Sense!"
About John M. Fox
John Fox is the co-founder of MarkWest Hydrocarbon, former CEO, Chairman and Director of MarkWest Energy GP, L.L.C. ("MarkWest GP"), the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial owner of 1,542,072 MPLX common units, and 20,900 shares of Marathon Petroleum Company, through its merger with MarkWest in 2015 and from follow-on investments. Mr. Fox worked to eliminate the Incentive Distribution Rights (IDRs) at MarkWest in 2007, creating tremendous value that ultimately led to the successful acquisition of MWE by MPLX in 2015. MarkWest generated a 143.3% total return and grew from a $1.2 billion market cap to an $8.6 billion market cap for the period of September 5, 2007, when the IDRs were eliminated, to December 4, 2015.
Disclosure:
John Fox is providing this material for general informational purposes only. None of the information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those of Mr. Fox as of January 26, 2017 and are subject to change at any time due to changes in market, economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other member of the Fox family. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
Contact:
John Fox
Johnfox@itjustmakessensegary.com
720-213-6439
www.itjustmakessensegary.com
SOURCE John M. Fox
DENVER, Jan. 11, 2017 /PRNewswire/ -- John M. Fox, the co-founder of MarkWest Hydrocarbon, former CEO, Chairman and Director of MarkWest Energy GP, L.L.C. ("MarkWest GP"), the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial owner of 1,542,072 MPLX common units, and 15,900 shares of Marathon Petroleum Corporation through its merger with MarkWest in 2015 and from follow-on investments, today released the following open letter to the board of directors of Marathon Petroleum Corporation (MPC) outlining how the accelerated dropdown of refining assets hurts long-term MPC value and vastly diminishes growth prospects at MPLX.
John Fox is providing this material for general informational purposes only. None of the information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those of Mr. Fox as of January 11, 2017 and are subject to change at any time due to changes in market, economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other member of the Fox family.
The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
Mr. Fox has created a website with his materials at: www.itjustmakessensegary.com
The full text of the letter follows:
January 11, 2017
Board of Directors
Marathon Petroleum Corporation
539 S Main St
FINDLAY, OH 45840-3229
Attention: Gary Heminger, Chairman, President and Chief Executive Officer
To the Board of Directors of Marathon Petroleum Corporation:
There are fundamental flaws and too many questions with Marathon Petroleum Corporation's (MPC) January 3, 2017 Plan that we believe will destroy long-term value for MPC and MPLX.
As you know, I am the co-founder of MarkWest Hydrocarbon, and a former Chairman, Chief Executive Officer and director of MarkWest Energy GP, L.L.C. As of this date, through the merger of MPLX and MarkWest on December 4, 2015, and from follow-on investment, I am the beneficial owner of 1,542,072 common units of MPLX, LP and 15,900 shares of Marathon Petroleum Corporation.
As a shareholder of MPC and a unitholder of MPLX, I agree with you and Elliott Management Corporation's shared opinion that MPC is undervalued. By eliminating the Incentive Distribution Rights (IDRs) at MarkWest in 2007, we created tremendous value that ultimately led to the successful acquisition of MWE by MPLX in 2015. MWE generated a 143.3% total return and grew from a $1.2 billion market cap to an $8.6 billion market cap for the period of September 5, 2007, when the IDRs were eliminated, to December 4, 2015.
Based on my experience and countless hours my team and I spent at MWE analyzing the many disincentives associated with the IDRs, I know first-hand the drag that can be caused by the IDR structure. As a result, I strongly support Marathon Petroleum Corporation commitment to exchange its IDRs for LP units in MPLX. However, the accelerated "dropdown" of refining assets hurts long-term MPC value, vastly diminishes growth prospects at MPLX and raises the cost of capital for both.
As I pointed out, I successfully eliminated the IDR burden at MarkWest and I know these MPLX assets. MPLX has the premier infrastructure position in the largest emerging gas basin in the U.S. If it is managed properly, MPLX now has years of growth ahead with high rate of return projects built on its substantial core infrastructure. Incurring debt and unit dilution to buy low return, zero growth refining assets makes no sense for MPLX and places an unnecessary burden on the fully integrated refining assets of MPC.
In addition, Moody's has also taken notice of the possible negative ramifications from this most recent proposal by changing MPC's outlook to negative from stable. Below is highlighted commentary from the Moody's press release that aligns with our opinion of this value destructive plan.
"In a continuation of its focus on enhancing shareholder value, MPC has proposed a series of transactions between itself and MPLX intended to fund a substantial, ongoing return of capital to MPC shareholders, the result of which is leveraging on both a consolidated and stand-alone basis at MPC," commented Andrew Brooks, Moody's Vice President.
As we are all well aware, there is a direct relationship between growth and yield valuations. With this in mind, dropdowns from MPC will actually stunt long-term growth at MPLX and may restrict available capital for high return, high growth and time sensitive organic investments at MPLX.
Additionally, MPC is primarily focused around a cyclical, slow-growth refining business while MPLX's organic growth opportunities are focused primarily around natural gas gathering and processing – a high-growth business requiring nimble management focused on customer service and performance.
The proposed dropdown assets are core strategic assets for a refining company to source low cost crude and maximize value of refined products thereby maximizing its "crack spread." With these assets in MPLX's hands, MPC is weaker.
Lastly, Timothy T. Griffith, Chief Financial Officer and Senior Vice President of MPC, pointed out on the January 3, 2017 investor call, "...I don't think we've got any absolute clarity on when that happens," referring to timing of the $600 million of dropdowns that are tied up in regulatory clearances. This uncertainty on timing could likely delay or terminate the IDR elimination plan.
The boards of MPLX, MPC and importantly the MPLX conflicts committee have a duty to investors to consider the long-term value destruction and potential inflation of the GP valuation that is inherent with the plan put forward on January 3, 2017.
There are fundamental questions that need to be answered definitively.
Set MPLX Free
The roadmap to create real value is clear. MPC and MPLX need to execute the IDR elimination plan immediately at a fair and transparent price without burdening MPLX with dropdown assets. After IDR elimination, spin out MPC's current ownership of 87 million MPLX units, plus resulting MPLX units from IDR exchange to MPC shareholders. We estimate the resulting immediate uplift in value for MPC shareholders ranges between $20 and $30 per MPC share.
For MPLX, capital is being siphoned away from meaningful growth opportunities. Without the IDR Burden, MPLX could add assets in some of America's best resource plays like the Marcellus and Utica in the Appalachian Basin, and the SCOOP and STACK plays in Oklahoma.
MPLX in its December 2016 investor presentation outlines a "Strong base business with robust growth opportunities" and highlights "Leading the development of Marcellus and Utica Shale play infrastructure." The company also outlines forward estimates $1.1 billion to $1.2 billion and $1.2 billion to $1.6 billion of organic capital investment in 2016 and 2017, respectively. I know these assets and what they are capable of when the right financial structure is put behind them and the right financial structure is one that puts the most cash to work to grow the business.
I'm asking the board to consider an immediate IDR elimination plan at a fair and transparent price without burdening MPLX with dropdown assets and spinning out of resulting MPLX units to MPC shareholders. Our plan outlines a superior uplift in value for both MPC and MPLX with lower operational and financial risks and better growth going forward. At the end of the day, the companies with the best growth prospects and the lowest cost of capital will win. It just makes sense!
Sincerely,
John Fox
Any quotation of analysts herein does not necessarily indicate that such analysts support the views expressed herein, or indicate that Mr. Fox necessarily agrees with the views of such analysts. Mr. Fox has not sought or obtained consent from any third party for the use of previously published information, and any such statements of information should not be viewed as indicating the support of such third party for the views expressed by Mr. Fox.
Contact:
John Fox
johnfox@itjustmakessensegary.com
720-213-6439
www.itjustmakessensegary.com
SOURCE John M. Fox
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Parent Entities:
MPLX LP
Argo Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Ascension Pipeline Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Marathon Pipe Line LLC
EnLink Midstream, LLC
Bear Creek NGL Project (subscriber access)
Status: (subscriber access)
Parent Entities:
MarkWest Energy Partners LP
Carson Crude Terminal Expansion (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Cornerstone Pipeline (subscriber access)
Status: (subscriber access)
Parent Entities:
Marathon Pipe Line LLC
Cushing-to-Patoka Expansion (subscriber access)
Status: (subscriber access)
Parent Entities:
Marathon Pipe Line LLC
MPLX LP
MPLX Ozark Pipe Line LLC
Dickinson Renewable Diesel Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Marathon Petroleum Corporation
Galveston Bay Refinery Reconfiguration Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Marathon Petroleum Corporation
Garyville Coker 3 Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Marathon Petroleum Corporation
Garyville Crude Oil Revamp - Coker Upgrades (subscriber access)
Status: (subscriber access)
Parent Entities:
Marathon Petroleum Corporation
Green Bison Soy Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
ADM
Marathon Petroleum Corporation
Gulf Coast C2+ Fractionation (MPLX) (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Harmon Creek II Natural Gas Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Harmon Creek Processing Plant & Fractionator (subscriber access)
Status: (subscriber access)
Parent Entities:
MarkWest Energy Partners LP
Hickory Hills Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
Centrahoma Processing, LLC
Hopedale IV C3+ Fractionation (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Houston I Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
MarkWest Energy Partners LP
Keystone Natural Gas Processing Expansion (subscriber access)
Status: (subscriber access)
Parent Entities:
MarkWest Energy Partners LP
Majorsville Natural Gas Processing Plant Expansion (subscriber access)
Status: (subscriber access)
Parent Entities:
MarkWest Energy Partners LP
Majorsville VII Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
MarkWest Energy Partners LP
Marathon Robinson Refinery Expansion (subscriber access)
Status: (subscriber access)
Parent Entities:
Marathon Petroleum Corporation
MarkWest Hidalgo Processing Project (subscriber access)
Status: (subscriber access)
Parent Entities:
MarkWest Energy Partners LP
MarkWest Liberty NGL Pipeline (subscriber access)
Status: (subscriber access)
Parent Entities:
MarkWest Liberty NGL Pipeline, L.L.C
Martinez Renewable Fuel Project (subscriber access)
Status: (subscriber access)
Parent Entities:
Marathon Petroleum Corporation
Mobley Expansion (subscriber access)
Status: (subscriber access)
Parent Entities:
MarkWest Energy Partners LP
Mt. Airy Terminal Expansion (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Omega 2 Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Omega Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Ozark Pipeline Expansion Project (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
MPLX Pipe Line Holdings LLC
Patoka Tank Farm (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Preakness II Natural Gas Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Preakness Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Robinson Butane Cavern (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
SLC Core Expansion (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Secretariat Natural Gas Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Sherwood C2 Fractionation (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Sherwood Expansion - Plant 10 (subscriber access)
Status: (subscriber access)
Parent Entities:
Antero Midstream Partners LP
MarkWest Energy Partners LP
Sherwood Expansion - Plant 11 (subscriber access)
Status: (subscriber access)
Parent Entities:
Antero Midstream Partners LP
MarkWest Energy Partners LP
Sherwood Expansion - Plant 12 (subscriber access)
Status: (subscriber access)
Parent Entities:
MarkWest Energy Partners LP
Sherwood Expansion - Plant 13 (subscriber access)
Status: (subscriber access)
Parent Entities:
MarkWest Energy Partners LP
Sherwood Expansion - Plant 7 (subscriber access)
Status: (subscriber access)
Parent Entities:
MarkWest Energy Partners LP
Antero Midstream Partners LP
Sherwood Expansion - Plant 8 (subscriber access)
Status: (subscriber access)
Parent Entities:
Antero Midstream Partners LP
MarkWest Energy Partners LP
Sherwood Expansion - Plant 9 (subscriber access)
Status: (subscriber access)
Parent Entities:
Antero Midstream Partners LP
MarkWest Energy Partners LP
Smithburg 1 Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Smithburg 2 Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Smithburg 3 Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Smithburg 4 Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Smithburg 5 Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Smithburg De-Ethanizer (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Smithburg Processing Complex (subscriber access)
Status: (subscriber access)
Parent Entities:
MarkWest Energy Partners LP
Antero Midstream Partners LP
South Texas Asset Repositioning (STAR) Program (subscriber access)
Status: (subscriber access)
Parent Entities:
Marathon Petroleum Corporation
South Texas Gateway Terminal (subscriber access)
Status: (subscriber access)
Parent Entities:
Buckeye Partners, L.P.
Phillips 66 Partners LP
Marathon Petroleum Corporation
Tesoro High Plains Pipeline Expansion - Connolly Gathering System (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Texas City NGL Export Terminal (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Texas City Tank Farm (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Torñado 2 Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Torñado Processing Plant (subscriber access)
Status: (subscriber access)
Parent Entities:
MPLX LP
Whistler Martin County Lateral Expansion (subscriber access)
Status: (subscriber access)
Parent Entities:
Whistler Pipeline LLC
Whistler Pipeline Capacity Expansion (subscriber access)
Status: (subscriber access)
Parent Entities:
Whistler Pipeline LLC
Wood River-to-Patoka Pipeline Expansion (subscriber access)
Status: (subscriber access)
Parent Entities:
Marathon Pipe Line LLC
MPLX LP
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