10-KPeriod: FY2012

MPLX LP Annual Report, Year Ended Dec 31, 2012

Filed March 25, 2013For Securities:MPLXMPLXP

Summary

MPLX LP, a master limited partnership focused on midstream energy infrastructure, filed its 2013 10-K detailing its operations and financial position as of December 31, 2012. The report highlights the company's significant reliance on its parent, Marathon Petroleum Corporation (MPC), as its primary customer and the existence of substantial conflicts of interest between MPLX LP and MPC. The filing also underscores the partnership's structure, which requires distributing all available cash to unitholders, necessitating external financing for growth. Investors should note the limited voting rights of unitholders and the extensive control retained by the general partner, which is controlled by MPC. The report also touches on potential risks related to internal controls, tax implications, and the terms of operational agreements. The company's financial performance in 2012 showed growth in revenues and income from operations, largely driven by fee-based contracts with MPC. The initial public offering (IPO) in October 2012 provided significant capital, with a portion retained for expansion capital expenditures and working capital. The company also outlined its intention to pay a minimum quarterly distribution of $0.2625 per unit. Key financial highlights include substantial property, plant, and equipment assets and a strong operational footprint in midstream infrastructure.

Financial Highlights

16 data points
Beta

Net Income

$13.10M

Total Assets

$1.30B

Cash & Equivalents

$217.00M

Financial Statements
Beta
Net Income$13.10M

Key Highlights

  • 1MPLX LP's operations are heavily dependent on Marathon Petroleum Corporation (MPC) as its primary customer, generating the substantial majority of its revenues.
  • 2Significant conflicts of interest exist between MPLX LP and its general partner (controlled by MPC), with the general partner able to prioritize its own interests over those of unitholders.
  • 3The partnership agreement mandates the distribution of all available cash, requiring reliance on external financing for growth and acquisitions.
  • 4Unitholders have limited voting rights and little ability to influence management decisions or remove the general partner.
  • 5The company completed its IPO in October 2012, raising capital and establishing a public trading presence on the NYSE.
  • 6MPLX LP intends to pay a minimum quarterly distribution of $0.2625 per unit, supported by fee-based contracts with MPC.
  • 7The report details extensive related-party transactions and agreements with MPC, including transportation, storage, and operational services.

Frequently Asked Questions

MPLX LP is a master limited partnership focused on owning, operating, developing, and acquiring pipelines and other midstream assets for the transportation and storage of crude oil, refined products, and other hydrocarbon-based products. The company primarily generates revenue by charging tariffs for transportation services and fees for storage services, with MPC being its largest customer.

Key risks include the significant conflicts of interest between MPLX LP and its general partner (controlled by MPC), which may lead to actions favoring MPC's interests over unitholders. The partnership's structure requires distributing all available cash, limiting internal growth funding, and unitholders have limited voting rights and control. Additionally, the company relies heavily on MPC for its revenue, making it susceptible to MPC's business decisions and financial health. There are also risks related to the general partner's discretion in managing reserves and potential dilution from future unit issuances.

The initial public offering (IPO) in October 2012 was a major event for MPLX LP. It allowed the company to raise significant capital ($407.1 million in net proceeds), establish a public listing on the NYSE, and provided MPC with cash and a stake in a publicly traded entity. A portion of the IPO proceeds was retained for expansion capital expenditures and working capital, demonstrating a strategy for future growth.

MPLX LP's partnership agreement requires the distribution of all available cash to unitholders. The company intends to pay a minimum quarterly distribution of $0.2625 per unit, which equates to an annualized distribution of $1.05 per unit. The actual amount of distributions is determined by the general partner, considering available cash, reserves, and the terms of the partnership agreement. The company's ability to grow distributions is linked to its ability to secure external financing for growth projects and potential acquisitions.