01—Abstract
Summary
Summary of the 10-K filed February 27, 2015. Cited figures are marked; the original filing is the authoritative source.
MPLX LP's 2015 10-K filing details its business as a fee-based, growth-oriented master limited partnership focused on midstream assets, primarily pipelines and storage for crude oil and refined products.
Formed by Marathon Petroleum Corporation (MPC), MPLX generates revenue through transportation tariffs and storage fees, operating under long-term, fee-based agreements with MPC that provide stable cash flows and minimum volume commitments. In 2014, MPLX significantly accelerated its growth strategy, evidenced by increased ownership in Pipe Line Holdings and new credit facilities. The company highlighted its commitment to increasing scale, funding organic projects, and pursuing acquisitions independently from its sponsor.
MPLX aims to support an average annual distribution growth rate in the mid-20s over the next five years. The filing also detailed the company's extensive asset base across the Midwest and Gulf Coast regions and its strategic relationship with MPC, which underpins a substantial portion of its revenue and provides opportunities for future growth.
02—Key points
Key Highlights
- MPLX LP operates as a fee-based midstream MLP, generating revenue primarily through transportation tariffs and storage fees.
- The company has a strong, strategic relationship with its sponsor, Marathon Petroleum Corporation (MPC), which accounts for the substantial majority of its revenues.
- MPLX completed significant transactions in 2014, including increasing its interest in Pipe Line Holdings, indicating a strategy to accelerate growth and expand its operational scale.
- The company has a stable and predictable cash flow profile due to long-term agreements with MPC, including minimum volume commitments.
- MPLX's asset base is strategically located in key refining and demand regions in the Midwest and Gulf Coast of the United States.
- The company announced plans to accelerate growth and evolve into a large-cap, diversified MLP, with a stated goal of supporting mid-20s average annual distribution growth over the next five years.
- MPLX closed a public offering of unsecured senior notes in February 2015, raising $500 million, and used proceeds to repay borrowings under its credit facility.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2014filed February 27, 2015Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $793.00M$486.00M | +63.2% |
| Operating Expenses | $548.00M$339.00M | +61.7% |
| Operating Income | $245.00M$213.00M | +15.0% |
| Net Income | $121.00M$78.00M | +55.1% |
05—Questions
Frequently Asked Questions
What is MPLX LP's primary business and revenue model?
MPLX LP operates as a fee-based master limited partnership focused on midstream assets, primarily pipelines and storage for crude oil and refined products. Its revenue is generated through transportation tariffs and storage fees, largely under long-term, fee-based agreements with its sponsor, Marathon Petroleum Corporation (MPC), which include minimum volume commitments.
What were the key developments for MPLX in 2014, and what is its growth strategy?
In 2014, MPLX significantly advanced its growth strategy by increasing its ownership in Pipe Line Holdings and securing new credit facilities. The company announced plans to accelerate its growth to become a large-cap, diversified MLP, aiming to fund organic projects and pursue acquisitions independently from MPC. The stated goal is to support an average annual distribution growth rate in the mid-20s over the next five years.
How dependent is MPLX on its sponsor, Marathon Petroleum Corporation (MPC)?
MPLX is highly dependent on MPC, as MPC accounts for the substantial majority of MPLX's revenues. MPC owns a significant stake in MPLX and has a stated intent to use MPLX to grow its midstream business, providing MPLX with substantial growth opportunities and a stable base of cash flows.
What is MPLX's financial position and liquidity as of December 31, 2014?
As of December 31, 2014, MPLX had $27.3 million in cash and cash equivalents and $692.3 million in total liquidity, including $665.0 million available under its credit facilities. The company had total long-term debt of $644.8 million, a significant increase from the prior year primarily due to financing acquisitions. MPLX reported net income of $121.3 million attributable to MPLX LP for the year.
06—Continue