10-QPeriod: Q2 FY2013

MPLX LP Quarterly Report for Q2 Ended Jun 30, 2013

Filed August 8, 2013For Securities:MPLXMPLXP

Summary

MPLX LP's Q2 2013 10-Q filing indicates a period of growth and operational expansion following its October 2012 IPO. The company reported increased revenues, primarily driven by higher tariff rates on crude oil and product transportation, alongside a notable rise in related party sales. Significant investment in infrastructure, including an additional 5.0% stake in Pipe Line Holdings, highlights a strategic focus on asset development and consolidation. Despite an increase in operating expenses, particularly related party purchases, the company demonstrated solid operational performance with growing throughput volumes and a commitment to increasing unitholder distributions. The financial results reflect the ongoing integration of acquired assets and a strategic shift from its predecessor's reporting structure, emphasizing its evolution as a standalone master limited partnership.

Financial Highlights

30 data points
Beta

Revenue

$122.20M

Net Income

$18.60M

15.2% Net Margin

Total Assets

$1.22B

Cash & Equivalents

$115.30M

Free Cash Flow

$30.30M

Financial Statements
Beta
Revenue$122.20M
Operating Expenses$87.00M
Operating Income$35.20M
Net Income$18.60M

Key Highlights

  • 1Increased revenues by $11.8 million for Q2 2013 compared to Q2 2012, driven by higher tariffs and related party sales.
  • 2Acquisition of an additional 5.0% interest in Pipe Line Holdings for $100.0 million, increasing MPLX LP's ownership to 56.0%.
  • 3Capital expenditures for the first six months of 2013 totaled $46.6 million, with a significant portion allocated to expansion projects like the Patoka to Catlettsburg crude oil pipeline upgrade.
  • 4MPLX LP reported a net income attributable to MPLX LP of $18.6 million for Q2 2013, a decrease from $29.8 million in Q2 2012, largely due to changes in ownership structure and equity allocations.
  • 5The company declared a quarterly cash distribution of $0.2850 per unit, signaling an intent to grow distributions by 15-20% annually.
  • 6Operating cash flow remained strong, with $108.6 million generated in the first six months of 2013, an increase from $94.9 million in the prior year period.
  • 7Deferred revenue related to MPC's minimum volume deficiency payments stood at $18.3 million as of June 30, 2013, indicating potential future revenue recognition.

Frequently Asked Questions

MPLX LP is a fee-based, growth-oriented 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.

MPLX LP acquired an additional 5.0% interest in Pipe Line Holdings from Marathon Petroleum Corporation (MPC) on May 1, 2013, for $100.0 million in cash. This increased MPLX LP's ownership to 56.0%.

The term 'Predecessor' refers to MPLX LP Predecessor, which represents the accounting predecessor for periods prior to October 31, 2012. The financial statements prior to this date reflect the historical operations of assets that were later contributed to MPLX LP, and thus, are not directly comparable to MPLX LP's current operational results due to differences in structure and ownership.

MPLX LP has significant related-party transactions with MPC, its former sponsor. These include long-term, fee-based transportation and storage services agreements, operating agreements, management services, and an omnibus agreement covering various administrative and executive services. MPC is a major customer, accounting for a significant portion of MPLX LP's revenues.