10-QPeriod: Q3 FY2013

MPLX LP Quarterly Report for Q3 Ended Sep 30, 2013

Filed November 7, 2013For Securities:MPLXMPLXP

Summary

MPLX LP's third quarter 2013 report shows continued growth in revenues and operational activity, largely driven by its relationship with Marathon Petroleum Corporation (MPC). Total revenues and other income increased to $123.8 million for the quarter and $360.7 million for the nine months ended September 30, 2013, compared to the prior year periods. Net income attributable to MPLX LP was $21.5 million for the quarter, a decrease from $36.9 million in the prior year, primarily due to the acquisition of an additional interest in Pipe Line Holdings from MPC, which increased the noncontrolling interest. For the nine-month period, net income attributable to MPLX LP was $57.7 million, down from $101.9 million in the prior year. The company's operations are heavily integrated with MPC, which represents a significant portion of MPLX's revenues and expenses through various transportation and storage agreements. Despite a decrease in net income attributable to MPLX LP, the underlying operational performance, as indicated by metrics like Adjusted EBITDA and Distributable Cash Flow, shows resilience, with some components like higher average tariffs contributing positively to revenue. The company also highlighted its growth opportunities, including a new pipeline project in the Utica shale region, and maintained a strong liquidity position with significant cash generated from operations.

Financial Highlights

31 data points
Beta

Revenue

$123.80M

Net Income

$21.50M

17.4% Net Margin

Total Assets

$1.22B

Cash & Equivalents

$86.90M

Free Cash Flow

$18.30M

Financial Statements
Beta
Revenue$123.80M
Operating Expenses$84.00M
Operating Income$39.80M
Net Income$21.50M

Key Highlights

  • 1Total revenues and other income for the three months ended September 30, 2013, increased to $123.8 million, up from $121.1 million in the prior year quarter, driven by higher tariffs and related party sales.
  • 2Net income attributable to MPLX LP decreased to $21.5 million for the third quarter of 2013 from $36.9 million in the prior year, largely due to increased noncontrolling interest from the acquisition of an additional 5.0% stake in Pipe Line Holdings.
  • 3The company generated $167.1 million in net cash from operating activities for the nine months ended September 30, 2013, an increase of $45.3 million year-over-year, reflecting improved working capital management and higher depreciation.
  • 4MPLX LP acquired an additional 5.0% interest in Pipe Line Holdings from MPC for $100.0 million on May 1, 2013, increasing its ownership to 56.0% and impacting the noncontrolling interest in subsequent financial results.
  • 5Sales to related parties (primarily MPC) represented a significant portion of total revenues, amounting to $97.8 million for the quarter and $284.2 million for the nine months, reflecting the strong operational linkage.
  • 6The company announced plans for a new pipeline project in the Utica shale region, aimed at connecting production facilities with refineries and existing MPLX LP pipelines, signaling future growth initiatives.
  • 7MPLX LP maintained a healthy liquidity position, with $86.9 million in cash and cash equivalents at September 30, 2013, and a low debt-to-EBITDA ratio of 0.1 to 1.0, demonstrating financial stability.

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.

Total revenues and other income increased slightly to $123.8 million for the three months ended September 30, 2013, compared to $121.1 million in the same period of 2012. However, net income attributable to MPLX LP decreased to $21.5 million from $36.9 million in the prior year's quarter. This decrease was primarily due to the acquisition of an additional 5.0% interest in Pipe Line Holdings from MPC, which increased the noncontrolling interest.

MPC is MPLX LP's primary related party. MPC accounts for a substantial majority of MPLX LP's revenues and expenses through long-term, fee-based transportation and storage services agreements. MPLX's assets are integral to MPC's operations, and the ongoing relationship is a key driver of MPLX's business.

MPLX LP and MPC are developing a new pipeline project in the Utica shale region. This project aims to connect production facilities with MPC's Canton, Ohio refinery and other MPLX LP pipelines in the area, representing a significant growth opportunity for the company.