10-QPeriod: Q1 FY2014

MPLX LP Quarterly Report for Q1 Ended Mar 31, 2014

Filed May 5, 2014For Securities:MPLXMPLXP

Summary

MPLX LP (MPLX) reported strong financial performance for the first quarter of 2014, with total revenues and other income increasing to $137.3 million from $114.7 million in the prior year's comparable period. This growth was largely driven by a significant increase in sales to related parties, primarily Marathon Petroleum Corporation (MPC), and higher tariff rates. Net income attributable to MPLX LP more than doubled to $34.2 million, leading to a substantial increase in net income per limited partner unit to $0.41 from $0.26. The company also saw a substantial increase in its long-term debt, largely due to borrowings of $270.0 million to fund the acquisition of an additional 13.0 percent interest in Pipe Line Holdings from MPC. This strategic acquisition effectively increased MPLX LP's ownership in its core pipeline assets. Despite the increased debt, the company maintained a healthy debt-to-EBITDA ratio, indicating solid financial footing. Distributions to unitholders also saw an increase, reflecting the company's commitment to returning value to its investors.

Financial Highlights

31 data points
Beta

Revenue

$131.00M

Net Income

$34.00M

26.0% Net Margin

Total Assets

$1.19B

Cash & Equivalents

$43.20M

Free Cash Flow

$66.80M

Financial Statements
Beta
Revenue$131.00M
Operating Expenses$81.00M
Operating Income$71.00M
Net Income$34.00M

Key Highlights

  • 1Net income attributable to MPLX LP more than doubled, increasing from $17.6 million in Q1 2013 to $34.2 million in Q1 2014.
  • 2Total revenues and other income rose by approximately 20%, from $114.7 million in Q1 2013 to $137.3 million in Q1 2014, driven significantly by increased sales to related parties.
  • 3MPLX LP completed the acquisition of an additional 13.0% interest in Pipe Line Holdings from MPC for $310 million, increasing its ownership to 69.0%. This acquisition was financed through cash on hand and $270 million in borrowings.
  • 4Net income per limited partner unit (basic and diluted) increased to $0.41 in Q1 2014, up from $0.26 in Q1 2013.
  • 5Cash distributions declared per limited partner common unit increased to $0.3275 from $0.2725 in the prior year's comparable period.
  • 6Long-term debt increased significantly to $279.6 million at March 31, 2014, primarily due to borrowings for the Pipe Line Holdings acquisition.
  • 7The company maintained a Consolidated Total Debt to Consolidated EBITDA ratio of 2.2 to 1.0 as of March 31, 2014, well within its covenant limit of 5.0 to 1.0.

Frequently Asked Questions

The primary driver for the increase in revenues and net income was a significant rise in sales to related parties, predominantly MPC. This was supported by higher average tariff rates and increased volumes on certain pipelines. The acquisition of an additional interest in Pipe Line Holdings also contributed to consolidated results.

The acquisition of the additional 13.0 percent interest in Pipe Line Holdings for $310 million was financed through a combination of $40.0 million of cash on hand and $270.0 million of borrowings under MPLX LP's revolving credit agreement.

MPLX LP demonstrated a positive trend in cash distributions. The cash distribution declared per limited partner common unit increased to $0.3275 in the first quarter of 2014, up from $0.2725 in the same period of 2013, reflecting the company's growth and commitment to unitholder returns.

The company's long-term debt increased significantly to $279.6 million as of March 31, 2014, from $9.8 million at December 31, 2013. This increase is primarily attributable to $270.0 million borrowed under its revolving credit facility to fund the Pipe Line Holdings acquisition. Despite this increase, the company remains in compliance with its debt covenants.