MPLX LP Quarterly Report for Q2 Ended Jun 30, 2014

Summary

MPLX LP reported solid financial performance for the second quarter and first six months of 2014, demonstrating growth driven by increased related-party sales and higher average tariffs. Total revenues and other income saw a notable increase, largely fueled by a significant rise in sales to related parties, primarily Marathon Petroleum Corporation (MPC), reflecting expanded services and potentially higher throughput. While third-party volumes saw a slight decrease, strategic acquisitions, including an increased stake in Pipe Line Holdings, contributed to the company's growth trajectory. The company also maintained healthy operational cash flow, which supported its dividend payouts and capital expenditure plans. Management's outlook remains positive, emphasizing continued growth and attractive distribution policies. Financially, MPLX LP showed a healthy increase in net income attributable to MPLX LP and its limited partners, highlighting improved operational efficiency and revenue generation. The company's balance sheet indicates a robust asset base, with significant investments in property, plant, and equipment. Liquidity appears sufficient, supported by operating cash flows and available credit facilities. The increased debt level is primarily attributable to the financing of strategic acquisitions. Overall, the report indicates a company on a growth path, leveraging its relationship with MPC while expanding its midstream operations.

Key Highlights

• 1MPLX LP's net income attributable to limited partners increased by approximately 50% to $27.6 million for the three months ended June 30, 2014, compared to $18.3 million in the prior year period.
• 2Sales to related parties (primarily MPC) increased by 11.2% to $108.1 million for the three months ended June 30, 2014, and by 19.0% to $221.9 million for the six months ended June 30, 2014.
• 3The company increased its ownership interest in Pipe Line Holdings to 69.0% as of March 1, 2014, through an acquisition funded by cash and borrowings, indicating strategic expansion.
• 4Net cash provided by operating activities increased by approximately 18.0% to $128.4 million for the six months ended June 30, 2014, compared to $108.6 million in the prior year period.
• 5The quarterly cash distribution per limited partner common unit increased to $0.3425 for the second quarter of 2014, up from $0.2850 in the prior year, reflecting a commitment to returning value to unitholders.
• 6Total assets decreased slightly to $1,181.4 million as of June 30, 2014, from $1,208.5 million as of December 31, 2013, mainly due to debt repayments and distributions.
• 7Long-term debt significantly increased to $264.4 million as of June 30, 2014, from $9.8 million as of December 31, 2013, primarily due to borrowings to finance the acquisition of an additional interest in Pipe Line Holdings.

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