10-QPeriod: Q1 FY2017

MPLX LP Quarterly Report for Q1 Ended Mar 31, 2017

Filed May 1, 2017For Securities:MPLXMPLXP

Summary

MPLX LP's first quarter 2017 earnings report, filed on April 30, 2017, shows a significant turnaround from the previous year. The company reported a net income attributable to MPLX LP of $150 million, a substantial improvement from a net loss of $60 million in the first quarter of 2016. This positive shift was driven by robust performance across both its Logistics and Storage (L&S) and Gathering and Processing (G&P) segments, bolstered by strategic acquisitions and organic growth initiatives. The company successfully integrated several key acquisitions, including pipeline, storage, and terminal assets from Marathon Petroleum Corporation (MPC), the Ozark pipeline, and a significant interest in the Bakken Pipeline system. These acquisitions, combined with strong operational execution and favorable market conditions, led to a substantial increase in total revenues and other income, reaching $886 million, up from $645 million in the prior year's comparable period. MPLX LP also demonstrated its commitment to unitholders by increasing its quarterly cash distribution to $0.5400 per unit.

Financial Highlights

37 data points
Beta

Revenue

$886.00M

Net Income

$150.00M

16.9% Net Margin

Total Assets

$18.29B

Cash & Equivalents

$265.00M

Free Cash Flow

$97.00M

Financial Statements
Beta
Revenue$886.00M
Operating Expenses$621.00M
Operating Income$265.00M
Net Income$150.00M

Key Highlights

  • 1Net income attributable to MPLX LP surged to $150 million for Q1 2017, a significant recovery from a $60 million net loss in Q1 2016.
  • 2Total revenues and other income increased by 37.4% to $886 million in Q1 2017, compared to $645 million in Q1 2016, driven by acquisitions and operational growth.
  • 3The L&S segment operating income attributable to MPLX LP grew by 77% to $156 million, largely due to the acquisition of HSM and improved performance of the Cornerstone Pipeline.
  • 4The G&P segment operating income attributable to MPLX LP rose by 20% to $309 million, supported by expansions in the Southwest, growth at several plants, and new fractionation capacity.
  • 5MPLX LP completed significant acquisitions during the quarter, including pipeline, storage, and terminal assets from MPC for approximately $1.5 billion plus equity, the Ozark pipeline for $220 million, and an interest in the Bakken Pipeline system for $500 million.
  • 6The company declared a quarterly cash distribution of $0.5400 per unit, a 7% increase from the first quarter of 2016, reflecting its commitment to returning capital to unitholders.
  • 7Total assets grew to $18.3 billion as of March 31, 2017, from $17.5 billion at the end of 2016, primarily due to acquisitions and asset development.

Frequently Asked Questions

The primary driver for the significant increase in net income to $150 million in Q1 2017 from a net loss in Q1 2016 was a combination of strong operational performance across both the Logistics and Storage (L&S) and Gathering and Processing (G&P) segments, and the successful integration of several key acquisitions, including assets from MPC and the Ozark pipeline. These factors led to higher revenues and improved operating income.

The recent acquisitions, such as the pipeline, storage, and terminal assets from MPC, the Ozark pipeline, and the interest in the Bakken Pipeline system, have significantly expanded MPLX LP's asset base and operational scale. This expansion contributed to a 37.4% increase in total revenues and other income and bolstered segment operating income, particularly in the L&S segment. While these acquisitions also increased total assets and long-term debt, they are expected to generate stable, fee-based earnings and contribute to the company's growth strategy.

MPLX LP demonstrated its commitment to unitholders by increasing its quarterly cash distribution to $0.5400 per unit, a 7% increase year-over-year. The company intends to maintain an attractive distribution growth profile over the long term, supported by expected cash flow from operations, credit facilities, and potential debt and equity issuances. The increased distribution reflects the company's confidence in its ongoing performance and growth strategy.

The G&P segment saw a 20% increase in operating income, driven by volume and product price increases. Key operational highlights include expansions in the Southwest, growth at the Sherwood, Majorsville, and Keystone plants, and the commencement of operations of a third fractionation train at the Hopedale complex. Processing volumes increased by approximately 9%, and fractionated volumes rose by approximately 14% compared to the prior year's quarter.