10-QPeriod: Q2 FY2017

MPLX LP Quarterly Report for Q2 Ended Jun 30, 2017

Filed August 3, 2017For Securities:MPLXMPLXP

Summary

MPLX LP (MPLX) reported strong financial performance for the second quarter and first half of 2017, with significant increases in revenues and operating income across both its Logistics and Storage (L&S) and Gathering and Processing (G&P) segments. This growth was driven by higher volumes, improved pricing, and the positive impact of recent acquisitions, including the significant contribution from the HST, WHC, and MPLXT assets acquired from MPC in March 2017, as well as the Ozark pipeline. The company also saw a substantial increase in net income attributable to MPLX LP, a marked improvement from the prior year's loss. Operating cash flow increased considerably, supported by strong operational performance and strategic financing activities, including substantial senior note issuances and equity offerings. Management remains optimistic about future growth, highlighting ongoing acquisition opportunities from MPC and continued capital investment in expansion projects. Investors should note the company's continued focus on deleveraging and its commitment to increasing unit-holder distributions, which have seen a notable increase year-over-year. The successful integration of recent acquisitions and disciplined capital allocation appear to be driving robust financial results and supporting the company's growth strategy.

Financial Highlights

38 data points
Beta

Revenue

$916.00M

Net Income

$190.00M

20.7% Net Margin

Total Assets

$18.60B

Cash & Equivalents

$293.00M

Free Cash Flow

$95.00M

Financial Statements
Beta
Revenue$916.00M
Operating Expenses$636.00M
Operating Income$280.00M
Net Income$190.00M

Key Highlights

  • 1Total revenues and other income significantly increased by $218 million for the three months ended June 30, 2017, and by $459 million for the six months ended June 30, 2017, compared to the prior year periods, driven by higher volumes, pricing, and acquisitions.
  • 2Net income attributable to MPLX LP swung from a loss of $41 million in the six months ended June 30, 2016, to a net income of $340 million in the same period of 2017, reflecting improved operational performance and acquisition contributions.
  • 3The L&S segment operating income attributable to MPLX LP increased by $85 million (69%) in Q2 2017 compared to Q2 2016, largely due to the inclusion of acquired assets.
  • 4The G&P segment operating income attributable to MPLX LP increased by $42 million (15%) in Q2 2017 compared to Q2 2016, driven by volume growth and new plant expansions.
  • 5Net cash provided by operating activities increased by $174 million in the first six months of 2017 compared to the same period in 2016, supported by strong operational performance.
  • 6MPLX LP completed significant financing activities, including issuing $2.25 billion in senior notes and $443 million in equity under its ATM Program, and increased its revolving credit facility to $2.25 billion.
  • 7The company announced plans for further acquisitions from MPC, with additional assets contributing an estimated $135 million in EBITDA expected in Q3 2017 and approximately $1.0 billion in annual EBITDA projected for early 2018.

Frequently Asked Questions

The acquisitions of HST, WHC, and MPLXT from MPC in March 2017, along with the Ozark pipeline, significantly contributed to the strong financial results. The L&S segment operating income saw a substantial increase of $85 million in Q2 2017 compared to Q2 2016, directly attributable to the inclusion of these acquired assets. The G&P segment also benefited from overall growth, which was further bolstered by these strategic additions.

MPLX LP anticipates continued growth through strategic acquisitions from MPC, with additional assets projected to contribute substantial EBITDA in late 2017 and early 2018. The company is also investing in organic growth through capital expenditures for pipeline expansions, processing plants, and infrastructure projects. Management plans to fund future growth through a mix of debt and equity, and has increased its revolving credit facility to enhance liquidity.

MPLX LP actively managed its liquidity and debt profile. The company issued $2.25 billion in senior notes and $443 million in equity in the first half of 2017. Additionally, they replaced their revolving credit facility with a larger $2.25 billion facility and prepaid their $250 million term loan. At June 30, 2017, the company maintained a Consolidated Total Debt to Consolidated EBITDA ratio of 3.4 to 1.0, well within its covenant limit, and retained an investment-grade credit rating.

MPLX LP demonstrated a commitment to increasing unit-holder distributions, declaring a quarterly distribution of $0.5625 per unit for the second quarter of 2017, representing a 4% increase from the previous quarter and a 10% increase from the second quarter of 2016. This growth aligns with the company's stated intent to maintain an attractive distribution growth profile.