MPLX LP Announces Fourth-Quarter and Full-Year 2013 Financial Results
* Quarterly distribution increased by 5 percent to $0.3125 per unit
* 19 percent increase in quarterly distribution over the minimum quarterly
distribution
* $28.3 million of distributable cash flow and adjusted EBITDA of $28.9
million
* Sponsor announced significant investments in MLP-eligible assets
FINDLAY, Ohio, Jan. 29, 2014 - MPLX LP (NYSE: MPLX) today reported fourth-
quarter net income attributable to MPLX of $20.2 million, or $0.27 per common
limited partner unit. Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) attributable to MPLX were $28.9 million and distributable
cash flow attributable to MPLX was $28.3 million.
Net income attributable to MPLX was $77.9 million, or $1.05 per common limited
partner unit for the full-year 2013. Adjusted EBITDA attributable to MPLX was
$111.2 million and distributable cash flow attributable to MPLX was $114.6
million in 2013.
On Jan. 23, the board of directors declared a distribution of $0.3125 per unit.
This distribution represents an increase of $0.015 per unit, or 5 percent, above
the third-quarter 2013 distribution of $0.2975 per unit and a 19 percent
increase over the minimum quarterly distribution of $0.2625 established at the
time of MPLX's initial public offering (IPO) in October 2012.
"During MPLX's first full year as a publicly traded partnership, we demonstrated
our ability to add value to unitholders," said Chairman and Chief Executive
Officer Gary R. Heminger. "Consistent with our objective of maintaining an
attractive distribution growth profile over an extended period of time, we have
increased our distribution every quarter since our IPO."
Heminger noted that in 2013 MPLX also took steps to capitalize on shifts in the
energy market. "The increase in North American crude oil production makes a top-
tier energy logistics company such as ours an increasingly important source of
value for investors, and we have continued positioning ourselves to leverage our
assets and midstream expertise," he said. "In addition to completing our first
acquisition of assets from our sponsor, Marathon Petroleum Corporation, we also
initiated work on the Cornerstone Pipeline in southeast Ohio, an organic project
that will leverage growing Utica Shale liquids production and provide growth to
MPLX's distributable cash flow."
Heminger noted that Marathon Petroleum Corporation (MPC) announced planned
equity investments in Enbridge Energy Partners L.P.'s Sandpiper and Southern
Access Extension pipeline projects, which will link North American crude oil
production with the Midwest refining region. "These infrastructure investments
represent attractive potential additions to MPLX in the future," Heminger said.
Discussion of results
MPLX revenues and other income for the fourth quarter of 2013 were $125.6
million and $486.3 million for full-year 2013, driven primarily by total
pipeline throughput of 1.87 million and 1.97 million barrels per day,
respectively. MPC and related parties accounted for 89 percent of the revenues,
including revenues attributable to volumes shipped by MPC under joint tariffs
with third parties, in the fourth quarter and full year of 2013. After deducting
MPC's retained interest, adjusted EBITDA attributable to MPLX for the fourth
quarter of 2013 was $28.9 million and $111.2 million for the full-year 2013.
During the fourth quarter of 2013, MPC did not ship its minimum committed
volumes on certain MPLX pipeline systems. Included in distributable cash flow
attributable to MPLX for the quarter was $6 million of deficiency payments from
MPC that was not included in net income or adjusted EBITDA. In addition, $2.2
million of revenue was included in adjusted EBITDA attributable to MPLX
resulting from recognizing volume deficiency credits that were generated in a
prior quarter and not utilized by MPC.
As of Dec. 31, 2013, MPLX had $54.1 million of cash and cash equivalents and an
undrawn $500 million revolving credit facility available, the combination of
which will allow MPLX to pursue growth opportunities that expand its growing
base of distributable cash flow.
Conference call
At 2 p.m. EST today, MPLX will hold a webcast and conference call to discuss the
reported results and provide an update on operations. Interested parties may
listen to the conference call on MPLX's website at http://www.mplx.com by
clicking on the "2013 Fourth-Quarter Financial Results" link in the "News &
Headlines" section. Replays of the conference call will be available on MPLX's
website through Wednesday, Feb. 12. Investor-related material will also be
available online prior to the webcast and conference call at http://ir.mplx.com.
# # #
About MPLX LP
MPLX is a fee-based, growth-oriented master limited partnership formed in 2012
by Marathon Petroleum Corporation to own, operate, develop and acquire pipelines
and other midstream assets related to the transportation and storage of crude
oil, refined products and other hydrocarbon-based products. Headquartered in
Findlay, Ohio, MPLX's assets consist of a majority equity interest in a network
of common carrier crude oil and products pipeline assets located in the Midwest
and Gulf Coast regions of the United States and a 100 percent interest in a
butane storage cavern located in West Virginia.
Investor Relations Contacts:
Beth Hunter (419) 421-2559
Geri Ewing (419) 421-2071
Media Contacts:
Angelia Graves (419) 421-2703
Jamal Kheiry (419) 421-3312
In addition to our financial information presented in accordance with U.S.
generally accepted accounting principles (GAAP), management utilizes additional
Non-GAAP measures to facilitate comparisons of past performance and future
periods. This news release and supporting schedules include the Non-GAAP
measures adjusted EBITDA and distributable cash flow. We believe certain
investors use adjusted EBITDA to evaluate MPLX's financial performance between
periods and to compare MPLX's performance to certain competitors. We believe
certain investors use distributable cash flow to determine the amount of cash
generated from the partnership's operations and available for distribution to
its unitholders. These additional financial measures are reconciled from the
most directly comparable measures as reported in accordance with GAAP and should
be viewed in addition to, and not in lieu of, our consolidated financial
statements and footnotes.
This press release contains forward-looking statements within the meaning of the
federal securities laws. These forward-looking statements relate to, among other
things, MPLX's expectations, estimates and projections concerning the business
and operations of MPLX and MPC. You can identify forward-looking statements by
words such as "anticipate," "believe," "estimate," "expect," "forecast,"
"project," "could," "may," "should," "would," "will" or other similar
expressions that convey the uncertainty of future events or outcomes. Such
forward-looking statements are not guarantees of future performance and are
subject to risks, uncertainties and other factors, some of which are beyond the
issuer's control and are difficult to predict. Factors that could cause MPLX
actual results to differ materially from those in the forward-looking statements
include: the adequacy of our capital resources and liquidity, including, but not
limited to, availability of sufficient cash flow to pay distributions and
execute our business plan; the timing and extent of changes in commodity prices
and demand for crude oil, refined products, feedstocks or other hydrocarbon-
based products; volatility in and/or degradation of market and industry
conditions; completion of pipeline capacity by our competitors; disruptions due
to equipment interruption or failure, including electrical shortages and power
grid failures; the suspension, reduction or termination of MPC's obligations
under our commercial agreements; our ability to successfully implement our
growth strategy, whether through organic growth or acquisitions; state and
federal environmental, economic, health and safety, energy and other policies
and regulations; other risk factors inherent to our industry; and the factors
set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K
for the year ended December 31, 2012, filed with the Securities and Exchange
Commission (SEC). Copies of MPLX's Form 10-K are available on the SEC website,
MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations
office. Factors that could cause MPC's actual results to differ materially from
those in the forward-looking statements include MPC's ability to successfully
implement growth opportunities and the factors set forth under the heading "Risk
Factors" in MPC's Annual Report on Form 10-K for the year ended December
31, 2012, filed with the SEC. Copies of MPC's Form 10-K are available on the SEC
website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's
Investor Relations office. In addition, unpredictable or unknown factors not
discussed here or in MPC's Form 10-K or MPLX's Form 10-K could also have
material adverse effects on forward-looking statements.
Results of Operations
Factors Affecting Comparability
The following tables present net income attributable to MPLX, adjusted EBITDA
attributable to MPLX, and related operational information for the three-month
and twelve-month periods ended Dec. 31, 2013, and Dec. 31, 2012. Prior to the
IPO on Oct. 31, 2012, MPLX results included minority undivided joint interests
in two crude oil pipeline systems that were not contributed to MPLX at the IPO.
One hundred percent of the net income related to the assets that were
contributed to MPLX was included in results for the three and 12 months ended
Dec. 31, 2012, while results for the three and twelve months ended Dec.
31, 2013, reflect only MPLX's general partner interest by deducting the interest
retained by MPC. The Neal, W.Va., butane cavern financial results are included
in the three and 12 months ended Dec. 31, 2013 and for the post-IPO fourth
quarter 2012 period. Additional differences in revenues and expenses are
detailed in the factors affecting the comparability of our financial results in
the Management's Discussion and Analysis of Financial Condition and Results of
Operations section of the MPLX's Annual Report on Form 10-K. The distributable
cash flow attributable to MPLX for the three and 12 months ended Dec. 31, 2012,
relates only to the post-IPO time period.
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Results of
Operations
(unaudited) Three Months Ended Twelve Months Ended
 December 31 December 31
(In millions,
except per-unit
data) 2013 2012 2013 2012
-------------------------------------------------------------------------------
 Revenues and
other income:
  Sales and
other operating
revenues $Â Â Â Â Â Â Â 18.9 $Â Â Â Â Â Â Â 20.9 $Â Â Â Â Â Â Â 78.9 $Â Â Â Â Â Â Â 74.4
  Sales to
related parties 100.0 102.0 384.2 367.8
  Loss on sale
of assets - - - (0.3)
  Other income 1.3 1.9 4.4 6.9
  Other income
- related
parties           5.4           3.5          18.8          13.1
   Total
revenues and
other income       125.6       128.3        486.3        461.9
 Costs and
expenses:
  Cost of
revenues
(excludes items
below) 36.7 37.0 135.9 173.8
  Purchases
from related
parties 25.2 23.1 94.6 44.4
  Depreciation 12.6 11.6 48.9 39.4
  General and
administrative
expenses 13.3 12.5 53.7 49.8
  Other taxes           1.3           1.6           6.2          11.3
   Total
costs and
expenses         89.1         85.8       339.3        318.7
Income from
operations 36.5 42.5 147.0 143.2
  Related party
interest and
other financial
income - - - 1.3
  Net interest
and other
financial income
(costs) Â Â Â Â Â Â Â Â Â (0.4) Â Â Â Â Â Â Â Â Â (0.2) Â Â Â Â Â Â Â Â (1.1) Â Â Â Â Â Â Â Â (0.2)
Income before
income taxes 36.1 42.3 145.9 144.3
  Provision
(benefit) for
income taxes          (0.7)            0.2         (0.2)           0.3
Net income 36.8 42.1 146.1 144.0
Less: Net income
attributable to
MPC-retained
interest          16.6          13.2          68.2          13.2
Net income
attributable to
MPLX LP Â Â Â Â Â Â Â Â Â 20.2 Â Â Â Â Â Â Â 28.9 Â Â Â Â Â Â Â 77.9 Â Â Â Â Â 130.8
Less:
Predecessor
income prior to
IPO on 10/31/12 Â Â Â Â Â Â Â Â Â Â Â Â Â Â - Â Â Â Â Â Â Â Â 15.8 Â Â Â Â Â Â Â Â Â Â Â Â Â Â - Â Â Â Â Â Â Â 117.7
Net income
attributable to
MPLX LP
subsequent to
IPO 20.2 13.1 77.9 13.1
Less: General
partner's
interest in net
income
attributable
      to
MPLX LP
subsequent to
IPO Â Â Â Â Â Â Â Â Â Â Â 0.5 Â Â Â Â Â Â Â Â Â Â Â 0.2 Â Â Â Â Â Â Â Â Â Â Â 1.7 Â Â Â Â Â Â Â Â Â Â Â 0.2
Limited
partners'
interest in net
income
attributable to
  MPLX LP $       19.7 $       12.9 $       76.2 $       12.9
Net income
attributable to
MPLX LP per
limited
partner unit:
  Common $       1.05 $       0.18
(basic) $Â Â Â Â Â Â Â 0.27 $Â Â Â Â Â Â Â 0.18
  Common 1.05 0.18
(diluted) 0.27 0.18
  Subordinated 1.01 0.17
(basic and
diluted) 0.27 0.17
Limited partner
units
outstanding
(basic and
diluted):
  Common units 19.9 19.9
- Public 19.9 19.9
  Common units 17.1 17.1
- MPC 17.1 17.1
  Subordinated 37.0 37.0
units - MPC 37.0 37.0
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Other Financial Twelve Months Ended
Information
(unaudited) Three Months Ended
 December 31 December 31
(In millions,
except per-unit 2013 2012 2013 2012
and ratio data)
-------------------------------------------------------------------------------
Quarterly
distribution
declared per
unit((a)) $Â Â Â 0.3125 $Â Â Â Â Â 0.1769 $Â Â Â Â Â 1.1675 $Â Â Â Â 0.1769
Used/expired
volume
deficiency
credits
attributable to
MPLX LP $Â Â Â Â Â Â Â Â Â 2.2 $Â Â Â Â Â Â Â Â Â Â Â Â Â Â - $Â Â Â Â Â Â Â Â Â Â Â 2.5 $Â Â Â Â Â Â Â Â Â Â Â Â Â -
Adjusted EBITDA
attributable to
MPLX LP
subsequent to
IPO $Â Â Â Â Â Â Â 28.9 $Â Â Â Â Â Â Â Â 18.2 $Â Â Â Â Â Â Â 111.2 $Â Â Â Â Â Â Â 18.2
Distributable
cash flow
attributable to
MPLX LP
subsequent to
IPO $Â Â Â Â Â Â Â 28.3 $Â Â Â Â Â Â Â Â 16.7 $Â Â Â Â Â Â 114.6 $Â Â Â Â Â Â Â 16.7
Distribution
declared:
    Limited
partner units -
Public $Â Â Â Â Â Â Â Â Â 6.2 $Â Â Â Â Â Â Â Â Â Â 3.5 $Â Â Â Â Â Â Â Â 23.2 $Â Â Â Â Â Â Â Â 3.5
    Limited
partner units -
MPC 16.9 9.5 63.1 9.5
    General
partner units -
MPC 0.5 0.3 1.8 0.3
Incentive
distribution
rights - MPC Â Â Â Â Â Â 0.1 Â Â Â Â Â Â Â Â - Â Â Â Â Â Â 0.1 Â Â Â Â Â Â Â -
  Total
distribution
declared $Â Â Â Â Â Â Â 23.7 $Â Â Â Â Â Â Â Â 13.3 $Â Â Â Â Â Â Â 88.2 $Â Â Â Â Â Â Â 13.3
Coverage ratio 1.19x 1.25x 1.30x 1.25x
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(a) Â The 2012 quarterly distribution was prorated for the October 31-December
31, 2012, period.
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Reconciliation
of Adjusted
EBITDA
attributable
to MPLX LP
subsequent to
IPO and
Distributable
Cash Flow
attributable
to MPLX LP
from Net
Income
(unaudited)
     Three Months Ended Twelve Months Ended
 December 31 December 31
(In millions) 2013 2012 2013 2012
--------------------------------------------------------------------------------------
Net Income $Â Â Â Â Â Â Â 36.8 $Â Â Â Â Â Â Â Â Â 42.1 $Â Â Â Â Â Â Â 146.1 $Â Â Â Â Â Â Â 144.0
Less: Net
income
attributable
to MPC-
retained
interest          16.6             13.2           68.2           13.2
Net income
attributable
to MPLX LP 20.2 28.9 77.9 130.8
Plus: Net
income
attributable
to MPC-
retained
interest 16.6 13.2 68.2 13.2
 Depreciation 12.6 11.6 48.9 39.4
 Provision
(benefit) for
income taxes (0.7) 0.2 (0.2) 0.3
     Non-
cash equity-
based
compensation 0.6 0.1 1.4 0.1
 Related party
interest and
other
financial
income         -          -         -           (1.3)
     Net
interest and
other
financial
costs (income) Â Â Â Â Â Â Â Â Â Â Â 0.4 Â Â Â Â Â Â Â Â Â Â Â Â 0.2 Â Â Â Â Â Â Â Â Â Â Â Â 1.1 Â Â Â Â Â Â Â Â Â Â Â Â Â 0.2
Adjusted
EBITDA Â Â Â Â Â Â Â Â 49.7 Â Â Â Â Â Â Â Â Â Â Â Â 54.2 Â Â Â Â Â Â Â Â 197.3 Â Â Â Â Â Â Â Â Â Â 182.7
Less: Adjusted
EBITDA
attributable
to MPC-
retained
interest          20.8            16.4            86.1            16.4
Adjusted
EBITDA
attributable
to MPLX LP 28.9 37.8 111.2 166.3
Less:
Predecessor
adjusted
EBITDA prior
to IPO on
10/31/12
                -            19.6                  -          148.1
Adjusted
EBITDA
attributable
to MPLX LP
subsequent to
IPO
 28.9 18.2 111.2 18.2
Plus: Increase
in deferred
revenue for
committed
volume
deficiencies
deficiencies 6.0 2.1 18.7 2.1
Less: Cash
interest paid,
net 0.4 0.2 1.0 0.2
Income taxes
paid 0.1 - 0.1 -
Maintenance
capital
expenditures
paid 3.9 3.4 11.7 3.4
Used/expired
volume
deficiency
credits           2.2                -             2.5                 -
Distributable
cash flow
attributable
to MPLX LP $Â Â Â Â Â Â Â 28.3 $Â Â Â Â Â Â Â 16.7 $Â Â Â Â Â Â 114.6 $Â Â Â Â Â Â Â Â 16.7
--------------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Reconciliation of Adjusted EBITDA
attributable to MPLX LP subsequent to IPO
and Distributable Cash Flow attributable to
MPLX LP from Net Cash Provided by Operating
Activities (unaudited) Twelve Months Ended
 December 31
(In millions) 2013 2012
-------------------------------------------------------------------------------
Net cash provided by operating activities $Â Â Â Â Â Â 212.2 $Â Â Â Â Â Â Â 190.6
Less: Changes in working capital items 23.0 15.9
     All other, net 2.4 0.3
Plus: Non-cash equity-based compensation 1.4 0.1
     Net loss on disposal of assets - (0.3)
     Related party interest and other
financial income - (1.3)
     Net interest and other financial
costs (income) 1.1 0.2
     Current income tax expense
(benefit) (0.3) 0.4
     Asset retirement expenditures            8.3            9.2
Adjusted EBITDA 197.3 182.7
Less: Adjusted EBITDA attributable to MPC-
retained interest          86.1           16.4
Adjusted EBITDA attributable to MPLX LP 111.2 166.3
Less: Predecessor adjusted EBITDA prior to
IPO on 10/31/12 Â Â Â Â Â Â Â Â Â Â Â Â Â Â - Â Â Â Â Â Â Â Â 148.1
Adjusted EBITDA attributable to MPLX LP
subsequent to IPO 111.2 18.2
Plus: Increase in deferred revenue for
committed volume deficiencies 18.7 2.1
Less: Cash interest paid, net 1.0 0.2
     Income taxes paid 0.1 -
     Maintenance capital expenditures
paid 11.7 3.4
     Used/expired volume deficiency
credits               2.5                -
Distributable cash flow attributable to
MPLX LP $Â Â Â Â Â Â Â Â 114.6 $Â Â Â Â Â Â Â Â 16.7
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Selected Operating Data
(unaudited) Three Months Ended Twelve Months Ended
 December 31 December 31
 2013 2012 2013 2012
-------------------------------------------------------------------------------
Pipeline throughput
(thousands of barrels per
day) :
  Crude oil pipelines 1,010 1,141 1,063 1,147
  Product pipelines          855      1,003           911          980
   Total 1,865 2,144 1,974 2,127
Average tariff rates ($ per
barrel):
  Crude oil pipelines $     0.64 $     0.62 $     0.61 $     0.57
  Product pipelines 0.59 0.55 0.56 0.51
  Total pipelines 0.62 0.59 0.59 0.54
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-----------------------------------------------------------------------------------
Selected Financial Three Months Ended December 31 Twelve Months Ended December
Data (unaudited) 31
(In millions) 2013 2012 2013 2012
-----------------------------------------------------------------------------------
Capital
Expenditures((a)):
  Maintenance $          6.4 $           9.7 $        21.7 $        24.5
  Expansion           17.1            17.5           87.8         123.5
   Total 23.5 27.2 109.5 148.0
capital
expenditures
    Less: (6.9) (5.8) (5.3) 3.2
Increase
(decrease) in
capital accruals
                    4.9              6.6            8.3            9.2
 Asset retirement
expenditures
Additions to
property, plant
and
   equipment $         25.5 $        26.4 $      106.5 $     135.6
-----------------------------------------------------------------------------------
(a) Â Â Excludes $100 million acquisition of an additional 5 percent interest in
MPLX Pipe Line Holdings LP.
-------------------------------------------------------------------------------
Balance Sheet Data (unaudited) December 31 December 31
(In millions, except ratio data) 2013 2012
-------------------------------------------------------------------------------
Cash and cash equivalents $Â Â Â Â Â Â Â Â Â Â Â Â 54.1 $Â Â Â Â Â Â Â Â Â Â Â 216.7
Total assets 1,208.5 1,301.3
Long term debt((a)) 10.5 11.3
Total equity 1,114.1 1,226.8
Consolidated total debt to consolidated
EBITDA (covenant basis) 0.1 0.1
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(a) Â Â Represents one capital lease. Includes amounts due within one year.
MPLX 4Q & Full-Year 2013 Results:
http://hugin.info/155038/R/1757671/594166.pdf
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originality of the information contained therein.
Source: MPLX LP via GlobeNewswire
[HUG#1757671]