Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

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FORM 8-K

 _____________________________________________

 

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 31, 2014

 

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MPLX LP

(Exact name of registrant as specified in its charter)

 

_____________________________________________

 

 

Delaware		001-35714		45-5010536
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification Number)

 

200 E. Hardin Street Findlay, Ohio		45840
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code:

[phone]

(Former name or former address, if changed since last report)

 _____________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02	Results of Operations and Financial Condition.

On July 31, 2014, MPLX LP issued a press release announcing second-quarter 2014 earnings. Among other items, the press release reports second-quarter 2014 net income attributable to MPLX LP of $28.8 million. The press release is being furnished as Exhibit 99.1 to this Current Report and is incorporated herein by reference.

 

Item 9.01	Financial Statements and Exhibits.

 

(d)	Exhibits.

Exhibit Number			Description
99.1			Press Release dated July 31, 2014, issued by MPLX LP

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	MPLX LP
	By:		MPLX GP LLC, its General Partner
Date: July 31, 2014	By:		/s/ Michael G. Braddock
			Name: Michael G. Braddock
			Title: Vice President and Chief Accounting Officer

MPLX LP Reports Second-Quarter 2014 Financial Results

•	Increased distribution to $0.3425 per common unit, 4.6 percent over first quarter

•	Reported adjusted EBITDA of $39.9 million

•	Generated distributable cash flow of $36.2 million

FINDLAY, Ohio, July 31, 2014 - MPLX LP (NYSE: MPLX) today reported second-quarter 2014 net income attributable to MPLX of $28.8 million, or $0.37 per common limited partner unit, compared with $18.6 million, or $0.26 per common limited partner unit, for the second quarter of 2013. Second-quarter 2014 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) attributable to MPLX were $39.9 million and distributable cash flow attributable to MPLX was $36.2 million.

On July 22, the board of directors declared a distribution of $0.3425 per unit. This distribution represents an increase of $0.015 per unit, or 4.6 percent, over the first-quarter 2014 distribution of $0.3275 per unit and an increase of 20.2 percent over the second-quarter 2013 distribution. Since the partnership's initial public offering in October 2012, the MPLX board has authorized distribution increases for six consecutive quarters, representing a compound annual growth rate of 18.1 percent over its minimum quarterly distribution.

Discussion of Results

MPLX revenues and other income for the second quarter of 2014 were $133.9 million, compared with $122.2 million for the second quarter of 2013. The increase in revenues and other income was primarily due to higher pipeline tariff rates and revenue recognized for volume deficiency credits. Average pipeline tariff rates increased $0.05 per barrel compared to the second quarter of 2013. These revenue increases substantially exceeded the impact of lower throughput in the second quarter of 2014 compared to the same period in 2013. Comparing the second quarters of 2014 and 2013, Marathon Petroleum (MPC) and related parties accounted for 90 and 89 percent, respectively, of those revenues, including revenues attributable to volumes shipped by MPC under joint tariffs with third parties.

After deducting MPC’s retained interest, net income attributable to MPLX for the second quarter of 2014 rose $10.2 million over the second quarter of 2013 due to increased revenue and a larger ownership interest in MPLX Pipe Line Holdings LP.

Financial Position and Liquidity

As of June 30, 2014, MPLX had $43.2 million of cash and cash equivalents and $245 million available on its bank credit facility. This combination should allow MPLX to pursue growth opportunities that expand its growing base of distributable cash flow.

Conference Call

At 2 p.m. EDT 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 "2014 Second-Quarter Financial

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Results" link in the "News & Headlines" section. Replays of the conference call will be available on MPLX's website through Wednesday, Aug. 13. Investor-related material will also be available online prior to the webcast and conference call at http://ir.mplx.com.

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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. For additional information about the partnership, please see our website at http://www.mplx.com.

Investor Relations Contacts:

Beth Hunter [phone]
Geri Ewing [phone]

Media Contacts:

Angelia Graves [phone]

Jamal Kheiry [phone]

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. 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

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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 Dec. 31, 2013, 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. In addition, unpredictable or unknown factors not discussed here or in MPLX's Form 10-K could also have material adverse effects on forward-looking statements.

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Results of Operations (unaudited)
		Three Months Ended   June 30								Six Months Ended   June 30
(In millions, except per unit data)		2014				2013				2014				2013
Revenues and other income:
Sales and other operating revenues	$	18.7			$	18.8			$	35.6			$	39.6
Sales to related parties		108.1				97.3				221.9				186.4
Other income		1.1				0.9				2.6				2.1
Other income – related parties		6.0				5.2				11.1				8.8
Total revenues and other income		133.9				122.2				271.2				236.9
Costs and expenses:
Cost of revenues (excludes items below)		35.7				35.6				62.3				66.1
Purchases from related parties		23.7				23.8				47.7				45.6
Depreciation		12.4				11.9				25.0				23.6
General and administrative expenses		15.9				13.9				31.8				27.4
Other taxes		1.9				1.8				3.8				3.5
Total costs and expenses		89.6				87.0				170.6				166.2
Income from operations		44.3				35.2				100.6				70.7
Net interest and other financial costs		1.3				0.3				1.9				0.5
Income before income taxes		43.0				34.9				98.7				70.2
Provision for income taxes		0.1				0.1				0.1				0.1
Net income		42.9				34.8				98.6				70.1
Less: Net income attributable to MPC-retained interest		14.1				16.2				35.6				33.9
Net income attributable to MPLX LP		28.8				18.6				63.0				36.2
Less: General partner’s interest in net income
attributable to MPLX LP		1.2				0.3				2.2				0.7
Limited partners’ interest in net income attributable to MPLX LP	$	27.6			$	18.3			$	60.8			$	35.5
Net income attributable to MPLX LP per limited partner unit:
Common (basic)	$	0.37			$	0.26			$	0.79			$	0.53
Common (diluted)		0.37				0.26				0.79				0.52
Subordinated (basic and diluted)		0.37				0.23				0.79				0.44
Limited partner units outstanding (basic and diluted):
Common units – public		19.9				19.9				19.9				19.9
Common units – MPC		17.1				17.1				17.1				17.1
Subordinated units – MPC		37.0				37.0				37.0				37.0

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Other Financial Information (unaudited)
		Three Months Ended   June 30								Six Months Ended   June 30
(In millions, except per unit and ratio data)		2014				2013				2014				2013
Quarterly distribution declared per unit	$	0.3425			$	0.2850			$	0.6700			$	0.5575
Volume deficiency credits attributable to MPLX LP(a)	$	6.1			$	0.1			$	17.6			$	0.2
Adjusted EBITDA attributable to MPLX LP	$	39.9			$	26.7			$	83.7			$	51.8
Distributable cash flow attributable to MPLX LP	$	36.2			$	27.2			$	73.9			$	55.2
Distribution declared:
Limited partner units - public	$	6.8			$	5.7			$	13.3			$	11.1
Limited partner units - MPC		18.6				15.4				36.3				30.1
General partner units - MPC		0.5				0.4				1.0				0.8
Incentive distribution rights - MPC		0.6				—				0.9				—
Total distribution declared	$	26.5			$	21.5			$	51.5			$	42.0
Coverage ratio		1.37x				1.27x				1.43x				1.31x

Reconciliation of Adjusted EBITDA attributable to MPLX LP and Distributable Cash Flow attributable to MPLX LP to Net Income (unaudited)
		Three Months Ended   June 30								Six Months Ended   June 30
(In millions)		2014				2013				2014				2013
Net Income	$	42.9			$	34.8			$	98.6			$	70.1
Less: Net income attributable to MPC-retained interest		14.1				16.2				35.6				33.9
Net income attributable to MPLX LP		28.8				18.6				63.0				36.2
Plus: Net income attributable to MPC-retained interest		14.1				16.2				35.6				33.9
Depreciation		12.4				11.9				25.0				23.6
Provision for income taxes		0.1				0.1				0.1				0.1
Non-cash equity-based compensation		0.5				0.3				0.9				0.5
Net interest and other financial costs		1.3				0.3				1.9				0.5
Adjusted EBITDA		57.2				47.4				126.5				94.8
Less: Adjusted EBITDA attributable to MPC-retained interest		17.3				20.7				42.8				43.0
Adjusted EBITDA attributable to MPLX LP		39.9				26.7				83.7				51.8
Plus: Current period deferred revenue for committed volume deficiencies(b)		6.9				2.9				14.6				7.6
Less: Cash interest paid, net		1.3				—				1.7				0.2
Maintenance capital expenditures paid		3.2				2.3				5.1				3.8
Volume deficiency credits(a)		6.1				0.1				17.6				0.2
Distributable cash flow attributable to MPLX LP	$	36.2			$	27.2			$	73.9			$	55.2

(a) Current period revenue related to volume deficiency credits generated in prior periods that are included in adjusted

EBITDA but not distributable cash flow.

(b) Deficiency payments included in distributable cash flow that are not included in net income or adjusted EBITDA.

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Reconciliation of Adjusted EBITDA attributable to MPLX LP and Distributable Cash Flow attributable to MPLX LP to Net Cash Provided by Operating Activities (unaudited)
		Six Months Ended   June 30
(In millions)		2014				2013
Net cash provided by operating activities	$	128.4			$	108.6
Less: Changes in working capital items		7.5				17.5
All other, net		(1.8	)			(1.0	)
Plus: Non-cash equity-based compensation		0.9				0.5
Net interest and other financial costs		1.9				0.5
Current income tax expense		0.1				0.1
Asset retirement expenditures		0.9				1.6
Adjusted EBITDA		126.5				94.8
Less: Adjusted EBITDA attributable to MPC-retained interest		42.8				43.0
Adjusted EBITDA attributable to MPLX LP		83.7				51.8
Plus: Current period deferred revenue for committed volume deficiencies(a)		14.6				7.6
Less: Cash interest paid, net		1.7				0.2
Maintenance capital expenditures paid		5.1				3.8
Volume deficiency credits(b)		17.6				0.2
Distributable cash flow attributable to MPLX LP	$	73.9			$	55.2

(a) Deficiency payments included in distributable cash flow that are not included in net income or adjusted EBITDA.

(b) Current period revenue related to volume deficiency credits generated in prior periods that are included in adjusted

EBITDA but not distributable cash flow.

Selected Operating Data (unaudited)
		Three Months Ended   June 30								Six Months Ended   June 30
		2014				2013				2014				2013
Pipeline throughput (thousands of barrels per day):
Crude oil pipelines		1,032				1,075				1,007				1,075
Product pipelines		871				959				845				939
Total		1,903				2,034				1,852				2,014
Average tariff rates ($ per barrel):
Crude oil pipelines	$	0.66			$	0.60			$	0.67			$	0.59
Product pipelines		0.59				0.56				0.60				0.54
Total pipelines		0.63				0.58				0.64				0.57

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Selected Financial Data (unaudited)
		Three Months Ended   June 30								Six Months Ended   June 30
(In millions)		2014				2013				2014				2013
Capital Expenditures(a):
Maintenance	$	6.0			$	5.6			$	8.4			$	7.8
Expansion		3.2				28.4				6.2				38.8
Total capital expenditures		9.2				34.0				14.6				46.6
Less: Increase in capital accruals		0.4				1.2				0.5				4.2
Asset retirement expenditures		0.7				1.2				0.9				1.6
Additions to property, plant and equipment	$	8.1			$	31.6			$	13.2			$	40.8

(a) Excludes acquisition of an additional interest in MPLX Pipe Line Holdings LP.

Balance Sheet Data (unaudited)
(In millions, except ratio data)		June 30, 2014				March 31, 2014
Cash and cash equivalents	$	43.2			$	40.6
Total assets		1,181.4				1,193.7
Long term debt(a)		265.2				280.4
Total equity		828.7				821.1
Consolidated total debt to consolidated EBITDA (covenant basis)(b)		1.8x				2.2x

(a) Includes amounts due within one year.

(b) Based on last 12 months.

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