Market Overview

MPLX LP Delivers Exceptional Third Quarter 2018 Financial Results

Share:

MPLX LP Delivers Exceptional Third Quarter 2018 Financial Results

PR Newswire

FINDLAY, Ohio, Nov. 1, 2018 /PRNewswire/ --

  • Reported third quarter net income of $510 million and adjusted EBITDA of $937 million, which provided 1.47x distribution coverage and resulted in 3.8x leverage
  • Logistics & Storage segment income from operations of $468 million and adjusted EBITDA of $547 million driven by strong results from the underlying base business
  • Gathering & Processing segment income from operations of $204 million and adjusted EBITDA of $390 million driven by record gathered, processed, and fractionated volumes
  • Announced planned investment in the Permian-to-Gulf Coast Pipeline
  • Acquired strategically located Gulf Coast Export Terminal in Mt. Airy, Louisiana

MPLX LP (NYSE:MPLX) today reported record third quarter 2018 net income attributable to MPLX of $510 million compared with $216 million in the third quarter of 2017. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $937 million compared with $538 million in the second quarter of 2017. The significant year-over-year increase in EBITDA was driven by strong performance in the base business of both segments as well as drop downs in Logistics and Storage (L&S). L&S reported adjusted EBITDA of $547 million for the quarter, up $329 million versus the third quarter of last year. Gathering and Processing (G&P) reported adjusted EBITDA of $390 million for the quarter, up $70 million on a year-over-year basis.

"MPLX delivered exceptional results this quarter, setting multiple financial and operational records," said Gary R. Heminger, chairman and chief executive officer. "Our team continued to successfully bring multiple assets online throughout the year to match production growth. This has allowed us to take advantage of the strong levels of demand across all regions where we operate."

"At the same time, we are also very enthusiastic about the new Permian pipeline and Gulf Coast export investments we announced this quarter," Heminger added. "These projects demonstrate our team's ability to respond to market trends, developing infrastructure that connects growing domestic supply sources to global demand. Our focus on long haul pipelines and stable fee-based businesses positions the company to create long-term sustainable shareholder value."

During the quarter, the company generated $737 million in net cash provided by operating activities and distributable cash flow of $766 million, which provided 1.47x coverage.  Consistent with its self-funding strategy, the company did not issue equity and ended the third quarter with leverage of 3.8x. MPLX also announced its 23rd consecutive distribution increase, to $0.6375 per common unit.

 

Financial Highlights



Three Months Ended
 Sept. 30



Nine Months Ended
 Sept. 30

(In millions, except per unit and ratio data)


2018



2017



2018



2017

Net income attributable to MPLX

$

510



$

216



$

1,384



$

556


Adjusted EBITDA attributable to MPLX(a)


937




538




2,564




1,435


Net cash provided by operating activities


737




494




2,027




1,338


Distributable cash flow ("DCF")(a)


766




442




2,080




1,183


Distribution per common unit(b)

$

0.6375



$

0.5875



$

1.8825



$

1.6900


Distribution coverage ratio(c)


    1.47x



    1.33x



    1.38x



    1.29x

Consolidated debt to adjusted EBITDA(d)


      3.8x



      3.6x



















(a)    Non-GAAP measure calculated before the distribution to preferred units. See reconciliation below.
(b)    Distributions declared by the board of directors of MPLX's general partner.
(c)    Non-GAAP measure. See calculation below.
(d)    Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions.

Logistics & Storage

L&S segment income from operations and adjusted EBITDA for the third quarter of 2018 increased by $315 million and $329 million, respectively, compared with the same period in 2017. The increase was primarily due to dropdowns of certain refining logistics assets and the fuels distribution service business as well as the continued solid performance of the segment.

Total pipeline throughputs were 3.39 million barrels per day in the third quarter, an increase of 7 percent versus the same quarter last year, including the addition and expansion of the Ozark pipeline system. The average tariff rate was $0.69 per barrel for the quarter. Terminal throughput was 1.47 million barrels per day for the quarter, down 1 percent versus the same quarter last year.

During the quarter, MPLX announced planned investments in two separate long-haul pipelines. The company plans to join with Energy Transfer (NYSE:ET), Magellan Midstream Partners (NYSE:MMP), and Delek US Holdings, Inc (NYSE:DK) to construct a crude pipeline running from the Permian Basin to the Texas Gulf Coast region. The 600-mile Permian Gulf Coast pipeline system (PGC Pipeline) is expected to be at least 30 inches in diameter and operational in mid-2020. MPLX also plans to participate in developing the Whistler Pipeline, a 2.0 billion cubic feet per day (bcf/d) pipeline designed to deliver natural gas from Waha, Texas, to the Agua Dulce market hub. This pipeline is expected to begin operations in the fourth quarter of 2020.

MPLX also announced the acquisition of an eastern Gulf Coast export terminal in Mt. Airy, Louisiana. The terminal is strategically located on the Mississippi River in close proximity to several large refineries, including MPC's Garyville refinery. The facility has 4 million barrels of third-party leased storage capacity and a 120 thousand barrel-per-day (mbpd) dock, with the capability of expanding storage capacity to 10 million barrels. MPLX has received a permit to construct a second 120 mbpd dock at the terminal to serve growing export needs in the region.

Additionally, on October 17, 2018, MPLX announced with Crimson Midstream, LLC the commencement of a binding open season to assess interest and solicit commitments from prospective shippers for transportation service on the Swordfish Pipeline. The Swordfish Pipeline would provide connectivity within Louisiana from existing terminal facilities in St. James and Raceland to the Louisiana Offshore Oil Port LLC (LOOP) terminal facility in Clovelly. The proposed pipeline would have the ability to transport up to 600,000 barrels of crude oil per day and provide shippers with access to storage services, vessel loading, as well as connectivity to other carriers at the Clovelly Hub. The in-service date for the Swordfish Pipeline is anticipated to be in the first half of 2020.

Within the L&S segment, MPLX continued to execute its organic growth plan. The company completed its major expansion work on the Ozark and Wood River-to-Patoka crude pipeline systems, with available capacity of these systems now at 360 mbpd. The company also placed into service two 410,000 barrel crude tanks in Texas City, Texas, in the third quarter. Both projects create additional fee-based revenue for MPLX while providing logistics solutions to Marathon Petroleum Corp. (NYSE:MPC) and other market participants.

Gathering & Processing

G&P segment income from operations and segment adjusted EBITDA increased by $46 million and $70 million, respectively, for the third quarter of 2018 compared with the same period in 2017. The increase was primarily due to increased gathered, processed and fractionated volumes.

  • Gathered volumes: 4.7 billion cubic feet per day in the third quarter of 2018, a 27 percent increase versus the third quarter of 2017
  • Processed volumes: 7.2 billion cu
View Comments and Join the Discussion!
 
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com