Market Overview

MPLX LP Reports First-Quarter 2019 Financial Results

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FINDLAY, Ohio, May 8, 2019 /PRNewswire/ -- 

  • Reported first quarter net income of $503 million and adjusted EBITDA of $930 million, which provided 1.41x distribution coverage and resulted in 3.9x leverage
  • Logistics & Storage segment income from operations of $480 million and adjusted EBITDA of $559 million driven by strong results from the underlying base business
  • Gathering & Processing segment income from operations of $198 million and adjusted EBITDA of $371 million driven by record gathered, processed, and fractionated volumes
  • Signed letter of intent to participate in Wink-to-Webster crude pipeline in the Permian Basin
  • Announced agreement to acquire Andeavor Logistics

MPLX LP (NYSE:MPLX) today reported first quarter 2019 net income attributable to MPLX of $503 million compared with $421 million for the first quarter of 2018. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $930 million compared with $760 million in the first quarter of 2018. The significant year-over-year increase was driven by strong performance in the base business of both segments as well as dropdowns in Logistics and Storage (L&S). L&S reported segment income from operations of $480 million and adjusted EBITDA of $559 million for the quarter, up $95 million and $122 million, respectively, versus the first quarter of last year. Gathering and Processing (G&P) reported segment income from operations of $198 million and adjusted EBITDA of $371 million for the quarter, up $26 million and $48 million, respectively, on a year-over-year basis.

The company also announced that MPLX and Andeavor Logistics LP (NYSE:ANDX) have entered into a definitive merger agreement whereby MPLX will acquire ANDX in a unit-for-unit exchange. "This merger creates a leading, large-scale, diversified midstream company anchored by fee-based cash flows," said Gary R. Heminger, chairman and chief executive officer. "The combined entity will have an expanded geographic footprint with enhanced long-term growth opportunities. We are confident about the midstream growth and value-creation opportunities that exist across this combined platform in the best basins in the U.S."

MPLX made progress on its strategy of capturing the full midstream value chain and enhancing its cash flow stability by announcing continued development of long-haul pipelines that meet growing market needs. The company signed a letter of intent to partner in the Wink-to-Webster crude oil pipeline in the Permian Basin and it continues to progress Permian natural gas and NGL pipelines. MPLX, as operator, also completed an open season on the proposed reversal of the Capline pipeline. These projects are expected to increase the flow of crude oil and other hydrocarbons to the Texas and Louisiana Gulf Coast markets, where the partnership plans to develop and increase export capabilities.

"Our decision to move forward on these projects underscores our commitment to allocate more of our growth capital to the Logistics and Storage segment and is aligned with our long-term strategy of enhancing the return profile of our company," added Heminger.

During the quarter, MPLX generated $618 million in net cash provided by operating activities and distributable cash flow of $757 million, which provided 1.41x coverage and resulted in 3.9x leverage. The company did not issue any public equity during the first quarter, maintaining its commitment to a strategy of self-funding the equity portion of its capital investments. MPLX also announced its 25th consecutive distribution increase to $0.6575 per common unit, a 6.5 percent increase over the prior year first quarter.



Financial Highlights



Three Months Ended
 March 31

(In millions, except per unit and ratio data)


2019



2018

Net income attributable to MPLX


$

503




$

421


Adjusted EBITDA attributable to MPLX(a)


930




760


Net cash provided by operating activities


618




450


Distributable cash flow ("DCF")(a)


757




619


Distribution per common unit(b)


$

0.6575




$

0.6175


Distribution coverage ratio(c)


1.41x




1.29x


Consolidated debt to adjusted EBITDA(d)


3.9x




3.8x








(a)     Non-GAAP measure calculated before distributions to preferred unitholders. 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. See reconciliation below.

 

Segment Results







(In millions)


Three Months Ended
 March 31

Segment income from operations (unaudited)

2019



2018

Logistics and Storage

$

480


$

385

Gathering and Processing


198



172







Segment adjusted EBITDA attributable to MPLX LP (unaudited)






Logistics and Storage


559



437

Gathering and Processing

$

371


$

323







 

Logistics & Storage

L&S segment income from operations and adjusted EBITDA for the first quarter of 2019 increased by $95 million and $122 million, respectively, compared with the same period in 2018. The increase was primarily due to the February 1, 2018 dropdown of certain refining logistics assets and the fuels distribution service business, as well as the continued solid performance of the underlying base business.

Total pipeline throughputs were 3.4 million barrels per day in the first quarter, an increase of 11 percent versus the same quarter last year. The average tariff rate was $0.67 per barrel for the quarter. Terminal throughput was 1.4 million barrels per day for the quarter, which is consistent with the prior-year quarter.

MPLX provided updates on several previously announced Permian pipeline projects. The company signed a letter of intent to partner in the Wink-to-Webster crude oil pipeline. The pipeline will have a planned capacity of 1.5 million barrels per day and is expected to begin operations in the first half of 2021. The partnership's previously announced Whistler natural gas and BANGL natural gas liquids pipeline projects are both in the documentation phase. MPLX expects to make final investment decisions on both pipelines in the near term.

Gathering & Processing

G&P segment income from operations and segment adjusted EBITDA increased by $26 million and $48 million, respectively, for the first quarter of 2019 compared with the same period in 2018. The increase was primarily due to record gathered, processed and fractionated volumes partially offset by decreased pricing on product sales.

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