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MPLX LP Announces Second-Quarter 2013 Results


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2013-08-01 13:31:01 -

* Achieved adjusted EBITDA of $26.7 million
  * Generated $27.2 million of distributable cash flow
  * Increased quarterly cash distribution by $0.0125 (4.6 percent) to $0.2850
    per unit

FINDLAY, Ohio, Aug. 1, 2013 - MPLX LP (NYSE: MPLX) today reported second-quarter
net income attributable to MPLX of $18.6 million, or $0.26 per common limited
partner unit. Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) attributable to MPLX were $26.7 million and distributable
cash flow attributable to MPLX was $27.2 million.

On July 23, the board of directors declared a distribution of $0.2850 per unit.
This represents an increase of $0.0125 per unit, or 4.6 percent, above the
first-quarter 2013 distribution of $0.2725 per unit.

On May 1, MPLX acquired an additional 5 percent 
interest in MPLX Pipe Line Holdings LP from a subsidiary of Marathon Petroleum Corporation (NYSE: MPC) for $100 million. This represents MPLX's first acquisition following its initial public offering (IPO) in October 2012. "MPLX's strategically located assets, and the talented workforce operating them, continue to deliver excellent performance for our unitholders," said Gary R. Heminger, chairman and chief executive officer. "Consistent with our commitment to provide unitholders with an attractive long-term distribution growth profile, the board of directors has increased our distribution again this quarter, reflecting our confidence in MPLX's outlook. This increase in the distribution is consistent with our intent to maintain a distribution growth rate of 15 to 20 percent for at least the next several years." Discussion of results MPLX revenues and other income for the second quarter of 2013 were $122.2 million, driven primarily by total pipeline throughput of 2.03 million barrels per day. MPC (MPLX's general partner) and related parties accounted for 89 percent of revenues, including revenues attributable to volumes shipped by MPC under joint tariffs with third parties, which are treated as third-party revenue for accounting purposes. After deducting the interest retained by MPC, adjusted EBITDA attributable to MPLX for the second quarter of 2013 was $26.7 million. During the second quarter of 2013, MPC did not ship its minimum committed volumes on certain MPLX pipeline systems. While payments for such deficiencies are not included in determining net income or adjusted EBITDA, they are included in distributable cash flow attributable to MPLX. As of June 30, 2013, MPLX had $115.3 million of cash and cash equivalents, including proceeds from the IPO that were retained to prefund capital projects. During the 2013 second quarter, MPLX used $100 million of cash to purchase an additional 5 percent interest in MPLX Pipe Line Holdings LP. MPLX has a $500 million unused revolving credit facility available to pursue growth opportunities. 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 www.mplx.com by clicking on the "Second-Quarter 2013 Financial Results" link, found under the "News & Headlines" section. Replays of the conference call will be available on MPLX's website through Thursday, Aug. 15. Information, including the earnings release and other investor-related material, will also be available online prior to the webcast and conference call at 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 an approximately 1 million barrel butane storage cavern located in West Virginia. Investor Relations Contacts: Pamela Beall (419) 429-5640 Beth Hunter (419) 421-2559 Media Contacts: Angelia Graves (419) 421-2703 Jamal Kheiry (419) 421-3312 Non-GAAP Financial Information 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 of 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. Forward-looking Statements 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 MPLX business and operations. 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 MPLX's control and are difficult to predict. Factors that could cause 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 Dec. 31, 2012, filed with the Securities and Exchange Commission (SEC). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPLX's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at ir.mplx.com or by contacting MPLX's Investor Relations office. Results of Operations Factors Affecting Comparability The following tables present net income attributable to MPLX, adjusted EBITDA attributable to MPLX and related financial and operational information for the three-month and six-month periods ended June 30, 2013, and June 30, 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 six months ended June 30, 2012, while results for the three and six months ended June 30, 2013, reflect only MPLX's general partner interest by deducting the interest retained by MPC. The Neal, W.Va., butane cavern financial results are only included in the three and six months ended June 30, 2013. 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 MPLX's Annual Report on Form 10- K. The unaudited combined financial results of MPLX LP Predecessor (Predecessor), our predecessor for accounting purposes, are presented for the three and six months ended June 30, 2012. We have not presented distributable cash flow attributable to MPLX for the three and six months ended June 30, 2012, since that period was prior to the IPO. -------------------------------------------------------------------------------- Results of Operations (unaudited) Three Months Ended Six Months Ended   June 30 June 30 (In millions, except per-unit data) 2013 2012 2013 2012 --------------------------------------------------------------------------------   Predecessor   Predecessor Revenues and other income:    Sales and other operating revenues $     18.8 $     18.1 $     39.6 $     33.9    Sales to related parties 97.3 87.5 186.4 169.2    Loss on sale of assets - (0.3) - (0.3)    Other income 0.9 1.7 2.1 3.3    Other income - related parties       5.2       3.4       8.8       6.4       Total revenues and other income 122.2 110.4 236.9 212.5 Costs and expenses:    Cost of revenues (excludes items below) 35.6 44.4 66.1 82.5    Purchases from related parties 23.8 7.3 45.6 13.6    Depreciation 11.9 9.2 23.6 18.4    General and administrative expenses 13.9 17.0 27.4 26.9    Other taxes       1.8       3.0       3.5       6.7       Total costs and expenses     87.0     80.9   166.2   148.1 Income from operations 35.2 29.5 70.7 64.4    Related party interest and other financial income - 0.4 - 0.8    Interest and other financial income (costs)     (0.3)           -    (0.5)           - Income before income taxes 34.9 29.9 70.2 65.2    Provision for income taxes       0.1       0.1      0.1       0.2 Net income 34.8 29.8 70.1 65.0    Less: Net income attributable to MPC-retained    interest     16.2           -    33.9           - Net income attributable to MPLX LP     18.6 $   29.8    36.2 $   65.0    Less: General partner's interest in net income    attributable to MPLX LP       0.3        0.7 Limited partners' interest in net income attributable to MPLX LP $    18.3   $   35.5 Net income attributable to MPLX LP per limited partner unit:    Common (basic) $    0.26   $    0.53    Common (diluted) 0.26   0.52    Subordinated (basic and diluted) 0.23   0.44 Limited partner units outstanding (basic and diluted):    Common units - Public 19.9   19.9    Common units - MPC 17.1   17.1    Subordinated units - MPC 37.0   37.0 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Other Financial Six Months Ended Information (unaudited) Three Months Ended   June 30 June 30 (In millions, except per-unit and ratio 2013 2012 2013 2012 data) --------------------------------------------------------------------------------   Predecessor   Predecessor Quarterly distribution N/A N/A declared per unit $   0.2850 $   0.5575 Adjusted EBITDA $        38.7 $        82.8 attributable to MPLX LP $       26.7 $       51.8 Distributable cash N/A N/A flow attributable to MPLX LP $       27.2 $       55.2 Distribution declared:         Limited N/A N/A partner units - Public $         5.7 $        11.1         Limited N/A N/A partner units - MPC       15.4       30.1         General           N/A           N/A partner units - MPC            0.4            0.8                             N/A           N/A  Total distribution declared $       21.5 $       42.0 Coverage ratio 1.27x   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 Six Months Ended   June 30 June 30  (In millions) 2013 2012 2013 2012 --------------------------------------------------------------------------------     Predecessor   Predecessor Net Income $       34.8 $       29.8 $       70.1 $       65.0 Less:  Net income attributable to MPC-retained interest          16.2                -         33.9                - Net income attributable to MPLX LP 18.6 29.8 36.2 65.0 Add:   Net income attributable to MPC-retained interest 16.2 - 33.9 - Depreciation 11.9 9.2 23.6 18.4 Provision for income taxes 0.1 0.1 0.1 0.2           Non- cash equity- based compensation 0.3 - 0.5 -           Net interest and other financial costs (income)         0.3          (0.4)         0.5           (0.8) Adjusted EBITDA 47.4 38.7 94.8 82.8 Less: Adjusted EBITDA attributable to MPC-retained  interest         20.7              -         43.0               - Adjusted EBITDA attributable to MPLX LP 26.7 $     38.7 51.8 $      82.8 Less: Cash interest paid, net - 0.2           Income taxes paid - - Maintenance capital expenditures paid 2.3 3.8 Plus: Increase (decrease) in deferred revenue for committed volume deficiencies            2.8            7.4 Distributable cash flow attributable to MPLX LP $       27.2 $       55.2 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 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) 2013 2012 --------------------------------------------------------------------------------     Predecessor Net cash provided by operating activities $      108.6 $       94.9 Less:          Changes in working capital items 17.5 13.7          All other, net (1.0) (0.8) Plus: Non-cash equity-based compensation 0.5 -          Net loss on disposal of assets - (0.3)          Net interest and other financial costs (income) 0.5 (0.8)          Current income tax expense 0.1 0.2          Asset retirement expenditures            1.6            1.7 Adjusted EBITDA 94.8 82.8 Less: Adjusted EBITDA attributable to MPC- retained interest          43.0                - Adjusted EBITDA attributable to MPLX LP 51.8 $       82.8 Less: Cash interest paid, net 0.2           Income taxes paid -           Maintenance capital expenditures paid 3.8 Plus:  Increase (decrease) in deferred revenue for committed           volume deficiencies            7.4 Distributable cash flow attributable to MPLX LP $       55.2 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Selected Operating Data Six Months Ended (unaudited) Three Months Ended   June 30 June 30   2013 2012 2013 2012 --------------------------------------------------------------------------------     Predecessor   Predecessor Pipeline throughput (thousands of barrels per day):    Crude oil pipelines 1,075 1,193 1,075 1,157    Product pipelines         959         954         939         935       Total 2,034 2,147 2,014 2,092 Average tariff rates ($ per barrel):    Crude oil pipelines $  0.60 $  0.55 $  0.59 $  0.53    Product pipelines 0.56 0.48 0.54 0.48    Total pipelines 0.58 0.52 0.57 0.51 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Selected Financial Three Months Ended Six Months Ended Data (unaudited) June 30 June 30 (In millions) 2013 2012 2013 2012 --------------------------------------------------------------------------------     Predecessor   Predecessor Capital Expenditures ((a)): $         $    Maintenance  5.6 $          5.9  7.8 $          8.6    Expansion         28.4         41.4         38.8         58.3       Total capital expenditures 34.0 47.3 46.6 66.9       Less: Increase in capital accruals 1.2 9.4 4.2 10.4                Asset retirement expenditures          1.2          0.7          1.6          1.7 Additions to property, $         $ plant and equipment 31.6 $       37.2 40.8 $       54.8 -------------------------------------------------------------------------------- (a)   Excludes $100 million acquisition of an additional 5 percent interest in MPLX Pipe Line Holdings LP. -------------------------------------------------------------------------------- Balance Sheet Data (unaudited) June 30 March 31 (In millions, except ratio data) 2013 2013 -------------------------------------------------------------------------------- Cash and cash equivalents $           115.3 $        227.9 Total assets 1,217.7 1,311.9 Long-term debt((a)) 10.9 11.1 Total equity 1,128.6 1,236.2 Consolidated Total Debt to Consolidated EBITDA ratio (covenant basis) 0.1 0.1 -------------------------------------------------------------------------------- (a)   Represents a capital lease. Includes amounts due within one year. MPLX LP 2013 2Q Results: hugin.info/155038/R/1720303/572672.pdf This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: MPLX LP via Thomson Reuters ONE [HUG#1720303]


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