MPLX(MPLX) - 2024 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION This section presents the unaudited consolidated financial statements, management's discussion, and market risk disclosures for the period Item 1. Financial Statements This section presents unaudited consolidated financial statements for Q2 2024 and 2023, including income, balance sheets, cash flows, and equity, with detailed notes Consolidated Statements of Income Highlights (Unaudited) | (In millions, except per unit data) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Total revenues and other income | $2,690 | $5,403 | $5,898 | $5,403 | | Net income | $942 | $1,894 | $2,201 | $1,894 | | Net income attributable to MPLX LP | $933 | $1,876 | $2,181 | $1,876 | | Diluted EPS | $0.91 | $1.81 | $2.13 | $1.81 | Consolidated Balance Sheet Highlights (Unaudited) | (In millions) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total current assets | $4,196 | $2,808 | | Total assets | $38,402 | $36,529 | | Total current liabilities | $4,226 | $2,624 | | Total liabilities | $24,516 | $22,945 | | Total equity | $13,684 | $12,689 | Consolidated Statements of Cash Flows Highlights (Unaudited) | (In millions) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,856 | $2,664 | | Net cash used in investing activities | $(1,110) | $(491) | | Net cash used in financing activities | $(293) | $(1,656) | | Net change in cash | $1,453 | $517 | Notes to Consolidated Financial Statements These notes detail financial presentation, significant events including a JV gain and acquisition, equity activities, debt issuance, and segment operations - MPLX is a diversified master limited partnership with two primary segments: Logistics and Storage (L&S) for crude oil and refined products, and Gathering and Processing (G&P) for natural gas and NGLs[21][22][57] - On May 29, 2024, MPLX participated in the Whistler Joint Venture Transaction, reducing its voting interest from 37.5% to 30.4% and recognizing a gain of $151 million[29] - On March 22, 2024, MPLX completed the Utica Midstream Acquisition for $625 million in cash, increasing its ownership in OGC and OCC joint ventures and acquiring a dry gas gathering system[30] - On May 20, 2024, MPLX issued $1.65 billion of 5.50% senior notes due 2034, with proceeds intended to repay existing debt maturing in 2024 and 2025[77] - For the six months ended June 30, 2024, MPLX repurchased 4 million common units for $150 million[48][49] - As of June 30, 2024, $696 million remained under the repurchase authorization[48][49] - A cash distribution of $0.850 per common unit was declared for Q2 2024, an increase from $0.775 in Q2 2023[52][53] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 and H1 2024 financial performance, covering revenue growth, segment results, liquidity, capital resources, and the 2024 capital plan Financial Performance Summary (vs. Prior Year) | (In millions) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net income | $1,186 | $942 | $2,201 | $1,894 | | Adjusted EBITDA | $1,653 | $1,531 | $3,288 | $3,050 | | DCF attributable to MPLX LP | $1,404 | $1,315 | $2,774 | $2,583 | - Revenue growth in H1 2024 was driven by higher pipeline tariff rates in the L&S segment, higher volumes and throughput fees in the G&P segment, incremental revenues from the Torñado and Utica Midstream acquisitions, a $151 million gain from the Whistler Joint Venture Transaction, and a $25 million business interruption insurance benefit[131][132] - The company returned $1.9 billion to unitholders in the first six months of 2024 through distributions and unit repurchases[112] - Total liquidity stood at $6.0 billion as of June 30, 2024, comprising $3.5 billion in available credit capacity and $2.5 billion in cash and cash equivalents[165] Segment Results This section details L&S and G&P segment performance, showing increased Adjusted EBITDA driven by a JV gain, higher tariffs, acquisitions, and NGL prices Segment Adjusted EBITDA (in millions) | Segment | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | L&S | $1,129 | $1,022 | $2,227 | $2,048 | | G&P | $524 | $509 | $1,061 | $1,002 | - L&S segment income from equity method investments increased by $178 million in Q2 2024, mainly due to a $151 million gain on the Whistler Joint Venture Transaction and increased throughput on pipeline systems[137] - G&P segment service revenue in Q2 2024 increased by $45 million, primarily from the Torñado ($31 million) and Utica Midstream ($15 million) acquisitions[145] Liquidity and Capital Resources This section details cash flow activities, including increased operating cash, investing in acquisitions, financing through debt and repurchases, and outlines the 2024 capital plan - Net cash from operating activities increased by $192 million to $2,856 million in H1 2024 compared to H1 2023, due to improved operational results[158] - Net cash used in investing activities increased by $619 million in H1 2024, driven by the $622 million Utica Midstream Acquisition and a $92 million contribution to the Dakota Access joint venture[159][161] - The 2024 capital investment plan is $1.1 billion, comprising $950 million for growth and $150 million for maintenance[174] Capital Expenditures (Six Months Ended June 30) | (In millions) | 2024 | 2023 | | :--- | :--- | :--- | | Total growth capital expenditures | $417 | $357 | | Total maintenance capital expenditures | $79 | $64 | | Total growth and maintenance capital expenditures | $496 | $421 | Quantitative and Qualitative Disclosures about Market Risk This section discusses market risks from commodity price volatility and interest rate changes, including the impact of interest rate shifts on fixed-rate debt - The company is exposed to market risks from commodity price fluctuations and changes in interest rates[184] Interest Rate Risk Sensitivity Analysis (as of June 30, 2024) | (In millions) | Fair Value | Change in Fair Value (for 100 bps decrease) | | :--- | :--- | :--- | | Fixed-rate Debt | $20,693 | $1,574 | Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during Q2 2024 - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2024[190] - No material changes were identified in the company's internal control over financial reporting during the quarter ended June 30, 2024[191] PART II – OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and other material information Legal Proceedings No material changes to legal proceedings have occurred since the 2023 Annual Report on Form 10-K, with a $1 million environmental disclosure threshold - There have been no material changes to legal proceedings since the 2023 Annual Report on Form 10-K[194] Risk Factors No material changes to risk factors have occurred since the 2023 Annual Report on Form 10-K - No material changes to risk factors have occurred since the 2023 Annual Report on Form 10-K[195] Unregistered Sales of Equity Securities and Use of Proceeds This section details common unit repurchases during Q2 2024 as part of the $1 billion program, with remaining authorization disclosed Common Unit Repurchases (Q2 2024) | Period | Total Units Purchased | Average Price Paid per Unit | | :--- | :--- | :--- | | April 2024 | 530,729 | $41.45 | | May 2024 | 548,660 | $40.55 | | June 2024 | 745,550 | $41.25 | | Total | 1,824,939 | $41.10 | - As of June 30, 2024, $696 million remained available for repurchase under the existing $1 billion authorization[196] Other Information The MPC Loan Agreement's maturity date was extended to July 31, 2029, with other terms remaining materially unchanged - The maturity date of the MPC Loan Agreement was extended to July 31, 2029[197] Exhibits This section lists exhibits filed with the 10-Q, including amended agreements and CEO/CFO certifications - Key exhibits filed include the Second Amendment to the MPC Loan Agreement and CEO/CFO certifications pursuant to SEC rules and the Sarbanes-Oxley Act[199]