UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________

FORM 10-Q

_____________________________________________

(Mark One)



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the ~~Quarterly Period Ended~~quarterly period ended ~~September 30, 2017~~March 31, 2019



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-35714

_____________________________________________

MPLX LP

(Exact name of registrant as specified in its charter)

_____________________________________________



Delaware		27-0005456
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

200 E. Hardin Street, Findlay, Ohio		45840
(Address of principal executive offices)		(Zip code)

(419) 421-2414

(Registrant’s telephone number, including area code)

_____________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files.) Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	x	Accelerated filer	¨

Non-accelerated filer	¨ ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	¨

		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No x



Securities Registered pursuant to Section 12(b) of the Act
Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Units Representing Limited Partnership Interests	MPLX	New York Stock Exchange

MPLX LP had ~~407,066,320~~794,349,225 common ~~units and 8,307,473 general partner~~ units outstanding at ~~October 27, 2017.~~

May 3, 2019.

~~MPLX LP~~

~~Form 10-Q~~

~~Quarter Ended September 30, 2017~~

~~INDEX~~

Table of Contents

Unless the context otherwise requires, references in this report to “MPLX LP,” “MPLX,” “the Partnership,” “we,” “our,” “us,” or like terms refer to MPLX LP and its ~~subsidiaries, including MPLX Operations LLC (“MPLX Operations”), MPLX Terminal~~subsidiaries. Additionally, throughout this Quarterly Report on Form 10-Q, we have used terms in our discussion of the business and Storage LLC (“MPLX Terminal and Storage”), MarkWest Energy Partners, L.P. (“MarkWest”), MarkWest Hydrocarbon, L.L.C. (“MarkWest Hydrocarbon”), MarkWest Pioneer, L.L.C. (“MarkWest Pioneer”), MPLX Pipe Line Holdings LLC (“Pipe Line Holdings”), Marathon Pipe Line LLC (“MPL”), Ohio River Pipe Line LLC (“ORPL”), Hardin Street Marine LLC (“HSM”), Hardin Street Transportation LLC (“HST”), Woodhaven Cavern LLC (“WHC”) and MPLX Terminals LLC (“MPLXT”). Weoperating results that have ~~partial ownership interests~~been defined in ~~a number~~our Glossary of joint venture legal entities, including MarkWest Utica EMG, L.L.C. (“MarkWest Utica EMG”) and its subsidiary Ohio Gathering Company, L.L.C. (“Ohio Gathering”), Ohio Condensate Company, L.L.C. (“Ohio Condensate”), Wirth Gathering Partnership (“Wirth”), MarkWest EMG Jefferson Dry Gas Gathering Company, L.L.C. (“Jefferson Dry Gas”), Sherwood Midstream LLC (“Sherwood Midstream”), Sherwood Midstream Holdings LLC (“Sherwood Midstream Holdings”), MarEn Bakken Company, LLC (“MarEn Bakken”), Johnston County Terminal, LLC (“Johnston Terminal”), Guilford County Terminal Company, LLC (“Guilford Terminal”), LOOP LLC (“LOOP”), LOCAP LLC (“LOCAP”), Illinois Extension Pipeline Company, L.L.C. (“Illinois Extension”) and Explorer Pipeline Company (“Explorer”). References to “MPC” refer collectively to Marathon Petroleum Corporation and its subsidiaries, other than the Partnership. Unless otherwise specified, references to “Predecessor” refer collectively to HSM’s, HST’s, WHC’s and MPLXT’s related assets, liabilities and results of operations prior to the dates of their respective acquisitions effective January 1, 2014 for HSM, January 1, 2015 for HST and WHC and April 1, 2016 for MPLXT.Terms.

Table of Contents

Glossary of Terms

The abbreviations, acronyms and industry technology used in this report are defined as follows.



ASC	Accounting Standards Codification
ASU	Accounting Standards Update
ATM Program	~~A continuous offering, or~~An at-the-market program ~~by which~~for the ~~Partnership may offer~~issuance of common units ~~in amounts, at prices and on terms to be determined by market conditions and other factors at the time of any offerings~~
~~Bbl~~Barrel	~~Barrels~~One stock tank barrel, or 42 United States gallons of liquid volume, used in reference to crude oil or other liquid hydrocarbons
Bcf/d	One billion cubic feet ~~of natural gas~~ per day
Btu	One British thermal unit, an energy measurement
Condensate	A natural gas liquid with a low vapor pressure mainly composed of propane, butane, pentane and heavier hydrocarbon fractions
DCF (a non-GAAP financial measure)	Distributable Cash Flow
~~Dth/d~~	~~Dekatherms per day~~
EBITDA (a non-GAAP financial measure)	Earnings Before Interest, Taxes, Depreciation and Amortization
~~EPA~~	~~United States Environmental Protection Agency~~
FASB	Financial Accounting Standards Board
GAAP	Accounting principles generally accepted in the United States of America
Gal	Gallon
Gal/d	Gallons per day
IDR	Incentive ~~distribution right~~Distribution Right
Initial Offering	Initial public offering on October 31, 2012
LIBOR	London Interbank Offered Rate
~~MarkWest Merger~~	~~On December 4, 2015, a wholly-owned subsidiary of the Partnership merged with MarkWest Energy Partners, L.P.~~
mbpd	Thousand barrels per day
MMBtu	One million British thermal units, an energy measurement
MMcf/d	One million cubic feet of natural gas per day
~~Net operating margin (a non-GAAP financial measure)~~	~~Segment revenues, less segment purchased product costs, less realized derivative gains (losses) related to purchased product costs~~
NGL	Natural gas liquids, such as ethane, propane, butanes and natural gasoline
NYSE	New York Stock Exchange
~~OTC~~	~~Over-the-Counter~~
Partnership Agreement	~~Third~~Fourth Amended and Restated Agreement of Limited Partnership of MPLX LP, dated as of ~~October 31, 2016, as amended~~February 1, 2018
Predecessor	Collectively: - ~~HSM’s~~The related assets, liabilities and results of operations of Hardin Street Marine LLC (“HSM”) prior to the date of ~~its~~the acquisition, March 31, 2016, effective January 1, ~~2015.~~2015 - ~~HST’s, WHC’s and MPLXT’s~~The related assets, liabilities and results of operations of Hardin Street Transportation LLC (“HST”), Woodhaven Cavern LLC (“WHC”) and MPLX Terminals LLC (“MPLXT”) prior to the date of the acquisition, March 1, 2017, effective January 1, 2015 for HST and WHC and April 1, 2016 for ~~MPLXT.~~MPLXT
Realized derivative gain/loss	The gain or loss recognized when a derivative matures or is settled
SEC	United States Securities and Exchange Commission
SMR	Steam methane reformer, operated by a third party and located at the Javelina gas processing and fractionation complex in Corpus Christi, Texas
Unrealized derivative gain/loss	The gain or loss recognized on a derivative due to changes in fair value prior to the instrument maturing or settling
VIE	Variable interest entity
~~WTI~~	~~West Texas Intermediate~~

Table of Contents

Part I—Financial Information

Item 1. Financial Statements

MPLX LP

Consolidated Statements of Income (Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(In millions, except per unit data)	2017		2016⁽¹⁾		2017		2016⁽¹⁾			2019			2018
Revenues and other income:
Service revenue	$	299	$	250	$	845	$	712		$	438		$	382
Service revenue - related parties	276		253		801		676			578			471
Service revenue - product related										34			44
Rental income	69		77		208		218			94			79
Rental income - related parties	70		68		207		172			193			145
Product sales	217		157		611		394			202			207
Product sales - related parties	2		2		6		8			11			4
Gain on sale of assets	—		1		1		1
Income (loss) from equity method investments	23		6		29		(72		)
Income from equity method investments										70			61
Other income	2		2		5		5			—			4
Other income - related parties	22		22		69		67			26			23
Total revenues and other income	980		838		2,782		2,181			1,646			1,420
Costs and expenses:
Cost of revenues (excludes items below)	129		122		381		329			210			206
Purchased product costs	170		117		441		310			194			187
Rental cost of sales	19		13		44		42			37			29
Rental cost of sales - related parties	—		—		1		1			3			1
Purchases - related parties	114		109		330		286			212			177
Depreciation and amortization	164		151		515		438			211			176
Impairment expense	—		—		—		130
General and administrative expenses	59		56		174		172			82			69
Other taxes	14		12		40		37			19			18
Total costs and expenses	669		580		1,926		1,745			968			863
Income from operations	311		258		856		436			678			557
Related party interest and other financial costs	1		—		1		1			1			1
Interest expense (net of amounts capitalized of $6 million, $7 million, $24 million and $21 million, respectively)	77		51		217		158
Interest expense (net of amounts capitalized of $7 million and $9 million, respectively)										156			112
Other financial costs	15		13		40		37			14			17
Income before income taxes	218		194		598		240			507			427
Provision (benefit) for income taxes	1		—		3		(12		)
(Benefit)/provision for income taxes										(2		)	4
Net income	217		194		595		252			509			423
Less: Net income attributable to noncontrolling interests	1		2		3		3			6			2
Less: Net income attributable to Predecessor	—		51		36		149
Net income attributable to MPLX LP	216		141		556		100			503			421
Less: Preferred unit distributions	16		16		49		25			20			16
Less: General partner’s interest in net income attributable to MPLX LP	86		51		222		136
Limited partners’ interest in net income (loss) attributable to MPLX LP	$	114	$	74	$	285	$	(61	)
Limited partners’ interest in net income attributable to MPLX LP										$	483		$	405
Per Unit Data (See Note 6)
Net income (loss) attributable to MPLX LP per limited partner unit:
Net income attributable to MPLX LP per limited partner unit:
Common - basic	$	0.29	$	0.22	$	0.75	$	(0.19	)	$	0.61		$	0.61
Common - diluted	0.29		0.21		0.75		(0.19		)	$	0.61		$	0.61
Weighted average limited partner units outstanding:
Common - basic	394		341		378		324			794			661
Common - diluted	395		346		381		324			795			661
Cash distributions declared per limited partner common unit	$	0.5875	$	0.5150	$	1.6900	$	1.5300


~~(1)~~	~~Financial information has been retrospectively adjusted for the acquisition of HST, WHC and MPLXT from MPC. See Notes 1 and 3.~~

The accompanying notes are an integral part of these consolidated financial statements.

MPLX LP

Consolidated ~~Balance Sheets~~Statements of Comprehensive Income (Unaudited)

(In millions) September 30, 2017 December 31, 2016
Assets
Current assets:
Cash and cash equivalents $ 3
$ 234
Receivables, net 320
299
Receivables - related parties 152
247
Inventories 64
55
Other current assets 32
33
Total current assets 571
868
Equity method investments 3,997
2,471
Property, plant and equipment, net 11,922
11,408
Intangibles, net 463
492
Goodwill 2,245
2,245
Long-term receivables - related parties 18
11
Other noncurrent assets 22
14
Total assets $ 19,238
$ 17,509
Liabilities
Current liabilities:
Accounts payable $ 152
$ 140
Accrued liabilities 202
232
Payables - related parties 317
87
Deferred revenue 3
2
Deferred revenue - related parties 42
38
Accrued property, plant and equipment 183
146
Accrued taxes 44
38
Accrued interest payable 64
53
Other current liabilities 41
27
Total current liabilities 1,048
763
Long-term deferred revenue 34
12
Long-term deferred revenue - related parties 40
19
Long-term debt 6,848
4,422
Deferred income taxes 7
6
Deferred credits and other liabilities 175
177
Total liabilities 8,152
5,399
Commitments and contingencies (see Note 17)

Redeemable preferred units 1,000
1,000
Equity
Common unitholders - public (289 million and 271 million units issued and outstanding) 8,457
8,086
Class B unitholders (0 million and 4 million units issued and outstanding) —
133
Common unitholder - MPC (95 million and 86 million units issued and outstanding) 1,302
1,069
Common unitholder - GP (23 million and 0 units issued and outstanding) 822
—
General partner - MPC (8 million and 7 million units issued and outstanding) (626 ) 1,013
Equity of Predecessor —
791
Accumulated other comprehensive loss (14 ) —
Total MPLX LP partners’ capital 9,941
11,092
Noncontrolling interests 145
18
Total equity 10,086
11,110
Total liabilities, preferred units and equity $ 19,238
$ 17,509



	Three Months Ended March 31,
(In millions)	2019		2018
Net income	$	509	$	423
Other comprehensive income/(loss), net of tax:
Remeasurements of pension and other postretirement benefits related to equity method investments, net of tax	1		(2		)
Comprehensive income	510		421
Less comprehensive income attributable to:
Noncontrolling interests	6		2
Comprehensive income attributable to MPLX LP	$	504	$	419

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

MPLX LP

Consolidated ~~Statements of Cash Flows~~Balance Sheets (Unaudited)

Nine Months Ended
September 30,
(In millions) 2017
2016⁽¹⁾
(Decrease) increase in cash and cash equivalents
Operating activities:
Net income $ 595
$ 252
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred financing costs 38
34
Depreciation and amortization 515
438
Impairment expense —
130
Deferred income taxes 2
(16 )
Asset retirement expenditures (2 ) (4 )
Gain on disposal of assets (1 ) (1 )
(Income) loss from equity method investments (29 ) 72
Distributions from unconsolidated affiliates 136
111
Changes in:
Current receivables (20 ) (43 )
Inventories (3 ) (4 )
Fair value of derivatives (3 ) 28
Current accounts payable and accrued liabilities 6
64
Receivables from / liabilities to related parties 61
(104 )
All other, net 43
18
Net cash provided by operating activities 1,338
975
Investing activities:
Additions to property, plant and equipment (1,004 ) (943 )
Acquisitions, net of cash acquired (249 ) —
Disposal of assets 4
—
Investments - net related party loans 80
103
Investments in unconsolidated affiliates (690 ) (56 )
Distributions from unconsolidated affiliates - return of capital 24
—
All other, net (2 ) 4
Net cash used in investing activities (1,837 ) (892 )
Financing activities:
Long-term debt - borrowings 2,661
434
- repayments (251 ) (1,312 )
Related party debt - borrowings 829
2,215
- repayments (627 ) (2,223 )
Debt issuance costs (25 ) —
Net proceeds from equity offerings 483
510
Issuance of redeemable preferred units —
984
Distribution to MPC for acquisition (1,931 ) —
Distributions to preferred unitholders (49 ) (9 )
Distributions to unitholders and general partner (800 ) (612 )
Distributions to noncontrolling interests (4 ) (3 )
Contributions from noncontrolling interests 128
4
Consideration payment to Class B unitholders (25 ) (25 )
All other, net (8 ) (2 )
Contribution from MPC —
225
Distributions to MPC from Predecessor (113 ) (104 )
Net cash provided by financing activities 268
82
Net (decrease) increase in cash and cash equivalents (231 ) 165
Cash and cash equivalents at beginning of period 234
43
Cash and cash equivalents at end of period $ 3
$ 208



(In millions)	March 31, 2019			December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	93		$	68
Receivables, net	365			417
Current assets - related parties	386			290
Inventories	74			77
Other current assets	34			45
Total current assets	952			897
Equity method investments	4,270			4,174
Property, plant and equipment, net	14,816			14,639
Intangibles, net	414			424
Goodwill	2,581			2,586
Right of use assets	262			—
Noncurrent assets - related parties	256			24
Other noncurrent assets	33			35
Total assets	23,584			22,779
Liabilities
Current liabilities:
Accounts payable	110			162
Accrued liabilities	189			250
Current liabilities - related parties	204			254
Accrued property, plant and equipment	249			294
Accrued interest payable	156			143
Operating lease liabilities	46			—
Other current liabilities	75			83
Total current liabilities	1,029			1,186
Long-term deferred revenue	94			80
Long-term liabilities - related parties	273			43
Long-term debt	13,832			13,392
Deferred income taxes	12			13
Long-term operating lease liabilities	216			—
Deferred credits and other liabilities	195			197
Total liabilities	15,651			14,911
Commitments and contingencies (see Note 20)
Redeemable preferred units	1,004			1,004
Equity
Common unitholders - public (290 million and 289 million units issued and outstanding)	8,326			8,336
Common unitholder - MPC (505 million and 505 million units issued and outstanding)	(1,632		)	(1,612		)
Accumulated other comprehensive loss	(15		)	(16		)
Total MPLX LP partners’ capital	6,679			6,708
Noncontrolling interests	250			156
Total equity	6,929			6,864
Total liabilities, preferred units and equity	$	23,584		$	22,779


~~(1)~~	~~Financial information has been retrospectively adjusted for the acquisition of HST, WHC and MPLXT from MPC. See Notes 1 and 3.~~

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

MPLX LP

Consolidated Statements of ~~Equity~~Cash Flows (Unaudited)

Partnership
(In millions)
Common
Unit-holders
Public
Class B Unit-holders Public
Common
Unit-holder
MPC

Common Unit-holder
GP

General
Partner
MPC
Accumulated Other Comprehensive Loss
Non-controlling
Interests

Equity of Predecessor⁽¹⁾
Total
Balance at December 31, 2015 $ 7,691
$ 266
$ 465
$ —
$ 819
$ —
$ 13
$ 692
$ 9,946
Distributions to MPC from Predecessor —
—
—
—
—
—
—
(104 ) (104 )
Contribution from MPC —
—
84
—
141
—
—
—
225
Contribution of MarkWest Hydrocarbon from MPC —
—
—
—
(188 ) —
—
—
(188 )
Distribution of MarkWest Hydrocarbon to MPC —
—
—
—
565
—
—
—
565
Issuance of units under ATM Program 499
—
—
—
11
—
—
—
510
Net (loss) income (51 ) —
(10 ) —
136
—
3
149
227
Allocation of MPC's net investment at acquisition —
—
669
—
(337 ) —
—
(332 ) —
Distributions to unitholders and general partner (378 ) —
(98 ) —
(136 ) —
—
—
(612 )
Distributions to noncontrolling interests —
—
—
—
—
—
(3 ) —
(3 )
Contributions from noncontrolling interests —
—
—
—
—
—
4
—
4
Class B unit conversion 133
(133 ) —
—
—
—
—
—
—
Non-cash contribution from MPC —
—
—
—
—
—
—
334
334
Equity-based compensation 6
—
—
—
—
—
—
—
6
Deferred income tax impact from changes in equity (2 ) —
(13 ) —
(2 ) —
—
—
(17 )
Balance at September 30, 2016 $ 7,898
$ 133
$ 1,097

$ —
$ 1,009

$ —
$ 17
$ 739
$ 10,893

Balance at December 31, 2016 $ 8,086
$ 133
$ 1,069
$ —
$ 1,013
$ —
$ 18
$ 791
$ 11,110
Distributions to MPC from Predecessor —
—
—
—
—
—
—
(113 ) (113 )
Distributions of cash received from Joint-Interest Acquisition entities to MPC —
—
—
—
(13 ) —
—
—
(13 )
Issuance of units under ATM Program 473
—
—
—
10
—
—
—
483
Net income 212
—
68
5
222
—
3
36
546
Contribution from MPC —
—
—
—
—
(14 ) —
689
675
Allocation of MPC's net investment at acquisition —
—
845
824
(266 ) —
—
(1,403 ) —
Distribution to MPC for acquisitions —
—
(537 ) —
(1,394 ) —
—
—
(1,931 )
Distributions to unitholders and general partner (452 ) —
(143 ) (7 ) (198 ) —
—
—
(800 )
Distributions to noncontrolling interests —
—
—
—
—
—
(4 ) —
(4 )
Contributions from noncontrolling interests —
—
—
—
—
—
128
—
128
Class B unit conversion 133
(133 ) —
—
—
—
—
—
—
Equity-based compensation 5
—
—
—
—
—
—
—
5
Balance at September 30, 2017 $ 8,457
$ —
$ 1,302

$ 822
$ (626 ) $ (14 ) $ 145
$ —
$ 10,086



	Three Months Ended March 31,
(In millions)	2019			2018
Increase/(decrease) in cash, cash equivalents and restricted cash
Operating activities:
Net income	$	509		$	423
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of deferred financing costs	13			16
Depreciation and amortization	211			176
Deferred income taxes	(2		)	4
Asset retirement expenditures	—			(1		)
Loss on disposal of assets	1			—
Income from equity method investments	(70		)	(61		)
Distributions from unconsolidated affiliates	101			68
Changes in:
Current receivables	57			(8		)
Inventories	3			2
Fair value of derivatives	7			(9		)
Current accounts payable and accrued liabilities	(78		)	(44		)
Current assets/current liabilities - related parties	(147		)	(126		)
Right of use assets/operating lease liabilities	3			—
Deferred revenue	14			7
All other, net	(4		)	3
Net cash provided by operating activities	618			450
Investing activities:
Additions to property, plant and equipment	(457		)	(455		)
Acquisitions, net of cash acquired	1			—
Disposal of assets	7			2
Investments in unconsolidated affiliates	(128		)	(38		)
Distributions from unconsolidated affiliates - return of capital	2			—
All other, net	—			1
Net cash used in investing activities	(575		)	(490		)
Financing activities:
Long-term debt - borrowings	825			9,610
- repayments	(400		)	(4,655		)
Related party debt - borrowings	851			452
- repayments	(851		)	(838		)
Debt issuance costs	—			(53		)
Distributions to MPC for acquisitions	—			(4,111		)
Distributions to noncontrolling interests	(6		)	(3		)
Distributions to preferred unitholders	(20		)	(16		)
Distributions to unitholders and general partner	(515		)	(347		)
Contributions from noncontrolling interests	94			1
All other, net	(4		)	(3		)
Net cash (used in)/provided by financing activities	(26		)	37
Net increase/(decrease) in cash, cash equivalents and restricted cash	17			(3		)
Cash, cash equivalents and restricted cash at beginning of period	76			9
Cash, cash equivalents and restricted cash at end of period	$	93		$	6


~~(1)~~	~~Financial information has been retrospectively adjusted for the acquisition of HST, WHC and MPLXT from MPC. See Notes 1 and 3.~~

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

MPLX LP

Consolidated Statements of Equity (Unaudited)



	Partnership
(In millions)	Common Unit-holders Public			Common Unit-holder MPC			General Partner MPC			Accumulated Other Comprehensive Loss			Non-controlling Interests			Equity of Predecessor			Total
Balance at December 31, 2017	$	8,379		$	2,099		$	(637	)	$	(14	)	$	146		$	—		$	9,973
Net income (excludes amounts attributable to preferred units)	180			225			—			—			2			—			407
Allocation of MPC's net investment at acquisition	—			5,172			(4,126		)	—			—			(1,046		)	—
Distributions to:
MPC for acquisition	—			(936		)	(3,164		)	—			—			—			(4,100		)
Unitholders and general partner	(176		)	(171		)	—			—			—			—			(347		)
Noncontrolling interests	—			—			—			—			(3		)	—			(3		)
Contributions from:
MPC	—			—			—			—			—			1,046			1,046
Noncontrolling interests	—			—			—			—			1			—			1
Conversion of GP economic interests	—			(7,926		)	7,926			—			—			—			—
Other	2			—			1			(2		)	—			—			1
Balance at March 31, 2018	8,385			(1,537		)	—			(16		)	146			—			6,978

Balance at December 31, 2018	8,336			(1,612		)	—			(16		)	156			—			6,864
Net income (excludes amounts attributable to preferred units)	176			307			—			—			6			—			489
Distributions to:
Unitholders	(188		)	(327		)	—			—			—			—			(515		)
Noncontrolling interests	—			—			—			—			(6		)	—			(6		)
Contributions from:
Noncontrolling interests	—			—			—			—			94			—			94
Other	2			—			—			1			—			—			3
Balance at March 31, 2019	$	8,326		$	(1,632	)	$	—		$	(15	)	$	250		$	—		$	6,929

The accompanying notes are an integral part of these consolidated financial statements.

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Notes to Consolidated Financial Statements (Unaudited)

1. Description of the Business and Basis of Presentation

Description of the Business – MPLX LP is a diversified, ~~growth-oriented~~large-cap master limited partnership formed by Marathon Petroleum ~~Corporation.~~Corporation that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. References in this report to “MPLX LP,” “MPLX,” “the Partnership,” “we,” “ours,” “us,” or like terms refer to MPLX LP and its subsidiaries. References to “MPC” refer collectively to Marathon Petroleum Corporation as our sponsor and its subsidiaries, ~~(collectively,~~other than the ~~“Partnership”)~~Partnership. We are engaged in ~~the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and~~ the transportation, storage and distribution of crude oil and refined petroleum ~~products, principally for our sponsor. References to “MPC” refer collectively to Marathon Petroleum Corporation~~products; the gathering, processing and ~~its subsidiaries, other than~~transportation of natural gas; and the ~~Partnership.~~gathering, transportation, fractionation, storage and marketing of NGLs. MPLX’s principal executive office is located in Findlay, Ohio.

~~The Partnership’s~~MPLX’s business consists of two segments based on the nature of services it offers: Logistics and Storage (“L&S”), which ~~is focused on~~relates primarily to crude oil and refined petroleum ~~products~~products; and Gathering and Processing (“G&P”), which ~~is focused on~~relates primarily to natural gas and NGLs. See Note 9 for additional information regarding ~~operations.~~the operations and results of these segments.

Basis of Presentation – The Partnership’s consolidated financial statements include all majority-owned and controlled subsidiaries. For non-wholly-owned consolidated subsidiaries, the interests owned by third parties have been recorded as ~~Noncontrolling interests~~ in the accompanying Consolidated Balance Sheets. Intercompany investments, accounts and transactions have been eliminated. The Partnership’s investments in which the Partnership exercises significant influence but does not control and does not have a controlling financial interest are accounted for using the equity method. The Partnership’s investments in a VIE in which the Partnership exercises significant influence but does not control and is not the primary beneficiary are also accounted for using the equity method.

Effective March 1, 2017, the Partnership acquired pipeline, storage and terminal businesses that are operated through Hardin Street Transportation LLC (“HST”), Woodhaven Cavern LLC (“WHC”) and MPLX Terminals LLC (“MPLXT”) (collectively with Hardin Street Marine LLC (“HSM”), “Predecessor”) from MPC. The acquisition from MPC was considered a transfer between entities under common control. Accordingly, the Partnership recorded the acquisition from MPC on its Consolidated Balance Sheets at MPC’s historical basis instead of fair value. Transfers of businesses between entities under common control require prior periods to be retrospectively adjusted to furnish comparative information since inception of common control. Therefore, the accompanying consolidated financial statements and related notes of MPLX LP have been retrospectively adjusted to include the historical results of the businesses acquired from MPC prior to the effective dates of the acquisition. See Note 3 for additional information regarding the HST, WHC and MPLXT acquisition. The accompanying financial statements and related notes present the combined financial position, results of operations, cash flows and equity of Predecessor on a historical basis. The financial statements of Predecessor have been prepared from the separate records maintained by MPC and may not necessarily be indicative of the conditions or the results of operations that would have existed if Predecessor had been operated as an unaffiliated entity.

In preparing the Consolidated Statements of Equity, net income attributable to MPLX LP is allocated to preferred unitholders based on a fixed distribution schedule, as discussed in Note 8, and subsequently allocated to the general partner and limited partner unitholders. Distributions, although earned, are not accrued until declared. However, when distributions related to the IDRs are made, earnings equal to the amount of those distributions are first allocated to the general partner before the remaining earnings are allocated to the limited partner unitholders based on their respective ownership percentages. The allocation of net income attributable to MPLX LP for purposes of calculating net income per limited partner unit is described in Note 6.

The accompanying interim consolidated financial statements are unaudited; however, in the opinion of ~~the Partnership’s~~MPLX’s management, these statements reflect all adjustments necessary for a fair statement of the results for the periods reported. All such adjustments are of a normal, recurring nature unless otherwise disclosed. These interim consolidated financial statements, including the notes, have been prepared in accordance with the rules and regulations of the SEC applicable to interim period financial statements and do not include all of the information and disclosures required by GAAP for complete financial statements. Certain amounts in prior years have been reclassified to conform to current year presentation.

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, ~~2016, as updated by our Current Report on Form 8-K filed on May 1, 2017.~~2018. The results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2019 are not necessarily indicative of the results to be expected for the full year.

7MPLX’s consolidated financial statements include all majority-owned and controlled subsidiaries. For non-wholly-owned consolidated subsidiaries, the interests owned by third parties have been recorded as “Noncontrolling interests” on the accompanying Consolidated Balance Sheets. Intercompany investments, accounts and transactions have been eliminated. MPLX’s investments in which MPLX exercises significant influence but does not control and does not have a controlling financial interest are accounted for using the equity method. MPLX’s investments in a VIE in which MPLX exercises significant influence but does not control and is not the primary beneficiary are also accounted for using the equity method.

In preparing the Consolidated Statements of Equity, net income attributable to MPLX LP is allocated to preferred unitholders based on a fixed distribution schedule. Distributions, although earned, are not accrued until declared. The allocation of net income attributable to MPLX LP for purposes of calculating net income per limited partner unit is described in Note 6.

2. Accounting Standards

Recently Adopted

ASU 2016-02, Leases

We adopted ASU No. 2016-02, Leases (Topic 842), as of January 1, 2019, electing the transition method which permits entities to adopt the provisions of the standard using the modified retrospective approach without adjusting comparative periods. We also elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things allowed us to grandfather the historical accounting conclusions until a reassessment event is present. We have also elected the practical expedient to not recognize short-term leases on the balance sheet, the practical expedient related to right of way permits and land easements which allows us to carry forward our accounting treatment for those existing agreements, and the practical expedient to combine lease and non-lease components for the majority of our underlying classes of assets except for our third-party contractor service and equipment agreements and boat and barge equipment agreements in which we are the lessee. We did not elect the practical expedient to combine lease and non-lease components for arrangements in which we are the lessor. In ~~October 2016,~~instances where the ~~FASB issued~~practical expedient was not elected, lease and non-lease consideration is allocated based on relative standalone selling price.

Right of use (“ROU”) assets represent our right to use an ~~accounting standards update~~underlying asset in which we obtain substantially all of the economic benefits and the right to ~~amend~~direct the ~~consolidation guidance issued in February 2015~~use of the asset during the lease term while lease liabilities represent our obligation to ~~require~~make

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lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. We recognize ROU assets and lease liabilities on the balance sheet for leases with a lease term of greater than one year. Payments that ~~a decision maker consider,~~are not fixed at the commencement of the lease are considered variable and are excluded from the ROU asset and lease liability calculations. In the measurement of our ROU assets and lease liabilities, the fixed lease payments in the ~~determination~~agreement are discounted using a secured incremental borrowing rate for a term similar to the duration of the ~~primary beneficiary, its indirect interest in a VIE held by a related party that~~lease, as our leases do not provide implicit rates. Operating lease expense is ~~under common control~~recognized on a ~~proportionate~~straight-line basis ~~only.~~over the lease term.

Adoption of the new standard resulted in the recording of ROU assets and lease liabilities of approximately $505 million and $502 million, respectively, as of January 1, 2019. The ~~change was effective for the financial~~standard did not materially impact our consolidated statements ~~for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Partnership was~~of income, cash flows or equity as a result of adoption.

As a lessor under ASC 842, MPLX may be required to ~~apply~~re-classify existing operating leases to sales-type leases upon modification and related reassessment of the ~~standard retrospectively~~leases. If such a modification were to ~~January 1, 2016,~~occur, it may result in the ~~date on which~~de-recognition of existing assets, recognition of a receivable in the ~~Partnership~~amount of the present value of fixed payments expected to be received by MPLX under the lease, and recognition of a corresponding gain or loss in the period of change. MPLX will evaluate the impacts of lease reassessments as modifications occur.

We also adopted the ~~consolidation guidance issued in February 2015. The Partnership adopted this accounting standards update in~~following standard during the first quarter of ~~2017 and it did not have an impact on the consolidated financial statements.~~

In March 2016, the FASB issued an accounting standards update on the accounting for employee share-based payments. This update requires the recognition of income tax effects of awards through the income statement when awards vest or are settled. It also increases the amount an employer can withhold for tax purposes without triggering liability accounting. Lastly, it allows employers to make a policy election to account for forfeitures as they occur. The changes were effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Under the new guidance, the Partnership will continue estimating forfeiture rates to calculate compensation cost. The Partnership adopted this accounting standards update in the first quarter of 2017 and it2019, which did not have a material impact ~~on the consolidated~~to our financial ~~statements.~~statements or financial statement disclosures:



ASU		Effective Date
2017-12	Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities	January 1, 2019

Not Yet Adopted

~~In August 2017,~~ASU 2017-04, Intangibles - Goodwill and Other - Simplifying the FASB issued an accounting standards update to amend the hedge accounting rules to simplify the application of hedge accounting guidance and better portray the economic results of risk management activities in the financial statements. The guidance expands the ability to hedge nonfinancial and financial risk components, reduces complexity in fair value hedges of interest rate risk, eliminates the requirement to separately measure and report hedge ineffectiveness, as well as eases certain hedge effectiveness assessment requirements. The guidance is effective beginning in 2019 with early adoption permitted. The Partnership is in the process of determining the impact of this guidance, including transition elections and required disclosures, on the consolidated financial statements and the timing of adoption.

In May 2017, the FASB issued an accounting standards update to provide guidance about when changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. An entity should accountTest for the effects of a modification unless the fair value, vesting conditions and balance sheet classification of the modified award is the same as the original award immediately before the original award is modified. The Partnership will adopt the new standard on a prospective basis beginning on January 1, 2018. The application of this new accounting standard is not expected to have a material impact on the consolidated financial statements.

In February 2017, the FASB issued an accounting standards update addressing the derecognition of nonfinancial assets. The guidance defines in-substance nonfinancial assets, and states that the derecognition of business activities should be evaluated under the consolidation guidance, with limited exceptions related to conveyances of oil and gas mineral rights or contracts with customers. The standard eliminates the previous exclusion for businesses that are in-substance real estate, and eliminates some differences based on whether a transferred set is that of assets or a business and whether the transfer is to a joint venture. The standard must be implemented in conjunction with the implementation of the revenue recognition accounting standards update, which the Partnership will implement January 1, 2018. The Partnership plans to adopt the new standard using the modified retrospective method and does not expect the application of this accounting standards update to have a material impact on the consolidated financial statements.

Goodwill Impairment

In January 2017, the FASB issued an ~~accounting standards update~~ASU which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the new guidance, the recognition of an impairment charge is calculated based on the amount by which the carrying amount exceeds the reporting unit’s fair value, which could be different from the amount calculated under the current method using the implied fair value of the goodwill; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The guidance should be applied on a prospective basis, and is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. ~~The Partnership is in the process~~

ASU 2016-13, Credit Losses - Measurement of ~~determining the impact of the accounting standards update~~Credit Losses on ~~the consolidated financial statements.~~

In January 2017, the FASB issued an accounting standards update to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of

assets or businesses. The standard is intended to narrow the definition of a business by specifying the minimum inputs and processes and by narrowing the definition of outputs. The change is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The guidance will be applied prospectively and early adoption is permitted for certain transactions. The Partnership is in the process of evaluating this accounting standards update and determining whether it will early adopt.

In November 2016, the FASB issued an accounting standards update requiring that the statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The change is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. Retrospective application is required. The application of this accounting standards update will not have a material impact on the Consolidated Statements of Cash Flows.

In August 2016, the FASB issued an accounting standards update related to the classification of certain cash flows. The accounting standards update provides specific guidance on eight cash flow classification issues, including debt prepayment or debt extinguishment costs and distributions received from equity method investees, to reduce diversity in practice. The change is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. Retrospective application is required. The Partnership does not expect application of this accounting standards update to have a material impact on the Consolidated Statements of Cash Flows.

Financial Instruments

In June 2016, the FASB issued an ~~accounting standards update~~ASU related to the accounting for credit losses on certain financial instruments. The guidance requires that for most financial assets, losses ~~are~~be based on an expected loss approach which includes estimates of losses over the life of exposure that considers historical, current and forecasted information. Expanded disclosures related to the methods used to estimate the losses as well as a specific disaggregation of balances for financial assets are also required. The change is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. ~~The Partnership does~~We do not expect application of this ~~accounting standards update~~ASU to have a material impact on ~~the~~our consolidated financial statements.

3. Acquisitions

Mt. Airy Terminal

On September 26, 2018, MPLX acquired an eastern U.S. Gulf Coast export terminal (the “Mt. Airy Terminal”) from Pin Oak Holdings, LLC for total consideration of $451 million. At the time of the acquisition, the terminal included tanks with 4 million barrels of third-party leased storage capacity and a dock with 120 mbpd of capacity. The Mt. Airy Terminal is located on the Mississippi River between New Orleans and Baton Rouge, is in close proximity to several Gulf Coast refineries including MPC’s Garyville Refinery and is near numerous rail lines and pipelines. The Mt. Airy Terminal is accounted for within the L&S segment. In ~~February 2016,~~ the ~~FASB issued~~first quarter of 2019, an ~~accounting standards update requiring lessees~~adjustment to ~~record virtually all leases on their balance sheets. The accounting standards update also requires expanded disclosures~~the initial purchase price was made for approximately $5 million related to ~~help financial statement users better understand~~ the ~~amount, timing~~final settlement of the acquisition. This reduced the total purchase price to $446 million and ~~uncertainty~~resulted in $336 million of ~~cash flows arising from leases. For lessors, this amended guidance modifies the classification criteria~~property, plant and equipment, $121 million of goodwill and the accounting for sales-type and direct financing leases. The change will be effective on a modified retrospective basis for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The Partnership is currently evaluating the impact of this standard on the Partnership’s financial statements and disclosures, internal controls and accounting policies. This evaluation process includes reviewing all forms of leases, performing a completeness assessment over the lease population and analyzing the practical expedients in orderremainder being attributable to determine the best path to implementation. The Partnership does not plan to early adopt the standard. The Partnership believes the impact will be material on the consolidated financial statements as all operating leases will be recognized as a right of use asset and lease obligation. Based on results of the evaluation process to date, the Partnership also believes the impact on existing processes, controls and information systems may be material.

In January 2016, the FASB issued an accounting standards update requiring unconsolidated equity investments, not accounted for under the equity method, to be measured at fair value with changes in fair value recognized in net ~~income. The update also requires the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes and the separate presentation of financial assets and~~ liabilities by measurement category and form on the balance sheet and accompanying notes. The update eliminates the requirement to disclose the methods and assumptions used in estimating the fair value of financial instruments measured at amortized cost. Lastly, the accounting standards update requires separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when electing to measure the liability at fair value in accordance with the fair value option for financial instruments. The changes are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted only for guidance regarding presentation of the liability’s credit risk. The Partnership does not expect application of this accounting standards update to have a material impact on the consolidated financial statements.assumed.

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~~In May 2014,~~Goodwill represents the FASB issued Accounting Standards Update 2014-09 which created Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). The guidance in ASC 606 states that revenue is recognized when a customer obtains control of a good or service. Recognitionsignificant growth potential of the ~~revenue will involve a multiple step approach including identifying the contract, identifying the separate performance obligations, determining the transaction price, allocating the price~~terminal due to the ~~performance obligations~~multiple pipelines and ~~recognizing~~rail lines which cross the ~~revenue~~property, the terminal’s position as an aggregation point for liquids growth in the region for both ocean-going vessels and inland barges, the proximity of the terminal to MPC’s Garyville refinery and other refineries in the region as well as the ~~obligations are satisfied. Additional disclosures will be required~~opportunity to ~~provide adequate information to understand~~construct an additional dock at the nature, amount, timing and uncertainty of reported revenues and revenues expected to be recognized. The change will be effective on a retrospective or modified retrospective basis for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted no earlier than January 1, 2017.site.

The Partnership will adopt the revenue recognition standard during the first quarter of 2018. The Partnership plans to adopt the new standard using the modified retrospective method, which will result in a cumulative effect adjustment as of the date of adoption. By selecting this adoption method, the Partnership will disclose the amount by which each financial statement line item is affected by the standard in the current reporting period after adoption as compared with the guidance that was in effect before adoption.

~~The Partnership is currently evaluating the impact of the revenue recognition standard on its consolidated financial statements~~Refining Logistics and disclosures, internal controls and accounting policies. This evaluation process includes a phased approach, the first phase of which includes reviewing a sample of contracts and transaction types across segments. This phase was completed as of September 30, 2017.

Based on the results of the first phase assessment, the Partnership has reached conclusions for all material contract types. Revenue recognition patterns will not change for fee-based or percent-of-proceeds contracts. The Partnership does expect certain amounts to be grossed up in revenue and cost of revenues as a result of implementation, specifically related to third-party reimbursements from customers and commodities received as consideration in service agreements, such as keep-whole arrangements. In the third quarter of 2017, the Partnership finalized a conclusion on the valuation of non-cash consideration received in the form of a commodity product, with the valuation being performed on the date the service performance obligation is completed.

The Partnership is in the process of finalizing the second phase of implementation, which includes the calculation of the impact of the new standard on results and the development of new policies, procedures and disclosures related to the application upon adoption. The Partnership believes third-party reimbursements included in the transaction price would have resulted in a gross up in 2016 and 2017 service revenue and cost of revenues between $300 million and $350 million annually, with no impact to net income. The Partnership will provide a summary of the total ASC 606 impact in the Annual Report on Form 10-K for the year ended December 31, 2017.

~~3. Acquisitions~~

~~Joint-Interest~~Fuels Distribution Acquisition

On ~~September~~February 1, ~~2017,~~2018, MPC and MPLX LP closed on an agreement for the ~~Partnership entered into a Membership Interests~~dropdown of refining logistics assets and ~~Shares Contributions Agreement (the “September 2017 Contributions Agreement”) with~~fuels distribution services to MPLX ~~GP LLC (“MPLX GP”), MPLX Logistics Holdings LLC (“MPLX Logistics”), MPLX Holdings Inc. (“MPLX Holdings”)~~LP. MPC contributed these assets and ~~MPC Investment LLC (“MPC Investment”), each a wholly-owned subsidiary of MPC, whereby the Partnership agreed to acquire certain ownership interests~~services in joint venture entities indirectly held by MPC. Pursuant to the September 2017 Contributions Agreement, MPC Investment agreed to contribute: all of the membership interests of Lincoln Pipeline LLC, which holds a 35 percent interest in Illinois Extension Pipeline Company, L.L.C. (“Illinois Extension”); all of the membership interests of MPL Louisiana Holdings LLC, which holds a 40.7 percent interest in LOOP LLC (“LOOP”); a 58.52 percent interest in LOCAP LLC (“LOCAP”); and a 24.51 percent interest in Explorer Pipeline Company (“Explorer”), through a series of intercompany contributions to the Partnershipexchange for ~~an agreed upon purchase price of approximately $420 million~~$4.1 billion in cash and ~~equity consideration valued at approximately $630 million for total consideration of $1.05 billion (collectively, the “Joint-Interest Acquisition”). The~~a fixed number of MPLX LP common units ~~representing the equity consideration was then determined by dividing the contribution amount by the simple average~~and general partner units of ~~the ten day trading volume weighted average NYSE price of a common unit for the ten trading days ending at market close on August 31, 2017.~~111,611,111 and 2,277,778, respectively. The fair value of the common and general partner units issued as of the acquisition date was ~~approximately $653 million~~$4.3 billion based on the closing common unit price as of ~~September~~February 1, ~~2017,~~2018, as recorded on the Consolidated Statements of Equity, for a total purchase price of ~~$1.07~~$8.4 billion. The equity issued consisted of: (i) ~~13,719,017~~85,610,278 common units to MPLX GP LLC (“MPLX GP”), (ii) ~~3,350,893~~18,176,666 common units to MPLX Logistics Holdings LLC and (iii) ~~1,441,224~~7,824,167 common units to MPLX ~~Holdings. The Partnership~~Holdings Inc. MPLX also issued ~~377,778~~2,277,778 general partner units to MPLX GP in order to maintain its two percent general partner interest (“GP Interest”) in ~~the Partnership.~~

Illinois Extension operates the 168-mile, 24-inch diameter Southern Access Extension (“SAX”) crude oil pipeline from Flanagan, Illinois to Patoka, Illinois, as well as additional tankage and two pump stations. LOOP owns and operates midstream crude oil infrastructure, including a deep water oil port offshore of Louisiana, pipelines and onshore storage facilities. LOOP also manages the operations of LOCAP, an affiliate pipeline system. LOCAP owns and operates a crude oil pipeline and tank facility in St. James, Louisiana, that distributes oil received from LOOP’s storage facilities and other connecting pipelines to nearby refineries and into the mid-continent region of the United States. Explorer owns and operates an approximate 1,830-mile common carrier pipeline that primarily transports gasoline, diesel, diluent and jet fuel from the Gulf Coast refining complex to the Midwest United States. The Partnership accounts for the Joint-Interest Acquisition entities as equity method investments within its L&S segment.

As a transfer between entities under common control, the Partnership recorded the Joint-Interest Acquisition on its Consolidated Balance Sheets at MPC’s historical basis, which included accumulated other comprehensive loss. The Partnership recognizes an accumulated other comprehensive loss on its Consolidated Balance Sheets relating to pension and other post-retirement benefits provided by the LOOP and Explorer joint-interests to their employees. MPLX LP is not a sponsor of these benefit plans. There were no changes to ~~Accumulated other comprehensive loss~~ ~~during the period September 1, 2017 through September 30, 2017.~~

Distributions of cash received from the entities and interests acquired in the Joint-Interest Acquisition related to periods prior to the acquisition will be prorated on a daily basis with MPLX LP retaining the portion of distributions beginning on the closing date. All amounts distributed to MPLX LP related to periods before the acquisition will be paid to MPC. Additionally, MPLX LP has agreed to pay MPC for any distributions of cash from LOOP related to the sale of LOOP’s excess crude oil inventory. Because the future distributions or payments cannot be reasonably quantified, a liability was not recorded in connection with the acquisition. MPLX LP subsequently received distributions related to the third quarter 2017 and recorded a liability to MPC and a corresponding decrease to the general partner’s equity for $13 million, as shown on the Consolidated Statements of Equity.

There is no income associated with the Joint-Interest Acquisition included in the Consolidated Statements of Income since the September 1, 2017 acquisition date, as the Partnership accounts for these investments in arrears using the most recently available information. The Partnership’s investment balance at September 30, 2017 related to the acquired interests is approximately $645 million and reported under the caption ~~Equity method investments~~ ~~on the Consolidated Balance Sheets.~~MPLX. MPC agreed to waive approximately two-thirds of the third quarter 2017 distributions on the common units issued in connection with the Joint-Interest Acquisition. As a result of this waiver, MPC did not receive approximately two-thirds of the distributions or IDRs that would have otherwise accrued on such common units with respect to the third quarter 2017 distributions. The value of these waived distributions was $10 million.

~~Acquisition of Hardin Street Transportation LLC, Woodhaven Cavern LLC and MPLX Terminals LLC~~

MPC contributed the assets of HST, WHC and MPLXT to newly created and wholly-owned subsidiaries and entered into commercial agreements related to services provided by these new entities to MPC on January 1, 2015 for HST and WHC and April 1, 2016 for MPLXT. Pursuant to a Membership Interests Contributions Agreement entered into on March 1, 2017 by the Partnership with MPLX GP, MPLX Logistics, MPLX Holdings and MPC Investment, each a wholly-owned subsidiary of MPC, MPC Investment agreed to contribute the outstanding membership interests in HST, WHC and MPLXT through a series of intercompany contributions to the Partnership for approximately $1.5 billion in cash and equity consideration valued at approximately $504 million (the “Transaction”). The number of common units representing the equity consideration was determined by dividing the contribution amount by the simple average of the ten day trailing volume weighted average NYSE price of a common unit for the ten trading days ending at market close on February 28, 2017. The fair value of the common and general partner units issued was approximately $503 million, as recorded on the Consolidated Statements of Equity, and consisted of (i) 9,197,900 common units to MPLX GP, (ii) 2,630,427 common units to MPLX Logistics and (iii) 1,132,049 common units to MPLX Holdings. The Partnership also issued 264,497 general partner units to MPLX GP in order to maintain its two percent GP Interest in the Partnership. MPC agreed to waive two-thirdsone-third of the first quarter ~~2017~~2018 distributions on the common units issued in connection with the Transaction. As a result of this waiver, MPC did not receive two-thirds of the general partner distributions or IDRs that would have otherwise accrued on such common units with respect to the first quarter 2017 distributions. The value of these waived distributions was $6 million.

HST owns and operates various private crude oil and refined product pipeline systems and associated storage tanks. As of the acquisition date, these pipeline systems consisted of 174 miles of crude oil pipelines and 430 miles of refined products pipelines. WHC owns and operates nine butane and propane storage caverns located in Michigan with approximately 1.8 million barrels of NGL storage capacity. As of the acquisition date, MPLXT owned and operated 59 terminals for the receipt, storage, blending, additization, handling and redelivery of refined petroleum products. Additionally, MPLXT operated one leased terminal and had partial ownership interest in two terminals. Collectively, these 62 terminals have a combined shell capacity of approximately 23.6 million barrels. The terminal facilities are located primarily in the Midwest, Gulf Coast and Southeast regions of the United States. The Partnership accounts for these businesses within its L&S segment.

The Partnership retrospectively adjusted the historical financial results for all periods to give effect to the acquisition of HST and WHC effective January 1, 2015, and the acquisition of MPLXT effective April 1, 2016, as required for transactions between entities under common control. Prior to these dates, these entities were not considered businesses and, therefore, there are no financial results from which to recast.

The following tables present the Partnership’s previously reported unaudited Consolidated Statements of Income for the three and nine months ended September 30, 2016, retrospectively adjusted for the acquisition of HST, WHC and MPLXT:

Three Months Ended September 30, 2016
(In millions, except per unit data) MPLX LP (Previously Reported) HST/WHC MPLXT
Eliminations⁽¹⁾
MPLX LP (Currently Reported)
Revenues and other income:
Service revenue $ 250
$ —
$ —
$ —
$ 250
Service revenue - related parties 153
28
72
—
253
Rental income 77
—
—
—
77
Rental income - related parties 29
13
26
—
68
Product sales 157
—
—
—
157
Product sales - related parties 2
—
—
—
2
Income from equity method investments 6
—
—
—
6
Gain on sale of assets 1
—
—
—
1
Other income 2
—
—
—
2
Other income - related parties 26
—
—
(4 ) 22
Total revenues and other income 703
41
98
(4 ) 838
Costs and expenses:
Cost of revenues (excludes items below) 90
10
22
—
122
Purchased product costs 117
—
—
—
117
Rental cost of sales 11
2
—
—
13
Rental cost of sales - related parties —
1
—
(1 ) —
Purchases - related parties 84
4
24
(3 ) 109
Depreciation and amortization 138
4
9
—
151
General and administrative expenses 46
2
8
—
56
Other taxes 10
—
2
—
12
Total costs and expenses 496
23
65
(4 ) 580
Income from operations 207
18
33
—
258
Interest expense (net of amounts capitalized) 51
—
—
—
51
Other financial costs 13
—
—
—
13
Income before income taxes 143
18
33
—
194
Net income 143
18
33
—
194
Less: Net income attributable to noncontrolling interests 2
—
—
—
2
Less: Net income attributable to Predecessor —
18
33
—
51
Net income attributable to MPLX LP 141
—
—
—
141
Less: Preferred unit distributions 16
—
—
—
16
Less: General partner’s interest in net income attributable to MPLX LP 51
—
—
—
51
Limited partners’ interest in net income attributable to MPLX LP $ 74
$ —
$ —
$ —
$ 74


~~(1)~~	~~Represents intercompany transactions eliminated during the consolidation process, in accordance with GAAP.~~

Nine Months Ended September 30, 2016
(In millions, except per unit data) MPLX LP (Previously Reported) HST/WHC MPLXT
Eliminations⁽¹⁾
MPLX LP (Currently Reported)
Revenues and other income:
Service revenue $ 712
$ —
$ —
$ —
$ 712
Service revenue - related parties 448
82
146
—
676
Rental income 218
—
—
—
218
Rental income - related parties 84
36
52
—
172
Product sales 394
—
—
—
394
Product sales - related parties 8
—
—
—
8
Loss from equity method investments (72 ) —
—
—
(72 )
Gain on sale of assets 1
—
—
—
1
Other income 5
—
—
—
5
Other income - related parties 78
—
—
(11 ) 67
Total revenues and other income 1,876
118
198
(11 ) 2,181
Costs and expenses:
Cost of revenues (excludes items below) 263
24
42
—
329
Purchased product costs 310
—
—
—
310
Rental cost of sales 39
3
—
—
42
Rental cost of sales - related parties —
2
—
(1 ) 1
Purchases - related parties 238
13
45
(10 ) 286
Depreciation and amortization 407
12
19
—
438
Impairment expense 130
—
—
—
130
General and administrative expenses 147
5
20
—
172
Other taxes 32
2
3
—
37
Total costs and expenses 1,566
61
129
(11 ) 1,745
Income from operations 310
57
69
—
436
Related party interest and other financial income 1
—
—
—
1
Interest expense (net of amounts capitalized) 158
—
—
—
158
Other financial costs 37
—
—
—
37
Income before income taxes 114
57
69
—
240
Benefit for income taxes (12 ) —
—
—
(12 )
Net income 126
57
69
—
252
Less: Net income attributable to noncontrolling interests 3
—
—
—
3
Less: Net income attributable to Predecessor 23
57
69
—
149
Net income attributable to MPLX LP 100
—
—
—
100
Less: Preferred unit distributions 25
—
—
—
25
Less: General partner’s interest in net income attributable to MPLX LP 136
—
—
—
136
Limited partners’ interest in net loss attributable to MPLX LP $ (61 )
$ —

$ —

$ —

$ (61 )


~~(1)~~	~~Represents intercompany transactions eliminated during the consolidation process, in accordance with GAAP.~~

~~The following table presents the Partnership’s previously reported unaudited Consolidated Statements of Cash Flows, retrospectively adjusted for the acquisition of HST, WHC and MPLXT:~~

Nine Months Ended September 30, 2016
(In millions) MPLX LP (Previously Reported) HST/WHC MPLXT MPLX LP (Currently Reported)
Increase (decrease) in cash and cash equivalents
Operating activities:
Net income $ 126
$ 57
$ 69
$ 252
Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Amortization of deferred financing costs 34
—
—
34
Depreciation and amortization 407
12
19
438
Impairment expense 130
—
—
130
Deferred income taxes (16 ) —
—
(16 )
Asset retirement expenditures (3 ) (1 ) —
(4 )
Gain on disposal of assets (1 ) —
—
(1 )
Loss from equity method investments 72
—
—
72
Distributions from unconsolidated affiliates 111
—
—
111
Changes in:
Current receivables (44 ) 1
—
(43 )
Inventories (4 ) —
—
(4 )
Fair value of derivatives 28
—
—
28
Current accounts payable and accrued liabilities 59
(1 ) 6
64
Receivables from / liabilities to related parties 15
3
(122 ) (104 )
All other, net 18
2
(2 ) 18
Net cash provided by (used in) operating activities 932
73
(30 ) 975
Investing activities:
Additions to property, plant and equipment (874 ) (36 ) (33 ) (943 )
Investments - net related party loans 77
(37 ) 63
103
Investments in unconsolidated affiliates (56 ) —
—
(56 )
All other, net 4
—
—
4
Net cash (used in) provided by investing activities (849 ) (73 ) 30
(892 )
Financing activities:
Long-term debt - borrowings 434
—
—
434
- repayments (1,312 ) —
—
(1,312 )
Related party debt - borrowings 2,215
—
—
2,215
- repayments (2,223 ) —
—
(2,223 )
Net proceeds from equity offerings 510
—
—
510
Issuance of redeemable preferred units 984
—
—
984
Distributions to preferred unitholders (9 ) —
—
(9 )
Distributions to unitholders and general partner (612 ) —
—
(612 )
Distributions to noncontrolling interests (3 ) —
—
(3 )
Contributions from noncontrolling interests 4
—
—
4
Consideration payment to Class B unitholders (25 ) —
—
(25 )
All other, net (2 ) —
—
(2 )
Contribution from MPC 225
—
—
225
Distributions to MPC from Predecessor (104 ) —
—
(104 )
Net cash provided by financing activities 82
—
—
82
Net increase in cash and cash equivalents 165
—
—
165
Cash and cash equivalents at beginning of period 43
—
—
43
Cash and cash equivalents at end of period $ 208
$ —
$ —
$ 208

~~Acquisition of Ozark Pipeline~~

On March 1, 2017, the Partnership acquired the Ozark pipeline from Enbridge Pipelines (Ozark) LLC for approximately $219 million, including purchase price adjustments made in the second quarter of 2017. Based on the final fair value estimates of assets acquired and liabilities assumed at the acquisition date, the purchase price was primarily allocated to property, plant and equipment. The Ozark pipeline is a 433-mile, 22-inch crude oil pipeline originating in Cushing, Oklahoma, and terminating in Wood River, Illinois, capable of transporting approximately 230 mbpd. The Partnership accounts for the Ozark pipeline within its L&S segment.

~~The amounts of revenue and income from operations associated with the acquisition included in the Consolidated Statements of Income, since the March 1, 2017 acquisition date, are as follows:~~

(In millions) Three Months Ended September 30, 2017 Seven Months Ended September 30, 2017
Revenues and other income $ 19
$ 45
Income from operations 6
17

~~Assuming the acquisition of the Ozark pipeline had occurred on January 1, 2016, the consolidated pro forma results would not have been materially different from reported results.~~

~~MarEn Bakken~~

On February 15, 2017, the Partnership closed on a joint venture, MarEn Bakken Company, LLC (“MarEn Bakken”), with Enbridge Energy Partners L.P. in which MPLX LP acquired a partial, indirect interest in the Dakota Access Pipeline and Energy Transfer Crude Oil Company Pipeline projects, collectively referred to as the Bakken Pipeline system, from Energy Transfer Partners, L.P. and Sunoco Logistics Partners, L.P. The Partnership contributed $500 million of the $2.0 billion purchase price paid by MarEn Bakken to acquire a 36.75 percent indirect interest in the Bakken Pipeline system. The Partnership holds, through a subsidiary, a 25 percent interest in MarEn Bakken, which equates to a 9.1875 percent indirect interest in the Bakken Pipeline system.

The Partnership accounts for its investment in MarEn Bakken as an equity method investment and bases the equity method accounting for this joint venture in arrears using the most recently available information. The Partnership’s investment balance at September 30, 2017 is approximately $520 million and reported under the caption ~~Equity method investments~~ on the Consolidated Balance Sheets. In connection with the Partnership’s acquisition of a partial, indirect equity interest in the Bakken Pipeline system, MPC agreed to waive its right to receive incentive distributions of $1.6 million per quarter for twelve consecutive quarters, beginning with distributions declared in the first quarter of 2017 and paid to MPC in the second quarter of 2017, which was prorated to $0.8 million from the acquisition date.

~~Acquisition of Hardin Street Marine LLC~~

On March 14, 2016, the Partnership entered into a Membership Interests Contribution Agreement (the “Contribution Agreement”) with MPLX GP, MPLX Logistics and MPC Investment, each a wholly-owned subsidiary of MPC, related to the acquisition of HSM, MPC’s inland marine business, from MPC. Pursuant to the Contribution Agreement, the transaction was valued at $600 million consisting of a fixed number of common units and general partner units of 22,534,002 and 459,878, respectively. The general partner units maintain MPC’s two percent GP Interest in the Partnership. The acquisition closed on March 31, 2016 and the fair value of the common units and general partner units issued was $669 million and $14 million, respectively, as recorded on the Consolidated Statements of Equity. MPC agreed to waive distributions in the first quarter of 2016 on common units issued in connection with this transaction. As a result of this waiver, MPC did not receive ~~general partner~~$23.7 million of the distributions ~~or IDRs~~ that would have otherwise accrued on such common units with respect to the first quarter ~~2016 distributions. The value~~ of ~~these waived distributions~~2018. Immediately following this transaction, the GP Interest was ~~$15 million.~~converted into a non-economic general partner interest.

~~The inland marine business, comprised~~MPLX recorded this transaction on a historical basis as required for transactions between entities under common control. No effect was given to the prior periods as these entities were not considered businesses prior to the February 1, 2018 dropdown. In connection with the dropdown, approximately $830 million of ~~18 tow boats~~net property, plant and ~~219 owned~~equipment was recorded in addition to $85 million and ~~leased barges as~~$130 million of goodwill allocated to MPLX Refining Logistics LLC (“Refining Logistics”) and MPLX Fuels Distribution LLC (“Fuels Distribution”), respectively. Both the ~~acquisition date, which transport light products, heavy oils, crude oil, renewable~~refining logistics assets and the fuels ~~chemicals and feedstocks in the Midwest and Gulf Coast regions of the United States,~~distribution services are accounted for ~~nearly 60 percent of~~within the ~~total volumes MPC shipped by inland marine vessels as of March 31, 2016. The Partnership accounts for HSM within its~~ L&S segment.

As of the transaction date, the Refining Logistics assets included 619 tanks with approximately 56 million barrels of storage capacity (crude, finished products and intermediates), 32 rail and truck racks, 18 docks, and gasoline blenders. These assets generate revenue through storage services agreements with MPC. Refining Logistics provides certain services to MPC related to the receipt, storage, throughput, custody and delivery of petroleum products in and through certain storage and logistical facilities and assets associated with MPC’s refineries.

Fuels Distribution, which is a wholly-owned subsidiary of MPLXT, generates revenue through a fuels distribution services agreement with MPC. Fuels Distribution is structured to provide a broad range of scheduling and marketing services as MPC’s agent.

1610

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4. Investments and Noncontrolling Interests

The following table presents MPLX’s equity method investments at the dates indicated:



	Ownership as of	Carrying value at
	March 31,	March 31,		December 31,
(In millions, except ownership percentages)	2019	2019		2018

Explorer Pipeline Company	25%	$	85	$	90
Illinois Extension Pipeline Company, L.L.C.	35%	280		275
LOCAP LLC	59%	27		27
LOOP LLC	41%	232		226
MarEn Bakken Bakken Company LLC	25%	492		498
Centrahoma Processing LLC	40%	158		160
MarkWest EMG Jefferson Dry Gas Gathering Company, L.L.C.	67%	247		236
MarkWest Utica EMG, L.L.C.	56%	2,017		2,039
Sherwood Midstream LLC	50%	455		366
Sherwood Midstream Holdings LLC	56%	163		157
Other		114		100
Total		$	4,270	$	4,174

Summarized financial information for ~~the Partnership’s~~MPLX’s equity method investments for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016~~2018 is as follows:


	Nine Months Ended September 30, 2017								Three Months Ended March 31, 2019
(In millions)	MarkWest Utica EMG		Other VIEs		Non-VIEs		Total		VIEs		Non-VIEs		Total
Revenues and other income	$	137	$	49	$	178	$	364	$	143	$	340	$	483
Costs and expenses	72		29		115		216		70		172		242
Income from operations	65		20		63		148		73		168		241
Net income	65		19		28		112		66		156		222
Income from equity method investments⁽¹⁾	6		7		16		29		$	24	$	46	$	70


	Nine Months Ended September 30, 2016										Three Months Ended March 31, 2018
(In millions)	MarkWest Utica EMG		Other VIEs⁽²⁾			Non-VIEs		Total			VIEs		Non-VIEs		Total
Revenues and other income	$	165	$	13		$	108	$	286		$	106	$	297	$	403
Costs and expenses	70		107			80		257			62		155		217
Income (loss) from operations	95		(94		)	28		29
Net income (loss)	94		(94		)	28		28
Income (loss) from equity method investments⁽¹⁾	10		(88		)	6		(72		)
Income from operations											44		142		186
Net income											44		129		173
Income from equity method investments⁽¹⁾											$	15	$	46	$	61


(1)	“Income ~~(loss)~~ from equity method ~~investments~~investments” includes the impact of any basis differential amortization or accretion.


~~(2)~~	Includes an impairment charge of $89 million for the nine months ended September 30, 2016 related to the Partnership’s investment in Ohio Condensate Company, L.L.C., which does not appear separately in this table.

Table of Contents

Summarized balance sheet information for ~~the Partnership’s~~MPLX’s equity method investments as of ~~September 30, 2017~~March 31, 2019 and December 31, ~~2016~~2018 is as follows:


	September 30, 2017								March 31, 2019
(In millions)	MarkWest Utica EMG⁽¹⁾		Other VIEs		Non-VIEs		Total		VIEs		Non-VIEs		Total
Current assets	$	72	$	47	$	379	$	498	$	162	$	327	$	489
Noncurrent assets	2,092		878		4,614		7,584		4,438		4,693		9,131
Current liabilities	37		55		492		584		129		221		350
Noncurrent liabilities	2		12		562		576		$	193	$	843	$	1,036


	December 31, 2016								December 31, 2018
(In millions)	MarkWest Utica EMG⁽¹⁾		Other VIEs		Non-VIEs		Total		VIEs		Non-VIEs		Total
Current assets	$	45	$	2	$	40	$	87	$	235	$	379	$	614
Noncurrent assets	2,173		132		390		2,695		3,535		4,715		8,250
Current liabilities	30		4		26		60		155		246		401
Noncurrent liabilities	2		13		—		15		$	189	$	841	$	1,030


~~(1)~~	MarkWest Utica EMG, L.L.C.’s (“MarkWest Utica EMG”) noncurrent assets include its investment in its subsidiary Ohio Gathering Company, L.L.C. (“Ohio Gathering”), which does not appear elsewhere in this table. The investment was $794 million as of September 30, 2017 and December 31, 2016.

As of ~~September 30, 2017~~March 31, 2019 and December 31, ~~2016,~~2018, the carrying value of ~~the Partnership’s~~MPLX’s equity method investments exceeded the underlying net assets of its investees by ~~$1.1 billion.~~$1.0 billion for the G&P segment. As of March 31, 2019 and December 31, 2018, the carrying value of MPLX’s equity method investments in the L&S segment exceeded the underlying net assets of its investees by $112 million and $114 million, respectively. This basis difference is being amortized ~~or accreted~~ into net income over the remaining estimated useful lives of the underlying ~~net~~ assets, except for $459 million and $39 million of excess related to ~~goodwill.~~

goodwill for the G&P and L&S segments, respectively.

MarkWest Utica EMG

Effective January 1, 2012, MarkWest Utica Operating Company, LLC (“Utica Operating”), a wholly-owned and consolidated subsidiary of MarkWest Energy Partners, L.P. (“MarkWest”), and EMG Utica, LLC (“EMG Utica” and together with Utica Operating, the “Members”) executed agreements to form a joint venture, MarkWest Utica EMG, to develop significant natural gas gathering, processing and NGL fractionation, transportation and marketing infrastructure in eastern Ohio. The related limited liability company agreement has been amended from time to time (the limited liability company agreement currently in effect is referred to as the “Amended LLC Agreement”). The aggregate funding commitment of EMG Utica was $950 million. Thereafter, Utica Operating was required to fund, as needed, 100 percent of future capital for L.L.C.’s (“MarkWest Utica EMG until the aggregate capital that had been contributed by the Members reached $2.0 billion, which occurred prior to the MarkWest Merger. Until such time as the investment balances of Utica Operating and EMG Utica are in the ratio of 70 percent and 30 percent, respectively (such time being referred to as the “Second Equalization Date”EMG”), EMG Utica will have the right, but not the obligation, to fund up to 10 percent of each capital call for MarkWest Utica EMG, and Utica Operating will be required to fund all remaining capital not elected to be funded by EMG Utica. After the Second Equalization Date, Utica Operating and EMG Utica will have the right, but not the obligation, to fund their pro rata portion (based on their respective investment balances) of any additional required capital and may also fund additional capital that the other party elects not to fund. As of September 30, 2017, EMG Utica has contributed approximately $1.2 billion and Utica Operating has contributed approximately $1.5 billion to MarkWest Utica EMG.

Under the Amended LLC Agreement, prior to December 31, 2016, EMG Utica’s investment balance was increased by a quarterly special non-cash allocation of income (“Preference Amount”), calculated based upon the amount of capital contributed by EMG Utica in excess of $500 million. After December 31, 2016, no Preference Amount will accrue to EMG Utica’s investment balance. EMG Utica received a Preference Amount totaling approximately $4 million and $12 million for the three and nine months ended September 30, 2016, respectively.

Under the Amended LLC Agreement, after December 31, 2016, cash generated by MarkWest Utica EMG that is available for distribution will be allocated to the Members in proportion to their respective investment balances. As of September 30, 2017, Utica Operating’s investment balance in MarkWest Utica EMG was approximately 56 percent.

~~MarkWest Utica EMG~~ is deemed to be a VIE. ~~Utica Operating is not~~Neither MPLX nor any of its subsidiaries are deemed to be the primary beneficiary due to EMG ~~Utica’s~~Utica, LLC’s voting rights on significant matters. ~~The Partnership’s investment in MarkWest Utica EMG’s, which was $2.2 billion at September 30, 2017 and December 31, 2016, is reported under the caption~~ ~~Equity method investments~~ ~~on the Consolidated Balance Sheets. The Partnership’s~~MPLX’s maximum exposure to loss as a result of its involvement with MarkWest Utica EMG includes its equity investment, any additional capital contribution commitments and any operating expenses incurred by the subsidiary operator in excess of its compensation received for the performance of the operating services. MarkWest Utica EMG holds an investment in its subsidiary, Ohio Gathering Company, L.L.C. (“Ohio Gathering”), which does not appear elsewhere in the tables above. The ~~Partnership~~investment was $766 million and $750 million as of March 31, 2019 and December 31, 2018, respectively. MPLX did not provide any financial support to MarkWest Utica EMG that it was not contractually obligated to provide during the three ~~and nine~~ months ended September 30, 2017 and 2016, respectively. The Partnership receives management fee revenue for engineering and construction and administrative services for operating MarkWest Utica EMG, and is also reimbursed for personnel services (“Operational Service revenue”). Operational Service revenue is reported as ~~Other income-related parties~~ in the Consolidated Statements of Income. The amount of Operational Service revenue related to MarkWest Utica EMG for the three and nine months ended September 30, 2017, totaled $5 million and $13 million, respectively. The amount of Operational Service revenue related to MarkWest Utica EMG for the three and nine months ended September 30, 2016, totaled approximately $5 million and $12 million, respectively.March 31, 2019.

Ohio Gathering

Ohio Gathering is a subsidiary of MarkWest Utica EMG and is engaged in providing natural gas gathering services in the Utica Shale in eastern Ohio. Ohio Gathering is a joint venture between MarkWest Utica EMG and Summit Midstream Partners, LLC. As of ~~September 30, 2017, the Partnership~~March 31, 2019, MPLX has an approximate 34 percent indirect ownership interest in Ohio Gathering. As Ohio Gathering is a subsidiary of MarkWest Utica EMG, which is accounted for as an equity method investment, ~~the Partnership~~MPLX reports its portion of Ohio Gathering’s net assets as a component of its investment in MarkWest Utica EMG. ~~The Partnership receives Operational Service revenue for operating Ohio Gathering which is reported as~~ ~~Other income-related parties~~ in the Consolidated Statements of Income. The amount of Operational Service revenue related to Ohio Gathering for the three and nine months ended September 30, 2017, totaled $4 million and $12 million, respectively. The amount of Operational Service revenue related to Ohio Gathering for the three and nine months ended September 30, 2016, totaled approximately $5 million and $12 million, respectively.

Sherwood Midstream

Effective January 1, 2017, MarkWest Liberty Midstream & Resources, L.L.C. (“MarkWest Liberty Midstream”), a wholly-owned and consolidated subsidiary of MarkWest, and Antero Midstream Partners, LP (“Antero Midstream”) formed a joint venture, Sherwood Midstream LLC (“Sherwood Midstream”), is deemed to ~~support~~be a VIE. Neither MPLX nor any of its subsidiaries are deemed to be the primary beneficiary of Sherwood Midstream due to Antero ~~Resources Corporation’s development~~Midstream Partners, LP’s voting rights on significant matters. MPLX’s maximum exposure to loss as a result of its involvement with Sherwood Midstream includes its equity investment, any additional capital contribution commitments and any operating expenses incurred by the subsidiary operator in excess of its compensation received for the ~~Marcellus Shale. MarkWest Liberty Midstream has a 50 percent ownership interest in Sherwood Midstream. Pursuant to the terms~~performance of the ~~related limited liability company agreement (the “LLC Agreement”), MarkWest Liberty~~operating services. MPLX did not provide any financial support to Sherwood Midstream contributed assets then under construction with a fair value of approximately $134 million and cash of approximately $20 million. Antero Midstream made an initial capital contribution of approximately $154 million.that it was not contractually obligated to provide during the three months ended March 31, 2019.

~~Also effective January 1, 2017, MarkWest Liberty~~

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Sherwood Midstream ~~converted all of its ownership interests~~also has an investment in MarkWest Ohio Fractionation Company, L.L.C. (“Ohio Fractionation”), which is a ~~previously wholly-owned subsidiary, to Class A Interests and amended its LLC Agreement to create Class B-3 Interests, which were sold to~~VIE, that it accounts for as an equity method investment as Sherwood Midstream ~~for $126 million in cash. The Class B-3 Interests provide~~does not control Ohio Fractionation. During the three months ended March 31, 2019, Sherwood Midstream ~~with~~acquired the right to fractionation revenue and the obligation to pay expenses related to 20 mbpd of capacity in the Hopedale ~~3 fractionator. Sherwood Midstream accounts for its investment in Ohio Fractionation, which~~4 fractionator; this transaction is ~~a VIE,~~shown as ~~an equity method investment as Sherwood Midstream does not control Ohio Fractionation.~~“Contributions from noncontrolling interests” on the Consolidated Statements of Cash Flows. MarkWest Liberty Midstream & Resources, L.L.C (“MarkWest Liberty Midstream”), a wholly-owned and consolidated subsidiary, has been deemed to be the primary beneficiary of Ohio Fractionation because it has control over the decisions that could significantly impact its financial performance, and as a result, consolidates Ohio Fractionation. The carrying amounts of assets and liabilities included in the Partnership’s Consolidated Balance Sheets pertaining to Ohio Fractionation at September 30, 2017, were current assets of $51 million, non-current assets of $406 million and current liabilities of $26 million. The creditors of Ohio Fractionation do not have recourse to MPLX LP’s general credit through guarantees or other financial arrangements. The assets of Ohio Fractionation are the property of Ohio Fractionation and cannot be used to satisfy the obligations of MPLX LP. Sherwood Midstream’s interests are reflected in ~~Net~~“Net income attributable to noncontrolling ~~interests~~ ininterests” on the Consolidated Statements of Income and ~~Noncontrolling interests~~ ~~in the Consolidated Balance Sheets.~~

~~Under the LLC Agreement, cash generated by Sherwood Midstream that is available for distribution will be allocated to the members in proportion to their respective investment balances.~~

Sherwood Midstream is deemed to be a VIE. MarkWest Liberty Midstream is not deemed to be the primary beneficiary, due to Antero Midstream’s voting rights on significant matters. The Partnership’s investment in Sherwood Midstream, which was approximately $220 million at September 30, 2017, is reported under the caption ~~Equity method investments~~“Noncontrolling interests” on the Consolidated Balance Sheets. The Partnership’s maximum exposure to loss as a result of its involvement with Sherwood Midstream includes its equity investment, any additional capital contribution commitments and any operating expenses incurred by the subsidiary operator in excess of its compensation received for the performance of the operating services. The Partnership did not provide any financial support to Sherwood Midstream that it was not contractually obligated to provide during the nine months ended September 30, 2017. The Partnership receives Operational Service revenue for operating Sherwood Midstream. The amount of Operational Service revenue related to Sherwood Midstream for the three and nine months ended September 30, 2017, totaled approximately $2 million and $6 million, respectively, and is reported as ~~Other income-related parties~~ ~~in the Consolidated Statements of Income.~~

Sherwood Midstream Holdings

~~Effective January 1, 2017, MarkWest Liberty Midstream and Sherwood Midstream formed a joint venture,~~MPLX accounts for Sherwood Midstream Holdings LLC (“Sherwood Midstream Holdings”), for the purpose of owning, operating and maintaining all of the shared assets that support the operations of the gas plants and other assets owned by Sherwood Midstream and the gas plants and deethanization facilities owned by MarkWest Liberty Midstream. MarkWest Liberty Midstream initially contributed certain real property, equipment and facilities with a fair value of approximately $209 million to Sherwood Midstream Holdings in exchange for a 79 percent initial ownership interest. Sherwood Midstream contributed cash of approximately $44 million to Sherwood Midstream Holdings in exchange for a 21 percent ownership interest. During the second quarter ended June 30, 2017, true-ups to the initial contributions were finalized. MarkWest Liberty Midstream contributed certain additional real property, equipment and facilities with a fair value of approximately $10 million to Sherwood Midstream Holdings and Sherwood Midstream contributed cash of approximately $4 million to Sherwood Midstream Holdings. Collectively, the real property, equipment, facilities and cash initially contributed, or that may be subsequently constructed by or contributed, to Sherwood Midstream Holdings are referred to as the “Shared Assets.” The net book value of the contributed assets was approximately $203 million. The contribution was determined to be an in-substance sale of real estate. As such, the Partnership only recognized a gain for the portion attributable to Antero Midstream’s indirect interest of approximately $2 million, included in ~~Gain on sale of assets~~ in the Consolidated Statements of Income. MarkWest Liberty Midstream’s portion of the gain attributable to its direct and indirect interests of approximately $14 million is included in its investment in Sherwood

~~Midstream Holdings and is reported under the caption~~ ~~Equity method investments~~ ~~on the Consolidated Balance Sheets. In connection with the initial contributions, MarkWest Liberty Midstream received a special distribution of approximately $45 million.~~

MarkWest Liberty Midstream’s and Sherwood Midstream’s ownership interests in Sherwood Midstream Holdings will fluctuate over time. As new Shared Assets are constructed, the members will make additional capital contributions to Sherwood Midstream Holdings. The amount that each member must contribute will be based on the expected utilization of the Shared Assets, as defined in the LLC Agreement. Pursuant to the terms of the LLC Agreement, MarkWest Liberty Midstream will serve as the operator for Sherwood Midstream Holdings.

~~The Partnership accounts for Sherwood Midstream Holdings,~~ which is a VIE, as an equity method investment as Sherwood Midstream is considered to be the general partner and controls all decisions. ~~The Partnership’s investment~~During the three months ended March 31, 2018, MarkWest Liberty Midstream sold to Sherwood Midstream six percent of its equity ownership in Sherwood Midstream Holdings ~~which was approximately $163 million at September 30, 2017, is reported under the caption~~ ~~Equity method investments~~ ~~on the Consolidated Balance Sheets. The Partnership’s~~for $15 million. MPLX’s maximum exposure to loss as a result of its involvement with Sherwood Midstream Holdings includes its equity investment, any additional capital contribution commitments and any operating expenses incurred by the subsidiary operator in excess of its compensation received for the performance of the operating services. ~~The Partnership~~MPLX did not provide any financial support to Sherwood Midstream Holdings that it was not contractually obligated to provide during the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2019.

Sherwood Midstream has been deemed the primary beneficiary of Sherwood Midstream Holdings due to its controlling financial interest through its authority to manage the joint venture. As a result, Sherwood Midstream consolidates Sherwood Midstream Holdings. Therefore, ~~the Partnership~~MPLX also reports its portion of Sherwood Midstream Holdings’ net assets as a component of its investment in Sherwood Midstream. As of ~~September 30, 2017, the Partnership~~March 31, 2019, MPLX has a ~~14.7~~21.8 percent indirect ownership interest in Sherwood Midstream Holdings through Sherwood Midstream.

5. Related Party Agreements and Transactions

~~The Partnership’s~~MPLX’s material related parties ~~include:~~are:

MPC, which refines, markets and transports crude oil and petroleum ~~products, primarily in the Midwest, Gulf Coast, East Coast and Southeast regions of the United States.~~

~~Centennial Pipeline LLC (“Centennial”), in which MPC has a 50 percent interest as of September 30, 2017. Centennial owns a products pipeline and storage facility.~~

~~Muskegon Pipeline LLC (“Muskegon”), in which MPC has a 60 percent interest as of September 30, 2017. Muskegon owns a common carrier products pipeline.~~products.

MarkWest Utica EMG, in which MPLX LP has a 56 percent interest as of ~~September 30, 2017.~~March 31, 2019. MarkWest Utica EMG is engaged in natural gas processing and NGL fractionation, transportation and marketing in Ohio.

Ohio Gathering, in which MPLX LP has a 34 percent indirect interest as of ~~September 30, 2017.~~March 31, 2019. Ohio Gathering is a subsidiary of MarkWest Utica EMG providing natural gas gathering service in the Utica Shale region of eastern Ohio.

Sherwood Midstream, in which MPLX LP has a 50 percent interest as of ~~September 30, 2017.~~March 31, 2019. Sherwood Midstream supports the development of Antero Resources Corporation’s Marcellus Shale acreage in the rich-gas corridor of West Virginia.

Sherwood Midstream Holdings, in which MPLX LP has ~~an 86~~a 78 percent total direct and indirect interest as of ~~September 30, 2017.~~March 31, 2019. Sherwood Midstream Holdings owns certain infrastructure at the Sherwood Complex that is shared by and supports the operation of both the Sherwood Midstream and MarkWest gas processing plants and ~~deethanization~~de-ethanization facilities.

~~Illinois Extension,~~MarkWest EMG Jefferson Dry Gas Gathering Company, L.L.C. (“Jefferson Dry Gas”), in which MPLX LP has a 3567 percent interest as of ~~September 30, 2017. Illinois Extension operates~~March 31, 2019. Jefferson Dry Gas provides natural dry gas gathering and related services in the ~~SAX crude oil pipeline from Flanagan, Illinois to Patoka, Illinois, as well as additional tankage and two pump stations.~~

LOOP, in which MPLX LP has a 40.7 percent interest as of September 30, 2017. LOOP owns and operates midstream crude oil infrastructure, including a deep water oil port offshore of Louisiana, pipelines, and onshore storage facilities, and manages operations of LOCAP, an affiliate pipeline system.

LOCAP, in which MPLX LP has a 58.52 percent interest as of September 30, 2017. LOCAP owns and operates a crude oil pipeline and tank facility in St. James, Louisiana, that distributes oil received from LOOP’s storage facilities and other connecting pipelines to nearby refineries and into the midcontinentUtica Shale region of ~~the United States.~~

Explorer, in which MPLX LP has a 24.51 percent interest as of September 30, 2017. Explorer owns and operates a common carrier pipeline that primarily transports gasoline, diesel, diluent and jet fuel from the Gulf Coast refining complex to the Midwestern United States.Ohio.

Related Party Agreements

~~The Partnership~~MPLX has various long-term, fee-based commercial agreements with MPC. Under these agreements, ~~the Partnership~~MPLX provides transportation, terminal, fuels distribution, marketing, storage, management, operational and ~~storage~~other services to ~~MPC, and~~MPC. MPC has committed to provide ~~the Partnership~~MPLX with minimum ~~quarterly~~ throughput volumes on crude oil and refined products ~~systems~~systems; fees for storage capacity; a fixed fee for substantially all available capacity for boats and ~~minimum storage volumes of crude oil, refined products and butane.~~barges under the marine transportation services

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agreement; operating and management fees; as well as reimbursements for certain direct and indirect costs. In addition, ~~the Partnership~~MPLX has obligations to MPC for services provided to MPLX by MPC under omnibus and employee services agreements as well as other various agreements.

MPLX is also party to a loan agreement with MPC Investment ~~a wholly-owned subsidiary of MPC.~~LLC (“MPC Investment”) (the “MPC Loan Agreement”). Under the terms of the ~~agreement,~~MPC Loan Agreement, MPC Investment ~~will make~~makes a loan or loans to ~~the Partnership~~MPLX on a revolving basis as requested by ~~the Partnership~~MPLX and as agreed to by MPC Investment. On April 27, 2018, MPLX and MPC Investment inentered into an ~~amount or amounts that do not result~~amendment to the MPC Loan Agreement to increase the borrowing capacity under the MPC Loan Agreement from $500 million to $1 billion in ~~the~~ aggregate principal amount of all loans outstanding ~~exceeding $500 million~~ at any one time. The entire unpaid principal amount of the loan, together with all accrued and unpaid interest and other amounts (if any), shall become due and payable on December 4, 2020. MPC Investment may demand payment of all or any portion of the outstanding principal amount of the loan, together with all accrued and unpaid interest and other amounts (if any), at any time prior to December 4, 2020. Borrowings under the loan will bear interest at LIBOR plus 1.50 percent. ~~During~~Activity on the ~~nine months ended September 30, 2017, the Partnership borrowed $829 million and repaid $627 million, resulting~~MPC Loan Agreement was as follows:



(In millions)	Three Months Ended March 31, 2019			Year Ended December 31, 2018
Borrowings	$	851		$	3,962
Average interest rate of borrowings	3.988		%	3.473		%
Repayments	$	851		$	4,347
Outstanding balance at end of period⁽¹⁾	$	—		$	—

(1) Included in ~~$202 million outstanding balance at September 30, 2017, which is included in~~ ~~Payables-related parties~~“Current liabilities - related parties” on the Consolidated Balance Sheets. Borrowings were at an average interest rate of 2.721 percent, per annum, for the nine months ended September 30, 2017. During the year ended December 31, 2016, the Partnership borrowed $2.5 billion and repaid $2.5 billion, resulting in no outstanding balance at December 31, 2016. Borrowings were at an average interest rate of 1.939 percent, per annum, for the year ended December 31, 2016. For additional information regarding the Partnership’s commercial and other agreements with MPC, see Item 1. Business in the Annual Report on Form 10-K for the year ended December 31, 2016.

~~The Partnership believes the terms and conditions under its agreements with MPC are generally comparable to those with unrelated parties.~~Related Party Revenue

~~HST, WHC and MPLXT Agreements~~

As discussed in Note 3, the Partnership acquired HST, WHC and MPLXT on March 1, 2017. HST, WHC and MPLXT have various operating, transportation services, terminal services, storage services and employee services agreements withRelated party sales to MPC ~~which were assumed by the Partnership with the closing of the Transaction.~~

~~HST is a party to a transportation services agreement with MPC dated January 1, 2015. Under this agreement, HST provides pipeline transportation~~consist of crude oil and refined products ~~as well as related services, for MPC. MPC pays HST for such~~pipeline transportation services based on ~~contractual rates related to MPC crude oil~~tariff rates; storage, terminal and refined product deliveries as well as any viscosity surcharges, loading, handling, transfers or other related charges. This agreement is set to expire on December 31, 2026 and automatically renews for two additional renewal terms of four years each unless terminated by either party.

On January 1, 2015, HST entered into various three-year term storage services agreements with MPC. Under the storage services agreements, HST receives a monthly fee from MPC based on a contractual rate per barrel multiplied by the total commitment volume respective to each storage tank. The contractual rate per barrel is subject to an annual review and adjustment for inflation. HST is not obligated to measure volume gains and losses per the terms of these agreements.

On January 1, 2015, WHC entered into a long-term, fee-based storage and services agreement with MPC related to storage at its butane and propane caverns with an initial term of 10 years. Under this storage and services agreement, WHC receives a monthly fee from MPC based on a contractual rate per barrel multiplied by the total commitment volume respective to each storage cavern. The contractual rate per barrel includes utilization of the caverns and related services. The agreement is subject to an annual review and adjustment for inflation.

Under the storage services agreements with both HST and WHC, the Partnership is obligated to make available to MPC, on a firm basis, the available storage capacity at the tank farms and butane and propane caverns and MPC pays the Partnership a per-barrel fee for such storage capacity regardless of whether MPC fully utilizes the available capacity.

MPLXT is a party to a terminal services agreement with MPC, dated March 1, 2017. Under this agreement, MPLXT provides terminal storage for refined petroleum products, as well as related services, for MPC. MPC pays MPLXT monthly for suchfuels distribution services based on ~~contractual fees relating~~contracted rates; and marine transportation services. Related party sales to MPC ~~product deliveries as well as any viscosity surcharges, loading, handling, transfers or other~~also consist of revenue related ~~charges. This agreement is set~~ to ~~expire on March 31, 2026 and automatically renews for two additional renewal terms of five years each unless terminated by either party.~~volume deficiency credits.

~~The Partnership is party to various employee services~~MPLX also has operating agreements with MPC under which ~~the Partnership reimburses MPC~~it receives a fee for ~~employee benefit expenses, along with the provision of operational~~operating MPC’s retained pipeline assets and a fixed annual fee for providing oversight and management services ~~including those in support~~required to run the marine business. MPLX also receives management fee revenue for engineering, construction and administrative services for operating certain of ~~HST, WHC and MPLXT.~~its equity method investments.

~~Related Party Transactions~~

~~Sales to~~Revenue received from related parties ~~were~~included on the Consolidated Statements of Income was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(In millions)	2017		2016		2017		2016		2019		2018
Service revenues
Service revenues - related parties
MPC	$	276	$	253	$	801	$	676	$	578	$	471
Rental income
Rental income - related parties
MPC	$	70	$	68	$	207	$	172	193		145
Product sales⁽¹⁾
Product sales - related parties⁽¹⁾
MPC	$	2	$	2	$	6	$	8	11		4
Other income - related parties
MPC									10		10
MarkWest Utica EMG									4		4
Ohio Gathering									4		4
Sherwood Midstream									4		3
Jefferson Dry Gas									2		1
Other									2		1
Total Other income - related parties									$	26	$	23

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(1)

There were additional product sales to MPC that net to zero within the consolidated financial statements as the transactions are recorded net due to the terms of the agreements under which such product was sold. For the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2019 and March 31, 2018, these sales totaled ~~$63~~$86 million and ~~$173 million, respectively. For the three and nine months ended September 30, 2016, these sales totaled $13 million and $25~~$79 million, respectively.

Related ~~party~~Party Expenses

MPC provides executive management services and certain general and administrative services to MPLX under the terms of an omnibus agreement (“Omnibus charges”). Omnibus charges included in “Rental cost of sales - related parties” primarily relate to services that support MPLX’s rental operations and maintenance of assets available for rent. Omnibus charges included in “Purchases - related parties” primarily relate to services that support MPLX’s operations and maintenance activities, as well as compensation expenses. Omnibus charges included in “General and administrative expenses” primarily relate to services that support MPLX’s executive management, accounting and human resources activities. MPLX LP also obtains employee services from MPC under employee services agreements (“ESA charges”). ESA charges for personnel directly involved in or supporting operations and maintenance activities related to rental services are classified as “Rental cost of sales - related parties.” ESA charges for personnel directly involved in or supporting operations and maintenance activities related to other services are classified as “Purchases - related parties.” ESA charges for personnel involved in executive management, accounting and human resources activities are classified as “General and administrative expenses.” In addition to these agreements, MPLX purchases products from MPC, makes payments to MPC ~~consist~~in its capacity as general contractor to MPLX, and has certain rent and lease agreements with MPC.

Expenses incurred from MPC under the omnibus and employee services agreements as well as other purchases from MPC included on the Consolidated Statements of ~~crude oil~~Income are as follows:



	Three Months Ended March 31,
(In millions)	2019		2018
Rental cost of sales - related parties	$	3	$	1
Purchases - related parties	212		177
General and administrative expenses	50		39
Total	$	265	$	217

Some charges incurred under the omnibus and ~~refined products pipeline transportation~~ESA agreements are related to engineering services ~~based~~and are associated with assets under construction. These charges are added to “Property, plant and equipment, net” on ~~regulated tariff rates, storage services based~~the Consolidated Balance Sheets. For the three months ended March 31, 2019 and March 31, 2018, these charges totaled $41 million and $22 million, respectively.

Related Party Assets and Liabilities

Assets and liabilities with related parties appearing on ~~contracted rates~~the Consolidated Balance Sheets are detailed in the table below. This table identifies the various components of related party assets and ~~transportation services provided by HSM.~~liabilities, including those associated with leases (see Note 19 for additional information) and deferred revenue on minimum volume commitments. During the three months ended March 31, 2019 and the year ended December 31, 2018, MPC did not ship its minimum committed volumes on certain pipelines. Under ~~the Partnership’s~~MPLX’s pipeline transportation services agreements, if MPC fails to transport its minimum throughput volumes during any quarter, then MPC will pay ~~the Partnership~~MPLX a deficiency payment equal to the volume of the deficiency multiplied by the tariff rate then in effect. The deficiency amounts are recorded as ~~Deferred revenue-related parties~~.“Current liabilities - related parties.” MPC may then apply the amount of any such deficiency payments as a credit for volumes transported on the applicable pipeline ~~system~~ in excess of its minimum volume commitment ~~during the following four or eight quarters~~in future periods under the terms of the applicable transportation services agreement. ~~The Partnership~~MPLX recognizes related party revenues for the deficiency payments when credits are used for volumes transported in excess of minimum quarterly volume commitments, when it becomes impossible to physically transport volumes necessary to utilize the credits or upon the expiration of the credits. The use or expiration of the credits is a decrease in ~~Deferred revenue-related parties~~.

~~The revenue received from~~“Current liabilities - related ~~parties, included in~~ ~~Other income-related parties~~ ~~on the Consolidated Statements of Income, was as follows:~~

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
MPC $ 9
$ 10
$ 30
$ 36
MarkWest Utica EMG 5
5
13
12
Ohio Gathering 4
5
12
12
Other 4
2
14
7
Total $ 22
$ 22
$ 69
$ 67

MPC provides executive management services and certain general and administrative services to the Partnership under the terms of an omnibus agreement. Expenses incurred under this agreement are shown in the table below by the income statement line where they were recorded. Charges for services included in ~~Purchases-related parties~~ ~~primarily relate to services that support the Partnership’s operations and maintenance activities, as well as compensation expenses. Charges for services included in~~ ~~General and administrative expenses~~ ~~primarily relate to services that support the Partnership’s executive management, accounting and human resources activities. These charges were as follows:~~

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
Purchases - related parties $ 17
$ 11
$ 50
$ 29
General and administrative expenses 9
11
28
33
Total $ 26
$ 22
$ 78
$ 62

~~Also under terms of the omnibus agreement, some service costs related to engineering services are associated with assets under construction. These costs added to~~ ~~Property, plant and equipment~~ ~~were as follows:~~

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
MPC $ 11
$ 14
$ 33
$ 36

MPLX LP obtains employee services from MPC under employee services agreements. Expenses incurred under these agreements are shown in the table below by the income statement line where they were recorded. The costs of personnel directly involved in or supporting operations and maintenance activities are classified as ~~Purchases-related parties. The costs of personnel involved in executive management, accounting and human resources activities are classified as~~ ~~General and administrative~~ ~~expenses in the Consolidated Statements of Income.~~

~~Employee services expenses from related parties were as follows:~~

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
Purchases - related parties $ 97
$ 98
$ 280
$ 257
General and administrative expenses 25
27
74
75
Total $ 122
$ 125
$ 354
$ 332

~~Receivables from related parties, which for December 31, 2016 included reimbursements from the MarkWest Merger to be provided by MPC for the conversion of Class B units, were as follows:~~

(In millions) September 30, 2017 December 31, 2016
MPC $ 144
$ 242
MarkWest Utica EMG 2
2
Ohio Gathering 2
2
Other 4
1
Total $ 152
$ 247

~~Long-term receivables with related parties, which includes straight-line rental income, were as follows:~~

(In millions) September 30, 2017 December 31, 2016
MPC $ 18
$ 11

~~Payables to related parties were as follows:~~

(In millions) September 30, 2017 December 31, 2016
MPC⁽¹⁾
$ 277
$ 63
MarkWest Utica EMG 30
24
Other 10
—
Total $ 317
$ 87


~~(1)~~	~~Balance includes approximately $202 million related to the loan with MPC Investment as discussed above.~~

~~During the nine months ended September 30, 2017 and the year ended December 31, 2016, MPC did not ship its minimum committed volumes on certain pipeline systems.~~parties.” In addition, capital projects ~~the Partnership~~MPLX is undertaking at the request of MPC are reimbursed in cash and recognized in income over the remaining term of the applicable agreements. ~~The~~ ~~Deferred revenue-related parties~~ ~~balance associated with the minimum volume deficiencies and project reimbursements were as follows:~~

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(In millions)	September 30, 2017		December 31, 2016		March 31, 2019		December 31, 2018
Minimum volume deficiencies - MPC	$	55	$	48
Project reimbursements - MPC	27		9
Current assets - related parties
Receivables - MPC					$	372	$	281
Receivables - Other					7		8
Prepaid - MPC					7		1
Total	$	82	$	57	386		290
Noncurrent assets - related parties
Long-term receivables - MPC					24		24
Right of use assets - MPC					232		—
Total					256		24
Current liabilities - related parties
Payables - MPC					119		131
Payables - MarkWest Utica EMG					16		51
Payables - Sherwood Midstream					18		16
Payables - Other					5		5
Operating lease liabilities - MPC					1		—
Deferred revenue - Minimum volume deficiencies - MPC					38		44
Deferred revenue - Project reimbursements - MPC					7		7
Total					204		254
Long-term liabilities - related parties
Long-term operating lease liabilities - MPC					231		—
Long-term deferred revenue - Project reimbursements - MPC					42		43
Total					$	273	$	43

Other Related Party Transactions

From time to time, MPLX may also sell to or purchase from related parties, assets and inventory at the lesser of average unit cost or net realizable value. Sales to and purchases from related parties for the three months ended March 31, 2019 and 2018 were less than $1 million, respectively.

6. Net ~~Income~~ Income/(Loss) Per Limited Partner Unit

Net ~~income~~ income/(loss) per unit applicable to common limited partner units is computed by dividing ~~the respective limited partners’ interest in~~ net ~~income~~ income/(loss) attributable to MPLX LP less income/(loss) allocated to participating securities by the weighted average number of common units outstanding. ~~Because the Partnership has more than one class of participating securities, it uses the two-class method when calculating the net income (loss) per unit applicable to limited partners.~~ The classes of participating securities include common units, ~~general partner units, Preferred units,~~ certain equity-based compensation awards and ~~IDRs.~~

As discussed in Note 1, the HST, WHC and MPLXT acquisition was a transfer between entities under common control. As entities under common control with MPC, prior periods were retrospectively adjusted to furnish comparative information. Accordingly, the prior period earnings have been allocated to the general partner and do not affect the net income (loss) per unit calculation. The earnings for the entities acquired under common control will be included in the net income (loss) per unit calculation prospectively as described above.Series A Convertible preferred units.

For the three months ended ~~September 30, 2017, the Partnership~~March 31, 2019 and 2018, MPLX had dilutive potential common units consisting of certain equity-based compensation awards. For the three months ended September 30, 2016 and the nine months ended September 30, 2017 and 2016, the Partnership had dilutive potential common units consisting of certain equity-based compensation awards and Class B units. Potential common units omitted from the diluted earnings per unit calculation for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2019 and 2018 were less than ~~one million and for the three and nine months ended September 30, 2016 were less than one million and approximately eight million, respectively.~~1 million.


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
(In millions)	2017			2016			2017			2016			2019			2018
Net income attributable to MPLX LP	$	216		$	141		$	556		$	100		$	503		$	421
Less: Limited partners’ distributions declared on Preferred units⁽¹⁾	16			16			49			25
General partner’s distributions declared (including IDRs)⁽¹⁾	88			54			229			148
Limited partners’ distributions declared on common units⁽¹⁾	232			179			648			507
Less: Limited partners’ distributions declared on preferred units⁽¹⁾													20			16
Limited partners’ distributions declared on common units (including common units of general partner)⁽¹⁾													523			467
Undistributed net loss attributable to MPLX LP	$	(120	)	$	(108	)	$	(370	)	$	(580	)	$	(40	)	$	(62	)


(1)	See Note 7 for distribution information.

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Three Months Ended September 30, 2017
(In millions, except per unit data)
General
Partner

Limited
Partners’
Common
Units
Redeemable Preferred Units Total
Basic and diluted net income attributable to MPLX LP per unit:
Net income attributable to MPLX LP:
Distributions declared (including IDRs) $ 88
$ 232
$ 16
$ 336
Undistributed net loss attributable to MPLX LP (2 ) (118 ) —
(120 )
Net income attributable to MPLX LP⁽¹⁾
$ 86
$ 114
$ 16
$ 216
Weighted average units outstanding:
Basic 8
394
31
433
Diluted 8
395
31
434
Net income attributable to MPLX LP per limited partner unit:
Basic $ 0.29

Diluted $ 0.29

Three Months Ended September 30, 2016
(In millions, except per unit data)
General
Partner

Limited
Partners’
Common
Units
Redeemable Preferred Units Total
Basic and diluted net income attributable to MPLX LP per unit:
Net income attributable to MPLX LP:
Distributions declared (including IDRs) $ 54
$ 179
$ 16
$ 249
Undistributed net loss attributable to MPLX LP (3 ) (105 ) —
(108 )
Net income attributable to MPLX LP⁽¹⁾
$ 51
$ 74
$ 16
$ 141
Weighted average units outstanding:
Basic 7
341
31
379
Diluted 7
346
31
384
Net income attributable to MPLX LP per limited partner unit:
Basic $ 0.22

Diluted $ 0.21



	Three Months Ended March 31, 2019
(In millions, except per unit data)	Limited Partners’ Common Units			Redeemable Preferred Units		Total
Basic and diluted net income attributable to MPLX LP per unit
Net income attributable to MPLX LP:
Distributions declared	$	523		$	20	$	543
Undistributed net loss attributable to MPLX LP	(40		)	—		(40		)
Net income attributable to MPLX LP⁽¹⁾	$	483		$	20	$	503
Weighted average units outstanding:
Basic	794			31		825
Diluted	795			31		826
Net income attributable to MPLX LP per limited partner unit:
Basic	$	0.61
Diluted	$	0.61

Nine Months Ended September 30, 2017
(In millions, except per unit data)
General
Partner

Limited
Partners’
Common
Units
Redeemable Preferred Units Total
Basic and diluted net income attributable to MPLX LP per unit:
Net income attributable to MPLX LP:
Distributions declared (including IDRs) $ 229
$ 648
$ 49
$ 926
Undistributed net loss attributable to MPLX LP (7 ) (363 ) —
(370 )
Net income attributable to MPLX LP⁽¹⁾
$ 222
$ 285
$ 49
$ 556
Weighted average units outstanding:
Basic 8
378
31
417
Diluted 8
381
31
420
Net income attributable to MPLX LP per limited partner unit:
Basic $ 0.75

Diluted $ 0.75


	Nine Months Ended September 30, 2016											Three Months Ended March 31, 2018
(In millions, except per unit data)	General Partner			Limited Partners’ Common Units			Redeemable Preferred Units		Total			Limited Partners’ Common Units			Redeemable Preferred Units		Total
Basic and diluted net loss attributable to MPLX LP per unit:
Net income (loss) attributable to MPLX LP:
Basic and diluted net income attributable to MPLX LP per unit
Net income attributable to MPLX LP:
Distributions declared (including IDRs)	$	148		$	507		$	25	$	680		$	467		$	16	$	483
Undistributed net loss attributable to MPLX LP	(12		)	(568		)	—		(580		)	(62		)	—		(62		)
Net income (loss) attributable to MPLX LP⁽¹⁾	$	136		$	(61	)	$	25	$	100
Net income attributable to MPLX LP⁽¹⁾												$	405		$	16	$	421
Weighted average units outstanding:
Basic	7			324			16		347			661			31		692
Diluted	7			324			16		347			661			31		692
Net loss attributable to MPLX LP per limited partner unit:
Net income attributable to MPLX LP per limited partner unit:
Basic				$	(0.19	)						$	0.61
Diluted				$	(0.19	)						$	0.61


(1)	Allocation of net income ~~(loss)~~ attributable to MPLX LP assumes all earnings for the period had been distributed based on the current period distribution priorities.

7. Equity

The changes in the number of common units outstanding during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 are summarized below:

(In units) Common Class B General Partner Total
Balance at December 31, 2016 357,193,288
3,990,878
7,371,105
368,555,271
Unit-based compensation awards⁽¹⁾
183,509
—
3,745
187,254
Issuance of units under the ATM Program⁽²⁾
13,846,998
—
282,591
14,129,589
Contribution of HST/WHC/MPLXT⁽³⁾
12,960,376
—
264,497
13,224,873
Contribution of the Joint-Interest Acquisition⁽³⁾
18,511,134
—
377,778
18,888,912
Class B conversion⁽⁴⁾
4,350,057
(3,990,878 ) 7,330
366,509
Balance at September 30, 2017 407,045,362

—

8,307,046

415,352,408



~~(1)~~(In units)	~~As a result of the unit-based~~Common
Balance at December 31, 2018	794,089,518
Unit-based compensation awards ~~issued during the period, MPLX GP contributed less than $1 million in exchange for 3,745 general partner units to maintain its two percent GP Interest.~~

	148,379
~~(2)~~Balance at March 31, 2019	~~As a result of common units issued under the ATM Program during the period, MPLX GP contributed $10 million in exchange for 282,591 general partner units to maintain its two percent GP Interest.~~794,237,897


~~(3)~~	~~See Note 3 for information regarding this acquisition.~~


~~(4)~~	On July 1, 2017, 3,990,878 Class B units converted to 4,350,057 common units and were eligible to receive the second quarter 2017 distribution. As a result of the Class B conversion, MPLX GP contributed less than $1 million in exchange for 7,330 general partner units to maintain its two percent GP Interest.

~~Reorganization Transactions~~ – On September 1, 2016, the Partnership and various affiliates initiated a series of reorganization transactions in order to simplify the Partnership’s ownership structure and its financial and tax reporting requirements. In connection with these transactions, the issued and outstanding MPLX LP Class A units, all of which were held by MarkWest Hydrocarbon, were either distributed to or purchased by MPC in exchange for $84 million in cash, 21,401,137 MPLX LP common units and 436,758 MPLX LP general partner units. Following these initial transactions, all of the MPLX LP Class A units were exchanged on a one-for-one basis for newly issued common units representing limited partner interests in MPLX LP. MPC also contributed $141 million to facilitate the repayment of intercompany debt between MarkWest Hydrocarbon and MarkWest. As a result of these transactions, the MPLX LP Class A units were eliminated, are no longer outstanding and no longer participate in distributions of cash from the Partnership. Cash that is derived from or attributable to MarkWest Hydrocarbon’s operations is now treated in the same manner as cash derived from or attributable to other operations of the Partnership and its subsidiaries.

~~Net Income Allocation~~–In preparing the Consolidated Statements of Equity, net income (loss) attributable to MPLX LP is allocated to Preferred unitholders based on a fixed distribution schedule, as discussed in Note 8, and subsequently allocated to the general partner and limited partner unitholders. However, when distributions related to the IDRs are made, earnings equal to the amount of those distributions are first allocated to the general partner before the remaining earnings are allocated to the unitholders, based on their respective ownership percentages. The following table presents the allocation of the general partner’s GP Interest in net income attributable to MPLX LP:

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
Net income attributable to MPLX LP $ 216
$ 141
$ 556
$ 100
Less: Preferred unit distributions 16
16
49
25
General partner's IDRs and other 83
49
216
137
Net income (loss) attributable to MPLX LP available to general and limited partners $ 117
$ 76
$ 291
$ (62 )

General partner's two percent GP Interest in net income (loss) attributable to MPLX LP $ 3
$ 2
$ 6
$ (1 )
General partner's IDRs and other 83
49
216
137
General partner's GP Interest in net income attributable to MPLX LP $ 86
$ 51
$ 222
$ 136

Cash distributions – The Partnership Agreement sets forth the calculation to be used to determine the amount and priority of cash distributions that the common unitholders, Preferred unitholders and general partner will receive. In accordance with the Partnership Agreement, on ~~October 25, 2017, the Partnership~~April 29, 2019, MPLX declared a quarterly cash distribution, based on the results of the ~~third~~first quarter of ~~2017,~~2019, totaling ~~$320~~$523 million, or ~~$0.5875~~$0.6575 per common ~~unit.~~unit; this rate will also be received by preferred unitholders. These distributions will be paid on ~~November 14, 2017~~May 15, 2019 to common unitholders of record on ~~November 6, 2017.~~May 9, 2019. Distributions for the first quarter of 2018 were $0.6175 per common unit.

The allocation of total quarterly cash distributions to ~~general,~~ limited and ~~Preferred~~preferred unitholders is as follows for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2019 and ~~2016. The Partnership’s~~2018. MPLX’s distributions are declared subsequent to quarter end; therefore, the following table represents total cash distributions applicable to the period in which the distributions were earned.

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	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
(In millions)	2017		2016		2017		2016		2019		2018
General partner's distributions:
General partner's distributions on general partner units	$	7	$	5	$	18	$	13
General partner's distributions on IDRs	81		49		211		135
Total distribution on general partner units and IDRs	$	88	$	54	$	229	$	148
Common and preferred unit distributions:
Common unitholders, includes common units of general partner	$	232	$	179	$	648	$	507	$	523	$	467
Preferred unit distributions	16		16		49		25		20		16
Total cash distributions declared	$	336	$	249	$	926	$	680	$	543	$	483

8. Redeemable Preferred Units

Private Placement of Preferred Units – On May 13, 2016, MPLX LP completed the private placement of approximately 30.8 million 6.5 percent Series A Convertible ~~Preferred~~preferred units ~~(the "Preferred units")~~ for a cash purchase price of $32.50 per unit. The aggregate net proceeds of approximately $984 million from the sale of the ~~Preferred~~preferred units were used for capital expenditures, repayment of debt and general ~~partnership~~business purposes.

The ~~Preferred~~preferred units rank senior to all common units with respect to distributions and rights upon liquidation. The holders of the ~~Preferred~~preferred units ~~are entitled to receive~~received cumulative quarterly distributions equal to $0.528125 per ~~unit. Following~~unit for each quarter prior to the second ~~anniversary~~quarter of 2018. Beginning with the ~~issuance~~second quarter of ~~the Preferred units,~~2018, the holders of the ~~Preferred~~preferred units ~~will~~are entitled to receive as a quarterly distribution equal to the greater of $0.528125 per unit or the amount of distributions they would have received on an as converted basis. On April 29, 2019, MPLX declared a quarterly cash distribution of $0.6575 per common unit ~~distributions paid to holders~~representing the distribution of ~~MPLX LP~~income earned during the first quarter of 2019. The preferred units will receive the common ~~units.~~unit rate in lieu of the lower $0.528125 base amount.

The changes in the redeemable preferred balance from December 31, ~~2016~~2018 through ~~September 30, 2017~~March 31, 2019 are summarized below:

(In millions) Redeemable Preferred Units
Balance at December 31, 2016 $ 1,000
Net income 49
Distributions received by Preferred unitholders (49 )
Balance at September 30, 2017 $ 1,000



(In millions)	Redeemable Preferred Units
Balance at December 31, 2018	$	1,004
Net income allocated	20
Distributions received by preferred unitholders	(20		)
Balance at March 31, 2019	$	1,004

The holders may convert their ~~Preferred~~preferred units into common units at any time after the third anniversary of the issuance date or prior to liquidation, dissolution or winding up of the Partnership, in full or in part, subject to minimum conversion amounts and conditions. After the fourth anniversary of the issuance date, ~~the Partnership~~MPLX may convert the ~~Preferred~~preferred units into common units at any time, in whole or in part, subject to certain minimum conversion amounts and conditions, if the closing price of MPLX LP common units is greater than $48.75 for the ~~20 day~~20-day trading period immediately preceding the conversion notice date. The conversion rate for the ~~Preferred~~preferred units shall be the quotient of (a) the sum of (i) $32.50, plus (ii) any unpaid cash distributions on the applicable ~~Preferred~~preferred unit, divided by (b) ~~$32.50.~~$32.50, subject to adjustment for unit distributions, unit splits and similar transactions. The holders of the ~~Preferred~~preferred units are entitled to vote on an as-converted basis with the common unitholders and ~~will~~ have certain other class voting rights with respect to any amendment to the Partnership Agreement that would adversely affect any rights, preferences or privileges of the ~~Preferred~~preferred units. In addition, upon certain events involving a change of control, the holders of ~~Preferred~~preferred units may elect, among other potential elections, to convert their ~~Preferred~~preferred units to common units at the ~~then-change~~then change of control conversion rate.

The ~~Preferred~~preferred units are considered redeemable securities under GAAP due to the existence of redemption provisions upon a deemed liquidation event which is outside ~~the Partnership’s~~MPLX’s control. Therefore, they are presented as temporary equity in the mezzanine section of the Consolidated Balance Sheets. The ~~Preferred~~preferred units have been recorded at their issuance date fair value, net of issuance costs. Income allocations increase the carrying value and declared distributions ~~decreased~~decrease the carrying value of the ~~Preferred~~preferred units. As the ~~Preferred~~preferred units are not currently redeemable and not probable of becoming redeemable, adjustment to the initial carrying amount is not necessary and would only be required if it becomes probable that the ~~Preferred~~preferred units would become redeemable.

9. Segment Information

~~The Partnership’s~~MPLX’s chief operating decision maker is the chief executive officer (“CEO”) of its general partner. The CEO reviews ~~the Partnership’s~~MPLX’s discrete financial information, makes operating decisions, assesses financial performance and allocates resources on a type of service basis. ~~The Partnership~~MPLX has two reportable segments: L&S and G&P. Each of these segments ~~are~~is organized and managed based upon the nature of the products and services it offers.

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L&S – transports, stores, distributes and ~~distributes~~markets crude oil and refined petroleum products. Segment information for prior periods includes retrospective adjustments in connection with the acquisition of HST, WHC and MPLXT. Segment information is not included for periods prior to the Joint-Interest Acquisition and the Ozark pipeline acquisition. See Note 3 for more detail of these acquisitions.

G&P – gathers, processes and transports natural gas; and gathers, transports, fractionates, stores and markets NGLs.

~~The Partnership has investments~~During the second quarter of 2018, our CEO began to evaluate the performance of our segments using Segment Adjusted EBITDA. We have modified our presentation of segment performance metrics to be consistent with this change, including prior periods presented for consistent and comparable presentation. Amounts included in ~~entities that are accounted~~net income and excluded from Segment Adjusted EBITDA include: (i) depreciation and amortization; (ii) provision/(benefit) for ~~using the~~income taxes; (iii) amortization of deferred financing costs; (iv) extinguishment of debt; (v) non-cash equity-based compensation; (vi) impairment expense; (vii) net interest and other financial costs; (viii) income/(loss) from equity method ~~of accounting (see Note 4). However, the CEO views the Partnership-operated~~investments; (ix) distributions and adjustments related to equity method ~~investments’ financial information~~investments; (x) unrealized derivative gains/(losses); (xi) acquisition costs; (xii) noncontrolling interest; and (xiii) other adjustments as ~~if those investments were consolidated.~~deemed necessary. These items are either: (i) believed to be non-recurring in nature; (ii) not believed to be allocable or controlled by the segment; or (iii) are not tied to the operational performance of the segment.

Segment operating income represents income from operations attributable to the reportable segments. Corporate general and administrative expenses, unrealized derivative gains (losses), goodwill impairment, certain management fees and depreciation and amortization are not allocated to the reportable segments. Management does not consider these items allocable to or controllable by any individual segment and, therefore, excludes these items when evaluating segment performance. Segment results are also adjusted to exclude the portion of income from operations attributable to the noncontrolling interests related to partially-owned entities that are either consolidated or accounted for as equity method investments. Segment operating income attributable to MPLX LP excludes the operating income related to Predecessors of the HSM, HST, WHC and MPLXT businesses prior to the dates they were acquired by MPLX LP.

The tables below present information about revenues and other income, ~~from operations and~~ capital expenditures and total assets for ~~the reported~~our reportable segments:

Three Months Ended September 30, 2017
(In millions) L&S G&P Total
Revenues and other income:
Segment revenues $ 378
$ 669
$ 1,047
Segment other income 11
1
12
Total segment revenues and other income 389
670
1,059
Costs and expenses:
Segment cost of revenues 176
276
452
Segment operating income before portion attributable to noncontrolling interests and Predecessor 213
394
607
Segment portion attributable to noncontrolling interests and Predecessor —
45
45
Segment operating income attributable to MPLX LP $ 213
$ 349
$ 562

Three Months Ended September 30, 2016
(In millions) L&S G&P Total
Revenues and other income:
Segment revenues $ 339
$ 567
$ 906
Segment other income 12
1
13
Total segment revenues and other income 351
568
919
Costs and expenses:
Segment cost of revenues 153
239
392
Segment operating income before portion attributable to noncontrolling interests and Predecessor 198
329
527
Segment portion attributable to noncontrolling interests and Predecessor 74
36
110
Segment operating income attributable to MPLX LP $ 124
$ 293
$ 417

Nine Months Ended September 30, 2017
(In millions) L&S G&P Total
Revenues and other income:
Segment revenues $ 1,095
$ 1,869
$ 2,964
Segment other income 35
2
37
Total segment revenues and other income 1,130
1,871
3,001
Costs and expenses:
Segment cost of revenues 500
781
1,281
Segment operating income before portion attributable to noncontrolling interests and Predecessor 630
1,090
1,720
Segment portion attributable to noncontrolling interests and Predecessor 53
119
172
Segment operating income attributable to MPLX LP $ 577
$ 971
$ 1,548

Nine Months Ended September 30, 2016
(In millions) L&S G&P Total
Revenues and other income:
Segment revenues $ 901
$ 1,595
$ 2,496
Segment other income 42
1
43
Total segment revenues and other income 943
1,596
2,539
Costs and expenses:
Segment cost of revenues 392
662
1,054
Segment operating income before portion attributable to noncontrolling interests and Predecessor 551
934
1,485
Segment portion attributable to noncontrolling interests and Predecessor 216
113
329
Segment operating income attributable to MPLX LP $ 335
$ 821
$ 1,156

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
Reconciliation to Income from operations:
L&S segment operating income attributable to MPLX LP $ 213
$ 124
$ 577
$ 335
G&P segment operating income attributable to MPLX LP 349
293
971
821
Segment operating income attributable to MPLX LP 562
417
1,548
1,156
Segment portion attributable to unconsolidated affiliates (47 ) (41 ) (125 ) (130 )
Segment portion attributable to Predecessor —
74
53
216
Income (loss) from equity method investments 23
6
29
(72 )
Other income - related parties 13
11
38
29
Unrealized derivative (losses) gains⁽¹⁾
(17 ) (2 ) 2
(23 )
Depreciation and amortization (164 ) (151 ) (515 ) (438 )
Impairment expense —
—
—
(130 )
General and administrative expenses (59 ) (56 ) (174 ) (172 )
Income from operations $ 311
$ 258
$ 856
$ 436

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
Reconciliation to Total revenues and other income:
Total segment revenues and other income $ 1,059
$ 919
$ 3,001
$ 2,539
Revenue adjustment from unconsolidated affiliates (107 ) (100 ) (287 ) (303 )
Income (loss) from equity method investments 23
6
29
(72 )
Other income - related parties 13
11
38
29
Unrealized derivative (losses) gains related to product sales⁽¹⁾
(8 ) 2
1
(12 )
Total revenues and other income $ 980
$ 838
$ 2,782
$ 2,181



	Three Months Ended March 31,
(In millions)	2019		2018
L&S
Service revenue	$	612	$	499
Rental income	199		145
Product related revenue	3		2
Income from equity method investments	41		44
Other income	11		12
Total segment revenues and other income⁽¹⁾	866		702
Segment Adjusted EBITDA⁽²⁾	559		437
Maintenance capital expenditures	13		22
Growth capital expenditures	103		154
G&P
Service revenue	404		354
Rental income	88		79
Product related revenue	244		253
Income from equity method investments	29		17
Other income	15		15
Total segment revenues and other income⁽¹⁾	780		718
Segment Adjusted EBITDA⁽²⁾	371		323
Maintenance capital expenditures	6		3
Growth capital expenditures	$	261	$	271


(1)	~~The Partnership~~Within the total segment revenues and other income amounts presented above, third party revenues for the L&S segment were $82 million and $74 million for the three months ended March 31, 2019 and 2018, respectively. Third party revenues for the G&P segment were $757 million and $703 million for the three months ended March 31, 2019 and 2018, respectively.


(2)	See below for the reconciliation from Segment Adjusted EBITDA to “Net income.”



(In millions)	March 31, 2019		December 31, 2018
Segment assets
Cash and cash equivalents	$	93	$	68
L&S⁽¹⁾	7,040		6,566
G&P⁽¹⁾	16,451		16,145
Total assets	$	23,584	$	22,779

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(1)	Equity method investments included in L&S assets were $1.12 billion at March 31, 2019 and December 31, 2018, respectively. Equity method investments included in G&P assets were $3.15 billion at March 31, 2019 and $3.05 billion at December 31, 2018.

The table below provides a reconciliation between “Net income” and Segment Adjusted EBITDA.



	Three Months Ended March 31,
(In millions)	2019			2018
Reconciliation to Net income:
L&S Segment Adjusted EBITDA	$	559		$	437
G&P Segment Adjusted EBITDA	371			323
Total reportable segments	930			760
Depreciation and amortization⁽¹⁾	(211		)	(176		)
Benefit/(provision) for income taxes	2			(4		)
Amortization of deferred financing costs	(13		)	(16		)
Non-cash equity-based compensation	(6		)	(4		)
Net interest and other financial costs	(158		)	(114		)
Income from equity method investments	70			61
Distributions/adjustments related to equity method investments	(108		)	(90		)
Unrealized derivative (losses)/gains⁽²⁾	(4		)	7
Acquisition costs	—			(3		)
Adjusted EBITDA attributable to noncontrolling interests	7			2
Net income	$	509		$	423


(1)	Depreciation and amortization attributable to L&S was $70 million and $48 million for the three months ended March 31, 2019 and 2018, respectively. Depreciation and amortization attributable to G&P was $141 million and $128 million for the three months ended March 31, 2019 and 2018, respectively.

(2)

MPLX makes a distinction between realized orand unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded.

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
Reconciliation to Net income attributable to noncontrolling interests and Predecessor:
Segment portion attributable to noncontrolling interests and Predecessor $ 45
$ 110
$ 172
$ 329
Portion of noncontrolling interests and Predecessor related to items below segment income from operations (21 ) (39 ) (84 ) (157 )
Portion of operating income attributable to noncontrolling interests of unconsolidated affiliates (23 ) (18 ) (49 ) (20 )
Net income attributable to noncontrolling interests and Predecessor $ 1
$ 53
$ 39
$ 152

~~The following table reconciles segment capital expenditures to total capital expenditures:~~

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
L&S segment capital expenditures $ 120
$ 188
$ 353
$ 369
G&P segment capital expenditures 333
183
957
668
Total segment capital expenditures 453
371
1,310
1,037
Less: Capital expenditures for Partnership-operated, non-wholly-owned subsidiaries in G&P segment 101
34
306
94
Total capital expenditures $ 352
$ 337
$ 1,004
$ 943

~~Total assets by reportable segment were:~~

(In millions) September 30, 2017 December 31, 2016
Cash and cash equivalents $ 3
$ 234
L&S 4,520
2,978
G&P 14,715
14,297
Total assets $ 19,238
$ 17,509

10. Inventories

Inventories consist of the following:


(In millions)	September 30, 2017		December 31, 2016		March 31, 2019		December 31, 2018
NGLs	$	3	$	2	$	3	$	9
Line fill	9		9		10		9
Spare parts, materials and supplies	52		44		61		59
Total inventories	$	64	$	55	$	74	$	77

11. Property, Plant and Equipment

Property, plant and equipment with associated accumulated depreciation is shown below:

(In millions) September 30, 2017 December 31, 2016
Natural gas gathering and NGL transportation pipelines and facilities $ 5,101
$ 4,748
Processing, fractionation and storage facilities⁽¹⁾
3,753
3,547
Pipelines and related assets 2,181
1,799
Barges and towing vessels 484
479
Terminals and related assets⁽¹⁾
794
759
Land, building, office equipment and other 755
757
Construction-in-progress 986
1,013
Total 14,054
13,102
Less accumulated depreciation 2,132
1,694
Property, plant and equipment, net $ 11,922
$ 11,408


~~(1)~~	~~Certain prior period amounts have been updated to conform to current period presentation.~~



(In millions)	March 31, 2019		December 31, 2018
Natural gas gathering and NGL transportation pipelines and facilities	$	6,128	$	5,926
Processing, fractionation and storage facilities	5,343		5,336
Pipelines and related assets	2,620		2,560
Barges and towing vessels	635		620
Terminals and related assets	1,184		1,178
Refinery related assets	943		938
Land, building, office equipment and other	978		957
Construction-in-progress	858		801
Total	18,689		18,316
Less accumulated depreciation	3,873		3,677
Property, plant and equipment, net	$	14,816	$	14,639

12. Fair Value Measurements

Fair Values – Recurring

Fair value measurements and disclosures relate primarily to ~~the Partnership’s~~MPLX’s derivative positions as discussed in Note 13. ~~Money market funds, which are included in~~ ~~Cash and cash equivalents~~ onThe following table presents the ~~Consolidated Balance Sheets, are measured~~financial instruments carried at fair value on a recurring basis as of March 31, 2019 and ~~are included in Level 1 measurements of~~December 31, 2018 by fair value hierarchy level. MPLX has elected to offset the ~~valuation hierarchy. Level 2 instruments include crude oil and natural gas swap contracts.~~ fair value amounts recognized for multiple derivative contracts executed with the same counterparty.



	March 31, 2019					December 31, 2018
(In millions)	Assets		Liabilities			Assets		Liabilities
Significant unobservable inputs (Level 3)
Embedded derivatives in commodity contracts	$	—	$	(65	)	$	—	$	(61	)
Total carrying value on Consolidated Balance Sheets	$	—	$	(65	)	$	—	$	(61	)

Level 3 instruments include all NGL transactions and embedded derivatives in commodity contracts. The ~~following table presents the financial instruments carried at~~embedded derivative liability relates to a natural gas purchase agreement embedded in a keep-whole processing agreement. The fair value ~~classified by the valuation hierarchy:~~

September 30, 2017 December 31, 2016
(In millions) Assets Liabilities Assets Liabilities
Significant other observable inputs (Level 2)
Commodity contracts $ —
$ —
$ —
$ —
Significant unobservable inputs (Level 3)
Commodity contracts —
(5 ) —
(6 )
Embedded derivatives in commodity contracts —
(52 ) —
(54 )
Total carrying value in Consolidated Balance Sheets $ —
$ (57 ) $ —
$ (60 )

~~The following table provides additional information about the~~calculation for these Level 3 instruments used significant unobservable inputs ~~used in~~including: (1) NGL prices interpolated and extrapolated due to inactive markets ranging from $0.60 to $1.25 and (2) the ~~valuation of Level 3 instruments as of September 30, 2017. The market approach is used for valuation of all instruments.~~



~~Level 3 Instrument~~	~~Balance Sheet Classification~~	~~Unobservable Inputs~~	~~Value Range~~	~~Time Period~~
~~Commodity contracts~~	~~Liabilities~~	~~Forward ethane prices (per Gal)~~⁽¹⁾	~~$0.27 - $0.28~~	~~Oct. 17 - Dec. 17~~
		~~Forward propane prices (per Gal)~~⁽¹⁾	~~$0.68 - $0.91~~	~~Oct. 17 - Dec. 18~~
		~~Forward isobutane prices (per Gal)~~⁽¹⁾	~~$0.82 - $1.06~~	~~Oct. 17 - Dec. 18~~
		~~Forward normal butane prices (per Gal)~~⁽¹⁾	~~$0.76 - $1.03~~	~~Oct. 17 - Dec. 18~~
		~~Forward natural gasoline prices (per Gal)~~⁽¹⁾	~~$1.18 - $1.22~~	~~Oct. 17 - Dec. 18~~

~~Embedded derivatives in commodity contracts~~	~~Assets~~	~~ERCOT Pricing (per MegaWatt Hour)~~	~~$24.19 - $26.05~~	~~Oct. 17 - Dec. 17~~
	~~Liabilities~~	~~Forward propane prices (per Gal)~~⁽¹⁾	~~$0.61 - $0.91~~	~~Oct. 17 - Dec. 22~~
		~~Forward isobutane prices (per Gal)~~⁽¹⁾	~~$0.75 - $1.06~~	~~Oct. 17 - Dec. 22~~
		~~Forward normal butane prices (per Gal)~~⁽¹⁾	~~$0.69 - $1.03~~	~~Oct. 17 - Dec. 22~~
		~~Forward natural gasoline prices (per Gal)~~⁽¹⁾	~~$1.15 - $1.22~~	~~Oct. 17 - Dec. 22~~
		~~Forward natural gas prices (per MMBtu)~~⁽²⁾	~~$2.30 - $3.11~~	~~Oct. 17 - Dec. 22~~
		~~Probability of renewal~~⁽³⁾	~~50.0%~~
		~~Probability of renewal for second 5-yr term~~⁽³⁾	~~75.0%~~


~~(1)~~	~~NGL prices used in the valuations decrease over time.~~


~~(2)~~	~~Natural gas prices used in the valuations decrease over time.~~

~~(3)~~

The producer counterparty to the embedded derivative has the option to renew the gas purchase agreement and the related keep-whole processing agreement for two successive five-year terms after 2022. The embedded gas purchase agreement cannot be renewed without the renewal of the related keep-whole processing agreement. Due to the significant number of years until the renewal options are exercisable and the high level of uncertainty regarding the counterparty’s future

~~business strategy, the future commodity price environment, and the future competitive environment for midstream services in the Southern Appalachian region, management determined that a 50 percent~~ probability of renewal of 91 percent for the first five-year term and 7582 percent for the second five-year term ~~are appropriate assumptions. Included in this assumption is a further extension~~ of ~~management’s estimates of future frac spreads through 2032.~~

~~Fair Value Sensitivity Related to Unobservable Inputs~~

~~Commodity contracts (assets~~the gas purchase agreement and ~~liabilities) –~~ ~~For the Partnership’s commodity contracts, increases in forward NGL prices result in a decrease~~related keep-whole processing agreement. Increases or decreases in the fair value of the derivative assets and an increase in the fair value of the derivative liabilities. The forward prices for the individual NGL products generally increase or decrease in a positive correlation with one another.

~~Embedded derivatives in commodity contracts –~~ ~~The Partnership has two embedded derivatives in commodity contracts, as follows:~~

A single embedded derivative liability comprised of both the purchase of natural gas at prices impacted by the frac spread and the probability of contract renewal (the “Natural Gas Embedded Derivative”), as discussed further in Note 13. Increases (decreases) in the fracfractionation spread result in an increase ~~(decrease)~~or decrease in the fair value of the embedded derivative ~~liability.~~liability, respectively. An increase in the probability of renewal would result in an increase in the fair value of the related embedded derivative liability.

An embedded derivative related to utilities costs discussed further in Note 13. Increases in the forward Electric Reliability Council of Texas (“ERCOT”) prices result in a decrease in the fair value of Beyond the embedded derivative ~~liability.~~

~~Level 3 Valuation Process~~

~~The Partnership’s Risk Management Department (the “Risk Department”) is responsible for the valuation of the Partnership’s commodity derivative contracts and embedded derivatives in~~discussed above, we had no outstanding commodity contracts ~~except for the Natural Gas Embedded Derivative. The Risk Department reports to the Chief Financial Officer and is responsible for the oversight~~as of the Partnership’s commodity risk management program. The members of the Risk Department have the requisite experience, knowledge and day-to-day involvement in the energy commodity markets to ensure appropriate valuations and understand the changes in the valuations from period to period. The valuations of the Level 3 commodity derivative contracts are performed by a third-party pricing service and are reviewed and validated on a quarterly basis by the Risk Department by comparing the pricing and option volatilities to actual market data and/March 31, 2019 or ~~data provided by at least one other independent third-party pricing service.~~December 31, 2018.

Management is responsible for the valuation of the Natural Gas Embedded Derivative discussed in Note 13. Included in the valuation of the Natural Gas Embedded Derivative are assumptions about the forward price curves for NGLs and natural gas for periods in which price curves are not available from third-party pricing services due to insufficient market data. The Risk Department must develop forward price curves for NGLs and natural gas through the initial contract term (October 2017 through December 2022) for management’s use in determining the fair value of the Natural Gas Embedded Derivative. In developing the pricing curves for these periods, the Risk Department maximizes its use of the latest known market data and trends as well as its understanding of the historical relationships between forward NGL and natural gas prices and the forward market data that is available for the required period, such as crude oil pricing and natural gas pricing from other markets. However, there is very limited actual market data available to validate the Risk Department’s estimated price curves. Management also assesses the probability of the producer customer’s renewal of the contracts, which includes consideration of:

The estimated favorability of the contracts to the producer customer as compared to other options that would be available to them at the time and in the relative geographic area of their producing assets;

~~Extrapolated pricing curves, using a weighted average probability method that is based on historical frac spreads, which impact the calculation of favorability; and~~

~~The producer customer’s potential business strategy decision points that may exist at the time the counterparty would elect whether to renew the contracts.~~

Changes in Level 3 Fair Value Measurements

The ~~tables below include~~following table is a ~~rollforward~~reconciliation of the ~~balance sheet amounts~~net beginning and ending balances recorded for ~~the three and nine months ended September 30, 2017 and 2016, respectively (including the change in fair value), for~~net assets and liabilities classified ~~by the Partnership within~~as Level 3 ofin the ~~valuation~~fair value hierarchy.

Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017
(In millions) Commodity Derivative Contracts (net) Embedded Derivatives in Commodity Contracts (net) Commodity Derivative Contracts (net) Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period $ 2
$ (43 ) $ (6 ) $ (54 )
Total losses (realized and unrealized) included in earnings⁽¹⁾
(10 ) (12 ) (3 ) (4 )
Settlements 3
3
4
6
Fair value at end of period $ (5 ) $ (52 ) $ (5 ) $ (52 )
The amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to liabilities still held at end of period $ (7 ) $ (10 ) $ (4 ) $ (4 )

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	Three Months Ended September 30, 2016						Nine Months Ended September 30, 2016						Three Months Ended March 31, 2019					Three Months Ended March 31, 2018
(In millions)	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)			Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)			Commodity Derivative Contracts (net)		Embedded Derivatives in Commodity Contracts (net)			Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	(4	)	$	(40	)	$	7		$	(32	)	$	—	$	(61	)	$	(2	)	$	(64	)
Total gains (losses) (realized and unrealized) included in earnings⁽¹⁾	2			(6		)	(5		)	(17		)
Total (losses)/gains (realized and unrealized) included in earnings⁽¹⁾													—		(6		)	—			3
Settlements	(1		)	2			(6		)	5			—		2			—			3
Netting adjustment⁽²⁾	—			—			1			—
Fair value at end of period	$	(3	)	$	(44	)	$	(3	)	$	(44	)	—		(65		)	(2		)	(58		)
The amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to liabilities still held at end of period	$	—		$	(4	)	$	(4	)	$	(15	)	$	—	$	(5	)	$	—		$	3

(1)

Gains and losses on ~~Commodity Derivative Contracts~~commodity derivative contracts classified as Level 3 are recorded in “Product sales”~~Product sales~~ inon the ~~accompanying~~ Consolidated Statements of Income. Gains and losses on ~~Embedded Derivatives~~derivatives embedded in ~~Commodity Contracts~~commodity contracts are recorded in ~~Purchased~~“Purchased product ~~costs~~costs” and ~~Cost~~“Cost of ~~revenues~~.revenues” on the Consolidated Statements of Income.

~~(2)~~

Certain derivative positions are subject to master netting agreements; therefore, the Partnership has elected to offset derivative assets and liabilities where legally permissible. The Partnership may hold positions with certain counterparties, which for GAAP purposes are classified within different levels of the fair value hierarchy and may be legally permissible to offset. This adjustment represents the total impact of offsetting Level 2 positions with Level 3 positions as of September 30, 2016.

Fair Values – Reported

~~The Partnership’s~~MPLX’s primary financial instruments are cash and cash equivalents, receivables, receivables from related parties, accounts payable, payables to related parties and long-term debt. ~~The Partnership’s~~MPLX’s fair value assessment incorporates a variety of considerations, including (1) the ~~short-term~~ duration of the instruments, (2) MPC’s investment-grade credit rating and (3) the historical incurrence of and expected future insignificance of bad debt expense, which includes an evaluation of counterparty credit risk. ~~The Partnership~~MPLX believes the carrying values of its current assets and liabilities approximate fair value. The recorded value of the amounts outstanding under the bank revolving credit facility, if any, approximates fair value due to the variable interest rate that approximates current market rates. Derivative instruments are recorded at fair value, based on available market information (see Note 13).

The fair value of ~~the Partnership’s~~MPLX’s long-term debt is estimated based on recent market non-binding indicative quotes. The fair value of the SMR liability is estimated using a discounted cash flow approach based on the contractual cash flows and ~~the Partnership’s~~MPLX’s unsecured borrowing rate. The long-term debt and SMR liability fair values are considered Level 3 measurements. The following table summarizes the fair value and carrying value of the long-term debt, excluding ~~capital~~finance leases, and SMR liability:


	September 30, 2017				December 31, 2016				March 31, 2019				December 31, 2018
(In millions)	Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value
Long-term debt	$	7,619	$	6,869	$	4,953	$	4,422	$	14,430	$	13,921	$	13,169	$	13,484
SMR liability	106		92		108		96		$	94	$	85	$	92	$	86

13. Derivative Financial Instruments

~~Commodity Derivatives~~

NGL and natural gas prices are volatile and are impacted by changes in fundamental supply and demand, as well as market uncertainty, availability of NGL transportation and fractionation capacity and a variety of additional factors that are beyond the Partnership’s control. A portion of the Partnership’s profitability is directly affected by prevailing commodity prices primarily as a result of processing or conditioning at its own or third-party processing plants, purchasing and selling or gathering and transporting volumes of natural gas at index-related prices and the cost of third-party transportation and fractionation services. To the extent that commodity prices influence the level of natural gas drilling by the Partnership’s producer customers, such prices also affect profitability. To protect itself financially against adverse price movements and to maintain more stable and predictable cash flows so that the Partnership can meet its cash distribution objectives, debt service and capital plans, the Partnership executes a strategy governed by its risk management policy. The Partnership has a committee comprised of senior management that oversees risk management activities, continually monitors the risk management program and adjusts its strategy as conditions warrant. The Partnership enters into certain derivative contracts to reduce the risks associated with unfavorable changes in the prices of natural gas and NGLs. Derivative contracts utilized are swaps traded on the OTC market and fixed price forward contracts. The risk management policy does not allow the Partnership to take speculative positions with its derivative contracts.

To mitigate its cash flow exposure to fluctuations in the price of NGLs, the Partnership has entered into derivative financial instruments relating to the future price of NGLs and crude oil. The Partnership currently manages the majority of its NGL price risk using direct product NGL derivative contracts. The Partnership enters into NGL derivative contracts when adequate market liquidity exists and future prices are satisfactory. A portion of the Partnership’s NGL price exposure is managed by using crude oil contracts. In periods where NGL prices and crude oil prices are not consistent with the historical relationship, the crude oil contracts create increased risk and additional gains or losses. The Partnership may settle its crude oil contracts prior to the contractual settlement date in order to take advantage of favorable terms and reduce the future exposure resulting from the less effective crude oil contracts. Based on its current volume forecasts, the majority of its derivative positions used to manage the future commodity price exposure are expected to be direct product NGL derivative contracts.

To mitigate its cash flow exposure to fluctuations in the price of natural gas, the Partnership primarily utilizes derivative financial instruments relating to the future price of natural gas and takes into account the partial offset of its long and short gas positions resulting from normal operating activities.

As a result of its current derivative positions, the Partnership has mitigated a portion of its expected commodity price risk through the fourth quarter of 2018. The Partnership would be exposed to additional commodity risk in certain situations such as if producers under-deliver or over-deliver product or when processing facilities are operated in different recovery modes. In the event the Partnership has derivative positions in excess of the product delivered or expected to be delivered, the excess derivative positions may be terminated.

Management conducts a standard credit review on counterparties to derivative contracts and has provided the counterparties with a guaranty as credit support for its obligations. A separate agreement with certain counterparties allows MarkWest Liberty Midstream to enter into derivative positions without posting cash collateral. The Partnership uses standardized agreements that allow for offset of certain positive and negative exposures (“master netting arrangements”) in the event of default or other terminating events, including bankruptcy.

The Partnership records derivative contracts at fair value in the Consolidated Balance Sheets and has not elected hedge accounting or the normal purchases and normal sales designation (except for electricity and certain other qualifying contracts,

for which the normal purchases and normal sales designation has been elected). The Partnership’s accounting may cause volatility in the Consolidated Statements of Income as the Partnership recognizes all unrealized gains and losses from the changes in fair value of derivatives in current earnings. The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded.

~~Volume of Commodity Derivative Activity~~

As of ~~September 30, 2017, the Partnership~~March 31, 2019, MPLX had ~~the following~~no outstanding commodity contracts ~~that were executed to manage~~beyond the ~~cash flow risk associated with future sales of NGLs and purchases of natural gas:~~



~~Derivative contracts not designated as hedging instruments~~	~~Financial Position~~	~~Notional Quantity (net)~~
~~Crude Oil (bbl)~~	~~Short~~	~~18,400~~
~~Natural Gas (MMBtu)~~	~~Long~~	~~1,096,539~~
~~NGLs (gal)~~	~~Short~~	~~33,387,904~~

~~Embedded Derivatives in Commodity Contracts~~embedded derivative discussed below.

~~The Partnership~~Embedded Derivative - MPLX has a ~~commodity contract~~natural gas purchase commitment embedded in a keep-whole processing agreement with a producer customer in the Southern Appalachian region ~~that creates a floor on~~expiring in December 2022. The customer has the frac spread for gas purchases of 9,000 Dth/d. The commodity contract is a component of a broader regional arrangement that also includes a keep-whole processing agreement. For accounting purposes, these contracts have been aggregated into a single contract and are evaluated together. In February 2011, the Partnership executed agreements with the producer customer to extend the commodity contract and the related processing agreement from March 31, 2015 to December 31, 2022, with the producer customer’sunilateral option to extend the agreement for two ~~successive~~consecutive five-year terms through December ~~31,~~ 2032. ~~The~~For accounting purposes, the natural gas purchase ~~of gas at prices based on the frac spread~~commitment and the ~~option to extend the agreements~~term extending options have been ~~identified as~~aggregated into a single compound embedded ~~derivative, which is recorded at fair value.~~derivative. The probability of ~~renewal~~the customer exercising its options is determined based on ~~extrapolated pricing curves, a review of the overall expected favorability of the contracts based on such pricing curves and~~ assumptions about the ~~counterparty’s~~customer’s potential business strategy decision points that may exist at the time ~~the counterparty~~they would elect whether to renew the contract. The changes in fair value of this compound embedded derivative are based on the difference between the contractual and index pricing, the probability of the producer customer exercising its option to extend and the estimated favorability of these contracts compared to current market conditions. The changes in fair value are recorded in earnings through ~~Purchased~~“Purchased product ~~costs~~ incosts” on the Consolidated Statements of Income. As of ~~September 30, 2017~~March 31, 2019 and December 31, ~~2016,~~2018, the estimated fair value of this contract was a liability of ~~$52~~$65 million and ~~$54~~$61 million, respectively.

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~~The Partnership~~Certain derivative positions are subject to master netting agreements, therefore, MPLX has ~~a commodity contract~~elected to offset derivative assets and liabilities that ~~gives it an option~~are legally permissible to ~~fix a component~~be offset. As of ~~the utilities cost to an index price~~March 31, 2019 and December 31, 2018, there were no derivative assets or liabilities that were offset on electricity at a plant location in the Southwest through the fourth quarter of 2018. The contract’s pricing is currently fixed through the fourth quarter of 2017 with the ability to fix the pricing for its remaining year. Changes in the fair value as of the derivative component of this contract were recognized as ~~Cost of Revenues~~ in the Consolidated ~~Statements of Income. As of September 30, 2017, the estimated fair value of this contract was a liability of less than $1 million.~~

~~Financial Statement Impact of Derivative Contracts~~

There were no material changes to the Partnership’s policy regarding the accounting for these instruments as previously disclosed in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2016, as updated by our Current Report on Form 8-K filed on May 1, 2017.Balance Sheets. The impact of ~~the Partnership’s~~MPLX’s derivative instruments on its Consolidated Balance Sheets is summarized below:

(In millions) September 30, 2017 December 31, 2016
Derivative contracts not designated as hedging instruments and their balance sheet location Asset Liability Asset Liability
Commodity contracts⁽¹⁾

Other current assets / other current liabilities $ —
$ (15 ) $ —
$ (13 )
Other noncurrent assets / deferred credits and other liabilities —
(42 ) —
(47 )
Total $ —
$ (57 ) $ —
$ (60 )



(In millions)	March 31, 2019					December 31, 2018
Derivative contracts not designated as hedging instruments and their balance sheet location	Asset		Liability			Asset		Liability
Commodity contracts⁽¹⁾
Other current assets / Other current liabilities	$	—	$	(8	)	$	—	$	(7	)
Other noncurrent assets / Deferred credits and other liabilities	—		(57		)	—		(54		)
Total	$	—	$	(65	)	$	—	$	(61	)


(1)	Includes embedded derivatives in commodity contracts as discussed above.

~~Certain~~For further information regarding the fair value measurement of derivative ~~positions are subject to master netting agreements, therefore~~instruments, including the Partnership has elected to offset derivative assets and liabilities that are legally permissible to be offset. The net amounts in the table below equal the balances presented in the Consolidated Balance Sheets:

September 30, 2017
Assets Liabilities
(In millions) Gross Amount Gross Amounts Offset in the Consolidated Balance Sheets Net Amount of Assets in the Consolidated Balance Sheets Gross Amount Gross Amounts Offset in the Consolidated Balance Sheets Net Amount of Liabilities in the Consolidated Balance Sheets
Current
Commodity contracts $ —
$ —
$ —
$ (5 ) $ —
$ (5 )
Embedded derivatives in commodity contracts —
—
—
(10 ) —
(10 )
Total current derivative instruments —
—
—
(15 ) —
(15 )
Non-current
Commodity contracts —
—
—
—
—
—
Embedded derivatives in commodity contracts —
—
—
(42 ) —
(42 )
Total non-current derivative instruments —
—
—
(42 ) —
(42 )
Total derivative instruments $ —
$ —
$ —
$ (57 ) $ —
$ (57 )

~~In the table above, the Partnership does not offset a counterparty’s current derivative contracts with the counterparty’s non-current derivative contracts, although the Partnership’s~~effect of master netting arrangements ~~would allow current~~or collateral, see Note 12. There were no material changes to MPLX’s policy regarding the accounting for Level 2 and ~~non-current positions to be offset~~Level 3 instruments as previously disclosed in ~~the event of default. Additionally, in the event of default, the Partnership’s master netting arrangements would allow~~MPLX’s Annual Report on Form 10-K for the ~~offsetting~~year ended December 31, 2018. MPLX does not designate any of ~~all transactions executed under the master netting arrangement. These types of transactions may include non-derivative instruments, derivatives qualifying~~its commodity derivative positions as hedges for ~~scope exceptions, receivables and payables arising from settled positions and other forms of non-cash collateral (such as letters of credit).~~accounting purposes.

The impact of ~~the Partnership’s~~MPLX’s derivative contracts not designated as hedging instruments and the location of ~~gain or (loss)~~gains and losses recognized inon the Consolidated Statements of Income is summarized below:

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
Product sales
Realized (loss) gain $ (2 ) $ —
$ (3 ) $ 6
Unrealized (loss) gain (8 ) 2
1
(12 )
Total derivative (loss) gain related to product sales (10 ) 2
(2 ) (6 )
Purchased product costs
Realized loss⁽¹⁾
(2 ) (1 ) (6 ) (4 )
Unrealized (loss) gain (9 ) (3 ) 1
(12 )
Total derivative loss related to purchased product costs (11 ) (4 ) (5 ) (16 )
Cost of revenues
Realized loss⁽¹⁾
—
—
—
(2 )
Unrealized (loss) gain —
(1 ) —
1
Total derivative loss related to cost of revenues —
(1 ) —
(1 )
Total derivative losses $ (21 ) $ (3 ) $ (7 ) $ (23 )



	Three Months Ended March 31,
(In millions)	2019			2018
Product sales
Realized (loss)/gain	$	—		$	—
Unrealized (loss)/gain	—			1
Total derivative (loss)/gain related to product sales	—			1
Purchased product costs
Realized (loss)/gain	(2		)	(3		)
Unrealized (loss)/gain	(4		)	6
Total derivative (loss)/gain related to purchased product costs	(6		)	3
Cost of revenues
Realized (loss)/gain	—			—
Unrealized (loss)/gain	—			—
Total derivative (loss)/gain related to cost of revenues	—			—
Total derivative (loss)/gain	$	(6	)	$	4


~~(1)~~	~~Certain prior period amounts have been updated to conform to current period presentation.~~

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14. Debt

~~The Partnership’s~~MPLX’s outstanding borrowings ~~consisted~~consist of the following:


(In millions)	September 30, 2017			December 31, 2016			March 31, 2019			December 31, 2018
MPLX LP:
Bank revolving credit facility due 2022	$	420		$	—		$	425		$	—
Term loan facility due 2019	—			250
5.500% senior notes due February 2023	710			710
3.375% senior notes due March 2023							500			500
4.500% senior notes due July 2023	989			989			989			989
4.875% senior notes due December 2024	1,149			1,149			1,149			1,149
4.000% senior notes due February 2025	500			500			500			500
4.875% senior notes due June 2025	1,189			1,189			1,189			1,189
4.125% senior notes due March 2027	1,250			—			1,250			1,250
4.000% senior notes due March 2028							1,250			1,250
4.800% senior notes due February 2029							750			750
4.500% senior notes due April 2038							1,750			1,750
5.200% senior notes due March 2047	1,000			—			1,000			1,000
4.700% senior notes due April 2048							1,500			1,500
5.500% senior notes due February 2049							1,500			1,500
4.900% senior notes due April 2058							500			500
Consolidated subsidiaries:
MarkWest - 4.500% - 5.500% senior notes, due 2023-2025	63			63
MPL - capital lease obligations due 2020	7			8
MarkWest - 4.500% - 4.875% senior notes, due 2023-2025							23			23
Financing lease obligations⁽¹⁾							8			6
Total	7,277			4,858			14,283			13,856
Unamortized debt issuance costs	(27		)	(7		)	(96		)	(97		)
Unamortized discount	(401		)	(428		)	(354		)	(366		)
Amounts due within one year	(1		)	(1		)	(1		)	(1		)
Total long-term debt due after one year	$	6,848		$	4,422		$	13,832		$	13,392

(1) See Note 19 for lease information.

Credit Agreements

~~On July 21, 2017, the Partnership entered into a syndicated credit agreement to replace its previously outstanding $2.0 billion five-year bank revolving credit facility with~~MPLX has a $2.25 billion five-year bank revolving credit facility that expires in July 2022 (the “MPLX Credit ~~Agreement 2022”~~Agreement”). ~~The financial covenants and the interest rate terms contained in the new credit agreement are substantially the same as those contained in the previous bank revolving credit facility.~~ During the ~~nine~~three months ended ~~September 30, 2017, the Partnership had no borrowings under the previous bank revolving credit facility. During the nine months ended September 30, 2017, the Partnership~~March 31, 2019, MPLX borrowed~~$420~~ $825 million under the MPLX Credit Agreement, ~~2022,~~ at an average interest rate of ~~2.702~~3.916 percent,and repaid $400 million. At ~~September 30, 2017, the Partnership~~March 31, 2019, MPLX had ~~$420~~$425 million outstanding borrowings and $3 million letters of credit outstanding under the ~~new~~ facility, resulting in total availability of ~~$1.827~~$1.822 billion, or ~~81.2~~81.0 percent of the borrowing capacity.

The $250 million term loan facility was drawn in full on November 20, 2014. On July 19, 2017, MPLX LP prepaid the entire outstanding principal of this loan facility with cash on hand. The borrowings under this facility between January 1, 2017 and July 19, 2017 were at an average interest rate of 2.407 percent.

Senior Notes

On December 10, 2018, MPLX redeemed all of the $750 million 5.5 percent senior notes due February ~~10, 2017,~~15, 2023, $40 million of which was issued by the ~~Partnership completed~~MarkWest subsidiary. These notes were redeemed at 101.833 percent of the principal amount, which resulted in a ~~public offering~~payment of $14 million related to the note premium and the immediate recognition of $46 million of unamortized debt issuance costs.

On November 15, 2018, MPLX issued $2.25 billion aggregate principal amount of senior notes in a public offering, consisting of $750 million aggregate principal amount of 4.8 percent unsecured senior notes ~~consisting of (i) $1.25~~due February 2029 and $1.5 billion aggregate principal amount of ~~4.125~~5.5 percent unsecured senior notes due February 2049 (collectively, the “November 2018 New Senior Notes”). The November 2018 New Senior Notes were offered at a price to the public of 99.432 percent and 98.031 percent of par, respectively. The proceeds were used to repay outstanding borrowings under the MPLX Credit Agreement and the MPC Loan Agreement and to redeem the $750 million 5.5 percent senior notes due in March 2027 and (ii) $1.0 billion aggregate principal amount of 5.200 percent senior notes due in March 2047 (collectively, the “New Senior Notes”). The net proceeds from the New Senior Notes totaled approximately $2.22 billion, after deducting underwriting discounts, and were usedFebruary 2023, as well as for general ~~partnership purposes and capital expenditures. Interest on each series of the notes is payable semi-annually in arrears on March 1 and September 1, commencing on September 1, 2017.~~

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purposes. Interest on each series of the November 2018 New Senior Notes is payable semi-annually in arrears, commencing on February 15, 2019.

On February 8, 2018, MPLX issued $5.5 billion aggregate principal amount of senior notes in a public offering, consisting of $500 million aggregate principal amount of 3.375 percent unsecured senior notes due March 2023, $1.25 billion aggregate principal amount of 4.0 percent unsecured senior notes due March 2028, $1.75 billion aggregate principal amount of 4.5 percent unsecured senior notes due April 2038, $1.5 billion aggregate principal amount of 4.7 percent unsecured senior notes due April 2048, and $500 million aggregate principal amount of 4.9 percent unsecured senior notes due April 2058 (collectively, the “February 2018 New Senior Notes”). The February 2018 New Senior Notes were offered at a price to the public of 99.931 percent, 99.551 percent, 98.811 percent, 99.348 percent, and 99.289 percent of par, respectively. Also on February 8, 2018, $4.1 billion of the net proceeds were used to repay a 364-day term loan facility, which was drawn on February 1, 2018 to fund the cash portion of the dropdown consideration for Refining Logistics and Fuels Distribution. The remaining proceeds were used to repay outstanding borrowings under the MPLX Credit Agreement and the MPC Loan Agreement, as well as for general business purposes. Interest on each series of notes due in 2023 and 2028 is payable semi-annually in arrears, commencing on September 15, 2018. Interest on each series of notes due in 2038, 2048 and 2058 is payable semi-annually in arrears, commencing on October 15, 2018.

15. Revenue

Disaggregation of Revenue

The following table represents a disaggregation of revenue for each reportable segment for the three months ended March 31, 2019 and 2018:



	Three Months Ended March 31, 2019
(In millions)	L&S		G&P		Total
Revenues and other income:
Service revenue	$	34	$	404	$	438
Service revenue - related parties	578		—		578
Service revenue - product related	—		34		34
Product sales	1		201		202
Product sales - related parties	2		9		11
Total revenues from contracts with customers	$	615	$	648	1,263
Non-ASC 606 revenue⁽¹⁾					383
Total revenues and other income					$	1,646


(1)	Non-ASC 606 Revenue includes rental income, income from equity method investments, derivative gains and losses, mark-to-market adjustments, and other income.



	Three Months Ended March 31, 2018
(In millions)	L&S		G&P		Total
Revenues and other income:
Service revenue	$	28	$	354	$	382
Service revenue - related parties	471		—		471
Service revenue - product related	—		44		44
Product sales⁽¹⁾	1		205		206
Product sales - related parties	1		3		4
Total revenues from contracts with customers	$	501	$	606	1,107
Non-ASC 606 revenue⁽²⁾					313
Total revenues and other income					$	1,420


(1)	G&P “Product sales” for the three months ended March 31, 2018 includes approximately $1 million of revenue related to derivative gains and losses and mark-to-market adjustments.

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(2)	Non-ASC 606 Revenue includes rental income, income from equity method investments, derivative gains and losses, mark-to-market adjustments, and other income.

Contract Balances

Contract assets typically relate to aid in construction agreements where the revenue recognized and MPLX’s rights to consideration for work completed exceeds the amount billed to the customer. Contract assets are generally classified as current and included in “Other current assets” on the Consolidated Balance Sheets.

Contract liabilities, which we refer to as “Deferred revenue” and “Long-term deferred revenue,” typically relate to advance payments for aid in construction agreements and deferred customer credits associated with makeup rights and minimum volume commitments. Related to minimum volume commitments, breakage is estimated and recognized into service revenue in instances where it is probable the customer will not use the credit in future periods. We classify contract liabilities as current or long-term based on the timing of when we expect to recognize revenue.

“Receivables, net” primarily relate to our commodity sales. Portions of the “Receivables, net” balance are attributed to the sale of commodity product controlled by MPLX prior to sale while a significant portion of the balance relates to the sale of commodity product on behalf of our producer customers. Both types of transactions are commingled and excluded from the table below. MPLX remits the net sales price back to our producer customers upon completion of the sale. Each period end, certain amounts within accounts payable relate to our payments to producer customers. Such amounts are not deemed material at period end as a result of when we settle with each producer.

The table below reflects the changes in our contract balances for the period ended March 31, 2019:



(In millions)	Balance at December 31, 2018⁽¹⁾		Additions/ (Deletions)			Revenue Recognized⁽²⁾			Balance at March 31, 2019
Contract assets	$	4	$	1		$	—		$	5
Deferred revenue	4		1			(1		)	4
Deferred revenue - related parties	50		3			(9		)	44
Long-term deferred revenue	10		3			—			13
Long-term deferred revenue - related parties	$	42	$	(1	)	$	—		$	41


(1)	Balance represents ASC 606 portion of each respective line item.


(2)	No significant revenue was recognized related to past performance obligations in the current period.

Remaining Performance Obligations

The table below includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.

As of March 31, 2019, the amounts allocated to contract assets and contract liabilities on the Consolidated Balance Sheets are $100 million and are reflected in the amounts below. This will be recognized as revenue as the obligations are satisfied, which is expected to occur over the next 25 years. Further, MPLX does not disclose variable consideration due to volume variability in the table below.



(In millions)
2019	$	884
2020	1,178
2021	1,193
2022	1,179
2023 and thereafter	5,651
Total revenue on remaining performance obligations^(1),(2),(3)	$	10,085

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(1)	All fixed consideration from contracts with customers is included in the amounts presented above. Variable consideration that is constrained or not required to be estimated as it reflects our efforts to perform is excluded.


(2)	Arrangements deemed implicit leases are included in “Rental income” and are excluded from this table.


(3)	Only minimum volume commitments that are deemed fixed are included in the table above. MPLX has various minimum volume commitments in processing arrangements that vary based on the actual Btu content of the gas received. These amounts are deemed variable consideration and are excluded from the table above.

We do not disclose information on the future performance obligations for any contract with an original expected duration of

one year or less.

16. Supplemental Cash Flow Information

Nine Months Ended September 30,
(In millions) 2017 2016
Net cash provided by operating activities included:
Interest paid (net of amounts capitalized) $ 207
$ 158
Non-cash investing and financing activities:
Net transfers of property, plant and equipment from materials and supplies inventories $ 6
$ (4 )
Contribution of fixed assets to joint venture⁽¹⁾
337
—



(In millions)	March 31, 2019		December 31, 2018
Cash and cash equivalents	$	93	$	68
Restricted cash⁽¹⁾	—		8
Cash, cash equivalents and restricted cash⁽²⁾	$	93	$	76


(1)	~~Contribution~~The restricted cash balance is included within “Other current assets” on the Consolidated Balance Sheets.


(2)	As a result of ~~assets to Sherwood Midstream~~the adoption of ASU 2016-18, Statement of Cash Flows - Restricted Cash, the Consolidated Statements of Cash Flows now explain the change during the period of both “Cash and ~~Sherwood Midstream Holdings. See Note 4.~~cash equivalents” and “Restricted cash.”



	Three Months Ended March 31,
(In millions)	2019		2018
Net cash provided by operating activities included:
Interest paid (net of amounts capitalized)	$	143	$	103
Cash paid for amounts included in the measurement of lease liabilities
Payments on operating leases	19		—
Non-cash investing and financing activities:
Net transfers of property, plant and equipment from materials and supplies inventories	1		1
ROU assets obtained in exchange for new operating lease obligations	1		—
ROU assets obtained in exchange for new finance lease obligations	$	2	$	—

The Consolidated Statements of Cash Flows exclude changes to the Consolidated Balance Sheets that did not affect cash. The following is the change of additions to property, plant and equipment related to capital accruals:


	Nine Months Ended September 30,				Three Months Ended March 31,
(In millions)	2017		2016		2019			2018
Increase in capital accruals	$	55	$	—
Increase/(decrease) in capital accruals					$	(74	)	$	(6	)

~~16.~~17. Accumulated Other Comprehensive Loss

MPLX LP records an accumulated other comprehensive loss on the Consolidated Balance Sheets relating to pension and other post-retirement benefits provided by LOOP LLC (“LOOP”) and Explorer Pipeline Company (“Explorer”) to their employees. MPLX LP is not a sponsor of these benefit plans.

The following table shows the changes in “Accumulated other comprehensive loss” by component during the period December 31, 2018 through March 31, 2019.



(In millions)	Pension Benefits			Other Post-Retirement Benefits			Total
Balance at December 31, 2018⁽¹⁾	$	(14	)	$	(2	)	$	(16	)
Other comprehensive income - remeasurements⁽²⁾	—			1			1
Balance at March 31, 2019⁽¹⁾	$	(14	)	$	(1	)	$	(15	)

The following table shows the changes in “Accumulated other comprehensive loss” by component during the period December 31, 2017 through March 31, 2018.



(In millions)	Pension Benefits			Other Post-Retirement Benefits			Total
Balance at December 31, 2017⁽¹⁾	$	(13	)	$	(1	)	$	(14	)
Other comprehensive loss - remeasurements⁽²⁾	(1		)	(1		)	(2		)
Balance at March 31, 2018⁽¹⁾	$	(14	)	$	(2	)	$	(16	)


(1)	These components of “Accumulated other comprehensive loss” are included in the computation of net periodic benefit cost by LOOP and Explorer and are therefore included on the Consolidated Statements of Income under the caption “Income/(loss) from equity method investments.”


(2)	Components of other comprehensive income/loss - remeasurements relate to actuarial gains and losses as well as amortization of prior service costs. MPLX records an adjustment to “Comprehensive income” in accordance with its ownership interest in LOOP and Explorer.

18. Equity-Based Compensation

Phantom Units – The following is a summary of phantom unit award activity of MPLX LP common units for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019:


	Number of Units		Weighted Average Fair Value		Number of Units		Weighted Average Fair Value
Outstanding at December 31, 2016	1,173,411		$	33.09
Outstanding at December 31, 2018					1,154,335		$	34.34
Granted	653,721		36.36		188,069		33.09
Settled	(288,584	)	33.50		(210,846	)	32.20
Forfeited	(113,107	)	34.59		(9,375	)	34.86
Outstanding at September 30, 2017	1,425,441		34.39
Outstanding at March 31, 2019					1,122,183		$	34.53

Performance Units – ~~The Partnership~~MPLX grants performance units ~~under the MPLX LP 2012 Incentive Compensation Plan~~ to certain officers of the general partner and certain eligibleMPC officers who make significant contributions to its business. These performance units pay out 75 percent in cash and 25 percent in MPLX LP common ~~units. The~~units and often contain both market and performance ~~units paying out in units~~conditions based on various metrics. Market conditions are ~~accounted for as equity awards.~~ valued using a Monte Carlo valuation while performance conditions are reevaluated periodically and valued at the compensation cost associated with the performance outcome deemed most probable.

The performance units granted in ~~2017~~2019 are hybrid awards having a three-year performance period of January 1, ~~2017~~2019 through December 31, ~~2019.~~2021. The payout of the award is dependent on two independent conditions, each constituting 50 percent of the overall target units granted. The awards have a performance condition based on MPLX LP’s ~~DCF during the last twelve months of the performance period,~~distributable cash flow, and a market condition based on MPLX LP’s total unitholder ~~return over the entire three-year performance period.~~return. The market condition was valued using a Monte Carlo valuation, ~~with the result being combined with the expected payout of the performance condition as of the grant date,~~ resulting in a grant date fair value of ~~$0.90~~$.68 per unit for the ~~2017~~2019 equity-classified performance units. Grant date fair value of the performance condition is based on potential payouts per unit of up to $2.00 per unit. Compensation cost associated with the performance condition is based on the grant date fair value of the payout deemed most probable to occur and is adjusted as the expectation for payout changes.

During the first quarter of 2018, a performance award was granted; however, a grant date could not be established based on the nature of the award terms. Given that a grant date cannot be established, no expense or units have been recorded. When a grant date is established, the fair value of the award will be recognized over the remaining performance period.

The following is a summary of the ~~equity-classified~~activity for performance unit ~~award activity~~awards to be settled in MPLX LP common units for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019:



	Number of Units
Outstanding at December 31, ~~2016~~2018	~~1,799,249~~1,941,750
Granted	~~1,407,062~~987,994
Settled	(~~464,500~~772,397	)
Forfeited	~~(35,217~~—	)
Outstanding at ~~September 30, 2017~~March 31, 2019	~~2,706,594~~2,157,347

4019. Leases

For further information regarding the adoption of ASC 842, including the method of adoption and practical expedients elected, see Note 2.

Lessee

We lease a wide variety of facilities and equipment under leases from third parties, including land and building space, office and field equipment, storage facilities and transportation equipment, while our related party leases primarily relate to ground leases associated with our refining logistics assets. Our remaining lease terms range from less than one year to 60 years. Some long-term leases include renewal options ranging from one to 50 years and, in certain leases, also include purchase options. Renewal options and termination options were not included in the measurement of ROU assets and lease liabilities since it was determined they were not reasonably certain to be exercised.

Under ASC 842, the components of lease cost were as follows:



	Three Months Ended March 31, 2019
(In millions)	Related Party		Third Party
Components of lease costs:
Operating lease costs	$	4	$	14
Variable lease cost	—		2
Short-term lease cost	—		10
Total lease cost	$	4	$	26

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~~17.~~Supplemental balance sheet data related to leases were as follows:



	March 31, 2019
(In millions)	Related Party			Third Party
Operating leases
Assets
Right of use assets	$	232		$	262
Liabilities
Operating lease liabilities	1			46
Long-term operating lease liabilities	231			216
Total operating lease liabilities	$	232		$	262
Weighted average remaining lease term	47.92 years			6.97 years
Weighted average discount rate	5.80		%	4.33		%

Finance leases
Assets
Property, plant and equipment, gross				$	28
Accumulated depreciation				10
Property, plant and equipment, net				18
Liabilities
Other current liabilities				1
Long-term debt				7
Total finance lease liabilities				$	8
Weighted average remaining lease term				31.05 years
Weighted average discount rate				5.76		%

As of March 31, 2019, maturities of lease liabilities for operating lease obligations and finance lease obligations having initial or remaining non-cancellable lease terms in excess of one year are as follows:



(In millions)	Related Party Operating Leases		Third Party Operating Leases		Finance Leases
2019	$	11	$	42	$	1
2020	14		53		6
2021	14		51		—
2022	14		46		—
2023	14		43		—
2024 and thereafter	619		69		7
Gross lease payments	686		304		14
Less: Imputed interest	454		42		6
Total lease liabilities	$	232	$	262	$	8

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Future minimum commitments as of December 31, 2018, for capital lease obligations and for operating lease obligations having initial or remaining non-cancellable lease terms in excess of one year are as follows:



(In millions)	Operating Lease Obligations		Capital Lease Obligations
2019	$	73	$	2
2020	70		5
2021	67		—
2022	64		—
2023	58		—
2024 and thereafter	719		—
Total minimum lease payments	$	1,051	7
Less: imputed interest costs			1
Present value of net minimum lease payments			$	6

Lessor

Based on the terms of fee-based transportation and storage services agreements with MPC as well as certain natural gas gathering, transportation and processing agreements, MPLX is considered to be the lessor under several operating lease arrangements in accordance with GAAP. The agreements with MPC have remaining terms ranging from less than one year to 12 years with renewal options ranging from zero to 10 years. MPLX’s primary natural gas lease operations relate to a natural gas gathering agreement in the Marcellus Shale for which it earns a fixed-fee for providing gathering services to a single producer using a dedicated gathering system. As the gathering system is expanded, the fixed-fee charged to the producer is adjusted to include the additional gathering assets in the lease. The primary term of the natural gas gathering arrangement expires in 2038 and will continue thereafter on a year-to-year basis until terminated by either party. Other significant natural gas implicit leases relate to a natural gas processing agreement in the Marcellus Shale and a natural gas processing agreement in the Southern Appalachia region for which MPLX earns minimum monthly fees for providing processing services to a single producer using a dedicated processing plant. The primary term of these natural gas processing agreements expires during 2023 and 2033. MPLX’s revenue from its lease arrangements, excluding executory costs, totaled approximately $248 million for the three months ended March 31, 2019.

MPLX did not elect to use the practical expedient to combine lease and non-lease components for lessor arrangements. The tables below represent the portion of the contract allocated to the lease component based on relative standalone selling price. Lessor agreements are currently deemed operating, as we elected the practical expedient to grandfather in old conclusions. We are still determining the impact of the new standard on these arrangements if and when a modification occurs and they are required to be assessed under ASC 842. MPLX may be required to re-classify existing operating leases to sales-type leases upon modification and related reassessment of the leases.

MPLX’s lease arrangements related to the processing facilities contain contingent rental provisions whereby MPLX receives additional fees if the producer customer exceeds the monthly minimum processed volumes. During the three months ended March 31, 2019, MPLX did not receive any material contingent lease payments.

The following is a schedule of minimum future rental revenue on the non-cancellable operating leases as of March 31, 2019:



(In millions)	Related Party		Third Party		Total
2019	$	562	$	144	$	706
2020	752		168		920
2021	632		162		794
2022	633		160		793
2023	621		154		775
2024 and thereafter	2,401		1,205		3,606
Total minimum future rentals	$	5,601	$	1,993	$	7,594

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The following is a schedule of minimum future rental revenue on the non-cancellable operating leases as of December 31, 2018:



(In millions)	Related Party		Third Party		Total
2019	$	748	$	160	$	908
2020	750		159		909
2021	627		150		777
2022	627		148		775
2023	616		142		758
2024 and thereafter	2,321		1,111		3,432
Total minimum future rentals	$	5,689	$	1,870	$	7,559

The following schedule summarizes MPLX’s investment in assets held for operating lease by major classes as of March 31, 2019 and December 31, 2018:



(In millions)	March 31, 2019		December 31, 2018
Natural gas gathering and NGL transportation pipelines and facilities	$	1,036	$	964
Processing, fractionation and storage facilities	1,548		1,398
Pipelines and related assets	274		266
Barges and towing vessels	636		619
Terminals and related assets	1,184		1,178
Refinery related assets	943		938
Land, building, office equipment and other	204		162
Total	5,825		5,525
Less accumulated depreciation	2,155		2,038
Property, plant and equipment, net	$	3,670	$	3,487

20. Commitments and Contingencies

~~The Partnership~~MPLX is the subject of, or a party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. Some of these matters are discussed below. For matters for which ~~the Partnership~~MPLX has not recorded an accrued liability, ~~the Partnership~~MPLX is unable to estimate a range of possible losses for the reasons discussed in more detail below. However, the ultimate resolution of some of these contingencies could, individually or in the aggregate, be material.

Environmental Matters – ~~The Partnership~~MPLX is subject to federal, state and local laws and regulations relating to the environment. These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation of hazardous waste disposal sites. Penalties may be imposed for non-compliance.

At ~~September 30, 2017~~March 31, 2019 and December 31, ~~2016,~~2018, accrued liabilities for remediation totaled ~~$14~~$17 million and $3$14 million, respectively. However, it is not presently possible to estimate the ultimate amount of all remediation costs that might be incurred or the penalties, if any, which may be imposed. At ~~December~~March 31, ~~2016,~~2019 there ~~was less than $1~~were $2 million in receivables from MPC for indemnification of environmental ~~costs related to incidents occurring prior to the Initial Offering. There~~costs. At December 31, 2018 there were no ~~such receivables at September 30, 2017.~~balances with MPC for these costs.

In July 2015, representatives from the EPA and the United States Department of Justice conducted a raid on a MarkWest Liberty Midstream pipeline launcher/receiver site utilized for pipeline maintenance operations in Washington County, Pennsylvania pursuant to a search warrant issued by a magistrate of the United States District Court for the Western District of Pennsylvania. As part of this initiative, the U.S. Attorney’s Office for the Western District of Pennsylvania proceeded with an investigation of MarkWest Liberty Midstream’s launcher/receiver, pipeline and compressor station operations. In response to the investigation, MarkWest initiated independent studies which demonstrated that there was no risk to worker safety and no threat of public harm associated with MarkWest Liberty Midstream’s launcher/receiver operations. These findings were supported by a subsequent inspection and review by the Occupational Safety and Health Administration. After providing these studies, and other substantial documentation related to MarkWest Liberty Midstream's pipeline and compressor stations, and arranging site visits and conducting several meetings with the government’s representatives, on September 13, 2016, the U.S. Attorney’s Office for the Western District of Pennsylvania rendered a declination decision, dropping its criminal investigation and declining to pursue charges in this matter.

MarkWest Liberty Midstream continues to discuss with the EPA and the State of Pennsylvania civil enforcement allegations associated with permitting or other related regulatory obligations for its launcher/receiver and compressor station facilities in the region. In connection with these discussions, MarkWest Liberty Midstream received an initial proposal from the EPA to settle all civil claims associated with this matter for the combination of a proposed cash penalty of approximately $2.4 million and proposed supplemental environmental projects with an estimated cost of approximately $3.6 million. MarkWest Liberty Midstream has submitted a response asserting that this action involves novel issues surrounding primarily minor source emissions from facilities that the agencies themselves considered de minimis and were not the subject of regulation and consequently that the settlement proposal is excessive. In connection with these negotiations, MarkWest Liberty Midstream has received a revised settlement proposal from the EPA which proposes to lower the proposed cash penalty to approximately $1.24 million and the estimated cost of proposed supplemental environmental projects to an estimated cost of approximately $1.6 million. MarkWest Liberty Midstream will continue to negotiate with EPA regarding the amount and scope of the proposed settlement.

~~The Partnership~~MPLX is involved in ~~a number of other~~ environmental enforcement matters arising in the ordinary course of business. While the outcome and impact on MPLX LP cannot be predicted with certainty, management believes the resolution of these environmental matters will not, individually or collectively, have a material adverse effect on its consolidated results of operations, financial position or cash flows.

Other Lawsuits – The Partnership, MarkWest, MarkWest Liberty Midstream, MarkWest Liberty Bluestone, L.L.C., Ohio Fractionation and MarkWest Utica EMG (collectively, the “MPLX Parties”) are parties to various lawsuits with Bilfinger Westcon, Inc. (“Westcon”) that were instituted in 2016 and 2017 in the Court of Common Pleas in Butler County,

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Pennsylvania, the Circuit Court in Wetzel County, West Virginia, and the Court of Common Pleas in Harrison County, Ohio. The lawsuits relate to disputes regarding construction work performed by Westcon at the Bluestone, Mobley and Cadiz processing complexes in Pennsylvania, West Virginia and Ohio, respectively, and the Hopedale fractionation complex in Ohio. With respect to work performed by Westcon at the Mobley and Bluestone processing complexes, one or more of the MPLX Parties have asserted breach of contract, fraud, and with respect to work performed at the Mobley processing complex, MarkWest Liberty Midstream has also asserted negligent misrepresentation claims against Westcon. Westcon has also asserted claims against one or more of the MPLX Parties regarding these construction projects for breach of contract, unjust enrichment, promissory estoppel, fraud and constructive fraud, tortious interference with contractual relations, and civil conspiracy. Collectively, in the several cases, the MPLX Parties seek in excess of $10 million, plus an unspecified amount of punitive damages. Collectively, in the several cases, Westcon seeks in excess of $40 million, plus an unspecified amount of punitive damages. It is possible that, in connection with these lawsuits, the MPLX Parties will incur material amounts of damages. While the ultimate outcome and impact to MPLX cannot be predicted with certainty, and MPLX is not able to estimate a reasonably possible loss (or range of loss), if any, for these matters, MPLX believes the resolution of these claims will not have a material adverse effect on its consolidated financial position, results of operations, or cash flows.

In 2003, the State of Illinois brought an action against the Premcor Refining Group, Inc. (“Premcor”) and Apex Refining Company (“Apex”) asserting claims for environmental cleanup related to the refinery owned by these entities in the Hartford/Wood River, Illinois area. In 2006, Premcor and Apex filed third-party complaints against numerous owners and operators of petroleum products facilities in the Hartford/Wood River, Illinois area, including Marathon Pipe Line LLC (“MPL”). These complaints, which have been amended since filing, assert claims of common law nuisance and contribution under the Illinois Contribution Act and other laws for environmental cleanup costs that may be imposed on Premcor and Apex by the State of Illinois. On September 6, 2016, the trial court approved a settlement between Apex and the State of Illinois whereby Apex agreed to settle all claims against it for a $10 million payment. Premcor filed a motion for permissive appeal and requested a stay to the proceeding until the motion is ruled upon. Premcor reached a settlement with the State of Illinois in the second quarter of 2018, which has been objected to ~~this ruling~~by certain third-party defendants, including MPL, and is ~~seeking an appeal. There are several~~subject to court approval. Several third-party defendants in the litigation ~~and~~including MPL ~~has~~have asserted cross-claims in contribution against the various third-party defendants. This litigation is currently pending in the Third Judicial Circuit Court, Madison County,

Illinois. The trial concerning Premcor’s claims against third-party defendants, including MPL, previously scheduled to commence September 10, 2018, has been postponed and a new trial date has not been set. While the ultimate outcome of these litigated matters remains uncertain, neither the likelihood of an unfavorable outcome nor the ultimate liability, if any, with respect to this matter can be determined at this time and ~~the Partnership~~MPLX is unable to estimate a reasonably possible loss (or range of ~~losses)~~loss) for this litigation. Under the omnibus agreement, MPC will indemnify ~~the Partnership~~MPLX for the full cost of any losses should MPL be deemed responsible for any damages in this lawsuit.

~~The Partnership~~MPLX is also a party to a number of other lawsuits and other proceedings arising in the ordinary course of business. While the ultimate outcome and impact to ~~the Partnership~~MPLX cannot be predicted with certainty, ~~the Partnership~~MPLX believes the resolution of these other lawsuits and proceedings will not have a material adverse effect on its consolidated financial position, results of operations or cash flows.

Guarantees– Over the years, ~~the Partnership~~MPLX has sold various assets in the normal course of its business. Certain of the related agreements contain performance and general guarantees, including guarantees regarding inaccuracies in representations, warranties, covenants and agreements, and environmental and general indemnifications that require ~~the Partnership~~MPLX to perform upon the occurrence of a triggering event or condition. These guarantees and indemnifications are part of the normal course of selling assets. ~~The Partnership~~MPLX is typically not able to calculate the maximum potential amount of future payments that could be made under such contractual provisions because of the variability inherent in the guarantees and indemnities. Most often, the nature of the guarantees and indemnities is such that there is no appropriate method for quantifying the exposure because the underlying triggering event has little or no past experience upon which a reasonable prediction of the outcome can be based.

In connection with our approximate 9 percent indirect interest in a joint venture that owns and operates the Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline projects, collectively referred to as the Bakken Pipeline system, we have entered into a Contingent Equity Contribution Agreement whereby MPLX LP, along with the other joint venture owners in the Bakken Pipeline system, have agreed to make equity contributions to the joint venture upon certain events occurring to allow the entities that own and operate the Bakken Pipeline system to satisfy their senior note payment obligations. The senior notes were issued to repay amounts owed by the pipeline companies to fund the cost of construction of Bakken Pipeline system. As of March 31, 2019, our maximum potential undiscounted payments under the Contingent Equity Contribution Agreement was approximately $230 million.

Contractual Commitments and Contingencies – At ~~September 30, 2017, the Partnership’s~~March 31, 2019, MPLX’s contractual commitments to acquire property, plant and equipment totaled ~~$520~~$726 million. These commitments ~~at September 30, 2017~~ were primarily related to plant expansion projects for the

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Marcellus and Southwest Operations. In addition, from time to time and in the ordinary course of business, ~~the Partnership~~MPLX and its affiliates provide guarantees of ~~the Partnership’s~~MPLX’s subsidiaries payment and performance obligations in the G&P segment. Certain natural gas processing and gathering arrangements require ~~the Partnership~~MPLX to construct new natural gas processing plants, natural gas gathering pipelines and NGL pipelines and contain certain fees and charges if specified construction milestones are not achieved for reasons other than force majeure. In certain cases, certain producers may have the right to cancel the processing arrangements if there are significant delays that are not due to force majeure. As of ~~September 30, 2017,~~March 31, 2019, management does not believe there are any indications that ~~the Partnership~~MPLX will not be able to meet the construction milestones, that force majeure does not apply or that such fees and charges will otherwise be triggered.

21. Subsequent Events

On May 8, 2019, MPC, MPLX and Andeavor Logistics LP (“ANDX”) announced that MPLX and ANDX have entered into a definitive merger agreement whereby MPLX will acquire ANDX in a unit-for-unit transaction. Under the terms of the merger agreement, ANDX public unitholders will receive 1.135 MPLX common units for each ANDX common unit held and MPC will receive 1.0328 MPLX common units for each ANDX common unit held. The MPLX common units to be issued in addition to the assumption of ANDX debt and ANDX preferred units represents an equity value of approximately $9 billion and an enterprise value of approximately $14 billion for the acquired entity. MPLX’s acquisition of ANDX will be treated as a common control transaction, which requires the recognition of assets and liabilities acquired using MPC’s historical basis as of October 1, 2018.

The transaction has been approved by MPLX’s and ANDX’s respective Conflicts Committees and both Boards of Directors. Subject to the satisfaction of customary closing conditions and receipt of regulatory approvals, the transaction is expected to close in the second half of 2019.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited financial statements and accompanying footnotes included under Item 1. Financial Statements and in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2016, as updated by our Current Report on Form 8-K filed on May 1, 2017.~~2018.

Disclosures Regarding Forward-Looking Statements

Management’s Discussion and Analysis of Financial Condition and Results of Operations includes various forward-looking statements concerning trends or events potentially affecting our business. You can identify our forward-looking statements by words such as “anticipate,” “believe,” ~~“estimate,~~“could,” ~~“objective,~~“design,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “imply,” “intend,” “may,” “objective,” “opportunity,” “outlook,” “plan,” “position,” “potential,” “predict,” “project,” ~~“potential,~~“prospective,” “pursue,” “seek,” “should,” “strategy,” “target,” ~~“could,~~“will,” ~~“may,” “should,” “would,” “will”~~“would” or other similar expressions that convey the uncertainty of future events or outcomes. In accordance with “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, these statements are accompanied by cautionary language identifying important factors, though not necessarily all such factors, ~~which~~that could cause future outcomes to differ materially from those set forth in the forward-looking statements. We undertake no obligation to update any forward-looking statements except to the extent required by applicable law.

Forward-looking statements include, but are not limited to, statements that relate to, or statements that are subject to risks, contingencies or uncertainties that relate to:

the proposed transaction between MPLX and ANDX;

future levels of revenues and other income, income from operations, net income attributable to MPLX LP, earnings per unit, Adjusted EBITDA or DCF (see the Non-GAAP Financial Information section below for the definitions of Adjusted EBITDA and DCF);

the regional, national and worldwide availability and pricing of refined products, crude oil, natural gas, NGLs and other feedstocks;

the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products;

our ability to manage disruptions in credit markets or changes to our credit rating;

anticipated levels of drilling activity, production rates and volumes of throughput of crude oil, natural gas, NGLs, refined products or other hydrocarbon-based products;

future levels of capital, environmental or maintenance expenditures, general and administrative and other expenses;

the success or timing of completion of ongoing or anticipated capital or maintenance projects;

the reliability of processing units and other equipment;

expectations regarding joint venture arrangements and other acquisitions, including the dropdowns completed by MPC, or divestitures of assets;

business strategies, growth opportunities and expected investment;

the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to pay distributions and access debt on commercially reasonable terms;

the effect of restructuring or reorganization of business components;

the potential effects of judicial or other proceedings on our business, financial condition, results of operations and cash flows;

the potential effects of changes in tariff rates on our business, financial condition, results of operations and cash flows;

continued or further volatility in and/or degradation of general economic, market, industry or business conditions;

compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder;

our ability to successfully execute our business plans, growth strategy and self-funding model;

capital market conditions, including the cost of capital, and our ability to raise adequate capital to execute our business plan and implement our growth strategy; and

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the anticipated effects of actions of third parties such as competitors; or federal, foreign, state or local regulatory authorities; or plaintiffs in litigation.

Our forward-looking statements are not guarantees of future performance and you should not rely unduly on them, as they involve risks, uncertainties and assumptions that we cannot predict. Material differences between actual results and any future performance suggested in our forward-looking statements could result from a variety of factors, including the following:

volatility or degradation in general economic, market, industry or business conditions;

risks and uncertainties associated with intangible assets, including any future goodwill or intangible assets impairment charges;

availability and pricing of domestic and foreign supplies of natural gas, NGLs and crude oil and other feedstocks;

availability and pricing of domestic and foreign supplies of refined products such as gasoline, diesel fuel, jet fuel, home heating oil and petrochemicals;

foreign imports and exports of crude oil, refined products, natural gas and NGLs;

completion of midstream infrastructure by competitors;

midstream and refining industry overcapacity or under capacity;

changes in the cost or availability of third-party vessels, pipelines, railcars and other means of transportation for crude oil, natural gas, NGLs, feedstocks and refined products;

the price, availability and acceptance of alternative fuels and alternative-fuel vehicles and laws mandating such fuels or vehicles;

fluctuations in consumer demand for refined products, natural gas and NGLs, including seasonal fluctuations;

changes to the expected construction costs and timing of projects and planned investments, and our ability to obtain regulatory and other approvals with respect thereto;

political and economic conditions in nations that consume refined products, natural gas and NGLs, including the United States, and in crude oil producing regions, including the Middle East, Africa, Canada and South America;

actions taken by our competitors, including pricing adjustments and the expansion and retirement of pipeline capacity, processing, fractionation and treating facilities in response to market conditions;

changes in fuel and utility costs for our facilities;

failure to realize the benefits projected for capital projects, or cost overruns associated with such projects;

the ability to achieve strategic and financial objectives, including with respect to proposed projects and transactions;

accidents or other unscheduled shutdowns affecting our machinery, pipelines, processing, fractionation and treating facilities or equipment, or those of our suppliers or customers;

unusual weather conditions and natural disasters;

disruptions due to equipment interruption or failure, including electrical shortages and power grid failures;

acts of war, terrorism or civil unrest that could impair our ability to gather, process, fractionate or transport crude oil, natural gas, NGLs or refined products;

state and federal environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance;

adverse changes in laws including with respect to tax and regulatory matters;

modifications to earnings and distribution growth objectives;

rulings, judgments or settlements and related expenses in litigation or other legal, tax or regulatory matters, including unexpected environmental remediation costs, in excess of any reserves or insurance coverage;

the suspension, reduction or termination of MPC’s obligations under MPLX’s commercial agreements;

political pressure and influence of environmental groups upon policies and decisions related to the production, gathering, refining, processing, fractionation, transportation and marketing of crude oil or other feedstocks, refined products, natural gas, NGLs or other hydrocarbon-based products;

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labor and material shortages;

changes to our capital budget;

the ability and willingness of parties with whom we have material relationships to perform their obligations to us;

negative capital market conditions, including an increase of the current yield on MPLX LP common units, adversely affecting MPLX LP’s ability to meet its distribution growth guidance;

changes in the credit ratings assigned to our debt securities and trade credit, changes in the availability of unsecured credit, changes affecting the credit markets generally and our ability to manage such changes; and

For additional risk factors affecting our business, see Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

~~PARTNERSHIP~~MPLX OVERVIEW

We are a diversified, ~~growth-oriented master limited partnership~~large-cap MLP formed by MPC, ~~to own, operate, develop~~that owns and ~~acquire~~operates midstream energy infrastructure ~~assets.~~and logistics assets, and provides fuels distribution services. We are engaged in ~~the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and~~ the transportation, storage and distribution of crude oil and refined petroleum ~~products.~~products; gathering, processing and transportation of natural gas; and the gathering, transportation, fractionation, storage and marketing of NGLs. Our operations are conducted in our Logistics and Storage and Gathering and Processing segments.

SIGNIFICANT FINANCIAL AND OTHER HIGHLIGHTS

Significant financial and other highlights for the three months ended ~~September 30, 2017~~March 31, 2019 are listed below. Refer to Results of Operations and Liquidity and Capital Resources for further details.

L&S ~~segment operating income attributable to MPLX LP~~Segment Adjusted EBITDA increased approximately ~~$89~~$122 million, or 7228 percent, for the three months ended ~~September 30, 2017~~March 31, 2019 compared to the same period of ~~2016 due~~2018. This increase is primarily attributable to ~~$74 million from~~ the inclusion of ~~HST, WHC~~Refining Logistics and ~~MPLXT results after our acquisition~~Fuels Distribution for the full first quarter of 2019 but only the last two months of the first quarter in 2018. This had an impact of approximately $68 million. Also contributing to the increase was higher transportation volumes, slightly offset by lower rates resulting in a $37 million increase in L&S Segment Adjusted EBITDA. The remainder of the increase is related to various factors including increased volume deficiency revenue, additional storage capacity and additional marine vessels as ~~of March 1, 2017and$7 million from~~well as the acquisition of the ~~Ozark pipeline.~~

Mt. Airy terminal in the third quarter of 2018.

G&P ~~segment operating income attributable to MPLX LP~~Segment Adjusted EBITDA increased approximately ~~$56~~$48 million, or 1915 percent, for the three months ended ~~September 30, 2017~~March 31, 2019 compared to the same period of ~~2016.~~2018. The increase can be attributed to additional fees from increased volumes which were partially offset by price impacts. The G&P segment realized ~~product price increases and~~ volume increases during the ~~third~~first quarter of ~~2017~~2019 primarily due to ~~expansions~~continued growth in the Marcellus and Southwest as ~~well as growth~~volumes continue to increase at recently completed plants/expansions when comparing first quarter 2019 to the ~~Sherwood, Majorsville and Bluestone (previously referred to as Keystone) plants.~~same period in 2018. Compared to the ~~third~~first quarter of ~~2016,~~2018, processing volumes were up approximately 1118 percent, fractionated volumes were up approximately 1417 percent and gathering volumes were up approximately 1319 percent.

~~Additional highlights for the three and nine months ended September 30, 2017, including a look ahead to anticipated growth, are listed below.~~Other Highlights

~~Acquisition and Growth Activities~~

On September 27, 2017, MPC authorized an offer of MPLX Fuels Distributions LLC and MPLX Refining Logistics LLC to MPLX LP in exchange for cash and limited and general partnership units. MPLX Fuels Distribution LLC is structured to provide a broad range of scheduling and marketing services as MPC’s sole and exclusive agent. MPLX Refining Logistics LLC contains the integrated tank farm assets that support MPC’s refining operations. These essential logistics assets include: approximately 56 million barrels storageProcessing capacity (crude, finished products and intermediates), 619 tanks, 32 rail and truck racks, and 18 docks and gasoline blenders. This offer, which is projected to contribute approximately $1.0 billion of annual EBITDA, is currently under reviewat our Omega I plant was expanded by the conflicts committee of the board of directors of our general partner. The transaction is expected to close no later than the end of the first quarter of 2018. If approved, this acquisition will complete a series of planned acquisitions of assets from MPC that began in early 2017. The combined sum of the three transactions totals an estimated $1.4 billion of annual EBITDA. The stable, fee-based earnings from these acquired assets add both scale and diversification to our portfolio of high-quality midstream assets.

On September 1, 2017, we acquired joint-interest ownerships in certain pipelines and storage facilities from MPC for $420 million in cash and the issuance of $653 million in MPLX LP equity. The acquired ownership interests include a 35 percent ownership interest in Illinois Extension, a 40.7 percent ownership interest in LOOP, a 58.52 percent ownership interest in LOCAP, and a 24.51 percent ownership interest in Explorer. The assets held by these entities include a 1,830-mile refined products pipeline, storage facilities, pump stations, and an offshore deep water oil port located along the Gulf Coast. The infrastructure serves primarily the Midwest and Gulf Coast regions of the United States. There is no income associated with the Joint-Interest Acquisition included in the Consolidated Statements of Income since the September 1, 2017 acquisition date, as we account for these equity method investments in arrears using the most recently available information.

On March 1, 2017, we acquired certain pipeline, storage and terminal assets from MPC for $1.5 billion in cash and the issuance of $503 million in MPLX LP equity. As of the acquisition date, the assets consisted of 174 miles of crude oil pipelines and 430 miles of refined products pipelines, nine butane and propane storage caverns located in Michigan with approximately 1.8 million barrels of NGL storage capacity, 59 terminals for the receipt, storage, blending, additization, handling and redelivery of refined petroleum products, along with one leased terminal and partial ownership interest in two terminals. Collectively, the 62 terminals had a combined total shell capacity of approximately 23.6 million barrels. The terminal facilities are located primarily in the Midwest, Gulf Coast and Southeast regions of the United States.

On March 1, 2017, we purchased the 433-mile, 22-inch Ozark crude oil pipeline for $219 million. The pipeline is capable of transporting approximately 230 mbpd and expands the footprint of our logistics and storage segment by connecting Cushing, Oklahoma-sourced volumes to our extensive Midwest pipeline network. An expansion project to increase the line's capacity to approximately 345 mbpd is expected to be completed in the second quarter of 2018.

On February 15, 2017, we acquired a 9.1875 percent indirect equity interest in the Dakota Access Pipeline and Energy Transfer Crude Oil Company Pipeline projects, collectively referred to as the Bakken Pipeline system, for $500 million. The Bakken Pipeline system is currently expected to deliver in excess of 520 mbpd of crude oil from the Bakken/Three Forks production area in North Dakota to the Midwest through Patoka, Illinois and ultimately to the Gulf Coast. During the third quarter 2017, MPLX LP benefited from the first full quarter of earnings from its indirect interest in the Bakken Pipeline system. Initial cash distributions related to this investment were also received45 MMcf/d during the ~~third~~ quarter ~~2017.~~

~~On February 6, 2017, we formed a strategic joint venture with Antero Midstream~~ to process natural gas at the Sherwood Complex and fractionate natural gas liquids at the Hopedale Complex. This unique transaction strengthens our long-term relationship with the largest producer in the Appalachian Basin and provides the Partnership with substantial future growth opportunities. As part of this agreement, Antero Midstream released to the joint venture the dedication of approximately 195,000 gross operated acres located in Tyler, Wetzel and Ritchie counties of West Virginia. We contributed cash of $20 million, along with $353 million of assets, comprised of real property, equipment and facilities, including three 200120 MMcf/d gas processing plants then under construction at the Sherwood Complex. Antero Midstream contributed cash of $154 million. The joint venture commenced operations of the first new facility during the first quarter of 2017, the second new facility during the third quarter of 2017 and expects to commence operations of the third new facility during the first quarter of 2018. Construction of a fourth new facility was announced during the first quarter of 2017 and is expected to commence operations in late 2018. In addition to the four new processing facilities, the joint venture contemplates the development of up to another seven processing facilities to support Antero Resources Corporation, which would be located at both the Sherwood Complex and a new location in West Virginia. At the Hopedale Complex, the largest fractionation facility in the Marcellus and Utica shales, the joint venture will also support the growth of Antero Resources Corporation’s NGL production by investing in 20 mbpd of existing fractionation capacity, with options to invest in future fractionation expansions.

~~Financing Activities~~

On July 21, 2017, the Partnership entered into a credit agreement to replace its previous $2.0 billion five-year bank revolving credit facility with a $2.25 billion five-year bank revolving credit facility that expires in July 2022. The financial covenants and the interest rate terms contained in the new credit agreement are substantially the same as those contained in the previous bank revolving credit facility. Additionally, on July 19, 2017, MPLX LP prepaid the entire outstanding principal amount of its $250 million term loan with cash on hand.

~~On February 10, 2017, we completed a public offering of $2.25 billion aggregate principal amount of senior notes (the “New Senior Notes”).~~

During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2019, we ~~issued an aggregate of 13,846,998 commons~~did not issue any common units under our ATM ~~Program, generating net proceeds of approximately $473 million.~~Program. As of ~~September 30, 2017,~~March 31, 2019, $1.7 billion of common units remain available for issuance through the ATM Program.

RECENT DEVELOPMENTS

On May 8, 2019, MPC, MPLX and ANDX announced that MPLX and ANDX have entered into a definitive merger agreement whereby MPLX will acquire ANDX in a unit-for-unit transaction at a blended exchange ratio of 1.07x. This represents an equity value of approximately $9 billion and an enterprise value of $14 billion for the acquired entity. Under the terms of the merger agreement, ANDX public unitholders will receive 1.135 MPLX common units for each ANDX common unit held, representing a premium of 7.3%, and MPC will receive 1.0328 MPLX common units for each ANDX common unit held, representing a 2.4% discount, based on May 2, 2019 closing prices.

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The anticipated transaction simplifies MPLX and ANDX into a single listed entity to create a leading, large-scale, diversified midstream company anchored by fee-based cash flows. The transaction is projected to be immediately accretive to MPLX unitholders on distributable cash flow. The combined entity will have an expanded geographic footprint that is expected to enhance its long-term growth opportunities and the sustainable cash flow profile of the business.

The above discussion contains forward-looking statements with respect to the proposed transaction between MPLX and ANDX. Factors that could affect the proposed transaction between MPLX and ANDX include, but are not limited to, the ability to complete the proposed transaction between MPLX and ANDX on the proposed terms and timetable; the ability to satisfy various conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain regulatory approvals for the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entity in connection with the consummation of the proposed transaction; the risk that anticipated opportunities and any other synergies from or anticipated benefits of the proposed transaction may not be fully realized or may take longer to realize than expected, including whether the proposed transaction will be accretive within the expected timeframe or at all; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDX; the amount and timing of future distributions; negative capital market conditions, including an increase of the current yield on common units; the ability to achieve strategic and financial objectives, including with respect to distribution coverage, future distribution levels, proposed projects and completed transactions; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt on commercially reasonable terms, and the ability to successfully execute business plans, growth strategies and self-funding models; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects and planned investments, and the ability to obtain regulatory and other approvals with respect thereto; completion of midstream infrastructure by 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 MPLX’s and ANDX’s commercial agreements; modifications to financial policies, capital budgets, and earnings and distributions; the ability to manage disruptions in credit markets or changes to credit ratings; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; other risk factors inherent to MPLX’s and ANDX’s industry; and risks related to MPC. For additional information on forward-looking statements and risks that can affect our business, see “Disclosures Regarding Forward-Looking Statements” and “Risk Factors” herein, together with Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2018.

NON-GAAP FINANCIAL INFORMATION

Our management uses a variety of financial and operating metrics to analyze our performance. These metrics are significant factors in assessing our operating results and profitability and include the non-GAAP financial measures of Adjusted EBITDA and DCF. The amount of Adjusted EBITDA and DCF generated is considered by the board of directors of our general partner in approving ~~the Partnership’s~~MPLX’s cash distributions.

We define Adjusted EBITDA as net income adjusted ~~for~~for: (i) depreciation and amortization; (ii) ~~provision~~ provision/(benefit) for income taxes; (iii) amortization of deferred financing costs; (iv) extinguishment of debt; (v) non-cash equity-based compensation; ~~(v)~~(vi) impairment expense; ~~(vi)~~(vii) net interest and other financial costs; ~~(vii) (income) loss~~(viii) income/(loss) from equity method investments; ~~(viii) distributions from unconsolidated subsidiaries considering principal payments of debt and certain capital expenditures;~~ (ix) distributions ~~of cash received from Joint-Interest Acquisition entities~~and adjustments related to ~~MPC;~~equity method investments; (x) unrealized derivative ~~losses (gains)~~gains/(losses); ~~and~~ (xi) acquisition ~~costs.~~costs; (xii) noncontrolling interest; and (xiii) other adjustments as deemed necessary. We also use DCF, which we define as Adjusted EBITDA adjusted ~~for~~for: (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and ~~(iv)~~(v) other non-cash items. ~~The Partnership~~MPLX makes a distinction between realized orand unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded.

We believe that the presentation of Adjusted EBITDA and DCF provides useful information to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to Adjusted EBITDA and DCF are net income and net cash provided by operating activities. Adjusted EBITDA and DCF should not be considered alternatives to

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GAAP net income or net cash provided by operating activities. Adjusted EBITDA and DCF have important limitations as analytical tools because they exclude some but not all items that affect net income and net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA and DCF should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. Additionally, because Adjusted EBITDA and DCF may be defined differently by other companies in our industry, our definitions of Adjusted EBITDA and DCF may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. For a reconciliation of Adjusted EBITDA and DCF to their most directly comparable measures calculated and presented in accordance with GAAP, see Results of Operations.

Management ~~evaluates contract performance on~~also utilizes Segment Adjusted EBITDA in evaluating the ~~basis of net operating margin, a non-GAAP~~ financial measure, which is defined as segment revenue less segment purchased product costs less realized derivative gains (losses) related to purchased product costs. These charges have been excluded for the purpose of enhancing the understanding by both management and investors of the underlying baseline operating performance of our contractual arrangements, which management uses to evaluate our financial performance for purposes of planning and forecasting. Net operating margin does not have any standardized definition and, therefore, is unlikely to be comparable to similar measures presented by other reporting companies. Net operating margin results should not be evaluated in isolation of, or as a substitute for, our financial results prepared in accordance with GAAP. Our use of net operating margin and the underlying methodology in excluding certain charges is not necessarily an indication of the results of operations expected in the future, or that we will not, in fact, incur such charges in future periods.

~~In evaluating our financial performance, management utilizes the segment performance measures, segment revenues and segment operating income, including total segment operating income.~~segments. The use of ~~these~~this measures allows investors to understand how management evaluates financial performance to make operating decisions and allocate resources. See Note 9 of the Notes to Consolidated Financial Statements for the reconciliations of these segment measures, including total segment operating income, to their respective most directly comparable GAAP measures.

COMPARABILITY OF OUR FINANCIAL RESULTS

Our acquisitions have impacted comparability of our financial results (see Note 3 of the Notes to Consolidated Financial Statements).

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RESULTS OF OPERATIONS

The following ~~table~~tables and discussion is a summary of our results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2019 and ~~2016,~~2018, including a reconciliation of Adjusted EBITDA and DCF from ~~net income~~“Net income” and ~~net~~“Net cash provided by operating activities,” the most directly comparable GAAP financial measures. ~~Prior period financial information has been retrospectively adjusted for the acquisition of HST, WHC and MPLXT.~~


	Three Months Ended September 30,							Nine Months Ended September 30,								Three Months Ended March 31,
(In millions)	2017		2016		Variance			2017		2016			Variance			2019			2018		Variance
Total revenues and other income	$	980	$	838	$	142		$	2,782	$	2,181		$	601		$	1,646		$	1,420	$	226
Costs and expenses:
Cost of revenues (excludes items below)	129		122		7			381		329			52			210			206		4
Purchased product costs	170		117		53			441		310			131			194			187		7
Rental cost of sales	19		13		6			44		42			2			37			29		8
Rental cost of sales - related parties	—		—		—			1		1			—			3			1		2
Purchases - related parties	114		109		5			330		286			44			212			177		35
Depreciation and amortization	164		151		13			515		438			77			211			176		35
Impairment expense	—		—		—			—		130			(130		)
General and administrative expenses	59		56		3			174		172			2			82			69		13
Other taxes	14		12		2			40		37			3			19			18		1
Total costs and expenses	669		580		89			1,926		1,745			181			968			863		105
Income from operations	311		258		53			856		436			420			678			557		121
Related party interest and other financial costs	1		—		1			1		1			—			1			1		—
Interest expense, net of amounts capitalized	77		51		26			217		158			59			156			112		44
Other financial costs	15		13		2			40		37			3			14			17		(3		)
Income before income taxes	218		194		24			598		240			358			507			427		80
Provision (benefit) for income taxes	1		—		1			3		(12		)	15
(Benefit)/provision for income taxes																(2		)	4		(6		)
Net income	217		194		23			595		252			343			509			423		86
Less: Net income attributable to noncontrolling interests	1		2		(1		)	3		3			—			6			2		4
Less: Net income attributable to Predecessor	—		51		(51		)	36		149			(113		)
Net income attributable to MPLX LP	$	216	$	141	$	75		$	556	$	100		$	456		503			421		82

Adjusted EBITDA attributable to MPLX LP⁽¹⁾	$	538	$	375	$	163		$	1,435	$	1,028		$	407		930			760		170
DCF⁽¹⁾	442		301		141			1,183		822			361			757			619		138
DCF attributable to GP and LP unitholders⁽¹⁾	426		285		141			1,134		797			337			$	737		$	603	$	134


(1)	Non-GAAP financial measure. See the following tables for reconciliations to the most directly comparable GAAP measures.

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Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 Variance 2017 2016 Variance
Reconciliation of Adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders from Net income:
Net income $ 217
$ 194
$ 23
$ 595
$ 252
$ 343
Depreciation and amortization 164
151
13
515
438
77
Provision (benefit) for income taxes 1
—
1
3
(12 ) 15
Amortization of deferred financing costs 13
11
2
38
34
4
Non-cash equity-based compensation 4
3
1
10
9
1
Impairment expense —
—
—
—
130
(130 )
Net interest and other financial costs 80
53
27
220
162
58
(Income) loss from equity method investments (23 ) (6 ) (17 ) (29 ) 72
(101 )
Distributions from unconsolidated subsidiaries 70
33
37
136
111
25
Distributions of cash received from Joint-Interest Acquisition entities to MPC (13 ) —
(13 ) (13 ) —
(13 )
Other adjustments to equity method investment distributions 8
—
8
8
—
8
Unrealized derivative losses (gains)⁽¹⁾
17
2
15
(2 ) 23
(25 )
Acquisition costs 2
—
2
6
(1 ) 7
Adjusted EBITDA 540
441
99
1,487
1,218
269
Adjusted EBITDA attributable to noncontrolling interests (2 ) (2 ) —
(5 ) (3 ) (2 )
Adjusted EBITDA attributable to Predecessor⁽²⁾
—
(64 ) 64
(47 ) (187 ) 140
Adjusted EBITDA attributable to MPLX LP 538
375
163
1,435
1,028
407
Deferred revenue impacts 8
1
7
25
8
17
Net interest and other financial costs (80 ) (53 ) (27 ) (220 ) (162 ) (58 )
Maintenance capital expenditures (24 ) (25 ) 1
(59 ) (58 ) (1 )
Other —
(2 ) 2
—
(2 ) 2
Portion of DCF adjustments attributable to Predecessor⁽²⁾
—
5
(5 ) 2
8
(6 )
DCF 442
301
141
1,183
822
361
Preferred unit distributions (16 ) (16 ) —
(49 ) (25 ) (24 )
DCF attributable to GP and LP unitholders $ 426
$ 285
$ 141
$ 1,134
$ 797
$ 337

Nine Months Ended September 30,
(In millions) 2017 2016 Variance
Reconciliation of Adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders from Net cash provided by operating activities:
Net cash provided by operating activities $ 1,338
$ 975
$ 363
Changes in working capital items (41 ) 59
(100 )
All other, net (43 ) (18 ) (25 )
Non-cash equity-based compensation 10
9
1
Net gain on disposal of assets 1
1
—
Net interest and other financial costs 220
162
58
Current income taxes 1
4
(3 )
Asset retirement expenditures 2
4
(2 )
Unrealized derivative (gains) losses⁽¹⁾
(2 ) 23
(25 )
Acquisition costs 6
(1 ) 7
Distributions of cash received from Joint-Interest Acquisition entities to MPC (13 ) —
(13 )
Other adjustments to equity method investment distributions 8
—
8
Adjusted EBITDA 1,487
1,218
269
Adjusted EBITDA attributable to noncontrolling interests (5 ) (3 ) (2 )
Adjusted EBITDA attributable to Predecessor⁽²⁾
(47 ) (187 ) 140
Adjusted EBITDA attributable to MPLX LP 1,435
1,028
407
Deferred revenue impacts 25
8
17
Net interest and other financial costs (220 ) (162 ) (58 )
Maintenance capital expenditures (59 ) (58 ) (1 )
Other —
(2 ) 2
Portion of DCF adjustments attributable to Predecessor⁽²⁾
2
8
(6 )
DCF 1,183
822
361
Preferred unit distributions (49 ) (25 ) (24 )
DCF attributable to GP and LP unitholders $ 1,134
$ 797
$ 337



	Three Months Ended March 31,
(In millions)	2019			2018			Variance
Reconciliation of Adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders from Net income:
Net income	$	509		$	423		$	86
Provision for income taxes	(2		)	4			(6		)
Amortization of deferred financing costs	13			16			(3		)
Net interest and other financial costs	158			114			44
Income from operations	678			557			121
Depreciation and amortization	211			176			35
Non-cash equity-based compensation	6			4			2
Income from equity method investments	(70		)	(61		)	(9		)
Distributions/adjustments related to equity method investments	108			90			18
Unrealized derivative losses/(gains)⁽¹⁾	4			(7		)	11
Acquisition costs	—			3			(3		)
Adjusted EBITDA	937			762			175
Adjusted EBITDA attributable to noncontrolling interests	(7		)	(2		)	(5		)
Adjusted EBITDA attributable to MPLX LP⁽²⁾	930			760			170
Deferred revenue impacts	8			9			(1		)
Net interest and other financial costs	(158		)	(114		)	(44		)
Maintenance capital expenditures	(19		)	(25		)	6
Equity method investment capital expenditures paid out	(4		)	(11		)	7
DCF	757			619			138
Preferred unit distributions	(20		)	(16		)	(4		)
DCF attributable to GP and LP unitholders	$	737		$	603		$	134

(1)

~~The Partnership~~MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded.


(2)	For the three months ended March 31, 2019, the L&S and G&P segments made up $559 million and $371 million of Adjusted EBITDA attributable to MPLX LP, respectively. For the three months ended March 31, 2018, the L&S and G&P segments made up $437 million and $323 million of Adjusted EBITDA attributable to MPLX LP, respectively.

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	Three Months Ended March 31,
(In millions)	2019			2018			Variance
Reconciliation of Adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders from Net cash provided by operating activities:
Net cash provided by operating activities	$	618		$	450		$	168
Changes in working capital items	141			178			(37		)
All other, net	4			(3		)	7
Non-cash equity-based compensation	6			4			2
Net (loss)/gain on disposal of assets	(1		)	—			(1		)
Net interest and other financial costs	158			114			44
Asset retirement expenditures	—			1			(1		)
Unrealized derivative losses/(gains)⁽¹⁾	4			(7		)	11
Acquisition costs	—			3			(3		)
Other adjustments to equity method investment distributions	7			22			(15		)
Adjusted EBITDA	937			762			175
Adjusted EBITDA attributable to noncontrolling interests	(7		)	(2		)	(5		)
Adjusted EBITDA attributable to MPLX LP⁽²⁾	930			760			170
Deferred revenue impacts	8			9			(1		)
Net interest and other financial costs	(158		)	(114		)	(44		)
Maintenance capital expenditures	(19		)	(25		)	6
Equity method investment capital expenditures paid out	(4		)	(11		)	7
DCF	757			619			138
Preferred unit distributions	(20		)	(16		)	(4		)
DCF attributable to GP and LP unitholders	$	737		$	603		$	134

(1)

MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded.


(2)	For the three months ended March 31, 2019, the L&S and G&P segments made up $559 million and $371 million of Adjusted EBITDA attributable to MPLX LP, respectively. For the three months ended March 31, 2018, the L&S and G&P segments made up $437 million and $323 million of Adjusted EBITDA attributable to MPLX LP, respectively.

Three months ended March 31, 2019 compared to three months ended March 31, 2018

Total revenues and other income increased $226 million in the first quarter of 2019 compared to the same period of 2018. This variance was due mainly to a $104 million increase from the acquisition of Refining Logistics and Fuels Distribution; increased volumes for pipeline transportation, terminals and marine of $49 million, offset by decreased transportation rates of $6 million. We also experienced higher revenues from G&P volume growth in the Marcellus, Northeast and Southwest of approximately $103 million offset by decreased pricing on product sales of approximately $52 million. Equity method investments provided a $9 million increase which was mainly attributable to growth in the Jefferson Dry Gas joint venture as a result of an increase in dry gas gathering volumes as well as the Sherwood Midstream joint venture which had additional plants coming online at the end of 2018. The remainder of the increase relates to the Mt. Airy acquisition, the Robinson Butane Cavern and the recognition of revenue related to volume deficiencies.

Cost of revenues increased $4 million in the first quarter of 2019 compared to the same period of 2018. This variance was primarily due to increased costs to operate the expanded Ozark pipeline and additional marine vessels, as well as higher repairs, maintenance and operating costs in the Southwest, partially offset by lower project spend due to the timing of projects.

Purchased product costs increased $7 million in the first quarter of 2019 compared to the same period of 2018. This variance was primarily due to an increase from unrealized losses associated with derivatives. This was driven by an increasing fractionation spread in 2019 as compared to a decreasing fractionation spread in 2018. Also contributing to the variance were

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increased volumes in the Southwest and Northeast of approximately $36 million offset by lower prices which reduced purchased product costs by approximately $39 million in the Southwest and Northeast.

Rental cost of sales increased $8 million in the first quarter of 2019 compared to the same period of 2018. This variance is primarily due to the acquisition of the Mt. Airy Terminal.

Purchases - related parties increased $35 million in the first quarter of 2019 compared to the same period of 2018. This variance is primarily due to an increase from the acquisition of Refining Logistics and Fuels Distribution with a portion also being attributable to increases in employee-related costs and inventory purchases.

Depreciation and amortization expense increased $35 million in the first quarter of 2019 compared to the same period of 2018. This variance was primarily due the acquisitions of Refining Logistics and the Mt. Airy Terminal, additions to in-service property, plant and equipment throughout 2018 and the first three months of 2019, as well as a write-down of equipment no longer in use.

General and administrative expenses increased $13 million in the first quarter of 2019 compared to the same period of 2018. This variance was primarily due to increased employee related cost as well as the acquisition of Refining Logistics and Fuels Distribution.

Net interest expense and other financial costs increased $41 million in the first quarter of 2019 compared to the same period of 2018. The increase is mainly due to increased interest and financing costs related to the new senior notes.

SEGMENT RESULTS

We classify our business in the following reportable segments: L&S and G&P. Segment Adjusted EBITDA represents Adjusted EBITDA attributable to the reportable segments. Amounts included in net income and excluded from Segment Adjusted EBITDA include: (i) depreciation and amortization; (ii) provision/(benefit) for income taxes; (iii) amortization of deferred financing costs; (iv) extinguishment of debt; (v) non-cash equity-based compensation; (vi) impairment expense; (vii) net interest and other financial costs; (viii) income/(loss) from equity method investments; (ix) distributions and adjustments related to equity method investments; (x) unrealized derivative gains/(losses); (xi) acquisition costs; (xii) noncontrolling interests; and (xiii) other adjustments as deemed necessary. These items are either: (i) believed to be non-recurring in nature; (ii) not believed to be allocable or controlled by the segment; or (iii) are not tied to the operational performance of the segment.

The tables below present information about Segment Adjusted EBITDA for the reported segments for the three months ended March 31, 2019 and 2018.

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L&S Segment



	Three Months Ended March 31,
(In millions)	2019			2018			Variance
Service revenue	$	612		$	499		$	113
Rental income	199			145			54
Product related revenue	3			2			1
Income from equity method investments	41			44			(3		)
Other income	11			12			(1		)
Total segment revenues and other income	866			702			164
Cost of revenues	95			87			8
Purchases - related parties	170			138			32
Depreciation and amortization	70			48			22
General and administrative expenses	43			35			8
Other taxes	8			9			(1		)
Segment income from operations	480			385			95
Depreciation and amortization	70			48			22
Income from equity method investments	(41		)	(44		)	3
Distributions/adjustments related to equity method investments	46			43			3
Acquisition costs	—			3			(3		)
Non-cash equity-based compensation	4			2			2
Segment adjusted EBITDA⁽¹⁾	559			437			122

Maintenance capital expenditures	$	13		$	22		$	(9	)


(1)	See the Reconciliation of Adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders from Net income table for the reconciliation to the most directly comparable GAAP measure.

Three months ended March 31, 2019 compared to three months ended March 31, 2018

Service revenue increased $113 million in the first quarter of 2019 compared to the same period of 2018. This was primarily due to an additional $65 million of revenue from the acquisition of Refining Logistics and Fuels Distribution; $37 million of revenue from increased transportation volumes, partially attributable to the completion of the Ozark expansion; $5 million from increased terminal throughput; a $5 million increase from additional marine vessels; and a $3 million increase in the recognition of revenue related to volume deficiencies. These increases were slightly offset by a decrease in transportation prices of $6 million.

Rental income increased $54 million in the first quarter of 2019 compared to the same period of 2018. This was primarily due to an additional $39 million of revenue from the acquisition of Refining Logistics, an additional $5 million from the completion of a new butane cavern, $6 million from the acquisition of the Mt. Airy Terminal, and a $2 million increase from additional marine vessels.

Cost of revenues increased $8 million in the first quarter of 2019 compared to the same period of 2018. This was primarily due to increased costs to operate new and expanded assets such as the Mt. Airy Terminal, the expanded Ozark pipeline, additional marine vessels, and the completed Robinson Butane cavern, partially offset by lower project spend due to the timing of projects.

Purchases related parties increased $32 million in the first quarter of 2019 compared to the same period of 2018. This was primarily due to the acquisition of Refining Logistics and Fuels Distribution.

Depreciation and amortization increased $22 million in the first quarter of 2019 compared to the same period of 2018. This was primarily due to the acquisitions of Refining Logistics and the Mt. Airy Terminal as well as additions to in-service property, plant and equipment throughout 2018 and the first three months of 2019.

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General and administrative expenses increased $8 million in the first quarter of 2019 compared to the same period of 2018. This was primarily due to a $4 million increase from the acquisition of Refining Logistics and Fuels Distribution as well as increased other miscellaneous expenses.

MPC Minimum Volume Commitments

During the first quarter of 2019, MPC did not ship its minimum committed volumes on certain of our pipeline systems. As a result, MPC was obligated to make deficiency payments of $10 million. We record deficiency payments as“Current liabilities - related parties” on our Consolidated Balance Sheets. In the first quarter of 2019, we recognized revenue of $16 million related to MPC’s volume deficiency credits. At March 31, 2019, the cumulative balance of “Current liabilities - related parties” on our Consolidated Balance Sheets related to volume deficiencies was $38 million. The following table presents the future expiration dates of the associated deferred revenue credits as of March 31, 2019:



(In millions)
June 30, 2019	$	7
September 30, 2019	15
December 31, 2019	10
March 31, 2020	6
Total	$	38

We will recognize revenue for the deficiency payments in future periods at the earlier of when volumes are transported in excess of the minimum quarterly volume commitments, when it becomes impossible to physically transport volumes necessary to utilize the accumulated credits or upon expiration of the make-up period. Deficiency payments are included in the determination of DCF in the period in which a deficiency occurs.

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G&P Segment



	Three Months Ended March 31,
(In millions)	2019			2018			Variance
Service revenue	$	404		$	354		$	50
Rental income	88			79			9
Product related revenue	244			253			(9		)
Income from equity method investments	29			17			12
Other income	15			15			—
Total segment revenues and other income	780			718			62
Cost of revenues	155			149			6
Purchased product costs	194			187			7
Purchases - related parties	42			39			3
Depreciation and amortization	141			128			13
General and administrative expenses	39			34			5
Other taxes	11			9			2
Segment income from operations	198			172			26
Depreciation and amortization	141			128			13
Income from equity method investments	(29		)	(17		)	(12		)
Distributions/adjustments related to equity method investments	62			47			15
Unrealized derivative loss/(gain)⁽¹⁾	4			(7		)	11
Non-cash equity-based compensation	2			2			—
Adjusted EBITDA attributable to noncontrolling interests	(7		)	(2		)	(5		)
Segment adjusted EBITDA⁽²⁾	371			323			48

Maintenance capital expenditures	$	6		$	3		$	3

(1)

MPLX makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded.


(2)	~~The Adjusted EBITDA and DCF adjustments related to Predecessor are excluded from~~See the Reconciliation of Adjusted EBITDA attributable to MPLX LP and DCF ~~prior~~attributable to GP and LP unitholders from Net income table for the reconciliation to the ~~acquisition dates.~~most directly comparable GAAP measure.

Three months ended ~~September 30, 2017~~March 31, 2019 compared to three months ended ~~September 30, 2016~~March 31, 2018

~~Total revenues and other income~~Service revenue increased ~~$142~~$50 million in the ~~third~~first quarter of ~~2017~~2019 compared to the same period of ~~2016.~~2018. This ~~variance~~ was primarily due ~~mainly~~ to ~~increased pricing on product sales of approximately $54 million, offset by an increased unrealized derivative loss of $10 million,~~ higher ~~revenues~~fees from ~~volume growth of $49 million~~higher volumes in the Marcellus and Southwest.

Rental income increased $9 million in the first quarter of 2019 compared to the same period of 2018. This was primarily due to fees from higher volumes in the Marcellus.

Product related revenue decreased $9 million in the first quarter of 2019 compared to the same period of 2018. This was primarily due to lower prices in the Southwest, ~~areas,higher crude~~Northeast and ~~product transportation volumes~~Marcellus of ~~$14~~$52 million ~~a $19~~offset by volume increases of $44 million ~~increase~~in the same regions.

Income from ~~the acquisition of the Ozark pipeline, a $17 million increase from our~~ equity method investments ~~mainly~~increased $12 million in the first quarter of 2019 compared to the same period of 2018. This was primarily due to growth in the ~~acquisition~~Jefferson Dry Gas joint venture as a result of an ~~equity interest~~increase in ~~the Bakken Pipeline system, the addition of~~dry gas gathering volumes as well as growth in the Sherwood Midstream joint venture ~~during 2017 and increased dry gas gathering volumes for certain~~due to additional plants coming online at the end of ~~our equity method investments.~~2018.

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Cost of revenues increased $7$6 million in the ~~third~~first quarter of ~~2017~~2019 compared to the same period of ~~2016.~~2018. This ~~variance~~ was primarily due to higher repairs and maintenance and operating costs in the ~~acquisition of the Ozark pipeline.~~

Southwest.

Purchased product costs increased ~~$53~~$7 million in the ~~third~~first quarter of ~~2017~~2019 compared to the same period of ~~2016.~~2018. This ~~variance~~ was primarily due to lower prices of $39 million, partially offset by higher ~~NGL and gas prices~~volumes of $36 million ~~and increased volumes of $10 million, primarily~~ in the Southwest ~~area, as well as~~and Northeast. In addition, there was an increase from unrealized losses associated with derivatives which was driven by an increasing fractionation spread in ~~the unrealized loss of $6 million, of which~~2019 as compared to a ~~majority is related to our Natural Gas Embedded Derivative.~~decreasing fractionation spread in 2018.

Depreciation and amortization ~~expense~~ increased $13 million in the ~~third~~first quarter of ~~2017~~2019 compared to the same period of ~~2016.~~2018. This ~~variance~~ was primarily due to additions to in-service property, plant and equipment ~~as well as approximately $2 million of accelerated depreciation related to adjustments of certain assets’ useful life.~~

~~Net interest expense~~throughout 2018 and ~~other financial costs increased $28 million in the third quarter of 2017 compared to the same period of 2016. The increase is mainly due to the New Senior Notes issued in February 2017.~~

~~Nine months ended September 30, 2017 compared to nine months ended September 30, 2016~~

Total revenues and other income increased $601 million in the first nine months of 2017 compared to the same period of 2016. This variance was due mainly to the inclusion of $103 million of revenue generated by MPLXT and its subsidiaries since it was not formed as a business until April 1, 2016, ~~increased pricing on product sales of approximately $177 million as well as higher revenues from volume growth of $146 million in the Marcellus and the Southwest areas~~, ~~higher crude and product transportation volumes of $28 million~~, ~~$45 million from the acquisition of the Ozark pipeline~~and a $12 million increase from our equity method investments. The nine months ended September 30, 2016 also included an impairment expense of $89 million related to our investment in Ohio Condensate as referenced in our Annual Report on Form 10-K for the year ended December 31, 2016, as updated by our Current Report on Form 8-K filed on May 1, 2017.

~~Cost of revenues increased $52 million in the first nine months of 2017 compared to the same period of 2016. This variance was primarily due to $20 million from the inclusion of MPLXT~~, ~~as well as $20 million from the acquisition of the Ozark pipeline and an increase in expenses related to the timing of projects.~~

Purchased product costs increased $131 million in the first nine months of 2017 compared to the same period of 2016. This variance was primarily due to higher NGL and gas prices and purchase volumes in the Southwest area, offset by a $13 million unrealized gain on our Natural Gas Embedded Derivative.

Purchases-related parties increased $44 million in the first nine months of 2017 compared to the same period of 2016. The increase was primarily due to the inclusion of approximately $23 million related party purchases of MPLXT as well as general increases in employee costs due to headcount.

Depreciation and amortization expense increased $77 million in the first nine months of 2017 compared to the same period of 2016. This variance was primarily due to accelerated depreciation expense of approximately $35 million incurred on the decommissioning of the Houston 1 facility in the Marcellus area and other various assets, approximately $10 million of additional depreciation due to the inclusion of MPLXT, as well additions to in-service property, plant and equipment during the fourth quarter of 2016 and the first nine months of 2017.

Impairment expense decreased $130 million in the first nine months of 2017 compared to the same period of 2016. This variance was due to a non-cash impairment to goodwill in two reporting units in the G&P segment during the first six months of 2016.

Net interest expense and other financial costs increased $62 million in the first nine months of 2017 compared to the same period of 2016. The increase is primarily due to the New Senior Notes issued in February 2017.

~~SEGMENT RESULTS~~

We classify our business in the following reportable segments: L&S and G&P. Segment operating income represents income from operations attributable to the reportable segments. We have investments in entities that we operate that are accounted for using equity method investment accounting standards. However, we view financial information as if those investments were consolidated. Corporate general and administrative expenses, unrealized derivative (losses) gains, property, plant and equipment impairment, goodwill impairment and depreciation and amortization are not allocated to the reportable segments. Management does not consider these items allocable to or controllable by any individual segment and, therefore, excludes these items when evaluating segment performance. Segment results are also adjusted to exclude the portion of income from operations attributable to the noncontrolling interests related to partially owned entities that are either consolidated or accounted for as equity method investments. Segment operating income attributable to MPLX LP excludes the operating income related to the HSM Predecessor prior to the March 31, 2016 acquisition and the HST, WHC and MPLXT Predecessor prior to the March 1, 2017 acquisition.

~~The tables below present information about segment operating income for the reported segments.~~

~~L&S Segment~~

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 Variance 2017 2016 Variance
Revenues and other income:
Segment revenues $ 378
$ 339
$ 39
$ 1,095
$ 901
$ 194
Segment other income 11
12
(1 ) 35
42
(7 )
Total segment revenues and other income 389
351
38
1,130
943
187
Costs and expenses:
Segment cost of revenues 176
153
23
500
392
108
Segment operating income before portion attributable to noncontrolling interests and Predecessor 213
198
15
630
551
79
Segment portion attributable to noncontrolling interests and Predecessor —
74
(74 ) 53
216
(163 )
Segment operating income attributable to MPLX LP $ 213
$ 124
$ 89
$ 577
$ 335
$ 242

~~Three months ended September 30, 2017 compared to three months ended September 30, 2016~~

~~In the third quarter of 2017 compared to the same period of 2016, segment revenue increased primarily due to a $14 million increase from higher crude and product transportation volumes~~, ~~a $19 million increase from the acquisition of the Ozark pipeline,~~a $4 million increase from the annual increase in fees and a $4 million increase from additional barges, partially offset by a $2 million decrease in the recognition of revenue related to volume deficiency payments.

~~In the third quarter of 2017 compared to the same period of 2016, segment cost of revenues increasedprimarily due to a $12 million increase from the acquisition of the Ozark pipeline, as well as from salaries and compensation due to headcount and other miscellaneous expenses.~~

In the third quarter of 2017 compared to the same period of 2016, the segment portion attributable to noncontrolling interests and Predecessor decreased due to the acquisition of HST, WHC and MPLXT as of March 1, 2017.

~~Nine months ended September 30, 2017 compared to nine months ended September 30, 2016~~

In the first nine months of 2017 compared to the same period of 2016, segment revenue increased primarily due to the inclusion of $103 million of revenue generated by MPLXT and its subsidiaries, a $28 million increase from higher crude and product transportation volumes,~~a $45 million increase from the acquisition of the Ozark pipeline~~, ~~a $3 million increase due to the recognition of revenues related to volume deficiency payments,and a $10 million increase from additional barges.~~

In the first nine months of 2017 compared to the same period of 2016, segment cost of revenues increased primarily due to the acquisitions of MPLXT and the Ozark pipeline, increased expenses related to the timing of projects, salaries and compensation due to headcount, and other miscellaneous expenses.

~~In the first nine months of 2017 compared to the same period of 2016, the segment portion attributable to noncontrolling interests and Predecessor decreased due to the inclusion of HSM for~~ the first three months of ~~2016 and the acquisition of HST, WHC and MPLXT as of March 1, 2017.~~

During both the third quarter and first nine months of 2017, MPC did not ship its minimum committed volumes on certain of our pipeline systems. As a result, for the first nine months, MPC was obligated to make a $37 million deficiency payment, of which $11 million was paid in the third quarter of 2017. We record deficiency payments as ~~Deferred revenue-related parties~~ on our Consolidated Balance Sheets. In the third quarter and first nine months of 2017, we recognized revenue of $7 million and $29 million, respectively, related to volume deficiency credits. At September 30, 2017, the cumulative balance of ~~Deferred revenue-related parties~~ on our Consolidated Balance Sheets related to volume deficiencies was $55 million. The following table presents the future expiration dates of the associated deferred revenue credits as of September 30, 2017:

(In millions)
December 31, 2017 $ 8
March 31, 2018 11
June 30, 2018 11
September 30, 2018 10
December 31, 2018 4
March 31, 2019 3
June 30, 2019 4
September 30, 2019 4
Total $ 55

~~G&P Segment~~

~~Our assets include approximately 5.9 bcf/d of gathering capacity, 7.8 bcf/d of natural gas processing capacity and 570 mbpd of fractionation capacity.~~

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 Variance 2017 2016 Variance
Revenues and other income:
Segment revenues $ 669
$ 567
$ 102
$ 1,869
$ 1,595
$ 274
Segment other income 1
1
—
2
1
1
Total segment revenues and other income 670
568
102
1,871
1,596
275
Costs and expenses:
Segment cost of revenues 276
239
37
781
662
119
Segment operating income before portion attributable to noncontrolling interests 394
329
65
1,090
934
156
Segment portion attributable to noncontrolling interests 45
36
9
119
113
6
Segment operating income attributable to MPLX LP $ 349
$ 293
$ 56
$ 971
$ 821
$ 150

~~Three months ended September 30, 2017 compared to three months ended September 30, 2016~~

In the third quarter of 2017 compared to the same period of 2016, segment revenue increased due to increased pricing on product sales of approximately $46 million and increased volumes of $15 million, combined with increased fees of approximately $41 million on higher volumes due to new gathering and processing facilities in the Marcellus, Southwest, and Utica areas,2019, as well as ~~additional fractionation capacity~~the write-down of equipment no longer in ~~the Marcellus and Utica areas.~~

In the third quarter of 2017 compared to the same period of 2016, segment cost of revenues increased primarily due to increased product costs resulting from higher NGL and gas prices of $28 million and increased volumes of $10 million primarily in the Southwest area partially offset by lower maintenance costs and other operating efficiencies.

~~Nine months ended September 30, 2017 compared to nine months ended September 30, 2016~~

In the first nine months of 2017 compared to the same period of 2016, segment revenue increased due to increased pricing on product sales of approximately $144 million and increased volumes of $38 million, combined with increased fees of approximately $92 million on higher volumes due to new processing plants in the Marcellus and Southwest areas and additional fractionation capacity in the Marcellus and Utica areas.

In the first nine months of 2017 compared to the same period of 2016, segment cost of revenues increased due primarily to increased product costs resulting from higher prices of approximately $102 million and higher volumes of $21 million primarily in the Southwest area partially offset by lower facility costs due to lower maintenance costs and other operating efficiencies.

~~Segment Reconciliations~~

The following tables provide reconciliations of segment operating income to our consolidated income from operations, segment revenue to our consolidated total revenues and other income, and segment portion attributable to noncontrolling interests to our consolidated net income attributable to noncontrolling interests for the three and nine months ended September 30, 2017 and 2016. Adjustments related to unconsolidated affiliates relate to our Partnership-operated non-wholly-owned entities that we consolidate for segment purposes. Income (loss) from equity method investmentsrelates to our portion of income (loss) from our unconsolidated joint ventures of which Partnership-operated joint ventures are consolidated for segment purposes. Other income-related parties consists of operational service fee revenues from our operated unconsolidated affiliates. Unrealized derivative activity is not allocated to segments.

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 Variance 2017 2016 Variance
Reconciliation to Income from operations:
L&S segment operating income attributable to MPLX LP $ 213
$ 124
$ 89
$ 577
$ 335
$ 242
G&P segment operating income attributable to MPLX LP 349
293
56
971
821
150
Segment operating income attributable to MPLX LP 562
417
145
1,548
1,156
392
Segment portion attributable to unconsolidated affiliates (47 ) (41 ) (6 ) (125 ) (130 ) 5
Segment portion attributable to Predecessor —
74
(74 ) 53
216
(163 )
Income (loss) from equity method investments 23
6
17
29
(72 ) 101
Other income - related parties 13
11
2
38
29
9
Unrealized derivative (losses) gains⁽¹⁾
(17 ) (2 ) (15 ) 2
(23 ) 25
Depreciation and amortization (164 ) (151 ) (13 ) (515 ) (438 ) (77 )
Impairment expense —
—
—
—
(130 ) 130
General and administrative expenses (59 ) (56 ) (3 ) (174 ) (172 ) (2 )
Income from operations $ 311
$ 258
$ 53
$ 856
$ 436
$ 420

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 Variance 2017 2016 Variance
Reconciliation to Total revenues and other income:
Total segment revenues and other income $ 1,059
$ 919
$ 140
$ 3,001
$ 2,539
$ 462
Revenue adjustment from unconsolidated affiliates (107 ) (100 ) (7 ) (287 ) (303 ) 16
Income (loss) from equity method investments 23
6
17
29
(72 ) 101
Other income - related parties 13
11
2
38
29
9
Unrealized derivative (losses) gains related to product sales⁽¹⁾
(8 ) 2
(10 ) 1
(12 ) 13
Total revenues and other income $ 980
$ 838
$ 142
$ 2,782
$ 2,181
$ 601

~~(1)~~

The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded.

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 Variance 2017 2016 Variance
Reconciliation to Net income attributable to noncontrolling interests and Predecessor:
Segment portion attributable to noncontrolling interests and Predecessor $ 45
$ 110
$ (65 ) $ 172
$ 329
$ (157 )
Portion of noncontrolling interests and Predecessor related to items below segment income from operations (21 ) (39 ) 18
(84 ) (157 ) 73
Portion of operating income attributable to noncontrolling interests of unconsolidated affiliates (23 ) (18 ) (5 ) (49 ) (20 ) (29 )
Net income attributable to noncontrolling interests and Predecessor $ 1
$ 53
$ (52 ) $ 39
$ 152
$ (113 )
use.

~~OUR G&P CONTRACTS WITH THIRD PARTIES~~

We generate the majority of our revenues in the G&P segment from natural gas gathering, transportation and processing; NGL gathering, transportation, fractionation, exchange, marketing and storage; and crude oil gathering and transportation. We enter into a variety of contracts to provide services under the following types of arrangements: fee-based, percent-of-proceeds, percent-of-index and keep-whole. In many cases, we provide services under contracts that contain a combination of more than one of the arrangements described below. See Item 1. Business – Our G&P Contracts With Third Parties in our Annual Report on Form 10-K for the year ended December 31, 2016 for further discussion of each of these types of arrangements.

The following table does not give effect to our active commodity risk management program. For further discussion of how we manage commodity price volatility for the portion of our net operating margin that is not fee-based, see Note 13 of the Notes to Consolidated Financial Statements. We manage our business by taking into account the partial offset of short natural gas positions primarily in the Southwest region of our G&P segment. The calculated percentages for net operating margin for percent-of-proceeds, percent-of-index and keep-whole contracts reflect the partial offset of our natural gas positions. The calculated percentages are less than one percent for percent-of-index due to the offset of our natural gas positions and, therefore, not meaningful to the table below.

~~For the three months ended September 30, 2017, we calculated the following approximate percentages of our net operating margin from the following types of contracts:~~

Fee-Based
Percent-of-Proceeds⁽¹⁾

Keep-Whole⁽²⁾
L&S 100 % — % — %
G&P⁽³⁾
86 % 12 % 2 %
Total 92 % 7 % 1 %

~~For the nine months ended September 30, 2017, we calculated the following approximate percentages of our net operating margin from the following types of contracts:~~

Fee-Based
Percent-of-Proceeds⁽¹⁾

Keep-Whole⁽²⁾
L&S 100 % — % — %
G&P⁽³⁾
87 % 11 % 2 %
Total 93 % 6 % 1 %


~~(1)~~	~~Includes condensate sales and other types of arrangements tied to NGL prices.~~


~~(2)~~	~~Includes condensate sales and other types of arrangements tied to both NGL and natural gas prices.~~


~~(3)~~	~~Includes unconsolidated affiliates (See Note 4 of the Notes to Consolidated Financial Statements).~~

~~The following table presents a reconciliation of net operating margin to income from operations, the most directly comparable GAAP financial measure.~~

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2017 2016 2017 2016
Reconciliation of net operating margin to income from operations:
Segment revenues $ 1,047
$ 906
$ 2,964
$ 2,496
Purchased product costs (170 ) (117 ) (441 ) (310 )
Total derivative loss related to purchased product costs 11
4
5
16
Other (1 ) —
(5 ) (5 )
Net operating margin 887
793
2,523
2,197
Revenue adjustment from unconsolidated affiliates⁽²⁾
(107 ) (100 ) (287 ) (303 )
Realized derivative loss related to purchased product costs⁽¹⁾
(2 ) (1 ) (6 ) (4 )
Other 2
1
6
4
Unrealized derivative (losses) gains⁽¹⁾
(17 ) (2 ) 2
(23 )
Income (loss) from equity method investments 23
6
29
(72 )
Other income 2
2
5
5
Other income - related parties 22
22
69
67
Cost of revenues (excludes items below) (129 ) (122 ) (381 ) (329 )
Rental cost of sales (19 ) (13 ) (44 ) (42 )
Rental cost of sales - related parties —
—
(1 ) (1 )
Purchases - related parties (114 ) (109 ) (330 ) (286 )
Depreciation and amortization (164 ) (151 ) (515 ) (438 )
Impairment expense —
—
—
(130 )
General and administrative expenses (59 ) (56 ) (174 ) (172 )
Other taxes (14 ) (12 ) (40 ) (37 )
Income from operations $ 311
$ 258
$ 856
$ 436

~~(1)~~


~~(2)~~	These amounts relate to Partnership-operated unconsolidated affiliates. The chief operating decision maker and management include these to evaluate the segment performance as we continue to operate and manage the operations. Therefore, the impact of the revenue is included for segment reporting purposes, but removed for GAAP purposes.

SEASONALITY

The volume of crude oil and refined products transported ~~on our pipeline systems, at our barge dock~~ and stored atutilizing our ~~storage~~ assets is directly affected by the level of supply and demand for crude oil and refined products in the markets served directly or indirectly by our assets. Many effects of seasonality on the L&S segment’s revenues will be mitigated through the use of our fee-based transportation and storage services agreements with MPC that include minimum volume commitments.

Our G&P segment can be affected by seasonal fluctuations in the demand for natural gas and NGLs and the related fluctuations in commodity prices caused by various factors such as changes in transportation and travel patterns and variations in weather patterns from year to year. However, we manage the seasonality impact through the execution of our marketing strategy. We have access to up to ~~50 million gallons~~800 thousand barrels of propane storage capacity in the Southern Appalachia region provided by an arrangement with a third party which provides us with flexibility to manage the seasonality impact. Overall, our exposure to the seasonal fluctuations in the commodity markets is declining due to our growth in fee-based business.

OPERATING DATA

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
L&S
Pipeline throughput (mbpd)⁽¹⁾

Crude oil pipelines 2,046
1,775
1,901
1,665
Product pipelines 1,131
992
1,051
989
Total pipelines 3,177
2,767
2,952
2,654

Average tariff rates ($ per barrel)⁽¹⁾⁽²⁾

Crude oil pipelines $ 0.54
$ 0.55
$ 0.57
$ 0.57
Product pipelines 0.75
0.69
0.74
0.67
Total pipelines 0.62
0.60
0.63
0.61

Terminal throughput (mbpd) 1,496
1,517
1,470
1,510

Marine Assets (number in operation)⁽³⁾

Barges 232
217
232
217
Towboats 18
18
18
18

G&P
Gathering Throughput (MMcf/d)
Marcellus Operations 1,005
946
965
922
Utica Operations⁽⁴⁾
1,324
916
1,065
936
Southwest Operations⁽⁵⁾
1,400
1,444
1,385
1,455
Total gathering throughput 3,729
3,306
3,415
3,313

Natural Gas Processed (MMcf/d)
Marcellus Operations 3,986
3,273
3,778
3,166
Utica Operations⁽⁴⁾
1,000
1,050
982
1,068
Southwest Operations 1,331
1,339
1,310
1,209
Southern Appalachian Operations 264
244
266
248
Total natural gas processed 6,581
5,906
6,336
5,691

C2 + NGLs Fractionated (mbpd)
Marcellus Operations⁽⁶⁾
326
274
310
254
Utica Operations⁽⁴⁾⁽⁶⁾
39
41
40
43
Southwest Operations 18
19
19
17
Southern Appalachian Operations⁽⁷⁾
14
14
15
16
Total C2 + NGLs fractionated⁽⁸⁾
397
348
384
330

Pricing Information
Natural Gas NYMEX HH ($ per MMBtu) $ 2.96
$ 2.80
$ 3.05
$ 2.34
C2 + NGL Pricing ($ per gallon)⁽⁹⁾
$ 0.66
$ 0.46
$ 0.62
$ 0.44



	Three Months Ended March 31,
	2019		2018
L&S
Pipeline throughput (mbpd)
Crude oil pipelines	2,168		2,006
Product pipelines	1,242		1,056
Total pipelines	3,410		3,062

Average tariff rates ($ per barrel)⁽¹⁾
Crude oil pipelines	$	0.61	$	0.56
Product pipelines	0.79		0.76
Total pipelines	$	0.67	$	0.63

Terminal throughput (mbpd)	1,431		1,445

Marine Assets (number in operation)⁽²⁾
Barges	256		244
Towboats	23		20

Table of Contents



	Three Months Ended March 31, 2019		Three Months Ended March 31, 2018
	MPLX LP⁽³⁾	MPLX LP Operated⁽⁴⁾	MPLX LP⁽³⁾	MPLX LP Operated⁽⁴⁾
G&P
Gathering Throughput (MMcf/d)
Marcellus Operations	1,282	1,282	1,123	1,123
Utica Operations	—	2,109	—	1,570
Southwest Operations	1,581	1,581	1,476	1,478
Total gathering throughput	2,863	4,972	2,599	4,171

Natural Gas Processed (MMcf/d)
Marcellus Operations	4,152	5,148	3,594	4,114
Utica Operations	—	817	—	936
Southwest Operations	1,599	1,599	1,326	1,326
Southern Appalachian Operations	235	235	253	253
Total natural gas processed	5,986	7,799	5,173	6,629

C2 + NGLs Fractionated (mbpd)
Marcellus Operations⁽⁵⁾	420	420	352	352
Utica Operations⁽⁵⁾	—	44	—	43
Southwest Operations	17	17	16	16
Southern Appalachian Operations⁽⁶⁾	13	13	12	12
Total C2 + NGLs fractionated⁽⁷⁾	450	494	380	423



	Three Months Ended March 31,
	2019		2018
Pricing Information
Natural Gas NYMEX HH ($ per MMBtu)	$	2.87	$	2.85
C2 + NGL Pricing ($ per gallon)⁽⁸⁾	$	0.62	$	0.73


(1)	~~Pipeline throughput and tariff rates as of September 30, 2016 have been retrospectively adjusted to reflect the acquisition of HST.~~


~~(2)~~	Average tariff rates calculated using pipeline transportation revenues divided by pipeline throughput barrels.


~~(3)~~(2)	Represents total at end of period.


(3)	This column represents operating data for entities that have been consolidated into the MPLX financial statements.


(4)	~~Includes unconsolidated~~This column represents operating data for entities that have been consolidated into the MPLX financial statements as well as operating data for MPLX-operated equity method ~~investments that are shown consolidated for segment purposes only.~~investments.

(5)

Includes approximately two MMcf/d related to the unconsolidated equity method investment, Wirth, for the three months ended September 30, 2017, and 230 MMcf/d related to unconsolidated equity method investments, Wirth and MarkWest Pioneer, for the nine months ended September 30, 2017. Includes approximately 307 MMcf/d and 299 MMcf/d related to unconsolidated equity method investments, Wirth and MarkWest Pioneer, for the three and nine months ended September 30, 2016, respectively.

~~(6)~~

Hopedale is jointly owned by Ohio Fractionation and MarkWest Utica EMG. Ohio Fractionation is a subsidiary of MarkWest Liberty Midstream. MarkWest Liberty Midstream and MarkWest Utica EMG are entities that operate in the Marcellus and Utica regions, respectively. ~~The~~ Marcellus Operations includes ~~its~~Ohio Fractionation’s portion utilized of the jointly owned Hopedale Fractionation Complex. ~~The~~ Utica Operations includes ~~Utica’s~~MarkWest Utica EMG’s portion utilized of the jointly owned Hopedale Fractionation Complex. Additionally, Sherwood Midstream has the right to fractionation revenue and the obligation to pay expenses related to 2040 mbpd of capacity in the Hopedale 3 ~~fractionator.~~and Hopedale 4 fractionators.


~~(7)~~(6)	Includes NGLs fractionated for the Marcellus Operations and Utica Operations.

~~(8)~~(7)

Purity ethane makes up approximately ~~164~~189 mbpd and ~~160~~176 mbpd of total MPLX Operated, fractionated products for the three ~~and nine~~ months ended ~~September 30, 2017, respectively,~~March 31, 2019 and 2018, respectively. Purity ethane makes up approximately ~~137~~176 mbpd and ~~125~~163 mbpd of total MPLX LP consolidated, fractionated products for the three ~~and nine~~ months ended ~~September 30, 2016,~~March 31, 2019 and 2018, respectively.


~~(9)~~(8)	C2 + NGL pricing based on Mont Belvieu prices assuming an NGL barrel of approximately 35 percent ethane, 35 percent propane, six percent Iso-Butane, 12 percent normal butane and 12 percent natural gasoline.

Table of Contents

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

Our cash, ~~and~~ cash equivalents ~~balance~~and restricted cash was $3$93 million at ~~September 30, 2017 compared to $234~~March 31, 2019 and $76 million at December 31, ~~2016.~~2018. The change in cash, ~~and~~ cash equivalents and restricted cash was due to the factors discussed below. Net cash provided by (used in) operating activities, investing activities and financing activities were as follows:


	Nine Months Ended September 30,						Three Months Ended March 31,
(In millions)	2017			2016			2019			2018
Net cash provided by (used in):
Operating activities	$	1,338		$	975		$	618		$	450
Investing activities	(1,837		)	(892		)	(575		)	(490		)
Financing activities	268			82			(26		)	37
Total	$	(231	)	$	165		$	17		$	(3	)

Net cash provided by operating activities increased ~~$363~~$168 million in the first ~~nine~~three months of ~~2017~~2019 compared to the first ~~nine~~three months of ~~2016,~~2018, primarily due to the increase in net income period over period which as most impacted by the inclusion of Refining Logistics and Fuels Distribution for the full first quarter of 2019 compared to only two months being included in the first quarter of 2018. Changes in working capital and increased distributions from equity method investments made up the majority of ~~which is related to an increase in adjusted EBITDA of $269 million. The favorable change in adjusted EBITDA was driven primarily by higher prices and volumes,~~ the ~~inclusion of MPLXT, since it was not formed as a business until April 1, 2016, and the acquisition~~remainder of the Ozark pipeline. In addition, there was an increase in distributions received from unconsolidated affiliates of $25 million due to the acquisition of an equity interest in the Bakken Pipeline system and the joint-interest acquisitions.change.

Net cash used in investing activities increased ~~$945~~$85 million in the first ~~nine~~three months of ~~2017~~2019 compared to the first ~~nine~~three months of ~~2016,~~2018, primarily due to ~~the acquisition of an equity interest in the Bakken Pipeline system for $513 million,~~increased investments in ~~other unconsolidated entities of approximately $177 million, $219 million for the acquisition of the Ozark pipeline, $30 million for the buy-out of an~~ equity method investment partner, an increase in cash used for additions to property, plant and equipment related to various capital projects, as well as a net decrease of $23 million in investment loans with MPC. Partially offsetting these items was a return of capital of $24 million from our acquisition of equity interests in Sherwood Midstream and Sherwood Midstream Holdings.investments.

Financing activities were a ~~$268~~$26 million use of cash in the first three months of 2019 compared to a $37 million source of cash in the first ~~nine~~three months of ~~2017 compared to a $82 million source~~2018. The use of cash infor the first ~~nine~~three months of ~~2016. The source of cash in the first nine months of 2017~~2019 was primarily due to ~~$2.2 billion~~distributions of $515 million to common unitholders, distributions of $20 million to preferred unitholders and distributions of $6 million to noncontrolling interests offset by net ~~proceeds from~~borrowing of $425 million on the ~~New Senior Notes, $420 million of proceeds under the bank revolving credit facility, $128~~MPLX Credit Agreement and $94 million in contributions from noncontrolling ~~interests and $483 million of net proceeds from sales of units under the ATM Program~~. ~~These items were partially offset by distributions to MPC of $1.9 billion for the acquisition of HST, WHC, MPLXT and the Joint-~~interests.

5749

~~Interest Acquisition~~, $250 million repayment of the term loan facility, distributions of $49 million to Preferred unitholders, and increased distributions of $188 million to unitholders and our general partner due mainly to the increase in units outstanding as well as a 10 percent increase in the distribution per limited partner unit.

Debt and Liquidity Overview

Our outstanding borrowings at ~~September 30, 2017~~March 31, 2019 and December 31, ~~2016 consisted~~2018 consist of the following:

(In millions) September 30, 2017 December 31, 2016
MPLX LP:
Bank revolving credit facility due 2022 $ 420
$ —
Term loan facility due 2019 —
250
5.500% senior notes due February 2023 710
710
4.500% senior notes due July 2023 989
989
4.875% senior notes due December 2024 1,149
1,149
4.000% senior notes due February 2025 500
500
4.875% senior notes due June 2025 1,189
1,189
4.125% senior notes due March 2027 1,250
—
5.200% senior notes due March 2047 1,000
—
Consolidated subsidiaries:
MarkWest - 4.500% - 5.500%, due 2023-2025 63
63
MPL - capital lease obligations due 2020 7
8
Total 7,277
4,858
Unamortized debt issuance costs (27 ) (7 )
Unamortized discount (401 ) (428 )
Amounts due within one year (1 ) (1 )
Total long-term debt due after one year $ 6,848
$ 4,422

The increase in debt as of September 30, 2017 compared to year-end 2016 was due to the public offering of the New Senior Notes in the first quarter of 2017 and from borrowings on the intercompany loan with MPC and the bank revolving credit facility for general partnership purposes including the acquisitions of HST, WHC, MPLXT and the Joint-Interest Acquisition from MPC, the acquisition of our equity interest in MarEn Bakken, the acquisition of the Ozark pipeline and capital expenditures. See Notes 3, 4 and 14 of the Notes to Consolidated Financial Statements for additional information.

On July 21, 2017, the Partnership entered into a credit agreement to replace its previous $2.0 billion five-year bank revolving credit facility with a $2.25 billion five-year bank revolving credit facility that expires in July 2022 (“MPLX Credit Agreement 2022”). The financial covenants and the interest rate terms contained in the new credit agreement are substantially the same as those contained in the previous bank revolving credit facility. Additionally, on July 19, 2017, MPLX LP prepaid the entire outstanding principal amount of its $250 million term loan with cash on hand.



(In millions)	March 31, 2019			December 31, 2018
MPLX LP:
Bank revolving credit facility due 2022	$	425		$	—
3.375% senior notes due March 2023	500			500
4.500% senior notes due July 2023	989			989
4.875% senior notes due December 2024	1,149			1,149
4.000% senior notes due February 2025	500			500
4.875% senior notes due June 2025	1,189			1,189
4.125% senior notes due March 2027	1,250			1,250
4.000% senior notes due March 2028	1,250			1,250
4.800% senior notes due February 2029	750			750
4.500% senior notes due April 2038	1,750			1,750
5.200% senior notes due March 2047	1,000			1,000
4.700% senior notes due April 2048	1,500			1,500
5.500% senior notes due February 2049	1,500			1,500
4.900% senior notes due April 2058	500			500
Consolidated subsidiaries:
MarkWest - 4.500% - 4.875% senior notes, due 2023-2025	23			23
Financing lease obligations	8			6
Total	14,283			13,856
Unamortized debt issuance costs	(96		)	(97		)
Unamortized discount	(354		)	(366		)
Amounts due within one year	(1		)	(1		)
Total long-term debt due after one year	$	13,832		$	13,392

The MPLX Credit Agreement ~~2022~~ includes certain representations and warranties, affirmative and negative covenants and events of default that we consider usual and customary for an agreement of ~~that~~its type and that could, among other things, limit our ability to pay distributions to our unitholders. The financial covenant requires us to maintain a ratio of Consolidated Total Debt as of the end of each fiscal quarter to Consolidated EBITDA (both as defined in the MPLX Credit ~~Agreement 2022)~~Agreement) for the prior four fiscal quarters of no greater than 5.0 to 1.0 (or 5.5 to 1.0 for up to two fiscal quarters following certain acquisitions). Consolidated EBITDA is subject to adjustments for certain acquisitions completed and capital projects undertaken during the relevant period. Other covenants restrict us and/or certain of our subsidiaries from incurring debt, creating liens on our assets and entering into transactions with affiliates. As of ~~September 30, 2017,~~March 31, 2019, we were in compliance with this financial covenant with a ratio of Consolidated Total Debt to Consolidated EBITDA of ~~3.4~~3.85 to 1.0, as well as other covenants contained in the MPLX Credit ~~Agreement 2022.~~Agreement. As disclosed in Note 2 of the Notes to Consolidated Financial Statements, ~~we expect~~ the adoption of the lease accounting standards update ~~to result~~resulted in the recognition of a significant lease obligation. The MPLX Credit Agreement ~~2022~~ contains provisions under which the effects of the new accounting standard are not recognized for purposes of financial covenant ~~calculation violations.~~

calculations.

Our intention is to maintain an investment grade credit profile. As of ~~September 30, 2017,~~March 31, 2019, the credit ratings on our senior unsecured debt were at or above investment grade level as follows:



Rating Agency		Rating
Moody’s		Baa3 (stable outlook)
Standard & Poor’s		~~BBB-~~BBB (stable outlook)
Fitch		BBB- ~~(stable~~(positive outlook)

The ratings reflect the respective views of the rating agencies. Although it is our intention to maintain a credit profile that supports an investment grade rating, there is no assurance that these ratings will continue for any given period of time. The ratings may be revised or withdrawn entirely by the rating agencies if, in their respective judgments, circumstances so warrant.

The MPLX Credit Agreement ~~2022 does~~and senior notes do not contain credit rating triggers that would result in the acceleration of interest, principal or other payments solely in the event that our credit ratings are downgraded. However, any downgrades in the credit ratings of our senior unsecured debt ratings to below investment grade ratings would, among other things, increase the applicable interest rates and other fees payable under the MPLX Credit Agreement ~~2022~~ and may limit our flexibility to obtain future financing.

Our liquidity totaled ~~$2.1~~$2.92 billion at ~~September 30, 2017~~March 31, 2019 consisting of:


	September 30, 2017							March 31, 2019
(In millions)	Total Capacity		Outstanding Borrowings			Available Capacity		Total Capacity		Outstanding Borrowings			Available Capacity
MPLX LP - bank revolving credit facility expiring 2022⁽¹⁾	$	2,250	$	(423	)	$	1,827	$	2,250	$	(428	)	$	1,822
MPC Investment - loan agreement	500		(202		)	298
MPC Loan Agreement								1,000		—			1,000
Total liquidity	$	2,750	$	(625	)	$	2,125	$	3,250	$	(428	)	2,822
Cash and cash equivalents						3							93
Total liquidity						$	2,128						$	2,915


(1)	Outstanding borrowings include $3 million in letters of credit outstanding under this facility.

We expect our ongoing sources of liquidity to include cash generated from operations, borrowings under our loan agreement with MPC and borrowings under our revolving credit ~~agreements and issuances of additional debt and equity securities.~~facilities. We believe that cash generated from these sources will be sufficient to meet our short-term and long-term funding requirements, including working capital requirements, capital expenditure requirements, contractual obligations, ~~repayment of debt maturities~~ and quarterly cash distributions. MPC manages our cash and cash equivalents on our behalf directly with third-party institutions as part of the treasury services that it provides to us under our omnibus agreement. From time to time, we may also consider utilizing other sources of liquidity, including the formation of joint ventures or sales of non-strategic assets.

Equity and Preferred Units Overview

The table below summarizes the changes in the number of units outstanding through ~~September 30, 2017:~~March 31, 2019:

(In units) Common Class B General Partner Total
Balance at December 31, 2016 357,193,288
3,990,878
7,371,105
368,555,271
Unit-based compensation awards 183,509
—
3,745
187,254
Issuance of units under the ATM Program 13,846,998
—
282,591
14,129,589
Contribution of HST/WHC/MPLXT 12,960,376
—
264,497
13,224,873
Contribution of the Joint-Interest Acquisition 18,511,134
—
377,778
18,888,912
Class B conversion 4,350,057
(3,990,878 ) 7,330
366,509
Balance at September 30, 2017 407,045,362
—
8,307,046
415,352,408



(In units)
Balance at December 31, 2018	794,089,518
Unit-based compensation awards	148,379
Balance at March 31, 2019	794,237,897

~~For more details on equity activity, see Notes 7 and 8 of the Notes to Consolidated Financial Statements.~~

~~On July 1, 2017, all of the remaining 3,990,878 Class B units automatically converted into 1.09~~ MPLX ~~LP common units and the right to receive $6.20 per unit in cash. MPC funded this cash payment, which reduced our liability payable to Class B~~

unitholders by approximately $25 million on July 1, 2017. As a result of the Class B units conversion on July 1, 2017, MPLX GP contributed less than $1 million in exchange for 7,330 general partner units to maintain its two percent general partner interest. As common units outstanding as of the August 7, 2017 record date, the converted Class B units participated in the second quarter distribution.

~~The Partnership~~ expects the net proceeds, if any, from sales under ~~the~~our ATM Program will be used for general ~~partnership~~business purposes including repayment or refinancing of debt and funding for acquisitions, working capital requirements and capital expenditures. During the ~~nine~~three months ended ~~September 30, 2017, the sale of~~March 31, 2019, we issued no common units under ~~the~~our ATM ~~Program generated net proceeds of approximately $473 million.~~program. As of ~~September 30, 2017,~~March 31, 2019, $1.7 billion of common units remain available for issuance through the ATM ~~Program under the Distribution Agreement.~~

MPC agreed to waive two-thirds of the first quarter 2017 distributions on the common units issued in connection with the acquisition of HST, WHC and MPLXT. As a result of this waiver, MPC did not receive general partner distributions or IDRs that would have otherwise accrued on such common units with respect to the first quarter 2017 distributions. The value of these waived distributions was $6 million. Additionally, in connection with our acquisition of a partial, indirect equity interest in the Bakken Pipeline system on February 15, 2017, MPC agreed to waive its right to receive incentive distributions of $1.6 million per quarter for twelve consecutive quarters beginning with the distributions declared in the first quarter of 2017 and paid to MPC in the second quarter of 2017, which was prorated from the acquisition date. Lastly, MPC agreed to waive two-thirds of the third quarter 2017 distributions on the common units issued in connection with the Joint-Interest Acquisition. As a result of this waiver, MPC did not receive the distributions or IDRs that would have otherwise accrued on such common units with respect to the third quarter 2017 distributions. The value of these waived distributions was $10 million.Program.

We intend to pay at least the minimum quarterly distribution of $0.2625 per unit per quarter, which equates to ~~$109~~$208 million per quarter, or ~~$436~~$834 million per year, based on the number of common ~~and general partner~~ units outstanding at ~~September 30, 2017.~~March 31, 2019. On ~~October 25, 2017,~~April 29, 2019, we announced the board of directors of our general partner had declared a distribution of ~~$0.5875~~$0.6575 per unit that will be paid on ~~November 14, 2017~~May 15, 2019 to unitholders of record on ~~November 6, 2017.~~May 9, 2019. This represents an increase of ~~$0.0250~~$0.0100 per unit, or ~~four~~2 percent, above the ~~second~~fourth quarter ~~2017~~2018 distribution of ~~$0.5625~~$0.6475 per unit and an increase of 146 percent over the ~~third~~first quarter ~~2016~~2018 distribution. This increase in the distribution is consistent with our intent to maintain an attractive distribution growth profile over an extended period of time. Although our Partnership Agreement requires that we distribute all of our available cash each quarter, we do not otherwise have a legal obligation to distribute any particular amount per unit.

The allocation of total quarterly cash distributions to general and limited partners is as follows for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2019 and ~~2016.~~2018. Our distributions are declared subsequent to quarter end; therefore, the following table represents total cash distributions applicable to the period in which the distributions were earned.

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2017 2016 2017 2016
Distribution declared:
Limited partner units - public $ 170
$ 135
$ 481
$ 393
Limited partner units - MPC 54
44
152
114
Limited partner units - GP 8
—
15
—
General partner units - MPC 7
5
18
13
IDRs - MPC 81
49
211
135
Total GP & LP distribution declared 320
233
877
655
Redeemable preferred units 16
16
49
25
Total distribution declared $ 336
$ 249
$ 926
$ 680

Cash distributions declared per limited partner common unit $ 0.5875
$ 0.5150
$ 1.6900
$ 1.5300

Our intentions regarding the distribution growth profile expressed above include forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Factors that could cause actual results to differ materially from those implied in the forward-looking statements include: the adequacy of our capital resources and liquidity, including, but not limited to, the availability of sufficient cash flow to pay distributions and execute our business plan; negative capital market conditions, including an increase of the current yield on common units; the timing and extent of changes in commodity prices

6051

and demand for natural gas, NGLs, crude oil, feedstocks or refined petroleum products; volatility in and/or degradation of market and industry conditions; completion of midstream 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 plan, whether through organic growth or acquisitions; modifications to earnings and distribution objectives; state and federal environmental, economic, health and safety, energy and other policies and regulations; changes to our capital budget; financial stability of our producer customers and MPC; other risk factors inherent to our industry; and the factors set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016. 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 our SEC filings could also have material adverse effects on forward-looking statements.



	Three Months Ended March 31,
(In millions)	2019		2018
Distribution declared:
Limited partner units - public	$	191	$	179
Limited partner units - MPC	332		288
Total GP & LP distribution declared	523		467
Redeemable preferred units	20		16
Total distribution declared	543		483

Cash distributions declared per limited partner common unit	$	0.6575	$	0.6175

~~MPC Strategic Actions~~

On January 3, 2017, MPC announced its plans to offer the Partnership the opportunity to acquire assets contributing an estimated $1.4 billion of annual EBITDA. The Partnership's plans for funding the dropdowns include debt and equity in approximately equal proportions, with the equity financing to be funded through transactions with MPC. In conjunction with the completion of the dropdowns, MPC announced its intentions to offer to exchange its IDRs and two percent GP Interest for common units. Following these transactions, we expect to internally fund a greater portion of our future growth from internal cash flows. The first drop of assets contributing approximately $250 million of annual EBITDA took place in the first quarter of 2017 and was financed through cash and equity, as discussed in Note 3 of the Notes to Consolidated Financial Statements. The second drop of assets contributing approximately $138 million of annual EBITDA took place in the third quarter of 2017 and was financed through cash and equity, as discussed in Note 3 of the Notes to Consolidated Financial Statements. The remaining dropdown, which includes refinery logistics assets and fuels distribution services, with projected annual EBITDA of approximately $1.0 billion has been offered to the Partnership and referred to the conflicts committee of the board of directors of our general partner. The transaction is expected to close no later than the end of the first quarter of 2018.

Capital Expenditures

Our operations are capital intensive, requiring investments to expand, upgrade, enhance or maintain existing operations and to meet environmental and operational regulations. Our capital requirements consist of maintenance capital expenditures and growth capital expenditures. Examples of maintenance capital expenditures are those made to replace partially or fully depreciated assets, to maintain the existing operating capacity of our assets and to extend their useful lives, or other capital expenditures that are incurred in maintaining existing system volumes and related cash flows. In contrast, growth capital expenditures are those incurred for ~~acquisitions or~~ capital improvements that we expect will increase our operating capacity to increase volumes gathered, processed, transported or fractionated, decrease operating expenses within our facilities or increase operating income over the long term. Examples of growth capital expenditures include the acquisition of equipment or the construction costs associated with new well connections, and the development ~~or acquisition~~ of additional pipeline, processing or storage capacity. In general, growth capital includes costs that are expected to generate additional or new cash flow for ~~us.~~

MPLX.

Our capital expenditures are shown in the table below:

Nine Months Ended September 30,
(In millions) 2017 2016
Capital expenditures:
Maintenance $ 59
$ 58
Expansion 1,002
889
Total capital expenditures 1,061
947
Less: Increase in capital accruals 55
—
Asset retirement expenditures 2
4
Additions to property, plant and equipment 1,004
943
Capital expenditures of unconsolidated subsidiaries⁽¹⁾
306
94
Total gross capital expenditures 1,310
1,037
Less: Joint venture partner contributions⁽²⁾
132
45
Total capital expenditures, net 1,178
992
Less: Maintenance capital 60
58
Total growth capital $ 1,118
$ 934



	Three Months Ended March 31,
(In millions)	2019			2018
Capital expenditures:
Maintenance	$	19		$	25
Growth	364			425
Total capital expenditures	383			450
Less: Increase (decrease) in capital accruals	(74		)	(6		)
Asset retirement expenditures	—			1
Additions to property, plant and equipment	457			455
Investments in unconsolidated affiliates	128			38
Acquisitions, net of cash acquired	(1		)	—
Total capital expenditures and acquisitions	584			493
Less: Maintenance capital expenditures	19			25
Acquisitions	(1		)	—
Total growth capital expenditures⁽¹⁾	$	566		$	468


(1)	~~Includes amounts related to unconsolidated, Partnership-operated subsidiaries.~~


~~(2)~~	~~This represents estimated joint venture partners’ share~~Amount excludes contributions from noncontrolling interests of ~~growth capital.~~$94 million and $1 million for the three months ended March 31, 2019 and 2018, respectively, as reflected in the financing section of our statement of cash flows.

Our organic growth capital plan ~~range has not been revised~~ for 2019 is $2.2 billion. The L&S organic growth capital plan includes the ~~remainder~~continued expansion of ~~2017.~~MPLX’s marine fleet. We ~~anticipate finishing~~also have other projects including long-haul crude oil, natural gas and NGL pipelines as well as projects to increase our export capability which will further enhance our L&S segment full value chain capture. The G&P segment organic growth capital plan includes the ~~year near below~~addition of approximately 825 MMcf/d of processing capacity at five gas processing plants, two in the ~~previously reported range. This range excludes acquisition costs for~~Marcellus and three in the ~~dropdowns of HST, WHC, MPLXT~~Southwest, which expands MPLX’s processing capacity in the Permian Basin and the ~~Joint-Interest Acquisition, the acquisition~~STACK shale play of the Ozark pipeline and the MarEn Bakken investment, as discussed in Notes 3 and 4 of the Notes to Consolidated Financial Statements. The range also excludes non-affiliated joint venture members’ share of capital expenditures.Oklahoma. The G&P segment capital plan ~~includes investments that are expected to support producer customers and complete certain processing plants currently under construction at the Sherwood Complex. The L&S segment capital plan~~also includes the ~~development~~addition of ~~various crude oil~~approximately 100 mbpd of fractionation capacity in the Marcellus and refined petroleum products infrastructure projects, a butane cavern and a tank farm expansion, and an expansion project to increase line capacity on the Ozark pipeline. We also have large organic growth prospects associated with the anticipated growth of MPC’s operations and third-party activity in our areas of operation that we anticipate will provide attractive returns and cash flows.Utica basins. We continuously evaluate our capital plan and make changes as conditions warrant.

Contractual Cash Obligations

As of ~~September 30, 2017,~~March 31, 2019, our contractual cash obligations included long-term debt, ~~capital~~finance and operating lease obligations, purchase obligations for services and to acquire property, plant and equipment, and other liabilities. During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2019, our long-term debt obligations increased by ~~$4.1 billion~~$425 million due to additional borrowings under the ~~new senior notes issued~~MPLX Credit Agreement and contracts to acquire property, plant and equipment ~~increased $317 million largely due to~~for new ~~and~~or growing ~~projects.~~projects decreased by $20 million. There were no other material changes to these obligations outside the ordinary course of business since December 31, ~~2016.~~2018.

Off-Balance Sheet Arrangements

~~As of September 30, 2017, we have not entered into any transactions, agreements or other~~Off-balance sheet arrangements comprise those arrangements that ~~would result in~~may potentially impact our liquidity, capital resources and results of operations, even though such arrangements are not recorded as liabilities under U.S. GAAP. Our off-balance sheet ~~liabilities.~~

~~Forward-looking Statements~~

~~Our opinions concerning~~arrangements are limited to indemnities and guarantees that are described in Note 20. Although these arrangements serve a variety of our business purposes, we are not dependent on them to maintain our liquidity and capital resources, and ~~our ability~~we are not aware of any circumstances that are reasonably likely to ~~avail ourselves in~~cause the ~~future of the financing options mentioned in the above forward-looking statements are based~~off-balance sheet arrangements to have a material adverse effect on currently available information. If this information proves to be inaccurate, future availability of financing may be adversely affected. Factors that affect the availability of financing include our performance (as measured by various factors, including cash provided by operating activities), the state of worldwide debt and equity markets, investor perceptions and expectations of past and future performance, the global financial climate, and, in particular, with respect to borrowings, the levels of our outstanding debt and future credit ratings by rating agencies. The discussion of liquidity and capital resources above also contains forward-looking statements regarding expected capital spending. The forward-looking statements about our capital budget are based on current expectations, estimates and projections and are not guarantees of future performance. Actual results may differ materially from these expectations, estimates and projections and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Some factors that could cause actual results to differ materially include negative capital market conditions, including an increase of the current yield on common units, adversely affecting the Partnership’s ability to meet its distribution growth guidance; the time, costs and ability to obtain regulatory or other approvals and consents and otherwise consummate the strategic initiatives discussed herein and other proposed transactions; the satisfaction or waiver of conditions in the agreements governing the strategic initiatives discussed herein and other proposed transactions; our ability to achieve the strategic and other objectives related to the strategic initiatives and transactions discussed herein, including the dropdown from MPC and the proposed exchange of common units for MPC’s economic interests in the general partner, the joint venture with Antero Midstream, the Ozark pipeline acquisition, and other proposed transactions; adverse changes in laws including with respect to tax and regulatory matters; the inability to agree with respect to the timing of and value attributed to assets identified for dropdown and/or the economic interests in the general partner; the adequacy of the Partnership’s capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions, and the ability to successfully execute its business plans and growth strategy; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; civil protests and resulting legal/regulatory uncertainty regarding environmental and social issues, including pipeline infrastructure, may prevent or delay the construction and operation of such infrastructure and realization of associated revenues; completion of midstream infrastructure by 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 the Partnership’s commercial agreements; modifications to earnings and distribution growth objectives; the level of support from MPC, including dropdowns, alternative financing arrangements, taking equity units, and other methods of sponsor support, as a result of the capital allocation needs of the enterprise as a whole and its ability to provide support on commercially reasonable terms; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; changes to the Partnership’s capital budget; prices of and demand for natural gas, NGLs, crude oil and refined products; delays in obtaining necessary third-party approvals and governmental permits; changes in labor, material and equipment costs and availability; planned and unplanned outages, the delay of, cancellation of or failure to implement planned capital projects; project overruns, disruptions or interruptions of our operations due to the shortage of skilled labor; unforeseen hazards such as weather conditions, acts of war or terrorist acts and the governmental or military response; and other operating and economic considerations. These factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements. For additional information on forward-looking statements and risks that can affect our business, see “Disclosures Regarding Forward-Looking Statements” and Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2016.resources.

TRANSACTIONS WITH RELATED PARTIES

At ~~September 30, 2017,~~March 31, 2019, MPC held ~~a two~~64 percent ~~GP Interest~~of the outstanding MPLX LP common units and ~~a 28.4 percent limited~~the non-economic general partner ~~interest in MPLX LP.~~interest.

Excluding revenues attributable to volumes shipped by MPC under joint tariffs with third parties that are treated as third-party revenues for accounting purposes, MPC accounted for 3648 percent and 4044 percent of our total revenues and other income for the ~~third~~first quarter of ~~2017~~2019 and ~~2016,~~2018, respectively. We provide ~~to MPC~~ crude oil and product pipeline transportation services based on regulated tariff rates and storage services and inland marine transportation based on contracted rates.

Of our total costs and expenses, MPC accounted for 2227 percent and 25 percent for the ~~third~~first quarter of ~~2017~~2019 and ~~2016,~~2018, respectively. MPC performed certain services for us related to information technology, engineering, legal, accounting, treasury, human resources and other administrative services.

~~We believe that transactions with related parties were conducted under terms comparable to those with unrelated parties.~~ For further discussion of agreements and activity with MPC and related parties see Item 1. Business in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2018 and Note 5 of the Notes to Consolidated Financial Statements in this report.

ENVIRONMENTAL MATTERS AND COMPLIANCE COSTS

We have incurred and may continue to incur substantial capital, operating and maintenance, and remediation expenditures as a result of environmental laws and regulations. If these expenditures, as with all costs, are not ultimately reflected in the prices of our products and services, our operating results will be adversely affected. We believe that substantially all of our competitors must comply with similar environmental laws and regulations. However, the specific impact on each competitor may vary depending on a number of factors, including, but not limited to, the age and location of its operating facilities.

As of ~~September 30, 2017,~~March 31, 2019, there have been no significant changes to our environmental matters and compliance costs since our Annual Report on Form 10-K for the year ended December 31, ~~2016, as updated by our Current Report on Form 8-K filed on May 1, 2017.~~2018.

CRITICAL ACCOUNTING ESTIMATES

As of ~~September 30, 2017,~~March 31, 2019, there have been no significant changes to our critical accounting estimates since our Annual Report on Form 10-K for the year ended December 31, ~~2016, as updated by our Current Report on Form 8-K filed on May 1, 2017.~~2018.

ACCOUNTING STANDARDS NOT YET ADOPTED

As discussed in Note 2 of the Notes to Consolidated Financial Statements, certain new financial accounting pronouncements will be effective for our financial statements in the future.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

~~Market risk includes~~We are exposed to market risks related to the ~~risk~~volatility of ~~loss arising from adverse~~commodity prices. We employ various strategies, including the potential use of commodity derivative instruments, to economically hedge the risks related to these price fluctuations. We are also exposed to market risks related to changes in ~~market rates and prices. We face market risk from commodity price changes and,~~interest rates. As of March 31, 2019, we did not have any open financial derivative instruments to ~~a lesser extent,~~economically hedge the risks related to interest rate fluctuations or commodity derivative instruments to economically hedge the risks related to the volatility of commodity prices; however, we continually monitor the market and our exposure and may enter into these arrangements in the future. While there is a risk related to changes ~~and non-performance~~in fair value of derivative instruments we may enter into; such risk is mitigated by ~~our customers and counterparties.~~price or rate changes related to the underlying commodity or financial transaction.

Commodity Price Risk

The information about commodity price risk for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2019 does not differ materially from that discussed in Item 7A. Quantitative and Qualitative Disclosures about Market Risk of our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

Outstanding Derivative Contracts

The following tables provide information on the volume of our derivative activity for positions related to long liquids price risk at September 30, 2017, including the weighted-average prices (“WAVG”):

WTI Crude Swaps Volumes (Bbl/d) WAVG Price
(Per Bbl) Fair Value
(in thousands)
2017 (Oct - Dec) 200
$ 54.25
$ 42

Natural Gas Swaps Volumes (MMBtu/d) WAVG Price
(Per MMBtu) Fair Value
(in thousands)
2017 (Oct - Dec) 1,832
$ 3.03
$ (30 )
2018 2,542
$ 2.78
$ 4

Ethane Swaps Volumes (Gal/d) WAVG Price
(Per Gal) Fair Value
(in thousands)
2017 (Oct - Dec) 54,600
$ 0.27
$ (47 )

Propane Swaps Volumes (Gal/d) WAVG Price
(Per Gal) Fair Value
(in thousands)
2017 (Oct - Dec) 119,932
$ 0.61
$ (3,164 )
2018 16,925
$ 0.64
$ (506 )

IsoButane Swaps Volumes (Gal/d) WAVG Price
(Per Gal) Fair Value
(in thousands)
2017 (Oct - Dec) 10,730
$ 0.81
$ (236 )
2018 1,655
$ 0.80
$ (38 )

Normal Butane Swaps Volumes (Gal/d) WAVG Price
(Per Gal) Fair Value
(in thousands)
2017 (Oct - Dec) 31,622
$ 0.75
$ (823 )
2018 4,595
$ 0.75
$ (120 )

Natural Gasoline Swaps Volumes (Gal/d) WAVG Price
(Per Gal) Fair Value
(in thousands)
2017 (Oct - Dec) 41,827
$ 1.13
$ (346 )
2018 3,089
$ 1.18
$ (20 )

We have a ~~commodity contract~~natural gas purchase commitment embedded in a keep-whole processing agreement with a producer customer in the Southern Appalachian region ~~that creates a floor on~~expiring in December 2022. The customer has the frac spread for gas purchases of 9,000 Dth/d. The commodity contract is a component of a broader regional arrangement that also includes a keep-whole processing agreement. For accounting purposes, these contracts have been aggregated into a single contract and are evaluated together. In February 2011, we executed agreements with the producer customer to extend the commodity contract and the related processing agreement from March 31, 2015 to December 31, 2022, with the producer customer’sunilateral option to extend the agreement for two ~~successive~~consecutive five-year terms through December ~~31,~~ 2032. ~~The~~For accounting purposes, these natural gas purchase ~~of gas at prices based on the frac spread~~commitment and ~~the option to extend the agreements~~term extending options have been ~~identified as~~aggregated into a single compound embedded ~~derivative, which is recorded at fair value.~~derivative. The probability of ~~renewal~~the customer exercising its options is determined based on ~~extrapolated pricing curves, a review of the overall expected favorability of the contracts based on such pricing curves and~~ assumptions about the ~~counterparty’s~~customer’s potential

business strategy decision points that may exist at the time ~~the counterparty~~they would elect whether to renew the ~~contracts.~~contract. The changes in fair value of this compound embedded derivative are based on the difference between the contractual and index pricing, the probability of the producer customer exercising its option to extend and the estimated favorability of these contracts compared to current market conditions. The changes in fair value are recorded in earnings through ~~Purchased~~“Purchased product ~~costs~~ incosts” on the Consolidated Statements of Income. As of ~~September 30, 2017,~~March 31, 2019 and December 31, 2018, the estimated fair value of this contract was a liability of ~~$52 million.~~$65 million and $61 million, respectively.

We have a commodity contract that gives us an option to fix a component of the utilities cost to an index price on electricity at a plant location in the Southwest through the fourth quarter of 2018. The contract’s pricing is currently fixed through the fourth quarter of 2017 with the ability to fix the pricing for its remaining year. Changes in the fair value as of the derivative component of this contract were recognized as ~~Cost of Revenues~~ ~~in the Consolidated Statements of Income.~~ Open Derivative Positions and Sensitivity Analysis

As of ~~September 30, 2017, the estimated fair value~~March 31, 2019, we have no open commodity derivative contracts. We evaluate our portfolio of ~~this contract was a liability~~commodity derivative instruments on an ongoing basis and add or revise strategies in anticipation of ~~less than $1 million.~~changes in market conditions and in risk profiles.

Interest Rate Risk

Sensitivity analysis of the effect of a hypothetical 100-basis-point change in interest rates on long-term debt, excluding ~~capital~~finance leases, is provided in the following table. Fair value of cash and cash equivalents, receivables, accounts payable and accrued interest approximate carrying value and are relatively insensitive to changes in interest rates due to the short-term maturity of the instruments. Accordingly, these instruments are excluded from the table.


(In millions)	Fair value as of September 30, 2017⁽¹⁾		Change in Fair Value⁽²⁾		Change in Income Before Income Taxes for the Nine Months Ended September 30, 2017⁽³⁾		Fair value as of Fair value as of March 31, 2019⁽¹⁾		Change in Fair Value⁽²⁾		Change in Income Before Income Taxes for the Three Months Ended March 31, 2019⁽³⁾
Long-term debt
Fixed-rate	$	7,199	$	575	N/A		$	14,005	$	1,475	N/A
Variable-rate	$	420	N/A		$	2	$	425	N/A		$	—


(1)	Fair value was based on market prices, where available, or current borrowing rates for financings with similar terms and maturities.


(2)	Assumes a 100-basis-point decrease in the weighted average yield-to-maturity at ~~September 30, 2017.~~March 31, 2019.


(3)	Assumes a 100-basis-point change in interest rates. The change to net income was based on the weighted average balance of all outstanding variable-rate debt for the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2019.

Table of Contents

At ~~September 30, 2017,~~March 31, 2019, our portfolio of long-term debt consisted of fixed-rate instruments and variable-rate instruments under our ~~term loan~~revolving credit facility. The fair value of our fixed-rate debt is relatively sensitive to interest rate fluctuations. Our sensitivity to interest rate declines and corresponding increases in the fair value of our debt portfolio unfavorably affects our results of operations and cash flows only when we elect to repurchase or otherwise retire fixed-rate debt at prices above carrying value. Interest rate fluctuations generally do not impact the fair value of borrowings under our bank revolving credit or term loan facilities, but may affect our results of operations and cash flows. As of ~~September 30, 2017,~~March 31, 2019, we did not have any financial derivative instruments to hedge the risks related to interest rate fluctuations; however, we continually monitor the market and our exposure and may enter into these agreements in the future.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended) was carried out under the supervision and with the participation of management, including the chief executive officer and chief financial officer of our general partner. Based upon that evaluation, the chief executive officer and chief financial officer of our general partner concluded that the design and operation of these disclosure controls and procedures were effective as of ~~September 30, 2017~~March 31, 2019, the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

During the quarter ended ~~September 30, 2017,~~March 31, 2019, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II – Other Information

Item 1. Legal Proceedings

We are the subject of, or a party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment.

~~As previously reported in our Annual Report on Form 10-K~~In 2003, the State of Illinois brought an action against the Premcor Refining Group, Inc. (“Premcor”) and Apex Refining Company (“Apex”) asserting claims for the year ended December 31, 2016, in July 2015, representatives from the EPA and the United States Department of Justice conducted a raid on a MarkWest Liberty Midstream pipeline launcher/receiver site utilized for pipeline maintenance operations in Washington County, Pennsylvania pursuant to a search warrant issued by a magistrate of the United States District Court for the Western District of Pennsylvania. As part of this initiative, the U.S. Attorney’s Office for the Western District of Pennsylvania proceeded with an investigation of MarkWest Liberty Midstream’s launcher/receiver, pipeline and compressor station operations. In responseenvironmental cleanup related to the ~~investigation, MarkWest initiated independent studies~~refinery owned by these entities in the Hartford/Wood River, Illinois area. In 2006, Premcor and Apex filed third-party complaints against numerous owners and operators of petroleum products facilities in the Hartford/Wood River, Illinois area, including Marathon Pipe Line LLC (“MPL”). These complaints, which ~~demonstrated~~have been amended since filing, assert claims of common law nuisance and contribution under the Illinois Contribution Act and other laws for environmental cleanup costs that ~~there was no risk to worker safety~~may be imposed on Premcor and ~~no threat of public harm associated with MarkWest Liberty Midstream’s launcher/receiver operations. These findings were supported by a subsequent inspection and review~~Apex by the Occupational Safety and Health Administration. After providing these studies, and other substantial documentation related to MarkWest Liberty Midstream's pipeline and compressor stations, and arranging site visits and conducting several meetings with the government’s representatives, onState of Illinois. On September ~~13,~~6, 2016, the ~~U.S. Attorney’s Office for the Western District of Pennsylvania rendered~~trial court approved a ~~declination decision, dropping its criminal investigation and declining to pursue charges in this matter.~~

~~MarkWest Liberty Midstream continues to discuss with the EPA~~settlement between Apex and the State of Pennsylvania civil enforcement allegations associated with permitting or other related regulatory obligations for its launcher/receiver and compressor station facilities in the region. In connection with these discussions, MarkWest Liberty Midstream received an initial proposal from the EPAIllinois whereby Apex agreed to settle all ~~civil~~ claims ~~associated~~against it for a $10 million payment. Premcor filed a motion for permissive appeal and requested a stay to the proceeding until the motion is ruled upon. Premcor reached a settlement with the State of Illinois in the second quarter of 2018, which has been objected to by certain third-party defendants, including MPL, and is subject to court approval. Several third-party defendants in the litigation including MPL have asserted cross-claims in contribution against the various third-party defendants. This litigation is currently pending in the Third Judicial Circuit Court, Madison County, Illinois. The trial concerning Premcor’s claims against third-party defendants, including MPL, previously scheduled to commence September 10, 2018, has been postponed and a new trial date has not been set. While the ultimate outcome of these litigated matters remains uncertain, neither the likelihood of an unfavorable outcome nor the ultimate liability, if any, with respect to this matter can be determined at this time and MPLX is unable to estimate a reasonably possible loss (or range of loss) for this litigation. Under the omnibus agreement, MPC will indemnify MPLX for the ~~combination of a proposed cash penalty of approximately $2.4 million and proposed supplemental environmental projects with an estimated~~full cost of ~~approximately $3.6 million. MarkWest Liberty Midstream has submitted a response asserting that~~any losses should MPL be deemed responsible for any damages in this ~~action involves novel issues surrounding primarily minor source emissions~~lawsuit.

In the first quarter of 2019, we entered into an agreement to settle NOVs received from ~~facilities that~~ the ~~agencies themselves considered de minimis and were not the subject~~West Virginia Department of ~~regulation and consequently that the settlement proposal is excessive. In~~Environmental Protection relating to earth disturbance activities in connection with ~~these negotiations, MarkWest Liberty Midstream has received a revised settlement proposal from~~construction of an NGL line. We expect to make the ~~EPA which proposes to lower~~$124,030 penalty payment in the ~~proposed cash penalty to approximately $1.24 million and the estimated cost~~second quarter of proposed supplemental environmental projects to an estimated cost of approximately $1.6 million. MarkWest Liberty Midstream will continue to negotiate with EPA regarding the amount and scope of the proposed settlement.2019.

Item 1A. Risk Factors

~~We are subject to various risks and uncertainties in~~There have been no material changes from the ~~course of our business. The discussion of such risks and uncertainties may be found under Item 1A. Risk Factors~~risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018 other than the risks described below related to the pending MPLX and ANDX merger.

The pending merger between MPLX and ANDX (the “MLP Merger”) is subject to conditions, including certain conditions that may not be satisfied or completed on a timely basis, if at all. Failure to complete the MLP merger could have a material and adverse effect on us and, even if completed, the MLP merger may not achieve some or all of the anticipated benefits.

On May 8, 2019, we, together with MPLX and ANDX, announced the MLP Merger. Completion of the MLP Merger is subject to a number of customary conditions set forth in the MLP Merger Agreement, including approval by a majority of ANDX’s unitholders, MPLX’s registration statement on Form S-4 having become effective under the Securities Act of 1933, the approval to list MPLX units issuable in connection with the MLP Merger on the New York Stock Exchange, the absence of any governmental order or law prohibiting the consummation of the MLP Merger, the accuracy of each party’s representations and warranties under the MLP Merger Agreement (subject to the materiality standards set forth in the MLP Merger Agreement), MPLX’s and ANDX’s performance of their respective obligations under the MLP Merger Agreement in all material respects, and the receipt by both parties from their respective counsels of a written opinion regarding the U.S. federal income tax treatment of the transaction. These and other conditions to the closing of the MLP Merger may not be fulfilled in a timely manner or at all, and, accordingly, the MLP Merger may be delayed or may not be completed.

If the MLP Merger is not completed, our ongoing businesses may be adversely affected and, without realizing any of the benefits of having completed the MLP Merger, we will be subject to a number of risks, including the following:

we will be required to pay our costs relating to the MLP Merger, such as legal, accounting and financial advisory expenses, whether or not MLP Merger is completed;

time and resources committed by our management to matters relating to MLP Merger could otherwise have been devoted to pursuing other beneficial opportunities; and

the market price of our common units could decline to the extent that the current market price reflects a market assumption that the MLP Merger will be completed.

In addition, even if completed there can be no assurance that the MLP Merger will deliver the strategic, financial and operational benefits anticipated by us.

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~~Item 2. Unregistered Sales of Equity Securities~~

In connection with the issuance of 14,887 common units upon the vesting of phantom units under the MPLX LP 2012 Incentive Compensation Plan, 359,179 common units as a result of the conversion of Class B units to common units and 1,184,335 common units under the ATM Program, our general partner purchased an aggregate of 31,803 general partner units for $1,059,390.81 in cash during the three months ended September 30, 2017, to maintain its two percent general partner interest in us. The general partner units were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

On September 1, 2017, in connection with the Joint-Interest Acquisition, we issued 377,778 general partner units to our general partner. The number of general partner units issued were calculated by dividing $12,600,000 by 33.3529, the simple average of the ten day trading volume weighted average NYSE price of an MPLX LP common unit for the ten trading days ending at market close on August 31, 2017. The general partner units were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

~~Item 5. Other Information~~

~~Amended Restricted Stock Award Agreement~~

On October 26, 2017, C. Corwin Bromley entered into an Amended Restricted Stock Award Agreement with MPC (the “Amended Award Agreement”) to provide for the immediate vesting of a restricted stock award upon Mr. Bromley’s retirement effective January 1, 2018, which was announced by MPLX LP (the “Partnership”) on August 4, 2017. Mr. Bromley was a named executive officer in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2016.

The foregoing description of the Amended Award Agreement is summary in nature and subject to, and qualified in its entirety by, the full text of the Amended Award Agreement, a copy of which is attached as Exhibit 10.2 to this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2017 and is incorporated herein by reference.

~~MPLX LP Executive Change in Control Severance Benefits Plan~~

Effective October 26, 2017, the board of directors of Marathon Petroleum Corporation (the “Corporation”) and the board of directors of MPLX GP LLC, the general partner (the “General Partner”) of MPLX LP (“the Partnership”), adopted the MPLX LP Executive Change in Control Severance Benefits Plan (the “MPLX Plan”).

The purpose of the MPLX Plan is to recognize the contributions of the senior executives who provide services to the Corporation or the Partnership and to assure the continued provision of services by these senior executives. The MPLX Plan is intended to operate as a companion plan to the Marathon Petroleum Corporation Amended and Restated Executive Change in Control Severance Benefits Plan (the “MPC Plan”). It is intended that the MPLX Plan shall not result in a duplication of benefits in the event a participant would be eligible to receive benefits under both the MPLX Plan and the MPC Plan. The following is a summary of the MPLX Plan:

~~The MPLX Plan applies to certain senior executives who provide services to the Partnership, the Corporation or any of their respective subsidiaries or affiliates.~~

A participant is generally entitled to receive benefits under the MPLX Plan if within two years following a Partnership Change in Control (as defined in the MPLX Plan), the participant’s employment is terminated without cause or for good reason, with good reason generally being defined in the MPLX Plan as a reduction in the participant’s roles, responsibilities, pay or benefits or the participant is required to relocate more than 50 miles from his or her current location. However, benefits are not payable if the termination is for cause or due to mandatory retirement, death, disability or resignation (other than for good reason) by the participant.

In addition to any earned but unpaid salary, a lump sum cash amount equal to the value of the participant’s unused vacation days and any normal post-termination compensation and benefits under the retirement, insurance and other compensation and benefit plans in which the participant participates, upon a Partnership Change in Control and Qualified Termination (as defined in the MPLX Plan), participants are eligible to receive: (i) a cash payment equal to three times the sum of the participant’s base salary and the highest bonus paid in the three years before the Qualified Termination or, if higher, in the three years before the Partnership Change in Control; (ii) life and health insurance benefits for up to 36 months after termination at the active employee cost; (iii) benefits that are equivalent to the retiree medical and life benefit provided under the MPC Plan; and (iv) a cash payment that is equivalent to the supplemental retirement benefit and supplemental savings benefit provided under the MPC Plan.

Participants who incur a Qualified Termination or who separate from service with all of the Partnership, the General Partner and any applicable buyer or successor entity within two years after the Partnership Change in Control under circumstances that would have resulted in a Qualified Termination had such separation occurred at the time of the Partnership Change in Control and participants who remain in service with the Corporation (and its affiliates) following the Partnership Change in Control may become eligible for the following benefits: (i) all Partnership equity awards that vest based solely upon the passage of time will be become vested and exercisable; and (ii) all Partnership equity awards that vest based on the attainment of performance goals will become vested as to the entire award with payment as follows (a) with respect to the period prior to the Partnership Change in Control (“Pre-CiC Period”), the award will be determined using actual performance during the Pre-CiC Period; and (b) with respect to the period after the Partnership Change in Control, the award will be determined assuming performance goals were satisfied at target levels. Participants who incur a Qualified Termination and participants who remain in or commence services with the Partnership, General Partner or any applicable buyer or successor entity (or any of their affiliates) following the Partnership Change in Control are eligible for the following benefits: (i) all Corporation equity awards will become vested and exercisable; (ii) the vesting of any Corporation equity awards that otherwise would vest based on the attainment of performance goals shall remain subject to the attainment of applicable performance goals at the end of the regularly scheduled performance period.

The Corporation and the General Partner may at any time amend or terminate the MPLX Plan, provided that, for a period of two years following a Partnership Change in Control, the MPLX Plan may not be amended in a manner adverse to a participant with respect to that Partnership Change in Control. Any amendment or termination shall be set out in an instrument in writing and executed by an appropriate officer.

The foregoing description of the MPLX Plan is summary in nature and subject to, and qualified in its entirety by, the full text of the MPLX Plan, a copy of which is attached as Exhibit 10.3 to this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2017 and is incorporated herein by reference.

Item 6. Exhibits

Incorporated by Reference
Exhibit
Number
Exhibit Description Form Exhibit Filing Date SEC File No.
Filed
Herewith

Furnished
Herewith
2.1

Membership Interests and Shares Contributions Agreement, dated September 1, 2017, between MPLX LP, MPLX Logistics Holdings LLC, MPLX Holdings Inc., MPLX GP LLC and MPC Investment LLC
8-K 2.1
9/1/2017 001-35714
3.1

Certificate of Limited Partnership of MPLX LP
S-1 3.1
7/2/2012 333-182500
3.2

Amendment to the Certificate of Limited Partnership of MPLX LP
S-1/A 3.2
10/9/2012 333-182500
3.3

Third Amended and Restated Agreement of Limited Partnership of MPLX LP, dated as of October 31, 2016
10-Q 3.3
10/31/2016 001-35714
3.4

First Amendment to Third Amended and Restated Agreement of Limited Partnership of MPLX LP, dated as of February 23, 2017
10-K 3.4
2/24/2017 001-35714
10.1

Credit Agreement, dated as of July 21, 2017, among MPLX LP, as borrower, Wells Fargo Bank, National Association, as administrative agent, each of Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., Barclays Bank PLC, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Mizuho Bank, Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd. and RBC Capital Markets, as joint lead arrangers and joint bookrunners, JPMorgan Chase Bank, N.A., as syndication agent, each of Bank of America, N.A., Barclays Bank PLC, Citigroup Global Markets Inc., Mizuho Bank, Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd., and Royal Bank of Canada, as documentation agents, and the other lenders and issuing banks that are parties thereto.
8-K 10.1
7/27/2017 001-35714
10.2

Amended Restricted Stock Award Agreement
X
10.3

MPLX LP Executive Change in Control Severance Benefits Plan
X
31.1

Certification of Chief Executive Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934
X
31.2

Certification of Chief Financial Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934
X

Incorporated by Reference

Exhibit

Number

Exhibit Description

Form

Exhibit

Filing Date

SEC File No.

Filed

Herewith

Furnished

Herewith

2.1*

Agreement and Plan of Merger, dated as of May 7, 2019, by and among Andeavor Logistics LP, Tesoro Logistics GP, LLC, MPLX LP, MPLX GP LLC and MPLX MAX LLC.

8-K

2.1

5/8/2019

001-35714

3.1

Certificate of Limited Partnership of MPLX LP

S-1

3.1

7/2/2012

333-182500

3.2

Amendment to the Certificate of Limited Partnership of MPLX LP

S-1/A

3.2

10/9/2012

333-182500

3.3

Fourth Amended and Restated Agreement of Limited Partnership of MPLX LP, dated as of February 1, 2018

8-K

3.1

2/2/2018

001-35714

10.1

MPLX LP 2018 Incentive Compensation Plan Phantom Unit Award Agreement Officer Grant (3-year pro-rata vesting)

10.2

MPLX LP 2018 Incentive Compensation Plan Performance Unit Award Agreement 2019-2021 Performance Cycle

10.3

MPLX LP 2018 Incentive Compensation Plan Phantom Unit Award Agreement Marathon Petroleum Corporation Officer (3-year pro-rata vesting)

10.4

2018 Incentive Compensation Plan Performance Unit Award Agreement 2019-2021 Performance Cycle Marathon Petroleum Corporation Officer

10.5

MPLX LP 2018 Incentive Compensation Plan MPC Non-Employee Director Phantom Unit Award Policy

10-K

10.78

2/28/2019

001-35714

10.6

MPLX GP LLC Amended and Restated Non-Management Director Compensation Policy and Director Equity Award Terms

10-K

10.79

2/28/2019

001-35714

10.7

Support Agreement, dated as of May 7, 2019, by and among MPLX LP, Andeavor Logistics LP, Tesoro Logistics GP, LLC, Western Refining Southwest, Inc. and Marathon Petroleum Corporation

8-K

10.1

5/8/2019

001-35714

31.1

Certification of Chief Executive Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934

31.2

Certification of Chief Financial Officer pursuant to Rule 13(a)-14 and 15(d)-14 under the Securities Exchange Act of 1934

7057

Table of Contents

Incorporated by Reference

Exhibit

Number

Exhibit Description

Form

Exhibit

Filing Date

SEC File No.

Filed

Herewith

Furnished

Herewith

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema

101.CAL

XBRL Taxonomy Extension Calculation Linkbase

101.DEF

XBRL Taxonomy Extension Definition Linkbase

101.LAB

XBRL Taxonomy Extension Label Linkbase

101.PRE

XBRL Taxonomy Extension Presentation Linkbase


*	Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. MPLX LP hereby undertakes to furnish supplementally a copy of any omitted schedule upon request by the SEC.

7158

Table of Contents

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 thereunto duly authorized.



	MPLX LP

	By:	MPLX GP LLC
		Its general partner

Date: ~~October 30, 2017~~May 9, 2019	By:	/s/ ~~Paula L. Rosson~~ C. Kristopher Hagedorn
		~~Paula L. Rosson~~C. Kristopher Hagedorn
		~~Senior~~ Vice President and ~~Chief Accounting Officer~~Controller of MPLX GP LLC ~~(the~~ (the general partner of MPLX LP)

7259



	Page
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Statements of Income (Unaudited)	3
Consolidated Statements of Comprehensive Income (Unaudited)	4
Consolidated Balance Sheets (Unaudited)	45
Consolidated Statements of Cash Flows (Unaudited)	56
Consolidated Statements of Equity (Unaudited)	67
Notes to Consolidated Financial Statements (Unaudited)	78
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	4335
Item 3. Quantitative and Qualitative Disclosures about Market Risk	6554
Item 4. Controls and Procedures	6655

PART II – OTHER INFORMATION
Item 1. Legal Proceedings	6755
Item 1A. Risk Factors	67
~~Item 2. Unregistered Sales of Equity Securities~~	68
~~Item 5. Other Information~~	6855
Item 6. Exhibits	7057
Signatures	7259



	Three Months Ended September 30, 2016
(In millions, except per unit data)	MPLX LP (Previously Reported)		HST/WHC		MPLXT		Eliminations⁽¹⁾			MPLX LP (Currently Reported)
Revenues and other income:
Service revenue	$	250	$	—	$	—	$	—		$	250
Service revenue - related parties	153		28		72		—			253
Rental income	77		—		—		—			77
Rental income - related parties	29		13		26		—			68
Product sales	157		—		—		—			157
Product sales - related parties	2		—		—		—			2
Income from equity method investments	6		—		—		—			6
Gain on sale of assets	1		—		—		—			1
Other income	2		—		—		—			2
Other income - related parties	26		—		—		(4		)	22
Total revenues and other income	703		41		98		(4		)	838
Costs and expenses:
Cost of revenues (excludes items below)	90		10		22		—			122
Purchased product costs	117		—		—		—			117
Rental cost of sales	11		2		—		—			13
Rental cost of sales - related parties	—		1		—		(1		)	—
Purchases - related parties	84		4		24		(3		)	109
Depreciation and amortization	138		4		9		—			151
General and administrative expenses	46		2		8		—			56
Other taxes	10		—		2		—			12
Total costs and expenses	496		23		65		(4		)	580
Income from operations	207		18		33		—			258
Interest expense (net of amounts capitalized)	51		—		—		—			51
Other financial costs	13		—		—		—			13
Income before income taxes	143		18		33		—			194
Net income	143		18		33		—			194
Less: Net income attributable to noncontrolling interests	2		—		—		—			2
Less: Net income attributable to Predecessor	—		18		33		—			51
Net income attributable to MPLX LP	141		—		—		—			141
Less: Preferred unit distributions	16		—		—		—			16
Less: General partner’s interest in net income attributable to MPLX LP	51		—		—		—			51
Limited partners’ interest in net income attributable to MPLX LP	$	74	$	—	$	—	$	—		$	74



(In millions)	Three Months Ended September 30, 2017		Seven Months Ended September 30, 2017
Revenues and other income	$	19	$	45
Income from operations	6		17



(In units)	Common	Class B		General Partner	Total
Balance at December 31, 2016	357,193,288	3,990,878		7,371,105	368,555,271
Unit-based compensation awards⁽¹⁾	183,509	—		3,745	187,254
Issuance of units under the ATM Program⁽²⁾	13,846,998	—		282,591	14,129,589
Contribution of HST/WHC/MPLXT⁽³⁾	12,960,376	—		264,497	13,224,873
Contribution of the Joint-Interest Acquisition⁽³⁾	18,511,134	—		377,778	18,888,912
Class B conversion⁽⁴⁾	4,350,057	(3,990,878	)	7,330	366,509
Balance at September 30, 2017	407,045,362	—		8,307,046	415,352,408



(In millions)
December 31, 2017	$	8
March 31, 2018	11
June 30, 2018	11
September 30, 2018	10
December 31, 2018	4
March 31, 2019	3
June 30, 2019	4
September 30, 2019	4
Total	$	55



	Fee-Based		Percent-of-Proceeds⁽¹⁾		Keep-Whole⁽²⁾
L&S	100	%	—	%	—	%
G&P⁽³⁾	86	%	12	%	2	%
Total	92	%	7	%	1	%



WTI Crude Swaps	Volumes (Bbl/d)	WAVG Price (Per Bbl)		Fair Value (in thousands)
2017 (Oct - Dec)	200	$	54.25	$	42



Natural Gas Swaps	Volumes (MMBtu/d)	WAVG Price (Per MMBtu)		Fair Value (in thousands)
2017 (Oct - Dec)	1,832	$	3.03	$	(30	)
2018	2,542	$	2.78	$	4



Ethane Swaps	Volumes (Gal/d)	WAVG Price (Per Gal)		Fair Value (in thousands)
2017 (Oct - Dec)	54,600	$	0.27	$	(47	)



Propane Swaps	Volumes (Gal/d)	WAVG Price (Per Gal)		Fair Value (in thousands)
2017 (Oct - Dec)	119,932	$	0.61	$	(3,164	)
2018	16,925	$	0.64	$	(506	)



IsoButane Swaps	Volumes (Gal/d)	WAVG Price (Per Gal)		Fair Value (in thousands)
2017 (Oct - Dec)	10,730	$	0.81	$	(236	)
2018	1,655	$	0.80	$	(38	)



Normal Butane Swaps	Volumes (Gal/d)	WAVG Price (Per Gal)		Fair Value (in thousands)
2017 (Oct - Dec)	31,622	$	0.75	$	(823	)
2018	4,595	$	0.75	$	(120	)



Natural Gasoline Swaps	Volumes (Gal/d)	WAVG Price (Per Gal)		Fair Value (in thousands)
2017 (Oct - Dec)	41,827	$	1.13	$	(346	)
2018	3,089	$	1.18	$	(20	)