Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 _____________________________________________
FORM 10-Q
 _____________________________________________
(Mark One)
____________________________________________
x(Mark One)
☒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

2021
OR
¨☐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)
 _____________________________________________
DelawareDelaware27-0005456
(State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer

Identification No.)
200 E. Hardin Street, Findlay, OhioFindlay,Ohio45840
(Address of principal executive offices)(Zip code)
(419) 421-2414
(Registrant’s telephone number, including area code)
 _____________________________________________
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 InterestsMPLXNew York Stock Exchange
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 filerxAccelerated 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


MPLX LP had 407,066,3201,019,863,638 common units and 8,307,473 general partner units outstanding at October 27, 2017.



MPLX LP
Form 10-Q
Quarter Ended September 30, 2017

INDEX

29, 2021.

Table of Contents
Table of Contents
Page
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)
79
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations
4332
Item 3.   Quantitative and Qualitative Disclosures about Market Risk
6555
Item 4.   Controls and Procedures
6656
Item 1.    Legal Proceedings
6757
Item 1A. Risk Factors
6757
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
6858
Item 5. Other Information
68
Item 6.    Exhibits
7059
Signatures
7260


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 Terminalsubsidiaries. 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 interestsbeen defined in a numberour 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.


1


Table of Contents


Glossary of Terms


The abbreviations, acronyms and industry technology used in this report are defined as follows.
ATM ProgramASCA continuous offering, or at-the-market program, by which the Partnership may offer common units in amounts, at prices and on terms to be determined by market conditions and other factors at the time of any offeringsAccounting Standards Codification
BblASUBarrelsAccounting Standards Update
BarrelOne stock tank barrel, or 42 U.S. gallons of liquid volume, used in reference to crude oil or other liquid hydrocarbons
Bcf/dOne billion cubic feet of natural gas per day
BtuOne British thermal unit, an energy measurement
CondensateA 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/dDekatherms per day
EBITDA (a non-GAAP financial measure)Earnings Before Interest, Taxes, Depreciation and Amortization
EPAUnited States Environmental Protection Agency
FASB
FASBFinancial Accounting Standards Board
GAAPAccounting principles generally accepted in the United States of America
GalGallon
Gal/dGallons per day
IDRIncentive distribution right
Initial OfferingInitial public offering on October 31, 2012
LIBORG&PGathering and Processing segment
LIBORLondon Interbank Offered Rate
MarkWest MergerL&SOn December 4, 2015, a wholly-owned subsidiary of the Partnership merged with MarkWest Energy Partners, L.P.Logistics and Storage segment
mbpdThousand barrels per day
MMBtu
MMBtuOne million British thermal units, an energy measurement
MMcf/dOne million cubic feet of natural gas per day
Net operating margin (a non-GAAP financial measure)NGLSegment revenues, less segment purchased product costs, less realized derivative gains (losses) related to purchased product costs
NGLNatural gas liquids, such as ethane, propane, butanes and natural gasoline
NYSENew York Stock Exchange
OTCOver-the-Counter
Partnership AgreementThird Amended and Restated Agreement of Limited Partnership of MPLX LP, dated as of October 31, 2016, as amended
Predecessor
Collectively:
- HSM’s related assets, liabilities and results of operations prior to the date of its acquisition, March 31, 2016, effective January 1, 2015.
- HST’s, WHC’s and MPLXT’s related assets, liabilities and results of operations prior to the date of the acquisition, March 1, 2017, effective January 1, 2015 for HST and WHC and April 1, 2016 for MPLXT.
Realized derivative gain/lossThe gain or loss recognized when a derivative matures or is settled
SECUnited StatesU.S. Securities and Exchange Commission
SMRSteam methane reformer, operated by a third party and located at the Javelina gas processing and fractionation complex in Corpus Christi, Texas
Unrealized derivative gain/lossThe gain or loss recognized on a derivative due to changes in fair value prior to the instrument maturing or settling
VIEVariable interest entity
WTIWholesale ExchangeWest Texas IntermediateThe transfer to MPC of the Western wholesale distribution business, which MPLX acquired as a result of its acquisition of ANDX, on July 31, 2020.



2


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,
(In millions, except per unit data)2021202020212020
Revenues and other income:
Service revenue$600 $604 $1,767 $1,779 
Service revenue - related parties902 909 2,681 2,694 
Service revenue - product related82 41 235 102 
Rental income88 102 286 296 
Rental income - related parties164 241 574 712 
Product sales448 165 1,034 454 
Product sales - related parties26 37 99 100 
Sales-type lease revenue - related parties132 38 305 114 
Income/(loss) from equity method investments(1)
92 83 228 (1,012)
Other income (loss)(2)2 2 5 
Other income - related parties27 25 82 76 
Total revenues and other income2,559 2,247 7,293 5,320 
Costs and expenses:
Cost of revenues (excludes items below)298 323 864 1,006 
Purchased product costs421 152 1,035 374 
Rental cost of sales33 33 97 101 
Rental cost of sales - related parties24 32 86 119 
Purchases - related parties307 297 902 853 
Depreciation and amortization324 346 971 992 
Impairment expense— — 42 2,165 
General and administrative expenses94 96 267 289 
Restructuring expenses— 36 — 36 
Other taxes27 33 93 94 
Total costs and expenses1,528 1,348 4,357 6,029 
Income/(loss) from operations1,031 899 2,936 (709)
Related party interest and other financial costs2 — 4 4 
Interest expense (net of amounts capitalized of $2 million, $8 million, $12 million and $31 million respectively)197 207 590 624 
Other financial costs21 17 67 49 
Income/(loss) before income taxes811 675 2,275 (1,386)
Provision for income taxes— 1 1 1 
Net income/(loss)811 674 2,274 (1,387)
Less: Net income attributable to noncontrolling interests9 9 27 24 
Net income/(loss) attributable to MPLX LP802 665 2,247 (1,411)
Less: Series A preferred unitholders interest in net income38 20 79 61 
Less: Series B preferred unitholders interest in net income10 10 31 31 
Limited partners’ interest in net income/(loss) attributable to MPLX LP$754 $635 $2,137 $(1,503)
Per Unit Data (See Note 7)
Net income/(loss) attributable to MPLX LP per limited partner unit:
Common - basic$0.74 $0.61 $2.07 $(1.43)
Common - diluted$0.74 $0.61 $2.07 $(1.43)
Weighted average limited partner units outstanding:
Common - basic1,024 1,046 1,030 1,054 
Common - diluted1,025 1,047 1,030 1,054 
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
(In millions, except per unit data)2017 
2016(1)
 2017 
2016(1)
Revenues and other income:       
Service revenue$299
 $250
 $845
 $712
Service revenue - related parties276
 253
 801
 676
Rental income69
 77
 208
 218
Rental income - related parties70
 68
 207
 172
Product sales217
 157
 611
 394
Product sales - related parties2
 2
 6
 8
Gain on sale of assets—
 1
 1
 1
Income (loss) from equity method investments23
 6
 29
 (72)
Other income2
 2
 5
 5
Other income - related parties22
 22
 69
 67
Total revenues and other income980
 838
 2,782
 2,181
Costs and expenses:       
Cost of revenues (excludes items below)129
 122
 381
 329
Purchased product costs170
 117
 441
 310
Rental cost of sales19
 13
 44
 42
Rental cost of sales - related parties—
 —
 1
 1
Purchases - related parties114
 109
 330
 286
Depreciation and amortization164
 151
 515
 438
Impairment expense—
 —
 —
 130
General and administrative expenses59
 56
 174
 172
Other taxes14
 12
 40
 37
Total costs and expenses669
 580
 1,926
 1,745
Income from operations311
 258
 856
 436
Related party interest and other financial costs1
 —
 1
 1
Interest expense (net of amounts capitalized of $6 million, $7 million, $24 million and $21 million, respectively)77
 51
 217
 158
Other financial costs15
 13
 40
 37
Income before income taxes218
 194
 598
 240
Provision (benefit) for income taxes1
 —
 3
 (12)
Net income217
 194
 595
 252
Less: Net income attributable to noncontrolling interests1
 2
 3
 3
Less: Net income attributable to Predecessor—
 51
 36
 149
Net income attributable to MPLX LP216
 141
 556
 100
Less: Preferred unit distributions16
 16
 49
 25
Less: General partner’s interest in net income attributable to MPLX LP86
 51
 222
 136
Limited partners’ interest in net income (loss) attributable to MPLX LP$114
 $74
 $285
 $(61)
Per Unit Data (See Note 6)       
Net income (loss) attributable to MPLX LP per limited partner unit:       
Common - basic$0.29
 $0.22
 $0.75
 $(0.19)
Common - diluted0.29
 0.21
 0.75
 (0.19)
Weighted average limited partner units outstanding:       
Common - basic394
 341
 378
 324
Common - diluted395
 346
 381
 324
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.
(1)     The accompanying notes are an integral partnine months ended September 30, 2021 and September 30, 2020 include $6 million and $1,264 million of these consolidated financial statements.impairment expense, respectively.

3



MPLX LP
Consolidated Balance Sheets (Unaudited)
(In millions)September 30, 2017 December 31, 2016
Assets   
Current assets:   
Cash and cash equivalents$3
 $234
Receivables, net320
 299
Receivables - related parties152
 247
Inventories64
 55
Other current assets32
 33
Total current assets571
 868
Equity method investments3,997
 2,471
Property, plant and equipment, net11,922
 11,408
Intangibles, net463
 492
Goodwill2,245
 2,245
Long-term receivables - related parties18
 11
Other noncurrent assets22
 14
Total assets$19,238
 $17,509
Liabilities   
Current liabilities:   
Accounts payable$152
 $140
Accrued liabilities202
 232
Payables - related parties317
 87
Deferred revenue3
 2
Deferred revenue - related parties42
 38
Accrued property, plant and equipment183
 146
Accrued taxes44
 38
Accrued interest payable64
 53
Other current liabilities41
 27
Total current liabilities1,048
 763
Long-term deferred revenue34
 12
Long-term deferred revenue - related parties40
 19
Long-term debt6,848
 4,422
Deferred income taxes7
 6
Deferred credits and other liabilities175
 177
Total liabilities8,152
 5,399
Commitments and contingencies (see Note 17)
 
Redeemable preferred units1,000
 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’ capital9,941
 11,092
Noncontrolling interests145
 18
Total equity10,086
 11,110
Total liabilities, preferred units and equity$19,238
 $17,509


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

3
4

Table of Contents


MPLX LP
Consolidated Statements of Cash FlowsComprehensive Income (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 costs38
 34
Depreciation and amortization515
 438
Impairment expense—
 130
Deferred income taxes2
 (16)
Asset retirement expenditures(2) (4)
Gain on disposal of assets(1) (1)
(Income) loss from equity method investments(29) 72
Distributions from unconsolidated affiliates136
 111
Changes in:   
Current receivables(20) (43)
Inventories(3) (4)
Fair value of derivatives(3) 28
Current accounts payable and accrued liabilities6
 64
Receivables from / liabilities to related parties61
 (104)
All other, net43
 18
Net cash provided by operating activities1,338
 975
Investing activities:   
Additions to property, plant and equipment(1,004) (943)
Acquisitions, net of cash acquired(249) —
Disposal of assets4
 —
Investments - net related party loans80
 103
Investments in unconsolidated affiliates(690) (56)
Distributions from unconsolidated affiliates - return of capital24
 —
All other, net(2) 4
Net cash used in investing activities(1,837) (892)
Financing activities:   
Long-term debt - borrowings2,661
 434
    - repayments(251) (1,312)
Related party debt - borrowings829
 2,215
     - repayments(627) (2,223)
Debt issuance costs(25) —
Net proceeds from equity offerings483
 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 interests128
 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 activities268
 82
Net (decrease) increase in cash and cash equivalents(231) 165
Cash and cash equivalents at beginning of period234
 43
Cash and cash equivalents at end of period$3
 $208
Three Months Ended 
September 30,		Nine Months Ended 
September 30,
(In millions)2021202020212020
Net income/(loss)$811 $674 $2,274 $(1,387)
Other comprehensive income/(loss), net of tax:
Remeasurements of pension and other postretirement benefits related to equity method investments, net of tax— — (2)(1)
Comprehensive income/(loss)811 674 2,272 (1,388)
Less comprehensive income attributable to:
Noncontrolling interests9 9 27 24 
Comprehensive income/(loss) attributable to MPLX LP$802 $665 $2,245 $(1,412)


(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.


5
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Table of Contents


MPLX LP
Consolidated Statements of EquityBalance Sheets (Unaudited)
(In millions)September 30, 2021December 31, 2020
Assets
Current assets:
Cash and cash equivalents$39 $15 
Receivables, net617 452 
Current assets - related parties645 677 
Inventories141 118 
Assets held for sale20 188 
Other current assets54 65 
Total current assets1,516 1,515 
Equity method investments4,001 4,036 
Property, plant and equipment, net20,158 21,218 
Intangibles, net864 959 
Goodwill7,657 7,657 
Right of use assets, net282 309 
Noncurrent assets - related parties1,160 672 
Other noncurrent assets61 48 
Total assets35,699 36,414 
Liabilities
Current liabilities:
Accounts payable177 152 
Accrued liabilities332 194 
Current liabilities - related parties1,706 356 
Accrued property, plant and equipment66 84 
Long-term debt due within one year1 764 
Accrued interest payable188 222 
Operating lease liabilities61 63 
Liabilities held for sale— 101 
Other current liabilities190 150 
Total current liabilities2,721 2,086 
Long-term deferred revenue366 314 
Long-term liabilities - related parties297 283 
Long-term debt18,253 19,375 
Deferred income taxes11 12 
Long-term operating lease liabilities220 244 
Deferred credits and other liabilities155 115 
Total liabilities22,023 22,429 
Commitments and contingencies (see Note 19)00
Series A preferred units986 968 
Equity
Common unitholders - public (374 million and 391 million units issued and outstanding)8,919 9,384 
Common unitholders - MPC (647 million and 647 million units issued and outstanding)2,944 2,792 
Series B preferred units (.6 million and .6 million units issued and outstanding)601 611 
Accumulated other comprehensive loss(17)(15)
Total MPLX LP partners’ capital12,447 12,772 
Noncontrolling interests243 245 
Total equity12,690 13,017 
Total liabilities, preferred units and equity$35,699 $36,414 
 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 Program499
 —
 —
 —
 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 conversion133
 (133) —
 —
 —
 —
 —
 —
 —
Non-cash contribution from MPC—
 —
 —
 —
 —
 —
 —
 334
 334
Equity-based compensation6
 —
 —
 —
 —
 —
 —
 —
 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 Program473
 —
 —
 —
 10
 —
 —
 —
 483
Net income212
 —
 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 conversion133
 (133) —
 —
 —
 —
 —
 —
 —
Equity-based compensation5
 —
 —
 —
 —
 —
 —
 —
 5
Balance at September 30, 2017$8,457
 $—
 $1,302

$822
 $(626) $(14) $145
 $—
 $10,086


(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.

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Table of Contents
MPLX LP
Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended 
September 30,
(In millions)20212020
Increase/(decrease) in cash, cash equivalents and restricted cash
Operating activities:
Net income/(loss)$2,274 $(1,387)
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Amortization of deferred financing costs53 44 
Depreciation and amortization971 992 
Impairment expense42 2,165 
Deferred income taxes(1)(1)
Loss on disposal of assets4 1 
(Income)/loss from equity method investments(1)
(228)1,012 
Distributions from unconsolidated affiliates361 350 
Changes in:
Current receivables(162)69 
Inventories(22)(8)
Fair value of derivatives41 1 
Current accounts payable and accrued liabilities166 (27)
Current assets/current liabilities - related parties94 36 
Right of use assets/operating lease liabilities2 (2)
Deferred revenue65 85 
All other, net11 6 
Net cash provided by operating activities3,671 3,336 
Investing activities:
Additions to property, plant and equipment(374)(982)
Disposal of assets77 54 
Investments in unconsolidated affiliates(116)(244)
Distributions from unconsolidated affiliates - return of capital36 112 
Net cash used in investing activities(377)(1,060)
Financing activities:
Long-term debt - borrowings3,000 5,990 
      - repayments(4,946)(5,372)
Related party debt - borrowings6,571 4,870 
        - repayments(5,201)(5,464)
Debt issuance costs— (23)
Unit repurchases(465)— 
Distributions to noncontrolling interests(29)(26)
Distributions to Series A preferred unitholders(61)(61)
Distributions to Series B preferred unitholders(41)(41)
Distributions to unitholders and general partner(2,126)(2,162)
Contributions from MPC31 34 
All other, net(3)(8)
Net cash used in financing activities(3,270)(2,263)
Net increase in cash, cash equivalents and restricted cash24 13 
Cash, cash equivalents and restricted cash at beginning of period15 15 
Cash, cash equivalents and restricted cash at end of period$39 $28 

(1)     The nine months ended September 30, 2021 and September 30, 2020 include $6 million and $1,264 million of impairment expense, respectively.

The accompanying notes are an integral part of these consolidated financial statements.
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MPLX LP
Consolidated Statements of Equity (Unaudited)

 Partnership  
(In millions)Common
Unit-holders
Public		Common
Unit-holder
MPC		Series B Preferred Unit-holdersAccumulated Other Comprehensive LossNon-controlling
Interests		Total
Balance at December 31, 2019$10,800 $4,968 $611 $(15)$249 $16,613 
Net (loss)/income (excludes amounts attributable to Series A preferred units)(1,022)(1,733)11 — 8 (2,736)
Distributions to:
Unitholders(271)(446)(21)— — (738)
Noncontrolling interests— — — — (9)(9)
Contributions from:
MPC— 225 — — — 225 
Other2 — — (1)— 1 
Balance at March 31, 20209,509 3,014 601 (16)248 13,356 
Net income (excludes amounts attributable to Series A preferred units)229 388 10 — 7 634 
Distributions to:
Unitholders(270)(458)— — — (728)
Noncontrolling interests— — — — (8)(8)
Contributions from:
MPC— 6 — — — 6 
Other1 1 — — — 2 
Balance at June 30, 20209,469 2,951 611 (16)247 13,262 
Net income (excludes amounts attributable to Series A preferred units)236 399 10 — 9 654 
Distributions to:
Unitholders(271)(445)(20)— — (736)
Noncontrolling interests— — — — (9)(9)
Contributions from:
MPC— 13 — — — 13 
Wholesale Exchange— (90)— — — (90)
Other2 (1)— — — 1 
Balance at September 30, 2020$9,436 $2,827 $601 $(16)$247 $13,095 
The accompanying notes are an integral part of these consolidated financial statements.
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 Partnership  
(In millions)Common
Unit-holders
Public		Common
Unit-holder
MPC		Series B Preferred Unit-holdersAccumulated Other Comprehensive LossNon-controlling
Interests		Total
Balance at December 31, 2020$9,384 $2,792 $611 $(15)$245 $13,017 
Net income (excludes amounts attributable to Series A preferred units)266 443 11 — 9 729 
Unit Repurchases(155)— — — — (155)
Distributions to:
Unitholders(269)(445)(21)— — (735)
Noncontrolling interests— — — — (10)(10)
Contributions from:
MPC— 7 — — — 7 
Other— (1)— (2)— (3)
Balance at March 31, 20219,226 2,796 601 (17)244 12,850 
Net income (excludes amounts attributable to Series A preferred units)251 423 10 — 9 693 
Unit Repurchases(155)— — — — (155)
Distributions to:
Unitholders(262)(445)— — — (707)
Noncontrolling interests— — — — (10)(10)
Contributions from:
MPC— 122 — — — 122 
Other1 1 — — — 2 
Balance at June 30, 20219,061 2,897 611 (17)243 12,795 
Net income (excludes amounts attributable to Series A preferred units)278 476 10 — 9 773 
Unit Repurchases(160)— — — — (160)
Distributions to:
Unitholders(261)(445)(20)— — (726)
Noncontrolling interests— — — — (9)(9)
Contributions from:
MPC— 16 — — — 16 
Other1 — — — — 1 
Balance at September 30, 2021$8,919 $2,944 $601 $(17)$243 $12,690 

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

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Table of Contents
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-orientedlarge-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 (collectively, the “Partnership”) 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.subsidiaries. References to “MPC” refer collectively to Marathon Petroleum Corporation as our sponsor and its subsidiaries, other than the Partnership. We are engaged in the transportation, storage, marketing and distribution of crude oil, asphalt and refined petroleum products; the gathering, processing and transportation of natural gas; and the gathering, transportation, fractionation, storage and marketing of NGLs. MPLX’s principal executive office is located in Findlay, Ohio.


The Partnership’sMPLX’s business consists of two2 segments based on the nature of services it offers: Logistics and Storage (“L&S”), which is focused onrelates primarily to crude oil, asphalt and refined petroleum productsproducts; and Gathering and Processing (“G&P”), which is focused onrelates primarily to natural gas and NGLs. See Note 9 for additional information regarding operations.the operations and results of these segments.


BasisImpairments – Through the first nine months 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 interests2021, we continued to see improvements in the accompanying Consolidated Balance Sheets. Intercompany investments, accounts and transactions have been eliminated. The Partnership’s investmentsenvironment in which our business operates as COVID-19 impacts continue to subside. The increased availability of vaccinations and easing of COVID-19 restrictions has been followed by an increase in economic activity despite the Partnership exercises significant influence but does not controlrecent resurgence in COVID-19. We are unable to predict the long-term impacts COVID-19 may have on our financial position and does not have a controlling financial interest are accounted for usingresults.

In the equity method. The Partnership’s investmentssecond quarter of 2021, we recognized impairment expense of $42 million within our G&P segment related to our continued emphasis on portfolio optimization with the anticipated divestiture of several non-core assets and the closure of other non-core assets.

During the first quarter of 2020, the overall deterioration in a VIEthe economy and the environment in which the Partnership exercises significant influence but does not controlMPLX 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 businessesits customers operate, as well as a sustained decrease in unit price, were considered triggering events at 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 resultstime resulting in impairments of the businesses acquired from MPC priorcarrying value of certain assets. We recognized impairments related to goodwill, certain equity method investments and certain long-lived assets (including intangibles), within our G&P segment. Many of our producer customers refined and updated production forecasts in response to the effective datesenvironment at that time, which impacted their expected future demand for our services, including the future utilization of the acquisition. See Note 3 for additionalour assets. Additionally, certain of our contracts have commodity price exposure, including NGL prices, which experienced increased volatility as noted above. The table below provides 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 toimpairments recognized during the amountfirst quarter of those distributions are first allocated to2020 as well as the general partner before the remaining earnings are allocated to the limited partner unitholders based on their respective ownership percentages. The allocationcorresponding footnote where additional information can be found.
(In millions)ImpairmentFootnote Reference
Goodwill$1,814 12
Equity method investments1,264 4
Intangibles, net177 12
Property, plant and equipment, net174 11
Total impairments$3,429 

Basis of net income attributable to MPLX LP for purposes of calculating net income per limited partner unit is described in Note 6.

Presentation – The accompanying interim consolidated financial statements are unaudited; however, in the opinion of the Partnership’sMPLX’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 theour 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, 2017.2020. The results of operations for the three and nine months ended September 30, 20172021 are not necessarily indicative of the results to be expected for the full year.



MPLX’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.
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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 VIEs in which MPLX exercises significant influence but does not control and is not the primary beneficiary are also accounted for using the equity method.

2. Accounting Standards


Recently Adopted


In October 2016, the FASB issued an accounting standards update to amend the consolidation guidance issued in February 2015 to require that a decision maker consider, in the determination of the primary beneficiary, its indirect interest in a VIE held by a related party that is under common control on a proportionate basis only. The change was effective for the financial statements for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Partnership was required to apply the standard retrospectively to January 1, 2016, the date on which the Partnership adopted the consolidation guidance issued in February 2015. The Partnership adopted this accounting standards update inWe did not adopt any ASUs during the first quarternine months 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 or2021 that 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 it did not have a material impact on the consolidated financial statements.

Not Yet Adopted

In August 2017, 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 account 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 onto our financial statements or financial statement disclosures.

3. Acquisitions and Dispositions

Sale of Javelina Assets and Liabilities

On February 12, 2021, MarkWest Energy Operating Company, L.L.C., (“MarkWest Energy”) a wholly owned subsidiary of MPLX, completed the consolidated financial statements.

In February 2017,sale of all of MarkWest Energy’s equity interests in MarkWest Javelina Company L.L.C., MarkWest Javelina Pipeline Company L.L.C., and MarkWest Gas Services L.L.C. (collectively, “Javelina”) pursuant to 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.

In January 2017, the FASB issued an accounting standards update which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the new guidance, the recognitionterms of an impairment charge is calculatedEquity Purchase Agreement entered into with a third party on December 23, 2020. The agreement included adjustments for working capital as well as an earnout provision based on the amount by whichperformance of the carrying amount exceedsassets. No gain or loss was recorded on the reporting unit’s fair value, which could be different from the amount calculated under the current method using the implied fairsale. The estimated 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 onearnout provision was recorded as a prospective basis, and is effective for annual or 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 of determining the impact of the accounting standards update 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

8



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 periodscontingent asset shown 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“Other noncurrent assets” 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.

In June 2016, the FASB issued an accounting standards update related to the accounting for credit losses on certain financial instruments. The guidance requires that for most financial assets, losses are 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 not expect application of this accounting standards update to have a material impact on the consolidated financial statements.

In February 2016, the FASB issued an accounting standards update requiring lessees to record virtually all leases on their balance sheets. The accounting standards update also requires expanded disclosures to help financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. For lessors, this amended guidance modifies the classification criteria 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 order 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.


9



In May 2014, 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. Recognition 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 to the performance obligations and recognizing the revenue as the obligations are satisfied. Additional disclosures will be required to provide adequate information to understand 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.

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 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 completedBalance Sheets as of September 30, 2017.

Based2021. Javelina’s assets and liabilities sold are shown on the results of the first phase assessment, the Partnership has reached conclusionsConsolidated Balance Sheets as “Assets held for all material contract types. Revenue recognition patterns will not changesale” and “Liabilities held 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-Ksale” for the year ended December 31, 2017.2020. Prior to the sale, Javelina was reported within the G&P segment.


10Wholesale Exchange


3. Acquisitions

Joint-Interest Acquisition


On September 1, 2017, the PartnershipJuly 31, 2020, MPLX entered into a Membership Interests and Shares ContributionsRedemption Agreement (the “September 2017 Contributions“Redemption Agreement”) with MPLX GP LLCWestern Refining Southwest, Inc. (now known as Western Refining Southwest LLC) (“MPLX GP”WRSW”), MPLX Logistics Holdings LLC (“MPLX Logistics”), MPLX Holdings Inc. (“MPLX Holdings”) and MPC Investment LLC (“MPC Investment”), each a wholly-ownedwholly owned subsidiary of MPC, whereby the Partnershippursuant to which MPLX agreed to acquire certain ownership interests in joint venture entities indirectly held by MPC. Pursuanttransfer to the September 2017 Contributions Agreement, MPC Investment agreed to contribute:WRSW all of the outstanding membership interests in Western Refining Wholesale, LLC (“WRW”) in exchange for the redemption of Lincoln Pipeline LLC, which holds a 35 percent interest in Illinois Extension Pipeline Company, L.L.C. (“Illinois Extension”); allMPLX common units held by WRSW. The transaction effected the transfer to MPC of the membership interestsWestern wholesale distribution business that MPLX acquired as a result of MPL Louisiana Holdings LLC, which holds a 40.7 percent interest in LOOP LLCits acquisition of Andeavor Logistics LP (“LOOP”ANDX”); a 58.52 percent interest in LOCAP LLC (“LOCAP”); and a 24.51 percent interest in Explorer Pipeline Company (“Explorer”), through a series. Per the terms of intercompany contributions to the Partnership for an agreed upon purchase price of approximately $420 million in cash and equity consideration valued at approximately $630 million for total consideration of $1.05 billion (collectively, the “Joint-Interest Acquisition”Redemption Agreement, MPLX redeemed 18,582,088 common units (the “Redeemed Units”). held by WRSW on July 31, 2020. The number of common units representing the equity considerationRedeemed Units was then determinedcalculated by dividing the contribution amountWRW’s aggregate valuation of $340 million by the simple average of the ten day trading volume weighted average NYSE priceprices of aan MPLX common unit for the ten trading days ending at market close on August 31, 2017.July 27, 2020. MPLX canceled the Redeemed Units immediately following the Wholesale Exchange. The faircarrying value of the common and general partner units issuednet assets of WRW transferred to MPC was approximately $653$90 million based on the closing common unit price as of September 1, 2017, asJuly 31, 2020, resulting in $250 million being recorded onto “Common Unit-holder MPC” within the Consolidated Statements of Equity, for a total purchase price of $1.07 billion. The equity issued consisted of: (i) 13,719,017 common units to MPLX GP, (ii) 3,350,893 common units to MPLX Logistics and (iii) 1,441,224 common units to MPLX Holdings. The Partnership also issued 377,778 general partner units to MPLX GP in order to maintain its two percent general partner interest (“GP Interest”) innetted against 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. 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.


11


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 issuedRedeemed Units. Included within the $90 million carrying value of the WRW net assets was approximately $503$65 million as recorded onof goodwill. These financial statements include the Consolidated Statementsresults of Equity,WRW through July 31, 2020.


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Table of Contents
4. Investments 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-thirds of the first quarter 2017 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.Noncontrolling Interests


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.


12


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 parties153
 28
 72
 —
 253
Rental income77
 —
 —
 —
 77
Rental income - related parties29
 13
 26
 —
 68
Product sales157
 —
 —
 —
 157
Product sales - related parties2
 —
 —
 —
 2
Income from equity method investments6
 —
 —
 —
 6
Gain on sale of assets1
 —
 —
 —
 1
Other income2
 —
 —
 —
 2
Other income - related parties26
 —
 —
 (4) 22
Total revenues and other income703
 41
 98
 (4) 838
Costs and expenses:         
Cost of revenues (excludes items below)90
 10
 22
 —
 122
Purchased product costs117
 —
 —
 —
 117
Rental cost of sales11
 2
 —
 —
 13
Rental cost of sales - related parties—
 1
 —
 (1) —
Purchases - related parties84
 4
 24
 (3) 109
Depreciation and amortization138
 4
 9
 —
 151
General and administrative expenses46
 2
 8
 —
 56
Other taxes10
 —
 2
 —
 12
Total costs and expenses496
 23
 65
 (4) 580
Income from operations207
 18
 33
 —
 258
Interest expense (net of amounts capitalized)51
 —
 —
 —
 51
Other financial costs13
 —
 —
 —
 13
Income before income taxes143
 18
 33
 —
 194
Net income143
 18
 33
 —
 194
Less: Net income attributable to noncontrolling interests2
 —
 —
 —
 2
Less: Net income attributable to Predecessor—
 18
 33
 —
 51
Net income attributable to MPLX LP141
 —
 —
 —
 141
Less: Preferred unit distributions16
 —
 —
 —
 16
Less: General partner’s interest in net income attributable to MPLX LP51
 —
 —
 —
 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.


13


 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
 $—
 $—
 $—
 $712
Service revenue - related parties448
 82
 146
 —
 676
Rental income218
 —
 —
 —
 218
Rental income - related parties84
 36
 52
 —
 172
Product sales394
 —
 —
 —
 394
Product sales - related parties8
 —
 —
 —
 8
Loss from equity method investments(72) —
 —
 —
 (72)
Gain on sale of assets1
 —
 —
 —
 1
Other income5
 —
 —
 —
 5
Other income - related parties78
 —
 —
 (11) 67
Total revenues and other income1,876
 118
 198
 (11) 2,181
Costs and expenses:         
Cost of revenues (excludes items below)263
 24
 42
 —
 329
Purchased product costs310
 —
 —
 —
 310
Rental cost of sales39
 3
 —
 —
 42
Rental cost of sales - related parties—
 2
 —
 (1) 1
Purchases - related parties238
 13
 45
 (10) 286
Depreciation and amortization407
 12
 19
 —
 438
Impairment expense130
 —
 —
 —
 130
General and administrative expenses147
 5
 20
 —
 172
Other taxes32
 2
 3
 —
 37
Total costs and expenses1,566
 61
 129
 (11) 1,745
Income from operations310
 57
 69
 —
 436
Related party interest and other financial income1
 —
 —
 —
 1
Interest expense (net of amounts capitalized)158
 —
 —
 —
 158
Other financial costs37
 —
 —
 —
 37
Income before income taxes114
 57
 69
 —
 240
Benefit for income taxes(12) —
 —
 —
 (12)
Net income126
 57
 69
 —
 252
Less: Net income attributable to noncontrolling interests3
 —
 —
 —
 3
Less: Net income attributable to Predecessor23
 57
 69
 —
 149
Net income attributable to MPLX LP100
 —
 —
 —
 100
Less: Preferred unit distributions25
 —
 —
 —
 25
Less: General partner’s interest in net income attributable to MPLX LP136
 —
 —
 —
 136
Limited partners’ interest in net loss attributable to MPLX LP$(61)
$—

$—

$—

$(61)

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


14


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 costs34
 —
 —
 34
Depreciation and amortization407
 12
 19
 438
Impairment expense130
 —
 —
 130
Deferred income taxes(16) —
 —
 (16)
Asset retirement expenditures(3) (1) —
 (4)
Gain on disposal of assets(1) —
 —
 (1)
Loss from equity method investments72
 —
 —
 72
Distributions from unconsolidated affiliates111
 —
 —
 111
Changes in:       
Current receivables(44) 1
 —
 (43)
Inventories(4) —
 —
 (4)
Fair value of derivatives28
 —
 —
 28
Current accounts payable and accrued liabilities59
 (1) 6
 64
Receivables from / liabilities to related parties15
 3
 (122) (104)
All other, net18
 2
 (2) 18
Net cash provided by (used in) operating activities932
 73
 (30) 975
Investing activities:       
Additions to property, plant and equipment(874) (36) (33) (943)
Investments - net related party loans77
 (37) 63
 103
Investments in unconsolidated affiliates(56) —
 —
 (56)
All other, net4
 —
 —
 4
Net cash (used in) provided by investing activities(849) (73) 30
 (892)
Financing activities:       
Long-term debt - borrowings434
 —
 —
 434
 - repayments(1,312) —
 —
 (1,312)
Related party debt - borrowings2,215
 —
 —
 2,215
- repayments(2,223) —
 —
 (2,223)
Net proceeds from equity offerings510
 —
 —
 510
Issuance of redeemable preferred units984
 —
 —
 984
Distributions to preferred unitholders(9) —
 —
 (9)
Distributions to unitholders and general partner(612) —
 —
 (612)
Distributions to noncontrolling interests(3) —
 —
 (3)
Contributions from noncontrolling interests4
 —
 —
 4
Consideration payment to Class B unitholders(25) —
 —
 (25)
All other, net(2) —
 —
 (2)
Contribution from MPC225
 —
 —
 225
Distributions to MPC from Predecessor(104) —
 —
 (104)
Net cash provided by financing activities82
 —
 —
 82
Net increase in cash and cash equivalents165
 —
 —
 165
Cash and cash equivalents at beginning of period43
 —
 —
 43
Cash and cash equivalents at end of period$208
 $—
 $—
 $208

15


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 assumedMPLX’s equity method investments at the acquisition date, the purchase price was primarily allocated to property, plant and equipment.dates indicated:
Ownership as ofCarrying value at
September 30,September 30,December 31,
(In millions, except ownership percentages)202120212020
L&S
MarEn Bakken Company LLC(1)
25%$457 $465 
Illinois Extension Pipeline Company, L.L.C.35%253 254 
LOOP LLC41%268 252 
Andeavor Logistics Rio Pipeline LLC(2)
67%188 194 
Minnesota Pipe Line Company, LLC17%184 188 
Whistler Pipeline LLC(2)
38%146 185 
Explorer Pipeline Company25%68 72 
W2W Holdings LLC(2)(3)
50%66 72 
Other(2)
115 103 
Total L&S1,745 1,785 
G&P
MarkWest Utica EMG, L.L.C.(2)
57%682 698 
Sherwood Midstream LLC(2)
50%548 557 
MarkWest EMG Jefferson Dry Gas Gathering Company, L.L.C.(2)
67%335 307 
MarkWest Torñado GP, L.L.C.(2)
60%223 188 
Rendezvous Gas Services, L.L.C.(2)
78%151 159 
Sherwood Midstream Holdings LLC(2)
51%138 148 
Centrahoma Processing LLC40%132 145 
Other(2)
47 49 
Total G&P2,256 2,251 
Total$4,001 $4,036 
(1)    The Ozark pipeline is a 433-mile, 22-inch crude oil pipeline originatinginvestment 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 operations6
 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,includes our 9.19 percent indirect interest in a joint venture (“Dakota Access”) that owns and operates 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 Bakkenor DAPL.    
(2)    Investments deemed to acquire a 36.75 percent indirectbe VIEs. Some investments included within “Other” have also been deemed to be VIEs.
(3)    Through our ownership interest in the Bakken Pipeline system. The Partnership holds, throughW2W Holdings LLC, we have a subsidiary, a 2515 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 BakkenWink to Webster 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.LLC.


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 distributions or IDRsFor those entities that would have otherwise accrued on such common units with respect to the first quarter 2016 distributions. The value of these waived distributions was $15 million.

The inland marine business, comprised of 18 tow boats and 219 owned and leased barges as of the acquisition date, which transport light products, heavy oils, crude oil, renewable fuels, chemicals and feedstocks in the Midwest and Gulf Coast regions of the United States, accounted for nearly 60 percent of the total volumes MPC shipped by inland marine vessels as of March 31, 2016. The Partnership accounts for HSM within its L&S segment.


16


4. Investments and Noncontrolling Interests

Summarized financial information for the Partnership’s equity method investments for the nine months ended September 30, 2017 and 2016 is as follows:
 Nine Months Ended September 30, 2017
(In millions)MarkWest Utica EMG Other VIEs Non-VIEs Total
Revenues and other income$137
 $49
 $178
 $364
Costs and expenses72
 29
 115
 216
Income from operations65
 20
 63
 148
Net income65
 19
 28
 112
Income from equity method investments(1)
6
 7
 16
 29

 Nine Months Ended September 30, 2016
(In millions)MarkWest Utica EMG 
Other VIEs(2)
 Non-VIEs Total
Revenues and other income$165
 $13
 $108
 $286
Costs and expenses70
 107
 80
 257
Income (loss) from operations95
 (94) 28
 29
Net income (loss)94
 (94) 28
 28
Income (loss) from equity method investments(1)
10
 (88) 6
 (72)

(1)
Income (loss) from equity method 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.

Summarized balance sheet information for the Partnership’s equity method investments as of September 30, 2017 and December 31, 2016 is as follows:
 September 30, 2017
(In millions)
MarkWest Utica EMG(1)
 Other VIEs Non-VIEs Total
Current assets$72
 $47
 $379
 $498
Noncurrent assets2,092
 878
 4,614
 7,584
Current liabilities37
 55
 492
 584
Noncurrent liabilities2
 12
 562
 576

 December 31, 2016
(In millions)
MarkWest Utica EMG(1)
 Other VIEs Non-VIEs Total
Current assets$45
 $2
 $40
 $87
Noncurrent assets2,173
 132
 390
 2,695
Current liabilities30
 4
 26
 60
Noncurrent liabilities2
 13
 —
 15

(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 and December 31, 2016, the carrying value of the Partnership’s equity method investments exceeded the underlying net assets of its investees by $1.1 billion. 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 of excess related to goodwill.

17



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 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 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 notVIEs, neither MPLX nor any of its subsidiaries have been deemed to be the primary beneficiary due to EMG Utica’s voting rights on significant matters. The Partnership’sWhile we have the ability to exercise influence through participation in the management committees which make all significant decisions, we have equal influence over each committee as a joint interest partner and all significant decisions require the consent of the other investors without regard to economic interest and as such we have determined that these entities should not be consolidated and apply the equity method of accounting with respect to our investments in each entity.

Sherwood Midstream LLC (“Sherwood Midstream”) has been deemed the primary beneficiary of Sherwood Midstream Holdings LLC (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, MPLX also reports its portion of Sherwood Midstream Holdings’ net assets as a component of its investment in MarkWest Utica EMG’s, which was $2.2 billion atSherwood Midstream. As of September 30, 2017 and December 31, 2016, is reported under the caption Equity method investments on the Consolidated Balance Sheets. The Partnership’s2021, MPLX has a 24.55 percent indirect ownership interest in Sherwood Midstream Holdings through Sherwood Midstream.

MPLX’s maximum exposure to loss as a result of its involvement with MarkWest Utica EMGequity method investments 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 PartnershipMPLX 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.

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 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 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.


18


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”), to support Antero Resources Corporation’s development in the Marcellus Shale. MarkWest Liberty Midstream has a 50 percent ownership interest in Sherwood Midstream. Pursuant to the terms of the related limited liability company agreement (the “LLC Agreement”), MarkWest Liberty 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.

Also effective January 1, 2017, MarkWest Liberty Midstream converted all of its ownership interests in MarkWest Ohio Fractionation Company, L.L.C. (“Ohio Fractionation”), a previously wholly-owned subsidiary, to Class A Interests and amended its LLC Agreement to create Class B-3 Interests, which were sold to Sherwood Midstream for $126 million in cash. The Class B-3 Interests provide Sherwood Midstream with 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 is a VIE, as an equity method investment as Sherwood Midstream does not control Ohio Fractionation. MarkWest Liberty Midstream 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 income attributable to noncontrolling interests in 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 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 revenue2021.

11

Table of Contents
During the first quarter of 2020, we recorded an other than temporary impairment for operating Sherwood Midstream. The amountthree joint ventures in which we have an interest as discussed in Note 1. Impairment of Operational Service revenuethese investments was $1,264 million, of which $1,251 million was related to Sherwood Midstream for the threeMarkWest Utica EMG, L.L.C. 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, 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 SherwoodOhio Gathering Company, L.L.C. The impairment was recorded through “Income from equity method investments.” The impairments were largely due to a reduction in forecasted volumes gathered and processed by the systems operated by the joint ventures.


19


Midstream Holdings and is reported under the caption EquitySummarized financial information for MPLX’s 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 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 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 did not provide any financial support to Sherwood Midstream Holdings that it was not contractually obligated to provide during the nine months ended September 30, 2017.2021 and 2020 is as follows:

Nine Months Ended September 30, 2021
(In millions)VIEsNon-VIEsTotal
Revenues and other income$565 $940 $1,505 
Costs and expenses350 427 777 
Income from operations215 513 728 
Net income172 449 621 
Income from equity method investments(1)
$120 $108 $228 
Sherwood Midstream has been deemed the primary beneficiary(1)    Includes impairment expense 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 also reports its portion$6 million.
Nine Months Ended September 30, 2020
(In millions)VIEsNon-VIEsTotal
Revenues and other income$132 $933 $1,065 
Costs and expenses308 405 713 
(Loss)/income from operations(176)528 352 
Net (loss)/income(230)477 247 
(Loss)/income from equity method investments(1)
$(1,138)$126 $(1,012)
(1)    Includes impairment expense of Sherwood Midstream Holdings’ net assets$1,264 million.

Summarized balance sheet information for MPLX’s equity method investments as a component of its investment in Sherwood Midstream. As of September 30, 2017, the Partnership has a 14.7 percent indirect ownership interest in Sherwood Midstream Holdings through Sherwood Midstream.2021 and December 31, 2020 is as follows:

September 30, 2021
(In millions)VIEsNon-VIEsTotal
Current assets$328 $444 $772 
Noncurrent assets7,426 4,907 12,333 
Current liabilities216 254 470 
Noncurrent liabilities$2,448 $873 $3,321 

December 31, 2020
(In millions)VIEsNon-VIEsTotal
Current assets$530 $318 $848 
Noncurrent assets6,889 4,997 11,886 
Current liabilities323 187 510 
Noncurrent liabilities$1,904 $830 $2,734 


5. Related Party Agreements and Transactions


The Partnership’s materialMPLX engages in transactions with both MPC and certain of its equity method investments as part of its normal business; however, transactions with MPC make up the majority of MPLX’s related party transactions. Transactions with related parties include:are further described below.


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.
MarkWest Utica EMG, in which MPLX LP has a 56 percent interest as of September 30, 2017. 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. 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. 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 percent total direct and indirect interest as of September 30, 2017. 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 facilities.
Illinois Extension, in which MPLX LP has a 35 percent interest as of September 30, 2017. Illinois Extension operates 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.

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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 midcontinent 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.

Related Party Agreements

The Partnership has various long-term, fee-based commercial agreements with MPC. Under these agreements, the PartnershipMPLX provides transportation, terminal, fuels distribution, marketing, storage, management, operational and storageother services to MPC, andMPC. MPC has committed to provide the PartnershipMPLX with minimum quarterly throughput volumes on crude oil and refined products systems and minimum other fees for
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storage volumescapacity; operating and management fees; as well as reimbursements for certain direct and indirect costs. MPC has also committed to provide a fixed fee for 100 percent of crude oil, refined productsavailable capacity for boats, barges and butane.third-party chartered equipment under the marine transportation service agreement. MPLX also has a keep-whole commodity agreement with MPC under which MPC pays us a processing fee for NGLs related to keep-whole agreements and delivers shrink gas to the producers on our behalf. We pay MPC a marketing fee in exchange for assuming the commodity risk. Additionally, MPLX has obligations to MPC for services provided to MPLX by MPC under omnibus and employee services-type agreements as well as other various agreements.


In addition, the PartnershipRelated Party Loan

MPLX is 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 Investment will make a loan orextends loans to the PartnershipMPLX on a revolving basis as requested by the PartnershipMPLX and as agreed to by MPC Investment, in an amount or amounts that do not result inInvestment. The borrowing capacity of the MPC Loan Agreement is $1.5 billion aggregate principal amount of all loans outstanding exceeding $500 million at any one time. The entire unpaid principal amount ofloan agreement is scheduled to expire, and borrowings under the loan together with all accruedagreement are scheduled to mature and unpaid interest and other amounts (if any), shall become due and payable, on December 4, 2020.July 31, 2024, provided that 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.maturity. Borrowings under the loan willMPC Loan Agreement bear interest at LIBOR plus 1.50 percent. During1.25 percent or such lower rate as would be applicable to such loans under the nine months ended September 30, 2017,MPLX Credit Agreement as discussed in Note 15. Activity on the Partnership borrowed $829 million and repaid $627 million, resultingMPC Loan Agreement was as follows:
(In millions)Nine Months Ended September 30, 2021Year Ended December 31, 2020
Borrowings$6,571 $6,264 
Average interest rate of borrowings1.345 %2.278 %
Repayments$5,201 $6,858 
Outstanding balance at end of period(1)
$1,370 $— 
(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.

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 with 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 of crude oil and refined products, as well as related services, for MPC. MPC pays HST for such services based on contractual rates related to MPC crude oil 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.


21



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 such services based on contractual fees relating to MPC product deliveries as well as any viscosity surcharges, loading, handling, transfers or other 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.

The Partnership is party to various employee services agreements with MPC under which the Partnership reimburses MPC for employee benefit expenses, along with the provision of operational and management services, including those in support of HST, WHC and MPLXT.


Related Party TransactionsRevenue


Sales to related parties were as follows:
 Three Months Ended September 30, Nine Months Ended September 30,
(In millions)2017 2016 2017 2016
Service revenues       
MPC$276
 $253
 $801
 $676
Rental income       
MPC$70
 $68
 $207
 $172
Product sales(1)
       
MPC$2
 $2
 $6
 $8

(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, these sales totaled $63 million and $173 million, respectively. For the three and nine months ended September 30, 2016, these sales totaled $13 million and $25 million, respectively.

Related party sales to MPC consist of crude oil and refined products pipeline and trucking transportation services based on regulated tariff rates,tariff/contracted rates; storage, terminal and fuels distribution services based on contracted ratesrates; and marine transportation services. Related party sales to MPC also includes revenue related to volume deficiency credits.

Certain product sales to MPC 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, 2021, these sales totaled $203 million and $548 million, respectively. For the three and nine months ended September 30, 2020, these sales totaled $107 million and $332 million, respectively.

MPLX also has operating agreements with MPC under which it receives a fee for operating MPC’s retained pipeline assets and a fixed annual fee for providing oversight and management services provided by HSM. Underrequired to run the Partnership’s pipeline transportationmarine business. MPLX also receives management fee revenue for engineering, construction and administrative services for operating certain of its equity method investments. These agreements are classified as “Other income - related parties” on the Consolidated Statements of Income.

Related Party Expenses

MPC charges MPLX for executive management services and certain general and administrative services that MPC provides to MPLX under the terms of our omnibus agreements (“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, as well as compensation expenses. 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 also obtains employee services from MPC under employee services agreements if(“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
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administrative expenses.” In addition to these agreements, MPLX purchases products from MPC, makes payments to MPC in its capacity as general contractor to MPLX, and has certain lease agreements with MPC.

For the three and nine months ended September 30, 2021, “General and administrative expenses” incurred from MPC totaled $70 million and $190 million, respectively. For the three and nine months ended September 30, 2020, “General and administrative expenses” incurred from MPC totaled $63 million and $195 million, respectively.

Some charges incurred under the omnibus and ESA agreements are related to engineering services and are associated with assets under construction. These charges are added to “Property, plant and equipment, net” on the Consolidated Balance Sheets. For the three and nine months ended September 30, 2021, these charges totaled $13 million and $40 million, respectively. For the three and nine months ended September 30, 2020, these charges totaled $29 million and $80 million, respectively.

MPC has also been advancing certain strategic priorities to lay a foundation for long-term success, including plans to optimize its assets and structurally lower costs in 2021 and beyond. In 2020, MPC approved and executed an involuntary workforce reduction plan, which together with employee reductions resulting from MPC’s indefinite idling of its Martinez, California and Gallup, New Mexico refineries, affected approximately 2,050 employees. All of the employees that conduct MPLX’s business are directly employed by affiliates of MPC, and certain of those employees were affected by MPC’s workforce reductions. During the third quarter of 2020, MPLX reimbursed MPC for $36 million related to severance and employee benefits related expenses that MPC recorded in connection with its workforce reductions. There were no such costs in the first nine months of 2021.

Related Party Assets and Liabilities

Assets and liabilities with related parties appearing on the Consolidated Balance Sheets are detailed in the table below. This table identifies the various components of related party assets and liabilities, including those associated with leases (see Note 18 for additional information) and deferred revenue on minimum volume commitments. If MPC fails to transportmeet its minimum throughputcommitted volumes, during any quarter, then MPC will pay the PartnershipMPLX a deficiency payment equal tobased on the volumeterms of the deficiency multiplied by the tariff rate then in effect.agreement. The deficiency amounts received under these agreements (excluding payments received under agreements classified as sales-type leases) are recorded as Deferred revenue-related parties.“Current liabilities - related parties.” In many cases, 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 quartersin future periods under the terms of the applicable transportation services agreement. The Partnershipagreements. MPLX recognizes related party revenues for the deficiency payments when credits are used for volumes transported in excess of minimum quarterly volume commitments, whenwhere it becomes impossible to physically transport volumes necessary to utilizeis probable the creditscustomer will not use the credit in future periods 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 EMG5
 5
 13
 12
Ohio Gathering4
 5
 12
 12
Other4
 2
 14
 7
Total$22
 $22
 $69
 $67


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MPC provides executive management services and certain general and administrative services to the Partnershipparties.” Deficiency payments 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 servicesagreements 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 expenses9
 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 arehave been classified as Purchases-related parties. The costs of personnel involved in executive management, accounting and human resources activitiessales-type leases are classifiedrecorded as General and administrative expenses ina reduction against 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 expenses25
 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 EMG2
 2
Ohio Gathering2
 2
Other4
 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


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Payables to related parties were as follows:
(In millions)September 30, 2017 December 31, 2016
MPC(1)
$277
 $63
MarkWest Utica EMG30
 24
Other10
 —
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.corresponding lease receivable. In addition, capital projects the Partnership is undertakingMPLX undertakes at the request of MPC are reimbursed in cash and recognized in incomeas revenue over the remaining term of the applicable agreements. The Deferred revenue-related parties balance associated with the minimum volume deficiencies and project reimbursements wereagreements or in some cases as follows:a contribution from MPC.

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(In millions)(In millions)September 30, 2021December 31, 2020
Current assets - related partiesCurrent assets - related parties
Receivables - MPCReceivables - MPC$547 $615 
(In millions)September 30, 2017 December 31, 2016
Minimum volume deficiencies - MPC$55
 $48
Project reimbursements - MPC27
 9
Receivables - OtherReceivables - Other7 27 
Prepaid - MPCPrepaid - MPC13 4 
Other - MPCOther - MPC2 1 
Lease Receivables - MPCLease Receivables - MPC76 30 
Total$82
 $57
Total645 677 
Noncurrent assets - related partiesNoncurrent assets - related parties
Long-term receivables - MPCLong-term receivables - MPC32 32 
Right of use assets - MPCRight of use assets - MPC230 231 
Long-term lease receivables - MPCLong-term lease receivables - MPC857 386 
Unguaranteed residual asset - MPCUnguaranteed residual asset - MPC41 23 
TotalTotal1,160 672 
Current liabilities - related partiesCurrent liabilities - related parties
Payables - MPCPayables - MPC1,577 215 
Payables - OtherPayables - Other36 43 
Operating lease liabilities - MPCOperating lease liabilities - MPC1 1 
Deferred revenue - Minimum volume deficiencies - MPCDeferred revenue - Minimum volume deficiencies - MPC43 66 
Deferred revenue - Project reimbursements - MPCDeferred revenue - Project reimbursements - MPC48 30 
Deferred revenue - Project reimbursements - OtherDeferred revenue - Project reimbursements - Other1 1 
TotalTotal1,706 356 
Long-term liabilities - related partiesLong-term liabilities - related parties
Long-term operating lease liabilities - MPCLong-term operating lease liabilities - MPC228 229 
Long-term deferred revenue - Project reimbursements - MPCLong-term deferred revenue - Project reimbursements - MPC62 47 
Long-term deferred revenue - Project reimbursements - OtherLong-term deferred revenue - Project reimbursements - Other7 7 
TotalTotal$297 $283 


Other Related Party Transactions
6. Net Income (Loss) Per Limited Partner Unit

Net income (loss) perFrom time to time, MPLX may also sell to or purchase from related parties, assets and inventory at the lesser of average unit applicablecost or net realizable value. Sales to common limited partner units is computed by dividing the respective limited partners’ interest in net income (loss) attributable to MPLX LP 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 earningsrelated parties for the entities acquired under common control will be included in the net income (loss) per unit calculation prospectively as described above.

For the three months ended September 30, 2017, the Partnership 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, 20172021 and 2016, the Partnership had dilutive potential common units consisting of certain equity-based compensation awards2020 were $19 million and Class B units. Potential common units omitted$8 million, respectively. Purchases from the diluted earnings per unit calculationrelated parties were immaterial for the three and nine months ended September 30, 2017 were less than one million2021 and for the three and nine months ended September 30, 2016 were less than one million and approximately eight million, respectively.2020.

 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
 $100
Less: Limited partners’ distributions declared
on Preferred units(1)
16
 16
 49
 25
General partner’s distributions declared (including IDRs)(1)
88
 54
 229
 148
Limited partners’ distributions declared on common units(1)
232
 179
 648
 507
Undistributed net loss attributable to MPLX LP$(120)
$(108) $(370) $(580)

(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:       
Basic8
 394
 31
 433
Diluted8
 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:       
Basic7
 341
 31
 379
Diluted7
 346
 31
 384
Net income attributable to MPLX LP per limited partner unit:       
Basic  $0.22
 

  
Diluted  $0.21
 

  



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 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:       
Basic8
 378
 31
 417
Diluted8
 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
(In millions, except per unit data)
General
Partner
 
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:       
Distributions declared (including IDRs)$148
 $507
 $25
 $680
Undistributed net loss attributable to MPLX LP(12) (568) —
 (580)
Net income (loss) attributable to MPLX LP(1)
$136
 $(61) $25
 $100
Weighted average units outstanding:       
Basic7
 324
 16
 347
Diluted7
 324
 16
 347
Net loss attributable to MPLX LP per limited partner unit:       
Basic  $(0.19) 

  
Diluted  $(0.19) 

  

(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.


26



7.6. Equity


The changes in the number of common units outstanding during the nine months ended September 30, 20172021 are summarized below:
(In units)Common Class B General Partner Total
Balance at December 31, 2016357,193,288
 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, 2017407,045,362

—

8,307,046

415,352,408

(1)(In units)As a result of the 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.Common
(2)Balance at December 31, 2020As 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.1,038,777,978 
(3)Unit-based compensation awardsSee Note 3 for information regarding this acquisition.213,727 
(4)Units redeemed in unit repurchase programOn 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.(17,563,855)
Balance at September 30, 20211,021,427,850 

Reorganization Transactions –
Unit Repurchase Program

On November 2, 2020, MPLX announced the board authorization of a unit repurchase program for the repurchase of up to $1 billion of MPLX’s outstanding common units held by the public. MPLX may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block transactions, tender offers, accelerated unit repurchases or open market solicitations for units, some of which may be effected through Rule 10b5-1 plans. The timing and
15

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amount of repurchases will depend upon several factors, including market and business conditions, and repurchases may be initiated, suspended or discontinued at any time. The repurchase authorization has no expiration date. During the nine months ended September 1, 2016, the Partnership30, 2021, we repurchased 17,563,855 common units at an average cost per unit of $26.79 and various affiliates initiated a seriespaid $465 million of reorganization transactionscash, with an additional $5 million of cash paid in order to simplify the Partnership’s ownership structure and its financial and tax reporting requirements. Inearly October in connection with these transactions, the issued andsettlement of certain late September purchases. As of September 30, 2021, we had $497 million remaining under our repurchase authorization.

Series B Preferred Units

MPLX has outstanding MPLX LP Class A600,000 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 units6.875 percent Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units representing limited partner interests of MPLX with a price to the public of $1,000 per unit (the “Series B preferred units”). The Series B preferred units are pari passu with the Series A preferred units with respect to distribution rights and rights upon liquidation. Series B preferred unitholders are entitled to receive a fixed distribution of $68.75 per unit, per annum, payable semi-annually in MPLX LP. MPC also contributed $141 millionarrears on the 15th day, or the first business day thereafter, of February and August of each year up to facilitateand including February 15, 2023. After February 15, 2023, the repaymentholders of intercompany debt between MarkWest HydrocarbonSeries B preferred units are entitled to receive cumulative, quarterly distributions payable in arrears on the 15th day of February, May, August and MarkWest. As a resultNovember of these transactions,each year, or 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 unitholdersfirst business day thereafter, 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, earningsfloating annual rate equal to the amountthree-month LIBOR plus 4.652 percent, in each case assuming a distribution is declared by the Board 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:Directors.

 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 distributions16
 16
 49
 25
General partner's IDRs and other83
 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 other83
 49
 216
 137
General partner's GP Interest in net income attributable to MPLX LP$86
 $51
 $222
 $136


27



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 PartnershipOn November 2, 2021, MPLX declared a quarterly cash distribution based on the results offor the third quarter of 2017,2021, totaling $320$1,305 million, or $0.5875$1.28 per common unit. These distributionsunit, consisting of a base distribution amount of $0.705 per common unit and a special distribution amount of $0.575 per common unit (the “Special Distribution Amount”). This distribution will be paid on November 14, 201719, 2021 to common unitholders of record on November 6, 2017.12, 2021. This rate will also be received by Series A preferred unitholders.


Quarterly distributions for 2021 and 2020 are summarized below:
(Per common unit)20212020
March 31,$0.6875 $0.6875 
June 30,0.6875 0.6875 
September 30,$1.2800 $0.6875 

In accordance with the distribution rights discussed above, MPLX made a cash distribution totaling $21 million to Series B unitholders on August 16, 2021.

The allocation of total quarterly cash distributions to general, limited and Preferredpreferred unitholders is as follows for the three and nine months ended September 30, 20172021 and 2016. The Partnership’s2020. Distributions, although earned, are not accrued until declared. 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.
Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2021202020212020
Common and preferred unit distributions:
Common unitholders, includes common units of general partner (1)
$1,305 $715 $2,717 $2,158 
Series A preferred unit distributions (1)
38 20 79 61 
Series B preferred unit distributions10 10 31 31 
Total cash distributions declared$1,353 $745 $2,827 $2,250 
(1)     2021 periods include the Special Distribution Amount.

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 Three Months Ended September 30, Nine Months Ended September 30,
(In millions)2017 2016 2017 2016
General partner's distributions:       
General partner's distributions on general partner units$7
 $5
 $18
 $13
General partner's distributions on IDRs81
 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
Preferred unit distributions16
 16
 49
 25
Total cash distributions declared$336
 $249
 $926
 $680


7. Net Income/(Loss) Per Limited Partner Unit

Net income/(loss) per unit applicable to common units is computed by dividing net income/(loss) attributable to MPLX LP less income/(loss) allocated to participating securities by the weighted average number of common units outstanding.

During the three and nine months ended September 30, 2021 and 2020, MPLX had participating securities consisting of common units, certain equity-based compensation awards, Series A preferred units and Series B preferred units and had dilutive potential common units consisting of certain equity-based compensation awards. Potential common units omitted from the diluted earnings per unit calculation for the three and nine months ended September 30, 2021 and 2020 were less than 1 million.
Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2021202020212020
Net income/(loss) attributable to MPLX LP$802 $665 $2,247 $(1,411)
Less: Distributions declared on Series A preferred units(1)
38 20 79 61 
Distributions declared on Series B preferred units10 10 31 31 
Limited partners’ distributions declared on MPLX common units (including common units of general partner)(1)
1,305 715 2,717 2,158 
Undistributed net loss attributable to MPLX LP$(551)$(80)$(580)$(3,661)
(1)      2021 periods include the Special Distribution Amount. See Note 6 for distribution information.
 Three Months Ended September 30, 2021
(In millions, except per unit data)Limited Partners’
Common Units		Series A Preferred UnitsSeries B Preferred UnitsTotal
Basic and diluted net income attributable to MPLX LP per unit
Net income attributable to MPLX LP:
Distributions declared(1)
$1,305 $38 $10 $1,353 
Undistributed net loss attributable to MPLX LP(551)— — (551)
Net income attributable to MPLX LP(2)
$754 $38 $10 $802 
Weighted average units outstanding:
Basic1,024 
Diluted1,025 
Net income attributable to MPLX LP per limited partner unit:
Basic$0.74 
Diluted$0.74 
(1)     Includes the Special Distribution Amount.
(2)    Allocation of net income attributable to MPLX LP assumes all earnings for the period had been distributed based on the distribution priorities applicable to the period.
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 Three Months Ended September 30, 2020
(In millions, except per unit data)Limited Partners’
Common Units		Series A Preferred UnitsSeries B Preferred UnitsTotal
Basic and diluted net income attributable to MPLX LP per unit
Net income attributable to MPLX LP:
Distributions declared$715 $20 $10 $745 
Undistributed net loss attributable to MPLX LP(80)— — (80)
Net income attributable to MPLX LP(1)
$635 $20 $10 $665 
Weighted average units outstanding:
Basic1,046 
Diluted1,047 
Net income attributable to MPLX LP per limited partner unit:
Basic$0.61 
Diluted$0.61 
(1)     Allocation of net income attributable to MPLX LP assumes all earnings for the period had been distributed based on the distribution priorities applicable to the period.

Nine Months Ended September 30, 2021
(In millions, except per unit data)Limited Partners’
Common Units		Series A Preferred UnitsSeries B Preferred UnitsTotal
Basic and diluted net income attributable to MPLX LP per unit
Net income attributable to MPLX LP:
Distributions declared(1)
$2,717 $79 $31 $2,827 
Undistributed net loss attributable to MPLX LP(580)— — (580)
Net income attributable to MPLX LP(2)
$2,137 $79 $31 $2,247 
Weighted average units outstanding:
Basic1,030 
Diluted1,030 
Net income attributable to MPLX LP per limited partner unit:
Basic$2.07 
Diluted$2.07 
(1)     Includes the Special Distribution Amount.
(2)    Allocation of net income attributable to MPLX LP assumes all earnings for the period had been distributed based on the distribution priorities applicable to the period.
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Nine Months Ended September 30, 2020
(In millions, except per unit data)Limited Partners’
Common Units		Series A Preferred UnitsSeries B Preferred UnitsTotal
Basic and diluted net income attributable to MPLX LP per unit
Net income attributable to MPLX LP:
Distributions declared$2,158 $61 $31 $2,250 
Undistributed net loss attributable to MPLX LP(3,661)— — (3,661)
Net (loss)/income attributable to MPLX LP(1)
$(1,503)$61 $31 $(1,411)
Weighted average units outstanding:
Basic1,054 
Diluted1,054 
Net income attributable to MPLX LP per limited partner unit:
Basic$(1.43)
Diluted$(1.43)
(1)     Allocation of net income attributable to MPLX LP assumes all earnings for the period had been distributed based on the distribution priorities applicable to the period.

8. RedeemableSeries A Preferred Units


Private PlacementOn November 2, 2021, MPLX declared a cash distribution of Preferred Units –On May 13, 2016, MPLX LP completed$1.28 per common unit for the private placementthird quarter of approximately 30.8 million 6.5 percent2021. Holders of the Series A Convertible 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 units were used for capital expenditures, repayment of debt and general partnership purposes.

The Preferred units rank senior to all common units with respect to distributions and rights upon liquidation. The holders of the Preferred units are entitled to receive cumulative quarterly distributions equal to $0.528125 per unit. Following the second anniversary of the issuance of the Preferred units, the holders of the Preferredpreferred units will receive the common unit rate in lieu of the lower $0.528125 base amount. Approximately 29.6 million Series A preferred units remaining outstanding as a distribution the greater of $0.528125 per unit or the amount of per unit distributions paid to holders of MPLX LP common units.September 30, 2021.

The changes in the redeemable preferred balance from December 31, 20162020 through September 30, 20172021 are summarized below:
(In millions)Redeemable Series A Preferred Units
Balance at December 31, 2020$968 
Net income allocated (1)
79 
Distributions received by Series A preferred unitholders(61)
Balance at September 30, 2021$986 
(In millions)Redeemable Preferred Units
Balance at December 31, 2016$1,000
Net income49
Distributions received by Preferred unitholders(49)
Balance at September 30, 2017$1,000
(1)     Includes the Special Distribution Amount.


The holders may convert their 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 may convert the 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 trading period immediately preceding the conversion notice date. The conversion rate for the Preferred units shall be the quotient of (a) the sum of (i) $32.50, plus (ii) any unpaid cash distributions on the applicable Preferred unit, divided by (b) $32.50. The holders of the 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 units. In addition, upon certain events involving a change of control the holders of Preferred units may elect, among other potential elections, to convert their Preferred units to common units at the then-change of control conversion rate.


28



The 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 control. Therefore, they are presented as temporary equity in the mezzanine section of the Consolidated Balance Sheets. The 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 the carrying value of the Preferred units. As the 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 units would become redeemable.

9. Segment Information


The Partnership’sMPLX’s chief operating decision maker is the chief executive officer (“CEO”) of its general partner. The CEO reviews the Partnership’sMPLX’s discrete financial information, makes operating decisions, assesses financial performance and allocates resources on a type of service basis. The PartnershipMPLX has two2 reportable segments: L&S and G&P. Each of these segments areis organized and managed based upon the nature of the products and services it offers.


•L&S – transports, stores, distributes and distributesmarkets crude oil, andasphalt, refined petroleum products. Segment information for prior periodsproducts and water. Also includes retrospective adjustments in connection with the acquisition of HST, WHCan inland marine business, terminals, rail facilities, storage caverns 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.refining logistics.
•G&P – gathers, processes and transports natural gas; and gathers, transports, fractionates, stores and markets NGLs.


The Partnership has investmentsOur CEO evaluates the performance of our segments using Segment Adjusted EBITDA. Amounts included in entities that are accountednet income and excluded from Segment Adjusted EBITDA include: (i) depreciation and amortization; (ii) provision/(benefit) for using theincome taxes; (iii) amortization of deferred financing costs; (iv) gain/(loss) on 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-operatedinvestments; (ix) distributions and adjustments related to equity method investments’ financial informationinvestments; (x) unrealized derivative gains/(losses); (xi) acquisition costs; (xii) noncontrolling interest; and (xiii) other adjustments as if those investments were consolidated.

Segment operating income represents income from operations attributabledeemed 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 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 Predecessorsoperational performance of the HSM, HST, WHC and MPLXT businesses prior to the dates they were acquired by MPLX LP.segment.

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The tables below present information about revenues and other income, from operations andSegment Adjusted EBITDA, restructuring expenses, capital expenditures for the reported 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 income11
 1
 12
Total segment revenues and other income389
 670
 1,059
Costs and expenses:     
Segment cost of revenues176
 276
 452
Segment operating income before portion attributable to noncontrolling interests and Predecessor213
 394
 607
Segment portion attributable to noncontrolling interests and Predecessor—
 45
 45
Segment operating income attributable to MPLX LP$213
 $349
 $562

29




 Three Months Ended September 30, 2016
(In millions)L&S G&P Total
Revenues and other income:     
Segment revenues$339
 $567
 $906
Segment other income12
 1
 13
Total segment revenues and other income351
 568
 919
Costs and expenses:     
Segment cost of revenues153
 239
 392
Segment operating income before portion attributable to noncontrolling interests and Predecessor198
 329
 527
Segment portion attributable to noncontrolling interests and Predecessor74
 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 income35
 2
 37
Total segment revenues and other income1,130
 1,871
 3,001
Costs and expenses:    
Segment cost of revenues500
 781
 1,281
Segment operating income before portion attributable to noncontrolling interests and Predecessor630
 1,090
 1,720
Segment portion attributable to noncontrolling interests and Predecessor53
 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 income42
 1
 43
Total segment revenues and other income943
 1,596
 2,539
Costs and expenses:    
Segment cost of revenues392
 662
 1,054
Segment operating income before portion attributable to noncontrolling interests and Predecessor551
 934
 1,485
Segment portion attributable to noncontrolling interests and Predecessor216
 113
 329
Segment operating income attributable to MPLX LP$335
 $821
 $1,156


30



 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 LP349
 293
 971
 821
Segment operating income attributable to MPLX LP562
 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 investments23
 6
 29
 (72)
Other income - related parties13
 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 investments23
 6
 29
 (72)
Other income - related parties13
 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

(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 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

31




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 expenditures333
 183
 957
 668
Total segment capital expenditures453
 371
 1,310
 1,037
Less: Capital expenditures for Partnership-operated, non-wholly-owned subsidiaries in G&P segment101
 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&S4,520
 2,978
G&P14,715
 14,297
Total assets$19,238
 $17,509

10. Inventories

Inventories consist of the following:
(In millions)September 30, 2017 December 31, 2016
NGLs$3
 $2
Line fill9
 9
Spare parts, materials and supplies52
 44
Total inventories$64
 $55

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 assets2,181
 1,799
Barges and towing vessels484
 479
Terminals and related assets(1)
794
 759
Land, building, office equipment and other755
 757
Construction-in-progress986
 1,013
Total14,054
 13,102
Less accumulated depreciation2,132
 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.


32



12. Fair Value Measurements

Fair Values – Recurring

Fair value measurements and disclosures relate primarily to the Partnership’s derivative positions as discussedinvestments in Note 13. Money market funds, which are included in Cash and cash equivalents on the Consolidated Balance Sheets, are measured at fair value and are included in Level 1 measurements of the valuation hierarchy. Level 2 instruments include crude oil and natural gas swap contracts. Level 3 instruments include all NGL transactions and embedded derivatives in commodity contracts. The following table presents the financial instruments carried at 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 significant unobservable inputs used in the valuation of Level 3 instruments as of September 30, 2017. The market approach is used for valuation of all instruments.
Level 3 InstrumentBalance Sheet ClassificationUnobservable InputsValue RangeTime Period
Commodity contractsLiabilities
Forward ethane prices (per Gal)(1)
$0.27 - $0.28Oct. 17 - Dec. 17
Forward propane prices (per Gal)(1)
$0.68 - $0.91Oct. 17 - Dec. 18
Forward isobutane prices (per Gal)(1)
$0.82 - $1.06Oct. 17 - Dec. 18
Forward normal butane prices (per Gal)(1)
$0.76 - $1.03Oct. 17 - Dec. 18
Forward natural gasoline prices (per Gal)(1)
$1.18 - $1.22Oct. 17 - Dec. 18
Embedded derivatives in commodity contractsAssetsERCOT Pricing (per MegaWatt Hour)$24.19 - $26.05Oct. 17 - Dec. 17
Liabilities
Forward propane prices (per Gal)(1)
$0.61 - $0.91Oct. 17 - Dec. 22
Forward isobutane prices (per Gal)(1)
$0.75 - $1.06Oct. 17 - Dec. 22
Forward normal butane prices (per Gal)(1)
$0.69 - $1.03Oct. 17 - Dec. 22
Forward natural gasoline prices (per Gal)(1)
$1.15 - $1.22Oct. 17 - Dec. 22
Forward natural gas prices (per MMBtu)(2)
$2.30 - $3.11Oct. 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

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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 for the first five-year term and 75 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 and liabilities) – For the Partnership’s commodity contracts, increases in forward NGL prices result in a decrease 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 frac spread result in an increase (decrease) in the fair value of the embedded derivative liability. 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 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 commodity contracts, except for the Natural Gas Embedded Derivative. The Risk Department reports to the Chief Financial Officer and is responsible for the oversight 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/or data provided by at least one other independent third-party pricing service.

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 trendsunconsolidated affiliates as well as its understanding oftotal assets for our reportable segments:
Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2021202020212020
L&S
Service revenue$983 $989 $2,928 $2,924 
Rental income172 249 597 737 
Product related revenue3 9 11 49 
Sales-type lease revenue - related parties132 38 305 114 
Income from equity method investments41 36 112 126 
Other income15 13 46 40 
Total segment revenues and other income(1)
1,346 1,334 3,999 3,990 
Segment Adjusted EBITDA(2)
904 893 2,747 2,604 
Restructuring expenses— 27 — 27 
Capital expenditures85 118 220 410 
Investments in unconsolidated affiliates9 4 31 132 
G&P
Service revenue519 524 1,520 1,549 
Rental income80 94 263 271 
Product related revenue553 234 1,357 607 
Income/(loss) from equity method investments51 47 116 (1,138)
Other income10 14 38 41 
Total segment revenues and other income(1)
1,213 913 3,294 1,330 
Segment Adjusted EBITDA(2)
485 442 1,368 1,252 
Restructuring expenses— 9 — 9 
Capital expenditures69 131 135 375 
Investments in unconsolidated affiliates$23 $18 $85 $112 
(1)    Within the historical relationships between forward NGLtotal segment revenues and natural gas prices and the forward market data that is availableother income amounts presented above, third party revenues for the required period, such as crude oil pricingL&S segment were $138 million 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.


34



Changes in Level 3 Fair Value Measurements

The tables below include a rollforward of the balance sheet amounts$405 million for the three and nine months ended September 30, 20172021, respectively, and 2016,$139 million and $443 million for the three and nine months ended September 30, 2020, respectively. Third party revenues for the G&P segment were $1,170 million and $3,147 million for the three and nine months ended September 30, 2021, respectively, (includingand $858 million and $1,181 million for the change in fair value),three and nine months ended September 30, 2020, respectively.
(2)    See below for assets and liabilities classified by the Partnership within Level 3 of the valuation hierarchy.reconciliation from Segment Adjusted EBITDA to “Net income/(loss).”

(In millions)September 30, 2021December 31, 2020
Segment assets
Cash and cash equivalents$39 $15 
L&S20,729 20,938 
G&P14,931 15,461 
Total assets$35,699 $36,414 

20
 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) $(54)
Total losses (realized and unrealized) included in earnings(1)
(10) (12) (3) (4)
Settlements3
 3
 4
 6
Fair value at end of period$(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)


 Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016
(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$(4) $(40) $7
 $(32)
Total gains (losses) (realized and unrealized) included in earnings(1)
2
 (6) (5) (17)
Settlements(1) 2
 (6) 5
Netting adjustment(2)
—
 —
 1
 —
Fair value at end of period$(3) $(44) $(3) $(44)
The amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to liabilities still held at end of period$—
 $(4) $(4) $(15)

(1)
Gains and losses on Commodity Derivative Contracts classified as Level 3 are recorded in Product sales in the accompanying Consolidated Statements of Income. Gains and losses on Embedded Derivatives in Commodity Contracts are recorded in Purchased product costs and Cost of revenues.
(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 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 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 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).


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The fair value oftable below provides a reconciliation between “Net income/(loss)” and Segment Adjusted EBITDA.

Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2021202020212020
Reconciliation to Net income/(loss):
L&S Segment Adjusted EBITDA$904 $893 $2,747 $2,604 
G&P Segment Adjusted EBITDA485 442 1,368 1,252 
Total reportable segments1,389 1,335 4,115 3,856 
Depreciation and amortization(1)
(324)(346)(971)(992)
Provision for income taxes— (1)(1)(1)
Amortization of deferred financing costs(18)(15)(53)(44)
Non-cash equity-based compensation(1)(4)(6)(12)
Impairment expense— — (42)(2,165)
Net interest and other financial costs(200)(223)(618)(647)
Gain on extinguishment of debt(2)14 10 14 
Income/(loss) from equity method investments92 83 228 (1,012)
Distributions/adjustments related to equity method investments(129)(130)(371)(369)
Unrealized derivative losses(2)
(2)(10)(41)(1)
Restructuring expenses— (36)— (36)
Other(3)(3)(5)(5)
Adjusted EBITDA attributable to noncontrolling interests9 10 29 27 
Net income/(loss)$811 $674 $2,274 $(1,387)
(1)    Depreciation and amortization attributable to L&S was $131 million and $414 million for the Partnership’s long-term debt is estimated based on recent market non-binding indicative quotes. The fair value ofthree and nine months ended September 30, 2021, respectively, and $164 million and $440 million for the SMR liability is estimated using a discounted cash flow approach based onthree and nine months ended September 30, 2020, respectively. Depreciation and amortization attributable to G&P was $193 million and $557 million for the contractual cash flowsthree and nine months ended September 30, 2021, respectively, and $182 million and $552 million for the Partnership’s unsecured borrowing rate. The long-term debtthree 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 leases, and SMR liability:nine months ended September 30, 2020, respectively.
 September 30, 2017 December 31, 2016
(In millions)Fair Value Carrying Value Fair Value Carrying Value
Long-term debt$7,619
 $6,869
 $4,953
 $4,422
SMR liability106
 92
 108
 96

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,

36



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(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.


Volume
10. Inventories

Inventories consist of Commoditythe following:
(In millions)September 30, 2021December 31, 2020
NGLs$10 $5 
Line fill24 13 
Spare parts, materials and supplies107 100 
Total inventories$141 $118 

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11. Property, Plant and Equipment
Property, plant and equipment with associated accumulated depreciation is shown below:

September 30, 2021December 31, 2020
(In millions)Gross PP&EAccumulated DepreciationNet PP&EGross PP&EAccumulated DepreciationNet PP&E
L&S$12,296 $3,108 $9,188 $12,813 $2,997 $9,816 
G&P14,115 3,145 10,970 14,062 2,660 11,402 
Total$26,411 $6,253 $20,158 $26,875 $5,657 $21,218 

Long-lived assets used in operations are assessed for impairment whenever changes in facts and circumstances indicate that the carrying value of the assets may not be recoverable based on the expected undiscounted future cash flow of an asset group. For purposes of impairment evaluation, long-lived assets must be grouped at the lowest level for which independent cash flows can be identified, which is at least at the segment level and in some cases for similar assets in the same geographic region where cash flows can be separately identified. If the sum of the undiscounted cash flows is less than the carrying value of an asset group, fair value is calculated, and the carrying value is written down if greater than the calculated fair value.

During the first quarter of 2020, we identified an impairment trigger relating to asset groups within our Western G&P reporting unit as a result of significant impacts to forecasted cash flows for these asset groups resulting from the first quarter of 2020 events and circumstances as discussed in Note 1. The cash flows associated with these assets were significantly impacted by volume declines reflecting decreased forecasted producer customer production as a result of lower commodity prices. After assessing each asset group within the Western G&P reporting unit for impairment, only the East Texas G&P asset group resulted in the fair value of the underlying assets being less than the carrying value. As a result, an impairment of $174 million was recorded to “Impairment expense” on the Consolidated Statements of Income in the first quarter of 2020. See Note 1 for discussion of 2021 impairments.

12. Goodwill and Intangibles

Goodwill

During the first quarter of 2020, we performed an interim impairment analysis of the goodwill recorded based on consideration of a number of first quarter events and circumstances as discussed in Note 1. Our producer customers in our Eastern G&P region reduced production forecasts and drilling activity in response to the global economic downturn. Additionally, a decline in NGL prices impacted our future revenue forecast. As a result of the interim impairment analysis, we recorded an impairment of $1,814 million within the Eastern G&P reporting unit, which was recorded to “Impairment expense” on the Consolidated Statements of Income. The impairment was primarily driven by additional guidance related to the slowing of drilling activity, which reduced production growth forecasts from our producer customers.

Changes in the carrying amount of goodwill were as follows:
(In millions)L&SG&PTotal
Gross goodwill as of December 31, 2019$7,722 $3,141 $10,863 
Accumulated impairment losses— (1,327)(1,327)
Balance as of December 31, 20197,722 1,814 9,536 
Impairment losses— (1,814)(1,814)
Wholesale Exchange (Note 3)(65)— (65)
Balance as of December 31, 20207,657 — 7,657 
Balance as of September 30, 20217,657 — 7,657 
Gross goodwill as of September 30, 20217,657 3,141 10,798 
Accumulated impairment losses— (3,141)(3,141)
Balance as of September 30, 2021$7,657 $— $7,657 

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Intangible Assets

During the first quarter of 2020, we also determined that an impairment analysis of intangibles within our Western G&P reporting unit was necessary. See Note 11 for additional information regarding our assessment around the Western G&P reporting unit, and more specifically our East Texas G&P asset group. The fair value of the intangibles in our East Texas G&P asset group was determined based on applying the multi-period excess earnings method, which is an income approach. Key assumptions included management’s best estimates of the expected future cash flows from existing customers, customer attrition rates and the discount rate. After performing our evaluations related to the impairment of intangible assets associated with our East Texas G&P asset group during the first quarter of 2020, we recorded an impairment of $177 million to “Impairment expense” on the Consolidated Statements of Income related to our customer relationships. No additional impairments have been recorded since that time.

13. Fair Value Measurements

Fair Values – Recurring

Fair value measurements and disclosures relate primarily to MPLX’s derivative positions as discussed in Note 14. The following table presents the financial instruments carried at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 by fair value hierarchy level. MPLX has elected to offset the fair value amounts recognized for multiple derivative contracts executed with the same counterparty.
September 30, 2021December 31, 2020
(In millions)AssetsLiabilitiesAssetsLiabilities
Significant unobservable inputs (Level 3)
Embedded derivatives in commodity contracts$— $(104)$— $(63)
Total carrying value on Consolidated Balance Sheets$— $(104)$— $(63)

Level 3 instruments include an embedded derivative in commodity contracts. The embedded derivative liability relates to a natural gas purchase commitment embedded in a keep-whole processing agreement. The fair value calculation for these Level 3 instruments used significant unobservable inputs including: (1) NGL prices interpolated and extrapolated due to inactive markets ranging from $0.68 to $1.80 per gallon with a weighted average of $0.88 per gallon and (2) the probability of renewal of 100 percent for the first five-year term and second five-year term of the gas purchase commitment and related keep-whole processing agreement. Increases or decreases in the fractionation spread result in an increase or decrease in the fair value of the embedded derivative liability, respectively. Beyond the embedded derivative discussed above, we had no outstanding commodity derivative contracts as of September 30, 2021 or December 31, 2020.
Changes in Level 3 Fair Value Measurements

The following table is a reconciliation of the net beginning and ending balances recorded for net assets and liabilities classified as Level 3 in the fair value hierarchy.
Three Months Ended September 30, 2021Three Months Ended September 30, 2020
(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$— $(102)$— $(51)
Total losses (realized and unrealized) included in earnings(1)
— (7)— (12)
Settlements— 5 — 2 
Fair value at end of period— (104)— (61)
The amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to liabilities still held at end of period$— $(6)$— $(11)
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Nine Months Ended September 30, 2021Nine Months Ended September 30, 2020
(In millions)Commodity Derivative Contracts (net)Embedded Derivatives in Commodity Contracts (net)Commodity Derivative Contracts (net)Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period$— $(63)$— $(60)
Total losses (realized and unrealized) included in earnings(1)
— (52)— (5)
Settlements— 11 — 4 
Fair value at end of period— (104)— (61)
The amount of total losses for the period included in earnings attributable to the change in unrealized losses relating to liabilities still held at end of period$— $(44)$— $(2)
(1)     Gains and losses on derivatives embedded in commodity contracts are recorded in “Purchased product costs” on the Consolidated Statements of Income.

Fair Values – Reported

MPLX’s primary financial instruments are cash and cash equivalents, receivables, receivables from related parties, lease receivables from related parties, accounts payable, payables to related parties and debt. MPLX’s fair value assessment incorporates a variety of considerations, including (1) the 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. 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, approximate fair value due to the variable interest rate that approximates current market rates. Derivative Activityinstruments are recorded at fair value, based on available market information (see Note 14).


The fair value of MPLX’s debt is estimated based on recent market non-binding indicative quotes. The debt fair values are considered Level 3 measurements. The following table summarizes the fair value and carrying value of our third-party debt, excluding finance leases:
September 30, 2021December 31, 2020
(In millions)Fair ValueCarrying ValueFair ValueCarrying Value
Outstanding debt(1)
$20,553 $18,350 $22,951 $20,244 
(1)    Amounts outstanding under the MPC Loan Agreement are not included in the table above, as the carrying value approximates fair value. This balance is reflected in “Current liabilities - related parties” on the Consolidated Balance Sheets.

14. Derivative Financial Instruments

As of September 30, 2017, the Partnership2021, MPLX had the followingno outstanding commodity contracts that were executed to managebeyond the cash flow risk associated with future sales of NGLs and purchases of natural gas:embedded derivative discussed below.

Derivative contracts not designated as hedging instrumentsFinancial PositionNotional Quantity (net)
Crude Oil (bbl)Short18,400
Natural Gas (MMBtu)Long1,096,539
NGLs (gal)Short33,387,904

Embedded Derivatives in Commodity Contracts

The PartnershipDerivative - MPLX has a commodity contractnatural gas purchase commitment embedded in a keep-whole processing agreement with a producer customer in the Southern Appalachian region that creates a floor onexpiring in December 2022. The customer has the frac spreadunilateral option to extend the agreement 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.2 consecutive five-year terms through December 2032. For accounting purposes, these contractsthe natural gas purchase commitment and the term extending options 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’s option to extend the agreement for two successive five-year terms through December 31, 2032. The purchase of gas at prices based on the frac spread and the option to extend the agreements have been identified as a singlecompound embedded derivative, which is recorded at fair value.derivative. The probability of renewalthe 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’scustomer’s potential business strategy decision points that may exist at the time the counterpartythey 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. For further information regarding the fair value measurement of derivative instruments, see Note 13. As of September 30, 20172021 and December 31, 2016,2020, the estimated fair value of this contract was a liability of $52$104 million and $54$63 million, respectively.

The Partnership has a commodity contract that gives it 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. 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. The impact of the Partnership’s derivative instruments on its Consolidated Balance Sheets is summarized below:
24
(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)



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

Certain derivative positions are subject to master netting agreements, therefore, the PartnershipMPLX 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 inAs of September 30, 2021 and December 31, 2020, there were no derivative assets or liabilities that were offset on the Consolidated Balance Sheets:Sheets. The impact of MPLX’s derivative instruments on its Consolidated Balance Sheets is summarized below:

 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) $—
 $(57)
(In millions)September 30, 2021December 31, 2020
Derivative contracts not designated as hedging instruments and their balance sheet locationAssetLiabilityAssetLiability
Commodity contracts(1)
Other current assets / Other current liabilities$— $(15)$— $(7)
Other noncurrent assets / Deferred credits and other liabilities— (89)— (56)
Total$— $(104)$— $(63)

In(1)     Includes the table above, the Partnership does not offset a counterparty’s currentembedded derivative contracts with the counterparty’s non-current derivative contracts, although the Partnership’s master netting arrangements would allow current and non-current positions to be offset in the event of default. Additionally, in the event of default, the Partnership’s master netting arrangements would allow for the offsetting of all transactions executed under the master netting arrangement. These types of transactions may include non-derivative instruments, derivatives qualifying for scope exceptions, receivables and payables arising from settled positions and other forms of non-cash collateral (such as letters of credit).commodity contract discussed above.


The impact of the Partnership’sMPLX’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)2021202020212020
Purchased product costs
Realized loss$(5)$(2)$(11)$(4)
Unrealized loss(2)(10)(41)(1)
Purchased product costs derivative loss(7)(12)(52)(5)
Total derivative loss$(7)$(12)$(52)$(5)

 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)

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

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14.15. Debt


The Partnership’sMPLX’s outstanding borrowings consistedconsist of the following:
(In millions)September 30, 2021December 31, 2020
MPLX LP:
Bank revolving credit facility$— $175 
Floating rate senior notes— 1,000 
Fixed rate senior notes18,532 19,240 
Consolidated subsidiaries:
MarkWest23 23 
ANDX45 87 
Financing lease obligations9 11 
Total18,609 20,536 
Unamortized debt issuance costs(105)(116)
Unamortized discount/premium(250)(281)
Amounts due within one year(1)(764)
Total long-term debt due after one year$18,253 $19,375 
(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 2023710
 710
4.500% senior notes due July 2023989
 989
4.875% senior notes due December 20241,149
 1,149
4.000% senior notes due February 2025500
 500
4.875% senior notes due June 20251,189
 1,189
4.125% senior notes due March 20271,250
 —
5.200% senior notes due March 20471,000
 —
Consolidated subsidiaries:   
MarkWest - 4.500% - 5.500% senior notes, due 2023-202563
 63
MPL - capital lease obligations due 20207
 8
Total7,277
 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


Credit AgreementsAgreement


On July 21, 2017, the Partnership entered into a syndicatedMPLX’s amended and restated credit agreement to replace its previously outstanding $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(as amended, the “MPLX Credit Agreement 2022”Agreement”). The financial covenants, provides for borrowings up to $3.5 billion 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.a term that extends to July 2024. During the nine 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 Partnership2021, MPLX borrowed$420 million $3.0 billion under the MPLX Credit Agreement, 2022, at an average interest rate of 2.7021.345 percent,. and repaid $3.175 billion. At September 30, 2017, the Partnership2021, MPLX had $420 millionno outstanding borrowings and $3less than $1 million in letters of credit outstanding under the new facility,MPLX Credit Agreement, resulting in total availability of $1.827$3.5 billion, or 81.2100 percent of the borrowing capacity.

25
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
Table 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.Contents


Floating Rate Senior Notes


On February 10, 2017,September 3, 2021 MPLX redeemed, at par value, all of the Partnership completed a public offering of $2.25 billion aggregate principal amount of unsecured senior notes, consisting of (i) $1.25 billion aggregate principal amount of 4.125 percent senior notes due in March 2027 and (ii) $1.0 billion aggregate principal amount of 5.200 percentfloating rate senior notes due September 2022, which resulted in March 2047 (collectively, the “New Senior Notes”). The net proceeds fromimmediate expense recognition of $2 million of unamortized debt issuance costs. These costs are included on the NewConsolidated Statements of Income as “Other financial costs.” This redemption was funded primarily by borrowings under the MPC Loan Agreement.

Fixed Rate Senior Notes totaled approximately $2.22 billion, after deducting underwriting discounts,

MPLX’s senior notes, including those issued by consolidated subsidiaries, consist of various series of senior notes expiring between 2022 and were used for general partnership purposes and capital expenditures.2058 with interest rates ranging from 1.750 percent to 5.500 percent. Interest on each series of the notes is payable semi-annually in arrears on March 1various dates depending on the series of the notes.

On January 15, 2021 MPLX redeemed all of the $750 million outstanding aggregate principal amount of 5.250 percent senior notes due January 15, 2025, including approximately $42 million aggregate principal amount of senior notes issued by ANDX at a price equal to 102.625 percent of the principal amount. The payment of $20 million related to the note premium, offset by the immediate expense recognition of $12 million of unamortized debt premium and issuance costs, resulted in a loss on extinguishment of debt of $8 million that is included on the Consolidated Statements of Income as “Other financial costs.”

16. Revenue

Disaggregation of Revenue

The following tables represent a disaggregation of revenue for each reportable segment for the three and nine months ended September 1, commencing on September 1, 2017.30, 2021 and 2020:



Three Months Ended September 30, 2021
(In millions)L&SG&PTotal
Revenues and other income:
Service revenue$87 $513 $600 
Service revenue - related parties896 6 902 
Service revenue - product related— 82 82 
Product sales1 447 448 
Product sales - related parties2 24 26 
Total revenues from contracts with customers$986 $1,072 2,058 
Non-ASC 606 revenue(1)
501 
Total revenues and other income$2,559 

Three Months Ended September 30, 2020
(In millions)L&SG&PTotal
Revenues and other income:
Service revenue$87 $517 $604 
Service revenue - related parties902 7 909 
Service revenue - product related— 41 41 
Product sales7 158 165 
Product sales - related parties2 35 37 
Total revenues from contracts with customers$998 $758 1,756 
Non-ASC 606 revenue(1)
491 
Total revenues and other income$2,247 

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Nine Months Ended September 30, 2021
(In millions)L&SG&PTotal
Revenues and other income:
Service revenue$262 $1,505 $1,767 
Service revenue - related parties2,666 15 2,681 
Service revenue - product related— 235 235 
Product sales3 1,031 1,034 
Product sales - related parties8 91 99 
Total revenues from contracts with customers$2,939 $2,877 5,816 
Non-ASC 606 revenue(1)
1,477 
Total revenues and other income$7,293 
15.
Nine Months Ended September 30, 2020
(In millions)L&SG&PTotal
Revenues and other income:
Service revenue$248 $1,531 $1,779 
Service revenue - related parties2,676 18 2,694 
Service revenue - product related— 102 102 
Product sales39 415 454 
Product sales - related parties10 90 100 
Total revenues from contracts with customers$2,973 $2,156 5,129 
Non-ASC 606 loss(1)
191 
Total revenues and other income$5,320 
(1)    Non-ASC 606 Revenue includes rental income, sales-type lease revenue, income/(loss) 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 included in “Other current assets” and “Other noncurrent 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. The sales and related “Receivable, net” 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.

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The tables below reflect the changes in our contract balances for the nine-month periods ended September 30, 2021 and 2020:
(In millions)
Balance at December 31, 2020(1)
Additions/ (Deletions)
Revenue Recognized(2)
Balance at September 30, 2021
Contract assets$40 $(21)$1 $20 
Long-term contract assets2 — — 2 
Deferred revenue37 40 (27)50 
Deferred revenue - related parties91 59 (77)73 
Long-term deferred revenue119 11 — 130 
Long-term deferred revenue - related parties48 (12)— 36 
Long-term contract liability$6 $— $— $6 

(In millions)
Balance at December 31, 2019(1)
Additions/ (Deletions)
Revenue Recognized(2)
Balance at
September 30, 2020
Contract assets$39 $(9)$(1)$29 
Deferred revenue23 16 (6)33 
Deferred revenue - related parties53 77 (60)70 
Long-term deferred revenue90 25 — 115 
Long-term deferred revenue - related parties$55 $(7)$— $48 
(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 periods.

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 September 30, 2021, the amounts allocated to contract assets and contract liabilities on the Consolidated Balance Sheets are $288 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 22 years. Further, MPLX does not disclose variable consideration due to volume variability in the table below.

(In millions)
2021$476 
20221,795 
20231,656 
20241,524 
2025 and thereafter4,484 
Total revenue on remaining performance obligations(1),(2),(3)
$9,935 
(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 and sales-type leases are excluded from this table, see further discussion about leases in Note 18.
(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.

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17. Supplemental Cash Flow Information


 Nine Months Ended September 30,
(In millions)20212020
Net cash provided by operating activities included:
Interest paid (net of amounts capitalized)$627 $631 
Income taxes paid2 1 
Non-cash investing and financing activities:
Net transfers of property, plant and equipment (to)/from materials and supplies inventories1 (1)
Fair value of common units redeemed for Wholesale Exchange$— $340 
 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
 —

(1)Contribution of assets to Sherwood Midstream and Sherwood Midstream Holdings. See Note 4.


The Consolidated Statements of Cash Flows exclude changes to the Consolidated Balance Sheets that diddo not affect cash. The following is the change of additions to property, plant and equipment related to capital accruals:
 Nine Months Ended September 30,
(In millions)20212020
Decrease in capital accruals$(19)$(197)

18. Leases

During the second quarter of 2021 and during the first quarter of 2020, reimbursements for projects and changes to minimum volume commitments at certain L&S locations were agreed to between MPLX and MPC. These reimbursements and minimum volume commitments relate to the storage services agreements between MPLX and MPC at these locations and required the embedded leases within these agreements to be reassessed under ASC 842. As a result of the reassessment, certain leases were reclassified from an operating lease to a sales-type lease. Accordingly, the underlying assets previously shown on the Consolidated Balance Sheets associated with the sales-type leases were derecognized and the net investment in the lease (i.e., the sum of the present value of the future lease payments and the unguaranteed residual value of the assets) was recorded as a lease receivable during the respective periods. See Note 5 for the location of lease receivables and unguaranteed residual assets on the Consolidated Balance Sheets. The difference between the net book value of the underlying assets and the net investment in the lease has been recorded as a “Contribution from MPC” in the Consolidated Statements of Equity given the impacted storage services agreements are related to a common control transaction. During the second quarter of 2021, MPLX derecognized approximately $421 million of property, plant and equipment, recorded a lease receivable of approximately $519 million, recorded an unguaranteed residual asset of approximately $14 million with the difference recorded as a deemed “Contribution from MPC” of $112 million. During the first quarter of 2020, MPLX derecognized approximately $171 million of property, plant and equipment, recorded a lease receivable of approximately $370 million, recorded an unguaranteed residual asset of approximately $10 million with the difference recorded as a deemed “Contribution from MPC” of $209 million.

Lease revenues included on the Consolidated Statements of Income were as follows:
Three Months Ended September 30, 2021Three Months Ended September 30, 2020
(In millions)Related PartyThird PartyRelated PartyThird Party
Operating leases:
Operating lease revenue(1)
$139 $56 $208 $70 
Sales-type leases:
Profit/(loss) recognized at the commencement date— — — — 
Interest income (Sales-type lease revenue- fixed minimum)133 — 37 — 
Interest income (Revenue from variable lease payments)$— $— $1 $— 

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Nine Months Ended September 30,Nine Months Ended September 30, 2021Nine Months Ended September 30, 2020
(In millions)2017 2016(In millions)Related PartyThird PartyRelated PartyThird Party
Increase in capital accruals$55
 $—
Operating leases:Operating leases:
Operating lease revenue(1)
Operating lease revenue(1)
$485 $192 $589 $199 
Sales-type leases:Sales-type leases:
Profit/(loss) recognized at the commencement dateProfit/(loss) recognized at the commencement date— — — — 
Interest income (Sales-type lease revenue- fixed minimum)Interest income (Sales-type lease revenue- fixed minimum)305 — 113 — 
Interest income (Revenue from variable lease payments)Interest income (Revenue from variable lease payments)$— $— $1 $— 

(1)    These amounts are presented net of executory costs.

16. Equity-Based CompensationSee Note 5 for additional information on where related party lease assets are recorded in the Consolidated Balance Sheets. Capital expenditures related to assets subject to sales-type lease arrangements were $33 million for the three and nine months ended September 30, 2021. Third party lease assets are less than $1 million as of September 30, 2021 and are included within the “Receivables, net” and “Other noncurrent assets” captions within the Consolidated Balance Sheets.


Phantom Units – The following is a summaryschedule of phantom unit award activityfuture payments on the sales-type leases as of MPLX LP common units for the nine months ended September 30, 2017:2021:
(In millions)Related Party
2021$136 
2022543 
2023544 
2024538 
2025525 
2026 and thereafter1,018 
Total minimum future rentals3,304 
Less: present value discount2,371 
Lease receivable$933 

 Number
of Units		 Weighted
Average
Fair Value
Outstanding at December 31, 20161,173,411
 $33.09
Granted653,721
 36.36
Settled(288,584) 33.50
Forfeited(113,107) 34.59
Outstanding at September 30, 20171,425,441
 34.39

Performance Units – The Partnership grants performance units under the MPLX LP 2012 Incentive Compensation Plan to certain officers of the general partner and certain eligible MPC 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 performance units paying out in units are accounted for as equity awards. The performance units granted in 2017 are hybrid awards having a three-year performance period of January 1, 2017 through December 31, 2019. 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, and a market condition based on MPLX LP’s total unitholder return over the entire three-year performance period. 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 for the 2017 equity-classified performance units.

The following is a summary of the equity-classified performance unit award activity for the nine months ended September 30, 2017:
Number of
Units
Outstanding at December 31, 20161,799,249
Granted1,407,062
Settled(464,500)
Forfeited(35,217)
Outstanding at September 30, 20172,706,594

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17.19. Commitments and Contingencies


The PartnershipMPLX 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 PartnershipMPLX has not recorded an accrueda liability, the PartnershipMPLX is unable to estimate a range of possible losses forloss because the reasons discussed in more detail below.issues involved have not been fully developed through pleadings, discovery or court proceedings. However, the ultimate resolution of some of these contingencies could, individually or in the aggregate, be material.


Environmental Matters – The PartnershipMPLX 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, 20172021 and December 31, 2016,2020, accrued liabilities for remediation totaled $14$22 million and $3$17 million, respectively. However, itIt is not presently possible to estimate the ultimate amount of all remediation costs that might be incurred or the penalties, if any, whichthat may be imposed. At September 30, 2021 and December 31, 2016,2020, there was less than $1 million in receivables fromwere no balances with MPC for indemnification of environmental costs related to incidents occurring prior to the Initial Offering. There were no such receivables at September 30, 2017.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 PartnershipMPLX is involved in a number of other environmental enforcement matters arising in the ordinary course of business. While the outcome and impact onto 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 – 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 has objected to this ruling and is seeking an appeal. There are several third-party defendants in the litigation and MPL has asserted cross-claims in contribution against the various third-party defendants. This litigation is currently pending in the Third Judicial Circuit Court, Madison County,


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Illinois. 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 is unable to estimate a reasonably possible loss (or range of losses) for this litigation. Under the omnibus agreement, MPC will indemnify the Partnership for the full cost of any losses should MPL be deemed responsible for any damages in this lawsuit.

The PartnershipMPLX 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 PartnershipMPLX cannot be predicted with certainty, the Partnershipmanagement believes the resolution of these other lawsuits and proceedings will not, individually or collectively, have a material adverse effect on its consolidated financial position, results of operations or cash flows.


Guarantees– Over the years, the PartnershipMPLX 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 PartnershipMPLX 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 PartnershipMPLX 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.


We hold a 9.19 percent indirect interest in a joint venture (“Dakota Access”) that owns and operates the Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline projects, collectively referred to as the Bakken Pipeline system or DAPL. In 2020, the U.S. District Court for the District of Columbia (the “D.D.C.”) ordered the U.S. Army Corps of Engineers (“Army Corps”), which granted permits and an easement for the Bakken Pipeline system, to prepare an environmental impact statement (“EIS”) relating to an easement under Lake Oahe in North Dakota. The D.D.C. later ordered vacatur of the easement during the pendency of the EIS and further ordered a shut down of the pipeline by August 5, 2020. On August 5, 2020, the U.S. Court of Appeals for the District of Columbia (the “Court of Appeals”) stayed the D.D.C.’s injunction that required the pipeline be shutdown and emptied of oil by August 5, 2020. On January 26, 2021, the Court of Appeals upheld the D.D.C.’s order vacating the easement while the Army Corps prepares the EIS. The Court of Appeals reversed the D.D.C.’s order to the extent it directed that the pipeline be shutdown and emptied of oil. In May 2021, the D.D.C. denied a renewed request for an injunction to shut down the pipeline while the EIS is being prepared. In June 2021, the D.D.C. issued an order dismissing without prejudice the tribes’ claims against the Dakota Access Pipeline. The judge noted that the plaintiffs may move to reopen the case in the event of a violation of the court’s prior orders. Dakota Access has petitioned the U.S. Supreme Court for review of the Court of Appeal’s decision upholding the D.D.C.’s order vacating the easement. The pipeline remains operational.
We have entered into a Contingent Equity Contribution Agreement whereby MPLX LP, along with the other joint venture owners in the Bakken Pipeline system, has 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 the Bakken Pipeline system. If the pipeline were temporarily shut down, MPLX would have to contribute its 9.19 percent pro rata share of funds required to pay interest accruing on the notes and any portion of the principal that matures while the pipeline is shutdown. MPLX also expects to contribute its 9.19 percent pro rata share of any costs to remediate any deficiencies to reinstate the permit and/or return the pipeline into operation. If the vacatur of the easement permit results in a permanent shutdown of the pipeline, MPLX would have to contribute its 9.19 percent pro rata share of the cost to redeem the bonds (including the 1% redemption premium required pursuant to the indenture governing the notes) and any accrued and unpaid interest. As of September 30, 2021, our maximum potential undiscounted payments under the Contingent Equity Contribution Agreement were approximately $230 million.

Other Legal Proceedings – In early July 2020, Tesoro High Plains Pipeline Company, LLC (“THPP”), a subsidiary of MPLX, received a Notification of Trespass Determination from the Bureau of Indian Affairs (“BIA”) relating to a portion of the Tesoro High Plains Pipeline that crosses the Fort Berthold Reservation in North Dakota. The notification covered the rights of way for 23 tracts of land and demanded the immediate cessation of pipeline operations. The notification also assessed trespass damages of approximately $187 million. THPP appealed this determination, which triggered an automatic stay of the requested pipeline shutdown and payment. On October 29, 2020, the Assistant Secretary - Indian Affairs issued an order vacating the BIA’s trespass order and requiring the Regional Director for the BIA Great Plains Region to issue a new decision on or before December 15 covering all 34 tracts at issue. On December 15, 2020, the Regional Director of the BIA issued a new trespass notice to THPP consistent with the Assistant Secretary - Indian Affairs order vacating the prior trespass order. The new order found that THPP was in trespass and assessed trespass damages of approximately $4 million (including interest), which has been paid. The order also required THPP to immediately cease and desist use of the portion of the pipeline that crosses the property at issue. THPP has complied with the Regional Director’s December 15, 2020 notice. On February 12, 2021, landowners filed suit in the U.S. District Court for the District of North Dakota (the “District of North Dakota”) against THPP, the Department of the Interior, the Assistant Secretary - Indian Affairs, the Interior Board of Indian Appeals and the BIA, requesting, among other things, that decisions by the Assistant Secretary - Indian Affairs and the Interior Board of Indian Appeals be vacated as to the award of damages to plaintiffs. In March 2021, THPP received a copy of an order purporting to vacate all orders related to THPP’s alleged trespass issued by the BIA between July 2, 2020 and January 14, 2021. The order
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directs the Regional Director of the BIA to reconsider the issue of THPP’s alleged trespass and issue a new order, if necessary, after all interested parties have had an opportunity to be heard. Subsequently, landowners voluntarily dismissed the suit filed in the District of North Dakota. On April 23, 2021, THPP filed a lawsuit in the District of North Dakota against the United States of America, the U.S. Department of the Interior and the BIA challenging the March order purporting to vacate all previous orders related to THPP’s alleged trespass.

We continue to work towards a settlement of this matter with holders of the property rights at issue.

Contractual Commitments and Contingencies – At September 30, 2017, the Partnership’s contractual commitments to acquire property, plant and equipment totaled $520 million. These commitments at September 30, 2017 were primarily related to plant expansion projects for the Marcellus and Southwest Operations. In addition, from time to time and in the ordinary course of business, the PartnershipMPLX and its affiliates provide guarantees of the Partnership’sMPLX’s subsidiaries payment and performance obligations in the G&P segment. Certain natural gas processing and gathering arrangements require the PartnershipMPLX 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, 2017,2021, management does not believe there are any indications that the PartnershipMPLX 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.



42



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 also be read in conjunction with the unaudited consolidated 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 Current2020.

Disclosures Regarding Forward-Looking Statements

This Quarterly Report on Form 8-K filed on May 1, 2017.

10-Q, particularly Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures about Market Risk, includes various forward-looking statements concerning trendsthat are subject to risks, contingencies or events potentially affecting our business.uncertainties. You can identify our forward-looking statements by words such as “anticipate,” “believe,” “estimate,“commitment,” “objective,“could,” “design,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “imply,” “intend,” “may,” “objective,” “opportunity,” “outlook,” “plan,” “policy,” “position,” “potential,” “predict,” “priority,” “project,” “potential,“proposition,” “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

Forward-looking statements include, among other things, statements regarding:

•future financial and operating results;
•environmental, social and governance (“ESG”) goals and targets, including those related to greenhouse gas emissions, diversity and inclusion and ESG reporting;
•our plans to achieve our ESG goals and targets and to monitor and report progress thereon;
•the success or timing of completion of ongoing or anticipated capital or maintenance projects;
•the timing and amount of future distributions or unit repurchases; and
•the anticipated effects of actions of third parties such as competitors, activist investors, 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. 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:

•general economic, political or regulatory developments, including inflation, changes in governmental policies relating to refined petroleum products, crude oil, natural gas or NGLs, or taxation;
•the magnitude, duration and extent of future resurgences of the Private Securities Litigation Reform ActCOVID-19 pandemic and its restrictions, including travel restrictions, business and school closures, increased remote work, stay-at-home orders and other actions taken by individuals, governments and the private sector to stem the spread of 1995, these statements are accompaniedthe virus;
•the ability of MPC to achieve its strategic objectives and the effects of those strategic decisions on us;
•further impairments;
•negative capital market conditions, including an increase of the current yield on common units;
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•the ability to achieve strategic and financial objectives, including with respect to distribution coverage, future distribution levels, proposed projects and completed transactions;
•the success of MPC’s portfolio optimization, including the ability to complete any divestitures on commercially reasonable terms and/or within the expected timeframe, and the effects of any such divestitures on our business, financial condition, results of operations and cash flows;
•the adequacy of capital resources and liquidity, including the 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;
•volatility in 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 cautionary language identifying important factors, though not necessarily allcompetitors;
•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 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 or enforcement actions initiated thereunder;
•adverse results in litigation;
•the effect of restructuring or reorganization of business components;
•the potential effects of changes in tariff rates on our business, financial condition, results of operations and cash flows;
•changes in foreign imports and exports of crude oil, refined products, natural gas and NGLs;
•changes in producer customers’ drilling plans or in volumes of throughput of crude oil, natural gas, NGLs, refined products or other hydrocarbon-based products;
•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 factors, whichfuels or vehicles;
•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;
•expectations regarding joint venture arrangements and other acquisitions or divestitures of assets;
•midstream and refining industry overcapacity or under capacity;
•accidents or other unscheduled shutdowns affecting our machinery, pipelines, processing, fractionation and treating facilities or equipment, means of transportation, or those of our suppliers or customers;
•acts of war, terrorism or civil unrest that could cause future outcomesimpair our ability to differ materially from those set forth in forward-looking statements. gather, process, fractionate or transport crude oil, natural gas, NGLs or refined products; and
•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.

For additional risk factors affecting our business, see Item 1A. Risk Factorsthe risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2016.2020. We undertake no obligation to update any forward-looking statement except to the extent required by applicable law.


PARTNERSHIPMPLX OVERVIEW


We are a diversified, growth-oriented master limited partnershiplarge-cap MLP formed by MPC, to own, operate, developthat owns and acquireoperates midstream energy infrastructure assets. We areand logistics assets, and provides fuels distribution services. The business consists of two segments based on the nature of services it offers: Logistics and Storage (“L&S”), and Gathering and Processing (“G&P”). The L&S segment is engaged in the transportation, storage, distribution and marketing of crude oil, asphalt, refined petroleum products and water. The G&P segment provides
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gathering, processing and transportation of natural gas; and the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products.NGLs.


SIGNIFICANT FINANCIAL AND OTHER HIGHLIGHTS


Significant financial highlights including revenues and other highlightsincome, income from operations, net income, adjusted EBITDA attributable to MPLX and DCF attributable to GP and LP unitholders for the three months ended September 30, 20172021 and September 30, 2020 are listedshown in the chart below. Refer toSee the Non-GAAP Financial Information section below for the definitions of Adjusted EBITDA and DCF and the Results of Operations and Liquidity and Capital Resourcessection for further details.details regarding changes in these metrics.

mplx-20210930_g1.jpg
Other Highlights
L&S segment operating income attributable to MPLX LP increased approximately $89 million, or 72 percent, for the three months ended September 30, 2017 compared to the same period
•Announced a third quarter 2021 distribution of 2016 due to $74 million from the inclusion$1.28 per common unit, which consists of HST, WHCa base distribution amount of $0.705 per common unit and MPLXT results after our acquisition asa special distribution amount of March 1, 2017and$7 million from the acquisition of the Ozark pipeline.
$0.575 per common unit.
G&P segment operating income attributable to MPLX LP increased approximately $56 million, or 19 percent, for the three months ended September 30, 2017 compared to the same period of 2016. The G&P segment realized product price increases and volume increases during•During the third quarter of 2017 primarily due2021, we returned $155 million of cash to expansionsunitholders through the repurchase of over 5 million common units under our unit repurchase program.
•Generated net cash provided by operating activities of $1,182 million in the Southwest as well as growth at the Sherwood, Majorsville and Bluestone (previously referred to as Keystone) plants. Compared to the third quarter of 2016, processing volumes were up approximately 11 percent, fractionated volumes were up approximately 14 percent and gathering volumes were up approximately 13 percent.

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

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 storage capacity (crude, finished products and intermediates), 619 tanks, 32 rail and truck racks, and 18 docks and gasoline blenders. This offer,2021, which is projected to contribute approximately $1.0 billion of annual EBITDA, is currently under review 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.

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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 deliverresulted in excess cash flow after distributions to common and preferred unitholders 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 received during the third quarter 2017.$310 million.
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 200 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.

CURRENT ECONOMIC ENVIRONMENT
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”).

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During the nine months ended September 30, 2017,of 2021, we issuedcontinued to see improvements in the environment in which our business operates as COVID-19 impacts are beginning to subside. The increased availability of vaccinations and easing of COVID-19 restrictions has been followed by an aggregateincrease in economic activity despite the recent resurgence in COVID-19. We are unable to predict the long-term impacts COVID-19 may have on our financial position and results.

In the first quarter of 13,846,998 commons units under our ATM Program, generating net proceeds2020, the outbreak of approximately $473 million. AsCOVID-19 and its development into a pandemic resulted in significant economic disruption globally. Actions taken by various governmental authorities, individuals and companies around the world to prevent the spread of September 30, 2017, $1.7 billionCOVID-19 through social distancing restricted travel, many business operations, public gatherings and the overall level of common unitsindividual movement and in-person interaction across the globe. This significantly reduced global economic activity and resulted in a decline in the demand for products for which we provide midstream services. Macroeconomic conditions and global geopolitical events have also resulted in significant price volatility related to those aforementioned products.

Many uncertainties remain available for issuance throughwith respect to COVID-19 and we are unable to predict the ATM Program.ultimate economic impacts from COVID-19 and how quickly economies can fully recover to pre-pandemic levels. We believe we have proactively addressed many of the known impacts of COVID-19 to the extent possible and will strive to continue to do so, but there can be no guarantee the measures will be fully effective. MPLX remains focused on executing its strategic priorities of strict capital discipline, lowering the cost structure, and portfolio optimization.


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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, DCF, free cash flow (“FCF”) and DCF.excess/deficit cash flow. The amount of Adjusted EBITDA and DCF generated is considered by the board of directors of our general partner in approving the Partnership’sMPLX’s cash distributions. Management also utilizes Segment Adjusted EBITDA in evaluating the financial performance of our segments. The use of this measure allows investors to understand how management evaluates financial performance to make operating decisions and allocate resources.


We define Adjusted EBITDA as net income adjusted forfor: (i) depreciation and amortization; (ii) provision provision/(benefit) for income taxes; (iii) amortization of deferred financing costs; (iv) (gain)/loss on 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 entitiesand 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 forfor: (i) deferred revenue impacts; (ii) sales-type lease payments, net of income; (iii) net interest and other financial costs; (iii)(iv) net maintenance capital expenditures; (v) equity method investment capital expenditures paid out; and (iv)(vi) other non-cash items. The Partnership makesadjustments as deemed necessary. Segment Adjusted EBITDA represents Adjusted EBITDA attributable to the reportable segments.

We make 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 define FCF as net cash provided by operating activities adjusted for (i) net cash used in investing activities; (ii) cash contributions from MPC; (iii) cash contributions from noncontrolling interests and (iv) cash distributions to noncontrolling interests. We define excess/deficit cash flow as FCF adjusted for distributions to common and preferred unitholders.

We believe that the presentation of Adjusted EBITDA, DCF, FCF and DCFexcess/deficit cash flow 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 while the GAAP measure most directly comparable to FCF and excess/deficit cash flow is net cash provided by operating activities. Adjusted EBITDA and DCFThese non-GAAP financial measures should not be considered alternatives to GAAP net income or net cash provided by operating activities. Adjusted EBITDA and DCFactivities as they 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 DCFThese non-GAAP financial measures should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. Additionally, because Adjusted EBITDA and DCFnon-GAAP financial measures 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 the Results of Operations.

Management evaluates contract performance on the basisOperations section. For a reconciliation of net operating margin, a non-GAAP financialFCF and excess/deficit cash flow to their most directly comparable 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 managementcalculated 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 marginGAAP, see the Liquidity 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.Capital resources section.

In evaluating our financial performance, management utilizes the segment performance measures, segment revenues and segment operating income, including total segment operating income. The use of these 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 and dispositions 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 tabletables and discussion isare a summary of our results of operations for the three and nine months ended September 30, 20172021 and 2016,2020, including a reconciliation of Adjusted EBITDA and DCF from net income“Net income/(loss)” and net“Net cash provided by operating activities,” to the most directly comparable GAAP financial measures. Prior period financial information has been retrospectively adjusted for the acquisition of HST, WHC and MPLXT.
35
 Three Months Ended September 30, Nine Months Ended September 30,
(In millions)2017 2016 Variance 2017 2016 Variance
Total revenues and other income$980
 $838
 $142
 $2,782
 $2,181
 $601
Costs and expenses:           
Cost of revenues (excludes items below)129
 122
 7
 381
 329
 52
Purchased product costs170
 117
 53
 441
 310
 131
Rental cost of sales19
 13
 6
 44
 42
 2
Rental cost of sales - related parties—
 —
 —
 1
 1
 —
Purchases - related parties114
 109
 5
 330
 286
 44
Depreciation and amortization164
 151
 13
 515
 438
 77
Impairment expense—
 —
 —
 —
 130
 (130)
General and administrative expenses59
 56
 3
 174
 172
 2
Other taxes14
 12
 2
 40
 37
 3
Total costs and expenses669
 580
 89
 1,926
 1,745
 181
Income from operations311
 258
 53
 856
 436
 420
Related party interest and other financial costs1
 —
 1
 1
 1
 —
Interest expense, net of amounts capitalized77
 51
 26
 217
 158
 59
Other financial costs15
 13
 2
 40
 37
 3
Income before income taxes218
 194
 24
 598
 240
 358
Provision (benefit) for income taxes1
 —
 1
 3
 (12) 15
Net income217
 194
 23
 595
 252
 343
Less: Net income attributable to noncontrolling interests1
 2
 (1) 3
 3
 —
Less: Net income attributable to Predecessor—
 51
 (51) 36
 149
 (113)
Net income attributable to MPLX LP$216
 $141
 $75
 $556
 $100
 $456
            
Adjusted EBITDA attributable to MPLX LP(1)
$538
 $375
 $163
 $1,435
 $1,028
 $407
DCF(1)
442
 301
 141
 1,183
 822
 361
DCF attributable to GP and LP unitholders(1)
426
 285
 141
 1,134
 797
 337

(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)20212020Variance20212020Variance
Revenues and other income:
Total revenues and other income(1)
$2,559 $2,247 $312 $7,293 $5,320 $1,973 
Costs and expenses:
Cost of revenues (excludes items below)298 323 (25)864 1,006 (142)
Purchased product costs421 152 269 1,035 374 661 
Rental cost of sales33 33 — 97 101 (4)
Rental cost of sales - related parties24 32 (8)86 119 (33)
Purchases - related parties307 297 10 902 853 49 
Depreciation and amortization324 346 (22)971 992 (21)
Impairment expense— — — 42 2,165 (2,123)
General and administrative expenses94 96 (2)267 289 (22)
Restructuring expenses— 36 (36)— 36 (36)
Other taxes27 33 (6)93 94 (1)
Total costs and expenses1,528 1,348 180 4,357 6,029 (1,672)
Income/(loss) from operations1,031 899 132 2,936 (709)3,645 
Related party interest and other financial costs2 — 2 4 4 — 
Interest expense, net of amounts capitalized197 207 (10)590 624 (34)
Other financial costs21 17 4 67 49 18 
Income/(loss) before income taxes811 675 136 2,275 (1,386)3,661 
Provision for income taxes— 1 (1)1 1 — 
Net income/(loss)811 674 137 2,274 (1,387)3,661 
Less: Net income attributable to noncontrolling interests9 9 — 27 24 3 
Net income/(loss) attributable to MPLX LP802 665 137 2,247 (1,411)3,658 
Adjusted EBITDA attributable to MPLX LP(2)
1,389 1,335 54 4,115 3,856 259 
DCF attributable to GP and LP unitholders(2)
$1,143 $1,032 $111 $3,468 $3,075 $393 
(1)    The nine months ended September 30, 2021 and September 30, 2020 include $6 million and $1,264 million of impairment expense related to equity method investments, respectively.
(2)    Non-GAAP measure. See reconciliation below to the most directly comparable GAAP measures.

36
 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 amortization164
 151
 13
 515
 438
 77
Provision (benefit) for income taxes1
 —
 1
 3
 (12) 15
Amortization of deferred financing costs13
 11
 2
 38
 34
 4
Non-cash equity-based compensation4
 3
 1
 10
 9
 1
Impairment expense—
 —
 —
 —
 130
 (130)
Net interest and other financial costs80
 53
 27
 220
 162
 58
(Income) loss from equity method investments(23) (6) (17) (29) 72
 (101)
Distributions from unconsolidated subsidiaries70
 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 distributions8
 —
 8
 8
 —
 8
Unrealized derivative losses (gains)(1)
17
 2
 15
 (2) 23
 (25)
Acquisition costs2
 —
 2
 6
 (1) 7
Adjusted EBITDA540
 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 LP538
 375
 163
 1,435
 1,028
 407
Deferred revenue impacts8
 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)
DCF442
 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




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 Three Months Ended September 30,Nine Months Ended September 30,
(In millions)20212020Variance20212020Variance
Reconciliation of Adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders from Net income:
Net income/(loss)$811 $674 $137 $2,274 $(1,387)$3,661 
Provision for income taxes— 1 (1)1 1 — 
Amortization of deferred financing costs18 15 3 53 44 9 
Loss/(Gain) on extinguishment of debt2 (14)16 (10)(14)4 
Net interest and other financial costs200 223 (23)618 647 (29)
Income/(loss) from operations1,031 899 132 2,936 (709)3,645 
Depreciation and amortization324 346 (22)971 992 (21)
Non-cash equity-based compensation1 4 (3)6 12 (6)
Impairment expense— — — 42 2,165 (2,123)
(Income)/loss from equity method investments(92)(83)(9)(228)1,012 (1,240)
Distributions/adjustments related to equity method investments129 130 (1)371 369 2 
Unrealized derivative losses(1)
2 10 (8)41 1 40 
Restructuring expenses— 36 (36)— 36 (36)
Other3 3 — 5 5 — 
Adjusted EBITDA1,398 1,345 53 4,144 3,883 261 
Adjusted EBITDA attributable to noncontrolling interests(9)(10)1 (29)(27)(2)
Adjusted EBITDA attributable to MPLX LP1,389 1,335 54 4,115 3,856 259 
Deferred revenue impacts14 29 (15)76 92 (16)
Sales-type lease payments, net of income (2)
14 — 14 68 — 68 
Net interest and other financial costs(200)(223)23 (618)(647)29 
Maintenance capital expenditures(35)(41)6 (81)(108)27 
Maintenance capital expenditures reimbursements14 11 3 31 31 — 
Equity method investment capital expenditures paid out(1)(5)4 (4)(16)12 
Restructuring expenses— (36)36 — (36)36 
Other(4)(3)(1)(9)— (9)
DCF1,191 1,067 124 3,578 3,172 406 
Preferred unit distributions(48)(35)(13)(110)(97)(13)
DCF attributable to GP and LP unitholders$1,143 $1,032 $111 $3,468 $3,075 $393 
(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)     The nine months ended September 30, 2021 includes one time impact from Refining Logistics harmonization project of $54 million.
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Nine Months Ended September 30, Nine Months Ended September 30,
(In millions)2017 2016 Variance(In millions)20212020Variance
Reconciliation of Adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders from Net cash provided by operating activities:     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
Net cash provided by operating activities$3,671 $3,336 $335 
Changes in working capital items(41) 59
 (100)Changes in working capital items(184)(154)(30)
All other, net(43) (18) (25)All other, net(11)(6)(5)
Non-cash equity-based compensation10
 9
 1
Non-cash equity-based compensation6 12 (6)
Net gain on disposal of assets1
 1
 —
Net loss on disposal of assetsNet loss on disposal of assets(4)(1)(3)
Gain on extinguishment of debtGain on extinguishment of debt(10)(14)4 
Net interest and other financial costs220
 162
 58
Net interest and other financial costs618 647 (29)
Current income taxes1
 4
 (3)Current income taxes2 2 — 
Asset retirement expenditures2
 4
 (2)
Unrealized derivative (gains) losses(1)
(2) 23
 (25)
Acquisition costs6
 (1) 7
Distributions of cash received from Joint-Interest Acquisition entities to MPC(13) —
 (13)
Unrealized derivative losses(1)
Unrealized derivative losses(1)
41 1 40 
Restructuring expensesRestructuring expenses— 36 (36)
Other adjustments to equity method investment distributions8
 —
 8
Other adjustments to equity method investment distributions10 19 (9)
OtherOther5 5 — 
Adjusted EBITDA1,487
 1,218
 269
Adjusted EBITDA4,144 3,883 261 
Adjusted EBITDA attributable to noncontrolling interests(5) (3) (2)Adjusted EBITDA attributable to noncontrolling interests(29)(27)(2)
Adjusted EBITDA attributable to Predecessor(2)
(47) (187) 140
Adjusted EBITDA attributable to MPLX LP1,435
 1,028
 407
Adjusted EBITDA attributable to MPLX LP4,115 3,856 259 
Deferred revenue impacts25
 8
 17
Deferred revenue impacts76 92 (16)
Sales-type lease payments, net of income (2)
Sales-type lease payments, net of income (2)
68 — 68 
Net interest and other financial costs(220) (162) (58)Net interest and other financial costs(618)(647)29 
Maintenance capital expenditures(59) (58) (1)Maintenance capital expenditures(81)(108)27 
Maintenance capital expenditures reimbursementsMaintenance capital expenditures reimbursements31 31 — 
Equity method investment capital expenditures paid outEquity method investment capital expenditures paid out(4)(16)12 
Restructuring expensesRestructuring expenses— (36)36 
Other—
 (2) 2
Other(9)— (9)
Portion of DCF adjustments attributable to Predecessor(2)
2
 8
 (6)
DCF1,183
 822
 361
DCF3,578 3,172 406 
Preferred unit distributions(49) (25) (24)Preferred unit distributions(110)(97)(13)
DCF attributable to GP and LP unitholders$1,134
 $797
 $337
DCF attributable to GP and LP unitholders$3,468 $3,075 $393 

(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.
(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.
(2)The Adjusted EBITDA and DCF adjustments related to Predecessor are excluded from Adjusted EBITDA attributable to MPLX LP and DCF prior to the acquisition dates.

(2)     The nine months ended September 30, 2021 includes one time impact from Refining Logistics harmonization project of $54 million.

Three months ended September 30, 20172021 compared to three months ended September 30, 20162020


Total revenues and other income increased $142$312 million in the third quarter of 20172021 compared to the same period of 2016.2020. This variance was primarily due mainlyto higher prices in the G&P segment of approximately $300 million. There were also increased pipeline volumes of $57 million, increased equity method income due to volume increases, and increased revenue from our terminal, storage and refining logistics operations due to increased pricing on product sales of approximately $54 million,throughput, storage capacity and annual rate escalations. These increases were partially offset by an increased unrealized derivative lossdecreases in marine transportation fees of $10$27 million, higher revenues from volume growth of $49$15 million in the Marcellus and the Southwest areas,higher crude and product transportation volumes of $14 million, a $19 million increase from the acquisitionWholesale Exchange, and decreased pipeline tariff rates and fees of the Ozark pipeline, a $17 million increase from our equity method investments, mainly due to the acquisition of an equity interest in the Bakken Pipeline system, the addition of the Sherwood Midstream joint venture during 2017 and increased dry gas gathering volumes for certain of our equity method investments.$12 million.


Cost of revenues increased $7decreased $25 million in the third quarter of 20172021 compared to the same period of 2016.2020. This variance was primarily due to the acquisitionWholesale Exchange, as well as to lower repairs, maintenance, operating costs and project-related spend as a result of the Ozark pipeline.cost reduction initiatives.


48




Purchased product costs increased $53$269 million in the third quarter of 20172021 compared to the same period of 2016.2020. This variance was primarily due to higher NGL and gas prices of $36$241 million and increased volumes of $10 million, primarily in the Southwest area, as well as an increaseand Southern Appalachia and other product increases, partially offset by a decrease of $8 million related to unrealized derivative losses in the unrealized losscurrent year.

38

Table of $6 million,Contents
Rental cost of which a majority issales and rental cost of sales - related to our Natural Gas Embedded Derivative.

Depreciation and amortization expense increased $13parties decreased $8 million in the third quarter of 20172021 compared to the same period of 2016.2020. This variance was primarily due to additionsmodifications to in-service property, plant and equipmentlease contracts which resulted in costs now being recorded to purchases - related parties, as wellnoted below, as approximately $2 millionopposed to rental cost of accelerated depreciationsales - related to adjustments of certain assets’ useful life.parties.


Net interest expense and other financial costsPurchases - related parties increased $28$10 million in the third quarter of 20172021 compared to the same period of 2016. The increase is mainly2020. This was primarily due to modifications to lease contracts which resulted in costs now being recorded to purchases - related parties as opposed to rental cost of sales - related parties, as noted above.

Depreciation and amortization decreased $22 million in the third quarter of 2021 compared to the same period of 2020. This was primarily due to the New Senior Notes issuedwrite-off of assets under construction related to idled MPC refineries during the third quarter of 2020 and the derecognition of assets reclassified as sales-type leases due to contract modifications. These decreases resulting from the prior year charges were partially offset by accelerated depreciation on assets permanently idled in February 2017.2021, as well as by property plant and equipment placed in service after the third quarter of 2020.


Restructuring expenses decreased $36 million in the third quarter of 2021 compared to the same period of 2020. This was due to cost cutting measures taken during 2020 that resulted in restructuring charges.

Nine months ended September 30, 20172021 compared to nine months ended September 30, 20162020


Total revenues and other income increased $601$1,973 million in the first nine months of 20172021 compared to the same period of 2016.2020. This varianceincrease was primarily due mainly to the inclusion of $103$1,264 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 salesimpairments recorded for three joint ventures in which we have an interest. The impairments were recorded through “Income from equity method investments.” The remaining $709 million increase is primarily due to higher prices in the G&P segment of approximately $177$717 million as well asand increased pipeline and terminal volumes of $198 million. There were also increases related to higher revenuesterminal storage fees, refining logistics fee escalations and higher fees from volume growth of $146 millioncontracts in the Marcellus and the Southwest areas, higher crude and product transportation volumesSouthern Appalachia regions. These increases were partially offset by decreases of $28 million, $45 million from the acquisition of the Ozark pipelineand a $12 million increase from our equity method investments. The nine months ended September 30, 2016 also included an impairment expense of $89$99 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.Wholesale Exchange, $80 million related to marine transportation fees, and $33 million related to lower pipeline tariffs and fees.


Cost of revenues increased $52decreased $142 million in the first nine months of 20172021 compared to the same period of 2016.2020. This variance was primarily due to $20 million from the inclusion of MPLXT, Wholesale Exchange as well as $20 million fromlower repairs, maintenance, operating costs and project-related spend as a result of cost reduction initiatives. These decreases were partially offset by higher prices in the acquisition of the Ozark pipeline and an increase in expenses related to the timing of projects.Rockies.


Purchased product costs increased $131$661 million in the first nine months of 20172021 compared to the same period of 2016.2020. This variance was primarily due to higher NGL and gas prices and purchase volumesof $544 million in the Southwest area, offset by a $13and Southern Appalachia, an increase of $40 million related to unrealized gain on our Natural Gas Embedded Derivative.derivative losses in the current year compared to the prior year, and other product cost increases.


Purchases-relatedRental cost of sales and rental cost of sales - related parties increased $44decreased $37 million in the first nine months of 20172021 compared to the same period of 2016. The increase2020. This was primarily due to the inclusionmodifications to lease contracts which resulted in costs now being recorded to purchases - related parties, as noted below, as opposed to rental cost of approximately $23 millionsales - related party purchases of MPLXT as well as general increases in employee costs due to headcount.parties.


Depreciation and amortization expensePurchases - related parties increased $77$49 million in the first nine months of 20172021 compared to the same period of 2016.2020. This variance was primarily due to accelerated depreciation expensemodifications to lease contracts which resulted in costs now being recorded to purchases - related parties as opposed to rental cost 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 duesales - related parties, as noted above. In addition, higher employee related costs also contributed to the inclusion of MPLXT, as well additions to in-service property, plantincrease.

Depreciation and equipment during the fourth quarter of 2016 and the first nine months of 2017.

Impairment expenseamortization decreased $130$21 million in the first nine months of 20172021 compared to the same period of 2016.2020. This variance was primarily due to a non-cash impairmentthe write-off of assets under construction related to goodwill in two reporting unitsidled MPC refineries during 2020 and the derecognition of assets reclassified as sales-type leases due to contract modifications. These decreases were partially offset by accelerated depreciation in the G&P segment duringcurrent year related to assets permanently idled in 2021, as well as property, plant and equipment placed in service after the first six monthsthird quarter of 2016.2020.


Net interestImpairment expense and other financial costs increased $62decreased $2,123 million in the first nine months of 20172021 compared to the same period of 2016. The increase is primarily due to2020. During the New Senior Notes issued in February 2017.


49



SEGMENT RESULTS

We classify our business in the following reportable segments: L&Sfirst quarter of 2020 we recorded impairment expense for goodwill, intangible assets 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 of $1,814 million, $177 million and $174 million, respectively. The impairment of goodwill related to our Eastern G&P reporting unit while the intangible asset and property, plant and equipment impairments related to certain assets in our Southwest region. The impairments were primarily driven by the slowing of drilling activity, which reduced production growth forecasts from our producer customers. This decrease was partially offset by an impairment recorded during the second quarter of 2021 related to our continued emphasis on portfolio optimization with the anticipated divestiture of several non-core assets and depreciationthe closure of other non-core assets.
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General and amortization are not allocatedadministrative expenses decreased $22 million in the first nine months of 2021 compared to the reportable segments. Management does not consider these items allocablesame period of 2020. This was primarily due to or controllable by any individual segment and, therefore, excludes these items when evaluating segment performance. Segment results are also adjusted to excludedecreased employee costs from MPC as a result of cost reduction initiatives.

Restructuring expenses decreased $36 million in the portionfirst nine months of income from operations attributable2021 compared to the noncontrolling interests relatedsame period of 2020. This was due to partially owned entitiescost cutting measures taken during 2020 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.resulted in restructuring charges.



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SEGMENT RESULTS

The tables below present information about segment operating incomeSegment Adjusted EBITDA 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 income11
 12
 (1) 35
 42
 (7)
Total segment revenues and other income389
 351
 38
 1,130
 943
 187
Costs and expenses:           
Segment cost of revenues176
 153
 23
 500
 392
 108
Segment operating income before portion attributable to noncontrolling interests and Predecessor213
 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.


50



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, 201811
June 30, 201811
September 30, 201810
December 31, 20184
March 31, 20193
June 30, 20194
September 30, 20194
Total$55

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.

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 income1
 1
 —
 2
 1
 1
Total segment revenues and other income670
 568
 102
 1,871
 1,596
 275
Costs and expenses:           
Segment cost of revenues276
 239
 37
 781
 662
 119
Segment operating income before portion attributable to noncontrolling interests394
 329
 65
 1,090
 934
 156
Segment portion attributable to noncontrolling interests45
 36
 9
 119
 113
 6
Segment operating income attributable to MPLX LP$349
 $293
 $56
 $971
 $821
 $150


51



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, as well as additional fractionation capacity 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 interestssegments for the three and nine months ended September 30, 20172021 and 2016. Adjustments related2020.

L&S Segment

Third Quarter L&S Segment Financial Highlights (in millions)
mplx-20210930_g2.jpgmplx-20210930_g3.jpgmplx-20210930_g4.jpg
Three Months Ended September 30,Nine Months Ended September 30,
(In millions)20212020Variance20212020Variance
Service revenue$983 $989 $(6)$2,928 $2,924 $4 
Rental income172 249 (77)597 737 (140)
Product related revenue3 9 (6)11 49 (38)
Sales-type lease revenue132 38 94 305 114 191 
Income from equity method investments41 36 5 112 126 (14)
Other income15 13 2 46 40 6 
Total segment revenues and other income1,346 1,334 12 3,999 3,990 9 
Cost of revenues164 173 (9)451 601 (150)
Purchases - related parties232 219 13 675 629 46 
Depreciation and amortization131 164 (33)414 440 (26)
General and administrative expenses48 55 (7)140 159 (19)
Restructuring expenses— 27 (27)— 27 (27)
Other taxes19 19 — 57 53 4 
Segment income from operations752 677 75 2,262 2,081 181 
Depreciation and amortization131 164 (33)414 440 (26)
Income from equity method investments(41)(36)(5)(112)(126)14 
Distributions/adjustments related to equity method investments58 55 3 174 169 5 
Restructuring expenses— 27 (27)— 27 (27)
Non-cash equity-based compensation1 3 (2)4 8 (4)
Other3 3 — 5 5 — 
Segment adjusted EBITDA(1)
904 893 11 2,747 2,604 143 
Capital expenditures85 118 (33)220 410 (190)
Investments in unconsolidated affiliates$9 $4 $5 $31 $132 $(101)
(1)     See the Reconciliation of Adjusted EBITDA attributable to unconsolidated affiliates relateMPLX LP and DCF attributable to our Partnership-operated non-wholly-owned entities that we consolidateGP and LP unitholders from Net income table for segment purposes. Income (loss) from equity method investmentsrelatesthe reconciliation 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.the most directly comparable GAAP measure.

41
 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 LP349
 293
 56
 971
 821
 150
Segment operating income attributable to MPLX LP562
 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 investments23
 6
 17
 29
 (72) 101
Other income - related parties13
 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



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 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 investments23
 6
 17
 29
 (72) 101
Other income - related parties13
 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)

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 contractsThree months ended September 30, 2021 compared 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 calculated2020

Service revenue decreased $6 million in the following approximate percentagesthird quarter of our net operating margin2021 compared to the same period of 2020. This was primarily due to a $27 million decrease in marine transportation fees, a decrease of $13 million from the following typesreclassification of contracts:lease income between service revenue, rental income and sales-type lease revenue due to modifications to lease contracts, as well as decreases due the Wholesale Exchange, terminal throughputs and lower pipeline tariffs. The decreases were mostly offset by increased pipeline volumes of $57 million.

 Fee-Based 
Percent-of-Proceeds(1)
 
Keep-Whole(2)
L&S100% —% —%
G&P(3)
86% 12% 2%
Total92% 7% 1%
Rental income decreased $77 million in the third quarter of 2021 compared to the same period of 2020. This was primarily due to the reclassification of lease income between service revenue, rental income and sales-type lease revenue due to modifications to lease contracts. The net decreases due to reclassifications were offset by increased terminal storage fees.



Product related revenue decreased $6 million in the third quarter of 2021 compared to the same period of 2020. This was primarily due to the Wholesale Exchange.
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Sales-type lease revenue - related parties increased $94 million in the third quarter of 2021 compared to the same period of 2020. This was primarily due to the reclassification of lease income between service revenue, rental income and sales-type lease revenue due to modifications to lease contracts.


ForCost of revenues decreased $9 million in the third quarter of 2021 compared to the same period of 2020. This was primarily due to the Wholesale Exchange and lower project-related spend as a result of cost reduction initiatives. In addition, modifications to lease contracts resulted in costs now being recorded to purchases - related parties, as noted below, as opposed to rental cost of sales - related parties, which is included in the decrease being explained here.

Purchases - related parties increased $13 million in the third quarter of 2021 compared to the same period of 2020. This was primarily due to modifications to lease contracts which resulted in costs now being recorded to purchases - related parties as opposed to rental cost of sales - related parties, which is included in cost of revenues as noted above.

Depreciation and amortization decreased $33 million in the third quarter of 2021 compared to the same period of 2020. This was primarily due to the write-off of assets under construction in the third quarter of 2020 related to idled MPC refineries. The decrease in the current quarter also reflects the derecognition of fixed assets due to the modification of certain lease contracts in 2021.

General and administrative expenses decreased $7 million in the third quarter of 2021 compared to the same period of 2020. This was primarily due to decreased employee costs from MPC as a result of cost reduction initiatives.

Restructuring expenses decreased $27 million in the third quarter of 2021 compared to the same period of 2020. This was due to cost cutting measures during 2020 that resulted in restructuring charges.

Nine months ended September 30, 2021 compared to nine months ended September 30, 2017, we calculated2020

Service revenue increased $4 million in the following approximate percentagesfirst nine months of our2021 compared to the same period of 2020. This was primarily due to increased revenue from pipeline and terminal throughput of $198 million, partially offset by an $80 million decrease in marine transportation fees, a $56 million decrease due to the Wholesale Exchange, a $33 million decrease from lower pipeline tariffs and other fees, and a decrease of $25 million due to the reclassification of lease income between service revenue, rental income and sales-type lease revenue due to modifications to lease contracts.

Rental income decreased $140 million in the first nine months of 2021 compared to the same period of 2020. This was primarily due to the reclassification of lease income between service revenue, rental income and sales-type lease revenue due to modifications to lease contracts. The net operating margin fromdecreases due to reclassifications were offset by increased terminal storage fees as well as additional refining logistics fees associated with annual fee escalations.

Product related revenue decreased $38 million in the following typesfirst nine months of contracts:2021 compared to the same period of 2020. This was primarily due to the Wholesale Exchange.

Sales-type lease revenue - related parties increased $191 million in the first nine months of 2021 compared to the same period of 2020. This was primarily due to the reclassification of lease income between service revenue, rental income and sales-type lease revenue due to modifications to lease contracts.

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 Fee-Based 
Percent-of-Proceeds(1)
 
Keep-Whole(2)
L&S100% —% —%
G&P(3)
87% 11% 2%
Total93% 6% 1%
Income from equity method investments decreased $14 million in the first nine months of 2021 compared to the same period of 2020 primarily due to lower overall throughput volumes on our equity method investments.

(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).


Cost of revenues decreased $150 million in the first nine months of 2021 compared to the same period of 2020. This was primarily due to the Wholesale Exchange, lower project-related spend and other operating expenses as a result of cost reduction initiatives. In addition, modifications to lease contracts resulted in costs now being recorded to purchases - related parties, as noted below, as opposed to rental cost of sales - related parties, which is included in the decrease being explained here.

Purchases - related parties increased $46 million in the first nine months of 2021 compared to the same period of 2020. This was primarily due to modifications to lease contracts which resulted in costs now being recorded to purchases - related parties as opposed to rental cost of sales - related parties, which is included in cost of revenues as noted above. In addition, higher employee related costs also contributed to the increase.

Depreciation and amortization decreased $26 million in the first nine months of 2021 compared to the same period of 2020. This was primarily due to the write-off of assets under construction in 2020 related to idled MPC refineries, offset by accelerated depreciation in the current year related to assets at an indefinitely idled MPC refinery, as well as property, plant and equipment placed in service since the third quarter of 2020. The followingdecrease in the 2021 period also reflects the derecognition of fixed assets due to the modification of certain lease contracts in the current year.

General and administrative expenses decreased $19 million in the first nine months of 2021 compared to the same period of 2020. This was primarily due to decreased employee costs from MPC as a result of cost reduction initiatives.

Restructuring expenses decreased $27 million in the first nine months of 2021 compared to the same period of 2020. This was due to cost cutting measures during 2020 that resulted in restructuring charges.
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G&P Segment
Third Quarter G&P Segment Financial Highlights (in millions)
mplx-20210930_g5.jpgmplx-20210930_g6.jpgmplx-20210930_g7.jpg

Three Months Ended September 30,Nine Months Ended September 30,
(In millions)20212020Variance20212020Variance
Service revenue$519 $524 $(5)$1,520 $1,549 $(29)
Rental income80 94 (14)263 271 (8)
Product related revenue553 234 319 1,357 607 750 
Income/(loss) from equity method investments(1)
51 47 4 116 (1,138)1,254 
Other income10 14 (4)38 41 (3)
Total segment revenues and other income1,213 913 300 3,294 1,330 1,964 
Cost of revenues191 215 (24)596 625 (29)
Purchased product costs421 152 269 1,035 374 661 
Purchases - related parties75 78 (3)227 224 3 
Depreciation and amortization193 182 11 557 552 5 
Impairment expense— — — 42 2,165 (2,123)
General and administrative expenses46 41 5 127 130 (3)
Restructuring expenses— 9 (9)— 9 (9)
Other taxes8 14 (6)36 41 (5)
Segment income/(loss) from operations279 222 57 674 (2,790)3,464 
Depreciation and amortization193 182 11 557 552 5 
Impairment expense— — — 42 2,165 (2,123)
(Income)/loss from equity method investments(51)(47)(4)(116)1,138 (1,254)
Distributions/adjustments related to equity method investments71 75 (4)197 200 (3)
Restructuring expenses— 9 (9)— 9 (9)
Unrealized derivative losses(2)
2 10 (8)41 1 40 
Non-cash equity-based compensation— 1 (1)2 4 (2)
Adjusted EBITDA attributable to noncontrolling interests(9)(10)1 (29)(27)(2)
Segment Adjusted EBITDA(3)
485 442 43 1,368 1,252 116 
Capital expenditures69 131 (62)135 375 (240)
Investments in unconsolidated affiliates$23 $18 $5 $85 $112 $(27)
(1)     The nine months ended September 30, 2021 and September 30, 2020 include $6 million and $1,264 million of impairment expense, respectively.
(2)    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.
(3)     See the Reconciliation of Adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders from Net income table presents afor the reconciliation of net operating margin to income from operations, the most directly comparable GAAP financial measure.
44
 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 costs11
 4
 5
 16
Other(1) —
 (5) (5)
Net operating margin887
 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)
Other2
 1
 6
 4
Unrealized derivative (losses) gains(1)
(17) (2) 2
 (23)
Income (loss) from equity method investments23
 6
 29
 (72)
Other income2
 2
 5
 5
Other income - related parties22
 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)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.
(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.


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Three months ended September 30, 2021 compared to three months ended September 30, 2020

Service revenue decreased $5 million in the third quarter of 2021 compared to the same period of 2020. This was primarily due to lower fees from lower volumes in the Rockies, Marcellus and Southwest of $19 million, which includes the impact related to the Javelina divestiture, partially offset by an increase in fees due to a contract modification in the Marcellus.

Rental income decreased $14 million in the third quarter of 2021 compared to the same period of 2020. This was primarily due to a contract modification in the Marcellus resulting in the reclassification of the related income from rental income to service revenue.

Product related revenue increased $319 million in the third quarter of 2021 compared to the same period of 2020. This was primarily due to higher prices in all of the regions of approximately $300 million and other product related sales increases. This was partially offset by a decrease in volumes of $21 million, primarily due to the Javelina divestiture in the Southwest.

Cost of revenues decreased $24 million in the third quarter of 2021 compared to the same period of 2020. This decrease is attributable to lower repairs, maintenance and operating costs in the Marcellus, Southwest and Rockies as a result of the Javelina divestiture and cost reduction initiatives.

Purchased product costs increased $269 million in the third quarter of 2021 compared to the same period of 2020. This was primarily due to higher prices of $241 million in the Southwest and Southern Appalachia and other product increases, partially offset by a decrease of $8 million related to unrealized derivative losses in the current year.

Depreciation and amortization increased $11 million in the third quarter of 2021 compared to the same period of 2020. The increase was primarily due to property, plant and equipment placed in service after the third quarter of 2020 and accelerated depreciation on idled assets, partially offset by lower depreciation as a result of divestitures.

Restructuring expenses decreased $9 million in the third quarter of 2021 compared to the same period of 2020. This was due to cost cutting measures during 2020 that resulted in restructuring charges.
Nine months ended September 30, 2021 compared to nine months ended September 30, 2020

Service revenue decreased $29 million in the first nine months of 2021 compared to the same period of 2020. This was primarily due to lower fees from lower volumes in the Southwest and Rockies of $43 million, which includes impacts related to severe weather and Javelina divestiture in the Southwest, partially offset by an increase in fees due to a contract modification in the Marcellus.

Rental income decreased $8 million in the first nine months of 2021 compared to the same period of 2020. This was primarily due to a contract modification in the Marcellus resulting in the reclassification of lease income between rental income to service revenue, partially offset by higher fees related to contracts in the Marcellus and Southern Appalachia.

Product related revenue increased $750 million in the first nine months of 2021 compared to the same period of 2020. This was primarily due to higher prices in all of the regions of approximately $717 million and other product related sales increases, partially offset by the impact related to the Javelina divestiture, impacts related to severe weather in the Southwest and a decrease in volumes in the Rockies.

Income from equity method investments increased $1,254 million in the first nine months of 2021 compared to the same period of 2020. This increase was driven by impairments recorded in the first quarter of 2020 of $1,264 million. Impairments were recognized related to our ownership in MarkWest Utica EMG, our indirect ownership in Ohio Gathering Company, L.L.C. through our investment in MarkWest Utica EMG and our ownership in Uintah Basin Field Services, L.L.C. Also contributing to the increase was higher volumes associated with our Sherwood Midstream LLC and Ohio Condensate Company joint ventures. These increases were partially offset by lower volumes at our joint ventures in the Utica and Southwest regions along with an asset impairment recognized within our Three Rivers Gathering LLC joint venture in the current period.

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Cost of revenues decreased $29 million in the first nine months of 2021 compared to the same period of 2020.This decrease is attributable to lower repairs, maintenance and operating costs in the Marcellus and Southwest as a result of the Javelina divestiture and cost reduction initiatives, partially offset by higher prices in the Rockies.

Purchased product costs increased $661 million in the first nine months of 2021 compared to the same period of 2020. This was primarily due to higher prices of $544 million in the Southwest and Southern Appalachia, an increase of $40 million related to unrealized derivative losses and other product cost increases.

Depreciation and amortization increased $5 million in the first nine months of 2021 compared to the same period of 2020 primarily due to property, plant and equipment placed in service after the third quarter of 2020 and accelerated depreciation on idled assets, partially offset by the impairment of intangible assets, property, plant and equipment during the first quarter of 2020 and lower depreciation as a result of divestitures.

Impairment expense decreased $2,123 million in the first nine months of 2021 compared to the same period of 2020. During the first quarter of 2020 we recorded impairment expense for goodwill, intangible assets and property, plant and equipment of $1,814 million, $177 million and $174 million, respectively. The impairment of goodwill related to our Eastern G&P reporting unit while the intangible asset and property, plant and equipment impairments relate to certain assets in our Southwest region. The impairments were primarily driven by the slowing of drilling activity, which reduced production growth forecasts from our producer customers. This decrease was partially offset by an impairment recorded during the second quarter of 2021 related to our continued emphasis on portfolio optimization with the anticipated divestiture of several non-core assets and the closure of other non-core assets.

Restructuring expenses decreased $9 million in the first nine months of 2021 compared to the same period of 2020. This was due to cost cutting measures during 2020 that resulted in restructuring charges.

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. ManyAny 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.


OurIn our G&P segment, can be affected bywe experience minimal impacts from seasonal fluctuations inwhich impact 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 andincluding variations in weather patterns from year to year. However, weWe are able to manage the seasonality impactimpacts through the execution of our marketing strategy. We have access to up to 50 million gallons of propanestrategy and via our 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.capabilities. Overall, our exposure to the seasonalseasonality fluctuations in the commodity markets is declining due to our growth in our fee-based business.



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OPERATING DATA

 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 2017 2016 2017 2016
L&S       
Pipeline throughput (mbpd)(1)
       
Crude oil pipelines2,046
 1,775
 1,901
 1,665
Product pipelines1,131
 992
 1,051
 989
Total pipelines3,177
 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 pipelines0.75
 0.69
 0.74
 0.67
Total pipelines0.62
 0.60
 0.63
 0.61
        
Terminal throughput (mbpd)1,496
 1,517
 1,470
 1,510
        
Marine Assets (number in operation)(3)
       
Barges232
 217
 232
 217
Towboats18
 18
 18
 18
        
G&P       
Gathering Throughput (MMcf/d)       
Marcellus Operations1,005
 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 throughput3,729
 3,306
 3,415
 3,313
        
Natural Gas Processed (MMcf/d)       
Marcellus Operations3,986
 3,273
 3,778
 3,166
Utica Operations(4)
1,000
 1,050
 982
 1,068
Southwest Operations1,331
 1,339
 1,310
 1,209
Southern Appalachian Operations264
 244
 266
 248
Total natural gas processed6,581
 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 Operations18
 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


mplx-20210930_g8.jpg
(1)Pipeline throughput and tariff rates as of September 30, 2016 have been retrospectively adjusted to reflect the acquisition of HST.

Three Months Ended 
September 30,		Nine Months Ended 
September 30,
2021202020212020
L&S
Pipeline throughput (mbpd)
Crude oil pipelines3,440 3,077 3,399 3,007 
Product pipelines2,061 1,613 2,008 1,701 
Total pipelines5,501 4,690 5,407 4,708 
Average tariff rates ($ per barrel)(1)
Crude oil pipelines$0.97 $0.96 $0.96 $0.96 
Product pipelines0.79 0.85 0.78 0.82 
Total pipelines$0.90 $0.93 $0.89 $0.91 
Terminal throughput (mbpd)3,046 2,701 2,884 2,696 
Marine Assets (number in operation)(2)
Barges299 301 299 301 
Towboats23 23 23 23 
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(2)Average tariff rates calculated using pipeline transportation revenues divided by pipeline throughput barrels.
(3)Represents total at end of period.
(4)Includes unconsolidated equity method investments that are shown consolidated for segment purposes only.
(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 portion utilized of the jointly owned Hopedale Fractionation Complex. The Utica Operations includes Utica’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 20 mbpd of capacity in the Hopedale 3 fractionator.
(7)Includes NGLs fractionated for the Marcellus Operations and Utica Operations.
(8)Purity ethane makes up approximately 164 mbpd and 160 mbpd of total fractionated products for the three and nine months ended September 30, 2017, respectively, and approximately 137 mbpd and 125 mbpd of total fractionated products for the three and nine months ended September 30, 2016, respectively.
(9)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.

mplx-20210930_g9.jpgmplx-20210930_g10.jpgmplx-20210930_g11.jpg

Three Months Ended 
September 30, 2021		Three Months Ended 
September 30, 2020
MPLX LP(3)
MPLX LP Operated(4)
MPLX LP(3)
MPLX LP Operated(4)
G&P
Gathering Throughput (MMcf/d)
Marcellus Operations1,373 1,373 1,312 1,312 
Utica Operations— 1,798 — 1,816 
Southwest Operations1,339 1,516 1,413 1,479 
Bakken Operations147 147 130 130 
Rockies Operations439 585 481 659 
Total gathering throughput3,298 5,419 3,336 5,396 
Natural Gas Processed (MMcf/d)
Marcellus Operations4,099 5,638 4,222 5,706 
Utica Operations— 464 — 530 
Southwest Operations(6)
1,312 1,480 1,377 1,439 
Southern Appalachian Operations236 236 227 227 
Bakken Operations146 146 129 129 
Rockies Operations419 419 481 481 
Total natural gas processed6,212 8,383 6,436 8,512 
C2 + NGLs Fractionated (mbpd)
Marcellus Operations(5)
487 487 477 477 
Utica Operations(5)
— 25 — 30 
Southwest Operations(6)
— — 21 21 
Southern Appalachian Operations(7)
12 12 11 11 
Bakken Operations25 25 25 25 
Rockies Operations4 4 3 3 
Total C2 + NGLs fractionated(8)
528 553 537 567 

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Nine Months Ended 
September 30, 2021		Nine Months Ended 
September 30, 2020
MPLX LP(3)
MPLX LP Operated(4)
MPLX LP(3)
MPLX LP Operated(4)
G&P
Gathering Throughput (MMcf/d)
Marcellus Operations1,324 1,324 1,372 1,372 
Utica Operations— 1,633 — 1,840 
Southwest Operations1,356 1,487 1,445 1,491 
Bakken Operations149 149 137 137 
Rockies Operations450 602 523 706 
Total gathering throughput3,279 5,195 3,477 5,546 
Natural Gas Processed (MMcf/d)
Marcellus Operations4,167 5,640 4,177 5,582 
Utica Operations— 492 — 587 
Southwest Operations(6)
1,311 1,436 1,479 1,543 
Southern Appalachian Operations229 229 231 231 
Bakken Operations148 148 137 137 
Rockies Operations430 430 512 512 
Total natural gas processed6,285 8,375 6,536 8,592 
C2 + NGLs Fractionated (mbpd)
Marcellus Operations(5)
484 484 466 466 
Utica Operations(5)
— 26 — 32 
Southwest Operations(6)
3 3 16 16 
Southern Appalachian Operations(7)
12 12 12 12 
Bakken Operations23 23 25 25 
Rockies Operations4 4 4 4 
Total C2 + NGLs fractionated(8)
526 552 523 555 

Three Months Ended 
September 30,		Nine Months Ended 
September 30,
2021202020212020
Pricing Information
Natural Gas NYMEX HH ($ per MMBtu)$4.31 $2.13 $3.34 $1.92 
C2 + NGL Pricing ($ per gallon)(9)
$0.96 $0.45 $0.81 $0.40 
(1)     Average tariff rates calculated using pipeline transportation revenues divided by pipeline throughput barrels.
(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)     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.
(5)     Entities within the Marcellus and Utica Operations jointly own the Hopedale fractionation complex. Hopedale throughput is included in the Marcellus and Utica Operations and represent each region’s utilization of the complex.
(6)    The Southwest Operations for the nine months ended September 30, 2021 include the Javelina complex, which was sold on February 12, 2021. The processing and fractionated volumes calculated for the number of days MPLX owned these assets during 2021 were 96 MMcf/d and 17 mbpd, respectively.
(7)     Includes NGLs fractionated for the Marcellus Operations and Utica Operations.
(8)     Purity ethane makes up approximately 199 mbpd and 193 mbpd of total MPLX Operated, fractionated products for the three months ended September 30, 2021 and 2020, respectively, and approximately 196 mbpd and 192 mbpd of total fractionated products for the nine months ended September 30, 2021 and 2020, respectively. Purity ethane makes up approximately 194 mbpd and 188 mbpd of total MPLX LP consolidated, fractionated products for the three months ended September 30, 2021 and 2020, respectively, and approximately 191 mbpd and 186 mbpd of total fractionated products for the nine months ended September 30, 2021 and 2020, respectively.
(9)    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.
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LIQUIDITY AND CAPITAL RESOURCES


Cash Flows


Our cash and cash equivalents balance was $3were $39 million at September 30, 2017 compared to $2342021 and $15 million at December 31, 2016.2020. 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,
(In millions)20212020
Net cash provided by (used in):
Operating activities$3,671 $3,336 
Investing activities(377)(1,060)
Financing activities(3,270)(2,263)
Total$24 $13 
 Nine Months Ended September 30,
(In millions)2017 2016
Net cash provided by (used in):   
Operating activities$1,338
 $975
Investing activities(1,837) (892)
Financing activities268
 82
Total$(231) $165


Net cash provided by operating activities increased $363$335 million in the first nine months of 20172021 compared to the first nine months of 2016, the majority of which is related2020, primarily due to an increase in net income 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 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.for non-cash items.


Net cash used in investing activities increased $945decreased $683 million in the first nine months of 20172021 compared to the first nine months of 2016,2020, primarily due to the acquisition of an equity interest in the Bakken Pipeline system for $513 million, 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 anlower capital spending, which reflects our continued focus on capital discipline, and decreased contributions to 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$3,270 million sourceuse of cash in the first nine months of 20172021 compared to a $82$2,263 million sourceuse of cash in the first nine months of 2016.2020. The source of cash in the first nine months of 2017 was primarily due to $2.2 billion of net proceeds from the New Senior Notes, $420 million of proceeds under the bank revolving credit facility, $128 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 billionprimary reason for the acquisition of HST, WHC, MPLXT and the Joint-

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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 outstandingthe use of cash was due to the return of capital to unitholders through the unit repurchase program as well as a 10 percent increasenet repayments on long-term debt in the distribution per limited partner unit.current year compared to net borrowings on long-term debt in the prior year.


Free Cash Flow

The following table provides a reconciliation of FCF and excess/deficit cash flow from net cash provided by operating activities for the three and nine months ended September 30, 2021 and September 30, 2020.

Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2021202020212020
Net cash provided by operating activities$1,182 $1,222 $3,671 $3,336 
Adjustments to reconcile net cash provided by operating activities to free cash flow
Net cash used in investing activities(132)(283)(377)(1,060)
Contributions from MPC14 14 31 34 
Distributions to noncontrolling interests(9)(9)(29)(26)
Free cash flow1,055 944 3,296 2,284 
Distributions to common and preferred unitholders(745)(757)(2,228)(2,264)
Excess cash flow$310 $187 $1,068 $20 

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Debt and Liquidity Overview


On September 3, 2021 MPLX redeemed all of the $1.0 billion aggregate principal amount of floating rate senior notes due September 2022 at 100 percent of the principal amount.

On January 15, 2021, MPLX redeemed $750 million outstanding aggregate principal amount of 5.250 percent senior notes due January 2025, at 102.625 percent of the principal amount.

Our outstanding borrowings at September 30, 20172021 and December 31, 2016 consisted2020 consist of the following:
(In millions)September 30, 2021December 31, 2020
MPLX LP:
Bank revolving credit facility$— $175 
Floating rate senior notes— 1,000 
Fixed rate senior notes18,532 19,240 
Consolidated subsidiaries:
MarkWest23 23 
Andeavor Logistics LP45 87 
Financing lease obligations9 11 
Total18,609 20,536 
Unamortized debt issuance costs(105)(116)
Unamortized discount/premium(250)(281)
Amounts due within one year(1)(764)
Total long-term debt due after one year$18,253 $19,375 
(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 2023710
 710
4.500% senior notes due July 2023989
 989
4.875% senior notes due December 20241,149
 1,149
4.000% senior notes due February 2025500
 500
4.875% senior notes due June 20251,189
 1,189
4.125% senior notes due March 20271,250
 —
5.200% senior notes due March 20471,000
 —
Consolidated subsidiaries:   
MarkWest - 4.500% - 5.500%, due 2023-202563
 63
MPL - capital lease obligations due 20207
 8
Total7,277
 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.

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 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) 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. As of September 30, 2017, we were in compliance with this financial covenant with a ratio of Consolidated Total Debt to Consolidated EBITDA of 3.4 to 1.0, as well as other covenants contained in the MPLX Credit Agreement 2022. As disclosed in Note 2 of the Notes to Consolidated Financial Statements, we expect the adoption of the lease accounting standards update to result 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.


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Our intention is to maintain an investment gradeinvestment-grade credit profile. As of September 30, 2017,2021, the credit ratings on our senior unsecured debt were at or above investment grade level as follows:
Rating AgencyRating
Moody’sBaa3Baa2 (stable outlook)
Standard & Poor’sBBB-BBB (negative outlook)
FitchBBB (stable outlook)
FitchBBB- (stable 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 doescontains certain representations and warranties, affirmative and restrictive covenants and events of default that we consider to be usual and customary for an agreement of this type. The financial covenant requires MPLX 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) for the prior four fiscal quarters of no greater than 5.0 to 1.0 (or 5.5 to 1.0 during the six-month period 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 assets and entering into transactions with affiliates. As of September 30, 2021, we were in compliance with the covenants, including the financial covenant with a ratio of Consolidated Total Debt to Consolidated EBITDA of 3.64 to 1.0.

The agreements governing our debt obligations 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 wouldcould, among other things, increase the applicable interest rates and other fees payable under the MPLX Credit Agreement 2022 and may limit our flexibilityability to obtain future financing.financing, including refinancing existing indebtedness.


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Our liquidity totaled $2.1$3.7 billion at September 30, 20172021 consisting of:
September 30, 2021
(In millions)Total CapacityOutstanding BorrowingsAvailable
Capacity
Bank revolving credit facility due 2024(1)
$3,500 $— $3,500 
MPC Loan Agreement1,500 (1,370)130 
Total liquidity$5,000 $(1,370)3,630 
Cash and cash equivalents39 
Total liquidity$3,669 
 September 30, 2017
(In millions)Total Capacity Outstanding Borrowings 
Available
Capacity
MPLX LP - bank revolving credit facility expiring 2022(1)
$2,250
 $(423) $1,827
MPC Investment - loan agreement500
 (202) 298
Total liquidity$2,750
 $(625) $2,125
Cash and cash equivalents    3
Total liquidity    $2,128
(1)     Outstanding borrowings include less than $1 million in letters of credit outstanding under this facility.

(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 and borrowings under our revolving credit agreementsthe MPC Loan Agreement, the MPLX Credit Agreement and issuances of additional debt and equity securities.access to capital markets. 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. We may also, from time to time, repurchase notes or preferred shares in the open market, in privately negotiated transactions or otherwise in such volumes, at market prices and upon such other terms as we deem appropriate. 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


Common units

The table below summarizes the changes in the number of units outstanding through September 30, 2017:2021:
(In units)
Balance at December 31, 20201,038,777,978 
Unit-based compensation awards213,727 
Units redeemed in Unit Repurchase Program(17,563,855)
Balance at September 30, 20211,021,427,850 
(In units)Common Class B General Partner Total
Balance at December 31, 2016357,193,288
 3,990,878
 7,371,105
 368,555,271
Unit-based compensation awards183,509
 —
 3,745
 187,254
Issuance of units under the ATM Program13,846,998
 —
 282,591
 14,129,589
Contribution of HST/WHC/MPLXT12,960,376
 —
 264,497
 13,224,873
Contribution of the Joint-Interest Acquisition18,511,134
 —
 377,778
 18,888,912
Class B conversion4,350,057
 (3,990,878) 7,330
 366,509
Balance at September 30, 2017407,045,362
 —
 8,307,046
 415,352,408


Distributions
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

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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 from sales under the ATM Program will be used for general partnership purposes including repayment or refinancing of debt and funding for acquisitions, working capital requirements and capital expenditures. During the nine months ended September 30, 2017, the sale of common units under the ATM Program generated net proceeds of approximately $473 million. As of September 30, 2017, $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.


We intend to pay at least thea minimum quarterly distribution to the holders of our common units of $0.2625 per unit, or $1.05 per quarter, which equatesunit on an annualized basis, to $109the extent we have sufficient cash from our operations after the establishment of cash reserves and the payment of costs and expenses, including reimbursements of expenses to our general partner. The amount of distributions paid under our policy and the decision to make any distributions is determined by our general partner, taking into consideration the terms of our partnership agreement. Such minimum distribution would equate to $268 million per quarter, or $436$1,072 million per year, based on the number of common and general partner units outstanding at September 30, 2017. 2021.

On October 25, 2017, we announced the board of directors of our general partner hadNovember 2, 2021, MPLX declared a cash distribution for the third quarter of $0.58752021, totaling $1,305 million, or $1.28 per common unit, thatconsisting of a base distribution amount of $0.705 per common unit and a special distribution amount of $0.575 per common unit (the “Special Distribution Amount”) as supported by our year-to-date cash flow. This distribution will be paid on November 14, 201719, 2021 to common unitholders of record on November 6, 2017. This represents an increase of $0.0250 per unit, or four percent, above the second quarter 2017 distribution of $0.5625 per unit and an increase of 14 percent over the third quarter 2016 distribution. This increase in the distribution is consistent with our intent to maintain an attractive distribution growth profile over an extended period of time.12, 2021. Although our Partnership Agreementpartnership 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 common unit. This rate will also be received by Series A preferred unitholders.


Series B preferred unitholders are entitled to receive a fixed distribution of $68.75 per unit, per annum, payable semi-annually in arrears on February 15 and August 15, or the first business day thereafter, up to and including February 15, 2023. After February 15, 2023, the holders of Series B preferred units are entitled to receive cumulative, quarterly distributions payable in arrears on the 15th day of February, May, August and November of each year, or the first business day thereafter, based on a floating annual rate equal to the three-month LIBOR plus 4.652 percent, in each case assuming a distribution is declared by the board of directors. Accordingly, a cash distribution payment totaling $21 million was paid to Series B unitholders on August 16, 2021.
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The allocation of total quarterly cash distributions to general and limited partners is as follows for the three and nine months ended September 30, 20172021 and 2016. Our2020. 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.
Three Months Ended September 30,Nine Months Ended September 30,
(In millions, except per unit data)2021202020212020
Distribution declared:
Limited partner units - public (1)
$476 $270 $998 $810 
Limited partner units - MPC (1)
829 445 1,719 1,348 
Total LP distribution declared1,305 715 2,717 2,158 
Series A preferred units (1)
38 20 79 61 
Series B preferred units10 10 31 31 
Total distribution declared1,353 745 2,827 2,250 
Quarterly cash distributions declared per limited partner common unit$1.2800 $0.6875 $2.6550 $2.0625 
 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 - MPC54
 44
 152
 114
Limited partner units - GP8
 —
 15
 —
General partner units - MPC7
 5
 18
 13
IDRs - MPC81
 49
 211
 135
Total GP & LP distribution declared320
 233
 877
 655
Redeemable preferred units16
 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
(1)     Includes the Special Distribution Amount.


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

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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.

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.



MPLX’s initial capital investment plan for 2021 totaled approximately $1.0 billion for capital projects and investments, excluding capitalized interest, and is currently estimated to be approximately $650 million. We continuously evaluate our capital investment plan and make changes as conditions warrant. Growth capital expenditures and investments in affiliates during the nine months ended September 30, 2021 were primarily for gas gathering and processing projects in our Marcellus and Southwest regions and the expansion of our crude gathering systems.

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Our capital expenditures are shown in the table below:
 Nine Months Ended September 30,
(In millions)20212020
Capital expenditures:
Growth capital expenditures$274 $677 
Growth capital reimbursements— (2)
Investments in unconsolidated affiliates116 244 
Return of capital(36)(112)
Capitalized interest(11)(31)
Total growth capital expenditures343 776 
Maintenance capital expenditures81 108 
Maintenance capital reimbursements(31)(31)
Capitalized interest(1)— 
Total maintenance capital expenditures49 77 
Total growth and maintenance capital expenditures392 853 
Investments in unconsolidated affiliates(1)
(116)(244)
Return of capital(1)
36 112 
Growth and maintenance capital reimbursements(2)
31 33 
Decrease in capital accruals19 197 
Capitalized interest12 31 
Additions to property, plant and equipment, net(1)
$374 $982 
 Nine Months Ended September 30,
(In millions)2017 2016
Capital expenditures:   
Maintenance$59
 $58
Expansion1,002
 889
Total capital expenditures1,061
 947
Less: Increase in capital accruals55
 —
Asset retirement expenditures2
 4
Additions to property, plant and equipment1,004
 943
Capital expenditures of unconsolidated subsidiaries(1)
306
 94
Total gross capital expenditures1,310
 1,037
Less: Joint venture partner contributions(2)
132
 45
Total capital expenditures, net1,178
 992
Less: Maintenance capital60
 58
Total growth capital$1,118
 $934

(1)Includes amounts related to unconsolidated, Partnership-operated subsidiaries.
(2)This represents estimated joint venture partners’ share of growth capital.

Our organic growth capital plan range has not been revised for the remainder of 2017. We anticipate finishing the year near below the previously reported range. This range excludes acquisition costs for the dropdowns of HST, WHC, MPLXT and the Joint-Interest Acquisition, the acquisition of the Ozark pipeline and the MarEn Bakken investment, as discussed(1)    Investments in Notes 3 and 4 of the Notes to Consolidated Financial Statements. The range also excludes non-affiliated joint venture members’ shareunconsolidated affiliates, return of capital expenditures. The G&P segmentand additions to property, plant and equipment, net are shown as separate lines within investing activities in the Consolidated Statements of Cash Flows.
(2)    Growth and maintenance capital plan includes investments thatreimbursements are expected to support producer customers and complete certain processing plants currently under construction atincluded in the Sherwood Complex. The L&S segment capital plan includes“Contributions from MPC” line within financing activities in the developmentConsolidated Statements of various crude oil 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. We continuously evaluate our capital plan and make changes as conditions warrant.Cash Flows.


Contractual Cash Obligations


As of September 30, 2017,2021, our contractual cash obligations included long-termthird-party and related party debt, capitalfinance and operating lease obligations, purchase obligations for services and to acquire property, plant and equipment, and other liabilities. During the nine months ended September 30, 2017,2021, our third-party long-term debt obligations increaseddecreased by $4.1 billion$1,925 million, primarily due to the newredemption of $750 million outstanding aggregate principal amount of 5.250 percent senior notes issued and contractsdue January 2025 discussed above, the redemption of the floating rate senior notes due September 2022, as well as net repayments on the MPLX Credit Agreement.Additionally, borrowings on the MPC Loan Agreement increased to acquire property, plant and equipment increased $317 million largely due to new and growing projects.fund the floating rate senior notes redemption. There were no other material changes to theseour contractual obligations outside the ordinary course of business since December 31, 2016.2020.


Off-Balance Sheet Arrangements


As of September 30, 2017, we have not entered into any transactions, agreements or otherOff-balance sheet arrangements comprise those arrangements that would result inmay 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.


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Forward-looking Statements

Our opinions concerningarrangements are limited to indemnities and guarantees that are described in Note 19. 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 abilitywe are not aware of any circumstances that are reasonably likely to avail ourselves incause the future of the financing options mentioned in the above forward-looking statements are basedoff-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, 2017,2021, MPC owned our non-economic general partnership interest and held a twoapproximately 63 percent GP Interestof our outstanding common units.

We provide MPC with crude oil and a 28.4 percent limited partner interest in MPLX LP.product pipeline and trucking transportation services based on regulated tariff/contracted rates, as well as storage, terminal, fuels distribution, and inland marine transportation services based on contracted rates. We

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also have agreements with MPC under which we receive fees for operating MPC’s retained pipeline assets, providing management services for the marine business, and operating certain of MPC’s equity method investments. MPC provides us with certain services related to information technology, engineering, legal, accounting, treasury, human resources and other administrative services under employee services and omnibus services agreements.

The below table shows the percentage of “Total revenues and other income” as well as “Total costs and expenses” with MPC:

Three Months Ended September 30,
20212020
Total revenues and other income (1)
48 %55 %
Total costs and expenses26 %31 %
(1) Excludes revenues attributable to volumes shipped by MPC under joint tariffs with third parties that are treated as third-partythird party revenues for accounting purposes, MPC accounted for 36 percent and 40 percent of our total revenues and other income for the third quarter of 2017 and 2016, 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.purposes.


Of our total costs and expenses, MPC accounted for 22 percent and 25 percent for the third quarter of 2017 and 2016, 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, 20162020 and Note 5 of the Notes to Consolidated Financial Statements in this report.


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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, 2017,2021, 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, 2017.2020.


CRITICAL ACCOUNTING ESTIMATES


As of September 30, 2017,2021, 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, 2017.2020.


ACCOUNTING STANDARDS NOT YET ADOPTED


As discussed in Note 2 of the Notes to Consolidated Financial Statements, certainWhile new financial accounting pronouncements will be effective for our financial statements in the future.future, there are no standards that have not yet been adopted that are expected to have a material impact on our financial statements. Accounting standards are discussed in Note 2 of the Notes to Consolidated Financial Statements.



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Item 3. Quantitative and Qualitative Disclosures about Market Risk


Market risk includesWe are exposed to market risks related to the riskvolatility of loss arising from adversecommodity 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 frominterest rates. As of September 30, 2021, we did not have any open financial or commodity price changes and,derivative instruments to a lesser extent,hedge the economic risks related to interest rate changesfluctuations or the volatility of commodity prices, respectively; however, we continually monitor the market and non-performance by our customersexposure and counterparties.may enter into these arrangements in the future.


Commodity Price Risk


The information about commodity price risk for the three and nine months ended September 30, 20172021 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, 2016.2020.


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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 contractnatural gas purchase commitment embedded in a keep-whole processing agreement with a producer customer in the Southern Appalachian region that creates a floor onexpiring 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 successiveconsecutive five-year terms through December 31, 2032. TheFor accounting purposes, the natural gas purchase of gas at prices based on the frac spreadcommitment and the option to extend the agreementsterm extending options have been identified asaggregated into a single compound embedded derivative, which is recorded at fair value.derivative. The probability of renewalthe 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’scustomer’s potential

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business strategy decision points that may exist at the time the counterpartythey 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 and the probability of the producer customer exercising its option to extend and the estimated favorability of these contracts compared to current market conditions.extend. 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, 2017,2021 and December 31, 2020, the estimated fair value of this contract was a liability of $52 million.$104 million and $63 million, respectively. We evaluate our portfolio of commodity derivative instruments on an ongoing basis and add or revise strategies in anticipation of changes in market conditions and in risk profiles.

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. As of September 30, 2017, the estimated fair value of this contract was a liability of less than $1 million.


Interest Rate Risk and Sensitivity Analysis


Sensitivity analysis of the effect of a hypothetical 100-basis-point change in interest rates on long-termthird-party outstanding debt, excluding capitalfinance 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, 2021(1)
Change in Fair Value(2)
Change in Income Before Income Taxes for the Nine Months Ended September 30, 2021(3)
Outstanding debt
Fixed-rate$20,553 $1,881 N/A
Variable-rate(4)
$— $— $9 
(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)
Long-term debt     
Fixed-rate$7,199
 $575
 N/A
Variable-rate$420
 N/A
 $2
(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, 2021.
(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.
(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 months ended September 30, 2017.

(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 months ended September 30, 2021.
(4)    MPLX redeemed the outstanding floating rate senior notes on September 3, 2021 and had no outstanding borrowings on the Revolver as of September 30, 2021.

At September 30, 2017,2021, our portfolio of long-term debt consisted of fixed-rate instruments and variable-rate instrumentsalso provides for borrowings under our term loanrevolving 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,facility, but may affect our results of operations and cash flows. As of September 30, 2017, 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)13a-15(e) and 15(d)-15(e)15d-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, 2017,2021, the end of the period covered by this report.


Changes in Internal Control Over Financial Reporting


During the quarter ended September 30, 2017,2021, 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.



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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. While it is possible that an adverse result in one or more of the lawsuits or proceedings in which we are a defendant could be material to us, based upon current information and our experience as a defendant in other matters, we believe that these lawsuits and proceedings, individually or in the aggregate, will not have a material adverse effect on our consolidated results of operations, financial position or cash flows.


AsItem 103 of Regulation S-K promulgated by the SEC requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions, unless we reasonably believe that the matter will result in no monetary sanctions, or in monetary sanctions, exclusive of interest and costs, of less than $300,000.

Except as described below, there have been no material changes to the legal matters previously reporteddisclosed in our Annual Report on Form 10-K for the year ended December 31, 2016,2020, as updated in July 2015, representatives fromour subsequent Quarterly Reports on Form 10-Q.

Dakota Access Pipeline

We hold a 9.19 percent indirect interest in a joint venture (“Dakota Access”) that owns and operates the EPADakota Access Pipeline and Energy Transfer Crude Oil Pipeline projects, collectively referred to as 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 ofBakken Pipeline system or DAPL. In 2020, the United StatesU.S. District Court for the Western District of Pennsylvania. As part of this initiative,Columbia (the “D.D.C.”) ordered the U.S. Attorney’s OfficeArmy Corps of Engineers (“Army Corps”), which granted permits and an easement for the WesternBakken Pipeline system, to prepare an environmental impact statement (“EIS”) relating to an easement under Lake Oahe in North Dakota. The D.D.C. later ordered vacatur of the easement during the pendency of the EIS and further ordered a shut down of the pipeline by August 5, 2020. On August 5, 2020, the U.S. Court of Appeals for the District of Pennsylvania proceeded with an investigationColumbia (the “Court of MarkWest Liberty Midstream’s launcher/receiver,Appeals”) stayed the D.D.C.’s injunction that required the pipeline be shutdown and compressor station operations. In responseemptied of oil by August 5, 2020. On January 26, 2021, the Court of Appeals upheld the D.D.C.’s order vacating the easement while the Army Corps prepares the EIS. The Court of Appeals reversed the D.D.C.’s order to the investigation, MarkWest initiated independent studies which demonstratedextent it directed that there was no riskthe pipeline be shutdown and emptied of oil. In May 2021, the D.D.C. denied a renewed request for an injunction to worker safetyshut down the pipeline while the EIS is being prepared. In June 2021, the D.D.C. issued an order dismissing without prejudice the tribes’ claims against the Dakota Access Pipeline. The judge noted that the plaintiffs may move to reopen the case in the event of a violation of the court’s prior orders. Dakota Access has petitioned the U.S. Supreme Court for review of the Court of Appeal’s decision upholding the D.D.C.’s order vacating the easement. The pipeline remains operational.
We have entered into a Contingent Equity Contribution Agreement whereby MPLX LP, along with the other joint venture owners in the Bakken Pipeline system, has agreed to make equity contributions to the joint venture upon certain events occurring to allow the entities that own and no threat of public harm associated with MarkWest Liberty Midstream’s launcher/receiver operations. These findingsoperate the Bakken Pipeline system to satisfy their senior note payment obligations. The senior notes were supported by a subsequent inspection and reviewissued to repay amounts owed by the Occupational Safety and Health Administration. After providing these studies, and other substantial documentation relatedpipeline companies to MarkWest Liberty Midstream's pipeline and compressor stations, and arranging site visits and conducting several meetings withfund 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 scopeconstruction of the proposed settlement.Bakken Pipeline system. If the pipeline were temporarily shut down, MPLX would have to contribute its 9.19 percent pro rata share of funds required to pay interest accruing on the notes and any portion of the principal that matures while the pipeline is shutdown. MPLX also expects to contribute its 9.19 percent pro rata share of any costs to remediate any deficiencies to reinstate the permit and/or return the pipeline into operation. If the vacatur of the easement permit results in a permanent shutdown of the pipeline, MPLX would have to contribute its 9.19 percent pro rata share of the cost to redeem the bonds (including the 1% redemption premium required pursuant to the indenture governing the notes) and any accrued and unpaid interest. As of September 30, 2021, our maximum potential undiscounted payments under the Contingent Equity Contribution Agreement were approximately $230 million.


Item 1A. Risk Factors


We are subject to various risks and uncertainties inThere 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 Factorsrisk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016.2020.



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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds


In connection with the issuanceThe following table sets forth a summary 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 cashpurchases during the three monthsquarter ended September 30, 2017,2021, of equity securities that are registered by MPLX pursuant 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)12 of the Securities Exchange Act of 1933,1934, as amended.

PeriodTotal Number of Units Purchased
Average Price
Paid per
Unit(1)
Total Number of Units Purchased as Part of Publicly Announced Plans or Programs
Maximum Dollar
Value of Units that
May Yet Be Purchased
Under the Plans or
Programs(2)
7/01/2021-7/31/20211,578,870 $28.55 1,578,870 $611,620,731 
8/01/2021-8/31/20211,990,647 $28.06 1,990,647 $555,771,983 
9/01/2021-9/30/20212,064,340 $28.62 2,064,340 $496,699,570 
Total5,633,857 $28.40 5,633,857 
On September 1, 2017,
(1)Amounts in connection withthis column reflect 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 paid for units purchased under our unit repurchase authorization. The weighted average price includes commissions paid to brokers on shares repurchased under our unit repurchase authorization.
(2)On November 2, 2020, we announced the board authorization of an MPLX LP commona unit repurchase program for the ten trading days ending at market close on August 31, 2017. The general partnerrepurchase of up to $1 billion of MPLX’s common 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 entiretyheld 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.public. This unit repurchase authorization has no expiration date.

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.


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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.



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Item 6. Exhibits
  Incorporated by Reference From  
Exhibit
Number		Exhibit DescriptionFormExhibitFiling DateSEC File No.Filed
Herewith		Furnished
Herewith
2.1†8-K2.1 5/8/2019001-35714
3.1S-13.1 7/2/2012333-182500
3.2S-1/A3.2 10/9/2012333-182500
3.38-K3.1 2/3/2021001-35714
10.1X
31.1X
31.2X
32.1X
32.2X
101.INSXBRL Instance Document: The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema Document.X
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.X
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.X
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.X
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.X
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
†    The exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the Securities and Exchange Commission upon request
59

    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  

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Table of Contents

Incorporated by Reference
Exhibit
Number
Exhibit DescriptionFormExhibitFiling DateSEC File No.
Filed
Herewith
Furnished
Herewith
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
X
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350
X
101.INSXBRL Instance DocumentX
101.SCHXBRL Taxonomy Extension SchemaX
101.CALXBRL Taxonomy Extension Calculation LinkbaseX
101.DEFXBRL Taxonomy Extension Definition LinkbaseX
101.LABXBRL Taxonomy Extension Label LinkbaseX
101.PREXBRL Taxonomy Extension Presentation LinkbaseX



71



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
MPLX LPBy:
By:MPLX GP LLC
Its general partner
Date: October 30, 2017November 2, 2021By:
/s/ Paula L. Rosson

Kelly D. Wright
Paula L. RossonKelly D. Wright
Senior Vice President and Chief Accounting OfficerController of MPLX GP LLC
(the (the general partner of MPLX LP)


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