UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________

FORM 10-Q

____________________________________________



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

For the quarterly period ended ~~September~~June 30, ~~2019~~2020



☐	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)

_____________________________________________



200 E. Hardin Street,	Findlay,	Ohio	45840
(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 Interests	MPLX	New 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 every Interactive Data File required to be submitted 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 such files.) Yes x No ¨

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



Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	☐	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 ~~1,058,355,304~~1,058,750,442 common units outstanding at ~~October 31, 2019.~~July 30, 2020.

Table of Contents

Unless the context otherwise requires, references in this report to “MPLX LP,” “MPLX,” “the Partnership,” “we,” “our,” “us,” or like terms refer to MPLX LP and its subsidiaries. Additionally, throughout this Quarterly Report on Form 10-Q, we have used terms in our discussion of the business and operating results that have been defined in our Glossary of Terms.

Table of Contents

Glossary of Terms

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



ASC	Accounting Standards Codification
ASU	Accounting Standards Update
ATM Program	An at-the-market program for the issuance of common units
Barrel	One stock tank barrel, or 42 United States gallons of liquid volume, used in reference to crude oil or other liquid hydrocarbons
Bcf/d	One billion cubic feet per day
Btu	One British thermal unit, an energy measurement
Condensate	A natural gas liquid with a low vapor pressure mainly composed of propane, butane, pentane and heavier hydrocarbon fractions
DCF (a non-GAAP financial measure)	Distributable Cash Flow
EBITDA (a non-GAAP financial measure)	Earnings Before Interest, Taxes, Depreciation and Amortization
FASB	Financial Accounting Standards Board
GAAP	Accounting principles generally accepted in the United States of America
~~Gal~~	~~Gallon~~
~~Gal/d~~	~~Gallons per day~~
LIBOR	London Interbank Offered Rate
mbpd	Thousand barrels per day
Merger	MPLX acquisition by merger of Andeavor Logistics LP (“ANDX”) on July 30, 2019
MMBtu	One million British thermal units, an energy measurement
MMcf/d	One million cubic feet of natural gas per day
NGL	Natural gas liquids, such as ethane, propane, butanes and natural gasoline
NYSE	New York Stock Exchange
Predecessor	~~Collectively:~~ ~~- The related assets, liabilities and results of operations of Hardin Street Marine LLC (“HSM”) prior to the date of the acquisition, March 31, 2016, effective January 1, 2015~~ - The related assets, liabilities and results of operations of Hardin Street Transportation LLC (“HST”), Woodhaven Cavern LLC (“WHC”) and MPLX Terminals LLC (“MPLXT”) prior to the date of the acquisition, March 1, 2017, effective January 1, 2015 for HST and WHC and April 1, 2016 for MPLXT - The related assets, liabilities and results of operations of Andeavor Logistics LP (“ANDX”) prior to the date of the acquisition, July 30, 2019, effective October 1, 2018
Realized derivative gain/loss	The gain or loss recognized when a derivative matures or is settled
SEC	United States Securities and Exchange Commission
SMR	Steam methane reformer, operated by a third party and located at the Javelina gas processing and fractionation complex in Corpus Christi, Texas
Unrealized derivative gain/loss	The gain or loss recognized on a derivative due to changes in fair value prior to the instrument maturing or settling
VIE	Variable interest entity

Table of Contents

Part I—Financial Information

Item 1. Financial Statements

MPLX LP

Consolidated Statements of Income (Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,					Six Months Ended June 30,
(In millions, except per unit data)	2019		2018		2019		2018		2020		2019⁽¹⁾			2020			2019⁽¹⁾
Revenues and other income:
Service revenue	$	632	$	456	$	1,865	$	1,248	$	563	$	619		$	1,175		$	1,233
Service revenue - related parties	899		568		2,549		1,588		857		847			1,785			1,650
Service revenue - product related	26		59		86		154		22		26			61			60
Rental income	99		89		291		252		98		93			194			192
Rental income - related parties	293		190		904		525		237		286			471			611
Product sales	171		239		576		652		120		189			289			405
Product sales - related parties	32		18		109		35		30		36			63			77
Income from equity method investments	95		64		255		175
Income/(loss) from equity method investments⁽²⁾									89		83			(1,095		)	160
Other income	2		3		6		8		2		4			3			4
Other income - related parties	31		26		84		73		63		27			127			53
Total revenues and other income	2,280		1,712		6,725		4,710		2,081		2,210			3,073			4,445
Costs and expenses:
Cost of revenues (excludes items below)	407		241		1,099		680		315		353			683			692
Purchased product costs	129		241		489		632		87		166			222			360
Rental cost of sales	37		32		103		94		33		29			68			66
Rental cost of sales - related parties	45		1		124		2		41		36			87			79
Purchases - related parties	303		228		894		628		280		313			556			591
Depreciation and amortization	302		201		916		565		321		313			646			614
Impairment expense									—		—			2,165			—
General and administrative expenses	102		76		293		217		96		90			193			191
Other taxes	29		20		84		55		30		25			61			55
Total costs and expenses	1,354		1,040		4,002		2,873		1,203		1,325			4,681			2,648
Income from operations	926		672		2,723		1,837
Income/(loss) from operations									878		885			(1,608		)	1,797
Related party interest and other financial costs	5		2		8		4		1		2			4			3
Interest expense (net of amounts capitalized of $13 million, $9 million, $36 million and $27 million, respectively)	212		134		640		381
Interest expense (net of amounts capitalized of $10 million, $12 million, $23 million and $23 million, respectively)									206		214			417			428
Other financial costs	16		17		38		49		16		13			32			22
Income before income taxes	693		519		2,037		1,403
Provision for income taxes	4		3		2		8
Net income	689		516		2,035		1,395
Income/(loss) before income taxes									655		656			(2,061		)	1,344
(Benefit)/provision for income taxes									—		(1		)	—			(2		)
Net income/(loss)									655		657			(2,061		)	1,346
Less: Net income attributable to noncontrolling interests	8		6		20		11		7		6			15			12
Less: Net income attributable to Predecessor	52		—		401		—		—		169			—			349
Net income attributable to MPLX LP	629		510		1,614		1,384
Net income/(loss) attributable to MPLX LP									648		482			(2,076		)	985
Less: Series A preferred unit distributions	20		19		61		55		21		21			41			41
Less: Series B preferred unit distributions	7		—		7		—		10		—			21			—
Limited partners’ interest in net income attributable to MPLX LP	$	602	$	491	$	1,546	$	1,329
Limited partners’ interest in net income/(loss) attributable to MPLX LP									$	617	$	461		$	(2,138	)	$	944
Per Unit Data (See Note 6)
Net income attributable to MPLX LP per limited partner unit:
Net income/(loss) attributable to MPLX LP per limited partner unit:
Common - basic	$	0.61	$	0.62	$	1.78	$	1.77	$	0.58	$	0.56		$	(2.02	)	$	1.16
Common - diluted	$	0.61	$	0.62	$	1.78	$	1.77	$	0.58	$	0.55		$	(2.02	)	$	1.16
Weighted average limited partner units outstanding:
Common - basic	974		794		855		750		1,059		794			1,059			794
Common - diluted	975		794		855		750		1,059		795			1,059			795


(1)	Financial information for the three and six months ended June 30, 2019 has been retrospectively adjusted for the acquisition of ANDX. See Notes 1 and 3.


(2)	The six months ended June 30, 2020 includes $1,264 million of impairment expense. See Note 4.

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

MPLX LP

Consolidated Statements of Comprehensive Income (Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2019		2018		2019		2018			2020		2019⁽¹⁾		2020			2019⁽¹⁾
Net income	$	689	$	516	$	2,035	$	1,395
Net income/(loss)										$	655	$	657	$	(2,061	)	$	1,346
Other comprehensive income/(loss), net of tax:
Remeasurements of pension and other postretirement benefits related to equity method investments, net of tax	—		—		1		(2		)	—		—		(1		)	1
Comprehensive income	689		516		2,036		1,393
Comprehensive income/(loss)										655		657		(2,062		)	1,347
Less comprehensive income attributable to:
Noncontrolling interests	8		6		20		11			7		6		15			12
Income attributable to Predecessor	52		—		401		—			—		169		—			349
Comprehensive income attributable to MPLX LP	$	629	$	510	$	1,615	$	1,382
Comprehensive income/(loss) attributable to MPLX LP										$	648	$	482	$	(2,077	)	$	986


(1)	Financial information for the three and six months ended June 30, 2019 has been retrospectively adjusted for the acquisition of ANDX. See Notes 1 and 3.

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

Table of Contents

MPLX LP

Consolidated Balance Sheets (Unaudited)


(In millions)	September 30, 2019			December 31, 2018⁽¹⁾			June 30, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	41		$	77		$	67		$	15
Receivables, net	570			611			562			593
Current assets - related parties	660			556			594			656
Inventories	104			98			115			110
Other current assets	65			98			48			110
Total current assets	1,440			1,440			1,386			1,484
Equity method investments	5,182			4,901			4,065			5,275
Property, plant and equipment, net	21,892			21,525			21,758			22,145
Intangibles, net	1,309			1,359			1,023			1,270
Goodwill	10,735			10,016			7,722			9,536
Right of use assets	366			—
Right of use assets, net							341			365
Noncurrent assets - related parties	302			24			676			303
Other noncurrent assets	55			60			51			52
Total assets	41,281			39,325			37,022			40,430
Liabilities
Current liabilities:
Accounts payable	196			266			145			242
Accrued liabilities	185			272			138			187
Current liabilities - related parties	562			502			372			1,008
Accrued property, plant and equipment	346			399			154			283
Accrued interest payable	226			184			207			210
Operating lease liabilities	61			—			69			66
Other current liabilities	656			645			143			136
Total current liabilities	2,232			2,268			1,228			2,132
Long-term deferred revenue	189			132			261			217
Long-term liabilities - related parties	293			46			287			290
Long-term debt	19,190			17,922			20,556			19,704
Deferred income taxes	15			14			11			12
Long-term operating lease liabilities	309			—			274			302
Deferred credits and other liabilities	193			208			175			192
Total liabilities	22,421			20,590			22,792			22,849
Commitments and contingencies (see Note 20)
Commitments and contingencies (see Note 21)
Series A preferred units	968			1,004			968			968
Equity
Common unitholders - public (392 million and 289 million units issued and outstanding)	11,289			8,336
Common unitholder - MPC (666 million and 505 million units issued and outstanding)	5,767			(1,612		)
Series B preferred units	601			—
Equity of Predecessor	—			10,867
Common unitholders - public (393 million and 392 million units issued and outstanding)							9,469			10,800
Common unitholder - MPC (666 million and 666 million units issued and outstanding)							2,951			4,968
Series B preferred units (.6 million and .6 million units issued and outstanding)							611			611
Accumulated other comprehensive loss	(15		)	(16		)	(16		)	(15		)
Total MPLX LP partners’ capital	17,642			17,575			13,015			16,364
Noncontrolling interests	250			156			247			249
Total equity	17,892			17,731			13,262			16,613
Total liabilities, preferred units and equity	$	41,281		$	39,325		$	37,022		$	40,430

~~(1) Financial information has been retrospectively adjusted for the acquisition of ANDX. See Notes 1 and 3.~~

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

Table of Contents

MPLX LP

Consolidated Statements of Cash Flows (Unaudited)


	Nine Months Ended September 30,						Six Months Ended June 30,
(In millions)	2019			2018			2020			2019⁽¹⁾
Increase/(decrease) in cash, cash equivalents and restricted cash
Operating activities:
Net income	$	2,035		$	1,395
Adjustments to reconcile net income to net cash provided by operating activities:
Net (loss)/income							$	(2,061	)	$	1,346
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Amortization of deferred financing costs	29			45			29			19
Depreciation and amortization	916			565			646			614
Impairment expense							2,165			—
Deferred income taxes	1			7			(1		)	(2		)
Asset retirement expenditures	(1		)	(7		)	—			(1		)
(Gain)/loss on disposal of assets	(3		)	1
Income from equity method investments	(255		)	(175		)
Loss/(gain) on disposal of assets							1			(2		)
Loss/(income) from equity method investments⁽²⁾							1,095			(160		)
Distributions from unconsolidated affiliates	379			279			226			245
Changes in:
Current receivables	38			(157		)	31			75
Inventories	(3		)	(10		)	(7		)	—
Fair value of derivatives	(4		)	16			(9		)	7
Current accounts payable and accrued liabilities	(81		)	151			(102		)	(117		)
Current assets/current liabilities - related parties	(148		)	(108		)	27			(124		)
Right of use assets/operating lease liabilities	6			—			(1		)	1
Deferred revenue	58			30			49			46
All other, net	23			(5		)	26			7
Net cash provided by operating activities	2,990			2,027			2,114			1,954
Investing activities:
Additions to property, plant and equipment	(1,720		)	(1,383		)	(708		)	(1,136		)
Acquisitions, net of cash acquired	6			(451		)	—			6
Disposal of assets	14			5			43			8
Investments in unconsolidated affiliates	(494		)	(215		)	(222		)	(323		)
Distributions from unconsolidated affiliates - return of capital	2			16			110			2
All other, net	3			1			—			4
Net cash used in investing activities	(2,189		)	(2,027		)	(777		)	(1,439		)
Financing activities:
Long-term debt - borrowings	8,674			10,735			2,500			3,139
- repayments	(7,423		)	(4,781		)	(1,682		)	(2,272		)
Related party debt - borrowings	7,708			2,395			2,708			3,833
- repayments	(7,583		)	(2,781		)	(3,302		)	(3,789		)
Debt issuance costs	(20		)	(53		)
Distributions to MPC for acquisitions	—			(4,111		)
Distributions to noncontrolling interests	(20		)	(10		)	(17		)	(12		)
Distributions to Series A preferred unitholders	(61		)	(52		)	(41		)	(40		)
Distributions to Series B preferred unitholders	(21		)	—			(21		)	—
Distributions to unitholders and general partner	(1,731		)	(1,312		)	(1,445		)	(1,038		)
Distributions to common and Series B preferred unitholders from Predecessor	(502		)				—			(502		)
Contributions from MPC	52			—			20			28
Contributions from noncontrolling interests	94			8			—			94
All other, net	(12		)	(8		)	(5		)	(9		)
Net cash used in financing activities	(845		)	30			(1,285		)	(568		)
Net (decrease)/increase in cash, cash equivalents and restricted cash	(44		)	30
Net increase/(decrease) in cash, cash equivalents and restricted cash							52			(53		)
Cash, cash equivalents and restricted cash at beginning of period	85			9			15			85
Cash, cash equivalents and restricted cash at end of period	$	41		$	39		$	67		$	32


(1)	Financial information for the six months ended June 30, 2019 has been retrospectively adjusted for the acquisition of ANDX. See Notes 1 and 3.


(2)	The 2020 period includes $1,264 million of impairment expense. See Note 4.

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

Table of Contents

MPLX LP

Consolidated Statements of Equity (Unaudited)

Partnership
(In millions) Common
Unit-holders
Public Common
Unit-holder
MPC General
Partner
MPC Accumulated Other Comprehensive Loss Non-controlling
Interests Equity of Predecessor Total
Balance at December 31, 2017 $ 8,379
$ 2,099
$ (637 ) $ (14 ) $ 146
$ —
$ 9,973
Net income (excludes amounts attributable to preferred units) 180
225
—
—
2
—
407
Allocation of MPC's net investment at acquisition —
5,172
(4,126 ) —
—
(1,046 ) —
Distributions to:
MPC for acquisition —
(936 ) (3,164 ) —
—
—
(4,100 )
Unitholders and general partner (176 ) (171 ) —
—
—
—
(347 )
Noncontrolling interests —
—
—
—
(3 ) —
(3 )
Contributions from:
MPC —
—
—
—
—
1,046
1,046
Noncontrolling interests —
—
—
—
1
—
1
Conversion of GP economic interests —
(7,926 ) 7,926
—
—
—
—
Other 2
—
1
(2 ) —
—
1
Balance at March 31, 2018 8,385
(1,537 ) —
(16 ) 146
—
6,978
Net income (excludes amounts attributable to preferred units) 157
276
—
—
3
—
436
Distributions to:
Unitholders and general partner (179 ) (288 ) —
—
—
—
(467 )
Noncontrolling interests —
—
—
—
(3 ) —
(3 )
Contributions from:
Noncontrolling interests —
—
—
—
4
—
4
Other 3
1
—
—
—
—
4
Balance at June 30, 2018 8,366
(1,548 ) —
(16 ) 150
—
6,952
Net income (excludes amounts attributable to preferred units) 179
312
—
—
6
—
497
Distributions to:
Unitholders and general partner (182 ) (316 ) —
—
—
—
(498 )
Noncontrolling interests —
—
—
—
(4 ) —
(4 )
Contributions from:
Noncontrolling interests —
—
—
—
3
—
3
Other 4
(1 ) —
—
—
—
3
Balance at September 30, 2018 $ 8,367
$ (1,553 ) $ —
$ (16 ) $ 155
$ —
$ 6,953



	Partnership
(In millions)	Common Unit-holders Public			Common Unit-holder MPC			Series B Preferred Unit-holders			Accumulated Other Comprehensive Loss			Non-controlling Interests			Equity of Predecessor			Total⁽¹⁾
Balance at December 31, 2018	$	8,336		$	(1,612	)	$	—		$	(16	)	$	156		$	10,867		$	17,731
Net income (excludes amounts attributable to preferred units)	176			307			—			—			6			180			669
Distributions to:
Unitholders	(188		)	(327		)	—			—			—			(261		)	(776		)
Noncontrolling interests	—			—			—			—			(6		)	—			(6		)
Contributions from:
MPC	—			—			—			—			—			15			15
Noncontrolling interests	—			—			—			—			94			—			94
Other	2			—			—			1			—			—			3
Balance at March 31, 2019	8,326			(1,632		)	—			(15		)	250			10,801			17,730
Net income (excludes amounts attributable to preferred units)	168			293			—			—			6			169			636
Distributions to:
Unitholders	(191		)	(332		)	—			—			—			(241		)	(764		)
Noncontrolling interests	—			—			—			—			(6		)	—			(6		)
Contributions from:
MPC	—			—			—			—			—			13			13
Other	2			—			—			—			—			—			2
Balance at June 30, 2019	8,305			(1,671		)	—			(15		)	250			10,742			17,611

Balance at December 31, 2019	10,800			4,968			611			(15		)	249			—			16,613
Net (loss)/income (excludes amounts attributable to 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
Other	2			—			—			(1		)	—			—			1
Balance at March 31, 2020	9,509			3,014			601			(16		)	248			—			13,356
Net income (excludes amounts attributable to preferred units)	229			388			10			—			7			—			634
Distributions to:
Unitholders	(270		)	(458		)	—			—			—			—			(728		)
Noncontrolling interests	—			—			—			—			(8		)	—			(8		)
Contributions from:
MPC	—			6			—			—			—			—			6
Other	1			1			—			—			—			—			2
Balance at June 30, 2020	$	9,469		$	2,951		$	611		$	(16	)	$	247		$	—		$	13,262

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

~~Table of Contents~~

~~MPLX LP~~

~~Consolidated Statements of Equity (Unaudited)~~

Partnership
(In millions) Common
Unit-holders
Public Common
Unit-holder
MPC Series B Preferred Unit-holders Accumulated Other Comprehensive Loss Non-controlling
Interests Equity of Predecessor
Total⁽¹⁾
Balance at December 31, 2018 $ 8,336
$ (1,612 ) $ —
$ (16 ) $ 156
10,867
$ 17,731
Net income (excludes amounts attributable to preferred units) 176
307
—
—
6
180
669
Distributions to:
Unitholders (188 ) (327 ) —
—
—
(261 ) (776 )
Noncontrolling interests —
—
—
—
(6 ) —
(6 )
Contributions from: —

MPC —
—
—
—
—
15
15
Noncontrolling interests —
—
—
—
94
—
94
Other 2
—
—
1
—
—
3
Balance at March 31, 2019 8,326
(1,632 ) —
(15 ) 250
$ 10,801
17,730
Net income (excludes amounts attributable to preferred units) 168
293
—
—
6
169
636
Distributions to:
Unitholders (191 ) (332 ) —
—
—
(241 ) (764 )
Noncontrolling interests —
—
—
—
(6 ) —
(6 )
Contributions from:

MPC —
—
—
—
—
13
13
Other 2
—
—
—
—
—
2
Balance at June 30, 2019 8,305
(1,671 ) —
(15 ) 250
$ 10,742
17,611
Net income (excludes amounts attributable to Series A preferred units) 222
380
7
—
8
52
669
Allocation of MPC's net investment at acquisition 2,983
7,199
615
—
—
(10,797 ) —
Distributions to:
Unitholders (262 ) (432 ) (21 ) —
—
—
(715 )
Noncontrolling interests —
—
—
—
(8 ) —
(8 )
Contributions from:
MPC —
292
—
—
—
3
295
Conversion of Series A preferred units 36
—
—
—
—
—
36
Other 5
(1 ) —
—
—
—
4
Balance at September 30, 2019 $ 11,289
$ 5,767
$ 601
$ (15 ) $ 250
$ —
$ 17,892

~~(1) Financial information has been retrospectively adjusted for the acquisition of ANDX for the first and second quarters of 2019. See Notes 1 and 3.~~


(1)	Financial information for the first and second quarters of 2019 has been retrospectively adjusted for the acquisition of ANDX. See Notes 1 and 3.

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

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Notes to Consolidated Financial Statements (Unaudited)

1. Description of the Business and Basis of Presentation

Description of the Business – MPLX LP is a diversified, large-cap master limited partnership formed by Marathon Petroleum Corporation that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. References in this report to “MPLX LP,” “MPLX,” “the Partnership,” “we,” “ours,” “us,” or like terms refer to MPLX LP and its subsidiaries. References to “MPC” refer collectively to Marathon Petroleum Corporation as our sponsor and its subsidiaries, other than the Partnership. We are engaged in the transportation, storage 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.

MPLX’s business consists of 2 segments based on the nature of services it offers: Logistics and Storage (“L&S”), which relates primarily to crude oil, asphalt and refined petroleum products; and Gathering and Processing (“G&P”), which relates primarily to natural gas and NGLs. See Note 9 for additional information regarding the operations and results of these segments.

On July 30, 2019, MPLX completed its acquisition by merger (the “Merger”) of Andeavor Logistics LP (“ANDX”). At the effective time of the Merger, each common unit held by ANDX’s public unitholders was converted into the right to receive 1.135 MPLX common units. ANDX common units held by certain affiliates of MPC were converted into the right to receive 1.0328 MPLX common units. See Note 3 for additional information regarding the Merger.

Impairments – The outbreak of COVID-19 and its development into a pandemic in March 2020 resulted in significant economic disruption globally. Actions taken by various governmental authorities, individuals and companies around the world to prevent the spread of COVID-19 through social distancing have restricted travel, many business operations, public gatherings and the overall level of individual movement and in-person interaction across the globe. Although there have been some signs of economic improvement, these events significantly reduced global economic activity and resulted in a decline in the demand for the midstream services we provide beginning with the first quarter of 2020. Macroeconomic conditions and global geopolitical events have also resulted in significant price volatility related to those aforementioned products.

The overall deterioration in the economy and the environment in which MPLX and its customers operate, as well as a sustained decrease in unit price, were considered triggering events resulting in impairments of the carrying value of certain assets during the first quarter of 2020. 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 current environment, which impacted their current and expected future demand for our services, including the future utilization of our assets. Additionally, certain of our contracts have commodity price exposure, including NGL prices, which have experienced increased volatility as noted above. The table below provides information related to the impairments recognized during the first quarter of 2020 as well as the corresponding footnote where additional information can be found. No additional events or circumstances arose during the second quarter of 2020 which would indicate the need for any additional impairment beyond those recognized during the first quarter.



(In millions)	Impairment		Footnote Reference
Goodwill	$	1,814	12
Equity method investments	1,264		4
Intangibles, net	177		12
Property, plant and equipment, net	174		11
Total impairments	$	3,429

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

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. The results of

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operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 are not necessarily indicative of the results to be expected for the full year.

In relation to the Merger described above and in Note 3, ANDX’s assets, liabilities and results of operations prior to the Merger are collectively included in what we refer to as the “Predecessor” from October 1, 2018, which was the date that MPC acquired Andeavor. MPLX’s acquisition of ANDX is considered a transfer between entities under common control due to MPC’s relationship with ANDX prior to the Merger. As an entity under common control with MPC, MPLX recorded the assets acquired and liabilities assumed on its consolidated balance sheets at MPC’s historical carrying value. Transfers of businesses between entities under common control require prior periods to be retrospectively adjusted for those dates that the entity was under common control. Accordingly, the accompanying financial statements and related notes of MPLX LP have been retrospectively adjusted to include the historical results of ANDX beginning October 1, 2018.

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

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

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2. Accounting Standards

Recently Adopted

ASU ~~2016-02, Leases~~2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments

WeEffective January 1, 2020, we adopted ASU ~~No. 2016-02, Leases (Topic 842), as of January 1, 2019, electing the transition method which permits entities to adopt the provisions of the standard~~2016-13 using the modified retrospective ~~approach without adjusting comparative periods. We also elected~~transition method. This ASU requires entities to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. The ASU requires the ~~package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed us~~company to grandfather the historical accounting conclusions until a reassessment event is present. We have also elected the practical expedient to not recognize short-term leases on the balance sheet, the practical expedient related to right of way permits and land easements which allows us to carry forward our accounting treatment for those existing agreements, and the practical expedient to combine lease and non-lease components for the majority of our underlying classes of assets except for our third-party contractor service and equipment agreements and boat and barge equipment agreementsutilize an expected loss methodology in which we are the lessee. We did not elect the practical expedient to combine lease and non-lease components for arrangements in which we are the lessor. In instances where the practical expedient was not elected, lease and non-lease consideration is allocated based on relative standalone selling price.

~~Right of use (“ROU”) assets represent our right to use an underlying asset in which we obtain substantially all~~place of the ~~economic benefits~~incurred loss methodology for financial instruments, including trade receivables, and the right to direct the use of the asset during the lease term. Lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. We recognize ROU assets and lease liabilities on the balanceoff-balance sheet for leases with a lease term of greater than one year. Payments that are not fixed at the commencement of the lease are considered variable and are excluded from the ROU asset and lease liability calculations. In the measurement of our ROU assets and lease liabilities, the fixed lease payments in the agreement are discounted using a secured incremental borrowing rate for a term similar to the duration of the lease, as our leases do not provide implicit rates. Operating lease expense is recognized on a straight-line basis over the lease term.

credit exposures. Adoption of the new standard resulted in the recording of ROU assets and lease liabilities of approximately $629 million and $629 million, respectively, as of January 1, 2019. This is inclusive of ROU assets and lease liabilities related to ANDX of $124 million and $127 million respectively. The standard did not ~~materially~~have a material impact on our ~~consolidated statements of income, cash flows or equity~~financial statements.

We are exposed to credit losses, primarily as a result of ~~adoption.~~

Asthe midstream services that we provide. We assess each customer’s ability to pay through our credit review process, which considers various factors such as external credit ratings; a ~~lessor under ASC 842, MPLX may be required~~review of financial statements to ~~re-classify existing operating leases to sales-type leases upon modification~~determine liquidity, leverage, trends and ~~related reassessment of the leases. See Note 19 for further information regarding~~business specific risks; market information; pay history and our business strategy. We monitor our ongoing ~~evaluation~~credit exposure through timely review of ~~the impacts~~customer payment activity. At June 30, 2020, we reported $562 million of ~~lease reassessments as modifications occur.~~accounts receivable, net of allowances of $1 million.

We also adopted the following ~~standard~~ASU’s during the first ~~nine~~six months of ~~2019,~~2020, which did not have a material impact to our financial statements or financial statement disclosures:



ASU		Effective Date
~~2017-12~~2018-13	~~Derivatives and Hedging~~Fair Value Measurement (Topic 820): Disclosure Framework - ~~Targeted Improvements~~Changes to ~~Accounting~~the Disclosure Requirements for ~~Hedging Activities~~Fair Value Measurement	January 1, ~~2019~~2020
2020-04	Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting	April 1, 2020

~~Not Yet Adopted~~

~~ASU 2017-04, Intangibles - Goodwill and Other - Simplifying the Test for Goodwill Impairment~~

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

~~ASU 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments~~

In June 2016, the FASB issued an ASU related to the accounting for credit losses on certain financial instruments. The guidance requires that for most financial assets, losses be based on an expected loss approach which includes estimates of losses over the life of exposure that considers historical, current and forecasted information. Expanded disclosures related to the methods used

109

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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. We do not expect application of this ASU to have a material impact on our consolidated financial statements.

3. Acquisitions

Acquisition of Andeavor Logistics LP

As previously disclosed, on May 7, 2019, ANDX, Tesoro Logistics GP, LLC ~~then~~(then the general partner of ANDX (“TLGP”)), MPLX, MPLX GP LLC ~~the~~(the general partner of MPLX (“MPLX GP”)), and MPLX MAX LLC, a ~~wholly-owned~~wholly owned subsidiary of MPLX (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) that provided for, among other things, the merger of Merger Sub with and into ANDX. On July 30, 2019, the Merger was completed, and ANDX survived the Merger as a ~~wholly-owned~~wholly owned subsidiary of MPLX. At the effective time of the Merger, each common unit held by ANDX’s public unitholders was converted into the right to receive 1.135 MPLX common units. ANDX common units held by certain affiliates of MPC were converted into the right to receive 1.0328 MPLX common units. See Note 7 for information on units issued in connection with the Merger.

Additionally, as a result of the Merger, each ANDX TexNew Mex Unit issued and outstanding immediately prior to the effective time of the Merger was converted into a right for Western Refining Southwest, Inc. (“~~Southwest, Inc.”~~WRSW”), a ~~wholly-owned~~wholly owned subsidiary of MPC, as the holder of all such units, to receive a unit representing a substantially equivalent limited partner interest in MPLX (the “MPLX TexNew Mex Units”). By virtue of the conversion, all ANDX TexNew Mex Units were cancelled and ceased to exist as of the effective time of the Merger. The MPLX TexNew Mex Units are a new class of units in MPLX substantially equivalent to the ANDX TexNew Mex Units, including substantially equivalent rights, powers, duties and obligations that the ANDX TexNew Mex Units had immediately prior to the closing of the Merger.

As a result of the Merger, the ANDX Special Limited Partner Interest outstanding immediately prior to the effective time of the Merger was converted into a right for Southwest Inc., as the holder of all such interest, to receive a substantially equivalent special limited partner interest in MPLX (the “MPLX Special Limited Partner Interest”). By virtue of the conversion, the ANDX Special Limited Partner Interest was cancelled and ceased to exist as of the effective time of the Merger. For information on ANDX’s preferred units, please see Note 7.

The assets of ANDX consist of a network of owned and operated crude oil, refined product and natural gas pipelines; crude oil and water gathering systems; refining logistics assets; terminals with crude oil and refined products storage capacity; rail facilities; marine terminals including storage; bulk petroleum distribution facilities; a trucking fleet; and natural gas processing and fractionation systems and complexes. The assets are located in the western and inland regions of the United States and complement MPLX’s existing business and assets.

MPC accounted for its October 1, 2018 acquisition of Andeavor (including acquiring control of ANDX), using the acquisition method of accounting, which required Andeavor assets and liabilities to be recorded by MPC at the acquisition date fair value. The Merger was closed on July 30, 2019, and the results of ANDX have been incorporated into the results of MPLX as of October 1, 2018, which is the date that common control was established. As a result of MPC’s relationship with both MPLX and ANDX, the Merger has been treated as a common control transaction, which requires the recasting of MPLX’s historical results and the recognition of assets acquired and liabilities assumed using MPC’s historical carrying value. ~~The fair value of assets acquired and liabilities assumed shown below represents MPC’s historical carrying values as of October 1, 2018.~~

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(In millions) As Originally Reported
Adjustments⁽¹⁾
As Adjusted
Cash and cash equivalents $ 83
$ (53 ) $ 30
Receivables, net 241
256
497
Inventories 21
—
21
Other current assets⁽²⁾
59
(7 ) 52
Equity method investments 731
(89 ) 642
Property, plant and equipment, net 6,709
(427 ) 6,282
Intangibles, net 960
74
1,034
Other noncurrent assets⁽³⁾
31
(8 ) 23
Total assets acquired 8,835
(254 ) 8,581
Accounts payable 198
265
463
Other current liabilities⁽⁴⁾
188
(41 ) 147
Long-term debt 4,916
—
4,916
Deferred credits and other long-term liabilities⁽⁵⁾
75
1
76
Total liabilities assumed 5,377
225
5,602
Net assets acquired excluding goodwill 3,458
(479 ) 2,979
Goodwill 7,428
727
8,155
Net assets acquired $ 10,886
$ 248
$ 11,134

~~(1)Inclusive of activity recorded subsequent to the acquisition of ANDX on July 30, 2019, a portion of which was recorded as a non-cash contribution from MPC.~~

~~(2)Includes both related party and third party other current assets.~~

~~(3) Includes both related party and third party other noncurrent assets.~~

~~(4) Includes accrued liabilities, operating lease liabilities and long-term debt due within one year, as well as related party and third party other current liabilities.~~

~~(5) Includes deferred revenue and deferred income taxes, as well as related party and third party other noncurrent liabilities.~~

Details of the valuation methodology and significant inputs for fair value measurements are included below. The fair value measurements for equity method investments; property, plant and equipment; intangible assets and long-term debt are based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements.

~~Goodwill~~

The purchase consideration allocation resulted in the recognition of $8.2 billion in goodwill, which has been allocated between the L&S segment and the G&P segment at $7.2 billion and $1.0 billion, respectively.

~~Inventory~~

~~The fair value of inventory was recorded at cost as of October 1, 2018, as these items are related to spare parts as well as materials and supplies and approximate fair value.~~

~~Equity Method Investments~~

The fair value of the equity method investments is $642 million, which was determined based on applying income and market approaches. The income approach relied on the discounted cash flow method and the market approach relied on a market multiple approach considering historical and projected financial results. Discount rates for the discounted cash flow models were based on capital structures for similar market participants and included various risk premiums that account for risks associated with the specific investments.

~~Property, Plant and Equipment~~

The fair value of property, plant and equipment is $6.3 billion, which is based primarily on the cost approach. Key assumptions in the cost approach include determining the replacement cost by evaluating recent purchases of similar assets or published data, and adjusting replacement cost for economic and functional obsolescence, location, normal useful lives, and capacity (if applicable).

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~~Acquired Intangible Assets~~

The fair value of the acquired identifiable intangible assets is $1.0 billion, which represents the value of various customer contracts and relationships and other intangible assets. The fair value of customer contracts and relationships is $950 million, which was valued by applying the multi-period excess earnings method, which is an income approach. Key assumptions in the income approach include the underlying contract cash flow estimates, remaining contract term, probability of renewal, growth rates and discount rates. The intangible assets are all finite lived and will be amortized over 2 to 10 years.

~~Debt~~

The fair value of the ANDX unsecured notes was measured using a market approach, based upon the average of quotes for the acquired debt from major financial institutions and a third-party valuation service. Additionally, approximately $1.1 billion of borrowings under revolving credit agreements approximate fair value. The ANDX revolving credit facilities with total capacity of $2.1 billion were terminated upon closing of the Merger and were repaid with borrowings under the MPLX revolving credit facility.

~~Acquisition Costs~~

We recognized ~~$14~~$5 million in acquisition costs during the first half of 2019 related to the Merger, which are reflected in general and administrative expenses.

~~ANDX Revenue and Net Income~~

For the three and ~~nine~~six months ended ~~September~~June 30, 2019, we recognized ~~$612~~$588 million and ~~$1,789~~$1,177 million of revenues and other income, respectively, related to ANDX. For the three and ~~nine~~six months ended ~~September~~June 30, 2019 we recognized ~~$191~~$168 million and ~~$539~~$348 million, respectively, of net income ~~respectively,~~ related to ANDX.

~~Pro Forma Financial Information~~

The following unaudited pro forma information combines the historical operations of MPLX and ANDX, giving effect to the Merger as if it had been consummated on January 1, 2018, the beginning of the earliest period presented.

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2019 2018 2019 2018
Total revenues and other income $ 2,280
$ 2,312
$ 6,725
$ 6,371
Net income attributable to MPLX LP $ 681
$ 679
$ 2,015
$ 1,840

The pro forma information includes adjustments to align accounting policies, which include adjustments for capitalization of assets and treatment of turnaround and planned major maintenance costs. The pro forma information also includes adjustments related to: eliminating transactions between MPLX and ANDX which previously would have been recorded as transactions between related parties; basis differences on equity method investments as a result of recognition of MPC’s investments in ANDX’s equity method investments; depreciation and amortization expense to reflect the increased fair value of property, plant and equipment and increased amortization expense related to identifiable intangible assets; as well as adjustments to interest expense for the amortization of fair value adjustments over the remaining term of ANDX’s outstanding debt, reversal of ANDX’s historical amortization of debt issuance costs and debt discounts and to adjust for the difference in the weighted average interest rate between MPLX’s revolving credit facility and the ANDX revolving credit facilities.

~~The following table presents MPLX’s previously reported Consolidated Balance Sheet Data as of December 31, 2018 retrospectively adjusted for the Merger:~~

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December 31, 2018
(In millions) MPLX LP (Previously Reported) Predecessor MPLX LP (Currently Reported)
Assets
Current assets:
Cash and cash equivalents $ 68
$ 9
$ 77
Receivables, net 417
194
611
Current assets - related parties 290
266
556
Inventories 77
21
98
Other current assets 45
53
98
Total current assets 897
543
1,440
Equity method investments 4,174
727
4,901
Property, plant and equipment, net 14,639
6,886
21,525
Intangibles, net 424
935
1,359
Goodwill 2,586
7,430
10,016
Noncurrent assets - related parties 24
—
24
Other noncurrent assets 35
25
60
Total assets 22,779
16,546
39,325
Liabilities
Current liabilities:
Accounts payable 162
104
266
Accrued liabilities 250
22
272
Current liabilities - related parties 254
248
502
Accrued property, plant and equipment 294
105
399
Accrued interest payable 143
41
184
Other current liabilities 83
562
645
Total current liabilities 1,186
1,082
2,268
Long-term deferred revenue 80
52
132
Long-term liabilities - related parties 43
3
46
Long-term debt 13,392
4,530
17,922
Deferred income taxes 13
1
14
Deferred credits and other liabilities 197
11
208
Total liabilities 14,911
5,679
20,590
Commitments and contingencies (see Note 20)
Series A preferred units 1,004
—
1,004
Equity
Common unitholders - public 8,336
—
8,336
Common unitholder - MPC (1,612 ) —
(1,612 )
Equity of Predecessor —
10,867
10,867
Accumulated other comprehensive loss (16 ) —
(16 )
Total MPLX LP partners’ capital 6,708
10,867
17,575
Noncontrolling interests 156
—
156
Total equity 6,864
10,867
17,731
Total liabilities, preferred units and equity $ 22,779
$ 16,546
$ 39,325

~~Mt. Airy Terminal~~

On September 26, 2018, MPLX acquired an eastern U.S. Gulf Coast export terminal (the “Mt. Airy Terminal”) from Pin Oak Holdings, LLC for total consideration of $451 million. At the time of the acquisition, the terminal included tanks with 4 million barrels of third-party leased storage capacity and a dock with 120 mbpd of capacity. The Mt. Airy Terminal is located on the Mississippi River between New Orleans and Baton Rouge, is in close proximity to several Gulf Coast refineries including MPC’s Garyville Refinery and is near numerous rail lines and pipelines. The Mt. Airy Terminal is accounted for within the L&S segment. In the first quarter of 2019, an adjustment to the initial purchase price was made for approximately $5 million related to the final settlement of the acquisition, which was paid in the first six months of 2019 as shown on the statement of

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cash flow. This reduced the total purchase price to $446 million and resulted in $336 million of property, plant and equipment, $121 million of goodwill and the remainder being attributable to net liabilities assumed.

Goodwill represents the significant growth potential of the terminal due to the multiple pipelines and rail lines which cross the property, the terminal’s position as an aggregation point for liquids growth in the region for both ocean-going vessels and inland barges, the proximity of the terminal to MPC’s Garyville refinery and other refineries in the region as well as the opportunity to construct an additional dock at the site.

~~Refining Logistics and Fuels Distribution Acquisition~~

On February 1, 2018, MPC and MPLX closed on an agreement for the dropdown of refining logistics assets and fuels distribution services to MPLX. MPC contributed these assets and services in exchange for $4.1 billion in cash and a fixed number of MPLX common units and general partner units of 111,611,111 and 2,277,778, respectively. The fair value of the common and general partner units issued as of the acquisition date was $4.3 billion based on the closing common unit price as of February 1, 2018, as recorded on the Consolidated Statements of Equity, for a total purchase price of $8.4 billion. The equity issued consisted of: (i) 85,610,278 common units to MPLX GP, (ii) 18,176,666 common units to MPLX Logistics Holdings LLC and (iii) 7,824,167 common units to MPLX Holdings Inc. MPLX also issued 2,277,778 general partner units to MPLX GP in order to maintain its 2 percent general partner interest (“GP Interest”) in MPLX. MPC agreed to waive approximately one-third of the first quarter 2018 distributions on the common units issued in connection with this transaction. As a result of this waiver, MPC did not receive $23.7 million of the distributions that would have otherwise accrued on such common units with respect to the first quarter of 2018. Immediately following this transaction, the GP Interest was converted into a non-economic general partner interest.

MPLX recorded this transaction on a historical basis as required for transactions between entities under common control. No effect was given to the prior periods as these entities were not considered businesses prior to the February 1, 2018 dropdown. In connection with the dropdown, approximately $830 million of net property, plant and equipment was recorded in addition to $85 million and $130 million of goodwill allocated to MPLX Refining Logistics LLC (“Refining Logistics”) and MPLX Fuels Distribution LLC (“Fuels Distribution”), respectively. Both the refining logistics assets and the fuels distribution services are accounted for within the L&S segment.

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

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

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4. Investments and Noncontrolling Interests

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


	Ownership as of	Carrying value at				Ownership as of	Carrying value at
	September 30,	September 30,		December 31,		June 30,	June 30,		December 31,
(In millions, except ownership percentages)	2019	2019		2018		2020	2020		2019
L&S
MarEn Bakken Company LLC(1)	25%	$	483	$	498	25%	$	477	$	481
Illinois Extension Pipeline Company, L.L.C.	35%	275		275		35%	268		265
LOOP LLC	41%	239		226		41%	242		238
Andeavor Logistics Rio Pipeline LLC⁽¹⁾⁽²⁾	67%	201		181		67%	196		202
Minnesota Pipe Line Company, LLC⁽¹⁾	17%	192		197		17%	190		190
Whistler Pipeline LLC⁽²⁾						38%	188		134
Explorer Pipeline Company	25%	83		90		25%	79		83
Other⁽¹⁾		199		51
W2W Holdings LLC⁽²⁾⁽³⁾						50%	77		—
Wink to Webster Pipeline LLC⁽²⁾⁽³⁾						15%	—		126
Other⁽²⁾							60		55
Total L&S		1,672		1,518			1,777		1,774
G&P
MarkWest Utica EMG, L.L.C.	56%	2,017		2,039
Sherwood Midstream LLC	50%	502		366
MarkWest EMG Jefferson Dry Gas Gathering Company, L.L.C.	67%	291		236
Rendezvous Gas Services, L.L.C.⁽¹⁾	78%	174		248
Sherwood Midstream Holdings LLC	54%	159		157
MarkWest Utica EMG, L.L.C.⁽²⁾						57%	725		1,984
Sherwood Midstream LLC⁽²⁾						50%	560		537
MarkWest EMG Jefferson Dry Gas Gathering Company, L.L.C.⁽²⁾						67%	308		302
Rendezvous Gas Services, L.L.C.⁽²⁾						78%	166		170
Sherwood Midstream Holdings LLC⁽²⁾						51%	152		157
Centrahoma Processing LLC	40%	155		160		40%	151		153
Other⁽¹⁾		212		177
Other⁽²⁾							226		198
Total G&P		3,510		3,383			2,288		3,501
Total		$	5,182	$	4,901		$	4,065	$	5,275


(1)	~~These investments~~The investment in MarEn Bakken Company LLC 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 Pipeline projects, collectively referred to as ~~well as certain~~the Bakken Pipeline system or DAPL.


(2)	Investments deemed to be VIEs. Some investments included within “Other” ~~for both L&S and G&P are investments acquired as part of~~have also been deemed to be VIEs.


(3)	During the ~~Merger. The September~~six months ended June 30, ~~2019 balance reflects all purchase accounting adjustments identified by MPC as part of its acquisition of Andeavor.~~2020, we contributed our ownership in Wink to Webster Pipeline LLC to W2W Holdings LLC.

As a result of the Merger, MPLX LP acquired an ownership interest in Rendezvous Gas Services, L.L.C. (“RGS”), Minnesota Pipe Line Company, LLC (“MNPL”) and Andeavor Logistics Rio Pipeline LLC (“ALRP”), among others. RGS and ALRPFor those entities that have been deemed to be VIEs, ~~however,~~ neither MPLX nor any of its subsidiaries have been deemed to be the primary beneficiary due to voting rights on significant matters. ~~For all of the investments acquired through the Merger,~~While we have the ability to exercise influence through participation in the management committees which make all significant ~~decisions. However, since~~decisions, we have equal ~~or proportionate~~ 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.

In addition to the investments acquired through the Merger, MarkWest Utica EMG, L.L.C. (“MarkWest Utica EMG”), Sherwood Midstream LLC (“Sherwood Midstream”), MarkWest EMG Jefferson Dry Gas Gathering Company, L.L.C. (“Jefferson Dry Gas”) and Sherwood Midstream Holdings LLC (“Sherwood Midstream Holdings”) are also deemed to be VIEs. However, consistent with the investments above, neither MPLX nor any of its subsidiaries are deemed to be the primary beneficiary due to voting rights on significant matters. Sherwood Midstream has been deemed the primary beneficiary of Sherwood Midstream Holdings due to its controlling financial interest through its authority to manage the joint venture. As a result, Sherwood Midstream consolidates Sherwood Midstream Holdings. Therefore, MPLX also reports its portion of Sherwood Midstream Holdings’ net assets as a component of its investment in Sherwood Midstream. As of ~~September~~June 30, ~~2019,~~2020, MPLX has a ~~22.9~~24.47 percent indirect ownership interest in Sherwood Midstream Holdings through Sherwood Midstream.

MPLX’s maximum exposure to loss as a result of its involvement with equity 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. MPLX did not provide any financial support to equity method investments that it was not contractually obligated to provide during the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020.

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During the first quarter of 2020, we recorded an other than temporary impairment for three joint ventures in which we have an interest as discussed in Note 1. Impairment of these investments was $1,264 million, of which $1,251 million was related to MarkWest Utica EMG, L.L.C. and its investment in Ohio Gathering Company, L.L.C. The fair value of the investments was determined based upon applying the discounted cash flow method, which is an income approach. The discounted cash flow fair value estimate is based on known or knowable information at the interim measurement date. The significant assumptions that were used to develop the estimate of the fair value under the discounted cash flow method include management’s best estimates of the expected future cash flows, including prices and volumes, the weighted average cost of capital and the long-term growth rate. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As such, the fair value of these equity method investments represents a Level 3 measurement. As a result, there can be no assurance that the estimates and assumptions made for purposes of the impairment test will prove to be an accurate prediction of the future. 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. There were no additional impairments recorded during the second quarter of 2020.

Summarized financial information for MPLX’s equity method investments for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019 is as follows:

Nine Months Ended September 30, 2019⁽¹⁾
(In millions) VIEs Non-VIEs Total
Revenues and other income $ 479
$ 1,116
$ 1,595
Costs and expenses 251
434
685
Income from operations 228
682
910
Net income 192
605
797
Income from equity method investments⁽²⁾
$ 89
$ 166
$ 255


	Nine Months Ended September 30, 2018⁽¹⁾						Six Months Ended June 30, 2020
(In millions)	VIEs		Non-VIEs		Total		VIEs			Non-VIEs		Total
Revenues and other income	$	340	$	967	$	1,307	$	(43	)	$	640	$	597
Costs and expenses	202		495		697		202			274		476
Income from operations	138		472		610		(245		)	366		121
Net income	135		417		552		(283		)	332		49
Income from equity method investments⁽²⁾	$	44	$	131	$	175
(Loss)/income from equity method investments⁽¹⁾							$	(1,178	)	$	83	$	(1,095	)


(1)	~~The financial information for equity method investments for~~Includes the ~~nine months ended September 30, 2019 includes~~impact of any basis differential amortization or accretion in addition to the ~~financial information~~impairment of ~~equity method investments acquired as part of the Merger while the financial~~$1,264 million.



	Six Months Ended June 30, 2019⁽¹⁾
(In millions)	VIEs		Non-VIEs		Total
Revenues and other income	$	306	$	724	$	1,030
Costs and expenses	159		295		454
Income from operations	147		429		576
Net income	127		383		510
Income from equity method investments⁽²⁾	$	54	$	106	$	160


(1)	Financial information for the ~~nine~~first six months ~~ended September 30, 2018 does not.~~of 2019 has been retrospectively adjusted for the acquisition of ANDX. See ~~Note 3 for additional details.~~Notes 1 and 3.


(2)	Includes the impact of any basis differential amortization or accretion.

Summarized balance sheet information for MPLX’s equity method investments as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~2019 is as follows:


	September 30, 2019⁽¹⁾						June 30, 2020
(In millions)	VIEs		Non-VIEs		Total		VIEs		Non-VIEs		Total
Current assets	$	378	$	388	$	766	$	357	$	317	$	674
Noncurrent assets	5,469		5,164		10,633		5,824		5,061		10,885
Current liabilities	328		254		582		265		181		446
Noncurrent liabilities	$	265	$	843	$	1,108	$	656	$	853	$	1,509


	December 31, 2018⁽¹⁾						December 31, 2019
(In millions)	VIEs		Non-VIEs		Total		VIEs		Non-VIEs		Total
Current assets	$	252	$	415	$	667	$	534	$	330	$	864
Noncurrent assets	3,796		5,290		9,086		5,862		5,134		10,996
Current liabilities	158		280		438		192		245		437
Noncurrent liabilities	$	191	$	845	$	1,036	$	305	$	822	$	1,127


~~(1)~~	~~The financial information for equity method investments at September 30, 2019~~ ~~and~~ ~~December 31, 2018 is inclusive of financial information of equity method investments acquired as part of the Merger. See Note 3 for additional details.~~ 12 Table of Contents

As of ~~September~~June 30, ~~2019 and~~2020, the underlying net assets of MPLX’s investees in the G&P segment exceeded the carrying value of its equity method investments by approximately $59 million. At December 31, ~~2018,~~2019, the carrying value of MPLX’s equity method investments in the G&P segment exceeded the underlying net assets of its investees by approximately $1.0 ~~billion and $1.3 billion, respectively.~~billion. As of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the carrying value of MPLX’s equity method investments in the L&S segment exceeded the underlying net assets of its investees by $330 million and $329 million, respectively. At June 30, 2020 and ~~$187 million, respectively. This~~December 31, 2019, the G&P basis difference iswas being amortized into net income over the remaining estimated useful lives of the underlying assets, except for ~~$542~~$31 million and $498 million of excess related to goodwill, respectively. At June 30, 2020 and December 31, 2019, the L&S basis difference was being amortized into net income over the remaining estimated useful lives of the underlying assets, except for $167 million of excess related to ~~goodwill for the G&P and L&S segments, respectively.~~goodwill.

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5. Related Party Agreements and Transactions

MPLX 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 are further described below.

~~Related Party Agreements~~

MPLX has various long-term, fee-based commercial agreements with MPC. Under these agreements, MPLX provides transportation, terminal, fuels distribution, marketing, storage, management, operational and other services to MPC. MPC has committed to provide MPLX with minimum throughput volumes on crude oil and refined products and other fees for storage capacity; ~~a fixed fee for substantially all available capacity for boats and barges under the marine transportation services agreement;~~ operating and management fees; as well as reimbursements for certain direct and indirect costs. ~~In addition,~~MPC has also committed to provide a fixed fee for 100 percent of available capacity for boats, barges and 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~~services-type agreements as well as other various agreements.

Many of the material related party agreements acquired through the merger were consistent with MPLX’s existing agreements; however, one additional agreement that MPLX is now a party to is a keep-whole commodity agreement. ANDX was responsible for processing gas for certain producers under keep-whole processing agreements. Under a keep-whole agreement, the producer transfers title to the NGLs produced during gas processing, and the processor, in exchange, delivers to the producer natural gas with a BTU content equivalent to the NGLs removed. The operating margin for these contracts is typically determined by the spread between NGLs sales prices and the price paid to purchase the replacement natural gas (“Shrink Gas”). ANDX entered into the “Keep-Whole Commodity Agreement” with its sponsor at that time, whereby the sponsor paid ANDX a processing fee for NGLs related to keep-whole agreements and delivered Shrink Gas to the producers on its behalf. ANDX then paid its Sponsor a marketing fee in exchange for assuming the commodity risk. This agreement was modified in 2016 which adjusted the contract to provide for a tiered pricing structure for different NGL production levels. This contract continued as part of MPC’s acquisition of Andeavor, and MPLX is now party to this agreement.Related Party Loan

MPLX is ~~also~~ party to a loan agreement with MPC Investment LLC (“MPC Investment”) (the “MPC Loan Agreement”). Under the terms of the ~~MPC Loan Agreement,~~agreement, MPC Investment makes a loan or loans to MPLX on a revolving basis as requested by MPLX and as agreed to by MPC Investment. On April 27, 2018, MPLX and MPC Investment amended and restated the MPC Loan Agreement to, among other things, increase the borrowing capacity under the MPC Loan Agreement from $500 million to $1.0 billion. In connection with the Merger, on July 31, 2019, MPLX and MPC Investment ~~entered into a second amendment to~~amended and restated the MPC Loan Agreement to increase the borrowing capacity under the MPC Loan Agreement to $1.5 billion in aggregate principal amount of all loans outstanding at any one time. The entire unpaid principal amount of the loan, together with all accrued and unpaid interest and other amounts (if any), shall become due and payable on 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 July 31, 2024. Borrowings under the MPC Loan Agreement prior to July 31, 2019 bore interest at LIBOR plus 1.50 percent while borrowings as of and after July 31, 2019 ~~will~~ bear interest at LIBOR plus 1.25 percent or such lower rate as would be applicable to such loans under the MPLX Credit ~~Agreement.~~Agreement as discussed in Note 15. Activity on the MPC Loan Agreement was as follows:


(In millions)	Nine Months Ended September 30, 2019			Year Ended December 31, 2018			Six Months Ended June 30, 2020			Year Ended December 31, 2019
Borrowings	$	6,935		$	3,962		$	2,708		$	8,540
Average interest rate of borrowings	3.640		%	3.473		%	2.733		%	3.441		%
Repayments	$	6,810		$	4,347		$	3,302		$	7,946
Outstanding balance at end of period⁽¹⁾	$	125		$	—		$	—		$	594

~~(1) Included in “Current liabilities - related parties” on the Consolidated Balance Sheets.~~


(1)	Included in “Current liabilities - related parties” on the Consolidated Balance Sheets.

Prior to the Merger, ANDX was also party to a loan agreement with MPC (“ANDX-MPC Loan Agreement”). This facility was entered into on December 21, 2018, with a borrowing capacity of $500 million. In connection with the Merger, on July 31, 2019, MPLX repaid the entire outstanding balance and terminated the ANDX-MPC Loan Agreement. Activity on the ANDX-MPC Loan Agreement prior to the Merger was as follows:

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(In millions)	Nine Months Ended September 30, 2019			Year Ended December 31, 2019
Borrowings	$	773		$	773
Average interest rate of borrowings	4.249		%	4.249		%
Repayments	$	773		$	773
Outstanding balance at end of period	$	—		$	—

Related Party Revenue

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

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 required to run the marine business. MPLX also receives management fee revenue for engineering, construction and administrative services for operating certain of its equity method investments.

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


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2019		2018		2019		2018		2020		2019		2020		2019
Service revenues - related parties
MPC	$	899	$	568	$	2,549	$	1,588	$	857	$	847	$	1,784	$	1,650
Other									—		—		1		—
Total Service revenue - related parties									857		847		1,785		1,650
Rental income - related parties
MPC	293		190		904		525		237		286		471		611
Product sales - related parties⁽¹⁾
MPC	32		18		109		35		30		36		63		77
Other income - related parties
MPC	14		11		34		31		48		10		96		20
Other	17		15		50		42		15		17		31		33
Total Other income - related parties	$	31	$	26	$	84	$	73	$	63	$	27	$	127	$	53

(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, 2019, these sales totaled $301 million and $819 million, respectively. For the three and nine months ended September 30, 2018, these sales totaled $137 million and $328 million, respectively.

(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 six months ended June 30, 2020, these sales totaled $52 million and $225 million. For the three and six months ended June 30, 2019, these sales totaled $295 million and $518 million.

Related Party Expenses

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

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


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2019		2018		2019		2018		2020		2019		2020		2019
Rental cost of sales - related parties	$	45	$	1	$	124	$	2
MPC									$	41	$	36	$	87	$	79
Purchases - related parties
MPC	297		228		878		628		276		308		547		581
Other	6		—		16		—		4		5		9		10
Total Purchase - related parties									280		313		556		591
General and administrative expenses	59		48		174		131
Total	$	407	$	277	$	1,192	$	761
MPC									$	68	$	53	$	132	$	115

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~~six months ended ~~September~~June 30, ~~2019,~~2020, these charges totaled ~~$48~~$15 million and ~~$127~~$51 million, respectively. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, these charges totaled ~~$46~~$38 million and ~~$109~~$79 million, respectively.

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 1920 for additional information) and deferred revenue on minimum volume commitments. ~~During the nine months ended September 30, 2019 and the year ended December 31, 2018, MPC did not meet its minimum committed volumes based on the agreements identified above.~~ If MPC fails to meet its minimum committed volumes, MPC will pay MPLX a deficiency payment based on the terms of the agreement. The deficiency amounts are recorded as “Current liabilities - related parties.” In many cases, MPC may then apply the amount of any such deficiency payments as a credit for volumes in excess of its minimum volume commitment in future periods under the terms of the applicable agreements. MPLX recognizes related party revenues for the deficiency payments when credits are used for volumes in excess of minimum quarterly volume commitments, where it is probable the customer 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 “Current liabilities - related parties.” In addition, capital projects MPLX is undertaking at the request of MPC are reimbursed in cash and recognized in income over the remaining term of the applicable agreements or in some cases as an equity contribution from its sponsor.

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(In millions)	September 30, 2019		December 31, 2018		June 30, 2020		December 31, 2019
Current assets - related parties
Receivables - MPC	$	623	$	542	$	547	$	621
Receivables - Other	22		9		7		22
Prepaid - MPC	6		5		11		9
Other - MPC	6		—		1		—
Lease Receivables - MPC	3		—		28		4
Total	660		556		594		656
Noncurrent assets - related parties
Long-term receivables - MPC	20		24		30		21
Right of use assets - MPC	232		—		231		232
Long-term lease receivables - MPC	44		—		395		43
Unguaranteed residual asset - MPC	6		—		20		7
Total	302		24		676		303
Current liabilities - related parties
Payables - MPC	477		360		260		911
Payables - Other	34		76		36		37
Operating lease liabilities - MPC	1		—		1		1
Deferred revenue - Minimum volume deficiencies - MPC	40		57		56		42
Deferred revenue - Project reimbursements - MPC	9		9		18		16
Deferred revenue - Other	1		—
Deferred revenue - Project reimbursements - Other					1		1
Total	562		502		372		1,008
Long-term liabilities - related parties
Long-term operating lease liabilities - MPC	231		—		230		230
Long-term deferred revenue - Project reimbursements - MPC	53		46		51		53
Long-term deferred revenue - Other	9		—
Long-term deferred revenue - Project reimbursements - Other					6		7
Total	$	293	$	46	$	287	$	290

Other Related Party Transactions

From time to time, MPLX may also sell to or purchase from related parties, assets and inventory at the lesser of average unit cost or net realizable value. Sales to ~~related parties for the nine months ended September 30, 2019~~ and ~~2018 were $1 million and $3 million, respectively. Purchases~~purchases from related parties were not material for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018 were less than $1 million and $2 million, respectively.~~2019.

6. 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. Additional MPLX common units, ~~and~~ MPLX Series B preferred units, and TexNew Mex units were issued on July 30, 2019 as a result of the merger with ANDX as discussed in Note 3. Distributions declared on these newly issued common and Series B preferred units are a reduction to income available to MPLX common unit holders due to their participation in distributions of income. ~~The classes~~

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Classes of participating securities ~~include common units, certain equity-based compensation awards, Series A preferred units and Series B preferred units~~ for the three and ~~nine~~six months ended ~~September~~June 30, 2020 and 2019 ~~and common units, certain equity-based compensation awards and Series A preferred units for the three and nine months ended September 30, 2018.~~include:



	Six Months Ended June 30,
	2020	2019
Common Units	ü	ü
Equity-based compensation awards	ü	ü
Series A preferred units	ü	ü
Series B preferred units	ü	ü

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, MPLX 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~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019 were less than 1 million.



	Three Months Ended June 30,						Six Months Ended June 30,
(In millions)	2020			2019			2020			2019
Net income/(loss) attributable to MPLX LP	$	648		$	482		$	(2,076	)	$	985
Less: Distributions declared on Series A preferred units⁽¹⁾	21			21			41			41
Distributions declared on Series B preferred units⁽¹⁾	10			21			21			21
Limited partners’ distributions declared on MPLX common units (including common units of general partner)⁽¹⁾⁽²⁾	715			692			1,443			1,215
Undistributed net loss attributable to MPLX LP	$	(98	)	$	(252	)	$	(3,581	)	$	(292	)


(1)	See Note 7 for distribution information.


(2)	The three and six months ended June 30, 2019 amounts are net of $12.5 million of waived distributions with respect to units held by MPC and its affiliates.



	Three Months Ended June 30, 2020
(In millions, except per unit data)	Limited Partners’ Common Units			Series A Preferred Units		Series B Preferred Units		Total
Basic and diluted net income attributable to MPLX LP per unit
Net income attributable to MPLX LP:
Distributions declared	$	715		$	21	$	10	$	746
Undistributed net loss attributable to MPLX LP	(98		)	—		—		(98		)
Net income attributable to MPLX LP⁽¹⁾	$	617		$	21	$	10	$	648
Weighted average units outstanding:
Basic	1,059
Diluted	1,059
Net income attributable to MPLX LP per limited partner unit:
Basic	$	0.58
Diluted	$	0.58


(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.

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Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2019 2018 2019 2018
Net income attributable to MPLX LP $ 629
$ 510
$ 1,614
$ 1,384
Less: Distributions declared on Series A preferred units⁽¹⁾
20
19
61
55
Distributions declared on Series B preferred units⁽¹⁾
10
—
31
—
Limited partners’ distributions declared on MPLX common units (including common units of general partner)⁽¹⁾⁽²⁾
704
507
1,919
1,471
Undistributed net loss attributable to MPLX LP $ (105 )
$ (16 ) $ (397 ) $ (142 )

~~(1) See Note 7 for distribution information.~~

~~(2) The three and nine months ended September 30, 2019 amounts are net of $12.5 million and $25 million of quarterly waived distributions with respect to units held by MPC and its affiliates.~~

Three Months Ended September 30, 2019
(In millions, except per unit data)
Limited Partners’
Common Units
Series A Preferred Units Series B Preferred Units Total
Basic and diluted net income attributable to MPLX LP per unit
Net income attributable to MPLX LP:
Distributions declared $ 704
$ 20
$ 10
$ 734
Undistributed net loss attributable to MPLX LP (105 ) —
—
(105 )
Net income attributable to MPLX LP⁽¹⁾
$ 599
$ 20
$ 10
$ 629
Weighted average units outstanding:
Basic⁽²⁾
974
31
—
1,005
Diluted⁽²⁾
975
31
—
1,006
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.~~

(2) The Series B preferred units and the MPLX common units issued in connection with the Merger were not outstanding during the entire three months ended September 30, 2019. See Notes 3 and 7 for additional information about the treatment of these units.

Three Months Ended September 30, 2018
(In millions, except per unit data)
Limited Partners’
Common Units
Series A Preferred Units Total
Basic and diluted net income attributable to MPLX LP per unit
Net income attributable to MPLX LP:
Distributions declared $ 507
$ 19
$ 526
Undistributed net loss attributable to MPLX LP (16 ) —
(16 )
Net income attributable to MPLX LP⁽¹⁾
$ 491
$ 19
$ 510
Weighted average units outstanding:
Basic 794
31
825
Diluted 794
31
825
Net income attributable to MPLX LP per limited partner unit:
Basic $ 0.62

Diluted $ 0.62

~~(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.~~

2217

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	Nine Months Ended September 30, 2019										Three Months Ended June 30, 2019
(In millions, except per unit data)	Limited Partners’ Common Units			Series A Preferred Units		Series B Preferred Units		Total			Limited Partners’ Common Units			Series A Preferred Units		Series B Preferred Units		Total
Basic and diluted net income attributable to MPLX LP per unit:
Basic and diluted net income attributable to MPLX LP per unit
Net income attributable to MPLX LP:
Distributions declared	$	1,919		$	61	$	31	$	2,011		$	692		$	21	$	21	$	734
Undistributed net loss attributable to MPLX LP	(397		)	—		—		(397		)	(252		)	—		—		(252		)
Net income attributable to MPLX LP⁽¹⁾	$	1,522		$	61	$	31	$	1,614		$	440		$	21	$	21	$	482
Weighted average units outstanding:
Basic⁽²⁾	855			31		—		886			794
Diluted⁽²⁾	855			31		—		886			795
Net income attributable to MPLX LP per limited partner unit:
Basic	$	1.78									$	0.56
Diluted	$	1.78									$	0.55

~~(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.~~

(2) The Series B preferred units and the MPLX common units issued in connection with the Merger were not outstanding during the entire nine months ended September 30, 2019. See Notes 3 and 7 for additional information about the treatment of these units.


(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.


(2)	The Series B preferred units and the MPLX common units issued in connection with the Merger were not outstanding during the three months ended June 30, 2019. See Notes 3 and 7 for additional information about the treatment of these units.


	Nine Months Ended September 30, 2018								Six Months Ended June 30, 2020
(In millions, except per unit data)	Limited Partners’ Common Units			Series A Preferred Units		Total			Limited Partners’ Common Units			Series A Preferred Units		Series B Preferred Units		Total
Basic and diluted net income attributable to MPLX LP per unit:
Basic and diluted net income attributable to MPLX LP per unit
Net income attributable to MPLX LP:
Distributions declared	$	1,471		$	55	$	1,526		$	1,443		$	41	$	21	$	1,505
Undistributed net loss attributable to MPLX LP	(142		)	—		(142		)	(3,581		)	—		—		(3,581		)
Net income attributable to MPLX LP⁽¹⁾	$	1,329		$	55	$	1,384
Net (loss)/income attributable to MPLX LP⁽¹⁾									$	(2,138	)	$	41	$	21	$	(2,076	)
Weighted average units outstanding:
Basic	750			31		781			1,059
Diluted	750			31		781			1,059
Net income attributable to MPLX LP per limited partner unit:
Basic	$	1.77							$	(2.02	)
Diluted	$	1.77							$	(2.02	)


(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.

~~(1) Allocation~~

Table 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.~~Contents



	Six Months Ended June 30, 2019
(In millions, except per unit data)	Limited Partners’ Common Units			Series A Preferred Units		Series B Preferred Units		Total
Basic and diluted net income attributable to MPLX LP per unit
Net income attributable to MPLX LP:
Distributions declared	$	1,215		$	41	$	21	$	1,277
Undistributed net loss attributable to MPLX LP	(292		)	—		—		(292		)
Net income attributable to MPLX LP⁽¹⁾	$	923		$	41	$	21	$	985
Weighted average units outstanding:
Basic⁽²⁾	794
Diluted⁽²⁾	795
Net income attributable to MPLX LP per limited partner unit:
Basic	$	1.16
Diluted	$	1.16


(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.


(2)	The Series B preferred units and the MPLX common units issued in connection with the Merger were not outstanding during the six months ended June 30, 2019. See Notes 3 and 7 for additional information about the treatment of these units.

7. Equity

The changes in the number of common units outstanding during the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 are summarized below:



(In units)	Common
Balance at December 31, ~~2018~~2019	~~794,089,518~~1,058,355,471
Unit-based compensation awards	~~287,019~~
~~Issuance of units in connection with the Merger~~	~~262,829,592~~
~~Conversion of Series A preferred units~~	~~1,148,330~~253,291
Balance at ~~September~~June 30, ~~2019~~2020	~~1,058,354,459~~1,058,608,762

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Merger

In connection with the Merger and as discussed in Note 3, each common unit held by ANDX’s public unitholders was converted into the right to receive 1.135 MPLX common units while ANDX common units held by certain affiliates of MPC were converted into the right to receive 1.0328 MPLX common units. This resulted in the issuance of MPLX common units of approximately 102 million units to public unitholders and approximately 161 million units to MPC ~~in connection with MPLX's acquisition of ANDX~~ on July 30, 2019. ~~Also during the quarter, certain holders of Series A preferred units exercised their rights to convert their Series A preferred units into common units as discussed in Note 8.~~

Series B Preferred Units

Prior to the Merger, ANDX ~~issued~~had outstanding 600,000 units of 6.875 percent Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units representing limited partner interests of ANDX at a price to the public of $1,000 per unit. Upon completion of the Merger, the ANDX preferred units converted to preferred units of MPLX representing substantially equivalent limited partnership interests in MPLX (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. Distributions on the Series B preferred units are payable semi-annually in arrears on the 15th day, or the first business day thereafter, of February and August of each year ~~through~~up to and including February 15, 2023. After February 15, 2023, the ~~distribution will be made~~holders of Series B preferred units are entitled to receive cumulative, quarterly distributions payable in arrears on the 15th day ~~or the first business day thereafter,~~ of February, May, August and November of each year, ~~to holders of record as of the record date, which is generally the close of business on~~or the first business day ofthereafter, based on a floating annual rate equal to the ~~month of the applicable payment date.~~three-month LIBOR plus 4.652 percent.

The changes in the Series B preferred unit balance from ~~the Merger~~December 31, 2019 through ~~September~~June 30, ~~2019~~2020 are summarized ~~below and~~below. Series B preferred units are included in the Consolidated Balance Sheets and Consolidated Statements of Equity within “Equity of Predecessor” for the period prior to the Merger and within “Series B preferred units” for the period following the Merger. ~~The Series B preferred units are recorded at fair value as~~

Table of ~~July 30, 2019.~~Contents


(In millions)	Series B Preferred Units			Series B Preferred Units
Beginning Balance at the Merger date	$	615
Balance at December 31, 2019				$	611
Net income allocated	7			21
Distributions received by Series B preferred unitholders	(21		)	(21		)
Balance at September 30, 2019	$	601
Balance at June 30, 2020				$	611

TexNew Mex Units - Prior to the Merger, MPC held 80,000 Andeavor Logistics TexNew Mex units, representing all outstanding units. At the time of the Merger, each Andeavor Logistics TexNew Mex unit was automatically converted into TexNew Mex units of MPLX with substantially the same rights and obligations as the Andeavor Logistics TexNew Mex units. The TexNew Mex units represent the right to receive quarterly distribution payments in an amount calculated using the distributable cash flow generated by a particular portion of the TexNew Mex pipeline system, in excess of a base amount and adjusted for previously agreed upon stipulations and contingencies. In the fourth quarter of 2019, distributions of less than $1 million were earned by the TexNew Mex units, which were declared in January of 2020 and paid in February 2020. Distributions of $2 million were earned by the TexNew Mex units during the three months ended June 30, 2020.

Cash distributions – In accordance with the MPLX partnership agreement, on ~~October 25, 2019~~July 28, 2020, MPLX declared a quarterly cash distribution for the ~~third~~second quarter of ~~2019,~~2020, totaling ~~$704~~$715 million, or ~~$0.6775~~$0.6875 per common ~~unit, which includes common units issued on July 30, 2019 as a result of the Merger.~~unit. This rate will also be received by Series A preferred unitholders. These distributions will be paid on ~~November~~August 14, ~~2019~~2020 to common unitholders of record on ~~November 4, 2019~~August 7, 2020. The $704 million of common unit distributions is net of $12.5 million in quarterly waived distributions by MPC. This waiver was instituted in 2017 under the terms of ANDX’s historical partnership agreement with Andeavor. The waiver will remain in effect through 2019 which is the original term of the waiver agreement.

~~Additionally, as a result of the Merger, 600,000 ANDX preferred units were converted into 600,000 preferred units of MPLX.~~ Series B preferred unitholders are entitled to receive ~~when and if declared by the board,~~ 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. MPLX made~~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 will be paid to ~~holders of the~~ Series B ~~preferred~~ unitholders on August ~~15, 2019 for approximately $21 million.~~17, 2020.

Quarterly distributions for ~~2019~~2020 and ~~2018~~2019 are summarized below:


(Per common unit)	2019		2018		2020		2019
March 31,	$	0.6575	$	0.6175	$	0.6875	$	0.6575
June 30,	0.6675		0.6275		$	0.6875	$	0.6675
September 30,	$	0.6775	$	0.6375

The allocation of total quarterly cash distributions to limited and preferred unitholders is as follows for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018.~~2019. 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.

~~Table of Contents~~


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2019		2018		2019		2018		2020		2019		2020		2019
Common and preferred unit distributions:
Common unitholders, includes common units of general partner	$	704	$	507	$	1,919	$	1,471	$	715	$	692	$	1,443	$	1,215
Series A preferred unit distributions	20		19		61		55		21		21		41		41
Series B preferred unit distributions	10		—		31		—		10		21		21		21
Total cash distributions declared	$	734	$	526	$	2,011	$	1,526	$	746	$	734	$	1,505	$	1,277

The distribution on common units for the three and ~~nine~~six months ended ~~September~~June 30, 2019 includes the impact of the issuance of approximately 102 million units issued to public unitholders and approximately 161 million units issued to MPC in connection with the Merger. Due to the timing of the closing, distributions presented in the table above ~~for the~~include second quarter ~~include~~ distributions on MPLX common units issued to former ANDX unitholders and Series B Unitholders in connection with the Merger. ~~Due to the waiver mentioned above, the~~The distributions on common units exclude $12.5 million of waived distributions for the three and six months ended ~~September~~June 30, ~~2019 and $25 million of waived distributions for the nine months ended September 30,~~ 2019. Also included in the table above is $10 million of distributions earned by the Series B preferred units for the three months ended September 30, 2019 as well as $21 million of distributions earned on the Series B units and declared and paid by MPLX during the third quarter.

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8. Series A Preferred Units

On May 13, 2016, MPLX LP ~~completed the private placement of~~issued approximately 30.8 million 6.5 percent Series A Convertible 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 business purposes.~~ The Series A preferred units rank senior to all common units and pari passu with all Series B preferred units with respect to distributions and rights upon liquidation. The holders of the Series A preferred units received cumulative quarterly distributions equal to $0.528125 per unit for each quarter prior to the second quarter of 2018. Beginning with the second quarter of 2018, the holders of the Series A preferred units are entitled to receive, when and if declared by the board, a quarterly distribution equal to the greater of $0.528125 per unit or the amount of distributions they would have received on an as converted basis. On ~~October 25, 2019~~July 28, 2020, MPLX declared a quarterly cash distribution of ~~$0.6775~~$0.6875 per common unit for the ~~third~~second quarter of ~~2019.~~2020. Holders of the Series A preferred units will receive the common unit rate in lieu of the lower $0.528125 base amount.

The holders may convert their Series A preferred units into common units at any time, in full or in part, subject to minimum conversion amounts and conditions. After the fourth anniversary of the issuance date, MPLX may convert the Series A 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 Series A 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, subject to adjustment for unit distributions, unit splits and similar transactions. The holders of the Series A preferred units are entitled to vote on an as-converted basis with the common unitholders and have certain other class voting rights with respect to any amendment to the MPLX 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 Series A preferred units to common units at the then change of control conversion rate.

~~On September 20, 2019, certain holders exercised their right to convert a total of 1.2 million Series A preferred units into common units. As a result of the transaction, approximately~~Approximately 29.6 million Series A preferred units ~~remain~~remaining outstanding as of ~~September~~June 30, ~~2019.~~

~~Table of Contents~~

2020. The changes in the redeemable preferred balance from December 31, ~~2018~~2019 through ~~September~~June 30, ~~2019~~2020 are summarized below:


(In millions)	Redeemable Series A Preferred Units			Redeemable Series A Preferred Units
Balance at December 31, 2018	$	1,004
Balance at December 31, 2019				$	968
Net income allocated	61			41
Distributions received by Series A preferred unitholders	(61		)	(41		)
Conversion of Series A preferred units to common units	(36		)
Balance at September 30, 2019	$	968
Balance at June 30, 2020				$	968

The Series A preferred units are considered redeemable securities under GAAP due to the existence of redemption provisions upon a deemed liquidation event which is outside MPLX’s control. Therefore, they are presented as temporary equity in the mezzanine section of the Consolidated Balance Sheets. The Series A preferred units have been recorded at their issuance date fair value, net of issuance costs. Income allocations increase the carrying value and declared distributions decrease the carrying value of the Series A preferred units. As the Series A 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 Series A preferred units would become redeemable.

9. Segment Information

MPLX’s chief operating decision maker is the chief executive officer (“CEO”) of its general partner. The CEO reviews MPLX’s discrete financial information, makes operating decisions, assesses financial performance and allocates resources on a type of service basis. MPLX has 2 reportable segments: L&S and G&P. Each of these segments is organized and managed based upon the nature of the products and services it offers.

L&S – transports, stores, distributes and markets crude oil, asphalt, refined petroleum products and water. Also includes an inland marine business, terminals, rail facilities, storage caverns and refining logistics.

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

Our CEO evaluates the performance of our segments using Segment Adjusted EBITDA. Amounts included in net income and excluded from Segment Adjusted EBITDA include: (i) depreciation and amortization; (ii) provision/(benefit) for income taxes; (iii) amortization of deferred financing costs; (iv) extinguishment of debt; (v) non-cash equity-based compensation; (vi) impairment expense; (vii) net interest and other financial costs; (viii) income/(loss) from equity method investments; (ix) distributions and adjustments related to equity method investments; (x) unrealized derivative gains/(losses); (xi) acquisition costs; (xii) noncontrolling interest; and (xiii) other adjustments as deemed necessary. These items are either: (i) believed to be

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non-recurring in nature; (ii) not believed to be allocable or controlled by the segment; or (iii) are not tied to the operational performance of the segment.

~~Table of Contents~~

The tables below present information about revenues and other income, capital expenditures and investments in unconsolidated affiliates as well as total assets for our reportable segments:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2019		2018		2019		2018		2020		2019⁽¹⁾		2020			2019⁽¹⁾
L&S
Service revenue	$	976	$	602	$	2,787	$	1,682	$	931	$	922	$	1,935		$	1,811
Rental income	304		191		935		526		246		296		488			631
Product related revenue	22		5		57		10		21		20		40			35
Income from equity method investments	60		43		159		123		40		54		90			99
Other income	17		12		45		36		52		16		103			28
Total segment revenues and other income⁽¹⁾	1,379		853		3,983		2,377
Segment Adjusted EBITDA⁽²⁾	766		547		1,895		1,510
Maintenance capital expenditures	57		31		128		78
Growth capital expenditures	216		78		618		325
Total segment revenues and other income⁽²⁾									1,290		1,308		2,656			2,604
Segment Adjusted EBITDA⁽³⁾									839		570		1,711			1,129
Capital expenditures									108		230		292			428
Investments in unconsolidated affiliates									74		61		128			68
G&P
Service revenue	555		422		1,627		1,154		489		544		1,025			1,072
Rental income	88		88		260		251		89		83		177			172
Product related revenue	207		311		714		831		151		231		373			507
Income from equity method investments	35		21		96		52
Income/(loss) from equity method investments									49		29		(1,185		)	61
Other income	16		17		45		45		13		15		27			29
Total segment revenues and other income⁽¹⁾	901		859		2,742		2,333
Segment Adjusted EBITDA⁽²⁾	399		390		1,120		1,054
Maintenance capital expenditures	18		9		46		20
Growth capital expenditures	$	302	$	380	$	861	$	1,057
Total segment revenues and other (loss)/income⁽²⁾									791		902		417			1,841
Segment Adjusted EBITDA⁽³⁾									388		350		810			721
Capital expenditures									110		326		244			632
Investments in unconsolidated affiliates									$	57	$	127	$	94		$	255

(1) Within the total segment revenues and other income amounts presented above, third party revenues for the L&S segment were $182 million and $498 million for the three and nine months ended September 30, 2019, respectively, and $82 million and $227 million for the three and nine months ended September 30, 2018, respectively. Third party revenues for the G&P segment were $843 million and $2,581 million for the three and nine months ended September 30, 2019, respectively, and $828 million and $2,262 million for the three and nine months ended September 30, 2018, respectively.

~~(2) See below for the reconciliation from Segment Adjusted EBITDA to net income.~~


(1)	Financial information for the three and six months ended June 30, 2019 has been retrospectively adjusted for the acquisition of ANDX. See Notes 1 and 3.

(2)

Within the total segment revenues and other income amounts presented above, third party revenues for the L&S segment were $146 million and $304 million for the three and six months ended June 30, 2020, respectively, and $163 million and $316 million for the three and six months ended June 30, 2019, respectively. Third party revenues for the G&P segment were $748 million and $323 million for the three and six months ended June 30, 2020, respectively, and $851 million and $1,738 million for the three and six months ended June 30, 2019, respectively.


(3)	See below for the reconciliation from Segment Adjusted EBITDA to net income.


(In millions)	September 30, 2019		December 31, 2018		June 30, 2020		December 31, 2019
Segment assets
Cash and cash equivalents	$	41	$	77	$	67	$	15
L&S	20,579		19,963		21,308		20,810
G&P	20,661		19,285		15,647		19,605
Total assets	$	41,281	$	39,325	$	37,022	$	40,430

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The table below provides a reconciliation between net (loss)/income and Segment Adjusted EBITDA.


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
(In millions)	2019			2018			2019			2018			2020			2019⁽¹⁾			2020			2019⁽¹⁾
Reconciliation to Net income:
Reconciliation to Net (loss)/income:
L&S Segment Adjusted EBITDA	$	766		$	547		$	1,895		$	1,510		$	839		$	570		$	1,711		$	1,129
G&P Segment Adjusted EBITDA	399			390			1,120			1,054			388			350			810			721
Total reportable segments	1,165			937			3,015			2,564			1,227			920			2,521			1,850
Depreciation and amortization⁽¹⁾⁽²⁾	(302		)	(201		)	(916		)	(565		)	(321		)	(313		)	(646		)	(614		)
Provision for income taxes	(4		)	(3		)	(2		)	(8		)
Benefit for income taxes													—			1			—			2
Amortization of deferred financing costs	(10		)	(14		)	(29		)	(45		)	(15		)	(12		)	(29		)	(19		)
Non-cash equity-based compensation	(5		)	(6		)	(17		)	(15		)	(3		)	(5		)	(8		)	(12		)
Impairment expense													—			—			(2,165		)	—
Net interest and other financial costs	(223		)	(139		)	(657		)	(389		)	(208		)	(217		)	(424		)	(434		)
Income from equity method investments	95			64			255			175
Income/(loss) from equity method investments													89			83			(1,095		)	160
Distributions/adjustments related to equity method investments	(145		)	(112		)	(399		)	(314		)	(115		)	(132		)	(239		)	(254		)
Unrealized derivative gains/(losses)⁽²⁾	11			(17		)	7			(18		)
Unrealized derivative (losses)/gains⁽³⁾													(6		)	—			9			(4		)
Acquisition costs	(9		)	—			(14		)	(3		)	—			(4		)	—			(5		)
Other	(1		)	—			(1		)	—			(1		)	—			(2		)	—
Adjusted EBITDA attributable to noncontrolling interests	9			7			23			13			8			7			17			14
Adjusted EBITDA attributable to Predecessor⁽³⁾	108			—			770			—
Net income	$	689		$	516		$	2,035		$	1,395
Adjusted EBITDA attributable to Predecessor⁽⁴⁾													—			329			—			662
Net (loss)/income													$	655		$	657		$	(2,061	)	$	1,346

(1) Depreciation and amortization attributable to L&S was $113 million and $373 million for the three and nine months ended September 30, 2019, respectively, and $62 million and $171 million for the three and nine months ended September 30, 2018, respectively. Depreciation and amortization attributable to G&P was $189 million and $543 million for the three and nine months ended September 30, 2019, respectively, and $139 million and $394 million for the three and nine months ended September 30, 2018, 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) The adjusted EBITDA adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP prior to the Merger.~~


(1)	Financial information for the three and six months ended June 30, 2019 has been retrospectively adjusted for the acquisition of ANDX. See Notes 1 and 3.

(2)

Depreciation and amortization attributable to L&S was $138 million and $276 million for the three and six months ended June 30, 2020, respectively, and $134 million and $260 million for the three and six months ended June 30, 2019, respectively. Depreciation and amortization attributable to G&P was $183 million and $370 million for the three and six months ended June 30, 2020, respectively, and $179 million and $354 million for the three and six months ended June 30, 2019, respectively.

(3)

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.


(4)	The adjusted EBITDA adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP prior to the Merger.

10. Inventories

Inventories consist of the following:


(In millions)	September 30, 2019		December 31, 2018		June 30, 2020		December 31, 2019
NGLs	$	4	$	9	$	2	$	5
Line fill	8		9		8		10
Spare parts, materials and supplies	92		80		105		95
Total inventories	$	104	$	98	$	115	$	110

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11. Property, Plant and Equipment

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

(In millions) September 30, 2019 December 31, 2018
Natural gas gathering and NGL transportation pipelines and facilities $ 6,909
$ 6,349
Processing, fractionation and storage facilities 6,113
6,045
Pipelines and related assets 5,058
5,111
Barges and towing vessels 675
621
Terminals and related assets 2,422
2,757
Refinery related assets 1,398
1,447
Land, building, office equipment and other 2,324
1,562
Construction-in-progress 1,429
1,321
Total 26,328
25,213
Less accumulated depreciation 4,436
3,688
Property, plant and equipment, net $ 21,892
$ 21,525



(In millions)	Estimated Useful Lives	June 30, 2020		December 31, 2019
L&S
Pipelines	2-51 years	$	5,719	$	5,572
Refining Logistics	13-40 years	2,324		2,870
Terminals	4-40 years	1,281		1,109
Marine	15-20 years	960		906
Land, building and other	1-61 years	1,834		1,817
Construction-in progress		520		660
Total L&S property, plant and equipment		12,638		12,934
G&P
Gathering and transportation	5-40 years	7,374		7,159
Processing and fractionation	15-40 years	5,923		5,545
Land, building and other	3-40 years	489		484
Construction-in-progress		368		745
Total G&P property, plant and equipment		14,154		13,933
Total property, plant and equipment		26,792		26,867
Less accumulated depreciation⁽¹⁾		5,034		4,722
Property, plant and equipment, net		$	21,758	$	22,145


(1)	The June 30, 2020 balance includes property, plant and equipment impairment charges recorded during the first quarter of 2020 as discussed below.

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.

No impairment triggers were identified in the second quarter of 2020; however, during the first quarter of 2020, we did identify 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 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. Fair value of the assets was determined using a combination of an income and cost approach. The income approach utilized significant assumptions including management’s best estimates of the expected future cash flows, the estimated useful life of the asset group and discount rate. The cost approach utilized assumptions for the current replacement costs of similar assets adjusted for estimated depreciation and deterioration of the existing equipment and economic obsolescence. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of our impairment analysis will prove to be an accurate prediction of the future. The fair value measurements for the asset group fair values represent Level 3 measurements.

12. Goodwill and Intangibles

Goodwill

MPLX annually evaluates goodwill for impairment as of November 30, as well as whenever events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit with goodwill is less than its carrying amount.

There were no events or changes in circumstances noted in the second quarter of 2020 which would indicate it is more likely than not that the fair value of our reporting units with goodwill is less than their carrying amount. During the first quarter of 2020, we determined that an interim impairment analysis of the goodwill recorded was necessary 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. After performing our evaluations related to the interim impairment of goodwill during the first quarter of 2020, 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 has reduced production growth forecasts from our producer customers. This resulted in goodwill totaling approximately $7.7 billion as of March 31, 2020 within 4 reporting units. The fair value of the remaining reporting units with goodwill were in excess of their carrying value by percentages ranging from 8.5 percent to 270.0 percent. The reporting unit whose fair value exceeded its carrying amount by 8.5 percent, our Crude Gathering reporting unit, had goodwill totaling $1.1 billion at March 31, 2020. The operations which make up this reporting unit were acquired through the merger with ANDX. MPC accounted for its October 1, 2018 acquisition of Andeavor (including acquiring control of ANDX), using the acquisition method of accounting, which required Andeavor assets and liabilities to be recorded by MPC at the acquisition date fair value. The Merger was closed on July 30, 2019 and has been treated as a common control transaction, which required the recognition of assets acquired and liabilities assumed using MPC’s historical carrying value. As such, given the short amount of time from when fair value was established to the date of the impairment test, the amount by which the fair value exceeded the carrying value within this reporting unit was not unexpected.

Our reporting units are one level below our operating segments and are determined based on the way in which segment management operates and reviews each operating segment. The fair value of our 6 reporting units was determined based on applying both a discounted cash flow or income approach as well as a market approach. The discounted cash flow fair value estimate is based on known or knowable information at the measurement date. The significant assumptions that were used to develop the estimates of the fair values under the discounted cash flow method included management’s best estimates of the expected future results and discount rate, which ranged from 9.5 percent to 11.5 percent. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the interim goodwill impairment test will prove to be an accurate prediction of the future. The fair value measurements for the individual reporting units represent Level 3 measurements.

After performing our evaluations related to the impairment of goodwill during the fiscal year ending December 31, 2019, we recorded an impairment of $1,197 million within the Western G&P reporting unit. The remainder of the reporting units’ fair values were in excess of their carrying values. The impairment was primarily driven by updated guidance related to the slowing of drilling activity, which has reduced production growth forecasts from our producer customers. This resulted in goodwill totaling approximately $9.5 billion as of December 31, 2019, with all but 1 of our 6 reporting units having goodwill.

The changes in carrying amount of goodwill were as follows:



(In millions)	L&S		G&P			Total
Gross goodwill as of December 31, 2018	$	7,234	$	2,912		$	10,146
Accumulated impairment losses	—		(130		)	(130		)
Balance as of December 31, 2018	7,234		2,782			10,016
Impairment losses	—		(1,197		)	(1,197		)
Acquisitions	488		229			717
Balance as of December 31, 2019	7,722		1,814			9,536
Impairment losses	—		(1,814		)	(1,814		)
Balance as of June 30, 2020	7,722		—			7,722

Gross goodwill as of June 30, 2020	7,722		3,141			10,863
Accumulated impairment losses	—		(3,141		)	(3,141		)
Balance as of June 30, 2020	$	7,722	$	—		$	7,722

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.

MPLX’s remaining intangible assets are comprised of customer contracts and relationships. Gross intangible assets with accumulated amortization as of June 30, 2020 and December 31, 2019 is shown below:



		June 30, 2020							December 31, 2019
(In millions)	Useful Life	Gross		Accumulated Amortization⁽¹⁾⁽²⁾			Net		Gross		Accumulated Amortization			Net
L&S	6 - 8 years	$	283	$	(63	)	$	220	$	283	$	(45	)	$	238
G&P	6 - 25 years	1,288		(485		)	803		1,288		(256		)	1,032
		$	1,571	$	(548	)	$	1,023	$	1,571	$	(301	)	$	1,270


(1)	Amortization expense attributable to the G&P and L&S segments for the six months ended June 30, 2020 was $52 million and $18 million, respectively.


(2)	Impairment charge of $177 million is included within the G&P accumulated amortization.

Estimated future amortization expense related to the intangible assets at June 30, 2020 is as follows:



(In millions)
2020	$	64
2021	128
2022	128
2023	128
2024	124
Thereafter	451
Total	$	1,023

~~12.~~13. Fair Value Measurements

Fair Values – Recurring

Fair value measurements and disclosures relate primarily to MPLX’s derivative positions as discussed in Note ~~13.~~14. The following table presents the financial instruments carried at fair value on a recurring basis as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~2019 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, 2019					December 31, 2018					June 30, 2020					December 31, 2019
(In millions)	Assets		Liabilities			Assets		Liabilities			Assets		Liabilities			Assets		Liabilities
Significant unobservable inputs (Level 3)
Embedded derivatives in commodity contracts	$	—	$	(54	)	$	—	$	(61	)	$	—	$	(51	)	$	—	$	(60	)
Total carrying value on Consolidated Balance Sheets	$	—	$	(54	)	$	—	$	(61	)	$	—	$	(51	)	$	—	$	(60	)

Level 3 instruments include all NGL transactions and embedded derivatives 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 ~~$0.41~~$0.38 to ~~$1.07~~$0.92 per gallon with a weighted average of $0.53 per gallon per the current term of the embedded derivative and (2) the probability of renewal of 93100 percent for the first five-year term and ~~82.5 percent for the~~

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second five-year term of the gas purchase commitment and related keep-whole processing ~~agreement.~~agreement, respectively. Increases or decreases in the fractionation spread result in an increase or decrease in the fair value of the embedded derivative liability, respectively. ~~An increase in the probability of renewal would result in an increase in the fair value of the related embedded derivative liability.~~ Beyond the embedded derivative discussed above, we had no outstanding commodity contracts as of ~~September~~June 30, ~~2019~~2020 or December 31, ~~2018.~~2019.

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 June 30, 2020					Three Months Ended June 30, 2019
(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	$	—	$	(45	)	$	—	$	(65	)
Total (losses)/gains (realized and unrealized) included in earnings⁽¹⁾	—		(7		)	—		(1		)
Settlements	—		1			—		1
Fair value at end of period	—		(51		)	—		(65		)
The amount of total (losses)/gains for the period included in earnings attributable to the change in unrealized gains/(losses) relating to liabilities still held at end of period	$	—	$	(6	)	$	—	$	(2	)

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Three Months Ended September 30, 2019 Three Months Ended September 30, 2018
(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 $ —
$ (65 ) $ (2 ) $ (66 )
Total gains/(losses) (realized and unrealized) included in earnings⁽¹⁾
—
9
(1 ) (19 )
Settlements —
2
1
3
Fair value at end of period —
(54 ) (2 ) (82 )
The amount of total gains/(losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to liabilities still held at end of period $ —
$ 9
$ (2 ) $ (19 )

~~(1) Gains and losses on commodity derivative contracts classified as Level 3 are recorded in “Product sales”~~on the Consolidated Statements of Income. Gains and losses on derivatives embedded in commodity contracts are recorded in “Purchased product costs” and “Cost of revenues” on the Consolidated Statements of Income.


	Nine Months Ended September 30, 2019					Nine Months Ended September 30, 2018						Six Months Ended June 30, 2020					Six Months Ended June 30, 2019
(In millions)	Commodity Derivative Contracts (net)		Embedded Derivatives in Commodity Contracts (net)			Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)			Commodity Derivative Contracts (net)		Embedded Derivatives in Commodity Contracts (net)			Commodity Derivative Contracts (net)		Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	—	$	(61	)	$	(2	)	$	(64	)	$	—	$	(60	)	$	—	$	(61	)
Total gains/(losses) (realized and unrealized) included in earnings⁽¹⁾	—		2			(2		)	(27		)	—		7			—		(7		)
Settlements	—		5			2			9			—		2			—		3
Fair value at end of period	—		(54		)	(2		)	(82		)	—		(51		)	—		(65		)
The amount of total gains/(losses) for the period included in earnings attributable to the change in unrealized gains/(losses) relating to liabilities still held at end of period	$	—	$	5		$	(1	)	$	(21	)	$	—	$	7		$	—	$	(5	)


(1)	~~(1)~~ Gains and losses on commodity derivative contracts classified as Level 3 are recorded in “Product sales” on the Consolidated Statements of Income. Gains and losses on derivatives embedded in commodity contracts are recorded in “Purchased product costs” and “Cost of revenues” 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 long-term 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, 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)~~14).

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


	September 30, 2019				December 31, 2018				June 30, 2020				December 31, 2019
(In millions)	Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value
Long-term debt	$	21,290	$	19,789	$	18,070	$	18,511	$	21,919	$	20,646	$	21,054	$	19,800
SMR liability	$	93	$	82	$	92	$	86	$	88	$	78	$	90	$	80

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~~13.~~14. Derivative Financial Instruments

As of ~~September~~June 30, ~~2019,~~2020, MPLX had no outstanding commodity contracts beyond the embedded derivative discussed below.

Embedded Derivative - MPLX has a natural gas purchase commitment embedded in a keep-whole processing agreement with a producer customer in the Southern Appalachian region expiring in December 2022. The customer has the unilateral option to extend the agreement for 2 consecutive five-year terms through December 2032. For accounting purposes, the natural gas purchase commitment and the term extending options have been aggregated into a single compound embedded derivative. The probability of the customer exercising its options is determined based on assumptions about the customer’s potential business strategy decision points that may exist at the time they would elect whether to renew the contract. The changes in fair value of this compound embedded derivative are based on the difference between the contractual and index pricing 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 product costs” on the Consolidated Statements of Income. As of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the estimated fair value of this contract was a liability of ~~$54~~$51 million and ~~$61~~$60 million, respectively.

Certain derivative positions are subject to master netting agreements, therefore, MPLX has elected to offset derivative assets and liabilities that are legally permissible to be offset. As of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, there were no derivative assets or liabilities that were offset on the Consolidated Balance Sheets. The impact of MPLX’s derivative instruments on its Consolidated Balance Sheets is summarized below:


(In millions)	September 30, 2019					December 31, 2018					June 30, 2020					December 31, 2019
Derivative contracts not designated as hedging instruments and their balance sheet location	Asset		Liability			Asset		Liability			Asset		Liability			Asset		Liability
Commodity contracts⁽¹⁾
Other current assets / Other current liabilities	$	—	$	(5	)	$	—	$	(7	)	$	—	$	(3	)	$	—	$	(5	)
Other noncurrent assets / Deferred credits and other liabilities	—		(49		)	—		(54		)	—		(48		)	—		(55		)
Total	$	—	$	(54	)	$	—	$	(61	)	$	—	$	(51	)	$	—	$	(60	)

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


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

For further information regarding the fair value measurement of derivative instruments, including the effect of master netting arrangements or collateral, see Note ~~12.~~13. There were no material changes to MPLX’s policy regarding the accounting for Level 2 and Level 3 instruments as previously disclosed in MPLX’s Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. MPLX does not designate any of its commodity derivative positions as hedges for accounting purposes.

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The impact of MPLX’s derivative contracts not designated as hedging instruments and the location of gains and losses recognized on the Consolidated Statements of Income is summarized below:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
(In millions)	2019			2018			2019			2018			2020			2019			2020			2019
Product sales
Purchased product costs
Realized (loss)/gain	$	—		$	(1	)	$	—		$	(2	)	$	(1	)	$	(1	)	$	(2	)	$	(3	)
Unrealized (loss)/gain	—			(1		)	—			—			(6		)	—			9			(4		)
Product sales derivative (loss)/gain	—			(2		)	—			(2		)
Purchased product costs
Realized (loss)/gain	(2		)	(4		)	(5		)	(10		)
Unrealized gain/(loss)	11			(16		)	7			(18		)
Purchased product costs derivative (loss)/gain	9			(20		)	2			(28		)	(7		)	(1		)	7			(7		)
Cost of revenues
Realized (loss)/gain	—			—			—			—
Unrealized (loss)/gain	—			—			—			—
Cost of revenues derivative (loss)/gain	—			—			—			—
Total derivative gain/(loss)	$	9		$	(22	)	$	2		$	(30	)

Total derivative (loss)/gain													$	(7	)	$	(1	)	$	7		$	(7	)

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~~14.~~15. Debt

MPLX’s outstanding borrowings consist of the following:

(In millions) September 30, 2019 December 31, 2018
MPLX LP:
Bank revolving credit facility due 2024 $ —
$ —
Term loan facility due 2021 500
—
Floating rate senior notes due September 2021 1,000
—
Floating rate senior notes due September 2022 1,000
—
6.250% senior notes due October 2022 266
—
3.500% senior notes due December 2022 486
—
3.375% senior notes due March 2023 500
500
4.500% senior notes due July 2023 989
989
6.375% senior notes due May 2024 381
—
4.875% senior notes due December 2024 1,149
1,149
5.250% senior notes due January 2025 708
—
4.000% senior notes due February 2025 500
500
4.875% senior notes due June 2025 1,189
1,189
4.125% senior notes due March 2027 1,250
1,250
4.250% senior notes due December 2027 732
—
4.000% senior notes due March 2028 1,250
1,250
4.800% senior notes due February 2029 750
750
4.500% senior notes due April 2038 1,750
1,750
5.200% senior notes due March 2047 1,000
1,000
5.200% senior notes due December 2047 487
—
4.700% senior notes due April 2048 1,500
1,500
5.500% senior notes due February 2049 1,500
1,500
4.900% senior notes due April 2058 500
500
Consolidated subsidiaries:
MarkWest - 4.500% - 4.875% senior notes, due 2023-2025 23
23
ANDX - 3.500% - 6.375% senior notes, due 2019-2047 690
3,750
ANDX credit facilities —
1,245
Financing lease obligations⁽¹⁾
20
21
Total 20,120
18,866
Unamortized debt issuance costs (109 ) (97 )
Unamortized discount/premium (311 ) (334 )
Amounts due within one year (510 ) (513 )
Total long-term debt due after one year $ 19,190
$ 17,922



(In millions)	June 30, 2020			December 31, 2019
MPLX LP:
Bank revolving credit facility	$	825		$	—
Term loan facility	1,000			1,000
Floating rate senior notes	2,000			2,000
Fixed rate senior notes	16,887			16,887
Consolidated subsidiaries:
MarkWest	23			23
ANDX	190			190
Financing lease obligations⁽¹⁾	13			19
Total	20,938			20,119
Unamortized debt issuance costs	(100		)	(106		)
Unamortized discount/premium	(279		)	(300		)
Amounts due within one year	(3		)	(9		)
Total long-term debt due after one year	$	20,556		$	19,704

(1) See Note 1920 for lease information.

Credit Agreement

Effective July 30, 2019, in connection with the closing of the Merger, MPLX amended and restated its existing revolving credit facility (the “MPLX Credit Agreement”) to, among other things, increase borrowing capacity to up to $3.5 billion and extend its term from July 2022 to July 2024. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, MPLX borrowed ~~$5,310 million~~$2.5 billion under the MPLX Credit Agreement, at an average interest rate of ~~3.548~~1.525 percent, and repaid ~~$5,310 million~~$1.675 billion. At ~~September~~June 30, ~~2019,~~2020, MPLX had 0$825 million in outstanding borrowings and $3less than $1 million in letters of credit outstanding under the MPLX Credit Agreement, resulting in total availability of ~~$3.497~~$2.675 billion, or ~~99.9~~76.4 percent of the borrowing capacity.

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Prior to the Merger, ANDX had revolving credit facilities (the “ANDX credit facilities”) totaling $2.1 billion in borrowing capacity which were set to mature January 29, 2021. The ANDX credit facilities were terminated upon closing of the Merger and repaid with borrowings under the MPLX revolving credit facility. During the nine months ended September 30, 2019, there were borrowings of $864 million under the ANDX credit facilities, at an average interest rate of 4.129 percent, and repayments of $2.1 billion.

Term Loan Agreement

On September 26, 2019, MPLX entered into a Term Loan Agreement which provides for a committed term loan facility for up to an aggregate of $1 billion available to be drawn in up to four separate borrowings, subject to the satisfaction or waiver of certain customary conditions. If not fully utilized, the term loan commitments expire 90 days after September 26, 2019.billion. Borrowings under the Term Loan Agreement bear interest, at MPLX’s election, at either (i) the Adjusted LIBO Rate (as defined in the Term Loan Agreement) plus a margin ranging from 75.0 basis points to 100.0 basis points per annum, depending on MPLX’s credit ratings, or (ii) the Alternate Base Rate (as defined in the Term Loan Agreement). ~~The proceeds from borrowings under the Term Loan Agreement are to be used to fund the repayment of MPLX’s existing indebtedness and/or for general business purposes.~~ Amounts borrowed under the Term Loan Agreement will be due and payable on September 26, 2021. As of ~~September~~June 30, ~~2019,~~2020, MPLX had ~~drawn $500 million~~$1.0 billion outstanding on the term loan at an average interest rate of ~~2.795~~1.665 percent.

~~The Term Loan Agreement contains representations and warranties, affirmative and negative covenants and events~~

Table of default that we consider to be customary for an agreement of this type and are substantially similar to those contained in the MPLX Credit Agreement, including a covenant that requires MPLX’s ratio of Consolidated Total Debt to Consolidated EBITDA (as both terms are defined in the Term Loan Agreement) for the 4 prior fiscal quarters not to exceed 5.0 to 1.0 as of the last day of each fiscal quarter (or during the six-month period following certain acquisitions, 5.5 to 1.0). Consolidated EBITDA is subject to adjustments for certain acquisitions completed and capital projects undertaken during the relevant period.Contents

Floating Rate Senior Notes

On September 9, 2019, MPLX issued $2.0 billion aggregate principal amount of floating rate senior notes in a public offering, consisting of $1.0 billion aggregate principal amount of notes due September 2021 and $1.0 billion aggregate principal amount of notes due September 2022 (collectively, the “Floating Rate Senior Notes”). The Floating Rate Senior Notes were offered at a price to the public of 100 percent of par. The ~~proceeds were used to repay MPLX’s existing indebtedness and/~~Floating Rate Senior Notes are callable, in whole or ~~for general business purposes.~~in part, at par plus accrued and unpaid interest at any time on or after September 10, 2020. Interest on the Floating Rate Senior Notes is payable quarterly in March, June, September and December, commencing on December 9, 2019. The interest rate applicable to the floating rate senior notes due September 2021 is LIBOR plus 0.9 percent per annum. The interest rate applicable to the floating rate senior notes due September 2022 is LIBOR plus 1.1 percent per annum.

Fixed Rate Senior Notes

~~In connection with the Merger, MPLX assumed ANDX’s outstanding~~MPLX’s senior notes, ~~which had an aggregate principal amount~~including those issued by consolidated subsidiaries, consist of ~~$3.75 billion,~~various series of senior notes expiring between 2022 and 2058 with interest rates ranging from ~~3.5~~3.375 percent to 6.375 percent and maturity dates ranging from 2019 to 2047. On September 23, 2019, approximately $3.06 billion aggregate principal amount of ANDX’s outstanding senior notes were exchanged for an aggregate principal amount of approximately $3.06 billion new unsecured senior notes (the “Exchange Notes”) issued by MPLX in an exchange offer and consent solicitation undertaken by MPLX, leaving approximately $690 million aggregate principal of outstanding senior notes held by ANDX. Of this, $500 million is related to 5.5 percent unsecured senior notes due 2019. The principal amount of $500 million and accrued interest of $13.75 million was paid on October 15, 2019 using proceeds from the Floating Rate Senior Notes and borrowings under the Term Loan Agreement discussed above and includes interest through the payoff date.

The Exchange Notes consist of $266 million in aggregate principal amount of 6.25 percent unsecured senior notes due October 2022, $486 million in aggregate principal amount of 3.5 percent unsecured senior notes due December 2022, $381 million in aggregate principal amount of 6.375 percent unsecured senior notes due May 2024, $708 million in aggregate principal amount of 5.25 percent unsecured senior notes due January 2025, $732 million in aggregate principal amount of 4.25 percent unsecured senior notes due December 2027 and $487 million in aggregate principal amount of 5.2 percent unsecured senior notes due December 2047. Interest on each series of Exchange Notes is payable semi-annually in arrears according to the table below.

~~Table of Contents~~



~~Senior Notes~~	~~Interest payable semi-annually in arrears~~
~~6.250% senior notes due October 2022~~	~~April 15~~^th ~~and October 15~~^th
~~3.500% senior notes due December 2022~~	~~June 1~~^st ~~and December 1~~^st
~~6.375% senior notes due May 2024~~	~~May 1~~^st ~~and November 1~~^st
~~5.250% senior notes due January 2025~~	~~January 15~~^th ~~and July 15~~^th
~~4.250% senior notes due December 2027~~	~~June 1~~^st ~~and December 1~~^st
~~5.200% senior notes due December 2047~~	~~June 1~~^st ~~and December 1~~^st

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

On November 15, 2018, MPLX issued $2.25 billion aggregate principal amount of senior notes in a public offering, consisting of $750 million aggregate principal amount of 4.8 percent unsecured senior notes due February 2029 and $1.5 billion aggregate principal amount of 5.5 percent unsecured senior notes due February 2049 (collectively, the “November 2018 New Senior Notes”). The November 2018 New Senior Notes were offered at a price to the public of 99.432 percent and 98.031 percent of par, respectively. The proceeds were used to repay outstanding borrowings under the MPLX Credit Agreement and the MPC Loan Agreement and to redeem all $750 million of its 5.5 percent senior notes due February 2023, as well as for general business purposes. Interest on each series of the November 2018 New Senior Notes is payable semi-annually in arrears, commencing on February 15, 2019.

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

~~Table of Contents~~

~~15.~~16. Revenue

Disaggregation of Revenue

The following tables represent a disaggregation of revenue for each reportable segment for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018:~~2019:


	Three Months Ended September 30, 2019						Three Months Ended June 30, 2020
(In millions)	L&S		G&P		Total		L&S		G&P		Total
Revenues and other income:
Service revenue	$	95	$	537	$	632	$	77	$	486	$	563
Service revenue - related parties	881		18		899		854		3		857
Service revenue - product related	—		26		26		—		22		22
Product sales⁽¹⁾	14		157		171		17		103		120
Product sales - related parties	8		24		32		4		26		30
Total revenues from contracts with customers	$	998	$	762	1,760		$	952	$	640	1,592
Non-ASC 606 revenue⁽²⁾⁽¹⁾					520						489
Total revenues and other income					$	2,280					$	2,081



	Three Months Ended June 30, 2019⁽²⁾
(In millions)	L&S		G&P		Total
Revenues and other income:
Service revenue	$	79	$	540	$	619
Service revenue - related parties	843		4		847
Service revenue - product related	—		26		26
Product sales	15		174		189
Product sales - related parties	5		31		36
Total revenues from contracts with customers	$	942	$	775	1,717
Non-ASC 606 revenue⁽¹⁾					493
Total revenues and other income					$	2,210

Three Months Ended September 30, 2018
(In millions) L&S G&P Total
Revenues and other income:
Service revenue $ 34
$ 422
$ 456
Service revenue - related parties 568
—
568
Service revenue - product related —
59
59
Product sales⁽¹⁾
3
237
240
Product sales - related parties 2
16
18
Total revenues from contracts with customers $ 607
$ 734
1,341
Non-ASC 606 revenue⁽²⁾
371
Total revenues and other income $ 1,712

Nine Months Ended September 30, 2019
(In millions) L&S G&P Total
Revenues and other income:
Service revenue $ 260
$ 1,605
$ 1,865
Service revenue - related parties 2,527
22
2,549
Service revenue - product related —
86
86
Product sales⁽¹⁾
40
536
576
Product sales - related parties 17
92
109
Total revenues from contracts with customers $ 2,844
$ 2,341
5,185
Non-ASC 606 revenue⁽²⁾
1,540
Total revenues and other income $ 6,725

3630

Table of Contents

Nine Months Ended September 30, 2018
(In millions) L&S G&P Total
Revenues and other income:
Service revenue $ 94
$ 1,154
$ 1,248
Service revenue - related parties 1,588
—
1,588
Service revenue - product related —
154
154
Product sales⁽¹⁾
5
649
654
Product sales - related parties 5
30
35
Total revenues from contracts with customers $ 1,692
$ 1,987
3,679
Non-ASC 606 revenue⁽²⁾
1,031
Total revenues and other income $ 4,710

(1) G&P “Product sales” for the three and nine months ended September 30, 2018 includes approximately $1 million and $2 million of revenue related to derivative gains and losses and mark-to-market adjustments, respectively. There were 0 adjustments for the three and nine months ended September 30, 2019.



	Six Months Ended June 30, 2020
(In millions)	L&S		G&P		Total
Revenues and other income:
Service revenue	$	161	$	1,014	$	1,175
Service revenue - related parties	1,774		11		1,785
Service revenue - product related	—		61		61
Product sales	32		257		289
Product sales - related parties	8		55		63
Total revenues from contracts with customers	$	1,975	$	1,398	3,373
Non-ASC 606 loss⁽¹⁾					(300		)
Total revenues and other income					$	3,073

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



	Six Months Ended June 30, 2019⁽²⁾
(In millions)	L&S		G&P		Total
Revenues and other income:
Service revenue	$	165	$	1,068	$	1,233
Service revenue - related parties	1,646		4		1,650
Service revenue - product related	—		60		60
Product sales	26		379		405
Product sales - related parties	9		68		77
Total revenues from contracts with customers	$	1,846	$	1,579	3,425
Non-ASC 606 revenue⁽¹⁾					1,020
Total revenues and other income					$	4,445


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


(2)	Financial information for the three and six months ended June 30, 2019 has been retrospectively adjusted for the acquisition of ANDX. See Notes 1 and 3.

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 or for deficiency payments associated with minimum volume commitments which have not been billed to customers. Contract assets are generally classified as current and included in “Other current assets” on the Consolidated Balance Sheets.

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

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

Table of Contents

The ~~table~~tables below ~~reflects~~reflect the changes in our contract balances for the ~~nine-month period~~six-month periods ended ~~September~~June 30, 2020 and 2019:


(In millions)	Balance at December 31, 2018⁽¹⁾		Additions/ (Deletions)			Revenue Recognized⁽²⁾			Balance at September 30, 2019		Balance at December 31, 2019⁽¹⁾		Additions/ (Deletions)			Revenue Recognized⁽²⁾			Balance at June 30, 2020
Contract assets	$	36	$	(6	)	$	(2	)	$	28	$	39	$	(20	)	$	(1	)	$	18
Deferred revenue	13		11			(4		)	20		23		8			(5		)	26
Deferred revenue - related parties	65		34			(50		)	49		53		48			(29		)	72
Long-term deferred revenue	56		26			—			82		90		11			—			101
Long-term deferred revenue - related parties	$	52	$	5		$	—		$	57	$	55	$	(2	)	$	—		$	53

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

~~(2) NaN significant revenue was recognized related to past performance obligations in the current period.~~



(In millions)	Balance at December 31, 2018⁽¹⁾		Additions/ (Deletions)⁽³⁾			Revenue Recognized⁽²⁾⁽³⁾			Balance at June 30, 2019⁽³⁾
Contract assets	$	36	$	(8	)	$	(1	)	$	27
Deferred revenue	13		4			(3		)	14
Deferred revenue - related parties	65		18			(30		)	53
Long-term deferred revenue	56		14			—			70
Long-term deferred revenue - related parties	$	52	$	(2	)	$	—		$	50


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


(2)	NaN significant revenue was recognized related to past performance obligations in the current periods.


(3)	Financial information for the six months ended June 30, 2019 has been retrospectively adjusted for the acquisition of ANDX. See Notes 1 and 3.

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.

~~Table of Contents~~

As of ~~September~~June 30, ~~2019,~~2020, the amounts allocated to contract assets and contract liabilities on the Consolidated Balance Sheets are ~~$207~~$250 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 2531 years. Further, MPLX does not disclose variable consideration due to volume variability in the table below.


(In millions)
2019	$	408
2020	1,620		$	938
2021	1,601		1,790
2022	1,567		1,759
2023 and thereafter	6,581
2023			1,673
2024 and thereafter			5,915
Total revenue on remaining performance obligations^(1),(2),(3)	$	11,777	$	12,075

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

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

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


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


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


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

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

one year or less.

~~16.~~

Table of Contents

17. Supplemental Cash Flow Information

(In millions) September 30, 2019 December 31, 2018
Cash and cash equivalents $ 41
$ 77
Restricted cash⁽¹⁾
—
8
Cash, cash equivalents and restricted cash $ 41
$ 85

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

Nine Months Ended September 30,
(In millions) 2019 2018
Net cash provided by operating activities included:
Interest paid (net of amounts capitalized) $ 648
$ 293
Income taxes paid —
1
Cash paid for amounts included in the measurement of lease liabilities
Payments on operating leases 62
—
Interest payment under finance lease obligations 1
—
Net cash provided by financing activities included:
Principal payments under finance lease obligations 4
—
Non-cash investing and financing activities:
Net transfers of property, plant and equipment from materials and supplies inventories 1
2
MPLX terminal lease classification change 21
—
ROU assets obtained in exchange for new operating lease obligations 13
—
ROU assets obtained in exchange for new finance lease obligations $ 4
$ —



	Six Months Ended June 30,
(In millions)	2020			2019
Net cash provided by operating activities included:
Interest paid (net of amounts capitalized)	$	423		$	402
Income taxes paid	1			—
Non-cash investing and financing activities:
Net transfers of property, plant and equipment (to)/from materials and supplies inventories	$	(1	)	$	1

~~Table of Contents~~

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


	Nine Months Ended September 30,					Six Months Ended June 30,
(In millions)	2019			2018		2020			2019
(Decrease)/increase in capital accruals	$	(67	)	$	90	$	(172	)	$	(77	)

~~17.~~18. Accumulated Other Comprehensive Loss

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

The following table shows the changes in “Accumulated other comprehensive loss” by component during the period December 31, ~~2018~~2019 through ~~September~~June 30, ~~2019.~~

2020.

(In millions) Pension
Benefits Other
Post-Retirement Benefits Total
Balance at December 31, 2018⁽¹⁾
$ (14 ) $ (2 ) $ (16 )
Other comprehensive income - remeasurements⁽²⁾
—
1
1
Balance at September 30, 2019⁽¹⁾
$ (14 ) $ (1 ) $ (15 )



(In millions)	Pension Benefits			Other Post-Retirement Benefits			Total
Balance at December 31, 2019⁽¹⁾	$	(14	)	$	(1	)	$	(15	)
Other comprehensive loss - remeasurements⁽²⁾	—			(1		)	(1		)
Balance at June 30, 2020⁽¹⁾	$	(14	)	$	(2	)	$	(16	)

The following table shows the changes in “Accumulated other comprehensive loss” by component during the period December 31, ~~2017~~2018 through ~~September~~June 30, ~~2018.~~2019.

(In millions)
Pension
Benefits

Other
Post-Retirement Benefits
Total
Balance at December 31, 2017⁽¹⁾
$ (13 ) $ (1 ) $ (14 )
Other comprehensive loss - remeasurements⁽²⁾
(1 ) (1 ) (2 )
Balance at September 30, 2018⁽¹⁾
$ (14 )
$ (2 )
$ (16 )



(In millions)	Pension Benefits			Other Post-Retirement Benefits			Total
Balance at December 31, 2018⁽¹⁾	$	(14	)	$	(2	)	$	(16	)
Other comprehensive income - remeasurements⁽²⁾	—			1			1
Balance at June 30, 2019⁽¹⁾	$	(14	)	$	(1	)	$	(15	)

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

~~(2)~~


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


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

~~18.~~

19. Equity-Based Compensation

Phantom Units– Upon the completion of the Merger, each phantom unit held by employees of ANDX was converted into 1.135 MPLX phantom units. These units retained their original vesting terms and are accounted for using the fair value per unit calculated by MPC as of October 1, 2018.

The following is a summary of phantom unit award activity of MPLX LP common units for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020:


	Number of Units		Weighted Average Fair Value		Number of Units		Weighted Average Fair Value
Outstanding at December 31, 2018	1,154,335		$	34.34
Outstanding at December 31, 2019					1,109,568		$	35.97
Granted	207,515		32.96		195,461		19.43
Legacy ANDX phantom units converted to MPLX phantom units at the Merger	208,533		43.64
Settled	(420,374	)	33.76		(323,884	)	35.67
Forfeited	(42,464	)	33.53		(4,627	)	36.40
Outstanding at September 30, 2019	1,107,545		$	36.09
Outstanding at June 30, 2020					976,518		$	32.76

Performance Units – MPLX grants performance units 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 and often contain both market and performance conditions based on various metrics. Market conditions are valued using a Monte Carlo valuation while performance conditions are reevaluated periodically and valued at the compensation cost associated with the performance outcome deemed most probable.

The performance units granted in ~~2019~~2020 are hybrid awards having a three-year performance period of January 1, ~~2019~~2020 through December 31, ~~2021.~~2022. 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 distributable cash flow, and a market condition based on MPLX LP’s total unitholder return. The market condition was valued using a Monte Carlo valuation, resulting in a grant date fair value of ~~$0.68~~$0.80 per unit for the ~~2019~~2020 equity-classified performance units. Grant date fair value of the performance condition is based on potential payouts per unit of up to $2.00 per unit. Compensation cost associated with the performance condition is based on the grant date fair value of the payout deemed most probable to occur and is adjusted as the expectation for payout changes.

During the first quarter of 2018, a performance award was granted; however, ~~a grant date could not be established based on~~due to the nature of the award ~~terms. Given~~terms, the grant date for this award was not established until the first quarter of 2020 and we began recognizing units and expense related to this award at that time. The performance units granted in 2018 are hybrid awards having a three-year performance period of January 1, 2018 through December 31, 2020. 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 an average of MPLX LP’s distributable cash flow and a market condition based on MPLX LP’s total unitholder return. The market condition was valued using a Monte Carlo valuation, resulting in a grant date ~~cannot be established, no expense or units have been recorded. When a grant~~fair value of $0.45 per unit for the 2018 equity-classified performance units. Grant date ~~is established, the~~ fair value of the ~~award will be recognized over~~performance condition is based on potential payouts per unit of up to $2.00 per unit. Compensation cost associated with the ~~remaining~~ performance ~~period.~~condition is based on the grant date fair value of the payout deemed most probable to occur and is adjusted as the expectation for payout changes.

The following is a summary of the activity for performance unit awards to be settled in MPLX LP common units for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020:



	Number of Units
Outstanding at December 31, ~~2018~~2019	~~1,941,750~~2,157,347
Granted	~~987,994~~2,147,211
Settled	(~~772,397~~1,169,354	)
Forfeited	—(31,668	)
Outstanding at ~~September~~June 30, ~~2019~~2020	~~2,157,347~~3,103,536

~~19. Leases~~

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

~~Lessee~~

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

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

4034

Table of Contents

Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019
(In millions) Related Party Third Party Related Party Third Party
Components of lease cost:
Operating lease cost $ 4
$ 19
$ 11
$ 56

Finance lease cost:
Amortization of ROU assets —
1
—
4
Interest on lease liabilities —
—
—
1
Total finance lease cost —
1
—
5

Variable lease cost —
3
—
7
Short-term lease cost —
20
—
56
Total lease cost $ 4
$ 43
$ 11
$ 124

~~Supplemental balance sheet data related to leases is as follows:~~

September 30, 2019
(In millions) Related Party Third Party
Operating leases
Assets
Right of use assets $ 232
$ 366
Liabilities
Operating lease liabilities 1
61
Long-term operating lease liabilities 231
309
Total operating lease liabilities $ 232
$ 370
Weighted average remaining lease term 47.44 years
8.86 years
Weighted average discount rate 5.80 % 4.48 %

Finance leases
Assets
Property, plant and equipment, gross $ 49
Accumulated depreciation 21
Property, plant and equipment, net 28
Liabilities
Other current liabilities 9
Long-term debt 11
Total finance lease liabilities $ 20
Weighted average remaining lease term 10.00 years
Weighted average discount rate 5.81 %

~~Table of Contents~~

As of September 30, 2019, maturities of lease liabilities for operating lease obligations and finance lease obligations having initial or remaining non-cancellable lease terms in excess of one year are as follows:

(In millions) Related Party Operating
Leases Third Party Operating
Leases Finance
Leases
2019 $ 5
$ 21
$ 1
2020 14
74
10
2021 14
68
2
2022 14
59
2
2023 14
55
2
2024 and thereafter 619
173
11
Gross lease payments 680
450
28
Less: imputed interest 448
80
8
Total lease liabilities $ 232
$ 370
$ 20

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

(In millions) Operating
Lease
Obligations
Capital
Lease
Obligations
2019 $ 90
$ 5
2020 88
8
2021 83
3
2022 76
2
2023 70
2
2024 and thereafter 825
4
Total minimum lease payments $ 1,232
24
Less: imputed interest costs 3
Present value of net minimum lease payments $ 21

~~Lessor~~

Based on the terms of fee-based transportation and storage services agreements with MPC as well as certain natural gas gathering, transportation and processing agreements, MPLX is considered to be the lessor under several operating lease arrangements in accordance with GAAP. The agreements with MPC have remaining terms ranging from less than one year to 12 years with renewal options ranging from zero to 10 years. MPLX’s primary natural gas lease operations relate to a natural gas gathering agreement in the Marcellus Shale for which we earn a fixed fee for providing gathering services to a single producer using a dedicated gathering system. As the gathering system is expanded, the fixed fee charged to the producer is adjusted to include the additional gathering assets in the lease with the fee being recorded on a straight-line basis over the life of the agreement. The primary term of the natural gas gathering arrangement expires in 2038 and will continue thereafter on a year-to-year basis until terminated by either party. Other significant natural gas implicit leases relate to a natural gas processing agreement in the Marcellus Shale and a natural gas processing agreement in the Southern Appalachia region for which MPLX earns minimum monthly fees for providing processing services to a single producer using a dedicated processing plant. The primary term of these natural gas processing agreements expires during 2023 and 2033 with the contracts continuing thereafter on a year-to-year basis until terminated by either party.

MPLX did not elect to use the practical expedient to combine lease and non-lease components for lessor arrangements. The tables below represent the portion of the contract allocated to the lease component based on relative standalone selling price. Some lessor agreements are currently deemed operating, as we elected the practical expedient to carry forward historical classification conclusions. If and when a modification of an existing agreement occurs and the agreement is required to be assessed under ASC 842, MPLX assesses the amended agreement and makes a determination as to whether a reclassification of the lease is required.

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20. Leases

During the ~~three months ended September 30, 2019, there~~first quarter of 2020, reimbursements for projects at certain MPLX refining logistics locations were agreed to between MPLX and MPC. These reimbursements 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 the leasing standard. As a result of the reassessment, one of our leases was ~~a modification to MPLX terminal agreements with MPC. Based on the modification, certain terminals within the MPLX terminal agreement were~~ reclassified from an operating ~~leases~~lease to a sales-type ~~leases.~~lease. As a result, the underlying assets previously shown on the Consolidated Balance Sheets associated with the ~~sales-types~~sales-type lease 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. ~~When determining~~See Note 5 for the ~~net investment in~~location of lease receivables and unguaranteed residual assets on the ~~lease, certain variable payments were excluded from the total contract consideration, primarily related to fees for which there are no minimum volume commitments.~~Consolidated Balance Sheets. The difference between the net book value of the underlying assets and the net investment in the lease has been recorded ~~through equity~~as a Contribution from MPC in the Consolidated Statements of Equity given that the ~~dropdown of MPLXT~~transaction related to refining logistics was a common control transaction. During the ~~three months ended September 30, 2019,~~first quarter of 2020, MPLX derecognized approximately ~~$29~~$171 million of property, plant and equipment, ~~derecognized approximately $3 million of existing deferred rent receivable,~~ recorded a lease receivable of approximately ~~$47~~$370 million, recorded an unguaranteed residual asset of approximately $6$10 million and ~~equity~~a Contribution from MPC of ~~$21~~$209 million.

Lease revenues included on the Consolidated Statements of Income were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30, 2020				Three Months Ended June 30, 2019
(In millions)	Related Party		Third Party		Related Party		Third Party		Related Party		Third Party		Related Party		Third Party
Operating leases:
Operating lease revenue⁽¹⁾⁽²⁾	$	248	$	63	$	773	$	196	$	195	$	66	$	246	$	68

Sales-type leases:
Profit/(loss) recognized at the commencement date	—		N/A		—		N/A		—		—		N/A		N/A
Interest income (Sales-type lease revenue- fixed minimum)	3		N/A		3		N/A		38		—		N/A		N/A
Interest income (Revenue from variable lease payments)	$	1	N/A		$	1	N/A		$	—	$	—	N/A		N/A



	Six Months Ended June 30, 2020				Six Months Ended June 30, 2019
(In millions)	Related Party		Third Party		Related Party		Third Party
Operating leases:
Operating lease revenue⁽¹⁾⁽²⁾	$	381	$	129	$	525	$	133

Sales-type leases:
Profit/(loss) recognized at the commencement date	—		—		N/A		N/A
Interest income (Sales-type lease revenue- fixed minimum)	76		—		N/A		N/A
Interest income (Revenue from variable lease payments)	$	—	$	—	N/A		N/A


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


(2)	Financial information for the three and six months ended June 30, 2019 has been retrospectively adjusted for the acquisition of ANDX. See Notes 1 and 3.

~~The following is a schedule of minimum future rental revenue~~See Note 5 for additional information on where related party lease assets are recorded in the ~~non-cancellable operating leases~~Consolidated Balance Sheets. Third party lease assets are less than $1 million as of ~~September~~June 30, ~~2019:~~2020 and are included within the “Receivables, net” and “Other noncurrent assets” captions within the Consolidated Balance Sheets.

(In millions) Related Party Third Party Total
2019 $ 294
$ 47
$ 341
2020 1,179
186
1,365
2021 1,175
178
1,353
2022 1,171
176
1,347
2023 1,118
170
1,288
2024 and thereafter 3,904
1,269
5,173
Total minimum future rentals $ 8,841
$ 2,026
$ 10,867

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

(In millions) Related Party Third Party Total
2019 $ 1,277
$ 171
$ 1,448
2020 1,275
163
1,438
2021 1,146
154
1,300
2022 1,143
151
1,294
2023 1,094
145
1,239
2024 and thereafter 3,786
1,114
4,900
Total minimum future rentals $ 9,721
$ 1,898
$ 11,619

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The following is a schedule of ~~minimum~~ future ~~revenue~~payments on the sales-type leases ~~with MPC~~ as of ~~September~~June 30, ~~2019:~~

2020:

(In millions) Related Party
2019 $ 3
2020 14
2021 14
2022 14
2023 15
2024 and thereafter 34
Total minimum future rentals 94
Less: present value discount 47
Lease receivable $ 47

~~The following schedule summarizes MPLX’s investment in assets held for operating lease by major classes as of September 30, 2019 and December 31, 2018:~~

(In millions) September 30, 2019 December 31, 2018
Natural gas gathering and NGL transportation pipelines and facilities $ 1,061
$ 964
Processing, fractionation and storage facilities 1,911
1,670
Pipelines and related assets 364
376
Barges and towing vessels 674
619
Terminals and related assets 1,316
1,415
Refinery related assets 998
981
Land, building, office equipment and other 270
187
Total 6,594
6,212
Less accumulated depreciation 2,271
2,074
Property, plant and equipment, net $ 4,323
$ 4,138



(In millions)	Related Party
2020	$	78
2021	157
2022	157
2023	158
2024	158
2025 and thereafter	473
Total minimum future rentals	1,181
Less: present value discount	758
Lease receivable	$	423

~~20.~~21. Commitments and Contingencies

MPLX is the subject of, or a party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. Some of these matters are discussed below. For matters for which MPLX has not recorded an accrued liability, MPLX is unable to estimate a range of possible losses because the 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 – MPLX is subject to federal, state and local laws and regulations relating to the environment. These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation of hazardous waste disposal sites. Penalties may be imposed for non-compliance.

At ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, accrued liabilities for remediation totaled ~~$19~~$18 million and ~~$20~~$19 million, respectively. However, it is not presently possible to estimate the ultimate amount of all remediation costs that might be incurred or the penalties, if any, which may be imposed. At ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, there were 0 balances with MPC for indemnification of environmental costs.

MPLX is involved in environmental enforcement matters arising in the ordinary course of business. While the outcome and impact onto MPLX 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~~ – MPLX, MarkWest, MarkWest Liberty Midstream, MarkWest Liberty Bluestone, L.L.C., Ohio Fractionation and MarkWest Utica EMG (collectively, the “MPLX Parties”) are parties to various lawsuits with Bilfinger Westcon, Inc.

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(“Westcon”) that were instituted in 2016 and 2017 in Pennsylvania, West Virginia and Ohio. The lawsuits relate to disputes regarding construction work performed by Westcon at the Bluestone, Mobley and Cadiz processing complexes in Pennsylvania, West Virginia and Ohio, respectively, and the Hopedale fractionation complex in Ohio. With respect to work performed by Westcon at the Mobley and Bluestone processing complexes, one or more of the MPLX Parties have asserted breach of contract, fraud, and with respect to work performed at the Mobley processing complex, MarkWest Liberty Midstream has also asserted negligent misrepresentation claims against Westcon. Westcon has also asserted claims against one or more of the MPLX Parties regarding these construction projects for breach of contract, unjust enrichment, promissory estoppel, fraud and constructive fraud, tortious interference with contractual relations, and civil conspiracy. Collectively, in the several cases, the MPLX Parties sought in excess of $10 million, plus an unspecified amount of punitive damages. Collectively, in the several cases, Westcon sought in excess of $40 million, plus an unspecified amount of punitive damages. On July 31, 2019, Westcon and the MPLX Parties reached an agreement to resolve the disputes among those parties relating to the Bluestone processing complex in Pennsylvania. The settlement resolves a significant portion of the disputes with Westcon. The settlement will not have a material adverse effect on MPLX’s consolidated financial position, results of operations or cash flows. While the ultimate outcome and impact to MPLX cannot be predicted with certainty, MPLX believes the resolution of the remaining litigation with Westcon will not have a material adverse effect on its consolidated financial position, results of operations, or cash flows.

In 2003, the State of Illinois brought an action against the Premcor Refining Group, Inc. (“Premcor”) and Apex Refining Company (“Apex”) asserting claims for environmental cleanup related to the refinery owned by these entities in the Hartford/Wood River, Illinois area. In 2006, Premcor and Apex filed third-party complaints against numerous owners and operators of petroleum products facilities in the Hartford/Wood River, Illinois area, including Marathon Pipe Line LLC (“MPL”). These complaints, which have been amended since filing, assert claims of common law nuisance and contribution under the Illinois Contribution Act and other laws for environmental cleanup costs that may be imposed on Premcor and Apex by the State of Illinois. On September 6, 2016, the trial court approved a settlement between Apex and the State of Illinois whereby Apex agreed to settle all claims against it for a $10 million payment. Premcor filed a motion for permissive appeal and requested a stay to the proceeding until the motion is ruled upon. Premcor reached a settlement with the State of Illinois in the second quarter of 2018, which has been objected to by certain third-party defendants, including MPL, and is subject to court approval. Several third-party defendants in the litigation including MPL have asserted cross-claims in contribution against the various third-party defendants. This litigation is currently pending in the Third Judicial Circuit Court, Madison County, Illinois. The trial concerning Premcor’s claims against third-party defendants, including MPL, previously scheduled to commence September 10, 2018, has been postponed and a new trial date has not been set. While the ultimate outcome and impact to MPLX cannot be predicted with certainty, MPLX does not consider it reasonably possible that a loss resulting from such lawsuits or other proceedings in excess of any amounts accrued has been incurred that is expected to have a material adverse effect on its consolidated financial position, results of operations, or cash flows. Under the omnibus agreement, MPC will indemnify MPLX for the full cost of any losses should MPL be deemed responsible for any damages in this lawsuit.

MPLX is also a party to a number of other lawsuits and other proceedings arising in the ordinary course of business. While the ultimate outcome and impact to MPLX cannot be predicted with certainty, ~~MPLX~~management 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, financial position or cash flows.

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

In connection with our ~~approximate 9~~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, we have entered into a Contingent Equity Contribution Agreement whereby MPLX LP, along with the other joint venture owners in the Bakken Pipeline system, have agreed to make equity contributions to the joint venture upon certain events occurring to allow the entities that own and operate the Bakken Pipeline system to satisfy their senior note payment obligations. The senior notes were issued to repay amounts owed by the pipeline companies to fund the cost of construction of the Bakken Pipeline system.

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In March 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 for the Bakken Pipeline system, to conduct a full environmental impact statement (“EIS”), and further requested briefing on whether an easement permit necessary for the operation of the Bakken Pipeline system should be vacated while the EIS is being prepared.

On July 6, 2020, the D.D.C. ordered vacatur of the easement permit during the pendency of an EIS and further ordered shut down of the pipeline by August 5, 2020. The D.D.C. denied a motion to stay that order. Dakota Access and the Army Corps are appealing the D.D.C.’s order to the U.S. Court of Appeals for the District of Columbia Circuit. On July 14, 2020, the Circuit Court issued an administrative stay while the court considers Dakota Access and the Army Corps’ emergency motion for stay pending appeal.

If the pipeline is temporarily shutdown pending completion of the EIS, 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~~June 30, ~~2019,~~2020, our maximum potential undiscounted payments under the Contingent Equity Contribution Agreement were approximately $230 million.

~~Table~~Other Legal Proceedings – In early July, MPLX received a Notification of ~~Contents~~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 covers the rights of way for 23 tracts of land and demands the immediate cessation of pipeline operations. The notification also assesses trespass damages of approximately $187 million. MPLX expects to receive a notification for an additional 11 tracts in the near future. We appealed this determination, which triggered an automatic stay of the requested pipeline shutdown and payment. We believe the trespass damage calculation is dependent on a novel interpretation of the applicable law, and we continue to actively negotiate settlement of this matter with holders of the property rights at issue. Management does not believe the ultimate resolution of this matter will have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

Contractual Commitments and Contingencies – At ~~September~~June 30, ~~2019,~~2020, MPLX’s contractual commitments to acquire property, plant and equipment totaled ~~$788~~$293 million. These commitments were primarily related to G&P plant expansion, terminal ~~pipeline~~ and ~~refining logistics~~pipeline projects. In addition, from time to time and in the ordinary course of business, MPLX and its affiliates provide guarantees of MPLX’s subsidiaries payment and performance obligations in the G&P segment. Certain natural gas processing and gathering arrangements require MPLX to construct new natural gas processing plants, natural gas gathering pipelines and NGL pipelines and contain certain fees and charges if specified construction milestones are not achieved for reasons other than force majeure. In certain cases, certain producers may have the right to cancel the processing arrangements if there are significant delays that are not due to force majeure. As of ~~September~~June 30, ~~2019,~~2020, management does not believe there are any indications that MPLX will not be able to meet the construction milestones, that force majeure does not apply or that such fees and charges will otherwise be triggered.

Also, in connection with the Merger, we assumed ANDX obligations related to future purchase obligations included in fuel costs associated with the wholesale product supply agreement, NGLs transportation costs, fractionation fees, and fixed charges with MPC. This increased our future obligations by approximately $11.9 billion as of September 30, 2019.

22. Subsequent Events

On July 31, 2020, MPLX entered into a Redemption Agreement (the “Redemption Agreement”) with Western Refining Southwest, Inc., an Arizona corporation (“WRSW”) and wholly owned subsidiary of MPC, pursuant to which MPLX agreed to transfer to WRSW all of the outstanding membership interests in Western Refining Wholesale, LLC, a Delaware limited liability company (“WRW”) to WRSW in exchange for the redemption of MPLX common units held by WRSW. The transaction effects the transfer to MPC of the Western wholesale distribution business that MPLX acquired as a result of its acquisition of ANDX. The Redemption Agreement was approved by the conflicts committee and the board of directors of MPLX’s general partner. The conflicts committee, which is composed of independent members of the board of directors of MPLX’s general partner, retained independent legal and financial advisors to assist it in evaluating and negotiating the transaction.

Per the terms of Redemption Agreement, MPLX redeemed 18,582,088 Common Units (the “Redeemed Units”) held by WRSW on July 31, 2020. The number of Redeemed Units was calculated by dividing WRW’s aggregate valuation of $340 million by the simple average of the volume weighted average New York Stock Exchange prices of an MPLX Common Unit for the ten trading days ending at market close on July 27, 2020.

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

Management’s Discussion and Analysis of Financial Condition and Results of Operations should 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, ~~2018.~~2019.

Disclosures Regarding Forward-Looking Statements

This Quarterly Report on Form 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 trends~~that 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,” “commitment,” “could,” “design,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “imply,” “intend,” “may,” “objective,” “opportunity,” “outlook,” “plan,” “policy,” “position,” “potential,” “predict,” “priority,” “project,” “proposition,” “prospective,” “pursue,” “seek,” “should,” “strategy,” “target,” “will,” “would” or other similar expressions that convey the uncertainty of future events or outcomes. These statements are accompanied by cautionary language identifying important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements. We undertake no obligation to update any forward-looking statements except to the extent required by applicable law.

Forward-looking statements include, ~~but are not limited to,~~among other things, statements ~~that relate to, or statements that are subject to risks, contingencies or uncertainties that relate to:~~regarding:

~~MPLX’s acquisition of ANDX;~~

~~MPC’s ongoing review of strategic alternatives for its midstream business;~~

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

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

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

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

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

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

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

the ~~reliability~~amount and timing of ~~processing units and other equipment;~~

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

~~business strategies, growth opportunities and expected investment;~~

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

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~~the effect of restructuring or reorganization of business components;~~

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

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

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

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

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

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

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

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

~~volatility or degradation in general economic, market,~~the effects of the outbreak of COVID-19 and the adverse impact thereof on our business, financial condition, results of operations and cash flows, including our growth, operating costs, labor availability, logistical capabilities, customer demand for our services and industry ~~or business conditions;~~

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

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

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

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

~~completion of midstream infrastructure by competitors;~~

~~midstream and refining industry overcapacity or under capacity;~~

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

demand generally, cash position, taxes, the price ~~availability~~of our securities and ~~acceptance of alternative fuels and alternative-fuel vehicles and laws mandating such fuels or vehicles;~~

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

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

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

~~actions taken by our competitors, including pricing adjustments~~access capital markets, and the ~~expansion~~global economy and ~~retirement~~financial markets generally;

Marathon Petroleum Corporation’s (“MPC”) ability to achieve its strategic objectives and the effects of ~~pipeline capacity, processing, fractionation~~those strategic decisions on us;

the risk that anticipated opportunities and ~~treating facilities in response to market conditions;~~

~~changes in fuel and utility costs for our facilities;~~

~~failure~~any other synergies from or anticipated benefits of the Andeavor Logistics LP (“ANDX”) acquisition may not be fully realized or may take longer to realize than expected, including whether the ~~benefits projected for~~transaction will be accretive within the expected timeframe or at all;

disruption from the ANDX acquisition making it more difficult to maintain relationships with customers, employees or suppliers;

risks relating to any unforeseen liabilities of ANDX;

further impairments;

negative capital ~~projects, or cost overruns associated with such projects;~~market conditions, including an increase of the current yield on common units;

the ability to achieve strategic and financial objectives, including with respect to distribution coverage, future distribution levels, proposed projects and completed transactions;

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

~~unusual weather conditions and natural disasters;~~

~~disruptions due to equipment interruption or failure,~~MPC’s portfolio optimization, including ~~electrical shortages and power grid failures;~~

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

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

the ability to complete any divestitures on commercially reasonable terms and/or within the expected timeframe, and the effects of any such divestitures on the business, financial condition, results of operations and cash flows;

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

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~~modifications~~the adequacy of capital resources and liquidity, including the availability of sufficient cash flow to ~~financial policies, capital budgets,~~pay distributions and ~~earnings~~access to debt on commercially reasonable terms, and ~~distributions;~~the ability to successfully execute business plans, growth strategies and self-funding models;

~~rulings, judgments or settlements~~the timing and ~~related expenses~~extent of changes in ~~litigation~~commodity prices and demand for crude oil, refined products, feedstocks or other ~~legal, tax~~hydrocarbon-based products;

volatility in or degradation of market and industry conditions as a result of the COVID-19 pandemic, other infectious disease outbreaks or otherwise;

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

completion of midstream infrastructure by competitors;

disruptions due to equipment interruption or failure, including ~~unexpected environmental remediation costs, in excess of any reserves or insurance coverage;~~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 reliability of processing units and other equipment;

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;

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;

non-payment or non-performance by our producer and other customers;

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

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

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, or those of our suppliers or customers;

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

~~labor and material shortages;~~

~~changes to our capital budget;~~

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

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

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

For additional risk factors affecting our business, see ~~“Item 1A. Risk Factors” below, together with~~ the risk factors described in our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, as updated in our Quarterly Report on Form 10-Q for the quarter ended ~~June 30, 2019.~~March 31, 2020. We undertake no obligation to update any forward-looking statements except to the extent required by applicable law.

MPLX OVERVIEW

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

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SIGNIFICANT FINANCIAL AND OTHER HIGHLIGHTS

Significant financial highlights including revenues and other income, income from operations, net income, adjusted EBITDA attributable to MPLX and DCF attributable to GP and LP unitholders for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~September~~June 30, ~~2018~~2019 are shown in the chart below. These results include the recast of ANDX financial information into MPLX’s financial information as a result of the Merger. See the Non-GAAP Financial Information section below for the definitions of Adjusted EBITDA and DCF and the Results of Operations section for further details regarding changes in these metrics.

~~(1) Includes Adjusted EBITDA attributable to Predecessor and portion of DCF adjustments attributable to Predecessor.~~


(1)	Q2 2019 includes Adjusted EBITDA attributable to Predecessor and portion of DCF adjustments attributable to Predecessor.

Other Highlights

RECENT DEVELOPMENTS

On July 31, MPLX ~~completed~~entered into a Redemption Agreement with WRSW, a wholly owned subsidiary of MPC, in which MPLX agreed to transfer the Western wholesale distribution business that it acquired as a result of its acquisition of ANDX ~~via Merger on July 30, 2019. The historical results~~to MPC in exchange for the redemption of ~~ANDX have been incorporated into the~~$340 million of MPLX results from October 1, 2018, which is the date that MPC acquired Andeavor. At the effective time of the Merger, each common unit held by ANDX’s public unitholders was converted into the right to receive 1.135 MPLX common units. ANDX common units held by ~~certain affiliates~~WRSW. The Redemption Agreement was approved by the MPLX board of ~~MPC were converted into~~directors following the ~~right to receive 1.0328 MPLX~~approval of the terms of the transaction by its independent conflicts committee. The transaction closed on July 31.

Announced a second quarter distribution rate of $0.6875 per common ~~units.~~ unit.

CURRENT ECONOMIC ENVIRONMENT

The ~~assets~~outbreak of ~~ANDX complement~~COVID-19 and ~~enhance MPLX’s existing asset base and further expand MPLX’s existing footprint.~~

~~During the quarter, MPLX: entered~~its development into a ~~Term Loan Agreement, which provides for a committed term loan facility for up~~pandemic in March 2020 has resulted in significant economic disruption globally. Actions taken by various governmental authorities, individuals and companies around the world to ~~an aggregate~~prevent the spread of ~~$1 billion; issued $2.0 billion aggregate principal amount~~COVID-19 through social distancing have restricted travel, many business operations, public gatherings and the overall level of ~~floating rate senior notes~~individual movement and in-person interaction across the globe. This has significantly reduced global economic activity and resulted in a ~~public offering; increased its borrowing capacity~~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.

We are actively responding to the impacts that these matters are having on our business by:

Canceling or delaying certain capital expenditures that we had expected to make in 2020.

Taking actions to reduce operating expenses across the ~~MPLX Credit Agreement~~business.

Continuing to ~~$3.5 billion;~~evaluate and ~~extended the MPLX Credit Agreement term to July 30, 2024.~~

In connection with the Merger, MPLX also assumed all outstanding ANDX senior notes, which had an aggregate principal amount of $3.75 billion with interest rates ranging from 3.5 percent to 6.375 percent and maturity dates ranging from 2019 to 2047. On September 23, 2019, approximately $3.06 billion aggregate principal amount of ANDX’s outstanding senior notes were exchanged for an aggregate principal amount of approximately $3.06 billion new unsecured senior notes issued by MPLX in an exchange offer and consent solicitation undertaken by MPLX, leaving approximately $690 million aggregate principal of outstanding senior notes held by ANDX.

~~During the nine months ended September 30, 2019, we did not issue any common units under~~high-grade our ~~ATM Program. As of September 30, 2019, $1.7 billion of common units remain available for issuance through the ATM Program.~~

~~MPLX continues to focus on~~capital portfolio ~~optimization, which could include asset divestitures.~~

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~~RECENT DEVELOPMENTS~~Many uncertainties remain with respect to COVID-19, including its resulting economic effects, and we are unable to predict the ultimate economic impacts from COVID-19 and how quickly national economies can recover once the pandemic ultimately subsides. However, the adverse impact will likely continue to have an impact on our business and our customers’ businesses. 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.

MPC’s board of directors has formed a special committee to enhance its evaluation of potential value-creating options for its Midstream business. Among other aspects, the special committee will analyze the strategic fit of assets with MPC, the ability to realize full valuation credit for midstream earnings and cash flow, balance sheet impacts including liquidity and credit ratings, transaction tax impacts, separation costs, and overall complexity.

On October 15, 2019, MPLX borrowed the remaining $500 million in term loan capacity under the Term Loan Agreement. On the same day, MPLX paid off $500 million of outstanding ANDX 5.5 percent unsecured senior notes due 2019 and related accrued interest of $13.75 million

NON-GAAP FINANCIAL INFORMATION

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

We define Adjusted EBITDA as net income adjusted for: (i) depreciation and amortization; (ii) provision/(benefit) for income taxes; (iii) amortization of deferred financing costs; (iv) extinguishment of debt; (v) non-cash equity-based compensation; (vi) impairment expense; (vii) net interest and other financial costs; (viii) income/(loss) from equity method investments; (ix) distributions and adjustments related to equity method investments; (x) unrealized derivative gains/(losses); (xi) acquisition costs; (xii) noncontrolling interest; and (xiii) other adjustments as deemed necessary. We also use DCF, which we define as Adjusted EBITDA adjusted for: (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items. 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.

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

Management also utilizes Segment Adjusted EBITDA in evaluating the financial performance of our segments. The use of this measures allows investors to understand how management evaluates financial performance to make operating decisions and allocate resources.

COMPARABILITY OF OUR FINANCIAL RESULTS

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

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RESULTS OF OPERATIONS

The following tables and discussion isare a summary of our results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, including a reconciliation of Adjusted EBITDA and DCF from “Net income” and “Net cash provided by operating activities,” the most directly comparable GAAP financial measures. Prior period financial information has been retrospectively adjusted for common control transactions.


	Three Months Ended September 30,							Nine Months Ended September 30,							Three Months Ended June 30,								Six Months Ended June 30,
(In millions)	2019		2018		Variance			2019		2018		Variance			2020		2019			Variance			2020			2019			Variance
Total revenues and other income(1)	$	2,280	$	1,712	$	568		$	6,725	$	4,710	$	2,015		$	2,081	$	2,210		$	(129	)	$	3,073		$	4,445		$	(1,372	)
Costs and expenses:
Cost of revenues (excludes items below)	407		241		166			1,099		680		419			315		353			(38		)	683			692			(9		)
Purchased product costs	129		241		(112		)	489		632		(143		)	87		166			(79		)	222			360			(138		)
Rental cost of sales	37		32		5			103		94		9			33		29			4			68			66			2
Rental cost of sales - related parties	45		1		44			124		2		122			41		36			5			87			79			8
Purchases - related parties	303		228		75			894		628		266			280		313			(33		)	556			591			(35		)
Depreciation and amortization	302		201		101			916		565		351			321		313			8			646			614			32
Impairment expense															—		—			—			2,165			—			2,165
General and administrative expenses	102		76		26			293		217		76			96		90			6			193			191			2
Other taxes	29		20		9			84		55		29			30		25			5			61			55			6
Total costs and expenses	1,354		1,040		314			4,002		2,873		1,129			1,203		1,325			(122		)	4,681			2,648			2,033
Income from operations	926		672		254			2,723		1,837		886
Income/(loss) from operations															878		885			(7		)	(1,608		)	1,797			(3,405		)
Related party interest and other financial costs	5		2		3			8		4		4			1		2			(1		)	4			3			1
Interest expense, net of amounts capitalized	212		134		78			640		381		259			206		214			(8		)	417			428			(11		)
Other financial costs	16		17		(1		)	38		49		(11		)	16		13			3			32			22			10
Income before income taxes	693		519		174			2,037		1,403		634
Provision for income taxes	4		3		1			2		8		(6		)
Net income	689		516		173			2,035		1,395		640
Income/(loss) before income taxes															655		656			(1		)	(2,061		)	1,344			(3,405		)
(Benefit)/provision for income taxes															—		(1		)	1			—			(2		)	2
Net income/(loss)															655		657			(2		)	(2,061		)	1,346			(3,407		)
Less: Net income attributable to noncontrolling interests	8		6		2			20		11		9			7		6			1			15			12			3
Less: Net income attributable to Predecessor	52		—		52			401		—		401			—		169			(169		)	—			349			(349		)
Net income attributable to MPLX LP	629		510		119			1,614		1,384		230
Net income/(loss) attributable to MPLX LP															648		482			166			(2,076		)	985			(3,061		)

Adjusted EBITDA attributable to MPLX LP (excluding Predecessor results)⁽¹⁾	1,165		937		228			3,015		2,564		451
Adjusted EBITDA attributable to MPLX LP (including Predecessor results)⁽²⁾	1,273		N/A		N/A			3,785		N/A		N/A
DCF attributable to GP and LP unitholders (including Predecessor results)⁽²⁾	$	997	$	747	$	250		$	2,963	$	2,025	$	938
Adjusted EBITDA attributable to MPLX LP (excluding Predecessor results)⁽²⁾															1,227		920			307			2,521			1,850			671
Adjusted EBITDA attributable to MPLX LP (including Predecessor results)⁽³⁾															N/A		1,249			N/A			N/A			2,512			N/A
DCF attributable to GP and LP unitholders (including Predecessor results)⁽³⁾															$	996	$	975		$	21		$	2,043		$	1,966		$	77


(1)	The six months ended June 30, 2020 includes impairment expense of approximately $1.3 billion related to three equity method investments.


(2)	Non-GAAP measure. See reconciliation below to the most directly comparable GAAP measures. Excludes adjusted EBITDA and DCF adjustments attributable to Predecessor.


~~(2)~~(3)	Non-GAAP measure. See reconciliation below to the most directly comparable GAAP measures. Includes adjusted EBITDA and DCF adjustments attributable to Predecessor.

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	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended June 30,									Six Months Ended June 30,
(In millions)	2019			2018			Variance			2019			2018			Variance			2020			2019			Variance			2020			2019			Variance
Reconciliation of Adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders from Net income:
Net income	$	689		$	516		$	173		$	2,035		$	1,395		$	640		$	655		$	657		$	(2	)	$	(2,061	)	$	1,346		$	(3,407	)
Provision for income taxes	4			3			1			2			8			(6		)	—			(1		)	1			—			(2		)	2
Amortization of deferred financing costs	10			14			(4		)	29			45			(16		)	15			12			3			29			19			10
Net interest and other financial costs	223			139			84			657			389			268			208			217			(9		)	424			434			(10		)
Income from operations	926			672			254			2,723			1,837			886			878			885			(7		)	(1,608		)	1,797			(3,405		)
Depreciation and amortization	302			201			101			916			565			351			321			313			8			646			614			32
Non-cash equity-based compensation	5			6			(1		)	17			15			2			3			5			(2		)	8			12			(4		)
Income from equity method investments	(95		)	(64		)	(31		)	(255		)	(175		)	(80		)
Impairment expense																			—			—			—			2,165			—			2,165
(Income)/loss from equity method investments																			(89		)	(83		)	(6		)	1,095			(160		)	1,255
Distributions/adjustments related to equity method investments	145			112			33			399			314			85			115			132			(17		)	239			254			(15		)
Unrealized derivative (gains)/losses⁽¹⁾	(11		)	17			(28		)	(7		)	18			(25		)
Unrealized derivative losses/(gains)⁽¹⁾																			6			—			6			(9		)	4			(13		)
Acquisition costs	9			—			9			14			3			11			—			4			(4		)	—			5			(5		)
Other	1			—			1			1			—			1			1			—			1			2			—			2
Adjusted EBITDA	1,282			944			338			3,808			2,577			1,231			1,235			1,256			(21		)	2,538			2,526			12
Adjusted EBITDA attributable to noncontrolling interests	(9		)	(7		)	(2		)	(23		)	(13		)	(10		)	(8		)	(7		)	(1		)	(17		)	(14		)	(3		)
Adjusted EBITDA attributable to Predecessor⁽²⁾	(108		)	—			(108		)	(770		)	—			(770		)	—			(329		)	329			—			(662		)	662
Adjusted EBITDA attributable to MPLX LP⁽³⁾	1,165			937			228			3,015			2,564			451			1,227			920			307			2,521			1,850			671
Deferred revenue impacts	36			13			23			67			24			43			40			22			18			63			31			32
Net interest and other financial costs	(223		)	(139		)	(84		)	(657		)	(389		)	(268		)	(208		)	(217		)	9			(424		)	(434		)	10
Maintenance capital expenditures	(75		)	(40		)	(35		)	(174		)	(98		)	(76		)	(33		)	(62		)	29			(67		)	(99		)	32
Maintenance capital expenditures reimbursements	18			—			18			34			—			34			6			9			(3		)	20			16			4
Equity method investment capital expenditures paid out	(8		)	(6		)	(2		)	(16		)	(22		)	6			(4		)	(4		)	—			(11		)	(8		)	(3		)
Other	6			1			5			16			1			15			(1		)	10			(11		)	3			10			(7		)
Portion of DCF adjustments attributable to Predecessor⁽²⁾	27			—			27			159			—			159			—			63			(63		)	—			132			(132		)
DCF	946			766			180			2,444			2,080			364			1,027			741			286			2,105			1,498			607
Preferred unit distributions	(30		)	(19		)	(11		)	(92		)	(55		)	(37		)	(31		)	(32		)	1			(62		)	(62		)	—
DCF attributable to GP and LP unitholders	916			747			169			2,352			2,025			327			996			709			287			2,043			1,436			607
Adjusted EBITDA attributable to Predecessor	108			—			108			770			—			770
Portion of DCF adjustments attributable to Predecessor	(27		)	—			(27		)	(159		)	—			(159		)
Adjusted EBITDA attributable to Predecessor⁽²⁾																			—			329			(329		)	—			662			(662		)
Portion of DCF adjustments attributable to Predecessor⁽²⁾																			—			(63		)	63			—			(132		)	132
DCF attributable to GP and LP unitholders (including Predecessor results)	$	997		$	747		$	250		$	2,963		$	2,025		$	938		$	996		$	975		$	21		$	2,043		$	1,966		$	77

(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 adjusted EBITDA and DCF adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders prior to the acquisition date.

(3) For the three months ended September 30, 2019, the L&S and G&P segments made up $766 million and $399 million of Adjusted EBITDA attributable to MPLX LP, respectively. For the three months ended September 30, 2018, the L&S and G&P segments made up $547 million and $390 million of Adjusted EBITDA attributable to MPLX LP, respectively. For the nine months ended September 30, 2019, the L&S and G&P segments made up $1,895 million and $1,120 million of Adjusted EBITDA attributable to MPLX LP, respectively. For the

(1)


(2)	The adjusted EBITDA and DCF adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders prior to the acquisition date.

(3)

For the three months ended June 30, 2020, the L&S and G&P segments made up $839 million and $388 million of Adjusted EBITDA attributable to MPLX LP, respectively. For the three months ended June 30, 2019, the L&S and G&P segments made up $570 million and $350 million of Adjusted EBITDA attributable to MPLX LP, respectively. For the six months ended June 30, 2020, the L&S and G&P segments made up $1,711 million and $810

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~~nine~~million of Adjusted EBITDA attributable to MPLX LP, respectively. For the six months ended ~~September~~June 30, ~~2018,~~2019, the L&S and G&P segments made up ~~$1,510~~$1,129 million and ~~$1,054~~$721 million of Adjusted EBITDA attributable to MPLX LP, respectively.


	Nine Months Ended September 30,									Six Months Ended June 30,
(In millions)	2019			2018			Variance			2020			2019			Variance
Reconciliation of Adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders from Net cash provided by operating activities:
Net cash provided by operating activities	$	2,990		$	2,027		$	963		$	2,114		$	1,954		$	160
Changes in working capital items	134			78			56			12			112			(100		)
All other, net	(23		)	5			(28		)	(26		)	(7		)	(19		)
Non-cash equity-based compensation	17			15			2			8			12			(4		)
Net gain/(loss) on disposal of assets	3			(1		)	4
Net (loss)/gain on disposal of assets										(1		)	2			(3		)
Net interest and other financial costs	657			389			268			424			434			(10		)
Current income taxes	1			1			—			1			—			1
Asset retirement expenditures	1			7			(6		)	—			1			(1		)
Unrealized derivative (gains)/losses⁽¹⁾	(7		)	18			(25		)	(9		)	4			(13		)
Acquisition costs	14			3			11			—			5			(5		)
Other adjustments to equity method investment distributions	20			35			(15		)	13			9			4
Other	1			—			1			2			—			2
Adjusted EBITDA	3,808			2,577			1,231			2,538			2,526			12
Adjusted EBITDA attributable to noncontrolling interests	(23		)	(13		)	(10		)	(17		)	(14		)	(3		)
Adjusted EBITDA attributable to Predecessor⁽²⁾	(770		)	—			(770		)	—			(662		)	662
Adjusted EBITDA attributable to MPLX LP⁽³⁾	3,015			2,564			451			2,521			1,850			671
Deferred revenue impacts	67			24			43			63			31			32
Net interest and other financial costs	(657		)	(389		)	(268		)	(424		)	(434		)	10
Maintenance capital expenditures	(174		)	(98		)	(76		)	(67		)	(99		)	32
Maintenance capital expenditures reimbursements	34			—			34			20			16			4
Equity method investment capital expenditures paid out	(16		)	(22		)	6			(11		)	(8		)	(3		)
Other	16			1			15			3			10			(7		)
Portion of DCF adjustments attributable to Predecessor⁽²⁾	159			—			159			—			132			(132		)
DCF	2,444			2,080			364			2,105			1,498			607
Preferred unit distributions	(92		)	(55		)	(37		)	(62		)	(62		)	—
DCF attributable to GP and LP unitholders	2,352			2,025			327			2,043			1,436			607
Adjusted EBITDA attributable to Predecessor	770			—			770
Adjusted EBITDA attributable to Predecessor⁽²⁾										—			662			(662		)
Portion of DCF adjustments attributable to Predecessor(2)	(159		)	—			(159		)	—			(132		)	132
DCF attributable to GP and LP unitholders (including Predecessor results)	$	2,963		$	2,025		$	938		$	2,043		$	1,966		$	77

(3) For the nine months ended September 30, 2019, the L&S and G&P segments made up $1,895 million and $1,120 million of Adjusted EBITDA attributable to MPLX LP, respectively. For the nine months ended September 30, 2018, the L&S and G&P segments made up $1,510 million and $1,054 million of Adjusted EBITDA attributable to MPLX LP, respectively.

(1)


(2)	The adjusted EBITDA and DCF adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders prior to the acquisition date.


(3)	For the six months ended June 30, 2020, the L&S and G&P segments made up $1,711 million and $810 million of Adjusted EBITDA attributable to MPLX LP, respectively. For the six months ended June 30, 2019, the L&S and G&P segments made up $1,129 million and $721 million of Adjusted EBITDA attributable to MPLX LP, respectively.

Three months ended ~~September~~June 30, ~~2019~~2020 compared to three months ended ~~September~~June 30, ~~2018~~2019

Total revenues and other income ~~increased $568~~decreased $129 million in the ~~third~~second quarter of ~~2019~~2020 compared to the same period of ~~2018, of which $611 million~~2019. This decrease was primarily due to ~~the Merger. There was also increased~~lower G&P fees from lower volumes ~~and prices for pipeline transportation, terminals and marine~~ of ~~approximately $38~~$46 million as well as an ~~increase in~~unfavorable impact from lower prices of $87 million. There were also decreases due to lower L&S pipeline, terminal and storage volumes, including decreased throughputs on our Explorer and Bakken pipeline equity method ~~investments of $23 million which was mainly attributable to~~investments. These decreases were offset by favorable L&S rate impacts as well as increased ~~volumes in MarEn Bakken Company, LLC, Sherwood Midstream, Jefferson Dry Gas, Lincoln Pipeline~~volume deficiency payments, favorable impacts from increased marine

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~~LLC,~~equipment and ~~Utica EMG. G&P~~increased volumes in ~~the Marcellus and Southwest also contributed~~our Sherwood Midstream LLC joint venture due to ~~the increase in revenues of approximately $55 million.These increases were offset by lower revenues~~additional plants coming online in the ~~G&P segment due to lower prices in the Marcellus, Southern Appalachia and Southwest~~second half of approximately $151 million as well as by a decrease in the Delaware Basin Residue, LLC and LOCAP LLC joint ventures. The remainder of the increase relates to increased fees from Refining Logistics and Fuels Distribution, the Mt. Airy acquisition, the Robinson Butane Cavern and the recognition of revenue related to volume deficiencies.2019.

Cost of Revenues ~~increased $166~~decreased $38 million in the ~~third~~second quarter of ~~2019~~2020 compared to the same period of ~~2018, of which $152 million was due to the Merger. The remaining variance was~~2019, primarily due to ~~increased~~lower operating costs due to ~~operate new~~lower throughput, lower project-related spend and ~~expanded assets such as the Mt. Airy Terminal, the expanded Ozark pipeline, additional marine vessels, and the completed Robinson Butane cavern, as well as increased~~ other miscellaneous ~~expenses.~~expense decreases.

Purchased product costs decreased ~~$112~~$79 million in the ~~third~~second quarter of ~~2019~~2020 compared to the same period of ~~2018.~~2019. This was primarily due to lower prices of ~~$98~~$49 million in the Southwest and Southern Appalachia and lower costs from lower volumes of $36 million in the Southwest. This was partially offset by ~~higher volumes~~an increase of ~~$13~~$6 million in unrealized derivative losses from prior year.

Purchases - related parties decreased $33 million in the same regions. In addition, there was a decrease of $27 million in unrealized losses associated with derivatives which was driven by an unrealized gain in 2019 as a result of changes in commodity prices.

~~Rental Cost of Sales - related parties increased $44 million in the third~~second quarter of ~~2019~~2020 compared to the same period of ~~2018~~2019. This was primarily due to ~~the Merger, the acquisition of the Mt. Airy Terminal~~lower project spend and ~~to operate the new butane cavern.~~

Purchases - related parties increased $75 million in the third quarter of 2019 compared to the same period of 2018, of which $63 million was due to the Merger. The remainder of the change was due to increased employee-related costs.product purchases from MPC.

Depreciation and amortization expense increased ~~$101~~$8 million in the ~~third~~second quarter of ~~2019~~2020 compared to the same period of ~~2018, of which $88 million was due to the Merger. The remaining variance was~~2019, primarily due to ~~the acquisition of the Mt. Airy Terminal and additions to in-service~~ property, plant and equipment ~~throughout 2018~~placed in service in the second half of 2019 and the first ~~nine~~six months of ~~2019, slightly offset by write-downs of equipment no longer in use in the prior year.~~

General and Administrative expenses increased $26 million in the third quarter of 2019 compared to the same period of 2018, which was due to the Merger, including $9 million of transaction related costs.2020.

Net interest expense and other financial costs ~~increased $80~~decreased $6 million in the ~~third~~second quarter of ~~2019~~2020 compared to the same period of ~~2018. The increase is mainly~~2019 due to decreased interest on variable rate debt as a result of lower interest rates during the quarter.

General and administrative expenses increased $6 million in the second quarter of 2020 compared to the same period of 2019 primarily due to increased ~~interest and financing~~employee costs related to the new senior notes issued in the fourth quarter of 2018, interest on the new variable rate notes and term loan issued in the third quarter of 2019, and inclusion of the exchange notes during the full year 2019 but not 2018.from MPC.

~~Nine~~Six months ended ~~September~~June 30, ~~2019~~2020 compared to ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019

Total revenues and other income ~~increased $2,015~~decreased $1,372 million in the first ~~nine~~six months of ~~2019~~2020 compared to the same period of ~~2018,~~2019. The large decrease was driven by our ownership in MarkWest Utica EMG, L.L.C. (“MarkWest Utica EMG”), our indirect ownership in Ohio Gathering Company, L.L.C. through our investment of ~~which $1,791~~MarkWest Utica EMG and our ownership in Uintah Basin Field Services, L.L.C., as we recognized impairments related to these investments in the first quarter of 2020 in the amount of $1,264 million. Also contributing to the decrease was lower G&P fees from lower volumes of $6 million ~~was~~and an unfavorable impact from lower prices of $171 million. There were also decreases due to ~~the Merger. The remaining variance was due mainly to a $114 million increase from the acquisition of Refining Logistics~~lower L&S pipeline, terminal and ~~Fuels Distribution~~storage volumes, including decreased throughputs on our Explorer and ~~its annual fee escalation~~Bakken pipeline equity method investments. These decreases were offset by favorable L&S rate impacts as well as increased ~~volumes~~volume deficiency payments, favorable impacts from increased marine equipment and prices for pipeline transportation, terminals and marine of $122 million. We also experienced higher revenues from G&P volume growth in the Marcellus and Southwest of approximately $255 million offset by decreased pricing on product sales of approximately $311 million in the Marcellus, Southern Appalachia and Southwest. Equity method investments provided a $50 million increase which was mainly attributable to increased volumes in ~~MarEn Bakken Company, LLC,~~our Sherwood Midstream ~~Jefferson Dry Gas, Lincoln Pipeline~~ LLC ~~and Utica EMG. These increases were partially offset by a decrease~~joint venture due to additional plants coming online in the ~~Explorer Pipeline Co., Delaware Basin Residue, LLC, and LOCAP LLC ventures. There were also increase related to the Mt. Airy acquisition, the Robinson Butane Cavern and the recognition~~second half of ~~revenue related to volume deficiencies of $30 million in total. The remainder of the difference is due to lower cost reimbursements in the Marcellus.~~2019.

Cost of Revenues ~~increased $419~~decreased $9 million in the first ~~nine~~six months of ~~2019~~2020 compared to the same period of ~~2018, of which $400 million is due to the Merger. The remaining variance was~~2019, primarily due to ~~increased~~lower project-related costs, ~~to operate new~~which include repairs, maintenance and ~~expanded assets such as~~operating costs in the ~~Mt. Airy Terminal, the expanded Ozark pipeline, additional marine vessels,~~L&S and ~~the completed Robinson Butane cavern.~~G&P segments.

Purchased product costs decreased ~~$143~~$138 million in the first ~~nine~~six months of ~~2019~~2020 compared to the same period of ~~2018.~~2019. This was primarily due to lower prices of ~~$216~~$94 million in the Southwest and Southern Appalachia ~~as well as~~and $31 million from lower volumes in the Southwest. There was also a decrease of $13 million due to unrealized derivative gains in the current year compared to unrealized derivative losses ~~which~~in the prior year.

Rental cost of sales - related parties increased $8 million in the first six months of 2020 compared to the same period of 2019. This was ~~driven an unrealized gain in 2019 as a result of changes in commodity prices. These decreases were~~primarily due to project costs incurred, partially offset by ~~higher volumes of $98~~lower operating costs due to reduced throughput.

Purchases - related parties decreased $35 million in the ~~Southwest~~first six months of 2020 compared to the same period of 2019. This was primarily due to lower product purchases from MPC, lower project spend and ~~Southern Appalachia.~~decreased other miscellaneous costs from

MPC.

Depreciation and amortization expense increased $32 million in the first six months of 2020 compared to the same period of 2019, primarily due to property, plant and equipment placed in service in the second half of 2019 and the first six months of 2020.

Impairment expense increased $2,165 million in the first six months of 2020 compared to the same period of 2019. 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

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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 has reduced production growth forecasts from our producer customers.

~~Rental Cost of Sales~~Other taxes increased $9$6 million in the first ~~nine~~six months of ~~2019~~2020 compared to the same period of ~~2018 due to the acquisition of the Mt. Airy Terminal and to operate the new butane cavern.~~

~~Rental Cost of Sales - related parties increased $122 million in the first nine months of~~ 2019 ~~compared to the same period of 2018, of which $116 million is due to the Merger.~~

~~Purchases-related parties increased $266 million in the first nine months of 2019 compared to the same period of 2018, of which $204 million was due to the Merger. The remaining increase was~~ primarily due to ~~the acquisition of Refining Logistics~~prior period refunds and ~~Fuels Distribution as well as to increases in employee-related costs~~

Depreciation and amortization expense increased $351 million in the first nine months of 2019 compared to the same period of 2018, of which $277 million was due to the Merger. The remaining variance was primarily due to the acquisitions of Refining Logistics and the Mt. Airy Terminal; additions to in-service property, plant and equipment throughout 2018 and the first nine months of 2019; slightly offset by write-downs of equipment no longer in use in the prior year.

General and administrative expenses increased $76 million in the first nine months of 2019 compared to the same period of 2018, of which $65 million was due to the Merger, including $14 million of acquisitions costs related to the Merger. The remaining variance was primarily due to the acquisition of Refining Logistics and Fuels Distribution and other employee-related costs.

~~Other taxes increased $29 million in the first nine months of 2019 compared to the same period of 2018, primarily due to the Merger.~~

Net interest expense and other financial costs increased $252 million in the first nine months of 2019 compared to the same period of 2018. The increase is primarily due to increased interest and financing costs related to the new senior notes issued in the fourth quarter of 2018, interest on the new variable rate notes and term loan issued in the third quarter of 2019 and inclusion of the exchange notes during the full year 2019 but not 2018.credits.

SEGMENT RESULTS

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

The tables below present information about Segment Adjusted EBITDA for the reported segments for the three and six months ended June 30, 2020 and 2019. Prior period financial information has been retrospectively adjusted for common control transactions.

Table of Contents

L&S Segment

~~(1)~~


(1)	Includes adjusted EBITDA attributable to Predecessor.



	Three Months Ended June 30,									Six Months Ended June 30,
(In millions)	2020			2019			Variance			2020			2019			Variance
Service revenue	$	931		$	922		$	9		$	1,935		$	1,811		$	124
Rental income	246			296			(50		)	488			631			(143		)
Product related revenue	21			20			1			40			35			5
Income from equity method investments	40			54			(14		)	90			99			(9		)
Other income	52			16			36			103			28			75
Total segment revenues and other income	1,290			1,308			(18		)	2,656			2,604			52
Cost of revenues	190			219			(29		)	428			445			(17		)
Purchases - related parties	211			227			(16		)	410			417			(7		)
Depreciation and amortization	138			134			4			276			260			16
General and administrative expenses	52			42			10			104			93			11
Other taxes	18			11			7			34			27			7
Segment income from operations	681			675			6			1,404			1,362			42
Depreciation and amortization	138			134			4			276			260			16
Income from equity method investments	(40		)	(54		)	14			(90		)	(99		)	9
Distributions/adjustments related to equity method investments	57			60			(3		)	114			114			—
Acquisition costs	—			4			(4		)	—			5			(5		)
Non-cash equity-based compensation	2			2			—			5			7			(2		)
Other	1			—			1			2			—			2
Adjusted EBITDA attributable to Predecessor	—			(251		)	251			—			(520		)	520
Segment adjusted EBITDA⁽¹⁾	839			570			269			1,711			1,129			582

Capital expenditures	108			230			(122		)	292			428			(136		)
Investments in unconsolidated affiliates	$	74		$	61		$	13		$	128		$	68		$	60


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

Three months ended June 30, 2020 compared to three months ended June 30, 2019

Service revenue increased $9 million in the second quarter of 2020 compared to the same period of 2019. This was primarily due to a $28 million increase due to the reclassification of lease income between service revenue, rental income and other income based on modifications to lease contracts and a $12 million increase from additional marine equipment. There was also in increase in volume deficiency payments, favorable price impacts and other miscellaneous items. These increases were partially offset by reduced pipeline and storage volumes.

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Three Months Ended September 30,
Nine Months Ended September 30,
(In millions) 2019
2018
Variance
2019
2018
Variance
Service revenue $ 976

$ 602

$ 374

$ 2,787

$ 1,682

$ 1,105
Rental income 304

191

113

935

526

409
Product related revenue 22

5

17

57

10

47
Income from equity method investments 60

43

17

159

123

36
Other income 17

12

5

45

36

9
Total segment revenues and other income 1,379

853

526

3,983

2,377

1,606
Cost of revenues 262

92

170

707

282

425
Purchases - related parties 216

182

34

633

501

132
Depreciation and amortization 113

62

51

373

171

202
General and administrative expenses 59

38

21

152

108

44
Other taxes 16

11

5

43

28

15
Segment income from operations 713

468

245

2,075

1,287

788
Depreciation and amortization 113

62

51

373

171

202
Income from equity method investments (60 )
(43 )
(17 )
(159 )
(123 )
(36 )
Distributions/adjustments related to equity method investments 70

57

13

184

164

20
Acquisition costs 9

—

9

14

3

11
Non-cash equity-based compensation 3

3

—

10

8

2
Other 1
—
1
1
—
1
Adjusted EBITDA attributable to Predecessor (83 )
—

(83 )
(603 )
—

(603 )
Segment adjusted EBITDA⁽¹⁾
766

547

219

1,895

1,510

385

Maintenance capital expenditures $ 57

$ 31

$ 26

$ 128

$ 78

$ 50

~~(1) See~~Rental income decreased $50 million in the ~~Reconciliation~~second quarter of ~~Adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders from Net income table for the reconciliation~~2020 compared to the ~~most directly comparable GAAP measure.~~same period of 2019, primarily due to a decrease of $66 million due to the reclassification of lease income between service revenue, rental income and other income based on modifications to lease contracts. The decrease was partially offset by an increase of $7 million from increased terminal storage revenue as well as other miscellaneous increases.

Income from equity method investments decreased $14 million in the second quarter of 2020 compared to the same period of 2019, primarily due to decreased throughput on the Explorer and Bakken pipelines due to declining demand during the second quarter of 2020.

Other income increased $36 million in the second quarter of 2020 compared to the same period of 2019, primarily due to an increase of $38 million due to the reclassification of lease income between service revenue, rental income and other income based on modifications to lease contracts.

Cost of revenues decreased $29 million in the second quarter of 2020 compared to the same period of 2019, primarily due to lower operating costs due to lower throughput, lower project-related spend and other miscellaneous expense decreases.

Purchases - related parties decreased $16 million in the second quarter of 2020 compared to the same period of 2019, primarily due to lower project spend and other miscellaneous expenses.

General and administrative expenses increased $10 million in the second quarter of 2020 compared to the same period of 2019, primarily due to increased employee costs from MPC.

~~Three~~Six months ended ~~September~~June 30, ~~2019~~2020 compared to ~~three~~six months ended ~~September~~June 30, ~~2018~~2019

Service revenue increased ~~$374~~$124 million in the ~~third quarter~~first six months of ~~2019~~2020 compared to the same period of ~~2018.~~2019. This was primarily due to an $83 million increase due to the ~~Merger which increased~~reclassification of lease income between service revenue, ~~by $300 million. The remaining variance was primarily due~~rental income and other income based on modifications to lease contracts and a $30 million increase in transportation volumes and prices, partially attributable to the completion of the Ozark expansion; $2 million from increased fees from Refining Logistics and Fuels Distribution; $1 million from additional storage capacity; a $6$25 million increase from additional marine ~~vessels; a $30 million increase in service revenue with a corresponding decrease~~equipment. There were also increases related to ~~rental income due to a change in marine lease income classification, and a $3 million increase in revenue recognized from~~ volume deficiency ~~payments.~~payments and favorable price impacts partially offset by unfavorable volume impacts.

Rental income ~~increased $113~~decreased $143 million in the ~~third quarter~~first six months of ~~2019~~2020 compared to the same period of ~~2018, of which $134 million was due to the Merger. The remaining variance was~~2019, primarily due to a ~~$30~~decrease of $159 million ~~decrease~~due to the reclassification of lease income between service revenue, rental income ~~with a corresponding increase~~and other income based on modifications to ~~service revenue due to a change in marine~~ lease ~~income classification. There~~contracts. The decrease was ~~also~~partially offset by an increase of $7$13 million from ~~the acquisition of the Mt. Airy Terminal and an increase of $2 million~~increased terminal storage revenue.

Income from ~~the annual Refining Logistics fee escalation.~~

~~Product related revenue increased $17~~equity method investments decreased $9 million in the ~~third quarter~~first six months of ~~2019~~2020 compared to the same period of ~~2018, which was~~2019, primarily due to decreased throughput on the ~~Merger.~~Explorer and Bakken pipelines due to declining demand during the second quarter of 2020.

~~Income from Equity method investments~~Other income increased ~~$17~~$75 million in the ~~third quarter~~first six months of ~~2019~~2020 compared to the same period of ~~2018,~~2019, primarily due to an increase of ~~which $10~~$76 million ~~was~~ due to the ~~Merger. The remaining variance was~~reclassification of lease income between service revenue, rental income and other income based on modifications to lease contracts.

Cost of revenues decreased $17 million in the first six months of 2020 compared to the same period of 2019, primarily due to lower operating costs due to lower throughput, lower project-related spend and other miscellaneous expense decreases.

Purchases - related parties decreased $7 million in the first six months of 2020 compared to the same period of 2019, primarily due to lower project spend and other miscellaneous expenses.

Depreciation and amortization increased $16 million in the first six months of 2020 compared to the same period of 2019, primarily due to property, plant and equipment placed in service in the second half of 2019 and the first six months of 2020.

General and administrative expenses increased $11 million in the first six months of 2020 compared to the same period of 2019, primarily due to increased ~~income~~employee costs from ~~MarEn Bakken, Explorer, and Lincoln, primarily due to increased throughput volumes, slightly offset by decreased income from LOCAP primarily due to lower throughput volumes.~~MPC.

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G&P Segment


(1)	Includes adjusted EBITDA attributable to Predecessor.



	Three Months Ended June 30,									Six Months Ended June 30,
(In millions)	2020			2019			Variance			2020			2019			Variance
Service revenue	$	489		$	544		$	(55	)	$	1,025		$	1,072		$	(47	)
Rental income	89			83			6			177			172			5
Product related revenue	151			231			(80		)	373			507			(134		)
Income/(loss) from equity method investments	49			29			20			(1,185		)	61			(1,246		)
Other income	13			15			(2		)	27			29			(2		)
Total segment revenues and other income/(loss)	791			902			(111		)	417			1,841			(1,424		)
Cost of revenues	199			199			—			410			392			18
Purchased product costs	87			166			(79		)	222			360			(138		)
Purchases - related parties	69			86			(17		)	146			174			(28		)
Depreciation and amortization	183			179			4			370			354			16
Impairment expense	—			—			—			2,165			—			2,165
General and administrative expenses	44			48			(4		)	89			98			(9		)
Other taxes	12			14			(2		)	27			28			(1		)
Segment income/(loss) from operations	197			210			(13		)	(3,012		)	435			(3,447		)
Depreciation and amortization	183			179			4			370			354			16
Impairment expense	—			—			—			2,165			—			2,165
(Income)/loss from equity method investments	(49		)	(29		)	(20		)	1,185			(61		)	1,246
Distributions/adjustments related to equity method investments	58			72			(14		)	125			140			(15		)
Unrealized derivative losses/(gains)⁽¹⁾	6			—			6			(9		)	4			(13		)
Non-cash equity-based compensation	1			3			(2		)	3			5			(2		)
Adjusted EBITDA attributable to Predecessor	—			(78		)	78			—			(142		)	142
Adjusted EBITDA attributable to noncontrolling interests	(8		)	(7		)	(1		)	(17		)	(14		)	(3		)
Segment Adjusted EBITDA⁽²⁾	388			350			38			810			721			89

Capital expenditures	110			326			(216		)	244			632			(388		)
Investments in unconsolidated affiliates	$	57		$	127		$	(70	)	$	94		$	255		$	(161	)

(1)

Table of Contents


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

~~Cost of Revenues increased $170~~

Three months ended June 30, 2020 compared to three months ended June 30, 2019

Service revenue decreased $55 million in the ~~third~~second quarter of ~~2019~~2020 compared to the same period of ~~2018, of which $148 million was due to the Merger. The remaining variance~~2019. This was primarily due to ~~increased costs~~lower fees from lower volumes in the Southwest, Bakken and Rockies of $38 million, a decrease due to ~~operate new and expanded assets such~~lower prices in the Bakken of $2 million as ~~the Mt. Airy Terminal, the expanded Ozark pipeline, additional marine vessels, the completed Robinson Butane cavern, increased employee related costs and~~well as other miscellaneous ~~expenses.~~decreases.

~~Purchases - related parties~~Rental income increased ~~$34~~$6 million in the ~~third~~second quarter of ~~2019~~2020 compared to the same period of ~~2018, of which $25 million was due to the Merger, with the remainder of the variance being due to employee-related costs.~~

Depreciation and amortization increased $51 million in the third quarter of 2019 compared to the same period of 2018, of which $42 million was due to the Merger. The remaining variance was primarily due to the acquisition of the Mt. Airy Terminal as well as additions to in-service property, plant and equipment throughout 2018 and the first nine months of 2019.

General and Administrative expenses increased $21 million in the third quarter of 2019 compared to the same period of 2018, which was due to the Merger, including $9 million of transaction related costs.

~~Nine months ended September 30, 2019 compared to nine months ended September 30, 2018~~

Service revenue increased $1,105 million in the first nine months of 2019 compared to the same period of 2018, of which $848 million was due to the Merger. The remaining variance was primarily due to an additional $71 million of revenue due to the acquisition of Refining Logistics and Fuels Distribution as well as from annual fee escalation; $83 million of revenue from increased transportation volumes and prices, partially attributable to the completion of the Ozark expansion; $4 million from increased revenue from volume deficiency credits; $7 million of revenue from additional storage capacity; $7 million from increased terminal throughput; $18 million from additional marine vessels; and a $57 million increase due to the reclassification of certain lease revenue from rental income to service revenue.

Rental income increased $409 million in the first nine months of 2019 compared to the same period of 2018, of which $402 million was due to the Merger. The remaining variance was primarily due to an additional $43 million of revenue from the acquisition of Refining Logistics, $5 million from the completion of a new butane cavern, and $20 million from the acquisition of the Mt. Airy Terminal. These increases were offset by a $57 million decrease due to the reclassification of certain lease revenue from rental income to service revenue and by a $7 million decrease due to the acceleration of straight-line rent, both due to a change in lease classification.

~~Product related revenue increased $47 million in the first nine months of 2019 compared to the same period of 2018, of which $46 million was due to the Merger.~~

Income from Equity method investments increased $36 million in the first nine months of 2019 compared to the same period of 2018, of which $19 million was due to the Merger. The remaining variance was due to increased income from MarEn Bakken and Lincoln, primarily due to increased throughput volumes, offset by decreased income from LOCAP primarily due to lower throughput volumes and decreased income from Explorer primarily due to an upward adjustment to income in 2018 for a change in the corporate tax rate.

~~Other income increased $9 million in the first nine months of 2019 compared to the same period of 2018, primarily related to a gain recognized on the sale of assets.~~

Cost of revenues increased $425 million in the first nine months of 2019 compared to the same period of 2018, of which $396 million was due to the Merger. The remaining variance was primarily due to increased costs to operate new and expanded assets such as the Mt. Airy Terminal, the expanded Ozark pipeline, additional marine vessels, and the completed Robinson Butane cavern.

Purchases - related parties increased $132 million in the first nine months of 2019 compared to the same period of 2018, of which $83 million was due to the Merger. The remainder was primarily related to the acquisition of Refining Logistics and Fuels Distribution and increased employee-related costs.

Depreciation and amortization increased $202 million in the first nine months of 2019 compared to the same period of 2018, of which $162 million was due to the Merger. The remaining variance was primarily due to the acquisitions of Refining Logistics and the Mt. Airy Terminal as well as additions to in-service property, plant and equipment throughout 2018 and the first nine months of 2019.

~~Table of Contents~~

General and administrative expenses increased $44 million in the first nine months of 2019 compared to the same period of 2018, which was primarily due to the Merger and included $14 million of acquisitions costs related to the Merger.

~~Other taxes increased by $15 million in the first nine months of 2019 compared to the same period of 2018, primarily due to the Merger.~~

~~G&P Segment~~

~~(1) Includes adjusted EBITDA attributable to Predecessor.~~

Three Months Ended September 30,
Nine Months Ended September 30,
(In millions) 2019 2018
Variance
2019 2018 Variance
Service revenue $ 555

$ 422

$ 133

$ 1,627

$ 1,154
$ 473
Rental income 88

88

—

260

251
9
Product related revenue 207

311

(104 )
714

831
(117 )
Income from equity method investments 35

21

14

96

52
44
Other income 16

17

(1 )
45

45
—
Total segment revenues and other income 901

859

42

2,742

2,333
409
Cost of revenues 227

182

45

619

494
125
Purchased product costs 129

241

(112 )
489

632
(143 )
Purchases - related parties 87

46

41

261

127
134
Depreciation and amortization 189

139

50

543

394
149
General and administrative expenses 43

38

5

141

109
32
Other taxes 13

9

4

41

27
14
Segment income from operations 213

204

9

648

550
98
Depreciation and amortization 189

139

50

543

394
149
Income from equity method investments (35 )
(21 )
(14 )
(96 )
(52 ) (44 )
Distributions/adjustments related to equity method investments 75

55

20

215

150
65
Unrealized derivative (gains)/losses⁽¹⁾
(11 )
17

(28 )
(7 )
18
(25 )
Non-cash equity-based compensation 2

3

(1 )
7

7
—
Adjusted EBITDA attributable to Predecessor (25 ) —
(25 ) (167 ) —
(167 )
Adjusted EBITDA attributable to noncontrolling interests (9 )
(7 )
(2 )
(23 )
(13 ) (10 )
Segment Adjusted EBITDA⁽²⁾
399

390

9

1,120

1,054
66

Maintenance capital expenditures $ 18

$ 9
$ 9

$ 46

$ 20
$ 26

~~Table of Contents~~

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

~~Three months ended September 30, 2019 compared to three months ended September 30, 2018~~

~~Service revenue increased $133 million in the third quarter of 2019 compared to the same period of 2018.~~ This was primarily due to ~~the Merger which increased service revenue by $123 million. The remaining increase was due to~~ higher ~~fees~~rental income from higher volumes ~~in the Marcellus and Southwest, partially offset by lower cost reimbursement revenue~~ in the Marcellus.

Product related revenue decreased ~~$104~~$80 million in the ~~third~~second quarter of ~~2019~~2020 compared to the same period of ~~2018.~~2019. This was primarily due to lower prices in all of the G&P regions of approximately $85 million and lower volumes in the Southwest ~~Southern Appalachia and Marcellus~~ of ~~approximately $151 million~~$34 million. This was partially offset by ~~$25~~$20 million of volume increases in the Marcellus, Rockies and at our Javelina plant in the Southwest ~~and increased revenues due to the Merger of $22 million.~~(this plant experienced downtime for maintenance in 2019), as well as other miscellaneous increases.

Income from equity method investments increased ~~$14~~$20 million in the ~~third~~second quarter of ~~2019~~2020 compared to the same period of ~~2018.~~2019. This increase was ~~primarily~~ due to ~~growth~~lower basis differential amortization related to MarkWest Utica EMG as a result of impairments recorded in the first quarter of 2020 and an increase from the Sherwood Midstream LLC joint venture due to additional plants coming online atduring the ~~end~~second half of 2018, an increase in the Utica EMG joint venture as a result of assets written off in the prior period, an increase in the Jefferson Dry Gas joint venture as a result of higher dry gas gathering volumes and assets placed in service and a small increase due to the Merger. These increases were partially offset by a decrease in the Delaware Basin Residue, LLC joint venture driven by unrealized derivative losses.2019.

~~Cost of revenues increased $45~~Purchased product costs decreased $79 million in the ~~third~~second quarter of ~~2019~~2020 compared to the same period of ~~2018, which is attributable to the Merger.~~

~~Purchased product costs decreased $112 million in the third quarter of 2019 compared to the same period of 2018.~~2019. This was primarily due to lower prices of ~~$98~~$49 million in the Southwest and Southern Appalachia and lower costs from lower volumes of $36 million in the Southwest. This was partially offset by ~~higher volumes~~an increase of ~~$13 million in the same regions. In addition, there was a decrease of $27~~$6 million in unrealized derivative losses ~~associated with derivatives which was driven by an unrealized gain in 2019 as a result of changes in commodity prices.~~from prior year.

Purchases - related parties ~~increased $41~~decreased $17 million in the ~~third~~second quarter of ~~2019~~2020 compared to the same period of ~~2018,~~2019, with ~~the majority of the increase~~this decrease primarily being attributable to ~~the Merger of approximately $38 million. The remainder~~aligning various expenses as a result of the ~~variance relates to increased employee related costs.~~ANDX acquisition and lower product purchases from MPC.

~~Depreciation and amortization increased $50~~Six months ended June 30, 2020 compared to six months ended June 30, 2019

Service revenue decreased $47 million in the ~~third quarter~~first six months of ~~2019~~2020 compared to the same period of ~~2018, with the majority of the increase being attributable~~2019. This was primarily due to the Merger of approximately $46 million. The remainder of the variance relates to additions to in-service property, plant and equipment throughout 2018 and the first nine month of 2019, slightly offset by write-downs of equipment no longer in uselower fees from lower volumes in the ~~prior year.~~Rockies of $19 million and lower prices in the Bakken of $3 million as well as other miscellaneous decreases.

~~Nine months ended September 30, 2019 compared to nine months ended September 30, 2018~~

~~Service revenue~~Rental income increased ~~$473~~$5 million in the first ~~nine~~six months of ~~2019~~2020 compared to the same period of 2018. The increase was primarily due to the Merger which increased service revenue by $375 million. Higher fees from higher volumes in the Marcellus and Southwest, partially offset by lower cost reimbursement revenue in the Marcellus also increased service revenue.

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

Product related revenue decreased ~~$117~~$134 million in the first ~~nine~~six months of ~~2019~~2020 compared to the same period of ~~2018.~~2019. This was primarily due to lower prices in all of the ~~Southwest, Southern Appalachia~~G&P regions of approximately $168 million and ~~Marcellus~~lower volumes of ~~$311~~$21 million in the Southwest. This was partially offset by $21 million of volume increases in the ~~Southwest of $114 million. A portion of~~Rockies and the ~~volume increase~~Javelina plant in the Southwest ~~was offset by a volume decrease due to~~(this plant experienced downtime ~~at the Javelina facility. The overall decrease was offset by higher revenues~~for maintenance in 2019), as ~~a result of the Merger which increased product related revenue by $88 million.~~well as other miscellaneous increases.

Income from equity method investments ~~increased $44~~decreased $1,246 million in the first ~~nine~~six months of ~~2019~~2020 compared to the same period of ~~2018.~~2019. The large decrease was driven by our ownership in MarkWest Utica EMG, our indirect ownership in Ohio Gathering Company, L.L.C. through our investment of MarkWest Utica EMG and our ownership in Uintah Basin Field Services, L.L.C., as we recognized impairments related to these investments in the first quarter of 2020 in the amount of $1,264 million. This was ~~primarily due to growth~~partially offset by an increase in the Sherwood Midstream LLC joint venture due to additional plants coming online atduring the ~~end~~second half of ~~2018, an increase~~2019.

Cost of revenues increased $18 million in the ~~Jefferson Dry Gas joint venture~~first six months of 2020 compared to the same period of 2019. The majority of the increase is attributable to aligning various expenses as a result of the ANDX acquisition as well as higher ~~dry gas gathering volumes~~repairs, maintenance and ~~assets placed in service, an increase~~operating costs in the ~~Utica EMG joint venture as a result of assets written off~~Marcellus offset by lower repairs, maintenance and operating costs in the ~~prior period~~Southwest, Southern Appalachia and ~~income from three additional joint ventures acquired~~Rockies.

Purchased product costs decreased $138 million in the ~~Merger which accounted for $11~~first six months of 2020 compared to the same period of 2019. This was primarily due to lower prices of $94 million ~~of the increase. These increases were partially offset by a decrease~~ in the ~~Delaware Basin Residue, LLC joint venture driven by unrealized derivative losses.~~

Southwest and Southern Appalachia and $31 million from lower volumes in

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~~Cost~~the Southwest. There was also a decrease of ~~revenues increased $125~~$13 million due to unrealized derivative gains in the current year compared to unrealized derivative losses in the prior year.

Purchases - related parties decreased $28 million in the first ~~nine~~six months of ~~2019~~2020 compared to the same period of ~~2018. The Merger increased costs by $122 million with the remaining increase being~~2019. This decrease is primarily attributable to ~~higher repairs~~aligning various expenses as a result of the ANDX acquisition and ~~maintenance costs in the Southwest.~~lower product purchases from MPC.

~~Purchased product costs decreased $143~~Depreciation and amortization increased $16 million in the first ~~nine~~six months of ~~2019~~2020 compared to the same period of ~~2018. This was~~2019 primarily due to ~~lower prices~~property, plant and equipment placed in service throughout the second half of ~~$216 million in~~2019 and the ~~Southwest and Southern Appalachia as well as a decrease in unrealized derivative losses which was driven by an unrealized gain in 2019 as a result~~first six months of ~~changes in commodity prices. These decreases were partially offset by higher volumes of $98 million in the Southwest and Southern Appalachia.~~2020.

~~Purchases - related parties~~Impairment expense increased ~~$134~~$2,165 million in the first ~~nine~~six months of ~~2019~~2020 compared to the same period of ~~2018. This was primarily due to an increase~~2019. During the first quarter of ~~$121~~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 ~~Merger with a portion~~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 ~~the increase also being attributable to an increases in employee-related costs.~~drilling activity, which has reduced production growth forecasts from our producer customers.

~~Depreciation~~General and ~~amortization increased $149~~administrative expenses decreased $9 million in the first ~~nine~~six months of ~~2019~~2020 compared to the same period of ~~2018. The Merger increased depreciation by $115 million with the remainder of the increase being attributable~~2019 due to ~~additions to in-service property, plant and equipment throughout 2018 and the first nine months of 2019 which was slightly offset by write-downs of equipment no longer in use in the prior year.~~

General and administrative expenses increased $32 million in the first nine months of 2019 compared to the same period of 2018. The Merger increased general and administrative expenses by $20 million with the remainder of the increase being attributable to higherlower employee related costs.

Other taxes increased $14 million in the first nine months of 2019 compared to the same period of 2018. The Merger increased other taxes by $9 million with the remainder of the increase being attributable to higher property taxes.

SEASONALITY

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

Our G&P segment can be affected by seasonal fluctuations in the demand for natural gas and NGLs and the related fluctuations in commodity prices caused by various ~~factors.~~factors including variations in weather patterns from year to year. We are able to manage the ~~above~~seasonality impacts through the execution of our marketing strategy and via our storage capabilities. Overall, our exposure to the ~~seasonal~~seasonality fluctuations is declining due to our growth in fee-based business.

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OPERATING DATA⁽¹⁾

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
L&S
Pipeline throughput (mbpd)
Crude oil pipelines 3,367
2,208
3,240
2,149
Product pipelines 1,859
1,182
1,875
1,135
Total pipelines 5,226
3,390
5,115
3,284

Average tariff rates ($ per barrel)⁽²⁾

Crude oil pipelines $ 0.97
$ 0.60
$ 0.94
$ 0.58
Product pipelines 0.77
0.86
0.73
0.80
Total pipelines $ 0.90
$ 0.69
$ 0.86
$ 0.66

Terminal throughput (mbpd) 3,292
1,474
3,267
1,468

Marine Assets (number in operation)⁽³⁾

Barges 264
256
264
256
Towboats 23
20
23
20



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
L&S
Pipeline throughput (mbpd)
Crude oil pipelines	2,733		3,242		2,971		3,174
Product pipelines	1,586		1,867		1,746		1,882
Total pipelines	4,319		5,109		4,717		5,056

Average tariff rates ($ per barrel)⁽²⁾
Crude oil pipelines	$	0.99	$	0.88	$	0.96	$	0.92
Product pipelines	0.84		0.75		0.81		0.72
Total pipelines	$	0.94	$	0.83	$	0.90	$	0.84

Terminal throughput (mbpd)	2,420		3,287		2,693		3,253

Marine Assets (number in operation)⁽³⁾
Barges	305		261		305		261
Towboats	23		23		23		23

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$q2gpfractionationthroughput.jpg$


	Three Months Ended September 30, 2019		Three Months Ended September 30, 2018		Three Months Ended June 30, 2020		Three Months Ended June 30, 2019
	MPLX LP⁽⁴⁾	MPLX LP Operated⁽⁵⁾	MPLX LP⁽⁴⁾	MPLX LP Operated⁽⁵⁾	MPLX LP⁽⁴⁾	MPLX LP Operated⁽⁵⁾	MPLX LP⁽⁴⁾	MPLX LP Operated⁽⁵⁾
G&P
Gathering Throughput (MMcf/d)
Marcellus Operations	1,271	1,271	1,201	1,201	1,385	1,385	1,266	1,266
Utica Operations	—	2,381	—	1,936	—	1,903	—	2,066
Southwest Operations	1,653	1,653	1,599	1,600	1,365	1,393	1,617	1,617
Bakken Operations	149	149	—	—	126	126	147	147
Rockies Operations	627	827	—	—	495	683	649	852
Total gathering throughput	3,700	6,281	2,800	4,737	3,371	5,490	3,679	5,948

Natural Gas Processed (MMcf/d)
Marcellus Operations	4,264	5,300	4,004	4,609	4,112	5,516	4,216	5,202
Utica Operations	—	866	—	857	—	585	—	823
Southwest Operations	1,667	1,667	1,479	1,479	1,412	1,510	1,558	1,558
Southern Appalachian Operations	254	254	226	226	223	223	243	243
Bakken Operations	149	149	—	—	126	126	147	147
Rockies Operations	568	568	—	—	516	516	585	585
Total natural gas processed	6,902	8,804	5,709	7,171	6,389	8,476	6,749	8,558

C2 + NGLs Fractionated (mbpd)
Marcellus Operations⁽⁶⁾	433	433	405	405	464	464	440	440
Utica Operations⁽⁶⁾	—	49	—	49	—	31	—	40
Southwest Operations	19	19	20	20	13	13	3	3
Southern Appalachian Operations⁽⁷⁾	13	13	14	14	12	12	12	12
Bakken Operations	29	29	—	—	19	19	21	21
Rockies Operations	4	4	—	—	4	4	3	3
Total C2 + NGLs fractionated⁽⁸⁾	498	547	439	488	512	543	479	519

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	Six Months Ended June 30, 2020		Six Months Ended June 30, 2019
	MPLX LP⁽⁴⁾	MPLX LP Operated⁽⁵⁾	MPLX LP⁽⁴⁾	MPLX LP Operated⁽⁵⁾
G&P
Gathering Throughput (MMcf/d)
Marcellus Operations	1,402	1,402	1,274	1,274
Utica Operations	—	1,852	—	2,087
Southwest Operations	1,461	1,497	1,600	1,600
Bakken Operations	141	141	150	150
Rockies Operations	544	729	644	839
Total gathering throughput	3,548	5,621	3,668	5,950

Natural Gas Processed (MMcf/d)
Marcellus Operations	4,155	5,519	4,185	5,175
Utica Operations	—	616	—	820
Southwest Operations	1,530	1,595	1,578	1,578
Southern Appalachian Operations	233	233	239	239
Bakken Operations	141	141	150	150
Rockies Operations	528	528	578	578
Total natural gas processed	6,587	8,632	6,730	8,540

C2 + NGLs Fractionated (mbpd)
Marcellus Operations⁽⁶⁾	460	460	430	430
Utica Operations⁽⁶⁾	—	33	—	43
Southwest Operations	14	14	10	10
Southern Appalachian Operations⁽⁷⁾	12	12	12	12
Bakken Operations	25	25	18	18
Rockies Operations	4	4	4	4
Total C2 + NGLs fractionated⁽⁸⁾	515	548	474	517

Nine Months Ended
September 30, 2019 Nine Months Ended
September 30, 2018

MPLX LP⁽⁴⁾

MPLX LP Operated⁽⁵⁾

MPLX LP⁽⁴⁾

MPLX LP Operated⁽⁵⁾
G&P
Gathering Throughput (MMcf/d)
Marcellus Operations 1,273
1,273
1,157
1,157
Utica Operations —
2,186
—
1,722
Southwest Operations 1,618
1,618
1,523
1,524
Bakken Operations 149
149
—
—
Rockies Operations 639
835
—
—
Total gathering throughput 3,679
6,061
2,680
4,403

Natural Gas Processed (MMcf/d)
Marcellus Operations 4,211
5,218
3,775
4,338
Utica Operations —
835
—
889
Southwest Operations 1,608
1,608
1,403
1,403
Southern Appalachian Operations 244
244
244
244
Bakken Operations 149
149
—
—
Rockies Operations 575
575
—
—
Total natural gas processed 6,787
8,629
5,422
6,874

C2 + NGLs Fractionated (mbpd)
Marcellus Operations⁽⁶⁾
431
431
374
374
Utica Operations⁽⁶⁾
—
45
—
46
Southwest Operations 13
13
18
18
Southern Appalachian Operations⁽⁷⁾
12
12
13
13
Bakken Operations 22
22
—
—
Rockies Operations 4
4
—
—
Total C2 + NGLs fractionated⁽⁸⁾
482
527
405
451



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Pricing Information
Natural Gas NYMEX HH ($ per MMBtu)	$	1.76	$	2.51	$	1.81	$	2.69
C2 + NGL Pricing ($ per gallon)⁽⁹⁾	$	0.34	$	0.52	$	0.37	$	0.57


(1)	Operating data is inclusive of operating data for ANDX.


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


(3)	Represents total at end of period.


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


(5)	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.

(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. Marcellus Operations includes Ohio Fractionation’s portion utilized of the jointly owned Hopedale Fractionation Complex. Utica Operations includes MarkWest Utica EMG’s portion utilized of the jointly owned Hopedale Fractionation Complex. Additionally, Sherwood Midstream has the right to fractionation revenue and the obligation to pay expenses related to 40 mbpd of capacity in the Hopedale 3 and Hopedale 4 fractionators.


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

(8)

Purity ethane makes up approximately 193 mbpd and 195 mbpd of total MPLX Operated, fractionated products for the three months ended June 30, 2020 and 2019, respectively, and approximately 191 mbpd and 192 mbpd of total fractionated products for the six months ended June 30, 2020 and 2019, respectively. Purity ethane makes up approximately 186 mbpd and 189 mbpd of total MPLX LP consolidated, fractionated products for the three months ended June 30, 2020 and 2019, respectively, and approximately 184 mbpd and 183 mbpd of total fractionated products for the six months ended June 30, 2020 and 2019, respectively.

Three Months Ended
September 30, Nine Months Ended
September 30,
2019 2018 2019 2018
Pricing Information
Natural Gas NYMEX HH ($ per MMBtu) $ 2.33
$ 2.86
$ 2.57
$ 2.85
C2 + NGL Pricing ($ per gallon)⁽⁹⁾
$ 0.44
$ 0.90
$ 0.53
$ 0.81

~~(1) Operating data is inclusive of operating data for ANDX for all of 2019.~~

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

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

~~(4) This column represents operating data for entities that have been consolidated into the MPLX financial statements.~~

~~(5) 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.~~

(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. Marcellus Operations includes Ohio Fractionation’s portion utilized of the jointly owned Hopedale Fractionation Complex. Utica Operations includes MarkWest Utica EMG’s portion utilized of the jointly owned Hopedale Fractionation Complex. Additionally, Sherwood Midstream has the right to fractionation revenue and the obligation to pay expenses related to 40 mbpd of capacity in the Hopedale 3 and Hopedale 4 fractionators.

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

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(8) Purity ethane makes up approximately 182 mbpd and 198 mbpd of total MPLX Operated, fractionated products for the three months ended September 30, 2019 and 2018, respectively, and approximately 189 mbpd and 183 mbpd of total fractionated products for the nine months ended September 30, 2019 and 2018, respectively. Purity ethane makes up approximately 172 mbpd and 183 mbpd of total MPLX LP consolidated, fractionated products for the three months ended September 30, 2019 and 2018, respectively, and approximately 179 mbpd and 169 mbpd of total fractionated products for the nine months ended September 30, 2019 and 2018, 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.


(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.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

Our cash and cash equivalents ~~and restricted cash was $41~~were $67 million at ~~September~~June 30, ~~2019~~2020 and ~~$85~~$15 million at December 31, ~~2018.~~2019. The change in cash, 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,						Six Months Ended June 30,
(In millions)	2019			2018			2020			2019
Net cash provided by (used in):
Operating activities	$	2,990		$	2,027		$	2,114		$	1,954
Investing activities	(2,189		)	(2,027		)	(777		)	(1,439		)
Financing activities	(845		)	30			(1,285		)	(568		)
Total	$	(44	)	$	30		$	52		$	(53	)

Net cash provided by operating activities increased ~~$963~~$160 million in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018,~~2019, primarily due to ~~the increase in~~increased net income ~~period over period which was most impacted by the Merger which is included for all nine months in 2019 and not in 2018. Net income~~of $22 million, excluding impairments, as well as other changes related to ~~the Merger was approximately $539 million. Other less significant impacts include adjustments for~~ depreciation and amortization ~~adjustments related to equity method investments~~ and ~~adjustments for~~ changes in working capital ~~items which were also impacted by the previously mentioned acquisitions.~~items.

Net cash used in investing activities ~~increased $162~~decreased $662 million in the first ~~nine~~six months of ~~2019~~2020 compared to the first ~~nine~~six months of ~~2018,~~2019, primarily due to decreased spending related to the capital budget, ~~as well as increased~~a return of capital from our investments in Wink to Webster and Whistler and decreased contributions to equity method ~~investments, offset by a decrease in cash used for acquisitions (related to the Mt. Airy acquisition in 2018).~~investments.

Financing activities were ~~an $845~~a $1,285 million use of cash in the first ~~nine~~six months of ~~2019~~2020 compared to a ~~$30~~$568 million ~~source~~use of cash in the first ~~nine~~six months of ~~2018.~~2019. The use of cash for the first ~~nine~~six months of ~~2019~~2020 was primarily due to distributions of ~~$1,731~~$1,445 million to common unitholders, distributions of ~~$61~~$41 million to Series A preferred unitholders, distributions of $21 million to Series B preferred unitholders, distributions of ~~$20~~$17 million to noncontrolling interests, ~~Predecessor distributions of $502 million,~~ repayment of ~~$1,245~~$1,675 million ~~under credit facilities~~on the MPLX Credit Agreement, payments of $7 million related to financing leases, and ~~debt issuance costs~~repayment of ~~$20 million.~~$3,302 million on the MPC Loan Agreement. These uses of cash were offset by ~~net~~ borrowings of ~~$125~~$2,500 million on the revolving credit facility, $2,708 million on the MPC Loan Agreement, ~~net borrowings of $500 million on the term loan, $2,000~~and $20 million of ~~borrowings related to the floating rate senior notes and $94 million and $52 million in~~ contributions from ~~noncontrolling interests and MPC, respectively.~~MPC.

Debt and Liquidity Overview

Our outstanding borrowings at ~~September~~June 30, ~~2019 and December 31, 2018~~2020 consist of the following:

(In millions) September 30, 2019 December 31, 2018
MPLX LP:
Bank revolving credit facility due 2024 —
—
Term loan facility due 2021 500
—
Floating rate senior notes due September 2021 1,000
—
Floating rate senior notes due September 2022 1,000
—
6.250% senior notes due October 2022 266
—
3.500% senior notes due December 2022 486
—
3.375% senior notes due March 2023 500
500
4.500% senior notes due July 2023 989
989
6.375% senior notes due May 2024 381
—
4.875% senior notes due December 2024 1,149
1,149
5.250% senior notes due January 2025 708
—
4.000% senior notes due February 2025 500
500
4.875% senior notes due June 2025 1,189
1,189
4.125% senior notes due March 2027 1,250
1,250
4.250% senior notes due December 2027 732
—
4.000% senior notes due March 2028 1,250
1,250
4.800% senior notes due February 2029 750
750
4.500% senior notes due April 2038 1,750
1,750
5.200% senior notes due March 2047 1,000
1,000
5.200% senior notes due December 2047 487
—
4.700% senior notes due April 2048 1,500
1,500
5.500% senior notes due February 2049 1,500
1,500
4.900% senior notes due April 2058 500
500
Consolidated subsidiaries:
MarkWest - 4.500% - 4.875% senior notes, due 2023-2025 23
23
ANDX - 3.500% - 6.375% senior notes, due 2019-2047 690
3,750
ANDX credit facilities —
1,245
Financing lease obligations 20
21
Total 20,120
18,866
Unamortized debt issuance costs (109 ) (97 )
Unamortized discount/premium (311 ) (334 )
Amounts due within one year (510 ) (513 )
Total long-term debt due after one year $ 19,190
$ 17,922

~~Term Loan Agreement~~

On September 26, 2019, MPLX entered into a Term Loan Agreement which provides for a committed term loan facility for up to an aggregate of $1 billion available to be drawn in up to four separate borrowings, subject to the satisfaction or waiver of certain customary conditions. If not fully utilized, the term loan commitments expire 90 days after September 26, 2019. Borrowings under the Term Loan Agreement bear interest, at MPLX’s election, at either (i) the Adjusted LIBO Rate (as defined in the Term Loan Agreement) plus a margin ranging from 75.0 basis points to 100.0 basis points per annum, depending on MPLX’s credit ratings, or (ii) the Alternate Base Rate (as defined in the Term Loan Agreement). The proceeds from borrowings under the Term Loan Agreement were used to fund the repayment of MPLX’s existing indebtedness and/or for general business purposes. Amounts borrowed under the Term Loan Agreement will be due and payable on September 26, 2021.



(In millions)	June 30, 2020
MPLX LP:
Bank revolving credit facility	$	825
Term loan facility	1,000
Floating rate senior notes	2,000
Fixed rate senior notes	16,887
Consolidated subsidiaries:
MarkWest	23
ANDX	190
Financing lease obligations	13
Total	20,938
Unamortized debt issuance costs	(100		)
Unamortized discount/premium	(279		)
Amounts due within one year	(3		)
Total long-term debt due after one year	$	20,556

6555

The Term Loan Agreement contains representations and warranties, affirmative and negative covenants and events of default that we consider to be customary for an agreement of this type and are substantially similar to those contained in the MPLX Credit Agreement, including a covenant that requires MPLX’s ratio of Consolidated Total Debt to Consolidated EBITDA (as both terms are defined in the Term Loan Agreement) for the four prior fiscal quarters not to exceed 5.0 to 1.0 as of the last day of each fiscal quarter (or during the six-month period following certain acquisitions, 5.5 to 1.0). Consolidated EBITDA is subject to adjustments for certain acquisitions completed and capital projects undertaken during the relevant period.

~~Floating Rate Senior Notes~~

On September 9, 2019, MPLX issued $2.0 billion aggregate principal amount of floating rate senior notes in a public offering, consisting of $1.0 billion aggregate principal amount of notes due September 2021 and $1.0 billion aggregate principal amount of notes due September 2022 (collectively, the “Floating Rate Senior Notes”). The Floating Rate Senior Notes were offered at a price to the public of 100 percent of par. The proceeds were used to repay MPLX’s existing indebtedness and/or for general business purposes. Interest on the Floating Rate Senior Notes is payable quarterly in March, June, September and December, commencing on December 9, 2019. The interest rate applicable to the floating rate senior notes due September 2021 is LIBOR plus 0.9 percent per annum. The interest rate applicable to the floating rate senior notes due September 2022 is LIBOR plus 1.1 percent per annum.

~~Fixed Rate Senior Notes~~

In connection with the Merger, MPLX assumed ANDX’s outstanding senior notes which had an aggregate principal amount of $3.75 billion, interest rates ranging from 3.5 percent to 6.375 percent and maturity dates ranging from 2019 to 2047. On September 23, 2019, approximately $3.06 billion aggregate principal amount of ANDX’s outstanding senior notes were exchanged for an aggregate principal amount of approximately $3.06 billion new unsecured senior notes (the “Exchange Notes”) issued by MPLX in an exchange offer and consent solicitation undertaken by MPLX, leaving approximately $690 million aggregate principal of outstanding senior notes held by ANDX. Of this, $500 million is related to 5.5 percent unsecured senior notes due 2019. The principal amount of $500 million and accrued interest of $13.75 million was paid on October 15, 2019 using proceeds from the Floating Rate Senior Notes and borrowings under the Term Loan Agreement discussed above and includes interest through the payoff date.



~~Senior Notes~~	~~Interest payable semi-annually in arrears~~
~~6.250% senior notes due October 2022~~	~~April 15~~^th ~~and October 15~~^th
~~3.500% senior notes due December 2022~~	~~June 1~~^st ~~and December 1~~^st
~~6.375% senior notes due May 2024~~	~~May 1~~^st ~~and November 1~~^st
~~5.250% senior notes due January 2025~~	~~January 15~~^th ~~and July 15~~^th
~~4.250% senior notes due December 2027~~	~~June 1~~^st ~~and December 1~~^st
~~5.200% senior notes due December 2047~~	~~June 1~~^st ~~and December 1~~^st

~~Credit Agreement~~

Effective July 30, 2019 in connection with the closing of the Merger, MPLX amended and restated the MPLX Credit Agreement to, among other things, increase its borrowing capacity to up to $3.5 billion and extend its term to July 30, 2024. The MPLX Credit Agreement includes certain representations and warranties, affirmative and negative covenants and events of default that we consider usual and customary for an agreement of its type. 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) for the prior four fiscal quarters of no greater than 5.0 to 1.0 (or 5.5 to 1.0 for up to two fiscal quarters following certain acquisitions). Consolidated EBITDA is subject to adjustments for certain acquisitions completed and capital projects undertaken during the relevant period. Other covenants restrict us and/or certain of our subsidiaries from incurring debt, creating liens on our assets and entering into transactions with affiliates. As of September 30, 2019, we were in compliance

with this financial covenant with a ratio of Consolidated Total Debt to Consolidated EBITDA of 3.80 to 1.0, as well as other covenants contained in the MPLX Credit Agreement. As disclosed in Note 2 of the Notes to Consolidated Financial Statements, the adoption of the lease accounting standards update resulted in the recognition of a significant lease obligation. The MPLX Credit Agreement contains provisions under which the effects of the new accounting standard are not recognized for purposes of financial covenant calculations.

~~MPC Loan Agreement~~

In connection with the Merger, on July 31, 2019, MPLX and MPC Investment amended and restated the MPC Loan Agreement to, among other things, increase the borrowing capacity under the MPC Loan Agreement to $1.5 billion in aggregate principal amount of all loans outstanding at any one time. The entire unpaid principal amount of the loan, together with all accrued and unpaid interest and other amounts (if any), shall become due and payable on 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 July 31, 2024.

Our intention is to maintain an investment grade credit profile. As of ~~November 1, 2019,~~June 30, 2020, the credit ratings on our senior unsecured debt were at or above investment grade level as follows:



Rating Agency		Rating
Moody’s		Baa2 (negative outlook)
Standard & Poor’s		BBB ~~(stable~~(negative outlook)
Fitch		BBB ~~(stable~~(negative 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 and ~~senior notes~~Term Loan Agreement contain 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 June 30, 2020, we were in compliance with the covenants, including the financial covenant with a ratio of Consolidated Total Debt to Consolidated EBITDA of 3.9 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 ~~would,~~could, among other things, increase the applicable interest rates and other fees payable under the MPLX Credit Agreement and the Term Loan Agreement and may limit our ~~flexibility~~ability to obtain future ~~financing.~~financing, including refinancing existing indebtedness.

Our liquidity totaled ~~$5.4~~$4.2 billion at ~~September~~June 30, ~~2019~~2020 consisting of:


	September 30, 2019							June 30, 2020
(In millions)	Total Capacity		Outstanding Borrowings			Available Capacity		Total Capacity		Outstanding Borrowings			Available Capacity
Bank revolving credit facility due 2024⁽¹⁾	$	3,500	$	(3	)	$	3,497	$	3,500	$	(825	)	$	2,675
Term Loan Agreement	1,000		(500		)	500
MPC Loan Agreement	1,500		(125		)	1,375		1,500		—			1,500
Total liquidity	$	6,000	$	(628	)	5,372		$	5,000	$	(825	)	4,175
Cash and cash equivalents						41							67
Total liquidity						$	5,413						$	4,242

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


(1)	Outstanding borrowings include less than $1 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 the MPC Loan Agreement, ~~and~~ the MPLX Credit ~~Agreement.~~Agreement and 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, and quarterly cash distributions. MPC manages our cash and cash equivalents on our behalf directly with third-party institutions as part of the treasury services that it provides to us under our omnibus agreement. From time to time, we may also consider utilizing other sources of liquidity, including the formation of joint ventures or sales of non-strategic assets.

6756

Equity and Preferred Units Overview

Common units

The table below summarizes the changes in the number of units outstanding through ~~September~~June 30, ~~2019:~~2020:



(In units)
Balance at December 31, ~~2018~~2019	~~794,089,518~~1,058,355,471
Unit-based compensation awards	~~287,019~~
~~Issuance of units in connection with the Merger~~	~~262,829,592~~
~~Conversion of Series A Preferred Units~~	~~1,148,330~~253,291
Balance at ~~September~~June 30, ~~2019~~2020	~~1,058,354,459~~1,058,608,762

In connection with the Merger on July 30, 2019, each common unit held by ANDX’s public unitholders was converted into the right to receive 1.135 MPLX common units while ANDX common units held by certain affiliates of MPC were converted into the right to receive 1.0328 MPLX common units. This resulted in the issuance of MPLX common units of approximately 102 million units to public unitholders and approximately 161 million units to MPC.

Unrelated to the Merger, during the quarter certain holders of our Series A preferred units exercised their rights to convert their Series A preferred units into common units. These impacts are reflected in the table above.

~~Series B Preferred Units~~

In connection with the Merger, we converted ANDX’s outstanding 600,000 units of 6.875 percent Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units representing limited partner interests of ANDX into preferred units of MPLX representing substantially equivalent limited partnership interests in MPLX (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. Distributions on the Series B preferred units are payable semi-annually in arrears on the 15th day, or the first business day thereafter, of February and August of each year through and including February 15, 2023. After February 15, 2023, the distribution will be made quarterly in arrears on the 15th day, or the first business day thereafter, of February, May, August and November of each year to holders of record as of the record date, which is generally the close of business on the first business day of the month of the applicable payment date.

ATM

MPLX expects the net proceeds, if any, from sales under our ATM Program will be used for general business purposes including repayment or refinancing of debt and funding for acquisitions, working capital requirements and capital expenditures. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, we issued no common units under our ATM program. As of ~~September~~June 30, ~~2019,~~2020, $1.7 billion of common units remain available for issuance through the ATM Program.

Distributions

We intend to pay ~~at least the~~a minimum quarterly distribution to the holders of our common units of $0.2625 per unit, or $1.05 per ~~quarter, which equates~~unit on an annualized basis, to the 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 $278 million per quarter, or ~~$1,111~~$1,112 million per year, based on the number of common units outstanding at ~~September~~June 30, ~~2019.~~2020. On ~~October 25, 2019,~~July 28, 2020, we announced the board of directors of our general partner had declared a distribution of ~~$0.6775~~$0.6875 per unit that will be paid on ~~November~~August 14, ~~2019~~2020 to unitholders of record on ~~November 4, 2019.~~August 7, 2020. This ~~represents an increase of $0.0100 per unit, or 1.5 percent, above~~is consistent with the ~~second~~first quarter ~~2019~~2020 distribution of ~~$0.6675~~$0.6875 per unit and an increase of ~~6.3~~3.0 percent over the ~~third~~second quarter ~~2018~~2019 distribution. This ~~increase in the distribution is consistent with our intent to maintain an attractive distribution growth profile over an extended period of time.~~rate will also be received by Series A preferred unitholders. Although our partnership agreement requires that we distribute all of our available cash each quarter, we do not otherwise have a legal obligation to distribute any particular amount per common unit.

The allocation of total quarterly cash distributions to general and limited partners is as follows for the three and nine months ended September 30, 2019 and 2018. Our distributions are declared subsequent to quarter end; therefore, the following table represents total cash distributions applicable to the period in which the distributions were earned for the distributions being declared in October. 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. Included in~~thereafter, up to and including February 15, 2023. After February 15, 2023, the ~~table below is $10 million~~holders of ~~distributions earned by the~~ Series B preferred units ~~for~~are entitled to receive cumulative, quarterly distributions payable in arrears on the ~~three months ended September 30, 2019~~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 will be paid to Series B unitholders on August 17, 2020.

TexNew Mex units are entitled to receive quarterly distribution payments in an amount calculated using the distributable cash flow generated by a particular portion of the TexNew Mex pipeline system, in excess of a base amount and adjusted for previously agreed upon stipulations and contingencies. During the three months ended June 30, 2020 a distribution of $2 million was earned as a result of increased volumes on the TexNew Mex pipeline due to the idling of MPC’s Gallup, New Mexico refinery.

The allocation of total quarterly cash distributions is as follows for the three and six months ended June 30, 2020 and 2019. 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.

6857

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2019 2018 2019 2018
Distribution declared:
Limited partner units - public $ 266
$ 185
$ 718
$ 545
Limited partner units - MPC⁽¹⁾
438
322
1,201
926
Total GP & LP distribution declared 704
507
1,919
1,471
Series A preferred units 20
19
61
55
Series B preferred units 10
—
31
—
Total distribution declared 734
526
2,011
1,526

Cash distributions declared per limited partner common unit $ 0.6775
$ 0.6375
$ 2.0025
$ 1.8825

~~(1) The three and nine months ended September 30, 2019 amounts are net of $12.5 million and $25 million of waived distributions, respectively, with respect to units held by MPC and its affiliates.~~



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per unit data)	2020		2019		2020		2019
Distribution declared:
Limited partner units - public	$	270	$	261	$	540	$	452
Limited partner units - MPC	445		431		903		763
Total LP distribution declared	715		692		1,443		1,215
Series A preferred units	21		21		41		41
Series B preferred units	10		21		21		21
Total distribution declared	746		734		1,505		1,277

Cash distributions declared per limited partner common unit	$	0.6875	$	0.6675	$	1.3750	$	1.3250

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 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 of additional pipeline, processing or storage capacity. In general, growth capital includes costs that are expected to generate additional or new cash flow for MPLX.

Our capital expenditures are shown in the table below:


	Nine Months Ended September 30,					Six Months Ended June 30,
(In millions)	2019			2018		2020			2019
Capital expenditures:
Maintenance	$	174		$	98	$	67		$	99
Maintenance reimbursements	(34		)	—		(20		)	(16		)
Growth	1,479			1,382		469			961
Growth reimbursements	(17		)	—		—			(12		)
Total capital expenditures	1,602			1,480		516			1,032
Less: Increase (decrease) in capital accruals	(67		)	90
Less: (Decrease)/increase in capital accruals						(172		)	(77		)
Asset retirement expenditures	1			7		—			1
Additions to property, plant and equipment, net of reimbursements⁽¹⁾	1,668			1,383		688			1,108
Investments in unconsolidated affiliates	494			215		222			323
Acquisitions	(5		)	451		—			(6		)
Total capital expenditures and acquisitions	2,157			2,049		910			1,425
Less: Maintenance capital expenditures (including reimbursements)	140			98		47			83
Acquisitions	(5		)	451		—			(6		)
Total growth capital expenditures⁽²⁾	$	2,022		$	1,500	$	863		$	1,348

~~(1)~~


(1)	This amount is represented in the Consolidated Statements of Cash Flows as Additions to property, plant and equipment after excluding growth and maintenance reimbursements. Reimbursements are shown as Contributions from MPC within the Financing activities section of the Consolidated Statements of Cash Flows.

(2)

Amount excludes contributions from noncontrolling interests of zero and $94 million for the six months ended June 30, 2020 and equipment after excluding growth and maintenance reimbursements. Reimbursements are shown as Contributions from MPC within the Financing activities section of the Consolidated Statements of Cash Flows.

~~(2) Amount excludes contributions from noncontrolling interests of $94 million and $8 million for the nine months ended September 30,~~ 2019, ~~and 2018,~~ respectively, as reflected in the financing section of our statement of cash flows. Also excludes a $69 million return of capital from our Wink to Webster Pipeline joint venture in the first quarter of 2020 and a $41 million return of capital from our Whistler Pipeline joint venture in the second quarter of 2020. These are reflected in the investing section of our statement of cash flows for the six months ended June 30, 2020.

6958

Contractual Cash Obligations

As of ~~September~~June 30, ~~2019,~~2020, our contractual cash obligations included long-term debt, finance and operating lease obligations, purchase obligations for services and to acquire property, plant and equipment, and other liabilities. During the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, our third-party, long-term debt obligations increased by ~~$1.26 billion. Also, in connection with the Merger, we assumed ANDX obligations related~~$825 million and was primarily used to ~~future purchase obligations included in fuel costs associated with the wholesale product supply agreement, NGLs transportation costs, fractionation fees, and fixed charges with MPC. This increased~~repay our ~~future obligations by approximately $11.9 billion as of September 30, 2019.~~MPC Loan Agreement. There were no other material changes to these obligations outside the ordinary course of business since December 31, ~~2018.~~2019.

Off-Balance Sheet Arrangements

Off-balance sheet arrangements comprise those arrangements that may potentially impact our liquidity, capital resources and results of operations, even though such arrangements are not recorded as liabilities under U.S. GAAP. Our off-balance sheet arrangements are limited to indemnities and guarantees that are described in Note ~~20.~~21. Although these arrangements serve a variety of our business purposes, we are not dependent on them to maintain our liquidity and capital resources, and we are not aware of any circumstances that are reasonably likely to cause the off-balance sheet arrangements to have a material adverse effect on our liquidity and capital resources.

TRANSACTIONS WITH RELATED PARTIES

At ~~September~~June 30, ~~2019,~~2020, MPC owned our non-economic general partnership interest and held approximately 63 percent of ~~the~~our outstanding ~~MPLX LP~~ common ~~units and the non-economic general partner interest.~~units.

Excluding revenues attributable to volumes shipped by MPC under joint tariffs with third parties that are treated as third-party revenues for accounting purposes, MPC accounted for 5456 percent and 4653 percent of our total revenues and other income for the ~~third~~second quarter of ~~2019~~2020 and ~~2018,~~2019, respectively. We provide crude oil and product pipeline transportation services based on regulated tariff rates and storage services and inland marine transportation based on contracted rates.

Of our total costs and expenses, MPC accounted for 3032 percent and 2730 percent for the ~~third~~second quarter of ~~2019~~2020 and ~~2018,~~2019, respectively. MPC performed certain services for us related to information technology, engineering, legal, accounting, treasury, human resources and other administrative services.

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, ~~2018~~2019 and Note 5 of the Notes to Consolidated Financial Statements in this report.

ENVIRONMENTAL MATTERS AND COMPLIANCE COSTS

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

As of ~~September~~June 30, ~~2019,~~2020, 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, ~~2018.~~2019.

CRITICAL ACCOUNTING ESTIMATES

As of ~~September~~June 30, ~~2019,~~2020, 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, ~~2018.~~2019, except as noted below.

Impairment Assessments of Long-Lived Assets, Intangible Assets, Goodwill and Equity Method Investments

Fair value calculated for the purpose of testing our long-lived assets, intangible assets, goodwill and equity method investments for impairment is estimated using the expected present value of future cash flows method and comparative market prices when appropriate. Significant judgment is involved in performing these fair value estimates since the results are based on forecasted assumptions. Significant assumptions include:


•	Future Operating Performance. Our estimates of future operating performance are based on our analysis of various supply and demand factors, which include, among other things, industry-wide capacity, our planned utilization rate,

end-user demand, capital expenditures and economic conditions as well as commodity prices. Such estimates are consistent with those used in our planning and capital investment reviews.

•

Future volumes. Our estimates of future throughput of crude oil, natural gas, NGL and refined product volumes are based on internal forecasts and depend, in part, on assumptions about our customers’ drilling activity which is inherently subjective and contingent upon a number of variable factors (including future or expected pricing considerations), many of which are difficult to forecast. Management considers these volume forecasts and other factors when developing our forecasted cash flows.


•	Discount rate commensurate with the risks involved. We apply a discount rate to our cash flows based on a variety of factors, including market and economic conditions, operational risk, regulatory risk and political risk. This discount rate is also compared to recent observable market transactions, if possible. A higher discount rate decreases the net present value of cash flows.


•	Future capital requirements. These are based on authorized spending and internal forecasts.

Assumptions about the effects of COVID-19 and the macroeconomic environment are inherently subjective and contingent upon the duration of the pandemic and its impact on the macroeconomic environment, which is difficult to forecast. We base our fair value estimates on projected financial information which we believe to be reasonable. However, actual results may differ from these projections.

The need to test for impairment can be based on several indicators, including a significant reduction in prices of or demand for commodities, a poor outlook for profitability, a significant reduction in pipeline throughput volumes, a significant reduction in natural gas or NGL volumes processed, other changes to contracts or changes in the regulatory environment in which the asset or equity method investment is located.

No impairment triggers were identified in the second quarter of 2020, however, 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 events and circumstances as discussed in Note 1 of the Notes to Consolidated Financial Statements. 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 of property, plant and equipment and $177 million of intangibles was recorded to “Impairment expense” on the Consolidated Statements of Income for the first quarter of 2020. Fair value of our PP&E was determined using a combination of an income and cost approach. The income approach utilized significant assumptions including management’s best estimates of the expected future cash flows and the estimated useful life of the asset group. The cost approach utilized assumptions for the current replacement costs of similar assets adjusted for estimated depreciation and deterioration of the existing equipment and economic obsolescence. The fair value of the intangibles 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. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of our impairment analysis will prove to be an accurate prediction of the future. The fair value measurements for the asset group fair values represent Level 3 measurements.

Unlike long-lived assets, goodwill must be tested for impairment at least annually, and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Goodwill is tested for impairment at the reporting unit level. A goodwill impairment loss is measured as the amount by which a reporting unit’s carrying value exceeds its fair value, without exceeding the recorded amount of goodwill.

The “Current Economic Environment” section describes the effects that the outbreak of COVID-19 and its development into a pandemic and the decline in commodity prices have had on our business. Due to these developments in the first quarter of 2020, we performed impairment assessments as discussed further below.

Prior to performing our goodwill impairment assessment as of March 31, 2020, MPLX had goodwill totaling approximately $9,536 million. As part of that assessment, MPLX recorded approximately $1,814 million of impairment expense in the first quarter of 2020 related to our Eastern G&P reporting unit within the G&P operating segment, which brought the amount of goodwill recorded within this reporting unit to zero. The impairment was primarily driven by updated guidance related to the slowing of drilling activity which has reduced production growth forecasts from our producer customers. For the remaining reporting units with goodwill, we determined that no significant adjustments to the carrying value of goodwill were necessary. The interim impairment assessment resulted in the fair value of the reporting units exceeding their carrying value by percentages ranging from approximately 8.5 percent to 270.0 percent. The reporting unit whose fair value exceeded its carrying amount by 8.5 percent, our Crude Gathering reporting unit, had goodwill totaling $1.1 billion at March 31, 2020. The operations which make up this reporting unit were acquired through the merger with ANDX. MPC accounted for its October 1, 2018 acquisition of Andeavor (including acquiring control of ANDX), using the acquisition method of accounting, which required Andeavor assets and liabilities to be recorded by MPC at the acquisition date fair value. The Merger was closed on July 30, 2019 and has been treated as a common control transaction, which required the recognition of assets acquired and liabilities assumed using MPC’s historical carrying value. As such, given the short amount of time from when fair value was established to the date of the impairment test, the amount by which the fair value exceeded the carrying value within this reporting unit is not unexpected. An increase of one percentage point to the discount rate used to estimate the fair value of this reporting unit would not have resulted in goodwill impairment as of March 31, 2020. No other reporting units had had fair values exceeding carrying values of less than 20 percent. There were no events or changes in circumstances noted in the second quarter of 2020 which would indicate it is more likely than not that the fair value of our reporting units with goodwill is less than their carrying amount.

Significant assumptions used to estimate the reporting units’ fair value included estimates of future cash flows and market information for comparable assets. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the impairment tests will prove to be an accurate prediction of the future. See Note 12 of the Notes to Consolidated Financial Statements for additional information relating to goodwill.

Equity method investments are assessed for impairment whenever factors indicate an other than temporary loss in value. Factors providing evidence of such a loss include the fair value of an investment that is less than its carrying value, absence of an ability to recover the carrying value or the investee’s inability to generate income sufficient to justify our carrying value. During the first quarter of 2020, we assessed certain of our equity method investments for impairment as a result of a number of first quarter events and circumstances as discussed in Note 1 of the Notes to Consolidated Financial Statements. As a result, we recorded an other than temporary impairment for three joint ventures in which we have an interest. Impairment of these investments was $1,264 million, of which $1,251 million was related to MarkWest Utica EMG, L.L.C. and its investment in Ohio Gathering Company, L.L.C. The fair value of the investments was determined based upon applying the discounted cash flow method, which is an income approach. The discounted cash flow fair value estimate is based on known or knowable information at the interim measurement date. The significant assumptions that were used to develop the estimate of the fair value under the discounted cash flow method include management’s best estimates of the expected future cash flows, including prices and volumes, the weighted average cost of capital and the long-term growth rate. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As such, the fair value of these equity method investments represents a Level 3 measurement. As a result, there can be no assurance that the estimates and assumptions made for purposes of the impairment test will prove to be an accurate prediction of the future. 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. At June 30, 2020 we had $4,065 million of equity method investments recorded on the Consolidated Balance Sheets.

An estimate of the sensitivity to net income resulting from impairment calculations is not practicable, given the numerous assumptions (e.g., pricing, volumes and discount rates) that can materially affect our estimates. That is, unfavorable adjustments to some of the above listed assumptions may be offset by favorable adjustments in other assumptions. See Note 4 of the Notes to Consolidated Financial Statements for additional information relating to equity method investments.

ACCOUNTING STANDARDS NOT YET ADOPTED

~~As discussed in Note 2 of the Notes to Consolidated Financial Statements, certain~~While 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

We are exposed to market risks related to the volatility of commodity prices. We employ various strategies, including the potential use of commodity derivative instruments, to economically hedge the risks related to these price fluctuations. We are also exposed to market risks related to changes in interest rates. As of ~~September~~June 30, ~~2019,~~2020, we did not have any open financial derivative instruments to economically hedge the risks related to interest rate fluctuations or commodity derivative instruments to economically hedge the risks related to the volatility of commodity prices; however, we continually monitor the market and our exposure and may enter into these arrangements in the future. While there is a risk related to changes in fair value of derivative instruments we may enter into; such risk is mitigated by price or rate changes related to the underlying commodity or financial transaction.

Commodity Price Risk

The information about commodity price risk for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 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, ~~2018.~~2019.

Outstanding Derivative Contracts

We have a natural gas purchase commitment embedded in a keep-whole processing agreement with a producer customer in the Southern Appalachian region expiring in December 2022. The customer has the unilateral option to extend the agreement for two consecutive five-year terms through December 2032. For accounting purposes, ~~these agreements~~the natural gas purchase commitment and the term extending options have been aggregated into a single compound embedded derivative. The probability of the customer exercising its options is determined based on assumptions about the customer’s potential business strategy decision points that may exist at the time they would elect whether to renew the contract. The changes in fair value of this compound embedded derivative are based on the difference between the contractual and index pricing 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 product costs” on the Consolidated Statements of Income. As of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the estimated fair value of this contract was a liability of ~~$54~~$51 million and ~~$61~~$60 million, respectively.

Open Derivative Positions and Sensitivity Analysis

As of ~~September~~June 30, ~~2019,~~2020, we have no open commodity derivative contracts. 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.

Interest Rate Risk

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


(In millions)	Fair value as of September 30, 2019⁽¹⁾		Change in Fair Value⁽²⁾		Change in Income Before Income Taxes for the Nine Months Ended September 30, 2019⁽³⁾		Fair value as of June 30, 2020⁽¹⁾		Change in Fair Value⁽²⁾		Change in Income Before Income Taxes for the Six Months Ended June 30, 2020⁽³⁾
Long-term debt
Fixed-rate	$	18,783	$	1,820	N/A		$	18,121	$	1,683	N/A
Variable-rate	$	2,507	$	48	$	4	$	3,798	$	33	$	17

(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~~June 30, ~~2019.~~2020.

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(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~~six months ended ~~September~~June 30, ~~2019. This analysis does not include the ANDX credit facilities which were terminated upon closing of the Merger.~~2020.

At ~~September~~June 30, ~~2019,~~2020, our portfolio of long-term debt consisted of fixed-rate instruments and variable-rate instruments ~~under~~including our term loan, floating rate senior notes and our revolving credit ~~facility, term loan facility and floating rate senior notes.~~facility. The fair value of our fixed-rate debt is relatively

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sensitive to interest rate fluctuations. Our sensitivity to interest rate declines and corresponding increases in the fair value of our debt portfolio unfavorably affects our results of operations and cash flows only when we elect to repurchase or otherwise retire fixed-rate debt at prices above carrying value. Interest rate fluctuations generally do not impact the fair value of borrowings under our bank revolving credit or term loan facilities, but may affect our results of operations and cash flows. As of ~~September~~June 30, ~~2019,~~2020, 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 13a-15(e) and 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~~June 30, ~~2019~~2020, the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

During the quarter ended ~~September~~June 30, ~~2019,~~2020, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II – Other Information

Item 1. Legal Proceedings

We are the subject of, or a party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. Except as described below, there have been no material changes to the legal proceedings previously disclosed in our Annual Report on Form 10-K, as updated in ~~the~~our Quarterly ~~Reports~~Report on Form 10-Q for the ~~quarters~~quarter ended March 31, ~~2019 and June 30, 2019.~~2020.

~~MPLX, MarkWest, MarkWest Liberty Midstream, MarkWest Liberty Bluestone, L.L.C., Ohio Fractionation and MarkWest Utica EMG (collectively, the “MPLX Parties”) are parties to various lawsuits~~Litigation

Dakota Access Pipeline

In connection with ~~Bilfinger Westcon, Inc.~~our 9.19 percent indirect interest in a joint venture (“~~Westcon”~~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, we have entered into a Contingent Equity Contribution Agreement whereby MPLX LP, along with the other joint venture owners in the Bakken Pipeline system, have agreed to make equity contributions to the joint venture upon certain events occurring to allow the entities that own and operate the Bakken Pipeline system to satisfy their senior note payment obligations. The senior notes were ~~instituted in 2016 and 2017 in Pennsylvania, West Virginia and Ohio. The lawsuits relate~~issued to ~~disputes regarding~~repay amounts owed by the pipeline companies to fund the cost of construction work performed by Westcon at the Bluestone, Mobley and Cadiz processing complexes in Pennsylvania, West Virginia and Ohio, respectively, and the Hopedale fractionation complex in Ohio. With respect to work performed by Westcon at the Mobley and Bluestone processing complexes, one or more of the MPLX Parties have asserted breach of contract, fraud, and with respect to work performed at the Mobley processing complex, MarkWest Liberty Midstream has also asserted negligent misrepresentation claims against Westcon. Westcon has also asserted claims against one or more of the MPLX Parties regarding these construction projects for breach of contract, unjust enrichment, promissory estoppel, fraud and constructive fraud, tortious interference with contractual relations, and civil conspiracy. Collectively, in the several cases, the MPLX Parties sought in excess of $10 million, plus an unspecified amount of punitive damages. Collectively, in the several cases, Westcon sought in excess of $40 million, plus an unspecified amount of punitive damages. Bakken Pipeline system.

As previously disclosed in our Quarterly Report on Form 10-Q for the quarter ended ~~June 30, 2019,~~March 31, 2020, in March 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 for the Bakken Pipeline system, to conduct a full environmental impact statement (“EIS”), and further requested briefing on whether an easement permit necessary for the operation of the Bakken Pipeline system should be vacated while the EIS is being prepared.

On July ~~2019, Westcon~~6, 2020, the D.D.C. ordered vacatur of the easement permit during the pendency of an EIS and further ordered shut down of the pipeline by August 5, 2020. The D.D.C. denied a motion to stay that order. Dakota Access and the Army Corps are appealing the D.D.C.’s order to the U.S. Court of Appeals for the District of Columbia Circuit. On July 14, 2020, the Circuit

Court issued an administrative stay while the court considers Dakota Access and the Army Corps’ emergency motion for stay pending appeal.

If the pipeline is temporarily shutdown pending completion of the EIS, MPLX ~~Parties reached an agreement~~would have to ~~resolve~~contribute its 9.19 percent pro rata share of funds required to pay interest accruing on the ~~disputes among those parties~~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.

Tesoro High Plains Pipeline

In early July, MPLX received a Notification of Trespass Determination from the Bureau of Indian Affairs (“BIA”) relating to a portion of the ~~Bluestone processing complex~~pipeline that crosses the Fort Berthold Reservation in ~~Pennsylvania.~~North Dakota. The notification covers the rights of way for 23 tracts of land and demands the immediate cessation of pipeline operations. The notification also assesses trespass damages of approximately $187 million. MPLX expects to receive a notification for an additional 11 tracts in the near future. We appealed this determination, which triggered an automatic stay of the requested pipeline shutdown and payment. We believe the trespass damage calculation is dependent on a novel interpretation of the applicable law, and we continue to actively negotiate settlement of this matter with holders of the property rights at issue. Management does not believe the ultimate resolution of this matter will ~~not~~ have a material adverse effect on ~~MPLX’s~~our consolidated financial position, results of operations, or cash flows.

Environmental Proceedings

Gathering and Processing

On May 7, 2020, we received a show cause letter from the U.S. EPA relating to alleged violations relating to MPLX’s compliance under its Sarsen facility LDAR consent decree. We have reached a settlement in principle to resolve this matter with a cash penalty of $150,000. We expect the settlement will be finalized and the penalty will be paid in the third quarter of 2020.

On May 13, 2020, we received an offer from the Texas Commission on Environmental Quality to settle alleged violations relating to the installation of high bleed pneumatic controllers at its Hancock Compressor Station and Carthage East Gas Plant. We have reached an agreement to settle this matter for a cash penalty of $165,600.

Item 1A. Risk Factors

~~Except as described below, there~~There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, as updated in our Quarterly Report on Form 10-Q for the quarter ended ~~June 30, 2019.~~

~~MPC’s ongoing review of strategic alternatives for its midstream business could materially impact our strategic direction, business and results of operations.~~

MPC’s board of directors has formed a special committee to enhance its evaluation of potential value-creating options for its midstream business, of which MPLX is the primary component. MPC’s exploration of strategic alternatives, including any

uncertainty created by this process, involves a number of risks: significant fluctuations in our unit price occur in response to developments relating to the strategic review process or market speculation regarding any such developments; we may encounter difficulties in hiring, retaining and motivating key personnel who provide services to us during this process or as a result of uncertainties generated by this process or any developments or actions relating to it; we may incur substantial increases in general and administrative expense associated with increased legal fees and the need to retain and compensate third party advisors; and we may experience difficulties in preserving the commercially sensitive information that may need to be disclosed to third parties during this process or in connection with an assessment of our strategic alternatives. On November 1, 2019, Moody’s announced it had changed its outlook for MPC’s and MPLX’s credit ratings from stable to negative following the recent announcements regarding MPC’s planned spin-off of its Speedway business and its midstream review, and the midstream review could be a factor causing or contributing to a future determination by one or more of the rating agencies to lower MPLX’s credit ratings. The strategic review process also requires significant time and attention from management, which could distract them from other tasks in operating our business. There can be no assurance that this process will result in the pursuit or consummation of any strategic transaction. The occurrence of any one or more of the above risks could have a material adverse impact on our business, financial condition, results of operations and cash flows.March 31, 2020.

Item ~~2. Unregistered Sales of Equity Securities~~5. Other Information

~~In connection~~On July 31, 2020, MPLX entered into a Redemption Agreement (the “Redemption Agreement”) with ~~the closing~~Western Refining Southwest, Inc., an Arizona corporation (“WRSW”) and wholly owned subsidiary of MPC, pursuant to which MPLX agreed to transfer, following a series of intercompany transactions, all of the ~~Merger, each common unit held by ANDX’s public unitholders was converted into~~outstanding membership interests in Western Refining Wholesale, LLC, a Delaware limited liability company (“WRW”) to WRSW in exchange for the ~~right to receive 1.135~~redemption of MPLX ~~common units. ANDX~~ common units held by ~~certain affiliates~~WRSW. The transaction effects the transfer to MPC of ~~MPC were converted into~~ the ~~right to receive 1.0328~~Western wholesale distribution business that MPLX ~~common units.~~

~~Additionally,~~acquired as a result of its acquisition of ANDX. The Redemption Agreement was approved by the ~~Merger, each ANDX TexNew Mex~~ conflicts committee and the board of directors of MPLX’s general partner. The conflicts committee, which is composed of independent members of the board of directors of MPLX’s general partner, retained independent legal and financial advisors to assist it in evaluating and negotiating the transaction.

Consistent with the terms of the Redemption Agreement, effective as of 11:59 p.m. on July 31, 2020 (the “Closing”), all of the outstanding membership interests in WRW were transferred to WRSW, and WRW became an indirect, wholly owned subsidiary of MPC. At the Closing, per the terms of Redemption Agreement, MPLX redeemed 18,582,088 Common Units (the “Redeemed Units”) held by WRSW. The number of Redeemed Units was calculated by dividing WRW’s aggregate valuation of $340 million by the simple average of the volume weighted average New York Stock Exchange prices of an MPLX Common

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Unit for the ten trading days ending at market close on July 27, 2020. Following the redemption of the Redeemed Units, and consistent with the terms of the Redemption Agreement, MPLX cancelled the Redeemed Units.

After giving effect to transactions contemplated under the Redemption Agreement (including the cancellation of the Redeemed Units as described above), MPC holds, indirectly through its subsidiaries, 647,415,452 common units constituting approximately 62% of the MPLX common units issued and outstanding immediately prior to the effective time of the Merger was converted into a right for Western Refining Southwest, Inc. (“Southwest”), a wholly-owned subsidiary of MPC, as the holder of all such units, to receive a unit representing a substantially equivalent special limited partner interest in MPLX (the “MPLX TexNew Mex Units”). By virtue of the conversion, all ANDX TexNew Mex Units were cancelled and ceased to exist as of August 3, 2020.

Each of MPLX and WRSW has agreed to customary representations, warranties and covenants, as well as customary indemnification obligations between the ~~effective time of~~parties, in the Merger. The MPLX TexNew Mex Units are a new class of units in MPLX substantially equivalent to the ANDX TexNew Mex Units, including substantially equivalent rights, powers, duties and obligations that the ANDX TexNew Mex Units had immediately prior to the closing of the Merger. As a result of the Merger, the ANDX Special Limited Partner Interest outstanding immediately prior to the effective time of the Merger was converted into a right for Southwest, as the holder of all such interest, to receive a substantially equivalent special limited partner interest in MPLX (the “MPLX Special Limited Partner Interest”). By virtue of the conversion, the ANDX Special Limited Partner Interest was cancelled and ceased to exist as of the effective time of the Merger.Redemption Agreement.

The ~~issuance of MPLX TexNew Mex Units and the MPLX Special Limited Partner Interest was effected in reliance on an exemption from registration under Section 4(a)(2)~~foregoing description of the ~~Securities Act~~Redemption Agreement is not complete and is qualified in its entirety by reference to the full text of ~~1933,~~the Redemption Agreement, which is filed as ~~amended.~~Exhibit 10.1 to this Quarterly Report on Form 10-Q and incorporated by reference herein.

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Item 6. Exhibits

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

Furnished
Herewith
1.1
Underwriting Agreement, dated as of September 4, 2019, among the Issuer, MPLX GP LLC, the general partner of the Issuer, and each of Citigroup Global Markets Inc., Barclays Capital Inc. and RBC Capital Markets, LLC, acting as representatives of the several underwriters named therein
8-K 1.1
9/9/2019 001-35714
2.1*
Agreement and Plan of Merger, dated as of May 7, 2019, by and among Andeavor Logistics LP, Tesoro Logistics GP, LLC, MPLX LP, MPLX GP LLC and MPLX MAX LLC.
8-K 2.1
5/8/2019 001-35714
3.1
Certificate of Limited Partnership of MPLX LP
S-1 3.1
7/2/2012 333-182500
3.2
Amendment to the Certificate of Limited Partnership of MPLX LP
S-1/A 3.2
10/9/2012 333-182500
3.3
Fifth Amended and Restated Agreement of Limited Partnership of MPLX LP, dated as of July 30, 2019
8-K/A 3.1
8/14/2019 001-35714
4.1
Indenture, dated as of October 29, 2014, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee , relating to the 5.50% Senior Notes due 2019 and the 6.25% Senior Notes due 2022
10-Q 4.3
10/31/2014
001-03473
(Andeavor)

4.2
Sixth Supplemental Indenture, dated as of September 6, 2019, to Indenture dated as of October 29, 2014, among Andeavor Logistics LP (f/k/a Tesoro Logistics LP), Tesoro Logistics Finance Corp. and U.S. Bank National Association, as Trustee
8-K 4.1
9/9/2019 001-35714
4.3
Indenture, dated as of May 12, 2016, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 6.375% Senior Notes due 2024
10-K 4.33
2/21/2017
001-03473
(Andeavor)

4.4
Fourth Supplemental Indenture, dated as of September 6, 2019, to Indenture dated as of May 12, 2016, among Andeavor Logistics LP (f/k/a Tesoro Logistics LP), Tesoro Logistics Finance Corp. and U.S. Bank National Association, as Trustee
8-K 4.2
9/9/2019 001-35714

Incorporated by Reference From

Exhibit

Number

Exhibit Description

Form

Exhibit

Filing Date

SEC File No.

Filed

Herewith

Furnished

Herewith

1.1

Underwriting Agreement, dated as of September 4, 2019, among the Issuer, MPLX GP LLC, the general partner of the Issuer, and each of Citigroup Global Markets Inc., Barclays Capital Inc. and RBC Capital Markets, LLC, acting as representatives of the several underwriters named therein

8-K

1.1

9/9/2019

001-35714

2.1*

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

8-K

2.1

5/8/2019

001-35714

3.1

Certificate of Limited Partnership of MPLX LP

S-1

3.1

7/2/2012

333-182500

3.2

Amendment to the Certificate of Limited Partnership of MPLX LP

S-1/A

3.2

10/9/2012

333-182500

3.3

Fifth Amended and Restated Agreement of Limited Partnership of MPLX LP, dated as of July 30, 2019

8-K/A

3.1

8/14/2019

001-35714

10.1

Redemption Agreement, dated July 31, 2020, between MPLX LP and Western Refining Southwest, Inc.

31.10

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

31.20

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

32.10

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

32.20

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

101.INS

XBRL 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.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

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

Furnished
Herewith
4.5
Indenture, dated as of December 2, 2016, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 5.25% Senior Notes due 2025
10-K 4.34
2/21/2017
001-03473
(Andeavor)

4.6
Fourth Supplemental Indenture, dated as of September 6, 2019, to Indenture dated as of December 2, 2016, among Andeavor Logistics LP (f/k/a Tesoro Logistics LP), Tesoro Logistics Finance Corp. and U.S. Bank National Association, as Trustee
8-K 4.3
9/9/2019 001-35714
4.7
Indenture, dated as of November 28, 2017, among Tesoro Logistics LP, Tesoro Logistics Finance Corp., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 3.500% Senior Notes due 2022, 4.250% Senior Notes due 2027 and 5.200% Senior Notes due 2047
8-K 4.1
11/28/2017
001-35143
(ANDX)

4.8
Second Supplemental Indenture, dated as of September 6, 2019, to Indenture dated as of November 28, 2017, among Andeavor Logistics LP (f/k/a Tesoro Logistics LP), Tesoro Logistics Finance Corp. and U.S. Bank National Association, as Trustee
8-K 4.4
9/9/2019 001-35714
4.9
Fifteenth Supplemental Indenture, dated as of September 9, 2019, between the Issuer and The Bank of New York Mellon Trust Company, N.A., as Trustee (including form of note)
8-K 4.5
9/9/2019 001-35714
4.10
Sixteenth Supplemental Indenture, dated as of September 9, 2019, between the Issuer and The Bank of New York Mellon Trust Company, N.A., as Trustee (including form of note)
8-K 4.6
9/9/2019 001-35714
4.11
Seventeenth Supplemental Indenture, dated as of September 23, 2019, between MPLX LP and the Bank of New York Mellon Trust Company, N.A.
8-K 4.1
9/27/2019 001-35714
4.12
Eighteenth Supplemental Indenture, dated as of September 23, 2019, between MPLX LP and the Bank of New York Mellon Trust Company, N.A.
8-K 4.2
9/27/2019 001-35714
4.13
Nineteenth Supplemental Indenture, dated as of September 23, 2019, between MPLX LP and the Bank of New York Mellon Trust Company, N.A.
8-K 4.3
9/27/2019 001-35714

~~Table of Contents~~

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

Furnished
Herewith
4.14
Twentieth Supplemental Indenture, dated as of September 23, 2019, between MPLX LP and the Bank of New York Mellon Trust Company, N.A.
8-K 4.4
9/27/2019 001-35714
4.15
Twenty-First Supplemental Indenture, dated as of September 23, 2019, between MPLX LP and the Bank of New York Mellon Trust Company, N.A.
8-K 4.5
9/27/2019 001-35714
4.16
Twenty-Second Supplemental Indenture, dated as of September 23, 2019, between MPLX LP and the Bank of New York Mellon Trust Company, N.A.
8-K 4.6
9/27/2019 001-35714
4.17
Registration Rights Agreement, dated as of September 23, 2019, by and among MPLX LP, MPLX GP LLC, Barclays Capital Inc., MUFG Securities Americas Inc. and Wells Fargo Securities, LLC
8-K 4.7
9/27/2019 001-35714
10.10
Support Agreement, dated as of May 7, 2019, by and among MPLX LP, Andeavor Logistics LP, Tesoro Logistics GP, LLC, Western Refining Southwest, Inc. and Marathon Petroleum Corporation
8-K 10.1
5/8/2019 001-35714
10.20
Amended and Restated Credit Agreement, dated as of July 26, 2019, by and among MPLX, as borrower, Wells Fargo Bank, National Association, as administrative agent, each of Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., Barclays Bank PLC, BofA Securities, Inc., Citigroup Global Markets Inc., Mizuho Bank, Ltd., MUFG Bank, Ltd. and Royal Bank of Canada, 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., MUFG Bank, Ltd. and Royal Bank of Canada, as documentation agents, and the other lenders and issuing banks that are parties thereto
8-K 10.1
8/1/2019 001-35714
10.30
Amended and Restated Loan Agreement dated as of July 31, 2019 by and between MPLX LP and MPC Investment LLC.
8-K 10.2
8/1/2019 001-35714

~~Table of Contents~~

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

Furnished
Herewith
10.40
Term Loan Agreement, dated as of September 26, 2019, by and among MPLX LP, as borrower, Wells Fargo Bank, National Association, as administrative agent, each of Wells Fargo Securities, LLC, BofA Securities, Inc. and Mizuho Bank, Ltd., as joint lead arrangers and joint bookrunners, and the syndication agents, documentation agents and lenders that are parties thereto
8-K 10.1
9/27/2019 001-35714
10.41
Fourth Amended and Restated Omnibus Agreement, dated as of October 30, 2017, among Andeavor, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Tesoro Logistics LP and Tesoro Logistics GP, LLC
8-K 10.2
10/31/2017
001-35143
(ANDX)

10.42
First Amendment to Fourth Amended and Restated Omnibus Agreement, dated as of January 30, 2019, among Andeavor LLC, Marathon Petroleum Company LP, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Andeavor Logistics LP and Tesoro Logistics GP, LLC
10-K 10.77
2/28/2019 001-35054
10.43
Waiver and Second Amendment to Fourth Amended and Restated Omnibus Agreement, dated as of July 29, 2019, by and among MPC, Andeavor Logistics LP, Tesoro Logistics GP, LLC, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC and Marathon Petroleum Company LP.
8-K 10.3
8/1/2019 001-35054
10.44
Third Amended and Restated Schedules to Fourth Amended and Restated Omnibus Agreement, effective August 6, 2018, by and among Andeavor, Tesoro Refining & Marketing Company LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC, Andeavor Logistics LP and Tesoro Logistics GP, LLC
10-Q 10.2
11/17/2018
001-35143
(ANDX)

10.45
Secondment Agreement, dated as of January 30, 2019, by and among Marathon Refining Logistics Services, LLC, Andeavor Logistics LP, Tesoro Logistics GP, LLC and certain other parties thereto
8-K 10.1
2/5/2019
001-35143
(ANDX)

~~Table of Contents~~

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

Furnished
Herewith
10.46
Secondment Agreement, dated as of January 30, 2019, by and among Marathon Petroleum Logistics Services, LLC, Andeavor Logistics LP, Tesoro Logistics GP, LLC and certain other parties thereto
8-K 10.2
2/5/2019
001-35143
(ANDX)

10.47
Form of MPLX LP Replacement Award for 2017 ANDX Award
X
10.48
Form of MPLX LP Replacement Award for 2018 ANDX Award
X
10.49
Keep-Whole Commodity Fee Agreement, dated as of December 7, 2014, among Tesoro Refining & Marketing Company LLC, QEP Field Services, LLC, QEPM Gathering I, LLC and Green River Processing, LLC
8-K 10.9
12/8/2014
001-35143
(ANDX)

10.50
First Amendment to Keep-Whole Commodity Fee Agreement, dated as of February 1, 2016, among QEP Field Services, LLC, QEPM Gathering I, LLC, Green River Processing, LLC, and Tesoro Refining & Marketing Company LLC
8-K 10.3
2/3/2016
001-35143
(ANDX)

10.51
Fuel Distribution and Supply Agreement, dated October 15, 2014, by and between Western Refining Wholesale, LLC and Western Refining Southwest, Inc.
8-K 10.2
10/16/2014
001-36114
(WNRL)

10.52
Amendment No. 1 to Fuel Distribution and Supply Agreement, dated October 15, 2014, by and between Western Refining Wholesale, LLC and Western Refining Southwest, Inc.
10-Q 10.20
8/7/2018
001-35143
(ANDX)

10.53
Product Supply Agreement, dated October 15, 2014, by and among Western Refining Southwest, Inc., Western Refining Company, L.P. and Western Refining Wholesale, LLC
8-K 10.1
10/16/2014
001-36114
(WNRL)

10.54
Amendment No. 1 to Product Supply Agreement, dated October 15, 2014, by and among Western Refining Southwest, Inc., Western Refining Company, L.P. and Western Refining Wholesale, LLC
10-Q 10.7
8/7/2018
001-35143
(ANDX)

10.55
Amendment No. 2 to Product Supply Agreement, dated October 15, 2014, by and among Western Refining Southwest, Inc., Western Refining Company, L.P. and Western Refining Wholesale, LLC
10-Q 10.8
8/7/2018
001-35143
(ANDX)

~~Table of Contents~~

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

Furnished
Herewith
10.56
Amendment No. 3 to Product Supply Agreement, dated October 15, 2014, by and among Western Refining Southwest, Inc., Western Refining Company, L.P. and Western Refining Wholesale, LLC
10-Q 10.9
8/7/2018
001-35143
(ANDX)

10.57
Amendment No. 4 to Product Supply Agreement, dated October 15, 2014, by and among Western Refining Southwest, Inc., Western Refining Company, L.P. and Western Refining Wholesale, LLC
10-Q 10.10
8/7/2018
001-35143
(ANDX)

10.58
Amendment No. 5 to Product Supply Agreement, dated October 15, 2014, by and among Western Refining Southwest, Inc., Western Refining Company, L.P. and Western Refining Wholesale, LLC
10-Q 10.11
8/7/2018
001-35143
(ANDX)

31.10
Certification of Chief Executive Officer pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934
X
31.20
Certification of Chief Financial Officer pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934
X
32.10
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
X
32.20
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350
X
101.INS XBRL 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.SCH Inline XBRL Taxonomy Extension Schema Document X
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X

Incorporated by Reference From

Exhibit

Number

Exhibit Description

Form

Exhibit

Filing Date

SEC File No.

Filed

Herewith

Furnished

Herewith

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


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

7967

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	MPLX LP

	By:	MPLX GP LLC
		Its general partner

Date: ~~November 4, 2019~~August 3, 2020	By:	/s/ C. Kristopher Hagedorn
		C. Kristopher Hagedorn
		Vice President and Controller of MPLX GP LLC (the general partner of MPLX LP)

8068



	Page
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Statements of Income (Unaudited)	3
Consolidated Statements of Comprehensive Income (Unaudited)	4
Consolidated Balance Sheets (Unaudited)	5
Consolidated Statements of Cash Flows (Unaudited)	6
Consolidated Statements of Equity (Unaudited)	7
Notes to Consolidated Financial Statements (Unaudited)	98
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	4638
Item 3. Quantitative and Qualitative Disclosures about Market Risk	7162
Item 4. Controls and Procedures	7263

PART II – OTHER INFORMATION
Item 1. Legal Proceedings	7263
Item 1A. Risk Factors	7264
Item ~~2. Unregistered Sales of Equity Securities~~5. Other Information	7364
Item 6. Exhibits	7466
Signatures	8068



(In millions)	As Originally Reported		Adjustments⁽¹⁾			As Adjusted
Cash and cash equivalents	$	83	$	(53	)	$	30
Receivables, net	241		256			497
Inventories	21		—			21
Other current assets⁽²⁾	59		(7		)	52
Equity method investments	731		(89		)	642
Property, plant and equipment, net	6,709		(427		)	6,282
Intangibles, net	960		74			1,034
Other noncurrent assets⁽³⁾	31		(8		)	23
Total assets acquired	8,835		(254		)	8,581
Accounts payable	198		265			463
Other current liabilities⁽⁴⁾	188		(41		)	147
Long-term debt	4,916		—			4,916
Deferred credits and other long-term liabilities⁽⁵⁾	75		1			76
Total liabilities assumed	5,377		225			5,602
Net assets acquired excluding goodwill	3,458		(479		)	2,979
Goodwill	7,428		727			8,155
Net assets acquired	$	10,886	$	248		$	11,134



	December 31, 2018
(In millions)	MPLX LP (Previously Reported)			Predecessor		MPLX LP (Currently Reported)
Assets
Current assets:
Cash and cash equivalents	$	68		$	9	$	77
Receivables, net	417			194		611
Current assets - related parties	290			266		556
Inventories	77			21		98
Other current assets	45			53		98
Total current assets	897			543		1,440
Equity method investments	4,174			727		4,901
Property, plant and equipment, net	14,639			6,886		21,525
Intangibles, net	424			935		1,359
Goodwill	2,586			7,430		10,016
Noncurrent assets - related parties	24			—		24
Other noncurrent assets	35			25		60
Total assets	22,779			16,546		39,325
Liabilities
Current liabilities:
Accounts payable	162			104		266
Accrued liabilities	250			22		272
Current liabilities - related parties	254			248		502
Accrued property, plant and equipment	294			105		399
Accrued interest payable	143			41		184
Other current liabilities	83			562		645
Total current liabilities	1,186			1,082		2,268
Long-term deferred revenue	80			52		132
Long-term liabilities - related parties	43			3		46
Long-term debt	13,392			4,530		17,922
Deferred income taxes	13			1		14
Deferred credits and other liabilities	197			11		208
Total liabilities	14,911			5,679		20,590
Commitments and contingencies (see Note 20)
Series A preferred units	1,004			—		1,004
Equity
Common unitholders - public	8,336			—		8,336
Common unitholder - MPC	(1,612		)	—		(1,612		)
Equity of Predecessor	—			10,867		10,867
Accumulated other comprehensive loss	(16		)	—		(16		)
Total MPLX LP partners’ capital	6,708			10,867		17,575
Noncontrolling interests	156			—		156
Total equity	6,864			10,867		17,731
Total liabilities, preferred units and equity	$	22,779		$	16,546	$	39,325



	Nine Months Ended September 30, 2019⁽¹⁾
(In millions)	VIEs		Non-VIEs		Total
Revenues and other income	$	479	$	1,116	$	1,595
Costs and expenses	251		434		685
Income from operations	228		682		910
Net income	192		605		797
Income from equity method investments⁽²⁾	$	89	$	166	$	255



	Three Months Ended September 30, 2018
(In millions, except per unit data)	Limited Partners’ Common Units			Series A Preferred Units		Total
Basic and diluted net income attributable to MPLX LP per unit
Net income attributable to MPLX LP:
Distributions declared	$	507		$	19	$	526
Undistributed net loss attributable to MPLX LP	(16		)	—		(16		)
Net income attributable to MPLX LP⁽¹⁾	$	491		$	19	$	510
Weighted average units outstanding:
Basic	794			31		825
Diluted	794			31		825
Net income attributable to MPLX LP per limited partner unit:
Basic	$	0.62
Diluted	$	0.62



(In millions)	Related Party Operating Leases		Third Party Operating Leases		Finance Leases
2019	$	5	$	21	$	1
2020	14		74		10
2021	14		68		2
2022	14		59		2
2023	14		55		2
2024 and thereafter	619		173		11
Gross lease payments	680		450		28
Less: imputed interest	448		80		8
Total lease liabilities	$	232	$	370	$	20



(In millions)	Operating Lease Obligations		Capital Lease Obligations
2019	$	90	$	5
2020	88		8
2021	83		3
2022	76		2
2023	70		2
2024 and thereafter	825		4
Total minimum lease payments	$	1,232	24
Less: imputed interest costs			3
Present value of net minimum lease payments			$	21



	Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
	MPLX LP⁽⁴⁾	MPLX LP Operated⁽⁵⁾	MPLX LP⁽⁴⁾	MPLX LP Operated⁽⁵⁾
G&P
Gathering Throughput (MMcf/d)
Marcellus Operations	1,273	1,273	1,157	1,157
Utica Operations	—	2,186	—	1,722
Southwest Operations	1,618	1,618	1,523	1,524
Bakken Operations	149	149	—	—
Rockies Operations	639	835	—	—
Total gathering throughput	3,679	6,061	2,680	4,403

Natural Gas Processed (MMcf/d)
Marcellus Operations	4,211	5,218	3,775	4,338
Utica Operations	—	835	—	889
Southwest Operations	1,608	1,608	1,403	1,403
Southern Appalachian Operations	244	244	244	244
Bakken Operations	149	149	—	—
Rockies Operations	575	575	—	—
Total natural gas processed	6,787	8,629	5,422	6,874

C2 + NGLs Fractionated (mbpd)
Marcellus Operations⁽⁶⁾	431	431	374	374
Utica Operations⁽⁶⁾	—	45	—	46
Southwest Operations	13	13	18	18
Southern Appalachian Operations⁽⁷⁾	12	12	13	13
Bakken Operations	22	22	—	—
Rockies Operations	4	4	—	—
Total C2 + NGLs fractionated⁽⁸⁾	482	527	405	451



		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Exhibit	Filing Date	SEC File No.	Filed Herewith	Furnished Herewith
4.14	Twentieth Supplemental Indenture, dated as of September 23, 2019, between MPLX LP and the Bank of New York Mellon Trust Company, N.A.	8-K	4.4	9/27/2019	001-35714
4.15	Twenty-First Supplemental Indenture, dated as of September 23, 2019, between MPLX LP and the Bank of New York Mellon Trust Company, N.A.	8-K	4.5	9/27/2019	001-35714
4.16	Twenty-Second Supplemental Indenture, dated as of September 23, 2019, between MPLX LP and the Bank of New York Mellon Trust Company, N.A.	8-K	4.6	9/27/2019	001-35714
4.17	Registration Rights Agreement, dated as of September 23, 2019, by and among MPLX LP, MPLX GP LLC, Barclays Capital Inc., MUFG Securities Americas Inc. and Wells Fargo Securities, LLC	8-K	4.7	9/27/2019	001-35714
10.10	Support Agreement, dated as of May 7, 2019, by and among MPLX LP, Andeavor Logistics LP, Tesoro Logistics GP, LLC, Western Refining Southwest, Inc. and Marathon Petroleum Corporation	8-K	10.1	5/8/2019	001-35714
10.20	Amended and Restated Credit Agreement, dated as of July 26, 2019, by and among MPLX, as borrower, Wells Fargo Bank, National Association, as administrative agent, each of Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., Barclays Bank PLC, BofA Securities, Inc., Citigroup Global Markets Inc., Mizuho Bank, Ltd., MUFG Bank, Ltd. and Royal Bank of Canada, 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., MUFG Bank, Ltd. and Royal Bank of Canada, as documentation agents, and the other lenders and issuing banks that are parties thereto	8-K	10.1	8/1/2019	001-35714
10.30	Amended and Restated Loan Agreement dated as of July 31, 2019 by and between MPLX LP and MPC Investment LLC.	8-K	10.2	8/1/2019	001-35714

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)