Investments and Noncontrolling Interests

12 Months Ended

Dec. 31, 2019

Equity Method Investments and Joint Ventures [Abstract]

Investments and Noncontrolling Interests

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



	Ownership as of	Carrying value at
	December 31,	December 31,
(In millions, except ownership percentages)	2019	2019		2018
L&S
MarEn Bakken Company LLC	25%	$	481	$	498
Illinois Extension Pipeline Company, L.L.C.	35%	265		275
LOOP LLC	41%	238		226
Andeavor Logistics Rio Pipeline LLC⁽¹⁾	67%	202		181
Minnesota Pipe Line Company, LLC⁽¹⁾	17%	190		197
Whistler Pipeline LLC	38%	134		—
Wink to Webster Pipeline LLC	15%	126		—
Explorer Pipeline Company	25%	83		90
Other⁽¹⁾		55		51
Total L&S		1,774		1,518
G&P
MarkWest Utica EMG, L.L.C.	56%	1,984		2,039
Sherwood Midstream LLC	50%	537		366
MarkWest EMG Jefferson Dry Gas Gathering Company, L.L.C.	67%	302		236
Rendezvous Gas Services, L.L.C.⁽¹⁾	78%	170		248
Sherwood Midstream Holdings LLC	53%	157		157
Centrahoma Processing LLC	40%	153		160
Other⁽¹⁾		198		177
Total G&P		3,501		3,383
Total		$	5,275	$	4,901


(1)	These investments as well as certain investments included within “Other” for both L&S and G&P are investments acquired as part of the Merger. The December 31, 2019 balance reflects all purchase accounting adjustments identified by MPC as part of its acquisition of Andeavor.

As a result of the Merger, MPLX 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 ALRP 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, we have the ability to exercise influence through participation in the management committees which make all significant decisions. However, since 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, 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 December 31, 2019, MPLX has a 23.7 percent indirect ownership interest in Sherwood Midstream Holdings through Sherwood Midstream. During 2019, MPLX acquired equity interests in Whistler Pipeline LLC and Wink to Webster Pipeline LLC. Both joint ventures are located in the Permian Basin and will transport crude oil or natural gas to the U.S. Gulf Coast. These investments are deemed to be VIEs; however, MPLX does not operate these joint ventures and is not deemed to be the primary beneficiary due to voting rights on significant matters as described above.

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 years ended December 31, 2019, 2018 and 2017.

During the fourth quarter of 2019, two joint ventures in which we have an interest recorded impairments, which impacted the amount of income from equity method investments during the period by approximately $28 million and took the carrying value of one of the investments to zero. For the other joint venture, we had a basis difference recorded which was being amortized over the life of the underlying assets. As a result of the impairment recorded by the joint venture, we assessed our investment, including the related basis difference, for impairment and recorded an additional $14 million of impairment during the quarter related to our basis difference. The fair value of the investment 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 results using a probability-weighted average set of cash flow forecasts and the discount 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 of the basis difference was also recorded through “Income from equity method investments” for a total impact during the quarter of approximately $42 million. The impairments were largely due to a reduction in forecasted volumes of the joint ventures.

Summarized financial information for MPLX’s equity method investments for the years ended December 31, 2019, 2018 and 2017 is as follows:



	December 31, 2019⁽¹⁾
(In millions)	Other VIEs		Non-VIEs		Total
Revenues and other income	$	650	$	1,417	$	2,067
Costs and expenses	375		568		943
Income from operations	275		849		1,124
Net income	215		752		967
Income from equity method investments⁽²⁾	$	103	$	187	$	290



	December 31, 2018⁽¹⁾
(In millions)	Other VIEs		Non-VIEs		Total
Revenues and other income	$	484	$	1,421	$	1,905
Costs and expenses	286		738		1,024
Income from operations	198		683		881
Net income	197		606		803
Income from equity method investments⁽²⁾	$	67	$	180	$	247



	December 31, 2017⁽¹⁾
(In millions)	Other VIEs		Non-VIEs		Total
Revenues and other income	$	273	$	954	$	1,227
Costs and expenses	139		520		659
Income from operations	134		434		568
Net income	133		345		478
Income from equity method investments⁽²⁾	$	30	$	48	$	78

(1)

The financial information for equity method investments for 2019 includes financial information of equity method investments acquired as part of the Merger. The financial information for equity method investments for 2018 includes financial information of equity method investments acquired as part of the Merger for the last three months of 2018. The financial information for equity method investments for 2017 does not include financial information of equity method investments acquired as part of the Merger. See Note 1 for additional information.


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

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



	December 31, 2019
(In millions)	Other VIEs		Non-VIEs		Total
Current assets	$	534	$	330	$	864
Noncurrent assets	5,862		5,134		10,996
Current liabilities	192		245		437
Noncurrent liabilities	$	305	$	822	$	1,127



	December 31, 2018
(In millions)	Other VIEs		Non-VIEs		Total
Current assets	$	252	$	415	$	667
Noncurrent assets	3,796		5,290		9,086
Current liabilities	158		280		438
Noncurrent liabilities	$	191	$	845	$	1,036

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