Equity

6 Months Ended

Jun. 30, 2020

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



(In units)	Common
Balance at December 31, 2019	1,058,355,471
Unit-based compensation awards	253,291
Balance at June 30, 2020	1,058,608,762

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 on July 30, 2019.

Series B Preferred Units

Prior to the Merger, ANDX 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 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.

The changes in the Series B preferred unit balance from December 31, 2019 through June 30, 2020 are summarized 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.



(In millions)	Series B Preferred Units
Balance at December 31, 2019	$	611
Net income allocated	21
Distributions received by Series B preferred unitholders	(21		)
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 July 28, 2020, MPLX declared a quarterly cash distribution for the second quarter of 2020, totaling $715 million, or $0.6875 per common unit. This rate will also be received by Series A preferred unitholders. These distributions will be paid on August 14, 2020 to common unitholders of record on August 7, 2020. Series B preferred unitholders are entitled to receive a fixed distribution of $68.75 per unit, per annum, payable semi-annually in arrears on February 15 and August 15, or the first business day thereafter, up to and including February 15, 2023. After February 15, 2023, the holders of Series B preferred units are entitled to receive cumulative, quarterly distributions payable in arrears on the 15th day of February, May, August and November of each year, or the first business day thereafter, based on a floating annual rate equal to the three-month LIBOR plus 4.652 percent, in each case assuming a distribution is declared by the Board of Directors. Accordingly, a cash distribution payment totaling $21 million will be paid to Series B unitholders on August 17, 2020.

Quarterly distributions for 2020 and 2019 are summarized below:



(Per common unit)	2020		2019
March 31,	$	0.6875	$	0.6575
June 30,	$	0.6875	$	0.6675

The allocation of total quarterly cash distributions to limited and preferred unitholders 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.



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2020		2019		2020		2019
Common and preferred unit distributions:
Common unitholders, includes common units of general partner	$	715	$	692	$	1,443	$	1,215
Series A preferred unit distributions	21		21		41		41
Series B preferred unit distributions	10		21		21		21
Total cash distributions declared	$	746	$	734	$	1,505	$	1,277

The distribution on common units for the three and six months ended 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 include second quarter distributions on MPLX common units issued to former ANDX unitholders and Series B Unitholders in connection with the Merger. The distributions on common units exclude $12.5 million of waived distributions for the three and six months ended June 30, 2019.