Segment Information

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

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 two 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

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 revenues and other income, capital expenditures and investments in unconsolidated affiliates as well as total assets for our reportable segments:

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2020		2019(1)		2020			2019(1)
L&S
Service revenue	$	931	$	922	$	1,935		$	1,811
Rental income	246		296		488			631
Product related revenue	21		20		40			35
Income from equity method investments	40		54		90			99
Other income	52		16		103			28
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	489		544		1,025			1,072
Rental income	89		83		177			172
Product related revenue	151		231		373			507
Income/(loss) from equity method investments	49		29		(1,185		)	61
Other income	13		15		27			29
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) 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)	June 30, 2020		December 31, 2019
Segment assets
Cash and cash equivalents	$	67	$	15
L&S	21,308		20,810
G&P	15,647		19,605
Total assets	$	37,022	$	40,430

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

	Three Months Ended June 30,						Six Months Ended June 30,
(In millions)	2020			2019(1)			2020			2019(1)
Reconciliation to Net (loss)/income:
L&S Segment Adjusted EBITDA	$	839		$	570		$	1,711		$	1,129
G&P Segment Adjusted EBITDA	388			350			810			721
Total reportable segments	1,227			920			2,521			1,850
Depreciation and amortization(2)	(321		)	(313		)	(646		)	(614		)
Benefit for income taxes	—			1			—			2
Amortization of deferred financing costs	(15		)	(12		)	(29		)	(19		)
Non-cash equity-based compensation	(3		)	(5		)	(8		)	(12		)
Impairment expense	—			—			(2,165		)	—
Net interest and other financial costs	(208		)	(217		)	(424		)	(434		)
Income/(loss) from equity method investments	89			83			(1,095		)	160
Distributions/adjustments related to equity method investments	(115		)	(132		)	(239		)	(254		)
Unrealized derivative (losses)/gains(3)	(6		)	—			9			(4		)
Acquisition costs	—			(4		)	—			(5		)
Other	(1		)	—			(2		)	—
Adjusted EBITDA attributable to noncontrolling interests	8			7			17			14
Adjusted EBITDA attributable to Predecessor(4)	—			329			—			662
Net (loss)/income	$	655		$	657		$	(2,061	)	$	1,346

(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.