Segment Information

9 Months Ended

Sep. 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 September 30,				Nine Months Ended September 30,
(In millions)	2020		2019		2020			2019
L&S
Service revenue	$	989	$	976	$	2,924		$	2,787
Rental income	249		304		737			935
Product related revenue	9		22		49			57
Income from equity method investments	36		60		126			159
Other income	51		17		154			45
Total segment revenues and other income(1)	1,334		1,379		3,990			3,983
Segment Adjusted EBITDA(2)	893		766		2,604			1,895
Restructuring expenses	27		—		27			—
Capital expenditures	118		272		410			700
Investments in unconsolidated affiliates	4		95		132			163
G&P
Service revenue	524		555		1,549			1,627
Rental income	94		88		271			260
Product related revenue	234		207		607			714
Income/(loss) from equity method investments	47		35		(1,138		)	96
Other income	14		16		41			45
Total segment revenues and other income(1)	913		901		1,330			2,742
Segment Adjusted EBITDA(2)	442		399		1,252			1,120
Restructuring expenses	9		—		9			—
Capital expenditures	131		321		375			953
Investments in unconsolidated affiliates	$	18	$	76	$	112		$	331

(1) Within the total segment revenues and other income amounts presented above, third party revenues for the L&S segment were $139 million and $443 million for the three and nine months ended September 30, 2020, respectively, and $182 million and $498 million for the three and nine months ended September 30, 2019, respectively. Third party revenues for the G&P segment were $858 million and $1,181 million for the three and nine months ended September 30, 2020, respectively, and $843 million and $2,581 million for the three and nine months ended September 30, 2019, respectively.

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

(In millions)	September 30, 2020		December 31, 2019
Segment assets
Cash and cash equivalents	$	28	$	15
L&S	21,144		20,810
G&P	15,490		19,605
Total assets	$	36,662	$	40,430

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

	Three Months Ended September 30,						Nine Months Ended September 30,
(In millions)	2020			2019			2020			2019
Reconciliation to Net income/(loss):
L&S Segment Adjusted EBITDA	$	893		$	766		$	2,604		$	1,895
G&P Segment Adjusted EBITDA	442			399			1,252			1,120
Total reportable segments	1,335			1,165			3,856			3,015
Depreciation and amortization(1)	(346		)	(302		)	(992		)	(916		)
Provision for income taxes	(1		)	(4		)	(1		)	(2		)
Amortization of deferred financing costs	(15		)	(10		)	(44		)	(29		)
Non-cash equity-based compensation	(4		)	(5		)	(12		)	(17		)
Impairment expense	—			—			(2,165		)	—
Net interest and other financial costs	(223		)	(223		)	(647		)	(657		)
Gain on extinguishment of debt	14			—			14			—
Income/(loss) from equity method investments	83			95			(1,012		)	255
Distributions/adjustments related to equity method investments	(130		)	(145		)	(369		)	(399		)
Unrealized derivative (losses)/gains(2)	(10		)	11			(1		)	7
Acquisition costs	—			(9		)	—			(14		)
Restructuring expenses	(36		)	—			(36		)	—
Other	(3		)	(1		)	(5		)	(1		)
Adjusted EBITDA attributable to noncontrolling interests	10			9			27			23
Adjusted EBITDA attributable to Predecessor(3)	—			108			—			770
Net income/(loss)	$	674		$	689		$	(1,387	)	$	2,035

(1) Depreciation and amortization attributable to L&S was $164 million and $440 million for the three and nine months ended September 30, 2020, respectively, and $113 million and $373 million for the three and nine months ended September 30, 2019, respectively. Depreciation and amortization attributable to G&P was $182 million and $552 million for the three and nine months ended September 30, 2020, respectively, and $189 million and $543 million for the three and nine months ended September 30, 2019, 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.