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What changed in MPLX LP's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of MPLX LP's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+402 added−411 removedSource: 10-K (2024-02-28) vs 10-K (2023-02-23)

Top changes in MPLX LP's 2023 10-K

402 paragraphs added · 411 removed · 322 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

81 edited+21 added−17 removed170 unchanged
Biggest changeRECENT DEVELOPMENTS • On January 25, 2023, we announced the board of directors of our general partner declared a distribution of $0.7750 per common unit that was paid on February 14, 2023 to common unitholders of record on February 6, 2023. • On February 9, 2023, we issued $1.1 billion aggregate principal amount of 5.00 percent senior notes due 2033 and $500 million aggregate principal amount of 5.65 percent senior notes due 2053 in an underwritten public offering. • On February 15, 2023, we redeemed all of the 600,000 outstanding Series B preferred units at the redemption price of $1,000 per unit.
Biggest changeRECENT DEVELOPMENTS • On January 24, 2024, we announced the board of directors of our general partner declared a distribution of $0.85 per common unit that was paid on February 14, 2024 to common unitholders of record on February 5, 2024.
The business consists of two segments based on the nature of services it offers: Logistics and Storage (“L&S”) and Gathering and Processing (“G&P”). Our assets are positioned throughout the United States. The L&S segment primarily engages in the gathering, transportation, storage and distribution of crude oil, refined products, other hydrocarbon-based products, and renewables.
Our assets are positioned throughout the United States. The business consists of two segments based on the nature of services it offers: Logistics and Storage (“L&S”) and Gathering and Processing (“G&P”). The L&S segment primarily engages in the gathering, transportation, storage and distribution of crude oil, refined products, other hydrocarbon-based products, and renewables.
A carrier must, as a general rule, utilize the indexing methodology to change its rates. Cost-of-service ratemaking, market-based rates and settlement rates are alternatives to the indexing approach and may be used in certain specified circumstances to change rates. 11 Table of Contents Intrastate services provided by certain of our liquids pipelines are subject to regulation by state regulatory authorities.
A carrier must, as a general rule, utilize the indexing methodology to change its rates. Cost-of-service ratemaking, market-based 11 Table of Contents rates and settlement rates are alternatives to the indexing approach and may be used in certain specified circumstances to change rates. Intrastate services provided by certain of our liquids pipelines are subject to regulation by state regulatory authorities.
Safety Matters We are subject to oversight pursuant to the federal Occupational Safety and Health Act (“OSH Act”), as amended, as well as comparable state statutes that regulate the protection of the health and safety of workers.
Safety Matters We are subject to oversight pursuant to the federal Occupational Safety and Health Act, as amended (“OSH Act”), as amended, as well as comparable state statutes that regulate the protection of the health and safety of workers.
We believe that we are in material compliance with all applicable laws and regulations regarding the security of our facilities. Tribal Lands Various federal agencies, including the EPA and the Department of the Interior, along with certain Native American tribes, promulgate and enforce regulations pertaining to oil and gas operations on Native American tribal lands where we operate.
We believe that we are in material compliance with all applicable laws and regulations regarding the security of our facilities. Tribal Lands Various federal agencies, including EPA and the Department of the Interior, along with certain Native American tribes, promulgate and enforce regulations pertaining to oil and gas operations on Native American tribal lands where we operate.
MPC has also committed to pay a fixed fee for 100 percent of available capacity for boats, barges and third-party chartered equipment under the marine transportation services agreement. We also have a fuels distribution agreement with MPC under which we provide scheduling and other services of MPC’s products.
MPC has also committed to pay a fixed fee for 100 percent of available capacity for boats, barges and third-party chartered equipment under the marine transportation services agreements. We also have a fuels distribution agreement with MPC under which we provide scheduling and other services for MPC’s products.
In May 2016, the EPA issued lifetime health advisory levels (“HALs”) and health effects support documents for two PFAS substances - PFOA and PFOS. These HALs were updated in June 2022, when EPA also issued HALs for two additional PFAS substances.
In May 2016, EPA issued lifetime health advisory levels (“HALs”) and health effects support documents for two PFAS substances - PFOA and PFOS. These HALs were updated in June 2022, when EPA also issued HALs for two additional PFAS substances.
This includes positioning the MPLX portfolio and capabilities to be successful through the energy evolution. 3 Table of Contents 2022 RESULTS The following table summarizes the operating performance for each segment for the year ended December 31, 2022. For further discussion of our segments and a reconciliation of Non-GAAP measures to our Consolidated Statements of Income, see Item 7.
This includes positioning the MPLX portfolio and capabilities to be successful through the energy evolution. 3 Table of Contents 2023 RESULTS The following table summarizes the operating performance for each segment for the year ended December 31, 2023. For further discussion of our segments and a reconciliation of Non-GAAP measures to our Consolidated Statements of Income, see Item 7.
We have executed numerous long-term, fee-based agreements with minimum volume commitments with MPC which provide us with a stable and predictable revenue stream and source of cash flows. As of December 31, 2022, MPC owned our general partner and approximately 65 percent of our outstanding common units.
We have executed numerous long-term, fee-based agreements with minimum volume commitments with MPC which provide us with a stable and predictable revenue stream and source of cash flows. As of December 31, 2023, MPC owned our general partner and approximately 65 percent of our outstanding common units.
EPAct 2005 gives the FERC civil penalty authority to impose penalties for certain violations of up to approximately $1.3 million per day for each violation, subject to FERC’s annual inflation adjustment. FERC also has the authority to order disgorgement of profits from transactions deemed to violate the NGA and the EPAct 2005.
EPAct 2005 gives the FERC civil penalty authority to impose penalties for certain violations of up to approximately $1.5 million per day for each violation, subject to FERC’s annual inflation adjustment. FERC also has the authority to order disgorgement of profits from transactions deemed to violate the NGA and EPAct 2005.
Although it is not possible at this time to predict how legislation or new regulations that may be adopted to address GHG emissions would impact our business, any such future laws and regulations could require us to incur increased operating costs, such as costs to purchase and operate emissions control systems, to acquire emission allowances or comply with new regulatory or reporting requirements including the imposition of a carbon tax.
Although it is not possible at this time to predict how legislation or new regulations that may be adopted to address GHG emissions would impact our business, any such future laws and regulations could require us to incur increased operating costs, such as costs to purchase and operate emissions control systems, to acquire emission allowances or comply 16 Table of Contents with new regulatory or reporting requirements including the imposition of a carbon tax.
Construction or maintenance of our plants, compressor stations, pipelines, barge docks and storage facilities may impact wetlands or other surface water bodies, which are also regulated under the CWA by the EPA, the United States Army Corps of Engineers and state water quality agencies.
Construction or maintenance of our plants, compressor stations, pipelines, barge docks and storage facilities may impact wetlands or other surface water bodies, which are also regulated under the CWA by EPA, the United States Army Corps of Engineers (“Army Corps”) and state water quality agencies.
The map below and Item 2. Properties provide information about our assets as of December 31, 2022: We continue to have a strategic relationship with MPC, which is a large source of our revenues.
The map below and Item 2. Properties provide information about our assets as of December 31, 2023: We continue to have a strategic relationship with MPC, which is a large source of our revenues.
In addition, changes in the product quality of the products we receive on our product pipelines could reduce or eliminate our ability to blend products. 17 Table of Contents Marine Transportation Our marine transportation business is subject to regulation by the USCG, federal laws, including the Jones Act, state laws and certain international conventions, as well as numerous environmental regulations.
In addition, changes in the product quality of the products we receive on our product pipelines could reduce or eliminate our ability to blend products. Marine Transportation Our marine transportation business is subject to regulation by the USCG, federal laws, including the Jones Act, state laws and certain international conventions, as well as numerous environmental regulations.
In addition, we have several facilities that are subject to the United States Coast Guard’s Maritime Transportation Security Act, and a number of other facilities that are subject to the Transportation Security Administration’s Pipeline Security Guidelines and are designated as “Critical Facilities.” We have an internal inspection program designed to monitor and ensure compliance with all of these requirements.
We also have several facilities that are subject to the United States Coast Guard’s Maritime Transportation Security Act, and a number of other facilities that are subject to the Transportation Security Administration’s Pipeline Security Guidelines and are designated as “Critical Facilities.” We have an internal inspection program designed to monitor and ensure compliance with all of these requirements.
Congress may also take 15 Table of Contents further action to regulate PFAS. We cannot currently predict the impact of potential statutes or regulations on our operations. In addition, many states are actively proposing and adopting legislation and regulations relating to the use of AFFFs containing PFAS.
Congress may also take further action to regulate PFAS. We cannot currently predict the impact of potential statutes or regulations on our operations. In addition, many states are actively proposing and adopting legislation and regulations relating to the use of AFFFs containing PFAS.
On October 22, 2019, EPA and the United States Army Corps of Engineers (“Army Corps”) published a final rule to repeal the 2015 “Clean Water Rule: Definition of Waters of the United States” (“2015 Rule”), which amended portions of the Code of Federal Regulations to restore the regulatory text that existed prior to the 2015 Rule, effective December 23, 2019.
On October 22, 2019, EPA and the Army Corps published a final rule to repeal the 2015 “Clean Water Rule: Definition of Waters of the United States” (“2015 Rule”), which amended portions of the Code of Federal Regulations to restore the regulatory text that existed prior to the 2015 Rule, effective December 23, 2019.
In February 2019, EPA issued a PFAS Action Plan identifying actions the EPA is planning to take to study and regulate various PFAS chemicals.
In February 2019, EPA issued a PFAS Action Plan identifying actions it is planning to take to study and regulate various PFAS chemicals.
Additionally, many states are using the EPA HALs for PFOS and PFOA and some states are adopting and proposing state-specific drinking water and cleanup standards for various PFAS, including PFOS and PFOA. We cannot currently predict the impact of these regulations on our liquidity, financial position, or results of operations.
Additionally, many states are using EPA HALs for PFOS and PFOA and some states are adopting and proposing state-specific drinking water and cleanup standards for various PFAS, including but not limited to PFOS and PFOA. We cannot currently predict the impact of these regulations on our liquidity, financial position, or results of operations.
These assets consist of a network of 15,105 miles of wholly and jointly-owned common carrier pipelines and associated storage assets, refining logistics assets at 13 refineries, 89 terminals including one export terminal, storage caverns, tank farm assets including rail and truck racks, an inland marine business and a fuels distribution business.
These assets consist of a network of 15,361 miles of wholly and jointly-owned common carrier pipelines and associated storage assets, refining logistics assets at 13 refineries, 88 terminals including one export terminal, storage caverns, tank farm assets including rail and truck racks, an inland marine business and a fuels distribution business.
MPC retains a significant interest in us through its non-economic ownership of our general partner and holding approximately 65 percent of the outstanding common units of MPLX as of December 31, 2022. Given MPC’s significant interest in us, we believe MPC will promote and support the successful execution of our business strategies.
MPC retains a significant interest in us through its non-economic ownership of our general partner and held approximately 65 percent of the outstanding common units of MPLX as of December 31, 2023. Given MPC’s significant interest in us, we believe MPC will promote and support the successful execution of our business strategies.
Safety MPC is committed to safe operations to protect the health and safety of its employees, contractors and communities. MPC’s commitment to safe operations is reflected in its safety systems design, its well-maintained equipment and by learning from its 18 Table of Contents incidents.
Safety MPC is committed to safe operations to protect the health and safety of its employees, contractors and communities. MPC’s commitment to safe operations is reflected in its safety systems design, its well-maintained equipment and by learning from its incidents.
We are progressing towards meeting our 2025 and 2030 methane intensity reduction goals, as well as our biodiversity target, by applying sustainable landscapes to our compatible right of ways. ORGANIZATIONAL STRUCTURE The following diagram depicts our organizational structure and MPC’s ownership interest in us as of February 16, 2023.
We are progressing towards meeting our 2025 and 2030 methane intensity reduction goals, as well as our biodiversity target, by applying sustainable landscapes to our compatible right of ways. ORGANIZATIONAL STRUCTURE The following diagram depicts our organizational structure and MPC’s ownership interest in us as of February 23, 2024.
The majority of 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.
The majority of effects of seasonality on our L&S segment’s revenues are mitigated through the use of fee-based transportation and storage services agreements with MPC that include minimum volume commitments.
Under certain transportation services agreements, the amount of any deficiency payment paid by MPC may be applied as a credit for any volumes transported on the applicable pipeline in excess of MPC’s minimum volume commitment during a limited number of succeeding periods, after which time any unused credits will expire. We have a trucking transportation services agreement with MPC.
Under certain transportation services agreements, the amount of any deficiency payment paid by MPC may be applied as a credit for any volumes transported on the applicable pipeline in excess of MPC’s minimum volume commitment during a limited number of succeeding periods, after which time any unused credits will expire.
(7) Includes one additional five-year renewal term. Under transportation services agreements containing minimum volume commitments, if MPC fails to transport its minimum throughput volumes during any period, then MPC will pay us a deficiency payment equal to the volume of the deficiency multiplied by the tariff rate then in effect.
(7) The contract initiated in February 2018 and includes one additional five-year renewal term. Under transportation services agreements containing minimum volume commitments, if MPC fails to transport its minimum throughput volumes during any period, then MPC will pay us a deficiency payment equal to the volume of the deficiency multiplied by the tariff rate then in effect.
It is 14 Table of Contents possible that some wastes generated by us that are currently classified as non-hazardous wastes may in the future be designated as hazardous wastes, resulting in the wastes being subject to more rigorous and costly transportation, storage, treatment and disposal requirements.
It is possible that some wastes generated by us that are currently classified as non-hazardous wastes may in the future be designated as hazardous wastes, resulting in the wastes being subject to more rigorous and costly transportation, storage, treatment and disposal requirements.
The proposed rule titled “Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Gas Sector Climate Review” would require MPLX to control and reduce methane emissions within its natural gas gathering and boosting operations and gas processing facilities.
The rule titled “Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Gas Sector Climate Review” requires MPLX to control and reduce methane emissions within its natural gas gathering and boosting operations and gas processing facilities.
With our commitment to strict-capital discipline and adoption of a low-cost culture, we expect to continue generating strong cash flow, enhancing our financial flexibility to invest in and grow the business, while also supporting the return of capital to MPLX unitholders. Commitment to Sustainability : Our approach to sustainability spans the environmental, social and governance dimensions of our business.
With our commitment to strict-capital discipline and fostering a low-cost culture, we expect to continue generating strong cash flow, enhancing our financial flexibility to invest in and grow the business, while also supporting the return of capital to MPLX unitholders. 4 Table of Contents Commitment to Sustainability : Our approach to sustainability spans the environmental, social and governance dimensions of our business.
In 2022, MPC accounted for 47 percent of our total revenues and other income, primarily within our L&S segment, and will continue to be an important source of our revenues and cash flows for the foreseeable future.
In 2023, MPC accounted for 50 percent of our total revenues and other income, primarily within our L&S segment, and will continue to be an important source of our revenues and cash flows for the foreseeable future.
Financial Statements and Supplementary Data included in this Annual Report on Form 10-K. 7 Table of Contents OUR RELATIONSHIP WITH MPC One of our competitive strengths is our strategic relationship with MPC, which is the largest crude oil refiner in the United States in terms of refining capacity.
Financial Statements and Supplementary Data included in this Annual Report on Form 10-K. 7 Table of Contents OUR RELATIONSHIP WITH MPC One of our competitive strengths is our strategic relationship with MPC, which operates one of the largest refining systems in the United States in terms of refining capacity.
MPC owns and operates 13 refineries in the Gulf Coast, Mid-Continent and West Coast regions of the United States and distributes refined products, including renewable diesel, through transportation, storage, distribution and marketing services provided by its midstream segment, which primarily consists of MPLX.
MPC owns and operates 13 refineries in the Gulf Coast, Mid-Continent and West Coast regions of the United States and distributes refined products, including renewable diesel, through transportation, storage, distribution and marketing services provided primarily by MPLX.
Empowering people and prioritizing accountability are also key components for developing a high-performing culture, which is critical to achieving our strategic vision. Employee Profile As of December 31, 2022, our general partner and its affiliates, have approximately 5,811 full-time employees that provide services to us under our employee services agreements.
Empowering people and prioritizing accountability are also key components for developing a high-performing culture, which is critical to achieving MPC’s strategic vision. Employee Profile As of December 31, 2023, our general partner and its affiliates, had approximately 5,810 full-time employees that provide services to us under our employee services agreements.
G&P: The G&P segment gathers, processes and transports natural gas; and transports, fractionates, stores and markets NGLs. As of December 31, 2022, gathering and processing assets available to MPLX included approximately 10.4 Bcf/d of gathering capacity, 12.0 Bcf/d of natural gas processing capacity and 829 mbpd of fractionation and de-ethanization capacity.
G&P: The G&P segment gathers, processes and transports natural gas; and transports, fractionates, stores and markets NGLs. As of December 31, 2023, gathering and processing assets available to MPLX included approximately 9.7 Bcf/d of gathering capacity, 12.0 Bcf/d of natural gas processing capacity and 829 mbpd of fractionation and de-ethanization capacity.
Under these long-term, fee-based agreements, we provide transportation, terminal and storage services to MPC and, other than under our marine transportation services agreement, most of these agreements include minimum committed volumes from MPC.
We have entered into multiple transportation, terminal and storage services agreements with MPC. Under these long-term, fee-based agreements, we provide transportation, terminal and storage services to MPC and, other than under our marine transportation services agreement, most of these agreements include minimum committed volumes from MPC.
Additionally, we have certain indemnification agreements with MPC under which MPC retains responsibility for remediation of known environmental liabilities due to the use or operation of the assets prior to our ownership, and indemnifies us for any losses we incurred arising out of those remediation obligations. The indemnification for unknown pre-closing remediation liabilities is generally limited to five years.
Additionally, we have certain indemnification agreements with MPC under which MPC retains responsibility for remediation of environmental liabilities due to the use or operation of the assets prior to our ownership, and indemnifies us for any losses we incurred arising out of those remediation obligations.
The following table sets forth additional information regarding our transportation, storage, terminal, and fuels distribution services agreements with MPC as expected to be in effect throughout 2023: Agreement Initiation Date Initial Term (years) MPC minimum commitment Transportation Services (mbpd): Crude pipelines (1) Various 4-10 2,023 Refined product pipelines (2) Various 1-15 1,756 Marine (3) January 2015 6 N/A Storage Services (mbbls): Tank Farms (4) Various 2-12 131,791 Caverns (5) Various 10-17 4,209 Terminal Services (6) (mbpd) Various Various 2,013 Fuels Distribution Services (7) (millions of gallons per year) February 2018 10 23,449 (1) Commitments are adjusted for crude viscosity.
The following table sets forth additional information regarding our transportation, storage, terminal, and fuels distribution services agreements with MPC as expected to be in effect throughout 2024: Agreement Initial Term (years) MPC minimum commitment Transportation Services (mbpd): Crude pipelines (1) 4 - 10 1,875 Refined product pipelines (2) 1 - 15 1,549 Marine (3) 5 - 6 N/A Storage Services (mbbls): Tank Farms (4) 2 - 12 131,279 Caverns (5) 10 - 17 3,632 Terminal Services (6) (mbpd) Various 1,995 Fuels Distribution Services (7) (millions of gallons per year) 10 23,449 (1) Commitments are adjusted for crude viscosity.
We are also subject at regulated facilities to the Occupational Safety and Health Administration’s Process Safety Management and the EPA’s Risk Management Program requirements, which are intended to prevent or minimize the consequences of catastrophic releases of toxic, reactive, flammable or explosive chemicals. The application of these regulations can result in increased compliance expenditures.
We are also subject at regulated facilities to the Occupational Safety and Health Administration’s Process Safety Management and EPA’s Risk Management Program requirements, which are intended to prevent or minimize the consequences of catastrophic releases of toxic, reactive, flammable or explosive chemicals.
Our Series B preferred units were redeemed on February 15, 2023 and are no longer outstanding. 5 Table of Contents INDUSTRY OVERVIEW As of December 31, 2022, our diversified services in the midstream sector broken down by our segments are as follows: L&S: The midstream sector plays a crucial role in the oil and gas industry by providing gathering, transportation, terminalling, storage and marketing services as depicted below.
Our 6.875 percent Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (the “Series B preferred units”) were redeemed on February 15, 2023 and are no longer outstanding. 5 Table of Contents INDUSTRY OVERVIEW As of December 31, 2023, our diversified services in the midstream sector broken down by our segments are as follows: L&S: The midstream sector plays a crucial role in the oil and gas industry by providing gathering, transportation, terminalling, storage and marketing services as depicted below.
Under most of our terminal services agreements, if MPC fails to meet its minimum volume commitment during any period, then MPC will pay us a deficiency payment equal to the volume of the deficiency multiplied by the contractual fee then in effect.
Under most of our terminal services agreements, if MPC fails to meet its minimum volume commitment during any period, then MPC will pay us a deficiency payment equal to the volume of the deficiency multiplied by the contractual fee then in effect. Some of our terminal services agreements contain minimum commitments for various additional services such as storage and blending.
Its collaborative efforts, which include fostering an inclusive environment, providing broad-based development and mentorship opportunities, recognizing and rewarding accomplishments and offering benefits that support the well-being of its employees and their families, contribute to increased engagement and fulfilling careers.
MPC believes its employees are its greatest asset of strength, and the culture reflects the quality of individuals across its workforce. Its collaborative efforts, which include fostering an inclusive environment, providing broad-based development and mentorship opportunities, recognizing and rewarding accomplishments and offering benefits that support the well-being of its employees and their families, contribute to increased engagement and fulfilling careers.
Together, these components of MPC’s safety management system provide it with a comprehensive approach to managing risks and preventing incidents, illnesses and fatalities. Additionally, MPC’s annual cash bonus program metrics include several employee, process and environmental safety metrics.
Together, these components of MPC’s safety management system provide it with a comprehensive approach to managing risks and preventing incidents, illnesses and fatalities. Additionally, MPC’s annual cash bonus program metrics include several employee, process and environmental safety metrics. Talent Management MPC’s People Strategy holistically addresses the dynamic business environment it operates in.
Any change in mix may influence our long-term financial results. Keep-whole agreement with MPC MPLX has a keep-whole commodity agreement related to our Rockies operations with MPC. Under the agreement, MPC pays us a processing fee for NGLs related to keep-whole agreements and delivers shrink gas to the producers on our behalf.
Any change in mix may influence our long-term financial results. Keep-whole agreement with MPC MPLX has a keep-whole commodity agreement related to our Rockies operations with MPC. Under the agreement, MPC pays us a processing fee for NGLs related to keep-whole agreements and we pay MPC a marketing fee in exchange for assuming the commodity risk.
The proposed rule is consistent with the voluntary methane reduction programs that MPLX has been implementing through its Focus on Methane Program. As a result, we do not believe the proposed rule as written, if adopted, will have a material impact to our operations.
The rule is consistent with the voluntary methane reduction programs that MPLX has been implementing through its Focus on Methane Program. As a result, although the rule requires MPLX to make additional investments to further reduce methane emissions, we do not believe the rule will have a material impact to our operations.
The EPA identified that it would evaluate, among other actions, (1) proposing national drinking water standards for PFOA and PFOS, (2) develop cleanup recommendations for PFOA and PFOS, (3) evaluate listing PFOA and PFOS as hazardous substances under CERCLA, and (4) conduct toxicity assessments for other PFAS chemicals. In October 2021, EPA updated the 2019 PFAS Action Plan.
EPA identified that it would evaluate, among other actions, (1) proposing national drinking water standards for PFOA and PFOS, (2) developing cleanup recommendations for PFOA and PFOS, (3) evaluating listing PFOA and PFOS as hazardous substances under CERCLA, and (4) conducting toxicity assessments for other PFAS chemicals.
We are also the operator of additional crude oil and refined product pipelines owned by MPC and third parties for which we are paid operating fees. For the year ended December 31, 2022, approximately 88 percent of L&S segment revenues and other income was generated from MPC.
We are also the operator of additional crude oil and refined product pipelines either owned by MPC, or in which MPLX or MPC has an ownership interest, for which we are paid operating fees. For the year ended December 31, 2023, approximately 87 percent of L&S segment revenues and other income was generated from MPC.
Uncertainty related to the environmental assessment can result in delay and increased costs in completing new projects. 16 Table of Contents On December 6, 2022, EPA issued a proposed rule to regulate methane emissions from the Oil and Natural Gas Sector.
Uncertainty related to the environmental assessment can result in delay and increased costs in completing new projects. On December 2, 2023, EPA issued its final rule to regulate methane emissions from the Oil and Natural Gas Sector.
We pay MPC a marketing fee in exchange for assuming the commodity risk. The pricing structure under this agreement provides for a base volume subject to a base rate and incremental volumes subject to variable rates, which are calculated with reference to certain of our costs incurred as processor of the volumes.
The pricing structure under this agreement provides for a base volume subject to a base rate and incremental volumes subject to variable rates, which are calculated with reference to certain of our costs incurred as processor of the volumes. The pricing for both the base and incremental volumes are subject to revision each year.
For further financial information regarding our segments, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8.
Neither of these customers was significant to MPLX consolidated revenues. For further financial information regarding our segments, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8.
The pricing for both the base and incremental volumes are subject to revision each year. COMPETITION Within our L&S segment, our competition primarily comes from independent terminal and pipeline companies, integrated petroleum companies, refining and marketing companies, distribution companies with marketing and trading arms and from other wholesale petroleum products distributors.
COMPETITION Within our L&S segment, our competition primarily comes from independent terminal and pipeline companies, integrated petroleum companies, refining and marketing companies, distribution companies with marketing and trading arms and from other wholesale petroleum products distributors.
Hazardous and Solid Wastes We may incur liability under RCRA, and comparable or more stringent state statutes, which impose requirements relating to the handling and disposal of non-hazardous and hazardous wastes.
We cannot currently predict the impact of potential statutes or regulations on our remediation costs. 14 Table of Contents Hazardous and Solid Wastes We may incur liability under RCRA, and comparable or more stringent state statutes, which impose requirements relating to the handling and disposal of non-hazardous and hazardous wastes.
Renewal terms include multiple two to five-year terms. (2) Renewal terms include multiple one to five-year terms. (3) MPC has committed to utilize 100 percent of our available capacity of boats and barges. Renewal terms include two additional five-year terms. The contract is currently within the first renewal period.
Renewal terms include multiple two to five-year terms. (2) Renewal terms include multiple one to five-year terms. (3) MPC has committed to utilize 100 percent of our available capacity of boats and barges. These agreements are each subject to one remaining renewal period of five years.
MPLX receives fixed annual fees for providing the required services, which are subject to predetermined annual escalation rates. This agreement is subject to an initial term of five years and automatically renews for one additional five-year renewal period unless terminated by either party.
This agreement is subject to an initial term of five years and automatically renews for one additional five-year renewal period unless terminated by either party.
On December 7, 2021, EPA and the Army Corps issued a notice of proposed rulemaking with the stated purpose of repealing the 2020 Rule defining “waters of the United States” and adopting a rule largely based upon the definition adopted in 1986 with some revisions based upon subsequent U.S. Supreme Court rulings, in particular Rapanos v.
On January 18, 2023, EPA and the Army Corps published a final rule (“2023 Rule”) repealing the 2020 Rule defining “waters of the United States” and adopting a rule largely based upon the definition adopted in 1986 with some revisions based upon subsequent United States Supreme Court rulings, in particular Rapanos v.
OUR L&S CONTRACTS WITH MPC AND THIRD PARTIES Transportation Services Agreements, Storage Services Agreements, Terminal Services Agreements and Fuels Distribution Services Agreement with MPC Our L&S assets are strategically located within, and integral to, MPC’s operations. We have entered into multiple transportation, terminal and storage services agreements with MPC.
We have implemented and continue to pursue growth and integration opportunities along existing value chains that benefit both MPC and MPLX. OUR L&S CONTRACTS WITH MPC AND THIRD PARTIES Transportation Services Agreements, Storage Services Agreements, Terminal Services Agreements and Fuels Distribution Services Agreement with MPC Our L&S assets are strategically located within, and integral to, MPC’s operations.
This means lowering our costs in all aspects of our business and challenging ourselves to be disciplined in every dollar we spend across our organization. Commitment to Return Capital to Unitholders: We are committed to generating cash flows in excess of both our capital spending and our distributions, while maintaining a strong balance sheet.
Commitment to Return Capital to Unitholders: We are committed to generating cash flows in excess of both our capital spending and our distributions, while maintaining a strong balance sheet.
Grow Stable Cash Flows While Maintaining Strict Capital Discipline : We are focused on growing our feed-based services through long-term contracts, which provide through-cycle cash flow stability.
Grow Stable Cash Flows While Maintaining Strict Capital Discipline : We are focused on growing our fee-based services through long-term contracts, which provide through-cycle cash flow stability. We also challenge ourselves to be disciplined in our capital spending as we look to effectively deploy capital to grow our business and its cash flows.
Various federal, state and local agencies have the authority to prescribe product quality specifications for products. Changes in product quality specifications or blending requirements could reduce our throughput volumes, require us to incur additional handling costs or require capital expenditures.
Changes in product quality specifications or blending requirements could reduce our throughput volumes, require us to incur additional handling costs or require capital expenditures. For example, different product specifications for different markets affect the fungibility of the products in our system and could require the construction of additional storage.
In addition, our Code of Business Conduct and Code of Ethics for Senior Financial Officers are available in this same location. 19 Table of Contents MPLX LP uses its website, www.mplx.com, as a channel for routine distribution of important information, including news releases, analyst presentations and financial information.
MPLX LP uses its website, www.mplx.com , as a channel for routine distribution of important information, including news releases, analyst presentations and financial information.
All of the employees that conduct our business are directly employed by affiliates of our general partner. We believe that our general partner and its affiliates have a satisfactory relationship with those employees. MPC believes its employees are its greatest asset of strength, and the culture reflects the quality of individuals across its workforce.
Our general partner has the sole responsibility for providing the employees and other personnel necessary to conduct our operations. All of the employees that conduct our business are directly employed by affiliates of our general partner. We believe that our general partner and its affiliates have a satisfactory relationship with those employees.
The specialization within each group allows MPC to specifically address its broad range of current and future talent needs, as well as devote time and attention to candidates during the hiring process. MPC values diverse perspectives in the workforce, and accordingly seeks candidates with a variety of backgrounds and experience.
Its Talent Acquisition team consists of three segments: Executive Recruiting, Experienced Recruiting and University Recruiting. The specialization within each group allows it to specifically address MPC’s broad range of current and future talent needs, as well as devote time and attention to candidates during the hiring process.
On December 5, 2022, EPA issued to states and EPA regional offices a memorandum providing guidance for addressing PFAS discharges in wastewater and stormwater. Also, EPA has indicated it intends to issue a notice of proposed rulemaking in 2023 that will establish national drinking water standards for PFOS and PFOA.
On December 5, 2022, EPA issued to states and EPA regional offices a memorandum providing guidance for addressing PFAS discharges in wastewater and stormwater.
In general, we expect industry and regulatory safety standards to become more stringent over time, resulting in increased compliance expenditures. While these expenditures cannot be accurately estimated at this time, we do not expect such expenditures will have a material adverse effect on our results of operations.
While these expenditures cannot be accurately estimated at this time, we do not expect such expenditures will have a material adverse effect on our results of operations. The DOT has adopted safety regulations with respect to the design, construction, operation, maintenance, inspection and management of our pipeline assets.
We also challenge ourselves to be disciplined in our capital spending as we look to effectively deploy capital to grow our business and its cash flows. 4 Table of Contents Focus on Low-Cost Culture : We are committed to achieving operational excellence by reducing costs, improving efficiency, and driving operational improvements.
Focus on Low-Cost Culture : We are committed to achieving operational excellence by reducing costs, improving efficiency, and driving operational improvements. This means lowering our costs in all aspects of our business and challenging ourselves to be disciplined in every dollar we spend across our organization.
These laws and regulations may increase our costs of doing business on Native American tribal lands and impact the viability of, or prevent or delay our ability to conduct, our operations on such lands.
These laws and regulations may increase our costs of doing business on Native American tribal lands and impact the viability of, or prevent or delay our ability to conduct, our operations on such lands. 18 Table of Contents HUMAN CAPITAL We are managed and operated by the board of directors and executive officers of MPLX GP LLC (“MPLX GP”), our general partner and a wholly owned subsidiary of MPC.
MPLX has agreed to use commercially reasonable efforts to sell not less than a minimum quarterly volume of MPC’s products during each calendar quarter.
We have a fuels distribution service agreement with MPC under which MPC pays MPLX a tiered monthly fee based on the volume of MPC’s products marketed by MPLX each month, subject to a maximum annual volume. MPLX has agreed to use commercially reasonable efforts to sell not less than a minimum quarterly volume of MPC’s products during each calendar quarter.
Also, a petition has been filed with the Army Corps asking it to revoke the 2021 authorization. The Biden Administration could repeal or replace the 2021 authorization in a subsequent rulemaking. Repeal, vacation, revocation or replacement of the 2021 authorization could impact pipeline construction and maintenance activities.
Also, a petition has been filed with the Army Corps asking it to revoke the 2021 authorization. The Army Corps could repeal or replace the 2021 authorization in a subsequent rulemaking, and proposed modifications to NWP 12 are expected to be published for notice and comment in early 2024.
Security Certain of our facilities are subject to the Department of Homeland Security Chemical Facility Anti-Terrorism Standards.
Security Certain of our facilities are subject to the Department of Homeland Security Chemical Facility Anti-Terrorism Standards, which expired on July 28, 2023. Congress has introduced bills that, if passed, would extend the program.
The DOT has adopted safety regulations with respect to the design, construction, operation, maintenance, inspection and management of our pipeline assets. These regulations contain requirements for the development and implementation of pipeline integrity management programs, which include the inspection and testing of pipelines and the correction of anomalies.
These regulations contain requirements for the development and implementation of pipeline integrity management programs, which include the inspection and testing of pipelines and the correction of anomalies. These regulations also require that pipeline operation and maintenance personnel meet certain qualifications and that pipeline operators develop comprehensive spill response plans.
Management’s Discussion and Analysis of Financial Condition and Results of Operations as well as Item 8. Financial Statements and Supplementary Data – Note 10. (1) Includes non-cash gain on a lease reclassification of $509 million. See Item 8. Financial Statements and Supplementary Data - Note 20 in the consolidated financial statements for additional information.
Management’s Discussion and Analysis of Financial Condition and Results of Operations as well as Item 8. Financial Statements and Supplementary Data – Note 10.
Some of these agreements are subject to prepaid throughput volumes under which we agree to handle a certain amount of product throughput each month in exchange for a predetermined fixed fee, with any excess throughput or ancillary services subject to additional charges.
Some of these agreements contain minimum volume commitments under which we agree to handle a certain amount of product throughput each month in exchange for a predetermined fixed fee. Under the remaining agreements, we receive an agreed upon fee based on actual product throughput following the completion of services.
These regulations also require that pipeline operation and maintenance personnel meet certain qualifications and that pipeline operators develop comprehensive spill response plans. Product Quality Standards Refined products and other hydrocarbon-based products that we transport are generally sold by us or our customers for consumption by the public.
Product Quality Standards Refined products and other hydrocarbon-based products that we transport are generally sold by us or our customers for consumption by the public. Various federal, state and local agencies have the authority to prescribe product quality specifications for products.
Under the remaining agreements, we receive an agreed upon fee based on actual product throughput following the completion of services. Marine Services Agreements with MPC MPLX has an agreement with MPC under which it provides management services to assist MPC in the oversight and management of the marine business.
Marine Management Services Agreements with MPC MPLX has an agreement with MPC under which it provides management services to assist MPC in the oversight and management of the marine business. MPLX receives fixed annual fees for providing the required services, which are subject to predetermined annual escalation rates.
As part of our emergency response activities, we have used aqueous film forming foam (“AFFF”) containing PFAS chemicals as a vapor and fire suppressant. At this time, AFFFs containing PFAS are the only proven foams that can prevent and control a flammable petroleum-based liquid fire involving a large storage tank or tank containment area.
At this time, AFFFs containing PFAS are the most effective foams to prevent and control a flammable petroleum-based liquid fire involving a large storage tank or tank containment area. Fluorine-free firefighting foams are currently under development but have not yet proven to be as effective as AFFFs containing PFAS.
For a summary of our gas processing facilities, fractionation facilities, natural gas gathering systems, NGL pipelines and natural gas pipelines see Item 2. Properties - Gathering and Processing. For the year ended December 31, 2022, revenues earned from two customers within the Marcellus region were significant to the segment. Neither of these customers was significant to MPLX consolidated revenues.
For a summary of our gas processing facilities, fractionation facilities, natural gas gathering systems, NGL pipelines and natural gas pipelines see Item 2. Properties - Gathering and Processing.
The employee networks not only provide opportunities for employees to make meaningful and supportive connections, but they also serve a significant role in MPC’s DE&I strategy. AVAILABLE INFORMATION General information about MPLX LP and its general partner, MPLX GP LLC, including Governance Principles, Audit Committee Charter, Conflicts Committee Charter and Certificate of Limited Partnership, can be found at www.mplx.com.
AVAILABLE INFORMATION General information about MPLX LP and its general partner, MPLX GP LLC, including Governance Principles, Audit Committee Charter, Conflicts Committee Charter and Certificate of Limited Partnership, can be found at www.mplx.com . In addition, our Code of Business Conduct and Code of Ethics for Senior Financial Officers are available in this same location.
Further, MPC has a substantial accrual cap for vacation banks and also award a significant number of college and trade school scholarships to the high school senior children of employees through the Marathon Petroleum Scholars Program. Both full-time and part-time employees are eligible for these benefits.
In addition, MPC encourages employees to refresh and recharge by providing competitive vacation programs and paid parental leave benefits for birth mothers and nonbirth parents. Further, MPC awards a significant number of college and trade school scholarships to the high school senior children of employees through the Marathon Petroleum Scholars Program.
In 2021, the EPA announced it is reconsidering the National Ambient Air Quality Standards (“NAAQS”) for ozone and fine particulate matter. In January 2023, EPA published its proposal to lower the primary fine particulate matter annual standard from its current level of 12.0 µg/m3 to within the range of 9.0 to 10.0 µg/m3.
In February 2024, EPA released a final rule to lower the primary fine particulate matter annual standard from its current level of 12.0 µg/m3 to 9.0 µg/m3.
MPLX, through its fuels distribution services, distributes refined products under the Marathon brand through an extensive network of retail locations owned or operated by independent entrepreneurs across the United States.
Under these agreements, MPC pays MPLX a per-barrel fee for such storage capacity, regardless of whether MPC fully utilizes the available capacity. 8 Table of Contents Through our fuels distribution services, we distribute refined products through an extensive network of retail locations owned or operated by independent entrepreneurs.
Compensation and Benefits To ensure MPC is offering competitive pay packages in its recruitment and retention efforts, it annually benchmarks compensation, including base salaries, bonus levels and long-term incentive targets. MPC’s annual bonus program is a critical component of its compensation, as it provides individual rewards for achievement against preset financial and ESG goals, encouraging a sense of employee ownership.
MPC’s annual bonus program, for which all employees are eligible, is a critical component of its compensation as it rewards employees for MPC’s achievement against preset goals, encouraging employee commitment and ownership of results.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe rely on such systems to process, transmit and store electronic information, including financial records and personally identifiable information such as employee, customer and investor data, and to manage or support a variety of business processes, including our supply chain, pipeline operations, gathering and processing operations, financial transactions, banking and numerous other processes and transactions. 24 Table of Contents Our systems (and those of our third-party business partners and service providers) are subject to numerous and evolving cybersecurity threats and attacks, including ransomware and other malware, and phishing and social engineering schemes, which can compromise our ability to operate, and the confidentiality, availability, and integrity of data in our systems or those of our third-party business partners and service providers.
Biggest changeWe rely on such systems to process, transmit and store electronic information, including financial records and personally identifiable information such as employee, customer and investor data, and to manage or support a variety of business processes, including our supply chain, pipeline operations, gathering and processing operations, financial transactions, banking and numerous other processes and transactions.
Continuing increases in inflation could impact the commodity markets generally, the overall demand for our products and services, our costs for labor, material and services and the margins we are able to realize on our products, all of which could have an adverse impact on our business, financial position, results of operations and cash flows.
Continuing increases in inflation could impact the commodity markets generally, the overall demand for our products and services, our costs for labor, material and services and the margins we are able to realize on our products and services, all of which could have an adverse impact on our business, financial position, results of operations and cash flows.
Accordingly, we are indirectly subject to the operational and business decisions and risks of MPC, which include the following: • the timing and extent of changes in commodity prices and demand for MPC’s products, and the availability and costs of crude oil and other refinery feedstocks; • a material decrease in the refining margins at MPC’s refineries; • disruptions due to equipment interruption or failure at MPC’s facilities or at third-party facilities on which MPC’s business is dependent; • any decision by MPC to temporarily or permanently alter, curtail or shut down operations at one or more of its refineries or other facilities and reduce or terminate its obligations under our transportation and storage or refining logistics and fuels distribution agreements; • changes to the routing of volumes shipped by MPC on our crude oil and refined product pipelines or the ability of MPC to utilize third-party pipeline connections to access our pipelines; • MPC’s ability to remain in compliance with the terms of its outstanding indebtedness; • changes in the cost or availability of third-party pipelines, railways, vessels, terminals and other means of delivering and transporting crude oil, feedstocks, refined products, other hydrocarbon-based products and renewables; • state and federal environmental, economic, health and safety, energy and other policies and regulations, and any changes in those policies and regulations; • imposition of new economic sanctions against Russia or other countries and the effects of potential responsive countermeasures; • environmental incidents and violations and related remediation costs, fines and other liabilities; 32 Table of Contents • operational hazards and other incidents at MPC’s refineries and other facilities, such as explosions and fires, that result in temporary or permanent shut downs of those refineries and facilities; • changes in crude oil and refined product inventory levels and carrying costs; and • disruptions due to hurricanes, tornadoes or other forces of nature.
Accordingly, we are indirectly subject to the operational and business decisions and risks of MPC, which include the following: • the timing and extent of changes in commodity prices and demand for MPC’s products, and the availability and costs of crude oil and other refinery feedstocks; • a material decrease in the refining margins at MPC’s refineries; • disruptions due to equipment interruption or failure at MPC’s facilities or at third-party facilities on which MPC’s business is dependent; • any decision by MPC to temporarily or permanently alter, curtail or shut down operations at one or more of its refineries or other facilities and reduce or terminate its obligations under our transportation and storage or refining logistics and fuels distribution agreements; • changes to the routing of volumes shipped by MPC on our crude oil and refined product pipelines or the ability of MPC to utilize third-party pipeline connections to access our pipelines; • MPC’s ability to remain in compliance with the terms of its outstanding indebtedness; 32 Table of Contents • changes in the cost or availability of third-party pipelines, railways, vessels, terminals and other means of delivering and transporting crude oil, feedstocks, refined products, other hydrocarbon-based products and renewables; • state and federal environmental, economic, health and safety, energy and other policies and regulations, and any changes in those policies and regulations; • imposition of new economic sanctions against Russia or other countries and the effects of potential responsive countermeasures; • environmental incidents and violations and related remediation costs, fines and other liabilities; • operational hazards and other incidents at MPC’s refineries and other facilities, such as explosions and fires, that result in temporary or permanent shut downs of those refineries and facilities; • changes in crude oil and refined product inventory levels and carrying costs; and • disruptions due to hurricanes, tornadoes or other forces of nature.
Summary of Risk Factors We have in the past been adversely affected by certain of, and may in the future be adversely affected by, the following: • a significant decrease in oil and natural gas production in our areas of operation; • challenges in accurately estimating expected production volumes of our producer customers; • our dependence on third parties for the oil, natural gas and refined products we gather, transport and store, the natural gas we process, and the NGLs we fractionate and stabilize at our facilities; • our ability to retain existing customers or acquire new customers; • our ability to increase fees enough to cover costs incurred under our gathering, processing, transmission, transportation, fractionation, stabilization and storage agreements; • unplanned maintenance of the United States (“U.S.”) inland waterway infrastructure; • interruptions in operations at any of our facilities or those of our customers, including MPC; • the COVID-19 pandemic; • inflation; • problems affecting our information technology systems and those of our third-party business partners and service providers; • in our joint ventures, our lack of sole decision-making authority, our reliance on our joint venture partners’ financial condition and disputes between us and our joint venture partners; • terrorist attacks or other targeted operational disruptions aimed at our facilities or that impact our customers or the markets we serve; • increases to our maintenance or repair costs; • severe weather events, other climate conditions and earth movement and other geological hazards; • insufficient cash from operations after the establishment of cash reserves and payment of our expenses to enable us to pay the intended quarterly distribution to our unitholders; • our substantial debt and other financial obligations; • increases in interest rates; • our exposure to the credit risks of our key customers and derivative counterparties; • negative effects of our commodity derivative activities; • uninsured losses; • future costs relating to evolving environmental or other laws or regulations; • increased regulation of hydraulic fracturing; • climate-related and GHG emission regulation; • climate-related litigation; 20 Table of Contents • societal and political pressures and other forms of opposition to the future development, transportation and use of carbon-based fuels; • market deterioration prior to the completion of large capital projects; • increasing attention to ESG matters; • goals, targets and disclosures related to ESG matters; • federal and tribal approvals, regulations and lawsuits relating to our facilities that are located on Native American tribal lands; • our ability to maintain or obtain real property rights required for our business; • the consequences resulting from foreign investment in us or our general partner exceeding certain levels; • federal or state rate and service regulation or rate-making policies; • costs and liabilities resulting from performance of pipeline integrity programs and related repairs; • future impairments; • difficulties in making strategic acquisitions on economically acceptable terms from MPC or third parties; • integration risks from significant future acquisitions; • the failure by MPC to satisfy its obligations to us, or a significant reduction in volumes transported through our facilities or stored at our storage assets; • MPC materially suspending, reducing or terminating its obligations under its agreements with us; • MPC’s level of indebtedness or credit ratings; • various tax risks inherent in our master limited partnership structure, including the potential for unexpected tax liabilities for us or our unitholders, more burdensome tax filing requirements and future legislative changes to the expected tax treatment of an investment in us; • MPC’s conflicts of interest with us, its limited duties to us and our unitholders, and its potential favoring of its interests over our interests and the interests of our unitholders; • the requirements and restrictions arising under our Sixth Amended and Restated Agreement of Limited Partnership, dated as of February 1, 2021 (“Partnership Agreement”), including the requirement that we distribute all of our available cash, limitations on our general partner’s duties, limited unitholder voting rights, and limited unitholder recourse in the event unitholders are dissatisfied with our operations; • cost reimbursements and fees paid to our general partner and its affiliates, which in certain circumstances are subject to our general partner’s sole discretion; • control of our general partner being transferred to a third party without unitholder consent; • the issuance of additional units resulting in the dilution of limited unitholder interests, which issuances may be made without unitholder approval; • the sale of units - and the adverse impact on the trading price of the common units which might result from such sale - by MPC of the units it holds in public or private markets, and such sales could have an adverse impact on the trading price of the common units; • affiliates of our general partner, including MPC, competing with us, and neither our general partner nor its affiliates having any obligation to present business opportunities to us; • our general partner having a limited call right that may require unitholders to sell common units at an undesirable time or price; • a unitholder’s liability not being limited if a court finds that unitholder action constitutes control of our business; • unitholders may have to repay distributions that were wrongfully distributed to them; • the NYSE not requiring a publicly traded limited partnership like us to comply with certain of its corporate governance requirements; and • the Court of Chancery of the State of Delaware being, to the extent permitted by law, the sole and exclusive forum for substantially all disputes between us and our limited partners. 21 Table of Contents Business and Operational Risks A significant decrease in oil and natural gas production in our areas of operation may adversely affect our business, financial condition, results of operation and cash available for distribution.
Summary of Risk Factors We have in the past been adversely affected by certain of, and may in the future be adversely affected by, the following: • a significant decrease in oil and natural gas production in our areas of operation; • challenges in accurately estimating expected production volumes of our producer customers; • our dependence on third parties for the oil, natural gas and refined products we gather, transport and store, the natural gas we process, and the NGLs we fractionate and stabilize at our facilities; • our ability to retain existing customers or acquire new customers; • our ability to increase fees enough to cover costs incurred under our gathering, processing, transmission, transportation, fractionation, stabilization and storage agreements; • unplanned maintenance of the United States (“U.S.”) inland waterway infrastructure; • interruptions in operations at any of our facilities or those of our customers, including MPC; • inflation; • problems affecting our information technology systems and those of our third-party business partners and service providers; • in our joint ventures, our lack of sole decision-making authority, our reliance on our joint venture partners’ financial condition and disputes between us and our joint venture partners; • terrorist attacks or other targeted operational disruptions aimed at our facilities or that impact our customers or the markets we serve; • increases to our maintenance or repair costs; 20 Table of Contents • severe weather events, other climate conditions and earth movement and other geological hazards; • insufficient cash from operations after the establishment of cash reserves and payment of our expenses to enable us to pay the intended quarterly distribution to our unitholders; • our substantial debt and other financial obligations; • increases in interest rates; • our exposure to the credit risks of our key customers and derivative counterparties; • negative effects of our commodity derivative activities; • uninsured losses; • future costs relating to evolving environmental or other laws or regulations; • increased regulation of hydraulic fracturing; • climate-related and GHG emission regulation; • climate-related litigation; • societal and political pressures and other forms of opposition to the future development, transportation and use of carbon-based fuels; • market deterioration prior to the completion of large capital projects; • increasing attention to ESG matters; • goals, targets and disclosures related to ESG matters; • federal and tribal approvals, regulations and lawsuits relating to our facilities that are located on Native American tribal lands; • our ability to maintain or obtain real property rights required for our business; • the consequences resulting from foreign investment in us or our general partner exceeding certain levels; • federal or state rate and service regulation or rate-making policies; • costs and liabilities resulting from performance of pipeline integrity programs and related repairs; • future impairments; • difficulties in making strategic acquisitions on economically acceptable terms from MPC or third parties; • integration risks from significant future acquisitions; • the failure by MPC to satisfy its obligations to us, or a significant reduction in volumes transported through our facilities or stored at our storage assets; • MPC materially suspending, reducing or terminating its obligations under its agreements with us; • MPC’s level of indebtedness or credit ratings; • various tax risks inherent in our master limited partnership structure, including the potential for unexpected tax liabilities for us or our unitholders, more burdensome tax filing requirements and future legislative changes to the expected tax treatment of an investment in us; • MPC’s conflicts of interest with us, its limited duties to us and our unitholders, and its potential favoring of its interests over our interests and the interests of our unitholders; • the requirements and restrictions arising under our Sixth Amended and Restated Agreement of Limited Partnership, dated as of February 1, 2021 (“Partnership Agreement”), including the requirement that we distribute all of our available cash, limitations on our general partner’s duties, limited unitholder voting rights, and limited unitholder recourse in the event unitholders are dissatisfied with our operations; • cost reimbursements and fees paid to our general partner and its affiliates, which in certain circumstances are subject to our general partner’s sole discretion; • control of our general partner being transferred to a third party without unitholder consent; • the issuance of additional units resulting in the dilution of limited unitholder interests, which issuances may be made without unitholder approval; • the sale of units - and the adverse impact on the trading price of the common units which might result from such sale - by MPC of the units it holds in public or private markets, and such sales could have an adverse impact on the trading price of the common units; 21 Table of Contents • affiliates of our general partner, including MPC, competing with us, and neither our general partner nor its affiliates having any obligation to present business opportunities to us; • our general partner having a limited call right that may require unitholders to sell common units at an undesirable time or price; • a unitholder’s liability not being limited if a court finds that unitholder action constitutes control of our business; • unitholders may have to repay distributions that were wrongfully distributed to them; • the NYSE not requiring a publicly traded limited partnership like us to comply with certain of its corporate governance requirements; and • the Court of Chancery of the State of Delaware being, to the extent permitted by law, the sole and exclusive forum for substantially all disputes between us and our limited partners.
Additionally, our customers that gather gas through facilities that are not otherwise dedicated to us may develop their own processing and fractionation facilities in lieu of using our services. As a consequence of the increase in competition in the industry, and the volatility of natural gas prices, end-users and utilities are reluctant to enter into long-term purchase contracts.
Additionally, our customers that gather gas through facilities that are not otherwise dedicated to us may develop their own processing and fractionation facilities in lieu of using our services. As a consequence of the increase in competition in the industry, as well as the volatility of natural gas prices, end-users and utilities are reluctant to enter into long-term purchase contracts.
Non-U.S. unitholders are generally taxed and subject to income tax filing requirements by the United States on income effectively connected with a U.S. trade or business. Income allocated to our unitholders and any gain from the sale of our units will generally be considered to be “effectively connected” with a U.S. trade or business.
Non-U.S. unitholders are generally taxed and subject to income tax filing requirements by the United States on income effectively connected with a U.S. trade or business. All income allocated to our unitholders and any gain from the sale of our units will generally be considered to be “effectively connected” with a U.S. trade or business.
Such risks could adversely impact our business and ability to realize certain growth strategies. We operate and develop our business with the expectation that regulations and societal sentiment will continue to enable the development, transportation and use of carbon-based fuels.
Such risks could adversely impact our business and our ability to continue to operate or realize certain growth strategies. We operate and develop our business with the expectation that regulations and societal sentiment will continue to enable the development, transportation and use of carbon-based fuels.
Our failure or perceived failure to pursue or fulfill such goals and targets or to satisfy various reporting standards within the timelines we announce, or at all, could have a negative impact on investor sentiment, ratings outcomes for evaluating our approach to ESG matters, stock price, and cost of capital and expose us to government enforcement actions and private litigation, among other material adverse impacts.
Our failure or perceived failure to pursue or fulfill such goals and targets or to satisfy various reporting standards within the timelines we announce, or at all, could have a negative impact on investor sentiment, ratings outcomes for evaluating our approach to ESG matters, unit price, and cost of capital and expose us to government enforcement actions and private litigation, among other material adverse impacts.
The adoption of additional laws or regulations that apply more comprehensive or stringent safety standards to gas, NGL, crude oil and refined product lines or other facilities, or the expansion of regulatory inspections by regulators, could require us to install new or modified safety controls, pursue added capital projects, make modifications or operational changes, or conduct maintenance programs on an accelerated basis, all of which could require us to incur increased capital and operational costs or operational delays that could be significant and have a material adverse effect on our financial position or results of operations and ability to make distributions to our unitholders.
The adoption of additional laws or regulations that apply more comprehensive or stringent safety standards to gas, NGL, crude oil and refined product lines or other facilities, or the expansion of regulatory inspections by regulators, could require us to install 31 Table of Contents new or modified safety controls, pursue added capital projects, make modifications or operational changes, or conduct maintenance programs on an accelerated basis, all of which could require us to incur increased capital and operational costs or operational delays that could be significant and have a material adverse effect on our financial position or results of operations and ability to make distributions to our unitholders.
Climate change and GHG emission regulation could affect our operations, energy consumption patterns and regulatory obligations, any of which could affect our results of operations and financial condition. Currently, multiple legislative and regulatory measures to address GHG (including carbon dioxide, methane and nitrous oxides) and other emissions are in various phases of consideration, promulgation or implementation.
Climate change and GHG emission regulation could affect our operations, energy consumption patterns and regulatory obligations, any of which could adversely impact our results of operations and financial condition. Currently, multiple legislative and regulatory measures to address GHG (including carbon dioxide, methane and nitrous oxides) and other emissions are in various phases of consideration, promulgation or implementation.
Our limited partnership agreement provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any claims, actions or proceedings: • arising out of or relating in any way to our limited partnership agreement, or the rights or powers of, or restrictions on, our limited partners or the limited partnership; • brought in a derivative manner on behalf of the limited partnership; • asserting a claim of breach of a duty owed by any director, officer, or other employee of the limited partnership or the general partner, or owed by the general partner, to the partnership or the limited partners; 40 Table of Contents • asserting a claim arising pursuant to any provision of the Delaware Revised Uniform Limited Partnership Act; or • asserting a claim governed by the internal affairs doctrine.
Our limited partnership agreement provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any claims, actions or proceedings: • arising out of or relating in any way to our limited partnership agreement, or the rights or powers of, or restrictions on, our limited partners or the limited partnership; • brought in a derivative manner on behalf of the limited partnership; • asserting a claim of breach of a duty owed by any director, officer, or other employee of the limited partnership or the general partner, or owed by the general partner, to the partnership or the limited partners; • asserting a claim arising pursuant to any provision of the Delaware Revised Uniform Limited Partnership Act; or • asserting a claim governed by the internal affairs doctrine.
If we are unable to find economically viable, as well as publicly acceptable, solutions that reduce our GHG emissions, reduce GHG intensity for new and existing projects, increase our non-fossil fuel product portfolio, and/or address other ESG-related stakeholder concerns, we could experience 29 Table of Contents additional costs or financial penalties, delayed or cancelled projects, or adverse unit price impacts, which could have a material and adverse effect on our business and results of operations.
If we are unable to find economically viable, as well as publicly acceptable, solutions that reduce our GHG emissions, reduce GHG intensity for new and existing projects, increase our non-fossil fuel product portfolio, and/or address other ESG-related stakeholder concerns, we could experience additional costs or financial penalties, delayed or cancelled projects, or adverse unit price impacts, which could have a material and adverse effect on our business and results of operations.
The Shipping Act of 1916 and Merchant Marine Act of 1920 (collectively, the “Maritime Laws”), generally require that vessels engaged in U.S. coastwise trade be owned by U.S. citizens. Among other requirements to establish citizenship, entities that own such vessels must be owned at least 75 percent by U.S. citizens.
The Shipping Act of 1916 and Merchant Marine Act of 1920 (together, the “Maritime Laws”), generally require that vessels engaged in U.S. coastwise trade be owned by U.S. citizens. Among other requirements to establish citizenship, entities that own such vessels must be owned at least 75 percent by U.S. citizens.
Because the techniques used to obtain unauthorized access, or to disable or degrade systems continuously evolve and have become increasingly complex and sophisticated, and can remain undetected for a period of time despite efforts to detect and respond in a timely manner, we (and our third-party business partners and service providers) are subject to the risk of cyberattacks.
Because the techniques used to obtain unauthorized access, or to disable or degrade systems 24 Table of Contents continuously evolve and have become increasingly complex and sophisticated, and can remain undetected for a period of time despite efforts to detect and respond in a timely manner, we (and our third-party business partners and service providers) are subject to the risk of cyberattacks.
Laws and regulations expected to become more stringent relate to the following: • the emission or discharge of materials into the environment; • solid and hazardous waste management; • the regulatory classification of materials currently or formerly used in our business; • pollution prevention; • GHG emissions; • climate change; • public and employee safety and health; 27 Table of Contents • permitting; • inherently safer technology; and • facility security.
Laws and regulations expected to become more stringent relate to the following: • the emission or discharge of materials into the environment; • solid and hazardous waste management; • the regulatory classification of materials currently or formerly used in our business; • pollution prevention; • GHG emissions; • climate change; • public and employee safety and health; • permitting; • inherently safer technology; and • facility security.
Increasing concerns about climate change and carbon intensity have also resulted in societal concerns and a number of international and national measures to limit GHG emissions. Additional stricter measures and investor pressure can be expected in the future and any of these changes may have a material adverse impact on our business or financial condition.
Increasing concerns about climate change and carbon intensity have also resulted in societal concerns and a 28 Table of Contents number of international and national measures to limit GHG emissions. Additional stricter measures and investor pressure can be expected in the future and any of these changes may have a material adverse impact on our business or financial condition.
Our Partnership Agreement also contains provisions limiting the ability of unitholders to call meetings or to acquire information about our operations, as well as other provisions limiting the unitholders’ ability to influence the manner or direction of management. 38 Table of Contents If unitholders are not both citizenship-eligible holders and rate-eligible holders, their common units may be subject to redemption.
Our Partnership Agreement also contains provisions limiting the ability of unitholders to call meetings or to acquire information about our operations, as well as other provisions limiting the unitholders’ ability to influence the manner or direction of management. If unitholders are not both citizenship-eligible holders and rate-eligible holders, their common units may be subject to redemption.
The sale of these units in the public or private markets could have an adverse impact on the price of the common units or on any trading market that may develop. 39 Table of Contents Affiliates of our general partner, including MPC, may compete with us, and neither our general partner nor its affiliates have any obligation to present business opportunities to us.
The sale of these units in the public or private markets could have an adverse impact on the price of the common units or on any trading market that may develop. Affiliates of our general partner, including MPC, may compete with us, and neither our general partner nor its affiliates have any obligation to present business opportunities to us.
Unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a securities 35 Table of Contents loan are urged to consult a tax adviser to discuss whether it is advisable to modify any applicable brokerage account agreements to prohibit their brokers from borrowing their common units.
Unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a securities loan are urged to consult a tax adviser to discuss whether it is advisable to modify any applicable brokerage account agreements to prohibit their brokers from borrowing their common units.
The scope and magnitude of the changes to U.S. climate change strategy under the Biden administration and future administrations, however, remain subject to the passage of legislation and interpretation and action of federal and state regulatory bodies; therefore, the impact to our industry and operations due to GHG regulation is unknown at this time.
The scope and magnitude of the changes to U.S. climate change strategy under the current and future administrations, however, remain subject to the passage of legislation and interpretation and action of federal and state regulatory bodies; therefore, the impact to our industry and operations due to GHG regulation is unknown at this time.
Although our general partner has a duty to manage us in a manner that is not adverse to the best interests of our partnership, 36 Table of Contents conflicts of interest may arise between MPC and its affiliates, including our general partner, on the one hand, and us and our unitholders, on the other hand.
Although our general partner has a duty to manage us in a manner that is not adverse to the best interests of our partnership, conflicts of interest may arise between MPC and its affiliates, including our general partner, on the one hand, and us and our unitholders, on the other hand.
If the IRS were to treat us as a corporation for 33 Table of Contents federal income tax purposes, or we become subject to a material amount of entity level taxation for state tax purposes, it would substantially reduce the amount of cash available for distribution to our unitholders.
If the IRS were to treat us as a corporation for federal income tax purposes, or we become subject to a material amount of entity level taxation for state tax purposes, it would substantially reduce the amount of cash available for distribution to our unitholders.
To the extent we issue additional units in connection with any acquisitions or expansion capital expenditures, the payment of distributions on those additional units may increase the risk that we will be unable to maintain or increase our per unit distribution 37 Table of Contents level.
To the extent we issue additional units in connection with any acquisitions or expansion capital expenditures, the payment of distributions on those additional units may increase the risk that we will be unable to maintain or increase our per unit distribution level.
Because we are a publicly traded limited partnership, the NYSE does not require us to have a majority of independent directors on our general partner’s board of directors or to establish a compensation committee or a nominating and corporate governance committee.
We list our common units on the NYSE. Because we are a publicly traded limited partnership, the NYSE does not require us to have a majority of independent directors on our general partner’s board of directors or to establish a compensation committee or a nominating and corporate governance committee.
In some cases, the producers or suppliers are responsible for gathering or delivering oil, natural gas, NGLs or refined products to our facilities or we rely on other 22 Table of Contents third parties to deliver volumes to us on behalf of the producers or suppliers.
In some cases, the producers or suppliers are responsible for gathering or delivering oil, natural gas, NGLs or refined products to our facilities or we rely on other third parties to deliver volumes to us on behalf of the producers or suppliers.
One or more of these factors has in the past and may in the future increase our cost of doing business on Native American tribal lands and impact the viability of, or prevent or delay our ability to conduct our operations on such lands.
One or more of these factors has in the past and may in the future increase our cost of doing business on Native American tribal lands and impact the viability of, or prevent or delay our 30 Table of Contents ability to conduct our operations on such lands.
Furthermore, we may have only limited oil, natural gas, NGL or refined product supplies committed to any new facility prior to its construction. We may construct facilities to capture anticipated future growth in production or satisfy anticipated market demand which does not materialize, the facilities may not operate as planned or may not be used at all.
Furthermore, we may have only limited oil, natural gas, NGL or refined product supplies committed to any new facility prior to its construction. We may construct facilities to capture anticipated future growth in production or satisfy anticipated market demand which does not materialize, the facilities may not operate as planned, or the facilities may be underutilized.
Our substantial debt and other financial obligations could impair our financial condition, results of operations and cash flow, and our ability to fulfill our debt obligations. We have significant debt obligations, which totaled $20.1 billion as of December 31, 2022, including amounts, if any, outstanding under our loan agreement with a wholly owned subsidiary of MPC.
Our substantial debt and other financial obligations could impair our financial condition, results of operations and cash flow, and our ability to fulfill our debt obligations. We have significant debt obligations, which totaled $20.7 billion as of December 31, 2023, including amounts, if any, outstanding under our loan agreement with a wholly owned subsidiary of MPC.
Further, neither our Partnership Agreement nor our bank revolving credit facility prohibits the issuance of additional preferred units, or other equity securities that may effectively rank senior to our common units as to distributions or liquidations.
Further, neither our 39 Table of Contents Partnership Agreement nor our bank revolving credit facility prohibits the issuance of additional preferred units, or other equity securities that may effectively rank senior to our common units as to distributions or liquidations.
The IRS may challenge our valuation methods, our allocation of the Section 743(b) adjustment attributable to our tangible and intangible assets, or our allocations of income, gain, loss and deduction between our general partner and certain of our unitholders.
The IRS may challenge our valuation methods, our allocation of the Section 743(b) adjustment attributable to our tangible and 35 Table of Contents intangible assets, or our allocations of income, gain, loss and deduction between our general partner and certain of our unitholders.
MPC may sell units in the public or private markets, and such sales could have an adverse impact on the trading price of the common units. As of February 16, 2023, MPC held 647,415,452 common units. Additionally, we have agreed to provide MPC with certain registration rights.
MPC may sell units in the public or private markets, and such sales could have an adverse impact on the trading price of the common units. As of February 23, 2024, MPC held 647,415,452 common units. Additionally, we have agreed to provide MPC with certain registration rights.
Our customers’ operations, including MPC’s refining operations, are subject to similar risks. 23 Table of Contents These types of incidents adversely affect our operations and may result in serious personal injury or loss of human life, significant damage to property and equipment, environmental pollution, impairment of operations and substantial losses.
These types of incidents adversely affect us. Our customers’ operations, including MPC’s refining operations, are subject to similar risks. These types of incidents adversely affect our operations and may result in serious personal injury or loss of human life, significant damage to property and equipment, environmental pollution, impairment of operations and substantial losses.
Part of the costs for new construction and major rehabilitation of locks and dams is funded by marine transportation companies through taxes and the other portion is funded by general federal tax revenues.
Part of the costs for new construction and major rehabilitation of locks and dams is funded by marine transportation 23 Table of Contents companies through taxes and the other portion is funded by general federal tax revenues.
For example, the Dakota Access Pipeline, in which we have a minority interest, has been subject to, and may in the future be subject to, litigation seeking 28 Table of Contents a permanent shutdown of the pipeline.
For example, the Dakota Access Pipeline, in which we have a minority interest, has been subject to, and may in the future be subject to, litigation seeking a permanent shutdown of the pipeline.
Furthermore, a substantial portion of the amount realized, whether or not representing gain, may be taxed as ordinary income due to potential recapture items, including depreciation recapture.
Furthermore, a substantial portion of the amount realized, whether or not representing gain, may be taxed as ordinary income due to potential recapture items, including 34 Table of Contents depreciation recapture.
In such event, our construction may be prevented or delayed, or the costs and time increased, or our operations at such facilities may be impaired or interrupted, and we may not be able to recover the costs incurred for delays or to relocate or repair our facilities from such third parties.
In such event, our construction may be prevented or delayed, or the costs and time increased, or our operations at such facilities may be impaired or interrupted, and we may not be able to recover the costs incurred for delays or to relocate or repair our facilities from such third parties. We may be negatively impacted by inflation.
Such delays or cost increases may arise as a result of unpredictable factors, many of which are beyond our control, including: • denials of, delays in receiving, or revocations of requisite regulatory approvals or permits; • unplanned increases in the cost of construction materials or labor, whether due to inflation or other factors; • disruptions in transportation of components or construction materials; • adverse weather conditions, natural disasters or other events (such as equipment malfunctions, explosions, fires or spills) affecting our facilities, or those of vendors or suppliers; • shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages; • market-related increases in a project’s debt or equity financing costs; • global supply chain disruptions; • nonperformance by, or disputes with, vendors, suppliers, contractors or subcontractors; and • delays due to citizen, state or local political or activist pressure.
Such delays or cost increases may arise as a result of unpredictable factors, many of which are beyond our control, including: • denials of, delays in receiving, or revocations of requisite regulatory approvals or permits; • unplanned increases in the cost of construction materials or labor, whether due to inflation or other factors; • disruptions in transportation of components or construction materials; • adverse weather conditions, natural disasters or other events (such as equipment malfunctions, explosions, fires or spills) affecting our facilities, or those of vendors or suppliers; • shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages; • market-related increases in a project’s debt or equity financing costs; • global supply chain disruptions; • nonperformance by, or disputes with, vendors, suppliers, contractors or subcontractors; and • delays due to citizen, state or local political or activist pressure. 29 Table of Contents Moreover, our revenues may not increase immediately upon the expenditure of funds on a particular project.
In such event, we may be required to temporarily utilize third-party facilities for such oil, natural gas, NGLs or refined products, which may increase our operating costs and reduce our cash available for distribution.
In such event, we may 22 Table of Contents be required to temporarily utilize third-party facilities to offload oil, natural gas, NGLs or refined products, which may increase our operating costs and reduce our cash available for distribution.
Reductions in exploration or production activity in our areas of operations could lead to reduced throughput on our pipelines and utilization rates of our facilities. Decreases in energy prices can decrease drilling activity, production rates and investments by third parties in the development of new oil and natural gas reserves.
Reductions or changes in exploration or production activity in our areas of operations could lead to reduced throughput on our pipelines and utilization rates of our facilities. Fluctuations in energy prices can negatively affect drilling activity, production rates and investments by third parties in the development of new oil and natural gas reserves.
Transaction Risks We have recorded goodwill and other intangible assets that could become further impaired and result in material non-cash charges to our results of operations in the future.
We have recorded goodwill and other intangible assets that could become further impaired and result in material non-cash charges to our results of operations.
These and other cybersecurity threats may originate with criminal attackers, state-sponsored actors, or employee error or malfeasance.
These and other cybersecurity threats may originate with criminal attackers, advanced persistent threats and nation-state actors, state-sponsored actors, or employee error or malfeasance.
In 2022, MPLX established a target to reduce methane emissions intensity and MPC, MPLX’s largest customer, has established a target to reduce GHG emissions. These targets reflect our current plans and aspirations and are not guarantees that we will be able to achieve them.
In 2022, MPLX established a target to reduce methane emissions intensity and MPC, MPLX’s largest customer, has established a target to reduce GHG emissions. These targets reflect our current plans and aspirations and are not guarantees that we will be able to achieve them. We assess progress with these targets on an annual basis.
Liabilities to partners on account of their partnership interest and liabilities that are non-recourse to the partnership are not counted for purposes of determining whether a distribution is permitted. The NYSE does not require a publicly traded limited partnership like us to comply with certain of its corporate governance requirements. We list our common units on the NYSE.
Liabilities to partners on account of their partnership interest and liabilities that are non-recourse to the partnership are not counted for purposes of determining whether a distribution is permitted. 40 Table of Contents The NYSE does not require a publicly traded limited partnership like us to comply with certain of its corporate governance requirements.
This cash may be used to fund distributions to our unitholders, including MPC; • our Partnership Agreement does not restrict our general partner from entering into additional contractual arrangements with it or its affiliates on our behalf; • our general partner intends to limit its liability regarding our contractual and other obligations; • our general partner may exercise its right to call and purchase all of the common units not owned by it and its affiliates if it and its affiliates own more than 85 percent of the common units; • our general partner controls the enforcement of obligations owed to us by our general partner and its affiliates, including our transportation and storage services agreements with MPC; and • our general partner decides whether to retain separate counsel, accountants or others to perform services for us.
This cash may be used to fund distributions to our unitholders, including MPC; • our Partnership Agreement does not restrict our general partner from entering into additional contractual arrangements with it or its affiliates on our behalf; • our general partner intends to limit its liability regarding our contractual and other obligations; • our general partner may exercise its right to call and purchase all of the common units not owned by it and its affiliates if it and its affiliates own more than 85 percent of the common units; • our general partner controls the enforcement of obligations owed to us by our general partner and its affiliates, including our transportation and storage services agreements with MPC; and • our general partner decides whether to retain separate counsel, accountants or others to perform services for us. 37 Table of Contents Under the terms of our Partnership Agreement, the doctrine of corporate opportunity, or any analogous doctrine, does not apply to our general partner or any of its affiliates, including its executive officers, directors and owners.
This impact may also be exacerbated due to the extent of our commodity-based contracts, which are more directly impacted by changes in natural gas and NGL prices than our fee-based contracts due to frac spread exposure and may result in operating losses when natural gas becomes more expensive on a Btu equivalent basis than NGL products.
This impact may also be exacerbated in circumstances where our compensation for services is commodity-based, which are more directly impacted by changes in natural gas and NGL prices than our fee-based contracts due to frac spread exposure and may result in operating losses when natural gas becomes more expensive on a Btu equivalent basis than NGL products.
Additionally, we have no control over MPC’s business decisions and operations, and MPC is under no obligation to adopt a business strategy that favors us. MPC owns our general partner and approximately 65 percent of our outstanding common units as of February 16, 2023.
Additionally, we have no control over MPC’s business decisions and operations, and MPC is under no obligation to adopt a business strategy that favors us. MPC owned our general partner and approximately 64 percent of our outstanding common units as of February 23, 2024.
Certain municipalities have also proposed or enacted restrictions on the installation of natural gas appliances and infrastructure in new residential or commercial construction, which could affect demand for the natural gas that we transport and store.
Certain municipalities have also proposed or enacted restrictions on the installation of natural gas appliances and infrastructure in new residential or commercial construction, which could affect demand for the natural gas that we transport and store. Certain jurisdictions are also considering ordinances that would prohibit construction or expansion of terminals.
Our revolving credit facility and our loan agreement with a wholly owned subsidiary of MPC have variable interest rates. As a result, future interest rates on our debt could be higher than current levels, causing our financing costs to increase accordingly. In addition, we may in the future refinance outstanding borrowings under our revolving credit facility with fixed-rate indebtedness.
As a result, future interest rates on our debt could be higher than current levels, causing our financing costs to increase accordingly. In addition, we may in the future refinance outstanding borrowings under our revolving credit facility with fixed-rate indebtedness.
As of February 16, 2023, our general partner and its affiliates owned approximately 65 percent of the outstanding common units (excluding common units held by officers and directors of our general partner and MPC).
As of February 23, 2024, our general partner and its affiliates owned approximately 64 percent of the outstanding common units (excluding common units held by officers and directors of our general partner and MPC).
Because we cannot match transferors and transferees of common units and to enable the uniformity of the economic and tax characteristics of common units, we have adopted depreciation and amortization positions that may not conform to all aspects of existing Treasury Regulations.
The IRS may challenge this treatment, which could adversely affect the value of the common units. Because we cannot match transferors and transferees of common units and to enable the uniformity of the economic and tax characteristics of common units, we have adopted depreciation and amortization positions that may not conform to all aspects of existing Treasury Regulations.
As of December 31, 2022, MPC had consolidated long-term indebtedness of approximately $27.1 billion, of which $7.0 billion was a direct obligation of MPC or its subsidiaries other than MPLX or its consolidated subsidiaries.
As of December 31, 2023, MPC had consolidated long-term indebtedness of approximately $27.6 billion, of which $6.9 billion was a direct obligation of MPC or its subsidiaries other than MPLX or its consolidated subsidiaries.
Some of our natural gas, NGL, crude oil and refined product pipelines are subject to FERC’s rate-making policies that could have an adverse impact on our ability to establish rates that would allow us to recover the full cost of operating our pipelines including a reasonable return. 30 Table of Contents A number of our pipelines provide interstate service that is subject to regulation by FERC.
Some of our natural gas, NGL, crude oil and refined product pipelines are subject to FERC’s rate-making policies that could have an adverse impact on our ability to establish rates that would allow us to recover the full cost of operating our pipelines, plus a reasonable return.
However, subject to the exceptions in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) discussed below, under the Tax Cuts and Jobs Act, for taxable years beginning after December 31, 2017, our deduction for “business interest” is limited to the sum of our business interest income and 30% of our “adjusted taxable income.” For the purposes of this limitation, our adjusted taxable income is computed without regard to any business interest expense or business interest income, and in the case of taxable years beginning before January 1, 2022.
However, under the Tax Cuts and Jobs Act, for taxable years beginning after December 31, 2017, our deduction for “business interest” is generally limited to the sum of our business interest income and 30 percent of our “adjusted taxable income.” For the purposes of this limitation, our adjusted taxable income is computed without regard to any business interest expense or business interest income, and in the case of taxable years beginning before January 1, 2022, our adjusted taxable income is also computed without regard to any depreciation or amortization.
If the IRS makes audit adjustments to our income tax returns for tax years beginning after 2017, it (and some states) may collect any resulting taxes (including any applicable penalties and interest) directly from us, in which case our cash available for distribution to our unitholders might be substantially reduced.
As a result, unitholders may be subject to limitation on their ability to deduct interest expense incurred by us. 36 Table of Contents If the IRS makes audit adjustments to our income tax returns for tax years beginning after 2017, it (and some states) may collect any resulting taxes (including any applicable penalties and interest) directly from us, in which case our cash available for distribution to our unitholders might be substantially reduced.
A significant portion of our operations is dependent on the continued availability of natural gas and crude oil production. The production from oil and natural gas reserves and wells owned by our producer customers will naturally decline over time, which means that our cash flows associated with these wells will also decline over time.
The production from oil and natural gas reserves and wells owned by our producer customers will naturally decline over time, which means that our cash flows associated with these wells will also decline over time.
If our “business interest” is subject to limitation under these rules, our unitholders will be limited in their ability to deduct their share of any interest expense that has been allocated to them. As a result, unitholders may be subject to limitation on their ability to deduct interest expense incurred by us.
If our “business interest” is subject to limitation under these rules, our unitholders will be limited in their ability to deduct their share of any interest expense that has been allocated to them in the current taxable year and may be limited in their ability to deduct such interest expense in a future taxable year.
Unitholders have very limited voting rights and, even if they are dissatisfied, they have limited ability to remove our general partner without its consent. Unlike the holders of common stock in a corporation, unitholders have only limited voting rights on matters affecting our business and, therefore, limited ability to influence management’s decisions regarding our business.
Unlike the holders of common stock in a corporation, unitholders have only limited voting rights on matters affecting our business and, therefore, limited ability to influence management’s decisions regarding our business.
Our operations ar e subject to business interruptions and casualty losses. Our operations are subject to business interruptions, such as unplanned maintenance, explosions, fires, pipeline releases, product quality incidents, power outages, severe weather, labor disputes, acts of terrorism or other natural or man-made disasters. These types of incidents adversely affect us.
Our operations ar e subject to business interruptions and present inherent hazards and risks, which could adversely impact our results of operations and financial conditions. Our operations are subject to business interruptions, such as unplanned maintenance, explosions, fires, pipeline releases, product quality incidents, power outages, severe weather, labor disputes, acts of terrorism or other natural or man-made disasters.
If these ratings are lowered in the future, the interest rate and fees MPC pays on its credit facilities may increase. Credit rating agencies will likely consider MPC’s debt ratings when assigning ours because of MPC’s ownership interest in us, the significant commercial relationships between MPC and us, and our reliance on MPC for a portion of our revenues.
Credit rating agencies will likely consider MPC’s debt ratings when assigning ours because of MPC’s ownership interest in us, the 33 Table of Contents significant commercial relationships between MPC and us, and our reliance on MPC for a portion of our revenues.
Tax-exempt entities should consult their tax advisor before investing in our common units. 34 Table of Contents Non-U.S. unitholders will be subject to United States taxes and withholding with respect to their income and gain from owning our units.
Furthermore, a tax-exempt entity’s gain on sale of common units may be treated, at least in part, as unrelated business taxable income. Tax-exempt entities should consult their tax advisor before investing in our common units. Non-U.S. unitholders will be subject to United States taxes and withholding with respect to their income and gain from owning our units.
Moreover, our revenues may not increase immediately upon the expenditure of funds on a particular project. For instance, if we build a new pipeline, the construction will occur over an extended period of time and we may not receive any material increases in revenues until after completion of the project, if at all.
For instance, if we build a new pipeline, the construction will occur over an extended period of time and we may not receive any material increases in revenues until after completion of the project, if at all. Any one or more of these factors could have a significant impact on our ongoing capital projects.
In addition, our purchase and resale of gas and NGLs in the ordinary course exposes us to significant risk of volatility in natural gas or NGL prices due to the potential difference in the time of the purchases and sales and the potential difference in the price associated with each transaction, and direct exposure may also occur naturally as a result of our production processes.
In addition, our purchase and resale of gas and NGLs in the ordinary course exposes us to significant risk of volatility in natural gas or NGL prices due to the potential difference in price at the time of the purchases and then the subsequent sales.
Alternatively, oil, natural gas, NGL or refined product supplies committed to facilities under construction may be delivered prior to completion of such facilities, or we may otherwise have unexpected increases in volumes that could adversely affect our ability to expand our facilities.
Alternatively, oil, natural gas, NGL or refined product supplies committed to facilities under construction may be delivered prior to completion of such facilities.
In recent years, increasing attention has been given to corporate activities related to environmental, social and governance (“ESG”) matters in public discourse and the investment community.
In recent years, increasing attention has been given to corporate activities related to ESG matters in public discourse and the investment community, including climate change, energy transition matters, and diversity, equity and inclusion.
FERC prescribes rate methodologies for developing regulated tariff rates for these natural gas, interstate oil and products pipelines. FERC’s regulated tariff may not allow us to recover all of our costs of providing services. Changes in FERC’s approved rate methodologies, or challenges to our application of an approved methodology, could also adversely affect our rates.
A number of our pipelines provide interstate service that is subject to regulation by FERC. FERC prescribes rate methodologies for developing regulated tariff rates for these natural gas, interstate oil and products pipelines. FERC’s regulated tariff may not allow us to recover all of our costs of providing services.
Additionally, shippers may protest (and FERC may investigate) the lawfulness of tariff rates. FERC can require refunds of amounts collected pursuant to rates that are ultimately found to be unlawful and prescribe new rates prospectively. Action by FERC could adversely affect our ability to establish reasonable rates that cover operating costs and allow for a reasonable return.
Changes in FERC’s approved rate methodologies, or challenges to our application of an approved methodology, could also adversely affect our rates. Additionally, shippers may protest (and FERC may investigate) the lawfulness of tariff rates. FERC can require refunds of amounts collected pursuant to rates that are ultimately found to be unlawful and prescribe new rates prospectively.
In any proceeding brought by or on behalf of any limited partner or the partnership, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption. By purchasing a common unit, a unitholder is treated as having consented to the provisions in our Partnership Agreement, including the provisions discussed above.
In any proceeding brought by or on behalf of any limited partner or the partnership, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption.
Our assets may be insufficient to repay such debt in full, and the holders of our units could experience a partial or total loss of their investment. Increases in interest rates could adversely impact our unit price, our ability to issue equity or incur debt for acquisitions or other purposes and our ability to make distributions at our intended levels.
Our assets may be insufficient to repay such debt in full, and the holders of our units could experience a partial or total loss of their investment.
Our business, financial condition, results of operations and cash flows could be materially and adversely affected by these risks, and, as a result, the trading price of our common units could decline. You should not interpret the disclosure of any risk factor to imply that the risk has not already materialized.
Our business, financial condition, results of operations and cash flows could be materially and adversely affected by these risks, and, as a result, the trading price of our common units could decline. We have in the past been adversely affected by certain of, and may in the future be affected by, these risks.
An adverse determination in any future rate proceeding brought by or against us could have a material adverse effect on our business, financial condition and results of operations. Pipelines and operations not subject to regulation by FERC may still be subject to regulation by various state agencies.
Action by FERC could adversely affect our ability to establish reasonable rates that cover operating costs and allow for a reasonable return. An adverse determination in any future rate proceeding brought by or against us could have a material adverse effect on our business, financial condition and results of operations.
As a result, distributions to non-U.S. persons will be reduced by withholding taxes at the highest applicable effective tax rate, and non-U.S. persons will be required to file U.S. federal tax returns and pay tax on their share of our taxable income. Non-U.S. persons will also potentially have tax filings and payment obligations in additional jurisdictions.
Non-U.S. unitholders will be required to file U.S. federal tax returns and pay tax on their share of our taxable income. Non-U.S. unitholders will also potentially have tax filings and payment obligations in additional jurisdictions. We treat each purchaser of common units as having the same tax benefits without regard to the actual units purchased.
To the extent the value of goodwill or intangible assets becomes further impaired, we may be required to incur additional material non-cash charges relating to such impairment.
As of December 31, 2023, our balance sheet reflected $7.6 billion and $654 million of goodwill and other intangible assets, respectively. We have in the past recorded significant impairments of our goodwill. To the extent the value of goodwill or intangible assets becomes further impaired, we may be required to incur additional material non-cash charges relating to such impairment.
Our operating results may be significantly impacted from both the impairment and the underlying trends in the business that triggered the impairment. 31 Table of Contents If we are unable to make strategic acquisitions on economically acceptable terms from MPC or third parties, our ability to implement our business strategy may be impaired.
Transaction Risks If we are unable to make strategic acquisitions on economically acceptable terms from MPC or third parties, our ability to implement our business strategy may be impaired. In addition to organic growth, a component of our business strategy can include the expansion of our operations through strategic acquisitions.
Legal and Regulatory Risks We expect to continue to incur substantial capital expenditures and operating costs to meet the requirements of evolving environmental or other laws or regulations. Future environmental laws and regulations may impact our current business plans and reduce demand for our products and services. Our business is subject to numerous environmental laws and regulations.
Our operating results may be significantly impacted from both the impairment and the underlying trends in the business that triggered the impairment. 27 Table of Contents Legal and Regulatory Risks We expect to continue to incur substantial capital expenditures and operating costs to meet the requirements of evolving environmental or other laws or regulations.
These laws and regulations continue to increase in both number and complexity and affect our business.
Future environmental laws and regulations may impact our current business plans and reduce demand for our products and services. Our business is subject to numerous environmental laws and regulations. These laws and regulations continue to increase in both number and complexity and affect our business.
Though the United States had withdrawn from the Paris Agreement, President Biden issued an executive order recommitting the United States to the Paris Agreement on January 20, 2021. President Biden also issued an Executive Order on climate change in which he announced putting the U.S. on a path to achieve net-zero carbon emissions, economy-wide, by 2050.
In the United States, an Executive Order issued January 27, 2021, announced putting the U.S. on a path to achieve net-zero carbon emissions, economy-wide, by 2050. In December 2023, EPA completed one provision of the order by promulgating a final rule to reduce methane and volatile organic compounds from oil and gas operations.
Removed
The COVID-19 pandemic has had, and may continue to have, a material and adverse effect on our and our customers’ business and on general economic, financial and business conditions. The COVID-19 pandemic and existing COVID-19 mitigation measures have had adverse effects on global travel and economic activity and, consequently, demand for the petroleum products that we transport and store.
Added
You should not interpret the disclosure of any risk factor to imply that the risk has not already materialized.
Removed
While demand for the petroleum products that we transport and store witnessed a substantial recovery in 2022, significant uncertainty remains as to the extent to which further resurgences in the virus, the emergence of new variants and waning vaccine effectiveness may spur future actions by individuals, governments and the private sector to stem the spread of the virus.
Added
Business and Operational Risks A significant decrease in oil and natural gas production in our areas of operation may adversely affect our business, financial condition, results of operation and cash available for distribution. A significant portion of our operations is dependent on the continued availability of natural gas and crude oil production.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest change(2) LOOP LLC also includes the Louisiana Offshore Oil Port, a deepwater offloading oil port in the Gulf of Mexico, as well as temporary crude oil storage. (3) BANGL LLC also owns a 30% interest in a 323 mile NGL pipeline.
Biggest change(2) The investment in W2W Holdings LLC includes our 15 percent indirect interest in a joint venture that has partial ownership of the Wink to Webster pipeline system. (3) LOOP LLC also includes the Louisiana Offshore Oil Port, a deepwater offloading oil port in the Gulf of Mexico, as well as temporary crude oil storage.
Refining Logistics Assets The following table outlines the tankage owned by us, serving MPC’s refineries as of December 31, 2022. We also own and operate rail and truck racks and docks at certain of these refineries. Each of the following assets are currently included in storage services agreements with MPC.
Refining Logistics Assets The following table outlines the tankage owned by us, serving MPC’s refineries as of December 31, 2023. We also own and operate rail and truck racks and docks at certain of these refineries. Each of the following assets are currently included in storage services agreements with MPC.
(3) The capacity, throughput and utilization of design capacity at the Hopedale fractionation complex is presented in the Marcellus Shale totals, however, the Hopedale fractionation complex is jointly owned by MarkWest Ohio Fractionation Company, L.L.C. (“Ohio Fractionation”) and MarkWest Utica EMG, L.L.C. (“MarkWest Utica EMG”). Ohio Fractionation is a joint venture between MarkWest Liberty Midstream & Resources, L.L.C.
(3) The capacity, throughput and utilization of design capacity at the Hopedale fractionation complex is presented in the Marcellus Operations totals, however, the Hopedale fractionation complex is jointly owned by MarkWest Ohio Fractionation Company, L.L.C. (“Ohio Fractionation”) and MarkWest Utica EMG, L.L.C. (“MarkWest Utica EMG”). Ohio Fractionation is a joint venture between MarkWest Liberty Midstream & Resources, L.L.C.
Our operations also include a renewable fuels rail loading hub in North Dakota with 882 mbbls of storage capacity, and more than 100 miles of water pipeline systems in North Dakota and Wyoming dedicated to gathering and handling produced water associated with well completion and production activities.
Our operations also include a renewable fuels rail loading hub in North Dakota with 180 mbbls of storage capacity, and more than 100 miles of water pipeline systems in North Dakota and Wyoming dedicated to gathering and handling produced water associated with well completion and production activities.
MPLX owns refining logistics assets with 5,809 mbbls of storage capacity associated with the facility, and has entered into terminalling and storage service agreements with the joint venture and its partners to provide services for the facility.
MPLX owns refining logistics assets with 5,977 mbbls of storage capacity associated with the facility, and has entered into terminalling and storage service agreements with the joint venture and its partners to provide services for the facility.
Imported and domestic crude oil is transported to supply hubs from a variety of regions, including: Cushing, Oklahoma; Western Canada; Wyoming; North Dakota; the Gulf Coast and Patoka, Illinois. Crude oil pipelines from the Delaware and Midland Basins, as well as from the Bakken region 41 Table of Contents transport crude oil into major regional takeaway pipelines and refining centers.
Imported and domestic crude oil is transported to supply hubs from a variety of regions, including: Cushing, Oklahoma; Western Canada; Wyoming; North Dakota; the Gulf Coast and Patoka, Illinois. Crude oil pipelines from the Delaware and Midland Basins, as well as from the Bakken region transport crude oil into major regional takeaway pipelines and refining centers.
We also have a marine repair facility (“MRF”), which is a full-service marine shipyard, located on the Ohio River, adjacent to MPC’s Catlettsburg, Kentucky refinery. The MRF is responsible for the preventive routine and unplanned maintenance of towing vessels, barges and local terminal facilities.
We also have a marine repair facility (“MRF”), which is a full-service marine shipyard, located on the Ohio River, adjacent to MPC’s Catlettsburg, Kentucky refinery. 44 Table of Contents The MRF is responsible for the preventive routine and unplanned maintenance of towing vessels, barges and local terminal facilities.
Item 2. Properties LOGISTICS AND STORAGE Crude Oil and Refined Product Pipelines The following table sets forth information regarding our crude oil and refined product pipeline systems as of December 31, 2022.
Item 2. Properties LOGISTICS AND STORAGE Crude Oil and Refined Product Pipelines The following table sets forth information regarding our crude oil and refined product pipeline systems as of December 31, 2023.
These assets each currently have associated service agreements with MPC or third parties. 43 Table of Contents GATHERING AND PROCESSING The following tables set forth certain information relating to our consolidated and operated joint venture gas processing facilities, fractionation facilities, natural gas gathering systems, NGL pipelines and natural gas pipelines as of and for the year ended December 31, 2022.
These assets each currently have associated service agreements with MPC or third parties. 45 Table of Contents GATHERING AND PROCESSING The following tables set forth certain information relating to our consolidated and operated joint venture gas processing facilities, fractionation facilities, natural gas gathering systems, NGL pipelines and natural gas pipelines as of and for the year ended December 31, 2023.
(2) This terminal is accounted for as an equity method investment. 42 Table of Contents Marine Assets The following table sets forth certain information regarding our marine assets in operation as of December 31, 2022. The marine business currently has an associated transportation service agreement with MPC.
(2) This terminal is accounted for as an equity method investment. Marine Assets The following table sets forth certain information regarding our marine assets in operation as of December 31, 2023. The marine business currently has an associated transportation service agreement with MPC.
Our refined product pipelines are integrated with MPC’s and MPLX’s expansive network of refined product terminals, which support MPC’s integrated business. Terminal Assets The following table sets forth certain information regarding our owned and operated terminals as of December 31, 2022.
Our refined product pipelines are integrated with MPC’s and MPLX’s expansive network of refined product terminals, which support MPC’s integrated business. 43 Table of Contents Terminal Assets The following table sets forth certain information regarding our owned and operated terminals as of December 31, 2023.
We believe that none of these burdens should materially detract from the value of these properties or from our interest in these properties or should materially interfere with their use in the operation of our business.
We believe that none of these burdens should materially detract from the value of these properties or from our interest in these properties or should materially interfere with their use in the operation of our business. 47 Table of Contents
As of December 31, 2022, in addition to the storage tanks at MPC’s refineries, we operated 32 tank farms, including one leased tank farm, with total available storage capacity of 33,190 mbbls.
As of December 31, 2023, in addition to the storage tanks at MPC’s refineries, we operated 32 tank farms, including one leased tank farm, with total available storage capacity of 33,452 mbbls.
Some of the property rights we have obtained are revocable at the election of the grantor. In addition, our L&S segment leases vehicles, building spaces, and pipeline equipment under long-term operating leases, most of which include renewal options.
Some of the property rights we have obtained are revocable at the election of the grantor. In addition, we lease vehicles, building spaces, and pipeline equipment under long-term operating leases, most of which include renewal options.
During the year ended December 31, 2022, the Marcellus Operations and Utica Operations utilized an average of 90 percent and 10 percent of the Hopedale fractionation complex, respectively. 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 4 fractionators.
During the year ended December 31, 2023, the Marcellus Operations and Utica Operations utilized an average of 89 percent and 11 percent of the Hopedale fractionation complex, respectively. 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 4 fractionators.
Marine Vessels Number of Boats and Barges Capacity (mbbls) Inland tank barges 296 7,820 Inland towboats 23 N/A Our fleet of boats and barges transport light products, heavy oils, crude oil, renewable fuels, chemicals and feedstocks to and from refineries and terminals owned by MPC in the Mid-Continent and Gulf Coast regions.
Marine Vessels Number of Boats and Barges Capacity (mbbls) Inland tank barges 305 8,123 Inland towboats 29 N/A Our fleet of boats and barges transport light products, heavy oils, crude oil, renewable fuels, chemicals and feedstocks to and from refineries and terminals owned by MPC in the Mid-Continent and Gulf Coast regions.
The utilization of design capacity has been calculated using the weighted average design throughput capacity. (2) Certain complexes have above-ground NGL storage with a usable capacity of 1,334 thousand barrels, large-scale truck and rail loading.
The utilization of design capacity has been calculated using the weighted average design throughput capacity. (2) Certain complexes have above-ground NGL storage with a usable capacity of 1,334 thousand barrels.
Diameter Length (miles) Ownership Percentage Crude Systems: MarEn Bakken Company LLC (1) 30" 1,916 25% Minnesota Pipe Line Company LLC 16"-24" 975 17% Wink to Webster Holdings LLC 36" 522 11% Illinois Extension Pipeline Company LLC 24" 168 35% Andeavor Logistics Rio Pipeline LLC 12" 119 67% LOCAP LLC 48" 57 59% LOOP LLC (2) 48" 48 41% Refined Products Systems: Explorer Pipeline Company 12" - 28" 1,826 25% Natural Gas and NGL Systems: Whistler Pipeline LLC 36" - 42" 498 38% BANGL LLC (3) 12" - 24" 109 25% (1) The investment in MarEn Bakken Company LLC includes our 9.19 percent indirect interest in a joint venture 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.
Diameter Length (miles) Ownership Percentage Crude Systems: MarEn Bakken Company LLC (1) 30" 1,916 25% Minnesota Pipe Line Company LLC 16" - 24" 975 17% W2W Holdings LLC (2) 24” - 36” 652 50% Illinois Extension Pipeline Company LLC 24" 168 35% Andeavor Logistics Rio Pipeline LLC 12" 119 67% LOCAP LLC 48" 57 59% LOOP LLC (3) 48" 48 41% Refined Product Systems: Explorer Pipeline Company 10" - 28" 1,872 25% Natural Gas and NGL Systems: Whistler Pipeline LLC (4) 36" - 42" 498 38% BANGL LLC (5) 12" - 24" 109 25% (1) The investment in MarEn Bakken Company LLC includes our 9.19 percent indirect interest in a joint venture that owns and operates the Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline projects (collectively referred to as the “Bakken Pipeline system”).
Other L&S Assets MPLX owns and operates various other midstream assets, including 31 barge docks with a total capacity of 4,834 mbpd and 12 storage caverns with a storage commitment of 4,209 mbbls.
Other L&S Assets MPLX owns and operates various other midstream assets, including 31 barge docks with a total capacity of 4,859 mbpd and 8 storage caverns with a storage commitment of 3,632 mbbls.
(4) We have access to 100 thousand barrels of condensate storage in this region. (5) This region includes complexes with both above-ground, pressurized NGL storage facilities, with usable capacity of 48 thousand barrels, and underground storage facilities, with usable capacity of 238 thousand barrels.
(5) This region includes complexes with both above-ground, pressurized NGL storage facilities, with usable capacity of 48 thousand barrels, and underground storage facilities, with usable capacity of 238 thousand barrels.
Diameter Length (miles) (1)(2)(3) Capacity Crude Systems 2" - 42" 5,135 Various Refined Product Systems 4" - 36" 3,732 Various (1) Includes approximately 16 miles of crude oil pipeline and approximately 2 miles of refined product pipeline leased from third parties. (2) Includes approximately 1,173 miles of inactive crude oil pipeline and 203 miles of inactive refined product pipeline.
Diameter Length (miles) Crude Systems (1) 2" - 42" 5,159 Refined Product Systems (2) 4" - 36" 3,788 (1) Includes approximately 16 miles of pipeline leased from third parties and 1,192 miles of inactive pipeline.
(3) Includes approximately 87 miles and 17 miles of refined product pipelines in which we have partial ownership of 65% and 50%, respectively. The following table sets forth information regarding the pipeline systems which we have an interest in through ownership of our equity method investments as of December 31, 2022.
(2) Includes approximately 2 miles of pipeline leased from third parties, 201 miles of inactive refined product pipeline, 87 miles in which we have partial ownership of 65 percent and 17 miles in which we have partial ownership of 50 percent. 42 Table of Contents The following table sets forth information regarding the pipeline systems which we have an interest in through ownership of our equity method investments as of December 31, 2023.
Owned and Operated Terminals (1) Number of Terminals Tank Shell Capacity (mbbls) Number of Tanks Refined Product Terminals: Alabama 2 443 16 Alaska 3 1,573 36 California 8 3,483 66 Florida 3 2,265 48 Georgia 4 982 30 Idaho 3 999 49 Illinois 2 562 15 Indiana 7 3,812 70 Kentucky 6 2,587 56 Louisiana 2 5,404 52 Michigan 8 2,440 73 Minnesota 1 13 5 New Mexico 3 471 22 North Carolina 3 1,356 27 North Dakota 1 — — Ohio 12 3,200 100 Pennsylvania 1 390 12 South Carolina 1 371 8 Tennessee 4 1,149 30 Texas 1 76 15 Utah 1 21 2 Washington 4 920 25 West Virginia 2 1,564 24 Total Refined Product Terminals 82 34,081 781 Asphalt Terminals: Arizona 3 554 58 Minnesota 1 — — Nevada (2) 1 283 19 New Mexico 1 38 9 Texas 1 197 20 Total Asphalt Terminals 7 1,072 106 Total Terminals 89 35,153 887 (1) MPLX also has partial ownership interest in one terminal with a tank shell capacity of 415 mbbls, of which MPLX is not the operator.
Owned and Operated Terminals (1) Number of Terminals Tank Shell Capacity (mbbls) Number of Tanks Refined Product Terminals: Alabama 2 443 16 Alaska 3 1,540 35 California 8 3,484 67 Florida 3 2,265 48 Georgia 4 982 30 Idaho 3 999 49 Illinois 2 562 15 Indiana 7 3,770 68 Kentucky 6 2,587 56 Louisiana 2 5,469 53 Michigan 8 2,440 73 Minnesota 1 13 5 New Mexico 2 470 21 North Carolina 3 1,343 26 North Dakota 1 — — Ohio 12 3,144 99 Pennsylvania 1 390 12 South Carolina 1 371 8 Tennessee 4 1,149 30 Texas 1 76 15 Utah 1 21 2 Washington 4 920 25 West Virginia 2 1,564 24 Total Refined Product Terminals 81 34,002 777 Asphalt Terminals: Arizona 3 556 60 Minnesota 1 — — Nevada (2) 1 283 19 New Mexico 1 38 9 Texas 1 197 20 Total Asphalt Terminals 7 1,074 108 Total Terminals 88 35,076 885 (1) MPLX also has partial ownership interest in one terminal with a tank shell capacity of 415 mbbls, of which MPLX is not the operator.
Fractionation & Condensate Stabilization Facilities Region Design Throughput Capacity (mbpd) NGL Throughput (1) (mbpd) Utilization of Design Capacity (1) Marcellus Operations (2)(3) 413 307 74 % Utica Operations (2)(3)(4) 23 14 61 % Southern Appalachia Operations (2)(5) 24 11 46 % Bakken Operations 33 21 64 % Rockies Operations 5 4 80 % Total C3+ Fractionation and Condensate Stabilization 498 357 72 % (1) NGL throughput is a weighted average for days in operation.
Fractionation Facilities Region Design Throughput Capacity (mbpd) NGL Throughput (1) (mbpd) Utilization of Design Capacity (1) Marcellus Operations (2)(3) 413 323 78 % Utica Operations (2)(3)(4) — — — % Southern Appalachia Operations (2)(5) 24 11 46 % Bakken Operations 33 20 61 % Rockies Operations 5 3 60 % Total C3+ Fractionation 475 357 75 % (1) NGL throughput is a weighted average for days in operation.
Actual throughput of 170 MMcf/d representing our share of processed volumes is also included and used to compute the utilization presented above.
Actual throughput of 159 MMcf/d representing our share of processed volumes is also included and used to compute the utilization presented above. (3) Includes volumes processed at third-party facilities in the Bakken.
Some of the leases, easements, rights-of-way, permits, licenses and franchise ordinances that were transferred to us required the consent of the then-current landowner to transfer these rights, which in some instances was a governmental entity.
Some of the leases, easements, rights-of-way, permits, licenses and franchise ordinances that were transferred to us required the consent of the then-current landowner to transfer these rights, which in some instances was a governmental entity. We believe that we have obtained sufficient third-party consents, permits and authorizations for the transfer of the assets necessary for us to operate our business.
Gas Processing Complexes Region Design Throughput Capacity (MMcf/d) Natural Gas Throughput (1) (MMcf/d) Utilization of Design Capacity (1) Marcellus Operations 6,320 5,515 87 % Utica Operations 1,325 495 37 % Southwest Operations (2) 2,545 1,637 69 % Southern Appalachia Operations 495 217 44 % Bakken Operations 185 146 79 % Rockies Operations 1,177 438 37 % Total Gas Processing 12,047 8,448 71 % (1) Natural gas throughput is a weighted average for days in operation.
Gas Processing Complexes Region Design Throughput Capacity (MMcf/d) Natural Gas Throughput (1) (MMcf/d) Utilization of Design Capacity (1) Marcellus Operations 6,320 5,773 91 % Utica Operations 1,325 564 43 % Southwest Operations (2) 2,545 1,772 70 % Southern Appalachia Operations 495 216 44 % Bakken Operations (3) 185 163 88 % Rockies Operations 1,177 483 41 % Total Gas Processing 12,047 8,971 74 % (1) Natural gas throughput is a weighted average for days in operation.
MPC Refining Logistics Assets Tank Capacity (mbbls) Galveston Bay, Texas City, Texas 18,819 Garyville, Louisiana 17,320 Los Angeles, California 14,242 Robinson, Illinois 7,006 Anacortes, Washington 5,448 Catlettsburg, Kentucky 5,098 Detroit, Michigan 4,991 El Paso, Texas 5,084 Kenai, Alaska 3,488 Mandan, North Dakota 3,180 Canton, Ohio 2,695 Salt Lake City, Utah 2,139 St.
MPC Refining Logistics Assets Tank Capacity (mbbls) Galveston Bay, Texas City, Texas 18,977 Garyville, Louisiana 16,466 Los Angeles, California 14,242 Robinson, Illinois 6,913 Anacortes, Washington 5,448 Catlettsburg, Kentucky 5,098 Detroit, Michigan 5,006 El Paso, Texas 5,084 St.
Product can be received by truck, pipeline or rail and can be transported from the facility by truck, rail or barge. 44 Table of Contents De-ethanization Facilities Region Design Throughput Capacity (mbpd) NGL Throughput (1) (mbpd) Utilization of Design Capacity (1) Marcellus Operations 309 204 72 % Utica Operations 40 5 13 % Rockies Operations 5 — — % Total De-ethanization 354 209 64 % (1) NGL throughput is a weighted average for days in operation.
De-ethanization Facilities Region Design Throughput Capacity (mbpd) NGL Throughput (1) (mbpd) Utilization of Design Capacity (1) Marcellus Operations 309 233 75 % Utica Operations 40 7 18 % Rockies Operations 5 — — % Total De-ethanization 354 240 68 % (1) NGL throughput is a weighted average for days in operation.
The utilization of design capacity has been calculated using the weighted average design throughput capacity. (2) This region does not include our operated joint venture, Rendezvous Gas Services, L.L.C.
The utilization of design capacity has been calculated using the weighted average design throughput capacity. (2) Includes 102 MMcf/d of volumes gathered for third parties by our operated joint venture Rendezvous Gas Services, L.L.C. (“RGS”). Excludes RGS gathering capacity of 1,032 MMcf/d and volumes gathered by RGS which generally interconnect with our owned Rockies region gathering systems.
Natural Gas Gathering Systems Region Design Throughput Capacity (MMcf/d) Natural Gas Throughput (1) (MMcf/d) Utilization of Design Capacity (1) Marcellus Operations 1,547 1,321 85 % Utica Operations 3,183 2,134 67 % Southwest Operations 2,980 1,629 58 % Bakken Operations 189 152 80 % Rockies Operations (2) 1,486 448 30 % Total Natural Gas Gathering 9,385 5,684 62 % (1) Natural gas throughput is a weighted average for days in operation.
The utilization of design capacity has been calculated using the weighted average design throughput capacity. 46 Table of Contents Natural Gas Gathering Systems Region Design Throughput Capacity (MMcf/d) Natural Gas Throughput (1) (MMcf/d) Utilization of Design Capacity (1) Marcellus Operations 1,622 1,389 88 % Utica Operations 3,183 2,338 73 % Southwest Operations 2,980 1,772 59 % Bakken Operations 239 165 69 % Rockies Operations (2) 1,637 593 36 % Total Natural Gas Gathering 9,661 6,257 65 % (1) Natural gas throughput is a weighted average for days in operation.
We 45 Table of Contents believe that we have obtained sufficient third-party consents, permits and authorizations for the transfer of the assets necessary for us to operate our business. We also believe we have satisfactory title or other right to our material land assets.
We also believe we have satisfactory title or other right to our material land assets.
Removed
Paul Park, Minnesota 3,983 Total 93,493 During 2022, MPC formed the Martinez Renewables joint venture and is currently in the process of converting the Martinez refinery to a renewable diesel facility.
Added
(4) Whistler Pipeline LLC also owns a 50 percent interest in a joint venture owning primarily natural gas storage facilities. (5) BANGL LLC also owns a 42 percent interest in a 323 mile NGL pipeline.
Removed
We also have access to up to an additional 800 thousand barrels of propane storage capacity that can be utilized by our assets in the Marcellus, Utica and Appalachia regions under an agreement with a third party.
Added
Paul Park, Minnesota 3,983 Kenai, Alaska 3,488 Mandan, North Dakota 3,180 Canton, Ohio 2,695 Salt Lake City, Utah 2,139 Total 92,719 MPC formed the Martinez Renewables joint venture and began producing renewable diesel at the Martinez facility in 2023.
Removed
Lastly, we have up to 180 thousand barrels of propane storage with a third party that can be utilized by our assets in the Marcellus Shale and Utica Shale.
Added
(4) We operate a condensate stabilization facility with a capacity of 23 mbpd and 77 thousand barrels of condensate storage that is owned by a joint venture in which we have a 62 percent ownership interest. Actual NGL throughput at this facility was 13 mbpd for the year ended December 31, 2023.
Removed
The utilization of design capacity has been calculated using the weighted average design throughput capacity.
Added
NGL Pipelines Region Diameter Length (miles) Marcellus Operations 4" - 20" 448 Utica Operations 4" - 20" 178 Southern Appalachia Operations 6" - 8" 140 Southwest Operations 6" - 10" 28 Bakken Operations 6" - 12" 104 Rockies Operations 4" - 10" 36 Title to Properties We believe that our properties and facilities are adequate for our operations and that our facilities are adequately maintained.
Removed
(“RGS”), which has a gathering capacity of 1,032 MMcf/d; this system supports other systems which are included in the Rockies region and that throughput is presented in the Rockies gathering throughput above. The third-party volumes gathered for RGS during the year ended December 31, 2022 were 110 MMcf/d.
Removed
NGL Pipelines Region Diameter Length (miles) Design Throughput Capacity (mbpd) Marcellus Operations 4" - 20" 442 Various Utica Operations 4" - 12" 119 Various Southern Appalachia Operations 6" - 8" 138 35 Southwest Operations (1) 6" 50 39 Bakken Operations 8" - 12" 84 80 Rockies Operations (2) 8" 10 15 (1) Includes 38 miles of inactive pipeline.
Removed
(2) Pipeline has been temporarily converted to natural gas service. The conversion back to NGL service is anticipated in the second quarter of 2023. Title to Properties We believe that our properties and facilities are adequate for our operations and that our facilities are adequately maintained.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

11 edited+4 added−4 removed7 unchanged
Biggest changeWe are negotiating a settlement of the allegations. We cannot currently estimate the amount of any civil penalty or the timing of the resolution of this matter but do not believe any civil penalty will have a material adverse effect on our consolidated results of operations, financial position or cash flows. Item 4. Mine Safety Disclosure Not applicable. Part II
Biggest changeDepartment of Justice and EPA confirmed they will be pursuing federal enforcement for alleged Clean Water Act violations arising from this incident as well as three pipeline incidents in Illinois and Indiana in 2018, 2020, and 2021. 48 Table of Contents We cannot currently estimate the amount of any civil penalty or the timing of the resolution of this matter but do not believe any civil penalty will have a material impact on our consolidated results of operations, financial position or cash flows.
Edwardsville Incident In March 2022, the State of Illinois brought an action in Madison County Circuit Court in Illinois against Marathon Pipe Line LLC, an indirect wholly owned subsidiary of MPLX LP, asserting various violations and demanding a permanent injunction and civil penalties in connection with a March 2022 release of crude oil on the Wood River to Patoka 22" line near Edwardsville, Illinois.
Edwardsville Incident In March 2022, the State of Illinois brought an action in Madison County Circuit Court in Illinois against Marathon Pipe Line LLC (“MPL”), an indirect wholly owned subsidiary of MPLX LP, asserting various violations and demanding a permanent injunction and civil penalties in connection with a release of crude oil on the Wood River to Patoka 22" line near Edwardsville, Illinois.
In April 2021, THPP filed a lawsuit in the District of North Dakota against the United States of America, the U.S. Department of the Interior and the BIA (together, the “U.S. Government Parties”) challenging the March 2021 order purporting to vacate all previous orders related to THPP’s alleged trespass. On February 8, 2022, the U.S.
In April 2021, THPP filed a lawsuit in the District of North Dakota against the United States of America, the U.S. Department of the Interior and the BIA (collectively, the “U.S. Government Parties”) challenging the March 2021 order purporting to vacate all previous orders related to THPP’s alleged trespass. On February 8, 2022, the U.S.
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 one percent redemption premium required pursuant to the indenture governing the notes) and any accrued and unpaid interest.
If the vacation of the easement 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 one percent redemption premium required pursuant to the indenture governing the notes) and any accrued and unpaid interest.
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.
MPLX also expects to contribute its 9.19 percent pro rata share of any costs to remediate any deficiencies to reinstate the easement and/or return the pipeline into operation.
As of December 31, 2022, our maximum potential undiscounted payments under the Contingent Equity Contribution Agreement were approximately $170 million.
As of December 31, 2023, our maximum potential undiscounted payments under the Contingent Equity Contribution Agreement were approximately $170 million.
In March 2021, the BIA issued an order purporting to vacate the BIA's prior orders related to THPP’s alleged trespass and direct the Regional Director of the BIA to reconsider the issue of 46 Table of Contents THPP’s alleged trespass and issue a new order.
In March 2021, the BIA issued an order purporting to vacate the BIA's prior orders related to THPP’s alleged trespass and direct the Regional Director of the BIA to reconsider the issue of THPP’s alleged trespass and issue a new order.
If the pipeline were temporarily shut down, 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.
If the vacation of the easement results in a temporary shutdown of the pipeline, 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.
In 2020, the D.D.C. ordered the Army Corps, which granted permits and an easement for the Bakken Pipeline system, to prepare an environmental impact statement (“EIS”) relating to an easement under Lake Oahe in North Dakota. The D.D.C. later vacated the easement. The Army Corps expects to release a draft EIS in 2023.
In 2020, the D.D.C. ordered the United States Army Corps of Engineers (“Army Corps”), which granted permits and an easement for the Bakken Pipeline system, to prepare an environmental impact statement (“EIS”) relating to an easement under Lake Oahe in North Dakota. The D.D.C. later vacated the easement.
We use a threshold of $1 million for this purpose. Dakota Access Pipeline We hold a 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 use a threshold of $1 million for this purpose. Dakota Access Pipeline We hold a 9.19 percent indirect interest in a joint venture (“Dakota Access”), which owns and operates the Bakken Pipeline system.
Government Parties filed their answer and counterclaims to THPP’s suit claiming THPP is in continued trespass with respect to the pipeline and seek disgorgement of pipeline profits from June 1, 2013 to present, removal of the pipeline and remediation. We intend to vigorously defend ourselves against these counterclaims.
Government Parties filed their answer and counterclaims to THPP’s suit claiming THPP is in continued trespass with respect to the pipeline and seek disgorgement of pipeline profits from June 1, 2013 to present, removal of the pipeline and remediation. On November 8, 2023, the Court granted THPP’s motion to sever and stay the U.S. Government Parties’ counterclaims.
Removed
In May 2021, the D.D.C. denied a renewed request for an injunction to shut down the pipeline while the EIS is being prepared. In June 2021, the D.D.C. issued an order dismissing without prejudice the tribes’ claims against the Dakota Access Pipeline. The litigation could be reopened or new litigation challenging the EIS, once completed, could be filed.
Added
The Army Corps issued a draft EIS in September 2023 detailing various options for the easement, including denying the easement, approving the easement with additional measures, rerouting the easement, or approving the easement with no changes.
Removed
Gathering and Processing We have been negotiating with the EPA with respect to multiple alleged violations of the National Emission Standards for Hazardous Air Pollutants by the Chapita, Coyote Wash, Island, River Bend and Wonsits Valley Compressor Stations in Utah as well as the Robinson Lake Gas Plant in North Dakota.
Added
The Army Corps has not selected a preferred alternative, but will make a decision in its final review, after considering input from the public and other agencies. The pipeline remains operational while the Army Corps finalizes its decision which is expected to be issued by the end of 2024.
Removed
We are in the process of finalizing a settlement with the EPA pursuant to which we expect to pay a cash penalty of $2 million, incorporate additional remedial measures, mitigate excess emissions associated with events and enter into a consent decree covering MPLX gas plants and compressor stations located in Utah, North Dakota and Wyoming.
Added
The case will proceed on the merits of THPP’s challenge to the March 2021 order purporting to vacate all previous orders related to THPP’s alleged trespass. THPP continues not to operate the portion of the pipeline that crosses the property at issue.
Removed
We expect to finalize the settlement later in 2023.
Added
Item 4. Mine Safety Disclosure Not applicable. Part II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 47 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 47 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 48 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 70 Item 8. Financial Statements and Supplementary Data 72
Biggest changeItem 4. Mine Safety Disclosures 49 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 49 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 50 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 71 Item 8. Financial Statements and Supplementary Data 73

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+1 added−3 removed0 unchanged
Biggest changeMillions of Dollars Period Total Number of Units Purchased Average Price Paid per Unit (1) Total Number of Units Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Units that May Yet Be Purchased Under the Plans or Programs (2) 10/1/2022-10/31/2022 3,132,123 $ 31.95 3,132,123 $ 906 11/1/2022-11/30/2022 — — — 906 12/1/2022-12/31/2022 1,863,133 31.88 1,863,133 $ 846 Total 4,995,256 $ 31.92 4,995,256 (1) Amounts in this column reflect the weighted average price paid for units purchased under our unit repurchase authorization.
Biggest changeMillions of Dollars Period Total Number of Units Purchased Average Price Paid per Unit Total Number of Units Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Units that May Yet Be Purchased Under the Plans or Programs (1) 10/1/2023-10/31/2023 — $ — — $ 846 11/1/2023-11/30/2023 — — — 846 12/1/2023-12/31/2023 — — — $ 846 Total — $ — — (1) On August 2, 2022, we announced the board authorization for the repurchase of up to $1 billion of MPLX common units held by the public.
Issuer Purchases of Equity Securities The following table sets forth a summary of our purchases during the quarter ended December 31, 2022, of equity securities that are registered by MPLX pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.
Issuer Purchases of Equity Securities The following table sets forth a summary of our purchases during the quarter ended December 31, 2023, of equity securities that are registered by MPLX pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common units are listed on the NYSE and traded under the symbol “MPLX.” As of February 16, 2023, there w ere 240 register ed holders of 353,628,479 outstanding common units held by the public.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common units are listed on the NYSE and traded under the symbol “MPLX.” As of February 23, 2024, there w ere approximately 229 register ed holders of our outstanding common units.
Removed
In addition, as of February 16, 2023, MPC and its affiliates owned 647,415,452 of our common units, constituting approximately 65 percent of the outstanding common units. In addition, MPC owns our general partner.
Added
This unit repurchase authorization has no expiration date. 49 Table of Contents
Removed
The weighted average price includes commissions paid to brokers during the quarter. (2) On November 2, 2020, we announced the board authorization of a unit repurchase program for the repurchase of up to $1 billion of MPLX’s common units held by the public, which was exhausted during the fourth quarter of 2022.
Removed
On August 2, 2022, we announced the board authorization for the repurchase of up to an additional $1 billion of MPLX common units held by the public. This unit repurchase authorization has no expiration date. 47 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

110 edited+37 added−45 removed91 unchanged
Biggest change(In millions) 2022 2021 $ Change 2020 $ Change Service revenue $ 2,056 $ 2,023 $ 33 $ 2,088 $ (65) Rental income 287 347 (60) 365 (18) Product related revenue 2,792 2,066 726 868 1,198 Sales-type lease revenue 62 — 62 — — Income/(loss) from equity method investments (1) 209 168 41 (1,090) 1,258 Other income (2) 539 70 469 53 17 Total segment revenues and other income 5,945 4,674 1,271 2,284 2,390 Cost of revenues 901 799 102 839 (40) Purchased product costs 2,063 1,585 478 539 1,046 Purchases - related parties 371 306 65 292 14 Depreciation and amortization 715 741 (26) 744 (3) Impairment expense — 42 (42) 2,165 (2,123) General and administrative expenses 153 173 (20) 175 (2) Restructuring expenses — — — 8 (8) Other taxes 47 48 (1) 54 (6) Segment income/(loss) from operations 1,695 980 715 (2,532) 3,512 Depreciation and amortization 715 741 (26) 744 (3) (Income)/loss from equity method investments (1) (209) (168) (41) 1,090 (1,258) Distributions/adjustments related to equity method investments 323 275 48 278 (3) Gain on sales-type leases (509) — (509) $ — — Impairment expense — 42 (42) 2,165 (2,123) Restructuring expenses — — — 8 (8) Adjusted EBITDA attributable to noncontrolling interests (38) (39) 1 (37) (2) Other (3) (20) 48 (68) 7 41 Segment Adjusted EBITDA $ 1,957 $ 1,879 $ 78 $ 1,723 $ 156 Capital expenditures $ 528 $ 224 $ 304 $ 441 $ (217) Investments in unconsolidated affiliates $ 120 $ 118 $ 2 $ 125 $ (7) (1) Includes impairment expense related to various equity method investments of $6 million and $1,264 million for the years ended December 31, 2021 and 2020, respectively.
Biggest change(In millions) 2023 2022 $ Change 2021 $ Change Service revenue $ 2,189 $ 2,056 $ 133 $ 2,023 $ 33 Rental income 208 287 (79) 347 (60) Product related revenue 2,191 2,792 (601) 2,066 726 Sales-type lease revenue 136 62 74 — 62 Income from equity method investments 255 209 46 168 41 Other income (1) 179 539 (360) 70 469 Total segment revenues and other income 5,158 5,945 (787) 4,674 1,271 Cost of revenues 892 901 (9) 799 102 Purchased product costs 1,598 2,063 (465) 1,585 478 Purchases - related parties 469 371 98 306 65 Depreciation and amortization 683 715 (32) 741 (26) Impairment expense — — — 42 (42) General and administrative expenses 162 153 9 173 (20) Other taxes 41 47 (6) 48 (1) Total costs and expenses 3,845 4,250 (405) 3,694 556 Segment Adjusted EBITDA 2,041 1,957 84 1,879 78 Capital expenditures 605 528 77 224 304 Investments in unconsolidated affiliates $ 72 $ 120 $ (48) $ 118 $ 2 (1) The year ended December 31, 2022 includes a $509 million gain on a lease reclassification.
The MPC Loan Agreement is scheduled to expire, and borrowings under the MPC Loan Agreement are scheduled to mature and become due and payable on July 31, 2024, provided that MPC 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 the maturity date.
The MPC Loan Agreement is scheduled to expire, and borrowings under the loan agreement are scheduled to mature and become due and payable on July 31, 2024, provided that MPC 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 the maturity date.
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.
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 crude oil and natural gas pricing considerations), many of which are difficult to forecast.
We perform a variety of services for MPC related to the transportation of crude and refined products, including renewable diesel, via pipeline, truck or marine as well as terminal services, storage services and fuels distribution and marketing services, among others. The services that we provide may be based on regulated tariff rates or on contracted rates.
We perform a variety of services for MPC related to the transportation of crude and refined products, including renewable diesel, via pipeline or marine, as well as terminal services, storage services and fuels distribution and marketing services, among others. The services that we provide may be based on regulated tariff rates or on contracted rates.
(4) Growth capital reimbursements are included in changes in deferred revenue within the operating activities section of the Consolidated Statements of Cash Flows. Maintenance capital reimbursements are included in the Contributions from MPC line within financing activities section of the Consolidated Statements of Cash Flows.
(4) Growth capital reimbursements are generally included in changes in deferred revenue within the operating activities section of the Consolidated Statements of Cash Flows. Maintenance capital reimbursements are included in the Contributions from MPC line within financing activities section of the Consolidated Statements of Cash Flows.
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 years ended December 31, 2022, 2021 and 2020.
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 years ended December 31, 2023, 2022 and 2021.
Discussion and analysis of 2020 and year-to-year comparisons between 2021 and 2020 not included in this Annual Report on Form 10-K can be found in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2021.
Discussion and analysis of 2021 and year-to-year comparisons between 2022 and 2021 not included in this Annual Report on Form 10-K can be found in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2022.
For the annual impairment assessment as of November 30, 2022, management performed only a qualitative assessment for two reporting units as we determined it was more likely than not that the fair values of the reporting units exceeded their carrying values.
For the annual impairment assessment as of November 30, 2023, management performed only a qualitative assessment for two reporting units as we determined it was more likely than not that the fair values of the reporting units exceeded their carrying values.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This section of the Annual Report on Form 10-K does not address certain items regarding the year ended December 31, 2020.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This section of the Annual Report on Form 10-K does not address certain items regarding the year ended December 31, 2021.
Significant uses of fair value measurements include: • assessment of impairment of long-lived assets, intangible assets, goodwill and equity method investments; • assessment of values for assets in implicit leases, including sales-type leases; • assessment of values for underlying assets to record net investment in sales-type leases; 67 Table of Contents • recorded values for assets acquired and liabilities assumed in connection with acquisitions; and • recorded values of derivative instruments.
Significant uses of fair value measurements include: • assessment of impairment of long-lived assets, intangible assets, goodwill and equity method investments; • assessment of values for assets in implicit leases, including sales-type leases; • assessment of values for underlying assets to record net investment in sales-type leases; • recorded values for assets acquired and liabilities assumed in connection with acquisitions; and • recorded values of derivative instruments.
The table below provides a reconciliation of Adjusted FCF and Adjusted FCF after distributions from net cash provided by operating activities for the years ended December 31, 2022, 2021 and 2020.
The table below provides a reconciliation of Adjusted FCF and Adjusted FCF after distributions from net cash provided by operating activities for the years ended December 31, 2023, 2022 and 2021.
Transportation revenues include tariff and other fees, which may vary by region and nature of services provided. (2) Represents total at end of period. 55 Table of Contents G&P Segment G&P Segment Financial Highlights (in millions) Revenue and other income (1)(2) Segment Adjusted EBITDA (1) 2022 includes non-cash gain on a lease reclassification of $509 million. See Item 8.
Transportation revenues include tariff and other fees, which may vary by region and nature of services provided. (2) Represents total at end of period. 57 Table of Contents G&P Segment G&P Segment Financial Highlights (in millions) Revenue and other income (1) Segment Adjusted EBITDA (1) 2022 includes gain on a lease reclassification of $509 million. See Item 8.
At December 31, 2022, MPLX had three reporting units with goodwill totaling approximately $7.6 billion, which includes goodwill associated with our Crude Gathering reporting unit of $1.1 billion.
At December 31, 2023, MPLX had three reporting units with goodwill totaling approximately $7.6 billion, which includes goodwill associated with our Crude Gathering reporting unit of $1.1 billion.
CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the respective reporting periods.
CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated 67 Table of Contents financial statements and the reported amounts of revenues and expenses during the respective reporting periods.
Refer to the Liquidity and Capital Resources section for further information. 53 Table of Contents SEGMENT REPORTING We classify our business in the following reportable segments: L&S and G&P. We evaluate the performance of our segments using Segment Adjusted EBITDA. Segment Adjusted EBITDA represents Adjusted EBITDA attributable to the reportable segments.
Refer to the Liquidity and Capital Resources section for further information. SEGMENT REPORTING We classify our business in the following reportable segments: L&S and G&P. We evaluate the performance of our segments using Segment Adjusted EBITDA. Segment Adjusted EBITDA represents Adjusted EBITDA attributable to the reportable segments.
We may also, from 61 Table of Contents time to time repurchase our senior notes and preferred units in the open market, in tender offers, in privately-negotiated transactions or otherwise in such volumes, at such prices and upon such other terms as we deem appropriate and execute unit repurchases under our unit repurchase program.
We may also, from time to time repurchase our senior notes and preferred units in the open market, in tender offers, in privately-negotiated transactions or otherwise in such volumes, at such prices and upon such other terms as we deem appropriate and execute unit repurchases under our unit repurchase program.
Similarly, liabilities for environmental remediation may vary from 69 Table of Contents estimates because of changes in laws, regulations and their interpretation, additional information on the extent and nature of site contamination and improvements in technology.
Similarly, liabilities for environmental remediation may vary from estimates because of changes in laws, regulations and their interpretation, additional information on the extent and nature of site contamination and improvements in technology.
We continuously evaluate our capital plan and make changes as conditions warrant. 64 Table of Contents Cash Commitments Our material cash requirements include the following contractual obligations and other cash commitments as of December 31, 2022. Our contractual obligations primarily consist of outstanding borrowings on debt, commitment and administrative fees and interest.
We continuously evaluate our capital plan and make changes as conditions warrant. 65 Table of Contents Cash Commitments Our material cash requirements include the following contractual obligations and other cash commitments as of December 31, 2023. Our contractual obligations primarily consist of outstanding borrowings on debt, commitment and administrative fees and interest.
The following information concerning our business, results of operations and financial condition should also be read in conjunction with the information included under Item 1. Business and Item 8. Financial Statements and Supplementary Data.
The following information concerning our business, results of operations and financial condition should also be read in conjunction with the information included under Item 1. Business, Item 1A. Risk Factors and Item 8. Financial Statements and Supplementary Data.
The following table summarizes activity executed on the unit repurchase program during the years ended December 31, 2022, 2021 and 2020: (In millions, except per unit data) 2022 2021 2020 Units repurchased 15 23 1 Cash paid for common units repurchased (1) $ 491 $ 630 $ 33 Average cost per unit (1) $ 31.96 $ 27.52 $ 22.29 (1) Cash paid for common units repurchased and average cost per unit includes commissions paid to brokers during the period.
The following table summarizes activity executed on the unit repurchase program during the years ended December 31, 2023, 2022 and 2021: (In millions, except per unit data) 2023 2022 2021 Units repurchased — 15 23 Cash paid for common units repurchased (1) $ — $ 491 $ 630 Average cost per unit (1) $ — $ 31.96 $ 27.52 (1) Cash paid for common units repurchased and average cost per unit includes commissions paid to brokers during the period.
Distributions paid to Series A preferred unitholders during the years ended December 31, 2022, 2021 and 2020 were $85 million, $100 million and $81 million, respectively. The distribution for the year ended December 31, 2021 includes a Supplemental Distribution Amount of $18 million, or $0.5750 per unit.
Distributions paid to Series A preferred unitholders during the years ended December 31, 2023, 2022 and 2021 were $94 million, $85 million and $100 million, respectively. The distribution for the year ended December 31, 2021 includes a Supplemental Distribution Amount of $18 million, or $0.5750 per unit.
Transportation and terminalling agreements that obligate us to minimum volume, throughput or payment commitments over the remaining terms of the agreements, have terms that range from less than one year to nine years. We expect to pass any minimum payment commitments through to producer customers.
Transportation, terminalling, and gathering and processing agreements that obligate us to minimum volume, throughput or payment commitments over the remaining terms of the agreements, have terms that range from less than one year to eight years. We expect to pass any minimum payment commitments through to producer customers.
The processing and fractionated volumes calculated for the number of days MPLX owned these assets during 2021 were 96 MMcf/d and 17 mbpd, respectively. 2022 2021 2020 Pricing Information Natural Gas NYMEX HH ($/MMBtu) $ 6.52 $ 3.72 $ 2.13 C2 + NGL Pricing/gallon (1) $ 1.03 $ 0.87 $ 0.43 (1) 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. 58 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Cash Flows Our cash, cash equivalents were $238 million and $13 million at December 31, 2022 and December 31, 2021, respectively.
The processing and fractionated volumes calculated for the number of days MPLX owned these assets during 2021 were 96 MMcf/d and 17 mbpd, respectively. 2023 2022 2021 Pricing Information Natural Gas NYMEX HH ($/MMBtu) $ 2.66 $ 6.52 $ 3.72 C2 + NGL Pricing/gallon (1) $ 0.69 $ 1.03 $ 0.87 (1) 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. 60 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Cash Flows Our cash and cash equivalents were $1,048 million and $238 million at December 31, 2023 and December 31, 2022, respectively.
We define Adjusted EBITDA as net income adjusted for: (i) provision for income taxes; (ii) interest and other financial costs; (iii) depreciation and amortization; (iv) income/(loss) from equity method investments; (v) distributions and adjustments related to equity method investments; (vi) gain on sales-type leases; (vii) impairment expense; (viii) restructuring expenses (ix) noncontrolling interests; and (x) other adjustments as deemed necessary.
We define Adjusted EBITDA as net income adjusted for: (i) provision for income taxes; (ii) interest and other financial costs; (iii) depreciation and amortization; (iv) income/(loss) from equity method investments; (v) distributions and adjustments related to equity method investments; (vi) gain on sales-type leases and equity method investments; (vii) impairment expense; (viii) noncontrolling interests; and (ix) other adjustments, as applicable.
The new MPLX Credit Agreement matures in July 2027 and, among other things, provides for a $2 billion unsecured revolving credit facility and letter of credit issuing capacity under the facility of up to $150 million. Letter of credit issuing capacity is included in, not in addition to, the $2 billion borrowing capacity.
Credit Agreement MPLX’s credit agreement (the “MPLX Credit Agreement”) matures in July 2027 and, among other things, provides for a $2 billion unsecured revolving credit facility and letter of credit issuing capacity under the facility of up to $150 million. Letter of credit issuing capacity is included in, not in addition to, the $2 billion borrowing capacity.
We also use DCF, which we define as Adjusted EBITDA adjusted for: (i) deferred revenue impacts; (ii) sales-type lease payments, net of income; (iii) net interest and other financial costs; (iv) net maintenance capital expenditures; (v) equity method investment capital expenditures paid out; (vi) restructuring expenses; and (vii) other adjustments as deemed necessary.
We define DCF as Adjusted EBITDA adjusted for: (i) deferred revenue impacts; (ii) sales-type lease payments, net of income; (iii) net interest and other financial costs; (iv) net maintenance capital expenditures; (v) equity method investment capital expenditures paid out; and (vi) other adjustments as deemed necessary.
The GAAP measures most directly comparable to Adjusted EBITDA and DCF are net income and net cash provided by operating activities while the GAAP measure 49 Table of Contents most directly comparable to Adjusted FCF and Adjusted FCF after distributions is net cash provided by operating activities.
The GAAP measures most directly comparable to Adjusted EBITDA and DCF are net income and net cash provided by operating activities while the GAAP measure most directly comparable to Adjusted FCF and Adjusted FCF after distributions is net cash provided by operating activities.
As of December 31, 2022, we were in compliance with this financial covenant with a ratio of Consolidated Total Debt to Consolidated EBITDA of 3.5 to 1.0, as well as all other covenants contained in the MPLX Credit Agreement. 60 Table of Contents MPC Loan Agreement MPLX is party to a loan agreement with MPC (the “MPC Loan Agreement”).
As of December 31, 2023, we were in compliance with this financial covenant with a ratio of Consolidated Total Debt to Consolidated EBITDA of 3.3 to 1.0, as well as all other covenants contained in the MPLX Credit Agreement. MPC Loan Agreement MPLX is party to a loan agreement with MPC (the “MPC Loan Agreement”).
We incurred $1,723 million of costs under various agreements with MPC, including the omnibus, co-location and employee agreements for 2022. Effects of Inflation Inflation did not have a material impact on our results of operations for the years ended December 31, 2022, 2021 or 2020.
We incurred $1.8 billion of costs under various agreements with MPC, including the omnibus, co-location and employee agreements for 2023. Effects of Inflation Inflation did not have a material impact on our results of operations for the years ended December 31, 2023, 2022 or 2021.
The significant assumptions that were used to develop the estimate of the fair value under the discounted cash flow method included management’s best estimates of the discount rate as well as estimates of future cash flows, which are impacted primarily by producer customers’ development plans, which impact future volumes and capital requirements.
The significant assumptions that were used to develop the estimate of the fair value included management’s best estimates of the discount rate as well as estimates of future cash flows, which are impacted primarily by producer customers’ development plans, which impact the reporting unit’s future volumes and capital requirements.
One of the omnibus agreements with MPC addresses our payment of a fixed annual fee to MPC for the provision of executive management services by certain executive officers of our general partner and our reimbursement to MPC for the provision of certain general and administrative services to us.
In addition, we have omnibus agreements and employee agreements with MPC. One of the omnibus agreements with MPC addresses our payment of a fixed annual fee to MPC for the provision of executive management services by certain executive officers of our general partner and our reimbursement to MPC for the provision of certain general and administrative services to us.
These reassessments may impact the comparability of our financial results. 50 Table of Contents RESULTS OF OPERATIONS The following table and discussion summarizes our results of operations for the years ended 2022, 2021 and 2020, 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.
These reassessments may impact the comparability of our financial results. 52 Table of Contents RESULTS OF OPERATIONS The following tables and discussion summarize our results of operations for the years ended 2023, 2022 and 2021, 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.
In addition, MPC performs 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 and Item 8. Financial Statements and Supplementary Data – Note 6.
In addition, MPC performs 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 and Item 8.
However, any downgrades in the credit ratings of our senior unsecured debt ratings could, among other things, increase the applicable interest rates and other fees payable under the MPLX Credit Agreement, which may limit our flexibility to obtain future financing.
However, any downgrades in the credit ratings of our senior unsecured debt ratings could, among other things, increase the applicable interest rates and other fees payable under the MPLX Credit Agreement, and limit our flexibility to obtain future financing, including refinancing existing indebtedness.
(2) The year ended December 31, 2022 includes a $509 million non-cash gain on a lease reclassification. See Item 8. Financial Statements and Supplementary Data - Note 20 for additional information. (3) Non-GAAP measure.
(1) The year ended December 31, 2022 includes a gain on a lease reclassification of $509 million. See Item 8. Financial Statements and Supplementary Data - Note 20 in the Consolidated Financial Statements for additional information. (2) Non-GAAP measure.
At December 31, 2022, we had $4.1 billion 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.
At December 31, 2023, we had $3.7 billion of equity method investments recorded on the Consolidated Balance Sheets. 69 Table of Contents 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.
Our liquidity totaled $3.7 billion at December 31, 2022, consisting of: December 31, 2022 (In millions) Total Capacity Outstanding Borrowings Available Capacity MPLX Credit Agreement $ 2,000 $ — $ 2,000 MPC Loan Agreement 1,500 — 1,500 Total $ 3,500 $ — 3,500 Cash and cash equivalents 238 Total liquidity $ 3,738 We expect our ongoing sources of liquidity to include cash generated from operations, borrowings under our revolving credit facilities and access to capital markets.
Our liquidity totaled $4.5 billion at December 31, 2023, consisting of: December 31, 2023 (In millions) Total Capacity Outstanding Borrowings Available Capacity MPLX Credit Agreement $ 2,000 $ — $ 2,000 MPC Loan Agreement 1,500 — 1,500 Total $ 3,500 $ — 3,500 Cash and cash equivalents 1,048 Total liquidity $ 4,548 We expect our ongoing sources of liquidity to include cash generated from operations, borrowings under our revolving credit facilities and access to capital markets.
Our environmental expenditures for each of the past three years were: (In millions, except %) 2022 2021 2020 Capital $ 15 $ 15 $ 26 Percent of total capital expenditures 2 % 3 % 3 % Compliance: (1) Operating and maintenance $ 15 $ 28 $ 24 Remediation (2) 33 17 4 Total $ 48 $ 45 $ 28 (1) Based on the American Petroleum Institute’s definition of environmental expenditures.
Our environmental expenditures for each of the past three years were: (In millions, except %) 2023 2022 2021 Capital $ 29 $ 15 $ 15 Percent of total capital expenditures 3 % 2 % 3 % Compliance: (1) Operating and maintenance $ 10 $ 15 $ 28 Remediation (2) 19 33 17 Total $ 29 $ 48 $ 45 (1) Based on the American Petroleum Institute’s definition of environmental expenditures.
(4) Purity ethane makes up approximately 204 mbpd, 192 mbpd and 188 mbpd of MPLX LP consolidated total fractionated products for the years ended December 31, 2022, 2021 and 2020, respectively. Purity ethane makes up approximately 209 mbpd, 197 mbpd and 194 mbpd of MPLX operated total fractionated products for the years ended December 31, 2022, 2021 and 2020, respectively.
(4) Purity ethane makes up approximately 233 mbpd, 204 mbpd and 192 mbpd of MPLX LP consolidated total fractionated products for the years ended December 31, 2023, 2022 and 2021, respectively. Purity ethane makes up approximately 240 mbpd, 209 mbpd and 197 mbpd of MPLX operated total fractionated products for the years ended December 31, 2023, 2022 and 2021, respectively.
Of our total costs and expenses, excluding impairment expense, MPC accounted for 25 percent, 26 percent and 30 percent for the years ended December 31, 2022, 2021 and 2020, respectively. ENVIRONMENTAL MATTERS AND COMPLIANCE COSTS We are subject to extensive federal, state and local environmental laws and regulations.
Of our total costs and expenses, MPC accounted for 27 percent, 25 percent and 26 percent for the years ended December 31, 2023, 2022 and 2021, respectively. ENVIRONMENTAL MATTERS AND COMPLIANCE COSTS We are subject to extensive federal, state and local environmental laws and regulations.
(In millions, except per unit data) 2022 2021 2020 Distribution declared: Limited partner common units - public $ 1,063 $ 1,257 $ 1,079 Limited partner common units - MPC 1,917 2,175 1,793 Total distributions declared to limited partner common units (1) 2,980 3,432 2,872 Series A preferred units (1) 88 100 81 Series B preferred units 41 41 41 Total distribution declared $ 3,109 $ 3,573 $ 2,994 Cash distributions declared per limited partner common unit: Quarter ended March 31, $ 0.7050 $ 0.6875 $ 0.6875 Quarter ended June 30, 0.7050 0.6875 0.6875 Quarter ended September 30, (1) 0.7750 1.2800 0.6875 Quarter ended December 31, 0.7750 0.7050 0.6875 Year ended December 31, $ 2.9600 $ 3.3600 $ 2.7500 (1) Includes the Supplemental Distribution Amount of $0.5750 per unit and base distribution amount of $0.7050 per unit for the third quarter ended September 30, 2021. 63 Table of Contents Capital Expenditures Our operations are capital intensive, requiring investments to expand, upgrade, enhance or maintain existing operations and to meet environmental and operational regulations.
(In millions, except per unit data) 2023 2022 2021 Distribution declared: Limited partner common units - public $ 1,152 $ 1,063 $ 1,257 Limited partner common units - MPC 2,104 1,917 2,175 Total distributions declared to limited partner common units (1) 3,256 2,980 3,432 Series A preferred units (1) 94 88 100 Series B preferred units 5 41 41 Total distribution declared $ 3,355 $ 3,109 $ 3,573 Cash distributions declared per limited partner common unit: Quarter ended March 31, $ 0.7750 $ 0.7050 $ 0.6875 Quarter ended June 30, 0.7750 0.7050 0.6875 Quarter ended September 30, (1) 0.8500 0.7750 1.2800 Quarter ended December 31, 0.8500 0.7750 0.7050 Year ended December 31, $ 3.2500 $ 2.9600 $ 3.3600 (1) Includes the Supplemental Distribution Amount of $0.5750 per unit and base distribution amount of $0.7050 per unit for the third quarter ended September 30, 2021. 64 Table of Contents Capital Expenditures Our operations are capital intensive, requiring investments to expand, upgrade, enhance or maintain existing operations and to meet environmental and operational regulations.
For 2023, we announced a capital outlook of $950 million, net of reimbursements, which includes growth capital of $800 million and maintenance capital of $150 million. Our growth capital plans are anchored in the Marcellus, Permian, and Bakken basins.
For 2024, we announced a capital outlook of $1.1 billion, net of reimbursements, which includes growth capital of $950 million and maintenance capital of $150 million. Our growth capital plans are anchored in the Marcellus and Permian basins.
Amounts included in income from operations and excluded from Segment Adjusted EBITDA include: (i) depreciation and amortization; (ii) income/(loss) from equity method investments; (iii) distributions and adjustments related to equity method investments; (iv) gain on sales-type leases; (v) impairment expense; (vi) restructuring expenses (vii) noncontrolling interests; and (viii) other adjustments as deemed necessary.
Amounts included in net income and excluded from Segment Adjusted EBITDA include: (i) depreciation and amortization; (ii) interest and other financial costs; (iii) income/(loss) from equity method investments; (iv) distributions and adjustments related to equity method investments; (v) gain on sales-type leases and equity method investments; (vi) impairment expense; (vii) noncontrolling interests; and (viii) other adjustments, as applicable.
(In millions) 2022 2021 2020 Net cash provided by operating activities (1) $ 5,019 $ 4,911 $ 4,521 Adjustments to reconcile net cash provided by operating activities to adjusted free cash flow Net cash used in investing activities (956) (518) (1,262) Contributions from MPC 44 45 50 Distributions to noncontrolling interests (38) (39) (37) Adjusted free cash flow 4,069 4,399 3,272 Base distributions paid to common and preferred unitholders (2) (3,047) (2,970) (3,006) Adjusted free cash flow after distributions $ 1,022 $ 1,429 $ 266 (1) The years ended December 31, 2022 , 2021 and 2020 include working capital draws of $121 million, $157 million and $201 million, respectively .
(In millions) 2023 2022 2021 Net cash provided by operating activities (1) $ 5,397 $ 5,019 $ 4,911 Adjustments to reconcile net cash provided by operating activities to adjusted free cash flow Net cash used in investing activities (1,252) (956) (518) Contributions from MPC 31 44 45 Distributions to noncontrolling interests (41) (38) (39) Adjusted free cash flow 4,135 4,069 4,399 Base distributions paid to common and preferred unitholders (2) (3,296) (3,047) (2,970) Adjusted free cash flow after distributions $ 839 $ 1,022 $ 1,429 (1) The years ended December 31, 2023 , 2022 and 2021 include working capital draws of $146 million, $121 million and $157 million, respectively .
An estimate of the sensitivity to net income if other assumptions had been used in recording these liabilities is not practical because of the number of contingencies that must be assessed, the number of underlying assumptions and the wide range of reasonably possible outcomes, in terms of both the probability of loss and the estimates of such loss.
An estimate of the sensitivity to net income if other assumptions had been used in recording these liabilities is not practical because of the number of contingencies that must be assessed, the number of underlying assumptions and the wide range of reasonably possible outcomes, in terms of both the probability of loss and the estimates of such loss. 70 Table of Contents For additional information on contingent liabilities, see Item 7.
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 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.
We believe we comply with all legal requirements regarding the environment, but since not all of them are fixed or presently determinable (even under existing legislation) and may be affected by future legislation or regulations, it is not possible to predict all of the ultimate costs of compliance, including remediation costs that may be incurred and penalties that may be imposed. 66 Table of Contents Our environmental capital expenditures are expected to approximate $18 million in 2023.
We believe we comply with all legal requirements regarding the environment, but since not all of them are fixed or presently determinable (even under existing legislation) and may be affected by future legislation or regulations, it is not possible to predict all of the ultimate costs of compliance, including remediation costs that may be incurred and penalties that may be imposed.
This was primarily due to lower depreciation as a result of the derecognition of fixed assets as a result of a lease reclassification in the third quarter of 2022.
This was primarily due to lower depreciation as a result of the derecognition of fixed assets in connection with the Third-Party Lease Modification in 2022.
L&S Operating Data 2022 2021 2020 L&S Crude oil transported for (mbpd): MPC 2,908 2,810 2,465 Third parties 641 570 533 Total 3,549 3,380 2,998 % MPC 82% 83% 82% Refined products transported for (mbpd): MPC 2,016 1,982 1,477 Third parties 95 91 237 Total 2,111 2,073 1,714 % MPC 95% 96% 86% Average tariff rates ($ per Bbl) (1) : Crude oil pipelines $ 0.91 $ 0.95 $ 0.96 Refined product pipelines 0.81 0.78 0.81 Total pipelines $ 0.87 $ 0.89 $ 0.91 Terminal throughput (mbpd) 3,022 2,886 2,673 Marine Assets (number in operation) (2) Barges 296 297 300 Towboats 23 23 23 (1) Average tariff rates calculated using pipeline transportation revenues divided by pipeline throughput barrels.
L&S Operating Data 2023 2022 2021 L&S Crude oil transported for (mbpd): MPC 3,053 2,908 2,810 Third parties 719 641 570 Total 3,772 3,549 3,380 % MPC 81% 82% 83% Refined products transported for (mbpd): MPC 1,941 2,016 1,982 Third parties 99 95 91 Total 2,040 2,111 2,073 % MPC 95% 95% 96% Average tariff rates ($ per Bbl) (1) : Crude oil pipelines $ 0.96 $ 0.91 $ 0.95 Refined product pipelines 0.90 0.81 0.78 Total pipelines $ 0.94 $ 0.87 $ 0.89 Terminal throughput (mbpd) 3,130 3,022 2,886 Marine Assets (number in operation) (2) Barges 305 296 297 Towboats 29 23 23 (1) Average tariff rates calculated using pipeline transportation revenues divided by pipeline throughput barrels.
The agreements governing our debt obligations do not contain credit rating triggers that would result in the acceleration of interest, principal or other payments in the event that our credit ratings are downgraded.
A rating from one rating agency should be evaluated independently of ratings from other rating agencies. The agreements governing our debt obligations do not contain credit rating triggers that would result in the acceleration of interest, principal or other payments in the event that our credit ratings are downgraded.
The MPC Loan Agreement was amended effective January 1, 2023 to update the interest rate to one-month term SOFR adjusted upward by 0.10 percent plus 1.25 percent or such lower rate as would be applicable to such loans under the MPLX Credit Agreement as discussed in Item 8. Financial Statements and Supplementary Data - Note 17.
Borrowings under the MPC Loan Agreement bear interest at one-month term SOFR adjusted upward by 0.10 percent plus 1.25 percent or such lower rate as would be applicable to such loans under the MPLX Credit Agreement as discussed in Item 8. Financial Statements and Supplementary Data - Note 17. All other terms of the MPC Loan Agreement remain unchanged.
This was primarily due to higher prices of $315 million in the Southwest and Southern Appalachia, and higher volumes in the Southwest and Rockies of $255 million, partially offset by a decrease of $92 million due to changes in the fair value of an embedded derivative in a natural gas purchase commitment.
This was primarily due to lower NGL prices of $917 million in the Southwest and Southern Appalachia, partially offset by higher volumes in the Southwest of $405 million and a $47 million increase due to changes in the fair value of an embedded derivative in a natural gas purchase commitment.
Net cash provided by (used in) operating activities, investing activities and financing activities for the past three years were as follows: (In millions) 2022 2021 2020 Net cash provided by/(used in): Operating activities $ 5,019 $ 4,911 $ 4,521 Investing activities (956) (518) (1,262) Financing activities (3,838) (4,395) (3,259) Total $ 225 $ (2) $ — Cash Flows Provided by Operating Activities - Net cash provided by operating activities increased $108 million, or two percent, in 2022 compared to 2021, primarily due to increased throughput and distributions from our equity method investments.
Net cash provided by (used in) operating activities, investing activities and financing activities for the past three years were as follows: (In millions) 2023 2022 2021 Net cash provided by/(used in): Operating activities $ 5,397 $ 5,019 $ 4,911 Investing activities (1,252) (956) (518) Financing activities (3,335) (3,838) (4,395) Total $ 810 $ 225 $ (2) Cash Flows Provided by Operating Activities - Net cash provided by operating activities increased $378 million, or eight percent, in 2023 compared to 2022, primarily due to improved results from operations and increased cash distributions from equity method investments.
(4) Excludes gain/loss on extinguishment of debt and amortization of deferred financing costs. 52 Table of Contents (In millions) 2022 2021 2020 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 $ 5,019 $ 4,911 $ 4,521 Changes in working capital items (121) (157) (201) All other, net (34) (26) (3) Loss/(gain) on extinguishment of debt 1 (10) (19) Net interest and other financial costs (1) 851 819 854 Other adjustments to equity method investment distributions 74 29 40 Restructuring expenses — — 37 Other 23 33 19 Adjusted EBITDA 5,813 5,599 5,248 Adjusted EBITDA attributable to noncontrolling interests (38) (39) (37) Adjusted EBITDA attributable to MPLX LP 5,775 5,560 5,211 Deferred revenue impacts 158 88 144 Sales-type lease payments, net of income (2) 18 71 — Net interest and other financial costs (1) (851) (819) (854) Maintenance capital expenditures, net of reimbursements (144) (88) (115) Equity method investment maintenance capital expenditures paid out (13) (7) (23) Restructuring expenses — — (37) Other 38 (20) 1 DCF attributable to MPLX LP 4,981 4,785 4,327 Preferred unit distributions (129) (141) (127) DCF attributable to GP and LP unitholders $ 4,852 $ 4,644 $ 4,200 (1) Excludes gain/loss on extinguishment of debt and amortization of deferred financing costs.
(4) Excludes gain/loss on extinguishment of debt and amortization of deferred financing costs. 54 Table of Contents (In millions) 2023 2022 2021 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 $ 5,397 $ 5,019 $ 4,911 Changes in working capital items (146) (121) (157) All other, net 16 (34) (26) Loss/(gain) on extinguishment of debt 9 1 (10) Net interest and other financial costs (1) 859 851 819 Other adjustments to equity method investment distributions 38 74 29 Garyville Incident response costs (2) 16 — — Other 122 23 33 Adjusted EBITDA 6,311 5,813 5,599 Adjusted EBITDA attributable to noncontrolling interests (42) (38) (39) Adjusted EBITDA attributable to MPLX LP 6,269 5,775 5,560 Deferred revenue impacts 97 158 88 Sales-type lease payments, net of income (3) 12 18 71 Net interest and other financial costs (1) (859) (851) (819) Maintenance capital expenditures, net of reimbursements (150) (144) (88) Equity method investment maintenance capital expenditures paid out (15) (13) (7) Other (14) 38 (20) DCF attributable to MPLX LP 5,340 4,981 4,785 Preferred unit distributions (99) (129) (141) DCF attributable to GP and LP unitholders $ 5,241 $ 4,852 $ 4,644 (1) Excludes gain/loss on extinguishment of debt and amortization of deferred financing costs.
For additional information on contingent liabilities, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Environmental Matters and Compliance Costs and Item 8. Financial Statements and Supplementary Data - Note 21.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Environmental Matters and Compliance Costs and Item 8. Financial Statements and Supplementary Data - Note 21.
Our capital expenditures for the past three years are shown in the table below: (In millions) 2022 2021 2020 Capital expenditures: Growth capital expenditures $ 665 $ 407 $ 778 Growth capital reimbursements (1) (151) (35) (12) Investments in unconsolidated affiliates 217 151 266 Return of capital (11) (36) (123) Capitalized interest (8) (13) (39) Total growth capital expenditures (2) 712 474 870 Maintenance capital expenditures 188 133 161 Maintenance capital reimbursements (44) (45) (46) Capitalized interest (1) (1) — Total maintenance capital expenditures 143 87 115 Total growth and maintenance capital expenditures 855 561 985 Investments in unconsolidated affiliates (3) (217) (151) (266) Return of capital (3) 11 36 123 Growth and maintenance capital reimbursements (1)(4) 195 80 58 (Increase)/decrease in capital accruals (47) (11) 244 Capitalized interest 9 14 39 Additions to property, plant and equipment (3) $ 806 $ 529 $ 1,183 (1) Growth capital reimbursements include reimbursements from customers and our Sponsor.
Our capital expenditures for the past three years are shown in the table below: (In millions) 2023 2022 2021 Capital expenditures: Growth capital expenditures $ 838 $ 665 $ 407 Growth capital reimbursements (1) (165) (151) (35) Investments in unconsolidated affiliates 98 217 151 Return of capital (3) (11) (36) Capitalized interest (14) (8) (13) Total growth capital expenditures (2) 754 712 474 Maintenance capital expenditures 181 188 133 Maintenance capital reimbursements (31) (44) (45) Capitalized interest (1) (1) (1) Total maintenance capital expenditures 149 143 87 Total growth and maintenance capital expenditures 903 855 561 Investments in unconsolidated affiliates (3) (98) (217) (151) Return of capital (3) 3 11 36 Growth and maintenance capital reimbursements (1)(4) 196 195 80 Increase in capital accruals (82) (47) (11) Capitalized interest 15 9 14 Additions to property, plant and equipment (3) $ 937 $ 806 $ 529 (1) Growth capital reimbursements include reimbursements from customers and our Sponsor.
(2) Includes unrealized derivative gain/(loss), non-cash equity-based compensation and other miscellaneous items. (3) The year ended December 31, 2021 includes a one-time impact from the Refining Logistics harmonization project of $54 million.
We incurred $16 million of incident response costs, net of insurance recoveries, during the year ended December 31, 2023. (2) Includes unrealized derivative gain/(loss), equity-based compensation and other miscellaneous items. (3) The year ended December 31, 2021 includes a one-time impact from the Refining Logistics harmonization project of $54 million.
Prior periods have been updated to reflect these reimbursements to conform to the current period presentation. (2) Total growth capital expenditures exclude $28 million of acquisitions in 2022. (3) Investments in unconsolidated affiliates, return of capital, acquisitions, and additions to property, plant and equipment are shown as separate lines within investing activities in the Consolidated Statements of Cash Flows.
(2) Total growth capital expenditures exclude $246 million and $28 million of acquisitions in 2023 and 2022, respectively. (3) Investments in unconsolidated affiliates, return of capital, acquisitions, and additions to property, plant and equipment are shown as separate lines within investing activities in the Consolidated Statements of Cash Flows.
Sales-type lease revenue increased $30 million in 2022 compared to 2021. This was primarily due to an increase of $28 million from changes in the presentation of lease income between service revenue, rental income and sales-type lease revenue driven by modifications to agreements with MPC. Income from equity method investments increased $114 million in 2022 compared to 2021.
This was primarily due to an increase of $31 million from storage fee escalations and $18 million from changes in the presentation of revenue between service revenue, rental income and sales-type lease revenue driven by modifications to agreements with MPC. Sales-type lease revenue increased $35 million in 2023 compared to 2022.
As of February 1, 2023, the credit ratings on our senior unsecured debt were at or above investment grade level as follows: Rating Agency Rating Moody’s Baa2 (stable outlook) Fitch BBB (stable outlook) Standard & Poor’s BBB (stable outlook) The ratings shown above reflect the respective views of the rating agencies.
As of February 1, 2024, the credit ratings on our senior unsecured debt were at or above investment grade level as follows: Rating Agency Rating Moody’s Baa2 (stable outlook) Fitch BBB (stable outlook) Standard & Poor’s BBB (stable outlook) The ratings reflect the respective views of the rating agencies and should not be interpreted as a recommendation to buy, sell or hold our securities.
SIGNIFICANT FINANCIAL AND OTHER HIGHLIGHTS Significant financial and other highlights for the year ended December 31, 2022 are shown in the chart below. Refer to the Results of Operations, the Liquidity and Capital Resources, and Non-GAAP Financial Information sections for further information. (1) The year ended December 31, 2022 includes a non-cash gain on a lease reclassification of $509 million.
SIGNIFICANT FINANCIAL AND OTHER HIGHLIGHTS Significant financial and other highlights for the years ended December 31, 2023, 2022 and 2021 are shown in the chart below. Refer to the Results of Operations, the Liquidity and Capital Resources, and Non-GAAP Financial Information sections for further information.
On February 15, 2023, MPLX exercised its right to redeem all of the Series B preferred units outstanding. MPLX paid unitholders the Series B preferred unit redemption price of $1,000 per unit.
Approximately 27.2 million Series A preferred units remain outstanding as of December 31, 2023. 63 Table of Contents Redemption of the Series B Preferred Units - On February 15, 2023, MPLX exercised its right to redeem all 600,000 outstanding Series B preferred units. MPLX paid unitholders the Series B preferred unit redemption price of $1,000 per unit.
Additional information for third-party debt is included in Item 8. Financial Statements and Supplementary Data – Note 17. See Item 8. Financial Statements and Supplementary Data – Note 6 for additional information for the related party loan. Our cash commitment at December 31, 2022 was $32,464 million.
Additional information for third-party debt is included in Item 8. Financial Statements and Supplementary Data – Note 17. See Item 8. Financial Statements and Supplementary Data – Note 6 for additional information for the related party loan. Our cash commitment at December 31, 2023 was $33.5 billion, with $2.1 billion payable within 12 months.
See Item 8. Financial Statements and Supplementary Data - Note 20 in the Consolidated Financial Statements for additional information.
See Item 8. Financial Statements and Supplementary Data - Note 20 for additional information. (2) Non-GAAP measure.
In addition to new gas processing plants in the Marcellus and Permian, the remainder of our capital plan is mostly focused on other investments targeted at the expansion or debottlenecking of existing assets to meet customer demand.
In addition to new gas processing plants in the Marcellus and Permian, the remainder of our capital plan is focused on other investments targeted at the expansion or debottlenecking of existing assets to meet customer demand. The capital outlook excludes approximately $100 million for the repayment of MPLX’s share of the Dakota Access joint venture’s debt due in 2024.
Cash used in investing activities also reflects an increase in contributions to equity method investments, which included the $60 million contribution to our Bakken Pipeline joint venture to fund our share of a debt repayment by the joint venture, and $28 million for the acquisition of assets in 2022.
The increase was partially offset by higher contributions to equity method investments in 2022, which included a $60 million contribution to Dakota Access to fund our share of a scheduled debt repayment by the joint venture, and $28 million for the acquisition of assets in 2022.
For further discussion, see Item 8. Financial Statements and Supplementary Data – Note 6 and Note 17. Our intention is to maintain an investment grade credit profile.
Financial Statements and Supplementary Data – Note 6 and Note 17. 62 Table of Contents Our intention is to maintain an investment grade credit profile.
These metrics are significant factors in assessing our operating results and profitability and include the non-GAAP financial measures of Adjusted EBITDA, DCF, adjusted free cash flow (“Adjusted FCF”), Adjusted FCF after distributions, and consolidated total debt to last twelve months Adjusted EBITDA, which we refer to as our leverage ratio.
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, DCF, adjusted free cash flow (“Adjusted FCF”), and Adjusted FCF after distributions.
Higher environmental response and remediation costs associated with a release of crude oil on our pipeline near Edwardsville, Illinois in early 2022 also contributed to the increase. Purchased product costs increased $478 million in 2022 compared to 2021.
The increase in cost of revenues was partially offset by $24 million higher environmental and remediation costs in 2022 associated with a release of crude oil on our pipeline near Edwardsville, Illinois. Purchased product costs decreased $465 million in 2023 compared to 2022.
Financial Statements and Supplementary Data – Note 2 for additional information on these policies and estimates, as well as a discussion of additional accounting policies and estimates. Fair Value Estimates Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Fair Value Estimates Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Actual expenditures may vary as the number and scope of environmental projects are revised as a result of improved technology or changes in regulatory requirements and could increase if additional projects are identified or additional requirements are imposed. For more information on environmental regulations that impact us, or could impact us, see Item 1.
Our environmental capital expenditures are expected to approximate $31 million in 2024. Actual expenditures may vary as the number and scope of environmental projects are revised as a result of improved technology or changes in regulatory requirements and could increase if additional projects are identified or additional requirements are imposed.
See reconciliation below for the most directly comparable GAAP measures. 51 Table of Contents (In millions) 2022 2021 2020 Reconciliation of Adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders from Net income/(loss): Net income/(loss) $ 3,978 $ 3,112 $ (687) Provision for income taxes 8 1 2 Interest and other financial costs 925 879 896 Income from operations 4,911 3,992 211 Depreciation and amortization 1,230 1,287 1,377 (Income)/loss from equity method investments (1) (476) (321) 936 Distributions/adjustments related to equity method investments 652 537 499 Gain on sales-type leases (509) — — Impairment expense — 42 2,165 Restructuring expenses — — 37 Other (2) 5 62 23 Adjusted EBITDA 5,813 5,599 5,248 Adjusted EBITDA attributable to noncontrolling interests (38) (39) (37) Adjusted EBITDA attributable to MPLX LP 5,775 5,560 5,211 Deferred revenue impacts 158 88 144 Sales-type lease payments, net of income (3) 18 71 — Net interest and other financial costs (4) (851) (819) (854) Maintenance capital expenditures, net of reimbursements (144) (88) (115) Equity method investment maintenance capital expenditures paid out (13) (7) (23) Restructuring expenses — — (37) Other 38 (20) 1 DCF attributable to MPLX LP 4,981 4,785 4,327 Preferred unit distributions (129) (141) (127) DCF attributable to GP and LP unitholders $ 4,852 $ 4,644 $ 4,200 (1) The years ended December 31, 2021 and 2020 include impairment expense related to various equity method investments of $6 million and $1,264 million, respectively.
See reconciliation below for the most directly comparable GAAP measures. 53 Table of Contents (In millions) 2023 2022 2021 Reconciliation of Adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders from Net income: Net income $ 3,966 $ 3,978 $ 3,112 Provision for income taxes 11 8 1 Interest and other financial costs 923 925 879 Income from operations 4,900 4,911 3,992 Depreciation and amortization 1,213 1,230 1,287 Income from equity method investments (600) (476) (321) Distributions/adjustments related to equity method investments 774 652 537 Gain on sales-type leases and equity method investments (92) (509) — Impairment expense — — 42 Garyville Incident response costs (1) 16 — — Other (2) 100 5 62 Adjusted EBITDA 6,311 5,813 5,599 Adjusted EBITDA attributable to noncontrolling interests (42) (38) (39) Adjusted EBITDA attributable to MPLX LP 6,269 5,775 5,560 Deferred revenue impacts 97 158 88 Sales-type lease payments, net of income (3) 12 18 71 Net interest and other financial costs (4) (859) (851) (819) Maintenance capital expenditures, net of reimbursements (150) (144) (88) Equity method investment maintenance capital expenditures paid out (15) (13) (7) Other (14) 38 (20) DCF attributable to MPLX LP 5,340 4,981 4,785 Preferred unit distributions (99) (129) (141) DCF attributable to GP and LP unitholders $ 5,241 $ 4,852 $ 4,644 (1) In August 2023, a naphtha release and resulting fire occurred at our Garyville Tank Farm resulting in the loss of four storage tanks with a combined shell capacity of 894 thousand barrels.
Consolidated total debt includes long-term debt due within one year and outstanding borrowings under the loan agreement with MPC. We believe that the presentation of Adjusted EBITDA, DCF, Adjusted FCF and Adjusted FCF after distributions provides useful information to investors in assessing our financial condition and results of operations.
We believe that the presentation of Adjusted EBITDA, DCF, Adjusted FCF and Adjusted FCF after distributions provides useful information to investors in assessing our financial condition and results of operations.
Impairment expense decreased $42 million in 2022 compared to 2021 due to impairments recorded in the 2021 period related to our continued emphasis on portfolio optimization with the closure of certain non-core assets. 57 Table of Contents G&P Operating Data (1) Other includes Southern Appalachia, Bakken and Rockies Operations MPLX LP (1) MPLX LP Operated (2) 2022 2021 2020 2022 2021 2020 G&P Gathering Throughput (MMcf/d) Marcellus Operations 1,321 1,336 1,349 1,321 1,336 1,349 Utica Operations — — — 2,134 1,690 1,818 Southwest Operations 1,374 1,346 1,430 1,629 1,494 1,483 Bakken Operations 152 150 137 152 150 137 Rockies Operations 427 439 511 558 588 688 Total gathering throughput 3,274 3,271 3,427 5,794 5,258 5,475 Natural Gas Processed (MMcf/d) Marcellus Operations 4,035 4,150 4,198 5,515 5,639 5,629 Utica Operations — — — 495 482 578 Southwest Operations (5) 1,448 1,328 1,471 1,637 1,471 1,537 Southern Appalachia Operations 217 231 231 217 231 231 Bakken Operations 146 149 136 146 149 136 Rockies Operations 438 429 502 438 429 502 Total natural gas processed 6,284 6,287 6,538 8,448 8,401 8,613 C2 + NGLs Fractionated (mbpd) Marcellus Operations (3) 488 484 472 488 484 472 Utica Operations (3) — — — 28 26 31 Southwest Operations (5) — 2 18 — 2 18 Southern Appalachia Operations 11 12 12 11 12 12 Bakken Operations 21 23 25 21 23 25 Rockies Operations 4 4 4 4 4 4 Total C2 + NGLs fractionated (4) 524 525 531 552 551 562 (1) This column represents operating data for entities that have been consolidated into the MPLX financial statements.
This decrease was partially offset by depreciation on new assets placed in service in 2022 and 2023. 59 Table of Contents G&P Operating Data (1) Other includes Southern Appalachia, Bakken and Rockies Operations MPLX LP (1) MPLX LP Operated (2) 2023 2022 2021 2023 2022 2021 G&P Gathering Throughput (MMcf/d) Marcellus Operations 1,389 1,321 1,336 1,389 1,321 1,336 Utica Operations — — — 2,338 2,134 1,690 Southwest Operations 1,369 1,374 1,346 1,772 1,629 1,494 Bakken Operations 165 152 150 165 152 150 Rockies Operations 474 427 439 593 558 588 Total gathering throughput 3,397 3,274 3,271 6,257 5,794 5,258 Natural Gas Processed (MMcf/d) Marcellus Operations 4,179 4,035 4,150 5,773 5,515 5,639 Utica Operations — — — 564 495 482 Southwest Operations (5) 1,466 1,448 1,328 1,772 1,637 1,471 Southern Appalachia Operations 216 217 231 216 217 231 Bakken Operations 163 146 149 163 146 149 Rockies Operations 483 438 429 483 438 429 Total natural gas processed 6,507 6,284 6,287 8,971 8,448 8,401 C2 + NGLs Fractionated (mbpd) Marcellus Operations (3) 530 488 484 530 488 484 Utica Operations (3) — — — 33 28 26 Southwest Operations (5) — — 2 — — 2 Southern Appalachia Operations 11 11 12 11 11 12 Bakken Operations 20 21 23 20 21 23 Rockies Operations 3 4 4 3 4 4 Total C2 + NGLs fractionated (4) 564 524 525 597 552 551 (1) This column represents operating data for entities that have been consolidated into the MPLX financial statements.
Rental income increased $31 million in 2022 compared to 2021. This was primarily due to increased storage fees and fee escalations. The increase was partially offset by $32 million from changes in the presentation of lease income between service revenue, rental income and sales-type lease revenue as a result of modifications to lease contracts.
This was primarily due to an increase of $24 million from changes in the presentation of revenue between service revenue, rental income and sales-type lease revenue as a result of modifications to agreements with MPC, as well as an increase of $20 million from refining logistics due to fee escalations.
(In millions) 2022 2021 $ Change 2020 $ Change Revenues and other income: Total revenues and other income (1)(2) $ 11,613 $ 10,027 $ 1,586 $ 7,569 $ 2,458 Costs and expenses: Cost of revenues (excludes items below) 1,369 1,184 185 1,326 (142) Purchased product costs 2,063 1,585 478 539 1,046 Rental cost of sales 123 136 (13) 135 1 Rental cost of sales - related parties 54 109 (55) 160 (51) Purchases - related parties 1,413 1,219 194 1,116 103 Depreciation and amortization 1,230 1,287 (57) 1,377 (90) Impairment expense — 42 (42) 2,165 (2,123) General and administrative expenses 335 353 (18) 378 (25) Restructuring expenses — — — 37 (37) Other taxes 115 120 (5) 125 (5) Total costs and expenses 6,702 6,035 667 7,358 (1,323) Income from operations 4,911 3,992 919 211 3,781 Related-party interest and other financial costs 5 8 (3) 5 3 Interest expense, net of amounts capitalized 843 785 58 829 (44) Other financial costs 77 86 (9) 62 24 Income/(loss) before income taxes 3,986 3,113 873 (685) 3,798 Provision for income taxes 8 1 7 2 (1) Net income/(loss) 3,978 3,112 866 (687) 3,799 Less: Net income attributable to noncontrolling interests 34 35 (1) 33 2 Net income/(loss) attributable to MPLX LP $ 3,944 $ 3,077 $ 867 $ (720) $ 3,797 Adjusted EBITDA attributable to MPLX LP (3) $ 5,775 $ 5,560 $ 215 $ 5,211 $ 349 DCF attributable to MPLX (3) $ 4,981 $ 4,785 $ 196 $ 4,327 $ 458 (1) The years ended December 31, 2021 and 2020 include impairment expense related to various equity method investments of $6 million and $1,264 million, respectively.
(In millions) 2023 2022 $ Change 2021 $ Change Revenues and other income: Total revenues and other income (1) $ 11,281 $ 11,613 $ (332) $ 10,027 $ 1,586 Costs and expenses: Cost of revenues (excludes items below) 1,401 1,369 32 1,184 185 Purchased product costs 1,598 2,063 (465) 1,585 478 Rental cost of sales 82 123 (41) 136 (13) Rental cost of sales - related parties 33 54 (21) 109 (55) Purchases - related parties 1,544 1,413 131 1,219 194 Depreciation and amortization 1,213 1,230 (17) 1,287 (57) Impairment expense — — — 42 (42) General and administrative expenses 379 335 44 353 (18) Other taxes 131 115 16 120 (5) Total costs and expenses 6,381 6,702 (321) 6,035 667 Income from operations 4,900 4,911 (11) 3,992 919 Interest and other financial costs 923 925 (2) 879 46 Income before income taxes 3,977 3,986 (9) 3,113 873 Provision for income taxes 11 8 3 1 7 Net income 3,966 3,978 (12) 3,112 866 Less: Net income attributable to noncontrolling interests 38 34 4 35 (1) Net income attributable to MPLX LP $ 3,928 $ 3,944 $ (16) $ 3,077 $ 867 Adjusted EBITDA attributable to MPLX LP (2) $ 6,269 $ 5,775 $ 494 $ 5,560 $ 215 DCF attributable to MPLX (2) $ 5,340 $ 4,981 $ 359 $ 4,785 $ 196 (1) The year ended December 31, 2022 includes a $509 million gain on a lease reclassification.
This was primarily due to higher volumes of $255 million and higher prices of $315 million, primarily in the G&P segment, partially offset by a decrease of $92 million due to changes in the fair value of an embedded derivative in a natural gas purchase commitment.
This was primarily due to lower NGL prices of $917 million, partially offset by higher volumes of $405 million and an increase of $47 million due to changes in the fair value of an embedded derivative in a natural gas purchase commitment. Purchases-related parties increased $131 million in 2023 compared to 2022.
Income from equity method investments increased $41 million in 2022 compared to 2021 primarily due to higher volumes and rates associated with joint ventures in the Utica, Marcellus and Southwest regions, partially offset by increased facility expenses from a joint venture in the Southwest.
This was primarily due to lower prices across all regions of $1,059 million, partially offset by fees from higher volumes in the Southwest of $451 million. Income from equity method investments increased $46 million in 2023 compared to 2022 primarily due to higher volumes associated with several of our joint ventures in the Marcellus and Utica.
Financial Statements and Supplementary Data - Note 14 for additional information relating to our reporting units and goodwill. Equity Method Investment Impairment Assessments Equity method investments are assessed for impairment whenever factors indicate an other-than-temporary loss in value.
Equity Method Investment Impairment Assessments Equity method investments are assessed for impairment whenever factors indicate an other-than-temporary loss in value.
In response to this business environment, MPLX remains focused on executing its strategic priorities of strict capital discipline, fostering a low-cost culture, and portfolio optimization.
We cannot predict the effect of higher interest rates, any effects of a potential recession, or the impact of inflation and fuel prices on demand for our services. In response to this business environment, MPLX remains focused on executing its strategic priorities of strict capital discipline, fostering a low-cost culture, and portfolio optimization.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeSensitivity analysis of a ten percent difference in our estimated fair value of Level 2 and 3 commodity derivatives (excluding embedded derivatives) as of December 31, 2022 would not have affected income before income taxes for the year ended December 31, 2022, given we had no open commodity derivative contracts during the year.
Biggest changeSensitivity analysis of a ten percent difference in our estimated fair value of Level 2 and 3 commodity derivatives (excluding embedded derivatives) as of December 31, 2023 would not have incremental effects on income before income taxes, given we had no open commodity derivative contracts as of December 31, 2023.
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 third-party outstanding debt, excluding finance leases, is provided in the following table.
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. 71 Table of Contents Interest Rate Risk Sensitivity analysis of the effect of a hypothetical 100-basis-point change in interest rates on third-party outstanding debt, excluding finance leases, is provided in the following table.
As of December 31, 2022, we did not have any open financial or commodity derivative instruments to hedge the economic risks related to interest rate fluctuations or the volatility of commodity prices, respectively; however, we continually monitor the market and our exposure and may enter into these arrangements in the future.
As of December 31, 2023, we did not have any open financial or commodity derivative instruments to hedge the economic risks related to interest rate fluctuations or the volatility of commodity prices, respectively; however, we continually monitor the market and our exposure and may enter into these arrangements in the future.
(2) Assumes a 100-basis-point decrease in the weighted average yield-to-maturity at December 31, 2022. (3) Assumes a 100-basis-point change in interest rates. The change to income before income taxes was based on the weighted average balance of all outstanding variable-rate debt for the year ended December 31, 2022.
(2) Assumes a 100-basis-point decrease in the weighted average yield-to-maturity at December 31, 2023. (3) Assumes a 100-basis-point change in interest rates. The change to income before income taxes was based on the weighted average balance of all outstanding variable-rate debt for the year ended December 31, 2023.
(4) MPLX had no outstanding borrowings on the MPLX Credit Agreement as of December 31, 2022. Our use of fixed or variable-rate debt directly exposes us to interest rate risk. Fixed rate debt, such as our senior notes, exposes us to changes in the fair value of our debt due to changes in market interest rates.
(4) MPLX had no outstanding borrowings on the MPLX Credit Agreement as of December 31, 2023. Our use of fixed or variable-rate debt directly exposes us to interest rate risk. Fixed rate debt, such as our senior notes, exposes us to changes in the fair value of our debt due to changes in market interest rates.
In the event of a customer default, we may sustain a loss and our cash receipts could be negatively impacted. 71 Table of Contents
In the event of a customer default, we may sustain a loss and our cash receipts could be negatively impacted. 72 Table of Contents
(In millions) Fair Value as of December 31, 2022 (1) Change in Fair Value (2) Change in Income before income taxes for the Year Ended December 31, 2022 (3) Outstanding debt Fixed-rate $ 18,095 $ 1,422 N/A Variable-rate (4) $ — $ — $ 1 (1) Fair value was based on market prices, where available, or current borrowing rates for financings with similar terms and maturities.
(In millions) Fair Value as of December 31, 2023 (1) Change in Fair Value (2) Change in Income before income taxes for the Year Ended December 31, 2023 (3) Outstanding debt Fixed-rate $ 19,377 $ 1,568 N/A Variable-rate (4) $ — $ — $ — (1) Fair value was based on market prices, where available, or current borrowing rates for financings with similar terms and maturities.
As of December 31, 2022 and 2021, the estimated fair value of this contract was a liability of $61 million and $108 million, respectively. 70 Table of Contents Open Derivative Positions and Sensitivity Analysis The estimated fair value of our Level 2 and 3 financial instruments are sensitive to the assumptions used in our pricing models.
As of both December 31, 2023 and 2022, the estimated fair value of this contract was a liability of $61 million. Open Derivative Positions and Sensitivity Analysis The estimated fair value of our Level 2 and 3 financial instruments are sensitive to the assumptions used in our pricing models.

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