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, 2023. Discussion and analysis of 2023 and year-to-year comparisons between 2024 and 2023 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, 2024.
All statements in this section, other than statements of historical fact, are forward-looking statements that are inherently uncertain. See Disclosures Regarding Forward-Looking Statements and Item 1A. Risk Factors for a discussion of the factors that could cause actual results to differ materially from those projected in these statements. 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.
MPLX OVERVIEW
We are a diversified, large-cap MLP formed by MPC in 2012 that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. Our assets include a network of crude oil and refined product pipelines; an inland marine business; light-product, asphalt, heavy oil and marine terminals; storage caverns; refinery tanks, docks, loading racks and associated piping; crude oil and natural gas gathering systems and pipelines; as well as natural gas and NGL processing and fractionation facilities. The business consists of two segments based on the product-based value chain each supports: Crude Oil and Products Logistics and Natural Gas and NGL Services . Our assets are positioned throughout the United States. The Crude Oil and Products Logistics segment primarily engages in the gathering, transportation, storage and distribution of crude oil, refined products, other hydrocarbon-based products and renewables. The Crude Oil and Products Logistics segment also includes the operation of our refining logistics, fuels distribution and inland marine businesses, terminals, rail facilities and storage caverns. The Natural Gas and NGL Services segment provides gathering, treating, processing and transportation of natural gas as well as the transportation, fractionation, storage and marketing of NGLs.
SIGNIFICANT FINANCIAL AND OTHER HIGHLIGHTS
Significant financial and other highlights for the years ended December 31, 2025, 2024 and 2023 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) Non-GAAP measure. See reconciliations that follow for the most directly comparable GAAP measures.
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Other Highlights
• Generated $5.9 billion of net cash provided by operating activities, $5.8 billion of distributable cash flow attributable to MPLX, and $1.0 billion of adjusted free cash flow (“Adjusted FCF”).
• Paid $4.0 billion in distributions during the year ended December 31, 2025, which includes a 12.5 percent increase in our quarterly distribution effective for the third quarter of 2025, in line with our commitment to return capital to unitholders.
• Repurchased $400 million of common units held by the public during the year ended December 31, 2025.
• Expanded our crude oil value chain in March 2025 by acquiring gathering businesses from Whiptail Midstream, LLC.
• In June 2025, acquired an additional five percent interest in the joint venture that owns and operates the Matterhorn Express Pipeline.
• Completed the acquisition of the remaining 55 percent interest in BANGL, LLC (“BANGL”), in July 2025 for $703 million in cash, plus an earnout provision of up to $275 million based on targeted EBITDA growth from 2026 to 2029 (the “BANGL Acquisition”).
• Completed the acquisition of Northwind Midstream in August 2025 for $2.4 billion in cash (the “Northwind Midstream Acquisition”).
• Sold our Rockies gathering and processing operations to a subsidiary of Harvest Midstream in November 2025 for $980 million in cash consideration.
Current Economic Environment
We continue to see production increases across our key operating regions in the Marcellus and Utica, where rig counts remain steady and volumes remain strong. Producer consolidation further illustrates the value in the liquids-rich acreage of the Utica, where condensate development activity continues to increase. In the Permian, rising gas-oil ratios and the progression of export projects will support growth opportunities for our business. More broadly, we expect natural gas demand will accelerate over the next few years to provide increased electricity generation required for data centers and overall electric grid demand. As demand for natural gas-powered electricity rises, MPLX is well-positioned to support the development plans of its producer-customers. Additionally, we believe MPLX is protected from significant volatility in our Crude Oil and Products Logistics segment and in the Marcellus and Utica regions due to our business model structured around long-term take-or-pay and capacity contracts.
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 FCF, and Adjusted FCF after distributions.
Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures. We define Adjusted EBITDA as net income adjusted for: (i) provision for income taxes; (ii) net 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) impairment expense; (vii) noncontrolling interests; (viii) transaction-related costs; and (ix) other adjustments, as applicable.
DCF is a financial performance and liquidity measure used by management and by the board of directors of our general partner as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders. We define DCF as Adjusted EBITDA adjusted for: (i) deferred revenue impacts; (ii) sales-type lease payments, net of income; (iii) adjusted 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.
Adjusted FCF and Adjusted FCF after distributions are financial liquidity measures used by management in the allocation of capital and to assess financial performance. We believe that unitholders may use this metric to analyze our ability to manage leverage and return capital. We define Adjusted FCF as net cash provided by operating activities adjusted for: (i) net cash used in investing activities; (ii) cash contributions from MPC; and (iii) cash distributions to noncontrolling interests. We define Adjusted FCF after distributions as Adjusted FCF less distributions to common and preferred unitholders.
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. 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. These non-GAAP financial measures should not be considered alternatives to net income or net cash provided by operating
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activities as they have important limitations as analytical tools because they exclude some but not all items that affect net income and net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. These non-GAAP financial measures should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. Additionally, because non-GAAP financial measures may be defined differently by other companies in our industry, our definitions may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. For a reconciliation of Adjusted EBITDA and DCF to their most directly comparable measures calculated and presented in accordance with GAAP, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations. For a reconciliation of Adjusted FCF and Adjusted FCF after distributions to their most directly comparable measure calculated and presented in accordance with GAAP, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.
COMPARABILITY OF OUR FINANCIAL RESULTS
During the normal course of business, we amend or modify our contractual agreements with customers. These amendments or modifications require the agreements to be reassessed under GAAP, which can impact the classification of revenues or costs associated with the agreement. These reassessments may impact the comparability of our financial results.
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RESULTS OF OPERATIONS
The following tables and discussion summarize our results of operations for the years ended 2025, 2024 and 2023, 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 millions)
$ Change
$ Change
Revenues and other income:
Service revenue
Rental income
Product related revenue
Sales-type lease revenue
Income from equity method investments
Gain on equity method investments
Other income
Total revenues and other income
Costs and expenses:
Cost of revenues (excludes items below)
Purchased product costs
Rental cost of sales
Purchases - related parties
Depreciation and amortization
General and administrative expenses
Other taxes
Total costs and expenses
Income from operations
Net interest and other financial costs
Income before income taxes
Provision for income taxes
Net income
Less: Net income attributable to noncontrolling interests
Net income attributable to MPLX LP
Adjusted EBITDA attributable to MPLX LP (1)
DCF attributable to MPLX (1)
(1) Non-GAAP measure. See reconciliation below to the most directly comparable GAAP measures.
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(In millions)
Reconciliation of Adjusted EBITDA attributable to MPLX LP and DCF attributable to LP unitholders from Net income:
Net income
Provision for income taxes
Net interest and other financial costs
Income from operations
Depreciation and amortization
Income from equity method investments
Distributions/adjustments related to equity method investments
Gain on equity method investments
Gain on sale of assets
Transaction-related costs (1)
Garyville incident response costs (2)
Other (3)
Adjusted EBITDA
Adjusted EBITDA attributable to noncontrolling interests
Adjusted EBITDA attributable to MPLX LP
Deferred revenue impacts
Sales-type lease payments, net of income
Adjusted net interest and other financial costs (4)
Maintenance capital expenditures, net of reimbursements
Equity method investment maintenance capital expenditures paid out
Other
DCF attributable to MPLX LP
Preferred unit distributions
DCF attributable to LP unitholders
(1) Transaction-related costs include costs associated with the Northwind Midstream Acquisition, the BANGL Acquisition and the divestiture of the Rockies gathering and processing operations discussed in Item 8. Financial Statements and Supplementary Data – Note 4.
(2) 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 (“Garyville Incident”). We incurred $16 million of incident response costs, net of insurance recoveries, during the year ended December 31, 2023.
(3) Includes unrealized derivative gains and/or losses, equity-based compensation and other miscellaneous items.
(4) Represents Net interest and other financial costs excluding gains and/or losses on extinguishment of debt and amortization of deferred financing costs.
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(In millions)
Reconciliation of Adjusted EBITDA attributable to MPLX LP and DCF attributable to LP unitholders from Net cash provided by operating activities:
Net cash provided by operating activities
Changes in working capital items
All other, net
Loss on extinguishment of debt
Adjusted net interest and other financial costs (1)
Other adjustments to equity method investment distributions
Transaction-related costs (2)
Garyville Incident response costs (3)
Other
Adjusted EBITDA
Adjusted EBITDA attributable to noncontrolling interests
Adjusted EBITDA attributable to MPLX LP
Deferred revenue impacts
Sales-type lease payments, net of income
Adjusted net interest and other financial costs (1)
Maintenance capital expenditures, net of reimbursements
Equity method investment maintenance capital expenditures paid out
Other
DCF attributable to MPLX LP
Preferred unit distributions
DCF attributable to LP unitholders
(1) Represents Net interest and other financial costs excluding gains and/or losses on extinguishment of debt and amortization of deferred financing costs.
(2) Transaction-related costs include costs associated with the Northwind Midstream Acquisition, the BANGL Acquisition and the divestiture of the Rockies gathering and processing operations discussed in Item 8. Financial Statements and Supplementary Data – Note 4.
(3) We incurred $16 million of Garyville Incident response costs, net of insurance recoveries, during the year ended December 31, 2023.
2025 Compared to 2024
Net income attributable to MPLX increased $595 million in 2025 compared to 2024 primarily due to a $484 million gain from the BANGL Acquisition, annual fee escalations, higher throughputs and benefits from recent acquisitions.
Total revenues and other income increased by $1.1 billion in 2025 compared to 2024 primarily due to:
• Increased Service revenue of $342 million primarily due $132 million of crude oil and products logistics tariff and other fee increases, $96 million from recent acquisitions, $93 million of higher pipeline throughput and a $37 million benefit from a FERC tariff ruling issued in November 2025.
• Increased Rental income of $45 million primarily due to changes in the presentation of lease income between sales-type lease revenue, service revenue and rental income as a result of lease contract modifications, and annual fee escalations related to our refining logistics assets.
• Increased Product related revenue of $195 million due to higher NGL sales volumes in the Southwest and Marcellus of $347 million and a $27 million non-recurring benefit associated with a customer agreement, partially offset by lower revenue in the Rockies of $101 million, including the impact of the Rockies divestiture, and lower NGL prices in the Southwest, Marcellus and Southern Appalachia of $76 million.
• Decreased Income from equity method investments of $105 million primarily driven by a $151 million gain in the 2024 period related to the dilution of our ownership interest in connection with the formation of a new joint venture to strategically combine the Whistler Pipeline and the Rio Bravo Pipeline project (the “Whistler Joint Venture Transaction”), partially offset by increased throughput and fee rates in certain processing and pipeline joint ventures and a $25 million gain in the first half of 2025 related to the formation of a new joint venture, Texas City Logistics LLC. See Supplemental Information on Equity Method Investments for additional information regarding the results of our equity method investments.
• Increased Gain on equity method investments of $464 million, primarily driven by a $484 million gain from the BANGL Acquisition, partially offset by a $20 million gain related to the acquisition of additional ownership interest in existing joint ventures and gathering assets in the Utica basin (the “Utica Midstream Acquisition”) in the 2024 period.
• Increased Other income of $136 million primarily due to a $159 million gain from the Rockies divestiture, partially offset by lower insurance proceeds of $41 million.
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Total costs and expenses increased by $410 million in 2025 compared to 2024 primarily due to:
• Increased Cost of revenues of $1 million primarily due to lower NGL purchases in the Rockies of $89 million, which are now reflected in Purchased product costs due to changes in certain customer contracts, partially offset by higher net operating costs and repairs and maintenance costs of $60 million and the consolidation of recent acquisitions of $34 million.
• Increased Purchased product costs of $254 million primarily due to higher NGL volumes in the Southwest of $276 million and higher NGL volumes in the Rockies of $47 million, which were previously recorded in Cost of revenues due to changes in certain customer contracts, partially offset by lower NGL prices in the Southwest of $52 million.
• Increased Purchases-related parties of $66 million primarily due to increased employee costs from MPC.
• Increased Depreciation and amortization of $68 million primarily due to incremental depreciation associated with recent acquisitions as well as other assets placed in service in 2025.
SEGMENT RESULTS
We classify our business in the following reportable segments: Crude Oil and Products Logistics and Natural Gas and NGL Services. Each of these segments is organized and managed based upon the product-based value chain each supports.
We evaluate the performance of our segments using Segment Adjusted EBITDA. Segment Adjusted EBITDA represents Adjusted EBITDA attributable to the reportable segments. Amounts included in net income and excluded from Segment Adjusted EBITDA include: (i) depreciation and amortization; (ii) net interest and other financial costs; (iii) income/(loss) from equity method investments; (iv) distributions and adjustments related to equity method investments; (v) impairment expense; (vi) noncontrolling interests; (vii) transaction-related costs; and (viii) other adjustments, as applicable. 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 additional financial information about our reportable segments for the years ended December 31, 2025, 2024 and 2023.
Crude Oil and Products Logistics Segment
Crude Oil and Products Logistics Segment Financial Highlights (in millions)
Segment revenues and other income
Segment Adjusted EBITDA
(In millions)
$ Change
$ Change
Total segment revenues and other income
Segment Adjusted EBITDA
Capital expenditures
Investments in unconsolidated affiliates (1)
(1) The year ended December 31, 2024 includes a contribution of $92 million to 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”), to fund our share of debt repayments by the joint venture.
2025 Compared to 2024
Total segment revenues and other income increased $236 million in 2025 compared to 2024. The increase was primarily driven by $132 million of tariff and other fee increases, $93 million of increased pipeline throughput, a $37 million benefit from a FERC tariff ruling issued in November 2025, $21 million from the March 2025 Whiptail Midstream, LLC acquisition and $14 million of additional marine equipment in operation, partially offset by lower insurance proceeds of $41 million. Income from equity method investments decreased $26 million in 2025 compared to 2024, primarily driven by lower throughput on certain equity method
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investment pipeline systems. See Supplemental Information on Equity Method Investments for additional information regarding the results of our equity method investments.
Segment Adjusted EBITDA increased $172 million in 2025 compared to 2024. The increase was primarily driven by $132 million of tariff and other fee increases, $93 million of increased pipeline throughput, a $37 million benefit from a FERC tariff ruling issued in November 2025, $17 million from the March 2025 Whiptail Midstream, LLC acquisition and $14 million of additional marine equipment in operation. These increases were partially offset by lower insurance proceeds of $41 million, higher project related spending of $41 million, higher operating costs of $37 million, driven primarily by higher employee costs from MPC, and increased energy costs as a result of higher throughputs, as well as lower distributions and adjustments from equity method investments of $29 million.
Crude Oil and Products Logistics Operating Data
Crude Oil and Products Logistics
Crude oil transported for (mbpd):
MPC
Third parties
Total
% MPC
Refined products transported for (mbpd):
MPC
Third parties
Total
% MPC
Average tariff rates ($ per Bbl) (1) :
Crude oil pipelines
Refined product pipelines
Total pipelines
Terminal throughput (mbpd)
Marine Assets (number in operation)
Barges
Towboats
(1) Average tariff rates calculated using pipeline transportation revenues divided by pipeline throughput barrels. Transportation revenues include tariff and other fees, which may vary by region and nature of services provided.
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Natural Gas and NGL Services Segment
Natural Gas and NGL Services Segment Financial Highlights (in millions)
Segment revenues and other income (1)
Segment Adjusted EBITDA
(In millions)
$ Change
$ Change
Total segment revenues and other income (1)
Segment Adjusted EBITDA
Capital expenditures
Investments in unconsolidated affiliates
(1) The year ended December 31, 2024 includes a $151 million gain related to the dilution of ownership interest in connection with the Whistler Joint Venture Transaction. See Item 8. Financial Statements and Supplementary Data – Note 4 for additional information.
2025 Compared to 2024
Total segment revenues and other income increased $829 million in 2025 compared to 2024. The increase was primarily due to the recognition of a $484 million gain from the BANGL Acquisition, $347 million of higher NGL sales volumes in the Southwest and Marcellus, a $159 million gain from the Rockies divestiture, $71 million from recent acquisitions and a $34 million non-recurring benefit associated with a customer agreement. These increases were partially offset by lower income from equity method investments of $79 million, primarily driven by a $151 million gain in the second quarter of 2024 related to the dilution of our ownership interest in connection with the Whistler Joint Venture Transaction, $76 million of lower NGL prices in the Southwest, Marcellus and Southern Appalachia and $57 million of lower throughput and fee rates in the Rockies and Bakken.
Additional impacts from equity method investments included increased throughput and fee rates in certain processing and pipeline joint ventures and a $25 million gain in 2025 related to the formation of a new joint venture, Texas City Logistics LLC. See Supplemental Information on Equity Method Investments for additional information regarding the results of our equity method investments.
Segment Adjusted EBITDA increased $81 million in 2025 compared to 2024. The increase is primarily due to $80 million in contributions from recent acquisitions, $63 million of higher distributions and adjustments from equity method investments, $40 million of higher throughput fee rates, $40 million of higher NGL sales volumes in the Southwest and Marcellus and a $37 million non-recurring benefit associated with a customer agreement. These increases were partially offset by higher operating costs of $55 million, lower volumes in the Rockies and Bakken of $45 million, the impact of the divestiture of non-core gathering and processing assets of $31 million, lower NGL pricing of $26 million and higher project related spending of $18 million.
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Natural Gas and NGL Services Operating Data
(1) Other includes Southern Appalachia, Bakken and Rockies Operations
MPLX LP (1)
MPLX LP Operated (2)
Natural Gas and NGL Services
Gathering Throughput (MMcf/d)
Marcellus Operations
Utica Operations
Southwest Operations
Bakken Operations
Rockies Operations
Total gathering throughput
Natural Gas Processed (MMcf/d)
Marcellus Operations
Utica Operations
Southwest Operations (3)
Southern Appalachia Operations
Bakken Operations
Rockies Operations
Total natural gas processed
C2 + NGLs Fractionated (mbpd)
Marcellus Operations (4)
Utica Operations (4)
Other (5)
Total C2 + NGLs fractionated (6)
NGL Pipeline Throughput (mbpd)
Marcellus Operations
Utica Operations
Southwest Operations
Other (5)
Total NGL pipeline throughput
(1) This column represents operating data for entities that have been consolidated into the MPLX financial statements.
(2) This column represents operating data for entities that have been consolidated into the MPLX financial statements as well as operating data for MPLX-operated equity method investments.
(3) The amounts presented above exclude Northwind Midstream treated volumes during the year ended December 31, 2025.
(4) Entities within the Marcellus and Utica Operations jointly own the Hopedale fractionation complex. Hopedale throughput is included in the Marcellus and Utica Operations and represents each region’s utilization of the complex.
(5) Other includes Southern Appalachia, Bakken and Rockies Operations.
(6) Purity ethane makes up approximately 267 mbpd, 265 mbpd and 233 mbpd of MPLX LP consolidated total fractionated products for the years ended December 31, 2025, 2024 and 2023, respectively. Purity ethane makes up approximately 288 mbpd, 282 mbpd and 240 mbpd of MPLX operated total fractionated products for the years ended December 31, 2025, 2024 and 2023, respectively.
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Pricing Information
Natural Gas NYMEX HH ($/MMBtu)
C2 + NGL Pricing/gallon (1)
(1) For 2025 and 2024, C2 + NGL pricing based on Mont Belvieu prices assuming an NGL barrel of approximately 10 percent ethane, 60 percent propane, five percent Iso-Butane, 15 percent normal butane and 10 percent natural gasoline. For 2023, 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. The changes in mix from 2023 to 2024 resulted in an approximate $0.13 increase in the calculated C2 + NGL price per gallon.
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SUPPLEMENTAL INFORMATION ON EQUITY METHOD INVESTMENTS
The following table presents MPLX’s income from equity method investments for the years ended December 31, 2025, 2024 and 2023:
(In millions)
Income from equity method investments:
Crude Oil and Products Logistics
Illinois Extension Pipeline Company, L.L.C.
LOOP LLC
MarEn Bakken Company LLC
Other
Total Crude Oil and Products Logistics
Natural Gas and NGL Services
MarkWest EMG Jefferson Dry Gas Gathering Company, L.L.C.
MarkWest Utica EMG, L.L.C.
Ohio Gathering Company L.L.C.
Sherwood Midstream LLC
WPC Parent, LLC (1)
Other (2)
Total Natural Gas and NGL Services
Total
(1) In May 2024, MPLX completed the Whistler Joint Venture Transaction, which resulted in the formation of a new entity, WPC Parent, LLC. Results include the equity method investment income of our interest in Whistler Pipeline, LLC prior to the transaction date, and results of the equity method investment income of our ownership in WPC Parent, LLC subsequent to the transaction date. The year ended December 31, 2024 includes a gain of $151 million related to the dilution of our ownership interest in connection with the Whistler Joint Venture Transaction.
(2) Includes a $25 million gain in 2025 related to the formation of a new joint venture, Texas City Logistics LLC.
The following table presents the impact of equity method investment distributions and other adjustments included in MPLX’s Adjusted EBITDA for the years ended December 31, 2025, 2024 and 2023:
(In millions)
Distributions/adjustments related to equity method investments:
Crude Oil and Products Logistics
Illinois Extension Pipeline Company, L.L.C.
LOOP LLC
MarEn Bakken Company LLC
Other
Total Crude Oil and Products Logistics
Natural Gas and NGL Services
MarkWest EMG Jefferson Dry Gas Gathering Company, L.L.C.
MarkWest Utica EMG, L.L.C.
Ohio Gathering Company L.L.C.
Sherwood Midstream LLC
WPC Parent, LLC (1)
Other
Total Natural Gas and NGL Services
Total
(1) In May 2024, MPLX completed the Whistler Joint Venture Transaction, which resulted in the formation of a new entity, WPC Parent, LLC. Results include the equity method investment distributions and adjustments of our interest in Whistler Pipeline, LLC prior to the transaction date, and results of the equity method investment distributions and adjustments of our ownership in WPC Parent, LLC subsequent to the transaction date.
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LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
Our cash and cash equivalents were $2,137 million and $1,519 million at December 31, 2025 and December 31, 2024, respectively. The change in cash and cash equivalents was due to the factors discussed below. Net cash provided by (used in) operating activities, investing activities and financing activities for the past three years were as follows:
(In millions)
Net cash provided by/(used in):
Operating activities
Investing activities
Financing activities
Total
Cash Flows Provided by Operating Activities - Net cash provided by operating activities decreased $37 million in 2025 compared to 2024 primarily due to a $182 million increase in working capital requirements, partially offset by improved results of operations and higher cash distributions from equity method investments.
Cash Flows Used in Investing Activities - Net cash used in investing activities increased $2,861 million in 2025 compared to 2024 primarily due to the acquisition of Northwind Midstream for $2,413 million, higher capital spending and the purchase of the remaining 55 percent interest in BANGL for $703 million. The year ended December 31, 2025 also reflects the use of $235 million for the acquisition of Whiptail Midstream, LLC and the purchase of an additional five percent ownership interest in the joint venture that owns and operates the Matterhorn Express pipeline for $151 million. These increases were partially offset by $971 million received from the sale of our Rockies operations.
Cash Flows Used in Financing Activities - Net cash used in financing activities decreased $3,045 million in 2025 compared to 2024. The decrease was primarily driven by increased net debt borrowings of $3,598 million, partially offset by higher distributions paid to unitholders of $421 million as a result of the 12.5 percent increase in our quarterly distribution effective for the third quarter of 2025 and higher unit repurchases of $74 million.
Adjusted Free Cash Flow - For the year ended December 31, 2025, we generated Adjusted FCF of $1.0 billion. This provided us the flexibility to return capital to our unitholders by increasing our quarterly distribution by 12.5 percent in the third quarter of 2025. 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, 2025, 2024 and 2023.
(In millions)
Net cash provided by operating activities (1)
Adjustments to reconcile net cash provided by operating activities to adjusted free cash flow
Net cash used in investing activities (2)
Contributions from MPC
Distributions to noncontrolling interests
Adjusted FCF
Distributions paid to common and preferred unitholders
Adjusted FCF after distributions
(1) The years ended December 31, 2025 , 2024 and 2023 include working capital draws of $65 million, $241 million and $169 million, respectively .
(2) The year ended December 31, 2025 includes $2.4 billion for the Northwind Midstream Acquisition, $703 million for the BANGL Acquisition, $235 million for the acquisition of Whiptail Midstream, LLC, $151 million for the purchase of an additional five percent ownership interest in the joint venture that owns and operates the Matterhorn Express pipeline, a $49 million capital contribution to WPC Parent, LLC to redeem Enbridge’s special membership interest in the Rio Bravo Pipeline project, and $971 million received from the sale of our Rockies gathering and processing operations.
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Debt and Liquidity Overview
Senior Notes
The following table summarizes debt issuances during the year ended December 31, 2025, all of which were issued in underwritten public offerings:
Issue Date
Aggregate Principal Amount
(in millions)
Note
Coupon (percent)
Price to Public
(percent of par)
Interest Payment Dates
Maturity Date
March 10, 2025
April 1 and October 1
April 1, 2035
March 10, 2025
April 1 and October 1
April 1, 2055
August 11, 2025
February 15 and August 15
February 15, 2031
August 11, 2025
January 15 and July 15
January 15, 2033
August 11, 2025
March 15 and September 15
September 15, 2035
August 11, 2025
March 15 and September 15
September 15, 2055
(1) On April 9, 2025, MPLX used $1.2 billion of the net proceeds from the issuance of senior notes in March 2025 to redeem all of (i) MPLX’s outstanding $1,189 million aggregate principal amount of 4.875 percent senior notes due June 2025 and (ii) MarkWest’s outstanding $11 million aggregate principal amount of 4.875 percent senior notes due June 2025. The remaining net proceeds from this offering were used for general partnership purposes.
(2) We used a portion of the net proceeds from this offering to fund the Northwind Midstream Acquisition, including the payment of related fees and expenses, and to increase cash and cash equivalents following the recently completed BANGL Acquisition and BANGL Debt Repayment (as defined below). The remainder of the net proceeds from this offering were used for general partnership purposes.
On July 3, 2025, MPLX used cash on hand to extinguish approximately $656 million principal amount of debt outstanding, including interest, related to certain term and revolving loans assumed as part of the BANGL Acquisition (the “BANGL Debt Repayment”). See Note 4 for additional information on the BANGL Acquisition.
On May 20, 2024, MPLX issued $1.65 billion aggregate principal amount of the 5.50 percent senior notes due June 2034 (the “2034 Senior Notes”) in an underwritten public offering. The 2034 Senior Notes were offered at a price to the public of 98.778 percent of par, with interest payable semi-annually in arrears, commencing on December 1, 2024. On December 1, 2024, MPLX used $1,150 million of the net proceeds from the issuance of the 2034 Senior Notes to repay all of (i) MPLX’s outstanding $1,149 million aggregate principal amount of 4.875 percent senior notes due December 2024 and (ii) MarkWest’s outstanding $1 million aggregate principal amount of 4.875 percent senior notes due December 2024. On February 18, 2025, MPLX used the remaining net proceeds from the issuance of the 2034 Senior Notes to repay all of MPLX’s outstanding $500 million aggregate principal amount of 4.000 percent senior notes due February 2025.
The total issuances of $6.5 billion and total redemptions of $1.7 billion of senior notes during 2025 as discussed above resulted in an aggregate principal amount of senior notes outstanding as of December 31, 2025 of $26 billion, an increase of $4.8 billion compared to December 31, 2024.
On February 12, 2026, MPLX issued $1.0 billion aggregate principal amount of 5.30 percent senior notes due 2036 (the “2036 Senior Notes”) and $500 million aggregate principal amount of 6.10 percent senior notes due 2056 (the “2056 Senior Notes”) in an underwritten public offering. The 2036 Senior Notes were offered at a price to the public of 99.678 percent of par, with interest payable semi-annually in arrears, commencing on October 1, 2026. The 2056 Senior Notes were offered at a price to the public of 98.453 percent of par, with interest payable semi-annually in arrears, commencing on October 1, 2026. We intend to use the net proceeds from the 2036 Senior Notes and 2056 Senior Notes to repay MPLX’s outstanding $1,500 million aggregate principal amount of 1.750 percent senior notes due March 2026 at maturity. Pending final use, we may invest the proceeds in short-term marketable securities or other investments.
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. Borrowings under the MPLX Credit Agreement bear interest, at MPLX’s election, at either the Adjusted Term SOFR or the Alternate Base Rate, both as defined in the MPLX Credit Agreement, plus an applicable margin.
The borrowing capacity under the MPLX Credit Agreement may be increased by up to an additional $1 billion, subject to certain conditions, including the consent of lenders whose commitments would increase. In addition, the maturity date may be extended for up to two additional one-year periods, subject to, among other conditions, the approval of lenders holding the majority of the commitments then outstanding, provided that the commitments of any non-consenting lenders will terminate on the then-effective maturity date. We are charged various fees and expenses in connection with the agreement, including administrative agent fees, commitment fees on the unused portion of the bank revolving credit facility and fees with respect to issued and outstanding letters of credit. The applicable margins to the benchmark interest rates and certain fees fluctuate based on the credit ratings in effect from time to time on MPLX’s long-term debt.
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The MPLX Credit Agreement contains certain representations and warranties, affirmative and negative covenants and events of default that we consider usual and customary for an agreement of this type, including a financial covenant that requires us to maintain a ratio of Consolidated Total Debt as of the end of each fiscal quarter to Consolidated EBITDA (both as defined in the MPLX Credit Agreement) for the prior four fiscal quarters of no greater than 5.0 to 1.0 (or 5.5 to 1.0 for up to two fiscal quarters following certain acquisitions). Consolidated EBITDA is subject to adjustments, including for certain acquisitions completed and capital projects undertaken during the relevant period. Other covenants restrict us and/or certain of our subsidiaries from incurring debt, creating liens on our assets and entering into transactions with affiliates. As of December 31, 2025, we were in compliance with the covenants contained in the MPLX Credit Agreement.
Activity on the MPLX Credit Agreement during the year ended December 31, 2025 is summarized in the table below.
(in millions, except %)
Borrowings
Weighted average interest rate of borrowings
Repayments
Outstanding balance at end of period (1)
(1) There was less than $1 million in letters of credit outstanding on the MPLX Credit Agreement.
MPC Loan Agreement
MPLX is party to a loan agreement with MPC (the “MPC Loan Agreement”). Under the terms of the MPC Loan Agreement, MPC extends loans to MPLX on a revolving basis as requested by MPLX and as agreed to by MPC. The borrowing capacity of the MPC Loan Agreement is $1.5 billion aggregate principal amount of all loans outstanding at any one time. 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, 2029, 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 maturity. 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.
Activity on the MPC Loan Agreement during the year ended December 31, 2025 is summarized in the table below.
(In millions, except %)
Borrowings
Weighted average interest rate of borrowings
Repayments
Outstanding balance at end of period
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. As of February 1, 2026, the credit ratings on our senior unsecured debt were at or above investment grade level as follows:
Rating Agency
Rating
Fitch
BBB (stable outlook)
Moody’s
Baa2 (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. Although it is our intention to maintain a credit profile that supports an investment grade rating, there is no assurance that these ratings will continue for any given period of time. The ratings may be revised or withdrawn entirely by the rating agencies if, in their respective judgments, circumstances so warrant. 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 solely in the event that our credit ratings are downgraded. However, any downgrades in the credit ratings of our senior unsecured debt ratings to below investment grade ratings could, among other things, increase the applicable interest rates and other fees payable under the MPLX Credit Agreement, and may limit our ability to obtain future financing, including refinancing existing indebtedness.
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Our liquidity totaled $5.6 billion at December 31, 2025, consisting of:
December 31, 2025
(In millions)
Total Capacity
Outstanding Borrowings
Available
Capacity
MPLX Credit Agreement
MPC Loan Agreement
Total
Cash and cash equivalents
Total liquidity
We expect our ongoing sources of liquidity to include cash generated from operations, borrowings under our revolving credit facilities and access to capital markets. We believe that cash generated from these sources will be sufficient to meet our short-term and long-term funding requirements, including working capital requirements, capital expenditure requirements, contractual obligations and quarterly cash distributions. Our material future obligations include interest on debt, payments of debt principal, purchase obligations including contracts to acquire property, plant and equipment and our operating leases and service agreements. We may also, from time to time, repurchase our senior notes in the open market, in tender offers, in privately negotiated transactions or otherwise in such volumes, at market prices and upon such other terms as we deem appropriate and execute unit repurchases under our unit repurchase program.
MPC manages our cash and cash equivalents on our behalf directly with third-party institutions as part of the treasury services that it provides to us under our omnibus agreement. From time to time, we may also utilize other sources of liquidity, including the formation of joint ventures or sales of non-strategic assets.
Equity and Preferred Units Overview
Preferred Units
On May 13, 2016, MPLX completed the private placement of approximately 30.8 million Series A preferred units for a cash purchase price of $32.50 per unit. The aggregate net proceeds of approximately $984 million from the sale of the preferred units were used for capital expenditures, repayment of debt and general business purposes.
The following conversions were executed in accordance with the conversion provisions outlined in our Partnership Agreement. During the years ended December 31, 2024 and 2023, certain Series A preferred unitholders exercised their rights to convert their Series A preferred units into 21 million common units and 2 million common units, respectively. On February 11, 2025, MPLX exercised its right to convert the remaining 6 million outstanding Series A preferred units into common units. As a result, there were no Series A preferred units outstanding at December 31, 2025.
Prior to conversion, the holders of the Series A preferred units received quarterly distributions equal to the greater of $0.528125 per unit or the amount of distributions they would have received on an as converted basis. Distributions paid to Series A preferred unitholders during the years ended December 31, 2025, 2024 and 2023 were $6 million, $44 million and $94 million, respectively.
Unit Repurchase Program
On August 5, 2025, we announced a board authorization for the repurchase of $1.0 billion of MPLX common units held by the public in addition to the $1.0 billion common unit repurchase authorization announced on August 2, 2022. These unit repurchase authorizations have no expiration date.
We may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block transactions, accelerated unit repurchases, tender offers, or open market solicitations for units, some of which may be effected through Rule 10b5-1 plans. The timing and amount of future repurchases, if any, will depend upon several factors, including market and business conditions, and such repurchases may be suspended, discontinued or restarted at any time.
Total unit repurchases were as follows for the respective periods:
(In millions, except per unit data)
Units repurchased
Cash paid for common units repurchased (1)
Average cost per unit (1)
(1) Cash paid for common units repurchased and average cost per unit includes commissions paid to brokers during the period.
As of December 31, 2025, we had $1,120 million remaining under the unit repurchase authorizations.
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Distributions
On January 29, 2026, we announced that the board of directors of our general partner had declared a quarterly cash distribution of $1.0765 per common unit for the fourth quarter of 2025, which was paid on February 17, 2026 to common unitholders of record on February 9, 2026. This represents a 12.5 percent increase over the fourth quarter of 2024 distribution. Although our Partnership Agreement requires that we distribute all of our available cash each quarter, we do not otherwise have a legal obligation to distribute any particular amount per common unit.
The allocation of total quarterly cash distributions to common and preferred unitholders is as follows for the years ended December 31, 2025, 2024 and 2023. Our distributions are declared subsequent to quarter end; therefore, the following table represents total cash distributions applicable to the period in which the distributions were earned. See additional discussion in Item 8. Financial Statements and Supplementary Data – Note 8.
(In millions, except per unit data)
Distribution declared:
Limited partner common units - public
Limited partner common units - MPC
Total distributions declared to limited partner common units
Series A preferred units
Series B preferred units
Total distribution declared
Cash distributions declared per limited partner common unit:
Quarter ended March 31,
Quarter ended June 30,
Quarter ended September 30,
Quarter ended December 31,
Year ended December 31,
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Capital Expenditures
Our operations are capital intensive, requiring investments to expand, upgrade, enhance or maintain existing operations and to meet environmental and operational regulations. Our capital requirements consist of growth capital expenditures and maintenance capital expenditures. Growth capital expenditures are those incurred for acquisitions or capital improvements that we expect will increase our operating capacity for volumes gathered, processed, transported or fractionated, decrease operating expenses within our facilities or increase income from operations over the long term. Examples of growth capital expenditures include costs to develop or acquire additional pipeline, terminal, processing or storage capacity. In general, growth capital includes costs that are expected to generate additional or new cash flow for MPLX. In contrast, maintenance capital expenditures are expenditures made to replace partially or fully depreciated assets, to maintain the existing operating capacity of our assets and to extend their useful lives, or other capital expenditures that are incurred to maintain existing system volumes and related cash flows.
Our capital expenditures for the past three years are shown in the table below:
(In millions)
Capital expenditures:
Growth capital expenditures
Growth capital reimbursements
Investments in unconsolidated affiliates (1)
Return of capital (2)
Capitalized interest
Total growth capital expenditures (3)
Maintenance capital expenditures
Maintenance capital reimbursements
Capitalized interest
Total maintenance capital expenditures
Total growth and maintenance capital expenditures
Investments in unconsolidated affiliates (1)
Return of capital (2)
Growth and maintenance capital reimbursements (4)
(Increase)/decrease in capital accruals
Capitalized interest
Other
Additions to property, plant and equipment
(1) Investments in unconsolidated affiliates and additions to property, plant and equipment, net are shown as separate lines within investing activities in the Consolidated Statements of Cash Flows. Investments in unconsolidated affiliates for the years ended December 31, 2025 and December 31, 2024 exclude payments associated with purchases of equity interests in unconsolidated affiliates totaling $213 million and $228 million, respectively.
(2) Return of capital for the year ended December 31, 2025 excludes $42 million in special distributions received in exchange for the contribution of assets to a joint venture. Return of capital for the year ended December 31, 2024 excludes a $134 million cash distribution in connection with the Whistler Joint Venture Transaction.
(3) Total growth capital expenditures exclude $3,316 million, $622 million and $246 million of acquisitions, net of cash acquired, in 2025, 2024 and 2023, respectively, and a $134 million cash distribution received in 2024 in connection with the Whistler Joint Venture Transaction. Total growth capital expenditures also exclude purchases of additional equity interests in unconsolidated affiliates of $213 million and $228 million for the years ended December 31, 2025 and December 31, 2024, respectively.
(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.
For 2026, we announced a capital outlook of $2.7 billion, net of reimbursements, and excluding potential acquisitions, if any, which includes growth capital of $2.4 billion and maintenance capital of $300 million. Our growth capital plans are focused on expanding our Permian to Gulf Coast integrated value chain, progressing long-haul pipeline growth projects to support producer activity, and investing in new gas processing plants in the Marcellus and Permian. The remainder of our capital plan targets the debottlenecking of existing assets to meet customer demand. We continuously evaluate our capital plan and make changes as conditions warrant.
We participate in joint ventures, which, in turn, also invest in capital projects. Certain of our joint ventures fund capital expenditures with project debt financings at the joint venture level or with cash from operations. Growth capital projects funded through debt at the joint venture level or cash from operations of the joint venture do not require capital contributions by us
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unless otherwise noted. Our pro-rata share of these growth capital projects for our equity method investments that have been funded at the joint venture level for the periods presented are shown in the table below.
(In millions, except ownership percentages)
MPLX Ownership
BANGL, LLC (1)
MXP Parent, LLC (2)
WPC Parent, LLC (3)
All other
Total
(1) The year ended December 31, 2025 reflects activity through June 30, 2025, prior to the BANGL Acquisition.
(2) Includes growth capital for Matterhorn Express Pipeline.
(3) Disclosed amounts include growth capital related to WPC Parent, LLC, including the ADCC Pipeline lateral, Rio Bravo Pipeline, Whistler Pipeline and our indirect and 12.5 percent direct ownership interest in Blackcomb and Traverse Pipeline Holdings, LLC.
Project debt at the joint venture level is typically secured by the assets owned by the joint venture. In certain cases, MPLX’s interest in the joint venture, unless otherwise noted, is non-recourse to MPLX in excess of the value of MPLX’s investment in the joint venture. At December 31, 2025, debt held by our unconsolidated joint ventures based on our equity ownership percentage was $1.8 billion.
Cash Commitments
Our material cash requirements include the following contractual obligations and other cash commitments as of December 31, 2025.
Our contractual obligations primarily consist of outstanding borrowings on debt, commitment and administrative fees and interest. 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, 2025 was $43.4 billion, with $2.7 billion payable within 12 months. We intend to repay the short-term maturities with existing cash on hand, short-term borrowings under our revolving credit agreements or with the proceeds of new long-term debt, depending on, among other things, market conditions.
Our contractual commitment for co-location services agreements was $4.1 billion at December 31, 2025. These agreements obligate us to pay MPC for operational and other services provided to the subsidiaries of MPLX Operations LLC. The co-location services agreements have remaining terms up to 43 years.
Finance and operating leases relate primarily to facilities and equipment under lease, including ground leases, building space, office and field equipment, storage facilities and transportation equipment. See Item 8. Financial Statements and Supplementary Data – Note 21 for further discussion about our lease obligations. Our cash commitment at December 31, 2025 was $938 million.
We execute various third-party transportation, terminalling, and gathering and processing agreements that obligate us to minimum volume, throughput or payment commitments over the remaining terms, which range from less than one year to seven years. We expect to pass any minimum payment commitments through to producer customers. These agreements may include escalation clauses based on various inflationary indices; however, those potential increases have not been incorporated in minimum fees due under these agreements presented below. See Item 8. Financial Statements and Supplementary Data – Note 22 for further discussion. Our cash commitment for these agreements at December 31, 2025 was $509 million.
At December 31, 2025, our contractual commitment under contracts to acquire property, plant and equipment was $311 million.
Our other cash commitments consist of expense projects, right of way and easement obligations, natural gas purchase obligations and ARO commitments. These other cash commitments at December 31, 2025 totaled $358 million.
In addition, we have omnibus agreements and employee services 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.
We also pay MPC additional amounts based on the costs actually incurred by MPC in providing other services, except for the portion of the amount attributable to engineering services, which is based on the amounts actually incurred by MPC and its affiliates plus an incremental surcharge. In addition, we are obligated to reimburse MPC for most out-of-pocket costs and expenses incurred by MPC on our behalf.
MPLX has various employee agreements with MPC under which MPLX reimburses MPC for employee benefit expenses, along with the provision of operational and management services in support of both our Crude Oil and Products Logistics and Natural Gas and NGL Services segments’ operations.
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We incurred $2.1 billion of costs under various agreements with MPC, including the omnibus, co-location and employee service agreements for 2025.
Effects of Inflation
Inflation did not have a material impact on our results of operations for the years ended December 31, 2025, 2024 or 2023. We have observed higher costs for labor and materials used in our business during the year ended December 31, 2025. Many of our agreements provide for inflation-based adjustments, including the Producer Price Index-FG, Consumer Price Index or the FERC index. To the extent permitted by competition, regulation and our existing agreements, we have and expect to continue to pass along a portion of increased costs to our customers in the form of higher fees.
TRANSACTIONS WITH RELATED PARTIES
As of December 31, 2025, MPC owned our general partner and an approximate 64 percent limited partner interest in us. We perform a variety of services for MPC related to the transportation of crude and refined products, including renewables, 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. 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.
Excluding significant non-cash items, MPC accounted for 48 percent, 49 percent and 50 percent of our total revenues and other income for the years ended December 31, 2025, 2024 and 2023, respectively. Of our total costs and expenses, MPC accounted for 26 percent, 27 percent and 27 percent for the years ended December 31, 2025, 2024 and 2023, respectively.
ENVIRONMENTAL MATTERS AND COMPLIANCE COSTS
We are subject to extensive federal, state and local environmental laws and regulations. These laws, which change frequently, regulate the discharge of materials into the environment or otherwise relate to protection of the environment. Compliance with these laws and regulations may require us to remediate environmental damage from any discharge of hazardous, petroleum or chemical substances from our facilities or require us to install additional pollution control equipment on our equipment and facilities. Our failure to comply with these or any other environmental or safety-related regulations could result in the assessment of administrative, civil or criminal penalties, the imposition of investigatory and remedial liabilities, and the issuance of injunctions that may subject us to additional operational constraints.
Future expenditures may be required to comply with the CAA and other federal, state and local requirements for our various facilities. The impact of these legislative and regulatory developments, if enacted or adopted, could result in increased compliance costs and additional operating restrictions on our business, each of which could have an adverse impact on our financial position, results of operations and liquidity. We expect that certain of these costs will be subject to indemnification by MPC.
Legislation and regulations pertaining to climate change and GHG emissions have the potential to materially adversely impact our business, financial condition, results of operations and cash flows, including costs of compliance and permitting delays. The extent and magnitude of these adverse impacts cannot be reliably or accurately estimated at this time because specific regulatory and legislative requirements have not been finalized and uncertainty exists with respect to the measures being considered, the costs and the time frames for compliance, and our ability to pass compliance costs on to our customers.
We have incurred and may continue to incur substantial capital, operating and maintenance, and remediation expenditures as a result of these environmental laws and regulations. If these expenditures, as with all costs, are not ultimately reflected in the fees and tariff rates we receive for our services, our operating results will be adversely affected. We believe that substantially all of our competitors must comply with similar environmental laws and regulations. However, the specific impact on each competitor may vary depending on a number of factors, including, but not limited to, the age and location of its operating facilities. Our environmental expenditures for each of the past three years were:
(In millions, except %)
Capital
Percent of total capital expenditures
Compliance: (1)
Operating and maintenance
Remediation (2)
Total
(1) Based on the American Petroleum Institute’s definition of environmental expenditures.
(2) These amounts include spending charged against remediation reserves and exclude non-cash accruals for environmental remediation.
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We accrue for environmental remediation activities when the responsibility to remediate is probable and the amount of associated costs can be reasonably estimated. As environmental remediation matters proceed toward ultimate resolution or as additional remediation obligations arise, charges in excess of those previously accrued may be required.
New or expanded environmental requirements, which could increase our environmental costs, may arise in the future. 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.
Our environmental capital expenditures are expected to approximate $92 million in 2026. 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. Business – Regulatory Matters and Item 1A. Risk Factors.
TAX MATTERS
Our U.S. federal income tax returns for the years 2019 through 2022 are currently under examination by the Internal Revenue Service.
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. Accounting estimates are considered to be critical if (i) the nature of the estimates and assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (ii) the impact of the estimates and assumptions on financial condition or operating performance is material. Actual results could differ from the estimates and assumptions used. See Item 8. 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. There are three approaches for measuring the fair value of assets and liabilities: the market approach, the income approach and the cost approach, each of which includes multiple valuation techniques. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to measure fair value by converting future amounts, such as cash flows or earnings, into a single present value amount using current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace the service capacity of an asset. This is often referred to as current replacement cost. The cost approach assumes that the fair value would not exceed what it would cost a market participant to acquire or construct a substitute asset of comparable utility, adjusted for obsolescence.
The fair value accounting standards do not prescribe which valuation technique should be used when measuring fair value and do not prioritize among the techniques. These standards establish a fair value hierarchy that prioritizes the inputs used in applying the various valuation techniques. Inputs broadly refer to the assumptions that market participants use to make pricing decisions, including assumptions about risk. Level 1 inputs are given the highest priority in the fair value hierarchy while Level 3 inputs are given the lowest priority. The three levels of the fair value hierarchy are as follows:
• Level 1 - Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the measurement date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
• Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the measurement date.
• Level 3 - Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management’s best estimate of fair value.
Valuation techniques that maximize the use of observable inputs are favored. Assets and liabilities are classified in their entirety based on the lowest priority level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement of assets and liabilities within the levels of the fair value hierarchy. We use an income or market approach for recurring fair value measurements and endeavor to use the best information available. We use a cost method or income approach for non-recurring fair value measurements related to the valuation of our leased assets and assets acquired in business combinations. See Item 8. Financial Statements and Supplementary Data – Note 15 for disclosures regarding our fair value measurements.
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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.
Acquisitions
In accounting for business combinations, acquired assets, assumed liabilities and contingent consideration are recorded based on estimated fair values as of the date of acquisition. The excess or shortfall of the purchase price when compared to the fair value of the net tangible and identifiable intangible assets acquired, if any, is recorded as goodwill or a bargain purchase gain, respectively. A significant amount of judgment is involved in estimating the individual fair values of property, plant and equipment, intangible assets, contingent consideration and other assets and liabilities. We use all available information to make these fair value determinations and, for certain acquisitions, engage third-party consultants for valuation assistance.
The fair value of assets and liabilities, including contingent consideration, as of the acquisition date are often estimated using a combination of approaches, including the income approach, which requires us to project future volumes and associated cash flows, and apply an appropriate discount rate; the cost approach, which may require estimates of replacement costs, reproduction costs, and depreciation and obsolescence estimates; and the market approach which uses market data and adjusts for entity-specific differences. The estimates used in determining fair values are based on assumptions believed to be reasonable but which are inherently uncertain. Accordingly, actual results may differ materially from the projected results used to determine fair value.
See Item 8. Financial Statements and Supplementary Data – Note 4 for additional information on our acquisitions. See Item 8. Financial Statements and Supplementary Data – Note 15 for additional information on fair value measurements.
Impairment Assessments of Long-Lived Assets, Intangible Assets, Goodwill and Equity Method Investments
Fair value calculated for the purpose of testing our long-lived assets, intangible assets, goodwill and equity method investments for impairment is estimated using the expected present value of future cash flows method and comparative market prices when appropriate. Significant judgment is involved in performing these fair value estimates since the results are based on forecasted financial information prepared using significant assumptions including:
• Future operating performance. 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 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 and other producers’ 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. Management considers these volume forecasts and other factors when developing our forecasted cash flows.
• Discount rate commensurate with the risks involved. We apply a discount rate to our cash flows based on a variety of factors, including market and economic conditions, operational risk, regulatory risk and political risk. This discount rate is also compared to recent observable market transactions, if possible. A higher discount rate decreases the net present value of cash flows.
• Future capital requirements. These are based on authorized spending and internal forecasts.
Assumptions about the macroeconomic environment are inherently subjective and difficult to forecast. We base our fair value estimates on projected financial information which we believe to be reasonable. However, actual results may differ from these projections.
The need to test for impairment can be based on several indicators, including a significant reduction in prices of or demand for commodities, a poor outlook for profitability, a significant reduction in pipeline throughput volumes, a significant reduction in natural gas or NGL volumes processed, other changes to contracts or changes in the regulatory environment in which the asset or equity method investment is located.
Long-lived Asset Impairment Assessments
Long-lived assets used in operations are assessed for impairment whenever changes in facts and circumstances indicate that the carrying value of the assets may not be recoverable based on the expected undiscounted future cash flow of an asset group. For purposes of impairment evaluation, long-lived assets must be grouped at the lowest level for which independent cash flows can be identified, which is at least at the reporting unit level and in some cases for similar assets in the same geographic region
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where cash flows can be separately identified. If the sum of the undiscounted cash flows is less than the carrying value of an asset group, fair value is calculated, and the carrying value is written down if greater than the calculated fair value.
Goodwill Impairment Assessments
Unlike long-lived assets, goodwill must be tested for impairment at least annually, and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Goodwill is tested for impairment at the reporting unit level. We have five reporting units, four of which have goodwill allocated to them. A goodwill impairment loss is measured as the amount by which a reporting unit’s carrying value exceeds its fair value, without exceeding the recorded amount of goodwill.
At December 31, 2025, MPLX had four reporting units with goodwill totaling approximately $8.8 billion. For the annual impairment assessment as of November 30, 2025, management performed only qualitative assessments for all four reporting units as we determined it was more likely than not that the fair values of the reporting units exceeded their carrying values. See Item 8. 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. Factors providing evidence of such a loss include the fair value of an investment that is less than its carrying value, absence of an ability to recover the carrying value or the investee’s inability to generate income sufficient to justify our carrying value. At December 31, 2025, we had $4.8 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. That is, unfavorable adjustments to some of the above listed assumptions may be offset by favorable adjustments in other assumptions.
See Item 8. Financial Statements and Supplementary Data – Note 5 for additional information on our equity method investments.
Leases
In accounting for leases, we analyze new or modified leases for lease classification. One of the key inputs into the lease classification analysis is the fair value of the leased assets. For newly classified sales-type leases, the net investment in the lease is recorded at the estimated fair value of the underlying leased assets. Significant assumptions used to estimate the leased assets’ fair value include market information for comparable assets, discount rates, forecasted cash flows and cost estimates to replace the service capacity of an asset.
See Item 8. Financial Statements and Supplementary Data – Note 21 for additional information on our leases.
Contingent Liabilities
We accrue contingent liabilities for legal actions, claims, litigation, environmental remediation, tax deficiencies related to operating taxes and third-party indemnities for specified tax matters when such contingencies are both probable and estimable. We regularly assess these estimates in consultation with legal counsel to consider resolved and new matters, material developments in court proceedings or settlement discussions, new information obtained as a result of ongoing discovery and past experience in defending and settling similar matters. Actual costs can differ from estimates for many reasons. For instance, settlement costs for claims and litigation can vary from estimates based on differing interpretations of laws, opinions on degree of responsibility and assessments of the amount of damages. 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 generally record losses related to these types of contingencies as cost of revenues or selling, general and administrative expenses on the Consolidated Statements of Income, except for tax deficiencies unrelated to income taxes, which are recorded as other taxes.
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.
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 22.
Accounting Standards Not Yet Adopted
Refer to Item 8. Financial Statements and Supplementary Data – Note 3 to our audited consolidated financial statements for recently issued financial accounting pronouncements.
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