Equity

Units Outstanding – MPLX had 794,089,518 common units outstanding as of December 31, 2018. Of that number, 504,701,934 were owned by MPC, which also owns the non-economic GP interest as described below.

GP/IDR Exchange – On February 1, 2018, MPC cancelled its IDRs and converted its economic GP Interest in MPLX LP to a non-economic general partner interest in exchange for 275 million newly issued MPLX LP common units. These units had a fair value of $10.4 billion as of the transaction date as recorded on the Consolidated Statements of Equity. As a result of this transaction, the general partner units and IDRs were eliminated, are no longer outstanding, and no longer participate in distributions of cash from MPLX. MPC continues to own the non-economic GP Interest in MPLX LP. See Note 7 for more information on the net income per unit calculation.

Reorganization Transactions – On September 1, 2016, MPLX and various affiliates initiated a series of reorganization transactions in order to simplify MPLX’s ownership structure and its financial and tax reporting requirements (the “Class A Reorganization”). In connection with these transactions, all of the issued and outstanding MPLX LP Class A units, all of which were held by MarkWest Hydrocarbon, L.L.C. (“MarkWest Hydrocarbon”), were either distributed to, or purchased by, MPC in exchange for $84 million in cash, 21,401,137 MPLX LP common units and 436,758 MPLX LP general partner units. Following these initial transactions, the MPLX LP Class A units were exchanged on a one-for-one basis for newly issued common units representing limited partner interests in MPLX LP. MPC also contributed $141 million to facilitate the repayment of intercompany debt between MarkWest Hydrocarbon and MarkWest. As a result of these transactions, the MPLX LP Class A units were eliminated, are no longer outstanding and no longer participate in distributions of cash from MPLX. Cash that is derived from or attributable to MarkWest Hydrocarbon’s operations is now treated in the same manner as cash derived from or attributable to other operations of MPLX and its subsidiaries.

Class B Conversions - On July 1, 2016 and July 1, 2017, each Class B unit of MPLX LP was converted, in two equal installments, into 1.09 MPLX LP common units and the right to receive $6.20 in cash. Upon the conversion of each tranche of the Class B units, the right of the unitholder, M&R MWE Liberty LLC and certain of its affiliates (“M&R”), to vote as a common unitholder of MPLX was limited to a maximum of five percent of MPLX’s outstanding common units. Additionally, M&R was given the right with respect to such converted units to participate in MPLX’s underwritten offerings of our common units including continuous equity or similar programs in an amount up to 20 percent of the total number of common units offered by MPLX. M&R may freely transfer such converted units, and M&R has the right to demand that MPLX LP conduct up to three underwritten offerings beginning in 2017, but restricted to no more than one offering in any twelve-month period. Following the July 1, 2017 conversion, all MPLX LP Class B units were eliminated, are no longer outstanding and no longer participate in distributions of cash from MPLX.

ATM Program – On March 13, 2018, MPLX entered into a Third Amended and Restated Distribution Agreement, providing for the at-the-market issuances of common units having an aggregate offering price of up to approximately $1.7 billion, in amounts, at prices and on terms determined by market conditions and other factors at the time of the offerings (such continuous offering program, or at-the-market program is referred to as the “ATM Program”). During the year ended December 31, 2018, MPLX issued no common units under the ATM Program. During the years ended December 31, 2017 and 2016, MPLX issued an aggregate of 13,846,998 and 26,347,887 common units, respectively, under our ATM Program, generating net proceeds of approximately $473 million and $776 million, respectively. MPLX used the net proceeds from sales under the ATM Program for general business purposes, including repayment or refinancing of debt, and funding for acquisitions, working capital requirements and capital expenditures.

The table below summarizes the changes in the number of units outstanding for the years ended December 31, 2016, 2017, and 2018:



(In units)	Common	Class B		General Partner⁽¹⁾		Total
Balance at December 31, 2015	296,687,176	7,981,756		6,800,475		311,469,407
Unit-based compensation awards	120,989	—		2,470		123,459
Issuance of units under the ATM Program	26,347,887	—		537,710		26,885,597
Contribution of HSM (See Note 4)	22,534,002	—		459,878		22,993,880
Class B Conversion	4,350,057	(3,990,878	)	7,330		366,509
Class A Reorganization	7,153,177	—		(436,758	)	6,716,419
Balance at December 31, 2016	357,193,288	3,990,878		7,371,105		368,555,271
Unit-based compensation awards	268,167	—		5,472		273,639
Issuance of units under the ATM Program	13,846,998	—		282,591		14,129,589
Contribution of HST/WHC/MPLXT (See Note 4)	12,960,376	—		264,497		13,224,873
Contribution of the Joint-Interest Acquisition (See Note 4)	18,511,134	—		377,778		18,888,912
Class B conversion	4,350,057	(3,990,878	)	7,330		366,509
Balance at December 31, 2017	407,130,020	—		8,308,773		415,438,793
Unit-based compensation awards	348,387	—		140		348,527
Contribution of Refining Logistics and Fuels Distribution (See Note 4)	111,611,111	—		2,277,778		113,888,889
Conversion of GP economic interests	275,000,000	—		(10,586,691	)	264,413,309
Balance at December 31, 2018	794,089,518	—		—		794,089,518


(1)	Changes to the number of general partner units outstanding, other than changes due to contributions made to MPC for the acquisitions of HSM, HST, WHC, MPLXT, the Joint-Interest Acquisition and Refining Logistics and Fuels Distribution, are the result of cash contributions made by the general partner in order to maintain its two percent GP Interest.

Issuance of Additional Securities – The Partnership Agreement authorizes MPLX to issue an unlimited number of additional securities for the consideration and on the terms and conditions determined by the general partner without the approval of the unitholders.

Net Income Allocation – In preparing the Consolidated Statements of Equity, net income attributable to MPLX LP is allocated to preferred unitholders first and subsequently allocated to the limited partner unitholders in accordance with their respective ownership percentages. Prior to 2018, when distributions related to the IDRs were made, earnings equal to the amount of those distributions were first allocated to the general partner before the remaining earnings are allocated to the unitholders, based on their respective ownership percentages. The following table presents the allocation of the general partner’s GP Interest in net income attributable to MPLX LP, for income statement periods occurring prior to the exchange of the GP economic interests:



(In millions)	2017		2016
Net income attributable to MPLX LP	$	794	$	233
Less: Preferred unit distributions	65		41
General partner's IDRs and other	310		191
Net income attributable to MPLX LP available to general and limited partners	419		1

General partner's two percent GP Interest in net income attributable to MPLX LP	8		—
General partner's IDRs and other	310		191
General partner's GP Interest in net income attributable to MPLX LP	$	318	$	191

Cash Distributions – The Partnership Agreement sets forth the calculation to be used to determine the amount and priority of cash distributions that the common unitholders and preferred unitholders will receive. In accordance with the Partnership Agreement, on January 25, 2019, MPLX declared a quarterly cash distribution, based on the results of the fourth quarter of 2018, totaling $514 million, or $0.6475 per common unit; this rate was also received by preferred unitholders. These distributions were paid on February 14, 2019 to unitholders of record on February 5, 2019. Distributions for the fourth quarter of 2017 were $0.6075 per common unit while distributions for the twelve months ended December 31, 2018 and 2017 were $2.5300 and $2.2975 per common unit, respectively.

The allocation of total quarterly cash distributions to general, limited, and preferred unitholders is as follows for the years ended December 31, 2018, 2017 and 2016. MPLX’s distributions are declared subsequent to quarter end; therefore, the following table represents total cash distributions applicable to the period in which the distributions were earned.



(In millions)	2018		2017		2016
General partner's distributions:
General partner's distributions on general partner units	$	—	$	25	$	18
General partner's distributions on IDRs⁽¹⁾	—		303		187
Total distribution on general partner units and IDRs	—		328		205
Limited partners' distributions:
Common unitholders, includes common units of general partner	1,985		895		692
Preferred unit distributions	75		65		41
Total cash distributions declared	$	2,060	$	1,288	$	938


(1)	Includes distributions of fourth quarter 2017 income declared on general partner common units issued February 1, 2018 in exchange for the economic general partner interest.