Equity

Units Outstanding – The Partnership had 407,130,020 common units outstanding as of December 31, 2017. Of that number, 118,090,823 were owned by MPC, which also owned the two percent GP Interest represented by 8,308,773 general partner units.

Subordinated Unit Conversion – Following payment of the cash distribution for the second quarter of 2015, the requirements for the conversion of all subordinated units were satisfied under the Partnership Agreement. As a result, effective August 17, 2015, the 36,951,515 subordinated units owned by MPC were converted into common units on a one-for-one basis and thereafter participate on terms equal with all other common units in distributions of available cash. The conversion did not impact the amount of the cash distributions paid by the Partnership or the total units outstanding.

Reorganization Transactions – On September 1, 2016, the Partnership and various affiliates initiated a series of reorganization transactions in order to simplify the Partnership’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, 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 the Partnership. 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 the Partnership and its subsidiaries.

MarkWest Merger – On December 4, 2015, the Partnership completed the MarkWest Merger. As defined in the merger agreement, each common unit of MarkWest issued and outstanding at the effective time of the MarkWest Merger was converted into the right to receive 1.09 common units of MPLX LP. This resulted in the issuance of 216,350,465 common units. The Class A units of MarkWest outstanding immediately prior to the MarkWest Merger were converted into 28,554,313 Class A units of MPLX LP having substantially similar rights and obligations that the Class A units of MarkWest had immediately prior to the combination. Each outstanding Class B unit of MarkWest had, immediately prior to the merger, converted into the right to receive one Class B unit of MPLX LP having substantially similar rights, including conversion and registration rights, and obligations that the Class B units of MarkWest had immediately prior to the merger. This resulted in the issuance of 7,981,756 MPLX LP Class B units. 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, on July 1, 2016 and July 1, 2017. 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 the Partnership was limited to a maximum of five percent of the Partnership’s outstanding common units. Additionally, M&R was given the right with respect to such converted units to participate in the Partnership’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 the Partnership. 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 the Partnership.

ATM Program – On August 4, 2016, the Partnership entered into a second amended and restated distribution agreement (the “Distribution Agreement”), providing for the at-the-market issuances of common units, 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 years ended December 31, 2017, 2016, and 2015, the Partnership issued an aggregate of 13,846,998, 26,347,887, and 25,166 common units, respectively, under our ATM Program, generating net proceeds of approximately $473 million, $776 million, and $1 million, respectively. The Partnership used the net proceeds from sales under the ATM Program for general partnership 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, 2015, 2016, and 2017:



(In units)	Common	Class B		Subordinated		General Partner⁽¹⁾		Total
Balance at December 31, 2014	43,341,098	—		36,951,515		1,638,625		81,931,238
Unit-based compensation awards	18,932	—		—		386		19,318
Issuance of units under the ATM Program	25,166	—		—		514		25,680
Subordinated unit conversion	36,951,515	—		(36,951,515	)	—		—
MarkWest Merger	216,350,465	7,981,756		—		5,160,950		229,493,171
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


(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 and the Joint Interest Acquisition, 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 the Partnership to issue an unlimited number of additional partnership 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 based on a fixed distribution schedule, as discussed in Note 9, and subsequently allocated to the general partner and limited partner unitholders. However, when distributions related to the IDRs are made, earnings equal to the amount of those distributions are 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:



(In millions)	2017		2016		2015
Net income attributable to MPLX LP	$	794	$	233	$	156
Less: Preferred unit distributions	65		41		—
General partner's IDRs and other	310		191		55
Net income attributable to MPLX LP available to general and limited partners	$	419	$	1	$	101

General partner's two percent GP Interest in net income attributable to MPLX LP	$	8	$	—	$	2
General partner's IDRs and other	310		191		55
General partner's GP Interest in net income attributable to MPLX LP	$	318	$	191	$	57

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, Preferred unitholders and general partner will receive. In accordance with the Partnership Agreement, on January 26, 2018, the Partnership declared a quarterly cash distribution, based on the results of the fourth quarter of 2017, totaling $346 million, or $0.6075 per unit. This distribution was paid on February 14, 2018 to unitholders of record on February 5, 2018. See the table below for the IDR impact for 2017.

The allocation of total quarterly cash distributions to general, limited, and Preferred unitholders is as follows for the years ended December 31, 2017, 2016 and 2015. The Partnership’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)	2017		2016		2015
General partner's distributions:
General partner's distributions on general partner units	$	25	$	18	$	6
General partner's distributions on IDRs⁽¹⁾	303		187		54
Total distribution on general partner units and IDRs	328		205		60
Limited partners' distributions:
Common unitholders, includes common units of general partner	895		692		224
Subordinated unitholders	—		—		31
Total limited partners' distributions	895		692		255
Preferred unit distributions	65		41		—
Total cash distributions declared	$	1,288	$	938	$	315


(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.