v3.24.3
Fair Value Measurements
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Disclosures Fair Value Measurements
Fair Values – Recurring
The following table presents the impact on the Consolidated Balance Sheets of MPLX’s financial instruments carried at fair value on a recurring basis as of September 30, 2024 and December 31, 2023 by fair value hierarchy level.
September 30, 2024December 31, 2023
(In millions)AssetLiabilityAssetLiability
Commodity contracts (Level 2)
Other current assets / Other current liabilities$1 $— $— $— 
Embedded derivatives in commodity contracts (Level 3)
Other current assets / Other current liabilities— 10 — 11 
Other noncurrent assets / Other long-term liabilities— 59 — 50 
Total carrying value in Consolidated Balance Sheets$1 $69 $— $61 
Level 2 instruments include over-the-counter fixed swaps to mitigate the price risk from our sales of propane under certain percent-of-proceeds and keep-whole arrangements. The swap valuations are based on observable inputs in the form of forward prices based on Mont Belvieu propane forward spot prices and contain no significant unobservable inputs.
Level 3 instruments relate to an embedded derivative liability for a natural gas purchase commitment embedded in a keep-whole processing agreement. The fair value calculation for these Level 3 instruments used significant unobservable inputs including: (1) NGL prices interpolated and extrapolated due to inactive markets ranging from $0.67 to $1.45 per gallon with a weighted average
of $0.85 per gallon and (2) a 100 percent probability of renewal for the five-year renewal term of the gas purchase commitment and related keep-whole processing agreement. Increases or decreases in the fractionation spread result in an increase or decrease in the fair value of the embedded derivative liability, respectively.
Changes in Level 3 Fair Value Measurements
The following table is a reconciliation of the net beginning and ending balances recorded for net liabilities classified as Level 3 in the fair value hierarchy.
Three Months Ended 
September 30,		Nine Months Ended 
September 30,
(In millions)2024202320242023
Beginning balance $(69)$(53)$(61)$(61)
Unrealized and realized (loss)/gain included in Net Income(1)
(3)(10)(18)(7)
Settlements3 3 10 8 
Ending balance$(69)$(60)$(69)$(60)
The amount of total loss for the period included in earnings attributable to the change in unrealized (loss)/gain relating to liabilities still held at end of period$(3)$(9)$(15)$(6)
(1)    (Loss)/gain on derivatives embedded in commodity contracts are recorded in Purchased product costs in the Consolidated Statements of Income.
Fair Values – Non-recurring
Non-recurring fair value measurements and disclosures in 2024 relate to acquisitions and other transactions as discussed in Note 3.
Fair Values – Reported
We believe the carrying value of our other financial instruments, including cash and cash equivalents, receivables, receivables from related parties, lease receivables, lease receivables from related parties, accounts payable, and payables to related parties, approximate fair value. MPLX’s fair value assessment incorporates a variety of considerations, including the duration of the instruments, MPC’s investment-grade credit rating, and the historical incurrence of and expected future insignificance of bad debt expense, which includes an evaluation of counterparty credit risk. The recorded value of the amounts outstanding under the bank revolving credit facility, if any, approximates fair value due to the variable interest rate that approximates current market rates. Derivative instruments are recorded at fair value, based on available market information (see Note 11).
The fair value of MPLX’s debt is estimated based on prices from recent trade activity and is categorized in Level 3 of the fair value hierarchy. The following table summarizes the fair value and carrying value of our third-party debt, excluding finance leases and unamortized debt issuance costs:
September 30, 2024December 31, 2023
(In millions)Fair ValueCarrying ValueFair ValueCarrying Value
Outstanding debt(1)
$21,494 $22,209 $19,377 $20,547 
(1)    Any amounts outstanding under the MPC Loan Agreement are not included in the table above, as the carrying value approximates fair value. This balance is reflected in Current liabilities - related parties in the Consolidated Balance Sheets.
Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring
Level 2 instruments include over-the-counter fixed swaps to mitigate the price risk from our sales of propane under certain percent-of-proceeds and keep-whole arrangements. The swap valuations are based on observable inputs in the form of forward prices based on Mont Belvieu propane forward spot prices and contain no significant unobservable inputs.
Level 3 instruments relate to an embedded derivative liability for a natural gas purchase commitment embedded in a keep-whole processing agreement. The fair value calculation for these Level 3 instruments used significant unobservable inputs including: (1) NGL prices interpolated and extrapolated due to inactive markets ranging from $0.67 to $1.45 per gallon with a weighted average
of $0.85 per gallon and (2) a 100 percent probability of renewal for the five-year renewal term of the gas purchase commitment and related keep-whole processing agreement. Increases or decreases in the fractionation spread result in an increase or decrease in the fair value of the embedded derivative liability, respectively.