Updated on June 14th, 2021 by Bob Ciura
Spreadsheet data updated daily
Master Limited Partnerships – or MLPs, for short – are some of the most misunderstood investment vehicles in the public markets. And that’s a shame, because the typical MLP offers:
- Tax-advantaged income
- High yields well in excess of market averages
- The bulk of corporate cash flows returned to shareholders through distributions
An example of a ‘normal’ MLP is an organization involved in the midstream energy industry. Midstream energy companies are in the business of transporting oil, primarily though pipelines. Pipeline companies make up the vast majority of MLPs.
Since MLPs widely offer high yields, they are naturally appealing for income investors. With this in mind, we created a full downloadable list of nearly 100 MLPs in our coverage universe.
You can download the Excel spreadsheet (along with relevant financial metrics like dividend yield and payout ratios) by clicking on the link below:
This comprehensive article covers MLPs in depth, including the history of MLPs, unique tax consequences and risk factors of MLPs, as well as our 7 top-ranked MLPs today.
The table of contents below allows for easy navigation of the article:
Table of Contents
- The History of Master Limited Partnerships
- MLP Tax Consequences
- Advantages & Disadvantages of Investing in MLPs
- The 7 Best MLPs Today
#7: Brookfield Infrastructure Partners (BIP)
#6: Brookfield Renewable Partners (BEP)
#5: NextEra Energy Partners (NEP)
#4: Magellan Midstream Partners (MMP)
#3: Sunoco LP (SUN)
#2: MPLX LP (MPLX)
#1: Enterprise Products Partners (EPD)
- MLP ETFs, ETNs, & Mutual Funds
- Final Thoughts
The History of Master Limited Partnerships
MLPs were created in 1981 to allow certain business partnerships to issue publicly traded ownership interests. The first MLP was Apache Oil Company, which was quickly followed by other energy MLPs, and then real estate MLPs.
The MLP space expanded rapidly until a great many companies from diverse industries operated as MLPs – including the Boston Celtics basketball team.
One important trend over the years, is that energy MLPs have grown from being roughly one-third of the total MLP universe to containing the vast majority of these securities.
Moreover, the energy MLP universe has evolved to be focused on midstream energy operations. Midstream partnerships have grown to be roughly half of the total number of energy MLPs.
MLP Tax Consequences
Master limited partnerships are tax-advantaged investment vehicles. They are taxed differently than corporations. MLPs are pass-through entities. They are not taxed at the entity level. Instead, all money distributed from the MLP to unit holders is taxed at the individual level.
Distributions are ‘passed through’ because MLP investors are actually limited partners in the MLP, not shareholders. Because of this, MLP investors are called unit holders, not shareholders. And, the money MLPs pay out to unit holders is called a distribution (not a dividend).
The money passed through from the MLP to unit holders is classified as either:
- Return of Capital
- Ordinary Income
MLPs tend to have lots of depreciation and other non-cash charges. This means they often have income that is far lower than the amount of cash they can actually distribute. The cash distributed less the MLPs income is a return of capital.
A return of capital is not technically income, from an accounting and tax perspective. Instead, it is considered as the MLP actually returning a portion of its assets to unit holders.
Now here’s the interesting part… Returns of capital reduce your cost basis. That means taxes for returns of capital are only due when you sell your MLP units. Returns of capital are tax-deferred.
Note: Return of capital taxes are also due in the event that your cost basis is less than $0. This only happens for very long-term holding, typically around 10 years or more.
Each individual MLP is different, but on average an MLPs distribution is usually around 80% to 90% a return of capital, and 10% to 20% ordinary income.
This works out very well from a tax perspective. The images below compare what happens when a corporation and an MLP each have the same amount of cash to send to investors.
Note 1: Taxes are never simple. Some reasonable assumptions had to be made to simplify the table above. These are listed below:
- Corporate federal income tax rate of 21%
- Corporate state income tax rate of 5%
- Qualified dividend tax rate of 20%
- Distributable cash is 80% a return of capital, 20% ordinary income
- Personal federal tax rate of 22% less 20% for passive entity tax break
(19.6% total instead of 22%)
- Personal state tax rate of 5% less 20% for passive entity tax break
(4% total instead of 5%)
- Long-term capital gains tax rate of 20% less 20% for passive entity tax break
(16% total instead of 20%)
Note 2: The 20% passive income entity tax break will expire in 2025.
Note 3: In the MLP example, if the maximum personal tax rate of 37% is used, the distribution after all taxes is $8.05.
Note 4: In the MLP example, the accrued cost basis reduction tax is due when the MLP is sold, not annually come tax time.
As the tables above show, MLPs are far more efficient vehicles for returning cash to shareholders relative to corporations. Additionally, in the example above $9.57 out of $10.00 distribution would be kept by the MLP investor until they sold because the bulk of taxes are from returns of capital and not due until the MLP is sold.
Return of capital and other issues discussed above do not matter when MLPs are held in a retirement account.
There is a different issue with holding MLPs in a retirement account, however. This includes 401(k), IRA, and Roth IRA accounts, among others.
When retirement plans conduct or invest in a business activity, they must file separate tax forms to report Unrelated Business Income (UBI) and may owe Unrelated Business Taxable Income (UBTI). UBTI tax brackets go up to 37% (the top personal rate).
MLPs issue K-1 forms for tax reporting. K-1s report business income, expense, and loss to owners. Therefore, MLPs held in retirement accounts may still qualify for taxes.
If UBI for all holdings in your retirement account is over $1,000, you must have your retirement account provider (typically, your brokerage) file Form 990-T. You will want to file form 990-T as well if you have a UBI loss to get a loss carryforward for subsequent tax years. Failure to file form 990-T and pay UBIT can lead to severe penalties. Fortunately, UBIs are often negative. It is a fairly rare occurrence to owe taxes on UBI.
The subject of MLP taxation can be complicated and confusing. Hiring a tax professional to aid in preparing taxes is a viable option for dealing with the complexity.
The bottom line is this: MLPs are tax-advantaged vehicles that are suited for investors looking for current income. It is fine to hold them in either taxable or non-taxable (retirement) accounts. Since retirement accounts are already tax-deferred, holding MLPs in taxable accounts allows you to ‘get credit’ for the full effects of their unique structure.
4 Advantages & 6 Disadvantages of Investing in MLPs
MLPs are a unique asset class. As a result, there are several advantages and disadvantages to investing in MLPs. Many of these advantages and disadvantages are unique specifically to MLPs.
Advantages of MLPs
Advantage #1: Lower taxes
MLPs are tax-advantaged securities, as discussed in the “Tax Consequences” section above. Depending on your individual tax bracket, MLPs are able to generate around 40% more after-tax income for every pre-tax dollar they decide to distribute, versus Corporations.
Advantage #2: Tax-deferred income through returns of capital
In addition to lower taxes in general, 80% to 90% of the typical MLPs distributions are classified as returns of capital. Taxes are not 0wed (unless cost basis falls below 0) on return of capital distributions until the MLP is sold. This creates the favorable situation of tax-deferred income.
Tax-deferred income is especially beneficial for retirees as return on capital taxes may not need to be paid throughout retirement.
Advantage #3: Diversification from other asset classes
Investing in MLPs provides significant diversification in a balanced portfolio. Diversification can be measured by the correlation in return series between asset classes.
MLPs are excellent diversifiers, having either a near zero or negative correlation to corporate bonds, government bonds, and gold.
Additionally, they have a correlation coefficient of less than 0.5 to both REITs and the S&P 500. This makes MLPs an excellent addition to a diversified portfolio.
Advantage #4: Typically very high yields
MLPs tend to have high yields far in excess of the broader market. As of this writing, the S&P 500 yields ~2.1%, while the Alerian MLP ETF (AMLP) yields over 25%. Many individual MLPs have yields above 10%.
Disadvantages of MLPs
Disadvantage #1: Complicated tax situation
MLPs can create a headache come tax season. MLPs issue K-1’s and are generally more time-consuming and complicated to correctly calculate taxes than ‘normal’ stocks.
Disadvantage #2: Potential additional paperwork if held in a retirement account
In addition, MLPs create extra paperwork and complications when invested through a retirement account because they potentially create unrelated business income (UBI). See the “Tax Consequences” section above for more on this.
Disadvantage #3: Little diversification within the MLP asset class
While MLPs provide significant diversification versus other asset classes, there is little diversification within the MLP structure. The vast majority of publicly traded MLPs are oil and gas pipeline businesses. There are some exceptions, but in general MLP investors are investing in energy pipelines and not much else. Because of this, it would be unwise to allocate all or a majority of one’s portfolio to this asset class.
Disadvantage #4: Incentive Distribution Rights (IDRs)
MLP investors are limited partners in the partnership. The MLP form also has a general partner. The general partner is usually the management and ownership group that controls the MLP, even if they own a very small percentage of the actual MLP.
Incentive Distribution Rights, or IDRs, are used to ‘incentivize’ the general partner to grow the MLP. IDRs typically allocate greater percentages of cash flows to go to the general partner (and not to the limited partners) as the MLP grows its cash flows. This reduces the MLPs ability to grow its distributions, putting a handicap on distribution increases.
It should be noted that not all MLPs have IDRs, but the majority do.
Disadvantage #5: Elevated risk of distribution cuts due to high payout ratios
One of the big advantages of investing in MLPs is their high yields. Unfortunately, high yields very often come with high payout ratios.
Most MLPs distribute nearly all of the cash flows they make to unit holders. In general, this is a positive. However, it creates very little room for error. The pipeline business is generally stable, but if cash flows decline unexpectedly, there is almost no margin of safety at many MLPs. Even a short-term disturbance in business results can necessitate a reduction in the distribution.
Disadvantage #6: Growth Through Debt & Share Issuances
Since MLPs typically distribute virtually all of their cash flows as distributions, there is very little money left over to actually grow the partnership.
And most MLPs strive to grow both the partnership, and distributions, over time. To do this, the MLP’s management must tap capital markets by either issuing new units or taking on additional debt.
When new units are issued, existing unit holders are diluted; their percentage of ownership in the MLP is reduced. When new debt is issued, more cash flows must be used to cover interest payments instead of going into the pockets of limited partners through distributions.
The 7 Best MLPs Today
- Return from change in valuation multiple
- Return from distribution yield
- Return from growth on a per-unit basis
The top MLPs list was screened further on a qualitative assessment of a company’s dividend risk. Specifically, MLPs with a Dividend Risk score of ‘F’ according to the Sure Analysis Research Database were omitted from the list.
Continue reading for detailed analysis on each of our top MLPs, ranked according to expected 5-year annual returns, but also ranked further by debt levels and strength of assets.
MLP #7: Brookfield Infrastructure Partners (BIP)
Brookfield Infrastructure Partners is one of the largest global owners and operators of infrastructure networks, which includes operations in sectors such as energy, water, freight, passengers, and data. Brookfield Infrastructure Partners is one of four publicly-traded listed partnerships that is operated by Brookfield Asset Management (BAM).
Brookfield Infrastructure Partners is a large-cap stock with a market capitalization above $20 billion.
Brookfield performed relatively well in 2020, given the economic downturn. FFO-per-unit increased 2.3% for 2020, and 12% in the fourth quarter. Along with quarterly results, BIP also raised its distribution by 5%, the 12th consecutive annual increase.
Strong performance continued in the 2021 first quarter. A breakdown of BIP’s first-quarter results can be seen in the image below:
Source: Investor Presentation
The company has expanded its diversified portfolio of quality infrastructure assets in recent years. More recently, in February 2021 BIP offered to buy Inter Pipeline (IPPLF) for C$13.5 billion (US$10.6 billion). Inter Pipeline has refused the offer on the grounds that it believes the offer undervalues the company.
Going forward, BIP will likely continue to deliver attractive FFO per share growth. We expect 8.0% annual FFO-per-unit growth, while the MLP also offers a nearly 4% yield. As the payout ratio is estimated to be about ~60% this year, the cash distribution is very safe. What adds to BIP’s dividend safety is that its FFO is very stable.
Since 2012, FFOPS has remained stable or has steadily increased every year. The infrastructure that the company provides is needed during recessions as well, which is why FFO would likely remain relatively stable during a downturn or economic crisis. BIP also maintains a solid investment-grade credit rating of BBB+.
MLP #6: Brookfield Renewable Partners (BEP)
Brookfield Renewable Partners L.P. operates one of the world’s largest portfolios of publicly-traded renewable power assets. Its portfolio consists of over 20,000 megawatts of capacity in North America, South America, Europe, and Asia.
Brookfield Renewable Partners is one of four publicly-traded listed partnerships that are operated by Brookfield Asset Management (BAM). The others are Brookfield Property Partners (BPY), Brookfield Infrastructure Partners (BIP), and Brookfield Business Partners (BBU).
Source: Investor Presentation
BEP earns its place on the list because of its high-quality assets, and its exposure to a major growth category within the MLP industry–renewable energy. Brookfield Energy Partners is cross-listed on the New York Stock Exchange and the Toronto Stock Exchange, where it trades under the tickers ‘BEP’ and ‘BEP.UN’, respectively. Despite operating as a Canadian company, Brookfield Energy Partners reports financial results in U.S. dollars. All figures in this article are denominated in U.S. dollars.
In the 2021 first quarter, BEP’s share of actual generation increased 3% year-over-year. Normalized FFO-per-unit increased 21%. BEP continued its aggressive investments–in the first quarter, it invested or agreed to invest $1.6 billion (nearly $410 million net to Brookfield Renewable) of equity across projects including onshore wind, offshore wind, utility scale solar, and distributed generation.
We expect Brookfield Renewable Partners to continue growing funds from operations at a meaningful pace via its heavy investing in new projects. Brookfield Renewable Partners’ objective is “to deliver long-term annualized total returns of 12%-15%, including annual distribution increases of 5%-9% from organic cash flow growth and project development.”
While the total return portion is based on the market price of the security, the distribution and business growth are under the company’s control. Units have an attractive current yield of 3% which is relatively low for an MLP, but BEP makes up for this with safety and rapid growth.
MLP #5: NextEra Energy Partners (NEP)
NextEra Energy Partners was formed in 2014 as a Limited Partnership by NextEra Energy (NEE) to own, operate, and acquire contracted clean energy projects with stable, long-term cash flows. The company’s strategy is to capitalize on the energy industry’s favorable trends in North America of clean energy projects replacing uneconomical projects.
NextEra Energy Partners operates a portfolio of over 5,800 megawatts of renewables, approximately 83% of which is derived from wind with the remainder from solar. NEP also operates 4.3 billion cubic feet of natural gas pipeline capacity, encompassing over 700 miles of pipeline.
Source: Investor Presentation
NextEra Energy (NEE), which owns approximately 83% of NextEra Energy Partners, has an impressive history of generating steady growth. From 2003 through 2018, NextEra Energy grew adjusted earnings-per-share and dividends by 7.8% and 9.1% per year, respectively.
We believe this is a promising baseline for NextEra Energy Partners. Cash available for distribution (CAFD) increased 40% for NEP in 2020.
NEP has continued its strong performance in 2021. In the first quarter, the partnership generated revenue of $246M, up by 16.0% compared to last year’s first quarter. Year–to–date adjusted EBITDA and CAFD stood at $354M and $184M, respectively. The partnership’s distribution grew 15% year–over–year. The partnership expects year–end 2021 run rate for adjusted EBITDA of $1.44B to $1.62B and CAFD of $600 million to $680 million.
Unitholder distributions have increased at a high rate as well. The company expects to increase distributions by 12%-15% per year through 2024.
We expect growth from further expansion in renewable energy sales and addition of new infrastructure to drive an average annual growth rate of 4% through 2025. Equally promising are the company’s future growth prospects, as it is at the forefront of the renewable energy revolution, particularly in the areas of wind and solar. It also has a solid yield of 3.4% and a secure distribution, with an added bonus of growth potential.
MLP #4: Magellan Midstream Partners (MMP)
Magellan Midstream Partners has the longest pipeline system of refined products in the U.S., which is linked to nearly half of the total U.S. refining capacity. Its network of assets includes 9,800 miles of pipeline, 54 storage terminals, and 47 million barrels of storage capacity.
Refined products generate approximately 59% of its total operating income while crude oil and marine storage represents the remaining 41%. MMP has a fee-based model; only ~10% of its operating income depends on commodity prices.
Source: Investor Presentation
In late April, MMP reported (4/29/21) financial results for the first quarter of 2021. The MLP recovered from the pandemic thanks to improved demand for refined products, while it also benefited from the winter storms. As a result, distributable cash flow per share fell only 9% over last year’s first quarter, from $1.36 per unit to $1.24 per unit. The distribution coverage ratio improved sequentially from 1.13 to 1.21. MMP also raised its guidance for its annual distributable cash flow by 5%, from $1.02 billion to $1.07 billion.
MMP has promising growth prospects ahead, as it has several growth projects under way. The company invested $1.0 billion in these projects in 2019, and $355 million in 2020. It also has more than $500 million of potential growth projects under consideration.
We expect DCF-per-unit of $4.70 for 2021, which would sufficiently cover the distribution. MMP’s fee-based model (~85% of operating margin is comprised of fee-based activities) help insulate the company’s cash flows from volatile swings in commodity prices.
It also intends to buy back up to $750 million of its own stock. This buyback could help boost future per-unit earnings and FFO growth.
Magellan has an excellent track record of steadily growing its distribution, and strong distribution safety. Magellan has increased its distribution 71 times since its initial public offering in 2001, including a recent 3% year-over-year increase.
The company expects to maintain a distribution coverage ratio of at least 1.2x over the next several years, which will be sufficient to raise the payout each year. Magellan also has a strong debt profile, with a high credit rating of BBB+ from Standard & Poor’s.
Magellan earns a high ranking on this list for its combination of a 7.7% yield, but also its strong credit rating and long history of distribution increases.
MLP #3: Sunoco LP (SUN)
Sunoco is a Master Limited Partnership that distributes fuel products through its wholesale and retail business units. The wholesale unit purchases fuel products from refiners and sells those products to both its own and independently-owned dealers. The retail unit operates stores where fuel products as well as other products such as convenience products and food are sold to customers.
Sunoco was founded in 2012, and currently trades with a market capitalization of ~$3 billion.
Source: Investor Presentation
Sunoco reported Q1 earnings on May 6th, and results were better than expectations on the top and bottom lines. The partnership sold 1.76 billion gallons of fuel in the first quarter, which was down from 1.90 billion year-over-year, a 7% decline. Fuel margin was 10.3 cents per gallon, down from 13.1 cents in last year’s Q1.
Management said volumes should improve throughout the year with stronger economic activity. Distributable cash flow (DCF) was $108 million in Q1, down from $159 million a year ago. The company reaffirmed its EBITDA guidance for the year, so we have done the same with our DCF-per-unit estimate, which remains at $6.25.
Sunoco’s sale of most of its convenience businesses have turned the company in a fuel wholesale–centered company. In this industry, the company profits from significant scale and revenue consistency. In Texas, Sunoco is one of the largest independent fuel distributors, and Sunoco is also among the top distributors of Chevron, Exxon, and Valero–branded motor fuel in the rest of the United States.
Total gasoline sales have risen over the last couple of years. This macro shift towards higher gasoline consumption can be explained by customers’ preference for larger, less efficient models such as SUVs and trucks.
Sunoco has an extremely high yield above 8%, but investors should always be wary of yields this high. You can see our full list of high dividend stocks here.
Sunoco’s high debt level is troublesome. That said, the company has strong distribution coverage. Sunoco has covered its dividend payout by a factor of 1.9x with distributable cash flows over the last 4 quarters, thereby securing the distribution payout.
MLP #2: MPLX LP (MPLX)
MPLX, LP is a master limited partnership that was formed by the Marathon Petroleum Corporation (MPC) in 2012. The business operates in two segments: Logistics and Storage – which relates to crude oil and refined petroleum products – and Gathering and Processing – which relates to natural gas and natural gas liquids (NGLs).
The company’s Logistics and Storage segment has pipeline capacity of 4.7 million barrels per day.
Source: Investor Presentation
On May 4th, 2021 MPLX released Q1 2021 results for the period ending March 31st, 2021. For the quarter Net Income equaled $739 million compared to a loss of –$2.72 billion in Q1 2020. Distributable cash flow (DCF) equaled $1.137 billion (~$1.10 per unit) versus $1.078 billion (~$1.02 per unit).
Results were slightly better on a per unit basis as a result of a lower unit count. MPLX ended the quarter with a consolidated debt to adjusted EBITDA ratio of 3.9x (down from 4.1x in Q1 2020). Distribution coverage equaled 1.56x compared to 1.44x in the year ago period.
MPLX has positive growth prospects, due primarily to its projects currently under development. Pipelines tend to have a stronghold in terms of extracting economic rents, and natural gas is cleaner than coal. In the last decade, natural gas has overtaken coal as the leading source of electricity generation in the U.S.
Building pipelines requires years of approvals and ongoing regulation. MPLX in particular has a strong position in the Marcellus / Utica region, with long-term contracts from Marathon.
MPLX is an attractive stock for yield and distribution growth. MPLX has so far maintained its quarterly distribution at a rate of $0.6875 per unit. With a forward yield of nearly 9%, future returns could be high, although a yield this high is sometimes an indication of elevated risk.
Still, even a significant cut would leave a very high yield, and barring another fierce downturn the distribution appears safe, particularly if the economy continues its recovery in 2021.
MLP #1: Enterprise Products Partners (EPD)
Enterprise Products Partners was founded in 1968. It operates as an oil and gas storage and transportation company. Enterprise Products has a tremendous asset base which consists of nearly 50,000 miles of natural gas, natural gas liquids, crude oil, and refined products pipelines. It also has storage capacity of more than 250 million barrels. These assets collect fees based on materials transported and stored.
In early May, Enterprise Products reported strong first-quarter results in which distributable cash flow increased 12% to $1.73 billion. The company generated a DCF coverage ratio of 1.7x for the first quarter. Enterprise Products also retained $746 million of DCF for the first quarter of 2021.
We believe Enterprise Products has positive long-term growth potential moving forward, thanks to new projects and exports. In 2021 and 2022, Enterprise Products sees growth capital expenditures of $1.6 billion and $800 million, respectively. In all, Enterprise Products has $3.4 billion of major projects under construction.
Source: Investor Presentation
In terms of safety, Enterprise Products Partners is one of the strongest midstream MLPs. It has credit ratings of BBB+ from Standard & Poor’s and Baa1 from Moody’s, which are higher ratings than most MLPs. The company also had a modest leverage ratio of 3.3x in the trailing 12 months.
Another attractive aspect of Enterprise Products is that it is a recession-resistant company. Enterprise Products’ high-quality assets generate strong cash flow, even in recessions. As a result, Enterprise Products has been able to raise its distribution to unitholders for 22 consecutive years.
Enterprise Products is a blue-chip stock due to its impressive history of distribution payout growth.
In addition, it has world-class assets and a very long history of distribution increases. Combined with a 7.1% current yield, Enterprise Products is our top-ranked MLP.
MLP ETFs, ETNs, & Mutual Funds
There are 3 primary ways to invest in MLPs:
- By investing in units of individual publicly traded MLPs
- By investing in a MLP ETF or mutual fund
- By investing in a MLP ETN
Note: ETN stands for ‘exchange traded note’
The difference between investing directly in a company (normal stock investing) versus investing in a mutual fund or ETF is very clear. It is simply investing in one security versus a group of securities.
ETNs are different. Unlike mutual funds or ETFs, ETNs don’t actually own any underlying shares or units of real businesses. Instead, ETNs are financial instruments backed by the financial institution (typically a large bank) that issued them. They perfectly track the value of an index. The disadvantage to ETNs is that they expose investors to the possibility of a total loss if the backing institution were to go bankrupt.
The advantage to investing in a MLP ETN is that distribution income is tracked, but paid via a 1099. This eliminates the tax disadvantages of MLPs (no K-1s, UBTI, etc.). This unique feature may appeal to investors who don’t want to hassle with a more complicated tax situation. The J.P. Morgan Alerian MLP ETN makes a good choice in this case.
Purchasing individual securities is preferable for many, as it allows investors to concentrate on their best ideas. But ETFs have their place as well, especially for investors looking for diversification benefits.
Master Limited Partnerships are a misunderstood asset class. They offer diversification, tax-advantaged and tax-deferred income, high yields, and have historically generated excellent total returns. You can download your free copy of all MLPs by clicking on the link below:
The asset class is likely under-appreciated because of its more complicated tax status, and because it is relatively new. The first MLP was created in 1981, so they are still a relatively new investment form.
MLPs are generally attractive for income investors, due to their high yields. As always, investors need to conduct their own due diligence regarding the unique tax effects and risk factors before purchasing MLPs. The recent and massive crash across the MLP space is due to plunging commodity prices and the potential for a prolonged recession from the coronavirus.
There is at least some likelihood that many MLPs will cut or suspend distributions, at least until the coronavirus-related panic subsides. That said, the MLPs on this list could be a good place to find long-term buying opportunities among the beaten-down MLPs.