Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Q4 2018 Earnings Presentation
24 slides from Marathon Petroleum's earnings presentation, Feb 7, 2019
Slide 1: Fourth-Quarter 2018 Earnings Conference Call
Fourth-Quarter 2018 Earnings Conference Call February 7, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation (MPC). These forward-looking statements relate to, among other things, MPC’s acquisition of Andeavor and include expectations, estim
Slide 3: Fourth Quarter Highlights
Fourth Quarter Highlights Reported fourth-quarter earnings of $951 million or $1.35 per diluted share – Reflects results from Andeavor combination that closed October 1, 2018 – Earnings include costs of $1.06 per diluted share primarily from transaction-related items $2.0 billion of income from
Slide 4: Fourth Quarter Highlights (cont.)
Fourth Quarter Highlights (cont.) $160 million of realized synergies in the fourth-quarter; reiterate annual gross run-rate expectation of up to $600 million by year-end 2019 and up to $1.4 billion by year-end 2021 $4.2 billion of capital returned to shareholders in 2018 – $3.3 billion of share
Slide 5: Realized Synergies – 4th Quarter 2018
Realized Synergies – 4th Quarter 2018 $160 million of realized synergies in 4Q 2018 – Refining & Marketing Segment = $138 million • Crude oil supply and logistics = $101 million • Refining = $32 million • Marketing / Other = $5 million – Corporate = $22 million Realized synergies are incremental
Slide 6: Fourth-Quarter and Full-Year 2018 Earnings
Fourth-Quarter and Full-Year 2018 Earnings 4Q 2018 4Q 2017 2018 2017 Earnings* $951 MM $2.02 B $2.78 B $3.43 B Earnings per Diluted Share* $1.35 $4.09 $5.28 $6.70 Earnings Earnings per Diluted Share 4,000 8 $3,432 $6.70 3,000 $2,780 6 $5.28 $/Share 2,016 $MM 951 4.09 1.35 2,000 4 1,000 2 0 0 2017 20
Slide 7: Transaction-Related and Debt Impacts
Transaction-Related and Debt Impacts Transaction- Purchase accounting related In Millions 4Q18 Related and Actual Other Costs inventory effects Income from Operations Refining & Marketing 923 759 Midstream 889 – $759 million Retail 613 Items Not Allocated to Segments (408) 183 Total Income from Op
Slide 8: Earnings 4Q 2018 vs. 4Q 2017 Variance Analysis
Earnings(a) 4Q 2018 vs. 4Q 2017 Variance Analysis 2,500 2,016 2,000 465 1,500 546 (353) $MM (176) 951 1,000 (104) (135) 191 500 (1,499) 0 4Q 2017 Tax Refining & Midstream Retail Items not Interest and Income Noncontrolling 4Q 2018 Legislation Marketing (c) Allocated to Other Financing Taxes Interest
Slide 9: Refining & Marketing Segment Income
Refining & Marketing Segment Income 4Q 2018 vs. 4Q 2017 Variance Analysis 3,500 769 3,000 (55) 2,500 Volume Effect (330) 804 Volumetric $49 2,000 Crude $231 $MM Product $149 1,500 806 Prch. Inv. Effects ($759) (924) 1,000 207 923 732 (755) 500 (331) 0 4Q 2017 Mid-Con USGC West Coast Sour Sweet Marke
Slide 10: Midstream Segment Income
Midstream Segment Income 4Q 2018 vs. 4Q 2017 Variance Analysis 1,000 230 889 (15) 800 331 600 $MM 400 343 200 0 4Q 2017 MPLX ANDX Other Midstream & Equity 4Q 2018 (a) (b) Affiliates (a) Results related to refining logistics and fuels distribution dropdown into MPLX, which totaled $231 MM for the qua
Slide 11: Retail Segment Income
Retail Segment Income 4Q 2018 vs. 4Q 2017 Variance Analysis 1,000 80 800 384 37 613 600 (193) (47) $MM 400 204 200 148 0 4Q 2017 Fuel Fuel Merchandise Operating Depreciation Other 4Q 2018 Volume Margin Margin Expense… (a) Reflects operating, selling, general and administrative expenses. 11
Slide 12: Total Consolidated Cash Flow
Total Consolidated Cash Flow 4Q 2018 9,000 8,000 457 77 2,270 7,000 6,000 ( 1,450 ) 4,992 5,000 $MM 4,000 3,000 ( 3,369 ) 2,000 3 1,687 (992) ( 301 ) 1,000 0 9/30/2018 Operating Working Net Debt Capital Acquistions Return of Net Other 12/31/2018 Cash Balance Cash Flow Capital Expenditures, Capital t
Slide 13: Capitalization and Select Balance Sheet Data
Capitalization and Select Balance Sheet Data MPC MPLX ANDX MPC Excluding As of December 31, 2018 Consolidated Adjustments(a) Adjustments(a) MPLX & ANDX ($MM except ratio data) Debt 27,524 13,393 4,973 9,158 Mezzanine equity 1,004 1,004 - - Equity 44,084 8,336 3,880 31,868 Total capitalization 72,612
Slide 14: First-Quarter 2019 Outlook
First-Quarter 2019 Outlook Other Corporate Turnaround Depreciation Other Total Crude Charge/ Total Sweet Sour and Other and Major and Manufacturing Direct Throughput 1 Feedstocks Throughput 1 Crude Crude Unallocated Maintenance Amortization Cost 2 Operating Costs Throughput 1 Items 3 in MBPD Percent
Slide 15: Appendix
Appendix 15
Slide 16: Refining & Marketing Indicative Margin
Refining & Marketing Indicative Margin 4Q 2018 5,000 1,198 (15) 4,313 4,000 (428) 859 Volume $383 Crude ($170) 3,000 Products $118 2,699 Purch. Inv. Effects ($759) $MM 2,000 (2,266) 923 1,000 (1,124) 0 Blended Crack Sweet Sour Market Other R&M Direct Other R&M Spread Differential Differential Struct
Slide 17: Earnings
Earnings 2018 ($MM unless otherwise noted) 1Q 2Q 3Q 4Q FY 2018 Refining & Marketing segment income (loss)(a) (133) 1,025 666 923 2,481 Retail segment income 95 159 161 613 1,028 Midstream segment income(a) 567 617 679 889 2,752 Corporate and other unallocated items (89) (81) (99) (233) (502) Transac
Slide 18: Reconciliation: Net Income to Adjusted EBITDA
Reconciliation Net Income Attributable to MPC to Adjusted EBITDA and LTM Adjusted Pro Forma EBITDA ($MM) 1Q ‘18 2Q ‘18 3Q ‘18 4Q ‘18 LTM Net Income attributable to MPC 37 1,055 737 951 2,780 Add: Net interest and other financial costs 183 195 240 385 1,003 Net income attributable to noncontrolling i
Slide 19: Reconciliation: MPLX Net Income to Adjusted EBITDA
Reconciliation MPLX Net Income to Adjusted EBITDA Related to MPLX 2018 ($MM) LTM 1Q 2Q 3Q 4Q MPLX Net Income 423 456 516 439 1,834 Add: Net interest and other financial costs 130 151 153 227 661 Provision (benefit) for income taxes 4 1 3 - 8 Depreciation and amortization 176 188 201 201 766 Adjusted
Slide 20: Reconciliation: ANDX Net Income to Adjusted EBITDA
Reconciliation ANDX Net Income to Adjusted EBITDA Related to ANDX 2018 ($MM) LTM 1Q 2Q 3Q 4Q ANDX Net Income 131 132 166 171 600 Add: Net interest and other financial costs 55 60 57 61 233 Provision (benefit) for income taxes - - - - - Depreciation and amortization 89 93 86 101 369 Adjusted EBITDA r
Slide 21: Reconciliation: Operating Cash Flow Before Working Capital
Reconciliation Cash Provided by (used in) Operations to Operating Cash Flow Before Changes in Working Capital 2018 ($MM) 1Q 2Q 3Q 4Q FY 2018 Cash provided by (used in) operations (137) 2,386 1,182 2,727 6,158 Less changes in working capital: Changes in current receivables 96 (321) (484) 2,298 1,589
Slide 22: Reconciliation: Refining & Marketing Margin
Reconciliation Refining & Marketing Income from Operations to Refining & Marketing Margin ($MM) 4Q 2018 4Q 2017 2018 2017 Refining & Marketing income from operations 923 732 2,481 2,321 Plus: Refinery direct operating costs(a) 1,889 1,084 4,801 4,113 Refinery depreciation & amortization 377 258 1,08
Slide 23: Reconciliation: Retail Total Margin
Reconciliation Retail Income from Operations to Retail Total Margin ($MM) 4Q 2018 4Q 2017 2018 2017 Retail income from operations 613 148 1,028 729 Plus (Less): Operating, selling, general and administrative expenses 593 400 1,796 1,533 Depreciation and amortization 125 78 353 275 Income from equity
Slide 24: Marathon
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