Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Corporate Update (June 2012)
93 slides from Marathon Petroleum's corporate update, June 2012
Slide 1: Business Update
Business Update June 2012 A\\ Marathon MARATHON J Petroleum Corporation
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements relate to, a
Slide 3: Opening Remarks
Opening Remarks Delivering strong financial results 1Q 2012 net income of $596 MM driven by wider crack spreads and crude oil differentials Speedway margins grow period over period Investment grade credit profile Executing on commitment to return capital to shareholders $850 MM accelerat
Slide 4: Corporate Priorities
Corporate Priorities Achieve excellence in safety, environmental performance Balance and operations Maintain investment grade credit profile Customers Increase earnings and and cash flow Discipline Flexibility Shareholders Organic investments Selective value accretive acquisitions Optimi
Slide 5: MPC Key Strengths
MPC Key Strengths Balanced Operations Crude Oil Refining Capacity Crude Slate PADD III II Sour Crude Sweet Crude 52% 48% 47% PADD IIIII 53% Sour SweetCrude Crude 1/1/12 YTD March 2012 Assured Sales of Gasoline Production (Speedway + Brand + Wholesale Contract Sales) ~ 40% Wholesale and Other Sales A
Slide 6: MPC Key Strengths
MPC Key Strengths Well Positioned Organic Growth Projects Quality assets Detroit Heavy Oil Upgrade Project (DHOUP) Attractive Midwest market Increasing distillate yield Access to favorable export markets Debottlenecking crude logistics Integration through logistical assets Increasing
Slide 7: Focused and Integrated Operations
Focused and Integrated Operations Flexibility and integration advantage: Integrated six-refinery system One of the largest domestic… Petroleum pipeline networks based on volume moved Terminal operators Asphalt producers Private inland bulk liquid barge fleets Flexibility and Scale to A
Slide 8: MPC Strong Credit Profile and Liquidity
MPC Strong Credit Profile and Liquidity Historical Financial Summary Financial Policies $MM Year Ended 3 Mo. Ended March 31 Committed to Investment Grade profile 2011 2010 2009 2012 2011 Rating Current Total Revenues and Other Income 78,759 62,605 45,639 20,275 17,871 Agency MPC Rating S&P BBB/A-2
Slide 9: Impressive Safety and Environmental Record
Impressive Safety and Environmental Record Safety OSHA Recordable Incident Rate Days Away Rate (Employee and Contractor History) (Employee and Contractor History) 2.00 1.00 0.97 0.90 1.00 0.73 0.80 0.50 0.50 0.45 0.61 0.45 0.26 0.12 0.09 0.09 0.13 0.10 0.08 0.12 0.03 0.00 0.00 0.00 2004 2005 2006 20
Slide 10: Garyville Major Expansion (GME) Project
Garyville Major Expansion (GME) Project Garyville, LA refinery is last grassroots refinery built in the U.S. (1976) Base Garyville refinery, 2008 Solomon survey Best U.S. cash cost operating expense Second-best U.S. Energy Intensity Index $3.9 billion, excluding capitalized interest, GME P
Slide 11: Garyville: World-class Refinery – Worldwide Options
Garyville: World-class Refinery – Worldwide Options Blue Water Logistics New dock increased capacity by 40% Europe Supply Florida while increasing exports In addition to products, supports opportunity crudes, feedstocks and blendstocks Brown Water Logistics Import heavy Canadian crudes All
Slide 12: Attractive Midwest/PADD II
Attractive Midwest/PADD II Demand exceeds refining capacity in PADD II PADD IV Net imported ~13% of petroleum PADD V PADD II PADD I demand into PADD II, primarily from PADD III in 2011 Enhances margin opportunities PADD III Transportation premium embedded in PADD II product prices Percentage
Slide 13: Canadian Western Canada Crude Supply Forecast
Canada CAPP Western Canada Crude Supply Forecast Annual Growth from 2011 - 2030 MBPD Light Supply 24 8,000 Heavy Supply 184 7,000 6,000 5,000 MBPD 4,000 3,000 2,000 1,000 0 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 *Oil Sands Heavy includes some volumes of upgraded heavy sour crude oil
Slide 14: MPC Well Positioned to Capture Oil Sands Economics
Canada MPC Well Positioned to Capture Oil Sands Economics Hardisty ~$5.50/BBL Hardisty to ~$7.35/BBL Detroit Hardisty to USGC Detroit Value vs. USGC Refineries Chicago for Canadian Heavy Processing Wood Patoka $BBL River Laid-In Crude Cost 1.85 Cushing ~$1.85/BBL Houston to Chicago Higher Product Va
Slide 15: Detroit Heavy Oil Upgrade Project
Detroit Heavy Oil Upgrade Project Scope – Increases heavy oil capacity an additional 80,000 BPCD; including “difficult to process” Canadian crudes 28,000 BPCD delayed Coker 36,000 BPCD Distillate Hydrotreater (DHT) Crude capacity increases ~15,000 BPCD Strategic Focus – Positioned to capit
Slide 16: Options… Detroit Logistics
Options… #2 #1 Detroit Logistics 2 Enbridge Enbridge Canadian crude via multiple routes Stockbridge Virtually all world Detroit crudes available via Chicago Samaria pipelines from USGC Lima All gasoline production sold in regional market #3 Platte/Keystone Patoka Wood River #4 #5 Capline Mid V
Slide 17: MPC Refining Competitive Positioning
MPC Refining Competitive Positioning Coking Capacity Trend 160 140 135 120 100 108 108 110 MBCD 80 60 66 40 20 0 2009 2010 2011 2012 2013E Note: Excludes St. Paul Park Refinery that was sold on December 1, 2010 Increasing Coking Capacity Leads to Lower Feedstock Costs 17
Slide 18: Strategy – Maximize Price-Advantaged Crude Oil
Strategy – Maximize “Price-Advantaged” Crude Oil Canada Bakken Shale Utica Shale Cushing WTI Eagle Ford Shale Garyville Opportunity Crude Oils Multiple Opportunities 18
Slide 19: Canton/Midwest Opportunity
Utica Shale Canton/Midwest Opportunity Ohio Department of Natural Resources estimates 1.3 to 5.5 billion barrels of recoverable oil Canton and Catlettsburg refineries are both ideally located MPC has other infrastructure Canton Refinery in this area First-mover advantage Catlettsburg Refiner
Slide 20: Capacity to Receive Crude Oil/Condensate by Truck
Utica Shale Capacity to Receive Crude Oil/Condensate by Truck Canton Canton Available now: Temporary truck rack 1,000 BPD Available end of 2Q 2012: Permanent truck rack 12,000 BPD Truck to Canton Expandable to 24,000 BPD Truck to Catlettsburg Catlettsburg Available now: Permanent truck
Slide 21: Conceptual Planning for Growth
Utica Shale Conceptual Planning for Growth Truck to barge Canton Pipeline gathering Wellsville Steubenville Gathering System to Canton Barge to Catlettsburg MPC Refinery MPC Terminal MPC Pipeline Barge to Woodriver/Patoka Catlettsburg Barge Route Robinson Supply Current Infrastructure Creates Mu
Slide 22: Midwest Refineries’ Opportunity
Bakken Shale Midwest Refineries’ Opportunity Williston Basin Production: ~610 MBPD Williston Basin North Dakota: ~465 MBPD 2010 Year-end: 344 MBPD Canada 2009 Year-end: 242 MBPD 2008 Year-end: 202 MBPD 2005 Year-end: 104 MBPD South Dakota: ~5 MBPD Canada: ~75 MBPD North Dakota Mont
Slide 23: Texas City Refinery Opportunity
Eagle Ford Shale Texas City Refinery Opportunity Eagle Ford is a very light (40-50 API), sweet crude (0.2% sulfur) Currently being trucked to markets Pipelines are being built Dock facilities are being built as well to make it a “water borne” crude to capture Brent / LLS pricing as opposed t
Slide 24: MPC's Logistical Assets vs. Peers
MPC's Logistical Assets vs. Peers Tesoro/ Sunoco/ HollyFrontier/ Buckeye MPC Valero Tesoro Sun Magellan NuStar Holly Energy(c) Partners Logistics (a) Logistics(b) Pipeline Volume 2,215 563 125 2,269 179 1,247 778 1,348 (MBPD) * Pipeline Miles * 3,749 904 868 7,940 2,489 9,475 5,849 6,100 Terminals 8
Slide 25: Extensive Retail Network
Extensive Retail Network 83 63 Speedway 81 300 Fourth largest U.S.-owned/ 777 operated c-store chain Speedway 108 312 485 43 ~1,460 stores Brand 414 656 866 60 1 ~2 million customers/day 131 111 138 598 Located in seven states 174 311 127 138 263 1 Marathon brand Independent entreprene
Slide 26: Benefits of Retail Integration
Benefits of Retail Integration Ratable sales Optimized operations Refining Pipeline Terminal Biofuels blending base load Supply dislocation flexibility Reduced credit risk (Speedway) Speedway Connecting Pipelines Marketing Area Refineries Fully Integrated Downstream Business Light Pr
Slide 27: Merchandise Sales – Average Per Store
Merchandise Sales – Average Per Store 2,500 2,087 2,106 2,057 2,000 1,932 1,764 1,722 1,692 1,654 1,661 1,540 1,516 1,488 1,500 1,437 $ Thousands 1,270 1,142 1,098 1,055 1,088 1,075 1,083 999 991 1,001 1,015 954 958 1,000 898 928 856 742 778 706 500 0 2005 2006 2007 2008 2009 2010 2011 2012 LTM Spee
Slide 28: Light Product Volume – Average Per Store
Light Product Volume – Average Per Store 2,500 2,125 2,108 2,028 2,062 2,031 1,968 1,982 2,008 2,000 1,491 1,512 1,500 1,319 1,355 1,388 1,421 Thousands 1,243 1,306 1,289 1,230 1,269 1,255 1,205 1,186 1,152 1,114 1,000 821 836 859 854 869 871 782 806 500 0 2005 2006 2007 2008 2009 2010 2011 2012 LTM
Slide 29: Segment Income from Operations
Segment Income from Operations 4,500 Refining & Marketing 4,061 4,000 Speedway 3,500 Pipeline Transportation $ Millions 3,000 2,500 3,591 2,000 1,500 1,276 1,000 836 800 452 500 212 293 271 172 183 199 0 2009 2010 2011 Source: Company Reports Diversified Income Stream 29
Slide 30: MPC vs. Competitors
MPC vs. Competitors (Pre-Tax Adjusted Domestic Operating Income per Barrel of Crude Oil Throughput) 15 MPC Group Range 10 $/BBL 5 0 -5 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 March YTD Preliminary MPC’s Rank 3 3 2 1 2 3 7 2 1 5 3 1 3 1 2 Companies Ranked* 12 11 11
Slide 31: Strategic Performance - 2011
Strategic Performance - 2011 Completed successful spin-off from Marathon Oil Corporation Completed financing at separation Established strong balance sheet Increased quarterly dividend Produced strong operating income per barrel of crude throughput Generated significant free cash flow Ex
Slide 32: Strategic Direction - 2012
Strategic Direction - 2012 Complete Detroit Heavy Oil Upgrade Project Continue to optimize Garyville Pursue price-advantaged crude projects Initiate organic value-adding projects Grow Speedway and Brand sales volume Consider selective acquisitions to leverage existing portfolio Execute
Slide 33: Appendix
Appendix 33
Slide 34: Net Income
Net Income + 13% 1Q 2012 1Q 2011 Net Income $596 MM $529 MM Net Income per Diluted Share $1.70 $1.48 Net Income (Loss) Net Income (Loss) per Diluted Share $3,000 4Q 3Q $8 4Q 3Q 2Q 1Q $6 2Q 1Q $2,000 1,133 3.16 $4 Millions $1,000 $/Share 802 2.24 529 596 $2 $0 (75) 1.48 1.70 $0 (0.21) -$1,000 -$2 201
Slide 35: Net Income 1Q 2012 vs. 1Q 2011 Variance Analysis
Net Income 1Q 2012 vs. 1Q 2011 Variance Analysis $800 $700 141 17 (9) (37) (45) 596 $600 529 $500 Millions $400 $300 $200 $100 $0 1Q 2011 Refining & Speedway Pipeline Interest & Income Taxes 1Q 2012 Marketing Transportation Other 35
Slide 36: Refining & Marketing Indicative Gross Margin – 1Q 2012
Refining & Marketing Indicative Gross Margin – 1Q 2012 $1,800 94 26 (672) $1,600 528 $1,400 $1,200 201 1,165 (222) $ Millions $1,000 665 943 $800 $600 $400 323 $200 $0 *LLS *Sweet/ *WTI-LLS *LLS *Market Direct Other R&M Other R&M 6-3-2-1 Sour Diff. Spread Prompt vs. Structure Operating Gross Gross S
Slide 37: Refining & Marketing Segment Income Variance Analysis
Refining & Marketing Segment Income 1Q 2012 vs. 1Q 2011 Variance Analysis $1,500 198 24 (115) 54 (156) 239 (12) (91) $1,000 943 Millions 802 $500 $0 1Q 2011 *LLS *Sweet/ *WTI-LLS *LLS *Market Direct Other Other 1Q 2012 6-3-2-1 Sour Diff. Spread Prompt vs. Structure Operating Gross Crack Delivered Co
Slide 38: Speedway Segment Income Variance Analysis
Speedway Segment Income 1Q 2012 vs. 1Q 2011 Variance Analysis $70 $60 21 (8) 50 $50 $40 Millions 4 33 $30 $20 $10 $0 1Q 2011 Light Product Gross Merchandise Gross Other 1Q 2012 Margin Margin 38
Slide 39: Pipeline Transportation Segment Income Variance Analysis
Pipeline Transportation Segment Income 1Q 2012 vs. 1Q 2011 Variance Analysis $80 $60 51 (8) (1) Millions 42 $40 $20 $0 1Q 2011 Affiliates Other 1Q 2012 39
Slide 40: Total Company Cash Flow
Total Company Cash Flow 1Q 2012 $4,500 1,108 (761) $4,000 $3,500 (316) 3,079 (850) $3,000 Millions $2,500 (87) 32 2,205 $2,000 $1,500 $1,000 $500 $0 12/31/11 Operating Working Cash Capital Accelerated Dividends Other 3/31/12 Cash Cash Flow Capital Expenditures Share Paid Cash Balance before and Repu
Slide 41: Select Balance Sheet/Cash Flow Data
Select Balance Sheet/Cash Flow Data ($MM) 2012 2011 1Q 4Q As of quarter ended: Cash and cash equivalents 2,205 3,079 Total debt 3,321 3,307 Stockholders’ equity 9,216 9,505 Debt-to-total-capital ratio 26% 26% Last Twelve Months (LTM) EBITDA* 4,787 4,636 Debt to LTM EBITDA* 0.7x 0.7x Quarter to date:
Slide 42: 2Q 2012 Outlook
2Q 2012 Outlook Projected 2Q 2012 2Q 2011 Crude throughput 1.3 MMBD 1.2 MMBD Total throughput 1.4 MMBD 1.4 MMBD Percent of WTI-priced crude 27% 26% Direct operating costs in Refining & Marketing gross margin*: Planned turnaround and major maintenance $0.65 $0.65 Depreciation & amortization 1.26 1.26
Slide 43: Income
Income ($MM unless otherwise noted) 2011 2012 1Q 2Q 3Q 4Q 1Q Refining & Marketing segment income (loss) 802 1,260 1,711 (182) 943 Speedway segment income 33 80 85 73 50 Pipeline Transportation segment income 51 54 56 38 42 Corporate and other unallocated items (67) (69) (93) (87) (79) Income (loss)
Slide 44: EBITDA Reconciliation to Net Income
EBITDA Reconciliation to Net Income ($MM) 2011 2012 1Q 2Q 3Q 4Q 1Q Net Income (Loss) 529 802 1,133 (75) 596 Less: Related party net interest and other financial income 17 18 - - - Less: Net interest and other financial income (costs) (14) (10) (15) (22) (22) Add: Provision (benefit) for income taxes
Slide 45: Cash Provided from Operations Before Changes in Working Capital Reconciliation
Cash Provided from Operations Before Changes in Working Capital Reconciliation to Cash Provided from Operations ($MM) 2012 2011 (Quarter to date) 1Q 4Q Cash provided from operations 347 638 Less changes in working capital: Changes in current receivables (406) (545) Changes in inventories (32) 294 Ch
Slide 46: Capital Expenditures & Investments
Capital Expenditures & Investments ($MM) 2012 Budget 1Q 2012 Refining & Marketing 745 153 Speedway 353 11 Pipeline Transportation 230 38 Corporate and Other 91 8 Subtotal 1,419 210 Capitalized Interest 116 30 Total Capital Expenditures & Investments 1,535 240 46
Slide 47: MPC Crude Slate
MPC Crude Slate 100% 90% 21 23 22 24 23 25 31 80% Other Sweet 70% 60% Other Sour 50% 56 52 52 49 48 45 48 WTI Based 40% 30% 20% 25 26 27 29 30 10% 21 23 0% 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 47
Slide 48: Annual Price and Margin Sensitivities
Annual Price and Margin Sensitivities $ Millions (After Tax) LLS 6-3-2-1 Crack Spread* Sensitivity ~$300 (per $1.00/barrel change) Sweet/Sour Differential** Sensitivity ~$150 (per $1.00/barrel change) LLS-WTI Spread*** Sensitivity ~$65 (per $1.00/barrel change) Refined Product Wholesale Margin Sensi
Slide 49: MPC Financing Structure
MPC Financing Structure $3 billion in long-term debt – $750 million 5-year notes, 3.5% – $1 billion 10-year notes, 5.125 % – $1.25 billion 30-year notes, 6.5% $2 billion 4-year revolving credit facility ~$1 billion 3-year trade receivables securitization facility $2.205 billion balance sheet
Slide 50: 2012 Capital Spending Allocation
2012 Capital Spending Allocation* Environmental Regulatory Programs 3% Safety and Security 2% 8% Operating/Process Improvements 9% Capital Expansion/Growth/ Replacements Major Projects 12% 55% Other Refining and Transportation 5% Corporate ** 6% *Excludes capitalized interest **Primarily information
Slide 51: U.S. Distillate Exports Mitigate Static Domestic Demand
U.S. Distillate Exports Mitigate Static Domestic Demand Total U.S. distillate exports were 854 MBPD 2011 compared to U.S. Distillate Export Growth 138 MBPD in 2005. 2012 YTD 900 increased to 900 MBPD. Central & South America 800 Mexico 700 U.S. distillate exports to Latin Netherlands America hav
Slide 52: U.S. Net Product Exports
U.S. Net Product Exports 2,500 2,000 MARCH’S NET 1,500 EXPORTS WERE THE SECOND Thousand b/d 1,000 HIGHEST ON RECORD AND 500 ALMOST A - MILLION B/D ABOVE LAST (500) YEAR (1,000) Dec-08 Dec-09 Dec-10 Feb-11 Jun-11 Aug-11 Feb-09 Jun-09 Feb-10 Jun-10 Dec-11 Feb-12 Oct-08 Oct-09 Oct-10 Apr-11 Aug-09 Aug-
Slide 53: Market View
Market View Key Market Drivers MPC Outlook Economy Moderate expansion continues Distillate demand continues to lead Demand Growth 2012 gasoline demand down < 1% 2012 distillate demand up ~0.5% Crude Oil Supply Rapid increase in N. American production Global Refining Capacity Modernization and ration
Slide 54: Fully Integrated Downstream System
Fully Integrated Downstream System Refining and Marketing Six-plant refining network with 1,193,000 barrels per calendar day of crude oil refining capacity One of the largest wholesale suppliers of gasoline and distillate within our market area One of the largest producers of asphalt in the U.
Slide 55: 2011 Refinery Throughput and Consolidated Sales
2011 Refinery Throughput and Consolidated Sales Crude Saleable Throughput Product Sales 1,177 MBPD 1,602 MBPD 24.5 B GAL Foreign Term Gasoline Speedway 23% 921 12% Distillate Marathon Brand U.S./Canadian 468 17% Term 51% Asphalt Wholesale/Spot 57 58% Spot 26% Other Asphalt & Other 156 13% Other + 21
Slide 56: MPC Relative Refining Position
MPC Relative Refining Position (MBCD) U.S. Crude Refining Capacity (1) (#) # of U.S. Refineries (1) 3,000 15 2,097 12 11 1,950 2,000 1,826 10 1,410 7 7 1,193 6 6 6 955 843 5 5 1,000 755 665 5 439 330 3 1 0 0 BP Tesoro Exxon MPC Citgo Valero Sunoco Phillips Shell HFC Chevron Tesoro BP Exxon MPC Citgo
Slide 57: Responsible Care
Responsible Care® The Foundation for ALL that we do Health and Safety Profitability Investors Environmental Stewardship Honesty and Integrity Diversity Logistics Refining Stakeholder Engagement Marketing 57
Slide 58: Refinery Unit and Production Capacity – Garyville
Refining: Refinery Unit and Production Capacity (1) Garyville, Louisiana BPCD Unless Noted Garyville Crude 490,000 Vacuum Distillation 254,000 Coking 82,700 Catalytic Cracking 134,000 Catalytic Reforming 114,500 Catalytic Hydrocracking 88,400 Catalytic Hydrotreating 496,000 Alkylation 27,600 Polymer
Slide 59: Refinery Unit and Production Capacity – Catlettsburg
Refining: Refinery Unit and Production Capacity (1) Catlettsburg, Kentucky BPCD Unless Noted Catlettsburg Crude 233,000 Vacuum Distillation 113,000 Coking — Catalytic Cracking 98,800 Catalytic Reforming 49,900 Catalytic Hydrocracking — Catalytic Hydrotreating 258,000 Alkylation 20,000 Polymerization
Slide 60: Refinery Unit and Production Capacity – Robinson
Refining: Refinery Unit and Production Capacity (1) Robinson, Illinois BPCD Unless Noted Robinson Crude 206,000 Vacuum Distillation 68,000 Coking 27,600 Catalytic Cracking 51,800 Catalytic Reforming 76,000 Catalytic Hydrocracking 27,100 Catalytic Hydrotreating 177,700 Alkylation 11,900 Polymerizatio
Slide 61: Refinery Unit and Production Capacity – Detroit
Refining: Refinery Unit and Production Capacity (1) Detroit, Michigan BPCD Unless Noted Detroit Crude 106,000 Vacuum Distillation 52,300 Coking — Catalytic Cracking 30,900 Catalytic Reforming 20,400 Catalytic Hydrocracking — Catalytic Hydrotreating 100,400 Alkylation 4,800 Polymerization / Dimerizat
Slide 62: Refinery Unit and Production Capacity – Texas City
Refining: Refinery Unit and Production Capacity (1) Texas City, Texas BPCD Unless Noted Texas City Crude 80,000 Vacuum Distillation — Coking — Catalytic Cracking 55,600 Catalytic Reforming 10,500 Catalytic Hydrocracking — Catalytic Hydrotreating — Alkylation 13,800 Polymerization / Dimerization — Ar
Slide 63: Refinery Unit and Production Capacity – Canton
Refining: Refinery Unit and Production Capacity (1) Canton, Ohio BPCD Unless Noted Canton Crude 78,000 Vacuum Distillation 33,300 Coking — Catalytic Cracking 24,700 Catalytic Reforming 20,400 Catalytic Hydrocracking — Catalytic Hydrotreating 86,000 Alkylation 7,100 Polymerization / Dimerization 1,00
Slide 64: Refinery Capacity
Refinery Capacity BPCD NCI* Garyville 490,000 11.3 Catlettsburg 233,000 10.5 Robinson 206,000 10.6 Detroit 106,000 7.8 Texas City 80,000 8.4 Canton 78,000 9.1 Total 1,193,000 10.4** The Nelson Complexity Index is a construction cost-based measurement used to describe the investment cost of a refiner
Slide 65: Garyville Diesel Projects
Garyville Diesel Projects Scope – Modify Crude Unit, Hydrocracker and Distillate Hydrotreaters Strategic Focus – Increase finished ULSD production from gas oil Investment: ~$250 million over four years Estimated incremental annual EBITDA based on: 2006-10 Prices: ~$170 million 2011 Price
Slide 66: Garyville Gasoline and Diesel Export
Garyville Gasoline and Diesel Export Scope – Add gasoline export tank and expand diesel loading capacity to docks Strategic Focus – Increase export capability Investment: ~$25 million Estimated incremental annual EBITDA based on: 2010-11 Prices: ~$10 million Completion in late 2013 Expan
Slide 67: Catlettsburg No. 5 Vacuum Cut-point Improvement
Catlettsburg No. 5 Vacuum Cut-point Improvement Scope – Modify No. 5 Crude Unit during the 2014 turnaround Strategic Focus – Improve gas oil recovery and reduce purchased feedstocks Investment: ~$100 million over four years Estimated incremental annual EBITDA based on: 2006-10 Prices: ~$30
Slide 68: Robinson Unicracker Revamp
Robinson Unicracker Revamp Scope – Convert Hydrocracker to improve yields Strategic Focus – Take advantage of favorable diesel value over gasoline Investment: ~$75 million over four years Estimated incremental annual EBITDA based on: 2006-10 Prices: ~$20 million 2011 Prices: ~$24 million
Slide 69: Brent and WTI vs. U.S. Gulf Coast Gasoline
Brent and WTI vs. U.S. Gulf Coast Gasoline Product Prices are Set by Brent not WTI 145 140 BRENT Brent 135 WTI WTI 130 USGC GC Gasoline GASOLINE 125 120 DOLLARS PER BARREL 115 110 105 100 95 90 85 80 75 70 65 Source: NYMEX, ICE, MPC estimate 69
Slide 70: Distillate Production Profile
Distillate Production Profile 500 40% 450 38% 400 36% Distillate production MBPCD Distillate volume % of crude 350 34% 300 32% 250 30% 200 28% 150 26% 100 24% 50 22% 0 20% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 est est est est MPC Distillate MBCD MPC Distillate % U.S. Avg %
Slide 71: Diesel Production Profile
Diesel Production Profile (Excludes Kerosene and Jet Fuel) 500 40% 450 38% 400 36% Diesel volume % of crude Diesel production MBPCD 350 34% 300 32% 250 30% 200 28% 150 26% 100 24% 50 22% 0 20% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 est est est est MPC Diesel MBCD MPC Diesel
Slide 72: Lower 48 States Shale Plays
Lower 48 States Shale Plays Patoka Cushing MPC Refineries 72
Slide 73: U.S./Canada Key Existing and Planned Pipelines
U.S./Canada Key Existing and Planned Pipelines Edmonton Trans Hardisty Mountain Burnaby Anacortes Regina Cromer Clearbrook Montreal Superior Portland Sarnia Salt Lake City Casper Flanagan Chicago Chicap Mustang Steele City Gulf Coast Access Patoka Estimated MBPD Pipeline Completion Wood River 520-59
Slide 74: MPC Tactical Options: Keystone Pipeline
MPC Tactical Options Canada Keystone Pipeline Key Facts Owner – TransCanada Origin – Hardisty Destination – Wood River, Patoka, Illinois and Cushing, Oklahoma Diameter – 30” to Patoka; 36” from Steele City to Cushing Distance – 2,148 Miles Capital – $5.2 Billion Current capacity – 590
Slide 75: MPC Tactical Options: Keystone XL Pipeline
MPC Tactical Options Canada Keystone XL Pipeline Key Facts Owner – TransCanada Origin – Hardisty Destination – Port Arthur/Houston Diameter – 36” Distance – 1,980 Miles Capital – $7.8 Billion Status – Awaiting approval Estimated completion Cushing to USGC – 2H 2013 Hardisty to St
Slide 76: Cushing Fundamentals
Cushing Fundamentals What May Impact the Brent/WTI Spread KEYSTONE 590 Seaway Reversal Initial Capacity: ~150 MBPD May 17, 2012 Increase to: 400 MBPD 1Q 2013 KEYSTONE Keystone XL - Cushing to Gulf Coast 700 Estimated Completion: 2H 2013 Capacity: 700-830 MBPD CUSHING Enbridge Gulf Coas
Slide 77: Indicative Rail Costs Bakken to St. James
Bakken Shale Indicative Rail Costs Bakken to St. James Bakken Indicative Rail Costs ($/BBL) Gathering 2.25 Truck Transport 3.00 Railcar Loading 1.50 Rail Transportation 8.50 Railcar Lease 2.50 St. James Railcar Unloading 3.00 Total 20.75 Source: MPC Estimate 77
Slide 78: Indicative Rail Costs Bakken to East Coast
Bakken Shale Indicative Rail Costs Bakken to East Coast Bakken Indicative Rail Costs ($/BBL) Gathering 2.25 Truck Transport 3.00 Railcar Loading 1.50 Rail Transportation 10.00 Railcar Lease 2.50 Railcar Unloading 3.00 Barge Loading .75 Barge Transportation 1.00 Total 24.00 Source: MPC Estimate Rail
Slide 79: Indicative Barge Costs - South Texas to East Coast
Eagle Ford Shale Indicative Barge Costs - South Texas to East Coast Indicative Barge Costs ($/BBL) Trucking to Pipeline Hub 3.00 Pipeline to Houston 1.50 Barge Loading Fee .75 Barge Transportation 10.00 Total 15.25 Source: MPC Estimate Barge Cost to East Coast is Expensive 79
Slide 80: Garyville Opportunity Crudes
Garyville Opportunity Crudes NEW CRUDES PROCESSED IN 2011 Russia API Vac Canada Crude Origin Gravity Sulfur TAN Resid % Access Western Canada 21.8 4.04 2.3 38.3 Blend USA Iraq Kuwait Albian Muskeg Canada 21.6 3.81 1.6 36.0 Heavy Chad Frade Brazil 19.9 0.72 1.4 27.3 Venezuela Mexico Olende Gabon 20.7
Slide 81: Refined Product and Crude Spreads
Refined Product and Crude Spreads $50.00 $10.00 ULSD-3% Resid (left scale) ULSD-3% Resid ($/bbl) $40.00 LLS-Mars (right scale) $8.00 LLS-Mars ($/bbl) $30.00 $6.00 $20.00 $4.00 SPR SALE DISTORTED CRUDE SPREADS $10.00 $2.00 $0.00 $0.00 Q1-2010 Q2-2010 Q3-2010 Q4-2010 Q1-2011 Q2-2011 Q3-2011 Q4-2011 Q1
Slide 82: Midstream Integration and Flexibility
Midstream Integration and Flexibility Pipeline and barge logistics Focused on optimal refinery crude supply and product placement Destination choice in product markets Efficiency, flexibility, speed Terminal network Critical mass in key markets Key to E-10 expansion Speedway transpor
Slide 83: Gasoline Overview
Gasoline Overview Assured Sales of ~60% in 2011 (based on refinery gasoline yields) Wholesale Spot Benefits of Assured Sales Market • Ratable sales • Optimized operations - Refining, P/L, terminals • Supply dislocation flexibility • Reduce credit risk (Speedway) Low Investment High 2011 2015E v Grow
Slide 84: Convenience Store Industry Profile
Convenience Store Industry Profile 13% 146,341 c-stores in the U.S. (117,297 sell fuel) 5% Midwest - 22,563 c-stores 6% Southeast - 36,273 c-stores 13% 63% Highly fragmented 2010 total sales - $575.6 billion Average monthly sales / store - $395,623 2010 pre-tax profit - $6.5 billion St
Slide 85: Speedy Rewards Loyalty Program Increasing Membership
Speedy Rewards Loyalty Program 4 Increasing Membership Active Members (MM) 3 2 1 2005 2006 2007 2008 2009 2010 2011 Industry-leading loyalty program Customers earn points on every purchase Customers redeem points for free merchandise and fuel discounts Over 3 million active Speedy Rewards me
Slide 86: Speedway vs. Public Peers - 2011 Light Product Sales
Speedway vs. Public Peers - 2011 300 Light Product Sales Independent Refiners Average 157.1 M Gal/Store/Month 250 200 179.4 Public C-Store 150 Average 97.8 100 50 0 Casey's Couche-Tard Pantry Susser Speedway Valero Murphy Sunoco Tesoro Delek Western Refining 50 Light Product Margin Independent Refin
Slide 87: Speedway vs. Public Peers - 2011 Merchandise Sales
Speedway vs. Public Peers - 2011 Merchandise Sales 200 178.5 Independent Refiners Public C-Store Average 95.4 $M/Store/Month 150 Average 110.7 100 50 0 Casey's Couche-Tard Pantry Susser Speedway Valero Murphy Sunoco Tesoro Delek Western Refining Public C-Store Merchandise Margin 50 43.9 Average 38.7
Slide 88: Speedway Sales and Margin
Speedway Sales and Margin 4 Light Product Volume Light Product Gross Margin 600 3.23 3.30 2.94 3 398 B Gallons $ Millions 400 333 384 2 1 0.71 200 77 1.0 3.7 (1.2) (1.2) 10.30 12.07 13.08 0 10.96 0 2009 2010 2011 2012* 2009 2010 2011 2012* (Same Store % inside bars) (Cents per gallon inside bars) 4
Slide 89: Brand Overview
Brand Overview 5,000 Light Product Sales Consistent Growth Vehicle 4,000 Millions of Gallons 3,000 163 million net new gallons in 2011 2,000 2011 gasoline sales volume up 3.6% 1,000 2011 distillate sales volume up 6.5% 0 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 89
Slide 90: Pipeline Transportation Segment Revenue Generated from Third Parties
Pipeline Transportation Segment Revenue Generated from Third Parties 100% 80% 60% 40% 20% 16% 17% 10% 12% 12% 12% 0% 2007 2008 2009 2010 2011 2012* *YTD through March 90
Slide 91: Experienced Board of Directors
Experienced Board of Directors Name Title Evan Bayh Former Senator from and Governor of Indiana David A. Daberko* Former Chairman and CEO – National City Corporation William L. Davis* Former Chairman and CEO – RR Donnelly & Co Gary R. Heminger President and CEO – MPC Donna A. James Corporate Directo
Slide 92: Experienced Management Team
Experienced Management Team Experienced Team with Extensive Industry Experience Years of Name Service* Title Gary R. Heminger 37 President and Chief Executive Officer Pamela K. M. Beall 16 Vice President – Investor Relations and Gov. & Public Affairs Richard D. Bedell 32 Senior Vice President – Refi
Slide 93: Market Indicators Used in Project EBITDA Calculations
Market Indicators Used in Project EBITDA Calculations 2011 2006 - 2010 West Texas Intermediate 3-2-1 crack spread 23.31 10.68 Light Louisiana Sweet 3-2-1 crack spread 6.05 8.05 Arab Light 3-2-1 crack spread 11.16 14.03 Arab Medium 4-2-1-1 crack spread 7.71 9.54 Light Louisiana Sweet 6-3-2-1 crack sp