Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Q3 2015 Earnings Presentation
23 slides from Marathon Petroleum's earnings presentation, Oct 29, 2015
Slide 1: Third Quarter 2015 Earnings Conference Call and Webcast
Third Quarter 2015 Earnings Conference Call and Webcast October 29, 2015
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”) and MPLX LP (“MPLX”). These forward-looking statements relate to, among other things, expectations, estimates and projection
Slide 3: Highlights
Highlights Reported third-quarter earnings of $948 million Converted nearly 1,000 of 1,245 acquired sites to the Speedway brand and operating system since close Cancelled $2.2 billion Residual Oil Upgrade Expansion (ROUX) project Returned $327 million of capital to shareholders, including $1
Slide 4: 3Q 2015 Earnings
3Q 2015 Earnings* 3Q 2015 3Q 2014 Earnings $948 MM $672 MM Earnings per Diluted Share** $1.76 $1.18 Earnings Earnings per Diluted Share** 3,000 $2,665 6 $2,524 $4.90 2,500 5 $4.39 798 948 $/Share 2,000 4 1.43 1.76 $MM 1,500 672 3 826 1.18 1.51 1,000 2 500 855 1 1.48 891 1.62 0 199 0 0.34 2014 2015 2
Slide 5: Earnings: 3Q 2015 vs. 3Q 2014 Variance Analysis
Earnings* 3Q 2015 vs. 3Q 2014 Variance Analysis 1,400 124 3 1,200 486 (126) (20) 1,000 948 (188) (3) 800 $MM 672 600 400 200 0 3Q 2014 Refining & Speedway Pipeline Items not Interest and Income Noncontrolling 3Q 2015 Marketing Transportation Allocated to Other Financing Taxes Interests Segments Cost
Slide 6: Refining and Marketing Segment Income
Refining and Marketing Segment Income 3Q 2015 vs. 3Q 2014 Variance Analysis 2,000 226 1,800 638 27 1,600 31 (19) (25) 1,457 1,400 (325) (67) 1,200 $MM 1,000 971 800 600 400 200 0 3Q 2014 *LLS *Sweet/ *LLS/WTI *LLS *Market Other Direct Other 3Q 2015 6-3-2-1 Sour Diff. Diff. Prompt Structure Gross Ope
Slide 7: Speedway Segment Income
Speedway Segment Income 3Q 2015 vs. 3Q 2014 Variance Analysis 300 250 16 243 48 (6) 200 66 $MM 150 119 100 50 0 3Q 2014 Acquired Locations* Light Product Merchandise Other 3Q 2015 Gross Margin Gross Margin *Refers to Hess’ retail operations and related assets acquired September 30, 2014 7
Slide 8: Pipeline Transportation Segment Income
Pipeline Transportation Segment Income 3Q 2015 vs. 3Q 2014 Variance Analysis 90 4 80 11 72 70 69 (12) 60 50 $MM 40 30 20 10 0 3Q 2014 Transportation Pipeline Operating Expenses & 3Q 2015 Revenue Affiliates Other* *Includes $4 MM of acquisition costs incurred in connection with the proposed MarkWest
Slide 9: Total Company Cash Flow
Total Company Cash Flow 3Q 2015 3,500 1,458 3,000 (389) (6) 2,500 (585) 12 2,044 2,000 1,881 $MM (327) 1,500 1,000 500 0 6/30/2015 Operating Working Long-term Cash Capital Return of Other 9/30/2015 Cash Cash Flow Capital Debt, Net Expenditures Capital to Cash Balance before and Shareholders* Balance
Slide 10: Substantial Dividend Growth Since Spinoff
Substantial Dividend Growth Since Spinoff 0.35 +28% 350 $0.32 0.30 300 +19% $0.25 0.25 +20% 250 $0.21 +40% $/Share 0.20 200 $MM $0.175 $171 $171 0.15 +25% $141 $138 $136 $136 150 $0.125 $119 $116 $116 $113 $129 $126 $123 $122 $0.10 $89 $87 $85 0.10 $71 100 0.05 50 0.00 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 11: Select Balance Sheet / Cash-Flow Data
Select Balance Sheet / Cash-Flow Data ($MM) 2015 2014 3Q 2Q 1Q 4Q As of quarter ended: Cash and cash equivalents 2,044 1,881 2,078 1,494 Total debt(a) 6,692 6,698 6,704 6,602 Equity 12,925 12,290 11,980 11,390 Debt-to-total-capital ratio (book) 34% 35% 36% 37% Last Twelve Months (LTM) EBITDA 7,205 6
Slide 12: 4Q 2015 Outlook
4Q 2015 Outlook Other Total Corporate Percent of Turnaround Depreciation Other Crude Charge/ Total Direct and Other WTI-priced and Major and Manufacturing Throughput* Feedstocks Throughput* Operating Unallocated Crude Maintenance Amortization Cost** Throughput* Costs Items*** in MBD Refinery Direct
Slide 13: Appendix
Appendix 13
Slide 14: Focused Return of Capital to Shareholders
Focused Return of Capital to Shareholders LTM Ended 9/30/15 5,000 Dividends and share 4,500 repurchases ~1.5x of Adj. Free Cash Flow*** 4,000 3,500 Dividends and share repurchases* 3,000 2,036 $1,378 Adjusted $MM Free Cash Flow*** Investments** 2,500 2,000 3,641 Net cash provided by operations 1,500
Slide 15: Capital Expenditures & Investments
Capital Expenditures & Investments ($MM) 2015 Budget 3Q 2015 YTD Refining & Marketing 1,042 215 550 Midstream 234 83 184 Total Refining & Marketing Segment 1,276 298 734 Speedway 452 130 275 Pipeline Transportation 659 114 352 Corporate and Other 140 33 95 Total Capital Expenditures & 2,527 575 1,45
Slide 16: Reconciliation: Adjusted Free Cash Flow
Reconciliation Adjusted Free Cash Flow to Net Cash Provided by Operations ($MM) 2014 2015 LTM (For the Quarter) 4Q 1Q 2Q 3Q Net cash provided by operating activities 388 1,190 994 1,069 3,641 Additions to property, plant and equipment (528) (389) (375) (513) (1,805) Acquisitions 10 10 Investments (7
Slide 17: Earnings
Earnings ($MM unless otherwise noted) 2014 2015 1Q 2Q 3Q 4Q 1Q 2Q 3Q Refining & Marketing segment income 362 1,260 971 1,016 1,316 1,206 1,457 Speedway segment income 58 94 119 273 168 127 243 Pipeline Transportation segment income 72 81 69 58 67 79 72 Corporate and other unallocated items (67) (61)
Slide 18: Reconciliation: EBITDA to Net Income
Reconciliation EBITDA to Net Income Attributable to MPC ($MM) 2014 2015 1Q 2Q 3Q 4Q 1Q 2Q 3Q Net Income attributable to MPC 199 855 672 798 891 826 948 Less: Net interest and other financial inco income (costs) (46) (48) (50) (72) (81) (64) (70) Add: Net income attributable to inco noncontrolling in
Slide 19: Cash Provided from Operations Before Changes in Working Capital Reconciliation
Cash Provided from Operations Before Changes in Working Capital Reconciliation to Net Cash Provided by Operations ($MM) 2014 2015 (For the Quarter) 4Q 1Q 2Q 3Q Net cash provided by operations 388 1,190 994 1,069 Less changes in working capital: Changes in current receivables 1,218 691 (512) 752 Chan
Slide 20: Refining and Marketing Segment Income: 3Q vs 2Q 2015
Refining and Marketing Segment Income 3Q 2015 vs. 2Q 2015 Variance Analysis 2,000 89 48 157 323 9 1,457 1,500 (36) (179) (160) 1,206 $MM 1,000 500 0 2Q 2015 *LLS *Sweet/ *LLS/WTI *LLS *Market Other Direct Other 3Q 2015 6-3-2-1 Sour Diff. Diff. Prompt Structure Gross Operating Crack vs. Delivered Mar
Slide 21: Refining and Marketing Indicative Gross Margin
Refining and Marketing Indicative Gross Margin 3Q 2015 3,500 176 3,037 3,000 122 76 527 2,500 (6) 2,142 2,000 $MM (1,213) 1,457 1,500 (367) 1,000 500 0 *LLS *Sweet/ *LLS/WTI *LLS *Market Other R&M Direct Other R&M 6-3-2-1 Sour Diff. Diff. Prompt vs. Structure Gross Gross Operating Segment Crack Deli
Slide 22: MPLX Distributions and Sales Proceeds to MPC
MPLX Distributions and Sales Proceeds to MPC* 40 $31.3 30 $27.3 $24.1 $20.7 $MM $18.5 $19.7 20 $15.1 $15.8 $16.6 $17.5 $9.8 10 0 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 LP Distributions GP Distributions, including IDRs Cash Distribution and Asset Sales 2013 2014 2015 Proceeds from MPL
Slide 23: Marathon
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