Mplx Lp · NYSE:MPLX
Mplx Lp — Barclays CEO Energy Power Conference 2016
85 slides from Mplx Lp's conference presentation, Sep 6, 2016
Slide 1: Barclays CEO Energy Power Conference
Barclays CEO Energy Power Conference Gary R. Heminger Chairman, President and Chief Executive Officer September 6, 2016
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: Delivering for Investors
Delivering for Investors 3 Scale, Diversity and Stability of Cash Flow Increased our refining capacity in the geographically critical U.S. Gulf Coast region Doubled Speedway’s retail footprint Expanded into midstream natural gas liquids business stable cash flow Tripled Provided Significant Returns
Slide 4: Creating a More Diversified Portfolio
43% 23% 16% 18% 87% 8% 5% Creating a More Diversified Portfolio 4 2011 EBITDA Speedway R&M Speedway Midstream(a) R&M(b) 2Q 2016 LTM EBITDA Midstream R&M MLP-Eligible(c) (a)Includes MarkWest EBITDA post merger Dec 4, 2015 (b)Excludes estimated EBITDA from MLP-eligible assets (c)Represents estimated E
Slide 5: Balanced Approach to Returning Capital and Investment since July 2011
Balanced Approach to Returning Capital and Investment since July 2011 5 $9.9 B $15.5 B Strategic investments providing long-term stable cash flows $7.4 B returned to shareholders through repurchases, representing 28% of shares outstanding Six dividend increases resulting in a 29% CAGR Capital
Slide 6: Positive Market Fundamentals
18 23 28 33 38 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC D ay s PADD 2 and 3 Distillate Days of Supply (Including Exports) 5-Year Range (11-15) 5-Year Average (11-15) 2015 2016* 25 27 29 31 33 35 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC D ay s PADD 2 and 3 Gasoline Days of Supply (Inclu
Slide 7: Positive Market Fundamentals Cont’d.
Positive Market Fundamentals Cont’d. 7 Continued strong U.S. refined product exports – U.S. refineries have cost advantages and are more complex Heavy and sour crude oil differentials remain favorable Crude differentials expected to improve as commodity prices strengthen Natural gas prices s
Slide 8: Delivering Top Tier Capital Return Yield Since Spin
Delivering Top Tier Capital Return Yield 8 Since Spin 12% 13% 13% 9% 10% 16% 38% 21% 31% 27% 21% 0% 10% 20% 30% 40% 50% 60% MPC HFC VLO TSO PSX Dividend Yield Special Dividend Yield Share Repurchase/Share Yield 50% 50% 36% 44% 31% Note: Total Capital Return Yield: July 1, 2011 to June 30, 2016 divid
Slide 9: Refining & Marketing Segment Transformation
Refining & Marketing Segment Transformation Increased crude oil refining capacity by ~700 MBPCD with Galveston Bay acquisition and investments at existing facilities Completed refining margin-enhancing projects, focused on increasing exports, light crude and condensate processing capabilities an
Slide 10: MPC vs. Peers - Operating Income per Barrel
Source: Company Reports -5 0 5 10 15 20 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 $ /BB L MPC’s Rank Competitor Range Companies Ranked** *Adjusted domestic operating income per barrel of crude oil throughput **Current companies ranked: BP, CVX, HF
Slide 11: Operational Highlights
Operational Highlights The wr i Environmental Protection Agency's recognitions awarded me oie received ‘Amenicon ry SS Contiicates of Ex ONS & Cortiicaves of Hi 2° awards © Coniiomes of Achievernant: chai ilability* eet Capacity amis 204 ais SESS MPC earned the
Slide 12: Galveston Bay Refinery Performance Improvements Since Acquisition
Galveston Bay Refinery Performance Improvements Since Acquisition Lowered operating costs 15% since 2014 Lowered routine maintenance costs 26% since 2014 due to improved reliability and cost efficiencies Target to lower operating costs an additional 15% by 2020 12 0 0.1 0.2 0.3 0.4 0.5 2013 20
Slide 13: Optimization of South Texas Asset Repositioning (STAR) Program
Optimization of South Texas Asset Repositioning (STAR) Program Potential reduction of total planned investment from $2 B to $1.5 B Project scope and investment return profile substantially preserved Project scope: – Increase residual oil (resid) processing – Revamp crude unit – Increase ULSD p
Slide 14: Enhancing Refining Margins
Enhancing Refining Margins 14 Planned Investments of ~$475 MM Contributing ~$250 MM EBITDA Garyville FCC/Alky – ~$220 MM investment, ~$90 MM EBITDA per year – ~25% IRR, late 2016 est. completion Galveston Bay export capacity expansion – ~$95 MM investment, ~$50 MM EBITDA per year – +30 MBD ULSD,
Slide 15: Speedway Segment Transformation
2013 2014 2015 2012 2011 2016 Speedway Segment Transformation Doubled retail locations count to ~2,770, expanding to the East Coast and Southeast markets Expanded presence to Pennsylvania and Tennessee Completed conversion of Hess stores ahead of schedule with ~$150 MM in synergies recognized
Slide 16: Speedway Exceeding Expected Acquisition-Related Synergies
Speedway Exceeding Expected Acquisition-Related Synergies Continuing to focus on marketing enhancements opportunities Completed 93 remodels in 2Q 2016, 454 to date at acquired locations Reduced overall light product breakeven by ~10% in 2Q 2016 compared to 2Q 2015* 16 20 75 120 155 190 225 0 5
Slide 17: Speedway - Top Tier Performer in Convenience Store Industry
Speedway - Top tier Performer in Convenience Store Industry 17 0 10 20 30 40 Speedway Sunoco Casey's CST Couche-Tard Murphy USA Delek Alon USA Western Refining $ M /S tore/M o nt h EBITDA 0 25 50 75 100 Sunoco Speedway CST Casey's Couche-Tard Murphy USA Western Refining Delek Alon USA $ M /S tore/M
Slide 18: Speedway Complements MPC’s Integrated Network
Speedway Complements MPC’s Integrated Network ~6 B gallons of light product volumes annually MPC’s most ratable distribution channel – Allows for optimization of refining, pipeline and terminal operations – Supports infrastructure build out for Marathon Brand and Wholesale sales – Creates various
Slide 19: Midstream Segment Transformation
2013 2014 2015 2012 2011 2016 Midstream Segment Transformation Formed MPLX and accelerated growth strategy creating a large-cap, diversified MLP Premier footprint of crude oil and refined products pipelines and terminals Acquired premier position in prolific Marcellus/Utica region with MarkWes
Slide 20: Equity Participation in Bakken Pipeline System
Equity Participation in Bakken Pipeline System 20 Announced agreement to participate in the Dakota Access Pipeline (DAPL) and the Energy Transfer Crude Oil Pipeline (ETCOP) projects, collectively referred to as the Bakken Pipeline System – Expected 3Q 2016 closing and end of 2016 pipelines ready f
Slide 21: MPLX Creates Significant Value and Provides Stable Cash Flows
MPLX Creates Significant Value and Provides Stable Cash Flows Growth-oriented, diversified MLP with high- quality strategically located assets with leading midstream position Robust portfolio of organic growth opportunities Significant commercial synergies and opportunities across value chain
Slide 22: MPLX - Focus on Solutions to Enhance Northeast NGL Market
MPLX - Focus on Solutions to Enhance Northeast NGL Market Lead the development of infrastructure to link supply of Northeast NGLs with demand markets and enhance value for producer customers 22 Ethane Largest fully integrated de-ethanization system in Marcellus and Utica shales Access to all maj
Slide 23: MPC’s Substantial MLP-Qualifying Asset Portfolio
MPC’s Substantial MLP-Qualifying Asset Portfolio 23 ~ $1.4 B of estimated annual EBITDA ● 59 MMBBL storage (tanks and caverns) ● 25 rail loading racks and 26 truck loading racks; 7 owned and 11 non-owned docks ● 2 condensate splitter investments ● 21 owned and 2,189 leased ● 793 general service; 1,1
Slide 24: 2016 Capital Outlook
24 2016 Capital Outlook – $3.0 B* MPC – $1.9 B Refining & Marketing, excluding Midstream – $1,045 MM Midstream** – $440 MM Speedway – $310 MM Corporate & Other – $95 MM MPLX – $1.1 B Growth $1,050 MM*** Maintenance $61 MM 23% 13% 15% 36% 10% 3% Speedway Midstream* MPLX Refining Margin En
Slide 25: Our Priorities for Value Creation
Our Priorities for Value Creation 25 Maintain Top Tier Safety and Environmental Performance Grow Higher Valued and Stable Cash-flow Businesses Balance Capital Returns with Value-enhancing Investments Enhance Margins for Our Refinery Operations
Slide 26: MPC’s Strong Liquidity and Capitalization
MPC’s Strong Liquidity and Capitalization Committed to maintaining investment grade credit profile for both MPC and MPLX Operate with prudent leverage and strong liquidity through cycle Focus on capital allocation, prioritizing projects with superior return and stable cash flow profiles Prov
Slide 27: MPC’s Proven Track Record
MPC’s Proven Track Record 27 + + + + = Galveston Bay Acquisition Hess Retail Acquisition MarkWest Merger 28% Repurchased of Outstanding Shares 260% Increase in Dividend of Current Market Cap and Grew Scale, Diversification & Quality of Assets Returned ~45%
Slide 28: Appendix
Appendix
Slide 29: Fundamentals of MPC’s Business
Fundamentals of MPC’s Business 29 As of June 30, 2016 See appendix for legend Strategically located assets and fully integrated system provides optionality and flexibility Gasoline demand continues to be strong ~70 percent assured sales of gasoline production U.S. refiners have a sustained e
Slide 30: Returning Capital to Shareholders Through Share Repurchases
Returning Capital to Shareholders Through Share Repurchases 30 0 2,000 4,000 6,000 8,000 $ M M Cumulative Share Repurchases $10 B share repurchases authorized $7.36 B returned to shareholders through repurchases 28% of June 30, 2011 shares outstanding repurchased Since July 2011
Slide 31: Refining Increasing EBITDA Through Continuous Process Improvements
Refining Increasing EBITDA Through Continuous Process Improvements Low or no investment projects Focus on technical excellence Improvements in process unit performance EBITDA improvement of approximately $800 MM between 2012 and 2015 31 0 200 400 600 800 1,000 2013 2014 2015 M a rg in I m p
Slide 32: Galveston Bay Process Improvements and Synergies
0 100 200 300 400 500 600 700 2013 2014 2015 2016E 2019E $ M M EBITDA Improvement Galveston Bay Process Improvements and Synergies* Process improvements – Unit optimization – Improved unit yields – Bottlenecks removed – Catalyst changes Synergy capture – Crude optimization – Process unit utiliza
Slide 33: Key Strengths Balanced Operations
Key Strengths 33 Balanced Operations 40% 60% Crude Oil Refining Capacity PADD II PADD III 61% 39% Crude Slate Sour Crude Sweet Crude ~70% ~30% Assured Sales Wholesale and Other Sales Assured Sales of Gasoline Production (Speedway + Brand + Wholesale Contract Sales) As of June 30, 2016 2Q 2016 2Q 201
Slide 34: Balance in Refining Network
Balance in Refining Network Midwest Capacity 710,000 BPCD Louisiana Capacity 539,000 BPCD Texas Capacity 545,000 BPCD 34 *Weighted Average NCI The Nelson Complexity Index is a construction cost-based measurement used to describe the investment cost of a refinery in terms of the process operations be
Slide 35: ENERGY STAR Program
ENERGY STAR Program ENERGY STAR labels for refining industry began in 2006 47 labels awarded during 11 labeling years 9 labels to Phillips 66/ConocoPhillips 1 label to ExxonMobil 1 label to former MPC site in St. Paul Park, Minnesota Remaining 36 labels to MPC refineries 35 35 Operating
Slide 36: Distillate Leading World Liquids Demand
0 20 40 60 80 100 120 M M B D Distillate Leading World Liquids Demand Average product demand growth of 1.6 MMBD in 2016-2017 Distillate remains the growth leader through 2025 Heavy fuel oil continues its structural decline 36 Sources: BP Statistical Review of World Energy (Actual), MPC Economi
Slide 37: Distillate Leads U.S. Domestic Petroleum Fuels Demand
Distillate Leads U.S. Domestic Petroleum Fuels Demand 37 0 1 2 3 4 5 6 7 8 9 10 MMB D Compounded Annual Growth Rates 2015 vs. 2030 Sources: U.S. Energy Information Administration (EIA), MPC Gasoline Gasoline ex ethanol Distillate Jet Fuel Resid -1.1% -1.1% +1.4% +0.5% -2.8% Forecast Actual Gasolin
Slide 38: U.S. Refiners have a Sustained Export Advantage
Region 2015 Utilization Rate North America 88% MPC 99% Europe 86% Former Soviet Union 82% Asia 81% Middle East 79% Latin America 74% Africa 71% 0 2 4 6 8 10 12 14 16 18 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 $/ M M B tu Natural Gas Price Comparison Japanese L
Slide 39: Peer-leading Alkylation and Reforming Capacity
Peer-leading Alkylation and Reforming Capacity Lighter crude runs produce more light naphtha, increasing demand for octane Shale crudes yield a lower quality reformer feed Octane generation capacity has been relatively steady, incremental capacity required in the future 39 424 337 368 308 202
Slide 40: North American Crude Production
0 2 4 6 8 10 12 14 16 2010 2012 2014 2016 2018 2020 M M B D North American Crude Production Shale production challenged in current price environment Drilling improvements and efficiency gains have lessened near-term declines Long-term production growth is still expected 40 Canada U.S. Shale Fo
Slide 41: U.S. Natural Gas Production Growth Largely from Shale
Alaska Coal-bed Methane Tight Gas Shale Gas 0 2 4 6 8 10 12 14 16 18 20 2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 2030 M M B O E D L48 Onshore Conventional L48 Offshore U.S. Natural Gas Production Growth Largely from Shale U.S. natural gas supply to grow by 5.4 MMBOED (29 BCFD) by 2030 2
Slide 42: U.S. NGL Volume Growth Creates a Need for Incremental Infrastructure
Nat. Gasoline Butanes Propane Purity Ethane 0 1 2 3 4 5 6 7 2005 2010 2015 2020 2025 2030 M M B D U.S. NGL Volume Growth Creates a Need for Incremental Infrastructure 42 Forecast Actual Source: MPC 2016 LT Forecast Gulf Coast ethylene crackers are being built, adding 700 MBD to demand for ethane b
Slide 43: Key North American Crude Oil Pipelines
Key North American Crude Oil Pipelines Sources: Publicly available information 43 *Capacity has not been announced Planned Pipelines MBPD In-Service Date Grand Mesa 130 2016 Saddlehorn 190 2016 Dakota Access 570 2016 ETCO 570 2016 Bayou Bridge (Lake Charles to St. James) TBD* 2017 Diamond 200 2017 M
Slide 44: Galveston Bay-Texas City World-Class Refining Complex
Galveston Bay-Texas City World-Class Refining Complex 44 Integrated Galveston Bay-Texas City Refinery Post-STAR BPCD Unless Noted Galveston Bay* Crude 585,000 Vacuum Distillation 225,200 Residual Hydrocracking 94,300 Coking 29,800 Catalytic Cracking 184,800 Catalytic Reforming 124,300 Catalytic Hydr
Slide 45: Capitalizing on Growing U.S. Finished Product Exports
0 50 100 150 200 250 300 350 2010 2011 2012 2013 2014 2015 M B D MPC Finished Product Exports 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2010 2011 2012 2013 2014 2015 M B D Gross U.S. Finished Product Exports Other U.S. MPC Capitalizing on Growing U.S. Finished Product Exports 45 Sources: MPC,
Slide 46: Speedway Strong and Consistent Growth
Speedway Strong and Consistent Growth 46 3,027 3,146 3,942 6,038 0 2,000 4,000 6,000 8,000 2012 2013 2014 2015 M M G a llo n s Gasoline and Distillate Sales Volume 13.18 14.41 17.75 18.23 0.00 5.00 10.00 15.00 20.00 2012 2013 2014 2015 ¢ /Ga llo n Gasoline and Distillate Gross Margin(a) 795 825 975
Slide 47: Speedway: Pursuing Attractive and Accretive Acquisitions
Speedway: Pursuing Attractive and Accretive Acquisitions Leverage MPC’s supply and logistical network – Increase assured sales – Optimize terminal utilization Fill market voids in Speedway footprint – High quality assets – Continue focus in Pennsylvania and Tennessee – Growth opportunities in Ge
Slide 48: Capitalizing on Diesel Demand Growth
Capitalizing on Diesel Demand Growth Trucking remains a dominant mode of transportation U.S. freight volumes expected to increase by 29% Diesel demand growth expected to outpace gasoline Build out commercial fueling lane network –~150 CFL locations 48 Source: American Trucking Association
Slide 49: Following Through on Goals for Acquired Locations
Following Through on Goals for Acquired Locations Invest ~$570 MM in conversions, remodels and maintenance Converted stores to Speedway brand and technology platforms Remodel approximately 700 locations to drive marketing enhancements Generate $365 MM of annual EBITDA in 2017 Achieve $190
Slide 50: Focus on Improving Light Product Breakeven
Focus on Improving Light Product Breakeven Measure of operating efficiency and merchandise contribution to total expense Potential to drive substantial value in the business over time 7.13 -1 1 3 5 7 9 11 13 2005 2013 Lig h t P ro d u ct B re ak ev en ( cp g) 2.56 12.39 Each 1.00 cent per gallon
Slide 51: Speedway and Hess Side-by-Side Comparison
Speedway and Hess Side-by-Side Comparison Speedway generates an incremental $17,300 of merchandise margin per store per month ~$250 MM of additional annual merchandise margin potential across Hess retail Hess(a) Speedway(b) Company Operated Sites 1,255 1,478 Fuel Sales (gallons/store/month) 198,
Slide 52: Top Tier Performance
0 100 200 300 Murphy USA Speedway CST Sunoco Couche-Tard Delek Western Refining Casey's Alon USA M Ga l/ St o re /M o n th Light Product Volume 0 50 100 150 200 Murphy USA Sunoco Speedway Couche-Tard Casey's CST Western Refining Delek Alon USA $ M /St o re /M o n th Merchandise Sales Top Tier Perfor
Slide 53: About MPLX
About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary businesses – Logistics & Storage includes transportation and storage of crude oil, refined products and other hydrocarbon-based products – Gathering & Processin
Slide 54: MPLX Key Investment Highlights
MPLX Key Investment Highlights High standard for safety and environmental stewardship Premier assets in highly productive resource plays Long-term integrated relationships with our producer customers Strategic relationship with MPC Strong base business with robust growth opportunities – Le
Slide 55: MPLX and MPC are Aligned
2% GP interest MPLX and MPC are Aligned MPC views MPLX as integral to its operations and is aligned with its success and incentivized to grow MPLX MPC owns 22% LP interest and 100% of MPLX’s GP interest and IDRs 100% interest r 100% interest Public Preferred Common Class B 76% LP interest 100% i
Slide 56: MPLX Logistics & Storage
MPLX Logistics & Storage 56 High-quality, well-maintained assets that are integral to MPC – 1,008 miles of common carrier crude oil pipelines – 1,900 miles of common carrier product pipelines – Barge dock with approximately 78,000 BPD throughput capacity – Four tank farms with approximately 4.5 MM
Slide 57: MPLX - Attractive Portfolio of Organic Growth Capital
MPLX - Attractive Portfolio of Organic Growth Capital Logistics & Storage Segment Cornerstone and Utica Build-out Industry solution for Utica liquids Pipeline and Tank Farm Expansions MPC and third-party logistics solutions Robinson Butane Cavern MPC shifting third-party services to MPLX and o
Slide 58: Executing a Comprehensive Utica Strategy
Executing a Comprehensive Utica Strategy 58 Links Marcellus and Utica condensate and natural gasoline with Midwest refiners Allows diluent movements to Canada Leverages existing MPC/MPLX pipelines and right of way Phased infrastructure investment – 16-inch Cornerstone Pipeline and Hopedale p
Slide 59: Logistics & Storage Contract Structure
69% 23% 8% MPC Commited MPC Additional Third Party MPLX - Logistics & Storage Contract Structure Fee-based assets with minimal commodity exposure(c) MPC has historically accounted for – over 85% of the volumes shipped on MPLX’s crude and product pipelines – 100% of the volumes transported via MP
Slide 60: MPLX Gathering & Processing
MPLX Gathering & Processing 60 One of the largest NGL and natural gas midstream service providers – Gathering capacity of 5.5 Bcf/d • 50% Marcellus/Utica; 50% Southwest – Processing capacity of 7.6 Bcf/d* • ~70% Marcellus/Utica; ~20% Southwest – C2 + Fractionation capacity of 500 MBPD** • ~90% Mar
Slide 61: MPLX - Gathering & Processing Growth Projects
MPLX - Gathering & Processing 61 Growth Projects WEST VIRGINIA PENNSYLVANIA OHIO Utica Complex ATEX Express Pipeline Purity Ethane Pipeline NGL Pipeline Mariner East Pipeline Marcellus Complex Gathering System TEPPCO Product Pipeline KEYSTONE COMPLEX Bluestone I – III & Sarsen I – 410 MMcf/d – Opera
Slide 62: MPLX Northeast Operations Well-Positioned in Ethane Market
MPLX Northeast Operations Well-Positioned in Ethane Market Ethane demand growing as exports and steam cracker development continues in Gulf Coast and Northeast MPLX well-positioned to support producer customers’ rich-gas development with extensive distributed de-ethanization system Based on cu
Slide 63: Northeast Infrastructure Opportunities
Northeast Infrastructure Opportunities NGL/Light Products to East Coast - Large-scale East Coast LPG export terminal - Rail/pipeline to East Coast export terminal - Optionality and operational certainty for producers Centennial Pipeline - Repurpose refined products line to deliver NGLs to the Gulf C
Slide 64: MPLX - Gathering & Processing Contract Structure
MPLX - Gathering & Processing Contract Structure 64 Durable long-term partnerships across leading basins Marcellus Utica Southwest Resource Play Marcellus, Upper Devonian Utica Haynesville, Cotton Valley, Woodford, Anadarko Basin, Granite Wash, Cana-Woodford, Permian, Eagle Ford Producers 14 – inclu
Slide 65: Gathering & Processing Marcellus & Utica Operations
Gathering & Processing 65 Marcellus & Utica Operations 0 2.8Bcf/d Gathering capacity 5.5Bcf/d Processing capacity 417MBPD C2+ Fractionation capacity 25MBPD Cond. Stabilization capacity Houston Complex Sherwood Complex Hopedale Complex
Slide 66: MPLX - Gathering & Processing Marcellus & Utica Operations
MPLX - Gathering & Processing 66 Marcellus & Utica Operations Processed volumes averaged over 4.1 Bcf/d in 2Q 2016 Commenced operations of 200 MMcf/d processing plant at Mobley Complex in April Processed volumes expected to increase by ~15% over prior year Gathered volumes expected to increa
Slide 67: Marcellus & Utica Fractionation
MPLX Gathering & Processing 67 Marcellus & Utica Fractionation Commenced operations of 10 MBb/d de-ethanization facility at Mobley Complex in April Production of purity ethane in 2Q 2016 has increased 76% from 2Q 2015 Continuous deliveries of propane via unit trains from Hopedale Complex Fra
Slide 68: Marcellus/Utica is the Leading U.S. Natural Gas Growth Play
3 8 13 18 23 28 55 56 57 58 59 60 61 62 63 64 65 Jul-10 Jul-11 Jul-12 Jul-13 Jul-14 Jul-15 The Marcellus/Utica Resource Play is the Leading U.S. Natural Gas Growth Play 68 Rest o f U .S. – B illi o n Cu b ic F ee t p er D ay ( B cf /d ) Note: Wellhead gas production (before flaring and NGL extractio
Slide 69: U.S. Natural Gas and NGL Trade Flows Changing
2000 2020 U.S. Natural Gas and NGL Trade Flows Changing Paradigm shift from U.S. Northeast being a significant importer to a significant exporter Driven by Marcellus and Utica production growth Infrastructure continuing to build out to reflect changes in trade flows 69
Slide 70: Northeast NGL Supply Growth Forecast
Northeast NGL Supply Growth Forecast 70 Incremental NGL Production Growth from 2016 to 2026 (prior to ethane rejection) Williston Permian Eagle Ford DJ Source: Bentek Market Call: North American NGLs – April 26, 2016 49 MBPD 25 MBPD 204 MBPD 300 MBPD 537 MBPD Northeast Northeast is forecasted to a
Slide 71: Northeast Operations Well-Positioned to Access all Major NGL Markets
Edmonton Markets Gulf Coast Markets Northeast Operations Well-Positioned to Access all Major NGL Markets* 71 Distribution by Pipeline Distribution by Rail Distribution by Truck 60% - 65% 30% - 35% 5% - 10% MPLX 2016 NGL Marketing by Transport Access to all major NGL markets in the U.S. and the wor
Slide 72: Northeast Operations Well-Positioned in Ethane Market
Ontario Markets Northeast Operations Well-Positioned in Ethane Market 72 Operate 190 MBPD of de-ethanization capacity in the Marcellus & Utica shales Produced 116 MBPD of purity ethane in 2Q 2016, a 76% increase from prior year quarter Supply ethane to multiple locations including Canadian, Gu
Slide 73: MPLX - Gathering & Processing Southwest Operations
MPLX - Gathering & Processing 73 Southwest Operations Completed 200 MMcf/d Hidalgo processing plant supporting producers in the Delaware Basin in May – Facility utilization of ~80% after three months in operation Processed volumes expected to increase ~15% over prior year Gathered volumes expe
Slide 74: MPLX - 2016 Organic Capital Investment
37% 8% 22% 33% Marcellus Utica Southwest Logistics & Storage MPLX - 2016 Organic Capital Investment 2016 organic growth capital forecast narrowed to a range of $900 MM to $1.2 B – Gathering & Processing capital includes infrastructure to support Northeast and Southwest operations – Logistics & Sto
Slide 75: MPLX - Strong Financial Flexibility to Manage and Grow Asset Base
MPLX - Strong Financial Flexibility to Manage and Grow Asset Base 75 Committed to maintaining investment grade credit profile Completed a $1 B private placement of convertible preferred securities with third-party investors in 2Q 2016 Completed $315 MM of opportunistic ATM issuance in 1Q 2016,
Slide 76: MPLX’s Commodity Price Sensitivities
MPLX’s Commodity Price Sensitivities 92% fee-based net operating margin, 8% commodity exposed for 2016 Maintain active hedging program and have currently hedged ~45% of our remaining 2016 commodity exposure; beginning to hedge for 2017 Annual 2016 sensitivities to commodity price changes (assu
Slide 77: MPLX’s 2016 Forecast
MPLX’s 2016 Forecast MPLX has increased the midpoints of its 2016 financial forecast 77 Financial Measure 2016 Forecast Net Income(a) $140 million - $240 million Adjusted EBITDA(b) $1.3 billion - $1.4 billion Net cash provided by operating activities $1.1 billion - $1.2 billion Distributable Cash
Slide 78: MPLX’s 2016 Forecast - Reconciliation
MPLX’s 2016 Forecast - Reconciliation 78 ($MM) Low High Net income 140 240 Plus: Depreciation and amortization 540 540 Impairment expense(a) 130 130 Net interest and other financial costs 220 220 Adjustment for equity investment earnings & distributions(b) 215 215 Other 58 58 Adjusted EBITDA 1,303 1
Slide 79: MPLX’s 2016 Forecast - Reconciliation
MPLX’s 2016 Forecast - Reconciliation 79 ($MM) Low High Net cash provided by operating activities 1,075 1,175 Plus: Changes in working capital items 8 8 Non-cash equity based compensation 10 10 Net cash interest and other financial costs 220 220 Unrealized loss on commodity hedges 10 10 All other, n
Slide 80: Reconciliations
Reconciliations 80 ($MM) 2011 3Q 2015 4Q 2015 1Q 2016 2Q 2016 2Q 2016 LTM Speedway Segment Income from Operations 271 243 135 167 193 738 Plus: Depreciations and Amortization 110 63 66 63 69 261 Plus: Lower of Cost or Market Inventory Valuation Charge (Benefit) - - 25 - (25) - Speedway Segment Adjus
Slide 81: Reconciliations EBITDA to Net Income for Midstream Segment
Reconciliations 81 EBITDA to Net Income for Midstream Segment ($MM) 2011 2Q 2016 YTD 1H 2016 Annualized Midstream Segment Income from Operations 199 368 736 Plus: Depreciation and Amortization 45 284 568 Midstream Segment EBITDA 244 652 1,304
Slide 82: Reconciliation Pro Forma Adjusted EBITDA to Pro Forma Net Income
Reconciliation 82 Pro Forma Adjusted EBITDA to Pro Forma Net Income Attributable to MPC ($MM) 2015 2016 3Q 4Q 1Q 2Q Pro Forma Net Income attributable to MPC* 943 225 1 801 Less: Net interest and other financial income (costs) (131) (139) (142) (137) Add: Net income (loss) attributable to noncontroll
Slide 83: Reconciliation Pro Forma Adjusted EBITDA related to MPLX
Reconciliation 83 Pro Forma Adjusted EBITDA related to MPLX to Pro Forma MPLX Net Income ($MM) 2015 2016 3Q 4Q 1Q 2Q Pro Forma MPLX Net Income* 123 104 (37) 20 Less: Net interest and other financial income (costs) (66) (67) (68) (64) Add: Provision for income taxes 3 - (4) (8) Depreciation and amort
Slide 84: MPC Annual Price and Margin Sensitivities
MPC Annual Price and Margin Sensitivities Refining and Marketing Segment $MM (After Tax) LLS 6-3-2-1 Crack Spread* Sensitivity ~$450 (per $1.00/barrel change) Sweet/Sour Differential** Sensitivity ~$220 (per $1.00/barrel change) LLS-WTI Spread*** Sensitivity ~$90 (per $1.00/barrel change) Natural Ga
Slide 85: MPC’s Fully Integrated Downstream System
MPC’s Fully Integrated Downstream System Refining and Marketing Seven-plant refining system with ~1.8 MMBPCD capacity One biodiesel facility and interest in three ethanol facilities One of the largest wholesale suppliers in our market area One of the largest producers of asphalt in the U.S. ~