Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Non-Deal Roadshow (December 2014)
73 slides from Marathon Petroleum's roadshow presentation, December 2014
Slide 1: Investor Presentation
Investor Presentation December 2014
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of federal securities laws regarding both MPC and MPLX. These forward- looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations
Slide 3: Macro Outlook
Macro Outlook 3
Slide 4: Current Market Trends
Current Market Trends Positive domestic outlook Sustainable U.S. refining advantages Product exports growth Significant infrastructure investments in U.S. 4
Slide 5: Expecting Attractive Crude Spreads
Expecting Attractive Crude Spreads MPC Outlook* Brent/WTI Spread $7-$12/BBL, wider at times LLS/WTI Spread $5-$10/BBL, transportation/quality based $3-$5/BBL, domestic light sweet crude Brent/LLS surplus Competes with WTI and LLS, North Dakota Light prices accordingly Attractive, but narrowing with
Slide 6: Our Priorities for Our Investors
Our Priorities for Our Investors Maintain top-tier safety and environmental performance Substantially accelerate the growth of MPLX Sustain our focus on shareholder returns Balance capital returns with value-enhancing investments Grow higher valued and stable cash flow businesses Midstre
Slide 7: Substantial Acceleration of MPLX Growth
Substantial Acceleration of MPLX Growth Grow MPLX to ~$450 MM of run-rate EBITDA (December 2015 annualized), Adjusted EBITDA attributable to MPLX 500 from current ~$160 MM run-rate 450 (3Q 2014 annualized) 400 Accelerate MPLX’s annual LP ~3x 3Q 2014 300 annualized distribution growth rate to ave
Slide 8: Substantial Acceleration of MPLX Growth
Substantial Acceleration of MPLX Growth Rapidly changing midstream business environment creates multiple opportunities where size matters Hess retail acquisition has expanded MPC’s opportunity set and strategic options Identified fuels distribution EBITDA source Expands retained MLP-qualifyi
Slide 9: Illustrative Value of MPC Ownership in MPLX
Illustrative Value of MPC Ownership in MPLX* Illustrative Value of MPC Ownership Total Distributions to MPC based on 2019E Distributions** 25 24.8 600 557 500 20.4 20 389 GP Distributions 16.0 400 GP 15 $MM @ 55x GP $B 300 267 10 @ 45x GP 187 200 @ 35x 124 LP Distributions 82 CAGR 25% 5 LP 100 LP LP
Slide 10: MPC's Currently Identified Eligible MLP EBITDA Sources of ~$1.6 B
MPC’s Currently Identified Eligible MLP EBITDA Sources of ~ $1.6 B Retained by MPC ~ 5,400 miles of additional crude and products pipelines – Owns, leases or has an ownership interest in these pipelines Pipelines – 0.5% of MPLX Pipe Line Holdings LP Southern Access Extension, Sandpiper and Utica
Slide 11: Delivering Peer Leading Return of Capital
Delivering Peer Leading Return of Capital Last twelve months* 12.0% 10.0% 10.0% 8.3% 8.3% 8.0% 7.9% 1.4% 6.0% 8.0% 5.9% 6.4% 5.6% 4.3% 4.0% 3.9% 2.0% 2.6% 2.3% 2.0% 1.9% 2.0% 0.0% MPC HFC TSO PSX VLO Dividend Yield Special Dividend Yield Share Repurchase/Share Yield * Total Capital Return Yield: Las
Slide 12: Performing Consistently in the Top Tier
Performing Consistently in the Top Tier Engine behind MPC’s focus on capital returns Operating Income Per Barrel of Crude Throughput** 20 MPC’s Rank 15 Competitor Range 1 2 10 $/BBL 2 5 1 1 2 5 5 3 2 7 3 3 3 3 1 2 0 -5 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2
Slide 13: Grow Higher Valued and Stable Cash Flow Businesses
Grow Higher Valued and Stable Cash Flow Businesses Future Mid-Cycle EBITDA Midstream Speedway Historical Mid-Cycle EBITDA* Pipeline Transportation Speedway R&M R&M *2007-2013 average. Non-GAAP disclosure, see appendix for reconciliation to net income attributable to MPC 13
Slide 14: Growth Opportunities
Growth Opportunities 14
Slide 15: Increasing Midstream Growth Investments
Increasing Midstream Growth Investments 1,200 Southern Access Extension 1,000 Sandpiper Condensate Splitters 800 Midstream Infrastructure* $MM 600 400 200 0 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E *Includes Pipeline Transportation segment spend and midstream investments included in the
Slide 16: Investing in Significant Growth Projects
Investing in Significant Growth Projects Youngstown Sandpiper Canton Pa. MPC Investment: $1.0 B - $1.2 B Canadian Midland MPC Equity: 27% - 30% Wellsville 2017 completion Bakken M3, Leesville Steubenville M3, Scio Southern Access Extension (SAX) Ohio MarkWest, Cadiz Superior, WI MPC Inve
Slide 17: MPLX/MPC Utica Build-Out Connectivity
MPLX/MPC Utica Build-Out Connectivity 17
Slide 18: MPLX Developing a Comprehensive Utica System
MPLX Developing a Comprehensive Utica System Cornerstone Pipeline and Additional Opportunities Non-binding open season supports 12 inch pipeline, 16 inch option Capital estimates vary subject to binding open season results East and West connectivity options River access via Midland/Wellsvill
Slide 19: Acquisition of Hess Retail - Transaction Overview
Acquisition of Hess Retail - Transaction Overview Hess Retail acquisition included: 1,245 company operated locations Transport fleet with capacity to transport ~1 B gal/yr. Pipeline shipper history in various pipelines, including ~40 MBPD on Colonial Pipeline Prime undeveloped real estate
Slide 20: Conversion Plans for Former Hess Stores
Conversion Plans for Former Hess Stores 2014-2017 Conversion to Speedway: $181 MM 500 Stores by Dec. 2015 505 Stores by Dec. 2016 Remodel Capital: $240 MM Maintenance Capital: $150 MM Largest conversion in company’s history Completing Hess legacy stores first allows us to terminate transit
Slide 21: Transformative Transaction for MPC and Speedway
Transformative Transaction for MPC and Speedway Accelerates strategy to grow higher valued and stable cash flow businesses Provides larger integrated platform for growth in new markets Meaningfully expands scale and provides multiple levels of strategic optionality Continued commitment to ba
Slide 22: Enhances Strategic Value for Integrated System
Enhances Strategic Value for Integrated System Refined Product Placement Opportunities Incremental 200 MBPD of refined products placement capacity, increases assured gasoline sales to ~75% of production Incremental supply of MPC Gulf Coast refined products to northeast and southeast markets Logi
Slide 23: Speedway – Earnings growth through Margin Capture
Speedway – Earnings growth through Margin Capture Top-tier performance in the convenience store industry Scalable technology and organizational infrastructure Disciplined expense control Industry leading consumer loyalty program Leverage integration value within MPC’s infrastructure Total
Slide 24: Synergies and Marketing Enhancements Will Drive Value
Synergies and Marketing Enhancements Will Drive Value Operating and G&A expense synergies of $75 MM Integrated light product supply savings of $45 MM Additional sales uplift and merchandise margin enhancement of $70 MM Expedited integration and transition process due to spin-off preparation
Slide 25: 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 Hess1 Speedway2 Company Operated Sites 1,255 1,478 Fuel Sales 198,500 177,400 (gallons/store
Slide 26: Focus on Improving Light Product Breakeven
Focus on Improving Light Product Breakeven 13 12.39 11 Each 1.00 cent per Total Expenses – Merchandise Margin gallon improvement LPBE = 9 Light Product Volume = ~$30 MM annual Light Product Break Even (cpg) pretax earnings 7.13 7 Measure of operating efficiency 5 and merchandise contribution to to
Slide 27: Enhance Refining Margins
Enhance Refining Margins 27
Slide 28: Increasing Light Sweet Crude and Condensate Capacity
Increasing Light Sweet Crude and Condensate Capacity Condensate splitters Canton: 25 MBD – 4Q 2014 completion Condensate Processing Opportunity Catlettsburg: 35 MBD Ultra- New Light Naphtha to Gasoline Blending Sweet Fractionator Heavy Naphtha to Reforming – 2Q 2015 completion Condensate Disti
Slide 29: Growing Gulf Coast Export Capabilities
Growing Gulf Coast Export Capabilities Added new 500,000 barrel export 550 Export Capacity 510 tank at Garyville in 2013 500 450 Galveston Bay in 2015 395 400 +30 MBD ULSD 350 320 ~40% ROI 300 MBD Garyville in 2015 250 200 +20 MBD Gasoline 150 150 ~30% ROI 100 Galveston Bay in 2016-1
Slide 30: Capitalizing on Global Growth in Diesel Demand
Capitalizing on Global Growth in Diesel Demand Hydrocracker expansions/revamps Distillate Production 700 Garyville +25 MBD ULSD in 2014-15 600 $225 MM MBD 500 ~45% ROI 400 300 Galveston Bay +9 MBD ULSD in 2015 2012 2013 2014E 2015E 2016E $18 MM Distillate Production Percent of Crude Capaci
Slide 31: Evaluating Garyville Resid Hydrocracker Project
Evaluating Garyville Resid Hydrocracker Project Conversion opportunity - leverages favorable market dynamics $130 MM sanctioned for front- end engineering and design Increases ULSD production by 28 MBD and decreases gas oil purchases Converts low value resid to ULSD using hydrogen produced fro
Slide 32: 2014 Value Drivers
2014 Value Drivers Top-tier safety and environmental performance Accelerate growth of Midstream/MPLX Capital return to shareholders Strong and growing dividend Share repurchase program 2014 $2.4 B capital investments* Speedway growth Increasing light crude processing and export capab
Slide 33: Appendix
Appendix 33
Slide 34: MPLX LP and GP Illustrative Valuation
MPLX LP and GP Illustrative Valuation MPC Distributions & Asset Sales Proceeds from MPLX ($MM) 3Q 2013 YTD 3Q 2014 YTD GP Distributions, including IDRs 1 3 LP Distributions 40 53 Total Cash Distribution Received from MPLX 41 56 Asset Sales Proceeds from MPLX 100 310 Illustrative MPLX Value to MPC* 2
Slide 35: Focused Return of Capital to Shareholders
Focused Return of Capital to Shareholders LTM Ended 9/30/14 8,000 7,000 6,000 2,785 Hess Retail Acquisition 5,000 Dividends and share $MM repurchases* 4,000 ~1.2x of 2,413 $2,055 Free Investments, excluding Hess Free Cash Cash Flow, Acquisition** 3,000 Flow*** excluding Hess Net cash provided by Acq
Slide 36: Fully Integrated Downstream System
Fully Integrated Downstream System Refining and Marketing Seven-plant refining system with ~1.7 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. ~5,4
Slide 37: Generating Significant Cash Flow Through All Cycles
Generating Significant Cash Flow Through All Cycles Pro forma EBITDA adjusted for current configuration Pro forma EBITDA 8,000 7,000 6,000 5,000 $MM 4,000 3,000 2,000 1,000 0 2009 2010 2011 2012 2013 2009 thru 2013 Mid Cycle Pipeline Transportation Speedway Depr. & Amort. less corporate expense Refi
Slide 38: Sustaining Core Liquidity Needs
Sustaining Core Liquidity Needs Minimum cash balance of $500 MM - $1.5 B Requirements Ongoing Operating Cash Flow Requirements – Maintenance/Sustaining Capital – Interest Payments – Dividend Payments Contingent Calls on Corporate Liquidity - Probability Adjusted – Contingent and Uncommitted Lett
Slide 39: Sustaining Capital Returns Since Spin
Sustaining Capital Returns Since Spin Cumulative Return of Capital Since July 1, 2011 8,000 $7.0 B 7,000 6,000 5,000 $MM 4,000 3,000 2,000 1,000 0 Dividends Share repurchases 39
Slide 40: Growing Global Product Demand
Growing Global Product Demand Compounded Annual Growth Rates 2030 vs. 2013 2013 Distillate and gasoline 120 Actual Forecast demand continues to 100 rise +1.2% Other Fuel oil continues 80 -1.6% to decline on Fuel Oil MMBD economics and 60 +1.4% emissions issues Distillate 40 20 +0.9% Gasoline 0 “
Slide 41: Growing U.S. Distillate Demand
Growing U.S. Distillate Demand Overall U.S. demand remains flat 2013 Compounded 10 Annual Distillate demand Actual Forecast Growth Rates 2030 vs. 2013 growth outpaces other 9 Gasoline -0.3% products 8 Gasoline ex ethanol -0.4% 7 Gasoline will be 6 constrained by CAFE standards and modest MMBD 5
Slide 42: Rising North American Crude & NGLs Production
Rising North American Crude & NGLs Production 2013 25 Actual Forecast 20 Canada 15 MMBD 10 U.S. 5 0 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 Sources: EIA, CAPP, MPC 42
Slide 43: Growing Crude Oil Supply
Growing Crude Oil Supply North Dakota 2013 1,800 1,600 1,400 1,200 1,000 MBD 800 600 Total Growth 400 Canada 2013 – 2025 200 ← Actual Forecast → +2,549 MBD +6,055 MBD 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 Texas 2013 Bakken 4,500 +829 MBD 4,000 3,500 Utica 3,000 +106 MBD 2,500 Niobrara MBD 2
Slide 44: U.S. Shale Oil Production Under Different Price Scenarios
U.S. Shale Oil Production Under Different Price Scenarios U.S. Shale Crude and Condensate Production (MMBD) 9.5 9.0 $120 8.5 8.0 7.5 $100 7.0 6.5 6.0 $90 MMBD 5.5 5.0 4.5 $80 4.0 3.5 3.0 $70 2.5 2.0 $60 1.5 1.0 0.5 $40 0.0 Note: Brent used as benchmark oil price. Source: PIRA Energy Group 44
Slide 45: Much of OPEC Depends on High Crude Prices
Much of OPEC Depends on High Crude Prices OPEC Fiscal Breakevens ($/BBL) 160 140 120 100 80 2010 2012 60 2014 40 20 0 Source: Apicorp 45
Slide 46: Refining Capacity in Advantaged Regions
Refining Capacity in Advantaged Regions 100% in PADDs II and III Canadian Bakken 100% Utica 80% PADD IV PADD II 60% PADD V 40% PADD I 20% PADD III 0% Permian Basin Eagle Ford MPC VLO HFC PSX TSO Gulf of Mexico PADD PADDI II PADD II PADD III PADDI III PADD PADD PADD IV IVPADD PADD V V Canadian Source
Slide 47: Refinery Capacity
Refinery Capacity BPCD NCI* Garyville 522,000 11.0 Galveston Bay 451,000 13.1 Catlettsburg 242,000 10.2 Robinson 212,000 10.0 Detroit 123,000 9.9 Texas City 84,000 8.0 Canton 80,000 8.8 Total 1,714,000 11.0** The Nelson Complexity Index is a construction cost-based measurement used to describe the i
Slide 48: Balance in Refining Network
Balance in Refining Network Canton (Ohio) 80,000 Catlettsburg (Ky.) 242,000 Detroit (Mich.) 123,000 Midwest Capacity 657,000 BPCD Robinson (Ill.) 212,000 Galveston Bay (Texas) 451,000 Texas City (Texas) 84,000 Garyville (La.) 522,000 Total 1,714,000 Texas Capacity 535,000 BPCD Louisiana Capacity 522
Slide 49: U.S./Canada Key Existing and Planned Pipelines
U.S./Canada Key Existing and Planned Pipelines Northern Edmonton Gateway Hardisty Trans Mountain Burnaby Anacortes Estimated MBPD Pipeline Completion Clearbrook Superior Montreal Portland 540 Keystone Current 190 Spearhead Current Sarnia 360 Ho-Ho Reversal Current Guernsey 700 Keystone Gulf Coast Cu
Slide 50: Key Strengths
Key Strengths Balanced Operations Crude Oil Refining Capacity Crude Slate 62% PADD II Sour Crude 52% 48% PADD III Sweet Crude 38% As of September 30, 2014 September 30, 2014 YTD Assured Sales of Gasoline Production (Speedway + Brand + Wholesale Contract Sales)* Assured Sales ~38% ~62% Wholesale and
Slide 51: Compelling Advantage for Pipeline and Marine
Compelling Advantage for Pipeline and Marine Canadian $10-12 Bakken $4 $14-16 $15-16 $2 $6 $12-14 Chicago, IL Utica $5-6 Patoka, IL $6-7 $13-15 $5 $5-6 WTI Cushing, OK Legend Rail $10 Pipeline Marine $2 St. James, LA Houston, TX LLS All costs shown as $/BBL Pipeline costs exclude any storage or tran
Slide 52: Creating Crude/Condensate Advantage
Creating Crude/Condensate Advantage Canada Cornerstone Pipeline Bakken Condensate Splitter Truck Unload Expansion Sandpiper Utica Southern Access Extension Patoka, IL Wellsville Barge Condensate Splitter Robinson Light Crude Enhancements Permian MPC Refinery Eagle Ford Connectivity Enhancements Addi
Slide 53: Allocating Capital to Higher Valued Businesses
Allocating Capital to Higher Valued Businesses 2012 – 2016 Capital Investment Profile 4,000 3,500 3,000 2,500 $MM 2,000 1,500 1,000 500 0 2012 2013 2014E 2015E 2016E Refining and Marketing, excluding Midstream Midstream Pipeline Transportation Speedway Other Garyville resid upgrade project committed
Slide 54: Capital Spending Plan/Hess Conversion Costs
Capital Spending Plan/Hess Conversion Costs 2014 2015 2016 2017 450 420 400 50 390 350 50 350 327 10 20 300 300 300 300 170 250 190 225 $MM 200 40 30 150 100 50 0 2014 2015 2016 2017 Speedway Original Speedway Revised Hess Conversion Hess Other Capital investment plan includes: Conversion, IT an
Slide 55: Galveston Bay
Galveston Bay Long-term opportunities Revamp crude and vacuum units Optimize for future crude availability Improve distillate recovery Add hydrotreating capacity Move to 100% ULSD Idle the smallest and oldest FCC Expand export capabilities 55
Slide 56: Rising MPC Finished Product Exports
Rising MPC Finished Product Exports 300 250 200 MBD 150 100 50 0 2010 2011 2012 2013 Sept. 30, 2014 YTD 56
Slide 57: Leveraging Existing Capacity to Run Light Sweet Crude
Leveraging Existing Capacity to Run Light Sweet Crude 48% sweet crude oil throughput Reforming Capacity 30 Sept. 2014 YTD versus 65% sweet 25 Percent of Crude Capacity crude oil capacity 20 Industry Average Reformer capacity captures full 15 value of light crude processing 10 5 Additional valu
Slide 58: Renewable Fuels
Renewable Fuels Corn Ethanol Plants 67% equity interest* in Greenville, Ohio – 110 MM gallon/year capacity 60% equity interest in Clymers, Indiana – 110 MM gallon/year capacity 43% equity interest in Albion, Michigan – 55 MM gallon/year capacity The Andersons operates the plants and provid
Slide 59: 2014 Significant Capital Projects
2014 Significant Capital Projects Sandpiper investment Southern Access Extension investment Utica Shale projects Condensate splitters Utica system Speedway expansion Robinson hydrocracker revamp Garyville resid hydrocracker engineering design and study Garyville and Galveston Bay g
Slide 60: Capital Expenditures & Investments
Capital Expenditures & Investments ($MM) 2014 MPC Budget 3Q 2014 YTD Refining & Marketing (R&M) 864 445 Midstream included in R&M 348 232 Speedway 327 153 Pipeline Transportation* 760 418 Corporate and Other 133 60 Total Capital Expenditures & 2,432 1,308 Investments *Includes MPLX (100% basis) Note
Slide 61: Garyville Resid Hydrocracker Project
Garyville Resid Hydrocracker Project Increase production of ULSD and refinery intermediates Feeds MBPD Vacuum Resid 63 FCC Slurry 7 Hydrogen LPG to Sales Hydrogen (mmscfd) 110 Naphtha to Reformer Slurry Resid Products MBPD EBHydrocracker Hydrocracker ULSD to Sales LPG 2 Vacuum Resid Gas oil to FCC
Slide 62: Annual Price and Margin Sensitivities
Annual Price and Margin Sensitivities $MM (After Tax) LLS 6-3-2-1 Crack Spread* Sensitivity ~$450 (per $1.00/barrel change) Sweet/Sour Differential** Sensitivity ~$200 (per $1.00/barrel change) LLS-WTI Spread*** Sensitivity ~$85 (per $1.00/barrel change) Natural Gas Price Sensitivity ~125 (per $1.00
Slide 63: MPLX's Priorities for Investors
MPLX’s Priorities for Investors $80 Maintain Safe and Reliable Operations Unit Price $70 Sustain Long-term Distribution Growth; Mid 20% for $60 the Next Five Years $50 Focus on Fee-Based Businesses $40 Pursue Organic Growth Opportunities $30 IPO Grow Through Acquisitions $20 10/25/12 12/25/12 02/25/
Slide 64: MPLX and MPC are Aligned
MPLX and MPC are Aligned MPLX Organizational Structure MPC views MPLX as integral to Marathon Petroleum Corporation and Affiliates its operations and is aligned (NYSE: MPC) with its success and 100.0% incentivized to grow MPLX 69.5% ownership interest Public LP interest MPLX assets consist of a
Slide 65: Investing in Significant Growth Projects
Investing in Significant Growth Projects ~$2.3 B investment with potential annual EBITDA of up to $300 MM MPC Projects Timing Investment $MM North Dakota System Equity 2017 $1,200 Condensate Splitters 2013-2015 $250 Southern Access Extension Equity Late 2015 $305 Wellsville Truck to Barge Operation
Slide 66: MPLX Deficiency Payment Effect Example
MPLX Deficiency Payment Effect Example for illustrative purposes only Quarter Quarter Quarter Quarter Quarter Quarter Quarter ($MM) 1 2 3 4 5 6 7 Quarterly deficiency payment 2 5 3 5 - - - Use or expiration of credit (on or before) - - - - 2 5 3 Cumulative deferred revenue 2 7 10 15 13 8 5 Distribut
Slide 67: Incentive Distribution Rights
Incentive Distribution Rights 3Q2014 distribution of $0.3575/unit is in Third Target Distribution tier 67
Slide 68: 4Q 2014 Outlook
4Q 2014 Outlook Other Total Corporate Percent of Turnaround Depreciation Other Crude Charge/ Total Direct and Other WTI-priced and Major and Manufacturing Throughput* Feedstocks Throughput* Operating Unallocated Crude Maintenance Amortization Cost** Throughput* Costs Items*** in MBD Refinery Direct
Slide 69: MPLX Adjusted EBITDA Reconciliation from Net Income
MPLX Adjusted EBITDA Reconciliation from Net Income 3Q 2014 Dec. 2015 ($MM) 2013 Annualized Annualized Net income 146 172 305 Less: Net income attributable to MPC- 68 56 1 retained interest Net income attributable to MPLX LP 78 116 304 Plus: Net income attributable to MPC- retained interest 68 56 1
Slide 70: EBITDA Reconciliation to Net Income Attributable to MPC
EBITDA Reconciliation to Net Income Attributable to MPC ($MM) 2007 2008 2009 2010 2011 2012 2013 2014 1Q 2Q 3Q 4Q 1Q 2Q 3Q Net income attributable to MPC 2,262 1,215 449 623 2,389 3,389 725 593 168 626 199 855 672 Less: Net interest and other financial income (costs) 165 30 31 12 (26) (109) (48) (45
Slide 71: Reconciliation
Reconciliation Free Cash Flow to Net Cash Provided by Operations ($MM) 2013 2014 (For the Quarter) 4Q 1Q 2Q 3Q Net cash provided by operating activities 1,355 766 878 1,078 Additions to property, plant and equipment (473) (267) (302) (383) Acquisitions* - - (42) (4) Investments (38) (123) (41) (177)
Slide 72: EBITDA Reconciliation to Net Income for Hess
EBITDA Reconciliation to Net Income for Hess ($MM) 2013* 2017E Net Income 47 138 Less: Net interest and other financial income (costs) (12) - Add: Provision for income taxes 22 78 Add: Depreciation and amortization 94 149 EBITDA 175 365 *Based on Hess Sept. 30, 2013 Form 10 data annualized 72
Slide 73: Market Indicators Used in Project EBITDA Calculations
Market Indicators Used in Project EBITDA Calculations 2012 2014-2020 ULSD (USGC; $/BBL) $128.14 $136.33 No. 6, 3.0% S Fuel Oil (USGC; $/BBL) $99.32 $94.48 LLS (St. James, LA; $/BBL) $111.67 $114.82 Natural Gas (Henry Hub, LA; $/MMBTU) $2.79 $4.75 73
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