Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Investor Presentation (September 2019)
59 slides from Marathon Petroleum's investor presentation, Sep 3, 2019
Slide 1: Investor Presentation September 2019
Slide 2: Forward-Looking Statements and Additional Information
Forward-Looking Statements and Additional Information Forward-Looking Statements This presentation contains forward-looking statemants within the meaning of federal securities laws regarding Marathon Petroleum Corporation {MPC} and MPLX LP (MPL). These forwarc-looking statoments relate to, among ath
Slide 3: MPC - Who We Are: An Integrated, Diversified Business
MPC - Who We Are: An Integrated, Diversified Business Midstream Growing Earnings Profile a Balances Earnings Profile High-Returning Project Focus Flexible Product Placement Platform: Low-Cost, High Utilization Integration Enhances Value Retail, Wholesale, and Brand Return-Enhancing Projects Strategi
Slide 4: Our Strategic Vision
Our Strategic Vision 7 i * Strategic & Operational , Integrated : uate” Financial P | meg Disciplined Excellence | Business Model Strength PS Investments o eo Fotos tt Bi : Commitment to 1 Creates value beyond ‘a | Creates competitive ~ Provides through-cycle — people, safety, and stand-alone segmen
Slide 5: Initiatives to Drive Value Creation
Initiatives to Drive Value Creation Optimize portfolio, including potential asset divestitures High-grade spending to focus on most attractive returns Invest in logistics projects to enhance system-wide value Achieve synergy targets across all business segments Continue focus on return of capital to
Slide 6: Track Record of Operational Excellence
Track Record of Operational Excellence U.S. OSHA Voluntary Protection Program 23 J g MPC facilities ve. Nested contractors earned OSHA's Ps aca soos earned OSHA's highest status old highest status Personal Safety’ 0.50 0.10 33a o 0.40 ction 0.30 0.20 0.05 0.10 0.27 0.00 0.00 2014 2016 2018 U.S. EPA
Slide 7: Responsible Corporate Leadership
Responsible Corporate Leadership Diverse Board Skillset ic € — Industry safety leader € — Recognition through multiple environmental awards < Senior Leadership Experience o — Portfolio of renewable investments = Industry Expertise & — Annual report on Climate-Related Scenarios Speco cinetoneal Finan
Slide 8: Disciplined Capital Allocation and Consistent Return of Capital
Disciplined Capital Allocation and Consistent Return of Capital Through-cycle cash flow generation . - ; Cumulative Returns to Shareholders ~24% dividend CAGR since 3Q11 ($ billions) 19.8 $14.5 billion of share repurchases since 2012, Ler representing 33% of outstanding shares’ Commitment to return
Slide 9: Growing Earnings Stability and Profitability
Growing Earnings Stability and Profitability = Significant diversification since 2013 = Midstream & Retail >50% of EBITDA = Industry-leading ROIC = Strategic and disciplined investments = Growth capital IRR targets: — Refining: > 20% — Midstream: mid-teen — Retail: mid-teen 14% 12% 10% 8% 6% 4% 2% 0
Slide 10: Compelling Synergy Opportunities
Compelling Synergy Opportunities Estimated Run-Rate Synergies - 2021’ Estimated Annual Run-Rate ($ millions) ($ millions) 380 1,400 1,400 400 300 55 1,000 450 90 665 710 290 210 600 2g 1,000 120 465 480 Refining & Retail Midstream Corporate Total YE2019 YE2020 YE2021 Marketing § Initial Synergy Esti
Slide 11: Attractive Profile for Investors
Attractive Profile for Investors TSR Since MPC IPO" 500% 300% 100% 2011 2012 2013 2014 2015 2016 2017 2018 2019 -100% m= S&P 100 Peers === MPC 6% Dividend Yield” 16% Free Cash Flow Yield” 4% _Peer Average:4.1% _ _ 12% 8% Index: 5.1! 2% 4% i ccc i RB ccs : S&P 500: 4.4% Ax } 3.6% 5% 1 3% 8.4% 6.2% .
Slide 12: MPC: Formula for Creating Exceptional Value
MPC: Formula for Creating Exceptional Value Strategic vision to Leading assets & a8 grow value capabilities Core values and operational excellence Premier asset base Integrated Experienced business model management team Disciplined Seo investments balance sheet Financial strength & Exceptional oppor
Slide 13: Midstream
Slide 14: Roadmap to Creating Superior Value — Midstream
Roadmap to Creating Superior Value — Midstream Capture Full | Enhance Grow in Leverage Financial Midstream Cash Flow Premier MPC — Discipline - E Value Chain Stability Basins Relationship ; at 5 ee = —— Participate across »% Long-haul pipelines 3 Permian: I Fosters further ~~ Self-funding equity ~10
Slide 15: MPLX's Business Mix
MPLX’s Business Mix = Successfully combined MPLX and Andeavor Logistics creating leading, large-scale diversified midstream company anchored by fee-based cash flows = High-grading growth capital expenditures with focus on L&S — Strategy of creating integrated crude oil and natural gas logistics syst
Slide 16: Capturing Strategic Opportunities
Capturing Strategic Opportunities Creating an integrated Permian footprint to the Gulf Coast . EO i c ar @ Oil MPC Galveston yf 4) Bay Refinery Gathering Key L&S projects: — Signed definitive agreements for Wink-to-Webster crude oil pipeline — Reached FID on Whistler > ih be natural gas pipeline ° ~
Slide 17: Permian G&P Feeds Downstream Opportunities
Permian G&P Feeds Downstream Opportunities Gathering systems create significant growth opportunities in the Permian To Houston and Nederland Crude gathering 10 Corpus Christ - Conan Gathering system connects refineries to well-head — Provides volumes for planned Gray Oak, Wink-to-Webster pipelines i
Slide 18: Permian Crude Pipelines
Permian Crude Pipelines Investments in long-haul pipelines generate stable, fee-based midstream income and also help lower feedstock costs for MPC refineries = Gray Oak Pipeline — MPC, Diamondback Energy, PSXP — ~850 mile, 30” diameter TEXAS — Anticipate in-service 4Q19 ink Wink Orla ~ ma tO Grane =
Slide 19: Permian Natural Gas and NGL Pipelines and Fractionation
Permian Natural Gas and NGL Pipelines and Fractionation = Whistler Residue Gas Pipeline — JV with White Water Midstream and others — 42” pipeline with ~2.0 Bcf/d capacity — Anticipate in-service 3Q21 TEXAS = BANGL Pipeline (Belvieu Alternative NGL) org a — JV with White Water Midstream and others ~~
Slide 20: Expanding Export Capabilities
Expanding Export Capabilities Export facilities create ability to generate third party revenue and meet global demand for crude, refined products, and NGLs = Currently in service — Mt. Airy, LA: acquired in 3Q18 — LOOP: expansion with planned Capline reversal TEXAS = Planned projects & : File ae LOO
Slide 21: Capline Reversal and LOOP
Capline Reversal and LOOP Competitive full-service solution Capline — 40” crude oil pipeline from Patoka, IL, to St. James, LA — Reversed service planned for September 2020 LOOP — Only Gulf Coast port capable of loading 2 MMBBL vessels (VLCCs) without reverse lightering — Loaded three VLCCs in a sev
Slide 22: Marketing & Retail
—re — Marketing & Retail —n
Slide 23: Roadmap to Creating Superior Value — Marketing & Retail
Roadmap to Creating Superior Value — Marketing & Retail Leverage Scale ZA Capture High-Value Enhance to Drive Value _@ _ Integration nN oo wth Customer Creation Opportunities RA Experience fl Strong brand portfolio Optimize channel Focus on key markets Embrace changing g and loyalty program particip
Slide 24: Unparalleled Nationwide Marketing & Retail Footprint
Unparalleled Nationwide Marketing & Retail Footprint = Enhanced proprietary Brand marketing platform (Marathon + ARCO) = Leverage regional brand strengths ~12,000 locations nationwide ( ~16 billion gallons of annual fuel sales ‘4 and consumer preferences >70% assured gasoline placement Core Licensed
Slide 25: Multi-Channel Platform Creates Unrivaled Flexibility
Multi-Channel Platform Creates Unrivaled Flexibility Retail Segment R&M Segment Retail’ Direct Dealer Brand Wholesale . Channel diversity 7.8 billion GPY 2.6 billion GPY 5.3 billion GPY 16.9 billion GPY maximizes value capture en OO Terminal Terminal = Integrated platform I I I I J ! provides assure
Slide 26: Retail Segment: MPC's Unique Competitive Advantage
Retail Segment: MPC’s Unique Competitive Advantage Speedway #1 in Peer Group Performance Retail platform generates stable and growing (svt EBITOA/staePNAETiER) $30 cash flow with unparalleled integration value. Retail EBITDA Illustration $20 ($ millions) > 2,000 $10 Retail Segment EBITDA Retail Run-
Slide 27: Retail Segment Synergies
Retail Segment Synergies Estimated Annual Run-Rate Synergy Projections by Sub-Category ($ millions) ($ millions) 300 300 90 200 50 80 210 20 50. a 130 70 YE2019 YE2020 YE2021 Profit Reduce Operating ReduceG&A Economies of Total Enhancement Expenses Expenses Scale on Capital Initial Synergy Estimates
Slide 28: Refining
Slide 29: Roadmap to Creating Superior Value — Refining
Roadmap to Creating Superior Value — Refining Supply Optionality Leverage broader scale + logistics assets to source cost- advantaged crude Create competitive purchasing advantages through integration Operational Excellence & Optimization Enhance reliability + availability of assets Reduce cost stru
Slide 30: MPC Refining Footprint and Regions
MPC Refining Footprint and Regions Refining Locations i It Lake City | l “Capacities are based on 2018 086) report and reflect crude unit calendar day rate West Coast 4 refineries: 711 MBPD* Pricing indicator: WC ANS 324 10 refineries: 1,161 MBPD* Pricing indicator: Chicago WTI 321 2 refineries: 1,1
Slide 31: Broader Scale Expands Supply Optionality
Broader Scale Expands Supply Optionality Canadian, = Larger footprint expands access to advantaged supply: @ Canadian 2) Bakken @ Permian \e Other Crudes: (Global| Heavy) Arab) Califormay otner)) = New logistics assets lower crude acquisition costs y = Crude processing flexibility enhances capture o
Slide 32: Canadian Crude Flexibility
@ Canadian Crude Flexibility = Broader system ° Mair . - — => Clearbrook increases access to eaber" "Be + <2 Canadian crudes \ on Ps 1 . \ enhancing margin ‘ot Poul 5, capture 1 Park q Detroit ! a - 1 Mi ae = Over 500 MBPD of eT E llaconton Canadian crude ‘a oe H : kes a purchases ' Catlettsburg “4
Slide 33: Bakken Strategy Optimization
2] Bakken Strategy Optimization = New logistics assets increase Bakken crude ih ey nso Clearbrook 4-~-- fall ___Comer ee access, providing more eo OS andor a, . . Ss ‘ options to capture margin ss ‘ \ “S X i = Connectivity and secured “ ol, . my 1 “ space on long-haul pipelines oS | = 3 Bo peas x pr
Slide 34: Permian Strategy Optimization
3} Permian Strategy Optimization Increasing integrated footprint in the | Permian creates multiple benefits ii TX across our platform . J \ LA “\ EIPaso Wink t = Gathering systems create direct \ ‘one ay as Mtetoy \ crude sourcing of advantaged a ae Se, “Dianne etn { crude for our refineries \ ; : o
Slide 35: Key Strategic Investments: Grow EBITDA
Key Strategic Investments: Grow EBITDA Expected Annualized Average EBITDA* Investments focused on (S$ millions) . epee * upgrading capabilities, yield $950 x, eee ie # ep flexibility, and conversion capacity Track record of executing on- schedule and exceeding return forecasts ' i 1 i GAR STAR: i 1
Slide 36: Galveston Bay STAR Program
Galveston Bay STAR Program Creates a world-class refining complex with 4O MBPD increased crude unit capacity * Increases resid processing and improves gasoil recovery = Optimizes operations and reduces costs Project details and estimates: — Staged investment - on schedule and on budget — Planned com
Slide 37: Dickinson Renewable Diesel
Dickinson Renewable Diesel Produce renewable diesel to capture economic opportunity created by California Low Carbon Fuel Standard and Federal Renewable Fuel Standard Convert refinery to process soybean and corn oil to make 12 MBPD of renewable diesel Local feedstock supply advantage Leverages exist
Slide 38: Los Angeles LARIC Project
Los Angeles LARIC Project Increases the flexibility to produce distillates and significantly lowers emissions 30-40 MBPD of gasoline and distillate yield flexibility Physical integration of the Los Angeles refinery complex enhances optimization Reduces NOx, SOx and CO, emissions Project details and
Slide 39: Unprecedented Opportunities for Light Product Optimization
Unprecedented Opportunities for Light Product Optimization Kenai = Nationwide footprint enables ‘Anacortes connectivity to all U.S. markets s Mandan | Portland Dickinson = Broader, integrated system ¥ increases capability to capture ouieul be i i | Salt Lake Ci - value from market dislocations Mee i
Slide 40: Mexico Strategy Optimization
Mexico Strategy Optimization MPC Refineries @) Utilizing ARCO brand at 155 stations’ in ih Western Mexico, expanded ARCO to Chihuahua , ( maninez [E1200 operations ’ L] S and Baja Sur in early 2019 Rall Facility Terminal ® Developing Mexico supply capabilities and efficiency with new Rosarito light
Slide 41: Operational Excellence Delivers Significant Value
Operational Excellence Delivers Significant Value Cash Operating Expense’ = Improve operating costs = Best-in-class energy efficiency and turnaround performance Galveston Bay '14 = Supply chain cost ‘OD 3° Quartile = improvement 3 2"4 Quartile & ee ET — & Quartile = Focus on reliability and & Utiliz
Slide 42: R&M Segment Synergies
R&M Segment Synergies Estimated Annual Run-Rate Synergy Projections by Sub-Category ($ millions) ($ millions) 665 665 200 140 420 100 160 _ 160 YE2019 YE2020 YE2021 Refining Refining Turnaround / Marketing Supplyand Procurement _—_‘Total Optimization Business Maintenance Trading seg ‘ 1 . andBest Pr
Slide 43: Global Refining Capacity Relatively Balanced
Global Refining Capacity Relatively Balanced Net worldwide refining capacity growth appears relatively balanced with new capacity in Asia and the Middle East, primarily to support domestic demand. os Global Crude Distillation Capacity U.S. Refinery Utilization " and Demand Growth 100% 2.0 a < 95% 3
Slide 44: Global and U.S. Inventories Support Refining Margins
Global and U.S. Inventories Support Refining Margins Global Gasoline Inventories Global Distillate Inventories 450 rt 425 650 400 2 g 2 600 S S 375 550 350 500 325 450 28 ay 35 26 225 oe & ic} & 24 8 28 25 22 21 20 JF M A M J J A S O ND 4 FM A MY + A 8S oO OM oD 5-year Range (14-18) S-year Average (
Slide 45: Near-Term Gasoline Weakness, Offset by Long-Term Distillate Strength
Near-Term Gasoline Weakness, Offset by Long-Term Distillate Strength Rise in oil prices in 2018 slowed global gasoline demand growth and strong margins incentivized high refinery utilization pressuring gasoline margins; expect this to normalize in later part of 2019. Gulf Coast Gasoline & Diesel Mar
Slide 46: MPC Well-Positioned Among U.S. Refiners
MPC Well-Positioned Among U.S. Refiners MPC well-positioned to produce high value fuels and capture benefits from the adoption of low sulfur fuels regulations - given investments over past decade to enhance upgrading capabilities. Resid Upgrading & 30% Residual Fuel Oil Production Distillate Hydrotr
Slide 47: Sensitivities
Sensitivities EBITDA Impact Key Metric Potential Impacts from $1/BBL change Higher crack required to support increased refinery ~ production and meet elevated demand for low sulfur fuels $1,150 MM Blended 321 Crack - Refining yield shift to max distillate production and - Gasoline Crack reduced FCC
Slide 48: Commodity Price Assumptions and Long-Term Outlook
Commodity Price Assumptions and Long-Term Outlook Commodity / Spread 2018 2019 Long-Term od) Average* Business Plan’ Outlook WTI $65.00 $64 $50 - $80 Brent-WTI $6.75 $3.60 $3 - $12 Brent-ANS $(0.25) $0.10 $(1) - $2 Brent-ASCI $5.00 $6.50 $3 - $9 LLS-WTI $5.00 $3.25 $4-$9 WTI-Bakken $2.50 $1.50 $1-$1
Slide 49: Financial Overview
Slide 50: Financial Principles and Policy
Financial Principles and Policy Disciplined investment in growth opportunities Through-cycle dividend growth Support our investment grade credit rating Return cash to shareholders through repurchases Maintain the safety, integrity and reliability of our assets Balance Sheet 50
Slide 51: Balance Sheet: Foundation for Strategy Execution
Balance Sheet: Foundation for Strategy Execution MPC Liquidity Minimum cash balance $1 - 2 billion Revolving credit facilities $6 billion Trade receivables facility $750 million Debt to EBITDA MPC (excluding MPLX) < 2.0x MPLX ; < 4.0x Corporate Credit R Moody's | S&P Fitch MPC Baa2 BBB BBB MPLX Baa2
Slide 52: Disciplined Capital Allocation Policy Across the Enterprise
Disciplined Capital Allocation Policy Across the Enterprise = Consolidated capital return target: > 50% of Dividends & Distributions discretionary free cash flow* Growth — Annual dividend target: > 10% growth Capital Expenditures | — MLP distributions as guided — Share repurchases * Capital return i
Slide 53: Stable and Growing Dividend
Stable and Growing Dividend $2.12" Secure throughout business cycles Annual Dividends ($ per share) Growth commensurate with the business 2012 2013 2014 2015 2016 2017 2018 2019E '28, 2019, April 24, 2019, and July 34, 2019 53
Slide 54: Consistent Return of Capital Through Share Repurchases
Consistent Return of Capital Through Share Repurchases Share Repurchases ($ billions) 1st half of 2019: ~$1.4 billion of repurchases Consolidated capital return target: > 50% of discretionary free cash flow Existing authorization’: $3.5 billion, potentially completed by year end 2020 2012-2016 2017
Slide 55: Appendix
Appendix 55
Slide 56: Third-Quarter 2019 Outlook
Third-Quarter 2019 Outlook eter Depreciation Crude Charge/ Total Operating | Distribution Planned a Throughput? | feedstocks | Throughput Cost? Cost? Turnaround gai 4 Anat mortization in MBPD. Percent of Throughput eee ee $MM $MM $MM Gulf Coast Region 1,100 175 1,275 37% 63% $4.40 $20 $135 33 Mid-Co
Slide 57: Market Data Terminologies
Market Data Terminologies Metric la Mid-Con Crack Spread* * ((2xChicago CBOB Gasoline + Chicago ULSD)/3) x 42 - WTI Prompt West Coast Crack Spread* * ((2xLA CARBOB + LA CARB Diesel)/3) x 42 - ANS Prompt USGC Crack Spread* * ((2xUSGC CBOB Gasoline +UuSGC ULSD)/3) x 42 - LLS Prompt + Weighted 38%/24%/
Slide 58: Speedway EBITDA Reconciliation
Speedway EBITDA Reconciliation Segment EBITDA to Segment Income from Operations CS | 93 qa at Q2 LIM Speedway Segment Income from Operations 208 148 95 159 610 Plus: Depreciation and Amortization 68 78 79 73: 298 Speedway Segment EBITDA 276 226 174 232 908 58
Slide 59: Free Cash Flow Yield and Dividend Yield Reconciliation
Free Cash Flow Yield and Dividend Yield Reconciliation 3 Q4 Qu Q2 L™M Cash Flow from Operations 1,182 2,727 1,623 2,622 8,154 Less: Capital Expenditures 849 1,263 1,241 1,178 4,531 Free Cash Flow 333 1,464 382 1,444 3,623 seened aol Common Shares 451 687 673 662 Free Cash Flow Per Share 0.74 213: 0.
Marathon Petroleum — Investor Presentation (September 2019) on 6ix