Slide 1: Second-Quarter 2018 Earnings
Second-Quarter 2018 Earnings July 26, 2018
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“). These forward-looking statements relate to, among other things, the proposed transaction between MPC and Andeavor (“ANDV”)
Slide 3: Additional Information
Additional Information Additional Information and Where to Find It In connection with the proposed transaction, MPC filed an amendment to the registration statement on Form S-4 with the SEC on July 20, 2018 that includes a preliminary proxy statement of MPC and ANDV. INVESTORS AND SECURITY HOLDERS A
Slide 4: Opening Comments
Opening Comments Reported record operational performance and outstanding financial results $1.1 billion of capital returned to shareholders, including $885 million of share repurchases Continued optimistic outlook for our business as global demand remains strong, crude differentials appear wid
Slide 5: Second-Quarter Highlights
Second-Quarter Highlights Reported second-quarter earnings of $1.06 billion, or $2.27 per diluted share, and income from operations of $1.71 billion – Refining & Marketing: segment income from operations of $1.03 billion, supported by record crude throughput volumes – Midstream: segment income fro
Slide 6: Second-Quarter 2018 Earnings
Second-Quarter 2018 Earnings 2Q 2018 2Q 2017 Earnings* $1,055 MM $483 MM Earnings per Diluted Share* $2.27 $0.93 Earnings* Earnings per Diluted Share* $1,092 3 1,000 $2.31 2 $/Share $MM $513 1,055 2.27 500 $0.98 1 483 37 0.93 30 0.06 0.08 0 0 2017 2018 2017 2018 1Q 2Q *Earnings refer to Net Income a
Slide 7: Earnings: 2Q 2018 vs. 2Q 2017 Variance Analysis
Earnings* 2Q 2018 vs. 2Q 2017 Variance Analysis 1,400 60 1,200 285 (37) (31) 1,055 1,000 463 (89) 800 (79) $MM 600 483 400 200 0 2Q 2017 Refining & Speedway Midstream** Items not Interest and Income Noncontrolling 2Q 2018 Marketing** Allocated to Other Financing Taxes Interests Segments Costs *Earni
Slide 8: Refining & Marketing Segment Income
Refining & Marketing Segment Income 2Q 2018 vs. 2Q 2017 Variance Analysis 1,600 48 76 1,400 180 56 1,200 320 (75) 1,025 1,000 243 Crude 173 (385) $MM Volumetric 102 800 Product (219) 600 562 400 200 0 2Q 2017 *LLS **Sweet/ **LLS/WTI **LLS **Market Other ***Direct ***Other 2Q 2018 6-3-2-1 Sour Diff.
Slide 9: Speedway Segment Income
Speedway Segment Income 2Q 2018 vs. 2Q 2017 Variance Analysis 250 238 200 (32) (5) (24) 159 (8) 150 (10) $MM 100 50 0 2Q 2017 Light Product Merchandise Operating Depreciation Other* 2Q 2018 Margin Margin Expense *Reflects the absence of a $6 MM gain related to asset sales in the 2Q 2017. 9
Slide 10: Midstream Segment Income
Midstream Segment Income 2Q 2018 vs. 2Q 2017 Variance Analysis 700 328 617 600 (43) 500 400 $MM 332 300 200 100 0 2Q 2017 MPLX*,** MPC Retained Equity and Other 2Q 2018 Affiliates** *Results related to refining logistics and fuels distribution dropdown into MPLX, which totaled $232 MM for the quarte
Slide 11: Total Consolidated Cash Flow
Total Consolidated Cash Flow 2Q 2018 8,000 544 7,000 1,842 (6) 6,000 (788) 45 4,999 5,000 4,653 (1,096) (195) $MM 4,000 3,000 2,000 1,000 0 3/31/2018 Operating Working Net Debt Cash Capital Return of Net Distributions Other 6/30/2018 Cash Cash Flow Capital Expenditures Capital to to Cash Balance bef
Slide 12: Capitalization and Select Cash-Flow Data
Capitalization and Select Cash-Flow Data MPC MPLX MPC As of June 30, 2018 Excluding Consolidated Adjustments(a) MPLX ($MM except ratio data) Debt 17,267 11,875 5,392 Mezzanine equity 1,003 1,003 - Equity 18,818 8,366 10,452 Total capitalization 37,088 21,244 15,844 Debt-to-capital ratio (book) 47% -
Slide 13: 3Q 2018 Outlook
3Q 2018 Outlook Other Total Corporate Percent of Sour Crude Oil Turnaround Depreciation Other Crude Charge/ Total Direct and Other WTI-priced Throughput and Major and Manufacturing Throughput* Feedstocks Throughput* Operating Unallocated Crude Percentage Maintenance Amortization Cost** Throughput* C
Slide 14: Appendix
Appendix 14
Slide 15: Capital Expenditures & Investments
Capital Expenditures & Investments ($MM) 2Q 2018 2018 Outlook Refining & Marketing (R&M) 196 950 Speedway 88 530 Midstream, including MPLX 601 2,405 Corporate and Other 17 85 Total Capital Expenditures & Investments(a) 902 3,970 (a)2Q 2018 actuals and 2018 outlook excludes capitalized interest. 15
Slide 16: Earnings
Earnings 2017 2018 (a)We adopted Accounting Standards ($MM unless otherwise noted) Update 2017-07, Retirement Benefits 3Q 4Q 1Q 2Q Presentation of Pension and Postretirement Cost, as of Refining & Marketing segment income (loss) 1,097 732 (133) 1,025 Jan. 1, 2018, and applied the standard retrospect
Slide 17: Reconciliation: Adjusted EBITDA to Net Income
Reconciliation Adjusted EBITDA to Net Income Attributable to MPC 2017 2018 ($MM) LTM 3Q 4Q 1Q 2Q Net Income attributable to MPC 903 2,016 37 1,055 4,011 Add: Net interest and other financial costs 158 209 183 195 745 Net income attributable to inco noncontrolling interests 101 109 198 180 588 Provis
Slide 18: Reconciliation: Adjusted EBITDA Related to MPLX
Reconciliation Adjusted EBITDA Related to MPLX to MPLX Net Income 2017 2018 ($MM) LTM 3Q 4Q 1Q 2Q MPLX Net Income 217 241 423 456 1,337 Add: Net interest and other financial costs 93 96 130 151 470 Provision (benefit) for income taxes 1 (2) 4 1 4 Depreciation and amortization 164 168 176 188 696 Adj
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 2017 2018 ($MM) 3Q 4Q 1Q 2Q Net cash provided by (used in) operations(a) 1,906 2,745 (137) 2,386 Less changes in working capital: Changes in current receivables (640) (797) 96 (321) Chan
Slide 20: Reconciliation of Refining & Marketing Margin to Income from Operations
Reconciliation of Refining & Marketing Margin to Refining & Marketing Income from Operations ($MM) 2Q 2018 2Q 2017 Refining & Marketing loss from operations 1,025 562 Plus: Refinery direct operating costs(a) 839 894 Refinery depreciation & amortization 235 255 Other: Operating expenses, net(a)(b) 73
Slide 21: Reconciliation of Speedway Total Margin to Speedway Income from Operations
Reconciliation of Speedway Total Margin to Speedway Income from Operations (a)Speedway gasoline and distillate margin is ($MM) 2Q 2018 2Q 2017 defined as the price paid by consumers less the cost of refined products, including transportation, Speedway income from operations 159 238 consumer excise t
Slide 22: Refining & Marketing Segment Income: 2Q 2018 vs. 1Q 2018
Refining & Marketing Segment Income 2Q 2018 vs. 1Q 2018 Variance Analysis 1,250 244 1,150 1,050 1,025 950 68 (127) 850 91 129 750 (3) 650 264 Crude 43 Product (66) 550 $MM Volumetric 91 450 492 350 250 150 50 -50 -150 (133) -250 1Q 2018 *LLS **Sweet/ **LLS/WTI **LLS **Market Other ***Direct ***Other
Slide 23: Refining & Marketing Indicative Margin
Refining & Marketing Indicative Margin 2Q 2018 3,000 381 2,855 250 50 2,500 892 (13) Crude (330) 2,000 Product 411 Volumetric 300 (1,073) $MM 1,500 1,295 1,025 1,000 (757) 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 Margin
Slide 24: MPLX Distributions and Sales Proceeds to MPC
MPLX Distributions and Sales Proceeds to MPC* $288 300 200 $171 $MM $132 $150 $91 $99 $102 $114 100 $69 $73 $16 $20 $24 $27 $32 $35 $10 $15 $16 $18 $18 $20 0 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 LP Distributions GP Distribution
Slide 25: Marathon
MARATHON ®