Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Barclays conference 2013
93 slides from Marathon Petroleum's conference presentation, September 2013
Slide 1: Investor Presentation
Investor Presentation September 2013 1
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, MPC’s current expectations, estimates and projections concerning MPC’s and MPLX’
Slide 3: Strategic Vision
Strategic Vision Achieve top tier safety/environmental performance Grow enterprise value Expand platform for MPLX growth Deliver top quartile refining performance Increase Speedway and Marathon brand assured sales volumes Deliver profitable Speedway growth Goal: Top Quartile Total Shareh
Slide 4: Deliver Top Tier Safety Performance
Deliver Top Tier Safety Performance Record safety performance across our operations in 2012 World-class safety performance for DHOUP Continue industry leadership on preventive maintenance Achieve Top Tier Safety/Environmental Performance 4
Slide 5: Grow Enterprise Value
Grow Enterprise Value Earnings growth Strong dividend, growing over the long term Sustained share repurchase program Valuation re-rate/uplift Grow Enterprise Value 5
Slide 6: MPC vs. Competitors
MPC vs. Competitors Pre-Tax Adjusted Domestic Operating Income per Barrel of Crude Oil Throughput 20 MPC 15 Peer Company 10 $/BBL 5 0 -5 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 June YTD Preliminary MPC’s Rank 3 3 2 1 2 3 7 2 1 5 3 1 3 1 2 4 Companies Ranked* 1
Slide 7: Grow Enterprise Value
Grow Enterprise Value $3.46 billion of capital returned to shareholders since 7/1/11 as of 6/30/13 $1.3 billion share repurchase authorization outstanding as of 6/30/13 Op Income and EBITDA Growth Cumulative Returns to Shareholders 7,000 4,000 6,342 3,500 $3.46 B 6,000 5,347 3,000 5,000 4,636 2,
Slide 8: Grow Enterprise Value
Grow Enterprise Value Total Shareholder Return of 93% for 2012, 14% for 2013 Cumulative Total Shareholder Return by Year 100% 93% 80% 67% 60% 43% 40% 36% 31% 20% 14% 0% Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Top Quartile Shareholder Returns 8
Slide 9: Growth Drivers
Growth Drivers 9
Slide 10: MPC has Created an Industry-Leading MLP
MPC has Created an Industry-Leading MLP 45 Focus on Fee-Based Businesses Unit Price 40 Pursue Organic Growth 35 Opportunities 30 Grow Through Acquisitions and Drop-downs 25 Maintain Safe and Reliable 20 Operations 10/25/12 11/12/12 11/27/12 12/11/12 12/26/12 01/10/13 01/24/13 02/07/13 02/22/13 03/08
Slide 11: Acquisition of Galveston Bay Assets
Acquisition of Galveston Bay Assets 451 MBPCD (475 MBPSD) high complexity refinery, Nelson Complexity Index of 15.3 Attractive base cash purchase price of ~$598 million Potential $700 million earnout over six year period Closed February 1, 2013; financed with cash on hand Estimated increme
Slide 12: Detroit Heavy Oil Upgrade Project
Detroit Heavy Oil Upgrade Project Increased heavy oil capacity from 20,000 BPCD to 100,000 BPCD 28,000 BPCD delayed Coker 36,000 BPCD Distillate Hydrotreater (DHT) Crude capacity increased ~14,000 BPCD Discounted Canadian crude Investment: $2.2 billion* project Estimated incremental an
Slide 13: Garyville Major Expansion (GME) Project
Garyville Major Expansion (GME) Project Garyville, LA refinery is last grassroots refinery built in the U.S. (1976) Base Garyville refinery, 2008 Solomon survey Best U.S. cash cost operating expense Second-best U.S. Energy Intensity Index GME Project completed in late 2009 - significantly
Slide 14: $3.9 Billion Garyville Major Expansion
$3.9 Billion* Garyville Major Expansion 1/1/2013 1/1/2012 522 MBPCD Crude Capacity 490 MBPCD 1/1/2011 320 MBPCD Crude Capacity Gasoline 464 MBPCD 305 MBPCD 1/1/2010 Crude Capacity Gasoline 230 MBPCD 436 MBPCD Diesel 1/1/2009 300 MBPCD 215 MBPCD Crude Capacity Gasoline Third Large
Slide 15: Supply Dynamics
Supply Dynamics 15
Slide 16: Significant Growth in North American Crude Oil Supply
Significant Growth in North American Crude Oil Supply 2012-2020 Total Canadian Growth +1,800 MBD 2012 – 2020 +3,920 MBD Bakken +840 MBD Detroit Utica Canton +120 MBD Permian Robinson Basin Catlettsburg +460 MBD Texas City Eagle Ford Garyville +700 MBD Galveston Bay MPC Refinery Sources: CAPP and MPC
Slide 17: Balance in Refining Network
Balance in Refining Network Canton (Ohio) 80,000 Catlettsburg (Ky.) 240,000 Detroit (Mich.) 120,000 Midwest Capacity 646,000 BPCD Robinson (Ill.) 206,000 Galveston Bay (Texas) 451,000 Texas City (Texas) 80,000 Garyville (La.) 522,000 Total 1,699,000 Texas Capacity 531,000 BPCD Louisiana Capacity 522
Slide 18: MPC Well Positioned to Capture Oil Sands Economics
MPC Well Positioned to Capture Oil Sands Economics Hardisty ~$5.50/BBL Hardisty to ~$7.35/BBL Detroit Hardisty to USGC Detroit Value vs. USGC Refineries Chicago for Canadian Heavy Processing Wood Patoka $BBL River Laid-In Crude Cost 1.85 Cushing ~$1.95/BBL Houston to Chicago Higher Product Value 2.2
Slide 19: Transportation Costs Set Crude Differentials
Transportation Costs Set Crude Differentials Bakken $4.60 $16.75 $16.00 $10.35 Patoka Eagle Ford St. James Excludes gathering and truck transportation costs (up to ~$5.25/BBL) Sources: MPC Estimates based on publically available information, OPIS, and Argus Media. Deliver Top Quartile Refining Perfo
Slide 20: MPC Well Positioned for Utica Shale Options
MPC Well Positioned for Utica Shale Options Truck, barge, pipeline Multiple Transportation Options Local capacity for Utica condensate ~25 MBPCD between Canton and Canton Catlettsburg presently Wellsville Condensate splitters at Canton and Proposed Pipeline Harrison Catlettsburg Hubs Inc
Slide 21: Distribution & Marketing
Distribution & Marketing 21
Slide 22: U.S. Distillate Exports Continue to Grow
U.S. Distillate Exports Continue to Grow Total U.S. distillate exports averaged U.S. Distillate Exports 1 MMBPD in 2012 compared to 138 1200 MBPD in 2005 Central & South America 1000 Mexico ~60% of the total U.S. distillate Netherlands exports were to Latin America 800 Other Growing regional d
Slide 23: Diesel and Gasoline Export Success
Diesel and Gasoline Export Success Currently selling gas and diesel 200 Exports export cargos via term and spot 150 16 transactions MBPD 100 Value added relative to domestic 145 pipeline sales 50 114 76 Product quality premium 35 0 No RIN obligation 2010 2011 2012 2013* Diesel Gas Optimize
Slide 24: Extensive Retail Network Provides Assured Sales
Extensive Retail Network Provides Assured Sales 78 Speedway 63 66 302 Fourth largest U.S.-owned/ 779 operated c-store chain 4 ~1,470 stores 107 307 481 45 Speedway 855 ~2 million customers/day 390 664 60 1 Brand 142 115 Located in nine states 581 138 2 194 * 300 128 * 139 * 268 Marathon
Slide 25: Speedway Sales – Stable Merchandise Margin
Speedway Sales – Stable Merchandise Margin Light Product Volume 4 3.30 3.23 2.94 3.03 B Gallons 3 2 1.0 3.7 (1.2) (0.9) 1 0 2009 2010 2011 2012 (Same Store % inside bars) Light Product and Merchandise Gross Margin 1,400 1,200 1,000 398 399 333 384 800 MM$ Merchandise Sales 4 600 3.11 3.19 2.92 3.06
Slide 26: Increase Marathon Brand Assured Sales Volume
Increase Marathon Brand 5,000 Light Product Sales Assured Sales Volume Millions of Gallons 4,000 3,000 2,000 1,000 0 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 Increase Speedway and Marathon Brand Assured Sales Volume 26
Slide 27: 2013 Value Drivers
2013 Value Drivers Growth of MPLX Galveston Bay refinery Detroit Heavy Oil Upgrade Project Profitable Speedway growth 2013 $1.6 billion capital investments* Capital return to shareholders Strong dividend, growing over the long term Continuing share repurchases – as of June 30, 2013,
Slide 28: Appendix
Appendix 28
Slide 29: MPC is a Strong Strategic Sponsor for MPLX
MPC is a Strong Strategic Sponsor for MPLX MPC is a leading independent R&M company Enterprise value of $23.0 billion1 and LTM EBITDA generation of $6.3 billion² 2012 revenue of $82.2 billion, Fortune 50 company Large integrated refining, marketing and logistics system Seven refineries wit
Slide 30: MPC has Strong Earnings and Cash Flow, Investment Grade Credit Profile
MPC has Strong Earnings and Cash Flow, Investment Grade Credit Profile Financial Policies Committed to Investment Grade profile Historical Financial Summary Rating Current 7,000 6,342 Agency MPC Rating S&P BBB/A-2 (Stable) 6,000 5,347 Moody’s Baa2/P2 (Positive) 4,636 Maintain strong access to li
Slide 31: Executing on Commitment to Total Shareholder Return
Balanced Return Executing on Commitment to Total Shareholder Return Base dividend increased 110% since July 1, 2011 $2.66 billion share repurchases through June 30, 2013 Total shareholder return of 93% for 2012 2012 Cumulative Total Shareholder Return Cumulative Return of Capital 100% 93% 4,00
Slide 32: Focused Return of Capital to Shareholders
Focused Return of Capital to Shareholders $6,000 Net cash provided by operations $5,519 $5,000 ~81% of $2,277 Free Cash Dividends and share Free Cash Flow** repurchases* $4,000 Flow** $2,819 Millions $3,000 $542 Change in cash and all other $2,000 Cash capital expenditures $2,700 and acquisitions $1
Slide 33: MPC Key Strengths
MPC Key Strengths Balanced Operations Crude Oil Refining Capacity Crude Slate 62% PADD II Sour Crude 53% PADD III 47% Sweet Crude 38% As of 2/1/13 As of 6/30/13 Assured Sales of Gasoline Production (Speedway + Brand + Wholesale Contract Sales) Assured Sales ~46% Wholesale and ~54% Other Sales As of
Slide 34: MPC Relative Refining Position
MPC Relative Refining Position (MBCD) U.S. Crude Refining Capacity (1) (#) # of U.S. Refineries (1) 3,000 15 2,097 12 11 1,950 2,000 1,808 1,699 10 7 7 7 6 981 958 955 5 5 5 1,000 755 665 5 443 3 0 0 MPC Chevron Tesoro HFC Valero BP Phillips Shell Citgo Exxon MPC Chevron Valero Tesoro HFC BP Phillip
Slide 35: Refinery Capacity
Refinery Capacity BPCD NCI* Garyville 522,000 10.8 Galveston Bay 451,000 15.3 Catlettsburg 240,000 10.3 Robinson 206,000 10.6 Detroit 120,000 9.9 Texas City 80,000 8.4 Canton 80,000 9.0 Total 1,699,000 11.6** The Nelson Complexity Index is a construction cost-based measurement used to describe the i
Slide 36: U.S. Gulf Coast Offshore Imports
Positive Fundamentals U.S. Gulf Coast Offshore Imports Domestic crude oil cannot be exported without a permit, therefore domestic crude oil must be priced to back out imports Virtually all of the light sweet imports will be displaced in 2013 Other imports will be displaced as U.S. crude oil pr
Slide 37: CAPP Western Canada Crude Oil Supply Forecast
CAPP Western Canada Crude Oil Supply Forecast Annual Growth from 2012 - 2030 MBD 8,000 Light Supply 17 Actual Forecast Heavy Supply 241 7,000 June 2012 Forecast 6,000 5,000 MBD 4,000 Oil Sands Heavy* 3,000 2,000 Upgraded Light 1,000 Conventional Heavy Conventional Light 0 2006 2008 2010 2012 2014 20
Slide 38: Midwest Refineries’ Opportunity
Positive Fundamentals Midwest Refineries’ Opportunity Current North Dakota Production: ~820 MBPD 2012 Year-end: 770 MBPD Canada 2011 Year-end: 535 MBPD 2010 Year-end: 344 MBPD 2008 Year-end: 202 MBPD 2020 North Dakota Production Forecast: North Dakota Up to 1,500 MBPD Montana Pipeline
Slide 39: Positive Industry Trends – Growing North American Production
Positive Industry Trends – Growing North American Production “Resource plays” dominate U.S. 3.0 output growth. Conventional 2000 - 2012 2012 - 2025 production (Alaska, offshore, 2.5 California, other legacy production) struggles to sustain output 2.0 NGL output growth is mostly MMBD 1.5 associat
Slide 40: Texas City and Galveston Bay Refinery Opportunity
Eagle Ford Shale Texas City and Galveston Bay Refinery Opportunity Eagle Ford is a very light (40+ API), sweet crude (0.2% sulfur) Currently being piped to markets Dock facilities are in operation and continue to increase utilization to market it as a “waterborne” crude to capture Brent/LLS pr
Slide 41: U.S./Canada Key Existing and Planned Pipelines
U.S./Canada Key Existing and Planned Pipelines Edmonton Trans Hardisty Mountain Burnaby Anacortes Regina Cromer Clearbrook Montreal Superior Estimated Portland MBPD Pipeline Completion Sarnia 540 Keystone Current 96 Pegasus Current 170 Platte Current Casper Flanagan Chicago 190 Spearhead Current SAX
Slide 42: Indicative Transportation Costs
Indicative Transportation Costs Indicative Pipeline Costs Indicative Rail Costs Bakken to Patoka(1) $/BBL Bakken to U.S. East Coast(1) $/BBL Bakken Pipeline to Patoka 3.60 Railcar Loading 1.50 *Pipeline to MPC Rail Transportation 9.00 1.00 Refineries Railcar Lease 3.00 Total 4.60 Railcar Unloading 1
Slide 43: Detroit Logistics Options
Options… #2 #1 Detroit Logistics 2 Enbridge Enbridge Canadian crude via multiple routes Stockbridge Virtually all world Detroit crudes available via Chicago Samaria pipelines from USGC Lima All gasoline production sold in regional market #3 Platte/Keystone Patoka Wood River #4 #5 Capline Mid V
Slide 44: Attractive Midwest/PADD II
Attractive Midwest/PADD II Demand exceeds refining capacity in PADD II PADD IV Net imported ~13% of petroleum PADD V PADD II PADD I demand into PADD II, primarily from PADD III in 2012 Enhances margin opportunities PADD III Transportation premium embedded in PADD II gasoline prices Percentag
Slide 45: MPC Well Positioned – Benefits of Retail Integration
Capturing Value MPC Well Positioned – Benefits of Retail Integration Ratable sales Optimized operations Refining Pipeline Terminal Biofuels blending base load Supply dislocation flexibility Reduced credit risk (Speedway) Speedway Marketing Area Refineries Connecting Pipelines Fully I
Slide 46: Speedway vs. Public Peers – 2012
Speedway vs. Public Peers – 2012 Light Product Sales Independent Refiners 300 Average 146.9 250 M Gal/Store/Month 200 Public C-Store 177.1 150 Average 103.5 100 50 0 Casey's Couche-Tard Pantry Susser Speedway Valero Murphy Tesoro Delek Western Refining Light Product Margin Independent Refiners 40 35
Slide 47: Speedway vs. Public Peers – 2012
Speedway vs. Public Peers – 2012 Merchandise Sales 200 Independent Refiners Public C-Store 174.7 Average 93.5 $M/Store/Month Average 115.7 150 100 50 0 Casey's Couche-Tard Pantry Susser Speedway Valero Murphy Tesoro Delek Western Refining Merchandise Margin 60 Public C-Store Average 40.6 50 45.5 Ind
Slide 48: Gasoline Vehicle Fuel Efficiencies
Gasoline Vehicle Fuel Efficiencies 60 50 40 Miles Per Gallon 30 20 10 0 2000 2005 2010 2015 2020 2025 Adjusted On-road New Autos (Model Year) New Automobiles (Model Year) Adjusted On-road New Light Trucks (Model Year) New Light Trucks (Model Year) Adjusted Total On-road Vehicle Fleet Sources: DOT, M
Slide 49: 2013 Significant Capital Projects
2013 Significant Capital Projects Upgrade Galveston Bay refinery Speedway expansion Garyville diesel projects Utica Shale projects Condensate splitters Wellsville terminal Patoka to Catlettsburg pipeline upgrade Robinson unicracker revamp Garyville gasoline and diesel export Catl
Slide 50: Market Indicators Used in Project EBITDA Calculations
Market Indicators Used in Project EBITDA Calculations 2011 2006 - 2010 West Texas Intermediate 3-2-1 crack spread 23.31 10.68 Light Louisiana Sweet 3-2-1 crack spread 6.05 8.05 Arab Light 3-2-1 crack spread 11.16 14.03 Arab Medium 4-2-1-1 crack spread 7.71 9.54 Light Louisiana Sweet 6-3-2-1 crack sp
Slide 51: Annual Price and Margin Sensitivities
Annual Price and Margin Sensitivities $ Millions (After Tax) LLS 6-3-2-1 Crack Spread* Sensitivity ~$425 (per $1.00/barrel change) Sweet/Sour Differential** Sensitivity ~$225 (per $1.00/barrel change) LLS-WTI Spread*** Sensitivity ~$75 (per $1.00/barrel change) Refined Product Wholesale Margin Sensi
Slide 52: Galveston Bay Complements MPC’s Integrated System
Galveston Bay Complements MPC’s Integrated System Refinery 451,000 BPCD (475,000 BPSD) refinery Nelson Complexity Index: 15.3 Significant recent investments Excellent crude optionality Substantial products logistics opportunities Advantageous petrochemical configuration Cogen Facility
Slide 53: Enhancing Galveston Bay Asset Acquisition Earnings
Enhancing Galveston Bay Asset Acquisition Earnings Projected Synergies and Capital Investments (Millions) Projected Incremental Synergies EBITDA Projected Synergy Capital Investments $160 $160 $120 $120 $80 $80 $40 $40 $0 $0 2013E 2014E 2015E 2016E 2017E+ 2013E 2014E 2015E 2016E EBITDA Synergies of
Slide 54: Galveston Bay Projected Sustaining Capital
Galveston Bay Projected Sustaining Capital* 500 400 300 $MM 200 100 0 2013E 2014E 2015E 2016E 2017E 2018E 2019E Refinery All Other *Excludes synergy and other value accretive investments 54
Slide 55: Galveston Bay Transaction Product Logistics Opportunities
Galveston Bay Transaction Product Logistics Opportunities Flexible product placement Domestic and export Southeast opportunities Midwest Synergies with MPC’s Texas City and Garyville refineries and MPC logistics Zachary Pasadena Garyville Texas City Exports to Florida Mexico/SA/Europe 55 55
Slide 56: Galveston Bay Marketing Assets and Integration
Galveston Bay Marketing Assets and Integration Integrated acquisition includes Assignment of branded-jobber contracts representing ~1,200 BP retail sites ~61 MBPD of gasoline sales Locations primarily in FL, MS, TN and AL BP trademark to be used during transition process Strategic step i
Slide 57: Galveston Bay Assets Expected Accretive Transaction
Galveston Bay Assets Expected Accretive Transaction (MM unless otherwise indicated) MPC Base EBITDA - analyst 2013 consensus estimates(1) $ 4,759 $ 4,759 Assets acquired EBITDA using 2006-2010 pricing(2)(4) 1,200 Assets acquired EBITDA using 2011 pricing(2)(5) 700 Total EBITDA $ 5,959 $ 5,459 Improv
Slide 58: MPC 2Q 2013 Earnings
MPC 2Q 2013 Earnings* 2Q 2013 2Q 2012 Earnings $593 MM $814 MM Adjusted Earnings $632 MM $867 MM Earnings per Diluted Share $1.83 $2.38 Adjusted Earnings per Diluted Share $1.95 $2.53 Adjusted Earnings Adjusted Earnings per Diluted Share $4,000 $12 3,352 9.79 $10 $3,000 760 2.26 $8 Millions $2,000 1
Slide 59: Adjusted Earnings 2Q 2013 vs. 2Q 2012 Variance Analysis
Adjusted Earnings* 2Q 2013 vs. 2Q 2012 Variance Analysis $1,000 $900 867 (422) $800 $700 169 (6) 632 $600 Millions $500 16 8 $400 $300 $200 $100 $0 2Q 2012 Refining & Speedway Pipeline Income Noncontrolling 2Q 2013 Marketing Transportation Taxes Interests *References to Earnings refer to Net Income
Slide 60: Refining & Marketing Segment Income Variance Analysis
Refining & Marketing Segment Income 2Q 2013 vs. 2Q 2012 Variance Analysis $2,500 $2,000 640 (117) (101) (117) (6) (381) $1,500 Millions 1,325 (313) $1,000 (27) 903 $500 $0 2Q 2012 *LLS *Sweet/ *LLS /WTI *LLS *Market Direct Other Other 2Q 2013 6-3-2-1 Sour Diff. Spread Prompt vs. Structure Operating
Slide 61: Speedway Segment Income Variance Analysis
Speedway Segment Income 2Q 2013 vs. 2Q 2012 Variance Analysis $140 9 (5) 12 123 $120 107 $100 Millions $80 $60 $40 $20 $0 2Q 2012 Light Product Gross Merchandise Gross Other 2Q 2013 Margin Margin 61
Slide 62: Pipeline Transportation Segment Income Variance Analysis
Pipeline Transportation Segment Income 2Q 2013 vs. 2Q 2012 Variance Analysis $80 28 (6) (14) $60 58 50 Millions $40 $20 $0 2Q 2012 Trans. Depreciation Operating 2Q 2013 Revenue Expenses 62
Slide 63: Total Company Cash Flow 2Q 2013
Total Company Cash Flow 2Q 2013 $6,000 (1,295) 859 $5,000 4,737 (251) (113) (882) $4,000 Millions 14 3,069 $3,000 $2,000 $1,000 $0 3/31/13 Operating Working Cash Capital Dividends Share Other 6/30/13 Cash Cash Flow Capital Expenditures Paid Repurchases Cash Balance before and Balance Working Acquisi
Slide 64: Select Balance Sheet/Cash Flow Data
Select Balance Sheet/Cash Flow Data ($MM) 2013 2013 2012 2012 2Q 1Q 4Q 3Q As of quarter ended: Cash and cash equivalents 3,069 4,737 4,860 3,387 Total debt 3,410 3,416 3,361 3,349 Equity 12,197 12,412 12,105 11,467 Debt-to-total-capital ratio 22% 22% 22% 23% Last Twelve Months (LTM) EBITDA 6,318 6,5
Slide 65: 3Q 2013 Outlook
3Q 2013 Outlook Projected 3Q 2013 3Q 2012 Crude throughput 1.65 MMBD 1.19 MMBD Total throughput 1.85 MMBD 1.35 MMBD Percent of WTI-priced crude 22% 26% Refinery direct operating costs in Refining & Marketing gross margin*: Turnaround and major maintenance $1.15 $1.18 Depreciation & amortization 1.30
Slide 66: Reconciliation
Reconciliation Earnings to Adjusted Earnings* ($MM) 2012 2013 1Q 2Q 3Q 4Q 1Q 2Q Earnings 596 814 1,224 755 725 593 Pension settlement expenses** 53 22 5 39 MN asset sale settlement gain** (117) Adjusted Earnings 596 867 1,129 760 725 632 *References to Earnings refer to Net Income attributable to MP
Slide 67: Reconciliation
Reconciliation Free Cash Flow to Net Cash Provided from Operations ($MM) 2012 2013 (Quarter to date) 3Q 4Q 1Q 2Q Net cash provided by (used in) 1,833 2,043 2,079 (436) operating activities Additions to property, plant and (331) (403) (195) (229) equipment Acquisitions* (27) - (1,493) (22) Free cash
Slide 68: Income
Income ($MM unless otherwise noted) 2012 2013 1Q 2Q 3Q 4Q 1Q 2Q Refining & Marketing segment income 943 1,325 1,691 1,139 1,105 903 Speedway segment income 50 107 76 77 67 123 Pipeline Transportation segment income 42 50 52 72 51 58 Corporate and other unallocated items (79) (92) (74) (91) (67) (64)
Slide 69: EBITDA Reconciliation to Net Income Attributable to MPC
EBITDA Reconciliation to Net Income (Loss) Attributable to MPC 2009 2010 2011 2012 2013 ($MM) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Net Income (Loss) attributable to MPC 449 623 529 802 1,133 (75) 596 814 1,224 755 725 593 Less: Related party net interest and other financial income 45 24 17 18 - - - - 1 - -
Slide 70: Cash Provided from Operations Before Changes in Working Capital Reconciliation
Cash Provided from Operations Before Changes in Working Capital Reconciliation to Cash Provided by (Used in) Operations ($MM) 2012 2013 (Quarter to date) 3Q 4Q 1Q 2Q Net cash provided by (used in) operations 1,833 2,043 2,079 (436) Less changes in working capital: Changes in current receivables (393
Slide 71: Capital Expenditures & Investments
Capital Expenditures & Investments* ($MM) 2013 Budget 2Q 2013 2013 YTD Refining & Marketing 1,016 134 257 Speedway 255 76 112 Pipeline Transportation 184 41 61 Corporate and Other 160 28 52 Subtotal 1,615 279 482 Capitalized Interest 43 4 8 Total Capital Expenditures & Investments 1,658 283 490 *Exc
Slide 72: MPC Crude Slate
MPC Crude Slate 100% 90% 21 23 22 24 23 25 22 22 20 26 30 31 80% Other Sweet 70% 60% Other Sour 56 52 52 49 48 45 50 52 55 50% 52 48 48 40% WTI Based 30% 20% 26 27 29 30 28 26 10% 21 23 25 25 22 22 0% 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 72
Slide 73: Refining & Marketing Indicative Gross Margin – 2Q 2013
Refining & Marketing Indicative Gross Margin – 2Q 2013 $3,000 364 (179) $2,500 43 (1,030) 506 $2,000 1,671 Millions $1,500 (180) 1,195 (292) $1,000 903 $500 $0 *LLS *Sweet/ *LLS/WTI *LLS *Market Direct Other R&M Other R&M 6-3-2-1 Sour Diff. Spread Prompt vs. Structure Operating Gross Gross Segment C
Slide 74: MPLX Summary of Key Investment Highlights
MPLX Summary of Key Investment Highlights Robust Growth Opportunities Attractive organic growth prospects augmented with tariff and volume increases Potential for significant growth through acquisitions alongside, and/or from, MPC; MPC has a very substantial portfolio of logistics assets, includ
Slide 75: MPLX Offering Summary
Creating Value MPLX Offering Summary Issuer MPLX LP Sponsor Marathon Petroleum Corporation Exchange / Ticker NYSE / MPLX Estimated Distribution Coverage 1.10x Expected Tax Shield 80% for the period from the IPO until December 31, 2015 $203 million to MPC $192 million to pre-fund certain expansio
Slide 76: MPC has Created an Industry-Leading MLP
Creating Value MPC has Created an Industry-Leading MLP MPLX’s Primary Business Strategies Generate stable cash flows by providing primarily fee-based midstream Focus on Fee-Based services to MPC and third parties Businesses Mitigate volatility in cash flows by entering into long-term transportat
Slide 77: MPC and MPLX are Aligned
MPC and MPLX are Aligned MPLX Organizational Structure* Marathon Petroleum MPC views MPLX as integral to Corporation and Affiliates (NYSE: MPC) its operations and is aligned with its success and 100.0% 71.6% incentivized to grow MPLX ownership interest Public LP interest MPLX GP LLC MPLX assets
Slide 78: MPLX’s Assets are Integral to MPC
MPLX’s Assets are Integral to MPC Marathon Pipe Line LLC and Ohio River Pipe Line LLC comprise one of the largest networks of pipeline systems in the U.S. based on total volume delivered 1,004 miles of common carrier crude oil pipelines 1,902 miles of common carrier products pipelines Inclus
Slide 79: MPC Relationship Provides Robust Growth Opportunities for MPLX
MPC Relationship Provides Robust Growth Opportunities for MPLX Logistics infrastructure is extremely important to MPC's success. MPC intends to use MPLX as the primary growth vehicle for its midstream logistics business. MPLX can pursue acquisitions directly from MPC. MPLX can pursue third-p
Slide 80: MPLX Distribution Growth
MPLX Distribution Growth Annual distribution growth is targeted at 15% to 20% for at Organic least the next several years Growth Acquisitions MPLX could enter the 50% high IDR tier in 2015 2014-2016 ~$700 million to Drop- ~$1.2 billion of capital Downs investment required to hit targeted distr
Slide 81: MPLX Stable and Predictable Cash Flows
MPLX Stable and Predictable Cash Flows Revenue – Customer Mix1 MPLX’s assets consist of fee-based pipeline 11% systems and storage assets $55 MM MPC has historically accounted for over 85% 16% of the volumes shipped on MPLX’s pipelines $81 MM $364 MM MPC has entered into multiple long-term tra
Slide 82: MPLX - Ideal Assets for an MLP
MPLX - Ideal Assets for an MLP Historical crude and product volumes have been extremely stable with low variability despite material changes in the broader commodity price environment. Butane cavern and storage facilities generate stable and ratable (capacity based) fees. Throughput and storag
Slide 83: MPLX Strategically Located Assets
MPLX Strategically Located Assets Assets are primarily located throughout the Midwest and U.S. Gulf Coast In 2011, these regions collectively comprised ~70% of total U.S. crude distillation capacity and ~50% of finished products demand Existing and new capability to Source: MPC transport Canad
Slide 84: MPLX Strategically Located Assets (Continued)
MPLX Strategically Located Assets (Continued) MPLX’s assets and a large number Bakken of MPC's retained assets are in the Williston Basin “heart” of the Midwest Appalachian Basin infrastructure build-out Michigan Antrim Basin Devonian (Ohio) Strategically located near emerging Excello-Mulky Fore
Slide 85: MPLX High-Quality, Well-Maintained Asset Base
MPLX High-Quality, Well-Maintained Asset Base MPLX continually invests in the maintenance and integrity of its assets Uses a patented integrity management program to enhance pipeline safety and reliability Top-tier reputation and active industry involvement 2013 Capex Budget1, 2 Certifications
Slide 86: MPLX Operations Deliver Top Tier Safety Performance
MPLX Operations Deliver Top Tier Safety Performance Patented integrity management program fully compliant with DOT regulations State of the art in-line assessment practices Leading control room management practices Industry leader in helping to improve Damage Prevention practices 86
Slide 87: MPLX Financial Performance
MPLX Financial Performance Adjusted EBITDA* Distribution / Unit* $ in millions $ / unit $26.7 $0.2850 $25.1 4.5% Growth $18.2 $0.2725 3.8% Growth $0.2625** 4Q'12 1Q'13 2Q'13 4Q'12 1Q'13 2Q'13 Distribution Coverage 1.25x 1.37x 1.27x Distributable Cash Flow* Net Income* $ in millions $ in millions $28
Slide 88: MPLX Pipeline Throughput Agreements
MPLX Pipeline Throughput Agreements Initial MPC Min. 2011 MPC Est. 12 Mo. Ended 12/31/132 Term Diameter Commitment3 Throughput4 Weighted Average MPC Min. Asset (Years) (Inches) (MBPD) (MBPD) Tariff ($ / BBL) Revenue ($MM) Crude Systems Patoka to Lima 10 20" / 22" 40 117 $0.52 $7.6 Catlettsburg and R
Slide 89: Experienced MPLX Management Team
Experienced MPLX Management Team Management team includes MPC executive officers with an average 25 years of experience with MPLX's assets Years Experience Position at MPC Position at MPLX Industry With MPC Gary R. Heminger President and Chairman of the Board and 37 37 Chief Executive Officer Chief
Slide 90: MPLX Net Income Variance Analysis
MPLX Net Income 2Q 2013 vs. 2Q 2013 Estimated per S-1 Variance Analysis $45 4.0 (5.7) $40 38.6 1.5 (0.6) (3.0) 34.8 (16.2) $35 $30 $25 Millions $20 18.6 $15 $10 $5 $0 2Q 2013 Tariffs Volumes Other Revenue Cost of Other 2Q 2013 MPC Retained 2Q 2013 Estimate and Income Revenues and Interest Attributab
Slide 91: MPLX Adjusted EBITDA and Distributable Cash Flow
MPLX Adjusted EBITDA and Distributable Cash Flow Estimated ($MM) 2Q 2013 2Q 2013* Adjusted EBITDA 47.4 49.7 Less: Adjusted EBITDA attributable to MPC-retained interest 20.7 23.2 Adjusted EBITDA attributable to MPLX LP 26.7 26.5 Less: Cash interest paid, net - 0.3 Income taxes paid - - Maintenance ca
Slide 92: MPLX LP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Net Income
MPLX LP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Net Income ($MM) 2Q 2013 1Q 2013 4Q 2012* Net income 34.8 35.3 26.3 Less: Net income attributable to MPC-retained interest 16.2 17.7 13.2 Net income attributable to MPLX LP 18.6 17.6 13.1 Plus: Net income attributable to MPC-retai
Slide 93: MPLX Strong Financial Flexibility to Manage and Grow Asset Base
MPLX Strong Financial Flexibility to Manage and Grow Asset Base MPLX’s undrawn $500 million revolver provides significant liquidity to grow its business As of ($MM except ratio data) 6/30/13 Cash and cash equivalents 115.3 Total assets 1,217.7 Long-term debt* 10.9 Total equity 1,128.6 Consolidated