Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Q2 2021 Earnings Presentation
28 slides from Marathon Petroleum's earnings presentation, Aug 4, 2021
Slide 1: Second Quarter 2021 Earnings Conference Call
Second Quarter 2021 Earnings Conference Call August 4, 2021 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements regarding Marathon Petroleum Corporation (MPC). These forward-looking statements may relate to, among other things, MPC’s expectations, estimates and projections concerning its business and operations, financial priorit
Slide 3: MPC: Short-Term Strategic Focus
MPC: Short-Term Strategic Focus 1 2 3 Strengthen Improve Competitive Position Commercial Lower Cost of our Assets Performance Structure Achieve best-in-class Leverage cost, operating, and advantaged raw Strict capital financial performance material selection discipline Focus on contribution Enhance
Slide 4: Business Update
Business Update Closed Speedway sale; repurchased approximately $1 billion of shares and commencing next steps towards completing remaining $9 billion return of capital over next 12 to 16 months(a) Repositioning the portfolio - Dickinson reached design capacity; Martinez progressing - Advancing
Slide 5: Challenging Ourselves to Lead in Sustainable Energy
Challenging Ourselves to Lead in Sustainable Energy Strengthen Resiliency Strengthening our business for today, while building durability for tomorrow and beyond Target: Reduce Target: Reduce Target: Reduce Scope 1 and 2 GHG midstream methane freshwater 30% emissions intensity 50% emissions intensit
Slide 6: Second Quarter Highlights
Second Quarter Highlights $ Millions (unless otherwise noted) 2Q21 Adjusted Earnings per Share ($/share) (a) $0.67 Adjusted EBITDA $2,194 Cash from Continuing Operations, excluding Working Capital $1,535 Dividends $381 Share Repurchases (b) $981 (a) Based on weighted average diluted shares (b) Exclu
Slide 7: Speedway Sale - Proceeds
Speedway Sale - Proceeds 21.0 Received Speedway 17.2 $ Billions proceeds of $21 billion -3.8 Cash taxes and closing adjustments $17.2 billion after-tax proceeds Speedway Cash Taxes & After-Tax Proceeds Closing Adjustments Speedway Proceeds 7
Slide 8: Progress on Use of Proceeds
Progress on Use of Proceeds 17.2 $17.2 billion in after-tax proceeds from sale -2.5 13.7 of Speedway -1.0 Strengthening the balance sheet: $ Billions Reduced structural debt by $2.5 billion $10 billion of capital return: Returned ~$1 billion to shareholders $9 billion planned over next 12 to 1
Slide 9: Lowering the Cost Structure
Lowering the Cost Structure Refining Operating Costs Corporate Costs ($ / Barrel) $233 MM ($ Millions) $6/bbl Quarterly avg Quarterly avg ~$170 MM ~$5/bbl 1Q 2Q 3Q 4Q 1Q (a) 2Q 3Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2020 2020 2020 2020 2021 2021 2021 2020 2020 2020 2020 2021 2021 2021 Guidance Guidance Continued c
Slide 10: Adjusted EBITDA to Net Income
Adjusted EBITDA to Net Income 2Q 2021 vs. 1Q 2021 Adjusted EBITDA Reconciliation to Net Income 15,000 11,603 12,000 -890 Speedway Taxes -3,726 9,000 8,512 $ Millions -4,395 Discontinued operations 6,000 Continuing operations 3,000 728 2,194 1,552 -48 -14 -24 0 1Q 2021 Refining & Midstream Corporate
Slide 11: Refining & Marketing
Refining & Marketing 2Q 2021 vs. 1Q 2021 1,000 146 Refining margin -5 recovery across all 800 572 -113 751 regions -41 $ Millions 600 94% utilization during the quarter (or 89% 400 adjusted for idled capacity) 200 169 Continued execution on cost control 0 23 1Q 2021 USGC Mid-Con West Coast Ope
Slide 12: Midstream
Midstream 2Q 2021 vs. 1Q 2021 1,500 1,322 Through-cycle EBITDA 8 1,308 -22 stability 1,000 Continued progress on $ Millions reducing operating expenses 500 Continued progress on organic growth projects 0 1Q 2021 MPLX Other 2Q 2021 Adj. EBITDA (a) Midstream Adj. EBITDA (a) Excludes winter storm
Slide 13: Total Consolidated Cash Flow
Total Consolidated Cash Flow 2Q 2021 Discontinued Speedway 30,000 Continuing Operations Operations Close Related 25,000 21,000 387 20,000 17,257 15,000 -3,481 MPC Share Tender - 981 MPC Debt - 2,500 10,000 MPC - 833 5,000 MPLX - 836 1,535 758 149 1 -364 0 -1,669 -381 -448 -156 -74 -5,000 3/31/2021 O
Slide 14: Third-Quarter 2021 Outlook
Third-Quarter 2021 Outlook Other Total Depreciation Crude Charge/ Sweet Sour Operating Distribution Turnaround Throughput and Throughput Feedstocks Crude Crude Cost (b) Cost (c) Costs (a) Amortization Throughput (a) $/BBL of Total in MBPD Percent of Throughput $MM $MM $MM Throughput Gulf Coast Regio
Slide 15: Questions & Answers
7 72= BEE == [NT A = 22) a
Slide 16: Appendix
Appendix 16
Slide 17: Manageable Leverage and Maturities
Manageable Leverage and Maturities Debt-to-Capital (a) 75% MPC MPLX MPC Excluding 51% As of June 30, 2021 Consolidated Adjustments (c) MPLX 50% 38% 40% 34% ($MM except ratio data) 20% 21% 25% Cash(d) 17,257 8 17,249 0% Total Debt 28,320 19,235 9,085 2018 2019 2020 MPC Consolidated MPC Excl. MPLX Tot
Slide 18: Speedway Sale
Speedway Sale Financial Statement Impacts as of Sale Close 21.0 0.4 21.0 17.2 0.4 Financial Tax Provision -3.7 -4.2 11.7 -9.7 8.0 0.5 -4.2 Speedway Closing Speedway Pre-Tax Cash Deferred After-Tax Speedway Cash Closing After-Tax Proceeds Adjustments Net Assets Gain on Sale Taxes Tax Benefit Gain on
Slide 19: MPC Shares Outstanding
MPC Shares Outstanding 1Q21 ended with 652 million shares millions of shares 15.6 million shares repurchased 652 2Q21 ended with 638 million 638 shares Weighted average share count for 10-Q 10-Q 3/31/21 6/30/21 EPS calculation only includes two week impact of repurchases 19
Slide 20: Refining & Marketing Segment Income
Refining & Marketing Segment Income 2Q 2021 4,000 368 -16 45 3,233 3,000 2,802 34 Volume 306 Product 525 Crude -786 $ Millions 2,000 -1,193 1,000 -1,310 21 224 -527 0 Blended Sweet Sour Market Other R&M Margin Operating Distribution Turnaround Other R&M Crack Differential Differential Structure Marg
Slide 21: Refining & Marketing Margins – Market vs. Realized
Refining & Marketing Margins – Market vs. Realized 3,500 Total system capture of 101%, key 203 3,233 3,189 factors included: 3,000 -159 Strong gasoline margins $ Millions Tailwind from petrochemicals feedstock prices 2,500 Weaker secondary product pricing 2,000 R&M Margin 95% Capture Actual Ca
Slide 22: Refining & Marketing Segment Income (Loss)
Refining & Marketing Segment Income (Loss) 2Q 2021 vs. 1Q 2021 Variance Analysis 500 47 973 31 -80 -15 -5 22 224 -38 -113 0 Volume 32 Product 51 $ Millions Crude - 121 -500 -598 -1,000 1Q 2021 Blended Sour Sweet Market Other Winter Storm Operating Distribution Turnaround, 2Q 2021 Segment Crack Diffe
Slide 23: Sustainability & Climate Perspectives Reports
Sustainability & Climate Perspectives Reports 23
Slide 24: Income Summary for Operations
Income Summary for Operations 2020 2021 ($MM unless otherwise noted) 1Q 2Q 3Q 4Q 1Q 2Q (a) Corporate reflects corporate costs that Refining & Marketing segment income (loss) (497) (1,544) (1,569) (1,579) (598) 224 are no longer allocated to Speedway under discontinued operations accounting. Midstrea
Slide 25: Reconciliation
Reconciliation Net Income Attributable to MPC to Adjusted Net Income (Loss) Attributable to MPC (a) Income taxes for adjusted earnings was calculated by applying a combined federal ($MM) 2Q21 2Q20 and state statutory tax rate of 24% to the adjusted pre-tax income (loss) for these Net Income attribut
Slide 26: Reconciliation
Reconciliation Cash Provided by Operations to Continuing Operating Cash Flow Before Changes in Working Capital 2021 ($MM) 2Q Cash provided by operating activities from continuing operations 1,536 Less changes: Current receivables (2,224) Inventories (472) Current accounts payable and accrued liabili
Slide 27: Reconciliation
Reconciliation Segment Income (Loss) from Operations to Segment Adjusted EBITDA and Adjusted EBITDA 2020 2021 ($MM) 1Q 2Q 3Q 4Q 1Q 2Q Refining & Marketing Segment Segment income (loss) from operations (497) (1,544) (1,569) (1,579) (598) 224 (a) As of August 2, 2020 Speedway Add: Depreciation and amo
Slide 28: Reconciliation
Reconciliation Refining & Marketing Income (Loss) from Operations to Refining & Marketing Margin 2020 2021 ($MM) 1Q 2Q 3Q 4Q 1Q 2Q (a) LCM inventory valuation adjustments are excluded from Refining & Marketing income Refining & Marketing income (loss) from operations (a) (497) (1,544) (1,569) (1,579