Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Q4 2019 Earnings Presentation
33 slides from Marathon Petroleum's earnings presentation, Jan 29, 2020
Slide 1: Fourth Quarter 2019 Conference Call
Slide 2: Forward Looking Statements
Forward Looking Statements Forward-Looking Statements This presentation contains forward-looking statements within the meaning of federal securities laws regarcing Marathon Petroleum Corporation (MPC). These forward-looking statements relate to, among other things, expectations, estimates and projec
Slide 3: Strategic Overview & Updates
Strategic Overview & Updates
Slide 4: Midstream Strategic Update
Midstream Strategic Update = Reduced MPLX 2020 growth capex target to ~$1.5 B — $500 million lower than prior guidance " Targeting growth capex of ~$1.0 B in 2021 = Disciplined growth plan targeting 75% of spend in L&S MPLX targeting positive free cash flow, after capital investments and distributio
Slide 5: Fourth Quarter Highlights
Fourth Quarter Highlights IM. = Adjusted Earnings per Share ($/share) @ = Adjusted EBITDA Net Income Cash from Operations, excluding Working Capital Realized Synergies Share Repurchases + Dividends
Slide 6: Fourth Quarter Highlights (cont'd)
Fourth Quarter Highlights (cont'd) 4Q 2019 vs. 3Q 2019 | Adjusted EBITDA Fl Reconciliation to Net Income l 3,500 3,065 v 81 51 3,172 —— — 3,000 37 2,500 2,000 = - = 1,200 4,500 1,000 500 1,131 443 a ce) 3Q 2019 Midstream Retail Refining & Corporateand 4Q2019 Impairments Turnaround Interest, AQ 2019
Slide 7: Realized Synergies - 4Q19 and Full-Year 2019
Realized Synergies - 4Q19 and Full-Year 2019 (.) R&M Retail Midstream Corporate ($ MM) ($ MM) ($ MM) ($ MM) Total: 354 Total: 40 Total: 18 Total: 8 4Q19 realized synergies of $420 million, includes $91 million of one-time synergies offset by $48 million of system integration costs () Full-year 2019
Slide 8: Realized Synergies Reducing Costs and Improving Margins
Realized Synergies Reducing Costs and Improving Margins $1,106 4Q19 Synergies 2019 Synergies = Improved cat cracker yields " Catalyst formulation = Mid-Continent crude supply enhancements optimization * Crude sourcing optimization for * Marine optimization Mid-Continent and West Coast $420 Goods and
Slide 9: Midstream EBITDA
Midstream EBITDA AQ 2019 vs. 3Q 2019 1,400 = Strong MPLX terminal and 3 pipeline throughputs 1,200 9 1,231 = Three new gas processing plants 1,000 and a C2+ fractionator placed in : 800 service = A ; 600 = Purge of Capline completed 400 =" Gray Oak pipeline began initial startup 200 ) 3Q 2019 MPLX O
Slide 10: Retail EBITDA
Retail EBITDA 4Q 2019 vs. 3Q 2019 = Fuel margins of ~29 cpg 800 = 4.7% year-over-year increase in same store merchandise sales 600 12 -A7 = 4Q19 includes $22 MM benefit = related to biodiesel tax credit ® — = 400 = Began diesel branding agreement 500 with Pilot Travel Centers, LLC * Converted over 7
Slide 11: Refining & Marketing Adjusted EBITDA
Refining & Marketing Adjusted EBITDA AQ 2019 vs 3Q 2019 2,000 = Sustained execution with 1,800 — 94% utilization 1.600 asa |_| 195 1,400 > 188 48, = Completed planned s 1,200 maintenance at Garyville 2 1000 and Los Angeles 800 600 = Strong capture of 105% 400 driven by favorable 200 product realizat
Slide 12: Total Consolidated Cash Flow
Total Consolidated Cash Flow AQ 2019 4,500 2,743 4,000 -1 3,500 a 9 — 1 MPC -18 3,000 | MPLX -1 2,500 $MM 2,000 . , -1,823 137 1,525 a 1,527 -293 1,000 500 ie} 9/30/2019 Operating Cash Working Net Debt Capital Return of Net Distributions Other 12/31/2019 Cash Balance Flow before Capital Expenditures
Slide 13: Strong Balance Sheet Supports Exceptional Value
Strong Balance Sheet Supports Exceptional Value 2.0x 1.5x 1.0x 0.5x 0.0x © Calculated using face value of foal debt and LIM adjusted pro forma EBIDA. Excludes MPLX debt and EBIDA, includes MPLX distibutions to MPG; refer to appendix for rec MPC Debt-to-LTM Adj. EBITDA 2011 2012 2013 2014 2015 2016 2
Slide 14: First-Quarter 2020 Outlook
First-Quarter 2020 Outlook Other ath Crude Total , cae Depreciation Charge/ Operating Distribution Planned Throngnpet | Feedstocks | Throughput Cost (b) Cost (c) Turnaround, 2nd a) Throughput (a) a) mortization in MBPD Percent of Throughput SE 4 $MM $MM $MM Gulf Coast Region 1,100 175 1,275 41% 59%
Slide 15: 2020 Capital Outlook
2020 Capital Outlook MPC excluding MPLX -$2.6 B = Refining & Marketing - $1,550 MM ts) 36 Yo — Maintenance - $450 MM Refining & Marketing = Retail - $550 MM = MPC Midstream — $300 MM = Corp/Other - $200 MM 40% MPLX MPLX - $1.8 B = Growth - $1,500 MM = Maintenance - $250 MM 4% Corp/Other 15
Slide 16: Questions & Answers
Slide 17: Appendix
Appendix
Slide 18: Commercial Diesel Branding Agreement
Commercial Diesel Branding Agreement Impact on retail segment results Branding Agreement with Pilot Travel Centers Fuel volumes and associated margins included in other income LLC (PTC) " ~330 Speedway and Pilot locations 1,200 " PTC to supply, price, and sell diesel at select *°°° Speedway commerci
Slide 19: Capitalization and Select Balance Sheet Data
Capitalization and Select Balance Sheet Data i] his x : MPC MPLX MPC Excluding ‘\. [ieg, MS of December 31, 2019 Consolidated Adjustments® MPLX uN ($MM except ratio data) Total Debt 28,838 19,713 9,125 Total Equity © 43,107 11,768 31,339 Debt-to-Capital Ratio 40% 2 23% 1,527 1,512 Cash and cash equi
Slide 20: Refining & Marketing Segment Income
Refining & Marketing Segment Income AQ 2019 5,000 4 153 219 | 7 4,000 + 12 314 3,275 = Volume 315 3,000 + Product 640 = Crude -736 = -1,765 A 2,000 + 14 -1,299 1,000 + 912 -583 04 T T T T T T T r r r r Blended Sweet Sour Market Other R&M Biodiesel Operating Distribution Other = Turnaround R&M Crack
Slide 21: Refining & Marketing Margins — Market vs. Realized
$MM Refining & Marketing Margins — Market vs. Realized 5,000 4,500 4,000 3,500 3,000 2,500 R&M Margin Indicator -417 90% Capture Adjustment Actual Capture Impact R&M Actual Margin Total system capture of 105% vs. ~90% historical average, key factors included: = Strong gasoline price realizations = L
Slide 22: Distribution Costs - Components
Distribution Costs - Components 1,500 371 1,299 1,200 ATA = 900 Ss A 600 454 300 ) Third Party MPLX MPLX Fuels Distribution and 4Q 2019 Fees and Other Fees Refinery Logistics Fees Distribution Costs Total distribution fees of $845 million paid to MPLX and $438 million returned to MPC through distrib
Slide 23: Refining & Marketing Segment Income
Refining & Marketing Segment Income AQ 2019 vs. 3Q 2019 Variance Analysis ‘Volume +42 ! 14,400 + ' Product +531 | | Crude -78 1,200 + 1,000) — gg3 9142 s -188 -48 2 800 | 22 A 600 + 127 21 2: 400 + 200 + -756 0 3Q 2019 Blended Sour Sweet Market Other Biodiesel Tax Operating Distribution Turnaround A
Slide 24: Earnings
Earnings ($MM unless otherwise noted) eagre & Marketing segment income (133) 4,025 666 923 (334) 906 883 912 Retail segment income 95 159 161 613 170 493 442 477 Midstream segment income 567 617 679 889 908 878 919 889 Corporate and other unallocated items (89) (81) (99) (233) (191) (179) (198) (237
Slide 25: Reconciliation
Reconciliation Net Income Attributable to MPC to Adjusted Net Income Attributable to MPC Net income attributable to MPC Pre-tax adjustments: Transaction-related costs Impairments Equity method investment restructuring gains Purchase Accounting Inventory-Related Effects MPLX debt restructuring costs
Slide 26: Reconciliation
Reconciliation Net Income Attributable to MPC to Adjusted EBITDA and LTM Adjusted Pro Forma EBITDA Net Income (loss) attributable to MPC Add: Net interest and other financial costs 306 322 317 302 1,247 Net income attributable to noncontrolling interests 266 261 272 (181) 618 Provision for income ta
Slide 27: Reconciliation
Reconciliation Net Income Attributable to MPC to EBITDA, Adjusted EBITDA and Adjusted Pro Forma EBITDA Net Income {loss} attributable to MPC 3,389 2,524 1174 3,432 2,780 2,637 Add: Net interest and other financial costs 109 216 564 674 1,003 1,247 Net income attributable to. noncontrolling interests
Slide 28: Reconciliation
Reconciliation MPLX Net Income to EBITDA Related to MPLX MPLX Net Income Add: Net interest and other financial costs Provision (benefit) for income taxes Impairments Depreciation and amortization EBITDA related to MPLX Note: Incluces pro forma financials related to ANDX 690 656 689 (573) 1,462 224 2
Slide 29: Reconciliation
Reconciliation Cash Provided by Operations to Operating Cash Flow Before Changes in Working Capital Cash provided by operations 1,623 2,622 2,787 2,409 Less changes in working capital: Changes in current receivables (1,037) (713) 135 (270) Changes in inventories (4) 744 (558) (548) Changes in curren
Slide 30: Reconciliation
Reconciliation Refining & Marketing Income from Operations to Refining & Marketing Margin Refining & Marketing income (lass) from operations Plus: Refining operating costs Refining depreciation and amortization Refining planned turnaround costs Distribution costs® Distribution depreciation and amort
Slide 31: Reconciliation
Reconciliation Segment Income from Operations to Segment Adjusted EBITDA and Adjusted EBITDA Refining & Marketing Segment Segment income from operations (433) 1,025 666 923 (334) 906 883 912 Add: Depreciation and amortization 252 252 257 413 427 411 397 430 Refining planned turnaround costs 173 62 1
Slide 32: Reconciliation
Reconciliation Retail Income from Operations to Retail Total Margin Retail income from operations Plus (Less): Operating, selling, general and administrative expenses Depreciation and amortization Income from equity method investments Net gain on disposal of assets Other income Retail total margin R
Slide 33: Marathon
MARATHON ®