Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Q1 2021 Earnings Presentation
32 slides from Marathon Petroleum's earnings presentation, May 4, 2021
Slide 1: First Quarter 2021 Earnings Conference Call
First Quarter 2021 Earnings Conference Call May 4, 2021 1
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, expectations, estimates and projections concerning the busine
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 $21 billion Speedway sale close to completion Progressing commitment to capital return and strengthening the balance sheet Repositioning the portfolio - Martinez renewables facility progress - Advancing projects to lower carbon intensity Continuing focus on cost and capital d
Slide 5: Priorities for Speedway Proceeds
Priorities for Speedway Proceeds $21 Billion Enhance: Core Liquidity ~$4.5B Taxes Reduce: MPC Standalone Debt Appropriate leverage Solid investment grade credit profile ~$16.5B Net Proceeds Return: Capital to Shareholders Share repurchases Determining optimal methods/timing Uniquely position
Slide 6: Lowering the Cost Structure
Lowering the Cost Structure Refining Operating Costs Corporate Costs ($ / Barrel) ($ Millions) $6 $200 $5 $4 $100 4Q 1Q 2Q 3Q 4Q 1Q (a) 4Q 1Q 2Q 3Q 4Q 1Q 2019 2020 2020 2020 2020 2021 2019 2020 2020 2020 2020 2021 Reduced 2020 operating expenses by Continued focus on strict cost over $1 billion mana
Slide 7: Commitment to ESG
Commitment to ESG Environment Social Governance 30% reduction in Transparent reporting: GHG Scope 1 & 2 Human Rights Policy included TCFD, SASB, GRI, CDP emissions intensity by 2030 in sustainability reporting Compensation includes 20% 50% reduction in Methane Sustainability Metric Ongoing commitmen
Slide 8: First Quarter Highlights
First Quarter Highlights $ Millions (unless otherwise noted) 1Q21 Adjusted Loss per Share ($/share) (a) $(0.20) Adjusted EBITDA $1,552 Cash from Continuing Operations, excluding Working Capital $613 Dividends $379 (a) Based on weighted average diluted shares 8
Slide 9: Adjusted EBITDA to Net Income: 1Q 2021 vs. 4Q 2020
Adjusted EBITDA to Net Income 1Q 2021 vs. 4Q 2020 Adjusted EBITDA Reconciliation to Net Income 2,000 725 9 1,600 1,552 5 332 -94 Discontinued -70 Operations 1,200 $ Millions 907 800 426 1,220 Discontinued Continuing Operations Operations 400 -958 481 Continuing Operations 0 -766 -242 -400 4Q 2020 Re
Slide 10: Refining & Marketing: 1Q 2021 vs. 4Q 2020
Refining & Marketing 1Q 2021 vs. 4Q 2020 27 23 69 Refining margin 0 9 recovery across all 162 regions -200 225 $ Millions 83% utilization during the quarter -400 233 Continued execution -600 on cost control -702 -800 4Q 2020 USGC Mid-Con West Coast Operating Distribution Other 1Q 2021 Adj, EBI
Slide 11: Midstream: 1Q 2021 vs. 4Q 2020
Midstream 1Q 2021 vs. 4Q 2020 1,500 13 1,322 Through-cycle EBITDA 1,317 -8 stability 1,000 Continued progress on $ Millions reducing operating expenses 500 Continued progress on organic growth projects 0 4Q 2020 MPLX Other 1Q 2021 Adj. EBITDA (a) Midstream Adj. EBITDA (a) Excludes winter storm
Slide 12: Speedway - Discontinued Operations
Speedway - Discontinued Operations 1Q 2021 vs. 4Q 2020 426 400 Fuel and merchandise 11 volumes impacted by usual -67 332 -28 -10 seasonality $ Millions 200 Same store merchandise sales up 7% year-over-year Fuel margins of ~26 cpg 0 4Q 2020 Fuel Merchandise Operating Other 1Q 2021 Adj. EBITDA E
Slide 13: Total Consolidated Cash Flow
Total Consolidated Cash Flow 1Q 2021 Discontinued 2,000 Continuing Operations Operations MPC 975 MPLX -110 1,500 865 613 $ Millions 1,000 189 -379 758 -348 180 -87 Disc. Ops 555 500 Disc. Ops -355 -475 Continuing Operations Continuing Operations 0 12/31/2020 Operating Working Capital Net Debt Return
Slide 14: Second-Quarter 2021 Outlook
Second-Quarter 2021 Outlook Other Crude Total Depreciation Charge/ Sweet Sour Operating Distribution Turnaround Throughput Throughput and Feedstocks Crude Crude Cost (b) Cost (c) Costs (a) (a) Amortization Throughput (a) $/BBL of Total in MBPD Percent of Throughput $MM $MM $MM Throughput Gulf Coast
Slide 15: Questions & Answers
7 72= BEE == [NT A = 22) a
Slide 16: Appendix
Appendix 16
Slide 17: Continuous Focus on ESG Performance
Continuous Focus on ESG Performance ISS ESG QualityScore rating of 1 Rating improved from a 3 for Social (highest score) for Social Overall Overall from August 2020 Included in 2020 Dow Jones Sustainability Index for North America 2nd year included 2021 Human Rights Campaign Achieved highest possibl
Slide 18: Sustainability & Climate Perspectives Reports Recognitions Highlights
Sustainability & Climate Perspectives Reports Recognitions Included in Dow Jones Sustainability Index for North America Lower Carbon Intensity EPA ENERGY STAR Partner of the Year – Sustained Excellence Award Increase Renewable Fuels Production and Energy Use Human Rights Campaign Corporate Equality
Slide 19: Manageable Leverage and Maturities
Manageable Leverage and Maturities Debt-to-LTM Adj. EBITDA (a) 2.5x 34x $ Millions 2.0x YE19 YE20 1Q21 (unless otherwise noted) 1.5x Total Debt (excl. MPLX) 9,125 11,575 12,555 1.0x 0.5x LTM Adj. EBITDA (excl. MPLX) 5,506 (1,454) (1,602) 0.0x 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 LTM MPL
Slide 20: Capitalization and Select Balance Sheet Data
Capitalization and Select Balance Sheet Data MPC MPLX MPC Excluding As of March 31, 2021 Consolidated Adjustments (a) MPLX ($MM except ratio data) Total Debt 32,609 20,054 12,555 Total Equity(b) 29,479 10,194 19,285 Debt-to-Capital Ratio(c) 53% - 39% Cash and cash equivalents 758 24 734 (a) Adjustme
Slide 21: Refining & Marketing Segment Loss
Refining & Marketing Segment Loss 1Q 2021 3,000 82 2,346 321 114 0 2,000 1,829 Volume 274 Product 474 $ Millions Crude -666 1,000 -1,188 -31 -598 0 -1,197 62 -590 -1,000 Blended Sweet Sour Market Other R&M Margin Operating Winter Storm Distribution Turnaround Other R&M Crack Differential Differentia
Slide 22: Refining & Marketing Margins – Market vs. Realized
Refining & Marketing Margins – Market vs. Realized 2,500 196 2,346 2,263 Total system capture of 104%, key factors included: -113 2,000 Favorable pricing of non- transportation fuels relative to $ Millions index 1,500 Pricing of petrochemicals relative to index Volumetric gains 1,000 R&M Margi
Slide 23: Refining & Marketing Segment Loss: Variance Analysis
Refining & Marketing Segment Loss 1Q 2021 vs. 4Q 2020 Variance Analysis 0 -500 69 9 871 37 305 9 -598 -41 -46 -31 $ Millions -1,000 -201 Volume 81 Product - 311 -1,500 Crude 29 -1,579 -2,000 4Q 2020 Blended Sour Sweet Market Other Winter Storm LIFO Operating Distribution Turnaround, 1Q 2021 Segment
Slide 24: Income Summary for Operations
Income Summary for Operations 2020 2021 ($MM unless otherwise noted) 1Q 2Q 3Q 4Q 1Q (a) Corporate reflects corporate costs that Refining & Marketing segment income (loss) (497) (1,544) (1,569) (1,579) (598) are no longer allocated to Speedway under discontinued operations accounting. Midstream segme
Slide 25: Reconciliation
Reconciliation Net Loss Attributable to MPC to Adjusted Net Loss Attributable to MPC (a) Income taxes for adjusted earnings was calculated by applying a combined federal ($MM) 1Q21 1Q20 and state statutory tax rate of 24% to the adjusted pre-tax loss for these periods. The Net Loss attributable to M
Slide 26: Reconciliation
Reconciliation Net Income (Loss) Attributable to MPC to Adjusted EBITDA and LTM Adjusted Pro Forma EBITDA ($MM) 2Q20 3Q20 4Q20 1Q21 LTM Net Income (loss) attributable to MPC 9 (886) 285 (242) (834) Add: Net interest and other financial costs 345 364 338 357 1,404 Net income (loss) attributable to no
Slide 27: Reconciliation
Reconciliation Net Income Attributable to MPC to EBITDA, Adjusted EBITDA and Adjusted Pro Forma EBITDA ($MM) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net Income (loss) attributable to MPC 2,389 3,389 2,112 2,524 2,852 1,174 3,432 2,780 2,637 (9,826) Add: Net interest and other financial cos
Slide 28: Reconciliation
Reconciliation MPLX Net Income to Adjusted EBITDA Related to MPLX ($MM) 2Q20 3Q20 4Q20 1Q21 LTM MPLX Net Income 655 674 700 748 2,777 Add: Net interest and other financial costs 223 224 219 225 891 Provision for income taxes - 1 1 1 3 Impairments - 27 51 - 78 Restructuring expenses - 36 1 - 37 Winte
Slide 29: Reconciliation
Reconciliation Cash Provided by Operations to Continuing Operating Cash Flow Before Changes in Working Capital 2021 ($MM) 1Q Cash provided by operating activities from continuing operations 265 Less changes: Current receivables (1,723) Inventories (408) Current accounts payable and accrued liabiliti
Slide 30: Reconciliation
Reconciliation Segment Income (Loss) from Operations to Segment Adjusted EBITDA and Adjusted EBITDA 2020 2021 ($MM) 1Q 2Q 3Q 4Q 1Q Refining & Marketing Segment Segment income (loss) from operations (497) (1,544) (1,569) (1,579) (598) (a) As of August 2, 2020 Speedway Add: Depreciation and amortizati
Slide 31: Reconciliation
Reconciliation Refining & Marketing Loss from Operations to Refining & Marketing Margin 2020 2021 ($MM) 1Q 2Q 3Q 4Q 1Q (a) LCM inventory valuation adjustments are excluded from Refining & Marketing income Refining & Marketing loss from operations (a) (497) (1,544) (1,569) (1,579) (598) from operatio
Slide 32: Reconciliation
Reconciliation Income from Discontinued Operations to Speedway Total Margin 2020 2021 ($MM) 1Q 2Q 3Q 4Q 1Q (a) LCM inventory valuation adjustments Income from Discontinued Operations 338 406 438 405 307 are excluded from Speedway margin. (b) Speedway fuel margin is defined as the Plus (Less): price