Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Q3 2018 Earnings Presentation
24 slides from Marathon Petroleum's earnings presentation, Nov 1, 2018
Slide 1: Third-Quarter 2018 Earnings
Third-Quarter 2018 Earnings November 1, 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 acquisition of Andeavor and include expectations, estimat
Slide 3: Opening Comments
Opening Comments Reported third-quarter earnings of $737 million or $1.62 per share Focus on operational excellence and disciplined capital strategy – $3.2 billion returned to shareholders through the third quarter Closed Andeavor acquisition on October 1 with overwhelming shareholder support
Slide 4: Third-Quarter Highlights
Third-Quarter Highlights Reported third-quarter earnings of $737 million, or $1.62 per diluted share, and income from operations of $1,403 million – Refining & Marketing: segment income from operations of $666 million, driven by 97 percent utilization and completed successful turnarounds at the Ca
Slide 5: Speedway Conversion
Speedway Conversion Retail has converted roughly 90 stores to Speedway in October and expect to complete approximately 200 sites by the end of 2018 5
Slide 6: Third-Quarter 2018 Earnings
Third-Quarter 2018 Earnings 3Q 2018 3Q 2017 Earnings* $737 MM $903 MM Earnings per Diluted Share* $1.62 $1.77 Earnings* Earnings per Diluted Share* $3.92 2,000 $1,829 4 1,500 $1,416 1.62 737 3 $2.73 $/Share $MM 1,000 903 2 1.77 1,055 2.27 500 1 483 0.93 30 37 0.06 0.08 0 0 2017 2018 2017 2018 1Q 2Q
Slide 7: Earnings: 3Q 2018 vs. 3Q 2017 Variance Analysis
Earnings* 3Q 2018 vs. 3Q 2017 Variance Analysis 1,000 903 900 193 800 324 737 700 (20) (103) 600 (82) $MM 500 400 (431) (47) 300 200 100 0 3Q 2017 Refining & Speedway Midstream** Items not Interest and Income Noncontrolling 3Q 2018 Marketing** Allocated to Other Financing Taxes Interests Segments Co
Slide 8: Refining & Marketing Segment Income
Refining & Marketing Segment Income 3Q 2018 vs. 3Q 2017 Variance Analysis 1,600 1,400 102 283 (33) 1,200 1,097 (166) (36) 1,000 (51) $MM (111) Crude (53) 800 Product (47) Volumetric 64 666 600 (419) 400 200 0 3Q 2017 *LLS **Sweet/ **LLS/WTI **LLS **Market Other ***Direct ***Other 3Q 2018 6-3-2-1 Sou
Slide 9: Speedway Segment Income
Speedway Segment Income 3Q 2018 vs. 3Q 2017 Variance Analysis 250 208 10 200 (16) (28) 161 150 (8) (5) $MM 100 50 0 3Q 2017 Light Product Merchandise Operating Depreciation Other 3Q 2018 Margin Margin Expense* *Reflects operating, selling, general and administrative expenses. 9
Slide 10: Midstream Segment Income
Midstream Segment Income 3Q 2018 vs. 3Q 2017 Variance Analysis 800 361 700 679 (37) 600 500 $MM 400 355 300 200 100 0 3Q 2017 MPLX*,** MPC Retained Equity and Other 3Q 2018 Affiliates** *Results related to refining logistics and fuels distribution dropdown into MPLX, which totaled $230 MM for the qu
Slide 11: Total Consolidated Cash Flow
Total Consolidated Cash Flow 3Q 2018 8,000 994 7,000 1,590 6,000 (408) 4,999 (1,406) 31 4,992 5,000 (607) (201) $MM 4,000 3,000 2,000 1,000 0 6/30/2018 Operating Working Net Debt Cash Capital Return of Net Distributions Other 9/30/2018 Cash Cash Flow Capital Expenditures, Capital to to Cash Balance
Slide 12: Capitalization and Select Cash-Flow Data
Capitalization and Select Cash-Flow Data MPC MPC MPLX As of September 30, 2018 Excluding Consolidated Adjustments(a) ($MM except ratio data) MPLX Debt 18,449 12,890 5,559 Mezzanine equity 1,003 1,003 - Equity 19,031 8,367 10,664 Total capitalization 38,483 22,260 16,223 Debt-to-capital ratio (book)
Slide 13: Illustrative 2018 Capital Forecast
Illustrative 2018 Capital Forecast We intend to provide 4th quarter and 2019 guidance at our Investor Day in December as well as provide preliminary reporting framework ($ MM) Previous(a) Current(a) MPC (excluding MPLX) 1,600 1,600 ANDV (excluding ANDX) 1,070 1,200 Total Corporate Capital (excludi
Slide 14: Appendix
Appendix 14
Slide 15: Earnings
Earnings 2017 2018 (a)On February 1, 2018, we contributed ($MM unless otherwise noted) certain refining logistics assets and fuels 4Q 1Q 2Q 3Q distribution services to MPLX. The results of these businesses are reported Refining & Marketing segment income (loss) (a) 732 (133) 1,025 666 in the Midstre
Slide 16: Reconciliation: Adjusted EBITDA to Net Income
Reconciliation Adjusted EBITDA to Net Income Attributable to MPC 2017 2018 ($MM) LTM 4Q 1Q 2Q 3Q Net Income attributable to MPC 2,016 37 1,055 737 3,845 Add: Net interest and other financial costs 209 183 195 240 827 Net income attributable to inco noncontrolling interests 109 198 180 204 691 Provis
Slide 17: Reconciliation: Adjusted EBITDA Related to MPLX
Reconciliation Adjusted EBITDA Related to MPLX to MPLX Net Income 2017 2018 ($MM) LTM 4Q 1Q 2Q 3Q MPLX Net Income 241 423 456 516 1,636 Add: Net interest and other financial costs 96 130 151 153 530 Provision (benefit) for income taxes (2) 4 1 3 6 Depreciation and amortization 168 176 188 201 733 Ad
Slide 18: Cash Provided from Operations Before Changes in Working Capital Reconciliation
Cash Provided from Operations Before Changes in Working Capital Reconciliation to Net Cash Provided by Operations 2017 2018 ($MM) 4Q 1Q 2Q 3Q Net cash provided by (used in) operations(a) 2,745 (137) 2,386 1,182 Less changes in working capital: Changes in current receivables (797) 96 (321) (484) Chan
Slide 19: Reconciliation of Refining & Marketing Margin to Income from Operations
Reconciliation of Refining & Marketing Margin to Refining & Marketing Income from Operations ($MM) 3Q 2018 3Q 2017 Refining & Marketing income from operations 666 1,097 Plus: Refinery direct operating costs(a) 992 933 Refinery depreciation & amortization 241 249 Other: Operating expenses, net(a)(b)
Slide 20: Reconciliation of Speedway Total Margin to Income from Operations
Reconciliation of Speedway Total Margin to Speedway Income from Operations (a)Speedway gasoline and distillate margin is ($MM) 3Q 2018 3Q 2017 defined as the price paid by consumers less the cost of refined products, including transportation, Speedway income from operations 161 208 consumer excise t
Slide 21: Refining & Marketing Segment Income 3Q vs 2Q
Refining & Marketing Segment Income 3Q 2018 vs. 2Q 2018 Variance Analysis 1,300 206 1,200 1,100 1,025 (88) (13) (42) 1,000 900 (125) 800 (130) 666 $MM 700 Crude (106) 600 Product (42) (159) (8) 500 Volumetric 18 400 300 200 100 0 2Q 2018 *LLS **Sweet/ **LLS/WTI **LLS **Market Other ***Direct ***Othe
Slide 22: Refining & Marketing Indicative Margin
Refining & Marketing Indicative Margin 3Q 2018 3,000 251 2,663 237 9 2,500 804 (138) Crude (436) 2,000 Product 369 Volumetric 318 1,500 $MM 1,500 (1,233) 1,000 666 500 (764) 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 Ma
Slide 23: MPLX Distributions and Sales Proceeds to MPC
MPLX Distributions and Sales Proceeds to MPC* 300 $288 $316 200 $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 3Q18 LP Distributions GP Di
Slide 24: Marathon
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