Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Goldman Sachs Global Energy Conference 2018
84 slides from Marathon Petroleum's conference presentation, January 2018
Slide 1: Goldman Sachs Global Energy Conference
Goldman Sachs Global Energy Conference January 2018 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“) and MPLX LP (“MPLX”). These forward-looking statements relate to, among other things, expectations, estimates and projection
Slide 3: Executing Our Strategic Plan and Delivering Results
Executing Our Strategic Plan and Delivering Results Total Shareholder Return Since Spinoff Since 2011 spinoff we have: (6/30/2011) – Returned approximately $13 billion to our shareholders – Consistently grown dividend, 25% CAGR since spin – Increased stable cash flow by more than 5 times 275% – Ex
Slide 4: Delivering Significant Capital Returns for Our Shareholders
Delivering Significant Capital Returns for Our Shareholders ~$13 B returned to shareholders since spin ~$3.7 B in dividends(1) ~$9.6 B in share repurchases Repurchased ~34% $/Share 1.60 $1.52 $MM 12,000 of Outstanding Common Shares 1,400 $1.36 1.40 10,000 1,200 1.20 $1.14 8,000 Cumulative $MM 1,000
Slide 5: Executing Strategic Plan to Enhance Value
Executing Strategic Plan to Enhance Value Significantly accelerate dropdowns to MPLX Exchange of MPC’s economic interest in the general partner (GP) for MPLX LP units Conduct a full and thorough Speedway evaluation Expected ~$4.5 B after-tax cash proceeds from dropdowns and Simplifies stru
Slide 6: Strategic Actions – Status Update
Strategic Actions – Status Update First dropdown in March – transaction value of $2.015 B 1Q17 – ~$250 MM annual EBITDA – ~8x EBITDA multiple Second dropdown in September – transaction value of $1.05 B – ~$138 MM annual adjusted EBITDA(1) – ~7.6x adjusted EBITDA multiple Completed Speedway eva
Slide 7: Agreement to Exchange MPC’s GP Economic Interests
Agreement to Exchange MPC’s GP Economic Interests Completes the announced plan Announced Dec. 15, 2017 and expected to close Feb. 1, 2018 subject to the completion of refining logistics assets and fuels distribution services dropdown(1) Exchanges MPC’s GP economic interests, including IDR’s, for
Slide 8: Exchange Agreement – Cont’d
Exchange Agreement – Cont’d Exchanges MPLX GP/IDR cash distribution requirements to MPC for limited partner unit distributions Expected to be accretive to MPLX distributable cash flow (“DCF”) attributable to common unitholders on a per unit basis in the third quarter and for the full-year 2018 –
Slide 9: MPC and MPLX’s Long-term Strategic Linkage
MPC and MPLX’s Long-term Strategic Linkage MPLX was created in 2012 to grow MPC’s midstream platform Assets and services provided by MPLX are integral to MPC’s operations and MPC is MPLX’s largest customer Earnings streams for assets/businesses sold to MPLX have effectively been converted into
Slide 10: Executed Agreement for Remaining Dropdown to MPLX
Executed Agreement for Remaining Dropdown to MPLX Expect to close February 1, 2018 Total consideration of ~$8.1 B – $4.1 B in cash and 114 million MPLX units – ~$1 B annual EBITDA – Expected to be immediately accretive to MPLX’s distributable cash flow Assets include: – Refining logistics asse
Slide 11: Refining Logistics Overview
Refining Logistics Overview Integrated Tank Farm Assets Supporting MPC’s Operations Tanks Racks ~56 MMBBL storage Multiple rail and truck loading racks Docks Gasoline Blending & Associated Piping Handle ocean- and river-going Piping to connect process units, vessels at Gulf Coast refineries
Slide 12: Fuels Distribution Overview
Fuels Distribution Overview Extensive Range of Scheduling and Marketing Services that Support MPC’s Refining and Marketing Operations Services Description Scheduling Supply and demand balancing Annual EBITDA ~$600 MM Third-party exchange, terminaling and storage Bulk purchases and sale of prod
Slide 13: Refining & Marketing Segment Presentation
Refining & Marketing Segment Presentation Updates effective with 1Q 2018 earnings and expected Feb. 1 dropdown Intersegment earnings associated with refining logistics assets and fuels distribution services after Feb. 1 dropdown to be reflected in Midstream segment Prior period results remain in
Slide 14: Illustrative Impact to Refining & Marketing Segment
Illustrative Impact to Refining & Marketing Segment Fuels Distribution and Refinery Logistics Dropdown “Direct Operating Costs” to exclude costs related to refining logistics assets “Other” R&M Expenses to include fees paid to MPLX for fuels distribution services and refinery logistics assets; corre
Slide 15: Operating Income per Barrel of Crude Throughput
Operating Income per Barrel of Crude Throughput* MPC’s Rank 20 MPC’s Rank during periods of strong West Coast margins** 15 Competitor Range 1 2 10 2 5 $/BBL 1 3 6 1 3 2 3 5 2 7 3 3 3 3 1 3 2 0 -5 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sept
Slide 16: OPEC’s Resolve to Reduce Crude Inventory
OPEC’s Resolve to Reduce Crude Inventory Crude Inventories Crude Days of Supply + Exports 575 34 32 525 30 475 28 Days MMB 26 425 24 22 375 20 325 18 Jan Jun Jul Feb Oct Nov Dec Mar May Apr Aug Sep Jan Jun Jul Feb Oct Nov Dec Mar May Apr Aug Sep 2015 2016 2017 5-yr. Avg. (12-16) Crude inventories
Slide 17: Progress Toward Rebalancing Products
Progress Toward Rebalancing Products Gasoline Days of Supply + Exports Distillate Days of Supply + Exports 30 36 34 28 32 30 26 Days Days 28 24 26 24 22 22 20 20 Jan Jun Jul Feb Oct Nov Dec Mar May Apr Aug Sep Jan Jun Jul Feb Oct Nov Dec Mar May Apr Aug Sep 2015 2016 2017 5-yr. Avg. (12-16) Gasoline
Slide 18: Gasoline Exports Enhance Utilization
Gasoline Exports Enhance Utilization U.S. Total Gross Gasoline Exports Gasoline exports have expanded opportunity 1100 set for U.S. refiners 2014 900 – Summer exports tend to be lower than MBD 2015 winter as more product is consumed 700 domestically 2016 500 2017 U.S. refinery utilization is les
Slide 19: Export Market Remains Robust
Export Market Remains Robust Demand from Latin America for both MPC Export Capacity 600 diesel and gasoline expected to 510 remain strong 500 115 395 While arbitrage to Europe for diesel 400 365 345 is not always open, occasional 320 MBPD 300 opportunities exist 200 Expanding export capacity a
Slide 20: Industry-leading Refining Network
Industry-leading Refining Network High-quality, • Second-largest U.S. refiner linked to extensive logistics and retail network Strategically Located • Process wide range of crude oils, feedstocks and condensate ranging Refineries from two-thirds heavy sour to two-thirds light sweet crudes • Peer-lea
Slide 21: Continuous Peer-leading Refining Performance
Continuous Peer-leading Refining Performance Based on Solomon Associates Benchmarking Study Operating Expenses Energy Efficiency Return on Investment Higher Return Less Efficient Higher Cost 2014 2016 2014 2016 2014 2016 MPC Merchant Group US Avg MPC Merchant Group US Avg MPC Merchant Group US Avg 2
Slide 22: Refining & Marketing Margin Enhancing Investments
Refining & Marketing Margin Enhancing Investments Estimated Returns in Excess of 20% STAR (South Texas Asset Repositioning program) – Increase residual oil (resid) processing • Expand resid hydrocracker • Improve gas oil recovery – Revamp crude unit • Increase distillate and gas oil recovery • Imp
Slide 23: Speedway
Speedway Serving More Than 3 Million Customers Every Day High Quality Network of Retail Locations • Largest company-owned and -operated c-store chain east of Mississippi • Sold ~6 billion gallons of transportation fuels and $5 B in merchandise in 2016 • 2017 capital investments of ~$380 MM Top-tier
Slide 24: Speedway – Industry Leader with Significant Growth Opportunities
Speedway – Industry Leader with Significant Growth Opportunities #1 in EBITDA/store/month vs. public peers $30 Peer Median = $20 M $20 $M $10 $0 Speedway Murphy USA Casey's Couche-Tard Sunoco CST Alon USA Western Refining Industry leading performance with focused retail management team Continued
Slide 25: Strategic Actions Update – Speedway Review
Strategic Actions Update – Speedway Review MPC Board’s Conclusion Announced on September 5, 2017 Maintaining Speedway as an integrated business within MPC drives the greatest long-term value for MPC shareholders – Substantial integration synergies (~$270 - $390 MM per year(1)) – Leverage and liqui
Slide 26: Strategic Actions Update – Speedway Review
Strategic Actions Update – Speedway Review Speedway Integration Synergy Value Announced on September 5, 2017 Annual Value Loss(1) Description ($MM) Wholesale volume Value uplift captured by MPC wholesale sales to Speedway ~$105 - $120 Value MPC’s refineries, supply, and marketing groups create Produ
Slide 27: MPLX Key Investment Highlights
MPLX Key Investment Highlights Diversified large-cap MLP positioned to deliver attractive returns over the long term Forecast distribution growth of ~12% for 2017 and ~10% for 2018 • Largest processor and fractionator in the Marcellus/Utica basins Gathering & • Strong footprint in STACK play and gro
Slide 28: MPLX – Demonstrated Track Record
MPLX – Demonstrated Track Record Strong Financial and Operational Results – 2017 Highlights Delivering results – Consistent growth in EBITDA and DCF – On track for year-over-year distribution growth of ~12% – Multiple quarterly volume records Executing organic growth capital plan – Two new proce
Slide 29: MPLX Delivering Consistent Growth in EBITDA and DCF
MPLX Delivering Consistent Growth in EBITDA and DCF 81% increase in adjusted EBITDA since MarkWest acquisition 95% increase in DCF while maintaining strong coverage ratio 600 1.50 538 500 474 1.40 423 391 Coverage Ratio 400 375 351 1.30 $MM 298 302 300 1.20 200 442 354 387 285 301 318 100 227 236 1.
Slide 30: MPLX – Priorities for 2018
MPLX – Priorities for 2018 Positioning partnership through execution of strategic actions – Expect to close remaining dropdown and IDR exchange on Feb. 1 Execution of organic growth capital plan Deliver attractive returns for unitholders – Forecast ~10% year-over-year distribution growth – Exp
Slide 31: Appendix
Appendix 31
Slide 32: Our Priorities for Value Creation
Our Priorities for Value Creation Maintain Top-tier Safety and Environmental performance Execute Strategic Actions to Enhance Value for Investors Increase Capital Return to Shareholders Grow Higher Valued and Stable Cash-flow businesses Enhance Margins for our Refining operations 32
Slide 33: Strong Operational Performance and Responsible Corporate Leadership
Strong Operational Performance and Responsible Corporate Leadership MPC facilities received from the American Chemistry Council 75% MPC has earned 56 Certificates of Excellence 3 Certificates of Honor 7 Certificates of Achievement of the Environmental Protection Agency’s 93.5 95.5 94.9 Energy Star M
Slide 34: 2017 Citizenship Report Issued
2017 Citizenship Report Issued Excerpts from opening comments from Gary R. Heminger, chairman and chief executive officer This year marks Marathon Petroleum Corporation’s 130th year of providing the most affordable, reliable and plentiful energy the world has ever known. Our diversification into the
Slide 35: Our Health, Environment, Safety and Security Commitment Rises to a New Level
Our Health, Environment, Safety and Security Commitment Rises to a New Level RC14001 combines Responsible Care® and ISO14001 Much more rigorous and prescriptive ISO: International Organization for Standardization – Develops and publishes international standards – Globally recognized Focus on
Slide 36: New Publication
New Publication Excerpts from opening comments from Gary R. Heminger, chairman and chief executive officer and Introduction section While we focus on providing you the returns you expect on your investment, we also look to safeguard the long-term success of your company, understanding that the produ
Slide 37: Strong Liquidity and Capitalization
Strong Liquidity and Capitalization Provides financial flexibility to fund growth projects and pursue business strategies MPC Committed to maintaining investment MPC MPLX As of September 30, 2017 Excluding Consolidated Adjustments(a) grade credit profiles at MPC and MPLX ($MM except ratio data) MP
Slide 38: About MPLX
About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary businesses – Logistics & Storage includes transportation, storage and distribution of crude oil, refined petroleum products and other hydrocarbon-based products
Slide 39: Growth Capital Forecast
Growth Capital Forecast Projects completed in 2017 Est. Completion Logistics & Storage Est. Completion Gathering & Processing Projects Shale Resource Capacity Date Projects Date Rich- and Dry-Gas Gathering(a) Marcellus & Utica N/A Ongoing Utica Build-out projects In Service – 3Q17 Western Oklahoma -
Slide 40: Growth Capital Forecast
Growth Capital Forecast Projects expected to be completed in 2018 Est. Completion Logistics & Storage Est. Completion Gathering & Processing Projects Shale Resource Capacity Date Projects Date Houston I Processing Plant(a) Marcellus 200 MMcf/d 1Q18 Ozark Pipeline Expansion Mid-2018 Sherwood IX Proce
Slide 41: MPLX – Attractive Portfolio of Organic Growth Capital
MPLX – Attractive Portfolio of Organic Growth Capital Logistics & Storage Segment Utica Build-out and related connectivity Industry solution for Marcellus and Utica liquids Multiple investments – estimated to complete throughout 2017 and 1Q 2018 Ozark Pipeline Expansion Crude sourcing optional
Slide 42: March 1, 2017 Dropdown to MPLX
March 1, 2017 Dropdown to MPLX Terminal, pipeline and storage assets Total consideration of $2.015 B – 62 light product terminals with ~24 million barrels of – $1.511 B in cash and $504 MM in MPLX equity storage capacity – Represents ~8 times EBITDA multiple – 11 pipeline systems consisting of 6
Slide 43: Sept. 1, 2017 Dropdown to MPLX
Sept. 1, 2017 Dropdown to MPLX Assets include MPC’s ownership interests: Total consideration of $1.05 B – Explorer Pipeline Company, representing a – $630 MM in MPLX equity and $420 MM in cash 24.51 percent ownership interest in the company – Represents 7.6 times EBITDA multiple – Lincoln Pipeli
Slide 44: Logistics & Storage
Logistics & Storage Segment Overview High-quality, well-maintained assets that are integral to MPC – Owns, leases, operates, or has interest in ~4,500 miles of crude oil pipelines and ~5,500 miles of product pipelines Headquarters – 62 light product terminals with ~24 million barrels MPLX Pipeline
Slide 45: MPLX – Pipeline Acquisitions Announced in 2017
MPLX – Pipeline Acquisitions Announced in 2017 Extending the Footprint of the L&S Segment OzarkBakken PipelinePipeline Acquisition – $500 MM investment – ~9.2% equity interest in the Dakota Access Pipeline (DAPL) and the Energy Transfer Crude Oil Pipeline (ETCOP) projects – Expected to deliver ~520
Slide 46: MPLX – Executing a Comprehensive Utica Strategy
MPLX – Executing a Comprehensive Utica Strategy Phased Infrastructure Investment Cornerstone Pipeline commenced operations in Oct. 2016 Hopedale pipeline connection completed Dec. 2016 Harpster-to-Lima pipeline fully operational in July 2017 Links Marcellus and Utica condensate and natural g
Slide 47: Gathering & Processing
Gathering & Processing Segment Overview • Ethane Raw Gathering • Propane Processing Mixed Fractionation NGL Natural Gas and • Normal Butane Plants NGLs Facilities Products • Isobutane Production Compression • Natural Gasoline One of the largest NGL and natural gas midstream service providers – Gat
Slide 48: Natural Gas Supply Growth Forecast
Natural Gas Supply Growth Forecast Marcellus/Utica Basin is the Leading Growth Play ~43% of total U.S. growth is expected to occur in Northeast Total U.S. natural gas Northeast supply is forecasted to Denver-Julesburg grow by ~20 Bcf/d from 2017 to 2027 1.1 Bcf/d 8.6 Bcf/d Anadarko MPLX well-pos
Slide 49: MPLX Strengthens Leading Position in Northeast
MPLX Strengthens Leading Position in Northeast Announced 50/50 joint venture with Antero Midstream in 1Q 2017 Supports Antero Resources’ significant production growth profile in the Marcellus PENNSYLVANIA Shale OHIO – Long-term, fee-based agreement and significant acreage dedication HOPEDALE Com
Slide 50: MPLX – Northeast Operations Well-Positioned in Ethane Market
MPLX – Northeast Operations Well-Positioned in Ethane Market Ethane demand growing as exports and Ohio steam cracker development continues in Pennsylvania Gulf Coast and Northeast Bluestone MPLX well-positioned to support producer customers’ rich-gas Harmon Creek development with extensive distr
Slide 51: Major Residue Gas Takeaway Expansion Projects Originate at MPLX Facilities
Major Residue Gas Takeaway Expansion Projects Originate at MPLX Facilities New takeaway pipelines expected to improve Northeast basis differentials MPLX processing complexes: – Access to all major gas residue gas takeaway pipelines – Provide multiple options with significant excess residue capac
Slide 52: MPLX – Marcellus/Utica Overview
MPLX – Marcellus/Utica Overview 3.8 Bcf/d Gathering, 5.8 Bcf/d Processing & 531 MBPD C2+ Fractionation Capacity HOPEDALE FRACTIONATION COMPLEX BLUESTONE COMPLEX PENNSYLVANIA HARMON CREEK COMPLEX (currently under construction) OHIO HOUSTON COMPLEX MarkWest Joint Venture with EMG OHIO CONDENSATE MarkW
Slide 53: MPLX – Marcellus/Utica Processing Capacity
MPLX – Marcellus/Utica Processing Capacity Building Infrastructure to Support Basin Volume Growth Currently operate ~66% of processing capacity in Marcellus/Utica basin 8 ~7.0 Bcf/d processing capacity by end of 2018 2017 plant completions 6 Sherwood VII (in service 1Q17) Sherwood VIII (in service 3
Slide 54: MPLX – Marcellus/Utica Fractionation Capacity
MPLX – Marcellus/Utica Fractionation Capacity Building Infrastructure to Support Growing C2 and C3+ Demand Currently operate ~55% of fractionation capacity in Marcellus/Utica basin 700 ~631 MBPD fractionation capacity by end of 2018 600 2017 plant completions Hopedale III C3+ (in service 1Q17) 500 B
Slide 55: MPLX – Gathering & Processing Segment
MPLX – Gathering & Processing Segment Marcellus & Utica Operations Processed Volumes Gathering Available Average – Record volumes averaged over 2.3 Bcf/d Utilization Area Capacity Volume (%) (MMcf/d)(a) (MMcf/d) – Third-quarter volumes up ~25% versus Marcellus 4,520 3,986 88% the same quarter last
Slide 56: MPLX – Gathering & Processing Segment
MPLX – Gathering & Processing Segment Marcellus & Utica Fractionation Record fractionated volumes of Fractionated Volumes ~365 MBPD Available Average Utilization Area Capacity Volume First full quarter of operations for (%) (MBPD)(a)(b) (MBPD) second de-ethanization plant at 3Q17 Total C3+ 287 2
Slide 57: MPLX – Gathering & Processing Segment
MPLX – Gathering & Processing Segment Southwest Operations Processed Volumes Continued construction of gas processing plants in the Southwest Available Average Utilization Area Capacity Volume (%) (MMcf/d)(a) (MMcf/d) – Delaware Basin (Argo) West Texas(b) 200 197 99% – STACK (Omega) East Texas 600
Slide 58: MPLX – Expanding Southwest Position
MPLX – Expanding Southwest Position to Support Growing Production in High Performance Resource Plays Cana-Woodford Permian Hidalgo Complex 200 MMcf/d Eddy Permian Arapaho Complex Basin Blaine Kingfisher Dewey Rich-gas Newfield Argo Complex Delaware pipeline STACK 200 MMcf/d – Q1 2018 Basin Roger Mil
Slide 59: MPLX – Logistics & Storage Contract Structure
MPLX – Logistics & Storage Contract Structure Fee-based assets with minimal commodity 2016 Revenue – Customer Mix exposure(c) 6% MPC has historically accounted for $51 – over 85% of the volumes shipped on MPLX’s 20% MM crude and product pipelines – 100% of the volumes transported via MPLX’s $171
Slide 60: MPLX – Gathering & Processing Contract Structure
MPLX – Gathering & Processing Contract Structure Durable long-term partnerships across leading basins Marcellus Utica Southwest Resource Play Marcellus, Upper Devonian Utica Haynesville, Cotton Valley, Woodford, Anadarko Basin, Granite Wash, Cana-Woodford, Permian, Eagle Ford Producers 14 – includin
Slide 61: MPLX – Strong Financial Flexibility to Manage and Grow Asset Base
MPLX – Strong Financial Flexibility to Manage and Grow Asset Base Committed to maintaining ($MM except ratio data) As of investment grade credit profile 9/30/17 Cash and cash equivalents 3 $2.25 B senior notes issued Total assets 19,238 1Q 2017 Total debt(a) 7,051 ~$2.1 B of available liquidit
Slide 62: MPLX – Long-Term Value Objectives
MPLX – Long-Term Value Objectives Deliver Sustainable Distribution Growth rate that provides attractive total unitholder returns Drive Lower Cost of Capital to achieve most efficient mix of growth and yield Execute and expand Robust Portfolio of Organic Growth Projects in support of producer c
Slide 63: Speedway Retail Network
Speedway Retail Network 64 235 12 304 115 118 310 488 60 Conn. Del. 1 4 Speedway 147 62 Mass. 110 Largest company-owned 39 278 N.J. 71 and -operated c-store chain 52 R.I. 20 3 east of the Mississippi ~2,730 locations in 21 states 241 As of Sept. 30, 2017 63
Slide 64: Speedway – Overview of Hess Retail acquisition
Speedway Overview of Hess Retail acquisition Transaction closed on September 30, 2014 1,245 company operated locations Transport fleet with capacity to transport ~1 billion gal/yr. Pipeline shipper history in various pipelines, including ~40 MBPD on Colonial Pipeline Prime undeveloped real
Slide 65: Speedway Exceeding Expected Acquisition-related Synergies
Speedway Exceeding Expected Acquisition-related Synergies Continuing to focus on marketing enhancement opportunities 2016 actual synergies of $180 MM exceeded prior projection Synergies and Marketing Enhancements 250 225 200 190 180 149 $MM 150 120 100 75 47 50 20 0 2014E 2014 2015E 2015 2016E 2
Slide 66: Speedway – Focus on LPBE
Speedway – Focus on LPBE 12.39 Each 1.00 cent per 12 gallon improvement = ~$60 MM annual 10 pretax earnings Light Product Breakeven (cpg) 8 7.35 Measure of operating efficiency and 6 merchandise contribution to total 5.41 expense 4 ~26% Potential to drive substantial value in the 2.56 reduction
Slide 67: Speedy Rewards Loyalty Program
Speedy Rewards Loyalty Program ® Highly successful loyalty program Customers earn points on every purchase Customers redeem points for free merchandise and fuel discounts Averaged more than 5.7 million active Speedy Rewards members in 2016, and continues to grow as we attract new members in
Slide 68: Private Label Products
Private Label Products Higher Sales and Margins Better Value Proposition for Consumers Promotes Brand Awareness and Loyalty Differentiation from Competitors 68
Slide 69: Speedway Strong and Consistent Growth
Speedway Strong and Consistent Growth Gasoline and Distillate Sales Volume 8,000 Merchandise Sales/Gross Margin MM Gallons 6,000 30 6,000 6,038 6,094 5,007 4,879 29 4,000 3,942 2,000 3,027 3,146 4,000 28 3,611 Percent 0 3,058 3,135 $MM 27 2012 2013 2014 2015 2016 2,000 26 Gasoline and Distillate Gro
Slide 70: Balance in Refining Network
Balance in Refining Network BPCD NCI Canton (Ohio) 93,000 7.9 Catlettsburg (Ky.) 277,000 9.2 Detroit (Mich.) 139,000 9.7 Midwest Capacity 754,000 BPCD Robinson (Ill.) 245,000 9.5 Galveston Bay (Texas) 571,000 11.9 Garyville (La.) 556,000 11.1 Total 1,881,000 10.6* The Nelson Complexity Index is a co
Slide 71: Key Strengths
Key Strengths Balanced Operations Crude Oil Refining Capacity Crude Slate 60% PADD II Sour Crude 57% 43% 40% PADD III Sweet Crude 3Q 2017 3Q 2017 Assured Sales of Gasoline Production (Speedway + Brand + Wholesale Contract Sales) Assured Sales ~70% ~30% Wholesale and Other Sales 3Q 2017 71
Slide 72: Distillate Leading World Liquids Demand
Distillate Leading World Liquids Demand Average Annual Volumetric 120 Forecast Growth (MBPD) 2016 vs. 2030 100 Average product demand +440 growth of 1.4 MMBD in 80 2016-2017 Other -100 Distillate remains the MMBD 60 Resid growth leader through +475 2030 40 Middle Distillate Global gasoline dem
Slide 73: Sustained Global Demand Growth
Sustained Global Demand Growth Expect global oil demand Global Oil Demand 115 2.0 growth to be sustained near Global Oil & Liquids Demand (MMBD) Forecast current levels 110 YOY Demand Growth (MMBD) 1.5 Rising global population and 105 living standards propel fuel 100 1.0 demand 95 Nonfuel uses
Slide 74: U.S. Product Exports Will Help Meet Global Demand
U.S. Product Exports Will Help Meet Global Demand EIA’s 2017 Annual Energy EIA Annual Energy Outlook Product Exports Outlook 8 – Projects growth in U.S. product Forecast 7 exports including gasoline, diesel and propane 6 – U.S. refining expected to 5 MMBD remain highly competitive in 4 the future
Slide 75: U.S. Refiners Have Sustained Export Advantages
U.S. Refiners Have Sustained Export Advantages Lower-cost natural gas Large, complex refineries 2016 Region Utilization Access to lower-cost feedstocks Rate(1) High utilization rates North America 85% Sophisticated workforce MPC 95% Natural Gas Price Comparison Asia 85% 18 European Natural
Slide 76: Galveston Bay World-Class Refining Complex
Galveston Bay World-Class Refining Complex Galveston Bay and Texas City refineries consolidated operations in mid-2017 Galveston Bay Unit Capacities BPCD* Crude 611,000 Resid 142,000 Catalytic Cracking/Hydrocracking 268,000 Alkylation 53,300 Aromatics 34,700 *MPC estimates post-STAR program completi
Slide 77: ENERGY STAR Program
ENERGY STAR Program ® ENERGY STAR labels for refining EPA ENERGY STAR History as of 6-15-16 industry began in 2006 Operating Year ---> EPA Certification Year ---> 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 47 labels awarded durin
Slide 78: MPC Capital Expenditures & Investments
MPC Capital Expenditures & Investments ($MM) 2017 Revised 3Q 2017 2017 YTD Plan Refining & Marketing (R&M) 198 570 1,085 Speedway 108 221 380 Midstream, including MPLX(a) 424 1,268 2,115 Corporate and Other 19 53 100 Total Capital Expenditures & Investments(b) 749 2,112 3,680 (a)2017 revised plan re
Slide 79: MPLX – Adjusted EBITDA and Distributable Cash-Flow Reconciliation from Net Income
MPLX – Adjusted EBITDA and Distributable Cash-Flow Reconciliation from Net Income ($MM) 2013 2014 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 Net income (loss) 211 239 333 (14) 72 194 182 187 191 217 (a)The Partnership makes a distinction Depreciation and amortization 70 75 129 136
Slide 80: MPLX – Reconciliation of Adjusted EBITDA and Distributable Cash
MPLX – Reconciliation of Adjusted EBITDA and Distributable Cash from Net Cash Provided by Operating Activities (YTD) Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, ($MM) 2015 2016 2016 2016 2016 2017 2017 2017 Net cash provided by operating activities 427 321 670 975 1,491 377 844 1
Slide 81: MPC Reconciliation
MPC Reconciliation Adjusted EBITDA to Net Income Attributable to MPC ($MM) 2016 2017 LTM 4Q 1Q 2Q 3Q Net Income attributable to MPC 227 30 483 903 1,643 Less: Net interest and other financial income (costs) (136) (150) (158) (157) (601) Add: Net income (loss) attributable to inco noncontrolling inte
Slide 82: Reconciliation
Reconciliation MPC Adjusted EBITDA Related to MPLX to MPLX Net Income(a) ($MM) 2016 2017 LTM 4Q 1Q 2Q 3Q MPLX Net Income 182 187 191 217 777 Less: Net interest and other financial income (costs) (65) (78) (87) (93) (323) Add: Provision for income taxes - - 2 1 3 Depreciation and amortization 153 187
Slide 83: Speedway Reconciliation
Speedway Reconciliation Segment EBITDA to Segment Income from Operations ($MM) 2016 Speedway Segment Income from Operations 734 Plus: Depreciation and Amortization 273 Speedway Segment EBITDA 1,007 83
Slide 84: MPC’s Fully Integrated Downstream System
MPC’s Fully Integrated Downstream System Refining & Marketing Six-plant refining system with ~1.9 MMBPCD capacity* One biodiesel facility and interest in three ethanol facilities One of the largest wholesale suppliers in our market area One of the largest producers of asphalt in the U.S. ~
Marathon Petroleum — Goldman Sachs Global Energy Conference 2018 on 6ix