Slide 1: Third Quarter 2016 Earnings Conference Call and Webcast
Third Quarter 2016 Earnings Conference Call and Webcast as supplemented on October 31, 2016
Slide 2: Forward-Looking Statements
Forward‐Looking Statements This press release 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 projectio
Slide 3: Highlights
Highlights Announced strategic initiatives to enhance shareholder value – Aggressive dropdown strategy – Highlighting the value of the general partner interest – Review of segment reporting Reported third-quarter earnings of $145 million, or $0.27 per diluted share Results include a $267 milli
Slide 4: 3Q 2016 Earnings
3Q 2016 Earnings* 4 *Earnings refer to Net Income attributable to MPC. Earnings include pretax impairment charges of $267 MM, $90 MM, $129 MM and $144 MM in 3Q 2016, 2Q 2016, 1Q 2016 and 3Q 2015, respectively. They also include pretax lower-of-cost or market inventory benefits / (charges) of $385 MM
Slide 5: Earnings 3Q 2016 vs. 3Q 2015 Variance Analysis
Earnings* 5 3Q 2016 vs. 3Q 2015 Variance Analysis 948 (1,128) (34) 165 6 446 (123) (71) (64) 145 -400 -200 0 200 400 600 800 1,000 1,200 3Q 2015 Refining & Marketing Speedway Midstream** Items not Allocated to Segments Impairment Expense Interest and Other Financing Costs Income Taxes Noncontrolling
Slide 6: Refining and Marketing Segment Income 3Q 2016 vs. 3Q 2015 Variance Analysis
Refining and Marketing Segment Income 6 3Q 2016 vs. 3Q 2015 Variance Analysis 1,434 (711) 79 (69) 1 (35) 32 (463) 38 306 0 200 400 600 800 1,000 1,200 1,400 1,600 *3Q 2015 **LLS 6-3-2-1 Crack **Sweet/ Sour Diff. **LLS/WTI Diff. **LLS Prompt vs. Delivered **Market Structure Other Gross Margin Direct
Slide 7: Speedway Segment Income 3Q 2016 vs. 3Q 2015 Variance Analysis
Speedway Segment Income 7 3Q 2016 vs. 3Q 2015 Variance Analysis 243 (54) 28 (8) 209 0 50 100 150 200 250 300 3Q 2015 Light Product Gross Margin Merchandise Gross Margin Other 3Q 2016 $ M M
Slide 8: Midstream Segment Income 3Q 2016 vs. 3Q 2015 Variance Analysis
Midstream Segment Income 8 3Q 2016 vs. 3Q 2015 Variance Analysis 93 1 27 121 16 258 0 50 100 150 200 250 300 *3Q 2015 Revenue Equity Affiliates MarkWest Operating Expenses and Other 3Q 2016 $ M M *We changed our operating segment presentation in the first quarter of 2016 in connection with the contr
Slide 9: Total Company Cash Flow 3Q 2016
Total Company Cash Flow 9 3Q 2016 1,754 1,071 (666) (516) (785) 184 (140) 48 709 (241) 0 500 1,000 1,500 2,000 2,500 3,000 6/30/2016 Cash Balance Operating Cash Flow before Working Capital Working Capital Net Debt Cash Capital Expenditures and Investments Issuance of MPLX LP Common Units Return of C
Slide 10: Liquidity and Capitalization/Select Cash-Flow Data
Liquidity and Capitalization/Select Cash-Flow Data 10 ($MM) 2016 2015 3Q 2Q 1Q 4Q For the Quarter: Cash provided by operations 405 2,263 327 808 Cash provided by operations before changes in working capital(c) 1,071 1,215 604 1,151 (a)Adjustments made to exclude MPLX non-recourse debt and the public
Slide 11: 4Q 2016 Outlook
4Q 2016 Outlook 11 *Region throughput data includes inter-refinery transfers, but MPC totals exclude transfers **Includes utilities, labor, routine maintenance and other operating costs ***$/barrel throughput Crude Throughput* Other Charge/ Feedstocks Throughput* Total Throughput* Sour Crude Oil Thr
Slide 12: Appendix
12 Appendix
Slide 13: Expanding Cash Flow Distributions from MPLX
Expanding Cash Flow Distributions from MPLX Illustrative Example of Growing GP / IDR Cash Flows with Announced Dropdowns* *GP and IDR distributions to MPC based on the mid-point of MPLX growth guidance of 12% - 15% for 2017 and double digit growth for 2018; assumes all ~$1.4B of EBITDA is dropped to
Slide 14: Dropdowns Generate Significant Proceeds to MPC
$1,225 $1,750 $1,750 $1,225 $1,750 $1,750 $600 $2,450 $2,450 $3,500 $3,500 $3,500 $3,500 0 500 1,000 1,500 2,000 2,500 3,000 3,500 2016E 2017E 2018E 2019E $ M M Cash Sale Proceeds Equity Value from MPLX *Assumes all ~$1.4B of EBITDA is dropped to MPLX in 2017 – 2019 as follows: $350MM in 2017 and $5
Slide 15: Capital Expenditures & Investments
Capital Expenditures & Investments 15 ($MM) 2016 Revised Plan 3Q 2016 YTD Refining & Marketing (R&M) 1,045 230 682 Midstream R&M(a) 125 37 106 Total Refining & Marketing Segment 1,170 267 788 Speedway 310 71 191 Midstream, including MPLX(a)(b) 1,525 394 1,147 Corporate and Other 95 14 59 Total Capit
Slide 16: Sustaining Capital Returns Since Spin
Sustaining Capital Returns Since Spin 0 2,000 4,000 6,000 8,000 10,000 12,000 $ M M Cumulative Return of Capital Since July 1, 2011 Dividends Share repurchases $10.1 B 16
Slide 17: Earnings ($MM unless otherwise noted)
Earnings 17 ($MM unless otherwise noted) 2015 2016 1Q 2Q 3Q 4Q 1Q 2Q 3Q Refining & Marketing segment income* 1,292 1,181 1,434 179 (62) 1,080 306 Speedway segment income** 168 127 243 135 167 193 209 Midstream segment income 90 103 93 94 167 201 258 Corporate and other unallocated items (79) (75) (7
Slide 18: Reconciliation Pro Forma Adjusted EBITDA to Pro Forma Net Income Attributable to MPC
Reconciliation 18 Pro Forma Adjusted EBITDA to Pro Forma Net Income Attributable to MPC ($MM) 2015 2016 LTM 4Q 1Q 2Q 3Q Pro Forma Net Income attributable to MPC(a) 225 1 801 145 1,172 Less: Net interest and other financial income (costs) (139) (142) (137) (141) (559) Add: Net income (loss) attributa
Slide 19: Reconciliation Pro Forma Adjusted EBITDA related to MPLX to Pro Forma MPLX Net Income
Reconciliation 19 Pro Forma Adjusted EBITDA related to MPLX to Pro Forma MPLX Net Income ($MM) 2015 2016 LTM 4Q 1Q 2Q 3Q Pro Forma MPLX Net Income(a) 104 (37) 20 143 230 Less: Net interest and other financial income (costs) (67) (68) (64) (64) (263) Add: Provision for income taxes - (4) (8) - (12) D
Slide 20: Cash Provided from Operations Before Changes in Working Capital Reconciliation
Cash Provided from Operations Before Changes in Working Capital Reconciliation to Net Cash Provided by Operations 20 ($MM) 2015 2016 (For the Quarter) 4Q 1Q 2Q 3Q Net cash provided by operations 808 327 2,263 405 Less changes in working capital: Changes in current receivables 361 325 (601) 67 Change
Slide 21: Refining and Marketing Segment Income 3Q 2016 vs. 2Q 2016 Variance Analysis
Refining and Marketing Segment Income 21 3Q 2016 vs. 2Q 2016 Variance Analysis 1,080 (125) 115 (58) (6) 3 (283) (69) (360) 9 306 0 200 400 600 800 1,000 1,200 1,400 2Q 2016 *LLS 6-3-2-1 Crack *Sweet/ Sour Diff. *LLS/WTI Diff. *LLS Prompt vs. Delivered *Market Structure Lower of Cost or Market Other
Slide 22: Refining and Marketing Indicative Gross Margin 3Q 2016
Refining and Marketing Indicative Gross Margin 3Q 2016 22 1,431 1,906 607 52 (5) 108 (287) (1,249) (351) 306 0 500 1,000 1,500 2,000 2,500 *LLS 6-3-2-1 Crack *Sweet/ Sour Diff. *LLS/WTI Diff. *LLS Prompt vs. Delivered *Market Structure Other Gross Margin R&M Gross Margin Direct Operating Costs Other
Slide 23: MPLX Distributions and Sales Proceeds to MPC
MPLX Distributions and Sales Proceeds to MPC* 23 $10 $15 $16 $16 $18 $18 $20 $20 $24 $27 $32 $35 $69 $73 $91 0 50 100 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 $ M M LP Distributions GP Distributions, including IDRs Cash Distribution and Asset Sales Proceeds from MPL
Slide 24: Marathon
MARATHON ®