Mplx Lp · NYSE:MPLX
Mplx Lp — Investor Presentation (April 2019)
66 slides from Mplx Lp's investor presentation, Apr 1, 2019
Slide 1: Marathon Petroleum Corporation April 2019
MARATHON percnoasnes Rona April 2019
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), MPLX LP (MPLX) and Andeavor Logistics LP (ANDX). These forward-looking statements relate to, among other things, MPC’s acquis
Slide 3: Forward-Looking Statements (continued)
Forward-Looking Statements (continued) Factors that could cause ANDX‘s actual results to differ materially from those implied in the forward-looking statements include: the amount and timing of future distributions; our ability to achieve expected coverage improvement and distributable cash growth;
Slide 4: MPC - A Leading Energy Company
MPC - A Leading Energy Company Midstream Marketing & Retail Superior Operations 7 L Significant Growth Opportunities ee ie _ Strategic Investment to Capture Value : Strategic Alignment with Refining Invest in Technology to Improve New Technology to Optimize Assets Customer Experience Commercial Focu
Slide 5: Built For Change: Our Strategic Vision
Built For Change: Our Strategic Vision , ia Core Values and Integrated Strategic & Financial Operational Business Model Disciplined Strength Excellence - & Investments b ——$-ae a. (—— Core values underpin ~~" Enhances value ba Creates competitive ” Provides through-cycle our commitment to capture an
Slide 6: Responsible Corporate Leadership
Responsible Corporate Leadership MPC has earned Environmental D 71 0, i Y To al ee 7? ) Gena i a . = certified wildlife habitats consisting of of the EPA's Energy Star earned from state aH i i i Facilities earned recognitions awarded to environmental agencies , . refineries ostWsnigheststaus) [GipZ
Slide 7: Leveraging a Larger System: Unprecedented Opportunities
Leveraging a Larger System: Unprecedented Opportunities Feedstock Acquisition Inbound Logistics Refining & ocsese Outbound Logistics Marieane & Retail Additional access to advantaged feedstocks Expanded logistics system lowers crude acquisition costs + increases speed to market Broader market presen
Slide 8: Integration: Further Opportunities for Value Chain Capture
Integration: Further Opportunities for Value Chain Capture » Nationwide footprint enables connectivity to key supply Anacortes sources and demand hubs ‘ Mandan Portland Dickinson » Broader, integrated system St. Paul i + SaltLakeciy Park ok cnton increases capability to Mactiner Gig 74 =a capture va
Slide 9: Increasing Synergy Potential
Increasing Synergy Potential Synergy Outlook’ Estimated Annual Run-Rate ($ millions) ($ millions) 1,400 110 ES oO 290 600 1,000 Refining & Retail Midstream Corporate Total YE2019 YE2020 YE2021 Marketing @ Initial Synergy Estimates” Updated Synergy Estimates Raising gross run-rate synergy potential b
Slide 10: Growing Profitability: Attractive Profile for Investors
Growing Profitability: Attractive Profile for Investors MPC has significantly diversified, and non-refining segments now contribute ~50% of EBITDA. Our strategic and disciplined investments have grown our business, creating an attractive opportunity for investors especially relative to energy and th
Slide 11: Financial Strength Underpins Total Shareholder Returns
Financial Strength Underpins Total Shareholder Returns Investment grade rating $2.8 billion plan in 2019 ' 250% of discretionary free is — Flat with 2018E (combined) cash flow’ targeted tobe | ~20% debt to market cap — Anticipate flat in 2020 returned to shareholders a oo. ul 10%+ annual dividend $8
Slide 12: MPC: Formula for Creating Exceptional Value
MPC: Formula for Creating Exceptional Value Leading assets & f Strategic vision to capabilities grow value Core values and operational excellence Premier asset base Integrated Experienced business model management team Disciplined Sone investments balance sheet Financial strength = Exceptional oppor
Slide 13: Appendix
Appendix
Slide 14: Roadmap to Creating Superior Value — Refining
Roadmap to Creating Superior Value — Refining Excellence & |) ,ivestmentsto TI piecoment Optimization g Flexibility Supply Optionality Leverage broader Enhance reliability + 4 Focus on upgrading | Enhance domestic scale + logistics availability of assets capabilities (yield product placement assets
Slide 15: MPC Refining Footprint and Regions
MPC Refining Footprint and Regions * Capacities are based on 2018 O&G) report and reflect crude unit calendar day rate B 8 § 4 refineries: 711 MBPD* Pricing indicator: WC ANS 321 10 refineries: 1,161 MBPD* Pricing indicator: Chicago WTI 321 2 refineries: 1,149 MBPD* Pricing indicator: GC LLS 321 15
Slide 16: Broader Scale Expands Supply Optionality
Broader Scale Expands Supply Optionality » Larger footprint expands access to advantaged supply: @ Canadian @ Bakken (6) Permian = New logistics assets lower crude acquisition costs California; other), = Crude processing flexibility enhances capture of advantaged feedstocks ‘e \ ( GOM: )
Slide 17: Canadian Crude Flexibility
@ Canadian Crude Flexibility » Broader system increases access to Canadian crudes enhancing margin capture * Over 500 MBPD of Canadian crude purchases » Approximately 67% heavy and 33% light-synthetic a 2014/17" | 2018 avg" | ‘ens Ter Galveston Bay JIA, Nederland, 1x WTI-WCS 14.75 26.25 20-40 Note:
Slide 18: Bakken Strategy Optimization
6 Bakken Strategy Optimization = New logistics assets increase Bakken crude | Clearbrook access, providing more hi a ho OSH me at = . . N\ options to capture margin <= im \ ze Ne \ A = Connectivity and secured ~~ st PaulPark ‘5 _ - ‘ space on long-haul pipelines _— 1 = . ences. x provide flexibility
Slide 19: Permian Strategy Optimization
6 Permian Strategy Optimization Increasing integrated footprint in the Permian creates multiple benefits across our platform ih Gathering systems create direct ria FO Crude Dpeting crude sourcing of advantaged ‘ (blanned jp e8tmen crude for our refineries ling Xan : 3 hk (est. 300 MBPD total) Pe ida
Slide 20: Key Strategic Investments: Grow EBITDA
Key Strategic Investments: Grow EBITDA Expected Annualized Average EBITDA’ (S in millions) . Investments focused on +8530 $1,130 upgrading capabilities, yield flexibility, and conversion capacity Track record of executing on- schedule and exceeding return forecasts DKR Minimum return threshold of 20
Slide 21: Garyville Coker Project
Garyville Coker 3 Project Increases Garyville coking capacity by 50% to —_ pa 150 MBPD to increase capability to upgrade resid Enhances distillate yields «Leverages existing infrastructure Increases ability to capture upside from light- heavy crude spreads Project details and estimates: — 50 MBPD in
Slide 22: Galveston Bay STAR Program
Galveston Bay STAR Program Creates a world-class refining complex with 40 MBPD increased crude unit capacity * Increases resid processing and improves gasoil recovery * Optimizes operations and reduces costs Project details and estimates: — Staged investment - on schedule and on budget -— Planned co
Slide 23: Dickinson Renewable Diesel
Dickinson Renewable Diesel Produce renewable diesel to capture economic opportunity created by California Low Carbon Fuel Standard and Federal Renewable Fuel Standard Convert refinery to process soybean and corn oil to make 12 MBPD of renewable diesel Local feedstock supply advantage Leverages exist
Slide 24: Los Angeles LARIC Project
Los Angeles LARIC Project Increases the flexibility to produce distillates and significantly lowers emissions 30-40 MBPD of gasoline and distillate yield flexibility Physical integration of the Los Angeles refinery complex enhances optimization Reduces NOx, SOx and CO, emissions Project details and
Slide 25: IMO: Global Opportunities for Complex Refineries
IMO: Global Opportunities for Complex Refineries Coker Upgrading (ULSD - 3% Resid Fuel Oil) Refiners shift to maximum distillate production and resid upgrading $60 $50 Ship owners accelerate installation of scrubbers to enable HSFO consumption $40 = Low complexity refineries lighten crude slate a $3
Slide 26: MPC Well-Positioned Among U.S. Refiners
MPC Well-Positioned Among U.S. Refiners MPC well-positioned to produce high value fuels and capture benefits from the adoption of low sulfur fuels regulations - given investments over past decade to enhance upgrading capabilities. Resid Upgrading & Residual Fuel Oil Production Distillate Hydrotreati
Slide 27: Sensitivities to Potential IMO Factors
Sensitivities to Potential IMO Facto EBITDA Impact Potential Impacts from $1/BBL change Higher crack required to support increased refinery ~ production and meet elevated demand for low sulfur fuels $1,150 MM Blended 321 Crack - Refining yield shift to max distillate production and - Gasoline Crack
Slide 28: Unprecedented Opportunities for Light Product Optimization
Unprecedented Opportunities for Light Product Optimization = Nationwide footprint ‘Anacortes enables connectivity to all J man US markets Portiand Dickinson St. Paul Dey eee oa Chicago ° Peer = Multiple pathways cost- Martinez t yi effectively balance ’ oo adn supply/demand los Anant | fe aS Phoenix
Slide 29: Mexico Strategy Optimization
Mexico Strategy Optimization @) Utilizing ARCO brand at 105 stations in fh, wee Rornores Western Mexico, expanding ARCO to Martinez P2200 operations Chihuahua and Baja Sur in early 2019 vr —_ SB fail Faciity © terminal 3) Developing Mexico supply capabilities and efficiency with new Rosarito light p
Slide 30: Operational Excellence: Delivers Significant Value
Operational Excellence: Delivers Significant Value Cash Operating Expense* rm = Improve operating costs Galveston Bay '14 AONE US: Avormae = Best-in-class energy 5 \ efficiency and turnaround = ymquarth ik performance i : Galveston Bay ‘16 3° Quartile \ = Supply chain cost § 2 Quarto | Galveston Bay
Slide 31: R&M Segment Synergies
R&M Segment Synergies ‘ 1 — Estimated Annual Run-Rate Synergy Projections by Sub-Category ($ millions) ($ millions) 665 sco Ea 140 420 160 EJ 250 on YE2019 E2020 E2021 Refining Refining Turnaround / Marketing Supplyand Procurement Total Optimization Business Maintenance Trading 7 — ‘and Best’ Proces
Slide 32: Roadmap to Creating Superior Value — Midstream
Roadmap to Creating Superior Value — Midstream Done con I | Capture Full | nhance Grow in Leverage Financial Midstream Cash Flow Premier MPC loa Priorities E Value Chain | Stability Basins ae | — —— a nk Participate across > Long-haul pipelines Permian: Fosters growth Self-funding “10- value chain t
Slide 33: U.S. Production Growth Creates Midstream Opportunities
U.S. Production Growth Creates Midstream Opportunities Strong production growth in crude, natural gas, and natural gas liquids will require additional infrastructure to link supply to global demand markets. Pipelines, processing, fractionation and export facilities will be needed to allow producers
Slide 34: Capturing Permian Opportunities: Follow the Molecule
Capturing Permian Opportunities: Follow the Molecule Creating an integrated footprint from Legend the Permian to the Gulf Coast i => Natural Gas Gathering and processing 2) Long-haul pipelines @ Fractionation 4 | Export terminals 34
Slide 35: Permian G&P Feeds Downstream Opportunities
Permian G&P Feeds Downstream Opportunities Gathering systems create significant growth opportunities in the Permian | _ - a Le ae Legend * Crude pipeline Natural gas pipeline NGL pipeline Crude gathering Crude gathering “socom Ott Sstogorecesseeen' | Natural gas gathering & processing — Conan Gather
Slide 36: Permian Crude Long-Haul Pipelines
Permian Crude Long-Haul Pipelines Investments in long-haul pipelines generate stable, fee-based midstream income and also help lower feedstock costs tor MPC refineries * Gray Oak Pipeline — MPC, Diamondback Energy, PSXP — ~850 mile, 30-inch diameter Orla Poo Pipcing - — Anticipate in-service 4Q19 “a
Slide 37: Permian Natural Gas Long-Haul Pipeline
Permian Natural Gas Long-Haul Pipeline Expand our value chain by connecting growing natural gas production to demand from MPC refineries and global export markets » Whistler Pipeline — MPLX, Targa, White Water Midstream, and potentially others TEXAS Waha © — ~450 miles, 42-inch diameter — Capacity 2
Slide 38: Permian NGL Long-Haul Pipeline and Fractionation
Permian NGL Long-Haul Pipeline and Fractionation Expand our value chain by connecting growing NGL production and developing new fractionation infrastructure in the Gulf Coast = BANGL Pipeline (Belvieu Alternative NGL) — MPLX, White Water Midstream, and other partners TEXAS — ~400 mile, 24-inch diame
Slide 39: Expanding Export Assets at Five Gulf Coast Locations
Expanding Export Assets at Five Gulf Coast Locations Export facilities create ability to generate third party revenue and meet global demand for crude, refined products, and NGLs = Currently in service — Mt. Airy, LA: acquired in 3Q18 — LOOP: expansion with proposed Capline reversal and Swordfish Pi
Slide 40: Capline Reversal - Swordfish - LOOP
Capline Reversal - Swordfish - LOOP Competitive full-service solution Capline — 40” crude oil pipeline from Patoka, IL, to St. James, LA — Reversed service planned for September 2020 — Currently in open season Swordfish Pipeline — Proposed crude oil pipeline from St. James to Clovelly in Louisiana —
Slide 41: Bakken: Third-Party Growth Opportunities
Bakken: Third-Party Growth Opportunities Full-service midstream offering for both third parties and MPC starting at the well-head with crude oil and natural gas gathering through processing and fractionation with multiple takeaway options Legend == Crude pipeline 1 ==> New NGL pipeline High Plains C
Slide 42: Marcellus/Utica: Footprint Continues to Deliver
Marcellus/Utica: Footprint Continues to Deliver Marcellus/Utica continues to be the largest natural OH PA gas basin in the U.S. Current producerdemand fli cs supports our buildout of incremental infrastructure: pes Garnan Crock ion Forecasted Volumes 2018 | 2020E _| _ gl a Houston Gathered 3.0 Befd
Slide 43: MPLX and ANDX 2019-2020 Outlook
MiPLp~ LOGISTICS Assumes MPLX and ANDX operate as standalone companies 2019E 2020E Growth Capital Expenditures ($B) $2.2 $2.0 Adjusted EBITDA ($B) $3.9 $4.4 DCF ($8)? $3.1 $3.5 Outstanding LP Units (MM) 794 794 each quarter 2019 Distribution Growth: Expect $0.01 per unit increase Expected Distributi
Slide 44: Roadmap to Creating Superior Value — Marketing & Retail
Roadmap to Creating Superior Value — Marketing & Retail Aa. Leverage Scale ZA Capture High-Value Enhance to Drive Value “ Integration N Growih Customer Creation Opportunities RA Experience ———— ——_ —— Strong brand portfolio Optimize channel Focus on key markets Embrace changing yg and loyalty progra
Slide 45: Unparalleled Nationwide Marketing & Retail Footprint
Unparalleled Nationwide Marketing & Retail Footprint (NAN IN ~12,000 locations nationwide ( * \ MARATHON ~16 billion gallons of annual fuel sales* a Speedway >70% assured gasoline placement @ Termina! sales Location Note: Based on combined estimates for 2018 ' Across Retail segment and Brand Marketi
Slide 46: Multi-Channel Platform Creates Unrivaled Flexibility
Multi-Channel Platform Creates Unrivaled Flexibility Retail Segment R&M Segment Retail’ Direct Dealer Brand Wholesale *Ch arith el diversity 7.8billion GPY 2.6 billion GPY 5.3 billion GPY 16.9 billion GPY maximizes value capture = Integrated platform provides assured product placement = Retail segme
Slide 47: Strong and Diversified Fuel Branding Platform
Strong and Diversified Fuel Branding Platform » Enhanced dual proprietary Brand marketing platform (Marathon + ARCO) » Leverage regional brand strengths and related consumer preferences = Tremendous growth opportunities in Western states je) 1,104 * Multi branded platform enhances Other 1,593 consol
Slide 48: Retail Segment: MPC's Unique Competitive Advantage
Retail Segment: MPC’s Unique Competitive Advantage Two complimentary retail platforms that Speedway #1 in Peer Group Performance generate stable and growing cash flow with $30 (SM EBITDA/Store/Month) unparalleled integration value. Retail EBITDA Illustration $20 ($ millions) ANDV Retail $10 > 2,000
Slide 49: Retail Segment Synergies
Retail Segment Synergies Estimated Annual Run-Rate* Synergy Projections by Sub-Category ($ millions) 300 ($ millions) 90 L20 | 200 90 20 | 130 i) YE2019 YE2020 YE2021 Profit Reduce Operating ReduceG&A Economies of Total Enhancement Expenses Expenses Scale on Capital ® Initial Synergy Estimates * Upd
Slide 50: Financial Principles and Policy
Financial Principles and Policy Disciplined investment in growth opportunities Through-cycle dividend growth Support our investment grade credit rating Return cash to shareholders through repurchases Maintain the safety, integrity and reliability of our assets »~ \ Balance Sheet 4 ? Y 50
Slide 51: Balance Sheet: Foundation for Strategy Execution
Balance Sheet: Foundation for Strategy Execution MPC Liquidity Minimum cash balance $1 - 2 billion Trade receivables facility $750 million Target Leverage | et to EBITDA MPC (excluding MLP’s) Corporate Credit Rating Marathon Petroleum
Slide 52: Disciplined Capital Allocation Policy
Disciplined Capital Allocation Policy 2019 Financial T luding MLPs): = Capital expenditures: ~$2.8 billion Capital * Capital return target: > 50% of discretionary 2GSIRUEES free cash flow* — Annual dividend target: = 10% growth * Discretionary free cash flow = operating cash flow less maintenance an
Slide 53: Disciplined Capital Spend
Disciplined Capital Spend . . ($ billions) Projected 2019 investments for MPC NEG BRIOE BODOE . . Growth Capital 18 1.8 — Focused on enhancing margin capture Maintenance Capital 1.0 10 system-wide Total MPC (excluding MLPs) 2.8 2.8 — Disciplined allocation to projects with ‘ MPLX 2019E 2020E superio
Slide 54: Stable and Growing Dividend
Stable and Growing Dividend Annual Dividends $2.12* Secure throughout business cycles ($ per share) Growth commensurate with the business 2012 2013 2014 2015 2016 2017 2018 2019E 1 2019E based on annualized $0.53 per share dividend announced on January 28, 2019 54
Slide 55: Consistent Return of Capital Through Share Buybacks
Consistent Return of Capital Through Share Buybacks Share Repurchases ($ billions) 4‘ quarter of 2018: $675 million of repurchases Capital return target: = 50% of discretionary free cash flow” Existing authorization’*: $4.9 billion, potentially completed by year end 2020 2012-2016 2017 2018 (Cummula
Slide 56: Commodity Price Assumptions and Long-Term Outlook
Commodity Price Assumptions and Long-Term Outlook Commodity / Spread 2018 2019 ($/BBL, unless noted) Average’ Business Plan’ Outloo WTI $65.00 $64 $50 - $80 Brent-WTl $6.75 $3.60 $3 - $12 Brent-ANS $(0.25) $0.10 $(1) - $2 Brent-ASCl $5.00 $6.50 $3 - $9 LLS-WTI $5.00 $3.25 $4 - $9 WTI-Bakken $2.50 $1
Slide 57: Regional Crack Spread Outlook
Regional Crack Spread Outlook USGC LLS 321 Chicago WTI 321 $14 - $16 a $8.50 $8,00 $9.25 - $9.75 $12.75 $14.25 © $6.00 a $9.00 ° S 2016 2017 2018 2019E-2021E 2016 2017 2018 20196-2021 Average Average WC ANS 321 ULSD - 3% Resid Fuel Oil Fl $15 - $17 $30 - $40 a & $12.50 $14.00 $1425 a $24.00 “ Q $19.
Slide 58: Turnaround Accounting Impacts Peer Comparisons
Turnaround Accounting Impacts Peer Comparisons = MPC will continue to expense turnarounds (TAR); ANDV had deferred and amortized these costs « TAR-adjusted EBITDA will be provided quarterly to increase comparability with peers Pro-Forma Turnaround Costs ($ billions) $1.0 $1.0 $0.9 $0.9 2016 2017 201
Slide 59: New MPC Segment Reporting Structure
New MPC Segment Reporting Structure Refining & Marketing » Refining = Retail * Marketing ‘“ —__Speedwa Hie ses T — LWholesale } “| Direct Dealer — “Asphalt & I Legacy ANDV ! Petrochemicals } Legacy MPC = a S| i + H 1 H 1 Refining & Refining H | Marketing Refining ANDX 1 ! Refining MPLX Retail ; Mark
Slide 60: New MPC Segment Reporting Structure
New MPC Segment Reporting Structure Refining & Marketing Regions: ‘ Retail — Gulf Coast c ANDX é Direct dealers — Mid-Con Other midstream assets S — West Coast & Marketing: Key Statistics: ) Key Statistics: — Brand Pipeline, terminal, and Number of locations ; — Wholesale gathering throughputs Fuel
Slide 61: First Quarter 2019 Outlook
First Quarter 2019 Outlook vce |, Chae | Tt tue! [emer oie || Mel | See ene licaserocre pixcushest Maintenance | Amortization Cost? JoperatingCosts Unallocated in MBPD Percent of Throughput Refinery Direct Operating Costs ($/BBL of Total Throughput) Gulf Coast Region 1,150 125 1,275 38% 62% $0.75 $1
Slide 62: Market Data Terminologies
Market Data Terminologies Meti Mid-Con Crack Spread* Formula ((2xChicago CBOB Gasoline + Chicago ULSD)/3) x 42 - WTI Prompt West Coast Crack Spread* ((2xLA CARBOB + LA CARB Diesel)/3) x 42 - ANS Prompt USGC Crack Spread* ((2xUSGC CBOB Gasoline +USGC ULSD)/3) x 42 - LLS Prompt Blended Crack Spread* W
Slide 63: MPLX 2019-2020 Outlook — Reconciliation
MPLX 2019-2020 Outlook — Reconciliation Adjusted EBITDA and Distributable Cash Flow from Net Income ($ billio 2019E 2020E Net income 22 25 Depreciation and amortization 0.9 1.0 Net interest and other financial costs 0.7 0.7 Adjustment for equity investment earnings & distributions 0.2 0.2 Other 0.0
Slide 64: MPLX 2019-2020 Outlook — Reconciliation
MPLX 2019-2020 Outlook — Reconciliation Adjusted EBITDA and Distributable Cash Flow from Net Cash Provided by Operating Activities Net cash provided by operating activities 32 3.8 Changes in working capital items 0.0 (0.1) Net interest and other financial costs 0.7 0.7 Unrealized derivative losses (
Slide 65: ANDX 2019-2020 Outlook — Reconciliation
ANDX 2019-2020 Outlook — Reconciliation EBITDA and Distributable Cash Flow from Net Earnings jo) cise | cree | Net earnings 0.8 0.8 Depreciation and amortization 0.4 0.5 Net interest and other financial costs 0.2 0.3 EBITDA 14 16 Adjustment for equity investment earnings & distributions 0.0 0.0 Defe
Slide 66: Speedway EBITDA Reconciliation
Speedway EBITDA Reconciliation Segment EBITDA to Segment Income from Operations a Qs Q4 Q1 Q2 LIM Speedway Segment Income from Operations 208 148 95 159 610 Plus: Depreciation and Amortization 68 78 79 73 298 Speedway Segment EBITDA 276 226 174 232 908 66