Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Q4 2020 Earnings Presentation
37 slides from Marathon Petroleum's earnings presentation, Feb 2, 2021
Slide 1: Fourth Quarter 2020 Conference Call
Fourth Quarter 2020 Conference Call February 2, 2021 (as revised Feb. 26)
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: New Executive Additions
New Executive Additions Maryann Mannen Brian Davis EVP and Chief Financial Officer EVP and Chief Commercial Officer Strengthening our financial and Enhancing our commercial focus competitive position and performance 3
Slide 4: 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 5: Business Update
Business Update Progressing Speedway sale; committed to debt reduction and capital return Repositioning the portfolio Dickinson ramping operations Advancing Martinez feedstock discussions Expanding commercial focus Continuing focus on cost structure and capital reductions Positioning the
Slide 6: Priorities for Speedway Proceeds
Priorities for Speedway Proceeds $21 Billion Enhance: Core Liquidity ~$4.5B Add $1B cash to balance sheet Taxes Reduce: MPC Standalone Debt Appropriate leverage – no less than $5B ~$16.5B Solid investment grade credit profile Net Proceeds Return: Capital to Shareholders Share repurchases D
Slide 7: Lowering the Cost Structure
Lowering the Cost Structure 2,000 Refining Operating Costs 300 Corporate Costs 1,750 $ Millions $ Millions 1,500 200 1,250 1,000 100 4Q 1Q 2Q 3Q 4Q 4Q 1Q 2Q 3Q 4Q 2019 2020 2020 2020 2020 2019 2020 2020 2020 2020 Reduced 2020 operating expenses Continued focus on strict cost by over $1 billion manag
Slide 8: Strict Capital Discipline
Strict Capital Discipline MPC Capital (a) excl. MPLX Continued focus on capital 3,066 3,000 discipline Growth in renewables portfolio $ Millions MPC capital reduced 43% from 2,000 2019 to 2020, another 20% from 1,748 2020 to 2021 1,400 Includes $150 MM for Speedway 1,000 for 1Q21 2019 2020 2
Slide 9: Fourth Quarter Highlights
Fourth Quarter Highlights $ Millions (unless otherwise noted) 4Q20 Adjusted Loss per Share ($/share) (a) $(0.94) Adjusted EBITDA $907 Pre-tax Adjustments $851 Dividends $377 (a) Based on weighted average diluted shares 9
Slide 10: Adjusted EBITDA to Net Income
Adjusted EBITDA to Net Income 4Q 2020 vs. 3Q 2020 Adjusted EBITDA Reconciliation to Net Income 2,000 851 1,600 1,200 $ Millions 1,006 24 22 907 492 -79 -66 800 Discontinued 426 Operations Discontinued -963 Operations 400 514 285 Continuing 481 Operations Continuing Operations -510 0 3Q 2020 Refining
Slide 11: Refining & Marketing
Refining & Marketing 4Q 2020 vs. 3Q 2020 0 R&M Adjusted EBITDA includes Direct Dealer -200 results ($133 MM in 3Q, $119 MM in 4Q) $ Millions -400 82% utilization during the quarter (excluding idled facilities) -600 -623 -36 17 43 Crack spreads weakened 66 -702 across all regions -800 -141 -28
Slide 12: Midstream
Midstream 4Q 2020 vs. 3Q 2020 Through-cycle EBITDA 1,500 stability 1,295 25 1,317 -3 Continued progress on 1,000 reducing operating expenses $ Millions Fee-based with volume protections across 500 businesses Continued progress on organic growth projects 0 3Q 2020 MPLX Other 4Q 2020 Adj. EBIT
Slide 13: Speedway - Discontinued Operations
Speedway - Discontinued Operations 4Q 2020 vs. 3Q 2020 600 Fuel and merchandise 492 impacted by COVID-19 8 426 case escalation and -42 8 400 seasonality -40 $ Millions Year-over-year growth in same 200 store merchandise sales Fuel margins of ~29 cpg 0 3Q 2020 Fuel Merchandise Operating Other 4
Slide 14: Total Consolidated Cash Flow
Total Consolidated Cash Flow 4Q 2020 Discontinued 2,000 Continuing Operations Operations 804 1,500 -506 $ Millions 1,000 144 716 -344 Disc. Ops 380 555 500 MPC -120 -63 Disc. Ops MPLX -224 Continuing -377 Operations 137 Continuing Operations -336 0 9/30/2020 Operating Working Capital Net Debt Return
Slide 15: Financial Discipline: 2021 Capital Outlook
Financial Discipline: 2021 Capital Outlook 2021 MPC Capital Outlook Capital Spending, $MM excluding MPLX 2021 2020 Outlook 18% Refining & Marketing 1,170 1,050 R&M Maintenance Growth – Ongoing Projects 644 450 3% Growth – Renewables 283 350 MPC Midstream Maintenance 243 250 57% R&M Growth MPC Midstr
Slide 16: First-Quarter 2021 Outlook
First-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 R
Slide 17: Commitment to Corporate Social Responsibility
Commitment to Corporate Social Responsibility Environment Social Governance Investing in Renewables portfolio Committed to Board of Directors 92% Diversity & Inclusion independent and 33% diverse Targeting 30% GHG emissions New Human Rights Policy Transparent reporting to intensity reduction by 2030
Slide 18: Questions & Answers
Questions & Answers Strategic Overview
Slide 19: Appendix
Appendix 19
Slide 20: 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 21: Recently Published Sustainability & Climate Perspectives Reports
Recently Published Sustainability & Climate Perspectives Reports Recognitions Included in Dow Jones Sustainability Index for North America Lower Carbon Intensity EPA ENERGY STAR Partner of the Year – 3rd straight year with Sustained Excellence Award in 2020 Increase Renewable Fuels Production and En
Slide 22: Manageable Leverage and Maturities
Manageable Leverage and Maturities Debt-to-LTM Adj. EBITDA (a) 2.0x $ Millions YE18 YE19 YE20 (unless otherwise noted) 1.5x 1.0x Total Debt (excl. MPLX) 9,114 9,125 11,575 0.5x LTM Adj. EBITDA (excl. MPLX) 6,893 5,506 (1,454) 0.0x 2011 2012 2013 2014 2015 2016 2017 2018 2019 LTM MPLX Distributions t
Slide 23: Capitalization and Select Balance Sheet Data
Capitalization and Select Balance Sheet Data MPC MPLX MPC Excluding As of December 31, 2020 Consolidated Adjustments(a) MPLX ($MM except ratio data) Total Debt 31,714 20,139 11,575 Total Equity(b) 30,220 10,352 19,868 Debt-to-Capital Ratio(c) 51% - 37% Cash and cash equivalents 555 15 540 Debt to LT
Slide 24: Revised Reporting - Due to Speedway Sale
Revised Reporting - Due to Speedway Sale Speedway Historical New Sale-Related Reporting Reporting Effects 3Q20 4Q20 3Q20 4Q20 3Q20 4Q20 Adj. EBITDA Adj. EBITDA Adj. EBITDA Adj. EBITDA Refining & Marketing (756) (821) 133 119 (a) (623) (702) Direct Dealer to R&M Retail 618 539 - - Midstream 1,295 1,3
Slide 25: Refining & Marketing Segment Loss
Refining & Marketing Segment Loss 4Q 2020 2,000 283 1,726 284 45 155 -305 959 1,000 Volume 193 Product 785 Crude -695 $ Millions -1,197 -1,579 0 -1,000 -1,266 35 -572 -2,000 Blended Sweet Sour Market Other R&M Margin, LIFO Operating Distribution Turnaround Other R&M Crack Differential Differential S
Slide 26: Refining & Marketing Margins – Market vs. Realized
Refining & Marketing Margins – Market vs. Realized 2,000 Total system capture of 120%, key 1,800 factors included: 427 1,726 Direct Dealer business contributed 1,600 8% to R&M margin capture $ Millions 1,443 1,400 Favorable pricing of non- transportation fuels relative to -144 index 1,200 Opti
Slide 27: Refining & Marketing Segment Loss
Refining & Marketing Segment Loss 4Q 2020 vs. 3Q 2020 Variance Analysis -500 -1,000 Volume 5 Product 312 $ Millions -1,500 Crude - 321 135 -1,569 43 -1,579 90 11 66 38 -4 -49 -2,000 -340 -2,500 3Q 2020 Blended Sour Sweet Market Other LIFO Operating Distribution Turnaround, 4Q 2020 Segment Crack Diff
Slide 28: Income Summary for Operations
Income Summary for Operations 2019 2020 ($MM unless otherwise noted) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q (a) R&M historical results include the Refining & Marketing segment income (loss) (a) (303) 1,064 989 1,106 (497) (1,544) (1,569) (1,579) results of the retained direct dealer business, due our third quarter
Slide 29: Reconciliation
Reconciliation Net Income Attributable to MPC to Adjusted Net Income (Loss) Attributable to MPC ($MM) 4Q20 4Q19 Net income attributable to MPC 285 443 Pre-tax adjustments: (a) For the three and twelve months ended Dec. 31, 2020, income taxes for adjusted LCM inventory valuation adjustment (1,210) -
Slide 30: Reconciliation
Reconciliation Net Income (Loss) Attributable to MPC to Adjusted EBITDA and LTM Adjusted Pro Forma EBITDA ($MM) 1Q20 2Q20 3Q20 4Q20 LTM Net Income (loss) attributable to MPC (9,234) 9 (886) 285 (9,826) Add: Net interest and other financial costs 338 345 364 338 1,385 Net income (loss) attributable t
Slide 31: Reconciliation
Reconciliation Net Income Attributable to MPC to EBITDA, Adjusted EBITDA and Adjusted Pro Forma EBITDA ($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 32: Reconciliation
Reconciliation MPLX Net Income (Loss) to Adjusted EBITDA Related to MPLX ($MM) 1Q20 2Q20 3Q20 4Q20 LTM MPLX Net Income / (Loss) (2,716) 655 674 700 (687) Add: Net interest and other financial costs 230 223 224 219 896 Provision (benefit) for income taxes - - 1 1 2 Impairments 3,429 - 27 51 3,507 Res
Slide 33: Reconciliation
Reconciliation Cash Provided by Operations to Continuing Operating Cash Flow Before Changes in Working Capital 2020 ($MM) 4Q Cash provided by operating activities from continuing operations 948 Less changes: Current receivables (863) Inventories 585 Current accounts payable and accrued liabilities 1
Slide 34: Reconciliation
Reconciliation Segment Income (Loss) from Operations to Segment Adjusted EBITDA and Adjusted EBITDA 2019 2020 ($MM) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Refining & Marketing Segment Segment income (loss) from operations (303) 1,064 989 1,106 (497) (1,544) (1,569) (1,579) R&M historical results include the result
Slide 35: Reconciliation
Reconciliation Refining & Marketing Income (Loss) from Operations to Refining & Marketing Margin 2019 2020 ($MM) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q R&M historical results include the results of the retained direct dealer business, due our third Refining & Marketing income (loss) from operations (a) (303) 1,064
Slide 36: Reconciliation
Reconciliation Income from Discontinued Operations to Speedway Total Margin 2019 2020 ($MM) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q (a) LCM inventory valuation adjustments Income from Discontinued Operations(a) 143 344 344 283 338 406 438 405 are excluded from income from Plus (Less): discontinued operations and Sp
Slide 37: MARATHON
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