Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Investor Presentation (March 2013)
96 slides from Marathon Petroleum's investor presentation, March 2013
Slide 1: Investor Presentation March 2013
Investor Presentation March 2013 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the federal securities laws regarding both MPC and MPLX. These forward-looking statements relate to, among other things, MPC’s current expectations, estimates and projections concerning MPC’s and M
Slide 3: Strategic Vision
Strategic Vision Achieve top tier safety/environmental performance Grow enterprise value Expand platform for MPLX growth Deliver top quartile refining performance Increase Speedway and Marathon brand assured sales volumes Deliver profitable Speedway growth Goal: Top Quartile Total Shareh
Slide 4: Deliver Top Tier Safety Performance
Deliver Top Tier Safety Performance Record safety performance across our operations in 2012 World-class safety performance for DHOUP Continue industry leadership on preventive maintenance Achieve Top Tier Safety/Environmental Performance 4
Slide 5: Grow Enterprise Value
Grow Enterprise Value Earnings growth Strong dividend, growing over the long term Sustained share repurchase program Valuation re-rate/uplift Grow Enterprise Value 5
Slide 6: Through Cycle Earnings – MPC vs. Competitors
Through Cycle Earnings – MPC vs. Competitors (Pre-Tax Adjusted Domestic Operating Income per Barrel of Crude Oil Throughput) 20 MPC 15 Peer Company 10 $/BBL 5 0 -5 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Preliminary MPC’s Rank 3 3 2 1 2 3 7 2 1 5 3 1 3 1 2 Companie
Slide 7: Grow Enterprise Value
Grow Enterprise Value $1.9 billion of capital returned to shareholders since 7/1/11 $2.65 billion share repurchase authorization outstanding Op Income and EBITDA Growth Cumulative Returns to Shareholders 7,000 2,500 6,342 6,000 5,347 2,000 $1.9 B 5,000 4,636 4,000 3,745 1,500 MM$ MM$ 3,000 1,000
Slide 8: Grow Enterprise Value
Grow Enterprise Value Total Shareholder Return of 93% for 2012 2012 Cumulative Total Shareholder Return 100% 93% 80% 67% 60% 40% 36% 31% 20% 0% Q1 2012 Q2 2012 Q3 2012 Q4 2012 Top Quartile Shareholder Returns 8
Slide 9: Growth Drivers
‘MARATI Growth Drivers
Slide 10: MPC has Created an Industry-Leading MLP
MPC has Created an Industry-Leading MLP 38 Focus on Fee-Based Businesses 36 Unit Price 34 32 Pursue Organic Growth Opportunities 30 28 Grow Through Acquisitions 26 and Drop-downs 24 22 Maintain Safe and Reliable 20 Operations 10/25/12 11/05/12 11/12/12 11/19/12 11/27/12 12/04/12 12/11/12 12/18/12 12
Slide 11: Acquisition of Galveston Bay Assets
Acquisition of Galveston Bay Assets 451 MBPCD (475 MBPSD) high complexity refinery, Nelson Complexity Index of 15.3 Attractive base cash purchase price of ~$598 million Potential $700 million earnout over six year period Closed February 1, 2013; financed with cash on hand Expected to be im
Slide 12: Detroit Heavy Oil Upgrade Project
Detroit Heavy Oil Upgrade Project Increased heavy oil capacity from 20,000 BPCD to 100,000 BPCD 28,000 BPCD delayed Coker 36,000 BPCD Distillate Hydrotreater (DHT) Crude capacity increased ~14,000 BPCD Discounted Canadian crude Investment: $2.2 billion* project Estimated incremental an
Slide 13: Garyville Major Expansion (GME) Project
Garyville Major Expansion (GME) Project Garyville, LA refinery is last grassroots refinery built in the U.S. (1976) Base Garyville refinery, 2008 Solomon survey Best U.S. cash cost operating expense Second-best U.S. Energy Intensity Index $3.9 billion, excluding capitalized interest, GME P
Slide 14: $3.9 Billion Garyville Major Expansion
$3.9 Billion* Garyville Major Expansion 1/1/2013 1/1/2012 522 MBPCD Crude Capacity 490 MBPCD 1/1/2011 320 MBPCD Crude Capacity Gasoline 464 MBPCD 305 MBPCD 1/1/2010 Crude Capacity Gasoline 230 MBPCD 436 MBPCD Diesel 1/1/2009 300 MBPCD 215 MBPCD Crude Capacity Gasoline Third Large
Slide 15: Supply Dynamics
Supply Dynamics 15
Slide 16: Significant Growth in North American Crude Oil Supply
Significant Growth in North American Crude Oil Supply 2012-2020 Canadian +1,800 MBD Bakken +840 MBD Detroit Total Growth Canton 2012 – 2020 Robinson Utica +4,140 MBD +120 MBD Catlettsburg Permian Basin +650 MBD MPC Refinery Texas City Eagle Garyville Ford Galveston +730 MBD Bay Sources: CAPP and MPC
Slide 17: Balance in Refining Network
Balance in Refining Network Canton (Ohio) 80,000 Catlettsburg (Ky.) 240,000 Detroit (Mich.) 120,000 Midwest Capacity 646,000 BPCD Robinson (Ill.) 206,000 Galveston Bay (Texas) 451,000 Texas City (Texas) 80,000 Garyville (La.) 522,000 Total 1,699,000 Texas Capacity 531,000 BPCD Louisiana Capacity 522
Slide 18: MPC Well Positioned to Capture Oil Sands Economics
MPC Well Positioned to Capture Oil Sands Economics Hardisty ~$5.50/BBL Hardisty to ~$7.35/BBL Detroit Hardisty to USGC Detroit Value vs. USGC Refineries Chicago for Canadian Heavy Processing Wood Patoka $BBL River Laid-In Crude Cost 1.85 Cushing ~$1.95/BBL Houston to Chicago Higher Product Value 2.2
Slide 19: Transportation Costs Set Crude Differentials
Transportation Costs Set Crude Differentials Bakken $4.60 $16.75 $16.00 $10.35 Patoka Eagle Ford St. James Excludes gathering and truck transportation costs (up to ~$5.25/BBL) Sources: MPC Estimates based on publically available information, OPIS, and Argus Media. Deliver Top Quartile Refining Perfo
Slide 20: MPC Well Positioned for Utica Shale Options
MPC Well Positioned for Utica Shale Options Multiple Transportation Options Truck, Barge, Pipeline Canton Canton Refinery - 80 MBCD Condensate Capacity: 10-15 MBCD Wellsville Light Crude Oil Capacity: ~40 MBCD Catlettsburg Refinery - 240 MBCD Crude Oil Gathering Condensate Capacity: 10
Slide 21: Distribution & Marketing
‘MARATI Distribution & Marketing
Slide 22: U.S. Distillate Exports Continue to Grow
U.S. Distillate Exports Continue to Grow Total U.S. distillate exports averaged U.S. Distillate Exports 1,000 MBD in 2012 vs. 138 MBD 1200 Central & South America in 2005 1000 Mexico ~ 60% of the total U.S. distillate 800 Europe exports were to Latin America Thousand b/d 600 Other supported by
Slide 23: Garyville Diesel Export Success
Garyville Diesel Export Success Currently selling export diesel via Garyville Diesel Exports 120 114 term deals and spot bid process 100 Waterborne premium 80 76 MBPD 60 Product quality premium 35 40 No RIN obligation 20 0 Optimize exports w/Galveston Bay 2010 2011 2012 Deliver Top Quartil
Slide 24: Extensive Retail Network Provides Assured Sales
Extensive Retail Network Provides Assured Sales 84 63 Speedway 70 301 Fourth largest U.S.-owned/ 778 operated c-store chain 107 310 483 40 ~1,460 stores Speedway 860 395 647 60 1 ~2 million customers/day Brand 140 111 576 136 Located in seven states 173 * 311 128 * 139 * 256 Marathon bra
Slide 25: Speedway Sales – Stable Merchandise Margin
Speedway Sales – Stable Merchandise Margin Light Product Volume 4 3.30 3.23 2.94 3.03 B Gallons 3 2 1.0 3.7 (1.2) (0.9) 1 0 2009 2010 2011 2012 (Same Store % inside bars) Light Product and Merchandise Gross Margin 1,400 1,200 1,000 398 399 333 384 800 MM$ Merchandise Sales 4 600 3.11 3.19 2.92 3.06
Slide 26: Increase Marathon Brand Assured Sales Volume
Increase Marathon Brand 5,000 Light Product Sales Assured Sales Volume Millions of Gallons 4,000 3,000 2,000 1,000 0 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 Increase Speedway and Marathon Brand Assured Sales Volume 26
Slide 27: 2013 Value Drivers
2013 Value Drivers Detroit Heavy Oil Upgrade Project Galveston Bay refinery Growth of MPLX Profitable Speedway growth 2013 $1.6 billion capital investments* Capital return to shareholders Strong dividend, growing over the long term Continuing share repurchases - $2.65 billion current
Slide 28: Appendix
‘MARATI Appendix
Slide 29: MPC has Strong Earnings and Cash Flow, Investment Grade Credit Profile
Strong MPC has Strong Earnings and Cash Flow, Profile Investment Grade Credit Profile Financial Policies Historical Financial Summary Committed to Investment Grade profile 7,000 Rating Current 6,342 Agency MPC Rating 6,000 S&P BBB/A-2 (Stable) 5,347 Moody’s Baa2/P2 (Stable) 5,000 4,636 Maintain
Slide 30: Executing on Commitment to Total Shareholder Return
Balanced Return Executing on Commitment to Total Shareholder Return Base dividend increased 75% since July 1, 2011 $1.35 billion accelerated share repurchase programs, $2.65 billion share repurchase authorization through 2014 Total shareholder return of 93% for 2012 2012 Cumulative Total Share
Slide 31: Focused Return of Capital to Shareholders
Balanced Return Focused Return of Capital to Shareholders $5,000 Net cash provided by operations $4,492 $4,500 $4,000 60% of Dividends and share $1,757 Free Cash $3,500 Free Cash Flow** repurchases* Flow** $3,000 Millions $2,933 $2,500 Change in cash and all other $1,176 $2,000 $1,500 Cash capital e
Slide 32: MPC Key Strengths
MPC Key Strengths Balanced Operations Crude Oil Refining Capacity Crude Slate 62% PADD II Sour Crude 53% PADD III 47% Sweet Crude 38% 2012 As of 2/1/13 Assured Sales of Gasoline Production (Speedway + Brand + Wholesale Contract Sales) Assured Sales ~40% ~60% Wholesale and Other Sales 2012 Balanced a
Slide 33: MPC Relative Refining Position
MPC Relative Refining Position (MBCD) U.S. Crude Refining Capacity (1) (#) # of U.S. Refineries (1) 3,000 15 2,097 12 11 1,950 2,000 1,808 1,699 10 7 7 7 6 981 958 955 5 5 5 1,000 755 665 5 443 3 0 0 Shell HFC BP Chevron Tesoro Exxon MPC Citgo Valero Phillips Tesoro BP Exxon MPC Citgo Valero Phillip
Slide 34: Refinery Capacity
Refinery Capacity BPCD NCI* Garyville 522,000 10.8 Galveston Bay 451,000 15.3 Catlettsburg 240,000 10.3 Robinson 206,000 10.6 Detroit 120,000 9.9 Texas City 80,000 8.4 Canton 80,000 9.0 Total 1,699,000 11.6 ** The Nelson Complexity Index is a construction cost-based measurement used to describe the
Slide 35: U.S. Gulf Coast Offshore Imports
Positive Fundamentals U.S. Gulf Coast Offshore Imports Domestic crude oil cannot be exported, therefore domestic crude oil must be priced to back out imports Virtually all of the light sweet imports will be displaced in 2013 Other imports will be displaced as U.S. crude oil production increase
Slide 36: CAPP Western Canada Crude Supply Forecast
Positive Fundamentals CAPP Western Canada Crude Supply Forecast Annual Growth from 2011 - 2030 MBPD Light Supply 24 8,000 Heavy Supply 184 7,000 6,000 5,000 MBPD 4,000 3,000 2,000 1,000 0 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 *Oil Sands Heavy includes some volumes of upgraded heavy
Slide 37: Midwest Refineries’ Opportunity
Positive Fundamentals Midwest Refineries’ Opportunity North Dakota Production: ~750 MBPD 2011 Year-end: 535 MBPD Canada 2010 Year-end: 344 MBPD 2008 Year-end: 202 MBPD 2006 Year-end: 115 MBPD 2015 Production Forecast: North Dakota Up to 1,200 MBPD Montana Pipeline takeaway capacity has
Slide 38: Positive Industry Trends – Growing North American Production
Positive Industry Trends – Growing North American Production “Resource plays” dominate U.S. 3.0 output growth. Conventional 2000 - 2011 2011 - 2025 production (Alaska, offshore, 2.5 California, other legacy production) 2.0 struggles to sustain output 1.5 NGL output growth is mostly MMBD associat
Slide 39: Texas City and Galveston Bay Refinery Opportunity
Eagle Ford Shale Texas City and Galveston Bay Refinery Opportunity Eagle Ford is a very light (40-50 API), sweet crude (0.2% sulfur) Currently being trucked to markets Pipelines are being built Dock facilities are in operation and continue to be built to make it a “waterborne” crude to captu
Slide 40: U.S./Canada Key Existing and Planned Pipelines
U.S./Canada Key Existing and Planned Pipelines Edmonton Trans Hardisty Mountain Burnaby Anacortes Regina Cromer Clearbrook Montreal Superior Portland Sarnia Salt Lake City Casper Flanagan Chicago Chicap Mustang Estimated Steele City MBPD Pipeline Completion Patoka Gulf Coast Access 540 Keystone Curr
Slide 41: Indicative Transportation Costs
Indicative Transportation Costs Indicative Pipeline Costs Indicative Rail Costs Bakken to Patoka(1) $/BBL Bakken to U.S. East Coast(1) $/BBL Bakken Pipeline to Patoka 3.60 Railcar Loading 1.50 *Pipeline to MPC Rail Transportation 9.00 1.00 Refineries Railcar Lease 3.00 Total 4.60 Railcar Unloading 1
Slide 42: Detroit Logistics Options
Options… #2 #1 Detroit Logistics 2 Enbridge Enbridge Canadian crude via multiple routes Stockbridge Virtually all world Detroit crudes available via Chicago Samaria pipelines from USGC Lima All gasoline production sold in regional market #3 Platte/Keystone Patoka Wood River #4 #5 Capline Mid V
Slide 43: Attractive Midwest/PADD II
Attractive Midwest/PADD II Demand exceeds refining capacity in PADD II PADD IV Net imported ~13% of petroleum PADD V PADD II PADD I demand into PADD II, primarily from PADD III in 2012 Enhances margin opportunities PADD III Transportation premium embedded in PADD II gasoline prices Percentag
Slide 44: Annual Price and Margin Sensitivities
Annual Price and Margin Sensitivities $ Millions (After Tax) LLS 6-3-2-1 Crack Spread* Sensitivity ~$425 (per $1.00/barrel change) Sweet/Sour Differential** Sensitivity ~$225 (per $1.00/barrel change) LLS-WTI Spread*** Sensitivity ~$75 (per $1.00/barrel change) Refined Product Wholesale Margin Sensi
Slide 45: Galveston Bay Asset Acquisition Highlights
Galveston Bay Asset Acquisition Highlights Supports MPC strategy to grow in existing and contiguous markets and expand integrated model One of the largest and most complex refineries in the U.S. Well connected to crude and products markets, including exports Attractive base cash purchase pri
Slide 46: Galveston Bay Complements MPC’s Integrated System
Galveston Bay Complements MPC’s Integrated System Refinery 451,000 BPCD (475,000 BPSD) refinery Nelson Complexity Index: 15.3 Significant recent investments Excellent crude optionality Substantial products logistics opportunities Advantageous petrochemical configuration Cogen Facility
Slide 47: Galveston Bay Indicative Purchase Price Comparison
Enhancing Galveston Bay Asset Transaction Earnings Indicative Purchase Price Comparison TSO-Carson (8/2012) $16 MPC-Galveston Bay without earnout $21 Alon-Bakersfield (6/2010) $66 PBF-Del City (6/2010) $109 Delta-Trainer (4/2012) $122 MPC-Galveston Bay with earnout* $123 PBF-Paulsboro (12/2010) $151
Slide 48: Galveston Bay Projected Synergies and Capital Investments
Enhancing Galveston Bay Asset Acquisition Earnings Projected Synergies and Capital Investments (Millions) Projected Incremental Synergies EBITDA Projected Synergy Capital Investments $160 $160 $120 $120 $80 $80 $40 $40 $0 $0 2013E 2014E 2015E 2016E 2017E+ 2013E 2014E 2015E 2016E EBITDA Synergies of
Slide 49: Galveston Bay Projected Sustaining Capital
Galveston Bay Projected Sustaining Capital* 500 400 300 MM$ 200 100 0 2013E 2014E 2015E 2016E 2017E 2018E 2019E Refinery All Other * Excludes synergy and other value accretive investments 49
Slide 50: Galveston Bay Transaction Product Logistics Opportunities
Galveston Bay Transaction Product Logistics Opportunities Flexible product placement Domestic and export Southeast opportunities Midwest Synergies with MPC’s Texas City and Garyville refineries and MPC logistics Zachary Pasadena Garyville Texas City Exports to Florida Mexico/SA/Europe 50 50
Slide 51: Galveston Bay Marketing Assets and Integration
Galveston Bay Marketing Assets and Integration Integrated acquisition includes Assignment of branded-jobber contracts representing ~1,200 BP retail sites ~61 MBPD of gasoline sales Locations primarily in FL, MS, TN and AL BP trademark to be used during transition process Strategic step i
Slide 52: Galveston Bay Assets Expected Accretive Transaction
Galveston Bay Assets Expected Accretive Transaction (MM unless otherwise indicated) MPC Base EBITDA - analyst 2013 consensus estimates(1) $ 4,759 $ 4,759 Assets acquired EBITDA using 2006-2010 pricing(2)(4) 1,200 Assets acquired EBITDA using 2011 pricing(2)(5) 700 Total EBITDA $ 5,959 $ 5,459 Improv
Slide 53: Galveston Bay Assets Cash Purchase Price Including Full Earnout
Galveston Bay Assets Cash Purchase Price Including Full Earnout Base cash purchase price (millions) $ 598 Full earnout 700 Total purchase price with full earnout $ 1,298 Less: Cogen facility (290) Less: Terminals and other logistics assets (120) Less: Retail marketing (40) Estimated Net Refining Ass
Slide 54: MPC Well Positioned – Benefits of Retail Integration
Capturing Value MPC Well Positioned – Benefits of Retail Integration Ratable sales Optimized operations Refining Pipeline Terminal Biofuels blending base load Supply dislocation flexibility Reduced credit risk (Speedway) Speedway Connecting Pipelines Marketing Area Refineries Fully I
Slide 55: Speedway vs. Public Peers – 2011 Light Product Sales
Speedway vs. Public Peers – 2011 300 Light Product Sales Independent Refiners Average 157.1 M Gal/Store/Month 250 200 179.4 Public C-Store 150 Average 97.8 100 50 0 Casey's Couche-Tard Pantry Susser Speedway Valero Murphy Sunoco Tesoro Delek Western Refining 50 Light Product Margin Independent Refin
Slide 56: Speedway vs. Public Peers – 2011 Merchandise
Speedway vs. Public Peers – 2011 Merchandise Sales 200 178.5 Independent Refiners Public C-Store Average 95.4 $M/Store/Month 150 Average 110.7 100 50 0 Casey's Couche-Tard Pantry Susser Speedway Valero Murphy Sunoco Tesoro Delek Western Refining Public C-Store Merchandise Margin 50 43.9 Average 38.7
Slide 57: 4Q and Full Year 2012 Earnings
4Q and Full Year 2012 Earnings* 4Q 2012 4Q 2011 2012 2011 Earnings (Loss) $755 MM ($75) MM $3,389 MM $2,389 MM Adjusted Earnings (Loss) $760 MM ($75) MM $3,352 MM $2,406 MM Earnings (Loss) per Diluted Share $2.24 ($0.21) $9.89 $6.67 Adjusted Earnings (Loss) per Diluted Share $2.26 ($0.21) $9.79 $6.7
Slide 58: Adjusted Earnings 4Q 2012 vs. 4Q 2011 Variance Analysis
Adjusted Earnings (Loss)* 4Q 2012 vs. 4Q 2011 Variance Analysis $1,400 34 (27) 1,321 4 (493) $1,200 $1,000 $800 (4) 760 Millions $600 $400 $200 $0 (75) -$200 4Q 2011 Refining & Speedway Pipeline Interest & Income Non 4Q 2012 Marketing Transportation Other Taxes Controlling Interest *References to Ea
Slide 59: Refining & Marketing Segment Income 4Q Variance
Refining & Marketing Segment Income 4Q 2012 vs. 4Q 2011 Variance Analysis $1,500 182 35 (90) (24) (43) 1,139 81 809 $1,000 Millions $500 371 $0 (182) -$500 4Q 2011 *LLS *Sweet/ *LLS /WTI *LLS *Market Direct Other Other 4Q 2012 6-3-2-1 Sour Diff. Spread Prompt vs. Structure Operating Gross Crack Deli
Slide 60: Refining & Marketing Segment Income 2012 vs. 2011
Refining & Marketing Segment Income 2012 vs. 2011 Variance Analysis $7,000 119 49 (126) (197) 870 (758) $6,000 1,684 (134) 5,098 $5,000 $ Millions $4,000 3,591 $3,000 $2,000 $1,000 $0 2011 *LLS *Sweet/ *WTI-LLS *LLS *Market Direct Other Other 2012 6-3-2-1 Sour Diff. Spread Prompt Structure Operating
Slide 61: Speedway Segment Income Variance Analysis
Speedway Segment Income Variance Analysis 4Q 2012 vs. 4Q 2011 2012 vs. 2011 $100 13 (17) $400 (52) 76 8 $80 73 77 15 310 $300 271 $60 Millions Millions $200 $40 $100 $20 $0 $0 4Q 2011 Light Merchandise Other 4Q 2012 2011 Light Merchandise Other 2012 Product Gross Margin Product Gross Margin Gross Gr
Slide 62: Pipeline Transportation Segment Income Variance Analysis
Pipeline Transportation Segment Income Variance Analysis 4Q 2012 vs. 4Q 2011 2012 vs. 2011 $100 $300 13 (5) 54 (7) (13) (7) (17) $80 33 72 216 $200 199 $60 Millions Millions 38 $40 $100 $20 $0 $0 4Q 2011 Trans. Pipeline Mechanical Other 4Q 2012 2011 Trans. Pipeline Mechanical Other 2012 Revenue Affi
Slide 63: Total Company Cash Flow 4Q 2012
Total Company Cash Flow 4Q 2012 $6,000 919 (403) (116) (500) 42 4,860 $5,000 1,124 407 $4,000 3,387 Millions $3,000 $2,000 $1,000 $0 9/30/12 Operating Working Cash Capital Dividends Accelerated MPLX Other 12/31/12 Cash Cash Flow Capital Expenditures Paid Share Proceeds Cash Balance before and Repurc
Slide 64: Select Balance Sheet/Cash Flow Data
Select Balance Sheet/Cash Flow Data (MM$) 2012 2012 2012 2012 4Q 3Q 2Q 1Q As of quarter ended: Cash and cash equivalents 4,860 3,387 1,895 2,205 Total debt 3,361 3,349 3,335 3,321 Equity 12,105 11,467 10,326 9,216 Debt-to-total-capital ratio 22% 23% 24% 26% Last Twelve Months (LTM) EBITDA 6,342 4,94
Slide 65: 1Q 2013 Outlook
1Q 2013 Outlook Projected 1Q 2013* 1Q 2012 Crude throughput 1.40 MMBD 1.15 MMBD Total throughput 1.65 MMBD 1.32 MMBD Percent of WTI-priced crude 24% 30% Direct operating costs in Refining & Marketing gross margin**: Planned turnaround and major maintenance $1.25 $1.05 Depreciation & amortization 1.5
Slide 66: Capital Expenditures & Investments
Capital Expenditures & Investments (MM$) 2012 Budget 4Q 2012 2012 2013 Budget* Refining & Marketing 745 192 705 1,016 Speedway 353 83 340 255 Pipeline Transportation 230 42 211 184 Corporate and Other 91 56 103 160 Subtotal 1,419 373 1,359 1,615 Capitalized Interest 116 6 101 43 Total Capital Expend
Slide 67: 2013 Significant Capital Projects
2013 Significant Capital Projects Upgrade Galveston Bay refinery Speedway expansion Garyville diesel projects Utica Shale projects Condensate splitters Wellsville terminal Patoka to Catlettsburg pipeline upgrade Robinson unicracker revamp Garyville gasoline and diesel export Catl
Slide 68: Reconciliation
Reconciliation Earnings (Loss) to Adjusted Earnings (Loss)* ($MM) 2011 2012 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Earnings (Loss) 529 802 1,133 (75) 596 814 1,224 755 Pension settlement expenses** 53 22 5 MN asset sale settlement gain** (117) Income tax law changes 17 Adjusted Earnings (Loss) 529 819 1,133 (75) 5
Slide 69: Reconciliation
Reconciliation Free Cash Flow to Net Cash Provided from Operations ($MM) 2012 (Quarter to date) 1Q 2Q 3Q 4Q Net cash provided from operating activities 347 269 1,833 2,043 Additions to property, plant and equipment (309) (326) (331) (403) Acquisitions - (163) (27) - Free cash flow 38 (220) 1,475 1,6
Slide 70: Income
Income ($MM unless otherwise noted) 2011 2012 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Refining & Marketing segment income (loss) 802 1,260 1,711 (182) 943 1,325 1,691 1,139 Speedway segment income 33 80 85 73 50 107 76 77 Pipeline Transportation segment income 51 54 56 38 42 50 52 72 Corporate and other unallocated
Slide 71: EBITDA Reconciliation to Net Income Attributable to MPC
EBITDA Reconciliation to Net Income (Loss) Attributable to MPC ($MM) 2009 2010 2011 2012 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Net Income (Loss) attributable to MPC 449 623 529 802 1,133 (75) 596 814 1,224 755 Less: Related party net interest and other financial income 45 24 17 18 - - - - 1 - Less: Net interest a
Slide 72: Cash Provided from Operations Before Changes in Working Capital Reconciliation
Cash Provided from Operations Before Changes in Working Capital Reconciliation to Cash Provided from Operations ($MM) 2012 (Quarter to date) 1Q 2Q 3Q 4Q Net cash provided from operations 347 269 1,833 2,043 Less changes in working capital: Changes in current receivables (406) 1,159 (393) 491 Changes
Slide 73: MPC Crude Slate
MPC Crude Slate 100% 90% 21 23 22 24 23 22 22 20 25 31 80% Other Sweet 70% 60% Other Sour 56 52 52 49 48 45 50 52 55 50% 48 40% WTI Based 30% 20% 26 27 29 30 28 26 10% 21 23 25 25 0% 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 73
Slide 74: Refining & Marketing Indicative Gross Margin – 4Q 2012
Refining & Marketing Indicative Gross Margin – 4Q 2012 $2,500 51 (754) 612 29 $2,000 $1,500 116 1,423 (284) 863 Millions 1,139 $1,000 506 $500 $0 *LLS *Sweet/ *LLS/WTI *LLS *Market Direct Other R&M Other R&M 6-3-2-1 Sour Diff. Spread Prompt vs. Structure Operating Gross Gross Segment Crack Delivered
Slide 75: Market Indicators Used in Project EBITDA Calculations
Market Indicators Used in Project EBITDA Calculations 2011 2006 - 2010 West Texas Intermediate 3-2-1 crack spread 23.31 10.68 Light Louisiana Sweet 3-2-1 crack spread 6.05 8.05 Arab Light 3-2-1 crack spread 11.16 14.03 Arab Medium 4-2-1-1 crack spread 7.71 9.54 Light Louisiana Sweet 6-3-2-1 crack sp
Slide 76: MPLX Summary of Key Investment Highlights
MPLX Summary of Key Investment Highlights Robust Growth Opportunities Attractive organic growth prospects augmented with tariff and volume increases Potential for significant growth through acquisitions alongside, and/or from, MPC; MPC has a very substantial portfolio of logistics assets, includ
Slide 77: MPLX Offering Summary
Creating Value MPLX Offering Summary Issuer MPLX LP Sponsor Marathon Petroleum Corporation Exchange / Ticker NYSE / MPLX Estimated Distribution Coverage 1.10x Expected Tax Shield 80% for the period from the IPO until December 31, 2015 $203 million to MPC $192 million to pre-fund certain expansio
Slide 78: MPC has Created an Industry-Leading MLP
Creating Value MPC has Created an Industry-Leading MLP MPLX’s Primary Business Strategies Generate stable cash flows by providing primarily fee-based midstream Focus on Fee-Based services to MPC and third parties Businesses Mitigate volatility in cash flows by entering into long-term transportat
Slide 79: MPC and MPLX are Aligned
MPC and MPLX are Aligned MPLX Organizational Structure Marathon Petroleum MPC views MPLX as integral to Corporation and Affiliates (NYSE: MPC) its operations and is aligned with its success and 100.0% 71.6% incentivized to grow MPLX ownership interest Public LP interest MPLX GP LLC Initial MPLX
Slide 80: MPLX’s Assets are Integral to MPC
MPLX’s Assets are Integral to MPC Marathon Pipe Line LLC and Ohio River Pipe Line LLC comprise one of the largest networks of pipeline systems in the U.S. based on total volume delivered 1,004 miles of common carrier crude oil pipelines 1,902 miles of common carrier products pipelines Inclus
Slide 81: MPC Relationship Provides Robust Growth Opportunities for MPLX
MPC Relationship Provides Robust Growth Opportunities for MPLX Logistics infrastructure is extremely important to MPC's success MPC intends to use MPLX as the primary growth vehicle for its midstream logistics business MPLX can pursue acquisitions directly from MPC MPLX can pursue third-part
Slide 82: MPLX Stable and Predictable Cash Flows
MPLX Stable and Predictable Cash Flows Revenue – Customer Mix1 MPLX’s assets consist of fee-based pipeline 11% systems and storage assets $55 MM MPC has historically accounted for 85%+ of 16% the volumes shipped on MPLX’s pipelines $81 MM $364 MM MPC has entered into multiple long-term transpo
Slide 83: MPLX: Ideal Assets for an MLP
MPLX: Ideal Assets for an MLP Historical crude and product volumes have been extremely stable with low variability despite material changes in the broader commodity price environment Butane cavern and storage facilities generate stable and ratable (capacity based) fees Throughput and storage a
Slide 84: MPLX Strategically Located Assets
MPLX Strategically Located Assets MPLX operates all of its assets Assets are primarily located throughout the Midwest and U.S. Gulf Coast In 2011, these regions collectively comprised ~72% and ~48% of total U.S. crude distillation capacity and finished products demand, respectively Existing
Slide 85: MPLX Strategically Located Assets (Continued)
MPLX Strategically Located Assets (Continued) MPLX’s assets and a large number Bakken of MPC's retained assets are in the Williston Basin “heart” of the Midwest Appalachian infrastructure build-out Basin Michigan Antrim Basin Strategically located near emerging Devonian (Ohio) Excello-Mulky Fore
Slide 86: MPLX High Quality, Well-Maintained Asset Base
MPLX High Quality, Well-Maintained Asset Base MPLX continually invests in the maintenance and integrity of its assets Uses a patented integrity management program to enhance pipeline safety and reliability Top tier reputation and active industry involvement Certifications, Initiatives and Indu
Slide 87: MPLX Operations Deliver Top Tier Safety Performance
MPLX Operations Deliver Top Tier Safety Performance Patented integrity management program fully compliant with DOT regulations State of the art in-line assessment practices Leading control room management practices Industry leader in helping to improve Damage Prevention practices 87
Slide 88: MPLX Conservative Coverage with Predictable and Growing Distributions
MPLX Conservative Coverage with Predictable and Growing Distributions Estimated Twelve Months Ending 12/31/2013 ($ in millions, unless otherwise noted) Stable historical results and strong growth going forward Adj. EBITDA $197.0 Predictable cash flows underpinned by MPC throughput Less: and stor
Slide 89: MPLX Adjusted EBITDA Bridge Analysis
MPLX Adjusted EBITDA Bridge Analysis ($MM) 300 14.6 (49.9) 35.7 250 98.4 (13.5) (10.8) (1.3 ) 197.0 (92.2) 200 168.3 (44.5) 150 123.8 104.8 100 50 (44.5) 73.2 -- 2011 2011 PF Pro Forma 2011 Tariffs Volumes Other Revenue Cost of Purchases G&A Other Taxes Total MPC Retained Estimated Adjustments ¹ and
Slide 90: MPLX Pipeline Throughput Agreements
MPLX Pipeline Throughput Agreements Initial MPC Min. 2011 MPC Est. 12 Mo. Ended 12/31/13 Term Diameter Commitment Throughput Weighted Average MPC Min. Asset (Years) (Inches) (MBPD) (MBPD) Tariff ($/BBL) Revenue ($MM) Crude Systems Patoka to Lima 10 20" / 22" 40 132 $0.52 $7.6 Catlettsburg and Robins
Slide 91: Experienced MPLX Management Team
Experienced MPLX Management Team Management team includes MPC executive officers with an average 25 years of experience with MPLX's assets Years Experience Position at MPC Position at MPLX Industry With MPC Gary R. Heminger President and Chairman of the Board and 37 37 Chief Executive Officer Chief
Slide 92: MPLX 4Q Financial Information
MPLX 4Q Financial Information Post IPO (MM$) 10/31/12 – 12/31/12 Revenues and other income 83.6 Costs and expenses 57.0 Income from operations 26.6 Income before income taxes 26.4 Net income 26.3 Net income attributable to MPLX LP 13.1 Adjusted EBITDA attributable to MPLX LP 18.2 Distributable Cash
Slide 93: MPLX Adjusted EBITDA and Distributable Cash Flow
MPLX Adjusted EBITDA and Distributable Cash Flow Post IPO (MM$) 10/31/12 – 12/31/12 Adjusted EBITDA 34.6 Less: Adjusted EBITDA attributable to MPC-retained interest 16.4 Adjusted EBITDA attributable to MPLX LP 18.2 Less: Cash interest paid, net 0.2 Maintenance capital expenditures paid 3.4 Plus: Inc
Slide 94: MPLX: Strong Financial Flexibility to Manage and Grow Asset Base
MPLX: Strong Financial Flexibility to Manage and Grow Asset Base MPLX’s undrawn $500 million revolver provides significant liquidity to grow its business As of ($MM) 12/31/12 Cash and cash equivalents 216.7 Total assets 1,301.3 Total debt 11.3 Equity 1,226.8 Consolidated Total Debt to Consolidated
Slide 95: MPLX: Significant Capital Expenditures
MPLX: Significant Capital Expenditures Major expansion projects Patoka to Catlettsburg Patoka tank farm modifications SCADA project 2013 Capex Budget (1) Maintenance Capex 16.75% of 2013 forecasted Adjusted EBITDA* Maintenance $33 MM Expansion $109 MM (1) Capex budget represents both MPC
Slide 96: MPLX LP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Net Income
MPLX LP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Net Income Predecessor Post-IPO 3 Months ($MM) 10/1/12 – 10/30/12 10/31/12 – 12/31/12 Ended 12/31/12 Net income 15.8 26.3 42.1 Less: Net income attributable to MPC-retained interest - 13.2 13.2 Net income attributable to MPLX LP 1
Marathon Petroleum — Investor Presentation (March 2013) on 6ix