Slide 1: Second Quarter 2019 Conference Call
Second Quarter 2019 Conference Call August 1, 2019
Slide 2: Forward-Looking Statements and Additional Information
Forward-Looking Statements and Additional Information 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, MPC’s a
Slide 3: Strategic Overview & Updates
Strategic Overview & Updates 3
Slide 4: Midstream Strategic Update
Midstream Strategic Update Successfully combined MPLX and ANDX into one public company Continue focus on portfolio optimization Streamline capex focusing on most attractive returns Advance development of integrated Permian crude oil and natural gas logistics systems Invest in logistics proje
Slide 5: Second Quarter Highlights
Second Quarter Highlights $ Millions (unless otherwise noted) 2Q19 Adjusted Earnings per Share ($/share)(a) $1.73 Adjusted EBITDA $3,221 Net Income $1,106 Cash from Operations, excluding Working Capital $2,823 Realized Synergies $270 Share Repurchases + Dividends $852 (a) Based on weighted average d
Slide 6: Second Quarter Highlights (cont’d)
Second Quarter Highlights (cont’d) 2Q 2019 vs. 1Q 2019 Adjusted EBITDA Reconciliation to Net Income 3,500 +1,275 3,221 3,000 -20 -56 2,500 2,000 +327 -1,123 $MM 1,658 1,500 -19 1,106 1,000 -936 500 0 1Q 2019 Midstream Retail Refining & Corporate and 2Q 2019 Transaction Turnaround Interest, 2Q 2019 N
Slide 7: Realized Synergies – 2Q 2019
Realized Synergies – 2Q 2019 2Q19 realized synergies of $270 million, includes $34 million of one-time synergies (a) Refining & Marketing Retail Corporate ($ MM) ($ MM) ($ MM) Total: 199 Total: 32 Total: 39 One-time(a): 23 One-time(a): 11 One-time(a): - Synergy Examples: Turnaround cost savings
Slide 8: Realized Synergies – YTD
Realized Synergies – YTD (a) Capex Reduction Cost Reduction Profit Enhancement 403 288 199 89 68 47 39 32 29 15 1Q19 2Q19 YTD'19 1Q19 2Q19 YTD'19 1Q19 2Q19 YTD'19 YTD'19 Refining & Retail Corporate Total Marketing On track to achieve expected 2019 gross run-rate synergies of up to $600 million (a) I
Slide 9: Midstream EBITDA
Midstream EBITDA 2Q 2019 vs. 1Q 2019 1,400 MPLX gathered, processed, 1,215 1,196 +7 and fractionated volumes 1,200 -16 -10 up >13% versus 2Q18 1,000 Expect to add 600 MMcf/d 800 $MM of processing capacity in second half of 2019 600 400 Progressed multiple crude and natural gas pipeline 200 ini
Slide 10: Retail EBITDA
Retail EBITDA 2Q 2019 vs. 1Q 2019 800 Strong fuel margins +64 +12 623 6.3% year-over-year increase 600 +265 -14 in same store merchandise sales $MM 400 Closed on acquisition of 33 296 stores in July 200 Converted 407 stores to Speedway since combination (700 targeted by year-end 0 1Q 2019 Fu
Slide 11: Refining & Marketing Adjusted EBITDA
Refining & Marketing Adjusted EBITDA 2Q 2019 vs 1Q 2019 Strong execution with 97% 1,800 utilization +25 +13 1,600 +398 1,554 Completed planned 1,400 -10 maintenance at Los Angeles, 1,200 +173 Martinez, and Garyville 1,000 +676 $MM Capture below historical 800 levels due to West Coast 600 turna
Slide 12: Total Consolidated Cash Flow
Total Consolidated Cash Flow 2Q 2019 4,000 +275 +2,823 3,500 -201 MPLX +203 3,000 ANDX + 97 MPC - 8 2,500 -1,448 $MM 2,000 1,500 +88 -852 1,247 1,000 877 -315 500 0 3/31/2019 Operating Cash Working Net Debt Capital Return of Net Distributions Other 6/30/2019 Cash Balance Flow before Capital Expendit
Slide 13: Third-Quarter 2019 Outlook
Third-Quarter 2019 Outlook Other Crude Total Depreciation Charge/ Sweet Sour Operating Distribution Planned Throughput Throughput and Feedstocks Crude Crude Cost (b) Cost (c) Turnaround (a) (a) Amortization Throughput (a) $/BBL of Total in MBPD Percent of Throughput $MM $MM $MM Throughput Gulf Coast
Slide 14: Questions & Answers
Questions & Answers Strategic Overview
Slide 15: Appendix
Appendix 15
Slide 16: Capitalization and Select Balance Sheet Data
Capitalization and Select Balance Sheet Data MPC As of June 30, 2019 MPC MPLX ANDX Excluding Consolidated Adjustments Adjustments(a) (a) MPLX & ($MM except ratio data) ANDX Total Debt 28,407 14,036 5,229 9,142 Total Equity (b) 44,066 9,310 3,801 30,955 Debt-to-Capital Ratio 39% - - 23% Cash and cash
Slide 17: Refining & Marketing Segment Income
Refining & Marketing Segment Income 2Q 2019 6,000 +254 +22 +375 5,000 4,680 4,347 4,000 -984 Volume 258 $MM Product -547 3,000 Crude -695 -1,527 2,000 +11 -1,277 906 1,000 -648 0 Blended Sweet Sour Market Other R&M Operating Distribution Other Turnaround R&M Crack Differential Differential Structure
Slide 18: Refining & Marketing Margins – Market vs. Realized
Refining & Marketing Margins – Market vs. Realized Total system capture of 82% vs. ~90% historical average, key factors included: Non-transportation fuel pricing disconnect with gas crack West Coast turnaround work Higher Gulf Coast throughput (41%) vs basket used in Market Data (38%) 18
Slide 19: Distribution Costs – Components
Distribution Costs – Components 2Q 2019 1,400 369 1,277 1,200 1,000 429 $MM 800 600 479 400 200 0 Third Party MPLX/ANDX MPLX Fuels Distribution and 2Q 2019 Fees and Other Fees Refinery Logistics Fees Distribution Costs Total distribution fees of $798 million paid to MLPs; and $431 million returned t
Slide 20: Refining & Marketing Segment Income
Refining & Marketing Segment Income 2Q 2019 vs. 2Q 2018 Variance Analysis 4,000 Volume Effect 3,500 +2,3… +131 +35 3,000 2,500 -424 -622 $MM 2,000 Volume -52 Product -314 1,500 Crude -256 -751 1,025 -503 1,000 -23 906 -334 500 0 2Q 2018 Blended Sour Sweet Market Other Operating Distribution Other Tu
Slide 21: Refining & Marketing Segment Income
Refining & Marketing Segment Income 2Q 2019 vs. 1Q 2019 Variance Analysis 2,000 Volume -48 +2,102 Product -599 Crude +7 1,500 -164 -37 -14 1,000 +25 +13 906 $MM -640 -10 -35 500 0 (334) -500 1Q 2019 Blended Sour Sweet Market Other Operating Distribution Other Turnaround 2Q 2019 Crack Differential Di
Slide 22: Midstream Segment Income
Midstream Segment Income 2Q 2019 vs. 2Q 2018 Variance Analysis 1,000 +223 878 -13 800 +51 617 600 $MM 400 200 0 2Q 2018 MPLX ANDX Other 2Q 2019 (a) Midstream (a) Andeavor Logistics LP, acquired by Marathon on October 1, 2018 22
Slide 23: Retail Segment Income
Retail Segment Income 2Q 2019 vs. 2Q 2018 Variance Analysis 800 +105 +455 600 +27 493 -196 -57 $MM 400 200 159 0 2Q 2018 Fuel Merchandise Operating Depreciation Other 2Q 2019 Margin Expense (a) (a) Reflects operating, selling, general and administrative expenses. 23
Slide 24: Earnings
Earnings 2018 2019 ($MM unless otherwise noted) 1Q 2Q 3Q 4Q 1Q 2Q Refining & Marketing segment income (loss) (133) 1,025 666 923 (334) 906 Retail segment income 95 159 161 613 170 493 Midstream segment income 567 617 679 889 908 878 Corporate and other unallocated items (89) (81) (99) (233) (191) (1
Slide 25: Reconciliation
Reconciliation Net Income Attributable to MPC to Adjusted Net Income Attributable to MPC ($MM) 2Q19 2Q18 Net income attributable to MPC 1,106 1,055 Pre-tax adjustments: Transaction-related costs 34 10 Litigation 22 - Impairments - (1) Tax impact of adjustments(a) (14) (2) Adjusted net income attribu
Slide 26: Reconciliation
Reconciliation Net Income Attributable to MPC to Adjusted EBITDA and LTM Adjusted Pro Forma EBITDA ($MM) 3Q ‘18 4Q ‘18 1Q ‘19 2Q ‘19 LTM Net Income (loss) attributable to MPC 737 951 (7) 1,106 2,787 Add: Net interest and other financial costs 240 385 306 322 1,253 Net income attributable to noncontr
Slide 27: Reconciliation
Reconciliation MPLX Net Income to EBITDA Related to MPLX 2018 2019 ($MM) LTM 1Q 2Q 3Q 4Q 1Q 2Q MPLX Net Income 423 456 516 439 509 488 1,952 Add: Net interest and other financial costs 130 151 153 227 171 170 721 Provision (benefit) for income taxes 4 1 3 - (2) 1 2 Depreciation and amortization 176
Slide 28: Reconciliation
Reconciliation ANDX Net Income to EBITDA Related to ANDX 2018 2019 ($MM) LTM 1Q 2Q 3Q 4Q 1Q 2Q ANDX Net Income 131 132 166 170 158 160 654 Add: Net interest and other financial costs 55 60 57 60 62 63 242 Depreciation and amortization 89 93 85 102 101 105 393 1,28 EBITDA related to ANDX 275 285 308
Slide 29: Reconciliation
Reconciliation Cash Provided by Operations to Operating Cash Flow Before Changes in Working Capital 2018 2019 ($MM) 2Q 3Q 4Q 1Q 2Q Cash provided by operations 2,386 1,182 2,727 1,623 2,622 Less changes in working capital: Changes in current receivables (321) (484) 2,298 (1,037) (713) Changes in inve
Slide 30: Reconciliation
Reconciliation Refining & Marketing Income from Operations to Refining & Marketing Margin 2018 2019 ($MM) 1Q 2Q 3Q 4Q 1Q 2Q Refining & Marketing loss from operations (133) 1,025 666 923 (334) 906 Plus: Refining operating costs(a) 909 776 795 1,657 1,552 1,527 Refining depreciation and amortization 2
Slide 31: Reconciliation
Reconciliation Segment Income from Operations to Segment Adjusted EBITDA and Adjusted EBITDA 2018 2019 ($MM) 1Q 2Q 3Q 4Q 1Q 2Q Refining & Marketing Segment Segment income from operations (133) 1,025 666 923 (334) 906 Add: Depreciation and amortization 252 252 257 413 427 411 Refining planned turnaro
Slide 32: Reconciliation
Reconciliation Retail Income from Operations to Retail Total Margin 2018 2019 ($MM) 1Q 2Q 3Q 4Q 1Q 2Q Retail income from operations 95 159 161 613 170 493 Plus (Less): (a)Retail fuel margin is defined as the price paid by consumers or direct dealers less Operating, selling, general and administrativ
Slide 33: MARATHON
MARATHON ®