Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — J.P. Morgan 2017 Energy Equity Investor Conference
82 slides from Marathon Petroleum's conference presentation, Jun 26, 2017
Slide 1: J.P. Morgan 2017 Energy Equity Investor Conference
J.P. Morgan 2017 Energy Equity Investor Conference Gary Heminger, Chairman, President and CEO June 26, 2017
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“) and MPLX LP (“MPLX”). These forward-looking statements relate to, among other things, expectations, estimates and projection
Slide 3: Recent Changes to Executive Team
Recent Changes to Executive Team Don Templin named President of MPC effective July 1 Mike Hennigan appointed President of MPLX effective June 20 3
Slide 4: Driving Strong Financial Performance Through Sustainable Competitive Advantages
Driving Strong Financial Performance Through Sustainable Competitive Advantages High Quality Network • Extensive platform of Midstream, Retail and Refining Assets of Strategically • Flexibility and optionality to optimize operations in a dynamic market Located Assets • Maximizes sales value of our p
Slide 5: Delivering Significant Returns for Our Shareholders
Delivering Significant Returns for Our Shareholders Since becoming an independent Commitment to Ongoing Return company on July 1, 2011 of Capital to Shareholders MPC Has Returned Nearly Repurchased $ 11 ~30 % Dividends Consistently growing dividend 25% CAGR since spin BILLION of Outstanding Common S
Slide 6: MPC Share Price Outperforms Peers
MPC Share Price Outperforms Peers First dropdown completed Announced incremental $3 B Update on strategic actions supporting $420 MM of share repurchase authorization 1Q share repurchases 10% 0% (10%) Peer Index MPC (20%) 1Q 2017 2Q 2017 Peer Index includes HollyFrontier, PBF Energy, Phillip66, Teso
Slide 7: Executing Strategic Plan to Enhance Value
Executing Strategic Plan to Enhance Value Asset Dropdowns 1Q17 1st dropdown completed in March ~8x EBITDA multiple ~$250 MM annual EBITDA Share repurchases of $420 MM Expected ~$4.5 B after-tax cash proceeds from dropdowns and ~$1.2 B - $1.4 B annual Announced incremental $3 B MLP-qualifying EBITD
Slide 8: Strategic Plan to Enhance Shareholder Value
Strategic Plan to Enhance Shareholder Value Pro Forma Midstream Valuation (1)(2) (1)(3)(4) 2018E LP & GP distributions MPC receives from MPLX Total Midstream Value to MPC after Strategic Plan (6) (4) (4)(7) (7) MPLX Cost of Equity(5) Illustrative gross value per MPC share 2016: 8.3% 2018E Pro Forma:
Slide 9: MPLX - Key Investment Highlights
MPLX - Key Investment Highlights Diversified large-cap MLP positioned to deliver attractive returns over the long term Forecast distribution growth of 12% to 15% for 2017, double digit for 2018 Gathering & • Largest processor and fractionator in the Marcellus/Utica basins Processing • Strong footpri
Slide 10: Delivering Consistent Growth in EBITDA and DCF
MPLX - Delivering Consistent Growth in EBITDA and DCF 42% increase in EBITDA since MarkWest acquisition 55% increase in DCF while maintaining strong coverage ratio 500 1.50 423 400 375 391 1.40 351 Coverage Ratio 298 302 300 1.30 $MM 200 1.20 354 285 301 318 100 227 236 1.10 0 1.00 4Q15* 1Q16 2Q16 3
Slide 11: MPLX - 2017 Priorities and Strategy
MPLX - 2017 Priorities and Strategy Gathering & Processing Logistics & Storage Executed strategic agreements to Completed multiple acquisitions support continued long-term growth in – Terminal, pipeline and storage assets from Marcellus rich gas areas sponsor, MPC – Range Resources in Pennsylvan
Slide 12: Speedway
Speedway Serving More Than 2 Million Customers Every Day High Quality • Largest company-owned and -operated c-store chain east of Mississippi Network of Retail • Sold ~6 B gallons of transportation fuels and $5 B in merchandise in 2016 Locations • 2017 planned investments of ~$380 MM • #1 in EBITDA/
Slide 13: Speedway – Top-tier Performer
Speedway – Top-tier Performer Generates predictable, stable cash flows #1 in EBITDA/store/month vs. public peers 30 EBITDA 20 10 $M/store/month - Speedway Murphy USA Casey's Couche-Tard Sunoco CST Alon USA Western Refining 100 Total Margin 75 50 25 - Sunoco Speedway Casey's Couche-Tard CST Murph
Slide 14: Speedway Exceeding Expected Acquisition-related Synergies
Speedway Exceeding Expected Acquisition-related Synergies Continuing to focus on marketing enhancements opportunities 2016 actual synergies of $180 MM exceeded prior projection Synergies and Marketing Enhancements 250 225 200 190 180 149 $MM 150 120 100 75 47 50 20 0 2014E 2014 2015E 2015 2016E
Slide 15: Speedway – Focus on LPBE
Speedway – Focus on LPBE 12.39 Each 1.00 cent per 12 gallon improvement = ~$60 MM annual 10 pretax earnings Light Product Break Even (cpg) 8 7.35 Measure of operating efficiency and 6 merchandise contribution to total 5.41 expense 4 ~26% Potential to drive substantial value in the 2.56 reduction
Slide 16: 2017 Macro Outlook
2017 Macro Outlook U.S. macro picture remains solid – Expect good underlying domestic and export demand for refined products – Distillate demand expected to benefit from increased commercial activity – Gasoline demand expected to be as strong as 2016 despite modest start OPEC’s resolve to reduce
Slide 17: Sustained Global Demand Growth
Sustained Global Demand Growth Expect global oil demand growth to be sustained near Global Oil Demand 115 2.0 current levels Global Oil & Liquids Demand (MMBD) YOY Demand Growth (MMBD) Rising global population and 110 living standards propel fuel 1.5 105 demand Nonfuel uses such as 100 1.0 pet
Slide 18: U.S. Product Exports Will Help Meet Global Demand
U.S. Product Exports Will Help Meet Global Demand EIA’s 2017 Annual Energy EIA Annual Energy Outlook Product Exports Outlook 8 – Projects growth in U.S. product exports including gasoline, 7 diesel and propane 6 – U.S. refining expected to 5 remain highly competitive in MMBD the future 4 MPC vie
Slide 19: U.S. Refiners Have Sustained Export Advantages
U.S. Refiners Have Sustained Export Advantages Lower-cost natural gas Large, complex refineries 2016 Region Utilization Access to lower-cost feedstocks Rate(1) High-utilization rates North America 85% Sophisticated workforce MPC 95% Natural Gas Price Comparison Asia 85% 18 European Natural
Slide 20: Export Market Remains Robust
Export Market Remains Robust Expect MPC exports to resume to typical MPC Export Capacity 600 levels in 2Q 2017 of ~300 MBPD 510 Demand from Latin America remains 500 115 strong for both diesel and gasoline 395 400 365 While arbitrage to Europe for diesel is not 345 320 MBPD always open, occasi
Slide 21: Industry-leading Refining Network
Industry-leading Refining Network High-quality, • Third-largest U.S. refiner linked to extensive logistics and retail network Strategically Located • Process wide range of crude oils, feedstocks and condensate ranging Refineries from two-thirds heavy sour to two-thirds light sweet crudes • Peer-lead
Slide 22: Continuous Peer-leading Refining Performance
Continuous Peer-leading Refining Performance Based on Solomon Associates Benchmarking Study Operating Expenses Energy Efficiency Return on Investment Higher Return Less Efficient Higher Cost 2014 2016 2014 2016 2014 2016 MPC Merchant Group US Avg MPC Merchant Group US Avg MPC Merchant Group US Avg 2
Slide 23: Refining & Marketing Margin Enhancing Investments
Refining & Marketing Margin Enhancing Investments ~$275 MM planned in 2017 Estimated returns in excess of 20% STAR (South Texas Asset Repositioning program) – Increase residual oil (resid) processing • Expand resid hydrocracker • Improve gas oil recovery – Revamp crude unit • Increase distillate a
Slide 24: Strong Liquidity and Capitalization
Strong Liquidity and Capitalization As of March 31, 2017 MPC Committed to maintaining investment MPC MPLX Excluding Consolidated Adjustments(a) grade credit profiles at MPC and ($MM except ratio data) MPLX MPLX Debt 12,598 6,655 5,943 Substantial available liquidity at MPC Mezzanine equity 1,000
Slide 25: Our Priorities for Value Creation
Our Priorities for Value Creation Maintain Top-tier Safety and Environmental performance Execute Strategic Actions to Enhance Value for Investors Increase Capital Return to Shareholders Grow Higher Valued and Stable Cash-flow businesses Enhance Margins for our Refining operations 25
Slide 26: Appendix
Appendix 26
Slide 27: Strong Operational Performance and Responsible Corporate Leadership
Strong Operational Performance and Responsible Corporate Leadership 27
Slide 28: Operating Income per Barrel of Crude Throughput
Operating Income per Barrel of Crude Throughput* MPC’s Rank 20 MPC’s Rank during periods of strong West Coast margins** 15 Competitor Range 1 2 10 2 5 $/BBL 1 3 6 1 3 2 5 2 7 3 3 3 3 1 3 6 2 0 -5 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Mar.
Slide 29: 2017 Capital Outlook
2017 Capital Outlook Excluding Acquisitions 10% 3% Speedway Corporate & Other MPC excluding MPLX ~$1.6 B Refining & Marketing (R&M) – $1,085 MM Midstream – $65 MM 22% Speedway – $380 MM R&M Sustaining Corporate & Other – $100 MM 56% Capital MPLX MPLX ~$2.1 B 7% R&M Margin Growth – $1,900 M
Slide 30: About MPLX
About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary businesses – Logistics & Storage includes transportation, storage and distribution of crude oil, refined petroleum products and other hydrocarbon-based products
Slide 31: MPLX and MPC are Aligned
MPLX and MPC are Aligned MPLX Organizational Structure MPC views MPLX as integral to its Marathon Petroleum Corporation and Affiliates operations and is aligned with its (NYSE: MPC) success and incentivized to grow 100% interest 24% LP interest Public* MPLX Preferred MPLX GP LLC MPC owns 24% LP
Slide 32: MPLX - Robust Organic Growth Opportunities
MPLX - Robust Organic Growth Opportunities Forecast organic capital of $1.8 B to $2.0 B for 2017* G&P Segment 7% Utica Sherwood VII placed in service in first quarter 20% 60 MBPD fractionation train at Hopedale placed in service in first quarter Southwest Three additional plants expected to be
Slide 33: MPLX 2017 Forecast
MPLX 2017 Forecast Financial forecast revised in first quarter to reflect dropdown from MPC and acquisitions of the Ozark Pipeline and Bakken Pipeline system – Bakken Pipeline system is accounted for as an equity-method investment – EBITDA and DCF contributions will not be recognized until first d
Slide 34: MPLX - Growth Capital Forecast (2017 Projects)
MPLX - Growth Capital Forecast Projects expected to be completed in 2017 Est. Completion Est. Gathering & Processing Projects Shale Resource Capacity Date Logistics & Storage Projects Completion Date Rich- and Dry-Gas Gathering(a) Marcellus & Utica N/A Ongoing Harpster-to-Lima pipeline and Western O
Slide 35: MPLX - Growth Capital Forecast (2018 Projects)
MPLX - Growth Capital Forecast Projects expected to be completed in 2018 Est. Completion Est. Gathering & Processing Projects Shale Resource Capacity Date Logistics & Storage Projects Completion Date Houston I Processing Plant(a) Marcellus 200 MMcf/d 1Q18 Ozark Pipeline Expansion 2Q18 Sherwood IX Pr
Slide 36: MPLX - Attractive Portfolio of Organic Growth Capital
MPLX - Attractive Portfolio of Organic Growth Capital Logistics & Storage Segment Midwest Pipeline Infrastructure Build-out Industry solution for Marcellus and Utica liquids Mid-2017 estimated completion Ozark Pipeline Expansion Crude sourcing optionality to Midwest refineries Mid-2018 estim
Slide 37: MPLX - Executing a Comprehensive Utica Strategy
MPLX - Executing a Comprehensive Utica Strategy Phased Infrastructure Investment Cornerstone Pipeline commenced operations in October 2016 Hopedale pipeline connection completed December 2016 Expected completion of Harpster-to- Lima pipeline and related expansions in 2Q 2017 Links Marcellus
Slide 38: MPC Assets Expected to be Acquired by MPLX
MPC Assets Expected to be Acquired by MPLX ~$1.4 B of Estimated Annual EBITDA Refinery Fuels Terminals Pipelines Marine Logistics Distribution ● 62 light product; ● Private carrier crude ● Equity in 50/50 blue ● ~55 MMBBL storage ● Fixed service fee per ~24 MMBBL storage; oil and refined product wat
Slide 39: Completed First-quarter Dropdown to MPLX
Completed First-quarter Dropdown to MPLX Terminal, pipeline and storage assets Total consideration of $2.015 B – 62 light product terminals with ~24 million barrels of – $1.511 B in cash and $504 MM in MPLX equity storage capacity – Represents ~8 times EBITDA multiple – 11 pipeline systems consi
Slide 40: Fuels Distribution Business Model
Fuels Distribution Business Model Marketing Model Marketing Model Services Model (Wholesale Distribution) (Rack-to-Retail) – MPC outsources fuels marketing – Purchase MPC’s marketing – Precedents models purchase, services to MPLX for those same businesses market, and transport fuel from services cur
Slide 41: MPLX - Logistics & Storage
MPLX - Logistics & Storage Segment Overview High-quality, well-maintained assets that are integral to MPC – Owns, leases or has interest in ~3,500 miles of crude oil pipelines and ~2,400 miles of product pipelines – 62 light-product terminals with ~24 million barrels of storage capacity – Barge do
Slide 42: MPLX - Recently Announced Pipeline Acquisitions
MPLX - Recently Announced Pipeline Acquisitions Extending the Footprint of the L&S Segment OzarkBakken PipelinePipeline Acquisition – $500 MM investment – ~9.2% equity interest in the Dakota Access Pipeline (DAPL) and the Energy Transfer Crude Oil Pipeline (ETCOP) projects – Expected to deliver ~520
Slide 43: MPLX - Gathering & Processing
MPLX - Gathering & Processing Segment Overview • Ethane Raw Gathering • Propane Processing Mixed Fractionation NGL Natural Gas and • Normal Butane Plants NGLs Facilities Products • Isobutane Production Compression • Natural Gasoline One of the largest NGL and natural gas midstream service provider
Slide 44: Marcellus/Utica Leading U.S. Natural Gas Growth Play
The Marcellus/Utica Resource Play is the Leading U.S. Natural Gas Growth Play 87 35 Marcellus & Utica account for over 25% of Rest of U.S. – Billion Cubic Feet per Day (Bcf/d) Marcellus & Utica Marcellus & Utica – Billion Cubic Feet per Day 83 total U.S. Gas Supply today and are 31 expected to grow
Slide 45: MPLX - Marcellus/Utica Processing Capacity
MPLX - Marcellus/Utica Processing Capacity Building infrastructure to support basin volume growth Currently operate ~66% of processing capacity in Marcellus/Utica Basin 8 ~7.2 Bcf/d processing capacity by end of 2018 2017 expected plant completions 6 Sherwood VII (in service 1Q17) Sherwood VIII 2018
Slide 46: MPLX - Marcellus/Utica Fractionation Capacity
MPLX – Marcellus/Utica Fractionation Capacity Building infrastructure to support growing C2 and C3+ demand Currently operate ~55% of fractionation capacity in Marcellus/Utica Basin 600 ~571 MBPD processing capacity by end of 2018 500 2017 expected plant completions Hopedale III C3+ (in service 1Q17)
Slide 47: MPLX - Strengthens Leading Position in Northeast
MPLX - Strengthens Leading Position in Northeast Recently announced 50/50 joint venture with Antero Midstream Supports Antero Resources’ significant production growth profile in the Marcellus PENNSYLVANIA Shale OHIO – Long-term, fee-based agreement and significant acreage dedication HOPEDALE Com
Slide 48: MPLX - Northeast Operations Well-Positioned in Ethane Market
MPLX - Northeast Operations Well-Positioned in Ethane Market Ethane demand growing as exports and Ohio steam cracker development continues in Pennsylvania Gulf Coast and Northeast Keystone MPLX well-positioned to support producer customers’ rich-gas Harmon Creek development with extensive distri
Slide 49: Major Residue Gas Takeaway Expansion Projects Originate at MPLX Facilities
Major Residue Gas Takeaway Expansion Projects Originate at MPLX Facilities New takeaway pipelines expected to improve Northeast basis differentials MPLX processing complexes: – Access to all major gas residue gas takeaway pipelines – Provide multiple options with significant excess residue capac
Slide 50: MPLX - Marcellus/Utica Overview
MPLX - Marcellus/Utica Overview 2.9 Bcf/d Gathering, 5.7 Bcf/d Processing & 471 MBPD C2+ Fractionation Capacity HOPEDALE FRACTIONATION COMPLEX KEYSTONE COMPLEX PENNSYLVANIA HARMON CREEK COMPLEX (currently under construction) OHIO HOUSTON COMPLEX MarkWest Joint Venture with EMG OHIO CONDENSATE MarkWe
Slide 51: MPLX - Gathering & Processing: Marcellus & Utica Operations
MPLX - Gathering & Processing Marcellus & Utica Operations Processed Volumes Commenced operations of Sherwood VII plant in March 2017, Available Average Utilization which increases the total capacity of Area Capacity Volume (%) (MMcf/d)(a) (MMcf/d) this complex to 1.4 Bcf/d Marcellus 4,199 3,532 8
Slide 52: MPLX - Gathering & Processing: Marcellus & Utica Fractionation
MPLX - Gathering & Processing Marcellus & Utica Fractionation 2017 fractionated volumes Fractionated Volumes expected to increase ~15% Available Average Utilization to ~20% over prior year Area Capacity Volume (%) (MBPD)(a)(b) (MBPD) Commenced third fractionation train at Hopedale complex, incre
Slide 53: MPLX - Considerable Scale in the Southwest
MPLX - Considerable Scale in the Southwest 2.6 Bcf/d Gathering, 1.5 Bcf/d Processing & 29 MBPD C2+ Fractionation Capacity Western Oklahoma Processing Oklahoma Southeast Oklahoma Processing* 425MMcf/d 120MMcf/d Gathering Gathering 585MMcf/d 1,205MMcf/d Permian *Represents 40% of processing capacity t
Slide 54: MPLX - Expanding Southwest Position in High Performance Resource Plays
MPLX - Expanding Southwest Position to Support Growing Production in High Performance Resource Plays Cana-Woodford Permian Hidalgo Complex 200 MMcf/d Eddy Permian Arapaho Complex Basin Blaine Kingfisher Dewey Rich-gas Newfield Argo Complex Delaware pipeline STACK 200 MMcf/d – Early 2018 Basin Roger
Slide 55: MPLX - Gathering & Processing: Southwest Operations
MPLX - Gathering & Processing Southwest Operations Processed Volumes 2017 processed volumes expected to increase ~3% to ~8% over 2016 Available Average Utilization Area Capacity Volume (%) – West Texas (Delaware Basin) (MMcf/d)(a) (MMcf/d) and Western Oklahoma (STACK) West Texas(b) 200 192 96% to
Slide 56: MPLX - Logistics & Storage Contract Structure
MPLX - Logistics & Storage Contract Structure Fee-based assets with minimal commodity 2016 Revenue – Customer Mix exposure(c) 6% MPC has historically accounted for $51 – over 85% of the volumes shipped on MPLX’s 20% MM crude and product pipelines – 100% of the volumes transported via MPLX’s $171
Slide 57: MPLX - Gathering & Processing Contract Structure
MPLX - Gathering & Processing Contract Structure Durable long-term partnerships across leading basins Marcellus Utica Southwest Resource Play Marcellus, Upper Devonian Utica Haynesville, Cotton Valley, Woodford, Anadarko Basin, Granite Wash, Cana-Woodford, Permian, Eagle Ford Producers 14 – includin
Slide 58: MPLX - Commodity Price Sensitivities
MPLX - Commodity Price Sensitivities 95% fee-based net operating margin, 5% commodity exposure for 2017 Maintain active hedging program with ~40% of our 2017 commodity exposure currently hedged Annual 2017 sensitivities to commodity price changes (assumes no hedges): Product Commodity Price Ch
Slide 59: MPLX - Strong Financial Flexibility to Manage and Grow Asset Base
MPLX - Strong Financial Flexibility to Manage and Grow Asset Base Committed to maintaining As of ($MM except ratio data) 3/31/17 investment grade credit profile Cash and cash equivalents 265 $2.25 B senior notes issued Total assets 18,285 1Q 2017 Total debt 6,655 Completed $148 MM of Redeemabl
Slide 60: MPLX - Long-Term Value Objectives
MPLX - Long-Term Value Objectives Deliver Sustainable Distribution Growth rate that provides attractive total unitholder returns Drive Lower Cost of Capital to achieve most efficient mix of growth and yield Develop Backlog of Organic Growth Projects benefiting producer customers and overall en
Slide 61: Speedway Retail Network
Speedway Retail Network 64 237 12 303 113 115 309 487 61 Conn. Del. 1 4 Speedway 147 62 Mass. 114 Largest company-owned 38 278 N.J. 71 and -operated c-store chain 52 R.I. 20 2 east of the Mississippi ~2,730 locations in 21 states 241 As of March. 31, 2017 61
Slide 62: 2017 Speedway Capital Investment Plan
2017 Speedway Capital Investment Plan Planned investments of ~$380 MM – Build new stores and remodel and rebuild existing retail locations in core markets Delivered on goals for acquired locations – Expect to complete remodel plan in 2017 – Planned investments achieved under budget and ahead of
Slide 63: Speedway - Overview of Hess retail acquisition
Speedway Overview of Hess retail acquisition Transaction closed on September 30, 2014 1,245 company operated locations Transport fleet with capacity to transport ~1 billion gal/yr. Pipeline shipper history in various pipelines, including ~40 MBPD on Colonial Pipeline Prime undeveloped real
Slide 64: Speedy Rewards Loyalty Program
Speedy Rewards Loyalty Program ® Highly successful loyalty program Customers earn points on every purchase Customers redeem points for free merchandise and fuel discounts Averaged more than 5.7 million active Speedy Rewards members in 2016, and continues to grow as we attract new members in
Slide 65: Private Label Products
Private Label Products Higher Sales and Margins Better Value Proposition For Consumers Promotes Brand Awareness and Loyalty Differentiation From Competitors 65
Slide 66: Speedway Strong and Consistent Growth
Speedway Strong and Consistent Growth Gasoline and Distillate Sales Volume 8,000 Merchandise Sales/Gross Margin MM Gallons 6,000 30 6,000 6,038 6,094 5,007 4,879 29 4,000 3,942 2,000 3,027 3,146 4,000 28 3,611 Percent 0 3,058 3,135 $MM 27 2012 2013 2014 2015 2016 2,000 26 Gasoline and Distillate Gro
Slide 67: Balance in Refining Network
Balance in Refining Network BPCD NCI Canton (Ohio) 93,000 7.8 Catlettsburg (Ky.) 273,000 9.3 Detroit (Mich.) 132,000 9.9 Midwest Capacity 729,000 BPCD Robinson (Ill.) 231,000 9.8 Galveston Bay (Texas) 459,000 13.0 Texas City (Texas) 86,000 7.8 Garyville (La.) 543,000 11.2 Total 1,817,000 10.7* The N
Slide 68: Key Strengths
Key Strengths Balanced Operations Crude Oil Refining Capacity Crude Slate 67% 60% PADD II Sour Crude 40% PADD III 33% Sweet Crude As of March 31, 2017 1Q 2017 Assured Sales of Gasoline Production (Speedway + Brand + Wholesale Contract Sales) Assured Sales ~70% ~30% Wholesale and Other Sales 1Q 2017
Slide 69: OPEC's Resolve to Reduce Inventory Levels
OPEC’s Resolve to Reduce Inventory Levels Source: EIA Global supply and demand deficit of at least 800,000 bpd in 2H 2017 supportive of higher 2H 2017 crude prices 69
Slide 70: U.S. Macro Picture Remains Solid
U.S. Macro Picture Remains Solid Expect good underlying domestic and export demand for refined products Gasoline Demand (MMBD) Distillate Demand (MMBD) 9.8 4.6 9.6 4.4 9.4 4.2 9.2 4.0 9.0 3.8 8.8 3.6 8.6 8.4 3.4 J F M A M J J A S O N D J F M A M J J A S O N D 2015 2016 2017 2015 2016 2017 Source: EI
Slide 71: Gasoline Exports Enhance Utilization
Gasoline Exports Enhance Utilization U.S. Total Gross Gasoline Exports Gasoline exports have expanded 1100 opportunity set for U.S. refiners 900 2014 MBPD – Summer exports tend to fall as more 700 2015 product is consumed domestically 500 2016 2017 300 U.S. refinery utilization is less subject t
Slide 72: Distillate Leading World Liquids Demand
Distillate Leading World Liquids Demand Average Annual 120 Volumetric Growth (MBPD) Actual Forecast 2015 vs. 2025 Average product 100 demand growth +440 80 of 1.6 MMBD in Other 2016-2017 -125 MMBPD 60 Resid Distillate remains +550 the growth leader 40 Middle Distillate through 2025 20 Global g
Slide 73: Distillate Leads U.S. Domestic Petroleum Fuels Demand
Distillate Leads U.S. Domestic Petroleum Fuels Demand 10 Compounded Annual Gasoline Actual Forecast Growth Rates Distillate expected to lead 9 2016 vs. 2030 U.S. domestic fuels demand 8 Gasoline ex ethanol -0.8% growth 7 -0.8% – Primarily due to growth in 6 freight transportation and MMBPD 5 subst
Slide 74: Galveston Bay-Texas City World-Class Refining Complex
Galveston Bay-Texas City World-Class Refining Complex Galveston Bay and Texas City refineries consolidating operations in mid-2017 Galveston Bay-Texas City BPCD* Crude 585,000 Resid Processing 142,100 Catalytic Cracking/Hydrocracking 258,400 Alkylation 52,800 Aromatics 33,800 *MPC estimates post-STA
Slide 75: ENERGY STAR Program
ENERGY STAR Program ENERGY STAR labels for refining EPA ENERGY STAR History as of 6-15-16 industry began in 2006 Operating Year ---> EPA Certification Year ---> 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 47 labels awarded during
Slide 76: MPLX - Adjusted EBITDA and DCF Reconciliation from Net Income
MPLX - Adjusted EBITDA and Distributable Cash Flow Reconciliation from Net Income ($MM) 4Q 2015(a) 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 (a) Adjusted EBITDA and DCF Reconciliation from Net Income Net income (loss) 42 (14) 72 194 182 187 for 4Q 2015 has not been recast for the 1Q 2017 dropdown Depr
Slide 77: MPLX Reconciliation – 2017 Forecast
MPLX Reconciliation – 2017 Forecast Adjusted EBITDA and Distributable Cash Flow from Net Income ($MM) Low High Net income 550 700 Depreciation and amortization 680 680 Net interest and other financial costs 330 330 Adjustment for equity investment earnings & distributions 100 100 Unrealized derivati
Slide 78: MPC Reconciliation
MPC Reconciliation Adjusted EBITDA to Net Income Attributable to MPC ($MM) 2016 2017 LTM 2Q 3Q 4Q 1Q Net Income attributable to MPC 801 145 227 30 1,203 Less: Net interest and other financial income (costs) (137) (141) (136) (150) (564) Add: Net income (loss) attributable to inco noncontrolling inte
Slide 79: Reconciliation
Reconciliation MPC Adjusted EBITDA Related to MPLX to MPLX Net Income(a) ($MM) 2016 2017 LTM 2Q 3Q 4Q 1Q MPLX Net Income 72 194 182 187 635 Less: Net interest and other financial income (costs) (64) (64) (65) (78) (271) Add: Provision for income taxes (8) - - - (8) Depreciation and amortization 151
Slide 80: Speedway Reconciliation
Speedway Reconciliation Segment EBITDA to Segment Income from Operations ($MM) 2016 Speedway Segment Income from Operations 734 Plus: Depreciation and Amortization 273 Speedway Segment EBITDA 1,007 80
Slide 81: MPC Annual Price and Margin Sensitivities
MPC Annual Price and Margin Sensitivities Refining and Marketing Segment $MM (After Tax) LLS 6-3-2-1 Crack Spread* Sensitivity ~$450 (per $1.00/barrel change) Sweet/Sour Differential** Sensitivity ~$225 (per $1.00/barrel change) LLS-WTI Spread*** Sensitivity ~$80 (per $1.00/barrel change) Natural Ga
Slide 82: MPC's Fully Integrated Downstream System
MPC’s Fully Integrated Downstream System Refining and Marketing Seven-plant refining system with ~1.8 MMBPCD capacity One biodiesel facility and interest in three ethanol facilities One of the largest wholesale suppliers in our market area One of the largest producers of asphalt in the U.S.
Marathon Petroleum — J.P. Morgan 2017 Energy Equity Investor Conference on 6ix