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August 2015 Investor Presentation – MPLX Lp

MPLX Lp · Aug 19, 2015 · 81 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

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  1. August 2015 Investor Presentation – MPLX Lp – slide 1
    Investor Presentation August 2015
  2. August 2015 Investor Presentation – MPLX Lp – slide 2
    Additional Information Additional Information This communication may be deemed to be solicitation material in respect of the proposed transaction. In connection with the proposed transaction, a registration statement on Form S-4 will be…
  3. August 2015 Investor Presentation – MPLX Lp – slide 3
    Key Investment Highlights Announced transformative combination with MarkWest Energy Partners, L.P. Affirmed anticipated distribution growth of 29 percent in 2015, expects 25 percent compound annual LP distribution growth for combined…
  4. August 2015 Investor Presentation – MPLX Lp – slide 4
    Substantial Acceleration of MPLX Acquired additional 30.5 percent interest in MPLX Pipe Line Holdings on December 1, 2014 for 800 MM (represents 10.0x multiple of NTM EBITDA) Announced MPLX/MarkWest combination creates a very…
  5. August 2015 Investor Presentation – MPLX Lp – slide 5
    Strategic Relationship with Sponsor Marathon Petroleum Fortune 25 company Investment grade credit profile Fourth largest U.S. refiner Largest in Midwest 2014 Revenues and other income: 98.1 B 2014 Net income attributable to MPC:…
  6. August 2015 Investor Presentation – MPLX Lp – slide 6
    MPCs Focused and Integrated Network Refineries Biodiesel/Ethanol Facilities Marketing Area MPC Refineries Light Product Terminals MPC owned and Part-owned Terminals Pipelines Third Party Asphalt/Heavy Oil Terminals MPC…
  7. August 2015 Investor Presentation – MPLX Lp – slide 7
    MPCs Currently Identified Eligible MLP EBITDA Sources of 1.6 B Retained by MPC 5,400 miles of additional crude and products pipelines Owns, leases or has an ownership interest in these pipelines Pipelines 0.5% of MPLX Pipe Line…
  8. August 2015 Investor Presentation – MPLX Lp – slide 8
    MPC Drop-down Strategy Considerations Committed to significant acceleration of MPLXs annual LP distribution growth rate Affirmed anticipated distribution growth of 29 percent in 2015, expects 25 percent compound annual LP…
  9. August 2015 Investor Presentation – MPLX Lp – slide 9
    MPC and MPLX Strategically Located Assets Strategically located near emerging Bakken Williston shale plays Basin Marcellus, Utica, New Albany, Antrim, Appalachian Basin Michigan Antrim and Illinois Basin in Pennsylvania,…
  10. August 2015 Investor Presentation – MPLX Lp – slide 10
    MPLX Assets are Integral to MPC 11
  11. August 2015 Investor Presentation – MPLX Lp – slide 11
    Other Major MPLX Assets Pipeline Tank Farm Storage Assets Both crude oil and products located in Patoka, Wood River and Martinsville, IL and Lebanon, IN Approximately 3.3 MM barrels of available capacity Wood River, IL Barge Dock…
  12. August 2015 Investor Presentation – MPLX Lp – slide 12
    High-quality, Well-maintained Asset Base Certifications, Initiatives and Industry Partnerships MPLX continually invests in the maintenance and integrity of its assets Uses a patented integrity management program to enhance…
  13. August 2015 Investor Presentation – MPLX Lp – slide 13
    Significant Capital Plan 2015 Capital Plan 260 MM Major growth projects Maintenance 38 MM Cornerstone Pipeline and Utica build-out Patoka to Lima capacity expansion Robinson butane cavern Maintenance capital 16% of 2014…
  14. August 2015 Investor Presentation – MPLX Lp – slide 14
    Stable and Predictable Cash Flows MPLXs assets consist of fee-based 2014 Revenue Customer Mix pipeline systems and storage assets 9% 48 Minimal commodity exposurec 20% MM 112 MPC has historically accounted for over MM 85% of the…
  15. August 2015 Investor Presentation – MPLX Lp – slide 15
    MPC Investing in Significant Growth Projects North Dakota System (Sandpiper) Logistics equity investment MPC Length, size: 610 Mile, 24/30 + North Dakota Classic System and Bakken Pipeline U.S. Capacity: 580 MBD In-Service: 2017…
  16. August 2015 Investor Presentation – MPLX Lp – slide 16
    MPC Investing in Significant Growth Projects Southern Access Extension (SAX) Logistics equity investment MPC Length, size: 165 Mile, 24 Capacity: 300 MBD In-Service: Late 2015 est. MPC Investment: 305 MM Canadian MPC Equity: 35%…
  17. August 2015 Investor Presentation – MPLX Lp – slide 17
    MPLX/MPC Utica Build-Out Connectivity 18
  18. August 2015 Investor Presentation – MPLX Lp – slide 18
    MPLX Developing a Comprehensive Utica System Cornerstone Pipeline and Additional Opportunities Industry solution, 16-inch pipeline connecting Utica Shale region to East Sparta, Ohio, tank farm 250 MM capital investment Includes…
  19. August 2015 Investor Presentation – MPLX Lp – slide 19
    MPLX Strong Financial Flexibility to Manage and Grow Asset Base As of (MM except ratio data) 6/30/15 Cash and cash equivalents 130.4 Total assets 1,382.6 Long-term debt(a) 753.4 Total equity 492.4 Consolidated total debt to…
  20. August 2015 Investor Presentation – MPLX Lp – slide 20
    Distribution Growth per Unit IPO 1st acquisition 2nd acquisition 3rd acquisition 10/31/12 5/1/13 100 MM 3/1/14 310 MM 12/1/14 800 MM 0.46 23.0% CAGR over MQD 0.44 0.42 0.40 0.38 0.36 /Unit 0.34 0.32 0.4400 0.30…
  21. August 2015 Investor Presentation – MPLX Lp – slide 21
    Our Priorities for Investors Maintain Safe and Reliable Operations 90 Sustain Long-term LP 80 Unit Price Distribution Growth; 29% in 2019, 25% CAGR through 2017, 70 and approximately 20% in 2018 60 and 2019 50 Focus on…
  22. August 2015 Investor Presentation – MPLX Lp – slide 22
    Appendix 23
  23. August 2015 Investor Presentation – MPLX Lp – slide 23
    Financial Performance Attributable to MPLX Adjusted EBITDA 70.7 70 64.2 60 50 43.8 39.9 40.2 42.4 40 MM 30.5 28.9 30 25.1 26.7 20 18.2 10 0 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Distributable Cash…
  24. August 2015 Investor Presentation – MPLX Lp – slide 24
    Net Income 2Q 2015 vs. 2Q 2014 Variance Analysis 4.0 60 13.0 0.7 (2.0) (1.1) 51.4 51.2 50 (4.9) (1.2) (0.2) 42.9 40 MM 30 20 10 0 2Q 201 4 Transportation Other Cost of G&A Other taxe s Inte rest and Other 2Q 201 5…
  25. August 2015 Investor Presentation – MPLX Lp – slide 25
    Deficiency Payment Effect Example For illustrative purposes only Quarter Quarter Quarter Quarter Quarter Quarter Quarter (MM) 1 2 3 4 5 6 7 Quarterly deficiency payment 2 5 3 5 - - - Use or expiration of credit - - - - 2 5 3…
  26. August 2015 Investor Presentation – MPLX Lp – slide 26
    MPLX and MPC are Aligned MPLX Organizational Structure Marathon Petroleum MPC views MPLX as integral to its Corporation and Affiliates (NYSE: MPC) operations and is aligned with its success and incentivized to grow MPLX 100.0%…
  27. August 2015 Investor Presentation – MPLX Lp – slide 27
    Incentive Distribution Rights 2Q 2015 distribution of 0.4400/unit is in top tier of IDRs 28
  28. August 2015 Investor Presentation – MPLX Lp – slide 28
    Crude Oil Pipeline Systems Overview MPC Min. Diameter Length Capacity Initial Term Commitment Crude Oil Pipeline System (Inches) (Miles) (MBPD)a (Years) (MBPD) Patoka to Lima 20 / 22 302 249 10 40 Catlettsburg and Robinson 20 / 24…
  29. August 2015 Investor Presentation – MPLX Lp – slide 29
    Crude Oil Pipeline Systems Overview 30
  30. August 2015 Investor Presentation – MPLX Lp – slide 30
    Patoka to Lima Crude System 76 miles of 20-inch pipeline extending from Patoka, IL to Martinsville, IL 226 miles of 22-inch pipeline extending from Martinsville to Lima, OH Includes related breakout tankage at Martinsville From…
  31. August 2015 Investor Presentation – MPLX Lp – slide 31
    Catlettsburg and Robinson Crude System Primary pipelines supplying crude oil for MPC's Catlettsburg, KY and Robinson, IL refineries Patoka to Catlettsburg System 140 miles of 20-inch pipeline from Patoka to Owensboro, KY 266 miles…
  32. August 2015 Investor Presentation – MPLX Lp – slide 32
    Detroit Crude System Samaria to Detroit 44 miles of 16-inch pipeline extending from Samaria, MI to MPC's Detroit refinery System includes a tank farm and crude oil truck offloading facility located in Samaria Current capacity of…
  33. August 2015 Investor Presentation – MPLX Lp – slide 33
    Wood River to Patoka Crude System Wood River to Patoka System 57 miles of 22-inch pipeline extending from Wood River, IL to Patoka Current capacity of 215 MBPD Roxanna to Patoka System 58 miles of 12-inch pipeline extending from…
  34. August 2015 Investor Presentation – MPLX Lp – slide 34
    Midwest Product Pipelines Overview 35
  35. August 2015 Investor Presentation – MPLX Lp – slide 35
    Gulf Coast Product Pipelines Overview 36
  36. August 2015 Investor Presentation – MPLX Lp – slide 36
    Product Pipeline Systems Overview MPC Min. Diameter Length Capacity Initial Term Commitment Product Pipeline System (Inches) (Miles) (MBPD) (Years) (MBPD) Garyville to Zachary 20 70 389 10 300 Zachary Connect 36 2 -NA- a 10 80…
  37. August 2015 Investor Presentation – MPLX Lp – slide 37
    Garyville Products System Primary pathway for the distribution of refined products from the Garyville, LA refinery Garyville to Zachary 70 miles of 20-inch pipeline extending from MPC's Garyville refinery to either the Plantation…
  38. August 2015 Investor Presentation – MPLX Lp – slide 38
    Texas City Products System Primary pathway for the distribution of refined products from MPC's Texas City refinery Texas City to Pasadena 39 miles of 16-inch pipeline extending from refineries owned by MPC and third parties in…
  39. August 2015 Investor Presentation – MPLX Lp – slide 39
    Ohio River Pipe Line (ORPL) Products Systems System of single and bi-directional pipelines that connect MPC's Canton and Catlettsburg refineries with MPC and third-party terminals Current combined capacity of 244 MBPD MPC minimum…
  40. August 2015 Investor Presentation – MPLX Lp – slide 40
    Robinson Products System 1,171 miles of owned/leased pipelines connecting MPC's Robinson and third-party refineries and terminals in IL, KY and IN Current combined capacity of 548 MBPD Initial MPC minimum throughput commitment…
  41. August 2015 Investor Presentation – MPLX Lp – slide 41
    Other Major MPLX Assets MPC's commitments account for total annual revenue of 34 MM from these Other major assets Neal, W.Va., Butane Storage Cavern Capacity of 1 MMBBL with an initial 10-year term Connected to MPCs Catlettsburg,…
  42. August 2015 Investor Presentation – MPLX Lp – slide 42
    Capital Expenditures & Investments (MM) MPC 2015 Budget 2Q 2015 YTD Refining & Marketing 1,042 160 335 Midstream 234 47 101 Total Refining & Marketing Segment 1,276 207 436 Speedway 452 100 145 Pipeline Transportation* 659 157…
  43. August 2015 Investor Presentation – MPLX Lp – slide 43
    MPCs Fully Integrated Downstream System Refining and Marketing Seven-plant refining system with 1.7 MMBPCD capacity One biodiesel facility and interest in three ethanol facilities One of the largest wholesale suppliers in our market…
  44. August 2015 Investor Presentation – MPLX Lp – slide 44
    MPC 2015 Value Drivers Top-tier safety and environmental performance Accelerate growth of Midstream/MPLX Announced MPLX/MWE merger Capital return to shareholders Strong and growing dividend Share repurchase program Speedway Hess…
  45. August 2015 Investor Presentation – MPLX Lp – slide 45
    MPC Focused Return of Capital to Shareholders LTM Ended 6/30/15 8,000 7,000 6,000 2,772 Hess Retail Acquisition 5,000 Dividends and share Dividends and share repurchases 1.8x of repurchases* MM Adj. Free Cash Flow***…
  46. August 2015 Investor Presentation – MPLX Lp – slide 46
    MPC Delivering Consistent Return of Capital Twelve months ended June 30, 2015 14.0% 12.0% 11.9% 10.0% 8.9% 8.2% 6.4% 7.8% 8.0% 6.8% 6.0% 6.5% 6.1% 6.0% 4.1% 4.0% 2.4% 2.0% 3.1% 2.7% 2.1% 2.4% 1.8% 0.0% MPC HFC…
  47. August 2015 Investor Presentation – MPLX Lp – slide 47
    MPC Performing Consistently in the Top Tier Engine behind MPCs focus on capital returns Operating Income Per Barrel of Crude Throughput ** 20 MPCs Rank 15 Competitor Range 1 2 10 2 /BBL 2 5 1 2 3 5 1 3 2 7 3 3 1 3 3…
  48. August 2015 Investor Presentation – MPLX Lp – slide 48
    MPC Allocating Capital to Higher Valued Businesses 2012 2015 Capital Investment Profile 3,000 2,500 2,000 MM 1,500 1,000 500 0 2012 2013 2014 2015E Refining & Marketing, excluding Midstream Midstream Pipeline…
  49. August 2015 Investor Presentation – MPLX Lp – slide 49
    Growing Global Product Demand Com pounded Annual 120 Grow th Rates 2030 vs. 2014 Actual Forecast 100 +1.2% Other Distillate and gasoline Other demand continues to rise 80 -1.0% Fuel Oil Fuel Oil Fuel oil continues 60 to…
  50. August 2015 Investor Presentation – MPLX Lp – slide 50
    U.S. Refined Product Demand Com pounded Annual Grow th Rates 10 2020 vs. 2014 Actual Forecast 9 Gasoline -0.3% Distillate demand 8 -0.5% growth outpaces other Gasoline ex ethanol 7 products 6 Gasoline will be constrained by…
  51. August 2015 Investor Presentation – MPLX Lp – slide 51
    MPC Capitalizing on Global Growth in Diesel Demand Distillate Production 700 600 Garyville +35 MBD ULSD in 2014-16 MBD 500 232 MM investment 400 45% ROI 300 Galveston Bay +9 MBD ULSD in 2015 2012 2013 2014 2015E 2016E…
  52. August 2015 Investor Presentation – MPLX Lp – slide 52
    Forward Curves WTI Brent-WTI Brent 100 8 110 90 100 7 90 80 6 80 /BBL 70 /BBL /BBL 5 70 60 60 50 4 50 40 3 40 Prompt 3Q16 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 4Q16 1Q17 2Q17 3Q17…
  53. August 2015 Investor Presentation – MPLX Lp – slide 53
    Sustaining U.S. Refining Advantage 20 18 16 14 12 /MMBtu 10 8 6 4 2 0 Henry Hub (NYMEX prompt price) European Natural Gas (Avg Import Border Price)* Japanese Liquefied Natural Gas (Import Price)* USGC 6 Fuel Oil-1%…
  54. August 2015 Investor Presentation – MPLX Lp – slide 54
    U.S. Gross Refined Product Exports Increasing 4.0 3.5 Gasolines Kero-Jet 3.0 Diesels 2.5 Propane/Propylene MMBD Gross Product Exports 2.0 1.5 1.0 0.5 0.0 Source: U.S. Energy Information Administration 55
  55. August 2015 Investor Presentation – MPLX Lp – slide 55
    MPC Growing Gulf Coast Export Capabilities Export investments totaling 120 MM 600 Export Capacity Added new 500,000 barrel export tank 510 at Garyville in 2013 500 Galveston Bay in 2015 400 395 +30 MBD ULSD 345 320 40% ROI…
  56. August 2015 Investor Presentation – MPLX Lp – slide 56
    Rising MPC Finished Product Exports 350 300 250 200 MBD 150 100 50 0 2010 2011 2012 2013 2014 1H 2015 57
  57. August 2015 Investor Presentation – MPLX Lp – slide 57
    Rising North American Crude & NGLs Production 25 2015 Actual Forecast 20 Canada 15 MMBD 10 U.S. 5 0 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 Sources: EIA, CAPP, MPC 58
  58. August 2015 Investor Presentation – MPLX Lp – slide 58
    Growing Crude Oil Supply 1,800 5,000 150 2014 2014 Ohio 2014 North Dakota Texas 1,500 4,000 125 1,200 100 3,000 MBD MBD MBD 900 75 2,000 600 50 300 1,000 25 Actual Forecast Actual Forecast Actual Forecast 0 0 0…
  59. August 2015 Investor Presentation – MPLX Lp – slide 59
    Refining Capacity in Advantaged Regions 100% in PADDs II and III 100% Canadian Bakken Utica 80% PADD IV 60% PADD II PADD V 40% PADD I 20% PADD III 0% MPC VLO HFC PSX TSO Permian Basin Eagle Ford PADD II PADD III PADD I…
  60. August 2015 Investor Presentation – MPLX Lp – slide 60
    Compelling Advantage for Pipeline and Marine All costs shown as /BBL Pipeline costs exclude any storage or transfer fees and line loss Sources: MPC, publicly available information 61
  61. August 2015 Investor Presentation – MPLX Lp – slide 61
    MPC Creating Crude/Condensate Advantage Source: MPC 62
  62. August 2015 Investor Presentation – MPLX Lp – slide 62
    U.S./Canada Key Existing and Planned Pipelines In Service MBPD Pipeline Date 300 Line 9 Reversal 2015 300 SAX 2015 200 Diamond 2016 450 Dakota Access 2016 ETCO 2016 450 (Trunkline Conversion) 225-375 Sandpiper 2017 Trans…
  63. August 2015 Investor Presentation – MPLX Lp – slide 63
    MPC Balance in Refining Network Canton (Ohio) 90,000 Catlettsburg (Ky.) 242,000 Detroit (Mich.) 130,000 Midwest Capacity 674,000 BPCD Robinson (Ill.) 212,000 Galveston Bay 451,000 (Texas) Texas City (Texas) 84,000 Texas…
  64. August 2015 Investor Presentation – MPLX Lp – slide 64
    MPC Key Strengths Balanced Operations Crude Oil Refining Capacity Crude Slate 61% PADD II 55% Sour Crude 45% 39% PADD III Sweet Crude As of June 30, 2015 2Q 2015 Assured Sales of Gasoline Production (Speedway + Brand +…
  65. August 2015 Investor Presentation – MPLX Lp – slide 65
    MPC Increasing Light Sweet Crude and Condensate Capacity Condensate splitters Condensate Processing Opportunity Canton: 25 MBD Completed 4Q 2014 Light Naphtha to Gasoline Blending Ultra-Sweet New Catlettsburg: 35 MBD Condensate…
  66. August 2015 Investor Presentation – MPLX Lp – slide 66
    MPC Leveraging Existing Capacity to Run Light Sweet Crude 30 Reforming Capacity % of Crude Capacity 45% sweet crude oil throughput in 25 2Q 2015 versus 68% sweet crude oil 20 Industry capacity Average 15 Reformer capacity…
  67. August 2015 Investor Presentation – MPLX Lp – slide 67
    Galveston Bay Driving Value Integration with Texas City refinery Revamp crude and vacuum units Optimize for future crude availability Improve distillate recovery Add hydrotreating capacity Move to 100% ULSD Idle the smallest…
  68. August 2015 Investor Presentation – MPLX Lp – slide 68
    Speedway Value Total Gross Margin Mix 2011-2014 Average Top-tier performance in the convenience store industry Scalable technology and Light Product organizational infrastructure 37% Disciplined expense control Merchandise…
  69. August 2015 Investor Presentation – MPLX Lp – slide 69
    MPC Acquisition of Hess Retail Transaction Overview Hess retail acquisition included: 1,245 company operated locations Transport fleet with capacity to transport 1 B gal/yr. Pipeline shipper history in various pipelines, including…
  70. August 2015 Investor Presentation – MPLX Lp – slide 70
    Conversion Plans for Former Hess Stores 2014-2017 Conversion to Speedway: 181 MM Remodel Capital: 240 MM 500 Stores by Dec. 2015 495 Stores by Dec. 2016 250 Stores by March 2015 71
  71. August 2015 Investor Presentation – MPLX Lp – slide 71
    Transformative Transaction for MPC and Speedway Accelerates strategy to grow higher valued and stable cash-flow businesses Provides larger integrated platform for growth in new markets Meaningfully expands scale and provides…
  72. August 2015 Investor Presentation – MPLX Lp – slide 72
    Enhances Strategic Value for MPCs Integrated System Refined Product Placement Opportunities Incremental 200 MBPD of refined products placement capacity, increases assured gasoline sales Incremental supply of MPC Gulf Coast refined…
  73. August 2015 Investor Presentation – MPLX Lp – slide 73
    Synergies and Marketing Enhancements Will Drive Value for MPC 400 Earnings Opportunities 70 300 45 40 MM 200 35 365 100 Operating and G&A expense 175 synergies of 75 MM 0 2013 Pro Forma Hess EBITDA* Form 10…
  74. August 2015 Investor Presentation – MPLX Lp – slide 74
    Focus on Improving Light Product Breakeven 13 12.39 11 Each 1.00 cent per gallon improvement Light Product Breakeven (cpg) 9 = 30 MM annual pretax earnings Total Expenses LPBE = Merchandise Margin 7 7.13 Light…
  75. August 2015 Investor Presentation – MPLX Lp – slide 75
    Speedway and Hess Side-by-Side Comparison Hessa Speedwayb Company Operated Sites 1,255 1,478 Speedway generates an Fuel Sales incremental 17,300 of (gallons/store/month) 198,500 177,400 merchandise margin per Fuel Margin…
  76. August 2015 Investor Presentation – MPLX Lp – slide 76
    MPC Annual Price and Margin Sensitivities MM (After Tax) LLS 6-3-2-1 Crack Spread* Sensitivity 450 (per 1.00/barrel change) Sweet/Sour Differential** Sensitivity 200 (per 1.00/barrel change) LLS-WTI Spread*** Sensitivity 100…
  77. August 2015 Investor Presentation – MPLX Lp – slide 77
    MPLX Adjusted EBITDA and Distributable Cash Flow Reconciliation from Net Income (MM) 4Q 2012* 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 Net i ncome 26.3 35.3 34.8 39.2 36.8 55.7 42.9 43.1 36.4…
  78. August 2015 Investor Presentation – MPLX Lp – slide 78
    MPC EBITDA Reconciliation to Net Income Attributable to MPC 2007 2008 2009 2010 2011 2012 2013 2014 2015 (MM) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Net income attributable to MPC 2,262 1,215 449 623 2,389 3,389 725 593 168 626 199 855 672…
  79. August 2015 Investor Presentation – MPLX Lp – slide 79
    Reconciliation MPC Adjusted Free Cash Flow to Net Cash Provided by Operations (MM) 2014 2015 LTM (For the Quarter) 3Q 4Q 1Q 2Q Net cash provided by operating activities 1,078 388 1,190 994 3,650 Additions to property, plant and…
  80. August 2015 Investor Presentation – MPLX Lp – slide 80
    EBITDA Reconciliation to Net Income for Hess (MM) 2013* 2017E Net Income 47 138 Less: Net interest and other financial income (costs) (12) - Add: Provision for income taxes 22 78 Add: Depreciation and amortization 94 149…
  81. August 2015 Investor Presentation – MPLX Lp – slide 81
    82

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