Barclays CEO Energy Power Conference Gary R. Heminger Chairman, President and Chief Executive Officer September 6, 2016
Delivering for Investors Scale, Diversity and Stability of Cash Flow Since Spin: Provided Significant Returns to Our Shareholders Increased our refining capacity in the geographically critical U.S. Gulf Coast region Returned 10…
Creating a More Diversified Portfolio 2Q 2016 LTM EBITDA Speedway 18% 2011 EBITDA Midstream(a) 43% Midstream R&M(b) Speedway 16% 5% 8% 23% R&M MLP-Eligible(c) 87% R&M (a)Includes MarkWest EBITDA post merger Dec 4, 2015…
Balanced Approach to Returning Capital and Investment since July 2011 Investing in the Capital Strategic investments providing long-term stable Business* Return cash flows 7.4 B returned to shareholders through repurchases, 9.9 B…
Positive Market Fundamentals PADD 2 and 3 Gasoline Days of Supply 35 (Including Exports) Gasoline and distillate inventories normalized 33 on a days of supply basis 31 Gasoline demand continues to be strong Days 29 27…
Positive Market Fundamentals Contd. Continued strong U.S. refined product exports U.S. refineries have cost advantages and are more complex Heavy and sour crude oil differentials remain favorable Crude differentials expected to…
Refining & Marketing Segment Transformation Galveston Bay Refinery Light Crude MPC spinoff DHOUP acquisition from BP Processing from Marathon Oil Corp. (Detroit Heavy Oil Condensate Splitter Investments Robinson Refinery Upgrade…
MPC vs. Peers - Operating Income per Barrel Operating Income Per Barrel of Crude Throughput* 20 MPCs Rank 15 Competitor Range 1 2 10 2 5 1 /BBL 3 6 5 1 3 2 4 2 7 3 3 3 1 3 2 0 -5 1998 1999 2000 2001 2002 2003 2004…
Operational Highlights 11
Galveston Bay Refinery Performance Improvements Since Acquisition Lowered operating costs 15% since 2014 Lowered routine maintenance costs 26% since 2014 due to improved reliability and cost efficiencies Target to lower operating…
Optimization of South Texas Asset Repositioning (STAR) Program Potential reduction of total planned investment from 2 B to 1.5 B Project scope and investment return profile substantially preserved Project scope: Increase residual…
Enhancing Refining Margins Planned Investments of 475 MM Contributing 250 MM EBITDA Garyville FCC/Alky 220 MM investment, 90 MM EBITDA per year 25% IRR, late 2016 est. completion 600 Export Capacity Galveston Bay export capacity…
Speedway Segment Transformation MPC spinoff Hess Retail Travel Plaza JV Acquisitions: Expansion into from Marathon Oil Corp. acquisition announced Gas City, Road Ranger, new markets: GasAmerica Pennsylvania and Tennessee 2011…
Speedway Exceeding Expected Acquisition-Related Synergies Continuing to focus on marketing enhancements opportunities Completed 93 remodels in 2Q 2016, 454 to date at acquired locations Reduced overall light product breakeven by 10%…
Speedway - Top tier Performer in Convenience Store Industry Generates predictable, stable cash flows 1 in EBITDA/store/month vs. public peers 40 EBITDA M/Store/Month 30 20 10 0 Speedway Sunoco Casey's CST Couche-Tard…
Speedway Complements MPCs Integrated Network 6 B gallons of light product volumes annually MPCs most ratable distribution channel Allows for optimization of refining, pipeline and terminal EBITDA operations 1,200 Supports…
Midstream Segment Transformation Bakken Initial Public Offering MarkWest MPC spinoff Pipeline System of MPLX LP Cornerstone Pipeline merger from Marathon Oil Corp. investment announcement* organic growth project 2011 2012 2013…
Equity Participation in Bakken Pipeline System Announced agreement to participate in the Dakota Access Pipeline (DAPL) and the Energy Transfer Crude Oil Pipeline (ETCOP) projects, collectively referred to as the Bakken Pipeline…
MPLX Creates Significant Value and Provides Stable Cash Flows Growth-oriented, diversified MLP with high- Midstream Segment EBITDA* quality strategically located assets with 1,400 leading midstream position 1,304 1,200 Robust…
MPLX - Focus on Solutions to Enhance Northeast NGL Market Lead the development of infrastructure to link supply of Northeast NGLs with demand markets and enhance value for producer customers Largest fully integrated de-ethanization…
MPCs Substantial MLP-Qualifying Asset Portfolio 1.4 B of estimated annual EBITDA Pipelines 5,400 miles of additional pipelines (owns, leases or has an ownership interest) Marine Equity in 50/50 blue water JV with Crowley 61…
2016 Capital Outlook 1.2 B Reduction from Initial Budget Speedway Corporate 2016 Capital Outlook 3.0 B* & Other 3% MPC 1.9 B 10% Refining & Marketing, excluding Refining Midstream 1,045 MM MPLX Sustaining 23% Capital Midstream**…
Our Priorities for Value Creation Maintain Balance Top Tier Capital Returns Safety and with Environmental Value-enhancing Performance Investments Grow Enhance Higher Margins for Valued and Stable Our Refinery Cash-flow…
MPCs Strong Liquidity and Capitalization Committed to maintaining Liquidity and Capitalization investment grade credit profile As of June 30, 2016 MPC, MPC MPLX Excl. for both MPC and MPLX (MM except ratio data) Consolidated…
MPCs Proven Track Record Galveston Bay Acquisition + Hess Retail Acquisition + MarkWest Merger + Repurchased 28% of Outstanding Shares + 260% Increase in Dividend = of Current Market Cap Returned 45% and Grew Scale,…
Appendix
Fundamentals of MPCs Business Strategically located assets and fully integrated system provides optionality and flexibility Gasoline demand continues to be strong 70 percent assured sales of gasoline production U.S. refiners have…
Returning Capital to Shareholders Through Share Repurchases 8,000 Cumulative Share Repurchases Since July 2011 10 B share 6,000 repurchases authorized 7.36 B returned to shareholders through MM 4,000 repurchases 2,000 28%…
Refining Increasing EBITDA Through Continuous Process Improvements Low or no investment projects Refining Process Improvements* 1,000 Focus on technical excellence 800 Margin Improvement Improvements in process unit 600…
Galveston Bay Process Improvements and Synergies* EBITDA Improvement Process improvements 700 Unit optimization 600 Improved unit yields Bottlenecks removed 500 Catalyst changes 400 MM 300 Synergy capture Crude…
Key Strengths Balanced Operations Crude Oil Refining Capacity Crude Slate PADD II 61% 60% Sour Crude 40% PADD III Sweet Crude 39% As of June 30, 2016 2Q 2016 Assured Sales of Gasoline Production (Speedway + Brand +…
Balance in Refining Network BPCD NCI Canton (Ohio) 93,000 7.8 Catlettsburg (Ky.) 273,000 9.2 Detroit (Mich.) 132,000 9.7 Midwest Capacity 710,000 BPCD Robinson (Ill.) 212,000 10.5 Galveston Bay (Texas) 459,000 13.5 Texas City…
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…
Distillate Leading World Liquids Demand Average Annual 120 Volumetric Growth (MBD) Actual Forecast 2015 vs. 2025 Average product 100 demand growth +445 80 of 1.6 MMBD in Other 2016-2017 -19 MMBD 60 Resid Distillate…
Distillate Leads U.S. Domestic Petroleum Fuels Demand Compounded 10 Annual Actual Forecast Growth Rates 9 Gasoline 2015 vs. 2030 Gasoline demand 8 -1.1% declines due to corporate Gasoline ex ethanol 7 -1.1% average fuel…
U.S. Refiners have a Sustained Export Advantage Low cost natural gas Large, complex refineries 2015 Region Utilization Access to lower cost feedstocks Rate High utilization rates North America 88% Sophisticated workforce MPC 99%…
Peer-leading Alkylation and Reforming Capacity Octane Capacity Lighter crude runs HFC 85 30 32 (31%) Reforming produce more light BP 135 45 33 (30%) Isomerization naphtha, increasing Alkylation ( ) % of Crude Capacity demand for…
North American Crude Production 16 Actual Forecast 14 Shale production challenged in 12 current price environment Canada 10 Drilling improvements and efficiency gains have lessened MMBD 8 U.S. Shale near-term declines 6…
U.S. Natural Gas Production Growth Largely from Shale 20 Actual Forecast 18 U.S. natural gas supply 16 to grow by 5.4 MMBOED (29 BCFD) by 2030 14 2015 production was 12 MMBOED 13.8 MBOED (74.5 BCFD) 10 Shale Gas Lower…
U.S. NGL Volume Growth Creates a Need for Incremental Infrastructure 7 Gulf Coast ethylene Actual Forecast crackers are being built, 6 adding 700 MBD to demand for ethane by 2021 5 Realized ethane production Purity Ethane…
Key North American Crude Oil Pipelines In-Service Planned Pipelines MBPD Date Grand Mesa 130 2016 Saddlehorn 190 2016 Dakota Access 570 2016 ETCO 570 2016 Bayou Bridge (Lake Charles to St. James) TBD* 2017 Diamond 200…
Speedway: Pursuing Attractive and Accretive Acquisitions Leverage MPCs supply and logistical network Increase assured sales Optimize terminal utilization Fill market voids in Speedway footprint High quality assets Continue focus…
Capitalizing on Diesel Demand Growth Trucking remains a dominant mode of transportation U.S. freight volumes expected to increase by 29% Diesel demand growth expected to outpace gasoline Build out commercial fueling lane network…
Following Through on Goals for Acquired Locations Earnings Opportunities (Original Guidance) Invest 570 MM in conversions, 400 70 remodels and maintenance 300 45 40 MM 200 35 Converted stores to Speedway brand 365 100 and…
Focus on Improving Light Product Breakeven 13 12.39 11 Each 1.00 cent per gallon improvement = 30 MM annual Light Product Breakeven (cpg) 9 pretax earnings Total Expenses 7 7.13 LPBE = Merchandise Margin Light Product…
Speedway and Hess Side-by-Side Comparison Hess(a) Speedway(b) Company Operated Sites 1,255 1,478 Fuel Sales Speedway generates an incremental 198,500 177,400 (gallons/store/month) 17,300 of merchandise margin per Fuel Margin…
Top Tier Performance 300 Light Product Volume M Gal/Store/Month 200 100 0 Murphy USA Speedway CST Sunoco Couche-Tard Delek Western Casey's Alon USA Refining 200 Merchandise Sales M/Store/Month 150 100 50 0 Murphy…
About MPLX Growth-oriented, diversified MLP with high-quality, strategically located assets with leading midstream position Two primary businesses Logistics & Storage includes transportation and storage of crude oil, refined…
MPLX Key Investment Highlights High standard for safety and environmental stewardship Premier assets in highly productive resource plays Long-term integrated relationships with our producer customers Strategic relationship with MPC…
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…
MPLX Logistics & Storage High-quality, well-maintained assets that are integral to MPC 1,008 miles of common carrier crude oil pipelines 1,900 miles of common carrier product pipelines Barge dock with approximately 78,000 BPD…
MPLX - Attractive Portfolio of Organic Growth Capital Logistics & Storage Segment Cornerstone and Utica Build-out Industry solution for Utica liquids Pipeline and Tank Farm Expansions MPC and third-party logistics solutions…
Executing a Comprehensive Utica Strategy Links Marcellus and Utica condensate and natural gasoline with Midwest refiners Allows diluent movements to Canada Leverages existing MPC/MPLX pipelines and right of way Phased…
MPLX - Logistics & Storage Contract Structure Fee-based assets with minimal commodity 2015 Revenue Customer Mix exposure(c) 8% MPC has historically accounted for 47 over 85% of the volumes shipped on MPLXs MM crude and product…
MPLX Gathering & Processing 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…
MPLX - Gathering & Processing Growth Projects HOPEDALE FRACTIONATION COMPLEX MarkWest Joint Venture with EMG KEYSTONE COMPLEX C3+ Fractionation I & II 120,000 Bbl/d Operational PENNSYLVANIA Bluestone I III & Sarsen I 410 MMcf/d…
MPLX Northeast Operations Well-Positioned in Ethane Market Ethane demand growing as exports Ohio and steam cracker development Pennsylvania continues in Gulf Coast and Northeast Keystone MPLX well-positioned to support producer…
Northeast Infrastructure Opportunities 1 NGL/Light Products EAST COAST BLENDING to East Coast 1 TERMINALS - Large-scale East Coast LPG export terminal 3 - Rail/pipeline to East Coast export terminal Northeast - Optionality and…
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,…
MPLX - Gathering & Processing Marcellus & Utica Operations Processed Volumes Processed volumes averaged over Available Average 4.1 Bcf/d in 2Q 2016 Area Capacity Volume Utilization (%) (MMcf/d)(a) (MMcf/d) Commenced operations of…
MPLX Gathering & Processing Marcellus & Utica Fractionation Commenced operations of 10 MBb/d de-ethanization facility at Fractionated Volumes Mobley Complex in April Available Average Utilization Production of purity ethane in Area…
The Marcellus/Utica Resource Play is the Leading U.S. Natural Gas Growth Play 65 Marcellus & Utica account for over 28 Marcellus & Utica Billion Cubic Feet per Day Rest of U.S. Billion Cubic Feet per Day (Bcf/d) 64 20% of…
U.S. Natural Gas and NGL Trade Flows Changing 2000 2020 Paradigm shift from U.S. Northeast being a significant importer to a significant exporter Driven by Marcellus and Utica production growth Infrastructure continuing to build…
Northeast NGL Supply Growth Forecast Northeast is forecasted to account for 24% of total U.S. NGL production in 2026 49 MBPD Access to all major NGL Williston markets in the U.S. and the world 25 537 MPLX is largest midstream…
Northeast Operations Well-Positioned to Access all Major NGL Markets* Edmonton Northeast Markets Markets Access to all major NGL Ontario Midwest Markets markets in the U.S. and Markets the world Key takeaway solutions Northeast…
Northeast Operations Well-Positioned in Ethane Market Ontario Markets Operate 190 MBPD of de-ethanization capacity in the Mariner West Mariner East Marcellus & Utica shales Exports Distribution by Pipeline Northeast Produced 116…
MPLX - Gathering & Processing Southwest Operations Processed Volumes Completed 200 MMcf/d Hidalgo processing plant supporting Available Average Utilization Area Capacity Volume producers in the Delaware Basin (MMcf/d)(a) (MMcf/d)…
MPLX - 2016 Organic Capital Investment 2016 organic growth capital forecast narrowed to a range of 22% 900 MM to 1.2 B Gathering & Processing capital 8% includes infrastructure to support Northeast and Southwest 33% operations…
MPLX - Strong Financial Flexibility to Manage and Grow Asset Base Committed to maintaining As of (MM except ratio data) investment grade credit profile 6/30/16 Completed a 1 B private Total assets 16,079 placement of convertible…
MPLXs Commodity Price Sensitivities 92% fee-based net operating margin, 8% commodity exposed for 2016 Maintain active hedging program and have currently hedged 45% of our remaining 2016 commodity exposure; beginning to hedge for 2017…
MPLXs 2016 Forecast MPLX has increased the midpoints of its 2016 financial forecast Financial Measure 2016 Forecast Net Income(a) 140 million - 240 million Adjusted EBITDA(b) 1.3 billion - 1.4 billion Net cash provided by operating…
MPLXs 2016 Forecast - Reconciliation Adjusted EBITDA and Distributable Cash-Flow from Net Income (MM) Low High Net income 140 240 Plus: Depreciation and amortization 540 540 Impairment expense(a) 130 130 Net interest and other…
MPLXs 2016 Forecast - Reconciliation Adjusted EBITDA Attributable to MPLX LP and DCF Attributable to Unitholders from Net Cash Provided by Operating Activities (MM) Low High Net cash provided by operating activities 1,075 1,175…
Reconciliations Speedway Segment Adjusted EBITDA to Segment Income from Operations 2Q 2016 (MM) 2011 3Q 2015 4Q 2015 1Q 2016 2Q 2016 LTM Speedway Segment Income from Operations 271 243 135 167 193 738 Plus: Depreciations and…
Reconciliations EBITDA to Net Income for Midstream Segment 1H 2016 (MM) 2011 2Q 2016 YTD Annualized Midstream Segment Income from Operations 199 368 736 Plus: Depreciation and Amortization 45 284 568 Midstream Segment EBITDA 244 652…
Reconciliation Pro Forma Adjusted EBITDA to Pro Forma Net Income Attributable to MPC (MM) 2015 2016 3Q 4Q 1Q 2Q Pro Forma Net Income attributable to MPC* 943 225 1 801 Less: Net interest and other financial income (costs) (131)…
Reconciliation Pro Forma Adjusted EBITDA related to MPLX to Pro Forma MPLX Net Income (MM) 2015 2016 3Q 4Q 1Q 2Q Pro Forma MPLX Net Income* 123 104 (37) 20 Less: Net interest and other financial income (costs) (66) (67) (68)…
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 220 (per 1.00/barrel change) LLS-WTI…
MPCs 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…
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