Credit Suisse Energy Summit Gary Heminger, Chairman, President and CEO February 14, 2017
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…
2016 Refining Margin-Enhancing Accomplishment STAR Garyville Robinson Galveston Project FCC/Alky Revamp Commissioned Light Bay Completed Crude Upgrade Completed First Phase Export Capacity Expansion Expanded Galveston Bay resid…
2016 MPLX Accomplishments One-year anniversary of Commenced Operations Start-up of 3rd Entered Delaware Basin at Hopedale Complex with MarkWest Increased natural gas processed volumes by Increased fractionated volumes by…
Focus on Improving Safety and Environmental Performance Safety OSHA Recordable Incident Rate and Days Away Rate 0.80 (Employee and Contractor History) 0.61 0.60 0.50 0.45 0.45 ORIR 0.41 0.41 0.40 0.32 0.33 DAR 0.24 0.20 0.1…
2017 Macro Outlook U.S. macro picture remains solid Expect good underlying demand for refined products despite a difficult January Distillate demand expected to benefit from increased commercial activity OPECs resolve to reduce…
Executing Strategic Plan to Enhance Value Asset Dropdowns Exchange for Evaluation Underway MLP-Qualifying EBITDA Benefits Expected 4.5 B after-tax cash proceeds from Simplifies structure dropdowns and 1.2 B - 1.4 B annual…
2017 Capital Outlook Excluding Acquisitions and Dropdowns 11% 3% Speedway Corporate & Other MPC excluding MPLX 1.7 B Refining & Marketing (R&M) 1,165 MM Midstream 90 MM 25% Speedway 380 MM R&M Sustaining Corporate & Other 100 MM…
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…
2017 MPLX Organic Growth Capital Investment Forecast range of 1.4 B to 1.7B* 1 B to 1.3 B - natural gas and gas liquids infrastructure 3rd fractionation train at Hopedale completed in January Numerous projects supporting producer…
Recent MPLX Strategic Announcements Strategic Joint Venture with Antero Midstream Ozark Pipeline Acquisition 50/50 joint venture to support Antero Resources 220 MM investment significant production growth profile in the Marcellus 433…
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…
Speedway Exceeding Expected Acquisition-Related Synergies Continuing to focus on marketing enhancements opportunities 2016 actual synergies exceeded revised projection of 155 MM Reduced overall light product breakeven by 30% in 4Q…
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…
2017 Refining and Marketing Capital Investment Plan 325 MM Growth and Margin Enhancing Investments STAR Program 1.5 B multi-year staged investment 85 MM investment in 2017 Full integration of Galveston Bay and Texas City refineries…
Galveston Bay Refinery Performance Improvements 50+% TOP- 50+% TIER 25 20% Environmental Unplanned Unit Processing Reduced OPEX Incident OSHA Downtime Rate Records To Date Reduction Recordable Reduction Injury Rate Period of…
Top-tier Refining Turnaround Execution Lower Turnaround Costs(1) Longer Turnaround Intervals (1,2) MPC approx. 25% below Merchant Group and 5% below U.S. Avg. MPC approx. 15% longer than U.S. Avg. DHT (/unit of capacity) Lower…
Strong Liquidity and Capitalization As of December 31, 2016 MPC MPC MPLX Committed to maintaining investment grade Consolidated Adjustments(a) Excluding MPLX credit profiles at MPC and MPLX (MM except ratio data) Debt 10,572…
Strategic Plan to Enhance Shareholder Value (1)(2) (1)(3) 2018E LP & GP distributions MPC receives from MPLX Total Midstream Value to MPC after Strategic Plan 9 - 12 B 26 B 21 B 5 - 6 B Illustrative 12 B Illustrative GP/IDR 4…
Appendix 22
Update on Strategic Actions to Enhance Shareholder Value 1 Significantly accelerated dropdowns, to be done as soon as practicable (expected in 2017), subject to requisite approvals 1) and regulatory clearances, including tax MPC…
1 2 Strategic Actions to Enhance Shareholder Value Significant Cash to MPC for Return to Shareholders and Debt Paydown Dropdown transactions will result in a substantial amount of cash to MPC at close; additional cash would be…
1 2 Strategic Actions to Enhance Shareholder Value Significant Value to MPLX The combination of dropdowns and GP/IDR buy-in is anticipated to lower MPLXs cost of capital going forward Dropdowns enhance distribution growth GP/IDR…
Consistent with Its Demonstrated Track Record, MPC Continues Its Focus on Long-Term Value Creation MPC and its Board of Directors continually analyze opportunities to enhance value and are confident that the MPC plan is the right course…
MPC Assets Expected to be Acquired by MPLX 1.4 B of Estimated Annual EBITDA Pipelines Marine Terminals Refinery Fuels Logistics Distribution 5,400 miles of Equity in 50/50 blue 60 light product; 55 MMBBL storage Receives fixed…
Fuels Distribution Business Model Marketing Model Marketing Model Services Model (Wholesale Distribution) (Rack-to-Retail) MPC outsources fuels marketing Purchase MPCs marketing Precedents models purchase, services to MPLX for those…
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 Sustained Export Advantages Lower-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%…
Strong Operational Performance and Responsible Corporate Leadership 32
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…
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…
Key Strengths Balanced Operations Crude Oil Refining Capacity Crude Slate PADD II 61% 60% Sour Crude 40% PADD III Sweet Crude 39% As of December 31, 2016 4Q 2016 Assured Sales of Gasoline Production (Speedway + Brand +…
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…
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 14 12 12.39 Each 1.00 cent per 10 gallon improvement = 30 MM annual Light Product Breakeven (cpg) pretax earnings Total Expenses 8 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…
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 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…
MPLXs Forecast 12-15% distribution growth in 2017; double-digit distribution growth in 2018 Forecast, excluding acquisitions and dropdowns: Financial Measure 2017 Forecast Net Income 500 MM - 650 MM Adjusted EBITDA(a) 1.5 B - 1.65…
MPLX Organic Growth Capital Investments 2017 forecast 1.4 B - 1.7 B Est. Completion Est. Gathering & Processing Projects Shale Resource Capacity Date Logistics & Storage Projects Completion Date Rich- & Dry-Gas Gathering(a) Marcellus &…
Executing a Comprehensive Utica Strategy Phased infrastructure investment Cornerstone Pipeline commenced operations on time and under budget Hopedale pipeline connection completed December 2016 Utica build-out mid-2017 estimated…
MPLX - Attractive Portfolio of Organic Growth Capital Logistics & Storage Segment Utica Infrastructure Build-out Industry solution for Marcellus and Utica liquids Mid-2017 estimated completion Texas City Tank Farm MPC and…
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 - 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 - Focus on Solutions to Enhance Northeast NGL Market Lead the development of infrastructure to link supply of Northeast NGLs with market demand and enhance value for producer customers Largest fully integrated de-ethanization…
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…
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 Southwest Operations Processed Volumes 2016: Processed volumes increased Available Average Utilization 14% over full-year 2015 Area Capacity Volume (%) (MMcf/d)(a) (MMcf/d) Gathered volumes increased…
MPLX - Strong Financial Flexibility to Manage and Grow Asset Base Committed to maintaining As of (MM except ratio data) 12/31/16 investment grade credit profile Cash and cash equivalents 234 Completed a 1 B private Total assets…
MPLXs Commodity Price Sensitivities 92% fee-based net operating margin, 8% commodity exposure for 2017 Maintain active hedging program with 35% of our 2017 commodity exposure currently hedged Annual 2017 sensitivities to commodity…
MPLXs 2017 Forecast - Reconciliation Adjusted EBITDA and Distributable Cash Flow from Net Income (MM) Low High Net income 500 650 Depreciation and amortization 595 595 Net interest and other financial costs 265 265 Adjustment for…
Reconciliations - Speedway Speedway 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 EBITDA to Net…
Reconciliation Adjusted EBITDA to Net Income Attributable to MPC (MM) 2016 LTM 1Q 2Q 3Q 4Q Net Income attributable to MPC 1 801 145 227 1,174 Less: Net interest and other financial income (costs) (142) (137) (141) (136) (556) Add:…
Reconciliation MPC Adjusted EBITDA Related to MPLX to MPLX Net Income (MM) 2016 LTM 1Q 2Q 3Q 4Q MPLX Net Income (37) 20 143 132 258 Less: Net interest and other financial income (costs) (68) (64) (64) (65) (261) Add: Provision…
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…
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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