Barclays CEO Energy-Power Conference September 5, 2017 1
Strategic Actions Status Update 1st dropdown in March - transaction value of 2.015 B 1Q17 250 MM annual EBITDA 8x EBITDA multiple Share repurchases of 420 MM 1.55 B returned to shareholders in first Share repurchases of 750 MM;…
Completed Second Dropdown to MPLX Assets include MPCs ownership interests: Total consideration of 1.05 B Explorer Pipeline Company, representing a 630 MM in MPLX equity and 420 MM in cash 24.51 percent ownership interest in the…
Strategic Actions Update Completed Speedway Review MPC Boards Conclusion Maintaining Speedway as an integrated business within MPC drives the greatest long-term value for MPC shareholders Substantial integration synergies (270 - 390…
Executing Strategic Plan to Enhance Value Expected 4.5 B after-tax cash proceeds Simplifies structure and expected to lower from dropdowns and 1.2 B - 1.4 B annual cost of capital distributions after IDR exchange Increased…
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 8.6 3.6 2015 2016 2017 2015 2016…
OPECs Resolve to Reduce Crude Inventory Crude Inventories Crude Days of Supply + Exports 550 34 500 32 30 450 MMB 28 Days 400 26 24 350 22 300 20 Mar May Jun Feb Jul Sep Oct Aug Apr Nov Dec…
Progress Toward Rebalancing Products Gasoline Days of Supply + Exports Distillate Days of Supply + Exports 28 27 34 26 32 25 30 Days 24 28 Days 23 26 22 24 21 22 20 20 Mar May Jun Feb Jul Sep Oct…
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…
Export Market Remains Robust Demand from Latin America remains MPC Export Capacity 600 strong for both diesel and gasoline 510 While arbitrage to Europe for diesel 500 115 is not always open, occasional 395 400 365 opportunities…
2017 Capital Outlook Excluding Acquisitions 10% 3% Speedway Corporate & Other MPC excluding MPLX 1.6 B Refining & Marketing (R&M) 1,085 MM Maintenance 800 MM 22% Midstream 65 MM R&M Sustaining Speedway 380 MM 56% Capital MPLX…
Refining & Marketing Margin Enhancing Investments 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…
Speedway - Industry Leader with Significant Growth Opportunities 1 in EBITDA/store/month vs. public peers 30 Peer Median = 20 M 20 M 10 0 Speedway Murphy USA Casey's Couche-Tard Sunoco CST Alon USA Western Refining…
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…
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…
MPLX - Delivering Consistent Growth in EBITDA and DCF 59% increase in EBITDA since MarkWest acquisition 70% increase in DCF while maintaining strong coverage ratio 500 474 1.50 423 400 375 391 1.40 351 Coverage Ratio 298…
MPLX - 2017 Priorities and Strategy Gathering & Processing Segment Accomplishments Focus for Remainder of 2017 Executed strategic agreements to Execute on volume growth forecasts support continued long-term growth Marcellus/Utica…
Natural Gas Supply Growth Forecast Marcellus/Utica Basin is the Leading Growth Play 43% of total U.S. growth is expected to occur in Northeast Total U.S. natural gas Northeast supply is forecasted to Denver-Julesburg grow by 20…
MPLX - 2017 Priorities and Strategy Logistics & Storage Segment Accomplishments Focus for Remainder of 2017 Completed multiple acquisitions Complete strategic actions with sponsor Two dropdowns from MPC (388 MM in Investment in…
Executing Our Strategic Plan and Delivering Results Total Shareholder Return Since Spin-Off (6/30/2011) Since 2011 spinoff we have: Returned approximately 12 billion to our shareholders Consistently grown dividend, 26% CAGR since…
Strategic Actions Update 22
Strategic Actions Announced in January Significantly accelerate dropdowns to MPLX Exchange of MPCs economic interest in the general partner (GP) for MPLX LP units in conjunction with completion of accelerated dropdowns Conduct a…
Strategic Actions Status Update 1st dropdown in March - transaction value of 2.015 B 1Q17 250 MM annual EBITDA 8x EBITDA multiple Share repurchases of 420 MM 1.55 B returned to shareholders in first Share repurchases of 750 MM;…
Speedway Evaluation Process Overview Established an independent Special Committee Five independent directors of the MPC Board; no executive management on committee Held 11 meetings since formation Special Committee provided…
Boards Conclusion Maintaining Speedway as an integrated business within MPC drives the greatest long-term value for MPC shareholders Substantial integration synergies (270 - 390 MM per year1) Speedway is operated as a best-in-class…
Tax Considerations of a Potential Separation Engaged Ernst & Young and Crowell & Moring to explore tax-free separation Value impact of a separation if treated as taxable would be significant, potentially over 5 B in total borne by MPC…
Speedway Integration Synergy Value Integration synergy value loss beyond term of an initial supply % of Total Annual Synergies (Midpoint) agreement is substantial (270 - 390 MM per year) Vertical integration synergies 6% Wholesale…
Speedway Integration Synergy Value Annual Value Loss1 Description ( millions) Wholesale volume Value uplift captured by MPC wholesale sales to Speedway 105 - 120 Value MPCs refineries, supply, and marketing groups create through…
Leverage and Liquidity Impacts of Separation MPC is committed to maintaining its current investment grade credit profile Speedways contribution to diversified cash flows is an important component of MPCs risk profile for rating…
Illustrative Cash Impact of Separation Pro Forma MPC Sources Uses ( millions) Cash Distribution from Speedway 3,0001 Debt Reduction (2,500)2 Cash to Balance Sheet (1,000)3 One Time Debt Tendering and Transaction Costs (240)4…
Speedway Valuation Stable retail business segment transparent, easy to understand and value MPC provides transparency into Speedway operating and financial performance consistent with public retail peers Sell-side research places…
Industry Leader with Significant Growth Opportunities 1 in EBITDA/store/month vs. public peers 30 Peer Median = 20 M 20 M 10 0 Speedway Murphy USA Casey's Couche-Tard Sunoco CST Alon USA Western Refining Industry…
Summary Thorough review of Speedway was conducted Boards conclusion: Speedway as an integrated business within MPC drives the greatest long-term value for MPC shareholders Significant opportunities to continue…
Delivering Significant Capital Returns for Our Shareholders 12 billion returned to shareholders since spin 3.5 B in dividends1 8.6 B in share repurchases /Share Repurchased 32% 1.60 1.52 MM 10,000 of Outstanding Common Shares…
Executing Our Strategic Plan and Delivering Results Total Shareholder Return Since Spin-Off (6/30/2011) Since 2011 spinoff we have: Returned approximately 12 billion to our shareholders Consistently grown dividend, 26% CAGR since…
Appendix 37
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…
Strong Operational Performance and Responsible Corporate Leadership 39
Operating Income per Barrel of Crude Throughput* MPCs Rank 20 MPCs 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 3 1 3 2 0 -5 1998 1999 2000 2001…
Strong Liquidity and Capitalization Provides financial flexibility to fund growth projects and pursue business strategies As of June 30, 2017 MPC Committed to maintaining investment- MPC MPLX Excluding Consolidated Adjustments(a)…
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,…
MPLX Organizational Structure Marathon Petroleum Corporation and Affiliates (NYSE: MPC) MPC views MPLX as integral to its 100% interest 26% LP interest operations and is aligned with its MPLX GP LLC Public* Preferred Common…
MPLX - Robust Organic Growth Opportunities Forecast organic capital of 1.8 B to 2.0 B for 2017* Organic Growth Capital Investment G&P Segment 5% Assets recently placed in service Utica 60 MBPD fractionation train at Hopedale (1Q17)…
MPLX - 2017 Forecast 12%-15% distribution growth in 2017; double-digit distribution growth in 2018 Forecast, excluding September 1 and future dropdowns: Financial Measure 2017 Forecast Net Income 600 MM - 750 MM Adjusted EBITDA(a)…
MPLX - Growth Capital Forecast Projects expected to be completed in 2017 Est. Completion Logistics & Storage Est. Completion Gathering & Processing Projects Shale Resource Capacity Date Projects Date Rich- and Dry-Gas Gathering(a)…
MPLX - Growth Capital Forecast Projects expected to be completed in 2018 Est. Completion Logistics & Storage Est. Completion Gathering & Processing Projects Shale Resource Capacity Date Projects Date Houston I Processing Plant(a)…
MPLX - Attractive Portfolio of Organic Growth Capital Logistics & Storage Segment Midwest Pipeline Infrastructure Build-out Industry solution for Marcellus and Utica liquids 2017 estimated completion Ozark Pipeline Expansion Crude…
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…
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…
Fuels Distribution Business Model Marketing Model Marketing Model Services Model (Wholesale Distribution) (Rack-to-Retail) MPC outsources fuels marketing Purchase MPCs marketing Precedent models purchase, market, services to MPLX…
MPLX - Logistics & Storage Segment Overview High-quality, well-maintained assets that are integral to MPC Owns, leases or has interest in 3,800 miles of crude oil pipelines and 4,300 miles of product pipelines 62 light-product…
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…
MPLX - Executing a Comprehensive Utica Strategy Phased Infrastructure Investment Cornerstone Pipeline commenced operations in October 2016 Hopedale pipeline connection completed December 2016 Harpster-to-Lima pipeline fully…
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…
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,…
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 Bluestone MPLX well-positioned to support producer…
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 residue gas takeaway pipelines…
MPLX - Marcellus/Utica Processing Capacity Building Infrastructure to Support Basin Volume Growth Currently operate 66% of processing capacity in Marcellus/Utica basin 8 7.0 Bcf/d processing capacity by end of 2018 2017 plant…
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…
MPLX - Gathering & Processing Marcellus & Utica Operations Processed Volumes Record processed volumes averaged approximately 4.7 Bcf/d Available Average Utilization Area Capacity Volume Commenced operations of (MMcf/d)(a) (MMcf/d)…
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)…
MPLX - Considerable Scale in the Southwest 2.1 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…
MPLX - Gathering & Processing Southwest Operations Processed Volumes Began construction of gas processing plant in the STACK Available Average Utilization Area Capacity Volume shale (Omega) expected to be (MMcf/d)(a) (MMcf/d) (%)…
MPLX - Expanding Southwest Position Processing Plants Under Construction in High Performance Resource Plays Cana-Woodford Omega Plant Permian Argo Plant Hidalgo Complex 200 MMcf/d Eddy Permian Arapaho Complex Basin Blaine…
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 MPLXs 20% MM crude and product…
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 - 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…
MPLX - Strong Financial Flexibility to Manage and Grow Asset Base Committed to maintaining As of (MM except ratio data) investment grade credit profile 6/30/17 Cash and cash equivalents 293 2.25 B senior notes issued 1Q 2017 Total…
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 Execute and expand Robust…
Speedway Serving More Than 3 Million Customers Every Day High Quality Network of Retail Locations Largest company-owned and -operated c-store chain east of Mississippi Sold 6 B gallons of transportation fuels and 5 B in merchandise in…
Speedway Retail Network 64 235 12 304 115 115 310 488 60 Conn. Del. 1 4 Speedway 147 62 Mass. 110 Largest company-owned 39 278 N.J. 71 and -operated c-store chain 52 R.I. 20 2 east of the Mississippi 2,730 locations…
Speedway Exceeding Expected Acquisition-related Synergies Continuing to focus on marketing enhancement opportunities 2016 actual synergies of 180 MM exceeded prior projection Synergies and Marketing Enhancements 250 225 200 190…
Speedway - Focus on LPBE 12.39 Each 1.00 cent per 12 gallon improvement = 60 MM annual 10 pretax earnings Light Product Breakeven (cpg) 8 7.35 Measure of operating efficiency and 6 merchandise contribution to total 5.41…
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,…
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…
Private Label Products Higher Sales and Margins Better Value Proposition for Consumers Promotes Brand Awareness and Loyalty Differentiation from Competitors 78
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…
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…
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 60% PADD II 62% Sour Crude PADD III 38% 40% Sweet Crude As of June 30, 2017 2Q 2017 Assured Sales of Gasoline Production (Speedway + Brand + Wholesale…
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…
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%…
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…
U.S. Product Exports Will Help Meet Global Demand EIAs 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…
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…
Galveston Bay-Texas City World-Class Refining Complex Galveston Bay and Texas City refineries consolidated operations in mid-2017 Galveston Bay-Texas City BPCD* Crude 585,000 Resid Processing 142,100 Catalytic…
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…
MPLX - Adjusted EBITDA and Distributable Cash-Flow Reconciliation from Net Income (MM) 4Q 2015(d) 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 Net income (loss) 42 (14) 72 194 182 187 191 Depreciation and amortization 58 136 151…
MPLX - Reconciliation of Adjusted EBITDA and Distributable Cash from Net Cash Provided by Operating Activities (YTD) Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, (MM) 2015 2016 2016 2016 2016 2017 2017 Net cash provided by…
MPLX 2017 Forecast - Adjusted EBITDA and Distributable Cash-Flow Reconciliation from Net Income (MM) Low High Net income 600 750 Depreciation and amortization 690 690 Net interest and other financial costs 380 380 Adjustment for…
MPLX 2017 Forecast - Adjusted EBITDA and Distributable Cash-Flow Reconciliation from Net Cash Provided by Operating Activities (MM) Low High Net cash provided by operating activities 1,450 1,600 Changes in working capital items 45 45…
MPC Reconciliation Adjusted EBITDA to Net Income Attributable to MPC (MM) 2016 2017 LTM 3Q 4Q 1Q 2Q Net Income attributable to MPC 145 227 30 483 885 Less: Net interest and other financial income (costs) (141) (136) (150) (158)…
Reconciliation MPC Adjusted EBITDA Related to MPLX to MPLX Net Income(a) (MM) 2016 2017 LTM 3Q 4Q 1Q 2Q MPLX Net Income 194 182 187 191 754 Less: Net interest and other financial income (costs) (64) (65) (78) (87) (294) Add:…
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 97
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…
Loading...
