Agenda Welcome & Introductions Midstream 01 Kristina Kazarian 05 Mike Hennigan, President, MPLX VP, Investor Relations Don Sorensen, President, ANDX Strategic Overview Marketing & Retail 02 Gary Heminger 06 Tony Kenney, President,…
Strategic Overview Strategic Overview
Creating a Leading Energy Company Two great Enhanced scale Broader Expanded platform A premier legacies and integration commercial for growth energy company opportunities 6
Two Great Legacies: Combine For Competitive Strength 100 Combines Similar histories of 80 with ANDV strategic development Complete drop-downs MarkWest and IDR buy-in Galveston Bay combination 60 Refinery Hess retail…
Top Investor Questions Strategic vision for the combined company Benefits of scale and integration across platform Synergy update Capital allocation: investment & return policies New segment and reporting information IMO:…
Built For Change: Our Strategic Vision Core Values and Integrated Strategic & Financial Operational Business Model Disciplined Strength Excellence Investments Core values underpin Enhances value Creates competitive Provides…
Core Values: Underpin What We Do Every Day Attracting, developing, and retaining Health & Environmental exceptional people Safety Stewardship Company-wide Corporate alignment on Integrity Citizenship strategic direction…
Responsible Corporate Leadership MPC has earned 13 18 MPC 21 75% Environmental manages achievement certified wildlife awards habitats consisting of of the EPAs Energy Star earned from state 1,352 environmental agencies…
Leveraging a Larger System: Unprecedented Opportunities Feedstock Acquisition Inbound Logistics Refining & Processing Outbound Logistics Marketing & Retail Additional access to advantaged feedstocks Expanded logistics system lowers…
Integration: Further Opportunities for Value Chain Capture Kenai Nationwide footprint enables connectivity to key supply Anacortes sources and demand hubs Mandan Portland Dickinson Broader, integrated system St. Paul Detroit Park…
Growing Profitability: Attractive Profile for Investors MPC has significantly diversified, and non-refining segments now contribute 50% of EBITDA. Our strategic and disciplined investments have grown our business, creating an…
Financial Strength Underpins Total Shareholder Returns Robust Balance Sheet Capital Spend 1 1 Capital Return 1 Investment grade rating 2.8 billion plan in 2019 50% of discretionary free 2 Flat with 2018E (combined) cash flow…
MPC: Formula for Creating Exceptional Value Leading assets & Strategic vision to Exceptional opportunity capabilities grow value for investors Core values and operational Through-cycle excellence resilience Premier asset base…
Business Environment Business Environment
Global & U.S. Economic Outlook Positive Global gasoline demand grows with rising consumer incomes and higher vehicle miles travelled, partially offset by fuel efficiency trends. Distillate demand growth outpaces gasoline, driven by…
Global Refining Capacity Relatively Balanced Net worldwide refining capacity growth appears relatively balanced with new capacity in Asia and the Middle East, primarily to support domestic demand. Global Crude Distillation Capacity…
Global and U.S. Inventories Support Refining Margins Global Gasoline Inventories Global Distillate Inventories 425 650 MMB MMB 375 550 325 450 U.S. Gasoline Days of Supply U.S. Distillate Days of Supply 28 35 26…
Near-Term Gasoline Weakness, Offset by Long-Term Distillate Strength Rise in oil prices this year slowed global gasoline demand growth and strong margins have incentivized high refinery utilization pressuring gasoline margins; expect…
U.S. Refineries Among Most Cost Efficient in World The U.S. refining system is among the most cost efficient in the world given its access to low-cost natural gas and price-advantaged crudes making it well-positioned to supply…
Commodity Price Assumptions and Long-Term Outlook Commodity / Spread 2018 2019 Long-Term (/BBL, unless noted) Average 1 Business Plan 2 Outlook 2 WTI 66.25 64 50 - 80 Brent-WTI 6.50 3.60 3 - 12 Brent-ANS (0.25) 0.10 (1) - 2…
Regional Crack Spread Outlook USGC LLS 321 Chicago WTI 321 14.75 14 16 8.50 8.25 9.25 9.75 12.75 /BBL /BBL 6.00 9.00 2016 2017 2018 YTD 2019E-2021E 2016 2017 2018 YTD 2019E-2021E Average Average WC ANS 321 ULSD - 3%…
IMO: Global Opportunities for Complex Refineries Refiners shift to maximum distillate production Coker Upgrading (ULSD - 3% Resid Fuel Oil) and resid upgrading 60 Forecast 50 Ship owners accelerate installation of scrubbers to…
Sensitivities to Potential IMO Factors EBITDA Impact Key Metric Potential Impacts from 1/BBL change Higher crack required to support increased refinery Blended 321 Crack production and meet elevated demand for low sulfur fuels…
MPC Well-Positioned Among U.S. Refiners MPC well-positioned to produce high value fuels and capture benefits from the adoption of low sulfur fuels regulations given investments over past decade to enhance upgrading capabilities.…
Refining Refining
Roadmap to Creating Superior Value Refining Operational Product Supply Investments to Excellence & Placement Optionality Enhance Margin Optimization Flexibility Leverage broader Enhance reliability + Focus on upgrading Enhance…
Diversified Large-Scale U.S. Refining Portfolio 2 At 2011 listing 1 Acquired 2013 Acquired 2018 North America Refining Capacity 3,021 (MBPD) 2,409 1,866 1,700 1,096 919 MPC VLO P66 XOM Shell Chevron PADD 1 PADD 2…
Broader Scale Expands Supply Optionality ANS Canadian Larger footprint expands access to advantaged supply: 1 Bakken 2 1. 1 Canadian 2. 2 Bakken 3. 3 Permian New logistics assets lower crude acquisition costs WTI Other…
1 Canadian Crude Flexibility Broader system Clearbrook increases access to Anacortes Canadian crudes enhancing margin Portland St. Paul capture Park Detroit SAX/ Mustang Over 500 MBPD of Canton Canadian crude Martinez…
2 Bakken Strategy Optimization New logistics assets increase Bakken crude Johnsons Corner Clearbrook access, providing more Anacortes Mandan options to capture margin Connectivity and secured St. Paul Park space on…
3 Permian Strategy Optimization Increasing integrated footprint in the TX AR Permian creates multiple benefits NM across our platform El Paso Midland LA MS Wink LA Gathering systems create direct Orla Crane crude…
Safety & Environmental Excellence: Underpins Our Operations Personal Safety 2 Our goal is best-in-class personal safety, process 0.8 safety, and environmental performance 0.6 0.4 0.2 0.31 0.32 0.31 0.29 0.27 0.0 Environmental…
Operational Excellence: Delivers Significant Value Cash Operating Expense1 Improve operating costs Galveston Bay '14 2016 U.S. Average Best-in-class energy efficiency and turnaround Cash Operating Expense Index 4th Quartile…
Delivering Technical Excellence MPC Refining 5-year Low Cost / No Cost Incremental Production Yield Volume Increases + 134 Gasoline 3% + 110 + 88 All Other MBPD 33% Distillate 64% Crude Conversion Hydrotreating…
Key Strategic Investments: Grow EBITDA 1 Expected Annualized Average EBITDA ( in millions) Investments focused on +530 1,130 upgrading capabilities, yield GVL Coker 3 flexibility, and conversion capacity GBR STAR1 Track record…
Garyville Coker 3 Project Increases Garyville coking capacity by 50% to 150 MBPD to increase capability to upgrade resid Enhances distillate yields Coker 3 Leverages existing infrastructure Location Increases ability to capture…
Galveston Bay STAR Program Creates a world-class refining complex with 40 MBPD increased crude unit capacity Increases resid processing and improves gasoil recovery Optimizes operations and reduces costs Project details and…
Dickinson Renewable Diesel Produce renewable diesel to capture economic opportunity created by California Low Carbon Fuel Standard and Federal Renewable Fuel Standard Convert refinery to process soybean and corn oil to make 12 MBPD of…
Los Angeles LARIC Project Increases the flexibility to produce distillates and significantly lowers emissions 3040 MBPD of gasoline and distillate yield flexibility Physical integration of the Los Angeles refinery complex enhances…
Unprecedented Opportunities for Light Product Optimization Kenai Nationwide footprint Anacortes enables connectivity to all Mandan US markets Portland Dickinson St. Paul Detroit Park Canton Salt Lake City Chicago Pittsburgh…
Recent Investments Increase Midwest & Gulf Coast Placements Options and Increase Refining Utilization 1 Improved access to Eastern markets via rail and pipeline Detroit 1 2 Expanded barge/dock systems allow cost effective Robinson…
Mexico Strategy Optimization 1. 1 Utilizing ARCO brand at 105 stations in MPC Refineries Western Mexico, expanding ARCO to Martinez ARCO Operations Chihuahua and Baja Sur in early 2019 Rail Facility Terminal 2. 2 Developing Mexico…
Synergies Early Successes Crude Supply Refining Product Placement Canadian and Bakken Martinez and St. Paul East coast marine light crude optimization turnaround staffing and product optimization 40 MM to date contractor utilization…
Roadmap to Creating Superior Value Midstream Capture Full Enhance Grow in Leverage Financial Midstream Cash Flow Premier MPC Priorities Value Chain Stability Basins Relationship Participate across Long-haul pipelines Permian: Fosters…
U.S. Production Growth Creates Midstream Opportunities Strong production growth in crude, natural gas, and natural gas liquids will require additional infrastructure to link supply to global demand markets. Pipelines, processing,…
Capturing The Full Midstream Value Chain Feedstock Acquisition Inbound Logistics Refining & Processing Outbound Logistics Marketing & Retail Diversification enhances opportunities for revenue capture Integration enables capture…
Capturing Permian Opportunities: Follow the Molecule Creating an integrated footprint from Legend Crude the Permian to the Gulf Coast NGL Natural Gas 1 Gathering and processing Delaware & Midland Basins TEXAS 2 Long-haul…
1 Permian G&P Feeds Downstream Opportunities Gathering systems create significant growth opportunities in the Permian TexNew Conan Mex Gathering Preakness Torado System System Argo Apollo 1 Legend Crude pipeline To Texas…
2 Permian Crude Long-Haul Pipelines Investments in long-haul pipelines generate stable, fee-based midstream income and also help lower feedstock costs tor MPC refineries Gray Oak Pipeline MPC, Diamondback Energy, PSXP Midland TEXAS…
2 Permian Natural Gas Long-Haul Pipeline Expand our value chain by connecting growing natural gas production to demand from MPC refineries and global export markets Whistler Pipeline MPLX, Targa, White Water Midstream, and potentially…
2 Permian NGL Long-Haul Pipeline and 3 Fractionation Expand our value chain by connecting growing NGL production and developing new fractionation infrastructure in the Gulf Coast BANGL Pipeline (Belvieu Alternative NGL) MPLX, White…
4 Expanding Export Assets at Five Gulf Coast Locations Export facilities create ability to generate third party revenue and meet global demand for crude, refined products, and NGLs Currently in service Mt. Airy, LA: acquired in 3Q18…
Bakken: Third-Party Growth Opportunities Full-service midstream offering for both third parties and MPC starting at the well-head with crude oil and natural gas gathering through processing and fractionation with multiple takeaway…
Marcellus/Utica: Footprint Continues to Deliver Marcellus/Utica continues to be the largest natural OH PA gas basin in the U.S. Current producer demand Bluestone supports our buildout of incremental infrastructure: Hopedale Harmon…
Outlook Assumes MPLX and ANDX operate as standalone companies 2019E 2020E 2019E 2020E Growth Capital Expenditures (B)1 2.2 2.0 Growth Capital Expenditures (B)1 0.6 0.6 Adjusted EBITDA (B) 3.9 4.4 EBITDA (B) 1.4 1.6 DCF (B)2 3.1…
Marketing & Retail Retail & Marketing
Roadmap to Creating Superior Value Marketing & Retail Leverage Scale Capture Enhance High-Value to Drive Value Integration Customer Growth Creation Opportunities Experience Strong brand portfolio Optimize channel Focus on key…
Unparalleled Nationwide Marketing & Retail Footprint Terminal Sales Location Note: Based on combined estimates for 2018 1 Across Retail segment and Brand Marketing 64
Platform for Creating Superior Value Growth in existing and new markets High Value Growth Commercial Fueling/Diesel expansion Remodels with food service focus High-quality M&A Focus on Technology Enhanced customer…
Retail Segment: MPCs Unique Competitive Advantage Two complimentary retail platforms that Speedway 1 in Peer Group Performance generate stable and growing cash flow with 30 (M EBITDA/Store/Month) unparalleled integration value.…
Financial Principles and Policy Disciplined investment in growth opportunities Through-cycle dividend growth Support our investment grade credit rating Return cash to shareholders through repurchases Maintain the safety, integrity…
Balance Sheet: Foundation for Strategy Execution MPC Liquidity Minimum cash balance 1 2 billion Revolving credit facilities 6 billion Trade receivables facility 750 million Target Leverage Debt to EBITDA MPC (excluding MLPs)…
Disciplined Capital Allocation Policy 2019 Financial Targets (excluding MLPs): Capital expenditures: 2.8 billion Dividends Capital Expenditures Capital return target: 50% of discretionary free cash flow 1 Share Repurchases…
Disciplined Capital Spend ( billions) Projected 2019 investments for MPC MPC 2019E 2020E Growth Capital 1.8 1.8 Focused on enhancing margin capture Maintenance Capital 1.0 1.0 system-wide Total MPC (excluding MLPs) 2.8 2.8…
Stable and Growing Dividend Targeting Secure throughout business cycles Annual Dividends 10% growth ( per share) 1.84 Growth commensurate with the business 1.52 1.36 Targeting 10% long-term growth rate 1.14 0.92 0.77…
Consistent Return of Capital Through Share Buybacks Share Repurchases ( billions) 4th quarter of 2018: 700 million of 7.5 targeted repurchases 3.3 2019 outlook: expect 2.5 billion of 2.4 2.5 repurchases 1 Existing authorization…
New MPC Segment Reporting Structure Refining & Midstream Retail Marketing Refining MPLX Retail Marketing Speedway ANDX Other Brand Wholesale Direct Dealer Asphalt & Legacy ANDV Petrochemicals Legacy MPC Refining Logistics…
New MPC Segment Reporting Structure Refining & Marketing Midstream Retail Regions: MPLX Retail Gulf Coast ANDX Direct dealers Mid-Con Other midstream assets West Coast Marketing: Key Statistics: Key Statistics: Brand Pipeline,…
MPC Refining Footprint and Regions Refining Locations 1 4 refineries: 711 MBPD West Coast Anacortes Mandan Dickinson St. Paul Park Pricing indicator: WC ANS 321 Detroit Salt Lake City Canton Robinson 1 10 refineries:…
2019 MPC Illustrative EBITDA Commodity / Spread 2019 Business Plan 2019 EBITDA estimated at 12.9 billion WTI 64 based on our current business plan which Brent-WTI 3.60 includes a variety of market-based Brent-ANS 0.10…
Turnaround Accounting Impacts Peer Comparisons MPC will continue to expense turnarounds (TAR); ANDV had deferred and amortized these costs TAR-adjusted EBITDA will be provided quarterly to increase comparability with peers Pro-Forma…
MPC: Creating Exceptional Value 1 Balance Sheet Return of Capital Capital Investment 20% debt to market cap Payout target 50% of 2.8 billion per year 8+ billion liquidity discretionary free cash flow 2 20% Return of Capital…
Closing Remarks
MPC A Leading Energy Company Refining Midstream Marketing & Retail Superior Operations Expanding Platform Across: Retail, Significant Growth Opportunities Wholesale, and Brand Strategic Investment to Capture Value Strategic…
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Appendix 87
Market Data Terminologies Metric Formula Mid-Con Crack Spread* ((2xChicago CBOB Gasoline + Chicago ULSD)/3) x 42 WTI Prompt West Coast Crack Spread* ((2xLA CARBOB + LA CARB Diesel)/3) x 42 ANS Prompt USGC Crack Spread* ((2xUSGC…
Fourth Quarter 2018 Outlook Other Corporate Turnaround Other Total Crude Charge/ Total Sweet Sour Depreciation and Other and Major Manufacturing Direct Operating Throughput 1 Feedstocks Throughput 1 Crude Crude and Amortization…
Committed to Delivering Substantial Synergies Synergy Potential Impact Area Business Context (millions) Cost Elimination 315 Clearly identified cost efficiencies allows for rapid achievement Over 10 billion of combined purchases…
MPLX 2019-2020 Outlook Reconciliation Adjusted EBITDA and Distributable Cash Flow from Net Income ( billion) 2019E 2020E Net income 2.2 2.5 Depreciation and amortization 0.9 1.0 Net interest and other financial costs 0.7 0.7…
MPLX 2019-2020 Outlook Reconciliation Adjusted EBITDA and Distributable Cash Flow from Net Cash Provided by Operating Activities ( billion) 2019E 2020E Net cash provided by operating activities 3.2 3.8 Changes in working capital…
ANDX 2019-2020 Outlook Reconciliation EBITDA and Distributable Cash Flow from Net Earnings ( billion) 2019E 2020E Net earnings 0.8 0.8 Depreciation and amortization 0.4 0.5 Net interest and other financial costs 0.2 0.3 EBITDA 1.4…
Speedway EBITDA Reconciliation Segment EBITDA to Segment Income from Operations ( million) 2017 2018 Q3 Q4 Q1 Q2 LTM Speedway Segment Income from Operations 208 148 95 159 610 Plus: Depreciation and Amortization 68 78 79 73 298…
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