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Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation

Marathon Petroleum Corporation · Jan 8, 2019 · 53 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.

Slides

  1. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 1
    Goldman Sachs Global Energy Conference January 8, 2019
  2. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 2
    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…
  3. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 3
    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…
  4. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 4
    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…
  5. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 5
    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…
  6. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 6
    Increasing Synergy Potential Synergy Outlook 1 Estimated Annual Run-Rate ( millions) ( millions) 380 1,400 1,400 110 270 400 450 300 55 1,000 90 290 665 210 600 200 120 1,000 950 710 465 480 Refining & Retail Midstream…
  7. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 7
    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…
  8. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 8
    Commodity Price Assumptions and Long-Term Outlook Commodity / Spread 2018 2019 Long-Term (/BBL, unless noted) Average 1 Business Plan 2 Outlook2 WTI 65.00 64 50 - 80 Brent-WTI 6.75 3.60 3 - 12 Brent-ANS (0.25) 0.10 (1) - 2…
  9. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 9
    Regional Crack Spread Outlook USGC LLS 321 Chicago WTI 321 14.50 14 16 8.50 9.25 9.75 12.75 8.00 /BBL /BBL 6.00 9.00 2016 2017 2018 2019E-2021E 2016 2017 2018 2019E-2021E Average Average WC ANS 321 ULSD - 3% Resid…
  10. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 10
    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…
  11. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 11
    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…
  12. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 12
    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:…
  13. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 13
    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…
  14. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 14
    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…
  15. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 15
    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…
  16. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 16
    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…
  17. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 17
    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…
  18. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 18
    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…
  19. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 19
    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…
  20. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 20
    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…
  21. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 21
    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…
  22. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 22
    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…
  23. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 23
    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…
  24. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 24
    R&M Segment Synergies Estimated Annual Run-Rate 1 Synergy Projections by Sub-Category ( millions) ( millions) 665 665 95 200 140 420 100 160 250 70 465 100 100 260 150 160 YE2019 YE2020 YE2021 Refining Refining…
  25. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 25
    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…
  26. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 26
    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.…
  27. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 27
    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…
  28. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 28
    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 City…
  29. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 29
    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…
  30. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 30
    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…
  31. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 31
    Permian NGL Long-Haul Pipeline and 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 Water…
  32. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 32
    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…
  33. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 33
    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…
  34. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 34
    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…
  35. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 35
    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…
  36. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 36
    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…
  37. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 37
    Unparalleled Nationwide Marketing & Retail Footprint Terminal Sales Location Note: Based on combined estimates for 2018 1 Across Retail segment and Brand Marketing 39
  38. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 38
    Multi-Channel Platform Creates Unrivaled Flexibility Retail Segment R&M Segment Retail 1 Direct Dealer Brand Wholesale Channel diversity 7.8 billion GPY 2.6 billion GPY 5.3 billion GPY 16.9 billion GPY maximizes value capture…
  39. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 39
    Strong and Diversified Fuel Branding Platform Enhanced dual proprietary Brand marketing platform (Marathon + ARCO) 1 Leverage regional brand strengths and 275 related consumer preferences 75 22 Tremendous growth opportunities in…
  40. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 40
    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.…
  41. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 41
    Retail Segment Synergies 1 Estimated Annual Run-Rate Synergy Projections by Sub-Category ( millions) ( millions) 300 300 35 90 20 200 115 50 90 210 20 150 130 70 YE2019 YE2020 YE2021 Profit Reduce Operating Reduce G&A…
  42. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 42
    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…
  43. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 43
    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…
  44. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 44
    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…
  45. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 45
    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…
  46. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 46
    Consistent Return of Capital Through Share Buybacks Share Repurchases ( billions) 7.5 4th quarter of 2018: 700 million of targeted repurchases 3.3 Capital return target: 50% of 2.4 discretionary free cash flow1 Existing…
  47. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 47
    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…
  48. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 48
    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,…
  49. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 49
    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…
  50. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 50
    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…
  51. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 51
    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…
  52. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 52
    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…
  53. Goldman Sachs Global Energy Conference – Marathon Petroleum Corporation – slide 53
    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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