Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Investor Presentation (June 2013)
96 slides from Marathon Petroleum's investor presentation, June 2013
Slide 1: Investor Presentation
Investor Presentation June 2013 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of federal securities laws regarding both MPC and MPLX. These forward-looking statements relate to, among other things, MPC’s current expectations, estimates and projections concerning MPC’s and MPLX’
Slide 3: Strategic Vision
Strategic Vision Achieve top tier safety/environmental performance Grow enterprise value Expand platform for MPLX growth Deliver top quartile refining performance Increase Speedway and Marathon brand assured sales volumes Deliver profitable Speedway growth Goal: Top Quartile Total Shareh
Slide 4: Deliver Top Tier Safety Performance
Deliver Top Tier Safety Performance Record safety performance across our operations in 2012 World-class safety performance for DHOUP Continue industry leadership on preventive maintenance Achieve Top Tier Safety/Environmental Performance 4
Slide 5: Grow Enterprise Value
Grow Enterprise Value Earnings growth Strong dividend, growing over the long term Sustained share repurchase program Valuation re-rate/uplift Grow Enterprise Value 5
Slide 6: Through Cycle Earnings – MPC vs. Competitors
Through Cycle Earnings – MPC vs. Competitors (Pre-Tax Adjusted Domestic Operating Income per Barrel of Crude Oil Throughput) 20 MPC 15 Peer Company 10 $/BBL 5 0 -5 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 March YTD Preliminary MPC’s Rank 3 3 2 1 2 3 7 2 1 5 3 1
Slide 7: Grow Enterprise Value
Grow Enterprise Value $2.46 billion of capital returned to shareholders since 7/1/11 as of 3/31/13 $2.2 billion share repurchase authorization outstanding as of 3/31/13 Op Income and EBITDA Growth Cumulative Returns to Shareholders 7,000 3,000 6,342 6,000 $2.46 B 5,347 2,500 5,000 4,636 2,000 4,
Slide 8: Grow Enterprise Value
Grow Enterprise Value Total Shareholder Return of 93% for 2012, 43% for 2013 Cumulative Total Shareholder Return by Year 100% 93% 80% 67% 60% 43% 40% 36% 31% 20% 0% Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Top Quartile Shareholder Returns 8
Slide 9: Growth Drivers
‘MARATI Growth Drivers
Slide 10: MPC has Created an Industry-Leading MLP
Operations Opportunities and Drop-downs Pursue Organic Growth Maintain Safe and Reliable Grow Through Acquisitions Focus on Fee-Based Businesses 20 25 30 35 40 45 10/25/12 11/05/12 11/12/12 11/19/12 Grow MPLX 11/27/12 12/04/12 12/11/12 12/18/12 12/26/12 01/03/13 01/10/13 01/17/13 01/24/13 01/31/13 0
Slide 11: Acquisition of Galveston Bay Assets
Acquisition of Galveston Bay Assets 451 MBPCD (475 MBPSD) high complexity refinery, Nelson Complexity Index of 15.3 Attractive base cash purchase price of ~$598 million Potential $700 million earnout over six year period Closed February 1, 2013; financed with cash on hand Estimated increme
Slide 12: Detroit Heavy Oil Upgrade Project
Detroit Heavy Oil Upgrade Project Increased heavy oil capacity from 20,000 BPCD to 100,000 BPCD 28,000 BPCD delayed Coker 36,000 BPCD Distillate Hydrotreater (DHT) Crude capacity increased ~14,000 BPCD Discounted Canadian crude Investment: $2.2 billion* project Estimated incremental an
Slide 13: Garyville Major Expansion (GME) Project
Garyville Major Expansion (GME) Project Garyville, LA refinery is last grassroots refinery built in the U.S. (1976) Base Garyville refinery, 2008 Solomon survey Best U.S. cash cost operating expense Second-best U.S. Energy Intensity Index GME Project completed in late 2009 - significantly
Slide 14: $3.9 Billion Garyville Major Expansion
$3.9 Billion* Garyville Major Expansion 1/1/2013 1/1/2012 522 MBPCD Crude Capacity 490 MBPCD 1/1/2011 320 MBPCD Crude Capacity Gasoline 464 MBPCD 305 MBPCD 1/1/2010 Crude Capacity Gasoline 230 MBPCD 436 MBPCD Diesel 1/1/2009 300 MBPCD 215 MBPCD Crude Capacity Gasoline Third Large
Slide 15: Supply Dynamics
Supply Dynamics 15
Slide 16: Significant Growth in North American Crude Oil Supply
Significant Growth in North American Crude Oil Supply 2012-2020 Total Canadian Growth +1,800 MBD 2012 – 2020 +3,920 MBD Bakken +840 MBD Detroit Utica Canton +120 MBD Permian Robinson Basin Catlettsburg +460 MBD Texas City Eagle Ford Garyville +700 MBD Galveston Bay MPC Refinery Sources: CAPP and MPC
Slide 17: Balance in Refining Network
Balance in Refining Network Canton (Ohio) 80,000 Catlettsburg (Ky.) 240,000 Detroit (Mich.) 120,000 Midwest Capacity 646,000 BPCD Robinson (Ill.) 206,000 Galveston Bay (Texas) 451,000 Texas City (Texas) 80,000 Garyville (La.) 522,000 Total 1,699,000 Texas Capacity 531,000 BPCD Louisiana Capacity 522
Slide 18: MPC Well Positioned to Capture Oil Sands Economics
MPC Well Positioned to Capture Oil Sands Economics Hardisty ~$5.50/BBL Hardisty to ~$7.35/BBL Detroit Hardisty to USGC Detroit Value vs. USGC Refineries Chicago for Canadian Heavy Processing Wood Patoka $BBL River Laid-In Crude Cost 1.85 Cushing ~$1.95/BBL Houston to Chicago Higher Product Value 2.2
Slide 19: Transportation Costs Set Crude Differentials
Transportation Costs Set Crude Differentials Bakken $4.60 $16.75 $16.00 $10.35 Patoka Eagle Ford St. James Excludes gathering and truck transportation costs (up to ~$5.25/BBL) Sources: MPC Estimates based on publically available information, OPIS, and Argus Media. Deliver Top Quartile Refining Perfo
Slide 20: MPC Well Positioned for Utica Shale Options
MPC Well Positioned for Utica Shale Options Multiple Transportation Options Truck, Barge, Pipeline Canton Canton Refinery - 80 MBPCD Condensate Capacity: 10-15 MBPCD Wellsville Light Crude Oil Capacity: ~40 MBPCD Catlettsburg Refinery - 240 MBPCD Crude Oil Gathering Condensate Capacity
Slide 21: Distribution & Marketing
‘MARATI Distribution & Marketing
Slide 22: U.S. Distillate Exports Continue to Grow
U.S. Distillate Exports Continue to Grow Total U.S. distillate exports averaged U.S. Distillate Exports 1 MMBPD in 2012 compared to 138 1200 MBPD in 2005 Central & South America 1000 Mexico ~60% of the total U.S. distillate Netherlands exports were to Latin America 800 Other Growing regional d
Slide 23: Diesel and Gasoline Export Success
Diesel and Gasoline Export Success Currently selling gas and diesel 140 Exports export cargos via term and spot 120 9 transactions 100 80 MBPD Value added relative to domestic 60 114 121 pipeline sales 40 76 20 35 Product quality premium 0 No RIN obligation 2010 2011 2012 2013* Diesel Gas
Slide 24: Extensive Retail Network Provides Assured Sales
Extensive Retail Network Provides Assured Sales 78 63 Speedway 68 301 Fourth largest U.S.-owned/ 781 operated c-store chain 107 309 478 45 ~1,460 stores Speedway 854 390 655 60 1 ~2 million customers/day Brand 140 114 587 136 Located in eight states 2 171 * 308 128 * 139 * 251 Marathon b
Slide 25: Speedway Sales – Stable Merchandise Margin
Speedway Sales – Stable Merchandise Margin Light Product Volume 4 3.30 3.23 2.94 3.03 B Gallons 3 2 1.0 3.7 (1.2) (0.9) 1 0 2009 2010 2011 2012 (Same Store % inside bars) Light Product and Merchandise Gross Margin 1,400 1,200 1,000 398 399 333 384 800 MM$ Merchandise Sales 4 600 3.11 3.19 2.92 3.06
Slide 26: Increase Marathon Brand Assured Sales Volume
Increase Marathon Brand 5,000 Light Product Sales Assured Sales Volume Millions of Gallons 4,000 3,000 2,000 1,000 0 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 Increase Speedway and Marathon Brand Assured Sales Volume 26
Slide 27: 2013 Value Drivers
2013 Value Drivers Growth of MPLX Galveston Bay refinery Detroit Heavy Oil Upgrade Project Profitable Speedway growth 2013 $1.6 billion capital investments* Capital return to shareholders Strong dividend, growing over the long term Continuing share repurchases – as of March 31, 2013,
Slide 28: Appendix
‘MARATI Appendix
Slide 29: Fully Integrated Downstream System
Fully Integrated Downstream System Refining and Marketing Seven-plant refining system with ~1.7 MMBPCD capacity One of the largest wholesale suppliers in our market area One of the largest producers of asphalt in the U.S. ~5,000 Marathon brand retail outlets across 17 states ~1,200 retail
Slide 30: MPC has Strong Earnings and Cash Flow, Investment Grade Credit Profile
Strong MPC has Strong Earnings and Cash Flow, Profile Investment Grade Credit Profile Financial Policies Historical Financial Summary Committed to Investment Grade profile 7,000 Rating Current 6,342 Agency MPC Rating 6,000 S&P BBB/A-2 (Stable) 5,347 Moody’s Baa2/P2 (Positive) 5,000 4,636 Maintai
Slide 31: Executing on Commitment to Total Shareholder Return
Balanced Return Executing on Commitment to Total Shareholder Return Base dividend increased 75% since July 1, 2011 $1.78 billion share repurchases Total shareholder return of 93% for 2012 2012 Cumulative Total Shareholder Return Cumulative Return of Capital 100% 93% 3,000 $2.46 B 80% 2,500 67%
Slide 32: Focused Return of Capital to Shareholders
Balanced Return Focused Return of Capital to Shareholders $7,000 Net cash provided by operations $6,224 $6,000 42% of $1,367 Free Cash Flow** Dividends and share $5,000 Free Cash repurchases* Flow** $3,286 $4,000 Millions $1,919 Change in cash and all other $3,000 $2,000 Cash capital expenditures $2
Slide 33: MPC Key Strengths
MPC Key Strengths Balanced Operations Crude Oil Refining Capacity Crude Slate 62% PADD II Sour Crude 54% PADD III 46% Sweet Crude 38% Through 3/31/13 As of 2/1/13 Assured Sales of Gasoline Production (Speedway + Brand + Wholesale Contract Sales) ~50% Assured Sales Wholesale and ~50% Other Sales Thro
Slide 34: MPC Relative Refining Position
MPC Relative Refining Position (MBCD) U.S. Crude Refining Capacity (1) (#) # of U.S. Refineries (1) 3,000 15 2,097 12 11 1,950 2,000 1,808 1,699 10 7 7 7 6 981 958 955 5 5 5 1,000 755 665 5 443 3 0 0 Shell HFC BP Chevron Tesoro Exxon MPC Citgo Valero Phillips Tesoro BP Exxon MPC Citgo Valero Phillip
Slide 35: Refinery Capacity
Refinery Capacity BPCD NCI* Garyville 522,000 10.8 Galveston Bay 451,000 15.3 Catlettsburg 240,000 10.3 Robinson 206,000 10.6 Detroit 120,000 9.9 Texas City 80,000 8.4 Canton 80,000 9.0 Total 1,699,000 11.6** The Nelson Complexity Index is a construction cost-based measurement used to describe the i
Slide 36: U.S. Gulf Coast Offshore Imports
Positive Fundamentals U.S. Gulf Coast Offshore Imports Domestic crude oil cannot be exported without a permit, therefore domestic crude oil must be priced to back out imports Virtually all of the light sweet imports will be displaced in 2013 Other imports will be displaced as U.S. crude oil pr
Slide 37: CAPP Western Canada Crude Supply Forecast
Positive Fundamentals CAPP Western Canada Crude Supply Forecast Annual Growth from 2011 - 2030 MBPD Light Supply 24 8,000 Heavy Supply 184 7,000 6,000 5,000 MBPD 4,000 3,000 2,000 1,000 0 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 *Oil Sands Heavy includes some volumes of upgraded heavy
Slide 38: Midwest Refineries’ Opportunity
Positive Fundamentals Midwest Refineries’ Opportunity Current North Dakota Production: ~780 MBPD 2012 Year-end: 770 MBPD Canada 2011 Year-end: 535 MBPD 2010 Year-end: 344 MBPD 2008 Year-end: 202 MBPD 2020 Production Forecast: North Dakota Up to 1,500 MBPD Montana Pipeline takeaway capa
Slide 39: Positive Industry Trends – Growing North American Production
Positive Industry Trends – Growing North American Production “Resource plays” dominate U.S. 3.0 output growth. Conventional 2000 - 2012 2012 - 2025 production (Alaska, offshore, 2.5 California, other legacy production) struggles to sustain output 2.0 NGL output growth is mostly MMBD 1.5 associat
Slide 40: Texas City and Galveston Bay Refinery Opportunity
Eagle Ford Shale Texas City and Galveston Bay Refinery Opportunity Eagle Ford is a very light (40-50 API), sweet crude (0.2% sulfur) Currently being trucked to markets Pipelines are being built Dock facilities are in operation and continue to be built to make it a “waterborne” crude to captu
Slide 41: U.S./Canada Key Existing and Planned Pipelines
U.S./Canada Key Existing and Planned Pipelines Edmonton Trans Hardisty Mountain Burnaby Anacortes Regina Cromer Clearbrook Montreal Superior Portland Sarnia Estimated MBPD Pipeline Completion* 540 Keystone Current Casper Flanagan Chicago SAX Mustang 96 Pegasus Current Steele City 170 Platte Current
Slide 42: Indicative Transportation Costs
Indicative Transportation Costs Indicative Pipeline Costs Indicative Rail Costs Bakken to Patoka(1) $/BBL Bakken to U.S. East Coast(1) $/BBL Bakken Pipeline to Patoka 3.60 Railcar Loading 1.50 *Pipeline to MPC Rail Transportation 9.00 1.00 Refineries Railcar Lease 3.00 Total 4.60 Railcar Unloading 1
Slide 43: Options… Detroit Logistics
Options… #2 #1 Detroit Logistics 2 Enbridge Enbridge Canadian crude via multiple routes Stockbridge Virtually all world Detroit crudes available via Chicago Samaria pipelines from USGC Lima All gasoline production sold in regional market #3 Platte/Keystone Patoka Wood River #4 #5 Capline Mid V
Slide 44: Attractive Midwest/PADD II
Attractive Midwest/PADD II Demand exceeds refining capacity in PADD II PADD IV Net imported ~13% of petroleum PADD V PADD II PADD I demand into PADD II, primarily from PADD III in 2012 Enhances margin opportunities PADD III Transportation premium embedded in PADD II gasoline prices Percentag
Slide 45: MPC Well Positioned – Benefits of Retail Integration
Capturing Value MPC Well Positioned – Benefits of Retail Integration Ratable sales Optimized operations Refining Pipeline Terminal Biofuels blending base load Supply dislocation flexibility Reduced credit risk (Speedway) Speedway Connecting Pipelines Marketing Area Refineries Fully I
Slide 46: Speedway vs. Public Peers – 2012
Speedway vs. Public Peers – 2012 Light Product Sales Independent Refiners 300 Average 146.9 M Gal/Store/Month 250 200 Public C-Store 177.1 150 Average 103.5 100 50 0 Casey's Couche-Tard Pantry Susser Speedway Valero Murphy Tesoro Delek Western Refining Light Product Margin Independent Refiners 40 35
Slide 47: Speedway vs. Public Peers – 2012
Speedway vs. Public Peers – 2012 Merchandise Sales 200 Independent Refiners Public C-Store 174.7 Average 93.5 $M/Store/Month Average 115.7 150 100 50 0 Casey's Couche-Tard Pantry Susser Speedway Valero Murphy Tesoro Delek Western Refining Merchandise Margin 60 Public C-Store Average 40.6 50 45.5 Ind
Slide 48: Gasoline Vehicle Fuel Efficiencies
Gasoline Vehicle Fuel Efficiencies 60 50 40 Miles Per Gallon 30 20 10 0 2000 2005 2010 2015 2020 2025 Adjusted On-road New Autos (Model Year) New Automobiles (Model Year) Adjusted On-road New Light Trucks (Model Year) New Light Trucks (Model Year) Adjusted Total On-road Vehicle Fleet Sources: DOT, M
Slide 49: 2013 Significant Capital Projects
2013 Significant Capital Projects Upgrade Galveston Bay refinery Speedway expansion Garyville diesel projects Utica Shale projects Condensate splitters Wellsville terminal Patoka to Catlettsburg pipeline upgrade Robinson unicracker revamp Garyville gasoline and diesel export Catl
Slide 50: Market Indicators Used in Project EBITDA Calculations
Market Indicators Used in Project EBITDA Calculations 2011 2006 - 2010 West Texas Intermediate 3-2-1 crack spread 23.31 10.68 Light Louisiana Sweet 3-2-1 crack spread 6.05 8.05 Arab Light 3-2-1 crack spread 11.16 14.03 Arab Medium 4-2-1-1 crack spread 7.71 9.54 Light Louisiana Sweet 6-3-2-1 crack sp
Slide 51: Annual Price and Margin Sensitivities
Annual Price and Margin Sensitivities $ Millions (After Tax) LLS 6-3-2-1 Crack Spread* Sensitivity ~$425 (per $1.00/barrel change) Sweet/Sour Differential** Sensitivity ~$225 (per $1.00/barrel change) LLS-WTI Spread*** Sensitivity ~$75 (per $1.00/barrel change) Refined Product Wholesale Margin Sensi
Slide 52: Galveston Bay Complements MPC’s Integrated System
Galveston Bay Complements MPC’s Integrated System Refinery 451,000 BPCD (475,000 BPSD) refinery Nelson Complexity Index: 15.3 Significant recent investments Excellent crude optionality Substantial products logistics opportunities Advantageous petrochemical configuration Cogen Facility
Slide 53: Galveston Bay Asset Transaction Indicative Purchase Price Comparison
Enhancing Galveston Bay Asset Transaction Earnings Indicative Purchase Price Comparison TSO-Carson (8/2012) $16 MPC-Galveston Bay without earnout $21 Alon-Bakersfield (6/2010) $66 PBF-Del City (6/2010) $109 Delta-Trainer (4/2012) $122 MPC-Galveston Bay with earnout* $123 PBF-Paulsboro (12/2010) $151
Slide 54: Galveston Bay Projected Synergies and Capital Investments
Enhancing Galveston Bay Asset Acquisition Earnings Projected Synergies and Capital Investments (Millions) Projected Incremental Synergies EBITDA Projected Synergy Capital Investments $160 $160 $120 $120 $80 $80 $40 $40 $0 $0 2013E 2014E 2015E 2016E 2017E+ 2013E 2014E 2015E 2016E EBITDA Synergies of
Slide 55: Galveston Bay Projected Sustaining Capital
Galveston Bay Projected Sustaining Capital* 500 400 300 $MM 200 100 0 2013E 2014E 2015E 2016E 2017E 2018E 2019E Refinery All Other *Excludes synergy and other value accretive investments 55
Slide 56: Galveston Bay Transaction Product Logistics Opportunities
Galveston Bay Transaction Product Logistics Opportunities Flexible product placement Domestic and export Southeast opportunities Midwest Synergies with MPC’s Texas City and Garyville refineries and MPC logistics Zachary Pasadena Garyville Texas City Exports to Florida Mexico/SA/Europe 56 56
Slide 57: Galveston Bay Marketing Assets and Integration
Galveston Bay Marketing Assets and Integration Integrated acquisition includes Assignment of branded-jobber contracts representing ~1,200 BP retail sites ~61 MBPD of gasoline sales Locations primarily in FL, MS, TN and AL BP trademark to be used during transition process Strategic step i
Slide 58: Galveston Bay Assets Expected Accretive Transaction
Galveston Bay Assets Expected Accretive Transaction (MM unless otherwise indicated) MPC Base EBITDA - analyst 2013 consensus estimates(1) $ 4,759 $ 4,759 Assets acquired EBITDA using 2006-2010 pricing(2)(4) 1,200 Assets acquired EBITDA using 2011 pricing(2)(5) 700 Total EBITDA $ 5,959 $ 5,459 Improv
Slide 59: Galveston Bay Assets Cash Purchase Price Including Full Earnout
Galveston Bay Assets Cash Purchase Price Including Full Earnout* Base cash purchase price (millions) $ 598 Full earnout 700 Total purchase price with full earnout $ 1,298 Less: Cogen facility (290) Less: Terminals and other logistics assets (120) Less: Retail marketing (40) Estimated Net Refining As
Slide 60: 1Q 2013 Earnings
1Q 2013 Earnings* 1Q 2013 1Q 2012 Earnings $725 MM $596 MM Earnings per Diluted Share $2.17 $1.70 Adjusted Earnings Adjusted Earnings per Diluted Share $4,000 $12 3,352 9.79 $10 $3,000 760 2.26 $8 Millions $/Share $2,000 1,129 $6 3.31 $4 $1,000 867 2.53 $2 596 725 1.70 2.17 $0 $0 2012 2013 2012 2013
Slide 61: Earnings 1Q 2013 vs. 1Q 2012 Variance Analysis
Earnings* 1Q 2013 vs. 1Q 2012 Variance Analysis $900 9 (14) $800 162 17 (40) (5) 725 $700 596 $600 Millions $500 $400 $300 $200 $100 $0 1Q 2012 Refining & Speedway Pipeline Interest & Income Noncontrolling 1Q 2013 Marketing Transportation Other Taxes Interests *References to Earnings refer to Net In
Slide 62: Refining & Marketing Segment Income Variance Analysis
Refining & Marketing Segment Income 1Q 2013 vs. 1Q 2012 Variance Analysis $2,000 185 23 (116) $1,500 38 (287) 359 (27) (13) 1,105 Millions $1,000 943 $500 $0 1Q 2012 *LLS *Sweet/ *LLS /WTI *LLS *Market Direct Other Other 1Q 2013 6-3-2-1 Sour Diff. Spread Prompt vs. Structure Operating Gross Crack De
Slide 63: Speedway Segment Income Variance Analysis
Speedway Segment Income 1Q 2013 vs. 1Q 2012 Variance Analysis $80 5 (8) 20 $70 67 $60 50 $50 Millions $40 $30 $20 $10 $0 1Q 2012 Light Product Gross Merchandise Gross Other 1Q 2013 Margin Margin 63
Slide 64: Pipeline Transportation Segment Income Variance Analysis
Pipeline Transportation Segment Income 1Q 2013 vs. 1Q 2012 Variance Analysis $80 4 (8) 22 (6) $60 (3) 51 Millions 42 $40 $20 $0 1Q 2012 Trans. Pipeline Mechanical Depreciation Other 1Q 2013 Revenue Affiliates Integrity 64
Slide 65: Total Company Cash Flow
Total Company Cash Flow 1Q 2013 $8,000 1,033 (1,688) $7,000 1,046 $6,000 (116) (431) 4,860 33 4,737 $5,000 Millions $4,000 $3,000 $2,000 $1,000 $0 12/31/12 Operating Working Cash Capital Dividends Share Other 3/31/13 Cash Cash Flow Capital Expenditures Paid Repurchases Cash Balance before and Balanc
Slide 66: Select Balance Sheet/Cash Flow Data
Select Balance Sheet/Cash Flow Data 2013 2012 2012 2012 ($MM) 1Q 4Q 3Q 2Q As of quarter ended: Cash and cash equivalents 4,737 4,860 3,387 1,895 Total debt 3,416 3,361 3,349 3,335 Equity 12,412 12,105 11,467 10,326 Debt-to-total-capital ratio 22% 22% 23% 24% Last Twelve Months (LTM) EBITDA 6,599 6,3
Slide 67: 2Q 2013 Outlook
2Q 2013 Outlook Projected 2Q 2013 2Q 2012 Crude throughput 1.70 MMBD 1.21 MMBD Total throughput 1.90 MMBD 1.34 MMBD Percent of WTI-priced crude 22% 28% Direct operating costs in Refining & Marketing gross margin*: Planned turnaround and major maintenance $1.00 $0.88 Depreciation & amortization 1.25
Slide 68: Reconciliation
Reconciliation Earnings to Adjusted Earnings* ($MM) 2012 2013 1Q 2Q 3Q 4Q 1Q Earnings 596 814 1,224 755 725 Pension settlement expenses** 53 22 5 MN asset sale settlement gain** (117) Adjusted Earnings 596 867 1,129 760 725 * References to Earnings refer to Net Income attributable to MPC ** Net of t
Slide 69: Reconciliation
Reconciliation Free Cash Flow to Net Cash Provided from Operations ($MM) 2012 2013 (Quarter to date) 2Q 3Q 4Q 1Q Net cash provided from operating activities 269 1,833 2,043 2,079 Additions to property, plant and equipment (326) (331) (403) (195) Acquisitions* (163) (27) - (1,493) Free cash flow (220
Slide 70: Income
Income 2012 2013 ($MM unless otherwise noted) 1Q 2Q 3Q 4Q 1Q Refining & Marketing segment income 943 1,325 1,691 1,139 1,105 Speedway segment income 50 107 76 77 67 Pipeline Transportation segment income 42 50 52 72 51 Corporate and other unallocated items (79) (92) (74) (91) (67) Pension settlement
Slide 71: EBITDA Reconciliation to Net Income (Loss) Attributable to MPC
EBITDA Reconciliation to Net Income (Loss) Attributable to MPC 2009 2010 2011 2012 2013 ($MM) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Net Income (Loss) attributable to MPC 449 623 529 802 1,133 (75) 596 814 1,224 755 725 Less: Related party net interest and other financial income 45 24 17 18 - - - - 1 - - Less:
Slide 72: Cash Provided from Operations Before Changes in Working Capital Reconciliation
Cash Provided from Operations Before Changes in Working Capital Reconciliation to Cash Provided from Operations ($MM) 2012 2013 (Quarter to date) 2Q 3Q 4Q 1Q Net cash provided from operations 269 1,833 2,043 2,079 Less changes in working capital: Changes in current receivables 1,159 (393) 491 (884)
Slide 73: Capital Expenditures & Investments
Capital Expenditures & Investments* ($MM) 2013 Budget 1Q 2013 Refining & Marketing 1,016 115 Speedway 255 36 Pipeline Transportation 184 20 Corporate and Other 160 24 Subtotal 1,615 195 Capitalized Interest 43 4 Total Capital Expenditures & Investments 1,658 199 *Excludes $1.38 billion in capital ex
Slide 74: MPC Crude Slate
MPC Crude Slate 100% 21 23 22 24 23 22 22 20 24 25 31 80% Other Sweet 60% Other Sour 56 52 52 49 48 45 50 52 55 54 48 40% WTI Based 20% 26 27 29 30 28 26 21 23 25 25 22 0% 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 74
Slide 75: Refining & Marketing Indicative Gross Margin – 1Q 2013
Refining & Marketing Indicative Gross Margin – 1Q 2013 $2,500 552 (22) 65 (959) $2,000 851 $1,500 1,340 (235) Millions 171 1,105 $1,000 682 $500 $0 *LLS *Sweet/ *LLS/WTI *LLS *Market Direct Other R&M Other R&M 6-3-2-1 Sour Diff. Spread Prompt vs. Structure Operating Gross Gross Segment Crack Deliver
Slide 76: MPLX Summary of Key Investment Highlights
MPLX Summary of Key Investment Highlights Robust Growth Opportunities Attractive organic growth prospects augmented with tariff and volume increases Potential for significant growth through acquisitions alongside, and/or from, MPC; MPC has a very substantial portfolio of logistics assets, includ
Slide 77: MPLX Offering Summary
Creating Value MPLX Offering Summary Issuer MPLX LP Sponsor Marathon Petroleum Corporation Exchange / Ticker NYSE / MPLX Estimated Distribution Coverage 1.10x Expected Tax Shield 80% for the period from the IPO until December 31, 2015 $203 million to MPC $192 million to pre-fund certain expansio
Slide 78: MPC has Created an Industry-Leading MLP
Creating Value MPC has Created an Industry-Leading MLP MPLX’s Primary Business Strategies Generate stable cash flows by providing primarily fee-based midstream Focus on Fee-Based services to MPC and third parties Businesses Mitigate volatility in cash flows by entering into long-term transportat
Slide 79: MPC and MPLX are Aligned
MPC and MPLX are Aligned MPLX Organizational Structure* Marathon Petroleum MPC views MPLX as integral to Corporation and Affiliates (NYSE: MPC) its operations and is aligned with its success and 100.0% 71.6% incentivized to grow MPLX ownership interest Public LP interest MPLX GP LLC MPLX assets
Slide 80: MPLX’s Assets are Integral to MPC
MPLX’s Assets are Integral to MPC Marathon Pipe Line LLC and Ohio River Pipe Line LLC comprise one of the largest networks of pipeline systems in the U.S. based on total volume delivered 1,004 miles of common carrier crude oil pipelines 1,902 miles of common carrier products pipelines Inclus
Slide 81: MPC Relationship Provides Robust Growth Opportunities for MPLX
MPC Relationship Provides Robust Growth Opportunities for MPLX Logistics infrastructure is extremely important to MPC's success MPC intends to use MPLX as the primary growth vehicle for its midstream logistics business MPLX can pursue acquisitions directly from MPC MPLX can pursue third-part
Slide 82: MPLX Stable and Predictable Cash Flows
MPLX Stable and Predictable Cash Flows Revenue – Customer Mix1 MPLX’s assets consist of fee-based pipeline 11% systems and storage assets $55 MM MPC has historically accounted for 85%+ of 16% the volumes shipped on MPLX’s pipelines $81 MM $364 MM MPC has entered into multiple long-term transpo
Slide 83: MPLX: Assets for an MLP
MPLX: Assets for an MLP Historical crude and product volumes have been extremely stable with low variability despite material changes in the broader commodity price environment Butane cavern and storage facilities generate stable and ratable (capacity based) fees Throughput and storage agreeme
Slide 84: MPLX Strategically Located Assets
MPLX Strategically Located Assets MPLX operates all of its assets Assets are primarily located throughout the Midwest and U.S. Gulf Coast In 2011, these regions collectively comprised ~72% and ~48% of total U.S. crude distillation capacity and finished products demand, respectively Existing
Slide 85: MPLX Strategically Located Assets (Continued)
MPLX Strategically Located Assets (Continued) MPLX’s assets and a large number Bakken of MPC's retained assets are in the Williston Basin “heart” of the Midwest Appalachian infrastructure build-out Basin Michigan Antrim Basin Strategically located near emerging Devonian (Ohio) Excello-Mulky Fore
Slide 86: MPLX High-Quality, Well-Maintained Asset Base
MPLX High-Quality, Well-Maintained Asset Base MPLX continually invests in the maintenance and integrity of its assets Uses a patented integrity management program to enhance pipeline safety and reliability Top tier reputation and active industry involvement Certifications, Initiatives and Indu
Slide 87: MPLX Operations Deliver Top Tier Safety Performance
MPLX Operations Deliver Top Tier Safety Performance Patented integrity management program fully compliant with DOT regulations State of the art in-line assessment practices Leading control room management practices Industry leader in helping to improve Damage Prevention practices 87
Slide 88: MPLX Conservative Coverage with Predictable and Growing Distributions
MPLX Conservative Coverage with Predictable and Growing Distributions Estimated Twelve Months Ending 12/31/2013 ($ in millions, unless otherwise noted) Stable historical results and strong growth going forward Adj. EBITDA $197.0 Predictable cash flows underpinned by MPC throughput Less: and stor
Slide 89: MPLX Adjusted EBITDA Bridge Analysis
MPLX Adjusted EBITDA Bridge Analysis ($MM) 300 14.6 (49.9) 35.7 250 98.4 (13.5) (10.8) (1.3 ) 197.0 (92.2) 200 168.3 (44.5) 150 123.8 104.8 100 50 (44.5) 73.2 -- 2011 2011 PF Pro Forma 2011 Tariffs Volumes Other Revenue Cost of Purchases G&A Other Taxes Total MPC Retained Estimated Adjustments ¹ and
Slide 90: MPLX Pipeline Throughput Agreements
MPLX Pipeline Throughput Agreements Initial MPC Min. 2011 MPC Est. 12 Mo. Ended 12/31/13 Term Diameter Commitment Throughput Weighted Average MPC Min. Asset (Years) (Inches) (MBPD) (MBPD) Tariff ($/BBL) Revenue ($MM) Crude Systems Patoka to Lima 10 20" / 22" 40 132 $0.52 $7.6 Catlettsburg and Robins
Slide 91: Experienced MPLX Management Team
Experienced MPLX Management Team Management team includes MPC executive officers with an average 25 years of experience with MPLX's assets Years Experience Position at MPC Position at MPLX Industry With MPC Gary R. Heminger President and Chairman of the Board and 37 37 Chief Executive Officer Chief
Slide 92: MPLX Net Income Variance Analysis
MPLX Net Income 1Q 2013 vs. 1Q 2013 Estimated per Prospectus Variance Analysis $50 (14.5) 6.4 $45 $40 38.9 6.5 (2.0) 35.3 (17.7) $35 $30 Millions $25 $20 17.6 $15 $10 $5 $0 1Q 2013 Tariffs and Volumes Cost of Other 1Q 2013 MPC Retained 1Q 2013 Estimate Other Income Revenues and Interest Attributable
Slide 93: MPLX Adjusted EBITDA and Distributable Cash Flow
MPLX Adjusted EBITDA and Distributable Cash Flow Estimated ($MM) 1Q 2013 1Q 2013* Adjusted EBITDA 47.4 50.1 Less: Adjusted EBITDA attributable to MPC-retained interest 22.3 23.5 Adjusted EBITDA attributable to MPLX LP 25.1 26.6 Less: Cash interest paid, net 0.2 0.3 Income taxes paid - 0.1 Maintenanc
Slide 94: MPLX Strong Financial Flexibility to Manage and Grow Asset Base
MPLX Strong Financial Flexibility to Manage and Grow Asset Base MPLX’s undrawn $500 million revolver provides significant liquidity to grow its business As of ($MM except ratio data) 3/31/13 Cash and cash equivalents 227.9 Total assets 1,311.9 Long-term debt* 11.1 Total equity 1,236.2 Consolidated
Slide 95: MPLX LP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Net Income
MPLX LP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Net Income Estimated ($MM) 1Q 2013 1Q 2013 Net income 35.3 38.9 Less: Net income attributable to MPC-retained interest 17.7 19.1 Net income attributable to MPLX LP 17.6 19.8 Plus: Net income attributable to MPC-retained interest 1
Slide 96: MPLX Capital Expenditures
MPLX Capital Expenditures* ($MM) 2013 Budget** 1Q 2013 Expansion Projects 109.3 10.4 Maintenance 33.2 2.2 Acquisitions 100.0 - Total Capital Expenditures 242.5 12.6 * Capex budget represents MPLX on 100% basis ** As updated 96
Marathon Petroleum — Investor Presentation (June 2013) on 6ix