Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Q3 2016 Earnings Presentation
24 slides from Marathon Petroleum's earnings presentation, Oct 31, 2016
Slide 1: Third Quarter 2016 Earnings Conference Call and Webcast
Third Quarter 2016 Earnings Conference Call and Webcast as supplemented on October 31, 2016
Slide 2: Forward-Looking Statements
Forward‐Looking Statements This press release contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation ("MPC") and MPLX LP ("MPLX"). These forward-looking statements relate to, among other things, expectations, estimates and projectio
Slide 3: Highlights
Highlights Announced strategic initiatives to enhance shareholder value – Aggressive dropdown strategy – Highlighting the value of the general partner interest – Review of segment reporting Reported third-quarter earnings of $145 million, or $0.27 per diluted share Results include a $267 milli
Slide 4: 3Q 2016 Earnings
3Q 2016 Earnings* 3Q 2016 3Q 2015 Earnings* $145 MM $948 MM Earnings per Diluted Share** $0.27 $1.76 Earnings* Earnings per Diluted Share** 3,000 $2,852 6 187 $5.26 2,500 5 0.35 948 2,000 4 1.76 $/Share $MM 1,500 3 826 1.51 $1.78 1,000 $947 2 145 0.27 500 891 801 1 1.62 1.51 0 0 2015 2016 2015 2016
Slide 5: Earnings 3Q 2016 vs. 3Q 2015 Variance Analysis
Earnings* 3Q 2016 vs. 3Q 2015 Variance Analysis 1,200 1,000 948 800 600 400 $MM 446 200 145 165 6 (64) 0 -200 (123) (1,128) (34) (71) -400 3Q 2015 Refining & Speedway Midstream** Items not Impairment Interest and Income Noncontrolling 3Q 2016 Marketing Allocated to Expense Other Taxes Interests Segm
Slide 6: Refining and Marketing Segment Income
Refining and Marketing Segment Income 3Q 2016 vs. 3Q 2015 Variance Analysis 1,600 1,434 1,400 1,200 1,000 79 $MM 800 1 32 (711) (69) 600 400 38 306 200 (463) (35) 0 *3Q 2015 **LLS **Sweet/ **LLS/WTI **LLS **Market Other Direct Other 3Q 2016 6-3-2-1 Sour Diff. Diff. Prompt Structure Gross Operating C
Slide 7: Speedway Segment Income
Speedway Segment Income 3Q 2016 vs. 3Q 2015 Variance Analysis 300 250 243 28 209 200 (8) (54) $MM 150 100 50 0 3Q 2015 Light Product Merchandise Other 3Q 2016 Gross Margin Gross Margin 7
Slide 8: Midstream Segment Income
Midstream Segment Income 3Q 2016 vs. 3Q 2015 Variance Analysis 300 16 258 250 121 200 $MM 150 27 100 93 1 50 0 *3Q 2015 Revenue Equity Affiliates MarkWest Operating Expenses 3Q 2016 and Other *We changed our operating segment presentation in the first quarter of 2016 in connection with the contribut
Slide 9: Total Company Cash Flow
Total Company Cash Flow 3Q 2016 3,000 1,071 2,500 2,000 (666) 1,754 1,500 (516) $MM 184 1,000 48 709 (785) (241) 500 (140) 0 6/30/2016 Operating Working Net Debt Cash Capital Issuance of Return of Distributions to Other 9/30/2016 Cash Cash Flow Capital Expenditures MPLX LP Capital to noncontrolling
Slide 10: Liquidity and Capitalization/Select Cash-Flow Data
Liquidity and Capitalization/Select Cash-Flow Data MPC MPC MPLX As of September 30, 2016 Excluding Consolidated Adjustments(a) ($MM except ratio data) MPLX Debt 10,566 4,412 6,154 Mezzanine equity 1,000 1,000 - Equity 19,957 8,031 11,926 Total capitalization 31,523 13,443 18,080 Debt-to-capital rati
Slide 11: 4Q 2016 Outlook
4Q 2016 Outlook Other Total Corporate Turnaround Depreciation Other Crude Charge/ Total Sour Crude Oil Direct and Other and Major and Manufacturing Throughput* Feedstocks Throughput* Throughput Operating Unallocated Maintenance Amortization Cost** Throughput* Percentage Costs Items in MBD Refinery D
Slide 12: Appendix
Appendix 12
Slide 13: Expanding Cash Flow Distributions from MPLX
Expanding Cash Flow Distributions from MPLX Illustrative Example of Growing GP / IDR Cash Flows with Announced Dropdowns* GP Cash Flows Based on Drop Multiple Illustrative 2017E 2018E 2019E Value ($MM) 6.0x 8.0x 6.0x 8.0x 6.0x 8.0x Cash 10x $ 3,400 $ 3,560 $ 4,830 $ 5,270 $ 6,790 $ 7,480 Flow 20x $
Slide 14: Dropdowns Generate Significant Proceeds to MPC
Dropdowns Generate Significant Proceeds to MPC Illustrative Example of Drop Proceeds Range – Various Amounts of Equity Issued to MPC* $3,500 $3,500 $3,500 $3,500 3,500 3,000 $2,450 $2,450 $1,750 $1,750 2,500 2,000 $1,225 $MM 1,500 1,000 $1,750 $1,750 $600 $1,225 500 0 2016E 2016E | 2017E 2017E | 201
Slide 15: Capital Expenditures & Investments
Capital Expenditures & Investments ($MM) 2016 Revised 3Q 2016 YTD Plan Refining & Marketing (R&M) 1,045 230 682 Midstream R&M(a) 125 37 106 Total Refining & Marketing Segment 1,170 267 788 Speedway 310 71 191 Midstream, including MPLX(a)(b) 1,525 394 1,147 Corporate and Other 95 14 59 Total Capital
Slide 16: Sustaining Capital Returns Since Spin
Sustaining Capital Returns Since Spin Cumulative Return of Capital Since July 1, 2011 12,000 $10.1 B 10,000 8,000 $MM 6,000 4,000 2,000 0 Dividends Share repurchases 16
Slide 17: Earnings
Earnings ($MM unless otherwise noted) 2015 2016 1Q 2Q 3Q 4Q 1Q 2Q 3Q Refining & Marketing segment income* 1,292 1,181 1,434 179 (62) 1,080 306 Speedway segment income** 168 127 243 135 167 193 209 Midstream segment income 90 103 93 94 167 201 258 Corporate and other unallocated items (79) (75) (75)
Slide 18: Reconciliation
Reconciliation Pro Forma Adjusted EBITDA to Pro Forma Net Income Attributable to MPC ($MM) 2015 2016 LTM 4Q 1Q 2Q 3Q Pro Forma Net Income attributable to MPC(a) 225 1 801 145 1,172 Less: Net interest and other financial income (costs) (139) (142) (137) (141) (559) Add: Net income (loss) attributable
Slide 19: Reconciliation
Reconciliation Pro Forma Adjusted EBITDA related to MPLX to Pro Forma MPLX Net Income ($MM) 2015 2016 LTM 4Q 1Q 2Q 3Q Pro Forma MPLX Net Income(a) 104 (37) 20 143 230 Less: Net interest and other financial income (costs) (67) (68) (64) (64) (263) Add: Provision for income taxes - (4) (8) - (12) Depr
Slide 20: Cash Provided from Operations Before Changes in Working Capital Reconciliation
Cash Provided from Operations Before Changes in Working Capital Reconciliation to Net Cash Provided by Operations ($MM) 2015 2016 (For the Quarter) 4Q 1Q 2Q 3Q Net cash provided by operations 808 327 2,263 405 Less changes in working capital: Changes in current receivables 361 325 (601) 67 Changes i
Slide 21: Refining and Marketing Segment Income 3Q 2016 vs. 2Q 2016
Refining and Marketing Segment Income 3Q 2016 vs. 2Q 2016 Variance Analysis 1,400 115 1,200 3 1,080 (58) (6) 1,000 (69) 800 $MM 600 (360) 400 (283) 9 306 200 (125) 0 2Q 2016 *LLS *Sweet/ *LLS/WTI *LLS *Market Lower of Other Direct Other 3Q 2016 6-3-2-1 Sour Diff. Diff. Prompt Structure Cost or Gross
Slide 22: Refining and Marketing Indicative Gross Margin
Refining and Marketing Indicative Gross Margin 3Q 2016 2,500 108 607 52 2,000 (5) 1,906 (287) 1,500 1,431 $MM 1,000 500 (1,249) 306 (351) 0 *LLS *Sweet/ *LLS/WTI *LLS *Market Other R&M Direct Other R&M 6-3-2-1 Sour Diff. Diff. Prompt vs. Structure Gross Gross Operating Segment Crack Delivered Margin
Slide 23: MPLX Distributions and Sales Proceeds to MPC
MPLX Distributions and Sales Proceeds to MPC* 100 $91 $69 $73 $MM 50 $35 $24 $27 $32 $16 $16 $18 $18 $20 $20 $10 $15 0 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 LP Distributions GP Distributions, including IDRs Cash Distribution and Asset 2013 2014 2015 2016 Sales Pr
Slide 24: Marathon
MARATHON ®