Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Q3 2012 Earnings Presentation
24 slides from Marathon Petroleum's earnings presentation, Nov 1, 2012
Slide 1: Third Quarter 2012 Earnings Conference Call and Webcast
Third Quarter 2012 Earnings Conference Call and Webcast November 1, 2012
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, MPC’s current expectations, estimates and projections concerning MPC b usiness
Slide 3: CEO Opening Remarks
CEO Opening Remarks Delivered continued strong financial results 3Q 2012 adjusted net income of $1.1 billion Strong balance sheet, $3.4 billion cash Detroit Heavy Oil Upgrade Project (DHOUP) nearly complete Announced agreement to acquire BP’s Texas City refinery and related logistics and m
Slide 4: MPLX Offering Summary
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 expansion capital expen
Slide 5: Creating an Industry-Leading MLP
Creating 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 transportation and storage agreem
Slide 6: 3Q 2012 Earnings
3Q 2012 Earnings 3Q 2012 3Q 2011 Net Income $1,224 MM $1,133 MM Adjusted Net Income $1,129 MM $1,133 MM Net Income per Diluted Share $3.59 $3.16 Adjusted Net Income per Diluted Share $3.31 $3.16 Adjusted Net Income (Loss) Adjusted Net Income (Loss) per Diluted Share $3,000 $8 $6 3.31 $2,000 1,133 1,
Slide 7: Adjusted Net Income 3Q 2012 vs. 3Q 2011 Variance Analysis
Adjusted Net Income 3Q 2012 vs. 3Q 2011 Variance Analysis $1,400 $1,200 (20) (9) 20 1,133 (4) 9 1,129 $1,000 $800 Millions $600 $400 $200 $0 3Q 2011 Refining & Speedway Pipeline Interest & Income Taxes 3Q 2012 Marketing Transportation Other 7
Slide 8: Refining & Marketing Segment Income Variance Analysis
Refining & Marketing Segment Income 3Q 2012 vs. 3Q 2011 Variance Analysis 90 (193) $2,500 709 (59) (15) (118) (428) $2,000 1,711 (6) 1,691 $1,500 Millions $1,000 $500 $0 3Q 2011 *LLS *Sweet/ *LLS /WTI *LLS *Market Direct Other Other 3Q 2012 6-3-2-1 Sour Diff. Spread Prompt vs. Structure Operating Gr
Slide 9: Speedway Segment Income Variance Analysis
Speedway Segment Income 3Q 2012 vs. 3Q 2011 Variance Analysis $100 17 (14) $90 (12) 85 $80 76 $70 $60 Millions $50 $40 $30 $20 $10 $0 3Q 2011 Light Product Gross Merchandise Gross Other 3Q 2012 Margin Margin 9
Slide 10: Pipeline Transportation Segment Income Variance Analysis
Pipeline Transportation Segment Income 3Q 2012 vs. 3Q 2011 Variance Analysis $80 $60 56 (6) 2 52 Millions $40 $20 $0 3Q 2011 Affiliates Other 3Q 2012 10
Slide 11: Total Company Cash Flow
Total Company Cash Flow 3Q 2012 $4,000 (358) 513 $3,500 (119) 136 3,387 1,320 $3,000 $2,500 Millions 1,895 $2,000 $1,500 $1,000 $500 $0 6/30/12 Operating Working Cash Capital Dividends Paid Other 9/30/12 Cash Cash Flow Capital Expenditures Cash Balance before and Balance Working Acquisitions Capital
Slide 12: Select Balance Sheet/Cash Flow Data
Select Balance Sheet/Cash Flow Data ($MM) 2012 2012 2012 2011 3Q 2Q 1Q 4Q As of quarter ended: Cash and cash equivalents 3,387 1,895 2,205 3,079 Total debt 3,349 3,335 3,321 3,307 Stockholders’ equity 11,467 10,326 9,216 9,505 Debt-to-total-capital ratio 23% 24% 26% 26% Last Twelve Months (LTM) EBIT
Slide 13: Focused Return of Capital to Shareholders
Focused Return of Capital to Shareholders $3,500 Net cash provided by operations $3,087 $3,000 Free Cash 77% of Dividends and share $2,500 Flow** $1,230 Free Cash repurchases* $1,590 Flow** Millions $2,000 Change in cash and all $360 other $1,500 $1,000 Cash capital expenditures $1,497 and acquisiti
Slide 14: 4Q 2012 Outlook
4Q 2012 Outlook Projected 4Q 2012 4Q 2011 Crude throughput 1.25 MMBD 1.20 MMBD Total throughput 1.45 MMBD 1.37 MMBD Percent of WTI-priced crude 23% 29% Direct operating costs in Refining & Marketing gross margin*: Planned turnaround and major maintenance $1.00 $0.87 Depreciation & amortization 1.55
Slide 15: Appendix
Marathon mony) Petroleum Corporation Appendix
Slide 16: Reconciliation: Net Income to Adjusted Net Income
Reconciliation Net Income to Adjusted Net Income ($MM) 2011 2012 1Q 2Q 3Q 4Q 1Q 2Q 3Q Net Income 529 802 1,133 (75) 596 814 1,224 Pension settlement expenses* - - - - - 53 22 MN asset sale settlement gain* (117) Income tax law changes - 17 - - - - - Adjusted Net Income 529 819 1,133 (75) 596 867 1,1
Slide 17: Reconciliation: Free Cash Flow
Reconciliation Free Cash Flow to Net Cash Provided from Operations ($MM) 2011 2012 (Quarter to date) 4Q 1Q 2Q 3Q Net cash provided from operating activities 638 347 269 1,833 Additions to property, plant and equipment (341) (309) (326) (331) Acquisitions - - (163) (27) Free cash flow 297 38 (220) 1,
Slide 18: Income
Income ($MM unless otherwise noted) 2011 2012 1Q 2Q 3Q 4Q 1Q 2Q 3Q Refining & Marketing segment income (loss) 802 1,260 1,711 (182) 943 1,325 1,691 Speedway segment income 33 80 85 73 50 107 76 Pipeline Transportation segment income 51 54 56 38 42 50 52 Corporate and other unallocated items (67) (69
Slide 19: EBITDA Reconciliation to Net Income
EBITDA Reconciliation to Net Income ($MM) 2011 2012 1Q 2Q 3Q 4Q 1Q 2Q 3Q Net Income (Loss) 529 802 1,133 (75) 596 814 1,224 Less: Related party net interest and other financial income 17 18 - - - - 1 Less: Net interest and other financial income (costs) (14) (10) (15) (22) (22) (17) (26) Add: Provis
Slide 20: Cash Provided from Operations Before Changes in Working Capital Reconciliation
Cash Provided from Operations Before Changes in Working Capital Reconciliation to Cash Provided from Operations ($MM) 2011 2012 (Quarter to date) 4Q 1Q 2Q 3Q Net cash provided from operations 638 347 269 1,833 Less changes in working capital: Changes in current receivables (547) (406) 1,159 (393) Ch
Slide 21: Capital Expenditures & Investments
Capital Expenditures & Investments ($MM) 2012 Budget 3Q 2012 YTD 2012 Refining & Marketing 745 182 513 Speedway 353 59 257 Pipeline Transportation 230 71 169 Corporate and Other 91 19 47 Subtotal 1,419 331 986 Capitalized Interest 116 29 95 Total Capital Expenditures & Investments 1,535 360 1,081 21
Slide 22: MPC Crude Slate
MPC Crude Slate 100% 90% 21 23 22 24 23 22 22 25 31 80% Other Sweet 70% 60% Other Sour 50% 56 52 52 49 48 45 50 52 48 WTI Based 40% 30% 20% 25 26 27 29 30 28 26 10% 21 23 0% 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 22
Slide 23: Refining & Marketing Indicative Gross Margin – 3Q 2012
Refining & Marketing Indicative Gross Margin – 3Q 2012 $3,000 (715) 497 44 36 $2,500 744 (129) 1,939 (248) $2,000 1,691 Millions $1,500 1,462 $1,000 $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 Crac
Slide 24: Marathon Petroleum Corporation
Marathon mony) Petroleum Corporation