Marathon Petroleum Corporation · NYSE:MPC
Marathon Petroleum — Howard Weil Energy Conference 2012
86 slides from Marathon Petroleum's conference presentation, Mar 26, 2012
Slide 1: Howard Weil Energy Conference
Howard Weil Energy Conference March 26, 2012 1
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, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements relate to, a
Slide 3: Opening Remarks
Opening Remarks • Board authorized $2 billion share repurchase • Evaluating strategic alternatives for midstream assets • Successful 2011 performance • Strong financial position • Detroit Heavy Oil Upgrade Project (DHOUP) on budget and on schedule • 2012 strategic focus of $1.4 billion capital expen
Slide 4: Corporate Priorities
Corporate Priorities Achieve excellence in safety, environmental performance Balance and operations Maintain investment grade credit profile Customers Increase earnings and and cash flow Discipline Flexibility Shareholders Organic investments Selective value accretive acquisitions Optimi
Slide 5: MPC Key Strengths
MPC Key Strengths Balanced Operations Crude Oil Refining Capacity Crude Slate PADD III II Sour Crude Sweet Crude 52% 48% 52% 48% PADD IIIII Sour SweetCrude Crude 1/1/12 2011 Assured Sales of Gasoline Production (Speedway + Brand + Wholesale Contract Sales) ~ 40% Wholesale and Other Sales Assured Sal
Slide 6: MPC Key Strengths
MPC Key Strengths Well Positioned Organic Growth Projects Quality assets Detroit Heavy Oil Upgrade Project (DHOUP) Attractive Midwest market Increasing distillate yield Access to favorable export markets Debottlenecking crude logistics Integration through logistical assets Increasing
Slide 7: Focused and Integrated Operations
Focused and Integrated Operations Flexibility and integration advantage: Integrated six-refinery system One of the largest domestic… Petroleum pipeline networks based on volume moved Terminal operators Asphalt producers Private inland bulk liquid barge fleets Flexibility and Scale to A
Slide 8: Fully Integrated Downstream System
Fully Integrated Downstream System Refining and Marketing Six-plant refining network with 1,193,000 barrels per calendar day of crude oil refining capacity One of the largest wholesale suppliers of gasoline and distillate within our market area One of the largest producers of asphalt in the U.
Slide 9: 2011 Refinery Throughput and Consolidated Sales
2011 Refinery Throughput and Consolidated Sales Crude Saleable Throughput Product Sales 1,177 MBPD 1,602 MBPD 24.5 B GAL Foreign Term Gasoline Speedway 23% 921 12% Distillate Marathon Brand U.S./Canadian 468 17% Term 51% Asphalt Wholesale/Spot 57 58% Spot 26% Other Asphalt & Other 156 13% Other + 21
Slide 10: MPC Relative Refining Position
MPC Relative Refining Position (MBPCD) U.S. Crude Refining Capacity (1) (#) # of U.S. Refineries (1) 3,000 15 2,097 12 12 1,950 2,000 1,840 10 1,410 7 7 1,193 6 6 6 955 5 1,000 843 755 665 5 3 330 1 0 0 BP Tesoro Exxon MPC Citgo Valero Sunoco Shell Conoco Chevron Tesoro BP MPC Valero Exxon Citgo Sun
Slide 11: Impressive Safety and Environmental Record
Impressive Safety and Environmental Record Safety OSHA Recordable Incident Rate Days Away Rate (Employee and Contractor History) (Employee and Contractor History) 2.00 1.00 1.37 0.97 0.90 1.00 0.73 0.80 0.50 0.50 0.45 0.61 0.45 0.12 0.09 0.09 0.13 0.10 0.08 0.12 0.03 0.00 0.00 2003 2004 2005 2006 20
Slide 12: 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 $3.9 billion, excluding capitalized interest, GME P
Slide 13: Garyville: World-class Refinery – Worldwide Options
Garyville: World-class Refinery – Worldwide Options Blue Water Logistics New dock increased capacity by 40% Europe Supply Florida while increasing exports In addition to products, supports opportunity crudes, feedstocks and blendstocks Brown Water Logistics Import heavy Canadian crudes All
Slide 14: Attractive Midwest/PADD II
Attractive Midwest/PADD II Demand exceeds refining capacity in PADD II PADD IV Imported ~17% of petroleum demand PADD V PADD II PADD I into PADD II from PADD III in 2011 Enhances margin opportunities Transportation premium embedded in PADD III PADD II product prices Higher refinery utiliza
Slide 15: Western Canada Crude Supply Forecast
Canada CAPP Western Canada Crude Supply Forecast Annual Growth from 2010 - 2025 MBPD Light Supply 16 6,000 Heavy Supply 154 5,000 4,000 MBPD 3,000 2,000 1,000 0 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 *Oil Sands Heavy includes some volumes of upgraded heavy sour crude oil and bitumen
Slide 16: MPC Well Positioned to Capture Oil Sands Economics
MPC Well Positioned to Capture Oil Sands Economics Advantaged Location Should Lead to Higher Relative Profitability 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.
Slide 17: Detroit Heavy Oil Upgrade Project
Detroit Heavy Oil Upgrade Project Scope – Increases heavy oil capacity an additional 80,000 BPCD; including “difficult to process” Canadian crudes 28,000 BPCD delayed Coker 36,000 BPCD Distillate Hydrotreater (DHT) Crude capacity increases ~15,000 BPCD Strategic Focus – Positioned to capit
Slide 18: Detroit Logistics Options
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 19: Strategy – Maximize Price-Advantaged Crude Oil
Strategy – Maximize “Price-Advantaged” Crude Oil Canada Bakken Shale Utica Shale Cushing WTI Eagle Ford Shale Garyville Opportunity Crude Oils Multiple Opportunities 19
Slide 20: Canton/Midwest Opportunity
Utica Shale Canton/Midwest Opportunity Ohio Department of Natural Resources estimates 1.3 to 5.5 billion barrels of recoverable oil Canton and Catlettsburg refineries are both ideally located MPC has other infrastructure Canton Refinery in this area First-mover advantage Catlettsburg Refiner
Slide 21: Capacity to Receive Crude Oil/Condensate by Truck
Utica Shale Capacity to Receive Crude Oil/Condensate by Truck Canton Canton Available now: Temporary truck rack 1,000 BPD Available end of 2Q 2012: Permanent truck rack 12,000 BPD Truck to Canton Expandable to 24,000 BPD Truck to Catlettsburg Catlettsburg Available now: Permanent truck
Slide 22: Conceptual Planning for Growth
Utica Shale Conceptual Planning for Growth Truck to barge Canton Pipeline gathering Wellsville Steubenville Gathering System to Canton Barge to Catlettsburg MPC Refinery MPC Terminal MPC Pipeline Barge to Woodriver/Patoka Catlettsburg Barge Route Robinson Supply Current Infrastructure Creates Mu
Slide 23: MPC's Logistical Assets vs. Peers
MPC's Logistical Assets vs. Peers Sunoco/ MPC's Midwest Refined Products Logistics System MPC Valero Tesoro Sun Logistics(a) Pipeline Volume 2,215 259 132 1,449 (MBPD) * Pipeline Miles * 3,749 676 868 5,336 Terminals 83 N.R. 18 42 Transports 124 N.R. Operate None for proprietary products trucks Mari
Slide 24: Extensive Retail Network
Extensive Retail Network 82 63 Speedway 81 301 Fourth largest U.S.-owned/ 779 operated c-store chain Speedway 108 237 471 24 ~1,375 stores Brand 439 652 871 60 1 ~2 million customers/day 131 99 138 599 Located in seven states 172 314 128 138 266 1 Marathon brand Independent entrepreneu
Slide 25: Benefits of Retail Integration
Benefits of Retail Integration Ratable sales Optimized operations Refining Pipeline Terminal Biofuels blending base load Supply dislocation flexibility Reduced credit risk (Speedway) Fully Integrated Downstream Business Speedway Refineries Connecting Pipelines Marketing Area Light Pr
Slide 26: Speedway vs. Public Peers - 2011 Light Product
Speedway vs. Public Peers - 2011 300 Light Product Sales Independent Refiners Average 157.1 M Gal/Store/Month 250 200 179.4 Public C-Store 150 Average 96.7 100 50 0 Casey's Couche-Tard Pantry Susser Speedway Valero Murphy Sunoco Tesoro Delek Western Refining 50 Light Product Margin Independent Refin
Slide 27: Speedway vs. Public Peers - 2011 Merchandise
Speedway vs. Public Peers - 2011 Merchandise Sales 200 178.5 Independent Refiners Public C-Store Average 95.4 $M/Store/Month 150 Average 109.7 100 50 0 Casey's Couche-Tard Pantry Susser Speedway Valero Murphy Sunoco Tesoro Delek Western Refining Public C-Store Merchandise Margin 50 43.9 Average 38.5
Slide 28: Speedway Sales and Margin
Speedway Sales and Margin 4 Light Product Volume 600 Light Product Gross Margin 3.22 3.23 3.30 2.94 434 3 398 384 B Gallons $ Millions 400 333 2 200 1 (4.7) 1.0 3.7 (1.2) 13.50 10.30 12.07 13.08 0 0 2008 2009 2010 2011 2008 2009 2010 2011 (Same Store % inside bars) (Cents per gallon inside bars) 4 M
Slide 29: Diversified Income Stream
Diversified Income Stream 2009 Segment Income 2010 Segment Income from Operations from Operations Pipeline Transportation Pipeline Transportation $172 MM Refining & $183 MM 21% Marketing 14% $452 MM 54% Refining & Marketing Speedway $800 MM $293 MM 63% 23% Speedway $212 MM 25% 2011 Segment Income fr
Slide 30: Pre-Tax Adjusted Domestic Operating Income per Barrel
Pre-Tax Adjusted Domestic Operating Income per Barrel of Crude Oil Throughput 15 MPC Group Range 10 $/BBL 5 0 -5 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Preliminary MPC’s Rank 3 3 2 1 2 3 7 2 1 5 3 1 3 1 Companies Ranked* 12 11 11 9 10 10 9 8 8 9 9 8 8 8 *Current compan
Slide 31: Strategic Performance - 2011
Strategic Performance - 2011 Completed successful spin-off from Marathon Oil Corporation Completed financing at separation Established strong balance sheet Increased quarterly dividend Produced strong operating income per barrel of crude throughput Generated significant free cash flow Ex
Slide 32: Strategic Direction - 2012
Strategic Direction - 2012 Complete Detroit Heavy Oil Upgrade Project Continue to optimize Garyville Pursue price advantaged crude projects Initiate organic value-adding projects Grow Speedway and Brand sales volume Consider selective acquisitions to leverage existing portfolio Execute
Slide 33: Appendix
Appendix 33
Slide 34: Net Income – 2011 and 4Q 2011
Net Income – 2011 and 4Q 2011 ($305) MM $1,766 MM 4Q 2011 4Q 2010 2011 2010 Net Income (Loss) ($75) MM $230 MM $2,389 MM $623 MM Net Income (Loss) per Diluted Share ($0.21) $0.64 $6.67 $1.74 Net Income (Loss) Net Income (Loss) per Diluted Share $3,000 4Q 3Q $8 4Q 3Q 2Q 1Q $6 2Q 1Q $2,000 1,133 3.16
Slide 35: Net Income 4Q 2011 vs. 4Q 2010 Variance Analysis
Net Income 4Q 2011 vs. 4Q 2010 Variance Analysis $600 $400 230 (485) $200 Millions (75) $0 236 -$200 8 (14) (50) -$400 -$600 4Q 2010 Refining & Speedway Pipeline Interest & Income Taxes 4Q 2011 Marketing Transportation Other 35
Slide 36: Refining & Marketing Segment Income 4Q Variance
Refining & Marketing Segment Income 4Q 2011 vs. 4Q 2010 Variance Analysis $600 $400 303 (66) (492) 428 $200 (154) $ Millions (93) (182) $0 (6) (120) 18 -$200 -$400 -$600 *Based on market indicators using actual volumes 36
Slide 37: Refining & Marketing Segment Income 2011 vs. 2010
Refining & Marketing Segment Income 2011 vs. 2010 Variance Analysis $4,000 359 (68) 3,591 248 1,685 34 (93) $3,000 $ Millions $2,000 277 349 $1,000 800 $0 *Based on market indicators using actual volumes 37
Slide 38: Speedway Segment Income Variance Analysis
Speedway Segment Income Variance Analysis 4Q 2011 vs. 4Q 2010 2011 vs. 2010 $100 $400 11 (8) 26 (33) $80 14 73 293* (45) 30 65* (9) $300 271 $60 Millions Millions $200 $40 $100 $20 $0 $0 * Includes 166 convenience stores and 67 franchise stores sold as part of the Minnesota refinery and related asse
Slide 39: Pipeline Transportation Segment Income Variance Analysis
Pipeline Transportation Segment Income Variance Analysis 4Q 2011 vs. 4Q 2010 2011 vs. 2010 $80 $300 $60 52 (8) 17 1 199 $200 183 (22) 20 (6) Millions Millions $40 38 $100 $20 $0 $0 39
Slide 40: Total Company Cash Flow
Total Company Cash Flow 4Q 2011 $4,000 657 (344) (223) 121 (89) 3,079 2,957 $3,000 Millions $2,000 $1,000 $0 09/30/11 Operating Working Cash Capital Pension Dividends Paid 12/31/11 Cash Cash Flow Capital Expenditures Contribution Cash Balance before and Balance Working Investments Capital & Pension
Slide 41: Select Balance Sheet/Cash Flow Data
Select Balance Sheet/Cash Flow Data ($MM) 2011 2011 2011 2Q 3Q 4Q As of quarter ended: Total debt 3,274 3,299 3,307 Cash and cash equivalents 1,622 2,957 3,079 Debt minus cash 1,652 342 228 Stockholders’ equity 8,977 10,049 9,505 Cash-adjusted debt to capital ratio 16% 3% 2% Last Twelve Months (LTM)
Slide 42: 1Q 2012 Outlook
1Q 2012 Outlook ($MM) Projected 1Q 2012 1Q 2011 Crude throughput 1.2 MMBPD 1.1 MMBPD Total throughput 1.3 MMBPD 1.3 MMBPD Percent of WTI-priced crude 31% 25% Direct operating costs in Refining & Marketing gross margin*: Planned turnaround and major maintenance $0.95 $ 1.24 Depreciation & amortizatio
Slide 43: Income
Income ($MM unless otherwise noted) 2010 2011 1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total Refining & Marketing segment income (445) 590 352 303 800 802 1,260 1,711 (182) 3,591 (loss) Speedway segment income 40 83 105 65 293 33 80 85 73 271 Pipeline Transportation segment income 44 48 39 52 183 51 54 56 38 1
Slide 44: EBITDA Reconciliation to Net Income
EBITDA Reconciliation to Net Income ($MM) Last 12 months ended Year Ended 12/31/11 9/30/11 6/30/11 2011 2010 2009 Net Income (Loss) 2,389 2,694 1,838 2,389 623 449 Less: Related Party net interest and other financial income 35 48 50 35 24 45 Less: Net interest and other financial income (costs) (61)
Slide 45: Capital Expenditures & Investments
Capital Expenditures & Investments ($MM) 2011 Budget 4Q 2011 2011 2012 Budget Refining & Marketing 975 300 900 745 Speedway 145 43 164 353 Pipeline Transportation 102 52 121 230 Corporate and Other 22 6 24 91 Subtotal 1,244 401 1,209 1,419 Capitalized Interest 136 28 114 116 Total Capital Expenditur
Slide 46: MPC Crude Slate
MPC Crude Slate 100% 90% 21 23 22 24 23 31 80% Other Sweet 70% 60% Other Sour 56 52 52 49 48 50% 48 WTI Based 40% 30% 20% 25 26 27 29 10% 21 23 0% 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 46
Slide 47: Annual Price and Margin Sensitivities
Annual Price and Margin Sensitivities $ Millions (After Tax) LLS 6-3-2-1 Crack Spread* Sensitivity ~$300 (per $1.00/barrel change) Sweet/Sour Differential** Sensitivity ~$150 (per $1.00/barrel change) LLS-WTI Spread*** Sensitivity ~$65 (per $1.00/barrel change) Refined Product Wholesale Margin Sensi
Slide 48: MPC Strong Credit Profile and Liquidity
MPC Strong Credit Profile and Liquidity Historical Financial Summary Financial Policies $MM Year Ended Committed to Investment Grade profile 2011 2010 2009 2008 Rating Current Total Revenues and Other Income 78,759 62,605 45,639 65,258 Agency MPC Rating S&P BBB/A-2 (Stable) EBITDA(1) 4,636 1,952 1
Slide 49: MPC Financing Structure
MPC Financing Structure $3 billion in long-term debt – $750 million 5-year notes, 3.5% – $1 billion 10-year notes, 5.125 % – $1.25 billion 30-year notes, 6.5% $2 billion new 4-year revolving credit facility ~$1 billion 3-year trade receivables securitization facility $3.079 billion balance s
Slide 50: 2012 Capital Spending Allocation
2012 Capital Spending Allocation* Environmental Regulatory Programs 3% Safety and Security 2% 8% Operating/Process Improvements 9% Capital Expansion/Growth/ Replacements Major Projects 12% 55% Other Refining and Transportation 5% Corporate ** 6% *Excludes capitalized interest **Primarily information
Slide 51: U.S. Distillate Exports Continue to Grow
U.S. Distillate Exports Continue to Grow U.S. distillate exports continue U.S. Distillate Export Growth to reach record levels, 900 Central & South America exceeding 1 MMBPD in 800 Mexico 700 October 2011. Netherlands 600 Other Gasoline exports have also 500 MBPD strengthened, exceeding 400 impo
Slide 52: U.S. Net Product Exports
U.S. Net Product Exports 2,000 1,500 EXPORTS ROSE IN NOVEMBER 1,000 BUT IMPORTS INCREASED MBPD 500 MORE - (500) (1,000) (1,500) Includes all petroleum except crude oil and unfinished oils Source: U.S. Energy Information Agency 52
Slide 53: Market View
Market View Key Market Drivers MPC Outlook Economy Slow but double-dip recession unlikely Demand Growth Distillate demand continues to lead Crude Oil Supply Peak oil - not on the horizon Global Refining Capacity Modernization and rationalization Alternative Fuels, CAFE Standards Limited impact until
Slide 54: Refinery Unit and Production Capacity: Garyville
Refining: Refinery Unit and Production Capacity (1) Garyville, Louisiana BPCD Unless Noted Garyville Crude 490,000 Vacuum Distillation 254,000 Coking 82,700 Catalytic Cracking 134,000 Catalytic Reforming 114,500 Catalytic Hydrocracking 88,400 Catalytic Hydrotreating 496,000 Alkylation 27,600 Polymer
Slide 55: Refinery Unit and Production Capacity: Catlettsburg
Refining: Refinery Unit and Production Capacity (1) Catlettsburg, Kentucky BPCD Unless Noted Catlettsburg Crude 233,000 Vacuum Distillation 113,000 Coking — Catalytic Cracking 98,800 Catalytic Reforming 49,900 Catalytic Hydrocracking — Catalytic Hydrotreating 258,000 Alkylation 20,000 Polymerization
Slide 56: Refinery Unit and Production Capacity: Robinson
Refining: Refinery Unit and Production Capacity (1) Robinson, Illinois BPCD Unless Noted Robinson Crude 206,000 Vacuum Distillation 68,000 Coking 27,600 Catalytic Cracking 51,800 Catalytic Reforming 76,000 Catalytic Hydrocracking 27,100 Catalytic Hydrotreating 177,700 Alkylation 11,900 Polymerizatio
Slide 57: Refinery Unit and Production Capacity: Detroit
Refining: Refinery Unit and Production Capacity (1) Detroit, Michigan BPCD Unless Noted Detroit Crude 106,000 Vacuum Distillation 52,300 Coking — Catalytic Cracking 30,900 Catalytic Reforming 20,400 Catalytic Hydrocracking — Catalytic Hydrotreating 100,400 Alkylation 4,800 Polymerization / Dimerizat
Slide 58: Refinery Unit and Production Capacity: Texas City
Refining: Refinery Unit and Production Capacity (1) Texas City, Texas BPCD Unless Noted Texas City Crude 80,000 Vacuum Distillation — Coking — Catalytic Cracking 55,600 Catalytic Reforming 10,500 Catalytic Hydrocracking — Catalytic Hydrotreating — Alkylation 13,800 Polymerization / Dimerization — Ar
Slide 59: Refinery Unit and Production Capacity: Canton
Refining: Refinery Unit and Production Capacity (1) Canton, Ohio BPCD Unless Noted Canton Crude 78,000 Vacuum Distillation 33,300 Coking — Catalytic Cracking 24,700 Catalytic Reforming 20,400 Catalytic Hydrocracking — Catalytic Hydrotreating 86,000 Alkylation 7,100 Polymerization / Dimerization 1,00
Slide 60: Garyville Diesel Projects
Garyville Diesel Projects Scope – Modify Crude Unit, Hydrocracker and Distillate Hydrotreaters Strategic Focus – Increase finished ULSD production from gas oil Investment: ~$250 million over four years Estimated incremental annual EBITDA based on: 2006-10 Prices: ~$170 million 2011 Price
Slide 61: Garyville Gasoline and Diesel Export
Garyville Gasoline and Diesel Export Scope – Add gasoline export tank and expand diesel loading capacity to docks Strategic Focus – Increase export capability Investment: ~$40 million Estimated incremental annual EBITDA based on: 2010-11 Prices: ~$10 million Completion in 2014 Expanding
Slide 62: Catlettsburg No. 5 Vacuum Cut-point Improvement
Catlettsburg No. 5 Vacuum Cut-point Improvement Scope – Modify No. 5 Crude Unit during the 2014 turnaround Strategic Focus – Improve gas oil recovery and reduce purchased feedstocks Investment: ~$100 million over four years Estimated incremental annual EBITDA based on: 2006-10 Prices: ~$30
Slide 63: Robinson Unicracker Revamp
Robinson Unicracker Revamp Scope – Convert Hydrocracker to improve yields Strategic Focus – Take advantage of favorable diesel value over gasoline Investment: ~$75 million over four years Estimated incremental annual EBITDA based on: 2006-10 Prices: ~$20 million 2011 Prices: ~$24 million
Slide 64: Distillate Production Profile
Distillate Production Profile 500 40% 450 38% 400 36% Distillate production MBPCD Distillate volume % of crude 350 34% 300 32% 250 30% 200 28% 150 26% 100 24% 50 22% 0 20% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 est est est est MPC Distillate MBCD MPC Distillate % U.S. Avg %
Slide 65: Diesel Production Profile
Diesel Production Profile (Excludes Kerosene and Jet Fuel) 500 40% 450 38% 400 36% Diesel volume % of crude Diesel production MBPCD 350 34% 300 32% 250 30% 200 28% 150 26% 100 24% 50 22% 0 20% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 est est est est MPC Diesel MBCD MPC Diesel
Slide 66: Lower 48 States Shale Plays
Lower 48 States Shale Plays Patoka Cushing MPC Refineries 66
Slide 67: Canadian Crude Shipment Capacity
Canadian Crude Shipment Capacity Edmonton Trans Hardisty Mountain Burnaby Anacortes Regina Cromer Enbridge PL Clearbrook Superior Montreal Portland Sarnia Salt Lake City Casper Flanagan Chicago Chicap Mustang Steele City MBPD Pipeline Gulf Coast Access Patoka 520-590 Keystone Wood River Cushing 700-
Slide 68: MPC Tactical Options: Keystone Pipeline
MPC Tactical Options Canada Keystone Pipeline Key Facts Owner – TransCanada Origin – Hardisty Destination – Wood River, Patoka, Illinois and Cushing, Oklahoma Diameter – 30” to Patoka; 36” from Steele City to Cushing Distance – 2,148 Miles Capital – $5.2 Billion Current capacity – 590
Slide 69: MPC Tactical Options: Keystone XL Pipeline
MPC Tactical Options Canada Keystone XL Pipeline Key Facts Owner – TransCanada Origin – Hardisty Destination – Port Arthur/Houston Diameter – 36” Distance – 1,980 Miles Capital – $7.8 Billion Status – ? Estimated completion Cushing to USGC – End 2013 Hardisty to Steele City – ?
Slide 70: Cushing Fundamentals
Cushing Fundamentals What May Impact the Brent/WTI Spread KEYSTONE 590 Seaway Reversal Initial Capacity: ~150 MBPD June 1, 2012 Increase to: 400 MBPD 2Q 2013 KEYSTONE Keystone XL - Cushing to Gulf Coast 700 Estimated Completion: End 2013 Capacity: 700 MBPD CUSHING Enbridge Gulf Coast A
Slide 71: Indicative Rail Costs Bakken to East Coast
Bakken Shale Indicative Rail Costs Bakken to East Coast Bakken Indicative Rail Costs ($/BBL) Gathering 2.25 Truck Transport 3.00 Railcar Loading 1.50 Rail Transportation 7.50 Railcar Lease 1.00 Railcar Unloading 1.00 Barge Loading .75 Barge Transportation 1.00 Total 18.00 Source: MPC Estimate Rail C
Slide 72: Indicative Rail Costs Bakken to St. James
Bakken Shale Indicative Rail Costs Bakken to St. James Bakken Indicative Rail Costs ($/BBL) Gathering 2.25 Truck Transport 3.00 Railcar Loading 1.50 Rail Transportation 7.50 Railcar Lease 1.00 St. James Railcar Unloading 1.50 Total 16.75 Source: MPC Estimate 72
Slide 73: Indicative Barge Costs - South Texas to East Coast
Eagle Ford Shale Indicative Barge Costs - South Texas to East Coast Indicative Barge Costs ($/BBL) Trucking to Pipeline Hub 3.00 Pipeline to Houston 1.50 Barge Loading Fee .75 Barge Transportation 10.00 Total 15.25 Source: MPC Estimate Barge Cost to East Coast is Expensive 73
Slide 74: Midwest Refineries' Opportunity
Bakken Shale Midwest Refineries’ Opportunity Williston Basin Production: ~610 MBPD Williston Basin North Dakota: ~465 MBPD 2010 Year-end: 344 MBPD Canada 2009 Year-end: 242 MBPD 2008 Year-end: 202 MBPD 2005 Year-end: 104 MBPD South Dakota: ~5 MBPD Canada: ~75 MBPD North Dakota Mont
Slide 75: Texas City Refinery Opportunity
Eagle Ford Shale Texas City 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 being built as well to make it a “water borne” crude to capture Brent / LLS pricing as opposed t
Slide 76: Garyville Opportunity Crudes
Garyville Opportunity Crudes NEW CRUDES PROCESSED IN 2011 Russia API Vac Canada Crude Origin Gravity Sulfur TAN Resid % Access Western Canada 21.8 4.04 2.3 38.3 Blend USA Iraq Kuwait Albian Muskeg Canada 21.6 3.81 1.6 36.0 Heavy Chad Frade Brazil 19.9 0.72 1.4 27.3 Venezuela Mexico Olende Gabon 20.7
Slide 77: Refined Product and Crude Spreads
Refined Product and Crude Spreads $16.00 $8.00 $14.00 ULSD-LLS (left scale) $7.00 $12.00 LLS-Mars (right scale) $6.00 $10.00 $5.00 ULSD-LLS LLS-Mars $8.00 $4.00 $6.00 $3.00 $4.00 $2.00 SPR SALE DISTORTED CRUDE SPREADS $2.00 $1.00 $0.00 $0.00 Q1-2010 Q2-2010 Q3-2010 Q4-2010 Q1-2011 Q2-2011 Q3-2011 Q4
Slide 78: Midstream Integration and Flexibility
Midstream Integration and Flexibility Pipeline and barge logistics Focused on optimal refinery crude supply and product placement Destination choice in product markets Efficiency, flexibility, speed Terminal network Critical mass in key markets Key to E-10 expansion Speedway transpor
Slide 79: Convenience Store Industry Profile
Convenience Store Industry Profile 13% 146,341 c-stores in the U.S. (117,297 sell fuel) 5% Midwest - 22,563 c-stores 6% Southeast - 36,273 c-stores 13% 63% Highly fragmented 2010 total sales - $575.6 billion Average monthly sales / store - $395,623 2010 pre-tax profit - $6.5 billion St
Slide 80: Speedy Rewards Loyalty Program Increasing Membership
Speedy Rewards Loyalty Program 4 Increasing Membership Active Members (MM) 3 2 1 2005 2006 2007 2008 2009 2010 2011 Industry-leading loyalty program Customers earn points on every purchase Customers redeem points for free merchandise and fuel discounts Over 3 million active Speedy Rewards me
Slide 81: Speedway Brand Value
Speedway Brand Value $7.0 $6.0 $6.0 Record contributions to $5.0 $5.6 $4.0 Millions $4.5 Children’s Miracle $3.0 Network $2.0 $3.0 $1.0 $1.6 $0.0 2007 2008 2009 2010 2011 Top Retail Gasoline Brand in the U.S. for past 3 consecutive years. EquiTrend, Harris Interactive Convenience Retailing Award for
Slide 82: Brand Overview
Brand Overview 5,000 Light Product Sales Consistent Growth Vehicle 4,000 Millions of Gallons 3,000 163 million net new gallons in 2011 2,000 2011 gasoline sales volume up 3.6% 1,000 2011 distillate sales volume up 6.5% 0 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 82
Slide 83: Pipeline Transportation Segment Revenue from Third Parties
Pipeline Transportation Segment Revenue Generated from Third Parties 100% 80% 60% 40% 20% 16% 10% 12% 12% 12% 0% 2007 2008 2009 2010 2011 83
Slide 84: Experienced Board of Directors
Experienced Board of Directors Name Title Evan Bayh Former Senator from and Governor of Indiana David A. Daberko* Former Chairman and CEO – National City Corporation William L. Davis* Former Chairman and CEO – RR Donnelly & Co Gary R. Heminger President and CEO – MPC Donna A. James Corporate Directo
Slide 85: Experienced Management Team
Experienced Management Team Experienced Team with Extensive Industry Experience Years of Name Service* Title Gary R. Heminger 37 President and Chief Executive Officer Pamela K. M. Beall 16 Vice President – Investor Relations and Gov. & Public Affairs Richard D. Bedell 32 Senior Vice President – Refi
Slide 86: 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
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