Post on 26-Dec-2015
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Forward-Looking Statements This presentation contains forward-looking statements within the meaning of federal securities laws. These forward-looking statements relate to, among other things, MPC's expectations, estimates and projections concerning MPC business and operations. You can identify forward-looking statements by words such as "anticipate," "believe," "estimate," "expect," "forecast," "project," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond MPC’s control and are difficult to predict. Factors that could cause actual results to differ materially from those in the forward-looking statements include: volatility in and/or degradation of market and industry conditions; the availability and pricing of crude oil and other feedstocks; slower growth in domestic and Canadian crude supply; completion of pipeline capacity to areas outside the U.S. Midwest; consumer demand for refined products; transportation logistics; the reliability of processing units and other equipment; our ability to successfully implement growth opportunities; impacts from our repurchases of shares of MPC common stock under our share repurchase authorization, including the timing and amounts of any common stock repurchases; state and federal environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance with the Renewable Fuel Standard; other risk factors inherent to our industry; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended December 31, 2012 filed with the Securities and Exchange Commission (the "SEC"). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPC's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPC's Form 10-K are available on the SEC website, MPC’s website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations Office.
Other Information
EBITDA, cash provided from operations before changes in working capital, adjusted earnings and free cash flow are non-GAAP financial measures provided in this presentation. EBITDA, cash provided from operations before changes in working capital, adjusted earnings and free cash flow reconciliations to the nearest GAAP financial measures are included in the Appendix to this presentation. EBITDA, cash provided from operations before changes in working capital, adjusted earnings and free cash flow are not defined by GAAP and should not be considered in isolation or as an alternative to net income attributable to MPC, net cash provided by (used in) operating, investing and financing activities or other financial measures prepared in accordance with GAAP.
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Highlights
Achieved strong operating performance
Delivered strong Speedway segment performance
Impacted by changing market conditions Weaker USGC fundamentals
Significant volatility in Chicago market
Rapid escalation in price of RINs
Returned nearly $1 billion to shareholders
Announced a 20% increase in dividend to $0.42 per share
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2Q 2013 Earnings*
Adjusted Earnings Adjusted Earnings per Diluted Share
2012 2013$0
$2
$4
$6
$8
$10
$12
1.70 2.17
2.53 1.95
3.31
2.26
$/Sh
are
2Q 2013 2Q 2012
Earnings $593 MM $814 MM
Adjusted Earnings $632 MM $867 MM
Earnings per Diluted Share $1.83 $2.38
Adjusted Earnings per Diluted Share $1.95 $2.53
2012 2013$0
$500$1,000$1,500$2,000$2,500$3,000$3,500$4,000
596 725
867 632
1,129
760
Mill
ions
1Q 2Q 3Q 4Q*References to Earnings refer to Net Income attributable to MPC
3,352 9.79
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Adjusted Earnings*2Q 2013 vs. 2Q 2012 Variance Analysis
2Q 2012 Refining &Marketing
Speedway PipelineTransportation
IncomeTaxes
NoncontrollingInterests
2Q 2013$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000867 (422)
16 8
169 (6) 632
Mill
ions
*References to Earnings refer to Net Income attributable to MPC
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Refining & Marketing Segment Income2Q 2013 vs. 2Q 2012 Variance Analysis
2Q 2012 *LLS6-3-2-1Crack
*Sweet/Sour Diff.
*LLS /WTISpread
*LLS Prompt vs. Delivered
*Market Structure
Direct Operating
Costs
Other Gross
Margin
Other 2Q 2013$0
$500
$1,000
$1,500
$2,000
$2,500
1,325(313)
640 (117)(101) (117)
(6) (381)
(27) 903
Mill
ions
*Based on market indicators using actual volumes
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Speedway Segment Income2Q 2013 vs. 2Q 2012 Variance Analysis
2Q 2012 Light Product Gross Margin
Merchandise Gross Margin
Other 2Q 2013$95
$100
$105
$110
$115
$120
$125
$130
107 12
9(5)
123
Mill
ions
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Pipeline Transportation Segment Income2Q 2013 vs. 2Q 2012 Variance Analysis
2Q 2012 Trans.Revenue
Depreciation OperatingExpenses
2Q 2013$0
$20
$40
$60
$80
50
28(6)
(14)
58
Mill
ions
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Total Company Cash Flow2Q 2013
3/31/13Cash
Balance
Operating Cash Flow
before Working Capital
Working Capital
Cash CapitalExpendituresand Acquisi-
tions
DividendsPaid
ShareRepurchases
Other 6/30/13Cash
Balance
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
4,737
859 (1,295)
(251)(113) (882)
14 3,069
Mill
ions
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Select Balance Sheet/Cash Flow Data
($MM) 2013 2013 2012 20122Q 1Q 4Q 3Q
As of quarter ended:
Cash and cash equivalents 3,069 4,737 4,860 3,387
Total debt 3,410 3,416 3,361 3,349
Equity 12,197 12,412 12,105 11,467
Debt-to-total-capital ratio 22% 22% 22% 23%
Last Twelve Months (LTM) EBITDA 6,318 6,599 6,342 4,942
Debt to LTM EBITDA 0.5x 0.5x 0.5x 0.7x
Quarter to date:
Cash provided by (used in) operations (436) 2,079 2,043 1,833
Cash provided by operations before changes in working capital 859 1,046 1,124 1,320
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Focused Return of Capital to Shareholders
LTM Ended 6/30/13$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$2,700
$542
$2,277Dividends and share re-purchases*
Change in cash and all other
Cash capital expenditures and acquisitions
Mill
ions
* $464 MM dividends plus $1,813 MM share repurchases** Cash flow provided by operations less cash capital expenditures and acquisitions
~81% of Free Cash
Flow**Free CashFlow**$2,819
Net cash provided by operations$5,519
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3Q 2013 OutlookProjected3Q 2013 3Q 2012
Crude throughput 1.65 MMBD 1.19 MMBD
Total throughput 1.85 MMBD 1.35 MMBD
Percent of WTI-priced crude 22% 26%
Refinery direct operating costs in Refining & Marketing gross margin*:
Turnaround and major maintenance $1.15 $1.18
Depreciation & amortization 1.30 1.44
Other manufacturing cost** 4.15 3.16
Total $6.60 $5.78
Corporate and other unallocated items $75 million $74 million
* Per barrel of total throughput
** Includes utilities, labor, routine maintenance and other operating costs
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ReconciliationEarnings to Adjusted Earnings*
($MM) 2012 2013
1Q 2Q 3Q 4Q 1Q 2Q
Earnings 596 814 1,224 755 725 593
Pension settlement expenses** 53 22 5 39
MN asset sale settlement gain** (117)
Adjusted Earnings 596 867 1,129 760 725 632
*References to Earnings refer to Net Income attributable to MPC**Net of tax
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Reconciliation
($MM) 2012 2013(Quarter to date) 3Q 4Q 1Q 2Q
Net cash provided by (used in) operating activities 1,833 2,043 2,079 (436)
Additions to property, plant and equipment (331) (403) (195) (229)
Acquisitions* (27) - (1,493) (22)
Free cash flow 1,475 1,640 391 (687)
Last twelve months free cash flow 2,819
Free Cash Flow to Net Cash Provided from Operations
*Represents cash paid
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Income($MM unless otherwise noted) 2012 2013
1Q 2Q 3Q 4Q 1Q 2Q
Refining & Marketing segment income
Speedway segment income
Pipeline Transportation segment income
943
50
42
1,325
107
50
1,691
76
52
1,139
77
72
1,105
67
51
903
123
58
Corporate and other unallocated items (79) (92) (74) (91) (67) (64)
Pension settlement expenses - (83) (33) (8) - (60)
MN asset sale settlement gain - - 183 - - -
Income from operations 956
(22)
1,307
(17)
1,895
(25)
1,189
(45)
1,156
(48)
960
(45)Net interest and other financing income (costs)
Income before income taxes 934 1,290 1,870 1,144 1,108 915
Income tax provision 338 476 646 385 378 316
Net income 596 814 1,224 759 730 599
Less net income attributable to noncontrolling interests - - - 4 5 6
Net income attributable to MPC 596 814 1,224 755 725 593
Effective tax rate 36% 37% 35% 34% 34% 35%
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EBITDA Reconciliation to Net Income (Loss) Attributable to MPC
($MM) 2011 2012 2013
4Q 1Q 2Q 3Q 4Q 1Q 2Q
Net Income (Loss) attributable to MPC (75) 596 814 1,224 755 725 593
Less: Net interest and other financial income (costs) (22) (22) (17) (25) (45) (48) (45)
Add: Net income attributable to noncontrolling interests - - - - 4 5 6
Add: Provision (benefit) for income taxes (105) 338 476 646 385 378 316
Add: Depreciation and amortization 230 230 236 246 283 287 302
EBITDA 72 1,186 1,543 2,141 1,472 1,443 1,262
Last Twelve Months EBITDA 4,942 6,342 6,599 6,318
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Cash Provided from Operations Before Changes in Working Capital Reconciliation to Cash Provided by (Used in) Operations
($MM) 2012 2013
(Quarter to date) 3Q 4Q 1Q 2Q
Net cash provided by (used in) operations 1,833 2,043 2,079 (436)
Less changes in working capital:
Changes in current receivables (393) 491 (884) (655)
Changes in inventories 142 440 (517) 62
Changes in current accounts payable and accrued liabilities 862 (63) 2,491 (702)
Changes in the fair value of derivative instruments (98) 51 (57) --
Total changes in working capital 513 919 1,033 (1,295)
Cash provided from operations before changes in working capital 1,320 1,124 1,046 859
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Capital Expenditures & Investments*
($MM) 2013 Budget 2Q 2013 2013 YTD
Refining & Marketing 1,016 134 257
Speedway 255 76 112
Pipeline Transportation 184 41 61
Corporate and Other 160 28 52
Subtotal 1,615 279 482
Capitalized Interest 43 4 8
Total Capital Expenditures & Investments 1,658 283 490
*Excludes $1.37 billion in capital expenditures and investments attributable to the acquisition of the Galveston Bay refinery and related assets
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MPC Crude Slate
3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q130%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
21 23 25 26 27 29 30 28 26 25 22 22
4856 52 52 49 48 45 50 52 55
52 48
3121 23 22 24 23 25 22 22 20 26 30
Other Sweet
Other Sour
WTI Based
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Refining & Marketing Indicative Gross Margin – 2Q 2013
*Based on market indicators using actual volumes
*LLS6-3-2-1 Crack
*Sweet/Sour Diff.
*LLS/WTISpread
*LLSPrompt vs. Delivered
*MarketStructure
DirectOperating
Costs
OtherGross
Margin
R&MGross
Margin
Other R&MSegmentIncome
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
1,671
506
364 (179)43 (1,030)
(180)1,195 (292)
903Mill
ions