Third Quarter 2020 Conference Call
November 2, 2020
Forward Looking Statements
This presentation contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation (MPC). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations, strategy and value creation plans of MPC. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, these statements are accompanied by cautionary language identifying important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements. You can identify forward-looking statements by words such as "anticipate," "believe," "commitment," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "project," "proposition," "prospective," "pursue," "seek," "should," "strategy," "target," "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 the company's control and are difficult to predict. Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include but are not limited to: the effects of the recent outbreak of COVID-19, including any related government policies and actions, and the adverse impact thereof on our business, financial condition, results of operations and cash flows, including, but not limited to, our growth, operating costs, labor availability, logistical capabilities, customer demand for our products and industry demand generally, margins, inventory value, cash position, taxes, the price of our securities and trading markets with respect thereto, our ability to access capital markets, and the global economy and financial markets generally; the effects of the recent outbreak of COVID-19, and the current economic environment generally, on our working capital, cash flows and liquidity, which can be significantly affected by decreases in commodity prices; our ability to reduce capital and operating expenses; with respect to the proposed sale of Speedway, the ability to successfully complete the sale within the expected timeframe, on the expected terms, or at all, based on numerous factors, including the failure to satisfy any of the conditions to the consummation of the proposed transaction (including obtaining certain governmental or regulatory approvals on the proposed terms and schedule), the occurrence of any event, change or other circumstance that could give rise to the termination of the proposed transaction; MPC's ability to utilize the proceeds as anticipated; the risk that the dissynergy costs, costs of restructuring transactions and other costs incurred in connection with the proposed transaction will exceed our estimates; and our ability to capture value and realize the other expected benefits from the associated ongoing supply relationship following consummation of the proposed sale; the risk that the cost savings and any other synergies from our acquisition of Andeavor and the acquisition of Andeavor Logistics LP (ANDX) by MPLX LP (MPLX) may not be fully realized or may take longer to realize than expected, including whether the ANDX transaction will be accretive within the expected timeframe or at all; disruption from the Andeavor or ANDX transactions making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of Andeavor or ANDX, respectively; the risk of further impairments; the ability to complete any divestitures on commercially reasonable terms and/or within the expected timeframe, and the effects of any such divestitures on the business, financial condition, results of operations and cash flows; future levels of revenues, refining and marketing margins, operating costs, gasoline and distillate margins, merchandise margins, income from operations, net income and earnings per share; the regional, national and worldwide availability and pricing of refined products, crude oil, natural gas, NGLs and other feedstocks; consumer demand for refined products; the ability to manage disruptions in credit markets or changes to credit ratings; future levels of capital, environmental and maintenance expenditures; general and administrative and other expenses; the success or timing of completion of ongoing or anticipated capital or maintenance projects, including the potential conversion of the Martinez Refinery to a renewable diesel facility; the receipt of relevant third party and/or regulatory approvals; the reliability of processing units and other equipment; the successful realization of business strategies, growth opportunities and expected investment; share repurchase authorizations, including the timing and amounts of such repurchases; the adequacy of capital resources and liquidity, including availability, timing and amounts of free cash flow necessary to execute business plans, complete announced capital projects and to effect any share repurchases or to maintain or increase the dividend; the effect of restructuring or reorganization of business components, including those undertaken in connection with the Speedway sale and workforce reduction; the potential effects of judicial or other proceedings, including remedial actions involving removal and reclamation obligations under environmental regulations, on the business, financial condition, results of operations and cash flows; continued or further volatility in and/or degradation of general economic, market, industry or business conditions as a result of the COVID-19 pandemic (including any related government policies and actions), other infectious disease outbreaks, natural hazards, extreme weather events or otherwise; general economic, political or regulatory developments, including changes in governmental policies relating to refined petroleum products, crude oil, natural gas or NGLs, regulation or taxation and other economic and political developments (including those caused by public health issues and outbreaks); non-payment or non-performance by our producer and other customers; compliance with federal and state environmental, economic, health and safety, energy and other policies, permitting and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or enforcement actions initiated thereunder; the effects of actions of third parties such as competitors, activist investors or federal, foreign, state or local regulatory authorities or plaintiffs in litigation; the impact of adverse market conditions or other similar risks to those identified herein affecting MPLX; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2019, and in Forms 10-Q and other filings, filed with the SEC. Copies of MPC's Form 10-K, Forms 10-Q and other SEC filings are available on the SEC's website, MPC's website athttps://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office. Copies of MPLX's Annual Report on Form 10-K for the year ended December 31, 2019, Forms 10-Q and other SEC filings are available on the SEC's website, MPLX's website athttp://ir.mplx.comor by contacting MPLX's Investor Relations office.
We have based our forward-looking statements on our current expectations, estimates and projections about our business and industry. We caution that these statements are not guarantees of future performance and you should not rely unduly on them, as they involve risks, uncertainties, and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. While our management considers these assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Accordingly, our actual results may differ materially from the future performance that we have expressed or forecast in our forward-looking statements. Any forward-looking statements speak only as of the date of the applicable communication and we undertake no obligation to update any forward-looking statements except to the extent required by applicable law.
Non-GAAP Financial Measures
Adjusted earnings, EBITDA, cash provided from operations before changes in working capital, Refining and Marketing margin and Retail total margin are non-GAAP financial measures provided in this presentation. Reconciliations to the nearest GAAP financial measures are included in the Appendix to this presentation. These non-GAAP financial measures 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, Refining and Marketing income from operations, Speedway income from operations or other financial measures prepared in accordance with GAAP.
Achieve best-in-class cost, operating, and financial performance
Focus on contribution of each asset to shareholder returnLeverage advantaged raw material selection
Enhance commercial skills and technology improvementsStrict capital discipline
Lowering costs and driving efficiency
Business Update
Progressing Speedway sale
Growing renewables business
Dickinson starting up
Advancing Martinez conversion
Focusing on cost reductions
Positioning the company for long-term success and through-cycle resiliency
Adjusted Loss per Share ($/share) (a)
Adjusted EBITDA ($MM) (b)
$(1.00)
$1,006
$MM | Excluded from Adj. EBITDA & Adj. EPS |
Restructuring expense | $(348) |
Impairments | $(433) |
LIFO liquidation | $(256) |
LCM inventory valuation adjustment | $530 |
Transaction-related costs | $(18) |
Total Adjustments: | $(525) |
(a) Based on weighted average diluted shares (b) Excludes turnaround costs of $234 million
Speedway required to be reported as Discontinued Operations
R&M segment now includes retained Direct Dealer business
Refining & Marketing
(1,024)
Speedway to Discontinued Operations
(151) (7)
- 528
Total
653
(a) Direct Dealer EBITDA excludes $30 million of depreciation and amortization
Speedway Sale-Related Effects | |
2Q20 | 3Q20 |
(756) 105
133 (a)
(7)
492
1,006
626
618
Reconciliation to Net Loss
Adjusted EBITDA
1,200
$Millions
-400
-800
800
400
0
-399
-1,200
2Q 2020 Adj. EBITDARefining & Marketing
(a)MidstreamCorporate
(b)
Speedway Discontinued Operations
3Q 2020 Adj. EBITDAAdjustmentsTurnaround and D&AInterest,
Taxes, and Noncontrolling
Interests
3Q 2020 Net Loss
(a) Recast to reflect Direct Dealer second quarter 2020 and third quarter 2020 EBITDA of $105 million and $133 million, respectively. (b) Recast to reflect third quarter 2020 and second quarter 2020 corporate costs of $7 million and $7 million, respectively, that are no longer allocated to Speedway under discontinued operations accounting.
Refining & Marketing
3Q 2020 vs. 2Q 2020
R&M Adjusted EBITDA includes Direct Dealer results ($105 MM in 2Q, $133 MM in 3Q)
84% utilization during the quarter (excluding idled facilities)
While improving, crack spreads remained weak across all regions
Continued execution on
cost control
0
$Millions
-200
-400
-600
-800
-919
-1,000
2Q 2020 Adj, EBITDA
USGC MarginMid-Con MarginWest Coast
MarginOperating
Costs (a)Distribution
Costs (b)Other
3Q 2020 Adj, EBITDA
(a) Includes refining operating and maintenance costs. Excludes refining planned turnaround and D&A expense. (b) Excludes D&A expense
Through-cycle EBITDA stability
Continued progress on reducing forecasted operating expenses
Fee-based with volume protections across businesses
Continued progress on organic growth projects
1,400
50
1,295
$Millions
1,200
1,000
800 600 400 200
0
2Q 2020 Adj. EBITDA
MPLX
Other Midstream
3Q 2020 Adj. EBITDA
Fuel volumes recovering from 2Q lows
Fuel margins of ~30 cpg
Year-over-year growth in same store merchandise sales
600
$Millions
400
200
0
2Q 2020 Adj. EBITDA
FuelMerchandiseOperating Expense
(a)Other
3Q 2020 Adj. EBITDA
(b)
(a)
(a) Speedway 2Q EBITDA recast to reflect corporate costs of $7 million that are no longer allocable to Speedway under discontinued operations accounting. Excludes transaction-related costs and LCM inventory valuation adjustment. Direct Dealer retained by MPC is reported within the R&M segment. (b) Reflects operating, selling, general and administrative expenses.
Discontinued Operations
Continuing Operations
2,000
1,165
$Millions
1,500
1,000
500
1,091
0
-321
6/30/2020 Cash Balance
(a)
Adj Operating
CashFlow before Working
Capital
(b)Adjustments
(b)Working Capital
(b)Capital Expenditures, Investments
Net Debt
716 98
Discontinued Operations
Return of
Capital to Shareholders
(c)
Net Distributions to Noncontrolling
InterestsOtherDiscontinued
Operations Operating Cash
FlowDiscontinued Operations
Capital Expenditures, Investments
9/30/2020 Cash Balance
(a)
(a) Includes Speedway's cash and cash equivalents of $126 million at June 30, 2020, and $98 million at September 30, 2020, which is classified as assets held for sale on MPC's consolidated balance sheets. (b) Adjustments to operating cash flow before working capital include the portion of restructuring expenses expected to be settled in cash of $297 MM These charges resulted in equal and offsetting favorable working capital changes in the quarter. (c) $378 MM of dividends
Note: Excludes restricted cash
Corporate & other unallocated items estimated at ~$185 MM for 4Q20 (e)
Speedway Discontinued Operations | |
Light Product Sales Volume (MMgal) | 1,450 - 1,650 |
Merchandise Sales ($MM) | $1,550 - $1,650 |
(a) Region throughput data includes inter-refinery transfers, but MPC totals exclude transfers (b) Includes refining major maintenance and operating costs. Excludes refining planned turnaround and D&A expense. (c) Excludes D&A expense (d) Includes D&A expense associated with distribution assets and Direct Dealer business. (e) Corporate includes corporate costs no longer allocable to Speedway.
Environment
Recognized for Energy Efficiency with EPA Energy
Star Partner Awards
Targeting 30% GHG emissions intensity reduction by 2030
Investing in Renewables
Governance
Independent & Diverse
Board of Directors
Transparency in reporting:
TCFD, SASB, GRI, CDP
Sustainability Performance linked to compensation
Appendix
Lower Carbon
Intensity
Increase Renewable Fuels Production and Energy Use
Highlights
2030 GHG Intensity Reduction target New 2025 Methane Intensity Reduction target
Further reducing water intensity
Renewables-focused production at Dickinson, Cincinnati,
The Anderson's Ethanol JV, and potentially Martinez
Debt-to-LTM Adj. EBITDA (a)
2.0x
Senior Notes Maturities - Next 10 Years (b)
2.0
$B
$ Millions (unless otherwise noted) | YE18 | YE19 | 3Q20 |
Total Debt (excl. MPLX) | 9,114 | 9,125 | 11,648 |
LTM Adj. EBITDA (excl. MPLX) | 6,893 | 5,506 | 840 |
LTM MPLX Distributions to MPC | 1,590 | 1,823 | 1,787 |
Debt-to-Capital (excl. MPLX) | 22% | 23% | 37% |
MPC Debt-to-LTM Adj. EBITDA (a) | 1.1x | 1.2x | 4.5x |
1.0
Announced redemption of $1.1 billion of notes during 4Q20
0.0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
- $475 million of notes due in 2022 were paid-off on October 1, 2020
- $650 million of notes due in 2020 will be paid-off on November 15, 2020
(a) MPC Debt-to-LTM Adjusted EBITDA calculated using face value of total debt and LTM adjusted pro forma EBITDA, including MPLX distributions to MPC. Excludes MPLX debt and EBITDA; refer to appendix for reconciliation
(b) Senior Notes Maturities as of 9/30/2020
Total Debt
Total Equity(b)
31,997 30,382
20,349 11,648
10,404 19,978
Debt-to-Capital Ratio(c)
Cash and cash equivalents
51% 716
- 28
37% 688
Debt to LTM Adjusted EBITDA(d)
5.6x - 13.9x
Debt to LTM Adjusted EBITDA, w/ MPLX LP distributions(d)
(a) Adjustments made to exclude MPLX cash, debt (all non-recourse), and the public portions of MPLX equity
(b) Includes MPLX mezzanine equity of $968 million
(c) Debt-to-Capital Ratio calculated as Total Debt divided by the sum of Total Debt plus Total Equity
(d) Calculated using face value of total debt and LTM adjusted EBITDA
N/A - 4.5x
2,000
286
1,931
$Millions
-1,000
-2,000
1,000
0
Blended Crack Spread
-690
-1,569
Sweet Differential
(a)Sour Differential
(a)Market StructureOther MarginR&M Margin, excluding LIFO
Liquidation
(a)LIFO Liquidation
ChargeOperating
Costs (b)Distribution
Costs (c)Other
Turnaround and D&AR&M Segment
Loss
Charge
(a) Based on market indicators using actual volumes (b) Includes refining major maintenance and operating costs. Excludes refining planned turnaround and D&A expense. (c) Excludes D&A expense.
Refining & Marketing Margins - Market vs. Realized
Total system capture of 117%, key factors included:
Direct Dealer business contributed 8% to R&M margin capture
Crude timing impacts
Favorable pricing of non-transportation fuels relative to index
1,500
374
$Millions
1,200
1,309
900
600
300
420
0
Third Party Fees and Other
MPLX Fees
MPLX Fuels Distribution and
Refinery Logistics Fees
3Q 2020 Distribution Costs
Total distribution fees of $889 million paid to MPLX and $445 million returned to MPC through distributions paid by MPLX(a)
(a) Based on distributions declared for 3Q 2020
-500
Volume | 65 |
Product | - 99 |
Crude | 582 |
-1,000
341
548
$Millions
-146
6
-1,500
-94
-256
-1,544
-93
-30
-301
-1,569
-2,000
-2,500
2Q 2020 Segment
Loss (a)Blended Crack Spread
(b)Sour Differential
(b)Sweet Differential
(b)Market StructureOther MarginLIFO Liquidation
ChargeOperating
Costs (c)Distribution
Costs (d)
Turnaround, D&A and Other
3Q 2020 Segment
Loss
(a) R&M 2Q segment loss recast to include Direct Dealer results. (b) Based on market indicators using actual volumes (c) Includes refining major maintenance and operating costs. Excludes refining planned turnaround and D&A expense. (d) Excludes D&A expense.
Income Summary for Operations
($MM unless otherwise noted) | 2019 1Q 2Q 3Q 4Q | 2020 1Q 2Q 3Q |
Refining & Marketing segment income (loss) (a) Midstream segment income Corporate (b) Income (loss) from continuing operations before items not allocated to segments Items not allocated to segments: Equity method investment restructuring gains Transaction-related costs Litigation Impairments Restructuring expenses LCM inventory valuation adjustment Income (loss) from continuing operations Net interest and other financing costs Income (loss) from continuing operations before income taxes Provision (benefit) for income taxes Income (loss) from continuing operations, net of tax Income from discontinued operations, net of tax Net income (loss) Less net income (loss) attributable to: Redeemable noncontrolling interest Noncontrolling interests Net income (loss) attributable to MPC Effective tax rate on continuing operations (c) | (303) 908 1,064 878 989 1,106 919 889 (195) (188) (206) (244) | (497) (1,544) (1,569) 905 869 960 (233) (195) (197) |
410 1,754 1,702 1,751 207 - - 52 (91) (34) (22) (6) - (22) - - - - - -- - - - - (1,239) - - | 175 (870) (806) - (8) -- - -- - - (9,137) (25) (433) - - (348) (3,185) 1,470 530 | |
526 302 1,698 318 1,680 558 312 297 | (12,155) 332 575 341 (1,057) 359 | |
224 74 1,380 271 1,368 261 255 184 | (12,487) (1,951) 234 150 (1,416) 304 | |
150 1,109 1,113 77 | (10,536) 84 (1,112) | |
109 258 254 185 | 318 192 371 | |
259 1,367 1,367 262 | (10,218) 276 (741) | |
20 246 21 240 20 252 20 (201) | 20 21 20 (1,004) 246 257 | |
(7) 1,106 1,095 443 | (9,234) 9 (1,018) | |
33% 20% 19% 70% | 16% 64% 21% |
(a) Effective in the third quarter of 2020,
R&M historical results have been recast and
now include the results of the retained
direct dealer business.
(b) Effective in the third quarter of 2020,
Corporate historical results have been
recast to reflect corporate costs that are
not allocable to Speedway under
discontinued operations accounting
requirements.
(c) 4Q19 tax rate impacted by midstream
impairments, net of the portion attributable
to noncontrolling interests, and the
biodiesel tax credit which are largely non-
taxable items. 2Q20 tax rate impacted by
changes in our estimated annual effective
rate applied to income for the year to date
interim period.
($MM)
Net income (loss) attributable to MPC
Pre-tax adjustments:
Transaction-related costs
Purchase Accounting - depreciation and amortization (a)
Impairments
Restructuring expenses LIFO liquidation charge
LCM inventory valuation adjustment
Tax impact of adjustments (b)
NCI impact of adjustments
Adjusted net income (loss) attributable to MPC
Diluted income (loss) per share
Adjusted diluted income (loss) per share (c)
(a) Reflects the cumulative effects related to a measurement period adjustment arising of the finalization of purchase accounting.
(b) We generally tax effect taxable adjustments to reported earnings using a combined federal and state statutory rate of approximately 24 percent.
(c) Weighted-average diluted shares outstanding and income allocated to participating securities, if applicable, in the adjusted earnings per share calculation are the same as those used in the GAAP diluted earnings per share calculation except for the three months ended June 30, 2020 which assumes no dilution and uses basic shares as a result of an adjusted loss attributable to MPC.
($MM) | 4Q19 | 1Q20 | 3Q20 | LTM | |
Net Income (loss) attributable to MPC | 443 | (9,234) | 9 | (1,018) | (9,800) |
Add: Net interest and other financial costs | 302 | 338 | 345 | 364 | 1,349 |
Net income (loss) attributable to noncontrolling interests | (181) | (984) | 267 | 277 | (621) |
Provision (benefit) for income taxes | 277 | (1,937) | 360 | (242) | (1,542) |
Depreciation and amortization | 978 | 962 | 935 | 866 | 3,741 |
Refining planned turnaround costs | 153 | 329 | 162 | 234 | 878 |
Transaction-related costs | 13 | 35 | 30 | 18 | 96 |
Equity method investment restructuring gains | (52) | - | - | - | (52) |
Impairments | 1,239 | 9,137 | 25 | 433 | 10,834 |
Restructuring | - | - | - | 348 | 348 |
LIFO liquidation charge | - | - | - | 256 | 256 |
LCM inventory valuation adjustment | - | 3,220 | (1,480) | (530) | 1,210 |
Adjusted EBITDA | 3,172 | 1,866 | 653 | 1,006 | 6,697 |
Credit Metric Adjustments: | |||||
Less: Refining planned turnaround costs | (878) | ||||
LTM Adjusted EBITDA | 5,819 | ||||
Less: LTM Adjusted EBITDA related to MPLX | (4,979) | ||||
LTM Adjusted EBITDA excluding MPLX | 840 | ||||
Add: Distributions to MPC from MPLX | 1,787 | ||||
2,627 |
LTM Adjusted EBITDA excluding MPLX EBITDA, including LP distributions to MPC
2Q20
($MM) |
Net Income (loss) attributable to MPC |
Add: Net interest and other financial costs |
Net income attributable to noncontrolling interests |
Provision for income taxes |
Depreciation and amortization |
EBITDA |
Refining planned turnaround costs (a) |
Purchase accounting inventory related effects |
Transaction related costs |
Litigation |
Equity method investment restructuring gains |
Minnesota Assets sale settlement gain |
Impairment expense |
LCM inventory valuation adjustment |
Adjusted EBITDA |
Pro Forma EBITDA related to ANDV |
Adjusted Pro Forma EBITDA |
Less: Refining planned turnaround costs |
Adjusted Pro Forma EBITDA |
MPLX income from operations (b) |
Depreciation and amortization (b) |
MPLX EBITDA (b) |
EBITDA excluding MPLX |
MLP Distributions |
Adjusted EBITDA excluding MPLX, including distributions from MPC |
Debt (face value): MPC Corp |
MPLX/ANDX |
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |
2,389 | 3,389 | 2,112 | 2,524 | 2,852 | 1,174 | 3,432 | 2,780 | 2,637 | |
26 | 109 | 179 | 216 | 334 | 564 | 674 | 1,003 | 1,247 | |
- | 4 | 21 | 31 | 16 | 39 | 372 | 826 | 618 | |
1,330 | 1,845 | 1,113 | 1,280 | 1,506 | 609 | (460) | 962 | 1,074 | |
891 | 995 | 1,220 | 1,326 | 1,502 | 2,001 | 2,114 | 2,490 | 3,638 | |
4,636 | 6,342 | 4,645 | 5,377 | 6,210 | 4,387 | 6,132 | 8,061 | 9,214 | |
- | - | - | - | 290 | 624 | 501 | 664 | 740 | |
- | - | - | - | - | - | - | 759 | - | |
- | - | - | - | - | - | - | 197 | 160 | |
- | - | - | - | - | - | 29 | - | 22 | |
- | - | - | - | - | - | - | - | (259) | |
- | (183) | - | - | - | - | - | - | - | |
- | - | - | - | 144 | 486 | (23) | (9) | 1,239 | |
- | - | - | - | 370 | (370) | - | - | - | |
4,636 | 6,159 | 4,645 | 5,377 | 7,014 | 5,127 | 6,639 | 9,672 | 11,116 | |
- | - | - | - | - | - | - | 2,356 | - | |
4,636 | 6,159 | 4,645 | 5,377 | 7,014 | 5,127 | 6,639 | 12,028 | 11,116 | |
- | - | - | - | (290) | (624) | (501) | (664) | (740) | |
4,636 | 6,159 | 4,645 | 5,377 | 6,724 | 4,503 | 6,138 | 11,364 | 10,376 | |
- | 204 | 213 | 245 | 381 | 902 | 1,191 | 3,336 | 3,616 | |
- | 60 | 70 | 75 | 129 | 591 | 683 | 1,135 | 1,254 | |
- | 264 | 283 | 320 | 510 | 1,493 | 1,874 | 4,471 | 4,870 | |
4,636 | 5,895 | 4,362 | 5,057 | 6,214 | 3,010 | 4,264 | 6,893 | 5,506 | |
- | - | 57 | 76 | 118 | 332 | 498 | 1,590 | 1,823 | |
4,636 | 5,895 | 4,419 | 5,133 | 6,332 | 3,342 | 4,762 | 8,483 | 7,329 | |
3,299 | 3,355 | 3,395 | 6,657 | 12,475 | 11,069 | 13,418 | 27,980 | 29,282 | |
- | (11) | (11) | (645) | (5,736) | (4,858) | (7,362) | (18,866) | (20,119) | |
Net of MPLX | 3,299 | 3,344 | 3,384 | 6,012 | 6,739 | 6,211 | 6,056 | 9,114 | 9,163 |
Debt to adjusted EBITDA excluding MPLX, including LP distributions to MPC | 0.7 | 0.6 | 0.8 | 1.2 | 1.1 | 1.8 | 1.3 | 1.1 | 1.2 |
(a) Refining & Marketing segment supplemental reporting revised in the second quarter of 2019, including a separate category for refinery planned turnaround costs. Data not available prior to 2015. (b) Includes pro forma financials related to ANDX
($MM) | 4Q19 | 1Q20 | 2Q20 | 3Q20 | LTM |
MPLX Net Income / (Loss) | (573) | (2,716) | 655 | 674 | (1,960) |
Add: Net interest and other financial costs | 229 | 230 | 223 | 224 | 906 |
Provision (benefit) for income taxes | (2) | - | - | 1 | (1) |
Impairments | 1,239 | 3,429 | - | 27 | 4,695 |
Restructuring expenses | - | - | - | 36 | 36 |
Depreciation and amortization | 338 | 325 | 321 | 319 | 1,303 |
Adjusted EBITDA related to MPLX | 1,231 | 1,268 | 1,199 | 1,281 | 4,979 |
Reconciliation
Cash Provided by (Used in) Operations to Continuing Operating Cash Flow Before Changes in Working Capital
($MM) | 2020 3Q |
Cash provided by (used in) operating activities from continuing operations Less changes: Current receivables Inventories Current accounts payable and accrued liabilities Fair value of derivative instruments Right of use assets and operating lease liabilities, net Total changes in working capital Operating cash flow from continuing operations before changes in working capital Adjustments to operating cash flow for restructuring expenses (a) Adjusted operating cash flow from continuing operations before changes in working capital | 879 (767) 750 1,170 14 (2) |
1,165 | |
(286) 297 | |
11 |
(a) Adjustments to operating cash flow before working capital include the portion of restructuring expenses expected to be settled in cash of $297 MM
($MM)
Refining & Marketing Segment
Segment income (loss) from operations
Add: Depreciation and amortization
Refining planned turnaround costs
LIFO liquidation charge
Segment Adjusted EBITDA
Midstream Segment
Segment income from operations
Add: Depreciation and amortization
Segment EBITDA
Segment Adjusted EBITDA
Corporate
Add: Depreciation and amortization
Adjusted EBITDA from continuing operations
Speedway
Speedway
Add: Depreciation and amortization (a)
Adjusted EBITDA from discontinued operations
Adjusted EBITDA from continuing and discontinued operations
Effective in the third quarter of 2020, R&M historical results have been recast and now include the results of the retained direct dealer business.
(a) As of August 2, 2020 Speedway ceased recording depreciation and amortization.
($MM)
Refining & Marketing income (loss) from operations (a)
Plus (Less):
Selling, general and administrative expenses
LCM inventory valuation adjustment
(Income) loss from equity method investments
Net (gain) loss on disposal of assets
Other Income
Refining & Marketing gross margin
Plus (Less):
Operating expenses (excluding depreciation and amortization)
LCM inventory valuation adjustment
Depreciation and amortization
Gross margin excluded from Refining & Marketing margin (b)
Other taxes included in Refining & Marketing margin
Biodiesel tax credit (c)
Refining & Marketing margin (a, d)
LIFO liquidation charge
Refining & Marketing margin, excluding LIFO liquidation charge
Refining & Marketing margin by region:
Gulf Coast
Mid-Continent
West Coast
Refining & Marketing margin, excluding LIFO liquidation charge
2019
2020
Effective in the third quarter of 2020, R&M historical results have been recast and now include the results of the retained direct dealer business.
(a) LCM inventory valuation adjustments are excluded from Refining & Marketing income from operations and Refining & Marketing margin.
(b) The gross margin, excluding depreciation and amortization, of operations that support Refining & Marketing such as biodiesel and ethanol ventures, power facilities and processing of credit card transactions.
(c) Reflects a benefit for the biodiesel tax credit attributable to volumes blended in 2018
(d) Refining & Marketing margin is defined as sales revenue less cost of refinery inputs and purchased products. We believe this non-GAAP financial measure is useful to investors and analysts to assess our ongoing financial performance because, when reconciled to its most comparable GAAP measure, it provides improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. This measure should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies.
($MM)
Income from Discontinued Operations(a)
Plus (Less):
Operating, selling, general and administrative expenses
Income from equity method investments
Net gain on disposal of assets
Other income
Speedway gross margin
Plus (Less):
LCM inventory valuation adjustment
Depreciation and amortization
Speedway margin (a)
Speedway margin: (b)
Fuel margin
Merchandise margin
Other margin
Speedway margin
2019
2020
1Q
2Q
3Q
4Q
1Q
2Q
3Q
(a) LCM inventory valuation adjustments are excluded from income from discontinued operations and Speedway margin.
(b) Speedway fuel margin is defined as the price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bank card processing fees (where applicable). Speedway merchandise margin is defined as the price paid by consumers less the cost of merchandise. We believe these non-GAAP financial measures are useful to investors and analysts to assess our ongoing financial performance because, when reconciled to the most comparable GAAP measures, they provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies.
33
Attachments
- Original document
- Permalink
Disclaimer
Marathon Petroleum Corporation published this content on 02 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 November 2020 13:09:02 UTC