Wolfe Research Oil and Gas Conference. January 6, 2015

Transcription

1 Wolfe Research Oil and Gas Conference January 6, 2015

2 Forward-Looking Statements This presentation contains forward-looking statements within the meaning of federal securities laws regarding both MPC and MPLX. These forwardlooking statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPC and MPLX. You can identify forward-looking statements by words such as anticipate, believe, estimate, "objective," expect, forecast, "plan," project, "potential," 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 the companies control and are difficult to predict. Factors that could cause MPC s actual results to differ materially from those in the forward-looking statements include: its ability to successfully integrate the acquired Hess retail operations and achieve the strategic and other expected objectives relating to the acquisition, including any expected synergies; changes to the expected construction costs and timing of pipeline projects; 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; an easing or lifting of the U.S. crude oil export ban; 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; its ability to successfully implement growth opportunities; modifications to MPLX earnings and distribution growth objectives; impacts from the repurchases of shares of MPC common stock under share repurchase authorizations, 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 MPC s 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, 2013, filed with the Securities and Exchange Commission (SEC). Factors that could cause MPLX s actual results to differ materially from those in the forward-looking statements include: the adequacy of MPLX capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and execute business plans; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; volatility in and/or degradation of market and industry conditions; completion of pipeline capacity by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of MPC's obligations under commercial agreements; the ability to successfully implement growth strategies, whether through organic growth or acquisitions; state and federal environmental, economic, health and safety, energy and other policies and regulations; other risk factors inherent to MPLX s industry; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended December 31, 2013, filed with 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, in MPC s Form 10-K or in MPLX s Form 10-K could also have material adverse effects on forward-looking statements. Non GAAP Financial Measures EBITDA and free cash flow are non-gaap financial measures provided in this presentation. EBITDA and free cash flow reconciliations to the nearest GAAP financial measures are included in the Appendix to this presentation. EBITDA 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 activities or other financial measures prepared in accordance with GAAP. 2

3 Macro Outlook 3

4 Current Market Trends Positive domestic outlook Sustainable U.S. refining advantages Product exports growth Significant infrastructure investments in U.S. 4

5 Expecting Attractive Crude Spreads MPC Outlook* Brent/WTI Spread $7-$12/BBL, wider at times LLS/WTI Spread $5-$10/BBL, transportation/quality based Brent/LLS North Dakota Light Canadian Heavy Differentials Differentials *As noted during MPC Analyst & Investor Day on December 4, 2013 $3-$5/BBL, domestic light sweet crude surplus Competes with WTI and LLS, prices accordingly Attractive, but narrowing with new pipelines and coker capacity Volatile, extreme at times and impossible to predict 5

6 Our Priorities for Our Investors Maintain top-tier safety and environmental performance Substantially accelerate the growth of MPLX Sustain our focus on shareholder returns Balance capital returns with value-enhancing investments Grow higher valued and stable cash flow businesses Midstream/MPLX Speedway Enhance the margins in our refining operations 6

7 Substantial Acceleration of MPLX Growth Grow MPLX to ~$450 MM of run-rate EBITDA (December 2015 annualized), from current ~$160 MM run-rate (3Q 2014 annualized) Adjusted EBITDA attributable to MPLX 450 Accelerate MPLX s annual LP distribution growth rate to average mid-20% over next five years Evolve MPLX into large-cap, diversified logistics MLP $MM ~3x 3Q 2014 annualized EBITDA 160 Dropped 30.5% interest in MPLX Pipe Line Holdings to MPLX on December 1 for $800 MM, representing ~$80 MM of annual EBITDA - 7

8 Substantial Acceleration of MPLX Growth Rapidly changing midstream business environment creates multiple opportunities where size matters Hess retail acquisition has expanded MPC s opportunity set and strategic options Identified fuels distribution EBITDA source Expands retained MLP-qualifying EBITDA by ~$600 MM Market has not appropriately reflected MPLX contribution to total value of MPC enterprise 8

9 Illustrative Value of MPC Ownership in MPLX* Total Distributions to MPC Illustrative Value of MPC Ownership based on 2019E Distributions** $MM E 2015E 2016E 2017E 2018E 2019E GP Distributions LP Distributions CAGR 25% $B MPLX Value per MPC Share x 45x 35x LP LP 25x $56.93 $41.26 $72.62 $56.93 $88.29 $72.62 *Represents cash distributions applicable to the period in which the distributions were earned. GP distributions include incentive distribution rights. **Graph shows estimated valuations for MPC s LP and GP interests in MPLX. See MPLX LP and GP Illustrative Valuation slide in appendix for underlying assumptions. 9

10 MPC s Currently Identified Eligible MLP EBITDA Sources of ~$1.6 B Pipelines Marine Retained by MPC ~5,400 miles of additional crude and products pipelines Owns, leases or has an ownership interest in these pipelines 0.5% of MPLX Pipe Line Holdings LP Southern Access Extension, Sandpiper and Utica investments 200 owned and 12 leased inland barges; 5.3 MMBBL capacity 17 owned and one leased inland towboats New Terminals Railcars Refineries Fuels Distribution 63 light product; ~23 MMBBL storage; 192 loading lanes 18 asphalt; ~4 MMBBL storage; 65 loading lanes 27 owned and 2,138 leased 763 general service; 1,166 high pressure; 236 open-top hoppers 59 MMBBL storage (tanks and caverns) 25 rail loading racks and 24 truck loading racks 7 owned and 11 non-owned docks 2 condensate splitter investments 20 B gallons of fuels distribution volume Existing MPC and Speedway volumes; ~17 B gallons refined products Acquisition of Hess retail operations adds ~3 B gallons refined products 10

11 12.0% Delivering Peer Leading Return of Capital Last twelve months* 10.0% 10.0% 8.0% 8.3% 8.3% 1.4% 7.9% 6.0% 8.0% 5.9% 4.3% 6.4% 5.6% 4.0% 3.9% 2.0% 2.0% 2.6% 1.9% 2.3% 2.0% 0.0% MPC HFC TSO PSX VLO Dividend Yield Special Dividend Yield Share Repurchase/Share Yield * Total Capital Return Yield: Last Twelve Months Dividends per share, plus Last Twelve Months special dividends per share, plus Last Twelve Months share repurchase per share, all divided by Last Twelve Months average share price through September 30,

12 Performing Consistently in the Top Tier Engine behind MPC s focus on capital returns 20 Operating Income Per Barrel of Crude Throughput ** $/BBL MPC s Rank Competitor Range Companies Ranked* Sept. YTD Preliminary *Current companies ranked: BP, CVX, HFC, MPC, PSX, TSO, VLO, XOM **Adjusted domestic operating income per barrel of crude oil throughput Source: Company Reports 12

13 Grow Higher Valued and Stable Cash Flow Businesses Future Mid-Cycle EBITDA Midstream Speedway Historical Mid-Cycle EBITDA * Pipeline Transportation Speedway R&M R&M * average. Non-GAAP disclosure, see appendix for reconciliation to net income attributable to MPC 13

14 Growth Opportunities 14

15 Increasing Midstream Growth Investments 1,200 1, Southern Access Extension Sandpiper Condensate Splitters Midstream Infrastructure* $MM E 2015E 2016E *Includes Pipeline Transportation segment spend and midstream investments included in the R&M segment. Excludes maintenance capital. 15

16 Investing in Significant Growth Projects Sandpiper MPC Investment: $1.0 B - $1.2 B MPC Equity: 27% - 30% 2017 completion Southern Access Extension (SAX) MPC Investment: ~$305 MM MPC Equity: 35% Late 2015 completion Cornerstone Completion of successful non-binding open season MPLX Estimated Investment: ~$200 MM $20 MM EBITDA 2016 Completion Canadian Bakken Superior, WI MPC Refinery Terminal Facilities Utica Gas Processing Facilities SAX Patoka, IL Canton Ohio Flanagan, IL Youngstown M3, Leesville M3, Scio MarkWest, Cadiz MPLX Products Pipeline MPC Crude Pipeline Canton Cornerstone Utica Proposed Cornerstone Pipeline Future Build-out Pa. Midland Wellsville Steubenville 16

17 MPLX/MPC Utica Build-Out Connectivity 17

18 MPLX Developing a Comprehensive Utica System Cornerstone Pipeline and Additional Opportunities Non-binding open season supports 12 inch pipeline, 16 inch option Capital estimates vary subject to binding open season results East and West connectivity options River access via Midland/Wellsville Canton/Detroit/Robinson Third-party refineries and pipelines Other Utica organic growth opportunities being evaluated 18

19 Acquisition of Hess Retail - Transaction Overview Hess Retail acquisition included: 1,245 company operated locations Transport fleet with capacity to transport ~1 B gal/yr. Pipeline shipper history in various pipelines, including ~40 MBPD on Colonial Pipeline Prime undeveloped real estate bank for organic growth Total consideration of $2.82 B $2.37 B base purchase price $194 MM working capital* $263 MM capital leases cash settled Unique acquisition opportunity of premier East Coast locations Financed with a combination of debt and available cash Transaction closed on September 30, 2014 *Subject to post-closing adjustment 19

20 Conversion Plans for Former Hess Stores Conversion to Speedway: $181 MM 500 Stores by Dec Remodel Capital: $240 MM Maintenance Capital: $150 MM Largest conversion in company s history Completing Hess legacy stores first allows us to terminate transition service agreements earlier Quick Serve Restaurant amendments or terminations required Time required to transfer permits Permitting in new markets 505 Stores by Dec Stores by March

21 Transformative Transaction for MPC and Speedway Accelerates strategy to grow higher valued and stable cash flow businesses Provides larger integrated platform for growth in new markets Meaningfully expands scale and provides multiple levels of strategic optionality Continued commitment to balance value enhancing investments in the business with capital returns to shareholders 21

22 Enhances Strategic Value for Integrated System Dual Marketing Area Speedway Marketing Area Hess Marketing Area Refineries Connecting Pipelines Light Product Terminals Water Terminals Refined Product Placement Opportunities Incremental 200 MBPD of refined products placement capacity, increases assured gasoline sales to ~75% of production Incremental supply of MPC Gulf Coast refined products to northeast and southeast markets Logistics Opportunities Increases utilization and optimization of MPC terminals with incremental 70 MBPD of throughput Marketing Potential Growth platform for further expanding Speedway, Marathon brand and wholesale Light Product Supply Strategy Existing supply and terminal agreements provide near term competitive supply with upside potential to aggregate volumes and further reduce costs Optimize supply in southeast market through existing production and logistics assets Leverage Midwest and Gulf Coast production to provide supply to the New York Harbor Note: Includes owned and third-party terminals 22

23 Speedway Earnings growth through Margin Capture Top-tier performance in the convenience store industry Scalable technology and organizational infrastructure Disciplined expense control Industry leading consumer loyalty program Leverage integration value within MPC s infrastructure $MM EBITDA Total EBITDA and Merchandise Margin $MM Margin Total Gross Margin Mix Light Product 35% Merchandise 65% EBITDA Margin Average 23

24 Synergies and Marketing Enhancements Will Drive Value Operating and G&A expense synergies of $75 MM Integrated light product supply savings of $45 MM Additional sales uplift and merchandise margin enhancement of $70 MM Expedited integration and transition process due to spin-off preparation $MM Pro Forma Hess EBITDA* 35 Form 10 WilcoHess Synergies Earnings Opportunities 40 Operating and G&A Expense Synergies 45 Light Product Supply and Logistics Sources: Company reports, MPC internal estimates *Sept. 30, 2013 Form 10 Pro Forma annualized 70 Marketing Enhancements E Hess EBITDA $MM Synergies and Marketing Enhancements E* 2015E 2016E 2017E Marketing Enhancements Light Product Supply and Logistics Operating and G&A Expense Synergies WilcoHess Synergies *Based on Oct. 1, 2014 closing 24

25 Speedway and Hess Side-by-Side Comparison Speedway generates an incremental $17,300 of merchandise margin per store per month ~$250 MM of additional annual merchandise margin potential across Hess retail Hess 1 Speedway 2 Company Operated Sites 1,255 1,478 Fuel Sales (gallons/store/month) Fuel Margin ($/gallon) Merchandise Sales ($/store/month) Merchandise Margin ($/store/month) 198, ,400 $0.137 $0.144 $111,000 $176,800 $29,200 $46,500 1) 2013PF data provided in Hess Retail Corporation Form 10 SEC filing 2) 2013 data provided in Marathon Petroleum Company 10K SEC filing 25

26 Focus on Improving Light Product Breakeven Light Product Break Even (cpg) Each 1.00 cent per gallon improvement = ~$30 MM annual pretax earnings 2.56 LPBE = Total Expenses Merchandise Margin Light Product Volume Measure of operating efficiency and merchandise contribution to total expense Potential to drive substantial value in the business over time Speedway Hess Sept Form 10 Estimated 26

27 Enhance Refining Margins 27

28 Increasing Light Sweet Crude and Condensate Capacity Condensate splitters Canton: 25 MBD 4Q 2014 completion Catlettsburg: 35 MBD 2Q 2015 completion $250 MM >30% ROI for each project Light crude processing Robinson: +30 MBD light crude $140 MM >45% ROI, 2016 completion Condensate Processing Opportunity Ultra- New Light Naphtha to Gasoline Blending Sweet Fractionator Heavy Naphtha to Reforming Condensate Distillates to Hydrotreating Heavier Components Conventional Existing To Downstream Crude Crude Unit Process Units 28

29 Growing Gulf Coast Export Capabilities Added new 500,000 barrel export tank at Garyville in Export Capacity 510 Galveston Bay in MBD ULSD ~40% ROI Garyville in MBD Gasoline ~30% ROI Galveston Bay in MBD MBD Gasoline ~35% ROI E 2018+E 29

30 Capitalizing on Global Growth in Diesel Demand Hydrocracker expansions/revamps Garyville +25 MBD ULSD in $225 MM ~45% ROI Galveston Bay +9 MBD ULSD in 2015 $18 MM ~70% ROI Robinson +5 MBD ULSD in 2015 $77 MM ~20% ROI Percent of Crude Capacity MBD Distillate Production E 2015E 2016E Distillate Production E 2015E 2016E 30

31 Evaluating Garyville Resid Hydrocracker Project Conversion opportunity - leverages favorable market dynamics $130 MM sanctioned for frontend engineering and design Increases ULSD production by 28 MBD and decreases gas oil purchases Converts low value resid to ULSD using hydrogen produced from low cost natural gas 20-25% ROI $0.8 - $1.0 B EBITDA $2.2 - $2.5 B investment, projected 2018 start-up 31

32 2014 Value Drivers Top-tier safety and environmental performance Accelerate growth of Midstream/MPLX Capital return to shareholders Strong and growing dividend Share repurchase program 2014 $2.4 B capital investments* Speedway growth Increasing light crude processing and export capabilities Enhancing margins in our refining operations *Excludes the acquisition of Hess retail operations 32

33 Appendix 33

34 MPLX LP and GP Illustrative Valuation MPC Distributions & Asset Sales Proceeds from MPLX ($MM) 3Q 2013 YTD 3Q 2014 YTD GP Distributions, including IDRs 1 3 LP Distributions Total Cash Distribution Received from MPLX Asset Sales Proceeds from MPLX Illustrative MPLX Value to MPC* Multiple of LP distributions 20x 25x 30x 20x 25x 30x LP Valuation ($MM) $1,523 $1,904 $2,285 $4,644 $5,805 $6,966 Multiple of GP distributions 35x 45x 55x 35x 45x 55x GP Valuation ($MM) $202 $260 $318 $11,355 $14,600 $17,844 MPLX Value to MPC ($MM) $1,725 $2,164 $2,603 $15,999 $20,405 $24,810 MPLX Value per MPC Share $6.14 $7.70 $9.26 $56.93 $72.62 $88.29 Value Assumptions - Used 25% for mid-20% Distribution Growth - MPC maintains 54 MM LP units, 2% GP Interest - Acquired EBITDA financed 50/50 Debt/Equity - MPC shares outstanding as of 9/30/2014 *Represents cash distributions applicable to the period in which the distributions were earned. 34

35 Focused Return of Capital to Shareholders 8,000 LTM Ended 9/30/14 7,000 $MM 6,000 5,000 4,000 3,000 2,000 4,077 ~1.2x of Free Cash Flow*** 2,785 2,413 $2,055 Free Cash Flow, excluding Hess Acquisition*** Hess Retail Acquisition Dividends and share repurchases* Investments, excluding Hess Acquisition** Net cash provided by operations 1,000 2,022 0 *$512 MM dividends plus $1,901 MM share repurchases **Includes cash capital expenditures, acquisitions, investments and contingent consideration, excluding $2.785 B for the acquisition of Hess retail operations and related assets ***Cash flow provided by operations less cash used for investments, excluding $2.785 B for the acquisition of Hess retail operations and related assets 35

36 Fully Integrated Downstream System As of Sept. 30, 2014 Marketing Area Refineries Ethanol Facility Biodiesel Facility Connecting Pipelines Light Product Terminals Asphalt Terminals Inland Water Terminals Coastal Water Terminals Tank Farms Butane Cavern Barge Dock Refining and Marketing Seven-plant refining system with ~1.7 MMBPCD capacity One biodiesel facility and interest in three ethanol facilities One of the largest wholesale suppliers in our market area One of the largest producers of asphalt in the U.S. ~5,400 Marathon Brand retail outlets across 19 states ~660 retail outlet contract assignments primarily in the Southeast and select Northeast states Owns/operates 63 light product terminals and 18 asphalt terminals, while utilizing third-party terminals at 60 light product and eight asphalt locations 17 owned and one leased inland waterway towboats with 200 owned barges and 12 leased barges, 2,165 owned/leased railcars, 170 owned transport trucks Speedway (Retail) ~2,740 locations in 22 states Second largest U.S. owned/operated c-store chain Pipeline Transportation Owns, leases or has interest in ~8,300 miles of pipelines One of the largest petroleum pipeline companies in U.S. Part ownership in non-operated pipelines includes Explorer, LOCAP, LOOP, Maumee and Wolverine 36

37 Generating Significant Cash Flow Through All Cycles Pro forma EBITDA adjusted for current configuration 8,000 Pro forma EBITDA 7,000 6,000 5,000 $MM 4,000 3,000 2,000 1, thru 2013 Mid Cycle Pipeline Transportation Speedway Depr. & Amort. less corporate expense Refining and Marketing GME DHOUP Galveston Bay Hess Retail 37

38 Sustaining Core Liquidity Needs Minimum cash balance of $500 MM - $1.5 B Requirements Ongoing Operating Cash Flow Requirements Maintenance/Sustaining Capital Interest Payments Dividend Payments Contingent Calls on Corporate Liquidity - Probability Adjusted Contingent and Uncommitted Letters of Credit MPC Credit Shock and Impact on Unsecured Lines (Crude Purchases) Major Operating Upset Working Capital Shock ~$4,200 - $5,200 MM Reduced by - Cash Flow from Operations Under Stressed Scenario Liquidity Sources Committed Facilities MPC Revolving Credit Facility $2,500 Trade Receivables Facility* $1,300 $3,800 MM Targeted Cash and Near-Cash Equivalents $500 - $1,500 MM *Availability is dependent on outstanding trade receivables. 38

39 Sustaining Capital Returns Since Spin 8,000 7,000 Cumulative Return of Capital Since July 1, 2011 $7.0 B 6,000 $MM 5,000 4,000 3,000 2,000 1,000 0 Dividends Share repurchases 39

40 Growing Global Product Demand Distillate and gasoline demand continues to rise Fuel oil continues to decline on economics and emissions issues MMBD Actual Forecast Other Fuel Oil Distillate Compounded Annual Growth Rates 2030 vs % -1.6% +1.4% 20 0 Gasoline +0.9% Other consists of refinery gas, liquefied petroleum gas (LPG), solvents, petroleum coke, lubricants, wax, and other refined products and refinery fuel Distillate includes jet fuel Gasoline includes naphtha Sources: BP Statistical Review of World Energy, MPC 40

41 Growing U.S. Distillate Demand Overall U.S. demand remains flat Distillate demand growth outpaces other products Gasoline will be constrained by CAFE standards and modest growth in biofuels penetration MMBD Actual 2013 Forecast Gasoline Gasoline ex ethanol Distillate Compounded Annual Growth Rates 2030 vs % -0.4% +1.5% Residual fuel demand continues to fall Jet Fuel Resid +0.7% -2.9% Sources: DOE/EIA, MPC 41

42 Rising North American Crude & NGLs Production Actual Forecast 20 Canada MMBD U.S Sources: EIA, CAPP, MPC 42

43 Growing Crude Oil Supply MBD MBD North Dakota 1, ,600 1,400 1,200 1, Actual Forecast Texas 4, ,000 3,500 3,000 2,500 2,000 1,500 1, Actual Forecast Canada +2,549 MBD Niobrara +286 MBD Permian +826 MBD Bakken +829 MBD Total U.S. Growth +3,506 MBD Total Growth ,055 MBD Utica +106 MBD MPC Refinery MBD Ohio Actual Forecast Forecast Eagle Ford +695 MBD Sources: EIA, CAPP, MPC 43

44 U.S. Shale Oil Production Under Different Price Scenarios U.S. Shale Crude and Condensate Production (MMBD) MMBD $120 $100 $90 $80 $70 $60 $40 Note: Brent used as benchmark oil price. Source: PIRA Energy Group 44

45 Much of OPEC Depends on High Crude Prices 160 OPEC Fiscal Breakevens ($/BBL) Source: Apicorp 45

46 Refining Capacity in Advantaged Regions 100% in PADDs II and III 100% Canadian Bakken Utica 80% 60% PADD V PADD IV PADD II 40% PADD I 20% PADD III 0% MPC VLO HFC PSX TSO PADD I II PADD III PADD I III PADD PADD IV IV PADD PADD V V Permian Basin Eagle Ford Gulf of Mexico Canadian Source: Oil & Gas Journal effective December 31,

47 Refinery Capacity BPCD NCI* Garyville 522, Galveston Bay 451, Catlettsburg 242, Robinson 212, Detroit 123, Texas City 84, Canton 80, Total 1,714, ** The Nelson Complexity Index is a construction cost-based measurement used to describe the investment cost of a refinery in terms of the process operations being conducted. It is basically the ratio of the process investment downstream of the crude unit to the investment of the crude unit itself. This index has many limitations as an indicator of value and is not necessarily a useful tool in predicting profitability. There is no consideration for operating, maintenance or energy efficiencies and no consideration of non-process assets such as tanks, docks, etc. Likewise it does not consider the ability to take advantage of market related feedstock opportunities. *Nelson Complexity Index calculated per Oil & Gas Journal NCI Formula **Weighted Average NCI Source: MPC data as reported in the Oil & Gas Journal effective December 31,

48 Balance in Refining Network Canton (Ohio) 80,000 Catlettsburg (Ky.) 242,000 Detroit (Mich.) 123,000 Robinson (Ill.) 212,000 Midwest Capacity 657,000 BPCD Galveston Bay (Texas) 451,000 Texas City (Texas) 84,000 Garyville (La.) 522,000 Total 1,714,000 Texas Capacity 535,000 BPCD Louisiana Capacity 522,000 BPCD Source: MPC data as reported in the Oil & Gas Journal effective December 31,

49 U.S./Canada Key Existing and Planned Pipelines Northern Gateway Burnaby Anacortes Trans Mountain Edmonton Hardisty MBPD Pipeline Estimated Completion 540 Keystone Current 190 Spearhead Current Clearbrook Superior Sarnia Montreal Portland 360 Ho-Ho Reversal Current Guernsey 700 Keystone Gulf Coast Current 300 BridgeTex Current 230 Pony Express Current 600 Flanagan South Current Seaway Phase 2 Seaway Phase 3 Current 4Q Line SAX Late Diamond Sandpiper TransMountain TransMountain (TMX) Current Keystone XL ,100 Energy East Northern Gateway 2018 Sources: Publicly available Information, MPC Estimates Steele City Flanagan South Pony Express Midland BridgeTex Cushing Seaway Houston Freeport Flanagan SAX Diamond Ho-Ho Chicago Mustang Patoka St James Houma Wood River Memphis MPC Refineries Keystone Ho-Ho Reversal Keystone GC BridgeTex Pony Express Flanagan South Planned Seaway Expansion Planned Line 9 Planned SAX Planned Diamond Planned Sandpiper Planned TransMountain Planned Keystone XL Planned Energy East Planned Northern Gateway 49

50 Key Strengths Balanced Operations Crude Oil Refining Capacity Crude Slate 38% 62% PADD II PADD III 52% 48% Sour Crude Sweet Crude As of September 30, 2014 September 30, 2014 YTD Assured Sales of Gasoline Production (Speedway + Brand + Wholesale Contract Sales)* ~62% ~38% Assured Sales Wholesale and Other Sales September 30, 2014 YTD *Excludes assured sales volumes resulting from the Hess retail acquisition. Assured sales are ~75% including the Hess retail volumes. 50

51 Compelling Advantage for Pipeline and Marine Canadian $10-12 Bakken $4 $15-16 $12-14 $5-6 $6 $14-16 Chicago, IL Utica $2 $6-7 Patoka, IL $13-15 $5-6 $5 WTI Cushing, OK Legend Rail Pipeline Marine $10 Houston, TX $2 St. James, LA LLS All costs shown as $/BBL Pipeline costs exclude any storage or transfer fees and line loss Sources: MPC, publicly available information 51

52 Creating Crude/Condensate Advantage Canada Cornerstone Pipeline Bakken Condensate Splitter Truck Unload Expansion Sandpiper Southern Access Extension Patoka, IL Utica Wellsville Barge Condensate Splitter Permian Robinson Light Crude Enhancements MPC Refinery Eagle Ford Connectivity Enhancements Source: MPC Additional Barging 52

53 Allocating Capital to Higher Valued Businesses 4,000 3,500 3,000 2, Capital Investment Profile $MM 2,000 1,500 1, E 2015E 2016E *Excludes Galveston Bay and Hess retail acquisitions Refining and Marketing, excluding Midstream Midstream Pipeline Transportation Speedway Other Garyville resid upgrade project committed Garyville resid upgrade project uncommitted 53

54 Galveston Bay Long-term opportunities Revamp crude and vacuum units Optimize for future crude availability Improve distillate recovery Add hydrotreating capacity Move to 100% ULSD Idle the smallest and oldest FCC Expand export capabilities 54

55 Rising MPC Finished Product Exports MBD Sept. 30, 2014 YTD 55

56 Leveraging Existing Capacity to Run Light Sweet Crude 48% sweet crude oil throughput September 2014 YTD versus 65% sweet crude oil capacity Reformer capacity captures full value of light crude processing Additional value added through aromatics production MBPCD Percent of Crude Capacity U.S. Aromatics Capacity Reforming Capacity MPC Midwest MPC USGC Source: 2014 Oil & Gas Journal Industry Average Sources: Argus DeWitt Aromatics Reports and MPC internal data. Benzene, toluene, mixed xylenes, and cumene shown. Xylene revised. 56

57 Renewable Fuels Corn Ethanol Plants 67% equity interest* in Greenville, Ohio 110 MM gallon/year capacity 60% equity interest in Clymers, Indiana 110 MM gallon/year capacity 43% equity interest in Albion, Michigan 55 MM gallon/year capacity The Andersons operates the plants and provides all the facility services Biodiesel Refinery 100% owner in Cincinnati, Ohio 60 MM gallon/year capacity Generates 90 MM RINs per year Supplied by both truck and rail, with river access in close proximity *Direct and indirect 57

58 2014 Significant Capital Projects Sandpiper investment Southern Access Extension investment Utica Shale projects Condensate splitters Utica system Speedway expansion Robinson hydrocracker revamp Garyville resid hydrocracker engineering design and study Garyville and Galveston Bay gasoline and diesel export 58

59 Capital Expenditures & Investments ($MM) 2014 MPC Budget 3Q 2014 YTD Refining & Marketing (R&M) Midstream included in R&M Speedway Pipeline Transportation* Corporate and Other Total Capital Expenditures & Investments ($MM) 2,432 1,308 *Includes MPLX (100% basis) Note: Excludes capital expenditures and investments attributable to the acquisition of $2.68 B for Hess retail operations and related assets. Excludes capitalized interest 2014 MPLX Revised Budget (100% basis) 3Q 2014 YTD Growth Maintenance Total Capital Expenditures

60 Garyville Resid Hydrocracker Project Increase production of ULSD and refinery intermediates Feeds MBPD Vacuum Resid 63 FCC Slurry 7 Hydrogen (mmscfd) 110 Products MBPD LPG 2 Naphtha 7 ULSD 23 Gas Oil 22 Unconverted Resid 23 Hydrogen Slurry Vacuum Resid Resid EBHydrocracker LPG to Sales Naphtha to Reformer ULSD to Sales Gas oil to FCC Unconverted Resid to Coker 60

61 Annual Price and Margin Sensitivities $MM (After Tax) LLS Crack Spread* Sensitivity ~$450 (per $1.00/barrel change) Sweet/Sour Differential** Sensitivity ~$200 (per $1.00/barrel change) LLS-WTI Spread*** Sensitivity ~$85 (per $1.00/barrel change) Natural Gas Price Sensitivity ~125 (per $1.00/MMbtu change in Henry Hub) *Weighted 38% Chicago and 62% USGC LLS crack spreads and assumes all other differentials and pricing relationships remain unchanged **Light Louisiana Sweet (prompt) - [Delivered cost of sour crudes: Arab Light + Kuwait + Maya + Western Canadian Select + Mars] ***Assumes 20% of crude throughput volumes are WTI-based domestic crudes 61

62 MPLX s Priorities for Investors Maintain Safe and Reliable Operations Sustain Long-term Distribution Growth; Mid 20% for the Next Five Years Focus on Fee-Based Businesses $80 $70 $60 $50 Unit Price Pursue Organic Growth Opportunities $40 $30 IPO Grow Through Acquisitions $20 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Source: Thomson Reuters 62

63 MPLX and MPC are Aligned 0.5% limited partner interest 2.0% GP interest MPLX Organizational Structure 100.0% ownership interest 100.0% ownership interest Marathon Pipe Line LLC ( MPL ) Marathon Petroleum Corporation and Affiliates (NYSE: MPC) MPLX GP LLC (our General Partner) 100.0% ownership interest MPLX Operations LLC 99.5% GP interest 69.5% LP interest MPLX LP (NYSE: MPLX) r (the Partnership ) MPLX Pipe Line Holdings LP ( Pipe Line Holdings ) Public 28.5% LP interest 100.0% ownership interest Ohio River Pipe Line LLC ( ORPL ) 100.0% ownership interest MPLX Terminal and Storage LLC MPC views MPLX as integral to its operations and is aligned with its success and incentivized to grow MPLX MPLX assets consist of a 99.5% GP interest in Pipe Line Holdings as well as 100% ownership in the Neal, W.Va., Butane Cavern MPC retains the remaining 0.5% LP interest in Pipe Line Holdings MPC also owns 69.5% LP interest and 100% of MPLX s GP interest and IDRs As of December 31,

64 Investing in Significant Growth Projects ~$2.3 B investment with potential annual EBITDA of up to $300 MM MPC Projects Timing Investment $MM North Dakota System Equity 2017 $1,200 Condensate Splitters $250 Southern Access Extension Equity Late 2015 $305 Wellsville Truck to Barge Operation 2013 $30 Other $220 Total $2,005 MPLX Projects Timing Investment $MM Cornerstone Pipeline (Utica Shale)* 2016 $200 Robinson to Mt. Vernon $70 Other $75 Total $345 *Estimate 64

65 MPLX Deficiency Payment Effect Example for illustrative purposes only ($MM) Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6 Quarter 7 Quarterly deficiency payment Use or expiration of credit (on or before) Cumulative deferred revenue Distributable cash flow Yes Yes Yes Yes No No No Adjusted EBITDA No No No No Yes Yes Yes 65

66 Incentive Distribution Rights 3Q 2014 distribution of $0.3575/unit is in Third Target Distribution tier 66

67 4Q 2014 Outlook Crude Throughput* Other Charge/ Feedstocks Throughput* Total Throughput* Percent of WTI-priced Crude Turnaround and Major Maintenance Depreciation and Amortization Other Manufacturing Cost** Total Direct Operating Costs Corporate and Other Unallocated Items*** Projected 4Q 2014 in MBD Refinery Direct Operating Costs**** Gulf Coast Region 1, ,200 6% $2.00 $1.10 $4.60 $7.70 Midwest Region % $1.40 $1.75 $4.25 $7.40 MPC Total 1, ,850 21% $1.85 $1.35 $4.60 $7.80 $85MM 4Q 2013 Gulf Coast Region ,181 5% $1.67 $1.24 $4.44 $7.35 Midwest Region % $2.40 $1.82 $4.56 $8.78 MPC Total 1, ,794 19% $1.98 $1.48 $4.59 $8.05 $93MM *Region throughput data includes inter-refinery transfers, but MPC totals exclude transfers **Includes utilities, labor, routine maintenance and other operating costs ***Includes pension settlement expense ($6 MM and $12 MM pension settlement expense included in 4Q 2014 and 4Q 2013, respectively) ****$/BBL throughput 67

68 MPLX Adjusted EBITDA Reconciliation from Net Income ($MM) Q 2014 Annualized Dec Annualized Net income Less: Net income attributable to MPCretained interest Net income attributable to MPLX LP Plus: Net income attributable to MPCretained interest Depreciation Provision for income taxes Non-cash equity-based compensation Net interest and other financial costs Adjusted EBITDA Less: Adjusted EBITDA attributable to MPCretained interest Adjusted EBITDA attributable to MPLX LP

69 EBITDA Reconciliation to Net Income Attributable to MPC ($MM) Q 2Q 3Q 4Q 1Q 2Q 3Q Net income attributable to MPC 2,262 1, ,389 3, Less: Net interest and other financial income (costs) Add: Net income attributable to noncontrolling interests (26) (109) (48) (45) (47) (39) (46) (48) (50) Add: Provision for income taxes 1, ,330 1, Add: Total segment depreciation and amortization Add: Items not allocated to segments 147 (11) Total Segment EBITDA 3,990 2,448 1,506 2,188 4,934 6,596 1,504 1, , ,747 1,469 By Segment Refining & Marketing Segment EBITDA 3,413 1, ,539 4,309 5,902 1,341 1, , ,524 1,228 Speedway Segment EBITDA Pipeline Transportation Segment EBITDA Total Segment EBITDA 3,990 2,448 1,506 2,188 4,934 6,596 1,504 1, , ,747 1,469 Last Twelve Months Segment EBITDA 4,988 4,284 4,650 5,442 69

70 Reconciliation Free Cash Flow to Net Cash Provided by Operations ($MM) (For the Quarter) 4Q 1Q 2Q 3Q Net cash provided by operating activities 1, ,078 Additions to property, plant and equipment (473) (267) (302) (383) Acquisitions* - - (42) (4) Investments (38) (123) (41) (177) Contingent Consideration (172) Free cash flow Last twelve months free cash flow 2,055 *Represents cash paid, excludes acquisition of Hess retail operations and related assets. 70

71 EBITDA Reconciliation to Net Income for Hess ($MM) 2013* 2017E Net Income Less: Net interest and other financial income (costs) (12) - Add: Provision for income taxes Add: Depreciation and amortization EBITDA *Based on Hess Sept. 30, 2013 Form 10 data annualized 71

72 Market Indicators Used in Project EBITDA Calculations ULSD (USGC; $/BBL) $ $ No. 6, 3.0% S Fuel Oil (USGC; $/BBL) $99.32 $94.48 LLS (St. James, LA; $/BBL) $ $ Natural Gas (Henry Hub, LA; $/MMBTU) $2.79 $