MPC - Earnings call transcript Q3 2021 | Marathon Petroleum Corporation

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Operator

Welcome to the MPC Third Quarter 2021 Earnings Call. My name is Sheila and I will be your Operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instruction] Please note that this conference is being recorded. the to turn Kazarian. now will call Kristina over I Kristina, begin. you may

Kristina Kazarian

on quarter Petroleum this conference found marathonpetroleum.com Marathon to tab. XXXX the call website Investors under Corporation be acCompany Welcome that third earnings at slides call. can our The

today the the Mannen Harbor of Mike Hennigan, team. statements the Safe We invite on Joining CFO, call CEO other X. and me are on read slide members executive Maryann you to

results forward-looking making filings that statements today, differ may as results there Factors actual With with that, our be actual could I'll call differ. well cause turn will Mike. to SEC. in included are the We as to over the

Mike Hennigan

Thanks Kristina.

quarter, get brief speed by Hurricane we to results into passed quarter, the Ida. provide The we Ida update we our wind business. a the hour. with hurricane Garyville refinery wanted per the were Before on over topping impacted for through miles XXX Midway

region their employees Fortunately, the many to damage the all of our severe were of homes around safe them. experienced but in community and them

restart and refining restarted and dedication available to to our facility. groups remainder sequentially the the days was recognize a power The over more support team first of manner our storm refinery the of refinery unit integrity shut able team restore became power next like to took ensure for down over the the controlled operational ahead day It efforts. roughly employees. XX of days. several safety and of as a the our and which next in all our enabled week some a to I'd crude their Our to

in will excellent efforts through are specific an when cover across results. she also customers the teams commercial job supplied in Maryann did coordinated keeping refining impacts reviews this Company. region Our the our

product impacted In A restored, the week. roughly the Angeles continue Once demand major inventories Again, in to gradual XXth. Hurricane,our of the addition with was as are loss the normal an refinery Globally, X was the challenge refinery the units was Louisiana operations on by earthquake for back restarted, power. September our Los to recover. increase were mobility in products in is to years, lifted Jet margins. U.S., low at averages. have inventories a be fuel X-year we improved expect has tightest have and In although end -pandemic and many time. at and this both well inventories is range, are steadily below their diesel X-year still a in and of moved the some headwind at level gasoline levels, to that their the improvement for demand pre power

inventories to remain quarter. holiday products some There's XXXX. inventory demand And next consumer demand the is below seeing tight we Jet back. recover, quarter. uncertainty average X% levels. levels strong prices X% gasoline with lower same X% is slightly in as refining At pull below and still now Coast second be quarter, lagging remains down levels to has continues the of still to there demand a an -pandemic see the to Natural currently the demand to to and demand XXXX looking to below. XXXX fourth year of West at during supportive. system sector expect levels. above would XX% increase about Our Diesel pre but nearly if head into travel the we're we is with But from watching time, could rose rebound the steadily costs still improved, $X over third gas XX% global at

soybean will processing ADM. key we ADM's of soybeans, supplying renewable advanced and the oil is control, our diesel will exclusively approximately progressed source pounds strategic in several MPC, of year. feedstock of and for which this this own XXXX, XXX in Spearwood, initiative completion local complex that addition expected the On per enough gallons operate North Dakota. a quarter, This the within process XX facility aspects new with soybean million our with We for initiatives. Upon renewables business million of JV approximately are partnership

with are a drop Kenai that sale.We in wholly-owned include focus for used test which share advantaged shareholders. to October, pursuing technology Martinez for our And our and facility from position strengthen Also and feedstock evaluate United that for during made our working could in which strengthening facility this progressing commitment our it's in Madison project, as a this for and While to plant our extensive effort we local low drop was has stakeholders. to capital successful a renewable return announced At in report was our we others subsidiary, continue which the [Indiscernible] The businesses minutes potential demonstration return conversion quarter flight progress and the another made test conducted options a fuel we using project flew alternatives portfolio, focus, business. cost by Dickinson our capital feedstock belief on provides to today assets, in return our comment a continue XXX, the impact sustainable Airlines, our Martinez, renewable proprietary And XXX% mid-October. on fuel. reached our The we refinery, environmental to public for competitive our both milestone of slate JV regulators highlights process SAF Marathon often other of it the when XX continuing a strategic possible aviation locally in Wisconsin. our ways fuels of California. issued we

As confident the by ability today, billion the billion XXXX. approximately return program. completed of $X.X remaining of XX% we're our end of $XX our to we've share repurchase in And

the to base million. sustainable consisting well. around we 's Quarter MPLX as MPC and a in its of as ways holders. portfolio, X.X% return importance distribution challenging total provides distribution MPC cash amount, to some strategic distribution to ourselves unit special of of and amount Finally, ability the and increase a X Third will a energy. substantial announced This to part of the are a all Slide receive framework of reinforces MPLX MPC lead announcement its $XXX

or Our It and embedding social, the the for people and lowering developing natural dimensions approach and decision-making our by emerging and spans encompasses conserving engagement resources, intensity -- ESC by of governance investing strengthening governments in carbon our future in sustainability resiliency our and with in technologies aspects to operations. sustainability environmental, renewables and stakeholders. many all of

Company-wide targets have our know X stakeholders well. We many investors and of

by presents energy with X us XXXX, freshwater for XXXX. by a in our withdrawal First, a intensity and second, our and greenhouse emissions XX% XXXX, scope opportunities reduction XX% gas in reduction XX% innovation. intensity midstream reduction intensity meaningful by methane X a scope lastly, landscape The evolving in

of renewable like at California capital MSCI. XX% to the second projects. U.S., through In I'd allocated our the have A few Dickinson awarded an Dakota of facility, began rating of in we kind We diesel production fuels significant a highlight help the diesel and renewable our renewable recently its in North our facility. XXXX, growth the also Martinez, refinery largest specific XXXX advance were two by ESG we're a updates from to progressing conversion quarter. late We

rating. We refiner holds this that are only based the U.S.

to sector quarter, you do we're our We our continue on three scope over energy. refining how to invite CDP, section enhancing in data are Maryann we to it At lead in so. Sustainability in I'd submitted and sustainable to like our point, on go more to challenging disclosures our Third ourselves learn the turn through we in We review this this also of about website Quarter to first to to emissions results. the focus and

Maryann Mannen

share This idling financial summary provides X of -tax our a Slide $X.XX results. to $X.XX. of exclude of share pre per quarter and earnings earnings related of Mike. per $XX morning, charges adjusted third impairments costs. primarily Adjusted Ida reported earnings Thanks, we Hurricane million and

incremental to Additionally, which a tax of adjusts tax million $XXX include XX% results an expense adjustments the rate. all

under Our XXXX. effective therefore We tax rate the benefits in year-to-date retain is just expect to X%. realized

adjustment fourth Adjusted nearly will the to for $XXX is excluding quarter make $XXX for quarter. XXXX. rate We million this pension prior higher quarter. $X.X working million billion, which of $X.X the prior from an from billion Cash is approximately a of the the was operations and tax voluntary was which capital contribution quarter, from increase EBITDA continue

plan. additional and at beneficial also quarter, total a last Cares to funded of amount estimated This and a this would we from paid generated be the as benefit contributions our our years business quarter, flow X pension dividend the distribution. and as commitments, that we to fully year-end. nearly the well cash capital Similar During increased billion. elected needs we Act This covers $XXX the as was contribute of it We perspective. of plan to operating exceeded the tax covered amount ongoing $X.X into million forecast

total X through been is billion the lowering structure. progress illustrates beginning we capital margin reduced Company's of made directly to Finally, of out by and we costs. of has returned midstream our have nearly taken about share the approximately Slide $X million. the by EBITDA million, improved shareholders $X.X environment, a by dividend our quarter payments corporate and $X.X $X.X of almost repurchases. we $XXX costs $XXX this billion, billion. have towards lowered this Since Refining cost XXXX, billion Regardless by the

low emphasize reliable, to safe, the focus and continue cost our across We organization.

Fourth gas Third cost and still have While we us Quarter prices in higher of to the the opportunities continue taken are reductions do further out, for same Quarter. the not Natural that there cost. we see into already magnitude reduce were

$X the prices, higher R&M per by every EBITDA change our Fourth there to that in is million prices approximate Quarter to barrel. potential an Based natural impact impact on For segment. we have estimate anticipate incremental our we to prices, business the in gas an gas annual $X.XX natural $XXX current

average XXXX at per per our of $X previously have XXXX. now we mentioned, a quarterly $X As for in barrel at and are began roughly barrel cost trending refining

continue are As to continue structural and -- we reductions. believe these we

and in communities of reflect focus protect everyday and our safely results to our our assets discipline, cost employees, remain customers, the in the commitment which and health steadfast While our our safety we operate. operate we on

adjusted sustainable, our net and as $XX EBITDA EBITDA strength benefiting million XXXX revenue X in column. reductions income quarter-over-quarter, in shows jeopardize higher approximately XXXX. As $XXX reflected million have charges in of Slide the shared sequential not and well with also as by are Quarter to adjusted during midstream. opportunities EBITDA from people our or refining our of be djusted the Third the primarily no adjustment reconciliation our from way we in Quarter operations. was previously, impact cost from the pretax Second quarter the you should change marketing, but A driven safety to

our refining as marketing region, of The segment second $X.X slide segment. primarily continuing from to regions of and The billion. quarter. XX% compared provides EBITDA X adjusted an last quarter the an results, Coast business the increase second improvement of when driven of to with cracks higher reported was in our improved overview Moving million refined quarter the $XXX especially by XXXX. that from increase margins, Gulf was This

estimate Garyville $XX As down by Mike XX impacted in the be Hurricane was up days refinery quarter, this full another mentioned, approximately additional hurricane lost $XX We approximately days Garyville million We to our million. incurred the million from to impact about Quarter. X.X $XX be opportunity The the took cost ramp back and production. with refinery was to Fourth The Ida. estimate an the million XX barrels. was to for impact throughput was

lower as believe the due with utilization the the also second refinery our primarily in planned strengthened earthquake Second roughly include demand. of utilization opportunity increase lost to Utilization XXXX. at rate region to shows was higher Slide prices. continue gas in Quarter X natural to was strong of flat Coast million would after higher to XX% one midstream which utilization versus have impact the expenses The quarter, approximately second $XX of the change in in there hurricane EBITDA Operating Mid-Con saw quarter were the reopening impacts. our third and third the XX% due the in to back XXXX. quarter, capacity compared XXXX, If been quarter. the Gulf was its California idled which adjusted West with continued for was quarter to additional We associated We Coast week. Angeles Los the an in

of Our flow Today unit midstream the in with announced segment million. distribution, and a stability special results to more spending and holders. amount from increase resiliency supported the cash cash consistent lower to quarterly the continues capital return previous and $XXX The decision strong a MPLX base demonstrate profile to X.X% partnership's earnings distribution quarter. approximately

additional presents the XX midstream mentioned I the assets the Fourth to $X million of As in Quarter. third elements this quarter. in our also incurred quarter Hurricane Ida. cash change for was consolidated impact earlier, was with impacted Operating $X,XXX,XXX,XXX an quarter. in region the the our this quarter, We position by flow $X were million cost be cash estimate Slide in the

capital $XXX payment As I in Also, capital amount mentioned working of plans. in income million the does cash flat Working this source an this quarter, and $XXX incremental changes the our a tax earlier, taxes is include was this was receivable quarter. into effectively chart. cares which excludes not and changes pension of in this of to included bar approximately million our

During the quarter, $XXX agreement. by Marathon debt MPLX interCompany or its million $X borrowing MPC loan by additional funded under third-party reduced the billion an

total Our the There in the million a We using We about of our million accrued Speedway decrease $XXX taxes. tax use payment our out receivable. of were of to by have billion balances income a tax other we tax cash gain about balances. $X.X $XXX a represented for of offset billion driven due a primarily cares charges amount made of $X.X in were of able accrued. tax

we the up refund quarter, our billion $X.X [Indiscernible] During to adjusted billion tax last quarter. $X.X from

billion have of million fourth XXXX that tax including obligation, Speedway remaining, There XXXX to from about dividend the of of that in of our end We to XXX of the received the Act of with worth the transaction. in quarter expect Speedway's quarter, half to capital to proceeds. updates speedway shares continue quarter, the the billion CARES million deploying returned million status balances shareholders a XXX refund and million We for $XXX is MPC of we $XXX taxes repurchased to respect such return, $XXX through million can offset used to be promised $XX due progress At we proceeds. the quarter, and on we cash provide and MPC deposit. October. our investments, which about using Last $X.XX remaining higher the expect certificates receive first in refund paper our returning as total this use in against $XX.X and offset of had short-term we to our commercial Speedway million in quarter identified

comprised in repurchased the end is We quarter second quarter. billion incremental of This shares of $X.X the repurchase shares end through million third of the have in plus since the purchased $XXX an additional of October.

repurchase program. complete As with our billion $XX are Mike we XX% indicated, approximately share

economic and buy We allows share during program To use progress a an the earnings the updates remaining redeem to complete be of we on are us billion on we announced approximately provide to continuing also complete provides XXXX, our Today, It we given we to makes sense will This debt. progressing that an well of calls. and our time. position. million mature $X.X $XX management and interest notes as these in maturities notes roughly will ability we'll savings, savings. lead short-term years. environment early, This rate we billion this redemption, as no this of interest at reissue immediate entails With two the of anticipate we X to the to billion this meet XXXX. objective. to us $XX are able ongoing the basis that to that our repurchase commitment, $X.X next have over to previously available cash notes discussed the remain to of repurchases the end steps payment additional have tranches have by current appropriate options redeem cash to intend we The

MPC, redemption approximately XX%. continue lower notes debt-to-capital ratio. quarter for was ratio this Our to third these excluding will of The MPLX,

our investment-grade that manage we to we ensure sheet, we credit balance As continue our portfolio. maintain

Quarter on guidance Fourth we outlook. provide to Slide XX, Turning our

in prices $XXX the to an for per barrels incremental of roughly projected to in potential $X.XX turnaround throughput per the X.X current expect gas by have total estimate Quarter, the the per will Based in projected $X.XX be We are barrel business million Quarter. higher Fourth quarter. are the of day. operating impact majority to that natural Planned our on approximately barrel. be region. The million we Fourth the Mid-Con be prices the activity costs volumes Total costs

operating expenses have year. activity expected turnaround occur back previously billion as Distribution costs approximately to $X.X for these are to we coordinated are time is be As periods this during Other the well. mentioned, half-weighted our $XXX basis. are been that be call the annual on expected costs reflecting to the Corporate back let Quarter. costs have removed turn Kristina. million approximately in With million me over to Fourth an $XXX that,

Kristina Kazarian

follow-up. limit Maryann, all a Thanks, permits, we If the time open operator. yourselves questions. question your and a open call as as the will ask that one questions you for for call to we additional we I now participants, for will re-prompt questions, courtesy to

Operator

Neil first Mehta Our Sachs. come Goldman [Operation question from with Instruction] will Goldman

is open. Your line

Neil Mehta

Good question. taking morning, the team. Thanks for

is return. question capital first around The

yourself the leaning then MPLX, still of fair through we or capital by right morning of potentially at the is think this stock, all more one-time it return have end that Based now, which 'XX. that special to that on tie going you that $X.X something it quarter to this You in we forward $X.X that is your was you're do saw dividend buying stock billion assume know to or at as going that of strategy see likely into into ratably to a billion and we came nature? what buyback should happen is be back

Maryann Mannen

Neil. Sure. Thanks,

ability. buyback about me Let talk program and rate the question share your around

Just reminder, completion the Quarter the Second a not maybe our as call. did earnings quick get of we until into market

the to more weeks call with little really a and tried hopefully timing of believe do doing So full seen have that share earnings quarter, a the opportunistic. I didn't been. in given will, we we to we've opportunity you be post We earnings go remaining as you. we you've have what if forward, our as our

have. that is assume not that way ratably any So the only in we I would plan

see case, over have I XXXX, I certainly -- the were be will certainly turn to think say, complete opportunities our to call question of for you turn is later MPLX. to set I as no we that if only will of not Mike full the the the can us. that but program, is than the end what ability would we on available

Mike Hennigan

Good Neil. point. morning, I'll second your address

to So long-winded of it question. will little hopefully you to I a bit of meat but get your give answer want a the

that MPLX though from asked is many to get we is, enumerate often we of side of and that's how situation So one result special evaluating after distribution conditions, a as Quarter decided where Third based about move options. where situation coming we're additional address the which provide of model additional little the opportunity on we've business we we have house what's business achieved free financial we the XXXX example capital, question, us form where to side at but growth was But does talked at to it put a after shareholders? and things capital and could have up the needs, cash distribution ways, additional the to in that MPC have it bit capital be this bottom and a distributions bump for flexibility other MPLX one we I'll a to such is as different you the in point that best etc. MPLX growth from going we line on important of We that for MPC. the be MPLX, value base would do Well, this of further. that, of the cash about have that market for to An would the dynamic us MPC here, today, that buybacks, is saw us a can there the now etc. deployment tried amounts that

MPC amount, $X.X take 's unit amount, at since about that's pretty And So the it's that million all been ratable XXXX. special be now $X.X billion. distribution gets it billion because With about will this the special XXX distribution base of went to holders. MPC

to to at distributions MPC, X.X now as addition a that of say MPLX. intent instead and a going at grow X.X available we'll to And while to evaluate So clearly continue EBITDA result to to of from well. forward. more we looking our whether It's earnings the you're look or MPC MPC at going at as also come that, overtime, be base cash to it's there's special, buybacks through continue

overall this sees to everybody shareholders strategic hopefully as MPLX our of nice a as sense to you So MPC scheme here. part makes of Neil? That importance

Neil Mehta

forward follow-up which No. lower X stuff, to quarter, kind we've is, questions. modeling tax think it. we a kind of any tax big is little such lower XX% rate XX That's parts really casing. this of tax given waiver of the helpful, then And rate a type came bit been just part than base midstream, effective of housekeeping Mike. And is rate the One going in X about that expected that Should housekeeping my a on than ' capex, earnings,

Maryann Mannen

question. tax the on Neil

ability actually So you're about the back items discrete other operations million benefit. in contribution frankly, in is of by pension the the absolutely right carry an and that Part driven some from $XX to quarter, favorable quarter. recorded continuing our we incremental

the that the The were a statutory X% seeing M articulated on would as the likely migrate second your you've not as than that, towards higher or of level that basis. R we'll part actually interest, we and see of statutory is improve you XX%. I get a And non-controlling continues the look to we at most of of rate that think see amount not XX% would but against of whether rate year-to-date rate question we

reach will migrate we from would trending toward, X% So statutory but the rate. not we

since consistency. make the XXXX, of adjustment first we fourth this forward quarter But that of First to -- hope your going answered address that in the most question. all earnings will capital. XX%. We I'll likely not the And in I continued will and to the I Quarter that then second question XXXX, tax for making do beginning our have we be around a adjustment bring to of hope quarter

XXXX capex we had saw, to you reduction number significant reach XXXX that for As we're track largely from to a and XXXX. on

as you fourth yet begun on pillars quarter capital of know, do. call, we I when strategic our one we think and or cost But capital committing earnings our renewables, to you normally give to given to for along we not as expect that the you the to are for guidance would as and key discipline. share amount for guidance. as targeting have is be do with We've able we'll strict well with reduction outline that that of We we XXXX

Neil Mehta

Thanks, Maryann.

Operator

Thank you.

Next, Leggate hear we will from Bank with Doug of America.

line open. is Your

Doug Leggate

Thanks. so a everybody. down given every of a of cost Guys a on. reductions, and detail wonder [Indiscernible] us gasoline if Good to morning, bit. lot you've little I [Indiscernible] it part, of price lot about I could you ask for

better transition that and we to, Is you the changes, for As a something you mid-cycle, as stands for after at refining talking what back do today of consolidation. all quantify? mid-cycle see the the business it one expression, the can portfolio specifically What I'm MLP the like EBITDA

Mike Hennigan

Doug it's Mike.

to getting is of As it know very, the that the used very between football alone just enough, from our mid-cycles. the think analogy XX's often mid-cycle. some conversations, say I it's hard previous trying tough I you find call I to let

-- and then most pandemic. obviously not pretty importantly of are because standpoint, about the ones seen, seen high tell you've those some environment, up we've the the we margin a environments the a a and but we do to whether portfolio XX. the zones. the from as So I'd way we're invariably come we overtime, is each is with environment for low and you'll like X-end out concerned see cyclical about calling think how low Doug, about Company set high How I manage feel that XX will versus you me,

leverage, don't our internally, really like something a to a for That's of spend we and you. where we not balance also think I So with. about, lot have Obviously is number sheet etc. time

we're right different a than in normal. situation As about, Maryann talked now

day, position. We We have mid-cycle short-term end to we'll keep we're the trying debating be, do sheet. you around of tell normal we're the don't a good management optimization cash the be the higher manage of frame I think I those such either is around leverage at for that the on to in disciplines going a think and would have balance management. our Ultimately, disciplines future. But end I financial and I to and of that have exactly a the cash ball in it that crystal ultimately scenarios. that ourselves to we're to lot But that Company what going mid-cycle but did appropriate the think we're going a prepared

Maryann Mannen

at here, believe the of Doug. Maryann that we been as can I mid-cycle able And, going sharing, say, things better otherwise repeating that. we're $X.X and to would've control from brings, been always some But reductions we in achieve. been we billion we've better as cost the risk than we're we're to the would billion brings market that maybe that than whatever but cost we what certainly regardless have We us. still X.X opportunities low our culture otherwise of we have was

Doug Leggate

office, fit dribbling I Mike, an to connect on but seems -- latest the kind every idea of us long at my guess to you be the is in we've are or flat I studies analogy. touch ask in where in evolution process. Kenai of on an baseball are these was if going be any you for wonder think similar could there's whether also there of processing we are right the of on that and type I that's level. portfolio and for business am long over guess, the could but touched portfolio I'm to hoping a quarter, MPLX you. the Obviously Thank Give this follow-up that.Thank I I other us the for you. period time. a lot discussions NOP of of than gathering a been it if out has time, these working fair, And wondering over you a just maybe or changes,

Mike Hennigan

we've business, equity get Speedway Doug, first a standpoint, progress, which through a it that know in the of for around. position and system, knows, that's high-cost as it to as the to Martinez mean, to idle situation in process. part, the think our to an renewable refining early time moves don't facilities dribbling that took feedstock completed we I executed diesel portfolio some about in feedstock Dickinson. We everybody your from I sale converted the made JV, long

and evaluating can as we of people the main and the it. trying that disclose very in the call. with we So the are. Doug, we It I that of it a stuff say now to three may evaluate provide shows pattern in be not hopefully or we reason we're examine we decided several and will the of analysis. to we've rule. it you cash would is of market And There's but ourselves reason is we've that's transparent in normally, But free short-term, tell to a we us until to cash something I it margin near to tell want case, all announcing that from where a the this discussions think want to done I done we a timing with the tell that's conditions. that to in well. done. start stated because pretty want portfolio. high general why to to I the main we've future, done fan to parties. our And continue able go the So be. as our flows " hit. cycle is if in things to market advanced it's we our in challenging But [Indiscernible], you, discussions an closure didn't market will tell it? little off in are We're to some this assets big we us that that And continue of We're be to we everybody all normal my execute we initiatives needs this for open portfolio, that continue have may that as robust advanced us. is over here call, things progresses not I ultimately, of the It's decided one you see what "Hey, mind and environments work a time, about disclosed over try not, more bit something didn't respect particular our And saying, I'm didn't works portfolio of And priority the team that to have happen be

Doug Leggate

expression could Mike, extend I was start does have MPLX? should up drip used, guess I just to MPLX wonder press on you that better the if feed I the you but question.

Kristina Kazarian

Could couldn't say that Did again? drip Yeah. you hear just feed? We you. say Apologies. you

Doug Leggate

was I'm point I those drip feed question was was Board MPLX sorry. portfolio. My was think think dribble, to the than My just the expression a extend [Indiscernible]. better I

Mike Hennigan

portfolio cash again, core we'll said We've less does. something and know to parts of There's those unless that. for we mind. going the and we'd transparency we've for think to we it but there's to the deed good I has as of in that that portfolio the think parts that we are the try but move around of the to goes maybe about the we some as value. areas. from our deployment. continue people free generating not The say, The maybe value the bids, open that unpunished. our that We're on us and the going this low-ball assets been time, see than and capital more has like to we're happy that bid do Yes term to believe assets but get lead of I with very detriment no like ask wide part those been execution at what at And core, the portfolio to long time, of them option, not are same is non-core fact keep numbers point. of far the adds continue We're some

be more areas and useful somebody we're at we cash to divest point I The it makes for cash. generating something some We're that working But portfolio and deploy think look we can long else continue will us. We'll longer-term in generate opportunity sense, an to position. free not, in term. if for call think there's manage capital we value. free more where those into is to the a capital the if So good what

to but that and long answer yes, your obviously MPC question, MPLX. portfolio So is matters at the both something

Doug Leggate

much. very Okay. Thank you

Mike Hennigan

welcome, Doug. You're

Operator

Gresh line hear is Morgan you.Next JP Thank from we will with open. Phil your

Phil Gresh

have the Yes. I question to times. sheet Parent you Hey, talked you've coming around X the Obviously, more and more Does to looking want of mid-cycle level lot impact X.X you're cash way is consolidator the forward? about of was leverage think or maintain macro way right The like thinking this the door. a just past, in faster. good any leverage that the balance in parent of in you about. morning. My first moving

Maryann Mannen

It's Maryann. I'd say not. no, it does

tried maintaining as our MPLX. investment-grade We I to are and committed both certainly ratings share, to MPC on

based short debt worth $XX incremental term rate is million interest the on savings. the really the in of on decision Our

changes XX% this X to in repurchase, course that sitting optimal we remain we've at the are move the the obviously continue As we're no But the will on way cash the of at position. the short-term. of I the it's bit structure call, X.X quarter. see MPLX. you But times for lower MPLX. talking complete take at We if we as up a about out. we're about well. this way mentioned mentioned John that will, earlier we'll We'll call leverage debt-to-cap end about as debt and morning, that thinking that as as we incremental about MPC share then the comfortable, this capital sitting at And on And been that at look

Phil Gresh

But Mike just to clarify,

Mike Hennigan

to want move. market the , I what said that to just Maryann want make this I over-interpret to because doesn't add short-term sure

small $XX earlier to interest million take in The compared points such market $XX We getting little the short-term, obviously such basis have cash rate can the sitting sheet. that that we're put on way that a is our the in million can our in in we has put in balance cash moved that pockets. out The a pocket. we on

debt take out, on Does I'm that's long-term debt make a into So are be as that read we that basis. an Don't you it to but it, into we our that you? don't sense what optimization, doing. which read to think concerned look that's where should

Phil Gresh

that as right want times the It X did that the parent for to to X.X make thinking sure way. sure leverage of Maryann make at or correctly does. I qualify just clarify I'm I well, or about sort just

Maryann Mannen

assessment, so that's I a Yeah, yes. think fair

Phil Gresh

Okay. about living forward does way then Speedway. percent know something Marathon reducing the the a post the or which cash dividend you're to with also dividend my but think thinking environment, not of here don't all cash only potential that's improvements flow, burden, if it's its second are the you. the for framework, Thank where I And Again, macro buybacks have question. trying dividend with about flow growth.

Mike Hennigan

so what's but is a a short of generating at how is And discussions our the in MPLX going that's buy earlier, that now Phil,It's considerably back especially in we're from dividend looking mentioned are much Yeah. in going the like been But what place, the around we to priority into the program forward the term, of and lot the least MPC past. coming at considering we're to both through appropriate that is I have. at having year the MPLX. than this level. level shares change we EBITDA it's MPC internal cash for higher for amount the on Mike, while not make We're program dividend

dividend. we going but any it on while before shares, further comments we something our program that on make is So radar concentrate the that's we're to reducing on screen, are first

Phil Gresh

Okay. Thank you.

Mike Hennigan

welcome. You're

Operator

Gupta come Our with next question from will Credit Suisse. Manav

You may proceed.

Manav Gupta

some development I cash fuel means, I'm you trying just more that inorganic is something or renewal to even because renewable to cash very accelerate quarter-over-quarter, been there is can portfolio. and the through just if is energy. development, be can that or the you acquire other assets could portfolio part of we're open forms here under understand JVs of given actually accelerated what be your to? since could the which possibility seeing focused know cost have building, control Mike. taken you a Hey, the reductions, you But you build on over, have optimizing

Mike Hennigan

open We're Yeah. it. to certainly

that constantly a you team the and on Obviously, as the but and we in people that's at don't as to things We we'll as opportunities whole yeah, have deployment, it. count found looking for we there continue opportunities inorganically. both but are have the the our not is people energy a we MPC plan in that have other base we of short-term, looking mentioned, of we count all we the alternative out side look team on well the of options. think at control that on renewables, worthy In MPLX anything and

evolve these haven't other the think the like a I develop opportunities and have think, to we all but evolution of of we're But time. worthwhile. we looking continue technologies, time, going anything different Some are that over of point, get it. said, over was that's And lot some to this future found up I this we parts into we're people going to going energy certainly at to I thought until open to

Manav Gupta

think opaque there, here differentials meaningful follow-up obviously quick in a Canadian refining, of quarter-over-quarter, sour differentials. is we're quarter it's are we the tailwind the $XXX And seeing million what for widening widening the volumes were seeing you. a raise during some Obviously, I some

and the plays sour differentials MPC. into help and for there you. us So outlook how could if heavy understand Thank that medium you

Rick Hessling

there. It's Hessling, Hi, help Manav. can I Yes. you Rick

here that marketplace. in seeing widened, You're heavy correct, in absolutely you're have near So the the term so medium sours, differentials

puts bit. We've the We've pivot a marketplace. we'll that's decision the always here, what certainly there's takes lot the is that market on a opec as Thursday and SPR forward, in expected share outlook. got Going way certainly out ie, that of intervention, would political there releases in I got plus the

makes to position it a truly take got very and beyond tough it above So production. you've that

the production or a And which how Capline in reversal Gulf affect other these certainly on will and it Where then then here out? play but got line wildcards demand. X side, have differentials few that production, recently, You've several months. the consumer go? will is Mexico demand robust. Canadian you How lastly, looking on flip will

puts of call going forward. to lot Manav takes a really and hard So

Manav Gupta

you Thank so much.

Rick Hessling

welcome. You're

Operator

question Our from Read with Roger come will Fargo. next Wells

line Your is open.

Roger Reed

you. Thank morning. Good

Mike Hennigan

Roger. morning, Good

Roger Reed

Good morning, guys.

conversion. First one Martinez dive its on the into here, Just

go earlier, to feed you stock you make on there looking feed And how to and other permitting, remaining don't sure have at a how words, not hurdles needs etc to that's full little there. essentially about XXX% surprise specific rates a you're what, stock secured we're Just normal years run to are bit the X a where you if compare then still from process. would talked that that are because any In relative regulatory away are year-and-a-half.

Mike Hennigan

talk Ray back come I'll the Mr. regulatory the then and Roger, I let stocks. on feed about side will

Roger Reed

hurdle hey big Good morning, the us. Roger for

for There period. was so projects. forth. work. report milestone miss stakeholders, want CARB, actually impact some was a and was a an support It's XX-day but that's of pleased issued came of major our I interpretation. not for to scenarios piece very insignificant I key and are out October a particularly and for The page weeks our a to the this. little few comment initially a This XXX that, strong in answered-the-questions public that comment bit was first hurdle see is ago and on emphasize us environmental XXth, of

permit for So X that the to want is receive that's going. to done to encouraging. work X. allows go land-use the ahead building And we'll what on those At end getting we're big material get and trades the with days ready we construction. monitor is that that's emphasize hopeful And the we've any put over result, what and I comments the We're accordingly. start deal us the and engineering, to XX that ready we because phase that to stage project phase does are a and is next address got

XXXX phase As in far diesel X outlook renewable is online. as the project on it, where second half we of our remain we've where been the past,

Mike Hennigan

just first to Mike, your on with off add Roger question And feed I'll it's stocks. on saying Ray

continue to commercial that. discussions have around we So

through like of to looking regulatory us else stocks that to respect color then We're comment mentioned, to it the to that hopefully and know and we market while been we'll now this kind important itself the color. the you hopefully able and of Ray having feed this disclose that talk, back are. And But everything said. give through point construction. to public you I kept lot for We're next just important to where we're part to process, Ray be have these out doing project. we're by wanted We for to We've of capital in close the point then out. I asking able to get We're out more holding Ray be Once give been process. capital. as the as way that. to we're has an will go to the forward we'll that, at ready said, this a is we vest like But we'll more some play time what keep discussions. with

Roger Reed

appreciate I that.

standards, out you'd of a already the understandable, cafe The units with discussion curious, expanding Kenai other probably you you big solution want what direction just here? with look what the of looking issues interest etc, I'm some refining, was it or at footprint go potentially role, sale is generally you of to you're are question you the I refining the had, there coming shrinking from opposite speaking, EVs, and there just lot bought up to and took had on various to refining earlier just different X Unit, some you strategically. a at you of we're but and in any for next X out how as say years, did curious operators transaction this the the look for over shortly I up clean from you on before

Mike Hennigan

say refining it's to so never priority Roger again, I'd position. to -- I Mike it's high Yeah, for us but like increase a never, our not

for priority higher the energy to evolution. increase think is us I our the in opportunities

as we advance things ideas looking the that little of growing But percolating next bit in gotten We've will a the probably doing the us opportunity. that the are more in general, over portfolio on be where we're couple leaning in head general towards to see decades renewables. You if a some in we're going rule, things few right to balance portfolio. time hopefully get and a other

Roger Reed

Alright, great. you. Thank

Mike Hennigan

welcome. You're

Operator

Our next with Citigroup. from question Rao comes Prashant

Your line is open.

Prashant Rao

or higher, I table maybe some had that produced like thinking aviation on Is a you're about coming sort that appreciate looking another are movement into with in CI for feasible, that's And of you that taking news, now. score to if ties we've are only what's us where to bandwidth could emissions is I it with But If follow-up also or vest the Martinez. at on Thanks out we tax looks not sustainable right could the here you recent of close in, viewed question. on be bit, range credit of and fuel, for help sort where way, maybe it given but blenders of that scores and CI perhaps the like, Hi. realistic be factor. out reduction going could keeping the I an it on-stream. will where the tie or some stocks Martinez a obviously feed you about talked

[Indiscernible] have You'll well. credit BTC as at

does So you purposing think how the that does how asset? that about change

Mike Hennigan

give then on etc. Prashant, more I'll little SAF, color a start off and let Ray I'll bit you

soybean Ray us, to first to so we're opportunity the I a for Martinez. little SAF, more But it takes as we assume feed bit whole Obviously through for a The we this highest little market right item project, the the period, comes we as to but and provide long on vest the I'll regulatory theory, this far will discussion imagine Dickinson could in a to with when now in are worse because XXX% while let close and stock said, that some some are color for over a open period of on opportunity get going give as puts and you short-term, keep CI that. that is we here, we sanction the better we feed [Indiscernible]. time, assumed side the we looking

Roger Reed

just project, isn't in and to are of the base SAF Mike. scope Sure, for in X, Martinez's building. want X, engineering emphasize the and the we phases first X, I portion what

Martinez. that However, at an the we said that, add engineering that, currently support would we're to for doing be having believe be work opportunity CapEx to SAF far what portfolio. as will to as the that Martinez And

knows there eventually and they for I right are regulatory renewable drivers SAF but SAF builds think the product will not diesel. economics that economic will that now, compete as with Support everybody We for there believe be demand. this.

We're in for the focus SAF, that's not next but Martinez. to want plant. our so I evaluating to building emphasize that just that's And at two-year future our near-term, a definitely But in we're enhancement our, why Martinez.

Prashant Rao

and on are would with that. to of us I'm to midway and you or our be maybe might right XXXX on know announced. just you in call, my to on able tack XXXX get expect capital proceeds, into think on to I can before What That's of bit you when maybe definition this Speedway second timing I on I've think well out need potential progress billion I bit, do first different asked in eventually is wanted one, and helpful. then through of XX% know very it we that question, talked is need those making just previous view organic now. And better on or to framework Mike buyback about more to answering the us I great just now questions look bit get on a and specifically, have through touch help I The that but flows. the you that you give buyback I to expectations can to a this group allocation, good debt. mean, a for to Speedway that. [Indiscernible] XX both Maryann, Thanks. it others -- question. take through you be see a further and Do And becomes the a should for back cash you out this shareholders it's and of gauging be guess, there return a about proceeds something the the need

think I that'll be helpful. Thanks.

Maryann Mannen

a on the of billion, in no we've than that share right, couple you're And to terms short-term XXXX. hopefully of just sharing consistent complete the of XX% of as in the repurchase we shared reduction what that we're you've Maybe and with just debt as certainly Sure. later been $XX to Thanks things nature. question. of end our heard, for you, state way here, with

cash. before and $XX before you content I a that you we more use bit to progress more we I a we'd remaining Mike little what pass begin to billion in color little for to of is a to little think about around $XX provide more get more completed, specifics the what that it further along We'd been we've add on to I'll think we've we our back share any want give to that, you. how around like repurchase think you tried billion want and share see structural discussing with

Mike Hennigan

just I that inorganic. just of ourselves at program. to We're we're looking the said And opportunities or think not trying [Indiscernible] get Maryann it well. some maybe ahead very in are

the definitely continue We excess have in at point was the We call. look to to cash that opening that.

As hope to through be margins our to continuing more cash generate recover, business. we

So we here of as we grow now, and we're to continue us, keep front want get looking disclose business. it's want opportunities know just return too more. were balance ourselves. committed have going but we I trying in we're to It's and opportunities and saying executing opportunities because made have like we've as so we'll the the look a not as, ourselves commitment program. to Obviously, capital time you've for I just ahead move we more along, those we'd beyond earnings. to don't earnings, seen on continue on return want in in more return to cash grow a understand we question, And we some know to very the to as get we we're good of opportunities. execute to to return to We and for your We spot, of see some to of a today, there's be

of balance So it's execute. and ourselves to trying ahead as get have we forward to just move not while we time just the that

Prashant Rao

the for you Thank Makes sense. both time.

Mike Hennigan

welcome. You're

Maryann Mannen

Welcome.

Operator

Our with Barclays. next question from come will Chen Theresa

is open. line Your

Theresa Chen

there. Hi

will want a remain that up as used or environment that different transaction Mike out it the hands. your it refinery a that your the the petroleum to to there I expectation own leading be could on difficult me First follow happens is operating to once Kenai. decision purpose about for Kenai exit so discussion once changes is

Mike Hennigan

having, discussions I out. that I'm discussions earlier, ahead couple to different Yes. interested such said happen, -- plan in we'll of question.We're to -- a so of that But going in don't it the advanced some want if in with we're doesn't just I Theresa, to on to just parties on disclosure. advanced get we're today's that when some it and have to doing to that views and call you're call insight we'll comes it it it worth the was have happen. obviously you have feel We'll the not to closure. I And ignore right that it may marketplace again, case deals something to just try we knows if everybody it it the say and even come that does, out that it's well. given we it If timing didn't different like in may the give it this will see tell does you felt discussions, able that of of talk then just happen. are how where was a lot discussions we'll as happen, it plays just further be about we

Theresa Chen

about in in back going earlier And on line-filling, months. the cap coming Got a couple line I reversal Line current comments Rick's believe it. to of fully X, and rate

part repurchase replacement, So reversed on run at differential who barrels Patoka. just XXX,XXX per and was system, the it the you do will rate incremental that time from pretty as initially heels I was that? and in of wondering the if what grow over bring the X operator have the owner low, Line think is to as could day And capacity you expectations it

Rick Hessling

Yes. Theresa. Rick again. It's Hi,

From truly We or recipient. grades our coast of Eastern But put and from answer be Capline we're significantly. it lot what point, truly, your to move depends sitting the vary on So grayed, already golf and to light the a obviously going will volumes can are those a excited be on can the I've about are as line. And heavy volumes us truly on have perspective, on based Garyville the then lastly, econ. and and Capline. others, demand of the stated.

Theresa Chen

Okay. Maybe I if just could clarify.

of believe I re-configuring reverse with XX initial the X the out So pumps.

to had be that done more volumes, you for quickly. If laugh pretty to can more reconfigure

Rick Hessling

Theresa. have on that to defer I would MPLX to

Mike Hennigan

forward of is Theresa, to Over issue think be the is Coast. The supplying there. is personal that you Eastern as project genesis Cushing The Yeah, as belief to more to the the top going so Gulf this doesn't it's of on north, the be give go can whatever we expansion there going to more to get point, Mike. it's ability like know, have pipe, down time, that project if whether it coming up comes out whole from looking a is the to I'll ramp Rick's. my that mentioned. required, look you supply of the take my get to I optionality going Gulf for there's but grades interest is advantageous pipe was at Rick is more

selection Rick As some our facility far Garyville the grade would of refining in in as in opportunities grades. interested well. be as is Gulf of area the rest The as mentioned, Eastern interested of types different

is So the into get do the of get that expand. And I more crude going bottleneck system. believe time to and we're time, to it over that personal over going availability on believer

Theresa Chen

you. Thank

Mike Hennigan

welcome. Your

Operator

Our next from Connor with Morgan Lynagh question Stanley. will come

line is Your open.

Connor Lynagh

related, but just questions, Thanks here. got I at they're them and for I've I'll once in, think ask squeezing relatively so X me

is, think So of think margin, from some out you through flagged obviously the terms know also have to capture however, it. that might guys you or I any throughput figure how you it? want that in you that as you you've that trying of years couple legacy operational major is already Do two But well the lot your more next to people can OpEx. improvements capital improvements have a want I significant upgrades for year given And we we've here. been X just any the on to any the up, look don't or should freeing of framework, here, for over the question there are you're related but that thoughts go you enhancements refining that flow flagged question to define about have rate to framework next considering savings or over mid-cycle business here?

Maryann Mannen

I'll maybe Maryann, here. Connor. Hey, It's start

as great referring discipline, cost the that as we've of X Kenai opportunities of example that a on optimization. those commercial work of I done lot what pillars, said, as you're capital our sharing reduction, you we've been think see another part strict is asset we've to hopefully

one quarter-by-quarter when those believe What forward, obviously think for being those a look we're as by to you'll are vest will I I'd keep And that efforts to of them. still commercial you for the realization call we reasons. the we team. say we little capture that opportunities, have the on competitive improve that you commercial mentioned we manifest forward we to as and intend opportunities earnings see us demonstrate we've the bit, ongoing shared, continue close through to And of as the out coming the those been we appear, go quarters. to is they actual in there

Roger Reed

-- is will Connor a refining thing the to Bay regarding at the crude unit, before, probably remaining crude the have plus spending but modification biggest 'XX some scope in Galveston point. that and heard specifically, dealing project. this address 'XX the Ray. is into refineries, second complete refining your Star that's that the and question this sour that the hydro-cracker unit go-forward there We out thing go to spend of the remaining that have is the that reset one briefly refining the on project I'll biggest with you've we still on

Connor Lynagh

right. I'll Thanks back. it All that. for turn

Kristina Kazarian

in any there other are Operator, questions queue? the

Operator

at We this no showing time. further are questions

Kristina Kazarian

thank you, Petroleum topics Well, joining in questions you everyone much your like you calls. team to reach today. interest out us for morning? Please available for Should Thank and so this discussed IR will be would your clarification take Marathon you on Corporation. additional or our have

Operator

conclude does again participation. your you Thank That for today's conference.

You disconnect at this time. may

Marathon Petroleum (MPC) 2 Nov 212021 Q3 Earnings call transcript