MPC - Earnings call transcript Q2 2022 | Marathon Petroleum Corporation

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Operator

Welcome to the MPC Second Quarter 2022 Earnings Call. My name is Sheila, and I will be your operator for today's call. [Operator Instructions]. Please note that this conference is being recorded. I will now turn the call over to Kristina Kazarian, Kristina, you may begin.

Kristina Kazarian

Corporation's XXXX Petroleum Conference Marathon to Second Earnings Quarter Call. Welcome can that the on accompany slides be Investor this under The marathonpetroleum.com, call found at our tab. website

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

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

Michael Hennigan

increased Good In recovery, Demand imposed up to and the for morning, transportation Thanks, its the resilient, quarter, travel. Kristina. very the demand part driven quarter travel. mobility the Diesel restrictions Jet lower manufacture. we by same a with to of summer driving everyone. globally to a remains our was Gasoline quarter demand in the operational in of desire activity continued bit quarter softened fuels resumption due market trucking the season. nearly pent-up after remained the largely second demand strong from fuel strong demand due by of XX% volumes. driven through the the removal beginning year, last year, start the second to resilient

third an much crack to $X.X strong at saw in This and quarter, low optimized and to feedstock our to markets, we order impacts the fuel we inventory system expect optimized supply, the of in customer inventory through scale, second details meet adjusted tight utilization. footprint to and related full we uncertainty for supply billion the demand, possible. levels. EBITDA provide as transportation demand results. runs this demand. an of refining driven incentivize to as in to high this our forward, global But We continue sanction by already as the system will we our Maryann During meet robust you levels product quarter. refining tight slate of the respond resulted walk ran quarter spreads on top customer around into potential Commercially, the looking our market to

to what improving will commercial strengthening running the performance we remain committed a X low-cost We performance assets. allocation, priorities on can reliable, previously we execute safe, On we control our competitive continue of the our to system, outlined. capital and

health in by want we're First, can operate. assets safely deploying take employees ensure safety support the and and communities We the our to of going to capital. operate we care our of protect assets maintenance we our which

Second, the we're secure, the sale, stated will And program and that in $XX committed capital past, we've dividend. of the level once reassess the our competitive to as billion we return dividend. growing resulted from we complete Speedway a

a see this as on as of Third, as the we well return return capital business.

the track. the of enter remains capital half year, our we second As outlook spending on

be capable renewable day We to to nearly progress continue barrels into the year-end. the with of first our targeted the of Martinez diesel bringing complete facility currently Once the facility is a completed, by fuels facility supply be market. of renewable phase mechanically to expected XX,XXX

In facility We other and of return this return objectives, projects with the opportunities coming such At timing frame and like incremental earnings and on And quality to $X.X as increase to announced our air of reduction competitive the opportunities generate the also the repurchase our our continue we call, capital to cost shareholders. a to $X JV capital the we permit. months. be billion upon competencies that out our today, we build and able dependent look separate authorization. the since the a obtaining We'll The advantages call completing for returns to I'd repurchased in value. billion look point, close Maryann. turn months to against over shares. have and are expect after drive fourth, X Neste shareholder last for to time X JV the executing to And to first share closing

Maryann Mannen

Thanks, Mike.

In to Moving perspective report we June, published climate annual our report. our sustainability on efforts. our and sustainability annual scenarios

X, reduction an We Scope continue emissions, a emissions. XXXX, to XX% greenhouse in and have greenhouse X targets. Category intensity reduction our we make gas reduction achieved absolute gas and progress X on And our through XX% our Scope Scope XX in

on with standards, dedicate hold and take provides them set perspectives objectives, we results. which the then demonstrate resources insight considerations meaningful to some climate-related accomplish accountable Our TCFD aligned to strategic and scenarios into is of ourselves

climate-related Our continued ourselves, stakeholders that these risks. which shows on we investors XXXX. set we will on that and sustainability interested for sustainability reports We illustrate reporting been goals believe have resilience progress the other and have to our report extensive strength, company's since in adaptiveness the financial disclosures find our

of Moving provides second quarter morning, summary of we per Slide adjusted X This our to results. results. quarter a reported share second earnings financial $XX.XX.

to by $X This benefit EBITDA XXXX a EPA. $XXX capital changes the quarter's related to exclude and Adjusted the excluding billion. operations, favorable working was changes $X.X cash nearly was XXXX from quarter were for results RVO in the flow million billion adjusted almost and requirements published

and was as approximately an Adjusted shares. dividend returned have & billion and EBITDA, repurchased from higher we and of increase sequential of Marketing. as July, change well sequentially EBITDA payments net million first Through income the last between and billion end the billion to from shares we adjusted Refining Slide by through quarter, $X.X call. to of the in repurchased primarily shows earnings During quarter our reconciliation since X approximately XXXX. XXXX adjusted the $X.X quarter driven the $X.X $XXX EBITDA second shareholders of

of quarter is Our refining XX%, in last tax $X.X quarter. the tax this rate for marketing provision larger the to billion. second a quarter of The component earnings resulting in rate representing a higher due tax end was

provides Slide of Marketing X results. segment our & an Refining our to overview Moving segment.

of was Capture meet safely and by of on to ran and reliably. market. XXX% in a focused fuels at pre-pandemic R&M strong in quarter expenses barrels versus higher processing gas Martinez. Refining prices, from team at XX%, were natural quarter, first back closures This refineries $X quarter, XX before commercial is of volatile the a in day team reflecting market Operating Gallup X.X per the the primarily in same were During quarter. result throughput XXXX the our approximately higher level the second utilization crude our driven approximately second demand. which per MMBtu million our supplying achieved transportation was the

cost in the first higher have some of cost. seen able While almost increase we we the mitigate impact to have the by been of has driven half been of energy year higher the prices, entirely

operating our bring elevated in quarter. system barrel modestly We in continue first were the higher cost Distribution to $X to per we utilization, second expect due costs costs gas made which quarter operating the to approximately to sustainable. down third volumes. would reductions believe we With higher are to resulted versus structural costs quarter remain prices, the the higher in higher natural refinery

Turning were capture results key quarter, overview to few this provides by our quarter impacted margin and refining marketing of factors. Slide a this our capture an X, which

due lag market of our capabilities distillate during product ability the part our during in the prices. prices to a to to we physical XXXX. But market to partially translate our leverage the strong months a XX% continue headwind volumetric Slide part our change offset of basis. products as And the quarter a responses. headwind EBITDA capture backwardation incredibly as and versus first into prices. this X gain able well an robust Secondary X our on indicator Midstream Product portion created barrels by margins volatile be more the higher logistics in light of higher commercial This higher prompt gasoline a to to was quarter. of product shows time, as across was due were

consistent MPLX of continues MPC previous to demonstrate discipline. from the capital a stability resiliency earnings remains source strong commitment by and durable a segment in Our earnings to with underpinned strict is portfolio. Performance operations and quarter. Midstream the results

flat the XXXX, been a first source was Working roughly this from increasing we expenditures and capital oil investments saw the crude crude related inventories. to the authorization. of elements throughput, to working change free our $XXX second quarter. related a for flow believe quarter in has benefits significant cash billion oil offset was Operating As an incremental XX for cash $X announced the to approximately to unit the flow, will consolidated MPLX Slide unitholders. we return of the capital working Capital in flow. higher its have an to totaled in of $X payables capital. quarter. Since billion million capacity build position MPLX generate quarter, in excludes quarter cash as prices increase repurchase in capital Today, presents continues changes it cash which refining by

by is on This We our to XXXX. barrels capacity the projected increase Bay to which continue crude to refinery expected per at project XX,XXX early is be completed spend day. project, STAR Galveston

renewable and the to We of are progressing year-end. facility expect mechanically the by first be fuel complete conversion phase Martinez

in $XXX returned $XX.X billion short-term the of our million repurchased through and shareholders shares. of to billion MPC worth MPC quarter, and approximately the quarter, cash the investments. had $X.X end During dividend At approximately second

mentioned earlier, dividend. to we growing Mike and competitive As committed remain secure, a

level. reduced shares program, this execute for Since has complete capital of We've $X been of XX%. authorization. We priorities to and time, how to authorization. commitment. year. this shares to over share determine we MPC million we objective program have an approximately $XX approximately in this incremental billion meet at this or remain billion repurchase count Board's price continue work May the than have on to per billion the our and share. assess repurchase launch of We'll reassess through received by completion we Our of a our environment program XXX separate end the XX.X might allocation XXXX, later will Over approximately no against repurchased market $XX share share approval the we dividend the the track average this Upon

On guidance. outlook. XX, provide our to Slide Turning third we quarter

representing to be forecasted quarter Utilization turnaround to barrels approximately expense than crude expect Planned with throughput activity XX% third volumes the $XXX million is in higher turnaround planned due day X second be projected X.X lower We across activity. regions. roughly utilization. million all to is of per spread quarter

for this third third calls, weighted rate think we reduce activity elevated activity minimize expect half mentioned activity XXXX. capture on is throughput the our turnaround quarter. we've to asset Total is level guidance projected safety planned achieve may to back scheduled than yields. integrity the but not balance lower and optimize earnings the catalyst on work, compromise our light do are for be costs we of this our always could to impacts, our We'll barrel second for the also previous As the quarter. quarter be we In reflected and in turnaround try is quarter or cycles work we'll $X.XX product but Turnaround to maximize maintenance economic ensure coordinating optimum, per to operating

driven quarter. throughput during which We the to higher in the project cost impact primarily as turnarounds are gas expense normally on expecting occur natural third This limit operating elevated of the by well work, as costs slightly higher coordinate to is we reduction.

historically costs. reminder, natural a of As has represented operating approximately XX% gas

to sensitivity transportation sensitivity our Corporate made to for a our will much system to areas representing third Our costs area. stay capital change have $X.XX and outperformance, in $X.X remain and demand be natural we we to this the every million expected committed drive low-cost of to quarter. commercial to $X equates continued million the barrel gas fuel advancing EBITDA $XXX per shareholder the steadfast that provide initiatives market our we execute of sustained to approximately annual Distribution closing, optimize in for to to as In plan expected on of focused to We per drive $XXX of as against costs continue are our be priorities approximately allocation reductions requires. will approximately value. cost. are MMBtu. billion This

Let me Kristina. to call turn the back

Kristina Kazarian

Thanks, Maryann. [Operator questions. Operator, the for Instructions]. ready we're

Operator

[Operator Instructions].

from Doug question Our Bank with first Leggate will come of America.

Doug Leggate

buyback this you I less if the the we've Mike, relative asked to yields of structure MPLX. nice MPLX? in now as restructure but wide about or any months, been remain ownership that more last appropriate, their ownership PBF before, see wonder of I've very MLP. guess, the yourselves and through appropriate seen there's couple Obviously, and between you've to reconsideration to the of I Shell the know you be Mike, I back. just come

Michael Hennigan

their in something kick think where are with Doug, other that The performance, going before. out around this situations back that I at to up think, a little off to to are. rolling the well. it's we we mean not have pretty continue conclusion it. some continue we investors Yes, to structure the itself, of have We're are to people with pleased much starting we cash different to have MLPs, about come that's same screen. those But for a It's talked look quite MLP's we obviously, MPC. situation we bit, we we time than continues for our as turn but radar favor

it's at, Marathon think the But day, structure So And end Doug. have it we something works to family comfortable keep the for have. we're with MPC MPLX. and still we the at looking the that we both of

Doug Leggate

Okay. but I that. apologize. I I latest to on get now unpredictable, wanted just thoughts your

you. in to of which issue you're XXXX. thank I a dividend, is business, the then follow-up running advantage able haven't you guys think, take increased reliability really of of to the peers environment, that of way mean but be to the the guess, related, base also, gets demonstrated the you sustainable kind since I So Mike. to operational My some your which I speaks

Now proceeds paying cash flow you the I isn't of MPC from about at understand dividend wanted the to the you the But free your get redeployed. is, MPLX, point which I today, all. means X/X basically dividend get distribution about Speedway guess,

right I'll flow however base you it business you consolidated at give So to a it? measure dividend of a think quite earnings cash is to as that. relative the However at you look if it part it as to seems the steer what or want dividend you the dislocated, to like. us you I of just can proportion? base the about if wonder want level But leave

Michael Hennigan

know Yes, I Doug, last people the have some it's where us on of calls a question. been are we And good the asking couple on dividend.

the dividend. right has the and have billion I'm were buyback or maximize our stated the that we if we our intention. volume at that through think in place. trading That's then program we reset and the complete execute still pace programs we $XX program. Everybody We're $XX if which can and to and the I'm wrong, I by seen guided going billion that's that share

it's We we're So remarks, competitive that constructive are in grow that talking everybody's a little this been committed we pretty actually far a committed, the program, mind. probably in dividend. close want to we're executing It's than market taken we'll that dividend. as in way, more and as to said to about our has patience well a been longer we show our this return but

prepared As at we remarks, Maryann in the back bought of a quite bit said the $XX. shares

releasing feeling And we're of not So pretty good general. about the where too on we're that in off is our the dividend. market to head far the

Operator

will Mehta from Sachs. Goldman with next Our question Neil come

Neil Mehta

Really this quarter. terrific execution

been Western The out was as widen for different first market. couple question volatile. the a opened But has on had crude It's Brent-WTI, obviously differentials basins, seen crude actually Canadian I of we've well. up

positioned some commercial as that volatility? is capture well to perspective the do driving yourselves And Just do love of of think you a of your perspective from of opening the differentials? you see what some

Michael Hennigan

Good question, Neil.

Rick that. me let Let take

Rick Hessling

of both WTI are seeing because in volatility markets, strong of Yes, seeing in lot and production first. the great both TI a on to specifically We're those Neil, question WTL Permian the really and specifically. we

barrels and if Coast. And where to to for medium XX-plus with Gulf of TI Coast, of is of in our to the a commitments to has There's and TL. look the us with specifically put SPR One, we WCS that pressure believe So needs Neil, take on reasons. clear widened Gulf backyard in variety positioned Galveston significant the at then have under. better barrels MPC nobody out that's the the happening, sitting sour WCS, and you than really Bay advantage the on pipeline really Permian. positioned And

barrel, the compete early the needs So SPR were medium releases sour it directly to with medium predominantly and sour.

to an historical that and perspective, space able West the advantage X in we of from MPC have Coast. regions, out So We're the now of the Gulf Canada. take all Coast, Mid-Con

environment good as well going very we'll those feel still positioned If that capture are macro advantages. anyone to as those be about we So open, forward.

Neil Mehta

oil is Yes. talk and blenders That's come however, come of the little renewable your We've now extension the great down. bit. And soy LCFS, off has of oil vegetable color. And seen tax follow-up an diesel. has bean there's on credit. views a

can view how the go of and So that pieces into about moving of into of economics the talk asset? you your that that back the Rodeo all ties profitability

Raymond Brooks

Okay. Neil, on this is question that. Ray Brooks, and I'll take your

contribution than headwinds, then You're the little pricing, RD from would right. the some board We've diesel is of a prices. lot lower recent bigger contribution There a renewable got a And LCFS of anticipated little are a there's bigger higher. a prices feedstock to moving parts from have some economics we tailwinds. price RIN across

a moving where the take when pretty Dickinson minuses look pieces when I'll But is our So the puts the in in. tell expected the with you much all equation. and we and lot to thing project project, like takes, you come we're of par on at one we plus together,

that's our experience so with Dickinson. And

with cost like same focus Martinez what to regulatory attention the do and the is I to thing price we to going do really all we the lowest optimizing of to the I'm carbon of the what our intensity our feedstock would expect We like specific contribution Dickinson, process. forward. about be. by feedstocks going feedstock on lot to One pivoted pay slate feedstock slate, things talking and whether most type a we lowest acquisition the I'd though, to is prices, really outside we control, of is add, that

essentially bring was that feed bleach to pretreatment there. The in be Cincinnati refined in slate Nebraska at oil, pretreated to our a used other thing fully we did we XXX% is facilities that, even deodorized supposed soybean though and project Beatrice,

parts, can we best But control the the things the we're just on doing can EBITDA. lot of we with to deliver a concentrate moving really it. and So that

Operator

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

Manav Gupta

we Mike, when in environment you actually Investors respect lot versus you to for of a bought a MPC. MPC. But you over really that. different capital discipline are took

You volumes midstream footprint actually in have materially. basins where Permian best-in-class and are growing the X Northeast,

the is seeing midstream projected spend at from in raise to E&Ps regions. question . the or would CapEx for right to benefit growth? level are more inorganic, My the We willing be organic volume these you opportunity,

Michael Hennigan

Manav. Yes,

call we figure that in obviously, we've time Marcellus a are opposed that today a think processing mean, the announced I looks quite advancing and plants, up to little now to has bit well. did there. the like knows, a mean, plant concentrate Marcellus, answer area. said as yes. the constrained But to trying in We earlier for couple and kind I area prefer do those for is MPLX definitely growth the we also to would of looking another down MPC. then And that of on to probably everybody to going up both at value it the time we pick we've Permian to of Permian which the some out basins. as the to we're in concentrate announce I are in more as ways is in start create one that going and level been

trying in Hopefully, So both the involved everybody I in to find that growth mean opportunities more yes, it, as basins global situation. and think gas those both as aware because to to on very constructive going very we of natural can we remain be. is we're be they're continue We we're attentive. we'll of grow.

Manav Gupta

cost positive again, is, very My very $X. on quick the Coast second below and Gulf operating follow-up

close been You did last not but years, you unprofitable actually -- assets. it's down, couple at if you of look an trending

the unprofitable come an Sometimes down. asset, when you cost close can

as been remained -- has has assets the down the assets the coming same. cost of as Your number

push understand through help lower you're these So how numbers? OpEx to us able

Raymond Brooks

take question. is this I'll and Manav, Ray that Okay. Brooks,

paying to a I things. to definitely cost low comes couple then attention the think other reliable reliability. is of down One it control striving operator. safe, And word be key the to is cost,

Garyville extremely a throughput of Gulf X.XX second for So at day million well, barrels Bay. and at the we look when X ran we in quarter, the assets those Galveston Coast

got the We best other assets. those over survey well the in talked X years. performed couple quartile and refinery phenomenal out Solomon OpEx in there very years. just been about And this then comes couple years. concentrating X the first has last refineries performance of that times of thing there every out and Galveston is it's calls a Bay Garyville, past on many earnings costs. improved ever We've of has the the good So historically, assets very over that they're

our we're just cost pay everything So cap maintenance safety running reliable. discipline we strict just after attention there of all and to spending questioning and

on XQ So with Gulf with in happy we're Coast, even the cost our though question your was margin really performance.

let to going that. a bit talk I'm So Rick on little

Rick Hessling

Yes.

we goes So margin Manav, improving have so barrel. per hand-in-hand refining taken commercial Mike's push performance. really on And with op costs the

the continuing all see CCI, specifically, and Gulf We improve have call Gulf improvement, terms, Manav, regions, the crack. us I for quarter-to-quarter. in -- Coast goes -- simple an expanding acronym to we but think commercial continual what this X are this and we the you're Coast and And we're is doing is ourselves separate

from the quarters an I'll I initiative think that's the that we our continually margin years, a performance focus one as you'll the now really the to our the to our team to successful the refinery and shown products. It's important it's in how on to the I ahead a stress team, consumer, ask then well. for quite that been and confident all his watch he's can't proud flexibility relentless expanding into seeing We're very every continually proven within that and are industry feedstock is -- something team, And it's and toolkit. raise that the going way for optionality you that's best I truly feel created, with optimizing of and day. taking you're in but to time his our end operating take are in dividends some for the We that has he's enough because of ability team that us logistical feedstocks metrics

Operator

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

Roger Read

in the coming And on question, the XX% between in to helping. for the comments for your commercial quite capture call, New In York operations you back where we hear far quarter, diesel. the the then to at QX, saw sure. markets are between Yes. about quarter. Coast we cash opening Gulf and looking an the Mike, Harbor, thus My good third

it's quarter, cash for This markets gasoline.

So diffs before, think be market, crude what mentioned a this the the in capture as we would reasonable for of dislocations about kind kind expectation of quarter? those performance

Rick Hessling

This is Rick.

So first. I'll I'll back I at -- specifically capture pivot your the to seeing one back question, take to of point, reasons And you're before Manav's it's is pivot address optionality. our capture where

blow to out tell next. happens, will system. of and really optionality be and it blows to optionality it. the whether We So diesel X preparing have the within or our really will What Coast are when And of the it's you know system I favored to is Gulf on versus for entire structuring month system years take can have point, we don't your advantage differentials directly Harbor within and the what when out that we where the optionality. years that's our the gas, system

to Harbor question Gulf you gas that favor. right the call. Specifically, tough be will a appears now, interesting. as said, It will versus Where the Coast, is go on in that's your

are seeing inventories, of the we now. part right will within perspective, from be play from signals a how well regions demand consumer think they as out that demand. as each very bullish the on And I of

So front. on we are quite optimistic that

Roger Read

I obviously any process the the the still in Could that of days you to knowing and is watch permit need days Okay. error or do? that's and do or part other us, provided was And But have in XX then events? required. other help other release. back is Martinez pivoting like an extension mean, approvals there to required good Or just to it what XX should of we we I be watch anything mean on maybe terms that? to

Raymond Brooks

the On by on Roger, back you of quarter. the beginning Ray. Supervisors. I'll report, an approved I'll And update go May X, when one is environmental impact Contra the Martinez. EIR, of the Costa And we pretty County to we were give second excited final got Board this

air was which that that us Management let So Area one and permit with the Bay permit, more big Quality Air with District. was

months which spent recently, end XX-day And comment posted in public comment, for couple XX. and XX, doing of would review July next the a which they August technical so actually they that period, a is permit

So when the should any to they, that providing comments, us, that end. public along ends, with input, comment period and will respond be

getting -- it's allows be deal. with what Neste. ready, to will venture when permit unit joint allows the big to up close it That us partnership to start air our and also So us

So the the where one. would on we light at coming end of tunnel that the see

Operator

with question will next come JPMorgan. John Royall from Our

John Royall

bit So opener sounds think the you touched I if mistaken, I'm a your to on think demand in it strong. and very But related not I commentary XQ.

your currently really your outlook helpful. be of side? the rest summer be pre-COVID? anything system relative So the interesting And the hear to sit seeing you're would maybe in on today it'd what for we on demand And then where to think you

Rick Hessling

Rick. John, this is

I'll been forward, today. So up July going talk and it's back about at just then where interesting. we're and

domestic bump we've picking is where we week-on-week in thought little board, up below we demand specifically opening on getting of over very we and quarter-on-quarter where in is jet. gasoline, via were diesel and we're travel strong July industry travel since should Xth steady. had his Ever as Mike Jet a the from from early was where jet. be. airlines comments And and -- the around seen and though, then, year a speed anyways July, bit of the then So around in in really slightly demand indicators XQ, ago, of it across the increases but said a XX%

resilient lot promising. of very pent-up very demand with forward, consumer seeing a trends we're and Specifically, look going a the

of permeated market headwinds have would the the But forward very cetera. day. falling say I inflation, signals you today, is And positive winning right been showing us certainly, the et falling view as the by the well. that and has going street now, price interest Now demand rising rates, is we consumer WTI that

John Royall

then is XQ XQ, That's helpful. XXX% really XX%. utilizations, on you in Great. guidance did And

Is into the XQ. maintenance there and sequencing, full for on September? obviously in expectation entirety thoughts Is run work out wondering summer? then the August and ran of for any the plan go on that out you'll July in Just you some the of Just sequencing full XQ for any utilizations?

Raymond Brooks

Yes. This is Ray again.

take plus up then at XQ. ran I'll though, you we're this we'll to XX% I'd is we wanted at be -- XXX% ran in in highlight, million. thing meet guiding you're work That's third the doing to question, XQ we XXX% is We in And look more because One utilization. quarter, period. our catalyst right. turnaround number, turnaround if to So in that have demand. utilization And market that's Yes, reasons one $XXX like we the that X-month really of John.

And And X challenge more unit catalyst. hydrocracker, just do to at one ourselves in regard. had what plants our X we life where bit so could could example, little we a squeeze the we a we of out that of

that a we that decision And and in up through run so to made pick in work conscious do XQ XQ.

coming So decisions. the little do third those work but bit quarter. we they're in we a to made more It right up do, the thing like have looks

Operator

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

Connor Lynagh

capital here. allocation wanted I to ask two on

buyback. bit housekeeping a The first of the on is question a

the should think that the way you'll timing second we're continue that to buyback? the initial the Is revisit end the there? pacing so about you're billion, back How think $X this this you're understanding buying stock the we billion of from about and and to cadence quarter Just going in here. that until of $XX

Maryann Mannen

the Maryann. Connor, Thanks it's for question.

it So you think right. captured I

see -- that As that billion at committed the pace we billion are year, the that. me. by than clearly in later you year $XX on last no completing the committed met And we to this excuse end of quarter, on said, have we can $X.X the in we as earnings track the to call, well, executing remain since time and billion we been $X.X quarter that the deliver this

of complete we authorization you As received, additional we will the have it about billion year. say would the repurchase authorization this just I talk share by shouldn't incremental that that that end $X this expect we way,

$XX committed that. So to remain billion, firmly again,

done be assume But $X billion, wouldn't other evaluate we market talked that next this we'll that $X the with of year. round As conditions we have. about opportunities we'll billion I and that

Connor Lynagh

Okay. Understood.

past The in investing river I the more you'd that on banks think any second been change about the some business what in has look the for been Is but of valuable anything the refining STAR know be to project a like upside in like there have competed might more you starting that high I be before, downside. to to in might based level. But have of interesting? there X, not the the in other is industry of there projects bit thinking the might the ongoing think have events project? are not guess, terms over upside, X I'm you considered months? capital business a that

Michael Hennigan

Connor, it's Mike.

a asking view more do I think constructive we what have mid-cycle. on you're is,

a to answer the in think to hasn't now, pretty right environment. constructive back gotten Inventories we're yes, I that COVID. are before, is, Rick Demand stated as levels low. before

that So recovering regard. in we're still

and think our do the I get you can So regardless view, a river of But And does environment. is mean, is the the upside look those at end our is. case. where banks the it so banks to said it question I downside day, case We change pretty We our at aggressive is constructive always aggressive, it as a your an we of really of mid-cycle far of, the river. upside well. and case as case to downside

And good that. between been and have on trying both to I of again, was do and really return we strict we when capital. but we a call areas. in a our a earlier I return in mentioned opportunities do think to business, discipline. to saying about be we've it better where is in the we mode, capital invest job in We balance do believer it's capital the are want and want keep

the second because profitability. maximize team quarter lease show the some feedstock where think proud we don't the because do his and because how did set the team is then they product the how our environment, in you're control that I they So of is how we are a it we picture control cost, margin don't margins but And I were we supposed do we at hearing team when did discipline bigger control mean second out what control and and very are supposed in we maximize our achieve don't Rick showed quarter job has changed. Brian run We how and we team, for reliably. of to to to his terrific control do That's what that we do Ray his trying and do today look reliably do lot regard. us and side. And been what run. commercially. did the we've a profitability up we and you're do of ourselves what

think accomplish So what second team very a pretty to good I quarter. proud of the was

Operator

with Our next from come Theresa will Chen question Barclays.

Theresa Chen

cost the on First, to focus inflation and your start about of some controls. revisiting I'd by also continued comments laser like made cost of off the reiteration

think how the costs this light provide et about especially CapEx energy, across exactly labor increasing half of XXXX we you're or in be year managing can some color process, cetera? expenses, second it on and et As really you of the cetera, board, materials, incremental

Michael Hennigan

definitely and Mary Theresa, those jump inflation, in then cost And of or It's seeing the stands can reality along us. they where the the else impacts I'll Ray about a it during gas see and We're it's obviously, natural materials also let everybody lines. start, here. and prepared gave are. to anything where sensitivities remarks whether I'll of

higher-cost I is ways done do areas end But don't in that areas of do he we're we kind that on important that we've in interesting. of a in we our us. don't turnaround what I We differently. all than some At differently those spending of good can at control these the of are things a cost at Obviously, It's look the each is team we picture. to Ray those his and that. So again, do control put that, natural I really to offset global and big them things of bucket try we the to control inflation focus asked the of past. coming differently. can schedule things can gave example mean, manage We day, the

to be times me, For us downside, I happening had to for upside on those and But because going of attack about. mode, have cyclical I it's team reliability business. to that turn to that nice proud very pretty time quarter it's and lot have going spend said, at But thinking rather point, come structure been know discipline to And a done good your we've think his all Rick who where additional we've talking I'll improve then ourselves trying he lot if happen as how that in the happen a you, of and hopefully, have commercially of than job. a add comes Ray set to a good to to your to the I'm inflation complain time. about commercial couple because mode, as Theresa, you a groundwork And him to it's the just has of later very in a color. it's cost years. disciplined to wants now last it over the the company of it when

Raymond Brooks

at material large equipment on at a I most that. to material Bay more little much future, it's lot we one Martinez, thing Mike it's The whether gas purchase the labor add control site. near bit is it's are don't We Not elaborate what cost. costs. on control work and that Galveston work have Yes. will We a the based whether STAR, the whether we in already coming prices, of Garyville, on look of necessarily purchases up don't When said.

a to check reliability that, that that cost off standpoint got of material we've supply So able from and we're both standpoint.

that. situations, gas monitor premise operator. that we'll to we're always adjust the fundamental or for accordingly. looking the to labor continue But We'll strive whether be the and it's So low-cost

Theresa Chen

your really as Martinez -- view feedstocks project, in on crop-based And does? it What the workshop, it procurement potentially your general. that with as the to of may comments really one car public if right, your plans, scrutinizing just and a follow-up, on feedstock assets about heels is the impact the recent

Raymond Brooks

Theresa, plan? you to just one clarification. referring for question Are the LCFS

Theresa Chen

Yes.

Raymond Brooks

the now partner a we is step benefit shaking level. looked as say and a $XX which to for we've is, as the GHG in announcement, plan, recent of a back states. Essentially, a in increase will ago, ton. head, the with My CARB's we state, in I'll support see recently, Okay. ton been And a desire line kind we at right people that LCFS that put the pressure on reduction more generate a potential to state yes. the a bottom their if But $XXX year rescoping what most where at credits the is

a potential we right on where from as we tailwind So are now. that see

RIN lot and don't is feel project question, a and and right what costs though, So feedstock that. are I how necessarily Dickinson our pretty the an all parts to control good BTC of earlier them, in we economics renewable diesel moving good we now but And and the between real we we LCFS total. going economics there's said balance working, them definitely between Martinez in feel and into and

Operator

Our next with Cheng Scotiabank. question will come Paul from

Paul Cheng

that company, Since improved. dramatic the has improvement the X.X over in and the been everything system over think, efficiency CEO the pay. past standpoint, years I you performance From took has and and the good quite have in as a you

refining the the That's your maybe pace. quite should We in a question. that view strong potential a themselves first recommended consolidator have consider platform the or have So you industry? as in in given market MPC still execution

quarter that third turnaround is question high. is The second cost

total XXXX, cost So that is turnaround much the suggest would be above historical to going that the average.

driven the of spending that the and And to timing from it a partly from trend should assume 'XX? level? XXXX So just catch-up normal Or XXXX down purely we will is that cycle? back by is more the

Michael Hennigan

of over couple really It's So, thank for last the Paul, the years. team of effort you first a all, compliments. been

there. your So comment appreciate

we the good mantra footprint of have end bad us and consolidator to the far my want previously, a if refining And we refining, are down own see in to to do cycle. be we're as to know we're in believers refining. in a never in the good a be mind the that, And I cycle. to performer the going be times is up say I discipline as enough day, performer can the I again, then we said have good these effective. At but in of As going my I never, that times

is. margin run the regardless we of how business where on concentrating we're So the environment

You on cost, you Rick heard heard commercial initiatives. Ray on

looking not have business I So that exposure. but doing, lot never, also us we've I our for more make can to are us returning high. never for I for like our I there, more opportunities Instead, constantly big the do and a say we is And enough footprint been but chances good competitive. I a in think in things we're -- that used refining a capital close adjacencies. spot look I think word increasing I us. to believer in the I'm of as is am

of today is we have my competitive. months assets them more X make and the One take

increase an do to team has that and our example. to at tried as that Dave with adjacency his build-out. And Dickinson flexibility way gotten better. the has sometimes profitability have mentioned And Ray feedstock there

things It's that's We've change JV a help other feedstock some coming have on. going there. flexibility. to done We our to us

that's thinking more where spend about So how create value I than time consolidation. probably thinking about to overall

one. one. I'm let the to going first Ray So I hope answers second that the take

Raymond Brooks

turnaround is third that regarding again comment back-half Paul, high. weighted. the was XXXX there put Yes, caveat and that quarter I'll your the in

some than second But for years, extremely in half. our for were first go yes, had our back couple the half work. lower the turnaround at rate rate those we the of when to did to turnaround XXXX the years run lower look lower minimize in -- pandemic, the from people a issues wanting and and facilities, with we of a was run we XXXX, standpoint. if And ran we look were So the much we

cycles. to to maximize we our catalyst we standpoint much commercial turnaround the period So some at the want this do want I that maximize you try we some looks -- our with to that at is with we to of want and One really of from the as to conjunction -- team will of time. deferred Brian's doing, in all but that And our tell We is to this we're team possible. and Rick really the level work want from turnarounds looking as work at cycles. is thing it, also the want not spending -- of

optimizing looking we're that when and period much 'XX and as our to look of time. So we 'XX, at to level across at that capabilities a 'XX and trying

question a the bit half your 'XX. half of from and deferral in little weighted bit first of 'XX versus answer a the little second to back of half So of XXXX

Paul Cheng

XXXX materially level follow-up, be that going the as a activity than a assume should lower turnaround? to we on XXXX result as Just in the

Maryann Mannen

Paul, it's little early. a Maryann. We're

how As we you view a you expenses. of know, we typically quarter-by-quarter turnaround give see will

So XXXX bit early give to we're a you a guidance.

So just not if that that's ready okay. call yet to

Operator

Cowen. with question will last from Gabelman our And Jason come

Jason Gabelman

move ground? So prior pretty sound too particularly cracks, the seen aligns you follow-up. constructive down then is the a they on war? you Russia-Ukraine side the come demand quite back you gasoline, the think month. have below Or of for do past far, cracks gasoline this futures I And think too Do over were where next year on think, fast, a what or that to the I things, curve we've you're bit but seeing over with over the

Rick Hessling

if backwardation weeks look We're It's lot that a across at where you we're getting the plus the either great or are of continue. averages. because seeing a X-year and X below we energy to solid Brent minus a from Jason, last differentials. only $XX. Rick. to sector, they're And seeing at X feedstock consumer. We're say, $X really signals or on we seeing good fundamentally, really it's $X. cracks volatility I that's demand expect We're right, will have TI inventories it to you're here is question specifically, seen the

there's tell very I and because Oftentimes, pause go I'll would markets market. I but perspective, a a think it's there careful from here, volatile upside too be you, -- macro from So high you. and just laid there's of forward believe factors some that low. perspective going macro too for from then they I optimism key those correct I and really go because a out

Jason Gabelman

earnings last question, That's doesn't it seem the on sort you And helpful. of that some would on call. kind we've that my distribution in and then you update provide gotten second On near discussed distribution the this future, Understood. of like just framework call, update.

this that last just misunderstanding if our maybe at curious what you're call I'm something and So providing if some on between this envisioning or changed with line is this kind time of in end? call

Maryann Mannen

Look, Jason, Maryann. right. it's you're

our one the things said you that bit with we when we would share to more we billion back of finished come $XX was a I think detail. repurchase,

in you think I and we've that that, well. see consistent as So been hopefully,

a as with As complete you consistent would we the are we $XX hopeful which moving pace that of dividend that part at we that, that see reassess to We're communication. said time. that the particular billion at

billion, Jason. And of would to addresses dividend changed some So nothing reassessment I good indication from time. the committed you hopefully, where $XX particular committed pace a the our be. the gives that views, at hope has it, to that of that again,

Kristina Kazarian

Thank All right. no Well, questions. other for your there you Petroleum Marathon in if Sheila, Corporation. are interest

clarification you morning, want out on Relations call us. If and will this Investor on please you have team reach Thank or discussed for members of topics additional anytime the our joining help. be here questions to

Operator

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

at You this may disconnect time.

Marathon Petroleum (MPC) 2 Aug 222022 Q2 Earnings call transcript