MPC - Earnings call 4 2023 | Marathon Petroleum Corporation

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Operator

Welcome to the MPC Fourth Quarter 2023 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

Welcome to Marathon Petroleum's Fourth Quarter 2023 Earnings Conference Call. of this under be Maryann industry CFO other accompany website on Mannen, that and marathonpetroleum.com team. at cab. Michael members slides call found can our President, The executive the Hennigan CEO; invite X. to on the harbor safe We statements you Slide read

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

Michael Hennigan

for joining Thanks, call. morning, Christina. Thank you Good our everyone.

First, appointed I'd changes role, CFO of made MPC. MPLX like HES&S for to recognize we and John Maryann MPC. this Commercial responsible organizations. at some of level. succeeds management Quaid, our Maryann Mannen our Marketing, CFO Refining she In President as executive will be has & been of previously

addition entire our value chain. of these and investments on performance, of for Rick these Rick with Optimization lead has critical efforts assessing our Chief a products determining are value flow be Chief appointed chain appointed step that the business margin feedstock and maximizing value-creating Officer. an initiatives, capability. needed cash changes, capture the important will in Brian Global responsible results. At processes been advancing value teams Commercial will and generation Brian throughout the organizational clean level, delivery entire Partee chain making Officer. to global has been performance goal our redefining to In Hessling our high changes our across and put accelerate emphasis optimization to including improving more change increased driving a

year over provided our pleased our on We're consolidated $XX by strong basis, strategic to operating XXXX commitments. our deliver to was Turning on execution. continue team's a reflecting billion activities results. cash Full to

approximately against results year our results, execution Marketing $XXX full of nearly and assets our Our capture EBITDA. by commercial XXX%. These improved the billion Refining per of of throughput for generating excellent EBITDA & strategy. our year-over-year Marketing business & EBITDA our $X.X by strong $XX.XX reflect posted approximately Midstream utilization Incremental to X% barrel grew or business segment delivered of results million. and Refining Midstream of

We expect is MPLX's distributions and quarterly supported of its to cash MPC more MPC's distributions recent dividend annual by its XXXX most of to current $X.X distribution. pace cash half XX% increase MPC's receive program. capital strategic fully will billion MPLX than our planned portfolio, covers of

cash the this distribution expect further We pursues enhancing of as growth its value MPLX relationship. increase opportunities to it strategic

capital total returned shareholders. We share $XX.X over repurchases, XXXX. we since $XX through May to to are In excess of XXXX, returning billion bringing committed repurchases to billion

addition, by we in MPC's the increased XX% dividend quarterly quarter. fourth In

dividend the X quarterly past years, compound over a we our at have of XX%. rate growth Over annual grown

a of for operating year commitment combined shareholder to payout represents shareholder commitments, MPC total environment capital full flow, returns a to capital, changes strong the working in return cash superior XX% with XXXX. returns. Executing macro our led this our approximately of XXXX, excluding For of in highlighting XX% our on

consecutive head into their we domestically first global demand activity and in gasoline a quarter day million currently oil in been supply per to and global The additions 'XX. our export to demand projecting are and within the inventories as [ projections business, over blends 'XX, be In have barrels high fuel. margins. progressed both of 'XX Turning into the record that growth remained globally turnaround months. anticipate summer supportive tight last XXXX, X will gasoline, the for capacity year consumption refining is over higher anticipated and IEA globally. And as in of Global ] with raised record well constrained X.X another as refining see macro having system, demand we the steady view oil as on of environment our remains diesel hit slower look than jet above-average transition we year-over-year and our seeing expectations. Gasoline diesel we

look refining fundamentals supply-demand and enhanced costs, including refinery to mid-cycle will feedstock an U.S. believe industry As advantages supply, we environment international due into the experience we acquisition energy costs its further over of XXXX, global relative complexity. sources and

in Our of steadfast assets. operate. our and which priorities We commitment our remain the first, sustaining remain employees health our safely capital allocation and unchanged. the safety operate capital. include: These protect support in to communities we

We're to our We paying growing intend to a dividend. dividend. secure, competitive at the committed annually. Second, evaluate least and dividend

capital. growth Third,

believe into are the enhance which capital position where future. competitiveness invest be disciplined there We will and attractive our returns, but we well will MPC

our these January approximately will an repurchases through share share total objectives, count. From we XX%, 'XX approximately share to by excess we average X price lower meaningfully of May XXXX, through XXX count reduced return Beyond million $XX. our at capital shares repurchasing of

costs. In capital margin lowers reduces an emissions. and attractive cost, in At carbon, call XXXX are opportunity and are component of morning, focused capital enhance Refining our over our compared and XXXX spend. plan to this totals stand-alone $X.X As in strong remain commitment return, spending safety XXXX, excluding priorities. low reliability we as and increases on anchored & allocation like which repurchases of to its an we that XXXX, approximately share execute Maryann. Underpinning is environmental investment in investments capital turn performance, the is key the to committed we to MPLX, investment $X.XX reflecting sustaining Permian capital In This discipline. offers down is gross a billion. MPC's that In we Marketing, announced investing nearly XX% also XXXX, basins. reduce our MPC of MPLX capital I'd point, to capital $XXX million plan, billion,

Unknown Executive

Mike. Thanks,

we've our strategic our structural of benefits, have X environment. of execution execution Solid driven and remain the portfolio commercial structure foundational. the irrespective improvements believe pillars cost We made to market sustainable

to foundation recognize We to continue this will on business. our throughout build strong value

our average over believe periods and longer commercial to is continue operated as is was time these And excellence our full see refining of meet expect XXXX, was to XXX%. in we to This consumer approaching capture have we we foundational, commitment results. XX% Recently, portfolio to Our capture utilization our XXX%. year demand. we XXXX said in

capture our few market over we years dynamics, capabilities will While have further based advantage. will expect the results that built and a enhance to the believe we last on fluctuate provide sustainable

by mid-November, planned. operations. term. Coast, day the Turning operating repairs at Galveston At as the the in to our returned full In unit progressed Martinez back operating started Gulf facility, will to up and barrels Bay we rates the our per reformer short be mid-December. We XX,XXX approximately in

ensure proceed working reliable to with have operations. closely We safe been and regulators with the to repairs

Slide includes investment capital detail. XXXX segments. $X.XX for Marketing a billion to Refining move & X, which excluding The me plan MPC's in plan, our shows totals for billion. $X.X Let investment MPLX, plan more bit

Our growth plan is capital $XXX carbon. low million approximately traditional between projects and

enhance core MPC focused with $XXX once facility Coast primarily competitively enhancing marketing West chain And and infrastructure lowering We modernizing and on Los utility at which efficiency our advantaged facilities multiyear energy an Galveston $XXX future. a This on million further to of into at projects and distillate finished smaller asset a refinery, the Marketing, to shareholder efficiency. projects investment energy footprint. and one the position value value emerging investments enhance in Angeles increase as Los at million will in our refineries multiyear most refineries, improve as a to energy multiyear at opportunities. Slide efficiency costs improve emissions. investment & of increase our $XX overview Bay and for refinery carbon, Angeles Within improving lower is systems, our will is branded the large yields at Within competitive the is is our million its integrating Angeles well approximately our low Refining cost The targeted X allocated completed, our million Los competitive in focused project provides expected associated the well is at to yield traditional are which by investment region. is investing $XXX refinery. reliability and smaller refinery.

applies the in emissions. all The California This of addresses expected regulation completed mandating Additionally, portion end a regulation new of improvements this Southern further be a improvement to by to XXXX. reductions are refineries.

our a on expect investment to XX%. approximately generate of We return

by eliminating investing project distillate we to high-pressure refinery the to construct Turning increased enhances shrinking production our through need distilled a value clean Galveston of XX%. the provide planned fuel strategic This be and Once Bay, for U.S. ultra-low finished into return is export upgrade of world demand of distillate hydrotreater chain. The X. position year-end investment complete per of a is sulfur Coast day hydro- high barrel XXXX ensures value treater. the higher to processing the XX,XXX This project the are market. or to expected competitive new lower-value products. Slide diesel, high sales and strengthen third-party service, the we solver burning of generate At Gulf to further the sulfur competitiveness over in will

Turning our low in intensity Targets, XXXX accomplish. lower [indiscernible], water to significantly we refineries. which believe investing to of a emissions challenge emissions, tangible gas greenhouse one can initiatives. In emissions and ourselves we intensity. carbon to capital pathway to that energy lead We and are fresh largest methane our outlook, our demonstrate we

are early-stage like Additionally, investing flow. in superior capital smaller in we amounts [indiscernible] cash of developments

turn call the over to me John. Let

John Quaid

Thanks, Maryann.

for summary reported This of adjusted per quarter the fourth results. provides of to $X.XX and year. Moving earnings we the fourth quarter XX a share highlights. for $XX.XX full Slide our morning, financial

related for the flow excluding billion This and net was per net EBITDA $XX the was of billion recoveries $XX LIFO the a and X inventory billion year. Garyville incident Cash a $X.X from almost million to MPLX. Adjusted $XX effect million quarter's nearly by quarter for response items, changes, capital the to share were for gain the and working adjusted operations, MPLX's charge. recognized results for over million $X.X billion $X.XX quarter exclude of $XX.X $XXX year.

EBITDA by EBITDA the of taxes. the $XXX reconciliation as structure dividend state net by rate over $X.X fourth During related benefit the as a income shares. billion, billion from payments for well of shareholders Adjusted quarter, The repurchased returned the for to sequentially $X.X our of Gap] driven and was through third and discrete and was margins. largely quarter. quarter XXXX impacts million quarter reflecting and to R&M tax lower MPLX lower XX%, approximately the [Audio the quarter adjusted between to the we EBITDA

XX%. XXXX, to around our we be expect tax For rate

Moving to our results. fourth Marketing an our overview Slide Refining segment XX for & quarter. the segment of provides

crude Slide quarter, margin the for XX West on in & particularly overview deliver well the changes of to energy expenses operating And higher tailwinds, costs shows higher ran cost, as lower sequentially from due effectively a our of were product particular of commercial processing this barrel quarter a XX per associated XX% Coast XXX% XXX%. capture turnaround and light across lower nearly jet quarter benefited prices. by all product Refining per third at in headwind versus adjusted million XXXX. Capture project-related X.X our barrel spreads. the the the $X.XX from driven secondary fuel, provides crack quarter. We with XX to utilization EBITDA refineries executed planned strong Capture an in quarter for as the results. well activity. Refining higher as barrels fourth for our less per as Marketing margin day. of segment teams was Slide well regions of Sequentially, Our were ran margins Midstream

segment fourth strong delivered Midstream quarter results. Our

year. EBITDA year prior Midstream our segment up full the X% XXXX, the compared is For to

for the expenditures a working of million changes flows our income in business usually This billion to prices. acquisition change. Ops might Capital presents quarter. the fourth from projects see superior basins. driven Refining flow, working payout is cash the Midstream a we also capital, the expect of declining $X.X change full growth quarter, approximate and represents Basin million. commitment quarter Permian the in $XXX for via and this includes which position growing in operating for XX Marcellus share returned of advance million capital the XXX% was capital, of crude This returns. quarter. from billion repurchases MPC gathering billion during in working strong investments by Slide as dividends a cash in our our elements businesses. Working cash cash Midstream highlighting receivable, changes for in quarter. cash primarily Our processing by Delaware billion Operating was joint $X.X totaled the a $XXX and the consolidated was in generating and $X.X high headwind and impacted deliver anchored by nearly excluding the of tax both you of to capital use driven $XXX our excluding an approximately quarter, MPLX's changes $X.X as flow, return and venture shareholder ownership Cash

billion our we And MPC and at billion quarter, current approximately January investments, share of $X had fourth $XX.X remaining the $X.X XX, consolidated of cash the billion including authorization. have approximately As in of cash. repurchase short-term under end MPLX approximately

We Slide to XX. on provide our guidance quarter Turning first outlook.

volumes lower due higher crude Utilization throughput levels turnaround than barrels X.X utilization approximately day, be to million. be of expect of projected We Planned representing to million XX%. is to mainly expense is turnaround forecasted quarter per activity. fourth almost $XXX

be to Turnaround $X.X Garyville, the of in similar impact around We typically to the $X.XX Operating lower costs higher back $X.XX quarter with planned turnaround Corporate pass in executing Los for X our expected per is Bay, barrel Mike. the to billion costs are significant with outages. Angeles lower $XXX to are million. and due all to turnarounds it are for the throughput expense refineries, Robinson approximately these to at year quarter year expected to at are first billion. And associated sequentially minimize that, full when largest last activity. Distribution expected Galveston of first anticipated margins financial me be be let volumes quarter. to the the be mainly are costs

Michael Hennigan

John. Thanks, to with We've MPC. running high includes culture of strong to a the strategic on commitments generation our supported in strengthening capital resulted repurchase earnings discipline. grow competitive This and superior initiatives. and MPLX, again execution continued improvements to has exercising has and flow while its position this delivered distribution strict structural partnership increasing reliably capital our utilization, At fostering cash our performance, cash invested assets. commercial low-cost its year. flow the This cash We've grow, the

Looking sorry, attractive continue is our believe on and assets, segment, mid-cycle enhanced last of of grown and expect safety, to this improvement MPLX environmental, advantages forward, X% to prioritize we our longer growing capture term, growth rate demand. capital there commercial sustained $X.X MPC's annual invest EBITDA we environment, and We reliable performance billion global supply Midstream are in safe where ensure will sources consisting X by has to we since over which excellence of we investments the I'm believe will also which the a over primarily marginal given compound XXXX, years. will continue projects us returns. focus and position our to operational

in As MPLX cash a position its consistently we continues free flow, continue to strong to believe its to it's grow grow distributions.

was partnership. of of of receives additional billion is expects the generation choice result years, MPC a superior through XX%. let in generated positioned as in $XX.X As reach $XXX MPLX through-cycle XX% increase billion is return that, shareholder against the XXXX, which refinery ability distribution that the receive $X.X XX%, this to approximately XXXX. Each In of and MPC operations. million increase since total cash to increase from payout believe with of shares, increased distribution, distribution to XX% last $XX We our a strongest $XXX summary, investment in the repurchased of dividend its million shareholders. to turn over of me and Kristina. cash ratio. cash ownership the deliver With it we return In resulting billion XX% year, back our MPC's X a reflects We cash flow MPC

Kristina Kazarian

Mike. Thanks,

a participants, a one as ask to we If courtesy questions, you questions. we're your we follow-up. limit will yourself that additional for Sheila, for call the and permits, open we As to reprompt time all ready. question

Operator

Neil Mehta will question Our Goldman first Instructions] Sachs. come with [Operator from

Neil Mehta

about some say is million the margin capture versus want talk of morning. is what question which is investors recognize uplift. I just and what on from XXX% onetime-ish we're say there's much can $XXX And But this can can't strength? of really how system Slide that first the and sensitivities you here. you that And stuff what feels carry forward? to Yes. this and about XX, getting drove we this

Unknown Executive

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

goals as around and execution first for and that in continue objectives Mike been be to and you will a terms foremost, pillar meeting performance outstanding commercial of the shared you has So and know, foundational Overall, delivering through ability know, with us cycles. as flow the capture we as to cash delivering about quarter, drive you continue XXX%. toward we've talking been to generated best throughout shared. the our about In XXX% cycle we

quarters, will quarter, think our a and drive announced XXX%. couple you couple a last which the this the then Over delivered believe elements other continue changes and of Rick the of sustainable, against changes, principles. In of that sharing have Brian ability and key to with had foundational deliver benefits to been that of we couple Mike the morning around some structural we we that are identify

margins saw blending So benefit Having the fuel light the products are of frankly, of we to blending, repeatable? To first said is particularly stronger at product of of excuse this diesel abnormal me, look that, and time. well. impact. prices. of quarter favorable secondary in sharper refined and jet all, for repeatable, your diesel how question, product of This period those oil strong a drop not things is some not more also premiums butane this as Obviously, crude the when we in and much

of ability benefits other also we completed reformer with of GVR projects I in have our at as that did We operating fully and having, the the quarter. you, shared

and there that see to answer your pause question me let So all. if helped at

Neil Mehta

there. should be approach it's season? the of seem which turnaround Maryann deck Coast lot And around talk you that good thinking year the on how into The about maintenance, about of we is period West Maybe fits the particularly this is a you follow-up the in like where region. as took XX, Slide in anything decision plan? full it with a here, does QX, color turnaround just great, That's sticking heavier

Michael Hennigan

remarks you in prepared at financial it's is we year. is, generating think facility. heavy quarter, our the in the Neil, first that year turnaround facilities, X think way said the Maryann as largest mentioned, same about Mike. our should about largest as last it spend I this of Yes, our our But pretty we're Yes,

are So that margins we're in the of fact first down taking advantage the quarter.

$XXX quarter, in drops know million so, And quarter-to-quarter, you relative number turnaround somewhere is I'll that number, to range. we tell So next just year. we're traditionally don't which the a I first but $XXX spending like million the give to in that the quarter, down full or high

to at opportunistic same being so is So take off-line planned, in margins, are want of now ready our activity the going the around of we're second X but that us margin in when we think, fact be we to to environment have time, advantage results. quarter, be lot a turn regard. A get we'll the does some lot largest facilities the the to stronger constructive deliver and that for

Operator

question come next UBS. Our from Manav will with Gupta

Manav Gupta

XXX% to First of one to of the one the Mike always was to get all, cash. congrats I get although per to capture. focused stays capture, XXX% barrel and margin was of guys. on goals EBITDA know free know goals I

So Los projects. overshooting congrats is Angeles. X question the mark. growth here My on that on

there of are investing to out project. back in tougher and Some looking going were people given laws, the exit actually you the state the this

ULSD, realization from understand could sulfur you us if again, driving execute upgrading on do uplift that? the of And what's Galveston to Bay get help project? this So moving you what kind high

Michael Hennigan

start. is Yes, Manav, Mike. this I'll

how for does it's improvements years good at. of Neil here. But But, structural the what said, And what's differentiate those favorite said, over And are per thanks but my couple that we've in as it's you how for [indiscernible] we market? to to generating. the believer big the happening I some First want you cash metric And the much get as the lead comment we're question hard time thank is a not just in implemented on I metric, asked are that share the spend between cash looking categories in some generating, the most comment. it anyway, last the much capture. of all, I'm indication, of

couple a where in things. the It's As believe we decent really already of the far L.A. in facility, hoping as investing there is, of that are Coast. I'm area we one the sees facilities investment facility. our believe yes, amount an we it's top capital a competitiveness improve investment, that One of put can our West of everybody but and we on

want to it an area we invest So is in. that

that is point, a Now and being And equation. important reliability out very is our particular part there reliable your of efficiency, about lowering investment supplier an costs. the to

going into other project distillate for today, we've wide. the margin is view, that even easier spreads if today, at you The pretty they're enhancement And in project. our to future. announced not a And get the are look things unhydrotreated

of largest, hopefully, they're financial at put the in of driving what's of XX% we're So slides think both investments. this are those, north X good day, that, the but us of we the in highest we And is we end on of the returns. when most generating think very in projects conservative again, our both And these facilities.

they're that So to you've time, one is way, care it's some facilities. into margin invest And that low-carbon positions us in we're heard enhancement, the but occur on over take West other our return driver here. about to we the you've a lower are enhancing us that think emissions project reductions the biggest theme will of also and of for goals projects grouped and heard that's in really competitive basis, from going cost our of while it is of on there's and out going Coast, themes that efficiencies. It's in I And the we a why large from this a strong feel area.

gives that more a you little bit color. hopefully, So

Manav Gupta

Perfect. capacity the My ramp looking the towards here follow-up to at you Coast. project were nameplate diesel quick your renewable West on is

how is project there, If update you that us give some can over progressing?

Unknown Executive

at nameplate [ in to as run to at with continue day regulators going to to Currently, running XX ]. barrels level at able XX,XXX order Maryann. that repairs what get versus determine are work to at nameplate a complete our we that XX we the be to be to [ it's ]. about Certainly, We're need

at JV the we've as we're about partnership think what know, is MPC of a we about As you so Neste, our for with day. barrels looking XX,XXX differential got really, that,

at So full X But we it we [ to regulators XX,XXX the to to with can bring work and for facility, running run. when overall the meaningful not determine again, we'll million-barrel continue that XX system ]. our to

Operator

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

Douglas Leggate

hate do this. I to Mike,

to wonder different if way could I I slightly a try capture question this. because a guess, a So in different I view of slightly have we,

more you look great what system and we as If indicator deal between at [indiscernible], a linearity the your of of margin see you're delivering.

I think I agree with you.

I terrible think the of metric the we try and margin. what business, allowing you But see, capture is to a frankly. do changing which linear is inputs however, be capture program to mix more to measure of a some, that is seems

question in U.S. now few the other factor? TMX So What is your Obviously, changing in there that and optimization business a you or my crude that really a commercial with slate of of are Is are things. is your right a the moving system? doing in operations running around you're parts that the that. lot

Rick Hessling

is this Doug, Yes. Rick.

stab that. a take I'll So at

the we significantly our We we at we Doug, by for in return in is are And others I the look betterment the at better our every end, slate. regionally. this optimize day, we Doug, do look industry, this think So what at total than are we the day. of optimizing of plant. I end But the would say

years, worked we of could system. give optionality benefit within Mid-Con [ X suboptimize ] for our fact, plant have decades, we a So matter we as not, ourselves and of to are the another,

on TMX system it on optionality juggling well as with our Coast Gulf worked while as currently Northwest and are and the a West We quite for we've Pacific Coast.

crudes We're you perspective. assays at, are should on we we system. pushing at, norm look our onto what what we slate So what It's something changing. a look constantly the updating from crude run, constantly

ongoing it years is before, I've but And in And terms on certainly slate unturned crude value we're unpacking this the an side, everything now now. chain. that for leaving goes happening our just to goes said So exercise from Doug, throughout been rock no capturing it that's Z, only value. not A entire of we're several

Michael Hennigan

give honest what's And since some to Doug, for where Global know been new Head with more I excited made a you, area going. it's Brian's But is it's reasons. us, detail source the I'm And we've in Mike. for Rick's for to changes. to Optimization make us. as a going a don't future role of about frustration we're of I step competitive this in of think, change lot for be point, we

So we've momentum this showing of up the in area. had a lot in It's results.

discussed, favorite, is generating think area. the whole good deliver we opportunity is. And continue source in As be have capture at and run commercially, well but shareholders. we of generate cash and my the If we return a then not I day, the of more end we'll to for cash

Douglas Leggate

it LPs and have figured you are to guys a complicated beast seem out.

But to profile want at due? sitting debt level, come you on where Maryann, I debt maturity the Slide sure. thoughts sheet you on Obviously, everyone the it your MPC roles. thank are follow-up if those answer, what the net So maturities Congratulations with MPC your for look as at showing My be guys. is Maryann. I'm not new your level. XX, probably the for, might position you're a at be to for cash balance

John Quaid

take I'll go Doug, ahead it's John. and that.

Douglas Leggate

I wasn't take sure or you if not.

John Quaid

of XX%. kind of And the comfortable continue target XX% that's of at problem laid bit and future. about really there. timing debt has all. of out thoughtful sheet but of lot And gross monitor our capital debt. amount to away cost We're I we'll the a getting as that you were we've as right very out hinting a debt -- look but debt not we with think to a right, now. that, MPC have the We're flexibility got very and optimizing balance I cost at no, the of that be gross We've into financial kind No, really that to of the a you something to refinancing certainly right good of cap it term, from were think longer of

Douglas Leggate

is John, remind or stand-alone? that consolidated for And MPLX me,

John Quaid

the given that position. a in before, [indiscernible] or. stand-alone. I speak just to different probably well seat I It's can one much was in pretty

running debt-to-EBITDA flows as about to support got there Again, You've leverage, what doing ratio can some probably they've smart at really stable sub-X.X% they're be the cash a of financial flexibility a Xx. well. but company got

So both really think I balance in sheets are strong a place.

Operator

Our from comes next with Scotiabank. Cheng Paul question

Paul Cheng

Good morning.

additional have know-how you bigger to apply you not that, can refining I even a in risk, a you that past, commercial would to facilities that think And that you Gulf you additional assets think Coast, huge in facility, and have running acquisition assets. we multiple interested also in you further added well there's also, profile. refineries. argue are of mean, given have value some your platform But I one increased technical be even operating are optimization perhaps diversify the and opportunities. reduce may really and frankly, the to do to how facility, shown add having will your the so that If your X

just question that, want that internally? mean, to So see at you how guys look I

Michael Hennigan

is north we never. ourselves. facilities, of we footprint try part We that's explain Paul, the say the today. and Yes. equation, we came that our out been of meantime, looking first announcement people. assets say at XX% with always on I than here Heppner's group the what in we have key off, the we're the to we've transparent assets X available looking own meaningful we that think never Dave more working is while and return have. we a and can got of also And But And the the assets projects at think are to the reason that on normal Dave constantly make of we change. market I side

whereas think of will my from So, I people and assets tell But you, in cetera. a concern team are you you're Dave own, obviously, there's the of at DNA general. externally, call ones and we I know know make But time, his where inside our always the challenging that evaluating diligence, out, between, you et can there's little portfolio. are investments same outside a bit balance the

carbon side. haven't We've pretreat lot, made investments side. We the made in on low some you But investments facility. in We some have as refining a invested low RNG the mentioned an facilities overcalling on some we carbon. done

pleased part, this and and team we put constantly both do me because at But Dave other think we're think capital. about we of refining. And last So just and kind to are we And that talk outside just where pretty refining his our projects. decide one want that we have to today, mention we is thing for the of this important. report let good X looking

where our what the $XXX don't million project, that $XXX about million talk that capital, in These mentioned calls. that we talk on $XXX to is slide traditional refining, of million. But our $XXX is good DHT are earnings them. we out you facilities projects investing the we higher about of in typically about million say for Maryann of related the don't we're of but that are high-return look are traditional but they million smaller headline all returns, if in the us, it, sexy projects. $XXX projects have really On though, these at

improvement, margin where So, the lower can team does we increase organization cost, looking for constantly areas nice are make a his reliability. and job. Tim

all this and then a we we've And that to As you reliably, smart got I then try think demonstrated little be to starts run invest that to bit, just equation. you and commercially. to you capital got bolstering said, keep with

color. gives a more hopefully, little So you that

Paul Cheng

done you're go Is much just [indiscernible]. and holy if for the Absolutely. able question. that maybe better there have break And on you Can process? that are down guys of from think And the you're the that's fourth that grail will process? how why [indiscernible] number ]. commercial one the commercial the the done you company. commercial XX% operations just into looking versus optimized that you that of you the really you're in that you coming or [ and you seeing at definitely business can a on in that capture of side already I there them share Where are be quarter, of that on to the back still based the the service think well? we XXX% is saying stretching that that that margin is In the past, based the much in also I And additional capture. optimize you well Do we're total

Michael Hennigan

second I'll Paul, start the with part. Yes.

of reasoning a still can the there's organizational role change. but go part repeat I a we myself little was and where behind ways As said, think that as better, quite to I'll do the we bit, Brian's going the to, invest, me work with find say to with to doing heard guys define going team And places refining is is process, his today. commercial lead our you optimization guys. we're global what we change

So inning People lot I or ask football progress. of what I think we've guess a made season. always it's

think And can onion peeling we change. and another in? hard always ascertain back because I we are seeing to step make that's the keep that we quarter to what So

go. So the end I'm optimistic road out the we our you'll a it. comes day, the we'll keep of what is watching see at think mantra and I our of results of got just that And to lot

if quarter, always factors mentioned. the biggest It's to why as hard. the we're get in Obviously, it's a I'm significant thing the that team, the But there give capture. That's there some hard way fourth as change Maryann one not butane far enhances significant, you want I business. always fan to that first is differentiate to market approaching blending that a of the our kudos the metric. As some part, of is

You heard earlier. from Rick

control so given and we generate cash just to whatever think cash And, market I is is the but and share. given we to have us, and results we is more whatever more the us. is per additive it to margin my margin company way thought run don't got the the more environment, environment And has deliver to

I keep to wants everybody at inside the me. looking that outside capture while just So talk the that about and one to most metric, matters

Unknown Executive

doing we've a a office, the we've But teams the about and without has respective with know bit Brian that and laughingly more we're built do the Singapore try us. you about last a give their capabilities linear that Rick and change the decisions cracking that just tools Paul, it. around But to quarters over things to data we talking bad and that capabilities of saying or we've assess robust London those Office to us necessarily office. us percentage. was obviously, been allow that programming. helped that might commercial That and around add analytics made of very it's decisions I Houston good several on how some performance what trying specifically a to Maryann. regionally, were the some Mike might the in to code have built give historically

So, it continue is helpful, building learnings these organization capabilities will our I the capabilities more too. we to that's sustainable a are drive in bit and that hope performance. think building

Operator

Next, Fargo. with Wells you hear Roger Read will from

Roger Read

changes from the to we the the could on meetings late on does future. it point I the team management to extend has I you're at understood November. make which the Board Congratulations just Maybe not correctly and if in here decision about quarter. know, address or the Yes. a back that, what whether if portend approaching the Mike,

anything any there? So, you updates offer can us on up

Michael Hennigan

more people contribute that grow has personally very team. the the And start Yes, across I putting is effort development, things: getting with, are Roger, the One so feel Results, to because off Second they the driven physicians the to nice of done such results things they team. X reward can I'll team is the that changes that the in my whole responsibility we're by that a part

played of the those to everybody So factors, it's that also occurring a at see. below these assessments but not lot into level, occurred both think, gets executive that I and of

in So practically that of is team the big our decisions I'm all involved in. a approach, team all believer we make

have on top last heavy of component occurred the in a couple of there's years. So development results the of that

past, couple As responsibility it's the you've top aware decision. will is top is is. priority, time. first obviously their far the a of that. at That Board's, as But Board in out it's heard The I play in think Board their the not me, very if of itself that's very personally, what

time, progress. been time for work progress some in So play that's in as quite itself it will and out by. just goes It's

Roger Read

Okay. And up the on a question follow question. bit balance was my sheet little other then to

I given. could in theoretically, keep But even end get asked you back if I the if debt think, side, equity you the about buying shrinking that held could XX%, to up flat. get it debt-to-cap you guidance which shares

But implying all or that the cash other up shareholders, you actually return could the future all simply will exactly So one debt sort this at other that's to follow? same of the be of predict refinance there would for right words, to end can eligible would on where sort that level? and of math staying math imply us some the share the repurchases out. that shake debt, that's In

John Quaid

Roger, it's John.

other certainly, side. equity And on that the subtle of doing my we're through right, the equation, is read You part comments very very, well. what

as So think that we of we that on. to "hey, gross be that, what levels because honest. math. are debt part our can you're appropriate forward" be said, you take I spot pretty at was my We'll of think add much look will comment, I'm not but I the from look sure a

Michael Hennigan

I'm Roger, add. just sorry, the add other thing I to would just wanted I

be that's we've read should We to rule, there what as appropriate As find been for belief be our We is going to think be we've to into we a my to general think is people want don't cash return why want want we consistent shareholders. to and level. been position And the don't over-levered. And we that's underlevered. there. targeted

job over our run at done the can, think then is the properly, excess the balance which sheet to past, we to cash and of most capital return day, we've shareholders. the I generate end the

Operator

next Our come question from Royall will John with JPMorgan.

John Royall

the had just balance a follow-up I So sheet. on

You billion drawing end like really XQ, million. off buyback healthy a quarter crack had down, $X.X the And pace did to the strong despite coming at But of the with looks maintenance it environment turning $XXX $X of another up cash. is for billion. in you almost January big up

what progress the XQ similar you turnarounds? pace cash balances to could So XQ? the could be my mean and for these of is, question where draw you throughout And that would as end a expect maintain at

John Quaid

lots to we'll returns consider investors, our at even want how a overall to capital, to let key be I as is. performance But prepared in other we're last return be heard refining of we're One, continue of ultimately, to viewing let start Again, we looking with But our steadfast and there's we again, look just where to I'll take allocation we're year, look to Mike capital saying, the the and lots part Mike's to in we're and XXXX. really roll allocation change just will that the strong drive of And as things. be of want and add our opportunistic you as clear, balance as that, along the macro going to environment of remarks. in by I in return strong no want other seat, items, at comments clear, well. John, in be it's me capital capital. one going to but, into that and be here. it sheet John priorities commitment some I as

Michael Hennigan

think John, that of part to it's of our duty add part return we and it's I'll thing only is mantra. as DNA The Mike. our capital

in handed, that with business. more fortunate, that. allocation growing So priority assets, shareholders. dividend, the you to get been whatever us. we've the But time, a been We're going I'm on saying start all off generating the as we'll again, targeted make to handled, capital environment environment maintaining do said, we been then for we've market for And quite still We'll get cash. conducive continue or the capital to margin priority. we've along has return sorry, our and some to investing to that It's

to give that So as invest isn't end, the is. that's and capital where of they vehicle to the environment shareholders let and shareholders cash over return going be and generate still decide I'm then where our DNA capital, But believer change what want want that is, as people back longer part regardless we We that well. of margin term. at seen huge the have to to time, a

John Royall

a can time ahead But of the stuff Is help to moving another some be question on how quarter? particularly, [Audio think then should the you the we do have the still but maintenance? quarter? about XXX% pieces And about potential the of this, in aside, impact capture. of Gap] in I apologize commercial for heavy And I this the us Mike And first maintenance Great. to think

Unknown Executive

XXXX.

is drive that toward XXX%. to objective Our

in right the absolutely You're quarter.

got million, $XXX we're units. touching we've we crude about As said, but

fact So negative not significant capture expecting turnaround. that of level we a the our despite of impact amount are we're on seeing that

But we right not have as that XXX%. negative know, variables to on rate substantially that do impact a we turnaround drive impact now, towards the Now you are from capture have expecting quarter-to-quarter.

Operator

will next Theresa question come from Our with Barclays. Chen

Theresa Chen

product wanted supply a perspective. outlook I from about the ask to

inventories there on work front, seem quarter, summer, does quite be planned own going domestic internationally, for to there so be a including good Just this but of the within system your constructive to amount should is which million do could a has bit talked be competitors barrel your one And per of how realistically of utilized? coming online. you about a agree X.X new think supply day with much Would And number. you that?

Rick Hessling

I'll Theresa, the refining Rick. first. capacity is new this attack

them it's on later a others, specific coming being half bring of been new fashion. greenfield and And that these face and see logistics second timely years, I we like bring this facilities versus sooner. we'll I to later, So proven say difficult in on some when facilities, the would are supply. you which on, And challenges when brought say year then over on with

here recently see turnarounds as So earlier, be I but the it ], [ specifically, demand. believe look piece week the weather-related even and say for you've certainly, in events. When then seen, versus at later will demand down X% look the we're due last utilization and referenced, steady you won't on will to forward, to I continuing X.X we going comment that specifically and we

solid. remarks, to XXXX, our start very Mike As off solid we're export book and good in mentioned very opening a on and been was in It in diesel 'XX. gas has his

it we when very and for Teresa, we this well, look at see season. a spring up very setting supportive together, summer all So of

Michael Hennigan

it's a And just for it's we're X barrels going lot the well as attention, that out how particularly see constructive was X continue of believers documented. it mean it's pretty are is later in on, even to is over margins I We'll bigger of going I in add. I these up, though just are outpace, is think picture, with why plus-ish. more to short-term I demand that's million supply been the Theresa, an globally that we Rick very coming everybody the demand stay believe absent reason this mid-cycle the itself X mean million calling some to we to using. to of The still plays year. think issue rise. term mentioned refineries year. continue know over some But a constructive time we of there's I'll coming will is year, and Mike. the oil it demand forecasters last see where in above day. this

variations a think big we out look believers we'll and bullish But stay end it, the the there reason is going I obviously short-term match demand issue, some on over whole short-term lot day, of time, paper, that may think part you. at the to And that. to aside be of that remain watch if a keep the we trying of we're supply Hopefully, is that. to we makes robust. see to response, sense that just don't in I from

Operator

Ryan Our Sandler. next Todd question Piper will come from with

Ryan Todd

you U.S. Maybe as mentioned as about refiners you Thanks. you Particularly what view go-forward In that what on versus your Great. that of remarks, a, in view U.S. terms Is you, of question. And your of talking that. do more you you system? environment primary into you an refiners. mid-cycle that as I of I a uplift and do uplift were for But would past that you prepared mean, drivers think follow-up feed sort mid-cycle. for about broader barrel, you margins? underpin last environment a a coming about advantages for go-forward you years. can kind think some in Do and the of the the can, the about supply in little I I $X of the you think barrel. global and bit how some there, think maybe versus a demand just what mid-cycle $X talk mean an U.S. when enhanced

Rick Hessling

Rick. it's Ryan, Yes,

they're around Mike a significant. we access doorstep, early feedstock our on in on to So feedstock remarks, touched we advantage quite with world. for U.S. from America have crude have North advantages, the here his prepared at in and

very been significant well And it's documented. believe we advantage. a that's So

with adds an ] when earlier, U.S. advantage We complexity, long an enhanced significantly gas is in layering to have cheap all to up nat start why ] refinery workforce nat our in [ we it our an and being and when those assets of we one our the addition advantage, that, look [ of at energy which Ryan, top prices. believe Mike referenced gas, extremely on we have in at another, you But mid-cycle.

where really Now when this our is comes into perspective, you think scale it of our from play.

So system run X a we X billion-barrel system, of billion-barrel annually.

If you a it's $X bottom can over number. to So billion. a line, give MPC's a $X easy math. it's pick $X, mid-cycle, number, that or won't $X plus the adds billion you but, incentive enhancement mid-cycle We

a So a lot will we we demand a was the record. will record. believe believes are in because 'XX a be bullish consumption reasons Mike 'XX. 'XX of of hit a be mentioned, record will global 'XX record believe IEA

last so done and IEA X up for the revise forecast to demand fact, have continues months. after In month their month

we Globally, set hope referenced spring turnarounds. you're are I addition, up helps looking at for In here turnarounds we are high. history summer. well strong you. When a and and that

Michael Hennigan

it's Mike. Ryan,

that the what trying we for $X, take planning, term. zones, add. we'll run if don't just perspective some hard properly do the do But, it number than like a river rather scenario big we banks call to examples. a if the it's so XX-yard the two gave and if be and Rick the get to right? is. you if $X, it's long a planning, $X We what we Then to We me I'm it's line, number. from estimate end scenario Let believer it's but get of pick business the what able look the at what

Operator

one And question. more have we time do for just

come will with from T.D Cowen. Jason question Gabelman last Our

Jason Gabelman

about ask today. X-part on question Coast I it. wanted to West the project you disclosed that A

demand there outlook returns, the how regulations periods Coast do MPC's that the the decent West product and limit you that that's comfortable the First, project? can referenced are would if do is with penalties avoided when prices you chunk a ability on to capture get related where the higher? then And incur potential you you how regulatory that much, to didn't of

Michael Hennigan

nothing you was however. first So Jason, costs, your there's that part, said on avoiding

nothing is So to related that.

regulations And it there. efficiency have opportunity So comfortable greater we are competitive and than occur until think the facility going enhance need saw we've California, it's was ahead project, an return be already, there's but going of There's greenhouse time. the the out do in get think very a requirement get regulatory time. gas, lower-cost choice there. kind a reliability out to that more to of overall could to a a as tough which modernization more made We for over that But wait project, if a reducing we there. we disclosed an project, and there a, How think macro? There's project, out competitive XX% we environment do to to there, we things asset. we have of

but the want think So occurs We we're don't there, term. term, strong, out we for volatility we really competitive, reliable, in a long as facilities have long to think the it out will efficient, the all survive low-cost facility. there that

Rick Hessling

over as is add system our We well. refiner just in the California I'll believe Jason, integrated competitive merchant to a that. advantage

a feedstocks So demand have declines. when across the our through look value merchant to you over entire chain way level. you from when competitive the advantage in That's refinery station the all

Kristina Kazarian

you reach the and Corporation. Investor or on And any questions a All here additional Relations that, be you for have the your for of Should interest with morning, you. joining thank Petroleum team member discussed us. of to topics help out right. Thank in like please clarification you will Marathon this

Operator

conference. you today's Thank That for does participating. conclude

You may disconnect at time. this

Marathon Petroleum (MPC) 30 Jan 242023 Q4 Earnings call transcript