Q4 2024 Marathon Petroleum Corp Earnings Call
Later, we will conduct a question and answer session Press Star one on your Touchtone phone to enter the queue. Please note that this conference is being recorded I would now turn the call over to Kristina Kazarian Kristina you may begin.
Welcome to Marathon Petroleum Corporation's fourth quarter 2024 earnings conference call. The slides that accompany this call can be found on our website at marathon petroleum Dot com under the Investor Tab, joining me on the call today are Maryann Mannen CEO, John <unk> CFO and other members of the MPC and MPLX executive team.
Amanda: Welcome to the MPC 4th Quarter 2024 Earnings Call. My name is Amanda and I will be your operator for today's call.
At this time, all participants are in a listen-only mode.
Speaker Change: Later we will conduct a question and answer session. Press star 1 on your touchtone phone to enter the queue. Please note that this conference is being recorded. I would now turn the call over to Christina Kazarian. Christina, you may begin.
We invite you to read the Safe Harbor statements on slide two we will be making forward looking statements today actual results may differ factors that could cause actual results to differ are included there as well as in our filings with the SEC.
Speaker Change: Welcome to Marathon Petroleum Corporation's fourth quarter 2024 earnings conference call. The slides that accompany this call can be found on our website at MarathonPetroleum.com under the investor tab. Joining me on the call today are Maryann Mannen, CEO, John Quaid, CFO, and other members of the MPC and MPLX executive teams.
Wanted to quickly highlight our new segment reporting which includes our renewable diesel segment. We believe this expanded level of reporting will enhance our comparability with our peers and provide you with more insight into our financial performance and capital allocation decisions previously the results of the renewable diesel business were included in our refine.
Speaker Change: We invite you to read the Safe Harbor Statements on slide 2. We will be making forward-looking statements today. Actual results may differ. Factors that could cause actual results to differ are included there as well as in our filings with the SEC.
Marianne: And marketing segment for your reference slides 24, and 'twenty five provide illustrations of this reporting change and we have provided recast historical financials on our investor package available on our website with that I will turn the call over to Marianne.
Speaker Change: I wanted to quickly highlight our new segment reporting, which includes a renewable diesel segment. We believe this expanded level of reporting will enhance our comparability with our peers and provide you with more insight into our financial performance and capital allocation decisions.
Marianne: Thanks, Christina and good morning, let.
Marianne: Let me take a moment to highlight a few elements of our performance that we were most that we're most relevant to our results.
Speaker Change: Previously, the results of the renewable diesel business were included in our refining and marketing segment.
Marianne: In 2024, we executed on our strategic commitments first.
Speaker Change: For your reference, slides 24 and 25 provide illustrations of this reporting change. And we have provided recast historical financials in our investor packet available on our website. With that, I will turn the call over to Maryann.
Marianne: First and foremost we achieved our lowest companywide osha recordable injury rate and strongest environmental performance in the last five years, demonstrating our commitment to safety and reliability.
Maryann Mannen: Thanks, Christina, and good morning. Let me take a moment to highlight a few elements of our performance that were most relevant to our results.
Marianne: Over the full year, we delivered refining and marketing segment adjusted EBITDA per barrel of $5.33.
In 2024, we executed on our strategic commitments.
Marianne: Our commitment to operational excellence commercial performance and peer leading profitability per barrel and each of the regions in which we operate drove our strong results with refining utilization of 92% and commercial capture of 99%.
Maryann Mannen: First and foremost, we achieved our lowest company-wide OSHA recordable injury rate and strongest environmental performance in the last five years, demonstrating our commitment to safety and reliability.
Maryann Mannen: Over the full year, we delivered refining and marketing segment adjusted EBITDA per barrel of $5.33.
Marianne: Our midstream segment, which is where we report MPLX as results.
Marianne: Grew adjusted EBITDA by 6% year over year.
Maryann Mannen: Our commitment to operational excellence, commercial performance, and peer-leading profitability per barrel in each of the regions in which we operate drove our strong results.
Marianne: In 2020 for MPLX increased its quarterly distribution by 12, 5% driving an annualized cash distribution to MPC of $2.5 billion.
Maryann Mannen: with refining utilization of 92% and commercial capture of 99%. Our midstream segment, which is where we report MPLX's results, grew adjusted EBITDA by 6% year over year.
Marianne: This was the third consecutive year of distribution growth of 10% or greater.
Marianne: This was the fourth consecutive year of MPLX generating mid single digit adjusted EBITDA growth since.
Maryann Mannen: In 2024, MPLX increased its quarterly distribution by 12.5%, driving an annualized cash distribution to MPC of $2.5 billion.
Marianne: Since 2021, we've grown adjusted EBITDA at a compound annual rate of 7%.
Marianne: Our full year net cash from operations was $8 7 billion. This enabled peer leading capital return of $10.2 billion and a 23% capital return yield for our shareholders.
Maryann Mannen: This was the third consecutive year of distribution growth of 10% or greater.
Maryann Mannen: This was the fourth consecutive year of MPLX generating mid-single-digit adjusted EBITDA growth.
Marianne: In a business, where there is significant value and the ability to return capital to shareholders.
Maryann Mannen: Since 2021, we've grown Adjusted EBITDA at a compound annual rate of 7%.
Marianne: The global macro environment continues to deliver refined product demand growth and we expect 2025 will be another year of record refined product demand in our domestic and export businesses, we have seen steady year over year demand for gasoline and diesel and growth in demand for jet fuel.
Our full year net cash from operations was $8.7 billion.
Maryann Mannen: in a business where there is significant value in the ability to return capital to shareholders.
Marianne: Fourth quarter refining margins exhibited their typical seasonal weakness.
Marianne: We expect margins will improve in the second half of this year as announced to refinery closures offset recent capacity additions.
The global macroenvironment continues to deliver refined product demand growth.
Maryann Mannen: And we expect 2025 will be another year of record refined product demand. In our domestic and export businesses, we have seen steady year-over-year demand for gasoline and diesel and growth in demand for jet fuel.
Marianne: Leveraging our fully integrated refining system and geographic diversification across the Gulf Coast mid Con and West coast regions, we are well positioned to perform in this dynamic market environment.
Fourth quarter refining margins exhibited their typical season weakness.
Marianne: Longer term, we believe fundamentals support an enhanced mid cycle environment for refining as we expect demand growth to exceed the net impact of capacity additions and rationalizations through the end of the decade.
Maryann Mannen: We expect margins will improve in the second half of this year, as announced refinery closures offset recent capacity additions.
Maryann Mannen: Leveraging our fully integrated refining system and geographic diversification across the Gulf Coast, MidCon, and West Coast regions, we are well positioned to perform in this dynamic market environment.
Marianne: We expect the U S refining industry to remain structurally advantaged over the rest of the world.
Marianne: Mainly due to the availability of low cost energy.
Marianne: We remain steadfast in our commitment to safely and reliably operate our assets and protect the health and safety of our employees business partners and the community in which we operate.
Maryann Mannen: Longer term, we believe fundamentals support an enhanced mid-cycle environment for refining as we expect demand growth to exceed the net impact of capacity additions and rationalizations through the end of the decade.
Marianne: Our high complexity refining assets, and our domestic and international logistical and commercial capabilities further increase our global competitive advantage we.
Maryann Mannen: We expect the U.S. refining industry to remain structurally advantaged over the rest of the world, mainly due to the availability of low-cost energy.
Marianne: We are committed to achieving peer leading profitability in every region in which we operate.
Maryann Mannen: We remain steadfast in our commitment to safely and reliably operate our assets and protect the health and safety of our employees, business partners, and the community in which we operate.
Marianne: And over the past several years, we have acted to advance on this commitment.
Marianne: We have made sustained structural changes to improve our cost competitiveness, while maintaining safe and reliable operations throughout our commercial organization, we are improving value chain optimization with a more integrated and advanced approach to our execution you.
Maryann Mannen: Our high-complexity refining assets and our domestic and international logistical and commercial capabilities further increase our global competitive advantage.
Maryann Mannen: We are committed to achieving peer-leading profitability in every region in which we operate. And over the past several years, we have acted to advance on this commitment.
Marianne: He made disciplined investments in our refining and marketing value chain targeted to enhance margins reduce costs and optimize systems.
Marianne: Across all three of our regions, we see the results of these actions.
Maryann Mannen: We have made sustained structural changes to improve our cost competitiveness while maintaining safe and reliable operations. Throughout our commercial organization, we are improving value chain optimization with a more integrated and advanced approach to our execution.
Marianne: Along the U S. Gulf Coast were 42% of our capacity exist, we have more than $1 2 million barrels per day of refining capacity, which leveraged feedstock and logistics flexibility to provide a wide range of products to meet U S and export demand.
Maryann Mannen: We made disciplined investments in our refining and marketing value chains targeted to enhance margins, reduce cost, and optimize systems.
Marianne: 40% of our capacity is defined as our U S. Mid con regions, we have eight refineries with a total capacity of $1 2 million barrels per day, which capture market opportunities by leveraging our access to advantage feedstocks logistics and optimization of our large integrated value chain in the region.
Maryann Mannen: Across all three of our regions, we see the results of these actions.
Maryann Mannen: Along the U.S. Gulf Coast, where 42% of our capacity exists, we have more than 1.2 million barrels per day of refining capacity, which leverage feedstocks and logistics flexibility to provide a wide range of products to meet U.S. and export demand.
Marianne: The remaining 18% of our capacity resides along the U S. West coast anchored by our 365000 barrel per day, Los Angeles refinery and its fully integrated value chain, which benefits from feedstock and product optionality in a highly competitive marketing business, our commitment to safe and reliable operations operational X.
Maryann Mannen: Forty percent of our capacity is defined as our U.S. mid-con region. We have eight refineries with a total capacity of 1.2 million barrels per day, which capture market opportunities by leveraging our access to advantage feedstock logistics and optimization of our large integrated value chain in the region.
Marianne: <unk> and commercial performance.
Marianne: Position us to deliver peer leading financial performance irrespective of the market environment.
Maryann Mannen: The remaining 18% of our capacity resides along the U.S. West Coast, anchored by our 365,000-barrel-per-day Los Angeles refinery and its fully integrated value chain, which benefits from feedstock and product optionality and a highly competitive marketing business.
Marianne: Our disciplined capital investments have also strengthen our competitiveness in each of the regions in which we operate looking into 2025, we believe our planned capital investments will further enhance mpc's position well into the future.
Marianne: M P. CS capital outlook for 2025, excluding MPLX totals one point to $5 billion.
Maryann Mannen: Our commitment to safe and reliable operations, operational excellence, and commercial performance position us to deliver peer-leading financial performance, irrespective of the market environment.
Marianne: Underpinning our commitment to safety performance and environmental stewardship sustaining capital is approximately 30% of capital spend investments in our refining and marketing segment are focused on value enhancing and cost reduction opportunities with expected returns averaging around 30%.
Maryann Mannen: Our disciplined capital investments have also strengthened our competitiveness in each of the regions in which we operate.
Maryann Mannen: Looking into 2025, we believe our planned capital investments will further enhance MPC's position well into the future. MPC's capital outlook for 2025, excluding MPLX, totals $1.25 billion.
Marianne: Renewable diesel capital spend in 2025 is limited and we will be focused on sustaining current operations I'll provide some.
Maryann Mannen: Underpinning our commitment to safety performance and environmental stewardship, sustaining capital is approximately 30% of capital spend.
Marianne: Details on three of our major multi year projects that meet our criteria for investment.
Marianne: We are progressing the distillate hydro Cheater project at Galveston Bay, where we are investing to construct a 90000 barrel per day high pressure distillate hydro treater once in service the new distillate Hydro treater will upgrade high sulfur distillate.
Maryann Mannen: Investments in our refining and marketing segment are focused on value enhancing and cost reduction opportunities with expected returns averaging around 30 percent.
Maryann Mannen: Renewable diesel capital spend in 2025 is limited and will be focused on sustaining current operations.
Ultra low sulfur diesel, allowing us to place product in this higher value market. This project is expected to be completed by year end 2027, and generate a return of over 20%.
Maryann Mannen: I'll provide some details on three of our major multi-year projects that meet our criteria for investment.
Maryann Mannen: We are progressing the Distillate Hydro-Treater project at Galveston Bay, where we are investing to construct a 90,000 barrel per day, high-pressure Distillate Hydro-Treater. Once in service, the new Distillate Hydro-Treater will upgrade high-sulfur distillate.
Marianne: The Los Angeles refinery is a core asset in our west coast value chain and one of the most competitive refineries in the region. This low carbon refining investment once completed is expected to further enhance its competitiveness by integrating integrating and modernizing utility systems to improve reliability.
Maryann Mannen: to Ultra-Low Sulfur Diesel, allowing us to place product in this higher-value market. This project is expected to be completed by year-end 2027 and generate a return of over 20%.
Marianne: And increased energy efficiency. Additionally, a portion of the improvements address a regulation mandating emissions reductions for all southern California refineries.
Maryann Mannen: The Los Angeles Refinery is a core asset in our West Coast value chain and one of the most competitive refineries in the region.
Marianne: The improvements are expected to be completed by the end of this year, we expect to generate a return on our investments of approximately 20%.
This low-carbon refining investment, once completed...
is expected to further enhance its competitiveness
Marianne: The Robinson product flexibility project is expected to further extend the competitive position of our mid con value chain by shifting yields to higher value products.
Maryann Mannen: to improve reliability and increase energy efficiency. Additionally, a portion of the improvements address a regulation mandating emissions reductions for all Southern California refineries.
Marianne: This investment will increase the Robinson refineries flexibility to maximize jet production to meet growing demand. We expect the project to be completed by the end of 2026 and generate a return of approximately 25%.
Maryann Mannen: The improvements are expected to be completed by the end of this year. We expect to generate a return on our investments of approximately 20%.
Maryann Mannen: The Robinson Product Flexibility Project is expected to further extend the competitive position of our mid-con value chain by shifting yields to higher value products.
Marianne: The strategic investments at our Galveston Bay, Los Angeles, and Robinson refineries ensure we provide the clean burning fuels the world demands and further strengthen our competitive positions of our U F U S Gulf Coast West Coast, and mid con value chains.
Maryann Mannen: This investment will increase the Robinson Refinery's flexibility to maximize jet production to meet growing demand. We expect the project to be completed by the end of 2026 and generate a return of approximately 25%.
Marianne: This morning, MPLX also announced its 2025 capital outlook of $2 billion, including $1 $7 billion of growth capital and $300 million of maintenance capital.
Maryann Mannen: The strategic investments at our Galveston Bay, Los Angeles, and Robinson refineries ensure we provide the clean-burning fuels the world demands, and further strengthen the competitive positions of our U.S. Gulf Coast, West Coast, and MidCon value chains.
Marianne: Approximately 85% of its growth capital will be allocated to investments to grow MPLX is natural gas and NGL businesses in support of expected increased producer activity.
Marianne: MPLX is investing to expand its Permian to Gulf coast integrated NGL value chain progressing long haul pipeline projects and grow Permian and Marcellus processing capacity.
Maryann Mannen: Approximately 85% of its growth capital will be allocated to investments to grow MPLX's natural gas and NGL businesses in support of expected increased producer activity.
Marianne: MPLX anticipates mid teen returns on its growth capital outlook, which will extend the durability of its mid single digit growth profile.
Marianne: Over the last four years on average we have grown our midstream segment adjusted EBITDA by almost 7% per year the growth of MPLX as cash flows combined with its strong distribution coverage and low leverage provides MPLX considerable financial flexibility. We believe MPLX is.
Maryann Mannen: MPLX is investing to expand its Permian to Gulf Coast integrated NGL value chain, progressing long-haul pipeline projects and grow Permian and Marcellus processing capacity.
Maryann Mannen: MPLX anticipates routine returns on its growth capital outlook, which will extend the durability of its mid-single-digit growth profile.
Marianne: <unk> for additional distribution increases like the 12, 5% announced in 2024 in the future.
Maryann Mannen: Over the last four years, on average, we have grown our midstream segment adjusted EBITDA by almost 7% per year.
MPLX reached a significant milestone in its NGL wellhead to water value chain strategy with the announcement of a project to construct a Gulf coast fractionation complex and export terminal.
Maryann Mannen: combined with its strong distribution coverage and low leverage provides MPLX considerable financial flexibility. We believe MPLX is positioned for additional distribution increases like the 12.5% announced in 2024 in the future.
Marianne: MPLX has fully integrated NGL value chain connects the Permian to the Gulf Coast and will supply growing global demand for LPG.
Marianne: The multi year, two and a half billion dollar investment and the fractionation complex in export terminal complements mplx's existing asset base and leverages existing infrastructure.
Maryann Mannen: MPLX reached a significant milestone in its NGL wellhead-to-water value chain strategy with the announcement of a project to construct a Gulf Coast fractionation complex and export terminal.
Marianne: MPLX will build and operate the golf coast fractionation complex, consisting of two 150000 barrel per day fractionation facilities and a 400000 barrel per day LPG export terminal all of which will be located adjacent to Mpc's Galveston Bay refinery.
Maryann Mannen: MPLX's fully integrated NGL value chain connects the Permian to the Gulf Coast and will supply growing global demand for LPGs.
Maryann Mannen: The multi-year, $2.5 billion investment in the Fractionation Complex and Export Terminal complements MPLX's existing asset base and leverages existing infrastructure.
Marianne: Right.
Speaker Change: <unk> has entered into joint venture agreements with one oak for the export terminal and a bi directional purity pipeline between Mount Belvieu, and Texas City, one oak will market, it's 200000 barrels per day and provide connectivity to Mt Belvieu storage enhancing.
MPLX will build and operate the Gulf Coast Fractionation Complex.
consisting of two 150,000 barrel per day fractionation facilities.
Maryann Mannen: and a 400,000 barrel per day LPG export terminal, all of which will be located adjacent to MPC's Galveston Bay refinery.
Speaker Change: The competitiveness of the terminal. We also believe this strategic partnership with one oak will create additional optionality and value for our customers. We also see it as a platform for future collaboration and growth across our Gulf coast assets.
Maryann Mannen: MPLX has entered into joint venture agreements with One Oak for the export terminal and a bi-directional purity pipeline between Mt. Bellevue and Texas City.
Speaker Change: MPLX plans to market method ethane production from the Fracs to both existing and new customers leveraging our strategic relationship with MPLX MPC plans to contract with MPLX to purchase the remaining LPG production from the Fracs, which MPC will market.
Maryann Mannen: One Oak will market its 200,000 barrels per day and provide connectivity to Mount Bellevue storage, enhancing the competitiveness of the terminal. We also believe this strategic partnership with One Oak will create additional optionality and value for our customers.
Maryann Mannen: We also see it as a platform for future collaboration and growth across our Gulf Coast assets.
Speaker Change: Globally through its existing market businesses via the new export terminal.
Maryann Mannen: NPLX plans to market ethane production from the fracks to both existing and new customers.
Speaker Change: The fractionation facilities are expected to be in service in 2028, and 2029 and the export terminal is expected to be in service in early 2028.
Speaker Change: We anticipate mid teen returns on the project, which is expected to begin generating EBITDA when placed in service in 2028.
Speaker Change: And it will ramp through the end of 'twenty 30. Additionally, we believe the expansion of our Gulf Coast NGL value chain will create a platform for optimization and incremental growth opportunities.
Maryann Mannen: The fractionation facilities are expected to be in service in 2028 and 2029 and the export terminal is expected to be in service in early 2028.
Speaker Change: Our capital allocation priorities remain consistent.
Maryann Mannen: We anticipate mid-teen returns on the project, which is expected to begin generating EBITDA when placed in service in 2028.
Speaker Change: Our number one priority is sustaining capital we remain steadfast in our commitment to safely operate our assets and protect the health and safety of our employees and the communities in which we operate we are committed to paying a secure competitive and growing dividend.
Maryann Mannen: and will ramp through the end of 2030. Additionally, we believe the expansion of our Gulf Coast NGL value chain will create a platform for optimization and incremental growth opportunities.
Speaker Change: We will invest where we believe there are attractive returns, which will enhance our competitiveness.
Maryann Mannen: Our capital allocation priorities remain consistent. Our number one priority is sustaining capital. We remain steadfast in our commitment to safely operate our assets and protect the health and safety of our employees and the communities in which we operate. We are committed to paying a secure, competitive, and growing dividend.
Speaker Change: And position M P C well into the future.
Speaker Change: Beyond these three objectives, we will return all excess capital through share repurchases.
Speaker Change: As of the end of the year, we had seven $8 billion remaining under our share repurchase authorization.
Speaker Change: Highlighting our commitment to superior shareholder returns.
Maryann Mannen: We will invest where we believe there are attractive returns, which will enhance our competitiveness and position MPC well into the future.
Speaker Change: The durable and growing cash flow of MPLX differentiates M. P. C from peers MPLX is strategic to Mpc's portfolio portfolio and therefore its value proposition, we expect distributions from MPLX in 2025 will cover mpc's dividend and Standalone capital outlook.
Maryann Mannen: Beyond these three objectives, we will return all excess capital through share repurchases.
Maryann Mannen: As of the end of the year, we had $7.8 billion dollars remaining under our share repurchase authorization, highlighting our commitment to superior shareholder returns.
Speaker Change: Operating cash flow generated by our refining and marketing and renewable diesel segments are expected to be available for capital return through share repurchases.
Maryann Mannen: The durable and growing cash flow of MPLX differentiates MPC from Peers.
Speaker Change: With our highly advantaged refining business and the $2 $5 billion annualized distributions from MPLX, we are positioned to lead peers in capital returns through all market cycles, Let me turn the call over to John Thanks, Maryann moving to the fourth quarter and full year highlights slide 14 provides a <unk>.
MPLX is strategic to MPC's portfolio
Maryann Mannen: We expect distributions from MPLX in 2025 will cover MPC's dividends and stand-alone capital outlook.
Maryann Mannen: Operating cash flow generated by our refining and marketing and renewable diesel segments are expected to be available for capital return through share repurchases.
John: <unk> of our financial results.
Speaker Change: This morning, we reported adjusted earnings per share of 77 for the fourth quarter and $9 51 for the full year adjusted.
Maryann Mannen: with our highly advantaged refining business and the $2.5 billion annualized distribution from MPLX.
Speaker Change: Adjusted EBITDA was approximately $2 $1 billion for the quarter and $11 $3 billion for the year.
Maryann Mannen: We are positioned to lead peers in capital returns through all market cycles. Let me turn the call over to John Thanks, Maryann Moving to the fourth quarter and full year highlights slide 14 provides a summary of our financial results
Speaker Change: Refining and marketing segment adjusted EBITDA per barrel was $2 <unk> for the quarter.
Speaker Change: $5 33 for the year.
John Quaid: This morning we reported adjusted earnings per share of 77 cents for the fourth quarter and $9.51 for the full year.
Speaker Change: Cash flow from operations, excluding working capital changes was $1 7 billion for the quarter.
Speaker Change: $8 $2 billion for the year.
John Quaid: Adjusted EBITDA was approximately $2.1 billion for the quarter and $11.3 billion for the year.
Speaker Change: And during the quarter, we returned $292 million to shareholders through dividends and repurchased nearly $1 $3 billion of our shares.
John Quaid: Refining and marking segment adjusted EBITDA per barrel was $2.03 for the quarter and $5.33 for the year.
Speaker Change: Slide 15 shows the sequential change in adjusted EBITDA from third to fourth quarter 2024, and the reconciliation between net income and adjusted EBITDA for the quarter.
John Quaid: Cash flow from operations, excluding working capital changes, was $1.7 billion for the quarter and nearly $8.2 billion for the year.
Speaker Change: Adjusted EBITDA was lower sequentially by approximately $400 million.
John Quaid: And during the quarter, we returned $292 million to shareholders through dividends and repurchased nearly $1.3 billion of our shares.
Speaker Change: Driven by decreased results in our refining and marketing segment.
Speaker Change: Slightly offset by improved results for our midstream and renewable diesel segments.
John Quaid: Slide 15 shows the sequential change in adjusted EBITDA from 3rd to 4th quarter 2024 and the reconciliation between net income and adjusted EBITDA for the quarter.
Speaker Change: The tax rate for the quarter was 12%.
Speaker Change: Largely reflecting the earnings mix between our R&M and midstream businesses.
Speaker Change: Moving to our refining and marketing segment results for the fourth quarter on slide 16.
John Quaid: Adjusted EBITDA was lowered sequentially by approximately $400 million driven by decreased results in our refining and marketing segment, slightly offset by improved results for our midstream and renewable diesel segments.
Speaker Change: Lower crack spreads mainly in the mid Con region were the primary driver for lower R&M margins in the fourth quarter.
Speaker Change: Our refineries ran at 94% utilization processing nearly 2.8.
John Quaid: The tax rate for the quarter was 12%, largely reflecting the earnings mix between our R&M and midstream businesses.
Speaker Change: Barrels of crude per day and refining.
Speaker Change: Operating costs were $5 26 per barrel in the fourth quarter.
Speaker Change: Turning to slide 17.
Speaker Change: Solid commercial execution as well as typical seasonal tailwind drove fourth quarter capture of 119%.
John Quaid: Lower crack spreads, mainly in the MidCon region, were the primary driver for lower R&M margins in the fourth quarter.
John Quaid: Our refineries ran at 94% utilization, processing nearly 2.8 million barrels of crude per day, and refining operating costs were $5.26 per barrel in the fourth quarter.
We leverage the scale of our fully integrated system in all three regions to capture margin opportunities across our entire value chain from feedstocks to products.
Speaker Change: We are committed to improving our commercial performance and believe we are building capabilities that will provide sustained incremental value and will produce results that can be seen in our financials.
John Quaid: Turning to slide 17, solid commercial execution as well as typical seasonal tailwinds drove fourth quarter capture of 119 percent.
Speaker Change: Slide 18 shows our midstream segment performance for the quarter.
John Quaid: We leverage the scale of our fully integrated system in all three regions to capture margin opportunities across our entire value chain, from feedstocks to products.
Our midstream segment continues to deliver cash flow growth.
Speaker Change: Segment adjusted EBITDA for the quarter was up nearly 5% sequentially.
John Quaid: We are committed to improving our commercial performance and believe we are building capabilities that will provide sustained, incremental value and will produce results that can be seen in our financials.
Speaker Change: MPLX, which is the largest portion of our midstream segment remains a source of durable growth as it progresses its mid single digit adjusted EBITDA growth strategy.
Slide 18 shows our midstream segment performance for the quarter.
Speaker Change: Slide 19 presents the elements of change in our consolidated cash position for the fourth quarter.
Our midstream segment continues to deliver cash flow growth.
Speaker Change: Operating cash flow, excluding changes in working capital was $1 $7 billion in the quarter driven by both our refining and midstream businesses.
John Quaid: as segment adjusted EBITDA for the quarter was up nearly 5% sequentially.
John Quaid: MPLX, which is the largest portion of our midstream segment, remains a source of durable growth as it progresses its mid-single-digit adjusted EBITDA growth strategy.
Speaker Change: Working capital was a $497 million source of cash for the quarter.
Speaker Change: Primarily driven by benefits from inventory reductions and a decrease in refined product prices.
John Quaid: Slide 19 presents the elements of change in our consolidated task position for the fourth quarter.
Speaker Change: Capital expenditures investments and acquisitions were $935 million for the quarter.
John Quaid: Operating cash flow, excluding changes in working capital, was 1.7 billion dollars in the quarter, driven by both our refining and midstream businesses.
Speaker Change: Cash was utilized to repay $1.15 billion of MPLX senior notes that matured in December.
John Quaid: Working capital was a $497 million source of cash for the quarter, primarily driven by benefits from inventory reductions and a decrease in refined product prices.
Speaker Change: And MPC returned almost $1 $3 billion through share repurchases exclusive of excise tax payments and $292 million in dividends during the quarter.
John Quaid: Capital expenditures, investments, and acquisitions were $935 million for the quarter.
Speaker Change: At the end of the year Mtc had approximately $3 $2 billion in consolidated cash.
John Quaid: Cash was utilized to repay 1.15 billion dollars of MPLX senior notes that matured in December.
Speaker Change: Including MPC cash of $1 $7 billion in MPLX cash of $1 5 billion.
John Quaid: And MPC returned almost $1.3 billion through share repurchases, exclusive of excise tax payments, and $292 million in dividends during the quarter.
Speaker Change: Turning to guidance on slide 20, we provide our first quarter outlook.
Speaker Change: We are projecting crude throughput volumes of just over $2 5 million barrels per day, representing utilization of 85%.
John Quaid: At the end of the year, MPC had approximately $3.2 billion in consolidated cash.
Speaker Change: Turnaround expense is projected to be approximately $450 million in the first quarter with activity focused in the Gulf coast and West coast regions.
John Quaid: including MPC cash of 1.7 billion dollars and MPLX cash of 1.5 billion.
Speaker Change: For the full year turnaround expense.
John Quaid: Turning to guidance, on slide 20 we provide our first quarter outlook.
Speaker Change: Turnaround expenses are expected to be similar to last year at around one $4 billion.
Speaker Change: For the quarter operating costs are projected to be $5 70 per barrel.
Speaker Change: Distribution costs are expected to be approximately $1 $5 billion.
Speaker Change: And corporate costs are expected to be $220 million with that let me pass it back to Mary Anne.
Speaker Change: John.
John: We are unwavering in our commitment to safe and reliable operations operational excellence commercial execution, and our cost competitiveness yield sustainable structural benefits and position us to deliver peer leading financial performance in each of the regions in which we operate.
John: To deliver this we will optimize our portfolio to deliver outperformance now and in the future, we'll leverage our value chain advantages and ensure the competitiveness of our assets, while we continue to invest in our people.
John: Our execution of these commitments position us to deliver the strongest through cycle cash generation durable.
John: Durable midstream growth is expected to deliver cash flow uplift and expected to deliver distribution increase going forward a differentiator from our peers.
John: Investing capital, where we believe there are attractive returns will enhance our competitiveness now and in the future.
John: We are committed to leading in capital allocation and we'll return excess capital through share repurchases MPC is positioned to create exceptional value through peer leading performance execution of our strategic commitments and its compelling value proposition, let me turn the call back over to Christina Thanks Maryann.
Christina: As we open the call for your questions as a courtesy to all participants we ask that you limit yourself to one question and a follow up if time permits we will re prompt for additional questions.
Christina: We'll now open the call to questions.
Christina: Thank you we will now begin the question and answer session. If you have a question. Please press Star then one on your Touchtone phone if you wish to be removed from the queue. Please press Star then two if you are using a speakerphone you may need to pick up the handset first before pressing the numbers. Once again, if you have a question. Please press star then.
Speaker Change: One on your Touchtone phone. Our first question comes from Neil Mehta with Goldman Sachs. Your line is open.
Neil Mehta: Yeah, Thanks, Maryann and team I guess the <unk>.
Speaker Change: First question is just on the refining side.
Speaker Change: There was a $543 million positive capture impact in the quarter, 119% capture Im curious you know how much of that was seasonal typically <unk> to capture well versus commercial and anything you can do to kind of unpack it either regionally or in terms of.
Speaker Change: But the underlying drivers of that capture.
Speaker Change: Yeah, Thanks, Neal and good morning, again, so look as you know and you look back over our last several fourth quarters over the past few years, our fourth quarter tends to be one of the strongest quarters I think if you look at it over the last several years, we've averaged in a range of about 115 116.
Speaker Change: In general as you know when we look at capture there are clearly things that we don't have control over and then there are the things that we do have control over as we've been sharing you know our objective is to approach 100%. This year on average we reached 99 in the refining and.
Speaker Change: And marketing opportunity there. So clearly some things that we believe have been structural in the work that we've been doing we've been sharing over the last couple of quarters and obviously some of those that have just fourth quarter.
Speaker Change: Normal activity, but I'm going to pass it to rich because I think he's got a few things that he'll give you some specifics on yeah, Hi, Neil let me start by saying Thank you for calling this out and this is obviously a significant focus for us and the team executed extremely well in the fourth quarter. So just a couple of Nuggets for you.
Speaker Change: On the export side we've.
Speaker Change: We have been stayed and quarter after quarter that we're leaning into our export strategy in the fourth quarter was a great example of that our assets ran extremely well across the board and we were able to lean in to our export strategy and set records on volume and margin. So that's a piece of a pause.
Neil Mehta: O'neill and then secondly, you know.
Neil Mehta: An area that we don't speak much of his asphalt, but I will say, we had great execution on the asphalt front, allowing us to take advantage of improved asphalt asphalt spreads and execute our strategies driven by strong asphalt retail sales. So those are just a couple of nuggets, Neil if theres, many more but I will.
Neil Mehta: Leave you with those two.
Speaker Change: Thank you Rick and as a follow up is just on MPLX and the wellhead to water strategy that the mid teens returns that you're targeting on this can you talk a little bit about some of the underlying assumptions is it fair to say that even though capital is coming in a little higher at the midstream side of the business given the framework that you are.
Speaker Change: Good out here, where the buyback is coming from the refining and renewable diesel business higher MPLX spend would impact the outlook for your ability to return capital.
Speaker Change: Yeah, Neil certainly let me try to answer those questions for you. So first and foremost when we think about this NGL wellhead to water strategy, you're right. We do expect mid teens returns you.
Speaker Change: You you May know that you know over the last several quarters, we have been talking about the opportunity set but frankly, we've been looking at this project for a period of time, so underlying assumptions are with respect to overall capital that we need to spend timing of that markets that we will see.
Speaker Change: <unk> costs to get implemented are all things that we have considered and evaluated and evaluated to be sure that you know when we look at this project that.
Speaker Change: We're confident in these mid single digit returns I think the next project sorry question that you asked was really about capital and whether or not the capital that we would be spending in MPLX has implications for MPC. So the answer to that is no.
Speaker Change: As you know MPLX has really solid balance sheet flexibility.
Speaker Change: One when you look at the debt to EBITDA ratio.
Speaker Change: We've talked about our ability to be kind of in the range plus or minus four times you know we're somewhere in the range of three so we absolutely have balance sheet flexibility there.
Speaker Change: Really all of that $2 5 billion dollar multi year capital and MPLX is largely MPLX. There's 70 million piece of that is M. P. C. And then the last part of that is as we continue to grow that MPLX distribution. You've heard me talk about the 12, 5% increase that's a two and a half.
Speaker Change: Distribution to MPC at.
Speaker Change: It covers the 2025 MPC dividend on the 2025 capital that we just announced of 1.25, therefore, giving M. P C. The flexibility.
Speaker Change: To return capital via share buyback, so balance sheet flexibility and MPLX will support the growth of those MPLX projects.
Speaker Change: I hope that gets you.
Speaker Change: Very clear thanks very much.
Speaker Change: You are welcome.
Speaker Change: Thank you. Our next question comes from Doug Leggate with Wolfe Research. Your line is open.
Doug Leggate: Thank you good morning, everyone. Good morning, Marianne Fantastic result in refining despite breakeven, we actually see that Jewish so.
Speaker Change: Hum.
Speaker Change: Question is I hate to ask the obvious one but.
Speaker Change: Got a 30 day delay in a potentially on.
Speaker Change: I don't know if its pull through or not but the tariff situations. You guys are obviously, a large consumer of heavy bottles. My question is what would be your.
Speaker Change: Are you planning for the contingency what would the impact be.
Speaker Change: Thinking specifically about how does your plan adopt a different die of crude if you had to.
Speaker Change: Frame it for us in whatever way you like but.
Speaker Change: But obviously all funds struggled with water would actually mean that the tariffs were in fact introduced.
Speaker Change: Yeah. Good morning. Thanks for your question Yeah. You know, it's it's interesting you know studying tariffs has been at the top of the list of things that we've been doing among many others like running the business right but.
Speaker Change: When we think about the impact of tariffs.
Speaker Change: One if they were to be imposed or not it's still a variable question.
Speaker Change: We've got a highly integrated system and we've got a lot of Optionality and we'll use that optionality, having said that as.
Speaker Change: You state, we do process, a significant amount of heavy crude and therefore, we think it's likely if tariffs were being put in place in 30 plus days or not.
Speaker Change: That we would see cost increases we believe that the majority of that will ultimately be borne by the producer and then frankly to a lesser extent the consumer.
Speaker Change: We M. P. C will use our integrated system, our commercial excellence, our operational performance to really minimize the best that we can the margin impact to our financial results.
Speaker Change: That's that's our goal and we.
Speaker Change: We'll continue to evaluate you know we're working with.
Rec: The administration and we're working with agencies as well as the trade associations to be sure that the right people understand the implications of these decisions, but with that let me, let me pass it to rec and he can give you a little more color on on our diet.
Rec: Yeah, Doug a very timely question as we have run scenario planning for every facility in a market that we have a coast to coast. So we're well versed in this as you might expect and maryann hit it well.
Speaker Change: When she touched on our integrated system, our knowledge our commercial performance. We believe we're in as good or better shape than anyone in the industry to absorb a tariff if it were to ever get put into place and maybe a good example of that that I would want to unpack for you is.
Speaker Change: In the mid Con we have worked tirelessly for a long time on our logistics capability and connectivity. So many of our refineries in our mid Con region, we could look to pivot to alternative crudes because of our logistics capabilities and we're quite unique that way and.
Speaker Change: I would give you crudes to think of such as Bakken and Rockies Utica Marcellus as a few so I wanted to leave you with every region is different every refinery is different but we believe that we have done the scenario planning to may.
Speaker Change: Make this as lease painful as possible and in fact, we believe at the end of the day in most regions. If not all of that we operate in will have a competitive advantage against others, who are running significant amounts of Canadian grades.
Speaker Change: Richard I appreciate the detailed answers from both of you Wonder if I could just do a quick part beyond that if you did displace heavy with a bakken or similar could would that require utilization reduction.
Speaker Change: Yeah.
Speaker Change: It may shift yields more than anything Doug.
Speaker Change: And it could potentially impact utilization, however, I would I would lean you maybe ask you to as you look at yesterday as it played out.
Speaker Change: The market was quickly sending signals that it would quickly respond and absorb a lot of the indicators that would continue to make potentially a heavy barrel economic to run as Maryann said, we do believe the producer will bear a large part of the impact so.
Speaker Change: I would say a light switch within our system, we believe would have minimal impact.
Speaker Change: Thank you Mary.
Speaker Change: I've got a very quick follow up which is I wanted to pick on one of your comments at the end of your prepared remarks, we will optimize our portfolio I Wonder if you could.
Speaker Change: To elaborate on what that means and I'll leave it there. Thank you.
Neil Mehta: Yeah, certainly Doug you know for the last several years one of our strategic pillars is to ensure the competitiveness of all of our assets.
Neil Mehta: That has been in place historically and will continue to be in place we need to be sure that every one of our assets is delivering the cash flow that we expect and is part of our long term scenario for how we will operate in the future. So we will continue to look at that all the time.
Neil Mehta: Thank you so much guys.
Neil Mehta: Youre welcome to out thank you.
Speaker Change: Thank you. Our next question comes from Manav Gupta with UBS. Your line is open.
Manav Gupta: Oh, Hey, Marianne I wanted to congratulate you I think when you took over the CEO of one of your key goals was.
Manav Gupta: To fully fund the dividend and Capex at MPC to MPLX and an automotive got you there, but we got to deliver more than 627, we didn't have youre getting that in 2025. So congratulations on that my question. Here is we think about mpc's buybacks as funded by oddity.
Manav Gupta: And refining with MPLX funding, the dividend and Capex, but the projects that you announced today could put you on the distribution growth of 12% for four or five years. So starting 2026 is it possible that MPLX distributions is not only funding the capex the dividend, but also possible.
Buy backs at MPC.
Speaker Change: Thank you Manav.
Speaker Change: So we have been trying to demonstrate that our cash flows being generated at MPLX are durable and that we can put together capital as well as small M&A bolt ons that can support mid single digit growth for a period of time and hopefully to.
Speaker Change: Day, the announcement of our NGL strategy wellhead to water value chain isn't yet. Another example of that in addition to some of the investments that we made in 2020 for expansion of Bangle as an example, our summit acquisition.
In the Utica.
Speaker Change: And wink to Webster that $12 five distribution increase that we announced in November of 2024. We also said we saw it had the ability to be sustaining in similar nature for the next several years. So as we continue to grow we certainly believe that distribution.
Speaker Change: Coming back to MPC gives us flexibility for peer leading capital allocation. We think it is a differentiator and certainly we believe that that growing distribution to MPC will allow us to increase our share repurchase in the future.
Speaker Change: Well if if my quick follow up is a little bit on the avast schools to another refinery started going to go down at the year end.
Speaker Change: Some reports of an unplanned refinery downtime also in the first half now so just trying to understand from your perspective, the dynamics on the west coast understanding that the regulatory environment may not be the best but from the perspective of supply demand. The reagent my extended work for you.
Speaker Change: Yeah actually I think you said it well you know as you know we have made some commitments and investments I talked about one of them here on the call. This morning are for our Los Angeles asset. One we think it is a really our efficiency.
Speaker Change: Capital investment, we also think obviously it meets the required Nox reduction.
Speaker Change: Reduction emission requirements going forward and gives us incremental efficiency and profitability, particularly in a in a low carbon environment certainly we understand the challenges of doing business. In this environment. You know this well I mean, we have evaluated our ability to participate in this region for many many years.
Speaker Change: Hence the decision that we made back in 2022 closed Martinez as a fossil fuel refinery and then in early in 'twenty, one the decision to convert it to renewable diesel.
Speaker Change: We're working closely with the agencies in the state to ensure that we understand and in similar fashion as I mentioned earlier through our trade associations also really trying to understand and frankly influence be of help so that those making the regulatory decisions in the legislative decisions in the state.
Speaker Change: The fact that they need to make good decision, we continue to believe our asset on the west coast.
Speaker Change: Is one of the most competitive, particularly when you look at the integrated nature of it the MPLX as well as its ability to process various crudes et cetera. So yes, we continue to believe them.
Speaker Change: In the long term viability of that asset.
Speaker Change: Thank you I'll turn it over.
Speaker Change: Thank you.
Speaker Change: Thank you. Our next question comes from Paul Cheng with Scotty a bank your line is open.
Speaker Change: Hey, Tim good morning.
Speaker Change: Hum.
Speaker Change: Yeah.
Speaker Change: This year I think you guys, saying that your turnaround cost is about one 4 billion similar to last year, which is quite high so trying to understand that.
Speaker Change: Assay for the cycle, what's considered at the La turnaround cost for you guys. Just one for you as the new normal or this is condensate does somewhat by high also.
Speaker Change: Hey, Good morning, Paul It's John I'll, maybe start with that and then we'll see what follow ups you might have.
Paul Cheng: Certainly like you said, what we're looking at 1.4 for this year similar to last year's if you look back over the last several years it gets a little bit hard to see a run rate right. You would have had COVID-19, where we really would have slowed down that would have pushed some turnarounds to the right. If you will in the future years. We also continue to invest in our assets in <unk>.
Paul Cheng: <unk> kind of the capacity of what we have I mean, interestingly. If you go back pre COVID-19 and post either shutting down or converting refineries were almost back to the same or more capacity than we were previously so I think all of those things are driving that number and again.
Paul Cheng: And Tim and the team can speak to this right that those are scheduled outages that we have on the cycle that we're managing to that that we need to get done I think though I was trying to give you. Some factors, though there may be driving the 1.4, where we're seeing for this year.
Speaker Change: Hey, John Thank you for that how about what consider from.
Speaker Change: And then internally you guys standpoint will be more of a normal cycle, let's say average for the cycle.
Speaker Change: Yeah, Paul I don't know if it's helpful to get into there's lots of things that can move that on the asset portfolio, where we are in the schedule.
Speaker Change: We'd even kind of stepped into here just recently given you the number for the year that we used to just kind of give you the number by quarter. So.
Speaker Change: I think if you're okay with it we might just stick with what we're looking at for this year and then we will speak to it as the year progresses.
Speaker Change: Okay.
Speaker Change: Question wanted to go back into the margin capture.
Speaker Change: California.
Speaker Change: Here you have some really well, yes, I mean, you we stay and took out.
Speaker Change: Renewables, so that improved fallout that helped the margin, but still very good.
Speaker Change: Typically that I think for the butane, Brian thing, California doesn't really benefit that much so trying to understand that.
Speaker Change: I think Rick mentioned about export and some of them.
Speaker Change: And the one off item in California.
Speaker Change: For this quarter, we should be aware.
Speaker Change: I want that I mean is there any other.
Speaker Change: That you can point us to why that seems to be performing really well.
Speaker Change: Hey, Paul It's John I'll start maybe maybe then turn it over to Rick I think one of the things.
Speaker Change: We would call out.
Speaker Change: Really I'll start with him and his team and how we ran the facilities in the quarter strong utilization really positioning us to then turn to Rick and his team.
Speaker Change: To take that production to market across a really competitive value change. So at a high high level I think thats, what youre seeing and maybe I'll turn it over to Rick for any other details.
Rick: Paul maybe just to address the export comment when when I referenced our exports earlier think of that is predominantly U S. Gulf coast, it's not that there werent some exports going out of the west coast, but they were minimal in terms of our overall portfolio. The only item that I would add to John's.
Rick: Commentary as we often talk fully integrated value chain and our advantages in California and in house, we talk refinery to retail and we are one of the few out there that takes the value chain all the way to the end consumer.
Rick: And that is a value driver that I think and that we believe is showing up and capture that others aren't able to capture so we see it as a differentiator fall.
Speaker Change: Okay very good thank you.
Rick: Youre welcome. Thank you. Thank you Paul.
Speaker Change: Thank you. Our next question comes from Roger read with Wells Fargo. Your line is open.
Roger Read: Yeah. Thank you good morning.
Speaker Change: Good morning, Roger good.
Roger Read: Good morning, Marianne come back to your comments on the macro and that demand may exceed our capacity as we see more closures within the industry.
Speaker Change: What's your view here.
Speaker Change: Looking at 'twenty five in terms of demand as we think about gasoline.
Speaker Change: Jet fuel and then diesel, particularly we finally got a plus 50 on the ISR manufacturing for this past month.
Roger Read: Yes, sure Roger I'd say look.
Roger Read: You've heard us share our views really no no different as we look at the long term, we absolutely remain constructive over the long term we think.
Roger Read: 25 is going to be another year of growth in refined product demand and we see that continuing through the through the decade.
Roger Read: You know in 2025, there's we've got supply coming online two of which we know we've talked about dango data book as you know clearly some challenges, particularly in the first quarter here and even in the fourth quarter.
Roger Read: With just spoke of and then there is probably about 800000 barrels a day that we think will be coming offline one of them. We now happening in the first quarter. Another one happening in the fourth quarter, which probably wont have much impact in 2025, and then there's a few in one in Germany, a couple in Scotland.
And then Theres always really what happens with respect to with respect to China. So back half of the year. When we look at 2025, we think we should see improvement we should see margins expanding frankly, we're beginning to see a little bit of that is seasonal unwind begins to occur.
Roger Read: In our system gasoline year over year, it's been fairly steady diesel up slightly and to your point, we've actually seen jet demand growth, which is what you would expect as well.
Roger Read: Overall, we remain constructive long term think the back half of 'twenty five could look better China always an interesting dynamic to the extent that's better than we anticipate could be an accelerator. Obviously you know some of the decisions that are being debated here with China would meet that and we'll have to wait and see.
Roger Read: See you know what.
Roger Read: What happens there so I think that's how I would characterize it Roger.
Roger Read: I appreciate that and then maybe as an unrelated follow up.
Roger Read: Obviously, a lot of things going on with the Trump administration on the tariffs and all but.
Roger Read: There's also under the executive orders a lot of things to roll back a lot of let's call. It pro.
Roger Read: Sustainable energy or clean energy as it was advertised.
Roger Read: What are what are some of the key things you're watching on that progress that may or may not be made.
Roger Read: During 2025.
Roger Read: Yeah, Roger Here's what I would say when we look at our sustainability initiatives, you'll look at scope, one scope two and even our scope three absolute we remain committed to those and frankly last year, we actually increased our target because we were making progress, particularly on methane as an example.
Roger Read: So we will continue to remain focused on delivering scope one scope two we'll evaluate what opportunities we have as we look at scope three.
Roger Read: The whole concept around renewable diesel you heard me mention perhaps in my remarks that our focus in the short term is limiting the amount of capital that we're putting to work in renewable diesel will certainly do what we need to to ensure the sustainability and the reliability of that asset.
Roger Read: You know came up to nameplate capacity in the fourth quarter as we said and we believe that as we look at 2025.
Roger Read: That asset will be profitable, but again as we as we look at we'll watch the variables are just really in the whole renewable space.
Roger Read: That's it you know that is certainly one that are that we'll be looking at carefully as well.
Speaker Change: I'm going to pass to Jim and see if there was anything that Jim fields is that I've I've missed them.
Roger Read: Roger I agree with what Maryann said I think we're gonna remained steadfast kind of in the middle of the fairway on our sustainability goals and metrics.
Speaker Change: Kind of what some of the variables.
Speaker Change: Great I appreciate it thank you.
Roger Read: Youre welcome Roger Thank you.
Speaker Change: Thank you. Our next question comes from Jason <unk> with TD Cowen Your line is open.
Jason: Hey, good morning, Hey, Jay Thanks for taking my questions.
Jason: The first one on the buyback and the ability to generate cash beyond <unk>.
Speaker Change: Cash from ops at the at the parent company I think you.
Speaker Change: Youre going to be refinancing $750 million of debt at the parent. So we should we think about that being available.
Speaker Change: For us towards buybacks and and then.
Speaker Change: Any opportunity for for buyback or sorry for Dropdowns from the parent down to the MLP is that still an arrow in your quiver that that you could use.
Speaker Change: Hey morning, Jason It's John Yeah, you're spot on on the cash balance and that maturity rate that was one that matured in September we decided to pay it off and mentioned at that time, we'll be looking to refinance that at the right time right. So you've got $750 million of cash that's coming back onto the balance sheet, that's available for allocation I'll, let Mary.
Speaker Change: And speak to the drops.
Speaker Change: Yeah, Jason with respect to the drops.
Speaker Change: There is a few assets that sit on the MPC side that we believe ultimately.
Belong rightfully so in the in the midstream business.
Speaker Change: When we or if we consider these drops in the past they have certainly not been a priority for several reasons that you know that you know well, but even when we consider these drops we wanted to be sure that we're clear. These drops would not count if you will with respect to our commitment for MPLX to have mid single digit growth.
Speaker Change: This EBITDA is currently in the system.
Speaker Change: We would make that dropped to be sure that the assets.
Speaker Change: Our our positioned properly in the business, having said that that cash on the MPC side could certainly be used to continue to buy back stock in particular, when we look at the valuation today versus our long term opportunity set and the valuation and the value creation that we think we can generate an MPC that cash.
Speaker Change: Could be put to good use on the MPC side, but would not count we would not do that it would not count against MPLX is mid single digit growth objective because that EBITDA is already in our system I hope that helps.
Speaker Change: Yes got it understood do you have a estimate for the amount of EBITDA that could potentially be dropped down.
Speaker Change: Jason when we if and when we do a drop will be sure that we give you. Good clarity. So you understand how not to include that in the growth, but well we'll share that with you when the time comes.
Speaker Change: Alright, great and my follow up is just a quick one I noticed in the press release, there wasn't a quarter to date buyback figure for <unk> 25, I think that's the first time, you've excluded that figure in the press release.
Speaker Change: For for a handful of quarters, if not two years do you have that figure handy and was there a reason that you decided to exclude it this quarter.
Speaker Change: Hey, Jason It's John let me try and answer that for you and maybe to kind of where you were going a little bit of history. Certainly if you go back in time.
Speaker Change: Post the speedway sale post the significant change in margins, we were returning a significant amount of capital and really wanted to lean in and share with you all what that first month of the quarter looked like as we've kind of approach the more normalized balance sheet, even as we continued to provide that you've also heard us say hey, one month.
Speaker Change: Isn't really indicative of what the.
Speaker Change: Repurchases might be for the entire quarter. So I think just as we're pivoting now.
Speaker Change:
Speaker Change: Decided maybe now is the time that that number maybe isn't as useful as it had been in the past. So hopefully that hopefully that you can understand kind of our change in view there.
Speaker Change: Yeah, that's great thanks for explaining that.
Speaker Change: Thanks, Jason.
Speaker Change: Thank you. Our next question comes from John Royall with Jpmorgan. Your line is open.
John Royall: Hi, Good morning, Thanks for taking my question. So my first question's on 2020 for MPC level Capex.
Speaker Change: The 1.52 billion for 24 came in a bit above the original well.
125 billion guide.
Speaker Change: And it looks in particular like a big <unk> I was just hoping you could help US bridge the difference between the guide from a year ago, and where you ended up.
Speaker Change: Hey morning, John It's John Let me, let me try and give you a little bit more color there.
Speaker Change: Really I think what we saw were a couple of things and I'll start with you've heard Rick talk about how we're going to market and our fully integrated value chain and frankly, we saw some really strong opportunities to invest some capital to drive cash flow and the marketing side of our business that was probably the the.
Speaker Change: The majority or a larger portion of what drove that but we also had some opportunities across the refining base, where we saw some projects that we could put money too so.
Speaker Change: I'd just give you that has some color.
Speaker Change: Again, we saw those opportunities and wanted to take advantage of them as we continue to look to drive cash flow growth of the refining and marketing business.
Speaker Change: Okay. Thank you and then my next question is on renewable.
Renewable diesel margins.
Speaker Change: There's a lot of uncertainty in the regulatory environment right now and I was just hoping for your thoughts on our D margins early in 2025, and how you think the 40 fives vehicles ultimately play out.
Speaker Change: Yeah, Hi, John This is Rick so with Martina is fully online as we stated earlier, we continue to expect EBITDA contribution going forward as you saw in our release, we were positive $28 million in fourth quarter. So we really have a good stable environment and we have a great team executing our.
Speaker Change: <unk> stocks in our product distribution.
Speaker Change: With that being said as you said there remains a lot of uncertainty in this space and it continues to evolve right. When you think of our New administration, how does 45 Z get implemented or does it and at what pace and then when you have the BTC expiry I would tell you I wouldn't.
Speaker Change: I would not make a prediction, but here's what I would say we will control what we can control.
Speaker Change: And from a feedstock optimization perspective, where procure procuring advantage feedstocks with low <unk> and then placing them as you would certainly expect us to and our highest margin markets possible. So won't pretend to say, we have a crystal ball in the future I think we will watch this closely but we feel very.
Speaker Change: Very good about our asset base and our execution.
Speaker Change: Thank you very much thanks very much.
Speaker Change: Youre welcome John Thank you.
Speaker Change: Thank you. Our next question comes from Theresa Chen with Barclays. Your line is open.
Speaker Change: Hi.
Theresa Chen: You talk about how much LPG export.
Speaker Change: <unk> within your system just off of your refining assets in the Gulf Coast, and maybe the West coast and following the S. D of the NGL infrastructure projects in Mpc's role in marketing those lpg's, what kind of economic uplift would you expect this to bring to MPC either in terms of.
Theresa Chen: Capture or EBITDA.
Speaker Change: Hi curious Rick. Thank you for the question. So when we look at our current footprint, what I'll do without giving you specific numbers.
Theresa Chen: Tell you that.
Theresa Chen: Our footprint and our ability to export once the Doc is fully commissioned and we're up and running will be significant we will attack global buyers and we will go to market and a diversified approach and what I mean by that is is we'll go term will go spot a percentage term or percentage.
Theresa Chen: As a percentage of <unk> b versus delivered and then from an EBITDA perspective.
Theresa Chen: We have a variety of ranges it depends on what the market is at that point in time, but we are bullish in this environment with the Chinese PTH units in the World Global worldwide demand I would say, we have a very optimistic view forward.
Theresa Chen: Got it.
Speaker Change: A quick follow up are you is MPC also marketing <unk> portion of the terminal facilities volumes coming out of the terminal facility or.
Speaker Change: Is it just MPLX is 50% interest.
Speaker Change: MPC has just marketing the 50% of the dock, one oak will be marketing their own barrels.
Speaker Change: Thank you.
Teresa: Thank you Theresa Thank you Teresa.
Speaker Change: Thank you our last question will come from Matthew Blair with Tudor Pickering Holt.
Speaker Change: Your line is open.
Speaker Change: Great. Thanks, Thank you for the questions and congrats on the strong results.
Speaker Change: Mentioned beckman product exports.
Speaker Change: And we are seeing things like industrial production improve in several Latin American countries with I guess the exception of Mexico. My question is could you contrast demand trends and in the U S versus your overseas market and if you have any sort of a split between gasoline and diesel that'd be helpful too.
Speaker Change: Thanks.
Speaker Change: Yeah, Matt So what I would tell you is where we're seeing significant demand signals as all things Latin America and Europe. Those are the biggest signals. We're seeing demand growth is more robust than we have seen in a while.
Speaker Change: Then when you look at where we are from a split perspective gas versus diesel I will tell you diesel has been pretty steady, but we are seeing a significant uplift in gas export demand.
Speaker Change: Okay.
Speaker Change: Sounds good and then.
Speaker Change: Turning back to the renewable diesel segment.
Speaker Change: 45 coming in.
Speaker Change: <unk> change anything in regards to your Rd, feedstocks and I guess in particular.
Speaker Change:
Speaker Change: Are you looking to run less vegetable oils going forward and do you run any imported yuko and if so would you scale that back going forward.
Speaker Change: So great question I would tell you so.
Speaker Change: What we're looking to do is maximize low ci stocks feedstocks and with that that plays right in to the 45 Z.
Speaker Change: What would be the most maximum feedstock, we can run and get credit for and applied towards the 45 Z. So I think that's the best way to share that Matt.
Speaker Change: Sounds good. Thank you, Matt It's Marianne just maybe one other comment if I if I could when we think about Martinez as well.
Speaker Change: As I mentioned earlier, we brought the asset to full nameplate capacity in the fourth quarter. That's 48000, a day you know we share that now with next day, one of the advantages of being at full nameplate is our ability to operate the PTU and you know part of the strategic rationale with our <unk>.
Speaker Change: Developing this long term relationship with next day in particular for Martinez will have to be able to optimize the feedstock and so we think that'll be a value driver as well into 2025 as we're now able to look at given the amount of volume that's in place, but to be able to look at where the.
Speaker Change: Those opportunities exist through the commercial lens. In addition to the incentives that are obviously still critical for profitability hope that hope that addresses your question Matt.
Speaker Change: It does thank you.
Speaker Change: Youre welcome.
Speaker Change: Alright with that thank you for your interest in Marathon Petroleum Corporation should you have more questions or want clarification on topics discussed. This morning, please contact us and our team will be available to take your calls thank you for joining us today.
Speaker Change: That concludes today's conference. Thank you for participating you may disconnect at this time.