Marathon Petroleum Corporation

Welcome to the MPC First Quarter 2020 Earnings Call. My name is Jacqueline, and I will be your operator for today's call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. Press star 1 on your touch-tone phone to enter into the queue. Please note that this conference is being recorded. I would now like to turn the call over to Christina Kazarian. Christina, you may begin.

Good morning and welcome to Marathon Petroleum Corporation's first quarter 2020 earnings conference call. The slides that accompany this call can be found on our website at marathonpetroleum.com under the investors tab. Joining me on the call today are Mike Hennigan, CEO, Don Templin, CFO, and other members of the executive team. We also 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 SEC filings. With that, I'll turn the call over to Mike.

Thanks, Christina. Good morning, everyone, and thank you for joining our call today. As everyone is aware, the global pandemic became the focus in the quarter, and that continues today with our immediate priority on safely operating our assets to supply products to the market protecting the health and safety of our employees and customers, and supporting the communities in which we operate. The actions taken to prevent the spread of the virus have significantly reduced global economic activity and demand for our products, specifically towards the last month of the quarter. Our refining operating areas have been particularly hard hit in the Upper Midwest and on the West Coast. At the same time, our midstream and retail businesses reported strong results, which offset some of the financial impact of lower refining demand and margins. As a result of this difficult situation, we're responding with prudent tactical changes in our business. First, reducing our total capital spend by $1.4 billion, or approximately 30%, to $3 billion for 2020. This includes approximately $700 million at MPC and $700 million at MPLX. This reduction is planned across all segments of the business with the remaining growth capital spend primarily related to projects that are in progress or nearing completion. Second, we have reduced our planned operating expenses by approximately $950 million, primarily through reductions of fixed costs and deferring certain expense projects. This includes $750 million of operating expense reductions at MPC, and $200 million of operating expense reductions at MPLX. Third, we have taken steps to maintain our financial flexibility. We've secured $3.5 billion of additional liquidity, including a new $1 billion 364-day revolver and issued $2.5 billion of senior notes. After taking these actions, we have approximately $6.8 billion of undrawn availability on our credit facilities. These actions strengthen our liquidity and also strengthen the through-cycle earnings power of our business. At this point, I'd like to turn it over to Don to review the first quarter results in more detail, then I'll come back and share my early focus areas as we start to implement changes at MPC going forward.