Marathon Petroleum Corporation

Welcome to the MPC fourth quarter 2021 earnings call. My name is Sheila and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Press star 1 on your touchtone phone to enter the queue. Please note that this conference is being recorded. I will now turn the call over to Christina Kazarian. Christina, you may begin.

Welcome to Marathon Petroleum Corporation's fourth quarter 2021 earnings conference call. The slides that accompany this call can be found on our website at marathonpetroleum.com under the Investors tab. Joining me today on the call are Mike Hennigan, CEO, Marianne Manin, CFO, and other members of the executive team. 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. References to MPC capital spending... during the prepared remarks today reflect standalone MPC capital, excluding MPLX. And with that, I'll turn the call over to Mike.

Thanks, Christina. Good morning, and thanks for joining our call. Before we get into our results for the quarter, I wanted to provide a brief update on the macro environment. During the fourth quarter, despite the widespread surge in Omicron variant cases, gasoline demand held up well, and on diesel we're seeing highway trucking volumes continuing to meet, or exceed seasonal records. While jet demand reached post-pandemic highs in the fourth quarter, it's still roughly 15% below 2019 levels as business travel remains suppressed, but we expect to see recovery in that this year as well. When we spoke with you in November, we were cautious about rising COVID cases this winter and the potential impact. Based on the trends over the last few months, we've become less concerned about the pace of recovery in transportation fuels demand. Light product inventories remain tight, and U.S. demand continues to recover, we believe that refining margins will be well positioned for 2022. On the aspects of the business that are within our control, this quarter we made continued progress on our priorities. Since our last earnings call at the beginning of November, we've repurchased approximately $3 billion of shares. That puts us at approximately 55 percent complete on our initial $10 billion share repurchase program. Further reinforcing our commitment to return capital to shareholders, we obtained board approval for an additional $5 billion in share repurchase authorization. This brings our total outstanding authorization to approximately $9.5 billion. Today, we announced our 2022 capital spending outlook. We expect MPC will have approximately $1.7 billion in capital expenditures with approximately 50 percent of the $1.3 billion growth capital for our Martinez Refinery conversion. Total cost for the Martinez Refinery conversion is estimated at $1.2 billion. Approximately $300 million has been spent to date, $700 million for 2022, and $200 million for 2023. This competitive capital cost is driven by the fact that Martinez's assets are conducive to retrofit, and we can leverage existing infrastructure and logistics. At Martinez, the project reached another milestone as the 60-day comment period for the environmental impact report concluded on December 17th of 2021. We remain committed to progressing the conversion to a renewable fuel facility. Engineering is complete, and we're ready to begin construction. Our plan is to have the first phase start up in the second half of 22. We've already sourced some advantage feedstocks for the Martinez facility and are engaged in negotiations with multiple parties for the balance. Our strategy is multifaceted, including long-term arrangements, joint ventures and alliances, all of which are common in the space. A recent example of our success would be our joint venture with ADM. We're also leveraging existing capabilities that are currently supporting Dickinson to optimize between the two facilities. we remain confident in our progress and ability to secure feedstocks for Martinez. On Kenai, we have been working a sales process since we last communicated. We'll look back to you when we have additional details that we can share. In 2021, we progressed all three of our strategic initiatives, and slide four highlights this execution. Under portfolio, we completed the Speedway sale, receiving $17.2 billion of proceeds from that transaction, and securing the 15-year fuel supply agreement with 7-Eleven. Our Dickinson renewable diesel facility started up, reached capacity, and we've been successfully optimizing the operation. We made two strategic decisions to idle our Gallup refinery and to convert Martinez to a renewable fuel facility. And this year, MPLX produced exceptionally strong cash flow, which provided $2.2 billion of contributions to MPC. As we look at cost reduction, what began as a $1.5 billion cost reduction initiative is being embraced by the organization and now a low-cost culture is becoming embedded in how we conduct our business. Finally, on commercial, while I've been reluctant to share too much, I wanted to highlight a few items that have commercial significance in our portfolio. In March of 2021, we started up the Beatrice Pretreatment Facility, which processes about 3,000 barrels a day of advantage feedstock for the Dickinson Renewable Diesel Plant. In December, we closed on a joint venture with ADN, which will provide approximately 5,000 barrels a day of logistically advantage feedstock for Dickinson when the new Soybean Crush Plant comes online in 2023. And in January this year, we successfully started up our Cincinnati Pretreatment Facility, which will process about 2,000 barrels per day for our Dickinson renewable diesel plant. We converted this facility from its original configuration as a biodiesel plant. Our team's execution on these three strategic priorities builds a foundation for continued value creation, and we look forward to sharing updates each quarter as we continue to advance these initiatives. Shifting to slide five, we remain focused on challenging ourselves to leading in sustainable energy. We have three company-wide targets on GHG, methane, and freshwater intensity that many of our investors and stakeholders know well. In the coming weeks, we look forward to providing an update on our progress against these targets and some of our accomplishments in 2021. At this point, I'd like to turn the call over to Mary Ann to review the fourth quarter results.