Marathon Petroleum Corporation

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 touch-tone 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 2022 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 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's capital spending during the prepared remarks today reflect standalone MPC capital excluding MPLX. And with that, I'll turn it over to Mike.

Thanks, Christina. Good morning. Thank you for joining our call. First off, I want to recognize a new director on the MPC board. Toni Towns Whitley will be joining our board in March, bringing tremendous experience with her most recent executive position at Microsoft, as well as her board experience on the NASDAQ and PNC boards. I'd also like to recognize Christy Brees, who was appointed as a new independent director of MPLX in November, and who recently served as CFO for U.S. Steel. As we look back at 2022, we've delivered on our strategic commitments. Full-year cash provided by operating activities was just over $16 billion on a consolidated basis and over $13 billion excluding MPLX, reflecting our improving operating and commercial execution. Our commitment to safe and reliable operations resulted in refining utilization of 96% and our team's dynamic responses to volatile product markets delivered strong commercial performance, resulting in a 98% full-year capture. Our focus on fostering a low-cost culture enabled us to sustain our previously achieved $1.5 billion of structural cost reduction throughout the year. We formed a strategic partnership with Nestate. which will enhance the economics of our Martinez Renewable Fuels project and create a platform for additional collaboration within renewables. In midstream, our business grew 7% year over year. MPLX raised its distribution by 10%, and based on this level, we expect MPC will receive $2 billion of annual distributions. MPLX remains a source of durable earnings in the MPC portfolio, and as MPLX grows its free cash flow, we believe it will continue to have the capacity to increase its capital return to unit holders. In 2022, we returned nearly $12 billion through share repurchases, bringing the total repurchases to almost $17 billion since May of 2021. In addition, we increased MPC's dividend 30% to 75 cents per quarter. Executing on our operating, commercial, and financial objectives, combined with a strong macro environment led to total shareholder returns of 87% for MPC in 2022. Before Marianne goes through the results for the quarter, we wanted to share our outlook on the macro environment and the financial priorities for 2023. Our outlook remains bullish for 23, supported by the nearly 4 million barrels per day of refining capacity that has come offline globally in the last couple of years. Demand for transportation fuels we manufacture remains robust. We have seen recovery in demand across all our products since coming out of the pandemic, and we anticipate further recovery in 2023, particularly as we expect consumers to adjust consumption patterns to lower retail fuel prices. Uncertainties remain around the pace and impact of China's recovery, the magnitude of a potential U.S. or global recession, and the impact of Russian product sanctions. But despite these unknowns, we believe that the current supply constraints and growing demand will support strong refining margins in 23. Our financial priorities remain unchanged. These include, first, sustaining capital. We remain steadfast in our commitment to safely operating our assets, protect the health and safety of our employees, and support the communities in which we operate. Second, our dividend. We're committed to the dividend, which we increased 30 percent at the end of last year and intend to evaluate at least annually. And as we repurchase shares, the reduction in the share count increases the ability to support future dividend growth. Third, growth capital. We believe this is a return on and return of capital business. we've been through a progressive change over the last few years and remain focused on ensuring the competitiveness of our assets as we progress through the energy evolution. We will invest capital where we believe there are attractive returns. In traditional refining, we're focused on investments that enhance the competitiveness of our assets. In the low-carbon area, investment at this time is primarily associated with the completion of the Martinez Renewable Project as well as a project at our LA refinery that will improve energy efficiency and lower facility emissions. In addition, we're focused on growth opportunities and emerging technologies, as well as opportunities enabled by digital transformation. Beyond these three objectives, we're also returning excess capital through share repurchases to meaningfully lower our share count. In the period from early November through the end of January, we've completed nearly $2.4 billion of share repurchases. And today, we announced an incremental $5 billion share repurchase authorization, reinforcing our commitment to strong capital returns. Our goal is to be the investment of choice in the refining space, generating the most through cycle cash flow, creating value through strategic deployment of capital, and delivering superior returns to our shareholders. We also challenge ourselves to lead in sustainable energy by setting meaningful targets to reduce GHG emissions, methane emissions, and freshwater intensity, targets which we believe we can demonstrate a tangible path to accomplish. As we innovate for the future, phase one of our Martinez Renewable Fuels Facility is progressing startup activities, marking a significant milestone in our sustainable energy goals. The facility is on track to reach full phase one production capacity of 260 million gallons per year of renewable fuels by the end of the first quarter of 2023. Pretreatment capabilities are expected to come online in the second half of 2023, which will enable the facility to ramp up to its full expected capacity of 730 million gallons per year by the end of 2023. At Dickinson, we've optimized operations to be able to bring in more advantage feedstocks, lowering the carbon intensity of the fuels we produce. We've enhanced our position in the renewables value chain through our pretreatment facilities in Beatrice and Cincinnati. We'll continue to look for opportunities leveraging the strategic partnerships we're cultivating with Nestea and ADM. As evidence of our progress on our sustainability goals, This year, MTC was included in the Dow Jones Sustainability Index for North America for the fourth consecutive year. At this point, I'd like to turn the call over to Mary Ann.