Marathon Petroleum Corporation

Welcome to the MPC first quarter 2024 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 first 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 Mike Hennigan, CEO, Marianne Manin, President, John Quaid, 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 the actual results to differ are included there as well as in our filings with the SEC. With that, I'll turn the call over to Mike.

Thanks, Christina. Good morning, and thank you for joining our call. Effective March 1, two new independent directors joined the MPC board. Eileen Drake and Kimberly Ellison Taylor have strong records of accomplishment in complex industries, making them outstanding additions, and we're happy to have them join our board. As for the macro refining environment, we remain constructive in our view. Oil demand is at a record high globally, And we expect oil demand to continue to set records into the foreseeable future. Forecasted outlooks for this year estimate 1.2 to 2 million barrels per day of incremental demand over 2023, primarily driven by the growing need for transportation fuels. Within our own domestic and export business, we are seeing steady demand year over year for gasoline and growth for diesel and jet fuel. And we continue to believe that 2024 will be another year of record refined product consumption. Global supply remains constrained. Anticipated capacity additions have progressed more slowly than expected. And longer term, the level of announced capacity additions remains limited for the rest of the decade. In the first quarter, high global turnaround activity The transition to summer gasoline blends and light product inventories supported refining fundamentals, especially towards the end of the quarter. As we look forward, we believe these fundamentals will support an enhanced mid-cycle environment for the refining industry. We believe the U.S. refining industry will remain structurally advantaged over the rest of the world. Our system has a locational advantage given the access accessibility of nearby crude, which we believe will grow as cost of transportation increases. The availability of low-cost natural gas, low-cost butane, and our refining systems complexity all increase our competitive advantage over the international sources of supply. Even with this outlook, we remain focused on capital discipline while investing to grow earnings at strong returns. In the first quarter, we invested over $1.3 billion in capital expenditures, investments, and acquisitions comprised of attractive refining projects and midstream investments, including MPLX's $625 million strategic acquisition in the Utica Basin. In refining, we are investing predominantly at our large, competitively advantaged facilities to enhance shareholder value and position MPC well into the future. With a focus on safety and asset reliability, we successfully completed the largest amount of planned maintenance work in MPC's history. Four of our largest and most profitable refineries were in turnaround during the quarter, limiting our financial performance. These assets were in turnaround during a period of lower demand, and now we're ready to meet the increased consumption that comes with the summer driving season. In midstream, MPLX continues to execute on attractive growth opportunities. The Harmon Creek 2 gas processing plant was placed into service in late February, bringing MPLX's Marcellus processing capacity to 6.5 billion cubic feet per day. And in the Permian Basin, Preakness 2 is approaching startup and expected to be online by the end of May. We're also building our seventh gas processing plant in the basin, Secretariat, which is expected to be online in the second half of 2025. Once operational, our total processing capacity in the Delaware Basin will be approximately 1.4 billion cubic feet per day, which would average to a pace of roughly one new plant per year since 2018. Additionally, MPLX announced two strategic transactions, First, in the Utica, MPLX enhanced its footprint through the acquisition of additional ownership interest in an existing joint venture and a dry gas gathering system. We have already seen growth in the rich gas window of the Utica, and we see new producers moving into the region. Second, MPLX entered into a definitive agreement to combine the Whistler Pipeline and Rio Bravo Pipeline projects into a newly formed joint venture. The platform expands MPLX's natural gas value chain and positions MPLX for future growth opportunities. MPLX is strategic to MPC's portfolio. Its current $2.2 billion annualized cash distribution, MPC, fully covers MPC's dividend and more than half of our planned 2024 capital program. We expect MPLX to continue to increase its cash distributions as it pursues growth opportunities, further enhancing the value of this strategic relationship. Our overall capital allocation framework remains consistent. We will invest in sustaining our asset base while paying a secure, competitive, and growing dividend, and we intend to grow the company's earnings while exercising strict capital discipline. Beyond these three priorities, we are committed to returning excess capital through share repurchases to meaningfully lower our share count. Demonstrating this commitment, today we announced an additional $5 billion share repurchase authorization. Our total capital return through share repurchases and dividends since May of 2021 now totals $35 billion, with MPC share count reduced by nearly 50 percent. Let me take a second to share our view on value. We continue to believe share repurchases make sense at the current share price level. When we purchase MPC stock, we are buying into a premier, highly-advantaged refining system. We're also buying into a growing midstream business via our ownership at MPLX. And finally, we are buying strong business execution, disciplined investment, and a commitment to capital returns, which will continue to position MPC as an excellent investment. At this point, I'd like to turn the call over to Mary Ann. Thank you, Mike.