Marathon Petroleum Corporation

quarter 2025 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 Marianne Manin, CEO, 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 actual results to differ are are included there as well as in our SEC filings. With that, I will turn the call over to Mary Ann. Thanks, Christina, and good morning, everyone.

Our second quarter results reflect actions we have taken to create exceptional value. We delivered 97% utilization, achieving record rates at several refineries throughout the quarter. And we leveraged our fully integrated value chains across the West Coast, Gulf Coast, and MidCon to deliver 105 percent margin capture. Current fundamentals, especially strong diesel demand coupled with tight inventory levels, remain supportive of strong margins. U.S. gasoline inventories are in line with five-year averages, and diesel inventories are at historically low levels. As anticipated, sequentially, we saw steady growth across gasoline, diesel, and jets. Our system was ready to run. Higher OPEC Plus production and more Canadian supply should lead to crude differentials widening later this year. Our longer-term fundamental view supports 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. We expect the U.S. refining industry will remain structurally advantaged over the rest of the world. The flexibility of our refining assets and our domestic and international logistical and commercial capabilities further increase our global competitive advantage. We are steadfast in our commitment to safely operate our assets and protect the health and safety of our employees. We continue to advance our operational and commercial capabilities to enhance competitiveness, deliver incremental value, and achieve peer-leading profitability in each region in which we operate. In the first half of 2025, our midstream business delivered 5% year-over-year segment-adjusted EBITDA growth. MPLX is well positioned to support the development plans of its producer customers especially as demand increases for natural gas-powered electricity and LNG exports. And with the development of its Gulf Coast fractionation facilities, MPLX is positioned to supply growing global demand for NGLs. MPLX's financial flexibility, its producer-customer relationships, and strategic roadmap for growth all place it in an excellent position to continue to significantly grow its distributions, further enhancing the value of its strategic relationship with MPC. Given our highly advantaged refining and marketing business and the $2.5 billion annualized distribution from MPLX, we believe Marathon can lead industry in capital returns through all parts of the cycle. We announced two transactions to further our portfolio optimization for today and the future. First, MPC's $425 million divestiture of its partial interest in ethanol production facilities. As the partner's strategic goals evolved and diverged, an opportunity came for MPC to exit the partnership. We were able to monetize our interest at a very compelling multiple. We were the largest blender of ethanol before, and we are the largest blender after the sale. There will be no commercial impacts from the sale. Second, MPLX announced the strategic acquisition of Northwind Midstream for under $2.4 billion. Northwind provides sour gas gathering and treating services in the highly prolific Delaware Basin. Increased crew drilling activity in the eastern edge of the northern Delaware Basin has been enabled by increased sour gas treating and AGL well capacity provided by these assets. The assets will provide prompt treatment solutions for existing and new producer customers. Our fee structure comprises gathering, compression, processing, as well as more extensive CO2 and H2S treating. The higher levels of CO2 and H2S warrant a higher fee structure compared to other regions. On average, this gets to an aggregated rate significantly above other regions. These assets are complementary and adjacent to our existing Delaware Basin natural gas system and will expand MPLX's treating and blending operations. The addition of 200,000 dedicated acres will increase MPLX's access to natural gas and NGL volumes. The optionality to direct these new volumes through our integrated system will accelerate our growth opportunities in the Permian. The transaction is expected to be immediately accretive to MPLX's distributable cash flow and represents a seven times multiple on forecasted 27 EBITDA after the treating system reaches full capacity. MPLX's execution of its wellhead to water growth strategy and the ability to accelerate growth opportunities in the Permian extends the duration of its anticipated mid-single-digit EBITDA growth. We believe execution of our strategic commitments including portfolio optimization, will position our integrated system to deliver industry-leading capital returns and offer a compelling value proposition for our shareholders. Now, I'll hand it over to John to discuss our financial performance.

Thanks, Marianne. Moving to second quarter highlights, slide five provides a summary of our financial results. This morning, we reported second quarter net income of $3.96 per share. And during the quarter, we returned approximately $1 billion to shareholders through dividends and repurchases. Slide 6 shows the sequential change in adjusted EBITDA from first quarter to second quarter 2025 and the reconciliation between adjusted EBITDA and our net results for the quarter. Adjusted EBITDA for the quarter was approximately $3.3 billion. higher sequentially by $1.3 billion, primarily due to increased results in our refining and marketing segment. Moving to our R&M second quarter segment results on slide seven, our refineries ran at 97% utilization, processing 2.9 million barrels of crude per day. R&M segment adjusted EBITDA was $6.79 per barrel, reflecting strong operational and commercial performance. Turning to slide eight, second quarter capture of 105% was driven by our strategic execution to grow our product channels and favorable secondary product pricing relative to gasoline. Leveraging our integrated value chain, we achieved strong profitable growth through our product sales channels, including brand, wholesale, and export sales. 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. We are also making investments in our refining and marketing segment targeted on growing our margins. The multi-year projects at our Robinson and Galveston Bay refineries increase our ability to produce higher value products and the execution of smaller high return quick hit projects drive incremental yield and performance improvements. Slide nine shows our midstream segment performance for the quarter. Our midstream segment continues to deliver cash flow growth with year to date segment adjusted EBITDA increasing 5% over last year. In the second quarter of 2025, MPC received distributions of $619 million from MPLX, a 12.5% increase compared to the $550 million received in the second quarter of last year. MPLX remains a source of durable growth as it progresses its mid-single-digit adjusted EBITDA growth strategy. Slide 10 shows our renewable diesel segment performance for the quarter. Our renewable diesel facilities operated at 76% for the quarter, which included a planned full plant turnaround at our Dickinson facility. Margins improved as we realized incremental 45Z production tax credits in the second quarter, and we will continue to focus on optimizing our renewable facilities, leveraging logistics, and our pretreatment capabilities. Slide 11 presents the elements of change in our consolidated cash position for the second quarter. Operating cash flow excluding changes in working capital was $2.6 billion for the quarter. Working capital was a $34 million source of cash for the quarter. Inventory drawdowns to normal operating levels were a source of cash, but they were offset by higher product receivables from increased sales volumes. Second quarter capital expenditures, investments, and acquisitions were just over $1 billion, approximately $350 million for MPC on a standalone basis, and almost $700 million for MPLX. In the quarter, MPC repaid $1.25 billion in senior notes, which matured in May, and MPLX redeemed $1.2 billion of senior notes, which were scheduled to mature in June. At the end of the quarter, MPC had cash of nearly $300 million and MPLX cash of approximately $1.4 billion. We manage our balance sheet to an investment grade credit profile. Supported by the $2.5 billion in growing annual distribution from MPLX, our strong balance sheet provides us the financial flexibility to execute our strategy. Turning to guidance on slide 12, we provide our third quarter outlook. We are projecting crude throughput volumes of 2.7 million barrels per day, representing utilization of 92%. Turnaround expense is projected to be approximately $400 million in the quarter, with activity mainly focused in the Mid-Con and West Coast regions. For the full year, turnaround expenses are expected to be similar to last year at around $1.4 billion. Operating costs are projected to be $5.70 per barrel. Distribution costs are expected to be $1.5 billion. And corporate costs are expected to be $240 million. That, let me pass it back to Mary Ann.