MPLX LP

Welcome to the MPC Second Quarter 2023 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 second quarter 2023 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, 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 during the call today. Actual results may differ. Factors that could cause actual results to differ are included there, as well as our filings with the SEC. And with that, I'll turn the call over to Mike.

Thanks, Christina. Good morning, everyone. Beginning with our views on the macro environment, refining margins continued strong in the second quarter. Despite crack spreads incentivizing high refining utilization, product inventory levels remain low. Global capacity additions continue to progress slower than anticipated, and we believe that global demand growth will remain strong. In the second half of the year, the refining outlook remains healthy. We expect year-over-year U.S. late product demand to grow consistent with what we saw in the first half of the year, supported by lower energy prices and recovering air travel. This demand strength plus tight inventories and receding economic headwinds are expected to continue to support elevated margins. And as we completed nearly four quarters of elevated turnaround activity early in the second quarter, we're expecting an increase in industry plan maintenance work by our peers in almost every region in which we operate. Overall, we believe an enhanced mid-cycle environment will continue in the U.S. due to relative advantages over international sources of supply, including energy costs, feedstock acquisition costs, and refinery complexity. Now, turning to our results, In the second quarter, we delivered strong results across our business. In refining and marketing, strong margins, cost discipline, and sound commercial performance led to segment-adjusted EBITDA of nearly $3.2 billion. Our midstream segment delivered durable and growing earnings. This quarter, it generated segment-adjusted EBITDA of $1.5 billion, which is up 5% year over year. MPLX remains a strategic part of MPC's portfolio as it anticipates growing its cash flows and increasing distributions to unit holders. MPLX's distribution to MPC was $502 million this quarter, an annualized rate of over $2 billion, which fully covers MPC's current dividend and half of our planned 2023 capital program, not including MPLX. During the second quarter, we progressed key projects such as completing the STAR project at the Galveston Bay Refinery. The competitive position of our Galveston Bay Refinery is enhanced by the increased residual fuel and heavy crude processing as well as distal recovery. We're well positioned with two premier 600,000 barrel per day refineries on the U.S. Gulf Coast with significant logistics and export capacity to support our global commercial strategy. At the Martinez Renewable Fuels Facility, construction activities are progressing. Pretreatment capabilities are starting to come online in the second half of 2023, and the facility is expected to be capable of producing its full capacity of 730 million gallons per year by the end of 2023. At that point, Martinez will be among the largest, most competitive renewable diesel facilities with a competitive operating profile, robust logistics flexibility, an advantage feedstock slate, and a strategic relationship with Neste. On capital allocation, in the second quarter, we returned nearly $3.4 billion to MPC shareholders via dividends and share repurchases. And from May 2021 through the end of July, we have repurchased 264 million shares, or approximately 40 percent of the shares outstanding. Moving to our sustainability efforts, in July, we published our 12th annual sustainability report and our seventh annual perspectives on climate scenarios report. Our perspectives on climate-related scenarios, which aligns with TCFD standards, provides insights into how we see the energy landscape, our thoughts on climate-related risks and opportunities, the resources we put towards addressing them, and the results that we've achieved. Our sustainability report shows continued progress on goals that we have set for ourselves, our efforts to strengthen the resiliency of our operations, and to innovate for the future. At this point, I'd like to turn the call over to Mary Ann.