Marathon Petroleum Corp Q1 FY2025 earnings call

• Refining: 89% utilization, second highest planned turnarounds in history in Gulf Coast; capture rate 104% in low margin environment. - Midstream: Adjusted EBITDA up 8% YOY; MPLX announced over $1 billion in strategic acquisitions including BANGL NGL pipeline, Whiptail Midstream gathering businesses, and doubling stake in Matterhorn Express pipeline. - Renewable Diesel: Addressed operational items, both renewable refineries positioned to run in Q2; focused on optimizing feedstocks and leveraging pretreatment capabilities. - Capital Plans: Progressing $1.25 billion standalone capital plan with 70% on high-return projects; projects include Robinson refinery jet production optimization, Galveston Bay refinery distillate hydrotreater, and L.A. refinery infrastructure improvements.

Refining: Refining utilization was 89%, with capture at 104% due to strong commercial performance. Midstream: Adjusted EBITDA grew 8% year-over-year, and MPLX announced over $1 billion of strategic acquisitions. Renewable Diesel: Facilities ran at 70% utilization in Q1 due to unplanned downtime, but actions taken to realize incremental 45Z credits starting Q2.

• Second quarter: Projected throughput volumes 2.8 million bbl/day (94% utilization); turnaround expense $265 million, activity in Mid-Con and West Coast. - Full year: Turnaround expenses expected similar to last year ($1.4 billion); operating costs projected at $5.30 per barrel; distribution costs ~$1.5 billion; corporate costs ~$220 million.

• Commodity market volatility. - Regulatory uncertainty impacting refining margins. - Inventory builds and working capital changes affecting cash position. - Potential impact of Canadian producer maintenance and OPEC+ production on light-heavy differentials.

Q: Neil Mehta from Goldman Sachs asks about real-time demand in Q2 and economic slowdown evidence.

A: Maryann Mannen and Rick Hessling respond that refined cracks improved, utilization up, inventories low, and steady demand in gas, diesel, jet fuel across domestic and export markets.

Q: Doug Leggate from Wolfe Research asks about capture rate sustainability.

A: Maryann Mannen and Rick Hessling state that commercial organization and value chain integration support capture rates approaching 100% and are structurally sustainable.

Q: Manav Gupta from UBS asks about midstream acquisitions and distribution growth.

A: Maryann Mannen and John Quaid explain that MPLX's acquisitions are accretive, mid-single digit growth expected, and distribution increase sustainable due to project growth and earnings durability.

Q: Paul Cheng from Scotiabank asks about renewable diesel outages and initiatives.

A: John Quaid discusses focusing on controllable factors, optimizing feedstocks, and leveraging pretreatment capabilities in the renewable diesel business.

Q: Jason Gabelman from TD Cowen asks about midstream deal appetite.

A: Maryann Mannen states that midstream deals will be evaluated through strict capital discipline to ensure mid-teens returns and support mid-single digit growth.