Acquisition of BP’s Texas City Refinery and
Related Logistics and Marketing Assets
October 8, 2012
Forward-Looking Statements
This presentation contains forward-looking statements within the meaning of the federal securities laws. These forwardlooking statements relate to, among other things, MPC’s current expectations, estimates and projections concerning MPC’s
business and operations and the business and operations proposed to be acquired from BP, which we refer to as the BP Texas
City assets. You can identify forward-looking statements by words such as “anticipate,” “believe,” “estimate,” “expect,”
“forecast,” “project,” “could,” “may,” “should,” “would,” “will” or other similar expressions that convey the uncertainty of
future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to
risks, uncertainties and other factors, some of which are beyond the company’s control and are difficult to predict. Factors
that could cause actual results to differ materially from those in the forward-looking statements include: our ability to
successfully complete the acquisition of the BP Texas City assets, including, without limitation, the receipt of regulatory
approvals and the satisfaction of other customary closing conditions; our ability to successfully integrate the BP Texas City
assets into our operations; our ability to achieve fully the strategic and financial objectives related to the proposed acquisition
of the BP Texas City assets, including the acquisition being accretive to our earnings; and unexpected costs or liabilities that
may arise from the acquisition ownership, or operation of, the BP Texas City assets; volatility in and/or degradation of market
and industry conditions; the availability and pricing of crude oil and other feedstocks; slower growth in domestic and
Canadian crude supply; completion of pipeline capacity to areas outside the U.S. Midwest; consumer demand for refined
products; changes in governmental regulations; transportation logistics; the availability of materials and labor, delays in
obtaining necessary third-party approvals, and other risks customary to construction projects; the reliability of processing
units and other equipment; our ability to successfully implement growth opportunities and the integration of acquired assets;
other risk factors inherent to our industry; and the factors set forth under the heading “Risk Factors” in MPC’s Annual Report
on Form 10-K for the year ended December 31, 2011 filed with the SEC. In addition, the forward-looking statements included
herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown
factors not discussed here or in MPC’s Form 10-K could also have material adverse effects on forward-looking statements.
Copies of MPC’s Form 10-K are available on the SEC website, at http://www.ir.marathonpetroleum.com or by contacting
MPC’s Investor Relations Office.
2
Transaction Overview
 451 MBPCD (475 MBPSD) high complexity refinery, Nelson Complexity Index of 15.3
 1,040 megawatt cogeneration (cogen) facility
 Supplies power and steam to the refinery
 Surplus power sold into grid
 More than 100 miles of NGL pipelines consisting of 3 intrastate systems originating
at the refinery
 Four light product terminals
 Branded contract assignments representing ~1,200 locations with volume of ~64 MBPD
3
Transaction Highlights
 Supports MPC strategy to grow in existing and contiguous markets and expand
integrated model
 One of the largest and most complex refineries in the U.S.
 Well connected to crude and products markets, including exports
 Attractive base cash purchase price of $598 million. Equates to estimated net cash
refining asset purchase price of $21 per complexity BBL, $328 per capacity BBL.
 Potential $700 million earnout over six year period
 Expected to be immediately accretive to earnings
 Incremental EBITDA of $700 million to $1.2 billion based on historical pricing
 Accretive to earnings per share by 13% to 27% based on historical pricing
 Potential significant economic upside from synergies and process optimization
 Expected to close in early 2013, subject to regulatory review and customary closing
conditions
 Expected to be financed with cash on hand
 Continue to balance return of capital to shareholders while capturing incremental value
through investments in the business
4
Diversification and Balance in MPC’s Refining Network
Canton, OH
Catlettsburg, KY
Detroit, MI
Robinson, IL
BP Texas City, TX
MPC Texas City, TX
Garyville, LA
Total
78,000
233,000
106,000
206,000
451,000
80,000
490,000
Midwest Capacity
623,000 BPCD
1,644,000
Texas Capacity
531,000 BPCD
Louisiana Capacity
490,000 BPCD
Note: BPCD = Barrels Per Calendar Day
5
Access To Advantaged Crude Supply
 Access to growing WTI, Canadian and Bakken
crudes
Bakken /
Canadian






Seaway Reversal 2012
Seaway Expansion 2013
Longhorn 2013
Gulf Coast Access 2014
BridgeTex 2014
Keystone XL 2015
 Close proximity to Eagle Ford
 Opportunity to optimize crude logistics across
MPC’s three USGC refineries
WTI
Garyville
Eagle Ford
Texas City
6
Product Logistics Opportunities
 Flexible product placement
 Domestic and export
opportunities
Southeast
Midwest
 Synergies with MPC’s Texas
City and Garyville refineries
and MPC logistics
Pasadena
Zachary
Garyville
Texas City
Exports to
Mexico/SA/Europe
Florida
7
7
Logistics Assets
 Light product terminals
 Nashville, TN
 Charlotte, NC
 Selma, NC
 Jacksonville, FL
 Three intrastate NGL pipelines
 Colonial Pipeline space
 50 MBPD gasoline shipper
history
Refinery and Cogen
Light Product Terminals
Intrastate NGL Pipelines
Plantation Pipeline
Colonial Pipeline
Primary Retail Assignment Region
8
Marketing Assets and Integration
 Integrated acquisition includes
 Assignment of branded-jobber contracts
representing ~1,200 BP retail sites
 ~64 MBPD of gasoline sales
 Locations primarily in FL, MS, TN and AL
 BP trademark to be used during transition
process
 Strategic step in retail growth
 Nearly doubles Marathon’s branded site
count in Southeast
 Complementary to recent regional growth
 Partnership opportunity with premier
Southeast jobbers
 Opportunity to expand relationship with
existing Marathon jobbers
9
World Scale and Highly Complex Refinery
20
BP
Texas
City
Nelson Complexity Index
15
MPC
Garyville
10
5
0
0
100
200
300
400
500
600
700
Crude Capacity (MBCD)
US Refineries. Source: Oil & Gas Journal Dec 2011
10
Texas City Refinery Assets
 451,000 BPCD (475,000 BPSD) refinery
consisting of:
 233,000 BPCD heavy-sour crude unit
 218,000 BPCD medium-sour crude unit
 Bottoms upgrading
 63,000 BPCD resid hydrocracker
 29,700 BPCD coking
 Nelson Complexity Index: 15.3
 Substantial onsite storage capacity along with
marine distribution capability
 Significant recent investments by BP
 Advantageous petrochemical configuration
 1,040 megawatt cogen facility
 Excellent crude optionality including access to Canadian, Eagle Ford and mid-continent crudes
 Significant product logistics optionality
11
Projected Synergies and Capital Investments
(Millions)
Projected Synergy Capital Investments
Projected Incremental Synergies EBITDA
$160
$160
$120
$120
$80
$80
$40
$40
$0
$0
2013E 2014E 2015E 2016E 2017E+
2013E
2014E
2015E
2016E
EBITDA Synergies of ~$440 MM thru
Total Synergy Investments of ~$170MM
2017, ~$130 MM annually thereafter
 Dock upgrades
 Feedstock optimization
 Storage tank additions and connectivity
 Florida and export optimization
 Refinery processing opportunities
12
Projected Sustaining Capital Investments*
(Millions)
$500
$400
$300
$200
$100
$0
2013E
2014E
2015E
Refinery
2016E
2017E
2018E
2019E
All Other
* Excludes synergy and other value accretive investments
13
Cash Purchase Price Excluding Earnout
Base cash purchase price (millions)
$
598
Less: Cogen facility
(290)
Less: Terminals and other logistics assets
(120)
Less: Retail marketing
Estimated Net Refining Asset Price
(40)
$
148
(Excludes ~$1,200 MM initial inventory purchase)
EBITDA Multiple*
0.5x - 0.9x
Capacity (MBPCD)
451
Nelson Complexity Index
15.3
Estimated Price per Capacity Bbl
$
328
Estimated Price per Complexity Bbl
$
21
*See slide 16 for EBITDA
14
Indicative Purchase Price Comparison
TSO-Carson (8/2012)
$16
MPC-BP Texas City without earnout
$21
Alon-Bakersfield (6/2010)
$66
PBF- Del City (6/2010)
$109
Delta-Trainer (4/2012)
$122
$123
MPC-BP Texas City with earnout*
PBF-Paulsboro (12/2010)
$151
VLO-Meraux (10/2011)
$218
VLO-Pembroke (3/2011)
$241
$290
PBF-Toledo (12/2010) without earnout
PBF-Toledo (12/2010) with earnout**
$381
$0
$100
$200
$300
$400
Price per refinery complexity barrel
*MPC-BP Texas City is based on a $148MM net refinery purchase price and full $700MM earnout. See appendix for calculation
**PBF-Toledo is based on a $400MM net refinery purchase price and $125 MM earnout
Source: MPC calculations based on transaction announcements and OGJ data (barrels per calendar day)
15
Expected Accretive Transaction
(MM unless otherwise indicated)
MPC Base EBITDA - analyst 2013 consensus estimates(1)
Assets to be acquired EBITDA using 2006-2010 pricing(2)(4)
Assets to be acquired EBITDA using 2011 pricing(2)(5)
Total EBITDA
$
$
Improvement
MPC Base Net Income - analyst 2013 consensus estimates
Assets to be acquired Net Income using 2006-2010 pricing(2)(4)
Assets to be acquired Net Income using 2011 pricing(2)(5)
Total Net Income
4,759
1,200
5,959
$
4,759
$
700
5,459
25%
$
$
MPC Base EPS(3)
MPC + Assets to be acquired EPS(3)
Accretion
2,425
650
3,075
$7.11
$9.02
27%
15%
$
2,425
$
325
2,750
$7.11
$8.06
13%
Consensus estimates as of October 4, 2012
Based on MPC 2013 operating estimates and applicable historical price information
(3) Assumes 341 million shares outstanding
(4) Argus Sour Crude Price Index (ASCI) 3-2-1 crack spread of $15.10 used as pricing metric for 2006-2010
(5) ASCI crack spread of $11.57 used as pricing metric for 2011
(1)
(2)
16
Earnout Provision Summary
 Term: 6 years
 Overall earnout cap: $700 million
 Earnout margin:
(actual crude volume plus 50% feedstock volume processed) x (ASCI 3-2-1 crack)
 Margin sharing 50/50 above the earnout margin threshold up to annual cap
Year
Earnout Margin Threshold (MM)
Annual Cap (MM)
1
$1775
$200
2
$1775
$200
3
$1775
$200
4
$1650
$250
5
$1650
$250
6
$1650
$250
17
Transaction Complements MPC’s Integrated System
Refinery






451,000 BPCD (475,000 BPSD) refinery
Nelson Complexity Index: 15.3
Significant recent investments
Excellent crude optionality
Substantial products logistics opportunities
Advantageous petrochemical configuration
Cogen Facility
 1040 megawatts of electrical capacity and 4.6 million
lbs/hr steam
 Supplies power and steam to the refinery
Light Product Terminals




Nashville, TN
Charlotte, NC
Selma, NC
Jacksonville, FL
Pipelines
 More than 100 miles of NGL pipelines consisting of
three intrastate systems originating at the refinery
 50 MBPD gasoline shipper history on Colonial Pipeline
Refinery and
Cogen
Refinery
Light Product
Terminals
MPC Operations
Terminal
Inland Water
Terminal
Primary Retail
Assignment Region
Coastal Water
Terminal
Connecting
Pipelines
Retail Assignments
 ~64 MBPD of BP brand gasoline contracts
 ~1,200 locations
18
Appendix
19
Cash Purchase Price Including Full Earnout
Base cash purchase price (millions)
Full earnout
Total purchase price with full earnout
$
$
Less: Cogen facility
Less: Terminals and other logistics assets
(290)
(120)
Less: Retail marketing
Estimated Net Refining Asset Price
598
700
1,298
(40)
$
848
(Excludes ~$1,200 MM initial inventory purchase)
EBITDA multiple*
Capacity (MBPCD)
Nelson Complexity Index
1.1x - 1.9x
451
15.3
Estimated Price per Capacity Bbl
$
1,880
Estimated Price per Complexity Bbl
$
123
*See slide 16 for EBITDA
20