Marathon Petroleum (MPC) 1 Aug 232023 Q2 Earnings call transcript

Welcome to the MPC Second Quarter 2023 Earnings Call. My name is Sheila and I will be your operator for today’s call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Kristina Kazarian. Kristina, you may begin.

Corporation’s XXXX Petroleum conference Marathon to second earnings quarter call. Welcome can that the on accompany slides be Investors this under The marathonpetroleum.com call found at our tab. website

Mannen, are me team. executive Hennigan, Joining call other today the CEO; of on Maryann CFO the and members Mike

to We X. invite statements Slide the read you Harbor Safe on

filings that statements there results actual to are included We forward-looking call Actual cause during will be SEC. results could today. well with as our as the making may the differ. Factors differ

will call the I Mike. to that, with And turn over

Thanks, morning, growth anticipated macro Global crack low. product Good we and remain second strong everyone. Kristina. utilization, views Beginning global remain than strong. Despite on environment, in capacity believe that with additions the spreads quarter. will continued refining levels our incentivizing continue high refining demand to margins inventory slower the progress

the remains outlook the half healthy. of In the year, refining second

year-over-year We are and strength And U.S. believe the inventories in we industry refinery an second an we acquisition nearly product continue with enhanced in every grow to costs almost complexity. to saw costs, supply, feedstock early environment by advantages receding due post by are expect elevated of our energy we elevated including support in relative sources Overall, increase of we supported and to four we of to as mid-cycle planned continue expecting activity the U.S. what quarter, headwinds in peers work over completed which This the energy in maintenance economic region demand late year operate. international will and in air turnaround travel. lower half consistent first expected tight demand margins. the quarters recovering prices

discipline our $X.X quarter, business. EBITDA sound strong nearly to adjusted of and In across cost commercial billion. Marketing, & we turning our delivered strong led performance segment second margins, results. to Now In Refining results the

Our delivered earnings. segment Midstream growing durable and

MPC MPLX remains X% increasing to it of including which MPLX’s of MPC’s of covers distributions and million a growing XXXX which $XXX not program, portfolio segment is quarter, this billion, dividend MPC’s $X.X $X anticipates half strategic as annualized and year-over-year. current rate unitholders. EBITDA capital adjusted billion, of fully flows generated MPLX. distribution it part our was quarter, an planned This up cash its over

second increased the refinery. processing as Bay The key have quarter, the as project is we our refinery residual During distillate at of heavy and Galveston progressed position completing fuel crude recovery. Galveston by well projects the Bay competitive enhanced STAR the such as

day positioned XXX,XXX on export well the per with commercial global Coast significant with U.S. premier support two refineries barrel capacity Gulf We strategy. and are to our logistics

to feedstock per profile, year Neste. diesel among will and be strategic flexibility the construction point, in advantaged online largest, Fuels logistics operating capabilities At by competitive robust a renewable capacity capable expected the end of competitive with Martinez its the a XXXX. and the are full activities the Renewable be XXXX facility Martinez starting progressing. is second gallons producing facility, of Pre-treatment facilities XXX of to slate with At relationship million of most half and are come that

the quarter, XXXX May repurchased we And repurchases. July, million we through billion of the in of and dividends outstanding. allocation, have returned or shares second via capital share $X.X shares On shareholders MPC from XX% approximately the end to nearly XXX

our scenarios we climate perspectives July, our published Xth report on report. annual Moving our to sustainability and annual XXth sustainability efforts. In

climate-related we our thoughts have with which the on energy insights climate-related risks Our we put TCFD how the results perspectives on into resources scenarios we the opportunities and them that landscape, standards, achieved. and towards provides see addressing aligns

set on operations efforts future. of and resiliency to for progress we our that goals for continued innovate our have shows the the ourselves, to report sustainability Our strengthen

the turn to like I’d point, this over Maryann. At call to

Mike. Thanks

X provides billion our cash morning, Slide highlights, Adjusted the from financial for reported results. $X.X flow $X.XX. per quarter to a quarter billion. $X.X was excluding EBITDA we share operations was Moving This summary of changes working capital over and earnings of second favorable

quarter, dividend During payments shareholders we to $X.X billion shares. of $XXX our repurchased through returned and million the

cost million. between X roughly EBITDA tax Slide change second was lower of inflationary well corporate throughput crack provision refining of income we guidance. in more net and market our by the adjusted than $XXX out as higher in $XXX XXXX sequential shows despite sequentially resulting offset And XXXX. by approximately from to of adjusted XXXX. lower XX.X%, $XXX the were first in reconciliation quarter have million pressures, of the line as as with for EBITDA EBITDA million the approximately cost quarter Adjusted The was the rate since taking spreads. expenses general quarter a since maintained our Corporate discipline second tax was

prior provision to related $XX Our tax included discrete a years. benefit million

activity utilization turnaround Moving in significant our plan to a of Marketing increased impact crude X Refining on to had segment despite an results. & units XX% Slide quarter. second lower segment. provides our work as X% the Refining overview

Bay, has capture. XX%, service occurred our regions since in turnaround extensive Capture were XX. This May commercial approximate quarter refineries our and per out of activity early catalytic the resulted in Gulf by been sour Sequentially, throughput reduction and given the quarter. an the differentials. X% barrels at strong reduction reformers. a X.X crack crude lower margins of During incident one Galveston of approximately spreads an Coast driven at to million This the the result Mid-Con in was reflecting team, crude and from particularly lower barrel unit

XX%. due quarter, energy Slide of our in an lower capture overview provides lower barrel was X per costs. refining margin second $X.XX marketing and quarter, this and which were costs and sequentially throughput operating to higher Refining the

downtime. executed Our effectively product tailwinds of were and a pricing. against considering commercial distillate capture result, weaker planned team a Gasoline achieved balanced and refinery amount strong and unplanned significant margin secondary

based have to over see of will market last We also a are sustainable few the we commercial provide results benefits crude advantage. This expect has we mix will performance believe product incremental dynamics. the projects. become foundational, years fluctuate We results on seeing capital the major commitment to built that recent emphasis. and Capture this and yield from capabilities

the change in EBITDA first shows versus of the adjusted XXXX. X our segment Midstream Slide quarter

segment quarter Our second higher year-over-year. EBITDA results. X% flat delivered adjusted was Segment strong while sequentially midstream

generate continues midstream strong flows. grow to business Our and cash

are us cost to high-return cash the to growth will the our We are Permian along business basins. expected These advancing projects portfolio anchored our and reinvest investments, in on return capital optimization This in unitholders. grow Marcellus flows. allow to disciplined focus capital and with and

billion And This was cash the quarter. quarter, in repurchase superior million was approximately repurchases $X.X end during in for the quarter. consolidated working Slide under an XX of MPC a billion presents Working billion as our in our the have quarter. $X.X excluding $XXX tailwind flow, consolidated crude quarter, working Operating and $X.X MPC short-term approximately we change in capital second capital, share today, of capital, $XX.X and refined share investments. highlighting elements operating position via payout had product billion primarily shareholder the cash cash dividends remaining oil returns. authorization. the second commitment $X.X driven of inventories. the the the our represents in billion of excluding and flow, At for current million of XXX% quarter, by our changes changes expenditures cash totaled in $XXX Capital investments XXXX outlook. returned with consistent this nearly changes and

quarter our XX. We guidance, to provide Turning slide third outlook.

and throughput in to mid-cycle million XX%. day, refining of margins, We enhance the turnaround per forecasted to barrels quarter, expect crude of volumes representing higher sequentially third Utilization roughly activity due X.X utilization to is high planned continue incentivize be lower utilization.

is to date, the million start-up reformer costs, our quarter. quarter. are the $X.XX, in the we expense Operating in approximately to project at $XXX refinery as see confirmed portion down throughput we we of will given throughput turnaround turnaround the and While completed significant third expected the not from entire third to cost have be guidance be per our Galveston lower a activity. be Bay the barrel have and benefits higher assumes for Planned expect quarter projected

$XXX are across against expected pillars for representing company. the to recap, be reflect expected our we To costs the area. strategic $X.X results Distribution this be costs are execution quarter. quarter to made sustained third that in our the billion have approximately our reductions million, team’s Corporate second

Our remains capital consistent. allocation framework

secure company’s earnings the invest asset capital our while will sustaining the grow base strict we discipline. exercise in with dividend potential to a will competitive paying We and We want growth. for

Beyond our capital these meaningfully X excess through to priorities, returning share we to committed are share count. and repurchases lower

Mike. pass that, let With back it to me

invested capital we where summary, to believe In safe Year-to-date, and Maryann. will there returns. billion. invest assets performance over are and of ensure to $X.X our reliable continue attractive Thanks, we we’ve the

to And we’ll ability of the increase source us position enhanced $X grow continue believe generation and to shareholders. distributing MPC superior to we flow remains billion commercial this through-cycle MPLX Our focus growth to portfolio, a flow, MPLX We have will of to the on excellence cash mid-cycle continues as contributions positioned sustained in deliver choice to to investment the operational cash annually. MPC and as believe with refinery returns to is over environment. MPC. our capture its capacity our strongest cash its free improvement

turn the call to With let me over that, back Kristina.

will Thanks Sheila? Instructions] the we Mike. open And call. [Operator now,

Thank you.

session. We question with will Leggate Our Doug Bank [Operator question-and-answer of now from the come will Instructions] first begin America.

is Your open. line

from have to your walk addressed rate improvements. capture? out your pick you going your Mike, for issue up on for management? Thanks it I back release, Because just Is up. press it’s the which recurring example, COVID of for else? it it that becoming to rate? commercial stepped on capture everyone. bit Is trading? seems rate but capture what’s Thanks. – headlines capture And Is distortions guess look we something in on minute, question, leaving I one seems a a Good are What’s morning, on I through of it on. have to the sustained theme, having a portfolio looks us like going a pre-COVID, to that of can as want me of

for but I little couple One, we changed Thanks of made Rick give more analysts that commercial changes about and metric. to our bit. that a Doug. flow a comments. to I’ll I With off lot start that structural just process and detail, am like to metrics earnings question. quite going the of look I the have care with that generation capture let yourself a have the morning, good a profitability. Yes, always cash people is caution at said, I know want and more

obviously, we metric, couple things look of have pros lot has much changed years. that the of capture point, driven that I I more is there at to your it. think a trended it last by that the So cons than to But because and over up and

Rick little So I’ll a let give detail. more

Yes, off, very perceptive question. Doug, first

structural change to the it’s something think call believe that’s and out is going warranted. I a good do We stick.

fact, in we In continue to and never to done are going improve be we category. improving this

So daily. that we on focus it’s something

will to anyone holistic will it’s change around in I on do isn’t it’s not you’ve advantages. incremental above. So optimization, enough. the of value knowledge, you it’s and And our assets optimize I think call our broad size, it’s a I give touched in feedstocks our can And not mindset true I it’s to there entire trading, giving buckets our to you mean can’t the the Doug, respect it’s that’s best an our throughout be system, as say to say system our engaged. our it, from company have expertise, everything away logistics competitive what answer, driving in products. way I would all on, that the But all I we

commercial Our just cash our is the This entire generator one-and-done flow is with. company isn’t a attacking not but through mindset this our and team, everyday the that only exercise. best to goal be is cycle

watch quarter. follow-up other We up pace will it’s hard for But the is this continue not guess a to I it, to the question buyback Maryann, color. is also in Thanks July bring Rick. that my million. $XXX every

covered at buyback at Your ratable mid-cycle of level about MPC that should we forward? should that is dividend level at assume going your distributions Why XXX% by the kind be not from MPLX.

remain the for and Mike have that our framework question. committed hopefully, morning, the Doug. allocation remain to a comments perspective capital superior to Good allocation even we committed have from Hey, capital it. defined made here From as Thanks Maryann. and morning. and returns we this both I

billion ability We best as now, things each We the look is take documents, to look – $X.X we consideration. a of relates month, the We you best bit of in we to cash quarter, from know, see and do look When it as to our a are quarterly can. that series market. perform you repurchase as our But have efficient share to get We again, variability very flows look to As our visibility quarter a at you trying as job see in month there. you maximize as given we of seen we to we committed. capital. a try can quarter. at possibly you into think the return remain you back

As allocation to to to an have dividend, that it remain I of we We again, well. that. relates answers We be hope sustainable. to past, shared part want in capital the want question. be to important committed the we and as as it your framework, our certainly opportunity competitive grow that the

you shares there much are agnostic this because forgive question, were the are price Maryann, me your the you all-time clarification year? pretty highs at

can we Again, quarter. in opportunistic try to possible the as as Doug, we be as

are seeing our approach hope So that. you from the that what to we – that’s

to as seen. we you have buyback yes, continue stock So

Opportunistically.

Okay, Go thanks much. so ahead, Mike.

add to it. comments just me of couple a Let

I cash. I is first that business a question, your believer its concentration capital as both return to then the has this on one requirements. And and of said to number As just am generate return

the we grow and to also time, cash earnings return our are over return are but to on, committed of. on investing So improve our capital we flows

our to market that wisely invest and capital we we of participate want in both. because owners. that our to to to am programs the show the we strict to So both set We able capital market in word grow the big used show sides returning to also got going can that are that, We earnings, believer we’re we discipline. the be capital a such I

program a been couple that a that’s for while here we’ve So years. on a of

little starts of. return And return cash to optimizing as then we We’re just more continue and a generating in going to that all I with at it you flavor mode. bit how to it, want look give on and but

good. Thank Very you.

You are welcome.

from with hear Goldman Neil Next, Sachs. Mehta will we

You may proceed.

product morning, team. Yes. market. get your to Good want I on perspective the

across really we’ve firm a here seen up So the crack.

you And demand a strengthening from on are perspective any seeing perspective your so – in for recent jet gas? strengthening And what margins? then the system diesel, have of own and you

we of morning. on because crack. is of really let the good demand equation first This are Yes, side lead side the equation the Brian. me comment the the seeing Neil, demand

So book see it’s the X%. EIA continued up were our pool. call X% on really recent say was And our year-on-year system, system gasoline most last our entire up. marketing strength. an about in This quarter, when we up We was I week versus gasoline week, of X% on the

encouraging X% back And dialed last of continue we largely looking which flat. for think been season to as has is X%. the a a EIA then diesel, quarter the I got the of it’s call had has up about pretty Jet. We an X% everybody the of So increase very we And on been enter quarter, quarter. at course, on Coast week. performer, has the outsized half see the X% West the driving strength, here. And into

fuel versus about EIA year-on-year For X%. of jet demand

over I been the big last the the And would story that distillate. days quick here XX say to XX has the just on real crack.

with our year, a late mean, first I in certainty. up of in now the uncertainty And really part situation is So last the view this more around have distillate we year ran EU. sanctions in over lot Ukraine, the obviously,

now we’re the So seeing a since beginning fundamental the to level. more market the and recover pretty precipitously of year, off came it

headroom would is us to is dividend. the fixed do It’s to when you strong has given dividend on, and notable. perspective been and follow-up your the remind The perspective been again Thanks, typically stock that. just raise it’s X% just how about down around there

Maryann. Neil, It’s thanks the for question.

a them, that for only we’ve one criteria obviously, got dividend yield So that and couple of mentioned, grow. of I hopefully, of the sustainability the to see as being you obviously, potential

our as back intentions with we will with for share be you committed, the So dividend. our we’ve next plans to quarter

your consistent approach quarter, next question. So as last year that our answers hope I with well. from

Maryann. Thans,

Thank you.

come from will Our UBS. next Gupta question with Manav

open. is line Your

this morning, Galveston the haven’t indicated you to mega is point, big of RD. as are this mega bringing you as the guys. project. conclusion Good your two year, well question Martinez At another My projects, like

be should you quick assume to CapEx XXXX year be not stage? up CapEx in that So which that would expensive. of projects, versus XXXX, year-over-year, more dedicated mega hit are pick And can down that a XXXX, could we the generally mean your project this at unless

It’s Maryann and thanks for the question.

I it well. characterized think you

be as As we of this is by our the from on And end shared to comments as its with quarter. well, largely phase way you, STAR the and up heard behind you next us. with Martinez running

a we’re give know, you bit early to guidance. XXXX As

give bit initiatives look you we you in spending low-carbon you, contemplating closer it we little that more prior I well to to be intend a have But would get some at give to think as and we well. well. as will as quarters, our in as We color refining what stated

We to haven’t helps. here projects major talked about any that for. significant Hope

Mike. Manav, in to some I year. to do just planning early what a subsequent obviously little opposed about just to ‘XX, We add. this in as quarters talk that as will the we’re is in insight have we It’s want but now. to

completely was being you Martinez I is, follow-up when of I first understand. the quick refined understand, My and project, as so it refined. more here envisioned

brought looking run little what a you at stocks or own lower you to versus at thought percentage somewhere you of you process changed. in comment on the Can want As are your a this bit And soybean. CIS partner higher that? stage,

Brian. we in and Neste. it you terms of is relationship with pretty the got Certainly, there the on Manav, have strategy Yes, dead this strategic

mention of your though, on here. Just diet are we couple start-up to things question, that a around

to not horsepower of of a quite point that to half our confident little full ability and I design exited feed enters with So the beginning bit with our of facility looking XX% in this start-up that year, similar out But this really with is our ran was advantaged as a back online perspective, operation mentioned, up beyond our relationship just Martinez. Martina but This one facility you, our in of July the just Neste just its we’ve Dickinson, slate coming of Martinez. view very we’re in pretreatment Dickinson. we specific, give with just is facility will got relationship. of share in we really up but and really And our

better when bit expect things a So frames to full get what hopefully, this up rate to Martinez that later year. little you for of up we

I work want add that we try that feedstocks we the facilities. when capital good whether conservative going at such Mike. teams ourselves try it’s obviously, do make that we to as comfortable said, or RD hard project our commercial then in to refineries out And nature. comfortable a as even better upside the we’ll Brian have just optimize and challenge feedstock the other we’re Manav, look we to to have start we the sure a commercially that we we to and project, are advantaged very the the without way deploy that side. But feedstock before feel to that it’s in on

much. so you Thank

welcome. You are

you hear Paul from will Next, Cheng with Scotiabank.

Your is line open.

Hi, Hey, thank guys. morning. Good you.

think I past, the your upside. potential at and they looking we’re if in said you portfolio, see cars the biggest refining

that capture are any that you initiative kind upside? is of – So that first there question. to thinking That’s the currently investment on

guidance, the as has the in for that third quarter, actually quarter, significantly looking to the question throughput When second lower. same this the I’m your come turnaround but activity Second exactly be which at that Rick. about maybe is is

turnaround is is with second we you. the quarter. missing activity much higher we number will that you conservative, very have Or something? just Thank lower is being much the had one than thought a are throughput So

portfolio said point. it’s on have projects the color quarters. it. ago, of we’ll Paul, Similar in one, second first and to it’s think capital some next early the one. to capital is more to our I little take Rick that little talk minutes But Mike. start upon give do on XXXX this we Manuv’s I’ll a a will question a let at like about that the optimize – continue few improve I’ll We couple

a So start quarter next give and little bit as you can more ‘XX. bit if what a the hold we’ll insight in thinking just your more on we’re you give little thought, to to

it’s Paul, Rick. Yes. Hi,

guidance So work Paul, of advantage, being for it our outage. throughput maybe you’re we But XQ, XQ. I difference correct, in not and on that is said, reformer XQ, especially that competitors lighter our one you’re an lot accounting that see as for turnaround is think with as have a than the the heavier

to So the guidance, when factor in, landed you difference. really we that’s takes only that our Paul. you in That’s really where

Where and timing. our so reformer that done the think to the maybe in I clarify is was on since can of this of down I half mid-May only because quarter going – be

So throughput. barrels total that what day dropped you per XX,XXX, XX,XXX in

be So for higher – surprised is the quarter. level and that book it on guidance is still really not third the a

Hey, Maryann. Paul, it’s

given me all try incremental to you. provide into the that commentary Let color has Rick

in second you’re quarter. XX May of the the quarter, down end So the from right, to the reformer was

this be guidance is For at quarter, would operational purposes what have we all. of in we assumed not

when day, the a was XX,XXX X%. about it’s about impact last quarter, it we talk So about

look a at not you that’s whole in it’s overall U.S. about Coast, the Coast about Gulf particular impact, reduction operating, the a unit X% to in and just Gulf absence U.S. the quarter-over-quarter X% If system. from the that of strictly

you. hopefully, helpful to So that’s

you. thank Okay,

question will Our Research. come from with next Sam Margolin Wolfe

is line open. Your

macro Thanks Marathon I for is call, my to want year. to question, earlier a a everyone. from This call calling and harken back a Hi, name. this

Russian sanctions diesel then cracks first was Brian go down the has with go And I happened sort prediction to the on, would exactly that and what again. do made of will up it destock think specification and and issues. the that’s later then pattern it they

if products now comment export that driving diesel in of if we’re the there? for if cracks for strength your and is of that’s in the the back part strength reason see And of example, so service here on-spec the want shortage see it to and you just some bring markets, I to see you seeing a

absolutely. Yes, hear you. from Hey, Sam. Good to

earlier. We expected. played we as it I things seeing mentioned are out

market with terms barrels for I the world become us situation really was of I the distillate of Russian more the uncertainty, Russian think and big much think in on the friction thing hitting market. has all certain the today limited

We for have Brazil, of America, system the notably Latin exchange of share U.S. little barrels deeper seen Russian into an market exchange, a bit penetration into share Europe.

the a XXX,XXX over So distillate couple day security. exports And of Europe hearing barrels last factor market. almost for surprise of from months, to the is we’re is No in big energy in a them. here backfill we’re European driving seeing customers really what

So finding many really question team our into with strong over on for the demand, strong, and both distillate. over market for stable outlook book forward, cycles But in your be case gasoline been continues London the we right now really, our Europe. our and going now, very operating to traction and on good are really broader to has export

then a conversion we’ve them, – OPEC seen the Okay, one factors, and have up to different cuts. it is new but concurrently. of intermediate thanks. a then follow-up, of And differentials this as new heavy starting seems but starting And compress you similar capacity units there’s operational an couple maybe of up bunch and correspond other to refining

Thanks. go back we of just kind with the market and where this once. and time, And at if see And here high-sulfur so of was? this Or set new just these all oil, over might is things I on a of towards just function capacity? this all the the heavy tightness is it fuel adjust on will up the specifically light normalization then happening

on of that. points is A couple Sam, Brian. Yes, data this

you look the at sulfur if spread. So heavy distillate

real, real Of low last course, course, max in system the And we year. of mode. distillate swung was

and diesel distillate, producing outran were retrench. we’ve of hydrotreating we, in we which complex is as possible, this here as system mode, mode We’ve generated whole diesel seen come we’ve off been sulfur that the high summer. MAX and a refining So which as entire by much capacity as more producing gasoline large,

a So of traditional more relationship.

I the we really, diesel in to gas So look are MAX factor think load. is or MAX at

of the the up Coast, it’s occurring at things kind traded depending or quite thinly system. you very the Gulf But of can if one specifically market, you’re impactful. what’s nominally mentioned down is looking in watch move out it dramatically on so the Some a are

Thanks so much.

Rick. is this Sam, Hey,

of as to the differentials. crude Just was what saying, Brian tag question, your part on heavy to light

we the in. – is believe So do bottom

through will point And reasons. quite We variety believe spread for really We’re a actually get end forward it’s the this optimistic. that wider year. of of

that’s increased PADD planned the specifically to demand take got table. turnaround needs and going You’ve work off some X crude in X

cause So that will some length.

that production come the of are Gulf to Canadian and And Gulf season, producers got Chevron the have Venezuela their You’ve then incremental U.S. you’ve Coast. out got Mexico running clearing maintenance and from they well. of

on markers at it So current around the The look it about discount. and discount. low a Canadian, we its when Sam a about trade got $XX specifically, heavy $XX at hit at in June cycles

now significantly and you over the year. even of end forward out between widened it’s when days. out further look So at the to last the the here curve XX And we continue see it widening

Got Thank much. it. so you

Sam. welcome, are You

from Cowen. Next, TD we Gabelman Jason with will hear

proceed. You may

call. made for the on to macro my comments Yes. key the in top Hey, want thanks a on elaborate. you couple I taking hoping of could Mike was question. I of

you in maintenance higher PADD in region just answer like every sounded was mentioned impact operate that that Rick’s now in. from almost and going forward he be It X First, you PADD moving X. to

you secondly, you can sites, globally that expect delayed. any that? in the Thanks. was are in would wondering one, on particular, confirm is I So then there And it mentioned And is in you mind? maintenance are And have fall? what follow-up. macro, if you startups refinery bit higher a some the sequentially? I than had a higher that Or typically

quarters in turnaround. Yes, remarks is through gone of Jason, it’s a Mike. the was I’ll we as start, and four then I I’ll in. let prepared Rick What company have pretty saying heavy jump

looks And it as the see to compared of more year, the we the the we’re of but activity how plays we’ll a lot later year. it rest out, industry, so rest and like into has have to into industry what the see the

So is. that’s the as think difference what rest and we the I we was trying where the where between to are say of as industry far

just Yes. And on. I’ll then tag

and found, appears be we true In terms to capacity, under-deliver. what of it over-promise is and global continue to refining

specifics. it’s their speaking, their generally that I versus generally – is speaking, really the you utilization going online. others of appropriate don’t when seeing think when projections we’re to give world, meeting delays So But to come throughout

So, more of a comment. general

there wanted heard And to biofuels confirm some impact going challenges fair the it’s going address. there challenges everything these projects. to gallons? to court are on is industry I what’s to sources is that million Is like of the that tell. XXX Great. could my terms project according And It ramp any that the tough plan, we’ve just you’re but is up of having court on? risk because Okay. full follow-up to in any of sounds from the Martinez that

were five there six here favorable them. briefed on outcome use months. court, permit. being with and prevailed So a land And the upcoming anticipate still challenges we We the one of currently our in is to the

to construction operation. projected nothing impact and/or So

To up while can resolved ongoing clarify, that capacity? you you ongoing, our ramp before need be or case you ramp to – is while up need that court you is would

on construction operation. continue the and with No. can We both

Great. a lot. Thanks

Read Our next Wells from question Roger with Fargo. will come

is line open. Your

times watch. start of can on up Thank you the has and Martinez. good morning. get as industry know you milestones I’d with should if We challenging like to that us to these out Maybe we the understanding been help some cleanly. well just follow facilities up to

the the put end goal a full have out of run of rate obviously year. You by

contributor anticipate the at late you unit? about would would looking So, when expect think that positive EBITDA, of terms back a it third point to And cash becomes quarter, earnings? this flow, where as that in you see in October, we

question. this Tim. that Roger, I is will take

at first are Martinez, off, very activities construction things are and going So, they well. schedule the on remaining

in end the support indicated Mike X bring And is unit. we the train that at now conversion started prepared capacity is the with Phase when we the RD The the second just of Q&A, facility big the we the alongside with really one portion though the up on a up ramp complete. and Martinez recently ticket on-site volumes. Brian both of pretreatment item, pre-treating remarks As are when we year when train the early will and

job great year. a remarks. Team it would and the doing positive forward we I look to end So, give of is the

‘XX. your you Roger, got into financially, be And To Mike. thinking to it’s question,

As starting ramping, Tim are are said, we up. we

We bring well, goes the all by the on of the year. we are be and will end additional units going on to if

‘XX So, you in a go-forward basis. the to performance more financial start see will on

a And question you to Maryann. sense. a as That very part be is then operation, that should makes Granted, of half refining, but so reporting Neste a renewable when venture, small via accounting going own we bigger rest overall about for a we Dickinson or see but standpoint, diesel it’s from is will the business? now operation, this the operations joint the think how – of maybe I are breakout much from of understand it of

Roger. Thanks question, the for

relates have consistent and as we way to first, profitability said, years you it the with Dickinson we have X expected operating As been about for there.

from Martinez. to Although see real we some of what Mike parts of moving shared you are thought. continue expect when with different, consistent see that contribution should we the to we performance the just with

terms So, we contribution. of both will Martinez Dickinson in evaluate their total and

have for continue to as move back we you for XXXX, know, and to planning But Martinez. that Dickinson profitability come to we you we we along our break are out. of path will not As said both

And it’s Mike. Roger,

already, renewable significantly you cash obviously, know thing this higher and are I other than refining know what’s flows happening The the diesel. assets but in

us all the we that put them obviously, would and talk long-term in and mode about that optimization is, in way forward, mode at we competitive a a not it did assets capital to and as deserving mode. about our think assets, I take two opposed going think investing be diesel portfolio flow crude cash positive looking think to you of a should

optimization So, flows. we refining portfolio on are to a compared where cash think realization of more I it’s

is you exactly I thoughts my be of the haven’t just what it, a and lot we final Well, on uplift which leave valuation with will will know to because contributions it’s difficult put where. in really some

for more think a I be disclosure will So, positive you.

Thank Okay. I appreciate feedback. that you.

Thank you.

you. Thank

Our question next JPMorgan. comes with John from Royall

open. Your is line

Good question. Hi. for Thanks morning. my taking

know are bit just you back the restart Galveston just on that reformer. quarter that maybe where in the back? your assuming a just coming is assumption guidance, we could in but question to Bay out full for of with guidance. coming So, that on little when process you color update an Is my first beyond I XQ are there see

will I has beyond that completing and is really guidance that. Tim. have share we the schedule. part all expeditiously that any repairs this we don’t So what prudently Maryann are take to And John, is of I further unit. on can And relative provided already

Okay. Fair enough. And my next question is on tax.

had in XQ. You rate a very low

that about quarters. Are a MPLX couple the that past to moving other it’s non-recurring. refining, even But out couple on rate? $XX just refining called You past of still of any that, tax mix the think with versus down trending down of the Is of quarters? non-taxable coming adjust pieces there when looks million-ish in for I

John, for Yes, Hey that. it’s thanks Maryann.

prior is the some, all about And prior It’s and called stated, an $X.XX benefit we out good will story. you the $XX that to item news as I successful period on periods. a So, smaller has million bet going were that resolution We forward. that’s quarter. related of have a it but benefit, for in

the or As typically we on business our you our items business. they also be the rate relationship you discrete time-to-time, Those between the positive. typical from our are look cases, stated, would State And Federal stated, But mover have is our that in there, could refining when biggest negative. and relationship. be you at could tax some driver have rate items. positive But and the as midstream rate

decent million run that’s to a $XX I adjusted rate if about So, the forward? this quarter, going think in out

it’s when little things One lower of bit that said that a have the than at you average. look you rate,

in I think coming the XX% quarter. to a you ZIP are around code probably

from run year, last XX%. seen have about we you As have

look between but you lower at the a at midstream range that relationships So, there, of is XX% certainly, there and today. refining end when the is

Thank you.

Thank you.

comes Barclays. Chen Our next question Theresa with from

Your open. line is

the question. for landing ramp to Martinez of where be changes the on love here? your couple that and expectations over LCFS, outlook Thank Hi. next to discussion for the general. up of CARB you renewable in proposed submitted the that will quick your final I related my draft the taking see of seems general would your pricing thoughts months. outlook and diesel and the from hear I to economics you just Related had a of it to follow-up And

believe morning. CARB RD the We have with a actively reset. Yes, Brian. LCFS We so find we as involved is of the come This Obviously, of have precipitously penetrated. CARB very couple has prices years off over way remain good valuation program. last to optimistic. Theresa, fairly wants to foundationally on been the support the

variable the the value in LCFS overall So, note, market. But for our expecting is we are equation. smallest support

not it’s a mover, forward it’s but think going RD on the big So, profitability been needle space. to do we important the underpin

In addition, obviously, we beyond are looking markets California. at

our to other down we in prices is on come opportunities are there beyond LCFS state-level West the with market that position. California, as So, and Coast penetrate programs finding RD

Thank you.

you. Thank

Our Matthew Blair next with TPH. from will come question

Your may proceed.

adjusted questions quite related Hey. markets Good cracks July, here. morning. any diesel PADD Thanks were for taking Chicago earlier weak my Do have even III. on to like Group other X you one on they basis? in here? was negative color any point as what but far, why recovered RBO It on to at was an going looks color so Diesel Chicago like

the that it’s side question. get can over distillate season we as trended are in to that what this here think that’s which of is we volatile. Matthew, in remain the on a Chicago Yes, nicely we from It’s Complex harvest into the out see of the Clearly, west here of the good have we Yes. west is side far a period great of recovered really, Midwest basis the head time-to-time fully. position Chicago, we pretty from time. it’s in where as The is And unique nature I of saw we marker trade strength. Chicago, expect And overdone. Brian. a optimistic recovered quite but

And Singapore that diesel this any consumption you and volumes posted for a Do petroleum are of – export to the quarter first that year, diesel volumes And risk down the refinery, RD in problems Angeles night, that CARB data good. in X% the you road? it be sounds California XX% last are California to on having then Los to you consider your your It having the Mexico? was new placing showed market? up or

Yes, Matthew, this is Brian.

you yes, there. barrels. problems point the On clearing no the But on prop are basis,

I As RD can to penetrates as barrels system our that expectation will say does a the one-for-one beyond the we include West that the market, It’s the fairly planning sure Coast horizon California it’s relationship. and make export a whole, ability balanced. U.S.

right strong very, jet In addition, is obviously, now. very

that the side really So, refineries, distillate in the sure to look working if at how the the we at maximizing really, book. we of fuel of structure you are yield the cost jet are terms running are hard of make we

Great. Thank you.

You’re welcome.

time just question. for do more you. We have Thank one

question Our Ryan comes from last Piper Sandler. Todd with

open. is line Your

Can project refining Maybe downtime going performance you saw to side, future? how Gulf Coast, expansion quarter? the on am Okay. in in strong And on Thanks. you contribution as of curious the how at question maybe the – you and on I the forward contribution very that Galveston the update much from STAR the is expansion an just a had reformer despite the the at Bay.

Yes. for Thanks question, the Ryan. It’s Maryann.

in were QX in obviously you in you the quarter Let ramping stated, U.S. keep first Coast, me under as When give mind performance, at color. try little to of to look up. bit the a QX you we Gulf and turnaround

despite the have the quarter saw a obviously, So, we in just down the second benefits for you of did of that reformer portion the that, fact the month.

on, only as a quarter I for given be larger, little that down. commenting X% assuming the that the impact As get about second we to a fact are I was shared, it it’s will bit

and doing did maintenance the first I quarter are we lighter heavy think the in cost to when doing work is was that are we in as we other turnarounds, look as thing in in we keep much when second at other typically quarter, quarter, the the typically well. mind

been to STAR, as know, we ramping we as second have up STAR the quarter. was you relates it ramping through As sharing comments our were up

respect to see the have will but you begin with STAR, completion of to reached as project. impact we minimal that So, that now

Maryann. producer. active And of various Great. an you have in a in even you, today obviously recent diesel, been high-level meaningful maybe kind question, investment investment in a RNG low-carbon Thank renewable transportation fuels, just

terms in how years, next go fuels. fuels XX for future overall at are in of thinking your transportation the sense of do long-term a As investments? In here strategy from transportation markets transition? And about of your definition you in potential particular, you broader the you look a for maybe over your role the where outlook

Mike. Ryan, it’s but of transition. use know to evolve it’s a I energy word than Yes, of about. energy I than evolution energy going have people most longer period think lot like time the written a more I transition, over

very be So we’re thoughtful. to trying

the using will evolve. We word

We will over time. evolve company the

a We As our you of investment small renewable made X diesel. facilities are now facility. pointed RNG out, an in

we’re looking plays So We of hydrogen the DOE the at that over all about talked today are opportunities. some on and out we’ll Dave how see hubs, in and his time. call active those team

as to use try to us committed think So We want invest we getting be opportunities strict themselves, going to of to as word do returns. very We thoughtful. but present are capital the solid discipline.

look to And point for Marathon So say We time what plan you’re years? overall, in and around us to going for just activities over been XX be around your XXX away XX about, evolve I’d XXX more. little to are years, years. see chip has XX it years to we at constantly going whatever or like

deploy as dictates. capital consumer are the preferences, evolve going those drive to the things opportunities. we’ll we’ll look as the happens market regulatory to see impacts, and very and be company we attentive it And all what So obviously, to we’ll

Well, on Corporation. Investor to please or like would Petroleum morning, for member discussed will topics Should you team of additional your questions reach Thank you you so have today. in here a clarification Marathon Relations our everyone. thank this interest much, Alright. you help be out

Thank conference. participation. for That today’s you you. does Thank again once conclude your

disconnect may at this time. You