Marathon Petroleum Corporation (NYSE:MPC) Q2 2020 Earnings Conference Call - Final Transcript

Aug 03, 2020 • 09:30 am ET

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Marathon Petroleum Corporation (NYSE:MPC) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Welcome to the MPC second-quarter 2020 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. Latter we will conduct a question-and-answer session. [Operator instructions] Please note that this conference is being recorded.

I will now turn the call over to Kristina Kazarian. Kristina, you may begin.

Executive
Kristina Kazarian

Welcome to Marathon Petroleum Corporation's second-quarter 2020 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; Don Templin, CFO; and other members of the executive team.

We invite you to read the safe harbor statements on Slide 2. We will be making forward-looking statements today. Actual results may differ. Factors that could cause actual results to differ are included there as well as in our SEC filings.

With that, I'll turn the call over to Mike.

Executive
Michael J. Hennigan

Thanks, Kristina. Good morning, everyone. Thank you for joining our call today. Yesterday, we announced an agreement to sell Speedway to 7-Eleven for $21 billion in cash, demonstrating our commitment to execute on the strategic priorities we outlined earlier this year. The sale of this business provides certainty around value realization for MPC shareholders. As I've stated before, I believe this is a return of capital business. And the substantial estimated after-tax proceeds of approximately $16.5 billion enables us to both strengthen our balance sheet and return of capital to our shareholders. At the same time, the sale also creates a long-term relationship with 7-Eleven that enhances commercial performance potential through attractive fuel supply agreements and future growth opportunities. The transaction, which is subject to customary closing conditions, including HSR clearance, is anticipated to close in the first quarter of 2021.

If you move on to Slide 4, as a follow-up to our first quarter earnings call, we are making very difficult decisions to increase profitability, create stronger through-cycle earnings and drive long-term value creation. Despite the very challenging conditions in today's market, we remain committed to those goals, and we'll continue each quarter to update the market as we progress. We outlined three areas that will be priorities toward achieving our objectives. First, strengthening the competitive position of our portfolio. We need to be a leader in cost, operating, and financial performance metrics and need to make necessary changes to the portfolio to achieve these objectives. One of our key philosophies is that each asset needs to generate cash back to business. We announced the decision to indefinitely idle our Gallup and Martinez refineries. Closures as a result of the tough refining business climate ahead of us have been amplified by the impact of the pandemic. At Martinez, we are evaluating repurposing the refinery toward the production of renewable diesel. The facility has the ability to provide up to 48,000 barrels per day of renewable diesel. We have the unique opportunity to take advantage of the strong set of logistics