Welcome to the MPC first quarter 2022 earnings call. My name is Elan, and I will be your operator for today's call. At this time, all participants are in a listen-only mode, and later we will conduct a question-and-answer session. Press star one on your touchtone phone to enter the queue. Please note that this conference is being recorded. I would now like to turn the call over to Kristina Kazarian. Kristina, you may begin. Welcome to Marathon Petroleum Corporation's first quarter 2022 earnings conference call. The slides that accompany this call can be found on our website, at marathonpetroleum.com under the Investor tab. Joining me on the call today are, Mike Hennigan, CEO, Maryann Mannen, 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 today. Actual results may differ, and 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. Thanks. Thanks, Kristina. Before we get into our results for the quarter, we wanted to provide a brief update on the macro environment. Year-over-year, demand trends have been for the most part positive, and the market seems to have reached a post-COVID point of stability. Distillate remains stable, jet continues to recover, and gasoline has been more resilient than we would have expected, given normal seasonality and recent geopolitical events. The biggest factor outside of our control, is changes in global supply and demand. At the end of 2021, global light product inventories were already tight. Sanctions and boycotts following the Russian invasion of Ukraine have increased supply uncertainties. Product margins have risen to cover the higher cost structure of marginal supply, particularly in European regions where there's a high reliance on Russian natural gas. We expect continued volatility in 2022, with an advantage for safe, reliable, and low-cost operators. We are focused on optimizing our maintenance schedules, to maximize uptime and allow us to do what we can to produce volumes to meet the market demand. As we do this, we remain steadfast in our commitment to safely operate our assets, protect the health and safety of our employees, and support the communities in which we operate. With this in mind, we anticipate the U.S. refining system running at higher utilization rates in the coming quarters to meet rising demand. MPC's first quarter results reflect the continued recovery for our products and services, which supported higher margins, and higher throughput across our regions. We delivered adjusted EBITDA of $2.6 billion. We repurchased $2.8 billion in shares in the quarter, and since our last earnings call, we have repurchased $2.5 billion of shares. Through today, we've completed 80% of our initial $10 billion capital return commitment. I would also like to highlight the strength of MPLX in our portfolio. Last year, MPC received $2.2 billion of distributions from MPLX. As MPLX continues to generate free cash flow, we believe it will have the capacity to return significant cash to MPC and its public unit holders. Another milestone in our sustainability objectives, was the joint venture agreement with Neste for the Martinez Renewable Fuels project. This strategic partnership with Neste enhances our Martinez project by leveraging our complementary strengths and expertise. The project will utilize existing process infrastructure, diverse inbound and outbound logistics, and is optimally located to support California's LCFS goals while strengthening MPC's footprint in renewable fuels. Our intended partnership with Neste also creates a platform for additional collaboration within renewables. We believe there will be opportunities to leverage this partnership between two industry leaders as we pursue our shared commitment to the energy evolution and the goal of leading in sustainable energy. MPC will manage project execution and operate the facility once construction is complete. Additionally, MPLX logistics assets supporting Martinez will remain owned and operated by MPLX. We are progressing through the permit process. Contra Costa County certified the environmental impact report for the Martinez project, and we're hopeful that the county will shortly provide final approval. We remain excited about the prospects of the project, and its ability to deliver low carbon intensity fuels to support California's climate goals. Shifting to Slide 5, we focus on challenging ourselves to lead in sustainable energy. In February, we became the first among our peers to establish a 2030 target, to reduce absolute scope three greenhouse gas emissions by 15% below 2019 levels. The new scope three target further enhances MPC's disclosures in addition to our existing scope one, and two reduction targets. MPLX also established a new 2030 target to reduce methane emissions intensity from its natural gas gathering and processing operations by 75% below 2016 levels. In the second quarter, we will publish our annual sustainability and perspectives on climate-related scenarios reports and provide updates on the progress on the goals we have previously set. At this point, I'd like to turn the call over to Maryann to review the first quarter results. Thanks, Mike. Slide 6 provides a summary of our first quarter financial results. This morning, we reported earnings per share of $1.49. Adjusted EBITDA was $2.6 billion for the quarter and cash flow from operations, excluding favorable working capital changes, was $1.9 billion, which is roughly in line with the prior quarter. During the quarter, we returned $330 million to shareholders, through dividend payments and repurchased approximately $2.8 billion in shares, which takes us to $2.5 billion repurchased since our last earnings call. Slide seven shows the reconciliation between net income and adjusted EBITDA, as well as the sequential change in adjusted EBITDA from fourth quarter 2021 to the first quarter of 2022. Adjusted EBITDA was lower sequentially, driven primarily by a $175 million decrease from refining and marketing. The tax rate for the quarter was 19%, which reflects the benefits from the public portion of MPLX net income, which is not taxable to MPC. Moving to our segment results. Slide eight provides an overview of our refining and marketing segment. The business reported strong first quarter earnings with adjusted EBITDA of approximately $1.4 billion. Utilization was 91% for the quarter. The sequential decline was driven by lower production, which was primarily the result of unplanned downtime in the U.S. Gulf Coast, where we experienced two unplanned outages. In the beginning of February, the Galveston Bay Refinery experienced a citywide power loss, which resulted in a complete plant outage. Later in the month, as we were bringing our Garyville Refinery back to service, following turnaround activities, a fire occurred near our hydrocracker unit. The unit was repaired and returned to service after about three weeks. Both of these events resulted in approximately $200 million of lost profit opportunity. Margin headwinds in the quarter were a result of the lower capture rate of 84% that we experienced this quarter and were primarily realized in the Gulf and West Coast. Operating expenses were lower in the first quarter, primarily due to lower planned project expense, as well as a lower average natural gas price coupled with lower energy consumption compared to the fourth quarter. Natural gas prices strengthened during the quarter, averaging over $0.70/MMBtu higher in March than in January. In April, natural gas prices averaged $6.70/MMBtu, or nearly 80% higher than the average price in 2021. The current forward strip for Henry Hub, is around $8 for the rest of the year, so we would expect natural gas to be a headwind as the year progresses. Natural gas, is an input cost for our refineries, which historically has represented approximately 15% of our operating cost. Our natural gas sensitivity, is approximately $330 million of EBITDA for every $1 change per MMBtu. This equates to a sensitivity of approximately $0.30 per barrel of cost. Distribution costs were lower in the first quarter due to lower product volumes. Turning to slide nine, we want to directly address the refining and marketing capture this quarter. In the first quarter, our capture result was 84%. A few factors drove the majority of the headwinds. Secondary and light product margins, impacts associated with inventory builds, and associated derivatives used to manage price volatility, and to a lesser extent, Gulf Coast refinery outages impacted our yields. Slide 10 shows the change in our midstream EBITDA versus the fourth quarter of 2021. Our midstream segment continues to demonstrate earnings resiliency and stability with consistent results from the previous quarter. Slide 11 presents the elements of change in our consolidated cash position for the quarter. Operating cash flow was approximately $1.9 billion in the quarter, which excludes, changes in working capital. Working capital was an approximate $600 million source of cash this quarter, driven primarily by increases in crude oil prices, partially offset by increases in crude and product inventory. In March, MPLX issued $1.5 billion worth of long-term debt, utilizing a large portion of the proceeds to repay the borrowings under the intercompany loan with MPC. During the quarter, MPC returned $330 million to shareholders through our dividend, and repurchased approximately $2.8 billion worth of shares. Now 80% complete with our initial $10 billion capital return commitment, we could begin using the $5 billion incremental authorization starting in the second quarter. At the end of the quarter, MPC had approximately $10.6 billion in cash and short-term investments. Last week, we held our annual general meeting, which concluded our proxy season. We appreciate the engagement from our investors as we work to create shareholder value, focus on sustainability, and position ourselves to deliver results in an energy-diverse future. Turning to guidance on slide 12, we provide our second quarter outlook. We expect total throughput volumes of roughly 2.9 million barrels per day, representing 95% utilization. Planned turnaround costs are projected to be approximately $155 million in the second quarter. Expected activity is relatively light, and spread through all three regions. As Mike mentioned, our optimized turnaround schedule in the second quarter is expected to allow us to run our assets safely and reliably at high utilization as we remain focused on supplying the products and services markets are demanding. Total operating costs are projected to be $5.50 per barrel for the quarter. Earlier in the call, we shared our natural gas sensitivity. The increase we are currently seeing for natural gas costs are reflected in our second quarter guidance on top of our average baseline $5 per barrel of operating cost. Distribution costs are expected to be approximately $1.3 billion for the quarter. Corporate costs are expected to be $170 million. As we look at the impact of inflation on full year results, the two areas of focus are wages and certain supply chain inputs. However, we have identified incremental sustainable cost reductions, that we are executing against to offset these costs. Notwithstanding all of that, we will continue to identify the headwind from rising energy costs to our refining system throughout the year. Slide 13 provides our capital investment plan for 2022. Once we have closed on the Martinez JV, MPC will receive $400 million and be reimbursed for 50% of the capital spent to date. After the JV is closed, MPC will be responsible for its 50% share of the capital spend going forward, and Neste will be responsible for its 50% share. The total cost for the Martinez refinery conversion is still expected to be $1.2 billion, and MPC's net cost will be reduced to approximately $200 million. We will provide a more detailed update once we have closed the JV. As a reminder, ongoing growth projects in our refining and marketing segment will enhance the capability of our refining assets, particularly in the Gulf Coast, and also support our focus on growing the value recognized from our Marathon and ARCO marketing brands. With that, let me turn the call back over to Kristina. Thanks, Maryann. As we open the call for your questions, as a courtesy to all participants, we ask that you limit yourself to one question and one follow-up. If time permits, we will re-prompt for additional questions. Operator, we'll now open the call. Thank you. We will now begin the question and answer session. If you have a question, please press star then one on your touch tone phone. If you wish to be removed from the queue, please press star then two. If you are using a speakerphone, you may need to pick up the handset first before pressing the buttons. Once again, if you have a question, please press star one. Our first question today is from Neil Mehta from Goldman Sachs. Good morning, team. The first question is around utilization. The 2Q guide at around 95% is very good. I was just curious if you made any adjustments to the system. How are you just thinking about optimizing whether it's maintenance or your runs to make sure that you capture the strong current spot commodity environment? It's a good question, Neil. Ray, do you wanna take that? Sure. Thanks for the question, Neil. As we've said before, our 2022 turnaround plan was back-end loaded, so you shouldn't look at the first two quarters of the year and extrapolate this, the spend for the later quarters. But with current demands, we are really seeking to maximize our refining system, as indicated by the second quarter guidance. What this really means, Neil, is that, you know, we've looked at some fixed bed catalyst changes that we had planned for the second quarter. We've determined we have a little bit left as far as catalyst activity, so we've deferred that out later in the year. Our plan right now is to run really full, run really hard during gasoline season this year. Very clear. It's amazing how far we've come in a year and a half, isn't it, Mike? I look at your dividend yield now, which is, call it two and a half percent, and by virtue of the stock having done well, it's compressed to something well below the XLE. How do you think about when it makes sense to have the conversation about raising the fixed dividend again? Do you think, recognizing it is, it's at the discretion of the board? Yeah. Thanks, Neil. It's another good question, and we talk about it a lot. I'll let Mer comment on it. Hey, Neil. Thanks. Yeah. So, you know, hopefully you saw as we shared, you know, our capital allocation framework, we remain very committed to the dividend. As Mike just mentioned to you, it's getting a tremendous amount of attention from the management team. It's on our conversations regularly with our board. We know, we recognize where the yield is, and certainly, you know, as we look at the strength, particularly in the back half of the year, you know, we'll expect to come back to you here in the very near future with our plans, particularly as we are getting through our first round of share repurchase. You should expect us to be back to you here shortly on that. Thank you. Our next question is from Doug Leggate from Bank of America. Good morning, everyone. So I don't know if this is for Mer or for Ray, but I think it's really a question around momentum coming into the second quarter. You guys had a lot of downtime, as you pointed out, so I'm trying to get a feel for what the underlying trend has been in this environment. I guess specifically whether you are continuing to maximize distillate in your system or, given the current relative spreads, but you know whether you will in fact pivot more towards gasoline as you go into the summer? Sure, Doug, let me take your question as far as distillate production. The answer is absolutely yes, that we're working right now to maximize distillate production across our system. Just to give you a little more color on that's something that we look at daily, make sure that we're maximizing the total recoverable distillate, the endpoint and maximizing the front end of the distillate. The real thing is just looking at our distillate hydrotreaters across the system are full. We're doing that across our system. It depends on the toolkit from refinery to refinery as far as what that percentage is. Garyville would be the highest since it has a hydrocracker and 3 distillate hydrotreaters. Whether we have one distillate hydrotreater or three, we're looking to maximize across the system. Sorry if I wasn't clear. Thank you for that, Ray. Maryann Mannen, what I was really trying to get a handle on was if you could quantify in some way the lost opportunity costs from the first quarter and what that momentum looks like as you go into the second quarter with the system back up. Is that possible? Yeah, certainly, Doug. You know, for both the Galveston Bay unplanned outage due to the power issue, and then again, you know, as we talked about Garyville, we've said it's roughly about $200 million in lost profit opportunity, right? You know, that we would have shared with you through the market indicator. I think the other issue there with both of those refineries being down is the fact that, you know, as you heard Ray talk about our ability to maximize, we lost the opportunity to increase yield there, which obviously, as they come back online and have in the second quarter, given the momentum, assuming the macro holds as we expect it will and cracks, we'll be able to recover that in the second quarter also. Thank you. My follow-up is actually also a Gulf Coast question, folks, if you don't mind, but I'm gonna try and explain what I'm looking for here. It seems that Colonial is being underallocated, thus the tightness in the Northeast. From what we can tell, it doesn't seem that that's gonna change much given the call on exports for distillate. I'm curious if you could share how you're running your system as it relates to potential Colonial allocations versus the call on exports, because it seems to us the Northeast is gonna remain fairly tight here. Brian, you wanna take that one? Yeah, sure, Mike. Yeah. Great question, Doug. Yeah, we definitely see the same dynamic that you're seeing. You know, one of the factors that we look at in shipping barrels all the way up to New York Harbor is the market structure as well. We've had a really strong run-up here in the prompt on the front end of the cycle. You know, that's kind of the bid ask dynamic ongoing right now with buyers and sellers is the sustainability of that. It certainly is starting to feel a lot more sticky as we look at imports coming into the New York Harbor starting to back off. In the Gulf Coast, we also have really good placement opportunities, not only our book, but just across the overall complex as there's more barrels being demanded in Central and South America. I would categorize it, Doug, as we're in a very, very acute pinch point here in the short term over those market dynamics. I think you're reading the tea leaves right. As you look forward and think about less Russian exports and European complex starting to find a way to rebalance, the New York Harbor market is one that we expect to be impacted more so than other markets. As you think about the connectivity via pipes from the Gulf Coast, we do look at that as a forward opportunity, more structural and longer term. Thanks, fellas. Appreciate it. Thank you. Our next question is from Roger Read from Wells Fargo. Yeah. Thank you. Good morning. Good morning, Roger. Just first, Maryann Mannen, I'd like to come back to your comment about potentially hitting into the next tranche of the share repurchase during Q2. Full disclosure, we've been modeling a little bit of a moderation in share buybacks, but it doesn't sound like there's any reason for us to actually go forward with that. I was just curious how you're thinking about the cash flow coming in and the process of transitioning that into the share repo. Yeah. Thanks for the question, Roger. No, you're correct. You know, as I shared in my prepared remarks, you know, to look at the pace that we've been buying back, we would expect in the second quarter that we would begin to use that $5 billion authorization. You know, in less than 12 months, we started our program in May 2021. We've repurchased 80% or, you know, roughly $8 billion of our initial $10 billion commitment. You know, if we look at that result through the end of the third quarter, excuse me, the end of the first quarter, so the end of 3/31, we repurchased about 113 million shares at an average price of just less than $67 a share. You know, part of our process, we use a mechanism that allows us to buy back through blackout periods. You know, during our quarterly buybacks, there are things that we will evaluate, market conditions every day, average daily trading volumes, you know, to be exact. We don't think anything that, you know, you may be seeing in this quarter is indicative of a lack of commitment here by any means. Certainly, you look at the cash flows for the last several quarters strong, and you look at the cash balance that I shared with you, about $10.6 billion. Hopefully that addresses your question. Yeah, it does. It helps. Thank you. I'm gonna ask kind of the opposite end of the Gulf Coast question on exports. West Coast, obviously, crack's been pretty exceptional. There aren't a lot of places that we typically see product show up on the West Coast from, except for Gulf Coast and occasionally some shipments from Europe. I was curious, as you look across the Pacific, is there anything you're seeing there? You know, we've got lockdowns in some of those countries, so presumably some excess supply. But is there any of that that seems to be coming across the Pacific or any signs that any of it wants to try to come across given the ARB? Brian, do you wanna take that? Yeah, sure, Mike. Yeah. Roger, in the prompt, no, not really. We're not seeing any fundamental shifts on the West Coast or the Pacific Basin. You know, we of course continue to watch very closely at the lockdowns happening over in Asia. They seem to be moving through a bit quicker than expected. I mean, we've all learned to deal with COVID a little bit differently than we did two years ago. We're not seeing anything in the prompt. I might maybe just back up and give you some perspective on exports more broadly. I think it might be helpful, especially on the front end of the diesel strength that we see across the market. I mean, one of the key drivers, obviously, is recovery in jet demand. We're seeing that domestically and also around the world. The other thing that doesn't get a lot of discussion in the prompt is, you know, recall back in 2020, we were moving into IMO and different marine fueling, and that did take place. There's a new call on demand on a distillate pool from MGO that we believe is also pulling on the distillate pool. From an overall perspective, as we look at our export program predominantly on the Gulf Coast, we do have some limited exports out of the West Coast. You know, as we exited the first quarter, we were about 200,000 barrels a day of exports from the Gulf Coast, primarily into Latin and South America. We did move barrels into Europe, and we see that as an increasing opportunity for us going forward. As we look at the forward book here into 2Q, we're moving from a 200,000 barrels per day-ish program to more in the 250-300,000 barrels per day. We are seeing continued strength and opportunity there. We certainly have the dock capacity to be able to manage that increase, and we're looking forward to that optimization as we roll into 2Q and beyond. Appreciate it. Thank you. Thank you. Our next question is from Manav Gupta from Credit Suisse. Good morning, guys, and great to hear from you, Mike. My question here is, you did not need a partner at your Martinez facility. You obviously have a lot of cash, so, but you did seek a partner. Help us understand why you picked Neste? Why do you think they're your right partner? H ow does this JV develop forward with Neste? Yeah, Manav, this is Mike. Thanks for the comment. When we started this project out, you know, we were very open that there were four parameters that we felt would make a very strong project: competitive CapEx, competitive OpEx, strong logistics, and then ultimately feedstocks. For a while there, we had, you know, disclosed where it stood on CapEx and OpEx and logistics, but we had not, you know, reached conclusion with Neste. Part of our thinking all along has been, you know, over the long term, you know, not just in the short term, that we believe that the partnership between us will hit both of our strengths. They bring a lot to the table with respect to feedstocks. Obviously, we're in that market as well, but we think there's a synergistic effect from their participation. At the same time, as you think about it going forward, you know, we feel really good about capital discipline being an important part of our portfolio, and having them come in at the numbers that we've already publicly disclosed, we thought was a real good win for us and a real good win for Neste as well. We're excited about it, Manav. I will tell you that, you know, we're talking about a lot of other stuff together. I think that the two parties together can create more value together, and we're gonna continue to try and see if we can do that. Perfect. My quick follow-up here is, you guys mentioned some of the reasons Gulf Coast was a little weaker. Your MidCon assets are very strong and that capture was also slightly weaker. Help us understand, what happened during the quarter? What I'm really trying to get to is, if you look at the cracks and we look at your historical capture rate, and we go back to that in 2Q, you could have a massive 2Q MidCon earnings. Help us understand some of the reasons 1Q was a little weaker on capture in MidCon region. Thank you so much. Manav, it's Maryann. You know, maybe just sorta overall when we think about the capture, and then I'll come back to MidCon just in general. A couple of elements, you know, that really impacted our quarter, and that, you know, largely our light product and secondary product margins narrowed during the quarter. You know, that's typical, as you know, in a rising price environment, and then obviously secondary product margins, you know, certainly in this price environment as well. We also had some inventory builds in the quarter. Of course, you know, we use certain derivatives that to manage that price volatility. You know, there are a few things really that impacted the quarter. MidCon was a bit stronger than it was in the first quarter. You know, excuse me, the second quarter. That's really a key driver as we look at the capture rate overall for the quarter. Manav, it's Mike. I'm just gonna add, you know, everybody, you know, puts a lot of emphasis on capture, and everybody knows I'm not the biggest fan of that metric for a lot of the reasons that, you know, you start to see the volatility that happens in the quarter can bounce that around a little bit. Often we're asked the question, should we plan on about 100% capture? You know, one of the things I think people should keep in mind is, you know, we're in a different environment than, you know, I'll call normal. You know, if crude was $70 or so, somewhere in that range, you know, the impact of secondary products would be a lot different than if, you know, crude is at $100 or $110, et cetera. I think you've gotta keep that in mind when you look at that particular metric. You know, those factors come into play. You know, Brian mentioned earlier backwardation, you know, to Doug's question on the Colonial Pipeline. I mean, we're seeing some very unusual times where we're at the start of the gasoline season, yet we're seeing extreme volatility with distillate cracks where they are, backwardation where it is on the distillate side of the equation. All those things come into play and hit that metric. I'm always leery, you know, it bounces to one number, but there's a lot of inputs that come in and out, you know, to make that number what it is. Thank you. Our next question is from Prashant Rao from Citigroup. Hi, thanks for taking the question. My first one, I wanted to ask on the crude side, given all the shifts going on and as Russian product moves out of the market, I was curious about how the changes in feedstock availability might affect product yields? I'm asking that question really in the context of previous questions that have been asked already on this call about, you know, capturing stronger distillate crack. Also when you think going forward, you know, gasoline demand picking up into summer driving season and how you balance, you know, max distillate versus max gasoline production, the impact that any feedstock availability changes could have on that, and maybe how that plays out, you know, through the rest of the year, if you kind of play the tape forward? Rick, you wanna start with the crude outlook? Sure, Mike. Yeah, Prashant. It's an excellent question. There's a lot of moving parts in the world right now, especially around feedstocks. You know, from our perspective, though, when you look at our Pad Two, our Pad Three, and Pad Five presence and the avails that we have at our fingertips, we uniquely have not seen that big of a shift in the avails that would directly affect yields, meaning we're able to get whatever Brian Partee and the marketing team are ordering up. So I'll state that as one. Two other items probably to call out related to feedstocks, Prashant, is, as you know, we were a small buyer of Russian crudes. Unlike some of our peers, we feel that's a competitive advantage, especially in this environment. With our small presence in that Russian crude category, we have seen very little impact. Then lastly, just to call out to the SPR release because that is incremental to the feedstock market. A couple of things on that front. We applaud the U.S. government for being proactive and for really taking quick action in a meaningful way for a prolonged period of time. We believe that will help not only the U.S. consumer, but us as buyers of feedstock. We at MPC stand to you know be in a good position from the releases as we have two of our largest assets in Garyville and GBR really in the backyard of the SPR caverns. Hope that gives you some color on the feedstocks front. I'll toss it over to Brian for any comments on yields and products. Thanks, Rick. Yeah, Prashant, just a couple comments as we think about the gas and distillate dynamic playing out currently. We're obviously at extreme levels, but at the end of the day, this is very much a normal operations environment for us as we think about value chain optimization. Whether there's a penny or a dollar differential between gas, distillate, jet, any of the other core products, we're constantly optimizing across our plan as we look out forward, as we look within the month, within the week, within the day. Ultimately, we're running the system to meet the demands of the market. Clearly, in this environment, the market is sending us a really strong signal for more distillate. Ray mentioned earlier about, you know, our distillate hydrotreaters running them in max mode, that's, you know, to capture the current market structure. We do expect to see, you know, a seasonal call on demand as we look forward to the summer driving season as we would typically expect. It's not really present in the market now if you look at the market structure because we're so strong here in the prompt on distillate. We do expect that to manifest here as we roll into the summer months. We're constantly optimizing and I just wanted to make that, you know, point clear that it feels very normal for our teams to be doing what they're doing to optimize to meet the market demands. Excellent. Thank you both for that thorough answer. A quick follow-up, probably for Marianne, on working cap, overall positive in the quarter. You know, it's pretty volatile, and I think most of us assumed inventories would be a bit of a headwind as you've called out. I was just wondering if you could give some color on how the components within that total working cap, you know, bridge shook out in R&M specifically? And then based on sort of your quarter to date, and current expectations, would it be reasonable to expect working cap at R&M or the overall working cap to continue to be a tailwind as we go forward? Yeah, Prashant. Maryann. Thanks for the question. You know, as you said, working capital in the quarter clearly was a source of cash, particularly as we saw crude prices rising. You know, we typically say that, you know, each dollar move in the oil price It's about a $55 million impact to our working capital, right? Yeah, in a rising price environment. You already stated it. We did have some inventory impacts. We would expect that not to be repeating in the second quarter. When I say inventory impacts, our inventory build. You know, one of the other implications as we see prices rising quickly, sometimes it has implications on the receivables because it's not moving as fast as the payables. In general, it's about a net 20-day payables position. As long as prices stay where they are, we would continue to see working capital in the second quarter as a tailwind. Obviously, it would reverse as pricing would change. Thank you. Our next question is from Phil Gresh from JPMorgan. Yes, hi, good morning. I wanted to ask one follow-up on the buybacks, a slightly different way. The first $10 billion had a big component of Speedway proceeds associated with it, and you've obviously extended it now to the $15 billion. The second quarter run rate continues to be at a very high level. And I'm just thinking as we move forward and we lap the Speedway proceeds component of this, is there a way you're looking at the more normalized level of return of capital, some kind of framework, percentage of cash flow, or management to some kind of minimum cash balance? Obviously, you still have a lot of cash in the balance sheet. I'm just trying to think through the moving pieces there. Yeah. Certainly. It's Maryann. You're right. We've got a $15 billion authorization in total, right? About $7.5 billion remaining. We stay very focused on that commitment. As you know, we shared with you $10 billion no later than the end of this year. Based on this pace I shared, right, we should be complete with that here in the second quarter and working through our $5 billion secondary or second repurchase authorization. With respect to our plans going forward, we're certainly looking at a series of things that we would share with you around how we would think about in a more normalized balance sheet as we get to that position post, right, the using the proceeds from the Speedway sale. You know, as you know, cash is fungible, and we certainly think about it in that way. We are looking at your series of things as we talk about our capital allocation, and would expect to come back to you with, how we would allocate cash between share repurchase, dividend, obviously our growth capital along our lines of our capital allocation framework shared with you previously. Okay. It's Mike. I just wanna add that, you know, I've said many, many times that this business is predominantly a return of capital business and a return on capital business. You know, it's up to us to look at the opportunities that we have from a capital standpoint. I hope the market realizes that we're gonna stay very disciplined, you know, looking for solid returns, but we do wanna grow earnings. At the same time, we feel strongly that, you know, return of capital is a major component of what we're trying to accomplish here. Sure. Is there a minimum cash balance, Maryann, at these types of oil price levels you're thinking about? Has there been any adjustment to that thinking? Yeah. I think, you know, we shared previously about $1 billion is where we feel comfortable. You know, we've looked at a lot of scenario planning. We had a lot of experience as we looked at sort of some of the toughest volatility and liquidity periods during the pandemic. You know, at one point in time, we had initially talked about potentially holding another $1 billion, but we're comfortable right now that $1 billion should be sufficient for us going forward. Got it. My follow-up was just on RD fundamentals, in particular LCFS prices. You know, we've continued to see some pressure there. Lot of moving pieces on the deficits versus the credits, but just any thoughts that you guys have as you've kind of dug into this dynamic? Phil, this is Brian. I'm happy to take that one. Yeah, you're probably looking at, you know, the Q4 CARB release late last week on the overall bank, and certainly in Q4 with a tremendous build, almost one million credits. The bank's at a pretty high level on the heels of slower demand in Q4 versus Q3 out in the West Coast. Overall demand was off about 6%. RD production and imports was up about 9%. The total pool right now out in the West Coast, you're looking at about 8% bio, 30% RD. The last factor driving the dynamics in the prompt is certainly the electric credit generation, which was up about 5% quarter-over-quarter. Now all that being said, you know, you do have new programs coming into the market, Oregon and Washington and Canada. You know, we expect these to exert counter pressure over time, you know, to be a different placement option and alternative versus California. But that being said, CARB is very committed to the program and having a workable program. In the very prompt, you know, at the end of the day, LCFS is proportionally one of the smaller value drivers in the overall proposition if you think about the D4 value and the BTC. Current D4 values in the $70-$80 range really are helping to underpin the overall economics. It's a bit ironic if you think about the current environment with ag and commodities, you know, flying up. At the same time, we have low LCFS pricing. You know, we're in that operating environment with Dickinson right now, and we're quite happy with what we're seeing on the return side out of our production out of Dickinson. You know, I think it bodes well for the resiliency, the through cycle resiliency for RD over the long term. I appreciate it. Thank you. Thank you. Hey, hey, Brian. Bill, that was a pretty good recap for Brian. I'll just add a few points. When we look at renewable diesel, it's a multi-variable equation. There's really four regulatory drivers, and Brian talked about a lot of them, along with the flat price of the renewable diesel and the feedstock price. We're trying to optimize every day at Dickinson today to maximize profitability. I will say the biggest thing that we found success in at Dickinson, we'll take forward to Martinez is the optionality on the feedstock, the ability to, you know, to pivot to the feedstock that makes the most sense for us. You know, we have pretreatment capabilities at Dickinson off-site that allow us to do that. At Martinez, that's part of the base CapEx for that plant. You're right. Right now, LCFS pressure on that, but there's a lot of things that are within our control that we'll work to optimize. Thank you. Thank you. Our next question is from Paul Cheng from Scotiabank. Hi, good morning, everyone. First, I might wish you a speedy and full recovery after your treatment. Also, Maryann, I just want to make a request, if possible. Some of your larger customers, like ExxonMobil, they start disclosing the timing benefit or the timing loss related to the derivatives and inventory in their presentation or press release in each quarter. I think all your investors will be grateful if that's something that you guys will consider. Paul, I apologize. Your line's cutting in and out a little bit for us here, so unfortunately, we weren't able to hear that. I did hear you say something that said investors would like to see something in our financials. Right. Maybe we could take that one offline, and then if you send us a note. Just so you know, just go a little slower 'cause your line is cutting in and out with your question. Okay. Can you hear me okay now? Yes, that's better, Paul. Let me just repeat my request. Say, some of your larger customers ExxonMobil, they've been disclosing the timing impact from derivative and inventory in their press release. I think your investor will appreciate that if you guys consider providing those information. In terms of- Thanks, Paul. It's Maryann Mannen. Oops, I'm sorry. I apologize. Please finish your question. Sorry. Sure. Now, my question is on triple one. When one of your competitor has said, when the product market is in backwardation, that will also impact the margin capture or your ability to realize the pricing on the product screen. So just want to see that, how that impact in your system when we are seeing in a backwardation curve. Also that some of your competitors seems like they all have pretty large inventory or derivative timing losses in the quarter. So Maryann, you also mentioned that you have some of them. Can you quantify it? Thank you. Oh, it's Mike. First of all, thank you for your comment. It's a multi-part question, so I'm gonna start, and I'll let Brian talk a little bit about structure. I'm gonna repeat a little bit of what I said earlier, right? I know everybody likes that metric of capture. You know, if it wasn't for Kristina, I probably would not be a fan of putting it out there, but she keeps saying how important it is for everybody to see that metric. There's so many things that play into that. One that doesn't normally occur to the extent that it's occurring now is the structure. You know, the backwardation that we've seen. I mean, if you look at the screen right now on distillate, since we've talked a lot about distillate, you know, month one to month two backwardation is pretty strong, especially for this time of year. We would never normally think along those lines. That comes into play as we're moving products, and I'll let Brian talk a little bit about it. He mentioned it earlier as far as, you know, a prompt barrel versus something that's got to travel on Colonial. Then Mary mentioned earlier, too, as flat price gets higher and higher, you know, you end up with this phenomenon where secondary products don't keep pace with flat price of crude, and you end up with an impact there as well. There's a lot of things hitting. In this quarter, particularly, as Doug mentioned earlier, you know, it's a pretty volatile quarter. January versus February versus March was pretty sizable in volatility as to what we were seeing in the market. Anyway, let me let Brian make a comment towards structure if you wanna add there, Brian. Yeah. Thanks, Mike. Happy to jump in. Yeah. There's two key elements the way I think about market structure, Paul, to your question. So the first, and Mike alluded to this, is really in a rising price environment, which is the phenomenon that we largely saw in the first quarter. So in a rising pricing environment, we do see compression. We often call it out obviously in the secondary products, but it's also prevalent in the primary. So the racks effectively do not move up as efficiently in a very short period of time. Now, they catch up over time. Then you do enjoy the benefit on the back end of that. As prices come off, they'll go slower. So that's one dynamic, a timing element. Specific to backwardation, though, with the pronounced backwardation in the marketplace here today, the way I think about it's effectively transit time. From the outside looking in, you look at a market price point today, and I think the way most people run their models is they assume a ratable type of operation, and that's just not how our system or anybody else's system works. There's transit times and moving barrels to market, whether they're going on a truck or a pipe or rail, it really doesn't matter. In a backward market, if you're looking at a ratable program at $2 today and the market's fallen off $0.50, by the time you get it to the market, your actual realization is going to be less. In that environment, the obvious signal is to sell in the prompt and to not sell out on the curve. That's really the phenomenon that's been playing out in the marketplace today, particularly on distillate, as there's been steep backwardation and a big call to sell more in the prompt. Thank you. Thank you. Our next question is from Connor Lynagh from Morgan Stanley. Yeah, thank you. Obviously, sustainability of the current environment is a question that most people are struggling with right now. Sort of two parts to this question, but I'm gonna ask them both at once here. On the first side, there's obviously been significant disruptions in crude and product markets from the events in Russia and Ukraine. Do you feel that what's happening, particularly in distillate markets, is directly a result of that? Or do you feel that there is a broader issue at play here in either the refinery system, the inability to raise runs or substantially higher demand than expected? The second part of that is, as we move into the summer months, the expectations are that you'll continue to see upward pressure on demand. Do you guys have any concerns, or do you have any sort of framework for thinking about demand destruction? Thanks. Connor, it's Mike. I'll start. You know, first, to your point, geopolitical events, you know, always have an impact on supply and demand in the energy markets. You know, we're seeing it now in the current situation with Russia and Ukraine. If you go back in time, pretty much all geopolitical events tend to have some impact to energy. That's an ongoing thing. The point you made about sustainability, you know, that's kind of in parallel to what's happening as well. You know, people are starting to think about how do they, you know, position their portfolios as we have and put out their goals in sustainability. You know, we're very proud. We think we're leading in that area in certain regards. At the same time that we're trying to supply the market because obviously it's a very tight inventory situation. As Ray mentioned earlier, you know, we're pushing back some turnarounds. We're trying to maximize production as best we can in the short term. I mean, at the end of all this, Connor, my word to the team all the time is, you know, let's worry about what we can control. You know, there's a lot of things out there that we don't control, and we stay attuned to them, but we try and bring it back to what we do control. In the short term, what we do control is trying to maximize production, you know, into the marketplace, and that's what, you know, Ray and the team are trying to do. Just on the second part of that there, on any risks to demand destruction. You know, are you guys seeing any evidence of that, based on, you know, your interactions with customers or anything like that? Is there a price at which you think that certain areas of the economy can't tolerate the product pricing? Yeah. Brian, you wanna take that? Yeah, sure, Mike. Yeah, so Connor, maybe a couple of comments to build upon what Mike just stated. You know, there is some fundamental support and premium in the marketplace right now. But there's also a degree of uncertainty premium based on what's going on over in the Ukraine. So I wanted to make that point, that there's two things that are, I think, moving the market. One is just the pure fundamentals, and I'll get into that in a minute. But there is an uncertainty premium right now that's penetrating the market. From an overall macro perspective, though, the outlook is this: We've got really four positives working for us or tailwinds. We've got the demand recovery upside coming out of COVID, predominantly on gas and jet. We've got very low inventory positions both in the U.S. and around the globe. We also have delayed turnaround and major maintenance on a lot of the refining system, both domestically and internationally. That, too, will pressure utilization over the cycle here. As you think about some of the closures that we've had during COVID, that also is providing fundamental support to this current market dynamic. Now, on the other side of that, there's three, I'll call them uncertainties. You know, new additions to refining capacity is an example. I think with supply chain disruptions, labor disruptions, the disruption economically during COVID, there's a little bit more uncertainty on new addition refining capacity coming into the marketplace. I mentioned the Russia and Ukraine situation, but that's likely to pull some supply away from the market, more so than the other. Then the last thing that's a bit of uncertainty, maybe specifically to your question, is the global economic outlook. Certainly, whether it's fuel pricing or, you know, any goods and services, we've had very broad inflation, and that's something that, you know, we're keeping a watchful eye on, watching the demand dynamics. All that being said, we think there's, right now, a slight balance between the headwinds and tailwinds, and it's really difficult to tell which way the market's gonna break. At this ten seconds, it feels like we're pretty balanced and more optimistic than not as we look forward through the next quarter and beyond on overall demands. Thank you. Our next question is from Theresa Chen from Barclays. Hi there. Thanks for taking my questions. First, I wanted to revisit the discussion on regional balances, product shifts, and the general tightness in PADD One. I believe years ago, you had underwritten some pipeline expansions to move product from the MidCon to PADD One from that Eastern Ohio market eastward. At the time, I believe it was a seasonal movement. I was just wondering, given the structural tightness that we're seeing in PADD One going forward, is there ability to eke out additional capacity along that corridor to potentially s ee additional tailwinds for MidCon capture. Brian, do you want to take a stab at that? Yeah. Yeah, happy to, Mike. Yeah, Theresa, to answer your question, there's been a number of pipelines in that corridor that traditionally flowed, you know, out of New York Harbor into the MidCon that have since been reversed. There's been some incremental capacity added here in the last year that also is helping to facilitate that move. You know, ourselves, as well as the broader market, are definitely taking advantage of that capacity. The arb is effectively wide open in the current market dynamics today to transport barrels into Western and Central Pennsylvania. We also see actually trucking opportunities, if you think about our position in Eastern Ohio to truck into the PADD, you know, as far into Western New York as an example for some specialty grades. Yeah, the market's working, the market's efficient, and we are finding more and more opportunities to move that way. Thank you. Shifting to the Martinez project, I just wanted to clarify how the JV agreement works in terms of feedstock procurement. Will it be done independently between the two partners or together? Can you just explain more about the synergistic aspects of feedstock procurement there? Also, Maryann, if you could provide, you know, how much capital has been spent out of the $700 budgeted for this year to date. Theresa, it's Mike. On the feedstock question, you know, what we said last time is we're gonna provide more color on the dynamics around the feedstock and who does what, et cetera. But we wanna wait till we get the JV closed. We're hoping that is very shortly. You know, as Ray mentioned, we're very close on the permitting side, and assuming that follows through, then we'll get to a, you know, closed JV. At that time, we'll give a little bit more color on the feedstock dynamics. Theresa, it's Maryann. You know, to answer your second question, I think on, you know, the allocation of capital and how it's been spent on the $1.2 billion to date. In 2021, we've spent roughly just under $300 million. That's in 2021. If you look at 2022, in our capital plan, we estimated roughly $700 million in total. Again, depending on, you know, how all that project, you know, it gets outlined for 2022, we would spend roughly half of that. MPC would have about $350 million of that $700 million, and Neste the balance obviously at $350 million. Then obviously, that would give us about $200 million ± remaining to complete the project in 2023. Thank you. Thank you. Our next question is from Jason Gabelman from Cowen. Hey, thanks for taking my questions. I wanted to clarify a statement made earlier just about the backwardation impacts to your margin, just the diesel backwardation that you're seeing. Was the point there that on a lot of your barrels that you're actually not receiving the diesel price that we see in the prompt month, but it's actually the diesel price in the one month ahead? And if so, kind of what percentage of your product is exposed to that? And then my second question, on the Neste joint venture. You know, you mentioned that there's potential opportunities to grow in the future. I wonder if MPC would be open to participating in renewable diesel plants or other biofuel endeavors outside of the U.S., or if your focus is just within the country. Thanks. Brian, you wanna start and then I'll finish up? Yeah, sure. Yeah. Jason, as a point of clarification on the backwardation, it's really dependent on the mode of delivery. It's really about I made the comment on the cycle time or delivery cycle time, it's different depending on each market. An export as an example has a very long delivery cycle versus a spot sale. I'll leave it at that. Won't go into the particulars of the percentage of our book and what they're under. It's every mode of delivery is different. Jason, it's Mike. I would just add, obviously as sellers we're trying to maximize the prompt, and as buyers, people are trying to buy down the curve as a general rule. So you have that yin and yang going on. Like Brian said, every situation is unique. Backward markets tell you that you have tight inventories. That's ultimately what backwardation is all about. It says that inventories are tight and product availability is tight. With respect to your second question, yeah, we're not gonna speculate out in time with Neste, but I will tell you that, you know, the effort to get to this partnership was long. You know, the team, David Heppner headed it up inside our shop here and worked with the Neste group for a long period of time. One of the biggest things that I believe is important as a result of it was the mutual respect each company had for each other and common goals that were setting for each other. I think it is a nice platform for us to continue to look for ways that we can do business together. That was really important for us as we were working through this, very similar to when we've entered other partnerships. One of the things that's most important to us is, you know, will the partnership endure the test of time? You know, JVs are difficult in general, and you need to be really comfortable at the start of a JV that you feel that you have the right partner. We feel that way with Neste with respect to Martinez. Great. Thanks for the answers. Thank you. That is all the time we have for questions. I would now like to turn the call back to the speakers for closing remarks. Thank you for your interest in Marathon today. Should you have additional questions or would you like clarification on topics that were discussed this morning, please reach out and the team will be available to take your calls. Thank you for joining us. Thank you. This does conclude today's conference. You may disconnect at this time.