Welcome to the Marathon Petroleum Third Quarter 2014 Earnings Call. My name is Vivian, and I'll 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 Mr. Tim Griffith. Mr. Griffith, you may begin.

Okay, thank you, Vivian. Welcome this morning to Marathon Petroleum's Third Quarter 2014 Earnings Webcast and Conference Call. The synchronized slides that accompany this call can be found on our website at marathonpetroleum.com under the Investor Center tab. On the call today are Gary Heminger, President and CEO; Don Templin, Senior Vice President and CFO; Mike Palmer, Senior Vice President of Supply, Distribution and Planning; Pam Beall, Senior Vice President of Corporate Planning and Government and Public Affairs; and Tony Kenney, President of Speedway. We invite you to read the Safe Harbor statements on Slide 2. It's a reminder that we will be making forward-looking statements during the presentation and during the question-and-answer session. Actual results may differ materially from what we expect today. Factors that could cause actual results to differ are included here, as well, as in our filings with the SEC. Now I'll turn the call over to Gary Heminger for opening remarks and highlights.

Thanks, Tim, and good morning, and thank you for joining our call. We are pleased to report strong results for the quarter with $672 million of net income in the third quarter. The efficiency, flexibility and optionality in our integrated downstream system enabled us to continue capturing opportunities in the markets we serve. Our ability to supply refined products to the markets of greatest value continues to serve consumers and our shareholders well. Speedway, our company owned and operated retail system, achieved record results for the quarter. This was particularly impressive because they achieved these results while working to close the Hess retail acquisition, which occurred on September 30. This expansion makes Speedway the largest company-owned convenience store chain in the United States by revenue. Speedway's consistent ability to generate strong merchandise margins in the store will provide great synergies with a strong volume that Hess locations have historically experienced. We are confident we can leverage these potential synergies further as we introduce Speedway's focused merchandising approach to these 1,245 locations. We're also pleased to welcome our new employees to the Speedway family and are eager to expand the relationships with the new customers along the eastern seaboard, who will come to know us under our Speedway brand. Return on capital continues to be an important element of our strategy and our activity in the third quarter underscores this enduring commitment. We returned a total of $442 million to our shareholders during the third quarter with $301 million coming in the form of share repurchases. Don will talk a little further about our capital return activity over the last 12 months, but we continue to have one of the highest effective capital return yields in our competitor group. We are also announcing plans this morning to significantly accelerate the growth…

Thanks, Gary. Slide 6 provides earnings both on an absolute and per share basis. Our third quarter 2014 earnings were $672 million compared to $168 million in the third quarter of 2013. Third quarter 2014 earnings included pretax pension settlement expenses of $21 million, while the third quarter of 2013 included $23 million of comparable expenses. Earnings per diluted share were $2.36 per share for the third quarter of 2014. We reported $0.54 per share for the same period last year. The bridge on Slide 7 shows the change in earnings by segment from the third quarter of 2013 to the third quarter of 2014. The primary driver for the change was the increase in refining and marketing segment income, which I will discuss shortly. Items not allocated to segments include $11 million related to acquisition costs for the Hess retail operations. As shown on Slide 8, refining and marketing segment income from operations was $971 million in the third quarter of 2014 compared with $227 million in the same quarter last year. The change from 2013 was primarily due to higher product price realizations and the improved crack spreads, partially offset by higher direct operating costs. As indicated in the earnings walk, the higher LLS 6-3-2-1 blended crack spread had a positive impact on earnings of approximately $379 million. The blended crack spread was $8.70 per barrel in the third quarter of 2014, compared to $6.52 per barrel in 2013. The increase in LLS prompt versus delivered also had a favorable impact on earnings that was largely offset by backwardation in the market. Direct operating costs increased quarter-over-quarter due to higher turnaround and maintenance costs as well as higher natural gas prices versus last year. The impact of higher product price realizations is reflected in the $548 million change…

Thanks, Don. As we open up the call for questions, we ask that you limit yourself to one question plus a follow-up. [Operator Instructions] With that Vivian, we're prepared to open up the call for questions.

[Operator Instructions] And our first question comes from Ed Westlake from Credit Suisse. Edward Westlake - Crédit Suisse AG, Research Division: Congratulations on the strong earnings, and thanks for the slides on MPLX visibility. Just a quick question, I'm sure I could do the math. But what type of drop-downs are you assuming, say on an annual run rate, say from here through to 2019 to drive this GP distribution, LP distribution growth?

Don, you want to handle that?

Sure, Ed. We haven't given specific drop-down guidance. I guess, what we are showing here is that over that time period, we would expect to grow the LP distributions by an average compounded annual growth rate of 25% and as we showed in the slide deck, that has an even more powerful impact on the GP distributions through our IDR ownerships or our IDR cash flows. But we've not given a specific guidance on individual drop-downs or the timing of those. Edward Westlake - Crédit Suisse AG, Research Division: And then on Slide 19, you've got the $1.7 billion of currently identified eligible MLP EBITDA sources, which presumably is part of MPLX as well as MPC. Maybe clarify whether that's held at the parent as opposed to the current MPLX EBITDA stream. And then does that include any growth or is all of the growth that you're obviously investing for on top of that $1.7 billion?

Sure. The $1.7 billion, Ed, reflects the $800 million that we had originally pointed to at the time of the IPO of MPLX. So it would have included pipeline holdings as well, but there have been some additions there. Then there's been about $300 million of growth projects that we've identified and elaborated on over a period of time and that would include the investments in Sandpiper, Southern Access Extension, the condensate splitters. That broadly adds another $300 million. And then the fuels distribution is really incremental to that. For this purposes, we value that at approximately $600 million, which is 20 billion gallons at a $0.03 average. Edward Westlake - Crédit Suisse AG, Research Division: And MLP of the fuels distribution business potentially?

I mean those are MLP-qualifying EBIT. Those -- that's MLP-qualifying EBITDA. And it's -- our view that we want to continue to drive value for the MPC shareholders by making sure that we're maximizing that, which can be dropped into an MLP. Edward Westlake - Crédit Suisse AG, Research Division: Very clear.

Ed, let me add to that. Our strategy was MPLX. And our whole midstream system is that, just like a production company looks at reserves, we want to keep a very strong reserve base of eligible assets that can be dropped into an MLP. But secondly, we plan to continue to have very strong organic growth from projects inside the company, very strong third-party growth as we continue to invest in the projects like Cornerstone that we've talked about. And then we've geared up and have been very active looking at projects in and around some of the production fields and other gathering type systems that could make sense to be bolt-ons to our system. So we're not just going to be limited. This is not a drop-down story, this is going to be an aggressive growth strategy. Yes, we see this -- the MLP business continues to consolidate.

And our next question comes from Doug Terreson from ISI Group.

Gary, this -- the retail transaction appears transformative for the business, for that business rather, as you indicate. And I have a couple of questions about that. First, how was the transaction financed? Meaning last quarter, I think we talked about available cash and debt. And then second, with your EBITDA per store much higher than Hess and the other peers too, you guys seem justifiably enthusiastic about the outlook for the combination. So now that it's closed and the team has had the opportunity to take a closer look, I want to see if you could spend just a minute on some of the financial or strategic opportunities that appear most obvious to the team and 1 to 2 guys are most excited about as you go through the integration process?

Sure Doug. Let me ask Don to take the first part, Don or Tim, to handle the financing piece. And I invited Tony to be on the call today, who runs all of Speedway. And I'll have Tony take the strategic and the synergistic questions. So Don?

Sure. Doug, at the end of the third quarter, we had about $6.3 billion of debt and the increases of debt during the quarter were primarily in 2 areas. We had $700 million term loan and then we issued $1.95 billion of senior notes. So the transaction was largely funded with debt, but we also had available cash that we used.

As far as the opportunity with the assets, what we see and you correctly pointed out, Doug, the difference in the EBITDA between the Speedway assets and the Hess assets, all of that is due to the difference in the performance inside the store. So from a light product perspective, Hess had always performed well on the volume and the margin outside. So the opportunity really is upgrading or enhancing the performance inside the store. And what really comes into play there is some of the elements that we bring in terms of some of our merchandising, and specifically, the loyalty program that we've had in place for over 10 years on the Speedway side. So we think while leveraging some opportunities in food service, general merchandise, in combination with partnerships with our key suppliers and consumer product companies, with our loyalty program is going to give us an opportunity to leverage the traditional Speedway performance into the Hess assets. So I think that's where the upside is. And along with that, we'll generate a number of synergies on those marketing enhancements.

Doug, just to let you know. We've been managing these for all of 30 days now. But what Tony and his team have learned is the administrative synergies that we have identified and some procurement type synergies, not getting into the marketing synergies that we expect due to the incremental merchandise sales. So just those that we identified, we're way ahead of what our first-year plan was and being able to capture synergies. So we've already identified significantly more than we had expected to achieve in the first year. So very pleased with how the transition has gone and how we're really starting up the operation.

And Gary, we can just -- I can tell by your tone over the past several months, you've gotten more and more enthusiastic. It seems like this thing's really pulling it in a positive direction.

And our next question comes from Evan Calio from Morgan Stanley.

Gary, great strategy shift this morning from midstream. It should begin to unlock some value for your shareholders. I know it's in line with your highest growth peers now. Can you discuss how you arrived at the new pace for distribution growth in the mid-20s over that 5-year period as you look at your potential? And then how does this stream of visible and less cyclical cash, less cyclical cash flow affect a potential pace on the buyback?

Sure. I'll take the first part and ask Don to talk about the potential buyback. We've been studying this strategy for quite some time. And with the Hess acquisition, this has always been part of our strategy with this acquisition that those assets should be able to be throw off eligible-type earnings. So we get -- got this transaction complete. And over this same period of time, we were doing this strategic study to determine what's the best way forward. And as I said in my speech that we believe now is the time. We believe first of all, we've recognized a significant underperformance, if you will in pull through that the market has not recognized in the assets of the company. And the question of how committed are we going to be to growing this MLP? I think this shows clearly how committed we are to growing this MLP. We've always been committed. It's just when was the right time to be able to bring all this together. So with the addition of the Hess wholesale fuels distribution, I'm talking about on top of the other 17 billion gallons that we already had, this was the perfect timing, we believe, to be able to highlight this and really to be able to communicate to the market how much value is underlining the value of MPC, but how fast we can grow MPLX and how fast therefore the GP should grow and we should get that pull-through back into the marketplace. And Don, do you want to handle the use of cash?

Sure. Evan, I think that we will continue to view the cash that would come back to us from both the drops and the distributions and the ownership of the LP units similar to how we do it now. I mean we are and have been very committed to achieving a balance between investing in the business and returning capital to our shareholders. And we would expect that, that will certainly continue. One of the things that is nice about having these drops is that you will generate cash that can continue to be redeployed in the increased growth and build-out of the midstream infrastructure. And while we would like, to the maximum extent possible, have projects funded initially from MPLX, there may be times, or will be times when a project may be bigger or the timeline over the cash profile might be longer than we can -- that makes sense for us to have at an MPLX initially. And we'll use that cash to invest in midstream, hold it at MPC until it is MLP-ready and then drop it in. So I view this as being a continual cycle here of getting cash that we can return to our shareholders, but also getting cash that we can continue to invest in the midstream and infrastructure build-out.

MLP clearly increases that, that cash amount. Maybe add some color specifically. I mean do you anticipate the drops that you laid out for cash or units or a combination of both. And secondly, do you see structures, other than taking units, that allow a capital gain deferral for some of your other MLPs have employed?

I think we will, for every drop that occurs Evan, we will certainly evaluate the tax implications of those. And we will, I think, continually balance making sure that we're doing them in the most tax efficient way with also making sure that we're meeting the business needs of MPC and MPLX. And if there's a need for cash, either to return it to shareholders or to invest in the business, we're more likely to take cash. If there is an opportunity to do something in a tax-efficient way, we might end up taking back units or more units. So I think it will be a fact and circumstance-driven decision versus sort of a philosophical or a policy around how everyone is going to occur.

That's great. Maybe one last one, if I may. It's somewhat related, but on your announcement that you and your partners are evaluating options for Capline. I mean while preliminary, do you see the need for reverse pipe of that size to the Gulf Coast? Or do you envision some coordinated project that would -- with other logistics that would move Canadian crudes into that Chicago market? Any preliminary thoughts there on how that might work out?

If you really look at this, this is just an announcement of a preliminary study. If you look at the Louisiana side of the refining sector, refining corridor in the Louisiana or Gulf Coast, you do not have an efficient manner to be able to get heavy crude down there. The Houston side of the Gulf is in great shape on pipelines. And we expect keystone will eventually be approved and we'll even be in better shape. So therefore, it opens itself the question, why not improve the logistics to the Gulf Coast. So this isn't a study to look at just Chicago. You look at the volumes that go south to north, and we were always going to need a good supply source from south to north to be able to feed the PADD II refineries. So this is a study to determine long term, does it makes sense to look at Capline in a different type of operation than it is today. And all of the things that you mentioned are on the table as we do this very detailed analysis.

And our next question comes from Paul Cheng from Barclays.

Just want to say thank you for adding those information about MPLX into your presentation, really helpful. Maybe I have a couple of questions. First, on MPLX, Don, from a financial standpoint, can you tell us that what is the kind of comfortable level the balance sheet could support in terms of whether it's an outside acquisition or that an internal acquisition dropped down on a per year basis? I mean is it a $1 billion a year? Or that you think it is going to be -- the balance sheet will be able to support bigger?

Well, I think the way we would look at the balance sheet, Paul, is by making sure that we have a good balance between issuing equity and maintaining a debt profile that we want to be investment grade. And so the way we think about investment grade profile would be to have a debt-to-EBITDA ratio of probably somewhere, managing to somewhere, no more than sort of 4x. So that's -- that is how we will look at and evaluate opportunities. And in a growing environment, when MPLX is growing quickly, our view around that 4x debt-to-EBITDA would be on sort of the last quarter annualized or a run rate EBITDA versus the last 12 months, just because you don't want to get yourself into a situation where you're getting -- you're incurring debt sort of at an acquisition date, but not giving any benefit for that EBITDA. So when I say 4x, it's really around a run rate EBITDA number. And we feel comfortable doing that because we believe that when something finds its way into MPLX, it is a revenue stream that's largely certain. And there won't be a lot of -- there's not a lot of volatility around commodity risk or something like that.

Maybe the second question is that for, maybe either Tony or Don, do you have a number that you can share after the Hess acquisition on the pro forma basis, the impact to your Speedway gross margin on the field and gross margin on the C store [ph] look like? And also Don, do you have the inventory market matter [ph] in excess of book and working capital and the long-term debt for the MPC C Corp level?

So long-term debt is 6., just under $6.3 billion. The excess of fair value over book value for inventory is $5 billion, and working capital is $2.5 billion.

The $2.5 billion is including cash or not including cash?

It is including cash.

Paul on the enhancements, I think what I would say is that with the synergies, and the synergies will cut across both the existing Speedway assets as well as the Hess assets, will enjoy some uplift in our gross margin inside the store from realizing those synergies. I don't have a specific number on that. We know what we've said publicly in terms of all of the marketing synergies in the deal. Year 3 run rate is $70 million in total, but I can't give you a split between how much of that is on the Speedway side and the existing Hess assets.

Tony, do you have a pro forma for the fourth quarter in terms of actual, if we just say, if you have closed the deal at June 30 and just 1 year, what will be the reported fuel margin and the C [ph] store margin in the third quarter, so that we can use it as a baseline to project forward?

Paul, I don't have that number. I've really not done any work around that. We're really just now beginning to integrate the 2 financial systems to understand exactly what that would look like, but that's all I could say about that now.

And Paul, as you know, we've never given forward guidance.

I just want to look at say on the actual -- on a pro forma basis, what is the baseline we should use?

Let us continue to get this transition under our belt and we'll see what we can prepare.

And our next question comes from Brad Heffern of RBC Capital Markets.

Sort of attacking on previous question slightly different way. Looking at the acceleration in MPLX. How much of that is due to faster drops? And then you also mentioned potential consolidation in midstream. Are you assuming some incremental acquisitions in order to sort of triple the EBITDA there?

So Brad, this is Don. When we did the modeling there, that is a projected EBITDA growth rate. And that was a projected EBITDA growth rate or distribution growth rate that we can easily support with the portfolio of assets that we currently have. Now that doesn't mean that we're -- in fact, we're very focused on growing organic projects, identifying the next big opportunity, identifying potentials for M&A that might make sense and be strategic to us, but we're very comfortable that we can support the growth rate that we've identified there solely with assets that exist at MPC. But knowing that we will certainly, over time, grow MPLX in other ways and that would be through organic means and through M&A.

Okay, thanks. And talking about Capline, is that in the EBITDA drop inventory number you typically provide? And if ultimately it was reversed, do you think that, that would have a substantial impact on the drop to you going forward?

Don, you want to take the first part and I'll take the second.

Yes. So currently we haven't indicated actual EBITDA from those types of assets, but the EBITDA from Capline right now would be not a significant number. And so to the extent there was a reversal and it was more fully utilized, I'm assuming that there would be incremental EBITDA that could accrue from that. But in terms of the numbers that we're showing here, there's a lot of other contributors that are probably more meaningful to that EBITDA number, Brad.

Right. Brad, the last part is it's too early to be able to put a forecast, but heavy crude from the Canadian region was available. There's substantial demand in the Louisiana refining corridor. Most of those refineries from Baton Rouge through Garyville and on are heavy refineries. So I think there could be a lot of volume that, that can go that direction someday. So we don't have any pro formas on what that is yet, but I think it could be a significant value.

And our next question comes from Paul Sankey from Wolfe Research.

Did you talk about the Garyville hydrocracker expansion? I guess we were wondering whether there would be a decision on that this year and if the CapEx would then be starting next year.

Yes. Paul. We have not discussed that yet. We will -- our plan that we've always been on schedule with is to make that decision sometime around end of the year to the first part of next year. We're just wrapping up our front-end engineering and design work that then drives all of the capital investment type final numbers. So we won't make that decision again until the end of the year. If we were to go forward, the in 2015, the capital would not be that significant in 2015 because it takes a -- we would finish up the detailed design and engineering and start some of the land excavation work and piling it in 2015 and '16. So really the bigger part of that CapEx will not come for a couple of years yet.

Understood Gary. Gary, on global oil markets, do you expect OPEC to cut production in the November meeting.

Well, I'm not close enough to OPEC to be able to give you a good answer on that. But the discussions so far, they've been very clear that they're not going to cut production this time. When you look though, a lot of analysis has been put out on countries such as OPEC. It would suggest that the majority of the countries need a higher price than is in the marketplace today in order to be able to support the budgets that they have. So I see -- I expect that the market's going to be continue to be volatile on the front end here. But based on lot of the discussion that's been going on, I would be surprised to see that there would be a change in the direction that has been stated so far.

Thanks. And then finally, the bigger issue is demand. We just heard Tom O'Malley saying he thought that yesterday's draws in inventories of products were extraordinary bullish for refiners. Can you -- it seems that the distillates market may be a lot stronger than people realize globally. Would that be -- would you agree with that? Could you also, just talk about you -- I would ask you this, firstly about your exports distillates and gasoline; and secondly, about the demand that you're seeing across your networks.

Okay. Mike Palmer, do you want to handle the majority of those questions?

Sure, Gary. Paul with regard to our exports, the third quarter was still very strong. I guess we probably see just a little bit of weakness in Europe and a lot of strength in Latin America. But we're still, if those record kind of level of exports and don't have reason to believe that ought to change.

And Paul, this is Don. The actual volumes were 299,000 barrels per day for the third quarter for exports. About 2/3 of that was distillate. The remainder was predominantly gasoline.

And gasoline demand coming back with low prices in your networks?

I think what we're seeing in October was that we're up slightly over 1% same-store gasoline demand.

And our next question comes from Doug Leggate with Bank of America Merrill Lynch.

I'd like to dig in a little bit to how the balance, if I may, on the MLP growth impacts the cost base of the refining business. It's obviously, we've had a very strong refining environment with the benefit of crude spreads and so on. But if we had to go back to a normalized level, let's assume it was not as high as we are currently. I'm just trying to understand what the priority is in the MLP drop-downs and the context of what it means for the cost base for the refining business. So I wonder if you could help me with that, starting first with the $450 million run rate? What does that mean for the cost basis of the refining business?

Great question, the way we have always modeled things, the way we've always done our business, Doug, is we've tried to transfer our prices at market. And the way we value those assets are all at market. So I don't think it changes from a market competitive standpoint. It changes any of those dynamics. Don, you were going to add something?

Doug, I wasn't exactly sure I understood what your question was around the sort of the impact on refining.

Let me try a different way, Don. So previously, before today, you talked about I think $1.1 billion of EBITDA, $300 million organic and $800 million within the existing system, so when you transfer that ratable EBITDA to the MLP, one has to imagine someone's paying for that. And that of course is, I'm guessing, is going to be a cost within your refining business. So I'm trying to understand where the transfer of cost takes place? And what it does to the base ratable stable earnings within the refining business, if you like. You see what I mean? Am I explaining that well or no?

Yes, so in terms of the EBITDA, clearly, that is embedded now within MPC on a consolidated basis. I mean one of the things that ends up happening is that, if you drop those assets down, you get paid a reasonable multiple already for those assets. And then at MPC, we continue to participate in a portion of that EBITDA stream, just based upon our LP ownership. So our view around the kind of a drop-off in EBITDA or the cost transfer, I guess that you're speaking with, is that it, it is not that significant. We get proceeds back to MPC, we will evaluate how to deploy those proceeds. And sometimes they may end up getting deployed into capital projects at refining that continue to grow the refining EBITDA. A good example, would be, as we continue to consider the ROUX project. So to me, I think this is all about a growth story rather than a story where we're just moving EBITDA from sort of one legal entity to another legal entity. This is about an opportunity to grow MPC and MPLX to be able to take advantage of the capital markets in order to be able to grow both our midstream, but the rest of our business.

Okay. I guess I'll take the details offline. I understand the IDP or the IDR benefit and all the rest of it. What I'm just kind of trying to wrestle with what happens in a down cycle for refining when you have got the added cost base. We can take it offline. My follow-up is that I may have missed this in your prepared remarks. On Slide 8 of the presentation, can you just quantify again, what the other gross margin, the of $548 million, what was that and what was absolute in the quarter?

Yes. We did not -- the absolute in other gross margin for the quarter -- just 1 second here. It's -- the absolute is $501 million, which was on our appendix, Slide 26.

What is that?

It's a combination of a number of things would be in there. That includes our product price realizations, it includes refinery gain, it includes our purchase for resale activity. We have not given any color on sort of the individual components.

Okay. I want to just go back very quickly, the $1.7 billion, is that inclusive of the original $1.1 billion or is that added to that? I assume it's inclusive of.

The $1.7 billion is the original $800 million plus $300 million of projects, which would be SAX, Sandpiper, Condensate Splitters and what not. And then the $600 million of fuel distribution.

And our next question comes from Phil Gresh of JPMorgan. Phil M. Gresh - JP Morgan Chase & Co, Research Division: First question was a clarification. I know you're talking about the uses of cash from the acceleration plan. With the leverage levels where they are, you've had a step function change with the Hess deal. Are you anticipating that we're just going to keep it at this new level moving forward? Or would some of that cash actually be used to kind of slowly delever the balance sheet for other opportunities, just your thinking around that?

Phil, our expectation is that we would continue to -- we're committed to maintaining an investment grade credit profile. So we would maintain -- would not go past a leverage model that would put pressure on that, but we're very comfortable with where our balance sheet is currently on a leverage basis. And we think it has allowed us to access some attractively priced capital. Phil M. Gresh - JP Morgan Chase & Co, Research Division: Got it. Okay. Second question is just on the gasoline markets. We're seeing a divergence in the fundamentals in the Gulf Coast cracks versus where we're seeing in the East Coast and Mid-Continent. So I'm just wondering if you could give a little bit of color what you're seeing there? And how you might expect that to play out in the fourth quarter?

Mike?

Yes. Gary. So Phil, I guess, what I would say is that, if you look at the gasoline market, it's kind of by region for most of the year. What you've really seen, I think, is that the Chicago area, the New York has been stronger than the Gulf Coast. And I think certainly, within the Gulf Coast, there is a lot more refining capacity to make gasoline than the region can absorb. And that gasoline must be exported to the other markets. And I think that's what you're seeing. So I think, from a macro standpoint, that's going to continue to be the case. The other thing that certainly happens is that during periods, during quarters, you get mini events that take place. You get pipeline issues, you get the refinery, planned maintenance as well as unplanned maintenance, and that can have a pretty significant impact on a specific region. And certainly, that's been the case. We've seen some refinery downtime in the Midwest region over the last several months, I think, that's contributed to margins. Phil M. Gresh - JP Morgan Chase & Co, Research Division: Understood. Thanks for the color. Last question is just on the retail side. I appreciate the color on how things are going early days. Would you say that kind of for now, you guys are mostly just focused on the integration of Hess as opposed to organic store openings and/or additional acquisitions within the retail business. I know you talked about Hess slowing the pace of your organic store openings. But it sounds like things are going well. So just wondering the growth side of that story.

As far as the integration, that's our #1 focus. But backing up from there, let me just say this, what was important was, as we transferred ownership and operations from Hess to Speedway, the most important thing was making sure there was no impact to the customer, and I think we have accomplished that. So as we move forward from there, then as day 2 and beyond progresses, we're looking to be able to integrate both the Hess and Speedway operations to take advantage of the synergies that are available there and the capital that we'll spend this year, as far as new store openings, we did have an organic growth plan in the base Speedway business and we're continuing to execute on that. We're probably going to complete approximately 60 new store or rebuild openings this year. So we're balancing the focus on both the existing or the base Speedway business as well as the integration, the reidentification and then eventually some remodeling of some of the Hess assets to bring the entire chain together under a common brand. Phil M. Gresh - JP Morgan Chase & Co, Research Division: Got it. Okay. And then on the acquisition side of things?

We don't comment on what we may or may not want to do in that arena. I think it's going to be opportunistic. We'll look at things, but beyond that, probably don't have much I can add to that.

And our next question comes from Ryan Todd from Deutsche Bank.

A couple of follow-up questions. I know it's kind of theoretical at this point, but on Capline, if the decision were to be made following the study about a potential reversal, what would be the timing in terms of how long it would take to get that done?

Ryan, it's just way too early to look at that, including in the study. First of all, they're going to do a market study, supply demand study. Then if it would point towards -- let's look at from an engineering standpoint, what it would take. We've already done some work, but a lot of hydraulic analysis work needs to be complete. So we're not far enough yet that I can give you a good timeframe.

Okay. And another follow-up on the retail side on the MLP and the retail eligible income. The question is I think it sounds like the EBITDA is purely kind of throughput volume x margin on the retail business. Does that include at all any of the rental income or leasing income from the stations? And then on the -- would we expect, if this were eventually to make its way into an MLP, would it be a stand-alone MLP? Or would you drop it into MPLX?

Don?

The calculation is truly a volume times $0.03 per gallon. So we're primarily focused in that analysis on -- or that estimation on refinery to rack volumes. It does not include anything that would be incremental to that. So it's 20 billion gallons times $0.03. With respect to sort of plans for how it gets dropped, when it gets dropped, we are going to get continue to evaluate the timing and what makes sense. And I guess, our view is, it's just increased our portfolio of opportunity. The opportunity set is now bigger and gives us even more confidence in our ability to really grow MPLX, so that we can participate in this midstream infrastructure build-out.

Okay. And I guess, if I can just one final one actually on the refining business. Your gasoline yield was down to probably the lowest level that we've seen in quite a while in the quarter. Is this a sustainable trend? And I mean I think you were at 45% yield in the quarter. And if we're moving in that direction, can you continue to reduce that yield and shift more towards distillate further going forward? Or how should we think about that going forward?

This is Rich Bedell. I think probably that's more a reflection of some of the turnarounds that were going on in the process units that were offline for turnaround than anything else. There hasn't really been a fundamental shift in our yields. We have been increasing our distillate percentage through some of the projects and that will continue on into some next year, but nothing that would have swung those volumes other than maybe turnarounds.

And our next question comes from Roger Read from Wells Fargo.

I'd like to come back a bit on the Capline. Can you walk us through the ownership structure and what the decision-making process is there? I understand, too early to say what the timing would be and all that, but how exactly are decisions made there, what's your influence is , et cetera?

Right. There are 3 owners BP, Planes and Marathon. And in order to be able to make a change of service, like this study is going to be done, it takes all 3 to approve such change.

Okay. And then coming back to the other gross margin that Doug asked about earlier. Obviously, it was a big component of the Q2 out performance and Q3's overall performance. Any guidance you can give us at this point? I know you're not big on guidance, but maybe some help you can give us on how to think about that kind of performance as we look forward, not just to the fourth quarter, but also to next year, is there some seasonality to that number? Is it just a function of market conditions at any given moment? Maybe any color you can offer us on that would be helpful?

As Roger, I guess, what I would say is both the second quarter and this quarter, the comparable periods last year included some noise around sort of the RIN impact on the market. You'll recall that we use market indicators that start with the 6-3-2-1 crack and we try to build to it. One of the reasons that we wanted to show and have been showing a sequential walk is to maybe give a little bit of color or maybe the absence of a really big green bar or change quarter-to-quarter would suggest that maybe the unusual circumstances existed last year as opposed to the unusual circumstances existing this year.

So if we were to compare to 2012, we might not see such a large green bar. Is this the other way to think about that?

That might be -- I have not done that, but that might be another way to do it. We are also growing our portfolio and our sort of reach every year as well. But I think '13 was a little bit abnormal, and so that's why you're seeing maybe the big differences.

Okay, that's helpful. And then the last question on the acceleration and the MLP, whether it's internal drop-downs or something on the other side. What would you look at in terms of acquisitions? I mean, should we think of something that's a fairly significant step out? Or is it -- you want to kind of stick close to your knitting? Or you want to something close to the assets you already hold?

Roger, it's too early to -- and we don't comment on M&A activity, but what I said in my script was, we expect to be a very big player in the -- for the development of the North America oil and gas transformation and renaissance. So and that includes all liquids, not just oil and refined products, but also the natural gas and LPG markets. So we have the capacity, it's from an operating and engineering standpoint, to operate in all of those different businesses. So we plan on being right on the forefront of that development.

All right. Casting a wide net and now we are all going to be MLP analysts as well.

There you go.

And our last question comes from Allen Good from MorningStar.

[Operator Instructions] I'm not showing any further questions. I'll now turn the call back over to the speakers for closing remarks.

Okay. Thank you, Vivian. Well, we want to thank everyone for joining us on the call today and your continued interest in Marathon Petroleum Corporation. If there are additional questions or if you would like clarifications on any of the topics discussed this morning, Gary [ph], and will be available for questions. Thank you for joining us.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.