Welcome to the Marathon Petroleum Corporation Fourth Quarter 2015 Earnings Conference Call. My name is Katie, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Please note that this conference is being recorded. I will now turn the call over to Lisa Wilson, Director of Investor Relations. Ms. Wilson, please go ahead.

Thank you, Katie. Welcome to Marathon Petroleum's Fourth Quarter 2015 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; Tim Griffith, Senior Vice President and Chief Financial Officer; and other members of MPC's executive team. We invite you to read the Safe Harbor statements on Slide 2. It is a reminder that we will be making forward-looking statements during the call 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 there as well as in our filings with the SEC. Now I will turn the call over to Gary Heminger for opening remarks and highlights. Gary?

Thanks, Lisa, and good morning to everyone. Before I begin, I want to take the opportunity to introduce Lisa Wilson, our new Director of Investor Relations. Lisa is replacing Geri Ewing, who is transferring to our Finance department. Lisa has nearly 25 years of experience with the company and was most recently our Director of Financial Services and Insurance. We are pleased to report fourth quarter 2015 earnings of $187 million, ending a strong year with $2.85 billion in earnings. These results include $370 million pre-tax charge to value our inventory at lower cost to market. We remained very encouraged by the environment for U.S. refiners and we are pleased to see resilient crack spread supported by attractive product price realizations and continued strong gasoline demand in the fourth quarter. We believe lower prices at the pump will remain constructive for retail demand as we move through 2016. Crude oil prices continue to see pressure with the lifting of the Iranian sanctions. Resiliency of domestic producers and the [ph] sentiment in the market. Crude differentials have been and will likely remain volatile. WTI has traded at parity and in fact higher than Brent recently and we expect this trading pattern could continue in the near-term. However, longer term, we believe it will revert back to a differential based on product quality and transportation cost between the grades. We believe more favorable sweet/sour spreads will continue to exist and benefit MPC's complex refinery configuration in the Midwest and Gulf Coast. In December, , the Southern Access Extension pipeline or SAX came online, providing increased logistics flexibility and crude optionality, allowing us to more cost-effectively move Bakken and Canadian crudes into our Midwest refineries. SAX allows MPC to access additional advantaged crudes and adjust our slate based on the best economics. Speedway…

Thanks, Gary. Slide 4 provides earnings both, on an absolute and per share basis for the fourth quarter and full year of 2015. MPC's earnings were $187 million or $0.35 per diluted share during the fourth quarter compared to $798 million or $1.43 per diluted share in last year's fourth quarter. For the full year 2015, our earnings were almost $2.9 billion or $5.26 per diluted share compared to 2014 earnings of $2.5 billion or $4.39 per diluted share. Chart on Slide 5 shows by segment, change in earnings from the fourth quarter of last year to the fourth quarter of 2015. As Gary mentioned, earnings were impacted during the quarter by $370 million pre-tax charge to adjust inventories to market values. $345 million of this charge is included in the refining and marketing segment and $25 million is reflected in Speedway segment. After adjusting for the charge, earnings were down $374 million versus fourth quarter last year, largely attributable to our refining and marketing and Speedway segments, partially offset by lower income taxes associated with those lower earnings. I will talk about each of these segments and the changes compared to prior period shortly. Results for the quarter also, include income from the MarkWest since the December 4th merger date with MPLX, which is included in the renamed Midstream segment, previously known as pipeline transportation and will continue to consolidate MPLX for reporting purposes. Turning to Slide 6, refining and marketing segment income from operations was $207 million in the fourth quarter compared to just over $1 billion for the fourth quarter of last year. The decrease was primarily due to less favorable crude oil in feedstock acquisition costs relative to our market indicators, largely resulting from narrower crude differentials and lower dollar-based refinery volumetric gains resulting from overall…

Thanks, Tim. As we open the call for your questions, we ask that you limit yourself to one question plus a follow-up. You may re-prompt for additional questions as time permits. With that, we will now open the call to questions. Katie?

Thank you. [Operator Instructions] Our first question comes from Ed Westlake from Credit Suisse. Ed, please go ahead.

Good morning, everyone. First, before I ask my question, congrats on strong cash generation last year. I think a lot of focus is going to be on capital allocation, so I will kick it off on that. You have cut Midstream CapEx; can you give a little bit of guidance as to what has fallen out of the program and how the program might evolve into 2017, for example, if commodity prices stay low? Then, I have follow-on.

Don, you want to handle that please?

Sure. Ed, this is Don. A majority of the decline in that CapEx forecast is around the money we were going to spend in Utica and Marcellus, so you will recall that our original forecast was around $1.7 billion, and on the legacy MPLX side of the business, you know, that money was going to be spent on Cornerstone and the Robinson Butane cavern and a couple of those projects that are continuing on. The remainder was with respect to our G&P segment and a lot of that spending is going to be matched consistent with our just in time capital spending program to be able to meet our producer customers' demand, but not to deploy the capital in advance of their demands or their needs.

Okay. Thank you. Then a follow-on, still on capital, I mean, folks are worried about a recession, people have many different views on that, but you have revised capital down to 3.7. If you did have a period, where the market was stressed and you had to cut CapEx even further? Maybe just talk a little bit through the flexibility that you have in the capital program to manage a downturn. Thanks.

In fact, we are analyzing that right now, Ed, and we have several areas where we can manage our capital and that is the prudent thing that we are doing here. While I know it is difficult to lower the capital guidance and lower the distribution growth guidance, we just feel it is necessary to make sure we always manage within our means, so we have those opportunities, we can push some of the retail spending out if we had to that we are getting very high returns and really are very pleased with the returns we are getting there, but we are going through that exercise right now and we have already identified areas that we can be flexible.

Okay. Thanks very much.

All right, Ed.

Our next question comes from Evan Calio from Morgan Stanley. Evan, please go ahead.

Good morning, guys. I think that this will be the theme on capital allocation. Gary, the market is clearly concerned on the Midstream CapEx and MPC's potential carry of MPLX CapEx, potentially expense of the buyback given the state of the new issuance market. I mean, can you further elaborate how far you can go down in MPLX capital spending given the wealth of dropdown assets that you already have?

Evan, our first statements here, while the entire MLP market has been under tremendous stress, almost since the day that we announced this transaction, but it was clear even with our increase in distribution last week that the market is still under tremendous stress and is challenge not to recognize that value, so that is why we have really ratchet back our distribution growth, which is certainly part of the capital allocation as we look at it into MPLX. Don just mentioned how far we have gone; so far we cut back to capital of MPLX and if need be, we could even trim it back some more on the MPC and should it be on the MPLX side. What we are clearly going to do and it has always been part of our strategy and part of our flexibility is that we will manage to our capital budget whether it is out of refining, whether it is out of Midstream or whether it is out of retail, we will be able to ratchet back to maintain a strong balance sheet.

Great, and how does the consideration of a buyback, given your view of value and some of the relative underperformance of the stock. I mean, how does the view of a potential cap allocation to a buyback weigh against a potential further reduction of capital spending, whether it would be in refining or Midstream?

Sure. Tim, you want to take that?

Sure. Evan, again, I think considerations around the total capital allocation for the enterprise will continue to focus on balance. I think as we suggested even at Investor Day and this morning, the amount of share buybacks that we do at any point in time is going to flex depending on the needs of the business, but I think certainly in a environment of capital constraints, we will revisit the spending. Again, I think the intent and the plan for us is that the commitment around return of capital is really a long-term commitment. We do not get too focused on any one particular quarter one period, but certainly we will need to look at that across the full scope of the capital allocation of the enterprise.

Thanks guys.

Our next question comes from Neil Mehta from Goldman Sachs. Neil Please go ahead.

Hey, good morning, Gary and Tim.

Hey, Neil.

Gary, can you walk us through the new guidance from 25% down to 12% to 15%? Is there a way to bridge or quantify how much of the delta comes from different components, for example, how much of it is a change in dropdown multiples versus a change in the margin environment at MarkWest or a change in capital spending?

Right. Neil, I am going to ask Don and Tim to take this. I am overseas and I need to change phones here. Can you guys take that?

Yes. Neil, this is Don. I guess we were evaluating the full-year and there are a number of factors that we considered. You know, clearly, there has been pressure on volumes, but you know we are still seeing good volume growth and expect good volume growth in Marcellus and Utica to support our underlying business. We are very confident in the legacy MPLX business or the pipeline business. We are very confident in the steady cash flow of the marine business that has been offered to MPLX. I would say probably the biggest factor that we have been considering and have been analyzing and evaluating is the yield environment and you know the pressure that the yield environment puts on growth is we are funding our growth and issuing new units or funding it with debt. That has put, you know, incremental pressure on that, so I would say that a lot of our decision in our evaluation has not been based upon the underlying cash flows of the business, but it has really been a function of the way the market has performed since we announced the combination and even since early end of November when we were probably in the 4.5% kind of yield range. You know, we are more than 200 basis points wide of that in just a couple of months' time.

Okay. That is very, very clear, Don. Then, Gary, I am not sure if you are back on the line, but maybe the team can take it here. As it relates to gasoline, it is the topic that has been top of mind here. Week one, it felt like we could dismiss it, the inventory builds due to fog or weather conditions, but we have seen the relentless build in gasoline inventory, so, I want you guys to comment in terms of what you are seeing on demand. It sounds like you are up 1% in gasoline same-store sales, so that sounds fine. Why do you think we are seeing that level of inventory build and how do you think about the gasoline outlook from here?

Yes, Neil. I am back online. Sorry that I had to cut off.

Okay.

As I said at your conference, we were surprised to see that big of a build and had expected it to be reversed due to a lot of operating issues and it has not reversed to the area that we thought it, but gasoline demand continues to be strong. When we look at our exports, we know averaged 330,000 barrels per day in the fourth quarter of exports, granted we have a couple of turnarounds here early in the first quarter, but that will reduce our number of exports, but also our total volume and capacity will be down a little bit in the first quarter due to the exports. We see gasoline demand, as Tim stated, up 1% and we see that continuing on and I think I stated in our Analyst Day meeting that we would expect first quarter to be over first quarter last year due to continued lower price versus same period last year, but gasoline and octane continue to be very strong. Diesel has picked up a little in comparison to the fourth quarter across our same-store sector and our under diesel exports continue to be strong as well, so I will - Mike Palmer, see if he has any additional comments.

You know, Gary, the only thing that I would add is that, obviously, this time of year, we typically see gasoline builds, especially in PADD II, and you know that is what we are seeing now. We are getting ready to go into the turnaround season and part of the build that you see is in order to handle the shortfall that we are going to have when those refineries go down. That is only other thing that I would add to your comments.

All right guys. Thank you so much.

Our next question comes from Brad Heffern from RBC Capital Markets. Brad, please go ahead.

Good morning, everyone.

Hi, Brad.

Again, on a MPLX, I am curious about the projects that you had discussed that had sort of more direct synergies to Marathon itself, the alkylation project and so on. Has the timeline for those projects been pushed back?

Not at this time, Brad. You know, when we laid out all those projects in the third and fourth quarter last year, it was always anticipated that these were no longer lead projects and we are continuing to work those very hard. We are in some engineering on a couple of those projects, but we do not anticipate at this time to move those out. The alkylation project is very important, very important for the producers, very important for our octane needs and the distribution of octane into the refining system. We are still looking at a very strong interest in a solution in order to be able to move propane either to an East Coast market or move propane down into the Gulf Coast, so those are still continuing on and those were the two biggest synergy projects that we had outlined at the time of the transaction and both of those as I say we are continuing to work on.

Okay. Thanks for that.

Brad, this is Don. I might even add one more comment on that, particularly on the NGL project. One of the things that we believe is really important is that our producer customers are very much in need of an opportunity to increase the netback, particular on propane. I mean, we have been challenged in terms of getting it to a market where they can realize a higher price, so in our efforts to make sure that we are very sensitive to and focused on our producer customers, we think it is important for us to deliver a project or projects that allow them to get the highest netback they possibly can as quickly as they can, so speed is of the essence in terms of those types of projects.

Okay. Understood and thanks for that. Then thinking about the refining business, I am just curious around the crude slate, how things have changed of late, how you are changing, what you are running in the context of mediums and heavies appearing to be much more attractive and lights being less so?

Mike?

Yes. Brad, this is Mike Palmer. Yes. You have hit the nail on the head. I think what we are seeing now is that, when you look at the light sweet domestic production in this country, you know, we think that those lines are coming off and there is tightness, but at the same time we are seeing very good values on the sour side of the barrel. We are getting a lot of Middle Eastern crudes that are moving into the Gulf. As you know, the Gulf of Mexico itself has grown and continues to grow and the Canadian heavy sour continues to be a good value, so I think that is exactly what you are going to see happening as there is going to be probably less sweet runs and a shift to sour.

Okay. I will leave it there. Thank you.

Our next question comes from Phil Gresh from JPMorgan. Phil, please go ahead.

Hi. Good morning.

Morning, Phil.

The first question is just a follow-up on Neil's question on refining fundamentals. Gary, you have been pretty upbeat about your outlook for the full year. Obviously, you know, it is just the start of the year and January does not make a full year, but I am just curious if what we have seen thus far in any way, reduces your conviction in the full-year refining outlook or if you still think that refining margins should be up in 2016 over 2015 or at least in the first half?

Yes. Phil, I still think refining should be strong in the first half, driven as I said earlier by gasoline demand and driven by octane. The crude oil prices have been quite choppy over the last three weeks here. Crude try to get momentum and then [ph], so that would be a little bit of a driver and the differentials of course that goes with that. Overall demand, again, driven by gasoline. As I said, we have seen some uptick in our diesel over the road demand here so far in the first quarter, but clearly in the market right now are the diesel inventories as Mike Palmer explained we will look at diesel as we go through the turnarounds season within the industry here already started in the Gulf coast. It will move up into PADD II and PADD I, starting in the second quarter should take care of the overhang in the diesel inventory, but if there is any overhang in the margins, I believe, it is going to really be diesel-driven.

Okay. Thanks. The second question is on the Midstream side. You guys have talked a lot about the levers available to pull, one of which is of course the support from the MPC side. You still have this significant backlog of droppable inventory, so I guess I just wanted to understand a little bit more how you are thinking about that support mechanism as we move forward and are you less certain about wanting to do drops beyond marine at this point just because of what we are seeing on valuations or just any thoughts around the puts and takes there would be helpful.

Sure, Phil. We still have all the flexibility and still have all the interest in supporting MPLX, supporting the Midstream business as we have stated. It is just as Don outlined, if you look at our yields from the time we announced the transaction to the date of closing and until note yesterday. Obviously, as we speak today, the yield continues to back up. I have always outlined that we believe that the differentiator in the MLP space is the quality of earnings and the quality of distribution growth. We have highlighted very clearly what that quality is and what flexibilities we have. However, the market is the indicator on how that is going to be recognized. Today, the entire market is under complete stress and MLPs have backed up in their yields value, so we just think it is prudent at this time not to chase that yield. As I said at the last question I had at the Analyst Day meeting, we will continue to assess, but there is no reason to chase the yield that is backing up with when we have very, very high quality assets, very high distribution growth that we can make happen. I think it is just best that we settle back, we see how the entire market continues to recognize MLP investments. As I said in my talk, we expect this to be temporary and we expect to be able to revert to our initial distribution growth guidance down the road as market settle down a little bit.

Okay. Thanks, Gary.

You are welcome.

Our next question comes from Paul Cheng from Barclays. Paul, please go ahead.

Hey, guys. Good morning.

Good morning, Paul.

Gary, I have to apologize. First, because I was going to ask a similar questions as other people on the MPLX side. I understand that once you go into a certain construction or that you have certain commitment, so it will base on the commitment and the construction that you already have today. What is the minimum CapEx that you have to spend in the MPLX in 2016 and 2017? Also, what is the maximum that the MPC support on an annual basis that you are willing to do for that CapEx?

Sure. We have already outlined, Paul, that on the MPLX side, we dropped the capital back above $450 million from where we had initially approved the capital and I will let Don and Frank take it from there, if there is any - how much more room they have, but I know we have more room to drop back from there. Then I will have Tim cover the maximum that we would support.

Yes. Paul, we have not given specific guidance on sort of what the minimum is. I think that it is important to us to be able to flex in order to be able to meet the increase in volumes that are producers are experiencing and we expect them to experience, so we will continue to monitor that. We do have a lot of knobs to pull or levers to pull and we feel like we can manage capital in a very, very efficient way. I mean, we expect for example that in fractionation or in processing in Utica and Marcellus, we would expect processing to increase by 20% year-over-year and fractionation to increase by 30% year-over-year, so we are expecting good volume increases and we are going to make sure we are managing our capital appropriately to be able to support our producer customers.

Yes. Paul with regard to what is the maximum amount that MPC would be prepared to support. I mean, again, the commitment to supporting the partnership as the needs arises there, that support can take a number of different forms. We have highlighted this morning that the marine assets are being offered into the partnership that what we believe people will see as a very supportive multiple. That is a fantastic opportunity. We would be taking back all units for it, limiting the partnership's need to access the equity markets, we have got options with regard to the intercompany funding either on alone or equity basis, we can look at potential modifications to do GP cash flows. We have got a host of things that we will look at. I am not sure that there is a hard target number in terms of what supports necessary, but we will continue to look at it in the totality of how the entities will manage each other and MPC is fully supportive of helping the partnership to achieve the objectives that it has got laid out, so we will see what the environment holds. As Don indicated and Gary highlighted, what really makes things challenging is the higher yield. I mean, obviously for the partnership, for every dollar of growth or earnings that goes into it either on an organic or acquired basis, there are just that many more units that go out, so we will have to assess this as we move along. The support is there and we will remain flexible with regard to what forms make the most sense given the time and circumstances involved.

Before I ask the second question, Tim, if I may, I would just say that in a market where there is a lot of nerviness and concern, I think both your shareholder in MPLX and MPC may benefit if the company would come with a more definitive answer in terms of what is the maximum support, and also correspondingly what is the roadmap that MPLX will be able to self fund the remaining. I think that your share pie on both sides probably will do much better if you would be able to come up with an answer in a more direct way for that. My second question, Tim, is for you. When looking at the refining operation, in addition to your manufacturing costs, your turnaround costs and your DD&A as a bottom. There is always a sort of like the terminal cost and other expense on refining. In the past couple years ago, that was roughly about running at $215 million a quarter. In the last several quarters, seems now they are running at about in the $350 million to $375 million a quarter, so the question is that, is that a reasonable run rate going forward? If it is, what may have caused the increase over the last couple years?

Well, Paul, I think you are sort of referring to the elements of other gross margin in terms of how we have looked at earnings quarter-over-quarter and year-over-year?

Yes. I mean, when we do a simple math in the model, if I look at what you record as gross margin in refining and your throughput and then your three cause items that you gave. After we do that, there is a gap between what do we report as your profit and what model we suggest and that gap in deposits is about $215 million a quarter. In the last several quarters, it has become more like in the $350 million, so I just want to see and I think that in the [ph] one, I understand is that that is including order, the terminal cost and other that is embedded and one is core business inside refining.

Yes. Again, there are certainly some seasonal factors that enter in too, but you are talking about things that would include sort of marketing, transportation, other expenses that get factored in.

That is correct.

Again, I would not say there has been any structural change to the sort of run rate around the expenses related. A lot of it will move higher based on some unplanned turnaround activity to the extent that comes in. We have certainly been impacted and benefited from the lower overall fuel costs related to natural gas. I would say as the structural matter, there is nothing that has moved dramatically. The notion that there is roughly $200 million gap, again I think it is difficult to predict based on the environment, but with regard to the refining system itself there is nothing that has structurally change that would impact that.

Hey, Paul, this is Don. I had maybe one other comment or observation. I mean, that number when prices are going up really quickly or prices are coming down really quickly, that number seems to expand or contract. While we have had volatility in the markets, we have had sort of relative prices have relatively have not moved down as fast or up as fast, so we get impacted in there when RIN prices move up really quickly or move down really quickly. We get impacted when commodity prices are moving up really quickly or down quickly. Even though it is a low-price environment, because we go a little bit more steady action there, I think, that is probably what has moderated a little bit from some of the previous quarters.

All right. Thank you.

Our next question comes from Chi Chow from Tudor, Pickering, Holt. Chi, please go ahead.

Thank you. Good morning. My question may be a little bit derivative from Paul's here. It looks like you cut MPLX CapEx, obviously, but you kept the Midstream spending at the MPC level constant at about $830 million, looking at your slide 13 here. Can you talk about what projects are in that bucket and how much of that capital is earmarked for the support for MPLX in terms of incubating projects or other growth initiatives?

Don?

I guess, some of the ones that are in the MPC bucket versus, I will call up that the, G&P bucket or the logistics and storage, would include investments and things like we had some tail expenditures on the Southern Access Extension when we completed that. We have investments in Sandpiper as we are funding that with our joint venture partner Enbridge, so some of those projects, Chi, are ones that are longer lived, had some maybe bigger dollars associated with them. It was one of the reasons why we were actually incubating those up at MPC versus funding them directly at MPLX. I might also add, we have been making some investments in blue water, our joint venture with Crowley, the investment in the blue water vessels, so those are some of the things that are sitting up in MPC and not in the MPLX number.

Don, again, looking at Slide 13, is that in the $351 million bucket, the Midstream R&M piece or is that in the other Midstream bucket excluding MPLX down below, which amounts to about $480 million to the other bucket from what I gather here.

I am sorry. I missed your question Chi?

The SAX and Sandpiper spending in the blue water, is that all, and you have got two buckets of Midstream CapEx here on Page 13. You have got a Midstream R&M piece, $351 million. If I back out the MPLX CapEx in the second Midstream bucket, it gets to about $480 million. I am just wondering, I guess the bottom-line question is, is there room to cut the MPC Midstream CapEx or do you still need to spend that $830 million in support of MPLX going forward here?

I would say that the MPC piece of it is probably a little less flexibility in terms of cutting that. The stuff that is in MPLX consolidated, there is a lot more flexibility there.

Okay. Maybe I will follow up with some details later. I guess, secondly, on the marine asset drop. Can you provide us any sort of EBITDA guidance on the…

Yes. We expect the next 12 months EBITDA to be around $120 million, Chi.

Okay. You kind of hinted at it, but any sort of dropdown multiple you can share at this point?

We cannot share that right now, because the process is going through. It has been referred by MPC to the MPLX special committee or conflicts committee, so they are working through their valuation and we would not want to get in front of that.

Okay. Final question on the condensate splitters, can you provide an update on the operation there and discussed the accretion and returns you might have realized in the fourth quarter?

Chi, we do not breakout the splitters at Canton and Catlettsburg separately, but both are operating at their design capacity. Mike Palmer, can talk about what the design capacity and what we have been running them at.

Yes. Gary, I sure can. The two splitters, you know, Catlettsburg has a design capacity of 35,000 barrels a day. Canton is 25,000 barrels a day. Total of 60, we are operating those two splitters at the plan that we have had. Typically, we do not talk about just exactly how much we were running. We still got some room. We are not full, but that was the plan for this point forward. I can tell you that we are buying as much condensate now as we have at any time in the past. That condensate production is holding up well, our strategy is working well. We did have a little bit of weather issue in January, but really that is all we have seen, so it continues to work per plan.

Okay. Mike, can I ask, it looks like from some public pricing sources that Utica condensate prices fell below $10 a barrel in January and still holding in the low teens. Is that the level of feedstock cost you are realizing for the splitters?

Again, Chi, we do not really talk specifically about those price levels. I think all we said in the past is, what you need to do is take a look at the Ergon [ph] postings in that area to give you an idea of what the prices look like.

Okay. That is good enough. Thanks. I appreciate it, Mike.

Our next question comes from Doug Leggate from Bank of America Merrill Lynch. Doug, please go ahead.

Thanks to everybody. I know we are getting close to the top of the hour, so thanks for getting me on, but I guess we cancelled the two question rule today. I have two questions, if I may. First one is also on the MLP. Gary, to you, as you are taking units from MPLX, when MPLX is already very, very weak, thinking about the saturation of piling on and top of the existing MPLX shareholders, why not just slow down or defer the marine dropdown like you were originally going to do rather than force more equity into the market. What is probably going to have to be a relatively low multiple for MPC shareholders?

That is certainly is one of the things that we have looked at, Doug. Let me turn it over to Tim, as Tim has done all the analysis on what we think the best options are.

Yes. I mean, I think, ultimately as we scope the distributable cash flow necessary to support growth and the partnership, adding incremental earnings into the partnership is necessary, frankly, just to support the distribution growth even as revised this morning, so a deferral would put the partnership in a more compromised position and obviously, getting the earnings base recalibrated. I mean, in addition to the growth of distributable cash flow, we are also sort of very carefully watching the leverage profile of the partnership and the capacity to take on any incremental debt there is more limited, so this is, Doug, I think really a necessary step to keep us on the path that is designed and has been shared with the investment community with regard to the distribution growth. We have looked at a number of different alternatives and I think adding the Marine business into MPLX both, from a diversification and to support the growth and distributable cash flows, is what we think makes the most sense at this point.

Okay. Just a quick follow-up to that, Tim, just to clarify what I am asking, so MPLX right now is trading on about a 6.5 times multiple of enterprise value based on your guidance you have given today. There is the legacy dropdowns for the industry, the whole MLP argument or case was predicated on our 8 to 10-plus times multiple. From an MPC standpoint, are MPC shareholders going to get proper value recognition for the assets you are dropping down in this environment? That was kind of what I am asking.

Well, we think so. Again, I think, for the entire - MLP space to the extent that yields have moved up, it is highly likely that multiples likely would move lower. I think, you will see evidence of that as we get through our transaction here. Again, we think that the long-term value to MPC really again relates to the GP and the potential IDR stream and cash flows that are generated from the partnership over a period of time and the growth in distributions made possible by the drop of marine and other assets from MPC will help to accomplish that over time. Obviously, it slows a bit here relative to our initial expectations on growth, but we still think the long-term value proposition is very strong.

Okay. Thanks a lot. My follow-up is just a quick follow-up on gasoline, so whoever wants to take this. Gary, as you know, I think we have been kind of a lone voice in talking about too much U.S. gas in the supply for quite some time. It seems to becoming [ph] home tourist to some extent. My question is, a lot of your competitors are still talking about max gasoline modes and given the weakness in distillate, what is Marathon's view on nice gasoline versus nice distillate in winter. At what point do you - basically just runs to limit gasoline output and I will leave it there? Thanks.

Right. Well, we review that every day, Doug. As I have stated before, we are able to flex our gasoline versus distillate make around 8% to 10%, so every day we are looking at that termination on the values in the marketplace and we are just coming up now on starting to make [ph] for pressure gasoline getting ready for the changeover. We have the market starting early April to make sure it is in 8% to 10%. 8% to 10% is how we can flex, but every day we are making that decision on what is the best product to make.

Our next question comes from Ryan Todd from Deutsche Bank. Ryan, please go ahead.

Thanks. Good morning, everybody. I will try to avoid one more shot at the horse and ask you a couple of quick refining ones. Maybe is a follow-up on the last question, you had a relatively high gasoline yield of 50% in the quarter, which is higher generally than what we have seen historically? Was that seasonality one-off effects. Is that kind of a maximum of process system? Is at the high end of where we can flex or is that a sustainable number that you think going forward if it were necessary?

Mike, you want to cover why we have more gasoline?

Gary, as you pointed out, determining whether we are going to be at max gasoline or max distillate is something that we look at continuously. You know the only thing I can say there is that, with regard to the 50%, I mean, economically that was the best place for us to be at that time. We certainly have seen a lot of strength with regard to gasoline exports in the current environment, a lot of that coming out of Latin America and even in the Far East and that is probably one of the reasons that the gasoline makes that high.

Okay. Thanks. Then maybe one follow-up on your outlook on turnaround season, as you look at turnaround season in the first half of the year, do you think that we will see the potential guidance to accelerate run cuts into the weak environment? Your outlook for a normal versus a heavy turnaround season and it seems like in your guidance, there is a relatively healthy amount of downtime, so any thoughts around both yours and maybe the industry turnaround season into the first half of '16?

Yes. Clearly, all of the refining industry, we look at the where the inventory situation and what the margins are. In the event, and we continue to expect gasoline to be strong, but in the event inventories are not in balance after the turnaround season here. It appears to be about normal season in the Gulf Coast, maybe a little bit heavier going into PADD2 early in the second quarter remains to be seen. I think the refining industry, as well as specific I can speak for Marathon. We have been very cautious and very prudent and always so watching the margins and if run cuts need to be made, the industry I think has been a very quick to assess that, but backup and say we do not see any issues today - any need for immediate run cuts. It is something that we certainly will watch going out into the second half of the year.

Our last question comes from Paul Sankey from Wolfe Research. Paul, please go ahead.

Hi, everyone. Thanks. It is going to be the same old subject. Just one on gasoline, Gary, your same-store sales were negative, very mildly negative in Q4. I was wondering why you would then think that how you could square the circle between being relatively optimistic on demand against what looks like quite a weak number actually to end the year. Additionally, could you just repeat the points about you think that gasoline inventory is being built here specifically with a view to a big turnaround season about to come, because it does seem that we are in turnaround season. Then just to hurry things up, I will tell you the follow-up is totally separate. Do you have a longer-term CapEx guidance for MPLX and MarkWest, given the changes since the Analyst Meeting? Thank you very much.

Okay. On demand [ph] I have Tony covered in more detail, but let me remind everyone that one of the - a same-store calculation really takes into account two things. Overall demand, but overall posture and how we are pricing into the marketplace. As Tim had in his script, we are always going to optimize and maximize what we believe to be the pricing posture in order to be able to get adequate returns within the Speedway space. Tony, I will turn it over to you. I believe that is exactly how you operated, so you want to make a few comments?

Yes. Gary, sure I will and you are exactly right. There is a lot of factors, Paul, that go into what really determines our same-store calculation. Speedway is on a growth profile and we continually add new stores is one example and some of the opportunity is to move volume to our new store. Overall for the quarter, if you looked at Speedway's total light product volume, we are actually up in total gallons, but when you do it on a true same-store basis, because of a lot of variables, one being the movement of volume, other factors within the PADD that we are seeing, as well as what Gary talked about in terms of the balance between volume and margin that we take going forward.

Got it, so you have got some pricing power, which gives you the knowledge that demand is pretty good?

Right. The other thing, Paul, we have recognized here in part of January the numbers Tim stated in his script were up 1.1%, I believe, so far as this month, but we were up higher than that in the first half of the month and we are very strong same-store month-on-month, but then the bump in crude prices, the quick response to the street cost you some volume. When you are one of the leaders in the market that is what happen, so we still continue to be very bullish on gasoline demand going into the second part of the year. Don, you want to take the question on the capital and then I will follow-up with a little bit more on the MPLX guidance?

Sure. We have not provided incremental outlook on capital spending. I guess, I would say it this way, Paul. The resource exists, we are very confident it does. Our producer customers are in what we believe to be very good regions and plays. The projects exist and what we are really doing is, we are managing the completion of projects to coincide with the volumes that are producer customers are producing, so we believe that the projects and the revenue opportunities are there. It is likely that some of those make it stretched a bit and we will match our capital plan to deal with the potential stretching in the volumes but we are very confident in our producer customers and the resources and their ability to long-term to deliver those volumes.

Thanks, Don. Go ahead, Paul.

I was just thinking should we just cut some of our long-term assumptions based on what you said and assume that even '16 will be a relatively high year? Post the cut, still high relative to the future?

I do not know. If prices rebound by the end of the year, Paul, it would be really dependent, I think, on sort of where prices end the year and what the outlook is for '17 and what the producer customers' drilling program and profiles are.

Okay. Thank you.

Paul, to that point, and I know there are number of questions that we had throughout this call. We reduce our guidance in this call. As I stated, we have decided at this time to suspend talking about guidance beyond '16. We just think that is the prudent thing to do. As we look at the overall business, we have been very clear. We have a temporary pullback here. I expect and my entire team expects, so this is temporary. As Don just stated, if crude prices rebound like we anticipate they will in the second half of this year, that could lead to volume growth, that could lead to producers being quicker to return into their producing regions, especially in the Utica and Marcellus, that is very important to our Midstream, but I want to temper any concerns about going past '16, because it is just important that we take care of the work at hand here then we will look at what happens beyond '16. Again, I think prices will recover in the second half and we will see where we go from there, but there is no reason to get into a discussion beyond '16 at this time. Lisa, I will turn it back to you.

Thank you, Gary. Thank you for joining us today. Thank you for your interest in Marathon Petroleum Corporation. Should you have additional questions or would like clarification on topics discussed to this morning, Teresa Homan and I will be available to take your calls.