Marathon Petroleum Corp (MPC) — Q2 2023 Earnings Call Transcript

Welcome to Marathon Petroleum Corporation’s second quarter 2023 earnings conference call. The slides that accompany this call can be found on our website at marathonpetroleum.com under the Investors tab. Joining me on the call today are Mike Hennigan, CEO; Maryann Mannen, CFO and other members of the executive team. We invite you to read the Safe Harbor statements on Slide 2. We will be making forward-looking statements during the call today. Actual results may differ. Factors that could cause actual results to differ are included there as well as our filings with the SEC. And with that, I will turn the call over to Mike.

Thanks, Kristina. Good morning, everyone. Beginning with our views on the macro environment, refining margins continued strong in the second quarter. Despite crack spreads incentivizing high refining utilization, product inventory levels remain low. Global capacity additions continue to progress slower than anticipated and we believe that global demand growth will remain strong. In the second half of the year, the refining outlook remains healthy. We expect year-over-year U.S. late product demand to grow consistent with what we saw in the first half of the year supported by lower energy prices and recovering air travel. This demand strength post tight inventories and receding economic headwinds are expected to continue to support elevated margins. And as we completed nearly four quarters of elevated turnaround activity early in the second quarter, we are expecting an increase in industry planned maintenance work by our peers in almost every region in which we operate. Overall, we believe an enhanced mid-cycle environment will continue in the U.S. due to relative advantages over international sources of supply, including energy costs, feedstock acquisition costs and refinery complexity. Now turning to our results. In the second quarter, we delivered strong results across our business. In Refining & Marketing, strong margins, cost discipline and sound commercial performance led to segment adjusted EBITDA of nearly $3.2 billion. Our Midstream segment delivered durable and growing earnings. This quarter, it generated segment adjusted EBITDA of $1.5 billion, which is up 5% year-over-year. MPLX remains a strategic part of MPC’s portfolio as it anticipates growing its cash flows and increasing distributions to unitholders. MPLX’s distribution to MPC was $502 million this quarter, an annualized rate of over $2 billion, which fully covers MPC’s current dividend and half of our planned 2023 capital program, not including MPLX. During the second quarter, we progressed key projects such as completing the STAR project at the Galveston Bay refinery. The competitive position of our Galveston Bay refinery is enhanced by the increased residual fuel and heavy crude processing as well as distillate recovery. We are well positioned with two premier 600,000 barrel per day refineries on the U.S. Gulf Coast with significant logistics and export capacity to support our global commercial strategy. At the Martinez Renewable Fuels facility, construction activities are progressing. Pre-treatment capabilities are starting to come online in the second half of 2023 and the facility is expected to be capable of producing its full capacity of 730 million gallons per year by the end of 2023. At that point, Martinez will be among the largest, most competitive renewable diesel facilities with a competitive operating profile, robust logistics flexibility and advantaged feedstock slate and a strategic relationship with Neste. On capital allocation, in the second quarter, we returned nearly $3.4 billion to MPC shareholders via dividends and share repurchases. And from May 2021 through the end of July, we have repurchased 264 million shares or approximately 40% of the shares outstanding. Moving to our sustainability efforts. In July, we published our 12th annual sustainability report and our 7th annual perspectives on climate scenarios report. Our perspectives on climate-related scenarios which aligns with TCFD standards, provides insights into how we see the energy landscape, our thoughts on climate-related risks and opportunities, the resources we put towards addressing them and the results that we have achieved. Our sustainability report shows continued progress on goals that we have set for ourselves, our efforts to strengthen the resiliency of our operations and to innovate for the future. At this point, I’d like to turn the call over to Maryann.

Thanks Mike. Moving to second quarter highlights, Slide 5 provides a summary of our financial results. This morning, we reported earnings per share of $5.32. Adjusted EBITDA was $4.5 billion for the quarter and cash flow from operations excluding favorable working capital changes was over $3.1 billion. During the quarter, we returned $316 million to shareholders through dividend payments and repurchased $3.1 billion of our shares. Slide 6 shows the reconciliation between net income and adjusted EBITDA as well as the sequential change in adjusted EBITDA from the first quarter of 2023 to the second quarter of 2023. Adjusted EBITDA was lower sequentially by approximately $700 million as higher refining throughput was more than offset by lower market crack spreads. Corporate expenses were roughly in line with our guidance. And despite general inflationary pressures, we have maintained cost discipline since taking $100 million out of our corporate cost since 2020. The tax rate for the second quarter was 18.4%, resulting in a tax provision of approximately $583 million. Our tax provision included a $53 million discrete benefit related to prior years. Moving to our segment results. Slide 7 provides an overview of our Refining & Marketing segment. Refining utilization increased 4% to 93% despite significant turnaround activity as planned work had a lower impact on crude units in the second quarter. During the quarter at Galveston Bay, an incident occurred at one of the refineries catalytic reformers. This unit has been out of service since May 15. This resulted in approximately 2.5 million barrels of crude throughput reduction and an approximate 1% reduction to capture. Sequentially, per barrel margins were lower in the Gulf Coast and Mid-Con regions driven by lower crack spreads and our sour crude differentials. Capture was 97%, reflecting a strong result from our commercial team, particularly given the extensive turnaround activity early in the quarter. Refining operating costs were $5.15 per barrel in the second quarter, lower sequentially and due to higher throughput and lower energy costs. Slide 8 provides an overview of our refining and marketing margin capture this quarter, which was 97%. Our commercial team executed effectively and achieved a strong capture result, considering a significant amount of planned and unplanned refinery downtime. Gasoline and distillate margin tailwinds were balanced against weaker secondary product pricing. We are also seeing incremental product yield and crude mix benefits from recent major capital projects. Capture results will fluctuate based on market dynamics. We believe that the capabilities we have built over the last few years will provide a sustainable advantage. This commitment to commercial performance has become foundational, and we expect to see the results of this emphasis. Slide 9 shows the change in our Midstream segment adjusted EBITDA versus the first quarter of 2023. Our midstream segment delivered strong second quarter results. Segment adjusted EBITDA, while flat sequentially, was 5% higher year-over-year. Our midstream business continues to grow and generate strong cash flows. We are advancing high-return growth projects anchored in the Marcellus and Permian basins. These disciplined capital investments, along with our focus on cost and portfolio optimization are expected to grow our cash flows. This will allow us to reinvest in the business and return capital to unitholders. Slide 10 presents the elements of change in our consolidated cash position for the second quarter. Operating cash flow, excluding changes in working capital, was $3.1 billion in the quarter. Working capital was an $854 million tailwind for the quarter, driven primarily by changes in crude oil and refined product inventories. Capital expenditures and investments totaled $570 million this quarter, consistent with our 2023 outlook. MPC returned nearly $3.4 billion via share repurchases and dividends during the quarter. This represents a 100% payout of the $3.1 billion of operating cash flow, excluding changes in working capital, highlighting our commitment to superior shareholder returns. And as of today, we have approximately $6.3 billion remaining under our current share repurchase authorization. At the end of the second quarter, MPC had approximately $11.5 billion in consolidated cash and short-term investments. Turning to guidance, slide 11. We provide our third quarter outlook. We expect crude throughput volumes of roughly 2.7 million barrels per day, representing utilization of 94%. Utilization is forecasted to be higher sequentially due to lower planned turnaround activity in the third quarter, and enhance mid-cycle margins continue to incentivize high refining utilization. While we have not confirmed a start-up date, our throughput guidance assumes the reformer at the Galveston Bay refinery will be down for the entire quarter. Planned turnaround expense is projected to be approximately $120 million in the third quarter. Operating cost per barrel in the third quarter are expected to be $5.10, as we expect to see benefits from higher throughput and lower costs, given we have completed a significant portion of our turnaround and project activity. Distribution costs are expected to be approximately $1.4 billion for the third quarter. Corporate costs are expected to be $175 million, representing the sustained reductions that we have made in this area. To recap, our second quarter results reflect our team’s execution against our strategic pillars across the company. Our capital allocation framework remains consistent. We will invest in sustaining our asset base while paying a secure competitive dividend with the potential for growth. We want to grow the company’s earnings and we will exercise strict capital discipline. Beyond these 3 priorities, we are committed to returning excess capital through share repurchases and to meaningfully lower our share count.

Thanks, Maryann. In summary, we will continue to invest capital to ensure the safe and reliable performance of our assets and where we believe there are attractive returns. Year-to-date, we’ve invested over $1.2 billion. Our focus on operational excellence and sustained commercial improvement will position us to capture this enhanced mid-cycle environment. MPLX remains a source of growth in our portfolio, distributing over $2 billion to MPC annually. And as MPLX continues to grow its free cash flow, we believe we’ll continue to have the capacity to increase its cash contributions to MPC. We believe MPC is positioned as the refinery investment of choice with the strongest through-cycle cash flow generation and the ability to deliver superior returns to our shareholders. With that, let me turn the call back over to Kristina.

Thanks, Mike. And now, we will open the call. Sheila?

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

Yes, good morning, Doug. Thanks for the question. I am going to let Rick give a little more detail, but I’ll start off with a couple of comments. One, we have made structural changes and have changed our commercial process quite a bit. With that said, I know yourself and a lot of the analysts like to look at that capture metric. I just want to always caution people that the metrics that I care more about is cash flow generation and earnings profitability. So I look at that much more than that capture metric, because I think there are pros and cons to it. But to your point, obviously, it has trended up and driven by a lot of the things that we have changed over the last couple of years. So I’ll let Rick give a little more detail.

Yes, Doug, first off, very perceptive question. I think it’s a good call out and warranted. We do believe the structural change is something that’s going to stick. In fact, we continue to improve and we are never going to be done improving in this category. So it’s something that we focus on daily. So in giving you an answer, I think you will respect that I will have to be broad as to not give away what I would call true competitive advantages. But it’s all the buckets you’ve touched on, it’s optimization, it’s trading, it’s all of the above. And the best way I can say it, Doug, it’s a holistic change in our mindset on everything we do to optimize our assets around our size, our logistics system, our knowledge, our expertise, and it’s driving incremental value throughout our entire system from feedstocks to products. And there isn’t anyone in the company that’s not engaged. I mean I can’t say enough. Our goal is to be the best cash flow generator through the cycle and this just isn’t a one-and-done exercise. This is the mindset that not only our commercial team, but our entire company is attacking every day with.

We will continue to watch it, Rick. Thanks for the color. I guess my follow-up is also a question that it’s hard not to bring this up every other quarter. But Maryann, the buyback pace in July is $800 million. Your dividend at the MPC level is about 150% covered by your distributions from MPLX. Why should we not assume that buyback should be ratable at mid-cycle at that kind of level going forward?

Hey, Doug. Good morning. Maryann. Thanks for the question. From a capital allocation framework perspective and hopefully, even from the comments that Mike and I have both made here this morning, we remain committed to superior returns and remain committed to our capital allocation as we have defined it. As it relates to the buyback – as you know, each quarter now, we are trying to look as best as we can. We take a series of things into consideration. We look at market. We look at our cash flows and we try to do the best job we possibly can to maximize our ability to perform in a given quarter, as you have seen $3.1 billion in the quarter. When you look from month to month, you see that visibility as you get our quarterly documents, you see a bit of variability there. But again, we remain committed. We think share repurchase is a very efficient return of capital. As it relates to the dividend, again, an important part of our capital allocation framework, as we have shared in the past, we remain committed to that. We want it to be sustainable. We certainly want to be competitive and the opportunity to grow that as well. I hope that answers your question.

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

Again, Doug, we try to be as opportunistic as possible in the quarter. So we hope that that’s the – what you are seeing from our approach to that. So yes, we continue to buy back stock as you have seen.

Opportunistically. Okay, thanks so much. Go ahead, Mike.

Let me just add a couple of comments to it. As I just said to your first question, the number one concentration is to generate cash. And then I am a believer that this business has both return on and return of capital as its requirements. So on the return on, we are investing capital to improve our earnings and grow our cash flows over time, but we are also committed to return of. So we used the word strict capital discipline. We set our programs such that we are going to be able to participate in both sides of that because I am a big believer in both. We got to show the market that we can invest capital wisely to grow our earnings, and we also want to show the market that we’re returning capital to the owners. So that’s a program that we’ve been on for a while here a couple of years. We’re going to continue in that mode. And I just want to give you a little bit more flavor as to how we look at it, but it all starts with generating cash and then optimizing return on and return of.

Very good. Thank you.

You are welcome.

Yes. Good morning, team. I want to get your perspective on the product market. So we’ve really seen a firm up here across the crack. And so any perspective you have on the strengthening – recent strengthening of margins? And then what are you seeing from a demand perspective in your own system for diesel, jet and gas?

Neil, good morning. This is Brian. Yes, let me first comment on the demand side of the equation because we are seeing the demand side of the equation really lead the crack. So on gasoline in the quarter, our system was up. And when I say our system, it’s really our entire marketing book was up 4% year-on-year versus an EIA call of about 2%. This most recent week, we see continued strength. We were up 7% last week on the gasoline pool. So we continue to see the strength, which is very encouraging as we enter the back half of the driving season here. And the West Coast has been an outsized performer, 5% on the quarter, 8% last week. And then looking at diesel, it’s been largely flat. EIA has got a call for the quarter of up about 1%. And of course, I think everybody has pretty dialed into Jet. We had a 9% increase on the quarter. For jet fuel demand year-on-year versus EIA of about 3%. And just real quick on the crack. I would say that the big story here over the last 30 to 60 days has been the distillate. So I mean, our view is distillate really ran up late last year, obviously, with the situation in Ukraine, uncertainty around sanctions in the first part of this year over in the EU. And now we have a lot more certainty. So the market came off pretty precipitously since the beginning of the year, and now we’re seeing it recover to a more fundamental level.

Thanks, it’s been notable. The follow-up is just around the dividend. It’s down to about 2% given how strong stock has been perspective and just your perspective on, is there headroom to raise the fixed dividend and remind us again when you typically would do that.

Neil, thanks for the question. It’s Maryann. So as I mentioned, hopefully, you see that we’ve got a couple of criteria for the dividend obviously, yield only being one of them, sustainability of that and obviously, the potential to grow. So as we’ve committed, we will be back next quarter with our intentions to share with you our plans for the dividend. So next quarter, consistent with our approach from last year as well. I hope that answers your question.

Good morning, guys. My question is like this year, you are bringing to conclusion two of your big mega projects, the Galveston as well as the Martinez RD. At this point, you haven’t indicated another mega project. So should we assume in the year 2024, more of your CapEx would be dedicated to quick hit projects, which generally are not that expensive. And that can mean that year-over-year, 2024 CapEx could be down versus 2023, unless you pick up a mega project at this stage?

It’s Maryann and thanks for the question. I think you characterized it well. As we shared with you, STAR is largely behind us. And as you heard from our comments as well, Martinez on its way to be with this next phase up and running by the end of the quarter. As you know, we’re a bit early to give 2024 guidance. We will get a little bit closer to that and give you some more color we intend to give you, as we have in prior quarters, to look at what we would be contemplating spending in refining as well as our low-carbon initiatives as well. But I think you stated it well. We haven’t talked about any significant major projects here to for. Hope that helps.

Manav, this is Mike. I just want to add. It’s just a little early in the year. We obviously have some insight as to what we’re planning to do in ‘24, but we will talk about that in subsequent quarters as opposed to now.

I completely understand. My quick follow-up here is, as I understand, when you first envisioned the Martinez project, it was more of so being refined and refined. As you brought in the partner somewhere your own thought process or what you want to run changed. And at this stage, you are looking at a higher percentage of lower CIS stocks versus soybean. Can you comment a little bit on that?

Yes, Manav, this is Brian. Certainly, you got it pretty dead on there in terms of the strategy and the strategic relationship we have with Neste. Just a couple of things to mention around your question, though, that we are on start-up diet here. So as mentioned, we’ve got our pretreatment facility coming online and really full horsepower of this facility really enters in the back half of this year, but we’re quite confident in our ability with our relationship with Neste that really is looking beyond just Martinez. This is just the beginning of our relationship. But one point of view that I will share with you, not Martinez specific, but to give just a little bit of perspective, we just exited July with our operation up in Dickinson, and we ran a 74% advantaged feed slate out of our facility up in Dickinson. And its start-up design was very similar to Martinez. So hopefully, that frames things up for you a little bit better of what to expect when we get Martinez up to full rate later this year.

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

Thank you and good morning. I’d like to follow up as well on Martinez. Maybe just if you can help us out with understanding some of the milestones we should watch. We know that the industry has been challenging times to get these facilities to start up cleanly. You have obviously put out a goal of full run rate by the end of the year. So, as we think about this point in late October, looking back at the third quarter, where would you expect to see that unit? And when would you anticipate that it becomes a positive contributor in terms of EBITDA, cash flow, earnings?

So, first off, the remaining construction activities at Martinez, they are on schedule and things are going very well. As both Brian and Mike indicated early on in the prepared remarks and the Q&A, we recently started up a portion of the Martinez pretreatment unit. And we are now pre-treating on-site with one train that will really just support the Phase 1 volumes. The big ticket item, though is when we ramp up with the second train at the end of the year when we bring alongside the RD capacity when the facility conversion is complete. So, I would give it positive remarks. Team is doing a great job and we look forward to the end of the year.

And Roger, it’s Mike. To your question, financially, you got to be thinking into ‘24. As Tim said, we are ramping, we are starting up. We are going to bring on the additional units and if all goes well, we will be on by the end of the year. So, you will start to see the financial performance more in ‘24 on a go-forward basis.

Thanks for the question, Roger. As you said, as it relates to Dickinson first, we have been operating for about 2 years and consistent with the way we have expected profitability there. Although some of the moving parts are different, we continue to see the performance of that consistent with what we thought. Mike just shared with you when we should expect to see real contribution from Martinez. So, we will evaluate both Dickinson and Martinez in terms of their total contribution. As you know, we have said for 2023, we are not planning to break that out. But we will come back to you as we continue to move along our path of profitability for both Dickinson and Martinez.

And Roger, it’s Mike. The other thing and I know you know this already, but obviously, the refining assets cash flows are significantly higher than what’s happening in renewable diesel. I think the way you should think about that is, us looking at all our assets, and we talk about portfolio optimization to take two assets that we did not think would be competitive long-term and deserving of investing capital and it put them in a positive cash flow mode going forward, obviously, in a diesel mode as opposed to a crude mode. So, I think it’s more of a portfolio optimization realization compared to where we are on refining cash flows.

Hi. Good morning. Thanks for taking my question. So, my first question is just coming back to the Galveston Bay reformer. Is there an update on when we could see that coming back? I know you are assuming out for the full quarter with 3Q guidance, but maybe just a little bit of color on where you are in that restart process beyond just that assumption in your guidance.

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

Okay. Fair enough. And my next question is on tax. You had a very low rate in 2Q. You called out a $50 million-ish of that looks non-recurring. But even when I adjust for that, it’s still trending down the past couple of quarters. Is that just on the mix of non-taxable MPLX versus refining, with refining coming down past couple of quarters? Are there any other moving pieces to think about in the tax rate?

Hey John, it’s Maryann. Yes, thanks for that. So, as we stated, the $53 million that I called out for you is related to prior periods. It’s a good news story. We were successful on a resolution of an item that has prior period benefit, and it will have some, but all bet smaller benefit going forward. And that’s about $0.13 in the quarter. As you have stated, typically the biggest mover on our rate is the relationship between our midstream business and our refining business. But from time-to-time, we could also have discrete items. Those items could be positive or negative. And in some cases, they are positive. But as you stated, the typical driver there, when you look at our Federal rate and the State tax rate would be that relationship.

So, if I adjusted out the $53 million in this quarter, that’s a decent run rate to think about going forward?

One of the things that you have said when you look at that rate, it’s a little bit lower than average. I think you are probably coming to around a 20% ZIP code in the quarter. As you have seen from last year, we have run about 22%. So, there is a range there, but certainly, 20% is at the lower end of that when you look at the relationships between refining and midstream today.

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

Theresa, good morning. This is Brian. Yes, so we have been very actively involved with CARB on the valuation of the reset. We remain optimistic. We believe CARB foundationally wants to find a way to support the program. Obviously, LCFS prices have come off fairly precipitously over the last couple of years as RD has penetrated. So, we are expecting support for the market. But note, LCFS is the smallest variable in our overall value equation. So, it’s not been a big needle mover, but we do think it’s important going forward to underpin the profitability on the RD space. In addition, obviously, we are looking at markets beyond California. So, as LCFS prices come down in California, there are other state-level programs on the West Coast and beyond that we are finding opportunities to penetrate with our RD market position.

Hey. Good morning. Thanks for taking my questions here. Chicago diesel cracks were quite weak earlier in July, even related to other PADD 2 markets like Group III. Do you have any color on what was going on here? It looks like they recovered so far, but any color as to why Chicago Diesel at one point was negative on an RBO adjusted basis?

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

It sounds good. And then on the CARB data posted last night, it showed that in the first quarter of this year, California diesel consumption was 49% RD and up to 8% be the – for your Los Angeles refinery, are you having any problems placing your petroleum diesel volumes in that California market? And are you having to export new volumes to Singapore or Mexico? Do you consider that a risk down the road?

Yes, Matthew, this is Brian. On the prop basis, no problems clearing the barrels. But yes, you are on point there. As RD penetrates the California market, it’s a one-for-one relationship. It’s fairly balanced. I will say the West Coast system as a whole, that our expectation and planning horizon does include the ability to make sure that we can export barrels beyond the U.S. In addition, obviously, jet is very, very strong right now. So, if you look at the yield structure in terms of how we are running the refineries, we are working really, really hard to make sure that we are maximizing jet fuel at the cost of the distillate side of the book.

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

Yes. Thanks for the question, Ryan. It’s Maryann. Let me try to give you a little bit of color. When you look at Q1 to Q2 performance, keep in mind in the U.S. Gulf Coast, as you stated, we were under turnaround in the first quarter and obviously ramping up. So, you saw the benefits of that, obviously, in the second quarter despite the fact that we did have the reformer down for just a portion of the month. As I was commenting on, it’s only about a 1% impact for the second quarter that will get a little bit larger, as I shared, given the fact that we are assuming it to be down. I think the other thing to keep in mind is typically when we look at cost in the quarter, when we are doing heavy turnarounds, as we did in the first quarter, we are typically doing other maintenance work and that was much lighter in the second quarter as well. As it relates to STAR, as you know, we were ramping up our comments as we have been sharing STAR was ramping up through the second quarter. So, minimal impact with respect to STAR, but you will begin to see that now as we have reached the completion of that project.

Yes, Ryan, this is Mike. I think the refining assets cash flows are significantly higher than what’s happening in renewable diesel. I think the way you should think about that is, us looking at all our assets, and we talk about portfolio optimization to take two assets that we did not think would be competitive long-term and deserving of investing capital and it put them in a positive cash flow mode going forward, obviously, in a diesel mode as opposed to a crude mode. So, I think it’s more of a portfolio optimization realization compared to where we are on refining cash flows.

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