Welcome to the MPC's Fourth Quarter Earnings Call. My name is Illan 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. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Lisa Wilson. Lisa, you may begin.

Thank you, Jason. Welcome to Marathon Petroleum's Corporation fourth quarter 2017 earnings webcast and conference call. The 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, Chairman and CEO; Don Templin, President; Tim Griffith, MPC's Senior Vice President and Chief Financial Officer; Mike Hennigan, President MPLX and other members of MPC's executive team. 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 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 on Slide 3.

Thanks Lisa, and good morning, and thank you for joining our call. We issued two press releases today, our usual fourth quarter earnings announcements and one announcing the completion of our previously announced strategic actions. This morning we report a strong results for the quarter and full year. The Midstream and Speedway segments each achieved a record full year performance along with a substantial increase in earnings from the Refining & Marketing segment. I will as Don to cover addition highlights for the fourth quarter and full year results. Before I move to our capital plan, I would like to take a moment to highlight two significant five year milestones for our company. February marks the five year anniversary of our acquisition of Galveston Bay refinery. The accomplishment since this acquisition are impressive. We have dramatically improved the environmental and safety performance of the refinery and advanced operational excellence all while achieving lower operating expenses. For example, we have reduced environmental incidence by approximately 80%, achieved numerous processing records including 33 monthly process unit rate records in 2017 alone and cut unplanned downtime in half. We've also lowered operating expenses nearly 25%. It's also been five years since the formation of MPLX. MPLX has delivered an impressive 20 consecutive quarters of increased cash distributions for unitholders representing a compound annual growth rate of 18.3% over the minimum quarterly distribution established at the partnership's formation. The partnership's asset base and earnings profile have been transformed over this time. In late 2015, the partnership expanded into midstream natural gas business with the addition of MarkWest. Early last year, we announced a strategic action plan to enhance value for our investors which we completed today. As part of this strategic actions, we executed dropdowns to MPLX of assets and services that are projected…

Thanks Gary. Turning to Slide 4. We reported fourth quarter earnings of $2 billion or $4.09 per diluted share and full year earnings of $3.4 billion or $6.70. Fourth quarter and full year earnings reflect the net benefit of $1.5 billion related to tax reform. The Midstream segment which largely reflects the financial results of MPLX reported record financial results in the fourth quarter and for the full year 2017. This record setting performance was primarily driven by gathered, processed and fractionated volume growth resulting in high plant utilization. After the closing of today's dropdown and the elimination of IDRs, MPLX is among the largest diversified master limited partnerships in the energy sector with a very competitive cost of capital going forward. Given its robust portfolio of organic projects in the Marcellus, Utica, Permian and Stack, as well as a diversified suite of logistics assets, we believe MPLX is very well positioned to be a source of significant long term value for its unitholders including MPC. I would encourage you to listen in on the MPLX call at 11 AM this morning to hear additional color on the partnerships performance and opportunities. Speedway achieved record full year performance in 2017. This was driven by strong earnings from light product sales, an increase of 1.2% in same store merchandize sales, lower operating expenses and contributions from its travel center joint venture. This is Speedway's sixth straight year of record results and second consecutive year generating $1 billion of annual EBITDA reinforcing the strategic value of this high performing, stable cash flow business. Turning Refining & Marketing, we delivered strong results with full year segment earnings of $2.3 billion, an increase of nearly $1 billion over 2016. We operated exceptionally well throughout the year and we're able to capture strong crack spreads and wider crude differentials across our system. Additionally, we achieve numerous monthly process units and production records in the fourth quarter and throughout 2017 including monthly records for crude throughput and gasoline and distiller production. As a result, we are now the second largest refinery in the U.S. on a crude throughput basis and Galveston Bay and Garyville are the second and third largest refineries respectively. With that let me turn the call over to Tim to walk you through the financial results for the fourth quarter and the full year.

Thanks Don. Slide 5 provides earnings on both an absolute and per share basis. For the fourth quarter and for the full year 2017. For the fourth quarter of 2017, MPC reported earnings of $2.02 billion or $4.09 per diluted share compared to last year's $227 million or $0.43 per diluted share. For the full year earnings were $3.4 billion or $6.70 per diluted share, up from approximately $1.2 billion or $2.21 per diluted share in 2016. As Don referenced, earnings for the fourth quarter and full year included a tax benefit of approximately $1.5 billion or $3.04 and $2.93 per diluted share for the fourth quarter and full year respectively, as a result of re-measuring certain net differed tax liabilities is using the lower corporate tax rate. The bridge on Slide 6 shows the changes in earnings by segment over the fourth quarter last year. Apart from the $1.5 billion benefit resulting from tax reform what highlights the significant increase in Refining & Marketing compared to same quarter last year. The improvement was driven by higher LOS based blended crack spreads and higher utilization rates in the fourth quarter 2017. These benefits were partially offset by less favorable product price realizations versus spot prices used in the benchmark crack spread. Speedways fourth quarter is also were generally comparable to last year. The increase in light product margins were offset by higher operating expenses and lower merchandize margin in the quarter. The 47 million favorable midstream variance was primarily due to MPLX's record gathered process and factionary volumes as compared to the fourth quarter of last year. Quarterly results were also impacted by $205 million of income taxes associated with higher earnings and $47 million of increased allocation of higher MPLX earnings to the publically held units in the partnership,…

Thank you, Tim. As we open the call for your questions, as a courtesy to all participants, we ask that you limit yourself to one question and a follow-up. If time permits, we will re-prompt for additional questions. With that, we will now open the call to questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question today is from Kristina Kazarian from Credit Suisse.

Good morning, guys.

Good morning, Kristina, welcome back.

Thank you. As you had alluded to in the opening comments the WTI, WCS spreads really widened out. Can you give a bit more color on the how you guys are thinking about the overall impact on your refining system throughout the year?

Yes, Kristina. This is Mike Palmer. You're absolutely right. I mean the - what's happening is that the growth in Canadian heavy continues. And for example we've got the big four heels project is just now starting to ramp up. And with that growth in Canadian crude, what refining is that the pipelines that feed the U.S. systems are full and they're being portioned. So when you look at the numbers, we're very high WCS spreads right now, we do expect those to come down somewhat. But what it really means is that we'll continue to maximize the volume of heavy Canadian that we can move into our system.

Great. Thanks. And I'll follow-up on that to you. How you heard that thinking about the return that you will be generating on some of the residual upgrade projects you also talked about the beginning of the call particularly given the benefit of IMO that might be coming?

Well we look at those projects we've seen high double-digit returns of that we're looking at and that's being very conservative on IMO. We do believe that there are significant upside opportunity with IMO not only of the incremental projects but our base business, but we have not taken any of that upside into the IRR calculations on those projects. But when we finish, we're going to be able to destroy approximately probably somewhere between 280,000 to 300,000 barrels a day of residual and on a total refining system basis we're going to be up significantly over 700,000 barrels per day of annual distillate production. So both the residual destruction, our total annual distillate production, we have the ability to swing that between gasoline and distillate when this is complete and we've always set around 8% to 10%, will probably be a little bit higher when we have these projects complete. But high returns and I think significant upside if the market continues to perform like many of us think it well.

Perfect. Thank you.

Thanks.

Thank you. Our next question is from Benny Wong from Morgan Stanley.

Hi, good morning, guys. Hi Gary. Just following-up on projects to positioning you guys for IMO, is that $400 million looks like, is there any of that to need to be spent to be completed in 2019 or is it all in 2018 and also beyond that is there any more opportunities that you guys are looking at to further position you for IMO?

Yes. Let me have Ray Brooks take that question.

Sure. Your question about that positioning for IMO had a 20/20, probably the biggest thing that we have is Gary talked about residual destruction is we have a moderate expansion of our Garyville, Cokers, both Coker units were put in a larger Coke crowns and doing some deep bottleneck. And that wok will be primarily complete on one Coker Q4 2019 and the other Coker Q1 2020. So right on time there. At our Galveston Bay refinery, we've talked over the years about the Star Project which fits right in with IMO, it's a residual destruction, it's a diesel maximization project. That project is actually had staged implementation going back a couple years and will have stage implementation going forward all the way out to when it finally complete so be Q1 2022, but I had a IMO they'll be some more implementation there. To follow-up with your other comment about additional projects. In addition to the CapEx for R&M we always have a backlog of projects that we're are doing some level of engineering and we have some very attractive projects in queue that will continue to re-evaluate given the current market look and potentially bring some more of those projects forward.

Great. Thanks. And for a second question just regarding the LP units you guys will hold after all the strategic transformation here. Have you guys ever looked at an up-sea structure the something is kind of come across like discussions this was essentially C Corp unit is that something that would make sense at some point or are there any reason that it wouldn't?

Well Benny, this Tim. We'll continue to evaluate potential structural turn as where we think that makes sense. I don't think there's anything at this point that is absolutely compelling or imminent in terms of the review, but we'll take a look and see if there are such that makes sense. I think as we've said publicly our intent plan would be to hold these units indefinitely. I mean we would - they are so important to MPC cash flow that we don't see any situation where those units are not held by MPC but we'll continue to evaluate structure where we think it may make sense, we've looked at other vehicles even for C Corp sleeves that may provide some market access that is tougher in the and not the space but nothing that is required or in terms of our view at this point.

Got it. Thanks guys.

Thank you. Our next question from Paul Cheng from Barclays Capital.

Hey, guys. Good morning.

Hi, Paul.

Gary, I just want to make sure I get your number correct, you said in the investment that you guys are making when if you think it sense then you're going to reduce in your we see production by 280,000 to 300,000 barrel today. I was looking at your press release, last year your heavy fuel oil is 37 and 63 so that's only about 100. Did I get it wrong and also you say production increase 700 or that you say that is up to 700 because in the full year last year your 641, so maybe you can clarify maybe I missed right one you just said?

Sure. And what I was saying is that in total I was not saying incremental, Paul, I was saying in total that our reserve destruction will grow to by the time we finish these projects in 2019 and 2020, we're going to grow to about 280,000 maybe I said 280,000 to 300,000 by the time we get this done in 2017. In '17 - let me tell in 2016 it was 240,000 barrels per day, in 2017, we finished a part of the Star Project which took us from that up to about 252,000 barrels per day and the balance would take us up this 280,000 to 300,000 and then that's a residual destruction. And then in distillate production, in 2017, we were about 640,000 and we're going to go up to about 710,000 to 720,000 when we complete these projects. So in total, the increment is about 60,000 barrels a day of residual destruction incremental and about 110,000 barrels a day or so of incremental distillate.

Okay. And is that going to have any change in the crude or that will be relatively steady?

Well, that it all depended on the date - excuse me that the crude prices of the differentials when we get these projects complete. The other thing is that we have the flexibility to run about 70% of medium sours and heavier or 70% sweet. And every day we're going to optimize based on where the crude diffs are. So we're going to have tremendous flexibility to run a very high medium sour, heavy slate and residual destruction. But if the sweet markets are if you optimize with sweet then will be able to run sweet, but that's the benefit in our system is that we can go either direction.

Gary, you always been the statement for the industry, so any update about the temperature in DC related to the reform RFS, is that any remote sense that we may see something happen?

Let me ask Don to talk about this. Don's been very involved here recently meeting with a number of people in DC. And yes we are very, very involved in this. But let me have done to give you the details on the update.

Sure, Paul. We have consistently believed that the RFS is broken and we need either significant reform or repeal. MPC has always been focused on a long term solution that in our view permanently addresses all the issues and problems with the RFS. Clearly the PES situation recently has that maybe put a little bit more focus on RIMs and the RFS. But our view is that you need to have a long term solution. And we're actually, fairly optimistic or optimistic about the legislative efforts that are ongoing in Washington D.C. led by Senator Cornyn and others and we think it will result in a solution that I think has some short term relief but more importantly has a long term solution to RFS eliminating the mandate and allowing our transportation fuels and other transportation fuels to be able to participate in a free market.

Don, Can you elaborate a little bit more in terms of what are changes that you guys think that it may happen?

Well, I mean we've actually we've been having dialogue with a number of legislators and I guess we have some perspectives on things that we think will work. They've been - I think they need to make sure that they have a solution that works for the energy industry that works for the corn ethanol industry. So I think there's lots of perspectives that are currently being considered. We are hopeful that we should see legislation in the not too distant future Paul, but I think it's premature for us to try to speculate as to what that will be since a number of legislators are working on that.

And Paul, I can say that we have the right legislators at the table working on this. Senators Cornyn and Cruz along with Grassley and Ernst. Grassley and Ernst being from the Corn Belt states are all very involved. So we're both sides of the table working on this. And then on the house side, The Chairman, Walden along with our Congressman Shimkus are very, very involved. So they are the right people at the table trying to get this issue off a high center. And I'm fairly confident that we're going to get there this spring.

Thank you.

Thank you. Our next question is from Phil Gresh from JP Morgan.

Yeah. Hi, good morning. First question, I apologize if I missed it, I don't think you started. Do you have a new effective tax rate guidance that you think about following the tax reform and also perhaps how you might think about cash flow benefits from the tax reform, others have commented on the cashless side actually cash taxes trending below these book tax rates, so any thoughts there?

Yeah, Phil. We think that the effective tax rate is probably going to be a couple points below statutory in a going forward basis so we sort of guide you in that direction. We haven't given specific guidance as to the cash tax benefits but we have looked at 2017 sort of as if basis with tax reform and it's something in the order of $400 million to $500 million savings of cash taxes so again we're not giving specific forecast but it's certainly of that order of magnitude as we go forward.

Okay. That's helpful. Thanks. And then the second question would just be around capital allocation of the free cash flow above and beyond understanding capital spending and projects that you've highlighted, as you look at 2018, you think about the buybacks that you've completed in 2017 and where the balance sheet that. Is 2017 the right order of magnitude we thinking about from a buyback perspective then in this type of market or any color would be helpful?

Sure. Yeah and again we're not giving specific guidance but what we did indicate is that after tax cash proceeds from the drops which are closing today beyond what any adjustments we need to make to capital structure to support the investment grade credit profile would generally be targeted at some form of shareholder return. So again I would use that as your guide in terms of what you think the year could be, but it is share purchase continues to be an important vehicle for us to get capital back to shareholders. We think it is very tax efficient and I think you'll continue to see you know substantial activity there.

And how much is the tax and leakage at this point I think you at one point you talk about I think the exact numbers are getting back I guess with the new tax rates?

Yeah. I think Phil probably the best thing to do would be to just adjust down based on the new tax rates from where we're at in terms of what the absolute leakage around the distributions would be. We haven't given specific guidance as a lot of allocation work that's got to be done in order to determine what that will look like but I think at a macro level taking the new statutory rates at what we provided before is probably a pretty good starting point.

Okay. And last one, Gary any thoughts in M&A environment you seems reasonably upbeat on the last call particularly around retail midstream?

Well, there continues to be opportunities in the midstream. I think the number at the year, I would expect the midstream positions probably to heat up. We're very bullish on the midstream when you look at the couple of our biggest customers on the production side that they're talking about the big increase and drilling activity over the next couple years. We're bullish on the in the Marcellus, Utica area that we've seen very strong growth in both of those arenas. On top of that the Permian, overtime, there's been a number of assets put in place I think specifically were put in place eventually to put on the market does a more single one-off type assets. We continue to look at a number of those, but I think both in midstream and in retail, there are going to be some opportunities during 2018.

Thanks, Gary.

Thank you. Our next question is from Brad Heffern from RBC Capital Markets.

Good morning, everyone. Just following-up on Phil's question about taxes, what's the reason that you guys would end up being below the statutory rate, is that just the new higher bonus depreciation?

Brad, the biggest piece is really the income allocation that we make to the publicly held units and MPLX so that that is even without tax reform there would have been a big impact on the effective tax rate. So that's the biggest driver of that to a couple of point difference between statutory and our effective guidance.

Okay. So at the corporate level you know excluding that MPLX impact as it just basically modelling you know around the statutory rate?

That's probably the right way to start it, yeah and that's sort of the marginal statutory rate.

Okay, thanks for the color. And then Gary, you know obviously you've been focused on this value unlocking plan for the past year, 18 months and it's coming to an end year. Can you talk a little bit about from a corporate strategy standpoint, what we're going to be thinking about for MPC going forward, you know, there going to be a greater focus on Midstream or Speedway or we're going to talking about cash returns, just sort of what's the theme for 2018?

The answer is yes. You know I've been very clear in the presentations we made at the end of the year and in our presentation today. And we are increasing the capital budget by $150 million in Speedway this year from 3.80 to 5.30, a very strong - and I'll ask Mike Hennigan to talk in a second here about what he sees on the Midstream side and Tim just answered on our return to shareholders. If you look since the beginning of MPC and specifically in 2017, very, very strong returns to shareholders both in dividends and share buybacks. You will continue to see as Tim just highlighted a significant amount of the after tax proceeds we received for these drops, it's going to be available for capital return to shareholders. Beyond that we see some very strong opportunities, Kristina's first question of the day a very strong opportunities in the refining side mainly around distillates production in our refineries. And let ask Mike here to talk about what he is seeing in the Midstream side.

Hey Brad. We're pretty bullish our organic capital plan for 2018 if you noticed we disclosed about $2 billion of capital spend. That comprises eight processing plants, six up in the Marcellus, Utica as Gary mentioned, one in the Stack and one in the Permian. So we're in the right locations as far as shale development. We're also going to add a fractionator up in the Marcellus area. We are going to add two of euthanizes up in the Marcellus which I think is another opportunity to starting to reveal itself ethane up in the North East. In addition to that, we're expanding crude pipelines Ozark up in the mid-continent as well as Wood River over to Patoka as well. So we have a pretty full plate, execution will be a high priority for MPLX in 2018 as far as the identified capital. And then we have a couple of other opportunities that we're working on that will give some more diversified cash flows. So it's exciting time to be in Midstream and we're trying to get after it.

Great, thanks for all the color.

Thank you. Our next question is from Neil Mehta from Goldman Sachs.

Good morning, Tim. Thanks for taking the question. Gary, on same store sales in January, I am sorry if missed that, did you say they were down 1.7%, was there anything funky in there if that was the number or that a function of some macro-trend that you are seeing in gasoline and any comments in terms of the gasoline outlook here distillates definitely looks very bullish but just to start on the gasoline product side?

Yes, just it is very bullish but and Tony can give you more color but it's - let's hope it's non-recurring but it was the tremendous weather issues we had across the entire southeast, the southwest added as well but mainly the southeast all the way up to New York to region where you live. And then we had it across entire Ohio valley. But we've had two to three major ice storms and things just we're shutdown. And I think that proves out, if you look at this week's inventory number in the build in crude oil, it's just less of refineries not being able to run, fall out, a number of refineries having temporary blips mostly due to power outage, but all this kind of works together. I think it is a very temporary thing. The other thing that Tony can speak to is we've had a very swift rising crude price and you have to be able to get that price to the street. So Tony, you want to how many restorations you've seen so far this year.

Hi Gary. I think the two comments you've made is essentially the entire reason the same store is down as we are seeing it so far. Storm is the biggest impact, but as we see this rising commodity price environment, our wholesale cost has moved up in line with the rising crude prices. So in our efforts to pass that rising cost on to the street. We do incur some volume impact as a result of try to more or restore margins as well call it back to the levels where we think is appropriate given the environment.

Neil, let me say to your question and we had this in conference as well. I need the biggest macro change that you have seen in 2017 is that gasoline demand has outpaced where the expectations of the prognosticators are in the market. So outperformed very nicely in 2017. We would expect that to continue. Distillate continues to outperform. So both of those with the days of supply being very much in checked both gasoline and distillate as compared to five year average. I think build is very, very well on a macro standpoint for the refining industry.

I appreciate that Gary. One of the other things you talked about when we cut up a couple of weeks ago that you are generally constructive on the oil macro, those are view in 2017 as well and you are right. Can you just talk about the broader oil view that you had and then also talk about as one of the largest buyers OPEC buyers in the U.S. any thoughts on Saudi and OPEC going into through the year in terms of compliance?

Yeah, from a macro standpoint Neil, if you look at the crude inventories, very much in line and looking at a just over the last years a significant I would say rebalancing of crude oil across the entire system. So at your conference, we talked about where we think prices will be for the year and since your conference, I even becoming more bullish on where I think crude prices are going to go because of the resilience of the market, how the oil producers are continuing to I think be more constrained about incremental production coming into the market. And I think on the U.S. production side, there is a very strong view of that they need to be careful on running too fast, too quickly in the marketplace. So I think you are going to see probably will get north of 70 this year on the crude price which I think boards well for the total utilization of refineries, they boards well for the drill bit that's going to satisfy the NGL producers and those markets as well. So I think from a macro standpoint, it's going to be a strong year. Now the caveat to that is when you continue to see an increase in price, you have to get that price to the street, going to have to get to the wholesale level as well as retail level. However, inventories are in check and are in very good shape. And when you look at the first part of the year, I think they are going to see more turnarounds in the entire refining system and we very - some that are scheduled here in pad 2 earlier in the year than you would anticipate. And I think that again is going to put a very good balance underlying the refining system. Let me ask Mike to talk here about what he sees as far as OPEC supply coming into the market.

Yeah, Gary, I think you said it well. I mean OPEC is doing a great job with their production. Again Saudi Arabia kind of the king pin they basically said that they need to continue to constraining their full production through 2018. And I think they will. From our standpoint, we've had no problem replacing the term crude out of the Arabian Gulf that is no longer economic to us with other grades. We have tremendous flexibility within our refining system we can process the very heavy high sulfur, high acid crudes that not everyone can. So that's been a positive for us.

Thanks, everyone.

Thank you. Our next question is from Doug Leggate from Bank of America Merrill Lynch.

Thank you. Hi, good morning, everybody. Gary, I think it's the first time you've spoken this year, so happy New Year. Gary, the tax on the benefit on your cash flow, how does that change you are thinking about a more aggressive step up in your dividend versus buybacks going forward?

Doug, Happy New Year to you as well. I think we outlined it before that we see capital investment some new opportunities in refining, but the further advancement in retail and in our midstream space from an investment side, we've been very aggressive in capital return to shareholders in 2107. We accelerated our dividend from July now to early January here and a significant increase in our dividend. So we will continue that type of cadence as we see fit. We have great investment opportunities as well as we have great opportunities. And I think it's a good investment we all do here in returning capital to shareholders. So we will continue to stay on top of our game as we look to return of capital to shareholders.

A nice one for sure. I guess I really only have one other the big picture question Gary and like several of the guys over there if I could take advantage of your macro view and it really goes back to IMO and one of the things we're kind of thinking is that there are still some regions of the world with utilization rates and the diesel margins really improve as much as some folks think we could. My concern I guess is that we see a step up in utilization for example in Europe at the expense of gasoline supply in the Atlantic based meaning we end up what we supply in the gasoline markets. I was just wondering how much you thought about the scenarios as to how just can alternately play out in let's say at $70 oil world which I guess also changes the economics for shipping, decisions as always discover and so on. So I am just wondering how - what are the kind of scenarios you're thinking about best case, worst case for the IMO outcome? And I'll it there. Thanks.

Yes, Doug. We thought about those scenarios as well. One of the things that you have to look at in Europe and it is starting in the U.K. it's going to happen so other countries in Europe as well. But they're going to become more of a sponge for gasoline going forward. As you know it's always been historically that they pushed diesel into the marketplace and those benefits are have gone away. So I do think that you're going to see more demand for gasoline. And the other thing is our exports, if you look at the rate of change of exports from the Gulf Coast, gasoline is becoming more and more prominent in the exports was to Latin America, South America, West Africa or into Europe. So Europe is still predominantly diesel, but it's going to increase. So yes, we look at those scenarios and we will continue to watch those very carefully. But right now, I think we are not only speak for MPC, we are very, very well positioned for this IMO changes coming. And if gasoline continues to pick up that's why we're investing in further distribution of capabilities both in Galveston Bay and Garyville to be able to take bigger cargoes of gasoline.

I appreciate the full answer Gary and congrats on a great year. Thanks again.

Thanks, Doug.

Thank you. We do have time for one final question. Our last question today is from Roger Read from Wells Fargo.

Yeah. Thank you. Good morning.

Hi, Roger.

Hey Gary. Just if we could catch up a little more on the retail since that's where your kind of incremental investments are coming on presuming didn't need the tax reform to make that happen. But with the slower growth we've seen in terms of I know January weather, but if you look at Q4 right on a per store basis, retail was down and the merchandise excuse me was down, in the fields were down. Is that a function of why you need to repurpose some of the stores or upgrade them I guess was the term used? And then as we think about expansion is that a function of new markets or better locations within existing markets, just going to understand want to understand if it's a regional growth story or stepping into a new region? And then the last part of the retail question since it was asked about midstream any retail acquisitions that are possible or look attractive in this environment?

Sure. Tony, you want to take Roger's first questions and I will take rest.

I'd be happy to Gary. First of all let me remind you the comps you're looking at when you mention the trends in the fourth quarter and actually for the full year, remember we formed this joint venture with pilot, so we moved sales margin expenses out of the detailed categories into an equity earnings component. So you will see some natural variances on those just because of the formation of venture. However, your point is correct there is some softness in what we look at is transaction counts inside of our store. But again, we think that our plans, the technology investment, our loyalty program, the focus on the consumer that we have, those are all and actually the priorities and some of the growth areas and some of the store that we're investing that capital that Gary mentioned earlier, will be around so high growth areas like food service for example in convenience store. I think we've got a very good program to continue to grow and invest on the remodel part of that capital that Gary talked about. As far as the new builds, rebuilds, our focus is going to continue to be and we've consistently said this. We're going to be in the footprint of MPC's supply chain. I mean that's part of the synergies and the value that we have seen over the years that we continue to tell the market about in terms of the integration benefits of Speedway with MPC supply. So when you look at our footprint, you look at our foothold in the Midwest and some of the new markets we have on our eastern markets. Those are really good MPC supply areas and therefore we want to take advantage of those synergies by investing our stores where we can take advantage of the synergies with supply. And the last point on acquisitions. We don't say anything specific about that. But the industry as a whole my observation would be is that is consolidating, there needs to be some consolidation, it's a very fragmented convenient store industry, so I think there's going to be opportunities in the future to look at some acquisitions in our primary footprint.

Okay. Great. Thank you and I'll leave it there.

Thank you.

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

Thank you and that's conclude today's conference. You may disconnect at this time.