FINDLAY, Ohio, Aug. 3, 2020 /PRNewswire/ --
- Reported second-quarter income of $9
million, or $0.01 per
diluted share, including net pre-tax benefit of $1.4 billion; adjusted loss of $868 million, or $(1.33) per diluted share
- Announced agreement to sell Speedway in $21 billion all-cash transaction; estimated
after-tax proceeds of $16.5 billion
expected to be used to both
strengthen the balance sheet and return capital to
shareholders
- Indefinitely idling Gallup and Martinez refineries; evaluating strategic
repositioning of Martinez to
renewable diesel facility
- On track to deliver $1.4
billion of capital spending and at least $950 million of operating expense
reductions
- Significant liquidity with $7.7
billion of available borrowing capacity at MPC
Marathon Petroleum Corp. (NYSE: MPC) today reported net income
of $9 million, or $0.01 per diluted share, for the second quarter
of 2020, compared to $1.1 billion, or
$1.66 per diluted share, for the
second quarter of 2019.
Second-quarter 2020 results include a pre-tax lower of cost or
market (LCM) inventory benefit of $1.5
billion. Details on this and other adjustments are shown in
the accompanying release tables. Adjusted net loss was $868 million, or $(1.33) per diluted share, for the second quarter
of 2020, compared to adjusted net income of $1.1 billion, or $1.73 per diluted share, for the second quarter
of 2019.
"Our second quarter results reflect a full three months of the
challenges COVID has created for our business," said President and
Chief Executive Officer Michael J.
Hennigan. "We began April with demand at historic lows.
Despite seeing some recovery during the quarter, demand for our
products and services continues to be significantly depressed,
particularly across the West Coast and Midwest.
"In response, we are executing on the actions we announced in
May and are advancing the three strategic priorities which lay the
foundation for our long-term success. First, we strengthened the
competitive position of our assets with the decision to
indefinitely idle our Gallup and Martinez refineries, and are evaluating
strategic repositioning possibilities for Martinez. Second, we began implementing
commercial strategy changes and I've been encouraged by the team's
quick progress. And third, we lowered our capital spending and
tightly managed our operating expenses. I'm confident we will meet
the $950 million expense reduction
target we previously announced for 2020. We are also implementing
plans to structurally lower costs in 2021 and beyond."
Segment Results
Income from operations was $981
million in the second quarter of 2020, compared to
$2.0 billion in the second quarter of
2019. Second quarter 2020 results include a pre-tax LCM inventory
benefit of $1.5 billion.
|
Three Months
Ended
June 30,
|
(In
millions)
|
|
2020
|
|
|
2019
|
Income (loss) from
operations by segment:
|
|
|
|
|
|
Refining &
Marketing
|
$
|
(1,619)
|
|
|
$
|
906
|
|
Retail
|
|
494
|
|
|
|
493
|
|
Midstream
|
|
869
|
|
|
|
878
|
|
Corporate
|
|
(188)
|
|
|
|
(179)
|
|
Income (loss) from
operations before items not allocated to segments
|
|
(444)
|
|
|
|
2,098
|
|
|
|
|
|
|
|
Items not allocated
to segments:
|
|
|
|
|
|
Transaction-related costs
|
|
(30)
|
|
|
|
(34)
|
|
Litigation
|
|
—
|
|
|
|
(22)
|
|
Impairments
|
|
(25)
|
|
|
|
—
|
|
LCM inventory valuation adjustment
|
|
1,480
|
|
|
|
—
|
|
Income from
operations
|
$
|
981
|
|
|
$
|
2,042
|
|
Adjusted earnings before interest, taxes, depreciation, and
amortization (adjusted EBITDA) was $653
million in the second quarter of 2020, compared to
$3.2 billion for the second quarter
of 2019. Adjusted EBITDA excludes refining planned turnaround costs
of $162 million for the second
quarter of 2020 and $237 million for
the second quarter of 2019.
Reconciliation of
Segment Income (Loss) From Operations to Segment Adjusted EBITDA
and
Adjusted EBITDA
|
|
|
Three Months
Ended
June 30,
|
(In
millions)
|
|
2020
|
|
|
2019
|
Refining &
Marketing Segment
|
|
|
|
|
|
Segment income (loss)
from operations
|
$
|
(1,619)
|
|
|
$
|
906
|
|
Add: Depreciation and
amortization
|
|
433
|
|
|
|
411
|
|
Refining
planned turnaround costs
|
|
162
|
|
|
|
237
|
|
Segment Adjusted
EBITDA
|
$
|
(1,024)
|
|
|
$
|
1,554
|
|
Retail
Segment
|
|
|
|
|
|
Segment income from
operations
|
$
|
494
|
|
|
$
|
493
|
|
Add: Depreciation and
amortization
|
|
132
|
|
|
|
130
|
|
Segment
EBITDA
|
$
|
626
|
|
|
$
|
623
|
|
Midstream
Segment
|
|
|
|
|
|
Segment income from
operations
|
$
|
869
|
|
|
$
|
878
|
|
Add: Depreciation and
amortization
|
|
330
|
|
|
|
318
|
|
Segment
EBITDA
|
$
|
1,199
|
|
|
$
|
1,196
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA
|
$
|
801
|
|
|
$
|
3,373
|
|
Corporate
|
|
(188)
|
|
|
|
(179)
|
|
Add: Depreciation and
amortization
|
|
40
|
|
|
|
27
|
|
Adjusted
EBITDA
|
$
|
653
|
|
|
$
|
3,221
|
|
Refining & Marketing (R&M)
R&M segment loss from operations was $1.6 billion in the second quarter of 2020,
compared with income of $906 million
for the second quarter of 2019. The decrease in R&M earnings
was primarily due to reduced throughput and lower crack spreads
driven by lower demand associated with COVID-19, and lower crude
differentials.
Segment adjusted EBITDA was $(1.0)
billion in the second quarter of 2020, versus $1.6 billion for the second quarter of 2019.
Segment adjusted EBITDA excludes refinery planned turnaround costs,
which totaled $162 million in the
second quarter of 2020 and $237
million in the second quarter of 2019.
R&M margin was $7.13 per
barrel for the second quarter of 2020. Crude capacity utilization
was 71%, resulting in total throughputs of 2.3 million barrels per
day, and clean product yield was 84%.
Retail
Retail segment income from operations was $494 million in the second quarter of 2020,
compared with $493 million for the
second quarter of 2019. Segment EBITDA was $626 million in the second quarter of 2020,
versus $623 million for the second
quarter of 2019. Quarterly results reflected lower fuel volumes,
higher fuel margin per gallon, and operating cost reductions.
Retail fuel margin increased to 39.60
cents per gallon in the second quarter of 2020, from
26.66 cents per gallon in the second
quarter of 2019. Same-store merchandise sales decreased by 4%
year-over-year and same-store gasoline sales volume decreased by
37% year-over-year.
Midstream
Midstream segment income from operations, which primarily
reflects the results of MPLX LP (NYSE: MPLX), was $869 million in the second quarter of 2020,
compared with $878 million for the
second quarter of 2019.
Segment EBITDA was $1.2 billion in
the second quarter of 2020, versus $1.2
billion for the second quarter of 2019. Strong performance
in the midstream segment in the current business environment was
driven by stable, fee-based earnings, contributions from organic
growth projects, and reduced operating expenses.
Corporate and Items Not Allocated to Segments
Corporate expenses totaled $188
million in the second quarter of 2020, compared to
$179 million in the second quarter of
2019. Items not allocated to segments totaled $1.4 billion of income in the second quarter of
2020, compared with $56 million of
expense in the second quarter of 2019. Second-quarter 2020 results
include a $1.5 billion LCM inventory
benefit, $25 million of impairment
expense related to long-lived assets and $30
million of costs incurred in connection with the Speedway
separation and other related activities. Second quarter 2019
results include $34 million of
transaction-related expenses in connection with the Andeavor
acquisition and $22 million of
litigation charges.
Financial Position and Liquidity
As of June 30, 2020, the company
had $1.0 billion in cash and cash
equivalents (excluding MPLX's cash and cash equivalents of
$67 million), $5 billion available under a five-year bank
revolving credit facility, $2 billion
available under its two 364-day bank revolving credit facilities
and $705 million available under its
trade receivables securitization facility.
The company previously reported that it drew $2 billion on the five-year revolving credit
facility in the first quarter of 2020, plus an additional
$1.5 billion in April 2020. These borrowings were made to provide
financial flexibility given the commodity price downturn and the
significant working capital impact associated with the decline in
crude oil prices. In late April, the company added an additional
$1 billion 364-day revolver. Also, in
late April, the company issued $2.5
billion of senior notes. Net proceeds from the senior notes
issuance were used to repay a portion of the amounts outstanding on
the five-year revolving credit facility. In June, the company
completely repaid all amounts outstanding on the five-year
revolving credit facility.
Strategic and Operations Update
Yesterday, the company announced an agreement with 7-Eleven to
sell Speedway for $21 billion in
cash. The company expects to use proceeds from the sale to
strengthen the balance sheet and return capital to
shareholders. The arrangement includes a 15-year fuel supply
agreement for approximately 7.7 billion gallons of fuel per year
and the opportunity to supply additional 7-Eleven
locations.
The company also announced the indefinite idling of the Gallup
and Martinez refineries, and
announced it is evaluating the strategic repositioning of
Martinez to a renewable diesel
facility.
Construction continues on the Dickinson Renewable Diesel
project, which remains on schedule for planned completion in late
2020. The project will convert the Dickinson refinery into a 12,000
barrel per day biorefinery capable of producing renewable diesel
from corn and soybean oil. MPC intends to sell the renewable diesel
into the California market to
comply with the California Low Carbon Fuel Standard.
Consistent with MPC's midstream strategy of developing long-haul
pipelines and other logistics solutions, the company progressed
several projects during the quarter, including the Wink-to-Webster
crude oil pipeline, the Whistler natural gas pipeline, and the
reversal of the Capline crude pipeline. Each of these projects is
backed by minimum volume commitments from customers.
In addition, the South Texas Gateway terminal began crude oil
export operations in July. MPC owns a 25% interest in the South
Texas Gateway terminal.
Third Quarter 2020 Outlook
Refining &
Marketing Segment:
|
|
|
Refining operating
costs per barrel(a)
|
$
|
6.50
|
|
Distribution costs
(in millions)
|
$
|
1,285
|
|
Refining planned
turnaround costs (in millions)
|
$
|
270
|
|
Depreciation and
amortization (in millions)
|
$
|
440
|
|
|
|
|
Refinery throughputs
(mbpd):
|
|
|
Crude oil refined
|
|
2,215
|
|
Other charge and blendstocks
|
|
130
|
|
Total
|
|
2,345
|
|
|
|
|
|
|
(a)
|
Includes refining
major maintenance and operating costs. Excludes turnaround and
depreciation and amortization expenses.
|
|
|
|
|
Retail
Segment:
|
Range
|
Fuel sales (millions
of gallons)
|
|
2,000
|
|
|
2,200
|
Merchandise sales (in
millions)
|
$
|
1,700
|
|
$
|
1,800
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and
unallocated items (in millions)
|
|
|
|
$
|
195
|
Conference Call
At 9:30 a.m. EDT today, MPC will
hold a conference call and webcast to discuss the reported results
and provide an update on company operations. Interested parties may
listen by visiting MPC's website
at http://www.marathonpetroleum.com and clicking on the "Join
the Webcast" link. A replay of the webcast will be available on the
company's website for two weeks. Financial information, including
the earnings release and other investor-related material, will also
be available online prior to the conference call and webcast
at https://www.marathonpetroleum.com.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (MPC) is a leading, integrated,
downstream energy company headquartered in Findlay, Ohio. The company operates the
nation's largest refining system. MPC's marketing system includes
branded locations across the United
States, including Marathon brand retail outlets. Speedway
LLC, an MPC subsidiary, owns and operates retail convenience stores
across the United States. MPC also
owns the general partner and majority limited partner interest in
MPLX LP, a midstream company that owns and operates gathering,
processing, and fractionation assets, as well as crude oil and
light product transportation and logistics infrastructure. More
information is available at www.marathonpetroleum.com.
Investor Relations Contacts: (419)
421-2071
Kristina Kazarian,
Vice President, Investor Relations
Taryn Erie, Manager, Investor
Relations
Brian Worthington, Manager, Investor
Relations
Media Contacts:
Hamish
Banks, Vice President, Communications (419) 421-2521
Jamal Kheiry, Manager, Communications (419) 421-3312
References to Earnings and Defined Terms
References
to earnings mean net income attributable to MPC from the statements
of income. Unless otherwise indicated, references to earnings and
earnings per share are MPC's share after excluding amounts
attributable to noncontrolling interests.
Forward-Looking Statements
This press release
contains forward-looking statements within the meaning of federal
securities laws regarding Marathon Petroleum Corporation (MPC).
These forward-looking statements relate to, among other things,
expectations, estimates and projections concerning the business and
operations, strategy and value creation plans of MPC. In accordance
with "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995, these statements are accompanied by cautionary
language identifying important factors, though not necessarily all
such factors, that could cause future outcomes to differ materially
from those set forth in the forward-looking statements. You can
identify forward-looking statements by words such as "anticipate,"
"believe," "commitment," "could," "design," "estimate," "expect,"
"forecast," "goal," "guidance," "imply," "intend," "may,"
"objective," "opportunity," "outlook," "plan," "policy,"
"position," "potential," "predict," "priority," "project,"
"proposition," "prospective," "pursue," "seek," "should,"
"strategy," "target," "would," "will" or other similar expressions
that convey the uncertainty of future events or outcomes. Such
forward-looking statements are not guarantees of future performance
and are subject to risks, uncertainties and other factors, some of
which are beyond the company's control and are difficult to
predict. Factors that could cause MPC's actual results to differ
materially from those implied in the forward-looking statements
include but are not limited to: the effects of the recent outbreak
of COVID-19 and the adverse impact thereof on our business,
financial condition, results of operations and cash flows,
including, but not limited to, our growth, operating costs, labor
availability, logistical capabilities, customer demand for our
products and industry demand generally, margins, inventory value,
cash position, taxes, the price of our securities and trading
markets with respect thereto, our ability to access capital
markets, and the global economy and financial markets generally;
the effects of the recent outbreak of COVID-19, and the current
economic environment generally, on our working capital, cash flows
and liquidity, which can be significantly affected by decreases in
commodity prices; our ability to reduce capital and operating
expenses; with respect to the planned Speedway sale, the ability to
successfully complete the sale within the expected timeframe or at
all, based on numerous factors, including our ability to satisfy
customary conditions, including obtaining regulatory approvals on
the proposed terms and schedule, and any conditions imposed in
connection with the consummation of the transaction, our ability to
utilize the proceeds as anticipated, and our ability to capture
value from the associated on-going supply relationship and realize
the other expected benefits; the risk that the cost savings and any
other synergies from the Andeavor transaction may not be fully
realized or may take longer to realize than expected; disruption
from the Andeavor transaction making it more difficult to maintain
relationships with customers, employees or suppliers; risks
relating to any unforeseen liabilities of Andeavor; risks related
to the acquisition of Andeavor Logistics LP by MPLX LP (MPLX),
including the risk that anticipated opportunities and any other
synergies from or anticipated benefits of the transaction may not
be fully realized or may take longer to realize than expected,
including whether the transaction will be accretive within the
expected timeframe or at all, or disruption from the transaction
making it more difficult to maintain relationships with customers,
employees or suppliers; the risk of further impairments; the
ability to complete any divestitures on commercially reasonable
terms and/or within the expected timeframe, and the effects of any
such divestitures on the business, financial condition, results of
operations and cash flows; future levels of revenues, refining and
marketing margins, operating costs, retail gasoline and distillate
margins, merchandise margins, income from operations, net income
and earnings per share; the regional, national and worldwide
availability and pricing of refined products, crude oil, natural
gas, NGLs and other feedstocks; consumer demand for refined
products; the ability to manage disruptions in credit markets or
changes to credit ratings; future levels of capital, environmental
and maintenance expenditures; general and administrative and other
expenses; the success or timing of completion of ongoing or
anticipated capital or maintenance projects; the reliability of
processing units and other equipment; business strategies, growth
opportunities and expected investment; share repurchase
authorizations, including the timing and amounts of such
repurchases; the adequacy of capital resources and liquidity,
including availability, timing and amounts of free cash flow
necessary to execute business plans and to effect any share
repurchases or to maintain or increase the dividend; the effect of
restructuring or reorganization of business components; the
potential effects of judicial or other proceedings on the business,
financial condition, results of operations and cash flows;
continued or further volatility in and/or degradation of general
economic, market, industry or business conditions as a result of
the COVID-19 pandemic, other infectious disease outbreaks or
otherwise; non-payment or non-performance by our producer and other
customers; compliance with federal and state environmental,
economic, health and safety, energy and other policies and
regulations, including the cost of compliance with the Renewable
Fuel Standard, and/or enforcement actions initiated thereunder; the
anticipated effects of actions of third parties such as
competitors, activist investors or federal, foreign, state or local
regulatory authorities or plaintiffs in litigation; the impact of
adverse market conditions or other similar risks to those
identified herein affecting MPLX; and the factors set forth under
the heading "Risk Factors" in MPC's Annual Report on Form 10-K for
the year ended Dec. 31, 2019, and in
Forms 10-Q and other filings, filed with the SEC. Copies of MPC's
Form 10-K, Forms 10-Q and other SEC filings are available on the
SEC's website, MPC's website at
https://www.marathonpetroleum.com/Investors/ or by contacting MPC's
Investor Relations office. Copies of MPLX's Form 10-K, Forms 10-Q
and other SEC filings are available on the SEC's website, MPLX's
website at http://ir.mplx.com or by contacting MPLX's Investor
Relations office.
We have based our forward-looking statements on our current
expectations, estimates and projections about our business and
industry. We caution that these statements are not guarantees of
future performance and you should not rely unduly on them, as they
involve risks, uncertainties, and assumptions that we cannot
predict. In addition, we have based many of these forward-looking
statements on assumptions about future events that may prove to be
inaccurate. While our management considers these assumptions to be
reasonable, they are inherently subject to significant business,
economic, competitive, regulatory and other risks, contingencies
and uncertainties, most of which are difficult to predict and many
of which are beyond our control. Accordingly, our actual results
may differ materially from the future performance that we have
expressed or forecast in our forward-looking statements. We
undertake no obligation to update any forward-looking statements
except to the extent required by applicable law.
Consolidated
Statements of Income (Unaudited)
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
(In millions,
except per-share data)
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
Revenues and other
income:
|
|
|
|
|
|
|
|
|
|
|
|
Sales and other operating revenues
|
$
|
15,024
|
|
|
$
|
33,529
|
|
|
$
|
40,239
|
|
|
$
|
61,782
|
|
Income (loss) from equity method
investments(a)
|
|
105
|
|
|
|
107
|
|
|
|
(1,105)
|
|
|
|
206
|
|
Net gain on disposal of assets
|
|
2
|
|
|
|
4
|
|
|
|
6
|
|
|
|
218
|
|
Other income
|
|
67
|
|
|
|
30
|
|
|
|
138
|
|
|
|
65
|
|
Total
revenues and other income
|
|
15,198
|
|
|
|
33,670
|
|
|
|
39,278
|
|
|
|
62,271
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues (excludes items below)
|
|
13,777
|
|
|
|
29,682
|
|
|
|
36,598
|
|
|
|
55,642
|
|
LCM inventory valuation adjustment
|
|
(1,480)
|
|
|
|
—
|
|
|
|
1,740
|
|
|
|
—
|
|
Impairment expense
|
|
25
|
|
|
|
—
|
|
|
|
7,847
|
|
|
|
—
|
|
Depreciation and amortization
|
|
935
|
|
|
|
886
|
|
|
|
1,897
|
|
|
|
1,805
|
|
Selling, general and administrative expenses
|
|
746
|
|
|
|
886
|
|
|
|
1,567
|
|
|
|
1,753
|
|
Other taxes
|
|
214
|
|
|
|
174
|
|
|
|
465
|
|
|
|
360
|
|
Total
costs and expenses
|
|
14,217
|
|
|
|
31,628
|
|
|
|
50,114
|
|
|
|
59,560
|
|
Income (loss) from
operations
|
|
981
|
|
|
|
2,042
|
|
|
|
(10,836)
|
|
|
|
2,711
|
|
Net interest and other financial costs
|
|
345
|
|
|
|
322
|
|
|
|
683
|
|
|
|
628
|
|
Income (loss)
before income taxes
|
|
636
|
|
|
|
1,720
|
|
|
|
(11,519)
|
|
|
|
2,083
|
|
Provision (benefit) for income taxes
|
|
360
|
|
|
|
353
|
|
|
|
(1,577)
|
|
|
|
457
|
|
Net income
(loss)
|
|
276
|
|
|
|
1,367
|
|
|
|
(9,942)
|
|
|
|
1,626
|
|
Less net income
(loss) attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
|
21
|
|
|
|
21
|
|
|
|
41
|
|
|
|
41
|
|
Noncontrolling
interests
|
|
246
|
|
|
|
240
|
|
|
|
(758)
|
|
|
|
486
|
|
Net income (loss)
attributable to MPC
|
$
|
9
|
|
|
$
|
1,106
|
|
|
$
|
(9,225)
|
|
|
$
|
1,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per-share
data
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to MPC per share
|
$
|
0.01
|
|
|
$
|
1.67
|
|
|
$
|
(14.21)
|
|
|
$
|
1.65
|
|
Weighted average shares outstanding
|
|
650
|
|
|
|
662
|
|
|
|
649
|
|
|
|
667
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to MPC per share
|
$
|
0.01
|
|
|
$
|
1.66
|
|
|
$
|
(14.21)
|
|
|
$
|
1.63
|
|
Weighted average shares outstanding
|
|
653
|
|
|
|
666
|
|
|
|
649
|
|
|
|
672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The 2020 YTD period
includes $1,315 million of impairment expense.
|
Income Summary
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
(In
millions)
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
Income (loss) from
operations by segment
|
|
|
|
|
|
|
|
|
|
|
|
Refining &
Marketing
|
$
|
(1,619)
|
|
|
$
|
906
|
|
|
$
|
(2,241)
|
|
|
$
|
572
|
|
Retail
|
|
494
|
|
|
|
493
|
|
|
|
1,013
|
|
|
|
663
|
|
Midstream
|
|
869
|
|
|
|
878
|
|
|
|
1,774
|
|
|
|
1,786
|
|
Corporate
|
|
(188)
|
|
|
|
(179)
|
|
|
|
(415)
|
|
|
|
(370)
|
|
Income (loss) from
operations before items not
allocated to segments
|
|
(444)
|
|
|
|
2,098
|
|
|
|
131
|
|
|
|
2,651
|
|
Items not allocated
to segments:
|
|
|
|
|
|
|
|
|
|
|
|
Equity method
investment restructuring gains(a)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
207
|
|
Transaction-related
costs(b)
|
|
(30)
|
|
|
|
(34)
|
|
|
|
(65)
|
|
|
|
(125)
|
|
Litigation
|
|
—
|
|
|
|
(22)
|
|
|
|
—
|
|
|
|
(22)
|
|
Impairments(c)
|
|
(25)
|
|
|
|
—
|
|
|
|
(9,162)
|
|
|
|
—
|
|
LCM inventory
valuation adjustment
|
|
1,480
|
|
|
|
—
|
|
|
|
(1,740)
|
|
|
|
—
|
|
Income (loss) from
operations
|
|
981
|
|
|
|
2,042
|
|
|
|
(10,836)
|
|
|
|
2,711
|
|
Net interest and
other financial costs
|
|
345
|
|
|
|
322
|
|
|
|
683
|
|
|
|
628
|
|
Income (loss)
before income taxes
|
|
636
|
|
|
|
1,720
|
|
|
|
(11,519)
|
|
|
|
2,083
|
|
Provision (benefit)
for income taxes
|
|
360
|
|
|
|
353
|
|
|
|
(1,577)
|
|
|
|
457
|
|
Net income
(loss)
|
|
276
|
|
|
|
1,367
|
|
|
|
(9,942)
|
|
|
|
1,626
|
|
Less net income
(loss) attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable
noncontrolling interest
|
|
21
|
|
|
|
21
|
|
|
|
41
|
|
|
|
41
|
|
Noncontrolling
interests
|
|
246
|
|
|
|
240
|
|
|
|
(758)
|
|
|
|
486
|
|
Net income (loss)
attributable to MPC
|
$
|
9
|
|
|
$
|
1,106
|
|
|
$
|
(9,225)
|
|
|
$
|
1,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Represents gain
related to the formation of a new joint venture: Capline
LLC in the 2019 YTD period.
|
(b)
|
2020 includes costs
incurred in connection with the Speedway separation and Midstream
strategic review. 2019 includes employee severance, retention and
other costs related to the acquisition of Andeavor.
|
(c)
|
Includes $7.3 billion
goodwill impairment, $1.3 billion impairment of equity method
investments and $517 million impairment of long lived assets in
2020 YTD period.
|
Capital
Expenditures and Investments (Unaudited)
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
(In
millions)
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
Refining &
Marketing
|
$
|
263
|
|
|
$
|
430
|
|
|
$
|
722
|
|
|
$
|
824
|
|
Retail
|
|
74
|
|
|
|
120
|
|
|
|
150
|
|
|
|
193
|
|
Midstream
|
|
425
|
|
|
|
814
|
|
|
|
899
|
|
|
|
1,637
|
|
Corporate(a)
|
|
45
|
|
|
|
38
|
|
|
|
101
|
|
|
|
79
|
|
Total
|
$
|
807
|
|
|
$
|
1,402
|
|
|
$
|
1,872
|
|
|
$
|
2,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes capitalized
interest of $27 million, $34 million, $56 million and $65 million,
respectively.
|
Refining &
Marketing Operating Statistics (Unaudited)
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
Dollar per barrel of
net refinery throughput:
|
|
|
|
|
|
|
|
|
|
|
|
Refining &
Marketing margin(a)
|
$
|
7.13
|
|
|
$
|
15.24
|
|
|
$
|
9.50
|
|
|
$
|
13.23
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Refining operating
costs(b)
|
|
6.13
|
|
|
|
5.35
|
|
|
|
6.06
|
|
|
|
5.47
|
|
Distribution
costs(c)
|
|
5.86
|
|
|
|
4.48
|
|
|
|
5.22
|
|
|
|
4.56
|
|
Refining planned
turnaround costs
|
|
0.78
|
|
|
|
0.83
|
|
|
|
1.02
|
|
|
|
0.75
|
|
Depreciation and
amortization
|
|
2.09
|
|
|
|
1.44
|
|
|
|
1.83
|
|
|
|
1.49
|
|
Plus
(Less):
|
|
|
|
|
|
|
|
|
|
|
|
Other(d)
|
|
(0.09)
|
|
|
|
0.04
|
|
|
|
(0.04)
|
|
|
|
0.06
|
|
Refining &
Marketing income (loss) from operations
|
$
|
(7.82)
|
|
|
$
|
3.18
|
|
|
$
|
(4.67)
|
|
|
$
|
1.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refining &
Marketing refined product sales volume
(mbpd)(e)
|
|
2,878
|
|
|
|
3,814
|
|
|
|
3,233
|
|
|
|
3,742
|
|
Crude oil capacity
utilization (percent)(f)
|
|
71
|
|
|
|
97
|
|
|
|
81
|
|
|
|
96
|
|
Refinery throughputs
(mbpd):(g)
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil refined
|
|
2,165
|
|
|
|
2,937
|
|
|
|
2,475
|
|
|
|
2,902
|
|
Other charge and blendstocks
|
|
111
|
|
|
|
198
|
|
|
|
160
|
|
|
|
207
|
|
Net refinery
throughput
|
|
2,276
|
|
|
|
3,135
|
|
|
|
2,635
|
|
|
|
3,109
|
|
Sour crude oil
throughput (percent)
|
|
53
|
|
|
|
47
|
|
|
|
50
|
|
|
|
49
|
|
Sweet crude oil
throughput (percent)
|
|
47
|
|
|
|
53
|
|
|
|
50
|
|
|
|
51
|
|
Refined product
yields (mbpd):(g)
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
1,114
|
|
|
|
1,528
|
|
|
|
1,301
|
|
|
|
1,531
|
|
Distillates
|
|
834
|
|
|
|
1,080
|
|
|
|
927
|
|
|
|
1,086
|
|
Propane
|
|
45
|
|
|
|
57
|
|
|
|
52
|
|
|
|
55
|
|
Feedstocks and special products
|
|
217
|
|
|
|
370
|
|
|
|
284
|
|
|
|
350
|
|
Heavy fuel oil
|
|
27
|
|
|
|
51
|
|
|
|
32
|
|
|
|
48
|
|
Asphalt
|
|
76
|
|
|
|
83
|
|
|
|
78
|
|
|
|
81
|
|
Total
|
|
2,313
|
|
|
|
3,169
|
|
|
|
2,674
|
|
|
|
3,151
|
|
|
|
(a)
|
Sales revenue less
cost of refinery inputs and purchased products, divided by net
refinery throughput.
|
(b)
|
Includes refining
major maintenance and operating costs. Excludes planned turnaround
and depreciation and amortization expense.
|
(c)
|
Includes fees paid to
MPLX, on a per barrel throughput basis, of $4.06, $2.80, $3.54 and
$2.81, respectively. Excludes depreciation and amortization
expense.
|
(d)
|
Includes income
(loss) from equity method investments, net gain (loss) on disposal
of assets and other income.
|
(e)
|
Includes intersegment
sales.
|
(f)
|
Based on calendar day
capacity, which is an annual average that includes downtime for
planned maintenance and other normal operating
activities.
|
(g)
|
Excludes
inter-refinery volumes of 70 mbpd,102 mbpd, 74 mbpd and 88 mbpd,
respectively.
|
Refining &
Marketing Operating Statistics by Region (Unaudited)
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
Gulf
Coast
|
|
|
|
|
|
|
|
|
|
|
|
Dollar per barrel of
refinery throughput:(a)
|
|
|
|
|
|
|
|
|
|
|
|
Refining &
Marketing margin(b)
|
$
|
5.22
|
|
|
$
|
9.32
|
|
|
$
|
7.15
|
|
|
$
|
8.58
|
|
Refining operating
costs(c)
|
|
5.03
|
|
|
|
4.03
|
|
|
|
4.62
|
|
|
|
3.95
|
|
Refining planned
turnaround costs
|
|
1.31
|
|
|
|
0.23
|
|
|
|
1.16
|
|
|
|
0.20
|
|
Refining depreciation
and amortization
|
|
1.69
|
|
|
|
1.03
|
|
|
|
1.42
|
|
|
|
1.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinery throughputs
(mbpd):(d)
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil refined
|
|
854
|
|
|
|
1,154
|
|
|
|
995
|
|
|
|
1,162
|
|
Other charge and blendstocks
|
|
116
|
|
|
|
177
|
|
|
|
140
|
|
|
|
173
|
|
Gross refinery
throughput
|
|
970
|
|
|
|
1,331
|
|
|
|
1,135
|
|
|
|
1,335
|
|
Sour crude oil
throughput (percent)
|
|
74
|
|
|
|
59
|
|
|
|
65
|
|
|
|
61
|
|
Sweet crude oil
throughput (percent)
|
|
26
|
|
|
|
41
|
|
|
|
35
|
|
|
|
39
|
|
Refined product
yields (mbpd):(d)
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
404
|
|
|
|
564
|
|
|
|
476
|
|
|
|
569
|
|
Distillates
|
|
346
|
|
|
|
440
|
|
|
|
381
|
|
|
|
443
|
|
Propane
|
|
22
|
|
|
|
29
|
|
|
|
26
|
|
|
|
28
|
|
Feedstocks and special products
|
|
201
|
|
|
|
293
|
|
|
|
251
|
|
|
|
293
|
|
Heavy fuel oil
|
|
11
|
|
|
|
15
|
|
|
|
11
|
|
|
|
14
|
|
Asphalt
|
|
18
|
|
|
|
21
|
|
|
|
19
|
|
|
|
21
|
|
Total
|
|
1,002
|
|
|
|
1,362
|
|
|
|
1,164
|
|
|
|
1,368
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid-Continent
|
|
|
|
|
|
|
|
|
|
|
|
Dollar per barrel of
refinery throughput:(a)
|
|
|
|
|
|
|
|
|
|
|
|
Refining &
Marketing margin(b)
|
$
|
9.49
|
|
|
$
|
20.21
|
|
|
$
|
11.42
|
|
|
$
|
17.84
|
|
Refining operating
costs(c)
|
|
5.02
|
|
|
|
4.82
|
|
|
|
5.47
|
|
|
|
5.21
|
|
Refining planned
turnaround costs
|
|
0.32
|
|
|
|
0.27
|
|
|
|
0.97
|
|
|
|
0.47
|
|
Refining depreciation
and amortization
|
|
1.91
|
|
|
|
1.46
|
|
|
|
1.83
|
|
|
|
1.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinery throughputs
(mbpd):(e)
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil refined
|
|
923
|
|
|
|
1,155
|
|
|
|
999
|
|
|
|
1,106
|
|
Other charge and blendstocks
|
|
34
|
|
|
|
48
|
|
|
|
46
|
|
|
|
52
|
|
Gross refinery
throughput
|
|
957
|
|
|
|
1,203
|
|
|
|
1,045
|
|
|
|
1,158
|
|
Sour crude oil
throughput (percent)
|
|
28
|
|
|
|
28
|
|
|
|
26
|
|
|
|
27
|
|
Sweet crude oil
throughput (percent)
|
|
72
|
|
|
|
72
|
|
|
|
74
|
|
|
|
73
|
|
Refined product
yields (mbpd):(e)
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
476
|
|
|
|
626
|
|
|
|
540
|
|
|
|
612
|
|
Distillates
|
|
340
|
|
|
|
412
|
|
|
|
365
|
|
|
|
400
|
|
Propane
|
|
17
|
|
|
|
20
|
|
|
|
18
|
|
|
|
19
|
|
Feedstocks and special products
|
|
59
|
|
|
|
71
|
|
|
|
55
|
|
|
|
55
|
|
Heavy fuel oil
|
|
11
|
|
|
|
16
|
|
|
|
13
|
|
|
|
16
|
|
Asphalt
|
|
57
|
|
|
|
61
|
|
|
|
58
|
|
|
|
59
|
|
Total
|
|
960
|
|
|
|
1,206
|
|
|
|
1,049
|
|
|
|
1,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
West
Coast
|
|
|
|
|
|
|
|
|
|
|
|
Dollar per barrel of
refinery throughput:(a)
|
|
|
|
|
|
|
|
|
|
|
|
Refining &
Marketing margin(b)
|
$
|
5.93
|
|
|
$
|
17.77
|
|
|
$
|
10.59
|
|
|
$
|
14.33
|
|
Refining operating
costs(c)
|
|
10.19
|
|
|
|
8.01
|
|
|
|
9.45
|
|
|
|
8.10
|
|
Refining planned
turnaround costs
|
|
0.45
|
|
|
|
2.80
|
|
|
|
0.70
|
|
|
|
2.18
|
|
Refining depreciation
and amortization
|
|
1.81
|
|
|
|
1.29
|
|
|
|
1.48
|
|
|
|
1.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinery throughputs
(mbpd):(f)
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil refined
|
|
388
|
|
|
|
628
|
|
|
|
481
|
|
|
|
634
|
|
Other charge and blendstocks
|
|
31
|
|
|
|
75
|
|
|
|
48
|
|
|
|
70
|
|
Gross refinery
throughput
|
|
419
|
|
|
|
703
|
|
|
|
529
|
|
|
|
704
|
|
Sour crude oil
throughput (percent)
|
|
64
|
|
|
|
58
|
|
|
|
70
|
|
|
|
66
|
|
Sweet crude oil
throughput (percent)
|
|
36
|
|
|
|
42
|
|
|
|
30
|
|
|
|
34
|
|
Refined product
yields (mbpd):(f)
|
|
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
234
|
|
|
|
338
|
|
|
|
285
|
|
|
|
350
|
|
Distillates
|
|
148
|
|
|
|
228
|
|
|
|
181
|
|
|
|
243
|
|
Propane
|
|
6
|
|
|
|
8
|
|
|
|
8
|
|
|
|
8
|
|
Feedstocks and special products
|
|
17
|
|
|
|
104
|
|
|
|
40
|
|
|
|
84
|
|
Heavy fuel oil
|
|
15
|
|
|
|
24
|
|
|
|
20
|
|
|
|
24
|
|
Asphalt
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
Total
|
|
421
|
|
|
|
703
|
|
|
|
535
|
|
|
|
710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The per barrel for
Refining & Marketing margin is calculated based on net refinery
throughput (excludes inter-refinery transfer volumes). The per
barrel for the remaining items is calculated based on the gross
refinery throughput (includes inter-refinery transfer
volumes).
|
(b)
|
Sales revenue less
cost of refinery inputs and purchased products, divided by net
refinery throughput.
|
(c)
|
Includes refining
major maintenance and operating costs. Excludes planned turnaround
and depreciation and amortization expense.
|
(d)
|
Includes
inter-refinery transfer volumes of 51 mbpd, 47 mbpd, 48 mbpd and 42
mbpd, respectively.
|
(e)
|
Includes
inter-refinery transfer volumes of 9 mbpd, 10 mbpd, 9 mbpd and 9
mbpd, respectively.
|
(f)
|
Includes
inter-refinery transfer volumes of 10 mbpd, 45 mbpd, 17 mbpd and 37
mbpd, respectively.
|
Retail Operating
Statistics (Unaudited)
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
Speedway fuel sales
(millions of gallons)
|
|
1,197
|
|
|
|
1,957
|
|
|
|
2,833
|
|
|
|
3,828
|
|
Direct dealer fuel
sales (millions of gallons)
|
|
462
|
|
|
|
646
|
|
|
|
1,047
|
|
|
|
1,276
|
|
Retail fuel margin
(dollars per gallon)(a)
|
$
|
0.3960
|
|
|
$
|
0.2666
|
|
|
$
|
0.3577
|
|
|
$
|
0.2200
|
|
Merchandise sales (in
millions)
|
$
|
1,603
|
|
|
$
|
1,620
|
|
|
$
|
3,064
|
|
|
$
|
3,033
|
|
Merchandise margin
(in millions)
|
$
|
452
|
|
|
$
|
471
|
|
|
$
|
866
|
|
|
$
|
878
|
|
Merchandise margin
percent
|
|
28.2
|
%
|
|
|
29.1
|
%
|
|
|
28.3
|
%
|
|
|
29.0
|
%
|
Same store gasoline
sales volume (period over period)(b)
|
|
(36.6)
|
%
|
|
|
(2.4)
|
%
|
|
|
(22.7)
|
%
|
|
|
(2.8)
|
%
|
Same store
merchandise sales (period over period)(b)(c)
|
|
(4.0)
|
%
|
|
|
6.3
|
%
|
|
|
(1.8)
|
%
|
|
|
5.9
|
%
|
Total convenience
stores at period-end
|
|
3,873
|
|
|
|
3,913
|
|
|
|
|
|
|
|
Direct dealer
locations at period-end
|
|
1,074
|
|
|
|
1,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes bankcard
processing fees (as applicable).
|
(b)
|
Same store comparison
includes only locations owned at least 13 months.
|
(c)
|
Excludes
cigarettes.
|
Midstream
Operating Statistics (Unaudited)
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
Pipeline throughputs
(mbpd)(a)
|
|
4,380
|
|
|
|
5,178
|
|
|
|
4,800
|
|
|
|
5,214
|
|
Terminal throughput
(mbpd)
|
|
2,420
|
|
|
|
3,287
|
|
|
|
2,693
|
|
|
|
3,254
|
|
Gathering system
throughput (million cubic feet per day)(b)
|
|
5,490
|
|
|
|
5,948
|
|
|
|
5,621
|
|
|
|
5,950
|
|
Natural gas processed
(million cubic feet per day)(b)
|
|
8,476
|
|
|
|
8,535
|
|
|
|
8,632
|
|
|
|
8,528
|
|
C2 (ethane) + NGLs
fractionated (mbpd)(b)
|
|
543
|
|
|
|
520
|
|
|
|
548
|
|
|
|
517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes
common-carrier pipelines and private pipelines contributed to MPLX.
Excludes equity method affiliate pipeline volumes.
|
(b)
|
Includes amounts
related to unconsolidated equity method investments on a 100%
basis.
|
Select Financial
Data (Unaudited)
|
|
|
|
|
(In
millions)
|
June 30
2020
|
|
March 31
2020
|
Cash and cash
equivalents
|
$
|
1,091
|
|
|
$
|
1,690
|
|
MPC debt
|
|
11,607
|
|
|
|
11,138
|
|
MPLX debt
|
|
20,559
|
|
|
|
20,471
|
|
Total consolidated
debt
|
|
32,166
|
|
|
|
31,609
|
|
Redeemable
noncontrolling interest
|
|
968
|
|
|
|
968
|
|
Equity
|
|
30,849
|
|
|
|
31,228
|
|
Shares
outstanding
|
|
650
|
|
|
|
650
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
Cash provided by
(used in) operations
|
$
|
538
|
|
|
$
|
2,622
|
|
|
$
|
(230)
|
|
|
$
|
4,245
|
|
Dividends paid per
share
|
$
|
0.58
|
|
|
$
|
0.53
|
|
|
$
|
1.16
|
|
|
$
|
1.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
Management uses
certain financial measures to evaluate our operating performance
that are calculated and presented on the basis of methodologies
other than in accordance with GAAP. We believe these non-GAAP
financial measures are useful to investors and analysts to assess
our ongoing financial performance because, when reconciled to their
most comparable GAAP financial measures, they provide improved
comparability between periods through the exclusion of certain
items that we believe are not indicative of our core operating
performance and that may obscure our underlying business results
and trends. These measures should not be considered a substitute
for, or superior to, measures of financial performance prepared in
accordance with GAAP, and our calculations thereof may not be
comparable to similarly titled measures reported by other
companies. The non-GAAP financial measures we use are as
follows:
Adjusted Net Income Attributable to
MPC
Adjusted net income attributable to MPC is defined
as net income attributable to MPC excluding the items in the table
below, along with their related income tax effect. We have excluded
these items because we believe that they are not indicative of our
core operating performance and that their exclusion results in an
important measure of our ongoing financial performance to better
assess our underlying business results and trends.
Adjusted Diluted Earnings Per Share
Adjusted
diluted earnings per share is defined as adjusted net income
attributable to MPC divided by the number of weighted-average
shares outstanding in the applicable period, assuming dilution.
Reconciliation of
Net Income (Loss) Attributable to MPC to Adjusted Net Income
(Loss)
Attributable to MPC
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
(In
millions)
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
Net income (loss)
attributable to MPC
|
$
|
9
|
|
|
$
|
1,106
|
|
|
$
|
(9,225)
|
|
|
$
|
1,099
|
|
Pre-tax
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Equity method
investment restructuring gains
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(207)
|
|
Transaction-related
costs
|
|
30
|
|
|
|
34
|
|
|
|
65
|
|
|
|
125
|
|
Litigation
|
|
—
|
|
|
|
22
|
|
|
|
—
|
|
|
|
22
|
|
Impairments
|
|
25
|
|
|
|
—
|
|
|
|
9,162
|
|
|
|
—
|
|
LCM inventory valuation
adjustment
|
|
(1,480)
|
|
|
|
—
|
|
|
|
1,740
|
|
|
|
—
|
|
Out of period tax
adjustment
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
36
|
|
Tax impact of
adjustments(a)
|
|
548
|
|
|
|
(14)
|
|
|
|
(1,445)
|
|
|
|
14
|
|
Non-controlling
interest impact of adjustments
|
|
—
|
|
|
|
—
|
|
|
|
(1,271)
|
|
|
|
—
|
|
Adjusted net income
(loss) attributable to MPC
|
$
|
(868)
|
|
|
$
|
1,148
|
|
|
$
|
(974)
|
|
|
$
|
1,089
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income
(loss) per share
|
$
|
0.01
|
|
|
$
|
1.66
|
|
|
$
|
(14.21)
|
|
|
$
|
1.63
|
|
Adjusted diluted
income (loss) per share(b)
|
$
|
(1.33)
|
|
|
$
|
1.73
|
|
|
$
|
(1.50)
|
|
|
$
|
1.62
|
|
|
|
(a)
|
We generally tax
effect taxable adjustments to reported earnings using a combined
federal and state statutory rate of approximately 24
percent.
|
(b)
|
Weighted-average
diluted shares outstanding and income allocated to participating
securities, if applicable, in the adjusted earnings per share
calculation are the same as those used in the GAAP diluted earnings
per share calculation except for the three months ended June 30,
2020 which assumes no dilution and uses basic shares as a result of
an adjusted loss attributable to MPC.
|
Operating Cash Flow Before Changes in Working
Capital
Operating cash flow before changes in working
capital is defined as net cash provided by (used in) operations
less changes in current receivables, inventories, current accounts
payable and accrued liabilities, the fair value of derivative
instruments and right of use assets and operating lease
liabilities. We believe operating cash flow before changes in
working capital is useful as it is indicative of cash received or
used for operations based on current operating conditions without
the effects of working capital account fluctuations that result
from commodity price changes, timing of cash collections, inventory
purchases or accounts payable payments as compared to the prior
year-end reporting period.
Reconciliation of
Cash Provided by (Used in) Operations to Operating Cash Flow
Before
Changes in Working Capital
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
(In
millions)
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
Net cash provided by
(used in) operations
|
$
|
538
|
|
|
$
|
2,622
|
|
|
$
|
(230)
|
|
|
$
|
4,245
|
|
Less changes
in:
|
|
|
|
|
|
|
|
|
|
|
|
Current
receivables
|
|
1,218
|
|
|
|
(679)
|
|
|
|
3,117
|
|
|
|
(1,697)
|
|
Inventories
|
|
839
|
|
|
|
744
|
|
|
|
417
|
|
|
|
740
|
|
Current accounts
payable and accrued liabilities
|
|
(1,767)
|
|
|
|
(186)
|
|
|
|
(5,220)
|
|
|
|
1,297
|
|
Fair value of
derivative instruments
|
|
70
|
|
|
|
(56)
|
|
|
|
23
|
|
|
|
(27)
|
|
Right of use assets and
operating lease liabilities, net
|
|
6
|
|
|
|
10
|
|
|
|
2
|
|
|
|
9
|
|
Total changes in
working capital
|
|
366
|
|
|
|
(167)
|
|
|
|
(1,661)
|
|
|
|
322
|
|
Operating cash flow
before changes in working capital
|
$
|
172
|
|
|
$
|
2,789
|
|
|
$
|
1,431
|
|
|
$
|
3,923
|
|
Adjusted EBITDA & Segment Adjusted
EBITDA
Adjusted EBITDA and Segment Adjusted EBITDA
represent earnings before net interest and other financial costs,
income taxes, depreciation and amortization expense as well as
adjustments to exclude refining turnaround costs, items not
allocated to segment results and other items shown in the table
below. We believe these non-GAAP financial measures are useful to
investors and analysts to analyze and compare our operating
performance between periods by excluding items that do not reflect
the core operating results of our business or in the case of
turnarounds, which provide benefits over multiple years. We also
believe that excluding turnaround costs from this metric is useful
for comparability to other companies as certain of our competitors
defer these costs and amortize them between turnarounds. Adjusted
EBITDA and Segment Adjusted EBITDA should not be considered as a
substitute for, or superior to segment income (loss) from
operations, net income attributable to MPC, income before income
taxes, cash flows from operating activities or any other measure of
financial performance presented in accordance with GAAP. Adjusted
EBITDA and Segment Adjusted EBITDA may not be comparable to
similarly titled measures reported by other companies.
Reconciliation of
Net Income (Loss) Attributable to MPC to Adjusted
EBITDA
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
(In
millions)
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
Net income (loss)
attributable to MPC
|
$
|
9
|
|
|
$
|
1,106
|
|
|
$
|
(9,225)
|
|
|
$
|
1,099
|
|
Plus
(Less):
|
|
|
|
|
|
|
|
|
|
|
|
Net interest and other
financial costs
|
|
345
|
|
|
|
322
|
|
|
|
683
|
|
|
|
628
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
267
|
|
|
|
261
|
|
|
|
(717)
|
|
|
|
527
|
|
Provision (benefit) for
income taxes
|
|
360
|
|
|
|
353
|
|
|
|
(1,577)
|
|
|
|
457
|
|
Depreciation and
amortization
|
|
935
|
|
|
|
886
|
|
|
|
1,897
|
|
|
|
1,805
|
|
Refining planned
turnaround costs
|
|
162
|
|
|
|
237
|
|
|
|
491
|
|
|
|
423
|
|
Equity method
investment restructuring gains
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(207)
|
|
Transaction-related
costs
|
|
30
|
|
|
|
34
|
|
|
|
65
|
|
|
|
125
|
|
Litigation
|
|
—
|
|
|
|
22
|
|
|
|
—
|
|
|
|
22
|
|
Impairments
|
|
25
|
|
|
|
—
|
|
|
|
9,162
|
|
|
|
—
|
|
LCM inventory valuation
adjustment
|
|
(1,480)
|
|
|
|
—
|
|
|
|
1,740
|
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
653
|
|
|
$
|
3,221
|
|
|
$
|
2,519
|
|
|
$
|
4,879
|
|
Refining & Marketing Margin
Refining margin
is defined as sales revenue less the cost of refinery inputs and
purchased products.
Reconciliation of
Refining & Marketing Income (Loss) from Operations to Refining
& Marketing
Gross Margin and Refining & Marketing Margin
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
(In
millions)
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
Refining &
Marketing income (loss) from
operations(a)
|
$
|
(1,619)
|
|
|
$
|
906
|
|
|
$
|
(2,241)
|
|
|
$
|
572
|
|
Plus
(Less):
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
500
|
|
|
|
574
|
|
|
|
1,054
|
|
|
|
1,118
|
|
LCM inventory
valuation adjustment
|
|
1,470
|
|
|
|
—
|
|
|
|
(1,715)
|
|
|
|
—
|
|
(Income) loss from
equity method investments
|
|
19
|
|
|
|
(3)
|
|
|
|
22
|
|
|
|
(4)
|
|
Net (gain) loss on
disposal of assets
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
|
(6)
|
|
Other
income
|
|
(4)
|
|
|
|
(8)
|
|
|
|
(8)
|
|
|
|
(22)
|
|
Refining &
Marketing gross margin
|
|
367
|
|
|
|
1,469
|
|
|
|
(2,887)
|
|
|
|
1,658
|
|
Plus
(Less):
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
(excluding depreciation and amortization)
|
|
2,231
|
|
|
|
2,610
|
|
|
|
5,053
|
|
|
|
5,215
|
|
LCM inventory
valuation adjustment
|
|
(1,470)
|
|
|
|
—
|
|
|
|
1,715
|
|
|
|
—
|
|
Depreciation and
amortization
|
|
433
|
|
|
|
411
|
|
|
|
880
|
|
|
|
838
|
|
Gross margin excluded
from Refining & Marketing margin(b)
|
|
(66)
|
|
|
|
(142)
|
|
|
|
(163)
|
|
|
|
(259)
|
|
Other taxes included
in Refining & Marketing margin
|
|
(19)
|
|
|
|
(1)
|
|
|
|
(43)
|
|
|
|
(5)
|
|
Refining &
Marketing margin(a)
|
$
|
1,476
|
|
|
$
|
4,347
|
|
|
$
|
4,555
|
|
|
$
|
7,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refining &
Marketing margin by region:
|
|
|
|
|
|
|
|
|
|
|
|
Gulf Coast
|
$
|
437
|
|
|
$
|
1,090
|
|
|
$
|
1,414
|
|
|
$
|
2,007
|
|
Mid-Continent
|
|
819
|
|
|
|
2,193
|
|
|
|
2,154
|
|
|
|
3,710
|
|
West Coast
|
|
220
|
|
|
|
1,064
|
|
|
|
987
|
|
|
|
1,730
|
|
Refining &
Marketing margin
|
$
|
1,476
|
|
|
$
|
4,347
|
|
|
$
|
4,555
|
|
|
$
|
7,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
LCM inventory
valuation adjustments are excluded from Refining & Marketing
income from operations and Refining & Marketing
margin.
|
(b)
|
The gross margin,
excluding depreciation and amortization, of operations that support
Refining & Marketing such as biodiesel and ethanol ventures,
power facilities and processing of credit card
transactions.
|
Retail Fuel Margin
Retail fuel margin is
defined as the price paid by consumers or direct dealers less the
cost of refined products, including transportation, consumer excise
taxes and bankcard processing fees (where applicable).
Retail Merchandise Margin
Retail merchandise
margin is defined as the price paid by consumers less the cost of
merchandise.
Reconciliation of
Retail Income from Operations to Retail Gross Margin and Retail
Margin
|
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
(in
millions)
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
Retail income from
operations(a)
|
$
|
494
|
|
|
$
|
493
|
|
|
$
|
1,013
|
|
|
$
|
663
|
|
Plus
(Less):
|
|
|
|
|
|
|
|
|
|
|
|
Operating, selling,
general and administrative expenses
|
|
577
|
|
|
|
597
|
|
|
|
1,175
|
|
|
|
1,180
|
|
LCM inventory
valuation adjustment
|
|
10
|
|
|
|
—
|
|
|
|
(25)
|
|
|
|
—
|
|
Income from equity
method investments
|
|
(27)
|
|
|
|
(21)
|
|
|
|
(49)
|
|
|
|
(38)
|
|
Net gain on disposal
of assets
|
|
—
|
|
|
|
—
|
|
|
|
(1)
|
|
|
|
(2)
|
|
Other
income
|
|
(44)
|
|
|
|
(4)
|
|
|
|
(93)
|
|
|
|
(6)
|
|
Retail gross
margin
|
|
1,010
|
|
|
|
1,065
|
|
|
|
2,020
|
|
|
|
1,797
|
|
Plus
(Less):
|
|
|
|
|
|
|
|
|
|
|
|
LCM inventory
valuation adjustment
|
|
(10)
|
|
|
|
—
|
|
|
|
25
|
|
|
|
—
|
|
Depreciation and
amortization
|
|
132
|
|
|
|
130
|
|
|
|
257
|
|
|
|
256
|
|
Retail
margin(a)
|
$
|
1,132
|
|
|
$
|
1,195
|
|
|
$
|
2,302
|
|
|
$
|
2,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
margin:
|
|
|
|
|
|
|
|
|
|
|
|
Fuel
margin
|
$
|
657
|
|
|
$
|
694
|
|
|
$
|
1,388
|
|
|
$
|
1,123
|
|
Merchandise
margin
|
|
452
|
|
|
|
471
|
|
|
|
866
|
|
|
|
878
|
|
Other
margin
|
|
23
|
|
|
|
30
|
|
|
|
48
|
|
|
|
52
|
|
Retail
margin
|
$
|
1,132
|
|
|
$
|
1,195
|
|
|
$
|
2,302
|
|
|
$
|
2,053
|
|
|
|
(a)
|
LCM inventory
valuation adjustments are excluded from Retail income from
operations and Retail margin.
|
View original
content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-second-quarter-2020-results-301104550.html
SOURCE Marathon Petroleum Corporation